Dairy News Australia July 2016

ADF push for fairer contracts PAGE 3

TESTING TIMES

How farmers are toughing it out PAGE 4-7

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LIQUID GOLD How the Australian love of beer is helping dairy farmers boost production. PAGE 30

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DAIRY NEWS AUSTRALIA JULY 2016

NEWS // 3

ADF push for fairer supply contracts THE INDUSTRY’S peak advocacy

World’s largest robotic dairy. PG.15

Stars back farmer footy day. PG.16

body Australian Dairy Farmers is pushing for new contract deals with processors that will minimise farmer risk and give them more choices.

Acting president David Basham says new contract options are essential if processors are to win back the confidence of farmers.

The use of a futures market is also high on the agenda.

Mr Basham said every option was on the table as the ADF’s policy council works on different ideas.

“We’ve said we won’t exclude any ideas at this point of time,” Mr Basham said.

“We’ve got a lot on the table and the next step is to get them in a more formal structure and present them to the processors.”

The ADF hopes to start discussions with processors before the end

of this month and wants some new contract options in place for the next financial year to “hopefully resolve some of the risk issues”.

Mr Basham says discussions around a futures market will need to be explored at both farmer and processor levels.

“Either farmers could engage in futures trading or processors could and then pass that back to the farmer,” he said.

“If we could go to the market and say I’ll supply X amount of milk at this price for five years it would give us some surety.

“The market could move up or down but it gives certainty about what price you’ll get paid for that milk.”

Mr Basham says ADF want to see companies offer different and flexible contracts tailored to the risk

Fendt’s masterpiece. PG.32

MOVE TO ORGANICS

NEWS ......................................................3-13

Tony and Gayle Woods are long-term employees with Highlands Organics, an dairy supply and processing company in NSW bucking the trend in terms of milk price.

But as Gordon Collie reveals, it’s been a hard road to get there.

See page 10.

WORLD NEWS .................................. 14-15 AROUND THE REGIONS ............. 16-17 OPINION ..............................................18-19 MARKETS .......................................... 20-21 MANAGEMENT ...............................22-23 ANIMAL HEALTH ...........................24-27 BREEDING MANAGEMENT ........... 28 STOCKFEEDS .................................. 29-31 MACHINERY & PRODUCTS ...................................... 32-34

needs of individual farmers.

“We see it happen in the domestic market with domestic processors and think that is something others should look at.”

The ADF also wants ‘clawback’ payments removed. The Australian Consumer and Competition Commission is currently investigating the use of ‘loan payments’ by Murray Goulburn and Fonterra.

Mr Basham said there had to be fairness in contracts. “You could strongly argue that dropping the milk price for a couple of months to below the true market value of that milk to adjust the average price for the year isn’t fair,” he said.

Mr Basham said it worked this year only because there was nowhere else for the milk to go. “If other companies were able to take Fonterra and Murray Goulburn’s milk and process

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it at the normal price, all the suppliers would have left,” he said.

The ADF believes processors will understand the need for change.

“They need to be open to suggestions,” Mr Basham said.

“There’s a lot of trust lost between farmers and some of the processors. This is something we need processors to embrace and see that’s its win-win for all.

“We can’t have farmers exposed as much as they were in April because their businesses aren’t robust enough to take that as well as normal cyclical movements in the price.

“To have that and then the opening price so low is a double whammy.”

• How should contracts change?

Email editor@dairynewsaustralia. com.au

DAIRY NEWS AUSTRALIA JULY 2016

4 // NEWS

Confusion adds to pain Fonterra

Murray Goulburn

Burra Foods

Marian Macdonald, Gippsland, Vic

Tim Humphris, Tongala, Vic

Luke Wallace, Poowong, Vic

GIPPSLAND FARMER Marian Macdonald, also known for her

TIM HUMPHRIS fears the latest price cut might be a bridge too far for some farmers.

Sadly, his northern Victorian farm is one of those in the firing line and Mr Humphris admits there’s not much incentive to continue with prices well below production costs.

Murray Goulburn’s $4.31 starting price took most experts and farmers by surprise.

Mr Humphris was one of those devastated to learn the price, more than 40 cents less than his already low expectations.

“We’ve done our budget on $4.75 and we’d make a loss on that, but we’ve gone in to damage control to try to reduce as much loss as possible,” he said.

“The announcement of the net price of $4.31 is devastating.

LUKE WALLACE said the $4.40-$4.60kg/MS opening price range was lower than expected “but I wasn’t overly surprised”.

Mr Wallace said the decision by Burra Foods not to impose a step-down late in the season was welcomed by farmers but could have influenced the lower 2017 financial year starting price.

“The fact they didn’t follow suit with Murray Goulburn and Fonterra was appreciated by all Burra suppliers because we don’t have to pay money back, but this (lower price) is probably their way to recoup a bit of the over-payment,” he said.

However, Mr Wallace hopes the pain will be short-lived.

“My gut feel is that it’s only going to be a first half of the season low,” he said. “I hope they are allowing themselves room to boost it up as they go through the year.”

Mr Wallace said he expected suppliers to stick with Burra Foods.

“Nobody’s going to jump ship or move,” he said.

“For starters there’s no room at any other companies to take more milk. At the end of the day it’s the finishing price that really counts; the problem is carrying losses early in the season with such a low milk price. History has shown US elections often result in the US economy bouncing so their dollar goes up a bit which may force ours down later in the year.”

Mr Wallace said he planned to continue farming efficiently and not panic sell. “We’re running our budget and figures and always looking to see where we can cut costs a bit,” he said.

“We’re still running the business tightly and we’re geared to manage it in a certain way; we’re fairly highly stocked with higher inputs than average but also higher outputs.”

Mr Wallace will milk about 210 cows, down about 10 on last season.

“I still think you need turnover and you have to keep your animals as healthy and fit and producing as well as they can for when things do turn around,” he said.

“There’s no demand; no one wants good milking cows at the moment so if you’re going to sell your herd you’ll make a greater loss.”

blog Milk Maid Marian, says she has been left reeling and confused by the clawback and subsequent 2016-17 opening price below production cost.

“I’ve asked for an income estimate from my Fonterra rep,” she said.

“The actual price will depend a great deal on what your milk supply curve looks like. It’s much more complicated than it appears on the surface and it’s the complication as much as the low price that’s causing consternation.”

Her worries are shared by many farmers.

“I had a lot of comments on my blog after Murray Goulburn’s initial price drop in April; not only are people upset about what happened, they don’t know the implications and are struggling to understand the complicated systems that have been put out there

by MG and Fonterra.”

Mrs Macdonald said the confusion was having flow-on impacts.

“Rural Finance requires us to put together a cashflow projection for this year to get concessional loans – how do you do that when it’s not clear from the processors what that cashflow is?”

She has set up a spreadsheet called Survival 2016-17 and is testing different scenarios to make ends meet – from producing more milk with more cows and more feed, or reducing the number of cows to cut costs.

“It’s going to be really difficult to work our way through it and we have to make some serious decisions and make them fast,” she said.

Mrs Macdonald said farmers were starting to feel the weight of the depressed prices on top of drought conditions.

“I haven’t come across a farmer who says they’ve seen anything like this ever before,” she said.

“What exacerbates it is that our district has had a severe drought. I’ve been feeling anxious and under an enormous amount of pressure since last September. That’s a long time to manage that degree of stress. At the moment there feels like there’s no light at the end of the tunnel. That’s the most depressing thing about it. It feels like we’re captives in a situation we didn’t create.”

However, Mrs Macdonald described community spirit as the silver lining to the cloud.

“I’m astonished at the reception,” she said. “People are telling me it’s hard to find branded milk but they are going to different supermarkets to try. That’s so heartening and shows people care about what $1litre milk does to farmers. It makes tears well up.”

Now she says farmers need politicians to do something so this doesn’t happen again.

“There’s nothing lucky about what we’re going through except that it’s happening in the midst of an election,” she said.

“If consumers hadn’t jumped on board to show their support, there’s no way we would have support packages from the government and ASIC and ACCC looking at how processors deal with us.

“That could be a game changer; that’s the hope I hold on to that farmers may not be left to carry the can for every stuff-up or every downgraded profit the processors face.”

“Our fixed costs are too much not to milk for the year.”

We tend to be about 30c kg/MS below the average so that puts us back at $4.

“I can’t see how we can make it work but we’re in a situation where we can’t afford not to do it.

“Our fixed costs are too much not to milk for the year so that’s not an option.”

The Humphris farm took up MG’s ‘Milk Supply Support Package’ repayment option, known to farmers as ‘clawbacks’, which means they will get 14 cents less this year than those who didn’t take the package.

Mr Humphris said he would work with his farm consultant and bank to review budgets.

He said he understood how MG didn’t want to get it wrong and have another price step-down, which had left farmers in a tough situation. He added that he hoped the predicted $4.80 season close could be reached earlier than expected.

“My big concern is it’s going to mean the end of the line for quite a number of suppliers, and it might be us included.”

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DAIRY NEWS AUSTRALIA JULY 2016

NEWS // 5

Reality of year ahead bites RICK BAYNE

FARMERS ARE hurting and, in some cases, struggling to see the light at the end of the tunnel as they try to come to grips with prices below the cost of production.

The low opening prices being offered for 2016-17 have compounded the late season ‘clawbacks’ by major processors Murray Goulburn and Fonterra.

Most are predicting a close of season price of around $4.80-$5.

Murray Goulburn suppliers are hurting the most following the shock announcement of a $4.31 opening, the lowest of the major processors (without clawback payments the price is $4.45).

As farmers try to find ways to survive, positives to emerge from the debacle have been a groundswell of community support, a boycott of $1litre milk and getting the dairy crisis on the national political agenda.

Industry leaders and farmers across the southern part of the country say they can’t go through this again and they hope the outcry will lead to lasting changes.

In the meantime there are fears the low prices will send some farmers out of business.

Australian Dairy Farmers acting president David Basham said he had

What they are paying (opening net weighted average, kg/MS southern) Australian Consolidated Milk

$5.30

Bega

$5

Fonterra

$4.75

Lion

$5.67 ($5.00 for one year variable contracts)

Murray Goulburn

$4.45 (less 14ckg/MS clawback = $4.31)

National Dairy Products

$5

Warrnambool Cheese and Butter

$4.80

already received calls from “quite distressed” farmers shortly after the MG announcement.

“There’s a lot of shock out there about what it means and how we can make it work for our business,” he said.

Mr Basham encouraged farmers to use support packages, including rural financial counsellors, concessional loans and

household support to get through the crisis.

“It’s important that farmers do as much as they can as early as they can to work out what’s best for their business,” he said.

Mr Basham blasted the late announcements and lack of clarity by the major processors.

“Farmers would have liked to have known ear-

lier. It’s very much about having choices and discussions about what’s out there; if you knew earlier you could be talking to other milk companies.

“Not only are the announcements too late for farmers to properly budget and plan around, but they are not easily understood. Add to the already complex system a loan repayment and the

External factors blamed PROCESSORS

MAINTAIN

FMP are largely the result of external influences.

Murray Goulburn defended its opening price, saying commodity prices remain the largest external influence on its financial performance.

“Global conditions have not improved, and the latest data suggests excess global inventories, including the impact of European intervention, may have surpassed the equivalent of 6 billion litres of milk.

“Key commodity prices have remained below US$3,000 per tonne for almost two years, much longer than historical price downturns,” Murray Goulburn interim chief executive officer David Mallinson said.

“In the face of these difficult market conditions, the forecast FY17 FMP reflects MG’s view that commodity prices will continue to trade around current levels for the remainder of the 2016 calendar year with only a modest recovery in price of around six percent across MG’s major commodities during the second half of FY17.

“We acknowledge FY17 will be a challenging year for our suppliers,” Mr Mallinson said.

“Should more positive conditions emerge, MG will be vigilant in ensuring any upside passes to our suppliers and investors.”

Fonterra chief operating officer of velocity and innovation, Judith Swales, said $4.75 was a responsible opening price that reflected current market conditions.

“Our forecast is based on the Australian dollar holding at around 74 cents to the US dollar and reflects the revenue we expect to earn on products produced using our manufacturing assets.

“Our farmgate milk price in Australia is also impacted by global dairy markets given our mix of domestic and export sales.

“While we are still seeing an imbalance between global milk supply and demand there are signs in key milk producing areas of a slowdown in production and increased imports into key markets such as China, Asia and Latin America.

“This supports our view of a recovery in global prices as we move through the season,” Mr Swales said.

forecast opening price is far from what it first appears.”

Mr Basham slammed the Murray Goulburn and Fonterra announcements as confusing, difficult to understand and lacking transparency, taking particular aim at MG’s repayment system.

While saying Fonterra’s announced opening price was better than expected, the detail around who receives what is not clear.

“We shouldn’t have to ask to get this information – it should be clear as day.”

United Dairyfarmers of Victoria president Adam Jenkins also called for greater clarity.

“We’ve been calling for transparency around the weighted average milk price system for the last

three years, because a significant portion of the industry receives substantially less than the weighted average price.

“The reality for some farmers is that they’ll be getting an on-farm opening price as low as $3.90.”

The UDV called on dairy processors to ensure all farmers receive income estimations and a follow up visit. Mr Jenkins, who has cut cow numbers on his farm and aims to feed more home-grown grass to battle through the crisis, encouraged farmers to make the most of Dairy Australia’s Taking Stock and Tactics for Tight Times programs, and social and information events.

“There’s a whole range of things we’re pursuing

to make sure this doesn’t happen again; the clawback nature of contracts needs to be removed; we’re trying to improve access to concessional loans and we’re encouraging people to take more interest in their own factories and go to supplier meetings and ask the hard questions.

“The reality is that dairy farmers are suffering across the world.

“There are indications slight relief might be coming through but there are going to be people here that decide they’ve had enough.

“We’re particularly concerned about the young ones who’ve just got into the industry; they’re our future.”

Mr Jenkins added that the ACCC and legal teams had been consulted for advice on removing “unethical clawback options” from supplier contracts.

“The overwhelming consensus from the dairy industry is that we need to get rid of clawback options so that this situation never happens again. I’m not aware of any other agricultural industry that applies a contractual clause to allow processors to grab back profits from suppliers if it’s been a bad year.”

Mr Jenkins said disappointment was the overwhelming feeling at UDV/ ADF meetings with farmers in the first week in July.

DAIRY NEWS AUSTRALIA JULY 2016

6 // NEWS

Determined to carry on FORMER DAIRY farmer Keith den Houting, from Kerang, visited several dairies in the Torrumbarry irrigation area in north-west Victoria last month to see what changes farmers might be putting in place for the season ahead. As the prices for next season were revealed, he found the mood changed significantly to anger and frustration. “But no one I talk to is yelling out they are quitting just yet,” Keith told Dairy News.

“The events of the last couple of months have left many dairy farmers devastated, extremely annoyed, perplexed, and concerned about the future.

For many, is not so much the drop in price, although this is of grave concern, but the compulsory ‘clawback’ payments from Murray Goulburn and Fonterra, for alleged overpayment in the 2015-16 season that is causing the greatest emotion,” he said.

Simon and Celine Hall, Kerang

Employee Damien Boyer in the dairy.

PICTURES: KEITH DEN HOUTING

Stephen and Margot Henty , from Cohuna STEPHEN HAS been farming the family

Third generation farmer Simon Hall.

SIMON AND Celine farm between

Kerang and Murrabit on the Lower Loddon on 151ha clay soils, with Simon being a third generation farmer on his mother’s family farm.

They have been here for 29 years; Simon is 56.

“Celine supports me strongly in our farm business and we are very optimistic in the future of dairying,” Simon said. “We have no plans in the short term not to carry on”.

They supply MG and the claw-

back repayment is expected to be about $45,000.

This season they produced 80,000kg/MS from 165 spring calving cows. The imported fodder was 175 tonne of commercial grain mix, and 40t hay.

Fifty megalitres of purchased temporary water supplemented their 453ML of water entitlement.

“My strongest strategy this season will be to utilise pastures better,” Simon said.

He intends to cut more hay and be particularly mindful of expenses.

He has a good financial background having been treasurer and now chairman of Kerang and District Health. Simon estimates the worth of their business to the local community to be 50% of their income.

His perception of the feelings within the local community is one of being “concerned” but people are hanging in.

farm for 43 years on beautiful Leitch’s creek soils. He and wife Margot are passionate and optimistic farmers.

They are also long-standing contributors to their community: Stephen as an important part of Murray Dairy and local UDV; Margot, with the local Neighbourhood House and Goulburn Murray Water board.

They milked 220 cows in a split calving herd of 40 autumn and 180 spring calving cows.

Their production was 140,000kg/MS. They supply Fonterra and have a repayment of $0.60c kg/MS, amounting to around $84,000.

Stephen said he and Margot will accept the Fonterra loan and will have to pay back 2ckg/MS deducted from their 2016-17 production regardless of whether they take the loan or not.

Like many farmers in Victoria, Stephen is angered by recent events.

“It’s the most frustrating time I have known in all my time in dairying,” Stephen said.

He says even in comparison to the 1970s - when Britain entered the common market, farmers were shooting cows, there was 50c for butterfat and street marches in Melbourne – the last couple of months have been “worse than that”. (Although Stephen

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ruefully admitted: “It may be because I am older now and have more grey hair”.)

The farm has imported 330 tonne of vetch and barley hay and 450t of wheat grain and bought temporary water for growing the usual amount of summer pasture. The farm also has a run off block 8km away.

