Dairy News Australia July 2015

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NEWS // 3

NEWS .........................................................3-13

OPINION ................................................. 14-15

MARKETS .............................................. 16-17

MANAGEMENT .................................20-22

BREEDING MANAGEMENT ....... 23-24

STOCKFEEDS .................................... 27-30

MACHINERY & PRODUCTS .......31-34

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

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

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

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

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

Whole milk powder was the big casualty, falling by 10.8% to US$2054/metric tonne, while skim milk powder fell 5.8% to US$1875/MT.

Butter milk powder prices fell by 8.1% while rennet casein was down by 4.1%.

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

to demand.However, Mr Droppert said the

fall did not come as a complete surprise, as volumes on offer were well up, particularly from Fonterra.

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

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

Mr Droppert said results were mixed at the product level.

“The headline index change (of

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

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

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

“Australia also produces a lot of cheese, which is holding up relatively well.

“So the result is an unfortunate reflection of the current market reality, and can only be interpreted as another bearish sign from

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

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

Farmers were shocked by the sharp fall in WMP price.

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

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

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4 // NEWS

Farmers want opening prices announced earlierFARM LEADERS have reiter-ated their calls for earlier forecasts of seasonal prices, with companies announcing this season’s prices one week out from the financial year.

United Dairyfarmers of Victo-ria president Adam Jenkins said the industry wanted profitable growth and would benefit from earlier fore-casts of prices.

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

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

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

“It would help with planning. We’re generally autumn calvers in Victoria and you’re finishing off the last season’s pricing and then you’re not sure what the system looks like heading into the next season.

”As soon as you get a clearer line of sight you can make on-farm deci-sions.”

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

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

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

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

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

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

RICK BAYNE

Certainty features in Fonterra’sNSW price deal

FARMERS SUPPLY-ING Fonterra’s Wagga Wagga factory in the New South Wales Riverina have been offered a new pricing agreement aimed at taking the volatility out of milk income.

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

ing on the farm gate milk price over the next three years.

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

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

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

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

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

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

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

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

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

rity in our supply and in our return.”

Individual suppli-ers have been given the

option of signing up for the new payment struc-ture or remaining on sea-sonal pricing.

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

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

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NEWS // 5

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

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

Australian Dairy Farmers Co-operative (ADFC) has announced its opening price at $5.87kg/MS.

MG confirmed its full year forecast of $6.05kg/MS, with Fonterra forecasting a closing price of $5.80-$6kg/MS, and WCBF saying average closing prices “could be up to $6kg/MS, if market conditions improve in the short term”.

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

“The big concern for the South Aus-tralian industry is that over the next 12 months Midfield and Beston will be look-ing for about 300 million litres of new milk. That’s a significant increase and to get that quickly is going to be difficult.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“In this environment average clos-ing prices in the 2015/16 season are diffi-cult to predict and will be dependent on many external factors. If market conditions improve in the short term, average closing prices could be up to $6kg/MS.”

The $5.87kg/MS opening milk price announced by ADFC will apply to its sup-pliers in south west Victoria who supply Bulla Dairy Foods and ADFC suppliers in northern Victoria who supply Procal Dair-ies.

Just treading wateron current prices

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

RICK BAYNE

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

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6 // NEWS

NZ farmers want answers on Fonterra Australia

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

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

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

paying dividends now.His comments come

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

The co-op last month announced an open-ing average farmgate milk price of $5.60/MS for its Australian suppli-ers, which converts to NZ$6.30kg/MS.

In May, Fonterra announced an open-ing forecast price of

NZ$5.25kg/MS for its New Zealand farmer sharehold-ers.

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

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

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

Mr Hoggard said most NZ farmers know Fonterra has to act like a corporate in Australia – unlike the co-operative it is in NZ.

“We know Fonterra is not a price setter and has to match competitors oth-erwise we don’t secure supply. At the same time, who is paying for that

extra money going to Fon-terra’s Australian suppli-ers? We are.”

Mr Hoggard said farm-ers know their feed costs and cost of interest for every kg/MS.

Likewise they should know how much they are putting into the Australian business and the returns being generated in kg/MS, he said. “Fonterra needs to get more transparent about its Australian busi-ness with shareholders.

“We go out and get overseas milk pools; we

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

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

The global environ-ment remains particu-larly volatile, it said in a letter to suppliers when announcing its milk price.

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

duction and a resulting oversupply of dairy com-modities. This has coin-cided with weakening demand which has had some impact locally.

“Although global con-ditions are challenging, the longer term funda-mentals remain posi-tive for Fonterra, with the planned Beingmate joint venture partnership with our Darnum site central to Fonterra’s multi-hub strat-egy to make Australia its hub for cheese, whey and infant nutritionals.”

Opening price makes forecast closing prices realistic

DAIRY AUSTRALIA analyst John Droppert said farmers had expected prices in this range.

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

“A lot of farmers will be happy to see forecasts of $6.05. As a starting point $5.60 makes those forecasts fairly likely. It’s a reasonable leap to make.”

Mr Droppert said an ele-ment of predictability helped to improve farmer confidence.

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

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

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

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

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

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

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

RICK BAYNE

SUDESH KISSUN

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

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

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

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NEWS // 7

SOUTH AUSTRA-LIAN Dairy Farmers Asso-ciation president David Basham said the revival of the former UDP plants by Beston Foods was good news for local farmers and the industry.

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

processor would be influ-enced by price.

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

“People will want some financial reward.”

Mr Basham said to have no manufacturing in the

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

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

“We’re very pleased that it’s happening. There’s certainly inter-est and people are trying to clarify when it’s likely to be available,” Mr Basham

said.Local farmer James

Stacey welcomed the addi-tional player and hoped the new plant would bring fresh competition.

He added that farmers were still waiting for infor-mation.

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

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

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

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

THE REOPENING of two processing plants in South Australia will give local farmers a fresh choice for their milk.

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

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

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

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

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

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

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

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

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

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

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

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

Beston Foods has subsidiary compa-

nies in Thailand, Bangkok, China, Viet-nam and Brunei and will be exporting products out of Murray Bridge and Jer-vois to those markets.

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

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

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

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

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

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

Beston’s first challenge isto woo farmers backRICK BAYNE

Beston needs to reveal price soon to attract suppliersRICK BAYNE

He said that local farm-ers were looking for clarity. “Most farmers will be com-mitting to a factory soon. The pricing structure of step-ups means that if you leave before the end of the year you’re not going to get your full payment.”

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

James Stacey

David Basham

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8 // NEWS

Western Dairy takes on R&D from WA GovernmentWESTERN DAIRY is now responsible for all West Australian dairy industry research and development, after taking over the coordina-

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

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

towards ensuring research and extension contin-ues as State Government departments cut funding to these roles.

Dairy Australia has

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

A total of $1.575 mil-lion has been commit-ted by Dairy Australia,

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

Dairy Australia will invest $975,000 and the

Department of Agricul-ture and Food will contrib-ute $600,000 over three years.

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

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

The hub, based in Bun-bury, will deliver all dairy-related research activities for WA.

It will employ three full-time staff, led by cur-rent dairy industry devel-opment specialist Rob La Grange.

It will be administered

by Western Dairy’s stra-tegic partner, South West Catchments Council.

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

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

The new system enables Western Dairy through its administration partner South West Catch-ment Council, to con-tract a number of others to undertake project spe-cific work.

The hub will utilise the knowledge of former DAFWA scientists.

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

Murray Goulburn was partially floated on the Aus-tralian Securities Exchange on July 3.

Its special trust units were fully subscribed, but at the lower end of the indicative price range of $2.10-$3.20 a share announced in the co-op’s prospectus released late May.

MG Chairman Philip Tracy wrote to the co-op’s suppliers days before the float, attributing the initial low float price to “global events of the past week”.

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

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

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

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

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

MG shares list at $2.10

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NEWS // 9

TWO PROJECTS designed to help attract crucial outside investment in the State’s dairy indus-try are among the first to be funded by proceeds from the sale of South Australian dairy farmers’ own milk brand, SADA Fresh.

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

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

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

“We know there is enormous investor inter-est generally in the Aus-tralian dairy industry, especially given the Free Trade Agreement with China and growing con-sumer demand in Asia.

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

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

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

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

Australian Dairyfarm-ers Association, Primary Industries and Regions SA (PIRSA), the Dairy Author-ity of SA and DairySA.

“We need something we can put on the table upfront to help secure investors’ attention - a value proposition that takes their interest to the next level. This document will give them the initial information they need to see that it is worth taking a harder look,” Mr Mutton said.

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

Another $22,000 has been awarded to a proj-ect exploring the benefits of variable rate irriga-tion technology, which is already used in horticul-ture but yet to be taken up by South Australian dairy farmers.

The project is being funded because of its significant potential to reduce water and energy use and improve produc-tion, benefiting both farm-ers and the environment. Due to be completed by December, it is being co-funded by DairySA, the SA Research and Develop-ment Institute (SARDI) and Natural Resources South East.

The final project is an intensive three-day pro-gram designed to improve the skills and resilience of young South Austra-lian dairy farmers so they are better able to contrib-ute to building successful farm businesses.

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

“The Fund Board understands that this innovative program is the

SA dairy fund announces fi rst project funding

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

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

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

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10 // NEWS

UK farmers quit as milk price fallsTHE UK dairy industry is in tur-moil with milk price below the cost of production.

The National Farmers Union says 450 English and Welsh farmers have quit in the past 12 months.

