21
www.age.co.nz Thursday, July 18, 2019
Dairy Farming 2019
into the future
INSIDE
What does the future hold for two young share farming couples? P22-23 Strong global market fundamentals see optimistic dairy outlook P25 New pathways to dairy farming P26-27 Farm Debt Mediation Bill gets the go ahead P28 The farm succession challenge P29 Helping producers build healthy soils, healthy plants, healthy animals and healthy profits P30
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22
Thursday, July 18, 2019 Wairarapa Times-Age
Dairy Farming
Plenty to think about
for young share farmers
2019
into the future
both businesses but Rachel is philosophical about these.
Share farming couples Hamish Hammond and Rachel Gardner, and Nick and Rose Bertram, live at opposite ends of the Wairarapa/Tararua region, but they share similar views on the opportunities and concerns for the coming season and beyond.
For instance, this season farmers will be required to use an anaesthetic when debudding “which is a good thing but an additional cost”, says Rachel. “Farmers have always had compliance,” she says, “but there is an increase in paperwork, monitoring and auditing.”
Hamish and Rachel are the 2019 Hawke’s Bay Wairarapa Dairy Industry Awards Share Farmer of the Year winners. The couple contract milk 630 cows on the 173ha Greytown farm of Hamish’s parents Stephen and Maree Hammond, and Irene Hammond. Nick and Rose Bertram, runners-up in the Share Farmer competition, are 50/50 sharemilkers on Barry and Carol McNeil’s 150ha, 440-cow Woodville property. Both couples are presently busy making sure their cows are in the best shape for the coming calving season which “officially” starts in just two weeks. As of last Thursday, Hamish and Rachel already had four calves and were busy feeding dry cows, checking for springing cows, and doing farm maintenance and improvements.
Hamish Hammond and Rachel Gardner.
“At this time of year the cows should already be in good condition,” says Hamish, “so you are maintaining that, making sure they are getting the right minerals, keeping an eye out for any potential calving problems.” “This is the time of year to be proactive about animal health,” concurs Nick, “getting the mineral levels up there, plenty of magnesium to prevent milk fever. Being proactive with animals at high risk of getting mastitis by giving them dry cow therapy and teat-seal at drying off time.”
Both couples are optimistic about milk price pay-outs for the coming season although they are also wary of the unpredictability of the market. Plus there are all the on-farm unpredictables like the weather, disease, and a poor spring for grass growth, all of which can lead to a reduction in the amount of milk produced. The only insurance one has against all of this, says Nick, “is budgeting to be on the safe side”. The increasing burden of compliance weighs heavily on
Hungry for work.
Rachel thinks the younger generation of farmers will be required to adapt to the ongoing changes to rules, regulations, and markets “We are very lucky to have farm owners who have spent $100,000 in the last 12 months in compliance and voluntary environmental projects,” says Rose. “This has included a Vat Chilling unit to meet new cooling regulations and insulation for all the houses. “We have been taking part in Fonterra’s Tiaki Sustainable Dairying Programme which has resulted in steep marginal land being planted into pines, and riparian plantings, and also working with Horizon’s Regional Council.
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www.age.co.nz Thursday, July 18, 2019
“This is the time of year to be proactive about animal health, getting the mineral levels up there, plenty of magnesium to prevent milk fever. Being proactive with animals at high risk of getting mastitis by giving them dry cow therapy and teat-seal at drying off time.”
for anyone who is struggling, he recommends “Farmstrong” (farmstrong.co.nz), a nationwide well-being programme for the rural community.
New ponds/nutrient traps have been created, fenced and planted with riparian plants. This has all been a huge cost to the farm owners and has only cost us as sharemilkers time and labour.”
“As a fire fighter I see what happens when health & safety goes wrong. It has given me a different outlook on being safe recognising hazards and isolating or removing them, and frankly not taking unnecessary risks.”
