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GRUNT: Is too much horsepower ever enough? PAGE 34

OCTOBER 2014 ISSUE 52 // www.dairynewsaustralia.com.au

STOCK UPHay, grain production falls 10%

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DAI RY NEWS AUSTRALIA OCTOBER 2014

NEWS // 3

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

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

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

BREEDING MANAGEMENT .....18-20

MANAGEMENT ................................21-23

ANIMAL HEALTH ...........................24-27

TRACTORS & MACHINERY ....28-34

QDO executive officer Adrian Peake says Queensland farmers need to double production just to meet rising demand. PG.10

Vet Gemma Chuck provides advice on the best time to wean calves. PG.26

Moving farms has forced Western Victorian farmer Simon Elliott to change his feed regimes but the results have been beneficial. PG.21

Govt must invest in ag to capitalise in China

Dairy cows grazed the lawns of Parliament House this month to launch the Australian Dairy Vision, which was unveiled at a special dinner in front of parliamentary leaders that night.

NATIONAL FARMERS Feder-ation president Brent Finlay has stressed the importance of Govern-ment funding for both biosecurity and R&D if Australia wants to fully capitalise on any free trade deal with China.

Mr Finlay spoke at a Rural Press Club of Victoria breakfast last month, two days after returning from a trip to China with Federal Agriculture Minister Barnaby Joyce and Australian Dairy Farmers Presi-dent Noel Campbell, among others.

The key theme of the trip was food security.

“China wants to do an agreement with us as much as we do with them,” Mr Finlay said.

Mr Finlay said China placed huge importance on food security, food safety and quality and any lapse from Australia would damage our reputa-tion and potential exports.

Mr Finlay also said farming sys-tems in China were very advanced.

“That’s why R&D funding is crit-ical in Australia to help us retain a competitive edge,” he said.

As an example, the Australian

delegation visited a Chinese dairy farm. After taking part in an extensive biose-curity cleansing pro-cedure, they watched cows being milked in a high-tech dairy – but only through glass that separated them.

“There were 2300 dairy cows at this particular dairy we visited, and that com-pany has 50-60 dair-ies of a similar size,” he said.

“Biosecurity was paramount.”

Much of the discus-sion in China focussed on beef and dairy, he said.

The delegation had to assure the Chinese that although Australia is a huge country in terms of land mass, it would not be able to swamp Chi-nese markets with produce.

Most parties they met were wor-ried Australia could flood China’s markets with food.

Mr Finlay said Australia should aspire to be the deli of China and that the opportunity for value adding was “enormous”.

He said Australia should aspire to exporting 90% of all food and fibre produced.

“That would mean Australian agriculture is growing strongly,” he said.

And while all the focus has centred on China, Mr Finlay said Indonesia also has huge potential for Australian exports and should not be forgotten.

Mr Finlay said farm-ers could not have asked for anything more from Minister Joyce.

“To see the way the delegation and Barnaby Joyce was received was amazing,” he said.

“A good agreement with China will define agriculture in Australia for the next 20 years - it’s that simple.”

On another note, Mr Finlay said it was concerning that the Govern-ment’s agricultural green paper had not been released.

There have been 680 submissions for the white paper and the green paper was meant to be released in June.

“It hasn’t been released and that’s a concern,” he said.

NFF president Brent Finlay: R&D funding is critical to help Australia retain a competitive edge.

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4 // NEWS

WA families sign direct with WooliesWOOLWORTHS HAS bypassed the three Western Australian proces-sors and signed two prominent farm-ing families to supply milk for a new “regional” milk brand.

The Noakes and Evans families will supply 10 million litres of milk annual for Woolworths’ Farmers’s Own brand.

The supermarket launched the milk brand in its 89 WA stores this month. The Farmers’ Own brand has also been successfully sold through-out its NSW stores. Milk is sourced in NSW direct from farmers in the Man-ning Valley.

Peter Evans – a director with Aus-tralian Dairy Farmers - said both fam-ilies were being paid a premium price under the new contract.

They have signed rolling three-year contracts.

The supermarket has contracted Brownes to process the milk.

Woolworths is utilising “provin-

cial” branding that is proving increas-ingly popular in Australia and across the world.

Peter Evans told ABC Radio this was an important element in their decision to sign with the major supermarket.

“We are being paid a premium but the real issue is in European coun-tries, and I think the same trend here, is the consumer is becoming much more aware of where there food is coming from,” Mr Evans said.

“They want to know the sources of the food, and we see this as a con-tinuation of that theme, and are very happy getting closer to the customer and the consumer.

“I think (the brand) will become established and hopefully move onto other products where consumers can come into Woolworths and identify where their food is coming from.”

Mr Evans said the milk would be sold at a reasonable price in the

supermarket that was sustainable for all those in the supply chain.

Brad Noakes said he hoped cus-tomers would see this as an alterna-tive to $1/litre milk Woolworths sells in its stores.

“If what Woolworths was doing was available to all farmers, there would be a lot more people jumping on board,” he said.

The brand will soon be in compe-tition with the WA Farmers brand, which will be sold in Coles stores from November.

WA Farmers will launch the brand at the Heart of WA dinner on Novem-ber 19.

WA Farmers worked with Coles and processor Harvey Fresh to estab-lish the milk brand, with a portion of its profits returning to WA Farmers to be used for market development.

Once launched, it will be avail-able in about 80 Coles supermarkets across the state.

BEGA CHEESE has signed a $100 mil-lion supply and distribution agreement with Chinese retailer Chongqing General Trading Group to supply Bega-branded UHT milk to China.

The agreement is expected to generate around $100 million worth of revenue for Bega over five years. Bega reported reve-nues of $1.07 billion in 2013-14.

Bega Cheese CEO Aidan Coleman said the partnership would provide Bega with further opportunities to capitalise on the booming demand for dairy products in China. The Chongqing municipality in Southwest China is one of the fastest grow-ing regions in China.

It has a population of 32 million people and GDP growth in 2013 of 12.3%.

CGTG is the leading retail group in the region, with a 50% retail market share across food and general merchandise.

On hand in Chongqing from Bega for the formal signing were Bega executive chairman, Barry Irvin, Mr Coleman and sales and marketing general manager, Paul van Heerwaarden.

“The company is very pleased to form this partnership with CGTG and it is a strong endorsement of the reputation of the quality of Bega product and the bios-ecurity of Australia as a dairy producing nation,” Mr Coleman said.

“We see this as a first step in develop-ing a comprehensive UHT offering in the future”.

CGTG chairman, Dr He, said China’s consumption of milk and dairy products was rapidly increasing.

“CGTG is delighted to work with Bega to satisfy that need,” he said.

The signing of the Chongqing agree-ment represents an expansion of Bega Cheese’s products entering the Chinese market.

The company has had a presence in the Chinese market for over 14 years.

The Bega brand has been sold in China since 2000 while its wholly owned sub-sidiary, Tatura Milk Industries, has been a major Australian exporter of high value milk powder, infant formula and cream cheese to the Chinese market.

Bega signs $100m deal with China

LION HAS said it will retain its current prices for southern sup-pliers, even as Murray Goulburn and Fonterra revise their season forecast.

Lion suppliers who chose the company’s fixed price (one of three options) of $6.40/kg milk solids can be assured this won’t change, according to Lion a gricultural pro-curement director Murray Jeffrey.

Lion suppliers were able to choose from three options: vari-able pricing with an opening price of $6.35/kg MS; a fixed price for

2014/15 of $6.40/kg MS; or a three-year contract at a fixed price of $6.14/kg MS for up to 50% of a sup-plier’s total volume.

Mr Jeffrey said the new terms have helped them increase south-ern supply and that they would not be changed despite the fall in global prices.

Late last month, Fonterra Aus-tralia announced its closing price could be up to 50 cents a kilogram of milk solids less than expected with the processor changing its forecast to $5.80-$6kg/MS.

Its original closing forecast was between $6.10-$6.30kg/MS.

The move follows Murray Goul-burn’s revision of its forecast price in August, from $6.15-$6.30kg/MS to its opening price of $6kg/MS.

Murray Goulburn told suppliers a week earlier that it would main-tain its opening price of $6kg/MS, after cutting its closing price in August.

The co-op originally had a fore-cast closing range of $6.15-$6.30kg/MS before reducing this to $6kg/MS.

Lion maintains strong price

CGTG chairman, Dr He, and Bega CEO Aidan Coleman seal the deal.

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Dai ry NewS aUSTraLia october 2014

news // 5

AUsTRALIAn HAY and crop produc-tion is likely to be down about 10% this year, placing pressure on prices and sup-plies for dairy farmers.

Some regions have been worse hit than others – southern Western Austra-lia being a rare positive exception – but the lower yields are likely to lead to vol-atility in pricing and increased demand over coming months.

While a good drop of rain could ease the concerns, winter and spring rains have been disappointing after a gener-ally good start to the season.

The latest Dairy Australia hay and grain report says most of the east coast of Australia would benefit immensely from more spring rain, except for the northern markets where rain would only bring har-vest quality downgrades.

“More rain will mean higher produc-tion in south eastern Australia which would take a lot of pressure off prices,” the report states.

“No more rain and stocks will be tight again which will create local volatility in prices throughout the year.”

The lower than expected growth has been experienced broadly across Austra-lia, from major crop growing regions to individual dairy farmers wanting to pro-duce more home-grown feed.

Industry development manager for the Australian Fodder Industry Associa-tion (AFIA), Caitlin Scholfield, said hay shortages were looking likely this year.

The AFIA is advising hay buyers and the dairy industry that it believes hay supplies will be short this year, in particular protein hay supplies with Lucerne and vetch likely to be well back due to a combination of increased demand from the domestic market and reduced supplies.

“That’s a trend we’re seeing right around the country,” Ms Scholfield said.

One of the worst hit areas is the Wim-mera-Mallee in Victoria. “They’ve had a tough season and it has dried up quickly which has affected the vetch crops in par-ticular,” Ms Scholfield said.

Some parts of South Australia have also had a dry finish to the season which is likely to impact on Lucerne supplies.

The price of water in Victoria and parts of New South Wales is also having an impact. Ms Scholfield said irrigated Lucerne played a big role in supply but because opening water prices were very high some farmers could shy away from Lucerne this year.

“That will impact on prices,” she added.

Ms Scholfield said she was not willing to commit to pricing at this stage but said that as the hay season progresses and the supply situation becomes clearer prices are likely to go up.

She encouraged farmers to keep a close eye on Dairy Australia’s hay price report.

“Between now and Christmas we are likely to see the price change for hay as conditions dry off and yields fall back, coupled with extra demand from the export market and from northern Aus-tralia where dry conditions are already

hurting,” Ms Scholfield said.“There is increased competition

this year and it will affect the domestic market.”

Despite an upswing last year, hay pro-duction has been on a downward trend over the past decade.

Ms Scholfield said conditions were start-ing to impact and throughout Victoria farmers were putting livestock back on pad-docks that had been locked up for hay and silage.

“We expect pasture hay and silage will be down this year,” she said.

Ms Scholfield said pasture hay and silage are expected to be down this year but not drastically.

Australian Crop Forecasters general manager Ron Storey said that nationally crops were down about 10% on last year.

“Nationally we’ll end up with a lower figure than last year for sure,” Mr Storey said.

There are some regional areas such as southern Western Australia doing well,

but they are counteracted by regions experiencing lower than average pro-duction.

Southern Queensland and north-west New South Wales remain poor for a second consecutive season as drought conditions continue, while the Wimmera-Mallee region of Victoria is experiencing a bad year with some crops cut

to hay and others failing or producing poor results.

“They are the two bad areas but there will be other areas below average,” Mr Storey added.

Despite the lower yield, Mr Storey there would be no overall impact on

supply of grain for dairy farmers.“Being down 10% is not a problem for

the overall supply of grain. The issue is where the grain is,” Mr Storey said.

In Victoria supplies will be tight because of the poor season in the Wim-mera-Mallee.

“You could liken that to what has hap-pened in northern New South Wales and southern Queensland for the past two years. What it means is that the grain has to be imported to those regions where the demand is.”

Mr Storey said there would be more grain imports from New South Wales and South Australia to cover the short-ages. “That will be a higher cost to the end customer because they will be paying more for freight,” he added.

Western Victoria and north-east Victoria dairy crops should be around average “but when they need to top it up, particularly in the Western District where they normally draw from the Wimmera-Mallee, it’s going to be harder to find.”

Hay, crop production down 10%RIck BAYne

The view from the cabin of south Australian dairy farmer and contractor, James Stacey, on October 8.

“Between now and Christmas we are likely to see the p rice change for hay as conditions dry off and yields fall back.”

– Caitlin Scholfield, AFIA.


6 // NEWS – FOREIGN INVESTMENT

AUSTRALIAN DAIRY has hopefully “turned the corner” and is poised to lift production, says Ian Halliday.

Milk growth is forecast at 2% but Dairy Australia hopes to lift growth up to 5%, but this will come only from prof-itable dairy farmers.

“We are forecasting 2% growth but we are looking at ways of accelerating growth,” he told Dairy News Australia.

“We need to get upwards of 3-5% growth on an annualised basis, if we compare against New Zealand where there has been an average 4-5% growth

last decade.“About 50% of this growth in New

Zealand has come through conversions in the South Island; we are not going to see that overnight but we would like to lift growth to between 3-5%.”

Mr Halliday believes good conditions will lift growth this season.

“We had the drought, GFC, floods in some regions and the high Austra-lian dollar associated with the resources boom that caused our production to slump. Hopefully we have turned the corner.”

DA wants 5% growth

Foreign investment could boost national milk supplyCAPITAL INVEST-MENT in Australian farms is vital to lift the national milk production, according to Dairy Austra-lia managing director Ian Halliday.

Dairy Australia chief executive Mr Halliday wants investors in the “pre-farmgate area” rather than processing.

“Processors have been spending money on new technologies and plant upgrades,” Mr Halliday told Dairy News Austra-lia. “Processors are saying to us, ‘we can go and seek capital for the processing sector but the challenge is how we follow up that investment… with milk.”

He says capital inflow into farms is vital to lift the national milk pro-duction; in 2000 Aus-

tralia produced 11b L of milk; last year it produced 9.3 billion L.