In another blow to farmers last week, UK’s biggest co-op Arla announced a 3 cents per litre drop in milk price; farmers will now receive 55c/l.

NFU dairy board chair-man Rob Harris said Arla’s decision was another body blow to dairy farm-ers, whose “businesses have been in utter turmoil for 12 months”.

First Milk, the only co-op 100% British owned, also reduced its price. From July 1, most farmers will receive 2c/l less for their milk.

Mr Harris said the recent cuts highlight the need for short-term solutions to address the problems happening now.

Farmers need urgent help from industry and Government, he said.

“We need Government to move away from paying lip service and to

focus on the here and now. “Their long-term solutions must

take a back seat while we focus on the immediate crisis; we need them to insist on best practice in the supply chain, look at growing dairy consumption and support more investment in dairy processing.

“We also urgently need milk buyers to be more transparent in pricing.

“Although there are a few clear formulas employed by milk proces-sors, these are few and far between.

“We need all processors to improve transparency in pricing and must stop idly following one another to the bottom.

“This is a dire situation and we need to see the dairy industry pull through this period of volatility.

“Government has a role here in

insisting processors provide up-to-date market and production data so that the whole supply chain can better understand what’s happen-ing and how to manage risk in the future.”

Arla blames its decision on the slump in commodity prices.

Its UK head of milk and member services, Ash Amirahmadi, said commodity markets keep going down.

“While we have taken significant mit-igating actions, the

impact has been felt on our traded business and more recently on European markets which are also in decline,” Mr Amirahmadi said.

“Unfortunately, these factors are affecting the entire dairy indus-try and despite our efforts it has not been possible to buck the trend.”

First Milk outgoing chairman Sir Jim Paice said while the turnaround actions taken over the last two months have improved our trading position, we also have to factor in the impact of lower commodity prices.

All the world wants is a better diet

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

Or is there a need to push the bound-aries on all technologies including GMOs to feed the predicted 9 billion world pop-ulation by 2050?

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

These were some of the topics explored at the Alltech REBELation Sym-posium in Lexington, Kentucky, which offered 11 symposia in three tracks (agri-culture, business, and food and beverage) and featured 121 speakers. Rural News attended the event courtesy of Alltech NZ.

Several key themes emerged in agri-cultural sessions: the importance of branding; the push by consumers for more knowledge about their food, for health and well-being and sustainabil-ity; the increasing globalisation of food trade; the need to feed growing popula-tions; and the role of technology in all those areas.

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

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

They now want cars, smartphones and computers.

“But above all they want a better diet, they want more protein in their diet.” It has created a massive demand for food-stuffs. But he warned that every busi-ness from big corporations to individual farmers was a brand, and needed to pro-tect that brand.

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

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

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

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WORLD NEWS // 11

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

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

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

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

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

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

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

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

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

“Southern producers

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

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

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

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

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

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

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

Global price recovery delayed until 2016

the market now finds itself in.”

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

relief and rising incomes. As import demand

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

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

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

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

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

are closely monitoring the developing El Nino pattern that could have an impact on production here in Australia and also in Argentina.”

Michael Harvey

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12 // WORLD NEWS

FONTERRA IS set to cut hundreds of jobs from its New Zealand head office as it undergoes a major review of operations.

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

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

He said a business plan will go to the board this week, then to farmers. His management team is also head-ing an ongoing, wider business plan that will lead to “trimmed sails and an aligned crew” and “we will win this race”.

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

Fonterra needs more people selling

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

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

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

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

But Spierings said they require scale

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

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

However China was playing a wait-ing game, Russia was locked up and the Middle East had geopolitical trou-bles. Fonterra needs a clear eye and view of the markets because change in Russia or the Middle East can have a big impact, as can weather in produc-tion regions.

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

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

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

Fonterra to slash hundreds of jobs

When the going gets tough...

WE’VE HEARD the disappointing news on payout levels. Fonterra has updated its milk solids price down to $4.40 for this past season.

A few years ago, when we had a big drought in Waikato, and supply dropped, the markets were paying more. So maybe farmers will decide to tighten their belts this year, buy less sup-plement and milk fewer cows – their own individual decisions, albeit with the bank manager looking over their shoulder. It will be interesting to see how and if the markets respond to any production fallback.

They do keep a close eye on us. When I was overseas a few years ago, on a supply chain look at prod-ucts, the traders and overseas buyers and sellers of products told me they read all our rural papers online and got reports on the latest dairy statistics in New Zealand every day. That was their job.

They had to work out how to make a dollar from doing business with us and pick where our industry was heading with the weather, milk supply, grass growth, busi-ness trends, environment issues, water rights and so on. I was surprised how

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

Of course there are the acknowledged macro drivers in the market. Cheap oil is now leading to even cheaper grain because it is no longer needed for biofuel in the US. And there is the growing appetite for animal protein in many parts of Asia. Dairy mar-kets will multiply, not just increase, during

the next few decades. The contrary pushes of

these big influencers make for increasing volatility. Ten years ago volatility was 5% change a year. Nowadays you need 50% change for it to be regarded as truly volatile.

How do we budget for that? How do we plan our farming systems in the face of such big

unknowns? The next six months are going to be

tough. The cost of production is a lot higher than we are getting paid to cover. I don’t need reminding of the issues, as I and many other farmers know them full well.

We just need to hunker down and deal with it as best we can, painful as it is, and somehow come out the other end stron-ger for it.• Chris Lewis is chair of Waikato Federated Farmers.

CHRIS LEWIS

Chris Lewis, Federated Farmers.

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WORLD NEWS // 13

Arla strengthens footprint in EgyptEUROPEAN DAIRY co-op Arla Foods and the Egyptian milk processor Juhayna are to form a joint venture to sell Arla prod-ucts there.

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

“It is a good match for

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

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

Juhayna owns 51% of the new company; Arla

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

“We have built our entire business in the Middle East through coop-eration with local part-ners,” says Kjeldsen. “Arla excels at making joint ven-tures succeed, and that is

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

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

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

the purchasing power of consumers is increasing. Consumption of homemade dairy products is falling as people prefer commercially processed and packaged retail products.

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

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

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

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

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

Nestle’s $23m investment in ChinaTHE WORLD’S largest dairy company, Nestle is spending $23 million to boost its ice cream business in China.

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

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

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

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

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

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

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

“In the vibrant Chinese market, to expand produc-tion capacity and increase investment demonstrates our Chinese ice cream market confidence and deter-mination, and helps us meet growing Nestle consumer needs.

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

Nestle plant in Tianjin, China.

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14 // OPINION

EDITORIAL

MILKING IT...

RUMINATING

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

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

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

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

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

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

Fonterra is expected to cut hundreds of jobs in re-sponse to low milk prices. Staff first heard the news through the media.

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

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

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

Can’t take a trickTHE QUEENSLAND State Government wants an ethanol mandate in fuel.

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

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

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

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

Yep, it’s that badEVERYONE KNOWS “internet speed” is a mis-nomer in the country but the VFF has now collated findings from a members’ survey to show how bad.

In Victoria, farmers’ internet access speed is a tenth of that in Melbourne. One-tenth! That’s dark ages stuff – or dial-up stuff, at least. The survey polled 500 members from around the state. People in Melbourne are enjoying internet speeds of more than 60 megabytes a second, while the average farmer gets just 6 megabytes a second. VFF Grains Group presi-dent Brett Hosking out-lined the anguish of many. “Poor broadband con-nectivity not only hampers your business, it can affect the whole family’s ability to connect.” One VFF survey respon-dent said: “I have a daugh-ter in year 11, and she has had to go to school with her homework incomplete because of lack of service.”

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

Meet half way with opening prices

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

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

Profitable farmers can grow their business and increased pro-duction benefits the industry, including processors.

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

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

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

United Dairyfarmers of Victoria president Adam Jenkins put it succinctly.

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

In coming up with solutions, he advocated an indication of a 12-month rolling average, saying it would be good for business

“As soon as you get a clearer line of sight you can make on-farm decisions.”

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

It was already done this year by Murray Goulburn.As part of their capital raising prospectus, the co-op announced

in May what they hoped their end of season price would be.The co-op forecast $6.05kg/MS and it hasn’t changed. With larger farm loans, farms aren’t the only businesses keen

to complete their budgets earlier. Banks want to know what’s happening too, particularly in volatile markets such as the past 12 months.

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

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

That means meeting halfway.

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OPINION // 15

AS WE enter the 19th month since the Federal Government released the Terms of Reference for their Agricultural Compet-itiveness White Paper, we are told that the release of this new strategic plan is ‘imminent’.

Heralded as a once-in-a-lifetime opportunity to improve the competitive-ness of our sector, there is significant industry antic-ipation surrounding the document’s release.

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

clues of what will be con-tained in the new plan.

But the document’s value will have to be deter-mined, not just on what is printed, but what is excluded. It is illuminat-ing to consider the likely omissions from the Gov-ernment’s new policy direction.

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

The Federal Govern-ment’s role in helping farmers recover from, and prepare for, natural disas-ters is likely to remain

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

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

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

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

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

The impending White Paper will be unlikely to contain policy solutions aimed at better utilising existing water infrastruc-ture assets, instead focus-ing on large scale new

projects designed to open up new areas for agricul-tural development.

With some exist-ing irrigation schemes in Queensland having utilisa-tion below 50%, it is hard to justify the construc-tion of new and expen-sive dams in the short to medium term.

