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FEED PADS: Council approval for feed pads not required PAGE 9
september 2014 ISSuE 51 // www.dairynewsaustralia.com.au
ChInA’S ChoICE
Green light for heifers butwait continues on FTA
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READY To RuMBLENew self-loading wagonsPAGE 31
MAKInG noISEDairy pushes for best dealPAGE 4
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Jancourt East farmer Kevin Jenkins says variable feed costs reduced the viability of their feedpad. PG.18
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Global joint venture based in GippslandA $551 million joint venture between Fonterra and leading Chi-nese infant formula brand Being-mate will be based in Australia.
It is estimated this deal could see production at the West Gippsland site double to 100,000 tonnes a year.
The deal involves Fonterra buying up to 20% of Beingmate and forming a joint venture to buy the Darnum Park nutritionals plant from Fonterra.
The deal is subject to approval from the Foreign Investment Review Board as Beingmate would own the majority stake in the site, which would continue to be operated by Fonterra Australia.
The day-to-day operation of Darnum will be unaffected if the proposed JV were to proceed. All employees will continue to be employed by Fonterra and milk col-
lection agreements between Fon-terra and dairy farmers in Australia will remain as they are today.
The companies said the joint venture could include further co-operation such as joint investment in other Australian food markets for supply to China, as well as develop-ment of new dairy products.
After gaining regulatory approv-als and Fonterra satisfactorily com-pleting the partial tender offer, Fonterra and Beingmate will set up a joint venture to buy Fonter-ra’s Darnum plant in Australia and establish a distribution agreement to sell Fonterra’s Anmum brand in China.
The joint venture will manufac-ture nutritional powders, including infant formula and growing up milk powder, at Darnum for Beingmate and Fonterra.
Beingmate will own 51% of the
JV to satisfy Chinese regulatory requirements and Fonterra 49%, operating the plant under a man-agement agreement.
The JV will be governed by a board, and Fonterra and Beingmate will each appoint two directors.
Fonterra chief executive Theo Spierings said Beingmate is one of the best partners in China – a top player with modern facilities.
With the Chinese Government’s move towards consolidation and focus on food safety and security, within five-six years the infant for-mula industry will be focused on five-six big domestic companies teamed with the same number of multi-nationals, Mr Spierings said.
“It’s good that we’re very proac-tive here.”
Fonterra chief executive Theo Spierings said the deal is a “game changer” providing a direct line into
the infant formula market in China.Beingmate has 10% of China’s
infant formula market. Fonterra wants to use Being-
mate’s extensive network including 80,000 outlets to access the infant formula market.
This market, worth $16 billion, is expected to reach nearly $29 bil-lion by 2017.
Beingmate Chairman Mr Wang Zhentai said the proposed partner-ship was well-aligned with the Chi-nese government’s desire to see a strengthened focus on quality and consumer safety in the local dairy industry.
“We believe this global partner-ship will play a constructive role in the development of China’s and the global dairy industry as both parties work together to drive a two-way flow of capital, technology, supply and distribution.”
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STATE DAIRY groups and Austra-lian Dairy Farmers have launched a concerted push to ensure all members of state and federal parliaments realise the importance of a strong dairy Free Trade Agreement with China.
Regular meetings with state and Fed-eral politicians, social media campaigns and a presence at industry events in China have been conducted over the past month.
All state dairy groups have been working with the ADF to help the mes-sage gain wider penetration.
There is no word when the FTA will be finalised but Trade Minister Andrew Robb has promised a “New Zealand plus” dairy outcome.
The high-level trade delegation was in Beijing early this month for the 21st round of talks as the Federal Govern-ment aims for an agreement by the end of the year.
There has been media speculation that it could be announced as part of the G20 in November.
UDV President Tyran Jones said politicians have been supportive of the dairy industry’s position that an FTA is crucial for growth of the industry.
“We need to ensure we’re front of mind with as many decision makers as possible,” Mr Jones said.
“At the end of the day, it’s not us at the (negotiating) table.
“We have to ensure our message is understood by all levels of government so we don’t get traded off for another sector.”
Mr Jones and UDV manager Vin Delahunty met with the Coalition’s Dan Tehan, the member for Wannon in the heart of western Victoria dairy country,
who said the federal government is very committed to getting a good result for the dairy industry.
“The government appreciates how important this free trade agreement (FTA) is to the dairy industry,” Mr Tehan told media.
“If we get a deal to at least match the one that China has with New Zea-land it would put between $600 million and $1 billion back into the Australian dairy industry.”
Australian Dairy Farmers launched a high profile social media campaign using the hash tag #FTA4dairy this month. ADF president Noel Campbell said the campaign had reached more than 1.6 million people and helped create awareness about the deal.
He said the social media blitz was only “a small part” of what the ADF was doing to lobby for an FTA and he would soon return to China with Agriculture Minister Barnaby Joyce.
“We continue to work closely with the Federal Government in order to help secure the best possible China-Australia FTA outcome for our dairy industry,” Mr Campbell said.
Mr Campbell, who has just returned from the China Dairy Industry Asso-ciation (CDIA) annual conference in Shanghai, reiterated that the Australian dairy industry has been working closely with its Chinese counterpart to foster a mutually beneficial trade partnership into the future.
Australia was one of three countries invited to help open the China Dairy Industry Association annual confer-ence.
Dairy Australia trade and strat-egy group manager Charlie McElhone
attended the conference with other industry representatives.
The Australian contingent discussed the Australian dairy industry, allaying fears it could swamp China with prod-uct.
Russia’s recent ban on Australian food exports has highlighted the need for the Federal Government to deliver a strong Free Trade Agreement with China.
VFF President Peter Tuohey said he trusted the Federal Government, under the stewardship of Trade Min-
ister Andrew Robb, would deliver an FTA with China that stripped away tariff barriers that had ham-pered agriculture’s access to China. “Russia buys $400 million of our $38 billion in food and fibre exports,” Mr Tuohey said.
“What’s happened in Russia just highlights the need for us to get strong FTAs in place that open up more mar-kets for Australian exports, such as China.
“The simple fact is China is the most populous nation on earth, and we need
to be growing the market for our farm produce with it.”
China imported more than 2.1 mil-lion tonnes of dairy worth US$8.8 bil-lion and it was the largest importer of milk products in the world. Its imports have increased more than 45% in the past five years.
New Zealand supplied 41% of Chi-nese dairy imports last year. The Aus-tralian dairy industry currently faced a 10-15% tariff on its milk and infant for-mula powder exports into China.
New Zealand has negotiated an FTA with China that imposes a tariff of less than 5% on milk powders, which winds down to zero by 2019.
“Last year we exported little more than 100,000 tonnes of dairy produce to China, while the Kiwis exported about 853,000 tonnes of milk powders and other key dairy products,” Mr Jones said.
Keeping dairy top of mind
“If we get a deal to at least match the one that China has with New Zealand it would put between $600 million and $1 billion back into the Australian dairy industry.”
UDV president Tyran Jones on his Gippsland dairy farm.
DAi ry NEwS AUSTrALiA september 2014
nEwS // 5
A DownwARDS revision in its end of season forecast took the shine off Murray Goulburn’s financial year results, released late last month.
The co-op revised its full year forecast for the southern milk region to $6/kg of milk solids, down from the range of $6.15-$6.30/kgMS it announced in July.
The co-op also said it was unlikely that MG would provide any step-ups this financial year unless there was a “significant improvement” in markets.
Murray Goulburn managing director Gary Helou told suppli-ers although long-term demand from Asia remained strong, cur-rent global events forced the decision.
“Long term underlying dairy foods demand from Asia remains strong with a net reliability on imports to satisfy the ongoing growth in per capita consump-tion,” Mr Helou said.
“However, international dairy prices have declined signif-icantly from last year’s historic highs mainly due to production growth in exporting countries,
namely New Zealand and the European Union, and the com-pounding impact of high inven-tories in China and the recent Russian trade ban on EU, US and Australian dairy imports.
“Given global demand growth we anticipate some recovery in international commodity pric-ing but it is difficult to predict the timing and strength of this change.”
Mr Helou said the co-op would continue to assess the impact of the Russian trade ban and further assess China’s re-entry in the market.
It’s a stark contrast to the previous financial year, when international dairy food prices were at very high levels, under-pinned by strong demand from Asia and the Middle East.
This helped the co-op achieve record revenues of $2.917 bil-lion - 22% more than the previ-ous year.
Despite this, net profit after tax was $29.3 million, down from $34.9 million the previous year – a 17% drop. It will pay an unfranked dividend of 8% on
ordinary shares.The co-op said growth was
delivered from across all MG’s major divisions but exports were the shining light, recording 30% growth year-on-year to $1.5 bil-lion. Exports accounted for more than 51% of MG’s revenue.
The co-op earned $36 million from the sale of its shares in Warrnambool Cheese and Butter. This money helped it increase its equity by $59 million.
MG’s final weighted-average available farmgate milk price paid to its suppliers was up 37% on the previous year at $6.81 per kilogram of milk solids (about 51 cents per litre).
Total payments to suppliers for the year were more than $1.7 billion, representing 61% of total sales, compared to 50% of sales last year.
MG increased its milk intake in 2013/14 by 8% to 3.4 billion litres of milk.
Its share of Australia’s milk pool now represents 37% of Aus-tralia’s milk supply, up from 33% last year.
MG lowers season forecast to $6/kg
TASMAnIAn DAIRY farmers are saying ‘Welcome to Legendairy Country’ in a new mission to spread the word about their industry.
Two A-frame billboard signs on trailers are sending the welcome message across the state.
The billboards are turning up on prominent roadside locations, appropriately enough starting in rich dairy farming paddocks, as part of the Legendairy communication initiative that aims to raise the profile and reputation of the dairy industry.
And there are plenty of reasons to celebrate dairy in Tasmania.
The state’s milk production reached a record 804.6 million
litres in 2013-14 on the back of a 5.85% increase over the past 12 months. The industry is now worth more than $1 billion a year to the state’s economy and it’s the fastest growing dairy region in Australia.
DairyTas executive officer Mark Smith said the two mobile billboards would be placed in farm paddocks near major highways and also used at festivals and events.
Along with their welcome message, the signs include details about how the $1 billion dairy industry contributes to the Tasmanian economy.
“We’ll be placing them in prime dairy locations to remind people about the importance of dairying and we’ll also take them into non-dairying areas
and to major events to build the profile of the industry,” Mr Smith said.
The billboards will be initially sited in farm paddocks off the Bass Highway north of Elizabethtown and approaching Smithton.
Mr Smith said dairy farmers were keen to be involved in the using the new trailers to promote the local industry and show their pride in the industry.
“We’ll be moving through different areas and won’t interrupt the farm’s paddock rotations or disrupt the cows,” he said.
“It’s a new concept and a great way to tell everyone about our tremendous dairy industry here in Tasmania.”
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DAi ry NEwS AUSTrALiA september 2014
6 // nEwS: LIvE ExPoRTS
Farmers target live export tradeMoRE AuSTRALIAn dairy farm-ers are breeding heifers specifically for the export market as they chase a “13th month” milk cheque.
However, the trade explosion may not necessarily be coming at the expense of the national milking herd with many farmers aiming to breed more cows to meet both export and herd demands.
Export numbers ballooned during the price downturn and continued to grow to record levels over the past year, despite better milk prices.
Industry sources say exports are here to stay and are now viewed by many farmers as a regular part of their income.
Signals that there won’t be milk price step-ups this year could prompt more farmers to look at the option, at least for part of their herd.
However, there are also indications that numbers may have peaked as the industry aims to grow the national herd.
The average $1600-$1650 prices being achieved might not continue with lower global commodity prices and domestic milk prices in China having a dampening effect, despite continuing strong demand from the marketplace.
During 2013-14 record numbers of heifers were exported, with 92,629 leav-ing our shores for a total value of almost $200 million.
This followed a huge explosion in 2012-13 when numbers increased from 65,276 to 87,629 as farmers reduced stock to counteract the industry down-turn.
China is by far the biggest market, buying 78,896 heifers at a total value of $170 million in 2013-14. The next biggest market was Pakistan which purchased 6,425 heifers.
At the same time, national herd numbers have stabilised at just below
1.7 million over the past three years. Dairy Australia analyst John Drop-
pert said last year was a record for heifer exports which was one of the factors holding back the national herd.
However, Mr Droppert said because farmers were having a good season they could afford to have more cows.
“It is certainly a better picture for growth if they are segregating exports a bit more rather than cutting into replacements to help their cash flow,” he said.
“It might be more about seizing the opportunity rather than a contingency plan.”
Mr Droppert said Dairy Australia was mindful of the potential impact of exports on herd growth but this was not something it could control.
“That decision is obviously up to farmers,” he said.
Mr Droppert said it was unlikely that milk would ever be exported back to Australia from countries taking our
heifers. “It’d take a very different set of circumstances to today – the desti-nations we’re shipping them to are far from self-sufficient, and in many cases experience far higher costs of produc-tion than here,” he said.
The ballpark figure quoted for big farms in China is 60-80c/L.
Mr Droppert said there was some concern that Australia might be setting up competitors to its own dairy prod-ucts, “but if we don’t take the opportu-nity, someone else will”.
Holsteins remain the prime exports, although jersey and cross-breed heifers have also been added to the mix.
Holstein Australia CEO Graeme Gillan described the heifer export income as “the 13th month milk cheque”.
Australia exports more than 50,000 Holstein heifers each year.
Mr Gillan said farmers were now planning to breed extra animals specif-ically for the export market, and not just
for short-term cash returns.“The past 12 months have been
exceptional for exports. It helps our members to increase their activity and their cash flow,” he said.
Mr Gillan said some farmers turned to the market as a reaction to poor milk prices, but more were looking to both protect the quality of their herd and capitalise on strong export prices.
“For a while it was at the expense of domestic production but there was a challenge for farmers to have enough replacements to improve the quality of their herd and so they’re making a long-term switch to develop cattle especially for the export market.
“We know there will be ongo-ing demand for Australian cattle and people are now thinking about exports as part of their long-term business model.”
Mr Gillan said Australia was beauti-fully positioned to capitalise on growing demand, particularly from China.
RICK BAYnE
BooRCAn DAIRYFARMER Tim Fleming (pictured) is enjoying dual bene-fits from entering the export heifer market.