Mr Halliday says farm-ers no longer see bank debt as the only means of raising capital; they are turning to other sources. “Sharefarming, leasing and equity sharing models are also now increasing in prevalence. They realise the equity stake an inves-tor takes in an existing farm business may allow for a smooth succession plan – to pay the parents out their share of the busi-ness and partner the next generation.

“An optimal outcome would see corporate inves-tors thinking more like a top quartile dairy farmer in terms of production systems, growing technical skills, equity levels, asset price cycles and the like.”

Like New Zealand, the Australian dairy sector

is attracting worldwide interest, not only from China. Mr Halliday says it doesn’t see Australian farmers competing with their New Zealand coun-terparts for the investor’s dollar. With strong world demand for dairy, there is room for everybody.

“It is how we all can take part in the growth of dairy on a global basis; all dairy regions are looking at Asia, and Australia and New Zealand are no dif-ferent.”

Mr Halliday says Aus-

tralian dairy has some competitive strength over other producers, e.g. “a perfect mix” between domestic market supply and exports.

SUDESH KISSUN

“With roughly half what our farms produce ending up overseas, and fully exposed to the prices of Global Dairy Trade, this keeps us market-exposed and match-fit. But with roughly half our milk stay-ing for consumption here at home, we benefit from

some insulation from global volatility, unlike, say, New Zealand where 95% of their produce heads off to the interna-tional marketplace.

“So despite global vol-atility now, the long term opportunity of investment in our dairy farms remains

compelling.”Mr Halliday says diver-

sification of sales chan-nels also reduces risk. “In an overseas market where you’re selling products in one channel and you have a quality issue or supply issue, then overnight the channel can close down.”

Ian Halliday

Federal Trade Minister Andrew Robb at last month’s Australian Dairy Farm Investment Forum.

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NEWS // 7

DOES THE Austra-lian dairy industry need a ‘national champion’ like Fonterra to pull it out of the doldrums?

Some industry leaders feel the time has passed for a super dairy co-op; some also caution against getting carried away by the single desk-seller concept.

Last month Dairy Aus-tralia hosted an invest-ment conference in Melbourne in a bid to lure capital inflow onto farms that would eventually lift milk production; many references were made to New Zealand’s suc-cess in dairy and Austra-lia’s decline over the last 10 years.

In the late 1990s Aus-tralia produced the same amount of milk as New Zealand, now the world’s biggest dairy exporter. While New Zealand’s dairy industry raced away, Aus-tralia’s flagged; its milk production has fallen about 20%.

Burra Foods chief exec-utive Grant Crothers told the conference that the time for a national dairy champion had well and truly passed. The oppor-tunity had been there 20 years ago when farmer co-op Bonlac Foods was formed; the company lost money and was taken over by Fonterra.

Other dairy proces-sors were also snapped up by foreign buyers – National Foods in 2004 by San Miguel and then in 2007 Kirin Holdings and Warrnambool Cheese and Butter by Saputo this year.

Crothers believes Australian dairy is not structured for a single desk-seller concept. “I think the danger is get-ting too carried away with the New Zealand model; after farmgate the model is quite different. We’ve got a much bigger domestic market.”

But the Australian dairy industry needs to get its act together.

Mr Crothers says it will take investment in new technology and innovation to find its niche on the world market. “We make up 7% of the world’s trade and we’re the fourth-larg-est trader; if we don’t get going Argentina will over-take us and we will drop to fifth.”

Greg McNamara, chair-man of Norco Foods, one of the few remain-ing dairy co-ops in Austra-lia, believes the Australian takeover laws create an unequal footing for local processors.

The recent battle for WCB saw two local bid-ders miss out.

He points out a foreign player could end up creating a national champion.

“While this may not be a bad thing for our economy, the national champion may not be Aus-tralian-owned so there are challenges for anyone trying to create a national champion.”

Australian Dairy Farm-ers director Chris Griffin suggested a joint venture between Australian dairy processors instead of a creating a national cham-pion.

“A JV could be tailored to give the best returns; processors would invest jointly rather than each one going out on its own with the risk of big capital expenditure.”

Murray Goulburn this year argued for a national champion or supercoop-erative during its bid for WCB.

MG chairman Philip Tracy says a national champion should be to drive efficiency and extract value from the marketplace. But he also cautioned against compar-ing the Australia and New Zealand dairy industries.

New Zealand’s dairy industry is a vital part of the economy and is a “huge focus” of the Gov-ernment. “It is on the front page of the news-papers every day; when something happens

New Zealand model unlikely for AustraliaSUDESH KISSUN

involving Fonterra every-one in the economy is

engaged. It’s their number one industry.”

MG chairman Philip Tracy with Ling Qin at the Dairy Australia Investment Forum.

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8 // NEWS

Price recovery some way off – bankEVEN BEFORE last week’s GDT drop Rabo-bank was warning a dairy price recovery could be a while away yet.

Speaking on the release of the bank’s latest Dairy Quarterly report, direc-tor dairy research New Zealand and Asia, Hayley Moynihan, said: “…market rebalancing will be a slow

ANDREW SWALLOW

Rabobank’s Hayley Moynihan

says “market rebalancing will be a slow process.”

THE WEATHER in the big dairying countries will chiefly determine how long the present oversupply of dairy products lasts.

DairyNZ general manager policy and advocacy, Kimberly Crewther, says it’s a guessing game how the present crisis will be resolved.

Geo-politics will be a factor, but global weather may well determine how much milk is produced and where.

“It isn’t usual for every country to have good weather at the same time, so a more normal weather year will help the rebalancing of dairy product stocks.

“Certainly the weather conditions globally in the next year will deter-mine how mu ch additional production comes through or whether production goes down again.”

The present situation stems from

a number of different factors in the international market, she said.

“We’ve had very good production years in most countries that export dairy produce.

“Europe’s production is up 5%, a significant volume given that Europe is the largest dairy producer.

“The US is also up and New Zealand had a good production trend this year, so there’s a lot of additional product in the market.”

The stockpile of dairy products in China and food bans by Russia all have contributed to the present situation.

Dairy products produced in Europe that normally go to Russia have entered the world market and it will take time for such stocks to be re-balanced, she said.

Notwithstanding the present crisis, the long term demand for dairy prod-ucts is good.

Weather fuelling global oversupply

process and price recovery looks some way off ”.

“Rabobank firmly believes the current down-turn in prices is cyclical, as agricultural commod-ity prices often are, rather than a more fundamen-tal structural change, and farmers will work hard to ‘wait out’ the lower price cycle by trimming less productive farm expendi-ture or deferring long term cap-ex decisions,” she added.

Rabobank’s report cites exceptional milk pro-duction growth in export regions outstripping weak domestic consumption, and China’s reduced for-ward buying as the drivers of price falls.

But milk production growth in the ‘big seven’ export blocks – the EU, US, NZ, Aus-tralia, Argen-tina, Brazil and Uruguay – will slow consider-ably in the next six months. Combined, their produc-tion was up 5.1% in the first half of this year, but it’s forecast to

increase only 2.7% in the second half and just 1.6% in the first half of 2015.

Meanwhile dairy con-sumption will slowly improve as incomes increase, employment grows and dairy retail prices fall.

“The combination of these production and con-sumption factors will see growth in exportable sur-pluses slow from about 4.5b L in the first half of 2015 to 2.2b L in the second half – a 6% year-on-year rise – with a sim-ilar rise factored in for early 2015,” says Moyni-han.

While it’s not expected, prices could recover more quickly if Russia removed its ban on dairy imports or Chinese import buying resumed earlier and more strongly than expected, she adds.

However, “further downside risks” lie in the EU’s removal of production quota in April 2015.

US producers have

been insulated from recent price falls as domestic prices remain

buoyant and, with feed prices plumb-ing new depths, dairy farming remains highly profitable for them.

“Even if their prices

were halfway between where these [world] prices are and what they’re cur-rently getting it would still be profitable,” Moynihan said.

However, for US and EU processors exports will not be profitable at current market levels, so they’re likely to be building inventory which, when prices start to recover, will be unloaded onto international markets, slowing the recovery.

The fact the whole milk powder price in the near position (November) rose in the latest GDT event is a sign some buyers are operating hand-to-mouth, but with the December-April positions all down there seems little appe-tite among buyers to build inventory, adds Ms Moyni-han.

“We need to see them start rebuilding invento-ries for it to turn around.”

some way off – Rabobank’s Hayley Moynihan

says “market rebalancing will be a slow process.”

While it’s not expected,prices could recover morequickly if Russia removedits ban on dairy importsor Chinese import buyingresumed earlier and morestrongly than expected.

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NEWS // 9

TWO HUNDRED industry representatives from across Australia’s dairy regions gathered in Gippsland last month to celebrate 10 years of Dairy Australia’s Cows Create Careers.

The Cows Create Careers program has grown from nine Gippsland schools in 2004 to over 209 schools across 23 dairy regions in 2014.

Dairy Australia managing director, Ian Halliday, said 51,855 students have learnt about the dairy industry and dairy career pathways through the program.

The school-based project has helped educate students and teachers about careers in the dairy industry in a very hands-on way.

Over a six week period, secondary students rear two three-week-old calves at school and the school is provided with dairy

industry curriculum at no cost.

The program also includes volunteer dairy farmers and industry advocates who visit schools to share their industry knowledge with students throughout the project.

Mr Halliday said the program has gained huge support from dairy farmers and industry advocates across the nation. Last year alone volunteers gave 1,162 hours of their time across 23 dairy regions.

Program advocates, and volunteers, Grant and Jane Sherborne, who farm at Burrawanga in the NSW southern highlands, say it helps lift the perception of dairy.

Their involvement in the program takes them into local and Canberra schools to help students raise calves and learn about the importance of, and opportunities in, the dairy industry.

“We’re trying to get

10 years of classroom cowskids out of the idea that ‘if I can’t get into anything else I might be able to get a job on a farm’. We show them how much is involved in dairy farming,” Mr Sherborne said.

“The perception of dairy needs to be lifted. The student we have here loves what she’s doing but she doesn’t know how to tell everyone that she’s gone to uni and is not using that degree.

“It’s got to have more appeal to their peers.

If you say you work in a dairy they might think that you can’t do anything else.

“There’s a terrific amount involved in dairy. We had a policeman work here for a while and he found it was a bit beyond him with all that’s involved in animal health and working with cattle – he said police work was far easier.”

Cows Create Careers started in 2004 with dairy farmers in the Strzelecki Lions Club in Victoria.

Cows Create Careers advocates Grant and Jane Sherborne with their children, William, Samuel and Georgia.

NSW FARMERS Grant and Jane Sherborne want to dispel the myth that dairy farming is just a job of last resort for strong lads, and their farm at Burrawang proves that’s no longer the reality.

Eldest child Georgia, 19, now works with her par-ents and the farm’s roster of casual employees is almost exclusively female.

The Sherbornes never set out to prove a point by hiring female workers; it’s just evolved that way.

“Girls seem to be the only applicants we have at the moment,” Mr Sherborne said.

The female workers have ranged from international backpackers to university students and they consis-tently help the Sherbornes to maintain their high stan-dards for quality milk production and environmentally efficient farming.

“Maybe if you go back years ago, farm work was thought of as a basic labouring job,” Mr Sherborne said.

“But one of the reasons I employ girls is that they don’t have to be physically strong to do this today; they just have to be smart and want to do it.”

Mr Sherborne believes the job market would improve if dairy was seen in the positive light it deserves.

In addition to Georgia, son William is finishing Year 11 at school and will follow in his sister’s footsteps on the farm.

Youngest Samuel, 14, is still at school as well but already has his eyes on entering the farm business through calf rearing.

“Georgia’s been on the farm for the past 12 months,” Mr Sherborne said.

“She could have gone to uni but she wasn’t keen. She said the farm is what she’d like to do and she seems to be more interested in it as time goes on.”

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The Gardiner Foundation provided seed funding in 2005 to expand the

project to all dairy regions in Victoria, and in 2006, Dairy Australia

supported the growth of the project to other states of Australia.


10 // NEWS – QDO CONFERENCE

QUEENSLAND’S EXISTING farmers would need to double pro-duction just to meet rising demand for dairy caused by population growth in the State.

These figures were revealed by the Queensland Dairyfarmers Organisation’s executive officer Adrian Peake at the farm body’s Toowoomba conference held last month.

Mr Peake said increased production would only be achieved through on-farm invest-ment.

However, a survey recently conducted by the QDO and unveiled at the conference revealed only 24% of respondents believed they would still be dairying in five years’ time.

There are now 471 dairy farmers in Queensland and 43% of them responded to the survey.

The survey found that only 4% said they were very confident in the future of the industry, 22% said they were confi-dent, 37% were uncertain, and 37% were not confi-dent.

Those farmers who

indicated they were leav-ing nominated ‘lack of profit’ as the biggest reason, at 84%, which is 16% higher than the pre-vious survey in January 2014.

Sixty seven per-cent of respondents said their milk cheques were less than their monthly accounts.

To stay dairying, 39% want more than 60 cents/litre while 43% more than 65 c/litre.

Farmers also said they would like more flexibility with the rest of the supply chain, particularly when it comes to having the opportunity to supply milk to more than one proces-sor, which they cannot do now.

Some 61% of respon-dents said they would support a ‘dual-sup-ply’ option, while 74% also expressed an interest in a Queensland-wide milk supply co-operative.

Mr Peake said Queensland has lost 120 farm-ers since Coles launched its $1/litre milk in Jan-uary, 2011 – the equivalent of $360m of invest-ment in the indus-

try.He said processors

have had to discount their branded milk in a bid to recapture market share, further eroding returns to farmers.

Dairy consultant Chris Phillips, formerly with Dairy Australia, told the audience discounted milk will feature in Australia for years to come.

“Coles told investors at recent meetings they are committed to discount strategies, or price leader-ship,” Mr Phillips said.

He also told farmers prices would not meet their expectations.

“Most world market returns yield below the current northern dairy industry milk price,” he said.

Norco deputy chair, Tony Wilson, told the audience the co-op’s sales

of branded milk were growing each month. Norco is using the con-cept of provenance to market its milk.

“It’s growing but it’s tough work while $1 milk remains,” Mr Wilson said.

When asked by a member of the audience why Norco signed with Coles to provide milk for the Coles private label, Mr Wilson was pragmatic.

“Retailers are here to stay, and if you want to bottle milk, you need to work with them,” he said. “The Norco contract to supply Coles is a good one.”

