Dairy News Australia July 2012

Farming with the carbon tax Pages 6-7

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Queensland farmers adjust to price drop Page 23

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july, 2012 Issue 27 // www.dairynewsaustralia.com.au

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DAIRY NEWS AUSTRALIA JULY, 2012

NEWS // 3 Maffra dairy farmers Iain and Louise Stewart were involved in the 10,000 cows genomic project, which will fast track the nation’s herd improvement. See page 9.

Gippsland farmer Brian Anderson uses genomics as a selection tool in his breeding program. PG.19

Tasmanian farmers Rob and Jo Bradley, with their share farmers Grant and Kim Archer, have been awarded Dairy Business of the Year. PG.20

World prices to lift next year ANDREW SWALLOW

WORLD PRICES are expected to

Western Victorian farmer Bernie Whytcross and wife Ros have been a steady program of land acquisition.

PG.30

NEWS ������������������������������������������������������3-13 AGRIBUSINESS ������������������������������ 14-15 OPINION ���������������������������������������������� 16-17 BREEDING MANAGEMENT ������18-19 MANAGEMENT ������������������������������ 20-25 ANIMAL HEALTH �������������������������� 26-29 MACHINERY & PRODUCTS ��������������������������������������30-33 MOTORING ��������������������������������������������� 34

firm next year despite prices in the opening Global Dairy Trade auction of the month dropping an average 5.9% compared to the previous sale.

With processors delivering their opening prices this month, eyes were on the GDT auction to see if it could retain the gains of a month ago – when average prices rose 13%.

Although there was a fall in prices, analysts said contracts 1-3 months out were marked down more than those 4-6 months out.

ANZ economist Con Williams said this suggests a price recovery towards the back end of this year and into the first quarter of 2013.

The GDT is a fortnightly futures market for dairy products involving major processors, including Fonterra NZ, Murray Goulburn and Dairy America, which represents

four major US producer-owned dairy cooperatives, processors.

The GDT-TWI (Trade Weighted Index) is seen as a reliable indicator of international demand for dairy products.

Williams said dairy farmers in the US and Europe are starting to feel the squeeze of lower prices with some reports that production in the US in particular has plummeted in the past month or two.

Adding to the pressure will be a heatwave-induced surge in corn prices, the main feed input in the US. Whether the surge in corn prices, up nearly 30% in just three weeks, will be sustained remains to be seen, Williams said.

“It will still be four or five weeks before we have a better understanding of what the full [heatwave] impact will be.

“A lot of analysts are talking about a 155 bushel/acre yield aver-

age instead of the USDA’s last forecast of 164bu/acre. Our view is that anything below 155bu/acre and corn is going to remain pretty elevated.”

With the feed to product price ratio already below breakeven, production is expected to “come off quite a bit towards the end of 2012”, he said.

In its latest quarterly commodity report, Rabobank has predicted dairy prices will endure a slow squeeze in the final quarter of the year but will gain momentum next year as supply growth loses momentum.

Rabobank said the global dairy market had entered a rebalancing phase in June after a period of surplus generation.

The rate of price recovery will depend on the amount of excess stock accumulated during the first half, the time it takes supply growth to lose momentum and the prospects for demand improvement.

The report says milk production growth will slow as 2012 progresses, with the weather normalising and farmers seeing significant reductions in milk prices as first-half commodity price falls finally reach the farmgate.

Rabobank forecasts aggregate supply from the ‘big seven’ export regions to slip from 3.2% in the first half to 1.2% in the second.

The market should enter a slow squeezing phase by the fourth quarter as existing stocks are worked through. If the loss of momentum continues with a possible small demand growth, the market will significantly tighten in early 2013.

However a weak euro will restrain the pace of recovery, encouraging more EU product onto the market.

Rabobank believes buyers and importers in many regions don’t appear to have a full pipeline for the fourth quarter.

DAIRY NEWS AUSTRALIA JULY, 2012

4 // NEWS

Farmers want Coles price rise nationwide COLES HAS acknowl-

edged its fresh milk pricing is unsustainable through its decision to lift prices to its WA suppliers, according to Australian Dairy Farmers.

Last month Coles increased payments by 3.3 cents per litre to processor Harvey Fresh – the second in WA since it dropped its price of milk to $1 per litre on Australia Day last year.

In February last year Coles announced an increase of 5 cents per litre to Brownes Dairy, which held its fresh milk contract at the time.

The latest pay rise followed extensive talks between the company, its parent company Wesfarmers, and WAFarmers.

ADF vice-president Noel Campbell said all dairy farmers in the drinking milk states would now expect Coles to pass on similar price increases to other processors so they can flow through to farming families.

“Clearly dairy farmers in Western Australia are doing it tough but they are certainly not alone,” Campbell said.

“Milk priced at the unsustainable level of $1 per litre is also hurting farmers in Queensland, northern NSW and to a lesser extent South

Australia.

“The key point is that Coles’ prices for milk are unsustainable and Coles has proven this by giving Harvey Fresh a 3.3 cents per litre increase.

“It is an admission by Coles that their ‘down, down’ campaign is having an impact on suppliers in the Australian domestic market.”

Harvey Fresh has said it began notifying its farmers in mid-June that it was increasing its farmgate payments for protein, milk solids and butterfat effective from July 1.

The processor said increased farmgate payments were made possible by higher wholesale prices it had negotiated with Coles for dairy products

sold to the supermarket.

WAFarmers president Dale Park said WAFarmers welcomed the news but would be interested to see how much the producer actually ended up with.

“We maintained that there would need to be a 4-5c/L increase to keep the industry viable and Harvey Fresh were contemplating an increase anyway, so if this increase from Coles is added on top of that, producers should be very happy.

“The proof of this commitment will be exactly how much of the increase will be passed onto producers.”

Campbell said Coles should publicly acknowledge that by reducing the price of milk to $1 per

litre on their home brand milk they made a mistake and set prices that were unsustainable.

ADF is seeking an explanation from Coles on why they took this action in WA alone.

“It does not seem logical to increase prices in one market alone, when their pricing tactic impacts the whole of Australia.”

Processors holding Coles contracts across Australia have indicated that milk priced at $1 per litre is hurting them.

“It is time Coles raised prices to a sustainable level and stopped their marketing tactic. This recent increase in WA urgently needs to be replicated nationally.”

Coles increased payments by 3.3 cents per litre to WA processors Harvey Fresh last month.

Lion plays hardball with northern states NORTHERN NSW and Queensland

farmers are angry price negotiations for milk between the Dairy Farmers Milk Co-op and processor Lion are dragging on.

Lion told its suppliers based in South Australia (SA) last month that their milk – totalling 100 million litres - would no longer be needed from July 1.

Lion sold its SA factories in Murray Bridge and Jervois to United Dairy Power last year.

Intense competition for milk in south-east Australia will mean these suppliers will find a home for their milk.

The multi-national com- Ian Zandstra pany is in the process of reducing milk purchases by 20%, as the milk it needs is 400 million litres below the two billion litres bought five years ago.

It had a 7% operating loss last year in the dairy division, and wrote down its value by a billion dollars.

DFMC and Lion have been in intense full-time negotiations for the past fortnight and have now had an independent arbitrator appointed to help find a resolution.

As a result of the dispute, milk prices and the size of contracts were not available for DFMC suppliers by July 1.

Farmers’ milk will still be picked up and paid for.

In a letter to members, DFMC chairman Ian Zandstra said negotiations for Anticipated Full Demand (AFD) hit a rocky start when Lion would not supply supporting information for its proposed allocations for each region.

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which includes impact across the total regional supply pool, under the terms of their milk supply agreement.

“The independent mediation process was engaged to see if the parties could reach agreement,” Zandstra said.

“Lack of resolution has meant that we have enacted the next and final stage of the dispute process, being ‘expert determination’.

“This timing and lack of outcome on milk pricing discussions means that announcement of milk prices and contract volumes could be delayed.

“Hopefully common sense and productive negotiation will deliver a speedier outcome.”

Zandstra informed suppliers that Lion continues to lose market share in all regions and there is an expectation that there will be a decrease in regional demand and therefore the Tier One allocation of all farmers.

Zandstra said the initial Tier 1 and Tier 2 milk prices tabled by Lion for the 2012/13 financial year would cause “anguish to a lot of our suppliers”.

“In addition to the milk price, Lion also tabled a number of changes to our milk policies. These cannot be changed unilaterally

by Lion; however the intent was shown, to effectively decrease the cost of milk for Lion.”

Zandstra said given the extremes of the proposed changes that confront DFMC, it might take some time before a resolution might be reached and it is more than likely that DFMC will enact the dispute process.

DAIRY NEWS AUSTRALIA JULY, 2012

NEWS // 5

Global supply drives prices down MURRAY GOULBURN

has blamed the global milk supply glut and subsequent fall in world prices for its opening price of $4.50/kg milk solids – 8.5% lower than last year’s opening price of $4.92.

The cooperative’s endof-season milk price is $4.70-$4.90.

Warrnambool Cheese and Butter has opened its season with the same price, Bega Cheese opened at $4.46/kg MS while United Dairy Power said it would pay between $4.88$5.19/kg MS. MG CEO Gary Helou said the price was influenced by recent significant falls in world dairy prices caused by increased milk production in key dairy export countries especially New Zealand, EU and the US, as well as the high Australian dollar.

“Volatile market and seasonal conditions may determine a final price up or down on this (end-of-

season) forecast.

“MG understands that dairy farming profitably at these opening and forecast prices will be very challenging and we will do everything possible to increase farmgate returns in the short and long term.”

Helou outlined several initiatives aimed at improving Murray Goulburn’s operating efficiency in order to reduce the impact from the current market factors on MG’s farmgate price.

“Our market forecast includes the contribution from the $100 million in savings that we have committed to remove from MG’s cost base.”

Helou said despite the recent market weakness caused by increased milk supply, international dairy demand remained strong and MG’s commercial team has indicated increased sales in several new markets

for 2012/13.

MG is also actively seeking new suppliers and has forecast an increase in supply, which it says will enable it to grow markets, revenues and improve asset utilisation.

“Milk supply to MG increased by approximately 4% in 2011/12 and we are actively seeking more milk from our current supply base and new suppliers.”

WCB also announced its final step-up

for the 2010/11 season, with its suppliers receiving an additional 6 cents per kilogram butterfat and 15 cents per kilogram protein.

This increase takes its final price on average to about $5.48/kg MS. WCB managing director David Lord said despite some short-term

insecurity in the markets, the outlook for dairy commodities remained positive.

“We are likely to see growth in milk production in the major dairy producing countries begin to slow, and with underlying demand remaining strong, we anticipate recovery from the opening price levels,” Lord said.

In its annual

Situation & Outlook report released in May, Dairy Australia forecast full year southern prices for 2012/13 would be in the range of $4.50-$4.90/ kg MS. This was based on current market conditions and the short term outlook.

However, DA manager strategy and knowledge, Joanne Bills, said buyers were

remaining cautious, waiting to see what happens with prices rather than buying ahead and securing supply beyond their immediate needs.

“In the past few years, price increases have been driven by demand, now this has reversed with additional supply driving prices lower,” Bills said.

Fonterra hides opening milk price IN A break with tradition, Fonterra

Australia has not released its opening price for the season.

Early this month, the company announced its forecast final farmgate milk price for its Tasmanian and Victorian suppliers for the 2012/13 season would be between $4.70-$5.00/kg milk solids.

This follows its indicative price guide given to suppliers in May of an opening price estimate of $4-$4.30kg/MS and closing estimate 15c/kg MS either side of $4.75c/kg.

The company’s general manager of

milk supply, Heather Stacy, said Fonterra’s opening prices would vary across the company’s five supply regions, depending on an individual farm’s milk profile.

This is not unusual as no processor offers the one price to each of its suppliers. The opening season price has normally been an indicative price to give farmers a gauge on the season.

However, Stacy said Fonterra is moving to offer its suppliers more tailored and farm-specific pricing information this season to help suppliers make more informed decisions.

season and also deliver“Our pricing system ing consistently strong takes into account a final farmgate price number of regional varireturns,” she said. ations in production, All suppliers will be on-farm conditions and offered a tailored pricing farm management sysstatement from Fonterra tems. that takes into account “Given each farm has the specific management a different milk profile, and production aspects the number for all supHeather Stacey of the supplier’s individpliers to remain focused on is our anticipated closing price range. ual farm, as well as the available incen“Fonterra has a very strong track tive payments and rebates.

Stacy said the upwards revision of record of ensuring cash flow is delivered to suppliers from the outset of the the final forecast price was pleasing

given the current market conditions.

“The GlobalDairyTrade event (at the start of the month) is a reminder of the market sentiment that has prevailed since January. The Australian dollar also remains high against a backdrop of global economic uncertainty.

“We still hold the view that the global supply/demand balance will recover into calendar year 2013, and this anticipated recovery has been built into this price guidance.”

Fonterra will review and confirm its closing price for the 2011/12 season later this month.

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DAIRY NEWS AUSTRALIA JULY, 2012

6 // NEWS: CARBON TAX

Dairy farmers cop biggest whack from carbon tax ECONOMIC

ANALYSTS

IBISworld predict farmers’ revenue will slump by more than 6% in the next 12 months, due to the flow-on effects of the carbon tax.

The report, released late last month, shows the country’s 7000 dairy farmers will be the hardest hit.

The report found dairy farmers costs are set to rise by $170.3 million within the tax’s first year and then by $198 million in 2014-2015.

The rise in 2014-15 is predicted as the Government will impose the carbon tax on fuel used by heavy transport vehicles.

National Farmers Federation president Jock Laurie said independent research by the Australian Farm Institute found that

farmers will be slugged with additional costs under the tax due to higher electricity costs and the likely pass-through of costs from the processing sector.

The Australian Farm Institute forecast Victorian dairy farmers will lose up to 7.8% of annual income, while NSW producers face the loss of up to 6.7%.

The institute estimates energy costs for NSW farmers will be $7691 higher under a carbon tax while Victorian dairy farmers face a rise of $6054 on average. The predictions were made in its report released last year.

“These findings were verified by research from the Government’s own Australian Bureau of Agricultural and Resource Eco-

nomics and Sciences (ABARES) which found that farmers, particularly dairy farmers, will face additional costs under the tax,”

Farmers will face an increase in costs and a reduction in prices as the carbon tax takes effect.

Laurie said.

“High input costs such as electricity and fertiliser are already putting considerable pressure on the farm bottom line, and these costs are set to rise under the carbon tax.

“Farmers will face an increase

in costs and a reduction in prices as the carbon tax takes effect; costs and cuts that are totally outside of our control.”

Victorian Farmers Federation President Peter Tuohey said although agriculture is exempt from the tax, farmers will be exposed to a raft of indirect costs like rising electricity prices and additional freight and fuel charges which will damage their bottom line.

Tuohey said the agriculture sector would once again shoulder the burden of yet another tax that industries were passing straight back down the supply chain to the farm gate.

“The government needs to remember farmers are price takers – not price makers.”

Refrigerant price hike alarms Vic farmers THE VICTORIAN

Farmers Federation has called on Australia’s competition watchdog to investigate massive price hikes in the cost of refrigerants, vital to agriculture and food processors.

One of Australia’s largest refrigerant servicing companies, Heatcraft, has told customers the price of the most common refrigerant, R134a, will rise from $65.72 to $181.82 on July 9.

The prices of other refrigerants are also set to rise two to three fold.

VFF president Peter

Tuohey wants the Australian Competition and Consumer Commission to investigate the price hikes.

“How are they justified?”

“Our dairy farmers, horticulture producers, abattoirs and Australia’s struggling food processors can’t afford further price hikes in the cost of running their businesses.”

One of Australia’s largest refrigerant importers, A-Gas, has blamed the Federal Government’s introduction of a

special import levy on refrigerants, due to their impact as greenhouse gases.

When contacted by the VFF A-Gas stated the “majority” of the increase was due to the Government’s carbon levy on imports.

However the VFF used the Government’s own import levy calculator to show R134a will attract a levy of just $30 a kilogram from July 1 this year, compared to a retail price rise of $116 a kg (a quarter of the price hike).

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Dairy is undergoing significant expansion in Tasmania but Tasmania Farmers and Graziers Association CEO Jan Davis said the carbon tax will cost Tasmanian farmers millions in the first year alone.

“That additional cost comes as a result of the higher prices farmers will have to pay for production inputs such as electricity, fertilisers, and the variable charge components of irrigated water supplies.

“While diesel fuel used for road transport is exempt until after 2014, there is no exemption for diesel fuel used for shipping.

Tasmanian farmers therefore face yet another competitive barrier in transport costs.

“That means it will be more

Jock Laurie

expensive for our farmers to get their produce to market and it will be more expensive to bring in fertilisers and other inputs used in farming.

“At the same time, major retailers have made it clear that shelf prices will not be increasing so they will have to reduce the prices they pay to farmers to offset their own rising costs.”

MG sells stake to Mitsubishi MURRAY GOULBURN

When queried on the price hike, A-Gas stated other government levies relating to requirements to destroy old refrigerants, accounted for part of the price rise.

However, these charges add just $2.25/kilogram to the price of most refrigerants.

The company then stated its production costs had to be factored into the increase.

The VFF has spoken to the ACCC this week and lodged an official request to investigate the issue.

has sold a 24% stake in Tasmanian Dairy Products to Mitsubishi.

The cooperative will remain the majority shareholder at 56.1%, while Tasmanian investors will hold the 19.9% balance.

Tasmanian Dairy Products is a $75 million processing joint venture at Smithton in north-west Tasmania, and will soon be able to process 250 million litres of milk a year into mostly whole milk powder, for markets in Asia and the Middle East.

The Smithton plant is nearing completion and will be operational later

this year.

In a letter to Murray Goulburn (MG) shareholders, MG managing director Gary Helou said MG had

be partnering with Mitsubishi Corporation in this important project and look forward to working with them and our other partners in making this

“We are delighted to be partnering with Mitsubishi Corporation in this important project.” – Gary Helou worked closely with Mitsubishi Corporation for more than 40 years as a valued customer of dairy ingredients, and as a strategic investment partner in various manufacturing jointventures.

“We are delighted to

venture a success,” Helou said.

“Tasmanian dairy farmers have already shown tremendous support for the new venture including many in the north-west of the state that have committed to supplying the new company.”

