dairy news 16 april 2013

Global processor seeks a slice of New Zealand dairy. Page 3

young, ambitious, successfulRole model sharemilkerPage 26

more Power for farmersNew fence energiser 9

april 16, 2013 issue 288 // www.dairynews.co.nz

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Fonterra downsizing Australian operations as major supermarkets dictate profit margins and competition rages for farmgate milk. PAGE 4

one of the world’s biggest dairy companies has broken ground on a site for a factory in the South Island.

Inner Mongolia Yili Industrial Group wasted no time sending contractors onto the 38ha site along-side SH1 at Glenavy, South Canterbury following the Overseas Investment Office March 28 clear-ance of its $214m development.

The OIO decision summary says Yili plans to “construct a milk processing plant… to produce base powder using various local suppliers. The base powder will be exported to China and used in the production of infant milk formula.”

It will be the third large milk processing plant in South Canterbury, and the fifth in the wider region – possibly sixth if Westland decides to build at Rolleston.

Reaction among local farmers is mixed. Unsurprisingly, Aad and Wilma van Leeuwen, vendors of the site to Oceania Dairy, and in turn to Yili, are pleased the development is finally going ahead.

“It’s a major for South Canterbury,” he told Dairy News. “I don’t think a lot of people realise what’s happening here. Yili are a major player in world dairy markets.”

Van Leeuwen was instrumental in the conver-sion of the Vegetable Processors’ site, 18km to the north at Studholme, to a dairy factory in 2007. The resulting business, New Zealand Dairies, ended up 100% owned by Russia’s Nutritek after falling into financial difficulties during construction. In May last year NZDL went into receivership and Fon-terra bought the site.

Van Leeuwen says competition for Fonterra is a good thing and with Synlait looking to consolidate supply closer to its factory at Dunsandel, central Canterbury, Yili will give dairy farmers in the far south of the province, and North Otago, another option. “The timing’s perfect really.”

Currently 80% of the milk from van Leeuwen’s

12,000 cows goes to Synlait, the balance to Fon-terra. If all their 4.5m kg of milksolids went to Yili, it could be close to a quarter of the plant’s initial requirement, they believe.

“Now they’ve started building and have people on the ground we can start to talk turkey.”

The van Leeuwens say they’ll be looking to form a suppliers group to negotiate with the Chinese dairy company, as they did with NZDL.

Other farmers in the area have reservations about the competition for Fonterra. “There are pluses and minuses,” Fonterra-supplier Robert Smith says.

He won’t be switching supply from his current 2000 cows to Yili, but if he were to develop another property to dairy he’d consider if for the new milk. “You’d have to look at it very seriously because of the capital involved in supplying Fonterra.”

His reservation is whether New Zealand dairy-ing as a whole should be diluting Fonterra’s strength, not to mention Fonterra’s obligation to supply start-up competitors with 50mL of raw

milk/year for their first three years.No one from Yili was available for comment

about the development last week but van Leeuwen says he understands the plan is for a 10t/hour, 19m kgMS/year dryer initially, with expansion to 30t/hour capacity if the milk becomes available.

Fonterra’s high share price will make supply-ing Yili an attractive option for conversions and/or farmers looking to release capital, he believes, and with returns on Fonterra units way above most nations’ interest rates the cooperative’s share value is unlikely to fall. “[Fonterra] says it’ll be $5 by Christmas but I can’t see it.”

Paul Park, managing director of Oceania Dairy, says he understands Yili’s plan is for a slightly bigger factory than the one Oceania outlined in obtaining resource consents for the site, but as it will be capable of producing infant formula, with imported ingredients added to the milk, the intake and waste output will likely be similar.

DAi ry NEws april 16, 2013

news // 3

Be prepared for adverse weather. Pg.18

Setting up for next season’s production. Pg.38

Feed trial sorts out cash-converter cows. Pg.28

news ��3-21

oPinion ��22-23

agribusiness �� 24-26

management �� 28-32

animal health ��33-37

mating management ��38-41

machinery & Products ��42-46

Global processor breaks into South Islandandrew swallowandrews@ruralnews�co�nz

Progress at last: dairy farmers and processing site vendors Wilma and Aad van Leeuwen are pleased to see the development start.

@dairy_newsfacebook.com/dairynews

Dai ry News april 16, 2013

4 // news

Yashili’s plans for Pokenoinner mongolia Yili wasn’t the only Chi-nese dairy company to gain Overseas Investment Office clearance for New Zealand plans last month: Hong Kong stock exchange-listed Yashili was cleared to build an infant formula plant at Pokeno, North Waikato.

Unlike Yili, which has resource consents in place thanks to the groundwork of vendor Oceania Dairy, Yashili still has to gain resource management con-sents, for which it filed applications last week.

Yashili’s operations manager Terry Norwood told Dairy News the proposed plant will make about 50,000t/year of various infant formulas.

“We will be seeking to purchase raw milk on a large-scale but we want to do that from another dairy company. We want a fixed volume every month rather than the seasonal curve we would get buying from a farm-based operation.”

Norwood says Yashili will be “looking to talk with Fonterra” about that supply arrangement, and pos-sibly others. “We’ll also have a big requirement for milk powder.”

Several other large-volume dairy ingredients, typ-ically cheese byproducts such as whey powder and lactose, will likely be imported as they’re not avail-able in sufficient volume in New Zealand. “New Zealand has a very small cheese industry relative to Europe and the US.”

Norwood says Yashili chose New Zealand for its first plant outside China because of our interna-tional reputation for excellence in dairy process-ing, food safety, quality assurance.

And it chose Pokeno for its proximity to ports and other infrastructure.

In China Yashili is the second- or third-largest infant formula supplier “so a very large player,” he adds.

Product made at Pokeno will be exclusively for Yashili. The OIO decision summary puts Yashi-li’s investment at $212m and notes “the applicant already sources milk powder from New Zealand for use in its products.” – Andrew Swallow

Milk supply deal


Fonterra axes Oz brands

australian suPermar-Kets are ravaging all dairy prod-ucts and this will get worse, an expert commentator predicts.

Professor Keith Woodford, Lin-coln University, says Australian supermarkets Woolworths and Coles have huge power, making life tough for food manufacturers.

Fonterra is revamping its strug-gling Australian business, slashing the number of brands to rein in losses and hinting at more factory closures. The number of brands will be cut from 21 to five.

Woodford says in the next one to two years the competition is likely to get even stronger because of as the move to supermarket house brands. “Fonterra is reacting to this by consolidating its brands,” he told Dairy News.

“The driving force is the move by Coles and Woolworths to their own private label or house brands, not only for fresh milk, but for all processed dairy products such as butter, cheese and dairy. This is putting a big squeeze on all other branded products.”

For six months ending January 31, 2013, Fonterra’s ANZ business earned $98 million, 32% less than the previous year’s $145m. The ANZ business includes brands in Australia and New Zealand.

In New Zealand the business, including Tip Top and Anchor, is doing well, but the Australian operation faces a double whammy: increased competition for milk supply at the farmgate and greater trade spending to maintain market share by consumer brands.

Fonterra chairman John Wilson says shareholders will be con-cerned the Australian business is losing money, but is confident a

management plan now under way can return the Australian opera-tions to profit.

Despite the poor performance, Wilson says Australia is a “home market” and there are no plans to withdraw. “We’re there to stay in Australia. The board is confident in the management’s plan to rational-ise the business.”

Fonterra has eight processing plants in Australia; it is closing a 100-year-old plant in Cororooke, Victoria.

Fonterra chief executive Theo Spierings says at the end of the revamp the co-op’s assets in Aus-tralia will look different. “We will continue to rationalise our Austra-lian operations and there’s more to come.”

The co-op will also use milk col-lected in Australia for value-added products at the expense of com-modity products.

Spierings points out that the Australian business is facing pres-sure on both ends of the supply chains. Fonterra is fighting Aus-tralia’s biggest dairy co-op Murray Goulburn for milk at the farmgate. In the consumer business, two major retailers, Woolworths and Coles, are dictating prices.

“We have a large number of brands and we’re rationalising [them]. We want less brands and more focus on advertising and pro-motion and innovation.”

Fonterra’s food service busi-ness is said to be performing well and a network of chefs is expected to grow operations.

“Our food service is strong busi-ness and we’re investing in that…. We’re rationalising the underper-forming businesses and stepping up pace in the business doing well.”

sudesh Kissunsudeshk@ruralnews�co�nz

Fonterra is looking at working closely with Australian chefs to grow its food service business.

a decision last November to reacquire the Norco Milk sales, mar-keting and distribution business from Fonterra has enabled the northern NSW cooperative to sign a 5-year supply deal with Coles.

The Lismore-based Norco Cooperative, which has 160 suppliers, will supply milk to Coles for its private label brand. Before the deal to reac-quire its rights from Fonterra, Norco chairman Greg McNamara said it was contractually bound not to deal directly with retailers.

“The securing of this contract to supply Coles brand milk is a reflection of the opportunities which are available to Norco given that it is no longer restricted in dealing directly with the retail channel,” McNamara says.

“We are delighted to be able to provide this volume of milk to Coles customers and we believe that the contract will be beneficial for our dairy farmers.”

Last week Australia’s biggest dairy co-op Murray Goulburn signed a 10-year agreement to supply fresh milk to Coles for its private label.

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dairynz farmers forum // 5

Volatility ‘is the new norm’

learn to live with the high currency

PROBABLY NOTHING can be done to get the New Zealand currency down, Bagrie says.

“Live with it,” he told the DairyNZ Farmers Forum.

The Reserve Bank could try cutting interest rates. But the Australia Reserve Bank had cut the official cash rate by 175 ba-sis points in the last 18 months to no effect.

Bagrie said it was not the yield potential of our interest rates that was primarily driving the New Zealand dollar.

“What is happening is port-folio flows, or real money, are chasing growth – what coun-tries they think have got good economic prospects,” he said.

“We’ve got economic chal-lenges but when you lie up the opportunity side of the ledger, it doesn’t look too bad.

“That is bringing a sting in its tail – capital is naturally find-ing its way into New Zealand because when they line up our economic challenges we look somewhat of a tall pigmy. Pigmies are not very tall or at-tractive but we win the beauty pageant compared to the US, UK and Europe.”

The only feasible option to deal with the New Zealand dollar was to lift productivity competitiveness.

“We have got to get a bit more creative. I am not sure

the penny has dropped across all parts of society as to what we risk if we don’t get those productivity parameters lifted,” he said.

“That gap that is undermin-ing big parts of New Zealand I don’t think is going to be addressed by the New Zealand dollar coming down. And if it does, funding prices would be going up and commodity prices would be crashing.”

He also repeated warnings about our competitiveness in China saying that the swing producers like America would gearing up and “places like Belarus are starting to milk a lot more cows”.

fonterra’s oPen-ing forecast payout for 2013-14 will be in the high sixes, predicts ANZ chief economist, Cameron Bagrie. And that’s a con-servative estimate, he says.

However he made the prediction against a warn-ing that volatility is the new economic norm influ-encing everything – the global situation, currency, commodity prices.

“I look at macroeco-nomic trends, where the currency is going, where interest rates are going and today there is no trend,” Bagrie told the DairyNZ Farmers Forum in Whangarei this month. “What you have seen for the past few years, with a helluva lot of volatility,

uncertainty – get used to it. That’s the new norm.”

The trend for commod-ity prices for the past 40 years was down, he said. The trend was up at pres-ent but that was marginal. “You are probably talking 2% per year intertwined with a helluva lot of vol-atility. You will see com-modity prices go up 30% in one year and down 25% the next.”

He predicted the milk payout would continue to be higher than it has been historically and would keep having a six in front of it. But it worries him when people start put-ting turbo-charged esti-mates on the table, such as $9-$10/kgMS on what the dairy payout could be sus-tained at.

Bagrie said every-one was focused on the drought but the global

scene was still also a pow-erful influence on key operating variables at the farming level. “It deter-mines whether the New Zealand dollar is high or exceptionally high, whether it’s got a seven in front of it or an eight.

It influences what the Reserve Bank does: when the global economy is wobbly there are inter-est rate cuts, when it is stable there are interest rate hikes.

“When the global econ-omy is awful you will be having a conversation with your bank manager about higher funding costs being passed on, if the global economy is stable those conversations disappear.

“If you went for a march around Europe today you would come to the conclusion that Europe would be pretty

much rooted by next March,” he said. Glob-ally many sovereign bal-ance sheets are not pretty reading.

The average level of debt across the OECD is about 65-70% of GDP. Some are more than 100% and they are not small countries.

The problem has been “massaged” in the last few years with steps taken overseas such as printing money. This had put the global economy through several spirals in the last few years.

“Eventually someone is going to ask ‘where has all the debt gone?’. The answer is the debt has gone nowhere – it is still there. That leads to a tip-ping point – trepidation – and the spiral is in motion again.”

The spiral has occurred

Pam tiPapamelat@ruralnews�co�nz

several times in the last few years with interest rates, the New Zealand dollar and even commod-ity markets doing “more flip flops than walking the beach at Bondi”.

“Right now the markets are doing what they’ve done numerous times in the past few years; they think everything is ok,”

Bagrie says. But to really break the circle of trust – or mistrust – [global] politicians need to show credibility and compe-tency – an oxymoron. He cites the French president wanting to lift spending to 65% of GDP.

But, as an aside, he warned when Europe’s economic model finally

breaks “you will see its rural sector become very smart, very efficient over-night. They will actually become a bit of a threat”.

Bagrie said his message was that “flip flops, uncer-tainty, ups and downs are now the clear trend. Get used to it, this is the new norm. Plan for it in your budgets accordingly.”

Cameron Bagrie addressing the Farmers Forum in Whangarei.

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the Key current issue for dairy farmers is profitability, short and long term, DairyNZ chief executive, Tim Mackle says.

Before the drought DairyNZ estimated 25% of dairy farmers could struggle to meet farm working costs and interest or rent on the $5.50kg/MS payout. With the drought, that figure could rise to 40%, Mackle told Dairy News at the Farmers Forum in Whangarei this month. Average production drop in the North Island was 15%.

The recent Fonterra payout increase would not be enough to offset that, Mackle said. That means many farmers could face an account deficit going into the new season.

Earlier he told the Farmers Forum that New Zealand is not the lowest cost producer globally anymore, based on a three year average, updated this year by DairyNZ’s economics team.

Argentina, Ukraine, Uruguay and

Australia are now lower, but New Zea-land is still the lowest cost producer at scale.

“USA and EU, the other two big exporters, are still higher cost produc-ers but they are not that far away,” he said. “Further analysis show the large farms in California of 2000-3000 cows

– compared to our large farms of 700 and above cows – are more cost effi-cient now on a US dollar basis.

“So the point is we have to main-tain our position. We do enjoy a large amount of profit on offer– we export a third of the world’s trade in milk products, two-thirds of the profits. We can’t let that go. We have to get that message across to everybody – the public, the regulators and all the people, our competitiveness on the world stage is key.”

Mackle said profit underpinned

our competitiveness. Analysis of aver-age farm working expenses from 2002 to last year showed they were steady until a big jump in 2007-08. This could be attributed to the last drought, and at the same time costs such as energy, fertiliser, etc increased. But there was a good milk

price at the time.But the point

was, Mackle said, “we’ve stayed there” with work-ing expenses. The survey was of about 2500 farms so was

a good representation and it showed a jump of almost $1/kgMS. The big-gest movement was feed related costs, up from 80c/kgMS to $1.40/kgMS and it had stayed there.

“I know in times like this you have to bring feed in, and cows have to be fed. I accept that but the point is we’ve stayed there so it’s more than that. We have actually increased

our farm inputs. At that time the milk price went up so margins were main-tained.