Norco hopes to build its fresh milk exports to China to 20 million litres a year but Mr Wilson said its branded ice cream exports had the potential to be bigger than its fresh milk exports.

STEPHEN COOKE

Supply gap too much to bridge

Dan Dickeson, Lion, with Ged Mullins and Rachael Parkes, Leyburn.

Bill Gulbransen, Mt Mee, Jason Rozynski, Gympie, Tony Gault, Harlin.

Gary Rozynski, Gympie, Craig Findsen, Parmalat, Christine Clewley, Kulpi, Andrew Taylor, Parmalat.

Former QDO executive offi cer Adrian Peake; QDO president Brian Tessmann; vice-president Ross McInnes.

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12 // WORLD

EU farmers pumping milkAN INCREASE in milk volumes expected as a result of the abolition of the EU’s milk quota are already showing up, says Arla Foods chief executive Peder Tuborgh.

Speaking at the release of the European co-op’s half year results, Mr Tuborgh noted that more

milk was coming not only from Arla farmers but from other EU farmers intent on growing their businesses.

“The extra milk is flowing into our produc-tion sites and putting us under pressure to deliver a long-term competitive milk price for growing vol-

umes,” he says.High milk prices have

boosted milk production and world supply has been at an all time high, trig-gering a slide in raw milk prices.

Mr Tuborgh says Arla showed strong perfor-mance in the first half of 2014 and delivered record

earnings for its farmer owners. But downward pressure on the world market will force down the price paid to farmers for the rest of 2014, he warns.

“The current chal-lenges must be seen in the perspective of a bigger and promising long-term out-look for dairy companies.

The world’s middle classes are growing, more con-sumers can afford dairy products, and they create a stable demand for healthy, nutritious and safe milk products.”

Arla Foods’ revenue grew by 11% to $8.4 billion in the first half of 2014; from $7.5b in first half-year

2013 due to growth in all markets and global price increases. This allowed Arla to pay suppliers a record performance price of 70c/kgMS, compared to 61c/kgMS in first-half 2013.

But Arla says the trends in global raw milk price are pointing downwards fast, so the co-op has low-ered its expectations, though it expects 2014 will be a better year than 2013 which already was a record year.

“We are pleased to see our strategy for creat-ing more growth outside Europe is working and we have accelerated growth outside our European core markets. Our over-all organic growth is satis-factory, but we are facing a difficult period and tough market challenges.”

Arla says during the first half year it grew sales in target growth mar-kets. The Middle East

and Africa grew 17%, rev-enue doubled in China and in Russia the market showed good progress. But Russia’s import ban on foods from countries that imposed sanctions on it will be a challenge. Sales in Russia amount to about 1% of Arla’s total revenue.

Arla also reported a spike in sales of its house brands. During the first half year of 2014 Arla, Lurpak and Castello brands they grew 7% by revenue year-on-year. Arla Foods’ sales of milk pro-teins and value-added ingredients grew 8%.

Peter Tuborgh

Arla eyes Egypt’s growing marketARLA FOODS is setting its eyes on Egypt, bidding for a majority stake in Arab Dairy Products Co, a listed com-pany based near Cairo.

Due diligence is underway; Arla is bidding for up to 100% of Arab Dairy shares.

The co-op says it has access to details of sensitive aspects of Arab Dairy’s business not published in its annual reports.

Arla’s senior vice president Middle East and Africa, Rasmus Malmbak Kjeldsen, says its bid is non-binding but has now become official because Arab Dairy is listed on the Egyptian exchange. “The company seems well-aligned with our ambitions in Egypt, and we are looking at details before deciding whether or not to purchase a share of the business.”

Arab Dairy is said to be strong in retail and food service, which suits Arla’s focus on these sales channels. An acqui-sition could place Arla in the top six suppliers to Egypt’s dairy sector and win it 13-15% of the cheese market.

“Arab Dairy’s local production is based on recombin-ing – adding water to milk powder then processing this into cheese,” says Mr Kjeldsen. “About 80% of this milk powder is imported to Egypt. So there is a lot of potential for using milk supplied by owners in value-added products which we can sell in a growing market.”

Egypt is among the biggest dairy markets in the Middle East and North Africa, with 90 million people. Many are switching from home- or locally produced dairy products to those made and packed at commercial dairies and sold in shops.

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WORLD NEWS // 13

NEW ZEALAND is warming to the idea of housing cows but a debate looms on the issue, says the outgoing chairman of HerdHomes, Dr Andy West.

Mr West, vice-chancel-lor of Lincoln University, resigned last month from HerdHomes board after four years.

He says farmers and scientists are becoming more ready to accept the need for cow shelters. The debate will be whether or not cows should be housed 365 days yearly, 24 hours daily.

“The public has wanted chickens out of cages and pigs out of crates, though of course often both of those species remain permanently housed,” he said.

“Will the NZ public want cows to spend at least some time of a day or a season on grass, and if so how much? That is a yet-to-be-answered question.

“Cows are permanently housed in some parts of the world and goats are often permanently housed in New Zealand.

“It will be interesting to see if 24 hour/365 day hous-ing of cows will ultimately be acceptable in New Zea-

land. We often like to market our food as pro-duced from animals that thrive out in pastures and imply this is natural, thus so too by implication is our food.”

Mr West says he cannot say whether the public and the Government will allow the country to move away from that market posi-tioning.

HerdHomes founder Tom Pow believes cow shelters accessible to ani-mals most of the year will be common; full-time housing or full pasture-grazing will also be prac-tised.

Mr Pow says cow shel-ters will allow flexibility: cows can be inside 24/7 for short periods or just stroll back from the paddock for shade and a feed top-up.

“Also for managing environmental caps it is easy; don’t drop stocking rates or production limits, just de-stock at pressure times. “That could be two-hour, twice-a-day grazing to reduce nitrogen from urine or a similar time on paddocks during high rain-fall. Even the collected effluent can be used as off-farm fertiliser applied to a neighbour’s farm to keep under controlled levels of N and P.”

Critics of housing cows say it is a step closer

to ‘factory farming’ and a move away from pasture-based farming, the corner-stone of dairying in New Zealand. But West points out the “total package” of cow shelters.

“In the case of Herd-Homes this partial hous-ing system of farming was invented by a New Zealand dairy farmer to protect soils from compaction and pastures from overgrazing.

“Other benefits were then developed such as using the HerdHomes shelters to protect cows from conditions too hot or too cold, for calving, feed-ing, effluent capture and, later, sophisticated envi-ronmental management. So there is no obligation to use a shelter or barn for what is still rather quaintly

termed supplementary feeding.”

Mr West says he thinks shelters are the future of dairy and aspects of beef farming.

Cows don’t have to be on a pasture for 24 hours a day to eat enough, he adds. “So having them off pas-tures and in barns for part

of the day – and at times in winter maybe all day – pro-vides significant benefit.

“If you give cows a choice they will often choose shelter. Moreover, barns that efficiently cap-ture effluent [are impor-tant for managing] within increasingly precise envi-ronmental regulations.”

Debate looming on housing cows in NZ

Debate on whether cows should be housed is coming, says Dr Andy West.

COWS SAVE ENERGYANDY WEST says cow shelters help cows save energy.

HerdHomes shelters protect cows from ex-treme cold and hot weather, he points out.

“One reason farmers can record up to 25% increase in profitability after about three years of effectively using a HerdHomes farming system is that cows put less energy into staying warm or cool and more energy into producing milk.”

SUDESH KISSUNIRISH DAIRY farmers have been warned to focus on profit, not production for production’s sake in the run-up to quota removal.

Speaking at Teagasc’s Winter Milk conference in Co. Wexford earlier this month, Cathal McAleer, a private agricultural consultant from Co. Tyrone, said that in Northern Ireland, where surplus quota has meant no constraint on production, many pro-ducers have made the mistake of chasing milk yield per cow in the past decade.

Output per cow has increased but they’re get-ting less milk from forage, grassland management’s declined and herd infertility’s increased, as have inputs. Mr McAleer said the main beneficiaries of the increased production were input suppliers, not farmers.

With the brakes coming off production in Eire with the removal of quota in April 2015, he urged the 200 or so farmers at the conference to aim to retain the maximum milk cheque, saying expanding profit is a form of farm expansion and it needn’t necessar-ily involve more cows.

Teagasc’s Joe Patton said winter milk producers should use the removal of milk quotas as “an oppor-tunity to re-imagine the farm business”.

While each has options – stay the same, switch to spring production, increase herd size or improve effi-ciency – economic analysis shows only by “address-ing on-farm efficiency can profit and cashflow can be improved”.

He urged farmers to “take responsibility for onfarm decisions relating to feed by acquiring the necessary knowledge” as feed is the biggest cost on winter milk producing farms.

Two winter milk producers who spoke at the con-ference, Glenn Forde and Larry Hannon, noted the importance of having “the right cow” for the job and are focussed on improving herd genetics to get a better calving pattern to supply their winter con-tracts.

Both said they’re committed to winter milk pro-duction and they’re working on improving soil fertil-ity and grassland management skills but would like to see more clarity from processors.

Profit before production, Irish urged

Irish invest in pizza cheese THE IRISH Dairy Board Cooperative has bought Span-ish pizza cheese maker Luxtor SA, contracted long-term to supply cheese to its former owners Telepizza, the world’s fifth-largest pizza chain.

The IDB says the deal, via its subsidiary IDB Espana, strengthens its position as a global provider of cheese to the quick service restaurant (QSR) and food service sec-tors. It has made similar moves into US and UK special-ised cheese supply.

It opens a fast route to market for Irish dairy products, important in view of the milk quota removal in 2015.

IDB chief executive Kevin Lane says the deal is in line with the co-op’s plans to grow its business in Southern Europe, where milk is short.

“IDB Espana trade and assets [bought from] Luxtor… will provide expert cheese solutions for the pizza sector that complement cheese technologies we’re developing in our other international businesses.

“Its location gives a trading and sales hub to service our growing Southern Europe customer base.”

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14 // OPINION

Ruminating

mIlkINg It...

EDItORIAl

Sale-o!A PANEL of some of the country’s largest dairy busi-nesses told it as they saw it at the Australian Dairy Farm Investment Forum last month.

The likes of Allan Mc-Cracken, Rod Banks and Kirsti Keightley were frank and honest with their tips on successful investment, but it was Alanvale Dairies owner Garry Morrison who drew the biggest laughs.

Garry told the crowd that when he bought his first farm in south-west Victoria at auction, agents were quick to tell him it was a tightly held area and that he wouldn’t get another.

“We had locals knocking on the door the next day!”

During question time, one Chinese delegate asked Dairy Australia direc-tor Jeff Odgers a long ques-tion – all in Mandarin.

Fair to say Odgers looked stunned, until the delegate repeated the question in English, much to his obvious relief.

Deadline? What’s the rush?PLENTY OF people drew a sharp breath when Prime Minister Tony Abbott declared 12 months ago that the three FTAs being negotiated with China, Japan and Korea would be completed within 12 months.

It would be fair to say Trade Minister Andrew Robb was among them. Robb had been involved in international trading while in business before he entered parliament, and is very aware of the com-plexities it entails.

“The Chinese are very tough negotiators,” he told those present, including 50 Chinese delegates.

“Years ago, I was told by Chinese negotiators: We’re on a 100 mile jour-ney and we’re 95 miles in - so we’re halfway there.”

Follow the script, pleaseIAN HINDMARSH never took a backward step on the rugby league field and he’s still calling it as it is now he’s hung up the boots.

Hindmarsh and his cows were the star attrac-tion as Australian Dairy Farmers and the Austra-lian Dairy Industry Council held a media event on the lawns outside Parliament House.

The seventh-generation farmer told ABC Radio that milk prices hadn’t risen in 30 years, input costs had soared and they were fac-ing another tough season.

“If I had my time again ...I would have stayed out of farming and just had a few cows out of interest,” he said.

“I think there are a lot of easier opportunities to have a nice life than go back into dairy farming.”

They must have known Hindmarsh of all people would call it as it is.

great question, I mean it!IT CAN be daunting at-tending the Queensland Dairyfarmers’ Organisation conference if you’re a pro-cessor, particularly after the decisions of recent years, including the Tier 2 milk.

So we’re guessing Lion’s Nicola Richardson was prepped beforehand in a bid to keep the farmers onside.

The crowd was very civil and keen to hear about Lion’s “Goodness” strategy but it didn’t stop Nicola re-sponding to every question from the floor with “good question”, before providing her answer.

Every farmer would have been feeling very pleased with their particularly clever line of questioning until the very end, when Nicola told the last farmer it was a “good question”, gave the answer, then finished with: “Really good question.”

There’s no topping that.

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AUSTRALIA LACKS a cohesive, national plan on growing milk supply and it will cost us.

Rabobank’s recent report, Australian Dairy – More Milk Mat-ters, said Australia is a favoured exporter because many offshore customers place a strong importance on high-quality, safe prod-ucts with strong traceability across supply chains.

However, the report says quite clearly the sector also needs to be able to match export customers’ growth.

Global demand for dairy is growing but how will Australia meet the requirements of business partners with increasing appetites?

Excitement about a potential Free Trade Agreement with China is at fever pitch but even if the Government can secure a “NZ plus” agreement, it is only the first step.

How do we meet the needs of even a fraction of China’s emerg-ing middle class if we have to truck fresh milk 2000km from Vic-toria to southern Queensland?

There are other countries that will stop at nothing to fill the con-tracts Australia will be forced to decline because of our stagnant national milk supply.

Australia is at a critical stage and industry needs to address it as a whole.

Lion has taken a step in the right direction by offering three-year fixed contracts to suppliers, and has attracted new suppliers as a result. However, they are still short of their national requirements.

The shortfall in Queensland will only increase, so southern milk will continue to be trucked north, instead of exported.

It’s a similar story in WA – where milk has been trucked from SA to meet the supply shortfall.

Processors responded with a price rise, which pleased existing farmers, and this might meet the domestic shortfall.

However, this comes at the expense of growing and supplying lucrative export markets, where growers would see better returns.

The Rabobank report says without improved profitability on farm, the dairy industry won’t see the milk production growth required for the whole industry to tap into the opportunities that lie in regional export markets.

There has been a renewed focus within the industry on profit-ability over production with the expectation profitable farms will increase their supply.

However, growing the national pool can’t all be left to the farmer. Supermarkets and processors – for so long happy to cherry pick suppliers to meet their own needs – must look big picture, if they can.