Nick is presently waiting to see what is revealed in the new Horizons Regional Council One Plan which is near completion. “The two major things for us are what reductions there might be in fertiliser and cows? There’s a lot uncertainty around these.” Nick is the Sharemilker representative for the Tararua district branch of Federated Farmers, with a meeting planned between the branch and Horizons on the One Plan within the next few weeks. As well as being the winners and runners-up of the 2019 Hawke’s Bay Wairarapa Dairy Industry Awards, the two couples also won specific merit awards. Hamish and Rachel won the Meridian Energy Farm Environment Award and the Ravensdown Pasture Performance Award. The couple monitored their soil for moisture content on a weekly basis during the summer period
Being a fire fighter has also given Nick a fresh perspective on health & safety.
so they were not overwatering. The farm’s soil is tested for nutrient levels annually. “Instead of blanket fertilising,” says Hamish, “we are targeting just those areas that need it which gives us more bang for our bucks. We aren’t over applying fertiliser which saves us money and reduces the risk of leaching.” The couple have taken part in Fonterra’s Tiaki Sustainable Dairying Programme which supports best practice farm management to proactively stay ahead of regulatory requirements. This includes coming up with a plan for enhancing the environment on the Greytown farm. Papawai Stream runs through the property and the couple have been doing riparian planting along it in partnership with Greater Wellington Regional Council and Papawai Stream care group, which is made up of people from the community. The couple also won the Westpac Business Performance Award, and the LIC Animal Productivity award. Herefordcross dairy calves are produced
Nick and Rose Bertram.
from the bottom performing cows, which are reared for beef production. This reduces the number of bobby calves and improves the genetic gain of the milking herd. The couple went to full season once-a-day milking last season and will continue with going forward. “As a result, the cows are in great condition and are very content,” says Hamish. “We are focusing on developing a profitable and sustainable dairy system. Although milk production was down slightly, the cows have improved reproductive results, and farm costs have reduced.” Nick and Rose won the Federated Farmers Leadership Award and the Honda Farm Safety, Health & Biosecurity Award. Both Nick and Rose are involved
with their community, Nick as a volunteer firefighter and Rose leading Mainly Music, an interactive preschool music session in Dannevirke. Nick believes it is important for dairy farmers and workers to take time to get off the farm and get involved within the community. “I would encourage others, especially younger people, to get involved. It is really important for people to have something off the farm to do - a sport or club. Otherwise you can get isolated and run risk of getting caught up too much in farming 24/7. “For me it is refreshing. I don’t play sport as I can’t afford to have injuries so when I looked around, joining the local fire brigade looked like a good way of being part of a team.” Anyone can have a “bad day on the farm”, Nick says, and
Nick makes sure all his staff have professional training in quad bikes and tractor safety. He has also divided the farm into safe zones for quads, and others that are out of bounds. He also uses the OnSide safety app for visitor management. “It lets me know when someone comes on to the farm so I can advise them on any safety hazards. I can also use it with my staff so we can alert each other to any hazards that have come up.” Life as a share milker does mean working hard, Rachel says, but hugely rewarding. “It takes a special kind of person to do it, but we like the lifestyle and being able to work together.” She believes the face of dairy farming is changing. “There are now a lot of people who are thinking about the people, the animals and the land.”
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24
Thursday, July 18, 2019 Wairarapa Times-Age
Dairy Farming
All quiet on the
dairy farm sales market over autumn
2019
into the future
It was a quiet autumn for dairy farm sales throughout New Zealand and Wairarapa was no exception.
influencing the market for dairy farms at the moment. “There are a lot of compliance costs on dairy farms which has affected the market quite a bit.”
According to data published by the Real Estate Institute of New Zealand (REINZ), for the three months ended May 2019, the median sales price per hectare for dairy farms was $31,248 (39 properties), compared with $30,243 (41 properties) for the three months ended April 2019, and $35,901 (74 properties) for the three months ended May 2018. The median price per hectare for dairy farms has decreased 13% over the past 12 months. The median dairy farm size for the three months ended May 2019 was 143 hectares. On a price per kilo of milk solids basis the median sales price was $32.17 per kg of milk solids for the three months ended May 2019, compared with $31.78 per kg of milk solids for the three months ended April 2019 (+1.2%), and $36.45 per kg of milk solids for the three months ended May 2018 (-11.7%). The REINZ Dairy Farm Price Index increased 4.9% in the three months to May 2019 compared
With a farmgate milk price forecast of over $7 the outlook is quite strong, says Tim. “But there is a lot of debt on dairy farms, although maybe not so much in Wairarapa, so that is something that will make banks more cautious about lending. “And the Reserve Bank requiring banks to hold more cash could lead to higher interest rates that would affect farmers with a lot of debt.”
