Dairy News Australia May 2014

Fonterra changes milk payment system Page 6

NO FUSS BALER User-friendly Welger Page 31

STARTING FROM SCRATCH Milking 3 times a day Page 24

may 2014 Issue 47

//

www.dairynewsaustralia.com.au

blue sky thinking Norco’s fresh milk export initiative takes flight page 5

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Dairy NewS AUSTRALIA may 2014

news // 3

Global prices fall from record highs Queensland farmer Craig Sellars faces the prospect of moving his farm business from the land his family has held for 134 years. PG.11

Queensland farmers Ross and Sally Hopper are about to lead Maleny Dairies to another level, a decade after the successful milk brand was established.

PG.18

THE FIRST Global Dairy Trade auction of May was down 1.1% on the previous sale with an average winning price of US$3950/t.

While the result was the sixth fall in a row – a fact made much of in mainstream media – it represented a levelling of prices after a fall of 2.6% three weeks earlier, and 8.9% before that.

At US$3950/t the average winning price is 21.7% down on the Feb 4 peak of US$5042/t.

Whole milk powder, the biggest product sold on the auction site by volume, fell 1.7% to $US3928/t, a 14-month low.

Dairy Australia industry analyst, John Droppert, said the weighted average price across all commodities has fallen 20% since early February, and is tracking around 19% below the same time last year (which was just after prices first spiked).

“Although rapid in the context of the months of price stability that

sellers enjoyed, this adjustment shouldn’t come as a surprise,” Mr Droppert said.

“With farmers in all exportfocused regions enjoying substantially higher farmgate milk prices for several months now, the incentive to boost production was bound to elicit a response.

“In a further contrast to the 2012/13 season, constrained feed prices are also improving the economics of incremental production increases, and many regions are enjoying favourable weather to boot. “ Mr Droppert said the result is more product on the market.

“To again take GDT as an example, the April 15 event saw 36,549 tonnes of product sold, 143% more than the same time last year.”

Current pricing is also a function of Chinese buyers’ reduced activity of late as record imports through March boosted their stocks, Mr Droppert said.

“With healthy inventories and a new season commencing at home, importers aren’t under pressure to contract ahead – and are disinclined to do so while prices are falling.

“As stocks run down, China is likely to start buying in more significant volumes again, which will not only remove more product from the market, but likely convince other buyers that opportunities to secure discounted product are nearing an end.

“With China expected to return as a significant buyer in the coming months and other purchasers enjoying much better affordability, stabilisation at prices that still provide above-average returns is a decent prospect heading into the 2014/15 season.”

Murray Goulburn announced its fifth step-up for the season last month, taking its weighted-average available price to $6.66kg/MS after raising the price of butterfat by 9c/ kg and protein by 19c/kg.

Replacing their ageing silage wagon was an easy decision for the Lang family, who recently bought another Schuitemaker.

PG.30

News ������������������������������������������������������3-15 Opinion ���������������������������������������������� 16-17 markets �������������������������������������������18-19 abvs ���������������������������������������������������� 20-23 management ������������������������������ 24-25 animal health ������������������������� 26-29 Machinery & Products ��������������������������������������30-34

Northern Victorian farmer Terry Malone says he’s never had more fun farming and credits this in part to his new irrigation system.

See page 25.

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The co-op has also revised its forecast for the full year from its current price of $6.66 up to $6.85/ kg MS. Managing director, Gary Helou, said external factors including fluctuating international commodity prices and currency movements may result in a final price that is higher or lower than this forecast.

“Global prices for dairy ingredients have decreased from their record highs in the past two months,” Mr Helou said.

“The Australian dollar has also seen some recent strength but remains lower than the same time last year when it was well above parity with the US dollar.

“As we look towards the 2014/15 season, these market movements will influence our farmgate price.

However, as the current year’s production is now largely sold, their impact on our current season price is limited,” he said.

Dairy News AUSTRALIA may 2014

4 // news

SADA Fresh one of state’s top selling milk brands More than 270,000 containers of SADA Fresh milk have been sold in South Australia since the brand was launched six months ago, making it one of the State’s top selling milk brands.

Full cream and low fat milk under the SADA Fresh label was launched by the South Australian Dairyfarmers’ Association last October under a special licensing agreement with Parmalat, and sold through Coles supermarkets across the State.

As part of the deal, SADA negotiated that 40 cents from every 2 litre bottle would go to supporting the brand, and financing projects that will benefit South Australian dairy farmers.

The brand is now returning about $20,000 a month.

SADA president David Basham said the brand and the fund was making a genuine difference to the state’s farmers.

“It has won the respect of agricul-

tural leaders across Australia, as well as federal and state politicians and decision-makers, helping to give SADA greater influence and to open the doors on potential new markets for local dairy products,” Mr Basham said.

“We are having conversations that just would not have been possible before.

“It’s also given our farmers a greater sense of pride in what they do and considerably more optimism about our future. And for that we have to thank the general public.

“South Australian consumers have warmly embraced the concept as a t angible way of supporting our farmers, and are buying SADA Fresh in quantities that exceeded our initial expectations.”

SADA president David Basham said the brand was returning about $20,000 a month, equating to about 10,000 units

sold every week.

Although sold exclusively through Coles supermarkets across the State for the first 12 months, SADA will look to make the brand available through other retailers, and extend the range of products sold under the label.

Its long-term goal is to secure 1% of the drinking milk market of 220 million litres (or 2.2 million litres).

The brand stemmed from a meeting in October, 2012, involving SA state MP and Mount Compass dairy farmer Robert Brokenshire, Coles Chief Operating Officer, John Durkan, and SADA CEO Ken Lyons.

Lyons suggested creating a regional milk brand, similar to the Great Ocean Road label packaged exclusively for Coles supermarkets in western Victoria by Warrnambool Cheese and Butter. Durkan thought the idea worth investigating and agreed to further

SADA president David Basham.

discussions.

After working through all the practical issues involved in creating, packaging and distributing a new milk brand, SADA’s senior management and board decided that the best approach would

be to work in conjunction with an established manufacturer, with facilities in South Australia.

Mr Basham has since held talks with the Queensland Dairyfarmers’ Organisation.

New farmer dairy fund available soon SA dairy farmers should be able to submit project applications to a new fund by October following the success of the SADA Fresh milk brand.

More than 270,000 containers of SADA Fresh milk has been sold since the brand was launched six months ago, making it one of the State’s top selling milk brands.

As part of the deal with Parmlat and Coles, the South Australian Dairyfarmers’ Association (SADA) negotiated that 40 cents from every 2 litre bottle sold would go to supporting the brand, and financing projects that will benefit South Australian dairy farmers.

AS part of this, Dennis Mutton has been appointed inaugural chair of the new fund.

Mr Mutton will lead a small board selected for its specialist expertise to

manage profits generated by the sale of SADA Fresh.

Announcing the appointment, SADA President David Basham said the organisation was extremely pleased Mr Mutton had agreed to take on chairing the fund during its crucial set-up phase.

“We could not think of a better person to lead it, and we feel very honoured that he has offered to waive sit-

ting fees as part of his contribution to what he sees as an exciting and ground-breaking initiative,” Mr Basham said.

SADA’s aim is to appoint other board members over the coming weeks.

Legal and financial arrangements for the fund will be formalised by the start of the new financial year, with enough money likely to be in hand to call for project applications before the brand celebrates its first anniversary.

Mr Mutton said he agreed to become involved with the fund because he was impressed by the concept and its potential to make a genuine difference to the

South Australian dairy industry.

“This is an industry association showing significant initiative and leadership,” he said.

“SADA Fresh provides the opportunity to demonstrate that by working collectively farmers can secure a more viable future.

“They are not sitting back and saying ‘woe is us’; they are doing something pro-active to generate opportunities and a return on investment.”

Mr Mutton’s brief is to make sure the fund is invested in a way that maximises returns to the local dairy industry.

Over the coming months this will involve helping to develop clear guidelines and protocols for the allocation process, including identifying research and development priorities, and criteria for selecting projects.

A former chief executive of South Australia’s primary industries department, Mr Mutton is Chair of the CRC for High Integrity Australian Pork and BioInnovation SA, and a member of the Premier’s Science and Industry Council.

He is a former chair of the national Grape and Wine Research and Development Corporation and the Council of Rural Research and Development Corporations, and has held directorships with the Australian Landcare Council and Australian Rural Leadership Foundation.

Since leaving the public service in 2002, he has worked as an independent consultant in the fields of industry and regional development, natural resource management, and the strategic management of research and development.

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Dairy Australia wants three dairy farmers to fill the levy payer representative positions on the six-person panel to undertake the Dairy Levy Poll Process Review.

The review was first signalled by former chair Max Roberts at last November’s AGM. The panel will be chaired by John Lawrenson, a former director of Bonlac Supply Company and United Milk Tasmania.

Former ADF president Chris Griffin and DA company secretary, Ross Joblin, are the other members.

The remaining three members of the panel will be levy payers selected from applicants by the presidents of the industry’s state representative bodies.

All levy payers are eligible to apply and should shortly receive a letter outlining the key requirements of panel roles and the application process.

Applications must be submitted by May 26.

Once the Panel has been fully established, levy payers will receive more information on how they can make submissions to the Review.

It is currently proposed that any recommended changes to the current levy poll process be presented to the industry at the November 2014 Dairy Australia Annual General Meeting.

“The goal is to ensure that the review process is as extensive and transparent as possible, that there is wide consultation with the industry and that it allows the views of levy payers to be clearly reflected by the panel as it considers whether any changes in the dairy industry levy poll process should be recommended,” Mr Lawrenson said.

Dairy NewS AUSTRALIA may 2014

news // 5

Norco sends fresh milk to China Australian pasteurised milk exports to China than 20 million litres of milk. each year. shipment of fresh milk to fresh milk to consumers This breakthrough has PGS, Dairy China occurred early this in China within the first come after 12 months of month when 4500 bottles 12 months of operation,” Connect and Norco collaboration between have implemented Mr McNamara said. of fresh milk from NSW PGS and Chinese officials an unprecedented Norco doesn’t have a co-op Norco were flown to develop rigorous quarantine clearance 20 million litre contract to Shanghai. agreement with China to quality assurance but is confident interest Norco’s milk will protocols that have now bring the delivery time from China will enable be sold as a premium been fully tested and well within the shelf them to build to that product for about officially sanctioned by life of fresh Australian level. $9 a litre in Chinese the relevant Chinese pasteurised milk.

The trial was supermarkets, a similar Mr Davey said up until agencies. conducted by NSW price to the equivalent As a products in the consequence, market. the PGS cold Norco is now “The pipeline has the capacity to deliver chain pipeline capitalising on a more than 20 million litres of fresh milk to has been successful trial China within the first 12 months.” supported of 1000 litres – Greg McNamara by changes of fresh milk to existing last month that China import saw fresh milk clearance procedures to now all export efforts delivered from Australian farmer representatives accommodate the limited have been hampered Dairy Connect, farmer farms to Chinese shelf life of fresh milk by lengthy testing and consumers in seven days. co-op Norco and imports from Australia. quarantine processes international export Norco chairman Greg PGS managing before shipment from consulting company, McNamara said the director, Peter Verry, said Australia – and again changes have opened the Peloris Global Sourcing the cold chain pipeline upon arrival in China. door for the farmer co-op (PGS). solution incorporates Accordingly, the Dairy Connect to access the burgeoning chairman, George Davey, export lead time for fresh stringent quality demand from Chinese assurance controls that milk typically ranged consumers for Australian said the commercially ensure the fresh milk viable cold chain pipeline from 14 to 21 days which fresh milk products. meets or exceeds China’s did not fit within the would open the door for “The pipeline has the normal shelf life for fresh food health and safety millions of litres of fresh capacity to deliver more

The first commercial

Norco chairman Greg McNamara.

standards.

“It ensures the product is maintained at optimal temperature at all times during transit, and incorporates an innovative product

security system that identifies and tracks the location of individual units.”

Norco has a new contract with Coles kicking off in July and, to

meet demand, Mr Kelly said the co-operative had increased production from Northern Rivers members and taken on 60 new farms in Queensland.

A ‘game changer’ for northern states Norco’s new fresh milk pipeline

to China has been described as a “real game changer” by Queensland Dairyfarmers’ Organisation president (QDO) Brian Tessmann.

Mr Tessmann said he applauded news that the process for taking fresh milk from Australian farms and landing it into dairy cabinets in China has become simpler.

“This could be a real game changer,” Mr Tessmann said.

“This is especially the case for the northern dairy industry, including

NSW and Queensland, where we predominantly specialise in fresh drinking milk production for the domestic market and currently have very limited capacity for other export avenues such as milk powder or cheese.

“With the news that Norco is sending commercial shipments of fresh milk, this will help open another, potentially major high value, export door for Norco farmers.”

Mr Tessmann said he hoped the process started the “much needed”

path of diversification of markets for the northern dairy industry.

“The northern dairy industry desperately needs new market avenues that help farmers gain better returns at farm gate, create more competition for Queensland fresh milk and challenge the ‘milk price war’ and supermarkets selling fresh milk at the ridiculous price of $1 per litre which has caused market failure in our region,” he said.

“If ventures such as this take off – which I believe they have

enormous potential to do – it will very quickly send a message to the major supermarkets that they cannot take Queensland fresh milk or dairy farmers for granted.”

Mr Tessmann said that the industry was realistic that fresh milk exports to Asia would not solve the challenges facing the industry overnight, but he also pointed to the enormous potential in the growing Asian middle class.

“A recent conference in Cairns looked at this very issue of servicing

the rapidly growing demands for clean, green, Australian produce in China and Asia.

“There is a very strong and increasing desire to grow export markets, both in Australia and in Asia, and QDO continues to applaud all those involved in these ventures.

“QDO is keen to support, and is continuing to work with, governments and industry partners on similar such ventures that can assist the Northern dairy industry to rebuild and to have a brighter future.”

Dairy News AUSTRALIA may 2014

6 // news

Fonterra changes pricing Fonterra Australia has over-

hauled its milk pricing structure, claiming it is easier to understand, reduces risk and complexity, and above all is fairer to all suppliers.

Fonterra Australia managing director, Judith Swales, said many of their suppliers said a simpler milk price system would better support farm profitability and informed decision making on-farm.

“We listened to that feedback and agreed we needed to actually do something to lead the industry forward,” Ms Swales said.

“The new system is simpler, fairer, equitable, and more transparent.

“It will reduce the range of prices paid to farmers against the average and will help them understand the impact milk price and incentives have on their farm businesses so they can make more informed decisions on farm.

“I believe it will be instrumental to

setting up farmers and the industry for Off-peak Payment category.

Fonterra said SRP was removed long-term, sustainable growth.”

The new system was developed over and reinvested into off-peak pricing to more than a year in partnership with reduce risk for farmers and maintain Bonlac Supply Company (BSC) and col- a price signal for the value of off-peak milk to its cuslaboration with tomers industry experts It said the such as wellBoost growth known industry “It’s a great change incentive (payconsultant John and I hope it spurs the for growth Mulvany, the rest of the industry to ments in milk producUDV, and intertion) will be reinnational pricing take notice.”

– John Mulvany vested back into system experts. base price and Under the growth will be new system, the supported outmilk pool stays the same, but suppliers will receive a side the pricing system to make it more higher base price (with money paid attractive and material for farmers in under the former Boost category now an expansion phase. Ways to support growth will be announced closer to the paid as part of the higher base price).

The Seasonal Payment, SRP and season.

Production payments will remain SRP+ (Seaonal Ratio Payment) categories have been replaced with a single according to their current terms.

Monthly prices will stand alone and won’t be linked to production in other months.

Fonterra said compensation will be available for the next two years for suppliers who do not receive more money under the new system.

BSC Chairman Tony Marwood said the new system will make it easier for farmers to understand their milk price and will assist them in making informed decisions for their farm businesses.

“We’ve worked very closely over the past year with Fonterra Australia and I’m pleased the new system really captures the feedback we got from our farmers,” Mr Marwood said.

“It will send clear pricing signals for farmers and let farmers focus on running their farms and making decisions that increase their profitability, rather than deciphering milk price.”

John Mulvany said although milk price is important for farmers, many

other areas – such as costs of production – impact a farmer’s bottom line and profitability.

“My research confirmed that complexity in milk pricing doesn’t support good, profitable decision making on farm,” Mr Mulvany said.

“Some farmers confuse a high cost of production with out-of-season milk, but some farmers simply produce milk at much lower costs than others.

“That’s why it’s better to have a simpler, more transparent system that lets farmers produce milk when it best suits their business and is most profitable for them.

“I’m pleased Fonterra has recognised this and put in place a system that farmers can easily understand and use to make informed decisions for their farm businesses.

“It’s a great change and I hope it spurs the rest of the industry to take notice.”

Suppliers won’t lose money for two years Fonterra’s new

pricing system has been described as more equitable and “a gutsy move” by one long-time supplier.

Linda Roache, who milks around 300 cows at Woolsthorpe in southwest Victoria, said the new system was a huge leap in the right direction.

Mrs Roache has been on the Fonterra supplier forum for the past six years and was involved in cluster meetings to explain the roll out of the new pricing structure.

The forum had been advocating for a better and

simpler pricing system for several years.

“I think it is a more equitable way of distributing the milk pool,” Mrs Roache said.

