Dairy News Australia September 2016

Murray Goulburn to review clawbacks PAGE 9

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New Holland’s autonomous tractor PAGE 32

LIVES IN LIMBO Young dreams shattered PAGE 8-9

TAKING CONTROL Gippsland’s Steve Ronalds and Sallie Jones hope consumers will back their new Jersey milk in the name of a fair go for farmers. PAGE 10

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

NEWS // 3

New pitch to city folk for support THEY DRINK our milk, now it’s time for our city

Climate change profit hit. PG.12

cousins to put their money where their mouth is.

A new Facebook page called Melbourne Loves Dairy is encouraging city people to do their bit to help struggling dairy farmers.

The idea came from the organisers of northern Victorian and Gippsland relief drives.

Northern and north-eastern Victorian farmer relief facilitator Jenni Clark said most of the donations for existing campaigns came from regional areas.

“There are lots of people in Melbourne asking how can we help and we thought if we started another Facebook page we could create awareness in Melbourne and get donations rolling in from there.” https://www.facebook.com/groups/950249705097245/

MG to review clawbacks Consumers back farmers. PG.15

JEANETTE SEVERS & MADELEINE BRENNAN

MURRAY

Bannister Downs’ remarkable growth.

PG.21

NEWS ������������������������������������������������������ 3-12 MARKETS ��������������������������������������������14-17 OPINION ����������������������������������������������18-19 MANAGEMENT ������������������������������ 24-25 ANIMAL HEALTH ���������������������������26-27 ABV’s ��������������������������������������������������� 28-29 SPRING PASTURES ��������������������30-31 MACHINERY & PRODUCTS �������������������������������������� 32-34

GOULBURN has yielded to pressure on its loan scheme, telling it suppliers it will review its Milk Supply Support Package (MSSP) in a letter issued on September 5.

It comes following months of intense scrutiny of the dairy farmer co-op and a backlash at the MSSP, also known as clawbacks.

“Since its introduction it has become very clear that the MSSP is not considered by suppliers to have addressed their most significant concerns and is potentially proving counterproductive from the perspective of their continued loyalty,” the letter from chairman Phil Tracy said.

“This was not its intent and the board is very mindful of continuing to do what it can to help address supplier concerns.”

Murray Goulburn external affairs manager Jon Richards confirmed the

MSSP was being reviewed because of a number of factors “not least because the number of farmers that have left Murray Goulburn has impacted on the MSSP.” He said the co-op had lost suppliers amounting to 240 million litres in the past couple of months, which leaves fewer farmers with the debt.

“But there are also other factors the increased global dairy price and in Australia, the great season, rainfall and lower fodder prices are all positive signs for the company and the market,” Mr Richards said.

Murray Goulburn conducted a series of supplier meetings last week, reporting its results for the 2015/16 financial year as well as a 2016/17 outlook.

Despite the turmoil, it maintained a Net Profit After Tax of $39.8 million. It reduced its net debt from $635 million (FY15) to $480 million (FY16).

MG supplier Chris Nixon from Bete Bolong, East Gippsland, said the co-op should look at the improving global price to pay down debt,

Chris Nixon

rather than try to get it back from suppliers.

“A lot of farmers are incredulous we are expected to pick up their mistakes,”

Mr Nixon said.

“Farmers know that moving costs and improving cost of production are an ongoing issue for businesses.

“The MG board and executive have made poor decision after poor decision and they need to work very hard to recoup faith from suppliers,” he said.

“MG now has to show they are doing all they can to improve the milk price paid to farmers - removing the MSSP and demonstrating world’s best practice.”

He said any decision to end the clawbacks was complicated by the various terms of repayment.

“They’ve muddied the waters

by encouraging farmers to pay back the MSSP early, while other farmers have taken the longer option of repayment.”

Hawkesdale dairy farmer and incoming board nominee Lisa Dwyer urged the current board make decisions in the next month, rather than wait for the new board to take effect.

“Our first meeting is in December and I’d prefer the current board made its review and recommendations public before the AGM,” she said.

“That was also the strong view of farmers at the supply meetings.”

She said decisions were made hastily in April.

“I have no doubt MG had good intentions, but they didn’t use the time to stress test what the MSSP would look like in reality.”

Mrs Dwyer said the she new as much as other suppliers about what would occur.

“There’s been no indication of what the review looks like and no indication at supplier meetings of board thinking,” she said.

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Dairy News AUSTRALIA september 2016

4 // news

Farmers in need urged to ask for help FARMERS hurting from the price crash are being urged to swallow their pride and reach out for help if they need it.

Victoria’s farm relief campaigns continue to experience strong demand for support, but they fear that some farmers aren’t getting the help they need.

They stress that dairy farmers didn’t cause the crisis but they’ve been the unwitting victims.

Gippsland Farmer Relief

spokesperson Valerie Maddocks said calls for support remained strong, but some needy farmers seemed reluctant to seek help.

“Farmers are still looking for assistance and it’s only getting worse. A lot still don’t have enough money to feed their families,” Ms Maddocks said.

“They’re desperate to pay their electricity bills, some are being forced to sell their herds, and some are nearly running themselves into the ground.”

farmer relief GIPPSLAND October 15: Trivia night and dinner at Yarram Farmers’ afternoon tea with free guest speaker in the Boolarra area on a date to be confirmed.

■■ October 31: Boolarra All Purpose Building - Massage, healing and other relaxation activities 11am-2pm free for farming families and includes lunch and afternoon tea.

■■ Contact Samantha Brick 0427 824722 ■■ November 5: Fun run over 5km and 10km at Mirboo North.

■■ December 10: Plans for a benefit musical concert in the Yarram area.

Contacts: Project Facilitator Melissa: 0409 334 397 (Boolarra) Latrobe & District Coordinator Jan: 5664 4396 Yarram & District Coordinators David: 0429 825 582 or Kerry: 0457 450 212 Sale & District Coordinator Mary: 0438 314 053 ■■

■■

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Ms Maddocks said there were about 20-25 receiving regular hampers and support around south Gippsland.

“The problem is getting people to ring for help,” she said. “They feel embarrassed and don’t want to let people know they need help.”

Ms Maddocks said there was no reason for farmers to resist getting a helping hand.

“We offer confidentiality and if they need help they should ring one of our coordinators and we will get something to them.”

The group has several fundraisers organised, collection bins across the district and a partnership with Relationship Australia to provide counselling.

“We have food packages and other practical support, but we want to offer other types of support as well,” Ms Maddocks said.

She added that people in the community were continuing to support dairy farmers.

“Whenever we approach someone they’re usually very receptive, but of course we could always do with more.”

Northern and north-eastern Victorian farmer relief facilitator Jenni Clark said there was still huge demand for help.

“I think farmers now realise what’s out there for them and they’re not as worried about ringing up for help,” Ms

Relief programs have been established to assist dairy farmer families in their time of need. Pictured is store manager Paul Brown, from Foster IGA in Gippsland.

Picture: Gippsland Farmer Relief.

Clark said.

“There are still quite a few who should be asking for help,” she added.

“We’ve got a few ringing to find out about events and while they’re on the phone we ask if they need any other help.”

Ms Clark said farmers were now largely “resigned to their fate” and decided whether they are going to stay or go.

“The ones who’ve decided to stay are the ones who’ve come to us and said they need a hand.”

The group has access to Rural Financial Counsellors, has a hamper

system supported by fundraisers and donations, and is working closely with St Vincent De Paul and Murray Dairy.

They are also campaigning for improved services for farmers, including a one-stop shop with Centrelink and Rural Financial Counsellors available at one location, and access to support for New Zealand sharefarmers.

There is also a Facebook page for Western Victoria, although not many calls are coming from that region.

• Farmers in regions other than Victoria should contact their regional development program office (DairyTas, DairySA) for local information.

National dress up day planned to help farmers SCHOOL

students across Australia are being asked to back the nation’s dairy farmers by dressing up as cows for a day.

The Udderly Awesome Dress-Up Day appeal on October 21 is the brainchild of Vincentia High School students at Jervis Bay and they hope 9500 schools around the country will follow their lead and dress in brown, black or white for the day.

The school has previously sold car bumper stickers to raise funds for crisis counselling for farmers and to fight for an end to $1litre milk.

Teacher John Fairs is organising to email all 9500 schools across Australia to plug the idea and hopes other dairy

industry supporters will help out to directly phone their local schools.

“We need action now,” Mr Fairs said.

“Many of our dairy farmers are hanging on by a thread and they need our help now, not at the completion of an inquiry that will take 9-12 months.”

The students have joined forces with dairy farmer supporter Katie Glassock to launch the Udderly Awesome Dress-Up Day appeal.

Mr Fairs said the appeal would continue to fight $1litre milk and milk price cuts.

“There’s never been anything like this before and we’re going to need unprecedented support and help from dairy farmer supporters right across

Australia if we’re going to make it a success,” he said.

All funds raised will go to the Need for Feed disaster relief dairy farmer support program.

“If we can make a big splash it will not only make money to ease the pain for dairy farmers, it will hopefully attract attention across all communities to how tough it is for dairy farmers through no fault of their own.”

They hope student councils will take on responsibility for running the dress-up day.

Participating schools will be emailed a link for sending donations.

The Udderly Awesome group page can be found on Facebook.

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Dairy NewS AUSTRALIA september 2016

news // 5

ACCC inquiry into dairy ‘a major win’ Jeanette Severs

AUSTRALIAN Dairy Farmers president David Basham says dairy farmers with daily pick-up contracts stand to benefit from the recently announced ACCC enquiry.

The inquiry was announced following an industry symposium in Melbourne last month.

“It is a major win,” he said.

“A lot of contracts which are based on supplier agreements have no term, therefore every time the milk is being picked up at farm they are considered a new contract.

“The result was better than we hoped for. These farmers will now be covered by this new legislation.’’

“I think it’s very hard for individuals to bring evidence before the ACCC, in sufficient numbers for them to act.

“These new powers should resolve that dilemma. It should investigate the whole supply chain and identify where true imbalances are and perceived imbalances.”

Mr Basham said ADF had already begun discussions about fair contracts with Australian Dairy Products Association, the dairy processors representative organisation.

A dairy index for domestic and international market reporting was also discussed at the dairy symposium.

“There are a lot of indexes out there. Rather than creating an index, we think the gap is farmers’ understanding of how to use them,” Mr Basham said.

Farmer organisations would need funding to deliver education programs to upskill farmers in that knowledge, he said.

Peter Skillern, CEO of Tasmanian Farmers & Graziers, who has been appointed to lead the ACCC Agriculture Consultative Commit-

tee welcomed the review.

“We are not expecting anything to change overnight, but the ACCC’s investigation will shed light on the difficulties farmers have experienced,” Mr Skillern said.

“Farmers have always been price takers but that doesn’t mean we need to do so in an uncompetitive environment.

“The ACCC has been charged with ensuring a level playing field should exist for all. The ACCC is keen to hear of any agriculture issues related to competition from farmers and others along the supply chain.”

in brief Coles VFF milk on shelves THE Victorian Farmers Federation (VFF) has opened applications for its Farmers’ Fund, developed as part of its new milk partnership with Coles.

Farmers’ Fund milk will be produced by Murray Goulburn and Coles under licence from VFF. Farmers’ Fund is available to purchase as of last week in most Coles supermarkets across Victoria.

Forty cents from every two-litre bottle sold will be directed towards the fund. It retails at about $2.50 for the two litres.

Grants of up to $20,000 will be distributed for infrastructure, education or expert advice that helps build a more viable business.

Coles has kick started the Farmers’ Fund with a $1 million contribution, allowing the VFF to fast-track the application and approval process for grants, with the first round being distributed by mid-October.

To find out more about the Farmers’ Fund grant applications process visit www.farmersfund.org.au

Last ditch deal could save WA farmers from forced exit WAFarmers is confident a last minute deal will be struck to save the state’s nine dairy farmers facing a forced exit from the industry after having their supply contracts cut.

Four Brownes suppliers and five Harvey Fresh suppliers have been left in limbo since the processors told them they planned to stop collecting their milk.

The Brownes suppliers looked certain be forced out of dairy at the end of

Earlier this year Brownes chief executive Tony Girgus told Perth radio that the contracts were cut due to an oversupply of fresh milk and a the collapse in export markets. Simply, there is a significant excess volume that we have to deal with, I can’t buy milk I can’t sell,” he said.

“In the past we put excess milk into cheese and lost our shirt on it.”

Brownes’ decision to cease cheese production and its subsequent dealings

September after attempts to find a new home for their milk proved fruitless.

But WAFarmers dairy council president Michael Partridge said he believes an agreement will be reached within the next fortnight to keep the farmers in the industry.

“The state has wanted growth and its now got it, so it is important to hang on to that base and not allow individual farmers to be sacrificed for a short-term problem,” he said.

with suppliers has strained its relationship with farmers.

Mr Partidge’s optimism that the nine out-of-contract farmers can remain in the industry comes despite a challenging short-term outlook for the state.

Rabobank senior dairy analyst Michael Harvey said oversupply would continue to pose a challenge for the WA industry.

“WA has had a very strong bounce in milk production over the last two years

on the back of milk price increases back then,” he said.

“I know the WA industry are looking to build markets offshore, liquid milk markets in Asia.

“But there is a lot of competition in some of those market with product from the east coast of Australia, but also from New Zealand and Europe. So it’s not surprising that the opportunity in those markets hasn’t come to fruition like they first thought.

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

6 // NEWS

Effects test a priority for Nats GORDON COLLIE

STRENGTHENING COMPETITION law to confront supermarket

policy on $1 a litre milk will be a major priority for the re-invigorated National Party in the new Federal Parliament.

Queensland Senator Barry Sullivan (pictured) committed the party to a strong push to get the “effects test” into legislation when he addressed the Queensland Dairyfarmers Organisation annual meeting forum in Toogoolawah last month.

Inclusion of the contentious test to help provide fairer outcomes for farmers and small operators in their dealings with big business was among the 55 recommendations of the Harper review of competition policy.

The proposed overhaul of section 46 of the Competition and Consumer Act

is designed to make it easier to prove Scott Morrison He promised vigorous support for anti-competitive conduct by larger the reforms would be led by Deputy players.

The changes were stranded at Prime Minister and Agriculture MinCoalition Cabinet level by the elec- ister Barnaby Joyce, who was a strong tion which has strengthened the hand advocate.

“It’s been a long, of the Nationals who enjoy hard battle so far and a higher proportional rep- “The effects will need to resentation in the new govtest, if it works, Barnaby be strongly supported ernment. in his efforts to get the QDO president Brian should be the Tessmann welcomed Sena- end of $1 a litre change through,” Senator Sullivan said. tor Sullivan’s strong inter- milk,’’ He said the result vention in the long battle – Brain Tessmann, of the change would by producers against the QDO. be to reverse the onus supermarket-led cut price of proof that farmers milk initiative.

“The effects test, if it works, should were being damaged by cut price milk be the end of $1 a litre milk,” Mr Tess- onto the supermarkets.

“It will make it easier to demonstrate mann said.

Senator Sullivan said recommen- the damage done, not just in the case dations for changes to consumer law of milk, but in pricing policies across a were currently in the hands of Treasurer range of commodities.

Barry Sullivan

“They are effectively asking the farmers to fund a marketing initiative selling product below the cost of production.”

“The effects test will be a fairly sharp stick to help prove unconscionable conduct,” he said.

Senator Sullivan highlighted inadequacies in the Australian Consumer and Competition Commission which had not been able to effectively address pricing issues that impacted on third parties.

“We’ve had a battle on our hands to bring changes in this arena, but I think we have achieved a real breakthrough with the appointment of Mick Keogh as the first Agricultural Commissioner,” Mr Sullivan said.

Mr Keogh, the chief of the Australian Farm Institute, took up the part-time ACCC position during the year to bring his specialist agricultural knowledge to deliberations on competition law.

“His appointment will help fill a real knowledge gap within the ACCC and bring a fresh perspective to their decision making,” Senator Sullivan told the QDO forum.

• ACCC calls for input on guidelines, p. 14

a2 Milk strengthens deal with Synlait NEW ZEALAND company Synlait and Australia’s A2 Milk (a2MC) have announced a new supply agreement between the two groups for the production of a2 Platinum infant formula.

It is for a minimum term of five years, and provides for a rolling three-year term after the first two-years.

John Penno, managing director and chief executive of Synlait, says its a2 milk suppliers will be pleased with this agreement as they’ve adapted their farm businesses to supply a2 Milk.

“They create value by differentiating milk behind the farmgate and receive a premium pay-

YASHILI TO SUPPLY DANONE YASHILI NEW Zealand Dairy Co has agreed to sell as much as $18.7 million of base powder dairy products to Danone under a contract that will run until the end of the year.

The deal is disclosed in a notice to the Hong Kong Stock Exchange.

Danone bought a 25% stake in Yashili, itself a unit of China Mengniu Dairy Co, in 2014.

ment to recognise the value they create. The term of this agreement with a2MC gives them increased certainty in an uncertain time for the dairy industry,” he says.

The agreement strengthens the current business relationship between a2MC and

Yashili NZ Dairy, a joint venture between Yashili and Mengniu established in 2012, invested $220 million in a dairy plant in Pokeno capable of producing 52,000 tonnes a year of infant formula.

