Dairy News Australia Sep 2012

PROPERTY: Renewed interest in dairy PAGE 34

REMOTE WATER SYSTEM New technology wins prize PAGE 33

PROPERTY CONVERSION New dairy uses robots PAGE 23

september, 2012 Issue 29 // www.dairynewsaustralia.com.au

spring growth Prices make their way north. PAGE 5

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Dairy NewS AUSTRALIA september, 2012

news // 3

Farmers reeling from Lion cuts gordon collie

Milk price cuts of up to 11% offered in new

NSW farmer Sam Graham and his family milk 400 Aussie Red cows at Nowra.

PG.18

Western Victorian farmers Mike and Dawn Waite have improved calving through an Ovsynch program. PG.21

two-year contracts by Lion have left farmers reeling with many expected to ponder their future in the industry.

Tier one prices offered to Dairy Farmers Milk Cooperative (DFMC) suppliers were confirmed at the end of August by independent arbitration after protracted negotiations reached an impasse.

The new pay levels come on the back of an earlier confirmed 9% reduction in tier one volumes with tier two prices slashed by 50% to around 15 cents a litre.

DFMC has communicated the variable price offers to about 750 members supplying Lion with 835 million litres of milk across four states.

Base tier one prices offered are: South Australia, 32.39 cents, down 11% on last year; Victoria, 32.64 cents, down 11%; NSW 45 cents, down 4.5%; South East Queensland, 47.59 cents, unchanged; and far North Queensland 48.08 cents, unchanged.

DFMC chairman Ian Zandstra said many farmers would struggle to stay in business with

the new price and volume offers from Lion.

“Unfortunately the impact of supermarket price cuts is now considered old news which nobody wants to talk about. But we are seeing the impact flowing through to farmer revenues,” he said.

“We had forewarning this was coming with the poor marketing performance by Lion which was getting bashed up at retail level.

“But it will still be difficult for farmers to accept. Small producers will feel the pain and those who have geared up production and taken on more debt will be squeezed.

“The hard part is that farmers can’t address lower income by growing their production. They can only look at trying to reduce their input costs. The reduction in revenue is going to leave many in a real bind.”

Zandstra said the Lion price in Victoria was equivalent to $4.60/kilogram milk solids at 3.95% butterfat and 3.15% protein.

While better than competitor offers in that State, farmers were far from happy and were left hanging in for a lift in world prices.

Suppliers in NSW had been particularly hard hit after the loss of Lion supermarket contracts to Parmalat.

“We anticipate the offer to NSW producers will result in a 10 to 12% reduction in farm earnings while in southern Queensland revenue will be down about 6 to 7%.”

Zandstra said there was a real challenge to improve the value of excess (or tier two) milk.

“The price on offer is unbelievable. Lion is just not focused on tier two milk at all. There are markets out there which will take this milk,” Zandstra said.

NSW dairy farm leader and Lion supplier Terry Toohey was also critical of Lion. He said the company just did not understand the liquid milk market.

“They have taken their profits out and are not interested in manufacturing. This has moved all the risk back onto farmers.”

Toohey, dairy chairman of NSW Farmers is also deputy chair of the new group Dairy Connect.

He said farmers would have to consider their future long and hard before committing for two years at the prices Lion was offering.

The new offers were likely to trigger more producers exiting the industry, especially with pressure on costs through rising grain prices and a forecast hot summer, Toohey said.

Gippsland farmer Darryl Light installed robots to reduce wear and tear on his knees and hips. PG.30

News ������������������������������������������������������3-13 Agribusiness ������������������������������ 14-15 Opinion ���������������������������������������������� 16-17 breeding ������������������������������������������18-19 ABVs ���������������������������������������������������� 20-22 Management ������������������������������ 23-26 Animal Health �������������������������� 27-30 Machinery & Products ��������������������������������������� 31-33 property ���������������������������������������������34

mud runner Katunga share farmer Ryan Tuckett is on to his 17th Polaris off-road vehicle. He can’t help upgrading to keep up with the latest models.

See page 34.

Dairy News AUSTRALIA september, 2012

4 // news

SA Farmers stakes claim for peak body status RICK BAYNE

The South Australian Dairyfarmers’ Association (SADA) wants to be recognised as Australia’s third peak industry body.

SADA expects to lodge an application within weeks with Dairy Australia for recognition as a Group B member.

It believes South Australian dairy farmers will have better representation if the application succeeds.

Dairy Australia has two Group B peak industry bodies, Australian Dairy Farmers (ADF) and the Australian Dairy Products Federation. The ADF recently expelled SADA from membership of the national organisation for alleged prejudicial conduct.

SADA president David Basham said South Australian dairy farmers were embracing the push to become a Group B member, which he said would recognise the SADA as a representative group for a significant sector of the dairy industry.

“We needed 100 signatures for the application and we have been amazed by the support,” he said.

“Members are extremely willing to help in the process and non-members are also joining in.”

About 60% of the state’s 300 dairy farmers are members of the SADA and Basham predicts that will grow.

“The SADA is well respected and farmers see value in how we stand up for their rights. We’ve just had three enquiries from non-members who want to join,” he said.

“Becoming a Group

B member would give us rights as a peak lobby group to be consulted when Dairy Australia’s strategic and operational plans are being developed and to be involved in the selection process for board members.”

The SADA could consider nominating a representative for a board position “down the track”, he added.

Basham said South Australian farmers would not be disadvantaged by the expulsion.

“Farmers felt hard done by from the ADF, particularly in the way this was handled. It is no longer a national organisation,” he said.

He said the group was consulting federal politicians and national and state industry bodies to ensure South Australian dairy farmers were well represented.

ADF president Chris Griffin said ADF couldn’t afford to have a member who was undermining its efforts to deliver outcomes for dairy farmers.

However, he said ADF still wanted to engage with South

Australian farmers and hopes to work with SADA and other South Australian dairy organisations to get their input on national issues.

“We are committed to representing your interests and we don’t want to let any disagreement with SADA stand in the way of providing you with strong leadership and solid representation on national issues,” Griffin said in a statement directed to South Australian dairy farmers.

He also said after 12 months ADF would consider an application by SADA to rejoin as a member.

However, Basham said the ADF could no longer represent South Australian dairy farmers.

“The ADF gave up the right to represent South Australian dairy farmers when they removed us as members.”

He expects the application for Group B status to be considered at Dairy Australia’s annual general meeting.

David Basham

New ADF board takes shape State farmer groups have

backed the restructure of Australian Dairy Farmers (ADF), voting in a new constitution for the national organisation last month.

The ‘yes’ vote opens the way for a slimmed-down ADF board to focus on strategy and a new National Council to provide policy recommendations.

Individual farmers can now be members of ADF for the first time.

“It is a very exciting development for dairy farmer representation in Australia,” said ADF president Chris Griffin. “A more financially efficient and better structured ADF will deliver improved value to farmers and state organisations.”

Griffin said changes in the dairy industry had impacted on the financial viability of ADF. Over the past 30 years milk production has doubled but the number of dairy farmers has dropped by twothirds.

This has hit the membership levels and income of State Dairy Farmer Organisations and ADF. ADF was now operating in deficit and without significant change could not continue to function or deliver quality policy and advocacy services for dairy farmers, he said.

ADF’s new constitution includes: • A smaller board – reduced from 15 members to five, of which four would be dairy farmers, focussed on strategy and oversight of ADF operations. The first directors will be Chris Griffen and Noel Campbell from Victoria, Peter Evans from WA and Roger Swain from Tasmania.

An independent director has been advertised.

• A new National Council, comprising 14 members, which would feed information to the national board. This will have representatives from the State groups and will be tasked with providing input on strategic direction and policy matters.

• ADF Policy Advisory Groups open to grass-roots farmers selected for expertise and interest.

Griffin said the board was not there to be representative of the states but to manage the business.

ADF CEO Natalie Collard said the cost of bringing the current 14-member board together meant it met only four times a year and rubber stamped decisions that had already been implemented.

Under the plan, processors will contribute $1.125 million of funding, enabling a similar amount to be used at State level.

The processors directly contribute to the Australian Dairy Industry Council for advocacy and policy work done on behalf of the whole industry.

This work, including funding the fight against supermarkets last year, would be funded by processors while the $1.125 million funded by State farmer organisations and investment dividends would be used for farmer-related activities.

Collard said this would include returning money to the State organisations to help them increase membership, as well as a project fund of $300,00 per annum, where each state can apply for funding from between $2000 and $40,000.

Griffin said any dairy farmer who is a member of their State dairy body may join ADF directly for no additional charge.

“The move improves farmers’ direct access to ADF. While farmers who want to join ADF still have to be members of their State organisations, they can now communicate directly with ADF on national issues.

“State and individual farmer members can attend ADF annual general meetings and, in future, any farmer can stand for the ADF Board provided they are a member of both their State dairy body and ADF.”

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Dairy NewS AUSTRALIA september, 2012

news // 5

Global markets firm earlier than expected ANDREW SWALLOW

THANKS TO drought in the US and

high feed prices, dairy markets are starting to firm a little earlier than many pundits predicted.

Last week’s GlobalDairyTrade (GDT) average winning price was up 6%, consolidating 7.8% and 3.5% gains on August 15 and August 1.

At US$3174/t, the average winning price is the highest since April 3 and 21% ahead of the May 15 recent low of US$2619/t.

“We think [the rise] is at least in part

due to weather in other parts of the world, in particular the US drought,” Westpac senior economist Anne Boniface said.

Slowing soya exports out of Brazil and Russia expecting its worst wheat output in nine years are other factors.

“There’s all this stuff driving grain prices higher and they’re a vital input for northern hemisphere production so we expect [dairy] production to slow.”

But Boniface is hesitant when asked if this is the start of a sustained upswing.

“We still see there being volatility, though in the longer-term trend we see

prices starting to improve in 2013 relative to 2012.”

While tightening supply is the immediate driver, a likely recovery in China’s economic growth rate next year points to firming demand further out.

ANZ rural economist Con Williams predicts prices on the GlobalDairyTrade could top at levels seen at the start of the year (~US$3700/t) but not near the peaks seen in the 2010/11 season.

“Growth in the big economies isn’t that good and the New Zealand and Australian dairy seasons have started pretty well.”

Dairy Australia manager, strategy and knowledge, Jo Bills, said the higher result indicates demand is still good.

“There is still a question mark around supply and the NZ spring will be critical here,” Bills said.

“If production is as high or higher than last year, it will keep a lid on prices.

“If it’s weaker there could be more improvement heading into 2013.”

Fonterra’s August 29 cut in its original forecast of $5.50/kg MS, down to $5.25/kg MS, could indicate an expected strong season in New Zealand.

Murray Goulburn lifted its milk

prices for the first time in the new season late last month, by 20c/kg protein and 8c/kg butterfat.

Managing director Gary Helou said the step-up took MG’s weighted-average available price to $4.63 per kilogram milk solids.

“Improvements in market returns, the positive impacts of increased milk supply and lower operating costs across the MG business are key contributors to this step-up,” he said.

Helou said that the market outlook continues to be challenging due to last year’s surplus global milk supply and a very strong Australian dollar.

Strong wins national Landcare award NSW south coast dairy farmer

Lynne Strong has won the inaugural Bob Hawke Landcare Award.

She won the $50,000 prize for the work she’s done championing the Landcare movement and says she wants to spend the money encouraging others to promote agriculture.

She will also receive an honorary two-year position on the Australian Landcare Council.

The Bob Hawke Landcare Award celebrates an individual who has been involved in championing the Landcare ethic and inspiring others to take action on their own property or through a Landcare group.

This award acknowledges an individual who has demonstrated a remarkable commitment to caring for the land; champions better practices; and gives their time to share knowledge with others so that

they too can prosper.

Strong and her husband, Michael, from Jamberoo, milk 550 cows three times a day at better than five cows per hectare, 2.5 times the industry average.

Converting to a third milking in 2005 resulted in a 15-20% increase in production from the same area.

Lynne said this had proved an effective money-making proposition to say nothing of the environmental benefits.

Through increased feed conversion efficiency, their greenhouse gas emissions were slashed by 30%.

Their sustainable farming ethos was recognised with the award of National Landcare Primary Produce of the Year in 2012.

The Strongs also established the Lemon Grove Research Farm, which provides an opportunity for regional scientific output.

Research trials are overseen by the respected independent consultancy SBScibus, an international authority on dairy health, nutrition and herd management.

Lynne has been an active champion for the dairy industry in the regional community.

“As farmers we need to be actively engaged with our customers in urban areas. If we hide behind the farm gate we risk losing our social licence.

“We can either build consumer trust and credibility with the public or accept the demand for Governments to crackdown and regulate our industry.”

Nowra, NSW, dairy farmer Lynne Strong has won the inaugural Bob Hawke Landcare Award.

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Dairy News AUSTRALIA september, 2012

6 // news

NSW farmers, processor join Dairy Connect RICK BAYNE

A new NSW peak industry body aims

to recruit 250 members before the end of the year.

Dairy Connect NSW has been established as a whole-of-industry organisation to represent dairy farmers, milk vendors, milk processors and dairy manufacturers, suppliers, small retailers, researchers, extension officers and educators.

Chief executive officer Mike Logan said Dairy Connect was being developed as a separate entity but would seek to work with the NSW Farmers’ Association.

“We have had productive meetings with the board of NSW Farmers and hope to develop an understanding,” Logan said.

“NSW Farmers are concerned it has weakened their membership base but we don’t want to do that.”

The new group has been driven by dairy members of NSW Farmers but Logan said it was “not a split”.

“We believe a separate organisation was needed for a better, more efficient model of representation for dairy farmers. Dairy Connect will represent dairy farmers and the industry directly while NSW Farmers will focus on broader agricultural industry issues,” he said.

He said dairy farmers could be members of both organisations.

Dairy Connect has met with hundreds of farmers across the state in a series of regional meetings.

“We’ve had a really good reaction,” Logan said. “Our target was 50 members a month and 250 by Christmas and we are well on track to achieve that.”

One processor has joined and negotiations are continuing with two more, while vendors have also come on board.

He admitted there were challenges in getting farmers and processors “to understand they are better off together than apart”.

“There is the battle over price but there is a greater war over demand and external issues. It’s a challenging concept but it is already showing benefits.

“We need to face our challenges as a

All quiet in the paddocks of NSW but there has been plenty of movement at board level.

united voice, not as separate sectors as we have done since deregulation which has resulted in us being ignored by governments.”

“We believe that by connecting the value chain the industry can be effectively represented, set the agenda and address its needs,” Logan said.

Dairy Connect Ltd is seeking establishment funding, including Graham Park Trust, a fund currently held by

Make more money while the sun shines.

NSW Farmers in trust for the dairy farming industry at the direction of the NSW Farmers’ Dairy Committee.

NSW Farmers’ Association president Fiona Simson said the association would continue to have a dairy committee and would “continue to speak with a united voice on the big issues that affect our farmers”.

“It seems an extraordinary time to join with the processors to fight an

issue that is arguably being driven by them and the supermarkets.”

She said it appeared the dairy committee “has been more focussed on moving away from NSWFA and accessing the trust funds than policy issues affecting our members”.

Association chief executive Matt Brand said it was up to each dairy farmer to decide what state body they want to represent them.

“Our key strength is in a united voice across all commodities and all policy issues that affect farmers,” he said.

“We believe we are the best organisation to represent the interests of all dairy farmers in NSW – but at the end of the day it is up to them to decide their future.”

Dairy members of NSW Farmers will soon receive a ballot paper asking them to vote on changing the trustee of the Graham Park Trust from NSW Farmers to Dairy Connect Ltd. Brand said this was not about choosing to be a member of either organisation as membership was a separate process.

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Dairy NewS AUSTRALIA september, 2012

news // 7

New WA Farmers Dairy president looks to Asia stephen cooke

The long-term future of the Western Australian dairy industry could lie north – in Asia, says the new president of the WA Farmers Dairy Section, Phil Depiazzi.

The Dardanup dairy farmer said the WA dairy industry can’t rely on the domestic market to sustain it so WAFarmers will investigate export opportunities to Asia.

Wesfarmers funded the Fresh Opportunities report, released last year, which investigates these options and Depiazzi said he doesn’t want it to “sit on a shelf”.

The report, prepared by Strategis Partners, said WA’s key competitive advantage is its proximity to Asia. Its future lies in targeting and hitting the premium markets in Asia where dairy consumption is growing strongly, the report said.

The report said WA could become an innovative exporter and overcome the small size of its domestic market – like New Zealand did 30 years ago – with an emphasis on ‘fresh’.

The guiding policy for enlarging the dairy industry in WA is to increase on-farm production and increase WA’s share of the dairy market in Asia by re-positioning the WA dairy industry from its predominantly domestic focus and growing its exports of value-added, mainly fresh dairy products into Asia.

This would need a coordinated program of investment in market development and manufacturing, and a re-engineering of the supply chain.

Depiazzi said WAFarmers would start by quantifying returns from Asia and further explore the logistics of shipping and air freight to Asia.

A vision for the industry would give farmers confidence to invest in their farm, similar to what the Tasmanian industry is seeing, Depiazzi said.

The report said the WA industry would need to expand production to 777 million litres with around 365 million litres available for export each year.

The Department of Agriculture is currently investigating opportunities for export markets and WAFarmers would liaise with them, Depiazzi said.

“New opportunities to instill confidence and provide long-term sustainability are crucial,” he said.

“If we find other markets, processors wouldn’t feel obliged to supply supermarkets at any price.

“The Chinese have bought Ravenhill dairies – there could be opportunities for a joint venture there.”

Other issues necessary for the sustainability of the industry are improved relationships with processors and the supermarkets, as well as resuming the collective bargaining group.

“The sustainability of the industry is a concern,” Depiazzi said.

“There seems to be a lack of vision – where do processors want to go? Extra milk in the supply chain seems to be detrimental at the moment.”

