Dairy News Australia July 2015

NSW PRICE CERTAINTY

Beston invests in SA PAGE 7

Fonterra gives confidence PAGE 10

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DAIRY NEWS AUSTRALIA JULY 2015

NEWS // 3

Learning more about better nitrogen use at a recent Focus Farm field day at Tim and Grit Cashin’s Leongatha South farm were Michael Kilkenny, Max Jelbart, Brett Allan, Andrew Bacon and Dan Knee. Read more: Page 22.

Nestled near the biggest vineyards in Tasmania’s Tamar Valley, Peter and Jo Jones are out to prove milk can be just as good as wine. PG.22

Mix in products buffers Australia from GDT fall

About 30% of farmers are missing out on the advantages of a transition cow nutrition management program, says Dairy Australia’s Kathryn Davis. PG.28

THE FIRST Global Dairy Trade auction of the month has seen prices drop by 5.9% - the most severe drop since April 1, when it fell by more than 10%.

It was the 8th consecutive drop in prices, with the index the weakest it has been since August, 2009.

Whole milk powder was the big casualty, falling by 10.8% to US$2054/metric tonne, while skim milk powder fell 5.8% to US$1875/ MT. Butter milk powder prices fell by 8.1% while rennet casein was down by 4.1%.

Dairy Australia industry analyst said the fall made bad headlines and reflects an ongoing situation of global oversupply of dairy, relative

Northern Victorian farmer Brett Dixon has been impressed with the improvements in the latest machine from Duncan, the Renovator AS3500. PG.31

NEWS .........................................................3-13 OPINION .................................................14-15 MARKETS .............................................. 16-17 MANAGEMENT ................................. 20-22 BREEDING MANAGEMENT ....... 23-24 STOCKFEEDS .................................... 27-30 MACHINERY & PRODUCTS .......31-34

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Australia’s point of view, although it is a much more direct a problem for New Zealand.”

New Zealand’s Federated Farmers dairy chairman, Andrew Hoggard, said the mood among Federated Farmers delegates at their annual conference was one of disappointment.

Farmers were shocked by the sharp fall in WMP price.

“We were thinking the prices may have hit rock bottom in recent weeks so the 10% drop in WMP prices is shocking,” Mr Hoggard said.

ASB Bank in New Zealand has dropped its forecast payout for the NZ industry this season from $5.70kg/MS to $5kg/MS on the basis of the latest fall.

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a 5.9% fall) was driven more by the dramatic moves in WMP due to New Zealand supply than anything else.”

Mr Droppert said the result was much worse for the New Zealand industry, which is heavily reliant on WMP exports, than Australia, which has a more diverse production mix, as well as a larger domestic market.

“Australia produces more SMP, which has already been bumping close to a floor for some time.

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However, Mr Droppert said the fall did not come as a complete surprise, as volumes on offer were well up, particularly from Fonterra.

“Sales for the new NZ season are also ramping up, which means a seasonal increase in offer volumes from here on – even being seasonal, increases from auction to auction only exacerbate the impression that supply is continuing to grow,” Mr Dropper said.

“All of this at a time when most buyers have what they need for most of Q3, and just aren’t in a hurry to buy too much more.”

Mr Droppert said results were mixed at the product level.

“The headline index change (of

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DAIRY NEWS AUSTRALIA JULY 2015

4 // NEWS

Farmers want opening prices announced earlier RICK BAYNE

FARM LEADERS have reiter-

ated their calls for earlier forecasts of seasonal prices, with companies announcing this season’s prices one week out from the financial year.

United Dairyfarmers of Victoria president Adam Jenkins said the industry wanted profitable growth and would benefit from earlier forecasts of prices.

“We understand the market is volatile and everyone’s cautious, but I think we should get earlier notice,” he said.

“It is very tricky because anything could happen in a month or so before the opening price, but an indica-

tion of a 12-monthly rolling average would be good for our businesses.

“It would help with planning.

We’re generally autumn calvers in Victoria and you’re finishing off the last season’s pricing and then you’re not sure what the system looks like heading into the next season. ”As soon as you get a clearer line of sight you can make on-farm decisions.”

The MG price for the southern milk region was forecast during its share offer at the start of May and farmers want those earlier predictions to continue.

South Australian Dairy Farmers Association president David Basham said that under their current mode of operation it would be difficult for

processors to announce prices earlier, but he supported the call for lead-up predictions.

“Murray Goulburn this year with their capital raising came out with where they hoped the price would be and it hasn’t changed. Farmers are usually guessing up till this point; there should be some predictions about what’s coming.”

Ms McCartie said having earlier notice of likely prices would help farmers.

“The earlier we see those figures come out the better for everyone’s planning,” she said. “A lot of us are dealing with banks who want to know what’s happening. The more planning we can have, the better it will be.”

Cheryl McCartie said earlier notice of likely prices would help farmers.

Certainty features in Fonterra’s NSW price deal CAMERON WILSON

FARMERS SUPPLYING Fonterra’s Wagga

Wagga factory in the New South Wales Riverina have been offered a new pricing agreement aimed at taking the volatility out of milk income.

After years of farmer lobbying, the processer offered a ‘cap and collar” option, which will put both a floor and a ceil-

ing on the farmgate milk price over the next three years.

About 20 farmers from the Wagga Wagga and Finley districts supply the factory that produces Riverina Fresh products for the east coast market.

Euberta farmers Neil and Simone Jolliffe say it’s the certainty they’ve been seeking since buying their property seven years ago.

“When we bought the farm we were on 56 cents (a litre) and the following year we dropped to 36,” Mr Jolliffe says.

“It’s come at a good time for us we’re looking to grow the business but we didn’t want to grow the business and take a big hit like we did back (in 2009).

“Now we’ve got an assurance that for the next three years this will be our price.”

Mr Jolliffe estimates that under the agreement his milk cheque will only fluctuate by about 4 cents a litre over the next three years.

Mrs Jolliffe agrees that eliminating the income peaks and troughs will be vital as the couple seek to double the farm’s milk production over the next three years.

“I think it will support us with financiers,” she

Neil and Simone Jolliffe have certainty of milk price for the next three years.

says. “I think the timing is good, I think it is the right time for us to be negotiating some secu-

rity in our supply and in our return.”

Individual suppliers have been given the

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DAIRY NEWS AUSTRALIA JULY 2015

NEWS // 5

Prices will hinder industry expansion RICK BAYNE

FARMING LEADERS have welcomed

the relative consistency of another end of season forecast above $6kg/milks solids and are cautiously optimistic but doubt the price will be enough to promote strong industry growth.

Bega was first out of the blocks with an opening price of $5.60kg/MS, with Murray Goulburn announcing the same opening price two days later. This was promptly matched by Warrnambool Cheese and Butter Factory (WCBF) and Fonterra.

Australian Dairy Farmers Co-operative (ADFC) has announced its opening price at $5.87kg/MS. MG confirmed its full year forecast of $6.05kg/MS, with Fonterra forecasting a closing price of $5.80-$6kg/MS, and WCBF saying average closing prices “could be up to $6kg/MS, if market conditions improve in the short term”.

South Australian Dairy Farmers Association president David Basham said the price was enough to maintain the status quo but not enough to drive growth.

“The big concern for the South Australian industry is that over the next 12 months Midfield and Beston will be looking for about 300 million litres of new milk.

That’s a significant increase and to get that quickly is going to be difficult.”

Mr Basham said he didn’t believe the industry could meet the demand.

“I don’t think we’ll get 300 million in 12 months. It would require a significant increase in cow numbers and new farms and until prices are there it can’t happen,” he said.

“Unless you have that extra money people aren’t going to do it.”

United Dairyfarmers of Victoria president Adam Jenkins said the $5.60 opening price was around expectation and farmers would have to make sure they are well placed to keep costs down.

“The market is the market and that’s the reality,” Mr Jenkins said.

“That’s what they’re going to pay so we’ve got to accept that and as businesses make sure the cost of production has the right structures in place to cope with this sort of volatility.

“A lot would have liked a $6 in front of it and we hope that it gets there by the end of the season, but with the world market and the slowdown in China the reality is people knew it was going to be roughly a 10% drop.”

Mr Jenkins said some farmers would still make good money at this season’s price but he urged all producers to “under-

stand the true cost of producing milk on your farm”.

He hoped for a recovery in the world market in 2016.

“I would encourage favourable directions to be transferred through the farmgate as soon as there is movement in the market because it looks like it’s going to be a dry and very tricky season.”

DairyTas chair Cheryl McCartie said she hoped the price would help continue the state’s growth.

“We’ve had good growth in Tasmania and farmers have been reinvesting in their businesses,” Ms McCartie said.

“The feedback has been that people are relieved that it is up there with last year and they’re now looking forward to what the climatic season brings.

“It certainly helps to have consistency when doing forward budgeting and planning. The local companies are all committing to that price range so that helps people’s decision making.”

In announcing its 2015-16 prices, Murray Goulburn said the full-year forecast represents an increase on the 2014/15 forecast closing price and if achieved will result in MG suppliers receiving total farmgate returns in excess of $6kg/MS for the third consecutive year – a new record.

The forecast price remains subject to changes in external factors such as global dairy commodity prices and prevailing exchange rates, the co-op said.

Bega Cheese executive chairman Barry Irvin said 2014/15 was a “very challenging year” in international dairy markets with commodities dropping “some 34%” in comparison to June 2014.

Fonterra Australia said its forecast closing range of $5.80 – $6kg/MS for the 2015/16 season was on the basis of an anticipated recovery in global prices in the first half of 2016 and the continued softening of the Australian dollar.

Warrnambool Cheese and Butter said world dairy prices remain depressed and at the lowest levels experienced for some time.

“In the current market settings, this opening price is at the upper end.

“In this environment average closing prices in the 2015/16 season are difficult to predict and will be dependent on many external factors. If market conditions improve in the short term, average closing prices could be up to $6kg/MS.” The $5.87kg/MS opening milk price announced by ADFC will apply to its suppliers in south west Victoria who supply Bulla Dairy Foods and ADFC suppliers in northern Victoria who supply Procal Dairies.

Paul Bourke would like to be paid $7.50 but the veteran Murray Goulburn supplier realises the collapse of export markets has had a negative impact.

Just treading water on current prices RICK BAYNE

TERANG FARMER Paul Bourke reckons the cost of running a dairy farm has crept up by 15-20% over the past three years.

Sadly, the price he receives for his milk is going in the other direction. As the prices of fuel, electricity, insurance and rates continue to climb – not to mention the day-today costs of running a modern dairy farm – Paul and his wife Helen say they are just treading water with the current prices.

The best Mr Bourke can say about the new season opening price of $5.60 kg/MS and forecast of a full-year price of $6.05 is that “it’s been worse”.

“You look at the rising costs, it just never stops,” he said. “But the

opening price is down 8-10% on last year and last year’s was down 14% on the year before.

“The everyday running of a dairy farm would have gone up 15-20% in the past three years. The income is just not keeping pace. I hope we do get to $6.05 but $6 or $6.05 is a barely treading water price.”

Ideally the Bourkes would like to be paid $7.50 but the veteran Murray Goulburn suppliers realise the collapse of export markets has had a negative impact.

“It’s volatile – the exports have crashed and that’s the main reason the price is down,” Mr Bourke said.

“We just pray for a good season and hope the export price goes up a bit and the dollar might drop a bit.”

After 23 years with Murray Goulburn the Bourkes remain staunch supporters of the Australian-owned

cooperative structure and believe it is moving in the right direction with production efficiencies.

“At the end of the day Murray Goulburn will pay what the market will deliver,” Mr Bourke said. “The share float will hopefully be very beneficial to MG suppliers. I’m pretty confident that will be good.”

Paul and Helen moved to the farm north-west of Terang in 1979 and later bought it off Paul’s parents, growing it from 48ha to the current 240ha where they run about 380 black and whites.

Despite his concerns about the narrow profit margin, Mr Bourke sees a bright future for a healthy food industry such as dairy.

“The experts think there’s a great demand for the product; all we need is a good price for it,” he said.

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DAIRY NEWS AUSTRALIA JULY 2015

6 // NEWS

NZ farmers want answers on Fonterra Australia SUDESH KISSUN

FONTERRA’S NEW

Zealand suppliers want the NZ co-op to spell out the impact of its struggling Australian business on shareholder returns.

Federated Farmers Dairy chairman Andrew Hoggard says each farmer must know how much he or she is paying per kilogram of milk solids (kg/ MS) to “prop up” the Australian business, which includes 10 manufacturing sites.

He says farmers know Fonterra has to pay an attractive milk price in Australia to secure supply but the investment is not

Fonterra Australia national milk supply manager Matt Watt and Fonterra Australia managing director Judith Swales at the Fonterra Australia market outlook breakfast this month.

“Who is paying for that extra money going to Fonterra’s Australian suppliers? We are.” paying dividends now.

His comments come as Fonterra shareholders learnt that Australian suppliers are being paid more than $1 extra for every kg/ MS supplied to the co-op this season.

The co-op last month announced an opening average farmgate milk price of $5.60/MS for its Australian suppliers, which converts to NZ$6.30kg/MS. In May, Fonterra announced an opening forecast price of

NZ$5.25kg/MS for its New Zealand farmer shareholders.

Fonterra Australia national milk supply manager Matt Watt said the Australian milk price is weighted towards the domestic market, which is intensely competitive, driving milk prices higher as processors compete to retain supply.

“In addition, unlike the New Zealand market – where almost 95% of milk is destined for export where global volatility is

a defining factor – only around 60% of Fonterra Australia’s milk goes to the export market, meaning it is less exposed to global commodity prices,” Mr Watt said.

Mr Hoggard said most NZ farmers know Fonterra has to act like a corporate in Australia – unlike the co-operative it is in NZ. “We know Fonterra is not a price setter and has to match competitors otherwise we don’t secure supply. At the same time, who is paying for that

extra money going to Fonterra’s Australian suppliers? We are.”

Mr Hoggard said farmers know their feed costs and cost of interest for every kg/MS. Likewise they should know how much they are putting into the Australian business and the returns being generated in kg/MS, he said. “Fonterra needs to get more transparent about its Australian business with shareholders.

“We go out and get overseas milk pools; we

know you’ve got to pay what you have to pay to get milk but let’s see some returns from that.”

Fonterra Australia said its opening price and forecast closing range are more cautious than recent seasons.

The global environment remains particularly volatile, it said in a letter to suppliers when announcing its milk price.

“Since December we have seen commodity prices decrease due to increased global pro-

duction and a resulting oversupply of dairy commodities. This has coincided with weakening demand which has had some impact locally.

“Although global conditions are challenging, the longer term fundamentals remain positive for Fonterra, with the planned Beingmate joint venture partnership with our Darnum site central to Fonterra’s multi-hub strategy to make Australia its hub for cheese, whey and infant nutritionals.”

Opening price makes forecast closing prices realistic RICK BAYNE

DAIRY AUSTRALIA analyst

John Droppert said farmers had expected prices in this range.

“I guess cautious optimism is the best way to describe some of the reactions I’ve seen,” Mr Droppert said.

“A lot of farmers will be happy to see forecasts of $6.05.

As a starting point $5.60 makes those forecasts fairly likely. It’s a reasonable leap to make.”

Mr Droppert said an element of predictability helped to improve farmer confidence.

“Given where global markets are and volatility we’ve seen in other years, it’s not as much a dramatic change as we’ve seen in the past. Even though it’s a drop and will put pressure on margins, it does help that it’s not sky-high one year and then collapsing the next.”

Mr Droppert said having more information early would help farmers to operate their business.

“If those forecasts are able to be done credibly and borne out in practice, that’s certainly going to be helpful for farmers,” he said.

He added a word of caution.

“You don’t want to bet the whole farm on a forecast because can no-one can tell definitely 12 months in advance.”

The full-year forecast depends on commodity prices and currency but Mr Droppert said the $6-$6.05 predictions were based “on a pretty reasonable view of the market”.

“There’s probably more upside than downside left in pricing at the moment.”