“Fonterra is being proactive in looking after their suppliers. To build more into the base price is long overdue. It is a gutsy move

by Fonterra to go out with this first.”

Mrs Roache expects other processors to follow.

“How can they compete if they don’t,” she said.

She said the system also stopped sending the wrong signals to farmers.

“The whole onus is to stop people chasing production bonuses that they weren’t achieving sustainably. There’s no point getting to 41, 42 or 43% SRP Plus if you spend too much money chasing it and fall short by a few thousand litres. The risk there was incredible.”

“The timing of the messages to promote confidence or knock it on the head is critical in a dairy season.”

Mrs Roache said there was potential for her farm to make more money out of it but “I am guaranteed

Linda Roache

not to lose any money for the next two years and that is a really important parachute for any business”.

“In dairy farming I have never heard those words before.”

Mrs Roache said the

“honeymoon period” of two years would be valuable for farmers to see how their milk volume works in the new pricing system compared to the old system.

“That is a clever way of launching a new pricing system.”

Mrs Roache said the new structure was well received when details were revealed at regional cluster meetings in early April.

“Some of the people who were getting SRP and had been making money out of things that had been dropped showed a bit of

concern, but they were reassured by the fact that for the next two years they couldn’t lose any money.”

“They will make their decisions in that time on how they adjust their business or look at alternatives.”

Mrs Roache said the system would encourage farmers to look at how they could reduce costs to manipulate their bottom line.

“The days are gone when you could just get out there and milk the cows and hope for the best.”

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Dairy NewS AUSTRALIA may 2014

news // 7

MG’s $127m factory upgrade Murray Goulburn

will invest $127 million to upgrade three of its existing sites in Victoria and Tasmania over the next 12 to 18 months. The projects are dependent on upgrades to regional infrastructure, particularly energy, and Murray Goulburn will seek to work with the Govern-

ment and energy providers to deliver the upgrades.

MG managing director, Gary Helou, said the co-op will invest $74m in cheese facilities at its Cobram factory, $38m in infant nutrition at Koroit and Cobram and $14m in dairy beverages at Edith Creek in Tasmania.

Bright Dairy UHT milk.

Shepparton plant will grow with Chinese demand A NEW $45 million UHT milk processing plant in

Shepparton has the capability of lifting capacity to 300 million litres of milk a year to service high value Asian markets.

The Pactum Dairy Group’s new plant was officially opened earlier this month, producing UHT milk in 250ml, 330ml and one litre packs.

It is currently processing 100m litres of milk per year.

Pactum Dairy Group signed a supply agreement last month for premium high quality dairy milk with the Chinese Government-owned Bright Dairy, one of the country’s largest companies with total sales last year of US$2.6 billion.

Bright Dairy sells fresh milk, cheese, powder and yogurt under six brands, distributed throughout China through 400 distributors and in more than 400,000 sales outlets.

Freedom Foods managing director, Rory Macleod, said his company was pleased to be aligned with a market-leading company with the resources and capability to market and distribute premium dairy products.

“PDG will look to further building on its relationship with Bright Dairy in the longer term as it expands its product and market presence.”

Mr Macleod said Australia has a unique advantage in the supply and manufacture of high quality premium foods.

“With increasing demand from markets in China and SE Asia for high quality value added product, Australia through companies such as Pactum, is well placed to play an important role in this supply chain.”

Building off Australia’s competitive advantage in sourcing high quality dairy milk at a competitive world price, Mr Macleod said PDG would provide long term supply of value-added dairy milk products, based on state of the art low cost manufacturing assets in UHT packaging formats.

“In the future, enhanced trade arrangements between Australia and China will further increase trade between our two countries and build a stronger strategic alignment for the benefit of both countries,” Mr Macleod said.

“The three projects involve investment in world-leading technology with state-of-the-art automation for processing and packaging a range of dairy foods destined for Asian and Australian consumers,” Mr Helou said.

“The plants will carry superior capabilities to

customise dairy products for local preferences with efficiency and speed to meet the growing demand for high quality and safe dairy foods from Australia.”

The $74 million investment at Cobram will build a cheese cut and wrap facility to serve Australian

and Asian consumer and food service markets.

The $38 million investment at Koroit and Cobram will increase capacity for production of nutritionals for growing international infant nutrition markets.

The $14 million investment at Edith Creek will

install and commission a flexible small format cup and bottle filling line to commercialise a range of dairy beverage products for consumer markets in Australia and Asia.Mr Helou said these announcements follow decisions made last year to invest $120 million in two

new liquid milk facilities in Melbourne and Sydney to service the co-op’s 10-year deal with Coles, $19 million in projects to increase UHT capacity at Leongatha, $5 million for consumer butter at Koroit, and $2 million to increase cheese capacity at Cobram.

Dairy News AUSTRALIA may 2014

8 // news

Commission of Audit report provokes outrage FARM GROUPS across the country have shaken their heads that the National Commission of Audit report would target research and development as a saving, when

the return on investment is so great.

The Queensland Farmers Federation said the report provides “a seemingly very shallow analysis of key issues and where

savings could be made”.

“In many instances, much more sophisticated modelling is needed to analyse the impact of some decisions,” the Queensland lobby

group said.

“For example, its recommendation to reduce funding to the Rural Research and Development Corporations would see the Australian agri-

cultural sector fall behind the rest of the world in its productivity and profitability, eventually costing the economy far more than it would save.

“If the Government

adopts this proposal, it will mean the death of our Research and Development Centre which delivers vital services to our industry,” Mr Jones said.

“The dairy industry is export reliant. We compete with the best industries from all over the world, so it is essential we continue to invest in new products, technologies and innovations.

“The most recent evaluation of RDCs, reviewed

by Treasury and the Department of Finance, found for every A$1 invested, $10.51 is gained over 25 years.

“The Coalition understands the value of this investment as it made an election promise to increase the Commonwealth’s spending on rural R&D by $100 million.”

National Farmers Federation CEO, Matt Linnegar, said reducing industry assistance in the form of government commitment to research and

development, drought funding, and abolishing Rural Financial Counsellors suggests the Commission of Audit has a limited understanding of agriculture.

“The fact is there is simply no ‘fat’ to cut in agricultural investment by the Government if the ultimate aim is a stronger economy.

“The commission report claims that industry assistance has been increasing.

This is not the case for the agriculture sector.

According to the OECD figures, Australian Government provided support to agriculture was worth almost 13% of farm income in 1986; and the figure is now less than 3%.

This compares with our international competitors receiving up to 60%.

“Government’s role is to invest in outcomes that deliver a public benefit. And in several of these areas, there is a clear role for Government.”

Port of Melbourne sale would hurt Tasmanian farmers THE VICTORIAN Government’s decision to lease

the Port of Melbourne to the private sector has angered the Tasmanian Farmers and Graziers Association.

Farmers fear steeper increases in charges for handling their produce than if the port stayed in government hands yet there is no alternative port available, said the association’s chief executive Jan Davis.

The Victorian government has confirmed that under the federal government’s 15% bonus to encourage states to sell their assets, it would lease out the Port of Melbourne for at least the next 40 years to pay for major infrastructure projects.

In a separate move the government has sold the rights to build a third international container terminal at the port to an international consortium of Anglo Ports Pty Ltd and Philippines-based group International Container Terminal Services Inc. Ms Davis said the potential impact on Tasmania was immense. “Tasmania is the biggest single customer of the Port of Melbourne. Up to 30% of freight passing through the port is dispatched from, or destined for, Tasmania,” she said.

“Nearly half of that – 12% of all movements – comes from Tasmanian farmers.

“We have no option but to send our produce through that port, as it is effectively the only access we have to the mainland and to export markets.”

Ms Davis said user charges had increased enormously recently. While a private enterprise operator might run a more efficient port administration, they would also seek to maximise profits. There is no incentive for savings to be passed through to farmers, or other customers.

Dairy NewS AUSTRALIA may 2014

news // 9

Asia a pipedream without long-term national plan Australia needs

a long-term national food plan, a widespread shift to higher-value products and to trade more effectively on its reputation for growing safe food if it is to capitalise on the emerging Asian market.

Australia has the potential to feed 60 to 80 million people but the future of food production for export will depend on productivity increases, according to a new report from the Academy of Technological Sciences and Engineering (ATSE).

The Academy’s newest report, Food and Fibre: Australia’s Opportunities, assesses the current state of Australia’s food and fibre sector to identify challenges and potential areas of growth.

It emphasises the need to support the agricul-

tural innovation system through ongoing investment in research and development in order to achieve the increases in productivity that will be required for this sector to remain competitive and develop emerging export opportunities.

The report was launched at a Rural Press Club of Victoria breakfast last month by report author Professor Snow Barlow of Melbourne University.

“Considerable research innovation and capacity development will be required to provide the technical and economic basis to successfully pursue these strategies towards capturing an increased share of the emerging Asian middle class food and fibre market,” Prof Barlow told

innovation.

Australia needs better networks and connectivity between researchers, growers, producers and marketers.

The ATSE report recommended a national approach to branding Australian agricultural products, recommending a ‘Brand Australia’ concept.

“It’s all about things you actually get on the table that have a brand on them not commodities that you put in someone’s silo or commodities that you put in someone’s freezer to get minced,” Prof Barlow said.

“Australian produce has a very good reputation internationally as being safe, quality and traceable.

“We need to brand products in order to get ■■

Professor Snow Barlow

the audience.

Among the report’s recommendations are: ■■ Australia needs a longterm policy vision with focus on export growth and high value-add, resulting in enhanced profitability that flows back to all sectors, including farm-gate.

■■ Australia needs to build and promote global brand recognition of Australia’s food and fibre products – Brand Australia.

■■ Australia must stay ahead of the pack in

that value that we actually have in our produce because of its record.”

A united approach was also needed if Australia wanted to help feed the world’s growing population.

“The Victorian Department of Environment and Primary Industries did put out an actual plan for Victoria in terms of Asian

food (demand) a few weeks ago which I think was a very good move forward but this plan has got to be a national plan, it has got to be driven by the minister and it’s got to be something that doesn’t wobble between governments,” Prof Barlow said.

“Governments come and go and it would be tweaked as the markets

evolve but it needs to be something that we stick to for at least a decade.”

While the current White Paper was a government-led process, Professor Barlow said there was no Ministerial council to guarantee implementation.

He said he hoped the ATSE report would influence the White Paper.

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Other exporting nations surpassing Australia Australia risks missing a “golden opportunity” to grow its agricultural sector, and addressing this requires a concerted and coordinated approach from all sector stakeholders, according to a Rabobank report.

Agriculture in Focus 2014: Competitive Challenges says Australian agribusiness is facing mounting competitive threats throughout the supply chain, which require resolute and aligned action from industry and government.

Rabobank’s Luke Chandler said Australia risked failing to capitalise on rising demand for food from Asian without a more co-ordinated effort from industry and government.

“Many of Australia’s competitors in agricultural markets around the world are investing heavily and becoming much more productive, and this is very much raising the bar for our agricultural industries.”

“We need to realise that Australia is not the only agricultural exporter looking to capture this increasing demand,” he said.

“Over the past decade highlyresourceful developing countries have begun to assume a greater role in the global export trade of

tors such as exchange rates and food and agriculture products.

“The potential of countries wage costs are beyond the sector’s in South America and Eastern control, many other issues can be Europe is obvious, but even some successfully addressed through the major food-importing countries concerted and coordinated action and regions, such as China and the of industry and government institutions,” he said.

ASEAN-5 nations, are “There is no quesplaying a greater role tion that a food and in shaping the export agriculture sector that landscape.” has better access to Mr Chandler said global markets, ready higher on-farm costs access to capital, more and slowing producefficient logistics infrativity growth in many structure, higher value sectors in Australia Luke Chandler product and processes, relative to global peers have increased the importance of a highly sustainable environmendriving efficiencies in alternate tal impact, and more affordable production inputs will be better parts of the supply chain.

“This requires commitment to placed to capture the ‘Asian dining a unified industry-wide, long-term boom’.”

However, Mr Chandler said the strategy to invest in infrastructure improvement which involves uni- objective should not be for Australateral input from government, lia to feed the world.

“The reality is Australia is not in supply chain operators and indusa position to supply and compete in try participants.”

Mr Chandler says that while the the high-volume markets.

“Rather our focus needs to be on solution to the competitive challenges to Australian agriculture developing into high-value markets does not lie in any one direction, where we can compete on quality there is a ‘road map’ that can guide and other sought-after attributes industries to build a more compet- where consumers have the capacitive and sustainable base for the ity to pay. Australia will not be the food bowl of Asia, but we can be the sector into the future.

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Dairy News AUSTRALIA may 2014

10 // news

New criteria sees China cut infant formula brands CHINA HAS imposed strict accredita-

tion criteria on suppliers of infant formula which has cut access to more than 100 former suppliers.

China is seeking an integrated supply chain, according to Keith Woodford, professor of agribusiness at New Zealand’s Lincoln University, who is currently in China working on agribusiness projects.

“They want to see companies that have control of the supply chain from the time the milk comes out of the udder of the cow right through to the final formulation, and they want to be able to talk to one person who has control and who can make decisions and report on the whole supply chain,” Prof Woodford said.

“In the infant formula area there are many sensitive issues in regards to the health of small babies.

“They simply want a few large scale companies they can be confident have total systems in place which they can monitor.

“But when you have 60 or 100 different brands coming into China, they are

saying this is hopeless for guaranteeing food safety.”

A 2008 scandal in which domestic milk was deliberately adulterated with melamine, a byproduct of coal, in order to fake protein tests is still hurting Chinese dairy producers more than five years on.

Foreign infant formula brands now account for half the market, up from about 30% before the revelation that at least six infants had died and 300,000 were made ill after drinking tainted formula.

Since then, Chinese parents have snapped up infant formula with any international connection, allowing foreign brands to charge a hefty premium and spawning a homegrown industry of smugglers hauling boxes of formula into the country.

The new rules require dairy products produced overseas to be registered with the quality watchdog, or be barred from entry at China’s ports.

A second regulation requires all formula sold in China to carry Chineselanguage labelling affixed at the source.

China is cutting the number of infant formula brands avaialble in the country in a bid to bolster food safety.

China imported a record 1m tons of milk powder last year. In the first quarter of this year, imports rose nearly 24% to 240,000t. One of the biggest beneficiaries from Chinese consumer’s decision to source imported formula has been New Zealand, and their suppliers

will feel the brunt as a result.

There are currently 127 NZ companies supplying infant formula to China, and these will be reduced to six.

“There have been a lot more tiny infant formula companies out of New Zealand than anywhere else,” Prof

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“Switzerland has only a few very big companies, including the likes of Nestle, but New Zealand has had a proliferation of small-scale companies.

“It has this huge proliferation of brands specifically for China.”

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news // 11

New dams would affect farmland The Queensland Government will consider increasing the size of Wivenhoe Dam and constructing a number of new dams to lessen the impact of future major floods in Brisbane and Ipswich.

However, farmland would be a victim of the proposed changes.

Premier Campbell Newman said the locations of eight new dams had been identified which would potentially protect thousands of homes and businesses.

“This is very early days and I

stress to those landowners in the areas affected that there is a lot of work that needs to be undertaken before any plans are implemented,” Mr Newman said.

“But it is our duty to do whatever work we can to investigate all possible options.”

Mr Newman said he understood this would worry rural landowners in the Brisbane Valley.

“I say to them, we will deal with this sensitively and carefully,” he said.

Possible new dam sites include the upper Brisbane River (near Linville), the Cooyar Creek (near Benarkin National Park), Emu Creek (near Harlin), the Bremer River (near Mt Walker), the Stanley River (near Peachester), Tenterhill Creek (near Gatton), Lockyer Creek (near Murphy’s Creek) and Cressbrook Creek (near Kipper).

The State Government says it does not know how it will afford to build new dams in the south-east.

Water Minister Mark McCardle

told the ABC the projects would be expensive.

“This is very early days,” he said.

“Our focus at this point in time is on building dams, but again I get back to the point that these dams will cost a lot of money to build.

“We’d like to have federal help but we can’t be guaranteed of that, so it could fall back on the state.

“We need to work out how we’re going to pay for that - that’s a question we have to face in the very near future.”

Apply Liquid Urea Silver lining in potential move Rosevale dairy farmer Craig Sellars faces the prospect of moving his farm business from the land his family has held for 134 years. But despite the emotional pull, he sees a silver lining.

The Sellars farm has been prone to flooding through the generations but the family has persisted through adversity.

As the Queensland Government considers building dams to combat flooding in the south-east of the state, the fifth-generation farmer realises his dairying operation could soon be under water.

However, as long as he can continue dairying in another location, Mr Sellars is open to change.

“If it did come I’d shed a bit of a tear because we’ve been there so long, but maybe I could improve myself by buying a better farm in another location,” he said.

“We would have to discuss it as a family, but I’m getting to a point where I don’t want to look back and prefer to look forward. If they offer the right money I’ll go somewhere else to keep farming.

“They’re trying to save the flood-prone towns downstream, particularly Ipswich, and we understand that.

We only have to have wrong rainfall in the wrong spot and it can do a lot of damage.”

Mr Sellars, 33, said dairy farming remains in his blood and despite tough times in Queensland he has no plans to leave the industry.