Depiazzi said WA Farmers had reasonable communication with processors but they would like to see those processors stronger with the supermarkets.

“We’d like them to be a bit stronger to get higher returns for farmers.

It always seems easier from the processors’ perspective to keep farmgate price the same rather than try and get more from the retail end.”

WAFarmers will conduct a sustainability report to give them a sound footing for future discussions with processors and supermarkets.

“We want to have some sound facts to take to the processors and supermarkets,” he said.

“We’ll try to get supermarkets and processors to think long-term, at the moment customers are the focus of the supermarkets.”

Lion freighted milk from South Australia to WA over the summer because of a shortage.

“That’s normally a situation for processors to lift prices. We received a small increase but the price is not reacting like it should,” he said.

“From a state perspective, ag has the ability to generate a good return for State, now and into the future.

Unless something happens quickly, that potential will be lost.”

Depiazzi is a third generation dairy farmer, milking 250 mainly Holsteins and also three-way cross, on 160 effective hectares, with his wife Leanne, brother Kevin and his wife Belinda.

They also lease some property.

He was senior vice-president under former dairy president Peter Evans for five years and is keen to build on the work conducted under Evans.

“Peter has done a mountain of work for the State’s dairy farmers as Dairy Section President and has dealt with a number of issues in recent times,” Depiazzi said.

“The work he, Dale Park and WAFarmers have done to lobby supermarkets and processors for a fairer price for dairy farmers has been terrific and I look forward to building on their strong foundation to get dairy farmers the prices they deserve.

“It is well documented that the WA Dairy Industry has been going through a difficult period and now more than ever we need to work together to get the best results for the State’s dairy farmers.”

Depiazzi urged all WA dairy farmers who weren’t members of WAFarmers to strongly consider joining the Federation.

“We have been battling the supermarkets for more than 18 months and in the last four months have made some real progress,” he said.

“Governments, businesses and other organisations stand up and

listen to bodies with a large voice.

The more dairy farmers we have as members, the greater voice we have and the more influence we can wield.”

Phil Depiazzi, new president of the WA Farmers Dairy Section.

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Dairy News AUSTRALIA september, 2012

8 // news

Farmers take message to Brisbane show crowd FRUSTRATED dairy farmers have taken their message direct to the people at this year’s Brisbane Royal Show (the Ekka). Eighteen months after Coles slashed its store-brand milk to $1 per litre, farmers have come together at the Ekka, “where city meets country”, to give the people of Brisbane the facts about the disastrous impacts of the socalled milk war.

Queensland Dairyfarmners’ Organistaion (QDO) Brian Tessmann said the Ekka message was about people power, as recent social media commentary had reinforced that the general public was very sympathetic to the pressure being placed on farmers once they understood the issues.

“Consumers love and enjoy fresh milk, and we know they want and expect farmers to be paid a fair price for fresh milk and the hard work they do seven days a week rain, hail or shine,” Tessmann said.

“What farmers are explaining to people at the Ekka is that current prices are not fair and not sustainable, and represent a serious threat to dairy farming families and the fresh milk supply in Queensland.”

Tessmann said farmers told Ekka

visitors that all Aussie milk consumers can support dairy farming families by not buying cheap supermarket milk and buying and supporting local milk brands.

“Coles has continually tried to state that its actions would not impact farmers.

“Just in the last week in a room full of farmers at the Ekka, Coles made such suggestions again, which we see as absolutely ridiculous corporate spin.”

Tessmann said it is becoming very important for dairy farmers to use social media to ensure their message is heard, particularly when it comes to the milk war, which has now been running for 19 months. He cited the impact caused by NSW farmer Jane Burney, who posted a message about the ugly ramifications of the milk war on the Coles’ Facebook page. This post attracted 74,000 ‘likes’ and 4500 comments before Coles removed it from the site.

“Her posting simply told the truth about the disastrous impacts of the milk war and by doing so she spread the message to a huge audience,” Tessmann said.

“The post gained such momentum that the story featured in a national

Queensland farmers are sending their message of Cole’s detrimental pricing scheme to the public via protests and social media.

newspaper, and was viewed by hundreds of thousands of people, including politicians, the ACCC, and even the executives of Coles.

“The industry continues to make a concerted effort to highlight the impact of the milk price war in the major media,” he said. “We continue to do this successfully, but we are doing so while contending with metropolitan media who are easily distracted by other

issues, and while also competing against the large PR and advertising budgets of the big supermarkets.

“Coles are currently spending a small fortune on advertising, including whole double page ads in mainstream metro newspapers and also running their Status Quo red guitar ads on prime time on the mainstream commercial TV stations.”

Tessmann said this advertising

money had an influence. He said following the protest from dairy farmers at the Ekka, the story was not covered

by Brisbane’s main daily paper.

“The simple fact is that more than 19 months on, it is getting harder to hold the mainstream media’s attention – but we all know that it is even more important to get our message across as the impacts of the milk war are becoming increasingly devastating.”

Coles records $1.36b profit Dairy farmers

have paid the price for Wesfarmers’ $2 billion profit, according to the Queensland Dairyfarmers’ Organisation.

Wesfarmers announced a $2 billion profit last month, underpinned by Coles’ profit of $1.36 billion, an increase of 16% on the previous year.

Wesfarmers is the owner of Coles, which triggered the milk price war on Australia Day 2011 by cutting retail store-

brand milk to $1 per litre.

“Dairy farmers are paying the price,” QDO president Brian Tessmann said.

“Farm gate milk prices have been sent ‘down, down’ since the milk war began, and are at absolutely unsustainable levels.

“Nearly half of dairy farming families in Queensland have already seen their incomes drop by an average of about $40,000 this year, and the

others are under further downward price pressure after already seeing their incomes devastated the previous year.

“Worst of all Queensland has lost 40 dairy farming families over the last 18 months since the Coles-led milk price war started.”

Tessmann said Coles was refusing to acknowledge the impact of their action on farmers, and continued with corporate spin that they were

Coles will continue to invest in its brand development program. absorbing the price cut.

“Where will the smiling executives of Coles and Wesfarmers be when the shoppers of Queensland go to the dairy cabinet and find that it contains no fresh Queensland milk, because the milk war is sending farmers out of business?

“The shareholders of Wesfarmers, while being happy to receive an increase in the dividend, need to understand that it has come to them at an awful cost. To help their conscience they should use the dividend to purchase branded milk.”

According to the 2012

report, over the year, the Coles supermarkets division ‘Down Down’ and fresh produce ‘Super Specials’ campaigns and the reinvigoration of its Fly Buys loyalty program have succeeded in driving sales.

The report emphasised the transformation of Coles’ supply chain, the completion of Easy Warehousing which, together with Easy Ordering, resulted in major improvements in on-shelf availability, lower levels of

loss through waste and improved efficiencies for both Coles and its suppliers.

Into the future, Coles is to continue implementing its turnaround strategy, with a continued focus on value to help customers combat rising living costs.

Coles will also be investing in a range of new initiatives to deliver sustainable growth in the longer term, including continued category and Coles brand development.

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Dairy NewS AUSTRALIA september, 2012

news // 9

MDBA’s grab for more water The Murray-Darling Basin Plan in its

current form will drain irrigation communities of more than 2750 gigalitres.

The plan is due to be tabled in Parliament this month and Federal Water Minister Tony Burke has said he wants it passed this year.

He gave the ministers in the Basin states an additional two weeks from the original deadline of August 26 in a bid to gain consensus. However, this appears unlikely.

Burke has unilateral legal powers to direct changes but has said he wants the States to reach a consensus. South Australia has already said it will challenge this in the courts.

SA Premier Jay Weatherill has said 4000 gigalitres needs to be returned to the environment and that the Murray-Darling Basin Authority’s figure of 2750GL was insufficient.

However, the main concern for the Australian Dairy Industry Council and other groups, including the Victorian Farmers Federation, is the Government’s decision not to consider outcomes already achieved through the Living Murray environmental program.

The Living Murray environmental program was first developed back in 2002, to return water to six sites recognised as important and in need of more water.

Since then, 500 gigalitres have been returned to the environment under that program.

However, the MDBA has said savings made under the Living Murray program have been taken into account and would not be offset against the required target of 2750GL in water savings.

The Basin State Ministers had proposed a Sustainable Diversion Limit (SDL) adjustment mechanism of 650GL in its response to the draft plan released earlier this year.

This sustainable diversion limit (SDL) adjustment mechanism recognises water recovered for the environment through methods like engineering works, investment in infrastructure and on-farm water efficiency and changes to river system rules and operations. It prevents the need to simply buy irrigation rights.

The Ministers believed most of this total would have comprised offsets from the Living Murray

hearings over the last 12 environmental works.

Australian Dairy Indus- months that The Living Murray environmental try Council chairman works would be considChris Griffin said the offered as offsets would sets. enable simi- Offsets But the lar or better already amended environachieved Basin Plan mental outthrough released comes to be achieved Living Murray last month excludes using less Program are these works, water not counted in claiming they than the were already 2750GL the new plan. factored Murray Darinto the modelled 2750GL ling Authority wants to baseline. recover.

VFF water spokesman The MDBA told Richard Anderson said as several parliamentary

it stands, the plan allows the Federal Government to allocate on-farm water savings over and above the 2750GL, even if that target hasn’t been reached through other means.

“This is absolutely unacceptable.

Irrigators should not be disadvantaged for trying to save more water on-farm,” Anderson said.

“Where is the incentive to become more water efficient, if this means your region may be a target for government buyback?

“Any water which is recov-

ered through on-farm water efficiency projects must go towards meeting any outstanding gap in local or shared reductions.”

Anderson said farmers needed the Murray-Darling Basin Authority to provide certainty on how the Plan’s Sustainable Diversion Limit adjustment mechanism can legally allow these savings to be incorporated.

“SDLs won’t kick in until 2019. The adjustment mechanism in the Plan must have the ability to recognise existing envi-

ronmental works and measures to ensure all current and future water savings go towards the 2750GL target.

“Otherwise, even more water will be taken from irrigators and their communities which simply drains regional wealth.”

The new plan will be tabled in Parliament in the spring session.

Labor needs the Coalition’s support in the Senate to have the plan approved as the Greens have indicated they will vote against it in its current form.

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force chair Daryl Hoey said regional communities were shocked that the authority could try to move the goal posts at the last moment.

“It seems the authority is determined to preserve its 2750GL recovery target, no matter what,” Hoey said.

“It is not just the Living Murray works – new provisions such as ‘initial conditions of development’ and targets for the lower lakes have also been introduced.

“These provisions will stymie attempts to adjust the SDL using offsets such as environmental works and improved river operations.

“For the Government, this should be very simple: the more environmental offsets that can be found, the more taxpayers’ money it can save by not having to buy the water from irrigators instead.

“And the environmental outcomes will be similar or even better this way. It seems like a no-brainer.”

Hoey said the Commonwealth had paid an average $1700/ML for high reliability and general security water in the southern Basin; these water entitlements are likely to continue being the target of future buybacks.

“So, they could save more than $1 billion if they don’t have to buy 650GL, and achieve similar or better environmental outcomes through The Living Murray offsets instead.” he said.

“We are urging the federal and State water ministers to reinstate the Living Murray works in the offsets equation, and remove the new provisions that stymie any SDL adjustment using offsets.”

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Dairy News AUSTRALIA september, 2012

10 // world news

China wants expansion in record time peter burke

CHINA IS ‘industrialising’ its dairy industry, says Professor Keith Woodford, of Lincoln University.

He told Dairy News Australia that in one giant leap China is trying to do in years what the West has taken 150 years to achieve – create an ‘industrial’ model for dairying.

“There is a huge change occurring in the dairy industry in China. The traditional system was peasant farming where farmers might have two or three cows.

“They were fed on crop waste, then taken to a local milking station where the milk would be aggregated and end up with the processor.

“The problem with that system was problems in food safety; the melamine scandal in 2008 was of course the trigger for change, with thousands of children affected.”

Woodford said the Chinese Government had taken the food safety issue very seriously, seeking a solution in very large-scale dairy units.

“So rather than trying to aggregate up a few producers to bigger herds of 20-30 cows, they are trying to move to

“I know of a processor in the west of China who has 15,000 small farmers who supply his factory. His aim is get this down to just 10 suppliers.” an industrial model.

“That means starting from scratch, turning to units that might be 30ha running 3000 cows, or even bigger, running 5000 cows, [with] the processor in control of the raw milk supply.”

Woodford said for example, a company called Modern Dairying had got close to 250,000 cows on about 50 farms. In comparison, Fonterra has three farms with close to 10,000 cows.

He predicts Fonterra will probably have around 100,000 cows eventually.

The move to ‘industrialise’ the dairy industry is happening right across China.

“I know of a processor in the west of China who has 15,000 small farmers who supply his factory. His aim is get this down to just 10 suppliers.

“He’d love to have a New Zealand

Fonterra currently run 10,000 cows in China and will probably have 100,000 eventually.

farmer go up there and set up some of these units,” he said.

Woodford said the Chinese were adopting an American farming system.

This is a mixed ration based on alfalfa hay, corn and soybean - a lot of it imported.

“Overall there are huge imports going on,” he said.

“Last year China imported 57 million tonnes of soybean, much for its pig industry which is also industrialising.

One pig unit I am aware of has 500,000 sows producing 10 million pigs a year.”

According to Woodford, China has no problem producing all the rice and vegetables for its human population, but is struggling to produce enough feed for all the pigs and cows.

He said they were importing large quantities of corn but huge amounts of soybeans – mainly from Brazil as well as quite a lot of alfalfa hay coming from the USA.

Woodford said few people in China would question Fonterra’s decision to run farms there.

If Fonterra wanted to be a big player in the dairy industry there it had to produce milk there.

“If Fonterra wants to sell ice cream and yogurt to China it will be a mix of fresh milk and milk imported from New Zealand. We can’t be a part of that scene unless we have a fresh milk supply over there as well,” he said.

China looks beyond NZ to meet dairy demand pam tipa

CHINA IS starting to source more

dairy products from Europe and the US, says Susan Kilsby, a dairy analyst at Agrifax.

With the Chinese dairy industry not yet fully recovered from the melamime scandal, New Zealand has supplied the lions’ share of dairy products China has imported in recent years, she says in ‘Growing with China’, a monthly

report by BNZ’s chief economist Tony Alexander.

“But China is now beginning to source more dairy products from other countries,” she says.

The type of product mix demanded and the sources are changing.

“New Zealand continues to totally dominate the supply of whole milk powder … but the total volume of whole milk powder demanded by China actually fell by 2% in the year to June 2012.

“Instead China is importing much larger quantities of skim milk powder and whey powders.

“The whey product is sought for use in infant milk powders. In the 12 months to June 2012 imports of whey based products increased by 38%. This product is mainly supplied by European countries and the US. “ Kilsby says China has long been a producer of milk. “Milk production in China increased rapidly from 2000 to 2007. But in 2008 milk production

stumbled as the melamine scandal was revealed.”

Kilsby says China has invested heavily in its milk supply and supply chain.

But it is likely to take years for this investment to be fully realised. “We have seen huge investments made in large scale dairy farms and dairy stock.

But it takes years to get such large farms operating at the optimum level as the steep learning curve associated with managing these farms needs to be ascended.”

On a positive note she says China is expected to remain the world’s largest importer of dairy products and New Zealand’s largest market for at least the next few years.

New Zealand exporters enjoy the benefit of the Free Trade Agreement and strong relationships with Chinese importers.

“But New Zealand exporters can expect to face increased competition, as other countries try to increase their share of this massive market.”

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Dairy NewS AUSTRALIA september, 2012

world news // 11

No muscle to milk ‘trickle’ warning SUDESH KISSUN

FONTERRA is shrugging off a warning

the New Zealand milk wave may be about to crash.

Co-op chairman Henry van der Heyden says milk production is forecast to grow 2.5 to 3% and he can’t see any reason why it will slow down over the medium term.

In a report last month Rabobank warned milk production will go “from a torrent to a relative trickle.”

The author, Rabobank senior analyst Hayley Moynihan, says New Zealand milk production is likely to grow at a far slower pace over the next decade than has been evident over the past two.

While forecast growth of 30% over the next 10 years is considered rapid by most industry measures, it will be pedestrian by recent New Zealand standards, Moynihan said.

“The heady days of more than 300 new farm conversions nationally in a single season are over.”

Hayley Moynihan

The increased cost of dairying will also stifle growth, the report says.

With our dairy operations becoming increasingly intensive, feed and interest costs have become embedded in production systems.

Farmers have increased output through growing more feed on existing or purchased land or by buying in supplementary feed and this has structurally increased their cost base, she said.

“As a result, fertiliser, feed, wages and interest costs now comprise almost 70% of net dairy cash income, up from 40% in 1999-00.”

Moynihan said these increased costs have reduced dairy producers’ ability to weather a downturn in the market.

Van der Heyden said he can understand what Rabobank is saying about on-farm costs. But he points out a lot also depend on the returns from other land uses like sheep and beef farming and cropping.

“We strongly believe milk production will grow 2.5 to 3% per annum in the medium term.”

According to Rabobank, the relative economic returns for dairy compared to other agricultural industries have largely driven the change in land use.

“The structural increase in the global milk price was behind much of the change in land use from sheep, beef and cropping operations towards dairy farms,” Moynihan said.

“And this trend has seen a significant lift in production in the South Island, with the south now accounting for 36% of national production, up from around 15% ten years ago,” she said.

Moynihan said growth in the sector was also underpinned by the readily available access to credit.

“Dairy farmers were generally able to service a greater level of debt than their drystock or cropping counterparts, with capital asset growth historically providing the equity to build, or to leverage from, for further expansion.”

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Regulations to hit production THE TIGHTENING of environmental regulations is also seen as a constraint to future growth in dairy, according to Rabobank.

While regulations vary by region, consent is increasingly required for nutrient use, effluent treatment and disposal, management of existing waterways, stock wintering

policies and water usage.