On a price per kilo of milk solids basis the median sales price was $32.17 per kg of milk solids compared with $36.45 a year ago.
cropping unit.
with the three months to April 2019. Compared with May 2018, the REINZ Dairy Farm Price Index fell 3.7%. The REINZ Dairy Farm Price Index adjusts for differences in farm size and location compared with the median price per hectare, which does not adjust for these factors. It was a tough month of May for the Wairarapa/Wellington region, says REINZ, with zero sales of pastoral properties, and just one
Farmlands Real Estate Wairarapa Branch Manager Tim Falloon is not surprised by the lull in sales, particularly in dairy farms of which Wairarapa does not have a large number, with most concentrated in South Wairarapa and around Eketahuna. “It’s a seasonal thing. Any sales tend to register after June the first, with more properties put on the market in the spring.” Tim says several factors are
Tim is seeing no new conversions of sheep, beef and cropping farms to dairy in Wairarapa. “In fact the reverse is probably true at the moment with smaller, less economical dairy farms reverting back, especially with lamb prices at an all-time high. “With sheep and beef you don’t need as much infrastructure and there are not the compliance costs. There is not much cost in reverting back, but you are left with a lot of redundant buildings and equipment.”
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25
www.age.co.nz Thursday, July 18, 2019
Strong global market
fundamentals see optimistic dairy outlook
With global dairy market supply and demand fundamentals set to support strong prices for Oceania-origin dairy products over the coming year, Rabobank has held its farmgate milk price forecast of NZD 7.15/kgMS for the 2019/20 season. In its latest quarterly global dairy report – “Dairy Quarterly Q2 2019, Optimism in the midst of chaos”, Rabobank says global market fundamentals have remained well-balanced through the first half of 2019, with stagnant milk supply growth, reduced stocks and price stability continuing to be the key themes permeating across the sector. “Milk production across the ‘big 7’ exporters (the EU, the US, New Zealand, Australia, Uruguay, Argentina and Brazil) in 2019 was below the prior year, allowing markets to find support, and a sharp finish to the milk production seasons in both New Zealand and Australia, coupled with robust China imports, supported Oceania-origin dairy product prices,” said report coauthor, Rabobank dairy analyst Emma Higgins. Ms Higgins says the outlook through the second half of 2019 points to an ongoing challenge to turn the milk production tap on across key exporting regions.
“Despite an underwhelming finish to the season, 2018-19 will most likely be the secondbest season recorded on a total volumes basis due to the exceptional supply in the first half.” “Milk production across the export engine has stuttered along in the first half of 2019 with negative growth of 0.3 per cent and this has created tension in the global market,” she said “However, the milk supply tap is slowing being turned on, and in quarter three we expect to see the return of milk supply growth for the ‘Big 7’ exporters with this led by the northern hemisphere producers (the EU and US).” Importantly for New Zealand producers, Ms Higgins says, the bank’s forecast suggests less milk volumes will be available from the southern hemisphere exporting countries over the second half of 2019. “We expect Oceania dairy commodity prices to rebound
off the back of this once we have moved through our seasonal pricing hiatus period,” she said.
cent for the penultimate month of the 2018/19 season, compared to the prior year.
“Overall, we expect to see global milk production growth accelerate through into 2020, however, given the outlook for farmer margins, the rate of growth is forecast to remain below one per cent until quarter two, 2020.”
“Rabobank now expects fullseason production to end with volumes higher by just 1.5-2 per cent year-on-year, depending on the magnitude of the decline in May volumes,” Ms Higgins said.
