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TAILORED SOLUTIONS FOR LARGE HERDS

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2009 Ashburton 2008 New Plymouth2007 Dunedin2006 Hamilton2005 Christchurch2004 Napier2003 Paihia2002 Queenstown2001 Taupo2000 Christchurch1999 Whakatane1998 Palmerston North1997 Oamaru1996 Rotorua1995 Auckland1994 New Plymouth1993 Invercargill1992 Te Awamutu1991 Masterton1990 Tauranga1989 Matamata1988 Methven1987 Palmerston North1986 Whangarei1985 New Plymouth1984 Cambridge1983 Tokoroa1982 Masterton1981 Asburton1980 Thames1979 Whakatane1978 Matamata1977 Hawera1976 Whangarei1975 Rotorua1974 Palmerston North1973 New Plymouth1972 Auckland1971 Hamilton1970 Whakatane

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Previous Conferences 1Contents 2Executive Committee 3Ashburton Organising Committee 4Sponsors 5Sponsors Acknowledgements 6-7Programme 8-9Opening Bede O’Malley - Mayor of Ashburton District 10Speaker Owen Stickels - Jet Fighter Pilot/Motivational Speaker 11Formal Welcome Neville Rule - Chairman NZ Large Herds Association 12 Bryan Beeston - Chairman Ashburton Large Herds Committee 13Speakers – Pioneers of the Plains John Roadley - The Early Years 15-17 Max Duncan - The Corporate Years 18-21 John Penno - Large Scale to Factory 22-28Speakers – Water - Efficiency, Re-charge, How Does Water Effect the Whole Community Dr Terry Heiler - CEO Irrigation NZ 30 Conor English - CEO Federated Farmers 31Speakers – Carbon Footprint John Hutchings - General Manager, Sustainable Production,

Fonterra Co-operative Group Ltd 33 Craige McKenzie - NZ Nuffield Scholar 2008 34 Robin Grieve - Agricultural Tutor 35-41Speakers – Science Professor KL (Jock) Macmillan - Inflation vs Infertility 42-44 Dr Peter Hutton - Lecturer in Dairy Production 467 Young Scientists - Inaugural Dairy Scientist Communications Award Dr Jeremy Bryan - Farm Systems Specialist, Farmax 47 Andrew Weir - Eltham District Vet Services 48-49 Dr Jane Kay - DairyNZ Scientist 50-51 Dr Mairi Stewart - AgResearch, Ruakura 52-53 Dr Kirsty McLeod - Research Technician, DairyNZ 54-55 Dr Jenny Weston - Dairy Systems 56-57 Dr Pablo Gregorini - Scientist, DairyNZ Ltd, Hamilton 58-59Speakers – Industry Leaders Tom Camerlo - Chairman US Dairy Export Council 61 Andrew Ferrier - Chief Executive Officer, Fonterra 62Speakers – Local Water Issues Andrew MacFarlane - Farm Consultant 64-65 Ian McKenzie - Chairman Ashburton Community Water Trust 66 John Wright - Chairman Barhill Chertsey Irrigation Ltd 67Speakers – Rural People Prof. Jacqueline Rowarth - Massey University 68-71 Mike Sabin - Managing Director, Methcon Group Ltd 72-74Speakers – Making the Right Nutrient Decisions in a Challenging Market Dr Jamie Blennerhassett 76Speakers – The Day After Tomorrow Matt Ross - 2007 Sharemilker of the Year 77-79 Guy Salmon - Executive Director, Ecologic Foundation 80 Tim Hunt - Senior Dairy Analyst, Rabobank Food 80 Stuart Nattrass - Fonterra Director 80Speaker Gareth Morgan - Dairying in Brazil and Bike Touring 81Farm Visits Ealing Pastures - Andrew & Rachel Morris 83-88 Stonehaven Farm - David & Ruth Keeley 90-91 Ian Williams - Forage Specialist Pioneer Brand Seeds 92-94 Stradbrook Farm - Winslow Ltd 96-98 Three Springs Dairies Ltd - Willy & Jeanet Leferink, Craige & Roz McKenzie and Freddy & Hielkje ter Bogt 99-100 Lauriston Dairies Ltd - Craig & Helen Elliott and Partners 101 Hugh Jellie - DairyConcepts Ltd 102-104

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Chairman:

Neville Rule

Secretary/Treasurer:

Delwyn Oliver

Shelagh Bragg

Bryan BeestonJohn Lang

Life Member: Professor KL (Jock) Macmillan

Angela Carpenter

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Chairman: Bryan Beeston Annette Beeston Pennie Saunders

