Dairy News Australia December 2013

Geoff Akers heads Dairy Australia PAGE 7

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DECEMBER 2013 ISSUE 43 // www.dairynewsaustralia.com.au

VERSATILE PERFORMERJohn Deere GatorPAGE 33

WATER SAVERShutting down pasturesPAGE 20

OPEN FOR BUSINESSMurray Goulburn proposes share plan for non-farmers PAGE 3

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DAI RY NEWS AUSTRALIA DECEMBER 2013

NEWS // 3

NEWS ��3-13

OPINION �� 14-15

AGRIBUSINESS �� 16-17

MANAGEMENT �� 18-23

ANIMAL HEALTH �� 24-26

IDW PREVIEW ��27-31

MACHINERY & PRODUCTS �� 32-34

Northern Victorian farmer Geoff Akers has been appointed the new chair of Dairy Australia. PG.07

Dairy consultant Mark Emonson is trialling a high calcium diet for cows during the transition period. PG.24

Murray Goulburn wants to change – and it needs to – if it is to be a globally relevant business in future, writes Steve Spencer. PG.16

MURRAY GOULBURN managing direc-tor Gary Helou wants to put the cooperative’s external capital raising plan to its suppliers in the form of an extraordinary general meeting by mid-2014.

Mr Helou told the annual general meeting the capital raising proposal was similar to Fon-terra’s Trading Among Farmers plan where the New Zealand cooperative raised $NZ500 mil-lion through issuing of non-voting shares.

However, Fonterra’s scheme was first announced in 2007 and launched last year – a process that took five years.

MG has wasted little time canvassing the proposal with its current shareholders, hold-ing supplier meetings early this month.

Mr Helou told the AGM the co-op will under-take a detailed development of the proposed capital restructure before holding a further round of supplier meetings in March next year to discuss, in full, the final proposed structure.

“Depending on the feedback received from

supplier-shareholders, MG will plan to hold an extraordinary general meeting in May,” Mr Helou said.

Subject to shareholder approval, MG will implement the proposed structure by a target date of July 1.

These changes would coincide with an offer to external investors to acquire units in a listed unit trust that would pay a dividend equivalent to dividends paid to supplier-shareholders.

The unit trust would be expected to be listed on the Australian Stock Exchange (ASX) by July 1.

Mr Helou stressed the cooperative structure would be retained under the plan with farmers retaining 100% control, and that the capital rais-ing would not be used to purchase Warrnambool Cheese and Butter if the opportunity arose.

He told the meeting that MG needed to raise “many hundreds of millions of dollars” to fund infrastructure upgrades.

Mr Helou said the external shares would

provide current MG supplier-shareholders with an observable market price for their MG shares, consequently strengthening farm bal-ance sheets.

Former MG chairman Ian MacAu-lay cautioned the cooperative at the AGM on implementing the NZ model. Mr MacAulay said Fonterra’s TAF was “born and bred in a whole different circumstance than where we are now”.

Koroit farmer Harper Kilpatrick said the equity investment was needed for capital invest-ment and development of new products to improve profitability.

“Equity is less risk than debt, although I don’t think debt is an issue in the short-term,” he said.

However, Koroit dairy farmer Tom Paton doubts the system will work.

“It may have worked in New Zealand but they have a different structure to Australia,” he said.

Mr Paton added that farmers needed to keep control of the cooperative.

MG targets July 1 for share listing

NSW farmer Janet Moxey received an Outstanding Service Award at the Australian Dairy Industry Council breakfast last month. Full story, page 8.


4 // NEWS

MURRAY GOULBURN has been granted some breathing space in what has been a frantic three-way bidding process for Warrnambool Cheese and Butter in the form of a Takeovers Panel order.

The Takeovers Panel issued an order on November 29 preventing MG’s rival for WCB, Saputo, from processing shareholder acceptances.

The halt will remain in place until the panel considers the application. WCB shareholders may still complete and send acceptances to its offer, but Saputo cannot process them.

Murray Goulburn applied to the Takeovers Panel after Saputo increased its offer for WCB shares from $9/share to $9.20/share but removed the divi-

dend component announced in its ear-lier offers.

Saputo had received offers equiv-alent to 10% of WCB before the Take-overs Panel order.

The co-op said Saputo misled WCB shareholders with its revised offer.

Its previous bid included two fully-franked special dividends paid by WCB.

This included 46 cents a share if Saputo received a minimum of 50.1% of WCB shares or 85 cents/share if Saputo acquired at least 90% of WCB.

WCB has responded to the Take-overs Panel application, saying it “disagrees with the basis for that appli-cation and will respond to it in accor-dance with the panel’s procedures”.

MG has raised its bid to $9.50 a share and has started its process with the Aus-tralian Competition Tribunal (ACT). The tribunal has provisionally reserved February 10 to commence any public hearing of the application.

The ACT said it had also given a copy of MG’s application and the accompa-nying documentation to the Australian Competition and Consumer Commis-sion (ACCC).

The application was accompanied by extensive documentation.

MG hopes to receive a decision from the ACT by February 28 next year. The bidder’s statement also provided fur-ther details on the cooperative’s inten-tions for the merged business, including a potential expansion of processing

assets in the Warrnambool region.Saputo issued a statement on the

Australian Securities Exchange which responded to the Takeovers Panel notice, saying the interim order was not necessarily indicative of the merits of the application.

Murray Goulburn’s offer of $9.50 cash per WCB share values the com-pany at $533 million.

In a statement, the co-op said this price represents an 111% premium over the closing price of $4.51 per WCB share on the ASX on September 11.

It also offered a 6% premium to Saputo’s revised $9 cash per share offer announced to ASX on November 25 and a 6% to the implied value of Bega’s offer, based on the closing price of Bega share

on the ASX on November 27.Bega reminded Warrnambool share-

holders via the ASX earlier this month that Bega will pay WCB shareholders 1.5 of its own shares plus $2 cash within eight business days.

This is the equivalent of almost $9 a share.

Bega’s bid is the only one of the three offers that is live and can be accepted by Warrnambool shareholders.

“Interim orders prevent Saputo Dairy Australia processing any accep-tances received under its bid for Warrnambool,” Bega said in an ASX statement.

“Bega Cheese’s offer is uncondi-tional and remains open for acceptance by Warrnambool shareholder.”

Breathing space for MG as brakes put on Saputo

POMBORNEIT FARMER Ben Bennett believes the lack of information on Warrnambool Cheese and Butter’s finances available to Murray Goulburn is worrying.

“I don’t think we have enough information to make a prudent decision either way,” Mr Bennett said.

“All three interested parties should be given an unbridled look so they can do due diligence. None of us know what’s in the books and when they are blatantly not prepared to engage with Murray Goulburn it does make you worry,” he said.

“If I was selling my farm and had two or three enthusiastic buyers, as we’d all wish, I’d want them all to have a decent

look at it. They would be a lot more comfortable if they knew what they were buying…you don’t want surprises, especially at this level.”

Mr Bennett said that most dairy farmers were averse to risk and going into more debt.

“Most are looking at consolidation, not going into more borrowing at this point in time. It’s human nature to be cautious.”

He added that he was concerned about the impact on the co-operative structure.

“There is no such thing as a hybrid co-operative. When you’re a listed company, you are duty bound to protect the wealth of shareholders and the milk price would be subservient to that,” Mr Bennett said.

MG needs a look at the books

FONTERRA CHAIRMAN John Wilson says the Australian dairy industry needs to consolidate.

Mr Wilson says the co-op is watching with interest the esca-lating battle for listed processor Warrnambool Cheese and Butter (WCB).

Fonterra’s recent small acquisitions in Australia are about alignment, he says. The co-op paid $A46 m for a 6% stake in Bega Cheese, one of three companies tussling for control of WCB, and it bought the Tamar Valley yoghurt business from liquidators for an undisclosed sum.

Mr Wilson points out that the fragmented domestic dairy business in Australia makes it a tough place to do business. Milk production in Australia has dropped from 12b L to 9bL and two major supermarkets chains, Woolworths and Coles, are dictating prices of dairy products. “Therefore it’s important for the Austra-lian dairy industry to consolidate,” he said.

Mr Wilson says Fonterra’s stake in Bega is a friendly invest-ment. “We have licensing and packing arrangements with Bega Cheese. The small Tasmanian business Tamar Valley aligns with our significant yoghurt business in Australia.”

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NEWS // 5

MURRAY GOUL-BURN’S $9.50 per share bid for Warrnambool Cheese and Butter is divid-ing local suppliers who see it as either the potential saviour or destroyer of the Australian dairy industry.

As the power-play for Warrnambool Cheese and Butter pans out on an international stage, south-west Victorian Murray Goulburn suppliers are divided in their opinions about whether the coop-erative bid could or should succeed.

While some are con-cerned about debt and lack of information, many farmers say the bid is essential to keep local farmer control in dairying.

Woolsthorpe supplier Roma Britnell said suc-cess for MG’s bid would be “the best thing for our nation”.

A strong advocate for industry cooper-ation, Mrs Brit-nell said keeping local farmer control made sense.

“I firmly believe that if farmers can work together as a team and see the benefits of local ownership we would be better off as an indus-try,” she said.

“It’s hard to deny the logic of an Australian-owned large scale dairy cooperative. As farmers we need to get as much as possible out of the market place and this would be our best option.”

Mrs Britnell said she believed concerns raised about MG’s debt were unfair.

“No one mentions that Bega and Saputo are bor-rowing too, or that Fon-terra went into equity debt to make purchases,” she said.

“In this instance I believe it is worthwhile going into more debt. His-torically other coopera-tives have done the same and succeeded and in this case the scale would ensure its success.”

However, Koroit dairy

farmer and former long-term MG site manager Tom Paton described the bid as a “huge mistake”.

“If they don’t have the money, they shouldn’t be doing it,” Mr Paton said.

Mr Paton said MG’s earlier bid for WCB would have worked at a lower price but the proposed

$9.50 per share was not realistic and entailed too much borrowing.

“I’ve seen huge mis-takes in my time and this would be another one. Let the Canadian have it,” he added.

Mr Paton predicted cashed-up WCB farmers would exit the industry or reduce their herds, putting more pressure on supplies.

“When Warrnambool did the float, Murray Goul-burn should have bought it then. It would be a huge mistake now.”

Koroit dairy farmer Harper Kilpatrick farmed in the UK for 20 years where he said he saw a once strongly regulated farmer orientated industry become fragmented after deregulation due to the power of the independent processors.

Mr Kilpatrick said he believed MG taking over WCB would set Australian dairy in the right direction. “It can only be good for

Australian dairy farmers,” he said.

“I think that farmers need to try to control their own destiny which is best done through the coopera-tive structure. This merger would also improve their ability to compete in export markets.

“This would put us in the top 20 global dairy companies and would get us moving in the right direction. The indus-try can’t rely just on the domestic market and has to look more at exports.”

Mr Kilpatrick said cooperatives were best placed to look after sup-pliers. “Private industry will look after sharehold-

ers whereas if it is owned by a co-op the focus is on maximis-ing milk price,” he said.

He said the level of debt proposed for the purchase was not concern-ing during an expansion phase for MG.

Toolong farmer and sup-plier of the local MG cooperative

in Koroit, David Parkin-son, said a better farm gate milk price should be an industry priority.

“From the long-term perspective for the indus-try, the milk price is the biggest issue that is hold-ing back dairy at the moment,” he said.

“If you look worldwide and at history, a strong locally-controlled coop-erative seems to achieve those goals the best.

“There are two sides to the argument and a for-eign company could invest new technology into the Australian industry and by and large do a good job, but in my opinion the best outcomes seem to be those controlled by local interests.”

Mr Parkinson added he believed all sharehold-ers have a duty of care to give careful thought about where they sell their shares for the long term betterment of the indus-try.

Supplier opinion divided by new $9.50 share bid

David Parkinson

“There are two sides to the argument and a foreign company could invest new technology into the Australian industry and by and large do a good job, but in my opinion the best outcomes seem to be those controlled by local interests.”

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6 // DAIRY AUSTRALIA AGM

Levy poll process under review

Joint $40m research boost DAIRY AUSTRALIA and the Victorian Government have each contributed $20m to a range of research and development projects designed to accelerate productivity growth in Victoria.

Under the five-year partnership, the DEPI and DA will each contribute $4 million a year over the next five years for targeted research.

This includes the creation of six new dairy research jobs at DEPI in Ellinbank, which Vic-torian Agriculture Minister Peter Walsh said would bring more world-class scientists to the Gippsland region.

“This agreement will help our Victo-rian scientists find new ways to improve the industry’s feeding systems, lift reproductive performance in our herds and increase soil productivity,” Mr Walsh said.

“Our researchers will develop new and improved feeding systems to maximise this potential and enable industry to increase pro-duction without always needing to increase herd sizes.

“We also know that declining cow fertility is a significant issue in dairying, and getting cows back in calf quickly is important to max-imise milk production.

“Our world-renowned dairy scientists at DEPI will focus on understanding and addressing the decline in cow fertility and increasing the amount of milk cows produce.”

Dairy Australia chair Geoff Akers said the $20 million contributed by Dairy Aus-tralia would seek to improve the profitabil-ity and resilience of Australian dairy farmers and ensure Australia’s international compet-itiveness based on optimised pasture man-agement.

“This will include a focus on maximising home-grown feed coupled with the efficient use of purchased feed inputs,” Mr Akers said.

The Victorian Government’s share of the funding will be provided as part of its Grow-ing Food and Fibre initiative, which is provid-ing an additional $125 million for research and development to boost on-farm productivity.

DAIRY AUSTRALIA will hold a separate review into its levy poll process, with the current system described as “cumbersome and a waste of resources”.

Retiring chairman Max Roberts told the crowd of about 200 at the Dairy Australia annual general meet-ing these comments were made by many farmers at the recent Dairy Australia constitutional review.

The last levy poll was conducted last year, following 51 dairy poll meet-ings across the country, where the recommended 10% increase in levies was approved.

The Levy Poll review will be held next year and will involve an inde-pendent chair appointed by the Dairy Australia board, at least two farmer representatives, a representative from Dairy Australia and Australian Dairy Farmers.

An expression of interest will be called to fill some positions.

Dairy Australia members elected northern Victorian dairy

farmer, Jeff Odgers, and re-elected Alan Grant and Bruce Donni-son to the Dairy Australia board. The pool of money available to pay directors was increased from $381,000 to $430,000. A total of 173 farmers voted on this motion, although all were entitled to vote.

All 11 changes to the organisa-tion’s constitution, proposed by the Constitutional Review Panel, were accepted.

The most significant changes include increasing the number of directors with dairy farming expe-rience from three to four, and limit-ing director tenure to a maximum of nine years (unless the AGM passes a special resolution).

The board also has the ability now to appoint a deputy chairman.

Mr Roberts said he was delighted the amendments to the constitution had been passed.

“Together with reforms intro-duced at last year’s AGM, the changes voted on will help make Dairy Aus-

tralia work even more effectively for the benefit of the nation’s dairy com-munity,” Mr Roberts said.

Dairyfarmer Geoff Akers, from Tallygaroopna in northern Victoria, was appointed chairman of the board following the meeting.

“I thank the board for their sup-port of my appointment and will strive to bring my broad experience in business, research and dairy farm-ing to the fore at Dairy Australia,” Mr Akers said after this appointment.

“I would also like to thank Max Roberts for his strong leadership as chair over the past seven years and wish him well in his future endeav-ours.”

Dairy Australia will host an Aus-tralian Dairy Investment Forum in Melbourne’s Federation Square on February 24.

Australian Dairy Investment Forum Organising Committee chairman, John McKillop, said the forum was needed as the Australian industry continues to be a focus for

domestic and international custom-ers, suppliers and investors.

“Over the past 12 months, the industry - both Dairy Australia and individual industry participants – has received an increasing number of enquiries seeking information regarding potential investment in the industry,” he said.

“The forum will provide an opportunity for those interested in Australian dairy to gather the latest news and understand the operating environment, outlook and innova-tion shaping the industry’s future. We have organised a conference pro-gram with an outstanding invited list of industry and government leaders to share their expertise, outlook and strategies.