Danone’s subsidiary Danone Nutricia ended its supply contract with Fonterra after the false botulism scare.

Synlait by providing certainty about medium term growth plans, the two companies say.

Production volumes remain the same, but appropriate provisions have been made to allow for increased scale to meet market demand in the medium term.

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Geoffrey Babidge, a2MC managing director and chief executive, is pleased with the deal.

“We’ve maintained appropriate flexibility to assess new product and market opportunities as they arise,” he says.

Mr Penno says they started working with

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a2MC in 2010 to manufacture the world’s first infant formula made from milk exclusively containing the A2 beta-casein protein.

“Our businesses have grown significantly since then and this agreement deepens an already strong relationship,” he says.

The agreement includes the following key terms: ■ Committed supply

by Synlait up to a prescribed infant formula (IF) product volume.

■ Synlait will have exclusive supply rights up to a specified infant formula product volume and a right of first offer for certain additional volumes, in both cases

in respect of the infant formula stages 1-3 already supplied

by Synlait and for sale by the a2MC group in China, Australia and New Zealand.

■ In return, a2MC will be Synlait’s preferred customer, with committed production capacity and access to new technologies, and continued favourable and competitive pricing terms.

The companies will cooperate to forecast demand and supply for a2 Platinum, particularly as regulations evolve.

The contract also includes a steering committee structure to help

a2 Milk chief executive Geoffrey Babidge.

the parties manage the contract and their business relationship.

Mr Babidge says the new agreement is positive for both a2MC and Synlait as it clarifies the medium term manufacturing and supply arrangements for a2 Platinum infant nutrition products.

Mr Penno says they have assessed their production commitments to all customers.

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Dairy NewS AUSTRALIA september 2016

news // 7

Toowoomba proposal eyes Asia Gordon Collie

A NEW direct air link into Asian markets is the key driver for a proposed dairy manufacturing venture on the Darling Downs in Queensland.

Advanced plans for the project were outlined by one of the proponents Steve Laracy at the Queensland Dairyfarmers Organisation 2016 annual meeting forum held in Toogoolawah.

The Toowoomba Integrated Milk Project will be based on a green fields site in the industrial estate adjacent to the privately-built international airport at Wellcamp.

Mr Laracy told the meeting that the big attraction was the ability to move up to 100 tonnes of fresh milk at a time from factory chillers directly onto a cargo plane bound for any destination in Asia.

“This makes it an absolutely unique location in Australia,” he said.

Mr Laracy, who has a civil engineering background, is managing director of the Brisbanebased consultancy Larpro.

Larpro has formed a

joint venture company Au Lait Australia, to drive the project in partnership with Nature One Dairy, a Victorian infant formula manufacturer based in Carrum Downs.

A development application has just been lodged with Toowoomba Regional Council for the $35 million first stage of the project to dry mix

including UHT milk and powder production.

Only the fresh milk would be air freighted.

“We are looking at an investment up to $140 million and closer to $200 million with the addition of a spray dryer.”

Mr Laracy said it hoped to begin processing the

first fresh milk through the factory about mid2018.

“The aim is to start with a throughput of about 50,000 litres a day and progressively ramp up to 500,000 litres a day.”

Funding for the latter stages of development is still being sought with

interest from potential Chinese investors, Mr Laracy said.

Setting up their own full integrated dairy farm south of Toowoomba was in the project mix to supply up to half the fresh milk requirements of the factory.

A feasibility study

for the farming side of the enterprise was still being developed based on experience with largescale farming systems in the United States.

“We’ve been developing this project for about two years now and once preliminary work gets underway we

are looking at a time frame around another six years.

“This will be a good growth opportunity for the regional industry on the Darling Downs with another outlet for significant volumes of milk at prices above existing levels,” Mr Laracy said.

Milking Robots they work for me.

Steve Laracy addresses QDO.

infant formula, with construction expected to start early next year.

“There is demand for fresh milk in significant volumes not just into China, but throughout the Asian region. Moving product direct from the factory to our customers will be a huge advantage,” he said.

Fresh milk processing capacity will be added in stage two of the project with other capabilities

Fonterra boosts Cobden coolroom capacity FONTERRA Australia has announced a $6.2 mil-

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lion investment to expand the coolroom at its Cobden spreads plant.

The coolroom expansion will increase storage capacity of butters and spreads once they come off the production line, enabling the storage of more products to keep up with growing demand.

Fonterra Australia regional operations manager, west, Andrew Nooy says the investment is necessary to make more room for Western Star, with sales of the award-winning butter reaching $150 million last year, and continuing to grow.

“Western Star is going from strength to strength, winning a bigger slice of the butter and spreads market as consumers shift back to eating more natural foods and incorporating it into their cooking.

“One pack of Western Star Butter is sold every minute in Australia, and the coolroom expansion will give us plenty of room to keep up with demand.”

The expansion will also use innovative technology, including Automatic Guided Vehicles (AGVs) to take finished product off the line and stack away into flowthrough pallet racking, increasing efficiency.

“With Cobden now Fonterra’s largest Australian site, employing over 300 people, it’s critical that we keep our people safe.”

The works will take approximately seven months to complete, with over 25 contractors onsite for the duration of the project. – (Source: Fonterra)

Dairy News AUSTRALIA september 2016

8 // news

Email ends dairy dream WHEN an email from Fonterra came through announcing a step down in milk price, Adam Nelson knew the writing was on the wall.

Just four years earlier, at age 22, he’d put everything on the line to take an opportunity as a lease farmer on a dream property near Drouin in Gippsland and he’d been slogging away through low milk prices and poor seasons ever since.

With an average farm gate milk price at $5.60/kgMS, the 2015/16 season had been playing out quite well until Fonterra followed Murray Goulburn’s lead and cut it to $5.

“We got the email and two days later the cows were gone,’’ Adam said.

The bottom line said it all.

“That kind of budget is thousands of dollars. And you don’t even need to

sit down to work out that ‘this is going to cost me’.’’

He didn’t have the equity or the reserves to support a price lower than the cost of production.

During his first three seasons he barely broke even.

“A good year would have set me up in the industry so that I would be able to weather the hard times. But I didn’t manage to last long enough to get one of

Adam pictured in his empty dairy on May 18.

those,” he says.

Despite the emotion of ending what had been

Adam was devastated to sell the last of his herd: “I watched their birth, have seen their first steps and followed their development making sure they have always had what they’ve needed. I’ve put food in their bellies before my own, and spent countless sleepless nights awaiting the arrival of their next generation, a next generation I will not see from these lovely ladies,” he wrote.

a lifetime dream, he debt you shouldn’t have.’’ approached it with a clear He knows all business head. decisions come with risk, “If I had of kept especially when you are going I would have been starting out. liquidated. I could have But Adam says he held on and waited for would like to see the a nice opening price or government hold Murray the possibility that the Goulburn and Fonterra to opening price was good – account for pushing their thank god I didn’t.’’

Adam says he was “Murray Goulburn never interested in taking a support loan need to just cop it from Fonterra. on the chin.”

“They are double dipping on their money there. debt back on to farmers.

“You go to the bank “Murray Goulburn to borrow money, you need to just cop it on the don’t borrow money from chin and take out a loan people that say you owe themselves and their them money and then business needs to pay that claim you have to pay off, not the farmers. interest back on that loan “Because if I make an they’ve given you, for the error on the farm myself, if I spray a paddock with the wrong thing, if I put a crop in and it fails, that’s my responsibility.

“Do I then send a bill up the line to Murray Goulburn or Fonterra?

“They’ve turned around and done the exact

thing but in the opposite direction.’’

For now, Adam is working on family friend’s dairy farm, putting some money back in the bank.

He says he’s not ready to start planning for the future, but it’s unlikely he will again try to chase his dream of owning a dairy farm.

But he’s happy to share his story with others.

“I’m not too proud to say I’m struggling. I’m despondent right now but I know I’ll get back on track, I’ll get motivated again. It will fall into place. Everything happens for a reason.’’

He’s also proud of what he achieved.

“I know that I was a good farmer. I know I had my budgets and I’m proud of what I was able to achieve in a short period of time, but at the end of the day it’s been taken out of my hands, and I’ve been thrown under the bus.’’

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Dairy NewS AUSTRALIA september 2016

news // 9

Young lives in limbo since price shock WHEN Amy Johnston started working on her parents’ dairy farm in 2013, it was an opportunity full of promise.

She was 17 and hated school, so her parents offering her an apprenticeship on their relatively new dairy farm was a welcome way out.

As it turned out, she took a shine to it.

“I love the cows and the farm work. Cows are really good to work with. And (dairying) is something that’s meant to be around forever. I grew a passion for it.’’

Kathleen and David Johnston got into dairy seven years ago to bring the family together.

David’s job managing a cropping operation in Deniliquin had split the family in two; Kathleen stayed on the family farm in Kerang with the kids and a small dryland cropping and cattle agistment business to oversee.

“Dad was always away working so it was good to come together and have that family time.’’

The milk price was just picking up after the lows of 2009/10. The family were milking a mixed herd of 200 cows and supplying Murray Goulburn’s Cobram plant.

When the price announcement came in late April, the signs that they could survive it were not good.

Amy’s best mate, who was a casual milker, had to be laid off.

“Prior to the opening milk price we already knew what the minimum cost that we couldn’t go under and it fell $1.50 under that,” Amy says.

“So it was already in the books that we weren’t going any more.’’

They decided to sell their beloved herd to try to save the farm.

“Mum and Dad weren’t going to put themselves in more debt and sold the cows,” Amy says.

“It’s better off than them stressing and wondering how you’re going to meet monthly

requirements or even put food on the table.’’

Amy says it was gut wrenching to say goodbye to the cows she loved to spoil.

“It was very emotional, especially when it came to selling one of our original girls, we raised her from a calf and she was always the first there in the dairy to get a scratch,’’ Amy says.

“The day that it came to get on the truck she didn’t even want to get on, so it was very heartbreaking.

Mum and I were there in tears.’’

Fortunately, most of the cows went to other dairy farms rather than the abattoir.

Now she worries for her parents, just as they worry for her.

“Dad is 58, Mum’s 53.

They are not young and they are worried about what they are going to do to make money. We all worry about them.’’

For now, the family will return to agisting cattle and cropping hay.

“We are just going to trial different things and see what works I guess.’’

Amy now works as a casual milker on a nearby farm but she says she’s in limbo. She wants to stay near her parents for now.

“It’s hard to say what I’m going to do,’’ Amy said.

“I wasn’t prepared to be out of a job this soon.

We got the news one day and the next mum and dad were like, ‘we’re shutting down the dairy’. I didn’t have time to think. It all happened really quickly.’’

Amy said the family has had had no direct contact from Murray Goulburn since the price announcement.

“There’s plenty of anger,’’ Amy says. “I just think it’s unfair that guys in offices can decide on what wages us farmers can live on.

“Us farmers make Murray Goulburn. Without the farmers making the milk there’s no Murray Goulburn, so you know, I think it’s ridiculous that they could put us of out of business when they need us to make the business.’’

Despite the fact her parents have left the

industry, Amy says she wants to see a price recovery soon.

“It’s not just the farmers that get affected but everyone they had come to the farm. I hope dairy

gets back up so that we can go back to supporting the community.’’

Amy says she’s still trying work out what her next move will be, but she wants to stay in agriculture.

“I knew I was going to eventually leave mum and dad one day to try my hand at something. But I’m not sure what to do now, I’m still getting my head around it all.’’

Amy pictured in the now unused dairy.

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Dairy News AUSTRALIA september 2016

10 // news

DAIRY NEWS AUSTRALIA APRIL 2016

OPINION // 19

Taking the plunge in search of a fair price for milk ndependent review of

lia’s value to farmers

and local produce together to help establish the Warragul Farmers’ Market, and is director of a local WITH the sound of the marketing firm. coffee machine whirring But it was a catch up at in the background of a Farm World Melbourne cafe, the team ngle in which milk levels whilea few theweeks later, that Steve flagged behind Gippsland’s newest profit production has fallen margins of the idea of moving from mation, milk fromare11talking billionabout litres the manufacturers supplier to seller – and lightbulb moments. a has to just over 8 billion increase. hoped Jindivick dairy farmer nd litres (while New ThisSallie hasmight led come on board as a business and Gippsland Jersey rom Zealand’s production to significant founder Steve Ronalds was partner.

Initially hesitant, it was on his Easter holiday at Eden on the south-coast of the sudden drop in farm mers witness are their funds gate milk price in late April NSW when he was struck. nt on lavish events and offices, that compelled Sallie to “It was a little coffee recastsshop consistently become involved. there and I saw thepredicting Tilba Jersey milk and I saidno “The dairy crisis hit d milk production with to my wife Bec ‘We could for achieving this, and athree weeks after our initial conversation, and do something like this.’” advise the government about through social media The combination of tate of the industry.” the taste of the Jersey milk we had lots of people asking ‘what milk can I latte and the fact that the buy to support Gippsland locally-produced milk vies on has doubled over the disillusionment farmers?’ It was hard to seemed to be in all the ition same period) and amongst the cafes in the region was part give a straight answer,’’ 0m the number of dairy remaining dairy Sallie said. of the inspiration. t farmers has shrunk farmers about how “I saw what was Around the same no from 23,000 to 6,500. their industry is run, happening and that it was time, Sallie Jones, still l The the board as welland illustrated so is unfair I thought, if grieving lossof of her rom Dairy Australia by the fast declining my dad was here, he would father, thought about the turers appears to bespirit heavily membership of theand totally be supportive entrepreneurial resence that influenced byfather’s dairy Australian Dairy for want to do something spurred her manufacturing Farmers as success as a farmer and ice the industry.’’well as vancing cream interests, and bodies.

In under six months maker, andhas how she state f watched farmgate We repeat our a they have developed might buildthe further on the brand and found a familyskills priceshe forhoned milkworking previous calls made owned processor in with him. a has being kept at well to the Minister for Dandenong. and She has already bought Agriculture dustry below sustainable They are still putting her passion for farming

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Madeleine Brennan

The current trend the Productivity Commission for a for farmers to exit truly objective review the industry (by of Dairy Australia and selling their farms the value it delivers to to other producers farmers as well as the or converting to government. more profitable beef What farmers production) should witness are their ring alarm bells for funds (typically the government, $5,000-$7,000 per but instead Dairy farm) being spent Australia spreads the on lavish events message that all is and offices, annual forecasts consistently well.

As the number predicting improved milk production of farmers declines with no strategies for further, Dairy achieving this, and a Australia will failure to advise the need to Steve Ronalds with daughterpresumably Maya pictured with Sallie government aboutJones andcontinually ramp up Erika McInerney, co-founder of the the true state of the Warragul Farmers’ Market. the levy even more industry. in order to secure its dairyon milk will be sent theAustralia’s finishing touches ownExcess survival. exports used to plans, to their current supplier. their distribution Chris Gleeson, account for about “We don’t expect to but the focus will be local.

Crossley VIC 50%Steve of milk produced sell that amount from year and Bec’s herd On behalf of but this 450 hasJerseys, fallen one, definitely not day of about Farmer to aroundproducing 25%, and one,’’ he Power laughs. “But the currently *Ed note: The changes dream is to take on more around twocould and half Australia well suppliers can.’’ million a year, will have sincewhen been we passed be a netlitres importer of provide all of the required milk in 10 years’ time. into Sallie law. said a model of milk at first.

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real competition and this responsibility is informing focussed on the domestic seems to go the whole way market, we think we can,’’ the Gippsland Jersey through the sector,’’ Steve Steve said. brand, with a portion said.

Sallie said consumer of proceeds devoted In what will be a very sentiment since the milk to supporting the local busy couple of years ahead, crisis has buoyed their community.

Steve, Bec and sharefarmer confidence.

“We want to be a Brenton Zeira have also “People have left $1 company that is about opened up their farm to milk on the shelf and kindness and that shows become a Dairy Australia we’ve got real heart,” Sallie they are supporting name Focus Farm. brands but those name said.

“The fact that we are brands still aren’t all “We’re not setting still young(ish) this up to become and we have a millionaires, it’s “If the public can sharefarmer, and as much of a social the fact that we’re enterprise as it is speak loud enough having a crack at about Steve getting and if they are processing our a decent price for his educated enough, own milk. We try to milk. that’s when we can think outside the “We won’t be box.” able to solve the milk get changes and other Steve said crisis and save farms, farmers can do what increased but we can do our we’re doing.” transparency from bit.’’ farmer to consumer Sallie said it was a would help support their Australian owned brands. way of taking control of a “If the public can speak success. difficult situation.

“There’s no point in “We’re saying, what can loud enough and if they are doing it any other way,’’ educated enough, that’s we do? And let’s do a good he said. ‘’We don’t want to when we can get changes job of it.’’ have smoke and mirrors. and other farmers can do Working out “We want to be open what we’re doing.” their processing and and transparent about how In trying to find distribution costs, and we manage the business.’’ distributers for the a modestly better than He hopes there will product, Steve is under no average farm gate milk eventually be a whole-ofillusions how difficult the price, Gippsland Jersey farm reporting system that task to grow the business will retail at $4.70 for two is externally audited. will be. litres.