Mr Droppert said he didn’t expect the Greek financial crisis to have any major direct impact on Australia’s dairy industry.

Nathan Cattle, Profarmer Australia; John Droppert, Dairy Australia; Amy Bellhouse, Dairy Australia; Jack Holden, Fonterra, at the Fonterra Australia market outlook breakfast this month.

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DAIRY NEWS AUSTRALIA JULY 2015

NEWS // 7

Beston’s first challenge is to woo farmers back RICK BAYNE

THE REOPENING of two processing

plants in South Australia will give local farmers a fresh choice for their milk.

United Dairy Power (UDP) closed its Murray Bridge and Jervois plants in April but new owners, Adelaide-based Beston Foods, plans to have them revived by September.

Now Beston Foods needs to attract milk producers back to the fold and local farmers hope this will mean extra incentives.

Beston Foods executive chairman Dr Roger Sexton said he was confident the plants would be successful but the first task was sourcing enough milk.

“Our immediate challenge is to get the milk back,” Dr Sexton said. “When it closed it was processing 100 million litres and farmers obviously had to put their milk elsewhere.”

Dr Sexton said Beston Foods was working with the South Australian Dairy Farmers Association and wanted to lure local farmers back to a local processor.

“We want to get it back to at least 100 million litres as quickly as we can,” he said.

After the closure of UDP, several farmers in the area moved to Warrnambool Cheese and Butter on contracts of varying lengths.

“Some signed contracts for three months, six months and some for longer but we’ll have to work with them and we’re certainly hopeful farmers will support us,” Dr Sexton said.

He added that there were good prospects for the plants with plans for significant investment and a ready-made market for the newly rebranded Best and Pure Foods products.

“The business has been there for 46 years and this will be the first time for a long time that it’s owned by locals,” Dr Sexton said.

“We have plans to invest substantial capital to improve the Murray Bridge and Jervois plants and expand them over time as well.”

Beston Foods is looking to raise $100 million on the stock exchange. The food business also has meat, seafood and health food products. The $100 million target is for expansion across all four investments, not just dairy, and Dr Sexton was unable to release specific details of planned dairy works.

Beston Foods has subsidiary compa-

Beston Foods has purchased the former United Dairy processing plants in Murray Bridge and Jervois.

nies in Thailand, Bangkok, China, Vietnam and Brunei and will be exporting products out of Murray Bridge and Jervois to those markets.

“We have significant orders already in Thailand and China for cheese products,” Dr Sexton said.

Beston Foods aims to re-start the factories on September 1. “We will have

some milk from our own farms so we’ll start with that and hope to source as much other milk as we can by that date.”

Dr Sexton said the recent Free Trade Agreement had boosted confidence in agricultural exports. “We’ve seen what New Zealand has done overseas on the back of their Free Trade Agreement and we can do similar things over the next

five-10 years as our agreement comes in,” he said.

“We invested substantially in agriculture over the past three years in any event, but the announcement of the Free Trade Agreement has just boosted confidence even further in what we can achieve, although it’s not going to happen immediately.”

Beston needs to reveal price soon to attract suppliers RICK BAYNE

SOUTH AUSTRALIAN Dairy Farmers Asso-

ciation president David Basham said the revival of the former UDP plants by Beston Foods was good news for local farmers and the industry.

However, Mr Basham said farmers’ decisions to move back to the local

processor would be influenced by price.

“The price will have to be right,” he said. “Farmers will need an incentive to move across to a new company; especially with the uncertainties and the history that has been around the factories.

“People will want some financial reward.”

Mr Basham said to have no manufacturing in the

Adelaide region, before Beston Foods’ decision to reopen the plants, was certainly a concern.

He said there was a lot of discussion and interest from local farmers about the plans.

“We’re very pleased that it’s happening.

There’s certainly interest and people are trying to clarify when it’s likely to be available,” Mr Basham

David Basham

said.

Local farmer James Stacey welcomed the additional player and hoped the new plant would bring fresh competition.

He added that farmers were still waiting for information.

“I’ve had a lot of farmers asking what’s going on with Bestons and when they might be starting because we’ve got contracts to sign or not to sign,” Mr Stacey said.

“It’s good if Bestons are going to start taking milk and processing it so we have some competition from a player that’s not a liquid milk player and has a facility up here.

“They need to be actively talking to farmers to convince people to get on board.”

Mr Stacey was one of those to move to Warrnambool Cheese and Butter and said he was open to discussions “but I’m not going to swap unless they pay more”.

He said that local farmers were looking for clarity.

“Most farmers will be committing to a factory soon.

The pricing structure of step-ups means that if you leave before the end of the year you’re not going to get your full payment.”

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DAIRY NEWS AUSTRALIA JULY 2015

8 // NEWS

Western Dairy takes on R&D from WA Government WESTERN DAIRY is

now responsible for all West Australian dairy industry research and development, after taking over the coordina-

tion of dairy R&D from the Department of Agriculture and Food of WA (DAFWA).

It’s the latest step in the dairy industry’s move

towards ensuring research and extension continues as State Government departments cut funding to these roles.

Dairy Australia has

employed more RD&E officers in each state over the past two years.

A total of $1.575 million has been committed by Dairy Australia,

through Western Dairy, and the State Government towards the Western Dairy research hub.

Dairy Australia will invest $975,000 and the

Look forward to this calving season!

Department of Agriculture and Food will contribute $600,000 over three years.

Western Dairy executive officer, Esther Price, said following DAFWA’s advice it intended to undertake a staged exit from research, the Western Dairy board together with Dairy Australia felt it was critical that research capability was maintained in the west.

“A solution was initiated with DAFWA whereby Western Dairy – or WA dairy farmers in effect – would take on the R&D functions previously held by DAFWA,” Ms Price said.

The hub, based in Bunbury, will deliver all dairyrelated research activities for WA. It will employ three full-time staff, led by current dairy industry development specialist Rob La Grange.

It will be administered

by Western Dairy’s strategic partner, South West Catchments Council.

Former DAFWA research scientist Ruairi McDonnell has swung over to the hub as one of three full-time employees, as has junior research officer/extension coordinator and former dairy farmers’ daughter, Jessica Andony.

Both Jessica and Ruairi competed highly successfully in the acclaimed Dairy Research Symposium emerging scientists award recently. Jessica was overall runner up in this national competition while Ruairi was awarded ‘best technical paper’.

The new system enables Western Dairy through its administration partner South West Catchment Council, to contract a number of others to undertake project specific work.

The hub will utilise the knowledge of former DAFWA scientists.

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MURRAY GOULBURN has attributed its low float price, with special trust units to debut at $2.10 each, to the downturn in global dairy markets.

Murray Goulburn was partially floated on the Australian Securities Exchange on July 3.

Its special trust units were fully subscribed, but at the lower end of the indicative price range of $2.10$3.20 a share announced in the co-op’s prospectus released late May. MG Chairman Philip Tracy wrote to the co-op’s suppliers days before the float, attributing the initial low float price to “global events of the past week”.

He said a $2.10 final unit price after the institutional book build implied a total market capitalisation for the cooperative of $1.2 billion.

“In this environment, we are very pleased that the IPO has been fully subscribed, albeit at the low end of the indicative price range,” Mr Tracy said.

“We believe the strength of demand for Units in the MG Unit Trust is testament to the quality of our business and a further endorsement of MG’s growth and value creation strategy to maximise farmgate milk prices and future earnings.

“This strategy is clearly delivering results, as evidenced by MG’s ability to pay a farmgate price of $6kg/MS and above for the past two seasons and our forecast Available Weighted Average Southern Milk Region Farmgate Milk Price (FMP) of $6.05kg/MS for the 2015/16 season.”

Mr Tracy said MG would now have the capital it needs to deliver its plans to grow the business both domestically and internationally.

DAIRY NEWS AUSTRALIA JULY 2015

NEWS // 9

SA dairy fund announces first project funding designed to help attract crucial outside investment in the State’s dairy industry are among the first to be funded by proceeds from the sale of South Australian dairy farmers’ own milk brand, SADA Fresh.

The new South Australian Dairy Industry Fund is providing a total of almost $60,000 to four projects this year in its first round of funding.

Fund chair Dennis Mutton said an obvious starting point for the fund was exploring ways to make the South Australian dairy industry more attractive to global and national investors.

“We need this investment to not only expand our farms and the number of cows being milked, but to build the processing sector and open up new markets for premium products, that will in turn offer farmers more security and lead to them being paid more for their milk,” he said.

“We know there is enormous investor interest generally in the Australian dairy industry, especially given the Free Trade Agreement with China and growing consumer demand in Asia.

“SADA Fresh has started exporting milk to China and the Midfield Group has announced plans to open a new processing plant near Penola, but we have some work to do if we want to turn more opportunities into reality here in South Australia.

“Two of the projects we are supporting will give us some of the tools we need to unlock that potential.”

In the first project, the fund is providing $17,600 to develop a document that will give investors key information about the industry in SA and what it has to offer.

It is being prepared by leading Melbourne-based dairy industry analyst and adviser Stephen Spencer, with input from the South

Australian Dairyfarmers Association, Primary Industries and Regions SA (PIRSA), the Dairy Authority of SA and DairySA. “We need something we can put on the table upfront to help secure investors’ attention - a value proposition that takes their interest to the next level. This document will give them the initial information they need to see that it is worth taking a harder look,” Mr Mutton said.

The Fund is also providing up to $3300 towards the cost of staging last month’s South East Dairy Investment Seminar, which is exploring alternative sources of finance to help dairy farmers expand their operations, and to increase their appeal to potential investors.

Another $22,000 has been awarded to a project exploring the benefits of variable rate irrigation technology, which is already used in horticulture but yet to be taken up

by South Australian dairy farmers.

The project is being funded because of its significant potential to reduce water and energy use and improve production, benefiting both farmers and the environment.

Due to be completed by December, it is being cofunded by DairySA, the SA Research and Development Institute (SARDI) and Natural Resources South East.

The final project is an intensive three-day program designed to improve the skills and resilience of young South Australian dairy farmers so they are better able to contribute to building successful farm businesses.

Organised by DairySA, the project has been given $16,500 because of its potential to develop the next generation of farmers and help secure the future viability of the dairy industry in this State.

“The Fund Board understands that this innovative program is the

first of its kind to be run for dairy farmers in Australia and if it’s successful,

it has the potential to be repeated and expanded,” Mr Mutton said.

SADA president David Basham (left) and SA Dairy Industry Fund chair Dennis Mutton pictured in October last year celebrating the first anniversary of the launch of SADA Fresh.

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DAIRY NEWS AUSTRALIA JULY 2015

10 // NEWS

UK farmers quit as milk price falls

All the world wants is a better diet

insisting processors provide up-tofocus on the here and now.

“Their long-term solutions must date market and production data moil with milk price below the cost take a back seat while we focus on so that the whole supply chain can of production.

The National Farmers Union says the immediate crisis; we need them better understand what’s happen450 English and Welsh farmers have to insist on best practice in the ing and how to manage risk in the supply chain, look at growing dairy future.” quit in the past 12 months.

Arla blames its decision on the In another blow to farmers consumption and support more slump in commodity prices. last week, UK’s biggest co-op Arla investment in dairy processing.

Its UK head of milk announced a 3 cents per and member services, litre drop in milk price; “We need all processors to Amirahmadi, said farmers will now receive improve transparency in pricing Ash commodity markets 55c/l. keep going down.

NFU dairy board chair- and stop idly following one “While we have man Rob Harris said Arla’s another to the bottom.” taken significant mitdecision was another igating actions, the body blow to dairy farm“We also urgently need milk impact has been felt on our traded ers, whose “businesses have been in buyers to be more transparent in business and more recently on utter turmoil for 12 months”.

European markets which are also in First Milk, the only co-op 100% pricing.

“Although there are a few clear decline,” Mr Amirahmadi said.

British owned, also reduced its “Unfortunately, these factors price. From July 1, most farmers will formulas employed by milk processors, these are few and far between. are affecting the entire dairy indusreceive 2c/l less for their milk.

“We need all processors to try and despite our efforts it has not Mr Harris said the recent cuts highlight the need for short-term improve transparency in pricing and been possible to buck the trend.”

First Milk outgoing chairman Sir solutions to address the problems must stop idly following one another Jim Paice said while the turnaround to the bottom. happening now.

“This is a dire situation and we actions taken over the last two Farmers need urgent help from industry and Government, he said. need to see the dairy industry pull months have improved our trading position, we also have to factor in the “We need Government to move through this period of volatility.

“Government has a role here in impact of lower commodity prices. away from paying lip service and to

IS THERE a “seismic” shift in food choices and a demand for healthy, chemical free choices with transparency about where the food is sourced?

Or is there a need to push the boundaries on all technologies including GMOs to feed the predicted 9 billion world population by 2050?

Are the above consumer pressures directly opposed, or will new thinking and technologies help achieve both aims?

These were some of the topics explored at the Alltech REBELation Symposium in Lexington, Kentucky, which offered 11 symposia in three tracks (agriculture, business, and food and beverage) and featured 121 speakers. Rural News attended the event courtesy of Alltech NZ. Several key themes emerged in agricultural sessions: the importance of branding; the push by consumers for more knowledge about their food, for health and well-being and sustainability; the increasing globalisation of food trade; the need to feed growing populations; and the role of technology in all those areas.

PAM TIPA

THE UK dairy industry is in tur-

Former US Secretary of State Colin Powell recalled his first trip to China 45 years ago as a young officer. He visited different villages and asked families what they wanted in life; it was always a bicycle, a sewing machine and a radio. That was the limit of their aspiration.

Now 45 years later the country has brought 400 million people out of poverty. Eastern Europe, Asia and increasingly Latin America and parts of Africa are also reducing poverty.

They now want cars, smartphones and computers.

“But above all they want a better diet, they want more protein in their diet.” It has created a massive demand for foodstuffs. But he warned that every business from big corporations to individual farmers was a brand, and needed to protect that brand.

Jim Stengel, former global marketing officer at Procter & Gamble, said brands with a higher purpose resulted in three times higher sales.

“If you want to start a brand today, it must not only have purpose but an ambitious purpose.”

He asked people to look at whether there was a deep sense of humanity in their organisation or business. Empathy was needed to operate with customers.

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WORLD NEWS // 11

Global price recovery delayed until 2016 A RECOVERY in global dairy prices is still on the horizon but burgeoning stocks have pushed out any sustained upturn in the market until the firsthalf of 2016, according to Rabobank’s latest Dairy Quarterly report.

The global outlook reaffirms the bank’s position that a recovery phase is imminent, however it has pushed out the timeframe by at least three months.

Rabobank senior dairy analyst, Michael Harvey, said the market correction has been largely delayed by the removal of EU quotas which has bolstered exportable supplies.

“We are currently operating in an environment where global milk production is rising faster than demand growth, and there is simply too much milk in the market,” he said.

“This has left exporters looking for additional offshore sales at a time when China and Russia have been largely absent.

“While global milk production is set to continue to increase, the rate of growth is expected to slow particularly out of New Zealand and the US, while an improvement in demand should see some rebalancing in the market by early next year.

“However, the rate of initial price recovery will be dampened as the market works through accumulated excess stocks. And as such, we are unlikely to see the stronger upward momentum in prices until the second quarter of 2016.”

Australian farmers have been largely buffered from the weakness in international dairy markets, with the farm gate price for southern export producers maintained at $6kg/milk solids for the 2014/15 season.

Mr Harvey said next season’s milk price remaining in the same vicinity will certainly encourage ongoing investment in the sector.

“Southern producers

the market now finds itself in.”

Mr Harvey says global demand is set to improve over the coming year, with the onset of retail price

Michael Harvey

have generally had a profitable year, which has been bolstered by manageable feed and fertiliser costs and low interest rates,” he said.

“Milk production has also been strong – particularly in northern and eastern Victoria and Tasmania – with yearto-date national milk production up by around 2.9%.

“While most dairy regions have experienced normal autumn rainfall, we are acutely aware of the emerging El Nino weather pattern which could impact pasture growth and feed costs. And this is certainly a downside production risk to the outlook for Australian farmers.”