“The event will also feature an exhibition area for further informa-tion exchange and meeting oppor-tunities and the one-day event will conclude with a gala dinner,” Mr McKillop said.

Registrations are currently open.

Outgoing chairman, Max Roberts, addresses the crowd of 200 at the Dairy Australia AGM.

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DAIRY AUSTRALIA AGM // 7

NORTHERN VICTORIAN farmer, Geoff Akers, will focus on the implementation of new research and technology on farm, as well as farm profitability in his new role of chair of Dairy Australia.

The Tallygaroopna farmer has had extensive experience and is passionate about dairy research, development and extension and the role this has in farm profitability.

His past experience has included work with Victoria’s then Department of Agriculture and at the Kyabram Research Institute.

He has also spent six years on the Murray Dairy Board, including four as chair; two years on the National Dairy Alliance Board; a director of Australian Dairy Farmers, a central councillor of the United Dairyfarmers of Victoria; and is a former chair of the Victorian Farmers Federation Water Council.

“We have to focus on farm profitability,” Mr Akers said. “If the industry is going to meet the opportunities that are present at the moment then all farms have to be profitable.

“We won’t grow as an industry if farmers aren’t profitable across the land.”

Mr Akers said there has been extensive development achieved and that now needed to be introduced and implemented on farm, which meant a renewed focus on extension.

“We are looking at the direction of Dairy Australia all the time, and the board is supportive of the plan we have in place, and is confident it can be delivered with the strong team under Ian (Halliday, DA managing director).

“We will continue to work with our farm extension officers and monitor them.”

DA will soon have

extension officers on the ground in each State to help them deliver these programs. It will also advertise for someone to produce and implement a business analysis program that can be utilised by all levy payers.

“DA has always run programs in that area – Taking Stock, and Tactics for Tight Times – but these programs have been run when there have been difficulties within the industry,” Mr Akers said.

“We’re making the change to ensure we focus on all farms, and improve profitability for all businesses.

“The aim is to get people to focus on their business, to see what makes it profitable.

“There are so many systems around Australia now, that’s why we need each farmer to look at their own business and the profitability drivers within it.”

Mr Akers admits DA hasn’t had the impact it has wanted in delivering these services. He said it will take a new approach, and is keen to get levy payers to take on greater ownership of the organisation.

“We want people to see themselves as members of DA and will ask the right people on how best to achieve that. We need farmers says to DA is our organisation.”

Mr Akers said if DA can help more farmers achieve farm profitability, it will lead to other changes in the industry.

“I want to see the industry grow, because it’s a good industry, and profitability at farm level will drive the entire industry.”

Mr Akers has always been interested in investigating new research and how it can improve production and profitability.

“I’m a big believer in R&D and getting it right, driving research dollars to get a result at the farm gate.

“There has been

Akers brings research focussome research and development work on feeding systems in the last 10 years but now we have to deliver that.

“There is R&D out there, at the CRC, on rye grass with greater persistence and 10% increase in quality. They’re big advances

for us at farm level, and we have to help get that to market and make it available.

“We need to ask ourselves how do we develop this technology and make it readily available.

“It will be easier to get the commercial

companies on side to take these advances to market if we can show them there is a big enough market so they can develop it and profit from it.”

Mr Akers runs 650 cows with his wife Natalie, who is a board member of Murray Goulburn. They have

two young children. He said the role will take him from home 2-3 days a week on average, a lot of that travelling through the different regions.

The board and senior staff will get to each of the eight regions once and hopefully twice throughout the year, he

said.They have a staff of

three that are up for the challenge of increased roles.

“It’s been good to see them step up. It gives me more confidence to serve the industry if I know they’ve got it under control at home.”

Geoff Akers

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8 // NEWS

Thriving in a changing worldTHE CONSTANT state of change in dairying doesn’t faze Janet Moxey.

“There has always been some drama or crisis in my experience in this indus-try. It’s just a matter of adapting, being prepared

to think differently and getting on with it,” said Janet.

She sees a positive future for dairying and her family’s enterprise Moxey Farms which is bedding down a herd expansion from 2000 to 4000 cows.

Drawing back from an active career in agri-pol-

itics, Janet is pleased to be spending more time at The Angle dairy at Gooloogong, about 40km from Forbes in central NSW.

“When I’m at home, I’m usually in the office,” said Janet whose three children and their partners are all actively involved in

running Moxey Farms.Her efforts on behalf

of the NSW and national industry have been recog-nised with an Outstanding Service Award presented by the Australian Dairy Industry Council in Mel-bourne.

The death of her hus-band Paul in 2001 was

a catalyst for her to get involved in industry poli-tics with the NSW Farm-ers Association Dairy Committee and Australian Dairy Farmers.

Janet and Paul started out in dairying on his fami-ly’s property at Richmond, NSW in 1985 and 15 years ago the family made the

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big decision to move to the Forbes region and begin expanding to 2000 cows.

“We made the move to be closer to feed and water security and open spaces,” said Janet. The family have since added to their holding and now dairy on 3200ha, about half of which can be irrigated.

They grow a lot of their own forage, cereals and silage, feeding pastures and a mixed grain ration.

“Having access to qual-ity feed is a huge issue for us with benefits right through the production system,” she said.

Their herringbone dairy has been expanded to 50 a side to cope with milking three times a day with 3500 cows through every eight hours.

Janet said the family had drawn a lot of large-scale farming systems experience from the USA.

“Someone is over to the States every year and we have two Americans working over here with us at the moment.

“We are always look-ing to innovate and take advantage of new technol-ogy to stay ahead in our business,” she said.

One of the challenges with growing their dairy to become a significant regional employer has

been people management.“Dealing with cows is

easy, but managing people has needed a whole new skill set,” she said.

Janet said the family was positive with its ethos of thinking differently and not continuing to do things the same way.

She has empathy for dairy processors who she said had taken the brunt of the retail milk price war.

“They’ve also had to change and adapt and get costs out of their system. This will be a positive for the future.”

The family enjoy a close working relation-ship with their processors with about two thirds of their milk going to Lion at Penrith.

After testing their herd for the A2 gene, Moxey Farms has become a significant supplier of A2 Milk for processing at Camden for the Sydney market.

“The diversification of our milk market has been good for us,” she said.

“My children are the fourth generation in the industry and the next gen-eration is coming along.

“We’ve built a business with the scale and efficien-cies to provide a future for our extended family in dairying.”

Janet Moxey

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NEWS // 9

Global prices rise despite growing supplyGLOBAL DAIRY prices contin-ued their rise at the first Global Dairy Trade auction for the month with a 3.9% lift in prices as demand contin-ues to outstrip rising supply.

Whole milk powder was up 3.4% to average US$5,035/t with forward sales positions particularly firm, as they were for skimmed milk powder which added 5.6% to average US$4,791/t.

“The forward curve is starting to point up a bit which is a positive,” BNZ economist Doug Steel told Dairy News Australia.

Very strong demand out of China and the Middle East – the latter likely buoyed by firmer oil prices – is driv-ing the market and to date, outweigh-ing the already growing and forecast to increase supply from the United States and Europe, as well as New Zealand.

“That’s what makes this auc-tion quite important. These buyers know there’s more production out there and the outlook for the next 12

months is for higher production and yet we saw higher prices.

“That suggests demand is increas-ing faster than supply.”

It also suggests a structural shift in the traditional cycle of dairy prices – the cycle is still there it’s just going to be centred on a higher level. Where that is going to be is the big question.

The strength of the Global Dairy Trade auction was bolstered by the recent addition of two large interna-tional dairy companies and, for the first time, a British dairy product.

Arla, a Scandanavian-based coop-erative, announced this week that for the first time it will start selling its British skimmed milk powder on the fortnightly auction.

The move is aimed at tapping into Chinese and Middle Eastern mar-kets where dairy prices are about 5% higher than European markets.

Global Dairy Trade director Paul Grave said Arla’s move follows two other large dairy players, Amul from

India and Euroserum of France.He says there are now five sellers

of skim milk powder on Global Dairy Trade and Arla will be added later in the year.

Mr Grave said 30% of its skim milk powder sales are now from non-Fon-terra sellers and it hopes to add more sellers in the future moving further towards the vision of having an inter-national dairy market.

He says it was good for Fonterra, which started the Global Dairy Trade auction and always had the vision of creating a market place and having a trusted milk price which could be used across its business.

Mr Grave says the extra sellers in the first auction of the month helped keep volumes near record levels at 52,000 metric tonnes.

Mr Grave says there were 200 bidders from around the world and its website gets 20,000 hits after an auction, indicating widespread inter-est in the event.

Supermarket code pure spinVICTORIAN FARMERS have dis-missed Coles and Woolworths “new” voluntary Code of Conduct as pure spin.

“Why are Coles and Woolworths laying claim to a new code, when they are already signatories to an existing voluntary code, which has failed?” Vic-torian Farmers Federation president Peter Tuohey said.

Back in 2000 the Federal Govern-ment established a voluntary Produce & Grocery Industry Code, overseen by an Ombudsman.

“The existing voluntary code has failed to help farmers and other super-

market suppliers,” Mr Tuohey said. “So why would anyone want to adopt another voluntary code?”

Coles and Woolworths already have representatives sitting on the existing voluntary Produce & Grocery Indus-try Code committee, which has done nothing to address market power.

“The evidence that voluntary codes fail is reflected in the fact that the Aus-tralian Competition and Consumer Commission is investigating 50 sup-plier complaints against the super-markets,” Mr Tuohey said.

“So what’s going on? What we’re seeing is both major supermarkets

launching a defensive strategy in the lead-up to the Federal Government’s root and branch review of the Compe-tition and Consumer Act.”

Small Business Minister Bruce Billson is due to release the terms of reference for the Act’s review before Christmas, with the review completed by the end of 2014.

“As far as the VFF is concerned we support a mandatory code of conduct, but ultimately want the Act strength-ened as part of the upcoming review.

“It’s not just about mandatory codes.”

Australian Dairyfarmers president,

Noel Campbell, said the draft docu-ment was belated recognition by the major supermarkets of a fundamental imbalance in the supply chain.

“ADF has advocated strongly for a mandatory Supermarket Code of Con-duct over the last two and a half years, and while the agreement falls short of that, it serves to highlight the diffi-culties many farmers are facing,” Mr Campbell said.

“We know the major retailers have been taking advantage of their market share to squeeze the profit margins of farmers and help inflate their bottom lines.

“In dairy’s case, $1 per litre milk as well as the rise of “home-brand” lines has had a devastating impact on the viability of many farmers across the industry.

“While the new draft code of con-duct includes restrictions on the major retailer’s ability to change agreements with suppliers and sets out guidelines for the treatment of branded and home-branded products, it does little to ensure a fairer farm-gate price.

“ADF will closely monitor adher-ence to the new code in future on behalf of farmers and others involved across the supply chain.”

Arla is one of three international companies to join the Global Dairy Trade auction.


10 // NEWS

Rising input cost cancel out low-cost advantageTHE AUSTRALIAN dairy industry has lost its low-cost advantage with the rise in input costs.

A new report from Rabobank reveals traditionally low-cost pasture-based dairying regions, such as Australia, have lost their cost advantage as input prices have risen, and now compete on the global market with a similar cost of production to producers with more intensive farming systems.

Report co-author, Michael Harvey, said global milk production costs have converged between dairy-exporting countries, as the traditionally low-cost milk producers have seen their pro-duction costs rise off the back of vola-tile global feed prices and the increasing use of feed in pasture-based regions.

Mr Harvey said lower-cost regions have already largely capitalised their efficiency gains in a high milk-price environment into the price of land and

other assets. Mr Harvey said there was therefore

a need to adapt to this loss of absolute competitive advantage in milk produc-tion.

“It is likely that optimal supply chain efficiency could at least partially miti-gate this loss,” he said.

“Efficiencies achieved downstream in milk processing and marketing via a strong route to market and estab-lished supply chain relationships will likely play a greater role in differentiat-ing competitive export companies and industries into the future.”

Mr Harvey says to ensure that com-petitiveness is based on more than just the cost of producing milk, the Austra-lian dairy sector will need to work hard to ensure that they stay ahead of the pack in supply chain efficiency, market access, marketing and sensible regula-tion.

Global milk production costs converge

Historically, coun-tries in the Southern Hemisphere, like Aus-tralia and New Zea-land, have been well known for their low-cost dairy exports.

Mr Harvey said that extensive pasture-based production systems, plentiful natural resources and low opportunity costs in alternative land uses gave this region a competitive advantage.

“Countries such as Australia and New Zealand had surplus milk produc-tion, relative to the demands of their small population base. Recognising that exporting was not a discretionary activ-ity for them, they developed focused

export strategies,” he said. “By contrast, dairy sec-

tors in the EU and the US were highly regu-lated, resulting in pro-duction costs at least 50% higher than the Southern Hemisphere

as recently as 10 years ago.”

However, Mr Harvey said, between 2002 and 2012, the local currencies

of Australia and New Zealand dairy exporters have strengthened 90 and 75% respectively, against the US dollar, accelerating the convergence of pro-duction costs and making US export-ers relatively more competitive. Traditional low-cost producers lose their edge

The cost of producing milk in typi-cally low-cost extensive pastoral pro-duction systems, such as those found in countries in the Southern Hemi-sphere, has increased since 2002.

Mr Harvey said producers in these lower-cost export countries have enjoyed buoyant returns and capi-talised them into high valued assets, primarily land, bringing on-farm pro-duction costs to levels similar to those in intensive feed-based dairy systems.

“Productivity, in terms of feed pro-duced per hectare, has increased but this has been well outpaced by land prices,” he said.

“Pasture or dairy land prices in Ire-land have doubled since 2002, peak-ing in 2007 at more than four times the 2002 price. In Victoria and New Zea-land, land prices have more than tre-

bled since 2002 and in Sao Paulo, Brazil, they have increased six-fold.”

Furthermore, the Rabobank report said farming systems in historically low-cost production regions have intensi-fied by lifting inputs, hereby increasing production, but at an additional cost.

“Higher milk prices and land prices have encouraged milk producers to maximise their existing assets – such as cows and milking infrastructure – resulting in greater use of purchased brought-in feed, higher on-farm stock-ing rates and increased production per cow,” Mr Harvey says. Low-cost Australian milk producers impacted by issues outside farmgate

A hybrid production system of a pas-ture base supplemented with grain is core of the Australian dairy sector and is supportive of the industry still being one of the world’s low-cost milk pro-ducers.

However, Mr Harvey said there are some relatively unique cost pressures being faced by Australia’s dairy value chain. These include a shortage of dairy labour and rising energy costs.

“While efforts are being made to combat these issues, they continue to damage Australia’s competitive edge,” he said.

The Rabobank report highlights that farm labour is scarce and expensive, adding to the difficulties the Australian dairy sector is facing compared to other, lower-cost nations.

Energy costs are another issue, even with the potential removal of the carbon tax.

“While the carbon tax only applies directly to large emitters, the cost burden is being passed through to end-users,” Mr Harvey said.

Michael Harvey

Traditionally low-cost pasture-based dairying regions, like Australia, have lost their cost advantage as input prices have risen.

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must accelerate through partnerships, such as the work with Dairy Australia.

“We have worked hard with Dairy Australia in the past year to benchmark the Australian dairy indus-try’s milk production stan-

dards against our SAC standards,” said Dirk Jan deWith, Unilever spokes-man. The industry was found 100% compliant.

Three specific gaps – in soils, biodiversity and waste – were identified,

and to remedy this Dairy Australia, Murray Goul-burn, Fonterra and sev-eral other dairy companies will work with 100 farms in eight dairy regions, “to show continuous improve-ment in gap areas,” said

Mr Halliday. “[We aim] to ensure

Australian dairy’s sustain-ability standards evolve and improve.”


NEWS // 11

Ice cream giant gives Australian farmers ‘green tick’ AUSTRALIAN DAIRY farmers have gained a ‘green tick’ from the world’s biggest ice cream maker.

