Dairy News Australia September 2014 by Rural News Group

FEED PADS: Council approval for feed pads not required PAGE 9 READY TO RUMBLE New self-loading wagons PAGE 31

MAKING NOISE

Dairy pushes for best deal PAGE 4 september 2014 Issue 51 // www.dairynewsaustralia.com.au

China’s choice Green light for heifers but wait continues on FTA PAGES 4-7

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Dairy NewS AUSTRALIA september 2014

news // 3

Global joint venture based in Gippsland Jancourt East farmer Kevin Jenkins says variable feed costs reduced the viability of their feedpad. PG.18

Tasmanian farmer George Wagner has the number one Holstein herd in Australia in the latest ABV results. PG.23

A $551 million joint venture between Fonterra and leading Chinese infant formula brand Beingmate will be based in Australia. It is estimated this deal could see production at the West Gippsland site double to 100,000 tonnes a year. The deal involves Fonterra buying up to 20% of B eingmate and forming a joint venture to buy the Darnum Park nutritionals plant from Fonterra. The deal is subject to approval from the Foreign Investment Review Board as Beingmate would own the majority stake in the site, which would continue to be operated by Fonterra Australia. The day-to-day operation of Darnum will be unaffected if the proposed JV were to proceed. All employees will continue to be employed by Fonterra and milk col-

Queensland farmer Steven Duncan has just completed building a compost barn to house his cows. PG.26

News ��3-11 Opinion ��12-13 markets �� 14-15 Management ��16-19 breeding management �� 20-21 abvs ��22-23 Animal Health ��24-27 spring pastures ��28-30 Machinery & Products �� 31-34

Brent Mitchell says the main value of registered cows is the commercial return from more productive and long-lasting cows – that and the personal satisfaction of “not having to milk ugly cows”. Read about their breeding program pages 20-21

lection agreements between Fonterra and dairy farmers in Australia will remain as they are today. The companies said the joint venture could include further cooperation such as joint investment in other Australian food markets for supply to China, as well as development of new dairy products. After gaining regulatory approvals and Fonterra satisfactorily completing the partial tender offer, Fonterra and Beingmate will set up a joint venture to buy Fonterra’s Darnum plant in Australia and establish a distribution agreement to sell Fonterra’s Anmum brand in China. The joint venture will manufacture nutritional powders, including infant formula and growing up milk powder, at Darnum for Beingmate and Fonterra. Beingmate will own 51% of the

JV to satisfy Chinese regulatory requirements and Fonterra 49%, operating the plant under a management agreement. The JV will be governed by a board, and Fonterra and Beingmate will each appoint two directors. Fonterra chief executive Theo Spierings said Beingmate is one of the best partners in China – a top player with modern facilities. With the Chinese Government’s move towards consolidation and focus on food safety and security, within five-six years the infant formula industry will be focused on five-six big domestic companies teamed with the same number of multi-nationals, Mr Spierings said. “It’s good that we’re very proactive here.” Fonterra chief executive Theo Spierings said the deal is a “game changer” providing a direct line into

the infant formula market in China. Beingmate has 10% of China’s infant formula market. Fonterra wants to use Beingmate’s extensive network including 80,000 outlets to access the infant formula market. This market, worth $16 billion, is expected to reach nearly $29 billion by 2017. Beingmate Chairman Mr Wang Zhentai said the proposed partnership was well-aligned with the Chinese government’s desire to see a strengthened focus on quality and consumer safety in the local dairy industry. “We believe this global partnership will play a constructive role in the development of China’s and the global dairy industry as both parties work together to drive a two-way flow of capital, technology, supply and distribution.”

Dairy News AUSTRALIA september 2014

4 // news

Keeping dairy top of mind STATE DAIRY groups and Australian Dairy Farmers have launched a concerted push to ensure all members of state and federal parliaments realise the importance of a strong dairy Free Trade Agreement with China. Regular meetings with state and Federal politicians, social media campaigns and a presence at industry events in China have been conducted over the past month. All state dairy groups have been working with the ADF to help the message gain wider penetration. There is no word when the FTA will be finalised but Trade Minister Andrew Robb has promised a “New Zealand plus” dairy outcome. The high-level trade delegation was in Beijing early this month for the 21st round of talks as the Federal Government aims for an agreement by the end of the year. There has been media speculation that it could be announced as part of the G20 in November. UDV President Tyran Jones said politicians have been supportive of the dairy industry’s position that an FTA is crucial for growth of the industry. “We need to ensure we’re front of mind with as many decision makers as possible,” Mr Jones said. “At the end of the day, it’s not us at the (negotiating) table. “We have to ensure our message is understood by all levels of government so we don’t get traded off for another sector.” Mr Jones and UDV manager Vin Delahunty met with the Coalition’s Dan Tehan, the member for Wannon in the heart of western Victoria dairy country,

who said the federal government is very committed to getting a good result for the dairy industry. “The government appreciates how important this free trade agreement (FTA) is to the dairy industry,” Mr Tehan told media. “If we get a deal to at least match the one that China has with New Zealand it would put between $600 million and $1 billion back into the Australian dairy industry.” Australian Dairy Farmers launched a high profile social media campaign using the hash tag #FTA4dairy this month. ADF president Noel Campbell said the campaign had reached more than 1.6 million people and helped create awareness about the deal. He said the social media blitz was only “a small part” of what the ADF was doing to lobby for an FTA and he would soon return to China with Agriculture Minister Barnaby Joyce. “We continue to work closely with the Federal Government in order to help secure the best possible ChinaAustralia FTA outcome for our dairy industry,” Mr Campbell said. Mr Campbell, who has just returned from the China Dairy Industry Association (CDIA) annual conference in Shanghai, reiterated that the Australian dairy industry has been working closely with its Chinese counterpart to foster a mutually beneficial trade partnership into the future. Australia was one of three countries invited to help open the China Dairy Industry Association annual conference. Dairy Australia trade and strategy group manager Charlie McElhone

UDV president Tyran Jones on his Gippsland dairy farm.

“If we get a deal to at least match the one that China has with New Zealand it would put between $600 million and $1 billion back into the Australian dairy industry.”

attended the conference with other industry representatives. The Australian contingent discussed the Australian dairy industry, allaying fears it could swamp China with product. Russia’s recent ban on Australian food exports has highlighted the need for the Federal Government to deliver a strong Free Trade Agreement with China. VFF President Peter Tuohey said he trusted the Federal Government, under the stewardship of Trade Min-

ister Andrew Robb, would deliver an FTA with China that stripped away tariff barriers that had hampered agriculture’s access to China. “Russia buys $400 million of our $38 billion in food and fibre exports,” Mr Tuohey said. “What’s happened in Russia just highlights the need for us to get strong FTAs in place that open up more markets for Australian exports, such as China. “The simple fact is China is the most populous nation on earth, and we need

to be growing the market for our farm produce with it.” China imported more than 2.1 million tonnes of dairy worth US$8.8 billion and it was the largest importer of milk products in the world. Its imports have increased more than 45% in the past five years. New Zealand supplied 41% of Chinese dairy imports last year. The Australian dairy industry currently faced a 10-15% tariff on its milk and infant formula powder exports into China. New Zealand has negotiated an FTA with China that imposes a tariff of less than 5% on milk powders, which winds down to zero by 2019. “Last year we exported little more than 100,000 tonnes of dairy produce to China, while the Kiwis exported about 853,000 tonnes of milk powders and other key dairy products,” Mr Jones said.

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Dairy NewS AUSTRALIA september 2014

news // 5

MG lowers season forecast to $6/kg A DOWNWARDS revision in

its end of season forecast took the shine off Murray Goulburn’s financial year results, released late last month. The co-op revised its full year forecast for the southern milk region to $6/kg of milk solids, down from the range of $6.15$6.30/kgMS it announced in July. The co-op also said it was unlikely that MG would provide any step-ups this financial year unless there was a “significant improvement” in markets. Murray Goulburn managing director Gary Helou told suppliers although long-term demand from Asia remained strong, current global events forced the decision. “Long term underlying dairy foods demand from Asia remains strong with a net reliability on imports to satisfy the ongoing growth in per capita consumption,” Mr Helou said. “However, international dairy prices have declined significantly from last year’s historic highs mainly due to production growth in exporting countries,

namely New Zealand and the European Union, and the compounding impact of high inventories in China and the recent Russian trade ban on EU, US and Australian dairy imports. “Given global demand growth we anticipate some recovery in international commodity pricing but it is difficult to predict the timing and strength of this change.” Mr Helou said the co-op would continue to assess the impact of the Russian trade ban and further assess China’s reentry in the market. It’s a stark contrast to the previous financial year, when international dairy food prices were at very high levels, underpinned by strong demand from Asia and the Middle East. This helped the co-op achieve record revenues of $2.917 billion - 22% more than the previous year. Despite this, net profit after tax was $29.3 million, down from $34.9 million the previous year – a 17% drop. It will pay an unfranked dividend of 8% on

ordinary shares. The co-op said growth was delivered from across all MG’s major divisions but exports were the shining light, recording 30% growth year-on-year to $1.5 billion. Exports accounted for more than 51% of MG’s revenue. The co-op earned $36 million from the sale of its shares in Warrnambool Cheese and Butter. This money helped it increase its equity by $59 million. MG’s final weighted-average available farmgate milk price paid to its suppliers was up 37% on the previous year at $6.81 per kilogram of milk solids (about 51 cents per litre). Total payments to suppliers for the year were more than $1.7 billion, representing 61% of total sales, compared to 50% of sales last year. MG increased its milk intake in 2013/14 by 8% to 3.4 billion litres of milk. Its share of Australia’s milk pool now represents 37% of Australia’s milk supply, up from 33% last year.

Driving the message home TASMANIAN

DAIRY

farmers are saying ‘Welcome to Legendairy Country’ in a new mission to spread the word about their industry. Two A-frame billboard signs on trailers are sending the welcome message across the state. The billboards are turning up on prominent roadside locations, appropriately enough starting in rich dairy farming paddocks, as part of the Legendairy communication initiative that aims to raise the profile and reputation of the dairy industry. And there are plenty of reasons to celebrate dairy in Tasmania. The state’s milk production reached a record 804.6 million

litres in 2013-14 on the back of a 5.85% increase over the past 12 months. The industry is now worth more than $1 billion a year to the state’s economy and it’s the fastest growing dairy region in Australia. DairyTas executive officer Mark Smith said the two mobile billboards would be placed in farm paddocks near major highways and also used at festivals and events. Along with their welcome message, the signs include details about how the $1 billion dairy industry contributes to the Tasmanian economy. “We’ll be placing them in prime dairy locations to remind people about the importance of dairying and we’ll also take them into non-dairying areas

and to major events to build the profile of the industry,” Mr Smith said. The billboards will be initially sited in farm paddocks off the Bass Highway north of Elizabethtown and approaching Smithton. Mr Smith said dairy farmers were keen to be involved in the using the new trailers to promote the local industry and show their pride in the industry. “We’ll be moving through different areas and won’t interrupt the farm’s paddock rotations or disrupt the cows,” he said. “It’s a new concept and a great way to tell everyone about our tremendous dairy industry here in Tasmania.”

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Dairy News AUSTRALIA september 2014

6 // news: Live exports

Farmers target live export trade rick bayne

MORE AUSTRALIAN dairy farmers are breeding heifers specifically for the export market as they chase a “13th month” milk cheque. However, the trade explosion may not necessarily be coming at the expense of the national milking herd with many farmers aiming to breed more cows to meet both export and herd demands. Export numbers ballooned during the price downturn and continued to grow to record levels over the past year, despite better milk prices. Industry sources say exports are here to stay and are now viewed by many farmers as a regular part of their income. Signals that there won’t be milk price step-ups this year could prompt more farmers to look at the option, at least for part of their herd.

However, there are also indications that numbers may have peaked as the industry aims to grow the national herd. The average $1600-$1650 prices being achieved might not continue with lower global commodity prices and domestic milk prices in China having a dampening effect, despite continuing strong demand from the marketplace. During 2013-14 record numbers of heifers were exported, with 92,629 leaving our shores for a total value of almost $200 million. This followed a huge explosion in 2012-13 when numbers increased from 65,276 to 87,629 as farmers reduced stock to counteract the industry downturn. China is by far the biggest market, buying 78,896 heifers at a total value of $170 million in 2013-14. The next biggest market was Pakistan which purchased 6,425 heifers. At the same time, national herd numbers have stabilised at just below

1.7 million over the past three years. Dairy Australia analyst John Droppert said last year was a record for heifer exports which was one of the factors holding back the national herd. However, Mr Droppert said because farmers were having a good season they could afford to have more cows. “It is certainly a better picture for growth if they are segregating exports a bit more rather than cutting into replacements to help their cash flow,” he said. “It might be more about seizing the opportunity rather than a contingency plan.” Mr Droppert said Dairy Australia was mindful of the potential impact of exports on herd growth but this was not something it could control. “That decision is obviously up to farmers,” he said. Mr Droppert said it was unlikely that milk would ever be exported back to Australia from countries taking our

Exporting heifers helps fine-tune herd BOORCAN

DAIRYFARMER Tim Fleming (pictured) is enjoying dual benefits from entering the export heifer market. Not only is the south-west Victorian farmer enjoying the additional income, he’s using the export option to fine-tune the quality of his herd without risking its quantity. Mr Fleming has joined the growing number of farmers sending heifers to the export market, with about 40 leaving the farm this year. “It’s the first year we’ve done it,” he said. “We’ve bred extra numbers for it because it’s a good opportunity to capitalise on the prices they’re paying and to finetune our herd a bit at the same time.” The Flemings had reared 15 heifers specifically for export. “We had extra numbers,” Mr Fleming

�

said “We didn’t plan on selling so many to export but ended up getting rid of about 40 because of the prices.” They achieved around $1650 for 120kg calves and Mr Fleming is keen to continue exporting in the future, though not at the expense of his milking herd of 400. “What we don’t think will make it as good in the herd, we’ll look at offering them to export,” he said. “Originally I wasn’t overly excited about sending heifers overseas; I’m more into the breeding side of it, but I was happy to let go some of those I wasn’t as interested in and fine-tune our herd.” The farm milks about 400 and rears about 100-120 replacements. Mr Fleming now sees exporting a portion of the heifers as an ongoing option. “It’s been a good result for us,” he said. – Rick Bayne

��

heifers. “It’d take a very different set of circumstances to today – the destinations we’re shipping them to are far from self-sufficient, and in many cases experience far higher costs of production than here,” he said. The ballpark figure quoted for big farms in China is 60-80c/L. Mr Droppert said there was some concern that Australia might be setting up competitors to its own dairy products, “but if we don’t take the opportunity, someone else will”. Holsteins remain the prime exports, although jersey and cross-breed heifers have also been added to the mix. Holstein Australia CEO Graeme Gillan described the heifer export income as “the 13th month milk cheque”. Australia exports more than 50,000 Holstein heifers each year. Mr Gillan said farmers were now planning to breed extra animals specifically for the export market, and not just

for short-term cash returns. “The past 12 months have been exceptional for exports. It helps our members to increase their activity and their cash flow,” he said. Mr Gillan said some farmers turned to the market as a reaction to poor milk prices, but more were looking to both protect the quality of their herd and capitalise on strong export prices. “For a while it was at the expense of domestic production but there was a challenge for farmers to have enough replacements to improve the quality of their herd and so they’re making a longterm switch to develop cattle especially for the export market. “We know there will be ongoing demand for Australian cattle and people are now thinking about exports as part of their long-term business model.” Mr Gillan said Australia was beautifully positioned to capitalise on growing demand, particularly from China.