Growth is likely to come from increased production per cow rather than more farms.

Hayley Moynihan said the changes in the dairy industry will require a shift in focus. “Farmers will need to look at how to squeeze productivity gains from their existing herd, as well as

ways to control their costs,” she said.

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Dairy News AUSTRALIA september, 2012

12 // world

UK farmers tackle price cuts with 10-point plan SUDESH KISSUN

A COALITION of UK dairy farmers has agreed on a 10-point strategy to tackle a milk price crisis facing the industry.

The Dairy Coalition says its new strategy will help to secure the longterm future of the industry and will focus on exposing bad practices, boosting farmers’ role in the supply chain and ensuring the

Coalition strategy ■■

Expose those whose damaging behaviour undermines the liquid milk market.

■■

Work with milk buyer farmer representatives to farmers’ interests are protected.

■■

Plan for producer organisations to rebalance negotiating power in the milk supply chain.

■■

Work to finalise the code of good practice for dairy contracts.

■■

Develop a process to monitor and report on the implementation of the Code of Good Practice for Dairy Contracts, to ensure its earliest and complete adoption.

supply chain is transparent and fair.

The coalition is also including cheese in its campaign, calling for ownlabel supermarket cheese to be British. NFU dairy board chairman Mansel Raymond says the first priority of the Dairy Coalition is to see a fair and functioning market place for the UK dairy industry.

“All farmers should receive a fair and sustainable milk price, one which at least covers their costs to produce milk. This is the only way we will be able to ensure shoppers have the choice of British dairy products on supermarket shelves.”

Raymond says it’s clear the UK dairy market has failed. Market highs have not been passed down to the farm gate, he points

out. “All milk buyers must develop their own appropriate and transparent milk procurement and pricing models that are equitable for all parties and cover farmers’ production costs.

“The British dairy industry can have a bright future if every part of the dairy market works to capture market opportunities here and abroad. We have a growing demand for fresh, British, quality dairy products from a growing world population and we must be in a place where we can respond.”

UK farmers groups last month mobilised members and staged protests UK-wide to protest price cuts of between 2.5 and 3.5c/L from August 1. The protests paid off when major processors deferred

Bramshall dairy farmer Andrew Whitehurst brought one of his cows to a protest march last month.

or cancelled their plans.

The UK’s largest dairy co-op, First Milk, backed down first, its chief executive, Kate Allum, saying it has a responsibility to farmers to show leadership and remove uncertainty.

“On that basis, we have decided to immediately withdraw the planned August price cuts [resulting from] moves by our

liquid customers. This has been a turbulent time for the whole industry, but unless we immediately grasp the nettle, the progress we are seeing right now will be short-lived.

“Dairy farmers have spoken with one voice over the last few weeks, and they’ve made it clear they reject the existing model where they are price takers and favour

working together to gain an equal seat at the negotiating table. It is therefore critical the whole dairy supply chain now looks to develop better structures and relationships for the short, medium and long term.”

Arla Foods, Robert Wiseman Dairies and Dairy Crest also dropped plans to cut the farmgate price.

Drought slashes bumper US crop estimates alan harman

THE US Department of

Agriculture’s latest forecast for the national corn and soybean harvests reflects what farmers have been seeing for the past two months: vanishing prospects for a good year as their crops wilt from lack of water, a Purdue University specialist says.

The USDA’s National Agricultural Statistics Service predicts corn growers will harvest 35.4 million ha, down 2% from its June estimate and the lowest level since 2006.

Despite planting the largest number area in corn in 75 years, growers are forecast to produce 10.8 billion bushels, down 13% from 2011.

A bushel (unit of volume) of corn weighs 14.5kg; a soybean bushel and a wheat bushel weigh 27.2kg.

Soybean growers, also greatly affected by the drought, are forecast to produce 2.69 billion bush-

els, down 12% from 2011.

Purdue Extension agricultural economist Chris Hurt says the USDA’s August crop production report paints a bleak picture as Indiana and other eastern Corn Belt states suffer through the worst drought since at least 1988.

The report says Indiana’s corn crop will average about 247 bushels/ha, down from 360 bushels in 2011. The state’s soybeans are projected to yield 91 bushels/ha, down from 111 bushels a year earlier.

“These are remarkably low numbers, especially the corn,” Hurt says.

“Indiana is the worst of the major production states in corn production.

We knew that early on.

It started here and then spread to the west.”

The industry had expected bumper crops in Indiana and across the Midwest when farmers began planting earlier than normal this spring, in then favorable weather – unseasonable warmth and little

rain. Forecasts were for a corn crop of 14 billion bushels, nearly one billion more than the previous record.

But conditions soon deteriorated for crops as the heat intensified and fields got little rain over the next three months.

Hopes for a bountiful harvest evaporated as the drought worsened weekly, preventing many corn and soybean crops from developing enough to produce strong yields.

By early August, 73% of the state’s corn crop and 53% of soybeans were in poor-to-very-poor condition. Because of that, USDA estimates Indiana’s 2012 corn crop will yield nearly 38% below trend yields.

“This is the worst departure from trend yields in Indiana in at least 75 years,” Purdue Extension corn specialist Bob Nielsen says.

Even with short corn and soybean crops, Hurt said growers could still find themselves in a prof-

A surreal-looking soybean field near Dayton in Tippecanoe County, Indiana, is a victim of the 2012 drought.

Purdue Agricultural photo by Tom Campbell

itable situation, depending on final yields and crop insurance coverage. “”Corn revenues are up 64% from what we expected in the spring

and soybean revenues are up 24%. Some growers might have an opportunity to take advantage of the higher prices.

“Crop insurance will

be another factor. We estimate 65-75% of Indiana’s corn and soybean crops are insured. Those compensation dollars will be large this year.”

And wheat production, 85% complete by July 29, remains largely unaffected by the drought and is forecast at 2.27 billion bushels, up 13%.

Dairy NewS AUSTRALIA september, 2012

world // 13

NZ dairy industry reliant on overseas milkers PETER BURKE

MIGRANT WORKERS

are the saviour of the dairy industry, says a Lincoln University social scientist, Dr Rupert Tipples.

Last year 1894 visas were issued to overseas migrants coming to work in the dairy industry, but Federated Farmers Dairy chairman Willy Leferink claims at least 33% of dairy cows are milked by migrants.

Most migrants who come to work in dairying enter New Zealand under the ‘immediate skills shortage’ provisions.

This covers ‘assistant herd managers’ and is generally the entry-level category.

Most go to dairy farms in Southland and Canterbury, some to Waikato and smaller numbers to other provinces. Their wages and conditions are the same as New Zealanders’.

Tipples says dairy shed work is rated worldwide as ‘3D’ – dirty, difficult and demeaning.

Hence many young Kiwis don’t want to work in dairying or move from the cities where unemployment is high. The result is migrant workers are welcomed with open arms by dairy farmers, Tipples says.

About 50% of the migrants come from the

Philippines. Many have worked in dairying in the Middle East and are regarded as very good workers. “A kiwi job, even at minimum rates, is still far higher than they would ever earn in the Philippines, so the jobs in New Zealand are attractive.”

Tipples hopes to do more research on the impact of migrant workers on communities, dependant on his bid for funding by the new Ministry for Business, Innovation and Employment.

Gathering more data will benefit the dairy industry and rural communities, he says.

A company called FRENZ has recruited dairy migrants for at least ten years. Managing director Christiaan Arns agrees on the importance of migrant workers. “The rapid growth of the industry has far exceeded the availability of local workers.”

He says conversions in Southland and Canterbury have been the big demand drivers for overseas workers but nationwide expansion has grown the demand for staff.

FRENZ recruits from the Philippines, Russia, Sri Lanka, Argentina, South Africa, Brazil, Uruguay, France, Holland and Ireland. Many recruits have degrees; some work as herd managers, some at

lower levels.

Farmers give very positive feedback on the migrant workers, Arns says. “They see them as skilled, educated and committed to a career in farming and they love being in New Zealand.”

New Zealanders shun dairy work for many rea-

sons, says Arns. Some are simply not cut out for it: early mornings, long hours and a rural setting are not everyone’s idea of paradise.

Unemployed people sent to work on dairy farmers frequently don’t last and lack the commitment of migrant workers.

Federated Farmers says at least 33% of dairy cows in New Zealand are being milked by immigrants.

L A I C SPE T R O REP

locals still wanted WILLY LEFERINK has employed about 50 migrant workers since 2001 and is impressed by their calibre. He has some still, including a South African sharemilker.

“Migrants are great workers. But remember, we are all imports.”

Leferink prefers to see more New Zealanders in the dairy industry, but concedes it’s hard and there are social issues to overcome.

DairyNZ says though it accepts the need for migrant workers, its objective is for local people to be trained as the “next generation of farmers”.

Dr Mark Paine says New Zealand has impressive young people with a good work ethic who should be directed into the dairy industry.

“We have programs in secondary schools so that careers advisors are better informed about the options for young people in the industry. It is different from 25 years ago; there are more career options now for young people.”

Paine says DairyNZ works with Immigration New Zealand and the AgITO to ensure migrant workers have training and support while working on farms.

NEXT ISSUE: OCTOBER 2012 TRACTORS, MACHINERY & ATVS Next month’s special report reviews the latest developments and news from the farm machinery sector; the hardware that makes the modern farm tick. We’ll focus on equipment that’s relevant to dairy farming – no big broadacre gear reviews, just gear that helps the dairy industry farm smarter. Watch out for it in the October issue of Dairy News Australia.

Dairy News AUSTRALIA september, 2012

14 // agribusiness

WCBF slashes expected profit to a 4.6% increase in supplier numbers and a 3.7% increase in milk sourced slashed its profit guidance from other dairy compafor the 2012 fiscal year. nies. The company paid an However, it has stated average farm gate price of an improved outlook for 41.4 cents a litre. global dairy demand and is The company said both still reviewing options for the Great Ocean Ingreexpansion. dients and Warrnambool In a statement to Cheese and Butter Japan the Australian Secujoint ventures contributed rities Exchange, the strongly in 2012 with a $3.2 WCBF advised that full million contribution to net year net profit after tax profits.

(NPAT) could be The company between 20-30% “Early 2013 indications said the full year below fiscal 2011. are for continued impact of its 2011/12 The company restraint in commodity capital project previously indiprices for the first half of investment would cated that profit be realised in 2013. would be in line the financial year.”

These include: with 2011 at ■■ Sungold Fresh $18.49 million. closing inventories on the The dairy product Milk Expansion – a 50% prospect of improving group cited the decline increase in plant capacprices in the new finanin prices for internationity was completed in cial year. ally traded dairy products the first half of the 2012 Managing direcas a reason for the revised financial year with new tor David Lord said 2012 profit guidance. customers coming on was a year of two halves The company also line in 2012 and 2013.

■■ Skim Milk Powder expects price weakness to where strong prices were achieved in the first six continue in the first quarPlant Upgrade – the months before declining ter of 2013. technology based capasharply in the second.

In a statement to the bility upgrade of the “A deterioration in the Australian Stock Exchange powder plant was comglobal economy combined (ASX), the company pleted in the first half with a high Australian said its balance sheet and was a key contribudollar and a surge in global was strong with gearing tor to maintaining sales production put downward levels well within policy volumes and margins range despite a significant pressure on pricing in the during the second half investment in the recently second half.” of 2012.

■■ Mil Lel Specialty Total milk intake for announced five year Great 2012 was 919 million litres, Ocean Road national Cheese Plant Upgrade a net 4.5% increase. cheese supply agreement – capacity upgrade supMilk intake grew due with Coles. ported a 63.3% increase

Warrnambool Cheese and Butter has

Earnings per share at 27.8 cents were down 10.7 cents reflecting the reduction from the 2011 result and the increase in total shares on issue, it said.

Total revenue for 2012 was $497.8 million, down by 1.3% or $6.3 million on 2011.

The company said total sales volumes were down 5.1% largely due to a strategic decision to hold higher

in sales volumes in 2012.

■■ Coles National Cheese Supply – the recently announced Coles five year cheese supply agreement provides underlying support for the Mil Lel plant upgrade and WCB’s strategy to expand its domestic retail business.

Lord said the Great Ocean Ingredients and Warrnambool Cheese and Butter Japan joint ventures are expected to continue to perform strongly in 2013 and WCB will continue to leverage its new product development

and marketing skills to build a growing portfolio of high margin products in domestic and international markets.

“The consumer goods segment is expected to rebound strongly in 2013 with increased Sungold volumes and the full year impact of the Great Ocean Road cheese supply agreement with Coles,” he said.

Lord said the latter half of 2012 saw a rapid decline in international commod-

ity prices along with a general deterioration in global economic conditions.

“Early 2013 indications are for continued restraint in commodity prices for the first half of the financial year,” he said.

“Dairy futures are trending upward in USD terms however foreign exchange strategists are forecasting further appreciation in the Australian dollar over the 2013 financial year.

Record Fonterra exports Fonterra’s record end-of-

season quarter has been the cooperative’s biggest ever May, June, and July – with 620,000 metric tonnes of dairy products loaded on ships for export to over 100 markets around the world.

Fonterra New Zealand Milk Products managing director Gary Romano says the cooperative has shipped 36% more than the same period last year.

“The record milk production in the 2011/12 season has meant Fonterra has exported more product at the end-of-season than ever before.

“We traditionally ship just over 450,000 MT at this time of the year, but we’ve had a lot more product to move, and this has meant some creative planning across the wider supply chain to manage and store the additional volumes. For the first time since Fonterra was formed we chartered our own break-bulk vessel to send product to the Middle East.”

Demand is usually up ahead of the month of Ramadan, but the demand spike was more than anyone had expected and there was not enough available container capacity at that time of year. This meant Fon-

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terra had to charter its own vessel, which docked earlier this month, to take 7500 MT of product to the ports in Dubai and Saudi.

“Our farmers did a great job making the most out of the favourable weather conditions during the season, and it has been our responsibility to make sure we get the most out of every drop of milk we collected and bring the best returns back to our farmer shareholders,” says Romano.

“The new season has now started with the milk flowing again to our sites around New Zealand.”

Dairy NewS AUSTRALIA september, 2012 Dairy NewS aUSTraLia june, 2012

agribusiness // 15 agribusiness // 17

Globaldemand grain spike hitsstrong home Export remains Hemisphere counterparts. the ability to utilise more export markets. While grain prices is likely to cents/litre in March (AUD 41c/L) to 28 • John Droppert is industry pasture provides local elevated grain prices hasten the re-balancing incremental change in milk production (year-on-year) Euro cents/litre (AUD 36c/L) in April. weeks from ending, attention is now analyst with Dairy options undoubtedly impact farm farmers more of global dairy demand the Northern Hemisphere Profit margins are Australia. under pressure in the focused on 2012/13 milkhave prices as farmthan their Northern profitability in Australia, and supply, with producover recent months US, and in NZ Fonterra has announced erscaused consider strategies for the coming ers who are most a spike in global the final payout for the 2011/12 season year.

In prices, some in domestically-focused exposed to grain grain an enviglobal impact has been cut from NZ$6.75-$6.85/kg MS regions, renegotiated contracts incorunder greatest presronment of lower farmJohn Droppert gLobaL impacT to NZ$6.45-$6.55/kg MS (AUD$4.96porating lower prices and reduced ‘tier sure. gate pricing.

JohN DropperT $5.04). one’ access are undermining farmer With demand These movements Effectively, global dairy markets are confidence supply stability.events For to the other side of season, with a risk margin still strong, have beenand rapidly transrebalancing. Lower prices will both Shifts in private and promany farmers in export-oriented the world as higher feedlabel contracts easing global ferred to Australian dairy deducted.

The speed of slow production growth and stimulate cessor have seen milk and the regions, a lower price outlook to prices grain for rationalisation Australian the milk production farmers’ delivered feed relative grain market demand, and as this occurs we will ulticompanies adjust their intake requirethegrain current season not only adds to thefarmers. dairy Internaprices, increassluggishness of dairy mar- creates market mately see a price recovery. Key factors ments and pricing meethave the combined changchallenges of doing tional grain markets also to kets opportunities and ing pressure on business, produc- but seems to to watch on the global scene will be the ing demands of a highly pressured retail to contradict the positive medium term also the likelihood tion margins. While these benefit from a great deal maximum negative effect rate at which milk production overseas marketplace.

Lower contract prices and outlook of Asia-driven dairy demand of liquidity, allowing them at present. of improved developments have the slows in response to lower prices, the a lack of alternative supply opportunigrowth. farmgate returns for potential to accelerate the to rapidly price-in producBut in all of this lies those in south-east Asia and the Middle impact of the current financial worries flows.

2012 milk production in the US ties present challenges in a market with Dairy Australia’s indicative outlook tion changes and market southern farmers rebalancing of the global something of a silver 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 information as it comes with exposure to dairy supply chain and lining: the rapid rise 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 to hand. boost commodity prices, uation and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. How- of the Australian dollar.

The dairy producthe timing and extent to 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 which this occurs remains tion system is more comucts remains a positive and will conMS and a full year average price range population providing a degree of cer- 2.3% on the previous year. New Zealand demand growth in the market. plex and its markets are unclear.

This situation has seen the scales tinue to grow with the middle class in between $4.50 and $4.90/kg MS. The tainty beyond the current adjustments. production is widely expected to finish slower to respond. With While El Niño 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 picthe exception of a few conditions threaten to ture and summarises the many factors financial crisis and subsequent com- market influence given 95% of NZ milk kets, with commodity prices retreat- with changes in diet and with increasing derivative products, pardevelop in the Southern at play; the key theme of the current sit- modity price recovery, farmers in is exported. Argentina is also enjoy- ing steadily over recent months. Butter urbanisation - and also in conjunction ticipation remains limHemisphere, the US 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, ited to those physically Midwest is experiencing global supply growth (see chart) - with nificant supply gap in Brazil prevents 2011 peaks, whilst powder prices have the domestic market is supported by a dairy supply chain. its worst drought in half a trading product – and 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 peras such, market movecentury. have subsequently been reduced in capita consumption. Whilst the dairy producing drinking milk, many farmers ern Hemisphere amongst those expand- ing South America. ments are generally more Although some areas Despite wider economic uncer- most exporting regions. The average market is currently a challenging place face a re-balancing market in the form ing output as their margins increased. closely related to the funseen reliefoffrom late 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 balof have renegotiation supply damentals (supply andfurther enhanced milk as importing countries like China and for example, dropped 12% from 32 Euro ance will ultimately return.