Jeanet LeferinkWilly Leferink

Craig Elliot

Doug Williams

Helen Elliot

Debbie McLaren

Nerilee Wightman

Graeme Blair

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Premier Sponsor

Key Sponsor

Key Sponsor

Key Sponsor

Key Sponsor

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Williams Engineering

DAIRY BUSINESS CENTRE (NZ) LIMITED

Recruiting for the field

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PROGRAMME

MONDAY, 30 APRIL 2009

8.00am Registration Desk Opens - Day and Late Registrations

Trade Display Area Open

8.30am Welcome

Neville Rule, Chair, NZ Large Herds Association

Bryan Beeston, Chair, Ashburton Large Herds Association

Willie Thompson, Summit Quinphos

9.00am PIONEERS OF THE PLAINS – Chair, Ted Rollinson

John Roadley, The Early Years

Max Duncan, The Corporate Years

John Penno, Large Scale to Factory

10.30am Refreshment Break

11.30am WATER - EFFICIENCY, RE-CHARGE, HOW DOES WATER AFFECT THE

WHOLE COMMUNITY

Dr Terry Heiler, CEO Irrigation NZ

Conor English, CEO Federation of Farmers

12 Noon Lunch Sponsored by Ballance

1.30pm CARBON FOOTPRINT – Chair, Jeanette Maxwell

John Hutchings, Fonterra Sustainable Production General Manager

Craige McKenzie, Nuffield Scholar

Robin Grieve, Agricultural Tutor

Question and Answer Session

3.00pm Refreshment Break

3.30pm SCIENCE

Professor KL (Jock) Macmillan and Dr Peter Hutton

7 Young Scientists – Inaugural Dairy Scientist Commnication Award

Jeremy Bryant, Andrew Weir, Jane Kay, Mairi Stewart, Kirsty McLeod,

Jenny Weston, Dr Pablo Gregorini

5.30pm Mike Petersen, Beef and Lamb NZ

6.10pm Drinks and Nibbles BBQ Sponsored by ABB Grains

TUESDAY, 31 MARCH 2009

3.00pm Registration Desk Opens

3.00pm Trade Display Open to Public

4.30pm New Zealand Large Herds Association AGM

5.30pm Opening – Bede O’Malley, Mayor of Ashburton

5.40pm Owen Stickels – Jet Fighter Pilot

6.30pm Welcome Coctail Evening with light meal Sponsored by Landpower

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8.00am INDUSTRY LEADERS – Chair, Tom Lambie Tom Camerlo - US Dairy Export Council Andrew Ferrier - CEO Fonterra Toni Laming - General Manager International Options9.30am Refreshment Break10.15am LOCAL WATER ISSUES – Chair, Willy Leferink Andy MacFarlane, Farm Consultant Ian McKenzie, Ashburton Water Trust John Wright, Chairman Barrhill Chertsey Irrigation Scheme11.45am Lunch1.15pm RURAL PEOPLE – Chair, Dean Nikora Prof. Jaqueline Rowart, Massey University Mike Sabin, Managing Director Methcon Group – Drugs and Education 2.15pm MAKING THE RIGHT NUTRIENT DECISION IN A CHALLENGING MARKET Dr Jamie Blennerhasset2.45pm Refreshment Break3.15pm THE DAY AFTER TOMORROW – Chair, Frank Brenmuhl Matt Ross, 2007 Sharemilker of the Year Guy Salmon, Executive Director, Ecologic Foundation Tim Hunt, Senior Analyst Rabobank Stuart Nattrass, Fonterra Director5.15pm Pit Stop5.30pm Gareth Morgan, Dairying in Brazil and Bike Touring6.30pm Cocktail Evening7.30pm Free time to experience the local cuisine - bookings essential

PROGRAMME

WEDNESDAY, 1 APRIL 2009

8.30am FARM VISITS – Buses leave in opposite directions Ealing Pastures – Water Turbine Power and Irrigation and Effluent Disposal Andrew and Rachel Morris – Sponsored by Merial Ancare Stonehaven Farm – Large Scale Winter Grazing – Mayfield Hinds Irrigation Scheme David and Ruth Keeley – Sponsored by Pioneer Brand Products Stradbrook Farm – Robotic Milking and Voyager Grazing System Winslow Ltd – Sponsored by Winslow Ltd Three Springs Farm – High Producing Equity Partnership Willy & Jeanet Leferink, Craige & Roz McKenzie and Freddy & Hielkje ter Bogt – Sponsored by Dairy Business Lauriston Dairies Ltd – Conversion in Progress and Opportunities with Scale. Craig and Helen Elliot and Partners – Sponsored by Ecolab Ltd5.00-5.30pm Arrive back in Ashburton6.30pm Drinks7.00pm Gala Dinner – Licence to Chill – Semi Formal – Sponsored by Summit Quinphos Presentation of Young Scientist Awards during the evening.

THURSDAY, 2 APRIL 2009

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Bede was elected Mayor of the Canterbury Water Management Strategy Steering Group, is a member of Local Government New Zealand’s National Council with responsiblity for the water issues portfolio, and is a Director of Rangitata Diversion Race Management Ltd (RDR).

He is a member of the Local Government Auditor-General’s Advisory Group and the Canterbury Regional Transport Committee.

A Welcome from The Mayor of Ashburton

Ashburton is delighted to be hosting the NZ Large Herds Association Dairy Conference, and it is with great pleasure that I extend to all delegates and guests, a very warm welcome to the Ashburton District.

The dairy farming industry is a substantial contributor to the economy of the Ashburton District. Research showed that in 2007 the dairy farming industry directly accounted for close to 15% of the district’s GDP and close to 10% of employment. I expect 2008 data to be significantly higher.

Add to this the fact that our district is home to some of the country’s most productive dairy farms, with the highest average herd size of any district in New Zealand, and the importance of your industry to our community becomes very clear.

The current volatility surrounding milk solid payments, and their impact on business confidence together with the world’s economic crisis, will no doubt contribute to much discussion during your conference.

