Dairy News Australia August 2014

WORLD STAGE: Does Australia want to compete? page 14 PLENTY OF GRUNT

Horsepower at a good price PAGE 32

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tassie tigers

Can Victoria match Tasmania’s recent growth this season?

PAGES 4-7

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news // 3

Saputo opens up on WCB battle our team came together and rose to the challenge,” he said.

Saputo paid $519 million for 88% of the listed processor.

Saputo Jnr said he enjoyed getCANADA’S LARGEST milk processor has opened up about the pro- ting to know the Warrnambool tracted battle to acquire Australian employees, suppliers and sharecompany Warrnambool Cheese and holders, and letting them get to Butter, saying it was a battle worth know Saputo.

“A memorable fighting. moment occurred at In its annual report meetings we held with released late last Warrnambool farmer month, Saputo says it shareholders.” has made 23 acquisiSaputo has a cortions since becoming a porate culture that public company in 1997, explicitly values the but Warrnambool was employee. the most public acquiLino Saputo Jnr Saputo Jnr said sition process so far.

Saputo started as a In a question and answer segment in the annual family business in the dairy prodreport, Saputo chief executive Lino ucts industry where quality was the Saputo Junior said the acquisition only path to success.

“You soon realise no one person was filled with exciting twists and can safeguard quality, and a high turns.

“It kept everyone on their toes; level of trust must be placed in your sudesh kissun

Queensland farmer Luke Stock can see positive signs for his state’s industry after a tough three years. PG.07

WA farmer Rob Giura has installed a cut and carry system to complement his new milking robots. PG.17

employees.

“As we grow larger, we find this reality does not change.

“When we acquire a new company, I take part in the integration by personally visiting the facilities.

“I want to make sure management understands and applies our corporate culture from the start.

“Our culture is a key differentiator for us; we know we couldn’t experience the same success without appreciating and trusting our employees and providing them with the right training, tools, resources and support.”

Saputo Jnr said the company will learn from its takeovers in Canada, US and Argentina to guide its Warrnambool operation.

“The companies we acquire usually find they can manage more effectively because they gain access to our knowhow, international experience, financial resources and support.

Cattle expert Phillip Poulton says farmers must determine cause of downer cows to ensure they are properly managed. PG.26

News �������������������������������������������������������3-11 Opinion �����������������������������������������������12-13 Agribusiness ������������������������������ 14-15 Management ��������������������������������16-18 breeding management �����19-20 animal health ��������������������������� 21-26 hay & silage ����������������������������������27-31 Cows grazing on Chad Parker’s dairy farm on the Sunshine Coast hinterland. Mr Parker has achieved an annual growth of 25% over the last five years. See page 27

Machinery &

“Saputo intends to invest in Warrnambool to accelerate its growth, and create new opportunities for the company, its employees and suppliers.

“We see potential to increase manufacturing capacity, grow milk intake, drive improvements in operating efficiency, and support innovation and new product development.”

He said Saputo has a lot of confidence in the Warrnambool management team.

Former WCB chief executive David Lord is now president of its dairy division in Australia.

It is a great business with a strong heritage—one that Saputo intends to preserve, Saputo Jnr said.

“Moreover, we will retain and grow current brands while we seek to introduce new product lines.”

RMD address changes RMD delivery addresses for farmers are being phased out by Australia Post and replaced with a road number.

Dairy News Australia subscribers with a RMD delivery address will need to change their mailing details to ensure they still receive their copy of the paper.

If this applies to you, please forward your new details to circulation@ dairynewsaustralia.com.au or RNG Publishing, PO Box 2655, Bendigo BC, Vic 3555.

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Dairy News AUSTRALIA august 2014

4 // news - milk production

Southern supply sees production rise slowly 12

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10,089,155,149

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production has edged ahead marginally over the past year on the back of big gains in Tasmania and parts of Victoria.

However, volumes continued to decline in Queensland, New South Wales, Western Australia and South Australia, leaving the industry precariously placed.

The 0.41% national increase was achieved thanks to big gains this autumn and June that helped to overcome a sluggish start to the financial year.

Tasmania with a 5.85% rise was the biggest growth area, followed by eastern Victoria, while Queensland continued to shrink, recording a 5.64% drop in production.

South Australia and New South Wales also fell by more than 3%.

Farmers are calling for consistent milk prices and ongoing positive signals from manufacturers to bring sustained confidence back to the industry to stimulate more growth and investment.

While pricing concerns dominate

11,270,604,843

AUSTRALIA’S MILK

National Milk Production

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BILLION LITRES

Rick Bayne

across the country, the production figures were also dampened by poor weather conditions in early 2013 before a return to more buoyant output over recent months.

Industry leaders are expecting modest growth over the coming season.

Dairy Australia industry analyst John Droppert said the industry finished the year with a strong recovery, particularly in states with export exposure.

“Farmgate prices were on a high driven by high export prices over the season,” Mr Droppert said.

He said a good season, strong price and growing positivity contributed to the late surge and that momentum should continue into 2014-15 where an incremental 2% growth is forecast.

“That builds off the momentum of the last part of last season and we’re expecting most farmers will be able to make some decent money this year for the second year in a row,” he said.

“We’ll probably see more growth this year because farmers have had time to get their balance sheet sorted out and pay off creditors, so they

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can go into this spring in a reasonable financial position.”

However, Mr Droppert warned that a substantial drop of about 30% in export commodity prices meant farmgate prices won’t be as high.

“We’re not going to see the same prices as last season, but that’s not to say they’re going to be bad. The major exporting manufacturers are forecasting a $6.10$6.30kg MS closing price,

and that’s still pretty good down to whether we’re going to have an El Nino territory,” he said. or not,” he added.

“Six dollar plus prices Mr Droppert said are prices where the Tasmania’s majority of farmers should Most farmers growth be able to make are set for a agenda, including the decent money.” development Mr Droppert good spring. of new added that farms, expansion of seasonal conditions were irrigation, and a sense good and most farmers of confidence pushed by were set up for a good processor investment, spring. had helped it to record “But as we saw in 2013 production levels. the wheels can fall off “That’s a bit harder fairly quickly. It comes

to replicate in the other states. It’s not only the plan; it’s also the sentiment that comes with the processors investing.

It’s good for confidence when you see processors investing money and the government is keen as well,” he said.

Mr Droppert said farmers in other areas were more cautious about investing in long-term expansion.

“In south-west Victoria many farmers were burnt

last year and people in fresh milk regions had experience with surplus milk being penalised, but there are quite a few young farmers who see a good future for the industry who are looking to grow.

“It’s about sustaining the confidence that is there and processors proving that they want milk for more than just this season if they want people to invest in the longer-term.”

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news- milk production // 5

Victoria ready to expand rick bayne

VICTORIA REMAINS

Australia’s biggest milk producing state and has made a steady increase over the past 12 months.

Gippsland and northern Victoria were the growth areas with 3.19% and 1.67% respectively, while the western region experienced a slight decline of 0.49% after a disastrous start to the year caused by low prices and a bad 2013 autumn.

State leaders believe the steady growth can be maintained during 2014-15, although their optimism is muted by concerns about weather conditions.

The state’s three regions are each producing about two billion litres per year.

Northern Victoria hasn’t had negative growth period in more than three years.

“We’re building on a solid trend,” Murray Dairy chairman Malcolm Holm said. “Even though it’s a small percentage it’s still solid growth, especially given that it was tough last season in regards to milk prices and conditions.

We’ve done pretty well.”

Mr Holm said there was capacity on farm and in the milk processing sector to continue that growth.

“It’s still pretty early in the season but it would appear with the current weather

Graeme Nicoll

Malcolm Holm

conditions that we’re set up for a good spring,” he said.

The region has a confident outlook pushed by strong on-farm investment.

“People are investing fairly heavily into their farms and I think we’ll see that converting into growth,” Mr Holm said.

“We had a good price last season. It has come back a bit but it shouldn’t affect us too much.

“We’re well placed for people to get into dairy and we’re still the largest producing region in Australia with good steady growth.”

South Gippsland dairy farmer Graeme Nicoll said the season had been reasonably good and he expected the region’s steady growth of more than 3% to continue.

“The economics have been good, the optimism has been high and the

Price critical to NSW, WA growth Confidence to invest remains an

issue in New South Wales, which saw its milk production fall by more than 3% compared to the previous financial year.

Dairy NSW chairman Michael Perich said lack of confidence was the biggest issue facing the industry.

“That really comes from the processors giving us the confidence to continue to invest on farm. It’s not just price; it’s more about confidence and long-term strategy,” he said.

Mr Perich said the industry was constrained by the capacity of farmers willing to invest, not only on farm infrastructure but on consultants or advisors to assist them in moving forward.

He said he doubted the industry could grow but he hoped it could stop the decline.

�

“With the Queensland industry retracting we’ve got some opportunities, along with the export market.”

Conditions in New South Wales have been variable but mostly quite dry “which is causing a big issue for farmers without irrigation.”

Western Australian Farmers Federation dairy president Phil Depiazzi said the state’s 2.73% decline was a major concern that could only be addressed by paying better prices.

A recent two cent lift would go some way to halting the decline and stimulate more interest in growth, but he said it wouldn’t solve the problem.

“What we’re after is clear signals from the processors that they want milk and are prepared to pay a reasonable price for it,” Mr Depiazzi said.

“We’ve got some farmers down

around 45 cents and that’s just not enough. The Sustainable Price Report suggests we need mid-50s to get a reasonable return on assets and to get guys motivated to halt this decline in milk production.”

Despite the ongoing price concerns, Mr Depiazzi said there was a slightly more positive feel about the industry.

“I don’t believe it will decline in the coming 12 months. The figures will show we struggled with a wet spring last year that limited production.

“This year we’ve had a good start.

Grain crops are looking pretty good and that should stimulate a bit of production through summer, as should a summer incentive program.”

While WA volumes have dropped, some farms are increasing production and predicting better times ahead.

�������������

season has been reasonably good for some and very good for others,” Mr Nicoll said.

“Gippsland is a very stable region that often doesn’t express the volatility of other regions, due to the relatively stable climactic conditions and the style of farming with a very strong pasture focus,” he said.

“When the economic dials are right for Gippsland, we’re in a position where we can capitalise on our strength in growing grass. Homegrown fodder is the economic driver of the industry.”

Mr Nicoll said his farm’s production was up.

“The past 12 months have been fantastic for us,” he said.

“Once the economic drivers are there, Gippsland has demon-

strated in the past 12 months that production will grow. The opportunity is there.”

Western Victoria has suffered a small decline, largely on the back of a poor 2013 season, but has gained ground in recent months.

WestVic Dairy chairperson Lisa Dwyer said the region was coming off an extraordinarily difficult year.

“We had a most unfavourable autumn period last year so you would expect there to be a significant lift for the corresponding months in 2014, particularly as this year’s season has been near enough to perfect in most areas,” Mrs Dwyer said.

“When you combine a better season with much more favourable milk pricing you would expect

to see continuing good figures.”

However, Mrs Dwyer said that farmers were “gun shy” about predicting too much success.

“We’ve had lessons on how quickly a season can turn around and there are ongoing concerns about the likelihood of an El Nino this spring,” she said.

“While there is significant confidence around this year, we’re all rather cautious about the outlook and a number of farmers are still recovering from that tough period.”

Mrs Dwyer said price and conditions remained the two fundamental drivers of success.

“We really need a couple of consecutive good seasons for farmers to feel confident in expanding and have the financial resources to do it.”

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Dairy News AUSTRALIA august 2014

6 // news - milk production

Ambitious target on track TASMANIA IS becoming the star performer in Australia’s dairy industry.

The island state is leading the way in growing Australia’s milk output with a record-breaking 5.85% increase in the past year.

The state’s milk production reached a new high of 804.6 million litres in 2013-14, easily passing the previous top of 788 million litres.

The big increase has been attributed to an “awesome autumn” and good prices encouraging farmers to reinvest, and industry sources predict the increase will be even higher this year.

Tasmania now accounts for 8.7% of national production and the state’s strong growth contrasts with the rest of Australia where production grew by only 0.4%.

DairyTas executive officer Mark Smith said the figures show what can happen when conditions are favourable and milk

prices are high.

The 5.85% rise was mainly driven by huge increases of between 15% and 19% in autumn and June.

“A good season and high milk price combined to give farmers incentive and opportunity to increase their milk production,” Mr Smith said.

DairyTas is predicting 10-15% growth in 2014-15, adding up to 100 million litres more to the state’s milk flow and closing in on an industry target of producing 350 million litres extra between 2012 and 2018.

DairyTas Chairperson Cheryl McCartie said the season had started slowly but had been boosted by an awesome autumn.