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

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

downward pressure on electricity prices.

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

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

Of course, the White Paper will not provide any answers on the effect of a high Australian d ollar on our international competi-tiveness.

Although it will be dis-appointing if some of

these crucial areas requir-ing strategic direction are omitted from the final White Paper, the docu-ment is likely to con-tain many significant and meaningful initiatives.

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

The issues facing the industry have been well studied and documented, the time to take action to address these issues is now upon us.• Joanne Grainger is the president of the Queensland Farmers Federation.

What we won’t see in the Agricultural White PaperJOANNE GRAINGER

DAIRY FARMERS all around Aus-tralia have been stunned by the claims accompanying the Woolworths spon-sorship of the AFL competition that Woollies supports Australian dairy farmers.

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

Queensland, NSW and Western Aus-tralia.

In fact since the introduction firstly by Coles, then Woolworths, of $1 per litre milk on Australia Day 2011, over 150 dairy farmers have left the indus-try in Queensland alone, when we have been short of milk to meet the needs of Queenslanders.

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

In making this claim it is simply not

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

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

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

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

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

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

ensure compliance if the large super-market duopoly fails to embrace its principles.

For its part QDO believes this voluntary Code needs to be administered by an official ombudsman. B ut if Woolworths and Coles cannot stand even the small amount of oversight by the Small Business Ombudsman then the government should see the folly in this path and immediately introduce a mandatory Code of Conduct to help restore some fairness to the market for all producers.• Brian Tessmann is president of the Queensland Dairyfarmers Organisation.

BRIAN TESSMANN

Claims of support another kick in the pants to farmers

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Dai ry News aUsTraLia july 2015

16 // markets

fresh ageNDajo biLLs

No free kicks from supermarketssupermarkets have been in the gun for a number of years over their treatment of suppliers and farmers. There is no doubt supermarkets are an important channel to the dairy industry’s single most important market – Australia.

According to Dairy Australia figures, of the roughly 60% of production sold domestically, around 58% of product volume and 52% of drinking milk is sold through the grocery channel.

When the talk turns to supermarkets, most farmers could be forgiven for picturing the head honchos in Coles’ Tooronga Road or Woollies’ Baulkham Hills head office, smoking an expensive cigar and stroking a white cat while they crush suppliers and rake in the dollars.

It’s true that Australia’s major retailers are profitable by global standards, Woolworths’ 2014 earnings margin of around 8% is nearly double the average of its international peers (at around 4.2%), while Coles’ margin of 5.3% is also relatively high.

But increasingly these two big players aren’t getting things all their own way.

The dominance of Coles and Woolworths is widely reported, although the “80% share” figure that is usually bandied about is overstated. Analysis from Nielsen and Moody’s released in March this year put the “duopoly” share of shopper spending at 60% by value for FY2014.

Far from a duopoly in fact, but still with huge influence. German interloper Aldi has steadily increased its share to 8%, nipping at the soft underbelly of the Coles and Woolies combined share with an offering that is purely about saving money.

Moody’s expects Aldi’s east coast growth to continue at 5% to 6% in store numbers a year over the next five years - about double that expected

for Woolworths and Coles who will remain focused on getting higher sales out of their existing floor space.

Last month’s exit stage left from Woolworths CEO Grant O’Brien and the announcement of 1200 job cuts is indicative of the pressure being felt by

this previously unassailable retailer. Share values in the former

stockmarket darling have dropped 30% in the past 12 months on the back of lacklustre sales results – particularly in non-supermarket divisions.

However, in the all-important supermarket division Woolies has lost its edge – same store sales growth is virtually flat, and rivals Coles and Aldi have outmanoeuvred and outperformed the market leader.

Prior to O’Brien’s departure Woolies had unveiled a three-year strategy, which included the funding of price cuts which are aimed at fending off the assault from hard discounters - the ascendant Aldi, the small Costco chain and potential new German entrant Lidl as well as Coles’ “Down Down” mantra.

This strategy will be rewritten by a new team if the perception of ‘best value for money” is to be regained.

As the dust was settling around Woolworths last month, Coles announced a massive review of its own ranges, including an overhaul of products which solely rely on discounts to achieve sales.

Coles says the 24 month-long

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

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

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

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

According to Moody’s rating agency

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

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

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

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

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

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

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

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

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

Investments in product and marketing innovation will be critical if the domestic dairy market is to continue to be a stable alternative to the volatile export trade.• Jo Bills is a director of Melbourne-based firm Fresh Agenda. (www.freshagenda.com.au)

We’re not there yet!Freshagenda’s australian dairy export index finished June at 153 points, losing 9 points in the month, as dairy commodity spot prices kept weaken-ing and, crucially, the $A remained under US$0.77 at month-end after a wild ride in the prior month. The index is at its lowest point since mid-Decem-ber 2014.

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

caught up in the slide.Everyone is still hoping

we’ve reached the bottom of the cycle, and justify-ing that based on how low prices are compared with past experience.

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

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

Sadly there is probably more bad news to come.

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

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

This comes at a time

when the EU’s economy is flat, so that spending on dairy products has slowed meaning all this extra production is likely to be destined for export and stockpiles

Meanwhile the US keeps pushing out more milk despite the increas-ing scale of the western drought. Other unaf-fected states are churning out milk at a faster rate, helped by very cheap feed, to offset the losses in Cal-ifornia. Thankfully, Amer-icans are back on a dining out binge and eating more cheese.

To make things more interesting, the global eco-nomic situation looks

increasingly perilous with the uncertainty over effect that the Greek debt deba-cle will have on the finance sector and on currencies. That will take a long time to play out.

The index is a lead indi-

cator of average export returns - based on spot prices, currency move-ments and export mix. The index measures cur-rent market sentiment, but in reality it takes 3 to 6 months for prices to trans-

late into actual returns, depending on the timing of contract negotiations. It was set to 100 in Janu-ary 2000.• For weekly updates, follow us on Twitter or visit http://www.freshagenda.com.au/

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


MARKETS // 17

New investors show their faith in Australian dairyTHE LATEST Dairy Australia National Dairy Farmer Survey (NDFS) showed that farmers in many regions are invest-ing, or planning to invest in their busi-nesses, as confidence in the future of the industry has remained robust.

Dairy processors have also been investing heavily, with all major play-ers investing tens of millions of dollars in new and upgraded stainless steel.

Increasingly however, farmers and incumbent milk processors aren’t the only ones backing the future of the industry with investment dollars.

News that Gerry Harvey, one of Aus-tralia’s richest people, will invest up to $80 million into an intensive dairy farm-ing operation near Shepparton is one of many recent developments indicating a wider level of confidence in the long term viability of dairy.

The Harvey Norman boss’s announcement, coming shortly after the news that Beston Global Food Company had purchased the remaining assets of United Dairy Power (UDP), concludes a busy first half of 2015 for corporate dairy investment. Much of this has originated from previously outside players.

External capital will form a large part of Murray Goulburn (MG)’s new capi-tal structure, which has garnered much media attention for dairy in recent times.

The target date for the unit trust to be listed on the ASX is July 3, at a list-ing price of $2.10 per unit. Unitholders will have an economic exposure to MG’s business but will not have voting rights in relation to MG or its operations.

Saputo-controlled Warrnambool Cheese & Butter (WCB) lifted its pres-ence in consumer branded cheese by acquiring the ‘everyday cheese (EDC) business’ of Kirin-owned Lion Dairy & Drinks (LDD).

The EDC business cuts and wraps cheese manufactured by WCB that is sold under ‘everyday cheese brands

including Coon, Mil Lel, Cracker Barrel and Fred Walker.’ Saputo entered the Australian industry in late 2013, ulti-mately winning a bidding war for con-trol of WCB.

United Dairy Power (UDP) was put into administration in late April, having been in receivership since last year. Murray Goulburn acquired the Cabool-ture cheese brand, and reportedly, will move the cheese cut-and-shred equip-ment to their Cobram site.

Burra Foods picked up UDP’s milk depot at Poowong. Initially, no buyers were found for the South Australian processing plants at Murray Bridge and Jervois.

However, these have been acquired in recent weeks by Beston Global Food Company.

The Adelaide-based company plan to invest to upgrade the factories, raise production capacity, and introduce new products for Asian markets. The facto-ries are scheduled to re-open in Sep-tember.

Meat processor Midfield Group advanced its previously announced plans to enter the milk processing industry.

The company intends to build an export-oriented milk powder facility at a former McCain potato factory at Penola in southeast South Australia.

It is expected to be operational in July 2016, starting with 160 million litres per year. Plans for another powder plant and enlarged cold storage facility

in Warrnambool have recently received parliamentary approval – but construc-tion of that facility will wait until the Penola facility is operating. The two plants bring Midfield’s announced dairy manufacturing investment to around $130 million.

Wealthy Australians Gina Rine-hart and Gerry Harvey are not the only ones seeking to invest at the farm level. Moxey Farms is set to be acquired by the Australian Fresh Milk Holdings consortium (AFMH) (subject to FIRB

and regulatory approval), a consortium consisting of Leppington Pastoral Com-pany, New Hope Dairy and Freedom Foods. The Moxey family will continue to run the operation, while acquiring a strategic stake in AFMH.