I know the Conference has a very full and busy programme which includes several farm visits, but I hope visitors have the opportunity to enjoy our local hospitality and are able to take advantage of some of our fine amenities and features within the Ashburton District.

On behalf of the people of Ashburton I wish you an enjoyable Conference and pleasant stay in our town.

Bede O’MalleyMayorMarch 2009

BEDE O’MALLEY, Mayor of Ashburton District

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OWEN STICKELS, Jet Fighter Pilot / Motivational Speaker

Born in 1946 and raised on the land in north-eastern Victoria, Owen Stickels is a professional actor, speaker and writer. He’s also a former RAAF fighter-pilot and flying-instructor. Owen has returned to live at Mount Beauty in the alpine region of north-eastern Victoria, Australia.

Communication Skills Training

In 1986 a Perth law firm invited Owen to utilise his acting experience and help its junior lawyers make better `opening statements’ in court. From that unexpected beginning, a business has grown. He now consults to (mostly) professional organisations all around Australia, specialising in speechmaking, presentation and speech-writing skills. Owen takes the real-world top-of-the-tree theatre of service flying (task focussed), marries it to the creative world of acting and writing and so runs courses that are practical, professional and fun (participants always have a good time). As he is a professional speaker, the skills he teaches are the ones he uses. He knows they work.

Owen works all around Australia. Among others, his client list includes:· Department of Agriculture (the WA Community Builders Programme) · Australian Competition and Securities Commission· Australian Government Solicitor· Australian Securities Institute· CPA Australia· The Australian Stock Exchange· BP Australia Limited· Clough Engineering Limited· Deloitte Touche Tohmatsu· Department of Contract and Management Services· KPMG · Pharmacia & Upjohn· Primary Industry Bank of Australia (Rabobank)· Tiwest Joint Venture

Professional Speaking

In 1987 Owen was asked to address a breakfast gathering in Perth. He drew on his acting skills and years spent telling (mostly rude) stories to his fellow officers at Mess dinings-in to entertain about 100 marketing people. His effort went well enough, and Owen turned professional.

Owen delivers keynote, session and after-dinner presentations. He appears as himself or as a foreign ‘expert’. He’s been a French aviation consultant, a Polish golf-course superintendent, an American marketing expert, a German mathematician, a Russian retail banker, and, among many others, an English zoologist.

Owen ran the Bi-Centennial Air Display Commentary Team in Sydney in 1988. With an interest in rallying (he’s a driver) Owen commentates for Telstra Rally Australia in Western Australia (one of the rounds of the World Rally Championship), and has done so for the last 13 years.

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NEVILLE RULE, Chair, NZ Large Herds Association

Welcome to the 40th annual conference of Large Herds NZ. What a fitting location to hold this conference “Water Put to Work” here on the Canterbury plains. This Region has seen incredible growth of large-scale dairy farming. At this conference you will hear from some of the pioneers and major players in the region. You will have the opportunity to visit some of these outstanding properties and view the innovative way of the future that dairying has to offer in Canterbury.

The Ashburton committee has been innovative in bringing some new and exciting ideas to life. You will hear from eight of NZ’s young, talented and emerging agricultural scientists, who will compete for cash prizes to assist their studies. A special thank you to Professor Jock MacMillian and Dr Peter Hutton for your contribution to making this event possible.

Presentations from outstanding people will be a feature of this conference. Dr Tom Camelo, US Dairy Export Council, Water expert Dr Terry Hellier, and entrepreneur and entertainer Gareth Morgan will feature amongst an outstanding group of presenters you will hear from.

It has been a year of contrast and challenge. Last year I made comments on the change in payout from $4 kg m/s to $7 kg m/s. Plus, that season was subject to some devastating weather conditions. This year it is fair to say the International financial and trade crisis dominates our industry politics. The San lu events have sent a costly shock wave through our calm waters. The issue of our Cooperative structure will also need our energy and attention. There is clearly a necessity for us to unite and support each other through these difficult times.

Make sure you take the opportunity to meet new people, communicate with the presenters and enjoy yourselves at what is your conference.

A special welcome to WillieThompson CEO Summit Quinphos the Large Herds NZ major sponsor. This arrangement is working very well for both parties and I look forward to your comments.

To our key sponsors Don Skidmore and his team from Merial Ancare, welcome.

Ian Williams and Simon Foggarty from the Pioneer Brand products team we look forward to your presentation at the David Keeley property.

Richard Wilson and the Landpower team thank you for your support and commitment to Large Herds NZ.

Welcome Sarah Tylee-Porter from ABB Grain, thank you for your commitment and support to our organisation and this conference.

The generosity, contribution of resources, and loyalty of all sponsors is appreciated by both the delegates and Large Herds Organisation. Strengthen your business ties, create new clients and friends. Take the opportunity to enjoy yourselves.

To conclude

For any organisation to function effectively for 40 years there will have been many people who have made a contribution to this organisation. I don’t intend to name all of those people but today it is imperative that we recognize a person who has committed a considerable amount of time and resources to Large Herds NZ.

I will now ask Shelagh Bragg to come forward and accept a Life Membership to The NZ Large Herds Association.

Neville RuleNZLHA Executive Chairman

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On behalf of the organising committee, I would like to welcome you to Ashburton for the 40th Annual Conference of the New Zealand Large Herds Association.

A large herd’s conference is not only for large herd farmers, it is the opportunity to talk to and socialise with sponsors and fellow delegates to come away with at least one, usually more, new ideas.

