Dairy News Australia October 2013

Call for more farmers on DA board page 10 LOADER WAGONS

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october 2013 Issue 41 // www.dairynewsaustralia.com.au

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Dairy NewS AUSTRALIA october 2013

news // 3 Black clouds roll in after a hot and windy October day on James Stacey’s farm at Langhorne Creek, south east of Adelaide. These barley crops are being baled for dry cows.

Photo: James Stacey

Tasmanian farmers Grant and Melanie Rogers milk three times every two days.

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Shepparton vet Rob Bonanno says written protocols for young staff will save potential heartache. PG.22

Jamie Forster keeps returning to Boomerang hay feeders for consistency and reliability. PG.28

News ������������������������������������������������������3-13 Opinion ���������������������������������������������� 14-15 Agribusiness ������������������������������16-18 Management �������������������������������� 19-21 Animal Health ��������������������������� 22-27 tractors & machinery ������������������������������������28-34

China FTA must not exclude agriculture Prime Minister Tony Abbott wants Australia’s stalled free trade agreement with China finalised within 12 months.

However, he has warned he could accept a compromised deal to meet the timeline.

Negotiations on the AustraliaChina FTA have been taking place since April 2005 but the process has stalled after 19 rounds, mostly on issues related to agricultural trade and Foreign Investment Review Board scrutiny of Chinese investments.

Any compromise on a deal would likely be at the expense of what matters most to farmers.

The Nationals have asked Mr Abbott to lower the FIRB threshold for examining purchases of agricultural land to $15m, and to $53m for agribusiness.

The threshold now for single

investment is $248, and there is no foreign investment registry.

Mr Abbott met with Chinese President Xi Jinping early this month and said he wanted the FTA “to be as comprehensive as possible”.

“I have always taken the view that you should take what you can get today and pitch for the rest tomorrow, when you have a strong foundation to build upon”.

Negotiations with Japan, started in 2007, and South Korea, started in 2009, have also stalled. The Government has said it wants all three FTAs concluded within its first three-year term.

National Farmers Federation president Duncan Fraser welcomed the Government’s commitment to finalising the China free trade agreement within one year, but cautioned against signing a deal at any cost.

“Critically, any free trade

agreement with China – like those in negotiations with Japan and Korea – must take a holistic view of Australian agriculture and not leave key agricultural commodities out,” Mr Fraser said.

“China is already a major trading partner for Australia – our second biggest agricultural market - and there are major opportunities for our farmers in finalising a deal, provided it provides positive outcomes for our dairy, red meat, pork, rice, grains and sugar industries.

“We have been waiting eight long years for the finalisation of the agreement – and while we can understand the Government’s interest in getting the deal done, it is important that in doing so, we agree on the best possible outcome for Australian farmers.”

Mr Fraser said it was inevitable that discussions around an Australian-China free trade agreement

would touch on the issue of foreign investment.

“Foreign investment is likely to become a bargaining chip in the finalisation of the free trade agreement,” Mr Fraser said.

“Foreign investment has been, and will continue to be, very positive for Australian agriculture – provided it is in the national interest, is done in a way that is open and transparent, and creates opportunities for our domestic sector.

“If this can be achieved, and a mutually beneficially agreement reached on the free trade agreement with China, then Australian farmers stand to gain.”

China overtook Japan as the greatest destination for Australian dairy exports last financial year and this is projected to grow further as the Chinese domestic supply decreases.

Dairy News AUSTRALIA October 2013

4 // news: wcb takeover

The Warrnambool Cheese and Butter Factory is now officially for sale, with Canadian firm Saputo in the box seat.

WCB endorses Canadian takeover Warrnambool Cheese and Butter has supported a $390 million takeover offer from Canadian processor Saputo just weeks after it rejected a bid worth $320 million from Bega Cheese.

In a shock revelation, the two parties made a joint announcement on October 8.

WCB managing director, David Lord, said the company recommended all shareholders accept Saputo’s offer of $7 a share, in the absence of a superior proposal.

“Saputo’s offer underscores the strategic value of WCB’s assets and vindicates the board’s decision to reject

Bega’s inadequate, highly conditional offer,” Mr Lord said.

“Saputo’s all cash offer provides greater certainty for WCB shareholders and a substantial premium for their WCB shares.”

Saputo is one of the top 10 dairy processors in the world.

It is the largest dairy company in Canada, the third largest in Argentina and one of the three biggest cheese manufacturers in the US. It exports products to 40 countries around the world and has sales of C$8.6 billion.

Saputo’s offer is subject to approval

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came to this country and by the Foreign Investment invested heavily in the Review Board and condidairy industry and grew tional on Saputo gaining at it for the benefit of all the least 50.1% of WCB shares. current participants,” Mr An application was Lord said. lodged with the investment “I think suppliers review board about Septemshould be excited about ber 10 but Saputo had not this transaction and its received any feedback.

David Lord potential.

Mr Lord said foreign “Saputo are planning to investment in the Australian dairy industry in the past 50 years had invest in this business. If we increase provided the foundations for today’s capacity and capability we need milk supply to support that. industry.

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“It understands the importance of relationships with suppliers and they understand raw milk is the lifeblood of the organisation.”

Saputo has made a commitment to retain the corporate identity of WCB and its management.

Investors reacted quickly to the Saputo offer, with WCB shares lifting to a high of $7.29 before closing at $7.18, up from Monday’s close at $6.46.

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news: WCB TAKEOVER // 5

Saputo CEO outlines WCB vision Saputo chief executive and vice- continue to foster mutually beneficial relachairman, Lino Saputo Jnr, said his com- tionships with farmers.

“I believe dairy farmers will benefit pany’s decision to invest in the Australian market through Warrnambool has been from our commitment to them and our preparedness to invest for growth and more than 10 years in the making.

“We have been looking at the Australian increase the demand for milk.

“We have committed to paying leadmarket since 2002/03. Our first interaction with Warrnambool was 10 years ago,” Mr ing, competitive prices. We want to ensure Warrnambool remains the Saputo told a press conferbuyer of choice and continence following the shock ues to grow milk intake.” move.

Mr Saputo said inno“We are not hostile vative, value-added prodtype people – we can only ucts were among the keys to be buyers if there is a seller.

Saputo’s success in its exist“We’ve always been ing global markets. extremely patient, we’ve “There are two ways you never lost hope, and I think can fight the battle – one it’s starting to pay off now.” is on price, the other one is Saputo plans to grow Lino Saputo Jnr on innovation. We prefer to WCB’s domestic presence as well as using it to expand its operations choose the innovation side,” he said.

Saputo started as a family-run business into Asia.

Saputo has a sales office in China, sell- with one facility in the Canadian province ing product out of Argentina into Asian of Quebec.

“We quickly expanded our presence markets including China, Japan, Taiwan, across the Canadian market and into the and Korea.

The WCB name and brands will be US through other acquisitions, and then of course eventually into Argentina in 2003. retained.

“We went from Canadian $485 million “Saputo’s approach to acquisitions is to make the necessary capital investments in sales to current run rate of about C$8.6 and devote the necessary resources to billion.

“The way we look at the world is that increase manufacturing capacity, grow the milk intake, drive ongoing improvements there are those markets that are dairy proin operating efficiencies and support inno- ducing markets and those markets that are vation and new product development,” Mr dairy consuming markets.

“Not every country in the world is a Saputo said.

“We do not intend to rationalise or rede- dairy producing country so we need to look ploy any of Warrnambool’s fixed assets. In for those platforms where we’re able to fact, Saputo would be looking to invest fur- acquire milk, process that milk into valuether to expand Warrnambool’s operations added products and sell into the market.

“We believe Australia has the ideal by increasing existing capacity or building platform for us getting product into those additional capacity.”

Mr Saputo said the company would emerging markets.”

Bega won’t admit defeat Bega Cheese executive chairman Barry Irvin has not conceded defeat in his pursuit of Warrnambool Cheese and Butter.

Bega announced on September 12 that it intended to make an unsolicited and conditional takeover bid for all WCB shares at the price of 1.2 Bega shares plus $2 cash for every WCB share.

The WCB Board advised shareholders not to accept the offer, saying it did not reflect fair value for its shares. Canadian dairy company Saputo announced its offer on October 8, which WCB advised its shareholders to accept.

The Saputo offer, of $7 cash for each WCB share, is contingent on 50.1% of shareholder acceptance.

Bega currently owns 18% of WCB shares. Murray Goulburn, which revealed in 2010 an unsuccessful takeover bid of WCB, holds 16%.

Mr Irvin told ABC radio that his company’s original offer would remain the same.

“We have an offer on the table that we still think is very compelling,” Mr Irvin said.

Mr Irvin said it represents good value to WCB shareholders, but would also see a very strong Australian-owned dairy company, created through the combination of WCB, Bega and Tatura Milk Industries, of which Bega fully merged with in 2011.

“We think the best thing for the Australian dairy industry is consolidation,” Mr Irvin said.

“The core of the pitch is we think bringing businesses together in our view will extract greater value out of the market place, have the size and scale to allow investment in efficiencies and process improvement, and result in better value created in the supply chain, which will find itself in the hands of dairy farmers as suppliers and shareholders.”

Barry Irvin

Mr Irvin said he was disappointed with the reaction from the WCB board. “We continue to believe our offer is meritorious. We’re interested in the WCB comments, but at the end of the day we also recognise and respect the fact this is a decision for WCB shareholders.”

Mr Irvin said he did not know of Saputo’s interest.

“When you do anything publicly and there are assets available, you should expect you won’t get it all your own way,” he said.

“We didn’t expect it wold be an easy or smooth path but on the other hand, things that are worthwhile often aren’t.

“Our offer represents a very good thing for the Australian dairy industry and we will continue to pursue that argument.”

Mr Irvin said information on the Bega bid was sent to all WCB share-

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“There’s a little water to flow under the bridge yet, as is always the case in these types of processes,” he said.

Murray Goulburn released a statement shortly after the announcement saying it would take time to consider its options.

Fonterra chairman John Wilson said Fonterra will be watching with interest Saputo’s entry into the Australian market.

Mr Wilson says Fonterra remains committed to the Australian market but hinted that it may have missed a beat in its Australian strategy.

He says Fonterra has performed well in Australia but was a bit slow to respond to a changing market.

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6 // news

NSW farmers want to expand A survey of NSW dairy farmers found that 60% of respondents want to grow their herd by at least 5% in the next five years.

The survey, run by NSW dairy lobby, Dairy Connect, revealed of those that want to grow, 15% want to grow their herd by 25% or more over the

next five years. About 25% indicated they would stay the same size, while 13% of respondents said they would look to exit the industry.

The main issues concerning farmers were milk price and cost of production.

Dairy Connect CEO,

Mike Logan, said respondents wanted the new representative body to concentrate on supermarket power and the ACCC, cost of production and manufacturing capacity.

“We are certainly concluding that since deregulation, the reduction in manufacturing capacity in

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NSW has become a major issue,” Mr Logan said.

“Our production capacity is limited by the retail market for fresh milk. As (Dairy Connect member) Paul Weir says, ‘we have gone from regulation by government to regulation by the supermarkets’.”