Mr Harvey said the local consumer market is also facing some headwinds, with slightly higher unemployment and weak consumer sentiment, which is seeing milk production growth outpace local market growth in the foreseeable future.

The Rabobank Dairy Quarterly said that with milk production rising faster than local demand growth across the major export regions – except in the US where much of the growth has been soaked up domestically – exporters have been left looking for additional offshore sales.

“And this has happened at a time when China have slashed their imports and the Russian market has been largely closed,” Mr Harvey said.

“While we have seen an almost buying frenzy from other importers, much of this appears to have made its way into inventory – leading to the considerable stock accumulation that

relief and rising incomes.

As import demand stabilises in China and stocks are whittled away, 2016 brings the prospect of an improvement in

the demand-side of the market to bring it back into balance,” he said.

“And there is further upside if Chinese buying pushes above year-ago

levels or if local stocks prove to be less than what we believe.

“A supply-side shock would also provide a boost for prices, and we

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DAIRY NEWS AUSTRALIA JULY 2015

12 // WORLD NEWS

Fonterra to slash hundreds of jobs PAM TIPA

FONTERRA IS set to cut hundreds

of jobs from its New Zealand head office as it undergoes a major review of operations.

Meanwhile, there’s not a lot of inventory of milk products globally and buyers will have to come back, says Fonterra’s chief executive Theo Spierings.

He can’t promise that will happen in the next month but it will happen at some stage, Spierings said in an interview with Radio NZ last week.

He said a business plan will go to the board this week, then to farmers.

His management team is also heading an ongoing, wider business plan that will lead to “trimmed sails and an aligned crew” and “we will win this race”.

The ongoing review of Fonterra begun in December is led by Fonterra’s own talent with outside consultants with a global view, he said.

Fonterra needs more people selling

in market and fewer people in support and group functions. That would have “consequences” but was part of trimming the sails.

Spierings was asked whether the co-op’s marketing took full advantage of the appeal of New Zealand’s pasture based systems. He said Fonterra’s milk commands a 20-30% premium in markets because of its appeal, but more of that is needed.

Spierings says the co-op’s review is looking at everything. In the last four years Fonterra has increased it milk production by 22%, 80% of which came from within New Zealand and 20% from outside. Fonterra had a 10-12% return on capital from its global business; if it could run that at 13% it would have a very strong performing business.

Spierings was questioned on whether farmers were pushed too hard to boost production, raising their cost structure, and whether the focus should have been on value added premium products.

But Spierings said they require scale

to “have a ticket to the game”. Volume and value must both be boosted.

In this financial year 26% of milksolids were sold on GDT, an increase of 40%; that should lead to a stronger milk price, he said.

However China was playing a waiting game, Russia was locked up and the Middle East had geopolitical troubles. Fonterra needs a clear eye and view of the markets because change in Russia or the Middle East can have a big impact, as can weather in production regions.

While he was concerned about demand, Spierings said Europe’s production had only increased about 1% since quotas were lifted and the US was scaling down.

“There’s not a lot of inventory around. People have to come back… the demand will come back. I am not going to say it will lift in the next month but it will come back.”

Meanwhile all the cash Fonterra can find will be assigned to the balance sheet and hopefully will end up in farmers’ hands, Spierings said.

When the going gets tough... much they knew and in their interest in the minute details of our industry from offices thousands of miles away.

Of course there are the acknowledged WE’VE HEARD the disappointing news on payout levels. Fonterra has updated its macro drivers in the market. Cheap oil is milk solids price down to $4.40 for this past now leading to even cheaper grain because it is no longer needed for biofuel in the US. season.

A few years ago, when we had a big And there is the growing appetite for animal drought in Waikato, and supply dropped, protein in many parts of Asia. Dairy marthe markets were paying more. So maybe kets will multiply, not just increase, during the next few decades. farmers will decide to tighten The contrary pushes of their belts this year, buy less supthese big influencers make for plement and milk fewer cows – increasing volatility. Ten years their own individual decisions, ago volatility was 5% change a albeit with the bank manager year. Nowadays you need 50% looking over their shoulder. It change for it to be regarded as will be interesting to see how truly volatile. and if the markets respond to How do we budget for that? any production fallback.

How do we plan our farming They do keep a close eye on Chris Lewis, Federated Farmers. systems in the face of such big us. When I was overseas a few years ago, on a supply chain look at prod- unknowns?

The next six months are going to be ucts, the traders and overseas buyers and sellers of products told me they read all our tough. The cost of production is a lot higher rural papers online and got reports on the than we are getting paid to cover. I don’t latest dairy statistics in New Zealand every need reminding of the issues, as I and many other farmers know them full well. day. That was their job.

We just need to hunker down and deal They had to work out how to make a dollar from doing business with us and pick with it as best we can, painful as it is, and where our industry was heading with the somehow come out the other end stronweather, milk supply, grass growth, busi- ger for it. ness trends, environment issues, water • Chris Lewis is chair of Waikato Federated rights and so on. I was surprised how Farmers.

CHRIS LEWIS

Check us out Online BREAKING NEWS MANAGEMENT STORIES MACHINERY REVIEWS AND MUCH MORE...

www.dairynewsaustralia.com.au

DAIRY NEWS AUSTRALIA JULY 2015

WORLD NEWS // 13

Arla strengthens footprint in Egypt EUROPEAN DAIRY

co-op Arla Foods and the Egyptian milk processor Juhayna are to form a joint venture to sell Arla products there.

Juhayna Food Industries is Egypt’s leading processor of UHT-milk, yoghurt and juice. But it has limited production of butter, cheese and cream, in which Arla has specialised in the Middle East and Africa.

“It is a good match for

both parties,” says Arla’s senior vice president of the Middle East & Africa, Rasmus Malmbak Kjeldsen.

“Juhayna has a nationwide distribution network, and we are not competing within the same product categories. Together we now get a broader product portfolio, which strengthens the business of both parties.”

Juhayna owns 51% of the new company; Arla

owns 49% and will manage the business. The aim is to start local production in Egypt.

“We have built our entire business in the Middle East through cooperation with local partners,” says Kjeldsen. “Arla excels at making joint ventures succeed, and that is

a business model we will use to establish ourselves in other African markets as well.”

The new company is expected to start with 40-50 employees and to have about 100 within the next year or two.

Egypt (pop. 90m) has a growing economy and

the purchasing power of consumers is increasing.

Consumption of homemade dairy products is falling as people prefer commercially processed and packaged retail products.

Egypt has a limited number of supermarket chains, but countless small

one-person shops whose stock must be delivered to the door. Juhayna has developed a distribution net covering the entire country.

“Our products will now be able to reach all corners of Egypt. Today our business is merely scraping the surface, but [soon] we

will be able to drastically expand our distribution to reach millions of new consumers,” says Kjeldsen.

The new company, to be named ArJu Food Industries, will start sales in October 2015. Arla expects its revenue in Egypt to exceed $144 million in 2020.

Nestle plant in Tianjin, China.

Nestle’s $23m investment in China THE WORLD’S largest dairy company, Nestle is

spending $23 million to boost its ice cream business in China.

The company has opened a new production line in Tianjin to produce its popular Nestle 8Cubes brand, and is increasing its cold storage capacity in Guangzhou.

Nestle 8Cubes, available only in China, is a bitesize snack of individual ice cream cubes with a crunchy chocolate and sesame seed coating.

“This investment will enhance our ability to meet increasing consumer demand for our products,” says Ouyang Kai, vice president of Nestle Greater China region’s ice cream business unit.

“It also underlines our confidence in the long-term dynamics of the China market.”

Nestle has two ice cream factories in China, which produce Nestle brand products as well as the local brand 5Rams.

The 5Rams brand is known for its range of ice cream cones, which include flavours such as purple yam, lychee, and melon, as well as a selection of ice cream sticks in flavours including red bean, green bean and chestnut.

Nestle says it is looking to a long-term sustainable ice cream business in China.

“In the vibrant Chinese market, to expand production capacity and increase investment demonstrates our Chinese ice cream market confidence and determination, and helps us meet growing Nestle consumer needs.

“We constantly strive to meet consumers’ desire for ice cream products of high quality, innovation and safety,” the company says.

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DAIRY NEWS AUSTRALIA JULY 2015

14 // OPINION RUMINATING

EDITORIAL

Meet half way with opening prices

MILKING IT...

In the poo

OUR KIWI neighbours are complaining about prices, but without Western Australia’s help, the NZ dairy industry would really be in the poo - literally.

We say this because dung beetles have been imported from WA to ensure year-round coverage. Without them, well, things were going to get messy.

The first major commercial release of dung beetles to New Zealand farms will occur this spring and further species have been brought in from WA. The first cab off the rank is the humble Onitis alexis alexis.

NZ species are being mass reared but the species from WA will fill gaps in seasonal activity, namely summer and winter. One hundred eggs and larvae were brought in from Australia in February.

Maybe NZ could change their marketing to: Clean, Green NZ – courtesy of WA.

Hangers-on

IT’S A tweet from a NZ farmer but its message would resonate with many in Australia – in good times and bad.

Fonterra is expected to cut hundreds of jobs in response to low milk prices.

Staff first heard the news through the media.

It said the whole company would undergo a sweeping review in an effort to generate more cash for farmers facing a $4.40kg/MS payout this year, after a record $8.40 payout the previous year.

Giving his thoughts for free on twitter was Ashburton, NZ, farmer @ dairymanNZ: “Fonterra job cuts p**s me off, if these people aren’t needed now then they weren’t needed at $8. Window dressing.”

An opinion shared by farmers across the world, we would imagine.

Can’t take a trick

THE QUEENSLAND State Government wants an ethanol mandate in fuel.

The Queensland Dairyfarmers Organisation is against this, fearing it will raise the cost of feed necessary for Queensland dairy farms, particularly the supply of starch which is a vital part of producing milk in this region.

QDO president Brian Tessmann said the much touted dried distillers grain (DDG) which is a by-product of the ethanol industry is of no help in this as starch is the same component that the grainbased ethanol plants use to create ethanol.

“While the fat fibre and protein in DDG has been somewhat concentrated the key feed component for most farmed animals is starch and this has mostly been removed from the meal.

“This is a little like buying half a beast in a butcher shop only to find that the meat has been removed and all you have been left with the skin, fat and bone and the butcher is wondering why you are not happy.”

Advertising Chris Dingle chris@dairynewsaustralia.com.au

Yep, it’s that bad

EVERYONE KNOWS “internet speed” is a misnomer in the country but the VFF has now collated findings from a members’ survey to show how bad.

In Victoria, farmers’ internet access speed is a tenth of that in Melbourne.

One-tenth! That’s dark ages stuff – or dial-up stuff, at least.

The survey polled 500 members from around the state. People in Melbourne are enjoying internet speeds of more than 60 megabytes a second, while the average farmer gets just 6 megabytes a second.

VFF Grains Group president Brett Hosking outlined the anguish of many.

“Poor broadband connectivity not only hampers your business, it can affect the whole family’s ability to connect.”

One VFF survey respondent said: “I have a daughter in year 11, and she has had to go to school with her homework incomplete because of lack of service.”

This city-bush divide is getting worse – and Australia is the poorer for it.

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

WITH FOUR processors announcing their opening prices in the week before the opening of the new financial year, it’s no surprise dairy farmers have again called for earlier announcements.

The mantra from Dairy Australia and the dairy industry is profitability, as it should be.

Profitable farmers can grow their business and increased production benefits the industry, including processors.

Profitable farmers need a complete grasp on every aspect of their business. To then say the crucial element – income – won’t be revealed until a week out from July 1 is ludicrous.

Farmers are realistic. They appreciate how volatile the global dairy market is – but they’re asking to be met half way.

Industry leaders put out the call last month on behalf of the industry.

United Dairyfarmers of Victoria president Adam Jenkins put it succinctly.

“We understand the market is volatile and everyone’s cautious, but I think we should get earlier notice,” he said.

In coming up with solutions, he advocated an indication of a 12-month rolling average, saying it would be good for business “As soon as you get a clearer line of sight you can make onfarm decisions.”

South Australian Dairy Farmers Association president David Basham says it would be difficult for processors to announce prices earlier, but supported the call for lead-up predictions.

It was already done this year by Murray Goulburn.

As part of their capital raising prospectus, the co-op announced in May what they hoped their end of season price would be.

The co-op forecast $6.05kg/MS and it hasn’t changed.

With larger farm loans, farms aren’t the only businesses keen to complete their budgets earlier. Banks want to know what’s happening too, particularly in volatile markets such as the past 12 months.

DairyTas chair, Cheryl McCartie, said the earlier farmers see the opening prices, the better it is for everyone’s planning, and the industry.

Again, it’s about processors and farmers working together for the good of the industry.

That means meeting halfway.

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DAIRY NEWS AUSTRALIA JULY 2015

OPINION // 15

What we won’t see in the Agricultural White Paper JOANNE GRAINGER

AS WE enter the 19th

month since the Federal Government released the Terms of Reference for their Agricultural Competitiveness White Paper, we are told that the release of this new strategic plan is ‘imminent’.

Heralded as a once-ina-lifetime opportunity to improve the competitiveness of our sector, there is significant industry anticipation surrounding the document’s release.

The Green Paper and the recent Federal Budget have provided plenty of

clues of what will be contained in the new plan.

But the document’s value will have to be determined, not just on what is printed, but what is excluded. It is illuminating to consider the likely omissions from the Government’s new policy direction.

The Agricultural Competitiveness White Paper is unlikely to contain policy direction in relation to unexpected climatic events.

The Federal Government’s role in helping farmers recover from, and prepare for, natural disasters is likely to remain

unarticulated. A strategic approach is required to the enduring need for Commonwealth assistance measures, such as the Natural Disaster Relief and Recovery Arrangements, in times of severe climatic shock.

The broad and complicated tax system facing Australian farmers is also not expected to receive much consideration within the White Paper.

It is likely that more detailed analysis of distortionary and duplicative taxes will be deferred to the White Paper on the Reform of Australia’s Tax System, due later this year.

No matter which strategy document the reforms are outlined in, it is crucial that full consideration be given to long-term productivity gains that would be derived from the streamlining of taxation.

Thankfully, unlike the previous Government’s National Food Plan, this White Paper will not contain lengthy consideration of peripheral topics such as nutrition.

The impending White Paper will be unlikely to contain policy solutions aimed at better utilising existing water infrastructure assets, instead focusing on large scale new

projects designed to open up new areas for agricultural development.

With some existing irrigation schemes in Queensland having utilisation below 50%, it is hard to justify the construction of new and expensive dams in the short to medium term.

The State’s current irrigators need better policy solutions to bring their costs of production down, to enable them to increase productivity.

The most effective approach that can be pursued to support growth for the agricultural sector is to enact policies that place

downward pressure on electricity prices.

It is highly unlikely that any reforms will be articulated in the White Paper that will directly achieve this outcome.

Although it is positive to see that a bipartisan deal was reached last week to reduce the Renewable Energy Target, limiting the electricity cost burden on farmers.

Of course, the White Paper will not provide any answers on the effect of a high Australian dollar on our international competitiveness.

Although it will be disappointing if some of

these crucial areas requiring strategic direction are omitted from the final White Paper, the document is likely to contain many significant and meaningful initiatives.

The true test of the White Paper will be if these initiatives are coupled with tangible actions and an achievable delivery schedule.

The issues facing the industry have been well studied and documented, the time to take action to address these issues is now upon us.

• Joanne Grainger is the president of the Queensland Farmers Federation.

Claims of support another kick in the pants to farmers BRIAN TESSMANN

DAIRY FARMERS all around Australia have been stunned by the claims accompanying the Woolworths sponsorship of the AFL competition that Woollies supports Australian dairy farmers.

What is even more galling is that the product they are promoting in their television adds is the very product, that being $1 per litre milk, that has done so much damage to the domestic milk market and particularly the livelihoods of dairy farmers in states such as

Queensland, NSW and Western Australia.