“But over that time the debt ser-vicing of those 2000 plus farmers went up by 70c/kg so that is where

the squeeze is coming on. This is the challenge we’ve got – that combina-tion of high farm working expenses and high debt serving and fluctuating milk price. This is why our R&D is so important going forward.”

6 // dairynz farmers forum

DairyNZ chief executive Tim Mackle speaks at the Farmers Forum in Whangarei.

Pam tiPapamelat@ruralnews�co�nz

Profitability key issue on farm

“Our competitiveness on the world market is key.”



CHRISTCHURCH URBAN residents hold the dimmest view of dairy farming of any New Zealand city, a DairyNZ survey has discovered.

Chief executive Tim Mackle says they survey 1000 people every six months and also hold focus groups.

“You might be surprised to know that Christchurch is the city where we have the most problems towards dairy farms; they are 10% below everyone else in their positivity towards dairy,” Mackle says.

“Invercargill is not too far behind, because of land

use change. Right across the country we’ve got issues with that.

“So you do have to respond to these drivers and make the most of opportunities and actively manage those risks; they are threats to our industry.”

dairying concerns deeP south

a Photo in the New Zealand Herald of a cow being shot by a farmer was one of the first images a Chinese film crew saw when they entered New Zealand.

The crew was sent from Sydney by a big Chinese network to report, in the Mandarin language, on the drought and the impact on the economy, said DairyNZ chief executive Tim Mackle.

There was big interest from consumers of nutritional products – Chinese parents – about formula supply for their babies.

“The crew got off the plane, purchased a New Zealand Herald and saw this photo of a guy with a rifle aiming at a cow,”

Mackle said. This was not the image we wanted to project to urban custom-ers, here or overseas, he said.

The film crew drove from Auckland airport to Hamilton through Ngaruawahia to interview DairyNZ at Newstead. There were not normally many cows on that road. When the film crew got to DairyNZ they asked “Have you shot all the cows?” It took 10 minutes to convince the crew that New Zealand still had cows and the drought

wasn’t that severe. Mackle told this story

at the Farmers Forum in Whangarei to highlight “the intense interest in our dairy industry from our largest and growing market and the impact of a picture in a newspaper on what is going on here. We need to take that on board and understand we are in a fishbowl “.

“Industry people will tell you if there’s some-thing in our media or international media, they will be called by many cus-tomers within hours.”

‘Have you shot all the cows?’

The New Zealand

Herald photo.

“Industry people will tell you if there’s something in our media or international media, they will be called by many customers within hours.”

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Succession planning pitfalls

DATes AND veNues:Thursday, April 18, Taranaki,

The Hub, Hawera.Wednesday, May 15, South-

land, Ascot Park Hotel, Invercar-gill.

Tuesday, May 28, Manawatu, Woodville Racecourse.Regional topics covered at the events:

TaranakiSuccession planning, once-

a-day milking, GPS use on farm, nitrogen leaching, Forage Value Index – the new rating system for pasture grasses, pasture persistence.SouThland

Human resources, winter feed supply, nutrient use efficiency,

pasture species and diversity as related to nitrogen leaching, fertility, calf bedding, gibberellic acid.lower norTh iSland

Succession planning, repro-duction, nitrogen leaching, pas-ture persistence, mixed pastures, once-a-day milking, body condi-tion scoring.

Forums to cover regional topics

one of the most anticipated speak-ers at the DairyNZ Farmers Forum in Hawera is Joan Baker, a succession plan-ning expert.

Baker, a respected business con-sultant and author, will offer farmers advice on how to achieve financial suc-cess. However, her particular interest is the major issue of succession plan-ning. She comes from a farming family and knows first-hand the intricacies of succession.

Her presentation will focus on the ‘soft’ side of successions. She says it can be quite easy to organise all the money and the legalities surrounding succes-

sions, “It’s actually very difficult for people to face up to the need to plan for succession and to think about what they want and to have the conversations with all the people they need to have them with to make it happen.”

Baker acknowledges that the most difficult decisions concern the emo-tions involved: “What’s hard is for people to do the thinking and the talk-ing that’s actually required to get them to the point of having a succession plan.”

Baker says there is often an identity issue for farmers as they start a new life after handing over the reins on-

farm. “Usually somebody who farms identifies themselves as a farmer; men in particular tend to have a very strong identity with their work and often they have huge issues about who they will be once they no longer farm. Often they don’t do anything about creating a new life for themselves and it’s terri-bly hard for them to let go of their farm-ing identity.”

Baker hopes her presentation will encourage farmers to begin conver-sations about succession with their families and relevant parties. She says commonly farmers leave it too late. “They don’t talk within the family about

what they want and what the various children want; they’re worried about treating their children unequally and they solve the problem by doing noth-ing a lot of the time.”

Baker wants to help farmers initi-ate the thinking and the talking that’s a necessary prerequisite for getting a successful succession. “I would define a successful succession as the farming couple getting what they want.” She believes the cost of not addressing the issue of succession is “very, very high and that’s a terrible result for a lifetime of hard work.”

Other topics covered at some of the regional events include new research into once-a-day milking, the Forage Value Index – the new rating system for pasture grasses, pasture persistence, the benefits of mixed pastures and strate-gies to reduce nitrogen leaching.

Farmers can view the DairyNZ Farm-ers’ Forum conference programmes for each region and register online at www.dairynz.co.nz/farmersforum.

Registration is free to levy-paying farmers and their staff; there is a $50 charge for all others. Each event runs from 9.30am-2pm. Lunch is provided.

DairyNZ’s Farmers Forum is being held at Hawera this week.


10 // news

new zealand is to share its dairy-related food safety expertise with China.

An agreement signed last week in Beijing will look at the development of a China New Zealand agribusiness ser-vice and food safety centre of excellence in China.

State-owned AsureQuality and PwC New Zealand signed the agreement with China Mengniu Dairy Com-pany Ltd and COFCO Corporation

Initially AsureQuality and PwC will work with Mengniu and COFCO on a dairy-related food safety and farm assur-ance project. As the partnership evolves, other New Zea-land commercial and research entities with agricultural expertise will take part.

AsureQuality chief executive Michael Thomas says the agreement acknowledges the expertise of AsureQuality and the benefits formal collaboration offers for the wider New Zealand agribusiness sector in the Chinese market.

“We believe this partnership agreement will enable New Zealand’s world-class food safety models, agricul-tural systems and skills to be provided on a commercial basis in China.

New Zealand Trade and Enterprise (NZTE) supports the project; it commissioned research by PwC in 2012 to identify international opportunities for New Zealand’s agribusiness sector. Also, agritechnology is a field of inter-est for New Zealand in China, as outlined in the NZ Inc China Strategy.

Food safety, service deal

John Wilson

fonterra chair-man John Wilson says a decision to defer capac-ity adjustment charges will help drought-stricken farmers.

About 50% of suppliers

will benefit from deferring the charges until October, Wilson says. These can be several thousand dollars for an average farmer.

Fonterra’s suppliers are required to forecast how much milk they will deliver in a season to help the cooperative plan and manage its processing.

Farmers who end up sup-plying below the capac-ity forecast are charged on June 20 and those over-supplying are compen-sated at the same rate.

Fonterra doesn’t incur any expense in this exer-cise. However, this year the capacity charges have been deferred to help

sudesh Kissunsudeshk@ruralnews�co�nz

Milk charges deferredcash-strapped farmers in drought areas until Octo-ber 20, when suppliers will get their final payout and dividend for the current season.

Wilson says the co-op will compensate farmers, mostly those in the South Island, who have overshot their forecasts on June 20. The co-op will meet inter-est charges on financing the compensation.

“We are aware of the acute cash flow prob-lems being faced by some of our farmers,” he told Dairy News. “Deferring the capacity adjustment charges is another way the co-op is helping these farmers.”

Wilson says South Island farmers faced sim-ilar charges when bad weather affected their milk supply. The co-op also deferred charges in those instances.

Federated Farm-ers Dairy vice chair-man Andrew Hoaggard is pleased the co-op has

listened to its concerns. “Federated Farmers knew milk volume fore-casts were being under-shot in the North Island especially. Our members

raised legitimate concerns about capacity adjustment charges and so we asked Fonterra to note them.”

Hoggard points out the charges don’t apply to farmers supplying smaller co-ops Tatua and Westland Milk Products.

He says many farm-ers are breathing a sigh of relief on hearing this news. “Fonterra needs to be recognised for doing this because it really is an abnormal season. The idea behind dairy farmers accu-rately forecasting milk pro-duction is to ensure the most efficient use of Fon-terra’s stainless steel.

“For some farmers this season these charges could have amounted to fairly large sums. It also means money, which is already in short supply, will now be saved.”

@dairy_news facebook.com/dairynews

“We are aware of the acute cash flow problems being faced by some of our farmers.”

– John Wilson

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12 // news

THe VOLATILITY in dairy prices could drive people into non-dairy substitutes, says agribusiness expert Keith Woodford, Lincoln University.

But he adds nothing much can be done about price fluc-tuations. “Volatility is something everyone has to learn to live with,” he told Dairy News.

At the start of Fonterra’s 2012 financial year, whole milk powder prices were US$2600/tonne. The latest GDT saw the price touch US$5100/t. Forward contracts have sold WMP at US$6100/t. Fonterra last month lifted its payout to $6.12/kgMS – made up of a milk price of $5.80/kgMS and a dividend of 32c/share.

The drought in New Zealand and reduced milk supply out of Australia and the US are putting upward pressure on prices. Demand for dairy products in China also remains high.

Economists believe Fonterra’s payout could go up further. Woodford isn’t ruling out another payout hike. “Given the lateness of the season, I would expect Fonter-ra’s latest estimates of prices for this season to be reason-ably accurate. But they could still rise somewhat higher.”

Woodford believes it could take months for prices to settle. The fundamentals were in place for price rises prior to the drought but the adverse weather has temporarily sent those prices to non sustainable levels, he says.

“Fonterra has had to drastically reduce the volumes being auctioned on GDT and this has left those buyers who have come to rely on the auctions scrambling for product to keep their supply chains flowing. “

In the long run this excessive volatility is not a good thing for anyone, forcing buyers to look for non dairy sub-stitutes, Woodford says. “But there is nothing obvious that can be done to reduce the volatility, given that it is largely driven by seasonal events, and overseas governments no longer keep buffer stocks to even out these fluctuations.”

sUDesH [email protected]

Prices will drive consumers away

Kingi Smiler

Miraka building UHT plant to supply China

THe MAORI dairy company Miraka, at Taupo, stole the limelight

on John Key’s trade mission to China last week in Shanghai when it signed a joint venture deal to produce UHT milk for the new owners of the Crafar farms, Shanghai

Pengxin.In front of a group of

top New Zealand business people, including Fonterra staff, the chairman of Miraka, Kingi Smiler, signed the deal for his

company take milk from four former Crafar farms and eight local suppliers. This will be turned into high value 1L packs of UHT milk for export and distribution in China by

PeTeR [email protected]

Shanghai Pengxin. Smiler told Dairy News

from Shanghai that Miraka will spend $25 million to build the new UHT plant adjacent to its existing milk powder factory which exports most of its product to Vietnam as part of another joint venture with the largest dairy company in that country – Vinamilk.

“The new factory will take 80 million litres a year and we hope to be delivering some of the new UHT milk to China within about ten months. The UHT milk in 1L cartons will be for the growing ‘liquid milk’ trade in China. All the packaging will be done by us at our factory.”

Because of the lack of refrigeration, UHT milk is the recognised substitute for fresh milk. Fonterra

also sells UHT milk in China, but Shanghai Pengxin’s deal with Miraka is seen as a coup for the Maori venture. Also of note is that Landcorp is managing Shanghai Pengxin’s farms.

Miraka will take milk from just four of the former Crafar farms; the remainder will continue to supply Fonterra.

Some of the farms are outside Miraka’s catchment area. Miraka has a waiting list of would-be suppliers; some them will likely pick up contracts as a result of this deal.

Smiler says the deal, which took about a year to complete, reflects the synergy between Miraka and Shanghai Pengxin. “This is positive for Miraka and the trusts that form Miraka,” he says.

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DROUGHT RAVAGeD farmers are turning to ANZ for financial relief and assistance.

ANZ’s managing director commer-cial and agri, Graham Turley, says the drought is affecting all farmers in some way. No one region in particu-lar stands out to the bank.

Rising costs and reduced revenue caused by the dry conditions have left many out of pocket, nationwide. “As with any serious weather event that impacts dairy and meat production; the effects of the drought won’t just be felt locally, but right through the economy,” Turley says.

He observes that while not all farmers have felt the full extent of the strain, such as those with ade-quate irrigation, most are struggling. “Clearly cash flow for most has been impacted. Revenue has fallen and expenditure has increased,” he told Dairy News.

Some relief has come for dairy farmers with the recent Fonterra pay-out. Turley believes, “The Fon-terra payout is welcome news; it will certainly help to ease the pressure.”

ANZ is responding to farmers’ financial pleas, offering services to provide support where possible. “We are offering farmers a package of options to help meet their short-term cash requirements and re-estab-lish their farms to full performance when conditions improve.”

Temporary overdrafts, access to short term funding and waiving fees are some measures implemented by the bank.

ANZ’s drought response is said to

have helped reinforce its posi-tion as the CANSTAR Best Agribusiness Bank 2013. The title is granted to the insti-tution that delivers and combines the best product and services to customers.

“We are delighted the new ANZ has taken out the award that was won by The National Bank last year,” says Turley.

CANSTAR New Zea-land national manager Derek Bonnar is impressed with the performance of the ANZ. He says, “ANZ’s recent support of drought affected farmers is one example of this.”

14 // news

Westland commissions nutritional plantwesTLAnD MILK Products is making in-roads into the international paediat-ric nutrition market, with the commis-sioning of a modern nutritionals plant at Hokitika.

The new multi-million dollar plant started commercial production in Feb-ruary and already has committed cus-tomers, taking Westland from a dairy ingredient supplier to a new entrant in the infant nutrition sector.

The Westland nutritional plant is a state-of-the-art Tetra Pak system comprising a wet mix batching system including wet and dry macro and micro ingredient handling areas, oil dosing,

vacuum mixing, homogenisation and pasteurisation.

This wet mixing approach ensures a high degree of product composition con-trol and consistency which is crucial for customers.

Traceability of all ingredients is enabled through detailed logs and batch control software.

The products are dried through evap-oration and spray drying, and packed in a newly created high-hygiene area which staff enter via a second red-line zone and wear full coverage hat and facial masks in addition to the usual overalls, hats and boots.

Best in field goes backstop for drought victims

THE INTEREST rate ‘swaps’ controversy simmers on as the Com-merce Commission awaits more submissions from farmers to further the enquiry.

Several complaints have been received from farmers claiming they have been misled by certain banks in the way they promoted the scheme.

Commerce Commission chairman Mark Berry says, “We have information from around 60 complainants at this stage, but will need more people to come forward if we are to form a complete picture of the issue.”

ANZ’s Graham Turley believes the swaps still have “a role to play.”

He says the ANZ, “supports the Commerce Commission en-quiry,” and it will await the findings before commenting further.

The commission is inviting affected farmers and others who may have been involved with swaps to read information on its website and complete a questionnaire.www.comcom.govt.nz/interest-rate-swaps

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eAsIYO HAs a new chief executive: Brian Dewar, previously general manager New Zealand sales for Vitaco Health (NZ).

EasiYo, owned by Westland Milk Products, is a New Zealand company making and exporting kits and ingredients for home-made yoghurt.

Dewar says he sees “great opportunities for expansion in existing and new markets”.