“Our autumn production was up 15-20%. We had a slow start to spring and cows didn’t peak as well as we’d hoped but they held production longer,” Mrs McCartie said.

“When you’re up nearly

Cheryl McCartie

20% for three months of the season, it doesn’t take long to turn things around.”

Ms McCartie said the good milk price had been an extra incentive for farmers that allowed them to capitalise on the good seasonal conditions.

“Because of the milk price, farmers were able to make key decisions around extra feed and pasture renovation and that added to the on-farm productivity. It sets the cows up well for holding production and being in good condition coming into this season,” she said.

“I know quite a few farmers who bought 20% more hay than normal because the milk price allowed for that.”

Ms McCartie said farmers had benefitted

from lessons learnt in previous years in managing potential feed shortage risks and making early winter feed purchases.

“There’s also been more focus on homegrown feed and hopefully we can see that translate

to their bottom line.”

Ms McCartie said the industry was reasonably confident of achieving 10-15% growth in the coming year.

“The talk around the industry is that with a few more conversions coming on this season and existing

dairy farmers reinvesting in their farms on the back of a good milk price, we’re pretty optimistic we’ll get 10-15% more in 2014-15.”

Ms McCartie added that while some farmers were still consolidating debt, Tasmanian dairy was well

on the way to reaching its 2018 industry target.

“Our focus is on new farms and growing farms sustainably so we can show people that we’re looking after animals, people and the environment. It’s all looking positive,” she added.

Dairy NewS AUSTRALIA august 2014

news - milk production // 7

Weather, prices hurt Qld QUEENSLAND FARMERS fear the state’s struggling milk output will continue to decline unless they get positive signals from the market.

The state has again experienced the biggest production drop in Australia, a 5.34% decline compounding a fall of 5.6% the previous year.

Low prices and bad weather continue to cause negativity in the state.

Queensland Dairy Organisation President Brian Tessmann said it was frustrating and abundantly clear that Queensland needs more milk to cater for its own needs “but the market is failing to provide a response that adequately stimulates an increase in production”.

Mr Tessmann said the clearest signal that farmers can receive is with the farmgate price.

Mr Tessmann said the state had seen some small response in recent months with a lift in price, but this followed three years of depressed prices and huge costs incurred with floods, cyclone, and drought.

“We have lost more than 100 farmers in just over three years so it is clear there is a long way to go for the trend to

turn around,” he said.

While welcome, Mr Tessmann said the recent price rises were not enough alone to completely address the shortfall.

“Farmers will be looking for an even stronger indication in the future of the market’s value for fresh Queensland milk.

“Queensland dairy farmers could also do with a couple of years of good seasons free of damaging floods and drought to improve their confidence on the back of recent price movements,” he said.

Lockyer Valley farmer Luke Stock said the $1 litre supermarket price war, Queensland’s reliance on the domestic milk market and poor weather conditions were the major factors contributing to the fall.

Mr Stock said consumers can’t be blamed for choosing cheaper generic labelled milk. “However, I don’t think they realise when they make that cheaper option they are putting Queensland farmers out of business.

Maybe if they had a better knowledge of what their actions are implementing they may make a different choice.”

Mr Stock said the general feeling was that the price being paid to farmers needs to rise by 10-12 cents for farming to remain viable and return a profit.

The state has also been hit hard by wildly fluctuating weather.

“There wouldn’t be a dairy farmer in Queensland that hasn’t been affected by floods, cyclones or drought in the past three years,” Mr Stock said. “Being able to combat natural disasters all comes back to being able to best manage the risk associated within our own farms.”

However, Mr Stock could see some promising signs.

“The breakthrough that Norco has had with the successful trial shipment of fresh milk to China within seven days, down from the typical 14-21 days, could provide another market place for Queensland milk where the product is actually treated with the respect it deserves, not downgraded as it is

Luke and Rebekah Stock with their family.

in our own marketplace by the major supermarkets,” he said.

‘Mr Stock said although there was a lot of negativity, the northern industry

had faced challenging times before. “It will always be our ability to produce and provide a quality product that will see us pull through,” he said.

Decline can be stopped SOUTH AUSTRALIA

had the second biggest fall (3.79%) but DairySA chairman and Mt Gambier district farmer James Mann believes that trend can be reversed.

Mr Mann attributed about 40% of the loss to one farm going into receivership and said that volume in general was down as a flow on

from a poor 2013 that left cows in lesser condition and saw more heifers exported to support cash flow.

“I’m quietly confident that we’ll recover parts of that. I understand we’re up a bit at the moment,” he said.

“If seasonal and economic conditions become more favourable, people will be able to

resume their former programs. Sustained prices and margins will deliver more growth.”

Mr Mann said there was less need in the past 12 months to sell heifers for export which should leave more numbers in the system this year.

“There’s a bit more confidence around. I hope this year’s milk

price ends up so people have at least two successive reasonably successful years. If that happens then confidence will be okay.”

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Dairy News AUSTRALIA august 2014

8 // news

Blue sky after perfect storm THIS TIME last year

Barry and Linda Morgan were pondering their future in the dairy industry.

The farmers from near Cobden in south-west Victoria were battling what they described as their toughest season in 24 years on a dairy farm.

The ‘perfect storm’ of conditions – low milk prices, a prolonged dry spell, poor grass growth and high feed and input costs – had them planning to exit the industry.

A year later things have turned around.

The milk price is up, the weather has been near enough to perfect, production is up and they’ve made a decent profit.

Linda Morgan says it took some time to turn around from the dire situation, but their persistence has paid off.

“We really did think we would chuck it in,” Mrs Morgan said. “It took some time to recover but we got there.

“When we started getting good milk prices we had to pay off the creditors for the hay and grain we’d been feeding, but we managed to get all that done and ended the year with a profit, which was amazing.”

Mrs Morgan said their priority during the lean period was to protect the cows’ health, which led to high imported feed costs.

However, it was hard to maintain the herd in peak condition and some ramifications of the bad

Linda Morgan

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now… there seem to start to 2013 continue to be more options. I still be felt. get annoyed that we The farm’s calving don’t know our milk pattern has expanded prices when we start the to counteract the lesser financial year. It’s hard condition of the herd at to plan when you don’t joining and they finished know what you’re going with more empty cows to get.” than normal.

Now the Morgans are But the Morgans on the front foot. persisted. “We pulled The cows are healthier, our head in and got down the grass is growing, to the job,” Mrs Morgan production said. is on the rise The “I think if and their turnaround the season confidence was weather-wise has prompted returned. by a mixture is perfect, a The farm of price and good milk price conditions. is just a bonus.” is now 2000 litres per “I think if – Linda Morgan day up on the season last year and weatherMrs Morgan is confident wise is perfect, a good milk price is just a bonus,” that upward trend can continue.

Mrs Morgan said.

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LIA AUGUST 2013

6 // NEWS

Casualties from a perf ect storm

A perfect storm last season of low milk prices, poor conditions and created heartache for high input costs many farmers. Cobden farmers Barry and Linda story to Rick Bayne.

Morgan tell their THREE YEARS ago The new farmer finance stage that it just wears Barry and Linda Morgan package might provide you down…it’s just were on top of the world. some help through depressing,” Linda added.

The dairy farmers from renegotiated loans but the Last September things near Cobden in southMorgans are not sure if it were west Victoria had been looking pretty good. will be enough or worth The Morgans had booked named 2010 Sharefarmers the effort of battling a holiday to Egypt (which of the Year in the Great through the difficult they later tried to cancel South West Dairy Awards application process. but couldn’t get a refund and had won third prize The Morgans so went on borrowed in a state-wide award for have noticed a slight money) and were tipping creating wealth. improvement over the an okay season, despite The irony of the third past month with the new the low milk prices. placing in the Genetics milk price, good rain and Then the rain stopped.

Australia breeding award the lower Aussie dollar.

“They say it wasn’t a is not lost on them today But they don’t know drought but they say it was as they ponder their if it’s enough to see them the driest seven months future in the industry after through. on record…how does that enduring the toughest “We’re going to talk figure?” Barry asks. season in their 24 years on to our accountant about They realised the a dairy farm. whether we can service situation was “going Like many dairy the debt, sell the cows or pear-shaped” in January farmers in south-west have someone else come and started buying hay Victoria they are battling in and run the farm,” Barry Barry and Linda Morgan supplies and trying to overcome a ‘perfect said. different crops. storm’ of conditions – low “We entered the dairy The Morgans planted milk prices, a prowlonged The lack of and cost industry by choice and four acres of turnips dry spell, poor grass of quality feed left the we’d sooner leave now but lost the lot after one growth and high feed and Morgans forking out huge while we still have the stinking hot day. input costs. money while struggling choice. It’s got to the Millet, oats and rape to maintain their cows in crops were tried but with barely average condition . minimal growth.

They fear the lack The hay and silage cut of quality feed has was down at least 20%, compounded the problem costs were escalating and by affecting the health and income stagnating. production of their mainly “Chopper prices were Friesian herd. disastrous. We were At their lowest point getting 63 to 75 cents earlier in the year they whereas last year was were down 3000 litres $1.20. It was the same a day on their 2012 The Morgans’ herd. for bullocks and bobby production levels. By the calves,” Linda said. end of July that had picked

Dairy News Australia, August 2013.

and give them a second blew in the dairy in March, chance, try to pamper causing a fire which them through, but we forced them to milk on a can’t do that now.” neighbouring property for In May to July the a few days. farm spent $52,000 to Barry had come from purchase 206 tonne of hay. a beef farm in Gippsland “We’ve never had to do and both maintain that before in the 20 years interests outside of we’ve been here. We only dairy that are helping fed what we had to but to keep the farm afloat. it was still a huge cost,” Barry invested in a beef Linda said. herd a few years ago and The poor season has Linda works part-time had ramifications across as a school laboratory the region. assistant.

“Because there’s no “We’ve had to sell money around you go beef this year to prop up for the cheap A.I. straws, the dairy farm but we don’t do the work on the shouldn’t have to do that,” tracks…it flows on through Barry added. the whole community,” Now they ponder a Linda added. future that might not The Morgans have involve dairying, the share-farmed with industry they committed Gippsland-based owner to all those years ago for Barry McGrath for the past its lifestyle and appeal as a 19 years. source of regular income.

“Nineteen years They still like the idea working for the one bloke of share farming but none – that’s not bad so we of their three children are must have been doing committed to the industry. something right,” Barry “If you’re building said. an asset during a tough “We have a good season that’s all right but relationship. There is a if the milk price goes up lot of trust. He leaves us everything else goes up to run it and we might not and so we’re no better see him for six weeks.” off,” Barry said.

The farm invested “At the same time it’s in a new 44 Rotary dairy hard for young people to two years ago which get into the industry.” led to greatly improved Although uncertain productivity. “That was about their futures, the the best thing we ever did.

Morgans say the dairy We probably save two or industry has been good to three hours every day,” them until recent times.

Linda said.

“The thing we have to However, adding to look at is what else do we their woes this year a fuse do?” Linda ponders.

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up to a 1000 litre deficit but that still counteracted the increase in milk price.

Last year they milked about 400 cows on their 226ha property but look to reduce that to around 350 or 360 this year.

“There’s no incentive to keep them. We’ve had to cut costs and try to build a better herd by keeping the better producers and weeding out those with health problems and those not producing as much,” Barry said.

“We used to persevere

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Dairy NewS AUSTRALIA august 2014

news // 9

WA farmers demand higher milk prices DAIRY FARMERS at last month’s WAFarmers Annual Dairy Conference united to call for more equitable and sustainable farmgate milk prices.

Delegates unanimously determined to call on processors to raise the price paid per litre to farmers as demand outstripped supply.

“At the conference, we were presented with evidence showing the demand for drinking milk had outstripped production for the first time earlier this year,” WAFarmers Dairy Council president Phil Depiazzi said.

“Additionally, the farm gate price in WA does not match up to that in other states which supply similar markets to ours.

“For example, producers in northern New South Wales and Queensland are paid more than 55 cents per litre, well above that paid to WA producers.”

Mr Depiazzi said these conditions, paired with the outcomes of the Sustainable Milk Price Report (by the Collective Bargaining Group and WAFarmers Dairy Council) showing 55 cents per litre was an appropriate benchmark,

made it imperative for processors to lift their game, and their prices, in order to ensure present and future supply.

“It is in the best interests of processors to come to the table with more competitive prices to secure the future viability and sustainability of WA’s dairy industry,” he said.

The heads of Brownes, Harvey Fresh (which was taken over by Parmalat in April) and Lion took part in a panel discussion as part of the conference.

Brownes Dairy managing director, Ben Purcell, told ABC Radio the three

Nicole and Rodney May with their certificate for being in the Top 100 dairy farmers for the 2014 Milk Quality Awards.

processors had increased prices back to farmers by $25 million a year over the past three years.