Mr Logan said the current situation was difficult for farmers, as there are few places to sell seasonal milk – especially the further north you go – while it costs more to produce daily fresh milk than sea-

sonal milk.

“We don’t have a strong market for seasonal milk without shipping it to Victoria,” he said.

Mr Logan said NSW farmers needed to develop new markets for fresh and manufactured NSW milk.

“We have been hoping to use and develop the Milk Marketing (NSW) funds to do that professionally,” he said.

He said NSW farmers needed to adapt farming systems to supply both the fresh and manufactured

milk markets, and Dairy Connect is working with Dairy Australia on a Northern Industry Plan to consider this.

Dairy Connect has also been active in China recently, as part of its focus to export fresh dairy products into Asian markets to achieve higher returns.

Dairy Connect’s Adrian Drury recently told ABC radio that an increase in processing companies seeking milk from Hunter farmers and a higher demand for Australian

milk in the dairy export market have led to farmers expecting a rise in gate prices.

“Farmers should be expecting a lot higher returns for the coming 12 months, basically because there’s more demand for milk at the moment,” he said.

“So they should be seeing returns certainly over the 60 cent a litre mark, but certainly it’d be higher than what they’ve received in the last couple of years.”

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After an exceptionally wet start to the year there has only been one worthwhile rain event since July on Paul Weir’s northern NSW farm.

Mr Weir farms at Tuncester, near Lismore, and supplies milk to Lion through DFMC. “There is very little spring forage and summer crops are now at risk,” Mr Weir said.

“Unfortunately the weather forecasts don’t look good so production prospects going into next year are pretty bleak.”

Mr Weir said grain and hay prices were “sky high” while the energy costs of irrigation were “crippling”.

Mr Weir, who is involved with the NSW lobby group, Dairy Connect, said the past 12 months have been the toughest experienced in 20 years of dairying.

“There is no prospect of an improvement in prices despite a building shortage of milk.

“In the past we had some room to negotiate, but now sadly there is a real disconnect between supply and demand.

“The supermarkets rule the liquid

Paul Weir

milk price and there is no political will to do anything about it.

“We’ve been very vocal in canvassing support for a mandatory code of conduct for supermarkets, but political will seems to have evaporated.

“It’s very hard to get any action

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through the Trade Practices Act and the ACCC when there is no government support.

“Our politicians are all aware of the gravity of the situation, but are sitting on their hands. It looks like it is going to take a massive shortage of milk before we get any action.”

Dairy NewS AUSTRALIA october 2013

news // 7

Fonterra ‘took a lot of pain’ pam tipa

SORTING THE size of Fonterra’s Aus-

tralian business is coming to an end and “we are finding out feet”, says Fonterra chief executive Theo Spierings.

“We are taking $49m costs out – we took a lot of pain,” he said.

“You have to make sure your value chain is efficient or you don’t get a ticket

to the game. What we did last year was earn our ticket to the game.”

Fonterra now focuses on four brands instead of 21 and is committed to nutritional and food service, in which they reduced costs and took out the complexity.

“I come from the European environment where the pressure in this retail scene we are used to seeing for the last 20 years and I am telling our people it is

Genetics Australia sells retail arm Genetics Australia says a merger with the

Herd Improvement Cooperative (HICO) has not been ruled out, despite the sale of assets between the two parties.

GA has contracted to sell its Gippsland retail and services business operating from the Warragul, Leongatha and Maffra locations, to HICO. It has also agreed to sell its Western Victoria retail and services business operating from the Warrnambool, Terang and Timboon premises to National Herd Development.

Both sales will be completed by the end of this month.

Both businesses have been sold as going concerns for an undisclosed amount. All present employees will be offered continued employment by the respective purchasers – HICO and NHD. GA first announced it would explore a merger with HICO in December, saying a merger would strengthen and consolidate the herd improvement industry into the future and was vital to the successful future of GA. A Heads of Agreement document was signed by the two chairmen on behalf of the respective boards, and a merger working group was formed to continue to work through the consolidation process.

A new management team was installed by the GA board in June, with Chris Jones replaced as CEO by Etienne Veldhuis, who had previously acted as an interim chief executive between 2010-2011.

Mr Veldhuis said merger discussions between GA and HICO had not concluded and a Memorandum of Understanding was in place between the two parties.

When asked if there could still be a merger, Mr Veldhuis said the “directors of both companies involved will need to review and discuss the current MOU in due course”.

He said a recent strategy and business review showed GA’s exit from the retail and services businesses will enable the co-op to focus on its core business of the production, importation and the marketing of semen and related merchandise products.

HICO chairman, Stewart McRae, said HICO’s acquisition of the Genetics Australia retail and services business in Gippsland is part of the necessary rationalisation of the herd improvement sector which will allow better use of the resources of the cooperatives in this region.

It will enhance HICO’s strengths and capabilities towards delivering a sustainable and comprehensive product and service offering to all farmers in the future, he said.

National Herd Development chairman, Gary Wight, said by acquiring these assets NHD will reduce freight costs and allow all herd recording being conducted in Western Victoria to be analysed in Western Victoria, a better use of farmers’ assets.

NHD is planning to introduce a range of new services to the Western Victoria region in due course.

not going to get easier.

“This pressure will remain.”

Fonterra is recruiting at least 100 people a month in China to keep up with growth, Mr Spierings said.

The need for sales and marketing people in China and South East Asia is growing fast, he said at the release of Fonterra’s annual results.

Fonterra is very busy there: launching Anchor UHT milk, expanding its

food service and Anlene product into 70 cities, launching its Anmum infant formula and starting its second hub of China farms.

“We are building the organisation.

We talk about 100 people a month; that’s what we need to do right now.

“We need to make sure we are well connected with the government, government to government and business to government.”

This is part of an overall strategy to “shift the wheel” from commodities into higher value propositions.

After years of 2-3% growth in Asia, Africa and the Middle East, volume growth reached 11% in the 2012/13 financial year. And Latin America had gone from annual 2-3% volume growth to 6%.

“We are growing faster than market in those geographies and that means gaining market share.”

Dairy News AUSTRALIA October 2013

8 // news

in brief

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Since its inception in 1990, IDW has been held in Tatura, Victoria, becoming Australia’s largest dairy event, while the RASV’s Royal Melbourne Dairy Show is the state’s traditional premier springtime competition.

IDW and RASV said they will explore further event opportunities to advance the interests of the dairy industry.

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Fonterra invests in Stanhope site Fonterra will invest $6 million at its Stanhope site in northern Victoria to transition the manufacture of ricotta cheese to the site.

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Farmers line Japanese pockets Dairy farmers paid $204m in import tariffs to overseas governments last year.

Dairy Australia analysis shows more than $116m in tariff payments was paid to the Japanese Government, $27m to South Korea and $17.7m to China.

The United Dairyfarmers of Victoria said former Prime Minister Kevin Rudd repeatedly promised a free trade agreement with China but never delivered.

Prime Minister Abbott must prioritise FTAs, it said.

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news // 9

Coles marketing campaign dripping with cynicism Australian Dairy Farmers has

condemned views contained in a Coles branded communications document that featured on television station SBS late last month.

The “Reputation Management Case Study” came to light during a broadranging interview with Coles’ chief executive, Ian McLeod.

“To say this document is dripping with cynicism would be a major understatement,” ADF president, Noel Campbell, said.

Sentiments expressed in the case study included ‘we use every PR tactic possible to neutralise the noise’, ‘there

was the inevitable farmer protest’, their families and the dairy industry as ‘grandstanding agri-politicians’ and ‘noise’ was “a massive and unconscionable insult”. ‘rural and regional noise was loudest’.

“That ‘noise’ is the sound of generaMr Campbell said he was particularly disappointed Coles would allow tions of dairy farming experience being its brand name to be associated with such views at a “To say this document is time when dairy farmers, dripping with cynicism would supplying from regions be a major understatement.” influenced by domestic price issues, are severely affected by forced off the land due to Coles’ marketing tactics,” Mr Tessmann said. current farmgate milk prices.

“Here’s an idea for Coles. Instead of Queensland Dairyfarmers’ Organisation president, Brian Tessmann, said for mounting massive PR and advertising Coles to describe dairy farmers raising campaigns worth millions of dollars and concerns about the impacts to them and talking about ‘noise’, Coles could price

MG milk intake up, farmgate prices down Murray Goulburn increased its milk intake by 2% to 2.99 billion litres and paid a final weightedaverage farmgate milk price of $4.97 per kilogram of milk solids in 2012/13.

The co-op released the figures last month and announced a net profit after tax of $34.9 million and full year dividend of 8% on ordinary shares for 2012/13.

A dividend of 8% has been declared, representing payments of $21 million. On average, this equates to 9ckg/MS, the co-op said.

MG managing director, Gary Helou, said the rise of 2% in milk intake was in contrast to total Australian milk production which fell by 3%.

The final weighted-average farmgate milk price of $4.97kg/MS was 9% lower than the previous year.

Mr Helou said this reflected a challenging year characterised by low average export commodity prices and a high Australian dollar for most of the financial year.

Despite lower ingredients prices and a high Australian dollar, MG sales revenue grew by 1%, demonstrating improved sales in value-added products, he said.

“MG delivered a solid performance in 2012/13 despite tough seasonal conditions, lower dairy ingredients prices and a high Australian dollar – all factors which were beyond our control.”

its milk sustainably and work positively toward seeing farmers receive a fair and sustainable price for their milk at farm gate.”

Mr Tessmann said it was a credit to small organisation like the QDO and others that Coles felt it necessary to combat the industry with huge PR campaigns, as QDO continues to raise awareness for farmers to the media, consumers and politicians.

Mr Campbell said consumers, farmers and processers are all paying for Coles’ significant increase in profit, from $470 million in 2008 to over $1.5 billion in 2013.

“Only last week, a supplier of home brand yoghurt to Coles, Tamar Valley Dairy in Tasmania, collapsed with media reports citing pressure on margins as well as a slowdown in sales as key reasons for the business’s failure,” he said.

“And then along comes a document like this, with Coles’ name stamped all over it, which only adds insult to injury for many dairy farmers.”

Both the QDO and ADF will continue to press the case for a Mandatory Supermarket Code of Conduct as well as changes to the Competition and Consumer Act with the new Federal Government.

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Dairy News AUSTRALIA October 2013

10 // news

More farmers on DA board: Review The

recently completed independent review of Dairy Australia’s constitution received 45 submissions from across the dairy industry.

Some of these submissions were from industry stakeholder organisations which had sought and obtained input from their members.

The Review Panel, chaired by former Australian Dairy Farmers president Allan Burgess, made recommendations in relation to the constitution and a range of suggestions regarding operational changes.

Key suggestions recommended by the panel include: ■■ The Dairy Australia (DA) board should have a minimum of four dairy farmer members.

■■ An introduction of maximum terms for directors.

■■ Better communication between DA and its farmer and farm organisation members.

■■ More feedback and input from

farmers and farm organisation members in developing DA’s strategic and operational plans.

■■ The removal of the ability of any industry organisation to seek Group B membership (such as the South Australian Farmers Federation attempted to at the last AGM).

■■ A separate review be conducted on the levy poll process.