Unilever has credited the Australian dairy indus-try with meeting its Sus-tainable Agriculture Code (SAC). So now all Austra-lian-produced milk helps the company meet its ‘sus-tainable sourcing’ goal.

“Dairy Australia is delighted to be the first dairy industry in the world recognised as meeting Unilever’s sustainability standards,” said Ian Halli-day, managing director of Dairy Australia.

“All credit to [Unile-ver] for taking an industry-wide approach.”

Dairy companies Murray Goulburn and Fonterra were among

those that prompted Uni-lever to work with Dairy Australia to see whether the industry’s production standards met Unilever’s worldwide SAC require-ments.

“We took an industry-level approach to avoid duplicative efforts across dairy companies’ milk suppliers and, once the results were in, to provide broader assurances about all Australian milk produc-tion,” said Mr Halliday.

Unilever owns Streets Ice Cream in Australia. Its brands include Magnum, Paddle Pop, Blue Ribbon and Cornetto.

The company has ambitious sustainabil-ity targets and has set a target of 100% sustainably sourced materials by 2020. To meet this goal Unilever

GENETICS AUSTRALIA and the Herd Improve-ment Co-Operative (HICO) have terminated merger discussions that have taken place for over a year.

Merger discussions have been ongoing since Sep-tember, 2012.

GA first announced it would explore a merger with HICO in December, saying a merger would strengthen and consolidate the herd improvement industry into the future and was vital to the successful future of GA.

A Heads of Agreement document was signed by the two chairmen on behalf of the respective boards, and a merger working group was formed to continue to work through the consolidation process.

However, in a joint statement, the co-ops said due to the legal complexities of merging the two co-ops, the exercise has been slow and costly.

The situation was further complicated by the very challenging conditions faced by the dairy industry over the past 12 months, the statement said.

As a merger was increasingly an unlikely option, it was decided that it would be in the best interest of the shareholders of each cooperative to cease the merger discussions.

Two months ago, Genetics Australia told Dairy News Australia that a merger with the Herd Improve-ment Cooperative (HICO) had not been ruled out, despite the sale of assets between the two parties.

It was announced at the time that GA had sold its Gippsland retail and services business operating from the Warragul, Leongatha and Maffra locations, to HICO.

It also sold its Western Victoria retail and services business operating from the Warrnambool, Terang and Timboon premises to National Herd Develop-ment.

When asked in October at the announcement of the sale of parts of GA’s business, GA CEO Eti-enne Veldhuis said the “directors of both companies involved will need to review and discuss the current MOU in due course”.

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12 // WORLD NEWS

Celebrating the real DieselWHERE WOULD farm-ing and transport be with-out the diesel engine?

Among all the high-tech electronics and modern gadgetry at the world’s biggest farm machinery show in Ger-

many earlier this month, a special tribute was paid to an industry pioneer – a bloke called Rudolf Diesel.

Agritechnica in Hanover featured an elab-orate display tracing his life and times complete with some of the earliest diesel engines that moved farming and industry from

the steam era. Rudolf Diesel who rev-

olutionised drive engi-neering by designing and inventing an efficient heat engine that still bears his name died 100 years ago in September 1913.

About two million diesel engines are still being produced around

the world every year to power farm machinery, cars, trucks and heavy vehicles, including ships.

Diesel devoted his life to the creation of an engine that would outper-form existing steam power and require less fuel.

His first patent was registered in 1892 and the

first large and bulky diesel test engine kicked into life in 1897.

Diesel engines were not used for farming pur-poses in his lifetime. After his basic patent expired in 1907, engineers at Benz continued to develop the concept further.

The technology was

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eventually refined and engines became small enough to fit into a vehi-cle. The Benz-Sending S6 equipped with a compres-sor-less two cylinder, four stroke diesel engine made

its debut at a German Agricultural Society exhi-bition in 1923 and within a year diesel powered trac-tors and trucks were in production.

THE END of milk quotas in Europe from 2015 will add another dimension to the global milk supply, says Fon-terra chairman John Wilson.

Mr Wilson said there are differing views on whether milk supply out of Europe will increase once quotas are lifted.

Given that EU’s milk consumption is relatively stagnant, he believes increased production from the bloc will end up in the global market to meet growing demand.

Fonterra‘s joint venture with Netherlands-based A-ware Food Group is an example of the co-op tap-ping into the changing EU dairy environment, he said.

Fonterra and A-ware Food Group are develop-ing a new cheese plant and dairy ingredients plant in Heerenveen in the north of the Netherlands. A-ware will operate a cheese plant and Fonterra will operate a dairy ingredients plant alongside it.

Cheese will be produced for A-ware’s customers in Europe and the whey and lactose produced will be processed into premium nutrition dairy ingredients for Fonterra’s global customer base. A-ware will be sourc-ing milk from Dutch farmers, who are expected to ramp up production when the milk quotas go. Mr Wilson said this could add another billion litres of milk to Fonter-ra’s global pool.

He expects global growth in milk production to be 0.5% higher than a year ago.

Global dairy demand is forecast to grow by 120 billion L by 2021, 40 billion L of that in freely traded markets – largely the emerging markets. New Zealand is expected to see 2% or 3 billion L growth during the same period.

Mr Wilson says this highlights the importance of Fonterra’s strategy to support New Zealand milk by ensuring access to global milk pools so we can accom-modate demand growth.

Current global demand for milk products is grow-ing at just over 2% per annum. In China, demand is expected to grow 7% by 2020 – but milk supply will grow by only 4%.

China’s dairy industry is changing rapidly, with evidence this year of consolidation at the farming and manufacturing levels of the supply chain, said Mr Wilson. – Sudesh Kissun

EU milk tipped for global market

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WORLD NEWS // 13

Improving Sri Lankan herd helps New Zealand growth

A Fonterra supplier in Sri Lanka. Under the deal, the co-op will help develop the country’s fledgling dairy sector.

A STABLE environ-ment in Sri Lanka for Fon-terra to operate in will be one outcome of the Dairy Cooperation Agreement between the New Zea-land and Sri Lanka gov-ernments, says Fonterra director and farmer-share-holder John Monaghan.

It will also help develop the local dairy industry in Sri Lanka which is Fonter-ra’s third largest market for whole milk powder.

Mr Monaghan believes the blocking of Fonterra products and protests against the cooperative in Sri Lanka earlier this year must be viewed against the background of Sri Lan-ka’s trade deficit where it imports twice as much as it exports. Over 70% of its milk is imported.

Helping Sri Lankan farmers to develop their own milk pool will con-tribute to stability.

“Fonterra welcomes the signing of the dairy agreement and we have been working with our Government towards this,” said Mr Monaghan, who has been in Sri Lanka representing Fonterra at the Commonwealth Busi-ness Forum.

“It provides an impor-tant framework from which we can work with the Sri Lankan Govern-ment to help the local dairy industry. We have unique capabilities and commitment where we can make a difference to

the Sri Lankan dairy indus-try, as we do in many other countries in the world.”

Fonterra already pro-vides a farmer education program to enhance pro-duction and quality. The demonstration farms are a further enhancement of that model. They are yet to be developed and a “stable environment” will be needed for that.

“In Sri Lanka we have 3000-4000 farmer sup-pliers and we want to enhance that. But to enable us to do more good in Sri Lanka we need to have a sustainable and profitable business. We recently faced a challeng-ing operating environment which caused temporary suspension of operations and we are recovering from that now.”

It makes sense to build Sri Lanka’s own liquid milk capacity because Fonterra wants to remain committed to that dairy market where New Zea-land has a 35-year history. In Sri Lanka Fonterra has a number-one position in full cream, growing-up milk and adult milk. It has two manufacturing

plants where it employs 750 people and it sends 60,000 tonnes of powder there.

“We are the fifth-largest collector of milk locally, that’s about 30,000L. They are mainly smallholder farmers. We had a progamme in place for some time where we have worked on strong farmer development as part of corporate and social responsibility. Six-teen years ago we started with 200 farmers and now we have 3000-4000.

“We need overseas supply but we also need a stable operating environ-ment for us to continue to commit and expand. We want to help them with demonstration farms and help them increase their volume production and quality and lend some of our expertise.

“The Sri Lankan Gov-ernment has a stated desire to become self-suf-ficient in milk produc-tion. It is in our interest to help with liquid milk and the quid pro quo is that we have that stable envi-ronment and be able to continue to import New Zealand milk powder into that geography.”

As a general observa-tion about Sri Lanka, Mr Monaghan says after years of civil war the Govern-ment “is now trying to win the peace”.

“It is a fast growing economy; they have had rates of economic growth since the end of the war in 2009 of up to 8%. It has

John Monaghan

Fonterra reliant on ChinaFONTERRA IS comfortable with putting all its eggs in one basket when it comes to trade with China.

Chairman John Wilson says he’s “very comfortable’ that 1 in every 5kg/MS produced on New Zealand farms end up in the Chinese market.

Speaking at a New Zealand confer-ence last month, Wilson was questioned whether it was safe to rely so heavily on one market.

Mr Wilson pointed out that Fonterra was also sending a lot of dairy products

into the Middle East and North Africa. But he was comfortable with export numbers into China.

“So we have no concern around the numbers we are sitting at the moment,” he told the conference.

He says Fonterra has “a very genuine exposure” in China.

“The supply/demand figures (in China) are real, the growth figures are real,” he says.

“What you are seeing is a dramatic transformation of an economy of 1.3 bil-lion people.”

Fonterra’s business in China includes ingredients, food service, con-

sumer business and milk production.Last year the co-op exported

400,000 tonnes of milkpowder. Over 50% of pizzas in China are topped with Fonterra cheese supplied by its ingre-dients business. Mr Wilson says the ingredients business is growing by 28% annually.

Recently Fonterra launched its Anchor UHT milk and Anmum infant formula brands in China. Fonterra also has dairy farms in various parts of the country.

Mr Wilson says authorities in China expect Fonterra to invest across the dairy industry.

‘When we are in China talking to ministers, at both national and state council levels and regulators, they expect Fonterra to invest across the dairy sector in China.

“And importantly around what we are doing around farms to improve milk quality, animal husbandry, grow-ing crops and providing scholarships for rural students

“So we are seeing that our invest-ment across China, in the first instance to promote ingredients out of New Zea-land, is highly valued.”

Mr Wilson said milk production in China, this year, is down about 20%

- mainly due to foot and mouth and other diseases. Some smaller farmers have also moved out of farming. Fonter-ra’s information is based on discussions it has had with China’s two main dairy processors – Yili and Mengniu.

Mr Wilson says the drop in Chinese milk production means greater demand for products from New Zealand.

Fonterra is also continuing to work in China to improve its branding after the false botulism scare. Recently it hosted a group of Chinese journalists who visited the co-op’s factories and its product testing facilities at Te Rapa, New Zealand.

SUDESH KISSUN

PAM TIPAslowed a bit to 6% but it is very strong economic growth and it’s an impor-tant market to Fonterra.

“We’ve made a consid-erable investment there… the new agreement is a very positive step in creat-ing a more stable operat-ing environment.

“It is one of Fonterra’s important markets glob-ally. It is Fonterra’s third-largest for whole milk powder and it’s a signifi-cant revenue market for Fonterra.”

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14 // OPINION

MILKING IT...

RUMINATING

EDITORIAL

Clouds of hopeCritics of the livestock and dairy industries that say cows are detrimental to the environment should wash their mouth out�

Our cows may be actu-ally helping to make Earth a cooler place� A team of 79 scientists writing in the UK journal Nature last month address the puzzle of how up to half the clouds in the sky are formed�

They found that humans play a significant role mainly through pastoral farming�

The 79 scientists from the renowned Cern research laboratory in Switzerland show for the first time how gas vapours, mainly from animal husbandry, can react to create the essential tiny particles around which the condensation droplets that cause clouds to form�

Clouds are by far one of the most important controls on global climate because they reflect back to space energy from the sun that would otherwise heat Earth’s atmosphere�

Got milk?

Taking inspiration from the pinup photos of the 1940s and 1950s, a London-based photographer, Jaroslav Wieczorkiewitz, created incredible images by layering hundreds of snapshots on top of each other�

Models were splashed with milk for each individ-ual photo, snapped with high-speed cameras�

Each shot required hours of patience, as none of the ‘clothes’ you see here were illustrated� The series will be made into a 2014 calendar�

Get on round backTo bring in the cows for milking, dairy farmers worldwide use everything from specialty dog breeds to quad bikes�

Now, researchers at the University of Sydney have come up with a game changer – a robot cowboy named Rover�

A video by the university shows it bringing a herd of cows from field to dairy for milking�

The cows were not bothered by the robot’s presence�

This is seen as nec-essary for the broader adoption of robots in the dairy industry to help with employment problems�

Rover was adapted from a robot used to moni-tor trees in a fruit orchard�

Get a move onAt this time of year, as the temperatures should be getting warmer, Australian farmers have to deal with the odd snake sunning itself in a surprising place�

We’re not sure what would be harder to move – a brown snake or this bovine, very content on a warm car bonnet in Russia�

Mind you, if she was one of your better milk producers, you’d probably leave her alone and walk into town�

With that, we wish all our readers a very happy Christmas� Stay safe around the farm, and enjoy the festivities of the day�

We look forward to bringing you all the news that’s fit to print as we return in 2014�

The United Dairyfarmers of Victoria has found its voice and stepped into the leadership vacancy in the Australian dairy indus-try.

Spurred by an issue vital to the industry’s future – the sale of Warrnambool Cheese and Butter – the UDV has spoken on behalf of farmers through the national media; organised forums; and spoken directly to Federal Ministers in Canberra.

It’s fair to say its view – that WCB should remain in Australian hands - has been heard by many.

We have said for years that the dairy industry needed someone to fly the flag; to fight for its interests.

Murray Goulburn managing director, Gary Helou, shook things up when telling the former Labor Government to get off their bums and sort out a Free Trade Agreement with China.

He was acting in both the interests of the national dairy indus-try and his cooperative, but it was good for dairy.

Now, the UDV – through president Kerry Callow and vice-pres-ident Tyran Jones – have put pressure on the Federal Government through a vocal campaign.

It was clear on their visit to Canberra that some of their com-mentary made certain Federal Members uncomfortable.

That’s a good thing. If the pressure’s not kept on Treasurer Joe Hockey, he will do what’s best for the Coalition, and not neces-sarily the country. The rushed approval of Saputo’s bid, and the awkward reasoning behind knocking back ADM’s proposed take-over of GrainCorp attest to this.

Early signs for this Government show it will react to public opinion, which is why it’s crucial that UDV maintain a strong and consistent message in public – through the media – and behind closed doors in Canberra.

When the national media wants to know why a Saputo sale is bad for the industry, Callow and Jones have been there to tell them.

When Hockey cleared Saputo’s foreign investment application months before MG could state its case to the Australian Competi-tion Tribunal – the UDV asked why was this allowed, both to the media and to Government officials.

Without a consistent message, the dairy industry would not be represented in a debate crucial to its future.

It was important that somebody stood up for the industry and full credit to the UDV for doing so.

The UDV has found its voice

Advertising�Chris Dingle 0417.735.001

[email protected]

Editor��Stephen Cooke 03.9478 9779 or 0427.124 437 [email protected]

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OPINION // 15

THE RELEASE last week of a voluntary code of conduct between the giant supermarkets Coles and Woolworths and the Australian Food and Grocery Council is at best belated recognition of the fundamental market imbalance in the Australian food supply chain.

This document is a clear admission there is a serious imbalance in market power between the major supermarkets and their suppliers.

It does set out to address a considerable number of supermarket practices that are not fair and reasonable.

But there are still other major issues that are not tackled in any way, meaning it appears to be at risk of failing dairy farming families who have been disastrously impacted for almost three years by the supermarket milk price war.

While the code is voluntary, when a party signs on to it the code then is technically enforceable by the ACCC.

The ACCC, of course, has in the past shown itself to be not only legislatively unable but also seemingly ideologically unable to

tackle the supermarkets’ domestic market dominance, while having no qualms in limiting farmers’ ability to address the market failure issue.