Westland Milk Products chief executive Rod Quin says Dewar comes to EasiYo with a wealth of experience in the dairy and food industries.

“Brian’s experience with Vitaco is directly relevant to his new role, as is his previous employment with Healthe-ries New Zealand and New Zealand Milk. His experience encompasses national and overseas positions, an essen-tial requirement for the leader of a company that exports around the world.”

Dewar, B.AgSc (Hons), Massey University, is a director of Natural Products NZ. Outside of work his interests are family and outdoor sports and recreation.

news // 15

UP TO 60,000ha in Wairarapa could be irri-gated within a decade if plans by Greater Welling-ton Regional Council and other parties come to fru-ition.

Wairarapa tradition-ally goes dry in summer, hence plans to build dams that could be good news for dairying and high value crops, leading to economic growth in the region.

A group called Wair-arapa Water Users is spearheading the project, announcing results of a study by consulting engi-neer Tonkin Taylor into the viability of an irriga-tion scheme. The engineer has looked at possible dam sites and recommended nine options for further investigation: two south of Martinborough and seven north of Masterton and near Mauriceville.

The study is funded by Greater Wellington and the Government’s Irriga-tion Acceleration Fund run by MPI.

Greater Wellington chairwoman Fran Wilde told Dairy News that during winter millions of litres of water pour off the Tararua Ranges into the sea, yet in summer Wair-arapa gets dry. An irri-gation scheme would

transform Wairarapa and the greater Wellington region, she says.

Irrigation would not solve all Wairarapa’s drought problems because much of the region is steep hill country. The group has looked at what’s happened elsewhere in the country, finding many similarities.

“I’ve been looking at Canterbury and of course there is significant dairy-ing there. Other major users of irrigation are growing crops, doing gen-eral arable farming and [growing] export seeds…. Exporting flowers would also be an option for us, but we’d have to fix Wel-lington airport for flights to key markets.”

Wilde says dairying would benefit from irri-gation, so would the envi-ronment. Environmental groups are involved in the project and are part of the governance group, she says. “They understand we are putting a lot of sci-ence into our water inves-tigations on this project and we were doing that for the regional plan anyway. There will be strict rules for the users of this water. We won’t tolerate any environmental misbehav-ior. We will expect people to do the right thing. Many

Draining the Tararuas into Wairarapa

farmers here are doing the right thing; they know it can be done, they just have to make that commit-ment.”

Wilde says quite by

chance Greater Wel-lington is reviewing its regional plan at the same time as central govern-ment is developing its own water management and

RMA reforms. By the time any irrigation scheme is in place, the new rules will also be in place, making it easier for everyone.

The scheme could take

five to eight more years to complete – all going well.

Fran Wilde

New CEO for EasiYo

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news // 17

‘Green drought’ kicks inPRIMARY InDUs-TRIes Minister Nathan Guy says though much of the country is now in a ‘green drought’ phase, overall the drought has been very ‘patchy’.

Speak-ing to Dairy News during a visit to farms in Manawatu and Tararua, he noted that while many pas-tures have ‘greened up’, the country is nowhere near the end of the drought. Some regions have had very little rain – “Northland, parts of Waikato, King Country, Rangitikei and parts of Hawke’s Bay”.

Guy says he is impressed at farmers’

incredible resilience, given the challenges they face: “… drought, floods, snow-storms and earthquakes. They will get through this present crisis and the feedback I am getting is

they are happy with the government response to their plight and the pack-ages we have announced. Most farmers aren’t inter-ested in a handout, what they want to know is that the government cares and responds.”

Most New Zealanders are sympathetic to the

situation rural New Zealand families find themselves in, Guy says. The barbecue season has been too long this summer, and urban New Zealand understands the

drought has caused heartache for rural families

Guy says it’s too early to quan-tify the over-all effect of the drought on dairy

farmers. News of the Fonterra

advance payment has been well received and will help farmers pay for the addi-tional supplementary feed they need.

During a recent visit by Guy to the West Coast he heard from “older” farm-ers that “in living memory they have never experi-

enced a drought of [this] magnitude. One said it was like whole areas had been sprayed with Roundup –

brown and dreadful look-ing. But since the recent rain it’s turned around incredibly quickly and now

all the green tinges are appearing.”

The Coasters, like farmers elsewhere, are

worried about the winter rapidly approaching and soil temperatures falling because of frosts.

TARANAKI HAS some challenging micro-climates, so dairy farmers there will have to care-fully manage their way through to next spring, says DairyNZ consulting officer Katrina Knowles.

Every farm in the region effectively has its own micro-climate and every farm is individual, she says. She and others can give theoretical advice, but it’s the practical implementation that counts.

“So people could take stock off to make sure they don’t overgraze pasture. They can put their stock on a feed pad but that could create problems. So farm-ers need to take a holistic view of the situation to get the right outcome.

“The big thing is

that people have to look at their feed budget. They need to know what feed they have got ahead of them and to manage this right to the take-off date of spring. That’s why they need a full feed budget.”

Knowles says farmers higher up and close to Mt Taranaki will get greater temperature drops in winter when the grass won’t grow. Snow has begun fall-ing on the mountain but it’s anyone’s guess when the grass will stop grow-ing, she says.

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Primary Industries Minister Nathan Guy with Janine and David Swansson at their farm.

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18 // news

IF ALL FARMS WERE EXACTLY ALIKE, ANY OLD FERTILISER WOULD DO.

Our soil types vary throughout the farm, so our fertilisers need to change to suit our conditions. Marty Syron

We have a velvet unit, a bull beef unit and a dairy unit. Each of their soil types are different and need a different management approach.Ted Stevens

My farm is different because I have a stud farm and Altum provides attention to detail with quality products to support me.Grant Campbell

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‘Be prepared for adverse weather’PAHIATUA DAIRY farmer David Swans-son says farmers need to be better prepared to deal with events such as droughts, floods and

storms. After getting caught a few years ago he vowed never to let it happen again.

Primary Industries Minister Nathan Guy recently visited David and Janine Swansson’s farm while touring drought

affected regions. Now in their eighth

season on the farm, they milk 240 cows and pro-duce 100,000kgMS/year. They won the local share-milker of the year compe-tition and are involved in the rural support trust.

Janine Swansson takes Primary Industries Minister Nathan Guy on a tour of the farm.

PeTeR BURKeThey live in a high rain-

fall area – about 1800mm a year which enables them to recover from drought a lot easier than others. Swansson says they suffer from a ‘green drought’ and don’t ‘white out’ like parts of Wairarapa and Hawke’s Bay. So far he’s spent about $4500 on additional feed for his young stock.

“I’d rate my position as comfortable and improv-ing; I’m probably a lot better off than others. We are now on 16 hour rota-tion with our milking and we’ll be able to carry on now to the end of the season thanks to the fol-lowup rain we had a few days ago. Now we can start putting on some nitrogen and building up covers.

After being badly burned several years ago I vowed I would never leave myself short of supplements.”

Swansson says he’s got 14ha of maize to come back and says he’s not intending to buy in supple-ments; rather he wants “to live within the boundaries of the farm”. To help make this possible he has two support blocks.

While many farmers in his area are facing major problems with Horizons Regional Council’s One Plan, Swansson has pro-actively dealt with poten-tial issues. His catchment is not classed as ‘sensi-tive’; his nutrient leaching is a mere 14 units/ha. The target for his farm is 24 units/ha so he’s well in the

clear. Certainly the run-off helps him achieve that number.

Swanssons have invested in technology as part of their ‘future proof-ing’ of the farm. For exam-ple, they have just built a lined effluent pond “bigger than required to future proof the business”. “We also run GPS units on the tractors used for spreading fertiliser. While I can’t put an exact dollar figure on it, I know I am now using 15% to 20% less fertiliser than I was.” They have also put in a feed pad and pay close attention to feeding their cows well.

Swanssons pay a lot of attention to risk manage-ment and planning. When they look at any new ven-

ture they try to identify the negative as well as pos-itive outcomes and have planned options to deal with these.

“I’ve gone away from the sacrifice paddocks we used to use; they were going to be turnips because environmentally pugging the paddocks is not a very good, so hence the feed pad.”

Swansson says a common sense and prac-tical approach is required. He’s seen plenty of theo-retical models from ag stu-dents and consultants, but these have to be adaptable on the farm. In farming one has to plan but at the same time be flexible and above all be prepared for any eventuality.

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news // 19

Energiser links fence and farmerBeTTeR cOnTROL of livestock is the promised payback from work by a Massey University indus-trial designer and Galla-gher Animal Management to produce gear to enable farm workers to discover potential faults in their electric fencing.

Tony Parker, Massey, and Mark Harris, Galla-gher, say the equipment results from international research by a cross-dis-ciplinary team of design, marketing and engineer-ing specialists. Parker is associate pro vice-chan-cellor at the university’s College of Creative Arts; Harris is marketing man-ager at Gallagher. Parker led the industrial design and worked as part of the Gallagher’s project devel-opment team to bring the products to market.

The system includes a fence energiser with a sep-arate, remotely mounted control panel, a porta-ble hand-held fault finder remote, and permanently installed fence monitors that continuously check a zone of paddocks for fence performance. The new system powers an elec-tric fence and monitors its performance. If a fault

occurs the system reports to the user via text mes-saging.

All the fence ener-giser products will be at National Fieldays in June. Parker says they “exem-plify the critical role design plays in creating desirable and internation-ally competitive manu-factured products and services”.

Electric fences’ effec-tiveness can sometimes be hit by, say, bad weather. Harris says these new products “allow the fence to speak to the farmer”, even when he is not around the farm, repre-senting a leap forward in practical electric fence technology.

A drop in fence perfor-mance triggers an alarm, displayed on the energiser controller and simultane-ously sent to the farmer’s phone via text. Power to the fence can be turned off remotely to enable repairs, then restored using the same devices. “The con-sequence for the farmer is that he knows whether the fence is functioning or not,” Harris says.

“Farmers have always had a problem from time to time with fences not

working and they usu-ally only know after an animal escapes, but with this technology we can let them know in advance if there is a fault.”

Parker says the project involved many challenges and opportunities. “Trans-forming customer require-ments and technological possibilities into a desir-able system of products is a wicked problem. You cannot calculate the right answer, you have to design the best solution possi-ble using a combination of research, creativity, visu-alisation, prototyping, cri-tique and testing.”

Parker has worked before with Gallagher on energiser and livestock

weighing and electronic identification products.

Tony Parker (right), Massey University, says the new

products allow the fence to speak to the farmer.

Below: Fault finder remote.

IF ALL FARMS WERE EXACTLY ALIKE, ANY OLD FERTILISER WOULD DO.

Our soil types vary throughout the farm, so our fertilisers need to change to suit our conditions. Marty Syron

We have a velvet unit, a bull beef unit and a dairy unit. Each of their soil types are different and need a different management approach.Ted Stevens

My farm is different because I have a stud farm and Altum provides attention to detail with quality products to support me.Grant Campbell

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20 // news

Otago bucks awards trend

sAnDeRs Off TO THe fInAL

BEN SANDERS beat a field of 14 entrants to win the 2013 Otago Dairy Trainee of the Year title and, unlike the region’s top SEFOTY and FMOTY entrants, progress to the national awards in Wellington.

The 25-year-old Clinton herd manager is focused on growing his asset base by increasing cow numbers, which he then leases. It’s part of his plan to be a farm owner by 40.

Sanders and other winners

were announced at an awards night in Balclutha, April 6, attended by 180.

“It was the only region that was down.

“Every other regional dinner was a sell-out,” notes Keeping.

RecORD enTRIes in this year’s Dairy Industry Awards, which wrapped up late last week with the West Coast/Top of the South region, were achieved despite a record low in Otago.

Organisers are at a loss to know why the farm manager, and in par-ticular sharemilker/equity farmer (SEFOTY) categories failed to attract sufficient entries to hold a credible competition in the region.

“If we knew the reason, we’d have fixed it,” national convenor Chris Keeping told Dairy News. “We know the number of 50/50 sharemilking positions in the region is declining and we often struggle for entries in the region.”

This year SEFOTY entries bombed to just two, and FMOTY entries only marginally better at four. With such low entries organisers didn’t consider the awards would be a worthwhile competition but rather than pull the pin completely, entrants were given the chance to go through the judg-

ing process and the feedback from that. Similarly, sponsors were given the option of presenting their merit awards, or not.

No outright SEFOTY or FMOTY winners were announced, so neither will progress to the national awards in Wellington in May. “To run a credi-ble competition you must have at least seven entries, we believe,” says Keeping.

A highly commended award was made in the SEFOTY category, going to Shaun Thomas, a 50/50 sharemilker with 470 cows on David and Christine Benny’s farm, Balclutha.

In the FMOTY competition Neil Molina, who manages a 2300-cow farm for Greg and Kelly Kirkwood’s Concept Holdings at Ranfurly, was named Best Otago Farm Manager of the Year.

Local convenor Lorraine John-son says while it is unfortunate for Thomas and Molina that the entry level wasn’t sufficient for them to progress to the national level, they are

eligible to enter the awards again next year, which isn’t normally the case for regional winners.

“We felt really bad for the group that did enter,” she told Dairy News. “They’re very motivated, capable young people.”

SEFOTY and FMOTY entrants in the region were told there would be no progression to the national level for the region’s winners before judg-ing commenced, and given the option to withdraw, she adds. “They all decided to carry on which was great.”

Johnson and husband Tim, who won the region’s SEFOTY title in 2011, pulled out all the stops to encourage entries, even cold calling on farms to see if a manager or sharemilker was part of the set-up, but to no avail.

Part of the reason for lower entry levels than elsewhere is simply a num-bers issue, she suggests.

“There are only about 400 dairy farms in Otago whereas there are 1600 in Southland, so pro rata we probably didn’t do so badly.”

Ben Sanders is the only Otago representative at the dairy awards national final.

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news // 21

Another Canterbury clean sweep?

YOU HAVe to be in to win.It’s an old saying, but for three lucky Dairy

Industry Awards entrants, that’s all it took for each of them to land a $4000 farm bike.

All who entered the awards before December 1 and underwent the judging process were eligible for the earlybird prize draw of three Honda XR125 Duster farm bikes – one for each category of the awards.

Of the record 566 entries, 428 were eligible, with the SEFOTY bike going to Steve Henderson and Tracy Heale, Winton, the FMOTY bike to Hayden George, West Coast, and the trainee bike going to Reece Cox, Taupo.

“It’s a generous incentive and has helped to get entries in early and dissipate the late rush,” national convenor Chris Keeping says.

Early entrants win bikes

cAn cAnTeRBURY repeat its clean sweep of the Dairy Industry Awards come the national event in Wellington in May? That question was posed at last week’s Canterbury / North Otago regional final awards night in Ash-burton, prompted by the region’s representatives having taken all three titles last year.

Taking the crusade to the capital for the region this year will be 50/50 sharemilkers Morgan and Hayley Easton, who won the Sharemilker/Equity Farmer of the Year title,

Farm Manager of the Year Richard Pearse, and Dairy Trainee of the Year Adam Caldwell.

Judges said the share-milker/equity farmer con-test was tight, and they were extremely impressed with the calibre of entrants and the businesses they run.

Morgan (30) and Hayley (27) have for five years developed the 365ha property of David and Clare Easton on the south side of the Waitaki river, increasing cow numbers from 450 to 1350.

It’s the first time

they’ve entered the awards and they won $18,600 in prizes. “We wanted to have most of the development done before we entered and have the farm both running and looking the way we wanted,” they said.