“Farming is all I ever wanted to do since I was old enough to understand what it was all about. It’s in my blood,” he said. “I always wanted to come back on the farm and never liked being in town. I love working with the cows, the machinery, everything about it.

“Our dairy is quite low in a valley and gets quite wet.

There’s always some form of flood or wet problem,” Mr Sellars said.

The farm was a victim of last year’s deluge.

“Between rotting crops, washing out crops, erosion, wiping out fences, there was a lot of destruction,” Mr Sellars said.

The damage forced the family to end a sideline hay production and selling business.

“Over the years we’ve done a lot of different things and diversified into production and sales of lucerne and cereal hay. That stopped after the floods and we returned the land to cropping for the dairy,” Mr Sellars said.

Despite his love for dairying, Mr Sellars admits times have been tough in Queensland.

“It’s been a combination of a lot of things. The floods hit hard and then there was dry weather for the past 9-10 months. People can’t afford to be buying feed at the price that it is. Costs are just going through the roof but the milk price isn’t keeping up. Recent rain has eased the pressure at bit.”

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Dairy News AUSTRALIA may 2014

12 // news

Coles’ strong-arm tactics result in court The consumer watchdog will take Coles to the Federal Court over claims it tried to extract $16 million from 200 suppliers.

In the Australian Competition and Consumer Commission (ACCC) claims registered with the Federal Court, Coles’ target was to obtain $16m in “rebates” from smaller suppliers through its Active Retail Collaboration (ARC) program.

The ACCC says Coles engaged in unconscionable conduct under its ARC program and convened the Australian Consumer Law (ACL).

Coles has said it would “vigorously defend the allegations made against if by the ACCC”.

“The ... legal action concerns a detailed supply chain program

implemented by Coles over two years ago as a part of its strategy to develop a more efficient and internationally competitive supply chain,” Coles said in a statement.

“The project involved improvements to both supply chain collaboration and efficiencies in logistics. It was designed to deliver benefits to Coles, suppliers and customers through lowering costs and improving availability of stock in our stores.”

The ACCC alleges that in 2011, Coles developed a strategy to improve its earnings by obtaining better trading terms from its suppliers.

It is alleged that one of the ways Coles sought to improve its earnings was through the

the accc alleges coles ❱❱ Provided misleading information to suppliers about the savings and value to them from the changes Coles had made. ❱❱ Used undue influence and unfair tactics against suppliers to obtain payments of the “rebate”. ❱❱ Took advantage of its superior bargaining position by, amongst other things, seeking payments when it had no legitimate basis for seeking them. ❱❱ Required suppliers to agree to the ongoing “rebate” without providing them with sufficient time to assess the value to their business.

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bargaining position, so that its overall conduct was in all the circumstances unconscionable,” ACCC chairman Rod Sims said.

“The conduct of Coles alleged by the ACCC in these proceedings was capable of causing significant detriment to small suppliers’ businesses.”

These proceedings arise from a broader investigation by the ACCC into allegations that supermarket suppliers were being treated inappropriately by the major supermarket chains.

That broader investigation is continuing.

The matter is listed for a directions hearing in Melbourne on June 6.

The Australian Dairy Farmers and National Farmers Federation have both welcomed the ACCC’s legal action against Coles, and repeated calls for a mandatory code of conduct.

The ACCC has alleged that in 2011, Coles sought to boost earnings by requiring grocery suppliers to pay ongoing rebates, and if the supplier declined the agreement, allegedly threatened them with commercial consequences.

The NFF has raised concerns over particular areas which are the subject of the allegations, including Coles’ use of undue influence and unfair tactics against suppliers in order to obtain payments, and its ability to take advantage of its superior bargaining position.

If proven true, this type of behaviour in the market place is capable of causing significant detriment to small business operators, said NFF President Brent Finlay.

“The NFF recognises the importance of an Australian food supply chain where all players – farmers, processors and retailers – have the opportunity to make a profit, and that there’s not a misuse of market power by one player against another.

“That’s why it’s important that these particular allegations are aired in court and that Coles has a chance to respond.”

ADF President, Noel Campbell, said the ADF looked forward to the result of the court case.

“This latest action by the ACCC once again highlights the need for a Mandatory Code of Conduct, including the establishment of an independent Supermarket Ombudsman with penalties to balance the excessive power of the major retailers.

“ADF will continue to lobby Government as well as engage in dialogue with the major retailers about the code.”

The NFF also wants a mandatory code. It was actively involved in the development of a prescribed voluntary code with retailers and processors before leaving negotiations, sighting a loss of confidence.

Coles said this month it had supported a code of conduct proposed by the industry, which is currently being assessed by the Federal Government.

However, the ACCC said the code would not prevent the type of behaviour alleged in their court action.

“You can drive a truck through the code,” ACCC chairman Rod Sims said.

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introduction of ongoing rebates to be paid by its suppliers in connection with the Coles ARC program, based on purported benefits to large and small suppliers that Coles asserted had resulted from changes Coles had made to its supply chain.

The ACCC says Coles was ultimately seeking an ongoing ARC rebate in the form of a percentage of the price it paid for the supplier’s grocery products.

The ACCC alleges that in relation to 200 of its smaller suppliers, Coles required Rod Sims agreement by the supplier to the rebate within a matter of days.

If these suppliers declined to agree to pay the rebate, Coles personnel were allegedly instructed to escalate the matter to more senior staff, and to threaten commercial consequences if the supplier did not agree.

The ACCC alleges that, in a number of cases, threats were made when suppliers declined to agree to pay the rebate.

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Dairy NewS AUSTRALIA may 2014

news // 13

Arla Foods targets Chinese taste buds HOW DO you win the hearts of dairy consumers in China?

Danish dairy processor Arla Foods aims to do this by developing products that appeal to their taste preferences and food habits.

Central to this project is a US$1.8 million innovation lab opened last week in Beijing. It brings together Danish and Chinese innovation to develop cheeses and other dairy products.

Located in the ChinaDenmark Milk Technology Cooperation Centre in Beijing, the lab has Arla and Mengniu Dairy Group working to strengthen the Chinese dairy industry’s milk quality, food safety and quality control on the dairy farms. The principles applied are based on those guiding Arla’s European quality programme Arlagården.

The Prince Consort of Denmark opened the lab which will employ four people including cheese-

makers and innovation specialists with Danish or Chinese background. They will work with customers, consumer groups and Mengniu.

Arla senior vice president Frede Juulsen, responsible for Arla’s business in China, says more Chinese consumers are experimenting with food, wine and tastes.

“We are striving to be as close to the Chinese consumer as possible to create taste experiences that suit their diets and taste profiles, thereby bringing health and inspiration to China.

“We aim to take the lead in the cheese category in China, and building a cheese lab is a key step… a place where we can cocreate and innovate in an agile and dynamic manner.”

Chinese have recently been gaining an appetite for cheese.

Arla’s business in China is based on the export of dairy products

Two dairy scholarships available

from Europe including milk powder, UHT milk and cheese.

The innovation lab in Beijing will enable Arla to launch products developed and produced exclusively for Chinese

consumers.

“It’s all about developing the next blockbuster product for the Chinese dairy market. Our first focus will be to create the right kind of cheese products that will make more

Chinese consumers love cheese in new and different ways.

“But it must be done in a way that respects and contributes to the food trends developing in China.”

Winning a slice of China’s cheese trade: Arla Foods is partnering with Mengniu Dairy to develop cheeses to suit local tastes.

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The opportunity to investigate agriculture on

a global scale is now open through two dairy scholarships available through Nuffield Australia.

Applications are required by June 30, with interviews held in July and August. Scholarships are awarded in September with the Scholarship travel commencing next year.

There is a scholarship available for a dairy farmer anywhere in Australia, supported by Dairy Australia, and a second scholarship available for a dairy farmer based in Victoria, supported by the Gardiner Foundation.

The successful applications receive a total of 16 weeks international travel. This begins with a six week Global Focus Program of group travel to the powerhouses of agriculture such as China, India, Brazil, USA, Canada and Europe.

Additionally each Scholar undertakes a further 10 weeks of travel to countries of choice to pursue an individual study program into a research topic of interest to themselves and to the industry.

The Nuffield network provides assistance to develop itineraries for individual study programs and gain access to the key institutions and people central to the Scholar’s area of study.

Scholars then become part of a powerful alumni network of scholars right around the world, providing lifelong opportunities for further learning and friendship.

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NEXT ISSUE: JUNE 2014 CALF REARING

The most successful dairy farmers know that future production and therefore profit is made or lost at calf rearing. Young stock are the farm’s future earners. In this special report we focus on the best practice in calf rearing, featuring the latest in techniques, technology, nutrition and animal health.

BOOKING DEADLINE: May 28 MATERIAL DEADLINE: June 3 PUBLISHED: June 10 CONTACT: CHRIS DINGLE | T: 0417 735 001 E: chris@dairynewsaustralia.com.au

Dairy News AUSTRALIA may 2014

14 // world news

Farmers should consider global retail trends pam tipa

KEY TRENDS in food, nutrition and health are good news for dairy because they all align in favour of dairy products – but not the traditional ones, says a UK food marketing expert.

Farmers should stop thinking only as producers and start learning about what their product is made into because it’s important for the future, said Dr David Hughes, professor of food marketing at Imperial College London.

Consumers in the Western world are interested in naturally functional foods. There’s a huge interest in energy foods and protein, seniors’ and kids’ nutrition and

healthy snacking. All these relate to dairy products.

Similarly there’s concern with weight management and its link with protein, Hughes said.

“All the big megatrends are facing in the same direction for dairy which is good news.”

In the biggest consumer markets in the world, such as the US, the new products doing extraordinarily well in the last few years have been dairy-based. “Chobani, a Greek-style yoghurt, has gone from nothing to $1 billion in, say, five years; that is astonishing. A brand that’s available in Australia, Danone’s Activia (a probiotic yoghurt), is a multi-million dollar brand.”

At least half the most successful new prod-

ucts launched in the US recently are dairy including another Greek yoghurt – Danone’s Dannon Oikos.

“But even the traditional products which have been relaunched, like chocolate milk, are doing well because we are now adapting those products, reducing the amount of sugar and fats.

“We are giving mums permission to go out and buy products children like to consume – no highfructose corn syrup and added essential nutrients.

We’ve got 21st century products emerging from products that have been around for years.”

Mr Hughes says you know dairy is important when the “really big boys” get involved, such as PepsiCo’s joint venture with Muller, the German dairy

company, to launch food products in the US. And Coca Cola is launching a joint venture for milkbased energy products.

“If you see PepsiCo and Coca Cola move into milk then you see a lot of dynamism in modern milk markets – that’s good stuff.

“In the western world it’s pretty good news: there are new dairy products doing very well. However the dairy products of yore – block cheddar, regular butter or fluid milk – in many developed country markets are going backwards. They are seen as too fatty, too inconvenient, incompatible with 21st century lifestyle.

“Most developed countries say milk consumption is going backwards. In developed countries you expect to see low growth

Growth in Greek yoghurt like Chobani in the US, has been astonishing, says David Hughes.

in classical product areas.

The growth is in new products such as Greek yoghurt which has done astonishingly well.”

Mr Hughes said the developing world is a different story. Global population growth could be 2 billion in the next 40 years and disproportionately

that population growth will be in Asia and Africa.

As their incomes go up they trade up to higher protein foods.

Mr Hughes said those companies or co-ops that don’t move for higher value branded specialty products and ingredients face being squeezed out by

brand-orientated multinationals.

• Hughes was speaking last week at a Dairy Summit in Christchurch hosted by animal health company Zoetis. He spoke about emerging trends in food and retailing and their impact on New Zealand’s farming and dairy industries.

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processor Arla says it has developed a global strategy for sustainable dairy farming.

The new strategy, encompassing climate, waste and animal welfare, will help Arla farmers to improve their environmental credentials, the company says.

European dairy farmers are said to be highly rated in mitigating their climate impact. The Arla strategy is capable of helping its suppliers achieve more sustainable milk production, chief executive Peder Tuborgh said.

“We can and have taken a stand on animal welfare, climate change, sustainability and other environmental issues. In Arla, we believe that by working with sustainable solutions across the entire value chain we will increase our competitiveness.”

The strategy was unveiled in 2013 in the countries where Arla has farmer owners: Sweden, Denmark, UK, Germany,

Onfarm carbon assessments have been done on 1500 Arla farms in Europe.

Belgium and Luxembourg.

Company staff and farmer shareholders contributed.

The goal is that by 2020 the carbon footprint per kg of milk from Arla farms will be reduced by 30% compared to 1990.

“Farmers… [are] comfortable that sustainability is not to the detriment of financial performance,” Arla chairman Åke Hantoft said.

The strategy is based on findings from four focus areas: animals – ensure a high standard of animal welfare; climate – reduce the carbon footprint of milk production at Arla members’ farms; nature – encourage and inspire Arla’s farmers to protect biodiversity and ensure a more sustainable feed supply; and resources – reduce waste

and increase reuse of resources at Arla farms.

On-farm carbon assessments have been done on 1500 Arla farms in UK, Sweden and Denmark (voluntary and free for the farmers). About 280 farm workshops have been held in the UK, Sweden and Denmark, for small

groups of Arla farmers, aimed at reducing the carbon footprint by better management and less waste in the production cycle.

Arla says it expects to do 800 carbon assessments every year. The company has set global targets for follow-up ensure that 2020 targets are reached.

The strategy does not place new demands on farmers, over and above the standards already included in the Arlagården program.

arla’s strategy ■■

Arla offers its farmers free of charge onfarm carbon assessments.

■■

Farm workshops began in 2010 in UK; in Sweden and Denmark they started in 2013. In UK, workshop topics included eight themes including improving cow fertility, reducing energy use, using renewable energy and increasing feeding efficiency.

■■

Every year new activities will be offered to support the aim of the strategy.

Dairy NewS AUSTRALIA may 2014

world news // 15

Mr Smith goes to Beijing ernment has assigned the deputy director-general of its Primary Industries department, Roger Smith, China.

Mr Smith said his status there as a senior government official will help him build strong, long-term relationships, smoothing the way for New Zealand exporters.

Mr Smith, son of an Auckland dairy farmer and a cow milker in his youth, is the highest-ranked MPI (Ministry for Primary Industries) official ever posted overseas and now holds the title regional director Asia.

MPI deliberately made this high-level appointment to the Beijing post.

Smith has no illusions about the quantum of the challenge, describing it as “huge”.

In Asian cultures, such as China, a person’s seniority carries considerable weight and Mr Smith said this will enable him to develop long-term relationships with very senior Chinese officials and politicians.

Mr Smith will primarily work with New Zealand exporters to China and has been talking to many chief executives and chairmen of big companies exporting there.

He will also work with New Zealand-China trade associations and their counterparts and will accompany Chinese trade delegations to New Zealand.

He sees no problems in him being the regulator “walking side by side” with industry and helping them on their sales trips to China.

“I am going to be the face of the Government for primary industries in China and that’s a pretty important face to have for them.

“We are all focused on the same thing: New Zealand having continued access to China.

“If you want to sell to China you should be able to do so and maximise the FTA and not get stuff stuck on wharves or any other surprises.”

Following Mr Smith’s move to head its operations in Beijing, MPI will send five more people there within months.

The MPI’s move to up the ante in China results partly from such disasters as meat being delayed at the Chinese border and the Fonterra botulism scare.

MPI was said then to have been ‘understaffed’ in this number-one market.

Mr Smith was on the team that negotiated the FTA with China in 200507, then working for the Customs Department.

“The ideal is to go in, get a deal, leave, then let business get on and do what business does best,” Mr Smith said.

“However that is not necessarily a long-term sustainable model within Asia. Everybody needs to know that you have to build relationships, you need to spend time in a country.

“If you read any 101 learners guide to exporting to China it will say you have to spend time [there].

“We need to follow that advice ourselves and make sure we form a government perspective to build a much better long-term relationship with Chinese officials so we can better understand their thinking.”

Mr Smith’s includes “some star gazing” to get a better understanding of what China is thinking and what its needs are. Food safety tops their agenda, he said.

“We have to get a little ahead of the game now and think about what’s going to come up in future.

For example, what are their concerns and how can we address them?

“Frankly it’s not a case of New Zealand telling China ‘this is the model’.

It’s a time to be working in partnership with China in a way we have always done with Brussels, Washington and Canberra – working in partnerships and developing partnership solutions.”

Though Smith declined to comment on the specifics of the Fonterra botulism issue he acknowledges it gave New Zealand a chance to ‘reflect’ on how it deals with China.

The magnitude and acceleration of dairy exports to China took many people by surprise

and many were slow off the mark to deal with this expansion, he said.

“With growth rates like that you have to be careful you don’t stub your toe.

“If you want to be in the market you have to commit to understanding that if China has specific regulations and require-

Roger Smith’s seniority will help him build strong, long-term relationships, smoothing the way for New Zealand exporters. ments, particularly in the infant formula market, you have to meet these.

Roger Smith

“They have the full right to food safety and traceability.”

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Dairy News AUSTRALIA may 2014

16 // OPINION Ruminating

EDITORIAL

When actions inspire

milking it...

Bathing routines

Cleopatra bathed in milk as part of her beauty regime, but we’re not sure why workers at a Siberian dairy company recently followed suit.

A Siberian dairy plant was temporarily closed recently after photos emerged of workers bathing in one of the milk vats.