On the demand side, the report says the landscape in import markets remains a mixed bag. “Chinese import appetite was stronger than expected through the first four months of 2019, and some buyers are likely to have adequate coverage. We anticipate Chinese demand to remain firm, but lower than in the first half of 2019, which may place a ceiling on price increases,” she said. “Elsewhere, the US economy is heading for a sizeable slowdown in 2020, while the Eurozone economy has been underperforming since 2018, and that has tempered consumer spending and limited growth in dairy demand.” The report says New Zealand milk flows have trailed lower for the past few months, with production dropping eight per
Dairy Farming 2019
into the future
“Despite an underwhelming finish to the season, 2018-19 will most likely be the secondbest season recorded on a total volumes basis due to the exceptional supply in the first half.” Ms Higgins said while milk flows in 2019/20 were expected to drop from this season, a further profitable year was in store for New Zealand dairy farmers. “We are forecasting that production for the 2019/20 season will be down at least one per cent year-on-year with the near-perfect growing conditions encountered in late 2018 unlikely to be repeated. “Despite this, 2019/20 is set to be another season of profitability for New Zealand farmers with the strong opening forecasts from Fonterra and other dairy companies supported by a lower NZD/USD exchange rate which we expect to sit around 0.65 over the coming year.”
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26
Thursday, July 18, 2019 Wairarapa Times-Age
Dairy Farming 2019
into the future
Get a wise head to
check that contract before you sign it
James Allen, a partner in agricultural consultancy business AgFirst Waikato, can’t stress enough the importance of share milkers getting a second opinion on any contract they are about to sign. “It’s very easy to have rose tinted glasses when you go into a new job, when you are keen and it looks like a great opportunity,” James says. He recommends a rural professional casts their eye over a potential contract. “Or any independent third party, as long as it is someone who has experience with contracts. It could be a farmer-mentor. “You have to step back and look at the income and expenditure, and also the terms of contract. Too often we see people go into contracts that aren’t fair.” Chris Lewis, Federated Farmers Dairy Industry Chairman makes a similar point in an opinion piece on the Federated Farmers website (www.fedfarm.org.nz). “Recently, there has been a run of enquiries from people who don’t have a Federated Farmers contract in place,” Chris says. “I don’t mind what contract you
opt for, it’s got to be fair for both parties and use the correct legal clauses. “Both sides must do their due diligence. Check the costs of taking the position, taking into account aspects such as the supply of meat and milk, lines company costs that can vary region by region, and you may have to pay for staff and cowshed expenses if you are going self-employed. “If you are going self-employed, check on DairyNZ’s website for DairyBASE. It has the averages of costs for dairy farmers and sharemilkers in different regions. It’s one of their better resources and it’s free. “Budget templates and other resources can also be found there. It’s better than a Google search or social media because it gets updated every year with real figures.
“Both sides must do their due diligence” - Chris Lewis, Federated Farmers Dairy Industry Chairman
“Feds members can also access our remuneration survey reports to benchmark salaries and for fair bargaining purposes. “But don’t forget the people element: the first five seconds is where people connect or don’t. A strong handshake, eye-to-eye contact and good casual conversation can make all the difference to a sound, long relationship.”
In 2016 James Allen, a partner in agricultural consultancy business AgFirst Waikato and DairyNZ partnered to produce the “Dairy Progression Pathways” report. The report explored the latest trends and statistics relating to sharemilking, and then examined the issues that the milk price volatility is creating, also providing some thoughts on how the industry may need to react to ensure viable progression pathways continue. Sharemilking has long been considered a cornerstone of the New Zealand dairy industry, providing a viable progression pathway for young dairy farmers to build experience and wealth, and traditionally aiming to achieve their ultimate goal of farm ownership. This pathway has been under increased pressure in recent years, with the number of Herd Owning Sharemilking (HOSM) positions steadily declining, due to a variety of factors. The past few years have seen significant fluctuation in the milk price paid to New Zealand dairy farmers, and this volatility has created additional problems for farm owners and sharemilkers alike. As we enter the 2019-2020 season, the findings of the report are as relevant as when it was first published, says James.