Growing processor Australian Con-solidated Milk (ACM) and Thailand’s Dutch Mill intend to buy farms and lease them to proven dairy farmers who lack the capital to purchase their own property. The aim of the joint venture is to broaden ACM’s supply base, while

allowing Dutch Mill to source milk from “accredited farms”. ACM produce UHT milk in Shepparton through Pactum Dairy Group (a joint venture with Free-dom Foods).

European pension fund-backed Ace Farming has recently purchased two farms in northern Victoria to add to its portfolio, whilst ASX listed Aus-tralian Dairy Farm Group plan to pur-chase another three farms in south-west Victoria, doubling its milk production. The company already owns four farms, and has entered into conditional agree-ments for the additional three, trying to raise up to $17.7 million for the pur-chases.

Long term confidence to invest is supported by industry growth and profitability in the short term. With the major processors opening the 2015/16 season with milk prices at $5.60/kgMS and flagging a close in the region of $6.00 /kgMS for the third consecu-tive year, there may be more big ticket announcements to come.• Amy Bellhouse is industry analyst with Dairy Australia.

GLOBAL IMPACTAMY BELLHOUSE

Dairy NewS aUSTraLia june, 2012

With season 2011/12 only a few weeks from ending, attention is now focused on 2012/13 milk prices as farm-ers consider strategies for the coming year. In some domestically-focused regions, renegotiated contracts incor-porating lower prices and reduced ‘tier one’ access are undermining farmer confidence and supply stability. For many farmers in export-oriented regions, a lower price outlook relative to the current season not only adds to the challenges of doing business, but seems to contradict the positive medium term outlook of Asia-driven dairy demand growth.

Dairy Australia’s indicative outlook for southern farm gate milk prices – published in the recent Dairy 2012: Sit-uation and Outlook report, is for an opening price range of $4.05-$4.40/kg MS and a full year average price range between $4.50 and $4.90/kg MS. The report considers the wider market pic-ture and summarises the many factors at play; the key theme of the current sit-uation being that of re-balancing in the dairy supply chain.

In regions of Australia focused on producing drinking milk, many farmers face a re-balancing market in the form of renegotiation of supply contracts and reduced access to ‘tier one’ supply.

Shifts in private label contracts and pro-cessor rationalisation have seen milk companies adjust their intake require-ments and pricing to meet the chang-ing demands of a highly pressured retail marketplace. Lower contract prices and a lack of alternative supply opportuni-ties present challenges in a market with limited manufacturing capacity. Despite these challenges, the underlying domes-tic market is stable, with steady per-cap-ita dairy consumption and a growing population providing a degree of cer-tainty beyond the current adjustments.

In the seasons following the 2008 financial crisis and subsequent com-modity price recovery, farmers in export-oriented regions have seen solid global supply growth (see chart) - with higher-cost competitors in the North-ern Hemisphere amongst those expand-ing output as their margins increased. This season, favourable weather con-ditions have further enhanced milk

flows. 2012 milk production in the US is up around 4% on 2011 for the year to April (leap year adjusted), whilst early data suggests EU-27 milk production finished the March 2012 quota year up 2.3% on the previous year. New Zealand production is widely expected to finish this season up 10% on last year - a huge market influence given 95% of NZ milk is exported. Argentina is also enjoy-ing solid production growth, but a sig-nificant supply gap in Brazil prevents much of this additional milk from leav-ing South America.

Despite wider economic uncer-tainty, demand has remained resilient as importing countries like China and

those in south-east Asia and the Middle East maintain consistently higher eco-nomic growth rates that support increased dairy consumption. How-ever, the surge in supply has outpaced demand growth in the market.

This situation has seen the scales tip in favour of buyers in dairy mar-kets, with commodity prices retreat-ing steadily over recent months. Butter prices are down some 30% from their 2011 peaks, whilst powder prices have lost more than 20%. Farm gate prices have subsequently been reduced in most exporting regions. The average basic farm gate price for milk in France for example, dropped 12% from 32 Euro

cents/litre in March (AUD 41c/L) to 28 Euro cents/litre (AUD 36c/L) in April. Profit margins are under pressure in the US, and in NZ Fonterra has announced the final payout for the 2011/12 season has been cut from NZ$6.75-$6.85/kg MS to NZ$6.45-$6.55/kg MS (AUD$4.96-$5.04).

Effectively, global dairy markets are rebalancing. Lower prices will both slow production growth and stimulate demand, and as this occurs we will ulti-mately see a price recovery. Key factors to watch on the global scene will be the rate at which milk production overseas slows in response to lower prices, the impact of the current financial worries on consumer confidence, the path of China’s economic growth, and the value of the Australian dollar.

Demand for exported dairy prod-ucts remains a positive and will con-tinue to grow with the middle class in large emerging markets such as China, with changes in diet and with increasing urbanisation - and also in conjunction with global population growth. Locally, the domestic market is supported by a growing population and stable per-capita consumption. Whilst the dairy market is currently a challenging place to be a seller, all signs indicate that bal-ance will ultimately return.

agribusiness // 17

austraLian FooD company Freedom Foods Group Ltd is to build a new milk processing plant to cash in on growing demand in Asia.

The plant, to be built in southeast Australia, will be the first Australian green-fields expansion in UHT in 10 years.

Freedom’s wholly owned subsidiary Pactum Australia will run the plant. Some of its products will be sold in Australia.

The company says given Asian consum-ers’ rising incomes and improving diets, demand there will grow for qual-ity dairy products from low-cost production bases such as Australia, whose milk is well regarded.

The new plant will allow Pactum to meet growing demand for UHT dairy milk, and add to capacity for value-added beverages at its Sydney factory. Pactum is expanding its capabili-ties at the Sydney plant

to provide portion pack (200-330ml) configura-tion for beverage prod-ucts.

The NSW location will provide access to the most sustainable and economic source of milk. Pactum has strong links to the Austra-lian dairy industry and will expand its arrangements with dairy farmers for supply of milk. The new plant will increase scope for Australian milk supply – value-added, sustainable and export focused.

Initially the plant will produce 250ml and 1L UHT packs from a process line capable of 100 mil-lion L. The processing and packaging plant will emit less carbon, use less water, and be more energy-effi-cient than equivalent UHT facilities in Austra-lia and SE Asia. Pactum expects site preparation to begin in October 2012 and start-up by mid-2013.

Pactum makes UHT products for private label and proprietary customers.

Freedom Foods planttargets Asia

Malaysia FTA benefits dairyaustraLian DairY, rice and wine exporters to Malaysia are the biggest winners in a free trade agreement (FTA) signed between the two coun-tries last month.

The deal, signed after seven years of negotia-tions, allows a liberalised licensing arrangement for Australian liquid milk exporters and allows access for higher value retail products.

It guarantees Aus-tralian wine exporters the best tariff treatment Malaysia gives any coun-try. It also allows open access arrangements from 2023 for Australian rice with all tariffs eliminated by 2026.

The National Farmers’ Federation says the trade deal will improve inter-national market access for Australian agricultural goods.

“After seven years of negotiation, the NFF is under no illusion of how challenging it has been to complete this FTA with Malaysia,” NFF vice presi-dent Duncan Fraser says.

The FTA will fill a number of gaps within the

ASEAN-Australia-New Zealand FTA (AANZFTA).

“Protectionist senti-ment over agricultural goods is rife and grow-ing across the globe, so in this context it is pleas-ing Australia has managed to forge an agreement with Malaysia that has dealt with some sensi-tive agricultural issues not effectively covered by AANZFTA,” says Fraser.

“While under the AANZFTA agreement most of Australian agri-culture’s key interests had tariffs bound at zero, dairy and rice are two sec-tors where incremental market access improve-ments have been negoti-ated under the Malaysian FTA.

“This trade deal was also particularly impor-tant for sectors such as dairy that have been facing a competitive dis-advantage in Malaysia compared with New Zea-land which already has a completed FTA with Malaysia in place.”

The FTA also sig-nals some administrative benefits for Austra-lian agricultural export-

ers through streamlining of rules-of-origin dec-laration processes and improved marketing arrangements for certain commodities.

The Malaysian market is worth about A$1 bil-lion in Australia agricul-tural exports – including being its fourth-largest sugar export market and fifth-largest wheat export market. With an annual economic growth at about 5%, Malaysia forms an impor-tant part of the ‘Asian Century’ story and the opportunity this presents for Australian agricultural producers, says Fraser.

Despite the comple-tion of this agreement, much remains to be done for Australia’s farmers to tap into the full potential of the Asian region and beyond.

He says the NFF will now throw its attention towards ensuring agricul-ture remains front and centre in completed FTAs with South Korea, Japan, China and Indonesia as immediate priorities.

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

but also through technical or so called ‘behind the border’ restrictions.”

The FTA was signed on May 22 in Kuala Lumpur by Australia’s Trade and Competiveness Minis-ter Craig Emerson and his Malaysian counterpart Mustapa Mohamed.

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

incremental change in milk production (year-on-year)

Export demand remains strong

Sealing the deal: Malaysian trade minister Mustapha Mohamed with Australian counterpart Craig Emerson after signing the deal.

gLobaL impacTJohN DropperT

016-017.indd 17 6/06/12 1:41 PM

Gina Reinhart (second from right) at the November announcement of her joint investment with Chinese partners in the Queensland dairy industry.

“News that Gerry Harvey, one of Australia’s richest people, will invest up to $80 million into an intensive dairy farming operation near Shepparton is one of many recent developments indicating a wider level of confidence in the long term viability of dairy. “

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20 // management

SInCe BUYIng their first dairy farm on the out-skirts of Wagga Wagga in 2008, paying down debt and increasing business equity has been the top priority for Simone and Neil Jolliffe.