Next year they will not join cows for autumn calving.

They feel they have more flexibility with empty cows in case they are required to cull numbers.

They own 75% of their required water and depending on the water availability and price, will deal with the pasture and bought-in hay issues.

Decisions will be made as more information becomes available. They will have to consider their permanent employee, Damien, plus a casual milker.

Their three grown up children have careers off farm.

With wages, fodder and grain, fertiliser, machinery servicing, household goods, and so on, they estimate the contribute about $350,000 to the local economy.

Stephen is 64 but says they will continue to dairy as long as it remains cost effective for them to do so.

But he also expressed his strong concern for the young farmers in the area.

“They will take this very hard.”

DAIRY NEWS AUSTRALIA JULY 2016

NEWS // 7 Roger and Elaine, and Kurt and Melanie Brereton, Gunblower Island ROGER AND Elaine and

Kurt and Melanie Brereton farm on Gunbower Island

just out of Gunbower.

It is a very picturesque property on the creek

and the fine sandy loams are suited to dairying and productive to growing

summer pasture.

The father and son team complement each

Roger and Kurt Brereton.

Miriam Crane and Lisa Elliott, Kerang MIRIAM CRANE and Lisa Elliott

operate their farm business on a leased property midway between Kerang and Koondrook on the Barr Creek.

It is a 125ha property with heavy black soils without permanent water, so the decision to purchase temporary water will be a big influence on their coming season.

They milk 200 cows with 50 autumn and 150 spring calving cows.

Their intensity of feeling for the industry and their animals is strongly evident.

“My passion has always been dairy cows from when I was 13 years old.

Rearing them as calves, seeing them grow into maturity and production is so very rewarding. Everything is about the cows,” Miriam said.

Miriam Crane and Lisa Elliott, with Lisa’s son Noah.

The partnership is working hard to stick to a cost of production of $4.35kg/MS for the next few years although, as Murray Goulburn suppliers they will have 2.8ckg/MS deducted from their next three years’ production.

They plan to get a contracted delivered hay price and feed 8kg of commercial grain mix per cow per day and will look to buy in 700ML of temporary water.

They plan to produce 120,000kg/ MS this season and are determined to go on even if they just cover costs.

Lisa also has some off farm income from outside work.

Despite the shock and hurt of the past few months, they remain enthusiastic about the future.

Their perception of their circle of

friends is one of positive and ongoing support for dairying.

But it’s going to be tough.

“When we consider the investment all dairy farmers have in their businesses, you have to be determined,” Keith said.

“Costs will be very scaled back and management of the same will have to be very prudent. And a lot will depend on the spring weather. If the hay and silage all done without the need to irrigate, that will be a big help.

“If the grain farmers get a good harvest that means grain prices will not be too high either.

“Regardless, the much talked about strong resilience of our farming community will be sorely tested.

“Let’s hope for a good spring.”

other with Roger, 78, still taking an active role. Kurt, however, is now the main operator.

The Murray Goulburn suppliers milk 270 Jerseys with 70 autumn and 200 spring calvers, from 100ha with a 60ha run off block.

The home block has 65ha summer pasture including some Lucerne paddocks and the balance annuals. Last season the farm imported 450t of locally produced pellets, 250t of wheaten hay and

150Ml of temporary water.

They produced 135,000kg/MS in 201516 and expect to have to repay approximately $70,000.

Kurt said their strategies for the season ahead will include a focus on better use of pastures, cutting more hay and culling 20 empty spring calving cows instead of hanging on to them and joining for 2017 autumn calving.

Kurt estimates their business provides some-

where near $450,000 local benefit.

When asked about the reaction within his circle of friends to the price decisions, he said some were “devastated and extremely annoyed” at the treatment by their milk processers.

“Because Melanie and I have our three ‘farm keen’ school children, we will take them into account in our future decision making of our farm business,” Kurt said.

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Farmer’s battle shows there’s light at the end of the tunnel

completely go broke,” the

a good time and I was in

dairy supply service in

GOT SOMETHING ON YOUR MIND? GOT SOMETHING on your mind about the latest issues affecting our dairy industry? Put your pen to paper or your fingers to your keyboard, and let our readers know what you think.

Don’t forget to put your name and address.

Note: Letters may be edited.

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LETTER TO THE EDITOR EDITOR@DAIRYNEWSAUSTRALIA.COM.AU

Brigid, wife Betty and son Jack.

don’t cry and don’t get Terang, before taking the course with mates was upset, because life isn’t sometimes all it took. farm back over in July like that.

“It’s not healthy to 2003.

“You’ve got to be on farm all the time, Jack says he is sharing acknowledge your you’ve got to get out and his story in the hope feelings. It’s as simple as about, because then you others will also speak up that.” know you are not alone.” or seek help.

Jack says he is now He says being open He, and other farmers able to look at mental about his struggles has from across Australia, helped other friends open illness as a gift that helps will feature in an online others and puts his own video as part the National up to him. daily concerns in Centre for Farmer “ A lot of the perspective.

Health’s new “When your Ripple Effect gifts you get in mental health has website and life are wrapped been at its lowest research project. in trouble and point and you come “I’ve had two you’ve got to back and enjoy major breakdowns decent health again, but I’ve learned unwrap that nothing could be as so much and I trouble from bad again in your wouldn’t have around them .” life. wanted my life to “I’d love to be any other way,” “If it hadn’t happened have money coming he says. out my ears, a new ute to me, then people “It’s funny looking and everything else but wouldn’t seek me out. back, what I went there is way more to life through, it was terrible at It helps me and it helps than having everything them.” different places. and your health is your There is still a long “But a lot of the wealth. way to go in breaking gifts you get in life are “If I’m healthy and my down the stigma of wrapped up in trouble wife Betty is healthy and and you’ve got to unwrap mental illness in the my children Brigid and that trouble from around community, especially Jack are healthy, I don’t regional areas. them.” want for much.”

“The main thing is for He says social farmers interaction, recreation and honest conversations and men especially, with friends have to get rid helped him manage his ❱❱ www.therippleeffect.com.au of thinking mental health, and he that they’ve ❱❱ www.beyondblue.com.au encourages others to do EMAIL got to be the same. ❱❱ For immediate support stoic strong A beer at the footy contact Lifeline ph. 13 11 14 types that or getting on the golf

For a special gift for a spec

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DAIRY NEWS AUSTRALIA JULY 2016

NEWS // 9

‘It’s been a year from hell’ MADY BRENNAN

TASMANIAN DAIRY

farmer Cynthia Collins is pleading for the government to make access to financial assistance easier, as she and husband Adrian struggle to survive through their worst season since they started dairying 25 years ago.

It began with unusually dry conditions in spring and summer and the bad luck came from there.

The 260ha farm at Irish Town in north-west Tasmania runs off gravity fed irrigation which reaches around half their farm and the dam was dry.

“It hit us like a tonne of bricks,” she said. “We weren’t expecting it at all.”

This is usually not drought country.

“We’ve never suffered like this before. You have your dry seasons, which is normal, but this is the most horrific thing I’ve ever had to witness my girls going through.

“There was no feed. It’s heart breaking to see.”

For years the couple have milked a herd of around 110 Ayshires and Jerseys, calving in autumn.

In 2014/15 they had a good year, producing about 1000 litres a day.

Buoyed by the season and a fixed contract price with Lion of $5.97kg/MS, they decided to try spilt calving in spring last year.

But the weather threw their plans off course.

“It was a disaster,” Mrs Collins said.

Since January they’ve lost 20 cows and sold another 20.

Now they are trying to

milk 62, and producing about 225 litres a day.

Their operating profit has halved in one year – again something that has never happened before.

The dry conditions also brought out a plague of redheaded cockchafers, damaging the pasture and top soil.

Large numbers of wallabies, also in search of feed, were competing for grass.

“We had that many factors working against us,” she said.

“It’s been the year from hell and it’s still going.”

When the milk dried up in January, their processor, Lion, said they could no longer come and collect as they were under the 400L (every second day) threshold.

They didn’t collect for about eight weeks, when production picked up again.

Late last month, the couple found out they are ineligible for drought assistance.

“It’s a real blow to us.

We are trying to survive.

Not having any income is probably going to put us under.”

She said they were forced to borrow money from family to pay the bills, and are looking to lease some of their land to neighbouring farms. They are selling what cows they can.

The generosity of locals has helped get them through, with some donated hay and grain.

Mrs Collins is able to bring in some extra income, cleaning a house every fortnight. But local work options are limited

and she’s keen to stay near the farm.

She’s also selling a ‘proud dairy farmer’ sticker she designed on Facebook after several inquiries from other farmers.

In the meantime, they are working with their Rural Finance counsellor

to work through the Farm Household Allowance paperwork.

Neither Cynthia nor Adrian wants to leave dairying.

“We’re little, we’re proud of what we are, doing what we do.”

Following inquiries from Dairy News, Depart-

ment of Human Services general manager Hank Jongen said DHS had contacted Mrs Collins about the progress of her claim “and can confirm she is receiving appropriate support while it is being assessed”.

Mr Jongen said policy and legislative require-

ments meant detailed information about a person’s income and assets were needed to process Farm Household Allowance claims.

“While some claims are comparatively simple and fast, others may take more time due to the complex structure of farm busi-

nesses,” he said.

He said additional assessment officers had been allocated to prioritise Farm Household Allowance applications from dairy farmers and urged anyone facing immediate financial hardship to call the Farmer Assistance hotline on 132 316.

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Dairy 2016 2016 DairyNews NewsAUSTRALIA aUsTraLia july february

10 18 // // news markets

Price slump not unique to dairy Move to organic processing was worth the hard yakka tHe world economy has veered into some difficult and dangerous waters, suggesting 2016 will be a long hard year of slow recovery in prices in global food commodity markets – With average including dairy. farmgate milk prices low this season, many farmers may be dreaming of a new way to operate.

Gordon Collie to an organic processor/seller who got into the game years ago about what it takes.

The perfect stormspoke has struck.

Major food and oilseed commodity prices are at low points in the cycle trips to the UK and Scotland in the PROCESSING andIt’s marketing with inventories high. not justyour food 1980s and 90s, Bill had seen the rise in own organicoilmilk a of course, andmight other sound major like metal organic farming in Europe. good idea – butare it’sat been a hard over commodities prices notslog seen for “Australia is usually about 10 years more a decade for industry veteran aboutthan a decade. behind in trends, so we reckoned this Bill On Smillie. the demand side, China, the fresh ageNDa Bill isgrowth the driving forceinbehind the largest economy the world, sTeve speNcer would be a sustainable business for us to get into,” he said. only niche organics has the brakes on. producer in the “We were already farming pretty Sydney-Canberra region, with Highland This year started little Organics. change in OPEC’s production stance, the supposed break-even costs of organically. We have no worms, ticks onfor thecollaboration effort it has taken andReflecting little hope given production of crude oil for most major or lice and already grew a lot of clovers Who: and used compost. to process fresh organic milkArabia and then new tensions between Saudi and exporters.

BillHistorically, Smillie “Doing the paperwork was sell it at a sustainable price, he reckons there has long been Iran.

Where: farming has beensuggests the easy apart of the a close correlation between crude reasonably involved, but we pressed The outlook sustained Moss Vale gaining organic certification equation.

Low oil prices have combined Hemisphere producers. prices and the prices for major ahead, petroleum glut, unless there is a strong oil What: at Moss September “It’sinbeen a lot–of workI’ll first getting Lowfarm oil prices canVale be a in friend to dairy with sanctions to weaken the Russian commodities, including dairy for the surge demand which come back food Organic milk and cheese 1999.” our milk processed and then achieving ingredients and feed grains. economy, and have made a bad financial producers. to later.

By 2004, convinced ourThis aim is of playing a 50% price premium to Cheap fuelBill canhad lower the costshis of situation far worse in Venezuela.

On the demand side it makes sense out like a “game and brother to join him in was engaged in the management regular said.

The effect in these dairy markets will milk production, reducing equipment – weak economic activity reduces father theory”milk,” case Bill study.

The OPEC cartel Tom farm a small in weaken their native “It proved challenge the to of and energyorganic costs asmilk wellon as their the cost of be uneven and hard to predict, as the demand forenterprise fuel and can some producing started a pricea massive war to dominate at Nowra. in the 1950s. get our brand established andthe generate dependence on oil, production costs, fertiliser. food markets. global energy market in third Scotland Highland Organics launched May government food buying activities and The family the other aquarter sustainable farmsignalling gate return.

Low crude oil prices alsoinmake While therelocated trends to lines move of 2014, their intent producing cheeseless under the eye the financial states of oil economies of the world and it established a dairy moreproduction than 10 years, are side biofuel production attractive, uncannily together, doesn’t mean oil 2004 to “After increase andwedrive veteran French cheese Andre vary significantly.

Vale sons Bill and now our products andlow-cost pricing at potentially ensuring moremaker feed supplies is Moss behind thewhere changes in dairy andEwan grain of out getting competing alternate Piorot the Country factory in accepted in the market andoil) it has But the developing world including which athelps supportValley margins, even prices.the business. technologies (such as shale and joined on the south By the mid-1990s, and younger reached theproduction stage whereusing we need some when dairy prices fall.western This hasoutskirts certainly MENA has a number of large dairy Dairy prices haveTom slumped low due Picton, renewable corn and Sydney. son Ewan had moved the coast at of more milk.” been the case for Northern Hemisphere buyers that are also oil importers whose to excessive supply fromtoabundant grass soybeans.

Country Valley and then South Coast economies should benefit from lower Bill withprices the original The growth growth,leaving low feed grain and the suppliers.

So much for of thequality planet!food Thisretailer is about Nowra, started buying milk fuel and energy costs. highland Harris Foodspainful has been big part of small However, low oil their pricesorganic have mixed loss of a coupleholding. of big buyers from the Dairy short-term pricea competition speciality bottled lines.

“Themarket. first rumblings about for the business success, Highland Weak oil prices meanwhile also effects on dairy markets. to knock out rivals, andwith ensure a finite global “It apparent that needed the oilseeds dairy industry started Organics now supplying In became the developed EUweand US ensure low prices for palm oil, used Grains and markets are energy resource remainsan theexpanding dominant deregulating own purpose-built factory, so we widely as a competitor and substitute this timedue and to by good 1998 itweather appeared network 24 stores a range of about economies, cheap fuel improves well-supplied in our choice forofindustry andplus consumers. a business to produce said. – our enemy El opened independents across household budgets, freeing specialty up a bit for dairy ingredients. most majorBill regions Prices have beenSydney, drivenCanberra to levels inevitable,” in Moss Vale inout.

2009,” Bill said.

“While going be bad news cheese and localsince region.2004, well below Nino So on balance – what does the more cash for dining tendsittowas be kind toto many Northern not the seen The coffee shop market is the next for the industry, it would also allow Growth We’veera already seen US food service future hold for oil prices and the global herd from about 80 down to just and target for the specialty producer of rich, people like us to process our own milk Milk economy? growbottling stronglyhas in developed 2015 soaking up more his so he could concentrate expanded at the MossThe Vale site to for the first time.” un-homogenised milk.

One important but odd indicatoron of cheese and milk. question is 40 milkers and marketing logistics. the point where newthat growth era for The family’s interest and lateral Ahead of the pack economic conditions is the Baltic Dry whether it can akeep growth rate manufacturing Growing milk demand Highland thinking in dairying began when father Having been on numerous working Index of shipping costs. was taken up surging inOrganics 2016. is about to begin. herd at Nowra, but Bill An agreement has been to by the The100-cow index has long been a forward Lower fuel costs can struck improve he wasofnow looking atofoptions to process milkprospects for the Sydney coastal said indicator the fortunes the world economic forand countries The company supplies a run more Moss Valesince and markets at the factory again economy, and iscows nowatthe lowest dependent onnew fuelcooperative imports, lowering number of independent grocers in Sydney, Canberra in a third farm supplier. in Berry. costs of manufacturing and to itstake inception in 1985. overall and locally.

The Moss reflects Vale farmthe has slowing limited “This willincluding make room for us and to This55ha largely transport, shipping an effective develop ourthe cheese business at of tradeforinexpansion and out with of China as it improving affordability of Moss dairy capacity area about 36ha. economy Buying Vale and bottle milk for the Canberra dairying transitions to aofconsumer-led imports. could also one. be a future option. market. from land a trade-driven On the other hand, there are risks more have the capacity produce also reflectsapproach the build-up of for“We dairy demand, as lowtooil prices LowItmaintenance run a low-maintenance easy-care more naturalthe yoghurt which has been “I capacity with the promise that China can harm economies in some cross-bred milkers at Moss popular in the market and concentrate (andofits hunger for two-way trade) major oil-producing regions which herd to largely take on – feta is the onesuch which wouldThe justcows keephave growing. arehard alsocheeses large dairy importers, as Vale. of themselves,” Billthe said. really us,” Bill said. index suggests demand side thoseworks in thefor Middle East, North Africa careThe elevation of sluggish 800m, the When known the family first Russia launched the oilanmarket will be for (together as MENA), and of With has cold winters with frost and into organic production, Bill reduced property some time.

Venezuela.

Bill Smillie converted to organic production in 1999.

Pictures: Gordon Collie.

This points to a bigger worry, that the world economy will be adversely affected by the slowing of China – more than the economists at the IMF and World Bank are currently suggesting.

