EXPORT SAGA: DLS to sell stranded cattle PAGE 5 WORKING CLOTHES
Air seeder hits spot PAGE 32
REMOTE MILKING
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APRIL 2015 ISSUE 57 // www.dairynewsaustralia.com.au
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UDV wants opening price announced earlier PAGE 3
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DAIRY NEWS AUSTRALIA APRIL 2015
NEWS // 3
The cows trek back from a voluntary milking on the Crowden family’s farm at Caveside, near Tasmania. Read more, pages 30-31.
The WA season requires precision management, as shown by Ruth and Ian McGregor. PG.18
UDV wants change in pricing structure
New Zealand natives John and Karen Hunt have applied NZ practices to work in South Australia’s lower south-east. PG.20
UNITED DAIRYFARMERS of
Victoria president, Adam Jenkins, wants processors to give farmers their opening milk prices well before the start of the season. Mr Jenkins, who farms at South Purrumbete in western Victoria, believes a change in pricing would stimulate production and give added confidence to both farmers and processors. It hasn’t been unusual in the past for processors to reveal their opening price after July 1. Last year, Fonterra revealed its opening price on June 2, while Murray Goulburn revealed its opening price on June 25. Mr Jenkins told ABC Radio this month that pricing has always been
New software provides a safeguard for herd health and operator comfort on the Whittaker family farm at Denison in Gippsland. PG.28
NEWS ......................................................3-13 OPINION .............................................. 14-15 MARKETS ........................................... 16-17 MANAGEMENT ................................ 18-21 BREEDING MANAGEMENT .....22-23 ANIMAL HEALTH ...........................24-27 NEW DAIRY TECHNOLOGY ..... 28-31 MACHINERY & PRODUCTS ...................................... 32-34
a source of frustration to him. “As an industry, it’s something we’ll have to look at more and more,” he said. Mr Jenkins said the pricing structure is part of the equation of why Australian milk production has not grown. And while competition is important, it can sometimes be to the detriment of the industry, he said. “We all love the competitive nature of our industry and the free market that we operate in,” he said. “I think we don’t want to ever get rid of that. “But sometimes I think the competitive nature can be at the detriment of our industry.
“You can’t tell me that before the first of July that we don’t know what we’re going to be getting for the next three or four months, at a factory level, and that’s a source of frustration that I’ve had from an economic point of view for a long time. “For me down in the south-west I’m setting up my calving herd in May. “I want to know what cows I’m keeping or selling and what’s doing. “I’m headed off into that season with last year’s milk price and then hit the first of July and I’m not sure what it is for the next three or four weeks.” Mr Jenkins said processors would also benefit from more transparent pricing. “We have a lot of churn of milk. We have great
farmgate competition but factories are sometimes not willing to invest because they’re not sure how much milk they’re going to have to invest in their steel. “We’re a bit chicken and the egg. We (farmers and processors) all want to head down the same path but we’re not sure how we’re going to invest to get there, and the pricing is definitely something that needs to be looked at as part of this equation.” A spokesman for Lion said part of its approach to build secure and mutually rewarding partnerships with its suppliers has been offering contract terms of up to five years, with no Tier 2 pricing, across all regions. “In addition, last year
we introduced the most secure pricing offer in the Southern states, allowing farmers to lock in pricing on up to 50% of their volume for up to three years at their election,” the spokesman said. “This option has already proven very popular - for example, around two thirds of our Tasmanian suppliers have elected to lock in a percentage of their pricing under this innovative arrangement. “The feedback we’re hearing is that the mix of contract and price certainty is giving Lion suppliers more confidence and certainty to plan and invest in their operations.” Murray Goulburn and Fonterra were not able to respond by our deadline.
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DAIRY NEWS AUSTRALIA APRIL 2015
4 // NEWS
Government urged to legislate water promise THE VICTORIAN Farm-
ers Federation wants the Federal Government to commit to a timeframe to lock in a 1500 gigalitre cap on water buybacks in the Murray-Darling Basin. The Coalition made an announcement last month that it would “bring forward” legislation to cap water buybacks to 1500 gigalitres. However, the VFF said it has stated its commitment to a cap several times since 2012 but has so far failed to table the legislation. “They’ve been in power now for 18 months, we need to see some proof they really mean it,” VFF Water Council chair Richard Anderson said. “Saying it again is not enough. We need to know they’re serious. “We need this legislation passed so future governments can’t just take
the easy option of wading into the market and stripping irrigation communities of their water and wealth.” The Prime Minister made the commitment to cap buybacks at 1500 gigalitres in 2012 as part of his government’s promise to return 2750GL of water back to the Murray-Darling Basin. He promised a focus on efficiencies from upgrading irrigation equipment, instead of just purchasing water rights. Irrigators were concerned in December when the government opened a rolling tender to buy water in the Murray and Murrumbidgee catchments of New South Wales. It will close in April 2015. Last year, Southern Riverina Irrigators chairman, John Bradford, told ABC Radio it was “an easy way out”.
“I think they’re finding it very hard to find the water.” The VFF has previously expressed concerns over the impact of water buybacks on irrigators and rural communities. Further buybacks threaten the viability of irrigation districts because there are fewer irrigators left to pay the fixed costs of running the system. “Modernising irrigation infrastructure and undertaking environmental works is in the best interest of farmers and the environment. Much more useful than just buying the water,” Mr Anderson said. The Australian Dairy Industry Council (ADIC) welcomed the Government’s announcement. ADIC chairman, Noel Campbell said the Government’s announcement gives farmers and processors in the Basin, where
Almost 2000 dairy farms and 16 major processors are located within the Murray-Darling basin. Inset: Richard Anderson.
more than 25% of Australia’s milk is produced, the confidence to continue dairying. “Almost 2000 dairy farms and 16 major milk processing factories are located in the Basin, with more than 12,000 people
in the region who rely on the industry for their livelihood,” Mr Campbell said. “With 97% of those farms relying on irrigation for pasture and feed production, capping buybacks at 1500 GL gives farmers assurance that they will
be able to continue adapting their practices to produce more milk with less water.” Mr Campbell said a clear plan is now required to legislate the cap, confirm the extended period for buybacks, and the
delivery of 600GL in infrastructure works and 650GL in environmental works. “This is the triple-bottom line approach we have sought from the beginning, and we urge all parties to support this outcome.”
Hope Dairies receives Labor backing MINING MAGNATE Gina Rinehart’s vision to supply Australian dairy products to China has received approval from the new Queensland Labor government. Ms Rinehart’s Hope Dairies had agreed on a memorandum of understanding with the former LNP government to buy up as much as 5000ha of dairy farms in the Mary Valley in the state’s south east. That land had earlier been purchased by the government for the construction of the now cancelled Traveston Dam.
Hope Dairies will have majority Australian ownership through the investment of mining magnate Gina Rinehart’s Hancock Prospecting with Asian partners taking about 30% equity. The state-of-the-art processing plant which will focus on production of infant formula and other products including UHT milk will be located centrally to the South Burnett and Mary Valley farming regions. The factory is expected to be supplied from intensive dairying hubs carrying 16,000 milkers with the company
committing to buy about 30% of its milk requirements from dairy farmers in the region. Hope Dairies chief executive Dave Garcia confirmed the agreement with the Queensland government would be honoured and the business plan was moving forward. The venture will be a welcome stimulus to the Queensland industry which has been in decline for many years with farmer numbers shrinking and virtually all manufacturing capacity closing. Hope Dairies plans to process about
150 million litres of milk annually and the giant new project is expected to create about 480 full-time jobs. With production and first exports scheduled to begin in the last quarter of 2016, the venture partners are already turning their minds to a second project. The memorandum commits the State Government to delivering a secure water allocation to the venture of about 30,000 megalitres on commercial terms. Dano Chan, who is also based in Hong Kong, is a director of Hope Dair-
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ies. He said with the enterprise needing up to 20,000 head of stock, planning was already underway to engage local farmers in breeding contracts to preferentially source many cattle locally. Land acquisitions were in progress both for locating intensive total mixed ration dairies and for growing feed. “This will be the most modern dairy enterprise in Australia. “We will be making extensive use of local expertise, with so much work to do in a tight time frame,” Mr Chan said.
DAIRY NEWS AUSTRALIA APRIL 2015
NEWS // 5
Abbott toasts Tassie with milk IF YOU’RE going to have one man in your
corner to promote your industry, it may as well be the Prime Minister. Tony Abbott was back in Tasmania last month, not long after eating a raw onion (skin and all), giving the onion industry more exposure in 24 hours than it had received in 24 months. So, invited to open the DairyTas conference dinner in Burnie, he was asked to toast the crowd with a glass of Tasmanian milk. We think he saw it coming. “I was thinking, at this time of the night, someone might have given me something a bit stronger - I am presuming there is a bit of rum in this,” Mr Abbott said. “But whatever is in there it will taste fantastic, because it is fresh,
it is natural and it is Tasmanian.” Mr Abbott spruiked the Government’s removal of the carbon tax as well as the Free
Trade Agreements signed under its watch. He also reminded the audience of the $60 million the Coalition had contributed to the State’s irrigation scheme, as well as extending the Tasmanian Freight Equalisation Scheme to exports. “Tasmania produces almost 10% of Australia’s dairy products, I know you have only got 3% of Australia’s people, so some of this dairy produce is going overseas,” he said. “Hopefully, in months and years to come, a lot more will go overseas, because you will be more competitive and you will have better markets.” It was a brief stop, and TasDairy sent the PM back to Canberra with a selection of the State’s finest cheeses.
JON CONDON
THE WESTERN Australian live export company
behind the failed live export deal to China, Carpenter International, went into voluntary administration after a Chinese cattle importer sought to sharply downgrade the price on a consignment of dairy cattle. Carpenter International had agreed to sell a consignment of Holstein dairy heifers to Chinese importer, Be Green Import Export Co, but Beef Central understands Beijing-based Be Green sought to renegotiate the original contracted price from about US$3000 each to about US$2100. Beef Central understands Carpenter paid about A$1850 for the dairy heifers, around 220kg in weight. Carpenter International went into voluntary administration on March 24. WA accountancy firm, Grant Thornton, was appointed to manage the business’s affairs. A meeting of creditors was held in Melbourne on April 7 (see story above). Carpenter International has operated in the live export industry for the past two years. It is owned by Carpenter Beef Pty Ltd, which is ultimately owned by Mowbray Ltd, a company registered in Malaysia. It is understood that awareness about Carpenter’s financial difficulties emerged when the company could not pay for the cattle, and the shipping vessel was cancelled after payment was withheld. Difficulties started to emerge in Australia’s China dairy heifer trade about October or November last year, when importers displayed a reluctance to put up letters of credit. The market has since gone “very quiet”, live export trade sources said. “It’s virtually pulled up,” a source said. “There’s a couple of shipments in quarantine now, one of which is Carpenters, and the other a small shipment from Austrex.” This article was first published at www.beefcentral. com and has been reprinted with permission.
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Mr Donnelly told ABC Radio any sale would yield less money than the original export deal. “It certainly will be less, firstly, because Carpenter did get a very good price for them pursuant to its original contract,” he said. “Secondly, this company Carpenter International now doesn’t have the capacity to source an alternative customer or provide shipping. “So it would be on-selling the cattle in the feedlot to an exporter who could do that. “That means we’d get a poorer price than if we were able to land them in China ourselves.”
OV E
will be owned by the Matthew Donnelly facilitating agency. company, some of the of GTA told ABC Radio A committee of cattle may be owned by between 3000 and 3500 creditors was also the agents,” he said. cattle were suitable for established during the “Most owners are the export market while meeting. agents rather than the rest would be sold Some of the cattle into the domestic market. farmers. The majority were owned by the of agents have company and paid the farmers, some were owned These cattle on by the agents. agistment are expected there are some farmers that At the time to be sold into the sold direct of their domestic market. to Carpenter appointment, International there were 6900 who are affected, but 90% They will also sell a Friesian and Angus of the herd are covered by heifers held in quarantine small amount of cattle agents. into the domestic at the Gerang Gerung “If the title in the market to create funds Feedlot, in Victoria’s cattle has passed to Wimmera, and 4100 head for the purposes of the company, then the administration. on agistment mainly in agent will be an ordinary He said the company Western Victoria. creditor and share in was currently working to These cattle on whatever outcome agistment are expected to establish the ownership ordinary creditors be sold into the domestic of the cattle. receive.” “Some of the cattle market.
U NIQ U
Services has been appointed to sell the 11,000 heifers stranded in Australia after a live export deal to China failed. DLS was appointed by Grant Thornton Australia (GTA), which was appointed administrator after the export company, Carpenter International, went into receivership owing an estimated $20 million to creditors. DLS, Charles Stewart, Alex Scott and Wellington Livestock, were among the 30 creditors that attended the creditors’ meeting in Melbourne where DLS was chosen as the
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DAIRY NEWS AUSTRALIA APRIL 2015
6 // NEWS
Woolworths label just “smoke and mirrors” WOOLWORTHS HAS
introduced its Farmers’ Own milk brand into 194 stores in southern Queensland but its claims of benefitting farmers and consumers has been derided as “smoke and mirrors”. The milk will be sourced directly from two dairy farms in the Sunshine Coast hinterland. It follows the launch of the Farmers’ Own brand in NSW, with milk sourced from Manning Valley dairy farmers; Western Australia, sourced from farms in the Margaret River; and Victoria, sourced from the Otways region. Queensland is the latest state to roll out the highly successful Farmers’ Own brand, following a trial with NSW Manning Valley dairy farmers led to it being sold across that state. The milk is now also available in Western Australia
from farms in the Margaret River and from the Otways region for Victorian customers. Woolworths Head of Trade - Chilled, Paul Turner, said the product has “proven to be great for farmers, great for Woolworths, but most importantly customers have shown they love it”. “Local varieties (of Farmers’ Own) in other states have been extremely popular and we know it’ll be just as popular here in southern Queensland. “At this stage, the milk will be available as far north as our Rockhampton stores. We’re looking for a local farmer and processor in Far North Queensland to serve our customers in that area. The whole idea of Farmers’ Own milk is to support local farmers so we are working hard to cover the whole state.” Queensland dairy
farmer John Cochrane chairs the Premium Milk group which collectively bargains on behalf of dairy farmers to supply Parmalat. “We approached Woolworths and would have liked them to have taken milk from all the Premium group and given some sort of a margin across 200 people, which would have helped a number of people,” he told ABC Radio. “I think we all understand this is a smoke and mirrors thing. We all know the real problem is the price of milk. On January 26, 2011, milk went from $1.28 a litre to $1, not because of over-supply or poor quality or customer rejection, but because they could. “Now, 28 cents a litre across 2 billion litres of milk in Australia, was $560 million taken out of the industry in one day.” He said Woolworths
uses the “divide and conquer rule” but this does not benefit the dairy industry in any state. Dairy farmer, Lucas Kennedy, Conondale, one of the two Queensland farmers to supply the Farmers’ Own brand in Queensland, said the relationship “gives farmers end-to-end transparency from shed to shelf, a long term contract and a closer relationship with their customers”. Mr Kennedy told ABC Radio the deal meant he had more negotiating power when setting a price, which is locked in for three years. Mr Kennedy could not disclose how much he was getting paid per litre of milk, but said the deal was better than those offered by the major processors. • Opinion: Lifting the lid on Farmers Own milk, page 17
NSW Farmers want underpass funding NSW FARMERS is calling on the NSW Government to fund cattle underpasses. The call follows a survey by the association of cattle and dairy farmers in which they nominated numerous crossings where there had already been a livestock injury or death, or where movement of livestock was “an accident waiting to happen”. Farmers identified increased volumes of traffic and poor driver awareness as issues that were making routine cattle crossing an increasingly difficult task. In particular it identified issues for dairy farmers in the Oxley and Bega electorates, where expanding local populations and growing tourist traffic were creating greater danger for livestock and the general public. The survey revealed that many farmers had to move their cattle across increasingly busy roads up to twice a day to maintain the productivity of their business. However, it was almost impossible for an individual farmer to fund retrofitting an underpass.