It’s been a strategy made tougher by unfortu-nate timing.

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

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

The 360ha property fronts the Murrumbidgee River at Euberta 10km west of Wagga Wagga. They currently milk 230 cows all year round with between 30 and 40 dry at

any one time. The 100% Holstein

herd produces about 2 million litres a year at an average of 9350 litres and 665kg of milk solids per cow. The cost of produc-tion is about 36 cents a litre.

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

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

sheep. There are just 12 dairy farms in the area supplying the nearby Fon-terra factory that manu-factures the Riverina Fresh

Debt reduction pays dividendsCameron wIlSon

who: Simone and Neil Jolliffe where: Euberta via Wagga Wagga whaT: Increasing equity

brand.Mrs Jolliffe says milk

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

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

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

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

About 65% of feed is produced on the farm. Pastures are mainly sown to lucerne with some prai-rie grass and annual rye-grass and cereals. The mix is designed to offer growth

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

A total of 80ha of the property is under irri-gation with the water coming from a 425 mega-litre bore licence and a 290 megalitre entitle-ment from the river. There is also an annual rainfall average of 550 mm.

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

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

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

milk per cow.“I guess our focus has

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

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

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

Mr Jolliffe says the farm needs to get bigger both for family and finan-cial reasons.

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

of things,” he said.“We’re at an awkward

point where we are too big for an entry level farm but it’s not big enough for someone to do an expan-sion on.

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

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

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

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

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

The Holstein herd calves continuously through the year.

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


MANAGEMENT // 21

THE MESSAGE of better nitrogen usage was being spread at a recent Focus Farm field day at Leongatha South.

Guest speaker for the open day at Tim and Grit Cashin’s farm was Richard Eckard, who told the crowd of almost 100 farmers and service providers that smarter use of nitrogen was a key to better on-farm performance.

Renowned for his ability to communicate complicated scientific information in an easy-to-digest manner, the University of Melbourne Professor and Director of the Primary Industries Cli-mate Challenges Centre said some farmers have become dependent on increased nitrogen usage, with-out consider-ing the cost benefit.

It was a message that Tim Cashin believes was very well received by the big crowd.

“He was fantastic,” he said.

“Just his knowledge on all aspects of nitrogen usage and the guidelines for best practice - he had the audience captivated.”

Mr Cashin said he would be one of many farmers in attendance who would re-assessing nitro-gen usage after listening to the guest speaker.

“We’ll be catching up with our practices for sure,” he said.

“He spoke really well on what are the potential losses and what can be the gains, especially looking at using it as a feed cost.

“His message was that, if you need it you put it on. Do it because you need to, not just because it is in your fertiliser budget.”

Focus Farm facilitator Matt Harms said having a speaker of Richard Eck-ard’s calibre capped off what was “a ripper of a day”.

“He debunked a lot of the wives tales, if you like, but some of the rules of

thumb people use actually have some foundation in fact,” he said.

“He clarified some of the misconceptions and challenged quite a few of the ideas out there.”

Key points from the nitrogen discussion included:

■ Ensuring cows con-sume any extra grass grown from nitrogen use.

■ Adjust grazing strat-egies to maximise benefits of nitrogen application.

■ Be aware that nitro-gen can be easily lost through run-off or as gas.

■ Change nitrogen usage from the fertiliser to

feed budget to improve efficiency.

The field day was also a chance to catch up on Tim and Grit’s prog-ress as Focus Farmers.

In the 10 days preceding, around 100mm of rain had fallen on the 500 acre farm, giving people the chance to see how extensive hump-and-hollow work had helped to improve paddock drainage.

Mr Cashin said he’s pleased with the results so far, but the jury is still out.

“The middle of winter will be the go, you can come back down and we’ll see how it’s looking then,” he said.

The hump-and-hollow plan has been part of the Focus Farm strategy that Tim and Grit have been trying to implement.

Their goals as Focus Farmers have included running a “sharper” business (including setting budget and pro-duction goals and stick-ing to them), assessing the genetic material in their 280-strong herd of mostly Holsteins, investigating expansion options as they arise and creating a better work/life balance.

For Tim, the Focus Farm experience has been all positive – and made even better by good sea-

Spreading the good word

sonal conditions. “We’ve had rip-

ping season, autumn has been a bit hit and miss, but I certainly wouldn’t be caught complaining

about it,” he said.The Focus Farm field

day was supported by GippsDairy, Dairy Aus-tralia and the Australian Government.

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

“If you need it you put it on. Do it because you need to, not just because it is in your fertiliser budget.”

HAY & SILAGEWhen it comes to Hay & Silage production, preparation and planning are as important as having the right gear.To help farmers prepare and maximise the conversion of grass into milk, therefore into dollars, Dairy News is putting together a Hay & Silage Special Report. This will run in the August issue of Dairy News, distributed free to all dairy farmers.

BOOKING DEADLINE: July 29AD MATERIAL DEADLINE: August 4PUBLISHED: August 11CONTACT: CHRIS DINGLE | T: 0417 735 001 E: [email protected]

NEXT ISSUE: AUGUST

SPECIAL REPORT


22 // management

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

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

The farm is already heading in the right direc-tion with an expansion of cow numbers, improve-ments to a troublesome drainage system, produc-tion on an upswing and production costs on a downward curve.

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

it to the top.They hope having the

spotlight turned on them through the Focus Farm program will set a good example for other farm-ers and inspire the com-munity.

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

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

“There’s not many earn

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

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

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

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

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

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

Fine-tuning operation under the spotlight

who: Peter and Jo Jones where: Kayena whaT: Focus Farm

Rick Bayne“We’re seasonal and

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

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

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

The increases and improvements are grad-ual and attributed to “fine tuning”.

“We’re just manag-ing grass utilisation and being a bit more strate-gic in where we’re putting cows,” Mr Jones said.

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

Addressing the drain-age problems on the 253ha milking platform is inte-gral to improving the farm’s performance.

Limberlost uses a feed-pad that was installed about five years ago.

“I wouldn’t go any other way,” Mr Jones said. “If you feed the amount of dry matter that we buy in; probably 1.2-1.4 tonnes per cow, you need to have somewhere suitable to feed that.

“We’re trying to

increase pasture utilisa-tion but one of the issues we’re facing is the drain-age and salinity problem.”

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

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

Annual pasture utilisa-tion is 9.4 t DM/ha, down from above 10 a few years ago. The grazed pasture per cow is 2.7t DM, while concentrates, hay, silage and other feeds add up to 2.5t DM.

“The salinity problems have really hampered the amount of pasture grown,” Mr Jones said.

The farm has cross-bred Jersey-Friesian cows and uses LIC breeding. “They’re a profitable, fer-tile cow, especially suited to winter milking,” Mr Jones said.

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

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

Artificial insemination is responsible for 65-70% of reproduction.

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

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

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

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

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

The farm is surrounded by the second biggest vineyard in Tasmania. “You have to drive through vineyards to get to us,” Mr Jones said. “We’re farming through the vineyards but it’s still a good dairy area.”

Jo and Peter Jones on their Tamar Valley dairy farm.

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

The Jones run a crossbred Jersey-Friesian herd.

PO Box 7538 • Shepparton • 3632 Victoria Phone (03) 5831 5559 • Fax (03) 5822 [email protected] • www.wwsires.com

Dam: Cookiecutter MOM Halo-ET, VG 88

Dai ry NewS aUSTraLia july 2015

breeding management // 23

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

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

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

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

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

growth checks important

ineXpensiVe changes can be made to improve calf housing and conditions, according to Wendy Morgan, nutrition and quality assurance manager with SealesWinslow.

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

Calves should be dry and out of the wind.

“If they are cold that is not really a problem. Calves cope fine with cold weather but they don’t cope well with wet or wind chill,” she said.

“When they are exposed to that sort of weather they are using their energy to keep warm and not for growth. You could use canvas or shade cloth appropriately to reduce wind getting into the shed.”

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

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

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

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

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

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

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

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

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

“In a rumen we want everything to be mixing

Inexpensive calf housing changes boost growthpam tipa

around – all the bacteria and all the feed particles to be mixed together and broken down and absorbed by the animal. By having water in there you are moving

everything around.” Many trials show the

grow rates of animals on water is a lot better than those without water.

For transportation the trailer should be

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

difficult to clean. Calving planning is

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

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


24 // animal health

Holstein

Rank profit (BPI) Region Owner Location

1 Tas Wagner, G Winnaleah

2 Nth Vic Hogg, A & J Biggara

3 WA Kitchen Farms Boyanup

4 Gipps Henry, TW & TC Tinamba

5 Gipps Anderson, WR & BL Kongwak

6 NSW Parrish, TJ & LR Barrengary

7 Nth Vic Sprunt, RG Kaarimba

8 West Vic Dickson, BJ & JL Terang

9 West Vic Walker RG & CA Heathmere

10 Gipps Johnson, R & L Bundalaguah

Jersey


1 Nth Vic Hoey, DM & L Katunga

2 West Vic Glennen, C & CO Terang

3 West Vic Tanner, JS & KL East Framlingham

4 Nth Vic Worboys, R & A Kotta

5 Nth Vic Van Den Bosch, JH & CA Lockington

6 WA Boley, Messrs PJ J Karridale

7 Gipp Moscript, ME, CJ & JM Leongatha South

8 West Vic (MC) Wyss Trading Boorcan

9 Nth Vic McManus, BT & CA Bamawm

9 NSW Saul, M & B Macksville

red breed


1 NSW Graham, RW & BC Numbaa

2 West Vic Raleigh, Jan Timboon

3 Gipps Leppin, T & U Bena

Topping the dairy genetics charts Top herds based on BPI, April 2015aUStRalia’S tOP

dairy herds based on genetic merit have been announced by the Austra-lian Dairy Herd Improve-ment Scheme (ADHIS).