Metal commodity prices are low largely because construction activity and industrial output in China have stalled.

Low metal commodity markets can harm several developed and developing economies, weakening investment activity and trickling down to affect household sentiment and discretionary spending.

Post-mining-boom Australia is a good example of this.

The US is another, with analysis suggesting that low oil prices are likely to hurt rather than help that economy if they stay lower longer, despite sometimes whichSUVs slowsand winter lower costssnow of running road growth. transport fleets.

Annual is a usually-reliable So dairyrainfall commodities are not alone 840 mm, the property beinghard onlyand about as bottom-dwellers – most soft 30 km from the range commodity prices areescarpment. at historic lows, grows well in the environment forClover many reasons – including some that and a production mainstay and builds are is interrelated. valued nitrogen.of this situation is Thesoil unwinding and cut for theRye same forclover thempastures as it is forare dairy. bothDairy silagedemand and haywill production with be stimulated turnips sown with chicory and plantain with more affordable food and for winter feeding. consumer goods.

“The not pushed too hard Low herd milk isprices will eventually with production dropping to will 12 or 13 discourage production, supply slow litres during thewill winter months,” Bill and stockpiles reduce to normal said. levels.

“We could usereality somefor more milk to The sobering dairy is that grow Highland thesethe effects may Organics take all ofbusiness.

2016 to I’ve evenand hadthen Chinese inquiry.” develop some.

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DAIRY NEWS AUSTRALIA JULY 2016

NEWS // 11

UDV ponders Coles milk deal VICTORIA’S PEAK

dairy lobby group hopes a new Coles farmer brand milk to be launched at the end of August will lure people away from $1litre milk.

The United Dairyfarmers of Victoria and Victorian Farmers Federation are currently in discussions with Coles to work out details of the new farmer brand.

Mr Jenkins said the UDV wanted to be involved in discussions about building a farmer brand because of the potential to send money back to farmers through an independent dairy industry fund.

“The question is, do we say no we’re not interested because we want the milk price lifted, knowing full well it’s the processors that do that part of the bargaining, or do we see what it might look like and how it might be put into programs to help small farmers?

“Do we turn our backs on that money?”

Mr Jenkins said details on the price of the milk and industry fund were yet to be finalised but that it was likely to be similar to the South Australian SADA Fresh model.

The model offers cash grants which farmers can apply for.

Coles will contribute $1 million to help establish the fund and says it will forego any profit on sales of the new brand.

Mr Jenkins said farmers remained concerned about discounted milk.

“We want more data around not moving consumers from branded milk down into the new brand; we want it to lift people from the $1 milk into the farmer brand,” Mr Jenkins said.

“That will be part of the discussions with retailers; maybe this gets us one step closer to engaging around that issue.”

Mr Jenkins said the

Dairy award to Max Roberts REFLECTING ON a distinguished career in the dairy industry, former chairman of Dairy Australia and Bega Valley farmer Max Roberts said there was always a golden rule.

“It’s easy to tell the good news but you must also be able to tell the bad news.”

He also joked that interstate flights often required for such roles were a good opportunity “to get the dirt out from under your fingernails”.

Mr Roberts was recognised with the Dairy Science Award for his service to the industry at the Dairy Research Max Roberts Symposium Dinner at Wagga Wagga RSL last month.

A strong advocate for dairy research and development throughout his career, he served in leadership roles for several industry organisations including heading up the dairy farmer lobby group in NSW and vice-president of the National Dairy Representative Organisation.

He has represented the Australian dairy industry both nationally and internationally and remains a director on the Bega board.

“I’d like to give thanks to the dairy industry for what has been a great life.” Max also paid tribute to his to his wife Sue who often held the fort on farm while he was away.

“Her support has been absolutely essential and again I think it’s recognition, this award, of Sue’s involvement in my life and my career.”

UDV remained philosophically against discounted milk.

“It’s not just the $1litre milk; it’s the contract that sits under that,” he said.

“It devalues the product and the work we do.”

The new brand will be processed by Murray Goulburn and sold in two

litre bottles.

A Coles spokesman said Coles Brand milk accounts for 3% of Australian dairy production.

“Coles does not set the prices paid to farmers at the farm gate – we pay the processor and they in turn pay the farmer a price based on overall sales rev-

enue from both exports and domestic sales.

“The recent fall in prices paid to farmers is a result of sharp falls in world milk prices which stems from a global oversupply of milk,” he said.

Coles has similar partnerships with dairy industry groups in South

Australia with SADA Fresh milk and in Western Australia with WA Farmers First milk.

Figures on the sales of WAFarmers milk show a strong consumer response when it was first launched in 2014, of around 11,000 litres a month of its full fat and low fat varieties,

but a decline over the next two years to around 8,000 litres.

According to recent Dairy Australia figures, private label milk has increased its market share by 4.7% over the last five years.

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DAIRY NEWS AUSTRALIA JULY 2016

12 // NEWS

Lessons from drought boost efficiency MADY BRENNAN

IT’S A farm that a seen two locust plagues, a mouse plague, a nine-year drought and regular flood, but thankfully it’s not doom and gloom at Glen and Andrea Jolliffe’s dairy near Euberta on the outskirts of Wagga Wagga.

“We keep it simple, we’re fairly self-sufficient, and we seem to be doing fine out of it,” Glen said.

The couple farm on 404ha. Access to cheap silage from Wagga’s cropping region helped keep costs down and cows fed in the years of dusty paddocks and little or no water allocation.

The couple who hosted the second day of the University of Sydney’s Dairy Research Symposium on their farm last month, told Dairy News they made sure they learned from their mistakes.

“The drought made us look at things differently and change our ways and make us more efficient,” Andrea said.

A desire for simplicity, self-sufficiency and reduced input costs continues to guide their decision making.

“We’re always thinking about ways to improve the farm,” Glen said.

“But it’s always got to be based on sound reason.

You don’t do something just because the neighbour does it; you do it because it really stacks up on your farm.”

The farms milks to a peak of 200 producing around 110,000kg/MS on an 18-a-side swingover with cup removers and an electronic feed system.

“The dairy is nothing extensive or over the top with technology,” he said.

“It’s pretty basic, but very functional.”

They split calve a Holstein-Friesian herd which is gradually introducing crossbreeds.

Glen says split calving boosted their bottom line

Glen and Andrea Jolliffe

Nothing on the farm is wasted, including cow waste, which is converted to compost and liquid fertiliser.

by about 10%.

They aim to produce most of their feed in the autumn and spring; a lack of rain and winter frosts makes it difficult in winter.

Introducing crossbreeds A couple of years ago, they introduced crossbreeds after Glen realised he could produce higher levels of fat and protein with about the same amount of feed.

“You can’t compare a Friesian to a Jersey or a crossbreed per say, because they are just different animals,” Glen said.

“But I could compare a 100 tonne of cows to a 100 tonne of cows.”

He said by 100 tonne weight, 160 Friesians equals about 190 cows.

The amount they eat stays the same but the fat/protein components are higher.

“It worked out for me that if I milked crossbreeds, I’d be about $50,000 a year (gross) better off.”

He’s introducing the cross-breed genetics slowly, rearing replacement stock from the autumn calves and buying any spring shortfall with the cross-breeds.

“We don’t keep any calves in the spring, because by the time I get them weaned here there’s no green feed, which would mean I would have to rear them through two summers and one winter

WHO:

Glen and Andrea Jolliffe WHERE:

Euberta WHAT:

Self-sufficiency focus

to get them to a joining age – very expensive.”

It gives him the flexibility to adjust to the season.

“I’m carrying half or less than the average replacement stock most farmers would have,” he said.

“If it’s shaping up to be a good season, I’ll buy some cross-breeds. But if it’s looking dry and water is low, I’ll keep the numbers slim.”

Glen said he uses the ADHIS breeding values on BPI and pedigree, but he always makes sure to mix up the genetics in the sire lines.

“I just select a group of bulls and look for a good balanced bull without any health issues.”

He doesn’t join a particular cow to a particular bull. He says fertility has improved significantly, saving on breeding costs.

“It would be nothing for me to finish joining and have 20-30% of the Holsteins empty but with the cross-breeds, that percentage is below 10,” he

said.

They are enjoying the cross-breeds in terms of temperament.

“They are quieter animals, smaller and easier to handle” Andrea said.

Recycled gold It was an eye on costs and a desire not to waste anything on farm that led Glen to stumble on a solution that he says saves him $40,000 $50,000 a year.

“When the drought hit and we started buying in these crops for silage one of the results was that we were pushing up all their waste and getting big piles of it,” he said.

“I was getting a water contractor to water it so it wasn’t dusty and with a bit of water in it you could smell it composting.”

With a bit more research he realised he could reuse the waste to compost his irrigated pastures.

He put it out at about 10 cubic metres per hect-

are and found the only thing he needed to add down the track was a bit of nitrogen.

“All it needed was one or two small applications of urea,” he said.

“I really cut back on my fertiliser use which was somewhere between $120,000 - $140,000 a year. We try to recycle everything, even to the point that we put bark mulch on the tracks there for cow comfort in the wet weather and in spring that will be pushed up and composted and put back out on the paddock.”

The couple also use effluent ponds to fertilise.

“By the time we feedlotted them and recycled all the waste from the feedpad on to the paddocks, we got the second bite of the cherry so to speak.”

Mixing pasture for soil health and longevity A shortage of water allocation meant they didn’t irrigate under the pivots this summer, but they sowed an Italian tetraploid ryegrass American titular and mixture of white and red clover in early autumn.

“The goal is we get it into the ground as early as we can in March and

irrigate it up, and keep the irrigator going to the end of the season, at least to Christmas time, even though the ryegrass has gone off by then the clovers are coming to the fore to keep the quality there.

“It allows us eight months of good grazing.”

When they do have enough water allocation he’ll also plant 16ha of forage sorghum, again with a white and red clover in summer.

Glen says he also grows fodder crops on the dryland areas of the farm, including field peas mixed with oats, vetch, vetch oats mixtures, subclover with ryegrass, rotating legumes and cereals.

With the change predicted to La Nina, he is experimenting with about 40ha of the legume Arrow leaf clover, which he says ticks a lot of boxes.

“Whenever there’s moisture that stuff will keep growing,” he said.

“We could potentially take a cut off for silage or something in late September, and you might take a cut of hay in November.

“It’s deep rooting and it will keep growing and because the paddocks won’t have gone bare, I’ll have standing feed there

for heifers and dry stock in the summer.

“And because it has kept growing and taken all the moisture out of the profile, to a degree, it’s saved me one or two summer sprays.”

No pressure to grow Glen says he is choosing to stay at 200 head but does have capacity to grow.

A big part of the decision will depend on whether any of his four sons decided to take up dairying full time, as they are all currently pursuing other careers.

“We’re quite happy the way things are going at the moment,” Glen said.

“It’s ticking over quite well and it’s easy to manage but there’s constant improvement.

“We can grow but you’re only making work for yourself and we don’t really want that.

“Plus I get frustrated with the line that farmers need to consolidate and grow. As we’ve seen lately, it can just mean buying more debt.”

It’s a risk management strategy that keeps them ready for whatever comes next. “We’ve had them all, except fire,” said Glen.

“We don’t want that.”

An Italian tetraploid ryegrass American titular and mixture of white and red clover was sowed in early autumn.

DAIRY NEWS AUSTRALIA JULY 2016

NEWS // 13

Fears of further flood damage in Tassie AN ASSESSMENT of last

month’s floods in Tasmania has found up to 1000 farms were affected and the damage bill could rise as high as $100 million.

The worst floods in decades hit Tasmania last month, with farms and around the state.

The Tasmanian Farmers and Graziers Association (TFGA) chief executive Peter Skillern said it would take more than 12 months for many farmers to rebuild.

“It’s pretty clear we will never know the exact number of livestock lost because many of them were washed away, but what we do know is the figure is definitely in the thousands,” he said.

“Some people have actually lost a number of generations of selective breeding so the genetics have just been washed away.

“You don’t replace that, you

can’t go out and buy that. That’s probably gone forever, frankly.”

Paul Lambert’s dairy farm, which spans both sides of the Mersey River at Mersylea in Tasmania’s north, was one of dozens in the region that were severely damaged.

About 100 kilometers of fencing was destroyed, the dairy was decimated and 10 cows were lost from his herd of 550-head.

“We could have done a whole lot worse, that’s for sure,” Mr Lambert said.

“I thought we’d lost 70 or 80 initially. Then we went around the neighbours’ places downstream gathering them up we realised that we actually gathered up 125 and we thought we’d only find about 60.

“It’s just a real miracle, honestly.”

The clean up is progressing on

Mr Lambert’s property with the help of more than 100 volunteers.

But Mr Skillern from the TFGA said not all farmers are as eager to get on with rebuilding due to fear of more flooding.

“The other problem we have got right now, as bizarre as it sounds given that only three months ago we were talking about drought, is that the soil profile is absolutely saturated,” he said.

“So now, even 20ml is creating mild flooding because the water has got nowhere to go.

“I am aware of some farmers who have not repaired their fences for that very reason. They anticipate that between now and the end of spring there could be further minor or even major flooding and they’re not about to rebuild fences they think could be knocked down again in a month’s time.” – Cameron Wilson

More than 100 volunteers arrived on Paul Lambert’s farm to help in the days immediately after the floodwaters subsided: “I’ve had people just ring up out of the blue and just offer to come and help.

It’s really made me quite proud of the community that I live in,” Mr Lambert said.

Farmers focused on the big picture DAN AND Cindy Knee from Toora North have just completed their time under the Focus Farm microscope and have been riding a roller coaster of events for the entire two years.

Focus Farms are funded by GippsDairy and Dairy Australia using dairy service levy funds and provide an experienced farm consultant as a facilitator as well as a support group made up of fellow farmers and local service providers.

A bumper first year was followed by the poor spring of 2015 and the subsequent milk price fall.

Add in the birth of their

daughter Lexi and another baby on the way and it’s been a big 24 months for the Knees.

Dan and Cindy took over the lease of the property from Dan’s parents, Bruce and Rae, at the start of the Focus Farm period.

Since then, they have purchased an additional 43 hectares to create an effective milking area of 187 hectares on which they currently milk 420 cows.

Focus Farm facilitator Matt Hall said the Focus Farm period had provided an invaluable insight into a farming operation in good and bad times.

“Their first year was a reasonable to good milk

Cindy, Dan and Lexi Knee catch up with Focus farm facilitator Matt Hall at the Toora North field day.

price and a good season to go with it and they made a significant cash surplus - everything went right,”

he said.

“The next year the milk price opened at $5.60, which was a very workable

price, which would have meant a cash surplus of around $130,000, but then we got one of the most dif-

ficult springs that I have ever seen, which brought a number of challenges around trying to get enough silage and planting additional crops, some of which failed because of the dry conditions.

“In the end it resulted in a negative cash flow of around $50,000.”

While the tough season and reduced milk price has tested many farmers, Matt said Dan and Cindy should be commended for keeping one eye on their long-term goal of owning the farm in 10 years, while being able to adjust their farm business plan to suit current conditions.

“The key insight that I

have had from this Focus Farm is that you can plan all you like, but things out of your control can ultimately determine the outcome,” he said.

“Dan and Cindy employed a lot of tactics that they had to, but I still don’t think they ever forgot the big picture.”

Dan and Cindy said that, despite the challenges that have confronted them, they felt more confident in running their business than they did two years ago.

“It’s certainly helped me, because I started fresh two years ago and I’ve learnt a lot about finances in that time,” Cindy said.

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DAIRY NEWS AUSTRALIA JULY 2016

14 // WORLD NEWS

Coke’s dairy move to ruffle feathers PAM TIPA

COLA-COLA ENTERING the market by buying a dairy company should worry Fonterra, says KPMG’s global head of agribusiness, Ian Proudfoot.

“They won’t be coming into the dairy market to be number eight or nine – they will want to be number one,” he told the NZ Veterinary Association conference in Hamilton last month. “Coke bought Fairlife, one of the most innovative liquid dairy companies around.”

KPMG has surveyed 80 global agribusiness companies on trends in food and agribusiness and Mr Proudfoot says change is coming very rapidly. We are on the cusp of a “fourth industrial revolution”.

One theme to be aware of is is changing competitors, he says.

“Our competitors in the past will not necessarily be our competitors in the future.

“The biggest change we will see are pharmaceutical companies.

Their interaction in the agricultural

sector has historically been relating to selling drugs to vets.

“Now they are thinking about how they become producers of food – or at least nutraceuticals – that have health benefits. That step is coming very quickly: they are innovating a lot, they are spending huge money on how they will bring their skills in pharmaceutical products and apply them to food.”

For example, New Zealand’s Lewis Road Creamery, “which created riots in Remuera over chocolate milk”, is telling a story, he told the vets.

“Their story tells how their food is being produced from their farm through to the consumer, and how the animal producing the milk is being looked after.”

Mr Proudfoot told the vets of their importance in that story because they are in that value chain. They help the farmer create the story, which creates the value in the product.

Things are changing very rapidly in food, he says. Biological, physical and digital technologies are creat-

ing “a whole heap of new solutions, different ways of doing things, different opportunities for your businesses and for the clients of your businesses.

“We are on the parapet of a financial/cultural revolution,” Mr Proudfoot says.

KPMG asked the world’s 80 largest agricultural countries to define the key opportunities and key challenges facing their business. They listed volatility, trade agreements (the ability to put more product into more markets), water, huge consumer changes and climate change.