“Taking cattle off our roads benefits public road safety, reduces unnecessary traffic congestion and eliminates issues associated with effluent and soil on road surfaces,” NSW Farmers’ Dairy Committee member Scott Hurrell said. “In our local area at Comboyne, farmers move an increasing number of cattle across roads. “On our own farm, there are five road crossing points which are used for up to 40 crossings per month. “Being able to cross our cattle safely is important for the long term viability of our family business.” The Victorian Government has overseen a highly successful cattle underpass scheme. NSW Farmers is calling on the NSW Government to implement a similar scheme in NSW.
WCB lifts price to $6/kg MS THE WARRNAMBOOL Cheese and Butter Factory has made one of the season’s rare farmgate price rises with a lift in butterfat of 8c/kg and protein of 20c/kg. The company says the rise takes its weighted average price to $6 per kilogram of milk solids. This payment is retrospective and applies to milk supplied from 1 July 2014. Outgoing WCBF CEO, David
Lord, said the increase (announced March 18) was ahead of the scheduled April review. “We have reviewed our milk price sooner than planned as trading conditions have become clearer since our January review and we are committed to ensuring that favourable price movements are passed through to you earlier whenever possible,” Mr Lord said. “We will review the milk price
again in June. “It is particularly pleasing to announce this increase against the market trend and despite the difficult world market trading conditions experienced for most of the year. “During this time some of the key drivers of our business performance have remained relatively strong. “We see this as evidence that
the execution of our strategy of business improvement through a higher value and more stable product mix over recent years is contributing to stronger business performance.” Mr Lord said the recent purchase of the Everyday Cheese Business from Lion would help deliver stronger business performance and less volatility over the longer term.
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DAIRY NEWS AUSTRALIA APRIL 2015
NEWS // 7
Long-term vision missing in Australian agriculture THE NETHERLANDS
is the second largest exporter of food in the world – exporting AUS$70 billion each year from a landmass of 42 square kilometres and a population of 17 million people. The vital ingredient for success is a close collaboration between the “golden triangle” Government, private industry and universities and research institutes, according to Dr Aalt Dijkhuizen. Dr Dijkhuizen, who spoke at the Gardiner Foundation’s Dairy Leaders lunch earlier this year, is the President of the Dutch Topsector Agri
& Food, a collaboration and innovation network between government, private industry and universities and research institutes. More recently, he established the Holland Centre in Shanghai to support Dutch agri-food companies doing business in China. “The Australian R&D community and academic institutions are world class but I am not sure Australia currently has the necessary alignment of all major stakeholders involved outside of the ‘cooperative research centre’ model, which is limited by its domestic focus and short
term nature,” he said. “Successful partnerships need to be at a very senior level, selective and international and intended to last long term.” Dr Dijkhuizen said Australia did not give its agrifood sector the merit it deserved in terms of its place in the economy’s future development. The Australian Government needs to invest or it could miss out on the opportunities in Asia. “Increasing wealth in formerly poorer countries will mean a strong increase in the global demand for safely produced high-quality protein,” Dr Dijkhuizen said.
“Based on overseas experience I believe Australia could accelerate food security and export outcomes with improved cooperation at the highest level among government, private industry and knowledge institutes, which would be best encouraged through more government support for R&D and collaboration. “This partnership culture is not as evident in Australia as I have seen in other countries. “While this culture is immensely beneficial, it doesn’t happen automatically and there is a strong role needed from government to stimulate poli-
cies and projects in which all three partners benefit. “A new high-level innovation model could bring unprecedented opportunities and commercial benefits - even more so if the government supports R&D and additional international collaboration,” he said. Dr Dijkhuizen said the Topsector policy works because the top sectors get more attention and grow faster than other parts of the economy. “That combination of government, private
Gardiner Foundation chair Michael Taylor, CEO Mary Harney and Dr Aalt Dijkhuizen.
industry and science, we call it the golden triangle. “You will see in many countries they don’t work together at all. You don’t have to agree but you share and discuss your ambitions and targets
together. “You need to build mutual trust, at the end of the day you have to trust each other. With the golden triangle, scientists have more funding than ever.”
Successful countries export knowledge THE NETHERLANDS don’t simply export food – it exports the intellectual property behind its burgeoning agrifood sector. Dr Aalt Dijkhuizen, the president of the Dutch Topsector Agri & Food, says a combination of scarce land availability and high labour costs means the only way for the Netherlands to survive is to increase productivity. “We sell the product, the knowledge and the technology. That’s why industry and science work together, supported by Government.” Dr Dijkhuizen believes Australia has
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There are not many industries where demand will not only grow, but the quality people seek will be higher. “There are so many opportunities. I know dairy prices are up and down but the underlying trend is very, very good.” Dr Dijkhuizen said the agri-food sector should not try and avoid sensitive topics like genomics, GMOs and biotechnology. “We need to keep them in the discussion, we need to keep them on the table, and also need to keep investing in them because we will need it in the future.
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DAIRY NEWS AUSTRALIA APRIL 2015
8 // NEWS
Botulism scare, poor yoghurt sales hurt Fonterra Australia Fonterra’s Australian business. In its half year results, released in February, the co-op announced that the Australian business’ earnings – before income
SUDESH KISSUN
FALLOUT FROM
the 2013 false botulism scare and poor yoghurt sales continue to haunt
tax (EBIT) – dropped $84 million compared to the previous year. The Darnum plant in Victoria was caught up in the false botulism scare as some of the
contaminated whey protein concentrate (WPC80) ended up at the plant for processing. Darnum was forced to stop making infant formula and switch to
skim milk powder; lower returns for skim milk powder caused revenue to plummet. The co-op also lost 17% market share in the yoghurt sector.
Theo Spierings and John Wilson presenting Fonterra’s poor interim result.
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Dairy farmers who want to breed for improved fertility and workability will be keen to investigate the April release of the Australian Breeding Values (ABVs). The new fertility ABV is a better indicator of the fertility of a bull’s daughters because it draws upon the data for for several traits, including lactation length, mating and pregnancy data. This is something farmers have been asking for and Dairy News Australia will investigate how it can impact on-farm breeding programs. We’ll also examine the bulls with the highest Australian Profit Rankings and how they could influence your breeding program. BOOKING DEADLINE: April 29 AD MATERIAL DEADLINE: May 5 | PUBLISHED: May 12 CONTACT: CHRIS DINGLE | T: 0417 735 001 E: chris@dairynewsaustralia.com.au
Fonterra chairman John Wilson said the Australian business has been frustrating for the co-op and farmers. However, he says Australia remains a fundamental market and work is continuing to turn the business around; business performance is good but product prices have let it down. “The Darnum plant has been processing a significant amount of skim milk powder; this year is frustrating for us and farmers – skim milk powder prices are down. That has meant our returns relative to… our product mix and relative to the milk price set up in Australia has not been efficient. It’s not through a lack of business performance but just through the price of products.” Mr Wilson hopes the joint venture with Chinese infant formula maker Beingmate will turn around Darnum’s fortunes. Fonterra is taking up a 20% stake in Beingmate; the joint venture will buy the Darnum plant to make infant formula for the Chinese market. Mr Wilson said Fonterra is refilling the Darnum plant to resume making nutritionals. “Because of the specialist nature of nutritionals, you don’t just fill it up straightaway again,” he says. “That’s why the Beingmate partnership is so important.” On the yoghurt front, Fonterra bought Tamar Valley Yoghurt in November 2013. Mr
Wilson said the business is doing well but the “low innovated yoghurt” sector needs fixing. Despite a drop in earnings, the Australian business had some successes during the six months. Fonterra is now the number one supplier of products to supermarket giant Coles, up from being ranked number 33 last year. It also signed a new private label contract with Woolworths. The chilled spread and cheese businesses lifted market share by 22% respectively. Operating costs have dropped 22% over the last two years, saving $35 million. Mr Wilson said Australia remains a fundamental part of Fonterra’s strategy. “There are huge opportunities for us in Australia. We are tidying up our business; there are some highlights and some lowlights, unfortunately the lowlights outweigh the highlights.” Mr Wilson said Murray Goulburn’s product mix is nicely aligned with the Australian market while Fonterra’s is not. However, the Australia market remains a difficult place to trade for all processors. The manufacturing/ processing sector is deeply fragmented; Fonterra is one major foreign-owned processor alongside Saputo, Kirin Holdings and Parmalat. Australia also has a tight and competitive retail sector.
DAIRY NEWS AUSTRALIA APRIL 2015
WORLD NEWS // 9
Ireland poised to capitalise through value-adding DAVID OWENS
QUOTAS WERE intro-
duced following a period of milk production growth across Europe that resulted in excess milk lakes and butter mountains, at a time when Europe was a much smaller market with only 10 member states. In the years immediately following the introduction of quotas, there was still significant oversupply across Europe, at that time an estimated 10-15%. With European milk prices exceeding those of external markets and international demand for dairy a lot lower than what it is today, export refunds along with intervention and product support subsidies were hugely important market features. Intervention and market supports underpinned everything in the dairy industry from product prices, product mix, quality and also the industry mindset at that time. Ireland, given its reliance on commodities, was more affected compared with other European countries which had large domestic markets for fresh dairy products. A significant proportion of the butter and skimmed milk powder (SMP) we produced back
in the 1980s was sold into intervention. An estimated 500,000t of European SMP was used in the calf milk replacer industry, which was subsidised and had a significant presence in Ireland at the time. In 1984 Ireland produced 184,000t of SMP, 165,000t of butter and 54,000t of cheese. Over the past 30 years, there have been many changes within the industry. However, the volumes of milk produced have been constant at about 5.5 billion litres per year. Under the constraint of quotas, the industry has expanded abroad where quota was not a limiting factor, diversified into other sectors and invested in adding value to the milk pool. For example, 30 years ago the whey from the cheese was treated as a waste stream which was generally used to feed pigs. The industry has not only invested in cheese production capacity but also in R&D around whey processing and other value-added streams. It now produces over three times the amount of cheese and all whey is now processed into high-value dairy ingredients which are used primarily in the infant formula and sports nutrition sectors. Volumes of butter pro-
duced have remained relatively similar to 1984 at 165,000t. However, instead of selling mostly into intervention, as was the case in the early years of quota, the growth in Kerrygold branded butter sales to Germany in particular, but also to the UK and the US has been a real success story for the industry. The volumes of Irish milk supply used for liquid milk consumption amounted to 516 million litres in 1984 or 9.5% of the total supply that year. Last year, this had fallen to 474 million litres or 8% of our supply, despite the population growing by 1.5 million. Like other developed countries, we are now drinking less milk per capita. The infant formula manufacturers were present in Ireland when quotas were introduced. However, their levels of production were much lower than they are today. As the infant formula industry expanded its production capacity here, the demand and the outlet for high-quality, infant formula grade dairy ingredients also grew. Ireland now accounts for about 10% of global infant formula production with significant investment in capacity in recent years. The dairy industry
also supplies significant volumes of ingredients to infant formula manufacturers in Europe and beyond. As the export reach of the industry has grown, with exports going to 138 different markets in 2014, so too have the requirements to meet the highest international standards which are required to gain access to many international markets. The profile of customers now using Irish dairy products also means that product quality, production standards and investment in innovation and capabilities are key. Dairy exports increased by 3% last year, to leave trade some 56% higher than five years ago. When dairy-based enriched powders are included, the value of dairy exports was almost €3.8 billion or 36% of Ireland’s total food & drink exports last year. Irish dairy exports are well-positioned to grow outside Europe, as the sector has an international marketing footprint that is truly global. While as much as 40% of Ireland’s total food and drink exports are destined for the UK market, just 32% of its dairy exports go there, with 40% of Ireland’s dairy exports going to international markets. The balance of our dairy exports is destined
Sales of Kerrygold branded butter to Germany, the UK and the US has been a success story for the Irish dairy industry.
for continental European market. The growth in dairy exports in recent years has focused on Asia, Africa and the Middle East, which now account for 80% of dairy exports to international markets. The most striking trend of all is the sustained growth in exports to China, which is now our dairy industry’s second largest market after the UK, driven largely by the growth in infant formula exports. The progress made is highlighted by the fact that in 2008, China was 13th in terms of export
markets. The forecasted additional 2 billion litres of milk which Irish farmers will produce will need to be exported to markets outside of Europe. With production rising across Europe by anything from 1-3% per year over the next five years and European consumption growing at a much slower rate, then sales to international markets will become ever more important. The investments being put in place in Ireland at both farm and process-
ing level, the auditing of dairy farms as part of the Sustainable Dairy Assurance Scheme and the promotion of Ireland as a sustainable, grass-based source of dairy, will ensure that the Irish dairy industry will be in a good position to expand its global reach in the years ahead. • David Owens is dairy ingredients sector manager with Irish food promotion body, Bord Bia. This article was first published in the Irish Farmers Journal and has been reprinted with permission.
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NEWS – DAIRYSA CENTRAL CONFERENCE // 11
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5 Castlegatejames.com.au 1. Rick Gladigau, Mt Torrens, with Sam Acheson, 21C Agribiz Advisory Services at the Dairy SA Central Conference in Hahndorf on March 18. (All photos: James Stacey) 2. Gavin Newman, Meadows, Michael Bowden, Hills Farm Supplies, and Meredith Newman.
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DAIRY NEWS AUSTRALIA APRIL 2015
12 // WORLD NEWS
Indian companies can help N PAM TIPA
NEW ZEALAND Prime Minister John Key says India knows it needs a free trade agreement (FTA) with New Zealand, though an FTA is always “challenging” for the agricultural sector of any country we negotiate with. But the technology
transfers and other benefits to India of an FTA would far outweigh any downside for Indian producers of New Zealanders selling products there, Key told an Auckland business summit. He said the former Indian Prime Minister Manmohan Singh had told him privately that he “had
to feed his people” and “it was not easy”. India has over a billion people so there are massive opportunities for New Zealand companies there, Key told the India New Zealand Business Council summit in Auckland on March 13. “Capturing a tiny fraction of that market is massive from New Zealand’s point
CHINA TRADE GREAT BUT WHAT IF...? NEW ZEALAND risks becoming too dependent on China, says John Key. “I am very pro our China relationship as New Zealanders would know. I have stood up for that relationship despite the politics that sometimes collect along the way.” It has made New Zealand stronger and seen us through the global financial crisis. “But New Zealand has had experience of being too dependent on one market… when we were pretty much Britain’s farm in the South
Pacific. When it joined the European Common Market in the early 1970s the impact on New Zealand was dramatic. “The long term risk to New Zealand would be [our becoming] totally China-dependent, and then if, for whatever reason, the relationship going sour; or it might be something completely beyond our control.” Key said we needed diversification in New Zealand companies and markets.
of view. But it’s equally important for India. “The FTA will only happen when Indian companies lobby the Indian Government because there will always be resistance. “An FTA doesn’t complete economic transactions; it is actually just an entree to each other’s markets. It is a symbol that you are very serious about what you are doing and you want to build a long term relationship.” The summit was attended by business leaders and entrepreneurs from India, many here for the World Cup Cricket. Key’s comments were part of a wide range of views on the FTA, with a number of Indian representatives arguing that an FTA was not immediately necessary for good
New Zealand-India Business Council chairman Sunil Kaushal with NZ Prime Minister John Key and Indian politcian Nandan Nilekani.