DA members will have the opportunity to vote on proposed changes to the constitution at the annual general meeting on November 29.

Any amendments would need to be approved by a 75% majority vote and then be approved by the Federal Minister for Agriculture.

In the report, Mr Burgess said it was clear from the review that dairy farmers wanted the governance of DA to be more transparent, and want more information regarding corporate governance processes so they can play a more informed role.

Dairy farmers want to engage more with DA, feel closer to their service organisation and feel like they are making a contribution to outcomes.

“I think they feel they can make it even better if they are more engaged,” Mr Burgess said.

A common theme overall from submissions was the important role DA plays, and while some may appear to be less supportive, they all felt the industry was better for having the support and assistance provided by DA. Outgoing Dairy Australia chairman, Max Roberts, said the report identified some issues that require further discussion with industry, including the levy poll.

There will be an announcement regarding this process at the forthcoming Dairy Australia annual general meeting.

Mr Roberts said “any constitutional change involves complexity”.

Government must act on foreign investment register The National Farmers Federation

has called for a foreign investment register as well as policy solutions to ensure Australian agriculture can continue to benefit from foreign investment.

The Coalition proposed the development of a register in August 2012.

NFF president, Duncan Fraser, said now the Coalition is in Government, the NFF hoped to see this created as a matter of urgency.

Mr Fraser said the issue of foreign investment was very complex but such investment had traditionally been very positive for Australian agriculture and should continue to play an important role.

“We have been very pleased to hear the Minister for Agriculture, Barnaby Joyce’s, comments over recent days supporting foreign investment – particularly the sale of two properties in the top end to an Indonesian company, after speaking to the Northern Territory cattle industry,” Mr Fraser said.

“This shows that the Minister is lis-

tening and taking the views of farmers on board.

“It is imperative that foreign investment is not deterred, but at the same time, greater transparency is needed to ensure the motivations behind it are clear.

“This is not new; we have been saying this for as long as this debate has raged, which is now well over two years.

“That is why the NFF continues to call for the introduction of a foreign investment register that makes it compulsory for all foreign persons or organisations that acquire or transfer an interest in agricultural land, water or agribusinesses to report the sale.”

Mr Duncan said a register would provide clarity on the level of foreign investment in agricultural land and provide the ability to monitor trends.

“This register is crucial in understanding the current levels of foreign investment in agriculture, and having a full understanding is critical in getting the policy decision right.”

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Dairy NewS AUSTRALIA october 2013

world news // 11

NZ dairy price boom peter burke

A SENIOR New Zealand market strategist at Westpac predicts the Fonterra payout could go higher than the forecast NZ$8.62 (Aus$7.58).

Imre Speizer told a farmers’ seminar in Taranaki he also expects the kiwi dollar to go as high as 86 cents against the US and 92 cents against the Australian currencies, and that interest rates will rise in the next six months.

He said that Chinese consumers’ demand for milk products could

prompt a higher payout.

People there are buying milk products and that trend will firm up milk prices.

The high payout will have a trickle-down effect on the New Zealand economy, prompting more spending, he predicts. But he also notes dairy farmers are increasingly cautious.

“Farmer borrowers have become a lot more conservative in the years from 2008 onward and are… paying debts rather than spending.

“I think we will see a continuation of that, but maybe some spending as well.”

A question of when; not if

Mr Speizer says any rise in the kiwi dollar against the US dollar is unlikely to affect the dairy industry because the milk price and exchange rate move in harmony up and down, a phenomenon unique to the dairy industry.

“In other words they are both moving with

global cycles. We are in a global upturn now, seeing commodity prices – particularly dairy – rising and the kiwi dollar rising with it. In other words, dairy exporters are insulated.”

But not so with, say, seafood and flowers: they don’t have a global cycle, Mr Speizer said. Sheep and

beef prices do, but not to the same extent as dairy.

“Dairy farmers should be happy long-term with the present system. If we had a fixed exchange rate they’d be better off now, but would have been badly hurt when the milk price dropped.”

Rising interest rates

will chiefly affect residential properties, Mr Speizer said. The high dairy payout will have some buffering effect, but the high interest rates could affect farm prices.

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tributing to Fonterra’s forecast record payout this season will eventually drop, says chief executive Theo Spierings.

“But the question is when,” he said.

Since Mr Spierings made his comments wholemilk powder (WMP) prices climbed 2.3% higher to an average of US$5208 (NZ$6298) in the first Global Dairy Trade auction of the month.

The forecast farmgate milk price of NZ$8.30/kgMS (plus a 32 dividend) is fantastic for farmers and New Zealand, with billions flowing into the economy, Mr Spierings said at the release of Fonterra’s annual results. But it puts pressure on Fonterra’s profit and loss in the meantime.

It is a matter of time before WMP prices come down.

“We don’t know how long this will take,” he said. He has never seen such volatility nor such a big gap between WMP and other milk products.

“But that’s happening right now; we have to deal with volatility,” he says. The long-term strategy is to increase earnings and decrease volatility by driving more milk volume into higher value uses. Fonterra has to move into long-term supply agreements, paediatrics, food service and all the way up to consumers brands. That’s the name of the game, he says. “I am very much focused not on dairy but on nutrition.”

However the wholemilk powder prices are driving up the costs of its food service and consumer brands. In emerging markets Fonterra had overall 11% volume growth last year after years of 2-3% growth. They did not want to stop that momentum. If they passed on the escalating cost of WMP to those markets it would mean a 50-60% price increase for some products. Competition is rising: “Australia is turning the wheel. If you go into emerging markets with a massive price increase way above inflation you are going to see negative volume growth.”

But the prices would not stay there. “I have had 30 years in dairy; I have been a customer for a long time of Fonterra.

If all WMP is the price it is now I would consider, as a customer, going to skimmilk powder – if I were recombining in, say, Saudi Arabia or South East Asia.

“So people have choices – in the end milk is water, lactose, protein, fat – and you can make choices. People will start using different combinations, different specifications for their products. So the high WMP price is not here to stay, but we are quite surprised it is staying here for so long.”

Dairy News AUSTRALIA October 2013

12 // world news

From Argentina to the world Gordon Collie

The globalisation

of the dairy industry is epitomised by Argentinian farmer and industrialist Federico Boglione.

Since taking a mothballed milk powder plant off Nestle’s hands in 2002, the family enterprise La Sibila has transformed itself into a significant international dairy player.

Mr Boglione travels the

world seeking the latest processing and packaging technology and has opened markets for a wide range of specialist powder products in more than 50 countries from Angola to Zambia.

The family had been big players in soybean processing for generations, and when that business was sold in the late 1990s, Mr Boglione turned his focus to milk processing to complement their expand-

ing dairy farming interests.

The Nestle plant at Nogoya, in the central Argentine dairying heartland, was processing 500,000 litres of milk a day when it closed in 1998.

It has since been completely rebuilt and is now the most modern factory in Argentina with four processing lines using 1.2 million litres of milk a day. A new $10 million powder packaging extension is about to be

L A I C E SP T R O P E R

commissioned.

Another small Nestle plant 375km away at Villa Neuva was acquired in 2009, giving the company a total milk intake approaching 1.5 million litres daily.

Mr Boglione said it quickly became apparent that there was no future competing in world commodity powder markets dominated by big players such as New Zealand.

“We had to build direct marketing relationships with customers and supply them with the finished products they wanted,” he said.

“To guarantee our high quality we have embraced the latest technology from all over the world from Spain, Denmark, France, Australia and New Zealand.”

La Sibila chairman Federico Boglione.

The company manufactures a range of specialty milk powders for food, industrial and pharmaceutical end users including products which are vitamin enhanced, and fat filled with vegetable oils.

A move into baby formulas has taken quality control standards to a demanding new level.

Milk powder products are packaged in everything

from one tonne bulk bags for industrial customers down to 5gram sachets of coffee whitener.

In a diversification move, La Sibila has struck a licencing agreement with New Zealand company Frucor Beverages to manufacture the popular V energy drink for the South American market.

Mr Boglione said his family had a long tradition in dairy farming and he suspects Nestle may have underestimated his business acumen and ability to transform disused processing facilities, making La Sibila a formidable competitor.

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Argentinian farmer Federico Boglione’s La Sibila is now a significant international dairy player.

La Sibila has expanded its dairy herds on two properties the in the central region. With 5500 cows now producing 180,000 litres of milk a day, the family is the second biggest dairy farmer in Argentina.

The company also draws supply from a network of 220 farmers milking around 60,000 cows in the surrounding region up to 350km from the Nogoya factory.

Because much of their business is in direct consumer products, Mr Boglione said the company had a year-round milk intake and encouraged a flat production with no more than 20% variation between seasonal peaks and troughs.

Exports now account for about 60% of La Sibila production with Purisima the flagship brand.

The family also have extensive beef and cropping interests with another two properties near Buenos Aires giving them a total landholding of 40,000ha. They carry almost 20,000 beef cattle and pioneered the growing of canola in Argentina.

Mr Boglione said the company was constantly looking to develop its milk powder-based range as it sought to build exports to 70% of production.

He said the company had learned to be adaptive and to move quickly to take advantage of market opportunities and also to cope with Argentina’s interventionist political regime.

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Dairy News AUSTRALIA October 2013

14 // OPINION Ruminating

EDITORIAL

Make foreign investment decisions on facts

milking it...

Joyce wins thumbs up

Not a lot of support out there for John Cobb, the opposition spokesman for agriculture, who was not granted the portfolio when the Coalition was elected to office.

The position went to Barnaby Joyce but senior members of dairy and other agricultural lobby groups have said they were not impressed with Mr Cobb in opposition.

One was scathing of his performance at a Farmer Power meeting in Warrnambool in March (to be fair, he did seem badly advised and inadequately prepared), while others said he was a less than inspiring face of the agricultural movement.

Well, if it’s an animated approach they want, they have that in Mr Joyce. We know many journalists that are thrilled with the appointment.

Disregard those comments

It seems Mr Joyce forgot to read Prime Minister Abbott’s handbook on conducting about-turns once in power.

The PM’s first international visits have included grovelling apologies to Indonesia and Malaysia for what was said in Opposition regarding asylum seekers in his bid to get elected.

Less than a week after the election, Mr Joyce called on Australians “to make a big noise” to help him convince the new Abbott government to reject a plan by the Indonesian government to buy 1m hectares of Australian farmland to breed beef for the Indonesian market.

However, Mr Joyce had a change of mind early this month, saying he was happy to discuss any proposals that would take pressure off farming families in the north.

“We’ve talked about joint venture arrangements with the Indonesians, which are a good idea,” he said.

Welcome to Government, Barnaby.

Pigs might fly

Watching you

Farmers have long opined about the growing rural/ urban gap and concerns about how this has set country against town.

Seems it’s a universal problem, with a survey in the UK by the RSPCA’s Freedom Food scheme, has revealed the startling ignorance of the basics of food and farming – including which farm animals fly and which ones walk.

Many respondents believed you could obtain pigs wings.

Although 72% of the 1000 people questioned said they visited a real working farm with animals, one in 10 had no idea where their food comes from.