I would like to encourage you to actively participate and share experiences with like minded people who are Large Herd Dairy focused and listen, discuss and see how water is working in Canterbury.

The conference theme is “Water Put To Work”. 20 plus, years ago, there were just a few pioneers who saw the potential, using water, for dairy farming in this region. Today there is a flood of dairy farm conversions in the country side with pivot irrigation, & water storage ponds for more efficient water usage. These farms are now producing in excess of 1400ms/ha.A first at our conference will be the Inaugural Dairy Scientist Communication Award – where eight young scientists from throughout New Zealand will present the abstracts of their work for judging by some delegates & scientists. This is an excellent opportunity for practical farmers and scientist to share ideas over the conference period.

Ashburton is a town that has seen the wool boom of the 50’s and 60’s, the grain boom of the 70’s and the 80’s with the 90’s bringing many dairying families from the North Island, to the mega dairy boom of today.

We know at present that the Dairy Industry is on a downward slide. Most of us have been through this before and the reality of this, is that there are more opportunities in a down-turn for people to progress. In the future you can look back and say, I heard about that in Ashburton 2009.

With a great line up of speakers which include Gareth Morgan, Owen Stickels, amongst many others, our wonderful venue here in the new Ashburton Trust Event Centre, plus five farm visits, we believe that this will be a conference to remember.

I would like to thank all of our speakers, sponsors, and farmers and especially our local committee who have spent the last 12 months putting this together. Bryan BeestonChairmanAshburton Conference Committee

BRYAN BEESTON, Chair Ashburton Large Herds Committee

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I don’t need to look in the mirror to know that I’m getting older, but when you are asked to be the first speaker at a “pioneers” session and you work out that the period that you are to speak about is 30 years prior you know that your use by date is near, -- after all when treated pine posts first came on the market with claims of at 30 year life, that seemed like a time span way beyond the need of any concern.

It is a pleasure to be here today, in 1981 the Large Herds Conference first visited Ashburton and our farm, just one year into conversion, was one of the profiled properties. That was an exciting and rewarding time and I am sure that all delegates here for this conference will also enjoy their experience. It is interesting to note that 300 cows were regarded as a large herd at that time.

JOHN ROADLEY, “The Early Years”

1979 was the year that changed the fortunes of our family. Lois and

I were farming at Kaiwaka in Northland; we were 7 years into the

development of a new farm. It was a good farm production was

going well. But with 5 of the 7 seasons abnormally dry requiring

cows to be dried off in Feb/ March, then spending all winter in

mud with pugged pastures-- to say the least was frustrating.

Being in my early 30’s the ambition of having a large enough

herd to allow me to be out of the dairy shed by the time I was 40

was being constrained by room and the price of land was, in my

opinion, too high for what it could produce.

We began to study our options.

In the early 70’s there had been an article in the Dairy Exporter

about the irrigated plains of Canterbury. A group of Dairy Board

Consulting officers had been in the area and visited the Glass

Brothers farm in Methven. The article reported that water was

delivered by canal, dams and weirs that directed the water on the

pastures – no drought – and the soil was free draining – no mud.

Sounded far too good to be true. I had kept the article, and in the

dry summer of 1979 I found it again and began to wonder – What

If. Lois said lets go and have a look, we did, it was every bit as

good as it sounded,-- no it was better than it sounded-- where the

irrigation ran, the grass was green and lush, where it did not there

was just parched soil.

Back at Kaiwaka pastures were ravaged with drought and

crickets.

But what about the winters the doubters said, there is snow and

frost to contend with.

So we went back in July from the mud of Northland, wintering

barn, on/off grazing and pugged pastures, to Don McDonalds

farm at Lauriston where we helped feed out big round bales of

hay and straw with our shoes on, sure a good frost in the morning

but great fine days to follow, grass utilisation unbelievable. We

knew what we had to do.

Back at Kaiwaka the farm was listed to be sold. The grass is always

greened on the other side the locals said, hope you know what

you are doing.

During the 1950s Winchmore Reseach Station had run a dairy

herd and proved that producing milk on the light Lismore soils

was feasible. Of course sheep farming in the 1950’s was quite

profitable and many dairy farmers through out the country were

selling the cows and becoming a sheep farmers so there was little

interest in research findings that demonstrated the benefits of

milking cows. This work, however, showed us that the risks were

low it would be up to us to make it work.

By Jan 1980 we had an unconditional contract on the Northland

farm and we came to Ashburton to look at a farm that had just

become available. Our capital would get us a farm of between

130 and 160 ha’s we had been enquiring for several months but

farms for sale were scarce, so when the farm at Dromore became

available we moved fast.

The move south was going to be real.

The planning began. There was finance to be arranged, a dairy

to be constructed, a herd to be assembled and the move south

organised with two small sons a couple of dogs and three cats.

Every contractor had to be ready to go the day we took ownership

of the Dromore farm.

The 1st of June 1980 was “D” day

Although the contractors had never had any thing to do with a

dairy farm conversion, most of the people who worked with us

on our development project went on to be significant providers to

the dairy industry that grew over the following years.