A clue to the unusual behaviour may come from the date – it happened on New Year’s Eve. After the footage was played on a federal television network, residents of the town boycotted the factory’s produce.

Such events are apparently commonplace in the country as sanitary oversight has virtually ceased, with plant inspections occurring once every three years.

It was left to one of the workers involved to provide an explanation: “In reality, our work is very boring,” Artyom Romanov said.

Well, when you put it like that…

Native language

Farmers at a New Zealand field day recently heard a yarn from guest speaker Waaka Vercoe, who is Maori, and used to milk cows with his uncle for the farm owner.

Naturally enough, they spoke to the cows in Maori.

Things unravelled when the farm owner told Vercoe and his uncle to take an afternoon off.

The owner was furious the following morning, telling Vercoe and his uncle that he spoke to the cows in English but they couldn’t understand a word he said.

He demanded they speak to the herd in English, but Vercoe’s uncle refused, saying they would give more milk when spoken to in Maori.

“I thought that was wise advice so we just kept speaking Maori,” Vercoe told the crowd. “Whenever he spoke to them in English they just looked blank.”

This might be some food for thought for those who hire backpackers for milking time.

Cows on the loose

It can be hard enough for farmers to do their job without having to deal with idiots on the other side of the boundary fence.

The RSPCA recently released a list of mindnumbing calls from the public, which reveal that some people have too much time on their hands, not enough brain cells, or both.

Turns out the animal welfare group received several complaints of two cows in a paddock with no shelter outside of Nowra in southern NSW. The cows turned out to be made of steel.

We hope the same people don’t visit Shepparton, where there are more than 90 fibre glass cows in a variety of colours and designs scattered around the town as part of the MooovingArt project, or the RSCPA helpline will be ringing off the hook.

(Our favourite from the RSCPA list was that of a highly distressed woman calling about a mini crocodile in her backyard which was threatening the lives of her children. Turns out it was a blue-tongue lizard.)

Advertising Chris Dingle chris@dairynewsaustralia.com.au

Visa review plea

Good to see the National Farmers Federation call for greater access to 457 visas in the dairy industry in its submission to the current review of the program.

The tightening of the temporary visa scheme was made by the Gillard Government in June last year in a misguided attempt to look tough on foreign workers taking Aussie jobs (and please the unions).

Her attempt at political chicanery failed as everyone saw through it, but the laws were passed and it hurt the farming sector, which finds it increasingly tough to hire relief milkers at the very least.

Backpackers with an ag background are often the best recruits, but recruiting them and retaining them for longer than six months is proving increasingly difficult.

The proposals were made to an independent panel reviewing the 457 temporary-visa scheme and submissions closed on April 30.

Its request to relax the rules, or introduce a new form of temporary visa, is receiving staunch opposition from the likes of the Australian Council of Trade Unions, but it’s a fight worth having.

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Actions speak louder than words. They also inspire.

Cursing Coles and Woolworths for devaluing fresh milk by selling it for $1 a litre is one approach; searching for alternative markets and overcoming all obstacles to supply them is another.

When economists and other commentators said Asia would be the future for Australian agriculture, a myth was perpetuated that customers from China, South Korea etc would come to us, asking to buy milk.

It was never going to happen.

Australian companies had to show the initiative and offer these customers something they wanted.

Norco, working in partnership with Dairy Connect and consulting firm PGS, are now selling fresh milk to China after securing an unprecedented quarantine clearance agreement to bring the delivery time well within the shelf life of fresh Australian pasteurised milk.

Until then, all export efforts had been hampered by lengthy testing and quarantine processes before shipment from Australia – and again upon arrival in China.

The export lead time for fresh milk typically ranged from 14 to 21 days which did not fit within the normal shelf life for fresh Australian pasteurised milk.

The breakthrough only came after 12 months of collaboration between PGS and Chinese officials to develop rigorous quality assurance protocols that have now been fully tested and officially sanctioned by the relevant Chinese agencies.

The work performed by Norco, PGS and Dairy Connect to make fresh milk exports a reality has not only provided a new outlet for their suppliers, it has shown all farmers and processors there are alternatives, a reward for effort, and a bright future.

Those farmers in the drinking milk states that have been knocked about by a supermarket-influenced squeeze on farmgate prices now know there are alternatives.

These alternatives won’t come without hard work, and the ability to think outside the square, but they are there.

Similar initiative was shown in South Australia where the SA Dairy Association created fresh milk brand SADA Fresh, which has almost paid back the initial investment after six months.

Profits from all sales now will fund projects that will benefit SA farmers.

Local customers were told to “support farmers” because “we grow your food”. It didn’t work as the $1/litre milk pricing proved too attractive.

SADA offered them something they were happy to purchase – local milk, packaged attractively with a story behind it – and have been rewarded.

Both results have provided a breakthrough for the farming community of both states and we applaud all those involved - inspirational in the true sense of the word.

Published by RNG Publishing Ltd Printed by PMP Print

permission of the publisher. Opinions or comments expressed within this publication are not necessarily those of the staff, management or directors of RNG Publishing Limited.

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Dairy NewS AUSTRALIA may 2014

opinion // 17

Commission of Audit promotes budget hysteria Tony Abbot and Joe Hockey.

opinion jan davis growth are compared to the US, UK, Germany, Japan and the OECD average.

The ratio of debt to GDP is a key indicator of how well a country can repay its debt without incurring more debt. It is similar to assessing your own ability to repay your mortgage each year from your annual revenue without going further into hock. Commonwealth net debt is about 11 per cent of GDP, the recommendations, the National Com- economy. The federal government has third lowest in the OECD, where the mission of Audit proposes: recognised that Australian farmers are average is 50 per cent. In other words, ■■ Abolishing the Bass Strait Freight facing challenges in being internationour national debt is low by international ally competitive. It doesn’t take a rocket Equalisation Scheme.

■■ Removing the diesel fuel rebate. standards. scientist to work out that sweeping So what is the justification for a one- ■■ Scrapping the Rural Financhanges such as those recommended in off deficit levy, a.k.a. a deficit tax? the Commission’s report will put farmcial Counselling Service and the Richard Holden, ers even further Professor of Ecobehind the game. nomics in the Aus- “There’s no denying the recommendations That’s not tralian School of of the Commission of Audit were shocking. to say there is Business at the Some suggest this is an insight into what no need for any University of NSW, the government would really like to do if change. Rather, it dismisses this prois a plea for strateposal with an apt they think they can get away with it. Others gic and informed suggest it’s all a red herring to make a horror consideration of analogy.

“When your budget look mild in comparison. There is the whole piclocal surf club merit in each theory.” ture, recognising has a fire not covimpacts and flowered by insurance on implications of it makes sense, painful though it may any changes. It also means that nothing Farm Finance concessional loans be, for the members to kick in for the should be immune from consideration; scheme. repairs. When the committee says they ■■ Halving Landcare funding. and that both the income and expendineed a special levy to pay for recurring ■■ Reducing the funding for rural ture sides of the budget should be invesexpenses like petrol for the inflatable tigated. research and development corporescue boat, there’s a change of commitProfessor Lewis went on to say that rations. tee at the next annual general meeting.”

Agriculture has been identified as there is more to government policy than Among a raft of other unpalatable one of the five pillars of the national balancing the budget.

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When Luke Skywalker and C-3PO enter Chalmun’s Cantina in the first Star Wars movie, the barman says ‘the robot’s not welcome’. This is despite the bar being filled with roughneck freight pilots, oddballs and scary monsters.

The federal government’s Commission of Audit is a bit like that cantina, full of monsters and other creatures usually kept out back in a locked room.

There’s no denying the recommendations of the Commission of Audit were shocking. Some suggest this is an insight into what the government would really like to do if they think they can get away with it. Others suggest it’s all a red herring to make a horror budget look mild in comparison. There is merit in each theory.

The Commissioners made 86 proposals for sweeping spending cuts, ranging from the politically possible to the crazy brave. The devil is in the detail, all 5kg of it.

I was particularly surprised about the obvious lack of thought that has gone into some of the recommendations. For example: privatising the Royal Australian Mint. This would mean it would be in someone’s commercial interests to print more money. What could possibly go wrong?

The report would have you believe that the national budget is in crisis and, if we don’t address our debt with a dose of draconian measures, Third World status beckons.

But is there a budget crisis?

When in doubt consult the soothsayers, I say. On this subject, the modern day soothsayers are the economists – and they seem to be agreeing that this is all a bit of a con.

University of Canberra economics professor, Phil Lewis, says that while it might be legitimate to say that lower debt would free up more government revenue to fund worthwhile projects, you cannot argue that running the economy or low debt implies the economy will perform better. And Australia, he says, is sailing along very nicely when its inflation, unemployment rate and GDP

VEL

OPME

NT

“Policy should be made in the context of a long-term vision for the economy,” he says. “This includes getting everyone who wants to into work, providing the public infrastructure needed to increase productivity, the right mix of private and government provision of health and education, and reform of the regulatory environment.”

Now that’s more like it: those are aspirations we can all understand and accept.

Commentator Greg Jericho, writing on The Guardian’s website, examined the recommendations and commented “anyone recommending our health system follows the US really should not cut paper without supervision, let alone give advice on how to cut the budget.”

In my view, many of the recommendations are at best problematic; and at worst potentially disastrous. Furthermore, it really goes against my grain to be taking advice on saving money from a committee who ran up a bill of 21/2 times the budget they were allocated.

• Jan Davis is CEO of Tasmania Farmers and Graziers Association.

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Dairy News AUSTRALIA may 2014

18 // markets

China’s return will steady falling global prices Export demand remains strong Dairy NewS aUSTraLia june, 2012

agribusiness // 17

Dairy commodity

markets have entered a distinctly different phase since the last update in these pages.

As supply has continued to expand across key export regions, several major importers have slowed their purchases to match seasonal changes in requirements.

The confluence of these supply and demand cycles has caused the rapid price correction that has characterised recent weeks.

Published results of the GlobalDairyTrade (GDT) auctions have illustrated the drop in prices most starkly.

The weighted average price across all commodities has fallen 20% since early February, and is tracking around 19% below the same time last year (which was just after prices first spiked).

Although rapid in the context of the months of price stability that sellers enjoyed, this adjustment shouldn’t come as a surprise.

With farmers in all export-focused regions enjoying substantially

cents/litre in March (AUD 41c/L) to 28 tistics agency EuroEuro cents/litre (AUD 36c/L) in April. stat suggests EU-28 Profit margins are under pressure in the US, and in NZ Fonterra has announced milk production the final payout for the 2011/12 season grew 5% for that has been cut from NZ$6.75-$6.85/kg MS gLobaL impacT to NZ$6.45-$6.55/kg MS (AUD$4.96month, building JohN DropperT $5.04). on similar growth Effectively, global dairy markets are global impact rebalancing. Lower prices will both Shifts inJohn private label Droppert contracts and prothrough January. slow production growth and stimulate cessor rationalisation have seen milk demand, and as this occurs we will ulticompanies adjust their intake requireThe European mately see a price recovery. Key factors ments and pricing to meet the changwinter has been than early 2013. to watch on the global scene will be the ing demands of a highly pressured retail rate at which milk production overseas marketplace.

Lower contract and so mild that the biggest Double digitprices growth slows in response to lower prices, the a lack of alternative supply opportuniconcern at the moment rates are virtually inevities present challenges in a market with flows. 2012 milk production in the US those in south-east Asia and the Middle impact of the current financial worries 4% on 2011 for the year to East maintain consistently higher eco- on consumer confidence, the path of limited manufacturing capacity.

Despite is up around seems to be the too-rapid table for the remaining these challenges, the underlying domes- April (leap year adjusted), whilst early nomic growth rates that support China’s economic growth, and the value development of winter months to June, and this tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. How- of the Australian dollar.

Demand for exported dairy prodita dairy consumption and a growing finished the March 2012 quota year up ever, the surge in supply has outpaced grain crops, which now has been reflected in the ucts remains a positive and will conpopulation providing a degree of cer- 2.3% on the previous year. New Zealand demand growth in the market. seasonal offer volumesproductionneed This situation has seen the scales tinue to grow with the middle class in is widely expected torains finish eartaintyincreased beyond the current adjustments.

In the seasons following the 2008 this season up 10% on last year - a huge tip in favour of buyers in dairy mar- large emerging markets such as China, lier than usual. on the GDT platform. financial crisis and subsequent com- market influence given 95% of NZ milk kets, with commodity prices retreat- with changes in diet and with increasing urbanisation - and also conjunction steadily over recent is also enjoy- ing modity price recovery, farmers in is exported. Argentina so in while prices are falling. ens tomonths. derailButter the industry Some processors have Other parcels of NZ export-oriented regions have seen solid ing solid production growth, but a sig- prices are down some 30% from their with global population growth. Locally, As stocks as feed supplies become recently announced cuts product are reportedly hitglobal supply growth (see chart) - with nificant supply gap in Brazil prevents 2011 peaks, whilst powder prices have the domestic market is supported by a run down, growing population and stable per- to start lostline more thanmore 20%. Farm gate prices Overall, milk from leav- (in higher-cost in theat NorthChina is likely stretched. toadditional farmgate prices ting competitors the market sub- much of this have subsequently been reduced in capita consumption. Whilst the dairy ern Hemisphere amongst those expand- ing South America. buying in more signifithe US is up 1% for 2014 to with commodity price stantial discounts to clear Despite wider economic uncer- most exporting regions. The average market is currently a challenging place ing output as their margins increased. to be a seller, indicate that bal- again, which basic farm gateMarch; price for milk in France figure tainty, demand hashowever remained resilient This warehouses season, favourable as weather volumes a similar to all signscant falls) with marthe conend of ditions have further enhanced milk as importing countries like China and for example, dropped 12% from 32 Euro ance will ultimately return. will not only remove more event saw 36,549 tonnes of financial year approaches. gins remaining good, these January and February.

With such a broad geo- product from the market, are unlikely to slow proThis is adding a further, product sold, 143% more but likely convince other graphic base, the current duction. short term, dampener to than the same time last supply response is unlikely buyers that opportunities The US hasn’t been as pricing. year. to reverse in a hurry. How- to secure discounted prodblessed climatically, and Although additional New Zealand is showaustraLian DairY, ASEAN-Australia-New uct are nearing an end. ever it is only part of the growth is mixed.

In the volumes are hitting the ing the most dramatic rice and wine exporters to Zealand FTA (AANZFTA).

“Protectionist sentiMalaysia are the with biggest official Traders have recently current story.

Midwest (taking in states the commonly response, data market, ment over agricultural winners in a free trade been reporting a renewal Current pricing is also such as Wisconsin, the held view is that New Zeato February reporting 12% goods is rife and growagreement (FTA) signed ing across the globe, so is relatively well sold to provide pack from price senbetween the two counaustraLian FooD inportion interest a function of Chinese second largest in terms land growth for that month in this context it is pleas(200-330ml) configuratries last month. company Freedom Foods sitive markets (such as the buyers’ reduced activity of milk output), lingering for the remaining months compared to February ing Australia has managed tion for beverage prodThe deal, signed after Group Ltd is to build a to forge an agreement seven years of negotianew milk processing plant ucts.

Middle East and Africa) of late as record imports effects of a harsh winter of their June-May produc2013, and over 6% for the with Malaysia that has The NSW location will tions, allows a liberalised to cash in on growing access were to the most licensing demand in Asia.boosted providethat sidelined for through March have production tracking tion season. seasonarrangement to date. dealt with some sensitive agricultural issues for Australian liquid milk The plant, to be built in sustainable and economic much of 2013, but have their stocks. below last year, but prosof the curThis NZ’s not effectively coveredMuch by exporters andseason, allows southeast Australia, will be source of milk. Pactum has AANZFTA,” says Fraser. strong links to the Austra- back by the access for higher value the first Australian greenbeen enticed With healthy invenpects are good as temperarent sales competition is export exposure has Sealing the deal: Malaysian trade minister Mustapha Mohamed “While under the retail products. fields expansion in UHT in lian dairy industry and will with Australian counterpart Craig Emerson after signing the deal. much more tories and a new season tures warm up. coming from the northallowed quick passAANZFTA agreement expand its arrangements ‘workable’ It guarantees Aus10 years. agri- hemisphere, where farmerson for offer. tralian wine exporters Freedom’s prices atwholly home, with dairy In California milk flows commencing through of higher most of Australianern but also through technical Despite the compleers through streamlining culture’s key interests supply of milk. The new the best tariff treatment owned subsidiary Pactum These buyers often wait importers aren’t under are well up on the same Europe’s steady growth commodity prices while or so called ‘behind the tion of this agreement, of rules-of-origin dechad tariffs bound at zero, plant will increase scope Malaysia gives any counAustralia will run the much remains to be done border’ restrictions.” dairy and rice are two sec- laration processes and try. It also allows open plant. Some of its products for Australian milk supply for signs that prices have pressure to contract ahead time in 2013, though the continues. the weather has been The FTA was signed on for Australia’s farmers to improved marketing – value-added, sustainable access arrangements from tors where incremental will be sold in Australia. ‘bottomed out’ before – and are continuing drought threatMay 22 in Kuala Lumpur the full potential arrangements certainsta-tap into February dataforfrom market access improveand export focused. much more favourable 2023 for Australian rice Thedisinclined company says to do With season 2011/12 only a few higher farmgate weeks from ending, attention is now milk prices for focused on 2012/13 milk sevprices as farmers consider strategies for the coming eral months now, year. In some domestically-focused the incentive regions, renegotiatedto contracts incorporating prices and reduced ‘tier boostlower production one’ access are undermining farmer was bound to elicit a For confidence and supply stability. many farmers in export-oriented response. regions, a lower price outlook relative to the current not only adds to the In a season further conchallenges of doing business, but seems trast to the 2012/13 to contradict the positive medium term outlook of Asia-driven dairy demand season, constrained feed growth. prices are also improvDairy Australia’s indicative outlook for farm gate milk of prices – ingsouthern the economics published in the recent Dairy 2012: Sitincremental producuation and Outlook report, is for an opening price range of $4.05-$4.40/kg tion increases, and many MS and a full year average price range regions are between $4.50 andenjoying $4.90/kg MS. The report considers the wider market picfavourable weather to ture and summarises the many factors at play; the key theme of the current sitboot. uation being that of re-balancing in the dairy The supplyresult chain. is more In regionson of Australia focused on product the market: producing drinking milk, many farmers to again take GDT face a re-balancing market inas the an form of renegotiation of April supply contracts example, the 15th and reduced access to ‘tier one’ supply.

incremental change in milk production (year-on-year)

Malaysia FTA benefits dairy Freedom

Foods plant targets Asia

with all tariffs eliminated by 2026.