“Consumers love it.’’

Exclusivity contracts at “All we want to do is The brand will officially the retail level make it hard take out that volatility for launch at Warragul to get on the shelves in farmers, so it’s not 70c Farmers’ Market on medium to large outlets. one year and 30c another, September 17 at 8.30am.

“They won’t allow and because we will just be

DAIRY NEWS AUSTRALIA SEPTEMBER 2016

NEWS // 11

Midfield eyes new suppliers was exceptionally supportive.”

The Midfield Group has its own farms, DAIRY FARMERS are showing keen interest in a however its milk supply is new processing plant near contracted and it intends Penola in South Australia. the Penola business to operate on a stand-alone About 300 attended basis. the first open day on “We’re looking for September 1 at the independent suppliers Midfield Group’s partlyto meet the quota of 220 completed plant. million litres of milk,” Mr The plant has already Aarons said. attracted pledges of “We’re very, very significant volumes of milk, 10 months out from confident we will get the supply. We its planned already have opening. a significant Milk supply “We’re starting from volume manager Daniel scratch and pledged to us and Aarons said don’t have there’s a the response the burden fair amount from farmers of contracts of time had been between exceptional. already in now and July “The play.”

1 next year.” numbers The plant at the open expects to source milk day exceeded our from South Australia and expectations and we Western Victoria. had another couple of Farmers attending the hundred who wanted to be there but couldn’t find open day heard a general update on the project and relief milkers to get away discussed potential paths for the day,” Mr Aarons for suppliers. said.

A series of workshops “The general feedback RICK BAYNE

will be held in September and October in South Australia and Western Victoria to talk to farmers about the milk supply model.

“All options are on the table,” Mr Aarons said. “We’re very keen to identify a simplistic approach.

“For larger farmers

there’s potential that we can customise an arrangement.

“We’re starting from scratch and don’t have the burden of contracts already in play.

“We want to get it right and that will be identified by a series of workshops over coming weeks where we will engage on

a more personal level with farmers who have put their hat in the ring and expressed significant interest in supplying to us.”

Works on the redevelopment are about 50% complete and on track for operations to start on July 1, 2017.

The plant will produce

we

skim milk powder, whole milk powder, AMF and cream for the domestic and international market.

The Midfield Group purchased the former Safries factory and site near Penola in December 2014.

Last month, the Midfield Group and Louis Dreyfus Company Dairy

Asia Pty Ltd., a wholly owned subsidiary of Louis Dreyfus Company Asia, announced they had entered into a joint venture for the construction, development and management of the dairy processing plant and related commercial activities.

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farmers to a single in which milk levels while the the Produc financial interest in ON BEHALF of meeting! production has fallen profit margins of Commissio Farmer Power, which the outcome.

Dairy News AUSTRALIA 2016 last levy poll, Since its formation, from 11 billion litres the manufacturers truly object represents dairy septemberThe Dairy Australia has to just over 8 billion increase. of Dairy Au which reportedly farmer 12 // members news received around litres (while New This has led the value it cost Dairy Australia in the south-west $500 million from Zealand’s production to significant farmers as around $750,000, of Victoria, we governmen resulted in only applaud the stand What far an estimated 600 taken by Senator “What farmers witness are their funds witness are David Leyonhjelm in dairy farmers funds (typi opposing the changes attending workshops being spent on lavish events and offices, $5,000-$7,0 to the five year poll of nationwide. annual forecasts consistently predicting farm) being Australian Dairy the dairy levy.* improved milk production with no on lavish ev Farmers, who We are concerned strategies for achieving this, and a wholesale and offices all licensed that this is just the sudden orcontacted Rick Bayne changes. failure Dairy in 2040*to advise the government about forecasts co dairy farmers calling latest illustration of Dairy Australia’s threethe true state of the industry.”

Business for AUSTRALIA’S dairy predicting farmers to how Dairy Australiayear Dairyfor Moe, in Central Gippsland could see an Future Climates (DBfFC) farmers will be less milk produ support these change, fails to by represent increase in average temperature of 1.4° C and research project has found profitable 2040 unless a 12% reduction in rainfall, making it more if farmersdid continue they change their practices with no str so aswith a limited the interests of dairy compulsory levies on has doubled over the disillusionment like Cobden in the state’s southwest, but a bit they do now they will have to cope with climate achieving t warmer, or Tallagatta in thein north east, but budget of around farmers and istoan lower pasture farmers addition same period) and amongst the production variability, according with less extremes. and utilisation, increased new research.to eliminate failure to ad $3,000-$5,000, which attempt tonorth-west aroundTasmania, $300m the number of dairy remaining dairy For Myalla in Farms are likely to need purchased supplementary temperatures will be more like southern governmen elicited a response farmer’s in government farmers has shrunk farmers about how feed, greater reliance more shelter, democratic sprinklers Victoria (rainfall difficult to predict). silage/hay for cows in dairy, more the true sta only a smallIn South Australia, rights tothehave a say.on cuttingfrom funding (with no from 23,000 to 6,500. their industry is run, at Parawa on the rather than direct grazing summer feed gap options, Fleurieu Peninsula, the climate will be more industry. minority of farmers.

The panel direct financial The board of as is well illustrated pasture, and lower milk different pasture mixes like Mt Compass is now, but a little warmer. *Modelling on the high climate change production per cowbelieve by and even different calving Australia We they do based that developed contribution from Dairy Australia by the fast declining scenario.

2040. patterns as they come exports use not reflect the views the proposals dairy manufacturers appears to be heavily membership of the Source: Dairy Australia, National findings The result would be to grips with changing ofand the Dairying despite Businesses for Future Climates account for of the farmsmajority, but climate. for changing the less profitable their presence influenced by dairy Australian Dairy research project, You Tube video.

DBfFC project manager, Farmers will also need 50% of milk the results are tainted on the board). levy process was Gillian Hayman, manufacturing Farmers as well as The Gippsland dairy farmer says to have their eyes peeled working group visited a but this has byalready a failed process.

Far from advancing interests, and ashas state bodies. dominated byas farmers are on weather forecasts farm in the NE Victoria part of the study.

Hayman said. responding to climate they learn to live with a find a way of interpreting to around 2 of whichare the interests watched the farmgate We repeat our people who are notvariability.Farmer Power,“Farmers bumpier ride of climate the current understanding price for milk previous calls made Australia co noseeing funding independent responding to thesedairy things farmers, already variability mixed withof Dairy“We’rehas of climate change and tested,for no single option but able will need to respond pasture wet and very dry ongoing milk price climate variability to assist being It modelled theat well spring calving Dairy Australia has kept to asthe Minister be a net im base, has been Australia and who very was identified in any more quickly in the growth changes. “We’re years but there’s going to volatility. dairy farmers in making performance of dairy overseen an about industry below sustainable already observing Agriculture and that could be milk in 10 y tothatattract 600 therefore have region future.” in be more of and it willover However, they won’ta decisions their farms in Central

Dairy profits to take a hit without changes says climate study

Picture: Dairy Australia.

necessarily have to make

be a bumpier ride,” Ms

The research aimed to

future farm management.

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.

(Names can be witheld from publication on request.)

LETTER TO THE EDITOR EDITOR@DAIRYNEWSAUSTRALIA.COM.AU

Gippsland in Victoria, Fleurieu Peninsula South Australia and North West Tasmania under three different management systems for the current climate and projected future climate in 2040.

In general the study shows 0.6 productivity improvement is needed annually to adapt to climate change.

Farmers interviewed during the project were generally confident about adapting to incremental climate change based on their past experiences of managing variable seasons.

Ms Hayman said farmers would need to expand on what they’re already doing.

“There are many practical measures farmers are doing, or should be doing, on their farms,” she said.

These actions will include providing more shade and shelter, adding sprinklers to dairies to cool cows, undertaking farm business planning, watching climate forecasting, putting away feed in good years to counteract bad years, ensuring the summer feed gap is covered, checking that pasture is persisting and looking at summer crop alternatives.

Ms HaymanEMAIL said farmers might also need to reconsider traditional

southern Victoria that we can grow a lot more pasture during the winter because of the conditions,” she said.

“Traditionally Gippsland has been a spring calving pattern but now we’re challenging farmers to think about whether that is the best time to make the most of their pasture distribution.

One of the farms we modelled showed autumn calving was a real option.”

The research shows farmers should prepare for shorter and sharper spring breaks and better pasture growth during milder winters.

Ms Hayman said by modelling three real farms in different regions and testing three development options at each site, the researchers were able to forecast that all would be likely to have a reduction in profit and face feeding challenges without change.

“While it proved impossible to compare the development options across all three regions, because they were specific to each location, there were some general trends.

The most significant of these was that milk price was the largest single source of variation in profit across regions.”

Of the three development options

considered superior to the others. All had certain strengths and weaknesses.

The Intensified options which had a high reliance on purchased feed had the greatest year-to-year variability in profit. These systems were often the most profitable in wet decades, but the least profitable in dry 10 year sequences.

The Simplified options generally had the lowest average profit across development options within sites, but had the least year-toyear variability in profit and were generally less impacted by the 2040 climates.

The Adapt option in Tasmania increased cow numbers without increasing the percentage of purchased feed. Instead, the farm area under irrigation was increased.

This led to increased profitability and pasture utilisation. However, this option depended on readily available irrigation water at a relatively low price and would not be an option available to the majority of dairy farms in southern Australia.

The Adapt options in SA and Victoria responded to changes in pasture growth patterns predicted for the 2040 climate.

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

14 // MARKETS

Decline in local milk volumes will push up costs in the supply chain AUSTRALIA’S MILK

production is set to fall significantly in the 2016/17 season due to the damage caused to farm cashflows and industry confidence after the late cuts to milk prices in April this year.

The developing drift from El Nino to La Nina will take a while to provide tangible benefits to producers across southern regions, but in the meantime the numbers of cows sent to abattoirs is likely – on early production numbers at least – to take milk output to its lowest point since the mid-1990s.

Much has been written about the profound effects of the cut in milk prices on farmer profitability and the damaged trust in a couple of major milk processors.

But there are other larger impacts to come.

Firstly, an adjustment of this magnitude - somewhere between 5-10% of national milk output, mostly felt across southern regions - will push up costs in the supply chain for milk processing and affect the strength of the sector for several years.

Lower factory throughput will reduce plant profitability and continue to hurt farmgate prices for all producers.

Secondly, if milk volumes fall below 9 billion litres, the effect will push

FRESH AGENDA STEVE SPENCER

pressure, whether through grocery stores, convenience outlets, fast food or other dining out venues.

Sure, there are niches that create premiums for a limited number of players, but if they get too big they quickly risk being “commoditised”.

That brings us to the grocery market, the largest channel to consumers for Australian dairy products, where the operating environment will probably get a little worse.

Australia’s two major supermarket chains posted their 2016 results last month, and the contrast between Coles and Woolworths couldn’t have been

the domestic share of milk processed closer to 70%.

But does this mean it changes the determinants of farmgate prices, so that the world market will have less influence on milk values? No, that’s something that won’t change.

We’re effectively an consumer trust, while it open market for cheese, grew its supermarket busibutterfat and milk powness sales by ders and have a 30% on 8% more large low-cost store numbers. exporter across As the dairy value chain Coles underthe Tasman feels the pain of shrinkage, lying business that views this the biggest market for milk rose more than market as part just got tighter, if that was 4% on a comof its home possible. parable “sameground. stores” basis.

A number But the scarof large muliest number for Austragreater. tinational groups – fast lian food producers is Coles’ “trusted value” food chains and large food the underlying food price pitch to consumers is still brands – operate with deflation, which was the single biggest shaper global sourcing policies, almost 2% in 2015/16, and of the Australian food reinforcing the fact that has been in deflationworld prices set wholesale market, and has worked ary mode since the postvery well for Wesfarmers prices in the Australian GFC tightening really got shareholders. market.

Coles lifted earnings by underway in 2009.

Why is pricing made so At the other end of the tough by food companies? a small 4% this year, but spectrum, the sustained profitability has grown There are no signifiattack from Coles and the 60% over the past 5 years cant segments of the food swelling influence disin the midst of a deep-dismarket in Australia that counter Aldi finally came counting war waged for are immune from price

Coles lifted earnings by a small 4% this year, but profitability has grown 60% over the past five years in the midst of a deep-discounting war waged for consumer trust.

home to roost for Woolworths, which reported the unthinkable for a big grocery player - a fall in sales of its food business.

Stagnant sales caused profits to crash, down 40%, as retailing margins collapsed from more than 7% to 4.5%.

For many years Woolworths has claimed it was defending its world-beating margins yet, in a single year, they fell below Coles’ which has run a leaner business.

Some analysts have criticised Woolies for keeping prices too high, now the new regime has committed to funding more price cuts.

I can hear those bleeding hearts out there while I write this, ‘so why should

you care?’

As the dairy value chain feels the pain of shrinkage, the biggest market for milk just got tighter, if that was possible.

The supermarket stakes will get higher and the long, hard contests between the big three will now drag on as Woolworths attempts a major turnaround.

Meanwhile the economy isn’t getting any better, as household incomes in real terms have been slowing down – suggesting “value” will still be important to many grocery buyers.

Some things might be a little different however.

Retail analysts that we follow point to signs that the average shopper is

getting a little jaded with specials and savings, as discounts are less-effective at cutting through and moving traffic between stores and shifting products off the shelves.

Both big chains might have to create a bit more excitement in their brands to draw more cash from purses and wallets.

On the other hand, it is apparent that the scrutiny by shoppers and the community of the treatment of suppliers is getting stronger and that a growing realisation that “cheap for the sake of cheap” isn’t a great outcome for all.

We’ll see if that gains more traction going forward, or whether the compulsion to “follow Aldi” is just too great.

ACCC calls for input on misuse of market power guidelines THE ACCC is calling for public feedback on the guidelines it will issue to explain possible breaches of the government’s proposed Competition and Consumer Amendment (Competition Policy Review) Bill.

The Federal Government has released an ‘exposure draft’ of the Bill as part of the reforms identified by the Harper Competition Policy Review.

The draft Bill includes amending the misuse of market power provision (section 46 of the Competition and Consumer Act 2010) to introduce a substantial lessening of competition (or effects) test to determine whether a business with a substantial degree of market power has engaged in anti-competitive conduct.

Changes to the Bill, which are supported by Australian Dairy Farmers as a way to increase competition and trans-

parency across the supply chain, are yet to pass both houses of Parliament.

ACCC chairman Rod Sims has called for comments or suggestions from interested parties regarding the proposed content of the guidelines.

“In particular, the ACCC is inviting feedback from consumers, businesses, and other stakeholders about the issues and topics the ACCC can provide guidance on to assist them understand how the amended misuse of market power prohibition, and the prohibition on anti-competitive concerted practices are likely to operate and how we’ll approach those provisions,” Mr Sims said.

The guidelines include hypothetical examples of the types of conduct which may involve a misuse of market power.

It says some types of conduct that have potential to involve the misuse

of market power, either in isolation or combined include: refusal to deal; predatory pricing; tying and bundling, and margin/price squeeze.

Predatory pricing Under predatory pricing the draft guideline Rod Sims states “… in rare circumstances, very low pricing by a firm with substantial market power may be predatory. Predatory pricing occurs when a firm substantially reduces its prices below its own cost of supply for a sustained period with the aim of: causing competitors to exit the market; disciplining or damaging com-

petitors for competing aggressively, or discouraging potential competitors from entering the market.

“Predatory pricing might result in a firm losing money in the short to medium term, however, as a result of competitor’s exiting the market or new entrants failing to enter the market, the firm may be in a position in the longer term to charge higher prices and maintain or increase its market share.’’

Margins and price squeezing In regards to margins and price squeezing, the draft guidelines state: …

“a firm with substantial market power in the supply of an essential input can disadvantage its competitors in downstream markets by reducing the margin available to these competitors”.

“It could do this, for example, by charging its competitors an input price that makes it uncommercial for them to offer a ‘competitive’ price in the downstream market.

“As competitors in the downstream market require the input and have limited alternative sources of supply, a margin or price squeeze has the potential to prevent equally efficient competitors from competing with the firm on their merits.’’

To view the draft guidelines visit: https://consultation.accc.gov.au/compliance-enforcement/consultation-ondraft-framework-for-misuse-of-mark Submissions close October 3, 2016.

DAIRY NEWS AUSTRALIA SEPTEMBER 2016

MARKETS // 15

Consumers lift branded milk sales Export demand remains strong

Australian fresh white milk: volume share (%) (Fig.1) Dairy NewS aUSTraLia june, 2012

agribusiness // 17

THE TUMULTUOUS

ride that has characterised dairy markets both internationally and at home has been well documented in this paper and elsewhere over the past few months, and August has been no less eventful.

Since the ‘step-downs’ in farmgate prices for many in southern regions, dramatic changes in fresh milk sales have been observed, as consumers change their buying behaviour in support of farmers.