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DAIRY NEWS AUSTRALIA JULY, 2012

NEWS // 7

Shed changes can limit impact FARMERS CAN offset the predicted price impact of the carbon tax through basic energy reduction methods in their dairies, according to Fonterra.

Fonterra conducted a pilot program with 32 of its suppliers that measured energy use in dairy sheds and identified low cost, simple changes to reduce electricity use.

The program found average electricity cost savings of about $2000 per farm per year were achievable without significant cash investment from farmers.

Based on Fonterra modelling, these savings are similar to projected rises in electricity prices due to the carbon tax for the average dairy farm, the company’s general manager of sustainability, Francois Joubert, said.

“We now have a better

understanding of electricity use and costs on dairy farms and, based on our program, we anticipate a realistic price rise due to the carbon tax will be around $2000 for the average farm,” Joubert said.

“It is possible for our farmers to minimise the impact of the carbon tax without making huge financial investments.

“Simple things like monitoring temperatures, checking fans and insulation of water tanks can deliver real savings.

“Some farmers are doing these things really well, but there are still savings available for about 90% of farmers.

“Our assessments have really aimed to give farmers practical advice and tools to make decisions about sustainability issues.

“We are now extend-

ing our program so that more Fonterra farmers are able to undertake energy assessments and we will work closely with the dairy industry to do this.”

Though agriculture is technically exempt from the carbon tax, the electricity-intensive nature of dairy farming means farm-

ers will see rising electricity costs as a result of the scheme.

“The range of tariffs our farmers are paying for electricity is surprisingly large so we are encouraging our farmers to shop around for electricity tariffs and ensure any price rise is justified,”

Joubert said.

The cheapest peak tariff was $0.12/kwh and the most expensive was $0.22/kwh. Fonterra also have anecdotal reports of farmers being offered discounts by their existing supplier just because they asked for it.

Last month, Dairy Aus-

tralia received $1 million in Federal Government funding for their Smarter Energy Use on Australian Dairy Farms project.

This project will roll out a series of similar energy assessments for a further 900 dairy farms.

“We believe that such Federal Government

support can help dairy farmers transition to a more sustainable future by helping ensure confidence in the future of the industry, providing capital for needed investment as well as capability to identify and implement best practices,” Joubert said.

Energy audits can reveal cost savings.

DA rolls out dairy energy audits DAIRY AUSTRALIA received $1 million in Federal Gov-

ernment funding to roll out 900 farm energy assessments on dairy farms across the country.

The grant was one of 28 announced as round one of the Energy Efficiency Information Grants program worth $20 million.

Dairy Australia will use the funding for the Smarter Energy Use on Australian Dairy Farms project to provide farmers with information and technical support to improve energy efficiency.

Dairy Australia natural resource management program manager Catherine Phelps said the secured funding would help deliver energy assessments to all eight dairy regions across Australia, tailoring it to meet local needs.

“There is a high level of interest in energy efficiency in the dairy industry and farmers are increasingly concerned about the cost of energy impacting on their business, so the conditions are right for a very effective national project,” Phelps said.

“It is expected the project will result in supplying farmers with real practical solutions for significant savings in carbon emissions and energy costs on farm.”

Through on-farm assessments, Smarter Energy Use on Australian Dairy Farms will deliver recommendations for dairy farmers to use energy in the most efficient and cost effective way. Phelps said recommended options could include changes to management practices, optimisation of current equipment and/or capital investment.

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DAIRY NEWS AUSTRALIA JULY, 2012

8 // NEWS

Lion, Parmalat go permeate free TWO OF the coun-

try’s largest processors, Lion and Parmalat, have removed permeate from their milk in their fight for the consumer dollar.

Both Lion, which produces the Pura and Dairy Farmers brands, and Parmalat, which produces Pauls and Rev, are now featuring permeate-free

logos prominently.

The move is seen as a way to differentiate themselves from the cheaper supermarket house brands, which have increased their market share since dropping their prices to $1 a litre last year.

It also erodes the advantage of smaller competitors, a2 and Aussie Farmers Direct, who also advertised their permeatefree status. Lion external relations director Libby Hay said research showed 75% of their consumers were “becoming more

concerned about how processed their food is”.

“The latest research into the nation’s attitudes to food quality highlighted that nine out of 10 Australians who check for additives and preservatives and the level of processing a product has undergone, would choose a less-processed option if available.

“We looked at our manufacturing process and realised that adding permeate was not essential, so it was an easy decision to remove it from our milk.”

Ian Zandstra, chairman of Dairy Farmers Milk Cooperative, which supplies milk to Lion, told ABC Radio the decision means companies like Lion would have to buy a little bit more fresh milk from dairy farmers.

“That’s a good thing.

That buffers the nervousness about a cut in contracts,” he said.

“Price-wise, I can’t see it having much effect.

“Clearly, if more milk was needed in regions of milk shortage, there’d have to be a price response

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ufacturers use ultra-filtration to separate these components by putting the whole milk through a very fine sieve.

Milk’s composition can vary by farm and by breed so the composition of milk will vary on a daily basis.

Processors review the composition of milk when it is delivered to them and standardise the components in milk to ensure consumers receive a consistent product every time.

Processors have been accused of using more permeate to reduce costs. The new permeate-free range is also trying to change that attitude.

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Thomas (8) and Matthew (6) in the Jordney Park calf pens.

and an increase in prices.

“But generally Lion is needing less milk from our farmers in virtually all the regions.”

Permeate has become top of mind for most Australian consumers since tabloid news programs A Current Affair and Today Tonight both aired stories about it.

It was portrayed as the “industry’s secret they won’t tell you about”.

In fact, permeate is the collective term for the milk-sugar (lactose), vitamins and minerals components of milk.

To produce a variety of dairy products, some man-

Try using the DFM Gel as a start. Give calves a dose as they are taken off the cow and see how they go. Also use the DFM Gel for cows that are ‘off-colour’ with stomach problems.

Has it saved you time/money/effort? How? Yes. Treating sick calves is costly, time consuming and often has bad results with either a calf that struggles for months or doesn’t make it at all. Not having sick calves saves a huge amount of money and effort. Also the calves seem to be stronger and thrive from day one, which in the long term means that when calves are weaned they are bigger and stronger.

How easy is Performance to use in your system?

The DFM Pellets is pre-mixed into the cow grain by the stockfeed company which could not be any simpler for us. The calf powder is mixed into the barrel of calf milk daily.

What is the major benefit you see in using Performance?

Healthy stock from day one — from a newborn calf right through to the milkers in the dairy. Healthy cows mean less veterinary costs, less time treating sick animals, more milk in the vat and happier farmers!

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THE MURRAY-DARLING Basin Authority will undertake new modelling after the NSW and Victorian Governments agreed to South Australia’s request to model for 3200 gigalitres.

The revised draft plan, sent to ministers in late May, recommended 2750 gigalitres be returned to the river system. The decision to undertake more modelling was made at the Murray-Darling Basin Ministerial Council late last month.

SA Premier Jay Weatherill had earlier told the Irrigation Australia conference the consequences for South Australia of the use of the Murray-Darling Basin from upstream states was unacceptable, with the impacts affecting the culture, business, economy and environment of his state.

The Premier expressed his frustration with the systematic effects of the Murray-Darling Basin experienced by South Australians.

“The health of the river in South Australia is determined by our decisions, but also the upstream state’s decisions and policies,” he said.

“If you are an irrigator from an upstream state, I have to be frank with you, your state has taken too much water and you’ll have to give some back.

“A viable future for our Murray-Darling Basin relies on all Australians standing together.”

National Irrigators’ Council CEO Tom Chesson said the Ministerial Council meeting had done little to allay irrigators concerns and had raised more questions than it had answered.

“If the Basin State Governments are demanding the MDBA go and model 3200 GL/y reduction, they should also be demanding they re-do the social and economic modelling used by the MDBA,” he said.

“Whilst they are at it, perhaps the MDBA might wish to comment on why the Commonwealth Environmental Water Holder has failed to use over half of the 1300 GL of water it had allocated to it during the last water year?

“If the Government can’t use the water it has in a wet year, how can it claim that it needs to take more water from communities?”

Chesson said the NIC welcomed Ministers’ request to the MDBA to continue to develop an Sustainable Diversion Limit (SDL) adjustment mechanism through which environmental works and measures could be counted as reductions against held water for the purposes of bridging the gap. Chesson said irrigators and their communities were fast losing patience, as highlighted by a rally in Griffith.

“Governments of all persuasions need to understand implicitly that (communities) are not prepared to be traded-off to support some form of scientific and public policy experiment.”

DAIRY NEWS AUSTRALIA JULY, 2012

NEWS // 9

Genomic project results fast track national herd GENOMIC

BREEDING values for young bulls with no daughters are now as reliable as a bull proof with 30 milking daughters, following the completion of the 10,000 cow project.

Following two years of intensive research work at the Dairy Futures Cooperative Research Centre (CRC), profiling of 10,000 Holstein cows from 91 dairy farms Australia-wide has been completed.

The potential economic value of this new technology is estimated at $100 million over the next 12 years.

Dairy Futures CRC chief executive David Nation said the largescale genomic profiling had improved the reliability of genetic data, which would give farmers more accurate predicDavid Nation tions of a bull’s potential for milk production, fertility and other traits that affected profitability.

Farmers will now be able to confidently bring forward the introduction of elite genetics by several generations and produce higher performing dairy cows earlier.

Dr Nation said the project, one of the largest of its kind in Australia, was important as European countries and the US were ahead in their bull progeny testing.

“This new level of genomic reliability for key traits confirms the creation of a viable, new market sector – genomically tested bulls with high levels of reliability under Australian dairy farming conditions,” Dr Nation said.

“In this new era, making breeding decisions with confidence on genomic information alone is set to become standard practice among dairy farmers, who stand to double the genetic gain in their herds.”

Based on overseas experience with genomics, the speed and scale of the uptake of this new technology is expected to be rapid.

In Ireland, less than two years after achieving similar levels of genomic reliability, 50% of bulls used in dairy breeding

programs are now young genomic bulls.

Professional breeders who market bulls here and overseas will be able to test a range of high performing bulls at a young age; potentially making these bulls more marketable and adding diversity to the sires available for breeding.

Dairy farmers purchasing natural sires will have access to a broader market of bulls that have been genomically tested.

Dr Nation said environmental factors and farming practices, which vary from country to country, have a critical impact on the performance of imported sires.

Bull companies, the majority of which import semen from sires proven under US, Canadian, UK or European conditions, can now have their bulls genomically tested for performance under Australian conditions.

The results can be provided quickly to assist them in deciding which bulls to market in Australia and give them an edge in their marketing programs.

The technology will give Australian dairy farmers, who already look globally for suitable international sires, greater confidence in selecting bulls that have been genomically tested for Australian conditions.

Dr Nation said genomics also presented the industry with an opportunity to test for ‘outliers’; those animals that may have been overlooked previously but whose superior traits can now be identified through a simple DNA test.

“For young dairy farmers entering the industry, genomics presents an opportunity to build a quality herd rapidly, making dramatic improvements in performance by choosing elite young bulls on their genomic test alone.”

The Dairy Futures CRC is a large-scale partnership between dairy farmers, pasture and cattle breeding companies, Government and researchers.

Iain and Louise Stewart have the confidence to select full bull teams in the future relying on genomics alone.

Stewarts stake future on genomics MAFFRA DAIRY

farmers Iain and Louise Stewart were one of 91 dairy enterprises which recently took part in the Dairy Futures Cooperative Research Centre’s 10,000 Holstein cow genomes project.

The project involved taking tail hair samples from 10,000 animals with extensive performance records.

As a result, several of the breed’s most economically important traits have been brought up to, or above, the minimum publishable criteria.

These traits include genomic reliability for production (63.9%), survival (43.2%) and mastitis

resistance (54.8%).

On average the reliability of genomic breeding values for young bulls (with no daughters) is now equivalent to a bull proof with 30 milking daughters.

The Stewarts have also embraced genomics, using it on progeny test bulls and selecting full bull teams in the future relying on the science alone.

“The 10,000 cow project has proven we can do this, we can improve our herd a lot faster, so why not?” Iain said.

The Stewarts volunteered 72 of their 420cow herd for the project and were pleased with the

results.

“The genomic results and our data were very closely aligned which gave us a lot of faith in the science as well as our own record-keeping,” Iain said.

“No system is ever 100% but genomics is a tool which will keep improving.”

The couple, who focus on breeding high protein producing, small statured cows, believe Australia will quickly follow Europe’s lead in take-up of the science.

In Italy, where genomic evaluations were only adopted in December last year, genomic bulls already account for about 30% of all Holstein semen

sales, while in Germany and Scandinavia sales are about 40% and in the US, as high as 50%.

“We’ve remained a highly productive and fully closed herd for 40 years and we’ve always been in on the ground floor with technology,” Iain said.

“We were one of the first herds to use semen and we’ve been using PT for more than 50 years – you don’t stay in front by falling behind.”

For more information visit www.adhs.com.au and click on the genomics brochure link or visit www. holstein.com.au/index.php/ services/genetics/genomictesting

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DAIRY NEWS AUSTRALIA JULY, 2012

10 // NEWS

Surveys show Qld confidence low KEY BUSINESSES involved in the

Queensland dairy industry have been told the impacts of a man-made disaster in the form of the supermarket retail milk price war continue to undermine the viability of Queensland farmers.

Queensland Dairyfarmers Organisation (QDO) president Brian Tessmann told the Northern Dairy Industry Situation and Outlook business breakfast forum last month that farmer confidence was low.

The forum was held to give dairy industry stakeholders a picture of the road ahead with industry experts highlighting the results of Dairy Australia’s Situation and Outlook report.

Tessmann told the forum that while milk production in Queensland was slowly recovering – farmgate prices in Queensland had not. Many farmers were suffering a cut in farmgate prices this year and the result had been confidence was at a low ebb.

The QDO had also surveyed farmers across Queensland in May. He said the results showed farm confidence had taken a major hit due to the impacts of the milk war, which had placed extreme pressure on the rest of the value chain and had led to cuts in farmgate prices.

Kevin Goos, Parmalat, Brisbane; Arthur Seiler, Wiley and Co, Brisbane; and Allan Box, Norco.

“With these cuts many farmers in Queensland will make a loss this year.

Since the supermarket price war started Queensland has lost over 40 dairy farmers. This needs to stop,” Tessmann said.

“This is despite the northern industry having several positives in its favour, including a growing local market, driven by population growth.

“Nation-wide there is significant regional variation in operating conditions between producers supplying the domestic market in states such as Queensland and southern producers who predominantly supply the export market.

“These findings show the northern industry is in need of some decisive pricing stimulus as well as continuing

good seasons if we are to see any lasting restoration of production levels and much needed investment in our industry.

“QDO has for some time pointed out that the domestic market does not respond satisfactorily to supply and demand pressure and so in the face of this market failure, we believe the whole milk supply chain needs to be encompassed by a mandatory code of conduct to ensure fairness in the value chain from major supermarkets, to processors, right down to farm gate.”

Tessmann said the issue needed urgent attention and action from the Federal Government.

“This is having a serious impact on farmers today, and in the future will also

Ivan Wright, Kenilworth; Jeff Collingwood, Norco Foods; Tony Wilson, Norco Deputy Chairman, Kyogle, NSW.

Jenny Easlea, Dayboro, Qld; Iain Hannah, Parmalat, Brisbane; and Ray Murphy, Department of Agriculture, Toowoomba.

impact consumers by eroding the ability of Queensland to supply fresh milk for itself.

“This includes the introduction of

an ombudsman to tackle unfair practices in the value chain, and a code of conduct.

“We need action on this issue now.”

Price wars knock northern NSW confidence THE MILK price wars have knocked the confidence of northern NSW farmers as well as their Queensland counterparts.

The proportion of NSW respondents to Dairy Australia’s National Dairy Farmer Survey (NDFS) who were positive about the future of the industry was 54%, slightly lower than the 2011 survey of 58%. It remained significantly lower than the national average of 66%.

A total of 1002 farmers were surveyed across Australia in February this year for the annual NDFS. The survey examined farmer attitudes and inten-

tions and provided key inputs for the 2012 Dairy Australia Situation and Outlook report released in May. Dairy Australia manager strategy and knowledge, Joanne Bills, said central and northern NSW were geared toward domestic fresh milk supply, which meant the ongoing aggressive retail competition and private label contracts were undermining farmer confidence in those regions.

“Continued aggressive retail competition, disruptions caused by changes in private label supply contracts and uncertainty surrounding processor milk requirements have

undermined farmer confidence and stifled production growth,” Bills said.

However, southern NSW farmers are an exporting region, and have experienced a resurgence in production and confidence, reflecting improved access to irrigation water, she said.

While there was evidence that the number of NSW farms is decreasing, Bills said the rate of attrition appeared to have slowed.

“The responses showed only 2% of farmers planned to exit the industry in the next three years.

“This compares to 7% planning to leave 12 months earlier,” she said.

Many farms are in a “steady as she goes” phase (67%), and are not planning on significant expansion.

Bills said it should be noted that 45% of respondents who described their business this way said this was because their enterprise was where they wanted it to be.

There were 23% of NSW region farmers whose businesses are in expansion phase.

Average herd production rose between 2010/11 and this year, increasing to 1.7 million litres, while average

herd size in the region rose slightly from 262 to 268 milkers.

Despite selling more heifers over the past year, survey results suggest NSW farmers have more heifers on hand than in the past.

More than one person new to the industry was employed on a NSW dairy farm almost every day in the past year.

In 2011/12, of the 3000 people in paid positions on NSW dairy farms, about 524 recruits were new to dairying. Around 11% of the surveyed NSW dairy farms employed apprentices/ trainees.

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DAIRY NEWS AUSTRALIA JULY, 2012

NEWS // 11

VICSTOCK GLOBAL ExxonMobil wants to develop reserves of methane gas in the Gippsland Basin.

Farmers want final say on mining land grab cumulatively by mining and CSG titles and STEPHEN COOKE applications, causing great uncertainty for farm families, the $8.4 billion agriculture VICTORIAN FARMERS have called for industry and the 74,000 people it employs.

In NSW, at present, not one hectare a right of veto over any proposed mining has been set aside for food production. activity taking place on their land.