In fact since the introduction firstly

by Coles, then Woolworths, of $1 per litre milk on Australia Day 2011, over 150 dairy farmers have left the industry in Queensland alone, when we have been short of milk to meet the needs of Queenslanders.

The question must be asked of Woolworths that if their support is in any way real, is their support of Australian farmers manifesting itself in better farm returns across all dairy farmers as well as the whole industry and value chain?

In making this claim it is simply not

good enough to select out one or two or even five or six of a state’s dairy farmers and do some sort of special deal for a limited release brand with them, while at the same time being part of such a destructive marketing program as $1 milk.

I think Woolworths, along with their rival Coles, real feelings toward dairy farmers is better demonstrated by their action in regard to the recent Senate review of the voluntary supermarket code of conduct.

While this Code was drawn up by the supermarkets they refused to appear at the Senate review into the code

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and made it clear that if the powers of the small business ombudsman were extended to oversee, this voluntary code, then they would not even sign their own code.

As a result the majority of the Senate Committee agreed to the code going forward as is.

Importantly though, four Nationals Senators being Matt Canavan, Barry O’Sullivan, John Williams and Bridget McKenzie made it clear in their minority committee report that if the code was to be in any way effective then the government needed to appoint an ombudsman to administer the code and

ensure compliance if the large supermarket duopoly fails to embrace its principles.

For its part QDO believes this voluntary Code needs to be administered by an official ombudsman.

But if Woolworths and Coles cannot stand even the small amount of oversight by the Small Business Ombudsman then the government should see the folly in this path and immediately introduce a mandatory Code of Conduct to help restore some fairness to the market for all producers.

• Brian Tessmann is president of the Queensland Dairyfarmers Organisation.

Dairy News AUSTRALIA july 2015

16 // markets

No free kicks from supermarkets Moody’s expects Aldi’s east coast the gun for a number of years over their growth to continue at 5% to 6% in treatment of suppliers and farmers. store numbers a year over the next There is no doubt supermarkets are five years - about double that expected for Woolworths an important channel and Coles who will to the dairy industry’s remain focused on single most important getting higher sales market – Australia. out of their existing According to Dairy floor space.

Australia figures, Last month’s of the roughly 60% exit stage left from of production sold Woolworths CEO domestically, around Grant O’Brien and 58% of product volume the announcement and 52% of drinking fresh agenda of 1200 job cuts is milk is sold through the jo bills indicative of the grocery channel. pressure being felt by When the talk turns to supermarkets, most farmers could this previously unassailable retailer.

Share values in the former be forgiven for picturing the head honchos in Coles’ Tooronga Road stockmarket darling have dropped or Woollies’ Baulkham Hills head 30% in the past 12 months on the office, smoking an expensive cigar and back of lacklustre sales results – stroking a white cat while they crush particularly in non-supermarket divisions. suppliers and rake in the dollars.

However, in the all-important It’s true that Australia’s major retailers are profitable by global supermarket division Woolies has standards, Woolworths’ 2014 earnings lost its edge – same store sales growth margin of around 8% is nearly double is virtually flat, and rivals Coles the average of its international peers and Aldi have outmanoeuvred and (at around 4.2%), while Coles’ margin outperformed the market leader.

Prior to O’Brien’s departure of 5.3% is also relatively high.

But increasingly these two big Woolies had unveiled a three-year players aren’t getting things all their strategy, which included the funding of price cuts which are aimed at own way.

The dominance of Coles and fending off the assault from hard Woolworths is widely reported, discounters - the ascendant Aldi, the although the “80% share” figure that small Costco chain and potential new is usually bandied about is overstated. German entrant Lidl as well as Coles’ Analysis from Nielsen and Moody’s “Down Down” mantra.

This strategy will be rewritten by released in March this year put the “duopoly” share of shopper spending a new team if the perception of ‘best value for money” is to be regained. at 60% by value for FY2014.

As the dust was settling around Far from a duopoly in fact, but still with huge influence. German Woolworths last month, Coles interloper Aldi has steadily increased announced a massive review of its its share to 8%, nipping at the soft own ranges, including an overhaul underbelly of the Coles and Woolies of products which solely rely on combined share with an offering that discounts to achieve sales.

Coles says the 24 month-long is purely about saving money.

Supermarkets have been in

Woolworths and Coles will be looking for ways to stay ahead of the disruption threatneed by Aldi’s simplified, streamlined business models.

review will make more space available on shelves for new and innovative brands.

It sounds good in theory, and it least doesn’t rest completely on selling things dirt-cheap, but any brand owners not growing sales will be urgently focusing on performance.

With a history of taking leads from UK supermarket trends, our retailers are no doubt watching the struggles of the big four - Tesco, Morrisons, Sainsbury’s and Asda - as the same German discounters completely re-shape the sector and become mainstream.

While cash-strapped UK shoppers initially tried the discounters in the wake of the GFC, they have warmed to the offering, and attempts at price matching have resulted in a loss in sector profit margin that is likely to be permanent.

According to Moody’s rating agency

in their 2014 report “Consumers are voting with their feet and are more inclined to do their primary grocery shopping at discounters than at any time in the past.

We don’t anticipate that the value or quality perception of the discounters will deteriorate as disposable incomes improve and as a result we believe Aldi and Lidl will continue to gain market share.”

Both the locals will be looking for ways to stay ahead of the disruption threatened by Aldi (and potentially Lidl’s) simplified, streamlined business models.

So while the Coles and Woolies dominance has been challenging, will a future with more players be better for suppliers and farmers?

Increased competition is good, right? The question is who will it really be good for? Consumers have essentially enjoyed zero food price

inflation over the past 5 years, as Coles and Woolies have slugged it out on price, egged on by Aldi’s growth.

Enter Lidl, and the imperative to keep prices low to compete with another hard discounter would presumably be even stronger.

There will be no taking the foot off the accelerator for our supermarkets, and everyday staple items like milk and cheese will remain at the core of value-focussed strategies to protect and increase market share.

Growing volumes and unit values for dairy products in this environment will get tougher.

Investments in product and marketing innovation will be critical if the domestic dairy market is to continue to be a stable alternative to the volatile export trade.

• Jo Bills is a director of Melbournebased firm Fresh Agenda. (www.freshagenda.com.au)

We’re not there yet!

Freshagenda’s Australian dairy

export index finished June at 153 points, losing 9 points in the month, as dairy commodity spot prices kept weakening and, crucially, the $A remained under US$0.77 at month-end after a wild ride in the prior month.

The index is at its lowest point since mid-December 2014.

The month of June felt like a re-run of several of the prior months with further value losses across the board in major commodity groups – powders continuing to slide with abundant global stocks and cheese is getting

caught up in the slide.

Everyone is still hoping we’ve reached the bottom of the cycle, and justifying that based on how low prices are compared with past experience.

There’s even been some naïve commentary on GDT results to the effect that “the market must be getting better ‘cos it didn’t fall so far this time”.

The big difference here is that the period of low prices (usually the best cure for low prices) haven’t helped clear the decks of stockpiles, the answer only comes from looking ahead not at what the chart did last time.

Sadly there is probably more bad news to come.

More milk powder is on the way with the surge in output from farmers in several European countries relishing the ability to produce what they like without the quota stick hanging over their farm decisions.

EU farmgate prices (for many sitting well above 30 euro cents or close to 40c/litre in our money) and feed grain costs continue to support growth in milk. The scary thing is that local farm consultants reckon expansion can keep coming if their milk prices stay above 25 euro cents.

This comes at a time

when the EU’s economy is flat, so that spending on dairy products has slowed meaning all this extra production is likely to be destined for export and stockpiles Meanwhile the US keeps pushing out more milk despite the increasing scale of the western drought. Other unaffected states are churning out milk at a faster rate, helped by very cheap feed, to offset the losses in California. Thankfully, Americans are back on a dining out binge and eating more cheese.

To make things more interesting, the global economic situation looks

increasingly perilous with the uncertainty over effect that the Greek debt debacle will have on the finance sector and on currencies.

That will take a long time to play out.

The index is a lead indi-

cator 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 trans-

late 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/

DAIRY NEWS AUSTRALIA JULY 2015

MARKETS // 17

New investors show their faith in Australian dairy Dairy NewS aUSTraLia june, 2012

agribusiness // 17

Export demand remains strong

THE LATEST Dairy Australia National

Gina Reinhart (second from right) at the

November announcement of her joint Dairy Farmer Survey (NDFS) showed investment with Chinese partners in the Queensland dairy industry. that farmers in many regions are investcents/litre in March (AUD 41c/L) to 28 With season 2011/12 only a few incremental change in milk production (year-on-year) Euro cents/litre (AUD 36c/L) in April. from in ending, attention ing, or planning toweeks invest their busi-is now Profit margins are under pressure in the focused on 2012/13 milk prices as farmnesses, as confidence in the future US, and in NZ Fonterra has announced ers consider strategies for theof coming the final payout for the 2011/12 season year. In somerobust. domestically-focused the industry has remained has been cut from NZ$6.75-$6.85/kg MS regions, renegotiated contracts incorgLobaL impacT Dairy processors alsoandbeen to NZ$6.45-$6.55/kg MS (AUD$4.96poratinghave lower prices reduced ‘tier JohN DropperT $5.04). access are undermining farmer investing heavily,one’ with all major playEffectively, global dairy markets are confidence and supply stability. For GLOBAL IMPACT rebalancing. Lower prices will both private label contracts and profarmers in export-oriented Shifts inAMY ers investing tensmany of millions of dollars BELLHOUSE slow production growth and stimulate regions, a lower price outlook relative to cessor rationalisation have seen milk in new and upgraded stainless steel. demand, and as this occurs we will ultithe current season not only adds to the companies adjust their intake requiremately see a price recovery. Key factors ments and pricing to meet the changchallenges of doing business, but seems Increasingly however, farmers and to watch on the global scene will be the to contradict the positive medium term ing demands of a highly pressured retail including Coon, Mil Lel, Barrel incumbent milk processors aren’t the rate at which milk production overseas marketplace.

Lower contract pricesCracker and outlook of Asia-driven dairy demand slows in response to lower prices, the a lack of alternative supply opportunigrowth.

Fred Walker.’

Saputo entered the only ones backing the future of the and Dairy Australia’s indicative outlook ties present challenges in a market with flows. 2012 milk production in the US those in south-east Asia and the Middle impact of the current financial worries industry inDespite late 2013, ulti-4% on 2011 for the year to East maintain consistently higher eco- on consumer confidence, the path of industry with investment is up around capacity. for southerndollars. farm gate milk prices Australian – limited manufacturing these challenges, the underlying domes- April (leap year adjusted), whilst early nomic growth rates that support China’s economic growth, and the value published in the recent Dairy 2012: Sitmately winning a bidding war for conNews that Gerry Harvey, one of Ausuation and Outlook report, is for an tic market is stable, with steady per-cap- data suggests EU-27 milk production increased dairy consumption. How- of the Australian dollar.

WCB. tralia’s richest people, invest up to trolitaof Demand for exported dairy proddairy consumption and a growing finished the March 2012 quota year up ever, the surge in supply has outpaced openingwill price range of $4.05-$4.40/kg ucts remains a positive and will conand a full year average price range population providing a degree of cer- 2.3% on the previous year. New Zealand demand growth in the market.

United Dairy Power (UDP) was put $80 million into anMS intensive dairy farmThis situation has seen the scales tinue to grow with the middle class in between $4.50 and $4.90/kg MS. The tainty beyond the current adjustments. production is widely expected to finish this season up 10% on last year - a huge tip in favour of buyers in dairy mar- large emerging markets such as China, In the seasons following 2008 considers theis wider market inthe late April, having ing operation nearreport Shepparton one of pic-into administration ture and summarises the many factors financial crisis and subsequent com- market influence given 95% of NZ milk kets, with commodity prices retreat- with changes in diet and with increasing been in price receivership since year.Argentina is also enjoy- ing steadily over recent months. Butter urbanisation - and also in conjunction many recent developments indicating is exported. modity recovery, farmers in last at play; the key theme of the current sitingCaboolsolid production growth, but a sig- prices are down some 30% from their with global population growth. Locally, export-oriented regions acquired have seen solidthe uation being thatin of re-balancing Goulburn a wider level of confidence the longin theMurray global supply growth (see chart) - with nificant supply gap in Brazil prevents 2011 peaks, whilst powder prices have the domestic market is supported by a dairy supply chain. ture cheesecompetitors brand, inand reportedly, willadditional milk from leav- lost more than 20%. Farm gate prices growing population and stable perterm viability of dairy. much of this higher-cost the NorthIn regions of Australia focused on have subsequently been reduced in capita consumption. Whilst the dairy America. ern Hemisphere amongst those expand- ing South drinking milk,boss’s many farmers allowing Dutch Mill to source milk from move the cheese cut-and-shred equipThe Harveyproducing Norman Despite wider economic uncer- most exporting regions. The average market is currently a challenging place face a re-balancing market in the form ing output as their margins increased. “accredited farms”. ACM produce UHT ment their Cobram site. announcement, coming shortly This to season, favourable weather con- tainty, demand has remained resilient basic farm gate price for milk in France to be a seller, all signs indicate that balof renegotiation of after supply the contracts and reduced access to ‘tier one’ supply. ditions have further enhanced milk as importing countries like China and for example, dropped 12% from 32 Euro ance will ultimately return. milk in Shepparton through Pactum Burra Foods picked up UDP’s milk news that Beston Global Food Company “News that Gerry Harvey, one of Dairy Group (a joint venture with Freehad purchased the remaining assets of depot at Poowong. Initially, no buyers Australia’s richest people, will invest dom Foods).

United Dairy Power (UDP), concludes a were found for the South Australian European pension fund-backed busy first half of 2015 for corporate dairy processing plants at Murray Bridge and up to $80 million into an intensive Ace Farming has recently purchased investment. Much of this has originated Jervois. dairy farming operation near austraLian DairY, ASEAN-Australia-New two farms in northern Victoria to add However, these have been acquired from previously outside players. rice and wine exporters to Zealand FTA (AANZFTA).

Shepparton is one of many recent to its portfolio, whilst ASX listed Ausin recent External capitalMalaysia will form large part“Protectionist senti-weeks by Beston Global Food are the a biggest ment over agricultural winners in a free trade developments indicating a wider level tralian Dairy Farm Group plan to purCompany. of Murray Goulburn (MG)’s new capigoods is rife and growagreement (FTA) signed chase another three farms in south-west company plan tal structure, which hasthe garnered ing across theThe globe, Adelaide-based so toterm provide portion pack between two coun- much austraLian FooD of confidence in the long viability in this context it is pleas(200-330ml) configuralast month. company Freedom Foods Victoria, doubling its milk production. to invest to upgrade the factories, raise media attention tries for dairy in recent ing Australia has managed tion for beverage prodThe deal, signed after Group Ltd is to build a of dairy. “ to forge an agreement seven years of negotianew milk processing plant ucts.

The company already owns four farms, production capacity, and introduce new times. with Malaysia that has The NSW location will tions, allows a liberalised to cash in on growing and has entered into conditional agreefor Asian markets. The factoThe target datelicensing for the unit trustdealt to withproducts some sensiprovide access to the most arrangement demand in Asia. tive agricultural issuesscheduled to re-open in Sepfor Australian milka listThe plant, to be built in sustainable and economic ments for the additional three, trying ries are be listed on the ASX is Julyliquid 3, at not effectively covered by exporters and allows southeast Australia, will be source of milk. Pactum has to raise up to $17.7 million for the purapproval), in Warrnambool have recentlythereceived tember. ing price of $2.10 access per unit.

Unitholders AANZFTA,” says Fraser. strong links to the Austra- a consortium for higher value first Australian and green-regulatory Sealing the deal: Malaysian trade minister Mustapha Mohamed the processor industry and will Pastoral Comretail products. fields expansion in consisting UHT in lian dairy chases. of Leppington Meat Midfield Group parliamentary approval – but construcwill have an economic exposure to MG’s“While under with Australian counterpart Craig Emerson after signing the deal.