Brownes hasn’t lifted its farmgate prices this year.

“The difference for this year, rather than make a commitment up front, we’ve said we’re going to put prices up in the market to our customers, and see to what extent we can get prices out of the market, and based on affordability make an assessment later on on what that means to farmgate prices.”

A conference delegate asked why Queensland farmers receive more per litre per milk than farmers in WA. Harvey Fresh general manager, Paul Lorimer, said the farmgate price needs to move but needs to move in a sustainable format.

“To make one big jump would be irresponsible for all parties in relation to where we need to be. It needs to move in a controlled manner.”

Lion managing director, Peter West, who joined Lion six months

Paul Lorimer of Harvey Fresh, Ben Purcell of Brownes and Peter West of Lion.

ago, told ABC Radio the economic return for both farmers and processors isn’t where it should be.

“Essentially, I don’t believe Australians do pay the right price for dairy or milk.

“For the amount of work and effort that goes into that, it’s undoubtable they should pay more.”

Mr West said valueadded products is the best

bet to increase returns for farmers.

“We’re very clear that some categories offer greater growth and some don’t achieve the same level.

“The areas where we see strong very growth is yoghurt, speciality cheese and flavoured milk.

“They are three categories where we see anywhere between 5%-7%

growth and we need to actively market and bring innovation into those categories and drive that growth.”

Mr Depiazzi was reelected Dairy Council president at the annual general meeting held with the conference. Michael Partridge and Paul Ieraci were re-elected as senior vice-president and vicepresident respectively.

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Dairy News AUSTRALIA august 2014

10 // news

Council pushes dairy’s worth rick bayne

DAIRYING IS worth a lot more to Gippsland’s Baw Baw Shire in Victoria than the $222 million worth of manufacturing it generates.

Dairying is an essential part of the landscape and lifestyle of the Baw Baw region and the shire council goes out of its way – including overseas trade missions - to promote and support the industry.

The shire’s connection to dairy serves as a prototype for municipal-industry interaction.

The shire actively promotes all agriculture enterprises, ranging from trout fishing to apple

growing, but it’s dairy that takes centre stage.

CEO Helen Anstis described Baw Baw as a growing municipality and “we want to make sure we’re creating local employment opportunities”.

“We see our agribusinesses as a real opportunity to create jobs and growing dairy is a really integral part of that,” Ms Anstis said.

The shire has actively participated in trade missions to the Middle East and in June 2014 to South East Asia.

Dairy is the shire’s biggest agricultural industry.

Apart from the $222 million manufacturing contribution, it directly creates

about 1000 local jobs, supports a vibrant service industry, and is also used in tourism promotions.

Supporting a strong local farming community, Longwarry Food Park is already exporting into South East Asia, Fonterra’s largest milk processing facility in Australia is at Darnum, and there is a growing niche cheese making industry in the shire.

“We want to be able to support those businesses to grow so they create local employment opportunities,” Ms Anstis said.

“We have fantastic soil and terrific farming communities that provide quality product to those manufacturers.”

The trade missions were primarily aimed at raising the region’s profile for investment and specifically promoted high protein milk powders from Darnum and the Longwarry Food Park business model. This is based around long-life products, which are a growing market in South East Asia, and also cheeses, which again are a burgeoning market in South East Asia.

“We wanted to link to the lean and green and perfectly pristine environment we have in Baw Baw,” Ms Anstis said.

The missions also capitalised on a recent seven chefs tour in Gippsland focused on cheese and agricultural products.

The Baw Baw Shire offices in Warragul.

Ms Anstis said the local community and the shire appreciated the important role played by dairy.

Agricultural land is protected by the shire. Even though Baw Baw is growing, the shire is determined to protect prime

agricultural land and has a settlement planning ensuring residential growth is restricted to where towns already exist and doesn’t interfere with prime agricultural use in greenfields sites.

“It is important we protect that agricultural land,” Ms Anstis said.

The shire also main-

tains close links with dairy farmers.

“We have a number of councillors who are dairy farmers so they are a conduit to the dairy industry,” Ms Anstis said. “We work closely with the manufactures and we’ve recently developed a business advisory board and invited a farmer on to that board.”

Helen Anstis

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news // 11

German co-op joins GDT pam tipa

EUROPEAN DAIRY

companies joining the Global Dairy Trade (GDT) auction reflects that Europe is an expanding market focusing more on exports, says GDT director Paul Grave.

This is accelerating with CAP (EU common agricultural policy) reform and farmers’ quotas lifting in 2015. German cooperative Molkerei Ammerland is to become the third European seller on GDT. The move is welcome as it further cements the online dairy auction as the key platform for international dairy trade, says Mr Grave.

“It deepens the liquidity of the market – the number of people and the volume going through. It improves price transparency and recognises the growing importance of

GDT in international trade in price setting.”

The other Europeans in GDT are Arla, Denmark, one of the first to join, and Euroserin, France. Molkerei Ammerland will join an overall existing seven sellers from the beginning of September, bringing sweet whey powder to the auction for the first time.

Whey powder is new to the GDT – it comes out of the cheesemaking process which is bigger in Europe than Australia and New Zealand.

“It’s a non-Fonterra product so it makes the market more credible again.”

Molkerei Ammerland, one of Europe’s leading dairy cooperatives, gathers milk from 2000 farmers in northwest Germany, and processes 1.5b kg of milk for sale to 50 countries worldwide. The co-op makes cheeses, butter,

Fonterra retains global ranking FONTERRA HAS maintained fourth place in Rabobank’s top 20 dairy companies.

Chinese giants Yili and Mengnui outperformed their peers with 14% and 20% sales growth respectively.

Otherwise, the largest dairy companies are “reasonably entrenched,” Rabobank says. Switzerland’s Nestle retains number-one spot followed by French companies Danone and Lactalis. Nestle had a 2013 turnover of US$28.3b, Danone US$20.2b, Lactalis US$19.4b and Fonterra US$15.3b.

Yili, with a turnover of US$7.6b, entered the top 10 for the first time, jumping to 10th spot from 12th last year on the back of market share gains, price increases, product mix upgrades, and/or acquisition. Mengniu pushed up to 14th place boosted by the acquisition of Yashili.

Dairy Farmers of America (6th place) saw a 22% expansion in dairy sales on the back of firm milk prices, and mergers and acquisitions.

Canada’s Saputo continues its march up the list to eighth place, previously ninth, partly due to several acquisitions including Warrnambool Cheese and Butter.

Rabobank says the last 18 months have seen most of the players battle challenging conditions with weak economies and supply constraints undermining sales growth in key markets.

“Against this backdrop, mergers and acquisitions have become an attractive route to growth and profitability,” Rabobank says.

“But with billion dollar deals increasingly hard to come by, dairy giants will need to acquire or tie up with more companies to sustain the same rates of growth in the future. Those adept at acquiring and embracing new businesses will remain well positioned to survive and thrive.”

Sales volumes in most OECD dairy markets have been stagnant with better growth in emerging markets, but these markets have also slowed and are generally harder to access.

whey powders, milk powders and fresh dairy products, and has 125 years experience.

Grave says GDT wants to add more sellers and everyone joins for different reasons.

“It is a great window into the global marketplace, it enables a lot of

them to transact and grow their market presence and grow their visibility in a way they haven’t been able to do before – forge their own way into the marketplace.”

GDT enables participants to do business for themselves rather than use traders or third par-

ties. “It is a good price reference so it enables them to determine what the market price is on the day and have a more independent, trusted, transparent reference price.”

Over the last year $5b was traded through the platform and one million metric tonnes, which

is huge, says Grave. With eight sellers from seven countries and 650 buyers from 90 different countries, it has gained huge momentum since launching in 2008 by Fonterra with one product, one seller and 100,000 t of product.

The introduction

of sweet whey powder extends GDT’s offerings to nine product groups.

Molkerei Ammerland chief executive Ralf Hinrichs says “exports already make up 49% of our sales, and will become increasingly important as we increase our production capacity.”

Dairy News AUSTRALIA august 2014

12 // OPINION Ruminating

EDITORIAL

Raise your voice for the China FTA

milking it...

A1 or A2? Ah, forget it

Marketing teams behind domestic milk brands just don’t see the big picture.

Lion recently relabelled its Pura milk brand with the slogan “naturally contains A2 protein” in a bid to capitalise on the “health benefits” of the A2 protein promoted over the years by the A2 Milk company.

The A2 Milk company, naturally enough, hit back, saying only its milk contains 100% A2 protein.

The A2 Milk company’s promotion of the A2 protein has seen it record a steady rise in market share over the years, and we have a feeling Lion’s new label will help its sales too.

However, it just creates confusion with consumers, who head to the supermarket and see “good” milk and “less healthy” milk.

Is milk not labelled with A2 then left on the shelf?

How is that good for the industry?

It’s a repeat of the marketing of “permeate free”. Consumers were left with the idea that milk contained an unhealthy additive, which must have been detrimental to sales and milk’s image.

If it ain’t broke

New US biotech start-up, Muufri, wants to produce milk, but without using cows. It would like your donations to do so.

Apparently it’s a fairly simple mixture: six key proteins for structure and function and eight key fatty acids for flavour and richness and they will make milk that tastes and functions just like animalproduced milk.

They’re going to have to excuse our scepticism.

Laboratory milk tasting as good as that produced naturally? Come on.

Leaving aside their rather dubious claim that 75% of the world’s population have some sort of lactose intolerance, if people want lactose-free milk, they should use the money Muufri wants donated and buy a carton of Murray Goulburn’s lactose-free Liddells.

On a completely One last thing Speaking of Fonterra, it had unrelated to revise its original 2014-15 matter forecast price of NZ$7kg/ Fonterra is setting up a model farm in Japan, which will direct technical guidance toward those farmers wanting to improve their competitiveness.

New Zealand is also accepting Japanese farmers into its specialised dairy school to study cattleraising at its expense.

Some New Zealand farmers have asked why their co-op is spending money improving the efficiency of their “competitors”.

Excuse us for being cynical, but it wouldn’t have anything to do with a certain Trans-Pacific Partnership agreement that is currently being negotiated, would it?

Japanese farmers are in no mood to open their borders. Looks like Fonterra is happy to play the long game.

Advertising Chris Dingle chris@dairynewsaustralia.com.au

MS back to NZ$6kg late last month.

It was quite the shock for NZ dairy farmers, who received $8.40kg/MS in the past financial year due to overwhelming demand from China.

Hindsight has 20/20 vision, but hard to believe that $7/kg it offered for its fixed price pilot scheme this season was undersubscribed.

The guaranteed milkprice scheme meant farmers could choose to lock in up to 75% of their milk supply at $7/kg MS.

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Our 50th issue On the release of our 50th issue, and now in our fifth year, we give our sincere thanks to all our readers who have embraced Dairy News Australia with such enthusiasm.

We were told quite clearly by farmers before we launched our first issue that the dairy industry deserved its own newspaper.

We agreed – and we’ve been overwhelmed by the support we’ve received from farmers since.

So thank you everyone, and here’s to the next 50.

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

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DAIRY FARMERS across the country need to make their support of the proposed Free Trade Agreement with China clear.

We have a once-in-a-generation opportunity to secure a deal that will provide significantly greater access to an enormous market, largely untapped by Australia.

Federal Trade Minister Andrew Robb has said he will secure a ‘New Zealand plus’ dairy outcome with China.

That’s a big call – NZ’s access to China is the envy of the world.

The Victorian Farmers Federation wants all exports to China to be tariff-free by 2019.

That would provide enormous opportunities.

What we don’t want to see is a replication of the result with Japan, where very little was achieved.

To ensure those at the pointy end of negotiations fully comprehend how important the opening of China’s borders are, we encourage all farmers to contact their state farm group, the Australian Dairy Farmers and, most importantly, their local Federal member to state the case.

The Federal Government is under pressure and a successful result in this agreement would be a boost for them, as much as the dairy industry.

Don’t sit on the fence – write an email, take to social media, pick up the phone or call into the local member’s office when you’re next in town.

Make them realise how important this result is.

If enough farmers take the time to express their opinion, the noise generated will be heard all the way at the top.

The squeaky wheel gets the grease. Let’s make this an issue the Government simply can’t ignore.

Published by RNG Publishing Ltd Printed by Shepperton News

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 august 2014

opinion // 13

A city-centric view leaves our food security under serious threat I IMAGINE that if you

asked Australians where they believed the majority of the total value of the nation’s goods and services was produced most would say the mines in WA and Queensland or the vast farmlands of this Big Country.

Well, they would be wrong. It’s in the cities.

According to a report just released by the independent think tank, the Grattan Institute, 80% of the value of all goods and services produced in Australia is generated on just 0.2% of the nation’s landmass, mostly in the cities.