Not only is the south-west Victorian farmer enjoying the additional income, he’s using the export option to fine-tune the quality of his herd without risking its quantity.
Mr Fleming has joined the growing number of farmers sending heifers to the export market, with about 40 leaving the farm this year.
“It’s the first year we’ve done it,” he said.
“We’ve bred extra numbers for it because it’s a good opportunity to capital-ise on the prices they’re paying and to fine-tune our herd a bit at the same time.”
The Flemings had reared 15 heifers spe-cifically for export.
“We had extra numbers,” Mr Fleming
said “We didn’t plan on selling so many to export but ended up getting rid of about 40 because of the prices.”
They achieved around $1650 for 120kg calves and Mr Fleming is keen to continue exporting in the future, though not at the expense of his milking herd of 400.
“What we don’t think will make it as good in the herd, we’ll look at offering them to export,” he said.
“Originally I wasn’t overly excited about sending heifers overseas; I’m more into the breeding side of it, but I was happy to let go some of those I wasn’t as interested in and fine-tune our herd.”
The farm milks about 400 and rears about 100-120 replacements.
Mr Fleming now sees exporting a por-tion of the heifers as an ongoing option.
“It’s been a good result for us,” he said.– Rick Bayne
Exporting heifers helps fine-tune herd
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DAi ry NEwS AUSTrALiA september 2014
nEwS: LIvE ExPoRTS // 7
National needs could limit export numbersExPoRT hEIFERS numbers this year have been “unprecedented,” according to Dairy Livestock Services manager Scott Lord.
Mr Lord said farmers were now viewing export heifers as part of their annual income.
While many initially turned to the market when milk prices were down and conditions were tough, they have continued to enjoy the revenue.
“We’ve seen a huge number of heifers sold to be exported over the past eight months. It creates a fair bit of cash flow for dairy farmers on top of the milk cheque,” Mr Lord said.
Mr Lord said it was too early to make a call on what impact the Murray Goulburn price freeze announcement might have, but he expected demand to continue.
“It has helped farmers to reduce debt levels and pay for maintenance. It’s been huge, regardless of the milk price announcement.”
He predicted demand would continue, particularly from China, and said farmers would want to meet that demand.
“I think we’ll continue to see people rely on income from additional export heifers. Not everyone sells all their heifers; some just sell a small proportion. I don’t think that will change and they’ll continue to do what they’ve been doing.
Mr Lord said farmers tend to sell more heifers
when milk prices were lower but had now come to rely on the income.
He added that many farmers in recent months were holding heifers to increase numbers in their own system.
Elders International general manager Cameron Hall said he believed the export market had reached its maximum due to Australian availability.
“The demand is still strong but I think the availability and capacity of the Australian dairy sector to increase numbers of heifers is reasonably limited,” Mr Hall said. “A degree of national herd building will also have to occur.”
Mr Hall said he suspected the strong export numbers would have had some impact on the national herd where farmers have accepted the high prices for young heifers and held on to their older stock for another year.
“That can only happen for one or two years, not on an ongoing basis.”
Mr Hall said prices varied mainly on the weight and age of the animals, but also on the intended use, including some purchasing heifers for background operations.
He said he was aware of examples where farmers were breeding heifers especially for the export market separately to their replacement stock.
However, pressure on pricing could also prove to be a disincentive to Australian exporters.
“While there’s strong demand there’s also quite strong pushback from
RICK BAYnEbuyers around pricing,” Mr Hall said.
“Domestic milk prices have fallen in China and that has put downward pressure on pricing.
Easing global commodity prices are also impacting on the future price expectations of the Chinese dairy market and dairy production sector.”
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FEARS vICToRIAn dairy farmers may have to apply for municipal coun-cil planning permits to operate feed pads have been allayed.
The concerns followed media coverage about an Echuca beef farmer being forced to apply for a permit to keep using an intensive feeding system, raising fears the rulings may impact on hundreds of dairy farmers with feed pads.
A Department of Envi-ronment and Primary Industries spokeswoman said extensive animal hus-bandry, where the ani-mals’ main food source is obtained by grazing, browsing or foraging on plants grown on the land, does not require a permit for a feed pad.
“Traditional dairy-ing models, where cattle spend most of their time in the paddock and are supplementary fed only, generally fall into the cat-egory of extensive animal husbandry,” the spokes-woman said.
However, the United Dairyfarmers of Victoria is still trying to clarify def-initions to ensure there are no unintended conse-quences for farmers.
Under Victoria’s Plan-ning Provisions, local gov-ernment is the responsible authority for consider-ing proposals for intensive animal husbandry which is defined under the Vic-torian Planning Provi-sions as “land used to keep or breed farm animals by importing most food from outside the enclosure”.
Permanent feeding sys-tems where most (more than 50%) of the feed is imported from outside the enclosure are consid-ered intensive under Vic-torian Planning Provisions and require an intensive animal husbandry plan-ning permit.
The DEPI spokeswoman said this was different to the Victorian dairy industry which is largely regarded as extensive grazing even though a small part of the
sector might operate intensive systems, such as a model where cows are housed in a barn and the feed brought in to them.
“During times of cli-matic variations farmers may periodically use feed pads for extended periods, which may see a majority of the feed supplied to the herd being imported. This is a strategic, short-term management approach and is not classified as intensive as it is not the normal farm operation,” she said.
UDV manager Vin Delahunty said most dairy farmers only used feed pads in winter to protect pastures from damage or when grazing feed is lim-ited.
However, Mr Dela-hunty said the UDV wanted to clarify and change definitions relat-ing to 51% or more of feed being brought on to a property to ensure it didn’t impact on dairy farmers.
“It is the intention that most dairy farmers are not drawn into this defi-nition but the challenge is ensuring it is structured in a meaningful way so that doesn’t happen,” he said.
“We’re still working our way through it to make sure there are no unintentional consequences for the dairy industry.”
Mr Delahunty added only a very small number of dairy farmers would bring in more than 50% of their feed.
WasteNot Stockfeeders director Terry Allan from Maryborough said most Victorian dairy farms who use feed pads use them as a supplement to feeding cows with grazed pasture.
He added that feed pads should not be con-fused with feedlots.
“The feed pad may be
Local council approval for feed pads not requiredRICK BAYnE
permanent, but that does not mean that cows spend all day using it,” he said.
Mr Allan said feedlots for fattening beef cattle clearly fall into the inten-
sive animal husbandry def-inition and were covered by state and local govern-ment protocols.
Dairy feed pads are usu-ally a low-cost solution to
a number of issues, par-ticularly those caused by feeding out hay and silage on wet pastures.
Most dairy farmers install a feed pad to grow
and utilise their pastures better, to reduce pugging and waste when feeding hay and silage, and better control allocation among cows in the herd, Mr
Allan said.“We point out to dairy
farmers that the feed pad is a dining room for feed-ing cows, not a lounge room for storing cows.”
Vin Delahunty
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DAi ry NEwS AUSTrALiA september 2014
10 // woRLD nEwS
Global prices fall as world supply grows
FonTERRA SuB-SIDIARY Global Dairy Trade is defending a pro-posal which at first sight appears set to undermine the transparency of GDT events and even artifi-cially inflate average prices reported.
It has proposed that sales made at a seller’s start price be no longer publicly reported, though such results would still be available to those with access to the bidders’ website.
GDT says the rule change is needed to pre-vent non-participants in auctions from using sell-ers’ start prices for their own purposes. It also says the move “strengthens the incentive on sellers to set attractive starting prices so that winning prices are discovered through a multi-round competitive bidding process”.
However, if the only sales reported were those attracting two or more bids, the results would
exclude the lowest win-ning bids.
Challenged on this, a spokesperson for GDT said the rule would rarely apply and “certainly will not materially reduce the transparency of winning
prices achieved for NZ product”.
“Transparency is main-tained because, first, the vast majority of winning prices will continue to be reported and, second, viewers can now be assured all reported prices are the outcome of a com-petitive bidding process over at least two bidding rounds.”
Currently some reported prices could be for a trade of just one tonne “and therefore not a credible market price,” the spokesman added. “We believe our GDT prices
will be more credible as a result of this change.”
Bank analysts will need some convincing, it seems.
“For independent observers like us it makes it more difficult to inter-pret the data in a timely
manner,” was the initial response of Westpac’s Anne Boniface.
ANZ’s Con Williams said he doesn’t think the case for the changes “stacks up”.
“Especially with the proposed two levels of transparency between par-ticipants and non-partic-ipants…
“To me, what is sold at whatever prices should be reported because this reflects what has traded.
“I don’t understand why there would be two levels of transparency. If you want to achieve the
GDT rule changes raise questions
ThE GDT price index for the financial year-to-date was down 37% compared to the same period last year, according to Fonterra.
The drop in prices is attributed to growing milk supply out of key regions- the US, EU and New Zealand while demand out of the key Chinese market has eased slightly.
“Global milk production and dairy exports continue to grow, while demand from China, although strong compared to last year, has slowed as they work through inventory levels.”
The co-op says its assessment of published industry statistics indicates that supply growth temporarily exceeds demand growth, which has contributed to the decline in dairy commodity prices over the past four months.
Milk prices in the US and EU remain at relatively high levels, feed costs are low and weather patterns have been benign, supporting production growth.
At the same time, Global Trade Infor-mation Services (GTIS) data shows that for the month of June, imports into China have fallen month-on-month for the past four months, however WMP was up 93% compared to June last year.
Fonterra said milk production in the major dairy exporting countries increased on a year-on-year basis, with the excep-tion of Argentina, where production is lower.
Growth has slowed in the EU but full year milk supply is forecast to grow by
2.8% over last year.In the US, milk production has jumped
to 1.9% on a year-on-year basis for the month of June.
New Zealand ended its 2013-14 pro-duction season with 10% more milk than the previous season; In Australia produc-tion was maintained at the previous sea-son’s level.
Both the US and EU were still export-ing more dairy products but the rate of growth in exports was slowing, Fonterra says.
Milk powders were the major driver of export growth; more whole milk powder was exported from the US, New Zealand, EU and Uruguay.
Skim milk powder exports were also higher from the US, EU, New Zealand and Australia.
The US also continued to export more cheese, however, New Zealand, Australia and the EU exported less cheese in May this year.
Imports into China continue to grow on a year-on-year basis, with a 52% increase in June 2014 compared to June last year.
However growth has slowed, with import volumes decreasing over the past four months.
In June 2014 powder imports were 93% higher than June last year, but 24% lower than May 2014.
Imports of butter and cheese grew on a year-on-year basis, while whey volumes were flat.
listed objective then the same level of transpar-ency should be given to both participants and non-participants.”
Williams questioned how, if participants are able to see start prices, the
proposed changes would get around GDT’s concern that sellers can cur-rently infer other sellers’ starting prices. “Seems to
me sellers would be able to find out if participants can.” For analysts, if the changes do distort aver-ages, it will be more diffi-cult to forecast farmgate milk prices, he added.
The changes would also mean GDT reports break with convention for reporting auctions. “In other markets if you get one bid and a product is sold for that price then it has traded and that is the market price. I don’t see why it is any different in this case.”
GDT said a key driver for the changes is competition law, notably in the EU and US, that says no seller of the same product type should be able to observe another seller’s starting price. Since some non-participants are sellers of dairy products in international dairy markets, it is required to take all practical steps to prevent such sellers from identifying another seller’s starting prices.
“Bank analysts will need convincing of Fonterra’s proposed changes to the Global Dairy Trade system.”
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TRACTORS & MACHINERY & ATVsNext month’s special report reviews the latest developments and news from the farm machinery sector; the hardware that makes the modern farm tick. We’ll focus on equipment that’s relevant to dairy farming – no big broadacre gear reviews, just gear that helps the dairy industry farm smarter. Watch out for it in the October issue of Dairy News Australia.
NEXT ISSUE: OCTOBER 2014
SPECIAL REPORT
DAi ry NEwS AUSTrALiA september 2014
woRLD nEwS // 11
ChInA’S DAIRY giant Yili, through its subsidiary Oceania Dairy, has col-lected its first milk direct from New Zealand farms as commissioning contin-ues at its $214m, 10t/hour capacity plant in South Canterbury.
“I’m very pleased,” Oceania chief executive Aidan Johnstone said. “To have our first milk deliv-ered August 4 was pretty good.”
Mr Johnstone says as calving begins on Ocea-nia’s 48 supplying farms all milk will be collected by Oceania and processed at the new plant.
“It will be our staff working under their direc-tions,” he said.
It’s envisaged all prod-uct will be exported to China for further process-ing and retail, except for cream in the early part of the season.
Total intake this season is expected to be 170m litres; the original target was 130m litres from 40 farms.
It will also take 50m litres from Fonterra, as
permitted under the Dairy Industry Restructur-ing Act (DIRA), putting total intake at about 220m litres– 73% of the plant’s nominal 300m litre capac-ity.
“So even if there’s no increase in our produc-tion capacity next season we’ll still be able to pick up extra milk from local sup-pliers.”
The plant site has plenty of space for expan-sion but no plans or con-sent applications for a second dryer have been made.
Mr Johnstone said Yili provides an integrated supply chain all the way to retail.
“We’re not competing with Fonterra in the open market. Effectively it’s a closed supply chain.”
As such, the company’s business is “pretty well protected” from falling global dairy prices, though with Oceania’s farmgate price locked at a 10c/kgMS premium to Fonterra’s milk price, falls in Fon-terra’s forecast will be a concern to Oceania’s sup-
Oceania Dairy chief executive Aidan Johnstone says the first milk was delivered on August 4.
China starts collecting milk in New Zealand
pliers, he acknowledges.“Yili is a large cor-
porate, recently ranked tenth-largest dairy com-pany in the world, so com-pared with past experience in this region the milk cheque is secure.”
Mr Johnstone, trained as an accountant and in the dairy industry for 30 years, does not believe companies such as Ocea-nia will erode milk prices for New Zealand farmers in the long run.
“Fonterra’s payouts have increased as a result of the competitive ten-sion and Fonterra remains far and away the dominant player so there is room for small and middle-sized competitors.”
nEw ZEALAnD milk collected by Fonterra for the first two months of the season is 8.3% higher than the same period last year, putting further pressure on global dairy prices.