Victoria is the latest state in Australia NSW Farmers is asking the Government – after Queensland and New South Wales to declare some agricultural land off limits - to attract interest from mining and fuel to exploration and to strengthen proposed companies searching for gas trapped in land and water protections for mining and CSG. coal seams.

On May 1, more than 20 groups from Coal seam gas exploration has united the farming community in the two north- across the state rallied outside Parliament House in NSW to demonern states as mining companies have had Currently 100% of strate concern about the unfettered access to pri- NSW is covered by NSW Government’s Strategic Regional Land Use vately held land. mining and coal Policy and its approach to Some of this land has been prime agricultural seam gas titles and exploration and mining in this state. land, prompting calls the applications.

During the recent conFederal and state governments are selling the country’s long-term sultation process on the policy, the Govfood security and export potential for ernment received over 1400 submissions short-term gains in the form of royalties – a vast majority of which were in favour of stronger protections for the state’s land from mining companies.

ExxonMobil has taken an initial 10% and water resources. The policy will be stake in a joint venture to explore and finalised later this year.

New surveys show both city and counpotentially develop reserves of methane gas occurring naturally in brown goal in try residents of NSW think too much emphasis is being placed on mining and the Gippsland Basin in eastern Victoria.

More than $20 billion was spent in 2008 coal seam gas by the Government.

A recent Newspoll survey found 58% alone on coal seam gas deals in Australia by multi-national corporations like Exx- of respondents thought the NSW Government was putting too much emphasis on onMobil.

However, leaks at wells in Queensland, satisfying the interests of extractive induspotential contamination of groundwater tries compared with about 1% who said too supply and worries over new drilling tech- much emphasis was placed on farmers.

The survey also revealed that 88% were niques are causing a backlash from the wider community and governments are either strongly in favour or somewhat in favour of parts of NSW’s agricultural land starting to respond.

The Victorian Government has estab- being reserved from mining and coal seam lished a new Earth Resources Ministerial gas.

About 50% thought that more than half Advisory Council to tackle coal seam gas of the state’s food-producing land should and other mining issues.

Gerald Leach of the Victorian Farmers be reserved for agriculture while one in Federation said an independent committee four believed more than 90% should be would be good for farmers, but landhold- set aside solely for agriculture.

Under proposed new land use policies, ers’ rights could always be stronger.

“The Victorian Government must be the NSW Government has not earmarked committed to protecting landholders’ any farm land to be excluded from mining rights in the face of increased concerns or coal seam gas activities.

NSW Farmers’ president, Fiona Simson, about the impact of coal seam gas and said she was genuinely surprised by the brown coal mining.

“The VFF has already called for farm- depth of feeling across the state.

“People talk about the country and city ers to have a right of veto over any mining divide but it’s not there on this issue and activity taking place on their land.”

Currently, 100% of NSW is covered I think that is very encouraging,” she said.

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DAIRY NEWS AUSTRALIA JULY, 2012

12 // NEWS: WORLD

Fonterra welcomes outside investors INVESTORS WILL gain exposure to

said the board was committed to a November launch for the scheme.

Farmers have one voting share, or wet share, for every kilo of milk solids they produce. They can also hold nonvoting dry shares of up to 20% of their production.

Under Trading Among Farmers, farmers will be able to trade dry shares among themselves. They will be able to sell wet shares into a fund, with those shares then taken up by investors, although Fonterra underscored the investors wouldn’t get voting rights.

The fund is expected to be about NZ $500 million initially, or about 8% of Fonterra’s shares.

No single shareholder will be able to hold more than 15% of the fund’s shares.

New Zealand co-op Fonterra for the first time after its 10,500 farmer shareholders voted in favour of the Trading Among Farmers scheme late last month.

The resolution for the scheme received a 66.45% vote in support at a special meeting.

Under the scheme, investors can buy non-voting units in the cooperative, on track to earn NZ $20 billion ($15.7b) in the year to July 31, giving them access to dividend and potential earnings growth.

Fonterra said the scheme guarantees the co-operative will remain in the hands of farmers as unit holders will never have voting rights, only economic rights.

Chairman Henry van der Heyden

Van der Heyden said TAF ensures a stable, permanent capital base for the co-op and secures its future.

“Over recent months we have used some of the best legal minds and cooperative specialists to stress test the concept and proposed trading system as part of the due diligence process.

“This final vote shows the majority agree that TAF is a fundamental pillar for the co-op and the board is absolutely unanimous in the belief that this is a lasting solution.”

Fonterra chief executive Theo Spierings said the vote for TAF means Fonterra can be in charge of its own destiny.

“TAF will stop money washing in and out and give the co-op a stable, permanent capital base to deliver on its Strat-

‘White gold’ will lose some glitter PETER BURKE

MILK MAY well be ‘white gold’ to the New Zealand economy – as recently described by the Ministry of Primary Industries (MPI) – but its glitter is likely to dim in the coming year.

So says MPI in its ‘Situation and Outlook for Primary Industries’ (SOPI) annual report. It forecasts a drop for 2013 in everything except cow numbers.

There will be slightly less milk solids produced in the current record season which has seen a 10% increase. But next season the value of export returns will be down by about 9% and the payout to farmers will also be down.

Not surprising, says MPI deputy director-general Paul Stocks. “We’ve had a brilliant year for dairy production and that’s not going to happen next year.”

But Stocks is upbeat about the longterm outlook for sector, noting that after next season there will be a modest 2.2 % increase in milk solids production.

And the long-term outlook is good especially in emerging markets, he says. The risk of the dairy industry becoming too dependent on China has to be watched but he’s not too worried.

“Our productive sector is now much more finely attuned to the markets and the fact that we have a diverse set of markets to sell into mitigates the risk.”

He notes the emergence of India as

egy Refresh,” he said.

“There is no cooperative anywhere around the world that is the same as Fonterra. TAF is completely unique as is the solution to eliminating redemption risk.

“We will now be able to implement our strategy and remain a relevant player in the global dairy industry.

MPI deputy director-general Paul Stocks says dairy’s golden run may come to an end next year.

an economic powerhouse which, unlike China, is traditionally a consumer of dairy products. Big opportunities exist in the ASEAN region and the OPEC countries, along with China, are New Zealand’s top market.

Stocks says some people tend to downplay the value of New Zealand’s milk powder, describing it as a commodity.

“But I don’t think our stuff is. People buy New Zealand milk powder because they can trust it. They get exactly what they ask for every time. They can trust the regulatory systems around it and that points to it no longer being a commodity.”

2011

2012

2013+

2016+

Cow and heifers in milk (millions)

4.68

4.82

4.93

5.17

Milk solids produced (million kg)

1 513

1 664*

1 657

1 768

Milk price (cents per kg)

760

608*

573

783

Total export value ($ millions)

13 169

13 904*

12 626

17 033

The MPI report raises the issue that as cow numbers increase, and with this a rising intensification of the industry, innovative ways need to be found to address environmental issues. But Stocks points out that the dairy industry is to New Zealand what other forms of industry are to other countries.

“When you are doing [dairying] on the scale we are, i.e. as a business, not as lifestyle, there are environmental impacts. Farmers and the community at large should be aware of that and the issue is, how do you manage that? It has taken the dairy industry a bit of time to catch up to the fact that their neighbours have a view on how the land and water around them is being used. Farmers need to care about it because their markets care about it.”

New Zealand must also remember the role the dairy industry plays in the beef industry, Stocks says. The dairy industry is as much a part of the meat industry as anything else. “Once the productive life of a dairy cow is done, it has one more task – to become part of the beef industry.” Cow beef is a valuable commodity, he says.

“With overall demand for dairy growing, TAF will ensure that we are well placed to grow volumes and protect our position as the world’s leading dairy exporter.”

Van der Heyden said the board was still working towards a November launch for TAF but this would depend on market conditions.

Price cuts enrage UK farmers UK FARMERS are angry at milk price

The New Zealand dairy industry at a glance

*estimate + forecast

A dairy farmer votes in the recent special Fonterra election.

production linked to their milk price but cuts during the past two weeks by three for those who aren’t sheltered by such deals, the pressure on price is again big dairy processors.

Robert Wiseman Dairies, Arla Foods unbearable.

UK and Dairy Crest – all suppliers of “Until all retailers and processors fresh liquid milk – will cut payments commit to a fair and transparent supply to farmers by 3.3c/L, 3.9c/L and 3.2c/L chain – one that ensures a fair return for respectively. These cuts follow others farmers – we will never break free from this vicious cycle of crisis after crisis in in recent months.

National Farmers Union dairy the dairy sector.”

Farmers want processors to own up board chairman Mansel Raymond said the price slash came at the expense of to selling milk cheaply, becoming too reliant on the prices the average dairy of secondary prodfarmer who was “It is the aggressive ucts for income. now taking a big and deflationary They also want the loss on every litre. nature of price Government to sort “I echo the call negotiations out the dairy conmade by one major tracts mess. “This producer group, between retailers Dairy Crest Direct, and processors that has been promised; now is the time for that this now is really hurting.” amounts to a comdelivery.” bined profit warning for the majority of Raymond calls for “urgent meetings dairy farmers. All producer representa- with all retailers and major food compatives must now stand together and fight nies that buy liquid milk. “This erosion of prices is crippling our dairy industo restore profitability.”

All processors blame deteriora- try at a time when it should be thriving. tion in commodity markets and cream It must stop; the very survival of our prices. But Raymond said none of them industry is at stake.” was taking responsibility for this dire Dairy Crest chairman David Herdsituation. man acknowledges the financial “This typifies everything that is squeeze facing farmers. wrong with this market place. It is time “This latest cut to our members, for liquid milk processors – and retailers which comes on top of a 3.9c/L cut in and other major buyers – to take respon- May, will deliver a completely unsussibility for this dysfunctional supply tainable milk price.” chain. It fails to address the one basic He estimates the deficit between need of any business: to cover costs and milk price and production cost to be $103,000 a year for its liquid supplimake a profit.

“It is the aggressive and deflationary ers.

Dairy Crest is issuing a profit warnnature of price negotiations between retailers and processors that is really ing loss of $68 million for non-aligned hurting. Some farmers receive a cost of DCD producer this season.

DAIRY NEWS AUSTRALIA JULY, 2012

NEWS: WORLD // 13

NZ growth plan under scrutiny ANDREW SWALLOW

AN INTERNATIONAL

dairy industry consultant now based in New Zealand is questioning the sector’s growth agenda.

“There seems to be a production-at-any-cost approach,” says Tom Phillips, who returned to New Zealand in November after 30 years working overseas: 20 years in Australia and more recently in the UK, France and Ireland.

“Overseas I was encouraging people to adopt New Zealand’s low cost pasture-based systems and I come home to find New Zealand is trying to be like everyone else.

That saddens me,” he told Dairy News Australia.

“Many discussion groups are now talking in terms of production per cow but there’s no relationship between production per cow and profit in this country, or any other that has a pasture-based dairy industry.”

Phillips was responding to Dairy News’ questions following his posting a blog (www.pasturetoprofit. blogspot.co.nz) littered with challenges to current practice and expansionist thinking.

“There is a limit to dairying growth in New Zealand. Where is that limit and how will we know what that limit is?” he writes.

“Growth is limited with a fixed finite physical environmental resource. New Zealand is a very small country with wonderful pristine natural resources but they are not inexhaustible...

“It is clear that dairy cow intensity (numbers of dairy cows and stocking rates) is linked to nitrate levels and nitrate leaching.”

While he acknowledges the link with water quality isn’t fully understood, assuming there is a link, “how can we continue to grow numbers of dairy cows without environmental damage?” he asks.

Better farm man-

agement and scientific breakthroughs may reduce impact and mitigate damage but he says he’s concerned “environmental research will not deliver any short term silver bullet answers.”

He also suggests some changes in water quality are inevitable due to shifts in industry structure and practice that have already happened.

“My major concern is farm profitability but I also think continued growth isn’t necessarily what New Zealand wants for the environment,” he said.

Growth may be more cows and dairy farms, or increased production per cow and more cows per hectare.

“What I’m seeing out in the field is systems creep where nearly all people started with low input bases and for various reasons they’ve been encouraged or pressured to venture into higher feeding without fully analysing whether it’s the best way to go....

“Once you’re into high input systems, things like animal health costs tend to escalate rapidly, it gets harder to get cows in calf, and the cost per litre or kg of milksolids starts to escalate dramatically.”

It also goes against New Zealand’s comparative advantage and leaves producers and the country increasingly vulnerable to volatile commodity markets for grains and proteins.

“World cereal production is sitting on a knife edge... you only need one country, Australia, Russia, Ukraine or the US, to have a drought and the price of cereals escalates dramatically. It makes our industry incredibly vulnerable and uncompetitive.”

Phillips is based at Massey University, working for the Massey/Lincoln joint venture set-up with DairyNZ and PGP funding, the Centre of Excellence in Farm Business Management.

He says his weekly blog

is a personal viewpoint on industry matters, and not necessarily that of the centre.

A dairy consultant is questioning the industry’s move away from pasturebased systems.

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DAIRY NEWS AUSTRALIA JULY, 2012

14 // AGRIBUSINESS

Avoid expectations of Indian export trade PETER BURKE

HIGH EXPECTATIONS

of India as a major market for dairy products should be avoided, says Rabobank senior dairy analyst Hayley Moynihan.

She told a Smaller Milk and Supply Herds (SMASH) seminar that India is a great place but difficult to do business with, particularly in dairy products. Dairying is a sensitive issue for Indians because it’s a part of everyday life in their villages.

“There are people involved in the dairy industry who are living on the poverty line and it’s very sensitive politically.

For that reason trade with India is difficult and it is controlled by their government.

“That makes it more difficult than some other markets.”

India is the single largest dairy producer in the world, producing some

108.5 million tonnes in 2008/09. It has 11 million dairy farmers and 100 million people work in the industry, three quarters of them women.

It’s production is small scale with about half its milk produced by cows and the remainder by buffalo. There are 111.5 million animals producing milk.

Dairy products are popular in India but just on half the production is consumed at ‘village’ level.

But like many Asian countries the rise of a wealthy middle class is starting to change consumption patterns.

India is described as an “elastic” market. Moynihan says sometimes India has surplus milk and is an exporter and sometimes is in deficit and has to import milk products to meet consumer demand.

But the country is trying to be self-sufficient in milk, she says.

“Certainly demand is growing in India – demand for high quality milk

EUROPE IN WAITING

Hayley Moynihan

DAIRY FARMERS in countries such as Ireland, UK, Germany and Holland are counting the days and possible the hours to the end of European Union regulations that restrict the amount of milk they can produce – commonly called ‘the cap’ .

The lifting of the restrictions is about three years away, but Rabobank dairy analyst Hayley Moynihan says already many of these countries are gearing up for this and are starting to build up their dairy herds. This will disrupt the international dairy market.

The world market needs more milk and Europe will be in a position to supply it, Moynihan says.

“When the cap on dairy products is lifted there will be an initial surge then there will be a re-balancing. In fact some European countries which are less efficient milk producers may exit the market altogether.

“But in other regions such as Ireland it will grow and there are signs they’re gearing up for this. If they do grow it will require new investment in processing capacity which means there are challenges for the Irish, but it’s within their capability.”

Moynihan says New Zealand should also remember it’s no longer the cheapest producer of dairy products.

products and more processed milk products – and that’s what makes it so exciting, especially the fact that even small shifts make quite a difference in the amount of milk they require.

“They also consume different fat products such

as ghee instead of butter and have a lot of different cultured product we wouldn’t recognise or necessarily like consuming, which again makes it difficult from a market entry point of view.

“They have very dif-

ferent tastes and preferences.”

But Moynihan says the Indian market has poten-

Danish co-op signs big China deals DANISH CO-OP Arla

Foods has signalled its intentions in China by signing deals with two leading dairy industry companies.

The co-op has indirectly become a share-

holder in Mengniu Dairy Co Ltd in a deal with the company’s single largest shareholder, COFCO Corporation. With Mengniu, it is establishing the ChinaDenmark Milk Technology and Cooperation Centre,

to provide expertise on milk quality, traceability and controlled milk production on farms. Using Mengniu’s sales channels, it is expanding the Arla brand to new product categories, giving Chinese

MARKET LEADERS ■■

■■

Ltd China Mengniu Dairy Company and its subsidiaries manufacture and distribute dairy products in China. It is one of the leading dairy product manufacturers in China, with MENGNIU as the core rse brand. The Group boasts a dive product range including UHT ■ milk, milk beverages and yogurt, ice cream, milk powder and cheese.

Mengniu were the largest dairy company in China in 2011 in terms of sales volume and sales, and one of the top 20 global dairy enterprises as ranked by

■■

, Rabobank. As of December 2011 n uctio prod ual the company’s ann was 7.05 million tons. In 2011 the company reached a turnover of $7.4 billion. The company is listed on the Hong Kong Stock Exchange.

COFCO Corporation is a leading grain, oil and food import and export group and the largest food and beverage company in China. The company is founded in 1949 and has featured on the Fortune 500 list since 1994. In 2011 d COFCO’s total assets amounte to $50B.

consumers access to more of its products.

Arla is spending $367m on a 6% stake in Mengniu.

It will nominate one director to the Chinese company’s board.

The deals will boost Arla’s total turnover in China five-fold by 2016.

Last year Arla’s total turnover there was $151 million.

Since 2005 Arla has sold mostly powdered milk products on the Chinese market, through a joint venture with Mengniu. Arla says it has decided with its partner to further develop its dairy business and extend this from milk powder to a range of dairy products.

Dairy consumption in China is growing faster than the nation’s rapidly increasing dairy

tial as the demand for high quality consumer products grows.

But it will likely be a

sporadic market and marketers need caution when thinking about its potential.

Arla chief executive Peder Tuborgh addresses Chinese dairy leaders at the co-op head office this month.

production.

At about 10% growth, the Chinese dairy market is expected to pass that of the US in 2020. This makes it crucial for Arla to gain a solid foothold in the Chinese market, says Arla Foods chief executive Peder Tuborgh.

“We are proud that China’s leading food company COFCO and most successful dairy company Mengniu have chosen Arla as their strategic business partner in China.

“These agreements will increase our exports

to China significantly....

It will contribute to our cooperative owners’ milk price from day one, as we are able to add more value to milk that we otherwise would have to sell on the global bulk trading market where the profit [has been] lower historically.”

Tuborgh says reaching more Chinese consumers is a breakthrough for the Arla brand. “It will cement the Arla brand as a trademark for international quality, in powdered milk and other categories.”