“Today, cities are the engines of economic prosperity,” according to the researchers.

This may look like a statement of the bleeding obvious. However, it is not that straightforward.

The Grattan Institute defines economic activity as the dollar value of goods and services produced by workers within a particular area. It thus comes as no surprise to discover that economic activity is concentrated most heavily in the central business districts and inner areas of large cities.

According to the report, the Sydney and Melbourne CBDs generated $118 billion in 2011/12, almost 10% of all eco-

nomic activity in Australia, and triple the contribution of the entire agriculture sector. And they did that from a combined total area of just 7.1 square kilometres.

The Sydney CBD alone produced $64.1 billion worth of goods and services: about $100 for every hour worked there The businesses in these areas provide intellectual and highly specialised services such as funds management, insurance, design, engineering and international education.

In WA, the brain power within the Perth CBD spreads itself across all sectors, notably in manufacturing and mining with a strong representation of accountants, administrators, geologists and specialist engineers.

However, it could be argued that, while these inner city businesses have been churning out the invoices and creating frequent flyer points for their customers as they pay, they don’t actually put food on the table, in the literal sense of the phrase.

What do these people eat and where does it come from?

The Grattan Institute says that, a century ago, one in three workers was employed in primary industry, and almost half

iDAIRY®

opinion jan davis of the population lived on rural properties or in towns of less than 3000 people. By 1960, manufacturing had grown to make up almost 30% of GDP and employed one in four Australians, with a big presence in suburban areas.

“A great reshaping of Australia’s economic geography is underway,” it says.

“The nation has moved from prosperity coming from regional jobs in primary industry a century ago, to suburban jobs in manufacturing after World War II, to city centre jobs in knowledge-intensive businesses today.”

The particular problem that the think tank is highlighting is the increasing urbanisation of Australia, the spread of the outer suburbs, away from these very concentrated areas of most feverish economic wealth generation “For the sake of the economy and the fair go, we have to find ways either to enable more workers to

live closer to these centres, or to reach them more quickly by road and public transport.”

Which rather glosses over the rather basic question – what do people eat and where does it come from?

Australian farmers produce about $40 billion worth of food each year and export about $30 billion worth. The food industry accounts for 1.68 million people, or 15% of total employment.

But we’re up against it.

In 2010, a Senate select committee found there is intense competition for land producing food from housing development, hobby farms, forestry, biofuels and mining, “making the price of agricultural land so high in some areas that it is not economic to grow food” It said: “Australian governments need to give serious consideration to mechanisms for protecting our most fertile agricultural land from alternative uses in the interests of our long term productive capacity and food security.”

There are lessons for all of us in this. In the long run, everyone needs to eat.

Hard-nosed economists would have us disregard this truth. They believe the market will solve every-

thing and, if we’ve got enough money, we’ll be able to buy whatever food we want from producers in other countries.

Good luck with that.

When it comes down to survival, history shows

people will fight to protect their own food supply. As recently as 2006, the pasta riots in Italy proved nothing has changed. Where will that leave us when we have allowed Australian farmers to be driven out of

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14 // markets

Does Australia want to compete?

RECENTLY THE Business Council of Australia released a report it commissioned from McKinsey & Co - Compete to Prosper: Improving Australia’s global competitiveness.

It was fascinating reading – taking a helicopter view of the Australian economy and the global competitiveness of industry sectors.

Most of us probably regard Australia as a trading nation, but the McKinsey analysis highlights the fact that our economy remains quite inwardly focussed – while we are the world’s 12th largest economy, we rank 21st

“This industry needs to get much bigger to stay relevant and capture higher unit value.”

fresh agenda jo bills in terms of global trade – well behind some that you might assume we should be ahead of.

As part of the study, the McKinsey numbercrunchers developed a Relative Competitiveness Score, applied it to all sectors of the Australian

economy and found that only one sector – agriculture – stood out as truly competitive.

The analysis then honed in on our own dairy industry and asked the reader to “Imagine this: an additional $6 billion in exports: by replicating NZ’s success as traded milk demand grows 60% by 2025”.

This is where a lot of farmers turn off at being

compared to the Kiwis, but the key areas the McKinsey folk examine here is the different structures of the respective processing sectors and the entire value chain rather than just farms.

The report urges “purposeful market design” and “thinking strategically the whole way along the supply chain”.

It points to New Zealand’s deliberate strategy to allow its industry to achieve the scale to compete globally.

In Australia, we haven’t pondered this too much as an industry, nor do we have governments – of either political persuasion – that pay much more than lip service to the challenge of achieving a globally competitive food industry.

Instead we have policies on science and innovation, labour, trade policy, foreign investment and competition that pick at the edge and are often at cross-purposes.

The McKinsey analysis points to Australia’s Competition Policy itself as needing to evolve.

“When economies of scale are required to compete globally, Australia’s relatively small market size can be an impediment, especially if merger and acquisition rules prevent the consolidation required to match international rivals.”

It’s not just the Kiwis either – in Europe and the

US we have seen mergers and acquisitions aplenty, as companies position themselves to be globally competitive players.

The latest Rabobank ranking of dairy companies paints the picture clearly, Australia’s competitors and customers – dwarf our companies, the largest of which is well outside the top 20.

As an industry we still seem to be in two minds.

Some believe the more companies that compete for milk supply, the better, and so welcome more, necessarily smaller players. More players are thought to be good for bidding up prices – they might offer options, but in overall terms the cost of doing business gets higher.

Others want to see the consolidation they believe will allow Australia to remain globally relevant and access export markets of choice. It isn’t about lowest-cost – we have long ago lost that mantle – but it can be about reputation for supply chain integrity and having more scope to supply growing customer requirements.

We can’t have it both ways, but one thing is for

certain – this industry needs to get much bigger to stay relevant and capture higher unit value.

If we don’t grow with our customers, we can’t capture higher value.

At present any moves to further significantly consolidate within the industry will be subject to competition scrutiny, which applies market tests at a regional level for milk supply and sale of finished product.

In responding to the BCA-McKinsey report Rod Sims, the head honcho of the ACCC did not acknowledge the need for anything to change in the Commission’s approach – instead he raised concerns over governments “picking winners”.

The reception to the McKinsey report has been mixed, but it does raise some interesting issues with respect to our own industry in the broader context of the Australian economy and global competitiveness.

What is our vision, where and how do we want to compete, what do we need to do to win?

As an industry this seems a worthwhile con-

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versation to have as the spotlight is on the “opportunities” offered by global demand for our healthy, safe, high quality products delivered through agile business models and relationships – while many farmers are still very much feeling the “challenge” of the present and future.

We can’t be another New Zealand, nor do we need to be, but we do need to change our attitude to be more effective in attracting capital and Government collaboration.

Making the business case to government for the right policy settings that allow the industry to innovate and prosper in the long term is just one part of the puzzle.

However, to do this effectively the industry needs to have a view of the future it is looking to shape – “the vision thing” for Australian dairy has never been more important.

• Jo Bills is a director of Melbourne-based firm Freshagenda, a Melbourne-based consulting and analysis firm that provides food value chain insights and solutions to a wide range of clients from farm to retail.

Dairy NewS AUSTRALIA august 2014

markets // 15

China’s withdrawal hurts NZ Export demand remains strong Dairy NewS aUSTraLia june, 2012

agribusiness // 17

China is also Austracents/litre in March (AUD 41c/L) to 28 With season 2011/12 only a few incremental change in milk production lia’s largest (year-on-year) dairy market prices have weeks beenfrom trackEuro cents/litre (AUD 36c/L) in April. ending, attention is now Profit margins are under pressure in the focusedsince on 2012/13 milk prices as farmby volume, but only ing downwards US, and in NZ Fonterra has announced ers consider strategies for the coming accounts for 15% of our mid-February, when the final payout for the 2011/12 season year. In some domestically-focused has been cut from NZ$6.75-$6.85/kg MS regions, renegotiated contracts incorexports, narrowly ahead the GlobalDairyTrade gLobaL impacT to NZ$6.45-$6.55/kg MS (AUD$4.96porating lower prices and reduced ‘tier JohN DropperT of Japan at 14%.

(GDT) auction weighted $5.04). one’ access are undermining farmer Effectively, global dairy markets are confidence and supply stability. For global impact These ‘market-level’ average price peaked at rebalancing. Lower prices will both private label Droppert contracts and promany farmers in export-oriented Shifts inJohn slow production growth and stimulate differences mean that US$5042/t. regions, a lower price outlook relative to cessor rationalisation have seen milk demand, and as this occurs we will ultithe current season not only adds to the companies adjust their intake requirealthough both the AusAs at mid-July, the 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 ing various demands of aforms, highly pressuredof retail contradict the positive medium term in tralian and New ZeaNew Zealand’s dairy its milk average wastoat US$3309/t rate at which milk production overseas outlook of Asia-driven dairy demand marketplace. Lower contract prices and land dairy industries exports by volume are in for Australia the figure is – an averagegrowth. fall of 34% slows in response to lower prices, the a lack of alternative supply opportuniin south-east Asia the Middle impact of the current financial worries flows. of 2012Whole milk production present challenges in a marketthe with form Dairy Australia’s outlooktoties dependent on,andand Milk in the USarethose closer 40%. across all products.

Suchindicative 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 to, export marPowder and awhilst earlyexposed An market,the underlying domesconspicuous numbers, nomic growth rates that support China’s economic growth, and the value April(WMP), (leap year adjusted), these challenges, published in the recent Dairy 2012: Sit-open uation and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. How- of the Australian dollar. kets the experience varies. further 16% are Skim Milk coupled with pricing coupled with Fonterra’s Demand for exported dairy prodopening price range of $4.05-$4.40/kg ita dairy consumption and a growing finished the March 2012 quota year up ever, the surge in supply has outpaced While New Zealand’s tying ucts remains a positive and will conagreements linked to a degree ofPowder growth in the market. on the previous year. New Zealand demand providing cer- 2.3%(SMP); reduction inMSits andforecast a full year average price 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 industry has captured a international benchmarks nearly 60% of New ZeaFarmgate Milk Price for 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 pickets, with commodity prices retreat- with changes in diet and with increasing influence given 95% financial crisisof and subsequent land’s com- market ture andfarmersummarises the many factors up share of the benexport returns toof NZ milkgreater means to 75% Ausits New Zealand 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 efits when international milk powder markets (see tralia’s milk is directly shareholders have caused across the Tasman. reduction in Fonterra’s ers,global reinforcing theLocally, need population growth. uation being that of re-balancing in the export-oriented regions have seen solid ing solid production growth, but a sig- prices are down some 30% from their with marketthe is supported by a 2011 peaks, whilst powder prices have the supply gap in Brazil preventsgrowth global growth (see chart) -graph with nificant dairy supply chain. markets – particuright). influenced bysupply global some level of consternaFarmgate Milk Price is not • John Droppert is industodomestic approach current 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 per– arebeen booming, largest dairy larly markets, beHemisphere it actually tion here inproducing Australia. necessarily an experience try analyst with Dairy Ausseason with caution. consumption.

Whilst the dairy haveChina subsequently reduced in capita ing South America. amongst those expand-Australia’s drinking milk, many farmers ern is currently a challenging place most exporting regions.domesThe average market Despite wider – economic output as their margins increased. face ais re-balancing market inexported the form ingor larger export by volume cheeseuncer-Australia’s simply comWhile GDT an that will translate directly tralia.

However, the 15% 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 baltic market and more even – accounts for only 22% peting with imports. important market indicaand reduced access to ‘tier one’ supply. ditions have further enhanced milk as importing countries like China and for example, dropped 12% from 32 Euro ance will ultimately return. distribution of internaof our total shipments, In years like 2013 tor, and farmgate returns with SMP the second big- tional destinations and in Australia are ultimately where commodity prices products helps to cushion gest at 16%. While cheese are high, the domesa product of movements pricing tends to track that the downside. tic market is regarded by on world markets, some The differences in of powders, it does tend as a ‘handbrake’ on caution must be applied ASEAN-Australia-New austraLian DairY, some Zealand FTA (AANZFTA). rice and wine exporters to pass-through exposure are noteworto be more stable from of returns, in interpreting these “Protectionist sentiMalaysia are the biggest thy in the current market month to month. but typically longer events in anwinners Australian mentwith over agricultural in a free trade goods is rife and grow(FTA) signed situation, where ChiAustralia’s mix of desterm agreements and relcontext. agreement ing across the globe, so to provide portion pack between the two counaustraLian FooD nese demand is largely tination markets is also atively ‘sticky’ pricing it The differences in this context it is pleas(200-330ml) configuratries last month. company Freedom Foods ing Australia has managed tion for beverage prodThe deal, signed after Group Ltd is to build a non-existent due new to milk large more evenly distributed. provides a useful hedge between Australian and to forge an agreement seven years of negotiaprocessing plant ucts. with Malaysia that has The NSW location will tions, allows a liberalised WMP inventories.to cash in on growing As a result of concurrent prices are falling.