For the first two months of the 2014-15 season - June and July - the New Zealand co-op collected 24 million kgMS, 8.3% more than the same period last year; this was mostly driven by good milk yield on North Island farms.
Fonterra said milk volumes are building.North Island collection in July reached 13 million
kg/MS, one million kg/MS ahead of July last season.“The central and lower regions of the North Island
have started the season with favourable conditions, however heavy rain created challenges in Northland with some regions experiencing significant flooding,” Fonterra said.
South Island collection in July reached 2 million kg/MS, consistent with July last season.
Only a small number of South Island farmers supply milk in winter, but with spring calving start-ing, milk collection will lift over the coming months.
The co-op also reported good milk collection in Australia. Collection in July was 7.6 million kg/MS, which was 11.2% higher than July last year.
Fonterra said the growth in milk collection this season is being supported by good pasture growth and Fonterra continuing to attract new milk from other processors. – Sudesh Kissun
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Branded milk best bet in wA Full marks to Wa Farm-ers for following the lead of the south australian Dairyfarmers association and launching their own branded milk later this year�
The Wa body an-nounced the decision last month and, like saDa milk, a portion of proceeds will go back to support farmers, including market development�
There has been some criticism that the 20 cents a litre will go back to WaFarmers, and not dairy farmers themselves�
However, it’s a new form of revenue and no doubt the dairy section will be keeping a close eye on the coffers�
WaFarmers’ milk will be officially launched on November 19 at the Heart of Wa gala dinner�
one hump or two?THe meDia and the ultra-hip (we fall into one of those camps) love a “super food” and we think we may have spotted the next Big Thing�
it’s camel milk, which is now being pushed as a nutrient-rich drink with some of the wildly speculative claims that often accompany these things (including helping diabetes, autism, diges-tive problems and food allergies)�
Camel milk is popular in North africa, the middle east and asia and its popularity is growing in western countries�
Potential demand could be limited by avail-ability – fair to say there’s not a huge camel dairy industry in australia – but that exclusivity may just work in its favour�
not interested!aN iNTeresTiNg ap-proach to the anti-farming sector was recently made in New Zealand�
south Canterbury dairy farmer John gregan was tired of the carping of anti-dairying letter writers in his local newspaper, so he invited all the poison pens to visit his farm to see real dairying demonstrated�
Despite a string of let-ters in the Timaru Herald slamming dairy farmers for skinny cows, muddy paddocks, lack of shelter and once-a-day milking, no one took up gregan’s invitation�
unfortunately, we think it sums up the mindset of some “activists” well�
Til the cows come homea kaNsas farmer, a trom-bone and kiwi star lorde’s song Royals has become a much-viewed item on You-Tube� The farmer serenad-ing his cattle has had three million hits�
sitting in a deck chair, Derek klingenberg piles into the tune, attracting several dozen cows from over a rise� Clearly this devoted audience loves his moo-sic (sorry)�
Now he has a whole YouTube page of his agri-cultural tributes to popular music, including a cover of Happy and a Thrift shop parody called Ranching Awesome.
“it’s weird,” klingenberg said� “millions of people all over the world watch my stuff, but i haven’t left the farm� i’m just reading about it on my phone�”
GOOD TO see the dairy community work together and make some noise for a Free Trade Agreement with China that has real benefits for Australian dairy.
The work undertaken by state lobby groups and the Australian Dairy Farmers in Canberra and China is aimed at putting dairy’s needs in the spotlight.
State and federal members and opposition parties are now well aware what the dairy industry expects.
As United Dairyfarmers of Victoria president Tyran Jones surmises: We need to make a noise so we won’t be traded off for something else.
The social media campaign further raised dairy’s profile by infiltrating people’s Twitter feeds and getting politicians involved on a different level.
But the support of farmers is needed as negotiations con-tinue. A phone call or social media campaign in September can be quickly forgotten by the end of the year, when the Prime Min-ister wants the FTA concluded.
Dairy farmers across the country need to make their support of the proposed Free Trade Agreement with China clear.
Their best bet is continually reinforcing the necessity for the best deal for dairy with their local politician – at both state and federal level.
Keep driving that message.We have a once-in-a-generation opportunity to secure a deal
that will provide significantly greater access to an enormous market, largely untapped by Australia.
Australian dairy can’t afford to see a replication of the result with Japan, where next to nothing was achieved.
Both the Victorian and Federal Governments are under pres-sure and a successful result in this agreement would be a boost for them, as much as the dairy industry.
Farmers can help by writing an email, taking to social media, picking up the phone or calling into the local member’s office when you’re next in town.
Make them realise how important this result is. If enough farmers take the time to express their opinion, the
noise generated will be heard all the way at the top.The squeaky wheel gets the grease. Let’s continue to make this
an issue the Government simply can’t ignore.We can’t afford to let dairy be forgotten.
Dairy community binds together
DAi ry NEwS AUSTrALiA september 2014
oPInIon // 13
Who owns our milk?
ThERE IS a fundamental question for farmers. Who owns the rights to the produce from your farm?
When farmers have grain, hay or cattle for sale, they have the choice to sell to a number of different buyers and markets, but when it comes to milk, the processors demand in their farmer contracts that farmers adhere to what has become dairy’s 11th commandment –“thou shall send all your milk to me –or else”.
Our product is perishable, so having a home for that milk every day of the year is an absolute necessity. But we have had some alarming situations in recent years where unsustainable prices have been offered, particularly for tier two milk, but the farmers have had no choice but to supply all of their milk to that processor.
The ramifications of the exclusivity clauses on our milk contracts run right throughout the supply chain.
The plain facts are that retailers can only have a marketing strategy that includes unsustainably priced store brand milk if the processor that fills the tender can guarantee the volumes required.
That may not matter if the domestic milk market was working properly, but with the market failure that we see at the moment caused by the severe discounting of milk, the control of this milk plays an integral part of the whole plot.
We are consistently told by the processing sector that store brand milk discounting is the reason for their inability to pay more for our milk from our farmers.
The retail sector has been highly critical of the processing sector for their lack of innovation both in processing and marketing. But when you consider that within months of launching new products, their innovative products and packaging have often been mimicked and then sold at a discount price under a retailer’s own brand,
I can fully understand manufacturers being wary with developing new products.
So, where do we end up with this whole situation? The retailers are quite happy to commoditise our product and devalue it to attract store customers and to grow the market share and power of their own store brand, the processors are under pressure and dairy farmers are under extreme financial pressure with rising costs and an unsustainable price.
The damage done to the British dairy industry by retail discounting has been highlighted many times where farm gate prices crashed, then retailers sought direct supply and achieved two things - it gave them control of the marketplace and also sold their credentials to the public even though everyone knew their initial actions caused the damage in the first place.
The blueprint for this strategy is being copied in many markets including Australia.
The control of milk is a cornerstone of our future. If the processors cannot achieve enough return for themselves and suppliers out of the marketplace, then do they deserve the control and the exclusive right to our milk?
If dual supply type contracts were to be considered, it must be done in a mature fashion where clear obligations are recognised and adhered to by all parties.
It is generally recognised that if a processor contracts a certain daily volume then at a minimum roughly that relevant volume should be waiting for the tanker each pickup time.
Processors who supply the domestic market need an even and consistent supply pattern from their milk suppliers. Farmers need the ability to be flexible in their systems that meet this market requirement.
Farmers well may need some extra price incentive to produce milk at the more costly times of the year to meet the processors’ market requirement. Likewise the farmers may need
RoSS McInnESsome flexibility in the contract to allow them to grow the business or achieve a better price into alternative markets for a seasonal oversupply at times of year when production costs are low.
One innovative scheme that seems to deliver a better outcome is the bonus scheme introduced by Parmalat
for its suppliers in Western Australia. This scheme which delivers a worthwhile bonus for milk supplied over expected volumes in the greater autumn period, while not the total solution, looks to be a rare win/win for both farmer and processor. • Ross McInnes is deputy president of the Queensland Dairyfarmers Organisation.
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DAi ry NEwS AUSTrALiA september 2014
14 // MARKETS
Global dairy markets unbalanced
FREShAGEnDA’S AuS-TRALIAn export index finished August at 170.3 points, losing 12% over the month. The loss in value was driven by weaker commod-ity prices, with the Australian dollar helping for a change, fin-ishing August slightly weaker at US$0.9297, down 1% on the pre-vious month.
SMP lost the most ground during August, with spot prices falling 15%. Whole milk powder shed a further 9% in value after falling 14% during July, while butter prices fell 12% in August, after being down 16% in July.
Cheese has been remark-ably steady over the last quarter, while prices for other commodi-ties were in rapid retreat. How-ever, cheese spot prices were
down 12% following sharp fall in the last week of August, although they have since recovered to be on par with July.
The recent volatility reflects heightened market uncertainty in the wake of Russia’s import ban.
Current movements no doubt reflect expectations that cheese, particularly from the EU will be in abundant supply and looking for a new home. Additional milk diverted from cheese in the EU and US is likely to wind up in butter and SMP.
The export index has now lost 19% of its value over the past 12 months, driven by large falls in spot powder prices.
It is not surprising dairy com-panies are seeing little scope for
step ups in southern prices under current market conditions.
The index is a lead indicator of average export returns - based on spot prices, currency move-ments and export mix. The index measures current market senti-ment, but in reality it takes 3 to
6 months for prices to translate into actual returns, depending on the timing of contract negoti-ations. It was set to 100 in Janu-ary 2000.• For weekly updates, follow us on Twitter or visit http://www.fresha-genda.com.au/
Index loses more ground in August
ThE GLoBAL dairy market is out of balance, and is likely to remain so until 2015.
Freshagenda’s Dairy Trade Simulator (DTS) model indicates milk output is well ahead of product demand, a situa-tion made worse by Russia imposing a ban on agricul-tural imports (including dairy products) from the EU, US and Australia.
While dairy indus-tries in the northern hemi-sphere are heading into a seasonal low in production, the benefits of improved farmgate prices in the early part of 2014 are now flow-ing through to milk output, with both EU and the US well ahead of last year.
In the US, it has taken a while for supply to respond, with drought conditions a significant constraint. However, wholesale prices for butter and cheese are still high,
farmgate prices are hold-ing up, and feed costs are heading down, resulting in milk output growth gather-ing pace.
In the EU, milk pro-duction is also ahead of last year, although growth is slowing. Farmgate and wholesale prices are already responding to a softer international market and heading down, offset somewhat by lower feed input costs.
The EU has been par-ticularly affected by Rus-sia’s import embargo. While Russia accounts for 16% of globally traded cheese, it takes around a third of EU cheese exports.
The EU Commission has already announced mea-sures aimed at balancing internal dairy markets by opening private storage aid and extending public inter-vention until the end of the year.
EU manufacturers are directing milk away from cheese production, and many have the ability to do so, given recent powder and ingredient invest-ments as well as seasonal under-capacity that provid-ing some flexibility in prod-uct mix for larger players.
However, our DTS indi-cates cheese is likely to be the commodity in most sig-nificant over-supply until
the end of 2014, a situation that is predicted to ease in early 2015.
Critical to the out-look for global cheese prices will be consump-tion within the US and the EU. Cheese accounts for about 70% of manufac-turing milk utilisation in these regions, with most consumed internally.
In the US at least, cheese sales through the foodservice chan-nel appear to be improv-ing, although the outlook for the European econ-omy and cheese consump-tion is not so positive. Lower internal consump-tion would inevitably mean more product is available for export.
New Zealand’s strong start to the season and the likelihood that displaced EU milk and US produc-tion will add further to milk powder supply is cur-rently placing downward
pressure on prices.However, as commod-
ity values have fallen, price sensitive “discretion-ary” buyers in South East Asia, and in particular the Middle East and North Africa have aggressively re-entered the market for powders and will help place a floor under prices. Our DTS suggests WMP oversupply will be cor-rected in late 2014, as
supply slows and demand improves at lower prices.
However, SMP may be in oversupply until mid-2015, as both the US and EU increase production significantly in the short term. On the plus side, the new Indian government has removed a 5% price support on exports to keep a lid on domestic prices, causing a sharp reduction in SMP exports from the country.
Critical to market bal-ance is Chinese demand for milk powders. After a strong start to 2014, Chi-nese imports slowed in recent months before rebounding in July. Mixed reports about stock levels are adding to the market uncertainty, however our DTS assumption is that Chinese import demand will revive late in 2014 and into 2015.
Chinese buying usually increases in the New Year as NZ tariff rates fall and buyers try and get in before safeguards are triggered. China continues to play a critical role in the global dairy market, notwith-standing the increased par-ticipation of other regions that we are seeing at pres-ent.
The current situation
illustrates the inherent volatility of the global dairy market, given the lags between prices, supply and the price-sensitive nature of demand from developing-world customers. Added to that, the short term loss of a significant market like Russia through a policy decision to block trade will worsen the over-supply situation for the rest of the world.
Our DTS analysis shows that cheese, Aus-tralia’s most important dairy export, is particu-larly susceptible to the cur-rent over-supply situation given Russia’s importance in cheese trade, but also its large share of northern hemisphere production.
Nevertheless, with lower prices support-ing demand, and supply growth slowing in early 2015, the world dairy market is expected to move back into balance, bringing with it greater support for commodity prices.• Jo Bills is a director of Mel-bourne-based firm Fresha-genda, a Melbourne-based consulting and analysis firm that provides food value chain insights and solutions to a wide range of clients from farm to retail.
GLobAL imPAcTjo biLLS
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
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DAi ry NEwS AUSTrALiA september 2014
MARKETS // 15
Countries seek alternatives after Russian banThERE’S RARELY a dull moment in dairy these days, and in many ways the past month has been an eventful one.
Perhaps the most sensational development however, was the announcement by the Russian govern-ment of an embargo on food imports from the EU, US, Canada, Australia and Norway (in addition to Ukraine, banned in July).
It’s far too early to tell what the exact fallout will be, but a high level appraisal of the Russian market and some of the potential eventualities will help to interpret developments as they unfold.
With dairy exports to Russia just short of 629,000 tonnes in 2013, the country is an important market – the world’s second largest after China.
Australia accounted for less than 3% of this volume in 2013, even after a boost in exports that was largely driven by a temporary ban on Fonterra (which restricted New Zealand access).