Anderson and Rooney were the SI Rotary Turnstyle agents, I had

a job convincing Tom Rooney that a 50 bale rotary was what

we wanted he suggested side by side 24 bale configuration but

eventually agreed to design a 50 unit. The first in big turnstyle

the South Island and only the second in NZ. John Grieve had just

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SPEAKERS - PIONEERS OF THE PLAINS

JOHN ROADLEY

begun building on his own account and agreed to build the shed;

Les Christie was starting his own business and agreed to do the

electrical work. Norm Kershaw and John King, then with Doug

Hood Ltd did all the site preparation work. Ian Thornton, now

a successful farmer in the county was an advisor with MAF and

assisted with dairy design and compliance.

Local reaction to this new NI family coming to milk cows at

Dromore was mixed from

“ Great idea , how can we help” to “What are you thinking,

everyone knows you can’t milk cows here” but which ever the

reaction all eyes were on us, we featured in a half page story in the

local paper within ten days of having arrived in the district .

We had decided to sell our herd at Kaiwaka – a decision we came

to regret- and purchase cows in the south, we began looking as

soon as we knew we had a farm to go to. There were not a lot

of cows traded in Canterbury or even the whole South Island,

we were on the market for 370 or more, stock agents thought

it would be impossible. We bought any herd that was for sale

that year and ended up with 3 complete herds from as far away

as Kaikoura and Springs Junction. The cows began arriving at the

farm soon after we arrived and before we had a chance to really

check the property out. One night a neighbour phoned to say there

were cows running past his house, they had to be ours, Lois and I

caught up with them seven km from home at full gallop- what a

circus- fortunately they had turned inland when they escaped and

not toward state hi-way one.

The Temuka Dairy Coop was very welcoming, even paying a

premium for new supply. The Coop gained a dispensation from

MAF to install the first (for NZ) outside milk silo on the farm. This

trial proved to be a major step forward for the whole industry.

We had soil tests done on the farm as soon as we had possession

and found that the Olsen P levels were within the range 4 to 8.

Obviously we were not going to get much grass to grow with

levels like that.

The recommendation was to apply super phosphate at 3cwt per

acre (approx 375kgs/ha). I recall asking the fertilizer spreader driver

to sow the super at 6cwt per acre, He sowed up and down two

borders and then came back to me and said “You did say 6cwt

didn’t you -- you know I have been sowing fert for 25 years and

I have never sowed super at 6cwt, sowed lime at that rate – but

never super” I just said “Open it up and go for it”

Now the NI who thought cows could be milked at Dromore

showed that he had more money than sense spreading super as

if it were lime!

The next summer the irrigation race man got accused of allocating

us more than our share of water because our farm was the

greenest in the neighbourhood and we must be cheating. One

neighbour asked if we could graze a few of his stud ram hoggets on some of our “spare feed”

When I looked into the fertilizer recommendations I found that they were based on work carried out at Winchmore Research Station where trails of 1cwt, 2cwt and 3 cwt per acre were compared – 3 was the best so that was the recommendation.

A couple of years later a neighbour asked if I would have a look at his soil test results with him, -- we were gaining credibility.

After a good effort by all the contractors, the dairy was finished just as the first cows were calving. Apart from the normal stress of breaking a new herd to a new dairy, the dairy shed was a great success it worked well from day one and, I believe, is still going today. We never regretted building a shed that at the beginning looked oversize for the farm.

The total farm was border dyked when we purchased and that was a significant advantage, but being completely new to the game, I did not have a clue what an efficient layout looked like, I could see it had head races and borders in every paddock. What I did not see was many races had no sill boards, there were no junction weirs and we only had 8 doors and 6 clocks. However on reflection the farm was set up as good as any other at that time, efficient use of water was not such a priority in those days. Many farmers turned the water off at night only irrigating manually during the day and there was always surplus water at the weekends and public holidays. Irrigation was viewed as assurance against dry spells for traditional farming rather than a resource to allow intensification of farm production.

We were expecting the on farm system to work as the theory described.

However when the irrigation season began some of the water went were it was intended the rest flowed down the wrong border strips, into the stock water race, across the road and into the neighbours. Pleasant neighbours became irritated neighbours. Urgent repairs were necessary. I learned a huge amount about flood irrigation layouts in a very short period. There were hours and days spent trying to get the water to flow where it was required and I learned that a so called automatic system only worked reliably while you are watching it. We had a Lincoln student assisting over summer and when the family was packing up for a few days holiday a huge flood arrived all around the house. I said to the student something is not right with the irrigation, he said I know, I can’t work it out, they didn’t tell us at Lincoln that it could be like this.

Although there were many very frustrating times I always liked irrigating, running water onto dry pastures and watching the response is more rewarding as anything other farm job, and after all, this was the reason we had moved from one end of the country to the other.

Our farm was on one of the community schemes fed from the

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SPEAKERS - PIONEERS OF THE PLAINS

JOHN ROADLEY

Rangitata Diversion Race (RDR) .The Ashburton / Lyndurst scheme was originally designed to provided enough water for irrigating just over half the farm with a manual system used at the time, with the development of automation of the headrace and better contouring of the paddocks it was possible to stretch the water allocation across the total area, this was the reason that some farms were being totally border dyked. Ours was such a farm when we purchased. We managed to achieve a 24 day return interval which was too long to maximise the pasture production over the dry months. We really needed a 14 day return and average rainfall to optimise the growth. However we just put up with that, consoling ourselves with the fact that the water from our scheme was an extremely economic input and without it we simply would not be in the dairy business on this farm. We only had to remind ourselves of why we had moved in the first place.