The National Farmers’ Federation says the trade deal will improve international market access for Australian agricultural goods.

“After seven years of negotiation, the NFF is under no illusion of how challenging it has been to complete this FTA with Malaysia,” NFF vice president Duncan Fraser says.

The FTA will fill a number of gaps within the

ments have been negotiated under the Malaysian FTA. “This trade deal was also particularly important for sectors such as dairy that have been facing a competitive disadvantage in Malaysia compared with New Zealand which already has a completed FTA with Malaysia in place.”

The FTA also signals some administrative benefits for Australian agricultural export-

commodities.

The Malaysian market is worth about A$1 billion in Australia agricultural exports – including being its fourth-largest sugar export market and fifth-largest wheat export market.

With an annual economic growth at about 5%, Malaysia forms an important part of the ‘Asian Century’ story and the opportunity this presents for Australian agricultural producers, says Fraser.

by Australia’s Trade and of the Asian region and Initially the plant will given Asian consumCompetiveness Minisbeyond. produce 250ml and 1L ers’ rising incomes and ter Craig Emerson and his He says the NFF will UHT packs from a process improving diets, demand Malaysian counterpart now throw its attention line capable of 100 milthere will grow for qualtowards ensuring agricul- Mustapa Mohamed. lion L. The processing and ity dairy products from Emerson says Australia ture remains front and low-cost production bases packaging plant will emit centre in completed FTAs will be as well-positioned less carbon, use less water, such as Australia, whose in the Malaysian market with South Korea, Japan, and be more energy-effimilk is well regarded. as Malaysia’s closest tradChina and Indonesia as cient than equivalent The new plant will ing partners in ASEAN, immediate priorities.

UHT facilities in Austraallow Pactum to meet “These are all markets and in some cases better. lia and SE Asia. Pactum growing demand for The FTA will guarantee with enormous growth expects site preparation to UHT dairy milk, and add tariff-free entry for 97.6% opportunities and where begin in October 2012 and to capacity for valueof current goods exports Owner significant barriers to start-upin by mid-2013. added beverages at the mainstream.

Ross Hopper from Australia once it trade gordon in agriculture still collie Pactum makes UHT its Sydney factory. Pactum is pleased that says it is the talented manenters into force. This will exist, not only through products for Ross private label is expanding its capabilirise to 99% by 2017. agement tariffs that restrict trade ties atteam the Sydney their customers. sustainable business heplant now hasand proprietary

Maleny Milk on It has taken more

016-017.indd 17

Ross and Sally Hopper of Maleny Dairies.

committing. As the market turns a rush of interest can boost prices.

The recent market correction was exactly that.

Milk powder pricing of US$5000/t was unlikely to be sustained when a global supply response was building.

However, with China expected to return as a significant buyer in the coming months and other purchasers enjoying much better affordability, stabilisation at prices that still provide above-average returns is a decent prospect heading into the 2014/15 season.

• John Droppert is industry analyst with Dairy Australia.

than a decade and a lot of learning along the way, but a pioneer in farmdirect dairy marketing in Queensland is poised to go to another level.

Maleny Dairies which is now in the fourth generation of the Hopper family farming in the picturesque Sunshine Coast hinterland has ambitious plans to double milk and fresh dairy product sales in the next 12 months.

The business has built to a weekly throughput of 70,000 to 75,000 litres of milk employing around 40 staff from the factory floor to lab technicians to milk delivery teams.

in place which is driving business growth.

After growing organically, starting with local and independent retail outlets, the business is now moving into volume markets with the major supermarket chains.

“We started with selected Coles and Woolworths stores and 17 new Woolworths outlets have just come aboard this New Year,” Ross said.

Maleny Dairies quality product range can now be found in retail outlets throughout southeast Queensland from Noosa to the Gold Coast with sales volumes starting to reflect a boutique product

model now supports eight farm families in the region 6/06/12 1:41 PM with milk now drawn from about 1000 cows, most grazing the hillsides within a 20 kilometre radius of their processing facility.

His grandfather Gordon Hopper started dairying at Maleny in 1948 and in its hey-day there were more than 300 small farms in the region. Now there are just about a dozen left.

Ross and his father Harold, who has now retired, hatched the plan to start processing their own milk in the wake of de-regulation of the industry in Queensland in 2000.

The first Maleny Dairies

milk rolled off the processing line in 2002.

Ross and his wife Sally committed to investing in the launch of the value adding enterprise.

His brother Keith who had been working on beef properties in western Queensland came home to take over the family dairy farm with his wife Sonya.

“We run the factory and farm as separate businesses, buying the milk off Ross and our other farm suppliers,” Keith said.

The family farm milks about 130 cows and like many other small properties in the district it is at full capacity with limited potential to buy land highly valued for its scenic views.

The family has always

Dairy NewS AUSTRALIA may 2014

markets // 19

EU, US strengthen export capabilities nese market.

At a crucial time in the Softer prices as we go short-term planning for dairy forward might lure those farmers in southern Austrabuyers back, and if China lia, we are seeing spot prices wants less in the near for the major dairy commodfuture, they can probably ities in a kind of freefall from afford to! Economic foretheir giddy heights earlier in casters suggest the devel2014. oping world will continue It had to come – a correcto enjoy good economic tion in prices was inevitable. fresh agenda growth in the short-term As product prices soared in steve spencer at least. While Chinese the second half of last year, growth expectations have so came the gradual recovery in milk production in most major export moderated, growth is likely to remain at production regions – a response to stron- rates significantly above the developed ger farmgate milk prices and higher profit world, as long as credit and housing bubmargins. Production responses in all bles are managed.

So how far might commodity prices fall regions other than New Zealand have been slower than may have been expected as bal- – and which products will be more exposed ance sheet recovery from the turbulence in to a short term oversupply?

All the focus of the slump in prices has producer margins in recent years has been been on milk powders, a shortage of which a handbrake on milk expansion for many.

After the heavy buying of the first quar- had driven the rally in the global value of ter of 2014, Chinese buyers are apparently milk in 2013. Australia’s overall manufeeling very comfortable. With people in factured product mix is heavily weighted the supply chain more generally confident towards cheese, which in 2012/13 took about future availability, it has become a about 40% of total milk supply in southeastern regions. Cheddar cheese prices buyer’s market.

At the same time there has been growing - down 6% from their flatter, Kosciuskonervousness as to when China’s consumer styled peak - haven’t fallen anywhere near spending will start to slow and, more impor- as far as milk powders, which are about 20% tantly, whether there might be instability in off the summit.

This reflects a generally more stable financial markets that could affect the availability of credit to dairy product buyers in and steadily building market over time – so hopefully powder producers don’t switch their supply chain.

The hike in prices as a result of China too much milk away from those lines to soaking up so much milk powder has chase some of cheese’s better prices.

But when we look a little longer than the resulted in many developing countries in the Middle East, North Africa and South next few months, the rides on the swings East Asia importing far less product in the and roundabouts may get a little scarier. past year. Prices simply got too high for There is a set of potentially major variables their processors to outbid the hungry Chi- that will affect the balance of supply and

demand in the world market over the next two years.

Europe’s dairy industry is readying for the removal of production quotas – which will likely see more milk output from competitive EU producers, with gradual shrinkage from those in marginal areas and producers. Weather and input prices will influence just how much additional milk comes onto the market, but significant investment is well underway mostly aimed at a greater export focus.

Meanwhile the US continues to gear up as a more serious exporter. While largerscale producers have relished the high margins over feed costs in the past few months, balance sheet recovery has kept milk growth to a minimum. A longer period at high margins may well see stronger milk flows.

New Zealand has rebounded strongly from last year’s drought – ahead by close to 7% in the first 10 months of the current season – and good conditions will ensure higher milk flows will carry into the new season starting at the end of this month.

Growth in output will slow next season but NZ will still push a healthy amount of milk onto the market. An El Nino pattern might even help to slow things down.

It all comes back to China. The size of their milk supply gap – which at last count by our reckoning was about 10 billion litres in 2013 – won’t close very quickly given the seismic changes in their internal supply chains. But the strength of their appetite for milk products will continue to hold the key to everybody’s milk cheque in 2014/15.

• Steve Spencer is a director of Freshagenda, a Melbourne-based consulting and analysis firm that provides food value chain insights and solutions to a wide range of clients from farm to retail.

Export index continues to fall Freshagenda’s export index has continued to fall throughout the past month, reflecting weaker global dairy prices and an obstinately high Aussie dollar. The index has lost 13 points over the month to the 5th of May, and 40 points since it peaked in the first week of February.

In recent weeks, spot commodity prices have stabilised and even risen, while the dollar has lost some steam. Freshagenda’s Australian export index has settled at around 200 points in early May, close to a year ago. It is interesting to compare movements in the Australian index with NZ’s. Based on the same series of Oceania spot prices, the indices track movements in dairy export returns for each country, with differences driven by product mix and currency movements.

What is striking about the chart below is the much higher peak in the Australian index at the start of 2014 – largely driven by a weakening Australian dollar and strengthening cheese prices.

In contrast, flat to weakening WMP prices – the most important product for Kiwi exporters – and a flat NZ dollar saw their export index moving sideways at the beginning of the year. It has settled at around 170 in early May – 30 points lower than May 2013.

Companies on both sides of the ditch are likely to take a conservative approach to 2014/15 farmgate prices – in light of a weakening global dairy market. Based on this analysis the Kiwis may be factoring in a greater adjustment to their opening prices than the Aussies!

The index is a lead indicator of average export returns - based on spot prices, currency movements and export mix. The index measures current market sentiment, but in reality it takes 3 to 6 months for prices to translate into actual returns, depending on the timing of contract negotiations. It was set to 100 in January 2000.

For weekly updates, visit http://www.freshagenda.com.au/

Guernsey-fuelled curve had Guernsey cattle and this has become a marketing point of difference for Maleny Dairies selling high protein and butterfat healthy milk.

One of their cows Belladonna became a breed world champion breaking records in milk, fat and protein. Lactation peaked at an amazing 701/2 litres of milk in one day.

Paying a price premium of about 30% for their milk – an average farm pay is 601/2 cents a litre – it is not surprising that farmers in the region are lined up to join Maleny Dairies.

Supply is conditional on milking Guernseys with five of their existing suppliers having herds in transition to the traditional dairy breed.

Ross said the business now processed a full range of milk products with about 40 percent of production marketed under the premium Farmers Choice Gold Top label which is not homoginised.

About 30% sells as regular full cream milk and 30 percent as low fat product.

“We’ve introduced a range of flavoured milks, yoghurts and custard.

We’ve now got a team of technicians working on further product innovation,” Ross said.

“With the population growth in south east Queensland a local enterprise like ours has a bright future selling fresh dairy products from just up the road,” Ross said.

The Maleny Dairies range.

Dairy News AUSTRALIA may 2014

20 // ABVs

New ABV approach focusses on fertility

Gillan leads Holsteins

Matthew Reynolds

Graeme Gillan has been appointed as chief executive officer of Holstein Australia, starting in the role late last month.

HA president Ron Chittick said Mr Gillan brought a vast knowledge of the Australian dairy industry to the association, from a career of direct involvement at executive management level within the herd improvement industry.

“Graeme is the ideal fit for Holstein Australia. He has the skills and experience to help us address the rapidly changing dairy herd improvement landscape and to take up new opportunities that can be a significant benefit to our members’ dairy businesses,” Mr Chittick said.

“Graeme is well known at all levels of the Australian dairy indus-

Graeme Gillan

bers as well as to dairy farmers at the cutting edge of improving their herds,” he said.

“There are exciting opportunities ahead with what genomics can offer the industry to increase genetic gain within herds and to improve profitability of all dairy farmers.”

try and will be known to many of our members.”

Mr Gillan said he was excited to join the team which services the largest breed association in the Australia.

“Holstein Australia has a reputation for offering a unique range of products and services to mem-

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A PIONEERING project to bolster Australia’s genomic reference population could dramatically change the way data for Australian Breeding Values (ABVs) is captured.

With herd testing in decline across the industry, it is vital to establish alternative sources of data to fuel ABVs. Dairy Futures CRC’s Ginfo project is creating a “nucleus herd” to feed genomic information and herd data into the national reference set.

By June 2014, Ginfo will have grown to include 100 dairy herds across Australia.

The Ginfo herds have been judged to have the best records in Australia thanks to a scoring system developed by Victoria’s Department of Environment and Primary industries (DEPI).

The system is based on an objective assessment of the amount and quality of data each herd contributes to the current breeding value calculations, particularly for fertility.

Ginfo’s key focus is fertility: a complex and multifactorial trait that is difficult to improve through traditional breeding methods.

Increasing genetic gain on fertility will yield long-term benefits, and this is the aim of initiatives such as the Dairy Australia-led Dairy Moving Forward project.

Ginfo will contribute by providing the Australian Dairy Herd Improvement Scheme (ADHIS) with accurately recorded fertility data from diverse farming systems across Australia to increase the reliability of genomic breeding values – or ABV(g)s - for fertility.

DEPI’s Dr Jennie Pryce, research leader of Ginfo, said: “Although fertility is a focus, Ginfo will also increase the reliability of genomic breeding values for all other traits evaluated by ADHIS.” Ginfo is part of a broader effort to improve dairy industry fertility that began in 2013 with the redevelopment of the daughter fertility ABV by ADHIS and Dairy Futures CRC. The improved fertility ABV, introduced

in April 2013, covers more aspects of fertility and has resulted in a rise in reliability of 6-8% for Holstein and Jersey cattle.

This rise has increased the number of international bulls with publishable proofs in Australia, offering farmers more bulls than ever before to choose between.

Ginfo began in mid-2013 and currently comprises 50 Victorian herds.

Work is now underway to select top data-contributing farms from across Australia to bring the total to 100.

The herds will be representative of the industry in terms of herd size, breed, location and a number of other factors.

The project offers participants incentives to maintain their current levels of data recording and perform additional genotyping.

The Dairy Futures CRC research team will also use the experience of genotyping a large number of cows to explore ways to bring down the cost of genotyping, potentially making it more affordable for farmers to use over entire herds.

Accurate and cheap genotyping will allow farmers to identify the most profitable calves in a herd simply by plucking hair from the tail, therefore eliminating the stress of late night and early morning calf identification during busy calving periods.

Ginfo is not the first time the Australian dairy industry has seen large scale genotyping.

Dairy Futures CRC’s 10,000 Holstein Cows and Jer-nomics projects increased reliabilities of genomic breeding values in 2011 and 2012.

The industry needs Ginfo because over time, the national reference population will genetically differentiate from the genomic reference population, making it less useful for genomic prediction. New animals need to be added to keep the reference population current and maintain reliabilities.

• Matthew Reynolds is part of the Dairy Services team with the Centre For AgriBioscience (AgriBio), a joint initiative of the Victoria’s DEPI and La Trobe University.

This report was first published as part of the Australian Dairy Conference Dairy Science Communications Award.

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6/05/14 1:56 PM

Dairy NewS AUSTRALIA may 2014

ABVs // 21

LIC offers Holstein, Jersey sires GENETICS COMPANY, LIC, has

added two registerable sires, which it says will not only improve your herd’s fertility and its components; they will not compromise other important traits, including type or volume.

The new additions to this year’s catalogue are

the Holstein-Friesian sire Kage and Jersey sire Terrific.

Kage is a Format son with Pierre and Paladium in his pedigree. His daughters are described as tall, very capacious, with extremely well attached udders.

His fertility APR of 108 shows that despite

his huge production they get back in calf extremely easily, LIC said.

Kage has an overall type APR of 108, with a body depth APR of 111. LIC describe him as the perfect sire to use over the Northern Hemisphere bred cows to get strength and fertility back into a herd.

His A2A2 status will also appeal to many farmers.

Terrific is a Fernaig Admiral son from the renown Lynbrook stud

and LIC says his size and strength are exactly what farmers look for when selecting a sire.

Terrific has an overall APR type score of 104 and a body depth APR of 115.