Advertising Chris Dingle chris@dairynewsaustralia.com.au

While in the UK, a farm in Essex has started connecting its cows to the internet to monitor changes in behaviour that could signal disease.

The team behind the Cow Tracking Project attach a GPS device to each cow, and place sensors around their shed to monitor their movements and sleeping habits.

That information is then sent to the farmer’s computer.

Disruptions in a cow’s regular pattern – whether sleeping more or moving around less than usual – could signal illness, so daily updates can help the farmer quickly catch these changes.

What’s more, the project can save farmers from having to put in extra labour and spending money on antibiotics after infections have fully developed.

We are just waiting for an animal rights group to protest, as this probably impinges on the cows’ civil liberties.

0417.735.001

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

Head Office Top Floor, 29 Northcroft Street, Auckland 0622, New Zealand

Phone +64.9.307 0399 Fax +64.9.307 0122

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

Publisher Brian Hight Production D ave Ferguson Becky Williams Sub Editor Pamela Tipa

Dairy News Australia is published by RNG Publishing Limited. All editorial copy and

There are two views on Canadian dairy company Saputo’s bid to buy Warrnambool Cheese and Butter (WCB).

The first, backed by the WCB board, is that the foreign capital will improve processing capability, export markets and create further demand for local milk.

The second is that Australia is selling its assets to international raiders – again.

The decision on whether Saputo will be allowed to proceed with its takeover will come down, in large part, to the decision of the Foreign Investment Review Board.

National papers were quick to flag the decision as “a test” for the new Abbott Government.

We hope the decision is made on its merits and not rhetoric and political point-scoring. It is too important to be used as a political football and the fodder of pollsters.

Bega Cheese chairman Barry Irvin, with its own bid to buy WCB, used that language when asked to respond to the Saputo news.

Irvin said his company’s original offer to WCB shareholders will remain the same in hope of keeping the dairy company in Australian hands.

Irvin said Bega Cheese’s offer, now valued at $350 million dollars, still has the potential to consolidate an internationally competitive Australian dairy company, despite falling $40 million short of the Canadian bid.

Irvin may well be a champion for Australian made industry, but he’s also an astute businessman and a champion of Bega Cheese.

His financial incentive to WCB shareholders is a clear second to Saputo’s, so he made the tactic to appeal to the “national” interest.

Will our politicians do the same?

There must be sensible policy outcomes in the debate on foreign investment. The current debate should be focused on finding policy solutions that ensure Australian agriculture can continue to benefit from foreign investment, while also ensuring the concerns of Australian farmers, and the community, are addressed.

Agriculture Minister Barnaby Joyce railed against Indonesia investment in northern beef farms less than a week after the new Government won the election.

He has since toned down his approach – saying foreign companies can aid beef producers wanting to exit the industry. We have held the same view in Australian dairy, where farmers want to exit the industry but cannot find willing buyers for their farms.

Foreign investment should not be deterred, but it should be monitored. Good deals, that benefit Australia through the injection of capital, should be approved.

It shouldn’t be subjected to scare campaigns and the need for political approval.

Published by RNG Publishing Ltd Printed by PMP Print

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

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Dairy NewS AUSTRALIA october 2013

opinion // 15

Long-term focus is crucial INDUSTRY leadership must

start thinking beyond the current paradigm of issues management and short term distractions.

The big questions around the future of the Victorian dairy industry aren’t going to be solved by debating $1 per litre opinion retail milk or any form of tyran jones reregulation.

Our Legendairy farming skills and campaign by Dairy business management Australia tells us: ■■ Australian dairy is capability.

They make good worth $13 billion, strategic and operational a major farm, decisions most of the manufacturing and time, and can always export industry.

■■ Nationally, about point to things they could 6,700 farms produce a have done better. They bit over 9 billion litres. look to themselves to fix ■■ We employ 43,000 things or do things better people on farms and in when plans go awry.

The Federal factories.

■■ We support tens of government currently spends $1.6 billion per thousands of other annum on primary small businesses industries R&D. and provide the life Our competitors are blood for many rural focused, have favourable communities.

■■ With the right trade agreements, have a lower cost of production policy settings and provide us with real and initiatives, competition in the global potential for industry market. They value the profitability and R&D&E investment and subsequent growth is have research farms significant. which are pushing the The dairy industry biophysical limits of in Victoria is alive, dairy production. prosperous and has If the Victorian dairy a bright future. If we industry is to step up want the community to to the plate invest in our and meet industry in the rhetoric preference to “We need of the some other to stop politicians industries, we need to stop exaggerating and our own industry exaggerating the negative promotion the negative stories in terms of stories and and start increased start telling telling the production, the truth there are a about the real truth about number of long term the real things which viability. long term must happen: Dairy 1. We farmers will viability.” need to start make profits focusing regardless on the real issues of of seasonal and market variability. Dairy farmers meaning and protect and increase our R&D will continue to invest resources. heavily in their future.

2. Politicians must Despite challenging be educated about times over the last few the realities of what is years, I know farmers required if we are to who have collectively achieve increased food invested millions of production - they must dollars securing their work with us to increase place in the future of the the R&D spend in the Victorian dairy industry.

They are not lucky - they right areas (both pre and are smart and continually post farm gate).

3. We must hold invest in their own

our export dairy manufacturers to account to increase the value of our manufactured products.

Increased farm-gate production will come from one thing and one thing alone: Increased farm profitability.

4. More farmers must get involved and support all our industry structures including: ■■ Dairy Australia’s broad range of programs and research activities; from RDP boards to research project steering groups to the

■■

■■

DA Board.

United Dairyfarmers of Victoria; from branches to policy council; feeding people in to ADF and DA groups.

Australian Dairy Farmers; from policy advisory groups to

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Dairy News AUSTRALIA October 2013

16 // agribusiness

Farmers turn stephen cooke

You could be forgiven for thinking the former Heinz factory in Girgarre lays idle if you were driving past, but inside a quiet revolution is taking place.

Tatura dairy farmer Ian Bertram has expanded a recycling process that began on-farm seven years ago and has grown to such an extent that he has purchased the old Heinz fac-

TR MA NE EA ST W TM IT EN IS T

The former Heinz factory at Girgarre, near Shepparton, was bought by Resource Resolution, which turns out-of-specification consumer items into stockfeed.

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tory. The company takes out-of-specification food products from manufacturers that previously would have been sent to landfill and the product is used as stock feed. The packaging is recycled, with potentially greater plans afoot.

The seed of the business was sown in 2006 during the drought that gripped northern Victoria.

Mr Bertram was offered some out-of-specification products from a local canning company containing apricots and with straw selling for $300 a tonne, the decision to trial the products was not a hard one. A contract between the farm and the canning factory was the next step in the development of this ever-growing business.

Mr Bertram and business partner Dale Cole, who was managing the farm at the time, used the products in conjunction with a feed-out wagon to feed cattle during the drought.

Initially, all cans were opened by hand and the contents were emptied into a 44 gallon drum, to be mixed with a bale of hay and a bale of straw in a feed out wagon until machinery was developed to reduce the labour component and better feeding techniques developed. Mr Bertram and Ms Cole researched equipment that would empty the cans in the most efficient manner. This not only enabled them to utilise most of the feed, but prepare the packaging for recycling. “We needed to establish a very clean byproduct at the end of the process to be able to onsell the tin plate,” Ms Cole said. “We spent a lot of time working that out.

“In the early days we feed tested it to get a basis of what protein and fibre we had. We don’t feed test now because the mix of products isn’t consistent and we don’t know what we’re going to get.”

The food is still fed to Mr Bertram’s herd of cows, including 300 milkers, year-round. “We’ve tried a lot of things over the years so we know what works, we have the ability now to look at cows and know if something’s not quite right and deal with it

Who:

Resource Resolution Where:

Girgarre What:

Unconventional stockfeed

then.” Ms Cole said.

“We used to put a bit of lime and bi-carb in to balance it out – depending on what animals we were feeding,” Mr Bertram said his cows get 5000 litres of product a day. “We feed it as liquid in the trough and they drink it like soup.

“You can’t fatten dairy cows on it, but you can fatten young stock and dry cows.”

Ms Cole said the products are complementary and can only be used as a small percentage of their diet.

“Because we feed a liquid and the liquid is high in energy and low in non-digestible fibre you must offer a fibre, if you don’t constantly provide a source of fibre, then it has an adverse affect on the rumen.

“If we give them too much, they gorge themselves, and they won’t eat their fibre or grain and you can make them sick if you’re not careful.”

Ms Cole said the liquid product is ideal for feedout wagons to add moisture to feed, providing an alternative to molasses, which can be expensive, or water, which has no nutritional value.

When Heinz closed its Girgarre site, moving its operation to New Zealand, Ms Cole and Mr Bertram made contact in a bid to purchase the site.

They leased a corner of the warehouse to store their food items while negotiations took place and finally signed off on it 12 months later, by which time they had filled the factory with out-of-specification products. “If the sale didn’t go through there would have been some issues,” Mr Bertram said.

Having a secure site means Resource Resolution receives enquiries

Dairy NewS AUSTRALIA october 2013

agribusiness // 17

potential landfill into stock feed from food manufacturing companies across Australia. Currently they only take food from within Victoria to minimise transport costs.

The products vary from dairy and fruit products through to drinks, biscuits and lollies.

“The manufacturers are trying to take a responsible approach with what they do with this product,” Mr Bertram said.

With the increase in the volumes being received it has allowed the on-selling of product to local farmers for use on their livestock.

With a plan to divert around 100,000t of product within five years, the potential for other farmers to come onboard and utilise the products is creating a growing interest.

The company has not received any government funding in the last

Resource Resolution executive director, Dale Cole, and managing director, Ian Bertram.

eight years despite several applications. They plan to continue developing and growing at the rate

cash flow allows. Heinz employed 146 people when it closed the factory and today the company

employs 11 local people to assist in the processing of the products. The potential increase in volume will

see an increase in employment numbers further helping the community and the environment.

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Dairy News AUSTRALIA October 2013

18 // agribusiness

MarketsExport react to price lift demand remains strong

Dairy NewS aUSTraLia june, 2012

agribusiness // 17

Nearly four months in, most would agree that the 2013/14 season is shaping up as an improvement on 2012/13. This year, winter cropping programs in the Northern Hemisphere have produced significantly better yields and lower prices than the same time last year, and although further rainfall remains critical, the outlook for Australia’s grain crops is also promising.

For those in export-oriented regions particularly, perhaps the most dramatic improvement has been in farmgate prices. Current indications suggest an increase of 15-25% on last year, and the longer the current strength in commodity prices lasts, the greater the potential for further upside.

Although many farmers are still experiencing tight cash flow and are yet to see the full benefits of the higher announced prices,

it is worthwhile considering the implications of current commodity pricing and looking further ahead to assess what might transpire ahead of the 2014/15 season given the business decisions that farmers will face over the next eight months.