New Zealand exposure to when dealt with some sensiprovide access to the most licensing arrangement demand in Asia.

Indications suggest NZ supply and Chinese In addition to enjoying world markets are worth tive agricultural issues for Australian liquid milk The plant, to be built in sustainable and economic effectivelybalance covered by between and allows Australia, will be source of milk. Pactum has that China’s milksoutheast producdemand growth, coupled revisiting toexporters illustrate this. anotgreater AANZFTA,” says Fraser. strong links to the Austraaccess for higher value the first Australian greention remains very strong; with the NZ-China Free domestic and export marThe most obvious difSealing the deal: Malaysian trade minister Mustapha Mohamed “While under the retail products. fields expansion in UHT in lian dairy industry and will with Australian counterpart Craig Emerson after signing the deal.

AANZFTA agreement dairy expand its arrangements It guarantees Aus10 years. slowing stock drawdown Trade Agreement signed kets, Australia’s ference between Austramost of Australian agriwith dairy farmers for tralian wine exporters Freedom’s wholly and in some cases leadin 2009, almost one third industry also produces a lia and NewtheZealand is but also through technical Despite the compleers through streamlining culture’s key interests supply of milk. The new best tariff treatment owned subsidiary Pactum or so called ‘behind the tion of this agreement, rules-of-origin dechad tariffs bound at zero, plant will increase scope Australia will run the ing to import shipments of New Zealand dairy ‘basket’ ofofprodthe share ofMalaysia milk gives thatanyiscoun- different much remains to be done border’ restrictions.” dairy and rice are two sec- laration processes and try. It also allows open plant. Some of its products for Australian milk supply The FTA was signed on to will being diverted third farmers tors where – value-added, sustainable exports for byAustralia’s volume are to accessZealand arrangements from ucts be sold in Australia. forincremental export. improved marketing exported. New May 22 in Kuala Lumpur tap into the full potential arrangements for certain market access improveand export focused.

2023 for Australian rice The company says countries. now destined for China.

Almost half (45%) exports around 95% of

by Australia’s Trade and of the Asian region and commodities. ments have been negotiInitially the plant will with all tariffs eliminated given Asian consumCompetiveness Minis- words, The Malaysian market beyond. ated under the Malaysian produce 250ml and 1L by 2026. ers’ rising incomes and In other ter Craig Emerson and his He says the NFF will is worth about A$1 bilUHT packs from a process The National Farmers’ FTA. improving diets, demand demand for New ZeaMalaysian counterpart now throw its attention lion in Australia agricul“This trade deal was line capable of 100 milFederation says the trade there will grow for qualMohamed. towards ensuring agricul- Mustapa tural exports – including also particularly imporlion L. The processing and deal will improve interity dairy products from land’s dominant product Emerson says Australia ture remains front and being its fourth-largest tant for sectors such national market access low-cost production bases packaging plant will emit from its largest buyer has centre in completed FTAs will be as well-positioned sugar export market and less carbon, use less water, for Australian agricultural as dairy that have been such as Australia, whose in the Malaysian market fifth-largest wheat export with South Korea, Japan, facing a competitive disand be more energy-effigoods. milk is well regarded. fallen back. as Malaysia’s closest tradChina and Indonesia as market. advantage in Malaysia cient than equivalent “After seven years of The new plant will NEXT ISSUE: SEPTEMBER 2014 This has set a bearish ing partners in ASEAN, With an annual economic immediate priorities. compared with New ZeaUHT facilities in Austranegotiation, the NFF is allow Pactum to meet “These are all markets and in some cases better. growth at about 5%, land which already has lia and SE Asia. Pactum under no illusion of how growing demand for tone across globalUHT marABVs The FTA will guarantee Malaysia forms an impor- with enormous growth expects site preparation to challenging it has been to a completed FTA with dairy milk, and add Dairy tariff-free for 97.6% opportunities and where tant part of the ‘Asian Malaysia in place.” begin in October 2012 andfarmers who want to breed for improved fertility and complete this FTA with to capacity ketsentry in general, and will for valueworkability will be keen to investigate the April release of the of current goods exports significant barriers to Century’ story and the The FTA also sigstart-up by mid-2013.

Malaysia,” NFF vice presiadded beverages at affect Australian export Australian Breeding Values (ABVs). from Australia once it opportunity this presents trade in agriculture still nals some administrative Pactum makes UHT dent Duncan Fraser says. its Sydney factory. Pactum The new fertility ABV is a better indicator of the fertility of a bull’s enters into force. This will for Australian agricultural exist, not only through benefits for Austraproducts for private label The FTA will fill a is expanding its capabilireturns. daughters because it draws upon the data for for several traits, rise to 99% by 2017. tariffs that restrict trade producers, says Fraser. and proprietary customers. number of gaps within the lian agricultural exportties at the Sydney plant Booming global milk including lactation length, mating and pregnancy data. This is something farmers have been asking for and Dairy News Australia supplies and a steady will investigate how it can impact on-farm breeding programs. We’ll ramp-up of forecast also the bulls with the highest Australian Profit Rankings 016-017.indd 17 6/06/12examine 1:41 PM and how they could influence your breeding program.

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Dairy News AUSTRALIA august 2014

16 // management

Robots aided by cut and carry Rick Bayne

THIRTEEN MONTHS

after becoming the first dairy farmer in Western Australia to install a robotic milking system, Rob Giura is finally seeing some positive outcomes.

The installation has been plagued by teething problems that have

been exacerbated by other external factors, including health issues for his herd.

But there is light at the end of the tunnel.

“It’s been a bit of a hard road,” Mr Giura admitted. “We’ve had some issues but we’re getting on top of them now.”

“It’s just now starting to make things a bit

easier. On the weekends I can get into it on my own, though I wouldn’t want to do that for a long period of time. It’s good to know that when need be, I can manage on my own with this system.”

Mr Giura has been on the farm at Keysbrook, about an hour south of Perth, for 24 years and is in for the long haul.

At 47, he decided it

was the right time to make the investment to get full value over the next 10 to 20 years.

“Part of the reason for the investment was that I thought I was going to be here for a long time and would make things easier for myself,” he said.

He hopes for a payback period of 10 years on the robotics, depending on seasonal

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“The cut and carry system was something we decided to do after we got the robots. We thought it would make the herd traffic better and make better use of pasture.” – Rob Giura

conditions.

The system was primarily installed to address labour issues.

“I was trying to free-up some of my time,” Mr Giura said.

“It’s hard to get quality labour and hard to get people to do the job the way you want it done.”

He was also attracted to the hygiene factor.

“Teat preparation is much better than what we would normally have under our original system.”

The four-robot DeLaval system was fitted into an existing dairy shed, which Mr Giura said had worked fairly well.

However, hopes that

production would drop off just temporarily before an upswing to higher than earlier levels failed to materialise.

Production remains down, though not all related to robots.

“That’s been one of the main disappointing aspects,” Mr Giura said.

“We were a 9000 litre herd before we started but we haven’t been able to get back up to those levels as we expected.

I expected production to drop for two or three months, but not this long.”

Production is now about 6500 litres and Mr Giura said the fall had been “quite painful”.

“There are other

external factors relating to herd health that we’re trying to resolve. We’re trying a few things, playing around with feed and taking blood tests and other tests to try to pin down the herd health issues.”

The 325ha farm has pure-bred Holsteins, chosen for overall production and the wide availability of genetics.

The cows are mostly fed on a feedpad with cut and carry pasture.

“The cut and carry system was something we decided to do after we got the robots. We thought it would make the herd traffic better and make better use of pasture,” Mr Giura said.

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Cows are mostly fed on a feedpad with cut and carry pasture. Photo: Farmwest

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Dairy NewS AUSTRALIA august 2014

management // 17

system Who:

Rob Giura Where:

Keysbrook What:

Automated dairy

“With a voluntary milking system we can’t turn cows out too far.

We’ve got to keep them fairly close by otherwise they’re just not going to come back.

“By using the cut and carry system we can get better use of pasture and take pasture from anywhere off the property and bring it to the cows.”

The system is proving successful.

“You’ve got to have more bulk than if you were grazing. You need a bit of height in the grass to cut it, which means you’ve got to wait longer this time of year when it’s very wet and there’s slow pasture growth,” Mr Giura said.

“But it works pretty well. When there’s a surplus of pasture you can certainly make good use of it.

“We still don’t have ideal voluntary cow movement. At this time of year when it’s very wet and muddy, it’s hard to get cows to move voluntarily, but we do get some.”

The farm has mainly ryegrass pastures. “We’ve been through some of the slow growth time of the year with short days and cold and wet but it’s starting to kick along now,” Mr Giura said.

The farm used to have a combination of ryegrass and clover but is now favouring ryegrass for its higher production values.

Mr Giura had considered expanding the herd up to 280 or even 300 cows to build production back to previous levels or higher.

However, he fears that more numbers could have negative impacts.

“Our target is to have an average milking frequency of two-anda-half times per day.

Obviously cow numbers have to be managed to achieve that,” he said.

Another robotic system is about to be commissioned about 500km away from Mr Giura’s farm and he expects the process to be much smoother.

“They shouldn’t have as much trouble as we did because the local technicians have learnt a lot here,” he said.

Mr Giura remains committed to dairying and improving his farm despite the hiccups.

“We still need more money for our milk than what we get. It’s all about a return of profit.

It’s the same story everywhere – we’re not getting as much for our milk as we should be for the input costs.”

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Dairy News AUSTRALIA august 2014

18 // management

More bouquets than brickbats andrew swallow

HOW OFTEN do you give positive or negative feedback to your staff, or anyone in your life come to that?

Research shows there’s a threshold ratio – the Losada ratio – of three

positives to every negative required to gain engagement, and an optimum range running up to about six positives to one negative.

Dana Carver, of DairyNZ’s people team, told South Island Dairy Event (SIDE) attendees that surveys in the dairy

DairyNZ’s Dana Carver (right) and Robert McIntosh.

People and pasture management parallels

Pasture system Routine farm walks and feed wedges Plan paddock use Plan fertiliser use Use correct round lengths Result: Quality grass with good growth and correct covers

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industry have found the ratio onfarm averages four negatives to one positive. Little wonder that the industry has 50% higher staff turnover than the national average.

“If they (employees) are not engaged, then turnover is going to be high,” she warned, during a workshop on staff engagement.

Most staff leave not because of money, but because they’re not engaged in the job or there’s something more engaging on offer elsewhere, she said.

Long hours, lack of career progression, attracting the wrong people in the first place, and poor people management also contribute to the sector’s high turnover.

“How do we break the cycle? We have to prioritise the time to put the people management systems in place and upskill.”

Ms Carver said she’s worried those responding to television advertisements promoting dairying as a career aren’t going to get the experience promised because of the lack of people management skills which on many farms.

That shortfall is easily explained.

“Most of us have not actually been trained in people management like we have in the operational things.”

But just as managers had learned to be good with pasture and stock – the skills progressed them to positions with staff to manage – so they could learn to be good with people, she said. “There is a formula for it, just like there is with pasture management.”

Good recruitment practice and thorough, planned orientation is the start (see panel). Recruitment

should include a detailed job description with farm culture and values spelt out, at least three ways of advertising, an application form, phone screening of applicants, thorough reference checks, and face-toface interviews done in a professional manner.

Orientation means a full introduction to the job, responsibilities, other staff, the farm and its systems. One-to-one reviews of progress should be held four, eight and 12 weeks in. Calving or other busy times are no excuse.

“You can make time for it. You’ve just got to believe it makes a difference,” Ms Carver stressed, pointing out managers would often find half an hour to talk to a contractor about a job on the farm, yet many fail to find that time for their staff.

Good team meetings – planned, engaging and involving all, and delivering action points and results – are the next step. One-on-one reviews should be similarly planned and scheduled.

Agreeing and providing good training is also important, as is good leadership.

“The bottom line is a manager must be respected and trusted in order to motivate staff.”

Making time to get to know employees, and observe them or their work would enable genuine, positive feedback to be given, gaining engagement.

While prioritising people management, upskilling and getting systems in place may at first make a manager busier, in the long-run it’s the only sustainable option, Ms Carver argued. “Once you can manage people, the world’s kind of your oyster.”

Dairy NewS AUSTRALIA august 2014

breeding management // 19

New mastitis study flags higher conception rates PRELIMINARY RESULTS of a new Euro-

pean mastitis treatment study have implications for higher cow conception rates, according to the New Zealand veterinary researcher who did the work, Dr Scott McDougall, of the R&D group Cognosco.