China is one of Arla’s

five strategic growth markets – along with Russia, USA, Poland and the region Middle East & North Africa – where Arla works to create long-term growth opportunities.

“It is important for Arla that we continue our focus on developing our core markets in Northern Europe combined with long-term strategic investments on our distant growth markets, because that is where the biggest growth margins will be,” says Tuborgh.

DAIRY NEWS AUSTRALIA JULY, 2012

AGRIBUSINESS // 15

Brazil soaking up world milkExport supply demand remains strong Brazil is an important market for absorbing dairy exports from Chile, Uruguay and Argentina.

Dairy NewS aUSTraLia june, 2012

agribusiness // 17

THE DAIRY spotlight has largely been

focused on milk production in the USA, Europe and New Zealand given strong growth in these regions in the last 18 months.

However, the low cost of production and participation in global markets over many years means South America is a region that can change the global dairy market balance, and certainly warrants keeping abreast of current market developments.

On average South America has exported almost 900,000 tonnes of dairy products per year over the last five years.

This is roughly 30% or 200,000t more than the volume that Australia

cents/litre in March (AUD 41c/L) to 28 change in milk production (year-on-year) Argentina inincremental parexports annually. With season 2011/12 only a few Euro cents/litre (AUD 36c/L) in April. weeks from ending, attention is now ticular has had a Argentina and Profit margins are under pressure in the focused on 2012/13 milk prices as farmUS, and in NZ Fonterra has announced ers consider strategies for the coming couple of strong Brazil are the key the final payout for the 2011/12 season year. In some domestically-focused has been cut from NZ$6.75-$6.85/kg MS regions, renegotiated contracts incorseasons. In 2011, players in the region, gLobaL impacT to NZ$6.45-$6.55/kg MS (AUD$4.96porating lower prices and reduced ‘tier JohN DropperT milk production accounting for $5.04). one’ access are undermining farmer Effectively, global dairy markets are confidence and supply stability.

For increased 12.5% to almost 60% of total rebalancing. Lower prices will both many farmers in export-oriented Shifts in private label contracts and probillion litres, dairy exports. Argenslow production growth and stimulate have seen milk regions, a lower price outlook relative to cessor rationalisation11.6 demand, and as this occurs we will ultiintake requirethe current season not only adds to the companies adjust their and from January to tina is a major supmately see a price recovery. Key factors challenges of doing business, but seems ments and pricing to meet the changa result ofbeatherising populaduction in Chile and Uruguay is quite largely plier of whole milk to watch onas the global scene will pressured2012 retail producto contradict theGLOBAL positive mediumIMPACT term ing demands of a highlyApril rate at which milk production overseas marketplace. Lower contract prices and outlook ofNORMAN Asia-driven dairy demand REPACHOLI tion and economic growth. While the small, totalling 2.1b litres (up 5%) and tion is up 10% (on powder (WMP) and slows in response to lower prices, the a lack of alternative supply opportunigrowth. crisis hasworries slowed Brazil’s 1.8b litres (up insouth-east 2011 respectively. same lastmilk production cheese to the world. Dairy Australia’s indicative outlook ties present challengesthe impact of the current financial those in Asia and the Middle Eurozone flows. 2012 in the US 19%) in a market with time for southern farm gate milk prices – limited manufacturing capacity. Despite is up around 4% on 2011 for the year to East maintain consistently higher eco- on consumer confidence, the path of economic growth, the Brazilian CenUruguay is having another great start to year) to 3.5b litres.

Most of the growth Brazil used to be a large supplier of published in the recent Dairy 2012: Sit- these challenges, the underlying domes- April (leap year adjusted), whilst early nomic growth rates that support China’s economic growth, and the value of theBank Australian dollar. increased dairy How- tral data suggests EU-27 production marketattributed is stable, with steady per-cap- farmgate uation and Outlookgrowth report, is for has an tic still anticipates 2.9% growth themilk year with production upconsumption.

22% for the been to strong dairy proteins, but consumption Demand for exported dairy prodopening price range of $4.05-$4.40/kg ita dairy consumption and a growing finished the March 2012 quota year up ever, the surge in supply has outpaced and dairya imports first months of 2012. prices (around AUD$0.35/l) relahas flipped the market become a sigucts remains positive and from will con-neighbouring demand growth inIn theChile market. hot 2.3% on the previous year.four New Zealand population providing a degree of cer- and MS andto a full year average price range tinue to grow with middle classshould in This situation has seen the scales Argentina production is widely expected tohas finishcurbed tainty beyond the current adjustments. between $4.50 andtheUruguay prevent weather first quarter protively low input costs.

Steady economic nificant dairy importer.

Thisandis$4.90/kg fortu-MS. The In the seasons following the 2008 this season up 10% on last year - a huge tip in favour of buyers in dairy mar- large emerging markets such as China, report considers the wider market picjumps in retail prices and duction which is tracking about growth has also nate for global commodity pricesthegiven with changes in diet and with increasing with commodity prices retreat- significant market influence given 95% of growth, NZ milk kets, financial crisis and encouraged subsequent com- domestic ture and summarises many factors urbanisationlocal - and also in conjunction steadilytime over recent also enjoymodity price recovery, in is exported. Argentina at play; the key theme current sitconsumption.

2.3%isbehind theingsame lastmonths. year.Butter support consumption growthfarmers of 2.5%. many countries in the region haveof the been uation being that of re-balancing in the export-oriented regions have seen solid ing solid production growth, but a sig- prices are down some 30% from their with global population growth. Locally, So while Brazil isn’t byreally an opporBrazil milk production increased Compared to (see Argentina, prorapidly increasing production. market is supported a 2011 peaks, whilst powder prices have the domestic nificant supply gap inIn Brazil prevents global supply growth chart) - with milk dairy supply chain.

In regions of Australia focused on higher-cost competitors in the North- much of this additional milk from leav- lost more than 20%. Farm gate prices growing population and stable pertunity to export Australian dairy prod3.4% last year to 21.7b litres, although have subsequently been reduced in capita consumption. Whilst the dairy producing drinking milk, many farmers ern Hemisphere amongst those expand- ing South America. market(import is currently a tariffs challengingcan placebe up to 27% most exporting regions.

Thethat average ucts Despite wider there economic face a re-balancing market in the form ing output as their margins increased. is uncera large informal sector of renegotiation of supply contracts This season, favourable weather con- tainty, demand has remained resilient basic farm gate price for milk in France to be a seller, all signs indicate that balisn’t monitored (up to 30% of total for WMP) it’s an important market for and reduced access to ‘tier one’ supply. ditions have further enhanced milk as importing countries like China and for example, dropped 12% from 32 Euro ance will ultimately return. milk production). Weather has varied absorbing dairy exports from Chile, considerably between northern and Uruguay and Argentina.

This is good news for local farmgate southern regions, creating regional challenges but production growth of prices already struggling under growing supplies from USA, EU and New 3-5% is still expected. austraLian DairY, ASEAN-Australia-New On the demand side, Brazilian Zealand. rice and wine exporters to Zealand FTA (AANZFTA).

“Protectionist sentiMalaysia are the biggest imports as a percentage of consump- • Norman Repacholi is senior ment over agricultural winners in a free trade goods is rife and growagreement (FTA) signed tion have been increasing from about international industry analyst with ing across the globe, so to provide portion pack between the two counaustraLian FooD 1.2% in 2008 to almost 4% in 2012, Dairy Australia. in this context it is pleas(200-330ml) configuratries last month. company Freedom Foods

Malaysia FTA benefits dairy Freedom

Foods plant targets Asia

The deal, signed after seven years of negotiations, allows a liberalised licensing arrangement for Australian liquid milk exporters and allows access for higher value retail products.

It guarantees Australian wine exporters the best tariff treatment Malaysia gives any country. It also allows open access arrangements from 2023 for Australian rice with all tariffs eliminated by 2026.

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

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

The FTA will fill a number of gaps within the

ing Australia has managed to forge an agreement with Malaysia that has dealt with some sensitive agricultural issues not effectively covered by AANZFTA,” says Fraser.

“While under the AANZFTA agreement most of Australian agriculture’s key interests had tariffs bound at zero, dairy and rice are two sectors where incremental market access improvements have been negotiated under the Malaysian FTA. “This trade deal was also particularly important for sectors such as dairy that have been facing a competitive disadvantage in Malaysia compared with New Zealand which already has a completed FTA with Malaysia in place.”

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

The buildinG blocks for sTronG, producTive cows.

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.

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

tion 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.

016-017.indd 17

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DAIRY NEWS AUSTRALIA JULY, 2012

16 // OPINION RUMINATING

EDITORIAL

Reduce power costs to offset carbon tax THE DEBATE surrounding the carbon tax has been highly politicised and

divisive.

With different agendas comes highly charged claims and counter claims – it will either be the end of the world as we know it, or the fuse to become even more efficient.

The carbon tax has now been applied to dairy processors and energy suppliers from July 1, meaning dairy farmers will receive higher power bills and, according to Murray Goulburn, reduced farm gate prices as processors offset their increased costs.

MILKING IT...

Sustainable future I ALMOST fell off my chair when the press release from the 6th Dairy Solutions Symposium, held in Ireland last month, hit the inbox.

Apparently the top dairy experts all agreed the key to the future was making milk sustainable.

You don’t say. So sustainable farming practices, which in turn ensure future productivity and profitability, are a good thing? Well I’ll be.

I hope Australian dairy farmers received word from the conference so they can start farming with the environment and the next generation in mind. Oh that’s right, they do.

Fair dinkum, enough of the buzz phrases designed for the media. Instead of reiterating city misconceptions, why not promote the good work already achieved.

The best thing farmers can do is look for ways to reduce their power bills.

Willy Wonka THERE WOULD have been no shortage of kids volunteering for a recent study by the Melbournebased Murdoch Children’s Research Institute, which tested the relationship between dark chocolate consumption and lowering children’s blood pressure.

Despite recent research suggesting dark chocolate consumption lowers blood pressure in adults, the study of 200 school students found little difference between blood pressure before and after consuming dark chocolate.

Oh well, free chocolate at least, back to school then?

No, Murdoch researchers said despite the findings not showing any benefit of eating dark chocolate, the possibilities “are exciting”.

Come again? “What the study showed us is that it’s possible to do this kind of dietary prevention study on a large scale.

What we’d like to do now is a larger trial that runs for a longer period of time and includes a wider range of children.”

Sounds like somebody’s after some more funding to us.

Now that’s lucky THE PHRASE ‘lucky cow’ has taken on a new meaning in Wisconsin. Sevenyear-old dairy cow Lucky has been treated to a specially designed massage.

Lucky had been walking with a limp for several weeks when veterinarian Sara Gilbertson was called.

Instead of prescribing painkillers, Gilbertson tried an unusual new therapy — a chiropractic adjustment that included a full-length spinal massage.

Gilbertson rubbed the cow’s spine by gently squeezing it from neck to tail, pausing to apply firm pressure to one hip and readjust several vertebrae.

The cow stood in calm silence, moving only enough to reach another mouthful of hay.

Lucky’s owner Larry Meyer said the method was not dissimilar to the treatment of an athlete with a sprained ankle.

“If you can get a cow healthy and back to normal, it makes a difference in their productivity,” he said.

Farmers don’t need to rush out and buy the latest in solar power gener-

Prehistoric dairy consumers

ators – and we’re guessing they will be inundated with proposals to do so.

The best thing farmers can do is investigate how to reduce their energy consumption and this may not be as hard as it seems.

IT’S OFFICIAL – dairy products have been around for at least 7000 years.

Prehistoric people in the African Sahara were making dairy products such as butter, yoghurt and cheese.

This speculation, based on the identification of dairy fats on ancient pottery shards found in Libya, is the first to provide a definitive date for early dairy farming in Africa.

“What we’re beginning to know is that cattle were significant to early peoples,” says Julie Dunne, an archaeological scientist at the University of Bristol, UK.

Average electricity cost savings of $2000 a year are achievable on dairy farms without significant cash investment, according to Fonterra, which undertook a pilot program with 30 of its suppliers.

The program was designed to help farmers minimise energy price rises due to the carbon tax and measured energy use in dairy sheds and identified low-cost simple changes to reduce electricity usage.

These savings are similar to projected rises in electricity prices due to the carbon tax for the average dairy farm.

Fonterra also advised farmers to shop around for electricity tariffs as investigation showed the range of tariffs currently paid were surprisingly large.

Simple things like monitoring temperatures, checking fans and insulation of water tanks can deliver savings.

Farmers don’t need to invest heavily in solar power or other alternative energy schemes, and they certainly don’t need to bother with the Carbon Farming Initiative (CFI).

The latest idea from the Federal Government is to investigate the feasibility of capturing methane from covered anaerobic ponds.

We think it’s a better use of time to look at energy savings in the dairy.

So be wary of those who try and convince you of the ways to make extra money under the CFI – if it sounds too good to be true, it probably is.

Anybody that wants to explore their options under the CFI should work with someone they know and trust.

Carbon legislation is not going away. The Opposition still claim they will repeal it if they win office but this would be unpopular with business which wants certainty.

Many are still concerned about what carbon legislation means for them and nobody knows exactly. However, it is not going away.

There is help available, but make sure it’s from people you can trust.

Dairy News Australia is published by RNG Publishing Limited. All editorial copy and photographs are subject to copyright and may not be reproduced without prior written permission of the publisher. Opinions or comments expressed within this publication are not necessarily those of the staff, management or directors of RNG Publishing Limited.

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DAIRY NEWS AUSTRALIA JULY, 2012

OPINION // 17

Research proves organic smugness WELL, CUT off my legs and call me shorty; my long-held prejudice about organic enthusiasts being smug, superior types has been all but confirmed by research.

According to a paper in the Journal of Social Psychological & Personality Science, people exposed to organic foods ‘’judged moral transgressions significantly harsher’’ than the control group. They also volunteered significantly less time to help a needy stranger.

Lead author Dr Kendall J Eskine says about the study: “There’s something about being exposed to organic food that made them feel better about themselves. And that made them kind of jerks a little bit, I guess.”

Erskine’s researchers called it ‘’moral licensing’’ – whereby because you do good deeds in one area of life, you feel you’ve paid your dues and can give up on being good in other areas.

So, according to this study, people who eat organic food are more likely to be judgmental about their fellow man.

Which surely now gives us free rein to judge all those ‘I’m better than you because I only eat organic’ types.

I’ve felt the judgemental wrath of the outraged organic lobby when some 18-months or so ago, after I penned a tonguein-cheek column for this paper, suggesting organics may not be as pure or as good for the planet as its exponents have claimed.

The genesis of the column was a couple of presentations to an Aus-

tralian Farm Institute conference, which suggested organic production was not as sustainable as claimed by its proponents.

In my offending article I wrote how the country’s agricultural productive sector had suffered the disdain of eco-warrior-types who regularly derided the environmental merits of their products and/or systems. I pointed out this was somewhat moot now that research had shown organics was not as environmentally or economically viable as it proponents believed.

Though I was being deliberately provocative, I figured most reasonable people would take the piece for what it was – comment. However, I’d forgotten that organic types – like all evangelists – are rarely reasoned or reasonable. They practise a strange form of democracy that says it is only acceptable if the outcome agrees with what they believe.

So as sure as God made little green apples – Biogro certified organic, of course – came the obligatory indignant letter to the editor from the organic lobby accusing me of being bought off by Monsanto and the rest. Yada, yada, yada as George (1990s TV show Seinfeld) would say.

Sydney Morning Herald writer Jacqueline Maley, commenting on this latest research, wrote: “One of the more insidious trends of the modern era… is the moral sanctity people attach to their food choices. Eating is no longer something we do for taste and energy consumption; it is a political

DAVID ANDERSON act. The ability to select and consume biodynamic, macrobiotic, locally sourced and fully organic food is surely the greatest middle-class indulgence

themselves too, so does that mean we are harming the planet as well?

He then invited her, ever so politely, to take her smug views, crocheted shopping bag and go and climb a tree.

What’s the bet the smug one is the type who breaks the speed limit on

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Latte sipping types that preach the benefits of organic production have been found to be more judgmental.

Apparently the sanctimonious lady lectured my friend how he must feel awful because the beef he was buying had at some point in its lifetime been drenched.

His question, to the holder of this particular moral licence, was that humans actually worm

of our time.”

It is hard to disagree with these sentiments when, as a friend recently experienced, being accosted by one of these environmental evangelistic types in the supermarket when buying some meat.

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the way home, with my friend’s flea ringing in her ear.

No doubt, the holierthan-thou crusader will have justified her actions as being okay because she drives a Toyota Prius!

• David Anderson is a former editor of New Zealand’s Rural News.

DAIRY NEWS AUSTRALIA JULY, 2012

18 // BREEDING

Australian Jerseys sought for world stage AUSTRALIA HAS a

major role to play in the Jersey breed’s global revolution, according to Semex Jersey program manager Russell Gammon.

Gammon, who is based in Guelph, Canada,

Russell Gammon

recently toured Australia searching for brood cows and potential young sires with pedigree diversity in a world thirsty for fresh Jersey bloodlines.

In the United States alone, semen sales have

L A I C E P S T R O REP NEXT ISSUE: AUGUST 2012 HAY & SILAGE When it comes to Hay & Silage production, preparation and planning are as important as having the right gear.

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

lifted from 600,000 doses in the latter part of the 1990s to 2.2 million domestically in 2011.

Gammon said those numbers are projected to approach three million in “fairly short order”, encouraged by US milk payments which now have a greater emphasis on fat and protein.

He said the US is today the major international driver for the breed, and within that is opportunity for Australia.

The US wave of excitement echoes Canadian growth and popularity.

When Gammon last year left his role as Jersey Canada’s executive secretary after three decades he had helped facilitate a 96% lift in the number of milk-recorded herds containing Jersey cows. Canadian Jersey memberships in the last two years of his reign were the highest since 1966.

“One of my first assignments with Semex was to write the Jersey section of its corporate strategic plan, which had never before been included, so it was a very powerful statement about Semex’s commitment to the Jersey breed,” Gammon said.

“While Jersey sales are not the biggest portion of Semex’s business, they are the fastest growing part of the business.”

Gammon, who is also the former vice-president of the World Jersey Bureau (2002-08) and the former president of the Canadian Livestock Genetics Association, knew the breed’s success would also include a day of reckoning.