Morgan is Bache-lor of Agricultural Sci-ence, Lincoln University, and Master of Science in Agricultural Economics, obtained on a Fulbright Scholarship at Purdue University, USA. Hayley is Bachelor of Arts in Geog-raphy and Management, Leeds University, and was an assistant accoun-tant until the couple’s first child was born last year. “We feel the knowledge gained from our education has helped us achieve our farming goals.”

They aim to own a farm within five years and

they’ve expanded their AI programme to increase young stock and improve herd breeding worth with that in mind. They’re also planning to take on a second sharemilking posi-tion.

SEFOTY runners-up were 50% sharemilkers Andrew and Hayley Slater from Dorie; lower order sharemilkers Nigel and Gina Gardner, Culverden, were third.

FMOTY winner Pearse contract milks 955 cows for Graham and Jane Thomas at Ashburton. He is committed to two more seasons with the Thom-ass and then plans, with partner Susan Geddes, to go sharemilking or into an equity partnership. To progress they believe a good image “is crucial to our success”. “We highly

value our reputation in the dairy industry.”

Likewise Pearse values the input of staff, farm

owners and rural profes-sionals. “We aim to ensure – through good commu-nication – that people feel

appreciated and involved in the running of the farm and the business side of it.”

2012 Sharemilker/Equity Farmer of the Year title holders Sarah and Enda Howe.


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Harsh winters and springs need a sustainable fertiliser that supports our high stocking rates.David Bielski

My farm is self-contained growing my grain and silage, so I don’t have to buy in any feed.Glenn Taylor

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22 // OPINION

RumINatINg

EDItORIaL

mILkINg It...

22 // OPINION

Size doesn’t matterNEWS THAT Miraka has signed a multimillion-dollar, joint-venture deal with Shanghai Pengxin to produce UHT milk shows how smart our small, entrepreneurial companies can be.

Let’s take nothing away from the great work Fonterra and its predecessor the NZ Dairy Board have done; New Zealand needs them. But the Miraka deal shows the value of these inno-vators. In just two years Miraka has set up a joint venture with the biggest dairy company in Vietnam, Vinamilk, and is ship-ping product to many parts of the globe.

It has a waiting list of suppliers which speaks volumes. This latest deal with Shanghai Pengxin shows that big overseas inter-national companies have faith and confidence in some of our niche providers.

The Miraka deal is timely in other ways. It comes just days after an MPI report which highlights the potential of Maori agriculture: $8 billion dollars if Maori land was managed to its potential.

Miraka is showing what can be done; so are many other Maori trusts – role models for Maori and pakeha farmers. Take PKW in Taranaki, Fonterra’s biggest milk supplier in the region, producing upwards of three million kgMS/year. And dozens of other trusts and incorporations are worthy of mention.

The example of Miraka and its trusts should inspire others to follow suit and we would hope Miraka will share knowledge to lift the performance of others.

The challenge for Miraka, as with all successful small com-panies, is to retain competitive advantage. It must also keep fostering the ‘personal touch’ – workers in tune with manag-ers and leaders to achieve company goals. Miraka has a strong company culture and the positive spirit of the workforce is evi-dent when you visit their plant.

Being small and successful is not easy; hopefully Miraka can continue to do deals and retain a ‘family’ culture.

Got somethinG on your mind?

post to: Letter to the editor po Box 3855, AuckLAnd 1140. or emAiL: [email protected]

GOT SOMETHING on your mind about the latest issues affecting our dairy industry? Put your pen to paper or your fingers to your

keyboard, and let our readers know what you think. Contact us by either post or email. Don’t forget to put your name

and address. Note: Letters may be edited.

‘Hally mclally from Donaldson’s Dally’CABINET MINISTER Steven Joyce last week launched the Chinese language version of the children’s book Hairy Maclary from Donald-son’s Dairy at an event in Shanghai. Great news for China’s kids, but Milking It wonders what will be lost in translation. ‘Dairy’ is a peculiarly Kiwi word for local store: even readers in other English speaking countries as-sume the dog’s from a dairy farm or small milk processing factory. So what’s the betting we get Hairy Maclary from Donaldson’s Farm in the translation? Or should that be Hally Maclally from Donaldson’s Dally? And as for the follow-up story, Hairy Maclary’s Bone, no doubt some Chinese will think butcher Samuel Stone has ulterior motives in giving our dog a bone!

a bob each wayTALK ABOUT having your cake and eating it too. The New Zealand Herald business pages last week prognosticated about how the drought was going to knock 0.7% off growth, and other such dire predictions.

But further on in the real estate pages, in a classic exhibition of self-interest, the Herald reassured readers that the drought would have no impact on the farm real estate market or, presumably, real estate advertising revenue.

Needs a cuppaAS MUCH as Milking It hates to accuse the green brigade of hysteria, this rates a mention: Soil & Health says GE crops pose more than a just a wee threat, they will actually wipe New Zealand out.

“Inevitable cross contamination by GE crops, if released in New Zealand, pose a $59 billion threat to the New Zealand economy,” wailed Debbie Swanwick, Soil & Health. By her reckoning, that is the total dollar value of our agricultural, forestry, fisheries and tourism sec-tors… annihilated. Some-one needs a cuppa and a lie down.

Cool stuffGIVE A cow a cold shower and it will produce more milk. That is the hope of the owners of a dairy farm in Dubai, which has installed a state-of-the-art shower system for its 11,000 cattle.

So far, the cows at the Al Rawabi dairy farm in Dubai’s Al Khawaneej seem well pleased with their showers. “When they lie down, it means they’re comfortable,” said Rami Hamad, the farm manager. “And since they started showering, they’ve been very happy.”

Last February, the farm installed 20 motion-sensing shower sprinklers that switch on when a cow is under them. The farm’s 2300 cows shower each time they are milked – three times a day; the other 8700 shower once a day.

dai ry news april 16, 2013

OPINION // 23

The drought has disrupted farm management plans this summer in Hawke’s Bay and other parts of the North Island. PHoTo: TrISH HarT

Thriving in adversity needs precise timingmOSt DaIRY farms are only slowly emerging from the drought that has been a sharp shock to farm management plans this summer. For most farms the production season has ended abruptly, and prospects for autumn and winter have been affected dramatically.

Regardless of cause, such events reinforce how much the manage-ment of adverse events depends on the timing and execution of deci-sions. What are the key ingredients of an effective response?

It has long been recognised that the difference between the top 10% of farming operations and the next group down is their timing. Most operations respond to adverse events with similar strategies; what separates the two groups is that the top 10% group not only does the right thing, they also do it at the right time. This requires quality information, consul-tation with professionals to secure ‘sounding board’ opinions, and pro-active communication with key stake-holders – especially financiers.

Firstly, ensure decisions are based on credible information, not just on imagination. As pasture growth rates, climate outlooks and soil moisture deficits change by the day, planning a farming operation becomes a roller-coaster ride.

The usual reference points avail-able during a more typical transition between seasons are less available so the impact on feed reserves, cow condition and production forecasts becomes much more difficult to mea-sure.

Farmers who put extra effort into securing reliable information and analysis of their position are better positioned to respond. Almost all the operations I work with have a farm supervisor or agronomist involved in

their on-farm planning. A key benefit of this is that they build up a history of accurately measured data on farm and herd performance.

This offers even more advantage during times of climate challenge through greater accuracy of planning and budgeting. A key strength is an objective view benchmarked against similar operations for improved per-spective.

Collaborating with these profes-sionals when forecasting financial effects adds significant value through greater confidence in budget assump-tions. Synergy between clients and their professionals enables robust assessment of all likely scenarios -- especially the worst-case outcomes that can be tempting to avoid.

The next priority is to keep finan-ciers and other key stakeholders informed.

The policy of delivering bad news early ensures everyone has time on their side. This usually results in a more constructive response as financiers recognise that everything possible is already being done to mit-igate the effect of adverse events. It has been pleasing to see supportive response of banks during these diffi-cult times.

Perhaps the most important objec-tive in these situations is to ensure the impact on the business is as much as

possible ‘ring fenced’ to the current season. This is illustrated by the cur-rent situation where the likelihood that milk prices will rise because of international shortages of dairy prod-ucts will most likely flow through to improved prices next season.

Those who have had the courage to make the hard decisions about the current season and protect next year’s output are likely to be well rewarded. It’s not easy to forego the perceived cashflow benefits of continued pro-duction. However ensuring herd con-dition and pasture covers are on track to achieve the best production next season is likely to be a much more profitable strategy.

The final and most important step is to ensure everyone’s mental approach remains right. Local and national news media again seem to have been obsessed with negative comment about the drought. You cannot get away from this, but you can limit your exposure to it. Keep-ing work/life balance right, planning proactively, working closely with financiers and sharing concerns with family, friends and business asso-ciates will increase the chance of coming out on top. • Kerry Ryan is a Tauranga agribusi-ness consultant available for face-to-face or online advice and ideas. Contact him at www.kerryryan.co.nz

“Local and national news media again seem to have been obsessed with negative comment about the drought. You cannot get away from this but you can limit your exposure to this.”

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24 // agRIbuSINESS

Young go-aheads typify contest winnerstHE gOaLS of the 2013 South-land Sharemilker/Equity Farmers of the Year, Don and Jess Moore, are to optimise production and maximise profit to reach farm ownership and enjoy a balanced lifestyle.

The Moores, who won $18,400 in prizes, aim to achieve this by grow-ing their business using sustainable farming and human resource prac-tices.

The other big winners at the 2013 Southland Dairy Industry Awards held at the Invercargill Working-men’s Club were Daniel and Emma Todd, the region’s 2013 Farm Man-agers of the Year, and James Warren, the Southland Dairy Trainee of the Year.

Don and Jess Moore, aged 28 and 26, are in their second season 50% sharemilking 950 cows for Jeff and Edith, and Bruce and Sue Cunning-ham at Gore. They have been on the farm five years, spending two years managing, and a year lower order sharemilking before progressing.

A former deep sea fisherman, Don Moore, won the 2010 Southland Farm Manager of the Year title. The couple say there are many benefits to enter-ing the awards.

“It makes you look at your busi-ness through a microscope and delve into the how, why and where to in every aspect – from the day-to-day running to our goals for the future,” he says. “We also enjoy the oppor-tunity to network with some of the standout leaders in the dairy indus-try, as that is what makes this indus-try so strong.”

The couple say communication and maximising low cost production are strengths. “On a large farm, it’s

important that people are kept well informed. For this reason we focus on keeping up communication and having systems that assist us to do this so that everyone knows what they are responsible for.”

Second in the Southland share-milker/equity farmer contest were Tokanui equity farm managers Chris and Lynsey Stratford, who won $10,400, while Winton equity share-milkers Andres Patino and Jorgelina Leiva were third, winning $5200.

The 2013 Southland Farm Man-agers of the Year, Daniel and Emma Todd, want to grow their livestock numbers quickly and profitably so they can progress to 50% sharemilk-ing within four years.

The couple, who won $9150, con-tract milk 377 cows for Rob and Karen Duthie at Rimu. “Our contract milk-ing position is enabling us to grow our livestock numbers, and thus helping us to grow our equity and reach our goals faster.”

The Todds say they work well as a team, as they are able to use their individual skills and expertise to the businesses’ advantage. Daniel Todd, aged 25, has a practical farming back-ground while Emma Todd, aged 26, holds a Bachelor of Commerce and is an associate chartered accountant.

“Our practical farming experience mixed with accounting, taxation and human resource management skills have been a successful combination for us, enabling us to focus on the parts of the business we love to do and giving us more time together as a family.”

The couple had entered the awards once before, saying it forced them to step out of their comfort zone. “We loved the challenge and the ability to network with other farmers and industry representatives.”

The 2013 Southland Dairy Trainee of the Year, James Warren, says there are great opportunities to progress in New Zealand’s dairy industry.

Don and Jess Moore.

Drought erases SoE’s profit forecastStatE FaRmER Landcorp says the drought has wiped out the $6-8 million profit it forecast for the 2012-13 finan-cial year and forestalled a full-year div-idend.

For six months ending December 31, 2012, the SOE reported a net profit of $2.5m and, as the half-year report went to the printer, it forecast an operating result of $6-8m for the full year.

“Since then, Landcorp has experi-enced the worst widespread drought in many years.

“As a result, it is unlikely the com-pany will report an operating profit for the year and consequently it is not likely to pay a full year dividend.”

Milk production was up 6% for the half year compared to the previous year. But milk production for the full year was expected to take a hit.

A highlight of the half year was the launch of its partnership with Shanghai

Pengxin, the buyers of 16 former Crafar farms. The company has paid $21.4 mil-lion stocking the farms in central North Island and Manawatu.

Current sharemilker arrangements continue during the transition period, until the start of the 2013-14 season. Plans for the farms (5689ha effective) include more spending by Shanghai Pengxin to lift productivity and a Land-corp-led farm training programme from 2014-15 onward.

On the Wairakei Estate dairying complex near Taupo further areas of forest are being cleared for conversion to pasture.

Landcorp is working with property owner Wairakei Pastoral Ltd on plans to grow the estate’s herd over the next four years (from 7000 cows currently). The six current dairy units will be recon-figured for more effective operation as more pasture becomes available.

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agRIbuSINESS // 25

Canadian co-op studies FonterraCaNaDIaN DaIRY farmers Don Dietrich and Larry Parkin are two members of the Gay Lea Foods Cooperative dele-gate body, the equivalent of Fonterra’s Shareholders Council.

As part of their cooperative’s train-ing programme, Diet-rich and Parkin got the task of examining how dairy co-ops operate in New Zealand, so they approached Cooperative Business New Zealand for assistance.

Particularly interested in how Fonterra operates, they want to compare this with the Ontario Supply Management system which markets milk by a quota system and pays farmers different prices for butterfat, protein and other solids.

The two are keen to learn to what extent New Zealand co-ops are suc-cessful in looking after members’ interests, and whether the direction taken is responsible for their success. An impor-tant aspect of their study is a comparison of the leg-islative and business cir-cumstances of Canada and New Zealand, and what result this has on the strategic directions dairy

co-ops take. To what extent, they

also want to know, have cooperative values and principles guided the development of dairy cooperatives, and how has this differed in the two countries. They are also looking at external influences on dairy coop-eratives, such as what hap-pened when New Zealand dairy products lost guar-anteed entry to the UK in 1973.

Formed in 1958 and owned by a quarter of Ontario’s dairy farmers, Gay Lea Foods Coopera-tive makes products from which its 2011-12 revenue was C$539 million. Farmer members own three shares for every 1000L of milk produced and get a ‘patronage’ payment of C$0.90 per hectolitre on top of the milk price.

The Gay Lea Foods del-egate body is large – 60 members elected in four zones. Meeting quarterly they elect two delegate members to each of three board committees: audit, governance, and train-ing and development. Don Dietrich is a delegate to the governance commit-tee.

With the slogan, ‘Better Together’, Gay Lea Foods promote themselves strongly as a cooperative. They measure success not

RamSEY maRgOLIS

in brief

just in financial terms, but as a reflection of an approach which leverages cooperative principles and values to create what they describe as ‘a winning combination’ of employ-ees and members, prod-ucts in the market place, customers and vendors, as well as the charities, other co-ops and the co-op asso-

ciations they support.The Gay Lea ‘Leader-

ship in Governance: By Farmers For Farmers’ pro-gramme, in which Dietrich and Parkin are taking part in an inaugural advanced level programme, was rec-ognised with a Coopera-tive Governance award at the recent Canadian Cooperative Association

annual meeting.The question that

came to mind after talking with Dietrich and Parkin, however, is: what can New Zealand’s dairy cooperatives learn from Gay Lea Foods?• Ramsey Margolis is execu-tive director of Cooperative Business New Zealand.www.gaylea.com

Vodafone connects with Fieldays

VODAFONE WILL be the National Fieldays In-novation Partner for the next three years.