AANZFTA agreement expand its arrangements It guarantees Aus10 years.

Long term confidence to invest pany, New Hope and Freedom tion of that facility will wait until thewholly advanced business but will not voting rights most of Australian agri- its previously announced with dairy farmersDairy for tralianhave wine exporters Freedom’s but also through technical Despite the compleers through streamlining culture’s key interests supply of milk. The new best tariff treatment owned subsidiary Pactum is supported by industry growth and Foods.

The Moxey family will continue Penola facility is operating.

The two plans to enter the milk processing in relation to MG the or its operations. or so called ‘behind the tion of this agreement, of rules-of-origin dechad tariffs bound at zero, plant will increase scope Malaysia gives any counAustralia will run the to run the operation, while acquiring a profitability in the short term. With the plants Midfield’s dairy border’ restrictions.”announced Saputo-controlled Warrnambool much remains to be donebring dairy andindustry. rice are two sec- laration processes and for Australian milk supply try. It also allows open plant. Some of its products The FTA was signed on for Australia’s farmers to improved marketing – value-added, sustainable access arrangements from tors where incremental be sold in Australia. major processors opening the 2015/16 strategic stake in AFMH. investment towillThe around The company intends to build an manufacturing Cheese & Butter (WCB) lifted its presMay 22 in Kuala Lumpur tap into the full potential arrangements for certain market access improveand export focused.

2023 for Australian rice company says by Australia’s Trade and of the Asian region and commodities. ments have been negotiInitially the plant will Australian Conwith all tariffs eliminated given Asian consumseason with milk prices at $5.60/kgMS Growing processor ence in consumer branded cheese by export-oriented milk powder facility $130 million.

Competiveness MinisThe Malaysian market beyond. ated under the Malaysian produce 250ml and 1L by 2026. ers’ rising incomes and and flagging a close in the region of solidated (ACM) Australians Rinepotato at the NFF Wealthy acquiring the ‘everyday cheese (EDC) ter Craig Emerson and his Gina He says will is worth about A$1 bil- factory FTA. at a former McCain UHTMilk packs from a processand Thailand’s The National Farmers’ improving diets, demand MalaysianHarvey counterpartare notthere now throw its attention lion in Australia agricultrade deal was line capable of 100 milFederation says the trade grow for Dutch qualMill intend to buy farms and $6.00/kgMS for the third consecuhart and Gerry thewillonly in southeast South Australia. business’ of Kirin-owned Lion Dairy &“ThisPenola towards ensuring agricul- Mustapa Mohamed. tural exports – including also particularly imporlion L. The processing and deal will improve interity dairy products from lease to proven dairy farmers who tive year, there may be more big ticket ones to invest at the farm level.

Itsuch is expected be operational in front Drinks (LDD). national market access Emerson says Australia ture remains and seeking being itsto fourth-largest tant for sectors packaging plant will emit low-cost production bases them will be asis well-positioned centre in completed FTAs Farms sugar exportwith market and as dairy that have2016, been carbon, useto lesspurchase water, for Australian such as Australia, lack thelesscapital their own announcements to come.

Moxey set to be acquired by whose July starting 160 million The EDC business cutsagricultural and wraps in the Malaysian market fifth-largest wheat export with South Korea, Japan, facing a competitive disand be more energy-effigoods. milk is well regarded. property. aim of the joint venture • Amy Bellhouse is industry analyst with the asAustralian Fresh Milk Holdings per year.market.

Plans for another powder cheese manufactured WCB is litres as Malaysia’s closest tradChina and Indonesia in Malaysia cientThe than equivalent “Afterby seven years ofthatadvantage The new plant will ing partners in ASEAN, With an annual economic immediate priorities. compared with New ZeaUHT facilities in Austranegotiation, the NFF is is to broaden ACM’s supply base, while Dairy Australia. consortium (AFMH) (subjectallow to Pactum FIRBto meet plant and enlarged cold storage facility sold under ‘everyday cheese brands “These are all markets and in some cases better. growth at about 5%, land which already has lia and SE Asia. Pactum under no illusion of how growing demand for

Malaysia FTA benefits dairy Freedom

Foods plant targets Asia

challenging it has been to complete this FTA with Malaysia,” NFF vice president Duncan Fraser says.

The FTA will fill a number of gaps within the

016-017.indd 17

a completed FTA with Malaysia in place.”

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

Malaysia forms an important part of the ‘Asian Century’ story and the opportunity this presents for Australian agricultural producers, says Fraser.

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

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

UHT dairy milk, and add to capacity for valueadded beverages at its Sydney factory. Pactum is expanding its capabilities at the Sydney plant

expects site preparation to begin in October 2012 and start-up by mid-2013.

Pactum makes UHT products for private label and proprietary customers.

6/06/12 1:41 PM

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Dairy News AUSTRALIA july 2015

20 // management

Debt reduction pays dividends cameron wilson

SINCE BUYING their first dairy farm on the outskirts of Wagga Wagga in 2008, paying down debt and increasing business equity has been the top priority for Simone and Neil Jolliffe.

It’s been a strategy made tougher by unfortunate timing.

The couple immediately endured the milk price collapse of the global financial crisis before losing the bulk of their pastures to flooding in 2012.

At times they’ve had to cut production to reduce labour and feed costs, but ultimately they feel it has been a successful approach to preparing a young business for future growth.

The 360ha property fronts the Murrumbidgee River at Euberta 10km west of Wagga Wagga.

They currently milk 230 cows all year round with between 30 and 40 dry at

Who:

Simone and Neil Jolliffe Where:

Euberta via Wagga Wagga What:

Increasing equity

any one time.

The 100% Holstein herd produces about 2 million litres a year at an average of 9350 litres and 665kg of milk solids per cow. The cost of production is about 36 cents a litre.

About 75% of the farm income is derived from milk, but the business also includes 40 bulls for commercial breeding and the sale of up to 80 excess milkers each year.

The couple describes their business as “the baby” of the big dairy farms in a district better known for cattle and

Neil and Simone Jolliffe hope to double production in three years.

sheep. There are just 12 dairy farms in the area supplying the nearby Fonterra factory that manufactures the Riverina Fresh

The Holstein herd calves continuously through the year.

brand.

Mrs Jolliffe says milk production has been as high as 2.9 million litres but their determination to reduce debt has led them to cut production when the milk price dropped.

“Back in 2013 we were milking 280 at the time, we sold 80 head and got rid of some staff, we did it tough for 18 months,” she said.

“We just wound things back to really simple grass based, high cow-to-labour unit ratios.

“With the lower stocking numbers that we’re at now it’s very much driven by home-grown feed.”

About 65% of feed is produced on the farm.

Pastures are mainly sown to lucerne with some prairie grass and annual ryegrass and cereals. The mix is designed to offer growth

for as many months of the year as possible in a region that experiences both extreme heat and extreme cold.

A total of 80ha of the property is under irrigation with the water coming from a 425 megalitre bore licence and a 290 megalitre entitlement from the river. There is also an annual rainfall average of 550 mm.

The grain component of the feed consists of wheat, corn and canola meal from within a 10km radius of the property.

After seven years of cost cutting and building the business equity from 42% to about 58%, the couple now feel the time is right to expand.

They plan to double production in the next three years by growing the herd size and increasing

milk per cow.

“I guess our focus has been improving equity position at the end of each year, which we’ve always been able to achieve,” Mrs Jolliffe says.

“Long term we’ve always known that we need to invest capital back in the farm to take it to the next level and so its paying the debt down to create the equity that we can then draw back on.

“But we’re now in a position when we’re ready to ramp it back up again.”

Mr Jolliffe says the farm needs to get bigger both for family and financial reasons.

“A lot of the sacrifice has been around labour, and therefore putting in a lot more work ourselves and therefore you sacrifice your family time and your holidays and those types

of things,” he said.

“We’re at an awkward point where we are too big for an entry level farm but it’s not big enough for someone to do an expansion on.

“It’s building it up that level so if one day I do want to sell it’s an attractive and viable option for someone.”

But even as they double production, Mrs Jolliffe says they will continue to focus on maintaining equity.

“I’m trying to get us into a position now so that when we make a capital investment we don’t go back behind 50% equity.

“At 50% equity I know I can comfortably walk into the bank and say ‘this is my situation can I have some money’, whereas at 45 or less that makes everyone a bit squeamish.”

The cows are milked twice a day in an 18-a-side double-up rapid exit dairy.

DAIRY NEWS AUSTRALIA JULY 2015

MANAGEMENT // 21

Spreading the good word thumb people use actually THE MESSAGE of have some foundation in better nitrogen usage was fact,” he said. being spread at a recent “He clarified some of Focus Farm field day at the misconceptions and Leongatha South. challenged quite a few of Guest speaker for the ideas out there.” the open day at Tim and Key points from the Grit Cashin’s farm was nitrogen discussion Richard Eckard, who included: told the crowd of almost ■ Ensuring cows con100 farmers and service providers that smarter sume any extra grass use of nitrogen was a grown from nitrogen key to better on-farm use.

■ Adjust grazing stratperformance.

Renowned for his egies to maximise ability to communicate benefits of nitrogen complicated scientific application.

■ Be aware that nitroinformation in an easyto-digest manner, the gen can be easily lost University of Melbourne through run-off or as Professor and Director of gas. the Primary Industries Cli- ■ Change nitrogen usage mate Challenges Centre from the fertiliser to said some feed budget farmers have “If you need it to improve become you put it on. efficiency. dependent field Do it because dayThe on increased was also you need nitrogen a chance usage, with- to, not just to catch up out consider- because it is in on Tim and ing the cost progyour fertiliser Grit’s benefit. ress as Focus budget.”

It was a Farmers. message that In the 10 Tim Cashin believes was days preceding, around very well received by the 100mm of rain had fallen big crowd. on the 500 acre farm, “He was fantastic,” he giving people the chance said. to see how extensive “Just his knowledge hump-and-hollow work on all aspects of nitrogen had helped to improve usage and the guidelines paddock drainage. for best practice - he had Mr Cashin said he’s the audience captivated.” pleased with the results so Mr Cashin said he far, but the jury is still out. would be one of many “The middle of winter farmers in attendance who will be the go, you can would re-assessing nitrocome back down and we’ll gen usage after listening to see how it’s looking then,” the guest speaker. he said.

“We’ll be catching up The hump-and-hollow with our practices for plan has been part of the sure,” he said.

Focus Farm strategy that “He spoke really well Tim and Grit have been on what are the potential trying to implement. losses and what can be the Their goals as Focus gains, especially looking at Farmers have included using it as a feed cost. running a “sharper” “His message was that, business (including if you need it you put it on. setting budget and proDo it because you need duction goals and stickto, not just because it is in ing to them), assessing the your fertiliser budget.” genetic material in their Focus Farm facilitator 280-strong herd of mostly Matt Harms said having Holsteins, investigating a speaker of Richard Eckexpansion options as they ard’s calibre capped off arise and creating a better what was “a ripper of a work/life balance. day”.

For Tim, the Focus “He debunked a lot of Farm experience has been the wives tales, if you like, all positive – and made but some of the rules of even better by good sea-

sonal conditions.

“We’ve had ripping season, autumn has been a bit hit and miss, but I certainly wouldn’t be caught complaining

about it,” he said.

The Focus Farm field day was supported by GippsDairy, Dairy Australia and the Australian Government.

The Focus Farm team including co-ordinator John Gallienne, Grit and Tim Cashin, guest speaker Richard Eckard and facilitator Matt Harms.

L A I C E P S T R O REP NEXT ISSUE: AUGUST HAY & SILAGE When it comes to Hay & Silage production, preparation and planning are as important as having the right gear.

To help farmers prepare and maximise the conversion of grass into milk, therefore into dollars, Dairy News is putting together a Hay & Silage Special Report. This will run in the August issue of Dairy News, distributed free to all dairy farmers.

BOOKING DEADLINE: July 29 AD MATERIAL DEADLINE: August 4 PUBLISHED: August 11

CONTACT: CHRIS DINGLE | T: 0417 735 001 E: chris@dairynewsaustralia.com.au

Dairy News AUSTRALIA july 2015

22 // management

Fine-tuning operation under the spotlight Rick Bayne

NESTLED NEAR some

of the biggest vineyards in Tasmania’s Tamar Valley, the Limberlost Dairy at Kayena is out to prove milk can be just as good as wine.

The farm has signed up to the Dairy Australia Focus Farm project and hopes to showcase its success not only to others in the dairy industry but to the broader community.

The farm is already heading in the right direction with an expansion of cow numbers, improvements to a troublesome drainage system, production on an upswing and production costs on a downward curve.

Limberlost Dairy has been in the top 10% of benchmarked Tasmanian farms in the past few years and farm managers Peter and Jo Jones want to drive

Who:

Peter and Jo Jones Where:

Kayena What:

Focus Farm

it to the top.

They hope having the spotlight turned on them through the Focus Farm program will set a good example for other farmers and inspire the community.

“We want to try to get people from outside the industry to hear about it as well,” Mr Jones said.

“It’s not a day-to-day drudgery of milking cows; it’s a good lifestyle.

“There’s not many earn

the money we do and get to spend time with their children.”

Peter and Jo migrated from the United Kingdom three years ago and took over management of Limberlost Dairy, which is owned by three equity partners.

The farm was converted in 2007-08 from beef to dairy and still has some issues to address, mainly around drainage.

It has winter milk production so controlling the cost of production and inputs is essential.

“The farm wasn’t run down when it was converted, but it takes a while to bed down all the changes,” Mr Jones said.

Limberlost is one of only a handful of dairies in the Tamar region and doesn’t have access to the state’s irrigation, although it does have two pivots, one full circle and one half-circle.

Peter Jones speaking at a recent Focus Farm field day on their farm.

“We’re seasonal and calve at the start of February,” Mr Jones said. “That comes down to the system we’ve got. We haven’t got guaranteed water so that dry period suits the farm for calving.”

This year the farm will achieve annual production of around 360,000 kilograms/milk solids, up from 323,000kg/MS last year.

“In the past year we’ve been around 440-460 per cow but we’ve gone up in cow numbers from 730 to 780,” Mr Jones said.

The increases and improvements are gradual and attributed to “fine tuning”.

“We’re just managing grass utilisation and being a bit more strategic in where we’re putting cows,” Mr Jones said.

The stocking rate has crept up from 2.9 per hectare to 3.1 but the farm has retained the same number of staff with two full-timers and a parttimer supporting the family and a ratio of 244 cows per full-time worker.

Addressing the drainage problems on the 253ha milking platform is integral to improving the farm’s performance.

Limberlost uses a feedpad that was installed about five years ago.

“I wouldn’t go any other way,” Mr Jones said.

“If you feed the amount of dry matter that we buy in; probably 1.2-1.4 tonnes per cow, you need to have somewhere suitable to feed that.

“We’re trying to

Jo and Peter Jones on their Tamar Valley dairy farm.

increase pasture utilisation but one of the issues we’re facing is the drainage and salinity problem.”

To combat salinity, new drains are being installed, soil tests undertaken regularly and salt tolerant crops being sown with a winter grazing barley followed by millet chews.

“We’re a fairly low rainfall area but any water that does come on isn’t able to drain off. Getting the water off the paddocks is becoming a real issue but we’re addressing it with a lot of new drainage,” Mr Jones said.

Annual pasture utilisation is 9.4 t DM/ha, down from above 10 a few years ago. The grazed pasture per cow is 2.7t DM, while concentrates, hay, silage and other feeds add up to 2.5t DM. “The salinity problems have really hampered the amount of pasture grown,” Mr Jones said.

The farm has crossbred Jersey-Friesian cows and uses LIC breeding.

“They’re a profitable, fertile cow, especially suited to winter milking,” Mr Jones said.

This year the farm achieved a 7% empties calving rate over 10½ weeks, an improvement on 12-14% empties a few years ago.