One of the challenges for everyone in 2012 is the threat of a commonality of international pedigrees – and that is where Australia’s chance lies.

“We [Semex] are absolutely as aggressive as anybody else in the hunt for exceptional sires to take the breed forward which is why in the first four months of this year we genotyped as many Jersey bulls as we did in all of 2011.”

Gammon is convinced there are more bulls within Australia’s population that offer genetic

diversity like Broadlin Hatman, who was bred by Lynton and Lisa Broad, at Lockington, Victoria.

“We are focused on the US market and bulls that can compete in that marketplace,” he said.

“We have a tremendous openness to working with Australian breeders to genotype Australian cows or interesting bull calves.

“They need a point of difference – they will probably have some index; a strong cow family behind them and be a good individual themselves.

“We have turned up the heat because we believe Australia definitely has something to offer.

“Australia is easily our lead source [outside of Canada and the US] and, while there are a lot of the same genetics between all three populations, there will also be different genetics that are influenced, but perhaps not dominated by the same bulls.

“The strength of Australian cow families is a real selling point for us.

They have different family lines and enough production to impress US producers.”

Gammon said Hatman was a perfect example.

“North American producers look down the list of sires wanting something different and when they got to Hatman, they said: ‘finally something that’s different. That’s exciting and that’s what we’re looking for’.”

Another recent Australian example was Semex’s purchase of young sire Almervista Bob. He is bred

by Almervista Jerseys’ York family from Longwarry in Gippsland, Victoria.

“He is a TBone son out of a Navara dam and behind that there is a cow family that is somewhat different,” he said.

“We do think that some of the bulls in their total pedigree may be an outcross to the North American population because of their maternal pedigrees and that is something Australia brings to the table which allows Semex to be different in other countries.”

DAIRY NEWS AUSTRALIA JULY, 2012

BREEDING // 19

Embracing a genomic future SOUTH GIPPSLAND dairy

farmer and Holstein breeder, Brian Anderson, is a straight shooter whose family’s hard work has put their Bundalong Stud among the country’s best.

So when Brian says genomics – genetic selection based on DNA profiles – is the way to go, it’s advice worth heeding.

Anderson has been breeding Holsteins on their 170ha property at Kongwak for almost 30 years and supplies eight to 10 sires to artificial breeding companies annually as well as another 30 to commercial operations.

The pressure for the Andersons to remain ahead of Australian and international breeding trends and developments is immense.

“I do a lot of research on bloodlines here and overseas and we’ve been using genomics as a selection tool in our stud for the past five years to help identify animals with superior genetics,” he said.

“We have to think five years ahead which is why a fast genetic test outcome is very important to us.”

The Andersons, as part of their commitment to improving Australia’s Holstein genetic base, were of one of 91 dairy enterprises which recently took part in the Dairy Futures Cooperative Research Centre’s 10,000 Holstein cow genomes project.

The project involved taking tail hair samples from 10,000 animals with extensive performance records and, as a result, several of the breed’s most eco-

“In the US they don’t DNA any of their embryo transfer calves so, given there are a number of misidentified daughters out there, it makes it difficult to have a rock solid proof.”

At the Anderson’s place, stud animals don’t get any special treatment - they’re all working mothers – who contribute to the 230-cow herd milked twice daily in a 17 swing-over herringbone dairy. The breeding emphasis is on producing a functional, profitable cow which is “just above medium frame, with plenty of middle, good feet and legs that will produce plenty of good quality milk, get back in calf and last in the herd”. It’s a tall order but genomics is WHO: making it all that much Brian Anderson easier.

WHERE: “People might think Kongwak that $105 an animal for a WHAT: 7k SNP, which is a basic Genomics test, is a lot of money but in the whole scheme industry, which will hasten its of embryo transfers and AI, it’s improvement and turnaround not much and it can save you of results. a lot of money and really fast “A disadvantage at this track your herd improvement,” point is how long it takes to get Anderson said. results; you’re looking at a five “It’s possible to cut ET costs to six-month wait but hopefully significantly and cut the tail out that will speed up as genomics of your herd by using genomics becomes more mainstream,” he to screen females first. By using said. the results from progeny-test “I think also, as we develop sires, we can have genetically this technology, it’s very impor- superior animals working at 12 tant parenting verification months old.” becomes part of the process.

For Anderson, the adoption We learnt from the 10,000 cow of this science is a no brainer. project that 8% of the cows had “If I mate a cow today and an incorrect sire but at a farmer wait for that bull to graduate level, it’s very difficult to get it all (relying on bull proofs), it will right all the time. take 11 years for that animal to “Parenting verification have an impact in the vat for becomes even more important dairy farmers. That’s a long time if you’re buying internationally. to wait.” nomically important traits have been brought up to, or above, the minimum publishable criteria. These traits include genomic reliability for production (63.9%), survival (43.2%) and mastitis resistance (54.8%).

On average the reliability of genomic breeding values for young bulls (with no daughters) is now equivalent to a bull proof with 30 milking daughters.

Aside from the project, Anderson has already had 15 of his own cows genomically tested this year and is still waiting on the results for a further 22.

He looks forward to stronger uptake of the technology by

SALES CALENDAR

South Gippsland dairy farmer and Holstein breeder, Brian Anderson says genomics – genetic selection based on DNA profiles – is the way to go.

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DAIRY NEWS AUSTRALIA JULY, 2012

20 // MANAGEMENT

Tasmanian farm named Dairy Business of the Year Soil fertility tests led to changes to pasture management and subsequent improvements in production.

DESPITE BEING named the 2012 This included the use of lime which Australian Dairy Business of the Year, increased pH levels from 5.5 to pH 6 the Rosemount farm near Cressy in Tas- and chicken manure fertiliser increased Olsen P levels from 8 to up to 15. mania is not resting on its laurels.

The introduction of new irrigation The property owned by Rob and Jo Bradley and share farmed by Grant and moisture monitoring equipment and Kim Archer is undergoing another and ready access to the Cressy-Longtransformation which will see its herd ford irrigation scheme favoured their double over the next 12 months from production increase.

“We couldn’t farm here without irri450 to 900 cows.

A new 54-bale rotary dairy, as well as gation - it is certainly making it a good land expansion and new pasture devel- dairy area,” Archer said.

One of the farm’s successful innoopment, will pave the way for the mamvations has been the moth undertaking. introduction of three For the owners milking sessions over and sharefarmers the two days. expanded farm will be The 16 hour interbusiness as usual – just vals are reducing costs on a bigger scale. but not harming proGrant Archer says duction or adversely the farm’s success can affecting the cows. be attributed to doing “Our shed costs the right thing for his WHO: are quite a bit lower, pasture and his stock.

Grant and Kim Archer, probably 25%,” Archer Rob and Jo Bradley “We don’t do anyWHERE: said. thing wildly different, Cressy “The biggest benwe just get the basics WHAT: efit has been in the right,” he said.

Dairy Business of the labour savings and the “We grow as much Year reduction of hours, pasture as we can and but our per-cow proutilise as much as we duction is the highest can to save on feeding costs. We use the best perennial rye- it has ever been and the cows enjoy it grass species and have invested in good and seem to have more energy.”

Putting together a good work team irrigation systems to lower the costs of and making sure they stay abreast of production.”

Archer remains modest about the industry developments is another key to success, according to Archer. With success.

“We’re pretty lucky. We’ve got good manager Steven Saltmarsh and assisland and during the year of the judg- tant manager Jaimie Clarke secure in ing we had good seasonal conditions their roles and leading a 10-strong workfor growing pastures which meant less force, Archer was even able to spend irrigating, and high milk prices. some time working off the farm as an “The increased processing capacity assessor of dairy trainees for the Tasin Tasmania has given the region more manian Skills Institute. confidence to produce more milk.

“Once we got everyone up and run“We’ve got a good team and we had a ning we were a bit top heavy on labour good season. Even when you have irri- and I wasn’t needed so when I was gation, the grass grows better when it approached about the job I thought it rains.” was a good opportunity to do someThe results which led to the property thing different.” being named the 2012 ANZ Dairy BusiHe is now back full time on the farm ness of the Year are impressive. and with involvement in two other During the year that judging took share farming operations, it is a busy place, the farm milked 500 cows off time.

142ha producing 217,000kg of milk Grant and Kim were also named solids, an increase from 172,000 the share farmers of the year. Not only are previous year. they involved in a 50:50 agreement with During the award period they pro- the Bradleys at Rosemount, they have duced 434/kg MS per cow and have a 50:50 share farming agreement on a increased that to 447 this year. dairy property at Symons Plains and They achieved a 20% return on capi- they have share farmers running their tal and maintained a stocking rate of 3.7 own land at Smithton. cows per hectare.

Rob and Jo Bradley saw the move It has been a remarkable turnaround into dairying in 2008 as a potential new for the property which Archer admits stream of income. was “a bit rundown” when it was conFour years later they are happy with verted in 2008-09 from cropping to a the outcomes and predict more will dairying operation. follow in their dairy conversion footFor the previous six years it had steps, even though their original intenbeen cropped but the dairy infrastruc- tion in buying the land was cropping. ture established in the 1990s was still “When we got the land we did crop largely in place. it for about two years but circumRICK BAYNE

stances led us to look at dairy,” Bradley said.

“The old dairy was capable of being fixed up and re-started, the milk price was high and we had a good share farmer who has come in and done a fantastic job.

“We had no expertise in dairy when we started four years ago but saw it as another income stream which has worked out well.”

The award is testimony to how much they have learned but Bradley sees it as more than that.

“The award is great testament for the district to show that it can perform as a dairy area.

There are opportunities for growth and I think there will be more conversions in the northern Midlands area,” he said.

But the Bradleys and Archers aren’t spending time basking in the glory of the award.

The focus now is on improvements and expansion with their projected herd of 900 to work off 175ha of irrigated land and 100ha of dry land.

The new rotary dairy will be built on the end of the existing 27 a side swingover Herringbone (which itself was revived just four years ago), new pastures sewn on the dryland area, and a new centre pivot will be in place for summer.

“We’re still forging ahead,” Archer said.

Grant Archer, manager Steven Saltmarsh, assistant manager Jaimie Clarke, Kim Archer, Jo and Rob Bradley.

Grant Archer

DAIRY NEWS AUSTRALIA JULY, 2012

MANAGEMENT // 21

Million-litre pond centrepiece of New Zealand dairy conversion STARTING WITH a

clean slate on a new conversion has allowed dairy farmer Phill Everest to design an effluent system that easily satisfies consent conditions and exceeds the farm dairy effluent design code of practice.

A former sheep, beef and arable advisor (and in a dairy farming partnership for 18 years) Phill and his wife Jos are in their second dairy season on the 277ha Ashburton property in New Zealand.

Irrigated mainly by centre pivot, the farm has a 190ha dairy platform carrying 685 cows; the rest is dairy support.

The farm is on heavy ground with a high water table so the effluent ponds are built above ground and are plastic lined. “The water table would be within 150mm of the surface and when we get a lot of rain, it’s probably at the surface in the winter,” says Everest.

“We have gone for a weeping wall design, out of Southland, and we pump into a 1 million L pond. We looked at doing tanks but what we’ve done was cheaper.”

The weeping wall removes the solids and the pond provides 34 days storage, though Everest reckons it holds closer to 60 days storage. The ‘green water’ is recycled through the backing gate in the yard and finally injected into the centre pivot, making a 10% solution.

“Because it’s only water, it goes through the pivot without blocking the nozzles. And we have a little effluent irri-

gator so if we didn’t want to be irrigating, we can put it through that. Quite frankly, it’s a safety net; really, if I’m not irrigating, I don’t want to be using effluent.”

The main pivot covers about 94ha and has boom backs so the sprinklers can’t wet the ground in front of the wheels, minimising wheel ruts.

“What we’re concerned about is heavy soil and pivot ruts, so we sprinkle behind.

“We’ve also tried a few different wheel configurations, including some caterpillar tracks; they use them in the rice paddies in the US. We’ve got some duals on as well and I think they’re as good and a lot cheaper.”

The farm has Aquaflex soil moisture monitoring to ensure the irrigators only run when there is no risk of paddocks becoming waterlogged, so nutrients in the effluent can’t leach down through the soil profile.

“There’s some sneaky technology around that I wasn’t aware of when we started but it became pretty obvious once we got going,” says Everest.

“We’ve put a plastic liner in the pond and GPS’d it so we can dig the pond out with a digger (with GPS on it) and he won’t go through it.

“If I did it again, would I still build a million litre pond? Yeah, probably. But we’ve probably got more than we need. We’re satisfying consents by quite a bit but we’ve looked to the future in terms of the new code of practice and exceeded that by quite a bit too.”

EFFLUENT WORKING GROUP THE CANTERBURY Dairy Effluent Working Group was formed in 2009, working closely with farmers on effluent management.

Since then, the group has supported industry standards and codes of practice and has taken part in initiatives to lift compliance, including regional farmer events, effluent training and development of resources for farmers.

DairyNZ, Environment Canterbury, AgITO, SIDDC, Federated Farmers and dairy companies Synlait, NZ Dairies, Westland and Fonterra are all group members. Farmers looking for information on any aspect of their effluent system should contact DairyNZ or their supply company representative.

Phill and Jos Everest installed a new effluent system on their New Zealand property that includes a 1 million litre pond.

Repairing hoof-friendly laneways If you are repairing your laneways, use the time to improve them as well.

effluent pump systems.

You want a well-crowned and compacted base topped with a firm surface.

Sawdust laid 1000mm deep at track and yard junctions can help stones fall away from hooves and reduce stone bruising when cows step on to the concrete.

Aim for a track with a raised centre and cambered to 1:10 to 1:20 at the sides.

Some farmers use mulched bark or hardwood waste to fill boggy spots to provide a hoof-friendly surface.

Topsoil is not a suitable foundation, but moist subsurface soil and material dug out to make effluent ponds is fine.

Paying more for good-quality materials might save money in the long run.

Soft clay is unsuitable unless stabilised with hydrated lime, evenly spread and uniformly incorporated to a depth of 125mm.

Cement can be used as a stabiliser in foundation layers usually at 1-4%, or you can investigate using enzymes (Paczyme), ionic soil stabilisers (Terra Firma) or a ‘geotextile’ an industrial fabric used in earthworks.

The surface layer is usually a mixture of materials, often small stones, clay (15 to 30%) and sand.

Incorporating 0.3-1% cement can help stabilise and strengthen the surface.

Try trialling small loads of proposed materials.

Well-rounded gravel less than 25mm in diameter is better than large stones that are kicked aside, leaving the surface susceptible to water penetration and damage.

Crushed limestone spread 50-100mm deep is suitable but needs firm compaction.

Sand alone does not make an ideal surface it is abrasive and washes away too readily.

Wood chips provide a soft surface. The chips don’t get wedged in hooves but can cause a problem with

Drains Creating table drains at the sides of the laneway helps to take water away. Recommended size for table drains is 300mm deep and 1m wide.

Spur drains installed every 40 to 80m empty the table drains onto paddocks, but install them closer together on steeper slopes. You know you have a drainage problem on hilly tracks if the runoff is gouging a path down the track to the drain outlet.

Investigate your water table; it needs to be at least 600mm below the surface to help water drain away.

Maintenance Clear the muck that cows kick up to the edges of the lane. This shallow mound can stop water draining away.

Fix hot wires to the lane side of the paddock fences to prevent cows walking in the drains.

Deal with small drainage blockages as they occur, carry a shovel along when you bring the cows in. Clear and maintain drainage points regularly, remembering that water drained from laneways is an environmental hazard and should be contained on the farm.

This is one of the many examples of the dairy service levy at work.

For more information on this and other levy investments visit www.dairyaustralia.com.au

DAIRY NEWS AUSTRALIA JULY, 2012

22 // MANAGEMENT

Good money lurking unseen in ponds STUART REID

I RECENTLY saw two

Where have the solids gone...? Keith and Kim Riley’s effluent pond, Woodville, NZ.

large sludge-filled effluent ponds on a Horowhenua, NZ, farm. They hold about 3000m3.

But I was too slow to point out to the farmer that those 3000 tonnes of effluent probably contained about 2 t of nitrogen alone. Perhaps $2000

of fertiliser value and soil conditioner was just sitting there in mid June whereas we all know the best place for it is the top 150mm of his paddocks.

If I’d thrown 100 green $20 notes in those holes the message would have been obvious: your effluent pond is not a bank in which you keep your fertiliser funds indefinitely. In this case the stuff

should have been on the pasture in the summer or early autumn. (Yes, you must store in during the wet season, but this stuff had been ‘overstored’ if you catch my drift. Ponds are just temporary stopping zones for effluent. I can’t believe the number of lost opportunities I’m seeing.)

One of my field day interests is what other manufacturers are doing with effluent equipment.

The technology and literature on display is mainly focussed on, and highlights, small developments and improvements to the type of technology that did the same job, but for smaller farms, about 40 years ago. Therefore you still see inefficient pumps in droves as well as masses of localised floating or bank-mounted pond mixers, and many irrigators where the applied amount is just guessed.

Never mind that these have seven speeds; the important part is how much they put on the ground, and whether this is less than the soil moisture deficit!

But the sheer mass of this equipment on display is hiding the fact that we have moved on from much of this technology of an earlier time. Farmers will be blinded to the improvements simply because they have to search through so much of the old stuff to get to the new.

Even the regional council and DairyNZ photos and illustrations probably reassure and lead farmers to believe this older technology is the way forward (it sometimes still could be), but the newer developments and ideas are overwhelmed by the images of the older styles of thinking. There is much comfort to be had by choosing older, ‘safe’ technology, but if you think that way then you’ll still drive a car with no engine management computer, and your only telephone will probably be screwed to the wall in the hallway and have a crank-handle.

Now here’s an apology. When we wrote the new industry standard and code of practice for farm dairy effluent in

New Zealand, we actually overlooked something I thought was an ‘assumed practice’ (thorough mixing). We placed a lot of emphasis on irrigators having good uniformity of distribution, and we also suggested the irrigated liquid quantity should be less than the soil moisture deficit. We slipped up especially by omitting to insist on your achieving uniformity in the mixture being irrigated. You may have the perfect irrigator, but if you feed it with ‘thin stuff’ from the upper pond levels (as a floating pump will do) and ‘thick stuff’ as the level falls, then you have bypassed our – even your own – intentions to apply effluent evenly.