Australia needs a national plan adopted by all sectors or further opportunities in the shape of expanded high-value exports that will help it grow could well be swept away from us.

National plan for growth essential


OPINION // 15

IN MAY this year I was lucky enough to spend a week in the Netherlands along with 50 other young farmers from across the world to participate in the Rabobank Global Young Farmer Master Class.

We explored many themes including suc-cession of our agricul-tural enterprises, social enabling of emerging agri-cultural economies and the use of data and tech-nologies that will shape our future faming land-scape.

Most importantly we also examined the single biggest issue facing my generation of agricultural producers - food security.

Why is food security such an issue? For the average consumer and primary producer in the developed world food

security sits pretty low on the scale compared to price and quality.

For consumers the question of where the food comes from and the market forces at play behind the scenes are rarely even questioned.

However for the esti-mated one billion people on the planet who are already under fed in 2014 the issue of food security plays out daily.

The world population is set to move above 9 bil-lion by 2050 and agricul-ture across the globe will need to increase produc-tion by an estimated 70% over and above current production to meet the needs of this growth.

Most critical will be achieving this growth with fewer inputs. At pres-ent our annual increase

in global food produc-tion will not keep up with demand as population rises.

So what will this all mean for Australian dairy farmers? As demand for agricultural resources increases so too does the cost of doing business.

We are already seeing very rapid volatility affect-ing our input costs. This will continue as resources become scarcer unless we develop cheaper alterna-tives to current inputs.

As a large consumer of feed grains and other con-centrates, the dairy sector will be challenged by com-petition for these inputs by other traditional agri-cultural production sys-tems.

We will also see a pro-portion of these stock feeds used for meat and

milk production trans-ferred to emerging indus-tries that are more efficient converters of feed to protein.

Markets may look for alternatives to avail-able dairy products if we cannot produce at a price that is competitive to our trading partners.

Australian dairy farm-ers and milk processors must set up their busi-

COMMENTTOM ACOCKS

Rising demand for inputs will challenge dairy

nesses to withstand this expected volatility in our markets.

Opportunities for Aus-tralian producers may arise in many forms.

As the world’s popula-tion grows and begins to generate more income, this will lead to increased global consumption and competition for our prod-ucts.

At a farm level we will see more investment as both private enterprise and state backed organisa-tions look to sure up food security within their bor-ders.

These businesses are all looking for opportuni-ties in countries such as Australia.

What are they are look-

ing for? An abundance of natural resources a proven track record of produc-ing quality products and a stable government that will assist in facilitating trade between nations.

We tick all the boxes at present. This invest-ment must be embraced if we want to see continued growth and development within our industry into the future.

For those within the industry that have a view for expansion and devel-opment, opportunities will arise that may have never been possible before.

For these opportunities to happen we must collec-tively continue to push the boundaries of our produc-tion systems, look for new

ideas on innovation and welcome change.

As we move towards 2050, the issue of food security may have the abil-ity to topple governments and derail social stability if we do not manage it cor-rectly.

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INTERNATIONAL DAIRY com-modity prices have continued their fall, as increased milk supply competes for fewer and certainly less enthusias-tic buyers.

A recent Rabobank report high-lighted that the supply issue, with the big seven exporting countries increas-ing output by 4.3% - equivalent to an additional 3.2 billion litres in the three months to July – half of that increase coming from the EU.

The supply response to lower commodity prices is being muted by an over-heated US domestic dairy market that has softened the impact for still less export-exposed US producers, and an over-supplied global feed market that is keeping a lid on farm production costs.

For these reasons the US and EU will take some time to slow – particu-larly given the ramp up of EU produc-tion ahead of quota removal in 2015.

Internal consumption of milk in these northern hemisphere regions is an important factor in the global market balancing act – particularly for cheese.

NZ producers are seeing the full impact of the global market downturn

reflected in their pay-outs, but given their debt levels and long-term commitment to dairy, they will con-tinue to pump out product – seasonal conditions allowing.

On the demand side, much has been written about China holding back from the market, although trade figures con-tinue to indicate imports are ahead of last year.

It is an interesting ploy – if Chinese buyers are in fact holding back from the market to improve costs it would be understandable.

They have certainly consumed a lot of product at very high cost from pur-chases made earlier in 2014 and maybe now sending signals via GDT to reduce prices.

It has worked, but they have taken some time to work out that more care-ful messaging via the GDT could be used as a tool to manage costs.

Of course the other wildcard to hit the already weakening global dairy

market has been the Russian import ban - which had the effect of turning a slowly deflat-ing tyre into a blow out and car crash.

Whether the ban imposed by the world’s third largest dairy importer will run its course or even be extended beyond 12

months will be an important determi-nant for market recovery in 2015.

Most analysts appear to agree that any recovery will not be until well into next calendar year, a view supported by Freshagenda’s Dairy Trade Simu-lator analysis and summarized in last month’s Dairy News Australia article.

But what about the longer term out-look – as current market conditions severely test the faith and finances of dairy producers around the globe, is the bright future still out there?

Will the historical trend line of around 3% increase in the value of milk that has prevailed for the past 20 year continue?

Our long term analysis suggests this

is still the case. Demographic and eco-nomic factors will increase demand for dairy products more rapidly than supply.

Growing Chinese demand will only partially be met by internal produc-tion expansion, while other developing dairy markets have even less chance of improving self-sufficiency.

Our analysis assumes growth from most major producing regions, but all face constraints and will continue to be affected by climatic factors from year to year.

Tetra Pak released a long term out-look earlier this month. The timing is interesting, with Tetra possibly con-cerned about ongoing faith and invest-ment in dairy processing as a driver of its own business.

The Tetra analysis suggests the inter-national dairy market will undergo sig-nificant transformational change in the coming decade as it becomes truly global.

They project the long-term deficit in dairy world trade as demand outstrips supply to be just under 10 billion litres by 2024. Our own analysis suggests the deficit will be a little smaller but still sig-

nificant, meaning that global prices will be on a firming trend.

We have seen no credible analysis of the long term outlook for dairy that diverges from that view.

That does not mean there won’t be volatility, the past three years have demonstrated that fact, and looking forward the factors affecting supply and demand are likely to become increasingly complex and intertwined with global input and competitor commodity markets.

The producers who prosper in this environment will be the ones that can set their business to ride the inevitable peaks and troughs of an increasingly global dairy sector – and maintain their focus on long term sustainable servic-ing of growing demand.

The still bright future for dairy won’t alter the need for producers to under-stand the market they are servicing, stay on top of production costs and contin-ually seek productivity improvements that support profit margins.• Steve Spencer is a director of Mel-bourne-based firm Freshagenda, a specialist food analysis, advisory and con-sulting business.

16 // MARKETS

FRESH AGENDASTEVE SPENCER

Long-term growth on track

FRESHAGENDA’S AUSTRA-LIAN export index finished Septem-ber at 165 points, losing 3% over the month.

While not the recovery we would hope for, it is an improvement on the 12% decline recorded in August. A falling Australian dollar did much to offset the impact of a 9% decline in US$ denominated dairy commod-ity prices.

SMP continued to lead the down-ward march in value this month, down a further 12% after falling 15% in August.

Of particular concern to Austra-lian exporters, cheese prices fell sig-nificantly in September, down 11%

after prices rallied in the first week of September. WMP prices fell 4% over the month, while butter prices were steady.

Increased supplies and lacklus-tre demand continue to weigh on the international dairy market, with prices still testing the “bottom”, and the index approaching levels last seen in mid-2012.

The weakening Australian dollar is the one significant bright spot to emerge over the past month for Aus-tralian exporters and producers. A number of analysts are now tipping further falls to US$0.75, as the US economy picks up and Chinese man-ufacturing continues to slow. Keeping

commodity prices where they were at the end of September, an Australian dollar at this level would improve farmgate prices by over $1kgMS – or just under 8cpl.

The index is a lead indicator of average export returns - based on spot prices, currency movements and export mix.

The index measures current market sentiment, but in reality it takes 3 to 6 months for prices to trans-late into actual returns, depending on the timing of contract negotiations. It was set to 100 in January 2000.

For weekly updates, follow us on Twitter or visit http://www.fresha-genda.com.au/

Export index steadies in September

DAIRYS NEWS ON THE GO

Available every month just look for the arrow!

DAIRYS NEWS ON THE GO

Available every month just look for the arrow!

www.dairynewsaustralia.com.auCHECK OUT THE LATEST NEWS AND INFORMATION AT


MARKETS // 17

Asian self-sufficiency quest behind Australian live export trade growth

Cows return from milking at the Greenfields integrated dairy facility in Indonesia. Greenfields produces 27 million litres of milk annually, from 6000 cows, and the company plans to complete a second integrated farm by 2016, requiring the import of 8000 additional Holsteins from Australia.

STRONG PRICES and cash flow considerations have, in recent years, seen many farms begin to view rearing and selling heifers for export as a good source of non-milk income.

At 92,340 head, live dairy cattle export vol-umes were up 6% for the 2013/14 financial year: 15% above the 5-year average.

In total, 400,000 dairy cattle have been exported from Australia over the past five years, roughly equivalent to 5% of the national milking herd each year.

Anecdotal evidence suggests that many farms are starting to breed and raise additional heif-ers specifically to sell for export, leading some to question whether this opportunity will endure, while others question the impact it may have on domestic production in the destination markets.

This makes it timely to take a look at the driving factors in our main mar-kets for dairy heifers.

China was Australia’s biggest customer for dairy products in 2013/14, but has been the dominant buyer for our dairy cattle since 2008/09.

Following slow but steady growth between 2009 and 2012, domes-tic milk production is esti-mated to have fallen more than 6% between 2012 and 2013 (2,370,000 tonnes) following government emphasis on quality and scale in milk production.

Requirements around standardi-sation and mech-anisation, and a concurrent surge in feed and forage prices, saw declin-ing profits from milk production.

At the same time, beef prices were high, and as a consequence, the inventory of dairy cattle shrank.

Herd rebuilding and the stocking of new large scale farms saw China import Australian dairy cattle in record numbers (85% of total exports) in 2013/14.

Chinese quarantine restrictions regarding Bluetongue also influence the fact that the major-ity of exported dairy cattle originate in Victoria (97% in 2013/14).

Other markets have dif-ferent quarantine require-ments and protocols, and can offer an outlet for farms that are, for geo-graphical reasons, locked out of China.

One such market is Pakistan, which began importing dairy cattle from Australia in 2007/08, taking 7% of exports (6,425 head) in 2013/14 (making them our third largest market).

Pakistan is one of the largest producers of milk globally (over 36 million tonnes in 2013, although the majority is buffalo), and imports very little dairy product from Aus-tralia.

Small, subsistence farms, and a lack of cold chain facilities, means that consumption has tradi-tionally been localised as yoghurt, homemade ghee, or raw milk. The govern-ment of Pakistan has had a considerable focus on and provided incentives for dairy sector development since 2007.

In addition, there have been large dairy devel-opment projects funded by international govern-ments and aid organisa-tions, and dairy processors have invested heavily in the establishment of cold chains in remote dairy producing areas.

These factors, cou-pled with a population growth rate of around 3% per annum, and a high rate of urbanisation, has seen volume sales of dairy products increase at an average annual rate of 10.3% per annum between 2008 and 2013.

Indonesia (Australia’s fifth largest market for dairy products by volume) produces over 1 million tonnes of milk annually from over 630,000 dairy cows, mainly on small holdings with an average of four cows.

The Indonesian government has a blueprint target of 50% self-sufficiency in milk production by 2020, however, it is believed that only 21% of the 3.3 million tonnes of raw milk required each year is

locally produced, and that the supply gap is growing.

Domestic and foreign direct investment has seen several new dairy process-ing facilities announced in the past 18 months, as well as investment in raw milk production.

For example, Indonesia’s Greenfields currently produces 27 million litres of milk annually, from 6000 cows, and the company plans to complete a second integrated farm by 2016, requiring the import of 8000 additional Holsteins from Australia.

This should help to maintain a level of demand from Indonesia for Australian dairy heif-ers: they were our fifth largest market in 2013/14, and have taken 25,718 head over the past 10 years.

It is evident that there is a strong appetite for domestic production growth in China, Paki-stan and Indonesia, which suggests that continued demand for dairy heif-ers can be expected from these major buyers.

Meanwhile, demand for dairy products in China and Indonesia is expected to continue growing faster

GLOBAL IMPACTAMY BELLHOUSE

Dairy NewS aUSTraLia june, 2012

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

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

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

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

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

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

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

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

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

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

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

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

agribusiness // 17

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

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

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

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

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

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

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

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

Pactum makes UHT products for private label and proprietary customers.

Freedom Foods planttargets Asia

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

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

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

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

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

The FTA will fill a number of gaps within the

ASEAN-Australia-New Zealand FTA (AANZFTA).

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

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

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

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

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

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

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

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

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

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

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

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

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

Export demand remains strong

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

gLobaL impacTJohN DropperT

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

than production, creating potential growth oppor-tunities for Australian dairy exports (particularly due to our relatively short shipping times and low

freight rates). However, demograph-

ics make countries such as China and Indone-sia target markets for all major exporters, meaning

that these opportunities should not be taken for granted.• Amy Bellhouse is indus-try analyst with Dairy Aus-tralia.

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Blue-Prairie He-Man #1530


ing officer Erin Sinclair used the analogy at one of a series of mating work-shops the levy body has been running in New Zea-land.

“The end result was a few [of the darts] worked but there was a big range in performance,” she pointed out.

Had the dart makers been selected for their skills, briefed on what was required, and given some time to practice, and, if necessary, tuition, a lot more darts would have hit the mark, she explained.

And so it is with mating management on a dairy farm. Pre-mating is the ideal time to make sure the team know why accu-rate heat detection is important, and how to do it because “there’s nothing riding on it.”

“Getting someone to explain what they’re doing and why is a good way to check [skills]…. Doing it during mating is a wee bit late because we know every missed heat costs at least $200 in lost produc-tion.”

Ms Sinclair added farm staff should be made aware that better mating management will mean a tighter, easier to manage calving for them the fol-lowing spring, and hope-fully a break between calving and start of mating.

Fellow presenter Amy Horrell, of LIC, suggested occasionally stopping the platform in rotary sheds and asking staff “would you, or wouldn’t you, put her up for mating?”

Some farms put photos

on the shed wall to estab-lish standards on how much tail paint they expect to see rubbed off if a cow’s on heat, she added.