The ongoing weakness of this process is yet again seen in the dispute resolution procedure, where a “code of compliance manager” is to be appointed by the large

retailers, which obviously means then that they are not at arms’ length from the supermarkets in managing the process.

The biggest issue that this voluntary code does not address at

all is the outlawing of discriminatory pricing.

This major issue is at the core of the practices that have been damaging the domestic fresh milk industry.

Another key fault in this code is that it is voluntary, which is similar to the path taken in the United Kingdom where they found the approach to be as effective as introducing a voluntary speed limit on roads. They are now moving to a more mandatory and enforceable approach.

Realising this, QDO and ADF have advocated all along for a Mandatory Code of Conduct overseen by an Ombudsman with the power to investigate and issue public warnings

and financial penalties.

The QDO and ADF also advocate that the mandatory code needs to ensure that supermarkets shall not take advantage of their market power for the purpose, or with the effect or likely effect, of eliminating or substantially

damaging a competitor; preventing the entry of a person into the dairy item market; or deterring or preventing a person from engaging in competitive conduct in the dairy item market.

Our proposed code also sets out that supermar-kets cannot set the price of home brand and branded products in a particular product type in order to specifically advantage the sale of home brand prod-ucts where the supermar-ket cannot substantiate a difference in the cost of procurement between the home brand and branded product.

We also strongly recommend that the code include specifications around minimum shelf space requirements for branded products and other safeguards for suppliers.

While this draft volun-

tary code does set out to restrict the major retailers’ ability to change agree-ments and sets out guide-lines for the treatment of branded and home brand products, it does little to ensure a fairer and more sustainable farm gate price for dairy farmers.

This draft voluntary code will now be analysed by the government and the ACCC before public comment is sought.

While QDO and ADF will provide strong input into this process, and there will also be an opportunity for farmers and other interested parties to make their voice heard on whether this

voluntary code is good enough to fix the lack of market power that the farm sector is battling

against. • Brian Tessmann is the Queensland Dairyfarmers Organisation president.

BRIAN TESSMAN

Voluntary supermarket code fails to address real issues

There will also be an opportunity for farmers and other interested parties to make their voices heard on whether this voluntary code is good enough to fix the lack of market power that the farm sector is battling against.

The UK is moving to a more mandatory and enforceable approach after their voluntary code failed.

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MURRAY GOULBURN recently announced plans to alter its structure to allow the company to source exter-nal equity capital. As the MG board and management get on the road to explain their intentions and the new features, it is likely this move will be met with some of the traditional resis-tance.

Many have called the contest for Warrnam-bool Cheese & Butter (WCB) a major water-shed event for the indus-try, but I would suggest the operational and capi-tal transformation of MG to be a much bigger deal. Make no mistake; this will affect all dairy farmers.

If MG is to have any chance at achiev-ing the shimmering target of being a much larger, globally relevant business, and realise additional value to the tune of $1/kg milk solids from the market, it simply has to have better access to cap-ital and that includes equity capital.

Australian dairy’s expensive supply chain based on small, aged plants and inefficient haulage weakens the advan-tages we might enjoy based on mostly cost-competitive dairy farming.

The challenge for MG is to deliver both volume and unit-value growth. Sustained improvements in unit prices of dairy products won’t come unless the company is a much bigger and more rel-evant supplier to export customers. But future success won’t come from growth

for growth’s sake – MG must move well up the value scale to be a sup-plier of higher precision ingredients, nutrition-als, and high-quality, long shelf-life UHT milks. These products will be made to increasingly pre-cise specifications that not only require better milk quality to enter its

factories, but up-to-date technology installed in those factories.

It will most likely require MG to also invest more into in-market facilities and relationships to secure that higher unit value.

Current customers need MG to grow with them as they meet the expanding demand for nutritional foods in devel-oping markets in Asia and the Middle East – not remain a company puttering along processing no more than 1.5bn litres of milk into exportable products.

Proposals to introduce an external investment vehicle and a mechanism for shares to be traded amongst MG sup-plier-owners are critical to establishing a permanent and expanding equity cap-ital base beyond farmer owners. This can underpin the funding for current and future investment plans.

In developing and selling the path to such a future model, MG will be walking down a fine line that Fonterra has dem-onstrated through its ground-breaking restructure over the past five years. Yes, only time will tell whether the Fonterra model will work but it has gone well in its early days. It is a model that provides a long solution to underpin a long-term game plan.

MG will put its model out for dis-cussion in a vastly different setting to Fonterra’s in New Zealand. Given the contest for suppliers, I would expect that the MG scheme will contain a fea-ture allowing it to welcome all-comers into the supplier-shareholding ranks prior to qualification for the new struc-ture to commence. This could provide an interesting spin following the even-tual outcome of the WCB contest – farmer shareholders who sell-up WCB could take a second bite through MG shareholding.

Hopefully the debate about this important change will focus on the right issues.

The core values of the coopera-tive are what are important to the true believers, and that won’t change – sup-pliers retaining control of their process-ing business; keeping skin in the game beyond farmgate; and providing lever-age in setting milk value.

Hopefully the smaller peripheral and operational policies and issues won’t distract from this compelling step.

The board and management must continue to make profitable decisions based on business outcomes rather than perceptions of fairness and equity. It must operate – and demonstrate - a governance model with a board that pos-sesses the skills and experience required to balance the needs of a diverse set of investors.

However, changing capital struc-ture might improve the balance sheets of supplier-shareholdings by putting a market value on the $1 MG share, but that alone won’t cure the underlying malaise in milk supply.

For MG’s long-term plan to succeed, it must bring its current suppliers on a growth journey with it. Milk producers have to be convinced that a bigger indus-

try will be a better place – a better place to build wealth, attract more invest-ment, get better support from Govern-ments, build more meaningful careers and – as a result – have more reward-ing lifestyles. Like they have over the Tasman.

Milk supply hasn’t shown the capac-ity to grow in the past decade. Dairy companies have grown milk supply by pinching milk from each other, by tweaking pricing structures rather than leading their suppliers into a sustained growth phase.

I have heard complaints for many years about MG’s failure to deliver – from both suppliers and non-suppliers. MG wants to change – and it needs to - if it is to be a globally relevant business in future.

For it to do so, all stakeholders need to open to a conversation about new structures and ways of doing business that enable it to deliver value and take the industry forward – as only a large scale, high performing farmer-owned business can. • Steve Spencer is a director of Freshagenda, 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.


16 // AGRIBUSINESS

FRESH AGENDASTEVE SPENCER

Capital change for good

THE FRESHAGENDA EXPORT INDEX

FRESHAGENDA’S EXPORT index - a weighted basket of Australia’s export product mix converted to local currency – reached 219 points at the beginning of this month.

This is the highest point for the index since October 2008, when the impacts of the global financial crisis were washing through the international dairy market, post its historic boom.

A detailed look at the index’s composition then and now highlights the vast differ-ence in the dairy market situa-tion Australia’s farmers face at the moment.

The last time the index was at this level, the Australian dollar was equivalent to 62

US cents, whole and skim milk powder were averaging $US2,850t and $US2,650/t respectively, cheese was sell-ing for $US4,200/t and butter for $3,850/t.

At the beginning of De-cember 2013, powder prices are around 80% higher, while butter and cheese have recorded more modest rises of 6% and 13% respectively in nominal terms. The big differ-ence is that the Aussie dollar remains stubbornly above 90 US cents.

The current situation highlights the huge impact of China’s powder demand and the fact that internal short-ages are keeping buyers in the

market at strong US dollar prices, even as global supply recovers.

The international market remains in tight balance and has sustained relatively high

commodity prices for some time - contrast this with the sliding market conditions of 2008.

Now all we need is Aussie dollar to take a dive.

MG wants to change – and it needs to – if it is to be a globally relevant business in future, writes Steve Spencer.

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AGRIBUSINESS // 17

Past season continues to take toll on milk productionAUSTRALIAN MILK production ended the four months to October 2013 about 4% down on the same (July-Octo-ber) period last season, with the month of October nearly 5% below 2012 levels.

The difficulties experienced by many farmers in 2012/13 were never going to disappear overnight on July 1, so the negative growth rates of the initial months of the season were not unex-pected.

However, the October result was sur-prising in its severity, and whilst a variety of factors have been involved, it illus-trated that the effects of 2012/13 have lingered longer than many expected.

The data showed that milk intakes in all states have peaked lower than last year; northern Victoria is the only region maintaining positive growth.

Two months ago, this column took stock of the evolving 2013/14 season from a market point of view, outlining the factors driving the current strength in farmgate prices and noting the like-lihood of a global production response.

This month, we take a closer look at the Australian production season to date, and in light of the results to Octo-ber, outline Dairy Australia’s revised forecast for total 2013/14 milk produc-tion.

With global dairy markets riding high and processors making significant investments in new and existing pro-cessing assets, their ability to utilise ‘stainless steel’ capacity is as important

as ever in influencing their ability to pass on those returns to farmers.

The continuing strength in dairy commodity markets following the sharp recovery of early 2013 has allowed exporting manufacturers and other pro-cessors with export-linked pricing to top up farmgate prices accordingly.

However the first four months of 2013/14 have delivered less than encour-aging trends in national milk produc-tion, effectively demonstrating the difference between market movements and the physical realities of production in a biologically based system where returning pasture, cows and cash flow to productive health takes a little longer.

It’s not all about last season though. Adverse weather has played a constrain-ing role – particularly through northern NSW and Queensland where increas-ingly severe rainfall deficits have under-mined pasture and crop production, although widespread rainfall recently brought some improvements.

WA has seen better rainfall since a dry winter while in southern regions on

the east coast, colder weather in Octo-ber and early November slowed pasture growth after an initial September spike.

Temperatures are again rising in the south-east however, and conditions are generally favourable. Physical factors (in-calf rates last season, cost of replace-ments, pasture damage), cash flow con-straints (limiting fertiliser, seed and grain purchases) and dented confidence are all playing a part in limiting expan-sion – to differing degrees on a farm by farm basis.

Taking account of the above factors in conjunction with the production data to date, Dairy Australia has reduced its forecast for milk production to 9.0-9.2 billion litres for the 2013/14 season.

This implies that production will be between the same as and 2% lower than last season. It also accepts the fact that with a peak well below that of recent years the outcome of produc-tion rebounding sufficiently to recover foregone milk volumes this season is unlikely.

As the chart shows, the revised pro-jections do assume improvements to current trends – but this is supported by forward indications.

Additional rainfall and retained soil moisture associated with the colder weather will be beneficial to pasture growth as temperatures increase, the summer/autumn climate outlook is rea-sonable, the feed price outlook is favour-

able, and the farmgate milk price has further upside potential.

Healthy late-season milk cheques and cleared creditor lists are likely to provide more latitude for farmers to incrementally increase inputs to capi-talise where margins are favourable.

In addition, the sharp drop-off in production from January last season will boost the comparative growth rates for the last six months of this season, assuming average conditions.

Most processors have reported that the lower peak in milk intakes has subse-quently plateaued, resulting in a smaller but longer peak than expected. • 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

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18 // MANAGEMENT

How will you measure your year?SEASON’S GREET-INGS and a special greet-ing to those who have to milk over Christmas.

I’ve only milked five times over Christmas in my 30 year dairy career and the Christmas morn-ing milking was OK but

milking on Christmas afternoon was a killer and I reckon Boxing Day morn-ing was even worse.

I’d be keen to hear how families deal with the excited kids who have had to wait for you to get in after milking to open their presents.

Several have to answer the question “did you see

Santa?” and I’ve asked a few friends how they answer that question. They range from “no he must have come before I went out to milk because the gifts were round the tree when I left” or “I think I heard the neigh of Rudolph as I was milking the second row”.

The end of the year is

always a time for review and while the financial year end is six months’ away somehow January 1, the turning of the year, is a great time to reflect on how well the decisions you took during the year have gone and to plan next year.

Some businesses have professional monitoring and benchmarking sys-

tems that measure their business performance against annual plans, but others use a less formal review process to improve performance each year.

A general review ques-tion to ask is “How could I improve?” but that is very broad and not spe-cific enough to extract the smaller business improve-

ments - the one percenters we need to make this year more efficient than last.

Within the broad question above are three smaller ones; a) what did I do that I shouldn’t have done, b) what didn’t I do that I should have and c) what did I do that I could have done slightly better – often in this group are those small one-percent-ers?

This review process is easier if you know what you were aiming for out of 2013 at the end of 2012 – did you make a plan, did you write it down?

If you did it will be easier to review how you’ve travelled these last 12 months.

Another friend, a Kiwi, says to me that at one level “dairy” is very simple – keep the milk produc-ing units (the cows) fit, healthy and breed-ing annually; put food in at one end, get staff to remove milk from the other and make sure the cost of the inputs are less than the income from the outputs.

Said quickly that appears to outsiders the main game but those legendary posters that our levy has invested in describe hundreds of skills an average dairy farmer has.

For my Kiwi mate though, he broadly reviews his business against cows, feed, staff and money.

In your review process you might want to know if you produced and fed the optimal amount of feed off your land.

Did you add to that a profitable amount of bought-in feed; supple-

ments, fodder and agist-ment?

Did you keep the shed in tip top nick so your milk stayed in the top band all year? The review ques-tions go on and on.

All this work you undertake and the review is ultimately meant to deliver the goals of your family at the core of most of our businesses – those might be a healthy, sat-isfying life, well rounded happy kids to make their way in the world and for most, enough to live off and to put some away to build your wealth.

I’ve been doing a piece of work with a farm-ing family who came into dairy nine years ago with some management skills from another industry and some farming skills from a beef and sheep property. They had about a quarter of a million dollars to start their dairy farming adven-ture and are now worth $2.5m.

They are hungry for new skills and knowl-edge and their annual New Year’s resolution is “every night try to go to bed less stupid than we woke up!” What will yours be for 2014?

I hope you have a fun Christmas and a prosper-ous New Year and if family are visiting and with you on the farm over the holi-days, remember to keep them safe – booze, bovines and bikes don’t mix.• Former WestVic Dairy chairman Mike Weise is now consulting, retaining his spe-cialties in dairy extension and business development and branching into direc-torship and mentoring busi-nesses. Ph 0423 716 453.

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MANAGEMENT // 19

Designer diets for dairy cowsRESEARCH BY the FutureDairy team sug-gests that individual feed-ing systems can be used to customise each cow’s grain-based supplement according to their access to pasture.

FutureDairy researcher, Dr Cameron Clark, said the digestion of grain-based concen-trates fed at the dairy is affected by the timing and quantity of pasture intake.

“Our findings sug-gest that when cows are offered more than 5kg/DM/day of grain-based concentrate and access inconsistent levels of Kikuyu pasture deple-tion, the milk production response to grain-based concentrate decreases. Current work is relat-ing these findings to cows offered ryegrass,” Dr Clark said.

With a conventional dairy, the whole herd leaves the paddock to be milked, and the cows arrive at the next break after milking across the next few hours (equivalent to the milking period).

Previous work has sug-gested that pasture allow-ance is depleted by about 40% during the 2-3 hour period between the first and last cows arriving in the paddock after milking.

Cow order through a conventional dairy is quite consistent, based on their dominance position in the herd.

So the first cows through the dairy will

always be the first to reach the fresh pasture and the later ones to be milked will always arrive to depleted pasture at the new break.

Cows typically graze pastures in layers from the top to bottom with the first cows arriving at a break usually accessing greater protein and lower fibre than the last cows to arrive at an allocation.

In this situation, farm-ers with the facilities for individual feeding could consider adjusting the ratio of protein to energy according to the individual cow’s milking order.

“The ration for the cows that enter the dairy towards the end of the milking session could be adjusted to compensate for the lower quantity and quality of pasture that is available on their arrival at the paddock.”

This approach – design-ing the diet for individual cows – is referred to as dif-ferential feeding.

Differential feeding can also be applied to cows in a grazing-based automatic milking system. All AMS have individual cow feed-

ing systems, so it may be possible to use the timing that cows access pasture to differentially feed cows according to individual cow data collected by the AMS.

In an AMS, cows volun-tarily leave the paddock to be milked and then arrive at the next break at vary-ing times of the day and night.