(Also, I am forming the view that dilute mixtures are better for the pasture itself, and that the thicker mixtures probably are tougher for the field micro- and macro-organisms to handle.) Frankly, we are seeing too much emphasis being given to floating mixers located in one place in a large pond.

You’d be surprised if you could see the underwater effect. They will vigorously stir a local area but there will be quiet, dead spots hidden from your eyes.

This is where the solids and sludges will lurk, becoming underwater islands that will appear as the pond levels fall. Those sludge islands should have gone out through the irrigator. You might also think a tractor- or bankmounted propeller creating pond circulation is doing a good job. However you can’t see the effect under the water. But try this test. Half fill a large pot with water. Spread a handful of salt (or clean sand, or rinsed coffee grounds) over the surface and stir until you have circulation. Stop stirring and watch what happens to the salt. From my experience, the pond mixing game has to be greatly improved and I am not impressed with much of the equipment on offer. It has a high energy demand for mediocre effect.

• Stuart Reid is managing director of NZ company, Spitfire Irrigators, Upper Hutt.

DAIRY NEWS AUSTRALIA JULY, 2012

MANAGEMENT // 23

Downs farmers batten down to now find the processor will require a maximum of 2.6 million litres next year.

Their business has been geared to HAVING POURED all their energy flatten the production curve to meet and resources into building a successful processor requirements which will help dairy enterprise over the past 10 years, them stay within the narrow parameters Darling Downs couple Scott and Victo- of the new contract.

With prescription feeding manria Menkins are not about to walk away agement, their Friesian herd has been from the industry.

The couple have done projected bud- averaging close to 10,000 litres each gets and devised a business strategy to lactation with 4% butterfat and 3.5% protein. deal with the harsh When they move to new realities of the payment on composition marketplace. next year they hope to It includes diverachieve a price of 57 or 58 sifying their income cents a litre which would stream, abandonbe an increase on the curing three times a day rent 53 cents. milking and targeting Victoria said their component bonuses WHO: adoption of three times to counter a signifiScott and Victoria a day milking had been a cant cut in milk supply Menkins business decision which under a new Parmalat WHERE: stacked up during their contract which comes Oakey growth phase, lifting prointo effect next year.

WHAT: Countering price cuts duction by about 15%.

They have already They initially operhad to absorb a price ated a split herd system cut of 3 cents a litre last November and are now facing new with separate diets for cows, milking challenges to keep their dairy at Rosalie cows three times daily in the first 150 days and twice a day for the remainder Plains north of Oakey afloat.

The launch of Moorlands Coun- of the lactation. try Retreat is targeted at the corporate Moving the whole herd to three market and city families looking for a getaway experience on a working farm. times milking had smoothed the peak The 420ha property aggregation in their lactation curve, but in prepaincludes the homesteads and bull sell- ration for the new supply system they ing complex of the historic Moorlands will revert back to twice daily milking Hereford Stud which operated for five in June.

Victoria said they were conscious of generations until it was dispersed in the need to reduce costs. With electric2002.

Another strategy being adopted to ity and labour among their big inputs, generate extra income from their dairy and with a fall in milk demand, revertherd is a move to artificial mating with ing to two milkings a day made business sexed semen to produce heifers for the sense.

The milking herd which has been export market, principally China.

“We’ve always been known as pos- running at about 320 cows will also be itive people, but it’s getting harder to pruned back to about 300.

The couple started with a herd of deal with the new reality,” said Victoria a school teacher who devoted her- just 40 milkers on 130ha when they self full time to their expanding dairy came back to the Darling Downs in 2002 after four years working in far western enterprise four years ago.

She has focused on breeding and Queensland.

They added extra land and herd herd health and business management which gives her a good grip on their numbers in several increments, eventually outgrowing their old dairy. financial bottom line.

Acquiring a lot of equipment they They had been working steadily to reach their goal of milking 300 cows needed from a closing dairy at Kilcoy and producing 3 million litres of milk four years ago, made construction of

Victoria and Scott Menkins.

GORDON COLLIE

their 25 a side swingover herringbone “We normally only get one cut from Scott blends the ration to a recipe an economic proposition. formulated by their consultant nutri- our forage sorghum, but the last couple The new dairy has continuous milk tionist, feeding out three times a day of seasons have been good and we’ve recording and a computerised drafting into two long concrete troughs either been able to get two cuts,” Scott said.

The diet can include system which has been a boom cottonseed, canola and for managing the herd in groups The Menkins have stopped soybean meal and barley for breeding and herd health milking three times a day and straw as well as prodmonitoring. ucts such brewers grain Victoria said they artificially are now targeting component and reject potato chips inseminate most of the year in bonuses to counter a Parmalat and they are going to try small batches of 20 to 30 cows supply cut. adding waste bread. every fortnight with genetic “We blend a safe diet, selection focused on feet, good looking for milk composition and not stance and udders to reduce mastitis side of a central access track.

Ingredients are stored in concrete just pushing out litres,” Scott said. and lameness.

The feeding mix can be varied to An aim is to extend the time in the bays with easy access for a front end milking herd from the current average loader for bulk handling about 16 tonnes complement opportunity access to grazing improved pastures. of mixed ration a day. of about four years to six years.

The feed yard is scraped clean about Mineral and vitamin additives are Bulls are run with the herd during the hot part of the year from Novem- purchased in bulk and premixed ready once a week and stockpiled manure is spread over the cultivation area at a rate ber to March. Using sexed semen, they for blending into the ration.

They grow their own wheat, but have of about 50 tonnes a hectare with good hope to have 150 to 180 heifers for export after keeping about 75 for herd to buy in corn with the grains finely results.

“We used to feed in the bails, but cracked in a feed mill before being replacement.

The couple instituted a major change blended into the ration in their feed find it is better for the cows to have ad lib access to their complete ration in the to their enterprise about five years ago, wagon.

The property also produces about feed yard. It’s a fairly efficient feeding switching from dryland pasture grazing to feeding a complete mixed ration in a 4000 tonnes of silage a year which is system which I can manage on my own,” Scott said. stored in 1000 tonne bunkers. graveled feed yard.

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DAIRY NEWS AUSTRALIA JULY, 2012

24 // MANAGEMENT

Cows cause unseen soil compaction ANDREW SWALLOW

YOUR COWS might not be pugging your paddocks, but are they causing unseen compaction and consequent production losses?

New Zealand scientists at Agresearch’s Invermay campus are seeing this on some dairy farms in North Otago.

Their work is part of the Land Use Change and Intensification Project, a ten-year project AgResearch is running, now in its eighth year, looking at changes to soil structure on farms as production increases with newly installed irrigation.

In North Otago, most have converted from sheep and beef, and maybe a bit of crop, to dairying as the water’s come online.

“What’s happened is that with irrigation there’s

been an increase in production and there are a whole lot of pressures on the soil that were not there before,” explains Seth Laurenson.

soils we’ve seen a huge impact on structure.”

On the plus side, despite naturally quite vulnerable soils in the area, the extent of severe

“Unlike pugging where damage and consequent production loss is obvious, compaction can easily go unnoticed.”

The project has three phases. The first was a series of experiments to assess soil structure changes between dryland and irrigated farmland under cattle and sheep grazing. The combination of irrigation and increased grazing intensity is changing soil structure, generally for the worse. How much worse depends on management.

“Where there’s been high stock density on wet

damage is limited.

However, unlike pugging where damage and consequent production loss is obvious, compaction can easily go unnoticed causing lesser, but more persistent losses in production, Laurenson points out.

The second phase of the work has been to look at what to do where soil structure has deteriorated.

Trials compared natural recovery with mechan-

ical aeration. While the latter saw soil biology reinvigorated, it did little for structure, the researchers found. “It’s good, but it must be done in combination with good management of livestock.”

Done at the wrong time, mechanical intervention can also do more harm than good, so check soil is dry enough to avoid smearing at depth, and to ensure compacted layers are fractured, adds Laurenson.

But the best approach is to prevent the damage happening in the first place, he stresses.

“On a cost benefit basis it’s better to avoid doing the damage, than try to recover it. You should only need to aerate soil if you’ve made a mistake. You can speed up the recovery process with aeration but you need to change the management

The combination of irrigation and increased grazing intensity is changing soil structure, generally for the worse.

Is your farm’s soil like the left, or the right, asks Agresearch’s Seth Laurenson.

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paddocks will help reduce the risk of compaction.

If stock must be put onto a wetter-than-ideal paddock, take them off as soon as they’ve had their feed, suggests Laurenson.

“Density of stocking, and duration, both affect the amount of compaction. Give them three or four hours on the paddock, then stand them off on less vulnerable soils or standoff facilities.”

As for production losses due to compaction, previous work has shown typically a 2% reduction in pasture growth for every 1% drop in porosity.

A healthy porosity for soil under pasture is 15-18%, but in extreme cases of compaction AgResearch has found it down to 6%.

“Below 10% is where real problems begin as soil biological activity is severely reduced, organic matter is lost, and with it the ability for the soil to recover naturally.”

lines for farmers that will help determine when to remove cows from paddocks.

Trigger values will be determined by soil type and soil moisture deficit.

That may be measured by meters such as Aquaflex, though such meters only measure where they’re positioned, portable TDR probe-type meters, water balance sheet calculations and visual assessment.

Soils likely to have the longest ‘do not graze’ periods post irrigation or rain are those with high clay content and low organic matter.

“The organic matter is what holds everything together. The North Otago soils are quite low in organic matter, and they have a high clay content, so they’re vulnerable to being compacted.”

Adjusting irrigation schedules and/or grazing rotations to avoid putting cattle onto freshly watered

practice that caused it.”

Avoiding compaction in the first place means little or no lost production, and the risk of run-off and consequent environmental damage is reduced.

“If the soil’s compacted, two things happen: there’s a lot more movement of water horizontally due to a reduction in soil infiltration rate and secondly, because of the reduction in airspaces, there’s less water held in the soil; so you get greater frequency of saturation excess.

“Furthermore as the air space decreases with compaction, soils remain wetter for longer, thereby enhancing the likelihood of subsequent grazing when soils are still wet – thereby compounding the risk of compaction.”

The third phase of the project is looking at ways to assess soil moisture and make grazing decisions accordingly. The aim is to produce guide-

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DAIRY NEWS AUSTRALIA JULY, 2012

MANAGEMENT // 25

Milking profits from irrigation A NEW project at the Gatton Dairy

Research Centre aims to take some of the guesswork out of calculating irrigation needs for producers growing dairy forage crops.

New irrigation infrastructure will be used in tandem with newly updated ICalc irrigation management software (at www.dairyinfo.biz) developed by the Department of Agriculture, Fisheries and Forestry (DAFF).

University of Queensland Gatton Campus farm manager, Mark Bauer, said the ICalc program calculated irrigation requirements for the Gatton dairy research herd, with the aim of boosting forage production by applying irrigation water more uniformly and supplying sufficient water to meet forage evapotranspiration requirements.

“Maximising irrigation efficiency will help to improve productivity and profitability, by working out how much water is needed per crop and allocating water wisely across different campus

programs,” Bauer said. ”ICalc looks specifically at the uniform distribution of water and how that affects water use efficiency (WUE) in our irrigated crops, including barley, maize, lucerne and wheat.”

ICalc is an easy-to-use softwaredriven calculator that determines seasonal irrigation water requirements for a range of pastures and crops across Australia.

The program has the potential to bolster forage water use efficiencies across the 400 Queensland dairy farms that currently use some form of irrigation, as well as other industries, such as horticulture.

The software was written by DAFF dairy systems modeller Gordon Simpson and dairy agronomist Dr Mark Callow.

“ICalc can help farmers to be more precise in their water use calculation to enhance their forage or crop productivity,” Dr Callow said.

University of Queensland Gatton Campus farm manager, Mark Bauer; DAFF dairy agronomist Dr Mark Callow from Gatton; and DAFF dairy systems modeller Gordon Simpson, Toowoomba; with the ICalc irrigation management software at the UQ Gatton campus.

ICalc helps growers calculate the volumetric water requirements of forages in terms of mega litres per hectare.

It uses daily rainfall, evapotranspiration data, crop factors and irrigation method efficiency to determine gross crop irrigation requirement.

Irrigation water requirements can be calculated by selecting the average, highest or lowest rainfall years, thereby simulating expected good or poor seasonal growth. Up to 50 years of climate data can be selected to calculate

water requirements.

ICalc was originally released in 2011 for the Queensland dairy industry, and agronomists and consultants across Far North Queensland and South East Queensland have been working with dairy producers to demonstrate the program’s benefits of determining seasonal water requirements to assist in local irrigation water allocations.

Dr Callow said the feedback from growers already using ICalc was positive because of its versatility and time-

liness, as many had been experiencing changes in water allocation.

Producers can access the free ICalc software directly by visiting www.dairyinfo.biz or contacting Gordon Simpson on telephone (07) 4688 1229 or via gordon.simpson@daff.qld.gov.au In the next 12 months, ICalc will be profiled in a range of DAFF research and extension activities, including the Irrigation Specialist Discussion Group and a Gatton-based barley water use efficiency trial.

‘Use nitrogen wisely’ Cliffs discover BALA TIKKISETTY

IT’S SENSIBLE to be cautious

when applying nitrogen fertiliser to pasture during winter for a range of economic and environmental reasons.

Winter applications of such fertiliser are generally least effective for promoting grass growth. Slow growth of pasture in winter and excessive drainage can result in nitrate leaching directly from fertiliser before plants can take it up.

And any “excess” nitrogen can make its way to waterways.

So it’s important that farmers have clear information about the risks involved with winter nitrogen applications on their individual properties.

A property’s nutrient budget, combined with a feed budget, helps farmers understand whether they are using too much or too little fertiliser. From there, they can potentially manage costs better and reduce their impact on the environment by working out a pragmatic nutrient management plan.

From a technical perspective, the key term to understand is the “response rate”.

This response rate is the amount of pasture grown in terms of kilograms of dry matter per hectare per kilogram of nitrogen (N) applied.

For example, when 20 kg N/ha is applied and an additional 200 kg DM/ha of pasture is grown the response rate is 10 kg DM/kg N applied.

The response is dependent on

several factors such as soil temperature, plant growth, soil moisture, the deficiency of available N in the soil and the rate of N applied per application.

The timing of N fertiliser application is a key consideration when it comes to ensuring nutrient uptake.

It is good to apply nitrogenous fertiliser when the pasture cover is between 1,500 to 1,800 kg DM/ha.

This ensures that there is sufficient leaf area for photosynthesis leading to good pasture growth.

The impact on profitability of applying N is dependent on the utilisation of the extra feed. Therefore, N needs to be applied to fill genuine feed deficits.

Winter applications of such fertiliser are generally least effective for promoting grass growth Anticipation of feed deficits and application of N fertiliser four to six weeks in advance is critical to filling these deficits with quality feed and getting the best economic response from fertiliser use.

The best response to N fertiliser occurs on fast growing pasture, when other factors such as moisture and soil temperature are not limiting growth. Response rates also depend on the season and on the N application rate. In winter, at the same application rate, responses are lower and slower than other times of the year. The response rate also declines

when the application rate (single dose) is higher than 40 kg N/ha.

Nitrogen fertiliser reduces N fixation by clover by about one kg/ N/ ha/year for every three kg N fertiliser applied. In addition, clover content will be further reduced if nitrogen boosted pastures shade the clover.

This effect is seen during spring.

The amount of N cycling in pastoral systems is greater than other nutrients and it is also more mobile than most other nutrients. This leads to the potential for significant losses of N into the environment through leaching to ground water.

Excess nitrate levels in groundwater will restrict the use of the water for drinking and can have other impacts on water quality. Groundwater nitrate moves laterally into streams and lakes where it can affect algae and plant growth, fish and other animal habitats.

Overall “N conversion efficiency” for a farm is calculated as a percentage of the total N in farm product divided by the total N inputs into a farm. For a dairy farm, around 40 per cent is probably a reasonable score.

The progressive farmers, irrespective of farming types, are focussing on achieving increased productivity with an aim of minimising environmental impacts.

The bottom line is that avoiding or minimising N fertiliser application in late-autumn or winter reduces the likelihood of any direct leaching to waterways.

• Bala Tikkisetty is a sustainable agriculture coordinator at the Waikato Regional Council in New Zealand.

who’s the daddy

DAIRY FARMERS Barry and Suzanne Cliff recently used genomic test results to improve the accuracy of their herd records, ensuring accurate Australian Breeding Values (ABVs) of their cows and their future daughters and granddaughters.

The couple farm at Stratford in Victoria’s Gippsland region, milking 500 cows with their son Anthony.

“Over the years, we have recorded the details of thousands of calves born here.

We are meticulous about keeping accurate records. I guess you’d say we have an eye for detail,” Suzanne said.

Because of the quality of their herd records, the Cliffs were invited to participate in a genotyping project conducted by the Dairy Futures CRC. The project involved genotyping 10,000 Holstein cows to improve the reliability of genomic breeding values.

Across the 10,000 cows in the study about 8% were identified to have inconsistent parentage records. This was fewer than expected, and reflects the excellent record keeping practices of the participating herds.

The Cliffs submitted hair samples from about 450 cows for genomic analysis in the study. Of those, 21 had inconsistent parentage.

Determined to solve the puzzle, Suzanne went through the farm’s pocket diaries dating back almost 10 years.

“In some cases the dam was joined to two different sires in different AI rounds, and the calf was born between

the two dates. Although we made a best guess at the time, it was the genomic test that identified the correct sire,” she said.

In other cases, Suzanne could see the original paper entry had question marks beside the calving record, indicating there was some uncertainty about which calves belonged to which cows. And one case came down to human error in recording the cow ID on the hair sample submitted for genomic testing.

Suzanne corrected the parentage records on her on-farm software and this data was transferred to the herd recording centre.

She is looking forward to seeing the genomic ABV (g) results for the affected cows in the next release.

“Updating the records gives me peace of mind that our cows are correctly recorded; and so will be their daughters and granddaughters in the future. Genomics are an exciting advance, not just for genetics enthusiasts, but also for commercial farmers like us,” she said.

Holstein Australia offers a genotyping service for all dairy farmers with Holstein cows or bulls (www.holstein.com.au).