The flat land was a novelty for us. We had never owned a flat paddock before, being able to close any paddock for silage or hay was a real advantage. The set out of the borders at 12 meter spacing made feed allocation so easy, with the internal subdivision posts set at equal distances apart it was as close to farming graph paper as you could get. However flat land and trimmed hedges can be a bit monotonous, Lois and I did miss the patches of native bush that are such a feature of Northland so we began planting alternative species of trees including a good measure of natives. But alas now they have all succumbed to the mighty centre pivot.

The water charges in the early years were very favourable to the farmer, costing around 10 or 12 dollars an acre.

When the Govt of the day wanted to sell assets and the scheme came up for sale I was pleased to be a member of the committee that negotiated and purchased the scheme for a great price on behalf of the farmers of the area thus ensuring user ownership for all time.

Interest in what we were doing continued at pace. We were featured in almost all the farming publications, asked to host farm visits by all types of interest groups, both nationally and internationally, hosted Lincoln University student visits, gave presentations a farm conferences and had an almost constant stream of visitors to the farm from Sunday drivers to farmers doing feasibility studies of their own. – One Sunday afternoon early in the first season we counted over 40 people just turning up at the dairy to watch the cows being milked on the merry go round. Thank goodness no OSH issues in those days.

From our garden gate off the drive the view was straight into the family living room, we built a screen fence to provide a little privacy from the stream of complete strangers pulling up at the gate.

While we tried to accommodate the requests it did put a considerable strain on my time and many a time I simply gave the people a farm map a suggested they go and have a look for them selves and maybe I could answer their questions when they got back. Then there was the telephone at night, call after call, farmers

wanting to know how the farm was going - was it really as good as the article in the paper said.

Service providers were thin on the ground, I remember asking Lois to go to town and get some dairy shed supplies and she came home empty handed the firms had no idea what she was asking for, but they learned quick and made a real effort to find out what this dairy farming was about and be part of it. The Ashburton Trading Society was very good at doing their best to provide for the growing dairy industry.

We had a sick cow and I called the vet for the first time, He spent time looking at the animal, taking its temperature and listening to its heart. I could tell he was out of his depth and then he said “If it was a horse I would know what to do” I said well I can tell you it is not a horse but what about we try this drug. So after some discussion he agreed with my diagnosis and administers the drug.

The service did get better.

A group of dairy farmers in the county decided that we should solicit some research input into improving the efficiency of the districts dairy farming operations. We approached MAF and eventually got Ruakura dairy specialists interested. The out come was a farm monitoring project, the very first of the concept now widely adopted, where all aspects of the farm production was recorded and benchmarked against the top performing number two dairy at Ruakura. The group set an objective of achieving 500 kgs of milkfat per ha. While that looks a modest target by today’s standards it was not widely achieved 30 years ago. This project was cantered on our farm and we began measuring everything that moved. We enjoyed a close relationship with all the top researchers in the dairy world, Arnold Bryant, Jock McMillan, Des Clayton and many others. We were privileged to have them visit our farm many times. Of course the price was to have our performance data published against the research station and then for me to defend our management before our peers at farming

conferences.

Results came fast and the success of the project saw not only better productivity on the local farms but even greater interest in the district as a dairy region.

Now all these years on we are pleased to see our gamble paying off and so many others demonstrating the tremendous advantages that the Canterbury Plains with the irrigation offer to intensive farming and dairy in particular, I get pleasure reading stories of families still moving to the region and experiencing the thrill of the new deal just as Lois and I did all those years ago.

I firmly believe that if good management and stewardship of the land win out over irresponsible laize fare greed then what we are doing in this part of the world is not only sustainable but a responsible activity in a world increasingly short of water and high quality animal protein. I wish you well for your conference and thank you for the opportunity to reminisce.

18

SPEAKERS - PIONEERS OF THE PLAINS

Max Duncan Co-Founder of Tasman Agriculture Ltd was responsible for purchasing and overseeing the operation of all the company farms, evaluating and implementing conversion of properties to dairy units. He also has been involved in the agriculture sector in Canterbury for many years as a farm owner – operator and corporate farm director and currently owns a number of farming enterprises.

MAX DUNCAN, “The Corporate Years”

19

SPEAKERS - PIONEERS OF THE PLAINS

MAX DUNCAN

20

SPEAKERS - PIONEERS OF THE PLAINS

MAX DUNCAN

21

SPEAKERS - PIONEERS OF THE PLAINS

MAX DUNCAN

22

John Penno achieved his BSc in Agriculture at Lincoln University and continued his studies at Massey University achieving his Ph.D in Animal Science.

He commenced his working career in the dairy industry as a consulting officer before joining Dexcel as a research scientist where he developed and led a program of science designed to enable NZ dairy farmers to increase productivity and profit. In 2000 John was appointed General Manager of the NZ National Dairy Industry Extension Program which serviced farm owners, workers and rural professionals.

John is a founding shareholder of Synlait Ltd, a large scale dairy farming business in Canterbury and which is now establishing an integrated production processing and distribution business. He has been directly responsible for leading strategy development, business development and financial management.

He is a past Director of Dairy Insight and current Chairman of the Dairying and Environment Leadership Group.