Rather than moving to the dairy in a single mob twice a day, they move individually or in small groups, anytime through-out the day and night.

Dr Clark said that some AMS cows learn when the next fresh break becomes available each day and move to the dairy accord-ingly.

“In theory, those cows have almost unlimited access to fresh pasture. But the cows that arrive at the new break up to eight hours later will have less pasture, of lower quality, as the leafy material will have been eaten by the cows that arrived earlier,” he said.

“Only a relatively small proportion of the herd will

FARMERS SHOULD seek the advice of Fertcare accredited fertiliser suppli-ers before making what is one of the major purchases of the year.

This was the message from Incitec Pivot Fertilisers’ technical and devel-opment manager, Charlie Walker, at the Fertilizer Australia conference in October.

Mr Walker said the value of the right support and advice from a Fert-care accredited fertiliser supplier could not be underestimated.

“Fertcare is promoting productivity and at the same time helping safeguard Australian farmers from crop damage, food safety and environmental issues arising from the misuse or improper handling of fertilisers,” he said.

Fertcare is a national training and accreditation program for all fertiliser and soil ameliorant businesses and their staff. It is designed to raise the skills and knowledge of everyone involved in the importing, manufacturing and distribu-tion of fertilisers.

It is a joint venture between repre-sentative bodies Australian Fertiliser Services Association and Fertilizer Aus-tralia.

Mr Walker provided three scenarios to illustrate how Fertcare training and accreditation might prevent serious con-sequences arising from improper fertil-iser use or handling.

“For example, Fertcare level A train-ing alerts staff to the importance of unloading fertiliser deliveries away from creeks, gullies and waterways, prevent-ing potential losses to the environment,” he said.

“Fertcare level B training educates sales staff about important food safety issues, so that, for example, vegetable growers who need to maintain industry certifications are always provided with fertilisers which are low in cadmium.”

Mr Walker said Fertcare accredited advisors (FAAs) helped raise awareness

of crop production problems such as seed burn and were a valuable resource for farmers, providing advice about the right fertiliser choice, rate, application method, frequency and timing.

“Regular audits keep FAAs on their toes, so farmers can expect fertiliser recommendations to cover all produc-tion and environmental considerations,” he said.

Paul Keevers from Tableland Fertil-izers on Queensland’s Atherton Table-lands is a Fertcare accredited advisor.

Mr Keevers said farmers in his region were under increasing pressure to dem-onstrate their sustainability and be more efficient as input costs increased.

“As a Fertcare accredited advisor, my customers can have confidence that my fertiliser recommendations will help them meet their environmental respon-sibilities, conform to legislative require-ments and promote productivity,” Mr Keevers said.

Incitec Pivot Fertilisers maintains its Fertcare accreditation by arranging the appropriate level of training for opera-tions, customer service, sales, agronomy and marketing staff.

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Charlie Walker

consistently gain access to either stale or fresh pas-ture.

“Most cows gained access to pasture at vari-able stages of depletion when their traffic is mon-itored over a reasonable period of time.

“Our next step is to evaluate whether the ben-efits of this approach will outweigh the costs.”

Individual feeding systems could be used to adjust a cow’s diet according to her access to quantity and quality of pasture.

The FutureDairy team has discovered that the grazing and milking routines of cows influences the state of pasture that cows access, and their milk response to grain.

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20 // MANAGEMENT

Conserving water by shutting down pasturesNORTHERN VICTORIAN farmer Merv Koch has reassessed his feed base in the wake of last year’s long, dry summer, adding more lucerne crops and planting new permanent pas-ture varieties that can be shut down in summer.

Mr Koch, who is running 500 pre-dominantly Holstein cows with his wife, Bonita, on their Tongala farm, said the return on the water used to keep permanent pastures active last summer was inadequate.

As a result, he will plant less per-manent and annual pastures, and add crops that will enable him to produce bulk feed from their water.

Lucerne and millet crops have also been expanded with the aim to have them on one-third of the farm over the next few years to maintain herd protein levels through summer. It is also a pro-ductive way of cleaning up paddocks, with more barley grass creeping in since the drought.

“Growth of lucerne under extreme heat is still well above other permanent pastures we’ve grown in the past,” Mr

Koch said.It has been a relatively cool spring in

northern Victoria, but if summer tem-peratures rise to those felt last year, Mr Koch will try shutting some of the permanent pastures down and re-start them in early autumn.

“We will leave a bit of length on them and let them brown off, on the under-standing that with some water they should recover and respond alright.

“If we can do that, without having

WHO: Merv and Bonita Koch WHERE: Tongala WHAT: Pasture shut down

MERV KOCH recently pur-chased a disc mill to crush grain for his cows to eat in the dairy and has been extremely happy with the consistency of crush.

“We were using a roller mill, and found it good while the rollers were sharp. You tend to push them further and further into their life span, because the cost of rebuilding rollers isn’t cheap.

“You push them a lot further, and end up with an inconsistent crush in the grain, and quite a bit of grain passing through cows not crushed properly.”

The Attrition Disc Mill, from Northern Feed Systems, has a screen to clean stones and other irritants from the grain. Mr Koch said replace-ment of moving parts could cost as little as $1000.

Mr Koch said he has not

found any grain in the dung since moving to the disc mill.

They put 1.4 tonnes of grain through it each day, crushing a ton an hour. Cows receive 3kg of grain a day in the dairy.

“We used to put it in a mix-er wagon and feed it on the pad but in the dairy we know every cow is getting its grain and there is less wastage.”

Grain is bought direct from a grower, with wheat the preference unless barley prices are cheaper by $50 a tonne.

“When we started looking at disc mills, I was looking at who would be there to service it at the end of the day.

“We have dealt with Northern Feed Systems for years because of their service, so I was pleased to find out they manufactured them.”

to redrill permanents every year, that would definitely be a bonus.”

Mr Koch has planted new varieties of permanent pasture, including Ultra, which he said are good at withstanding being shut down and responding. Other northern Victorian farmers had success with this method last summer.

“I was disappointed last year with the growth I achieved from the water I used on my permanent pastures during

the hot summer.“If we can stop watering for a month

or so, and then fire them up again in early March, when the heat is gone, it will be very beneficial. Even if you lose a few plants and have to use a bit of extra seed, it’s not at the same cost of replant-ing a permanent stand.”

Lucerne had been cut by late Octo-ber and was being grazed.

“The cows love that and they milk extremely well. It provides a really good

base for them protein wise, and when you combine it with millet, which is lower in protein and energy, it provides a good balance.”

Mr Koch expects 3-4 years from his lucerne stands when used as a grazing crop. Some stands are four years old and look as good as the first year.

“We are achieving good growth right through to the end of April,” he said. “It limits us over winter, as you have to stay off them, so we’re toying with the amount of area we can plant to lucerne.

“The balance is when winter comes and the stocking rate over the rest of the farm is that much higher again. “

Mr Koch said the success of millet means he is considering planting more each year.

However, he warns the right balance between millet, lucerne and other pas-tures must be achieved to maintain milk production levels.

Disc mill produces finer crush

“We’ve tried a few different things over the years and millet crops have been quick to establish and get going, and are water efficient in hot weather.

“We have the first grazing just before Christmas, and graze them every 10 days, until the end of March. It helps that feed gap.

“It’s the equivalent to feeding out a bale of hay, but is cheaper and more efficient.”

The Kochs bought their farm five years ago and immediately battled two years of drought and meagre water supply.

“It took 2-3 years to get our pasture and lucerne crops established again after the drought, but milk prices have probably been our biggest battle over the last year or so.”

Last year’s milk prices saw them reduce their herd from 600 milkers down to 500.

“With last year’s low milk price, it made sense to get rid of rubbish cows and cull cows, than milk them, and pay for feed at a higher price.

“If a cow has a high cell count and is susceptible to mastitis, and feed costs are high, or you don’t have feed, what’s the point of milking those? We ensure our fertility is good so we can replace them.

“We choose two or three bulls each year and look for high daughter fertil-ity.”

Numbers will edge up to 600, which Mr Koch said is the right number for the feed they can grow on farm. They bought in 40 fresh calvers this year because they can make money from them.

“Last year wasn’t a year to be high stocked. This year, if the milk price ends up where we hope it will, it will be worth increasing cow numbers.”

Mr Koch, originally from New Zea-land, keeps an eye “on what’s happen-ing over the ditch”.

“There payout converted to Austra-lian dollars at the moment is well over $7, so we have a fair way to go before we get there.

“Somewhere near the close of the season, I hope we’re closer to that $7 mark as that’s where the international market is.”

Bonita and Merv Koch with their daughter, Amber.


MANAGEMENT // 21

Composting for soil type critical for right resultOVER THE last few years there has been a steady movement towards bio-logical dairy farming prac-tices like use of manures, composting and reminer-alisation.

Producers have begun to realise that what we have been told about only needing nitrogen is not the complete picture.

Composting is one of many ancient farming practices that has been used for around 3000 years. Its role in improving the profitability of your business cannot be under-estimated. What to do with your unwanted wastes and local resources

Have you ever con-sidered the value of that waste material around the farm? Most of us ignore these piles until either they get too big or cash-flow has forced us to look at alternatives. This is what happened in 2008 following the huge hike in oil and fertiliser prices. Farmers began search-ing for alternatives, recy-cling perceived waste and using local resources. It was the beginning of large scale on-farm compost-ing and the germination of common sense.

Some of the local resources that can be used for on-farm composting include:

■ Stockpiled cow manure ■ Brought in chicken and

pig manures ■ Spoilt silage or hay ■ Spoilt feed ■ Separated effluent

solids ■ Liquid effluents and

washdownsWhy produce quality compost?

It’s really a “no brainer” why dairy producers should be getting into composting and recy-cling of what are perceived waste products. Some of the benefits of producing quality compost include:

■ The valuable humic and fulvic fractions pro-duced in quality com-post increases water use efficiency by up to 50% making your pas-tures and crops require less water. Humus holds up to 20 times its weight in water and acts like a sponge.

■ By building this soil humus, the Cation Exchange Capac-ity (CEC) of soils can be increased by up to 70%. The CEC of a soil is a measure of the total amount of nutri-ents held in the soil. This means that with the addition of qual-ity compost, the soil can hold more nutri-ents and make these available to plants. As plant stress is primar-ily driven by nutrient and water availabil-ity, points 1 and 2 are essential for financial success.

■ Major reduction in weeds - weed seed doesn’t live through a composting process.

■ Applied fertilisers and minerals are made more bio-available when applied with quality compost. This results in less leach-ing of nutrients and improved financial out-comes. Reductions in your fertiliser bill of up

to 25-33% is not uncom-mon.

■ The soil becomes more friable leading to reduc-tions in fuel by up to 25%. One example was a farmer who increased the speed of rippling his paddock with a Yeo-mans from 4km/hr to 8km/hr. This was due to the softening of the soil.

■ There is an observed even production in pas-ture growth. There are less variations across the paddock on the same soil type.

■ Increased Metabilis-able Energy (ME) of pastures and improved utilisation of home grown feed. This means less brought-in feed.

■ There is little to no environmental or off farm effect in stark con-trast to water soluble fertilisers.The key thing to

remember with these ben-efits is that they don’t happen overnight but rather they build upon each application. Matching quality com-post production and soil nutrition to soil type

Every farmer knows that each soil type across the property produces dif-ferent pasture and feed quality.

And yet, over the last 50 years the advice to farmers has always been the same - focus on nitro-gen and profitability will increase.

This panacea has resulted in a number of problems best summed up as an incremental decline in soil and herd health. The old adage of “you are what you eat” also applies

ADAM WILLSONto your herd as well.

The financial implica-tions of these detrimental changes are well docu-mented not to mention the stress that follows.

In order to maximise production, on-farm com-posting and applied soil nutrition is matched to your local soils types. This is because each soil type has unique chemi-cal and physical properties that need to be taken into account.

It is all about reintro-ducing to the farm broken down organic matter or soil humus. As quoted on page 70 of The Farmers Handbook, Department of Agriculture, NSW, 3rd Edi-tion, 1919: “Humus, which is derived from the gradual decay of animal or vegeta-ble matter within the soil, is one of the most impor-tant of the soil’s con-stituents, and any great variation in its amount effects profoundly the value of the soil for agri-cultural purposes”.

The immediate bene-fit of implementing these composts is that every farmer has a recipe that is specific to each soil type. Fine tuning of this process through periodic soil tests ensures the plants reach their true genetic poten-tial.Choosing the right equipment to compost

There are many com-post turners on the market

but very few can claim to be truly Australian built and designed for extreme conditions, like the JPH Equipment CT Series Compost Turners.

The CT Series has a unique patent pending drum design. It is ideal for making compost, mixing blends, fertilisers and dif-ferent waste streams.

The watering system is more uniform so that the

compost is ready in 21-28 days, not the traditional five months.

This makes quality compost production an economic option.

This strongly built Aus-tralian machine with real Australian steel is heavy duty handling the rigors of daily farm life.

• Adam Willson is a director of Soil Systems Australia

Former dairy farmer Ged Plunkett and Jordan Minnicon of the University of Queensland, Gatton.

JPH Equipment’s CT270 Compost/Windrow Turner and WT5000 Water Wagon being put through their paces.

Spoilt feed, separated effluent solids, and stockpiled manure can all be used in compost.

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22 // MANAGEMENT

TAKING A chance on newer pasture variet-ies is proving worthwhile for Hunter Valley dairy farmer, Scott Wheatley, and his family.

The Wheatley’s farm 200ha near Aberdeen alongside the Hunter River, where mild winters can allow year-round pasture growth for their herd of 200 to 300 Holsteins. Hot weather over summer, however, can cause problems with pasture persistence.

Lucerne and perennial ryegrass are the mainstays of the Wheatley’s pas-ture production system, but they like to keep their options open and try new pasture varieties from time to time.

Last year, they sowed two paddocks to Atom prairie grass mixed with Tonic plantain, Broadway red clover and Haifa white

clover.Atom prairie grass is a

large leaved, large tillered, perennial grass that is expected to grow for two to four years.

“We were looking for something that offered a high quality feed, with better persistence than ryegrass,” Mr Wheatley said.

He said it was common in their area for ryegrass to require reseeding each

year, even when using perennial varieties.

“We don’t want to be in a situation where we have to sow every paddock every autumn,” he said.

“As well as the high cost of establishing new pastures, it creates a severe feed shortage for the herd.”

Mr Wheatley asked his local seed specialist, Daniel Clydsdale from AusWest Seeds, to recom-mend an alternative pas-ture that would tolerate the hot summer days and warm nights.

That’s how they came to try Atom prairie grass.

“We sowed two pad-docks in March last year and it took off really well,” Mr Wheatley said.

“I know farmers around here are sceptical about the quality of prai-rie grass generally, but we haven’t noticed any change in the litres coming

through the dairy.”Mr Wheatley said last

winter was colder than usual, but the Atom prai-rie grass performed better than their ryegrass pas-tures.

“It sometimes takes a bit of careful management to keep it short in late spring, to keep on top of the vigorous growth, but it also makes quite good hay if it does get away.”

The Wheatleys treat their Atom prairie grass in much the same way as a ryegrass pasture, grazing it every couple of weeks and watering it after graz-ing, but it has some differ-ences.

For example, Atom prairie grass has a broader leaf than ryegrass and a deeper root system.

Daniel Clydsdale from AusWest Seeds said as a member of the brome family, Atom was naturally more heat tolerant than

ryegrass and maintained its high quality, even when in a reproductive state.

“Above all, Atom has the potential to persist for longer than ryegrass in subtropical pasture situa-tions,” Mr Clydsdale said.

Mr Wheatley said after good rains in February this year, their Atom pas-tures took off and became quite long, causing some

concern about whether they would be palatable. However, he said the cows still grazed it down to the ground.

He said the clover and plantain had also persisted in the mix, with the plan-tain starting to thicken up.

After sowing several more paddocks to Atom this autumn, they now have more than 10% of

the farm converted to the alternative pasture. They are also trying Hummer, a new soft leaved fescue, this year.

“I couldn’t be happier with the performance of the new pastures on our farm,” Mr Wheatley said.