DAIRY NEWS AUSTRALIA JULY, 2012

26 // ANIMAL HEALTH

Dehydration kills calves, not scours ANDREW SWALLOW

HOW MUCH milk and electrolyte do you give a scouring calf? Too often the answer is not enough,

A calf needs to drink at least 10% of its bodyweight in fluids everyday.

judging by independent calf rearing expert Bas Schouten’s workshop at last week’s South Island Dairy Event, Dunedin.

“It’s most important to remember a calf needs

CAlf SCourS? ACT fAST

to drink at least 10% of its bodyweight in fluids every day. That means a 40kg calf needs at least 4L and it will comfortably take 6L,” he told delegates.

If a calf has been scouring for a day before it is detected, as is quite likely, it will already be 5% dehydrated so needs an extra 2L of electrolyte just to get it back to normal. “So it needs a minimum of 6L of electrolyte.”

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Whether scours are nutritional – white faeces due to protein (casein) escaping from the abomasum and passing straight through the small intestine – or infectious, “treatment is exactly the same,” he stressed. “The calf will die of dehydration and lack of energy, not due to the bugs. Get as much milk and electrolyte in as you can.”

Many vets still say don’t give milk to scouring calves, based on the theory the fat and lactose in the milk feed the bacteria or virus causing the scours.

But the calves desperately need the energy the milk provides and it will not exacerbate the scours, he said. “The whole thing is basically a myth.”

Electrolytes typically contain only half the energy of milk and a calf needs 3L of milk just for maintenance.

“Six litres of any electrolyte is only half the energy requirement of a calf... you cannot get enough [energy] in.”

Schouten’s regime for treating a scouring calf is electrolyte in the morning, milk at midday, electrolyte again at teatime, and then ad lib electrolyte overnight. “Do that and tomorrow it’s going to be bouncing.”

Shifting scouring calves to separate pens only serves to spread infection and Schouten’s preference is to isolate the casualty for ease of management by putting it in a corner with a hurdle across it to form a small pen within the main one.

If more than half a pen of calves is scouring start them all on treatment for scours as it’s a near certainty they all will be scouring soon, he adds.

If treatment is right, calves won’t scour for more than three-four days.

Research work has shown even with rotovirus and calves that received little colostrum, and consequently have low-levels of immune-globulins, only 14% die.

“With good immunity you’ve got a 97% chance of recovery. You do not need any veterinary help at all. All you’ve got to do is keep that milk and electrolyte going.... I want you to understand calf rearing can be stress free.”

As for homemade electrolytes, “don’t do it,” was Schouten’s advice. “You’ll never get enough energy in there.”

One trick to boost the energy content of bought electrolytes is to add a tablespoon of dextrose per litre of electrolyte. “So buy your electrolyte and a sack of dextrose.”

Bought meals are “very safe” and typically contain “a beautiful balance of three grains, molasses, rumen buffers, sodium bentonite and minerals.”

Probiotics are also “very good” value and at 5c/day, adding one to a calf’s feed for the first ten days “is a good investment”.

DAIRY NEWS AUSTRALIA JULY, 2012

ANIMAL HEALTH // 27

‘Well-fed cows don’t need supplements’ PAM TIPA

SUPPLEMENTARY FEEDS do not improve

reproduction when there is sufficient pasture, the DairyNZ Farmers Forum heard in a workshop.

Many farmers think supplementary feeds will improve cow health and reproduction, based on a belief the greater BCS loss in the modern dairy cow – as compared to her predecessor – predisposes her to poor health and lower reproductive success.

But in their workshop ‘Feeding the modern dairy cow – is pasture enough?’ scientists John Roche and Jane Kay said there is little data to support this when cows have sufficient pasture.

The association between nutrition and reproduction for pasture-based systems was recently reviewed. There are three problems with the argument that reduction in reproductive performance over the last three decades is a result of the greater negative energy balance in modern dairy cows or that the problem will be corrected by supplementary feeds in early lactation.

The effect of BCS on reproductive outcomes was reported by J.R.Roche.

(2007).

An increase of 1.0 in BCS loss during early lactation was associated with a reduction in 6-week ICR of 4%; therefore, 6-week ICR was 4% less in cows

losing 2.0 BCS units than cows losing 1.0 BCS unit.

Although a 4% difference in 6-week ICR is important, this is a large difference in BCS loss for a small difference in reproductive success.

In a study in Taranaki, NZ, cows were subjected to a 50% feed restriction for the first 2.5 weeks of the breeding season. This restriction resulted in a 7% reduction in 6-week incalf rate.

Although, again, a 7% reduction in 6-week in calf rate is important, the applied restriction was severe.

BCS loss during the first four-five weeks of lactation is a function of BCS at calving (i.e. fatter cows lose more, thinner cows lose less) and cow genetics; it is not influenced by nutrition, the workshop heard. Therefore, supplementing cows in early lactation will result in more milk production and not less BCS loss.

The literature does not indicate that the failure of the modern cow to get in calf is associated with early lactation nutrition.

However, there is compelling evidence for an effect of BCS at calving on time to oestrus and, therefore, the number of cycles the cow will have had pre-mating; this is known to affect conception rate.

Considering the modern dairy cow is thinner in late lactation, a case can be made for using supplements during the dry period to ensure cows

BIGGER COWS, MORE MILK in bigger Genetic selection has resulted . milk cows, more uction is ■■ The increase in milk prod to body ing ition through energy part er substilow and , gain e condition scor pasture. for ents plem sup of rate n tutio in well man■■ Response to supplements /tonne DM gMS 80k 60is ems aged syst . ents plem sup rove repro■■ Supplements will not imp restricted e hav s cow ss unle duction residuals ture pas (i.e. ture pas to ss acce ha).

DM/ 0kg are less than 1500-160

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When cows have sufficient pasture, supplementary feed is not needed, the Farmers Forum heard recently.

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DAIRY NEWS AUSTRALIA JULY, 2012

28 // ANIMAL HEALTH

Men urged to ‘think like a cow’ PAM TIPA

OFTEN THERE’S

too much testosterone involved when working with cows, Australianbased scientist Darold Klindworth says.

He is often approached after workshops by women asking what they could do about their husbands or partners stressing cows in the dairy.

Klindworth says good stock handling could result in 5% or more milk in the vat. He was urging participants to ‘Think Like a Cow’ at his presentation to the recent DairyNZ Farmers Forum.

“Working with the animals rather than against them makes the work safer, more pleasant and productive for everyone. The goal is to make them decide to do what we want them to do in a timely fashion and to think it is their idea.”

He says cows evolved in herd environments and life was not too demanding. “They certainly were not being chased to a dairy at 5am and being pushed into cramped sheds.”

However there were predators and they were hardwired to respond to certain stimuli – and this is so with the modern dairy cow.

Loud noises mean that cattle must take notice.

Some smells will communicate danger including urine from stressed cows and blood.

Rapid movement suggests potential danger.

Klindworth says most people working with cattle will be aware of the strong social hierarchy that exists in a herd but some do not use it to best effect.

Around milking time in the afternoon it is common to hear horns honking, dogs barking, and on occasions some-

one yelling.

This sound is often backed up by someone riding a motor bike under the tail of the last cow in the herd.

But you cannot push a herd from the rear, because the lower dominance animals are at the back. “Can we realistically believe these animals can push the more dominant animals?”

Often the animals are just being pushed closer together which brings their heads up increasing the chances of lameness.

Most of the hoof is sensitive and he suggests walking on a surface in bare feet to see if it is hoof friendly.

Klindworth says often cows are being pushed because the person would rather be somewhere else.

“Often when they get to the dairy they are already stressed themselves. They do not value the benefits from moving cattle calmly. Stressed

cows get an adrenalin rush. This will hinder good milk let down for up to 30 minutes.”

As the herd moves down the laneway they are roughly in the order they will be milked in and will keep that order as they move into the yard.

Entering in the middle of the yard means they must rearrange themselves. Heads will come up if the yard space is too small.

Klindworth says many dairies are too small for the current number of cows. Some dairies were built for smaller cows and the current animals are too big and getting bigger.

The space you want the cow to stand in to be milked must be large enough.

“Pushing, shoving and belting with poly pipe stresses cows and people. Poly pipe should be banned in the dairy – at least the belting/hitting part.

IN UDDER WORDS...

Calf scours?

Take action now Coopers® Animal Health has reminded farmers of the need to take quick action at the first sign of calf scours.

Technical Services Vet Damian O’Brien said that it is critical for farmers to ensure calves stay well hydrated, as dehydration can kill young calves very quickly.

“Scours can be time consuming and costly, with lost future production from either the death of calves or depressed growth rates.

Rehydrating immediately with electrolytes can save a young calf,” Dr O’Brien said.

“Keeping the calf alive and protecting your future production is the critical first step, but then it’s important to look at the causes of the outbreak, so you can both treat and prevent future outbreaks,” he said.

“Proper diagnosis of the cause is the beginning of a plan.”

Dr O’Brien said that Coopers can help identify the specific cause of calf scours on your farm.

“A Coopers advisor can run a simple calf side test which can identify most causes of scours in just 15 minutes, helping farmers to move to prevention programs immediately,” he said.

This season, Coopers is encouraging farmers to not only take immediate action when calf scours occurs, but to also ensure they seek a

diagnosis of the causes and implement long term solutions. As well as hydrating sick calves with electrolytes, calf scours management involves: • Reviewing management to ensure newborn calves receive adequate colostrum • Discussing your overall programme with your vet and whether antibiotics are required • Managing ventilation and hygiene in the calf housing area • Vaccination for future prevention where indicated Many producers don’t realise just how much calf scours costs when reduced growth, calf deaths, diagnosis and treatment costs are added up. Coopers investigation found that a typical herd of 200 with an 18% incidence was losing $5200 a year due to calf scours.

For immediate action on calf scours call Coopers on 1800 885 576 or talk to your local vet. ® Registered Trademark

“If there are no space/ comfort issues and milking is comfortable and pleasant then cows should enter the milking platform willingly.”

Klindworth says going out too often into the yard to bring the cows in actually trains them to wait for the stimulus of someone coming out

before they will enter.

“Going out quickly into the yard will generally mean some cows move rapidly sideways. This quick sideways motion may lead to some chance of lameness. It also may mix up the cows’ organisation leading to further issues getting cows into the dairy.

Darold Klindworth.

“Dark shadows, blinding lights, distractions, unfamiliar objects, shiny surfaces can all cause cows to not move freely in and out of a dairy.”

Australian post graduate student Tori Scott studied how location of supplementary feed near an AMS encouraged higher levels of intake.

Why are those cows hanging around?

The first option is to offer supplemenTHE LOCATION of a feedpad in an automatic milking system (AMS) can be tary feed after milking.

“Cows with access to the feedpad after a useful tool for encouraging higher levels of intake of supplementary feed, according milking spent up to 25 minutes less at the to recent Australian research conducted by dairy waiting to be milked, and about half an hour less hanging around the feedthe FutureDairy team.

Post-graduate student Tori Scott ing area. Overall this meant that cows fed investigated how the location of after milking spent almost an hour less at supplementary feed affected the time it the dairy/feedpad; and therefore they spent took cows to move back to the paddock more time on pasture,” Scott says.

Feeding after milking is the preferred after milking, and the time taken to return option when the herd’s intake is predomfor their next milking.

Her findings suggest that a clever design inantly pasture, and the supplement fed for an AMS with a feedpad would position at the feedpad is a ‘top up.’ This option enhances cow the feedpad Feeding cows before milking movement with the flexithrough the bility to divert could be a useful tool for dairy and maxcows to supple- encouraging cows to spend imises grazing mentary feed more time on the feedpad. opportunity. either before The alternative is to give cows access to or after milking, depending on the need, which may change throughout the season. the feedpad just before milking.

“Cows fed before milking spent more It could even be possible to give some individual cows or groups of cows access time at the dairy/feedpad but returned to the feedpad before milking while others sooner to the dairy for their next milking.

“Feeding cows before milking could be accessed the feedpad after milking. Automatic milking systems usually have pro- a useful tool for encouraging cows to spend grammable drafting gates which would more time on the feedpad,” she says.

Overall, the location of the feedpad enable this to be achieved.

Feedpad management could be modi- had no effect on milking frequency (the fied to meet different objectives within the number of times a day that a cow is milked) or the time interval between milkings. system.

“The reduction in time spent at the For example, the decision about which cows to feed before or after milking would dairy/feedpad for cows fed after milking come down to the desired level of supple- was offset by a longer time spent in the mentary feeding and the preferred flow of paddock before returning to the dairy,” she says. cow traffic through the dairy.

DAIRY NEWS AUSTRALIA JULY, 2012

ANIMAL HEALTH // 29

Making colostrum quality an exact science KEITH NICOLL milks between 700 and 800 cows on his farm just north of Numurkah, Victoria, and in the last year has employed calf rearer Louise Jakobsen.

Louise concentrates her entire time on Keith’s calf rearing operation, developing and finetuning animal management practices that have been achieving excellent results.

Louise attended the Healthy Calves workshop, held by Murray Dairy in Waaia, and has since integrated the use of a Brix refractometer into their system.

The Brix refractometer is used to measure the quality of colostrum before choosing which batch is given to the calves.

Rivalea Australia animal nutritionist, Lyndal Hackett, who has worked closely with Keith and Louise, said viticulturists have been using them for years to measure the sugar content of grapes.

“Dairy farmers can now measure and assess their colostrum, and with this information change or refine their colostrum management practices.

“It’s an innovation that will help lead to healthier calves and it’s an easy-toaccess, low cost item.”

Louise said their previous system was to give two litres of colostrum at birth, another two litres within 12 hours of birth and another two litres within 24 hours of birth.

A simple visual comparison was made to decide which batch was fed to the calves.

“I gave whichever batch looked the most thick and yellow.

“Now I use the Brix refractometer to assess quality, ensuring that the IgG (antibodies) are 50mg/mL or more, which is 22 on the Brix refractometer.

“It’s awesome, and has made all the difference. The refractometer has shown us that a visual judgment of colostrum can be very incorrect.

WHO:

Louise Jackobson

agement techniques and practices.

“We have excellent calves this year. Last spring’s calves have stayed on the No.2 pellets since weaning, and at weighing it really showed. They averaged a daily weight gain of 1.5kg kilograms

and the biggest ones 2.5kg.”

“What I see as the most important thing when it comes to calf rearing is ‘attention to detail’.

“Correct colostrum management, fresh clean drinking water, the right

rearing environment, and last but not least, the right nutrition.

“Other than that, you just need to spend plenty of time with the calves and just observe, observe and observe. The calves themselves are your best teacher.”

Louise Jakobsen

WHERE:

Numurkah WHAT:

Colostrum measurement

“The other day we had two batches of colostrum both looking the same to us, so before we got the refractometer we would have fed either one, but when we tested them, one tested at 16 and the other at 25.

“Had we feed the colostrum that tested at 16, there is no way the calf would have received enough antibodies and would probably have gotten sick.

“A calf’s absorption rate is never 100%, but more like 50% or less, so feeding the wrong colostrum could be fatal for a calf.

“If we only have colostrum available that measures under 22 on the Brix refractometer, I will use the online colostrum calculator to calculate the volume of colostrum I need to give to the calf to make sure it gets enough antibodies, which is a minimum of 100mg of IgG per feed.

“This has really helped me manage staff too, as everyone knows that they are under no circumstances allowed to feed a calf colostrum before they have tested it with the refractometer and checked on the colostrum calculator how much to give the calf.”

Louise uses Rivalea’s Veanavite’s feed products as part of her program using No.1 pellets for calves before changing to the No.2 pellets when they are 3 months old.

She said she feels very positive about the combination of Veanavite feeds during calf rearing and her enhanced colostrum man-

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DAIRY NEWS AUSTRALIA JULY, 2012

30 // MACHINERY & PRODUCTS

Swan Marsh dairy farmer Bernie Whytcross with his new Massey Ferguson MF6470.

Former mechanic won over by fantastic transmission As Whytcross says: “If you can’t early in his life before coming back reach it in 10 minutes in the tractor, it’s home to milk, Bernie Whytcross is still too far away.”

Five years ago they bought an adjoinvery interested in mechanical issues.

So when he was looking to upgrade ing 37ha and put in an underpass for to a new tractor, he had Sean McGuane access - “it works beautifully, I’d put in of Rhys Evans in Colac go over the another underpass in a heartbeat” - and specifications of the Massey Ferguson three years ago a further 50ha alongside MF6470 in great detail, before he made the previous block involved building a bridge. the decision to purThe cows all calve chase. from June to September “He has good techand Ros has the job of nical knowledge and looking after the calves he explained it very and helping out with the well,” Bernie said. milking when needed.

Bernie and Ros When we visited in milk around 260 cows, early June Whytcross had mainly Holsteins with WHO: Bernie and Ros only done about six hours some cross-breds, at Whytcross in the MF6470, which is Swan Marsh on the WHERE: fitted with a 949 Massey family property where Swan Marsh front end loader, but he he grew up. Two years WHAT: was very enthusiastic after he came home to Massey Ferguson MF6470 about the performance. milk his father died “The transmission is and he took over the fantastic – it’s all done running of the farm.

At that stage the home farm spanned with the left hand – forward/reverse 210ha, 113ha of which is Stony Rises and all the gears, so it leaves the right country where they park the heifers and hand to get on with the other tasks in dry cows in the winter. Since then the the tractor.”

Massey Ferguson’s Dyna-6 ‘Eco’ couple has been on a steady program of transmission uses four simple synland acquisition.

A 38ha out-paddock 6km away was chromesh gears, each with six ‘Dynashift’ speeds. This gives a wide spread purchased about 18 years ago.

AS AN apprentice motor mechanic

engine horsepower, but of speeds within each, 120 horsepower at the allowing gear changes PTO. “That small drop under full load as conin power was also what ditions vary to optimise I was interested in,” he output and minimise said. “Other brands have fuel consumption. a much greater drop and He said there is rarely any need to use WORKING CLOTHES it shows how efficient this CHRIS DINGLE transmission is.” the clutch pedal, which Whytcross claims that makes driving easier and very comfortable. He is also pretty the MF647o met his three main criteria: impressed that the forward and reverse “It does what we want it to do; the price speeds are programmable to reduce was right; and the after sales service and repetitive tasks and speed cycle times. dealer product knowledge is first class.