GLOBAL IMPACT leading a shortage Withto season 2011/12 of only a few incremental change in milk production (year-on-year) weeks from ending, attention is now JOHN DROPPERT branded fresh white milk. focused on 2012/13 milk prices as farm& LAURIE WALKER ers consider strategies for the coming Since May, the share by year. In some domestically-focused volume ofrenegotiated milk sold has incorregions, contracts gLobaL impacT porating lower and reduced ‘tier consumer increased for prices company and signify a ‘reset’ in JohNresponse DropperTto one’ access are undermining farmer branded from littlestability. For the dairy crisis likely to purchasing behaviour? confidence and asupply Shifts inaprivate label contracts and proexport-oriented have overmany 30%farmers in theinweek permanent effect, TO PAGE 16 regions, a lower price outlook relative to cessor rationalisation have seen milk ending Mayseason 15 tonota only peak the current addsof to the companies adjust their intake requirebusiness, but seems ments and pricing to meet the chang50%,challenges beforeof doing tapering off to contradict the positive medium term ing demands of a highly pressured retail outlook of to Asia-driven dairy demand marketplace. Lower contract prices and somewhat around 45% a lack of alternative supply opportunigrowth. in August, as can be seen Dairy Australia’s indicative outlook ties present challenges in a market with flows. 2012 milk production in the US those in south-east Asia and the Middle limited manufacturing capacity. Despite is up around 4% on 2011 for the year to East maintain consistently higher ecofor southern farm gate milk prices – in figure 1. published in the recent Dairy 2012: Situation and Outlook report, is for an opening price of $4.05-$4.40/kg Behind therange national MS and a full year average price range average however, the MS. The between $4.50 and $4.90/kg report considers the wider market picintensity of the effect ture and summarises the many factors varies across Australia by sitat play; the key theme of the current uation being that of re-balancing in the state. dairy supply chain. regions Australia In In the caseofof WA,focused on producing drinking milk, many farmers face a re-balancing market in the form of renegotiation of supply contracts and reduced access to ‘tier one’ supply.

The size and speed of the consumer shift in terms of private label versus branded milk sales are unprecedented.

these challenges, the underlying domestic market is stable, with steady per-capita dairy consumption and a growing population providing a degree of certainty beyond the current adjustments.

In the seasons following the 2008 financial crisis and subsequent commodity price recovery, farmers in export-oriented regions have seen solid global supply growth (see chart) - with higher-cost competitors in the Northern Hemisphere amongst those expanding output as their margins increased.

This season, favourable weather conditions have further enhanced milk

April (leap year adjusted), whilst early data suggests EU-27 milk production finished the March 2012 quota year up 2.3% on the previous year. New Zealand production is widely expected to finish this season up 10% on last year - a huge market influence given 95% of NZ milk is exported. Argentina is also enjoying solid production growth, but a significant supply gap in Brazil prevents much of this additional milk from leaving South America.

Despite wider economic uncertainty, demand has remained resilient as importing countries like China and

nomic growth rates that support increased dairy consumption. However, the surge in supply has outpaced demand growth in the market.

This situation has seen the scales tip in favour of buyers in dairy markets, with commodity prices retreating steadily over recent months. Butter prices are down some 30% from their 2011 peaks, whilst powder prices have lost more than 20%. Farm gate prices have subsequently been reduced in most exporting regions. The average basic farm gate price for milk in France for example, dropped 12% from 32 Euro

cents/litre in March (AUD 41c/L) to 28 Euro cents/litre (AUD 36c/L) in April.

Profit margins are under pressure in the US, and in NZ Fonterra has announced the final payout for the 2011/12 season has been cut from NZ$6.75-$6.85/kg MS to NZ$6.45-$6.55/kg MS (AUD$4.96$5.04).

Effectively, global dairy markets are rebalancing. Lower prices will both slow production growth and stimulate demand, and as this occurs we will ultimately see a price recovery. Key factors to watch on the global scene will be the rate at which milk production overseas slows in response to lower prices, the impact of the current financial worries on consumer confidence, the path of China’s economic growth, and the value of the Australian dollar.

Demand for exported dairy products remains a positive and will continue to grow with the middle class in large emerging markets such as China, with changes in diet and with increasing urbanisation - and also in conjunction with global population growth. Locally, the domestic market is supported by a growing population and stable percapita consumption. Whilst the dairy market is currently a challenging place to be a seller, all signs indicate that balance will ultimately return.

L A I C E P S T R O REP

Malaysia FTA benefits dairy Freedom

ASEAN-Australia-New rice and wine exporters to Zealand FTA (AANZFTA).

“Protectionist sentiMalaysia are the biggest private label had a ment over agricultural winners in a free trade significantly higher goods is rife and growagreement (FTA) signed share between the two coun-milking across the globe, so of the fresh white in this context it is pleastries last month. market to the ing Australia has managed Theprior deal, signed after crisis, to forge an agreement years of negotiaafterseven which company with Malaysia that has tions, allows a liberalised branded sales nowdealt with some sensilicensingmilk arrangement agricultural issues for Australian liquid milk account for over 50% tive not effectively covered by exporters and allows access for higher valuemilkAANZFTA,” says Fraser. of the fresh white “While under the retail products. market.

AANZFTA agreement It guarantees Ausmost of Australian agritralian wine exporters Notably, the culture’s key interests the best tariff treatment subsequent backhad tariffs bound at zero, Malaysia givescreep any country. It alsolabel allows open of private milk dairy and rice are two secaccess arrangements from tors where incremental seen2023 nationwide has not market access improvefor Australian rice ments have been negotiwith all tariffs eliminated occurred in WA. ated under the Malaysian by 2026.

ByThe contrast, the public FTA. National Farmers’ “This trade deal was Federation says the trade response to the dairy also particularly impordeal will improve intertant national market access crisis in Tasmania has for sectors such for Australian agricultural as dairy that have been beengoods. much more muted, facing a competitive disadvantage in Malaysia “After seven years of with the share of company compared with New Zeanegotiation, the NFF is branded sitting under nomilk illusion of how atland which already has a completed FTA with challenging hasthe been to around 38%itof fresh Malaysia in place.” complete this FTA with white milkNFF market.

The FTA also sigMalaysia,” vice presinals some administrative dent Duncan Fraser says.

The natural question benefits for AustraThe FTA will fill a lian agricultural exportgaps within the afternumber fourofmonths, is ‘will

Foods plant targets Asia

austraLian DairY,

At the same time, international markets have begun to show signs of recovery.

Supermarket sales of milk have seen a remarkable demonstration of the power of social media and advocacy journalism in recent months.

In the wake of the sudden milk price stepdowns by major dairy processors, primetime Channel Ten news program The Project ran a segment ‘Milked Dry’ on Tuesday May 17, which concluded with an appeal for shoppers to buy branded, Australian-made dairy products.

Consumers responded accordingly, in some cases

this trend last?’ Is the 016-017.indd 17

austraLian FooD

Sealing the deal: Malaysian trade minister Mustapha Mohamed with Australian counterpart Craig Emerson after signing the deal.

ers through streamlining of rules-of-origin declaration processes and improved marketing arrangements for certain commodities.

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

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

Despite the completion of this agreement, much remains to be done for Australia’s farmers to tap into the full potential of the Asian region and beyond.

He says the NFF will now throw its attention towards ensuring agriculture remains front and centre in completed FTAs with South Korea, Japan, China and Indonesia as immediate priorities.

“These are all markets with enormous growth opportunities and where significant barriers to trade in agriculture still exist, not only through tariffs that restrict trade

but also through technical or so called ‘behind the border’ restrictions.”

The FTA was signed on May 22 in Kuala Lumpur

by Australia’s Trade and Competiveness Minister Craig Emerson and his Malaysian counterpart Mustapa Mohamed.

Emerson says Australia will be as well-positioned in the Malaysian market as Malaysia’s closest trading partners in ASEAN, and in some cases better.

The FTA will guarantee tariff-free entry for 97.6% of current goods exports from Australia once it enters into force. This will rise to 99% by 2017.

company Freedom Foods Group Ltd is to build a new milk processing plant to cash in on growing demand in Asia.

The plant, to be built in southeast Australia, will be the first Australian greenfields expansion in UHT in 10 years.

Freedom’s wholly owned subsidiary Pactum Australia will run the plant. Some of its products will be sold in Australia.

The company says given Asian consumers’ rising incomes and improving diets, demand there will grow for quality dairy products from low-cost production bases such as Australia, whose milk is well regarded.

The new plant will allow Pactum to meet growing demand for UHT dairy milk, and add to capacity for valueadded beverages at its Sydney factory. Pactum is expanding its capabilities at the Sydney plant

to provide portion pack (200-330ml) configuration for beverage products.

The NSW location will provide access to the most sustainable and economic source of milk. Pactum has strong links to the Australian dairy industry and will expand its arrangements with dairy farmers for supply of milk. The new plant will increase scope for Australian milk supply – value-added, sustainable and export focused.

Initially the plant will produce 250ml and 1L UHT packs from a process line capable of 100 million L. The processing and packaging plant will emit less carbon, use less water, and be more energy-efficient than equivalent UHT facilities in Australia and SE Asia. Pactum expects site preparation to begin in October 2012 and start-up by mid-2013.

Pactum makes UHT products for private label and proprietary customers.

NEXT ISSUE: OCTOBER

6/06/12 1:41 PM

TRACTORS & MACHINERY & ATVs Next month’s special report reviews the latest developments and news from the farm machinery sector; the hardware that makes the modern farm tick. We’ll focus on equipment that’s relevant to dairy farming – no big broadacre gear reviews, just gear that helps the dairy industry farm smarter. Watch out for it in the October issue of Dairy News Australia.

BOOKING DEADLINE: September 28 MATERIAL DEADLINE: October 4 | PUBLISHED: October 11 CONTACT: BRETT MATTHEWS T: 0417.440.009 E: brettm@dairynewsaustralia.com.au Consumers responded to the call to buy branded milk.

Dairy News AUSTRALIA september 2016

16 // markets

Consumers lift branded milk sales from page 15

To provide some context, figure 2 is a longer run graph showing private label and branded milk shares since 2009.

The size and speed of the consumer shift in terms of private label versus branded milk sales are unprecedented, far larger than the consumer response to the beginning of the so-called ‘milk wars’ or the controversy over permeate.

The response by major supermarkets, such as the increased prominence of Woolworth’s Farmers’ Own brand, and Coles’ launch of the new

Farmers’ Fund milk brand are telling.

These moves suggest that supermarkets are taking consumers’ concerns need for a ‘fair’ price seriously, and see a future where shoppers care about the welfare of Australian farmers.

Meanwhile, global commodity markets (a key driver of farmgate prices for southern farmers) have seen a significant lift through August.

Perhaps the most significant catalyst was the strong showing at GlobalDairyTrade (GDT) event 170, on August 16, where the overall GDT

Price index gained 12.7%.

This was the biggest single-event gain since September 2015, reportedly driven by a flurry of buying from Chinese and southeast Asian purchasers.

In addition to the demand boost, growth in milk production is starting to slow, as low farmgate prices compress margins in Australia (down 10% in July), New Zealand (flat), and increasingly, Europe (down 2% in June).

Nonetheless, the scale and timing of the rally has come as a surprise to many, particularly with the Oceania season peak

fast approaching, and large inventories remaining in the EU (SMP) and US (cheese).

The major mover at GDT event 170 was WMP, with prices increasing nearly 19% on average and the off-GDT market rising strongly.

Market participants are busy scrutinising the rapid gains, the key question being how sustainable the new level of pricing is.

Heavy demand from China in particular, was credited with pushing prices upwards; whether this reflects underlying demand or simply short term market manoeuvring

remains the subject of much speculation.

August has seen some welcome developments for sellers of dairy commodities, but the

timing and speed of the recent uplift leave many wondering how much support current values have from the fundamentals.

With southern hemisphere milk flows steadily climbing as spring pasture growth kicks in, we shouldn’t have to wait long to find out.

Fonterra sells Riverina Fresh FONTERRA will sell its interest in iconic milk Riverina Fresh.

The brand and the Wagga Wagga manufacturing site will be sold to investment group Blue River Group next month.

Fonterra said all of its employees have received offers of employment from BRG. Fonterra Australia managing director René Dedoncker said the Wagga Wagga business is a strong business with an award winning brand in Riverina Fresh which is favoured by baristas, but it is not core to the New Zealand co-op’s strategy of ingredients, consumer and foodservice.

“Divesting the Wagga Wagga business follows the divestment of non-core assets, including our yoghurt and dairy desserts business, our Bega shares and our stake in Dairy Technical Services, and allows us to focus and put all our energy into our core businesses of ingredients, consumer and foodservice,” said Mr Dedoncker.

“Our Australian operations have

particular ingredients strengths in cheese, whey and nutritionals, complemented by our consumer and foodservice businesses. These businesses and dairy foods are matched by our manufacturing footprint in Victoria and Tasmania.

“We’re investing in programs and innovations to support our marketleading cheese and spread brands – Western Star, Perfect Italiano, Mainland and Bega - we’re building on the early success of our newly launched Anchor brand in Australia, and we’re maintaining the excellent performance of our Foodservice business.

“All these initiatives have laid the foundation for a strong sustainable business that is profitable for the longterm and well-positioned to pay our farmers the best possible milk price in a competitive global market,” said Mr Dedoncker.

Supplying farmer relationships will be maintained by Blue River Group.

Blue River Group’s co-CEO and founder Craig Shapiro said the decision

to acquire Riverina Fresh reflects the company’s ethos of investing in businesses that generate economic returns, but equally achieve positive and measurable social or environmental outcomes.

“The acquisition of the Wagga Wagga dairy business and the iconic Riverina Fresh brand provides Blue River Group with a fantastic opportunity to invest in the agricultural sector and the Riverina regional community,” Mr Shapiro said.

Riverina Fresh has been producing dairy products since 1922 and is sourced from around 20 dairy farms in the Riverina region.

“We’re excited by the opportunity to grow a business that has a dedicated and committed workforce and provides significant regional employment opportunities,” Mr Shapiro said. “’Equally, we look forward to building on the existing strong relationship with the local farming families and

distributors that stand behind the Riverina Fresh brand.”

Rob Collier will be remaining as CEO. “Blue River Group’s investment in Riverina Fresh will help a niche brand flourish,” Mr Collier said.

“The company is committed to the ongoing success of the Wagga Wagga business, the sustainability of the dairy industry, and the broader regional community.”

Chinese thirst for infant formula feeds growth ‘EXCEPTIONAL’ GROWTH in sales

of its infant formula brand a2 Platinum in Australia, New Zealand and China saw a2 Milk Company’s revenue grow 127% in the last financial year.

Total revenue was $352.8 million and net profit after tax was $30.4m, versus a net loss after tax of $2.1m in the previous year.

Sales of a2 Platinum in Australia, NZ and China were $212.4m, up 414% on the previous year, says Geoffrey Babidge, managing director and chief executive.

Infant formula accounted for 61% of group revenue, up from 27% on the previous year, the results show. a2 Platinum continues to be the fastest growing Australian infant

formula brand, the annual report claims.

Market share in Australia at year end was about 16%. It is number three brand in the infant formula category in supermarkets and pharmacies.

The ANZ segment of the business made profit before tax of $84.7m.

The a2 Milk Company continued paying a high farmgate price to ANZ farmers, the annual report says.

The growing success of a2 Platinum in China is based “on the well established reputation of the a2 Milk brand and company in Australia”.

“Direct sales into China increased significantly in cross border e-commerce channels (ANZ label) and mother baby retail stores (China label);

China achieved over 800% growth of infant formula sales the 2015 year,” the report says.

The nutritional range expanded with whole milk powder to meet increasing demand for fortified products.

The UK business financials improved as the business shifted from a fresh milk focus to a broader strategy, Mr Babidge said.

The US business focus is on growing distribution, consumer awareness and demand for a2 Milk.

The company spent more on international growth and brand development -- from $15.2m in 2015 to $20.5m.

In the 2016 financial year the company continued shifting from

branded dairy products to nutrition,” Mr Babidge said.

“Continued growth in the ANZ business, and infant formula in particular, has underpinned our investment in targeted overseas markets and each of those positions was expanded during the year.

“In China, there was a marked increase in sales of a2 Platinum infant formula and a further expansion of the company’s supply chain following changes to distribution in the previous year, [hence] a focus on understanding and adapting to changes in the regulatory environment for infant formula products in China.

“The increase in demand for a2 Platinum infant formula in Australia

and China during the first half created challenges in balancing supply, production and logistics, met in conjunction with our manufacturing partner Synlait and by expanding milk supply from farms in NZ.” Mr Babidge said in the US a2 Milk has been building distribution of fresh milk in California since its entry in April 2015 and now distributes to 1800 stores.

Progress has lagged because of delays in distribution via some larger retailers, but this “does not affect the fundamentals... of a highly attractive market”.

“Meanwhile, we are pleased with [increasing] sales of fresh milk in the UK and the improvement in financial results.” – Pam Tipa

DAIRY NEWS AUSTRALIA SEPTEMBER 2016

MARKETS // 17

Top start to spring with third Global Dairy Trade rise ANALYSTS ARE tip-

ping two years of dairy price pain is over due to tightening milk supply around the world.

The latest Global Dairy Trade recorded it’s third straight gain, up 7.7% on last months trade.

It comes after last month’s 12.7% rise prompted some analysts to tip the world dairy price had begun a long awaited recovery.