NZ is not grasping the climate change issue nearly as much as other countries, he says. “The shift to low carbon economy is really gaining pace, as is food safety. That is probably most important for your industry.”

Importantly, KPMG notes that though NZ has succeeded as a nation -- growing magnificently and achieving high productivity -- “what we do today will not be enough to get us where we need to

be tomorrow; we need to innovate and change”.

“We will have new forms of farms. We will have people farming in different ways from the way they farmed historically.”

A farm may in fact be a 22-storey office building. Green Centre Farms, in Chicago, already farm this way. They grow beautiful salad vegetables, all organic: this could be a farm of the future, Mr Proudfoot says.

“People are doing horticulture and agriculture in the same building – different ways of integrating the business. We will find different ways using drones. It’s not going to be one drone; it’s going to have a swarm of friends.

“If you suddenly have 25 drones on a farm you can do a whole heap of stuff – you can lift, spread, muster and gain a huge amount of data.”

There will be different farming models. Philadelphia Cow Sheds is a great example of that, crowdsourcing an interest (share) in the animals.

Brexit impact ‘contained’ for Aus says Rabobank THE DIRECT trade impacts of Brexit on Australia’s agricultural sector are likely to be relatively contained, Rabobank says in its June Agribusiness Monthly report.

The global agribusiness banking specialist says with the United Kingdom and the EU-27 nowadays only contributing a relatively small share of Australian food and agricultural (F&A) exports – 1.4% and 4.6% respectively by value – the direct trade implications of the UK’s historic decision to leave the European Union would be limited for the agricultural sector as a whole.

However,

for dairy, the reports says, any weakening of the euro resulting from Brexit could also increase the competitiveness of European dairy products in already oversupplied global markets.

For the wine and sheepmeat sectors, the direct export exposure is more significant.

Rabobank senior analyst Marc Soccio says these sectors in particular would be exposed to any sustained negative impact Brexit had on the UK economy and house-

hold incomes, as well as price inflation due to adverse currency

moves.

“These sectors, in addition to wool and canola, are also the more significant Australian exports to the EU-27,” he says.

Mr Soccio said for Australia’s wine sector, in particular, the UK had long been its largest export market by volume, taking onethird of all wine

volume exported by Australia to the world.

For the beef sector, Mr Soccio says, from an Australian export perspective, the EU and UK markets are relatively small in volume terms, but represent a valuable market.

“Apart from the financial and currency impacts of the Brexit

decision, which have the ability to impact beef trade, the biggest question for the Australian beef industry will be around what might happen to the quota positions into the EU and UK,” he says.

The report says the implications of Brexit on both market access and UK food prices would need to be watched in the future.

“It remains to be seen how trade tariffs, duties and quotas may change between the UK and the EU-27 and how elimination from the Common Agriculture Policy (CAP) impacts UK food producers.

“Any imposition of trade barriers and reduction in producer subsidies would act to raise the cost of food sourced domestically and from the EU-27,” Mr Soccio says.

“A depressed British pound would also inflate food prices in the short term. In the longer term, high food prices may be alleviated through free trade agreements beyond the EU.”

Judith Swales

Fonterra makes changes near the top FONTERRA IS set to lose two more executives.

The co-op’s president Greater China and managing director Asia Middle East Africa, Johan Priem, will retire this month.

Jacqueline Chow, newly-appointed chief operating officer global consumer and foodservice, will leave in early 2017 to return to Australia.

The departures herald a smaller seven-member executive group, says chief executive Theo Spiering, focused on achieving the co-op’s ambition.

“This is the right step in our evolution. We’re keeping farmers at the heart of our co-op while focusing on our global customers and consumers.”

Coming to the fore are managing director Oceania Judith Swales and group director cooperative affairs Miles Hurrell.

Ms Swales, who led the streamlining of the co-op’s Australian business, is the new chief operating officer, velocity and innovation. Mr Hurrell is now chief operating officer, farm source.

Mr Spierings says Ms Chow, due to leave in early 2017, had been “instrumental in driving our transformation agenda [but] clear about her intention to retire from executive life”. Until then “our co-op stands to benefit greatly from her wealth of consumer and business experience”.

Ms Swales will manage the co-op’s transformation and disruption agenda, and all R&D and technology.

“With Judith heading up velocity and innovation we will get an end-to-end view of our efforts to drive efficiency… and a strategic view of game changing business models.”

Meanwhile Alex Turnbull will continue to head Fonterra’s Latin American business as part of the global consumer and foodservice business unit but will leave the executive team.

Kelvin Wickham, previously managing director of global ingredients, whose role and position remains unchanged, is now chief operating officer NZMP. Robert Spurway, previously managing director global operations, is now chief operating officer, global operations.

DAIRY NEWS AUSTRALIA JULY 2016

WORLD NEWS // 15

World’s largest robotic dairy farm to milk 4500 cows A 6500-HEAD dairy

farm in Chile will become the world’s largest robotic dairy after signing an agreement to install 64 DeLaval VMS milking robots.

The farm, owned by AgrÌcola Ancali and part of the Bethia Group, already has 16 DeLaval VMS installed and averages 45.2 litres for the 920 cows going through the robotic milking system.

Ancali AgrÌcola chief executive, Pedro Heller, said the expansion follows good results from first stage of the robotic dairy.

“We started using robots for 500 cows, and when we saw the economic benefits and we realised that it was possible to improve production per cow by 10% and reduce the stress of the cow so we decided to further explore,” he said.

“During the second stage we decided to modify the farm, changing our conventional milking system for an automatic

milking system. The plan is to have our best 4500 cows milked by DeLaval VMS and we believe we have a perfect set up should we decide to grow more in the future.”

The farm also includes a ventilation system, cow cooling, rubber flooring, swinging cow brushes, water troughs and illumination.

When the new installation is complete, 4,500 cows will be milked robotically while one rotary will remain for fresh and special needs cows. There are currently four rotaries in operation today.

The first DeLaval VMS installation took place with eight milking robots in October 2014.

By early 2017, 64 DeLaval VMSs will be installed making the farm the largest robotic milking farm in the world.

The El Fundo Risquillo farm is located 500km south of Santiago and is part of a larger operation including a beef farming

Staff at Fundo El Risquillo, a large farm in Chile are eagerly awaiting the installation of 64 DeLaval VMS milking robots, making it the world’s largest robotic milking farm.

operation and a stud farm.

(Source: Deleval)

L A I C E P S T R O REP

NZ rebound in four years THE MINISTRY for Primary Industries predicts the

dairy industry will take four more years before it equals the record $17.7 billion it earned in exports in 2014.

Since 2014 the value of dairy exports has declined, according to MPI’s ‘Situation and Outlook’ report; dairy exports this year will be $13.2b – down 6% on last year and 27% on 2014. But MPI is expecting a small increase in 2017, a 20% increase in 2018, and continuing smaller increases until 2020.

MPI says New Zealand’s dairy exports face strong economic headwinds during this season, notably because increased EU milk production will help keep global prices low. And it predicts a 1.6% drop in milk production in NZ in the 2015-16 season due to fewer cows. Milk production will be down 3.8% in the North Island but up 1.8% in the South Island.

Milk solids production fell last season but is expected to stabilise this season and rise over the next four years.

China remains a major influence on the NZ dairy trade; it takes 22% of exports. (Next highest is the US.) MPI predicts the Chinese market will start to pick up in the December quarter of this year.

Despite the predictions of better times ahead, all commentators are warning that ultimately the value of the NZ$ may be the key influence.

– Peter Burke

NEXT ISSUE: AUGUST HAY & SILAGE When it comes to Hay & Silage production, preparation and planning are as important as having the right gear.

To help farmers prepare and maximise the conversion of grass into milk, therefore into dollars, Dairy News is putting together a Hay & Silage Special Report. This will run in the August issue of Dairy News, distributed free to all dairy farmers.

BOOKING DEADLINE: August 3 AD MATERIAL DEADLINE: August 9 PUBLISHED: August 16

CONTACT: CHRIS DINGLE | T: 0417 735 001 E: chris@dairynewsaustralia.com.au

Dairy News AUSTRALIA july 2016

16 // around the regions

Western Victoria

New South Wales Little company named top milk at DIAA awards

Comedian Dave Hughes and Kevin Sheedy donned the Cobden colours for the day.

LITTLE Big Dairy Co. milk has been

named Champion White Milk at the Dairy Industry Association of Australia’s NSW Awards of Excellence held in Sydney recently.

The Dubbo-based single-sourced dairy won a string of gold medals for its milk and cream products, but this is the first year they received the champion award.

Janos Kaldy from the DIAA said it was fantastic to see a small, family-owned company win the top prize.

“It comes down to the quality of the milk coming out of the cow,” he said.

“Little Big Dairy are a good business and they know what they are doing.”

LBDC director Emma Elliot said she hoped the win raises further awareness about the importance of traceability and fair pricing in the dairy industry.

“The award is proof that we are producing a superior product,” she said.

“Paying a little bit more for your milk ensures the farmer is paid fairly, but also means you get a better product.

“Singe source production guarantees the integrity of the milk,” she said. “It’s so important to support traceable, familyowned milk brands.”

Little Big Dairy Co. will represent NSW at the 2017 Australian Grand Dairy Awards.

Dairy day at the footy brightens spirits THE AFL held an inaugural Dairy

Day at Cobden reserve on June 25 to showcase the value of local dairy farmers to the Victorian country football community – and provide some much needed time out from the current milk price woes.

Australian Football Hall of Famers Kevin Sheedy and John Rantall, former Australian test cricketer Merv Hughes, comedian Dave Hughes along with current AFL players supported

the event.

Families enjoyed a host of great activities including footy themed inflatables, face painting, give-aways and more.

At the final siren, the Koroit boys defeated the home team by 12 points (71 to 59).

“The natural alignment of footy and community makes this the perfect platform for us to reach out to farmers in their time of need,”

AFL Western District Region general manager Lachy Patterson said. “It’s a way of telling the members of the dairy community that they’re important and for them to know they’re not alone in this.”

Proceeds collected from donated entry fees are going to the National Centre for Farmer Health.

The event was supported by WorkSafe Victoria, Dairy Australia and AFL Western District.

Little Big Dairy Co. director Emma Elliot collecting the Champion Milk Award from VISY’s Scott Layton.

Picture: Australian Dairy Foods.

Tasmania Farmers chasing false savings with off-peak rates MORE than half of Tasmanian

farmers could be paying less in energy costs for irrigation, according to a leading national expert in irrigation management.

Dr Joseph Foley, irrigation and water management team leader at the National Centre for Engineering in Agriculture was in Tasmania last month sharing his knowledge on how farmers can save on energy costs for irrigation.

He presented at the Water for Profit half-day workshop in Campbell Town on Wednesday, June 22.

Dr Foley says between 50-70% of farmers are paying more than they should in energy costs to run pivots and this is often linked to misconceptions about saving money with off-peak electricity rates.

“I have seen on a regular basis people trying to chase the low-cost tariffs that are offered over the weekend,” Dr Foley said.

“They build and design a machine to do all the irrigation in a smaller number of hours at these off-peak times, which results in both a higher flow-rate and a higher head loss.

“This means the energy cost is much

higher on a per Megalitre applied basis.

“By chasing those off-peak hours over the week they are actually increasing their total energy bill.”

The preliminary results of a project by the Tasmanian Institute of Agriculture (TIA) also suggest that the range of costs farmers are paying for energy vary significantly.

Based on a tariff of 23c/kWh the cost of applying 1ML of irrigation water ranged from $26/ML to $181/ML. Simple modifications could lead to savings of more than $50/ML for some sites.

The Smarter Irrigation for Profit project, led by TIA, has established five pivot irrigated pasture sites on dairy farms in North and North-West Tasmania to collect data on power usage, water use, soil moisture and weather.

Dr Foley encouraged farmers to access information and resources when making decisions about system design.

“One thing I always say is that they need to talk to and learn from other growers across the state that have been using centre pivot systems for a long period of time. This is especially

Farmers are paying too much on energy costs to irrigate.

true with the new irrigation schemes in Tasmania, where we are seeing

irrigation in areas where there has been little to no long-term irrigation before.”

Visit www.utas.edu.au/tia/water-forprofit

DAIRY NEWS AUSTRALIA JULY 2016

AROUND THE REGIONS // 17

Gippsland Murray Dairy Sub-Tropical New pipeline to be considered Free business advice QDO AGM: Date for farmers for the diary THE VICTORIAN Government has

announced $50,000 for a feasibility study to look at the construction of a new pipeline for South Gippsland.

The study will examine long-term water supply options including the best ways to increase on-farm storages, including rainfall run-off modelling and climate change scenarios to check reliability; and a 23km pipeline from Foster extending Victoria’s water grid to include the Yanakie

area just north of Wilson’s Promontory.

“This is about investigating how best we provide greater water security to an important area of Victoria’s dairy industry,” Victorian water minister Lisa Neville said.

“It also shows the value of the Victorian water grid to provide security to regional communities like Gippsland. The feasibility study will look at practical solutions and report back to the community with options.”

SMALL BUSINESS Victoria in partnership with the

QUEENSLAND

Gannawarra and Campaspe councils, is offering free access to experienced business advisors in Rochester on July 14 from 7am. It follows other workshops held in Kerang and Cohuna last month. Participants will gain access to information and tools to help them assess the financial health of their business. All sessions are free and bookings are essential. Individual sessions are by appointment.

Visit www.business.vic.gov.au/dairysupport or call 13 22 15

Organisation will host its Annual General Meeting at Toogoolawah on August 16 from 10am – 2pm. The day will also feature an Industry Forum with presentations by QDO president Brian Tessmann, Subtropical Dairy executive officer Brad Granzin and Dairy Australia.

Visit www.dairypage.com.au for details.

DAIRYFARMERS’

South Australia Dairy Authority appoints new chief executive BRIAN OWENS has been appointed as the new chief executive of the Dairy Authority of South Australia.

Mr Owens most recently worked for Bradbury’s Cheese in the UK – sourcing dairy products for retail, domestic and export markets.

Prior to that he worked for Australian food giant Goodman Fielder, running its Asia-Pacific operations.

“Brian brings a wealth of experience across quality assurance, food safety, product development, supply chain and operations,” Dairy Authority chair Roseanne Healy said.

“His significant experience working with the supply chain to ensure industry standards are met and maintained is particularly relevant to the authority and we look forward to utilising these skills as he takes on his new role.”

The primary role of the authority is to oversee the safe production of dairy products in SA. Mr Owens said he saw the authority’s role as multi-faceted – to oversee the safe production of dairy products in South Australia; to promote innovation within the sector; to ensure the sector’s continued livelihood and contribution to the local economy; and to provide support to the consumers, farmers, producers and transporters who make up the supply chain.

Western Australia Cash support for dairy projects APPLICATIONS ARE now open for the WAFarmers Dairy Industry Fund.

The fund was formed in 2014 to support projects to a maximum of $20,000 which will provide a direct benefit to the Western Australian dairy industry.

The funds are derived from a royalty received from the sale of WAFarmersFirst Milk.

Project examples may include attending professional development conferences, investment in water, feed, soil management or energy efficiency projects plus many more.

Visit www.wafarmers.org.au/dairy for guidelines and forms or call WAFarmers dairy section president Phil Depiazzi on 0428 971 442 for information.

Applications close 5.00pm on Friday, August 19.

GET SOCIAL WITH DAIRYNEWS

T R O P E R L ECIA

SP

ISSUE: SEPTEMBER ABVs

Dairy farmers who want to breed for improved fertility and workability will be keen to investigate the April release of the Australian Breeding Values (ABVs).

The new fertility ABV is a better indicator of the fertility of a bull’s daughters because it draws upon the data for for several traits, including lactation length, mating and pregnancy data. This is something farmers have been asking for and Dairy News Australia will investigate how it can impact on-farm breeding programs. We’ll also examine the bulls with the highest Australian Profit Rankings and how they could influence your breeding program.

BOOKING DEADLINE: August 31 AD MATERIAL DEADLINE: September 6 | PUBLISHED: September 13 CONTACT: CHRIS DINGLE | T: 0417 735 001 E: chris@dairynewsaustralia.com.au

DairyNewsAustralia

DairyNewsOz

DAIRY NEWS AUSTRALIA JULY 2016

18 // OPINION RUMINATING

EDITORIAL

It’s now or never

MILKING IT...

Fries with your grasshopper

INSECTS will be a threat to the dairy industry’s product dominance, KPMG’s global head of agribusiness Ian Proudfoot says.

We will be eating insects in our daily diet within 10 years, he claims.

Insects are incredibly effective converters of biomass to protein - 48% efficient in converting energy, versus a dairy cow at about 3% efficiency.

Speaking at a veterinarians’ conference in New Zealand last month, Mr Proudfoot said various ways exist to synthesis dairy into insect protein.

Regardless of the technology, it might take a while to get consumers on board.

Cows set to float on water

A FLOATING dairy farm is being proposed for the Rotterdam harbour.

The Beladon project will connect consumers to cows, with a plan to house 40 cows on a 1,200 square metre floating platform, producing 1,000 litres of milk a day to be pasteurised and processed into yoghurt in a dairy on the floor below.

A machine will mop up dry cow dung as another robot tops up food stations.

The cows will wander in and out of stalls and the dairy, and can also potter over a ramp to real-life pasture on the land.