In turn, although Russia took around 46% of Australia’s butter exports in the 2013/14 financial year, it ranked as our 12th largest market, accounting for only 3% of our total dairy exports.
Direct impacts on Australia are therefore likely to be relatively limited – though they will fall disproportionately on those companies that have plants approved for export to Russia.
While small, the effect is also enhanced by the fact that Russian buyers tend to pay a premium price for butter, thanks to their government’s accreditation requirements limiting the number of approved suppliers.
The biggest concerns from an Aus-tralian perspective surround the indi-rect effects of this ban, which generates uncertainty and will potentially push
surplus product onto an already weak global market.
Russia’s main source of dairy imports is the European Union, supply-ing almost 438,000 tonnes (70%) of the 629,000 tonnes reported in 2013.
Just over half of Russia’s dairy imports by volume were in the form of cheese (319,000 tonnes), of which nearly 260,000 tonnes came from the EU.
The key concern for many market participants is where this cheese will go now the Russian market is closed; or alternatively, where the milk that would have been used to make this cheese will be directed.
The worst-case scenario would see large volumes of Euro-pean cheese flood onto world markets, including those (such as Japan) where Australia has a strong presence.
The possibility of a boost in powder production has already weighed on SMP pricing, aggravating the current market weakness.
A return to EU market intervention mechanisms such as export subsidies or intervention purchases would also be damaging, however the European
Commission has so far resisted calls to revisit these measures.
Subsidised storage through the less distortionary Private Storage Aid (PSA) scheme is the main support mechanism enacted so far.
There are a number of other possi-bilities, all of which are likely to occur at least in part.
The first is that a proportion of EU milk will be diverted in raw form to neighbouring Belarus, where it can be processed and enter Russia as Belaru-sian exports.
Under the umbrella of its customs union with Russia and Kazakhstan, Belarus already exports large volumes of dairy products that aren’t fully cap-tured in the official trade data.
This approach will be limited pri-marily by the distances and logistics involved in the shipment of large vol-umes of raw milk, as well as the avail-ability of spare processing capacity
in Belarus – but it could partially offset the net impact of the ban.
Another option that would main-tain the global market balance is the shipment of product from
banned sources to Russia via third coun-tries (transhipment).
Authorities in Switzerland (which has avoided the embargo) have flagged that they will not be supportive of such endeavours, though others (such as Belarus) have been more ambiguous.
In any case however, transhipment potential is likely to be limited by the extensive documentation requirements for import into Russia.
Smuggling of very small volumes may also occur, but mainstream sup-pliers are unlikely to engage in this (for obvious reasons).
In Australia’s case, linkages with New Zealand through Fonterra could see a rebalancing at the Oceania level, whereby butter that may have been exported to Australia is instead directed to Russia, in lieu of Australian origin product.
Though the conflict in eastern Ukraine appears to be far from over, there is also the possibility that the embargo will be softened, or indeed lifted should negotiations between the parties involved produce a politi-cal solution.
Recent amendments include the exemption of lactose free dairy prod-ucts, which could conceivably be broad-ened.
This may seem unlikely, however Russian authorities do face a significant challenge in keeping reasonably priced food on the shelves.
Eighty-four percent of Russia’s 2013
dairy import volume came from coun-tries that are now banned – a signifi-cant volume of product to source at short notice from alternative produc-ers such as South America, Turkey and New Zealand.
Opinion polls suggest Russia’s gov-ernment enjoys strong support from its citizens, so some inconvenience and forced substitution will be will-ingly accepted.
Across all food groups however, pro-longed sacrifices in quality and avail-ability may lead to consumer pressure that ultimately helps restore normal trading conditions.
In the meantime, the embargo will continue to form one part of the broader market picture of strong global supply and sluggish demand. Some or all of the above factors will likely help mitigate its effects, however the restoration of bal-ance at the wider market level will be the key to improved farmgate returns in the months ahead.• John Droppert is industry analyst with Dairy Australia.
GLobAL imPAcTjohN DroPPErT
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
84% of Russia’s 2013 dairy import volume came from countries that are now banned.
Russian President Putin on a horse.
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DAi ry NEwS AUSTrALiA september 2014
16 // MAnAGEMEnT
In a few weeks the largest all-in-one dairy shed in the southern hemisphere, possibly the world, will fill with cows and start pumping out milk. Andrew swallow reports.
AS You drive up the back road off SH1 towards Van Leeuwen Group’s latest dairy development in South Canterbury the scale of it isn’t immedi-ately obvious.
The long, gently-pitched roof of the 1500-cow free-stall barn blends
into the skyline and the 7m tall effluent tank on the flats below looks fairly standard. It’s only when you notice the appar-ently miniature – and now redundant – wool-shed next to it that the size of the development hits home.
“We think it’s the big-gest all-in-one shed in the southern hemisphere, pos-sibly the world,” says Aad van Leeuwen as we walk up one of the barn’s two feeding lanes towards the central control room and 24 robotic milkers.
The control room is
raised over the main cow floor, providing an over-view of the milkers and feeding lanes and stalls beyond.
Each feed lane is 193m long with rubber-matted walkways for the cows on either side and latex-lined free-stalls. “The rubber
mats in the walkways are the latest development, the ultimate in cow care.”
They also mean there’s no need to transition the cows onto concrete – they can go in full-time straight off grass, and they will mean there’s no need to regroove concrete after several years to prevent slips. Experience with his other sheds is that the cows enjoy the indoor facilities.
“If you walk through the sheds you find the cows are content and there are virtually no lameness issues, which is often the first thing people raise when you say you’re going to house cows. Because we’re using robotic milking there’s no forcing of cows into the shed: it’s their own deci-sion to be milked. You
might have to get one or two lazy ones in but that’s it. They’re also in good [body] condition.”
While he’s used Lely’s Astronaut milkers in his other two free-stall barns – both 500-cow facilities built in 2009 – for the new shed he’s trying DeLaval’s VMS.
“We lined up both and DeLaval’s quote was quite sharp and there are a few things I liked the look of on the DeLaval.
“This is an ideal oppor-tunity to line up the two systems over the next five years or so and see how they work next to each other, to see which are the most reliable and econom-ical.”
A less complicated milking arm with fewer electronics on it, a milk-ing bail that adjusts to the
size of the cow and a “very good” pre-milking udder preparation with water and air were among the things that appealed with the VMS.
As with the Lely sys-tems, every cow’s produc-tion, every milking, will be recorded so staff can mon-itor performance from the control room. The aim is for an average 24-25 litres/cow/day at 8.5% milksol-ids.
“We’ve got a very aver-age herd going in, put together out of our other herds plus some surplus heifers.”
The herd will be mated with Holstein Friesians and calved year-round. In due course he expects to get production up to 800-850kgMS/cow, with cows going out of the shed at drying off and coming back in after calving.
Feeds will include grass and lucerne, fresh or ensiled, and maize silage, plus a few extras such as Canola meal, mixed in a 46m3, 25 tonne capacity three-axle mixer wagon and fed out once a day along the lanes, plus a pellet ration offered in the robotic milkers. Total ration will typically pro-
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View from the bridge: a dozen DeLaval robots are installed inside the shed.
DAi ry NEwS AUSTrALiA september 2014
MAnAGEMEnT // 17
vide 250-260MJ ME/cow, at 17-17.5% protein.
“With the right balance of feed even ordinary cows will give two to two-and-a-half times the production off conventional grass sys-tems.”
Nearly all the feed will be home-grown, cut and carried off the sur-rounding 600ha. It was the size of the block that persuaded Aad and wife Wilma to go for such a big barn.
“We thought our next free-stall barn (his first two are 500-cow units) would be 1000 or 1200 cows but because of the land available we went for 1500. It’s been a bit of a challenge getting it through the consent process and built and I wouldn’t think you’d want to go much bigger, but we’re pleased with how it’s turning out.”
The building’s been done by Advanced Cow Barns, Winton, who also designed the main struc-ture, with various other local contractors. The set-up for the robots was van Leeuwen’s.
In the shed alone nearly 2000m3 of concrete’s been poured, and including the surrounding infrastructure, the total’s 2500m3.
Completion will be about a month behind schedule, largely due to a wet autumn and early winter, but once the cows take up residence next month it will soon be run-ning at capacity. “We’ve found we can get most cows trained to using
the robots in one to two weeks.”
Effluent from the lane-ways will be continu-ally cleared by automatic chain-pulled scrapers, draining down into the 7m deep, 23.5m radius tank. “We’ve got enough capac-ity for half a year.”
The aim is to use the effluent as base fertil-iser for the feed crops sur-rounding the shed, with a 20,000L slurry tanker applying it by dribble-bar or injector.
“With injection we’re burying it in the soil so there’s no loss of nutrient to the air or smell to annoy the neighbours. It’s very effective.
“We’ve been doing it for three years.”
The dribble-bar is used on existing grassland and lucerne.
The shed will be manned 24/7, with a ratio of 200-250 cows/man during daytime, including feeding out. Overall run-ning cost of the farm will be about $4.25/kgMS.
Capital cost of the barn and surrounding infrastructure is about $2500/cow, but the robots “double it”, said Mr van Leeuwen.
Nonetheless, he says it should be profitable at about a $5.75/kgMS payout, and the returns accelerate above that, far more than off a traditional outdoor grazed system because of the much higher per cow, and per man, milk production.
“We’ve done the tra-ditional system for a long time and we felt hous-
ing our cows was the next step,” he explains, reflect-ing on 31 years in the New Zealand dairy industry since emigrating from Holland in 1983.
“It means we can look after our cows, and the environment we’re farm-ing in, better. We’re more in control.”
Instant access: rubber matting in laneways for cows to walk straight in.
All-in-one shed a giant achievement
DAi ry NEwS AUSTrALiA september 2014
18 // MAnAGEMEnT
FAThER AnD son dairy farmers Kevin Jen-kins senior and junior remember every tiring hour of pouring 986 bags of cement to build a feed-pad on their Jancourt East farm in Western Victoria.
Now it’s rarely used.Although the Jenkins
don’t regret adding the
facility to their feeding regime, they say feed costs reduced its viability and a preference for home-grown grazing reduced its use.
“Sometimes we may use it if it gets very wet so we can get out of the pad-docks,” Kevin junior said. “It all depends on the
price of feed we have to buy to put in it.”
The feedpad was built with a roof, making it a good option during the wet winters experienced in south-west Victoria.
But for a farm that prides itself on making good quality home-grown feed, buying often unre-
who: Jenkins family whErE: Jancourt east whAT: Feedpad lessons
Variable feed quality causes feedpad problems
liable and expensive imported feed didn’t work.
With a fairly high stock-ing rate on 175ha hosting a milking herd of 186 and calves and heifers bring-ing the total to around 350, the feedpad seemed like a good idea.
“We carry a lot of young stock,” Kevin junior said. “We have nearly 350 head all told, includ-ing heifers and calves, and have no run-off blocks so we carry everything on here.
“Those cows we’re milking now are not roam-ing over 430 acres. We’re pretty well stocked up.”
The feedpad was intro-duced “because we wanted to feed the cows better”, Kevin junior said.
They started with brewer’s grain and potato mash.
However, the brewer’s grain had to be fed fresh and would develop a blue mould after a few days and the cows wouldn’t touch it.
The cows were better with the potato mash but costs and reliability of supply became a problem.
“It was really unreli-able,” Kevin junior said.
“When we really wanted feed you couldn’t get it and when you didn’t want it, you had too much of it. It wasn’t consistent in the supply which made it very frustrating.”
They were also con-cerned about quality and the time involved in rotating groups of cows through the system and limiting their feeds to about 10 minutes for best health results.
“It’s very labour inten-sive. It took dad and me a full day just to fill it up.”
If they had their time again the Jenkins would probably still install a feedpad, but Kevin junior added that it would have to be more cost effective. “You’d have to get the feed a lot cheaper and we’d have to get a decent price for our milk to make it worthwhile.”
Kevin senior, who was one of the original settlers in the Heytesbury set-tlement in 1962, is more direct. “The feedpad…you can have it,” he said.
“We’ve gone back to the old feed system,” Kevin junior added. “The feedpad is always there as a backstop. If the weather gets real bad and prices
are good we could start it again. It’s good to have the options.
“Last year was very wet and it got cold early and we didn’t have any growth. This year has been oppo-site,” Kevin junior said. “It was warm and everyone had growth and we put on more fertiliser because we’ve got so many cows on and we have to feed them well.
“Everything was going along really good until the cold snap; then everything went pear shaped. It made the cows and the calves crook, it’s been a very stressful year but I think it will turn around and we’ll have a really good season, depending on the weather.”
The farm has well-established pastures of fog, ryegrass and clover.
One of the joys of farm-ing for the family is the animals and breeding, however, the in-calf rate isn’t too good.
“We’re not sure why but hope it gets better. It could have been the poor quality silage, we’re not sure. We made better hay than silage last year; the silage was rubbish and we never used all of it,” Kevin
junior said.They are concentrating
on supplying good quality feed to the herd to address the problem.
Nearly all the feed is home grown. “Normally the best hay we cut our-selves – it’s good stuff,” Kevin junior said.
With teenager John starting as a third gen-eration on the farm as a trainee, the Jenkins family is looking to the future with plans for a new dairy and also looking at an option to buy more land.
“The dairy has had it,” Kevin junior said. “We’re starting with a new milk room and then we’ll decide what to do with the rest of the dairy.”
He believes the keys to success are having a plan and a goal, not going into dairy with rose-coloured glasses and having outside interests.
“You can’t stand idle but you don’t want unnec-essary debt either,” Kevin junior said.
“I love the outdoors, being my own boss and being independent. No two years are the same. Milking, I don’t really like that much, but you can’t have everything right.”
Kevin Jenkins junior and Kevin Jenkins senior.
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DAi ry NEwS AUSTrALiA september 2014
BREEDInG MAnAGEMEnT // 19
InCREASInG hERD size on the basis of having an outpaddock might be a false economy, according to a Victorian consultant.
Speaking at an InCharge Profitable Feeding Systems session at Cobden run by WestVic Dairy, farm consultant Phil Shannon questioned the cost of producing feed on outpaddocks, and also said farmers should be careful not to focus too heavily on feed pads using imported feed.