Rabobank senior dairy analyst Michael Harvey said all the indicators are now pointing to a geniune recovery in prices.

“It’s a positive for exporters and farmer to see the market showing signs of life … and I think the index itself is now at its highest level since February last year,” he said.

“And I think it’s a fair indication that the market certainly has bottomed and the recovery is now well underway, it then becomes a question of how strong the recover is over the next few months.”

The biggest gains in the latest auction were Anhydrous Milk Fat (+15.4%), butter (+14.9%) and Skim Milk Powder (+10%).

Mr Harvey said the results are a reaction to signs that milk supply has dropped rapidly in most major exporting countries.

“I guess the final piece in the puzzle is always Europe … it was really only Europe that was late to adjust to the new reality around milk prices,” he said.

“But the data for June is now out and there is preliminary data for July that shows a contraction there.

“There’s buyers now realising that the market has bottomed and supply is drying up so they are looking to get in, but it’s not because there is a stronger than expected recovery in demand, it really is that supply is becoming tight.”

While most signs are positive, Mr Harvey warned that there is a risk that the rally could be short-term.

“I think it’s a fair indication that the market certainly has bottomed and the recovery is now well underway.’’

continued production weakness prices to lift prices again later in the season.”

Mr Penny says NZ spring data, as it comes through, will support or challenge the view that

the global production will weaken further.

New Zealand domestic production is expected to be down about 3% this season on the back of reduced supplementary feed and reduced herd size.

Senior economist Anne Boniface says, in her agri update, unlike recent auctions, the increase wasn’t driven by WMP. “That’s a bit weaker than the 8% or so lift the futures market had been pointing to,” she said.

The recently confirmed support package from the

European Commission to support the region’s dairy farmers will have helped support SMP prices, Ms Boniface said.

The €500m support package for European farmers, which includes €150m aid to be paid EU to farmers for reducing milk production as well as extending private storage aid facilities, will further dampen EU milk production.

If fully utilised, the payments to farmers for reducing milk production would lead to a 1.1 million tonne reduction in supply.

– Michael Harvey, Rabobank “The only thing that we are mindful of is that there is still a level of stock that needs to be worked through.

“There’s intervention stocks in Europe, there’s excess cheese stocks in the US, so there are stocks around the world,” he said.

“Not that they put a dampening effect on the market, it just might delay the recovery being as strong as what it normally might be.”

Across the ditch in New Zealand, Rabobank dairy analyst Emma Higgins describes the third consecutive significant rise on the GDT as a “super start to Spring.’’

“There were more bidders this time around with 199 bidders in this event compared to 177 in the prior event – a sign that the prospect of increased prices have flushed out more buyers looking to fill inventory pipelines before commodity prices move higher,” Ms Higgins told Dairy News.

“The cut in European milk production has carried on into June and July and a drastic reduction in milk production in South America, along with a similar prospect in Australia, continues to support our view that the global exportable milk surplus will continue to tighten in 2016.”

ASB senior rural economist Nathan Penny the

dairy price correction over August and now September has been both swift and large.

“For now, we expect prices to consolidate over coming auctions as markets will need to take a breath,” Mr Penny said.

“For example, the relatively flat prices across the different WMP contracts hints that that may now be the case.

However, we expect

Check us out Online NEWS MANAGEMENT STORIES MACHINERY REVIEWS AND MUCH MORE...

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

18 // OPINION RUMINATING

EDITORIAL

Righting past wrongs

MILKING IT...

Don’t sniff YOU MAY never have to give your milk the sniff test again. Millisecond Technologies has discovered it can make refrigerated milk last two months by rapidly heating and cooling it after pasteurisation.

The method -- ‘low temperature, short time’ -- could help combat the problem of food waste.

Scientists found that heating pasteurised milk to 10oC for one second eliminates 99% of bacteria that pasteurising didn’t kill.

This increased the milk’s shelf life to 63 days from the 14-35 days normal for pasteurised milk.

“The treatment takes out almost everything,” says Bruce Applegate, associate professor of food science at Purdue University and coauthor of the study.

Test participants found no differences in color, smell, taste or aftertaste between regular pasteurised milk and the newly treated milk.

Cow-powered fridges?

FARMERS ARE doing weird things to save the environment from flatulent cows Many farmers are capturing the fart gas (methane) before it spirals off into the clouds. In Argentina, some farmers are strapping backpacks onto cows, using the outerwear as a holding receptacle for the gas. According to the nation’s ministry of agribusiness, the backpacks can capture some of the 300L of methane each cow emits per day, enough to power a refrigerator for a day.

Glow your horn POLICE IN central India are sticking glow-in-the-dark strips on the horns of stray cattle to alert motorists to their presence at night.

Following a spate of crashes, traffic police in one district of Madhya Pradesh state have stuck orange radium reflective bands on the horns of 300 cows and bulls.

Stray cattle are a major traffic menace in India; hundreds of bovines roam free on roads.

So successful is the scheme, officers now plan to buy permanent radium paint to cover cows’ horns, as the plastic bands only last a few weeks. In 2015 at least 550 people were killed in India in stray-animal crashes.

photographs are subject to copyright and may not be reproduced without prior written

GOT SOMETHING ON YOUR MIND?

LETTER TO THE EDITOR EDITOR@DAIRYNEWSAUSTRALIA.COM.AU

brettm@dairynewsaustralia.com.au

Publishing Limited. All editorial copy and

DOES A full moon really induce labor in pregnant women? Scientists examining this old wives’ tale find conflicting evidence.

But a new study suggests some truth in this folklore, for dairy cows, at least.

Researchers at the University of Tokyo analysed the birth timing of 400 Holstein Friesian cows.

Reviewing the records of full-term spontaneous cow deliveries during a threeyear period, the researchers found birth frequency increased as the full moon neared. In fact, the number of births peaked at the near-full and full moon, the researchers say.

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.

Contact us by either post or email. Don’t forget to put your name and address. Note: Letters may be edited.

Advertising Brett Matthews

Dairy News Australia is published by RNG

Mooing at the moon

WHEN Murray Goulburn chair Phil Tracy penned an opinion piece for Melbourne’s Herald Sun newspaper in June, he acknowledged “we know we have a great deal of work to do to restore faith and rebuild trust”.

People are generally wary of those who say: ‘Trust me’.

Farmers are particularly wary of processors who dramatically slash their farmgate milk price, attempt to claw money back under the guise of a “Milk Supply Support Package (MSSP)”, and then announce a profit.

They are wary of platitudes, especially those that precede annual results that show an increase in profits from $21.2 million to $39.8 million; a $2 million salary for the man who led then left, Gary Helou, and a payment of $314,046 to the chairman.

The load carried for these events should be shared: board, management, staff, suppliers, unit trust shareholders.

Announcing a review of the MSSP is a step in the right direction.

Announcing it is scrapped altogether would have been better.

It’s one thing to talk about acknowledging the pain caused by recent events: it’s another to help ease it altogether.

It shows the board and executive had lost touch with its suppliers when it decided to introduce the MSSP back in April.

A simple pub test could have told you it was a bad idea.

It’s only now, after suppliers have expressed their outrage by moving to rival processors, and the corporate watchdog, the ACCC, has announced it is investigating that MG says it will reconsider the package.

MG supplier and incoming board nominee Lisa Dwyer is right when she says decisions need be made – and fast.

As it is, the MG AGM is shaping up to be the hottest ticket in town.

If they haven’t scrapped the MSSP by then, it will be a bun fight to get through the door.

0417.440.009

Editor Madeleine Brennan

0402.715.577

editor@dairynewsaustralia.com.au

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Web Cameron Wilson Published by RNG Publishing Ltd

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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 SEPTEMBER 2016

OPINION // 19

It’s time for a true co-op What has changed since the recent industry symposium?

Will the ACCC investigation find anything? How much damage will be LAST MONTH, the ABC Four Cordone by the time it reports in late 2017? ners program did a story on the recent And what happened the last time the crisis in the dairy industry.

ACCC was made aware of some of the A very important factor on is the activities of the processors sevcause of our current woes eral years ago, on issues such as was identified. price manipulation and preferenIt showed the early The first step is for the tial payment systems and confidays of the dairy industry producers to take back the agreements? Nothing. where truly farmer owned control of the industry by taking dentiality Is there another way forward? and controlled cooperaYes. tives were established to back control of how farm gate The first step is for the prosell their produce for the prices are determined. ducers to take back the control of highest possible farm gate the industry by taking back conprice with flow on benefits chain retailers. A couple of questions trol of how farm gate prices are deterfor the communities around them.

That was many years ago, when the arise out of this: Who bid for and signed mined.

That’s our responsibility to ourthe supply contracts? Do producers industry was strong.

Since then we have seen the erosion receive any more for the milk sold in selves, our families and communities.

How do we achieve this? one way or another of the true co-op branded products?

We stand together as one and take We are now getting to the core of that has created the problems we now what is fundamentally wrong with the back ownership of the element of see.

In more recent history this has been long-term sustainability of this great supply and create a National Milk Pool accelerated by deregulation of the dairy industry - the lack of involvement by that is truly owned and controlled by industry, the power of retailers and a the producers in determining farm gate farmers - equitably based on a co-op model of one farm one vote, where all shift by processors to corporate phi- prices.

Having been involved in dairy for suppliers are paid equally. losophies, including those pretending This would give producers the abilnearly 40 years, I’ll admit that I have to be co-op.

The blame for the dairy price crash been guilty of the attitude of head down ity to collectively bargain from a posiwas placed firmly at the feet of the bum up - stop whinging and just get on tion of power, not unlike what the processors and retailers currently do export market, one of the distractions with it.

Some may have felt protected by to the producers. from the underlying problems that are Remember, “a monopoly is only to the belief that they supplied a “farmer really impacting on farm gate prices. your advantage if you hold it”.

As national production continues owned and controlled” co-op.

Collective bargaining is already hapI’d ask those people to think honto decline, along with farm numbers, we now see around 70% of national estly how much effort has gone into pening, is already sanctioned by the dairy production consumed domesti- controlling their co-op? I understand ACCC and is not in breach of any trade cally, with a state such as Queensland that despite the recent disaster in the ideologies of government.

A national milk pool proposal was now around 120 million litres per Murray Goulburn co-op the recent put to the current Ag Minister Barnaby annum short of meeting its own supply AGM only had a 56% voter response.

NIGEL HICKS

requirements, with the shortfall being met from southern states.

Of equal interest is the increase of actual tonnages of imported dairy products to Australia.

Another lesser point of blame was the discount milk sales by the major

Nigel Hicks

Joyce soon after coming to government around three years ago and he rejected it.

Interestingly, in that meeting with the now shadow Ag Minister Joel Fitzgibbon a little over three years ago he seemed interested in the proposal.

It’s clear that, if we want change and long-term sustainability, that it’s up to

LETTER TO THE EDITOR

us to drive it and fight for what is right because no one else will.

• Nigel Hicks is a former dairy farmer and stood as an independent candidate for the seat of Murray in the recent federal election.

We welcome rigorous debate on the pages of Dairy News. Email editor@dairynewsaustralia.com.au

Industry to seek solutio ns at sympo sium PAGE 5 CROWDF

UNDING PU Locally sou SH rced, locally made PAG E7

There’s more to high chop corn HAVING an extensive background in corn silage production across Australia and New Zealand, I found your article on high-chop corn (Dairy News Australia, August edition, p.30) inadequately explained.

There are varieties that can be harvested at the normal chop heights and still have the quality that is required to make high production of milk.

There is also a process called Shredlage that rips the fibre apart to allow greater access by the rumen bacteria to the energy in the Neutral Digestable Fibre (NDF).

There are several of these units in harvesters in Australia now, and I expect more used.

This report would have benefited from the actual readings of the energy, starch, NDF and Acid Detergent Fibre (ADF) of the two cutting heights and the

background to the actual trial set up, to show the difference from the cows - which I suspect is only based on numerical feed test results and a nutritional program to estimate milk production.

I oppose the harvest time suggested, with half milk line, as the best way to increase the amount of starch in corn silage is to get the grain to black layer and use a hybrid with good staygreen to allow it to be pitted well.

Adjusting the processor on a chopper to ensure the kernals are smashed and the fibre can be ensiled well, leads to the dry matter content being closer to 38-42% where you will have full starch lay down in the kernel, as after all, it is the grain that is the most important part.

If we take it at half milk line, serious amounts of starch and

dry matter is being forgone, as for every day of growth up to black layer, there is anywhere up to 150 kg DM/day of yield being added, mostly in the form of starch.

The number I used in good corn silage was 40+% starch, low 30s NDF. I was able to achieve these numbers at normal cutting heights with different hybrids across many regions in Australia and New Zealand.

You can also manipulate the starch digestablity by selecting hybrids with dent x dent breeding or the best dent x flint (weighted heavily to the dent parentage).

And you also get more from the starch by leaving it for longer in the silage pit, as from as early as three months the starch to protein bonds start to break down, which is very important

TARGET HEALTH

MAIZE MARVEL

How benchmarking can reduce calf deaths PAGE 25 AUGUST,

2016 ISSUE

72 // ww w.d

airynewsau stralia.com. au

for the varieties that are New trials sh often used can boost pr ow cutting corn higher od need for grain uction and replace th e . PAGE 30-31 in Qld that tend to have more flint parentage.

The best period is after six months in the pit.

Ensuring ing the the plant had adequate nutrichopping heights, but tion, with particular regards to there are many other ways to Potassium, is directly involved improve corn silage without in fruiting, and moisture regulahaving to do that and leaving tion. yield in the paddocks (even As you can see, there are though it’s not wasted, as it can many ways to manipulate the go back to organic matter for quality of corn silage without the soil, or dry stock can graze leaving dry matter yield behind it, it just adds to the cost of the in the paddock. silage).

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

2

20 // AROUND THE REGIONS

Sub Tropical

1

Queensland farmers gather for conference 1.

Bill Fletcher, Qld Rural Adjustment Authority with Imbil farmer Jason Rozynski.

2.

QDO Councillor Matt Trace with Kulpi farmers Christine Clewley and Mark Fitch

3.

Mike and Glenda Henry, Hodgsonvale with David Roderick, Harrisville.

4.

Lester Handford, DHA Rural, Toowomba with Rowan Lambourne, DAF, Toowoomba.

5.

Bill Gulbransen, Mt Mee with Greg Brown and Vanessa Thomas, Riverina Stockfeeds.

6.

7.

QDO President Brian Tessmann with Steve Laracy.

3

4

Geoff Chambers from Heritage Seeds with Rosevale farmers Daniel Abraham and Craig Sellars.

6

7

5

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Dairy NewS AUSTRALIA september 2016

around the regions // 21

Western Australia

Bannister Downs continues growth strategy

The new automated dairy will include a café and a public viewing gallery.

frank smith

BANNISTER Downs

is one of the largest dairy operations in Australia and also one of the most rapidly expanding.

The Daubney family are one of the few group settlers in Western Australia who not only survived, but made good.

It took them 64 years and three generations to go from a 40 hectare block of karri in 1924 to the 2000ha cattle property, producing 10 million litres of milk per year, that they now run.

James and Edith Daubney, together with daughter Joan, overcame the isolation – the farm is 12km from Northcliffe and about 400km from Perth – and extremely hard work to build their farm.

The Daubneys had 11 children and became an integral part of the history of Northcliffe.

“The family did it hard,” Sue Daubney says.

The operation is now overseen by grandson Matthew who is primary responsible for managing the land, his wife Suzanne

Sue and Matt Daubney pictured at home.

Pictures: Frank Smith.

(Sue) who is managing director and has the cow portfolio.

Their major farming assets are excellent karri loam soil and plentiful rainfall – 1000 to 1200mm.

This rainfall allows them to run 1400 cows, mainly Holstein, Jerseys and Ayrshires, in milk plus supporting heifers and dry cows.

The long growing season allows them to calve and produce milk right through the year.

They recently bought a neighbouring property making about 2000ha of agricultural land owned or leased. In addition, they take milk from a neighbouring dairy farm.

Bannister Downs hit the headlines with the news that Gina Reinhart’s Hope Dairy was to partner them.

Sue says Reinhart’s investment will enable them to continue to grow.

“Mrs Reinhart takes a long term view. She understands agriculture and that we will probably run at loss for few years. She sees the bigger picture.’’

The investment will allow Bannister Downs to

increase milk production four-fold, buy more land and build a $20 million dollar processing plant on a Greenfield site closer to the town of Northcliffe.

“We have the opportunity to do something very special. It will be a completly new dairy. Our priority is to make it a good place to work. People should be proud of where they work.’’

Planning for the new facility (pictured) started in 2011.

It will consist of a modern robotic dairy including a voluntary milking set-up with fully automated processing to implement the world’s best practice of food safety, traceability and health management in their milking herd.

Cows will enter to be milked when they are ready, enticed by a treat of crushed lupin meal.

“Cows quickly learn what to do,” she says.

“It’s about building the best dairy complex that we can design.

“Our top priorities are food quality and safety.”

Although milking will

Matt Daubney pictured on the farm.