DR JOHN PENNO, Ph.D, “Large Scale to Factory”

SPEAKERS - PIONEERS OF THE PLAINS

Large Scale Factory

23

SPEAKERS - PIONEERS OF THE PLAINS

JOHN PENNO

“Competition, clear price signals and choice are just as important and potentially beneficial to dairy farmers and their industry as they are to the economy as a whole.” Rodger Kerr, Masterton Large Herds Conference, 1991.

IntroductionIn 1991, when Rodger Kerr delivered his provocative address to the Large Herds Conference (Marketing New Zealand’s Dairy Output: What changes are needed and why) the New Zealand dairy industry had been operating under various single desk selling regimes since 1914. It was to take another 9 years before legislation was changed to allow competition to market dairy products internationally, and a further eight years before the long awaited competition for milk arrived.

Synlait was formed to address the issues first raised to Large Herds by Kerr in 1991.

This paper will address the issue of competition in the industry, and describe the benefits it has bought where it has been allowed to flourish, but also highlight some of the consequences of operating for 100 years without competition at an export and marketing level.

It will then go on to set out why Synlait was established, our strategic intent and progress to date.

Competition in the Dairy Industry

It is interesting that dairy farmers were so suspicious of competition at an export and marketing level - particularly when competition has been so prevalent and beneficial in other parts of the industry.

We have never been scared of competition on the farm. Rooted in the pioneering spirit, farmers have always been fiercely independent in the way they own and operate their dairy farms. Farmers compete for most resources; land, cows, feed and people. The best farmers end up with the most land and usually end up operating the most efficient systems – often forced by the fact they have paid plenty for the land and must innovate and adopt new technology to justify the price and pay the mortgage!

“A major factor in the success of the New Zealand dairy industry has been the readiness with which technological advances have been incorporated into farming practice, often enough under the stress of falling prices and the necessity to vindicate land values resulting from excessive optimism in periods of rising prices.” (Hamilton, 1942)

There has been plenty of healthy competition beyond the farm gate as well. Throughout the time there was a legislated monopoly at the marketing level of the industry (the Dairy Board and its forerunners), dairy farmers have watched their manufacturers compete intensely.

As a measure of the level of competition between dairy manufacturers, in 1930 there were 400 dairy processing companies operating in New Zealand. By the early 1960’s there were 168, 13 in 1995 and before Fonterra’s formation in 2001, there were only four left. Throughout that time competition was intense. The best most efficient companies were able to pay farmers the most for their milk, grow supply, become more efficient with innovation, and invest in new plant and gain scale, enabling them to continue to prosper.

This competition was good for farmers as it drove down the cost of manufacture and kept a high proportion of the export returns in farmer’s pockets.

In fact 75% of the long run FOB export value of dairy products is created before the raw milk leaves the farm gate (Figure 1). While processors take the glory – the real value of the industry is created on farm.

Competition between farmers, and between processors, and the resulting pursuit of increasing productivity has been great for the industry. Productivity improvement has been one of the most important features of our industry. It has meant that dairying has long been the most profitable use of class one pastoral land in New Zealand, and allowed the New Zealand dairy products to compete favourably on the international market with cost leadership. New Zealand – the lowest cost dairy producers in the developed world!

Unfortunately however, the most important part of the industry, where the most value can be created, has had no effective competition for about a century. Marketing strategy and execution is where the real value is to be tapped. For example, increasing the sales price of whole milk powder by only US$100/t translates into $0.25/kg MS at an exchange rate of US$0.60. Find a way of reliably selling at US$2500/t rather than US$2000 and you have created an additional $1.25/kg MS.

PROVIDING CANTERBURY FARMERS WITH COMPETITION FOR MILK,CLEAR PRICE SIGNALS AND CHOICE

24

I find it fascinating that one of the most successful companies in

the world made its start right here in New Zealand as a privately

owned dairy company - before the Government enforced the

single desk seller policy that was to last the best part of a century.

In 1904 Joseph Nathan and Co. began operating the worlds first

purpose built milk powder plant in Bunnythorpe just outside

Palmerston North. In 1906 Nathan and Co. registered Glaxo as

a brand for dried milk and by 1908 had opened a London office

and began manufacture of infant formula (http://www.gsk.com/

about/history.htm). Today, while no longer a dairy company

GlaxoSmithKline (GSK) has a market capitalisation of US$90b and

generates net earnings of a similar magnitude to the entire New

Zealand dairy industry (http://finance.yahoo.com/q/co?s=gsk).

I wonder how many more great companies might have had their

start in this great industry had structure allowed? There are some

that have been born out of other dairy industries during the period

our export and marketing was constrained to concentrating only

on selling the products manufactured by the competing dairy

company’s.

Back in 1991 I was in my first job as a graduate Dairy Board

Consulting Officer posted to Stratford in Taranaki. One of my

very first jobs was finding a farmer from each of my 19 discussion

groups who had a video player at home. A month was spent

playing each discussion group a video of senior industry leaders

disputing the claims of the Business Round Table in a concerted

effort to squash the ideas presented by Rodger Kerr and his friends

in case they took hold in farmers thinking.

It was at this time that I first had heard of the Kerry Dairy Company.

Kerry was a small cooperative formed that had been formed in

1972 in County Kerry Ireland. It was formed to take skim milk

from the local creameries to make casein. Within a few years

it had merged with the creameries of County Kerry and by the

early 1980’s it was arguably the best performing dairy company

in Ireland.