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www.age.co.nz Thursday, July 18, 2019
New pathways to dairy farming sought The report found both HOSM and Variable Ownership Sharemilking (VOSM) agreements had declined significantly, “dramatically” in the case of VOSMs, due to low dairy payouts leading to high financial risk. Both have largely been replaced by Contract Milking (CM) agreements which at the smaller farm scale do not offer the same progression opportunities. The percentage of sharemilkers intending to purchase a dairy farm declined from 70 percent in 2006 to 47 percent in 2016. The report found several factors contributing to this, including a lack of financial and lifestyle incentives, HOSMs staying where they are for longer, and fewer positions available - while the size of the dairy industry remains stable, the number of dairy farms is shrinking. Price volatility has made contract negotiations a lot more challenging with the variation in milk price within seasons causing problems with setting appropriate percentages for sharemilking agreements. Some farm owners do not feel they get an appropriate ROI from 50/50 Sharemilking agreements in high payout years,
the report said. While in low payout years, sharemilkers’ costs can exceed their income, cows can drop in value, and there is limited capacity to borrow. VOSM agreements have worked well in stable milk price environments but have proven deficient in accommodating milk price swings. One of the ideas that was suggested in the report, but which James says hasn’t really been picked up on since the report was published is using a VOSM/CM Hybrid CMs and VOSMs share a lot in common. Both are vehicles that primarily allow owners to “contract out” the recruitment, management and retention of farm staff. Both rely on a rate that covers direct costs, staffing costs and a business profit, and both typically have modest security/equity to secure loans and overdrafts against. A VOSM/CM Hybrid would have a contract based on a VOSM agreement. The milk company pays the VOSM portion while the farm owner pays the CM portion. Exposure to milk price risk can be
as the best one for them, James says.
tailored by adjusting the relative income from each payment method.
“Some people are enjoying being in a sharemilking position and plan to stay there till they retire, while some farmers now want to retain the ownership of the herd.”
The sharemilker would have the ability to receive some benefit of higher milk price and grow the business. The overall effect would be a reduction in volatility, although in extremely low milk price periods the hybrid SM may still not receive enough income to cover fixed costs. The industry is constantly evolving, and there are other new options emerging, James says. Pre-herd owning pathways are manager, contract milker, contract milker with top-up payments, VOSM and VOSM Contract Milker Hybrid.
Dairy Farming 2019
into the future
Leasing and equity partnerships are not so common in New Zealand but are common overseas, James points out. Whatever the avenue, the dairy industry has got to look at ways for younger farmers to be able to make a good return and progress in their farming endeavours, he says. “Without them, who are going to be the next generation of farmers?”
Herd owning options are 50/50 or Variable Rate Herd owning sharemilker and Flexi-rate agreement, while Leasing can be lease or lease with variable lease rate. There are also Equity Partnership options of equity partnership in a HOSM business, equity partnership in farm trading company, and equity partnership in land ownership Farmers are not necessarily viewing the traditional options
“Both HOSM and Variable Ownership Sharemilking (VOSM) agreements had declined significantly, ...replaced by Contract Milking (CM) agreements which at the smaller farm scale do not offer the same progression opportunities” - James Allen
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28
Thursday, July 18, 2019 Wairarapa Times-Age
Dairy Farming
New scheme
for financially distressed farmers
2019
into the future
Last month Agriculture Minister Damien O’Connor announced a new debt mediation scheme that will help farmers in financial distress deal with their lenders. The Farm Debt Mediation Bill will require creditors to offer farmers who default on payments mediation before they take any enforcement action. If passed into law, the Bill will require secured creditors who lend money to farmers to offer mediation to farmers if they default on payments, before taking enforcement action. The legislation will apply to loans that are secured against farmland, farm machinery, livestock and harvested crops and wool. DairyNZ chief executive Dr Tim Mackle has welcomed the Bill as an initiative that will mean a lot to farmers who may be feeling financial pressure. “For many, the farm is more than just a business. It’s a home, a lifestyle or an asset to be passed down to the next generation. That brings with it its own unique pressures. “This Bill acknowledges that and will provide support for farmers in financial distress in their dealings with secured creditors, allowing for the fair, equitable and timely resolution of farm debt issues. “Sometimes a farmer’s business can also be thrown off- kilter by an event entirely out of their control whether that be a drought, a flood, volatile international markets or a biosecurity incursion. This legislation will really help support farmers managing such volatility.” The DairyNZ Economic Survey 2017-18 results show farm working expenses have increased for dairy farmers – with a 70-cent rise in the break-even costs that year to $5.87 per kg milksolids. The current breakeven for dairy farmers is $5.95 per kg milksolids.