The Fieldays Innovation Centre has as its centrepiece an inventors contest. Entrants are educated on how to take the next step towards commercial success. News media take a close interest in the products that emerge.

Vodafone will have an important role in helping individuals and agribusinesses innovate and demonstrate the value they add, Fieldays says.

Vodafone head of rural marketing, Darren Hopper, says it has a strong relationship with Mystery Creek Events Centre and they recognise the importance of National Fieldays.

“Vodafone is excited about our relationship with Mystery Creek and the Fieldays Innovation Centre. We look forward to supporting and help-ing showcase Kiwi innovation.”

The company will set up a prize fund for a new Fieldays Innovation category – ICT (in-formation and communications technology). $5000 will be offered for technology and support including hardware, connectivity and technical advice.

“The innovations Centre and competition will play an important role in defining new ways of working,” Hooper says.

Don Dietrich

C

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Y

CM

MY

CY

CMY

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26 // maNagEmENt

Share, equity farmer started young

James Courtman

JamES COuRtmaN is young, ambitious and already successful.

The 28-year old has Australian and Chilean dairy work experience. He’s currently 23% share-

milking 870 cows for Mark and Dianne, and Richard and Karyn Townshend, Ngatea.

Earlier this year he won the 2013 Auckland Hauraki Sharemilker/Equity Farmer of the Year title. In February he contested the regional Young Farmers Competition final, win-

ning the AGMARDT agri-business challenge.

Courtman says he entered the dairy awards for the first time “to chal-lenge myself, to develop better goals, and to try and win”. The son of a dairy farmer, Courtman says he has taken interest in the industry from ‘day one’.

“It’s been a pretty good journey so far, I’ve learned a lot,” he told 100 farmers at a field day on the farm.

Courtman’s philosophy is to maximise production and keep costs down. “The strengths of the business are its focus on operating costs and executing the production plan, which happens because of good skills and strong account-ability.”

Having good staff is also a key factor. Court-man employs three staff. “When my staff fail, I’ve failed,” he says. “Human resource is a major aspect of this business. I insist on building and develop-ing staff as well as having clear communications with farm owners.”

Courtman holds weekly meetings with staff and files weekly updates with Richard Townshend.

A Bachelor of Com-merce from Lincoln Uni-versity, Courtman aims to own up to 30% of a 200,000kgMS business

SuDESH [email protected]

tOP PERFORmERS

THE FIELD day was attended by six parties asso-ciated with Dairy Direct, a consultancy company operated by Richard and Karyn Townshend (Townshend Group):

■ Regional Sharemilker of the Year James Courtman.

■ Michael Courtman (brother of James) and partner Laura McGuire. Both entrants in the awards in 2011 at dairy assistant level. Share-milking on the Challis family farm, a Dairy Direct-overseen 500 cow operation which is growing to 800 cows next season.

■ Paul and Amy Koppens, 2012 winner Farm manager of the Year. Started in the group June 2012 with a 280 cow sharemilking position. Increasing to 475 cows 2013-14.

■ Michael and Claire Newson, 2012 runner-up Sharemilker of the Year. Started in 2005 as sharemilkers on 180 cows, increasing to 400 cows and then 500. Left last season to take up their own 50/50 sharemilking position.

■ Jono Singer and Aimie Law, 2013 sharemilker entrant. Started in the group six years ago as a farm assistant. Progressed to sole manage-ment of 240 cows for three years. Left for a larger position for two years and back in the group as a 380 cow sharemilker in 2013-14.

■ Adriaan and Tassia van Rooyen,2013 share-milker entrant. Just finishing their first year sharemilking 500 cow stud operation.

within two years and 100% of the business by age 35.

Developing leadership and exploring other inter-ests outside the farm are also on his mind. Court-man, who also won the Federated Farmers lead-ership award, is chairman of the local young farm-ers club. He’s also in the Kaihere cricket club and is keen to taking a coach-ing role.

Courtman thanked the Townshends for giving him the opportunity to develop his dairy manage-ment skills.

Mark Townshend says profitable farming is almost impossible without good staff. “Sometimes people say corporate farm-ers only care about prof-its and not people. I don’t agree. Profitable farming is difficult, maybe impossi-ble, without good recruit-

ment, good development and providing good per-formers with opportuni-ties.”

Mark recalls an old saying his father Gray told him 30 years ago: bad bosses have a knack of finding bad employees. Presumably the converse also applies, he says.

Townshend says he

sees nothing wrong with working young people hard provided they are rewarded with remuner-ation and opportunities. This is where corporate farming can be great, with opportunities for justi-fied internal promotion, he says.

From left: richard Townshend , James Courtman and Mark Townshend.


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28 // maNagEmENt

Cash-converter cows sorted in feed trial

SCIENtIStS FROm DairyNZ, LIC and the Aus-tralian dairy industry have been able to prove that some calves and cows are more efficient converters of feed than others.

A trial to this effect, running for almost six years at the West-pac Taranaki Agricul-tural Research Station (WTARS), near Hawera, was instigated because no data was available on this subject for dairying, says Kevin Macdonald, a senior scientist with DairyNZ. He has worked on the trial since it began.

“We didn’t know whether the cow that pro-duced the most milk ate more or less than the cow that produced a lot less milk. So our aim was to

identify gene markers to indicate which were the most efficient converters of feed into product.”

The trial began with calves, about 1050 in feed facilities in New Zea-land and a similar number going through a research centre in Australia. “We couldn’t put that many cows through the trial, so the calves were used as a proxy for cows in respect of live weight gain. The calves were 6 – 8 months of age and they were in the pens at WTARS for 60 days. We measured their intake each day and weighed them three times a week. They were fed lucerne cubes imported from Canada for the trial. From these trials we were able to calculate which animals used feed more efficiently than others.”

The use of the lucerne cubes was critical to the

trial: moisture levels in pasture can vary, but the cubes provided a con-sistent feed quality that could easily be weighed and hence provide accu-rate data. Kevin Mac-donald says while all the animals may have eaten a bit more feed than normal, this didn’t matter because the trial was to obtain accurate data and compar-isons.

The results of the calf trials are surprising. The most efficient calves ate up to 20% less feed than the inefficient, suggest-ing a saving to a farmers of $180-$200 in taking them though from weaning to when they first calve.

The next stage of the trial has been to see if the feed conversion efficien-cies in calves could be translated into lactating cows; the answer is ‘yes’.

Macdonald says the dif-

ference in lactation was not as pronounced as in the calves – about 4%.

Using gene markers

LIC identified for ‘resid-ual feed intake’ from the calves, 214 five- and six-year-old cows were

selected and bought from Waikato and Taranaki. They were relocated to WTARS and over a season

208 were put through the feed facilities and fed lucerne/pasture cubes imported from Australia.

Kevin Macdonald says the trial has identified gene markers in cows who are efficient converters of feed.

PEtER [email protected]

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maNagEmENt // 29

Cash-converter cows sorted in feed trialThe results were similar to those from the earlier lactating cow trial. The cows identified by the RFI markers as being most efficient were the most efficient.

A trial on 44ha involv-ing 126 of these cows, with a range of stocking rates, is nearing the end of its second lactation. The aim of the trial is to study how cows with differing effi-ciencies react to a range of stocking rates.

As well as identifying efficient cows, part of the trial measured the amount of methane given off by individual cows, Macdon-ald says. “When we put the cows through the res-piration chambers at the centre for greenhouse gas emissions in Palmerston North there was no dif-ference in the amount of methane being produced from each kg of drymatter

eaten. So if efficient cows eat less, and produce the same amount of milk, they will have a lower methane production per kg of MS produced.”

This trial has only involved Holstein Friesian

cows. Macdonald says the Australian scientists are planning to do some work with Jerseys and he hopes New Zealand may be able to piggyback off their work. “Because the results we got from the Holstein

Friesians between our-selves and Australia were almost identical, we may be able to rely on their results from the Jerseys without having to do it ourselves. At that point we can look at the kiwi cross.”

‘World-class’ science reveals feed convertersDaIRYNZ’S CHIEF scientist, Dr Eric Hillerton says the findings of a feed conversion study by his organ-isation, LIC and the Australian dairy industry has exceeded his expecta-tions and is world class science.

Hillerton announced the results of the trial at a field day in Hawera recently. The researchers discov-ered that certain calves and cows have specific genetic markers which identify them as more efficient con-verters of feed to food.

This is exactly what the world needs, Hillerton told Dairy News. Organisations such as the Food and Agriculture Organisation (FAO), looking for ways to feed the world’s increasing population, see this sort of science as critical for the future.

“They are looking at the macro pic-ture for food production to feed the supposed 9.1 billion people [alive] in 2050. We are short of high value foods like meat and milk. They point to the importance of improving the conversion of rel-atively low value fibre feeds; the stuff we feed our ruminant ani-mals is where a lot of progress can be made. So being even more efficient converters of fibres like grass into human food-stuff is a major challenge.”

Hillerton says New Zealand is noted in international science, and at a ‘macro political’ level is doing important work. “It’s good to feel

we’ve got New Zealand dairy farmers ahead of the game. All the trials we’ve done stack up to show we’ve got a real ‘stretch’ piece of sci-ence here that’s something new, novel – some-thing our dairy farmers can exploit.”

It’s all about “stretch”, says Hiller-ton, “… being brave and having bold ideas and going on and trying. Some

will succeed and some won’t and unless we stretch we’ll never know. I tell my young scientists often that there is nothing wrong with a neg-ative result. It just tells you which direction you should be going in. You ask a question, you get an answer and it helps you ask the next question.”

Hillerton say he’s immensely proud of the individuals with the imagination to have done the work and put together the partnership. “It is bigger than any individual group could possibly do.

What we have to do next is to take this achievement and look at how can build on it. In New Zealand we are small. We can’t afford one of every-thing. So we have to focus on part-nering, on- or offshore, and recruit the people who can help us achieve our targets.”

Eric Hillerton

a calf ready for feeding.

Lucerne cubes imported from Canada for the trial.

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30 // maNagEmENt

Time to embrace irrigation culture

tHIS YEaR you’ll have learned the value of even small amounts of rain-fall – as if you didn’t know

already. You will realise that about half the rain that arrives on your prop-erty runs off the farm in winter so the next revolu-tion in dairy farming will be to store winter rainfall

StuaRt REIDand irrigate it in summer. Even if the amount of water stored is small, it may keep your farm alive.

Those of you who built larger effluent ponds will have managed to keep some life in your efflu-ent block pasture at least. Dead pasture only gets back to full performance after a couple of years fol-lowing its re-sowing, so not letting it die off in the first place is important.

It may save the cost of re-sowing, and dimin-ish the subsequent pas-ture related losses. If climate change factors are already having an impact on your farm, then think about capturing water. Not all of you will be able to build dams to do this. Some farms are too flat, in which case you build a bigger effluent pond and conserve whatever comes from the yards and shed roof.

We can show that 1mm of extra rain on 100ha is worth about $1000, so think what would happen if you could apply 20mm twice over the whole farm in summer (40,000m3). In ‘good’ years it would add to production, in ‘bad’ years – like this one – it would keep your farm alive, at least.

This leads me to sug-gest that your effluent irri-gation equipment should not be designed just to spread manure but to irri-gate it. Design it to be able to deliver proper water irrigation, even if the amounts are small.

The same equipment can then be used to water irrigate from the dam later on. Bear this in mind when you buy new efflu-ent plant, especially if you also have a gully that might eventually become a useful dam.

We have recently asked the Waikato Regional Council whether they would frame policy on this because it may be the next pressure point for policy makers.

This year we have had more enquiries about dam construction as a conse-

quence of the drought and changing climatic con-ditions. You appear to be warming to the idea of some form of drought insurance schemes, and these are usually water-based.

You might also start planning to put money aside for capital projects. Consider the farmer who

had built a dam and had it filled by November 2012. He will have invested quite heavily in the project, but his losses in this year’s drought will be far less than yours, partly because his farm will recover quickly, while yours will have taken a two-year knock and next year’s drought might double your problem. His early invest-ment will have reduced his losses in bad years, but will have added to produc-tion even in good years. Why? Because that extra water even in good years will still assist in growing more grass.

There may be some cases where a number of you can get together to construct a pond you can all use – a mini-scheme, if you like. It’s happening in Canterbury and Otago quite regularly, but then they have an irrigation cul-ture which the rest of you have yet to buy into.

So remember this – about half the rainwa-ter that arrives on your farm runs straight off. The other half (the stuff that wets the 200 mm layer of soil on your farm) is the stuff responsible for your entire income. • Stuart Reid is a profes-sional engineer at Revolu-tion Technologies, marketing integrated water and effluent irrigation systems.

This year everyone has learned the value of even small amounts of rain.

Stuart reid

Check out the latest news and information atwww.dairynews.co.nz

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maNagEmENt // 31

Loving the results and the lifestyle

a RECENt Small Milk and Supply Herds (SMASH) field day near the Manawatu township of Sanson attracted 50 farmers.

The field day was held at Christine Finnigan’s property where she milks 226 cows once a day. The objective of the day was to see how Finnigan was managing her property and hear about how she goes about this and also to hear from Colin Holmes, an OAD advocate.

Finnigan grew up on a dairy farm, graduated Bachelor of Agricultural Science and then worked as a share-milker on farms including one with 2000 cows in 1990. But in 1995 she came back and took on the manage-ment of the family farm close to the small settlement of Glen Oroua. She also worked full- and part-time as a consulting officer with DairyNZ while bringing up her children.

This is her fourth year at OAD although before that she’d gone to OAD in autumn. She says this helped take the stress out of the operation, was kinder to the cows, preserved cow condition but still enabled her to achieve milk production targets. Finnigan’s move to OAD was partly, but not entirely, for the lifestyle.

“I also thought I had the herd to do it. One of the provisos of going OAD was that we retained profitabil-ity. The goal was to achieve twice a day production. We also aimed to improve our herd alongside that so that they are well suited for what we do. Another goal is to sell more sur-plus livestock than we do,” she says. She also points out that managing pasture for OAD is the same as TAD.

It could be said that Finnigan is a perfectionist. Certainly she has specific goals and a strong focus on achieving ‘best farm management

practice’. She’s a strong believer in breeding worth (BW) and says this makes for long term sustainability – a key message from DairyNZ and LIC these days. She’ll be drying off her herd shortly with the focus on making sure that next season is a good one. “Doing the basics right works for me,” she says.

Having a small herd has advan-tages and disadvantages, she says. “I think there are a lot of things you can do with a small herd that you can’t do with a large herd. One of the advan-tages is you are able to pay greater attention to detail, but you don’t have economies of scale. As an aside some

of the large herds don’t manage to capture either.

“On a small unit you have to do all the jobs yourself, but the jobs aren’t as far away and as big. For staff there is the opportunity to do all the jobs and not just be a milk harvester or a trac-tor driver so you acquire a broader range of skills.”

Finnigan employs a manager – for the past year former DairyNZ con-sulting officer Scott Ridsdale. He has resigned to go consulting and another manager will take his place. Finnigan will maintain her supervisory role and says she’ll be on the farm at the key times.

PEtER [email protected]

tOP OaD FaRmERS ExCEL

OAD ADVOCATE Colin Holmes says some of the top OAD farm-ers are doing exceptionally well. Speaking at a SMASH field day near Sanson recently, he noted they are above average for production per hectare for the North Island and their fertility is almost twice as good as the average for that season.

“I know of one farmer achieving 91% of his herd in calf in six weeks and just a 4% empty rate after 10 weeks. Compare that with the New Zealand average which is about 65% in calf after six weeks and 15% empty rate in ten weeks. These people are doing good production with less effort by not milking twice a day so why wouldn’t people think seriously about OAD. No one is trying to persuade anyone to do anything, but why wouldn’t they think about it seriously?”