Continued strength in pricing is good for farmgate prices in the short term; however demand destruction in more price sensitive markets such as the Middle East, Africa and parts of south-east Asia is of concern. Substitution strategies including buying lower specification or different origin (eg Indian) WMP, use of fat-filled or ‘analogue’ vegetable-based products, or in some cases the import of raw milk for processing from traditionally high cost sources (eg Saudi Arabia) can sometimes lead to a permanent change in sourcing

still actively buying, due to however, fearing that they tions, the likelihood arrangements to the cents/litre in March (AUD 41c/L) to 28 incremental change in milk production (year-on-year) may beincaught with high a local productionEuro shortof another financial detriment of dairy cents/litre (AUD 36c/L) April. weeks from ending, attention is now Profit margins in the when the focused on 2012/13 milk after prices as farmcostpressure product fall claimed variously to beare under crisis would appear suppliers even US, and in NZ Fonterra has announced ers consider strategies for the coming between 6% and 20% relto be low (assuming prices havedomestically-focused eased. the final payout formarket the 2011/12 turns. season US butter year.

In some has been cut from NZ$6.75-$6.85/kg MS regions, renegotiated contracts incorofferings, many subsidised ative to last year.

Sources the US Government On a more posigLobaL impacT to NZ$6.45-$6.55/kg MS (AUD$4.96porating lower prices and reduced ‘tier JohN DropperT by the Cooperatives suggest high beef prices succeeds in raistive note, price falls $5.04). one’ access are undermining farmer Effectively, global dairy markets are confidence and supply stability. For global impact Working Together are currently encouraging ing its debt ceiling) can be cushioned to rebalancing. Lower prices will both private label Droppert contracts and promany farmers in export-oriented Shifts inJohn production growth and stimulate regions, priceas outlook relative to cessor rationalisation have seen milk (CWT) export assistance an increased rateslow of indusand the Australian somea lower extent many demand, and as this occurs we will ultithe current season not only adds to the companies adjust their intake requireprogram, are providing try exits amongst smaller dollar is trading in of these customers mately see a price recovery. Key factors challenges of doing business, but seems ments and pricing to meet the changto watch on the global scene will be the of aThis highly pressured retail to contradict theto positive term ing demands cheaper options for farms, while confirmation a more favourable range. levels. will provide do return themedium market. rate at which milk production overseas outlook of Asia-driven dairy demand marketplace. Lower contract prices and customers who are flexible of a foot-and-mouth disAssuming the absence of welcome relief to buyers, The cyclical nature slows in response to lower prices, the a lack of alternative supply opportunigrowth. impact this of the current financial worries those in south-east Asia(FMD) and the Middle flows. 2012 milk production in the US factors challenges market to withfarmAustralia’s indicative with their requirements, ease outbreak such exacerbating but likely atinaa cost ofDairy dairy markets is outlook ties present 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 and and remain given the continuing prices. largelyindriven supply China’s economic growth, the valuea downside rates highlights that support further year adjusted), whilst early nomic growthweek challenges, the underlying domes- April (leapand published the recentby Dairy 2012: Sit- thesegate consumption. How- of the Australian dollar. uation and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy influence on the market. challenges in sustaining demand strength characThe timing of any responses to prevailDemand 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 theconwhole, production growth. dairy markets, a growthlocal decrease remains ingandfarmgate prices. ucts remains a positive On and will demand in the market. previous year.

New Zealand providing a degree ofuncercer- 2.3% on theterising MS a full year average priceAs range population 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 commodity pricing Such challenges are likely less than dramatic price tain, but for Australian higher commodity returns 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 picwith changes and with increasing kets, with commodity pricesthe retreatgiven 95% of NZ milk crisis and subsequent ture and summarises the many farmfactors financial favourable, and to soften effects of in diet remains decrease seems likely. farmers the effectscomof market influence reach the farmgate, 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 with a large increasing global output.

To date, rebounding global supply ers in trade-exposed global population growth.

Locally,proportion some 30% from their with ing solid production growth,expectations but a sig- prices are down regions have seen solid uation being that of re-balancing in the export-oriented the domestic market supported by a prices have hand, nificant supply in Brazil prevents globalare supply growthbe (seefelt chart) dairy supply chain. across the ofis the season’s milk On the other of a gap broad-based cor-2011 peaks, whilst powder likely in- with 2014/15 dairy regions 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 perproduction already sold, SMP prices have already rection have been conseason pricing, although it world are incentivised have subsequently been reduced in capita consumption. Whilst the dairy producing drinking milk, many farmers ern Hemisphere amongst those expand- ing South America. marketin is currently 2013/14 a challenging placebe a good regions.

The average wider economic unceras their margins face a re-balancingproduction market in the form ing output will under pressure despite the most exportingbeen is reassuring toincreased. rememberDespitefounded to increase of renegotiation of supply contracts This season, favourable weather con- tainty, demand has remained resilient basic farm gate price for milk in France to be a seller, all signs indicate that balrecent largely rapidly strengthening that the more – including ance will ultimatelyyear return.for farmgate returns.

12% weeks, from 32 Euro as importing countries like China and for example, dropped havesome furtherof enhanced milk draand reduced accessAustralia’s to ‘tier one’ supply. ditions While the long term due to competition from global supply outlook, as matic price falls in recent key competitors in New outlook for dairy is bright, firm demand supports for- Northern Hemisphere years have been the result Zealand, Europe and the the economics of the ward pricing of some com- exporters, while in of more than simply a United States. current global production the case of other modities – particularly The current situation is commodity price correcresponse are worth some commodities, pricing is WMP – at high levels well tion.

For example, while no different, and if favouraustraLian DairY, ASEAN-Australia-New Zealand FTA (AANZFTA). rice andweather wine exporters to lower attention when budgeting broadly steady as long the GFC-induced freeze in into Q1 of 2014. able and “Protectionist sentiMalaysia are the biggest for 2014/15. as supplies remain tight.

Most markets are very trade credit, and the high feed costs continue, the ment over agricultural winners in a free trade agreement (FTA) • John Droppert is indusBuyers are reluctant to difficult to sell into at Australian dollar ampliincrease in signed supply goods will is rife and growing across the globe, so to provide portion pack between the two counaustraLian FooD try analyst commit to deliveries prices over US$5,000/t fied the financial pain of eventually bring prices in this context it is pleas(200-330ml) configura- with Dairy Austries last month. company Freedom Foods ing Australia has managed tion for beverage prodThe deal, signed after Group Ltd is to build a tralia. too far into the future however the Chinese are previous price correcback from their current to forge an agreement seven years of negotianew milk processing plant ucts.

With season 2011/12 only a few

Malaysia FTA benefits dairy Freedom

Foods plant targets Asia

tions, allows a liberalised licensing arrangement for Australian liquid milk exporters and allows access for higher value retail products.

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

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

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

The FTA will fill a number of gaps within the

with Malaysia that has dealt with some sensitive agricultural issues not effectively covered by AANZFTA,” says Fraser.

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

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

to cash in on growing demand in Asia.

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

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

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

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

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

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

Pactum makes UHT products for private label and proprietary customers.

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

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

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

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

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

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

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

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

The FTA was signed on May 22 in Kuala Lumpur

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

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

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

016-017.indd 17

1938

www.gallagher.com.au

6/06/12 1:41 PM

1982

2012

Dairy NewS AUSTRALIA october 2013

management // 19

Preparing for summer crops Rachael Campbell

You should already be thinking

about what summer crops (if any) you plan to sow this year. As a first step ask yourself why you are considering summer crops. It could be because you need to renovate particular paddock/s or you are trying to fill a summer feed gap.

Summer crops can provide your herd with high quality feed over the summer period and an opportunity to use more home grown feed rather than potentially expensive purchased feed.

Although summer crops are generally high in energy and protein, they are low in fibre, so careful consideration needs to be taken to balance the diet.

Consider whether you would like just one grazing from the crop or multiple grazings.

This will determine what type of crops you should be considering. Also if you are concerned about insect damage to brassica crops, crops such as millet or forage sorghum may be an option. Again assessing whether these will fit into your feed plan is extremely important.

Work out when your herd will

require the feed and work back from there to determine when to sow.

With many hay sheds bare and silage reserves depleted, it is also important to consider your spring harvest. Most of the time, you won’t be able to have your cake and eat it too. Therefore you need to think carefully about what is most important to your farm.

We can’t control the weather, but if you do everything in your power to produce a good summer crop you are more likely to succeed and fill the summer gaps.

Points to consider include: ■■ Soil test early - it is important to know the fertility of the paddock/s you intend to sow, so a soil test prior to sowing is recommended.

This will show any deficiencies that require attention.

■■ Spray out paddocks about three weeks before sowing.

■■ Following spraying, graze to reduce trash that the crop will be sown into, ensuring you follow the recommendations of the herbicide you used.

■■ If sowing a millet/forage sorghum crop, the soil temperature needs to be 16-18°C and rising.

and will be until the cows come home.

■■

■■

■■

Some important tips when applying effluent: ■■ Test before application, as nutrient levels vary from pond to pond and year to year.

■■ Using effluent to germinate summer crops is not recommended as it often has high salt levels, which can burn emerging seedlings.

■■ Ideally, the effluent application rate should be based on its nitrogen content and the crop requirements.

■■ If you have sown a single graze crop (such as turnips) then apply the entire effluent application in one go. If you planted a regrowth crop then split the application.

■■ For turnips, effluent application is recommended about 6-8 weeks after sowing when the plants are in their rapid growth phase.

■■ For regrowth crops, apply half the effluent about 3-4 weeks before the first grazing and the remaining immediately following this grazing.

■■ Effluent contains nitrogen, so care should be taken to avoid nitrate

Boosting growth with effluent Rainfall over summer can be unpredictable, resulting in varying summer crop yields. Applying effluent can boost yields. You will also be emptying your effluent pond in preparation for next winter.

The boost in yield is due to both the nutrient content of the effluent as well as the water content. You can expect consistent increases of around 2 tDM/ ha for every inch (25 mm) of effluent applied. This is consistent across a range of different summer crops including turnips, chicory, forage rape and millet. It is well worth the extra

poisoning. Crops shouldn’t be grazed for at least three weeks following effluent application.

This will also reduce the risk from any pathogens that could be in the effluent.

■■ Young cattle (under 12 months of age) shouldn’t have access to effluent treated areas.

■■ If using a travelling irrigator wait until turnips are established to ensure there is limited bulb damage.

■■ Adjust your fertiliser program as appropriate to compensate for nutrients in the effluent applied.

Summer crops can be extremely useful for filling summer feed gaps and at the start of paddock renovations.

Applying effluent to your summer crops will help ensure good crop yields.

It has been a tough year and strategic use of effluent to grow extra feed will go a long way to offset the cost of the contractors or irrigation equipment required to apply the effluent.

• Rachael Campbell is a dairy extension officer with the Department of Environment and Primary Industries, based in Ballarat, Victoria. This article was first published in the October edition of How Now Gippy Cow.

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Dairy News AUSTRALIA October 2013

20 // management

The challenges of 3 in 2 gordon collie

Tasmanian dairy

farmer Grant Rogers admits having a crack at milking three times in two days through peak lactation was one of his crazier ideas.

While it threw up plenty of challenges, he is still sold on the overall benefits of reduced milkings for much of the year.

The 3 in 2 system will be re-introduced again in December – once the herd has passed its production peak.

The innovative former New Zealander and his wife Melanie moved to the Derwent Valley 10 years ago after identifying the environment as similar to their native Canterbury.