On the ground floor, as well as the processing of milk, water from the cows’ urine will be purified and used to grow red clover, alfalfa and grass under artificial light for fodder.

Carel De Vries, of dairy innovation body Courage, told The Guardian : “A third of people are really enthusiastic, a third have big eyes, and the other third think we are crazy. That’s how it goes with innovations.” The biggest hurdle at present is getting city folk to tolerate the smell…

You live where?!

FORGET THE little old lady who lived in a shoe; there’s a Japanese family who live in a milk carton.

Mirasaka is a quiet, nondescript country town surrounded by fields and consisting largely of low-rise houses, located a 90-minute car ride from Hiroshima station.

One landmark makes the town stand out, even appearing on national television to gasps of surprise and applause. It’s a milk-carton-shaped and colored building resembling the ‘Mainichi Gyunyu’ (‘Daily Milk’) brand container; the red-white-andblue building stands tall above nearby houses.

It’s a milk store and home for a family who also deliver the dairy product in the neighborhood. It’s been 30 years.

Advertising Brett Matthews brettm@dairynewsaustralia.com.au

Dairy News Australia is published by RNG Publishing Limited. All editorial copy and photographs are subject to copyright and may not be reproduced without prior written

Cows happier not to see you

COWS AND robots go together: throw in face recognition software (FRS) and it’s perfect for their happiness.

Why? Cows are happier when humans aren’t around: they see us as predators.

“No prey animal ever wants to see a predator,” says David Hunt, co-founder of Cainthus, a company digitising agricultural practices. “The less cows see the happier they are. A cow doesn’t know what a robot is, so isn’t scared of it.”

Digital farms can include robots, but Cainthus has also created FRS that identifies cows so that farmers can identify potential problems early. With 1.4 billion cows on the planet, this technology can help on many farms – the ‘digital dairy’ concept.

Cainthus’ FRS will be for sale this August or September, aimed at dairies with 2000 or more cows; it is not for small dairy famers. The 4K camera can identify any cow, solid colored or spotted, since even a solid black cow has variations in its coat.

0417.440.009

IF THE processing sector is serious about re-establishing trust with its farmer suppliers, it will join discussions with Australian Dairy Farmers with an open mind.

It’s long been a bug bear for Dairy News Australia that most processors do not give their suppliers long-term security to grow in the form of multi-year fixed term contracts.

There is much subsequent hand-wringing about why the national milk pool isn’t growing.

Australian prices are linked to the global market – but the current situation isn’t working. There is clearly a better method than releasing opening milk prices at five minutes to midnight.

And clawing money back from farmers when companies are in error is unconscionable.

Companies talk about re-establishing trust but it’s just lip service if they don’t listen to what farmers have to say. The best businesses, those with a strong culture, know to take all stakeholders along with them, from the very first step.

Which is why processors need to listen to farmers now.

The recent milk price cuts are forcing many farmers to consider their future in the industry, and as all processing business models rely on future milk growth, trust needs to be built.

At the moment, it’s a rare commodity – as rare as strong governance, it would seem.

ADF acting president, David Basham, says all options are on the table, including future trading for farmers.

If these options are immediately dismissed, then we’re back where we were. If some processors are bold enough to change their payment structure, they may find more farmers are willing to join them.

ADF is funded largely by processors. Some farmers point to this as being in their pocket. If they did not receive this funding, detractors cry, they could rally against them and point more clearly to their problems.

However, there’s a strong argument for being inside the tent, and in this case, ADF can use this relationship – and its position on the Australian Dairy Industry Council - to heavily promote these new options.

The current system is broken. There’s a strong argument that it was broken even before MG and Fonterra decided to claw back money from their suppliers.

All new ideas must be considered. If they’re not, then it’s Day 1 of Groundhog Day.

Editor Madeleine Brennan

0402.715.577

editor@dairynewsaustralia.com.au

Publisher Brian Hight

Production Dave Ferguson Becky Williams Sub Editor Pamela Tipa

Web Cameron Wilson Published by RNG Publishing Ltd

Printed by Newsprinters Pty Ltd

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 JULY 2016

OPINION // 19

Let’s be clear on what Dairy Australia can do KARRINJEET SINGH-MAHIL

whether you need to make different decisions about stocking rates, feeding regimes, staffing levels, farm infrastructure and every other aspect of your farming practice.

Dairy Australia’s farm management tool, Dairy Base, is a key part of the assessment as it benchmarks what you’re doing on your farm with what others are doing on their farms.

As farmers, we are running businesses.

Very few of us do what we do as a hobby. We have to make our businesses pay.

DAIRY AUSTRALIA is levy-payer funded service organisation for the dairy industry.

Why do I start with this definition?

Because I am tired of seeing the words representative body and Dairy Australia in the same document, let alone the same paragraph or same sentence.

Our industry representative bodies are Australian Dairyfarmers (ADF) and state bodies such as the United Dairyfarmers’of “There are always Victoria (UDV) or things that could be South Australian done better, could Dairyfarmers’ be done differently, Organisation (SADA). perhaps should not We hear much be done at all.” criticism about Dairy Australia And like any other from farmers and business, we have a range non-farmers who do of legal requirements we not understand these must meet, as well as a definitions. I was always range of social licence taught that in order to issues to keep in mind. criticise something, you If we choose to, we must first understand it. can take up any number Seems logical. of learning opportunities So what does Dairy provided for us by Australia do?

Dairy Australia to run Basically, Dairy our businesses more Australia funds research profitably. and dairy extension for It’s up to us. our industry.

One of the criticisms It does some other bits and pieces alongside these we hear about Dairy Australia is that it is key activities, including a puppet of Group some limited industry B members, or milk promotion. processors.

At the moment, a key Let’s clear something program Dairy Australia up straight away. rolling out through its There are only two regional development Group B members of Dairy programs, is a suite of Australia; ADF and the resources to assist in Australian Dairy Products making good on-farm Federation (ADPF). decisions, called Tactics Why must Dairy for Tight Times.

Australia consult with A key element of the Group B members when Tactics for Tight Times putting together strategic program is Taking Stock. and operational plans?

I speak from personal Not only is it a experience in saying requirement under the that Taking Stock is an statutory agreement with excellent opportunity for one-on-one assessment of government, it is also good sense. how things are going on What good is a strategic your farm. plan that does not take And it’s free. To every into consideration the dairy levy-payer. needs of farmers (ADF) What does Taking or the realities of the Stock do for you? marketplace (ADPF)?

It helps you work out

The contentious Group B member here is the ADPF. But tell me, if there is a looming issue in the marketplace around chemical residues, or milk quality, why would you exclude information from the organisations that are in the marketplace trying to supply the needs of their customers?

Were any of us aware of the increasing concern amongst international customers about NPE residues in our milk?

If we were aware, it was only as a result of our milk processors passing that information on to us.

As farmers we may well have continued producing our milk contaminated by NPEs until we suddenly realised the marketplace didn’t want our product.

What sort of disaster would that have been?

There are any number of issues that have faced our industry that we, as farmers, would never have seen coming.

Issues such as those around bobby calves, around antibiotic use, around somatic cell counts, induction etc.

It is simply good sense for Dairy Australia to consult with Group B members when putting together strategic and operational plans.

There is no basis for any conspiracy theory here.

Another criticism is that getting on to the Dairy Australia board is akin to an election in North Korea; only those selected by the board are able to be elected.

Recent events with poor corporate governance in our largest milk processor may have provided us with the best demonstration of why Dairy Australia’s rules make sense.

Rather than for dictatorial reasons, the purpose of these rules is to ensure a skills-based board is appointed, rather than one based on popularity.

All levy-payers are able to apply to sit on the Dairy Australia board.

The Legendairy campaign to promote the industry is just on of the many programs Dairy Australia run with the levies paid by farmers.

PICTURE: 10 FEET TALL.

Their applications are then reviewed by an expert panel to determine if they have the appropriate skill set.

It’s a bit like applying for a job.

Once the most appropriately qualified applicants are selected, the levy-payers are asked to approve, or not, those selected.

Should there be a levypayer who for whatever reason did not apply for the board and they want to still be considered, there is the option of gathering 100 signatures from levypayers and then putting themselves to the vote.

That’s a lot better than what anyone could expect when applying for any other job.

And let’s make this perfectly clear; sitting on the Dairy Australia board, or any board, is a job complete with serious legal responsibilities.

I used to be one of those who did not understand how our industry worked.

All the arguments put to me by those who were

critical of Dairy Australia, ADF, UDV and others, made sense.

It was only when I did my own research that the lack of sense in those criticisms became clear to me.

Does that mean I think everything is running wonderfully well? No, not necessarily.

There are always things

that could be done better, could be done differently, perhaps should not be done at all.

But now my criticisms are constructive ones, based on a far better understanding of who does what and why in the dairy industry.

I challenge those of you who are busy being critical and negative to find out

more about this wonderful industry and then to revisit your criticisms.

You might just find something that will benefit your own farming business on that journey.

• Karrinjeet Singh-Mahil farms in Crossley in southwest Victoria. She is a board member for Westvic Dairy and a former secretary of Farmer Power Australia Inc.

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DAIRY NEWS AUSTRALIA JULY 2016

20 // MARKETS

Forecasting is possible and it must be made clearer THE EVENTS of the

past few months have shown up a gaping hole in the information reaching Australian dairy farmers.

While all the focus was on the major correction in 2015/16 milk prices and the remedies by the two largest milk processors to address the impact of “overpayment” on their businesses, any signals about expected future prices got lost.

Projected 2016/17 milk prices seemed to come out largely as a shock in the past two weeks.

Frankly, for an industry with considerable worldliness and sophistication, that isn’t good enough.

Perhaps the problem – the shock – is a combination of signals not being given clearly, as well as those signals not being read for what they are.

Farmers make the longest and largest capital investments in the dairy value chain and deserve much better certainty than the information that is currently provided.

The usual defence for the lack of forecasting of milk prices is that there is not enough information out there or insufficient certainty to provide a credible view.

That once might have been a valid defence, but the world is far more transparent.

Information from

FRESH AGENDA STEVE SPENCER competitor and importing regions is more readily accessible, and there are a number of risk management tools now providing forward commodity price signals.

The other major impediment now in play is the impact of “forwardlooking statements” on unitholder expectations.

If Murray Goulburn were to make a next season price forecast, for example, that would amount to a dividend forecast and hence a price-sensitive piece of information to investors in the MG Unit Trust.

The new structure has delivered a more cautious attitude to giving milk suppliers a meaningful future price signal, and recent events will no doubt make the company more cautious.

Without a price number or range from the largest buyer out in the air, others could be reluctant to either commit to a signal let alone any firm guidance.

Distilling all the market

information and the chatter out there into a meaningful number for a farmer is not at all easy.

Domestic market notwithstanding, global dairy trade affects milk values in Australia due to our trade exposure, and the world market is increasingly complex with many moving parts.

Our business took on that challenge a couple of years ago and invested in a platform to provide our customers based here and overseas with a rolling two-year outlook for the global market.

We have turned that outlook into a forecast commodity milk value – the expected farmgate value of the returns from a relevant mix of major commodity products, based on export prices, manufacturing costs and company margins.

A commodity milk value isn’t the same as a farmgate milk price as Australian returns are typically higher than commodity values.

The wholesale prices achieved by dairy companies in the domestic market are more stable and smoother than prices achieved from exports.

In addition, Australian exports generally achieve a higher average price than product sold as bulk commodities as there is more tailored specification sought by customers.

In the last couple of years, the difference between southern Australian milk prices and the commodity value of milk has been worth close to 80c/kg milk solids.

The chart (top right) shows the history of that difference.

Interestingly it was higher in the past, suggesting that rather than adding value above commodities, net costs have been added.

We have used this global and local analysis to develop an estimate of 2016/17 full-season milk prices in a range of $4.80 to $5.20kg/MS for southern manufacturers, which we released in midMay. Companies have mostly announced full-year estimates in that range– although differences in product mix, market mix and performance can vary actual payments.

Where is the commodity milk value going?

In 2016/17 season, within the above number, we expect a value of just $4.10kg/MS. Right now, our workings suggest the latest spot prices would convert to a commodity milk value (CMV in the chart at right) of just $3.74kg/MS. The market is in recovery and has a way to go before averaging $4.10kg/MS for the year.

In the following year, our projected commodity values for exports are currently much higher as the market is expected to recover.

Our 2017/18 season outlook currently sees a commodity milk value of somewhere in the vicinity of $5.20-5.60kg/MS, that should yield a farmgate price of $5.80 to $6.30kg/ MS. The opportunity exists for the industry to systemise this process and its information, package it properly, track it for

DAIRY NEWS ON THE GO CHECK OUTTHE THE LATEST ONLINE AT CHECK OUT LATEST NEWSEDITION AND INFORMATION AT

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just look for the arrow!

changes in global variables and make it available to dairy farmers so that decisions can be informed by well-founded future expectations.

Forecasts have had a bad name of late.

This one is built on an add-up of the world and a constant reading of the forward indicators of supply and demand. Take it for what it is but it is better than nothing.

Here are some other thoughts on chatter that is out there at present.

There is no point saying

prices should be at least a certain number year in year out, or that customers should pay production costs plus a fairness margin.

Perishable food industries don’t work like that.

The complex market for dairy products sets the value of milk, and volatility is a feature that isn’t going away.

• Freshagenda is a consultancy based in Melbourne focused exclusively on the food industry.

Dairy NewS aUSTraLia june, 20

DAIRY NEWS AUSTRALIA JULY 2016

agribusiness MARKETS // 21 // 17

Koreandemand trade gainsremains a slow burn Export strong AUSTRALIAN DAIRY

exporters have expericents/litre in March (AUD 41c/L) to 2 With season 2011/12 enced a big changeonly in thea few incremental change in milk production (year-on-year) Euro cents/litre (AUD 36c/L) in Apr eeks frommarket ending, attention landscape, withis now three significant free as trade Profit margins are under pressure in th ocused on 2012/13 milk prices farmthethe pastcoming US, and in NZ Fonterra has announce rs consideragreements strategiesinfor two years. the final payout for the 2011/12 seaso ear. In some domestically-focused Negotiated with key has been cut from NZ$6.75-$6.85/kg M egions, renegotiated contracts incornorth Asian trading partGLOBALimpacT IMPACT gLobaL to NZ$6.45-$6.55/kg MS (AUD$4.9 orating lower prices reduced LAURIE WALKER ners, these and are the Korea- ‘tier JohN DropperT $5.04). ne’ accessAustralia are undermining farmer Free Trade Effectively, global dairy markets a onfidence Agreement and supply stability. For In regards to dairy, Aus(KAFTA, was fairly successful 2014), the rebalancing. Lower prices will bo in private label contracts and promany farmers in Japan-Austraexport-orientedtraliaShifts tariffrationalisation reductions, lia Economic Partnership slow production growth and stimula cessor have seen milk egions, a lower price outlook relative togaining achieving reductions Agreement (JAEPA, 2015), ■ North Asian FTAs still in early demand, and as this occurs we will ult he current season not only adds to the companies adjust their intake requireacross the same tariff lines and the China-Austramately see a price recovery. Key facto the changhallenges of doing business, but seems ments and pricing to meetdays as the US and EU. lia Free Trade Agreement ■ Korean imports likely to grow to watch on the global scene will be th ing demands of a highly pressured retail o contradict(ChAFTA, the positive medium term However, the US and 2015).

■ US and EU got a head start on rate at which milk production overse marketplace.

Lower contract prices and utlook of Asia-driven dairy superior According to ABS demandEU negotiated Aus in Korean FTA slows in response to lower prices, th a lack of alternative supply opportunirowth. terms, with a faster tariff trade date for 14/15, these CSQs than Australia schedule, and flows. 2012 milk production in the US those in south-east Asia and the Middle impact of the current financial worri three countries combined ties present challenges in a market with for Dairy Australia’s indicative outlookreduction exports ofDespite dairy fats. is up around 4% on 2011 for the year to East maintain consistently higher eco- on consumer confidence, the path Country Specific almost limited manufacturing capacity. or southernaccount farm for gate milk60% prices –larger Cheese domes- April (leap year adjusted), whilst early nomic growth rates that support China’s economic growth, and the valu (CSQs), which the underlying Australian merchanthese challenges, ublished inofthe recent Dairy 2012: Sit-Quotas The EU and US have secured quicker Australia has negotiallow a certain volume of dise exports and include tariff reductions Korea, putting of theinAustralian dollar. ation and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. HowAustralia at a disadvantage. PICTURE: product from a country to ated a reduction in tariffs Australia’s top two dairy Demand for exported dairy pro ever, the surge in supply has outpaced finished the March 2012 quota year up ita dairy consumptionplaced and aongrowing pening price range of $4.05-$4.40/kgenter CHARLES HAYNES, WIKIMEDIA. cheese, from the market without export markets (Japan and ucts remains a positive and will co population providing a36% degree MS and a full year average price rangetariffs. to 0%.of cer- 2.3% on the previous year. New Zealand demand growth in the market.