“We’ve achieved that improvement through attention to detail; a strict regime of tail paints right the way through to A.I. mating. We’re there every day manually picking out cows and using a live weight program for A.I.” Artificial insemination is responsible for 65-70% of reproduction.

Now the farm has reached what Mr Jones considers to be optimum cow numbers, the focus is on improving herd quality to improve production and the bottom line.

“We’ve got the ability to get rid of cows that aren’t producing to improve the quality of the herd,” Mr Jones said.

The annual cost of production has dipped from $5.02kg/MS last year to around $4.85-$4.90kg/ MS. The return on assets was a healthy 13.2% in 2013-14.

“Production has been good this season,” Mr Jones adds. “We had a really wet winter last year and were down on milk production, but this looks like being a pretty good year.”

So much so that he thinks others should consider dairying in the region.

The farm is surrounded by the second biggest vineyard in Tasmania.

“You have to drive through vineyards to get to us,” Mr Jones said. “We’re farming through the vineyards but it’s still a good dairy area.”

The Jones run a crossbred JerseyFriesian herd.

Dam: Cookiecutter MOM Halo-ET, VG 88

PO Box 7538 • Shepparton • 3632 Victoria Phone (03) 5831 5559 • Fax (03) 5822 0005 info@wwsaustralia.com • www.wwsires.com

Dairy NewS AUSTRALIA july 2015

breeding management // 23

Inexpensive calf housing changes boost growth PAM TIPA

INEXPENSIVE CHANGES can be made

to improve calf housing and conditions, according to Wendy Morgan, nutrition and quality assurance manager with SealesWinslow.

Calf sheds need good air flow but if possible they should not be facing the prevailing wind, said Ms Morgan, who recently ran 15 Successful Calf Rearing workshops around NZ. Calves should be dry and out of the wind.

“If they are cold that is not really a problem.

Calves cope fine with cold weather but they don’t cope well with wet or wind chill,” she said.

“When they are exposed to that sort of weather they are using their energy to keep warm and not for growth.

You could use canvas or shade cloth appropriately to reduce wind getting into the shed.”

But good air flow should be maintained so the bad gases are removed. If air flow is reduced, too much ammonia can build up which is not good for the calves or the people working with them.

“You can cut parts out of a building to provide better airflow. But calves must not be sitting in a draught. The best way of checking is to get down

to calf level and light a lighter or a match and if it blows out there is a draught. If it stays lit the cows are fine.”

The numbers of calves and size of the shed will always determine how many are housed. But best practice would be to have 10-12 calves per pen with 1.5m2 per calf.

Ms Morgan recommends an allin, all-out system for bringing calves into the pen.

Moving calves from pen to pen as they grow means the disease challenge will build up in the first pen and dayold calves would be very susceptible.

Ms Morgan says woodchip, sawdust and wood shavings are all great bedding: they drain well and are good for the calves. Make sure it is not treated with a chemical or stain.

Clean, fresh water is imperative. When a calf is being fed milk it goes to the abomasum – the final compartment of the stomach.

“What we are trying to do in rearing calves is improve the rumen and grow the giant fermentation vat that is going to be essential to break down all the fibres when we feed pasture. The milk doesn’t go anywhere near the rumen.

“In a rumen we want everything to be mixing

Growth checks important Nutrition expert Wendy Morgan says it is important to be checking animals’ growth all the way through.

“Not just from birth to 100kg but also when they come into the herd,” she said.

It can be as simple as putting a piece of electrical tape on a wall or fence. When the animals walk past if you can’t see the mark you know they are up to the target you are aiming for them.

“If they are walking past and there’s a huge gap you know you have to bring them up, put them into a tail group and maybe preferentially feed them.”

Stock sticks are available from some suppliers with height marks for different breeds; or you could use a broom handle.

around – all the bacteria and all the feed particles to be mixed together and broken down and absorbed by the animal.

By having water in there you are moving

everything around.”

Many trials show the grow rates of animals on water is a lot better than those without water.

For transportation the trailer should be

driven slowly and have non-slip matting. Check it is actually non-slip as some product does not live up to its name. Fake grass was also suggested.

Carpet or mattresses are

difficult to clean.

Calving planning is important to decide who is doing what and making sure everybody knows the plan, Ms Morgan said. You should account

for sickness, set up first aid kits and include an emergency torch and muesli bars. Contact phone numbers should be displayed in the calf shed.

Dairy News AUSTRALIA july 2015

24 // animal health

Topping the dairy genetics charts AUSTRALIA’S TOP

dairy herds based on genetic merit have been announced by the Australian Dairy Herd Improvement Scheme (ADHIS).

For Holsteins, George Wagner’s herd from North East Tasmania tops the country for genetic merit for profit, which is measured by the Balanced Performance Index (BPI).

Daryl and Lani Hoey’s herd at Katunga is the number one ranking Jersey herd for BPI. And Sam Graham’s herd at Numbaa, NSW, is the number one ranking red breed herd for BPI. ADHIS general manager, Daniel Abernethy congratulated the herds on their achievement.

“It takes a sustained

focus over many years to breed a herd of this calibre,” Mr Abernethy said.

This year, for the first time, herds receive three breeding indices – profit (BPI), health (HWI) and type (TWI).

The Balanced Performance Index (BPI) is an economic index that blends production, type and health traits for maximum profit. It reflects most farmers’ preferences.

The Health Weighted Index (HWI) allows farmers to fast track traits such as fertility, mastitis resistance and feed efficiency.

The Type Weighted Index (TWI) allows farmers to fine tune type traits.

The three breeding indices were intro-

duced following a review last year which found that while profit is important to all farmers, some place more value on traits such as mastitis, longevity, fertility, type and udder conformation.

“Having three breeding indices gives farmers the ability to choose the index that best reflects their individual breeding priorities,” Mr Abernethy said.

“Every unit gained in each trait is associated with a financial gain. But each index places slightly different emphasis on traits and this changes the rankings of bulls, cows and herds.

A full list of Australia’s top 5% of dairy herds for genetic merit is available at www.adhis.com.au.

Northern Victoria dairy farmer, Daryl Hoey has bred Australia’s top Jersey herd based on genetic merit for profit.

Top herds based on BPI, April 2015 Holstein Rank profit (BPI)

Region

Owner

Location

1

Tas

Wagner, G

Winnaleah

2

Nth Vic

Hogg, A & J

Biggara

3

WA

Kitchen Farms

Boyanup

4

Gipps

Henry, TW & TC

Tinamba

5

Gipps

Anderson, WR & BL

Kongwak

6

NSW

Parrish, TJ & LR

Barrengary

7

Nth Vic

Sprunt, RG

Kaarimba

8

West Vic

Dickson, BJ & JL

Terang

9

West Vic

Walker RG & CA

Heathmere

10

Gipps

Johnson, R & L

Bundalaguah

Rank profit (BPI)

Region

Owner

Location

1

Nth Vic

Hoey, DM & L

Katunga

2

West Vic

Glennen, C & CO

Terang

3

West Vic

Tanner, JS & KL

East Framlingham

4

Nth Vic

Worboys, R & A

Kotta

5

Nth Vic

Van Den Bosch, JH & CA

Lockington

6

WA

Boley, Messrs PJ J

Karridale

7

Gipp

Moscript, ME, CJ & JM

Leongatha South

8

West Vic

(MC) Wyss Trading

Boorcan

9

Nth Vic

McManus, BT & CA

Bamawm

9

NSW

Saul, M & B

Macksville

Region

Owner

Location

1

NSW

Graham, RW & BC

Numbaa

2

West Vic

Raleigh, Jan

Timboon

3

Gipps

Leppin, T & U

Bena

Jersey

red breed Rank profit (BPI)

Keep colostrum for longer with yoghurt A2/A2

Blue-Prairie He-Man #1530

PO Box 7538 • Shepparton • 3632 Victoria Phone (03) 5831 5559 • Fax (03) 5822 0005 info@wwsaustralia.com • www.wwsires.com

ADDING YOGHURT to colostrum gives it longevity and stops it from separating, says nutritionist Wendy Morgan.

Ms Morgan, nutrition and quality assurance manager with New Zealand company SealesWinslow, presented 15 Successful Calf Rearing workshops recently.

She said adding an EasiYo sachet to colostrum – one packet for 20 litres of colostrum – or adding yoghurt from the supermarket, provided it contains acidophilus bacteria, is a good way of keeping colostrum for longer.

The first ‘batch’ can be used to seed the next batch of colostrum and so on. The good bacteria will grow and the environment will discourage the bad bacteria.

“You want colostrum to be completely consistent so the calves are getting all the same amount at the same time. We don’t want it separating out.”

Freezing is another storage method but you have to be careful how you defrost it, Ms Morgan said.

“Proteins have a specific structure as do the immunoglobulins in colostrum. If you microwave colostrum to defrost it, the protein becomes solid and is not available to the calf.”

The chill needs to be taken off so calves do not use energy to bring it up to body temperature. Older calves are fine with cold milk.

The timing and amount of colostrum is important, Ms Morgan said.

The best time to get colostrum into calves is the six hours after they are born. If possible it is best to collect calves twice a day from the paddock, otherwise some will not get colostrum until after 24 hours.

“Twenty four hours is when colostrum absorption starts to reduce and is not as effective. DairyNZ research shows 56% of calves don’t get colostrum from their mothers.”

Ms Morgan said she is happy with tube feeding if the alternative is no colostrum.

“In an ideal world everyone will bottle feed their calves. But it can mean some calves won’t get colostrum or someone is so stressed that the calves won’t suck.”

Calves need to get colostrum early because their gut starts to close up quickly. In a new-born calf the large immunoglobulins molecules can be absorbed in the gut wall. After 24 hours the immunoglobulins don’t get absorbed. But if the colostrum can’t be fed until after 24 hours those immunoglobulins will still work on the pathogens in the gut itself so it is still useful.

Ms Morgan says you should taste the colostrum to ensure it hasn’t gone off. You should test taste fresh colostrum to know what it should taste like: “It doesn’t taste really nice but it doesn’t taste disgusting.” – Pam Tipa

Dairy NewS AUSTRALIA july 2015

animal health // 25

How to assess colostrum management on your farm THIS ARTICLE intro-

duces the concept of colostrum, the consequences of poor colostral intake and a useful way to assess colostrum management on your farm.

Defining colostrum Colostrum is the first milk produced in the udder and is the milk collected at the first milking only.

Milk from the second to eighth milkings should be termed transition milk.

Colostrum contains antibodies which contribute to the defence system of the calf and help combat disease.

The most important antibody is immunoglobulin G (IgG). The bovine placenta is designed in such a way that transfer of IgG from the dam to the unborn calf cannot happen in utero.

Thus, when calves are born they do not have any measurable IgG in their blood and as a result are very susceptible to disease.

Colostrum is the only source of IgG for calves and the timely intake of an adequate volume of good quality colostrum is essential to provide protection against disease in the early weeks of life.

Calves start to make their own IgG at birth but the blood levels are not sufficient to fight infection until 4-6 weeks of age.

Colostrum is also very nutritious and contains about four times the amount of protein and

animal health gemma chuck twice the amount of fat of normal milk. This equates to approximately 27% total solids, compared to ~19% total solids of transition milk and ~12.7% total solids of normal milk.

Aside from IgG, colostrum also contains many hormones and growth factors, along with maternal white blood cells.

These additional com-

ponents of colostrum could be responsible for the further development of the immune system and other tissues within the calf.

Research is currently ongoing in this area.

Long term benefits of colostrum Research from the United Sates has shown that calves receiving adequate colostrum during the first 24 hours of life had a reduced risk of sickness during the pre-weaning period and a reduced risk of dying in the preweaning and post-weaning periods.

These calves also had greater daily weight gain, achieving target mating weights more quickly.

They also had half the veterinary costs compared to those which received insufficient colostrum.

Perhaps most surprisingly, calves that received adequate colostrum produced more milk in their first and second lactations, compared to those that received insufficient colostrum.

As time goes on, the long term benefits of colostrum are becoming more apparent, resulting in more interest in this precious commodity.

What happens when calves receive insufficient colostrum?

If calves do not ingest sufficient IgG from colostrum, they are very vulnerable to disease.

The term used to define calves that are unable to fight a disease challenge as a result of low blood IgG levels, is Failure of Passive Transfer (FPT).

Many research studies have demonstrated that the risk of sickness and dying over the first six months is directly associated with FPT. One such study estimated that 31% of deaths during the first three weeks of life were attributed to FPT. In a study conducted in south west Victoria in 2011, it was found that 38% calves (over 100 farms) had FPT. This indicates that colostrum management is still a real challenge on many Australian dairy farms.

How do I know if my calves have failure of passive transfer?

Fortunately there is an easy, inexpensive test to determine if failure of passive transfer is a problem on your farm.

The test is an indirect assessment of the transfer of IgG from colostrum to the calf. The results need to be interpreted at a group level and the group needs to be a minimum of 12 calves, aged 24 hours to 7 days of age.

A blood sample is collected from each calf in the group and the level of total solids in the serum is measured.

Your veterinarian will be able to assist with this.

The serum total solids

is highly associated with the serum IgG and is indicative if adequate passive transfer of IgG from colostrum has occurred.

This test can be used in a disease outbreak situation to determine if colostrum management is adequate and also as a routine monitoring tool during the calf rearing period.

Next month, we discuss the importance of colostrum quality and how to measure it.

• 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.

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DAIRY NEWS AUSTRALIA JULY 2015

26 // ANIMAL HEALTH

Could your dry-off be better?

ARE YOUR TEAT WIPES OK?

ROD DYSON

DRYING OFF is your single biggest opportunity to change the infection status of cows, and should probably be thought of not just as the end of one lactation, but actually as the start of the next lactation.

Because it is a significant investment of money, as well as time and effort, it is probably worth thinking about what you do and how you do it.

There are three broad goals for a successful dry-off program – ■ To successfully transition each cow from being a milking cow to being a dry cow.

■ To maximise the effectiveness of the dry-off process and dry cow therapy in terms of both the cure of existing infections and the prevention of new infections.

■ To avoid antibiotic residue violations, especially when the cows

Q. Do you need teat wipes with your dry cow?

A. No, I’ve got plenty at home This conversation always worries us!

Firstly, if there are plenty of teat wipes left over at home, it makes us wonder if they are used to sterilise teat ends on a regular basis.

calve again.

Our experience is that virtually every farm we have worked with has been able to make significant improvements to their dry-off program.

At a series of farmer workshops delivered by Dairy Focus, 74% of attendees said they were going home to make significant changes to their dry-off routine – that is three out of four farms.

This strongly suggests that most

What is your protocol for administration of treatments at dryoff? How will you ensure that the people applying treatments achieve maximum hygiene and teat end sterilisation? How are cows marked and identified as being dry cows?

■ How will the cows be managed after dry-off? Will they go to a clean, dry area? Who will check them for a few days after dry-off?

Based on our experience of developing the best possible dry-off strategy for our clients, these are consistently the areas that most farms could think about to make a difference.

We strongly suggest you talk to your adviser to review your routine, and you are also welcome to call us at the Dairy Focus office with any queries you may have.

• Dr Rod Dyson is principal veterinary consultant and team leader of Dairy Focus, which specialises in practical on-farm mastitis control programs.

■

Secondly, what condition are those “left-over” wipes in?

If teat wipes are not sufficiently moist (wet), then there may not be enough alcohol to achieve adequate sterilisation of the teat end.

And if they are actually dry, then they will do very little at all.

We have seen several poor

farms could benefit from a review of their routine – it could be that “we’ve always done it this way” might not actually be the best way.

Some key questions that every farm could think about are: ■ Do you have a list of dry-off dates based on predicted calving dates?

How confident are you of the accuracy of those dates?

■ What is your strategy to reduce

outcomes as a result of using old teat wipes.

The lowest risk option is to throw them out and use new ones - they aren’t very expensive, and many brands now come with a removable seal over the top of the container to protect them prior to first use.

If in doubt, throw them out!

■

production in the cows that are being dried off? Will each cow have achieved the goal of between 5 & 12 litres per day at the point of dryoff? How will you know each cow’s production level?