August, the damage has and reduced access to ‘tier one’ supply. ditions have demand) rather than senlargely been done and timent and news. When late rainfall may in fact combined with the long be counterproductive – lead times associated with increasing the costs assoherd expansion, they tend ciated with drying the to play out over a longer grain to an acceptable time frame. moisture level.

While signs of a dairy With harvesting now austraLian DairY, ASEAN-Australia-New commodity price recovery underway the USDA rice and wine exporters to Zealand FTA (AANZFTA). are emerging as US milk expects the corn crop “Protectionist sentiMalaysia are the biggest output slows, the timing to be the lowest since ment over agricultural winners in a free trade is largely dependent 2006/07 – with the large goods is rife and grow- on agreement (FTA) signed New Zealand milk area planted only partly ing across the globe, so producto provide portion pack between the two counaustraLian FooD tion, which is expected offsetting the lowest in this context it is pleas- to (200-330ml) configuratries last month. company Freedom Foods increase has 4-5%managed this season. per-hectare yields since ing Australia tion for beverage prodThe deal, signed after Group Ltd is to build a a sustained 1995/96. soybean har-to forgeUntil an agreement seven years The of negotianew milk processing plant ucts. hold, the vestallows is yetatoliberalised commence withrecovery Malaysiatakes that has The NSW location will tions, to cash in on growing combination of fastbut the USDA’s latest dealt with some sensiprovide access to the most licensing arrangement demand in Asia. grains markets forecast tips a tive moving agricultural issues formonthly Australian liquid milk The plant, to be built in sustainable and economic and slower-responding covered by harvestand of around exporters allows 73 mil- not effectively southeast Australia, will be source of milk. Pactum has says Fraser. dairy markets will strong links to the Austraaccess higher value12% onAANZFTA,” the first Australian greenlionfor tonnes –down “While under the retail fields expansion in UHT in lian dairy industry and will continue to squeeze the Sealing the deal: Malaysian trade minister Mustapha Mohamed lastproducts. year. agreement expand its arrangements It guarantees 10 years. margins of grain-feeding with Australian counterpart Craig Emerson after signing the deal.

Drought isAusalso affect- AANZFTA of Australian agri- the with dairy farmers for tralian wine exporters Freedom’s wholly farmers across ing the Black Sea region mostdairy but also through technical Despite the complekey interests supply of milk. The new thein best tariff treatment owned subsidiary Pactum world.

This is evidenced ers through streamlining Eastern Europe, whereculture’s or so called ‘behind the tion of this agreement, had by tariffs zero, of of rules-of-origin decplant will increase scope Malaysia gives any counAustralia will run the the bound recent at slowing late rains are equally much remains to be done border’ restrictions.” andoutput rice aregrowth two sectry.unlikely It also allows open yieldsdairymilk plant. Some of its products for Australian milk supply in laration processes and to improve The FTA was signed on for Australia’s farmers to where – value-added, sustainable access arrangements will be sold in Australia.

US,incremental EU and South improved marketing as harvesting getsfrom under- torsthe May 22 in Kuala Lumpur tap into the full potential arrangements for certain accessasimproveand export focused.

2023 forThe Australian ricedisrup-market The company says America producers feel way. potential

by Australia’s Trade and of the Asian region and commodities. been negotiInitially the plant will with all to tariffs eliminated given Asian consumthehave pinch. tion global markets of ments Competiveness Ministhe Malaysian produce 250ml and 1L by 2026. ers’ rising incomes and Australia is no excep- The Malaysian market beyond. a repeat Russian export ated under ter Craig Emerson and his He says the NFF will UHT packs from a process The remains Nationaltop Farmers’ improving diets, demand ban of mind FTA.tion. Increased feed costsis worth about A$1 bilMalaysian counterpart now throw its attention lion in Australia agricul“This was line capable of 100 milFederation the trade there will grow for qualhave trade comedeal as procesfor manysays buyers, despite towards ensuring agricul- Mustapa Mohamed. alsosors particularly imporlion L. The processing and dealthe will improve interity dairy products from in exporting regionstural exports – including Russian government milk productivity systems Emerson says Australia through ture remainsAustralia’s front and for paying sectorsopening such pricesbeing its fourth-largest Increasing plant will emit national market access low-costnatural productionfeeding bases packaging repeatedly ruling out suchtantare will be as well-positioned centre in completed FTAs that havethan beenlast sugar export market and less carbon, use less water, foraction.

Australian agricultural as dairy such as Australia, whose www.performanceprobiotics.com 8-10% lower in the Malaysian market fifth-largest wheat export with South Korea, Japan, a competitive disand be more energy-effigoods.Well developed, inter- facing milk is well regarded. year, and many farmers in as Malaysia’s closest tradChina and Indonesia as market. advantage in Malaysia cient than equivalent “After sevenand years of The new plant will drinking milk regions face connected highly ing partners in ASEAN, With an annual economic immediate priorities. with Newprices.

ZeaUHT facilities in Austranegotiation, the markets NFF is withcompared allow Pactum to meet lower contract liquid grains and in some cases better.

“These are all markets growth at about 5%, land which already has lia and SE Asia. Pactum under no illusion of how growing demand for In order to provide a a diverse range of heavThe FTA will guarantee with enormous growth Malaysia forms an impora completed FTA with expects site preparation to challenging it has been to UHT dairy milk, and add ily traded derivatives such secure base price from tariff-free entry for 97.6% opportunities and where tant part of the ‘Asian Malaysia in place.” begin in October 2012 and complete this FTA with to capacity for valuewhich to ‘step up’, export as futures – and not to of current goods exports significant barriers to Century’ story and the The FTA also sigstart-up by mid-2013.

Malaysia,” NFF vice presiadded beverages at processors are forced mention extensive parfrom Australia once it opportunity this presents trade in agriculture still nals some administrative Pactum makes UHT dent Duncan Fraser says. its Sydney factory. Pactum to pay only what they ticipation by third-party enters into force. This will for Australian agricultural exist, not only through benefits for Austraproducts for private label The FTA will fill a is expanding its capabilican reasonably expect speculators – have raprise to 99% by 2017. tariffs that restrict trade producers, says Fraser. and proprietary customers. number of gaps within the lian agricultural exportties at the Sydney plant to sustain for the whole idly translated these Drought condiWith season 2011/12 experienced in only a few tions

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Malaysia FTA benefits dairy Freedom

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HEALTHY

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Dairy News AUSTRALIA september, 2012

16 // OPINION Ruminating

EDITORIAL

Government must get off its bum

milking it...

Hungry Uncle Sam

Beauty meets beast

Coles boosts PR

Our scout travelling through the United States came across some news in the local press that confirmed its farmers can always rely on Uncle Sam’s safety blanket.

The US Department of Agriculture will buy up to $170 million of pork, lamb, chicken and catfish to help drought-stricken farmers.

The purchase for food banks and nutrition programs is designed to help producers struggling with the cost of feed during the worst drought in a quarter-century.

Federal law lets the Agriculture Department buy meat and poultry to help farmers and ranchers affected by natural disasters.

There has been much talk recently from the White House about cutting farmer subsidies. We guess that’s all it was.

A Chinese county held its first Miss Dairy Cow pageant last month but it wasn’t the animals on display that stole the show.

The dairy industry in Shanyin County in the Chinese province of Shanxi held the inaugural contest, where the 200 heifers and cows were judged on “looks, milk and pedigree.”

However, the use of eight bikini-clad models, a common sight at industry conferences and meetings in China, drew howls of complaint.

Our favourite complaint came from an editorial on the People’s Daily website.

“Beautiful girls have far greater ability to attract attention than the milk cow contestants. How do you think that makes the cows feel?”

There was no comment from the cows.

When Coles feels the heat from both social and traditional media, does it attempt to rectify the situation by addressing concerns of farmers?

No, it spends hundreds of thousands of dollars on the production and distribution of a booklet aimed at spreading its message that it is good for farmers.

Slashing prices across the board in its stores and increasing the number of house brand items isn’t bad for farmers and manufacturers, it says, not when we increase a few orders from selected producers.

The booklet profiles several farmers of different commodities that have struck supply deals with Coles.

There is one industry conspicuous by its absence. Yep, not one dairy farmer is included.

Milk quotes Our thanks to John Fairley of Country Valley Milk for this batch of milk quotes from his Twitter account, @ Country_Valley: “In Hollywood a marriage is a success if it outlasts milk – Rita Rudner” “I asked the waiter, ‘Is this milk fresh?’ He said, ‘Lady, three hours ago it was grass’ – Phyllis Diller” “I am thankful for laughter, except when milk comes out of my nose – Woody Allen” “There’s no such thing as soy milk. It’s soy juice – Lewis Black” “I won’t eat any cereal that doesn’t turn the milk purple – Bill Watterson”

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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.

Australian farmers don’t expect Government subsidies.

However, they would like their Government to go into bat for them against countries utilising trade barriers to stifle exports.

And according to our largest dairy exporter, they haven’t been doing that.

Murray Goulburn managing director Gary Helou was blunt with his message last month that the Federal Government needs to do more.

“They need to get off their bums,” he said.

MG has made the running under Helou’s management. It has invested money and resources into Asia in its bid to capitalise on the region’s growing demand for dairy.

However, it faces a significant hurdle in the form of trade sanctions.

The Government has to play a leading role in the negotiation of trade agreements and reduction of trade sanctions.

The Australian dairy industry can’t afford for it to sit on its hands.

New Zealand is in prime position to capitalise on China’s extraordinary demand for milk because of trade agreements negotiated by former Prime Minister Helen Clark.

China has lifted its imports from 309 billion tonnes in 2001 to 3831b tonnes last year.

New Zealand imports to China attract tariffs of 0-7% and this will fall to 0% in the future.

Australian exports to China currently attract a 10-15% tariff.

In rugby parlance, that’s more than a free kick to the Kiwis, it’s a 20 point advantage.

Australian agriculture as a whole performs admirably in spite of these road blocks in most countries it trades with.

It underpinned the country’s $9 million trade surplus in June.

Rural goods were the only export sector to increase, from $2.89 billion to $3.1 billion – a rise of 6%.

The result would have been in the red if not for the agricultural sector.

Australian farmers don’t receive hand outs like those in other countries – in the US, the Department of Ag will buy meat from farmers hit by high corn prices as a result of the drought. But unfortunately Australian farmers don’t receive a level playing field either.

Murray Goulburn is investing supplier money into foreign markets in a bid to return higher milk prices.

They could achieve greater returns with lower import duties.

These can only be achieved through hard work and a long-term vision.

It’s time for our Government to get off its bum.

Editor Stephen Cooke 03.9478 9779 or 0427.124 437 editor@dairynewsaustralia.com.au Publisher Brian Hight

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Dairy NewS AUSTRALIA september, 2012

opinion // 17

Dairy co-ops prove business model can be successful when Gujarat dairy WHILE BIG business is farmers staged a ‘milk considered synonymous strike’ against exploitwith the multinational ative trade practices corporation, some of by middlemen. Prothe world’s largest, most ducing only about influential businesses are 250 L between them, owned and operated as the farmers formed cooperatives. One market a co-op that now has in which the cooperative three million farmer model has a significant members. On average presence is global milk opinion each milks only 3L/day production. blue read from the one or two According to a July cows, and each travels 2012 Rabobank survey, two of the world’s five largest dairy no more than 10 miles to a milk colleccompanies are cooperatives – Fonterra tion centre.

How can a dairy farmer in Gujaand FrieslandCampina – with combined rat, India, who milks 3L/day, market 2011 sales of US$29.1 billion.

As a commodity, milk lends itself his meagre collection 700km away in especially well to the cooperative Mumbai?

There lies a key to Amul’s success: model. Milk is homogeneous and highly perishable. Storing and processing it its diffuse network means it can meet into products with stable shelf life, such demands even if a number of its farmas milk powder, require expensive plant ers individually cannot.

In turn, these farmers have their own and technology that benefits from econwilling buyers near home who will proomies of scale.

We have a saying in dairy: sell it or cess, transport and market their milk smell it; the need to process and sell our under one of India’s most recognisable household brands. product is a great discipline.

While Amul has for decades The world’s largest dairy cooperatives have thrived in different mar- dominated the milk and dairy market kets by taking different paths. India’s in India, the trend among agricultural Amul, the largest dairy company in the co-ops, especially in developed world’s largest milk-producing coun- countries, is to merge until a largetry, was founded about 65 years ago enough cooperative forms to achieve

Two of the world’s largest dairy processors are co-ops.

the sought-after scale and market share.

The growth of Fonterra into the world’s largest trader of dairy products is one example.

Still a rarity in the cooperative world, some milk and dairy co-ops look across national borders for merger partners. In 2000, the largest dairy co-ops in Denmark and Sweden merged to become

Arla Foods, and in June 2012, Arla Foods merged with Britain’s Milk Link to form a co-op with 9000 Danish, Swedish and British farmer members. And in 2008, two dairy co-ops in the Netherlands and Germany merged to form FrieslandCampina.

With transnational merger partners and brands among the most recognisa-

ble in their home countries, the largest milk and dairy co-ops worldwide are proving that the cooperative business model can be a success in which the benefits return to the producers that own and operate them.

• Blue Read is chairperson, New Zealand Cooperatives Association. 2012 is UN International Year of Cooperatives.

Allow for certainty of feed on your new farm FARMING HAS changed, it’s no longer a lifestyle decision, if it ever was; farming is a commercial business.

This reality has been recognised by dairy farmers for some time. Land and feed can be seen as inputs, to be used and harnessed, to generate a profitable output.

Farms however, particularly dairy farms, differ from other businesses in that their production cycle is seasonal.

Dairy farm sales, share milking and employment contracts revolve around June 1 – the start of winter; sheep and beef farms revolve around April 1, the start of the financial year and, more practically, late summer.

Unlike a sheep and beef farmer, when you walk onto your new dairy farm on June 1, you know the grass won’t grow before spring. It’s therefore crucial your winter feed needs are already in place. If not, quantity and quality of supplementary feed may be variable and, depending on the season, may be in short supply. While feed can always be purchased, it may come at a premium cost which gnaws away at the bottom line.

Have a measurable quantity of grass To have certainty of feed when buying your dairy farm, a standard clause is usually included in the agree-

grazing practices or the ment for sale and purseason. Unlike other chase. This clause businesses where you provides that a measuronly pay for what stock able quantity of grass is present on settlewill be left on the farm ment, as determined for your arriving stock. by a stocktake on the It’s important you first last day, the seller must consider what quanleave a certain quantity tity of grass you will of grass while, at the need for your on-going same time, continuing farming operation, be to feed their own stock it the maintenance of opinion until they are removed your stock until spring john sheddan from the farm. or to ensure there’s sufIf there’s a shortage ficient feed for winter milk supply. Grass is measured in kilo- in feed, depending on the agreement’s grams of dry matter (kgDM) using a wording, the seller must compensate rising plate meter, a device that looks you for the feed shortage. It’s usual like an oven tray mounted to a polo for the seller then to provide a similar stick. Invariably, it’s wielded by an inde- quantity of feed, measured in DMkg, of pendent farm consultant. These mea- silage or grain, or its cash equivalent as surements provide an average quantity the shortfall.

Unfortunately the amount of feed of feed over the effective pasture area of the farm. These calculations factor to be left is agreed upon months – if in the effect of the farm’s feed wedge not seasons – before settlement day. (read Fineprint Autumn 2012 for more Seasonal fluctuations such as a poor on this), the diagrammatic concept of summer followed by a wet autumn may the pasture length over the entire farm result in a shortage of pasture, and supon a field-by-field basis that results plement feed may only be available at a premium cost. A possible outcome may from rotational grazing. be for the seller to use the pasture for his Feed not available?

Difficulties arise, however, when own stock and willingly pay you a comthe feed isn’t available, either through pensation price for a feed shortfall if the

To have certainty of feed when buying your dairy farm, a standard clause is usually included in the agreement for sale and purchase.

previously agreed price for supplement feed is less than the then market rate for such feed. This makes perfect commercial sense.

Get a commercial outcome While dairy properties tend to change hands more frequently than sheep-and-beef farms, most farmers would admit buying and selling properties is not something they do frequently.

To get the deal that works best for you, talk with us before you sign the agreement. This will ensure that

together we determine what is important to your particular circumstances, how the stock will be dealt with and the best manner in which to approach the transaction. It’s exactly the approach any commercially focused business person would do in the circumstances.

• John Sheddan is partner in New Zealand law firm, Bannermans. This article was first published in the Winter 2012 edition of Fineprint, client newsletter of NZ LAW Limited member firms.

Bannermans is a member of NZ LAW.

Dairy News AUSTRALIA september, 2012

18 // breeding

Aussie Reds help herd health NSW dairy farmers Ron

and Brenda Graham, together with their son Sam and his wife Rachel, own Australia’s highest ranked red genetic herd for production, as measured by the Australian Selection Index.

They milk 400 Aussie Red cows at Nowra, on the NSW south coast, and calve all year around to meet the fresh milk market requirements for Lion.

Their herd is currently aver-

aging 8600 litres of milk, including 295kg of protein and 345kg of fat in 305 days, with an ASI of 43.

They originally used Scandinavian red genetics to increase the production of their herd over 25 years ago, but they didn’t realise these countries also had breeding programs to improve health traits as well.

Ron is quick to point out that the health profile of Aussie Reds is something they unknowingly

benefitted from.