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of both countries. New Zealand’s technology, ideas, innovation and
know-how, including dairy production, processing and supply chains, were cited
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DAIRY NEWS AUSTRALIA APRIL 2015
WORLD NEWS // 13
p NZ clinch FTA as among the best “products” we could export. Several speakers also said dealing with the individual states and sectors within India may provide more immediate opportunities for business and trade than getting a government-to-government agreement. Rupert Holborow, Ministry Foreign Affairs and Trade economic division manager, who led the 10th round of the FTA negotiations with India, says India’s population will soon be the world’s largest and its younger demographic and growing GDP should compel New Zealand to recognise it needs to engage more with India. He said an FTA would bring tangible benefits but was also symbolic as a statement of intent by both governments as to how they wanted to characterise the bilateral relationship as it develops. However, just home from leading the 10th round, he said “with sadness I [see] there is still a considerable distance to close if we are to conclude our FTA. I can’t see it happening imminently. I wish I could say otherwise; it’s a tough long road ahead.” But New Zealand hasn’t lost hope and doesn’t intend giving up. “But a key message is... I don’t believe we should hold
off our engagement strategy with India waiting for something that may still take some time to materialise.” Indian high commissioner to New Zealand Ravi Thapar said New Zealand has smart technologies which could connect well with Indian industry. “Rather than New Zealand just projecting itself as a leader in agriculture it should project itself as a leader in smart technologies,” including dairy production, agriculture and general food production. Primary Industries Minister Nathan Guy said India has the world’s largest dairy industry and a “milk revolution” could be achieved by modernising the supply chain and improving productivity by better animal husbandry and genetics. “These are all areas New Zealand knows a lot about and creates exciting opportunities in partnerships between the two countries.” New Zealand also offered high value premium products. INZBC executive member Sameer Handa said for New Zealand business trying to start in India, the country is too big so they should bring it down to the states, the sectors and the markets they wanted to get into.
IT SECTOR COULD BENEFIT FROM FTA LESSONS FROM the IT sector working with the dairy industry in New Zealand could help the Indian primary sector, says an IT expert. Michael Horton, the Perth-based senior vice-president of HCL’s ANZ business, says the global IT company has quite a few hundred staff working in New Zealand mainly with the dairy industry. “We have learned a lot on how to improve their productivity and particularly value chain optimisation. There’s a lot of opportunity for us in the IT industry to take these learnings back to India.” He said there had been much discussion at the INZBC summit on Indian agricultural production and a lot of lessons can be taken from the New Zealand dairy industry. Statistics presented at the conference showed that 40% of the agricultural product of India goes to spoil, versus 5% in New Zealand. Availability of refrigeration was one factor. And there was a lot of big data use, data analysis and optimisation that came out of their work with the dairy industry. “We can leverage back into India some of the learnings of our Indian people based here,” Horton said.
“That state level understanding is crucial; that is the unit in which you can actually do business.” He says the new Prime Minister, Narendra Modi, has launched ‘cooperative federalism’ which is pushing more money and responsibility to state level. Many reforms will be
at state level. Entrepreneur Nandan Nilekani also said “don’t get stuck on Dehli. Go to the state governments because they can get a lot of stuff done now. That is the way forward. Do not be obsessed with whether things get done in Dehli or not.”
New Zealand Primary Industries Minister Nathan Guy says India’s dairy industry can grow using Kiwi expertise.
Dairy News AUSTRALIA april 2015
14 // markets
How long will China stay missing AFTER AN encouraging rise, and then fall, in dairy product prices in the first quarter of this year, milk producers and manufacturers are again looking for the upside as planning for next season is either well underway or done for most. The market is still out of balance – available product supply overhangs expected short-term demand from importers, such that exporter stocks of product are relatively high, and according to our numbers, still building. The uncertainty of what lies ahead weighs on dairy product buyers. Why commit to bigger orders now when prices could be cheaper later, and there is already plenty on hand? That’s commodity-trading 101. Why so? The US industry is expected to keep growing. Milk prices might be falling but feed (mostly corn and soybeans) is cheap and in plenty of supply. Europe has meanwhile entered its quota-free era with competitive producers threatening expansion of production at a time when the Eurozone economy – and the affordability of discretionary dairy spending – is getting weaker. With a smaller cheese export market after the ongoing spat with Russia, much of the threatened growth in supply will head into milk powder production. These pressures aren’t new and have been building for some time. So it is the outlook for the demand side of the market that matters most if
fresh agenda
steve spencer the market is to recover quickly. Several things have screwed with global import demand in the past year. The hangover from the crash in prices that started a year ago created an abundance of cheap product, allowing price-sensitive buyers in South East Asia, the Middle East and North Africa to stock up, after being shut out in 2013 by the surge in prices. They are still working through those stocks, and now they aren’t buying as much. But it’s probably the shrinkage of orders from well-stocked Chinese buyers since the middle of last year that has created the greatest worry, especially for the managers of Fonterra’s GDT platform, which is triggered to fall if buyers don’t show up in the virtual trading room. The belief was that China is structurally short and would be forced to keep
buying higher volumes of imported ingredients into the medium term. When will China run low on stocks and come back to the market with some gusto? There are no easy answers to this question. China is one of the least transparent regions in terms of its own production, product mix and retail demand, let alone insight on what stocks they hold. This is a far cry from the nirvana in the US where all of this is gleefully reported to the USDA and published freely. The stock of milk powder in the Chinese industry is driven by significant local powder production from domestic milk supply (which meets about 80% of dairy requirements); powder imports; and consumption growth in a range of
drinks and applications. The only hard data that exists of these three is the volume of imports, because it comes from the governments of countries supplying China. The rest has to be bravely assumed, which we’ve had a crack at. Various in-country studies have been done in recent years to create some anchor points for these variables, sufficient to allow us to create an index of powder stocks over time. To cut a long and technical story short, the stocks barometer shows the Chinese market is still munching and guzzling through a significant stockpile of WMP. This situation is the reverse of that experienced in South East Asia and MENA – China seems to be working
through a mountain of high-priced stocks built when the market was at its peak, which it is probably “shandying” back into its market. Many variables affect this situation. Local milk production is reported to have posted a decent recovery in 2014 (resulting in more local powder), but has been weakened by the recent slump in farmgate milk prices with an oversupply of product. Meanwhile the retail market is a little more sensitive to prices these days, now that the days of double-digit economic growth have passed. The chart (see left) shows our stocks index at the end of February 2015. The estimated “threshold” line is important. It shows China is likely to be currently holding reserves well above a likely threshold for re-entry to the market, and are still building based on early 2015 shipments. Buyers won’t come storming back to the market until those stocks get uncomfortably low again – near or under that threshold – which won’t be until at least the third quarter of this year based on our reckoning. The market will get better – developing world markets are growing faster than production from NZ, EU and US industries can muster. Once stocks are depleted, expect a turn. • Steve Spencer is a director of Freshagenda, a specialist food and agribusiness consulting firm.
Dairy export index loses ground FRESHAGENDA’S AUSTRALIAN dairy export
index finished the first week of April at 176 points, losing 13 points since the end of February, giving up gains that had been made since midFebruary. The index had peaked at 197 in the middle of March before the rally in prices ran out of puff. All commodity spot prices have weakened in the past month, butter and whole milk powder falling hardest. Butter
has lost more than US$500/t since the end of February with the increased availability out of European suppliers. Whole milk powder (WMP) has lost US$700/t, undoing most of the gains since February as the fear of the impact of drought conditions in New Zealand did not materialise and buyers in some price-sensitive zones of the world sat on their hands rather than build on existing stocks. Hard falls on the GDT in the
events in mid March and early April led market sentiment
down. Importantly
for
the
Australian dairy industry, cheddar prices were let off relatively mildly in the market retreat, down US$200/t to the first week of April. The Australian dollar also seems to be testing its lower limits – staying in a tight range between US76c and 78c over the past month but seemingly most sensitive to some patchy economic news out of the US, which is proving that a long, strong economic recovery isn’t here yet. The $A ended the first
week of April at US76.3c The index is a lead indicator of average export returns based on spot prices, currency movements and export mix. The index measures current market sentiment, but in reality it takes 3 to 6 months for prices to translate into actual returns, depending on the timing of contract negotiations. It was set to 100 in January 2000. For weekly updates, follow us on Twitter or visit http:// www.freshagenda.com.au/
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DAIRY NEWS AUSTRALIA APRIL 2015
MARKETS // 15
Will milk production grow in line withExport expanding markets? demand remains stro
Dairy NewS aUSTra
agribusines
Milk production growth by state:
than last season). the national level – with year on year comparisons In particular, Gippsland southern regions slightly speculation and discusFebruary June 2014 andseason New South2011/12 Wales only a few more rapid, andcents/litre the north in March (A sion of late concerning With incremental change in milk production (year-on-year) 2015 % Feb 2015 % Euro cents/litre (AUD weeks from ending, attention is now have seen a strong recovcloser to stable. medium and long-term Queensland -3.7 -5.4 Profit margins are und focused on 2012/13 milk prices as farmery in volumes, making up A third year of ‘good’ scenarios for Australian US, and ers consider strategies for the coming NSW +11.5 +5.4 ground lost over recent margins for most pro- in NZ Fonterr milk production. the final payout for th year. In some domestically-focused years. ducers would continue One of the first ques+7.7 +5.8 Gippsland has been regions, renegotiated contracts incorTasmania’s growth has to shore up finances, but cut from NZ$ tions most international GLOBALimpacT IMPACT gLobaL +2.3 +2.7 Northern Vic to NZ$6.45-$6.55/kg porating lower prices and reduced ‘tier JOHN DROPPERT accelerated and the state also likely generate a furbuyers ask is: Will the JohN DropperT one’ is access areproduce undermining farmer likely to its ther production$5.04). boost industry grow in line with +6.9 -2.1 Western Vic global d confidence and supply stability. For Western Australia has through stimulatingEffectively, more their markets? Or will they fourth record year of milk within the range of 9.5 Vic (all) +5.6 +2.0 rebalancing. Lower p Shifts in private label contracts and promany farmers in export-oriented production out of the pre- seen a recovery in milk of the major farm-level have to consider other to 9.7 billion litres, repslow production grow cessor rationalisation have seen milk a lower to with the assistance flows vious five. price outlook relative investment that has been suppliers to meet their regions, resenting a further 2% SA +5.3 -0.6 companies adjust their intakeonrequirethe current season only adds toofthe favourable seasonal Large areasnot of westless prevalent indemand, recent and as this oc needs? growth the expected WA +6.4 +4.8 mately see a price reco ments pricing to 2014/15 meet the changof doing business, but seems conditions andand many ern Victoria and southeast years. The answer always challenges total. Cautious Tas +11.5 +11.3 to watch farmersing receiving attracSouth Australia havemedium seen term demands of a highly pressured In turn, it would help on the global comes down to market to contradict the positive optimism inretail international tive (in marketplace. many cases multislower intakes this season; send the right signals and climatic factors: profdairy markets, coupled rate attowhich milk pro Lower contract prices and outlook of Asia-driven dairy demand Australia +6.4 +2.8 year) pricing primarily the result of a the broader dairy market. itable margins, facilitatedgrowth. with aopportunimore favourable slows in response to l a lackoffers. of alternative supply Stabilising milk prodifficult spring, indicative though outlook • John Droppert is indus-of the current by favourable seasonal conditions, this Asia and may prove more resilratewith suggest impact those in south-east the Middle flows. 2012 milk production in the USsonal ties present challengesexchange in a market Dairy Australia’s duction in Queensland reasonable summer tryhigher analystecowith Dairy Ausconditions, tend to genertranslate ient4% than despite cost preson consumer confide Eastagain maintain consistently is up around onanticipated. 2011 for the year toshould manufacturingthat capacity. Despite for southern farm gate rainmilk prices – limited a challenge, how-the underlying fall means farmers tralia.support China’s economic grow ate growth. growth atrates that Assuming ‘average’whilst sea- earlyto measured sures, farmgate margins nomic growth April (leap year adjusted), challenges, domespublished in themany recent Dairy 2012:remains Sit- these ever, rains have areand wellOutlook placed toreport, capi- is for The influence of thoseuation tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. How- of the Australian dolla an recent improved situation talise on arange good autumn two factors is evident in opening Demand for expo itathe dairy consumption and a growing finished the March 2012 quota year up ever, the surge in supply has outpaced price of $4.05-$4.40/kg for at least some farmers, break. the 2014/15 season. ucts remains a positi population providing a degree of cer- 2.3% on the previous year. New Zealand demand growth in the market. MS and a full year average price range season After a robust spring betweenContinued This situation has seen the scales tinue to grow with th tainty late beyond the current adjustments. production is widely expected to finish $4.50 andinvest$4.90/kg MS.and Thea modest isIn anticipated. ment interest (even if marketrecovery in many regions, folthe seasons following the 2008 this season up 10% on last year - a huge tip in favour of buyers in dairy mar- large emerging marke report considers the wider picNationally, it iscrisis and subsequent com- market influence given 95% of NZ milk kets, with commodity prices retreat- with changes in diet an many proposals don’t lowed by slower year-on-ture and financial summarises the many factors expected that production reach fruition) coupled year growth through early at play; the key theme of the current sit- modity price recovery, farmers in is exported. Argentina is also enjoy- ing steadily over recent months. Butter urbanisation - and als on’, but growthregions have seen solid ing solid production growth, but a sig- prices are down some 30% from their with global population with resource summer, Australian milkuation export-oriented being that ofavailabilre-balancing inwill the‘hold will slow relative to last suggests strong growth production continues todairyity global supply growth (see chart) - with nificant supply gap in Brazil prevents 2011 peaks, whilst powder prices have the domestic market i supply chain. season in the final potential in these regions track ahead of 2013/14, competitors in the North- much of this additional milk from leav- lost more than 20%. Farm gate prices growing population In regions of Australia focused on higher-costmonths of 2014/15 because the amongst those expand- ing South America. over the medium term – farmers exhibiting a more ‘tradi- producing have subsequently been reduced in capita consumption. ern–Hemisphere drinking milk, many same months last year if the economics can be tional’ seasonal curve to Despite wider economic uncer- most exporting regions. The average market is currently a c face a re-balancing market in the form ing output as their margins increased. were so strong. made to work. However, date. 