The farm is totally be fully automated there’ll in pasture with mainly still be plenty of jobs. perennial ryegrass, fodder The complex has a traoats and Kikuyu for ditional barn design to fit summer feed. in with the rural environ“We have moved away ment. It will include a café from silage because its and a public viewing galstrong flavour taints milk. lery. People can watch the operation through a sealed opening “It’s about building or via webcams. the best dairy “We want the complex that we set up to be as transparent as can design.” possible,’’ Sue What is obvious in milk says. of a single origin is not One key issue is animal noticable when milk from welfare, particularly the 50 herds are mixed for issue of bobby calves. sale,” she says.

The Daubney’s have “Another problem was always reared every calf. the large amount of plastic More recently a former generated by silage which employee has begun to is an environmental issue. take the bobby calves and We now buy lots of hay in. rear them on milk from “Since deregulation we Bannister Downs. talked about retailing own She aims to produce milk every year but never beef for slaughter at 18 did anything. months to two years. ‘’We realised we had to The present high price for beef makes this a viable operate on a large scale to succeed. Then in 2004 we operation. decided either to do it or “If you sign up as a to stop talking about it,” dairy farmer you have a said Sue. responsibility to rear the So in that year they calves,” Matt says. began construction of a They have also used sexed semen to get a larger packaging plant. The first milk was on the shelf by proportion of female August. calves.

Sue says they aimed to The Daubneys use AI on their cows, but run their capitalise on the quality of their milk – and it’s worked own bulls to follow up on with Bannister Downs’ any that fail to conceive.

milk winning Best Milk at the Royal Show and Best in WA for two years.

It also won awards at Dairy Industry Association of Australia National Awards.

Recently their products won one gold and four silver medals from five products entered at the Perth Royal Show.

Bannister Downs milk is pasteurised in batches at lower temperature and for a longer to provide better tasting milk.

“We believe raw milk produced on pasture all year tastes better,” Sue says. “Our milk comes straight from the cow and is on the shelf in less than 24 hours.”

They now have 500 outlets all over WA and their own distribution depot in East Victoria Park.

They also work to minimise the environmental impact of their activities, adopting Ecolean packaging system, imported from Sweden, which can be recycled, biodegrades in soil and sunlight and can be safely burnt in a wood stove or campfire.

Sue says they are the only milk producer in the Southern Hemisphere to adopt this packaging, but

they are also planning to sell milk in traditional glass bottles.

Their vehicle fleet runs on biodiesel and they have chosen to use recyclable cardboard cartons in preference to plastic milk crates to ship their products.

Many of their customers participate in a re-use system, where they collect and re-cycle the cartons.

All this takes a staff of 55 to 60 people, making Bannister Downs one of the largest employers in Northcliffe.

“Finding staff can be a problem,” says Sue. “But we no spare jobs at the moment.

“People shake their heads when they see we are in the middle of nowhere, but we are selling 27,000 litres/week and increasing.”

Bannister Dwns is also diversifying with a nonhomogenised milk for consumers who like the traditional cream forming on top, and has bought an ice cream company Gelati Azzurro in O’Connor, Perth.

“The Bannister Downs developments are very exciting for our people, for our community and our shire. It’s a positive thing all round.”

DAIRY NEWS AUSTRALIA SEPTEMBER 2016

22 // AROUND THE REGIONS

New South Wales Sunny Bega is future ready THE FUTURE Ready Expo was held in

Bega over two sunny days in late August.

Local farmers were treated to excellent trade displays from a range of companies covering machinery, AI, roofing, flooring, robotics, refrigeration, pasture and more.

Bega Cheese hosted and organised the event, the second in five years, with the idea that farmers in the region would not have to travel too far to get access to great advice about the latest best farm management techniques.

Senior environment and sustainability manager at Bega Cheese Melissa Balas said she was pleased with support of exhibitors. “’The feedback from our dairy farmer suppliers has been extremely positive,” Melissa said. “A common comment was they valued being able to talk in depth with so many exhibitors without feeling they were holding them up from talking to someone else.”

The event is held every three to five years.

it the Isla were keen to vis Juniper, Charlotte and nd. sta Bega Cheese

Allyson Hukins and Ashleigh Barnes, Bega Heritage Centre .

Matthew and sales manager Brett Dairy News Australia up. s mb thu two gave the expo

Sean Brogan from Moruya and Bodella farmer Robert Eder.

n editor Mady Brenna

Vic Graham Watt, from

Emerging Scientists Alexandra Green, Rac hel Rodney and Jo Ne wton.

South Australia

nd, Western Victoria, in Australia; Phil Bo Graeme Gillan, Holste .

HIS Peter Williams, AD

Western Victoria

s.

Engineering and Silo

Dave Colson and Ste ve Leys from Dairy She lters Australia.

Sup-Tropical

Farm tours explore Two job opportunities Unwind at Mid North Coast dinner pasture management at WestVic Dairy DAIRY SA is hosting a series of farm walks this month to

help farmers get the most out of pastures. The farm walks will include options in pasture management for the season ahead, and some decision making tools for growing more feed and silage in the Spring.

Greg Mitchell (central regions) with Laura Tweddle (SE) will lead the walks and include topics: Grazing strategies to maximise spring pasture growth and quality; Decision making when locking up paddocks and when to cut silage & hay; Saving costs with home grown feed; Spring management requirements with different forage species.

Full details at www.dairysa.com.au/news-events/tactics-pasture-plus.aspx

WESTVIC DAIRY, the regional development program for Dairy

Australia in south west Victoria, has two employment opportunities.

The first is as Regional Extension Officer (Workforce) and is based in Camperdown. The officer will be responsible for leading and supporting regional extension activities to dairy farmers in western Victoria to help build better workforce practices. The role is part-time (0.6 FTE) The second role is for Community Engagement Officer, who will be responsible for developing and managing WestVic Dairy’s external communications including newsletters, the website and social media.

The role will also support the regional manager and other staff in event management, sponsorship and media relations. The role is parttime (0.4 - 0.6 FTE) The position is for a limited term of 3-6 months and is available from the end of October 2016. Visit www.westvicdairy. com.au/AboutWestVicDairy/EmploymentOpportunities.aspx

FARMERS ARE invited to take some time out and ‘unwind’ with

friends and colleagues in the dairy industry over a social meal at the Subtropical Dairy Mid North Coast Dairy Farmer Dinner later this month.

Guest speaker is Lyn Sykes, who will provide a practical, entertaining and inspiring insight into succession planning. Lyn is an experienced communication specialist and public speaker, renowned throughout Australia for her pioneering and innovative approach to facilitating the process of transferring the family farm.

Tickets $25/head or complimentary to dairy farmers and their families. September 29 at 7:00 pm - 10:30 pm at Cedar Bar and Restaurant, 8 Church Street, Bellingen, NSW RSVP katina.trout@dairyinfo.biz Or visit dairyinfobiz.com.au

DAIRY NEWS AUSTRALIA SEPTEMBER 2016

AROUND THE REGIONS // 23

Gippsland

Murray Dairy Conference and business forum celebrates 20 years

Prizes, animals, gumboot throwing and more THE SOUTH

Gippsland Dairy Expo is on at the Korumburra Showgrounds again this month, hosted by the Strzelecki Lions Club.

Entry is free.

The Expo, on Wednesday, September 28 and Thursday, September 29 from 9am each day, will showcase the latest in dairy innovation and is supported by a community of volunteers.

This year will also see the inaugural gumboot throwing competition, otherwise known as the Golden Tosser Award.

Great prizes are available.

The Korumburra Rotary Club is overseeing the Kids Activity Pavilion which this year will include some farm animal pens.

Poowong Kindergarten will be

catering for all attendees, and the Strzelecki Lions Club has various other community volunteers who assist with the event each year.

Farm consultant Matt Harms will be hosting a session on Wednesday at 11am which will explore how a number of dairy businesses are managing the current downturn, as well as how they have weathered previous tight times.

Devondale Murray Goulburn and MG Trading have been the major sponsor of the expo for 16 years and once again they will have a hospitality marquee at the expo.

Gold sponsors include Rabobank, Reid Stockfeeds, South Gippsland Shire Council, GippsDairy and Dairy Australia.

Don’t miss out on your Udder Truth Showbag sponsored by South East Organic Fertiliser for purchase at $2 at the gate.

This year at the Devondale Murray Goulburn and Reid Stockfeeds breakfast (Thursday at 8.30am) attendees will hear from guest speaker Beau Vernon whose life changed forever after a game of Aussie rules football left him with a C5-C6 quadriplegia. He was 23.

Beau will be talking about getting on and living life no matter what the challenges one may face.

To book rsvp to Louise Bruce, louise.bruce@mgc. com.au 03 5662 3522 or Angie Brister, abrister@ reidstock.com.au 03 5633 2222. Places are limited.

Visit dairyexpo.org.au

MURRAY DAIRY is set to celebrate 20 years of operations with a Business Forum next month.

The organisation, together with a farmer steering committee, has developed the annual one-day conference to focus on celebrating change and recognise the need for continual evolution of the dairy industry.

In response to the ever-changing operating environment which is increasingly characterised by climate and market volatility, more complex flexible feeding systems are required.

Chairman of Murray Dairy, Rick Cross, said: “We acknowledge the challenges farmers are facing at the moment and that a number of people are thinking about how to bring their businesses through the short term as well as what it will look like in the future.

“That is why we’ve created an agenda for the day focused on change.

“Later in the day we will also be focusing on research and technology from the Dairy Futures CRC and other research institutions that give us insight into what tools dairy farms might have available to them in the future.”

Tasmania Discussion groups help develop the

industry and boost on-farm profit DAIRY TAS is encouraging farmers

to consider establishing or joining local dairy discussion groups.

Funding is available for both existing and new groups. Up to $3,000

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With a theme of “20 years back; 20 years forward”, there will be a mix of celebrating past achievements, and looking to the future with exciting prospects of new developments.

The celebrating of the last 20 years of dairy project development and research, will look at what has been brought to dairy farms in the region through wide and varied seasonal conditions in the Murray Dairy Region, Kevin Sheedy over the last 20 years.

Alexandra Gartmann, managing culture and life.

“We are looking forward to the director and chief executive of Rural Bank and Rural Finance, will open Celebration Forum Dinner in the proceedings for the forum, sharing evening, which will feature past her experiences, not only from her and present personalities that have current banking role, but also from brought so much to the industry in the her time leading the Birchip Cropping region over this time,” said Mr Cross.

The event is open to all dairy Group for 10 years, and the FRRR - an organisation focused on building the farmers in the region as a day of economic and social strength of rural learning and celebration and is being held on Thursday, October 20 at Australia.

Kevin Sheedy will be speaking at Barooga Golf Club.

Enquiries can be made through the Forum on the many changes that he has seen and managed through his Murray Dairy on (03) 5833 5312 or visit extraordinary experiences in football, www.muraydairy.com.au

just look for the arrow!

per group per year is available to assist with the costs of: forming a new group; employing a facilitator; attending a group tour; engaging a guest speaker; taking part in a group

training course.

Funding is also available for oneoff events. For more information visit dairytas.com.au

DAIRY NEWS AUSTRALIA SEPTEMBER 2016

24 // MANAGEMENT

Better microbes, fitter calves WORK BY scientists at AgResearch is providing a better understanding of the complexities of the digestive tract of ruminants and could help lead to more productive, efficient and healthy animals.

Ruminants have evolved an efficient digestive system which relies on a complex microbial community to break down and ferment plant fibre and provide products and nutrients for growth.

However, Dr Sinead Leahy from the rumen microbiology team at Grasslands, Palmerston North, New Zealand, says little is still known about how the complex relationship between the microbes and the gastro-intestinal tract (GIT) in young ruminants develops.

The result of the latest step in this work is now

published in Scientific Reports. The paper looked at a subset of microbes – Bifidobacterium, a microbe which dominates the GIT when a neonate is fed a milk diet.

These microbes are considered highly beneficial and the paper looked in detail at how they may be adapting and interacting with the calf GIT. “Current rearing strategies for dairy and dairybeef calves typically disrupt ‘mother nature’s’ coordinated functional codevelopment of the microbial community and the calf because it is removed from its mother at a very early age”, Dr Leahy said.

“Of course, it’s not possible to keep the calves with the mum under a dairying system, but it’s certainly different from what is recommended

for humans, from a nutritional point of view.”

Researchers were interested in seeing what the impact on microbes would be, under those calf rearing systems, starting with Bifidobacterium.

“In humans, these microbes have a versatile and important role in infant gut development. They do a lot of useful things, including preventing the establishment of pathogens and production of beneficial metabolic substrates,” Dr Leahy said.

“Like their human counterparts, young ruminants are often susceptible to microbial pathogens which can cause diarrheal disease (scouring) during their first months of life which can severely affect growth. The idea that Bifidobacterium could be

used to benefit young livestock during a time when the risks of morbidity and mortality are high is attractive.”

The research showed that Bifidobacterium can be easily isolated from young calves and three species of Bifidobacterium had their genomes sequenced to get a clearer idea of what they are and what they do in the GIT. At the US Department of Energy Joint Genome Institute the genomes were sequenced through the Hungate1000 project, a New Zealand-led initiative to generate a reference set of rumen microbial genome sequences. Using the genomes the researchers were able to predict the genetic strategies these microbes use for carbohydrate metabolism and host

Researchers Eric Altermann (left), Adrian Cookson and Sinead Leahy.

colonisation and persistence.

For the first time, this provides insight into how these important microbes have adapted to the calf GIT. Dr Leahy says this raises more questions.

“In instances where

young animals can’t be fed their mothers’ milk is there a way we can replenish their digestive tract with these beneficial microbes? For example could they be used with calf replacement formulas?”

The long-term purpose

of the research is to identify beneficial microbes important as a neonate for protection against disease and important for normal metabolic and immune development, normal maturation of which are likely to be key to the long-term productivity of the animal.

Excellence earns an extra 20c/kgMS PETER BURKE

NEW ZEALAND farmers supplying Maori-owned dairy company Miraka stand to get a bonus of 20c/kgMS this season if they adhere to an incentive scheme newly introduced by the company.

Te Ara Miraka Farm Excellence is a scheme Miraka chief executive Richard Wyeth says is designed to make sure its suppliers are world class and run businesses that are resilient.

He says the scheme has five pillars: people, environment, animal welfare, milk quality and prosperity. Within these are 31 criteria of which 13 are mandatory.

These in turn are extrapolated out into a

points system – all told 100.

“If they pass the mandatory ones they will get some sort of incentive, but if they get the full 100 points they will get the extra 20c/kgMS at the end of the season,” Mr Wyeth said. “The scheme runs over 12 months so it’s over the entire season, from now to next June, after which payments will be made.”

The scheme is open to all suppliers and is voluntary and farmers may decide whether or not to take part. Miraka has 107 suppliers and those who join the scheme will be visited regularly by an external auditor who will track their progress.

Among the mandatory criteria is one relating to health and safety. It requires a farm to have a health and safety policy

Richard Wyeth, Miraka.

for all staff and visitors.

“It’s setting the benchmarks that ensure our farmers are the best in the class. It’s Miraka showing the way we

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support and encourage a culture of excellence across the entire supply chain. It means we can talk to our customers and tell them our farmers are world class and that adds to our story as well,” Mr Wyeth said.

Aspects of Te Ara Miraka are not unlike the Irish farming excellence scheme Origen Green which incentivises farmers who comply with a range of criteria, with emphasis on the environment. Mr Wyeth said there are some similarities to Origen Green, but the criteria are different and much aligned to Miraka’s corporate values which have a special link to whanau (Maori family).

“Ours are a bit different in that we are looking at the environment, people....

For example we want to make sure farmers have proper timesheets for their staff and proper contracts in place.”

The idea of Te Ara Miraka was discussed for some time. The scheme effectively sees farmers having a stake in the Miraka culture.

Mr Wyeth says farmer compliance with the scheme will add value to the Miraka brand, and with the company payout range of $4.00-$4.30/kgMS an extra 20 cents is good incentive.

“We have been out talking to farmers and some were initially a bit apprehensive. But they realise in the current tough environment the prospect of an additional payment will strengthen the resilience of their businesses,” he said.

DAIRY NEWS AUSTRALIA SEPTEMBER 2016

MANAGEMENT // 25

Frozen embryo technology boosts pregnancy rates embryos for consistent 50% pregnancy rates and better.”

Simon said the ability NEW FROZEN embryo to rapidly freeze embryos technology could was a phenomenal revolutionise dairy change. breeding techniques.

“Previously only being The newly introduced able to transfer fresh process called embryos meant we had to vitrification uses ultraproduce excess embryos rapid cooling of embryos to fill up numbers,” he produced by IVF to -196° said.

Celsius.

“We’d throw away 30% This enables them of embryos, which is huge to be stockpiled and waste of resources and transferred anywhere and genetics. at any time for use when “It means that convenient.

“Rather than wait unlike flushing The process embryos, IVF has now been for an animal to hit a much developed to where 18 months before we allows better utilisation it is consistently can start to breed of genetics in achieving from them, we can that there are no pregnancy rates of hormones used to 50% or more. start producing synchronise.”

Simon Walton, embryos at 10 Simon said that from the Australian months. We could meant embryos Reproductive just about have could be produced Technologies from heifers before (ART) IVF, says progeny on the they reach puberty, this will be a “game ground by the time resulting in a changer” for dairy that heifer is ready genetic gain. farmers and other to join.”