“It worries me when farmers increase herd size based on having an outpaddock,” he said. “It is more expensive than direct grazing.”
Mr Shannon urged farmers to expose their herds to more direct grazing.
“Feeding is a major part of every farming system. If you juggle the feeding correctly, farms will generally do well and optimising resources and using your land to
produce feed is an important part of that,” he said.
“The moment you process and store feed, the more expensive it becomes, and it’s rare that the feed you’re growing at home is lower in fibre than the feed you’re buying.”
Farmers should be aware of “the law of diminishing returns” when feeding and make sure the last kilogram fed turns up in the vat.
“More feed doesn’t always mean more milk. As we push for higher production, we don’t get as much return for each kilogram we put in,” Mr Shannon said.
“We get to the stage where an extra kilo we put in doesn’t result in extra milk.”
Farmers should concentrate on getting their cows to graze only on pastures grown since the last feed.
Mr Shannon said that grazing rules remain the same regardless of the type of farm.
He said getting cows on paddocks at the right leaf stage and
leaving 4-6cm residual behind were important keys to success.
But it’s a delicate balancing act. Mr Shannon said farmers
shouldn’t put in a concentrate that’s more expensive and leave behind good quality grass that could have been eaten.
“That’s because you are just swapping a cheap feed source for an expensive one and it comes at a cost at the next round.”
Timing pasture rotations is critical and ryegrass should be grazed at the 2-3 leaf stage, he said.
“Look at where the cow is grazing. If she didn’t eat it last time, she won’t eat it next time. Instead of being there for 30 days it’s now been there for 60 days. Last time you let her get away with it, so she won’t go lower.”
Mr Shannon said feeding cows has become over-complicated but farmers needed relatively cheap feed to maintain a competitive advantage. “Let’s just come back to the basics,” he said.
Be wary of expanding with outpaddock feed
RICK BAYnE
FARMERS ShouLD not only look at the iPad and the Excel spreadsheets but also understand the concepts of farming right.
That’s the view of northern Victorian farm consultant Phil Shannon who says many successful farmers already use a con-cept-based approach to decision making - it’s how they know what to do in what situation.
Mr Shannon told a WestVic Dairy InCharge Profitable Feeding Sys-tems session at Cobden that data is useful but farmers need to be the filter for information they receive and make deci-sions that are customised to their personal business.
“There is no one right farm system but the con-cepts will apply equally to every farm system,” he said.
“Regardless of your system, a good opera-tor will understand and apply concepts in a range of external conditions to maximise profit.”
Mr Shannon advised farmers to separate invest-ment decisions from oper-ational decisions and to be mindful of pressure to grow production.
“Operating a business is about using your invest-
ments to generate a sur-plus,” he said. “Regardless of how you invested, the operating concepts should be the same. The challenge is making investment decisions and under-standing the potential con-sequences.”
Farmers should be wary of over-reacting to market forces and going too far away from their business concepts.
“Most advice will be for you to produce more milk but you have to make deci-sions that suit your busi-ness,” Mr Shannon said. “You should use advice but add up if it’s taking you in the right direction.”
Mr Shannon said if farmers were confident of milk price in relation to input costs they could grow through ‘tweaks’ to their system.
“Dairy farmers have limited flexibility to respond to significant change in feed and milk prices,” he said. “Good farmers find it hard to
ramp up production with-out investing capital and if the price goes down and you’ve invested too much capital it is difficult to find areas to cut costs without reducing margins.
“Extra cows might mean extra stress and extra labour and extra costs, but not necessarily extra profit. There is then a risk if you have more cows and the milk price comes down.
“Your investment deci-sion is the bed you have to lie in. Trying to flex too much to make the most out of a season can create a rod for your back. All good operational decisions are based on rigorous application of marginal thinking.”
Mr Shannon said that chasing a milk production target was dangerous. “It has to be based on your season and your farming system,” he said. “Don’t take your eye off the long-term picture by making short-term changes.”
Concepts apply to all farm systemsRICK BAYnE
Phil Shannon.
PO Box 7538 • Shepparton • 3632 Victoria Phone (03) 5831 5559 • Fax (03) 5822 [email protected] • www.wwsires.com
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THE MAIN value of reg-istered cows is the com-mercial return from more productive and long-last-ing cows, according to northern Victorian dairy farmers Brent and Kim Mitchell.
That and, for Brent, the personal satisfaction of
“not having to milk ugly cows”.
The Mitchells dairy at Bamawm near Echuca in northern Victoria, milk-ing off 100ha all of which can be flood irrigated. Mr Mitchell’s parents help them manage another 180ha in outblocks that are used for replacement stock and fodder production.
The feeding system
is pasture based, with 2 tonnes grain/cow/year fed at the dairy.
The herd currently averages about 8500L/cow with the aim of lifting that to 9000L in the near future. About 35% of the herd is registered Holstein, 50% commercial Holsteins and 15% are crossbreds. The herd calves in three batches: 30% in March/
April, 50% in July/August and 20% in Nov/Dec.
Having bought the farm three years ago, the Mitchells have not been in a position to sell animals recently, instead building numbers. Now they have reached their optimum herd size of 250 milkers, the couple will continue to rear as many heifer calves as they can. This will give
them more options for culling and any surplus will be sold. They aim to increase the proportion of registered animals in the herd.
“At the moment our challenge is to improve fer-tility. The move to calv-ing in three batches was to improve in calf rates and get rid of the mop up bull so that all our cows will be
Dai ry News aUsTraLia september 2014
20 // brEEdINg MANAgEMENT
Register cows give Mitchells higher commercial returnsLEE-ANN MoNks
who: Brent and Kim Mitchell where: Bamawm whaT: Registered herd
joined to AI.”The couple’s aim is to
breed highly productive, functional and long lasting Holsteins.
“Initially I was very focussed on type but over time our breeding objec-tive has evolved to include production and longevity as well,” Brent said.
“Our cows have to walk, eat and endure a lot of heat in the summer. We want to breed cows that are going to last in the herd under these condi-tions and we also need to improve herd fertility.
“We are looking for a wide muzzle so they can eat as much grass as we can provide; and big open nostrils for breathing and cooling,” he said.
Mr Mitchell enjoys spending time researching sires to use over the herd.
“I short list on the balance of production, components, type and longevity. And within the shortlist I look at individ-ual type traits particularly high pins, body depth and dairy strength. I don’t just look at the figures. I like to look at photos of the bulls and his parents, and I take a lot of notice of cow fam-ilies.”Classification day
Mr Mitchell looks for-ward to classification days.
“It is human nature to see your own cows through rose coloured glasses. Classification helps us be more realistic about out cows. I learn a lot from every class day.
“We aim for our heifers to classify good plus ini-
tially and to reach VG
after three calvings.”Over the years three or
four cows have classified excellent. “We still get a buzz when a cow classifies Ex,” he said.ET program
They flush five or six cows a year, resulting in the birth of 10 to 12 ET calves.
“The challenges are the cost and finding recipients but we have some promis-ing progeny in the milking herd,” Mr Mitchell said.
“We’ve also used a few imported embryos. We work with some retired dairy farmers who still want to own cows. They buy imported embryos which are implanted in our recipients – usually beef cows or some lower-pro-ducing dairy cows.
“This arrangement has allowed us to get some highly regarded cow fami-lies in the herd. We have some heifers from the Barbie family from Regan-crest in the US and we have pregnancies from the Barbara cow family origi-nating in Canada.”Purchased cows
When finances
permit,
Brent and Kim buy cows, usu-ally to introduce
a new cow family into the herd.
In 2012 they bought a young Damion Satin heifer, Sensei Damion Satin, from Sensei Hol-steins.
“We flushed her before her first joining and she scored VG 85 after her first calf. She’s had a heifer calf naturally and four ET daughters, and there’s more eggs in the tank.
Dai ry News aUsTraLia september 2014
AbVs // 21
Register cows give Mitchells higher commercial returnsShe’s also produced well in her first lactation: 5806L in the first 158 days.”
Brent and Kim were so pleased with her performance that they bought another Satin family member at IDW 2014, Wattlebank Braxton Satin. She is a heifer, joined to Guthrie and they can’t wait for her to calve in Spring.
And their most recent purchase was Clydebank Shottle Leona-ET from master breeders Ross and Linda Somerville at the 100 Years of Excellence Centenary Sale in July. Mr Mitchell had wanted an animal from this particular Lass cow family for some time and he ended up paying the highest price of the sale. She descends from the ‘matriarch’ of the cow family Gay Lass, the highest brood star cow bred in Australia, with 40 stars.
“One of the main
reasons I bought her is that her dam, an Allen Leonie cow classified EX 94 2E, is one of the best cows I have seen in the flesh.”
The herd’s highest production family is the Jemimas, which began in the Mitchmantle herd with the purchase of Wade embryos from Booklane Belt Jemima.
“The Jemimas include the first Mitch prefex excellent cow, Mitch Durham Jem Ex 90-2E. She’s 10 years old and has consistently had good daughters,” he said.
Mr Mitchell loves the type of the Roxys, which began in the Mitchmantle herd via the purchase of two B-grade embryos, resulting in Mitchmantle Storm Roxy ET Ex-90.
“She was born in 1999 is still being flushed although she is retired from milking.
“Four of her daughters
entered the herd this year and we’ve been pleased with their performance so far.”
Mrs Mitchell’s favourite cow family is the Belles which began with a cow and a heifer they saw on their honeymoon when they visited the Burnvale herd in Western Australia.
“We didn’t buy them on our honeymoon.
“We got them not long after at the Burnvale’s dispersal sale. We’ve had three good daughters in the herd from that purchase,” Kim said.
Her favourite is Mitch PS Belle (VG87). “She has a fantastic temperament and is a great balanced cow: she produces well and gets back in calf reliably,” she said.
This is an edited version of an article published in the August-September Holstein Journal and has been reprinted with permission.
Brent and Kim Mitchell on their Bamawm farm.
PO Box 7538 • Shepparton • 3632 Victoria Phone (03) 5831 5559 • Fax (03) 5822 [email protected] • www.wwsires.com
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Dai ry News aUsTraLia september 2014
22 // AbVs
bALANCINg THE various traits in cows that dairy farmers value is at the heart of the recommendations by the National Breeding Objective Review taskforce.
After carefully considering farmer and industry feedback and the results of a rigorous research pro-gram, the task force has recommended three new breeding indexes:
■ Primary Index - a balanced index that aligns to the highest priority traits outlined in the NBO survey and maximises net profit through produc-tion, fertility and type.
■ Two alternate indexes - a type index that focuses on improved type at the expense of production and slower improvement in fertility; and a func-tional index that focuses on improved fertility and survival (longevity) at the expense of pro-duction and slower improvement in type.Michelle Axford, from the Australian Dairy Herd
Improvement Scheme, said the combination of a well-balanced primary index as well as two custom-ised indexes (specifically aligned to type focused and functionality focused farmers) are a good match for the range of breeding philosophies received through submissions.
“After carefully considering farmer and industry feedback alongside the results of a rigorous research program, the National Breeding Objective Task Force has developed its recommendations. The ensu-ing report will be distributed shortly after the ABV release,” Mrs Axford said.
A full report will soon be available, with the new indexes to be included in the April 2015 release of Aus-tralian Breeding Values (ABVs).
In other news, recent research has discovered a series of haplotypes that have a negative impact on fertility. Scanning for these haplotypes has started and new reports will soon be available.
Breeding is a balancing act
THE LATEsT Good Bulls Guide, based on the August release of Aus-tralian Breeding Values (ABVs), has more than double the number of bulls with Daughter Fer-tility ABVs compared with two years ago.
Michelle Axford from the Australian Dairy
Herd Improvement Scheme (ADHIS) said this improved selection would be welcomed by many dairy farmers.
“For example, In August 2012, less than 400 Holstein bulls had Daugh-ter Fertility ABVs in the Good Bulls Guide com-pared to 807 in the August
2014 edition,” Mrs Axford said.
Additionally, this release includes 25% more bulls with Semen Fertil-ity ABVs.
“This will give dairy farmers who want to include fertility in their breeding decisions, more information and more
choice of potential sires.“Most dairy farmers
want to improve the fer-tility of their dairy herds, and considering it in their breeding decisions is one of several things they can do.
“However, the reli-ability of fertility breed-ing values (both daughter
fertility and semen fertil-ity) has been limited in the past by a lack of data.”
The improvement in reliability over the past two years has been due to a better fertility ABV model and the addition of 1 million fertility records in the ADHIS data base.
The additional records
More reliable fertility ABVswere sourced through the Fertility Data Project which was a collaborative effort between ADHIS, the Dairy Futures CRC and farm software providers.
The project also deliv-ered improvements in the reliability of calving ease ABVs and workabil-ity ABVs.
Significantly more fer-tility records from cows recorded in updated soft-ware systems have had a meaningful influence on the reliability of Fertil-ity, Workability and Calv-ing Ease ABVs in this proof release.
Over one million addi-tional records have been added since the Dairy Futures CRC and ADHIS implemented the Fertility Data Project.
Furthermore, the addi-tional fertility records mean a 25% increase in the number of bulls with semen fertility values in
the past year.A low-cost screen-
ing program sponsored by ADHIS has seen a three-fold increase in the number of young bulls genotyped since 2012/13.
This screening process enables bull companies to scan a much broader group of bulls to select those bulls most suited to Australia.
For the first time, genomic based breeding values will be published for overseas bull without a genotype recorded in Aus-tralia.
This means that virtually all dairy bulls can be compared using ABVs and young bulls genotyped overseas can be selected based on their suitability to Australian herds.
This is a new ser-vice from Interbull and the evaluations will be referred to as ABV (ig).
Dai ry News aUsTraLia september 2014
AbVs // 23
good brEEdINg has been good business for Tasmania’s George Wagner.
The latest Australian Breeding Values prove his breeding success – he has the number one Holstein herd in Australia – but it’s his production results that have driven the success.
Mr Wagner, the princi-pal of Rengaw Holsteins at Winnaleah in north-east Tasmania, says quality has paid off as he fulfils his lifetime ambition of being a top breeder.
“Production was always our main aim,” he said. “When we got the stud we looked at production from the start but as more bulls became available we just went on from there.”