“Ryegrass isn’t the only option for dairy pastures, so why not look at the alternatives?”

Effluent reacts to different soils

TAKING DIFFERENT soil types into account is essential if dairy farmers are to better manage efflu-ent and associated issues.

Farm dairy effluent is a major contaminant of water, either by direct

run-off or nitrogen leach-ing. The amount of water (‘hydraulic loading’) in soil, and various soil prop-erties, influence the effects of contaminants. For example, soil texture and structure determine how much water can enter and be retained in a particular soil, and the rate of trans-mission of excess water

through soil.So these various soil

properties should be weighed up when deciding on effluent irrigation sys-tems, and when applying effluent to pasture, to both maximise nutrient benefits and to protect waterways.

Consider the following when discussing such decisions with your

effluent advisers.Leaching occurs in

response to movement of excess water from the soil, meaning soils with lower water holding capacity are more susceptible to leach-ing. Conversely, soils with high water holding capac-ity (deep silt loams) can store a lot of effluent.

The soils that have low

BALA TIKKISETTY

available-water holding capacity are the shallow to moderately deep soils, and sandy or stony soils. Usually, lower water-hold-ing capacity is the result of restricted rooting depths due to the shallow nature of the soils and high water tables. Effluent irrigation on shallow soils with high water tables is likely to result in leach-ing.

Permeable soils with a deep water table and no drainage limi-tations are best for putting efflu-ent on.

However, on stony soils the risk of efflu-ent draining directly to groundwater must be con-sidered. In such situations, application depths and rates should be adjusted to account for this risk.

Meanwhile, it’s impor-tant to take into account the rate at which effluent can infiltrate soil. If too much is put on too quickly, this can lead to runoff into waterways.

The nature of the efflu-ent and cattle treading on soils can affect the infiltra-tion rate.

Treading damage by stock, which occurs most when the soils are wet, sig-nificantly reduces infiltra-tion rate. For some soils this can result in accumu-

lation of efflu-ent below slopes and hol-lows. It can then enter sur-face waterways.

Transmis-sion of water through soil pores is gener-ally described as hydrau-lic conduc-

tivity. When hydraulic conductivity of the soil is low, irrigation of efflu-ent will result in ponding and run-off once the total water capacity of the soil is exceeded.

Low rates of hydrau-lic conductivity are found in soils that are poorly drained, and ponding and runoff often occur with high rainfall. Many of these soils need to be artificially

drained to reduce the inci-dence of ponding and water-logging.

For pugged soils affected by treading, appli-cation rates of effluent greater than 10mm/hour are likely to result in pond-ing of effluent if soil water content at the time of irri-gation is high.

When effluent applica-tion rates are higher than infiltration rates, water can enter macro-pores open at the soil surface, and then move very rapidly via so-called ‘bypass flow’ through a relatively dry soil matrix. This gives little opportunity for the water to be retained within the root zone and high leach-ing of nitrate is likely to occur.

Bypass flow of farm dairy effluent can occur in soils that undergo shrink-age and fissuring during drying, especially when these soils have been pre-viously compacted by treading. • Bala Tikkisetty is a sustain-able agriculture co-ordinator at Waikato Regional Council in New Zealand.

WHO: Scott Wheatley WHERE: Aberdeen WHAT: Atom prairie grass

Solving the pasture persistence problem

Scott Wheatley, dairy farmer near Aberdeen with Daniel Clydsdale from AusWest Seeds in the Wheatley’s Atom prairie grass pasture in late October. Atom has the potential to persist for longer than ryegrass in subtropical pasture situations.

Soil properties should be weighed up when deciding on effluent irrigation systems.

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MANAGEMENT // 23

WITH THE fodder season underway and everyone under pressure to get the crop baled the Australian Fodder Industry Association (AFIA) is reminding growers and contractors to be patient and make sure that hay is properly cured before baling to avoid haystack fires.

“There’s a lot of hay being made this season and so far we’ve had a patchy start in parts of Western Victoria and South Australia due to unfavourable weather conditions,” said AFIA execu-tive officer Darren Keating.

“It is easy for hay growers and con-tractors who are under pressure, to rush

hay into the bale before it is ready. “This year especially AFIA wants

remind anyone making hay that they need to be patient and ensure that hay is properly cured.

“Hay that hasn’t been properly cured can pose a risk when handling the hay if bales slump or move, it increases the

risk of hayshed fires and can compro-mise the quality.”

Mr Keating said anyone who is unsure about curing hay should talk to their local agronomist or work with an experienced contractor to make sure the crop is ready to be baled.

“The curing process takes time,

there is no set number of days the hay needs to sit before it is baled, it is simply a matter of waiting until the crop is ready.

“There are some simple tests that anyone can do to check if hay is properly cured, such as looking at head emer-gence and the ‘bulbar test’.”

Cure hay with patience

HAY BALES and hay stacks affected by heavy rain are likely to start heat-ing up with the potential to spontaneously com-bust.

Heat is generated in wet hay when mould, yeast and bacteria begin to break down the hay.

Most farmers and hay contractors are very aware of how important the moisture content of the hay is when baling to avoid heating, but mois-ture added post baling can be just as dangerous.

Spontaneous combus-tion is a leading cause of haystack fires in Victo-ria and farmers with flood affected hay need to care-

fully look for signs of heat-ing.

Hay stacks and even individual hay bales still in paddocks become dan-gerous when heating approaches about 70°C. At this temperature they can increase to ignition point rapidly.

Hay stacks heat up inside, with the tempera-ture on the outside often giving little indication of what is really happening deep within the hay.

A relatively easy way to determine the heat in a stack is to insert a crow-bar into the stack as far as possible.

Remove the bar after a couple of hours and the temperature of the bar will give a good indication of how hot the stack might

be - at least to the depth of the bar.

Unfortunately, detect-ing heat in the middle of large stacks is not so easy.

To get an indicator of heat further into the stack, use a pipe of 2.5 to 3m in

length and about 20mm in diameter. Flatten one end and drill 2-3mm diameter holes about 75mm above the flattened end.

Drive the flattened end into the stack and lower a small thermometer to

Hay bales and heavy rain an explosive mix

FRANK MICKAN

Frank Mickan the end of the probe using light wire as string may burn or break. Retrieve thermometer after about 15 minutes.

Farmers should seriously consider pulling stacks apart if at high temperatures and also suggests alerting the CFA prior to starting work as the bales could suddenly ignite when exposed to

oxygen.Make sure all equip-

ment is removed from inside or nearby by loca-tions if the stack is becom-ing seriously heated. He warned that haystacks become unstable as the flood affected lower bales start moulding badly, begin to heat up and lose their shape.

Don’t walk across the

top of severely heated stacks as they could col-lapse inwards as a result of unseen charring in the middle.

If hay ignites, watch for flying embers and the heat affect on nearby trees, fences, buildings and machinery.• Frank Mickan is based with the Victorian DEPI at Ellinbank.

Temperature (ºC) Interpretation

< 50Can handle bar without discomfortCheck temperature daily

50-60Can only handle bar for short timeCheck temperature twice dailyRemove machinery from shed

60-70Can touch bar only brieflyCheck temperature every 2-4 hoursMove hay to improve air flow

> 70Bar is too hot to holdPotential for fire� Call Fire Brigade immediately�Avoid walking on top of haystack

Temperature interpretation using a crowbar

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It might be an easy fix but who’s going to tell you


24 // ANIMAL HEALTH

RICK BAYNE

A NEW feeding system trialled on 6500 calving cows in northern Victo-ria could revolutionise Australian dairy feeding habits.

The high calcium diet being fed to cows on about 20 different farms over the past 18 months con-tradicts the usual low-cal-cium diets fed during the transition period.

Anecdotal evidence shows the system is having good results but it has yet to undergo formal anal-ysis.

Nutritionist and dairy

consultant Mark Emon-son from Malijo Consult-ing has been trialling the high calcium feed on dif-ferent farming systems and says the results have been positive.

He would now like to see formal clinical trials done to confirm if the high fibre diet works.

“It’s a new way of thinking and it flies in the face of what the indus-try says we should do in lead or transition feeding; but the old way of starv-ing them of calcium to fix a lack of calcium wasn’t computing for me,” Mr Emonson said.

“A cow mobilising cal-

cium as a result of starv-ing them of it isn’t a good thing. We need to try to get as much calcium into them as we can so we min-imise anionic salts.”

Mr Emonson said farm-ers had been traditionally encouraged to use low-cal-cium transition feeding to manage milk fever while increasing productivity and fertility.

But he said that was leading to a raft of other problems, most notably infertility.

“Milk fever is caused by a lack of calcium – how do you manage that by starv-ing them of calcium?”

Mr Emonson said cows were often fed poor qual-ity feed during transition.

“Their response is to mobilise calcium out of their muscle and bones. Feeding them anionic salt combinations to induce ketosis to control calcium balance has caused a host of other problems post calving,” he said.

Pre-calving cows have increased energy require-ments but often reduced intake space because they have consumed lower quality fodder.

“Calcium is grossly overlooked in the diet of all cows, but especially during this period,” Mr Emonson said.

It was time for the industry to challenge “old school ways” of transition feeding, he said.

“In my 13 years in the industry as a nutrition-ist and consultant I’ve never understood why you wouldn’t feed qual-ity forage high in calcium,” he said.

The trials in northern Victoria have used a cal-cium-rich fodder blend based on organic sources.

“We’ve gone down a different path to tradi-tional thinking and fed them enough calcium to support production, preg-nancy and maintenance,” Mr Emonson said.

The feed blend aims to maximise DMI, protein, carbohydrate and vita-min/mineral balance of your transition cows with-out the need to control Dietary cation-anion dif-ference.

Mr Emonson said there had been no research done into the feeding regime because it was considered “impossible”.

“They say it shouldn’t be possible, but it is, just ask the cows. There are

High calcium diet trial for transition cows

challenges, particularly in timing, but that is why we need clinical trials.”

Anecdotal feedback has been positive across dif-ferent farming systems. “The results vary but in the main it is very positive. They have increased milk yield and pro-tein early in lactation and post calving, and there are lots of cows calving and getting in calf quicker,” Mr Emonson said.

“Some guys have trialled it and then gone on to do the whole herd.”

There has been very little evidence of milk fever among cows on the diet and those that have developed fever have responded quickly to treatment. “Because they have plenty of cal-cium they respond fantas-tically.”

Mr Emonson said the diets were designed to provide:

■ DMI of 12-13kg/cow/day.

■ ME concentrations of 10.5-11 MJ ME/kg DM.

■ 38-40% NDF concen-

tration/kg DM. ■ Crude Protein concen-

tration of 16% CP. ■ DCAD of 350-450 meq/

kg DM. However, he added

there were challenges in using the system. “There

is only a small window pre-calving so timing is a challenge. Picking a calv-ing date can be difficult but with fixed time A.I. we are starting to see the ben-efits.”

Farmers also need to be careful cows don’t con-sume too much calcium as it could shut down absorp-tion rates.

He stressed the impor-tance of good transitional feeding. Good transi-tion feeding will reduce stress, ruminal disrup-

tion, minimise macro min-eral deficiencies and avoid immune suppression.

Mr Emonson said there was growing interest in the high calcium system and that farmers should firstly trial it on a small

portion of their herd to see if it suits their needs.

He said that maximising feed consump-tion across the year would lead to higher pro-duction and a prolonged peak period. Transition feeding should

aim to minimise stress on the animals at all cost, he added.

“It’s time to move on from old-style farming practices and try different things. Just because some-thing has always happened doesn’t make it right.”

“That’s why we need clinical trials to confirm the positive results we seem to be getting.”

The trials have been carried out on farms in northern Victoria.

WHO: Mark Emonson WHERE: High calcium diet WHAT: Northern Victoria

The high calcium dietbeing fed to cows on about20 different farms overthe past 18 months contradictsthe usual low-calciumdiets fed during thetransition period.

Dairy consultant Mark Emonson has trialled a high calcium diet on 20 farms in northern Victoria over the past 18 months.

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ANIMAL HEALTH // 25

THIS PAST calving season it was not uncom-mon, in spite of good management, for farm-ers to have several cases of ‘downer cows’.

The term downer cows specifically relates to cows around calving time that are unable to rise and remain sitting.

The causes are varied

and can change from season to season on a par-ticular farm.

The secondary damage due to tissue compression is usually unrelated to the initial medical cause of the animal going down.

The damage to the skin, muscle and soft tissues due to compression, struggling to sit and creep, exacerbates the situation and can quickly lead to a

Getting down cows upEDWARD ALVARES

WITH PASTURE making up 80 to 100% of the herd’s diet in spring, feed quality is a major profit driver.

Dairy herds often drop in production around late October to early November as pasture quality declines, despite cows having more than they can eat.

An important factor influencing feed quality is the appearance of seed heads as the plants go from the veg-etative to reproductive phase. Pasture that has gone to seed can contain up to 40% less energy than leafy pas-ture.

The lower quality feed leads to reduced milk pro-duction, so minimising this drop in pasture quality is one of the keys to holding production into summer.

The drop in energy occurs gradually when the plant turns reproductive.

As the seed head begins to emerge, it is similar in quality to leafy pasture but as it matures, the stem is strengthened by a woody component called lignin.

Lignin is not readily digested and the cows get less energy from each kilogram they eat. It also stays in the rumen longer, reducing the amount eaten.

By controlling seed heads you can limit the drop in milk production, with the trick being to graze the pas-ture before the stem matures to any great degree.

Seed heads will not mature much within the time it takes to grow two new leaves on a ryegrass tiller. By the three-leaf stage, the quality of seeding ryegrass pasture will drop about 5%.

This means that grazing at the two-leaf stage or canopy closure helps maintain milk production, with a 20-day rotation in the ballpark.

The downside is that pasture growth rates will be one-third slower compared with grazing at three leaves, but increased quality will generally be of greater ben-efit.

More area will be needed for the grazing rotation to allow for the slower growth.

This could result in less area available for fodder conservation, which may in turn increase the fodder bill later in the season. Check to see if the stems are soft and succulent to determine pasture quality.

A more woody texture indicates a lower feed value.It is possible to restore the feed quality at this stage

by either topping the paddock or making silage or hay from the grass.

If you let the cows take care of the stemmy pasture, they will select the new, leafier parts and leave the stem alone (assuming there is plenty of pasture on offer).

The stem will not disappear readily of its own accord and eventually production will be affected when it is eaten later in the season. Remember that the stem will continue to drop in quality over time.• Michele Ryan is a Dairy Services officer with the DEPI Warrnambool.

Cows suffer when pasture seedsMICHELE RYAN

downward spiral and poor outcome.

It is important on wel-fare grounds to triage the situation quickly. This is to ensure that scarce resources are not diverted and are used for cows that have a poor prognosis.

The earlier a decision is made by the farmer the better the animal welfare outcomes can be.

The triage process should relate to the age and condition of the animal, the cause of the cow going down, veteri-nary advice, availability of

skilled manpower, work-load, number of downer cows, upcoming weather conditions etc.

Proper, effective nurs-ing of downer cows should begin with veterinary advice. It is essential to determine the cause of the problem soon.

The earlier the cause is determined the sooner treatment can begin. Early treatment promotes early recovery and good welfare outcomes. If there are sev-eral causes and chances for recovery are poor, then decisions can be made ear-

lier to destroy the cow humanely on site.

If treatment is initiated then the progress of the cow should be assessed on a 12-hourly basis.

Care of downer cows can take a lot of time and tie a lot of resources. For maximum chances of recovery, cows should be provided clean dry and soft bedding that will provide a non-slip foot-ing when the cow tries to stand.

The cow should be moved from side to side every three hours to

ensure her weight is not always over one set of limbs.

Proper and effective lifting techniques should be used judicially.

Keep the cow warm if required with a rug. Pro-vide a continuous supply of clean water and good feed.

Ensure the cow con-sumes the water and that if the water is tipped over it is replenished. Proper rehydration can ensure that toxins are removed from the body and circula-tion and blood volume is

not compromised.This will aid recovery

and prevent shock or fur-ther complications.