China). to grow thethe middle class This situation has seen the scales production is widely expected to finish tainty beyond the current adjustments. etween $4.50While and $4.90/kg MS. The The length of these Furthermore, when many of these bywith the time access for Australian dairy three largest dairy export- tinueIndeed, negotiations is that New emergingofmarkets such as Chin favour of buyers inworld dairyhave marthis season up 10% onhas lastlarger year - aishuge thetariffs seasons the 2008will vary eport considers the wider market tariff phase-outs from as following agreements are only in pic-startingIn full-benefits KAFTA are ers in the all large always tip to beinwelcomed, Zealand already according tocomthe type market of as 89%, thecrisis US and their early stages, it is factorshighfinancial passed on toinAustralian concluded superior Free with without KAFTA, quotas and will face lower changes diet and with increasin kets, with Auscommodity prices retreatinfluence given 95% of NZand milk and subsequent ure and summarises the many cheese, with 13 years two yearsprice head-start worthwhile dairy exporters, ouralso comTrade months.

Agreements with urbanisation tralian dairy’s positionover in recent tariffs than Australia, - and in conjunctio ing steadily Butter is exported.

Argentina is also enjoyrecovery, farmers in for t play; the key theme ofreviewing the current sit-EU’smodity cheddar, 18 years for fresh in tariff reductions means the outcomes achieved, petitors may have built an Korea, gains to AustraKorea would obviously be despite concluding negotiation being that of re-balancing in the export-oriented regions have seen solid ing solid production growth, but a sig- prices are down some 30% from their with global population growth. Local cheeses, and 20 years for that Australia will remain the progress of the agreelian exporters will likely be unassailable lead in this worse. ations after Australia. global supply growth (see chart) - with nificant supply gap in Brazil prevents 2011 peaks, whilst powder prices have the domestic market is supported by airy supply chain. other cheeses such as at a serious competiments, and any developmarket. limited.

However, given the Improved market much of this additional milk from leav- lost more than 20%. Farm gate prices growing population and stable pe in the North- etc.

In regions of Australia focused ontivehigher-cost gouda, camembert disadvantage competitors in the ments in these markets have subsequently been reduced in capita consumption. Whilst the dai ern market Hemisphere amongst those expand- ing South America. roducing drinking This compares in many since. milk, many farmersKorean most exporting regions. The average market is currently a challenging plac Despite wider economic uncering output as their margins increased. ace a re-balancing market in the form unfavourably to product categories. For In the first of a three theweather previous trade part series, we will look This season, favourable con- tainty, demand has remained resilient basic farm gate price for milk in France to be a seller, all signs indicate that ba f renegotiation of supply contractsexample: just 10as and powders the earliest agreement, importing countries like China and for example, dropped 12% from 32 Euro ance will ultimately return. have further agreements, enhanced of milk nd reducedataccess to ‘tier one’ supply.Milkditions 11 years for cheddar, and 15 Milk powder is one of with Korea (KAFTA). and 16 years for all other Australia’s more valuable A growing economy varieties, for the US and South Korea is a rapidly exports to Korea. Like the EU respectively.

US and EU, Australia was growing economy, with a A further complication high level of human devel- unsuccessful in reducing for Australian exporters is the applied tariff on milk opment. the issue of Geographical powders, which remain at Rising incomes and an 20% and 40% for SMP and Indicators (GI). increased appetite for The EU has inserted WMP, respectively.

Westernstyle food ASEAN-Australia-New have austraLian DairY, clauses relating to the recHowever, both the EU seen strong growth in ce and wine exporters to Zealand FTA (AANZFTA). ognition and protection of and the US were able to dairy imports.

“Protectionist sentiMalaysia are the biggest several varieties of cheese, negotiate CSQs, which In 2015, Korea’s dairy ment over agricultural inners in aimports free trade such as parmesan and feta. will allow a limited quantotalled some goods is rife and grow-to enter the greement (FTA) signed In Australia, these tity of product 260,000 tonnes, worth the globe, so tariffs. to provide portion pack etween theapproximately two coun- $725ing austraLian FooD names are commonly conwithout mil-acrossmarket sidered generic, signifyTheitEU will be lion USD. in this context is CSQ pleas(200-330ml) configuraies last month. company Freedom Foods can generate 30 - 60% ing a style or variety rather capped tonnes after However, alsoAustralia has1,512 managed tion for beverage prodThe deal, signed afterKorea ing Group Ltd is to build a more dry matter within than a place of origin.

11 years, whilst the US maintains an extensive to forge an agreement even years of negotianew milk processing plant ucts.

However, the EU has and heavily protected agri- quota was set at 5,000 3 weeks of application. with Malaysia that has The NSW location wil ons, allows a liberalised to cash in on growing sought to restrict the tonnes and is uncapped, cultural sector, particdealt withgrowing some sensiprovide access to the mo censing arrangement demand in Asia. use of these names in its at 3% each year. ularly in beef, pork and tive agricultural issues sustainable and economi or Australian liquid milk The plant, to be built in export markets, meandairy, making trade reform Butter/butteroil not effectively covered by source of milk. Pactum h xporters and allows southeast Australia, will be ing Australian producers Australia negotiated politically difficult. may have to market their a reduction of tariffs on KAFTA in AANZFTA,” says Fraser. strong links to the Austra ccess for higher valuewas signed the first Australian greencheese underMalaysian different,trade minister Mustapha Mohamed butter and butter oil from April 2014, with entry- “While Sealing the deal: under the etail products. fields expansion in UHT in lian dairy industry and wi counterpart less-recognised names. Craig Emerson after signing the deal. theagreement bound rate of 89% towith Australian into-force AANZFTA expand its arrangements It guarantees Aus-in December 10 years.

Other developments and annual tariff cuts 0% over 15 years, in equal most of Australian agriwith dairy farmers for alian wine 2015, exporters Freedom’s wholly New Zealand coninstalments. in January. but also through technical Despite the compleers through streamlining culture’s keyThe interests supply of milk. The new he best tariff treatment owned subsidiary Pactum cluded a free-trade agreeUS and EU have KAFTA was concluded or so called ‘behind the of rules-of-origin dec-in Marchtion of this agreement, had tariffsachieved boundaatsimilar zero, reducplant will increase scope Malaysia gives any coun-agreements Australia will run the ment with Korea after separate border’ restrictions.” much remains to be done laration processes and dairy and rice are two secfor Australian milk suppl y. It also allows open plant.

Some of its products 2015, with Entry-Intotion over 10 and 11 years were reached with United The FTA was signed on improved tors where incremental – value-added, sustainabl ccess arrangements from Forcemarketing in December 2015. for Australia’s farmers to will be sold in Australia. respectively.

States in 2012 (KORUS) New Zealand has suc- tap into the full potential Given a head-start inarrangements and the European Union May 22 in Kuala Lumpur for certain market access improveand export focused.

023 for Australian rice The company says tariff reductions, as ceeded in negotiating a of the Asian region and in 2011.

by Australia’s Trade and ments have been negoti-as wellcommodities.

Initially the plant will ith all tariffs eliminated given Asian consumlarger quota for SMP, as beyond. a faster reduction schedAustralia was left playCompetiveness MinisThe Malaysian market ated under the Malaysian produce 250ml and 1L y 2026. ers’ rising incomes and well as larger quotas and ule, Australian exports of ing catch-up, and sucter Craig Emerson and his He says the NFF will is worth about A$1 bilUHT packs from a proces The National Farmers’ FTA. improving diets, demand butter will be significantly faster reduction schedules cessful negotiations were Malaysian counterpart lion infor Australia agricul“This more tradeexpensive deal wasover the line capable of 100 milederation says thetotrade therewww.sumitomo-chem.com.au will grow for qualbutter and cheese, withnow throw its attention crucial maintain market Scan hereMustapa to go toMohamed. towards ensuring agricultural exports – including also particularly imporlion L. The processing an eal will improve interity dairy products from ProGibb® is a registered trademark of Valent a phase out of 10 and 15 next decade. access, particularly for www.progibb.com.au BioSciences Corporation, Libertyville, IL, USA. Emerson says Australia ture remains front and being its fourth-largest tant for sectors such packaging plant will emit ational market access low-cost production bases years respectively.

The EU and US have beef.

The effect of these also have secured much larger Tariff reductions gained centre in completed FTAs will be as well-positioned sugar export market and as dairy that been less carbon, use less wate or Australian agricultural such as Australia, whose

AT A GLANCE:

Want to fill Freedom the Winter Malaysia FTA benefits dairy feed gap?Foods plant targets Asia

oods.

“After seven years of egotiation, the NFF is

facing a competitive disadvantage in Malaysia compared with New Zea-

fifth-largest wheat export market.

With an annual economic

with South Korea, Japan, China and Indonesia as immediate priorities.

in the Malaysian market as Malaysia’s closest trading partners in ASEAN,

milk is well regarded.

The new plant will allow Pactum to meet

and be more energy-efficient than equivalent UHT facilities in Austra-

DAIRY NEWS AUSTRALIA JULY 2016

22 // MANAGEMENT

Dairy slow to benefit from soil moisture probes Web-based soil moisture monitoring can manage K-line irrigation, centre pivot and bike shift all with a tablet device.

MADELEINE BRENNAN

AFFORDABLE SOIL moisture tech-

nology can boost ryegrass production per Megalitre by 30% but is still not widely used in the dairy industry, according to an irrigation expert.

“If we have limited water, and it’s expensive, the biggest benefit for dairy farmers is to get spring irrigation ‘start up’ right,” senior officer with South East Local Land Services, Bega, David O’Donnell said.

Speaking at the Dairy Research Symposium in Wagga Wagga last month, Mr O’Donnell said research on the benefits of soil moisture to manage ryegrass irrigation has been known for 20 years but many dairy farmers were still not taking it up.

“After winter, once the soil starts drying down, if you miss that ideal irrigation start up by 10 days, you lose 670kg of dry matter (DM) per hectare,” Mr O’Donnell said.

“If you go 20 days past that critical start up point, it retards growth for the next 55 days. The whole physiology of the grass shuts down.”

Simple soil moisture sensors will identify the right time to irrigate, before the AT A GLANCE: grass is showing signs of stress.

“Trying to see the ■ Soil moisture technology can ideal point of that start be affordable up is virtually impos■ Critical to getting irrigation sible because ryegrass ‘start’ up right does not look stressed when it reaches that G-Dot irrigation refill point.” technology is He says getting a good outcome easy to use.

When it gets doesn’t have be difficult or expensive. down to two or “The technology is getting simpler. three dots it’s time to refill.

It’s not meant to be complicated,” he said.

“You can start at whatever (cost) level you like and you’ll get a really big Anyone conresult – whether you spend $300 or sidering investing in new irrigation $5000.”

Simple sensors in the ground can systems should be cost as little as $80 and measure how incorporating some soil wet the soil is and convert it to a soil moisture technology to reduce water and energy moisture tension reading.

Maintaining a soil moisture tension costs. reading of less than 50 centibars ensures “Dairy irrigators when that grass growth is not limited by mois- reinvesting in new irrigation rarely seem to ture stress.

In trial sites on the NSW south make decisions based coast, Mr O’Donnell has seen farmers upon optimal energy get great irrigation management infor- efficiency and water effimation from simple soil moisture mon- ciency at the outset. itors with a seven coloured dot “traffic “They normally look light” display that indicates the need to at the land, the topograirrigate when three or four dots on the phy, and everything else but they don’t think about how much display have blacked out .

The units are battery operated and is it going to cost to pump every ML through sprinklers, pivots and the travcosts about $300.

Mr O’Donnell says some monitoring elling guns.

“Irrigation managers often don’t ask systems can connect to a web interface with more detailed data, and these are the question ‘how evenly will those syswell suited to large farms with multiple tems apply water, when I put it in?’

“This is a fundamental question systems and managers.

This experiment shows the result of applying water at the right time using soil moisture sensors.

These simple lowcost sensors can be linked to the simple traffic light monitor or a more detailed webbased interface.

farmers in most other irrigation industries ask, or are advised upon, at the outset.”

Mr O’Donnell also stressed technology was only as good as the user.

“I’ve seen high end expensive tech-

nology installed and used to very little benefit, doing little more than confirming that the pastures were struggling under sub-optimal growing conditions even though the gear was in.”

Cows also make it more difficult.

“They chew cables and rub against poles and loggers. Installation of monitoring gear has to be tailored to meet dairy industry needs - well protected from animals with as little exposed cabling and electronics as possible.”

DAIRY NEWS AUSTRALIA JULY 2016

MANAGEMENT // 23

Budgeting tools there to be used AS THE industry grap-

ples with the new season’s milk price announcements and the start of a new year, Dairy Australia’s Tactics for Tight Times initiative has released a range of budgeting tools and resources.

Taking Stock is a ‘tried and true’ program that offers dairy farmers free access to one-on-one advice from experienced business and financial farm advisors.

“Taking Stock is a vital opportunity for dairy farmers to plan their business and set their budgets for the new financial year,” said Dairy Australia’s Neil Webster.

“All the indications are that milk prices will remain low this year. Budgeting is therefore critically important.

“Having an experienced advisor to guide you and to bounce ideas off will not only ensure your planning is realistic, it will also give you another trusted person to resolve the difficult questions that come up when budgets are being done.”

DairyBase has a cash report that will enable farmers to start working on their annual cash budget.

The Dairy Cash Management Planner is a shorter term planning tool that allows dairy farmers to stay on top of their income and expenses on a month-by-month basis.

Another major budgeting factor is feed which is the biggest input cost on farm.

With the feed budgeting tool dairy farmers can estimate the amount of

pasture and supplementary feed they will need to feed milking cows and other stock.

Dairy Australia has also produced a video and a fact sheet on feed budgeting.

While budgeting is the priority for dairy farmers at this time, the winter Tactics for Tight Times checklist guides dairy farmers to a range of resources like staffing, herd health and welfare and many more.

The winter Quarterly Update is available on the Tactics checklist for the first time.

It has three short videos led by Dairy Australia, managing director, Ian Halliday, covering the benefits of joining a discussion group; what’s happening at the Regional Development Programs (RDP); and more on the budgeting tool, DairyBase.

“The checklist is like a menu,” Neil said.

“We know every dairy farmer will have different priorities and needs. Even if they are only slightly different they may find one tool more useful than another.

“The menu approach gives everyone the opportunity to choose the resources they need.

“If you are in doubt or you have further questions, make a beeline for your RDP team, your field officer or farm advisor.

“They are all there to assist dairy farmers to achieve long term profitability and to work through the challenges they encounter.”

CHECK OUT THE LATEST NEWS AND INFORMATION AT www.dairynewsaustralia.com.au

(Source: Dairy Australia) • For Tactics for Tight Times go to: http://tftt. dairyaustralia.com.au • For general information go to; www.dairyaustralia.com.au

Having an experienced advisor to guide you and to bounce ideas off will give you another trusted person to resolve the difficult questions.

DAIRY NEWS AUSTRALIA JULY 2016

24 // ANIMAL HEALTH

Induction ban a force for positive change in NZ CAMERON WILSON

A NEW Zealand farmer says a ban on calving induction has been beneficial for the industry, despite adding to management costs for some farmers.

New Zealand began phasing out routine calving induction more than five years ago, with the practice now banned as a management tool.

According to the Federated Farmers of New Zealand, calving induction only applied to about 2% of the national herd prior to the ban, with the majority of farmers not using the management tool at all.

Despite the low rates, dairy farmer

and Waikato Federated Farmers president Chris Lewis said there was still initial opposition to the change.

“Before it happened there were quite a few farmers vocal about making sure it wasn’t banned because it was a good management tool, a few were very vocal,” he said.

“But actually since it has been banned, the same farmers I’ve heard nothing from. Yes, there probably has been a cost to the farmers who were heavily reliant on induction, but it’s not going to send anyone bankrupt.”

Mr Lewis, who rarely used calving induction on his 1100-head herd prior to the ban, said the change had actually improved his farm management.

“It’s forced myself individually and my staff to go back to the old style of farming in reporting heats and tail paints and doing the basics really well,” he said.

“Last year we had 9% empty on a 10 week mating period and I’m picking this year our empty rates might drop by 1% to 2%, it’s been a good lesson for me actually.

“Some years I’m picking in the future, when we get bad weather, the empty rates will go a bit higher, but in a good year they will go a bit lower.

“But, especially in a lower pay-out year, you have to make sure that strategy around feeding and calving time and maybe the wintering of the cows is

spot on.”

Mr Lewis said the other industry benefits include improved customer perception of farmers and a reduced threat of damaging animal welfare campaigns. “At the end of the day New Zealand farmers want to sell their product for the maximum dollars,” he said.

“The way we farm, if shoppers associate that with a good management style, they will hopefully pay more for our product over a South American or Russian product.”

Earlier this month, Dairy Australia hosted a webinar for farmers and veterinarians on lesson from New Zealand in phasing out calving induction with NZ vet David Hawkins.

In April 2015, following a series of meetings and consultation with farmers, vets and processors, the Australian Dairy Industry Council agreed to phase-out routine calving induction nationally.

It introduced a 2016 target that routine calving induction will be limited to a maximum of 15% of cows in a herd, unless an exemption is granted, either by implementing a herd fertility management plan or by obtaining dispensation for exceptional circumstances.

The timeframe for the full phase-out will be reviewed annually.

THE ADIC estimates that in 2015 less than 1.5% of the national herd was induced.

Rugs improving recovery in winter MADELIENE BRENNAN

LIKE MANY good ideas, it started with a glass

of wine.

“I like to think of the coats as a little ICU unit for the animals – that’s how we got the name,” says the maker of ICU Rugs, Marg Egan.

Based in Tynon in West Gippsland, Marg started making the calf rugs after first designing them for lambs, to prevent hypothermia and support recovery in cases of low birth weight, pneumonia and scours.