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 Compared with the the slow start means this After a bumper Feband reduced access to ‘tier one’ supply. ditions have further enhanced milk as importing countries like China and for example, dropped 12% from 32 Euro ance will ultimately re final 2013/14 total of 9.24 season will likely finish ruary (up 6.4% yearbillion litres, Dairy Auscloser to a flat result. on-year), the current The timing of the break tralia’s revised 2014/15 year-to-date growth rate milk production forecast of 2.8% is also higher than is (perhaps unsurprisremains around the 2% Dairy Australia’s May 2014 ingly) a key question in range, but adjusted to a southern regions; a good forecast of around 2% range of 9.40 to 9.45 bilgrowth for the full 2014/15 break could provide significant upside to the cur- lion litres. season. austraLian An initial assessment rent forecastDairY, – especiallyASEAN-Australia-New Growth has been FTA (AANZFTA). rice and wine exporters to Zealand of 2015/16 prospects yields through May and June, largely driven by favour“Protectionist sentiMalaysia are the biggest a similarly steady picwhere a repeat of last seaable seasonal conditions ment over agricultural winners in a free trade ture. Dairy Australia’s inison’s exceptional finish in many areas, coupled goodstial is rife and grow(FTA)considered signed forecast anticipates is otherwise with healthy farmgate agreement ing across the globe, so to provide between the two counaustraLian FooD full-season production unlikely. margins (albeit tighter in this context it is pleas(200-330m tries last month. company Freedom Foods ing Australia has managed tion for be The deal, signed after Group Ltd is to build a to forge an agreement seven years of negotianew milk processing plant ucts. with Malaysia that has The NS tions, allows a liberalised to cash in on growing dealt with some sensiprovide ac licensing arrangement demand in Asia. tive agricultural issues for Australian liquid milk The plant, to be built in sustainabl not effectively covered by exporters and allows southeast Australia, will be source of m AANZFTA,” says Fraser. strong link access for higher value the first Australian greenSealing the deal: Malaysian trade minister Mustapha Mohamed “While under the retail products. fields expansion in UHT in lian dairy i with Australian counterpart Craig Emerson after signing the deal. AANZFTA agreement expand its It guarantees Aus10 years. most of Australian agriwith dairy tralian wine exporters Freedom’s wholly but also through technical Despite the compleers through streamlining culture’s key interests supply of m the best tariff treatment owned subsidiary Pactum The most successful know that Australia will run the or sodairy calledfarmers ‘behind the tion of this agreement, of rules-of-origin dechad tariffs bound at zero, plant will Malaysia gives any counfuturetoproduction and therefore profit is made plant. Some of its products for Austra restrictions.” much remains be done border’ dairy and rice are two sec- laration processes and try. It also allows open or lost at calfto rearing. The Young stock are theon farm’s FTA was signed for Australia’s farmers improved marketing – value-ad access arrangements from tors where incremental will be sold in Australia. future earners. In this special report we focus on May 22 in Kuala Lumpur tap into the full potential arrangements for certain market access improveand expor 2023 for Australian rice The company says the best practice in calf rearing, featuring the by Australia’s Trade and of the Asian region and commodities. ments have been negotiInitiall with all tariffs eliminated given Asian consumlatest in techniques, technology, nutrition and Competiveness MinisThe Malaysian market beyond. animal health. ated under the Malaysian produce 2 by 2026. ers’ rising incomes and terMay Craig27 Emerson and his He says the NFF will is worth about A$1 bilUHT pack The National Farmers’ FTA. improving diets, demand BOOKING DEADLINE: Malaysian counterpart now throw its attention lion in Australia agricul“This trade deal was line capab Federation says the trade there will grow for qualMATERIAL DEADLINE: June 2 Mustapa Mohamed. towards ensuring agricultural exports – including also particularly imporlion L. The deal will improve interity dairy products from PUBLISHED: June 9 Emerson says Australia ture remains front and being its fourth-largest tant for sectors such packaging national market access low-cost production bases CONTACT: CHRIS DINGLE | T: 0417 735 001 E: chris@dairynewsaustralia.com.au will be as well-positioned centre in completed FTAs sugar export market and as dairy that have been less carbo for Australian agricultural such as Australia, whose in the Malaysian market fifth-largest wheat export with South Korea, Japan, facing aGippsland competitive and be mo goods. milk is well regarded. hasdisseen strong growth in milk market. as Malaysia’s closest tradChina and Indonesia as advantage in Malaysia cient than “After seven years of The new plant will production this year. ing partners in ASEAN, With an annual economic immediate priorities. compared with New ZeaUHT facil negotiation, the NFF is allow Pactum to meet “These are all markets and in some cases better. growth at about 5%, land which already has lia and SE under no illusion of how growing demand for The FTA will guarantee Malaysia forms an impor- with enormous growth expects sit challenging it has been to a completed FTA with UHT dairy milk, and add tariff-free entry for 97.6% opportunities and where tant part of the ‘Asian Malaysia in place.” begin in O complete this FTA with to capacity for value-
THERE’S BEEN much
L A I C Malaysia FTA benefits SPEdairy TFreedom Foods plan R O REP targets Asia NEXT ISSUE: JUNE
CALF REARING
DAIRY NEWS AUSTRALIA APRIL 2015
16 // OPINION RUMINATING
EDITORIAL
Big words, little detail
MILKING IT... Get in line, Twiggy
WITH TONGUE firmly in cheek, Queensland Dairyfarmers Organisation president Brian Tessmann revealed he was inspired by mining baron Twiggy Forrest’s call for mining companies to restrict iron ore production. This would of course help boost prices and is, of course, illegal and drew the attention of the consumer watchdog, the ACCC. “If Twiggy and the rest of the fair weather free marketers can convince the ACCC to forget about consumers, then boy the dairy industry could come up with a plan for him,” he chuckled. Brian had a strong word for Twiggy though. “I think if Twiggy is looking for the Australian government to bend the rules or turn a blind eye to his attempts to get his commodity a stronger bargaining position and a better price, then other commodities such as fresh food should also be in the picture. “If action is decided on the amount of time an industry has been disadvantaged and the seniority of the arguments then Mr Forrest should take a number and get in line.”
Some need not apply
MURRAY GOULBURN is seeking an Australianbased creative agency with “on-the-ground expertise” in China to promote its relaunched UHT milk brand. The new Devondale brand has bilingual packaging and MG is searching for an agency to promote it. We wonder whether the agency behind the recent ads for Devondale in Australia will be asked to apply, following MG’s scrape with the Advertising Standards Bureau. The 15-second version of an ad depicting business men and women trying to run a dairy farm received viewer complaints and was found by the Bureau to breach a code of ethics, imply anti-Asian sentiment. The 15-second ad featured a Japanese businessman, while longer versions which featured more corporate men and women were deemed acceptable. Still, we’re guessing MG won’t take that risk in the world’s biggest dairy market.
Who’s running this show?
Rabo torpedo
JOHN FAIRLEY, purveyor of Country Valley branded dairy products and bad dad jokes, was in his element at the Royal Sydney Show this month. John is as comfortable spruiking his products as he is moving around the cow stalls to look at the cows and heifers. He made a particularly telling observation on twitter (where else?) – “Everyone wants to get involved in ag, who is going to farm to support them?” He makes a good point. Agriculture is the backbone of the economy, in large part because of the associate industries. Many bodies, including Dairy Australia, work hard to attract the country’s brightest minds to agriculture. The work on the land itself needs to remain attractive enough to entice the next generation to keep the show running for everyone!
Advertising Chris Dingle chris@dairynewsaustralia.com.au
EXPECTATION IS a powerful force in commodity markets. Show buyers a correction is due and they’ll reduce demand, precipitating the predicted fall. Recently Rabobank released its quarterly dairy report saying “the strength of the recent rally is hard to justify on current fundamentals.” It came out before the first GDT event of the month at which the index dived 8.8%. Rabobank’s global reach and status means most GDT bidders would have read the report. The expectation for a correction was set, and sure enough, the market delivered. Of course, the fundamentals were out there anyway so prices were likely to ease regardless of the report, would they have fallen as sharply? Thanks Rabo: great report; lousy timing.
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ANOTHER MONTH brings another Government announcement designed to grab a headline but without the crucial detail. Last month Federal Environment Minister Greg Hunt and Federal Agriculture Minister Barnaby Joyce announced the Government will enact the 1500GL cap on water buybacks in the Murray-Darling Basin. It’s the same commitment Prime Minister Tony Abbot made in 2012 – and several times since. It’s a worthy pledge as it means irrigators in the Basin – and this includes 2000 dairy farms – know no more water will be bought from them to be returned to environmental flows. It also means the Government is doing the right thing by communities, investing in infrastructure and supporting agriculture, which supports the economy. However, there was no commitment on when it would table the legislation. It turned it back on the opposition, saying they had to agree to ensure bipartisan support. We may be called cynical when we say the Government has not been shy in pushing through legislation in the past. To be fair, perhaps it has now learnt from this bludgeoning approach. We could also be called cynical when we say this commitment to the cap comes after disquiet from the irrigation community when the government opened a rolling tender to buy water in the Murray and Murrumbidgee catchments of New South Wales. It will close this month. With the Government’s history of broken promises, legislation would put many at ease. It’s not the first time the Government has made a major announcement designed to grab headlines with little substance beneath. It was earlier this year the PM, with Mr Joyce by his side, said the threshold for Foreign Investment Review Board (FIRB) scrutiny of agricultural land would be lowered from $252million to $15m. He said the Government would also soon implement a register of foreign owned land, but would not say when. There was no mention of reviewing foreign investment in infrastructure, agricultural supply chains or, perhaps most importantly, water. Again, it was little more than a media opportunity over substance. Australian businesses need certainty and leadership to plan ahead and have not received it since John Howard was voted out of office. Confidence continues to erode and brash statements designed to garner a few positive headlines won’t help.
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DAIRY NEWS AUSTRALIA APRIL 2015
OPINION // 17
Lifting the lid on Farmers Own milk brand has been triTHE LAUNCH last alled by Woolworths month by Woolworths for some time in NSW Supermarkets of their with milk sourced “Farmers Own” brand of from a small number milk, which is of course of mid-north coast owned by Woolworths, dairy farmers around was heavy with rhetoric the Manning Valley. about being better for In reality what the farmer and cutting this model does is out the middleman. not leave out the proThat middleman cessor but instead the referred to, I assume, is OPINION supermarket does the supposed to be the milk BRIAN TESSMANN dealing on price and processor who is usually supply conditions the purchaser of the milk with the farmers and does a separate directly from the dairy farmers. In this process the milk then, after deal with the processor, in this case Parprocesses such as pasteurisation, is malat, and others in the supply chain to sold either to or through retail outlets transport and process the milk and get ranging from local service stations to the milk through the supply chain from large supermarkets and from there to the dairy to the supermarkets stores. Much of the publicity on the launch the consumer. As I understand it the ‘Farmers Own’ in Queensland of the ‘Farmers Own’ brand milk is still picked up by a tanker brand was about it being a better deal and taken to the processor (in this case for the farmer. I assume it is claiming Parmalat) for processing and then deliv- that the two Sunshine Coast farmers ered to the retailer, in this case Wool- who are apparently supplying the milk worths, which is pretty much the same are getting a better deal than the averprocess as for every other litre of milk age Queensland dairy farmer’s returns. What is not clear to me is how and produced in this state. This model and the ‘Farmers Own’ whether it will have any benefit for the
other 450 dairy farmers in the state. While no one begrudges the two farmers concerned from getting a better deal, explained as a ‘sustainable price’, for their milk if they can, and we wish them well for the future with the new arrangement, the spin put out in the launch publicity that it was good for the industry is much more unclear to me. In fact I am also still struggling to see any real identifiable benefit for the wider farm population from the trial of the brand in NSW which has been operating there for some time. At a time when major retailers are
trying to convince the powers that be in Canberra that they can be trusted with a voluntary code, you could be forgiven yet again for questioning whether they are pushing
the spin too far. The deals that have been done in other states have been launched with much fanfare, but the market share achievement claims have not been verified compared with the sales of the unsustainably priced retail branded milk. Over the past four years since Coles started the supermarket milk price war by launching the $1 milk campaign, QDO and I am sure many other groups have been approached by various organisations trying to develop a brand of milk that would have the support of dairy farmers and/or the QDO or another dairy group. While the QDO is always ready to listen to ideas, the key criteria for us is, whether it will improve the farmgate price for most if not all dairy farmers in Queensland. Up to this time we have not been able to identify such a scheme which will gain the required support from key stakeholders. • Brian Tessmann is president of the Queensland Dairyfarmers’ Organisation.
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Dairy News AUSTRALIA april 2015
18 // management
Beau, Ruth, Ian and River McGregor.
WA season requires precision management Stephen Cooke
WA DAIRY farmers Ruth
and Ian McGregor can only rely on pasture for five months of the season on their Chapman Hill farm, near Busselton, so each blade grown must be maximised. The precision displayed when estimating feed budgets is also applied to all aspects of the family operation, including mastitis prevention and heat detection. The couple milks 300 Holsteins on a 132ha effective milking platform, with a further 140ha leased runoff block. The first-generation farmers have been on this farm for eight years. With fresh pasture available for 5-6 months of the year, the McGregors have fine-tuned their feed budget to ensure their herd’s milk supply is consistent. “Milk in the vat is the ultimate goal. You have to maximise milk in the vat every single day, and that requires appropriate feed reserves,” Ruth said. The break has always arrived on their farm but an early arrival or a late finish can provide an extra 3-4 weeks grazing, which makes a significant difference in production and expenditure. The McGregors aim for 1050kg/milk solids per hectare from their effec-
Who:
Ruth and Ian McGregor Where:
The stark contrast between spring and summer in WA.