LIC said he is a perfect sire to bring back some spring of rib which so many of the Northern Hemisphere Jerseys lack.

LIC describe him as great fertility, high components and a somatic APR of 113.

Kage daughter

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GENERATION NEXT VALUES A GREAT TEAM

Genetics Australia unveils new line-up

JOHN AND JANELLE RELY ON LIC BULL TEAMS TO DRIVE PRODUCTIVITY.

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A NEW CROP of Australian bred sires from Genetics Australia have emerged after the April ABV release.

Genetics Australia commercial manager, Anthony Shelly said the new proven sires offer a range of bloodlines and trait profiles adding to an already diverse product lineup.

Christmas is a new total performance sire with a “no holes proof”, according to Mr Shelly.

“Sired by Roumare, he is joined by another Roumare son, type specialist Barbados.

“Decorum is a son of Donante who is one of the best type and protein sires available, and also from the same family comes Dittmar whose outcross pedigree should have widespread appeal.

“Rounding out the new additions is Goldcrest, a son of the highly regarded Goldwyn, who possesses many of his sire’s characteristic traits.”

Calving ease, health and fertility specialists are also present in the Holstein team, according to Mr Shelly.

“Carglo and Eurostar stack up as two of the better fertility bulls available with real Australian fertility data.

“Useage combines calving ease, cell count with super udders and Bullbar is still the first choice calving ease sire and retains his position as Australia’s go-to bull for healthy, long lived, no fuss cows.”

“Our Jersey result highlights our commitment to the Australian Jersey cow,” Mr Shelly said.

“The Valerian sons have come through this year demonstrating our aim to develop genetics for Australian farming conditions rather than simply following the global trends.”

Navarian, Raceway and Roundhill lead the Valerian son charge with Navarian the number one Jersey sire available for profit.

Full brothers Raceway and Roundhill share some common characteristics, however their profiles provide enough differences for both the bulls to warrant places in the proven line up, according to Mr Shelly.

Spiritual son Broadside rounds out the list of newcomers to the proven team.

Mr Shelly said three new emerging Aussie Red sires have joined the team.

Arbobama, Arbnick and Arbhilly all have their first daughters milking and have enough information to give confidence that they should be included alongside stalwarts Arblex and Arbbonjovi in our proven line up.

FREECALL 1800 454 694

Dairy News AUSTRALIA may 2014

22 // ABVs

Program improves herd health RICK BAYNE

Get the breeding right on a dairy farm and overall success will follow, according to Queensland’s Craig Sellars.

Over the past few years Mr Sellars, from Rosevale in the south-east of the state, has been doing just that as he strives for the “best possible cow”.

“I think that if you get breeding right, the rest just happens. If you don’t do the right thing with your breeding program, the rest just falls down around you,” he said.

The farm milks just over 300 mainly Friesian cows and calves 100-110 heifers per year.

That number has been trending upwards in recent years.

“The herd of cows is the core part of the business,” Mr Sellars said.

“That’s where we’re making our money and it makes life easier working with good cows.”

About three and a half years ago Mr Sellars adopted an ambitious breeding program with Semex that aimed to improve the quantity and quality of his mainly Friesian herd.

He started using Repromax high fertility, Healthsmart and Caving Ease bulls with the addition of Immunity Plus bulls a year ago to help make significant gains.

The farm uses Immunity Plus bulls to cut out breeding and health prob-

Who:

Craig Sellars Where:

Rosevale What:

AI

lems and produce better animals.

“The Semex rep comes out on the farm and grades the traits of every new heifer. If something is not quite right, such as the udders or the legs, they will try and pick up on it and improve it by selecting a suitable bull,” Mr Sellars said Craig Sellars milks about 300 mainly Friesian cows The program suits at Rosevale in south-east Mr Sellars’ desire for a Queensland. medium size cow that is traits, I think they are results. strong and likely to be a probably in the elite group.

“I’ve spoken to stud survivor.

Prior to adopting this breeders and they say “We are trying harder system, Mr Sellars was Immunity Plus isn’t for to get more heifers with involved in another comthem. If they’re trying to better breeding and the sell a bull they might want pany’s program “but use of some sexed semen. other criteria to present to I wasn’t achieving the We are probably 50% up a client or potential buyer. results that I wanted”. on what we did six or Several seven years ago,” years ago he said.

“If you don’t do the right thing the farm “I look at with your breeding program, had taken udders, feet, legs and overall the rest just falls down around part in the Wagyu strength of the you.” beef procow and that she gram, reducing its num“In my case, I’m not has longevity.” looking for a sale or a show bers of heifers.

Mr Sellars admits that “We got that out of the cow. I’m just looking for his emphasis on qualsystem a few years back a medium cow that will ity breeding is not for all and are going more and work. tastes – he even debates more to dairy,” Mr Sel“It just depends on his priorities within the lars said. what you want out of a family – but he says it “Anything that is black cow. In regards to health has been achieving good

and white Friesian we’ll keep every one of them.

We’ll keep whatever heifers we can get.”

However, they are more selective if some heifers have been put to a jersey bull.

Since moving to Semex the farm has increased its in-calf rate.

“It’s hard to put in a percentage but I’m happy with the rates,” Mr Sellars said.

The farm has been successful in targeting its spending to better quality.

“We have two grades when we mate – the first choice where we spend a bit more money, and a

Craig Sellars

last choice which we put to a cheaper bull,” Mr Sellars said.

“We are getting better conception out of the

first choice so we don’t have to use as much of the second choice and that improves the quality of our herd.”

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Dairy NewS AUSTRALIA may 2014

ABVs // 23

ABS Australia refines strategy ABS AUSTRALIA has implemented a new business

Dam: BW Centurion Iris K347, EX 95

James Smallwood

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LIC COWS ARE BRED TO PRODUCE MORE MILK SOLIDS ON LESS FEED.

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strategy with a renewed regional focus.

ABS Australia general manager (Australia and New Zealand) James Smallwood said the company had bolstered technical services capability, and regional product and service delivery.

Mr Smallwood said the new initiatives were undertaken to better align the way the company does business with clients.

The major changes include the appointment of new regional managers to oversee the company’s operations in western Victoria, South Australia and northern Victoria.

Neville Pulham and Klint Wagstaff have taken on the roles of regional managers in western Victoria/South Australia and northern Victoria respectively.

“This move has been made recognising each region has a unique set of challenges requiring a more flexible approach,’’ Mr Smallwood said.

“This includes how clients are serviced and the type of products required, in particular, bull teams to suit differing production systems and farming types.

“As a truly global supplier, we are able to provide the full range of bulls – but recognise some will suit management systems better than others.

“Having regionally focused teams will ensure farmers receive the most suitable products for their business.’’

Originally a dairy farmer, Mr Pulham has worked in the dairy genetics industry for 15 years, including the past decade with ABS as retail sales manager based at Warrnambool.

Mr Pulham said the experienced and adaptable workforce at ABS Australia were able to tailor programs to help farmers achieve optimum profit from their herds.

Originally a dairy farmer in Victoria’s western district, Klint Wagstaff has worked in dairy genetics for nine years and the industry as a whole for 18 years.

Now based at Kyabram in northern Victoria as regional manager, Mr Wagstaff said ABS Australia was focused on providing the products, technical services and specialist knowledge in a complete package.

New to the ABS team is Boorcan dairy farmer Marcus Rees, who will take up the role as key account manager at Terang in April.

Marcus and his wife Bec milk up to 280 cows, operate Glamorgan Holstein stud and bred the No. 1 genomic Freddie son, CRVGlamorgan.

Mr and Mrs Rees are on-farm challenge winners and were co-owners of the IDW 2014 Semex Spectacular saletopping heifer Gorbro Uno Tiffany at $12,000.

Mr Rees said the role with ABS would take his passion and skills for dairy genetics and bull selection to a new level, helping farmers with breeding decisions to maximise returns.

“ABS Australia has refocused the efforts of the technical services team in recognition of the importance of maximizing genetic investment and the need to improve the Australian dairy industry’s breeding performance,’’ Mr Smallwood said.

The technical services teams now operate regionally with Matt Aikenhead based in western Victoria/South Australia, and George Malinov in northern Victoria.

“ABS is committed to having the best technical support team in place to provide information and advice on reproductive performance,’’ Mr Smallwood said.

“Matt and George will deliver this service directly to users in Australia, and provide access to the ABS Global Tech Services support network.’’

FREECALL 1800 454 694

Dairy News AUSTRALIA may 2014

24 // management

This 60 cow rotary dairy was purchased from North Richmond, dismantled and transported in 7 semi-trailer loads.

Building a large dairy from scratch gordon collie

BUILDING A dairy herd from scratch

with a short-term goal of milking at least 600 cows a year is a challenge that progressive young Queensland farmers Ged and Rachael Mullins are relishing.

The couple only started in 2009 setting up the former beef grazing property near Leyburn on the Darling Downs.

They began milking with less than 100 cows the following year and have been on an expansion curve ever since.

Mrs Mullins has managed the rapid building of herd numbers, a task achieved through a combination of acquiring cattle from as far away as the Atherton Tableland and breeding up heifers by continuous mating using sexed semen.

The herd is now close to 400 cows and they plan to be milking 600 in about 18 months with a future feeding capacity for 800.

They have a four million litre contract with Lion which they are now close to filling, having introduced three times a day milking last August.

“We are milking at 4am, noon and 7.30pm and the new system has boosted our milk production by about 20%. Each milking takes about two hours with a one hour washdown,” Mrs Mullins said.

Converting their dairy enterprise has been a huge task, but with upsides.

“We’ve been able to set the place up how we wanted from scratch which has been good. We started with just a bit of boundary fencing and not much else,” Mrs Mullins said.

Mr Mullins grew up dairying on the Downs at nearby Allora. While two brothers followed father Tom into the family business, Ged spent 14 years as a silage contractor.

Mrs Mullins had an early introduction to large scale dairying with Moxey Farms at Richmond, north of Sydney, where she met Ged during his contracting travels.

“We decided the time was right to set up our own dairy and started looking for an opportunity,” Mrs Mullins said.

They were attracted to the 900ha property, Ellangowan, and came up with a novel approach to make an affordable entry into the industry.

A 240ha block of sandy ridge country was split off to build their inten-

Who:

Ged and Rachael Mullins Where:

Leyburn What:

New dairy

sive dairy while the silage contractor Mr Mullins had worked for bought the balance of the property which includes fertile creek flats. These were set up to grow silage crops and provide hay under centre pivot irrigation.

Mr Mullins said the arrangement let them get a start in dairying with the benefit of a secure feed supply.

They set about the big task of converting their block, building infrastructure including a large milking shed, yards, feed pad and feed shed.

When a big 60 cow rotary dairy came on the market at North Richmond the couple grabbed the chance.

They did their own demolition and the carefully numbered pieces were transported to their new home in Queensland in seven semi-trailer loads.

The huge square shed they built to house the rotary is their own unique design.

The milking platform looks small sitting on 300 square metres of concrete slab. Each side has a 10m opening and the roof is 6m high at the eves, rising to almost 10m in the centre.

“We wanted a spacious dairy so we could easily move about and milk in comfort,” Mrs Mullins said.

Mr Mullins said the high pitched roof was designed to cope with extreme rainfall events and with the big side openings provide good air flow.

“We can get a big storm with four inches in an hour and you’ve got to be able to get the water away,” he said.

The sandy ridge soil is free draining and has been great for cow health.

The herd has ad-lib access to a mixed feed ration designed to maintain a steady milk production around 28 to 29 litres a day at 4% fat and 3.5% protein.

Ged Mullins in front of his feed shed on his Darling Downs property.

“The only bit of pasture we have is for the dry cows,” Mr Mullins said.

The average rainfall is about 650 mm a year, predominately in summer and extremely variable.

“Feeding a total mixed ration is the only way to operate a dairy in this area with any security,” Mr Mullins said.

He laid a 100m by 11m concrete slab for a double sided feed pad with 6m in the centre for easy machine feeding and cleaning and 2.5m standing room for the cows on either side.

The silage mix is fed directly onto the slab rather than in a trough, which Mr Mullins said minimised wastage.

It is a quick and easy operation with a tractor and side scraper to keep the feed within reach of the cows.

Roofing the feed pad is on their future agenda. There is also potential to build a second feed pad exactly the same when cow numbers warrant.

The cows are fed a silage-based ration, with about 8.5kg a day of cracked grain, meal and hay. Grain used is two thirds wheat with barley or corn.

“At the moment, I’m mixing about 18 tonnes of feed a day or about 44kg per cow.

“I work on having 2-3% of the ration left over each day and adjust the feed supply to achieve this so I know the cows are not hungry.”

Left over feed is scraped off the pad with a dozer and fed to dry cows which

Ged and Rachael Mullins with Emily and Jack.

also get a ration of straight silage.

Three above-ground silage heaps can each hold about 3000 tonnes of wet feed.

Mr Mullins built a 48m by 16m feed shed with bays for bulk feed ingredients and plenty of storage for big square bales of lucerne hay.

They invested in a high quality stainless steel lined mixing wagon imported from the USA which has a capacity of 20 cubic metres.

The property is laid out for fast, efficient ration mixing and feeding which Mr Mullins estimated took about 120

hours of his time every month.

Mr Mullins manages the irrigation with three centre pivots, one of which is towable.

This covers a cropping area of 180 ha, with 140ha irrigated at one time.

The towable pivot allows about 40ha to be rotated.

Mr Mullins said one pivot was devoted to growing lucerne with the balance focused on providing about 6000 tonnes of corn silage a year.

Part of their future planning is to buy back the rest of the property when finances allow.

Dairy NewS AUSTRALIA may 2014

management // 25

Pipe and riser system lifts pasture growth Bamawm farmer

Terry Malone says he’s never had more fun farming and credits much of this to his new irrigation system.

A new pipe and riser system has replaced the old flood irrigation scheme, freeing up time Mr Malone and his staff now utilise on other aspects of the farm.

The Archards Irrigation Pipe & Riser system is now a reality, allowing the Malones to utilise both GMW and deep lead bore water to irrigate their whole property, combining nearly 1000 megalitre water license.

“We have already experienced water and time savings, no longer having to fill channels to irrigate a small area is a great benefit,” Mr Malone said.

“One area that used to take up to 48 hours to irrigate is now irrigated in under 10 hours with our pipe and riser system.”

Mr Malone and his wife, Francie, have 270 cows on 152 hectares, including 20 hectares leased from his brother.

The home block of 128ha is now laser levelled and covered by the pipe and riser system.

The Malones received funding from a Goulburn Broken Catchment Management Authority water efficiency program and from the former Northern Victorian Irrigation Renewal

Who:

Terry and Francie Malone Where:

of farm, which still causes Mr Malone to shake his head and smile.

“It mightn’t sound much but I thought this was amazing.

“We can push water from the lowest point to highest point and get

same flow out of there as you do anywhere else.”

The former inefficient Goulburn Murray Water pipes forced them to cap delivery at 10 megalitres from the wheel but they

Risers located across the farm can delivery water quickly and efficiently.

to page 26

Bamawn What:

Pipe and riser system

Project (NVIRP) to complete the project in a single installation.

They worked with NVIRP representative Jackie Tomlinson and Goulburn Broken CMA representative Brendan Stary to secure funding and chose an Archards Irrigation Pipe and Riser system.

Channels and water wheels that used to slowly fill the farm’s bays have been replaced by risers, which can water paddocks up to four times quicker than the previous system.

This saves water on perennial pastures, increases production due to improved accuracy of watering, eliminates water losses and seepage from farm channels, reduced labour costs due to reduced maintenance and simplicity of watering and enables the entire farm to be watered.

“We always had a problem with effluent as we could only put it on certain paddocks, now we can put it on any paddock” Mr Malone said.

There are four pumps on the system – effluent, recycled, a 10 megalitre a day deep bore and a big pump on the Goulburn Murray Water channel.

If a bay is over-watered the water drains into the recycling dam, and this is also connected to the system. The 12 megalitre recycle dam is at the lowest point of the farm and this can now be used to water the highest point

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AUSTRALASIA’S LARGEST AND MOST INNOVATIVE SUPPLIER OF CO-PRODUCT STOCK FEEDS Terry Malone

Dairy News AUSTRALIA may 2014

26 // animal health

Australia and NZ sign FMD pact AUSTRALIA AND New Zealand

will work together on preparedness for a foot-and-mouth disease (FMD) outbreak in either country.

Minister for Agriculture, Barnaby Joyce, and his New Zealand counterpart, Nathan Guy, met in Melbourne to sign an agreement on the joint effort.

“Our number-one plan and focus of much of our biosecurity efforts is to keep FMD out of Australia and New Zealand. But you can’t stick your head in the sand about something this big; you have to plan for the worst,” Mr Joyce said.

“Australia can deal quickly and effectively with emergency animal disease outbreaks.

“However, an FMD outbreak could have devastating impacts on our livestock industries, exporting capabilities and trading reputation.”

Recent Australian research found the impact of an FMD outbreak could cost the economy $52 billion over 10 years.

Mr Guy said greater collaboration would improve readiness and capacity to cope with an outbreak of FMD or

any other exotic animal disease.

“We will share intelligence on risk, collaborate on training, share scarce skills in the event of an outbreak and influence international policy on disease management.”