The cows are aver-aging 9000-9500 litres. “It’s been around 8000-9000 or thereabouts but with better technology it’s
going up a bit each year,” Mr Wagner said.
The good breeding pro-gram has made good busi-ness sense. “It gives us more production, more money from that produc-tion and we have a few bulls going to A.I. compa-nies. I’ve sold a few better cows at Dairy Week over the years and the ones I’ve sold have been at the top end of the herd. That’s quite pleasing,” Mr Wagner said.
Breeding has been part of his life for the past 48 years since he first started taking an interest at age 12.
The stud was registered in 1968 but the real ABV success started brewing in 1991 and has advanced even further over the past decade.
“In 1991 we brought in five embryos from Amer-ica. We only got one preg-nancy but I got a heifer calf and she’s been the foun-dation cow for most of the animals we have success
with now,” Mr Wagner said.
“She was a well-bred cow and all the progeny we got out of her have all turned out really good.”
This year the top three genomic bulls are all out of the same cow family.
From the start, qual-ity was paramount in the Wagner’s breeding.
“It was always about breeding from the best bulls available, trying to get a good cow family going,” Mr Wagner said.
The program has suc-
Production focus the priority at Winnaleah
who: George Wagner where: Winnaleah whaT: Top herd
rICk bAyNEcessfully created a herd well above the national average for fat, protein and type.
“We always get the best bulls available, whether it be genomics or proven, and I’ve always got a program of flush-ing better cows to the best bulls.”
Mr Wagner said the characteristics of the herd are “good produc-tion, good fertility traits, reasonable cell counts
and exceptional temper-ament”. Alongside pro-duction traits, over recent years the farm has also considered mastitis resis-tance and fertility when selecting for breeding, and has made significant genetic improvements in
these areas.Mr Wagner always
selects bulls that rank in the top 30 for Australian Profit Ranking (APR).
The farm milks about 180 cows, mainly Holstein but also including about 20 Jerseys.
For the past 10 years Mr Wagner has leased his farm after moving off the home farm where he grew up and first got the taste for breeding.
He is still enthused about farming and breed-ing, though he is plan-ning to reduce numbers by sending some cows to his son-in-law Jared Ireland at Lockington in northern Victoria.
Despite concerns about the impact of the high Aus-tralian dollar, things are looking good on his Tas-manian farm.
“The season is just starting to pick up now,”
Mr Wagner said. “It was a relatively warm winter and we haven’t had a lot of growth. It’s just starting to grow now and the season should turn out all right.”
In the meantime he can enjoy his long-desired recognition for breed-ing excellence “It’s quite pleasing. We’ve been breeding for a long time and always wanted to be the best and we finally got there.”
George Wagner.
PO Box 7538 • Shepparton • 3632 Victoria Phone (03) 5831 5559 • Fax (03) 5822 [email protected] • www.wwsires.com
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sPrINg Is in the air and the frosty winter mornings are giving way to beauti-ful mild spring weather. In Northern Victoria, spring is calving time and because of this it is also the time of any cows’ life when she is at her great-est risk.
Most disease issues
affecting dairy cows peak at or around calving. Mas-titis, Metritis, Metabolic disease along with calving problems, paralysis and other complaints of transi-tion occur.
With transition cow disease, it is impossi-ble not to discuss the dis-ease known as Displaced
Abomasum. The abomasum is the
closest thing that a cow has to our own stomach. It is the fourth of the stom-ach compartments and is the glandular stom-ach. The abomasum can become displaced to either the Left side (LDA) or the Right side (RDA) of the
cow, and can, on occasions become torsed (twisted) as it displaces to the Right hand side (RTA).
Left sided displace-ment is a relatively more common problem and usually occurs in cows at or just after calving.
LDA is probably one of my favourite things to
Be alert for calving problemsfix, because you can take a cow who is circling the drain to oblivion (culling) and bring her back into full production in the vast majority of cases.
Because it has a rela-tively good prognosis, I usually recommend to my client to fix a LDA. That said, like almost every-thing in life, prevention is far better than a cure.
Basically, any disease or issue that interferes with intake in the vital transi-tion period of a cow will increase the risk of her getting a LDA. By that I mean things like lameness or mastitis, poor availabil-ity or palatability of food, poor transition manage-ment or excessive trans-port, time off feed or increased stressful man-agement interactions.
Cows who have inac-curate calving dates who spend either too long, or too short on the transition diet will also have many introductions to the pre-calving group, each time requiring a new status quo to be organised with a changing dominance within the transition herd.
After calving, retained membranes, ketosis and rapid dietary changes are all known risk factors for a LDA.
So how do you prevent LDAs from being a prob-lem in your herd?
Firstly, ensure that your dry cows are in good body condition and have been fed to be ideal at transition.
Availability of qual-ity feed with low DCAD to prevent milk fever, but adequate palatabil-ity to ensure intake is crit-ical. Supervise calving and ensure any post calv-ing issues are dealt with quickly and thoroughly.
This may include pro-tocols that monitor for ketones, mastitis and metritis in the fresh cow herd.
A proactive approach is certainly an important tool to prevent fresh cow wrecks which have a high risk of LDA.
The use of fresh cow drenches may have a ben-eficial role in cows that are sub-clinically low in calcium or lack rumen fill. Talk to your dairy vet for assistance in develop-ing fresh cow health pro-tocols.
Investigate any cows quickly who are not per-forming as anticipated, or appear to be off their feed or not eating their ration in the dairy or out in the paddock or at the feed rail.
An LDA can be easily detected by listening for the characteristic “ping” that can sometimes sound like an over inflated bas-ketball being bounced when you flick or tap over the last few ribs on the LHS of the cow.
However, sometimes the noises can be a little more subtle and diffi-cult to detect, and I have seen many an LDA that has little or no gas in them when examined - they are a real challenge to diag-nose.
I use the presence of a tinkling fluid splash when balloting (like rapid punching of the abdomen) and the presence of any gas on the LHS below the level of rumen fill as my other criteria to diagnose a LDA.
Occasionally, the rumen will ping if it has a lot of gas but will almost never give you a tinkling splash, and cows that have been not eating for several days can develop an off feed ping that can be hard to interpret if the cow isn’t fully examined.
With an LDA, the cow will suffer indigestion and poor performance, low energy availability and subsequently lose body condition rapidly and may look sunken eyed and gaunt.
I have seen them with watery diarrhoea or firmly constipated, but in general they have a lower volume of slightly over-digested smelly faeces present on rectal exam and many have ketosis secondary to the metabolic failure (if ketosis wasn’t the primary cause).
I have taught many people how to listen for pings and think that a rea-sonable quality stetho-scope is a good investment on any dairy farm. Your veterinarian can probably help you with this skill
There are a number of techniques to “fix” LDAs, sometimes you can roll them, blind toggle them or perform any number of different surgical tech-niques on them.
aNimaL heaLThrob boNaNNo
to paGe 26
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You always want to do your best for them. They’re like family.
She says we’re like family.
Cool. That means we’ll be snorkling on the Barrier Reef this Christmas.
Dai ry News aUsTraLia september 2014
ANIMAL HEALTH // 25
The best calf pen partitionsZoE VogELs ANd gEMMA CHuCk
THErE Is a huge variation in calf housing from farm to farm.
Calf housing is a major determinant of overall calf health, the design of which should be determined by herd size, calving pattern, the number of calves to be reared, feeding system and how long calves are to be housed.
Regardless of the final design and configuration, one constant recommendation for any calf shed is to have solid, non-porous, easy to clean pen partitions to avoid transfer of scours and pathogens between calf pens.
There are many options out there for use as partitioning material.
Corrugated iron and tin, Colorbond, rubber sheeting and more recently Corflute have all been used successfully.
Shade mesh is used on some farms but tends to wear very quickly from tearing and chewing by calves.
It also needs replacing every season as it is difficult to clean but can be a temporary fix.
Large hay bales have also been used as the partition between calf pens within a shed. This also provides calves with a source of fibre but they should be replaced every season.
Avoid using wooden partitions as they are much harder to clean and disinfect and can harbour pathogens for many years.
There have been cases of lead poisoning in calves where painted wooden doors were used for calf pens – another reason why these are unsuitable.
Tips for partitions include:
■ Should be 1.5m high from the ground. This will mean they are 1.3m high from the top of the bedding, to avoid nose to nose contact between calves.
■ Demountable partitions or swinging gates allow for easy
cleaning of the calf shed with machinery between calving seasons.
■ Ensure all pens have easy access with a hinged gate. Climbing over partitions is not only time-consuming but can be hazardous.
■ A note on mesh gates: many farms use mesh gates for partitions between calf pens. As discussed this allows for easy transfer of pathogens from pen to pen. However, mesh gates can be used provided they are not a common partition between pens. This means they can be used when there is an alleyway between pens and there is no possibility for nose-to-nose contact or for scours to pass from one pen to another.
As well as solid partitions, there are some basic rules to help minimise the spread of disease between calves:
■ Use an all-in-all-out system. That is, calves enter a pen and stay there as a batch until they leave the shed. Do not move calves from pen to pen. The only reason a calf should leave a pen is to go to a dedicated sick pen area.
■ While 5-10 calves per pen is a reasonable number, stocking rate does depend on the feeding system. Slow drinkers can be troublesome in large group pens and there is a tendency to move them to a ‘slow drinking pen’. Individual feeding systems such as locking head bails or stalls will help deal with slow drinkers without removing them from their original pen.
■ It is most important not to mix calves from different age groups – calves in the same pen should all be within one week of age.
■ Put newborn calves into clean pens: with new bedding and cleaned and disinfected walls.
■ Ask for advice before you build.
There are many different calf shed designs and configurations. Pen partitions are just one aspect of calf housing.
It may be a simple renovation of your existing shed, conversion of another building or building a new shed from scratch but discuss your ideas with your vet prior to your build. • Zoe Vogels and Gemma Chuck are veterinarians with The Vet Group, based in western Victoria.
Toll Free 1800 885 576 ® Intervet Australia (known as MSD Animal Health). ABN: 79008467034. (18/07/2014).
VaccinaTe againsT pinkeye now or pay laTer
It’s pIlI tIme
LoCkyEr VALLEy farmer Steven Duncan has just completed building a compost barn to house his cows as part of an ongoing commitment to improving production, reduc-ing disease and stress on cows and combating the current economic environment.
Mr Duncan said the compost barn and a strong focus on home grown feed are part of a long-term strategy to keep the farm viable even in the harshest times.
“Healthy cows are the core of our business and our focus is prevent-ing disease, not treating sick ani-mals. The compost barn will help us achieve that.
“We’ll be able to look after our cows and control the environment 24-7,” he said. “The barn will pro-vide the missing link in our system; a soft and dry place where the cows can rest.”
The barn, which was completed this winter, will reduce lameness
stemming from cows walking on laneways or standing on concrete for a prolonged time and it will stop cows lying in mud and contracting masti-tis. Mr Duncan expects a production spike and sig-nificant animal health benefits as animal com-fort increases.
“Now they can lie in a comfortable environment underneath a high roof that allows the breeze to flow through,” he said.
Previously, the Duncans’ cows would spend a number of months a year beneath shade on a concrete floor, rather than lying, and this can take its toll on milk production.
According to Mr Duncan, studies show milk production is reduced if cows stand for too long.
“If cows are spending a lot of time on their feet, whether it be walk-ing long distances while grazing or
standing under a shade structure, it decreases their capacity to pro-duce milk. When cows are lying down there is much higher blood flow through the udder and therefore more milk produced,” he explained.
The Duncans pre-viously tried to boost production by increasing cow numbers, but came to realise that milking more cows is not necessarily the way to go.
“The more cows you have, the more bought-in feed you rely on if you can’t produce enough home grown high quality forages. If your infrastructure is not set up for han-dling a higher number of animals then risk of disease increases. These costs outweigh the profits of milking more cows,” Mr Duncan said.
Dai ry News aUsTraLia september 2014
26 // ANIMAL HEALTH
I have for a very long time preferred to per-form a right sided pyloro-pexy which is where I pull the abomasum back under the rumen and attach the pyloris (the outflow from the abomasum) to the body wall to prevent it from being able to displace or twist again.
I have done many thou-sands of these operations
and am incredibly com-fortable with this tech-nique but every vet has their own personal prefer-ence. There are even lapa-roscopic techniques being done to repair LDAs in cows now.
Right sided displace-ment especially if accom-panied by torsion of the stomach is a serious prob-lem.
The right hand side of
the abdomen of a cow is a somewhat more difficult minefield to examine with many different causes of gas pings and fluid splashes than I can hope to cover in this article.
When examining a cow with a RHS ping, I take many factors into account as to where the ping is, how large it is, what does the cow look like, is her heart rate and hydration
normal etc.I can only recommend
getting sick cows with right hand sided issues examine by your veteri-narian as soon as possi-ble as some RHS disorders are critically dangerous to the cow.• Rob Bonanno is a former president of the Australian Cattle Veterinarians Asso-ciation and a director of the Shepparton Vet Clinic.
froM paGe 24
Be alert for calving problems
Compost barn reduces mastitis
Steven Duncan
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Dai ry News aUsTraLia september 2014
ANIMAL HEALTH // 27
To EFFECTIVELy control a mastitis problem you need to know which bacteria is causing the infections and how the mastitis is being spread on your farm.
Streptococcus agalactiae (commonly known as Strep. ag) is relatively common but how can you tell if your herd is infected?
One way is to take a milk sample from all clinical cases before you treat them and send this off for bacteriological culture.
Alternatively you could send a bulk milk sample from the vat for PCR testing.
Your vet or factory field officer should be able to arrange either of these forms of testing for you.
Finding that you have Strep. ag in your herd can be both good news and bad news.
We all know that Strep. ag mastitis is contagious and spreads rapidly through the herd. You treat one cow and another pops up with mastitis.
Horror stories of the cost and complexity of control spread almost as quickly as the bacteria itself. But the good news is that it can be eradicated, unlike most other forms of mastitis bacteria.
Cure rates are high and it is only spread during milking so with some concentrated effort and your vet’s help, this is one cause of mastitis that you do not have to live with.