While boosting their herd production they have been able to maintain their good fertility and calving ability. This is indicated by their herds calving interval of 57 weeks and a first insemination conception rate of 67%.

They have also been able to select for mastitis resistance and their bulk milk cell count is currently 110,000. They received a

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“I select bulls with a good mastitis resistance rating on ABVs, so I can genetically improve my herd’s cell counts, on top of best practices in the dairy shed,” Sam said.

The Graham family use the Good Bulls Guide to select the best APR bulls as it fits their breeding goal, to breed cows with good type, high production and good health traits.

“We have used the current top 3 Australian Proven Bulls and top 4 International Proven Bulls in our breeding program,” Sam said.

The Graham family is heavily involved in breeding future bulls for the red population. Sixteen bulls have been selected from their herd in the past four years and these bulls are in current

progeny test programs awaiting ABVs. They use the top APR sires as sires for their progeny test bulls.

“The dams of these bulls are our top producers who compete in a large herd, with really good udders and feet and legs.”

SA dairy farmer Mike Green, Mount Schank, also breeds Aussie Reds. He milks 730 cows on 290ha, including 158ha under irrigation from four centre pivots.

He became interested in Aussie Red genetics when the original herd he bought in 2001 had health problems with bad feet, calving ability, low fertility and high cell counts. In 2008, he bought a herd of purebred Aussie Reds and started using Scandinavian genetics.

Now his herd consists of 300 pure Aussie Reds, 310 Holsteins

and 120 crossbred cattle. However, whilst his health problems have improved, his high production has not reduced.

His herd averaged 9964 litres of milk and 692kg of fat and protein last year. He uses the best APR bulls from the Good Bulls Guide to improve his production and productivity of his cows.

“Cell counts have been the best ever in 10 years this past season, as low as 11,000 for 731 milkers,” he said. The herd has averaged 90,000 BMCC for the year.

His fertility and calving ease have also improved.

Since buying the purebred Aussie Red herd, he no longer checks the cows calving at night.

“Before this, we still did night shifts watching the herd calve, now we do not do night shifts at all,” he said.

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Midway Park Ayrshires Final Sale

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Dairy NewS AUSTRALIA september, 2012

breeding // 19

Farmers must get aggressive with reproduction day but I don’t see that happening here. They use too much energy on the farms.”

He said that while farms Whether he’s working on with thousands of cows might a corporate farm with 70,000 seem daunting, the operations cows or a one-man operation were working smoothly and in Australia with a few hundred were good for the cows. milkers, Charlie Perotti sees “They are very well conone common denominator for trolled, the humidity and the success - pregnant cows. temperature. Because they are The American-based manmostly run corporate style, they ager of Alta Genetics’ Global have no history and no prejuReproduction and Premier dice against new technology; in Dairy program says aggressive fact they embrace technology reproduction and getting cows which helps.” pregnant are the The farms are also key economic driv- “Synchronisation programs adopting aggressive ers of any profitable were developed in the late reproduction systems, dairy enterprise.

1990s but they have changed which Perotti said was As part of a the key to profitable sucrecent visit to Aus- dramatically and are much tralia, Perotti spoke more efficient now. If you’re cess.

“You can’t compare at the Young Dairy not using them you really Australian farms to the Development Proshould start looking at it.” larger stall farms: they gram’s Milk It 4 can breed every day and More `Pathways For Your Future’ expo at Gle- dairy industry and this is the here it’s seasonal, but the philosophy needs to be the same normiston College in south way they’re going.”

In larger non-grazing dair- – you need to maximise pregwest Victoria last month.

Perotti was raised on a dairy ies, milking cows three times nancies.

“Pregnant cows are the key farm and managed dairy farms daily is the norm, but Perotti in California before moving into doesn’t see that trend develop- economic driver of any dairy.”

Farmers needed to maxiing in Australia. the reproduction field.

“They want to get more milk mise the pregnancies gener“When I was on the farm ated per joining for fresh cows there was evolution, but over per cow and decrease carry over which the past five years there has per leads to more profit, accordbeen revolutionary change,” he ing to Perotti. said.

He said the speed of “Margins are tight and you genetic progress had have to look for ways to be more changed dramatically in the efficient and farmers need to get past five years “and there more comfortable with technolis potential to make three ogy and terminology.” times the genetic progress Dairy technology accelerain the next five years comtors such as genomics, sexed pared to the past five years”. semen, synchronised programs, “Genomics may have an and increased male and female impact on genetic intensity fertility have resulted in huge and will have a signifchange to maximise icant impact on pregnancies accuracy and genergeneration intervals,” he said. “When we buy a bull we know what we are getting.

“You should feel very comfortable as dairymen with genomics. Five hundred and fifty pounds of solids is not going to work in the future, you will get to where you need with genomics.”

Perotti recommended sexed semen be used only in Charlie Perotti virgin heifers RICK BAYNE

ated per joining and to maximise fresh cow management.

Perotti promotes aggressive reproduction techniques on large scale dairies across the world, including one corporate operation that currently milks 70,000 cows across 18 sites.

“There is a lot of intensified dairying happening where cows are being run on a small footprint in free stall systems,” he said.

“Eastern Europe, Russia and China are trying to build up a

AI expert Charlie Perotti says there is potential to make three times the genetic progress in the next five years compared to the past five years.

and said it compromised fertility.

However, he said there were benefits from using sexed semen, such as more heifer calves, less calving problems, less culls in the first lactation and earlier and higher pregnancy rates.

Timed artificial insemination improved conception rates, and pre-synchronisation programs were recommended as the best way to “get cows pregnant faster”.

“Synchronisation programs were developed in the late 1990s but they have changed dramati-

cally and are much more efficient now. If you’re not using them you really should start looking at it.”

Data pregnancy testing, which compared how the first daughters of one bull got pregnant compared to another, had made a big difference, he added.

Perotti recommended regular pregnancy checks for all cows and added that female fertility was real. “You can change the fertility of a female in a generation,” he said.

Perotti said Australian farmers should aim to create pure breed females “and then take

advantage of the cash cow”.

“If you get your genetics right then pure breed black and white cows are the best. Part of your business plan should be about what type of cows you want to milk.”

He also claimed Australia was potentially making a “big mistake” in exporting top quality heifers to China.

“China won’t buy cross breed calves and Australia is sending the top quality heifers, leaving poorer breeding material here.

You should look at exporting your lower 20% quality.”

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Dairy News AUSTRALIA september, 2012

20 // ABVs

Genomics increases herd’s genetic gain The August release of Australian

Breeding Values (ABVs) includes the first release of Jersey ABV(g)s – breeding values based on genomics – which will give Jersey breeders new options for selecting sires to use in their herds.

ABV(g)s enable dairy farmers to achieve faster genetic gain by selecting superior young sires with confidence.

Genomics is the large scale use of DNA data to predict the future performance of bulls and cows.

Genomic testing – or genotyping – can be done on an animal at any age, allowing breeding values to be estimated for young bulls, long before they have daughters in production.

ADHIS general manager Daniel Abernethy said an easy way to get started with selecting young Jersey bulls is to refer to the latest issue of the Good

Bulls Guide which includes the first list of the top young Jersey bulls based on their ABV(g)s.

Abernethy said the reliabilities of ABV(g)s for young bulls with no daughter information was about 59% for production traits and about 45% for type traits.

“This is generally double the reliability seen with parental average alone, but it is still lower than the reliability we see for proven bulls.

“A good approach is to use at least two to three young genomic bulls from the Good Bulls Guide as part of this season’s bull team. This provides a balance between the potential genetic gain and risk,” he said.

Holsteins The Holstein genomic reference population now includes over 3000

bulls and about 10,000 cows. The first ABV(g)s for the Holstein breed were released in April.

Michelle Axford, from ADHIS, said in the four months since April, the genotypes of an additional 408 Holstein bulls had been added to the genomic reference pool.

“These bulls add more data from diverse pedigrees. Some were born as far back as 1972, and on average each bull had 647 daughters,” Axford said.

“We are building a vast pool of knowledge about the genetic make-up of the Australian dairy herd.

“More data means more reliable genomic breeding values. And the greater the reliability, the more confidence farmers can have in selecting superior young bulls.”

Axford said genomics allowed dairy

farmers to access the latest genetics years earlier than previously under the traditional progeny test program.

Genomics breeding values for dairy bulls are available in the latest issue of The Good Bulls Guide, published by the Australian Dairy Herd Improvement Scheme in September.

The lists of top performing herds and cows across Australia are now also publicly available on the web, free of charge.

The lists, based on Australian Profit Ranking (APR), are published by the Australian Dairy Herd Improvement

Scheme (ADHIS) with each run of Australian Breeding Values.

They include the top 5% of cows and top 5% of herds from each breed.

Axford said the lists acknowledged the superior herds and cows throughout Australia.

“The new lists recognise farmers who are pushing the genetic boundaries. The lists are an important tool for breeding companies and other farmers who are looking to breed the next generation of superior cows and bulls.”

Visit www.adhis.com.au

New market segment for Jersey breed New genomic reliabilities for the Jersey breed create an entirely new market segment of young Australian bulls with no daughters in milk, presenting an opportunity for Jersey breeders and those wishing to use Jersey genetics to achieve rapid genetic gain.

“Genetic gain is critical to better productivity and profitability,” said Jersey Australia chairman, Trevor Saunders. “We must keep improving productivity by 2-3% a year because people don’t want to pay more for food.”

On average genomic reliabilities for young animals with no daughter information are 59% for production traits and 45% for type traits. The new level of reliability for production is equivalent to an ABV with 20-25 milking daughters.

“Genomics has given us enough information on these young bulls to use them with confidence,” said Dairy

Dairy Futures CEO, Dr David Nation: New genomic reliabilities give the Jersey breed the opportunity to double the rate of genetic gain.

Futures CEO, Dr David Nation. “It gives the Jersey breed the same opportunity as Holsteins to double the rate of genetic gain.”

The breakthrough in genomic reliabilities is the result of many years of research work undertaken by the Dairy Futures CRC and ADHIS, bringing Aus-

tralian Jersey genomic reliabilities up to similar levels to Holstein genomic reliabilities.

“This is a very significant step for the Jersey breed,” Saunders said.

“It’s more significant for us because of the smaller numbers of Jerseys in Australia. It’s a great credit to the Dairy Futures team, who were prepared to work with us to achieve these results.

“Genomics will improve our ability to identify the genetic merit of cows, in addition to their pedigree and production figures.”

Genomics will also assist in identifying bulls that should be tested in order to increase the reliability of traits and to increase the diversity of sires.

As the Australian Jersey breed has developed from a small number of sires, the risks of inbreeding are significant.

Another benefit from the Jersey genotyping project is the ability to identify

outcross sires that can be used to reduce this risk.

“Taking a lot of the guesswork out of our progeny testing will increase confidence in what we are doing in our breeding programs,” Saunders said.

For proven animals the addition of genomic data to more traditional measures provides increased reliability for traits such as fertility and survival. When selecting overseas bulls, the Australian genomic data can help to improve predictions of their performance under Australian conditions, providing higher levels of confidence in using bulls which don’t have any Australian daughters.

“In five years time genomics will be the major factor in breeding,” Saunders said. “To keep moving forward we have to build confidence in the science and educate our people so they grow with these new developments.”

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Dairy NewS AUSTRALIA september, 2012

abvs // 21

Synchronisation improves fertility, in calf rate When an average cow gets in calf in the first round of mating, she goes from being average to much better than average, according to Mike Waite.

“Better fertility gives her more days in milk and increased production,” he said.

Waite moved to Ecklin South (near Terang in south-west Victoria) from New Zealand seven years ago with his wife, Dawn and their son and daughter, both now in their early 20s.

They currently milk 260 cows on their 120ha, and are cranking up herd numbers to around 340, bringing more young stock into the Holstein crossbred herd.

In New Zealand they share milked 700 cows at North Waikato and were familiar with synchronisation programs and condensed calving.

“When we started here we bought cows from many different herds and their calving dates were all over the place,” Waite said.

“We started with a basic PG program but we saw there was plenty of room for improvement so we moved to an Ovsynch program.”

Over the past three years they have greatly improved their in calf rate (ICR) with a full Ovsynch program using Bayer fertility regulators under the supervision of local vet, Dr Craig Wood, with whom they have developed a planned reproduction program, which takes advantage of the latest reproductive technology available to dairy farmers.

Initially, the plan called for the non-cyclers to be sorted out well ahead of the mating program, using a Cue-Mate device to backdate their ovulation and Bayer fertility regulators when the Cue-Mates are removed.

“That brought the noncyclers into synch with the others,” Waite said. “Once they’re synched, the workload is reduced.”

By identifying the noncycling cows early in the

Ovsynch program they are given the same chance to get in calf to AI as the rest of the herd, rather than being left out until after the main AI program is completed.

“It’s important to be proactive, not reactive,” Waite said. “If we don’t do the non-cyclers first, there’s little point in doing the rest of the program.”

The program was timed so that the fixed time insemination (FTAI) of the non-cyclers was the day before the designated mating start date.

In effect, thorough early planning enabled them to run two FTAI programs over two consecutive days.

Furthermore, FTAI on day 0 of the mating program gave them the option of three inseminations for any cow in the six week joining period, compared with just two if left to natural mating.

All cows are ultrasounded at 15 weeks from mating start date to determine the age of the foetus and estimate the six-week ICR. As a result of this comprehensive reproduction management program, the Waites achieved a 78% sixweek ICR, which they are more than happy with.

The strong ICR brings with it other benefits. Culling becomes a much broader management decision than simply taking out animals because they are empty.

“It means we can make culling decisions on other attributes, not just on fertility,” Waite said. “Culling then becomes about taking out the real bottom 5%, as well as making sure infertility is not being bred into the herd.

“A good in calf rate means we can cull deep and focus on the longevity of high producing, fertile cows.

“Their best production is at 6-8 years of age - they are reaching their strengths then, so we want to be sure we have the best cows in the herd when they reach their peak.

“In addition, we want to have an even age spread

Who:

Mike and Dawn Waite Where:

Terang What:

Ovsynch program

through the herd, with younger quality cows coming through.”

The higher fertility and better synchronisation brings with it many benefits at calving as well, the first of these being that the entire calving program is managed by Waite and son Jason, who has come back on the farm to help out during calving.

“We get big runs of calves with 10-20 calves a day.

This year we had 115 in the shed in the first week. We get the first mob onto the calf feeder within a week and we can move them through the shed more quickly.”

With the majority of calves developing together, it is easier to sell off the bottom, because those calves that are not aligned with the development of the majority will always be behind. In their second year, the early heifers get into calf earlier, highlighting the opportunity for longer and more productive lactations to follow.

The tight calving pattern means the management focus is very concentrated for short bursts of time.

This prevents errors, according to Waite, who considers mistakes generally occur when calving drags on and staff get tired.

“It’s not rocket science,” he said, “but it’s definitely an easier way to manage a reproduction program.”

The success of the reproduction program over the past two years has allowed the Waites to sell 30-40 weaned calves a year on the Chinese

Mike and Dawn Waite are reaping the benefits of a thoroughly planned reproductive program using Ovsynch.

export market, bringing in very handy extra income at an average of $1200 per animal.

The improvement in fertility, with between 3% and 10% empties in a 10-week calving period, runs against the national trend towards higher levels of infertility in

dairy herds.

Alongside the synchronisation program, Waite sees basic animal husbandry as critical to their success.

“Most people accept 10% empties but this isn’t necessary if they are prepared to do the very basic and detailed management

work,” he said.

“You need to get the people, the animal management and the technology all working together for success.

“Often we neglect the people skills and detailed animal management; we just focus on the technology doing the job for us.”

As they bring more of their own young stock into the herd the Waites plan to continue on their growth trajectory by expanding from within, using a combination of the best reproductive technology and knowledge and thorough animal husbandry.

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Dairy News AUSTRALIA september, 2012

22 // abvs

Jerseys make their own genomic luck It’s often said “you

make your own luck” and the story of how Australia’s Jersey producers created a viable reference population for a breed genotyping program is the quintessential do-it-yourself achievement.

To run a successful genotyping program, large

numbers of herd recorded animals are essential – the more the better.

DNA analysis of thousands of individual cows and bulls is needed to have any chance of creating a valid genetic map of the key traits for any breed developed under Australian dairy farming con-

ditions. Jersey numbers in Australia are somewhere south of 15% of the national herd.

Compare that with Holsteins at around 80%.

Back in April the Dairy Futures CRC and ADHIS released newly updated genomic reliabilities for Holsteins based on the

analysis of more than 10,000 diligently recorded cows from more than 90 herds.

Not so the smaller Jersey population.

With as few as 400 tested bulls, they were told they simply didn’t have a big enough progeny test base from which to pro-

duce a viable genomic reference population. And anyway the cost of building up the reference population and sampling through the CRC’s sophisticated computer technology, was simply beyond the available budget.

It was felt their best chance was to get maybe

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100 young sires that will two key traits up to any become the first bulls level of genomic reliabilto receive an Australian ity; still be somewhat lower than the reliabilities genomic breeding value (ABVg). for the same traits in Hol“Up to 75% of memsteins. Compared with the 40 key traits that had been bers came on board,” said Trevor. “It was very excitvalidated to the equivalent of a 30 daughter proof ing.”

Through the process for Holsteins earlier in the 4000 Jersey cows with year, this seemed like a quality records, breadth less than useful outcome. of pedigree It was and key questionable traits that whether the had not been results would recorded give promuch (such ducers conas fertility) fidence to were use genomidentified ics for bull and accepted selection for into the a couple of genotyping traits? Would Jersey Australia chairman program. it be worth Trevor Saunders.

Members the effort? collected tail hair samples Among association memand Dairy Futures staff, bers, the thinking was led by Associate Professor decidedly resolute.