What is your dry cow therapy regime? Have you discussed treatments with your vet? Will it maximise both treatment and prevention opportunities?

Milk replacer pays dividends GIPPSLAND FARMERS Trevor and Anthea

Saunders, Shady Creek, north-east of Warragul, are dedicated Jersey breeders and their enthusiasm about their herd showed through when we visited in late May. Mrs Saunders takes control of the calf rearing side and is determined to give them the best possible start. So the optimum feeding procedure becomes a major consideration. They use Urban automatic calf feeders installed in three bays of the calf shed where the different groups, each of 24 calves, are treated indi-

vidually as sensors read their ear tags.

The calves get the first eight hours of colostrum through the mothers, and are then taken off onto a manual feeder where they receive colostrum only.

“They are strong enough to be taken off after 24 hours,” Mrs Saunders said.

The calf milk replacer to be used in the automatic feeder is critical and the Saunders worked with local vet Grant Nielsen from the West Gippsland Vet service who manages their calf management program. They previously had problems with salmonella and E.coli.

“When we were looking at the calf milk replacers we wanted animal-derived components, not vegetable-sourced ones as the calf’s digestive system works better to get the best possible out of them.

Plus probiotics are important,” she said.

“They are fed milk at the right temperature at the right time, 1 1/2 litres at a time.

“We chose the MaxCare Ultimate formulation purely on its specifications – particularly the high protein and fat percentages.

The calves make a better curd and it optimises the nutrient consumption and

Trevor and Anthea Saunders say their aim is to be in the top 2% of Jersey herds in Australia, and an efficient calfrearing program is an essential part of that.

extraction from the feed.”

Milk powder manufacturer Maxum Animal Nutrition have three different formulas in their MaxCare Calf Milk Replacer range, and the top of the range formulation ‘Ultimate’ contains

A2/A2

Webb-Vue Plan Veronica-ET, GP 83

PO Box 7538 • Shepparton • 3632 Victoria Phone (03) 5831 5559 • Fax (03) 5822 0005 info@wwsaustralia.com • www.wwsires.com

the highest nutrient density available in the Australian market with 28% protein and 22% fat as well as a heady collection of probiotics, amino acids, vitamins and minerals.

“Calves are fed ad lib up to 10 litres a day for

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the first two weeks. The feeder allows them 1.2 litres per feed every two hours until they reach their quota for the day.

From two to 10 weeks they are on six litres a day and then the milk allowance is ramped down to two litres at three months of age.

“Our calves look better than they ever did on whole milk. This formulation mixes really well for the automatic feeders.

“Our calves are our future, so there is no point in skimping – we need to get the best growth that we can.

“I’ve reared calves for 30 years and I can tell how well they are doing. It’s important for one person to do that.

“We aim to grow our calves out properly so that they can achieve their genetic potential later on as milkers.”

They get a feeding history for each calf through the auto feeding system computer.

The calves are on ad lib grain and water from birth, but no hay. “We believe the ‘scratch factor’ is more significant with grain feeding than hay.

Later on they get about 2kg/day of grain from six weeks to weaning,” Mrs Saunders said.

“From the six litres per day they are getting at two months and two weeks, it is dropped down to two litres at weaning at three months.”

DAIRY NEWS AUSTRALIA JULY 2015

STOCKFEEDS // 27

Get recipe right for transition feeding

CHECK OUT THE LATEST NEWS AND INFORMATION AT www.dairynewsaustralia.com.au

RICK BAYNE

INTRODUCING A transition feeding program should be a “no-brainer” for every Australian dairy farmer, according to one of the country’s leading nutrition and animal health experts.

Dr Steve Little from Capacity Ag Consulting says feeding a special supplementary diet in the last three weeks before calving will give cows the best chance of a successful transition “I call it a no-brainer,” Dr Little said.

“I recommend every farmer use some form of transition feeding program in the last three weeks.

“Almost every nutritionist you speak to would agree it’s the most significant nutritional technology in the last 25 years.”

However, Dr Little said getting the best results from a transition feeding program can be challenging.

“You need to use an approach that is appropriate for the farm.

“There are many details to manage so seek help from a professional nutritionist.”

Dr Little said heavily pregnant cows face many challenges.

“Their rumen needs to be adapted to a diet that they’re going to be fed as milking cows, which usually involves grain and other highly digestible feed,” he said.

“They have to suddenly be able to mobilise a lot of calcium which is required for colostrum in the milk, and meet the nutritional demands of the calf and the udder in the last three

weeks.”

But there’s no magic formula for success.

“There are number of different feeding approaches that are used in the pre-calving transition period.

Which approach is suitable depends on what the farmer’s feeding approach is after calving,” Dr Little said.

He added that some farmers use

anionic salts in water troughs but most favour a commercial lead feed supplement usually involving energy, protein, appropriate levels of minerals, additional magnesium and some sort of anionic supplement.

“About 70% of farmers in Australia already use some form of transition feeding approach. Of those that do over half of them use a commercial transition feed supplement, usually with hay and a strictly controlled amount of pasture.”

Dr Little said commercial products are generally good quality and well accepted by cows.

Anionic salts, which contain chlo-

rine or sulphur irons, are quite salty and in the past created taste issues.

“These days the flavours and aromatic additives the stockfeed companies are able to put into the products means cows accept them quite well.”

Dr Little said farmers needed to make sure forage being fed with commercial supplements is appropriate for pre-calving transition cows.

“That requires feed testing and analysis.

You can’t tell by looking at forage whether it’s suitable for a transition cow. You need to do a proper feed analysis.

“Some good high production forage suitable for a milking cow isn’t necessarily appropriate for pre-calving transition cows.”

Dr Little said the rations should provide the cow with sufficient megajoules of energy, sufficient protein, the correct mix of calcium, phosphorus, magnesium and ensure the Dietary Cation Anion Difference (DACD) is low enough.

Most farmers will use transition feeding to get control over the cow health problems.

Dr Little said good transition feeding would virtually eliminate milk fever and all cow health problems that commonly occur around calving.

“We’re trying to adapt the rumen so freshly calved cows can cope well with grain and digestible pasture and really start milking well after calving, and we try to minimise the amount of body condition they lose after calving.”

• 30% of farmers miss out on benefits of transition feeding – page 28

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28 // STOCKFEEDS

30% of farmers miss out on benefits of transition feeding RICK BAYNE

ABOUT 30% of Australian dairy farmers are missing out on the advantages of a transition cow nutrition management program.

Dairy Australia program manager for animal health and fertility, Kathryn Davis, described transition cow management as one of the most significant advances in dairy nutrition and production over the past 20 years.

It can improve cow health, milk production and reproductive performance but a Dairy Australia survey has found only about 70% of farmers are using the system.

While this is an increase from 65% in the previous survey, not all of those using it have an approach that meets all the cow’s nutritional needs.

“It’s improving but there are still 30% missing out on the benefits,” Ms Davis said.

Among farmers using the system there’s “usually some room for improvement,” she added.

“Even some farmers who have been doing it for a while find things they can tweak to make it easier, reduce the labour time or deliver better results. Some are still working with different nutritional regimes to see what works best for their

animals.” lenge of going through a Ms Davis said there pregnancy and it has benwere multiple benefits efits for fertility down the from having a transition track.” cow system.

Ms Davis said evidence “The cow of the ben“Some have will be well efits of prepared to transition a simple transition cow mantransition from being a agement dry cow back diet; others had been have a far into lactastrengthtion; she’ll more complex ening over produce the past one that is more milk 20 years once she gets completely and more into the milk- balanced with farming herd and respect to all ers were she’s more the nutrients.” catching likely to have on. a low stress “We calving and keep in good keep building our knowlhealth. edge around what’s the “It keeps her well supbest way to do this in our ported during the chalsystems,” she said.

“We’re still learning how to do it well. The farmers who adopt a good

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strategy can see the benefits.”

Ms Davis said the system could vary from farm to farm.

“It’s difficult to give generic advice,” she said.

“There are a lot of factors you have to take into consideration when planning a transition strategy. You’ve got to know what your goals are; what your cow nutrition and body condition is leading up to calving, and what diet those cows will be expected to perform on once they go into a lactating herd.”

It takes about three weeks on a transition cow diet to get the best value for conditioning the rumen.

Restricting pasture and putting cows on rations is usually one of the strate-

gies involved.

“There are different ways of tackling it and it depends on what system you have and what sort of diet the cows are expected to be on once they start lactating,” Ms Davis said.

Rations vary and while Dairy Australia runs workshops for farmers to work out the best strategy for their farms “we don’t put out recipes”, she added.

“It’s more about understanding your system and your goals and working with a nutritionist to come up with a diet that’s going to work well.

“Some have a simple transition diet; others have a far more complex one that is completely balanced with respect to all the nutrients.”

Kathryn Davis

Ms Davis said speaking to a nutritionist would help farmers.

“It is complicated and we don’t expect all farmers to be experts in this area,” she said.

Dairy Australia also runs transition cow management workshops which can be arranged by contacting local regional development programs.

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STOCKFEEDS // 29

Feeding fibre in winter TOM WALSH

MOVING INTO winter

the question of what to do regarding fibre and forage feeding is always an interesting one.

For most farms in southern Australia pasture has become the predominant component of the diet in the milking herd.

The imperative for most is that this feed source should be utilised to the maximum and to not do so will be harmful to profitability.

This is certainly the case when we look at the Income Over Feed Costs (IOFC) for a given farm on one given day.

It does not necessarily ring true looking at the whole farm over the course of the year.

Every farm is different of course so it is impossible to give a one size fits all answer to the fibre feeding question.

It is possible to frame some questions to ask yourself when making this decision: ■■ Pasture in winter

Preventing nutritional scours in calves DAVID ISAAC

NUTRITIONAL SCOURS is one of the two forms of

scours in unweaned calves. The other form is pathogenic scours.

Generally nutritional scours can be caused by changes in amount and type of milk fed to calves. This can occur when changing brand of milk replacer or by changing from cow milk to milk replacer.

Furthermore, nutritional upsets could be triggered due to stress from exposure to bad weather, vaccinations, dehorning or simply by transporting the calves.

Nutritional scours are not too dissimilar to pathogenic scours due to water loss and dehydration.

Prepare a plan on how and when to treat calves scouring, making sure that everyone working with the calves are aware of it.

As dehydration occurs rapidly in calves, it is important to be observant and intervene soonest possible.

Severity of scours can be monitored by observing the below: ■■ frequency and quantity of scours ■■ mental responsiveness- alert or depressed ■■ Suckling frequency ■■ Sunken eyes ■■ Weakness ■■ Gum condition- bright or pale It is important to isolate the affected calves, provide them with warmth and keep them on dry bedding.

These calves should be given electrolytes, which are designed to replace body water and provide minerals such as sodium, potassium, chloride as well as provide energy.

If scouring persists more than a day, please contact a vet.

It is always best to prevent nutritional diarrhoea. The first and foremost prevention strategy would be to ensure that calves get at least two litres of colostrum by suckling or bucket feeding within the first six hours of life and a further two litres within 12 hours.

Secondly, a functional fibre source such as Opticell PLUS UF could be mixed into the milk or milk replacer to assist the digestion as well as provide the necessary nutrients in the hindgut to ensure firmer stools and reabsorption of water.

• Dr David Isaac is animal health, innovation and research manager with BEC Feed Solutions.

can be lower in fibre levels and is not able to provide adequate effective fibre for the rumen. 1-2 kg hay or silage (providing it can be limited to that and no more) will help to provide rumen balance.

Grazing pasture at the 2-3 leaf stage will

■■

provide more fibre than at the 1-2 leaf stage (as well as giving greater pasture growth and utilisation).

In virtually every southern winter there are gains to be made by keeping cows off pasture for greater periods of time. Feeding forage

■■

on a feed pad helps to achieve this.

In the depths of winter substation is not a dirty word. Sending the cows down the paddock with a bit of fibre in their rumens on top of the slug of concentrates from the dairy will reduce grazing

■■

pressure and minimise paddock damage. Of course care needs to be taken not to take this too far.

If a feed pad is not available the plan should be to feed in the paddock as long as you can get in there to enable a long rotation and buildup

of a solid feed wedge.

When it does get wet there will be a good pasture cover to offer the cows and reduce the amount of paddock damage that does occur.

• Tom Walsh is a vet and dairy consultant with The Vet Group.

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30 // STOCKFEEDS

Give calves access to pellets, meal from day one PAM TIPA

THE AIM of calf feeding is to improve and grow the rumen and to ensure

the mature cow can take all the nutrients out of the pasture and foliage she is fed.

Nutritionist Wendy Morgan recently

presented a series of calf rearing workshops around New Zealand.

She said the rumen needs a good surface area and developed muscles.

When a calf is born the rumen will be one flat plain muscular structure.

The aim is to grow rumen papillae (finger-

like protrusions). Papillae grow by feeding starches and sugars to the calves.

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from things like molasses.

“If we just feed milk the rumen won’t develop because milk doesn’t go into the rumen so it doesn’t affect rumen development.

“The calves will grow well because they are adapted for the milk. But if we Wendy Morgan only feed milk and wean onto grass they will have a massive growth calf meal that says ‘nonprotein nitrogen’. check because the rumen Calves need things like isn’t developed enough to soya bean, canola, cotton take the nutrients out of seed, sunflower meal – any the pasture.” sort of vegetable protein.

Feeding only hay and Soya bean meal has 48% milk will not grow the protein – a high protein papillae but it will cause meal of 30-50% is needed. the muscles to develop.

Calf meal needs to be Sometimes papillae high in energy; look at the grow too quickly and specifications. You want they stick together; fibre 13% ME for small calves sources help split them and a bit more for older apart. calves.

“We want slowly That should come from absorbed starches because grains like maize, wheat or too much sugar will break barley. down too quickly and the Energy should not microbes can’t absorb it be obtained through and you can end up with biscuit meal, lolly waste acidosis.” or similar. “We don’t Molasses is fine but it want too much fat or fast must be limited. energy. A consistent diet is Ms Morgan said the necessary.” sooner we can get calves Ms Morgan said the eating meal the better amount of milk and because milk is the most frequency is one of the expensive feed for calves. most contentious subjects.

Meal is the next most Some people do once-aexpensive and grass is the day from day one others cheapest. “The sooner we think that is cruel. can get them on grass the And if calves aren’t better.” eating meal it probably is She suggests putting because there’s too much meal in the pen from day milk. “You can look at one to get them used to it scaling back after about and eating a little. Pellets and meal are both suitable three weeks.” For those on twice-a-day who are for young calves. considering when to go to Don’t add urea to once-a-day, three weeks is calf feed because urea is the best timing. not a true protein. Avoid

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MACHINERY & PRODUCTS // 31

Duncan helps efficiency drive Bertoli - we deal with Jack Collins to look for a new seeder Brett and there – they are good to deal with or Kylie Dixon went back to the dealer- we wouldn’t go back.”

Duncan Ag is based in New Zealand ship from where they buy most of their and has a reputation for innovation, equipment. strength and quality of Mr and Mrs Dixon farm machinery manuare milking 473 cows at facture for the past 75 the moment on their years.

54 unit rotary at LanThe Renovacaster, between Stantor AS3500 is an air hope and Shepparton system version of the in Victoria’s Goulburn earlier Renovators, Valley. with seed and fertilBrett grew up on the farm which now WORKING CLOTHES iser delivery by air for improved seed placeencompasses 800 hectCHRIS DINGLE ment accuracy, particares, including 228ha, ularly in hilly country.

18 kilometres away.

With an effective sowing width of They took delivery of their new Duncan Renovator AS3500 from Ber- 3500mm, the machine comes standard toli Farm Machinery in Shepparton at with a weigh kit containing scales and the end of February to replace their an electronic hectare meter.

It has 700 litre hoppers for seed and three metre Duncan machine which had fertiliser and a butterfly valve for condone five seasons without any issues.

“We like to turn over the machinery trolling different air rates between the to upgrade for more efficiency. We were bins. Positive drive comes through an pretty keen on the Duncan and wanted adjustable ground-driven jockey wheel.