As with so many areas of management, it is not just what you do but how you do it that is important. So what are the elements of an effective Strep ag control strategy?Get help
You are going to need help with this one. Think about who needs to be involved and get the team working together: vet, factory field officer, herd improvement, farm staff.
At a minimum you will
need veterinary help with treatment plans but think about who else needs to know, who can help you, and who is going to be critical to the success of your strategy.Control the spread
You will need to look at all aspects of your milking routine to be sure that you are not contributing to the spread of the bacteria: look at teat spray preparation and application, milking machine performance and how you milk the cows.
It will also be very important to review with staff how you identify, treat and hygienically handle clinical cases.Separate herd
Being able to identify and separate “clean” and “infected” cows is very important unless you plan blitzing the whole herd with treatment in one go.
You want to be absolutely certain that cows in the “clean” herd are truly free from infection and are milked first. This means that you need to be able to handle at least two groups of cows and accurately identify them.Get rid of Strep. ag
Get advice from your advisor on a strategy that is tailored to your farm’s situation. You may choose to use dry cow therapy to treat infections or treatment during lactation.
Treatment during lactation can be an expensive exercise and is not a quick fix. You need to be very sure that you can manage the logistics and cost, and that you are controlling the spread effectively before embarking on this course of action.
Remember Strep. ag won’t be the only mastitis bacteria on your farm so eradicating Strep. ag won’t mean eradicating mastitis.
And finally, after going to all the effort of eradicating Strep. ag, never buy cows without checking that they are free of Strep. ag; you don’t want to end up back at
Detect bacteria to stop mastitis from spreading sArAH CHAPLIN
square one.For more information
look for “Countdown FAQ Strep ag” in your search engine.• Sarah Chaplin works with the DEPI in Tatura.
Look at all aspects of your milking routine to ensure you’re not
helping bacteria spread.
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Ben McKenzie – Cobden, VICTORIA “Since using this product I have almost totally eliminated mastitis at calving and effectively removed mastitis issues from my herd… I have more than saved the cost of the Teatseal, antibiotic dry cow therapy and associated application labour by the massive reduction in lost milk, medical costs, time and culls.”
Mark Williams – Toolamba West, VICTORIA “The use of Teatseal is now an integral part of my herd
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Peter & Jeanette Clark – Korrine, VICTORIA “250 cows treated with Teatseal costs approximately $4,000. Milk from each cow saved - 7,000L at 35cents/L equals $2,450. So in our case, two cows saved [from being culled] more than pays for the Teatseal.”
Minimum nitrogen for maximum farm profitabilitydAIry FArMErs and advisers will soon have a nitrogen fertiliser decision tool that will help deter-mine how much nitrogen to apply to pastures for maximum profitability.
Dr Cameron Gourley from the Department of Environment and Pri-mary Industries, Victoria, presented the background to the development of the new tool at a recent Agronomy Community forum in Hamilton.
He said fertilisers were recognised as a key driver of production for dairy farmers.
“Fertiliser makes up 5 to 10% of the farm’s operating costs, with between $30,000 and $50,000 spent on fertil-isers per farm, and overall, more than half of that expenditure goes towards nitrogen,” Dr Gourley said.
He said dairy farmers were increas-ingly accountable for environmen-tal performance and needed more sophisticated nutrient management decision tools as they intensified pro-duction.
“As dairy farms have become bigger and more intensive, the effi-ciency of nutrient use has declined,” he said.
“As a result, there is often a smaller proportion of nutrients leaving the farm in product than imported in fer-tiliser and feed.
“As a consequence, there’s a lot of nutrient accumulation in dairy pas-tures.”
Dr Gourley said a survey of more than 2000 dairy paddocks from dairy farms across Australia showed that 80% of soils were above the recom-mended phosphorus level.
The results showed similarly high levels of soil potassium and sulphur.
He said having higher levels of phosphorus and potassium in the soil, above the recommended soil test targets, did not increase milk produc-
tion. In contrast, however, milk pro-duction increased as nitrogen inputs increased.
“There is a very strong correlation between total nitrogen and milk pro-duction,” he said.
“However, surplus nitrogen in the dairy farm system increases the risk of environmental contamination, so the key is to ensure the nitrogen is used efficiently.”
While in Australian cropping sys-tems such as wheat, nitrogen use effi-ciency can be 50% or even higher, he said dairy farmers were at a lower effi-ciency range of 14% to 49%.
“So what are our opportunities to achieve more dry matter or milk per unit of nitrogen used?” he asked.
“One of the best ways is through improved nitrogen fertiliser manage-ment.”
In following this path, Dr Gourley looked for data to show how dairy farmers are currently using nitrogen.
A survey of Tasmanian dairy farmers by RedSky analysis between 2006 and 2010 provided some answers.
It showed that the average nitro-gen use was 185 kg/ha a year, which would have been applied in three or four applications.
However, rates ranged from just 31 kg/ha of nitrogen a year (10% of farm-ers surveyed) to 351 kg/ha of nitrogen a year (10% of farmers surveyed).
He also looked at previous research into effective rates of nitro-gen for dairy pastures.
“For example, research from the Mt Lofty Ranges in South Australia by Elliott and Abbott, as well as many other studies, showed that the optimum nitrogen rate was between 40 and 50 kg/ha per application,” he said.
“Over or under applying will
reduce the profitability of nitrogen fertiliser applications.
“Research also shows significant seasonal variations in responses, with larger dry matter responses in the peak of spring compared with a wet and cold winter.”
Dr Gourley said the new model for nitrogen fertiliser decisions was developed using nearly 6000 experiments showing nitrogen responses in pasture to predict responses.
“One of the limitations, however, is that most of this research was con-ducted in the 1970s and almost all of it is from Victoria,” he said.
The validity of the model was therefore tested against new field trials at Longwarry South, Athlone and in northern Victoria in 2013, with actual dry matter responses to nitrogen closely mirroring predicted responses.
“We are confident that the pre-dictions of extra pasture yield from nitrogen fertiliser applications are relevant to current dairy pastures,” he said.
He said early versions of the new tool may be available as soon as November 2014.
“Dairy farmers will be able to check their decisions about how much nitrogen to apply to a particu-lar paddock, for the particular time of year, so that the last kilogram adds to profit,” he said.
“Ideally, it should be used as a dis-cussion tool, with an emphasis on ‘what if ’ scenarios.
“In the long run, we want dairy farms to be productive, profitable and have a low environmental impact.” • For more information on the new nitrogen discussion tool for dairy, contact Dr Cameron Gourley on [email protected].
Dr Cameron Gourley (far right) presented the background to the development of a new nitrogen decision tool for dairy farmers at the agronomy Community forum in Hamilton. He is pictured at the forum with (from left) Charlie Walker, Incitec pivot fertilisers; Neil palmer and Michael Williams, Webber Chivell; and Dr Bob farquharson, University of Melbourne.
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“For a summer-safe,multi-graze summercrop, providing flexiblegrazing management,there is nothing betterthan Chico chicory.”
Dai ry News aUsTraLia september 2014
sPrINg PAsTurE // 29
sECoNd gENErATIoN dairy farmer, Rob Gear from Gympie, doesn’t have a lot of time to waste.
That’s why he used an enhanced efficiency fertiliser to boost the growth of his annual ryegrass pastures over winter.
“Using ENTEC Urea saves us time through the season and eliminates at least two nitrogen applications a year, with the same responses in the pasture as urea,” he said.
Mr Gear and his family milk 400 cows, grazing annual ryegrass pastures in the winter and native summer grasses through hotter months.
“We heard about ENTEC through Noel Matthews at Incitec Pivot Fertilisers and Brian Burkhardt at Landmark Gympie,” he said.
“They explained how it can help to keep nitrogen in the soil for longer.
“We knew it had worked for others, so we gave it a go.”
Using ENTEC Urea extended the responses to nitrogen fertiliser for the Gear family, allowing them to push grazing rotations and fertiliser applications out from 21 days to 28 days.
Over a seven month season, this means they
are skipping two fertiliser applications.
“In our labour situation, that’s a massive saving for us,” he said.
He added that the pasture growth responses were as good as, if not better than, where urea was used more frequently.
Rob applies 125 kg/ha of ENTEC Urea to his ryegrass pastures each month.
“It does hang on better in the ground and that’s why we can allow longer between nitrogen applications,” he said.
“At the end of the season when the summer grass is taking over, we also see a residual nitrogen response and that helps if we get a bit of rain to kick start the new pasture.”
ENTEC is suitable for use in a variety of crops and pastures.
It works by stabilising applied ammonium nitrogen in the soil for several weeks after application, giving crops a more consistent supply of nitrogen and helping protect against denitrification and leaching losses.
Unlike some enhanced efficiency fertilisers, ENTEC does not deny crops and pastures access to nitrogen.
ENTEC has been included in several
Winter pasture boost has Gympie farmer geared up
studies on dairy farms as part of the National Agricultural Nitrous Oxide Research Program funded by the federal Department of Agriculture.
It was also included in a recent Queensland Dairyfarmers’ Organisation research
project, conducted on dairy farms at Gympie and Ravenshoe.
But Rob didn’t wait on the results.
“We’re time poor here, trying to manage the milking and everything else, so we will keep using ENTEC Urea to save time and money,” he said.
rob Gear and his father Ivan are using eNteC Urea to extend the response to nitrogen fertiliser in their dairy pastures from three weeks to four.
eNteC Urea is applied to the Gear family’s ryegrass pastures every month through winter.
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Dai ry News aUsTraLia september 2014
30 // sPrINg PAsTurE
MANAgEMENT oF pasture and feed on hand throughout the calving period and in the weeks following calving can be challenging.
However, decisions made during this time can have a large impact on pasture and milk production in the succeeding months.
When managing pasture during spring, key targets include average pasture cover at the start of calving (how much feed you have across your farm), and average pasture cover at the breakeven point, which is when your cows are eating the same amount of pasture that is being grown (feed supply equals feed demand).
Breakeven date will vary from region to region depending on climatic factors such temperature and rainfall, and on-farm factors such as stocking rate, calving date and soil fertility.
The average pasture cover at calving determines how much milk can be produced from pasture in the months following calving (and impacts on cost of production).
Too much pasture at calving may mean that pasture is wasted and growth may be reduced.
If there is insufficient pasture at calving, there will not be enough pasture available for cows, and additional supplements will be required to ensure cows are not underfed, which comes at a greater cost.
In addition, if there is not enough pasture, there is a tendency to speed-up the rotation in an attempt to feed the cows and if ryegrass based pasture is being grazed before the 2 1/2 to 3 leaf stage, pasture growth will be reduced and overall cover will remain low until later in spring.
The average pasture cover at breakeven date determines both the quantity and quality of feed at mating time (mid to late October).
There are a number of tools
that have been developed, both in Australia and New Zealand, that can assist in taking the guesswork out of grazing management during this critical period in early spring, as well as throughout the season.
Two of these tools include the Farm Feedbudget, developed by the Tasmanian Institute of Agriculture’s Dairy Centre, and the Spring Rotation Planner, developed by DairyNZ.
The Spring Rotation Planner is a great online tool that can be used to assist in developing a grazing management plan through spring, while the TIA farm feedbudget, also available online, can be used throughout the season on an ongoing basis, or at strategic points throughout the season, to help manage pasture and feed allocation.
DairyNZ Spring Rotation PlannerThe DairyNZ Spring Rotation
Planner is designed to be used during the spring months to assist farmers in managing rotation length and achieving their target pasture cover during this period, based on stocking rate and per cow pasture demand.
The Spring Rotation Planner works by entering your farm size, calving date, rotation length prior to calving, expected breakeven date (when pasture supply equals demand), and rotation length through the bulk of spring.
The other information required includes opening target pasture cover in kg DM/ha.
This is the target cover required at calving, not the actual cover at calving. Target pasture cover at calving is dependent on stocking rate, which will vary between farms, but 1800-2200kg MD/ha can be used as a general guide.
Pasture cover at breakeven date also needs to be entered.
From this information, the Spring Rotation Planner calculates a number of graphs for you, including rotation length for the 2-3 months following
calving, the area (hectares) you should graze per day in order to stay on these given rotations and achieve your target pasture cover, and your target average pasture cover during this period.
This information is also presented in a table.
TIA Farm FeedbudgetWhile spring grazing management
is critical in maximising milk production from pasture, it isn’t the only time of the year at which it is important to be reviewing the feed situation and planning feed strategies.
The TIA farm feedbudget is a very useful tool that has been developed using Microsoft Excel that can aid in planning supplements and feeding regime throughout a season, and assist in predicting and managing feed surplus and deficits.
The feedbudget enables you to budget your feed demand and supply for different periods throughout a season.
By entering your average pasture cover at the beginning of the budget period (eg 10 days, two weeks, one month), the calculator will give you the change in cover over that period.
By manipulating the daily feed inputs, as well as pasture growth rates, you can see what impact this has on your average pasture cover over that period.
The feedbudget is a quick and easy way of seeing how an increase or decrease in pasture growth rates, supplements or cow numbers, will impact on your average pasture cover over the budget period and throughout the season.
The feedbuget also produces a graph of pasture cover over the budget period, and shows your cows’ ration balance based on your feed inputs.• Alison Hall is dairy industry extension officer with the Tasmanian Institute of Agriculture.This article was first published in the Tassie Dairy News, August 2014.
Help to manage pasture during spring calvingALIsoN HALL
the average pasture cover at calving determines how much milk can be produced in the following months.
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Dai ry News aUsTraLia september 2014
MACHINEry & ProduCTs// 31
Three new silage wagonsJAsoN PousTIE, from Cooriemungle in Victoria’s western dis-trict, is a man who doesn’t do anything by halves. He has just taken delivery of three; count them – three - self-load-ing silage wagons from Greg Allan Farm Machin-ery at Colac.
Jason runs Poustie Agricultural Contracting and with the silage season almost upon us the three Lely Tigo PR60D wagons will be working very soon. The ‘D’ denotes that the machines have rear beat-ers; you can buy them with or without.
Two discharge roll-ers are fitted as standard, with an option for a third. They ensure that the crop is distributed evenly. A movement sensor on the lower discharge roller automatically stops the floor chains when the wagon is full, and a cam-type clutch protects the discharge roller against overloading. They each have a 36 cubic metre capacity.