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

Daryl and Lani Hoey’s herd at Katunga is the number one ranking Jersey herd for BPI.

And Sam Graham’s herd at Numbaa, NSW, is the number one ranking red breed herd for BPI.

ADHIS general man-ager, Daniel Abernethy congratulated the herds on their achievement.

“It takes a sustained

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

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

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

The Health Weighted Index (HWI) allows farm-ers to fast track traits such as fertility, mastitis resis-tance and feed efficiency.

The Type Weighted Index (TWI) allows farm-ers to fine tune type traits.

The three breed-ing indices were intro-

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

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

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

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

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

Keep colostrum for longer with yoghurtaDDinG YOGhURt to colostrum gives it longevity and stops it from separating, says nutritionist Wendy Morgan.

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

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

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

“You want colostrum to be com-pletely consistent so the calves are getting all the same amount at the same time. We don’t want it separat-ing out.”

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

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

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

The timing and amount of colos-trum is important, Ms Morgan said. The best time to get colostrum into calves is the six hours after they are born. If possible it is best to collect calves twice a day from the paddock, otherwise some will not get colos-trum until after 24 hours.

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

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

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

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

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


Blue-Prairie He-Man #1530

A2/A2


animal health // 25

Top herds based on BPI, April 2015

How to assess colostrum management on your farmthiS aRtiCle intro-duces the concept of colostrum, the conse-quences of poor colostral intake and a useful way to assess colostrum man-agement on your farm. Defining colostrum

Colostrum is the first milk produced in the udder and is the milk col-lected at the first milk-ing only.

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

Colostrum contains antibodies which con-tribute to the defence system of the calf and help combat disease.

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

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

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

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

Colostrum is also very nutritious and con-tains about four times the amount of protein and

twice the amount of fat of normal milk. This equates to approximately 27% total solids, compared to ~19% total solids of transi-tion milk and ~12.7% total solids of normal milk.

Aside from IgG, colos-trum also contains many hormones and growth fac-tors, along with maternal white blood cells.

These additional com-

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

Research is currently ongoing in this area. Long term benefits of colostrum

Research from the United Sates has shown

that calves receiving ade-quate colostrum during the first 24 hours of life had a reduced risk of sick-ness during the pre-wean-ing period and a reduced risk of dying in the pre-weaning and post-weaning periods.

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

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

Perhaps most surpris-ingly, calves that received adequate colostrum pro-duced more milk in their first and second lacta-tions, compared to those that received insufficient colostrum.

As time goes on, the long term benefits of colostrum are becom-ing more apparent, result-ing in more interest in this precious commodity. What happens when calves receive insuffi-cient colostrum?

If calves do not ingest sufficient IgG from colos-trum, they are very vulner-able to disease.

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

Many research stud-ies have demonstrated that the risk of sickness and dying over the first six months is directly associ-ated with FPT. One such study estimated that 31% of deaths during the first three weeks of life were attributed to FPT.

In a study conducted in south west Victoria in 2011, it was found that 38% calves (over 100 farms) had FPT. This indicates that colostrum manage-ment is still a real chal-lenge on many Australian dairy farms.

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

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

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

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

Your veterinarian will be able to assist with this.

The serum total solids

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

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

Next month, we dis-cuss the importance of colostrum quality and how to measure it. • Dr Gemma Chuck is a dairy vet working at The Vet Group in south west Victo-ria. She has a special interest in calf rearing and is cur-rently undertaking her PhD in this area at The Univer-sity of Melbourne.

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26 // ANIMAL HEALTH

Could your dry-off be better?DRYING OFF is your single biggest opportunity to change the infection status of cows, and should probably be thought of not just as the end of one lac-tation, but actually as the start of the next lactation.

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

There are three broad goals for a suc-cessful dry-off program –

■ To successfully transition each cow from being a milking cow to being a dry cow.

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

■ To avoid antibiotic residue viola-tions, especially when the cows

calve again.Our experience is that virtually every

farm we have worked with has been able to make significant improvements to their dry-off program.

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

This strongly suggests that most

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

Some key questions that every farm could think about are:

■ Do you have a list of dry-off dates based on predicted calving dates? How confident are you of the accu-racy of those dates?

■ What is your strategy to reduce

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

■ What is your dry cow ther-apy regime? Have you discussed treatments with your vet? Will it maximise both treatment and pre-vention opportunities?

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

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

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

We strongly suggest you talk to your adviser to review your routine, and you are also welcome to call us at the Dairy Focus office with any queries you may have.• Dr Rod Dyson is p rincipal veterinary con-sultant and team leader of Dairy Focus, which specialises in practical on-farm mas-titis control programs.

ROD DYSON ARE YOUR TEAT WIPES OK?

Q. Do you need teat wipes with your dry cow?A. No, I’ve got plenty at home

This conversation always wor-ries us!

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

Secondly, what condition are those “left-over” wipes in?If teat wipes are not sufficiently moist (wet), then there may not be enough alcohol to achieve adequate sterilisation of the teat end.

And if they are actually dry, then they will do very little at all.We have seen several poor

outcomes as a result of using old teat wipes.

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

If in doubt, throw them out!

Milk replacer pays dividendsGIPPSLAND FARM-ERS Trevor and Anthea Saunders, Shady Creek, north-east of Warra-gul, are dedicated Jersey breeders and their enthu-siasm about their herd showed through when we visited in late May.

Mrs Saunders takes control of the calf rear-ing side and is determined to give them the best pos-sible start. So the opti-mum feeding procedure becomes a major consid-eration. They use Urban automatic calf feeders installed in three bays of the calf shed where the different groups, each of 24 calves, are treated indi-

vidually as sensors read their ear tags.

The calves get the first eight hours of colostrum through the mothers, and are then taken off onto a manual feeder where they receive colostrum only. “They are strong enough to be taken off after 24 hours,” Mrs Saunders said.

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

“When we were looking at the calf milk replacers we wanted animal-derived components, not vegeta-ble-sourced ones as the calf ’s digestive system works better to get the best possible out of them. Plus probiotics are impor-tant,” she said.

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

“We chose the Max-Care Ultimate formulation purely on its specifications – particularly the high pro-tein and fat percentages. The calves make a better curd and it optimises the nutrient consumption and

extraction from the feed.”Milk powder manu-

facturer Maxum Animal Nutrition have three dif-ferent formulas in their MaxCare Calf Milk Replacer range, and the top of the range formula-tion ‘Ultimate’ contains

the highest nutrient den-sity available in the Aus-tralian market with 28% protein and 22% fat as well as a heady collection of probiotics, amino acids, vitamins and minerals.

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


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the first two weeks. The feeder allows them 1.2 litres per feed every two hours until they reach their quota for the day. From two to 10 weeks they are on six litres a day and then the milk allowance is ramped down to two litres at three months of age.

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

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

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

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

They get a feeding his-tory for each calf through the auto feeding system computer.

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

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

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

Trevor and Anthea Saunders say their aim is to be in the top 2% of Jersey herds in Australia, and an effi cient calf-rearing program is an essential part of that.


Webb-Vue Plan Veronica-ET, GP 83

A2/A2


STOCKFEEDS // 27

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

Dr Steve Little from Capacity Ag Consulting says feeding a special supplementary diet in the last three weeks before calving will give cows the best chance of a success-ful transition

“I call it a no-brainer,” Dr Little said.

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

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

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

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

“There are many details to manage so seek help from a professional nutri-tionist.”

Dr Little said heavily pregnant cows face many challenges.

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

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

weeks.”But there’s no magic formula for

success.“There are number of different

feeding approaches that are used in the pre-calving transition period. Which approach is suitable depends on what the farmer’s feeding approach is after calving,” Dr Little said.

He added that some farmers use

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

“About 70% of farmers in Austra-lia already use some form of transi-tion feeding approach. Of those that do over half of them use a commer-cial transition feed supplement, usu-ally with hay and a strictly controlled amount of pasture.”

Dr Little said commercial prod-ucts are generally good quality and well accepted by cows.

Anionic salts, which contain chlo-

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

“These days the flavou rs and aro-matic additives the stockfeed compa-nies are able to put into the products means cows accept them quite well.”

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

“That requires feed testing and analysis.

You can’t tell by looking at forage whether it’s

suitable for a transi-tion cow. You need

to do a proper feed analysis.

“Some good high production forage suitable for

a milking cow isn’t necessarily appro-priate for pre-calv-ing transition cows.”

Dr Little said the rations should pro-

vide the cow with sufficient megajoules of energy, sufficient

protein, the correct mix of cal-cium, phosphorus, magnesium and

ensure the Dietary Cation Anion Dif-ference (DACD) is low enough.