“Our DairyNZ 2017-18 Economic Survey data also indicated that 3-4 percent of farms are struggling to meet their payments or have very high LVRs (Loan to Value Ratios). Those are the farms which will really see the benefit of this Bill.” DairyNZ encourages farmers to engage with the Select Committee process to ensure a robust piece of legislation that will have a positive impact on the rural sector and farming families.
WHAT IS THE FARM DEBT MEDIATION BILL? The Farm Debt Mediation Bill aims to provide fair, equitable and timely resolution of farm debt issues. The Bill will create a mandatory mediation scheme, for secured creditors to offer farmers who default on payments mediation before they take any enforcement action. Farmers are also able to initiate mediation if they wish.
The objectives of the Bill are to: • Support farmers in financial distress in their dealings with secured creditors; • Enable exploration of options for turning around a failing farm business; and • Enable a farmer with an unviable business to “exit with dignity”.
WHO IS ELIGIBLE FOR THE SERVICE? WHAT TYPES OF LOANS WILL BE INCLUDED? The scheme will apply to farm businesses that are solely or principally engaged in agriculture, horticulture or aquaculture, or any activity involving primary production carried out in connection with these. Debt associated with lifestyle farms, forestry, wild harvest
fishing, and hunting or trapping of animals will not be included in the scheme. The scheme will apply to loans that are secured against farmland, farm machinery, livestock and harvested crops and wool.
WHEN WILL THE MEDIATION SERVICE BE AVAILABLETO FARMERS AND LENDERS? Once the Bill has become law, a period of time is required to approve mediation organisations and mediators. We expect farmers will be able to access farm debt mediation from 1 October 2020.
• More information about the Farm Debt Mediation Bill is available on the MPI website
29
www.age.co.nz Thursday, July 18, 2019
The Farm
Dairy Farming
Succession Challenge
By Brett Gould – Partner, Gibson Sheat Lawyers, Masterton The following is an article I wrote some four years ago. Like myself, many others have written and spoken on this topic before and yet nothing is changing other than farmers are getting older. Seemingly, we need to keep repeating ourselves until the penny drops and this is at a time where we read about the likes of alarm in the farming sector over the RB NZ capital plan! “Given that the average age of farm owners is 58-65 years this topic is an issue across the country. Over the next few years, there will be a large number of farming businesses supposedly changing hands. Two of our major banks have estimated that over the next 10-15 years the farming industry will require between $50-$65 billion for succession and development and, that they will only be able to fund up to two-thirds or so of that. Whilst the trading banks estimate there is $800 million or so that their customers might currently want to invest in farming, and while dairy farmers have the prospect of Fonterra’s Equity Fund there is still going to be an obvious large shortfall. Yet another hurdle for those facing the farm succession challenge. In my experience vendor finance, when available, will be in the realm of at least 60% and sometimes much more. So finance will sit alongside the other major issues that need to be faced in addressing farm succession within the family. As with many things in life there are several ways to address farm succession. Some advisers favour one approach that they have always used and are tied to. Others are certain from the outset what entities should be used and the relationships that need to be created between them. Others, including myself, would not approach any farm succession event with any such preconceived ideas and prefer to see the outcome of the process dictate such matters. The process needs to include consideration of:
1 2
Who are the relevant parties and what are their relationships?
What are the possible takeover and operating options – relative to assets, finance, appropriate personnel and proposed modus operandi? On occasions an appropriate questionnaire completed by family members, possibly initially on a
2019
confidential basis, can be an effective way of collecting the relevant information and determining the further questions that need to be asked and issues that need to be addressed.
into the future
3
Which of the same are viable alternatives that deserve further development and consideration? – a case of option generation, full consideration and determination.