“This is a real multi-purpose trac“We’ve owned lots of different brands in the past. I’ve always been a tor and it will be great for all the equipment that we have on the property. We bit of a Massey fan.”

They purchased an MF5445 in Octo- were looking for something a bit bigger ber 2007 which they still have as the to improve productivity and the fast second work tractor. hydraulics helps that. You also need to “We bought that early Massey consider the wear and tear on the operabecause the deal suited us with the tor. The Massey is comfortable and nice price, and we traded in a 10-year-old to drive with the air-bag suspension. If New Holland machine on this one. you have employees, it is important that “This new model has gone further it’s safe and you have decent equipment forward in developments, it has unbe- for them.” lievable transmission. It’ll take me six The cab has ‘dual stage’ air susmonths to use it all.” pension that can be quickly adjusted Whytcross could have chosen the between two ride firmness settings to six cylinder Perkins engine available suit paddock or road transport condiin some Massey Ferguson tractors but tions. elected to go with this model with a Part-time worker, Hayden Veen4.4 litre four cylinder ‘SISU POWER’ stra, who is in the middle of a dairy turbocharged engine. It has 125 rated apprenticeship, is shared with his par-

ents’ dairy farm next door. “That works well and for our part we are making the effort to comply with all aspects of OHS on the farm.

“You have to be very savvy these days to be a dairy farmer,” Whytcross said.

The Whytcrosses had already experienced Rhys Evans’ excellent on-farm service with their earlier Massey tractor.

“We feed cattle all year round, so the equipment needs to be reliable. If the tractor stops, the whole thing stops.

“We’ve been fairly consistent customers of Rhys Evans – on and off. We try to buy the gear that suits our farm regardless of where it comes from.”

As well as the two Massey tractors they have purchased a Krone 700 twin rotor rake and a Honda TRX500FM ATV through Rhys Evans.

They say that they are not looking to expand the farm by buying more land.

“We don’t see ourselves expanding past the 280 cow mark. We’d rather do them well than having to grow larger.

We may look at a sharefarmer option in the future.”

• Working Clothes will focus on the performance of a new machine each month. Send suggestions to Chris Dingle on 0417 735 001 or email chris@ springbankfarm.com.au

DAIRY NEWS AUSTRALIA JULY, 2012

MACHINERY & PRODUCTS // 31

Indian cab tractor is good value ranty plan, this represents the most powerful value package available to tractor buyers today.”

The launch of the new 7060 Cab tractor complements the earlier released 8560 4WD Cab tractor in the 60 series range.

Both tractors have rubber isolators on the cab floor insulating the operator from the chassis, and a comfortable air suspension seat.

This has electric-pneumatic operation of seat height adjustment, adjustability of the seat fore and

cab tractor (70hp) from Indian giant Mahindra is designed in Germany. Fit and finish are second to none, says the company, from its Australasian base in Brisbane.

Sagar Bhadkamkar, national manager says, “The new 7060 cab tractor represents the best value on the market with the highest operating weight and lift capacities, at this price point.

“With decent wheel equipment standard, it is a serious, hardworking utility tractor.

It has all-steel construction, large 16.9 x 30 ag rear wheels and 11.2 x 24 fronts. This tractor will push more, pull more, and lift more.

“Combined The cab floor has rubber with our 3-year isolaters to insulate the operator from the chassis. limited war-

aft, along with fore and aft movement of the steering wheel for “supreme” operator comfort.

The cab floor is fully flat with solid rubber matting for grip.

Other comfort features are “numerous” air-condition/heating vents, standard DIN size radio slot, and large sun visors.

There is also a hook for the driver’s jacket and storage area for bits and pieces. Both cab doors are lockable and the rear window opens for greater air flow and visibility when

The 7060 weighs 3425kg providing a substantial platform from which to safely feed out bales.

heating/cooling is not required.

The 7060 weighs 3425kg – in the 60-70hp cab market this is a “substantial platform from which to safely and stably feed out bales,” avoiding the cost of a larger, more

expensive tractor.

It will especially suit dairy farmers with at least 2.3 t lift capacity at the ball ends of the hitch and a 900kg safe working load on the loader.

With two sets of remote standard, also fea-

turing float, detent and kick out, orchard farmers will appreciate the lifting capacity for spraying applications.

Optional carbon filters for the cabin are also available.

Mahindra Ag and

Auto Australia is a wholly owned subsidiary of Mahindra & Mahindra Limited based in Brisbane.

The company has dealer network of 70 in ag and auto segments in Australia and New Zealand. www.mahindra.com.au

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The double self-propelled vertical mixer adds the advantages of a trailed vertical mixer as it is completely autonomous, doing away with the need for a tractor for moving or loading.

The position of the motor on the rear gives the machine better weight distribution and allows greater access to it, facilitating maintenance.

This configuration is ideal for intensive use, as it increases the soundproofing of the cabin and ensures a more comfortable ride.

Dealer enquiries welcomed

DAIRY NEWS AUSTRALIA JULY, 2012

32 // MACHINERY & PRODUCTS

Calf rearers see the UV light A REVOLUTIONARY

system which uses ultraviolet light to purify milk onfarm for young calves is now available in Australia.

This new technology has the potential to protect the well-being of calves.

Early nutrition of calves is crucial, with the first 60 days of life shaping their effectiveness when they join the milking herd.

Waste milk from ‘hospital’

The WestfaliaSurge UV Pure ultraviolet calf milk purifier enables waste milk to be consumed.

or mastitis cows is often discarded, but if treated properly to lower bacterial or pathogen levels, it can replace milk sources that calf-rearers would otherwise need to purchase.

The WestfaliaSurge UV Pure ultraviolet calf milk purifier is a modular unit built around stainless steel UV turbulators.

The UV lamp is inserted into a quartz tube allowing the light to pen-

etrate the milk as it passes over the tube and into a separate calf milk vat. A hot water circuit allows cold milk to be brought up to feeding temperature.

The flexible system is scalable depending on the size of the particular dairy operation. It is fully-automated and easy to use.

GEA Farm Technologies Australia managing director, Peter Maguire, said the ultraviolet light

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penetrates bacterial cells in the milk, destroying their DNA bonds, killing the bacteria and eliminating their ability to reproduce and grow.

“This system kills the bacteria without affecting the nutrient value of the milk, and the immune factors and proteins remain unchanged,” Maguire said. “Vitamins A, B6, B12 and C remain intact and there is even an increase in vitamin D. That doesn’t happen with traditional heat pasteurisation. The milk is never heated above feeding temperature, which helps preserve the milk’s beneficial immunoglobulins.”

Maguire said the UV Pure had been extensively tested at the Wisconsin Centre for Dairy Research and on dairy

farms in the United States, with farmers reporting a decrease in problems such as clostridia, scours and mycoplasma, with the subsequent reduction in calf death losses.

“The farmers are saying that not only are their calves healthier, but they also have heavier weaning weights.”

The Westfalia Surge UV Pure is simple to use with minimal training required for operators.

It will start automatically at pre-set times and calculates the required process time for the amount of milk, reducing time and energy. It incorporates a fully automatic ‘clean-in-place’ wash process after every batch with the correct wash solutions to ensure proper cleaning.

Tel. 1800 789 100

®

Footwork is an easy job with the Hoof Works Crush.

Crush takes pain out of footwork Aitchison uses the world renowned Aitchison inverted ‘T’ boot system mounted on a coil spring and disc coulter undercarriage.

Despite a sowing width of 4.8m the Aitchison 4132T MK2 can be comfortably towed by a 120hp tractor.

›› Excellent trash clearance

›› Direct drill into existing pasture

›› Straighter lines & unique Aitchison boot design

›› Direct drill into maize stubble

›› European airseeder technology

›› Able to drill in arable conditions

›› Transport width 2.75m

›› Better contour following abilities

›› Large capacity seed & fertiliser hoppers

›› Sowing width 4.8m

The Aitchison 4132T MK2 Airpro folds down to a narrow 2.75m transport width this together with large flotation tyres ensures easy and fast transport even over narrow farm roads or bridges.

SUPERIOR PASTURE DRILLS Contact your local Reese Agri Aitcheson dealer for details, or free phone 1800 140 196 Brendan Prentice 0400 540 300 www.reeseagri.com.au

NORTH QUEENSLAND farmer Janeene Wallwork says her family look forward to footwork now they have a Hoof Works Crush.

Wallwork says footwork has become an easy job since installing the Hoof Works Crush, designed by RP Rural Engineering.

“If a cow develops a sore foot that requires attention she can go straight in, have her foot lifted and tended to and then go,” she said. “It all happens during the milking.

“This has freed up time after milking and the long set up process of our old system meant that we didn’t attend to foot problems as often as or as soon as necessary therefore reducing the productivity of the cow.

“Our son has taken over the hoof care duties and sometimes he has two legs up at once and another person working on the front while he does the back.

“The whole arrangement of the crush and the solid nature of it mean we feel safe, the cow looks comfortable and doesn’t seem to struggle as much.”

Wallwork said the hoof is at a good height for working on and with the power, water and hoof care equipment on hand, the family catch, lift, treat and release in half the time it used to take.

“If we wind up the back leg quickly it lessens the initial struggle and secures the leg in place before the cow scrapes the back of the leg. Some cows always struggle but the new crush has made this only a rare occasion.”

Tel. (02) 4473 7276

DAIRY NEWS AUSTRALIA JULY, 2012

MACHINERY & PRODUCTS // 33

Giltrap adopts lean manufacturing GILTRAP ENGINEERING has found another

gear by adopting a philosophy developed in Japan.

The company has been around for over 50 years but hasn’t stood still, constantly increasing the footprint of its manufacturing plant, staff numbers and its product range.

Now like many New Zealand companies, it has taken its operating efficiency and quality assurance to a new level by following the principles of ‘lean manufacturing’ – a system of constant improvement initially developed by Toyota.

The benefits have flowed throughout the business. Factory staff are

more effective and feel they have a voice, productivity has increased, quality control has improved – and the benefits are now flowing to Giltrap customers in the form of a threeyear warranty.

The generous warranty is a by-product of the enhanced confidence Giltrap management has in the output of their business.

As proven by Toyota and the many companies that have adopted the constant improvement philosophy of lean manufacturing, the advantages of all this enhanced efficiency, communication flow, staff buy-in, waste reduction and self-audit-

ing is not just a better bottom line – better products roll off the assembly line.

The entire Giltrap factory, on the outskirts of Otorohanga, New Zealand, has gone through the ‘lean’ mill, with staff and management putting every workflow under the microscope looking for ways to improve the factory layout, sharpen assembly line procedures, define lines of reporting, tidy up work spaces.

The engineering staff have themselves gone through the same process, being put into teams who are encouraged to take responsibility for their own work, and are

required to audit the work of the other teams.

Giltrap managing director Craig Mulgrew and sales and marketing manager Eric Crosby have been impressed with way the factory staff have taken ownership of the production process.

If any team along the assembly line feels the preceding team have not done their part of the job properly, they push the machine – be it a bale feeder or a feed wagon – back down the line to be done again.

No machine makes it to the front door without being subjected to this rigorous internal auditing process. All information

Million drum milestone for Central Murray

Giltrap has adopted the “lean manufacturing” principles developed by Toyota in its New Zealand manufacturing factory.

gathered on the factory floor is logged, discussed by the teams and used to further sharpen the products and the process by which they are made.

And the self-exami-

nation doesn’t end at the showroom or dealer’s yard. Buy a Giltrap product and expect a follow up after six months.

Also expect the comfort of the three-year warranty, which sits on top

of a manufacturing process locked into the neverending philosophy of lean manufacturing – constant improvement.

Contact Giltrap Australia on (03) 9369 6548 or visit www.giltrapag.com.au

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MORE THAN one million drums will avoid landfills

Pond stirrer ensures even mixing NEW ZEALAND manufacturer Reid and Harrison’s new

pond stirrer has stirred up a lot of interest.

“It is suitable for any sort of sump, square or round, and large ponds and tanks,” company principal, Seton Dalley, said.

The pumps, electrically driven, can be frame mounted or fitted to pontoons.

The stirrer is available in sizes 5hp, 10hp and 15hp.

It delivers through a right-angle drive so the effluent is driven out and around, ensuring even and consistent mixing.

Dalley said the stirrer reliably gives total mixing in ponds as big as 50 x 50 x 5m deep and they are more efficient than standard stirrers.

The pond stirrer is distributed in Australia through Dairy Pumping Systems Australia.

Tel. (03) 973 96521

thanks to the efforts of some passionate locals doing their bit for the Drum Muster program.

The Central Murray Regional Waste Management Group has processed nearly a third of all drums recycled through the program in Victoria, preventing 1234 tonnes of waste from clogging up landfills.

Their contribution has also gone a long way for Drum Muster moving towards recycling 20 million drums nationwide later this year.

Central Murray Regional Waste Management Group executive officer Karen Fazzani said the million drum milestone was fantastic news.

“It’s something we’ve been promoting regularly and I’m happy to be involved,” she said. “Councils have been really supportive in the program. In the past we’ve put ads in the paper and we have a fortnightly column that helps promote the program.”

But she said there was still plenty of work to do.

“We know there are still drums out there, there’s always room to collect more,” she said.

Drum Muster regional consultant John Knight knows firsthand how vital the group’s work has been to the program over the past 12 years.

“The group has managed around 25 sites for drum deliveries since starting the program back in 1999,” he said. “They’ve been pretty good to work with and have been fantastic on getting a handle on where the drums are.”

Knight said most of the drums once held chemicals used on broad acre and mixed farming in the region.

“More drums are likely to come through the region as rice farming returns to the region after the huge amount of rain we have received in the last year,” he said.

Since its inception in late 1998, Drum Muster has collected and recycled more than 19.2 million empty agvet chemical containers and transformed them into practical items such as fences, wheelie bins and road signs.

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DAIRY NEWS AUSTRALIA JULY, 2012

34 // MOTORING

Ford’s focus on exhaust sound, sports design ‘ADDICTIVE’ EXHAUST sound and

muscular sports design distinguishes the ‘nextgeneration’ Ford Focus ST. This high-performance car is expected to be released in Australia in the final quarter of the year with an estimated price of $40,000.

The range-topping Focus ST is true to ST model heritage, Ford says, offering “exhilarating performance and handling, plus the sound and appearance expected of such a car.”

This will be the first time Ford has produced one of its performance cars for a global audience. The Focus ST is a product of Ford’s global Performance Vehicles group, which comprises Team RS (Europe) and SVT (USA) engineers, dedicated to developing and tuning products like the Focus RS, Shelby GT500 Mustang and Raptor SVT F150.

At the heart of the Focus ST is a highoutput derivative of

the new 2L Ford EcoBoost four-cylinder petrol engine with 247hp/184kW and 360 N-m peak torque.

One of a new generation of smaller, high-efficiency, low-CO2 petrol engines from Ford, the 2L Ford EcoBoost is a light, aluminium design with high-pressure direct injection, low-inertia turbocharging and twin independent variable cam timing.

The engine delivers 10% more power and torque than the previ-

ous 2.5L unit, and uses 20% less fuel and emits 20% less CO2. Standard transmission is a 6-speed manual gearbox with more ‘sporting’ ratios matched to the engine.

Compared to the standard Focus, the ST model offers more including a chassis lowered by 10mm, a substantially different variable-ratio steering system, high performance brakes and unique suspension tuning.

‘Architecture’ upgrades include a stronger and

stiffer body structure, optimised front and rear suspension system designs, and new electric power assisted steering.

New ‘smart’ technologies in the car include advanced driver assistance, powertrain, chassis and active safety features.

Many, such as the Torque Vectoring Control system – which acts like a torque vectoring differential to enhance cornering stability and agility – have a direct impact on improving driving quality.

DESIGN STANDS OUT THE NEW Focus ST has a distinctive sports exterior whose functional and aerodynamic benefits differentiate the ST derivative from other models in the new Focus family, Ford says.

The ST has unique front- and rear-end designs, “muscular” extended rocker panels and “striking” new alloy wheels based on the classic Y-spoke ST pattern. This stands out at the front end, where the twin upper and lower grilles of the standard car are replaced by a prominent new one-piece design, the maker says.

The front spoiler is all-new, with a deep central splitter framed by small motorsport-inspired spoiler

The new Ford Focus ST will be on sale here in November.

blades on either side, which sweep round and encompass the fog lamps. The spoiler blades are linked to the rest of the body lines through the grille structure reminiscent of the similar treatment in the current Focus RS model.

The front end is completed by details like the gloss black finish to the headlamp bezels, and the bold red ST badge on the one-piece grille.

The car has an integrated roof spoiler with a larger, more exaggerated design than the spoiler on the current Focus ST. It incorporates ducting to the rear screen and is integrated with the vehicle tailgate and roof.

Kia flying high with new technology SMOOTHER GEAR

shifting on the new Kia K9 luxury ‘flagship’ model is one result of aviation technology adopted by this South Korean car maker.

The K9 is now on sale in South Korea and will be launched globally later this year.

Shift-by-wire technology activates the automatic transmission, instead of a mechanical shift. This is similar to fly-by-wire systems used by

aircraft makers on their latest passenger planes.

Kia says the K9’s gear shifting is “much smoother and we could see it used on other models in the near future”.

Other aviation technology on the K9 is a high-tech ‘heads-up display’ (HUD). Used on advanced

fighter jets, this projects vital data on to the windscreen of a vehicle, telling the driver the vehicle’s speed, navigational data, danger signals, and rear and side obstacles. And it warns when the vehicle veers off track.

Also new, Flex Steer

enables the driver to select driving mode (normal, eco, snow and sport), each regulating the engine, transmission, steering and suspension to balance between driving comfort, performance and fuel economy. This gear is likely on other Kia vehicles, especially the SUV and

Crossover, making them safer on dangerous surfaces, the company says.

Adaptive cruise control automatically adjusts the car’s distance from other vehicles.

The K9 will be one of the first cars outside Europe to offer this.

The K9 has Kia’s firstever telematics system that enables drivers to

Kia has released a technological tour de force in the new K9 flagship.

turn on the engine and air conditioning by smartphone.

The K9 has all-LED headlamps that automatically shift the angle and breadth of the units according to the direction and speed of the car, reducing blind spots.

Power comes from a normally aspirated V6 petrol engine with direct injection, giving the power of a V8 with the fuel efficiency of a mid-size sedan, the company says.

The top version of the 3.8 litre engine delivers 334hp.

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