Dairy NewS AUSTRALIA september 2014

news: live exports // 7

National needs could limit export numbers rick bayne

EXPORT HEIFERS

numbers this year have been “unprecedented,” according to Dairy Livestock Services manager Scott Lord. Mr Lord said farmers were now viewing export heifers as part of their annual income. While many initially turned to the market when milk prices were down and conditions were tough, they have continued to enjoy the revenue. “We’ve seen a huge number of heifers sold to be exported over the past eight months. It creates a fair bit of cash flow for dairy farmers on top of the milk cheque,” Mr Lord said. Mr Lord said it was too early to make a call on what impact the Murray Goulburn price freeze announcement might have, but he expected demand to continue. “It has helped farmers to reduce debt levels and pay for maintenance. It’s been huge, regardless of the milk price announcement.” He predicted demand would continue, particularly from China, and said farmers would want to meet that demand. “I think we’ll continue to see people rely on income from additional export heifers. Not everyone sells all their heifers; some just sell a small proportion. I don’t think that will change and they’ll continue to do what they’ve been doing. Mr Lord said farmers tend to sell more heifers

when milk prices were lower but had now come to rely on the income. He added that many farmers in recent months were holding heifers to increase numbers in their own system. Elders International general manager Cameron Hall said he believed the export market had reached its maximum due to Australian availability. “The demand is still strong but I think the availability and capacity of the Australian dairy sector to increase numbers of heifers is reasonably limited,” Mr Hall said. “A degree of national herd building will also have to occur.” Mr Hall said he suspected the strong export numbers would have had some impact on the national herd where farmers have accepted the high prices for young heifers and held on to their older stock for another year. “That can only happen for one or two years, not on an ongoing basis.” Mr Hall said prices varied mainly on the weight and age of the animals, but also on the intended use, including some purchasing heifers for background operations. He said he was aware of examples where farmers were breeding heifers especially for the export market separately to their replacement stock. However, pressure on pricing could also prove to be a disincentive to Australian exporters. “While there’s strong demand there’s also quite strong pushback from

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buyers around pricing,” Mr Hall said. “Domestic milk prices have fallen in China and that has put downward pressure on pricing.

Easing global commodity prices are also impacting on the future price expectations of the Chinese dairy market and dairy production sector.”

Scott Lord

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Dairy NewS AUSTRALIA september 2014

news // 9

Local council approval for feed pads not required permanent, but that does not mean that cows spend all day using it,” he said. Mr Allan said feedlots for fattening beef cattle clearly fall into the inten-

Rick Bayne

FEARS VICTORIAN

a number of issues, particularly those caused by feeding out hay and silage on wet pastures. Most dairy farmers install a feed pad to grow

and utilise their pastures better, to reduce pugging and waste when feeding hay and silage, and better control allocation among cows in the herd, Mr

Vin Delahunty

sector might operate intensive systems, such as a model where cows are housed in a barn and the feed brought in to them. “During times of climatic variations farmers may periodically use feed pads for extended periods, which may see a majority of the feed supplied to the herd being imported. This is a strategic, short-term management approach and is not classified as intensive as it is not the normal farm operation,” she said. UDV manager Vin Delahunty said most dairy farmers only used feed pads in winter to protect pastures from damage or when grazing feed is limited. However, Mr Delahunty said the UDV wanted to clarify and change definitions relating to 51% or more of feed being brought on to a property to ensure it didn’t impact on dairy farmers. “It is the intention that most dairy farmers are not drawn into this definition but the challenge is ensuring it is structured in a meaningful way so that doesn’t happen,” he said. “We’re still working our way through it to make sure there are no unintentional consequences for the dairy industry.” Mr Delahunty added only a very small number of dairy farmers would bring in more than 50% of their feed. WasteNot Stockfeeders director Terry Allan from Maryborough said most Victorian dairy farms who use feed pads use them as a supplement to feeding cows with grazed pasture. He added that feed pads should not be confused with feedlots. “The feed pad may be

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dairy farmers may have to apply for municipal council planning permits to operate feed pads have been allayed. The concerns followed media coverage about an Echuca beef farmer being forced to apply for a permit to keep using an intensive feeding system, raising fears the rulings may impact on hundreds of dairy farmers with feed pads. A Department of Environment and Primary Industries spokeswoman said extensive animal husbandry, where the animals’ main food source is obtained by grazing, browsing or foraging on plants grown on the land, does not require a permit for a feed pad. “Traditional dairying models, where cattle spend most of their time in the paddock and are supplementary fed only, generally fall into the category of extensive animal husbandry,” the spokeswoman said. However, the United Dairyfarmers of Victoria is still trying to clarify definitions to ensure there are no unintended consequences for farmers. Under Victoria’s Planning Provisions, local government is the responsible authority for considering proposals for intensive animal husbandry which is defined under the Victorian Planning Provisions as “land used to keep or breed farm animals by importing most food from outside the enclosure”. Permanent feeding systems where most (more than 50%) of the feed is imported from outside the enclosure are considered intensive under Victorian Planning Provisions and require an intensive animal husbandry planning permit. The DEPI spokeswoman said this was different to the Victorian dairy industry which is largely regarded as extensive grazing even though a small part of the

sive animal husbandry definition and were covered by state and local government protocols. Dairy feed pads are usually a low-cost solution to

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Allan said. “We point out to dairy farmers that the feed pad is a dining room for feeding cows, not a lounge room for storing cows.”

Dairy News AUSTRALIA september 2014

10 // world news

GDT rule changes raise questions listed objective then the same level of transparency should be given to Trade is defending a proboth participants and nonposal which at first sight participants.” appears set to undermine Williams questioned the transparency of GDT how, if participants are events and even artifiable to see start prices, the cially inflate average prices proposed changes reported. would get around It has proposed GDT’s concern that sales made “Bank analysts will need convincing that sellers can curat a seller’s start of Fonterra’s proposed changes to the rently infer other price be no longer Global Dairy Trade system.” sellers’ starting publicly reported, prices. “Seems to though such results me sellers would be able manner,” was the initial prices achieved for NZ would still be available to to find out if participants response of Westpac’s product”. those with access to the can.” For analysts, if the “Transparency is main- Anne Boniface. bidders’ website. changes do distort averANZ’s Con Williams tained because, first, the GDT says the rule ages, it will be more diffisaid he doesn’t think vast majority of winning change is needed to precult to forecast farmgate the case for the changes prices will continue to vent non-participants in milk prices, he added. “stacks up”. be reported and, second, auctions from using sellThe changes would “Especially with the viewers can now be ers’ start prices for their also mean GDT reports own purposes. It also says assured all reported prices proposed two levels of the move “strengthens the are the outcome of a com- transparency between par- break with convention for reporting auctions. “In ticipants and non-particpetitive bidding process incentive on sellers to set other markets if you get ipants… over at least two bidding attractive starting prices one bid and a product is “To me, what is sold rounds.” so that winning prices sold for that price then it at whatever prices should Currently some are discovered through a has traded and that is the be reported because this reported prices could multi-round competitive market price. I don’t see reflects what has traded. be for a trade of just one bidding process”. why it is any different in “I don’t understand tonne “and therefore not a However, if the only this case.” credible market price,” the why there would be two sales reported were those GDT said a key levels of transparency. If spokesman added. “We attracting two or more driver for the changes you want to achieve the believe our GDT prices bids, the results would is competition law, notably in the EU and US, that says no seller of the same product type should be able to observe another seller’s starting price. Since some non-participants are sellers of dairy products in international dairy markets, it is required to take all practical steps to prevent such sellers from identifying another seller’s starting prices. FONTERRA SUBSIDIARY Global Dairy

exclude the lowest winning bids. Challenged on this, a spokesperson for GDT said the rule would rarely apply and “certainly will not materially reduce the transparency of winning

will be more credible as a result of this change.” Bank analysts will need some convincing, it seems. “For independent observers like us it makes it more difficult to interpret the data in a timely

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

Global prices fall as world supply grows THE GDT price index for the financial year-to-date was down 37% compared to the same period last year, according to Fonterra. The drop in prices is attributed to growing milk supply out of key regionsthe US, EU and New Zealand while demand out of the key Chinese market has eased slightly. “Global milk production and dairy exports continue to grow, while demand from China, although strong compared to last year, has slowed as they work through inventory levels.” The co-op says its assessment of published industry statistics indicates that supply growth temporarily exceeds demand growth, which has contributed to the decline in dairy commodity prices over the past four months. Milk prices in the US and EU remain at relatively high levels, feed costs are low and weather patterns have been benign, supporting production growth. At the same time, Global Trade Information Services (GTIS) data shows that for the month of June, imports into China have fallen month-on-month for the past four months, however WMP was up 93% compared to June last year. Fonterra said milk production in the major dairy exporting countries increased on a year-on-year basis, with the exception of Argentina, where production is lower. Growth has slowed in the EU but full year milk supply is forecast to grow by

2.8% over last year. In the US, milk production has jumped to 1.9% on a year-on-year basis for the month of June. New Zealand ended its 2013-14 production season with 10% more milk than the previous season; In Australia production was maintained at the previous season’s level. Both the US and EU were still exporting more dairy products but the rate of growth in exports was slowing, Fonterra says. Milk powders were the major driver of export growth; more whole milk powder was exported from the US, New Zealand, EU and Uruguay. Skim milk powder exports were also higher from the US, EU, New Zealand and Australia. The US also continued to export more cheese, however, New Zealand, Australia and the EU exported less cheese in May this year. Imports into China continue to grow on a year-on-year basis, with a 52% increase in June 2014 compared to June last year. However growth has slowed, with import volumes decreasing over the past four months. In June 2014 powder imports were 93% higher than June last year, but 24% lower than May 2014. Imports of butter and cheese grew on a year-on-year basis, while whey volumes were flat.

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Dairy NewS AUSTRALIA september 2014

world news // 11

China starts collecting milk in New Zealand CHINA’S DAIRY giant Yili, through its subsidiary Oceania Dairy, has collected its first milk direct from New Zealand farms as commissioning continues at its $214m, 10t/hour capacity plant in South Canterbury. “I’m very pleased,” Oceania chief executive Aidan Johnstone said. “To have our first milk delivered August 4 was pretty good.” Mr Johnstone says as calving begins on Oceania’s 48 supplying farms all milk will be collected by Oceania and processed at the new plant. “It will be our staff working under their directions,” he said. It’s envisaged all product will be exported to China for further processing and retail, except for cream in the early part of the season. Total intake this season is expected to be 170m litres; the original target was 130m litres from 40 farms. It will also take 50m litres from Fonterra, as

permitted under the Dairy Industry Restructuring Act (DIRA), putting total intake at about 220m litres– 73% of the plant’s nominal 300m litre capacity. “So even if there’s no increase in our production capacity next season we’ll still be able to pick up extra milk from local suppliers.” The plant site has plenty of space for expansion but no plans or consent applications for a second dryer have been made. Mr Johnstone said Yili provides an integrated supply chain all the way to retail. “We’re not competing with Fonterra in the open market. Effectively it’s a closed supply chain.” As such, the company’s business is “pretty well protected” from falling global dairy prices, though with Oceania’s farmgate price locked at a 10c/kgMS premium to Fonterra’s milk price, falls in Fonterra’s forecast will be a concern to Oceania’s sup-

Milk production off to flying start in NZ NEW ZEALAND milk collected by Fonterra for the

first two months of the season is 8.3% higher than the same period last year, putting further pressure on global dairy prices. For the first two months of the 2014-15 season June and July - the New Zealand co-op collected 24 million kgMS, 8.3% more than the same period last year; this was mostly driven by good milk yield on North Island farms. Fonterra said milk volumes are building. North Island collection in July reached 13 million kg/MS, one million kg/MS ahead of July last season. “The central and lower regions of the North Island have started the season with favourable conditions, however heavy rain created challenges in Northland with some regions experiencing significant flooding,” Fonterra said. South Island collection in July reached 2 million kg/MS, consistent with July last season. Only a small number of South Island farmers supply milk in winter, but with spring calving starting, milk collection will lift over the coming months. The co-op also reported good milk collection in Australia. Collection in July was 7.6 million kg/MS, which was 11.2% higher than July last year. Fonterra said the growth in milk collection this season is being supported by good pasture growth and Fonterra continuing to attract new milk from other processors. – Sudesh Kissun

pliers, he acknowledges. “Yili is a large corporate, recently ranked tenth-largest dairy company in the world, so compared with past experience in this region the milk cheque is secure.”

Mr Johnstone, trained as an accountant and in the dairy industry for 30 years, does not believe companies such as Oceania will erode milk prices for New Zealand farmers in the long run.

“Fonterra’s payouts have increased as a result of the competitive tension and Fonterra remains far and away the dominant player so there is room for small and middle-sized competitors.”

Oceania Dairy chief executive Aidan Johnstone says the first milk was delivered on August 4.

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Dairy News AUSTRALIA september 2014

12 // OPINION Ruminating

EDITORIAL

Dairy community binds together

milking it... Branded milk best bet in WA

Full marks to WA Farmers for following the lead of the South Australian Dairyfarmers Association and launching their own branded milk later this year. The WA body announced the decision last month and, like SADA Milk, a portion of proceeds will go back to support farmers, including market development. There has been some criticism that the 20 cents a litre will go back to WAFarmers, and not dairy farmers themselves. However, it’s a new form of revenue and no doubt the dairy section will be keeping a close eye on the coffers. WAFarmers’ milk will be officially launched on November 19 at the Heart of WA gala dinner.

One hump or two?

The media and the ultra-hip (we fall into one of those camps) love a “super food” and we think we may have spotted the next Big Thing. It’s camel milk, which is now being pushed as a nutrient-rich drink with some of the wildly speculative claims that often accompany these things (including helping diabetes, autism, digestive problems and food allergies). Camel milk is popular in North Africa, the Middle East and Asia and its popularity is growing in western countries. Potential demand could be limited by availability – fair to say there’s not a huge camel dairy industry in Australia – but that exclusivity may just work in its favour.

Not interested!

An interesting approach to the anti-farming sector was recently made in New Zealand. South Canterbury dairy farmer John Gregan was tired of the carping of antidairying letter writers in his local newspaper, so he invited all the poison pens to visit his farm to see real dairying demonstrated. Despite a string of letters in the Timaru Herald slamming dairy farmers for skinny cows, muddy paddocks, lack of shelter and once-a-day milking, no one took up Gregan’s invitation. Unfortunately, we think it sums up the mindset of some “activists” well.

Advertising Chris Dingle chris@dairynewsaustralia.com.au

Til the cows come home

A Kansas farmer, a trombone and Kiwi star Lorde’s song Royals has become a much-viewed item on YouTube. The farmer serenading his cattle has had three million hits. Sitting in a deck chair, Derek Klingenberg piles into the tune, attracting several dozen cows from over a rise. Clearly this devoted audience loves his moo-sic (sorry). Now he has a whole YouTube page of his agricultural tributes to popular music, including a cover of Happy and a Thrift Shop parody called Ranching Awesome. “It’s weird,” Klingenberg said. “Millions of people all over the world watch my stuff, but I haven’t left the farm. I’m just reading about it on my phone.”