New Zealand has now joined an Australian FMD training scheme in Nepal, which has engaged the UN Food and Agriculture Organisation to allow veterinarians and livestock industry representatives to experience FMD BarnabyJoyce in the field.

An outbreak of FMD would cause huge economic and social damage with the closure of many international markets for animal products, Mr Guy said.

IDeNTIfy

Control measures have huge effects on tourism, food chain businesses, farming families, rural business and communities, he said.

The agreement provides for a reserve of veterinary specialists and other skilled personnel to be put to work quickly.

New Zealand recently sent vets to help in an avian influenza eradication effort. They continue to observe the Australian FMD simulation - Exercise Odysseus - discussions and field exercises being held this year.

“Exercise simulations and participation in activities also ensure understanding of how systems work in the other country, which means staff can rapidly integrate into the other country’s systems if they are needed,” Mr Guy said.

Mr Joyce said working together and participating in exercises helped build useful links.

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Terry Malone with long-time employee Sam Newth.

Pipe and risers boost production from page 25

can now deliver water at 20ML having installed an 18 inch header pipe, which comes down to a looped 141/2-15 inch pipe in the loop. The Malones increased the size of the pipe to 18 inches at their own cost and say it has paid off.

“Probably the greatest thing I appreciate, I can set the timer on the bore and that paddock will be watered automatically overnight. I can set the timer and go to bed and when I wake up it’s done.”

Since the irrigation, they have grown much more feed. As they can water the areas more quickly, they water them more often. Mr Malone does not want to expand numbers, even though he said the farm could easily run 400 head, so some annual pastures are allowed to go to seed, saving the need to re-sow. “The cattle aren’t keeping up with the feed, especially the young cattle,” he said.

“We can spread more effluent and water is on and off so the paddocks are not water logged.

“We had 23 acres (9ha) that would take 48 hours to water and the water would stay on the ground. We have cut the time it takes to water some bays from 10-12 hours down to three. Lucerne doesn’t like to be water logged and now we use a lot less water.

“In autumn with the old system, you’d be watering up hard ground and it would last for a week. Last year, we were finished in no time at all. It doesn’t matter how hard it is on top, because with that wall of water coming through, it softens the ground quickly.”

Mr Malone is about to add further automation through Archards Irrigation.

This involves soil moisture probes to determine how much water is required, and fine-tuning the flow control to ensure the amount required for each bay

is accurate. The pipe and riser system gives the flexibility to water the right crop at the right time.

The Archards Irrigation system is fully portable, so the automatic riser control can be moved according to requirements, reducing the amount of money invested. Water delivery can then be set by Mr Malone from his house.

Soil moisture monitors will help provide a more accurate assessment of the water required, said Brenton Jettner of Archards Irrigation.

“There will always be a visual component, what we see above ground, but soil monitors extend the range of information we’re able to collect,” he said.

“Looking at the plant provides 50-70% of the information we need, while soil moisture monitoring provides an additional 30%, so we get a fuller picture.”

Mr Jettner said one moisture probe per soil type would be required, and three usually suffice.

“You can then produce more feed with less water. With bay control and soil moisture monitoring, you’re taking much greater control.”

Mr Malone said the recent improvement has kept them on the farm.

“We’re retirement age now if we wanted to be, but I just got so enthused about doing all this, and seeing it through, and I haven’t finished yet.

“It’s a helluva good farm, a good herd of cows, we have good staff. I’m really enjoying it.”

Mr Malone said he could not ask any more of Archards, Humberts Landforming, Wickhams Earthworths and his own staff.

“My staff used to milk then work til after dark – pulling out fences, putting fences back up. It was a big effort by everyone and a credit to all involved.”

Dairy NewS AUSTRALIA may 2014

animal health // 27

Dry cows need attention June in Northern Victoria is when the spring cows are dried off and for many lucky people it’s not just the cows who are taking a holiday.

I have written before about how important the management of the dry herd is, and what an incredible opportunity the couple of months that we give our girls off when they are dry represents.

The dry period of a cow’s lactation cycle represents often the best chance to cure intramammary infections that may have been picked up during the previous lactation.

Dry cow antibiotic therapy can not only cure existing infections but also prevent new infections from occurring whilst dry.

Using products that produce a physical barrier to the entry of bacteria into the dry udder also have an important role to play in preventing new mastitis cases in dry cows, and increasingly in heifers.

Combination therapy with both a dry cow antibiotic product and a physical barrier product represents the optimum level of mastitis control and prevention and has for some time been my preferred option.

I have had a number of farmers say that combination therapy is too expensive to use and I simply cannot agree with that analysis. ‘Mastitis is simply too expensive to ignore’ is a more accurate statement to make with a clinical case estimated to cost in excess of $150 and the financial penalties due to high cell count and the production losses from sub clinical udder damage amounting to a great deal more.

Depending on the choice of antibiotic used, a combination therapy protocol can cost as little as $21/cow and even when using the premium broad spectrum longest acting intra-mammary dry cow antibiotic it can cost as little as $32/cow.

When you review the published studies on the level of reduction of both subsequent cell counts and new clinical cases in the following lactation, it is hard not to make an argument for dry cow therapy.

Consulting with your herd veterinarian to iden-

tify the level of infection and the types of mastitis pathogens (bugs) that you have in your herd is also of critical importance if we are to use antibiotics responsibly and target treatment to cows with a realistic chance of coming in clean in their next lactation.

Cows that carry an active or chronic infection from one lactation into the next have a very low chance of being successfully cured in the future, and if they carry an infectious pathogen like Staphylococcus aureus also represent a clear and present danger of spreading the infection to other cows in the herd.

The Dry period is also a time of preparing the cow’s immune system to produce the quality colostrum that will protect her calf in its vital first few weeks of life.

Vaccinating the cow when she is dried off is an ideal time. The vaccination, if an annual booster, will cause a rapid spike in her antibody levels and will thus provide the maximum level of antibody available to transfer into the colostrum.

Where a primary or priming shot is required, it must be given early in the dry period to allow the booster shot to be given no later than 3-4 weeks before the expected calving date to allow the production of the antibodies in time to be transferred into the colostrum.

Dry off is also an ideal time to consider a drench for fluke and worms so that they can enter the next lactation free of parasites.

It may be worth seeking advice from your veterinarian as to which drench product is going to be appropriate. Bulk milk tank testing for liver fluke antibodies or faecal egg count analysis to determine the need (or otherwise) for a drenching is often money well spent compared to using an inappropriate or unnecessary drench.

Sadly but truly, I know a lot of dairy farms that choose their drench product based solely and wholly on what gift with purchase they will receive. Whilst this may be a great way to

animal health rob bonanno choose what makeup you may buy, choosing which and whether to drench based on the trinket that

comes with it is never appropriate.

Talk to your veterinarian about getting some testing done this autumn.

It is also critically important to, at the barest minimum, maintain the body condition score on the cows in the dry herd.

Too often, the dry cows can be “out of sight, out of mind”, especially if out on a run-off block or at agistment.

My advice is that it is

always worth the fuel and the time to take a drive out to check on the dry cows with your own eyes every week or two at a minimum.

Many times over my career I have seen cows return from agistment in poor condition and facing a very tough assignment to transition successfully into lactation, especially if the feed situation is described as “a bit tight”.

Working with your vet, and the new

body condition score application from Dairy Australia for your iPhone, it is possible for you to measure their body condition over a period of time to track changes.

Assuming that your cows are in good condition, they have had all their vaccine boosters, been drenched (if necessary) and are ready to fire, then about 2-3 weeks before their due date it is time for them to enter the transi-

tion herd and begin their final preparations to a successful calving and subsequent lactation.

Talk to your dairy vet and your other advisors about their nutritional requirements at this time as it is critically important that you get it right. That, my dear readers, is a topic of discussion for another day!

• Rob Bonanno is director of the Shepparton Veterinary Clinic.

SCOURS CAN CHANGE THE FUTURE FOR YOU AND HER. PROFESSIONAL PROTECTION FROM YOUR VET.

When you suffer a calf scours outbreak the future looks a little bleak. You’ll not only experience productivity losses such as reduced income, additional expenses and genetic setbacks, you and your family will also face the emotional toll of scours. Stressful work hours, endless days managing sick calves and the disappointment of mortalities can be tough on everyone when scours hits. A serious case of scours can even make some farmers question their farming abilities. Ultravac Scourshield helps you prevent scours and gives you and your family peace of mind.

For more information on Ultravac Scourshield contact your vet or call Zoetis on 1800 814 883.

Less scours losses, more gains.

Copyright © 2014 Zoetis Inc. All rights reserved. Zoetis Australia Pty Ltd. ABN 94 156 476 425. 38–42 Wharf Road, West Ryde, NSW, 2114. www.zoetis.com.au 04/14 ZL0018 PAL1079/DN

Dairy News AUSTRALIA may 2014

28 // animal health

Three-year study scotches facial eczema myth THE MYTH that

applying lime to pasture will reduce the incidence of facial eczema spores has been scotched by a study by DairyNZ, the New Zealand levy-funded

research body.

A few other FE myths also took a hit.

The study, three years in the running, was aimed at better understanding how to control and

manage FE. DairyNZ project leader Jo Sheridan said the project was launched after farmers raised concerns about their high reliance on zinc to control

New Zealand dairy farmer Michael Bennett and veterinarian Emma Cuttance.

FE in cows.

The farmers wanted to know whether more could be done to limit or reduce the amount of spores in pastures.

Funding from DairyNZ

Teatseal .

Real stories, real savings. ®

Ben McKenzie – Cobden, VICTORIA “Since using this product I have almost totally eliminated mastitis at calving and effectively removed mastitis issues from my herd…

I have more than saved the cost of the Teatseal, antibiotic dry cow therapy and associated application labour by the massive reduction in lost milk, medical costs, time and culls.”

Mark Williams – Toolamba West, VICTORIA “The use of Teatseal is now an integral part of my herd management. The initial cost is far outweighed by the time and money saved treating clinical mastitis. Less stress on cows, staff and in particular management.”

Peter & Jeanette Clark – Korrine, VICTORIA “250 cows treated with Teatseal costs approximately $4,000. Milk from each cow saved - 7,000L at 35cents/L equals $2,450. So in our case, two cows saved [from being culled] more than pays for the Teatseal.”

Times are tough. Don’t make things tougher by dropping Teatseal from your drying off program. Get real results by treating every cow, every dry off. ®

Zoetis Technical Information: 1800 814 883 www.teatseal.com.au © 2013 Zoetis Inc. All rights reserved. Zoetis Australia Pty Ltd ABN 94 156 476 425. 38-42 Wharf Road, West Ryde, NSW, 2114.

AM960 03/13 PAL0846/DN.

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3/05/13 9:51 AM

“A second pasture study looked at whether using different pasture species reduced facial eczema risks.” and the Sustainable Farming Fund allowed the appointment of Emma Cuttance, a veterinarian and post-graduate student who is completing a thesis on FE. “We have managed to examine a range of options that come up on farmers’ radar when it comes to controlling facial eczema at a pasture level, and also to test some of the recommendations that exist for it,” Ms Sheridan said.

One idea was that applying lime to pasture will reduce FE spore counts to harmless levels.

DairyNZ arranged for New Zealand sharemilker Michael Bennett to test the claims between 2011 and autumn 2013.

Trialling lime applications at varying levels against a control of no lime showed there was no statistically significant difference in spore count concentrations on the application areas and the control.

“The trial proved that short-term liming was not a reliable option, and removed another ‘possible’ treatment you hear about,” Mr Bennett said.

The project on his farm also sought to better understand the variability of spore count levels within a particular property.

Studying the spore counts at 40 different sites in one paddock revealed significant count variability and reinforced the need to have an

accurate spore count specific to the farm, and even to paddocks.

“Many farmers will just look in the newspaper to see what levels are doing in their area, but the results showed that’s not good enough – the range is simply too great,” Mr Bennett said.

He counts spores every week from early January in a district renowned for its high FE risk. Accurate spore counting early on means he can determine when to start drenching his 450 cows.

The work also showed that spore counting remains the most accurate means of determining FE risk.

Meanwhile a pasture study by DairyNZ looked at whether using different pasture species reduced FE risk.

“We found tall fescue and chicory could be options, though it needs to be a 100% pure sward of each variety,” Ms Cuttance said.

Results from a study done this season at North Island FE risk zones will identify farmers who are successful at managing eczema risk.

“We will be analysing the results from 110 farms to test the effectiveness of their protocols in protecting their herds,” Ms Cuttance said.

“This information will be used with the previous two years of trial work to help revise the best practice approach to facial eczema management for the industry.”

Dairy NewS AUSTRALIA may 2014

animal health // 29

Unlocking the mystery of ruminal acidosis Ruminal acidosis

costs the average Australian farmer around $350 per year for every cow, according to young scientist Helen Golder.

“On average 11% of lactating cows have ruminal acidosis at any time,” she said.

Ms Golder’s research is based on reducing the costs of ruminal acidosis through better identification of acidosis and improved management.

Ms Golder, from SBScibus, a science-based advisory and research company based at Camden NSW, has completed a joint industryuniversity PhD with her employer and the University of Sydney.

She was also awarded the Feed Central Young Dairy Scientists’ Communication Award at the recent Australian Dairy Conference in Geelong.

“My PhD focussed on increasing understandings of ruminal acidosis. Part of my current research with SBScibus is developing simple, cost effective, fast and reliable on-farm tests to assist farmers to identify ruminal acidosis,” she said.

“Improved diagnosis of ruminal acidosis will help Australian dairy farmers because it will allow better control of acidosis.

“The end result will be happier, healthier and higher producing cows and more dollars in the pockets of Australian dairy farmers.”

Ruminal acidosis (also called grain poisoning) is a complex nutritional disorder that produces a range of syndromes in dairy cattle.

Ms Golder said cows develop ruminal acidosis when they are switched between feeds too rapidly or are fed large amounts of grain- or sugar-based feeds (including turnips, molasses and fruit) without being fed enough roughage.

Ms Golder said herds generally have a low risk of ruminal acidosis when fed less than 6 kg of grain, but some forages, especially lush grasses and legumes

increase that risk.

“Cows are particularly at risk of ruminal acidosis around calving as this is a time they are often off their feed and are then given access to grain during milking.”

The costs incurred from acidosis are from lameness, loss of milk production, a drop in milk solids, especially fat content, costs of preventive treatments, loss of body condition, premature culling and death, Ms Golder said.

She said cows with ruminal acidosis are not always noticed in the herd as many of the signs can be subtle.

Cows displaying the following symptoms may be experiencing ruminal acidosis or had ruminal acidosis in the past: bubbly scours; paint brush haemorrhages associated with laminitis; bleeding from the mouth or nostrils.

Current identification of the disorder involves observing clinical signs of ruminal acidosis in the herd; assessment of feed and feed management practices; examination of milk production history; interpretation of disease and feed management history.

Diagnosis should then be supported by feed, rumen and blood analysis.

To improve the diagnosis of ruminal acidosis, Ms Golder tested the ability of a model developed by Dr Liz Bramley to accurately diagnose ruminal acidosis in cattle under experimental conditions.

Dr Bramley, as part of her PhD, developed the model based on rumen pH and concentrations of the rumen fermentation products: volatile fatty acids, ammonia and lactate.

“These were tested in rumen fluid she collected from 8 cows per herd in 100 dairy herds in South Eastern Australia.

“My colleagues and I then tested the diagnostic ability of each of the individual rumen measures to predict ruminal acidosis that was used in Dr Bramley’s model.”

Ms Golder said the

model was able to correctly identify cows with grain-based ruminal acidosis, but was not suitable for identifying ruminal acidosis in cows that had consumed significant amounts of sugar.

Ms Golder is currently exploring new methods of assessing rumen function on-farm.

“This research aims to deliver a simple, cost

effective, fast and reliable tool that can be used on-farm to assist farmers to diagnose ruminal acidosis.

“Accurate identification of ruminal acidosis will allow implementation of better control strategies, lower the financial costs and improve animal welfare.”

To reduce the risk of ruminal acidosis, Ms

Golder suggests: ■■ Avoid rapid changes to feed.

■■ Feed high levels of grain (more than 6 kg) or sugar sources including turnips with caution.

■■ Ensure an adequate chop length of forage supplements (>2.5 cm).

■■ Use feed additives if recommended by your veterinary advisor or nutritionist.

Feed Central’s Kim Colwell presents Helen Golder with an award for her research on acidosis.

These Dairy farmers have DiscovereD The missing piece of The calf scours puzzle – Have you?

and vec Corona ta o R d se u “I re my calves a I’ve noticed er for it. a lot strong none Out of 300 nd a got scours ck only 2 got si at all. rona is Rotavec Co at really a product th rs.” helps farme C Producer, Heyfield VI Neil Missen, Dairy

“I noticed a significant re duction of scours in my calves.

We had some late ca lvers that w eren’t vaccinated, and their ca lv es became sick – that made it even more evide nt to me tha t the product wa s effective.”

Gerard Myers, Da iry Producer, Rocheste r VIC

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Dairy News AUSTRALIA may 2014

30 // machinery & products

Replacement wagon an easy decision looked for a replacement and last in the Goulburn Valley needed to July they purchased a 24 cubic replace their ageing silage wagon, metre Schuitemaker, but still held there was little hesitation about onto the older one; “We bought the new one as an extra large machine, which brand they would go for. but we’re starting to Werner and Josy fill it up now.”