Mr Dixon has sown 440 hectares so to go a bit bigger, so we went to the 3.5 metre model, and our previous one far; “We’ve done a bit of everything”, he said as he rattled the figures off the top wasn’t an air seeder.

“Just about everything comes from of his head, “50 hectares of perennials,

WHEN IT was time earlier this year

Brett Dixon bought the Duncan Renovator AS3500 in February – it is an air system version of the earlier Renovators.

90 hectares of wheat, 12 of lucerne and 14 of vetch, the remainder is the annuals.”

“The boxes are easy to fill and drain out. The seed all runs into the one spot, so you don’t have to be spreading the seed along, like we did with the smaller one.”

The air seeder is pulled with a 120 horsepower Fendt 411 and Mr Dixon said that all the workers on the farm are involved in the seeding and it is easy to operate visually by watching what is going on with the machine.

“We just have the air seeder monitor in the cab. Calibration is easy using a stow away tray to catch the seed dropped through 26 turns of the wheel.

“You then weigh the seed and alter it as necessary. It is easier than the old one, the tub underneath means there is one less step in the process.

“So far we have found no limit on the type of seed that you can put through it.

“On the home farm we improve one-third of the pasture each year.”

They finished sowing at the end of

The Duncan Renovator AS3500 has 700 litre hoppers for seed and fertiliser.

WHO:

Brett and Kylie Dixon WHERE:

Lancaster WHAT:

Duncan Renovator

May and 30mm rainfall in the last week before we visited in late June meant that the crops were getting a good start.

Dixon Dairies make their own hay and did 2700 round bales this season.

They run a McHale V640 round baler that they purchased two years ago, also from Bertoli. Contractors look after the pit silage which amounted to 1000 dry tonne of sub-silage and 600 dry tonne of maize.

They currently have seven tractors with another new Fendt coming soon.

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The others include three New Hollands, two JCBs and a Kubota. They have had a Seko feed mixer for seven years.

“We just feed out on to the ground in the paddocks; this is a pasture-based operation and we are just topping the cows up.”

The cows get an average of 7 kilograms of feed in the bail, depending on the state of lactation.

They calve five times a year to assist fertility, with 300 cows calving in spring. Mr Dixon said that the mating programs are working really well.

Irrigation is through the channel on the Goulburn Murray Water system and up till now the farm has had full allocation, but water is always a major concern, particularly with such a dry twelve months that they have just had.

For the future, Mr Dixon says, the cow numbers won’t change much.

“There’s enough potential in improving the production per cow. We are pushing 9500 litres at the moment and we are happy where the numbers are – we nearly achieved six million litres this year.”

DAIRY NEWS AUSTRALIA JULY 2015

32 // MACHINERY & PRODUCTS

Lyco the powerhouse in post drivers AS THE more devoted

readers of this column (Hi Mum!) will be well aware, Grunt has become a celebration of a diverse range of machines, with the uniting characteristics that they’re made of steel, and they get things done.

Ideally, they have as much brute force, or speed, as possible. A

design that lasts the test of time also helps.

With this in mind, it’s perhaps not so surprising that this month’s object of interest is the humble Lyco post driver I borrowed to do some fencing work over the past few weeks.

It’s a no brainer for most commercial scale

farmers, but if you’re a weekend warrior and you’ve got some fencing work to do, your options are varied.

At one end of the spectrum, you can just dig holes, put posts in them, and fill them up with concrete. Way too much fun with a shovel and crowbar for me, even with the

GRUNT

JOHN DROPPERT

invention of powered augers and rapid-set concrete.

At the other end, you can pay someone to do your fencing for you, which sounds more ‘Weekend General’ than ‘Weekend Warrior’, and a bit far outside my pay scale.

As it happens, targeting the happy medium leads to the happy conclusion that borrowing a machine and doing it yourself is the way to go.

Using a post driver is not a task best suited to self-guided learning, but fortunately I had seen it done enough over the years to have a pretty good handle on it.

It helps that the Lyco ‘Powerhouse’ is a very intuitive and easy to use machine. Setting it level, drilling a hole, loading a post and getting out of the way make good sequential sense.

A design refined over

many years means that all the chains, bars and hooks are just where you need them to drive the post straight.

There is a certain smugness of tipping some water into the hole ahead of the post to improve the finished product.

That smugness is rapidly diluted when the compressed mixture erupts out from under the post and sprays across one’s face.

The Lyco machine is much the same as the Multi-sett made by Munro, the pioneering manufacturer that now owns both designs.

Apart from the intuitive operation and ingenious design touches, they’re beautifully simple, in the sense that they rely on the simple principle of bashing fence posts into the ground, by dropping a 220-odd kilo lump of steel on them.

The fact that they hold their resale value as well as any other machine I’ve ever seen, simply by doing a good job of that; well if that’s not timeless, I don’t know what is.

• 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.

New Vicon baler a hit with dealers MACHINERY DEALERS gave the new

release Vicon RV 5000 series balers an enthusiastic response at PFG Australia’s product launch in Echuca last month.

Improvements include the new patented net and twine wrapping system and a new software package for easy selection of bale density.

Anthony Mascato of Alto Motors, Trafalgar, said the new generation Vicon round balers will make Vicon customers happy and make rival manufacturers take note.

“The new features are very impressive. It’s good to see some common sense applied to baler design and technology,” Mr Mascato said.

The new patented PowerBind net wrap system is fast and has a reliable netwrap action and has eliminated the need for feed rollers.

PowerBind’s injection arm feeds net directly into the bale chamber and keeps the net tight. The net is constantly retained by the injection arm, which moves forward ready for net injection when the bale is 90% complete.

PowerBind also has a conveniently low loading height. To reload, the operator simply swings out the shaft and replaces the roll.

Setting and selection of correct bale density is vital to the quality of the end product. When working with different crops, it’s important to be able to easily adjust the bale density to suit.

Minimising any chance of error in changeover from one crop to another, the optional Intelligent Density 3D allows the operator to select from three pre-configured bale densities at the menu control, each of them tailored for straw, hay or silage.

If necessary, the operator can still customise the bale density in three separate zones, each with a choice of diameter and pressure to match specific requirements.

PFG Australia National Sales Manager for Vicon, Phil Hickey, said he was very pleased by the dealer response.

“We know we’ve got a well-priced new product with great features that customers have been waiting for, and it’s fantastic to get this kind of confirmation from dealers,” he said.

“The launch also gave us all the chance for some great networking and the atmosphere at Echuca’s Great Aussie Beer Shed and Heritage Farm Museum was a lot of fun.”

Tel. PFG Australia on (03) 8353 3600.

Dairy NewS AUSTRALIA july 2015

machinery & products // 33

Text alert sent before calving WHEN IRISH farmer

Niall Austin lost a cow and calf during an unexpected difficult calving, he decided to act.

Believing the deaths could have been prevented if he had been there to help, Austin began looking for a solution.

He wanted to avoid using an invasive device, believing instead that tail movement could help anticipate calving.

Four years of product development later, Moocall was launched commercially in Ireland in January 2015. The sensor is said to have won many design awards.

The device is to go on sale in New Zealand and Australia via au.moocall. com and through local distributors.

Non-invasive sensors connected to the cow’s tail detect when birthing is imminent, sending an SMS text message alert directly to two mobile phones. Moocall measures over 600 data points per second to determine the onset of calving, then sends the alert.

To date, Moocall has sold devices to 2500 farms

in 16 countries and about 10,000 calves have been born using it.

After receiving the first text message the farmer will have on average an hour’s notice before the cow calves. Easy calvings may result in shorter notice periods and difficult calvings could generate a text two-three hours before; a second reminder text is sent one hour after the first text.

The calving sensor has an embedded smart m2m sim that can work over different networks, even on remote farms.

Mr Austin said there can be black spots on some parts of a rural farm.

“Our calving sensor can pick the strongest network to help ensure a text is delivered at the right time,” he says.

How many Moocall devices does a farmer need?

Mr Austin said one device is adequate for a farm with up to 50 head.

“Farmers know their stock and if they manage the placement of their device well, they can capture as many as sixseven calvings per week

with just one device.

“Bigger farms may require more than one unit. Pedigree breeders may also benefit from more than one unit.

The sensor is attached to the cow’s tail and alerts the farmer an hour before calving.

“Farmers are less likely to require notifications when the bulk of their herd is calving, as the herd tends to be more closely supervised at this time.”

Niall Austin

calling for help

FDD0554015

Moocall devices are particularly valuable to farmers in the following circumstances: ■■ Early or late calvers (stragglers) ■■ Heifers ■■ Nighttime calving ■■ Pedigree breeds where vet assistance is often required ■■ Farmers with other jobs which keep them away from the farm ■■ Where there is distance between the farmhouse and the herd or calving sheds.

Dairy News AUSTRALIA july 2015

34 // machinery & products

New parallel milking parlour quicker, requires less staff sudesh kissun

A SMALL dairy farm at

Cambridge in New Zealand has installed the country’s first parallel milking parlour from DeLaval.

The P2100 milking parlour, commissioned last December, is making a substantial difference on the 134ha farm owned

by Paddy Lockett, where 50/50 sharemilkers Derek and Catherine Hayward milk 320 cows. They have milked there for eight seasons.

Mr Hayward said get-

ting rid of a 36-a-side herringbone for the 18-aside parlour with the latest technology was a sound business decision by the farm owner.

He says milking is now handled by one person, allowing the other staff to do other farm jobs and making the business more efficient; cows are more comfortable in the spacious parlour where they are fed individually.

Milking is done yearround and three calvings are planned this season.

Mr Hayward said milking time has dropped though this was never the

main reason for switching to P2100. Keeping labour cost down was the main driver.

The herringbone shed was only 13 years old but needed two milkers yearround.

“When we started getting our cow numbers down, milking around 250 cows, it did not justify the expense of a relief miker,” Mr Hayward said. “However, with a 36-a-side herringbone you need two people for milking; the idea was to put technology in the shed that allowed 350 cows to be

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Derek and Catherine Hayward with farm owner Paddy Lockett (right) in the new parallel milking parlour.

milked by one person.”

Mr Hayward mentioned the parallel milking parlour to Lockett, and asked three companies for quotes.

“Two were not interested but DeLaval told us they were looking for somewhere to introduce the P2100,” he says. “All stars were aligned; DeLaval was ready to launch the product here, and we were looking for something like that.”

Their P2100 comes with automatic cup removers, auto draft and auto wash features; new

$83,600 Including GST

technology can be added to the parlour.

Mr Hayward said the P2100 enables high throughput with fast milking and quick changes from one group to the next – exactly what is needed for a profitable milking system.

Cow comfort and worker safety are important factors for Hayward, and the P2100 is designed for both: cows have easy entry to the milking place and a comfortable, natural position during milking.

Cows are fed while milked; after milking the front gate goes out and 10 seconds later the deck is watered, the flush lasting 10 seconds.

Mr Hayward said by this time every cow has moved off the platform, then the front gates come down.

“And because she can’t turn till she gets to the front because of the

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The front gates lift, allowing cows to walk out after milking.

sequence gates, she walks out without any problem and the next mob moves in.”

Mr Hayward said he finds the P2100 environment much safer and enjoyable.

“Nobody who walks into the pit says they don’t like it. Everyone who walks in loves it; there’s so much room in there. It creates an environment where people actually want to go to milk.”

The cows also look happier in the parlour.

“We have a mixed herd with various sizes of cows; every cow that comes in is settled.”

Milking has also improved; the automatic cups don’t come off until the cow is properly milked.

Young cows get the same feed because they are not pushed around during feeding. During milking the cows get

two feeds, including the high-cost Challenge feed, which goes to high producing cows.

Professional Farm Services installed the parlour.

Physically installing the equipment was a challenge on the yearround milking farm. Contractors first dismantled the roof and removed one side of the old herringbone parlour – a serious disruption. With the 36-a-side reduced by half, milking took six-eight hours.

“One morning the cows were milked while concrete cutters were working; it wasn’t ideal but we managed.”

Once the P2100 was completed, Mr Hayward found milking times much shorter than with the 36-a-side herringbone. “The cows were wasting less time coming and going from the parlour.”

ANYWHERE FOR A SOLID SURFACE

Diamond Grid is revolutionising how landholders deal with surface stabilisation and drainage problems. Now dairy farmers are catching on to how beneficial it can be for their enterprises.

Diamond Grid is ideally suited to dairy farms which often have to worry about sloshing through the mud over winter.

The interlocking grid has a multi-layered drainage system that drains water from the surface, reducing erosion and eliminating compaction of the substructure.

The product has been on the market for the past two years and is already being used extensively in mining, landscaping, civil engineering and cattle industries and its durability and diversity has been proven with its recent use in a Papua New Guinea airstrip.

“Every year we were spending $5,000 - $6,000 trying to keep the gravel on it so the cows could go through. Luckily we got on to the Diamond Grid and it’s been great,” he said. “It’s like the cheaper version of concrete.”

“It’s a great alternative to concreting for shed floorings and extensions off shed aprons,” Ben said.

Diamond Grid can be used on any part of the farm that needs stabilising or where mud needs to be eliminated.

“We’ve had a lot of farmers buying it for an extension off their sheds,” Ben said. “When the cows step off the concrete it can turn to mud; installing Diamond Grid means they don’t have to slosh through the mud.”

One dairy farm in Queensland is using the grid on laneways between paddocks.

Diamond Grid Managing Director Ben Kirkup said the product was developed to provide a cost-efficient and effective solution for stabilisation and drainage issues on rural properties.

“It means the cows are not destroying all the laneways. It eliminates the need for ongoing maintenance. It is very effective,” Ben said. “The feedback from dairy farmers has been fantastic.”

“Concrete is very expensive, particularly in rural and remote areas,” Ben said.

“Diamond Grid provides a great alternative.”

With Diamond Grid dairy farmers can prevent natural earth surfaces from developing into muddy unusable areas in wet weather, reinforce surface erosion, potholes and corrugation, reinforce turfed areas, providing root protection, enable gravel retention and stabilise embankments, and provide drainage when filled with gravel.

Feedback from dairy farmers using Diamond Grid proves how handy it can be for the industry.

Farmers can install the grid themselves, meaning they save not only on concrete but also on labour costs.

South-west Victorian dairy farmer Will Rundle this year installed 70 metres of Diamond Grid on his feedpad and says it has been a great success.

“It’s an easy do-it-yourself process,” Ben said. “All you have to do is take the pallet to the site, lay the grids and then backfill with gravel or the soil that’s already there. Within an hour you’ve got a perfect solid surface. It’s very quick, simple and there are no trade skills required.”

Will said the feedpad had become “a soupy mess” before the Diamond Grid was installed.

Diamond Grid can have multiple applications across a dairy farm. It can be used for creek crossings, cattle yards, pathways, laneways, drains, water and feed troughs, and shed floors.

Diamond Grid creates a surface that is solid, dry and secure, even with constant use and in heavy rainfall. The grids are extremely durable, with a filled loadbearing capacity of more than 1000 tonnes/m2. They will not wear through even with constant use.

Some farmers have been trialling a mix of concrete with the grid, and they’re still finding big savings.

“Traditionally they would pour a 100150mm thick concrete slab,” Ben said.

“With Diamond Grid they can pour the concrete into the grids and fill it level to the top. This means they use 40mm of concrete so they’re reducing concrete costs by up to 60 per cent.”

A farmer using Diamond Grid instead of concrete on a shed could save tens of thousands of dollars without compromising safety or quality. Using Diamond Grid can wipe off 20-50 per cent of the cost of a water trough.

The grids are manufactured in Sydney from 100 per cent recycled polypropylene and are UV stabilised.

Apart from being easy to install, the Diamond Grid is also easy to relocate.

The product is also exported to Russia, Peru, Chile, Papua New Guinea and Indonesia, mainly for mining but also for other uses such as the new airstrip in PNG.

For more information and stockist details for Diamond Grid, please visit the website www.diamondgrid.com.au

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