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

GOOD TO see the dairy community work together and make some noise for a Free Trade Agreement with China that has real benefits for Australian dairy. The work undertaken by state lobby groups and the Australian Dairy Farmers in Canberra and China is aimed at putting dairy’s needs in the spotlight. State and federal members and opposition parties are now well aware what the dairy industry expects. As United Dairyfarmers of Victoria president Tyran Jones surmises: We need to make a noise so we won’t be traded off for something else. The social media campaign further raised dairy’s profile by infiltrating people’s Twitter feeds and getting politicians involved on a different level. But the support of farmers is needed as negotiations continue. A phone call or social media campaign in September can be quickly forgotten by the end of the year, when the Prime Minister wants the FTA concluded. Dairy farmers across the country need to make their support of the proposed Free Trade Agreement with China clear. Their best bet is continually reinforcing the necessity for the best deal for dairy with their local politician – at both state and federal level. Keep driving that message. 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. Australian dairy can’t afford to see a replication of the result with Japan, where next to nothing was achieved. Both the Victorian and Federal Governments are under pressure and a successful result in this agreement would be a boost for them, as much as the dairy industry. Farmers can help by writing an email, taking to social media, picking up the phone or calling 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 continue to make this an issue the Government simply can’t ignore. We can’t afford to let dairy be forgotten.

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Dairy NewS AUSTRALIA september 2014

opinion // 13

Who owns our milk? ross mcinnes

THERE is a fundamental question for farmers. Who owns the rights to the produce from your farm? When farmers have grain, hay or cattle for sale, they have the choice to sell to a number of different buyers and markets, but when it comes to milk, the processors demand in their farmer contracts that farmers adhere to what has become dairy’s 11th commandment –“thou shall send all your milk to me –or else”. Our product is perishable, so having a home for that milk every day of the year is an absolute necessity. But we have had some alarming situations in recent years where unsustainable prices have been offered, particularly for tier two milk, but the farmers have had no choice but to supply all of their milk to that processor. The ramifications of the exclusivity clauses on our milk contracts run right throughout the supply chain. The plain facts are that retailers can only have a marketing strategy that includes unsustainably priced store brand milk if the processor that fills the tender can guarantee the volumes required. That may not matter if the domestic milk market was working properly, but with the market failure that we see at the moment caused by the severe discounting of milk, the control of this milk plays an integral part of the whole plot. We are consistently told by the processing sector that store brand milk discounting is the reason for their inability to pay more for our milk from our farmers. The retail sector has been highly critical of the processing sector for their lack of innovation both in processing and marketing. But when you consider that within months of launching new products, their innovative products and packaging have often been mimicked and then sold at a discount price under a retailer’s own brand,

I can fully understand manufacturers being wary with developing new products. So, where do we end up with this whole situation? The retailers are quite happy to commoditise our product and devalue it to attract store customers and to grow the market share and power of their own store brand, the processors are under pressure and dairy farmers are under extreme financial pressure with rising costs and an unsustainable price. The damage done to the British dairy industry by retail discounting has been highlighted many times where farm gate prices crashed, then retailers sought direct supply and achieved two things - it gave them control of the marketplace and also sold their credentials to the public even though everyone knew their initial actions caused the damage in the first place. The blueprint for this strategy is being copied in many markets including Australia. The control of milk is a cornerstone of our future. If the processors cannot achieve enough return for themselves and suppliers out of the marketplace, then do they deserve the control and the exclusive right to our milk? If dual supply type contracts were to be considered, it must be done in a mature fashion where clear obligations are recognised and adhered to by all parties. It is generally recognised that if a processor contracts a certain daily volume then at a minimum roughly that relevant volume should be waiting for the tanker each pickup time. Processors who supply the domestic market need an even and consistent supply pattern from their milk suppliers. Farmers need the ability to be flexible in their systems that meet this market requirement. Farmers well may need some extra price incentive to produce milk at the more costly times of the year to meet the processors’ market requirement. Likewise the farmers may need

some flexibility in the contract to allow them to grow the business or achieve a better price into alternative markets for a seasonal oversupply at times of year when production costs are low. One innovative scheme that seems to deliver a better outcome is the bonus scheme introduced by Parmalat

for its suppliers in Western Australia. This scheme which delivers a worthwhile bonus for milk supplied over expected volumes in the greater autumn period, while not the total solution, looks to be a rare win/win for both farmer and processor. • Ross McInnes is deputy president of the Queensland Dairyfarmers Organisation.

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Dairy News AUSTRALIA september 2014

14 // markets

Global dairy markets unbalanced Dairy NewS aUSTraLia june, 2012

agribusiness // 17

Export demand remains strong

the end of 2014, a situation that is predicted to ease in market is out of balance, cents/litre in March (AUD 41c/L) to 28 With season 2011/12 only a few incremental change in milk production (year-on-year) Euro cents/litre (AUD 36c/L) in April. early 2015. weeks from and is likely to remain so ending, attention is now Profit margins are under pressure in the focused on 2012/13 milk prices as farmCritical to the outuntil 2015. US, and in NZ Fonterra has announced ers consider strategies for the coming the final payout for the 2011/12 season In some domestically-focused look for global cheese Freshagenda’syear. Dairy has been cut from NZ$6.75-$6.85/kg MS regions, renegotiated contracts incorprices will be consumpTrade Simulator (DTS) gLobaL impacT to NZ$6.45-$6.55/kg MS (AUD$4.96porating lower prices and reduced ‘tier JohN DropperT $5.04). one’ access are undermining farmer tion within the US and the model indicates milk Effectively, global dairy markets are confidence and supply stability. For global impact EU. Cheese accounts for output is well ahead of rebalancing. Lower prices will both and promany farmers in export-oriented Shifts in private label jocontracts bills slow production growth and stimulate a lower price outlook relative to cessor rationalisation have seen milk about 70% of manufacproduct demand,regions, a situademand, and as this occurs we will ultithe current season not only adds to the companies adjust their intake requireturing milk utilisation in The EU Commission has farmgate prices are holdtion made worse by Russia 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 to contradict the positive medium term ing demands of a highly pressured retail these regions, with most already announced meaing up, and feed costs are imposing a ban onoutlook agriculrate at which milk production overseas of Asia-driven dairy demand marketplace. Lower contract prices and slows in response to lower prices, the lack of alternative opportunigrowth. consumed internally. sures aimed at balancing heading down,a resulting in supply tural imports (including Cheese is Dairy Australia’s indicative outlook ties present challenges in a market with flows. 2012 milk production in the US those in south-east Asia and the Middle impact of the current financial worries likely to be the In the US at least, internal dairy markets by milk output growth gatherdairy products) from the 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 commodity China’s economic growth, and the value nomic through growth rates that support April (leap year adjusted), early sales domes-private published in the recent 2012: Sit- these challenges, the underlying cheese opening storage aid whilst ingDairy pace. EU, US and Australia. most overof the Australian dollar. uation and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. Howsupplied until the foodservice chanand extending public interIn the EU, milk proWhile dairy indusDemand 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 the end of 2014. ucts remains a positive and will condemand growth in the market. 2.3%the on the previous Zealand providing a degree of cerMS and a full year average priceis range appear to be improvvention until end of year. Newnel duction alsopopulation ahead of tries in the northern hemiThis 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 ing, although the outlook the year. last year, although growth sphere are heading into a 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 picture and summarises the many factors financial crisis and subsequent com- market influence given 95% of NZ milk kets, with commodity prices retreat- with changes in diet and with increasing supply slows and demand pressure on prices. for the European econEU manufacturers are is slowing. Farmgate seasonal low in production, at play; the key theme of the current sit- modity price recovery, farmers in is exported. Argentina is also enjoying steadily over recent months. Butter urbanisation - and also in conjunction as commodandprices cheese consumpwith global population growth. Locally, improves at lower prices. are down some 30% from their However, directing away fromgrowth, omy ing solid production but a sigseen solid milk wholesale prices are regions have uation being that of and re-balancing in the export-oriented the benefits of improved global supply growth (see chart) - with nificant supply gap in Brazil prevents 2011 peaks, whilst powder prices have the domestic market is supported by a supply chain. However, SMP may be ity values have fallen, price tion is not so positive. cheese production, and to a farmgate prices indairy the early already responding 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 perconsumption. Whilst the dairy in oversupply until midhave subsequently been reduced in capita “discretionAmerica. amongstmany those expandproducing drinking milk, manyinternational farmers ern Hemisphere sensitive consumphave ing theSouth ability to do Lower internal softer market part of 2014 are now flowDespite wider economic uncer- most exporting regions. The average market is currently a challenging place face a re-balancing market in the form ing output as their margins increased. ary” buyers inallSouth Eastthat bal- 2015, as both the US and would given powder heading offset ing through to milk output, ofand to be a seller, signs indicate basicinevitably farm gate price mean for milk in France tainty, demand has remainedtion resilient This season, favourable so, weather con-recent of renegotiation supply contracts down, return.the for example, 12% from 32 Euro countries like China andproduct ditions have milk as importing reduced ‘tier one’ supply. EU increase production Asia,ance andwillinultimately particular more is dropped available and ingredient investsomewhat by lower feedfurther enhanced with both EU andand the US access to significantly in the short Middle East and North for export. ments as well as seasonal input costs. well ahead of last year. term. On the plus side, the Africa have aggressively New Zealand’s strong under-capacity that providThe EU has been parIn the US, it has taken new Indian government re-entered the market ing some flexibility in prod- start to the season and the ticularly affected by Rusa while for supply to has removed a 5% price for powders and will help likelihood that displaced uct mix for larger players. sia’s import embargo. respond, with drought austraLian DairY, support on exports to keep place a floor under prices. However, our DTS indi- EU milk and US producWhileASEAN-Australia-New Russia accounts conditions a significant rice and wine exporters to Zealand FTA (AANZFTA). a lid on domestic prices, Our DTS suggests WMP tion will add further to cates cheese is likely to be for 16% of globally traded constraint. However, “Protectionist sentiMalaysia are the biggest ment over agricultural winners in a free trade causing a sharp reduction the commodity in most sig- milk powder supply is cur- oversupply will be corcheese, it takes around a wholesale prices for butter goods is rife and growagreement (FTA) signed rected in late 2014, as rently placing downward nificant over-supply until third of EU cheese exports. and cheese are still high, ing across the globe, so to provide portion pack in SMP exports from the between the two counaustraLian FooD in this context it is pleas(200-330ml) configura- country. tries last month. company Freedom Foods ing Australia has managed tion for beverage prodThe deal, signed after Group Ltd is to build a Critical to market balto forge an agreement seven years of negotianew milk processing plant ucts. with Malaysia that has The NSW location will ance is Chinese demand tions, allows a liberalised to cash in on growing dealt with some sensiprovide access to the most licensing arrangement demand in Asia. tive agricultural issues for Australian liquid milk The plant, to be built in sustainable and economic for milk powders. After a not effectively covered by exporters and allows southeast Australia, will be source of milk. Pactum has strong start to 2014, ChiAANZFTA,” says Fraser. strong links to the Austraaccess for higher value the first Australian greenSealingsharp the deal: Malaysian trade minister Mustapha Mohamed under the following retail products. fields expansion in UHT in lian dairy industry and will nese imports slowed in down 12% fall in FRESHAGENDA’S AUS- “While with Australian counterpart Craig Emerson after signing the deal. AANZFTA agreement expand its arrangements It guarantees Aus10 years. recent months before last week index finishedmostthe TRALIAN export of Australian agri- of August, although with dairy farmers for tralian wine exporters Freedom’s wholly but also through technical Despite the complethrough streamlining key have interestssinceers supply of milk. The new rebounding in July. Mixed thepoints, best tariff treatment owned subsidiary Pactum they recovered to be August at 170.3 losing 12%culture’s or so called ‘behind the tion of this agreement, of rules-of-origin dechad tariffs bound at zero, plant will increase scope Malaysia gives any counAustralia will run the pararewith July.laration processes and over the month. lossopen in valuedairy on much remains to be done border’ restrictions.” and rice two sectry. ItThe also allows plant. Some of its products for Australian milk supply reports about stock levels The FTA was signed on improved marketing incremental – value-added, sustainable are adding to the market arrangements from tors whereThe will be sold in Australia. recent volatility reflects for Australia’s farmers to was driven byaccess weaker commodMay 22 in Kuala Lumpur tap into the full potential arrangements for certain market access improveand export focused. 2023 for Australian rice The company says heightened market uncertainty ity prices, with the Australian by Australia’s Trade and of the Asian region and commodities. ments have been negotiInitially the plant will uncertainty, however our with all tariffs eliminated given Asian consumCompetiveness MinisThe Malaysian market beyond. ated under the Malaysian produce 250ml and 1L 2026. ers’ rising incomes and DTS assumption is that in the wake of Russia’s import dollar helpingby for a change, finter 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 Malaysian counterpart now throw its attention lion in Australia agriculChinese import demand trade deal was line capable of 100 milsaysweaker the trade at “This there will grow for qualban. ishing AugustFederation slightly towards ensuring agricul- Mustapa Mohamed. tural exports – including also particularly imporlion L. The processing and deal will improve interity dairy products from will revive late in 2014 and Current movements no doubt US$0.9297, down 1% on the preEmerson 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 centre in completed FTAs will be as well-positioned sugar export and that have been less carbon, use less water, into 2015. such as Australia, whose reflect expectations thatmarket cheese, vious month. for Australian agricultural as dairy in the Malaysian market fifth-largest wheat export with South Korea, Japan, facing a competitive disand be more energy-effigoods. milk is well regarded. Chinese buying usually particularly the EU will be China and Indonesia as as Malaysia’s closest tradSMP lost the ground market. advantage in Malaysia from cient than equivalent “Aftermost seven years of The new plant will ing partners in ASEAN, With anand annuallooking economic immediate priorities. compared with New Zea- supply UHT facilities in Austra- increases in the New Year negotiation, the NFFprices is allow Pactum to meet in abundant during August, with spot “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 for a FTA new home.Malaysia Additional milk with enormous growth falling 15%. Whole milk powder The FTA will guarantee forms an imporwith expects site preparation to as NZ tariff rates fall and challenging it has been to a completed UHT dairy milk, and add tariff-free entry for 97.6% opportunities and where tant part of the ‘Asian Malaysia in place.” begin in October 2012 and buyers try and get in before this FTA with to capacity for valuediverted from cheese in the EU shed a furthercomplete 9% in value after 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 safeguards are triggered. 6 months for prices to translate step ups in southern prices under and US is likely to wind up in falling 14% during July, while from Australia once it trade in agriculture still opportunity this presents nals some administrative Pactum makes UHT dent Duncan Fraser says. its Sydney factory. Pactum 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 capabiliChina continues to play a into actual returns, depending current market conditions. butter and SMP. butter prices number fell 12% in August, rise to 99% by 2017. tariffs that restrict trade producers, says Fraser. and proprietary customers. of gaps within the lian agricultural exportties at the Sydney plant critical role in the global The index is a lead indicator on the timing of contract negotiThe export index has now lost after being down 16% in July. dairy market, notwithCheese has been remark- 19% of its value over the past 12 of average export returns - based ations. It was set to 100 in Janu17 last quarter, 6/06/12 1:41 PM standing the increased parmonths, driven by large falls in on spot prices, currency move- ary 2000. ably steady 016-017.indd over the ticipation of other regions ments and export mix. The index • For weekly updates, follow us on while prices for other commodi- spot powder prices. that we are seeing at presIt is not surprising dairy com- measures current market senti- Twitter or visit http://www.freshaties were in rapid retreat. Howent. ever, cheese spot prices were panies are seeing little scope for ment, but in reality it takes 3 to genda.com.au/ The current situation THE GLOBAL dairy

Malaysia FTA benefits dairy Freedom

Foods plant targets Asia

Index loses more ground in August

0102_0513_OFSDairyNews_80x265AU_FA.indd 1

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illustrates the inherent volatility of the global dairy market, given the lags between prices, supply and the pricesensitive nature of demand from developing-world customers. Added to that, the short term loss of a significant market like Russia through a policy decision to block trade will worsen the over-supply situation for the rest of the world. Our DTS analysis shows that cheese, Australia’s most important dairy export, is particularly susceptible to the current over-supply situation given Russia’s importance in cheese trade, but also its large share of northern hemisphere production. Nevertheless, with lower prices supporting demand, and supply growth slowing in early 2015, the world dairy market is expected to move back into balance, bringing with it greater support for commodity prices. • 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.