“We knew we had to do Ben Hayes, responded to their enthusiasm by “going whatever was necessary,” said Jersey Australia chair- the extra mile” in assisting with collections in order man, Trevor Saunders. to give the project its best “We knew it was crucial to have domestic genomic chance.

And, as the samples technology because we were delivered to the CRC could potentially lose our laboratory over a period breed’s unique Australian of two years, luck played identity entirely. Withits hand; the price of the out this genomics protesting technology started gram we would have no other option than to work coming down, until it became feasible to underwith the North American take a much larger project. system.

“We had the sam“It was really do or die ples and as the test price for Australian Jerseys – came down, we could see one chance to create our that it might be possible own genomic base.”

And so Jersey Australia to develop a fully fledged set to work on a grassroots genome technology for the Jersey breed within campaign to hunt down our budget,” said Dairy every possible source of Futures CEO, Dr David DNA data that could be Nation. “In fact, as it has used to build a sizable turned out, the Jersey breed reference populagenomic reliabilities are tion. Members checked much the same as the Holsemen stocks, pulling out stein reliabilities.” old AI tanks with straws The new genomic that dated back to the 60s ABV(g)s for Jerseys are and 70s. included in the August AI companies contribABV update from uted semen from AusADHIS. They exceed tralian bulls they had in the reliabilities of even stock. In all up to 1000 the most optimistic Jersey bulls were eventuparticipant and are ally genotyped – around within 5% of the Holstein 900 bulls with daughgenomic numbers. ters in milk, and an extra

Dairy NewS AUSTRALIA september, 2012

management // 23

Robot milkers underpin new dairy conversion and silage production,” Marcus said.

But a grain feeding component introduced Converting a beef property to a robotic dairy over the last decade has helped stabilise producwhile operating a divertion through a series of sified farming business dryer seasons. They are down the road has made now buying about 600 life hectic for young Tastonnes of feed mix a year manian couple Marcus delivered and Zed in containCrowden. ers shipped Marcus from Melis a fifth bourne. generation “Our farmer at profit Caveside in comes the Meanfrom the der Valley pasture, west of Who: Marcus and Zed but we are LauncesCrowden getting ton where Where: higher proa 550ha Caveside duction aggregation What: with a grain supports Expansion component dairy and and it’s beef cattle, an easier sheep and system to manage,” poppy growing.

Marcus said.

They have built their They have owned the milking herd up to 320 90ha conversion propcows on an effective area erty since 2007 and have of about 110ha and are carefully planned a phased continuing in expansion development which will mode with the new dairy start this spring. about to start up.

They are breeding up The aim is to milk a their own stock for the total of 450 to 500 cows new dairy with the first between the two properbatch of 60 heifers to be ties. introduced after calving They are intent on with another 125 in followgrowing a stable, cash ing seasons. flow business with the “We want to select encouragement of procesthe best heifers for the sor Fonterra which is also investing in Tasmania and new farm with the aim of having a 9000 to 10,000 will take all the milk they litre herd compared to can produce. the home farm where our “We’ve built our dairy average production is on high performance ryeabout 8000 litres,” Marcus grass pasture, supplesaid. mented with our own hay Gordon Collie

Marcus Crowden at the entry race to the new dairy.

Marcus and Zed Crowden are expanding their herd on high performance ryegrass pasture, supplemented with their own hay and silage production.

With the opportunity to build an optimal new dairy, Marcus did a lot of research, including visiting New Zealand.

The property has been subdivided with electric fencing into three areas, each containing a block of ten 1.8 ha paddocks.

Plans have been made to install a centre pivot which will travel over the

fencing to irrigate about 55ha.

An allocation of 150 megalitres has been purchased from the Meander dam scheme at a cost of $1100/megalitre with the annual usage fee is expected to be about $60/ meg.

The system water will complement dam storage totaling about 400 mega-

litres between the two farms.

To provide feed for the first season on the new property, an initial 16ha block of irrigated perennial rye has been established.

Marcus said he believed the future of dairying was in automation and the couple has invested in two robot milking units with

provision for a third. This will the first voluntary milking system DeLaval has introduced in Tasmania.

Each unit has a capacity of about 2500 litres in 160 milkings a day with the herd expected to settle into a pattern where each cow averages about three milkings a day.

The new dairy has been carefully designed for ease of natural cow flow and capable of fully remote operation with electronic systems and video cameras installed to allow system monitoring from their home farm 4.5 km away.

Grain mix will be fed while milking and the dairy also incorporates three feeding stalls in an outer parlour, with provision for another three units as numbers increase.

Cows will receive a measured ration of 10kg to 12kg a day, depending on milk production and this is likely to be evenly split

between the two feeding points.

Marcus said the new dairy would incorporate a pad for silage feeding, but he is also planning to paddock feed silage to encourage the cattle to move around the property.

A flood washing and effluent irrigation system has been installed which will automatically clean the milking complex.

Cash flow from their existing dairy is leveraging the expansion on the new property and Marcus said it was hoped that in the future the business would support one day replacing the ageing herringbone on the home property with robot milkers.

“We’ve got a lot of learning ahead of us to bed down the system and get the new dairy working smoothly,” he said.

Their cows will also need educating with plans to introduce the herd to their new surroundings and feeding routine before calving.

Dairy News AUSTRALIA september, 2012

24 // management

Homemade feeders lift calf rearing efficiency ANDREW SWALLOW

FEW DAIRY farmers

would take on the task of building their own automated calf feeder, but Alvin Reid, Temuka, New Zealand, is one.

Combining a passion for dairying and electronics, and helped by his software-engineer brother, two years ago he built a prototype for a fellow farmer. Last year he finetuned the design in a couple of his own rearing sheds and this year he’s sold a few commercially, as well as kitting out another shed on his home farm.

While some calf-rearing specialists say don’t automate because staff won’t give calves the same attention, Reid says that’s exactly the reason to automate. “The key is that they pay attention to the calves they need to be paying attention to.”

feeders, the labour input’s The base-unit display about a third the norm. facilitates that, putting Unlike some systems, calves with the longest he has not tried to autointerval since their last mate the meal part of the feed at the top of a table diet yet, sticking with showing calf number, troughs and monitoring when it last fed, times fed that day and feeds the pre- intake manually to determine when to vious day.

“The key is start reining in “So when the staff come that they pay the milk ration. that in every mornattention to “Any aren’t doing so ing all they the calves well we’ll put need do is back a group so look for those they need calves that to be paying they get a bit [on full haven’t fed.” attention to.” longer milk].”

Also at the Milk is delivered to the top of the screen is the feeders by a peristaltic ‘recipe’ showing how the feeders are set up: number pump – a bit like those used on dialysis machines of calves allocated; how – which delivers the many feeds/day; amount predetermined amount of milk/feed; and miniper feed. “We imported mum interval between the pumps ourselves from feeds.

China.”

In the first week, while Each calf’s milk pours calves are learning to use into a small Stallion the feeders, Reid reckons staffing needs to be on par trough with a Peach teat.

Should a calf come off the with a conventional manteat for more than 10 secual-feed shed, but once onds, the pump stops and the calves are on to the

Alvin Reid with his own automated calf feeder.

Automated calf feeders point staff towards calves that need attention, says Alvin Reid .

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Offset uprights on either side prevent other calves muscling in on another’s feed. Reid reckons each feeder will serve 35 to 40 calves. “You could put more on but you’d have to spend more time monitoring them because some of the shy calves might not get in.”

And while the pricing isn’t yet engraved on tablets of stone, he’s “hoping we can keep it under $7000 per bail.”

A control unit, including display, should come in at a similar figure and can run at least 16 bails.

feed is cancelled.

Calves are identified, and the pump triggered, by their NAIT tags and an antenna built into the front wall of the bail, connected to a standard Gallagher reader. “We built the antenna ourselves, with some help from Gallagher.”

The reader feeds into the software Reid and his brother Dave wrote to provide the display and control the other components.

On his own farm he has feeders in two sheds about 400m apart, linked by wireless, so one control unit serves both sheds.

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Dairy NewS AUSTRALIA september, 2012

management // 25

Rising input prices require long-term strategies improved productivity, improved profitability and atile global farm input market is making it imper- positive environmental outcomes.” ative for Australian farmThe report says Austraers to have in place good lia relies heavily on global purchasing strategies, markets for its inputs, while focusing on ways which not only makes to conserve soil nutrients them a price taker in the and input use, according market, but creates chalto a new industry report. lenges around seasonality The report, Efficiency and the long lead times for with farm inputs – a recipe sourcing products. for productivity, by agriHarvey said this import business banking specialreliance means that farmist Rabobank, says more efficient use of farm inputs ers not only need to understand what drives – including fertilisers, crop protection chemicals, the prices they receive for commodities, but also the seeds and fuel – will be essential in ensuring prof- forces at play in the global itability, driving productivity growth and improving environmental sustainability of farm businesses into the future.

Report author, Rabobank senior analyst Michael Harvey, said with farm inputs a vital component of modern production systems, all farmers in Australia are exposed to the dynamics of procurMichael Harvey ing farm inputs.

“In more recent input market, as inputs times these markets can account for as much as have been evolving 45% of the on-farm workand becoming more ing expenses for many sophisticated, which is enterprises. altering the business “The international landscape for farmers as marketplace makes it end users,” he says. important for farmers to Harvey said improved soil nutrient management have advanced sourcing strategies in place, so they will be critical to meeting can make informed decithe challenge of feeding sions about when and how the growing global poputo buy their fertiliser, crop lation.

“To meet the challenge protection chemicals, seed and fuel,” he said. of feeding nine billion The report says global people by 2050, agriculinput prices are expected tural production volumes to remain above long-term need to increase by more averages, underpinned by than 70%,” he said. the elevated base cost of “Australia will play a raw materials. large role as a global food It also says oil prices producer; however the are forecast to remain extent of this role will be structurally higher into the determined by the innomedium term, as global vation and productivity demand remains high. improvements that farm“With farm input prices ers are able to make. set to remain structurally “Australia is well positioned to increase produc- higher, farmers need to tion, but farmers are going focus on ways to manage the efficient use of fertilto have to manage their iser, chemicals and fuel farm input purchasing on-farm,” Harvey said. strategies and usage.

“Having nutrient bud“The importance of gets and nutrient manusing farm inputs more agement plans in place, judiciously is three-fold:

A complex and vol-

precision agriculture technologies to pinpoint application and no-till or minimum till cropping, are just some of the strategies many farmers are adopting to manage their fertiliser use.”

Farmers’ input use is not only being driven by their relative costs and the need to increase productivity, but increasingly by environmental factors.

Harvey said while there are currently no substi-

tutes for the main nutrients, farmers can take action on-farm to minimise fertiliser use.

“By putting a price on carbon, farmers in Australia are being encouraged to transition to a low carbon system and improve efficiency.

“There are many actions that can be taken to reduce emissions, and the efficient use of nitrogen fertilisers is one of these.”

More efficient use of inputs – including fertiliser and fuel – will be essential in ensuring profitability, says Rabobank.

Managing your effluent pond Wetter than normal winters over the past few years have brought many challenges. Managing a full or rapidly filling effluent pond to prevent it overflowing is just one of those. Retaining effluent on-farm is a legal requirement and the consequences of an overflow can be very serious depending on the location of the pond.

Paddock choice is important particularly if you have to apply effluent onto wet soil. Choose the effluent reuse paddock with the longest hydraulic path to the waterway receiving any runoff. Generally, paddocks with higher permeability soils and low-to-moderate slope should be your preference.

So what do you do if you have a pond that is almost full (remembering you should ideally have 500 to 600mm freeboard) and not likely to last until you would normally fire up the irrigator?

As soon as you have the breathing space, consider options to reduce the amount of water entering the pond. Reducing water use during clean-up at the dairy (try a water audit to identify potential savings), reducing catchment areas generating runoff or diverting runoff from the roof or cleaned concrete yards.

Know your soil moisture ‘trigger’ point and draw down some effluent whenever conditions are suitable – the ‘small-amounts-and-often’ approach. Your trigger to apply effluent is when the root zone depletion is larger than the minimum application depth of your effluent irrigator. With soil moisture levels close to field capacity, it is reasonable to use daily evapotranspiration data to track your root zone depletion (www.bom.gov.au/watl/ eto/). For example, if the minimum application depth for your irrigator is 10mm, that’s your trigger point and in the following table, you should be able to apply effluent without runoff on the fourth day after rain.

If ‘small-amounts-and-often’ is not getting the effluent level under control, it is better to apply effluent onto wet soil in an emergency than let the pond overflow. The application depth should be set to the minimum that the irrigator can achieve to lessen runoff.

Monitor the pond level frequently!

The ‘small-amounts-and-often’ approach demands effluent management decisions on a weekly or even daily basis and usually requires more labour. If this is not sustainable, then you should review your effluent system and options for generating additional storage. For anyone using a single effluent pond, this may mean removing sludge to reclaim a significant amount of storage. Substantial changes such as earthworks might not be possible in the short term but having a plan is important.

Prepared by Scott Birchall, AgSystems Design/Dairy Australia NRM coordinator and Scott McDonald, DPI Victoria. Contact Scott Birchall 0458 210 604

Days after rain

Rain (mm)

Evapotranspiration ETo (mm)

Crop Evapotanspiration ETc Root Zone Depletion (mm) (mm)

0

18

1.6

1.7

0 (field capacity)

1

0

3.2

3.4

3.4

2

0

2.5

2.6

6.0

3

0

3

3.1

9.1

4

0

3.3

3.5

12.6

ETc = ETo x Kc (using a crop factor Kc = 1.05 for rye grass)

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 september, 2012

26 // management

Take ownership with visual soil assessments A New Zealand soil scientist says dairy farmers can improve their bottom line by conducting their own visual soil assessments.

Visiting New Zealand soil scientist Graham Shepherd encouraged dairy farmers at a workshop in Timboon last month to start doing their own visual soil assessments.

Shepherd told the workshop farmers doing their own soil assessments are more likely to take greater ownership of the results and implement changes to improve their production levels and profitability.

Shepherd, a director, soil scientist and agricultural consultant with BioAgriNomics, said the assessments could lead to adjustments of farm management practices resulting in increased profitability.

“It is a very simple test that helps farmers to assess not only their soil quality but also the performance of their pastures,” he said.

“It helps farmers to maximise their pasture conversion efficiency.”

Shepherd said the Timboon demonstration proved that visual soil assessments uncover very similar results to tests undertaken by experts.

“By doing the assessments yourself, you save money on consultants and take ownership of the results which means you can tweak your management practices to improve your bottom line profitability.”

Shepherd said more farmers were turning to visual assessments.

“The more that do it the better,” he said.

Shepherd has worked as a soil scientist for many years in New Zealand including working for Landcare Research and the Department of Scientific and Industrial Research and is recognised across the Tasman as one of the foremost authorities on the physical quality of soils under pastoral and cropping systems.

His research has significantly improved understanding of the impact of farming and sustainable land management practices on soil quality.

HDLN Landcare coordinator Geoff Rollinson said the workshop had helped landholders and service providers to improve their skills at visual soil assessment and to better understand the benefits of using the system.

“It’s an easy task that all landholders can do and it’s easy to interpret,” Rollinson said.

The workshop was part of Heytesbury District Landcare Network’s Caring for our Country project and was presented in conjunction with Dairying for Tomorrow and DemoDAIRY. The project aims to improve the soil conditions and biodiversity of 50 participating landholders.

The workshop was one of six being held for landholders participating in the HDLN Caring for Country soil acidification and biodiversity project.

The Federal Department of Agriculture, Fisheries and Forestry and Bega Cheese also funded the workshop.

New Zealand soil scientist Graham Shepherd at a recent workshop at Timboon, Victoria.

A tight calving pattern starts with heifers

Dr Barry Zimmermann says heifers should be joined to start calving two weeks before the main herd.

Dairy farmers who want to achieve and maintain a tight calving pattern need to include heifers in the plan.

Dr Barry Zimmermann, who manages Dairy Aus­ tralia’s InCalf program, said that heifer manage­ment had a big impact on a herd’s calving pat­tern.

“Decisions you make about heifer management will strongly affect the herd’s calving pattern,” Zimmermann said.

“For example the calving pattern of your heifers is strongly influenced by their growth rates and their weight at joining.

“Secondly, the herds calv­ ing pattern will be influenced by the number of heifers available to replace older and less fertile cows – as they will calve later if they remain in the herd.”

A tight calving pattern is achieved by maximis­ing the

number of cows and heifers that calve in the first three weeks of the calving period.

Aim to have at least 85% of your heifers calved by week three.

“A good strategy is to join heifers to start calving two weeks before the main herd.

This gives them some extra time to recover from their first calving and start cycling before the joining period.

“It also compensates for lower conception rates that can be experienced by using sexed semen.”

But joining heifers early relies on excellent calf and heifer rearing practices so that heifers reach their target joining weight by 14 months, or as early as 13 months for later born calves.

“To achieve target growth rates, heifers will need a high-quality supplement at some times, for ex­ample post weaning and when high quality pas­ture is not

available.”

Supplements should contain at least 11-5 11.5 mega joules metabolisable energy per kilogram of dry matter, and 16% crude protein.

The best way to be sure heifers will achieve their target joining weight by 14 months is to weigh them regularly and take action if target growth rates are not achieved.

If heifers reach their target mating weight by 14 months, it may be worth considering a synchro­ nisation/blanket AI program.

This has two benefits.

Firstly it means a large number of the heifers will calve early, setting the herd up for a tight calving pattern.

Secondly by inseminating the heifers, their progeny can be kept as replacement stock, so this will boost the number of replacement heifers available in two years time.

Dairy NewS AUSTRALIA september, 2012

animal health // 27

Showing signs of success Rick Bayne

The signpost outside Paul and Karen Finlayson’s farm at Jancourt East in Western Victoria is about to be adjusted to make way for yet another award.

For the 18th year in a row, the Finlayson’s Fire Lake Holstein stud has been recognised in the top 5% in the Dairy Australia Countdown Milk Quality Awards for producing one of the lowest annual average bulk milk cell counts across all Australian farms.