“A team approach is essential” - Brett Gould, partner, Gibson Sheat Lawyers
4
Will one or more of them meet the essential requirements of :
• leaving the parents as comfortably as can be expected given the circumstances that prevail? • the family member(s) who will (albeit eventually) take over being viable and having true potential to succeed? • the remaining family members being treated equitably? • overall reality testing? • use of appropriate structures and drafting of appropriate documentation, including any trust deeds, company shareholder agreements, wills, enduring powers of attorney, trust memorandum of wishes and relationship property agreements deemed prudent for the circumstances? The lawyer and accountant engaged by the parents need to be mindful of the fact that the parents are the instructing clients and that it is their welfare and interests that should be the first priority for them. The child/ children taking over the farm need/s to have a reasonable chance to be successful and any remaining children need to be treated fairly if the plan is to work for all. Other advisers such as rural farm consultants should also be availed of to provide, for example, any required guidance in farming direction and practice and should be availed of where relevant and worthwhile. A team approach is essential and a facilitator can also often add value. Farm succession is a process more than an event and it needs to be undertaken with foresight good judgment, practical advice, understanding of, and empathy with all family members.
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Thursday, July 18, 2019 Wairarapa Times-Age
Dairy Farming 2019
into the future
Increased profitability
and sustainability go hand-in-hand with Qlabs
Several Wairarapa dairy farms are enjoying better environmental outcomes, healthier animals, and most importantly, bigger profits thanks to Qlabs. Based out of Hawke’s Bay, Qlabs uses scientifically proven, patented and trademarked programmes to build healthy soils, healthy farms and healthy profits, with each programme personalised to individual farms. The results have been outstanding, says CEO Raymond Burr, with participants now enjoying an economic farm surplus of over $5000 per hectare. Adopting the right technology can drive forward farm profitability with agr-ecological efficiency the key driver, he says. Ray grew up on the family farm in King Country and after gaining a DipAg at Massey University, returned home to share farm sheep & beef. In 1990 the farm was converted to dairy and after purchasing a neighbouring farm, the number of cows increased to 520. But by 1999, Ray [pictured above] and partner Donna were realising that all was not well. “Our system was relying on the increasing use of urea but production wasn’t increasing and were facing major animal
health issues downer cows, Rotovirus, large numbers of lame cows, an increased reliance on CIDRs to get cows in calf, induction to try and maintain an acceptable calving spread and more. “This ‘breakdown’ in our system also led to a lack of net cash profit. It was also plain to see that our pastures were failing to persist and our soil had gone hard and compacted – we were going backwards. “There were a number of changes in the farm environment that we knew were a result of our current farming practices, for example, the frogs and white-faced herons that used to breed on our farm had vanished completely. “After seeking advice from several highly regarded experts in agriculture, who gave us no satisfactory answers, the decision was made that we would have to think outside the square and control our own destiny.” After much research, the couple enlisted the services of Quantum Laboratories, an independent company that introduced them to the Albrecht system as well as
a co-ordinated soil-plant-animal nutrition programme, converting to a Low to No Nitrogen programme. The following years saw a rapid improvement in animal health, production levels, environmental issues and profits. Over three seasons from 1999/2000 to 2003/2004, the farm had Inductions drop from 200 to zero, CIDRs from 420 to none, the Mating Period fall from 24 weeks to 10 weeks, Empty Rate fall from 12 to 10 percent, Peak Production up from 20 litres/Cow to 26 litres/ Cow, Downer Cows go from 3-7 weekly to none, Mastitis from 5-15 weekly to 16 for year, Urea Use fall from 150 kg/Ha/year – 3 applications to 50 kg/Ha/year 1st week August. There was a cash flow increase in profitability of approximately $250,000 (milk pay out adjusted). After selling the farm in 2007, the couple become 50/50 shareholders in Quantum Laboratories and 2016 became full owners of the renamed Qlabs, going on to develop and patent a tool for pastoral farmers – The Ruminant Nitrogen Utilisation Programme. This enables farmers to work proactively to gain greater pasture to animal production
efficiency while reducing livestock urinary nitrate levels and their environmental footprint. “It’s all about getting the best efficiencies out of capturing carbon and nitrogen and turning that into feed, says Ray. “If you run your farm agrecologically efficiently, then you can tap into the carbon and nitrogen that is free and available through nature’s in-built processes.” The programme also offers a way for dairy farmers to be profitable, even while environmental compliance rules become stricter. For example, Ray spent time in the South Island working with the first dairy farm in New Zealand that could not be sold because it was non-compliant with regional council rules due its high level of nitrogen leaching. “We put it on the programme and after 12 months it was reevaluated. Nitrogen leaching had been reduced by over half, 36 kgs down to 16kgs, and it is now compliant. “This is an opportunity for farmers. The technology is out there right now to get ahead of the game.” For more information visit www.qlabs.co.nz
HEALTHY FARMS = HEALTHY ANIMALS = HEALTHY ENVIRONMENT = HEALTHY PROFIT Q Lab can help you achieve this by custom designing a Fallain™ programme based on • Soil testing • Feed testing • Soil respiration rate • Ruminant Nitrogen Utilisation Efficiency (RNUE) “Achieving economic farm surpluses of over $5,000 per hectare, per year.”