Growing up in dairy, she knows the importance of keeping calves warm.

Marg says it took her about four or five years to find the best fabric and get the design right to make sure the heat would be maintained.

The outer shell of the fabric is three-layer laminated, waterproof, windproof and breathable.

The inner layer is a double-sided fabric that keeps moisture away from the animal’s skin whilst circulating the animal’s body temperature.

“It works in extremely cold conditions and

even if the animal is not active, it will keep the body heat circulating,” Marg says.

“The inner fabric is also odour controlled, enabling you to place it on multiple animals without the birthmother being confused over the scent of her offspring.”

Heat pads, inserted into a specially designed pocket, give a continuous heat for up to 10-12 hours. “These heat pads are great because not only are they eco-friendly, they are odourless, light, self-adhesive and gradually warm up once put to use.”

Marg says the business has gone from strength to strength since it started about 18 months ago, using Facebook, a website and word of mouth.

Despite the growing demand, she still makes every rug herself. “Just in the front room of my house, all on my own.”

She’s had good uptake across the globe in Europe, Canada, Argentina and the testimonials have been very positive. “I’m very practical, and I’m not saying it’s the be all and end all, but the people I’ve seen have had some great results.” www.icusmallanimalrugs.com.au

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DAIRY NEWS AUSTRALIA JULY 2016

26 // ANIMAL HEALTH

Concentrate on your calf starter THE FIRST type of ‘hard

feed’ introduced to dairy calves is commonly called calf starter, concentrates or grain.

These terms seem to be used interchangeably.

There are many different variables that affect the consumption of calf starter, which

is essential for the development of the rumen.

The lining of the rumen is composed of finger-like projections called papillae.

These papillae increase the surface area of the rumen for absorption of nutrients.

The term ‘rumen

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development’ reflects the number and length of these papillae, along with the microbes present in the rumen to help fermentation.

Traditionally, it was thought that feeding roughage (fibre) to calves promoted their rumen development.

Research shows that it is actually calf starter that stimulates papillae growth by production of volatile fatty acids, such as butyrate.

High fibre diets result in production of acetate, which does not promote papillae development.

Therefore, to obtain

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high levels of butyrate, a rapidly fermentable, highquality calf starter must be fed.

Factors such as the milk feeding program, availability of water, texture and palatability of the calf starter, birth weight, genetics and gender of the calf can all affect starter consumption.

Alongside these factors, environmental considerations such as housing and management also influence consumption of starter.

The milk feeding program will affect starter intake which will depend on the frequency of feeding, volume fed and nature of the liquid feed.

High volume feeding can have a negative impact on starter consumption and calves should be gradually stepped-down from a high volume diet to allow starter consumption to increase.

The percentage of protein and fat in the milk diet will also affect starter intake and there should be consideration of any milk replacer used, alone or in conjunction with a fortified milk feeding plan, to allow starter consumption targets to be reached prior to weaning.

Ad lib fresh water should be available from birth as the development of rumen microbes requires an aqueous environment.

Provision of water also helps promote the consumption of dry feed.

There are certain physical factors of the calf starter which will affect the palatability and rate at which it is consumed.

Calf starters are usually classified as texturised (coarse or fine) or pelleted.

Research has shown that calves fed texturised starters begin rumination at an earlier age, develop longer rumen papillae and have improved growth in the post-weaning period

compared to calves fed pelleted starters.

However, many calves are successfully reared on pelleted starters provided the pellet is of good quality (not too hard and not too soft).

Intake will be adversely affected by any starter that separates into a finely ground mixture.

Regardless of the choice of starter, the product should be free from dust and mould and contain a minimum crude protein of 18%.

Palatability and intake can be improved by the addition of molasses to the formula and should typically be 5-8% of the mixture.

Many calf starters contain an additive such as monensin (Rumensin, Elanco) or lasalocid (Bovatec, Zoetis).

These additives can help feed conversion efficiency in the developing rumen and also act as a coccidiostat to help prevent coccidiosis.

It is recommended that the level of these additives are checked with the manufacturer as they will differ amongst products.

Housing and management can affect intake of calf starter with calves housed indoors consuming less than those reared outdoors.

However, this research showed that there was no difference in average daily gain between the indoor and outdoor reared calves, with indoor reared calves using their feed more efficiently.

If there is going to be a change in the brand of calf starter between the pre-weaning and postweaning periods, gradually introduce the postweaning diet two weeks prior to weaning.

This will allow calves to adapt to the new diet prior to the stress of weaning and will reduce the risk of disease and poor growth in the post-weaning period.

DAIRY NEWS AUSTRALIA JULY 2016

ANIMAL HEALTH // 27

Effective mastitis control at calving can be low cost ROD DYSON DAIRY FOCUS

WET WEATHER and mud has returned with a vengeance, and many farms will now be calving cows in these conditions.

The most common cause of mastitis around calving, both clinical cases and new subclinical infections, is Streptococcus uberis (Strep uberis).

This is an environmental organism passed in the faeces of cattle, so the major source of these mastitis infections on the farm is from contamination of teats with faeces and mud.

Whilst Strep uberis is also capable of spreading from cow to cow during milking, new infections around calving are far more likely to be from the environment.

The dry-off process has a huge impact on the risk of mastitis infections around calving, but there are still key actions that can make a major difference to the risk of mastitis.

Most of these actions cost very little cash – it is nearly all about managing the transition process.

Minimise faecal contamination The amount of faecal contamination in the calving area will be directly proportional to the number of animals in the area and how long they are in there.

Have you got clean areas for calving that have not been grazed for the last few weeks?

Can you regularly move the springers to a fresh clean area as the current area becomes too contaminated (more than two cow pats per square metre)?

Can you minimise the number of springers in the calving area to those very close to calving, so numbers are lower and they are there for less time?

What is your strategy to deal with cows that drip milk before calving?

After dry-off, cows

form a natural keratin teat plug to seal and protect the teat canal during the dry period. The use of an internal teat sealant at dry-off significantly adds to this protective seal.

However, as a cow approaches calving, if that seal is lost and the cow begins to drip milk, the teat canal is now high risk for the entry of bacteria.

Cows on the point of calving with large, tight udders that are dripping milk should usually be brought in and milked twice daily. Discuss with your vet whether anything can be done to ensure these cows calve as soon as possible.

How do you handle cows and especially heifers with udder oedema?

Cows and especially heifers with udder oedema (flag) usually have very hard swollen teats which are at a higher risk of infection, and they are also liable to not letdown properly due to the discomfort.

Discuss with your vet whether there are options for treatment to quickly reduce the flag in these animals, and to enhance milk let-down.

Be patient and ensure milk let-down has occurred before milking them, and be very careful not to overmilk these animals, especially if you milk them “on the bucket” as in this case, the vacuum they experience is likely to be higher than cows milked normally.

Milk freshly calved cows and heifers as soon as possible (preferably within 12 hours)

The sooner a freshly calved animal is in the dairy being milked, the sooner you have a chance to check her, and the sooner you fully milk her out, the greater the chance of flushing out any recently arrived bacteria.

The calf will never achieve this goal for you, and the sooner you have the calf brought in, the sooner you can administer colostrum to that calf if necessary.

We strongly recommend that all freshly calved cows and heifers have their teats washed and dried at least for the first milking.

This removes contamination from teats, causes effective milk let-down, gives better milking characteristics and finally, allows the post-milking teat spray and emollient to access teat skin properly and do its job. And it only costs a minute of your time.

Consider adding a little extra emollient to your teat spray during wet, muddy conditions to enhance teat skin condition.

Minimise the exposure of fresh cows to environmental bacteria after calving Recently calved cows are amongst the highest risk cows for new mastitis infections - especially in wet, muddy conditions.

These cows should be in a fresh, clean environment, yet we regularly see them sent to the little fresh cow paddock beside the dairy for their colostrum period. Whilst this area may have been clean at

TOP TIPS: ❱❱ Minimise faecal contamination ❱❱ Milk any calving cows that are dripping milk ❱❱ Milk freshly calved cows and heifers within 12 hours ❱❱ Minimise exposure of fresh cows to environmental bacteria after calving ❱❱ Detect clinical cases of mastitis early and ensure milk is suitable for the vat.

the start of calving, it rapidly becomes one of the most contaminated areas on the farm – don’t put your highest risk cows in the highest risk area.

Detect clinical cases early and ensure milk is suitable for the vat All freshly calved cows should be checked for mastitis at every milking in the colostrum period. The sooner you detect a clinical case, the sooner you can treat it, and the higher the chance of cure.

Ensure all cows and heifers have the full colostrum period of eight milkings or four days, and be especially observant of withholding periods – the last thing anybody needs in this current industry environment is a residue issue.

And finally, if you have found three or more clinical cases in the last 50 cows that have calved, it is time to do something, as something needs to change. Usually, the best place to start is to change the calving area to something cleaner.

L A I C E SP T R O P RE ISSUE: SEPTEMBER SPRING PASTURES The huge productivity gains available through pasture renewal have been proven by research and by farmer experience over recent years. Renovating pastures with new high yielding grass varieties means more milk in the vat and more money in the bank.

The September issue of Dairy News will feature a special report on the latest technology, equipment and techniques to use to get the most out of Pasture Improvement.

BOOKING DEADLINE: August 31 MATERIAL DEADLINE: September 6 | PUBLISHED: September 13 CONTACT: CHRIS DINGLE T: 0417 735 001 E: chris@dairynewsaustralia.com.au

DAIRY NEWS AUSTRALIA JULY 2016

28 // BREEDING MANAGEMENT

LIC propose to split into two NEW ZEALAND farmerco-op LIC has to win over a sceptical shareholder base before opening its automation business to outside investors.

The genetics/farm management company’s directors and management, during a recent roadshow with shareholders, argued a case for spinning off an agritech company that could attract outside investors.

However LIC’s proposal hasn’t gone down well with most shareholders, who worry about losing ownership and control of core businesses like herd records service Minda and herd testing.

At a roadshow meeting last month, the biggest concern was the board’s proposal to split what farmers regard as the co-op’s core business.

The proposal is that LIC would remain a 100% co-op owning artificial breeding, the FarmWise database and genetics. The agritech company, initially a wholly-owned subsidiary, would own automation, Minda, herd testing, GeneMark, animal health and the international business: it would invite suitable investors.

Cambridge farmer David Wallace won applause for telling the meeting that seperating AB from herd testing and Minda makes no sense.

“I plead with you not to do this.

But I’m very happy with the agritech company looking after automation and other things; that is not our core business,” Mr Wallace said.

Mr Wallace says herd improvement has three pillars: AB, herd testing and Minda.

“So you have herd improvement that relies on information on herd testing and that information comes via Minda. To seperate herd testing and Minda out of AB doesn’t make sense; that has been our strength.”

Wallace thanked LIC for adding billions of dollars in extra revenue to farmers and urged it to continue adding value onfarm.

He says if tensions arise between LIC’s co-op shareholders and the investment shareholders, then the co-op should buy back all investment shares over time.

LIC chairman Murray King told the meeting the biggest problem facing LIC was “tension” between the two classes of shareholders.

Co-op shareholders want LIC to add value onfarm; investment shareholders want higher dividends and the share price to rise. LIC has 10,640 shareholders, of whom only 67% own investment shares.

With the current dairy downturn, LIC is finding it difficult to raise capital from shareholders to further develop its automation products.

Mr King says capital raising

remains a key challenge. “I can’t see too many people here raising their hand to give LIC much needed money.

Everyone is busy managing their own show and keeping their own business above water. But we need to grow; if we don’t grow we will go backwards.”

Tatua chairman Steve Allen cautioned LIC’s board against pushing ahead with the proposal. The co-op must be careful about what products and services it offloads to the proposed agritech company.

“Be very careful about what you put in the [agritech company]; you will find that you create more tension by doing that.”

He urged the LIC board not to over-complicate things and to completely seperate the two businesses.

Mr King later told Dairy News (NZ) that the roadshow produced a wide range of views the board will now consider.

“We have more work to do; we are working with shareholders rather than behind closed doors.”

No shareholder vote will be required to split the company into two; LIC’s technology and animal husbandry business units will be offloaded to LIC Automation, already operating as a subsidiary.

However, 75% ‘yes’ votes will be needed to make constitutional changes and allow new shareholders into the agritech company.

Elmar Goldwyn Jessica 11, the Top BPI Cow at the 2016 Winter Fair, with Steve Hore (Elmar Holsteins), Daniel Abernethy (ADHIS) and Peter Williams (ADHIS).

Another Jessica takes out top BPI award at Winter Fair ELMAR GOLDWYN

Jessica 11 (EX-91) has taken out the top BPI award at the 2016 Victorian Winter Fair last month, continuing the dominance of the Jessica cow family bred by the Hore family at Leitchville, Victoria.

The Balanced Performance Index (BPI) Highest Female Award was presented by the Australian Dairy Improvement Scheme (ADHIS) in collaboration with Holstein Australia and the Victorian

Winter Fair committee.

Of all females animals entered in the Winter Fair, Jessica 11 had the top BPI calculated by ADHIS in its May 2016 evaluations.

With a BPI of 225, Jessica 11 is well above the breed average of 0; putting her in the top 2% of Australian herd recorded Holstein cows based on genetic merit for profit.

She also among the best in the country for health and type, with a HWI of 190 and TWI of 259.

Daniel Abernethy from ADHIS said Jessica 11 typified the sort of cow that many dairy farmers aspired to breed.

“Standout cows are

those with the combination of profitable milk production, strong conformation characteristics and the genes to produce the next generation of great cows. Jessica 11 has just that,” Mr Abernethy said.

The Hore family has taken the achievement a step further in developing a cow family of exceptional performers.

Jessica 11’s sister, Elmar Goldwyn Jessica 4 (EX-93-3E) took out the top BPI award at last year’s Winter Fair. In 2015 the Jessica cow family created history in claiming IDW’s top three awards, Grand, Reserve and Honourable Mention.

IN BRIEF ABS appoints Peter Daley in NSW and Queensland

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Dam: Farnear Freedom Adeen-ET, VG 85

PETER DALEY has joined ABS Australia as key account manager for NSW and Queensland. He will be responsible for genetics and breeding advice and helping dairy farmers plan their breeding goals.

Peter was raised on a dairy farm and has 25 years agribusiness experience. “I have a passion for breeding stud dairy cattle (Jersey, Holstein and Illawarra) and am excited to now be working directly in the bovine genetics industry,” Peter said.

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Dairy NewS AUSTRALIA july 2016

stockfeeds // 29

Using 1% advantages to gain 4% more fat Jeanette Severs

RUNNING a high production 700-cow Friesian milking herd on a dryland dairy farm at Fish Creek, in a drought, would be enough to keep most people busy.

Rowen Foote, in partnership with his parents, John and Maryan, wife, Sally, brother, Christopher, and his partner, Jess, wanted to achieve more.

The herd uses a 312ha dedicated grazing area; with an additional 312ha producing 1.4t/cow/annum ryegrass silage to meet 30% of fodder needs and running dry cows and heifers.

The business also buys in three tonnes of wheat and canola each year to meet about 70% of the herd’s nutrition needs; and cereal hay for the

springing heifers.

A feeder wagon mixes silage and bread at 2kg dry matter(DM)/cow/day, which is fed alongside free pasture grazing and the grain portion at milking time.

There is also a turnip forage crop, part of the 20% annual pasture renovation program – the land used for that crop is then sown to permanent ryegrass.

One of Rowan’s decisions was turning to Alltech for help managing the herd’s nutrition and health.

“We produce 9600 litres of milk per cow and 680kg/MS per cow,” he says.

“We’ve consistently been targeting increased production – seven years ago the cows produced 6000 litres.”

Signing a three-year contract with Parmalat

Yea-sacc - just 2g/cow/day in the mineralised grain portion makes a significant improvement to herd News Australia_What Cows Dream Of_Print.pdf health andDairy production figures.

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Feed audit changes boosts production and fat

gave the Foote family the security to grow, including acquiring more land.

“But we were getting problems from subacute acidosis,” Rowan says.

“We contacted Alltech, to get another set of eyes on working out the problem.

“They did a feed audit and we were amazed at the amount of undigested feed in the sieves.

“After the feed audit

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and the changes they recommended, especially adding yea-sacc into the mineral pellet mix, production increased 1.2 litres/cow, cell count dropped by 50,000 and butterfat increased 200g/ cow/day.

“A second feed audit showed better utilisation of fibre in the cows’ diet. We’d also noticed better animal health, by improving the cows’ gut health.

“It’s about finding those one per cent differences to improve your business and production outputs.”

The technical input Alltech Oceania’s Steve Ralston knows what it’s like to be a dairyfarmer – he left school to enter the industry as a dairy apprentice – and he brings that understanding to his role, advising about animal nutrition.

“The gut is the engine room of the cow and we want to do what we can to help that,” Steve says.

“When we do a feed audit, we go through the production and business figures and bring another set of eyes to the dairyfarm’s operation.

“Rowen’s problems stemmed from subacute acidosis, possibly toxins in the silage and problems with how the grain was being milled – you can see in this sample the grain is starchy.

Alltech Oceania’s Nigel Griffin and Steve Ralston, with Rowen Foote (centre) discussing how protein levels in feed aid in animal health and milk production.

resulting in higher “One of the common cell counts, can show issues we find with grain significant improvement is how it is being milled in production output and or crushed makes a difference to how the cow herd health,” Steve says.