“Rather than producers.” wait for an animal “I’ve had some to hit 18 months of our clients tell before we can start to Do Van Huong have been me it’s been the single breed from them, we can trying to perfect the biggest increase in IVF start producing embryos system for the past eight technology since its at 10 months. We could years. inception,” Simon said. just about have progeny “We started to see The process has been on the ground by the time good results after 12-18 developed over the past that heifer is ready to months but wanted to eight years and stems join.” get more data behind us from earlier human IVF The new system will before we could announce work. allow dairy farmers to “The pregnancy rate in things are working really produce embryos during well,” Simon said. human IVFs from frozen the non-breeding season, “We’ve now embryos was awful, but freeze them, store transferred hundreds of they changed to a new RICK BAYNE

method of freezing called vitrification, which uses ultra-rapid freezing, and it all changed,” Simon said.

The pregnancy rate of cattle from embryos using the traditional slow freeze method was just as bad, usually less than 25% success.

“I was fairly confident using the vitrification method was the right way to go about freezing the cattle embryos,” he said.

ART along with visiting Vietnamese researcher

them and transfer them en-masse during the breeding season to match milk demands.

ART has secured a contract in Vietnam to produce 10,000 embryos.

The process would be used to improve the genetics of the existing Vietnamese dairy herd.

It would also be used to expand the genetics of live beef cattle imports from Australia to Vietnam.

Simon predicted this method of freezing embryos will replace the traditional method.

“It’s been taken up quite strongly already.”

S O U T H

Simon Walton working in the lab.

PHOTO: 7 NEWS

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

26 // ANIMAL HEALTH

When solitary confinement of a calf is a must IN AUSTRALIA the majority of dairy are transmitted in contaminated faeces calves are reared in groups, often from and/or respiratory secretions.

A calf showing signs of sickness will birth.

Group size can vary from a small be the source of infection for other group of five calves to large groups of calves in the same pen.

This is the “clinical calf ”, meaning 40-50 calves.

Calves are mostly reared in a desig- it is outwardly exhibiting signs of the disease. nated shed which is either This may be the purpose-built or a shed‘tip of iceberg’ in conversion. that other calves They may be housed within the pen are for a limited period or also infected but until they are weaned. are not showing Individual housing outward signs of the systems do exist but they disease. are often used for a conOne of two scefined period of one to two APIAM ANIMAL narios will follow weeks, before calves are HEALTH with these ‘subclinmoved to a group pen.

GEMMA CHUCK ical calves’.

Hutches have been The first is that used infrequently comthe infection progresses until they also pared to group housing systems.

There are some disadvantages of start to exhibit signs of clinical disease.

The infection may spread such that group housing: Co-mingling of calves of different all the calves in the pen are now sick.

The second scenario is that the ages and immunity, allowing easy transmission of respiratory and scour-caus- infection does not progress and there are no apparent signs of illness: calves ing pathogens High competition for milk feed due remain apparently healthy.

So what to do with the clinically sick to hierarchy and dominance within the calves if there is more than one in the group Increased stress associated with pen?

Early detection and isolation of sick inconsistent nutrition and hierarchical pressures can suppress immunity and calves is essential to help control the spread of infection. increase the risk of morbidity.

This is useful when the start of the However, group housed calves develop their own immune system disease outbreak is slow and mild.

However, sometimes this is not posmore quickly when compared to indisible as multiple calves may be showing vidually housed calves.

Group-reared calves are also smarter signs of sickness at the same time.

As a rule of thumb, if more than but whether this is considered to be 30-40% of calves within the pen are advantageous remains to be seen! showing signs of disease, it is best to To move or not to move?

Many of the diseases affecting calves leave them all in the original pen as the

iDAIRY

risk of infection to the remaining calves is high.

The treatment of clinical and subclinical calves within a pen should be sought from your veterinarian and will depend on the specific diseases involved.

The isolation protocol When sick calves are identified early they should be removed from their pen immediately and placed into an isolation pen.

This should be an individual pen, to only house the clinically affected calf.

Ideally it should be in a different airspace to the healthy calves.

This helps prevent the spread of infection and gives the sick calf a break from the healthy calves.

Sick animals spend long periods lying down and if left in their original pen can become bullied and hassled by the unaffected calves.

The pen partitions should be an easily-cleaned solid material such as corrugated iron, tin or corflute to at least 1.2m high, which prevents nose-to-nose contact between pens.

Bedding should be easily removed and changed between calves.

Straw can make an ideal bedding for this purpose as it is warm and absorbent.

Ad-lib fresh water should be located at the front of each pen, along with calf starter.

Hutches have been successfully used as isolation pens as they provide shelter, can be readily moved to a new site and are easily cleaned.

When the sick calf has fully recovered, it is advisable to put it back in its original pen.

Do not be tempted to put these animals in with younger, unaffected calves due to their likely smaller body size.

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Even after they have recovered, they can be the source of infection for other calves and prolong the course of disease within a shed.

Designated sick-calf feeding equipment (buckets, oesophageal feeders) is required and sick calves should always be fed last, after the healthy calves.

Handlers should wear disposable gloves at all times as some of the diseases in young calves can be transmissible to humans.

Designated aprons and foot-bath disinfectants are also recommended.

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

ANIMAL HEALTH // 27

Wet weather a mastitis trigger but not a cause ROD DYSON, DAIRY FOCUS

SOME OF our dairy

regions have experienced a wet winter for the first time in a number of years, and many farms have found it a test of their patience as well as a test of their infrastructure and systems.

One of the issues associated with the wet weather has been an increase in milk quality problems in terms of both mastitis and Bactoscan results on some farms.

As the spring calving winds down, it is an ideal opportunity for each farm to consider that calving period in terms of milk quality outcomes.

How many cases of mastitis occurred during that calving period? How many is too many?

As usual, the Countdown Farm Guidelines give us a good trigger point to work with: “Your herd has a significant problem if there are more than five clinical cases per 100 cows in the first two weeks of lactation, or two clinical cases per 100 cows in subsequent months of lactation.”

Given that this trigger point indicates a “significant problem”, then farms should usually be aiming to be well below this point.

“But you have to expect more mastitis in wet conditions” is a common response, but in fact, the Countdown guideline does not give a different trigger point for wet weather.

If your herd exceeded the trigger point for mastitis at calving, now is a very good time to reflect on that calving period while it is still fresh in your mind to establish if there is something that might have reduced the risk of that happening.

If you were “expecting” more mastitis due to the likelihood of wet conditions, are there things that could have been done to reduce the risk so that you didn’t have to “accept” more mastitis in those conditions?

A useful analogy might be to consider driving a car in wet weather.

Generally we modify

our driving in wet weather to reduce the risk. For example, we might activate the windscreen wipers, slow down, and allow a greater braking distance.

But there are also things that we could have done before the wet weather.

We might have replaced the worn windscreen wiper blades, checked that the tyres had adequate tread on them for wet conditions, and made sure there was water and detergent in the windscreen washers.

A good way to think of the recent calving period is in terms of three phases for the calving cows – firstly, the springing cows leading up to calving, secondly, the actual calving event and introduction of the calved cows into the milking shed, and thirdly, the management of the fresh cows for the first 14 days after calving.

Then think of what might have been done in each of those phases before the wet weather to prepare, and what might have been done during that calving period to reduce the risk.

Given that most of the mastitis in this calving period is likely to have been environmentally sourced (it is best to have some milk cultures to confirm this), perhaps firstly consider factors that reduce the level of contamination of teats with mud and faeces – for example, were there enough areas available for calving cows to move onto after the existing area had pugged up?

If you had a calving pad, did that become excessively contaminated?

Then think of factors that keep the teat canal sealed until the point of calving – were cows dripping milk prior to calving?

Was udder oedema (“flag”) a problem in heifers and/ or cows?

Consider the strategies for calving and calved cows - were freshly calved cows brought into the dairy as soon as possible?

Did you have a wash and dry strategy for teats on these fresh cows during the wet weather?

Finally, think about the colostrum cows – were they managed as a sepa-

rate herd?

If so, were they kept in clean areas, or exposed to heavily contaminated areas?

Were all cows being checked each milking to detect and treat clinical cases as early as possible?

If your farm reached or

Wet weather does not have to mean more mastitis.

PHOTO: JEANETTE SEVERS.

exceeded the Countdown trigger point during this recent spring calving, then the best outcome of this reflection would be a strategy for future calving periods that ensures that if you “expect” wet conditions, you don’t have to “accept” more mastitis.

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

28 // ABV’s

Top marks for young calf show value of genomic testing A PIECE of good timing has helped Emu Banks Christmas Geri to stand out in this year’s ABV rankings.

Bred and owned by Bryan and Jo Dickson from Terang in south-west Victoria, Emu Banks Christmas Geri is one of the youngest calves to feature on the new list.

She has been ranked in the top 200 Holstein females in Australia with a BPI of 238.

Although only 12 weeks old, her genomic results give as much information as a cow with eight lactations worth of data.

Mr Dickson said she wasn’t necessarily a special calf; her ranking was just a matter of

good timing.

“She’s not our best calf, she’s just the highest youngest calf and became one of the youngest calves on the list in the ABV release,” he said.

“The top calves would be around 300 so she’s nowhere near the top in the country; she’s just the youngest.”

Mr Dickson said Emu Banks Christmas Geri had been tested within a day or two of birth.

“I tested when she was one or two days old to meet the cutoff date to get the DNA tests away,” he said.

“I didn’t know it was a good cow; it was just one that came up reasonably high and became one of the youngest on the list.

That’s all that makes her special; it’s more of a timing thing.”

Mr Dickson said she was just 12 weeks old but the DNA has the reliability of seven or eight lactations.

“We’ve not had one at 12 weeks to reach that level but we’ve had them at 16 weeks,” he said.

Mr Dickson said the tests were valuable for improving his herd.

“That’s why I do the numbers,” he said. “I’m culling the lower ones.

“Because of the milk price we’ve cut back to about 850, but we’re still probably the biggest herd in the top 10 herds in Australia.”

Bryan Dickson pictured with some of his calves.

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across Australia will be put under the microscope to prove the link between genetic merit of animals and on-farm performance.

Speaking to Dairy News Australia as part of last month’s Future Ready Expo in Bega, research scientist Dr Jo Newton said the Improving Herds project will ensure the science behind genetics is backed up by real-world application. ‘’It’s one thing to do genetic research in an office building somewhere, but it’s another to actually take what you’ve learned and translate it into real on-farm applications and results,” Dr Newton, from the Victorian Department of Economic Development, Jobs, Transport and Resources (DEDJTR) said.

The project has genomic tested each focus farms’ rising two year old heifers, totalling more than 2500.

“So now we already have information about the genetic merit of these animals before we know their lactation, their susceptibility to disease, etc and through the lifetime of the project we will be able to follow these cows, through their first lactation, through their second lactation and see how that

performance in the dairy translates back to their predicted genetic merit,” Dr Newton said.

“We’re looking to demonstrate the value that better data recording and high genetic merit can contribute to farmer profit.”

Previous research has confirmed high genetic merit cows are more profitable. ‘’The focus farm model enables the information to be gathered at various regions and various types of farm systems.’’

Jo Newton Dr Newton said environmental factors – such as mastitis – are accounted for within the study.

“One of the advantages of looking across some many different focus farms is that we can look within a herd.

“And when you are comparing animals within the same herd, they are subject to the same management routines and environmental conditions.”

The project has been developed by the Gardiner Foundation, lead

by DEDJTR and supported by Dairy Australia, ADHIS, National Herd Improvement Association and Holstein Australia.

For updates email: improvingherds@ gardinerfoundation.comau

Dairy NewS AUSTRALIA september 2016

ABVs // 29

Rengaw bulls rise again as genomic sires lift THE August release

of the Australian Breeding Values saw a number movements and changes since its April release, as well as some of stayers cementing their position up the top of the rankings.

The August edition is larger, as more companies have increased their genomic testing activity since April 2016.

Now, two thirds of the guide is made up of genomic sires for Holstein and Jersey breeds compared to about 50% in April.

The Australian Dairy Herd Improvement Scheme (ADHIS) team say farmers can afford to be choosy when finding bulls that meet their breeding objectives and budget from the Good Bulls Guide.

Bull highlights THE new No 1 available proven bull is Geemcee, with a BPI of 336.

Geemcee (Rengaw Manoman Hummer-Et) consolidated his claim as the number one Holstein sire in the breed with an impressive 40 point lift in his BPI rating, placing him 30 points ahead of his nearest genetic rival.

Improved fertility, type ratings, protein yield and

cell count were the factors that contributed to his lift, according to Genetics Australia.

Kingtut (Rengaw Redmaw KB 9975-ET) has moved in as the new number 1 genomic sire with a BPI of 306.

Both Geemcee and Kingtut are Regnaw Bulls from George Wagner from Winnaleah in north-east Tasmania.

“Geemcee is no fluke,’’ says Genetics Australia general manager Anthony Shelly. “His two full brothers Wrangler and Challenger prove that.

“Geemcee, Wrangler and Challenger are clearly three of the best bulls available today,’’ he said.

“Not only did they start with solid genomic ratings, but they have their own daughter performance which has verified genomic rating and gives us greater confidence in the potential of these bulls to deliver the sort of cow that Australian farmers demand.

“It’s a great testament to Australian breeders that the top three spots on the daughter proven BPI all stand in Australia,’’ Anthony said.

“In fact, seven of

the top 10 daughter BPI proven bulls are all Australian bred and all are available from Genetics Australia.’’

ABS Australia carries seven of the top 10 available Holstein genomic bulls – the same number as the April release.

“Having seven in the top 10 genomic sires in the most recent proof run is a very rewarding outcome for Australian dairy farmers and for ABS,” said ABS national sales manager, Paul Quinlan.

“We have been working on a plan to ensure our genomic and proven sires convert exceptionally well to Australian dairy systems as well as performing strongly in the US TPI rankings,” Paul said.

In the Jerseys, the top bull remains Elton (Cairnbrae Elton from Carsons) while Seahorse (Araluen Park Seahorse) from Trevor Saunders and Anthea Day has taken the lead as the top genomic BPI bull.

“If there was ever a Jersey bull to demonstrate his ability to stay at number one it is Elton,’’ Paul said.

Number 1 BPI Holstein Geemcee (Rengaw Manoman Hummer).

“He is turning out to be the Michael Phelps of the Jersey breed and is the number one bull again with an imposing 318 BPI.’’ Cow highlights The top Holstein cow in the August release is Rengaw Sunplan Jazz Et with a very high BPI of 344, but the gap is closing between her and the number two cow, Hindlee Delsanto Loyalty 13134 from Lillicos, Tasmania.

George Wagner again cements his position

as the top herd in this release.

Emu Banks Christmas Geri, bred and owned by Bryan and Jo Dickson, Terang, Victoria, is one of the youngest calves on the list, putting her in the top 200 Holstein females in Australia (see page 28.)

In the Jerserys, the top genomic heifer is a Spring 15 daughter of Navarian bred by Con and Michele Glennen and family.

There are now five heifers in the exclusive

300+ BPI club compared to one in April.

Daryl Hoey from Katunga, Victoria, remains as the top Jersey herd.

In the Aussie Reds, Arbobama leads the proven team with a solid and balanced proof.

“He continues to be a popular choice for manay Aussie Red breeders, closely followed by veteran and internationally popular Aussie red Arbbonjovi.

“The Aussie Red young bull team has

never been stronger with VFoske, Arbglacier and Arbdairyweek, both from the Beaulands herd of Ron and Sam Graham, of Nowra, and Arbspring, a son of Tossiko, also bred by the Grahams,” Anthony Shelly said.

In August, ABS Australia began bringing the top range of Norwegian Red bulls to Australia through a new partnership with Geno the world leader in Norwegian Red bovine genetics.

FARMERS are being encouraged to look for good deals that include high performing bulls from the Good Bulls Guide.

Michelle Axford from the Australian Dairy Herd Improvement Scheme (ADHIS) said that high genetic merit bulls did not necessarily cost more but their daughters generate more profit.

ADHIS analysed bull catalogues from 2015, including the prices and Balanced Performance Index (BPI) of 421 Holstein bulls.

The difference in genetic merit between the best bull (BPI 315) and the worst (BPI -72) bull was $387 profit/cow/year. However, there was very little relationship between a bull’s Balanced Performance Index – BPI and price (see graph).

“Farm budgets are stretched this season but breeding profitable replacements is still important,’’ Michelle said. ‘’As there are Good Bulls to meet every budget there’s no need to significantly compromise the value of your herd’s replacement heifers.’

“The best semen prices are often offered through package deals and a variety of packages have been tailored to this season’s milk prices. When you review packages, choose one that includes Good Bulls that meet the breeding objectives for your herd.”

The Good Bulls App is an easy way to look up the details of individual bulls. Users should have updated the app after August 15 to ensure the data is up to date.

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

30 // SPRING PASTURES

Pasture trials put local knowledge in farmer hands MADELEINE BRENNAN

TWO NEW pasture

trials being conducted in the Bega Valley will provide farmers with local information on the best performing pasture types as well as best time to sow.