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Dairy NewS AUSTRALIA september 2014

markets // 15

Countries seek alternatives after Russian ban Export demand remains strong Dairy NewS aUSTraLia june, 2012

agribusiness // 17

Commission has so far resisted calls THERE’S RARELY a dull moment in to revisit these measures. dairy these days, and in many ways the cents/litre in March (AUD 41c/L) to 28 With season 2011/12 only a few incremental change in milk production (year-on-year) Subsidised storage through the Euro cents/litre (AUD 36c/L) in April. past month has been an eventful one. weeks from ending, attention is now margins are under pressure in the on 2012/13 milk prices as farmless distortionary Private Storage Aid Profit Perhaps thefocused most sensational US, and in NZ Fonterra has announced ers consider strategies for the coming (PSA) scheme is the main support the final payout for the 2011/12 season development however, was the year. In some domestically-focused has been cut from NZ$6.75-$6.85/kg MS regions, renegotiated contracts incormechanism enacted so far. announcement by the Russian governgLobaL impacT to NZ$6.45-$6.55/kg MS (AUD$4.96porating lower prices and reduced ‘tier JohN DropperT one’ access are undermining There are a number of other possi- $5.04). ment of an embargo on food importsfarmer Effectively, global dairy markets are confidence and supply stability. For bilities, all of which are likely to occur rebalancing. Lower prices will both from the EU, US, Canada, Australia many farmers in export-oriented Shifts in private label contracts and proglobal impact slow production growth and stimulate a lowerto price outlook relative to cessor rationalisation have seen milk at least in part. and Norway (in regions, addition Ukraine, John Droppert demand, and as this occurs we will ultiadjust their intake requirethe current season not only adds to the companies The first is that a proportion of EU mately see a price recovery. Key factors banned in July). challenges of doing business, but seems ments and pricing to meet the changto contradict the positive milk will be diverted in raw form to to watch on the global scene will be the It’s far too early to tell whatmedium the term ing demands of a highly pressured retail rate at which milk production overseas outlook of Asia-driven dairy demand marketplace. Lower contract prices and neighbouring Belarus, where it can be slows in response to lower prices, the surplus product onto an already weak exact fallout will be, but a high level a lack of alternative supply opportunigrowth. Dairy Australia’s indicative outlook ties present challenges in a market with flows. 2012 milk production in the US those in south-east Asia and the Middle impact of the current financial worries processed and enter Russia as Belaruappraisal of theforRussian market and global market. 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 year adjusted), early nomic growth rates that support China’s economic growth, and the value challenges, the underlyingsource domes- April published in the recent Dairy will 2012: Sit- these sianwhilst exports. Russia’s main of(leap dairy some of the potential eventualities 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. Under the umbrella of its customs imports is the European Union, supplyhelp to interpretuation developments as they 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 ucts remains a positive and will condemand growth the market. 2.3% on of the previous New Zealand population a degree of cer- (70%) MS and a full year average price range ing union with Russia andinKazakhstan, almostproviding 438,000 tonnes the year. unfold. Russian President the middle class in This situation has seen the scales tinue to grow with between $4.50 and $4.90/kg MS. The tainty beyond the current adjustments. production is widely expected to finish exports tonnes reported Putin on markets a horse. With dairy exports to Russia justpic- 629,000 emerging such as China, favour oflarge buyers volumes in dairy mar- large this season up 10% onBelarus last year - aalready huge tip in In the seasons following the 2008in 2013. report considers the wider market prices capretreat- with changes in diet and with increasing market influence of NZproducts milk kets, with and subsequent turetonnes and summarises the many factors financial dairy thatcommodity aren’t fully Just crisis over half of comRussia’s dairy givenof95% short of 629,000 in 2013, the at play; the key theme of the current sit- modity price recovery, farmers in is exported. Argentina is also enjoying steadily over recent months. Butter urbanisation - and also in conjunction Smuggling of Locally, very small volumes inathe data. by regions volume were country is an important market – the population growth. prices are trade down some 30% from their with global solid form production tured growth, but sig- official export-oriented have seen solid iningthe uation being that of re-balancing in the imports market is supported a 2011 peaks, whilst powder prices have themay prevents supply growth (see chart) - with nificant supply gap in Brazil dairy supply chain. also occur, butbymainstream supThis approach will be limited pri- domestic ofglobal cheese (319,000 tonnes), of which world’s second largest after China. 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 perpliers are unlikely to engage in this (for marily by the distances and logistics nearly 260,000 tonnes came from the Australia accounted for less than capita consumption. Whilst the dairy have subsequently been reduced in producing drinking milk, many farmers ern Hemisphere amongst those expanding South America. Despite wider economic uncer- most exporting regions. The average market is currently a challenging place face a re-balancing market in the form ing output as their margins increased. obvious reasons). involved in the shipment of large volEU. 3% of this volume in 2013, even after a 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 balultimately return. for example, 12%the from 32 Euro ance willIn as importing countries like China and milk, enhanced reduced to ‘tier one’ supply. ditions Australia’s case, linkages with umes of raw asdropped well as availThehave keyfurther concern formilkmany market boost in exports and that wasaccess largely driven by a temporary ban on Fonterra (which participants is where this cheese will ability of spare processing capacity New Zealand through Fonterra could in Belarus – but see a rebalancing at the Oceania level, go now the Russian restricted New Zealand access). it could partially whereby butter that may have been In turn, although Russia took around market is closed; or 84% of Russia’s offset the net exported to Australia is instead directed 46% of Australia’s butter exports in the alternatively, where 2013 dairy import to Russia, in lieu of Australian origin impact of the ban. the milk that would 2013/14 financialaustraLian year, it ranked as our DairY, ASEAN-Australia-New volume came rice and wine exporters to Zealand FTA (AANZFTA). product. Another option have been used to 12th largest market, accounting for only “Protectionist sentiMalaysia are the biggest Though the conflict in eastern that would mainment overmake agricultural this cheese will from countries winners in a free trade 3% of our total dairy exports. goods is rife and growagreement (FTA) signed that are now Ukraine appears to be far from over, tain the global be directed. Direct impacts on Australia are ing across the globe, so to provide portion pack between the two counaustraLian FooD in this is pleas- worst-case (200-330ml) configuramonth. company Freedom Foods there is also the possibility that the market balance therefore likely totries belast relatively limited – context itThe banned. ing Australia has managed tion for beverage prodThe deal, signed after Group Ltd is to build a embargo will be softened, or indeed is the shipment scenario would see though they will seven fall disproportionately to forge an agreement years of negotianew milk processing plant ucts. with Malaysia thatvolumes has The NSW location will tions, allows a liberalised to cash infrom on growinglifted should negotiations between of product large of Euroon those companies that have plants dealt with some sensiprovide access to the most licensing arrangement demand in Asia. the parties involved produce a politibanned sources to Russia via third counpean cheese flood onto world markets, approved for export to Russia. tive agricultural issues for Australian liquid milk The plant, to be built in sustainable and economic not effectively covered by those (such as Japan) where source of milk. Pactum has allows is also southeast Australia, will calbesolution. tries (transhipment). including While small,exporters the and effect AANZFTA,” says Fraser. strong links to the Austraaccess for higher value the first Australian greenRecent include the Authorities in Switzerland hasSealing a strong presence. enhanced by the that Russian the deal: Malaysian trade minister Mustapha Mohamed “WhileAustralia under the lian dairyamendments industry and will retail fact products. fields(which expansion in UHT in with Australian counterpart Craig Emerson after signing the deal. AANZFTA agreement expand its arrangements It guarantees Aus10 years. exemption of lactose free dairy prodhas avoided the embargo) have flagged The possibility of a boost in powder buyers tend to pay a premium price for most of Australian agriwith dairy farmers for tralian wine exporters Freedom’s wholly also through ers through streamlining culture’s key interests supply ofcould milk. Theconceivably new the best tariffgovernment’s treatment owned ucts, which be broadthat theybutwill not betechnical supportive ofsubsidiary such Pactum production has already weighed onDespite SMPthe complebutter, thanks to their or so called ‘behind the tion of this agreement, of rules-of-origin dechad tariffs bound at zero, plant will increase scope Malaysia gives any counAustralia will run the ened. endeavours, though others (such as pricing, aggravating the current market accreditation requirements limiting the 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 ambiguous. for Australia’s farmers to improved marketing incremental – value-added, sustainable access arrangements will be sold in Australia. This may seem unlikely, however Belarus) have been more number of approved suppliers.from tors whereweakness. 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 Russian authorities do In any case however, transhipment A return to EU market intervention The biggest concerns from an Ausby Australia’s Trade and of the Asian region and commodities. ments have been negotiInitially the plant will face a significant with all tariffs eliminated given Asian consumCompetiveness beyond. The Malaysian market subsidies ated undermechanisms the Malaysian produce and 1L reasonably priced by 2026. ers’ rising challenge in250ml keeping potential is likely Ministo be limited byincomes the and such as export tralian perspective surround the inditer 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 food on the shelves. extensive documentation requirements or intervention purchases would also rect effects of this ban, which generates Malaysian 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 qualtowards ensuring agricul- Mustapa Mohamed. tural exports – including also particularly imporlion L. The processing and will improve interity dairy products from Eighty-four percent of Russia’s 2013 for import into Russia. be damaging, however the European uncertainty anddeal will potentially push Emerson says Australia ture remains front and

Malaysia FTA benefits dairy Freedom

Foods plant targets Asia

national market access for Australian agricultural goods. “After seven years of negotiation, the NFF is under no illusion of how challenging it has been to complete this FTA with Malaysia,” NFF vice president Duncan Fraser says. The FTA will fill a number of gaps within the

tant for sectors such as dairy that have been facing a competitive disadvantage in Malaysia compared with New Zealand which already has a completed FTA with Malaysia in place.” The FTA also signals some administrative benefits for Australian agricultural export-

being its fourth-largest sugar export market and fifth-largest wheat export market. With an annual economic growth at about 5%, Malaysia forms an important part of the ‘Asian Century’ story and the opportunity this presents for Australian agricultural producers, says Fraser.

centre in completed FTAs with South Korea, Japan, China and Indonesia as immediate priorities. “These are all markets with enormous growth opportunities and where significant barriers to trade in agriculture still exist, not only through tariffs that restrict trade

will be as well-positioned in the Malaysian market as Malaysia’s closest trading partners in ASEAN, and in some cases better. The FTA will guarantee tariff-free entry for 97.6% of current goods exports from Australia once it enters into force. This will rise to 99% by 2017.

low-cost production bases such as Australia, whose milk is well regarded. The new plant will allow Pactum to meet growing demand for UHT dairy milk, and add to capacity for valueadded beverages at its Sydney factory. Pactum is expanding its capabilities at the Sydney plant

packaging plant will emit less carbon, use less water, and be more energy-efficient than equivalent UHT facilities in Australia and SE Asia. Pactum expects site preparation to begin in October 2012 and start-up by mid-2013. Pactum makes UHT products for private label and proprietary customers.

dairy import volume came from countries that are now banned – a significant volume of product to source at short notice from alternative producers such as South America, Turkey and New Zealand. Opinion polls suggest Russia’s government enjoys strong support from its citizens, so some inconvenience and forced substitution will be willingly accepted. Across all food groups however, prolonged sacrifices in quality and availability may lead to consumer pressure that ultimately helps restore normal trading conditions. In the meantime, the embargo will continue to form one part of the broader market picture of strong global supply and sluggish demand. Some or all of the above factors will likely help mitigate its effects, however the restoration of balance at the wider market level will be the key to improved farmgate returns in the months ahead. • John Droppert is industry analyst with Dairy Australia.

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Dairy News AUSTRALIA september 2014

16 // management

All-in-one shed a giant In a few weeks the largest all-in-one dairy shed in the southern hemisphere, possibly the world, will fill with cows and start pumping out milk. Andrew Swallow reports. AS YOU drive up the

back road off SH1 towards Van Leeuwen Group’s latest dairy development in South Canterbury the scale of it isn’t immediately obvious. The long, gentlypitched roof of the 1500cow free-stall barn blends

into the skyline and the 7m tall effluent tank on the flats below looks fairly standard. It’s only when you notice the apparently miniature – and now redundant – woolshed next to it that the size of the development hits home.

“We think it’s the biggest all-in-one shed in the southern hemisphere, possibly the world,” says Aad van Leeuwen as we walk up one of the barn’s two feeding lanes towards the central control room and 24 robotic milkers. The control room is

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raised over the main cow floor, providing an overview of the milkers and feeding lanes and stalls beyond. Each feed lane is 193m long with rubber-matted walkways for the cows on either side and latex-lined free-stalls. “The rubber

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Next step: Aad and Wilma Van Leeuwen’s 1500-cow free-stall barn near Makikihi.