Dr McDougall and his Belgian co-author Elke Abbeloos, from Boehringer Ingelheim, presented their initial findings at the World Buiatrics Congress in Cairns late last month, attended by 900 cattle veterinarians and scientists.

Their preliminary analysis found that cows treated for post-calving mastitis with a non-steroidal anti-inflammatory drug in addition to standard antibiotic intramammary treatment tended to be ready for their first service one week earlier, and were 1.4 times more likely to conceive (i.e. a first service conception rate of 35% vs 25% for the treated compared with control cows) from that first service than cows given antibiotics only.

Known as the Fertile trial, the multi-centre, blinded, randomised controlled study monitored 509 cows diagnosed with mastitis within 120 days of calving on 60 European farms serviced by 10 different vet clinics.

All animals were treated with the same anti-

biotic intramammary, followed by either the NSAID drug meloxicam or a placebo. Cows were then bred and pregnancy tested normally.

Dr McDougall said the preliminary findings are based on conception rate to first service for the 346 cows for which a service date and pregnancy test data were available.

The Fertile trial was prompted by 2009 New Zealand farm research which showed a single dose of the NSAID Metacam20 used with an antibiotic for mild and moderate clinical mastitis significantly reduced culling.

In that case, Dr McDougall and fellow veterinary researchers Drs Mark Bryan and Richard Tiddy found that mastitis cows treated with an antibiotic alone had a cull rate of 28.2%.

The addition of a single dose of Metacam20 – known as ‘tandem treatment’ – reduced the cull rate to 16.4%.

Additionally, Metacam treated cows had a lower somatic cell count in the weeks following treatment, indicating a faster return to quality milk production.

Return on investment for tandem treatment in the 2009 study was four to one, based solely on reduced cull costs, according to Boehringer Ingelheim Kiwi brand manager Jonathan Leslie.

Dr Scott McDougall and his Belgian co-author Elke Abbeloos.

He said although cull data from the 2009 project was “intriguing and robust,” the study wasn’t designed to explain the underlying mechanisms.

Boehringer Ingelheim then commissioned the Fertile trial specifically to learn more about how tandem treatment protects mastitis cows.

“Mastitis is an extremely expensive disease, [because of] lower milk yields, higher cell counts, reduced reproductive performance and

higher risk of culling.

“If we can find a way to reduce the impact of the disease on New Zealand herds, especially the economic losses and genetic

wastage associated with culling, the industry can only benefit.”

Publication of the Fertile trial with the full data set is expected next year.

Dairy News AUSTRALIA august 2014

20 // animal health

Consumer demands will guide genetic selection peter burke

A WORLD-LEADING

dairy researcher says major changes in the way cows

are bred will pave the way for the development of new dairy products.

Dr John Lucey is the director of the Wisconsin Centre for Dairy Research

and a professor of food science at Wisconsin University.

Mr Lucey, raised on an Irish dairy farm, spoke at a recent symposium mark-

ing 50 years of teaching food technology at Massey University, New Zealand.

He once taught food science there.

He said that genetic

technology will enable scientists to breed for specific traits in dairy cows, rather than wait to see what traits sons and daughters of cows produce and how

Dr John Lucey says cow could soon be bred for individual proteins, rather than just milk or fat.

beneficial these are.

“Rather than just breed for an amount of milk or an amount of fat or protein, you start breeding for individual proteins. You might say a lot of a particular protein has health benefits but it is produced in low amounts, but there is a cow or bull that has this trait and has the ability to produce it and pass it on.

“That kind of focus would enable us to target that individual protein or component. In the next ten next years we’ll probably see more of that drive whereby people will breed animals for what I would call non-traditional traits.”

Mr Lucey said this idea is not unrealistic as from a genetic perspective the markers are already there and have been researched and developed, and animals worldwide have been identified as having these traits.

Now the technology needs to be commercialised.

Mr Lucy said after a roller coaster ride dairy products are again in

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favour with consumers, many so-called health concerns having been rebuffed. Now many consumers appreciate the value of high quality dairy protein.

“For example in the US a huge phenomenon for the last five years has been Greek yogurt… with about twice the protein of regular yogurt. It was kind-of chugging along in the US, but it’s had phenomenal growth because people are appreciating the high protein content.”

Taste, flavour and texture are the important drivers for getting consumers to buy a product, Mr Lucey said. “They are the givens but [they are also] looking for something healthy and convenient and they don’t want it to cost a lot.”

With the market for dairy products opening up in Asia, food scientists must attend to the needs of these new consumers.

Though interested in dairy products, they have different taste preferences to Western consumers.

Social media pitfalls SOCIAL MEDIA may be great in many respects, but it poses new challenges for many industries, including dairy, John Lucey says.

Instantaneous sending of information to consumers has a downside – the stories can be just plain wrong.

“Most writers in the media have very little science training; few actual science writers are [about nowadays]. So some inaccurate stories [on social media]… are taken at face value by the public…. So food researchers and university people must speak out and get the correct messages across.”

Mr Lucey said worldwide not enough money is being spent on dairy research. With dairy being so diverse biologically it can provide lots of excellent quality products and great health benefits and there is a need to capitalise on that.

Dairy NewS AUSTRALIA august 2014

animal health // 21

Small window for colostrum LAST WEEK, I was in Cairns in Far North Queensland enjoying a week of warm weather. I attended the World Buiatrics Congress, a gathering of nearly 1000 cattle vets and animal scientists where attendees were updated on all things related to cattle.

I presented a paper outlining my experiences in Nepal gaining first hand experience of FMD, and the importance of private practitioner engagement in preparing for, and our role in surveillance for, an exotic animal disease outbreak.

I attended a number of lectures relating to colostrum and passive immunity transfer in calves.

With spring calving getting into full steam I once again remind you all about the importance of colostrum and passive transfer of immunity.

Calves are born with no immunity due to the type of placenta they have which doesn’t allow the movement of antibodies into the calf’s blood stream from the cow’s blood stream prior to birth.

The cow produces colostrum in the final 3-4 weeks of her dry period which is rich in antibodies against diseases that the cow has been exposed to during her life, or vaccinated against.

The absorption of the antibodies undigested directly into the calf’s bloodstream, providing what is known as passive immunity, is a time limited thing with a window of opportunity of 24 hours or less.

As soon as the cow calves, she begins producing milk which dilutes the antibodies in the colostrum, and as soon as the calf is born and especially after it has fed, the production of stomach acid begins to digest the antibodies rather than allow them to be absorbed whole and unchanged.

The first milking colostrum is at least three times more concentrated in antibodies than subsequent milkings so it is important that only first milking is used when feeding or supplementing calves with the aim of improving the passive transfer of immunity.

animal health rob bonanno There are some easy methods of measuring the quality of colostrum which should become an important part of your calf induction protocols. There was strong emphasis in the lectures on the importance of the quality of the colostrum.

Colostrum quality is broadly discussed in two ways: the level of antibodies and the level of bacterial contamination.

Antibody levels can be enhanced by optimum transition nutrition and immune system preparation of the cow using specific vaccinations for things like Salmonella, Rotavirus, E.coli etc.

Milking the cow as soon as possible after she calves and especially within 12 hours of birth is a critical factor to ensure the highest concentration of antibodies possible in the colostrum.

Feeding volume is dependant on antibody concentration and estimation of antibody concentration should be performed using either a colostrometer or a Brix scaled refractometer.

Brix refractometers are a relatively cheap and robust tool to ensure that the best quality colostrum can be fed.

The other important quality issue is related to the bacterial contamination of the colostrum.

Many colostrum samples are heavily contaminated with bacteria due to a combination of poor pre-milking preparation of the cow, poor cleanliness of the collection buckets and poor storage of the collected colostrum after milking and prior to feeding.

It is also important that colostrum with blood contamination or signs of clinical mastitis (clots, flecks etc) is not fed to calves unless there is no other alternative.

The use of pasteurisation of colostrum to reduce bacterial contami-

nation was discussed, but there is a strong emphasis that pasteurisation cannot make up for poor milking or other hygiene practices.

The importance of rapidly chilling and keeping stored colostrum refrigerated at 4C for short-term storage (up to 1 week)

or frozen at -18C (up to 6 months) looks like being a very valuable tool to ensure colostrum quality.

Dairy farmers should strongly consider installation of a cool room or some other method of adequately storing chilled colostrum in sufficient quantities for their needs.

So after the high quality colostrum has been collected and stored, then fed quickly in adequate amounts, the only thing left to consider is the monitoring of the success (or otherwise) of your colostrum protocol.

Monitoring of the blood protein concentra-

tion between 2-7 days after birth can give us an estimate of the antibody levels present in the blood. If you are consistently meeting or exceeding the target of 55 grams of protein per litre of blood then you could reasonably expect that your colostrum protocol is adequate and expect

better than average calf health and performance providing you attend to their nutritional and housing needs.

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

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Dairy News AUSTRALIA august 2014

22 // animal health

Calves needing assistance at birth require extra care WHEN ASSISTING a cow to calve, it’s always exciting to deliver a live calf.

While the first thing that usually happens is to check if it’s a bull or a heifer, there are some other things we need to do that will make sure the calf has the best start in life.

The following tips apply to every calf – those calves showing signs of a prolonged or stressful delivery (such as swollen heads or tongues, or meconium staining) will need extra TLC. ■■ Clear mucous from the calf’s nostrils and mouth.

■■ Place the calf onto its chest, with the back feet pointing towards their ears (see photo). This position gives both lungs the best chance to expand. Holding calves upside down puts pressure on the diaphragm and lungs and interferes with breathing: don’t do it!

■■ Have a whole lot of old towels on hand at the dairy. Use them to dry the calf and rub them for

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calf care zoe vogels

■■

■■

stimulation – brush upwards from tail to neck. Pinching the nose can also help stimulate a calf to breathe.

Monitor the calf over the next few hours, and encourage them to drink 2 litres of good quality firstmilking colostrum from a teat feeder (good quality colostrum is 22% or more measured with a Brix refractometer). If the calf is unable to do this, use an oesophageal feeder to tube feed the colostrum.

Spray or dip the calf’s navel with

5-7% iodine solution to dry it out and minimise the risk of infection.

Teat spray from the dairy is only 0.5% iodine – not nearly strong enough, so don’t use it. Spray the navel while the calf is in the calving

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• Zoe Vogels is a veterinarian with The Vet Group.

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animal health // 23

Preventing drench resistance stephanie bullen

MANAGING WORMS

in dairy replacements may seem like a relatively straight forward task… drench, drench, drench!

However, in reality it is far from simple. A current research project looking at drench efficacy in the Macalister Irrigation District (MID) has found that four out of five farms now have drench resistance.

What is scary is that once it has developed on your farm it is irreversible.

The five main actions by a dairy farmer that can inadvertently cause drench resistance are: ■■ Confusing rotation of drench classes with drench products ■■ Moving heifers to a new “clean” paddock after drenching ■■ Using pour-on drenches ■■ Inappropriate or lack of quarantine drenching ■■ Dosing incorrectly to the average, not the heaviest in the mob ■■ Rotation of drench classes Rotation of drenches has been advocated as a way in which to avoid drench resistance for decades.

However, product labels are misleading and many farmers are in fact rotating between products and not classes (i.e. mechanisms of action).

The three classes of drenches include: ■■ White drenches (e.g.

Panacur, Flukazole, Parafend) – always oral ■■ Clear drenches (e.g.

Nilverm, Nilzan) – always oral ■■ ‘Mectins’ (e.g. Cydectin, Dectomax, Ivomec, Virbamec) – injection or pour-on In order to effectively rotate you must rotate between classes. For example, if you usually use Cydectin (mectin) and for the next drench use Nilverm (clear drench) you are effectively rotating.

If you use Cydectin then rotate to Dectomax, you are not effectively rotating.

If unsure, go armed to your local supplier with a sticky note with ‘white drench, clear drench, mectin’ on it.

Ask the retailer or vet what you used last time and they will find you a product in a different class.

There are not yet any combination (i.e. combining two or more classes) of worm drenches for dairy cattle on the market that use multiple classes together (e.g. both Panacur and Nilverm).

Using multiple classes together at label dose rates is even better than rotation for preventing resistance. It is anticipated that a combination product will be available later this year.

Moving to a ‘clean’ paddock after drenching Historically farmers were told to move heifers to a clean pasture after drenching to stretch out the interval between treatments and many still do this today.

However, what is actually happening is the resistant worms that survive treatment continue producing eggs and create a population of worms that is entirely resistant in the new paddock.

So, instead, put your heifers onto a new pasture for a couple of days to two weeks before drenching (depending on the size of your paddock).

Allow them to poop out some drench-susceptible worms onto the ground which can go on to breed with those that survive treatment and then drench.