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

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

“We’re trying to adapt the rumen so freshly calved cows can cope well with grain and digestible pasture and really start milking well after calving, and we try to minimise the amount of body condition they lose after calv-ing.”• 30% of farmers miss out on benefits of transition feeding – page 28

RICK BAYNE


CHECK OUT THE LATEST NEWSAND INFORMATION AT

Dr Steve Little from Capacity Ag Consulting says feeding a special supplementary diet in the last three weeks before calving will give cows the best chance of a success-

“I call it a no-brainer,”

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

“Almost every nutritionist you speak to would agree it’s the most significant nutri-tional technology in the last 25

However, Dr Little said getting the best results from a transition feeding

He added that some farmers use for pre-calving transition cows.“That requires feed

testing and analysis. You can’t tell by looking

at forage whether it’s suitable for a transi-

tion cow. You need to do a proper feed analysis.

high production forage suitable for

a milking cow isn’t necessarily appro-priate for pre-calv-ing transition cows.”

rations should pro-vide the cow with sufficient

megajoules of energy, sufficient protein, the correct mix of cal-

cium, phosphorus, magnesium and

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ABOUT 30% of Aus-tralian dairy farmers are missing out on the advan-tages of a transition cow nutrition management program.

Dairy Australia pro-gram manager for animal health and fertility, Kath-ryn Davis, described tran-sition cow management as one of the most significant advances in dairy nutrition and production over the past 20 years.

It can improve cow health, milk production and reproductive perfor-mance but a Dairy Austra-lia survey has found only about 70% of farmers are using the system.

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

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

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

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

animals.”Ms Davis said there

were multiple benefits from having a transition cow system.

“The cow will be well prepared to transition from being a dry cow back into lacta-tion; she’ll produce more milk once she gets into the milk-ing herd and she’s more likely to have a low stress calving and keep in good health.

“It keeps her well sup-ported during the chal-

30% of farmers miss out on benefits of transition feedingRICK BAYNE

lenge of going through a pregnancy and it has ben-efits for fertility down the track.”

Ms Davis said evidence of the ben-efits of transition cow man-agement had been strength-ening over the past 20 years and more farm-ers were catching on.

“We keep building our knowl-edge around what’s the best way to do this in our systems,” she said.

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

strategy can see the ben-efits.”

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

“It’s difficult to give generic advice,” she said. “There are a lot of fac-tors you have to take into consideration when plan-ning a transition strat-egy. You’ve got to know what your goals are; what your cow nutrition and body condition is lead-ing up to calving, and what diet those cows will be expected to perform on once they go into a lactat-ing herd.”

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

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

gies involved. “There are different

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

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

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

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

Ms Davis said speak-ing to a nutritionist would help farmers.

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

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

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

depends on what system you have and what sort of diet the cows are expected

lactating,” Ms Davis said.Rations vary and while

Kathryn Davis

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STOCKFEEDS // 29

MOVING INTO winter the question of what to do regarding fibre and forage feeding is always an inter-esting one.

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

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

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

It does not necessar-ily ring true looking at the whole farm over the course of the year.

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

It is possible to frame some questions to ask yourself when making this decision:

■ Pasture in winter

Feeding fibre in winterTOM WALSH

can be lower in fibre levels and is not able to provide adequate effective fibre for the rumen. 1-2 kg hay or silage (providing it can be limited to that and no more) will help to provide rumen balance. Grazing pasture at the 2-3 leaf stage will

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

■ In virtually every south-ern winter there are gains to be made by keeping cows off pas-ture for greater periods of time. Feeding forage

on a feed pad helps to achieve this.

■ In the depths of winter substation is not a dirty word. Sending the cows down the pad-dock with a bit of fibre in their rumens on top of the slug of concen-trates from the dairy will reduce grazing

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

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

of a solid feed wedge. When it does get wet there will be a good pasture cover to offer the cows and reduce the amount of pad-dock damage that does occur.

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

NUTRITIONAL SCOURS is one of the two forms of scours in unweaned calves. The other form is pathogenic scours.

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

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

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

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

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

Severity of scours can be monitored by observing the below:

■ frequency and quantity of scours ■ mental responsiveness- alert or depressed ■ Suckling frequency ■ Sunken eyes ■ Weakness ■ Gum condition- bright or pale

It is important to isolate the affected calves, provide them with warmth and keep them on dry bedding.

These calves should be given electrolytes, which are designed to replace body water and provide minerals such as sodium, potassium, chloride as well as provide energy. If scouring persists more than a day, please contact a vet.

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

Secondly, a functional fibre source such as Opticell PLUS UF could be mixed into the milk or milk replacer to assist the digestion as well as provide the necessary nutrients in the hindgut to ensure firmer stools and re-absorption of water.• Dr David Isaac is animal health, innovation and research manager with BEC Feed Solutions.

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WHAT MAKES A GOOD CALF FEED?

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

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

Nutritionist Wendy Morgan recently

presented a series of calf rearing workshops around New Zealand.

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

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

The aim is to grow rumen papillae (finger-

like protrusions). Papillae grow by feeding starches and sugars to the calves. Starches come from grains like wheat, maize and barley and sugars come

Give calves access to pellets, meal from day onePAM TIPA

from things like molasses.

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

“The calves will grow well because they are adapted for the milk. But if we only feed milk and wean onto grass they will have a massive growth check because the rumen isn’t developed enough to take the nutrients out of the pasture.”

Feeding only hay and milk will not grow the papillae but it will cause the muscles to develop.

Sometimes papillae grow too quickly and they stick together; fibre sources help split them apart.

“We want slowly absorbed starches because too much sugar will break down too quickly and the microbes can’t absorb it and you can end up with acidosis.”

Molasses is fine but it must be limited.

Ms Morgan said the sooner we can get calves eating meal the better because milk is the most expensive feed for calves.

Meal is the next most expensive and grass is the cheapest. “The sooner we can get them on grass the better.”

She suggests putting meal in the pen from day one to get them used to it and eating a little. Pellets and meal are both suitable for young calves.

Don’t add urea to calf feed because urea is not a true protein. Avoid

calf meal that says ‘non-protein nitrogen’.

Calves need things like soya bean, canola, cotton seed, sunflower meal – any sort of vegetable protein. Soya bean meal has 48% protein – a high protein meal of 30-50% is needed.

Calf meal needs to be high in energy; look at the specifications. You want 13% ME for small calves and a bit more for older calves.

That should come from grains like maize, wheat or barley.

Energy should not be obtained through biscuit meal, lolly waste or similar. “We don’t want too much fat or fast energy. A consistent diet is necessary.”

Ms Morgan said the amount of milk and frequency is one of the most contentious subjects. Some people do once-a-day from day one others think that is cruel.

And if calves aren’t eating meal it probably is because there’s too much milk. “You can look at scaling back after about three weeks.” For those on twice-a-day who are considering when to go to once-a-day, three weeks is the best timing.

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WHEN IT was time earlier this year to look for a new seeder Brett and Kylie Dixon went back to the dealer-ship from where they buy most of their equipment.

Mr and Mrs Dixon are milking 473 cows at the moment on their 54 unit rotary at Lan-caster, between Stan-hope and Shepparton in Victoria’s Goulburn Valley.

Brett grew up on the farm which now encompasses 800 hect-ares, including 228ha, 18 kilometres away.

They took delivery of their new Duncan Renovator AS3500 from Ber-toli Farm Machinery in Shepparton at the end of February to replace their three metre Duncan machine which had done five seasons without any issues.

“We like to turn over the machinery to upgrade for more efficiency. We were pretty keen on the Duncan and wanted to go a bit bigger, so we went to the 3.5 metre model, and our previous one wasn’t an air seeder.

“Just about everything comes from

Bertoli - we deal with Jack Collins there – they are good to deal with or we wouldn’t go back.”

Duncan Ag is based in New Zealand and has a reputation for innovation,

strength and quality of farm machinery manu-facture for the past 75 years.

The Renova-tor AS3500 is an air system version of the earlier Renovators, with seed and fertil-iser delivery by air for improved seed place-ment accuracy, partic-

ularly in hilly country.With an effective sowing width of

3500mm, the machine comes standard with a weigh kit containing scales and an electronic hectare meter.

It has 700 litre hoppers for seed and fertiliser and a butterfly valve for con-trolling different air rates between the bins. Positive drive comes through an adjustable ground-driven jockey wheel.

Mr Dixon has sown 440 hectares so far; “We’ve done a bit of everything”, he said as he rattled the figures off the top of his head, “50 hectares of perennials,

90 hectares of wheat, 12 of lucerne and 14 of vetch, the remainder is the annu-als.”

“The boxes are easy to fill and drain out. The seed all runs into the one spot,

so you don’t have to be spreading the seed along, like we did with the smaller one.”

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

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

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

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

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

They finished sowing at the end of

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

Dixon Dairies make their own hay and did 2700 round bales this season. They run a McHale V640 round baler that they purchased two years ago, also from Bertoli. Contractors look after the pit silage which amounted to 1000 dry tonne of sub-silage and 600 dry tonne of maize.

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

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

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

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

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

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

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

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


MACHINERY & PRODUCTS // 31

WORKING CLOTHESCHRIS DINGLE

Duncan helps efficiency drive

WHO: Brett and Kylie Dixon WHERE: Lancaster WHAT: Duncan Renovator

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

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

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32 // MACHINERY & PRODUCTS

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

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

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

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

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

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

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

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

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

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

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

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

“The launch also gave us all the chance for some great networ king and the atmo-sphere at Echuca’s Great Aussie Beer Shed and Heritage Farm Museum was a lot of fun.” Tel. PFG Australia on (03) 8353 3600.