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❱❱ Super-sized robotic shed ❱❱ 1.3ha footprint free-stall barn ❱❱ 1500 cows milked by 24 DeLaval robots ❱❱ Feed mostly cut, carried and ensiled off surrounding 600ha ❱❱ Year-round milking ❱❱ Target 800-850kgMS/cow/300+ day lactation. mats in the walkways are the latest development, the ultimate in cow care.” They also mean there’s no need to transition the cows onto concrete – they can go in full-time straight off grass, and they will mean there’s no need to regroove concrete after several years to prevent slips. Experience with his other sheds is that the cows enjoy the indoor facilities. “If you walk through the sheds you find the cows are content and there are virtually no lameness issues, which is often the first thing people raise when you say you’re going to house cows. Because we’re using robotic milking there’s no forcing of cows into the shed: it’s their own decision to be milked. You

might have to get one or two lazy ones in but that’s it. They’re also in good [body] condition.” While he’s used Lely’s Astronaut milkers in his other two free-stall barns – both 500-cow facilities built in 2009 – for the new shed he’s trying DeLaval’s VMS. “We lined up both and DeLaval’s quote was quite sharp and there are a few things I liked the look of on the DeLaval. “This is an ideal opportunity to line up the two systems over the next five years or so and see how they work next to each other, to see which are the most reliable and economical.” A less complicated milking arm with fewer electronics on it, a milking bail that adjusts to the

size of the cow and a “very good” pre-milking udder preparation with water and air were among the things that appealed with the VMS. As with the Lely systems, every cow’s production, every milking, will be recorded so staff can monitor performance from the control room. The aim is for an average 24-25 litres/ cow/day at 8.5% milksolids. “We’ve got a very average herd going in, put together out of our other herds plus some surplus heifers.” The herd will be mated with Holstein Friesians and calved year-round. In due course he expects to get production up to 800-850kgMS/cow, with cows going out of the shed at drying off and coming back in after calving. Feeds will include grass and lucerne, fresh or ensiled, and maize silage, plus a few extras such as Canola meal, mixed in a 46m3, 25 tonne capacity three-axle mixer wagon and fed out once a day along the lanes, plus a pellet ration offered in the robotic milkers. Total ration will typically pro-

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Dairy NewS AUSTRALIA september 2014

management // 17

achievement vide 250-260MJ ME/cow, at 17-17.5% protein. “With the right balance of feed even ordinary cows will give two to two-and-ahalf times the production off conventional grass systems.” Nearly all the feed will be home-grown, cut and carried off the surrounding 600ha. It was the size of the block that persuaded Aad and wife Wilma to go for such a big barn. “We thought our next free-stall barn (his first two are 500-cow units) would be 1000 or 1200 cows but because of the land available we went for 1500. It’s been a bit of a challenge getting it through the consent process and built and I wouldn’t think you’d want to go much bigger, but we’re pleased with how it’s turning out.” The building’s been done by Advanced Cow Barns, Winton, who also designed the main structure, with various other local contractors. The set-up for the robots was van Leeuwen’s. In the shed alone nearly 2000m3 of concrete’s been poured, and including the surrounding infrastructure, the total’s 2500m3. Completion will be about a month behind schedule, largely due to a wet autumn and early winter, but once the cows take up residence next month it will soon be running at capacity. “We’ve found we can get most cows trained to using

Instant access: rubber matting in laneways for cows to walk straight in.

the robots in one to two weeks.” Effluent from the laneways will be continually cleared by automatic chain-pulled scrapers, draining down into the 7m deep, 23.5m radius tank. “We’ve got enough capacity for half a year.” The aim is to use the effluent as base fertiliser for the feed crops surrounding the shed, with a 20,000L slurry tanker applying it by dribble-bar or injector. “With injection we’re burying it in the soil so there’s no loss of nutrient to the air or smell to annoy the neighbours. It’s very effective. “We’ve been doing it for three years.” The dribble-bar is used on existing grassland and lucerne. The shed will be manned 24/7, with a ratio of 200-250 cows/man during daytime, including feeding out. Overall running cost of the farm will be about $4.25/kgMS. Capital cost of the barn and surrounding infrastructure is about $2500/cow, but the robots “double it”, said Mr van Leeuwen. Nonetheless, he says it should be profitable at about a $5.75/kgMS payout, and the returns accelerate above that, far more than off a traditional outdoor grazed system because of the much higher per cow, and per man, milk production. “We’ve done the traditional system for a long time and we felt hous-

ing our cows was the next step,” he explains, reflecting on 31 years in the New Zealand dairy industry since emigrating from Holland in 1983. “It means we can look after our cows, and the environment we’re farming in, better. We’re more in control.”

View from the bridge: a dozen DeLaval robots are installed inside the shed.

Dairy News AUSTRALIA september 2014

18 // management

Variable feed quality causes feedpad problems FATHER AND son

dairy farmers Kevin Jenkins senior and junior remember every tiring hour of pouring 986 bags of cement to build a feedpad on their Jancourt East farm in Western Victoria. Now it’s rarely used. Although the Jenkins don’t regret adding the

facility to their feeding regime, they say feed costs reduced its viability and a preference for homegrown grazing reduced its use. “Sometimes we may use it if it gets very wet so we can get out of the paddocks,” Kevin junior said. “It all depends on the

price of feed we have to buy to put in it.” The feedpad was built with a roof, making it a good option during the wet winters experienced in south-west Victoria. But for a farm that prides itself on making good quality home-grown feed, buying often unre-

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liable and expensive imported feed didn’t work. With a fairly high stocking rate on 175ha hosting a milking herd of 186 and calves and heifers bringing the total to around 350, the feedpad seemed like a good idea. “We carry a lot of young stock,” Kevin junior said. “We have nearly 350 head all told, including heifers and calves, and have no run-off blocks so we carry everything on here. “Those cows we’re milking now are not roaming over 430 acres. We’re pretty well stocked up.” The feedpad was introduced “because we wanted to feed the cows better”, Kevin junior said. They started with brewer’s grain and potato mash. However, the brewer’s grain had to be fed fresh and would develop a blue mould after a few days and the cows wouldn’t touch it. The cows were better with the potato mash but costs and reliability of supply became a problem. “It was really unreliable,” Kevin junior said.

Kevin Jenkins junior and Kevin Jenkins senior.

“When we really wanted feed you couldn’t get it and when you didn’t want it, you had too much of it. It wasn’t consistent in the supply which made it very frustrating.” They were also concerned about quality and the time involved in rotating groups of cows through the system and limiting their feeds to about 10 minutes for best health results. “It’s very labour intensive. It took dad and me a full day just to fill it up.” If they had their time again the Jenkins would probably still install a feedpad, but Kevin junior added that it would have to be more cost effective. “You’d have to get the feed a lot cheaper and we’d have to get a decent price for our milk to make it worthwhile.” Kevin senior, who was one of the original settlers in the Heytesbury settlement in 1962, is more direct. “The feedpad…you can have it,” he said. “We’ve gone back to the old feed system,” Kevin junior added. “The feedpad is always there as a backstop. If the weather gets real bad and prices

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junior said. They are concentrating on supplying good quality feed to the herd to address the problem. Nearly all the feed is home grown. “Normally the best hay we cut ourselves – it’s good stuff,” Kevin junior said. With teenager John starting as a third generation on the farm as a trainee, the Jenkins family is looking to the future with plans for a new dairy and also looking at an option to buy more land. “The dairy has had it,” Kevin junior said. “We’re starting with a new milk room and then we’ll decide what to do with the rest of the dairy.” He believes the keys to success are having a plan and a goal, not going into dairy with rose-coloured glasses and having outside interests. “You can’t stand idle but you don’t want unnecessary debt either,” Kevin junior said. “I love the outdoors, being my own boss and being independent. No two years are the same. Milking, I don’t really like that much, but you can’t have everything right.”

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are good we could start it again. It’s good to have the options. “Last year was very wet and it got cold early and we didn’t have any growth. This year has been opposite,” Kevin junior said. “It was warm and everyone had growth and we put on more fertiliser because we’ve got so many cows on and we have to feed them well. “Everything was going along really good until the cold snap; then everything went pear shaped. It made the cows and the calves crook, it’s been a very stressful year but I think it will turn around and we’ll have a really good season, depending on the weather.” The farm has wellestablished pastures of fog, ryegrass and clover. One of the joys of farming for the family is the animals and breeding, however, the in-calf rate isn’t too good. “We’re not sure why but hope it gets better. It could have been the poor quality silage, we’re not sure. We made better hay than silage last year; the silage was rubbish and we never used all of it,” Kevin

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Dairy NewS AUSTRALIA september 2014

breeding management // 19

Concepts apply to all farm systems Rick Bayne

FARMERS SHOULD

not only look at the iPad and the Excel spreadsheets but also understand the concepts of farming right. That’s the view of northern Victorian farm consultant Phil Shannon who says many successful farmers already use a concept-based approach to decision making - it’s how they know what to do in what situation. Mr Shannon told a WestVic Dairy InCharge Profitable Feeding Systems session at Cobden that data is useful but farmers need to be the filter for information they receive and make decisions that are customised to their personal business. “There is no one right farm system but the concepts will apply equally to every farm system,” he said. “Regardless of your system, a good operator will understand and apply concepts in a range of external conditions to maximise profit.” Mr Shannon advised farmers to separate investment decisions from operational decisions and to be mindful of pressure to grow production. “Operating a business is about using your invest-

Phil Shannon.

ments to generate a surplus,” he said. “Regardless of how you invested, the operating concepts should be the same. The challenge is making investment decisions and understanding the potential consequences.” Farmers should be wary of over-reacting to market forces and going too far away from their business concepts. “Most advice will be for you to produce more milk but you have to make decisions that suit your business,” Mr Shannon said. “You should use advice but add up if it’s taking you in the right direction.” Mr Shannon said if farmers were confident of milk price in relation to input costs they could grow through ‘tweaks’ to their system. “Dairy farmers have limited flexibility to respond to significant change in feed and milk prices,” he said. “Good farmers find it hard to

ramp up production without investing capital and if the price goes down and you’ve invested too much capital it is difficult to find areas to cut costs without reducing margins. “Extra cows might mean extra stress and extra labour and extra costs, but not necessarily extra profit. There is then a risk if you have more cows and the milk price comes down. “Your investment decision is the bed you have to lie in. Trying to flex too much to make the most out of a season can create a rod for your back. All good operational decisions are based on rigorous application of marginal thinking.” Mr Shannon said that chasing a milk production target was dangerous. “It has to be based on your season and your farming system,” he said. “Don’t take your eye off the longterm picture by making short-term changes.”

Be wary of expanding with outpaddock feed Rick Bayne

INCREASING HERD size on the basis of having an outpaddock might be a false economy, according to a Victorian consultant. Speaking at an InCharge Profitable Feeding Systems session at Cobden run by WestVic Dairy, farm consultant Phil Shannon questioned the cost of producing feed on outpaddocks, and also said farmers should be careful not to focus too heavily on feed pads using imported feed. “It worries me when farmers increase herd size based on having an outpaddock,” he said. “It is more expensive than direct grazing.” Mr Shannon urged farmers to expose their herds to more direct grazing. “Feeding is a major part of every farming system. If you juggle the feeding correctly, farms will generally do well and optimising resources and using your land to

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leaving 4-6cm residual behind were important keys to success. But it’s a delicate balancing act. Mr Shannon said farmers shouldn’t put in a concentrate that’s more expensive and leave behind good quality grass that could have been eaten. “That’s because you are just swapping a cheap feed source for an expensive one and it comes at a cost at the next round.” Timing pasture rotations is critical and ryegrass should be grazed at the 2-3 leaf stage, he said. “Look at where the cow is grazing. If she didn’t eat it last time, she won’t eat it next time. Instead of being there for 30 days it’s now been there for 60 days. Last time you let her get away with it, so she won’t go lower.” Mr Shannon said feeding cows has become over-complicated but farmers needed relatively cheap feed to maintain a competitive advantage. “Let’s just come back to the basics,” he said.

produce feed is an important part of that,” he said. “The moment you process and store feed, the more expensive it becomes, and it’s rare that the feed you’re growing at home is lower in fibre than the feed you’re buying.” Farmers should be aware of “the law of diminishing returns” when feeding and make sure the last kilogram fed turns up in the vat. “More feed doesn’t always mean more milk. As we push for higher production, we don’t get as much return for each kilogram we put in,” Mr Shannon said. “We get to the stage where an extra kilo we put in doesn’t result in extra milk.” Farmers should concentrate on getting their cows to graze only on pastures grown since the last feed. Mr Shannon said that grazing rules remain the same regardless of the type of farm. He said getting cows on paddocks at the right leaf stage and

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Dairy News AUSTRALIA september 2014

20 // breeding management

THE MAIN value of registered cows is the commercial return from more productive and long-lasting cows, according to northern Victorian dairy farmers Brent and Kim Mitchell. That and, for Brent, the personal satisfaction of

“not having to milk ugly cows”. The Mitchells dairy at Bamawm near Echuca in northern Victoria, milking off 100ha all of which can be flood irrigated. Mr Mitchell’s parents help them manage another 180ha in outblocks that are used for replacement stock and fodder production. The feeding system

is pasture based, with 2 tonnes grain/cow/year fed at the dairy. The herd currently averages about 8500L/ cow with the aim of lifting that to 9000L in the near future. About 35% of the herd is registered Holstein, 50% commercial Holsteins and 15% are crossbreds. The herd calves in three batches: 30% in March/

April, 50% in July/August and 20% in Nov/Dec. Having bought the farm three years ago, the Mitchells have not been in a position to sell animals recently, instead building numbers. Now they have reached their optimum herd size of 250 milkers, the couple will continue to rear as many heifer calves as they can. This will give

them more options for culling and any surplus will be sold. They aim to increase the proportion of registered animals in the herd. “At the moment our challenge is to improve fertility. The move to calving in three batches was to improve in calf rates and get rid of the mop up bull so that all our cows will be

joined to AI.” The couple’s aim is to breed highly productive, functional and long lasting Holsteins. “Initially I was very focussed on type but over time our breeding objective has evolved to include production and longevity as well,” Brent said. “Our cows have to walk, eat and endure a lot of heat in the summer. We want to breed cows that are going to last in the herd under these conditions and we also need to improve herd fertility. “We are looking for a wide muzzle so they can eat as much grass as we can provide; and big open nostrils for breathing and cooling,” he said. Mr Mitchell enjoys spending time researching sires to use over the herd. “I short list on the balance of production, components, type and longevity. And within the shortlist I look at individual type traits particularly high pins, body depth and dairy strength. I don’t just look at the figures. I like to look at photos of the bulls and his parents, and I take a lot of notice of cow families.” Classification day Mr Mitchell looks forward to classification days. “It is human nature to see your own cows through rose coloured glasses. Classification helps us be more realistic about out cows. I learn a lot from every class day. “We aim for our heifers to classify good plus initially and to reach VG

Who:

Brent and Kim Mitchell Where:

Bamawm What:

Registered herd

after three calvings.” Over the years three or four cows have classified excellent. “We still get a buzz when a cow classifies Ex,” he said. ET program They flush five or six cows a year, resulting in the birth of 10 to 12 ET calves. “The challenges are the cost and finding recipients but we have some promising progeny in the milking herd,” Mr Mitchell said. “We’ve also used a few imported embryos. We work with some retired dairy farmers who still want to own cows. They buy imported embryos which are implanted in our recipients – usually beef cows or some lower-producing dairy cows. “This arrangement has allowed us to get some highly regarded cow families in the herd. We have some heifers from the Barbie family from Regancrest in the US and we have pregnancies from the Barbara cow family originating in Canada.” Purchased cows When finances permit,

Brent and Kim buy cows, usually to introduce a new cow family into the herd. In 2012 they bought a young Damion Satin heifer, Sensei Damion Satin, from Sensei Holsteins. “We flushed her before her first joining and she scored VG 85 after her first calf. She’s had a heifer calf naturally and four ET daughters, and there’s more eggs in the tank.

Dairy NewS AUSTRALIA september 2014

ABVs // 21

commercial returns She’s also produced well in her first lactation: 5806L in the first 158 days.” Brent and Kim were so pleased with her performance that they bought another Satin family member at IDW 2014, Wattlebank Braxton Satin. She is a heifer, joined to Guthrie and they can’t wait for her to calve in Spring. And their most recent purchase was Clydebank Shottle Leona-ET from master breeders Ross and Linda Somerville at the 100 Years of Excellence Centenary Sale in July. Mr Mitchell had wanted an animal from this particular Lass cow family for some time and he ended up paying the highest price of the sale. She descends from the ‘matriarch’ of the cow family Gay Lass, the highest brood star cow bred in Australia, with 40 stars. “One of the main

reasons I bought her is that her dam, an Allen Leonie cow classified EX 94 2E, is one of the best cows I have seen in the flesh.” The herd’s highest production family is the Jemimas, which began in the Mitchmantle herd with the purchase of Wade embryos from Booklane Belt Jemima. “The Jemimas include the first Mitch prefex excellent cow, Mitch Durham Jem Ex 90-2E. She’s 10 years old and has consistently had good daughters,” he said. Mr Mitchell loves the type of the Roxys, which began in the Mitchmantle herd via the purchase of two B-grade embryos, resulting in Mitchmantle Storm Roxy ET Ex-90. “She was born in 1999 is still being flushed although she is retired from milking. “Four of her daughters

entered the herd this year and we’ve been pleased with their performance so far.” Mrs Mitchell’s favourite cow family is the Belles which began with a cow and a heifer they saw on their honeymoon when they visited the Burnvale herd in Western Australia. “We didn’t buy them on our honeymoon. “We got them not long after at the Burnvale’s dispersal sale. We’ve had three good daughters in the herd from that purchase,” Kim said. Her favourite is Mitch PS Belle (VG87). “She has a fantastic temperament and is a great balanced cow: she produces well and gets back in calf reliably,” she said. This is an edited version of an article published in the August-September Holstein Journal and has been reprinted with permission.