Holmes says OAD people still get ridiculed by some TAD people and he recounted a story which illustrated how some OAD people feel.

SMaSH field day particpants.

Christine Finnigan says oaD takes the stress out of the operation.


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32 // management

Low planting lifts water qualitytHe BeneFItS of keep-ing stock out of water-ways with fencing can be boosted by a planted margin, which will help improve water quality.

Long dense grass, flax, sedges and rushes serve as a filter to help remove sed-iment, bacteria and nutri-ents (mostly phosphorus) from surface runoff. The

planting shades narrow waterways (less than 2m) and improves the habitat for fish.

There are a number of locations where low plant-ing will be most effective at improving water quality, such as along drains and small lowland streams that feed into main rivers; areas with significant runoff;

and beside waterways strip grazed in autumn and winter.

Other ideal loca-tions are beside vegetated drains in areas with poor soil drainage or pugging and moderate slopes, and where paddocks are cul-tivated.

In general, the steeper and longer the slope feed-ing into the waterway, or the more poorly drained the soil, the wider the planted area needs to be.

For gently rolling land, a margin width of 1-3m per 100m of slope feeding into the waterway is ideal. In areas with steeper slopes or poorly draining soils, a grassy margin of 10-15m per 100m of adjacent slope is recommended. Getting plants in the ground Here are some simple reminders to help get plants off to a good start:

■ Plant on an overcast, wet or windless day (if

you can) ■ Handle plants carefully

to avoid root damage ■ Set plants out to check

for correct spacing ■ Dig a good size hole and

loosen the soil ■ Set the plant in the

hole and fill three quar-ters full. Give the plant a gentle lift to set the roots in a natural posi-tion and continue fill-ing with soil, firming as you go

■ Stake plants to help find them again at weeding time.

■ Weed growth (espe-cially gorse, broom and blackberry) can be a problem in low plant-ing areas, so it’s impor-tant to manage it from the outset.

• This article is adapted from the fourth in a series of nine DairyNZ Farmfacts on man-aging waterways on farms. They can be viewed at www.dairynz.co.nz in the Farm-facts – environment section.

There are several specific locations where planting can have the greatest benefit on water quality.

■■ Along■drains■and■small■lowland■streams■that■feed■into■main■rivers

■■ Areas■with■significant■runoff■■ Beside■waterways■that■are■strip■grazed■in■autumn■

and■winter■■ Beside■vegetated■drains■in■areas■with■poor■soil■

drainage■or■pugging■and■moderate■slopes■■ Where■paddocks■are■cultivated.■■

Ideal locatIonS

In general, the steeper and longer the slope feeding into the waterway, or the more poorly drained the soil, the wider the planted area needs to be.


anImal HealtH // 33

Happier cows will make more milkWHat’S a cow’s field of vision? How well do they smell? What is their sense of taste? Do they feel pain as we do?

Many seasoned dairy farmers at the Dairy Women’s Network con-ference thought they had a good grasp of such things but Chris Leach, DairyNZ devel-oper, animal husbandry and welfare, surprised many with the answers. Understanding why and how cows react to us is the basis of good stock-manship and unwit-tingly stressing cows can cut production up to 10%, he warns.

Surprising fact number one, Leach revealed, is that a cow’s field of vision is 330o. Many workshop participants thought it was much narrower, but they evolved as preyed-upon animals so a wide field of vision was an advantage.

With such a wide field of vision, they are wary of anything that disap-pears into their blindspot behind them: if you do, you risk being kicked or making the cow turn round.

To the front cows have a limited area of binocu-lar vision so cannot judge distances or depth well: they need time to check steps or changes in layout. Vertical vision is limited to about 60o. “Cows are designed to look down; if they have to look up they can’t see where they are placing their feet.”

A project where Leach and colleagues had to use a cherry picker amongst a herd showed the limits of cows’ vertical vision: once the cherry picker was above a certain height the cows were unconcerned because they couldn’t see the operators.

Cows’ colour vision is also limited. They see a spectrum of blues and yellows – about 100,000 different colours – com-

pared to humans’ ability to see about one million. If you take red tones out of vision, contrast increases markedly and shadows look extreme, explains Leach. Consequently a

block of shadow can look like a hole to a cow. They get used to shadows they see daily, but something different will throw them.

Smells are another driver of behaviour and cows can smell things up to 8km away. It’s a very important sense for the animal, notes Leach.

“It can have a devas-tating effect on cow flow if you are not aware of it: for instance, home-kill or someone spreading blood and bone.”

Herd hierarchy is strongly linked to smell, as shown by experiments that found social order among cows unaltered by blindfolding.

Cows can smell fear in the form of pheromones in urine, sweat and dung of other cows. A fearful cow in the milking shed sends a sensory message to others through her pheromones in urine or dung.

“Think about creating the dairy as a safe zone for cows and they will be far more ready to come onto the platform... Try to keep painful procedures out of there if you can.”

Given what cows eat, many workshop partici-pants thought their sense of taste must be dull, but it’s better than humans’.

Cows have two to three times as many taste buds as humans, using them to identify good, bad or toxic food, hence the need for sweeteners to mask bitter flavours such as zinc

in water, but also the danger in loss of bitter-ness where toxic plants have been sprayed off or conserved.

High pitched noises, such as whistling, are unpleasant to cows and studies show shout-ing and whistling can be more stressful for the animal than being slapped or hit – not that the latter is accept-able either. As for what to have on the radio in the shed: research has shown country and

western is the best.Cows are sensitive to

touch and feel pain as we do. However they are prey animals and try to hide pain. Do stroke, scratch and lightly pat cows, says Leach.

Fellow DWN confer-ence speaker and dairying specialist Mel Eden says spending a lot of time in dairy design and manage-ment brought him to the

conclusion we needed to understand cows better. “The attitude of the person will affect the cow. With good attitude you get the benefit of calmer cows and better production.”

An excellent exer-cise is to measure how quiet cows are: with low fear you should be able to walk within 2.3m without a reaction; with average fear 5.3m; high fear 12m. Eden suggests using the reaction distance as a tool to measure the impact of management changes.

Leach says it will take three to six weeks for better handling of the herd to be translated into cow behaviour.

One farmer said they had top staff but they could be impatient. They did an experiment timing staff doing a rushed milk-ing and then a calmer, less stressed one.

It was timed from the start of milking to wash up, because stressed cows excrete more. The rushed job was no faster.

The experiment had given staff more accep-tance of the need for calmer milking.

pam tIpa

Good cow mood makers: ■ Food.

■■ Calm,■quiet,■familiar■environment.■■ Companionship:■don’t■draft■singles.■■ Scratches,■rubs■and■pats.■■ Good■light.■■ No■rush■or■crush■–■plenty■of■space.

Bad cow mood makers■■ Fear.■■ Shouting■and■loud■noises.■■ New■sights,■smells■and■sounds.■■ Isolation■from■herd.■■ Aggressive■people■and■dogs.■■ Hits■and■slaps.■■ Moves■from■light■to■dark.■■ Rushing■and■overcrowding.■■ Direct■bright■lights,■e.g.■headlights.■■ Good■stockmanship■gains:■■ More■efficient■milking.■■ Improved■staff■motivation■and■retention.■■ Better■cow■health,■notably■less■lameness■and■

mastitis.■■ Easier■drafting,■stock■identification■and■

restraint.■■ Fewer■repairs.■■ Improved■productivity.

mood makerS

Chris Leach


Our manufacturing operation in Hamilton produces 95% of what Milfos sells - from

rotary platforms to CNC machined brackets. FIL was also purchased by GEA

Farm Technologies almost three years ago and its products are still made in Mount

Maunganui. FIL and Milfos manufacturing operations will remain in New Zealand,

employing 150 local staff and purchasing supplies from many New Zealand businesses. The investment by GEA Farm Technologies

hasn’t changed our manufacturing operations, it has boosted our research and

development capabilities.

MILFOS PRODUCTS ARE STILL NEW ZEALAND

MADE, AND WILL REMAIN THAT WAY.

FACT:

RUMOUR:

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NEW ZEALAND”


34 // anImal HealtH

tHe neW Zealand head of the world’s newest standalone animal health business, Patrick Dorahy, is enthusiastic about what it means for farmers, vets

and pet owners.Zoetis, previously

known as Pfizer Animal Health, became a reality on February 1 when 20% of the animal health busi-

ness was listed on the New York Stock Exchange by its parent Pfizer. The 86 mil-lion shares were listed at US$26/share and reached US$31/share the same day.

Market approves of animal health float

“The creation of Zoetis marks a milestone, in the animal health industry as well as for the company. Public listing of the larg-est animal health company is a strong indicator of our faith in the sector. As a standalone animal health company, we now have a clear focus for our efforts, that is to offer solutions to the animal health sector, across a range of products and services,” says Pat-rick Dorahy, Zoetis general manager for New Zealand.

The new name Zoetis originates from the Greek word ‘zo’, signifying the bond between human and animal, and the word ‘zoetic’ meaning ‘pertain-ing to life’.

The name Zoetis aims to capture the focus on animals, companion and livestock, and the needs of the people charged with their care.

While the name Zoetis is new, Dorahy emphasises the company retains the people, and investments in research, development, and innovation that Pfizer Animal Health was known for.

Zoetis retains the global reach with presence in 120 countries, manufac-turing sites in 25 locations, and 9500 people supply-ing product, supporting customers and developing new technologies. The company retains a strong local presence in New Zea-land.

“Our goal is to improve herd productivity and pet wellness,” Dorahy says. “We do this by working with customers to better understand their needs and find solutions to those needs through local inno-vation and the assistance of global expertise”

Dorahy says New Zea-land has been at the lead-

ing edge of innovation in product design and in ser-vices provided to custom-ers that complement the company’s pharmaceu-ticals.

“The dairy business is significant and we have been fortunate to work with leading research-ers who have developed label extensions and pro-grammes tailor made for the dairy situation here.

In 2008 the portfolio was diversified with the acquisition of Catapult

Genetics and with further investment through Ovita and Agresearch a suite of DNA tests have been developed and marketed globally.

Bopriva was developed specifically for New Zea-land bull beef farmers with a vaccine to increase bull productivity and simplify management. New Zea-land was the first coun-try to launch Startect, a new combination drench for tackling sheep drench resistance.

Veterinarians have also benefitted from informa-tion from Zoetis. Its Info-vet is a data gathering tool that assists farmers and dairy vets better manage herd health. Dorahy says over the past year a lot of effort had gone into split-ting company systems and operations from the Pfizer business to ensure a seam-less transition to Zoetis.

“As we launch Zoetis we hope our custom-ers see a retention of the things we believe we do well, delivery of qual-ity products and educa-tional packages supported by high calibre people. We also believe we can do more, with a complete focus on animal health we aim to work even more closely with our custom-ers,” he says.

“The dairy business is significant and we have been fortunate to work with leading researchers who have developed label extensions and programmes tailor made for the dairy situation here.”

Patrick Dorahy

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tHe daYS of observing and physically examining each cow to discern abnormal rumen function will soon be a thing of the past, says the developer of the world’s first wireless device to track the health and fer-tility of cows.

Kahne Animal Health, founded in 2002 by a Gisborne drystock farmer, hopes data collected from trials on different farming systems will quantify benefits of its Sentinel electronic rumen monitor. Trials begin in June on five farms, each using 300-400 Sentinels.

The device is a sensor in a cigar-shaped cylinder inserted into the rumen of a cow. During milking it transmits to the farmer all data col-lected at five-minute intervals since the previous milking.

The company is also developing a fertility monitoring system called Catalyst.

Kahne general manager Susanne Clay says by the time milking ends, the Sentinel would have sent the farmer alerts on cows “functioning out-side normal parameters”. “The farmer can draft the animal aside and start work on early treatment,” she says.

Clay says farmers want an indica-tor of potential health problems in cows. “With larger herds visible observations are becoming more difficult. We have a lot of things we’re currently measuring on farm: we measure the inputs and the outputs. This is the first time we’re actually measur-ing where that feed is converted to energy and being able to manage to that.”

Kahne in 2011 assigned engineers and telemetry specialists to develop the Sen-tinel and Catalyst for commercialisation. The recently awarded $1 million grant from Callaghan Innovation is pivotal to enabling the company to do its large-scale farm

trials and develop applications, Clay says. Researchers worldwide have so far

bought 500 prototype units. Kahne will be at the National Fieldays where farm-ers can register interest and get on their mailing list. The company will take orders from New Zealand farmers for delivery in December.

Each Sentinel will cost about $100 and is expected to last three-four years.

Different farmers will see the value of the Sentinel differently, Clay says. “For

some farmers the ability to get an

indicator of potential health problems before they manifest themselves and impact animal health and productivity will drive incremental production; for others the focus will be more on improved nutrition management to optimise performance.

“If your animals are in better condition through the year, this should also provide you with better in-calf rates.

“You can also optimise your supple-mentary feed. Some farmers spend a lot of money on supplementary feed. If you’re able to optimise that… use that supplemen-tary feed more efficiently, you can increase your production.

“Whether it’s lower input cost or higher productivity, being able to manage that fer-mentation component should drive value from a number of different areas.

“There is also the potential for decreased use of antibiotics because you are able to identify the animal earlier and minimise the non-production days, and the ability to reduce involuntary culls.

“Those are all key performance indica-tors that we will be assessing.”


anImal HealtH // 35

Susanne Clay

Inside help on cow’s rumen function, healthSudeSH kISSun

Sentinel cigar-shaped cylinder will monitor the cow’s rumen.

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36 // anImal HealtH

Oz synch scheme helps ensure daily milk flowaBout 80% of the milk sourced by Riverina Dairy factory in Albury, Australia, comes from Riv-erina Milk, which runs 1500 cows at Corowa.

To guarantee a con-stant supply throughout the year the dairy opera-tion has streamlined every aspect of its year-round breeding programme.

Eighteen months ago the entire Fixed Time AI programme was con-tracted out to breed-ing specialists Nu-Genes which now manages and implements the pro-gramme, which involves joining up to 100 cows each week.

For farm manager Jim Simpson the benefit of this change in responsibilities is measured by better con-ception rates. “It certainly costs us to have Nu-Genes out here every week, but with their skills we get higher conception rates,” he said. “We’re able to deploy our own staff into other areas of farm man-agement.”

Adam Quarrell from Nu-Genes manages the programme and is on farm three mornings a week. Using Bayer fertility regu-lators to synchronise cow ovulation, the breeding programme starts with a PG (prostaglandin) injec-tion when the fresh cows are 37-43 days in milk. This stimulates cycling in the cow and is followed by a second injection 14 days later to catch any cows that didn’t start cycling first time round.

About 40 fresh cows 73-79 days in milk are inseminated every Thurs-day of the year. To mini-mise disruption to the herd’s feeding routine and other farm work, all the AI work is undertaken at milking time on the rotary platform.

“The Fixed Time AI programme enables us to predict everything on par-ticular days,” Quarrell said. “We are at the dairy three mornings a week and achieve the same or better results than a more labour

Michelle Caccianiga administers injection and compliance for pre-synch ovsynch.

intensive heat detection programme.”

A heat detection pro-gramme would require an experienced person to be present seven hours a day. This person can be better utilised in another area of the business.

With a FTAI pro-gramme, every treatment stage is predicted for a particular day. All joining activity is concentrated into a six week period in which cows get up to three chances to conceive to AI.

“After that we only have three choices,” he said. “We can put them out with the bull, AI them one more time or put them in the DNB (do not breed) group and milk them until they are not paying their way.”