Throughout that time they have also received annual awards from their supply company Fonterra (formerly Bonlac) for their low cell count milk.

The ever-expanding signpost says it all.

“As people drive in, that signpost is the first thing they see,” Karen says.

“We’ll have to rearrange it again to make these fit.”

For the unassuming Paul, the awards are nice recognition for his solo performance in running the farm and maintaining consistently top quality milk and a healthy herd.

With their two sons now working off the farm in trades and with Karen battling ongoing serious health issues, the load falls with Paul...not that he’s complaining.

“It doesn’t worry me...I take it in my stride,” he says. “There are days when you get a bit tired but I like being my own boss.

It varies between a 12 and 14 hour day and up to 20 hours at harvest time, but there are days in the quiet period where I can bum around a bit.

“I love what I do and we’re keeping our heads above water, as long as the milk price doesn’t bottom out.”

In fact, Paul thinks it is his consistency as the sole operator that contributes to the farm’s healthy herds and premium quality milk.

“Because I’m the only milker in the dairy I pick up on anything that’s out of the ordinary. If we had two or three milkers they may not notice anything wrong,” he said.

“You get to know the cows when you’re with them every day. I check

them out to make sure they’re OK.” The only time he doesn’t milk is when relief milkers come in once a year to allow Paul and Karen to take a short holiday.

The herd ranges between 80 and 90 cows and produces an average of 8000-8500 litres. The average butter fat is 273kg and protein 223kg.

Paul adopts a proactive approach to keeping his cows healthy.

Although mastitis hasn’t been a major problem, in recent years the farm has started using Teatseal with good results.

“After starting with Teatseal our mastitis was down 27% last year and it will probably be down even further this year,” Paul said.

“Mastitis has never been a big problem but if you can reduce it even further that’s more quality milk in the vat which is good for the farm.”

Paul also adopts a preventative approach in the upkeep of his dairy. “I’ve got a 12 a side herringbone, nothing flash but it does the job,” he said.

Every year Paul hires qualified technicians to service the plant and he also changes the rubber ware and liners annually.

Herd testing is carried out regularly.

Paul has always teat sprayed after milking and individually cleans each teat and uses a traditional dry cow glycerine antibiotic at drying off, followed

by Teatseal.

If mastitis is detected Paul treats it with a combination of intramammary and intramuscular antibiotics. “We’ve only had three cases of mastitis this year which isn’t bad considering the wet weather.”

Keeping the milk in band one has ensured the farm receives payment incentives. “That’s impor-

Who:

Paul and Karen Finlayson Where:

Jancourt East What:

Milk quality

tant for our bottom line,” Paul said.

The Finlaysons farm off 70ha, although the available land is restricted to about 56ha because of native bushland.

The farm uses direct drilling in autumn for mainly ryegrass and clover crops. “I prefer not to rip up paddocks if I can help it, though a few are a bit pugged up this year so we might have to,” Paul said.

Until about four years ago they leased an adjoining 44ha farm but decided not to pursue its purchase when it came on the market. “Our two boys are not interested in milking cows so why go into heaps of debt? We dropped back from about 130 cows but we’re managing all right with the smaller herd,” Paul said.

Because of the smaller farm size and resulting lower pasture growth, they are forced to bring in about half of their hay requirements. “That’s a necessary evil but we shop around to get the best prices,” Paul said They also call on a nutritionist to help with their stock feeding program. “He’s about the only outside help we get in,” Paul added.

They bring in about 20 heifers per year and raise about 30 calves.

Cows are only dried off if they are producing less than 10 litres.

Paul built up his Holstein Friesian herd despite his parents having Jerseys on their farm just five minutes away. “I like the Friesians, he said.

“They are a bigger cow but more placid and easier to

handle.”

The formula is working for Paul and Karen, who were both born and raised on dairy farms in the area.

Karen loves the farm life, even though her health restricts how much she can do to help.

She is on her third pacemaker for vasodepressor syncope, a disease which closes down her blood vessels and restricts the supply of oxygen and results in her often passing out.

She also had a hysterectomy which led to further

on the farm and then comes in and cooks tea for me.

“We have a fairytale marriage. We haven’t even had an argument in more than 20 years.”

If their relationship has been a success, so too has their farm.

The ever-expanding honour board at the top the driveway stands as proof of that.

The signpost outside Paul and Karen Finlayson’s farm will be adjusted to accommodate another milk quality award.

IN UDDER WORDS...

It’s a great season for - PInkeye Dairy farmers in many regions expect a great start to the season, but anticipate a high fly challenge when the season warms up; and with flies comes pinkeye.

Pinkeye hits dairy farm productivity by reducing the growth and fertility of heifers and creating extra work and cost to treat.

Coopers® Animal Health vet Dr Damian O’Brien said pinkeye outbreaks were hard to treat – yet easy to prevent.

“Once pinkeye hits, life becomes a daily grind of identifying and treating affected calves, which takes a lot of time. Ointment and eye patch applications can be good treatments, although very labour intensive“ he said.

“To add to the hassle, bringing animals in to treat can even help to spread the disease further.” Dr O’Brien said that affected animals could also be rejected for the export dairy heifer market and were not attractive to stud operators.

“The worst of pinkeye is that it hits your future, as animals under two years are most susceptible.

Pinkeye can reduce growth rates by 3-5%, reduce heifer fertility, cause blindness and reduce sale opportunities. It can also reduce milk production in mature cattle,” he said.

Dr O’Brien said that preventing pinkeye used to focus on fly, thistle and dust control, but was now easier than ever with PILIGUARD®, a single dose vaccine to help prevent pinkeye before it starts.”

Paul and Karen Finlayson

medical complications and three near-fatal experiences.

“When you nearly die a few times that puts things in perspective,” Karen, 44, said.

“I love the farm life.

I couldn’t even live in a town the size of Cobden (population about 1800).

“I try to help but I can’t do much, which makes it harder for Paul. He works

Dr O’Brien said that PILIGUARD works by blocking bacteria from attaching to the cornea and establishing an infection. PILIGUARD performance can be enhanced when used in conjunction with fly control in dairy cattle.

“Farmers have told us they find it easy to administer, by treating at least three to six weeks before the pinkeye season, and choosing convenient management times such as when doing clostridial vaccinations.”

“Your youngest stock are your farm’s future – why let pinkeye hold them back?”

Vaccination with PILIGUARD: • Must be administered 3-6 weeks prior to the anticipated pinkeye season • Reduces the incidence and severity of the disease and reduces animal suffering • Minimises production and economic losses associated with pinkeye For more information on preventing pinkeye with Piliguard, talk to your local Coopers Animal Health Representative on 1800 885 576. www.pinkeye.com.au ® Registered Trademark

Dairy News AUSTRALIA september, 2012

28 // animal health

Building on best genetics For US-trained veterinarian, Enoch Bergman, moving to the Swans veterinary practice at Esperance on the south coast of Western Australia nine years ago, has provided the opportunity to hone his skills in bovine reproduction and further develop his specialisation in managing Bovine Viral Diarrhoea Virus (BVDV), otherwise known as Pestivirus.

In the process he has

key to building cattle numbers and meeting the ever increasing demand for dairy produce.

Bayer has modified traditional synchrony programs with the aim of making every inseminated straw count. The dairy program known as ProSynch utilises the CueMate synchrony device and a range of Bayer’s advanced fertility regulators, which enable timed insemination of previously

become one of Australia’s most valued practitioners and a much sought after advisor to beef and dairy producers across the country.

His recent tour of southern and central New South Wales, co-sponsored by Bayer and Idexx Laboratories, has combined his special interest in BVDV with his broader veterinary expertise, particularly focusing on synchrony programs that are

non-cycling cows and heif- dition at ovulation,” Dr Bergman said. ers simultaneously with These advanced syncycling cows and heifers. chronisation programs “In anoestrous dairy give good cows a second cows, primarily caused by chance low energy allowing levels and Advanced high prosynchronisation producers to cull duction, can save the ‘true’ we are able late calving, bottom to use PropercentSynch pro- genetically age, on the grams with superior cows. basis of Cue-Mates to reset the follicular wave overall performance, not just because they didn’t and get it in perfect con-

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“This allows producers to ‘salvage’ late calving, genetically superior cows,” Dr Bergman said.

“Getting in calf at first joining sets a cow up for a good reproductive life.”

The other benefit of the Prosynch program is the more even line and tighter calving patterns, which make management easier.

“Calves that are born earlier are ready to lactate earlier,” he said. “To add to this the ‘calving surprise’ is reduced - producers know when calves will drop and can plan around these dates.”

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In 2006 he established Australia’s first commercial laboratory for the diagnosis of animals ‘Persistently Infected’ with BVDV, using ear notch samples.

The introduction of ear notch testing has paved the way for a more comprehensive herd testing programs, allowing unweaned calves to be tested for the disease.

“We work with farmers at herd level to eradicate the disease and set up an independent surveillance system to get back on top of it if it returns.”

It is estimated 90% of Australian cattle farms are exposed to BVDV, costing an estimated $15 to $100 per animal each year, yet to date there is no national strategy to eradicate the disease as has been done

in Norway.

“The major impacts from BVDV are reproduction losses, a direct consequence of poor development and lower weight gains,” Dr Bergman said.

“They don’t get pregnant because the immunosuppression caused by BVDV permits other diseases such as salmonella, e-coli, respiratory disease and footrot to take hold.

“Often BVDV is overlooked as a cause because it is in the background.

Once the scours are fixed, another issue develops because of the immune suppression caused by BVDV.” BVDV persists in the animal and it continues to infect others. Vaccinations are now available to create BVDV immunity among animals that are not infected. PIs can be identified through antibody testing and removed from the herd.

BVDV remains an underdiagnosed viral disease among cattle, often mistaken for natural genetic weakness in calves that develop poorly, or indirectly causing increased abortion rates and still born calves.

Infection can impact on conception, neonatal calf survival, weaning weights, mortality, feed consumption and average daily gain.

BVDV is believed to be spread almost exclusively by Persistently Infected (PI) animals.

PI’s were infected with BVDV in utero between approximately months one and four of their pregnancy.

They go on to be born persistently infected with BVDV, as their immune system fails to recognise the virus as a pathogen and never mounts a defence against it.

Because the virus is allowed to replicate unchecked, PI’s go on to shed extreme amounts of virus for their entire lives.

The only way to become a PI is to be born one.

Dairy NewS AUSTRALIA september, 2012

animal health // 29

Sort gates help herd health animal health rob bonanno become larger and rely more on labour, I believe that an increasing use of technology and investment in infrastructure to facilitate handling and processing of cows will be an

essential part of the recipe for success.

I would encourage all readers to talk to their own dairy vet about ways that they could improve their herd health monitoring and reap the rewards of early identification of cows with metritis, metabolic disease or other diseases of transition.

• Rob Bonanno is the past president of the Australian Cattle Veterinarians Association and a director of the Shepparton Veterinary Clinic.

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drafting and sorting out the fresh cows.

I have always had reservations about this because by that time some cows may have been infected for up to 90 days.

Intuitively, I would expect that the sooner that the infection is treated, the less likely that chronic endometrial damage in the uterus would occur.

The challenge is in identifying the cows and sorting them for a Metricheck and fresh cow examination (ketosis and LDA check) easily and efficiently.

The use of a sort gate and automatic ID has made this job simple on one farm where I am aggressively screening fresh cows.

Consistently, we are finding around 25-30% of cows at 8-14 days in milk are Metricheck positive and are being treated with Excenel for metritis (dark, smelly discharge with full thickness uterine inflammation) or Metricure for endometritis (pus without full thickness uterine inflammation).

It is important to distinguish infected cows from those with a healthy post calving discharge.

We plan to monitor these treated cows to see if they achieve the expected improvement in pregnancy rates that have been recently reported in the veterinary literature once joining starts.

It is a constant concern of mine that many farms lack the infrastructure and improvements required for us to be able to easily manage the fresh cows to check them for routine health parameters.

On most of the dairy farms where I work I would never even suggest implementing fresh cow health protocols because they cannot be performed in a time efficient or cost efficient manner despite the potential for great benefits.

When I worked in the USA, a majority of the farms had headlocks and sort gates to make the drafting and processing of large numbers of fresh cows simple and efficient.

As farms in Australia

Ask i

Northern Victoria is calving season. It is also pasture growing season, calf rearing season, transition management season, fresh cow management season and last but not least, footy finals season!

I think that spring is also a time when dairy farmers need to just take a quick look at their staff and make sure that they are all still up to speed.

Have there been any new staff employed since last year?

Have staff changed jobs or are they taking on new tasks?

Now is the best time to review your protocols and ensure that all the farm staff know what to do and when to do it.

Refresher training in the calf induction protocols to ensure that calves get adequate colostrum of optimum quality in a timely manner is a message well worth reinforcing to all the farm staff at this busy time.

Calving assistance requires a clean and gentle approach with due regard for the risks to both the cow and the helper if restraint is inadequate.

Also, staff should be protected from Q-Fever by ensuring they are vaccinated prior to assisting with calving cows and all cows should be vaccinated for leptospirosis.

Management of transition cows requires close monitoring and is a partnership between herd managers, nutritional advisers and the herd veterinarian.

A smooth and successful transition sets a cow up for a successful lactation and future reproductive success.

Your herd veterinarian is ideally placed to investigate transition problems as he or she has the skills that you will require to investigate what is usually a multifactorial problem.

Recently, I have been doing a few “Metrichecks”, looking closely at fresh cows to identify those with metritis (infected uterus).

In many herds, we check the cows once just before joining starts and treat the infected cows due to the difficulty in

BONUS 1 L Co ope rs E

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Dairy News AUSTRALIA september, 2012

30 // animal health

Robots reduce wear and tear RICK BAYNE

At 48, Darryl Light is starting to feel the aches and pains that sometimes come with life as a middle-aged dairy farmer.

So he has done something about it on his one-man farm at Drouin South in Victoria’s Gippsland region.

Light is the first dairy farmer in Australia to install the new Lely Astronaut model A4 robotic milking system and was partly motivated by a need to protect his ageing knees and hips.

“I’m 48 and single and my parents have retired from the farm so if I want to stay in the industry I needed to do something to reduce the wear and tear on my knees and hips,” he said.

“I’m too young to retire and if I went into another job it would probably be manual labour and that would be worse.

“The old shed was suitable for someone about five foot three and I’m about six foot so the new set-up has probably given me an extra 10 years.”

The new system replaces a 10-a-side double-up herringbone that had been in use for nearly two decades.

Darryl Light is the first dairy farmer in Australia to install the new Lely Astronaut model A4 robotic milking system.

However, the probNot only has it made lem cows are a small life easier for Light and minority and most have given him more free adapted well to the time to attend to other walk-through design. jobs around the farm, “In earlier models they most of his 120-strong have to step in, but here herd have adapted they just walk straight comfortably to the Who: through and they seem robots.

Darryl Light to find it easy enough,” “I had to sell one Where: Light said. cow because she didn’t Drouin “The grate where like it and wouldn’t What: Robot milkers they stand encourages stand still for the them to have their back cups to go on. There’s another one fidgeting a bit and not get- feet further apart. The back door opens ting used to it but the rest have taken and the feeder folds out so it’s easy for to it. I had one after the fourth go that them to stick their heads in the feed went in by herself to get milked...that’s bin.”

The system is set to feed 420 grams not bad.”

While some farmers have a Rotary per minute. The walk-through design is dairy to fall back on if cows don’t take based on research that shows cows are to the robotic system, Light doesn’t not really capable of making turns.

Light farms off 64 milking hectares have that luxury.

“At the moment I’m experimenting with a 28ha run off which also supplies with putting them out in a separate area hay and silage. He is happy to stick with if they don’t let themselves get milked. his current herd of 120, which is made You have to let them train themselves up mostly of Jerseys plus some Guernand work it out – if they let the robot do seys. The numbers were reduced from its job then they get a feed and drink, if about 160 when his parents were more not they might get a bit uncomfortable.” actively involved in the farm.

“If you do things properly you can make a good living under 150 cows,” he said. “I don’t see how big numbers work...if you get too many you have to walk them too far and you might not be able to look after them properly.”

A fourth generation dairy farmer, Light puts strong focus on maintaining good soils. “Basically I just grow grass but I’m working hard to improve the soils. We have soil tests done and then make fertiliser to fix the deficiencies,” he said. “I want to build up the carbon levels.”

One of the advantages of the robotic system is the additional time he has for other jobs around the farm, plus get a bit of leisure time for himself.

“It changes how you farm,” he said.

“It doesn’t matter if you’re five minutes late. You don’t have to be there twice a day for milking and you can tend to the other jobs that have to be done,” he said.

“You can get things started and then head back to bed for a couple of hours.”

It has also given him some new coworkers, Robbie, Tin-Ed and Hennie.

Robbie, after the sci-fi `Robby the Robot’ from `Forbidden Planet’ and `Tin-Ed’ which is short for Tin Head,

are the names given to the new robotic arms.

Hennie is the automated warning system, so named because her voice sounds Dutch. “She’s like a Dutch sheila stalking me if I forget something,” Light quips.

It is too early to quantify how the change has impacted on milk production. “I reckon you need to ask that after 12 months but so far it seems to be going okay. The system includes an in-line meter that measures daily fat and protein levels per cow and a software package that helps Darryl to develop feed to production plans.”

Light believes the robotic system will hold its value and that other farmers will follow in his footsteps. “There is a generational change and younger farmers are looking to technology. In five to 10 years time more will be putting in robotics instead of a herringbone.”

Despite now using high tech equipment that was only science-fiction when the original Robbie the Robot was on the big screen, Light says the key to being a good farmer remains as having “an ability to understand nature”.

Dairy NewS AUSTRALIA september, 2012

machinery & products // 31

Total solutions for dairying GEA Farm Technologies

Goulburn Valley dairy farmer Ryan Tuckett is onto his 17th Polaris off-road vehicle.