Brent and Kim Mitchell on their Bamawm farm.

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Dairy News AUSTRALIA september 2014

22 // abvs

More reliable fertility ABVs THE LATEST Good

Bulls Guide, based on the August release of Australian Breeding Values (ABVs), has more than double the number of bulls with Daughter Fertility ABVs compared with two years ago. Michelle Axford from the Australian Dairy

Herd Improvement Scheme (ADHIS) said this improved selection would be welcomed by many dairy farmers. “For example, In August 2012, less than 400 Holstein bulls had Daughter Fertility ABVs in the Good Bulls Guide compared to 807 in the August

2014 edition,” Mrs Axford said. Additionally, this release includes 25% more bulls with Semen Fertility ABVs. “This will give dairy farmers who want to include fertility in their breeding decisions, more information and more

choice of potential sires. “Most dairy farmers want to improve the fertility of their dairy herds, and considering it in their breeding decisions is one of several things they can do. “However, the reliability of fertility breeding values (both daughter

fertility and semen fertility) has been limited in the past by a lack of data.” The improvement in reliability over the past two years has been due to a better fertility ABV model and the addition of 1 million fertility records in the ADHIS data base. The additional records

were sourced through the Fertility Data Project which was a collaborative effort between ADHIS, the Dairy Futures CRC and farm software providers. The project also delivered improvements in the reliability of calving ease ABVs and workability ABVs. Significantly more fertility records from cows recorded in updated software systems have had a meaningful influence on the reliability of Fertility, Workability and Calving Ease ABVs in this proof release. Over one million additional records have been added since the Dairy Futures CRC and ADHIS implemented the Fertility Data Project. Furthermore, the additional fertility records mean a 25% increase in the number of bulls with semen fertility values in

the past year. A low-cost screening program sponsored by ADHIS has seen a three-fold increase in the number of young bulls genotyped since 2012/13. This screening process enables bull companies to scan a much broader group of bulls to select those bulls most suited to Australia. For the first time, genomic based breeding values will be published for overseas bull without a genotype recorded in Australia. This means that virtually all dairy bulls can be compared using ABVs and young bulls genotyped overseas can be selected based on their suitability to Australian herds. This is a new service from Interbull and the evaluations will be referred to as ABV (ig).

Breeding is a balancing act BALANCING THE various traits in cows that dairy farmers value is at the heart of the recommendations by the National Breeding Objective Review taskforce. After carefully considering farmer and industry feedback and the results of a rigorous research program, the task force has recommended three new breeding indexes: ■■ Primary Index - a balanced index that aligns to the highest priority traits outlined in the NBO survey and maximises net profit through production, fertility and type. ■■ Two alternate indexes - a type index that focuses on improved type at the expense of production and slower improvement in fertility; and a functional index that focuses on improved fertility and survival (longevity) at the expense of production and slower improvement in type. Michelle Axford, from the Australian Dairy Herd Improvement Scheme, said the combination of a well-balanced primary index as well as two customised indexes (specifically aligned to type focused and functionality focused farmers) are a good match for the range of breeding philosophies received through submissions. “After carefully considering farmer and industry feedback alongside the results of a rigorous research program, the National Breeding Objective Task Force has developed its recommendations. The ensuing report will be distributed shortly after the ABV release,” Mrs Axford said. A full report will soon be available, with the new indexes to be included in the April 2015 release of Australian Breeding Values (ABVs). In other news, recent research has discovered a series of haplotypes that have a negative impact on fertility. Scanning for these haplotypes has started and new reports will soon be available.

Dairy NewS AUSTRALIA september 2014

abvs // 23

Production focus the priority at Winnaleah Rick Bayne

GOOD BREEDING

has been good business for Tasmania’s George Wagner. The latest Australian Breeding Values prove his breeding success – he has the number one Holstein herd in Australia – but it’s his production results that have driven the success. Mr Wagner, the principal of Rengaw Holsteins at Winnaleah in north-east Tasmania, says quality has paid off as he fulfils his lifetime ambition of being a top breeder. “Production was always our main aim,” he said. “When we got the stud we looked at production from the start but as more bulls became available we just went on from there.” The cows are averaging 9000-9500 litres. “It’s been around 80009000 or thereabouts but with better technology it’s

going up a bit each year,” Mr Wagner said. The good breeding program has made good business sense. “It gives us more production, more money from that production and we have a few bulls going to A.I. companies. I’ve sold a few better cows at Dairy Week over the years and the ones I’ve sold have been at the top end of the herd. That’s quite pleasing,” Mr Wagner said. Breeding has been part of his life for the past 48 years since he first started taking an interest at age 12. The stud was registered in 1968 but the real ABV success started brewing in 1991 and has advanced even further over the past decade. “In 1991 we brought in five embryos from America. We only got one pregnancy but I got a heifer calf and she’s been the foundation cow for most of the animals we have success

Who:

George Wagner Where:

Winnaleah What:

Top herd

with now,” Mr Wagner said. “She was a well-bred cow and all the progeny we got out of her have all turned out really good.” This year the top three genomic bulls are all out of the same cow family. From the start, quality was paramount in the Wagner’s breeding. “It was always about breeding from the best bulls available, trying to get a good cow family going,” Mr Wagner said. The program has suc-

cessfully created a herd well above the national average for fat, protein and type. “We always get the best bulls available, whether it be genomics or proven, and I’ve always got a program of flushing better cows to the best bulls.” Mr Wagner said the characteristics of the herd are “good production, good fertility traits, reasonable cell counts and exceptional temperament”. Alongside production traits, over recent years the farm has also considered mastitis resistance and fertility when selecting for breeding, and has made significant genetic improvements in

these areas. Mr Wagner always selects bulls that rank in the top 30 for Australian Profit Ranking (APR). The farm milks about 180 cows, mainly Holstein but also including about 20 Jerseys. For the past 10 years Mr Wagner has leased his farm after moving off the home farm where he grew up and first got the taste for breeding.

He is still enthused about farming and breeding, though he is planning to reduce numbers by sending some cows to his son-in-law Jared Ireland at Lockington in northern Victoria. Despite concerns about the impact of the high Australian dollar, things are looking good on his Tasmanian farm. “The season is just starting to pick up now,”

Mr Wagner said. “It was a relatively warm winter and we haven’t had a lot of growth. It’s just starting to grow now and the season should turn out all right.” In the meantime he can enjoy his long-desired recognition for breeding excellence “It’s quite pleasing. We’ve been breeding for a long time and always wanted to be the best and we finally got there.”

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Dairy News AUSTRALIA september 2014

24 // animal health

Be alert for calving problems SPRING IS in the air and

the frosty winter mornings are giving way to beautiful mild spring weather. In Northern Victoria, spring is calving time and because of this it is also the time of any cows’ life when she is at her greatest risk. Most disease issues

affecting dairy cows peak at or around calving. Mastitis, Metritis, Metabolic disease along with calving problems, paralysis and other complaints of transition occur. With transition cow disease, it is impossible not to discuss the disease known as Displaced

Abomasum. The abomasum is the closest thing that a cow has to our own stomach. It is the fourth of the stomach compartments and is the glandular stomach. The abomasum can become displaced to either the Left side (LDA) or the Right side (RDA) of the

animal health rob bonanno

cow, and can, on occasions become torsed (twisted) as it displaces to the Right hand side (RTA). Left sided displacement is a relatively more common problem and usually occurs in cows at or just after calving. LDA is probably one of my favourite things to

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fix, because you can take a cow who is circling the drain to oblivion (culling) and bring her back into full production in the vast majority of cases. Because it has a relatively good prognosis, I usually recommend to my client to fix a LDA. That said, like almost everything in life, prevention is far better than a cure. Basically, any disease or issue that interferes with intake in the vital transition period of a cow will increase the risk of her getting a LDA. By that I mean things like lameness or mastitis, poor availability or palatability of food, poor transition management or excessive transport, time off feed or increased stressful management interactions. Cows who have inaccurate calving dates who spend either too long, or too short on the transition diet will also have many introductions to the precalving group, each time requiring a new status quo to be organised with a changing dominance within the transition herd. After calving, retained membranes, ketosis and rapid dietary changes are all known risk factors for a LDA. So how do you prevent LDAs from being a problem in your herd? Firstly, ensure that your dry cows are in good body condition and have been fed to be ideal at transition. Availability of quality feed with low DCAD to prevent milk fever, but adequate palatability to ensure intake is critical. Supervise calving and ensure any post calving issues are dealt with quickly and thoroughly. This may include protocols that monitor for ketones, mastitis and metritis in the fresh cow herd. A proactive approach is certainly an important tool to prevent fresh cow wrecks which have a high risk of LDA. The use of fresh cow drenches may have a beneficial role in cows that are sub-clinically low in calcium or lack rumen fill. Talk to your dairy vet for assistance in developing fresh cow health protocols.

Investigate any cows quickly who are not performing as anticipated, or appear to be off their feed or not eating their ration in the dairy or out in the paddock or at the feed rail. An LDA can be easily detected by listening for the characteristic “ping” that can sometimes sound like an over inflated basketball being bounced when you flick or tap over the last few ribs on the LHS of the cow. However, sometimes the noises can be a little more subtle and difficult to detect, and I have seen many an LDA that has little or no gas in them when examined - they are a real challenge to diagnose. I use the presence of a tinkling fluid splash when balloting (like rapid punching of the abdomen) and the presence of any gas on the LHS below the level of rumen fill as my other criteria to diagnose a LDA. Occasionally, the rumen will ping if it has a lot of gas but will almost never give you a tinkling splash, and cows that have been not eating for several days can develop an off feed ping that can be hard to interpret if the cow isn’t fully examined. With an LDA, the cow will suffer indigestion and poor performance, low energy availability and subsequently lose body condition rapidly and may look sunken eyed and gaunt. I have seen them with watery diarrhoea or firmly constipated, but in general they have a lower volume of slightly over-digested smelly faeces present on rectal exam and many have ketosis secondary to the metabolic failure (if ketosis wasn’t the primary cause). I have taught many people how to listen for pings and think that a reasonable quality stethoscope is a good investment on any dairy farm. Your veterinarian can probably help you with this skill There are a number of techniques to “fix” LDAs, sometimes you can roll them, blind toggle them or perform any number of different surgical techniques on them. to page 26

Dairy NewS AUSTRALIA september 2014

animal health // 25

The best calf pen partitions Zoe Vogels and Gemma Chuck

THERE IS a huge

variation in calf housing from farm to farm. Calf housing is a major determinant of overall calf health, the design of which should be determined by herd size, calving pattern, the number of calves to be reared, feeding system and how long calves are to be housed. Regardless of the final design and configuration, one constant recommendation for any calf shed is to have solid, non-porous, easy to clean pen partitions to avoid transfer of scours and pathogens between calf pens. There are many options out there for use as partitioning material. Corrugated iron and tin, Colorbond, rubber sheeting and more recently Corflute have all been used successfully. Shade mesh is used on some farms but tends to wear very quickly from tearing and chewing by calves. It also needs replacing every season as it is difficult to clean but can be a temporary fix. Large hay bales have also been used as the partition between calf pens within a shed. This also provides calves with a source of fibre but they should be replaced every season. Avoid using wooden partitions as they are much harder to clean and disinfect and can harbour pathogens for many years. There have been cases of lead poisoning in calves where painted wooden doors were used for calf pens – another reason why these are unsuitable. Tips for partitions include: ■■ Should be 1.5m high from the ground. This will mean they are 1.3m high from the top of the bedding, to avoid nose to nose contact between calves. ■■ Demountable partitions or swinging gates allow for easy

■■

cleaning of the calf shed with machinery between calving seasons. Ensure all pens have easy access with a hinged gate. Climbing over partitions is not only time-consuming but can be hazardous. A note on mesh gates: many farms use mesh gates for partitions between calf pens. As discussed this allows for easy transfer of pathogens from pen to pen. However, mesh gates can be used provided they are not a common partition between pens. This means they can be used when there is an alleyway between pens and there is no possibility for noseto-nose contact or for scours to pass from one pen to another.

As well as solid partitions, there are some basic rules to help minimise the spread of disease between calves: ■■ Use an all-in-all-out system. That is, calves enter a pen and stay there as a batch until they leave the shed. Do not move calves from pen to pen. The only reason a calf should leave a pen is to go to a dedicated sick pen area. ■■ While 5-10 calves per pen is a reasonable number, stocking rate does depend on the feeding system. Slow drinkers can be troublesome in large group pens and there is a tendency to move them to a ‘slow drinking pen’. Individual feeding systems such as locking head bails or stalls will help deal with slow drinkers without removing them from their original pen. ■■ It is most important not to mix calves from different age groups – calves in the same pen should all be within one week of age. ■■ Put newborn calves into clean pens: with new bedding and cleaned and disinfected walls. ■■ Ask for advice before you build.

There are many different calf shed designs and configurations. Pen partitions are just one aspect of calf housing. It may be a simple renovation of your existing shed, conversion of another building or building a new shed from scratch but discuss your ideas with your vet prior to your build. • Zoe Vogels and Gemma Chuck are veterinarians with The Vet Group, based in western Victoria.

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Dairy News AUSTRALIA september 2014

26 // animal health

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LOCKYER VALLEY farmer Steven Duncan has just completed building a compost barn to house his cows as part of an ongoing commitment to improving production, reducing disease and stress on cows and combating the current economic environment. Mr Duncan said the compost barn and a strong focus on home grown feed are part of a long-term strategy to keep the farm viable even in the harshest times. “Healthy cows are the core of our business and our focus is preventing disease, not treating sick animals. The compost barn will help us achieve that. “We’ll be able to look after our cows and control the environment 24-7,” he said. “The barn will provide the missing link in our system; a soft and dry place where the cows can rest.” The barn, which was completed this winter, will reduce lameness

standing under a stemming from cows shade structure, walking on laneways or it decreases their standing on concrete for a capacity to proprolonged time and it will duce milk. When stop cows lying in mud cows are lying and contracting mastidown there is much tis. Mr Duncan expects a higher blood flow production spike and sigthrough the udder nificant animal health and therefore more benefits as animal commilk produced,” he fort increases. explained. “Now they can lie in a Steven Duncan The Duncans precomfortable environment underneath a high roof that allows the viously tried to boost production by increasing cow numbers, but came to breeze to flow through,” he said. Previously, the Duncans’ cows realise that milking more cows is not would spend a number of months necessarily the way to go. “The more cows you have, the a year beneath shade on a concrete floor, rather than lying, and this can more bought-in feed you rely on if you can’t produce enough home take its toll on milk production. According to Mr Duncan, studies grown high quality forages. If your show milk production is reduced if infrastructure is not set up for handling a higher number of animals then cows stand for too long. “If cows are spending a lot of time risk of disease increases. These costs on their feet, whether it be walk- outweigh the profits of milking more ing long distances while grazing or cows,” Mr Duncan said.