It is important to manage calves born to downer cows to ensure their best chance of sur-vival.

Records should be kept of treatment, cow lifting, movement from side to side, water and feed con-sumption.• Edward Alvares is a district veterinary officer with the Department of Environment and Primary Industries in Victoria.

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26 // ANIMAL HEALTH

WOW, I am stunned that I am sitting here writing my Christmas 2013 arti-cle for Dairy News, another year has flown by. The year has for most dairy farmers been a better year than 2012, world demand for our product is strong, the dollar is a little lower and we are all looking for-ward to an even better 2014.

The summer season is a time of long days, hot nights and hopefully a busy party scene. Swim-ming in the pool, creek or dam and cricket on the TV, cicadas croaking away and hopefully there’s the chance to spend time with family, friends and the kids who are home on holidays.

My wish for all dairy families is that you are able to find the time (and money) to take a bit of a

break together over the summer, the kids grow up too quickly, my oldest boy has just finished his VCE and is off to the army in just a few short months.

But life also goes on around the dairy farm. The girls have to be milked, irrigation attended to, summer pastures topped, bulls run out with the herd and autumn cows preg tested and dried off.

With such a positive milk price this season for most farmers, I would

strongly recommend that you also consider an early round of pregnancy test-ing this January for the spring calved cows. Test-ing the cows around 5-6 weeks after the bulls were put in will allow you to determine which cows are actually pregnant to AI. The cows which have become pregnant to the bulls will not be detect-ably pregnant yet, or are easily distinguished as 5-6 week old pregnancies, and will not be confused with the older pregnancies con-ceived by AI.

In times of strong milk prices, it is my opinion that this is probably about the best value for money of anything that you can do on your farm. I support this wild statement with the following example.

A farm which does

not pregnancy test early cannot distinguish between a calf conceived by AI and a calf conceived a number weeks later to the bull when pregnancy

Preg testing early could save you thousands

testing is performed later in the year (around April/May), or using a milk or blood test later in preg-nancy.

Therefore they will have to dry a pregnant cow off to her earliest possible calving date to ensure she gets a 42-60 day dry period which is about ideal. But if she is actually six weeks less pregnant than you thought, you have wasted up to 42 days of milk that could have been in the vat.

That could amount to as much as 7-800 litres of milk (or even more), rep-resenting a significant loss of income, as much as several hundred dollars for each cow that falls into this category.

Most herds that I preg-nancy test would have at least 10-15% of their cows with a single AI date and no other recorded mating who are actually pregnant to the bull, so you could be losing many thousands of dollars in lost milk across the herd if you do not

determine when a cow is likely to calve and dry her off at the optimal time.

In addition, cows which have dry periods exceeding 90 days have significantly poorer transition outcomes than those who have the ideal dry period. Not knowing for sure can also mean that cows spend far longer than ideal times on the lead feed diet, with serious metabolic consequences possible.

So while I would encourage you all to take a bit of a break this summer period (as I indeed intend to do) don’t forget that there are still some real opportunities for making money over the summer by pregnancy testing your AI bred cows.

I urge you and your family to stay safe over the school holidays which are a very high risk time for farm injuries and fatali-ties. Keep a close eye on the kids if they are “help-ing” around the farm,

ensure they are either fully instructed or adequately supervised as nothing would ruin your Christ-mas more than a family member or the child of one of your employees getting injured on the farm.

I wish you all the warm-est of season’s greetings and hope your Christmas table is laden with deli-cious treats and meats.

It has been a plea-sure to write for you all this year and hope I have helped in some small way to improve your herds’ health and profitability.

Don’t forget to thank your dairy vet for all the wonderful things they have done for you this year, and remember, as you involve them more in your herds health and management, great rewards can be gained.• Rob Bonanno is past presi-dent of the Australian Cattle Veterinarians Association and a director of the Shep-parton Veterinary Clinic.

ANIMAL HEALTHROB BONANNO

Rob Bonanno strongly recommends you consider an early round of pregnancy testing this January for spring calved cows.

Enjoy a break but stay safe on farm this Christmas.

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IDW PREVIEW // 27

MORE THAN 70 exhibitors have already registered for the International Dairy Week Trade and Machinery Field Days.

Long known for showcasing the best of dairy breeds through its national shows and sales, IDW’s expanded format caters more for commercial dairy farmers, showcasing a wide range of dairy equipment and machinery.

It will also feature a series of free information seminars focused on topical issues.

The 22nd annual IDW will be held in Tatura from January 19-23, with the Trade and Machinery Field Days open on January 21-22. The information seminars will be held on the hour from

9am on January 21-22.The field days will include the latest

in milking machinery, tractors, mowers, mulchers, airseeders and planters, hay, silage and fodder equipment, agronomy and farming advice, pastures, seed and fertilisers, animal health treatments, flooring equipment, pumps and water systems, irrigation, pipes and fittings, and calf rearing products.

Derek Modra, from Farm Tech Victoria, has been attending the IDW field days for the past eight years.

“We get to display our business and our products to dairy farmers not only from the Goulburn, Murray and Kiewa Valleys but from every dairy region in Australia,” Mr Modra said.

“It’s a must do on our calendar, over the past two years we have enjoyed strong sales directly generated from our stand at this field day”.

David Collier, branch manager at O’Connors, Shepparton, will showcase its lineup of Case and Lely products.

“This event attracts the best dairy farmers from all over, locally, nationally and internationally,” Mr Collier said.

“We can show our products, meet and talk with prospective buyers at this sole dairy industry focused event.”

IDW director Brian Leslie said the committee has acted on feedback from farmers to ensure the speaker line-up is relevant to their needs.

“You can stay for all, or come and go as you are interested,” Mr Leslie said.

See the full list of speakers and topics on pages 28 and 29.

An impressive line-up of international judges has been assembled to judge the dairy cattle.

Mr Leslie said there was no greater Australian event than IDW for dairy cattle breeders and supporters.

“There will be a great line-up of international judges to take to the ring to judge a fantastic array of Australian cattle from re-known and new breeders around Australia,” he said.

“IDW is recognized as the third largest dairy cattle show in the world and a win or a place at International Dairy Week is a marketing plus and I encourage all owners to enter.

“With the fantastic support of all IDW sponsors we are able to provide an expo event second to none of its kind in the Southern Hemisphere and I am again expecting a large contingent of international visitors to take in the best of the Australian dairy industry.”

The National Illawarra, Brown Swiss, Guernsey, Ayrshire, Jersey and Holstein Shows will be held from Tuesday through to Thursday and Mr Leslie is “thrilled with the panel of Australian and International experts who have accepted the job of judging the tremendous cattle that breeders work hard to present at IDW”.

“The National All Breeds Youth Show is growing in leaps and bounds and continues to be a wonderful opportunity for youth to enter the showing world,” Mr Leslie said

“We anticipate strong representation in all the shows and are planning for over 1000 head of cattle from exhibitors coming from all states of Australia.”

Cattle sales will be held on Tuesday, Wednesday and Thursday with 200 head to be offered for sale.

“Simply put, come and enjoy a day out at IDW 2014 and catch up with friends” Mr Leslie said.

IDW takes place at Tatura Park, Tatura, Victoria from January 19-23. Entry to all events is free.

For more information, visit www.internationaldaiaryweek.com.au for the full program.

IDW Trade and Machinery Field Days continue to grow

DAIRY NEWS Australia is proud to be the official sponsor of the IDW Dairy and Machinery Field Days.

As part of our sponsorship, we are giving all that attend IDW the chance to win a custom-engraved Weweld Steel-worx outdoor fireplace.

Simply collect a form from the Dairy News Australia site near the entrance gate and have it stamped by any six exhibitors.

Return the completed form to our site and go in the running to win an outdoor fireplace. It comes with swing over BBQ and swinging arm for your billy or camp oven, and looks great at night with the flames lit up.

Dairy News Australia editor Stephen Cooke said with over 70 exhibitors already registered, the Dairy and Machinery Field Days would provide something for every

visitor.The seminars, also free of charge,

would also be well worth visiting.“The IDW committee should be com-

mended for organising a quality line-up of speakers, as well as a field day packed with variety and innovation.

“We look forward to seeing all visitors at our site.”

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The IDW machinery field days will be held on January 21-22.

The Holstein showing will be held on January 23.

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For best results: Diamonds should be at least 12mm deep; and the points of the diamond should point up and down the slope to help with yard washing.Using a combination of parallel and diagonal grooves (25-30 mm wide 10-12 mm deep) it’s a safe guard for sure footing, confidence, good drainage and proven results reducing ‘splits’ which can lead to permanent damage. ‘Flighty’ heifers are calmer and easier to manage.

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28 // IDW PREVIEW

Free global perspectiveTUESDAY, JANUARY 2110AMVirtual Farm Tour – USA Guest Speaker: Cherie Bayer, US Jersey Association

The 2014 IDW Seminars will start with a virtual tour of Dutch Hollow Farm in the USA. Dutch Hollow Farm was established in 1976, when the Chitten-den family moved from Paul’s home farm, Fair Weather Farm, in New Leb-anon to a farm in Schodack Land-ing. Today Dutch Hollow Farm is operated as a Limited Liability Corporation. The partners are brothers Brian, Alan and Nathan Chit-tenden, and their parents, Paul and Mel-anie. Over the years, the herd has grown from 55 cows to 600 cows. About 450 heifers are raised on the farm as well. Dutch Hollow Farm is the second-larg-est Registered Jersey herd in the state. Dutch Hollow Farm ranks among the top 100 herds in the country for Jersey Performance Index (JPI) with an aver-age JPI of +68 (4/13) on 591 cows. Of the 539 calves in the heifer pens, nearly half are P-level 7 or higher; 99 of these are P-level 9. The Dutch Hollow cropping

operation encompasses about 2,000 acres (809ha) of land and an addi-tional 1,200 acres (485ha) are custom harvested for local customers.

11AMNutrition Management to Improve Conception RatesGuest Speaker: Andre Nel

The modern dairy cow has impres-sive genetic potential for milk produc-tion. It is vital to unlock that potential to optimise the herd performance, both financially and physically. Higher pro-duction in some systems can come at a cost with lower conception rates, but there is not a direct correlation between milk production and fertility. Good nutrition and feeding manage-ment will limit the impact of increased production on conception rates. It is important to understand that nutri-tional limitations can vary significantly between dairy herds. In this presenta-tion we will look into:

• The importance of key nutrients and how they impact on conception rates

• The signs to look for in a herd to determine what may be negatively affecting conception rates

• The best strategies to overcome nutrient shortages or imbalances

1PMWorkforce Development in the Dairy IndustryGuest Speaker: Shane Hellwege

Labour will be the theme of the ses-sion with a preview of the new Employ-ment Starter Kit (ESKi) followed by Shane Hellwege explaining how Murray Dairy sup-ports farmers with their workforce development needs and helps farm-ers become better employers. The ESKi has been sourced from the People in Dairy website to provide a folder of information and templates so farmers can maintain their people management requirements.

More than simply legal compli-ance, ESKi works towards improv-ing employer skills and experience for employees. Dairy farmers can also pick up a show bag when they visit the Murray Dairy stand.

2PM Electronic Heat Detection Can Change Your LifeGuest Speaker: Julian Bentley

Julian Bentley shows how dairy

farmers can save time and make more money using electronic heat detection systems. With case studies from Moo-Monitor systems installed across Aus-tralia and worldwide we show evidence of improved submission, conception and identification of cow health issues. Mr Bentley looks after the MooMon-itor systems in Australia. He came to Australia after working at the Animal and Grassland Research Institute in the UK and has a master’s degree from Swinburne.

WEDNESDAY, JANUARY 2210AM Virtual Farm Tour – GermanyGuest Speaker: Dr Alfred Weidele, Germany

This morning’s virtual farm tour will take listeners to Germany to explore dairy farming practices in this Euro-pean Union country. Germany accounts for about 20% of total dairy production in the EU. It has 4.2 million dairy cows

Brian Chittenden

Shane Hellwege

TO PAGE 29

As well as showing, International Dairy Week now includes two days of free seminars.


IDW PREVIEW // 29

and 82,900 dairy farms. The Euro-pean Union with its present 27 member countries is the larg-est milk producer in the world and the largest contributors are Germany and France. The end of dairy quotas in the European Union in 2015 will shake up an industry where the average herd size is just 50 cows. The Germans are also banking on genomics to provide new export opportunities for their genetics – either in the form of semen for artificial insemination or as live heifers. Farmers are also cashing in on the German push for renewable energy, with many invest-

ing in solar energy and biogas produc-tion to provide a chunk of farm income.

11AMNutrition Management to Improve Conception RatesGuest Speaker: Andre Nel(See Tuesday’s program for details)

MIDDAYThe Newest Tool in the Fight Against Calf ScoursGuest Speaker: Dr Neil Charman

Dr Neil Charman will present new results demonstrating the performance of Ultravac Scourshield against calf scours on Australian farms. Dr Char-man will explore how the vaccine works, indications for its use and discuss prac-

tical ways to help reduce the incidence of calf scours on farm. Dr Charman is the strategic technical manager for Zoetis. He has extensive experience in the industry and has worked as a dairy veterinarian for most of his career. Dr Charman completed his masters in dairy medicine in 1995 and his MBA in 2006. He has been working for Zoetis in the area of Clinical Development since 2007 where his clinical research has been strongly focused on positive outcomes for dairy cattle and the dairy industry.

1PMVirtual Farm Tour - ArgentinaGuest Speaker : The Argentine Hol-stein Association

Argentina has about 1.85 million dairy cows distributed in 11,800 dairy farms.

Argentina’s milk production is based in the central and east-central regions of the country, known as the Pampas, which includes parts of Córdoba, Santa Fe, Buenos Aires, Entre Rios and La Pampa provinces.

In these regions, dairy farming is all pasture-based and depends exclu-sively on rainfall, with no confinement of dairy herds.

The dairy herd is almost exclusively (98%) of a nationally adapted Holstein breed, the Holando Argentino, totalling more than 3.5 million head. Learn more about dairy farming practices in Argen-tina in this seminar.

2PMGEA Dairy Technologies and SCR Heatime Product – The Next Gen-erationGuest Speaker: Vaughn Johnston

Semex in association with GEA/MILFOS are marketing the world renowned SCR HEATIME electronic activity and rumination system, designed to assist you in improved Heat Detection, Improved Submission Rates, lower levels of drug usage, reduced labour around heat detection and the early detection of digestive and other problems. Product specialist Vaughn Johnston will present real data from our customers already using the HEA-TIME product, proving the value of this investment.

Alfred Weidele

2014 JUDGES

AYRSHIRESKEVIN SMITH - AUSTRALIA

Queensland Ayrshire breeder Kevin Smith has significant experience in showing cattle having won Champion Ayrshire cow at the Royal Brisbane Show 17 times in 20 years. He has bred and owned two cows classified EX94. One of these cows, Hillcrest Tri Camille carries the status of being the highest classified Ayrshire in Australia having been classi-fied excellent five times.

ILLAWARRASKEITH DORRIES - AUSTRALIA

Keith Dorries has been a dairy farmer and Illa-warra breeder (Panorama Illawarras) for 40 years farming at Oakey, Queensland. Panorama has shown successfully at the Brisbane Royal Show winning 11 Champion Cow awards including one Supreme Cow award. Many Intermediate Champions including 3 heifers gaining supreme awards. 14 most successful exhibitor awards have also been won.

GUERNSEYSBLAINE CROSSER – USA

Blaine Crosser who comes from Marysville, Ohio has served as the official judge for the Guern-sey breed in the United States and internationally. A graduate of The Ohio State University, Blaine is employed as the Dairy Sire Product Manager and Guernsey Sire Analyst by Select Sires, Plain City, Ohio.

BROWN SWISS DR. ALFRED WEIDELE – GERMANY

Since 2000 Alfred Weidele has been the Manag-ing Director of the Rinderunion Baden-Württem-berg e.V (RBW) in Germany as well as Breeding Director for Simmental/Fleckvieh and Brown Swiss. RBW disposes of 204,000 herdbook cows, carries out 315,000 first inseminations and markets 70,000 cows and bulls per year.