“Everything we do is digests and utilises it. about helping the cow “After going through ferment its feed through the three sieves, ideally nurturing a healthy, less than 10% of the feed working rumen. is retained in the broad “Rowen was able to see sieve, less than 20% in the middle sieve and more than 70% of the vegetation mass is retained in the bottom, finest, sieve.”

The yeasacc was added to feed at a rate of 2g/ cow/day.

“Cows under a nutritional Starchy grain poorly milled, aids burden, eg, subacute acidosis in the cow’s stomach, significantly lowering production. acidosis,

production increase by 1.2 litres/cow and protein lift by 48g fat, using the yeasacc.

“All the research suggests yea-sacc results in a 6% better feed conversation rate, which means 6% more milk from the herd.”

– Photos: Jeanette Severs

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Dairy News AUSTRALIA july 2016

30 // stockfeeds

Lion delivers beer bonus Rick Bayne

AUSTRALIA’S beer

drinkers are giving Queensland farmers, Duncan, Ross and Morris McInnes a new source of feed that’s led to a welcome unseasonal production boost.

Since April, Lion Dairy and Drinks has been offering brewers’ grain to its dairy farmer suppliers in south east Queensland and South Australia, from factories in Brisbane and West End. The McInnes Bros farm, situated 70km south-west of Brisbane, has taken up the offer to access the brewers’ grain from Lion’s XXXX factory and they are already seeing improvements.

“Normally at this time of the year, until we put four to five kilos of rye-

Who:

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Brewers grain production boost

grass into them, we don’t have the higher production curve like we have now,” Ross McInnes said.

“It has certainly helped us and really improved the quality and the digestibility of the diet.”

Lion says brewers’ grain can help to increase milk output, enhance fat composition, and improve farm productivity.

Jason McInnes pictured with the grain.

The company, the only major processor with significant non-dairy production, says if the initiative proves popular it will consider expanding the grain offer to other sites and potentially allow farmers to access other stockfeed such as citrus rinds, soy hulls and okra, by-products of its juice and wine businesses.

The McInnes Bros 340ha farm, bolstered by 140 leased hectares, has a milking herd of 500 at the moment and will peak about 560-580 mainly Friesian cows.

“We’re paid on components, but we still like to see the litres going out the gate,” Ross said.

Brewers’ grain, or spent grain as it is sometimes known, is the solid residue left after the removal of yeast from grain in the brewing process.

“What you end up with is a product that is about 6% fat and 24-25% highly digestible crude protein,” Ross said.

“It’s not much different to putting rolled oats on a plate and adding boiling water; it ends up like porridge.”

The cows are milking particularly well.

“The average across all cows is probably over 28 litres and 4.2 fat and 3.3 protein,” he said. “At this time of year we’re very happy to get those litres out and maintain the components.”

The brewers’ grain is supplied at a discount rate of about $66 a tonne delivered.

The shed houses two bays of brewers grain, canola meal, whole cottonseed and some lucerne hay.

“There is some nutri“That’s about 22% dry matter so it’s around $300 tional advice that says that is the maximum inclua tonne dry matter,” Ross sion rate,” he said, “but said. “It’s such a good solI do know some farmers uble and digestible prowho feed a much higher tein source; it seems to fit in extremely well with the amount and it doesn’t seem to have detrimental rest of the ration. effects.”

“It’s barley grain with The farm receives the starch taken out, some about 80-90 tonnes a fortwould say it acts more night in three loads and like forage than a concentrate.”

“What you end up The farm also feeds wheat and corn with is a product grains, and has soya that is about 6% fat bean and canola meal and 24-25% highly available, molasses, lucerne hay, lucerne digestible crude silage, corn silage, protein.” whole cotton seeds. has installed two concrete The property has reabunkers for the grain as sonably good access to part of a new commodwater most years and has ity shed which also has about 65ha of annual ryegrass available for grazing. space for protein meal and lucerne hay.

The brewers’ grain is “It has a short shelf limited to about 3kg maxilife and does degrade usumum inclusion rate in the ally in seven to 10 days but diet.

because of the size of our herd we locked in three loads a fortnight,” Ross said.

“On most occasions we’re getting rid of each load every four or five days and because we use two bunkers we swap and clean one bunker before we start on the next one.”

The grain is bringing many positives to the farm’s production and Ross finds it hard to identify any negatives.

“I don’t know that you’d call it a downside, but it’s a very constant product and in the peak of the spring we’ll still be getting it, even though they’ll be up to their ears in ryegrass.

We’ll have to still have to include it in their diets.”

Supplies dip slightly around May as beer consumption is less over

winter and will peak around October-November as production gears up for Christmas.

The farm is calving 100 a month since February and has been assisted by the grain input that improves on the traditional forage base through this period.

Ross said providing brewers’ grain at a base price was benefitting farmers and Lion.

“This is a real win-win situation because Lion farmers have the potential to send more milk into the Lion factory in Brisbane so the whole company benefits,” he said.

“This arrangement is recognition that while the detrimental effects of $1litre milk remain in the marketplace the processors are looking at options to improve the market for farmers.”

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DAIRY NEWS AUSTRALIA JULY 2016

STOCKFEEDS // 31

Feeding for a healthy herd RODNEY BAKKER

hails from a dairy background in the Netherlands and laid down his roots in the Australian dairy industry five years ago.

In June, he and share farmers Jared Boshier and Ella Credlin took over a farm in the Timboon area of south-west Victoria.

They currently milk 250 Friesians a month.

“We lead feed 3kg per head, a day, for three weeks prior to the point of calving.

“Additionally we allow

access to lower quality pasture hay or low protein cereal hay to get some fibre in the rumen and allow a good transition.”

Rodney’s springer herd have been one of a half dozen herds around Victoria being tested on a new mineral pellet in Reid Stockfeeds, Springer 16 ration.

“The cows have adapted well to the feed,” Rodney (pictured) says.

“When at the trough they’re fighting for position to access and eat it.

“Importantly, they eat all of it and we have experienced minimal ill health effects.”

Rodney says when they took over the farm there were some metabolic disorders present including milk fever and after births.

“We immediately changed the springer diet from ryegrass hay to an oaten cereal hay, as well as switching to Reid Stockfeeds as our grain provider.

“These changes have made a great difference to

the health of our cows.”

Reid Stockfeeds recently revised their Springer 16 specifications of the lead feed, mineral pellet.

Trace minerals have been adjusted, and the lead feed pellet will contain higher levels of vitamins A, D and E, as well as organic selenium, and revised proportions of chloride and sulphur ions.

The addition of Hy-D and elevated magnesium will aid in hypocalcaemia management and

activation of the parathyroid hormone.

Springer 16 will maintain a DCAD of -1000 meq, but has been reformulated to contain 17% canola meal, 33% wheat, 33% barley and 17% pelletised anionic salts.

The product is equipped to manage

metabolic issues around calving.

The new lead feed formula is being monitored for how many days each springer consumes it for, what day they return to the herd, any metabolic problems, should they occur, and what production is produced when returned

to the shed.

“The benefits of lead feeding are obvious and immediately felt by what’s returned in the vat.

“We deal with Reid Stockfeeds because of the reliability and consistency in their feed, backed up by good advice” says Rodney. www.reidstockfeeds. com.au

Feedpad system critical to efficient conversion TERRY ALLEN, WASTE NOT STOCKFEEDS

EFFICIENT CONVERSION of feed is the most important factor for maximising production and profit in your dairy herd.

This becomes even more important when milk prices are low.

The key to getting the most out of your cows is getting the balance right between energy and fibre and utilising your pastures to provide the major part of the diet.

A lot of time and money is spent in improving pastures, to provide the most nutrients to the cows, which in turn provide more solids, which provide a better return.

There is a down side to having a high energy diet in that the cows need fibre to produce cud and balance the bacteria in the gut.

Acidosis is a big problem that many farmers face as it not only affects milk production, but it also leads to lameness, and reduced conception rates.

However, it also has a large influence on feed conversion efficiency.

How can we get cows to eat just the right amount of fibre and energy to optimise production?

The majority of lower quality feeds, such as straw, grass hay, and oaten hay, if consumed in large quantities, affect the milk production.

Also if fed out in the paddock wastage becomes intolerable - it becomes a bed, rather than a buffer.

Some cows get more than they require and other cows do not get enough, even if the average intake is correct.

Putting straw in a few feeders down the lane is another attempt at getting the cows to balance their diet.

But many times the cows are drawn straight past the straw.

This does not necessarily mean that they don’t need fibre; it’s what is happening in her head that’s driving her, not what’s happening in her belly.

The Waste Not ‘Fair Go’ dairy feed pad system allows farmers to control what each of the cows are getting, and all of the cows get about the same amount, rather than some cows “pigging out” whilst others “miss out”.

The size of the pad is matched to the size of the dairy, and is used as a timing device.

Depending on the quality of feed put into the feeder we know what each cow will eat in a given time, usually 25 minutes minimum.

In many cases, farmers have found that balancing the pasture through the feedpad has improved the cow’s diet and minimised acidosis, which in turn has increased conception rates, and milk solids.

One farmer who set up the system

near Cobden in Victoria reported that using the feedpad in this way had increased his milk solids by 25% over previous year’s efforts Above all, efficiency of feed conversion – of pasture, grain, and hay/silage is improved.

Most Waste-Not ‘Fair Go’ dairy feed pads are built on gravel, at least for the first few years and later may be concreted.

Gravel is good because it is a non-slippery surface, and gives an opportunity to prove the system, and confirm the siting of the pad.

Batching the cows through the pad during milking is the most efficient way, but because the feeder holds a quantity of feed (usually fill each three days with whole rolls or big squares) it is important not to make the feeder too large.

The cows are on the pad for approx.

30 minutes morning and evening which means that effluent is not a great prob-

lem, as dung (perhaps 1/3 of a crap per cow per day) is in a narrow strip up each side of the pad, and can be scraped up with a small blade or squeegee every few weeks.

It may appear to be simpler to put all of the cows on the pad for half an hour, but within a few weeks the uneaten and spoiled feed will accumulate and have to be removed, which is neither efficient nor cost saving.

Even if there is success in getting each cow in front of her feed position at the same time (how do we achieve that?) there is still no control over who gets what or how much each individual cow eats?

The feed pad provides much more control over intakes than traditional “bully-based” methods.

The improvements found in feed conversion efficiency are basic to keeping costs of production well down. www.wastenot.com.au

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DAIRY NEWS AUSTRALIA JULY 2016

32 // MACHINERY & PRODUCTS

It’s coming soon and this Fendt monster looks the goods IT’S NEWS that’s sure to make more than one Australian dairy farmer re-check their budgets for the tough season ahead to see if just a little more equipment finance can be snuck in.

And no doubt contractors will be taking another look at that list of customers they can expect reliable payment from, to try and anticipate a bit more work.

Friends, the Fendt 1000 series Vario is coming to Australia. In ‘early 2017’, that is.

Now I’ve waxed on about Fendt in this column before, and while I don’t envisage ever being in a position to own one that’s younger than me, I have driven a few, and they really are pretty good.

I haven’t driven one of the new 1000 series machines, but those who have gotten up close and personal have handed out a swag of awards already.

Fendt themselves are calling it a German ‘Meisterwerk’ (masterpiece).

This is a new machine designed from the ground up; it’s not just a beefed up 900 series.

The spec sheet takes things to a whole new level – every feature you’d ever

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They’ve even put a camera at the bottom of the Fendt badge on the front, for use when hitching implements on the front linkage. Kind of says it all.

Sure, you don’t need a tractor in the 380 to 500 horsepower range to do many of the things your average dairy farmer is likely to get up to, but what’s life without dreams?

And if you are looking for an excuse to scratch around behind the couch and put together a deposit, just remember our own agriculture minister recently suggested diversification as a means to escape the current dairy bind.

And unlike most 500hp tractors, there are diversification options aplenty with these monsters.

They’re billed as the

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These beasts are primarily intended for heavy draft work, but the compact design and light foot-

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Don’t get the wrong idea though.

You’re probably not going to be pottering around with a round bale feeder on the back of one of these things.

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Like one of the two prototypes, which apart from undergoing its share of some 25,000 hours of testing, featured in a series of ‘sizzling snaps’ to show off ‘this brawny beast’ for the Farmers Weekly magazine in the UK. Rightio…

It’s 3.6 metres high, for goodness sake.

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MACHINERY & PRODUCTS // 33

Manually removing smelly bale wraps a thing of the past MARK DANIEL

ANYONE WHO’S fed

round bales to cattle on a cold, wet winter morning would revel in a device that removes the need to manually remove smelly bale wrap plastic and netting.

No surprise to see manufacturers developing grabs to do this, usually with a slicer to split the bale in two.

The Goweil RBS bale slicer from Webbline handles bales 0.9-1.6m in diameter.

It comprises a lower frame with five tines (42mm dia. x 1000mm long) which lift the bale.

An upper frame has the bale slicing attachment, powered by twin HD double acting rams, which

splits the bale in half, allowing easier feeding by stock, and better incorporation and lower power consumption in case the bales are used in feed trailers or mixer wagons.

Beneath the slicing frame, a secondary system uses a bank of eight hooks which sink into the bale across the full width, to firmly hold the film and net wrap in place while the bale is handled.

The debris can then be placed on a rubbish pile without the operator having to leave the tractor seat. This improves operator safety by removing the need for climbing up and down from the tractor as with a manual removal system – tricky in bad weather.

Feedback from the McGuire family, who milk

600 cows on 250ha near Ashburton, New Zealand, is that “the Goweil RBS saves us around 45 min-

utes every day when feeding out, and sees us loading our feedout wagon with six bales in around 15

The Gowell bale slicer does the job for you.

minutes, all without leaving the tractor seat”.

always works, even handling badly misshapen bales.

They also mention that the design of the film and net capture system means the unit

www.webbline.com.au

Robot takes over teat spraying POST-MILKING TEAT spray is known to improve udder health by helping reduce infection by the highly resistant staphylococcus.

But manual teat spraying takes time, is not always accurate and can waste the product being applied.

Hence the appeal of DeLaval’s teat spray robot (TSR), an automatic system that is accurate and which correctly and consistently sprays teats after milking, with the added bonus of helping reduce labour costs.

This standalone unit fits to the outside of TSR: teat rotary platforms sprayer robot. and has a robotic arm that holds cameras to locate and spray the passing cows’ teats. Capacity is about 400 cows per hour.

Its high accuracy optimises efficacy by placing the product on the cows’ teats but not on their udders, legs or tails.

In use, the TSR software identifies the individual cow and its teat positioning using a time of flight (TOF) camera to ensure correct application; a safety system prevents accidents to operators and cows.

Said to be nearly silent in operation, the unit operates the same way each time, ensuring an atmosphere of calm and predictability on which cows thrive; the only sensation they feel is the spraying of their teats. www.delaval.com.au

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DAIRY NEWS AUSTRALIA JULY 2016

34 // MACHINERY & PRODUCTS

Hustler 360 takes feed in its stride MARK DANIEL

A NEW three point linkage bale feeder that looks to upturn traditional design thinking has been launched by feeding specialist Hustler.

The SL360X has a rated capacity of 1.25 tonnes, and is said to be 8% heavier and 30% stronger than previous models.

Described as multi-purpose, and capable of feeding pit, loose and

Feeding into troughs.

maize silage, plus fodder beet and cut grass, the machine has an extra fence that gives it a capacity of 1 cu.m.

Improvements to the auto connect and release system, using a patented Snaplock coupler, ensure accurate connect and disconnect every time; this has a double-latching set-up. Its bale spears have forged points for easier penetration -- averting pushing bales along the ground, risking soil contamination, a risk with blunt tines.

A new floor design gives an

increase in height around the feed platform, and encloses the machine driveshafts to prevent crop build-up and reduce maintenance downtime.

A headstock redesign enables easy adaptation to fit high capacity frontloaders or telehandlers, opening up the possibility of feeding over barriers or into mixer/feeder wagons.

And an optional side-shift system allows up to 180mm of offset to the left or right, helping ensure accurate placement of feed in all situations. www.hustlerequipment.com.au

MF 2600 series... nimble, no nonsense workhouse.

Fergies find favour far and wide FARMERS WORLDWIDE have always loved Massey Ferguson tractors, particularly the venerable 135 and 165 models.

Produced in 100s of 1000s in the mid-1960s, using largely mechanical components, and easy to service and get parts for, they are a popular used buy; you find them in places as diverse as Sri Lanka, Kenya and Somalia.

The current 2600 series is building a similar reputation as a nimble, no-nonsense workhorse with power of 38-74hp.

Using 3- or 4-cylinder Simpson engines of 2500 or 3600cc, they are kept simple: a constant mesh gearbox offers 8 forward and two reverse speeds, there is a choice of 2 or 4WD front axles and they go 30km/h at

maximum speed.

An independent PTO system offers 540rpm output speed, and the three point linkage lifts up to 2050kg on the larger 2635 model.

The hydraulic system delivers up to 62L/min to the rear remotes via dual opencentre pumps, and has up to two valves for powering external implements.

In New Zealand, The Tractor Centre’s Pukekohe sales manager Grant Hudson, commented “these little pocket rockets are the MF 135 and 165 of the current era.

They are popular with growers in our area for their light weight and perky engines; and simple layout makes training staff a breeze”. www.masseyferguson.com.au

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