New Vicon baler a hit with dealers

AS THE more devoted readers of this column (Hi Mum!) will be well aware, Grunt has become a cele-bration of a diverse range of machines, with the unit-ing characteristics that they’re made of steel, and they get things done.

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

design that lasts the test of time also helps.

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

It’s a no brainer for most commercial scale

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

At one end of the spec-trum, you can just dig holes, put posts in them, and fill them up with con-crete. Way too much fun with a shovel and crow-bar for me, even with the

invention of powered augers and rapid-set con-crete.

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

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

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

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

A design refined over

Lyco the powerhousein post drivers

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

There is a certain smugness of tipping some water into the hole ahead of the post to improve the finished product. That smugness is rapidly diluted when the com-pressed mixture erupts out from under the post and sprays across one’s face.

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

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

The fact that they hold their resale value as well as any other machine I’ve ever seen, simply by doing a good job of that; well if that’s not timeless, I don’t know what is.• John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a vari-ety of roles for both profit and fun.

GRUNTJOHN DROPPERT


machinery & products // 33

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

Text alert sent before calvingWhen irish farmer Niall Austin lost a cow and calf during an unexpected difficult calving, he decided to act.

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

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

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

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

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

To date, Moocall has sold devices to 2500 farms

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

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

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

Mr Austin said there can be black spots on some parts of a rural farm. “Our calving sensor can pick the strongest network to help ensure a text is delivered at the right time,” he says.

How many Moocall devices does a farmer need?

Mr Austin said one device is adequate for a farm with up to 50 head. “Farmers know their stock and if they manage the placement of their device well, they can capture as many as six-seven calvings per week

Moocall devices are particularly valuable to farmers in the following circumstances:

■ Early or late calvers (stragglers) ■ Heifers ■ Nighttime calving ■ Pedigree breeds where vet assistance is

often required ■ Farmers with other jobs which keep them

away from the farm ■ Where there is distance between the farm-

house and the herd or calving sheds.

calling for help

Niall Austin

with just one device.“Bigger farms may

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

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

FDD0554015


34 // machinery & products

New parallel milking parlour quicker, requires less staff

Derek and Catherine Hayward with farm owner Paddy Lockett (right) in the new parallel milking parlour.

a smaLL dairy farm at Cambridge in New Zea-land has installed the country’s first paral-lel milking parlour from DeLaval.

The P2100 milking parlour, commissioned last December, is making a substantial difference on the 134ha farm owned by Paddy Lockett, where 50/50 sharemilkers Derek and Catherine Hayward milk 320 cows. They have milked there for eight seasons.

Mr Hayward said get-

ting rid of a 36-a-side herringbone for the 18-a-side parlour with the latest technology was a sound business decision by the farm owner.

He says milking is now handled by one person, allowing the other staff to do other farm jobs and making the business more efficient; cows are more comfortable in the spacious parlour where they are fed individually. Milking is done year-round and three calvings are planned this season.

Mr Hayward said milking time has dropped though this was never the

main reason for switch-ing to P2100. Keeping labour cost down was the main driver.

The herringbone shed was only 13 years old but needed two milkers year-round.

“When we started get-ting our cow numbers down, milking around 250 cows, it did not jus-tify the expense of a relief miker,” Mr Hay-ward said. “However, with a 36-a-side her-ringbone you need two people for milking; the idea was to put tech-nology in the shed that allowed 350 cows to be

milked by one person.” Mr Hayward men-

tioned the parallel milk-ing parlour to Lockett, and asked three compa-nies for quotes.

“Two were not interested but DeLaval told us they were looking for somewhere to introduce the P2100,” he says. “All stars were aligned; DeLaval was ready to launch the product here, and we were looking for something like that.”

Their P2100 comes with automatic cup removers, auto draft and auto wash features; new

sudesh kissun

technology can be added to the parlour.

Mr Hayward said the P2100 enables high throughput with fast milking and quick changes from one group to the next – exactly what is needed for a profitable milking system.

Cow comfort and worker safety are impor-tant factors for Hay-ward, and the P2100 is designed for both: cows have easy entry to the milking place and a com-fortable, natural position during milking.

Cows are fed while milked; after milking the front gate goes out and 10 seconds later the deck is watered, the flush last-ing 10 seconds.

Mr Hayward said by this time every cow has moved off the platform, then the front gates come down.

“And because she can’t turn till she gets to the front because of the

sequence gates, she walks out without any problem and the next mob moves in.”

Mr Hayward said he finds the P2100 environ-ment much safer and enjoyable.

“Nobody who walks into the pit says they don’t like it. Everyone who walks in loves it; there’s so much room in there. It creates an envi-ronment where people actually want to go to milk.”

The cows also look happier in the parlour. “We have a mixed herd with various sizes of cows; every cow that comes in is settled.”

Milking has also improved; the automatic cups don’t come off until the cow is properly milked.

Young cows get the same feed because they are not pushed around during feeding. During milking the cows get

two feeds, including the high-cost Challenge feed, which goes to high pro-ducing cows.

Professional Farm Services installed the parlour.

Physically install-ing the equipment was a challenge on the year-round milking farm. Con-tractors first dismantled the roof and removed one side of the old her-ringbone parlour – a seri-ous disruption. With the 36-a-side reduced by half, milking took six-eight hours.

“One morning the cows were milked while concrete cutters were working; it wasn’t ideal but we managed.”

Once the P2100 was completed, Mr Hayward found milking times much shorter than with the 36-a-side herring-bone. “The cows were wasting less time coming and going from the par-lour.”

The front gates lift, allowing cows to walk out after milking.

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Diamond Grid is ideally suited to dairy farms which often have to worry about sloshing through the mud over winter.

The interlocking grid has a multi-layered drainage system that drains water from the surface, reducing erosion and eliminating compaction of the substructure.

The product has been on the market for the past two years and is already being used extensively in mining, landscaping, civil engineering and cattle industries and its durability and diversity has been proven with its recent use in a Papua New Guinea airstrip.

Feedback from dairy farmers using Diamond Grid proves how handy it can be for the industry.

South-west Victorian dairy farmer Will Rundle this year installed 70 metres of Diamond Grid on his feedpad and says it has been a great success.

Will said the feedpad had become “a soupy mess” before the Diamond Grid was installed.

“Every year we were spending $5,000 - $6,000 trying to keep the gravel on it so the cows could go through. Luckily we got on to the Diamond Grid and it’s been great,” he said. “It’s like the cheaper version of concrete.”

Diamond Grid Managing Director Ben Kirkup said the product was developed to provide a cost-efficient and effective solution for stabilisation and drainage issues on rural properties.

“Concrete is very expensive, particularly in rural and remote areas,” Ben said. “Diamond Grid provides a great alternative.”

Farmers can install the grid themselves, meaning they save not only on concrete but also on labour costs.

“It’s an easy do-it-yourself process,” Ben said. “All you have to do is take the pallet to the site, lay the grids and then backfill with gravel or the soil that’s already there. Within an hour you’ve got a perfect solid surface. It’s very quick, simple and there are no trade skills required.”

Diamond Grid can have multiple applications across a dairy farm. It can be used for creek crossings, cattle yards, pathways, laneways, drains, water and feed troughs, and shed floors.

“It’s a great alternative to concreting for shed floorings and extensions off shed aprons,” Ben said.

Diamond Grid can be used on any part of the farm that needs stabilising or where mud needs to be eliminated.

“We’ve had a lot of farmers buying it for an extension off their sheds,” Ben said. “When the cows step off the concrete it can turn to mud; installing Diamond Grid means they don’t have to slosh through the mud.”

One dairy farm in Queensland is using the grid on laneways between paddocks.

“It means the cows are not destroying all the laneways. It eliminates the need for ongoing maintenance. It is very effective,” Ben said. “The feedback from dairy farmers has been fantastic.”

With Diamond Grid dairy farmers can prevent natural earth surfaces from developing into muddy unusable areas in wet weather, reinforce surface erosion, potholes and corrugation, reinforce turfed areas, providing root protection, enable gravel retention and stabilise embankments, and provide drainage when filled with gravel.

Diamond Grid creates a surface that is solid, dry and secure, even with constant use and in heavy rainfall. The grids are extremely durable, with a filled load-bearing capacity of more than 1000 tonnes/m2. They will not wear through even with constant use.

Some farmers have been trialling a mix of concrete with the grid, and they’re still finding big savings.

“Traditionally they would pour a 100- 150mm thick concrete slab,” Ben said. “With Diamond Grid they can pour the concrete into the grids and fill it level to the top. This means they use 40mm of concrete so they’re reducing concrete costs by up to 60 per cent.”

A farmer using Diamond Grid instead of concrete on a shed could save tens of thousands of dollars without compromising safety or quality. Using Diamond Grid can wipe off 20-50 per cent of the cost of a water trough.

The grids are manufactured in Sydney from 100 per cent recycled polypropylene and are UV stabilised. Apart from being easy to install, the Diamond Grid is also easy to relocate.

The product is also exported to Russia, Peru, Chile, Papua New Guinea and Indonesia, mainly for mining but also for other uses such as the new airstrip in PNG.

For more information and stockist details for Diamond Grid, please visit the website www.diamondgrid.com.au

Diamond Grid is revolutionising how landholders deal with surface stabilisation and drainage problems. Now dairy farmers are catching on to how beneficial it can be for their enterprises.

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Dairy News Australia July 2015

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Transcript of Dairy News Australia July 2015