It is a new concept and one which is arguably going to be the hardest to penetrate the dairy industry.

However, the reality is, sheep farmers stopped moving their lambs to clean paddocks 20 years ago and we are just lagging behind.

Pour-on drenches Injectable products are more cost-effective than pour-on drenches.

What many farmers don’t realise is that pourons are actually absorbed by the animals licking the product off themselves and their herd mates.

Therefore, the performance of pour-ons can be highly variable and if only treating a few animals it is likely that their untreated

A current research project looking at drench efficacy has found four out of five farms now have drench resistance. herd mates will lick off a proportion of the product.

So the moral of the story is – use injectable products instead of pourons both to save money and to ensure your animals are getting the right amount of drench.

Lack of or ineffective quarantine drenching Even after ensuring you adopt all the right practices on your farm it is easy to buy in drench resistance with introduced stock.

Therefore, to safeguard your herd, all introduced animals (including bulls) should be drenched with two different classes on arrival. I recommend administering a ‘mectin’ injection with an oral clear drench (e.g. Nilverm).

You will find the clear drenches (e.g. Nilverm and Nilzan) are cheap so having a drum on hand for such occasions will not break the bank. Once new animals have been

drenched leave them in a yard for 48 hours to expel any resistant worms then you are safe to put them out onto your paddocks.

Drench to the heaviest in the mob Every drench drum, bottle or pack you read clearly states ‘drench to the heaviest in the mob’ however upon visiting farms I discovered that many farmers drench to the average. This means

that the heavier calves in the group are getting under-dosed and therefore may build resistance in 5-10 years.

So, this serves as a friendly reminder to read the label and always drench to the heaviest in the mob.

• Stephanie Bullen is a vet working at the Maffra Veterinary Centre. This article was first published in the July 2014 edition of How Now Gippy Cow.

SCOURS CAN CHANGE THE FUTURE FOR YOU AND HER. PROFESSIONAL PROTECTION FROM YOUR VET.

When you suffer a calf scours outbreak the future looks a little bleak. You’ll not only experience productivity losses such as reduced income, additional expenses and genetic setbacks, you and your family will also face the emotional toll of scours. Stressful work hours, endless days managing sick calves and the disappointment of mortalities can be tough on everyone when scours hits. A serious case of scours can even make some farmers question their farming abilities. Ultravac Scourshield helps you prevent scours and gives you and your family peace of mind.

For more information on Ultravac Scourshield contact your vet or call Zoetis on 1800 814 883.

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Dairy News AUSTRALIA august 2014

24 // animal health

Mineral supplements made andrew swallow

TAKE YOUR vet’s advice on mineral needs for your herd but push back if they start peddling pricey products.

That was the typically blunt advice from Dairy NZ principal scientist, animal science, John Roche, at a recent South Island Dairy Event in New Zealand.

“If they say use a che-

lated or hydroxy product you push back and say ‘No thanks, I’ll use inorganic’,” he told delegates during a workshop headed ‘Mineral Supplements – The KISS Principle’.

By way of introduction, Mr Roche had quipped the KISS acronym – Keep It Simple Stupid – was probably directed at him.

“Do cows need minerals? Overwhelmingly the answer is yes. But as with all things nutritional the

devil is in the detail,” he warned.

Of 25 minerals known to be essential to animal production, 18 are considered trace elements and seven macro nutrients (see sidebar).

“I shall focus on the trace elements because that’s where most of the confusion and complexity seems to arise.”

Part of the problem is there is “virtually no independent research done

“As the Australian dairy herd is so diverse in its geography and its feeding types, there can be no hard and fast “rules” as to what is the best mineral supplement.” – Rob Bonanno, Shepparton Vet Clinic

on minerals now. Almost every paper written is funded by a company selling minerals,” Mr Roche said.

That doesn’t mean the science can’t be trusted – “a lot of the research

that is commercial company funded is very, very good,” – but it’s what does and doesn’t get published that’s the problem.

“You really, really struggle to publish papers that show their product in

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Peter & Jeanette Clark – Korrine, VICTORIA “250 cows treated with Teatseal costs approximately $4,000. Milk from each cow saved - 7,000L at 35cents/L equals $2,450. So in our case, two cows saved [from being culled] more than pays for the Teatseal.”

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a negative light. They’ll let you do it but they make it very hard to do.”

Much of the research presented to support mineral sales is done on cows fed total mixed rations so extrapolating results to pasture is also questionable, Mr Roche added.

Of the 18 trace minerals only five are likely to be deficient in pasturebased diets: cobalt, copper, iodine, selenium and zinc.

Deficiency may simply be due to not enough in the diet, but interactions with other minerals and vitamins can mean animals can’t absorb enough from what appears to be an adequate amount in a diet.

For example, iron blocks absorption of copper so cows on winter crop eating a bit of soil can become copper deficient.

Similarly molybdenum and sulphur form insoluble complexes with copper affecting uptake.

But of all the traces, copper is the one most likely to become toxic in excess so care is needed to take account of all sources of the mineral: feed, water (some sources are naturally high copper), and fertilisers, when working out if and what to supplement with.

Cobalt is more contentious, as very little is needed for rumen microorganisms to produce enough vitamin B12, which is the main use of the mineral. However, higher intakes than required for B12 production can enhance fibre digestion.

Iodine is vital for energy (via the thyroid), the immune system and reproduction but it is highly soluble and pasture content is very variable.

Goitrogens in crops such as brassica prevent iodine uptake and put cows at particular risk of deficiency so supplementing during wintering and the first four months of lactation is recommended.

“You can put it into the system very cheaply,” Mr Roche noted.

The two traces Mr Roche expressed “real doubts” about supplementing with were selenium and zinc.

“New Zealand studies indicate 0.5mg/day of selenium is enough to maximise production but in the northern US they’re recommending 5mg/day.”

But many areas of New Zealand are known to be selenium deficient and, unless using an organic source, the mineral is very cheap “so do it,” he added.

The exception would be on high selenium soils, especially where higher selenium feeds such as brewers’ grains or oilseed byproducts are being fed.

Cereal by-products are also high in zinc so must be taken into account when looking at that mineral.

Pasture content is very variable farm to farm and paddock to paddock but testing can be worthwhile to find potential problem paddocks/areas.

Overall, and in general, Roche’s recommendation is to supplement pasturebased diets with these five key trace elements for the first six months of lactation when they’re in highest demand and to replenish cows’ stores.

“There are some very good trace element mixes that can be put in for 2-3c/ cow/day.”

Work with your vet, and if taking liver tests to check copper status, “test the cows you’re keeping, not the ones that are going to the works,” he stressed, as the latter could have abnormal levels for a whole host of reasons which may not be typical of the herd.

Bloods give a point in time picture but won’t tell the whole story with copper and selenium, he added.

“Use your vet to diagnose and make a plan but what product to use is where you have to be strong.”

As the Australian dairy herd is so diverse in its geography and its feeding types, Shepparton vet Rob Bonanno told Dairy News Australia there can be no hard and fast “rules” as to what is the best mineral supplement.

“As a general rule, coastal and high rainfall

Dairy NewS AUSTRALIA august 2014

animal health // 25

simple Two, maybe four, macro nutrients ROCHE’S SIDE paper also covers the macro

nutrients, calcium, chlorine, magnesium, phosphorus, potassium, sodium and sulphur.

Sodium can be short if a third or more of feed is a low sodium source such as cereal grain, and dietary phosphorus may be inadequate on fodder beet, but other than that calcium and magnesium are the two macros to watch.

“Magnesium is probably the most important mineral in the diet of the grazing dairy cow,” states the paper.

“It is essential in almost every biochemical reaction in the body, not to mention its role in nerve and muscle function and bone development.”

Dr Roche’s paper says there’s little research on chelated magnesium and while it probably is absorbed more quickly and may be excreted slower, “the amount of magnesium supplied by these products is unlikely to protect a cow during early lactation,” it warns.

As a rule, calcium should be supplemented during the colostrum period with up to 300g/cow/ day of limeflour dusted on pasture or through a molasses lick.

Lower level supplementation through in-shed feeding “may not be sufficient to prevent milk fever, particularly in at risk cows, ie old, jersey or jersey cross”.

Once into lactation, calcium supplements are only likely to pay if large amounts of low calcium feed such as maize silage or cereal grain are used.

Australian dairy farmers should contact their local vet to discuss supplement requirements for their herd.

areas tend to have lower levels of minerals, but some inland very sandy soils can be deficient and on some types of clay based soils, minerals may be present in adequate amounts, but they are

It’s pIlI tIme

chemically unavailable,” Dr Bonanno said.

Dr Bonanno recommended dairy farmers should contact their local vet to discuss supplement requirements for their herd.

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Keeping it simple: DairyNZ’s John Roche handles a mineral supplement question from a SIDE delegate.

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Dairy News AUSTRALIA august 2014

26 // animal health

Downer cow assessment crucial to recovery

Dr Phillip Poulton with one of his patients on a Gippsland property.

A LEADING cattle expert discussed the importance of diagnosing

both primary causes and secondary damage to determine the best

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treatment for downer cows at the recent World Buiatric Congress in Cairns.

According to Dr Phillip Poulton, when downer cows are first seen by farmers, it’s important that the cause is determined so that they are managed properly.

“Most farmers are able to recognise conditions that cause a cow to be down but should seek veterinary assistance when they are unsure and when the cow suffers further injuries.

“Farmers need to be aware that the urgency of their initial response to the down cow depends on whether the cow is alert or not. Nonalert cows, described as dull, depressed and non-responsive are an emergency.”

Dr Poulton said that appropriate treatment will depend on the condition so an accurate diagnosis is crucial.

“Vets must look carefully for any secondary damage regardless of how long the cow has been down. If these additional complications are not diagnosed the treatment plan can be wrong and lead to a poor outcome.”

According to Dr Poulton, the following secondary damage should be considered: ■■ Pressure damage in the hamstring group of muscles by measuring Creatinine Phosphoinase levels.

If the levels are above a critical threshold

there is less than a 5% chance of survival and euthanasia should be considered for the welfare of the animal.

■■ Neuropathies, especially to the sciatic nerve and forelimbs ■■ Femoral nerve damage ■■ Dislocated hips ■■ Cows lying in lateral recumbency which can cause pneumonia or death ■■ Cows nursed in paddocks in cold climates ■■ Bed sores and lifting damage.

“Secondary complications can occur within a very short time so a down cow should be lifted and moved to a proper nursing area quickly to improve the chances of recovery.

“Proper nursing conditions include shelter from adverse weather conditions, suitable soft bedding, barriers to restrict crawling and minimise further injury, suitable feed and water and constant monitoring.

Appropriate drug therapy should also be provided,” he said.

A recent Dairy Australia survey showed that on 89% of dairy farms in Australia there had been on average more than two downer cows in the previous 12 months with a survival of only 33%.

At the conference, Dr Poulton released the initial results of research he has undertaken looking at the correlation between nursing conditions and treatment outcomes of downer cows.

Udder-Mate’s vitamins and minerals have a role in preventing cellular oxidation and are necessary for normal growth, fertility and reproductive performance. The assumptions contained in this document are averages drawn from Peak Industry Bodies and Milk Processors, they may differ in situations due to your geographic location, farming practices and other factors that could increase or decrease the averages used.

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Dairy NewS AUSTRALIA august 2014

hay & silage // 27

Homegrown feed cuts costs Gordon Collie

YOUNG QUEENSLAND farmer

Chad Parker has backed his future in dairying with an aggressive 25% annual growth rate over the last five years.

With an effective dairying area of just 60ha at Kenilworth in the Sunshine Coast hinterland, Mr Parker invested in a 200ha property at Murgon to run dry stock and also provide some round bale silage to bring back to the home property.

The whole milking area is under solid set irrigation and is planted to annual ryegrass to provide feed from May through to December. Kikuyu and couch grass grow through

to provide summer feed through until April.

Corn silage is brought in and the cows are fed about 6kg of grain mix in the bails each day, slightly more in summer. The predominant grain is barley with canola mixed in to give more protein during the summer.

Mr Parker invested in a feed mill to achieve cost savings blending his own ration which includes trace elements, and minerals including fine lime for essential calcium.

The whole dairying area is covered with solid set irrigation with water pumped from the Mary River.

Mr Parker said he aimed to continue to grow the milking herd to stay viable, pursuing his goal Chad Parker

of milking more cows for less cost.

He is looking at potential to acquire more property to improve viability by taking brought in feed out of his production system.

Current feed costs are around 27 cents a litre, but Mr Parker said he believed a figure under 20 cents was achievable.

While he is now confident there will be some milk price upside, his business focus is to continue to strip out production costs and maximise feed efficiency and quality bonuses.