“We have been using 3 in 2 milking to varying degrees for the last six seasons, modifying our approach as we have learnt since starting in late January 2007.

“We were very mindful of losing production as the cost of doing so under Australian payment systems would have made the whole system worthless.”

Who:

Grant and Melanie Rogers Where:

Ouse What:

3 in 2 milking

The couple have a crossbred herd which Mr Rogers said was more suited to 3 in 2 milking.

“High producing Friesians on a high input system would probably struggle under this system in my opinion,” he said.

“The main reason we adopted the system was lifestyle. At the time we were milking through an ancient 20 aside shed and milking was hard work and in summer the heat could be unbearable.”

With only one employee, the benefits were significant when it came to rostering for one less milking.

Other benefits included reduced stress on

the cattle with less walking to milking. The condition of the cattle and their reproductive performance also improved.

There were a number of financial benefits as well with less milkings and hidden savings in cow wastage and laneway maintenance.

In 2010 they made the decision to build a new dairy and replace remaining flood irrigation with another centre pivot.

“This allowed us to increase our cow numbers by 45 and reduce both milking time and stress in a modern 25 aside shed, still using a one milker system,” Mr Rogers said.

“The 2011 -12 season was our best year. We milked 325 cows on 91ha, calving in mid August and drying off in late June.

We managed to produce 1538kg MS per ha and 430kg MS per cow using our 3 in 2 milking system.”

At the end of 2011 the opportunity came up to purchase an adjoining property and they set about what was essentially a full conversion in preparation for calving in the spring of 2012.

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Grant and Melanie Rogers with their children on their Tasmanian dairy farm.

“We gained a large amount of extra land and will eventually have over 200ha fully irrigated plus some dryland,” Mr Rogers said.

Fortunately they had allowed for expansion in their new dairy which was extended to 32 units.

They installed automatic cup removers on the last 12 units to maintain the single milker system.

In what turned out to be one of his “madder ideas” they decided to alternate two milkings of two herds in a 3 in 2

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Dairy NewS AUSTRALIA october 2013

management // 21

milking system year-round, totalling three milkings a day at 5am, 12.30pm and 8pm.

“I thought if we got our milking intervals down to 16.5 hour gaps and one 15 hour gap it wasn’t asking too much more of the udder than a traditional 15 hour gap on twice daily milking.

“In short, it was a disaster. Production dropped, mastitis broke out and the cows got very fat.

“The practicalities of it were that the shed was always going, I was always working as we now had two employees and they needed time off.

“We were still trying to get development done and little else was being achieved. Management went out the window as there was no time.”

The herds were split between older, bigger cows and younger, smaller cows.

“The older herd only dropped from 1.85 to 1.8kg/ MS. The younger herd that was being run on the new

farm fell to bits. The main reason for this, in our opinion, was that management of the new farm was a disaster.

“We decided at Christmas it had to change or we would end up in real trouble so at the beginning of January we dried off 50 cows and dropped to one herd of 448. Things picked up quickly as we increased production from less cows and had more time for property management.”

The experience has prompted Grant and Melanie to again introduce a 3 in 2 system this season from early December with a single herd of 450 cows.

By that stage, production will have come back from its peak around 1.9kg/MS a day to about 1.7kg/MS. “We will know what to expect this year and we have the new property next door under better management now,” Mr Rogers said.

“I think year round 3 in 2 milking could work

The Rogers say their crossbred herd is more suited to 3 in 2 milking.

under different circumstances. If we had the ability to milk say 800 cows in two herds, we could more than justify the extra labour required to make it work and still allow enough time for good management.

“Our advice to anyone contemplating 3 in 2 milking would be to give it a go.

After all it is an incredibly efficient use of capital,” Mr Rogers said.

The Rogers have been using 3 in 2 milking to varying degrees for the last six seasons on their Tasmanian farm.

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Dairy News AUSTRALIA October 2013

22 // animal health

Written protocols save time and potential headaches Spring time is always

a busy time on a dairy farm. In northern Victoria we are now starting to irrigate, cutting and making silage, still calving in the last of the spring calvers and thinking seriously about the upcoming joining by starting presynchrony programs, not to mention planning summer forage options.

With so many things competing for your time it is hard to stay on top of the critical animal health issues that need attention on a day to day and month to month basis.

I have written before about the importance of protocols when managing the health and welfare of our herds. Basically, a

protocol is a recipe book, a playbook we follow and know that, as we tick all the boxes, we are covering all the important aspects of that part of the production system.

My mum was always a big list writer, writing down what she hoped to do that day and scratching jobs off as they were done. The things not done today were transferred to tomorrow. She never once forgot me and left me at school to do the 4.15pm walk of shame my children have done many times as I have become absorbed in my own busy day until that phone call from the school.

To address this problem, I have put in place

animal health rob bonanno a two-alarm protocol.

The first warns me of the upcoming school pickup time, allowing me to make alternative plans with my very patient nursing staff to ensure a timely pick up if I am in the middle of something that I can’t stop. A second failsafe alarm tells me I must absolutely leave by now in order to avoid the scorn-

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ful looks from the principal or the dreaded phone call from the school receptionist.

This is an example of a protocol to ensure a better outcome where I had failed previously.

Most of us have what I call “head protocols” - the ones that we carry around in our head. They are the little failsafe rules and checklists we have made over our lives as we have learned from our own previous mistakes. I cannot tell you how many times I have heard a dairy farmer lament how they went away for a weekend and the relief milker stuffed this up or allowed this cow to get sick beyond repair or whatever. And how they can’t get good staff and that their kids just don’t do things right.

You can’t put an old head on young shoulders but writing protocols for pretty much everything will ensure the less experienced employees and family members can benefit from your years of experience. By working with your dairy veterinarian wherever animal health or welfare is concerned, the protocols will also reflect the specific knowledge that a veterinarian can provide.

Less experienced staff and family members tend to overlook problems that the more experienced can clearly see because they do

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Protocols can be as simple as a newborn calf getting one paint mark on its forehead after the first colostrum feed, then another crossing at the second.

not have the benefit of our learning. It is actually the failure of the experienced person for not providing adequate supervision, written instructions or checklists to ensure the best outcome.

A good protocol can also address the errors that can become very costly as new employees and young family farm helpers progress from the stage of unconscious incompetence (where they actually know they don’t possess the skills required and actively seek help) to a stage of conscious incompetence (where they are conscious of the skills required, think they have them but actually don’t, and don’t ask for help).

This stage, where employees have a bit of knowledge and thus feel able to tackle bigger projects, is where having good protocols and checklists can

really allow them to perform at a level above their actual experience. They are benefiting from the combined experience of those who have written the protocols. Leaving a worker at this stage of their development in charge without the benefit of supervision or protocols causes the lamentable outcomes.

Unfortunately, there is no such thing as a onesize-fits-all protocol.

Every farm is subtly different in its aims, physical resources and personnel. A good protocol has to take into account the limiting factors while aiming for a consistently good outcome. It may be as simple as a protocol where a newborn calf gets one paint mark on its forehead after its first colostrum feed, then another crossing at the second, so that everyone can clearly

see which calves have (and have not) received their two feeds within 24hrs. Or it may be as complex as a fresh cow protocol that includes examination and monitoring of the many components known to influence the success or failure of transition.

A written protocol allows all workers, no matter how experienced, to benefit from the expertise of the farm owner and his or her advisors.

This spring, don’t forget to include your dairy veterinarian in your team when thinking about any issues involving animal health, welfare, reproduction and production as they are your unbiased source of professional advice.

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

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Dairy NewS AUSTRALIA october 2013

management // 23

Big variation in probiotics Research from

New Zealand’s Lincoln University has found a wide variation in the number of viable and living micro-organisms in probiotic products used on dairy farms.

Faculty of Agriculture and Life Sciences scientists assessed the numbers and viability of microorganisms found in four locally-sourced probiotic feed supplements.

In the dairy industry it is believed that the addition of microbial preparations to a cow’s diet will help in maintaining healthy microbial populations in their gastrointestinal (GI) tracts.

Dr Malik Hussain, project team leader and microbiologist, says their results reveal there is a wide variation in the numbers of viable/living micro-organisms able to be recovered

from the four probiotic products they tested.

“Probiotics products should contain live microorganisms (bacteria and yeasts) when they enter the animal’s digestive system.” said Hussain.

“The variation in numbers of viable cells in the products we tested is concerning for dairy farmers who rely on probiotics to improve the gut health of their cows.

“Also, compounding the issue is that unlike a drug, a probiotic’s effectiveness is largely determined by the farming system they are used in since if an animal is not depleted of native probiotic microbes or under disease pressure, a probiotic may not work.

“Our results suggest that the probiotic products we tested are highly variable so farmers using a

Silage, hay too valuable to waste

probiotic must select and monitor how well it performs in their particular farming systems.”

Dr Grant Bennett the microbiologist on the team says most common products marketed for ruminants (including dairy cows) contained the common live yeast (Sac-

charomyces cerevisiae).

“Live yeasts can improve performance by increasing the dry matter intake and thereby the milk production in dairy ruminants. The beneficial impact is attributed to greater total live bacterial populations in the rumen, stimulated growth

and fibre-degrading activities of cellulolytic microorganisms leading to better fibre digestibility, stability of rumen pH and a decreased risk of acidosis,” he says.

Dr Craig Bunt, team member and formulation scientist, says as a result of this work, farmers will

need to make decisions about what product best meets the needs of their production system.

Despite the opportunities that probiotics industry presents to agriculture they are not straightforward to use since it can be difficult to deliver a regular high dose of live

microbes to animals economically and practically within a farming system.

In undertaking this research the team used a combination of culturing techniques and detection methods to determine the live and dead cells presence in these commercial products.

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Silage and hay is too valuable a resource to waste,

particularly now with stocks so low.

The Waste-Not Feeding system is designed to reduce waste and increase feed conversion efficiency.

Its inventor, Terry Allen, won the Inventors Award at the Royal Melbourne Show in 1988. It is still produced in Maryborough, Victoria.

The arches of the feeder act as a voluntary head bale and ensures that each cow has unmolested access to whatever you choose to feed. The skirt ensures that hay and valuable leaf stays in the feeder.

“Contrast this to most other feeders where the cow is allowed, or even forced, to eat outside the feeder,” Mr Allen said. “You can see the wasted feed that falls on the ground, but not the leaf that blows away.

“It turns out the bossy cows are always defending their territory when they eat outside the feeder. It is this animal behaviour that the Waste-Not Feeder helps to prevent, and we believe it leads to the increases in growth rates and production which we find in trials and on farms.

“We lift the tail out of the mob, as tailenders and shy cows now have a fair go at the feeder.”

Mr Allen said this also assists each animal to get the fibre needed to better balance the ration, when it consists of lush pastures and/or grain-based rations.

“We have found increases in growth rate of up to 27% in trials conducted with Dookie Ag College, better production and better feed conversion ratios in trials.

“This has enabled our customers to finish and sell their cattle sooner and turn them off at a profit.

“So you can see a feeder is not just a tub with uprights; it is a carefully-sized system to more accurately allocate feed to a herd of cattle.”