Besides getting the team’s eyes in ahead of the real thing, record-ing pre-mating heats will help identify non-cyclers so interventions can be considered and, come mating, the date of a pre-mating heat provides a cross-check on cows where there’s doubt about whether or not they’re on heat.

Even for experienced staff, because the AB season is only for a few weeks a year it’s worth running a refresher to ensure everyone’s up to speed, said Ms Horrell, and having a back-up plan in case the main person responsible for heat detec-tion is unavailable.

Using at least two forms of heat detection is advisable: tailpaint or other form of heat detec-tor plus observation in the paddock for example, “especially for that second round of AB when every-one’s getting tired.”

Heat detectors and/or tail paint need to be applied correctly – with Kamars the arrow must point to the animal’s head and be in the right place – and in the right place allowing for the size of the cow. Tail paint needs to be worked into the hair

and regularly touched up. “Wait a day if it’s raining.” Trim hair to 1-2cm and warm glue so heat detec-tors stick well.

Observation in the paddock should be mid-way between milkings not immediately after (all eating) or immediately before when cows will be queuing to get to the shed.

Cows on heat will be in sexually active groups (SAG) riding each other, often around the water trough, though sometimes younger, less dominant cows are harder to spot as they are only on the fringe of such activity.

Even if a cow isn’t spot-ted in a SAG in the pad-dock, there are other tell-tale signs such as mud marks down the flanks, restlessness, poor milk let-down and mucus around the vulva. A system is needed to ensure team members communicate such observations effec-tively to whomever is in the shed and the cows get checked and drafted accordingly.

If in doubt about a cow, draft anyway then observe how she behaves with the other cows on heat. If she stands off from the group, put her back with the herd and don’t serve.

If she’s on heat, she’ll be mixing it with the rest of them, suggested Hor-rell’s colleague Andrea Dixon.

18 // BREEDING MANAGEMENT

Mating management refresher worth itChristmas comes but once a year, and so does mating on most dairy farms, so there’s plenty of time to forget best practice one year to the next. Andrew Swallow reports.

CAN YOU make a paper dart in 30 seconds? Would it hit your target if you did?

With practice, maybe, but given the paper and told to go for it, few can,

and so it is with mating management on a dairy farm; trouble is, missing

that target costs $200 per cow, per heat missed.

Dairy NZ consult-LIC’s Amy Horrell reminds delegates of what to look for.

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BREEDING MANAGEMENT // 19

A COMPREHENSIVE review of the dairy industry’s national breeding objec-tive (NBO) has recommended three new breeding indexes.

The indexes are: ■ A Balanced Performance Index – to

replace the current Australian Profit Ranking (APR) – that focusses on maximising net profit through pro-duction, fertility and type.

■ A Type weighted index that focusses on improved type.

■ A Health weighted index that focusses on improved fertility and survival (longevity).Michelle Axford from the Austra-

lian Dairy Herd Improvement Scheme (ADHIS) said the proposed new indexes took into account feedback from farmers, industry and scientists.

“Three breeding indexes will give farmers more choice. This Balanced Per-formance Index will align to the breeding priorities of most Australian dairy farm-ers,” Mrs Axford said.

“The type and health weighted indexes will suit farmers with different breeding philosophies.”

The new breeding indexes are expected to be launched with the next release of Australian Breeding Values (ABVs) in April 2015.

Breeding indexesThinking small a successful strategy in the westGORDON COLLIE

“SHRINKING” THE size of their dairy cattle while maintaining milk solids production has been a success-ful strategy adopted by a young West-ern Australian family.

Vicki Fitzpatrick has introduced Friesian genetics from her native New Zealand to the property she and her husband Luke operate at Waroona, about 150km south of Perth.

They began moving their focus from North American genetics in 2008 and Vicki said the impact was evident from the first calving.

The cattle were much more suited to their pasture-based production system with better feed conversion efficiency and bottom line profit-ability.

Their processor Browne pays on the kilos of solids they produce in the 27 litres each cow averages per day.

About two thirds of the herd is Friesian with the balance Friesian-Jersey cross.

“The cattle are shorter and stock-ier. They stay in condition better and calve more easily. We select for fertil-ity as getting back in calf is critical,” Vicki said.

“We’ve seen a noticeable improve-ment in their udders and a nice tem-perament too. We are rapt at the change.”

Their milkers are holding condi-tion under 500kg, performing well against the rule of thumb that an animal should produce more than its body weight of solids each lactation.

“The crossbreds are smaller again and are super-efficient animals,” Vicki said.

“We are probably averaging about 560kg of solids across the herd which

is very pleasing considering we don’t feed a lot of grain.”

“It’s all about making the best possible use of our grass-based feed ration and the smaller framed ani-mals have proved very successful for us.”

The small farm which the couple are in the process of acquiring from Luke’s parents Darrell and Helen is steeped in family history going back more than 150 years.

Luke’s great grandfather Patrick was an Irish immigrant who moved west chasing the lure of a fortune in gold mining before clearing a bush-land block to commence dairying.

A trained mechanic, Luke came

back to the family farm milking less than 100 cows on about 100ha and set the family enterprise on a steady growth trajectory, acquiring and leas-ing more land.

Vicki grew up in New Zealand andTO PAGE 20

WHO: Fitzpatrick family WHERE: Waroona WHAT: Herd transformation

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Luke and Vicki Fitzpatrick with their children, Ben and Holly, and Luke’s parents, Darrell and Helen.

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Tierwil Miles Cindy


brought a science background to Australia, having graduated from university in botany and zoology with a Masters in plant ecology.

“I was always

interested in natural systems and how they work, animals, plant and animal interactions and breeding animals.”

She came to Australia to work in dairy programs with the WA Government

on milk production protein levels and milk composition research. A move into dairy consulting and contract research led her to meet Luke when she visited the family property while undertaking milk

composition research.Her science training

has been put to good use managing soil health and plant interaction to maximise feed production.

Vicki said local conditions were

challenging for dairying with no rain from the end of the year until the season broke traditionally in late April.

20 // BREEDING MANAGEMENT

Thinking small a successful strategy

composition research.Her science training

has been put to good use managing soil health and plant interaction to maximise feed production.

Vicki said local conditions were

challenging for dairying with no rain from the end of the year until the season broke traditionally in late April.

Thinking small a successful strategy

Darrell FitzpatrickFROM PAGE 19

“We don’t get our first grass coming through until late May and early June so there is a significant feed gap to fill every year.”

They rely on intensive pasture production from about 16ha of irrigated perennial rye and clover, living with the reality of severely restricted allocations from Harvey Water.

Luke is a director of the South West Irrigation Management Cooperative which sets water allocations each October according to levels in several dams through the region.

“Planning for a 50% water allocation in recent years has been prudent just to see the ryegrass through.”

This year a 70% allocation – about 350 of their 500 megalitre entitlement – will give them the flexibility to plant a block of millet to augment fresh feed supplies and help reduce their reliance on grain feeding.

Plastic wrapped silage bales are fed in the paddock with grain through the bails averaging about 1.1 to 1.2 tonnes per animal a year.

This can vary from as low as a kilo when grass is plentiful up to 6kg through the hardest part of the season from February to April.

Vicki said the couple had moved from a continuous all-year calving routine to batch calving about two thirds of the herd from March to May and one third from November to December.

“The aim has been to make maximum use of our grass when it is most plentiful in June, July and August and our margins are at their highest.”

The three month gap between each bunch of calves has proved beneficial, particularly allowing them time to

focus on the busy silage production period during October.

With a milking herd increase to 180 cows planned to come into production in July this year, the couple had begun planning to replace the small herringbone dairy which had served the family for more than 40 years.

But slow planning approvals and delays meant they had to think of innovative ways to push the expanded herd through their eight-a-side double up herringbone in an acceptable time.

Improvements were effected to cow flow through the dairy and they installed new milking cups and liners which have proved a great success.

The light weight cups with vented mouthpiece triangular liners have virtually eliminated cup slippage and allowed an increase in vacuum pressure to speed up the milking.

Each set weighs about 1.7kg compared to their old cups with weighed about 2.5kg.

“The change has been brilliant,” Vicki said.

A milking which used to take about two and half hours is now completed in about two hours and 10 minutes.

The experience has caused the couple to re-think their plans and instead of building a completely new dairy they will now refurbish and upgrade the existing facility at about half the capital outlay.

They plan to extend the system to a 12-a-side herringbone and install automatic cup removers, an electronic identification system and electronic drafting.

Vicki expects the extra stalls and modernisation to save them at least another half an hour every milking.


MANAGEMENT // 21

SIMON ELLIOTT’S move from north to south of the Princes Highway in south-west Victoria took him less than 100km but forced him to adapt to a whole new set of weather conditions.

The move last October from Tarrone to Scott’s Creek saw Simon and his wife Shelley more than doubled the size of their herd from 140 to 330 on a much larger leased 215ha farm.

It also led them to reconsider their feeding and hay and silage regimes to adapt to the new con-ditions.

“We don’t regret the move. It’s certainly a lot easier over this side of the highway than the other side,” Mr Elliott said.

“But it’s been an inter-

esting scenario dealing with the different weather conditions, utilising pad-docks, pugging and how much you can do with tractor work. It’s a learn-ing curve.”

The Elliotts believed that the extra land would keep the cost of pro-duction down by grow-ing more grass instead of buying in more feed.

It’s worked to a degree but their silage result wasn’t good.

“We trialled a few dif-ferent ideas to get them back to producing off grass and using our silage through the tougher months,” Mr Elliott said.

He soon found the window to cut silage on the south side of the high-way was very short.

“We cut a heap of silage last year and weren’t really happy with the quality of it. For the amount of

investment you put into it, I don’t believe you get a return on it,” he said.

“We’ll weigh up, depending on the season, whether we can source better quality silage than we can produce ourselves.

“Depending on what the season is like up north, we might be better buying in hay and silage than producing it our-selves.”

Last year the farm cut substantial amounts of silage but the Elliotts were concerned not only about the quality but the costs.

“You don’t usually cut it off your main milk-ing platform, it’s usually at the back of the farm so it involves a truck and a couple of tractors,” Mr Elliott said. “By the time you lock it up, fertilise it, get someone in to wrap it and bale it, I don’t think

there’s much difference to buying better quality hay from up north.”

They plan to use a bigger milking platform this year for more direct grazing, supplemented by better quality imported feed.

“Unless there’s a big window to do silage, it would want to be a lot better quality. I reckon you’d be better off milk-ing a few more cows than picking up the extra expense of that. You’ve got to weigh up quantity versus quality.”

Mr Elliott advocates “getting back to basics” in dairy farming.

“Everything’s gone too far. Every time we’re told to put more and more into our cows to produce, but it makes you think about what the cows used to eat. The old farmers used to just throw them a bit of hay and they did well. We seem to be

RICK BAYNE

Back to basics approach requires feed changes

WHO: Simon Elliott WHERE: Scott’s Creek WHAT: Back to basics

refining everything we do as a farmer but we’re not refining it to make more money.”

Mr Elliott believes that “back to basics” should also apply to artificial insemination, calving and other expenses.

“There are so many more cost factors that

have come into dairy farm-ing but the milk price hasn’t moved with the all the extra expense,” he said.

They sell a percent-age of heifers for export but Mr Elliott says it was a “false economy” if dairy farmers rely on this income. “It’s something

that should be a bonus, not something you should need to have for survival,” he said.

“It’s only China push-ing the market. If they turn around and only pay $800 then that’s it, but on the other hand it’s going to be a problem if we keep exporting so much.”

BOOKING DEADLINE: October 29 MATERIAL DEADLINE: November 4PUBLISHED: November 11CONTACT: CHRIS DINGLE T: 0417 735 001 E: [email protected]

EFFLUENT & WATER MANAGEMENTIn the face of tighter environmental controls and rising fertiliser costs, it pays dividends to manage effluent and water flows more tightly. The next issue of Dairy News Australia will cover best practice in this area and will profile new developments and equipment designed to turn a problem into potential profit.

NEXT ISSUE: NOVEMBER 2014

SPECIAL REPORT

� ��

Dai ry News aUsTraLia october 2014

22 // management

DaIRY FaRmeRS should only conserve what is a true pasture surplus and should focus more on direct feeding this season, a south-west Victorian workshop has been told.

DEPI grazing and forage man-agement specialist Michele Ryan said farmers need to create a feed plan based on growth being slightly lower than expected this year and with only limited good quality hay from the Wimmera-Mallee.

Speaking at a Managing Surplus Grass workshop presented by the Warrnambool YDDP and Coorie-mungle Discussion Group, Ms Ryan said farmers should focus on making good quality silage but not cut unless they need to.

“Focus on only conserving the true surplus,” she said. “Only con-

serve what you can’t eat. Don’t keep paddocks locked up to cut if it means in three weeks you’re look-ing at that paddock and thinking can I open that silage now.

“It’s better to open the gate to let the cows back in rather than cut it and wait and think ‘how long does it have to be kept as silage before I can feed it out’.”

Farmers in the region are get-ting ready to start cutting in mid-October, about two weeks earlier than usual.

“A lot of ryegrass seems to be a couple of weeks ahead of where we would normally expect it to be,” Ms Ryan said.

“Most cut silage the last week of October or first week in Novem-

ber but this year a lot of people are thinking of going around the middle of the month. The plant is already starting to move through the reproductive process so even

if we do get rain we may not have the leaf in it,” she said.

Ms Ryan said farmers should aim for good quality silage and make sure they cut at early ear emergence.

She recom-mended using up to 50kg of nitro-gen per hectare to boost yield and quality.

“That will lift protein levels in the plant and also the ME metab-olise high metabolisable energy (ME),” she said.

“For every kilo of nitrogen put on you get up to 15kg of dry matter. You’re able to boost yields but also

improve quality as well.”Farmers should cut four-six

weeks after application to get the best results.

“If you go over six weeks after application you see a rapid drop in quality; you end up with quite a large yield but not a very good crop,” Mr Ryan said.

Farmers at the workshop were advised to push grazing at canopy closure, make sure they get 4-6cm grazing residuals, as this will help tillering in the perennial ryegrass and reduce the potential of aerial tillering.

“If you’ve got areas of the farm you know you can’t get machin-ery on, push them hard and leave other areas that you know you can get machinery on,” Ms Ryan said.