Looking for the most efficient upgrade?

Polaris keeps on keeping on for Tuckett working clothes chris dingle Westbury Rural Services.

Tuckett is pretty concise in his explanation on why he likes Polaris; “The ride and handling has always been superior to other brands and the two year warranty is a real bonus”, he said.

The current machine that he was keen to show us is his Hawkeye 400 two-wheel-drive ATV that was delivered just before Christmas last year through Benalla Chainsaws.

He has now bought three Polaris vehicles through them. The other Polaris on the place is a Ranger 400 petrol side-byside unit that is about 18 months old.

The Hawkeye 400 runs a 455cc engine coupled to Polaris’ variable automatic shaft drive transmission, with low and high ratios.

The engine develops 29 horsepower.

The independent rear suspension features McPherson struts with longer travel than most other ATVs and Tuckett said that’s what gives the vehicle such a smooth ride over the rough tracks common to local dairy farms.

The radiator is mounted high in the chassis and angled rearward to keep it out of the dirt.

He likes the fact that Polaris offers a substantial range of accessories, including a front-mounted box that comes in handy for tools, electric fence tester and the like.

As standard, anyway, the Hawkeye has integrated racks and storage compartments that keep items out of harm’s way.

The Hawkeye is used for all the watering tasks involved in the irrigation system, plus it does great service when fencing, mustering and fetching cows.

The Ranger 400 is a bigger two seater machine, with the same 455cc engine, and is used for the heavier towing and jobs like spot spraying.

“I find it is a real safe unit when I have my young daughter, Chelsea, with me,” Tuckett said.

Who:

Ryan Tuckett Where:

Katunga What:

Polaris

It has similar independent rear suspension to the Hawkeye, a tipping box, on-demand all-wheeldrive and a top speed of 64km/h.

Both Polaris machines are used for towing the calfeteria-type feeders.

The Hawkeye has a towing capacity of 555kg and the Ranger is just a little higher at 567kg.

Tuckett said the Hawkeye and the Ranger have all the usual Polaris traits, plus ample power, but it hasn’t always been oneway traffic; “Since we’ve been farming in Victoria we’ve also owned Yamaha, Suzuki and Honda ATVs, but recently the price has come back on the Polaris and that was an important part of our purchase decision with the most recent models.”

There are now five

“We are milking 280 cows an hour, without pushing it. We can put the cups on three cows in the time that it took to do two.”

John Watson, Cobram VIC.

GEA Milking & Cooling

ATVs between the two farms.

He enjoys being in the dairy industry and he’s determined to stick with it, at least for the time being while they see what happens about the water situation. They use flood irrigation on Zone 6 of the Murray region system.

One other full-time worker is based at the home farm, and Tuckett helps with the running of both farms, spending time between the two operations.

“It’s good being your own boss, you have a fair degree of flexibility with your working week, and that’s particularly important for me with my young daughter.”

He is not quite so emphatic about sticking to the one brand when it comes to the farm equipment.

They grow all their own hay and silage using a New Holland 7040 tractor, Lely mower, Massey Ferguson rake and a Krone loader wagon.

• 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

High-quality products for manure handling Houle electric effluent pumps and agitators a full line of equipment to cover all applications

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Have a master chef in the calf shed WestfaliaSurge Automatic Calf Feeders provide a better way to rear strong healthy calves.

Save time, labour and effort: freshly prepared feed, temperature controlled, precise feed monitoring and dispersal, automatic cleaning

GEA Milking & Cooling Call 1800 789 100 for the name of your nearest dealer Email info.auft@gea.com www.gea-farmtechnologies.com.au

GEA Farm Technologies The right choice

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It’s hard to believe that Ryan Tuckett, from Katunga in the Goulburn Valley, at just 28 years old, is onto his seventeenth Polaris off-road vehicle.

He is so impressed with the performance and reliability that he upgrades regularly to keep up with the latest models.

Tuckett has been sharefarming at the 140ha irrigated property for about seven years since coming over from Tasmania.

He grew up on the family dairy farm over there and made the change to head over to the mainland, looking for more opportunities in the industry.

The farm currently runs 400 Holsteins, milking on a 30 unit swing-over herringbone shed with automatic cluster removers.

Tuckett is also involved with another dairy farm of a similar size about 5km away.

He has been enthusiastic about the American brand since buying their first model in 1994 for their Tasmanian dairy property from the local dealer at the time, Loone’s Rural Services, just out of Launceston. The dealership has now become

Choose WestfaliaSurge IQ clusters for faster milk out, improved udder health, cleaner milk.

6/08/12 6:28 PM

Dairy News AUSTRALIA september, 2012

32 // machinery & products

PFG extends Kverneland deal PFG Australia is consolidating its brand offerings, it told those attending the PFG in Action field days in Shepparton last month.

PFG machinery division general manager Graeme Leigh said his company has signed a new long term contract with the Kverneland Group.

“We have been distributing Kverneland products in New Zealand since 1989 and in Australia since 2007, and we look forward to continuing what has been a very successful relationship,” Leigh said.

“Kverneland Group’s new owners have announced they intend to double

its turnover to 1 billion euros by 2017.

This is exciting news for PFG. We and our customers on both sides of the Tasman will benefit from the investment Kverneland are making in their product portfolio.

“Kverneland has been at the forefront of technological developments in disc and drum mowers, rakes and tedders, chopping systems in balers, electronic metering and calibration of fertiliser spreaders, and ISOBUS technology.

“We expect them to continue their major investments in research and development.”

PFG Australia has signed a long-term contract to continue distributing Kverneland and Vicon machinery in Australia and New Zealand.

TALK TO YOUR ACCOUNTANT AB OUT THE CONSERVATIO N TILLAGE REFUND ABLE TAX OFFSET

INTRODUCING THE BRAND NEW...

SEEDMATIC AIRPRO 4132T MK2

Big pumps make sense Kirsty Clayton checks out the new Aussie QP3310SX high pressure transfer pump.

®

Despite a sowing width of 4.8m the Aitchison 4132T MK2 can be comfortably towed by a 120hp tractor.

Aitchison uses the world renowned Aitchison inverted ‘T’ boot system mounted on a coil spring and disc coulter undercarriage.

›› 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

Check out this machine at th e Elmore and H enty Field Days!

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

With the new Carbon Tax set to drive fuel costs up, farmers are looking for more efficient pump equipment.

One company, Australian Pump Industries, has been working hard to develop a line of bigger flow and higher pressure transfer pumps.

These use less horsepower and consequently less fuel to achieve fast and positive water transfer results.

“We began work on this project five years ago” said Aussie Pump product manager, Brad Farrugia.

“The result is 3” pumps that are cost effective but deliver unparalleled results in both low pressure and high pressure water transfer applications.”

Based on an original design conceived for high pressure fire fighting and crop protection applications, the new Aussie “Brigade Boss” pumps deliver heads as high as 70m and flows of up to 1500 litres per minute. All of this is achieved with either Honda petrol, or Yanmar, or Kubota diesel engine drives.

The big pumps are not only designed to move more water per litre of fuel but also to prime better than any other self-priming pump on the market.

“The Brigade Boss series will draw water through a vertical lift of 8.4 litres.”

The petrol versions use genuine Honda GX series 13hpw engines, backed by a three-year Honda warranty.

The pumps are superbly matched with the engines capability and designed to get the most out of both wet end and engine.

Diesel engine models, generally considered to be both more fuel efficient and possess engine longevity factors not found in petrol drives, are genuine Yanmar or Kubota diesels, chosen for their performance, features and top quality.

Aussie Pump engineers developed interchangeable impeller kit guide vanes for the big 3” pumps. Those combinations provide a range of variations that enable the farmer to select, and if necessary to convert, his pump during the life of the unit to different performance characteristics to suit individual jobs.

Dairy NewS AUSTRALIA september, 2012

machinery & products // 33

Remote water system wins innovative prize A COMPANY making water monitoring and management systems has won the Irrigation Australia 2012 new product/innovation award.

Observant received the award – for its C3 remote water monitoring system – last month in Adelaide at the Irrigation Australia annual awards night. C3 was recognised for originality, quality of design, scope for acceptance by the market, water and energy efficiency contribution, and potential to

reduce environmental impact through water savings.

The company says evolution of the C2 to the C3 was inspired by customer’s needs for managing their equipment and maintaining their properties. After 18 months of development and launching next month, the C3 will offer a flexible, simple, reliable, affordable method to remotely manage water systems, Observant says.

The system averts the need to drive around

a farm. Instead it offers simple, reliable tracking for a single viewpoint of a property. Available in modular and stand-alone systems, the C3 “takes the flexibility of Observant’s remote monitoring equipment to [a new] level, and provides a higher quality device” at lower cost.

The Observant C3 gives farmers and irrigators a means of remotely managing a large range of equipment using wireless communications. Monitoring and managing water

systems may require only looking at a smartphone or logging into Observant Global via the internet.

Observant chief executive officer Matthew Pryor says the award is “a great tribute to the Observant team for… flexible and simple solutions to manage water systems.”

Trevor LeBreton, general manager of Irrigation Australia, acknowledged Observant’s contribution to agribusiness and water management. “We were delighted to pres-

Observant C3

ent Observant with this award for their innovative approach to new product development. This rec-

ognition was due in large part to the considerable benefits, the businesses using Observant systems

are reaping… savings in labour, fuel, mileage and water loss costs.” www.observant.com.au

SCORE A FREE LOADER WITH MAXXFARM 35, 50 OR 60 TRACTORS

Milk production relies on fodder THE QUALITY of

fodder is crucial to achieving good milk production, animal health and enhancing farmers’ business results, says Lely.

The forage harvesting machinery and milking machine maker says while there is no universal answer on how to produce the best roughage, its new machines are a great help.

“Each business is unique and requires its own approach. Therefore, Lely has developed an exceptionally broad range of forage harvesting machines always allowing customers to select the machine that best suits their specific situation,” the company says.

Lely’s Hibiscus Vario boasts maximum working width and perfect swaths.

The rake features a hydraulic Vario working width adjustment. This system also reduces the transport height to 3.95 m

by lowering the rotors and locking them at the same time.

The broad range of the hydraulic working width adjustment gives the driver the possibility to adjust working and swath width while raking.

The same movement of the suspension is used to lower the rotors for transport and secure them at the same time.

A unique feature on all four CD models is the cardanic 3D suspension with the pivot points located slightly in front of the centre of the rotor which ensures stability.

The ‘smart’ front wheel assembly close to the tines takes care of proper raking while the wheel at the back of the carriage carries the weight of the rotor. The 745 has four wheels and the 915 models have two extra (tandem) wheels at the back to add more stability and quiet running for larger rotors.

Purchase a selected MaxxFarm® 35, 50 or 60 tractor before September 30 and you can score a MaxxLift self-levelling loader with standard bucket for no extra cost*.

See your Case IH dealer today and don’t miss out! www.caseih.com

*Terms and conditions apply. Offer available from participating Case IH dealers until 30/09/12 or while stocks last. MaxxLift loader model included depends on MaxxFarm model purchased. Not available on MaxxFarm 25 and 30 models. See participating dealers for more information.

Dairy News AUSTRALIA september, 2012

34 // property

Market finds floor price liz cotton

FOLLOWING a series of challenging

years, the dairy property market is presenting a number of promising opportunities for buyers as vendors show their preparedness to meet the market.

While dairy property values have fallen by as much as 35% in some areas since peak periods in 2008, recent transactions have indicated that a floor may finally have been reached in the market, according to Ray White Rural Warrnambool principal Tim Gladman.

“Since the global financial crisis the dairy property market has undergone a period of rationalisation and from this, a two-speed market has emerged,” Gladman said.

“This has seen distressed asset sales of farms that are run down productivity wise with poorly maintained improvements, recording values 20-35% below where they sat at peak levels in 2008, and top tier farms that have been well managed and contain quality infrastructure, selling at a 10-15% price correction - I think we could have well reached the floor in the dairy property market.”

Rural Director of property valuation company Herron Todd White’s

More Gippsland farmers have been looking at dairy properties in Western Victoria.

Tim Lane agrees.

“There has been a swing towards vendors realising that the market today is the market today,” Lane said.

“Despite the prevailing commentary from around the regions that there is some interest in quality properties, there are not many sales to report over the last month, but there appears to be more people out looking.”

Gladman believes the long-term global outlook for the dairy industry remains strong and properties in

regions that are within 100km of processors and have relatively reliable climates will continue to remain sought after.

“We have seen quite a few Gippsland farmers looking at dairy properties in Western Victoria where land values are cheaper than in the east where urban development is competing with farming land,” he said.

“One group of buyers to drop out of the market for the time being is our neighbours across the Tasman - there

has been little interest coming from New Zealand due to the high exchange rate.”

But Australia’s dairy farms are attracting the attention of the top end of town along with some international interest.

Gladman said there has been a resurgence of interest in quality dairy farms, with “lots of South West Victorian operations currently under the microscope of both domestic and international corporate institutional investors, as well as other farming operators looking to expand or aggregate properties with a number of sales recorded in recent years from this sector.”

A few months ago, the Macquarie Group set up Harris Dairies - an agricultural fund to buy dairy farms, with Norco Cooperative chief executive Murray Richardson and former Warakirri Dairies chief executive Robert Burbury among its directors.

The move coincided with New Zealand’s $700m New Plymouth District Council embarking on a $200 million capital raising venture to expand its Australian dairying arm, Van Diemen’s Land Company, in Tasmania’s north-west and a big push into the Tasmanian powdered milk market by a Chi-

nese company.

Betty Kay of Betty Kay Realty, Circular Head, Tasmania, believes economies of scale can be achieved by large-scale investors through the amalgamation of Tasmanian dairy properties.

“We have the advantage of low cost production and with plenty of quality properties on the market, I strongly believe it is an opportune time for superannuation companies and corporate investors to enter the market here.

“They could potentially buy 23-25 farms with the confidence of the manufacturing sector’s investment and commitment to dairy in Tasmania.”

In Western Australia, China’s Hangzhou Wahaha Group, announced plans earlier this year to invest up to $220 million in dairy farms but is yet to make a purchase. In January, one of WA’s biggest dairy farms, Ravenhill, sold to a Chinese buyer.

In some parts of New South Wales, dairy farmers and other farming operators are facing increasing pressure to sell land to mining consortiums.

After two years of negotiation, a 500cow NSW dairy business has reached an agreement to sell its land to coal explorer Gloucester Resources Limited (GRL) for an undisclosed sum.

“Melro” 1481 Acres – Large Scale Production Powerhouse – 1300 Cows Heywood SOUTH WEST VICTORIA • 32” (800mm) average annual rainfail region • Mild coastal climate • Extensive laneway system - good tracks • 95+ main grazing paddocks • Large catchment storage dams & bores • 2” water lines, 1,000 gallon troughs • Sandy clay loam to clay loam soils • Herd and P & E available at valuation Turnkey Operation - high production farm in tip top order with significant capital recently reinvested.

Information Memorandum available electronically

Expressions of Interest Closing Wednesday 31st October Tim Gladman 0418 131 638 tim.gladman@raywhite.com raywhiterural.com Web ID: 832611

Warrnambool

BMRCOU 0021

• 1176 acres freehold, 305 acres leasehold • Close proximity to towns and regional centres • Strong management/labour team in place • 50 unit rotary dairy, 32,600 litre vat, 600 cow yard • Ration preparation shed, 8 bay steel/colourbond shed • 600 cow concrete feed pad - auto floodwash • Calving area - undercover yards with power & water • Modern 30 square 4 bedroom WB home (Circa 2006) • 2nd comfortable 3 bedroom home • High production: 600,000 – 700,000kg MS

TRACTA39448E-AUS

IMAGINE NOT LEAVING YOUR PROFITABILITY IN THE HANDS OF DYLAN

Spotting that unhealthy cow in the milking shed requires your full attention. Human error costs farmers thousands of dollars a year – not to mention the wasted time spent chasing false positives.

Best of all, because the Alpro™ system is modular, it paves the way for adding future management applications – like in-shed feeding, milk recording, sorting cows and more.

Take the risk out of your operation with the DeLaval blood and conductivity solution.

Upgrade your shed now to give you topof-the-line herd management, and another aid to help the detection of mastitis.

Talk to your local DeLaval dealer today and start imagining more.

Call 1800 817 199 or visit www.delaval.com.au

Make huge energy savings with our smart technology Increasing electricity costs will impact dairy farmers substantially.

You can cut electricity usage and produce free hot water to help you save energy.

GEA Farm Technologies Vacuum on Demand Energy Saver Only generate as much vacuum as you actually need at the time. The VoD EnergySaver uses a frequency controller to regulate the speed of your vacuum pump, saving up to 80% of energy use. Only pay for the vacuum that you actually need for milking.

Stable vacuum for better udder health, plus decreased vacuum pump noise and greater environment protection.

with each unit protect the tank from minerals in the water supply.

Single unit heat exchanger and water tank means reduced installation time and space saving. Two distinct heat exchanger circuits allow heat recovery from two cooling units with one Superheater.

CL vacuum pump New coated lobe vacuum pump is designed for long milking times, lower operating temperatures and more efficient performance.

Exclusive internal coating reduces exhaust temperatures. Non-stick lobes more readily release milk vapour build-up. Matched to ‘Vacuum On Demand’ control, it offers high energy savings and low maintenance costs.

Free hot water from Superheater WestfaliaSurge Superheater uses heat extracted during milk cooling to heat water. Fully insulated and with a double-wall heat exchanger, it uses a 455 litre water tank. Stainless steel exterior enables easy cleaning. Two anode rods

Find out how our world-leading technology can cut your electricity costs.

Call 1800 789 100 for the name of your nearest dealer Email info.auft@gea.com www.gea-farmtechnologies.com.au

GEA Farm Technologies The right choice

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GEA Milking & Cooling