Mr Allen said on a recent trip to Dorrigo, NSW, he met a dairy farmer who had installed a Waste-Not Fair Go Dairy Feed Pad in May 2013, set up on gravel. It had already saved 30% of his silage, totalling 90 rolls.

“This meant the Feed Pad had already recovered its cost, just in silage saved. Add in labour savings, reduced pasture damage and increases in production, especially in the butterfat test, and his investment turned out to be a highly profitable one.”

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Dairy News AUSTRALIA October 2013

24 // animal health

New tool for ’appy farmers Western Victorian farmer and veteri-

narian Zoe Vogels was part of the team that created a new smart phone app designed to tackle mastitis.

The Countdown Mastitis Toolkit app has been designed in consultation

need to manage mastitis in their herds including: ■■ Tools ■■ Topics specific to common to mastitis control scenarios ■■ Countdown Farm Guidelines ■■ A library featuring

with dairy farmers, advisors and vets and is based on the Countdown 2020 mastitis control program and associated resources.

The app is divided into four sections offering a range of the latest information and resources farmers

related articles, tips and traps Alongside her husband, brother-in-law and two farm staff, Dr Vogels runs a 600-cow dairy farm at Scotts Creek. She said the app was easy to use and an invaluable resource, par-

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“Whether you want to The app was road tested thing you need to know from calving to drying off,” by dairy advisors at a series know a liner change date, of Countdown 2020 meet- the health of cows’ teats Dr Vogels said. ings in 2012 and fine-tuned or information on teat dis“The app doesn’t need at further trials by farmers infectant, this app is comreception once you have prehensive, downloaded it up-to-date and which is very “The app doesn’t need easy to use,” Dr useful for people Penry said. like me who have reception once you have The Countpatchy-to-no downloaded it.” down Mastitis mobile reception.

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Dairy News AUSTRALIA October 2013

26 // animal health

Phantom cows haunt herd reproductive performance A veterinary

researcher has examined the effect of phantom cows on a herd’s reproductive performance.

A ‘phantom’ cow is one not detected in oestrus (heat) by 25 days after insemination, but then determined to not be pregnant at pregnancy testing.

NZ-based vet, Dr Scott McDougall, said farmers are left with this concern:

“What is it about these cows that cause them to be this way, and how can we better avoid them?”

Typically a vet may find at pregnancy testing time 5-15% more empty cows than the farmer may have expected as a result of the phantom cows not being discovered earlier.

Dr McDougall described a complex mix of physiological, patholog-

ical and managerial factors that make detecting and reducing phantom cow incidence a challenging one.

“Short returns”, that is cows that ovulate (and show heat) 10-14 days after a first mating, occur in perhaps 75% of cows bred at the first ovulation after calving.

Such cows have a very low chance of getting

pregnant. However, a farmer has no way of knowing whether or not the heat he observes is a cow having a first ovulation and heat after calving.

Add in risks of embryonic mortality and poor heat detection, and it was understandable farmers were getting higher than expected incidences of phantom cows, Dr

McDougall said.

“UK research shows us that about a third of cows didn’t follow the textbook when it came to having normal ovulation cycles.”

He said using techniques like fixed time AI introduced an even higher risk of phantom cows occurring: about 43% of treated non-cyclers that did not conceive to the first breeding did not

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Dr than the ConfirmMcDouing preggall’s advice farmer may nancies to vets and have expected using early farmers as a result of pregnancy was to look the phantom detection hard at a herd’s non- cows not being before initiating treatreturn rate discovered ment was at week five earlier.” an option. of mating.

But as these If the nonreturn rate was more than treatments may affect existing pregnancies, accu70% - particularly where rate early pregnancy testthat group included cows ing is critical. treated for non-cycling A trial in New Zealand’s – “alarm bells should be South Island with 1800 ringing.” cows found re-synchronis“Realistically the first ing had the best effect in service conception after low body condition score a non-cycler treatment phantom cows, whether or rate is about 40% and not they had been treated only about 50% in cycling cows, so if you get 70% not as non-cyclers earlier in the breeding season. returning in week When resynchronised five, it can’t be correct, the thinner phantom cows there must be cows in experienced a significant trouble there.” increase in their 10-week Minimising the risk in calf rate, which lifted of phantom cows occurfrom 25% on average ring involved the familiar without treatment, messages of feeding prior to 60% following to calving, having corre-synchronising. rect body condition score

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Dairy News AUSTRALIA October 2013

28 // tractors & machinery

Boomerang keeps hitting the mark The sheds on the place can hold 300 An experience with a hay feeder that couldn’t handle the job led Jamie large square bales, so Mr Forster makes Forster to finding the ideal answer to round bales and some squares and buys his large square bale feeding out issues. in large squares. He made about 400 Mr Forster, with his wife Debbie and round bales last year and 600 the year their four children, currently milks 350 before. A contractor comes in to do the cows at Cohuna, in northern Victoria. large square baling – just enough to fill Mr Forster grew up on his parents’ dairy the sheds and Mr Forster does the rest of the hay and silage. across the road, and left “We had another school at 16 to help with brand hay feeder when the milking. Judy and the drought really hit,” Kevin are semi-retired Mr Forster said. “We and Jamie’s brother were buying in cereal hay, Steven now runs that which meant 400 bales dairy. Mr Forster took of 700kg vetch. The hay over an old dairy on feeder kept bending with this property and has been there for 15 years. working clothes the weight – we ended up chris dingle having to leave it in the “I worked on four paddock.” farms when I was Mr Forster’s father, Kevin, had a young, including a sheep farm down the road. Working in the Kraft factory second-hand Boomerang bale feeder at Leitchville for a year convinced me that he had never used, so he borrowed it and put out the large square bales that I wasn’t an indoor person.”

Their property covers 120 hectares with no worries. So he bought that one (300 acres) with three run-off blocks to from Kevin.

“We got four years out of it and it run the dry cows and heifers.

Jamie Forster with his Boomerang MK 5 bale feeder.

Who:

Jamie and Debbie Forster Where:

Cohuna, Victoria What:

Boomerang MK5 balefeeder

was getting tired. It had put out thousands of bales.”

So 18 months ago it was time to invest in a new one. Mr Forster looked around at other brands and then contacted Albert Freeman from Eastern Spreaders at Kerang who are the local

dealers for Boomerang.

“Albert gave me a good deal on the other two bale feeders on a new Mark 5 model,” he said. “It was a no-brainer, he was easy to deal with and I was pretty impressed.”

The Boomerang MK 5 bale feeder is designed and manufactured at Colac West in the western district of Victoria. It is a self-loading machine that can carry hay or silage. With a twobale capacity, the Boomerang MK 5 can carry round or big square bales.

The flotation tyres come with threetonne axles and hubs. The floor in the bale chamber prevents leaf loss when feeding is out. The unit is capable of feeding out either side and has the ability to vary the speed, depending on the supply of oil.

The Boomerang is operated by either a Deutz AgriTron 110 or a John Deere 6534 and Mr Forster said that it is easy to operate. “It’s strong, well-built, nothing bends on it. I’ve done heaps of bales. The best thing about it is that you can feed out from both sides with both the rounds and squares and put them under a fence.”

He said that he had good silage last year, and is buying in all the grain he needs. He makes his own pit silage

mainly shaftal, ryegrass and clover. “I bought some silage last year but haven’t needed to open it so far; we will do so in six weeks’ time.”

The dry cows are fed round bales in winter and large squares over summer, plus silage during the day and hay at night. “The Boomerang is good for 4 x 4 silage bales,” Mr Forster said.

They also run a Kubota tractor for silage carting and fertiliser work and recently purchased a Lely disc mower.

They also have a Krone disc mower and rake.

In the last six months Mr Forster has got rid of the channels on the place and replaced them with 4.2km of fullyautomated, computer-operated 355mm pipelines.

“We can save water by using it more efficiently, grow more grass and it’s a lot easier to manage putting water on at the right time – from wherever I am.

“It gives you more time to do other things. Even when you’re on holidays, you can check the system and arrange watering.

“I’m enjoying dairying now – it looks a lot more positive lately. The dams are full, milk price is good and so the future is looking a lot better than it was.”

The Boomerang MK 5 bale feeder can carry round or big square bales.

Jamie Forster feeding out hay.

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Dairy News AUSTRALIA October 2013

30 // tractors & machinery

Long hours no trouble for Schuitemaker loader wagons Ag Machinery Australia is the new distributor for the Schuitemaker range of forage harvesters, manure spreaders and feed wagons.

Ag Machinery Australia was launched as an agency to import Schuitemaker agricultural machinery late last year by northern Victorian dairy farmers Richard and Mariette Van Dooren.

The Van Doorens run 750 dairy cows on 400ha at Strathmerton in northern Victoria.

In 2009, they became the first dairy farmers in Australia to use DeLaval’s voluntary milking system - and have the only robotic system with the cows

based indoors.

They are now running both their dairy farm and their machinery distribution business, as well as contracting for local farmers.

Mr Van Dooren has used Schuitemaker equipment for years and had two of the multi-purpose Rapide loader wagons at work early this month.

“We are running the wagons at the moment 15 hours a day, five days a week,” Mr Van Dooren said.

“We’re using them to cart silage at the moment for the most part, the rest of the year they are used for feeding cows.”

The Rapide series has

large ground clearance and perfect weight distribution. The robust, compact construction together with a galvanized and coated body makes the box strong, solid and long lasting.

The star-shaped rotor is 2m wide for all models.

The rotor tines are bent and have a width of 20mm.

This ensures that even under the most difficult circumstances all types of grass are perfectly cut and loaded.

The Rapide is known for its high compression of the load, the highest of all dual-purpose wagons and pick-up wagons.

This high compression is achieved because the

Richard Van Dooren of Ag Machinery with the Schuitemaker loader wagons at work.

grass is stowed along the slanted RapidStream guiding plate.

A 175hp tractor is required to pull the wagons and Mr Van Dooren said it takes 20 litres of fuel per hour on average to operate.

The Van Doorens have a focus on customer service, ensuring that any replacement parts will be distributed overnight.

“If the machine breaks down, service and parts are now available and for

90% of our customers this is the most important thing.”

Ag Machinery Australia distributes the entire range of Schuitemaker machinery, including Calypso and SMS wide spreaders, which are suitable for spreading stall manure and compost.

They are fitted with vertical distribution beaters and can be delivered in 8, 10 and 18 ton variants and in single axle or tandem axle models with a

steel loading floor and galvanized side walls as standard.

The manure slide, which is placed in front of the beaters, can also serve as a measuring slide for fine material.

Due to the clever construction of the beaters, the Calypso can produce a wide spread and still distribute a fine uniform layer.

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Dairy NewS AUSTRALIA october 2013

tractors & machinery // 31

Foraging for a better way FarmTech Machinery has launched a new silage forage harvester for Australian farmers.

The JF C240, from Brazilian company JF, has a two row corn front and a 2m 5-disc mower for grass silage.

FarmTech managing director, Geoff Modra, regularly visits international agricultural machinery shows, looking for machines to offer Australian farmers. Mr Modra visited the JF stand at Agritechnical 18 months ago and was impressed with this semi-mounted forager.