Dairy Farmer, Wairarapa “Colour of pasture a richer and darker green. Cows are well fed and producing very well. Only using half the amount of N as two years ago. Empty rate in cows dropped from 12% previous season to just 4% this last season. The only change in practice was the application of Qlabs recommended blends.”
Dairy Farmer, Southland
Call today for more information on how the Fallain™ Programme works for your business
P 06 857 7333 • M 021 783 539 E info@qlabs.co.nz
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www.age.co.nz Thursday, July 18, 2019
Level up
Dairy Farming
your calf care
2019
New Zealand dairy farmers do a great job of calf care, but what if we could do even better?
into the future
DairyNZ Animal Care Team member Katherine DeWitt introduces the new levy-funded Calf Care Toolkit. New knowledge gives everyone the opportunity to improve, whether you’re starting out in farming or have 20 years’ experience. To help you take your calf care systems to the next level, DairyNZ has developed what we’ve called the ‘Calf Care Toolkit’. And we’re launching it now so you can put it to use during this calving season. We know farmers like hearing from other farmers, so we developed the Calf Care Toolkit with this in mind.
Rhys Darby has found the Calf Care Toolkit is a real winner. [Inset] Katherine DeWitt, DairyNZ Animal Care Team member. tailored feedback on ways to make your calf care even better. Once you’ve decided which areas to focus on, simply follow the web links on the DairyNZ website (dairynz.co.nz/calf-care-toolkit) for more advice and support.
We spoke with farmers around the country to get an understanding of the ‘how?’ and ‘why?’ behind their calf care systems. You’ll see their advice throughout the toolkit.
You can also share your results with your team, veterinarian or consultant.
So how does the toolkit work? By answering 12 easy questions online, you receive instant,
After four seasons on-farm, Rhys Darby remains keen on seeking out new information. “I always
TRIED AND TESTED BY FARMERS
want to have new and bestpractice information, so the team is up to date.” That hunger to learn led to Rhys’ involvement in the Calf Care Toolkit pilot. Using the toolkit helped Rhys to identify that preserving his gold colostrum would improve his calf care – a simple action he’s put into practise this season. “We milk our colostrum cows in the evening and store some of our gold colostrum overnight. We’ve been mixing up the potassium sorbate daily and putting it in our gold colostrum to
maintain its quality until we feed it the next morning. It was a really easy change to make and just required a change of mindset and setting up a system around it.” Rhys reckons the Calf Care Toolkit is a winner and recommends other farmers give it a go. “It’s very easy to use and people can make instant changes. It’s great to have information around what and why farmers are doing things. The quotes from other farmers are fantastic.” Use the Calf Care Toolkit today – dairynz.co.nz/calf-care-toolkit
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• Dairy effluent ponds • Stock water dams
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We also do a wide range of digger work including dam and pond maintenance, water tabling,drain clearing, building sites, demolition, river protection, tree clearing, new roading and farm tracks.
Make Parkers Roading and Contracting your first port of call for earthworks or roading Phone Robin 027 546 8909 Or A/hours 06 379 6757 galtimore@wise.net.nz 553 Kokotau Rd, Carterton