The third generation farmer is a plumber by trade who came back home to run the family enterprise at Kenilworth in the Sunshine Coast hinterland seven years ago.

He said that while improvement in milk price had been minimal until now, at least the threat of production limits and 15 cent a litre tier two milk had been lifted.

With about 400 milkers he supplies more than 2 million litres a year to Lion and has an unlimited volume contract for five years.

He had been working on a base price of 49 cents a litre which has risen to 52 cents this year.

With quality incentives including for butterfat and protein the payment rises

to 62 cents.

His milk tests around 3.8% protein and 4.8% and bonus payments for low cell count are also an important part of the mix.

The property has been experiencing an extremely dry year, totally reliant on irrigation, with the upside of good cow health.

“You certainly need to be on the ball to make sure of bonuses which are vital with base prices where they are,” Mr Parker said.

Per cow production has been up over 6000 litres, but more recently averages around 5500 litres, reflecting the high proportion of young cattle coming into the herd.

He said getting the

Jersey cows on Chad Parker’s farm on the Sunshine Coast hinterland.

individual levels back up was not a major priority with the more important criteria being optimum cost per litre of milk.

With a traditional spring milk flush, some calvings had been moved from November-December to March-April to even

out production and reduce the volume of low price excess milk.

He is hopeful that milk prices will further improve under the pressure of falling production levels in the north.

Ultimately he believes the future to be in inten-

sive housing where costs can be fully controlled.

“It’s a big cost per cow to set up and your management has to be spot on.

It’s something I’m considering, but not on this property where the investment has gone into pasture,” Mr Parker said.

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28 // hay & silage

App can assess hay quality A new App that will allow hay-making contractors and regular hay growers to assess the quality of their product has been unveiled during the Australian Fodder Industry Association national fodder conference this month.

Feed Central has developed the Australianfirst App which will give producers the ability to market their hay more promptly and to a wider audience.

Quality Assurance and Supply Manager Ian Wickham said Feed Central was rolling out the program to accredit contractors and growers to do first round quality assessment and to list hay directly with Feed Central, starting with the 2014/15 hay season.

“It’s a great leap for-

ward for the whole fodder questions sellers of fodder are a chance to sell to industry,” Mr Wickham the domestic database of said. more than 15000 buyers “There is no national within a few days. That’s a grading system and in the really powerful tool.” absence of national stanMr Wickham said dards the app helps stanthe App would fit in well dardise assessments and for those gives buyers wanting a greater con- “Growers and fidence to contractors will feed test.

“Buyers are buy more be able to get demandhay sight their product ing more unseen, online.” informawhile still tion on the allowing hay before they buy and growers and contractors it’s not just feed test they to market this product need to know about,” he through their own chanadded. nels,” he said.

Quality assurance is “Growers and conprotected in the process. tractors will be able to The hay will feature a get their product online stamped quality statement and available to sell much to establish if it is assessed quicker. With Feed Cenby a Feed Central assessor tral’s unmatched turnor a self-assessment. around time of 24 hours, Growers can still have by answering a few simple

a Feed Central assessor visit their properties. The assessors will also use the new technology, reducing reliance on a paper-based system.

The new technology was developed in-house by Feed Central and was built with ease of use for both user and buyer in mind.

“We want to ask simple questions about the product in an easy format, everyone has their phone handy when trying to sell product so this was an obvious extension,” Mr Wickham said.

“Growers will be able to do it themselves; it’s not a difficult process but it has benefits of getting product marketed more effectively and still with all the right information wanted by decision-makers.”

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// 29

Early chat can stop problems

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PROPER COMMUNICATION between an accredited

fodder contractor and a dairy farmer is normally all it takes to ensure both parties are happy.

That’s according to Australian Agricultural Contractors Association president, Bill Saunders.

“A successful outcome comes down to communication,” Mr Saunders said.

“When some farmers say they can’t get contractors when they want them, nine times out of 10 they have called at the last minute.

“Some of my clients call me two months out and keep me updated.

“There is 100 ways to make silage, so have a cup of tea, discuss exactly what you want, and both parties are then on the same page.

“There is a lot of money involved at the end of the day, so it has to be done right.”

When a farmer employs a contractor, Mr Saunders said it is a legal requirement that they provide a safe workplace.

Farmers should ensure any contractor working on their property has: ■■ Public liability insurance ■■ Appropriate licences (eg spraying or truck licence) ■■ A Job Safety Analysis ■■ Machinery insurance ■■ Evidence staff have been inducted into his business ■■ An employer code of conduct, which sets limits on what hours staff can work in a 24 hour period.

All AACA-accredited contractors agree to install an employer code of conduct.

In order to provide a safe workplace, Mr Saunders said the farmer should also induct all contractors onto their properties, and supply a list of hazards on their farms.

“A good farm map is also essential,” he said.

“The days of saying ‘the third paddock past the gum tree’ are gone. Detailed farm maps and GPS make the job much easier.”

The AACA has not printed suggested contractor prices in its brochure this year for only the second time in its history.

Mr Saunders said this was done to remove the confusion that every job can be done for a set price; and also to ensure contractors and farmers communicate beforehand.

Contractors that become a member of the association (for $80 a year) have access to a cost calculator which will provide an accurate assessment of what each individual job will cost.

The contractor can then share this with the farmer.

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Dairy NewS AUSTRALIA august 2014

hay & silage // 31

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Feedpads utilise hay, save paddocks EXTRA CARE taken to produce

quality hay is essentially a waste of time if the finished product is not utilised effectively.

The problem is exacerbated in winter, when hay is fed out on wet ground, and Terry Allan of WasteNot Stockfeeders says there are other considerations, including: ■■ Leaf loss – leaf is usually the most valuable part but once it shatters and blows away, the remainder is the poorer.

■■ Pugging of paddocks.

■■ Damage to laneways and gateways, not just from cow traffic but tractors, wagons and carts.

“A sacrifice paddock is one less paddock in the grazing rotation, and a guaranteed candidate for an expensive re-sowing treatment later on,” Mr Allan said.

Mr Allan said constructing a feedpad with a hay feeder also

ensures every member of the herd gets their fill.

“Watch what happens when you put a line of hay out on the ground,” he said.

“The herd lines up and eats the first half of the hay; but watch what happens to the second half of the hay and see ‘who gets what’.

“A group of cows progressively leave the line with hay still in the line, but no longer an effective feeding space for the tail enders.

“The bossy cows dominate the remaining hay, and it is not until they are full and they leave the line, that the shy cows and heifers get a chance to come back to where the hay was, but it’s gone by now – either eaten by the bosses or tramped into the mud.”

As a result, Mr Allan said some cows get a feast, but the tail-enders get even less when mud is a problem,

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and are still hungry.

“Half the herd thrives but half the herd really struggles. We have seen a number of herds this season where there is a major difference between the bosses and the strugglers.”

Mr Allen said with a feed pad, cows can be fed after each milking to boost their intake and/or to balance their total ration, thus increasing the efficiency of conversion.

“When they reach the paddock we see a much gentler scene.

“Cows are much quieter, grazing or laying down much earlier, rather than charging around the pasture chasing the tractor or today’s hay.

“Pasture is eaten out later in the day – even into the afternoon.

“If the feedpad has been used to help manage the pasture better, hopefully we have grown a little more feed and will utilise a little more of it.”

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Dairy News AUSTRALIA august 2014

32 // machinery & products

Mahindra has all Haitsma family needs MATT HAITSMA is

back on the family farm after a couple of years at Latrobe University, milking about 130 cows out of their total herd of 210.

He works with his father, Jan and mother Jean, on their 80ha (200 acre) property about 6km out of Rochester in central Victoria.

They have been at this property at Rochester for 10 years milking on a 22-unit swingover herringbone, and the farm is taken up with pasture and to run the milking cows.

So last October they purchased a 31ha (78 acres) outblock at Bamawm to grow their hay and silage and to keep the young stock. “This property needed knocking into shape in improving the pastures,” Mr Haitsma said. “We have two Kubota 4WDs to handle the work at the Rochester farm one with a cab and one with ROPS. So we looked around for a tractor to look after the jobs at the new place.”

In February they took delivery of a Mahindra 9200 4WD with ROPS and a roof, and fitted with a Mahindra ML480 front-end loader, through Echuca TM &V dealership.

Mr Haitsma said they originally saw the Mahindra tractor range at the Elmore Field Days. “We didn’t go on any farms to look at them working, but we knew that Echuca TM

working clothes chris dingle &V handled them.

“It does the job that we require. There are no fancy electronics, but it has all the bits that you need. And the price is competitive.

We didn’t need anything fancy – just a basic tractor.

“We looked at other brands and ‘horsepower to price’ was the decisionmaker with the Mahindra.”

The Mahindra 9200 is powered by a 3.53 litre four stroke, direct injection, turbocharged, water-cooled diesel. Mr Haitsma said that it is a very basic tractor - solid and functional, at a good price.

A dedicated left-hand synchronised reverser gives good control during intensive front end loader work.

Terry Scurrah looks after tractor sales at Echuca TM &V and is very enthusiastic about the qualities of the Mahindra brand. He researched them thoroughly when the dealership was looking to sell them.

“They were selling like hot cakes in the US because they represented

Who:

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Mahindra tractor

value for money and they are very robust,” Mr Scurrah said.

Mahindra has been making tractors and four wheel drive vehicles in India for 62 years.

“The 9200 is an honest tractor with a heavy chas-

Jan do the bulk of the tractor operating. The tractor is comfortable to operate and easy to get on and off with the flat floor, particularly as the operator is in and out of it to open and shut gates and to take wrapping off bales. Matt said it works well in all conditions.

“We’ll cut oaten and lucerne hay off this block this season. It’s been a good year so far,” he explained.

Jan and Jean are winding down their commitment to the dairy as it has become a bit much for them and Matt will eventually take over the operation – a step that he is obviously looking forward to.

sis weight and 12 forward, 12R reverse synchro shuttle transmission. A Dana limited slip differential on the front drive is a major feature in handling difficult conditions. It comes with tandem hydraulic pumps, delivering a total of more than 60 litres/ minute which means good front-end loader performance.

“Plus the engine has Bosch injection and the electrics are Lucas.”

The Mahindra is kept permanently at the Bamawm property. It is used daily for feeding out to the heifers, and for spraying and cultivation. Matt’s brother Chris looks after some of the daily work and Matt and

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Dairy News AUSTRALIA august 2014

34 // machinery & products

Maxxums survive rocky start The Maxxum series was a first for the newly formed Case IH too. These tractors were developed amidst the storm of mergers and acquisitions that

characterised the 1980’s agricultural machinery sector.

Since 1972, David Brown of the UK had been a subsidiary of the US oil

giant and industrial conglomerate Tenneco Corporation, and operated as a division of Tennecoowned J.I. Case.

David Brown engi-

neers at Meltham, Yorkshire, appear to have had a testy relationship with USbased Case from at least the late 1970s, no doubt helped along by ‘interfer-

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ence from the US’ in the development of the trouble-prone 90 series, and the dropping of the David Brown brand in 1983.

The ultimate blow for the Meltham-based David Brown workforce emerged in 1985, when Tenneco took control of the International Harvester (IH) company, combining it with Case to create ‘Case IH’.

Meltham engineers had been planning a new tractor range for Case under project ‘P100’, and running prototypes of the machine were reportedly produced before the merger.

As part of the subsequent rationalisation however, P100 was moved to the IH plant in Neuss, West Germany, and tractor production at Meltham ended a few years later.

The production model Maxxums were built at Neuss, with German-built Cummins engines, French cabs, and transmissions from the IH plant in SaintDizier, France.

The series ranged from 90-125hp and were built around a 5.9 litre six cyl-

grunt

john droppert inder Cummins engine (developed jointly with Case) that in itself has developed a fearsome reputation for power and reliability.

The smaller 5120 and 5220 models utilised a four cylinder, 3.9 litre version of the same engine – effectively just two thirds of the bigger block. They were advanced for their time, employing electronics in the dash and three-point linkage – but came before the era of suspended axles, CVT transmissions and electronic hydraulics.

They were easy to drive, compact and solid machines, albeit rough in the paddock and a proverbial pain to perform work on due to the restricted access dimensions.

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was particularly unsuited to Australian conditions, and many an afternoon mowing silage was spent on the verge of heat stroke. But they were reliable and powerful, and with a powershift transmission and electronic forward-reverse shuttle were suited to an enormous range of farm tasks, from loader duties to field work.

It’s easy to forgive the David Brown aficionados for any bitterness they might feel for a promising British development project being hijacked by the Americans and given to the French and Germans to complete.

If the second-hand market for the 5000 series Maxxums 25 years later is anything to go by though, everyone involved should remain proud of the end product.

• John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a variety of roles for both profit and fun.

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