Its ability to handle smaller areas efficiently was a big attraction.

“With hourly capacity of up to 50 tonnes it can get the job done at a lower cost per tonne/hectare,” he said.

“The patterned C- section chopper knives have the ability to stay sharp longer and cut efficiently.”

The sharpening system is built into the machine for easy maintenance. The chop length is easily controlled for the 2m disc mower to 36mm to give the farmer the silage he requires.

The C240 is unlike older foragers, it has no belts or chain drives, and is driven by gear system for reliability.

The 2.0 grass front is quickly changed from a two row corn front giving a truly

multi-purpose forager for farmers and contractors alike.

Mr Modra also visited the JF factory in Brazil, about 200km from Sao Paulo.

He said the factory was state of the art, from the R&D to production systems.

The C240 forager is complimented with a silage bagger. The silage bagging machine compresses the silage, expelling the air (the enemy to silage) and giving clean easy to handle silage to spread out.

The bags are similar to the growing popular grain storage bags for on farm storage. The silage bagging system orig-

Phil Hartley with the JF C240 silage forage harvester.

inated in Argentina and is now used in many countries. Mr Modra said silage in plastic bags give a much higher usable quality.

“Bags are recyclable and it is a ‘pay as you go’ system which is very cost effective in animal feed performance.”

Tel. FarmTech on (02) 6024 6800.

Small, medium tractors work harder with more comfort NEW SMALL and medium-frame

tractors from the John Deere 6R series tractor range are now available in Australia and New Zealand.

Including these, nine models are now available sized 78-154kW (105210hp). All 6R models offer new levels of power, performance and operator comfort, including improved suspension and cab visibility, more powerful hydraulics and increased lift capacities.

The small frame 6105R, 6115R and 6125R models are equipped with a Stage IIIB 4.5L 4-cylinder John Deere PowerTech Plus engine rated from 78-154kW. The maker’s fuel efficient diesel-only PowerTech engines meet

the latest emission standards. The medium frame 6130R model is powered by a 96kW 4-cylinder engine mounted on a 6-cylinder frame; the other two medium-frame models, the 6140R and 6150R, are powered by Stage IIIB 6.8L 6-cylinder John Deere PowerTech Plus engine rated at 103kW and 110kW, respectively.

These new tractors also have a longer wheelbase to provide improved stability for loader applications. In addition, a higher permissible weight and payload allow bigger and heavier implements to be carried.

An integrated front hitch with a lift capacity of 4000kg and a new front PTO are also available ex-factory for

the first time on 6R series tractors.

The front hitch is compatible with the new John Deere H Series front loaders, designed for maximum visibility and to match the new tyre sizes and tractor chassis dimensions.

Transmission options include the newly designed 24-speed DirectDrive, which combines the handling comfort of a steplessly variable shift transmission (IVT) with the power efficiency of a mechanical unit, but saving fuel – up to 10g/kWh compared to an IVT. The new 6R ComfortView cab has 20% more space and a similar increase in visibility.

It offers a new level of operator comfort, with features such

John Deere’s new 6R series offer new levels of power.

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Dairy News AUSTRALIA October 2013

32 //  tractors & machinery

New Krone balers deliver more The new Krone Big

Pack HighSpeed range of large square balers delivers 20% more throughput, the company says.

The increase that has been made feasible by three major modifications: the addition of a power driven feed roller to the cam less pick up, an increase in throughput capacity of the Variable Fill System (VFS) packer system and an increase in plunger strokes.

The Active Pick which has been chosen as stan-

dard equipment for all Australian Big Pack balers is arranged closer to the packer and rotor cutter to provide a swifter crop transfer.

The new design that features a chain driven feed roller behind the usual crop roller will lead to enormous boost in throughputs, in particular in difficult conditions like extremely dry material or brittle short straw for example.

The Big Pack VFS pre chamber packer system

now has five tine bars versus six tine bars on previous models and an increase in volume of 18% to feed more crops through the machine faster.

The system operates in five stages to feed the material into the pre-chamber where it is compressed before it is allowed to enter the baling chamber.

When the pre-chamber is filled with material the new cam-controlled sensing rake is pushed

The new Krone Big Pack HighSpeed range of large square balers deliver 20% more throughput.

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out of the VFS chamber, a system that ensures that the machine produces uniform, dense bales, even when dealing with small and narrow swaths.

Due to the higher speed of the packer and to improve durability in this area some modifications have been done to the size of bearings and the cam tracks of the VFS. The third major modification is to the number of plunger strokes. On the Big Pack 1270, 1290 and 1290 HDP, plunger strokes have been increased by 18% from 38 to 45 strokes per minute.

This also contributes to the 20% more throughput of these balers.

Further upgrades involve a larger diameter knotter shaft, which increased in size by 15mm to 55mm, wear plates that are bolted onto the bottom of the bale chamber to reduce the cost of wear in this area, and the new colour touch screen monitor that gives the operator a full overview of

With the Lely Astronaut milking robot every cow has its own rhythm. They can decide whether they would like to eat, rest, or be milked. That gives you the flexibility to manage your own time without fixed routines.

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innovators in agriculture The operator can view bale weights on the monitor with an accuracy of +/- 2%.

machine functions.

Due to the very high bale densities achieved by the Krone balers and in particular the 1290HDP High Density, Australian operators have been asking for scales to measure the weight of each bale.

This feature is standard for the Australian market and is designed with four weight cells that allow the operator to view bale weights on the monitor with an accuracy of +/- 2%.

The twine boxes have also received some nice updates. They now have gas struts that allow operators to swing them up and fix them in their opened position for easy access to the baler for service and maintenance.

The box is also sealed to keep dust and debris out and away from the twine. LED lights, which are activated when the panels are opened, illuminate the area where the twine is threaded into the system.

Tel. 1800-334-653.

Dairy NewS AUSTRALIA october 2013

tractors & machinery // 33

Durable disc mill at affordable price Northern Feed

Systems launched their new Attrition Disc Mill at Elmore Field Days earlier this month.

Operations manager Ian Yeo said demand was rising for a disc mill of this type that was low maintenance at came at

an affordable price.

“It’s a product people have been looking for at a competitive cost,” Mr Yeo said. “It also has the advantage in that it can be run by petrol motor, diesel or PTO drive.”

The entry level attrition disc mill is $8515

plus GST. Trials have proven it can process two tonnes of wheat per hour, and 1.2t barley/hour. The larger machine, which can run between 6-8t of wheat per hour, retails at $17,150 plus GST. The Attrition Disc Mill will produce granulated

feed with minimal fines, and can process a mix of grains of all types and sizes at the same time.

Mr Yeo said it comfortably processes

small pinched grains and the machine includes a simple coarse/fine adjustment.

“There are no close contact moving parts so

hard foreign objects are unlikely to cause major damage,” he said.

Parts are both highly durable and low cost to replace, Mr Yeo said.

“It is the highest throughput in any disc mill range and is backed up by our support and service.”

Tel. (03) 5482 4800.

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Strength / Quality / Performance

titan Series 7.8 - 25m3 The Titan Series Forage Wagons are built for the serious farmer.

Heavy-duty 13mm floor and elevator chains and larger diameter sprockets are designed to handle larger and heavier volumes of material with ease.

Larger floor and elevator shafts and bigger gearboxes give trouble-free operation and extended service life, with less time needed adjusting chains.

For More inForMation contact

www.mcintosh.net.nz

Dairy News AUSTRALIA October 2013

34 // tractors & machinery

More power, torque after makeover IN THE first makeover of its 7R series tractors since their launch in 2011, John Deere is rolling out five new 7R models from 154-213kW power for 2014.

The new 7R tractors boast up to 14kW more power and more torque than previous models.

In line with the company’s dualpower strategy for the Australian and New Zealand marketplace, new 7210R and 7230R models will be available with a US EPA Tier 2 John Deere PowerTech engine, while new 7250R, 7270R and 7290R models will be available with a US EPA Final Tier 4 John Deere PowerTech PSS engine.

The PowerTech PSS engine uses John Deere’s efficient selective catalytic reduction system and utilises a high-pressure common rail fuel system and series turbochargers to improve total fluid efficiency while effectively reducing emissions.

The 7R series tractors’ fuel capacities range from 475-589 L, depending on model and transmission option. Tractors equipped with

a PowerTech PSS engine have a diesel exhaust fluid (DEF) storage capacity of 25.7L. Transmission options on the new 7R tractors include CommandQuad Eco, available on the 7210R and 7230R models, and the new e23 power shift transmission with ‘efficiency manager’, standard on all five 7R models.

The e23 PST has 23 equally spaced forward gears and 11 reverse gears that enable the efficiency advantages of a steplessly variable-speed transmission with the smoothness and simplicity of a power shift.

The ‘efficiency manager’ feature optimises fluid economy during field operations and transport. The John Deere steplessly variable transmission is also available for all 7R models.

Jarrod McGinnis, division marketing manager for John Deere, said the new engine and the transmission options help the 7R Series tractors offer greater productivity and value to customers. “These

new machines are more fluid efficient and offer increased power for exceptional engine, hydraulic and PTO performance that many customers want in a row-crop tractor.”

In addition, the new 7R tractors have many features in common with their larger new 8R cousins, including the redesigned CommandArm, with improved ergonomics and more intuitive control of major tractor functions such as throttle, AutoTrac resume button, transmission speed and direction, SCVs, PTO and hitch.

Depending on the model, the CommandArm comes with a 17.7 cm 4100 CommandCenter display or a 25.4 cm 4600 CommandCenter display. Both are AutoTrac capable and feature an easier-to-use operator interface. The Command-

John Deere has revamped its 7R series tractors.

Center puts machine operation information and control at the fingertips of the operator.

“With factory-installed John Deere FarmSight components and other integrated technologies, the 7R tractors deliver a premium operator experience along with superior performance in the field,” said Mr McGinnis.

“The remote machine information systems provide off-site dealer diagnostic capabilities and help reduce operational costs.”

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Like Father Like Son Genomics - you can use the next generation at the same time as their sires DELSANTO AND PICOLA

ZINGER AND JETFINN

> PICOLA is a DELSANTO son from one of Australia’s best cow families the ‘Perfectors’, along with a high APR he also excels.

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> DELSANTO is the King of components.

DELSANTO

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> JETFINN continues to be amongst the most popular Genomic Sires.

PICOLA

APR

ZINGER

243/83%

ZINGER

JETFINN

APR

319/58%

ASI

kgP

P%

Milk

kgF

F%

Rel%

Cell Count

Overall Type

ASI

kgP

P%

Milk

kgF

F%

Rel%

Cell Count

Overall Type

224

17

0.43

-226

60

1.01

90

126

110

301

42

0.23

1129

66

0.26

66

103

106

PICOLA

APR

281/58%

JETFINN*

APR

242/69%

ASI

kgP

P%

Milk

kgF

F%

Rel%

Cell Count

Overall Type

ASI

kgP

P%

Milk

kgF

F%

Rel%

Cell Count

Overall Type

209

22

0.27

307

53

0.57

67

137

104

202

36

0.03

1304

37

-0.27

76

106

107

*Sexed Semen available

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20130366