Be alert for calving problems

More information: www.thevetgroup.com.au or call 1300 838 700

from page 24

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Compost barn reduces mastitis

I have for a very long time preferred to perform a right sided pyloropexy which is where I pull the abomasum back under the rumen and attach the pyloris (the outflow from the abomasum) to the body wall to prevent it from being able to displace or twist again. I have done many thousands of these operations

and am incredibly comfortable with this technique but every vet has their own personal preference. There are even laparoscopic techniques being done to repair LDAs in cows now. Right sided displacement especially if accompanied by torsion of the stomach is a serious problem. The right hand side of

the abdomen of a cow is a somewhat more difficult minefield to examine with many different causes of gas pings and fluid splashes than I can hope to cover in this article. When examining a cow with a RHS ping, I take many factors into account as to where the ping is, how large it is, what does the cow look like, is her heart rate and hydration

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animal health // 27

Detect bacteria to stop mastitis from spreading Sarah Chaplin

TO EFFECTIVELY

control a mastitis problem you need to know which bacteria is causing the infections and how the mastitis is being spread on your farm. Streptococcus agalactiae (commonly known as Strep. ag) is relatively common but how can you tell if your herd is infected? One way is to take a milk sample from all clinical cases before you treat them and send this off for bacteriological culture. Alternatively you could send a bulk milk sample from the vat for PCR testing. Your vet or factory field officer should be able to arrange either of these forms of testing for you. Finding that you have Strep. ag in your herd can be both good news and bad news. We all know that Strep. ag mastitis is contagious and spreads rapidly through the herd. You treat one cow and another pops up with mastitis. Horror stories of the cost and complexity of control spread almost as quickly as the bacteria itself. But the good news is that it can be eradicated, unlike most other forms of mastitis bacteria. Cure rates are high and it is only spread during milking so with some concentrated effort and your vet’s help, this is one cause of mastitis that you do not have to live with. As with so many areas of management, it is not just what you do but how you do it that is important. So what are the elements of an effective Strep ag control strategy? Get help You are going to need help with this one. Think about who needs to be involved and get the team working together: vet, factory field officer, herd improvement, farm staff. At a minimum you will

need veterinary help with treatment plans but think about who else needs to know, who can help you, and who is going to be critical to the success of your strategy. Control the spread You will need to look at all aspects of your milking routine to be sure that you are not contributing to the spread of the bacteria: look at teat spray preparation and application, milking machine performance and how you milk the cows. It will also be very important to review with staff how you identify, treat and hygienically handle clinical cases. Separate herd Being able to identify and separate “clean” and “infected” cows is very important unless you plan blitzing the whole herd with treatment in one go. You want to be absolutely certain that cows in the “clean” herd are truly free from infection and are milked first. This means that you need to be able to handle at least two groups of cows and accurately identify them. Get rid of Strep. ag Get advice from your advisor on a strategy that is tailored to your farm’s situation. You may choose to use dry cow therapy to treat infections or treatment during lactation. Treatment during lactation can be an expensive exercise and is not a quick fix. You need to be very sure that you can manage the logistics and cost, and that you are controlling the spread effectively before embarking on this course of action. Remember Strep. ag won’t be the only mastitis bacteria on your farm so eradicating Strep. ag won’t mean eradicating mastitis. And finally, after going to all the effort of eradicating Strep. ag, never buy cows without checking that they are free of Strep. ag; you don’t want to end up back at

square one. For more information look for “Countdown FAQ Strep ag” in your search engine. • Sarah Chaplin works with the DEPI in Tatura. Look at all aspects of your milking routine to ensure you’re not helping bacteria spread.

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Dairy News AUSTRALIA september 2014

28 // spring pasture Dr Cameron Gourley (far right) presented the background to the development of a new nitrogen decision tool for dairy farmers at the Agronomy Community forum in Hamilton. He is pictured at the forum with (from left) Charlie Walker, Incitec Pivot Fertilisers; Neil Palmer and Michael Williams, Webber Chivell; and Dr Bob Farquharson, University of Melbourne.

Chico – the drought-buster

Minimum nitrogen for maximum farm profitability For summer feed, there is nothing better than Chico chicory – the perfect summer feed. Chico’s metre long tap root is able to mine soil moisture and minerals from deep within the soil profile, providing insurance against summer drought. Its leaf is succulent, high in energy and minerals, and is very palatable to livestock. Chico is “rocket fuel” for livestock. Chico won’t cause grass staggers or facial eczema, and is resistant to insect pests such as diamond back moth and white butterfly. Livestock adjust quickly to Chico.

“For a summer-safe, multi-graze summer crop, providing flexible grazing management, there is nothing better than Chico chicory.”

Chico – rocket fuel for livestock CHICO IS AVAILABLE FROM YOUR LOCAL SEED MERCHANT OR FARM MERCHANDISE OUTLET For further information contact Cropmark Seeds Australia Pty Ltd Freephone: 1800 889 039 Freefax: 1800 889 037 For technical enquiries contact your local Cropmark agronomist. Western Districts, SA, Tasmania: Jason Hill – 0427 607 375 North & East Victoria, NSW: Adam Sheedy – 0428 132 096

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DAIRY FARMERS and advisers

will soon have a nitrogen fertiliser decision tool that will help determine how much nitrogen to apply to pastures for maximum profitability. Dr Cameron Gourley from the Department of Environment and Primary Industries, Victoria, presented the background to the development of the new tool at a recent Agronomy Community forum in Hamilton. He said fertilisers were recognised as a key driver of production for dairy farmers. “Fertiliser makes up 5 to 10% of the farm’s operating costs, with between $30,000 and $50,000 spent on fertilisers per farm, and overall, more than half of that expenditure goes towards nitrogen,” Dr Gourley said. He said dairy farmers were increasingly accountable for environmental performance and needed more sophisticated nutrient management decision tools as they intensified production. “As dairy farms have become bigger and more intensive, the efficiency of nutrient use has declined,” he said. “As a result, there is often a smaller proportion of nutrients leaving the farm in product than imported in fertiliser and feed. “As a consequence, there’s a lot of nutrient accumulation in dairy pastures.” Dr Gourley said a survey of more than 2000 dairy paddocks from dairy farms across Australia showed that 80% of soils were above the recommended phosphorus level. The results showed similarly high levels of soil potassium and sulphur. He said having higher levels of phosphorus and potassium in the soil, above the recommended soil test targets, did not increase milk produc-

tion. In contrast, however, milk production increased as nitrogen inputs increased. “There is a very strong correlation between total nitrogen and milk production,” he said. “However, surplus nitrogen in the dairy farm system increases the risk of environmental contamination, so the key is to ensure the nitrogen is used efficiently.” While in Australian cropping systems such as wheat, nitrogen use efficiency can be 50% or even higher, he said dairy farmers were at a lower efficiency range of 14% to 49%. “So what are our opportunities to achieve more dry matter or milk per unit of nitrogen used?” he asked. “One of the best ways is through improved nitrogen fertiliser management.” In following this path, Dr Gourley looked for data to show how dairy farmers are currently using nitrogen. A survey of Tasmanian dairy farmers by RedSky analysis between 2006 and 2010 provided some answers. It showed that the average nitrogen use was 185 kg/ha a year, which would have been applied in three or four applications. However, rates ranged from just 31 kg/ha of nitrogen a year (10% of farmers surveyed) to 351 kg/ha of nitrogen a year (10% of farmers surveyed). He also looked at previous research into effective rates of nitrogen for dairy pastures. “For example, research from the Mt Lofty Ranges in South Australia by Elliott and Abbott, as well as many other studies, showed that the optimum nitrogen rate was between 40 and 50 kg/ha per application,” he said. “Over or under applying will

reduce the profitability of nitrogen fertiliser applications. “Research also shows significant seasonal variations in responses, with larger dry matter responses in the peak of spring compared with a wet and cold winter.” Dr Gourley said the new model for nitrogen fertiliser decisions was developed using nearly 6000 experiments showing nitrogen responses in pasture to predict responses. “One of the limitations, however, is that most of this research was conducted in the 1970s and almost all of it is from Victoria,” he said. The validity of the model was therefore tested against new field trials at Longwarry South, Athlone and in northern Victoria in 2013, with actual dry matter responses to nitrogen closely mirroring predicted responses. “We are confident that the predictions of extra pasture yield from nitrogen fertiliser applications are relevant to current dairy pastures,” he said. He said early versions of the new tool may be available as soon as November 2014. “Dairy farmers will be able to check their decisions about how much nitrogen to apply to a particular paddock, for the particular time of year, so that the last kilogram adds to profit,” he said. “Ideally, it should be used as a discussion tool, with an emphasis on ‘what if’ scenarios. “In the long run, we want dairy farms to be productive, profitable and have a low environmental impact.” • For more information on the new nitrogen discussion tool for dairy, contact Dr Cameron Gourley on Cameron.Gourley@depi.vic.gov.au.

Dairy NewS AUSTRALIA september 2014

spring pasture // 29

Winter pasture boost has Gympie farmer geared up farmer, Rob Gear from Gympie, doesn’t have a lot of time to waste. That’s why he used an enhanced efficiency fertiliser to boost the growth of his annual ryegrass pastures over winter. “Using ENTEC Urea saves us time through the season and eliminates at least two nitrogen applications a year, with the same responses in the pasture as urea,” he said. Mr Gear and his family milk 400 cows, grazing annual ryegrass pastures in the winter and native summer grasses through hotter months. “We heard about ENTEC through Noel Matthews at Incitec Pivot Fertilisers and Brian Burkhardt at Landmark Gympie,” he said. “They explained how it can help to keep nitrogen in the soil for longer. “We knew it had worked for others, so we gave it a go.” Using ENTEC Urea extended the responses to nitrogen fertiliser for the Gear family, allowing them to push grazing rotations and fertiliser applications out from 21 days to 28 days. Over a seven month season, this means they

are skipping two fertiliser applications. “In our labour situation, that’s a massive saving for us,” he said. He added that the pasture growth responses were as good as, if not better than, where urea was used more frequently. Rob applies 125 kg/ ha of ENTEC Urea to his ryegrass pastures each month. “It does hang on better in the ground and that’s why we can allow longer between nitrogen applications,” he said. “At the end of the season when the summer grass is taking over, we also see a residual nitrogen response and that helps if we get a bit of rain to kick start the new pasture.” ENTEC is suitable for use in a variety of crops and pastures. It works by stabilising applied ammonium nitrogen in the soil for several weeks after application, giving crops a more consistent supply of nitrogen and helping protect against denitrification and leaching losses. Unlike some enhanced efficiency fertilisers, ENTEC does not deny crops and pastures access to nitrogen. ENTEC has been included in several

project, conducted on dairy farms at Gympie and Ravenshoe. But Rob didn’t wait on the results. “We’re time poor here, trying to manage the milking and everything else, so we will keep using ENTEC Urea to save time and money,” he said.

studies on dairy farms as part of the National Agricultural Nitrous Oxide Research Program funded by the federal Department of Agriculture. It was also included in a recent Queensland Dairyfarmers’ Organisation research

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Dairy News AUSTRALIA september 2014

30 // spring pasture

The average pasture cover at calving determines how much milk can be produced in the following months.

Help to manage pasture during spring calving Alison Hall

Flexible sowing date Only 55-75 days from sowing to grazing – Marco tetraploid turnip is the earliest maturing turnip available. This provides the benefit of sowing date flexibility, which means: Less time out of production Two Marco crops in one season are possible Can be used for late sowing, or where crop failure occurs Flexible grazing management Marco has large bulbs with a high bulb to leaf ratio. Marco retains its quality well in the paddock for as long as 90 days after sowing. And Marco has good clubroot resistance. Marco – the flexible summer turnip which fits better into your management regime.

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MANAGEMENT OF pasture and

feed on hand throughout the calving period and in the weeks following calving can be challenging. However, decisions made during this time can have a large impact on pasture and milk production in the succeeding months. When managing pasture during spring, key targets include average pasture cover at the start of calving (how much feed you have across your farm), and average pasture cover at the breakeven point, which is when your cows are eating the same amount of pasture that is being grown (feed supply equals feed demand). Breakeven date will vary from region to region depending on climatic factors such temperature and rainfall, and on-farm factors such as stocking rate, calving date and soil fertility. The average pasture cover at calving determines how much milk can be produced from pasture in the months following calving (and impacts on cost of production). Too much pasture at calving may mean that pasture is wasted and growth may be reduced. If there is insufficient pasture at calving, there will not be enough pasture available for cows, and additional supplements will be required to ensure cows are not underfed, which comes at a greater cost. In addition, if there is not enough pasture, there is a tendency to speed-up the rotation in an attempt to feed the cows and if ryegrass based pasture is being grazed before the 2 1/2 to 3 leaf stage, pasture growth will be reduced and overall cover will remain low until later in spring. The average pasture cover at breakeven date determines both the quantity and quality of feed at mating time (mid to late October). There are a number of tools

that have been developed, both in Australia and New Zealand, that can assist in taking the guesswork out of grazing management during this critical period in early spring, as well as throughout the season. Two of these tools include the Farm Feedbudget, developed by the Tasmanian Institute of Agriculture’s Dairy Centre, and the Spring Rotation Planner, developed by DairyNZ. The Spring Rotation Planner is a great online tool that can be used to assist in developing a grazing management plan through spring, while the TIA farm feedbudget, also available online, can be used throughout the season on an ongoing basis, or at strategic points throughout the season, to help manage pasture and feed allocation. DairyNZ Spring Rotation Planner The DairyNZ Spring Rotation Planner is designed to be used during the spring months to assist farmers in managing rotation length and achieving their target pasture cover during this period, based on stocking rate and per cow pasture demand. The Spring Rotation Planner works by entering your farm size, calving date, rotation length prior to calving, expected breakeven date (when pasture supply equals demand), and rotation length through the bulk of spring. The other information required includes opening target pasture cover in kg DM/ha. This is the target cover required at calving, not the actual cover at calving. Target pasture cover at calving is dependent on stocking rate, which will vary between farms, but 1800-2200kg MD/ha can be used as a general guide. Pasture cover at breakeven date also needs to be entered. From this information, the Spring Rotation Planner calculates a number of graphs for you, including rotation length for the 2-3 months following

calving, the area (hectares) you should graze per day in order to stay on these given rotations and achieve your target pasture cover, and your target average pasture cover during this period. This information is also presented in a table. TIA Farm Feedbudget While spring grazing management is critical in maximising milk production from pasture, it isn’t the only time of the year at which it is important to be reviewing the feed situation and planning feed strategies. The TIA farm feedbudget is a very useful tool that has been developed using Microsoft Excel that can aid in planning supplements and feeding regime throughout a season, and assist in predicting and managing feed surplus and deficits. The feedbudget enables you to budget your feed demand and supply for different periods throughout a season. By entering your average pasture cover at the beginning of the budget period (eg 10 days, two weeks, one month), the calculator will give you the change in cover over that period. By manipulating the daily feed inputs, as well as pasture growth rates, you can see what impact this has on your average pasture cover over that period. The feedbudget is a quick and easy way of seeing how an increase or decrease in pasture growth rates, supplements or cow numbers, will impact on your average pasture cover over the budget period and throughout the season. The feedbuget also produces a graph of pasture cover over the budget period, and shows your cows’ ration balance based on your feed inputs. • Alison Hall is dairy industry extension officer with the Tasmanian Institute of Agriculture. This article was first published in the Tassie Dairy News, August 2014.