Chapman Hill via Busselton What:
Precision management
tive milking platform, or about 600kg/MS per cow. In a good year, this can lift to 1100kg/MS ha, and in a poor year this can drop to 1000kg/MS ha. Cows are fed homemade silage, with some purchased hay and grain, from December until at least the end of May. Depending on the timing of the break, they will start grazing anywhere from June 1 to the third week of June. The McGregors produce all their own silage from their dairy platform and their run-off block. Some hay is purchased and used in winter with fresh pasture. A feed budget is produced in November when pastures are finishing off to ascertain how much grain must be purchased each month and in what type, to balance available feeds for the coming year. Cows are fed 2.7-3 tonnes of grain each year,
a “pretty standard” ration of 65%-70% wheat/barley, 11% canola meal and lupins. Ian has built up a good relationship with a local feed supplier and submits his order in good time. “If the growers know in advance, they can hold it back, or decide otherwise.” They produce all their own silage and would ideally like to produce 100t more than they do to feed to young stock, but in the trade-off between quality and bulk, quality is always retained. “It’s always a really tight period at the end of the season. We’re desperate for cows to get on grass, and there’s always uncertainty with the break. “There is a transition period when grass comes in of four to six weeks and it would be good to transition with silage rather than hay, but it’s hard to do.” In producing their own round bale silage,
the McGregors are always reviewing latest ryegrass varieties. They have increased their use of inoculant and use shorter chop lengths to improve silage preservation. All silage is tested through feed labs and they aim for a minimum of 10ME. The McGregors have noticed a variation in results from different feed laboratories – and they’re not alone – and advised farmers to be wary when having their own feed tested. Their simple feed-out system, placing the round bales on the ground, belies the precision in estimating how much is laid out. The WA Department of Agriculture has measured their waste at 2% the average for WA was 2.5%. Their attention to detail ensures the correct amount is distributed each day. “We monitor the vat every day and the ration every week, and reassess it and tweak it if need be. If
your feed budget is right, and you feed good quality silage, there should be minimal waste. “We’re measuring this stuff all the time – how heavy the bales are, the feed results, calibrating feed, calibrating rations at the mill – to maximise the efficiencies of feed that’s available.” They use the program Rumin8 to assist them and say it’s invaluable. “You get good at measuring, good at recording,” Ruth said. “Frank Tyndall from Maffra gives me the discipline to record what’s been fed to the herd every 10 days. He prepares graphs and if they show a sudden jolt, I’m doing something wrong and I need to make some adjustments – fast!” Ruth said this process enables them to do the best with what they have. The McGregors sow later-maturing annual pastures in their dryland system, including some Italian varieties, over-sow-
ing as much as they can. About one-quarter is renovated each year, depending on the budget. Leaf emergence rates vary year to year, and can also vary across the season – with variations of between 8 and 15 days to leaf. “I aim to be 2 1/2 to 3 leaf, early in season closer to 3, later in season 2 1/2. “The ideal is to have cows in 2.8 to 2.9 so we monitor leaf emergence rate closely. “We prepare a pasture budget at the beginning of the week, which shows which paddock is to be grazed and for how long. We need to get it right every time. “Grass is huge for us – with such a short grazing season, you have to nail it,” Ruth said. “The trick is getting it absolutely right every day of the year. That’s what maximises the vat every day.” Calving Although they would prefer to calve twice a year, the McGregors calve
in three batches because of some declined success with fertility. The main calving is in autumn for about nine weeks – usually from March 1 to May 15; with a second calving last five weeks from last week of August to September 30; and the third calving running four weeks from December 10 through to January. Ruth said the three calvings have evolved but it has proved beneficial as WA processors want a flat milk supply. “We would get to the point where we would have 50 cows in the herd not in calf at the end of spring mating, so we’d have to have another go. “It requires a bit more effort and is less labour efficient, but it’s nice for cash flow.” Breeding Management The McGregors made a subtle but effective change to their heat detection practices 12 months ago. “We have spent more to page 19
DAIRY NEWS AUSTRALIA APRIL 2015
MANAGEMENT // 19
Nitrogen levels fall the longer effluent is stored THE FRESHER the better, accord- nitrogen loss in storage is more imporing to new research which shows avail- tant than losses on application to the able nitrogen from farm dairy effluent land,” says Mr Stafford. “However, losses from surfacediminishes the longer the effluent is applied fresh manure were much stored. The study was done in New Zea- higher, in a range of 11-19% with the land’s Waikato by AgResearch for Bal- highest losses in spring and lowest in summer, due to the nitrogen being lance Agri-Nutrients. It shows that timing and technique retained near the soil surface for can increase the amount of nitro- longer. Farmers can work around this gen available to support plant growth by cultivating the manure into the soil when farm dairy effluent and manure as part of annual cropping fertility are used as nutrient sources. This is management. This will reduce these said to have confirmed earlier find- losses and ensure more nitrogen can ings that the longer effluent is stored, be taken up by plants.” Mr Stafford said animal waste like the greater the nitrogen loss that can manure and farm dairy effluent is a advantage of bringing pond levels occur in storage. Ballance science manager Aaron valuable source of nutrients, and farm- down, especially closer to winter when irrigation to land can be Stafford says that in one trial, stalled by wet conditions. The farm dairy effluent stored for In one trial, farm dairy effluent the pond level coming 81 days lost 61% of its nitrogen stored for 81 days lost 61% of its lower into winter, the better the content, primarily via ammonitrogen content. safety net is for farmers [seeknia volatilisation. ing to stay] within resource “Ammonia losses following application of effluent tend to be ers should be looking to maximise the consent requirements.” Mr Stafford said all effluent is a relatively low, typically less than 3%, value from this resource. “It also makes sense to get the efflu- valuable resource for delivering nutribecause the liquid nature of the product enables the nitrogen to move ent out of storage and onto the ground ents cheaply, although older effluent quickly into the soil which offers pro- as soon as possible. Apart from the may mean different response rates. “In total, plants respond similarly tection from ammonia loss. This sug- higher nitrogen benefit delivered by gests that for effluent, preventing fresher effluent, there is the added to nitrogen regardless of whether
Nitrogen from effluent diminishes the longer the effluent is stored.
it is applied in fertiliser or effluent, although response patterns may be different due to differences in immediate availability. Minimising the loss of nitrogen from effluent and manure enables the full nutrient value of these resources to be realised.” But Mr Stafford said as dairy farms shift to bigger effluent storage ponds and with the increased use of herd shelters and standoff pads to protect the environment, finding ways to minimise ammonia loss from effluent, in storage and upon application, will bring more benefits to farmers by retaining more
of the nutrient value of the effluent. “For example, our study showed there is some promise in reducing ammonia losses from farm dairy effluent in storage by making the naturally alkaline effluent slightly acidic. This is worth further research to determine how practically this can be done. Our own work shows a single dose of acid is not sufficient and that light regular dosing may be the answer.” Mr Stafford said improving recycling and utilisation of nutrients within farms should be a long term focus for the industry.
WA season requires precision management FROM PAGE 18
time in the last 12 months on heat detection,” Ian said. “It comes back to hours spent with cows. All aids are good, but you can’t beat time spent with cows.” The McGregors and their staff now spend 10 minutes in the morning and a further 10 minutes at
night observing cows. “We made observation a specific job, rather than just checking for heat on top of other jobs. It means you concentrate a bit more.” More cows are now being presented for AI in a timely manner and the submission and conception rates have both improved as a result.
They now have threeweek submission rates better than 90%, and an average conception rate of 42% for everything mated. The conception rate has improved from 27% from staff and 35% from Ian. Mastitis The McGregors conduct comprehensive staff training around mastitis. Ruth said 90% of WA
would have bulk milk cell counts (BMCC) less than 250,000, but the McGregors aim to keep their BMCC under 150,000 throughout the year to remain in their processor’s Grade 1 band. They regularly feature in the Dairy Australia Milk Quality Awards for top 5% in the country, and have also been placed in the top
100 in the country. “You can’t affort to sit on your laurels with mastitis,” Ruth said. “It’s a moving target, it’s multifactorial, so you have to be across so many things.” Staff training focuses on early detection, spray technique and mastitis indicators in the dairy, with incentives for staff to keep BMCC low.
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“There is a lot of inhouse training, procedures and systems in place, and we work closely with staff until we’re confident they fully understand.” Ruth said 50% of mastitis control involves a good spray technique. The highest infection rates on the farm occur around calving so cows are dried off routinely with both Dry Cow
and Teatseal; calving paddocks are kept clean; cows are moved regularly; herd testing is conducted; and sub-clinical milk is fed to calves. A mastitis focus report is issued twice a year and this is constantly reviewed by the team. “It’s not like we can’t see periods where bulk milk cell counts can rise,” Ruth said.
DAIRY NEWS AUSTRALIA APRIL 2015
20 // MANAGEMENT
Applying lessons from a LIZ RYMILL
AUSSIE DAIRY
farmers have long been interested in the practices employed by their neighbours across the ditch. But dairy farming in New Zealand is not without its challenges, and Kiwi couple John and Karen Hunt believe the strengths of New Zealand’s low input, pasture-based dairy farming practices can be harnessed and put to work in South Australia’s lower south-east. “There are a lot of similarities between the lower south-east and New Zealand,” Mr Hunt said. “The climate is similar, rainfall is comparatively high compared to other dairying regions and importantly, the region – particularly around Mount Gambier - can really grow grass. “Additionally, it has the advantage of allowing you to know with a high degree of confidence, what you’re going to grow in any given year, thanks to its irrigation capacity.” The Hunts were sharemilkers from age 21 to 35 on New Zealand’s mid North Island. “When we first started out, a herd of 180-200 cows was profitable and the goal of farm ownership seemed achievable, but the goal posts quickly changed as land prices began to climb radically about 20 years
WHO:
John and Karen Hunt WHERE:
Allendale WHAT:
Changing farm practice
ago,” Mr Hunt said. At their peak, land prices in parts of New Zealand’s dairying regions hit $50,000 - $60,000 per hectare and cow prices around $2000 to $2500, “so to get into your first farm you needed a lot of equity”. Demand drove price increases for land across NZ and farmers embarked on buying neighbouring properties. Mr Hunt said rising land values often meant farmers weren’t able to pay principal components of loans so instead made their money out of equity growth. They made the decision to exit farming and worked instead for the following five years in allied agricultural industries. “After working offfarm until we were in our early 40s, we came to the realisation that we really did want to be farming so we travelled to the South Island looking for opportunities.” The couple worked closely with, and managed
a farm for, Chris Procter in the South Island before taking up an opportunity to travel to Mount Gambier, in South Australia’s lower southeast for a farm inspection and potential equity partnership arrangement. Mr Procter had previously earmarked the region for its capacity to replicate New Zealand dairying practices, with added benefits of irrigation and lower land prices. Opportunity knocked for the Hunts in the form of a dairy investment partnership with the Nixon, McKellar and Procter Families, shortly after the Hunt’s decision to re-enter dairy farming. “From there, it took only about three months from inspecting Oamaru Farm, south of Mount Gambier, to becoming operations managers in the farm business before committing to an equity partnership agreement in 2010.” The couple spent three years at the farm converting it from a previously high-input system typical of many farms in the region, to a grass-based, low-input, seasonal production system as was the style in New Zealand. The conversion focused on an intensive re-pasturing and fertiliser program which saw the couple milking 450head cows for an annual milk production of 198,000 milk solids – and
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Irrigation is a crucial element of Karen and John Hunt’s plan to boost production to 2000kg/MS per hectare.
climbing. Cows were fed between 300-700kg grain/ cow using 220kg/250 units nitrogen/ha/year depending on grass growth and demand on the grass-based system. It’s been seven years since the Hunts began their Australian dairy farming career. They have John Hunt on his Allendale farm.
since moved on from Oamaru to become equity partners at Lancaster, Allendale East, as well as co-investing in Fern Leaf Dairy, with Mr Hunt’s brother Greg and sisterin-law Lisa Hunt. The farms run separately, with the couple’s son Daniel taking primary interest
in the 240-cow herd at Fern Leaf, with Mr Hunt overseeing the operation. The Hunts focus on milk solids. “We get paid on milk solids so that’s exactly what we chase – it’s very much the same focus as New Zealand.” The family aim to grow their overall business from the first
year production levels of 1550kg/ms/ha past the current level of 1800kg/ ms/ha to 2000 kg/ms/ ha in the next couple of years. They will do this through improved pasture and fertiliser programs under irrigation, and herd improvement. Lancaster Dairy runs a 550-head cross-bred Jersey herd and has been the focus of the couple’s pursuit to combine the best of New Zealand and Australian dairy farming practices, since its purchase four years ago. “We’ve carried the New Zealand philosophies over to the south-east of SA and they’ve worked well. We have stringent, proven guidelines and we don’t deviate too much – but first and foremost, we don’t try to convince anyone that our way is better,” Mr Hunt said. “And we’ve probably got a name ‘round here as ‘crazy Kiwis’ because we do things quite a bit differently. However, I’m always keen to explain to other farmers what we are doing, why we are doing it and the results we are achieving– then it’s up to them to decide if there’s anything to be learned from a system like ours. “Run conscientiously, low input systems average out to be consistently more profitable than the alternative. “While it’s hard not to get drawn into the high input method and the seemingly big profits on offer in an ‘out-of-the-box
Dairy NewS AUSTRALIA april 2015
management // 21
m across the ditch year’, we only need recall some of the bad seasons and it’s those systems that ultimately suffer the most. “We have found that low input farming earns its value in below years, due to the innate flexibility within the system, particularly around grain inputs and seasonal irrigation options. “We have a range of 350-700kg of inputs depending on the season and market opportunities so grain is used mainly to fill the gaps. “Ours is a system that allows us to cut back when we need to, or ramp up if growth rates are slower or the market favours it.” The duo undertake weekly whole-of-farm walks where they can monitor aspects such as grass growth making sure it meets the demand of their herd throughout the seasons. “We let the cows tell us when we’re right and when we’re wrong,” Mrs Hunt said. Since moving to Lancaster, the family has undertaken a plan to methodically and consistently implement practices consistent with their goal of a low input operation, including improving existing pasture species and engaging in an annual re-pasturing and fertiliser program (that sees the couple aim to re-grass 15% of the farm/year), farm mapping and water monitoring.
Operating the pasture- with a production aim based system in Allendale of 1kg milk solids to 1kg liveweight. “ East, Mr Hunt finds he The Hunts run a oncecan grow 20 tonnes of dry a-year mating over a matter under irrigation and between 7-9 tonne on 12-week period with an August 5 calving date; dry land, depending on six week AI - six weeks the year. bulls, “and we will get The Hunts focus that down to only having on Diploid/Tetraploid bulls in for four weeks perennial ryegrass with and once-a-year calving, plenty of clover cover. compared to the high “But it’s important to input, often 3-4 time-amonitor the season and year calving operations ensure plants are not typical of the region”. stressed and behind in Their aim is no higher production before the than 7% empty rates. irrigation season starts. “The cross-breds “Matching irrigation just so happen to be with good grazing our favourite cows, management is a very notwithstanding the fact important part of our that they’re excellent business – indeed when Karen and John Hunt say the equity converters of grass to partnership model has been very you come from New beneficial for them. milk, they’re hardy and Zealand where farms are their feet are strong - so worth $50,000 - $60,000 business approach. we have little trouble with feed budgeting tools per hectare, you have an “We like to know integrated into the dayin-built desire to get every lameness or other health where we’re sitting and to-day running of the problems – and they get blade of grass off that where we’re going as it operation, which is in calf well. farm and every patch of accessible and up-to-date allows us to proactively “We’re strict about dirt working for you; you make decisions. for the partners and the culling and now with want it doing something Keeping – there is no a close eye wastage at all on their and we carry “When you come from New Zealand where operation and that approach farms are worth $50,000 - $60,000 per “controlling here in South things that hectare, you have an in-built desire to get Australia,” he are within our explains. every blade of grass off that farm and every control” is On patch of dirt working for you.” crucial. the cow Utilising side of the contractors – operation, rather than investing in accountants at any time, plenty of AI bred the Hunts aim to match depreciating machinery to keep them in the loop replacements we can cull their animals to the – has also been a strategy on all traits. Additionally, and to ensure all goals grass-based, low input for the Hunts to manage and objectives are on they produce good milk system and the natural cost control during an era track. solid figures and we characteristics of the of rapidly rising cost-of“We can’t control utilise all LIC semen from land; undulating shallow NZ as bulls are proven on things like milk price soil over limestone. or the seasons, but we our farming system.” “We have found that Business management can control pretty much the type of cow best everything from the farm is another key focus suited to our system is a gate in – and that’s an for the business, with 480-500 kilogram animal important part of our on-line cash flow and stocked at 4.3 head/ha
equity partnerships a good step to farm ownership JOHN HUNT believes the equity partnership model, such as the one he and wife, Karen, are engaged in, can lead to sustainable farming careers and returns – and is another advantage of his operation. While still not common in Australia, he notes that equity partnerships have proven their value abroad and had “most of the wrinkles ironed out of them now”. “The advantages of such an arrangement include the fact that you can get in with virtually any amount of capital – it could be as little as 2%. “In our experience, they’re a win–win arrangement as the investor knows that the equity partner has a vested interest in the operation
and is less likely to up and leave, or perform to a substandard level. “The farmer is rewarded in the knowledge that their work is earning them a real share in the business. “We still need to meet Key Performance Indicators and run a productive and profitable operation, however we’ve certainly experienced that an equity partnership can be a great way to transition to farm ownership.” Mr Hunt said a key factor for anyone considering entering into an equity partnership is to “have an exit plan in case you want to move on” and ensure the partnership is built on mutual trust and aligned dairying philosophies, as well as finding partners with different strengths.
production, and on-farm labour makes up an important, but small, part of the overall operation. “We currently have one employed full time staff member on each farm, and casuals to fill the balance throughout the season, all of whom are a great asset to our business,” Mrs Hunt said. “But while we’re not a large employer, we do aim to be an employer of choice in the region – so we try to offer traineeships and education opportunities to staff so that they, too, can move up the ladder in dairy and pursue careers in the industry.