Lang run Lang Dair“The new one ies, from their prophas scales”, chips erty ‘Greythorne in Werner, “that’s Park’, just out of mainly for a casual Tatura. operator and they Their son, allow us to be conMarkus, oversees sistent with the the operation at Greythorne Park working clothes loads. It is very solchris dingle idly built, and the and his brother three beaters in the Philip runs another front really mix it up very satisfacdairy just across the road.

They have 50 unit rotaries on torily.”

“We priced feed mixers”’ said each place, and each milk 650 cows.

It is a mainly Holstein herd with 15 Phil, “but there are limitations on the size of the feedpad alley. A to 20% Jersey crossbreds.

Both farms milk all year round mixer wasn’t for us.”

“We never really had any probwith split calving of 65% in the lems with the old one”’ remarked spring and 35% autumn.

The dairy operation runs over Werner. “At one stage we fed a 1000 hectares, including a few out- few hundred large square bales blocks and all within a few kilome- of canola, they were very hard pressed, and it just tore them to tres.

They bought their first 16 cubic bits and fed them out. It put up metre Schuitemaker silage wagon with a lot of punishment during in 2006. “We were short of horse- the drought.

“It was feeding out for over power at the time and it was half the price of a feed mixer, so it was the 1000 cows a year – it certainly did logical thing to do” said Phil Lang.

“We didn’t need a mixer because the feed was already chopped. It needs smaller horsepower to run, that’s less cost and you just load it up and go.”

They get contractors in to cut the grass and maize silage, and it is loaded into the wagon with a JCB telehandler.

Both dairies have permanent concrete feed pads. The Langs run at fairly high stocking rates and Markus said that they have heavy clay soil that gets wet and boggy; “So minimising wastage is a big focus. We feed them so they clean it up.” The cows eat the pads out each day after milking.

Markus said that the old wagon was getting too small for their expanding operation, so they

When the Lang family at Tatura

Who:

Lang family Where:

Tatura What:

Silage wagon

its work.”

The 16 cubic metre machine had very few problems in the 7 1/2 years that the Langs ran it. They only needed to replace a conveyor belt and a broken gear on the floor.

Richard van Dooren, from Ag Machinery Australia at Strathmerton, has taken over the distribution of the Schuitemaker equipment in Australia since the Langs bought their first one.

“Richard gave me the confidence to buy another one”, said Werner. “He’s a farmer and he understands. He’s taken stocking parts seriously and the service behind it is excellent.”

Markus added, “It’s a disaster

if you have the machine out of order.”

The Schuitemaker wagon is generally used every day from December to August and is currently operated by a 105 horsepower Massey Ferguson 6265. It does 14 or 15 tonne of wet feed per day, including 900kg of additives. It is not used during spring, but if it is a dry finish to the spring, they’ll start earlier. Markus said that he would recommend the Schuitemaker to any dairy farmer.

“The main feed here is always grazing”, explained Markus.

“There’s never any spare feed on either of the dairies, but we have no intention of going to a feedlot system. We grow our own hay and silage and we are fairly well self-sufficient. We just buy in grain and byproducts. We can adjust the value of the feed with the material in the cart.”

The Lang family philosophy appears to be ‘Sustainable Expansion’. As Werner says: “I’ve always had confidence in the dairy industry. You take every opportunity as it comes along. We expand nearly every year. We purchased an additional 1000 acres (400ha) two years ago.”

Werner and Markus Lang.

Dairy NewS AUSTRALIA may 2014

machinery & products // 31

Daniel banks on reliable Welger baler RELIABILITY IS an

operational keystone when agricultural contractors are intent on making hay and silage bales at the optimum time under the most favourable conditions.

So it was exactly that way for Daniel Custance from Nyora, in south Gippsland, when it came time to upgrade his round baler last September.

Mr Custance runs his own ag contracting and tractor repair and servicing business and bought his Welger RP445 baler through Traf Tractors at Trafalgar, the local Lely dealership.

At the same time he took delivery of a Fendt 724 tractor, which he uses to operate the baler.

Mr Custance had always previously run a different brand of balers. “It was time for a change, and it’s been well worth it,” he said.

“The Welger is unbelievable, the best baler I’ve ever driven - even though it was a little dearer than the other balers I looked at, it is fantastic.

“The speed, efficiency, bale density and ease of use are real advantages. It runs on an ISOBUS connection, so we don’t have to wire up or set up the control box in the cab, we just have the monitor with a touch screen and fingertip control.”

Bale density, bale diameter, tying material and cutting length can be controlled from the baler handset in the tractor cab.

Lely Australia claim that the RP 445 is the most advanced variable round baler in the market place with bale diameters varying from 0.90 to 1.60m and the best tensioning system,

crop intake and chopping systems.

So far Mr Custance has done 10,000 bales this season with his regular customers, in a 30km radius from his home base at Nyora. The 10,000 bales is an indication of how good the season has been.

He describes the Welger as very user friendly. “The build quality is a big part of it. It has bigger rollers which mean it turns slower.

Greaseable bearings, automatic chain lubrication, endless belts, drop floor, Hydroflex control and rotor chop.”

He chose the optional ‘Xtracut17’ chopping unit and hydraulic brakes.

“You can change the knife selection from the cab. It has 17 knives in all, and you can run 9, 8 or all 17, depending on the fineness (the length) of chop that you need.”

Lely’s ‘Xtracut17’ system means that the 17 knives of the chopping unit are divided in two groups of eight and nine knives respectively which can be selected by the operator from the tractor cab to determine the length of chop.

The baler’s pick-up width is 2.25m and the 500 mm diameter chopping rotor has an exceptionally open construction ensuring that the spirally configured tines have a large grip of the crop.

Due to this rotor construction, crop throughput to the bale chamber is massive ensuring high output when baling high volume crops.

Daniel Custance’s Welger baler has done over 10,000 bales since last September without a problem.

BALE FEEDERS You expect strength, quality and performance from your farm machinery, and McIntosh Bale Feeders deliver all three. The McIntosh Bale Feeder is designed to an uncompromising strength standard. It is not designed to be the lightest on the market, because with today’s larger bales, faster tractors and less time for maintenance, the need for additional strength has never been more important.

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Dairy News AUSTRALIA may 2014

32 // machinery & products

McIntosh makes feeding time easier POOWONG NORTH

dairy farmer Ken Snell’s initial reaction to the McIntosh trailed bale feeder proved correct.

“As soon as I saw it I knew it would work well,” Mr Snell said. “It is so strong and durable, but so easy to use and that really appeals to me.

“Having the ability to hold the bales above the feeding cradle means even with our roto cut bales, we are able to remove the plastic and net without having the silage fall everywhere.”

The machine’s unique twin ram lift system gently places the bale into the cradle no matter what size or shape bale.

“Just drop the forks,

back in and lift and it just works,” Mr Snell said.

The deep vee construction gives a constant and even unrolling of the bales.

“Our farm has some steep hills here and I have been able to feed bales out in places I have never been able to feed out on before.

“We have total control of how we want the bale to be feed out right to the very end. This machine has certainly made feeding much quicker and easier.”

Allan Slater, from Claas Harvest Centre Gippsland, said they have received very positive results from the new bale feeder.

“We recently had trials of the machine with five foot silage bales weighing

up to 1300kg and it handled them and fed them out with ease.

“As balers are now able to produce larger and heavier bales each year, we have found we needed a bale feeder that can handle these bales.

“The McIntosh bale feeders’ robust design and strength where it’s needed will suit these demands of many of our customers”.

The McIntosh trailed bale feeder was voted the TMA Best Non Powered Machine of the Year at the recent Farm World field days, with judges commending its strong and simplistic design.

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Ken Snell with the McIntosh trailed bale feeder.

Mower’s central drawbar lifts flexibility FELLA HAS launching a trailed mower with transport chassis and centrally linked drawbar. The SM 3065 Trans with a working width of 3.00 m and the SM 3575 Trans with a working width of 3.50 m are both available with roller or tine-rotor conditioner.

Because the drawbar is centrally linked the mower can be easily swung to the left and right behind the tractor, the company says. This offers the flexibility of mowing to suit the ground surface and any other requirement, for example, when forage is lying on the ground, on sloping terrain and for contour line work.

The high lifting height (600mm) of the new trailed mower at the headland is made possible by lifting the transport wheels. The resulting ground clearance is perfectly suited for travelling effortlessly over mowed swathes, Fella says.

The freedom of movement of the mower

Fella’s trailed mower.

unit in working position of up to 400 mm can be relied upon to prevent the it from contacting the ground and digging into the sward, including even on closely undulating terrain.

The trailed hitch attachment of the SM 3065 Trans/SM 3575 Trans ensures good ground adaptation as well as ground-conserving and fuel-saving mowing.

Operator convenience is high, the maker says.

Fold-up hoods give good cutter bar access,

and steplessly variable cutting-height adjustment, without tools, speeds the job.

A robust pivoting gearbox puts less strain on the driveshaft even in sharp bends.

The tool box is integrated in the drawbar.

The mower with roller conditioner suits lowimpact conditioning of leafy forage, good for large volumes.

With the tine-

Because the drawbar is centrally linked the mower can be easily swung.

rotor conditioner version the possibility of adjusting the conditioning intensity in five positions without the use of tools makes for flexibility regardless of weather.

The SM 3065 Trans / SM 3575 Trans is fitted with Fella’s Driveguard overload protection as standard equipment. www.williamadams. com.au

Dairy NewS AUSTRALIA may 2014

machinery & products // 33

Automation opportunities Automation solutions are already having

a big impact on many Australian dairy farms and there are exciting options on the horizon.

FutureDairy project leader, Associate Professor Kendra Kerrisk, believes the greatest opportunities lie with technologies that save labour by automating repeated tasks, collect and report data to help decision making or collect new data that hasn’t been able to be recorded in the past.

“Robotic milking offers all three benefits but of course it involves a major capital outlay and a period of 6-12 months to adapt the farming system to realise these benefits,” she said.

“There are now four brands on the market giving more options with single box, multi-box and the robotic rotary.”

Other repetitive tasks that can currently be automated in the dairy include yard washing, drafting

and weighing cows, individualised feeding, milk sampling and testing for composition, oestrus detection aids and mastitis indicators.

“There are numerous robotic arms available overseas for pre-milking teat preparation and post milking teat sanitation, although they are not available here yet.

These are mostly compatible with the manufacturers’ own milk harvesting installations.”

The FutureDairy team is excited about new technologies that allow dairy farmers to collect animal performance information.

“This is an example of products that allow automatic collection of information that we haven’t been able to record in the past.”

“For example, the combined use of activity monitors and rumination sensors is looking very promising for auto-

FutureDairy has conducted some initial trials on robots to herd dairy cows from the paddock to the dairy with promising results. matic heat detection, early diagnosis of illnesses and possibly to provide an automatic alert at the onset of calving. This tech-

nology is commercially available in Australia,” she said.

In 2014 the FutureDairy team will be conducting

trials to better understand the value of the data provided and how to interpret the results.

Technology has also been developed to automatically sample milk from individual cows and analyse it for automatic detection of animal performance, particularly oestrus, mastitis and ketosis.

“The technology is sold overseas but it is unknown if, or when it might become available in Australia,” she said.

FutureDairy has conducted some initial trials on the potential to use a robot to herd dairy cows from the paddock to the dairy.

“The results were very promising; we were

amazed at how calm the cows were in the presence of a robot.”

FutureDairy will be continuing work in this area using a custom-built prototype, in association with the Australian Centre for Field Robotics at the University of Sydney, who are pioneering the use of robots in a range of agricultural settings.

Aitchison’s First Pneumatic Disc Drill

Aussie Pumps launches cleaning blitz Australian Pump Industries (or Aussie Pumps) has produced a cleaning equipment catalogue, Aussie Blaster Blitz, specifically targeting rural applications.

Aussie Pumps’ high pressure cleaning equipment is uniquely suited for tough applications ranging from machinery wash-down to stockyard flushing, dairy wash-down and even shipping shed decontamination.

“We set out to showcase our R&D efforts and to show that all Australian farmers can cut costs, save time and water, and carry out cleaning tasks more safely with the right equipment,” said Aussie Pumps’ Hamish Lorenz.

The company’s full range is illustrated from engine drive pressure cleaners, right through to heavy duty steam cleaners designed for decontamination or sterilisation.

The full range of machines features Australian designs that have won awards in the USA and other export markets.

A full range of labour saving cleaning accessories are also fully illustrated with details to make selection easy.

They include hose reels for long length hoses (ideal for cleaning combines or big machinery), long length telescopic lances, grit blast kits and replacement unloaders and other major pressure cleaner components.

Replacement pumps from the ‘Big Berty’ range are also featured with interchange ability data between brands to enable operators to replace complete pumps on their existing machines at minimal cost.

INTRODUCING THE BRAND NEW...

SEEDMATIC AIRPRO® 4132 D DISC DRILL ● 4m sowing width ● Narrow 125mm (5”) row spacing ● 32 independently mounted large concave disc openers ● Only 2.75m overall transport width ● Excellent contour following abilities

● Huge 18” cutting discs ● 1 tonne seed bin, 1.5 tonne fertiliser bin, can fit. Optional small seed box. ● Direct drive dispensing units for accurate sowing ● VERY COMPETITIVELY PRICED!!!

Contact your local Reese Agri Aitchison dealer for details or freephone 1800 140 196 Brendon Prentice 0400 540 300 www.reeseagri.com.au

Dairy News AUSTRALIA may 2014

34 // machinery & products

Case 4994 now a rare sighting I have to say it didn’t occur to me that this column would become an obituary so soon, but the timing somehow seems appropriate. The reason is simple: one of the last of the few examples in Australia of this month’s feature is likely to be replaced soon. It has fallen victim to age, hard work, and the need to have ever more productive machines at the front line of contracting and farming.

You see, the tractor of interest is the almighty Case 4994. This beast of a machine was released in the mid-1980s when Case ran short of money to complete development of their ambitious six-wheeled dual-articulation high horsepower

grunt

john droppert super tractor.

What they did instead was build upon the highly successful four-wheel steer 4WD range they had, pairing a turbocharged 400hp V8 Saab-scania engine with a 12 speed full powershift transmission.

The resulting monster topped out the range of the 300hp 4894, 261hp 4694 and 212hp 4494. Not a machine for dairy farming - and certainly not one for hobby farmers - but a creation worthy of respect for its sheer power and presence.

Unfortunately, despite being at the forefront of technological progress the

big machine proved to be a bit of a handful to keep running. Well, by some accounts, a lot of a handful.

Weaknesses in the powertrain meant reliability was poor and breakdowns frequent. With the acquisition of the Steiger company in 1986, Case obtained an alternative large 4WD platform.

Further development of the range ended and the iconic rigid frame machines ultimately disappeared. The worst seller was the first to go, and in the end only 224 4994s were built, of which a dozen or so reportedly made it to Australia. Small numbers in service only compounded the reliability woes, with parts dif-

ficult to come by even at the best of times.

I’ve seen two of these machines in action. One belonged to my father and for over a decade was a regular sight laser grading around the Macalister Irrigation District before being traded in and sold out of the region. The other belongs to another Gippsland contractor, also part of a laser grading setup. A few more pop up

The Case 4994 is worthy of respect for its sheer power and presence.

from time to time in the classifieds, usually in need of some serious TLC. The smaller machines in the series are far more numerous, and over two decades since the line was killed off, many are

still going strong. But if you do have a 4994 that you’re perhaps using to roll the silage, drop us a line. It’d be nice to know the obituary is indeed premature.

• John Droppert has no

mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a variety of roles for both profit and fun.

No mucking about with Pichon manure spreader MUCK RUNNER Pty Ltd, based

in Mount Gambier, SA, has been supplying quality machines to Australian farmers and contractors for more than 16 years.

Run by Tom and Louise Paltridge, the company is the official Australian importer of the Frenchmanufactured Pichon and Rolland machines.

Muck Runner recently delivered the latest Pichon manure spreader to SA farmer David Somerville. It is the largest model being run in the Southern Hemisphere.

Pichon is a French company which has been manufacturing galvanized effluent tankers for at least 40 years and its manufacturing excellence extends to a range of rear discharge manure spreaders.

Muck Runner supplies the whole range of Pichon MuckMaster manure spreaders with capacities from 9.3 cubic metres to 23.6 cubic metres.

SA farmer David Sommerville with his new Pichon manure spreader, the largest in the Southern Hemisphere.

Standard features include fully hot dipped galvanized structure at 480°C, commercial axle with 10 studs, hydraulic brakes 420 x 180mm, the largest diameter beaters on the market (1035mm diameter) with 46 reversible blades, sprung drawbar, rear guillotine door, hydraulic floor chain tension and hydraulic jack.

Mr Paltridge said the machines fit the needs of customers looking for heavy duty construction and spreading quality.

“The size of the beaters and their positioning provide overlap of the

left and right beaters and spreading vanes ensuring complete processing of any clumps and lumps,” he said.

“Additionally, this gives a benefit of saving energy as the reversible blades only come in contact with the spreaded material during the exiting arc of travel.”

Muck Runner can also order a range of accessories in order to handle any type of solid manure.

A hydraulic rear hood can also be added to any existing machine allowing farmers or contractors to spread any material without compromise.

Tel. 08 8738 8045

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