She added that key points to making good silage included doing it quickly to avoid losing quality and using tedders.

Is it true pasture surplus?RIck BaYne FORage BRaSSIcaS provide an excellent source

of nutrition for cows at times of year when pasture quantity and quality is low.

While turnips may be considered the cornerstone of forage brassica crops, recent studies have looked at the advantages of regrowth brassicas, which are able to regrow after the aerial part of the plant is grazed.

Regrowth brassicas include species such as kale, leafy turnips, forage rape and hybrids like Pasja.

Dow AgroSciences crop insecticide development manager, Paul Downard, says regrowth brassicas can be a great fit on the farm heading into summer, as they utilise late spring moisture and can continue to grow valuable feed into the following autumn and winter, provided crop density is good at the end of the summer.

“Forage brassicas offer the advantage of providing a break in the cycle of weeds and disease as well as emit-ting bio-fumigants which can inhibit the growth of dis-ease-producing organisms and reduce the incidence of nematodes,” Mr Downard said.

“In addition some regrowth brassicas have a root system that increases soil aeration and water move-ment for subsequent crops.”

In comparison with other brassica crops, regrowth brassicas tend to have higher growth rates in the ini-tial stages and therefore can be available to graze in the cropping cycle.

Provided there is enough irrigation or rain after the first grazing they will provide enough dry matter for multiple grazing events.

Mr Downard said in drier areas, regrowth forage should be heavily used during the first grazing in case regrowth does not occur.

“Where there is enough water it is advised that about 40% of the dry matter available is left post-graz-ing, so as to achieve a quick regrowth.

“The continuous addition of brassicas to the diet means that cows are not having to continuously adapt the rumen and digestive system to dietary changes, thereby minimising the loss of milk production caused by such changes.

“It is advised that cows consume no more than 5-6 kg of dry matter per grazing in order to avoid any met-abolic issues and thus ensure the best results.”

Mr Downard said the insecticide, Success Neo, can be used in both forage brassicas and regrowth brassicas.

It has a seven day withholding period, is soft on beneficial insects and is harmless to ladybird beetles, lacewings, big-eyed bugs, pirate bugs, damsel bugs and spiders. It has excellent control of diamondback moth.

“These beneficial insects can aid in the extended natural control of insect pests and reduce the likeli-hood of secondary pest outbreaks, helping extend the life of regrowth brassicas.”

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“Focus on only conserving the true surplus.”

– Michele Ryan


management // 23

Mastitis test results in only 40 secondstWO aUStRaLIan dairy farms are getting exciting results with a new, rapid on-farm masti-tis test.

The RT10 Dairy Qual-ity device operates off an iPhone 5 or iPod and gives cell count and pathogen recognition within 40 sec-onds of testing on-farm. It is also the only device in the market that gives a visual image – a powerful and self-explanatory moti-vator for dairymen.

The software was launched in Australia recently. It carries patho-gen recognition for Staph-ylococcus aureus (Staph Aureus - which is chronic and often sub-clinical mas-titis), Streptococcus Aga-lactiae (Strep Ag), yeast and acute mastitis. Envi-ronmental pathogen rec-ognition and pregnancy testing (via milk samples by 18 to 20 days pregnant) will also be available by the first half of 2015.

Bart and Tracie Doohan, from Finley NSW, have been among the first to introduce the device on-farm. For eight of the last 12 years they have been listed in the top 100 herds in Australia for low SCC. They hover between 100,000 and 130,000 on their herd of 400, without herd testing. Making their achievement more signifi-cant is that they are grow-ing their herd on a new farm. More than 20% are aged more than 10 years.

In the last six months they have had some issues with their SCC and they got a couple of surprises when they started testing with the RT10.

“We were jumping up and down a bit with the SCC and when we peaked at 180,000 that was too high for us – unchartered waters really,” Mr Doohan said. “We wanted a tool to get to the bottom of it. We had some cows we had treated and they were pulling clear, but when we tested them with the RT10 device we were finding some of them were still not right by a long way – so we had a sub-clinical issue.

“It also identified which mastitis infection they had, so we were able to treat them accurately.

“On the flip side I had

a cow that just looked to us like she was a high SCC cow so we had her on the bucket feeding the calves all the time. I tested her and she was 4000, so she went back in the vat.

“What it does is give us a definitive answer in under a minute. Our last herd SCC was 120,000 and we’ve been as low as 90,000 since we bought it. We’re also testing most of our fresh cows so it’s paid for itself pretty quickly. I love how quick, easy and accurate it is.”

Leesa Willmott and her partner Paul Reiter, from Kilcunda in Gippsland, found the same results. This is another dairy oper-ation that is conscious and proud of its SCC. It is rou-tinely in Australia’s top 100 operations for SCC.

Acknowledging that their herd is smaller at 120-head, detail is still impor-tant to achieve results and things can easily unravel.

“It’s been a great deci-sion for us,” Ms Willmott said. “We haven’t ever been penalised because we haven’t historically had any issues. But we recently had a couple of things I was concerned and frus-trated about.

“I had a cow I had treated and I was about to put her milk back in the vat. We checked her with the RT10 and she still had a SCC of 450,000, so she wasn’t good to go. With-out the test she would have been an ongoing problem for us, including her low-ered milk production and general health.”

Since adding the RT10 to their management tool-box, the herd has been listed in the top-three SCC herds for Murray Goulburn suppliers (for a 10-day period) with a herd SCC that is routinely run-ning between 32,000 and 55,000.

“For farms that do have some issues this device would save them money and headaches,” Ms Will-mott said. “And I love how quick and simple it is to use.”

The device’s inven-tor Steve Mangan, from Ontario (Canada) was recently at the World Dairy Expo, showcasing the pat-ented software within

Dairy Quality Incorpo-rated. Mr Mangan is also the developer and inven-tor of the Delaval Milk Master system and 70% of the industry’s Automatic Cup Removers incorporate technology Steve designed.

His credibility is well established.

The RT10 is already operational in 15 countries.

It will retail in Australia for about $2000. Inquiries: (03) 544 88 11 9 or email [email protected]

Australia’s Phil Malcolm (left) and RT10’s inventor Steve Mangan, from Canada, caught up at the World Dairy Expo to discuss RT10’s impact on mastitis control within Australia. PhoTo: DiAnnA MAlColM.


24 // ANIMAL HEALTH

Tube feeding calves questioned

DO YOU routinely tube feed calves?

Post-mortems on tubed animals show damage to throat tissue is common, as is milk getting into the rumen rather than the abomasum, says a New Zealand research scientist.

“The rumen should be 10-20% of the stomach in young calves but where they’ve been tubed it’s often distended and full of rotten milk,” Dr Lucy Waldron of LWT Animal Nutrition, base in Feilding, NZ, said.

“When you cut them open it stinks: a calf ’s stomach shouldn’t smell

at all. The milk should all be in the abomasum and like cream cheese.”

While she acknowledges the reason dairy farms reach for the tube – time pressure and to ensure colostrum is received – Dr Waldron said using such devices is doing more harm than people realise.

“We’ve often seen lesions and tears in the oesophagus where calves have been tubed and we won’t buy them now.

“All our calves for research are picked up straight off the farm, straight off their moth-ers.”

Besides the physi-

ANDREW SWALLOWcal damage observed, milk in the rumen provides a sub-strate for bac-teria which is likely behind many cases of persistent

scours and could well lead to less than optimal rumen function later in life, Dr Waldron said.

“It’s very hard to shift a population of bad or pathogenic bacteria once they’re in there.”

To ensure milk makes it into the abomasum it needs to trickle down the oesophageal groove through the stomach, not flood in as it gener-ally does from a tube. The suckling action is also important.

“You can’t guaran-tee it’s getting in the right place with a tube.”

Lucy WaldronA healthy rumen from a non tube-fed calf.

Rumen from a calf where milk has gone the wrong way.

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ANIMAL HEALTH // 25

ANIMAL HEALTHROB BONANNO

Attention to detail can lift calving ratesA CRITICAL cog in the wheel that is dairy farm-ing is the need to get cows back in calf so that they will calve again, and begin a new lactation each year.

In our part of the world, October is the time when we start to turn our attention to getting the spring calved cows back in calf.

The six-week in-calf rate after the mating start date is one of the key per-formance indicators that impacts significantly on profitability on a dairy farm.

For many years, I have told farmers that no cow has ever gotten pregnant without first having a dose of semen in her.

So when I am asked for advice about herd repro-duction problems a lot of my focus is on ensur-ing that every cow is sub-mitted to a mating as early as possible in the mating period.

Reproductive success can be achieved in many ways but the things that every successful mating program have in common are attention to detail, consideration of all the influencing factors and a sound application of knowledge of the bovine reproductive cycle.

There are literally dozens of different repro-ductive programs out there in the marketplace, each and every one of them has a place, and each should be considered on its merits.

The key considerations that I put the most empha-sis on will vary depending on each farm’s needs and facilities.

For example, there is no point trying to enrol an entire herd in a fixed time AI synchrony pro-gram if the farm doesn’t have sufficient facilities to manage the herculean task of ensuring the right cow gets the right needles at the right time and then that all the enrolled cows are able to be inseminated in a timely manner within the ideal window.

The oldest tried and true method of getting dairy cows pregnant is to AI them to observed heat.

Relying entirely on heat detection can result

in a large number of cows never being submitted to a mating at all either due to failure to actually detect heat in a cycling cow, or due to the cow not cycling at all.

Many herds at the start of mating may have greater than 20% of their cows not yet cycling, and in some instances where transition has been chal-lenging, feed availabil-ity limiting or some other complicating factor pres-ent, the percentage of non-cycling cows can be much higher.

These non-cycling cows and cows that cycle and are not detected in heat (due to either a quiet or very short heat) will never get pregnant, so a strategy to deal with them is a critical component of the success of any mating program.

Heat detection aids like tail paint, kamars, estro-tect scratchies etc are all valuable tools.

Increasingly, I am find-ing herds relying on other technology like pedome-ters, activity meters and even their robotic dairies to detect heat.

Knowing that no single method is perfect, and the more aids to heat detec-tion that you can use, and then adding to that just good old fashioned time observing your cows, are the essential ingredients when using a program that relies on the detection of heat in order for a cow to be mated.

Attention to the small details like semen han-dling and thawing, stress free cattle handling, excel-lent semen placement by a skilled technician are also critical factors to success.

I suggest that you record with the mating who it was who insemi-nated the cows so that if one or more inseminators are performing signifi-cantly below average they

TO PAGE 27

can be either avoided or re-trained.

I have investigated a herd where one insemi-nator managed only one pregnancy for the entire season. Guess who never got invited back again.

It is the old story of if you don’t measure, you can’t manage and the reproductive performance of your herd is no different

In some herds, some or all of the cows will be

Heat detection aids like tail paint, kamars and estrotect scratchies, etc are all valuable tools.

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26 // ANIMAL HEALTH

WEANING IS the time when milk feeding com-pletely ceases. The timing of weaning can vary and the decision to wean has historically been based on many factors.

These could include the age of the calf, the weight of the calf and the timing of other manage-ment decisions, such as turnout and dehorning.

This article discusses the aims of weaning, the indicators of when an animal is ready to be weaned and tactics to

achieve optimal growth in the post-weaning period. The transition from calf to cow

The pre-weaned calf

relies primarily on diges-tion of milk in the aboma-sum (the fourth stomach) and small intestines.

In the very young calf, the first three stomachs (reticulum, rumen and omasum) are not devel-oped and the calf is con-sidered to be a “simple stomached” or “monogas-tric” animals at this early age. A little bit like our-selves.

A successfully weaned heifer is far from being a “monogastric” animal.

She is a ruminant

The correct time to wean

which means she relies on the digestion of plant-based food by fer-mentation, in a special-ised stomach called the rumen.

The presence of bac-teria and other microbes within the rumen help this fermentation process.

At wean-ing, the calf no longer has access to a milk diet. In order to grow and thrive, the calf needs a fully func-tioning rumen to be able to uti-lise all the nutrients from a non-milk diet (grain and forage).

If the rumen is not developed and prepared for weaning then the calf will not be able to utilise these nutrients to main-tain herself and grow.

This can result in a decrease in growth rate after weaning, the so-called “post-weaning slump”.

Therefore the primary goal of the milk-feed-ing phase and lead-up to weaning should be to pro-mote rumen development so that weaning can occur as smoothly as possible. Rumen development: The Myth of the Scratch Factor

The lining of the rumen is composed of fin-ger-like projections called papillae.

These papillae increase the surface area of the rumen for absorption of nutrients.

The term ‘rumen development’ reflects

the number and length of these papillae, along with the microbes present in the rumen to help fer-mentation.

Traditionally, it was thought that feeding roughage (fibre) to calves promoted their rumen development.

The so-called “scratch factor”, where large particles and fibre scratch the rumen lining to stimulate papillae develop-ment, is now considered a myth.

Research has shown that it is in

fact grain that stimulates papillae growth by pro-duction of volatile fatty acids, such as butyrate.

High forage diets result in production of acetate, which does not promote papillae development. Therefore, to obtain high levels of butyrate, a rap-idly fermentable, high-quality calf starter or grain must be fed.

The earlier a calf starts consuming grain, the more quickly the rumen develops and the sooner the calf is able to main-tain and grow on a non-milk diet.

Prolonged milk feeding will not promote rumen development. This leads us to the question:When is the right time to wean?

With our knowledge of rumen development, the best indicator for weaning is based on consumption of calf starter/grain.

TO PAGE 27

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ANIMAL HEALTH // 27

Size, weight and age are not accurate esti-mations of an animal’s rumen development and functionality. For exam-ple, the rumen of an 80kg dairy calf consuming 1.75kg of calf starter per day will be very different from an 80kg milk vealer calf on a high volume milk diet.

For calves in a group fed system, where accu-rate grain consumption per calf can be a chal-lenge, it is recommended to monitor on a group basis over three consec-utive days. As a guide, in group fed systems:

The stress of weaningWeaning can be a

stressful time for young calves as they no longer have access to a diet to which they have been accustomed.

Overwhelming stress can lead to disease as stress releases cortisol, a hormone which can sup-press the immune system and reduce the ability to fight disease.

Subsequently, the calf can succumb to a disease which it would otherwise have been able to fight

off, had there not been a stressful event.

Weaning will be more successful if calves are exposed to only one stressor at a time.Tips for a stress-free weaning include:

■ Vaccinate and dehorn calves at separate times, prior to wean-ing.