“We like to ensure too, that where possible, all our workers are home by 5.30/6pm in the evenings and 8.30am in the mornings, so that they can have a good work-life balance.” The couple say they are “learning all the time.” “We have learned a lot from Australian dairy farming practices and enjoy the challenges and benefits from combining these with the New Zealand approach. “While we certainly make mistakes along the way, we’re seeing our cows and our land improve year-on-year, and that’s a great feeling.”
DAIRY NEWS AUSTRALIA APRIL 2015
22 // BREEDING MANAGEMENT
A new era for sexed semen EE CHENG OOI
SEXED SEMEN technology has improved more in the last eight months than over the last decade. To give some idea of how rapidly the situation has changed: in 1995, sperm was processed at 200 to 400 cells per second, with an 83% chance of producing a female and a conception rate that was 70% of conventional. By 2012, this had improved to 5000 cells per second, with 85% purity and 80% fertility of conventional semen. Now, in late 2014, sperm is being processed at 18,000 to 20,000 cells per second with 93% purity and a conception rate potentially approaching 97-100% cent of conventional semen – an
enormous jump in quality which is constantly improving. And so, the case for sexed semen which has previously come into question due to inconsistency with results and poorer conception rates, is rapidly strengthening as the technology catches up with demand. A recent article I prepared on sexed semen covered advances in fresh sexed semen, and focused on two large-scale research trials that took place in New Zealand and Ireland. Results were contradictory, with the Irish trial concluding that fresh sexed semen had no advantages over frozen (and was actually inferior in cows with 76% of conventional conception rate compared to 85% with frozen), and the New Zea-
land trial claiming the opposite (producing conception rates that were 94% of conventional). While no controlled fresh sexed semen trial has yet been undertaken in Australia, anecdotally farmers have been reporting good results. Several groups have been collecting data on farms using the technology and Dr Jon Kelly from the Warrnambool Veterinary Clinic, had the following results as of early November this year: ■ From 852 heifers on six farms over nine joinings, using five different sires: an average 55% heifer conception rate (ranging from 44% to 69%). ■ From 293 cows on four farms, using two different sires: an average 37% cow conception rate (ranging from 30%
to 45%). The number of animals involved and the absence of a common protocol means that caution should be used when interpreting these results. However, the preliminary numbers indicate that it is possible to obtain very good results using fresh sexed semen, particularly in heifers. The improvement in conception rates is likely to be due to a reduction in the ‘bull effect’ that is seen in frozen sexed semen, where some bulls’ semen copes poorly with the sexing process at an unpredictable rate. Separately to fresh sexed semen, there have also been several changes to the overall sexed semen manufacturing process that affects both fresh and frozen sexed semen. This has resulted in a
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meaning that any sexed semen produced within the last six months or so has been processed under the SexedULTRA banner and should have benefited from these upgrades. Again, like fresh sexed semen, hard data from controlled trials is not available. The best information we have comes from data collected by groups and individuals. Dr Jon Kelly, Warrnambool Veterinary Clinic, has announced the following results: ■ From 77 heifer matings on two farms, using two sires: an average 57% heifer conception rate (ranging from 48% to 63%). ■ From 110 cows on two farms, using two sires: an average 46% cow conception rate (ranging from 25% to 55%). These field trials indicate that sexed semen may be a viable option for more farms – particularly
those who have wanted to use the technology in the past but found the lowered conception rate their biggest barrier to entry. For those who have used sexed semen before 2014 and found it wanting, now could be a good time to re-visit the technology as both our knowledge of how to use it and the maturity of the technology have improved. As usual, for those who are considering the use of this new variety of sexed semen, the following recommendations apply: ■ For heifers, only use it if they’re well-grown and cycling at joining, make calving ease a high priority (or use sexed Jersey semen for peace of mind), be on top of your heat detection game (or use a fixedtime synchrony program), and make sure that best-practice AI techniques are used. TO PAGE 23
A2/A2
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new line of sexed semen, known as ‘SexedULTRA’ which is appearing in both beef and dairy industries all over the world. The first change is to the semen extender used. Extenders (or diluents) are liquids added to the semen in order to protect and nourish the sperm after collection (the exact change is proprietary and has not been specified by the company). The second and third changes are to the sorting process, protecting the sperm cell membranes, and reducing the time required to sort the ejaculate. The new generation machines sort a collection in just over an hour rather than the usual six or more hours, which should improve availability of the product. These improvements were made to the four sorting machines at Glenormiston earlier this year,
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DAIRY NEWS AUSTRALIA APRIL 2015
BREEDING MANAGEMENT // 23
Genetics Australia to export to NZ GENETICS AUSTRALIA will export Australian genet-
ics to New Zealand. The Australian co-op has formed a partnership with New Zealand genetics company Genetic Enterprises (GE), which will act as the distributor. The alliance gives access to leading Australian dairy sires and reverses the trend of Australia importing dairy genetics from New Zealand, says Genetics Australia’s export manager, Rob Derksen. “This is an opportunity for New Zealand dairy farmers, particularly those interested in introducing genetics tried and tested in an environment that relies on a grazing diet, but able also respond to feed supplement when challenged,” says Derksen. “New Zealand genetics have been available in Australia for several years and it is apparent that dairying is changing in New Zealand and we feel the time is right to offer New Zealand farmers some top Australian genetics.” Mr Derksen said Australian developed genetics were ideal to satisfy the growing global demand for dairy genetics capable of producing a medium size, functional cow suitable for long term, efficient milk production. “Genetics Australia has focused on the ‘Australian cow’ for 50 years under diverse and often harsh dairy conditions and it is not surprising that Australian proven bulls dominate the local Australian top bull lists.” Genetic Enterprises managing director Allen Donald said he was keen to include the best Australian genetics in their product range. Genetics Australia bulls will feature in the 2015 semen catalogue, available now. “There will be a lot of interest in the Australian Holstein and Jersey, particularly from farmers wanting a strong, functional cow able to push milk yields. And the Aussie Red breed offers an option for cross breeding. “The Aussie Red was developed 30 years ago by blending the strengths of Scandinavian genetics over the Australian Illawarra Shorthorn.
A new era for sexed semen FROM PAGE 22
For mature cows, ensure you pick only the most fertile individuals – anything that has been induced, experienced past problems with uterine infections or calving, or has proven difficult to impregnate in the past should be excluded from the program. New software known as the Sexed Semen Selector has been incorporated into some herd recording programs ■
which can assist with the decision-making process – it may be worth investigating this further with your herd software provider. • Ee Cheng Ooi is a member of the Dairy Services team with the Victorian Department of Economic Development, Jobs, Transport and Resources. Phone (03) 5833 5916. This article was first published in the March issue of How Now Gippy Cow and has been reprinted with permission.
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“This Aussie Red breed is ideal for cross breeding farmers to use in a three-way cross breeding strategy with Holstein and Jersey that blends the strength of all three breeds and maximises heterosis,” he says. “The alliance between Genetics Australia and Genetic Enterprises will also provide an opportunity to identify high young Australian bulls suited to grazing, based on their genomic profiles.”
Raceway is a former Australian Number 1 genomic Jersey expected to rank high when the April 2015 ABVs are released.
DAIRY NEWS AUSTRALIA APRIL 2015
24 // ANIMAL HEALTH
Dystocia costs dairy industry $44m DYSTOCIA, OR difficulty in giving birth, is a common problem encountered in dairy herds. Dystocia can result in reproductive problems such as retained foetal membranes, uterine infections and increased calving intervals, which subsequently contribute to poor herd performance. The long-term impact
GEMMA CHUCK on calves born to dams suffering dystocia has been shown by research in
the United States. Calves with an assisted birth had decreased milk production later in life compared to those born with a normal, unassisted delivery. Why does dystocia happen? There are numerous reason for dystocia, the most common being: The calf is too big and /or the dam is too small
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Calves can be presented in many ways at birth. The various presentations, positions and postures mean that safe delivery of the calf can be very challenging.
This is due to a small or disproportionate pelvic area (birth canal). It occurs more commonly in heifers and is often related to inadequate nutrition during the pre-pubertal and postpubertal phases of growth. Heifers should be managed appropriately so that they calve at about 85% of their mature body weight with a body condition of 4.5-5.5 (1-8 scale). Appropriate sire selection using Australian Breeding Values (ABVs) or calving ease bulls will help minimise over-sized calves in heifers. Excessive body condition score Over-conditioned heifers and cows are at an increased risk of dystocia as fat deposited around the birth canal reduces the space within the pelvis. Animals calving in body condition score >5.5 (1–8 scale) are at an increased
risk of dystocia. Torsion of the uterus (twisted uterus) This is often associated with oversized calves. There may be from 180° to 720° twist at the level of the vagina, which prevents foetal fluids and membranes from passing through the vagina and vulva. Consequently stage 1 labour will appear prolonged with no progression to stage 2. If left undetected the cow can become sick over several days due to metritis as a result of the death of the calf. A distinct ‘corkscrew’ effect in the vagina can be felt which may be clockwise or anticlockwise. Prompt veterinary attention is required to untwist the uterus and enable delivery of the calf. Sometimes a caesarean section is required if the twist is greater than 360°.
Weak or absent uterine contractions This can happen in instances of milk fever (hypocalcaemia). Calcium is required for the contraction of muscles within the body, including the uterus. Uterine muscle contractions are essential for the calf to be delivered normally. Cows may show other signs of hypocalcaemia such as inability to stand and bloat. The cow cannot progress from stage 1 labour even though the cervix may be fully dilated. The prolonged birth often results in a dead calf. Prompt treatment for milk fever is required and, if the calf is alive and there are no other reasons for dystocia, a natural delivery may follow. Abnormal delivery position of the foetus The normal delivery position of a calf just prior to delivery is shown in the
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diagram. The front feet should be presented first, followed by the head and neck, shoulders, hips and hind legs. The calf should be orientated with its spine upwards at all times. A malpresentation refers to when the calf is coming hind legs first. A malposture refers to when the head and legs of the calf are situated in abnormal positions relative to the ‘normal’ delivery position (for example head flexed to the side); and a malposition refers to the position of the calf relative to the dam, for example it is upside down or on its side. Difficult deliveries can be a combination of these and can be very challenging to resolve. It is difficult to estimate how much dystocia costs the Australian dairy industry. Some reports suggest an annual cost of $44 million. Fertility is a major contributor to this, along with cow losses, labour and veterinary costs. No more than 3% of adult dairy cows and 6% of heifers should require assistance at calving. Accurate calving records allow on-farm monitoring of these events. Veterinary advice should be sought if the level of dystocia is higher than this. • Dr Gemma Chuck is a dairy vet working at The Vet Group in south west Victoria. She has a special interest in calf rearing and is currently undertaking her PhD in this area at The University of Melbourne
DAIRY NEWS AUSTRALIA APRIL 2015
ANIMAL HEALTH // 25
Take care shifting cows from pasture to brassicas FARMERS ARE being urged to exercise caution when transitioning cows from pasture to brassicas and fodder beet. DairyNZ’s Southland regional leader Richard Kyte says the key message for farmers is “be cautious when transitioning cows on to brassicas and fodder beet”. “When allocating swede crops, we’re advising farmers to be cautious if they see the plant showing signs of developing flowerhead, which increases GSL content, or if leaf regrowth is occurring.” His comments come as DairyNZ moves a step closer to solving the toxic swedes issue that rocked Southland dairy farmers last year. About 200 cows died and others became ill after eating Swedes, a common winter feed crop in Southland. As part of its study into the mysterious deaths, DairyNZ interviewed 134 affected and unaffected farmers and 34 graziers. This followed a short survey of all dairy farmers that generated about 400 replies. Analysis of all the survey data is nearly complete, says DairyNZ. Results will be available next month. Kyte says it interviewed farmers across the region to learn whether farm management practices may have contributed to the problem. “We had delays in getting the data from the field as farmers got busy just as we started approaching them for information. “Until all this analysis is complete, we won’t
know if we need to gather more background information. We are expecting to have the results of all this work released to farmers from mid to late May.” DairyNZ has already released the results of its analysis of the blood and autopsy samples it collected from dairy cows. Those findings indicated that the cows experienced liver damage consistent with known liver damage associated with grazing brassica forage crops – except the visible signs of illness seemed more severe. Meanwhile, the analysis of plant material samples taken from Southland swede crops last year as part of the DairyNZ study is taking longer than expected because of delays in getting the necessary testing equipment from overseas. “The testing of the plant samples has proved a challenge for us. “This has never been done before in New Zealand so we’ve had to organise an accredited commercial testing facility for glucosinolates (GSLs) – the compounds we are testing for in the swedes,” says Kyte. “We needed the most up-to-date technology to… identify the issues with these swedes. The testing has to stand up to our high standards for scientific rigour. ‘We have identified 27 GSLs that could have contributed to the issues with the swedes and we had to develop benchmarks to enable us to measure them correctly. We also needed the right equipment in place.
WARNING SIGNS IN COWS ❱❱ Weight loss and ill-thrift. ❱❱ Down-cows who are unresponsive to normal metabolic intervention. ❱❱ Photosensitivity. Signs of this include cows seeking shade, reddening of the udder and skin damage to white skin areas and restlessness shown by skin twitching, flicking of ears and tail, irritability and stomping.
“When allocating swede crops, we’re advising farmers to be cautious if they see the plant showing signs of developing flowerhead.” “These have had to be sourced internationally from three countries and that took… much longer than we’d expected.
“Now that the equipment has arrived we can start testing and we expect that process to take around six weeks. So
the analysis of the plant samples should be complete by the end of May and the interpretation of that data by mid-July.” Kyte says the crosssector industry advisory group that he chairs has released advice to help farmers make key decisions this winter on transitioning and managing crops to feed their cows.
Richard Kyte
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DAIRY NEWS AUSTRALIA APRIL 2015
26 // ANIMAL HEALTH
Show cows could help dairy’s social licence APRIL FOR our family has always meant a trip to the Royal Easter Show. As a young boy, I would meet up with my mates, some of whom I would only see at this annual event.
In our teenage years, we would spend as much time as possible at the horse pavilion chatting up the young “horsey girls”. As we got older, we would meet at the cattle-
man’s bar to talk about the weather…and the horsey girls we used to chase. It was at the Royal Easter show in 1991 that I met my future wife and as times have passed, I still
love a trip to the Royal to catch up with old friends. But showing of cows isn’t what it used to be. There is less emphasis now on how a cow looks in a show ring, and more on
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ANIMAL HEALTH ROB BONANNO
“A critical reason to encourage every dairy farmer to consider owning a show cow is that shows are our industry’s best chance to put our best foot forward to the city-based consumers.” how she performs in the vat; there is more emphasis on her genomics than her phenotype. I was pondering how, as dairy enters into the next age of technology, can cow shows survive? Dairy farming can be a pretty lonely business, with early starts and late finishes meaning that having a social life will often come second. The next generation of farmers has grown up in an era of greater connectedness and require and desire a network of friends. Families working together at home, as well as in the ring, are a great part of the show. Getting your young people interested in the pedigrees of the cows, involving them in some mating decisions and seeing them compete is a great way of nurturing them, and mentoring them into the industry. We need passionate young people more than ever so even commercial farmers should consider getting a few “fancy cows” if that gets their kids interested in the farm and create interest in the breeding program. It need not cost a fortune, there are a number of minor breeds that are easy to buy into. My first Guernsey royal show champion cost me $330 as a calf and she ended up classified 89 points and 20 years later, we are still working with that cow family, and winning ribbons. Another critical reason to encourage every dairy farmer to consider owning a show cow is that shows like “the Royal” are our industry’s best chance to put our best foot forward to the city-based consumers.