JERSEYSMICHAEL HEATH – USA

Micheal Heath has made a living as a cattle mer-chandiser and breeder. For 25 years he has judged some prominent Cattle Shows around the World including the 2012 International Holstein Show, 2013 International Red & White Show, 2009 International Jersey Show all at World Dairy Expo as well as the 2005 Jersey Show at the Royal Winter Fair.

HOLSTEINS JUAN JOSÉ FELISSIA - ARGENTINA

Juan José Felissia is a very well known Argentine breeder and co-owner of “La Magdalena” in Rafaela, Santa Fe Province, which was started by his uncle until 1985, when Juan José and his sisters Ana and María purchased the firm and the herd. They con-tinued breeding with the same prefix “Ninin” for females and “Ricarm” for males and they are proud to have bred, since then, 88 Ex cows.

FROM PAGE 28

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IDW PREVIEW // 31

DRAINAGE IS an important issue because most plants cannot survive waterlogging for more than a short time.

Most plants need at least 10% to 15% of the soil pore to be filled with air to survive. Soil becomes waterlogged when its pores fill with water. Once the soil is saturated, root growth in most plants can occur only on the surface.

Drainage problems occur where water tables are high. High water tables can happen where there is little or no available outfall for surface drainage water or where steeper slopes flatten out. Water seepage occurs where soil type changes from adequately drained soils on the higher terrain to more poorly drained soils on the flatter ter-rains.

Elevated water tables result in water-logging with detrimental effects on agricultural production. Waterlogged soils are prone to structural damage if worked when wet or if compacted by livestock (pugging) or vehicles. Water-

logging can cause increased soil ero-sion problems because the saturated soil cannot absorb more water.

In trial work at DemoDAIRY, DPI researcher Greame Ward found that heavy pugging of wet soils during winter reduces the total annual pasture pro-duction by more than 50%.

In addition, clover was virtually eliminated from the pasture and the soil structure was severely degraded. These are all factors that reduce the future productivity of the pasture.

To reduce the occurrence of pug-ging, a drainage system consisting of subsurface drains in combination with mole drains can be installed to prevent paddocks from becoming waterlogged.

Subsurface drainage removes excess water from the soil profile, through a network of perforated corrugated poly-drains installed 66cm to 1.33m below the soil surface.

Mole drains are used in heavy soils, with low rates of soil-water movement. This requires a closely spaced (2-6 m apart) subsoil drainage systems to pro-vide sufficient water movements to

control the effects of salinity and water-logging in the fields.

Such close spacing using a polydrain subsurface drainage system is impracti-cal and costly. This is where mole drain-age comes in.

Mole drains are unlined channels formed in the clay subsoil by pulling a ripperleg with a cylindrical foot on the bottom and an expander through the subsoil.

The ripper leg breaks the soil while

the expander forms a channel. The cracks in the soil form little waterways to the channel in the ground. This pro-vides the major flow paths for the soil water to move into the mole drain.

Excess water then flows through the soil cracks to and along the mole drain, then drains into the permeable back-fill above the subsurface drains, and is quickly removed

Mole drains are installed every 2 to 2.5 metres apart across a subsurface

drainage system so that the expander of the mole plough is being pulled through the permeable backfill of the subsurface drains.

Subsurface drains allow excess water to leave the field, but once the water table has been lowered to the eleva-tion of the drains, no more water flows through the drains.

TG Drains installs subsurface drain-age using a laser controlled purpose built drainage machine. The machine, a Mastenbroek 20/15 imported from the UK, can cut a trench up to 2.2 metres deep and the drainage pipe is laid with the backfill of gravel in one single oper-ation. The machine can be altered to lay either 100mm or 160mm polydrain.

A tractor hauling a gravel trailer with a conveyor belt drives alongside the drainage machine. The conveyor belt of the trailer runs a continuous flow of permeable backfill e.g. gravel, into the gravel hopper. This prevents any dirt from falling on the pipe and blocking the drainage holes. Tel. 0409 115 474 or see TG Drains at IDW.

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32 // MACHINERY & PRODUCTS

THE INSTALLATION of a sophisticated monitoring and control system for their flood irrigation operation on a dairy farm in northern Victoria has given the owners peace of mind and more time to get on with other jobs.

Stephen and Lisa Cox are milk-ing 700 cows on 170ha at Yalca, near Numurkah.

About 12 months ago they decided to pull out the existing gravity-fed arrangement to install a comprehen-sive pipe and riser system over the whole farm, getting rid of the old Del-bridge wheels.

“It was a 20 year old system,” Mr Cox said. “The pastures were being irrigated far too slowly, and they would heat up with water laying on them, resulting in poorer pasture growth.”

This is a pasture-based farm opera-tion, watering all through summer. They grow both annual and perennial white clover and ryegrass.

So they needed to be able to effi-ciently control the watering to each of their flood bays at the time that the water was available from Goulburn-Murray Water.

They irrigate from GMW’s No.5

main channel, which runs right through the farm, as well as a bore, supplying a turkey-nest dam. The allocation from the channel is 430ML and 700ML from groundwater.

When they were organising the excavations for the pipe and riser system, Mick Hogan Excavations from Numurkah recommended the Mait Industries radio-controlled ‘iNTEL-LiTROL’ electronics and software system. When the decision was made to go ahead, he installed it and the Mait Industries technician got it going.

Mait Industries, based in Melbourne, provides innovative monitoring and irrigation control solutions for all facets of agriculture.

They created a farm map for the Cox farm and allocated an identification

code for each of the 91 risers through-out the farm. The risers are fully auto-mated, individually programmed and supply to individual flood bays. There is a solar panel to provide power for every three risers.

The Mait Industries system had been up and going for six weeks at the time of our visit to the property in late October. They were irrigating 25ML in a 24 hour duration, which previously would have been irrigated at a rate of 10ML daily over four days.

“We now have faster flow, with all the convenience of automation,” Mr Cox said. “It was a financial no-brainer! We are spending far less time irrigating. What used to take four and a half days now takes 22 hours.”

The water is all moved by two elec-tric pumps, one at the channel and the other from the dam, through mainly 450mm poly pipe. As well as the two pumps the new system incorporated a weather station and four moisture monitors located in different soil types around the farm.

Mrs Cox runs the system from the computer in the home office, plus she has a ‘team viewer’ set up on her tablet so she can check the status of the whole operation and make changes from wher-ever she is. A radio antenna is located just outside the house.

Every 10 minutes the computer com-municates with the towers and risers for a status check. If there is an error on a riser it lights up red on the screen to call for a physical check.

Mait Industries say that radio com-munication between the PC and the field sites is possible up to 8km line of sight, or multiple radio sites can be used as repeaters if further distance commu-nication is required.

At the moment they are working on a modem which will advise by mobile phone if either pump loses pressure. “That will be extremely helpful if we are not here at the farm,” Mrs Cox said.

“We looked at three systems. There was nothing that the others offered that Mait didn’t, for about half the price of another major competitor. It was so simple to follow, they installed the soft-ware, I had a one hour lesson and I was ready to go.”

Mrs Cox programmes the times for each pump to start and which risers to operate, either individually or as part of a designated group.

The start time is programmed but can be easily revised if Goulburn-Mur-ray Water advises a time change for the water. The designated risers open 90 seconds before the pump starts.

WHO: Stephen and Lisa Cox WHERE: Yalca via Numurkah WHAT: Intellitrol irrigation software

Easy irrigation control boosts pasture growthCHRIS DINGLE

NEW SOUTH Wales dairy farmer David Lucas needed reliable, comfortable and fuel efficient tractors that anyone on his farm could use.

New to the market, Mr Lucas was considering a second-hand tractor for Lucasvale, his 560ha, 300-cow dairy farm in Brogo. But he found the new Maxxum offered great value and ticked all the boxes.

“It’s really easy for the technologically challenged. My father struggles with the systems in other tractors, but the Maxxum is so simple to use,” he said.

In just six months, the Maxxum has already done about 500 hours in the field.

“Because it can do feed mixing, we’ve been able to clock up the hours. And our drivers really like using it – we have a few other tractors, but they’ll jump into the Maxxum above all the others.”

Space and comfort certainly place the Maxxum Series tractor in class of its own. It comes standard with air conditioning, 5.85 sq m of glass and a high-visibility glass roof panel, and plenty of legroom. Dual, wide-open doors also allow for easy entry, while the parent-bore block with contoured outer surface reduces noise and vibration.

Mr Lucas also credits the modern Maxxum Series engines for their superior torque rise and fuel

efficiency, yielding more power for less fuel.

“It’s why I pull it onto a job over other tractors. It’s very efficient and handles its power to the ground really well,” David said.

The Maxxum series also combines automatic traction control, and PTO management with the ideal power-to-weight ratio for effective operation in all conditions. Moreover, its powerful hydraulics – steering, hitch and remotes – are engineered to handle a range of applications effortlessly.

It’s these features that make the Maxxum the ideal tractor for taking on tough tasks with ease and efficiency.

Ease of operation suits NSW farmer

Stephen Cox is impressed with their Mait Industries automated operation of the risers for their flood irrigation.

The Case IH Maxxum series tractor.

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MACHINERY & PRODUCTS // 33

A COUPLE of John Deere utility vehicles have provided a safe, practical solution for a myriad of jobs around a large dairy operation at Toolamba in Victoria’s Goulburn Valley.

Stuart and Suzie Rea run ‘Herdstown’, currently milking 726 cows on an 80 unit rotary. The farm was established in 1869 and Stuart is the fourth gener-ation family farmer on the property. The home farm covers 400ha (1000 acres) irrigated from a Goul-burn-Murray Water chan-nel. A further 400ha of local river coun-try is used for crop-ping, supplying six to eight months of their own grain for the cows.

The Reas supply to Melbourne-based Fresh Cheese Company, having previously been with Tatura Milk but making the change after the merger with Bega Cheese. In the spirit of horizontal diversification, the Reas cart their own milk, pick-ing up from 15 other farms in the area supplying to Fresh Cheese Company. Their milk transport arm is called, appropriately, ‘Mooving Milk Company’.

The farm had been pre-dominantly using ATVs to get around but with a fair amount of work required, they were wearing out and Mrs Rea said that the

required helmets were starting to present a prob-lem with the heat, hearing issues and comfort so they were phased out in favour of a utility vehicle.

They had always dealt with Haeusler’s in Shep-parton for their John Deere equipment - includ-ing the six tractors cur-rently on the property - so two months ago they pur-chased a John Deere Gator Crossover Utility TH855D 4 x 4. This vehicle uses an 854cc, liquid cooled diesel and, with indepen-dent four-wheel suspen-sion and high stability, its 51.5km/h top speed means that it is one of the faster diesel vehicles in its class.

Although Mrs Rea found the vehicle excellent for getting to and from home, two miles away, and for a variety of jobs around the farm – hay carting,

feeding out, carrying the odd calf, “we pulled a cow out of the channel, it’s been brilliant”, the roll-over bar presented a problem with the two low-roofed underpasses that are on the farm.

So, the day before our visit near the end of November, they had added to the Gator fleet by taking delivery of a TH 6x4 Gator Utility Vehicle which, with four driven wheels at the back and two at the front for steering, does not uti-lise a roll-over bar. John

Deere claim that it is designed for customers who need to haul heavy loads over various terrains

and conditions. With a similar size

liquid cooled diesel engine, it has a top speed of 32km/h and a turning radius of 3.8 metres. The Gator TH 6X4’s power is transmitted from the transaxle to the centre axle which in turn drives the rear axle by roller chains, utilising variable-speed drive, so no shifting is necessary as the opera-tor increases speed. The transaxle is fully enclosed and runs in oil.

Like the Crossover Utility TH855D, it has a tipping tray, in this case the capacity is 544kg.

Jamie Corbo will be the main operator of the new

utility, handling the jobs similar to the first Gator, and when we called in, it had the calf feeder hooked up behind.

“I find the Gators not hard to steer, with the 4 x 4 you can select four-wheel-drive or two-wheel-drive, but the new one is constantly driven by the four rear wheels,” explained Ms Corbo. “It’ll be handy for the cows and picking up stuff as you drive along. If the ATV is there, I’ll hop on the Gator.”

Mrs Rea said they’ve found Haeusler’s good to do business with. “We mainly deal with Glenn Brookfield.”

The dairy farm employ-ees two fulltime and five casual employees, and Mooving Milk has one fulltime and five casual employees.

The cows are predomi-nantly Holstein with some Jerseys and some crosses. Seven years ago the herd numbered 1000. The 700 high producing cows are fed to production but, as Mrs Rea says “we don’t push them’. The milk all goes into a 30,000 litre Packo milk vat.

The Herdstown opera-tion is self-sufficient for hay and silage, and this year so far they have 3000 hay bales, plus their own pit silage.

“At the moment we are

Gators take a big bite out of the workload

WHO: Stuart and Suzie Rea WHERE: Toolamba WHAT: John Deere Gator

WORKING CLOTHESCHRIS DINGLE

buying in cows because of a lack of replacement heif-ers – we seem to get a lot of bull calves,” said Mrs Rea. “For the future we would like to get back up to 1000 cows, and that will really just cover the rising costs.”

“We pulled a cow out of the channel, it’s been brilliant.”

Suzie Rea with employee, Jamie Corbo.

Jamie Corbo (foreground) on the John Deere Gator TH 6x4 Gator Utility Vehicle. Suzie Rea (background) in the John Deere Gator Crossover Utility TH855D 4x4.

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34 // MACHINERY & PRODUCTS

More accuracy in fert spreadingELECTRONIC MASS control (EMC) on Kuhn hydraulic-drive Axis fert spreaders, and new GPS-linked technology, raises the machines’ perfor-mance at headlands and field corners.

First introduced on Axera hydraulic drive spreaders, the EMC system is available on Axis models.

EMC refers to constant measurement of mass flow (kg/min) at the point of application, indepen-dently at each disc. This allows the machine to con-tinually adjust its aperture size to maintain a target application rate. This is achieved on hydraulic drive machines by moni-toring the pressure in each of the hydraulic motors

driving the discs, then cor-relating this pressure with the actual mass flow.

Measurements are taken and monitored every second, enabling almost instantaneous adjustment of actuator/aperture posi-tions to either side of the machine in response to changes in fertiliser flow-ability (as may be caused by a partial blockage for example).

Similarly, because application rate is a func-tion of forward speed, disc speed and working width, any changes to these parameters are managed by the machine’s infor-mation system to allow adjustment on the move and the maintenance of the target application rate.

The EMC system

avoids the need for con-ventional static calibration testing, since the machine makes the adjustments automatically from simple pre-programmed data. Thus 100% of settings are done in the tractor cab.

The advantages of EMC over conventional weigh cell systems is that of pro-viding data on and con-trol of each side of the machine independently, and maintaining accuracy

in hilly conditions.Meanwhile for all Axis

models with a GPS link, the new Opti Point system will further improve fert spreading accuracy, Kuhn says.

“Opti Point automat-ically controls aperture opening and closing at the headlands to mini-mise over- or under-appli-cation.”

Softer hands for round, square bales

ROUND BALES and four-foot squares are said to be handled with equal ease by Hustler Equipment’s new “low cost” bale grab, the CXR Softhands.

“The CXR has a fixed hand, designed specifically for handling round bales, although the shape also allows four-foot squares to be handled with ease,” the company says.

Going for a cheaper fixed-hand unit pointed to limitations so the company consulted operators during its search for the “ultimate shape”.

Four key aspects of traditional fixed-hand design stood out as needing change: less bale damage

to bale shape, wrap and adjacent bales; ease of use when loading and stacking; more versatility to handle bales in any position; and tough enough to withstand New Zealand conditions.

“The slim hands make stacking easier, the compact design offers unbeatable vis-ibility, and the new patented technology, with details to be released in December, is a major leap in bale handling equipment,” Hustler says.

An optional equaliser bar will keep the hands moving simultaneously for extra safety and precise bale control.

The machine carries a two-year war-ranty. Tel. 1800 127 030.

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Documents

Dairy News Australia December 2013