The first trial will measure variations in yield from autumn pasture crops.

Four Italian ryegrass varieties and three forage oats were planted once a month between February and June.

Local agronomists helped determine which varieties would be used based on their experience of what is used locally.

The second trial is part

of a nation-wide three-year study developed by the Australian Seed Federation.

A range of crops are being tested nationally but the Bega trial is focussed on perennial ryegrass, and will look at how well the ryegrass establishes, as well as yield.

Both studies are being overseen by the Far South Coast Dairy Development Group’s technical officer Kym Revington who told Dairy News it was important farmers had access to independent and locally-relevant information about the performance of a range of pasture varieties. ‘’It puts the power back in the farmers’ hands and allows them to make

unbiased decisions rather than relying on a sales rep,” he said. ‘’Which is not to say the reps aren’t honest, but it’s nice to know it’s independent information that you are getting.’’

The ASF trial will put a range of next generation varieties to the test.

“Farmers need to know new varieties coming through, and keep up to date,’’ he said. ‘’Stuff that was done 10 years ago, or more, loses its relevance. There’s a whole new generation of ryegrass varieties and oat varieties and they just haven’t been tested locally. ‘’So the more of this information we can get out to the local farmers

the more profitable their business can become.’’

The trial sites are not irrigated. ‘’It’s all dryland pasture as well so it’s at the whims of the weather and

everything else. Because what makes the difference between a good season and an average season is how well the dryland pasture goes.’’

Field days will be held

at the trial sites for farmers to visit once some of the results are verified.

“What we are trying to do is provide relevant local information to farmers.

There’s no use to trial

something that no-one’s using.”

Kym said he hoped to be able to do a similar trial of forage crops over summer, depending on funding availability.

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

SPRING PASTURES // 31

Research aids Lucerne development AUSTRALIAN-OWNED FORAGE seed company,

Pasture Genetics, incorporated the Pioneer Hi-Bred Australia Lucerne breeding program into its business in 2006.

This extended the base germplasm for selections to now incorporate the entire dormancy range of products.

The existing Pioneer program had a very highly regarded range of current market leading cultivars at that time.

In 2015 Pasture Genetics completed the transition of the NSW DPI Lucerne program into this program as well.

Once again, the backbone of genetics that was acquired with this acquisition was very broad.

In addition to the main-

stay Lucerne germplasm came the side selection program with the Acid Tolerance breeding program.

This portfolio has already made significant investment in new cultivar selection with Lucerne parent lines that demonstrated a significant ability to tolerate soil types with high levels of acidity and aluminum.

These advancements are continuing and in the near future will see a significant range of products, that will open up new opportunities for farmers to utilise soil types that were not previously selected as Lucerne ground.

The Pasture Genetics Research and Development Program is now a threepronged program utilising Australian bred germplasm

from many different sectors.

The continuation of Pasture Genetics’ investment in the Lucerne sector has been demonstrated with the eight years of animal performance trials looking at true in-paddock animal weight gain results.

The ability to select plant cultivars based on RFV (relative feed values) has been demonstrated with higher animal performance and better on-

farm returns to farmers.

In 2015 Lucerne Australia visited the Penfield Research Station to view the facilities and view first hand the trialing program.

The long term grazing selection trial was a big talking point at this tour.

This trial is now going into its fifth year, and is still providing some excellent results with the new GTL60 selection.

This product and other selections, have withstood continual rotational grazing from sheep over the five years with a high percentage of plant carriage.

The sites are constantly monitoring the performance of Pasture Genetics current stable of products and new products under development in all areas of Australia.

(Source: Pasture Genetics)

Penfield Research and Development Centre located at Penfield, SA.

Clover-based pasture: have we lost our way?

A KEYNOTE speaker at the

Grassland Society of Southern Australia’s annual conference hopes to get producers back on track to make good quality pastures.

Dr Doug Edmeades (pictured), the managing director of AgKnowledge in New Zealand, says when it comes to legume-based pastures “we have lost the way”.

“We’ve lost our experience and knowledge of how to grow good clover-based pastures,” Dr Edmeades said.

Dr Edmeades told the conference in Hamilton that many producers could no longer picture good quality pasture, that fertiliser wasn’t always being used properly and that “pseudo-science” was confusing farmers.

He said the ideal mix was 30-40% clover and the balance being any productive grass.

“Clover is the essential component in our low-cost pastoral system,” he said.

“There are various reasons why we lost our way. We’re probably spending enough on fertiliser but not with the right balance.

“The science is there and there are calibrated soil tests and clover-only tests to interpret. This is not new technology; it’s already there, it’s just a matter of getting the data appropriately interpreted.”

Dr Edmeades said the lack of fertiliser demonstration trials had contributed to the loss of knowledge.

“Years ago we used to do a lot of fertiliser trials on pastures and farmers loved to look at them, so they knew what a good pasture looked like. They had the mental image but we haven’t done those trials in 30 years so they’ve lost that image.”

He also spoke strongly that the voice of science should be asserted and that “pseudo-science” and ineffective fertilisers were undermining the confidence of farmers.

Dr Edmeades said speaking to groups such as the Grassland Society was rewarding.

More than 220 people attended the society’s 57th annual conference in Hamilton, Victoria. (Source: Grassland Society of Southern Australia)

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

32 // MACHINERY & PRODUCTS

Autonomous tractor offers a vision of the future UNVEILED ON August 30 at the Farm

Progress Show in the United States, the New Holland NHDrive concept autonomous tractor is a driverless machine which can perform a wide range of farming tasks day and night.

It is also able to reach the field autonomously via private on-farm tracks, to work together with other autonomous or traditional operator controlled machines and courtesy of the cab it can still be driven by an operator ensuring maximum flexibility.

At first glance, the T8 Blue Power tractor on display at the Farm Progress Show may have looked like any other standard tractor to the many visitors who packed New Holland’s stand at the show, the annual outdoor farming machinery show that is held in Boone, Iowa (USA).

But once the first images of the video dedicated to the tractor and its incredible operational capacities appeared on the screen, everyone understood that they were witnessing a glimpse into the future of farming, one that could feature fully autonomous machinery: something which could redefine the agriculture of tomorrow.

Developed by CNH Industrial in collaboration with its long-standing technology provider Autonomous Solutions Incorporated, (ASI) a Utah-based company that is the industry leader in offroad autonomous solutions, the New Holland NHDrive autonomous tractor is an unmanned vehicle that is fully autonomous and can be monitored and

controlled via a desktop computer or via a portable tablet interface.

This enables farmers to access tractor and implement data, wherever they are, from different locations, whilst checking fields from the comfort of their ute, whilst tending livestock or whilst at home, and always whenever they need.

This facilitates right-time decision making to enhance operational efficiency and productivity.

Furthermore, farmers will maintain full control and ownership of their data.

A path-plotting screen shows the tractor’s progress, while another shows its live camera feed, providing the user with up to four real time views (two front and two rear).

A further screen enables monitoring and modification of key machine and implement parameters such as engine speed, fuel levels and implement settings, including seeding rate or coulter downforce.

The route to the field can also be planned, should this involve private roads or tracks.

The NHDrive concept tractor has been equipped with a seeder, and is able to autonomously seed the next crop straight behind the combine.

Using an application installed on a portable device, perfect for supervised automation, such as an operator driving a combine, or on a desktop computer, ideal for the farmer working in a farm office, the tractor and implement parameters can be continually monitored and controlled, and changes can be made if nec-

essary.

Able to work 24 hours a day, seven days a week, the NHDrive tractor could help to reduce the risks associated with human error as it follows predetermined and optimised plans for all activities.

It is able to reach higher levels of productivity and efficiency than traditional methods.

The NHDrive can make full use of the periods of favourable weather for farming operations by working day and night.

In the future, the NHDrive tractor will be able to completely automate grain handling during the harvest when equipped with a trailer, including unloading, transport and offloading activities.

The NHDrive concept tractor is equipped with a cab that is completely identical to that of a standard T8.

This means that it can also be used for those operations where complete autonomy is not yet possible, such as front-end loader work and high speed road transport.

With regards to getting around the farm, the NHDrive tractor can travel on pre-mapped private paths.

Simply “tell it” where to go and what it has to do once it has reached its desti-

nation via private tracks, and the tractor will get to work, either individually or in a convoy.

The New Holland NHDrive tractor makes full use of the advanced PLM (Precision Land Management) technology for precision farming.

This open, connected, smart, supported technology is easy-to-use, always accessible to all users and is continuously supported by New Holland specialists.

The NHDrive tractor follows optimised in-field paths, which are automatically generated by the software, after having taken into account the size and shape of the field, any pre-existing obstacles and the width of the implement to be used. In the future this concept will be able to utilise previously collected yield data for the variable application of inputs and to carry out operations with maximum precision, year after year. The results are increased operating efficiency and the ability to make the most of short operating windows.

The NHDrive tractor is able to work alongside other autonomous machines and can also work in tandem with machines driven by an operator.

Thanks to a combination of radar,

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LiDAR (range finding lasers) and RGB cameras, the NHDrive is able to detect a wide range of in-field obstacles.

If an obstacle is detected, the tractor sends a message to the interactive interface and the person responsible for the farming operations will decide if and how the tractor can avoid or bypass the obstacle.

In the future the complete tractor range as well as other agricultural equipment could be equipped with the NHDrive technology.

Furthermore it is possible that the cab will be completely removed in future autonomous tractors.

“The NHDrive autonomous tractor offers us the opportunity to open up completely new horizons for future farming,” brand president of New Holland Agriculture Carlo Lambro said. ‘’An autonomous tractor that is able to work day and night, helps solve the problem of a lack of specialised labour during the most intense seasons, makes 100% use of the periods of favourable weather for various farming activities and maximises the rational use of resources.’’

(Source: New Holland)

DAIRY NEWS AUSTRALIA SEPTEMBER 2016

MACHINERY & PRODUCTS // 33

Fastrac turns 25, turns more heads MARK DANIEL

EXPERTS RECKON a tractor typically spends at least 60% of its time on haulage workz, so little surprise the early innovators developed tractors with a high speed option.

German giant Mercedes Benz developed the Unimog and its close cousin the MB Trac, and in the UK the Trantor gained a niche following, but none of these ‘tractors’ were much good for draught work in paddocks.

Then came the JCB Fastrac with speeds of up to 75km/h, all-round suspension, load platform and in-field performance that took this type of machine into a new era.

Said to be the idea of Anthony Bamford, from a ‘vision’ while on holiday, prototypes were secretly built in the basement at JCB’s transmission factory in Wrexham, North Wales.

After proving the concept with select farmers and contractors,

the 12 million pound Project P120 went public at the Royal Smithfield Show, Earls Court, in December 1990.

Early machines had 120 or 140hp engines, then came upgrades to twostage powershift, then 150 and 170hp units in 1993.

In 1995 a smaller, lighter tractor arrived – the 1115 – restricted to 50km/h so as to run on standard tyres, to be followed by the 135hp model 1135.

Fast-forward to 1998, when a long wheelbase Fastrac, the 148hp, 2150 model, arrived with engine upgrades, a new auto-shift gearbox with 54 forward, 18 reverse speeds and three stage power-shift; this found favour with operators of high capacity sprayers and fertiliser de-mount rigs.

In 2005 JCB, wanting to play with the ‘big boys’, launched the 8250 with 250hp and a Fendtsourced constantly variable transmission.

Then in 2008 the new

Yanmar’s limited edition tractor in Manchester United colours.

Red devils seen on Thailand farms JAPANESE TRACTOR maker Yanmar will market a limited edition tractor, a joint effort with English Premier League football team Manchester United.

Bearing the team’s logo, the 51hp EF514MU model will go on sale in Thailand.

It will have a ‘premium’ red body, gold wheels and the all-important Manchester United logos on the hub caps and floor mats to distinguish the limited edition from the standard range.

Fitted with the maker’s direct injection diesel engine, a transmission with 9 forward and 9 reverse speeds and a 1.35 tonne rear hitch, the tractor will suit field work or market gardening.

So frenzied are Thais about football that Yanmar set up its own team in 1957 and from 2012 it has been an Official Global Partner of Manchester United.

The limited edition tractors will help raise brand awareness through sports communication and share the passion and spirit of challenge football inspires in enthusiastic fans in the region.

7000 series added appeared with JCB’s own semi-powershift setup, the P-Tronic, with 24 forward and 9 reverse speeds.

In 2013, the current 4000 series was launched, the most advanced Fastrac yet, with engines from 175 to 235hp, CVT transmission, self-levelling

front and rear suspension, multi-mode steering and a centrally mounted cabin.

Farmers and contractors consider the Fastrac in a Vegemite sort-of way – love it or hate it; but with high speeds, load carrying platforms and draught capability, the Fastrac has changed the way we look at tractors.

The JCB Fastrac has speeds up to 75km/h.

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DAIRY NEWS AUSTRALIA SEPTEMBER 2016

34 // MACHINERY & PRODUCTS

Waikato rotary available in range of sizes A ROTARY dairy platform, reputed to be the most technologically advanced in the world, is now available to Australian dairy farmers in a range of sizes from 40 up to 84 stalls.

Designed, manufactured and exclusive to Waikato Milking Systems, the Centrus Composite Rotary Platform 84 and smaller 54 and 60 stall were originally developed in response to demand from farmers around the world for a platform with the size, strength and durability required by a global market where very large herds of large framed cows and 24/7 milking are common place.

Grant Wisnewski, international sales manager for Waikato Milking Systems, said that since its introduction, however, demand has come from farmers across the spectrum of dairying “from small family units right up to the large intensive 24/7 operations)”.

The deck sections of Centrus Composite Rotary platforms are formed in a multi-layer process that includes Kevlar, a material used in the construction of aircraft and international racing yachts.

“The decks are bonded

together by a unique highstrength adhesive which, coincidentally, is used in wind turbines, military vehicles and marine,” Grant said.

“The result is a platform which is 75% lighter and eight times stronger than concrete overcoming the wear and tear which traditional multi-tonne concrete decks place on platform support structures.”

The weight to strength ratio is a logic which appeals to farmers and demand for the composite decks has grown around with the world and led to Waikato Milking Systems extending the range so there is now a size for “every farmer”.

Centrus Composite Rotary platforms are available in 40, 50, 60 and 84 stall configurations.

Grant said every aspect of each Centrus platform is produced to exacting standards in-house - each involving innovation, ingenuity and superb engineering unique to Waikato Milking Systems.

“One example of our attention to detail is in the manufacture and rolling of the beam which has an accuracy of plus or minus 1/16 No other deck can

match that level of precision.”

It’s where the beam meets the platform that another world first comes into play.

The Pivot Roller, exclusive to Waikato Milking Systems, maintains perfect alignment with the rotary platform’s support structure, the ‘I’ beam, even under 24 hour milking conditions. The resulting 100% contact enhances the performance and decreases wear and tear of the platform.

“Positioned between two high load pivot bushes, the self-lubricating cast pivot rollers are long-life but if replacement is ever needed they are easily swapped out without significant downtime.

“Micro adjustment within the roller assembly provides precise height settings and allows a degree of fine tuning and precision never before achieved. This is especially important because cow loadings constantly change, especially at the beginning and end of milking.

“That uneven weight puts a point loading on rollers and beam and can result in uneven wear which ultimately affects a

platform’s operation. The Pivot Roller overcomes that problem, making it relatively simple to maintain the platform’s perfect alignment.”

Cow comfort was a critical element in the design of the composite platforms with stalls built for large framed cows and rubber matting underfoot.

The composite deck surface is impervious to most chemicals and cow effluent and will not suffer the degradation common in concrete surfaces. Grant says that with proper care “they will look like new for

years to come”.

Centrus Composite Rotary platforms are manufactured at Waikato Milking Systems’ global head office in Hamilton, New Zealand and shipped around the world.

“The platform arrives on site accompanied by a specialist team who oversee the unloading, set-up and commissioning of every Centrus platform.

Lasers are used to ensure the foundations and structure are perfectly true and precise.

“We are known for our customer and after sales

service as much as we are for the quality of our products. Rob Spencer is our Business Development in Australia and we have a growing dealer network across the country.

“Our systems are designed and built to last a lifetime with a minimum of maintenance but our people are there if and when they’re needed to ensure the systems work optimally all the time.”

The wider range of platform size is expected to fuel global demand for the composite platforms, pivot roller and

the company’s extensive range of technology eg Electronic Milk Meters, SmartECR cup removers, SmartD-TECT mastitis identification and herd management systems.

“Our message to farmers is simple. No matter where you’re farming, how many cows you’re milking or the frequency of milkings, there’s a Centrus Composite Rotary platform which will out-perform and out-last anything else on the market,” Grant said.

(Source: Waikato Milking Systems)

Croplands 150 model trailed spreader.

Good-value spreaders MARK DANIEL

THE LATEST fertiliser or seed

spreaders from Croplands look to offer great value for money to small agricultural or turf growing operations. The model 150 trailed unit

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mounting and hold 250 or 350L in their galvanised steel hoppers.

Drive is via a conventional PTO system, and the spreading disc has four vanes for setting in one of five positions to achieve three easily selectable spread patterns. www.croplands.com.au

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