Our industry is, like all animal agriculture, in the sights of extremist animal rights organisations with a no animal agriculture agenda. The best way for us to counter that is to create and nurture the goodwill of the consumers. We need them to know how much we love the animals in our care and when families walk through the dairy cows at the show and see dairy farmers primping and preening their cows, it sends a very positive message to consumers that we do love our girls. No matter how high our production might be, no matter how technologically advanced our farming practices are, or how we actually do care for our animals, if the public perception is different to the reality, and if the consumers don’t trust or believe in what we do, then the social licence to farm could be lost. We simply must put our best foot forward in the public arena as well as continue to strive to do it better at home on every farm with regards to animal welfare practices. Your herd veterinarian is your best resource when considering the welfare of your herd. A risk when taking animals off the farm, and comingling them with other animals and people, is the potential biosecurity risk to your herd. This risk must be considered, and managed, by all herd managers. Developing and following a plan to manage all new introductions and all movements on and off the farm should be part of every farm’s management. Preventing introduction of new diseases that TO PAGE 27
DAIRY NEWS AUSTRALIA APRIL 2015
ANIMAL HEALTH // 27
Silage smells and what they may mean IAN WILLIAMS
I GREW up in town and one of my distinct memories of summer and autumn when we went to visit our farming friends was the smell of silage. As a kid, silage always seemed to stink and it is a smell which has been imprinted on my brain. Now I work with the stuff. I even have a personalised number plate with the word SILAGE on it! Whenever I introduce myself to people from town and they ask me what I do and I mention the word silage, they instantly screw up their noses and say something like “How can you work with that stuff, it stinks?” or they ask “Are you still married?” Prior to the maize silage making season, I thought it would be a good opportunity to run through some of those silage smells and outline what they may be telling us. First, a word of precaution. If you want to smell your silage, don’t stick your nose into a handful and inhale deeply. Some silages may contain spores harmful to human health. Put your silage sample on a flat surface and use your hand to waft the smell up to your nose. That said, let’s get back to the odours. Desirable smells: Little or no smell The most desirable end product of the fermentation process is lactic acid. Lactic acid is nearly
odourless. So if the silage doesn’t smell or has a slightly earthy smell that is a good sign. Slightly vinegary If you have used an inoculant like Pioneer brand 11C33 or 11CFT which contains L. buchneri, then a vinegar odour shows the bacteria have done their job. L. buchneri bacteria take lactic acid and convert it to acetic acid, making the silage less likely to heat when exposed to air. Acetic acid is what is in vinegar. Undesirable smells: Vomit/rotten meat This is the smell I remember as a child, mainly in grass silage though. If the silage stinks, it has probably gone down a butyric acid fermentation pathway. This usually happens when the silage contains a lot of soil or was harvested too wet. Not only do humans hate the butyric smell, cows do too and they usually need to be very hungry before they will eat the silage. It is important to note that this smell nearly always occurs in grass silage rather than maize silage. Vinegar If your maize hasn’t been inoculated with a proven L. buchneri inoculant (as outlined above) and it smells of vinegar (acetic acid), a less efficient fermentation has occurred, increasing feed losses and possibly decreasing palatability. Alcohol, sweet, fruity, buttery or even butterscotch
The silage may smell really good to us but these smells all indicate the presence of yeast prior to the maize being fully fermented. Once again this means an inefficient fermentation pathway and greater energy and drymatter losses. Some farmers wrongly associate these smells with good silage. Acetone (nail polish remover) This smell usually occurs once the stack has been opened and exposed to air. This is a precursor to rapid heating, and therefore losses. Ammonia, caramel or tobacco All these indicate heating when the silage was being ensiled. Ammonia indicates the breakdown of feed protein and caramel and tobacco indicate the loss of sugar. Cows often love tobacco smelling silage but usually turn their noses up at ammonia. What to do about smells As always, the best way to ensure your maize doesn’t end up stinking is by doing everything right in the first place. I have covered how to make great silage in many previous articles but you may also want to read the following article: http://www. pioneer.co.nz/maize-silage/ product-information/silagetechnical-insights/storing-amaize-silage-crop.html If your silage does smell and your cows don’t want to eat it, the only solution is dilution. Remove all obvious rot and mould,
If your silage doesn’t smell, that’s a good sign.
and then try to incorporate any bad smelling silage with a large amount of good smelling silage. Some farmers have found the addition of powdered molasses can help. Finally, the best way to get an assessment of silage quality is to send a sample to a commercial feed testing laboratory. • Ian Williams is a Pioneer forage specialist. Contact iwilliams@genetic.co.nz
Show cows could help FROM PAGE 26
your herd may have no immunity to is a very important component of your farm management. You should involve your herd veterinarian as they are the animal health experts. As many readers will know, I have accepted a job working in China. This is an incredible opportunity for me and my family but it is with great sadness that this
will likely be my last Dairy News Australia article for a while. I think that my ramblings have been in all but one edition of Dairy News since its inception, and I have taken great pride in being your correspondent all this time. The one consistent message has been that your herd’s veterinarian is your best resource for animal health, welfare and biosecurity advice.
Make your vet part of your team, and you will begin to see your veterinarian not as an expense, but as your greatest resource. If your vet is a member of the Australian Cattle Veterinarians (ACV) like me, they will have a network of over 1000 professional colleagues. An open invitation exists to any Dairy News Australia readers who are in China to look me up,
and if available, I will share a Tsing Tao with you. If the editor indulges me, an occasional report from the Far East may be on the cards! • [From the Editor – Rob, we welcome all future reports from China. You have been an informative and entertaining columnist and will be missed by the Dairy News Australia team, our readers and, no doubt, your clients in the Shepparton district.]
DAIRY NEWS AUSTRALIA APRIL 2015
28 // NEW DAIRY TECHNOLOGY
Software provides an important safeguard JEANETTE SEVERS
A MOVE to Australia from New Zea-
land 10 years ago has paid off for the Whittaker family, who milk 1000 cows at Denison. The farm employs 12 people, with varying responsibilities, duties and shifts in the dairy and across the farm. Soon after buying the dairy farm they bought computer software to manage their herd and recently installed the latest upgrade of farm automation, called iDairy, developed and installed by Simon White at Farm Automation Australia. Adrian Whittaker is responsible for herd management, which includes the iDairy software system. With so many users, he finds it ideal for its purpose. “If you’re going to have employee milkers, a sharefarmer or farm manager, it increases accuracy; it’s a good tool,” Mr Whittaker said. “It makes life simple. “It decreases risk of inbreeding and lost breeding groups, of overfeeding and the latest upgrade enables us to identify milk production figures for each cow.” Each cow has an electronic ear tag and when the animal enters the rotary
WHO:
Adrian and Michael Whittaker WHERE:
Denison WHAT:
iDairy software
dairy, the tag is scanned and the system identifies the milker’s breeding, pregnancy status, feed needs and pharmaceutical history. Every cow’s feed ration is measured according to her pregnancy status and allocated at each milking. Cows are fed an average 5.9kg maintenance feed per milking year round, peaking at 8kg at 100 days post calving. The software prevents overfeeding. “If a cow goes around the rotary twice, you don’t have to worry about turning feed on or off, she simply doesn’t get extra food,” Mr Whittaker said. Cows are grouped identifying similarities, such as breeding families and
The system uses alerts, both sound and visual, to identify anomalies among the cows.
Adrian Whittaker in his office at the dairy, checking cow records on the iDairy software system. The latest software is compatible with his system.
bulls, to ensure against inbreeding. The system uses alerts, both sound and visual, to identify anomalies among the cows – for instance, when a cow needs to be dried off. “As soon as she’s joined, the system starts counting down 220 days until zero day, or the date of drying off,” Mr Whittaker said. “If a cow slips a calf, you can get instantly on the computer when she was joined, what treatments she’s received and what bull she was joined to.” The software can even be used for unique risks. “We have one cow and every time she steps on the rotary, she pees,” Mr Whittaker said. “So I recorded a warning in the system, so when she steps on the platform and her ear tag is scanned, the alert ‘I’m going to pee on you’ comes out of the speakers and we have time to step back and avoid her urine. “It means we don’t have to try and identify her any other way or keep looking for her at each milking.”
But the adage about users is true, Mr Whittaker said. “The software program is only as good as the information you put into the system,” he said. The computer software enables forward planning and timed events, which means Mr Whitakker can allocate jobs to future dates and go on holiday knowing they will be carried out. “It takes the paperwork out of the system,” Mr Whittaker said. “There’s no need to write lists and lose them. Everyone can input the data into the system. “If I want 30 cows drafted out at a particular milking – for example, for pregnancy testing – I can program it into the computer and it doesn’t matter who is working, the alert for each of those animals comes across the system and the work occurs as organised.” The latest upgrade has added milk production to the system. “Now with the iDairy and the milk meters, you know how many litres the cow is producing,” Mr Whittaker said.
“It makes it easy to be accurate with milk amounts. “So it helps you cull the right cows, identifying those producing no milk or only a couple of litres. “Also, cows with cell count of 1000plus cause alerts on the system. “Straight away you can evaluate that yourself, you don’t have to go through sheets of information.” In addition, when Mr Whittaker identifies a need for change, he contacts Mr White who creates the necessary software and adds it to the system. “For example, I’ve told him I want to be able to identify average milking time and average feeding time for each cow,” he said. “When he creates the patch program, he sends it to me. “It’s the same as upgrades – bull information and pharmaceuticals are upgraded regularly so the herd breeding and health is kept up-to-date. “The iDairy software program makes it very easy management-wise to run the business,” Mr Whittaker said.
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DAIRY NEWS AUSTRALIA APRIL 2015
NEW DAIRY TECHNOLOGY // 29
Upgrade didn’t stop milking RICK BAYNE
WHEN PURNIM dairy farmers Anthony and Wendy Eccles decided to upgrade their dairy, maintaining their daily milking regime was a high priority. The farm milks 330-450 cows and produces more than three million litres annually. The computer in their 18-year old dairy was starting to falter, leading to delays and costly parts replacement. However, unlike most farmers who dry off over summer and have times available for dairy upgrades, the Eccles milk all year and didn’t want to change their routine. “It’s been 18 years since we built the dairy. The concrete floor and shed are fine and the machines were being upgraded as we went along, but it got to the stage with maintenance of the computer side of things that it took too long and was too costly,” Mr Eccles said. “When you get water or condensation it was costing $1000 to get a new board put in.” However, they didn’t want to break the farm’s daily milking routine. “The scary thing in getting it done was that we might not be able to milk the cows,” Mr Eccles said. “Other farmers might dry their cows off and have a four or six week break in between seasons, but we milk all-year round so we don’t have a break.” The Terang Co-op Dairy Services Team was able to solve the problem
and install the new WestfaliaSurge equipment from GEA Farm Technologies without interrupting the daily routine. Mr Eccles had previously worked with the Co-op’s dairy technician Gerald Farley and was keen to continue that link and his connection to the WestfaliaSurge equipment. “Gerard is a very good operator and was able to organise it so we could change the system over and still be able to milk the cows at the same time. There were no hassles with our milking operation; it was really well planned,” he said. Not only has the changeover worked smoothly, the new set-up has improved the efficiency and accuracy of the dairy, improved safety and comfort for cows, and ensured the dairy is free of pests. One of the big benefits has been the ability to closely monitor each cow through upgraded DemaTron 70s milk meters. “Each bay has all the information on the cow as she walks in, such as how heavy in calf she is or whether she’s on heat. It identifies the cow so when she goes in she can be individually fed based on how much milk production she has given,” Mr Eccles said. “Because we milk yearround we’ve got cows calving now and cows just starting to dry off. With this system I can keep a close eye on them and know what stage of lactation they are at and how much milk they’re giving
us.” Mr Eccles described the new computerised system as “foolproof” and easier to operate. “The cups-on, cupsoff system is on the computer screen,” he said. “It has a speaker that tells you if a cow walks on and she’s got to have antibiot-
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Athony Eccles in his updated dairy.
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“We have the opportunity to supply milk for a new fresh milk contract with Fonterra. This will mean stricter adherence to quality parameters and meeting production targets. The upgrade will help the work team with the transition in to this new market.”
The new WestfaliaSurge system installed by the Terang Co-op Dairy Services Team is also cleaner. “We had some buildup of protein in the plant,” Mr Eccles said. “The new system is washing a lot better and we’re not using as many chemicals.”
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“We want it spot on,” Mr Eccles said. “I’m letting the staff do a lot more hands-on work and take over the milkings so I don’t have to be there all the time.” The farm is also moving to fresh milk supply, meaning it has to be accurate with all details.
ics. The person putting on the machine is not going to put on the wrong cups. The worker knows what’s going on so he’s not going to make a mistake by putting the wrong milk in the vat.” The automation is an extra insurance policy for the Eccles farm.
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DAIRY NEWS AUSTRALIA APRIL 2015
30 // NEW DAIRY TECHNOLOGY
Integrated technology made easy MARCUS CROWDEN
doesn’t consider himself a technology geek but he’s the first to admit that integrated technology is the key to being able to run a second dairy herd on what was once a run-off block 5km away from the home farm. His technology is easy to use, well supported and doesn’t need a geek to run it. Installed about three years ago, the Crowden family’s automatic milking system (AMS) runs smoothly and is at capacity for much of the year. Stocked at 4.6 cows/ha, the herd averages 500kg milk solids per lactation. Mr Crowden and his wife, Zed, and his parents, Denis and Sheryl, run two dairy farms at Caveside, near Launceston Tasmania. The 48ha AMS farm is located 5km away from the home farm which has a conventional dairy. “The milking robots get all the attention but the
herd management software, automatic drafting gates and outdoor feeding stations are just as important to a successful automatic milking system,” Mr Crowden said. Their set up includes three DeLaval VMS robots, four automatic drafting gates and six feed stations which are managed through DelPro, DeLaval’s herd management software. Mr Crowden can remotely manage the system from a computer at the home farm or a mobile phone. “We can see what’s happening through two web cams located at the dairy. And we have remote control of the robots, smart gates and feeding system,” he said. Mr Crowden is pragmatic about the amount of time he spends on the computer. “DelPro automatically records an enormous amount of data but
I’ve learnt which reports are most useful to our situation and it only takes an hour or two a week to keep track of things,” he said. Although the AMS was running smoothly within about four months of installation, Mr Crowden said he is constantly refining his system, especially in terms of voluntary cow movement to and from the dairy. In the early days he was focussed on making sure there were enough cows at the dairy to keep the robots milking throughout the day and night. Now that he has very good voluntary cow movement and the robots are operating near capacity, he is focussed on making sure the right cows are being milked at the right time. One of the refinements he made was to change the settings so that there are no more than 10 cows waiting at the yard at any
Integrated technology has allowed Marcus and Zed Crowden to run a second dairy herd on what was once a run off block 5km away from the home farm.
time and to give certain cows priority access to the robots. Priority cows are those that have more milk in their udder – such as high production cows in early lactation or cows that have not been milked in the past 12 hours.