■ Ensure grain is avail-able to all calves at all times. Monitor grain intake on a pen-by-pen basis and keep records of consumption per pen. This will allow an estimation of grain intake per calf.

■ Provide ad lib fresh water from birth.

■ Transport and/or turn-out calves before or after weaning.

■ Wean during good weather if possible.

■ Weaning can be grad-ual or abrupt. Grad-ual weaning e.g. over 7 days, is less stressful than abrupt weaning. Successful weaning

and post-weaning growth will ultimately depend on a number of factors.

Optimal nutrition to promote rumen devel-opment and minimising stress, will help enable the “monogastric” calf to become a fully function-ing ruminant, without an adverse effect on growth. • Gemma Chuck is a veterinarian with The Vet Group.

FROM PAGE 26

The correct time to wean

Friesians1.5–2kg/day*Jerseys1–1.5kg/day*

*Based on calf grain containing 18-20% crude protein.

submitted to a Fixed Time Artificial Insemination (FTAI) program.

There are a number of different FTAI programs that are used on dairy farms, and it is always best to seek independent advice from your veteri-narian before launching into a whole herd FTAI program as it may not always be the most cost effective method of get-ting your cows in calf.

However, FTAI programs are now

widely recommended by most veterinarians when working with the proportion of the herd who are anovulatory or anoestrus, and intensive monitoring for return to heat or very early pregnancy diagnosis for those who do not return is my go-to strategy when dealing with these cows to avoid the phantom cow phenomenon (where previously mated but not actually pregnant cows fail to return to heat for a prolonged time).

Attention to detail can lift calving rates

Early treatment of non-cycling cows and early intervention to detect and re-mate the phantom cows is another key strategy to ensure good reproduction outcomes in your herd

There is no better qualified professional to work with you to develop a cost effective program that works for you in your best interest (not just to

sell you the most doses of semen) than your own herd veterinarian so when thinking about your breed-ing program this spring, contact your local dairy vet for advice.• Rob Bonanno is a director of the Shepparton Veterinary Clinic and a former president of the Australian Cattle Veterinarians Association.

FROM PAGE 25

Seek advice from your vet before launching a whole herd FTAI program.

PROFESSIONAL PROTECTION FROM YOUR VET.

SCOURS CAN CHANGETHE FUTURE FOR YOU AND HER .

When you suffer a calf scours outbreak the future looks a little bleak. You’ll not only experience productivity losses such as reduced income, additional expenses and genetic setbacks, you and your family will also face the emotional toll of scours. Stressful work hours, endless days managing sick calves and the disappointment of mortalities can be tough on everyone when scours hits. A serious case of scours can even make some farmers question their farming abilities. Ultravac Scourshield helps you prevent scours and gives you and your family peace of mind.

For more information on Ultravac Scourshield contact your vet or call Zoetis on 1800 814 883.

Less scours losses, more gains.

Copyright © 2014 Zoetis Inc. All rights reserved. Zoetis Australia Pty Ltd. ABN 94 156 476 425. 38–42 Wharf Road, West Ryde, NSW, 2114. www.zoetis.com.au 04/14 ZL0018 PAL1079/DN

PAL1079_DN_260x187.indd 1 7/05/2014 10:38 am


28 // TRACTORS & MACHINERY

Italian wagon suits cut and carry systemGARY BUDGE from Nanneella, near Echuca in northern Victoria, had been convinced for quite a while that a cut and carry system for feeding his cows was the way to go – and now he’s done something about it.

Garry and his wife, Anne, are milking a mixed herd of around 550 cows on a 22-unit swingover with automatic cluster removers. Mr Budge grew up share farming and they have been on the property now for 15 years.

He had been thinking about – and talking about – the ‘cut and carry’ system for a couple of years. Through a mate who was also interested in the principle, he heard about a Bonino self-loading ‘grazer wagon’ that was operat-

ing at Timboon. The Bonino machines are manufactured in Italy and sold here by Greg Allan Machinery at Colac.

They both went down to have a look at what was the only one operating in Australia at the time. Mr Budge was so impressed that he pur-chased one during the winter this year.

“I didn’t look at any other machines once I’d seen this one in action’’, he told us. “I’m not that sort of

person. No doubt there are others but the idea of ‘one person – one job’ with the Bonino suited what I wanted to do.”

The model that he bought is a Bonino AB 70 TR with a cutting width of 1.85 metres and a loading capacity of

28 cubic metres.The wagon is powered by a Deutz

M600 130 horsepower tractor and the operation takes about three hours each day, roughly about half an hour per load, depending on where it is being taking to.

“We bring it back to the feedpads or

just put it under the wire in the pad-dock,” Mr Budge explained. “We cut and carry enough for them to eat in one day and I do five loads each day. It’s dif-ficult to work out what that means in dry matter.”

At the time of our visit in mid-Sep-tember, he had been going full on with the wagon for the previous five weeks. “The pastures had been ready since then”, he said. “We cut every 30 days and at the moment we are cutting shaftal, ryegrass and lucerne. We put maize and green feed on the two con-crete feedpads.

“We have another property with all lucerne and our plan is to have lucerne on the go all the time.”

Mr Budge says that the best thing is that it is a one person job. “The savings are definitely there by doing it your-self instead of having to get in contrac-tors. The machine seems easy enough to operate. It has a touch monitor. I’m happy with it.”

The Budges use contractors to do their baling and bulk silage, which is mainly maize and vetch. They have a JCB telehandler to manage the pit silage and they have another Deutz tractor that was bought three years ago to feed silage.

They also have a Schuitemacher

silage cart on the place that they pur-chased second-hand.

“Last season we made 800 dry tonnes of maize and bought in another 200 tonnes. This year we plan to have 1000 tonnes grown here of maize – it will go in when the vetch crops come out.

“I can get three cuts out of shaftal and ryegrass before we put in the maize. It’s generating money on the day I cut it, straight to the cow and it’s milk the next day.”

Mr Budge says that with the price of water you have to pay particular atten-tion to what it goes on. “We are always looking at ways to improve the cut and carry job. We are working on improving pasture production and to achieve a flat production with constant feed. We have some grazing on the main farm, but the main focus is on cut and carry. You are burning energy to make silage. Feed-ing the cows green feed means feeding them energy.”

In the future he says that an under-pass will aid access to their blocks and better utilise the properties over the road. “We are looking at the moment to changing to a 22 double-up shed to save time, and we may enlarge the herd in the future. Never say never!”

WHO: Gary Budge WHERE: Nanneella via Echuca WHAT: Grazer wagon

WORKING CLOTHESCHRIS DINGLE

Gary Budge with his Bonino self-loading ‘grazer wagon’ which he uses for his cut and carry system.

Gary Budge

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TRACTORS & MACHINERY // 29

Safety, ergonomics feature in specialty tractorsTRACTOR MAKER New Holland says its newest offering, the T4.105 F/N/V, has new safety and ergonomic features.

The entire T4 F/N/V range has an upgraded hydraulic and PTO offer-ing and a mechanical park lock, which holds the trac-tor dead still when parked, suiting those operating on steep terrain.

Power comes from a 4.5L turbo charged and intercooled Nef engine fully compliant with B100, 100% biodiesel. Maxi-mum power of 106hp is achieved at 2300 rpm and a 31% torque rise means the T4.105 is able to tackle the most demanding tasks, such as power harrowing.

Operator comfort is much enhanced by a com-plete overhaul of the cab on the entire range.

All controls have been precision placed: all key tractor functions have been repositioned and grouped on the right hand console for immediate and intuitive operation includ-ing the rear remote valve controls, together with the front and rear linkage con-

trols. The front part of the rear fenders has also been completely redesigned to offer a more natural operating position for the throttle and clutch pedals.

The T4 F/N/V range now features a factory-fit-ted dedicated mid-mount block with up to four remote valves.

The zero-leakage, proportional electronic mid-mount valves are con-trolled by a new electronic joystick which “falls per-fectly to hand” on the end of the right-hand con-trol console. A dedicated motor connection guar-antees up to 20L/minute of flow is always available, and it is activated in the cab via an on-off switch; a specific dial guarantees precision flow control.

The T4 F/N/V is good for gradients up to 45%. So for maximum parking safety New Holland has developed the mechanical park-lock to work with the Dual Command transmission. This ensures a 100% lock on the transmission, and prevents any forward or reverse creep when parked

on steep inclines, even when a fully laden trailer is hitched. The park-lock is engaged either via a dedicated lever or via a specific ‘gate’ on the creeper lever. The park-lock must be manually deactivated before drive can be engaged.

The reduction in the PTO operating speeds by as much as 5% has cut fuel

consumption. 540 PTO speed is now attained at 1958 engine rpm, whereas 1000 speed is achieved at 2000 engine rpm.

Improved PTO flexibil-ity is a standout, New Hol-land says, as the speed at which maximum engine power is achieved has been matched to that of the PTO for greater flexi-bility under load.

Power comes from a 4.5L turbo charged engine.

THE 8000 Series Self-Propelled Forage Harvesters integrate cutting-edge crop analysis and documentation with an innovative machine design.

Forage producers no longer have to compromise between rugged harvesters and sophisticated crop analysis technol-ogy, according to John Deere.

The company unveiled its 8000 Series self-propelled forage harvesters (SPFH), which it said offers significant improvements in dependability and fuel efficiency.

“The 8000 Series builds upon the best features of our popular 7000 Series

Self-Propelled Forage Harvesters,” John Deere’s Shaun Fritchey said.

“This new series integrates cutting-edge crop analysis and documentation with an innovative machine design to provide superior efficiency, reliability and crop quality.”

The 8000 Series includes Dura-Drum cutterheads and KernelStar tech-nology. The AutoLoc (automatic length of cut) feature allows the operator to dial in the precise cutting length based on forage conditions.

Two cutterhead widths, matched to engine horsepower, are available,

so capacity can be customised for any need.

All-new header solutions and crop-flow layouts increase flexibility among different crops and provide better performance in wet or dry conditions.

Large 42-inch tyres reduce compac-tion while providing excellent traction in all types of conditions.

The 8000 Series provides this per-formance while reducing fuel con-sumption as much as 18%, according to the company.

Operator comfort also has been

improved, with superior visibility from the cab, as well as longer service cycles, less daily maintenance and easier access to service points.

“Repeated field research has docu-mented consistent chopping quality in all crops,” Mr Fritchley said.

“And, more machine productivity coupled with increased fuel efficiency in all crops makes the 8000 Series a top choice for custom operators or dairy operations.”

Growers can choose among four single-engine models with standard crop-flow channels while an additional

model with a wide crop-flow channel is also available.

“Forage producers lose money each day their crop sits in field after it’s ready for harvest,” Mr Fritchey said.

“The 8000 Series maximises produc-tivity on every hectare b y enabling them to harvest as much forage as possible, as efficiently as possible.”

The all-new 8000 Series self-pro-pelled forage harvesters will be avail-able for order in Australia in the latter half of 2015. Tel. 1800 800 981 to fi nd your local John Deere dealer.

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THE NEW McHale Fusion 3 Plus baler allows wide polythene film, rather than netwrap, to secure silage bales before sealing with bale wrap.

One of the options for net replacement is Baletite, made by Min-ster Films. In 2013 Min-

ster Films commissioned Dr Dave Davies, formerly of the UK’s Institute of Grassland and Environ-mental Research and now a consultant, to run a farm trial to test the quality of the silage produced using Baletite instead of net-wrap.

Dr Davies oversaw the production of 44 silage bales from one field of grass cut, wilted for 24 hours then baled using a McHale Fusion 3 Plus fitted to apply either net-wrap or Baletite.

To ensure similar grass was ensiled in each treat-

ment, chamber wrapping alternated between net-wrap and Baletite every eight bales.

In February 2014, 206 days after ensiling, 12 bales from each treatment were opened and assessed for silage quality using: a pressure test to see how

quickly the vacuum in a bale returned to normal atmospheric levels; mould assessment, i.e. weigh-ing all the mould in a bale to assess the percentage of the bale affected; and silage analysis by taking a core sample from each bale.

Film-on-fi lm baleage wrapping lifts quality

Baletite fi lm creates a vacuum and excludes air from the bale.

The pressure test showed that the vacuum in Baletite bales took 180 seconds to dissipate com-pared to the vacuum in the netwrap bales which took 20 seconds, indicating a much better seal for the Baletite bales.

The Baletite bales had a much lower mean mould weight per bale at 5.5kg fresh matter (FM) com-pared to 23.9kg FM for the netwrap bales.

The total silage lost, which includes storage losses plus mould losses, showed the netwrap bales lost on average twice as much DM as the Baletite treatment.

The chemical analyses of the silage by the labora-tory indicated the Baletite treated bales had better quality silage.

The Baletite bales had a higher DM than the net-wrap bales, and the Bale-tite silage had higher sugar levels (89gm/kgDM vs 70g/kgDM for netwrap silage). Baletite silage also had a lower pH (4.46 vs 4.52 for netwrap silage).

The results showed lower levels of ammo-nia-N in the Baletite bales compared to the netwrap

bales. Ammonia-N con-centration in silage pro-vides a gauge of protein breakdown: the lower the level the less protein has been degraded.

Summary figures show the film-on-film bales had: 7.5% lower DM losses than netwrap bales thanks to better fermentation; 80% lower DM losses than net-wrap bales through mould; and 52% lower total DM losses than netwrap bales.

The Baletite bales in the farm trial showed better silage fermentation and lower losses than the netwrap treated bales.

This was explai ned by the fact that Baletite net replacement film is ten-sioned onto the bale in the bale chamber, forcing air out of the bale to promote faster fermentation in the early stages while main-taining a more oxygen-free environment during the time the bales are in stor-age.

Film-on-film wrapping also enables automation of the feeding process and easier recycling after use.

McHale equipment is distributed in Austra-lia through PFG Australia. Tel. (03) 9368 8888

BOSCH HAS released its Dairy Gas Hot Water system in Australia, saying it will provide a cheaper, cleaner and more flexible heating solution.

Bosch claims its system can reduce operational costs by 45-60%.

The Bosch Dairy Gas Hot Water system can be retro-fitted to replace conventional electricity-powered dairy systems between milkings, thus providing instant savings while causing no operational down-time.

With installation costs estimated at between $6000-$8000, Bosch claims costs will be recouped within two years.