The programme is driven almost entirely by pregnancies and there is a meticulous focus on system compliance. “The key to success is being absolutely on top of com-pliance,” said Quarrell. “That means making sure it’s the right cow, the right injection and the right time.”

Attention to detail is

paramount as is rigor-ous record keeping. “We need to make sure it’s the right cow and not one that’s already pregnant; that she’s had enough days in milk after calving to be ready to start cycling again and that we give her

the right drug, in the right volume, with the right equipment.

“It can’t be yesterday or tomorrow because if we missed five out of 100 we would be down to 95% compliance. When you work that out over a herd of 1500 we would have missed 75 submissions.”

Achieving as close to 100% compliance as pos-sible ensures conception rates are generally about 40%.

A good understand-ing of the dollar value of what they are doing with the breeding programme is important. Fertility reg-ulators can be costly so volumes must be mea-sured and targeted to each animal to get 100% effec-tiveness and a satisfactory return on investment.

Quarrell said their suc-cess is based on good man-

agement of what they can control. This is achieved by making sure all records are up to date and by having good communica-tion with the farm man-agement team so they know where each cow is up to when it comes on to the farm.

“By working together they can do what they do best and we do what we do best,” Quarrell said. “These programmes require precision. Manag-ing irrigation, cow health, hay contractors, feeding and the 101 other jobs on the farm interrupt the syn-chronisation programme. To get it right you can’t afford distractions.”

Achieving satisfac-tory breeding results requires constant atten-tion. There is always room for improvement. For instance, during the recent summer there was a drop in conception rates due entirely to the heat affect-ing the cows. Simpson thinks this kind of situa-tion may need to be man-aged differently.

“While we are seeing good results from the fixed time AI programme, we may need to build greater flexibility into the system to cope with factors outside our control,” he said. “Good communication between breeding contractors and farm management is needed to address these and similar issues as they arise. Success is always a work in progress.”

“These programmes require precision. Managing irrigation, cow health, hay contractors, feeding and the 101 other jobs on the farm interrupt the synchronisation programme. To get it right you can’t afford distractions.”

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in brief

FERRETS ARE being trapped in western Southland to find out where bovine TB still exists in wild animal populations.

Ferrets indicate whether the disease is present in other wildlife, particularly possums, and can spread

TB to farmed cattle and deer.TBfree Southland Committee

chairman Mike O’Brien says ferret trapping plays an important role in protecting cattle and deer herds from TB-infected wild animals.

Ferret trapping


anImal HealtH // 37

Lifting conception rates by 50%

range In body condition score (BCS) is as important as average BCS at calving, says DairyNZ.

The ideal BCS of 5.0 for mixed age cows and 5.5 for first and second cal-vers is a target for each individual animal, as well as a herd target. The cows at greatest at risk of poor repro-ductive performance are the first and second calvers.

“We know that within a herd there is always going to be a range of BCS, as each animal will have a slightly differ-ent metabolism, intake and milk pro-duction,” DNZ says. The challenge is to get the spread in BCS at calving as small as possible around the targets. Aim for at least 90% of mixed age cows being BCS 4.5-5.5 at calving.

Managers can use various strate-gies to get every cow close to her ideal BCS at calving, such as:

Drying-off low producing, fat cows early. These cows put fat on their back instead of milk in your vat. When feed is short, herd milk production com-monly increases by drying-off the

low producing fat cows as the other more productive cows are fed better. In addition there is often an area of low quality feed on the farm where these cows can be put to maintain themselves, such as steep sidelings or gullies.

Ensure heifers are on track for weight and BCS. Check every four to six weeks that replacements are gain-ing enough weight and remedy any. Aim to have these at BCS 5.5 when they return from grazing, as they will put little weight on (and often lose weight) while they adapt to being in the herd. Well grown heifers intro-duced to the mixed age cows during the dry period will compete well as milkers.

Give the first calvers more time dry than older cows. Young cows are still growing to reach their mature weight and often have lower intakes. Therefore, they are only able to put weight on slowly, and require more time to get to target condition.

Split dry herds on BCS and time

until calving. If you dry-off all at once then it is necessary to split the dry cows into herds based on condition and expected calving date. This allows for preferential feeding to get all cows to target BCS. Even if not enough feed is available to put on extra condition, creating herds is still a good idea, as it protects the younger cows from com-petition from the older more domi-nant cows.

If supplement is going to be fed then feed it to the herd you want to gain the most condition or that needs to put it on fastest.

Staggered dry-off based on BCS and time to calving. The principle here is that every dry cow can be fed the same, but the difference is how long she is dry for.

Part season once-a-day (OAD) milking for all or part of the herd. Cows that are milked OAD are less likely to milk off their back than cows milked twice-a-day and when well fed will put more weight on during lacta-tion, DairyNZ says.

Getting cows to ideal BCS

tHe FIrSt-conceptIon rate of non-cycling cows can be improved 50% by combining a progesterone implant with a cycling programme, say Australian vets who studied 19 dairy herds.

Warrnambool Veterinary Clinic were sponsored by Zoetis (formerly Pfizer Animal Health) to research 19 western Victoria dairy herds. Done in 2011-12, it involved 1751 head of cattle and compared protocols for the treat-ment of non-cycling (anoestrus) dairy cows.

The objectives of the trial were to generate Australian specific data on the treatment of non-cycling dairy cows and review the benefits of using a CIDR device in these cows. CIDR cattle devices are administered vag-

inally and contain the natural hor-mone progesterone.

Dr Jon Kelly, lead researcher from Warrnambool Veterinary Clinic, ran the six-month project to generate spe-cific advice for farmers when dealing with their non-cycling cows.

“Our research has confirmed that the addition of a CIDR into an OvSynch program improves the first conception rate by almost 50% over Ovsynch alone,” says Kelly. “These results were particularly apparent in younger cattle.”

Even with the addition of CIDR into the program, the cost per CIDR pregnancy versus an Ovsynch preg-nancy is reduced by at least $30, because more calves are conceived.

A programme including a CIDR

was found to deliver a first service conception rate equivalent to the remainder of the herd that cycled nat-urally, while the Ovsynch treated ani-mals did not perform as well.

Treatment cost, including prod-ucts and vet expenses for the CIDR based programme, was about $41. However, the gain of additional AI calves with superior genetics and therefore more replacement heifers to choose from, represents a signifi-cant opportunity and sound invest-ment.

“CIDR programs are helping to mitigate the financial losses that can burden local producers when their cattle are not cycling, and pregnancies are being gained by back up bulls, not quality AI bulls,” Kelly says.

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38 // matIng management

Better bulls from feed trialFarmerS can benefit imme-diately from a feed efficiency trial by scientists and geneticists from LIC, DairyNZ and the Australian dairy industry.

LIC’s general manager for research and development, Richard Spel-man, told Dairy News they now have bulls in their Alpha cata-logue which show a bull’s residual feed intake (RFI) or feed conver-sion efficiency.

He says as well as looking at the breeding worth (BW) of a bull they can look at its RFI. “BW still explains more than 90% of a bulls gross efficiency, but the RFI has the potential to account for an extra 5% which will be in the feed conversion of the progeny of the bull.”

The trial has run for almost six

years at the Westpac Taranaki Agri-cultural Research Station (WTARS) near Hawera. It was to identify gene markers in animals for ‘resid-ual feed intake’ (RFI) – the differ-ence between what an animal eats

and what we would expect it to eat for its live weight and level of growth or production.

Spelman is a quantitative geneti-cist who did his PhD in the Netherlands and has been with LIC for 22 years – the last 14 in their

R&D division, which he now leads. LIC was involved in the ini-

tial design of the experiment and its role has been to help select the calves and cows and hand these over to DairyNZ to do the research at Hawera.

“When they generated all that data, that came back to us to get all

the animals genotyped, and then we went through and analysed the data with the Australians to see if you could predict residual feed intake from the genetic markers. We can to a certain degree; it’s not a perfect estimate by a long way but it’s enough to make a difference in the selection of animals.”

He says as a result of the trial LIC can now take a DNA sample from a bull, run it through their DNA marker panel and then can estimate its residual feed intake. “This has about a 10% reliability which in scientific terms is very low,” he says.

Spelman says BW is for produc-ing more sustainable animals which stay in the herd longer and are the most efficient converters of feed into farmer profit.

“We have this target of a 4% pro-ductivity gain per annum for the industry. Genetics is 60% of that and residual feed intake just helps this along.”

Richard Spelman Time to set up cows for next season’s productiontHe decISIonS farmers make now will determine how much this year’s drought affects next season, says LIC’s Jon Nich-olls.

Nicholls, who leads FarmWise consul-tants, says farmers will be drying off earlier than usual this season because prolonged production could come at a cost to cow condition which, if not recovered before calving, can impact animal health, produc-tion and reproduction.

“The season is pretty well over now, thanks to the drought, so farmers now need to be doing what they can to set up their farm and their cows for next season, and that includes getting them at target condi-tion for calving.

“Cow condition at calving is crucial and sufficient feed is the key to that. Once dried off, cows need time to put weight back on before calving otherwise the risk of it neg-atively impacting on next year’s 6-week in-calf rate is much greater and that will affect future production.”

Nicholls says farmers are aware of this, many having already cut their losses in favour of cow condition and milk solids at the next season.

Waikato sharemilker Dan Hinton is one such; he recently decided on two farms to dry his 850 cows off two months earlier than usual because he believes it will be better in the long run.

He decided this after reviewing cow condition, feed on-hand, pasture cover and time left until calving, and he’s comfortable with the amount of income he’ll sacrifice, because the risk from continuing to milk was too high.

“It was too hard on my cows, feed and pasture, and I don’t want this drought to stuff us up for the seasons ahead. I’d rather have one year down in production by 10%

than three seasons down at 20%. “That’s what I learned from the last

drought: we have to be proactive with these decisions because they have long term con-sequences and I’ve worked too hard to lift my 6-week in-calf rate to have it drop back down because of this drought.”

With the workload reduced and the decision made, Hinton’s looking forward to fishing and spending more time with his young family, knowing he’ll get off to a good start next season. “I’ve now got three months of joy before the hell sets in with calving. We’ll have them back in the shed milking in no time, and those are the milk solids to target now.”

His cows are his focus now, ensur-ing they are well-fed and in top condition during the lead-up to calving and mating.

“We aim for fat cows at calving; if you don’t get that right then it makes every-thing hard for the season, especially with mating because it dictates the calving pat-tern which has the biggest impact on pro-duction.

“It’s not just about whacking in semen at mating time, it’s about drying off at the right time, feeding them enough and making sure they are not losing condition, and that’s 365 days of the year.”

It’s a method that has paid off for him, helping to increase his 6-week in-calf rates, drop his empty rates and get more days in milk. And it’s relatively easy for any farmer to adopt, Dan said, with programmes avail-able to help.

The 6 Week Challenge, developed by LIC to support the DairyNZ InCalf programme, is free for all farmers and designed to help them implement a year-round approach to improving herd repro-duction and get more cows in calf quicker. www.6weeks.co.nz

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40 // matIng management

drY pregnant cows may need up to 40% more maintenance energy than the current recommended levels shown by DairyNZ studies, says researcher Kristina Mandock.

A series of DairyNZ trials from 2009-2011 show that dry, pregnant cows may need daily about 2-3kg more dry matter than the current standard levels, Mandock told the Farmers Forum in Whan-garei.

Mandock said results of trials showed their cows under study needed on average 117 megajoules of metabolisable energy (ME) to maintain their body weight including pregnancy.

“This was much more than the current recom-mendations of about 80-90 megajoules and this would mean that dry cows, two months pre calving, would need 10-11kg of dry

matter per day to maintain their liveweight and preg-nancy with no loss or gain of body condition,” she said. The current recom-mendation was 7-8kg of dry matter per day.

The findings contra-dict current recommen-dations for maintenance feeding, the forum heard. However, whether those will be adjusted and how much variables in the study influenced the result is still under discussion.

As way of background, Mandock said in the 1960s researchers in the UK and America did a lot of research on mainte-nance requirements of dairy cows. They put them in a calorimeter – a big box that measures every-thing that goes in and out, i.e. urine, faeces and heat the cow produces. From that they could derive the energy requirements and expenditure of those cows.

“What they found was cows needed 45 mega-joules of metabolisable

energy to maintain their vital body functions,” says Mandock. “If you con-vert that to pasture that would be about 4kg of dry matter of pasture. So this has been upgraded for dry dairy cows to 60 mega-joules of ME per day or about 5.5 kg of dry matter of pasture.

“We added another 20 to 30 megajoules for preg-nancy activity; that would result in 80-90 megajoules per day and this would make 7-8kg of dry matter per day for a dry, pregnant dairy cow.”

But Mandock said they were hearing from farmers that their cows were losing condition when they met those current recom-mended requirements. “That gave us an incentive to look at it again.”

They used 53 dry cross-bred cows at a DairyNZ research farm, and the cows had transponders around their necks spe-cific to one particular gate. “This enabled us to mea-

Pregnant cows may need more maintenance energypam tIpa

sure the individual intake of each cow.

“The cows were seven months pregnant and the average liveweight was 526kg. We fed them indoors for 38 days and released them onto a bare paddock overnight to best mimic the real farm situ-ations.”

This produced the “sur-prising” results outlined above.

An audience member asked if this meant DairyNZ was going to change its recommended figures and facts.

“We are currently dis-cussing this,” Mandock replied. “This is very spe-cific: those cows got fed

autumn pasture and we think there is something we can’t explain in autumn pasture that makes it inef-ficient for liveweight gain. We can’t distinguish whether it was pregnancy or maintenance because our cows were pregnant so we are currently talking about it. There are no deci-sions yet.”

Summing up, a DairyNZ convener said: “The key take-home mes-sage is, often people underestimate what their animals need for mainte-nance and body condition score gain, so underes-timating may be even more dangerous than we thought.”

Kristina Mandock says pregnant cows may need more dry matter.

Kristina Mandock gets her message across in cartoon form at the Farmers Forum.

in briefFor many years, CRV Ambreed has followed a breeding philosophy with an aim to breed long lasting, trouble free cows.

Good udder conformation to cope with high production, body capacity to consume large quantities of forage to convert into this production, dairy strength to provide the necessary constitution to survive and the shed traits to please farmers and workers alike…these are ‘Ambreed’ cows.

Harvey Oliver made the change to sole use of our genetics some 20 years ago and the wisdom of that decision is plain to see.

No fewer than 12% of their 400 cow herd are 10 years plus, still pumping the milk out, still walking up and down the hills and still getting back in calf. Pictured here are some

examples of these grand old ladies with astonishing udder depth and quality, they look like they’ve got years in them yet!

This breeding philosophy doesn’t have the convenience of a single index and can’t easily be quantified. Longevity can’t be proven until cattle stand the test of time but it is the very thing which dairy farmers, all over the world, seek.

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BcS warning

SENSIBLE MANAGEMENT of body condition score (BCS) is crucial for the protection of next season’s production, says DairyNZ.

Mixed aged cows need to be at BCS 5.0 by next calving, first and second calvers at BCS 5.5, so pulling condition off them now for the sake of continued production makes no sense. “It will cost you far more to put it back on later,” it says.

It wants farmers to monitor the BCS of their cows and heifers regularly (every 3-4 weeks), even if away grazing during summer dry periods.

Management options include:Getting all known culls off the farm as soon as

possible. Don’t carry cull cows for the sake of it. If sending them to slaughter, remember they must be fit for transport and able to bear weight on all four limbs.

Dry mature animals off based on BCS and somatic cell count (SCC). As a safeguard, have a final dry-off date and stick to it. Drying off low producers and young stock early, when they are in good condition also makes good sense, as it will reduce the pressure on the available resources.