“If a lower priority cow arrives at the dairy and there are others waiting she can be drafted to the feedpad while higher priority cows are milked. This is a key to maximising the amount of milk harvested per robot which is 2700-
3000 L per day on our farm,” he said. “Initially we only used the feedpad in the evenings, to encourage cow movement but over time we’ve found it is a very useful management tool. I’ve been able to tweak
the settings to ensure that none of the cows spend too much time standing on concrete.” Feed stations Mr Crowden said the out of parlour feed stations play an important role in running his robots
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new dairy technology // 31
The Crowdens offer access to four fresh allocations each day to encourage good voluntary cow movement around the farm.
at near capacity. Located just after the dairy, the feed stations encourage cows to leave the robots once milking is finished, freeing up the robot for another cow to be milked. “Operating with a high stocking rate means we need to feed high levels of grain to high producing cows. “Without the feeders, these cows would be spending non-milking time in the boxes when they could otherwise be milking another cow. So the feed stations are essential in allowing us to operate the robots at capacity.” Mr Crowden said the
feed stations had more than paid for themselves through the individual feeding function. High producing cows are fed more than 3t/year while low producing cows get less than 1 t/year. The level of feeding changes throughout the lactation based on both production and body condition. “We are getting a much better return on our investment in concentrates because they are directed to the cows that give a milk response.” Recognising the importance of accurate pasture allocation to both voluntary cow movement and farm profitability, he mon-
itors the amount of pasture cows consume, which is reported in his DairyTas benchmarking results. Last year cows consumed 13.8 t of grass and he’s aiming for 15 t this season. The farm is set up for three-way grazing and Marcus has programmed his system to allow cows access to fresh feed four times a day as follows: ■■ 1:40am-8:30am: 45% of daily pasture allocation ■■ 8:30am-4:30am: 35% of daily pasture allocation ■■ 4:30pm-11:00pm: 20% of daily pasture allocation ■■ 11pm-1:40am: feedpad (brewers grain or silage)
“We’ve found that offering different portions at different times of the day encourages relatively even voluntary cow movement throughout the day and night so the robots have very little idle time,” he said. With the system running at capacity at the peak of the season the Crowden family is starting to think about further expansion. “A 28ha tree plantation was harvested recently and has been planted back to pasture so we are looking at the feasibility of adding another robot and milking more cows,” Mr Crowden said.
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Marcus Crowden said while the milking robots got all the attention the herd management software, automatic drafting gates and outdoor feeding stations were just as important to a successful automatic milking system.
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DAIRY NEWS AUSTRALIA APRIL 2015
32 // MACHINERY & PRODUCTS
New precision air seeder hits the spot TEMPLETON’S AG
Contracting, based at ‘Glenkeith’ in Glenormiston North, in Victoria’s Western District, is a real family affair. Richard Templeton, 26, runs the contracting side, while his parents, Ian and Sharon, look after the 320cow milking herd on their 160ha property. His maternal grandfather, Ray Feeney gets into the act by helping out with the contracting machinery. The contracting business covers the full gamut of cultivation and seeding, hay and silage, round and square baling, spraying and hay sales and cartage. Mr Templeton travels within a 100km radius of home. Their property sits right on the border of
WORKING CLOTHES CHRIS DINGLE mainly dairying to the south and mainly cropping to the north, so the business is split fairly evenly between the two. Last year Mr Templeton was looking for a new high capacity precision air seeder and saw a linkage-mounted Amazone Cirrus 6003-2 combination machine being demonstrated by another contractor, Jig Ag from Mt Gambier. They did a deal to
transport it home to Mt Gambier in exchange for sowing their own summer crop to see how it performed. They ordered their own unit in September and at this stage there are only four similar machines operating in Australia. Amazone machines are distributed here through Landpower Australia and Mr Templeton bought his from Landpower Colac. “Scott O’Hanlon there is really good to deal with,” he told us. At the time we visited in late March Mr Templeton was waiting for rain in his customers’ areas as he had a full schedule of sowing lined up. “There are 3000ha ready to go,” he told us at the time. “We have a mix of pasture and cereals, and they
Richard Templeton was looking for a new high capacity precision air seeder and bought this linkage-mounted Amazone Cirrus 6003-2 combination machine.
WHO:
Richard Templeton WHERE:
Glenormiston North WHAT:
Amazone Cirrus 6003-2
The Amazone Cirrus 6003-2 has a 6m working width and folds down to 3m for transport.
tell us that poppies could be a potential crop in the future around here. “We have a 400ha sowing job to be done at one dairy farm when it rains.” The Amazone Cirrus 6003-2 has a 6m working width and folds down to 3m for transport. It comes with a pressurised tank to provide single-shoot fertiliser metering reliably into the seed row. Safe filling of the split hopper is carried out via a platform at the side. “I liked the concept of speed tillers on the front that can be worked in the ground – or not,” explained Mr Templeton. “It uses 5” spacings
which is beautiful for pasture, especially good for dairy farmers and can be changed to 10”. Most machines in this size are either 6 or 7 inch.” It is a one-pass machine and is set up at the moment for seed, fertiliser and slug bait. The seed box holds 900kg and two tonnes of DAP can be contained in the fertiliser bin. “The machine is fully automatic, simple to use and easy to calibrate; it has a speed radar - once that is set it’s ready to go. You can change the dosage roller when the seed box is full, if you need to. You can’t do that on many machines.” As Mr Templeton says,
“This machine ticks all the boxes.” He operates it at the moment with a CASE Puma 195 and the average speed is 10–12km/h which means about 6ha/ hour. The average seeding jobs are 3 to 10ha for dairy farms and 30 to 100ha for cropping. Also in the business they run three tractors, a Grizzly cultivator, a utemounted spray rig, a 3m Kverneland power harrow, a Sow-Ezy 3m air seeder, a mower/conditioner, tedder, a Welger round baler, a Vicon 8’ x 4’ x 3’ large square baler and a single Taarup bale wrapper. He employs one casual
worker as well as his grandfather who operates the Grizzly discs, the mowers and tedders; “He’s probably the best worker we’ve had!” On their own farm they grow rape as a fodder crop for grazing, plus lucerne, oats and ryegrass for baling. They are also looking at buying standing hay and transporting it in their own hay trucks. Mr Templeton is keen to grow the business in the future, by acquiring more equipment and expanding the customer base in both cropping and dairying. “I’d like to do more silage and pit silage eventually. Finding the right staff is an issue.”
The Amazone Cirrus 6003-2 uses 5” spacings, which Richard Templeton is excellent for pasture.
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DAIRY NEWS AUSTRALIA APRIL 2015
MACHINERY & PRODUCTS // 33
MB Trac another ahead of its time ONE FEATURE of most good ideas is that someone has had them before. Which often means either that it wasn’t a good idea, or that you can do a better job of it than the previous party. It may also mean that the idea was originally ahead of its time. High speed tractors may be one such idea. Last month’s column considered the very innovative, very comfortable and very fast (well, relatively fast) JCB Fastrac series. As a great many tractor enthusiasts will be aware, the Fastrac took the reins from an earlier generation of high speed tractors – perhaps most notably, the Mercedes Benz MB Trac line. If the Fastrac was innovative for its time, the concept underpinning the MB Trac series was revolutionary. The combination of
4WD through equal-sized wheels, high horsepower engines (eventually up to 180hp) and high road speeds was a long way ahead of early 1970s tractor technology. Mercedes Benz and its predecessors had developed its Unimog multipurpose vehicle in the mid-1940s, for use in agricultural applications – being able to run implements off the front and rear, and carry a load over the centre of the chassis. The Unimog came to be highly successful in many uses, but not as an agricultural vehicle. So they had another go, developing the Unimog platform into a full-blown tractor, which became the MB Trac. In terms of powertrain, suspension, versatility and speed, the MB Trac was uniquely capable, filling a variety of specialist roles as well as having the abil-
GRUNT
JOHN DROPPERT ity to function as a standard (though fast and comfortable) tractor. Most certainly ahead of its time, but whilst a commercial success, it didn’t meet Mercedes Benz’s high expectations, and the line was effectively palmed off in a joint venture with Deutz. All up, production ran from 1973 through to 1991, when it was taken over by the Werner Company, which still produces a derivative, the ‘WF Trac’, aimed primarily at forestry users. In what can only be a
thumbed nose at Mercedes pitching the machine at farmers, some machines have also been converted for use shunting railcars by a company in Belgium. Like the Fastrac, most MB Tracs imported to Australia were stretched and fitted with fertiliser bins, forming the backbone of many fertiliser suppliers’ spreading fleets. Unfortunately, that meant they worked hard and many have now disappeared into obscurity – or more likely, wreckers’ yards. I haven’t driven one myself, given they were long gone from mainstream fertiliser business before my time, and reports from those who have, vary. On one hand, an operator who drove one for a day before being promoted to a Fastrac said it was ‘Ok, but outdated’ – clearly not the nostalgic type.
Others are more effusive in their praise, recalling a time when an enclosed cabin (let alone suspension, reversible consoles and high road speed) was the ultimate in tractor technology. A significant number of non-stretched machines seem to have found their way into the hands of beef farmers and, fitted with front end loaders (try that
on a Fastrac), have spent decades slouching around moving round bales here and there. As a unique machine, the MB Trac has developed something of a cult following, with a number of restoration projects popping up here and overseas. It’s also the first machine that a reader of this column has drawn my attention to, which might
not cheer the bean counters at Mercedes that poured vast sums into its development four decades ago, but must count for something. • 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.
Automatic gate release saves time TASMANIAN DAIRY farmer, Robert Frampton, uses his BattLatch “almost daily”, saying “we certainly wouldn’t farm without it”. Mr Frampton manages his family’s dairy farm at Gawler in Tasmania which seasonally milks about 450 cows. The BattLatch is a portable solarpowered automatic gate release timer suitable for spring and other types of farm gates. His father, Norm, bought his first BattLatch after seeing one at New Zealand’s Fieldays about eight years ago. The family now owns four, including one with radio control (RF) actuation. All units are still in use. With the farm more or less split by a
major road, Norm found the RF remotecontrolled model of the BattLatch great for getting the herd to arrive and wait at the road crossing while staff prepared the milking machines. With the road crossing only about 500m away and in line of sight of the dairy parlour, it was a simple matter for the staff to walk out and point the handheld remote towards BattLatch for it to release the spring gate and allow waiting cows to cross the road. “This not only saved time, it also meant the cows were under less pressure,” he said. A recently installed underpass has superseded this need now. The RF remote control BattLatch
has also been used for drafting-off newly calved cows at a gate way. “By being able to keep one’s distance, it is quicker, safer and less stressful for the stock and it can all easily be managed by one person.” One of the major benefits to the farm that Norm and Robert have observed from using a BattLatch over the years has been in the management of fertility transfer throughout the farm. “Because a BattLatch saves so much time in the morning when getting the cows, there is much less temptation to choose your night paddocks close to the shed,” Norm said. “This is also quite possibly why we also no longer experience milk fever in
The BattLatch put to use on the Frampton family farm in Gawler, Tasmania.
the calving paddocks although the more balanced approach to fertiliser nutrient inputs we have undertaken in recent
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DAIRY NEWS AUSTRALIA APRIL 2015
34 // MACHINERY & PRODUCTS
Manure improves soil fertility DAIRY FARMERS are
using slurry tankers to spread effluent, boosting soil fertility. Rather than seeing effluent as something to be disposed of at least cost, farmers are looking to make best use of it. Tankers efficiently transport effluent to where it will be most effective, and efficiently
apply it, either by spraying or by dribbling it directly onto pasture or injecting it into the soil. Pichon has made slurry management equipment for 40 years. The tankers have an integrated frame, the tank forming part of the chassis. This means a lighter machine with a lower
centre of gravity. The tank is galvanised inside and out, and can be specified with an internal agitation system. A range of auto-fill systems is offered, but most common is the BP2 arm which can go either side of the machine, connecting the tanker suction line to a filling cone positioned
adjacent to either a pit or tank. One of three discharge systems can be fitted to the tankers, each with options that tailor the machine to the specific task: A simple, traditional spreader plate and nozzle is the most common and cheapest option, though it is arguably the most ineffi-
cient at retaining the nutrient value of slurry due to losses in atomisation. And it will not suit a farm close to residential areas where smell may be a problem. A spreader bar, mounted on a hydraulic linkage at the rear of the tanker, delivers the effluent to either trailing shoe applicators or a dribble
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bar for direct soil application (spreading width up to 28m). A disc injection system delivers the effluent into the ground for optimum plant takeup and a minimum of nutrient loss. For models fitted with a spreader bar or injectors, a macerator ensures the slurry is broken up and deals to foreign bodies preventing blockage of the discharge system, while an easily accessible stone trap can be emptied as necessary. The filling, transport and spreading phases are
hydraulically sequenced for simple and easy operation with a minimum tractor spool valve requirement. And for a precision farming application system, electronic flow control can be specified to monitor and control correct application according to the speed and spreading width. The Pichon tanker range covers capacities 2600 to 30,000L, plus a big range of filling and discharge options. Pichon equipment is sold in Australia through Muck Runner. Tel. 08 8738 8045
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series radial-lift skid loaders ‘down under’, and they are expected to be popular with farmers. The line-up is all new, the company says. The models R190, R220 and R260 offer a better operator station with an integrated digital display, improved visibility, pressurised cabs, Tier IV engines and a high-powered hydraulic system. These machines are rated large-frame. When equipped with optional counterweights, the rated operating capacities range from 957kg on the R190 to 1260kg on the R260. Lift heights reach up to 3060mm on the R190 and 3124mm on the R220 and R260. Their emissions compliant Tier IV Yanmar engines have DPF (diesel particulate filter) technology – environmentally sound and needing no fuel aftertreatments, such as urea. With
maximum torque ratings from 235 Nm on the R190 to 279.3 Nm on the R260, power is ample, says the company. The R Series skid loaders come with high-powered auxiliary hydraulics that achieve flow rates from 119L/min on the R190 to 32.5L/min on the R220 and R260 with the highflow configuration. High breakout forces are great for digging and faster cycle times further enhance productivity. The cabs have a new side-folding restraint bar and armrests with multiple adjustments. Joystick and hand/foot control towers are fully adjustable and the mechanical or air-ride suspension seat options gives plenty of comfort. Tel. 02 9517 3174
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beGa Southern Farm Supplies Ph: (02) 6492 3500 raleiGh Bill Hodgson Dairy Services Ph: 0428 299 230
kesWick Adelaide Dairy Automation Ph: 0418 847 434 MT GaMbier Dairy Tech South East Ph: (08) 8723 4562
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JiMbooMba Teknodairy Ph: 07 5546 9027 MT crosbY Wal Newton Dairy Service Ph: 0409 262 593
foresT Irrigation and Dairy Solutions Ph: 0458 838 331 sMiThTon Browns Dairy & Irrigation Ph: 0458 138 784
cobraM Advanced Dairy Systems Ph: (03) 5871 2433 cohuna Dairy Technology Services Ph: 0409 579 177 fish creek R F & H M Poletti Ph: (03) 5683 2233 fosTer Dairy Pro Pty Ltd Ph: (03) 5682 1383
koruMburra Westfalia Korumburra Ph: (03) 5658 1119 kYabraM Dairy Technology Services Ph: (03) 5853 1066 Maffra Hico - Herd Improvement Co-Op Ph: (03) 5141 1493 PooWonG Poowong Dairy and Hardware Ph: (03) 5659 2311
TeranG Terang & District Co-Op Ph: 03 5592 2322 WarrnaMbool Dairy Technology Services West Ph: (03) 5561 5001 WoDonGa Buile Electrics & Dairy Service Ph: 0407 235 278 YarraGon Westfalia Warragul Ph: (03) 5634 2065
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hard-working, proven teat protection
Protect your hard-working cows with the proven protection of Ready to Use Theraspray Gold, Theraspray Gold, theraspray 5 ready to Use, theraspray 20, Theraspray Red, Blu-Gard Concentrate and gSe Udder emollient teat care solutions.
we work harder so you can work smarter. www.ecolaB.com *APVMA Approval No: 58509, 47545/0802, 68319/58101, 68079/57440, 47746/0902, 45899/0802 and 67863/56998.