Dairy NewS AUSTRALIA september 2014

machinery & products// 31

Three new silage wagons JASON POUSTIE,

from Cooriemungle in Victoria’s western district, is a man who doesn’t do anything by halves. He has just taken delivery of three; count them – three - self-loading silage wagons from Greg Allan Farm Machinery at Colac. Jason runs Poustie Agricultural Contracting and with the silage season almost upon us the three Lely Tigo PR60D wagons will be working very soon. The ‘D’ denotes that the machines have rear beaters; you can buy them with or without. Two discharge rollers are fitted as standard, with an option for a third. They ensure that the crop is distributed evenly. A movement sensor on the lower discharge roller automatically stops the floor chains when the wagon is full, and a camtype clutch protects the discharge roller against overloading. They each have a 36 cubic metre capacity. Mr Poustie’s father was a dairy farmer and Jason started out with an automotive mechanic apprenticeship and worked in earthmoving and later for an ag contractor before branching out on his own

working clothes chris dingle 20 years ago. Now he has around 200 customers of whom, he says, 99% are dairy farmers. “We’ll travel anywhere, actually about three hour’s radius from home, from the South Australia border to Geelong. “We’ve always had an opposition brand with the silage loaders and I did a lot of homework when I was looking around for these,” explained Mr Poustie. “We thought about self-propelled forage harvesters but they were too expensive and, besides, my customers wanted me to get the loader wagons. “The main thing that I liked about these wagons was Lely’s cam-less pickup, the rotor design with a 40 knife system, and fewer working parts. That means, potentially, less downtime.” He pointed out that these machines have

seven tine bars with 40 knives in the same distance that his previous wagons had 33 knives, so he will end up with a finer chop, at a chopping length of 37mm. That way, he says, he can cover both markets among his customers – those wanting to feed out directly and those using mixer wagons. The cam-less pick-up means fewer moving parts make it more reliable and less prone to wear. All components are hot-dip galvanised. The working width of the pick-up is 1.9m and each wagon can handle up to 24 tonnes. The pick-up and chopping rotor are positioned close to each other, reducing the pick-up rotation speed to bridge the distance to the rotor, which favours the crop intake as well as durability. The amount of compaction can be preselected depending on the crop. Forward tilting of the hydraulicallyadjustable multi-function bulkhead reduces the pressure, while backward tilting increases it. Sensors on the hydraulic cylinders of the bulkhead automatically activate the floor chains. The silage team at Pou-

Cooriemungle contractor Jason Poustie with a Lely Tigo PR60D self-loading silage wagon.

stie Agricultural Contracting have three Case Puma CVT 195 tractors to operate the wagons, their purchases date from five years ago to about a month ago. Another Case Puma with a two tonne block is used for the silage stack, sporting dual wheels on the back and a silage spreader on the front

new silage wagons. Mr Poustie said the Lely product is really good and he has been dealing with – and trialling machines from - Greg Allan Farm Machinery for 20 years. His main sales contact there now is Tim Foster. “We’re waiting for the grass to grow. Once we start we are out every day

linkage. The baling team have a variety of Lely rakes, tedders and balers and Pottinger mowers. These are powered by four Valtra tractors. The ISOBUS control and monitoring systems for the Welger balers, which they have been using for 10 years, are interchangeable with the

and we don’t like stopping – that’s why we have gone with Lely. Tim gives us good back-up and we get very good parts support, both from the dealership and the Lely factory.” The parts support is an important factor for Mr Poustie and he says that it is second to none. “All the parts we may need are already in stock.”

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Dairy News AUSTRALIA september 2014

32 // machinery & products

Fendt diesel horse won’t let you down Fendt has been making tractors stick with compasince 1928, when nies that shaft them? Hermann Fendt It’s a question that reportedly built is no doubt asked the first ‘dieselross’ the world over, as (diesel horse) in his businesses and confather’s blacksmith sumers maintain shop in Marktoberrelationships with dorf, Germany. suppliers (and cusIf you ask me, tomers) that regu- john droppert the name alone suglarly disappoint. Is it the price? Is it a feeling of gests Hermann was onto some‘better the devil you know’? Is it thing early, because a diesel horse some sort of pleasure at having a is the only one I’d be willing to own reliable (ironically) counterparty – but I digress. The fact is, there is no shortage to blame your own failures on? Naturally, this applies to farm of tractor brands out there with an machinery as much as anything 80-plus year history. And most of else. It’s fair to say that even the them don’t charge anywhere near leading manufacturers produce a as much for the tractors they sell. But every second contractor dud machine from time to time, and when many of their customers has a Fendt fleet and once initiated, abandon them, lessons are learnt. few buyers seem to ditch the make. But there are also marques Why? Fendt would say it’s all about that consistently churn out the reliability and efficiency; they’re very finest examples of medioc- probably not far wrong. Take the implied expectations rity, machines that break down, blow up, or simply don’t do the job of the second hand market. Many well-maintained tractors will hapthey’re alleged to do. Now you’re probably think- pily run well past the 10,000 hour ing after such an extensive intro- mark, but if you go to trade them in, duction that I’m going to go right your dealer will be on the phone to ahead and name a few examples of the local wreckers. Resale values clearly indicate these repeat offenders. Well you’d that the market regards Fendt be wrong. I don’t like being sued, so I’m machines rather differently. At going to do just the opposite, and 10,000 hours, there seem to be no pay tribute to a tractor brand that I shortage of buyers who will take believe has got it together as much, one on. Innovation is a major part of if not more than any other. Fendt. Fendt are yet another member keeping ahead in the efficiency of the giant AGCO Corporation, stakes, and again, Fendt aren’t the having been purchased in 1997. only ones doing it. But the run-

WHY DO people

grunt

An early example of the Fendt 900 Vario series.

away success of their Vario stepless transmission has cemented the brand’s reputation as a leader, even now that every major manufacturer offers a CVT or IVT box. The Vario transmission was launched in 1996 on the 900 series, with incorporation of the computerised Tractor Management System (TMS) enabling both paddock work and transport to be done at the optimum engine rpm – saving fuel. Combining the whole operation into a single joystick made the machines ridiculously easy to operate by the standards of the time. The joystick even has a toggle

switch operated by your second smallest finger – how much more efficient can you get? I’m sure there are exceptions, but it seems for most that the Fendt ownership experience is a pleasant one – every time. If that’s not enough for you to justify the price tag, the BBC’s TopGear motoring program described the 900 series as ‘the Mercedes S class of tractors’. High praise indeed. • 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.

Solar pump drive. Exploiting the power of the sun.

ABB’s Solar Pump Drive System delivers power for remote pumping applications, without damaging the environment. The system supports the irrigation of farms, where energy savings are a prime concern, as well as water pumping applications at remote sites, where it is simply not possible to connect to the power grid. ABB’s system provides an economic and eco-friendly alternative to a diesel generator. This rugged system comprises of a PV cell, an IP66 ABB drive which doubles as an inverter, a motor and a pump. Maximum power output is achieved throughout the day via a maximum power point tracking feature. A built-in flow measurement and flow detection function turns the drive off in case of dry run. With additional remote modules, you can monitor the solar pump parameters from anywhere. The dual supply mode also enables connection to the grid if required. For further information, please visit http://new.abb.com/drives/en/acs355-solar-pump ABB Australia Pty Limited Contact Centre: 1800 222 435 www.abbaustralia.com.au

Dairy NewS AUSTRALIA september 2014

machinery & products // 33

Automated system for stock troughs A NEW automated system to ensure dairy farmers’ stock troughs never run dry has been developed to give peace of mind about on-farm watering systems. Mait Industries, based in Melbourne, have released their CR-X Cable Replacement Series Bi-directional switch. This remote tank fill method allows the CR-X unit to be connected to the pump source with a level switch at the water tank, with another CR-X unit and gravity feed to the stock troughs. Farmers simply connect and set a float switch, then sit back and relax knowing the tank and troughs will never run dry. The wireless bi-directional switch, powered from a nominal 12 volt DC power source, will operate up to 6km range in line-of-site. If a particular application needs additional range, it is a straightforward process to add repeaters. The Mait Industries CR-X units are ideal for remote control of pumps and valves where laying of cable is expensive, not feasible or simply not desired. They are also useful for remote monitoring of switch states, such as for pressure and flow switches. The system can be used for numerous applications, such as pump or machine start. A standard in-built, 3AH, rechargeable Lithium battery pack can be used as the power source, kept charged via a 15 volt DC 1A regulated plug pack. If mains power is not available a 12 volt solar panel (5 or 10W) may be used. Tel. Mait Industries on 1300 739 920

New swing-overs speed up milking THE PURCHASE of an

adjoining property, with its existing milking shed, has led Merrigum dairy farmers, Kevin and Faye Fitzsimmons, to an extensive upgrade that has already paid dividends. In July last year the new acquisition expanded their land to 140 from the original 77ha and the renovation to the shed was part of extensive improvements to the new property. In the process they abandoned their original milking shed. “It was a good dairy”, explained Kevin, “it just needed tweaking to bring it into the 21st century. We redid the yards and the water supply – the basics were all there, including the auto wash.” At the same time they

Kevin Fitzsimmons in front of his improved dairy.

of 20 new WestfaliaSurge swing-overs with automatic cluster removers, through DTS Kyabram, the local dealer for GEA Farm Technologies. The WestfaliaSurge DeMax 55 automatic

went to auto draft with computer readout, new yards, a new crush and they upgraded to a new lobe-type vacuum pump. The major improvement to the milking equipment was the installation

cluster removers are an advanced electronic unit and, in time, can be easily upgraded to the Dematron 70 milk metering system. The cluster removal process can be tuned to Mr Fitzsimmons’ specific needs with adjustable delay between vacuum cut-off and removal cylinder activation. There is adjustable delay for milk let-down of up to six minutes. The stainless steel swing-over support arms are manufactured by GEA at their factory in Colac, Victoria. They enhance the system by providing better cluster alignment and free up the working area from milk and pulsation tubes hanging down. The arms that Mr Fitzsimmons ordered incorporate herd

test meter brackets. They have a ‘swing to start’ facility which makes for easier operation and gas strut locators provide positive location so they cannot move while the cups are on the cows. Mr Fitzsimmons said they have built up a good relationship with DTS Kyabram over the years. The new swing-overs took four days to install but the Fitzsimons were able to use the dairy right through, section by section. “It was planned well.” Mr Fitzsimmons said that they can put through about 200 cows per hour if there are two operators milking and 140 to 150 if he is on his own. Tel. GEA Farm Technologies on 1800 789 100.

The new generation 3000 series Grassfarmer is the one you’ve been waiting for – an improved and more refined version of one of the world’s most popular grass drills. Engineered to exceed all your expectations with a raft of new and improved features. Built with the sort of quality workmanship you’d expect from a company that has built and marketed seed drills for more than 40 years, the Grassfarmer models are available as Tine and T-Boot or as concave Disc opener versions, 14 row, 2.1m sowing width and 18 row 2.7m sowing width.

TINE AND T-BOOT MODEL FEATURES:

FROM O N LY 1 $ 8 ,4 5 0 + G S T !!

❱❱ ❱❱ ❱❱ ❱❱

Unique Aitchison slim line castings and inverted T-boot Larger 14” Disc coulters with a stronger axle design Super strong 25mm tines, designed for superior trash clearance ‘Rodent Stop’ slide mechanism fitted

SPECIFICATIONS 3014C Overall width 2720mm (8’11”) Sowing width 2.1m (6’11”) No. Tines 14 Tines

3018C 3320mm (10’11”) 2.7m (8’10”) 18 Tines

Row spacing

150mm (6”)

DISC MODEL FEATURES: ❱❱ ❱❱ ❱❱ ❱❱

Large 14” concave discs, ideal for matted pasture renovation Individually sprung discs give superior contour following ‘Rodent Stop’ slide mechanism fitted Unique Aitchison sponge seed distribution system fitted to both models, gentle on seeds and very accurate.

SPECIFICATIONS 3014D Overall width 2720mm (8’11”) Sowing width 2.1m (6’11”) No. Tines 14 Discs Row spacing 150mm (6”)

Contact your nearest Reese dealer for more information. All prices are exclusive of GST. Freight charges may apply

Reese Agri

| Free phone 1800 140 196 | Phone Murray 0400 540 300 |

www.reeseagri.com.au

3018D 3320mm (10’11”) 2.7m (8’10”) 18 Discs 150mm (6”)

Dairy News AUSTRALIA september 2014

34 // machinery & products

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and solar electricity installation on a dairy farm at Koorooman, just north of Leongatha in Gippsland, is set to return power bill savings of up to $6500 per year to the farmers. Peter and Jenny Hulshof sharefarm with owner Louisa Noordenne, milking between 330 and 340 Friesian cows on a 42-stand rotary built 27 years ago. The property, ‘Bona Vista’ covers 224ha, including the area for young stock. The milking cows run on about 168ha. They chose Solar Dynamics, based in the south-eastern suburbs of Melbourne. Solar Dynamics is the sole distributor of the well-known Chromagen solar hot water products and handles solar power installations providing a 25 year warranty. After inspecting the dairy, Doug Phayer, the senior site assessor, suggested that he quote on setting up a solar system to supply energy for all the power requirements for the dairy and the hot water. After almost a year’s deliberation Louisa Noordenne agreed to go ahead. Work on the installation started on May 1 this year. It took three days to get the 15 kW solar electricity system up and running. Sixty 250 watt Canadian solar panels are fitted to the north-facing roof of the milking shed and six CR110 solar panels provide energy to three hot water units, each with 300 litre tanks. A pump circulates the water on each of the hot water tanks. As no heating elements are connected on the hot water units the system operates as a pre-heat for the existing boiler at the dairy. This way solar pre-heated water is provided, so the boiler heats to the operating temperature required for the post-milking wash-downs. “Our shed is on three-phase power

Peter and Jenny Hulshof in front of their dairy, now fitted with 66 solar panels.

so Solar Dynamics fitted a 15,000 watt three phase grid connect inverter,” Mr Hulshof said. “What we use during the day comes from the solar and any extra goes into the grid so that we can get paid for it or as a reduction off our energy bills. We get 8 cents per kW on the grid.” Mr Hulshof said they considered solar energy to save money. “We use 1160 litres of hot water each day in the dairy and that’s lots of electricity. With the high inputs in dairying, we needed to save costs somewhere. Louisa was very supportive of the project.” The Hulshofs said as the solar energy system has only been in for a couple of months, it hasn’t really been long enough to assess the advantages. “There is a read-out on the control panel of the daily solar input and it’s easier than we thought to manage it in

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the practical operation of the dairy.” Solar Dynamics director, Wayne Foster, estimates the combined systems; solar hot water and solar electricity, should achieve a reduction on grid-supplied power of over 30,000 kilowatt hours per year, equating to more than $6500 per year savings on electricity costs. “This will be a combination of a reduction of grid power required and some solar credits for exporting power to the grid at a rate of eight cents per kilowatt hour credit. “With over a 17% return on the investment and the rising cost of electricity the system will pay for itself in less than five years. Backed with a 25 year performance on the solar electricity panels it will be pumping along every day helping save money.” Tel. Wayne Foster 0400 192 095.

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