Using the latest Bosch condensing c ontinuous flow water heater technology, a commercial grade 32 litre/minute flow system integrates with the existing on-farm hot water cylinder. Bosch says this provides significantly lower energy costs as well as superior heat-up times com-pared to the electric system.

“This provides the farmer with the additional benefit of hot water on demand – so no more waiting for the elec-tric system to heat-up or recover,” said Mark Blacker of Bosch Australia.

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• Massive lifting power with multiple hydraulic cylinders and Single or 3 phase power pack.

• Heavy duty stalling with minimum 3mm wall thickness of material.

• Sequencing flap gates for maximum cow speed of loading.

• Upgrades available to existing Larsen stalling

CONTACT: GREG KINROSS 0437 357 912


TRACTORS & MACHINERY // 31

Boost pastures by improving soil drainageTHE PURPOSE of agricultural drainage is to remove excess water from the soil to enhance crop pro-duction.

In some soils, the natural drain-age processes are sufficient for growth and production of agricul-tural crops, but in many other soils, artificial drainage is needed for effi-cient production.

Poorly drained soils become waterlogged. Waterlogging causes oxygen starvation in the root zone, retarding root development and resulting in stunted root systems and low nutrient uptake from the soil.

Waterlogged soils are also prone to structural damage if worked when wet or if compacted by live-stock or vehicles.

Heavy pugging of wet soils during winter reduces the total annual pasture production.

To reduce the occurrence of waterlogging, a drainage system consisting of surface or subsur-face drains in combination with mole drains can be installed.

Surface drainage is the removal of excess water from the surface of the land in a controlled manner as quickly as possible.

This is normally accomplished by either shallow spoon drains or open “V” shaped drains. It is impor-tant to realise that surface drains will only remove surface water.

TG Drains has two purpose built buckets for the 12 tonne excavator that can dig a spoon drain or a “V” shaped drain.

The excavator is laser-guided ensuring an even grade in the drain so water is removed quickly but doesn’t cause scouring of the drain walls or bottom.

Sub-surface drainage removes excess water from the soil profile, through a network of perforated corrugated polydrains installed 66cm to 1.3m below the soil surface, with a permeable backfill placed around the pipe.

This increases the permeability in the vicinity of the pipe, and acts as a filter preventing fine sand and silt from entering the drains.

TG Drains installs sub-surface drainage using a laser-controlled purpose-built drainage machine.

The machine, a Mastenbroek 20/15 imported from England, can cut a trench up to 2.2 metres deep.

The digging chain of the machine cuts a trench and the drainage pipe is laid with the back-fill of gravel in one single operation. The machine can be altered to lay either 100mm or 160mm polydrain. The 100mm polydrain is often used for the lateral drains which feed into a main drain. The main drain is often a 160mm polydrain which discharges the water.

A tractor hauling a gravel trailer equipped with a conveyor belt is driven alongside the Mastenbroek

machine to deliver a continuous flow of clean, fine gravel into the machine’s hopper.

This avoids slumping of the trench walls and prevents exca-vated material falling on the pipe and possibly blocking the drain-age slots.

The elevation of the gravel hopper at the back of the Mas-tenbroek machine can be altered hydraulically, allowing the thick-ness of the permeable gravel back-fill to be varied according to soil type.

After installation, the drains are GPS mapped for future reference. • For further information contact Tim Beets on 0409-115 474 or visit www.tgdrains.com.au

Tough pump designed for chemical transferAUSSIE PUMPS’ unique ‘Smart Pump’ is configured specifically for the pumping of liquid fertilisers.

Nitrogen-based liq-uids are aggressive and will literally ‘eat alive’ conventional aluminium or cast iron pumps.

The new Smart Pump uses a 30% glass filled polyester body, impel-ler and volute construc-tion teamed with either EPDM or Viton elasto-mers.

Apart from the real benefits of chemical compatibility, the pumps offer farmers the ability to fast fill sprayers from holding tanks with flows of up to 1000 litres per minute (lpm).

“Spraying costs big bucks so the abil-ity to reduce filling time

is really important,” Aussie Pumps’ product manager, Adam Scully, said.

“We see farmers fill-ing spray rigs with fire-fighting pumps. These take twice as long and eventually rot out.”

The Aussie Smart Pumps were originally introduced for indus-trial chemical handling including acids, brine and diesel fuels.

“The most popular model at the moment is a 2 inch pump with a capacity of over 800 lpm flow teamed with either EPDM or Viton elasto-mers,” Mr Scully said.

Sales of 3 inch pumps, with flows over 1000 lpm, are growing as farm-ers look for increased efficiency and faster sprayer fill times, he said.

The pumps are avail-able in a wide range of drives but most farm-ers choose a 6.5hp Honda powered version because it’s lightweight and reli-able, Mr Scully said.

The entire pump only weighs 25kg and can be easily transported where necessary.

Viton seals provide compatibility with a wide range of farm chemicals

including fertilisers, pes-ticides and weedicides. Viton can also handle salt water, diesel fuel and urea and molasses cattle digestive aids.

The standard 2 inch and 3 inch Aussie Smart Pumps come on steel skids with anti-vibration mounts. A heavy duty steel roll frame is used on the Honda electric start polys.

“The electric start aids convenience but also offers a recoil start back-up,” Mr Scully said.

Aussie Smart pumps are also available in poly-propylene for high acidic liquid transfer.• Further information including a comprehensive guide on the use of Aussie Pumps for a wide range of applications is available at www.aussiepumps.com.au

The digging chain of themachine cuts a trench and thedrainage pipe is laid with the backfillof gravel in one single operation.

Simone Upton with the Aussie Pumps Smart Pump.


MASSEY FERGUSON says its new MF 9407S telescopic handler specifically suits farming.

Visibility, patented cab design, manoeuvrability and performance are all a farmer could want in such a machine, says Agco.

The company says it talked to many farmers in Europe while drafting the spec’s – starting with a ‘clean sheet’ design, and presenting new technology and features from the axles upwards.

“The design of the MF 9407S offers the best visibility on the market through the curved rear screen. It is also compact, agile and manoeuvrable,” says Massey Ferguson’s

general marketing manager Fergal Meehan.

“The short, wide chassis provides exceptional stability, while the laterally, side-mounted engine offers great access for service.”

New boom design and mounting pivot along with powerful new hydraulics mean the MF 9407S offers lift capacities and heights suit many applications, while the new boom and mounting further improve loading efficiency.

An innovative and patented curved side and rear window fitted into the new cab, coupled with the low (1.75m) boom mounting position, offers

an unrestricted view to the rear right-hand side. This design means there is no cab pillar to obstruct the view, offering the best vision in the industry.

The cab is 900mm wide, plenty of shoulder room for the largest operators. A curved front windscreen – which extends from the front right over the roof – also increases space and leg room.

This makes it one of the largest handler workplaces on the market and, at 75db(A), it’s also quiet, Agco says. Air conditioning and pneumatic seat suspension come standard.

Inside the dashboard is located in the right corner, leaving an unobstructed view of the boom carriage and attachment.

The simple dashboard layout is easy to read and is mounted just in front of the new joystick, which provides proportional control.

A shuttle reverse lever is mounted on the left, within a finger’s reach of the steering wheel. A separate button is used to place the boom into the float position.

Access to the Perkins engine and cooling package is easy. Mounted on the right of the machine, the engine is

fitted lengthways parallel to the boom, which makes everything easy to reach. The hydrostatic and hydraulic pumps, fitted to the front of the engine, are also easily accessible.

The MF 9407S has a 130hp, 1104D-ETA engine, which provides extra power often required for straw merchants and other contractors, particularly for road work and towing trailers.

A cooling pack, which folds up for cleaning, is mounted at the front of the engine compartment, above the hydraulic pumps and the fan can be reversed for cleaning. The radiators and oil coolers have ample capacity.


Telehandler great for grip and grab

MF 9407S telehandler.

Lely starts trials on no-stop balerA NEW-CONCEPT baler that does not need to stop or slow down in any type of crop is being tested by Lely. A commercial product is some years away.

The Lely Welger CB Concept ties a bale while simultaneously starting the next one – “a true continuous baling concept, a true yellow revolution,” the company says.

Continuous motion makes the operation more efficient and com-fortable. More high quality bales can be made as no time is lost wait-

ing for tying and releasing. Maintain-ing speed is better for driver comfort, cuts fuel consumption and minimises wear and tear as frequent braking is no longer required.

When the desired bale size is achieved, a mechanism moves the bale within the belt to the extended back of the baler, making room for a new bale to start immediately in the front. After the first bale is tied by the net wrap system, the tailgate opens, dropping the bale on the go and the baler resumes its compact position

ready again to finish the bale now being made in the front.

During this continuous process, a belt buffering and tensioning system maintains consistent tension on the belt, resulting in high density bales.

Lely says its continuous innova-tion makes life easier for farmers by bringing “great advantages in quality, comfort and capacity”.

The Lely Welger CB Concept is the company’s ninth ‘yellow revolution’ in nine years.

The Lely Welger CB Concept ties a bale while starting the next one.

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Standard equipment is, for example:


tractors & machinery // 33

WHEN Dairy News Aus-tralia reviewed the 2011 Honda TRX500, we com-mented that it was a subtle evolution of the old model, the list of changes being relatively modest.

Fast forward to 2014 and Honda has made a lot more changes to the new TRX500 over the previous model than it did in 2011.

To name a few, the new manual-shift TRX500FM2 Foreman has a new chas-sis featuring longer-travel suspension; revised map-ping for the EFI program that gives the liquid-cooled 475cc single-cyl-inder OHV four-stroke engine improved power delivery, throttle response and fuel efficiency; and a selectable locking front differential.

We handed the big 500 to a tame dairy farmer to put it through its paces on the farm. The diff lock came into its own here, pulling the Honda through muck in the bottom of a recently emptied effluent pond. Admittedly, that’s not an everyday farm sce-nario, but it was as severe a test of traction as you’ll get.

Our farmer also com-mented on the improved power delivery from the re-mapped engine, saying it pulled clean and strong from lower revs than the old model. And he pre-ferred the manual gearbox over an automatic.

The list of changes to the new 500 is extensive. It includes new bodywork that improves mud protec-tion, keeping most of the

muck away from the rider. Combined carrier

capacity increases to 120kg – 40kg in front, 80kg for the rear, and the heavy-duty trailer hitch has a 384kg towing capacity.

The electric power steering has revised set-tings for lighter steering effort, improved damp-ing and more linear steer-ing traits.

While the drivetrain carries over from the pre-vious model, albeit with reconfigured engine map-ping, the Foreman has an all-new double-cradle steel frame that is lighter and 20% stiffer.

New front and rear sus-pension (independent double-wishbone up front and solid rear axle with single shock swingarm) has an increase in travel to 185mm at both ends plus new shocks for improved ride. All shocks now have adjustable spring preload, and the swingarm now has an enclosed axle and new rubber pivot bushings that contribute to the better ride.

Rider comfort has also been addressed by nar-rowing the tank so the feet aren’t so spread, making the ‘rider triangle’ a bit less cowboy. A 20mm increase in seat foam thickness and softer seat foam also help.

The Honda TraxLok 2WD/4WD system now offers three drive modes: 2WD; 4WD with TraxLok torque-sensing front dif-ferential; and now a new 4WD mode with lock-ing front differential. This TraxLok system also has a speed override mode that can be engaged when the

Improvements with farm use in mindadam fricker

front differential is locked, allowing faster wheel speed under severe condi-tions such as deep mud.

There are other less obvious changes too, such as increased AC generator output of 481W and a new

meter display with added functions like a ‘mainte-nance minder’ system that notifies when it is time for service. And the rear brake has been moved inside the right rear wheel, improv-ing ground clearance.



AS MANY office dwell-ers with farming back-grounds do, I often vacate the office for a dose of out-door agricultural activity when weekends or annual leave allow.

Often the venerable Deutz DX and our own small block provide the outlet, however recently I had the opportunity to trade-up a bit.

A lot of dirt needed moving as part of a laser grading project, and a Cat-erpillar 95E coupled with a 12 foot Alfarm scraper grader was sitting idle nearby.

The ensuing four day weekend of high-horse-power heaven got me thinking.

In this age of the cost-

control mantra and the frequent, unfortunate mis-interpretation of this as ‘absolute cost minimi-sation in every respect possible’, the value of horsepower is often under-stated.

Having a tractor that would tear itself apart if it could get enough traction can come in handy in all sorts of ways.

Pub bragging rights are an (often denigrated) advantage of course, but being able to pull the local contractor out of a bog, make your own silage and pull a deep ripper (should you ever want to) are also worthy capabilities.

Not that you can make silage with a Cat Chal-lenger.

The 95E is a beast of a machine, the result of a late facelift and up-powering of the original Challenger machines before the radi-cally redesigned MT series, the subsequent sale to AGCO and the exit of Cat-erpillar from making agri-cultural tractors.

Like many machines featured in this column, mainstream think-

ing would dictate that it is a completely illogical machine for a dairy farmer (or hobby farmer) to own.

Apart from the truly offensive 410 horsepower of decidedly non-minimal-ist power produced by the 11.9 litre Caterpillar engine, its tracked undercarriage makes it entirely unsuit-able for use on any pas-ture you may wish to retain longer than the second pass.

Also similar to many machines mentioned here, it is noisy and extremely rough to operate, and compared to the technicolour joystick armrest flamboyancy of newer tractors, the array of levers and switches is decidedly Spartan.

On the upside, it can do some pretty cool skids, and a technician wishing to service the motor can just about step inside the engine bay and have a poke around.

More importantly, it does the job it was pur-chased to do, and pulls the grader until clay is pouring over the back of the bucket.

It has some serious grunt, and sometimes – even in the age of ‘cost con-trol’ – serious grunt is just what you need to get a job done as efficiently and cost effectively as possible.

Even dairy farmers want to get big jobs done from time to time. And if you want to do a big job, you need a big tractor.

Once you’ve got that, I could probably use another working holiday.• John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a variety of roles for both profit and fun.

Never underestimate the value of horsepower

GRUNTJOHN DROPPERT

The Cat 95E has serious grunt.

Contact your nearest Reese dealer for more information. All prices are exclusive of GST. Freight charges may apply

Reese Agri | Free phone 1800 140 196 | Phone Murray 0400 540 300 | www.reeseagri.com.au

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dairy news australia october 2014

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