Mr Poustie’s father was a dairy farmer and Jason started out with an auto-motive mechanic appren-ticeship and worked in earthmoving and later for an ag contractor before branching out on his own
20 years ago.Now he has around
200 customers of whom, he says, 99% are dairy farmers. “We’ll travel any-where, actually about three hour’s radius from home, from the South Australia border to Gee-long.
“We’ve always had an opposition brand with the silage loaders and I did a lot of homework when I was looking around for these,” explained Mr Pou-stie. “We thought about self-propelled forage har-vesters but they were too expensive and, besides, my customers wanted me to get the loader wagons.
“The main thing that I liked about these wagons was Lely’s cam-less pick-up, the rotor design with a 40 knife system, and fewer working parts. That means, potentially, less downtime.”
He pointed out that these machines have
seven tine bars with 40 knives in the same dis-tance that his previous wagons had 33 knives, so he will end up with a finer chop, at a chopping length of 37mm. That way, he says, he can cover both markets among his customers – those want-ing to feed out directly and those using mixer
wagons.The cam-less pick-up
means fewer moving parts make it more reliable and less prone to wear. All components are hot-dip galvanised. The work-ing width of the pick-up is 1.9m and each wagon can handle up to 24 tonnes.
The pick-up and chop-ping rotor are positioned close to each other, reduc-ing the pick-up rotation speed to bridge the dis-tance to the rotor, which favours the crop intake as well as durability.
The amount of com-paction can be prese-lected depending on the crop. Forward tilt-ing of the hydraulically-adjustable multi-function bulkhead reduces the pressure, while backward tilting increases it. Sen-sors on the hydraulic cyl-inders of the bulkhead automatically activate the floor chains.
The silage team at Pou-
workiNg cLoTheschris DiNgLe
stie Agricultural Con-tracting have three Case Puma CVT 195 tractors to operate the wagons, their purchases date from five years ago to about a month ago.
Another Case Puma with a two tonne block is used for the silage stack, sporting dual wheels on the back and a silage spreader on the front
linkage.The baling team have a
variety of Lely rakes, ted-ders and balers and Pot-tinger mowers. These are powered by four Valtra tractors.
The ISOBUS control and monitoring systems for the Welger balers, which they have been using for 10 years, are interchangeable with the
new silage wagons. Mr Poustie said the
Lely product is really good and he has been dealing with – and trial-ling machines from - Greg Allan Farm Machinery for 20 years. His main sales contact there now is Tim Foster.
“We’re waiting for the grass to grow. Once we start we are out every day
and we don’t like stopping – that’s why we have gone with Lely. Tim gives us good back-up and we get very good parts support, both from the dealership and the Lely factory.”
The parts support is an important factor for Mr Poustie and he says that it is second to none. “All the parts we may need are already in stock.”
Cooriemungle contractor Jason poustie with a Lely tigo pr60D self-loading silage wagon.
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New from Bale Up HayfeedersOur modular feed pad model, the next level in feed pads, comes in 4 metre units. Buy 2 ‘bookend’ units and add as many open ended centre units as you need. No more feed on the ground and extremely low waste, and like all our feeders comes with our rolled corrugated floor.
Calf feeder $1980 inc gst
Standard cow feeder
$2200 inc gst
$2420 incl GST per unit
Dai ry News aUsTraLia september 2014
32 // MACHINEry & ProduCTs
ABB’s Solar Pump Drive System delivers power for remote pumping applications, without damaging the environment. The system supports the irrigation of farms, where energy savings are a prime concern, as well as water pumping applications at remote sites, where it is simply not possible to connect to the power grid. ABB’s system provides an economic and eco-friendly alternative to a diesel generator.
This rugged system comprises of a PV cell, an IP66 ABB drive which doubles as an inverter, a motor and a pump. Maximum power output is achieved throughout the day via a maximum power point tracking feature. A built-in flow measurement and flow detection function turns the drive off in case of dry run. With additional remote modules, you can monitor the solar pump parameters from anywhere. The dual supply mode also enables connection to the grid if required. For further information, please visit http://new.abb.com/drives/en/acs355-solar-pump
Solar pump drive. Exploiting the power of the sun.
ABB Australia Pty LimitedContact Centre: 1800 222 435www.abbaustralia.com.au
WHy do people stick with compa-nies that shaft them? It’s a question that is no doubt asked the world over, as businesses and con-sumers maintain relationships with suppliers (and cus-tomers) that regu-larly disappoint.
Is it the price? Is it a feeling of ‘better the devil you know’? Is it some sort of pleasure at having a reliable (ironically) counterparty to blame your own failures on?
Naturally, this applies to farm machinery as much as anything else. It’s fair to say that even the leading manufacturers produce a dud machine from time to time, and when many of their customers abandon them, lessons are learnt.
But there are also marques that consistently churn out the very finest examples of medioc-rity, machines that break down, blow up, or simply don’t do the job they’re alleged to do.
Now you’re probably think-ing after such an extensive intro-duction that I’m going to go right ahead and name a few examples of these repeat offenders. Well you’d be wrong.
I don’t like being sued, so I’m going to do just the opposite, and pay tribute to a tractor brand that I believe has got it together as much, if not more than any other. Fendt.
Fendt are yet another member of the giant AGCO Corporation, having been purchased in 1997.
Fendt has been making tractors since 1928, when Hermann Fendt reportedly built the first ‘dieselross’ (diesel horse) in his father’s blacksmith shop in Marktober-dorf, Germany.
If you ask me, the name alone sug-
gests Hermann was onto some-thing early, because a diesel horse is the only one I’d be willing to own – but I digress.
The fact is, there is no shortage of tractor brands out there with an 80-plus year history. And most of them don’t charge anywhere near as much for the tractors they sell.
But every second contractor has a Fendt fleet and once initiated, few buyers seem to ditch the make. Why? Fendt would say it’s all about reliability and efficiency; they’re probably not far wrong.
Take the implied expectations of the second hand market. Many well-maintained tractors will hap-pily run well past the 10,000 hour mark, but if you go to trade them in, your dealer will be on the phone to the local wreckers.
Resale values clearly indicate that the market regards Fendt machines rather differently. At 10,000 hours, there seem to be no shortage of buyers who will take one on.
Innovation is a major part of keeping ahead in the efficiency stakes, and again, Fendt aren’t the only ones doing it. But the run-
away success of their Vario step-less transmission has cemented the brand’s reputation as a leader, even now that every major manufacturer offers a CVT or IVT box.
The Vario transmission was launched in 1996 on the 900 series, with incorporation of the com-puterised Tractor Management System (TMS) enabling both pad-dock work and transport to be done at the optimum engine rpm – saving fuel.
Combining the whole opera-tion into a single joystick made the machines ridiculously easy to operate by the standards of the time. The joystick even has a toggle
switch operated by your second smallest finger – how much more efficient can you get?
I’m sure there are exceptions, but it seems for most that the Fendt ownership experience is a pleas-ant one – every time. If that’s not enough for you to justify the price tag, the BBC’s TopGear motoring program described the 900 series as ‘the Mercedes S class of tractors’. High praise indeed.• John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a variety of roles for both profit and fun.
fendt diesel horse won’t let you down
grUNTjohN DropperT
an early example of the fendt 900 Vario series.
THE PurCHAsE of an adjoining property, with its existing milking shed, has led Merrigum dairy farmers, Kevin and Faye Fitzsimmons, to an exten-sive upgrade that has already paid dividends.
In July last year the new acquisition expanded their land to 140 from the original 77ha and the ren-ovation to the shed was part of extensive improve-ments to the new prop-erty. In the process they abandoned their original milking shed.
“It was a good dairy”, explained Kevin, “it just needed tweaking to bring it into the 21st century. We redid the yards and the water supply – the basics were all there, including the auto wash.”
At the same time they
went to auto draft with computer readout, new yards, a new crush and they upgraded to a new lobe-type vacuum pump.
The major improve-ment to the milking equip-ment was the installation
of 20 new WestfaliaSurge swing-overs with auto-matic cluster removers, through DTS Kyabram, the local dealer for GEA Farm Technologies.
The WestfaliaSurge DeMax 55 automatic
cluster removers are an advanced electronic unit and, in time, can be easily upgraded to the Dematron 70 milk metering system. The cluster removal pro-cess can be tuned to Mr Fitzsimmons’ specific needs with adjustable delay between vacuum cut-off and removal cyl-inder activation. There is adjustable delay for milk let-down of up to six min-utes.
The stainless steel swing-over support arms are manufactured by GEA at their factory in Colac, Victoria. They enhance the system by providing better cluster alignment and free up the working area from milk and pulsation tubes hanging down. The arms that Mr Fitzsimmons ordered incorporate herd
test meter brackets. They have a ‘swing to start’ facil-ity which makes for easier operation and gas strut locators provide positive location so they cannot move while the cups are on the cows.
Mr Fitzsimmons said they have built up a good relationship with DTS Kyabram over the years.
The new swing-overs took four days to install but the Fitzsimons were able to use the dairy right through, section by sec-tion. “It was planned well.”
Mr Fitzsimmons said that they can put through about 200 cows per hour if there are two operators milking and 140 to 150 if he is on his own.Tel. GEA Farm Technolo-gies on 1800 789 100.
Dai ry News aUsTraLia september 2014
MACHINEry & ProduCTs // 33
A NEW automated system to ensure dairy farmers’ stock troughs never run dry has been developed to give peace of mind about on-farm watering systems.
Mait Industries, based in Melbourne, have released their CR-X Cable Replacement Series Bi-directional switch.
This remote tank fill method allows the CR-X unit to be connected to the pump source with a level switch at the water tank, with another CR-X unit and gravity feed to the stock troughs.
Farmers simply connect and set a float switch, then sit back and relax knowing the tank and troughs will never run dry.
The wireless bi-directional switch, powered from a nominal 12 volt DC power source, will operate up to 6km range in line-of-site. If a particular application needs additional range, it is a straightforward process to add repeaters.
The Mait Industries CR-X units are ideal for remote control of pumps and valves where laying of cable is expensive, not feasible or simply not desired. They are also useful for remote monitoring of switch states, such as for pressure and flow switches. The system can be used for numerous applications, such as pump or machine start.
A standard in-built, 3AH, rechargeable Lithium battery pack can be used as the power source, kept charged via a 15 volt DC 1A regulated plug pack. If mains power is not available a 12 volt solar panel (5 or 10W) may be used. Tel. Mait Industries on 1300 739 920
Automated system for stock troughs New swing-overs
speed up milking
Kevin fitzsimmons in front of his improved dairy.
Contact your nearest Reese dealer for more information. All prices are exclusive of GST. Freight charges may apply
The new generation 3000 series Grassfarmer is the one you’ve been waiting for – an improved and more refined version of one
of the world’s most popular grass drills.Engineered to exceed all your expectations with a raft of new and improved features. Built with the sort of quality workmanship you’d expect from a company that has built and marketed seed drills for more than 40 years, the Grassfarmer models are available as Tine and T-Boot or as concave Disc opener versions, 14 row, 2.1m sowing width and 18 row 2.7m sowing width.
TINE AND T-BOOT MODEL FEATURES:❱❱ Unique Aitchison slim line castings and inverted T-boot
❱❱ Larger 14” Disc coulters with a stronger axle design
❱❱ Super strong 25mm tines, designed for superior trash clearance
A NEW combined solar hot water and solar electricity installation on a dairy farm at Koorooman, just north of Leongatha in Gippsland, is set to return power bill savings of up to $6500 per year to the farmers.
Peter and Jenny Hulshof share-farm with owner Louisa Noordenne, milking between 330 and 340 Frie-sian cows on a 42-stand rotary built 27 years ago. The property, ‘Bona Vista’ covers 224ha, including the area for young stock. The milking cows run on about 168ha.
They chose Solar Dynamics, based in the south-eastern suburbs of Mel-bourne. Solar Dynamics is the sole distributor of the well-known Chro-magen solar hot water products and handles solar power installations pro-viding a 25 year warranty.
After inspecting the dairy, Doug Phayer, the senior site assessor, sug-gested that he quote on setting up a solar system to supply energy for all the power requirements for the dairy and the hot water.
After almost a year’s delibera-tion Louisa Noordenne agreed to go ahead. Work on the installation started on May 1 this year. It took three days to get the 15 kW solar elec-tricity system up and running.
Sixty 250 watt Canadian solar panels are fitted to the north-facing roof of the milking shed and six CR110 solar panels provide energy to three hot water units, each with 300 litre tanks. A pump circulates the water on each of the hot water tanks.
As no heating elements are con-nected on the hot water units the system operates as a pre-heat for the existing boiler at the dairy. This way solar pre-heated water is provided, so the boiler heats to the operating tem-perature required for the post-milking wash-downs.
“Our shed is on three-phase power
so Solar Dynamics fitted a 15,000 watt three phase grid connect inverter,” Mr Hulshof said.
“What we use during the day comes from the solar and any extra goes into the grid so that we can get paid for it or as a reduction off our energy bills. We get 8 cents per kW on the grid.”
Mr Hulshof said they considered solar energy to save money.
“We use 1160 litres of hot water each day in the dairy and that’s lots of electricity. With the high inputs in dairying, we needed to save costs somewhere. Louisa was very support-ive of the project.”
The Hulshofs said as the solar energy system has only been in for a couple of months, it hasn’t really been long enough to assess the advantages.
“There is a read-out on the control panel of the daily solar input and it’s easier than we thought to manage it in
the practical operation of the dairy.”Solar Dynamics director, Wayne
Foster, estimates the combined sys-tems; solar hot water and solar elec-tricity, should achieve a reduction on grid-supplied power of over 30,000 kilowatt hours per year, equating to more than $6500 per year savings on electricity costs.
“This will be a combination of a reduction of grid power required and some solar credits for export-ing power to the grid at a rate of eight cents per kilowatt hour credit.
“With over a 17% return on the investment and the rising cost of elec-tricity the system will pay for itself in less than five years.
Backed with a 25 year performance on the solar electricity panels it will be pumping along every day helping save money.” Tel. Wayne Foster0400 192 095.
Solar power pays dividends for Gippsland farmers
peter and Jenny Hulshof in front of their dairy, now fitted with 66 solar panels.
The dedicated milk cooling specialistRegisteredPackoDealerAustralia
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