Milking low BCS cows once-a-day in early autumn.


matIng management // 41

Warnings on OAD milking during feed shortagetHe BeneFItS and costs of milking cows once a day (OAD) when you’re short on feed will be shared by scientists at the North Island DairyNZ Farmers’ Forum events during April and May.

DairyNZ began its regional Farmer’s Forum events in Whangarei on April 5. Two remaining North Island will be at Hawera on April 18 and Woodville on May 28.

Extreme weather, such as now, and flood-ing in late winter and early spring, can create short and long term feed short-ages. DairyNZ scientist Jane Kay says for many years farmers have used OAD milking as a means of alleviating nutritional stress on the cow.

Kay led a DairyNZ study that compared OAD with twice-a-day milk-ing when cows’ feed was restricted, still within safe levels, for three weeks in early lactation. The research discovered extra losses in milk produc-tion when underfed cows were milked OAD, both during the experiment and after feed intake had been restored. In addi-tion, milking OAD did not improve the loss of body condition caused by restricted feeding.

Milking OAD did

improve animals’ short-term energy levels, and reduced the risk of met-abolic disorders associ-ated with the lack of feed. Less time spent milking can also reduce stress on staff, and free up time to do other tasks.

“Farmers need to be aware of the costs and benefits to milking cows OAD when feed is short. Ideally you’d bring in feed supplements during a severe situation, but that can be challenging; there can be a shortage or the cost is restrictive.”

Kay says every farmer’s situation is different, and there was no silver bullet for addressing the chal-lenges the current climate is creating.

“It is far better to plan to milk once a day before feed runs short than to be forced into it by a severe shortage of feed, but it could still be an option during the summer months. It can reduce the time spent walking the cows in the hot summer afternoon and if carried on for long enough will improve cow body condi-tion score before dry-off.

“At this stage it is important to be looking ahead to next season and having a plan for improv-ing body condition scores to ensure your herd is in

good condition for next year’s production.”

DairyNZ’s advice was to control the controlla-bles as much as possible such as cow culling, better feed management, drying off early, re-sowing pas-ture and cow condition.

DairyNZ chief execu-tive Dr Tim Mackle said each year the Farmers’

Forum provides a great opportunity for dairy farmers to see how their levy is invested and to learn about dairy industry research and development work relevant to their region’s farming issues.

“Our Farmers’ Forum has become an annual gathering and every second year we go out to

the regions and custom-ise forum topics based on locally relevant issues,” said Mackle.

“The programmes are designed by the local DairyNZ team to address local challenges and

opportunities. A number of the region’s farmers will talking at the events about their own experiences implementing research on farm.”

The forum also includes time for informal

discussions with DairyNZ scientists and devel-opers plus others who lead industry research and development pro-grammes.www.dairynz.co.nz/farmersforum.

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42 // machinery & products

Herd Homes builds on stronger trussesstronGer rooF trusses are allowing Herd Homes to span up to 20m, so farms can retro-fit the Waikato firm’s roofs over existing yards and pads.

“It’s allowed us to cover feed pads, dairy yards and our Herd Homes,” chief executive Hamish McMillan told Dairy News at the recent South Island Agricultural Field Days, Lin-coln.

The old design was adapted from glasshouse roofing using light steel and came in one width – 10.3m. The new design uses cold-rolled steel and can be made to fit up to nearly twice that, he explained. “It’s a lot more robust. We’re building the first half dozen now.”

One is being installed near Mata-mata and four more are destined for a farm near Balclutha, Otago.

McMillan says there are about 350 Herd Homes nationwide and more going in all the time. “It tends to go in clusters.”

The main appeal is protecting pas-

ture from damage during wet weather, and being able to manage effluent produced off-paddock efficiently and simply.

Effluent collects in a sump below a Herd Homes’ slatted floor which once or twice a year is removed so a loader can drive through to dig out the muck for loading into a spreader to go out onto the farm.

“The effluent management is very simple. There are no scrapers or any-thing to breakdown.”

Capital cost per cow is typically $1500-1800. McMillan says the plas-tic roof cover might need replacing after 7-8 years, which for a 200-cow unit currently costs about $6000, but everything else is designed to last at least 50 years.

Alternative semen suppliers looking for customersthe recent South Island Agricul-tural Field Days at Lincoln saw several of LIC’s competitors exhibiting, put-ting their case for looking beyond the local cooperative when ordering next season’s bulls.

Among them was World Wide Sires, the global arm of two US farmer-owned cattle breeding cooperatives. “We’ve got access to the best bulls in the world, not just New Zealand,” World Wide Sires’ John Bannatyne told Dairy News.

New Zealand’s herds represent just 4% of the world’s dairy genetics and contrary to the impression some give, it is not the only country with pasture-based systems, he added.

“Our bulls’ progeny are proven in 92 different countries under a wide variety of management systems and climates. You can go through what’s available and pick what will suit a New Zealand system.”

He was also quick to counter the perception that using overseas genet-ics risked importing a fertility prob-

lem. “One of the highest-ranked bulls for fertility in New Zealand is one of our bulls.”

The company is a subsidiary of Select Sires, Ohio, and Accelerated Genetics, Wisconsin.

Jersey, Ayrshire, beef and Holstein-Friesian bulls are available.

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machinery & products // 43

Effluent Expo ‘should happen more often’eXhiBitors at the one-day Effluent Expo in Waikato last month say good farmer turnout shows demand for specific advice.

About 500 farmers attended, many wanting to discuss the cost of upgrad-ing effluent systems and compliance issues.

AgFirst spokeswoman Kate Ody says farmers who visited its stand also enquired about construc-tion of weeping wall and mechanical separation systems, and how to con-sider the different nutrient loading of different types of effluent.

“As always cost and compliance were key levels of concern. As we were also discussing water use within the farm dairy and how it can influence effluent systems, many inquries were about advice on completing the Vari-ation 6 – water consent applications,” she told Dairy News.

Ody, who coordinated the first expo in 2011 as a Waikato Regional Council employee, suggests it may

be time to hold two events every year.

“I still consider the expo to be a success but the demand for our accredited system design-ers [suggests] it’s time to move biannually for the event….

“However I see merit in having other singular focused events that farm-ers can be benefit from, perhaps something for the beef and sheep sector where resources for on farm advice are limited.”

Firestone Lining Sys-tems product manager Vaughan Podbielski was also happy with the turn-out. He says the drought was on the minds of farm-ers.

Podbielski says it will attend the “effluent focussed” annual event with Waikato Regional Council and wants other regional councils to hold similar events.

“The regional days, especially Mystery Creek, are good but often too generalised and do not deliver the same bang for your buck,” he says.

“Therefore it was dis-appointing that ECAN decided not to host an effluent expo this year, but instead elected to incor-porate it with the Lincoln Field Days.”

WRC spokesman

Alan Campbell says the big turnout was a “very healthy” sign of the indus-try’s commitment to doing the right thing with efflu-ent.

The expo had 44 exhib-itors.

A Permastore tank on display.

Williams Engineering staff meet farmers at the Effluent Expo.

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are “brilliant” and “per-forming flawlessly”. He says on one farm, before the Numedic pond mixer was installed the pond had severe crusting with one third of the pond having a 1m thick crust. The rest of the pond had crusting

300-500 mm thick. The mixer broke up the crust in 2.5 hours.

The machine will be supplied with variable speed drives wired up and programmed to suit the buyer’s pond. Tel. 0800 686 334


No more sludge in pondsno JoB is too big or too hard for Numedic’s new pond mixer, says company director Peter Reid.

The new mixer has been designed to eliminate the problems of crust-ing and agitation of dairy effluent ponds, he says. It also meets the challenges of high input farms and large effluent ponds.

Reid says the mixer will break up the thickest crust and mix the contents of any shaped effluent pond quickly and efficiently.

“No longer will you be left with a metre or two of sludge at the bottom of your pond that you cannot

pump,” he says. “Superior mixing will let you utilise the entire pond, not just the top 70%, enabling you to reclaim back all of your storage pond capacity. No longer will you need mul-tiple mixers on your pond, or mixers that require to be run for long periods of time.”

The mixer is posi-tioned in the centre of the pond on a pontoon. Two opposed mixer blades pointing downwards draw the effluent towards the mixer and create a swirl-ing motion in the pond. Blade speeds are selected depending on the pond dimensions and thick-ness of the material that requires mixing. The blade speeds are con-trolled through a vari-able speed drive that can also be programmed to rotate at slower speeds as the pond level reduces

which helps prevent liner damage.

The lower unit, incor-porating both propellers, rotates through 360o. It can be locked in eight dif-ferent ‘stir time’ posi-tions for variable lengths of time (see chart). “We have found that time intervals of between 5-8 minutes per position are best,” says Reid.

These stir times can be altered and programmed with the variable speed drive.

After the pond has been mixed in position #1, the lower unit rotates to posi-tion #2 where the change in directional flow ensures it begins mixing a new sec-tion of the pond.

When the mixer has moved through its eight different stir positions it has mixed all 360o of the pond leaving no dead or unmixed areas of the

pond, irrespective of shape.

The Numedic pond mixer has been operat-ing on a 60 x 20m stor-

age pond since September 2012 where it has been operating well.

Reid says typical responses from farmers

Numedic’s new effluent pond mixer makes short work of crust.

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machinery & products // 45

Tough decks for heavy loadsBest Bars Ltd makes alloy decks for most 1-tonne ute models carry-ing heavy loads.

The Advantage brand alloy decks are said to be tough and durable; anodised finish keeps its looks for longer, says the firm.

Made from high-strength, lightweight extruded alloy, the decks can shift up to 20% more load per trip. And when not fully loaded, the lighter weight causes less wear on driveline compo-nents and saves fuel.

And for vehicle owners wanting to stay with steel-and-wood decks, Best Bars

is using advanced poly-mers and wood, combined with transport grade ply-wood flooring to produce a deck that “looks great and retains its strength and durability”.

“It still looks like the decks used on farm utes for years, but the lighter design allows more to be carried.”

A full range of accesso-ries can be added to make the Advantage decks even more versatile, including tool trays that slide under-neath.

For wellside utes Best Bars has re-engineered its trifold Advantage ton-neau cover to keep goods

hidden and dry. It resembles a hard

surface but is made from fabric, superior for cov-ering the cargo areas of working utes. It can be

folded back to allow for items to be carried in the tray and the vehicle can be driven while the cover is open.www.bestbars.co.nz

A lightweight Advantage alloy deck.

pLanninG For winter maintenance of dairy sheds raises the issue of cracked concrete floors and walls, observes coating and paint specialist Regis Coatings, Christchurch.

Cracking and erosion of such surfaces raises hygiene problems which can be used as a reason for downgrading milk, reducing payment for milk production.

Regis Coatings specialises in providing complete repair and paint coating schemes to resolve these issues.

The company says its Cretex repair epoxy fillers and Epotread coatings will transform worn floors and walls.

“These products have been used successfully now for many years, and they have an enviable track record of dura-bility and cost effectiveness in the dairy industry.”

The Epotread water based epoxy system also provides a protective coating on new floors, making them easier to clean and ensuring an easily maintained hygienic surface.Tel. 0800 542 542 www.regiscoatings.co.nz

Hygiene threat diminishes with epoxy coatings

FIELDAYS FORECASTMASSIVE LOWS ACROSS NEW ZEALAND

It’s SUZUKI’S…

Suzuki Fieldays™ has arrived again, bringing some much-needed relief with it! Take the pressure off with the exceptional quality and low prices of the best value farm vehicles in New Zealand.

$4,795

Trojan FARMBIKE

EXCLUDING GST

DR200SE

$280

• Quality made in Japan• Dual side-stands & comfortable seat• 200cc electric start 4-stroke• 5-speed• Handlebar-mounted carrier• Large mudfl aps

$3,195

Mudbug FARMBIKE

EXCLUDING GST

TF125

$220

• Quality made in Japan• Dual side-stands• Comfortable seat• Handlebar-mounted carrier• 125cc 2-stroke• 6-speed

$6,995

KingQuad 400 2WD MANUAL

EXCLUDING GST

LT-F400L2

$1,955

• Fuel-injected 4 stroke, 4 valve engine

• Semi-auto 5-speed transmission

• Hi-Lo ratio, with reverse

• Smaller turning circle than most 4x4s

• Sealed rear brakes• Twin shock rigid rear axle• Comfortable T-shaped seat• 24 Month/15,000km warranty

$9,495

KingQuad 400 4X4 MANUAL

EXCLUDING GST

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$1,580

• Electronic Fuel-injection • 4 stroke, 4 valve engine• Hi-Lo ratio, selectable

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These off ers are valid until 30 June 2012 or while stocks last, and only available at Fieldays or participating Suzuki dealers. Prices are recommended retail, excluding GST. Models shown are indicative only and may diff er to the actual sale stock. Some models may not be available at all participating dealers. Savings shown include GST. Off ers not available in conjunction with any other promotions.

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■■ Up■to■20%■capacity■increase■and■up■to■5%■denser■bales■for■improved■productivity

■■ New■MaxiSweep■pick-up■performance■for■improved■feeding

■■ Variety■of■crop■processing■options■for■tailored■crop■management

■■ Best-in-class■SmartFill■feed■indicator■system■ensures■uniformly■dense■and■well-shaped■bales

■■ Plunger■speed■increased■to■48■strokes/minute■for■faster■crop■throughput

■■ Improved■knotter■shielding■and■impressive■cleaning■performance■increase■bale■produc-tivity

■■ Colour■touchscreen■monitor■for■wide-screen■baler■management

■■ Improved■lighting■package■and■operator■comfort■boosting■performance.

BiGGer and Better

Lifting performance of pro balersneW hoLLand has launched a new BigBaler range said to be capable of lifting farm capacity 20%

and improving bale den-sity by as much as 5%.

Features include the maker’s new MaxiSweep

pick-up and enhanced pre-compression chamber crop flow monitoring. The machines also have New

Holland’s CropID system and double knotting tech-nology intended to help professional hay and forage operators improve their baling.

Built at Zedelgem, Bel-gium, it has been engi-neered “to meet the stringent quality, pro-ductivity and reliability requirements of modern baling businesses”.

The four model range produces bales from 80x70cm to 120x90cm. Crop-to-crop flexibility is said to be impressive the BigBaler “promises per-formance in conventional

crops and non-traditional crops such as sugar cane and maize stover”.

“Over 200,000 bales, equivalent to ten seasons output, were produced before even the first pro-duction BigBaler rolled off the line,” says New Hol-land product specialist

Greg Moore.“The prototype models

spent two harvesting sea-sons, and baled about 20,000 bales in New Zea-land in a variety of crop types and conditions and performed exceptionally well.”www.newholland.co.nz

Next Generation Big Baler.

The new balers lift farm capacity by 20%.

MS1404

Total Pond Solution!

Benefits of the New Generation Pond Mixer:• Multi directional positioning

• Twin opposed multi speed propellers

• Vigourous agitation

• State of the art technology

• Programmable for your pond

NEW GENERATION POND MIXERMixes and breaks up the thickest crust

New Zealand Patent appl. No 599021

MANUFACTURE AND DESIGNAGENTS NATIONWIDE, EXPORTING WORLDWIDE

0800 686 334www.numedic.co.nz

MORE THAN EVER

MORE OPTIONS. MORE CONTROL. MORE PERFORMANCE.

B&

LIC

0241

2013 Bull Catalogue out nowWhatever your breeding objectives, we have the largest selection of bulls to help you get more performance than ever. Contact your local LIC Customer Relationship Manager for more information.

dairy news 16 april 2013

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