In 1986 Kerry Cooperative Creameries committed the ultimate

Cooperative sin and transformed itself into a privately listed

company. What was important was not that they moved away

from being a cooperative, but that they had a plan to become

an international ingredients company and set about systematically

putting the pieces in place to execute that plan.

At the time New Zealand’s dairy industry leaders where quoting

the example - citing the perils that befall cooperatives that are

so foolish as to work with non-dairy farming investors. I well

remember listening to a speech talking about how Kerry farmers

had lost control of their Cooperative amongst 600 Taranaki dairy

farmers at the Hawera racecourse in 1991.

However, share market listing was to provide Kerry with access

to investment capital to make good their international marketing

strategy. The strategy was well executed and it worked for

investors and farmers alike.

At about the time the New Zealand industry was focused on

maintaining the status quo back home, citing the example of Kerry

as what not to do, Kerry was making their first big international

purchase. They bought an American company called Beatreme

(ironically, a company that the New Zealand Dairy Board had

expressed an interest in but could not move quickly enough to

secure). Beatreme was not an opportune purchase, but had been

identified for many years as the right strategic purchase for Kerry.

They were right and Beatreme provided a foothold in the largest

ingredients market in the world, and was to become the launch

vehicle for Kerry’s highly successful international ingredients

strategy (Kennelly, 2001).

Today, Kerry has grown from a company about the size of Synlait

in 1972, to a leading world food ingredients company with total

revenue of NZ$14b and profits after tax of NZ$750m (http://

www.kerrygroup.com/). The value of the Kerry shares held by the

original farmer is often many times the value of their farms. Even

for those who have sold their shares, or who have never owned

them and simply supply milk to Kerry under contact, usually receive

the highest farm gate milk price in Ireland.

In contrast, the New Zealand industry has spent many decades

focusing their strategy on maintaining a position in New Zealand

rather than establishing the right structure to execute a market

and customer-focused plan. While some of the structural ideas

promoted by the Business Round Table back in 1991 were

eventually accepted and implemented, the industry has gone

backwards on others. In 1991 the Round Table promoted;

cooperatives. This occurred in 1996.

representation of fair value. This slowly came into place over

the 1990’s and was cemented by Fonterra as part of their

capital structure.

cooperatives together while creating space for new entrants

to come in to compete with new ideas and innovations. A

decade after these concepts were first suggested, the industry

promoted these ideas to the Government to enable them to

get around the Commerce Commission rulings which had

stopped the first attempted industry amalgamation. They are

now enshrined in the Dairy Industry Restructuring Act (2001)

resulting, among other things, in the fair entry and exit principle

and the provision of up to 5% of milk collected to competing

firms.

SPEAKERS - PIONEERS OF THE PLAINS

JOHN PENNO

25

Yet in other areas the industry has gone backwards;

them to run their businesses efficiently.

° Farmers generally have worse market signals than they

enjoyed before the formation of Fonterra. From Bluff

to Northland farmers receive a single price for their milk

irrespective of the product being made or the operating

efficiencies of the region the milk is produced and processed

in.

° Farmers receive one pricing signal a year and often the

commentary given as the year unfolds is sometimes highly

inaccurate.

milk and the return on their capital invested in the company.

The only payment is against milk delivered.

So what about Synlait?

Synlait is pioneering competition, clear market signals and choice

for farmers.

There is an underlying set of assumptions that determines the

way the company has been formed and how it operates that are

worth considering at the outset. After a discussion on each broad

assumption I will outline Synlaits response.

1. The real threat to New Zealand’s dairy industry is not other

dairy producers, but alternative low cost plant-derived protein

sources.

After years of operating a cost leadership marketing strategy, New

Zealand dairy products are not perceived as top quality. If offered

the choice many customers would purchase European product first.

At a consumer level, the European brands are generally positioned

well ahead of those from New Zealand in most markets.

Even in the developing markets, the European and American

brands are a long way in front. In China for example, in 2007 a

year before the melamine scandal, infant formula sold by Fonterra’s

joint venture San Lu sold at a 26% discount to the market average,

as opposed to the international brands which maintained twice the

market share and sold at premiums of up to 51% of the market

average (Euromomitor, September 2008).

A commodity based strategy, positioning New Zealand as a

commodity protein provider to the world’s food manufacturers,

means that New Zealand has had little to differentiate our product.

In that market, New Zealand’s true competitors are not the brand

owners such as Nestle, Danone, Bristol Myers Squibb or Abbot

Laboritories. Rather, New Zealand has two sets of competitors to

consider, other low cost international producers, and soy-based

ingredients manufacturers.

In the short term New Zealand’s competitors are the other producers of commodity milk powder like that coming from surplus market milk in Europe and North America, and increasingly low cost dairy producers in South America.

In the long term, the threat is not from low cost dairy producers, but from soy-based ingredients. While they are not there yet, when the soy manufacturers of the world learn to mimic the flavour and functionality of dairy proteins with soy-based proteins, low cost soy has the potential to undermine the value of dairy protein prices in the same way that vegetable oils undermined the value of milkfat through the 70’s and 80’s.

Soy protein is high quality, and can be produced at low cost because it is from arable rather than livestock production systems. Further, it is well suited to production in the developing world, particularly South America because of the low cost structures and availability of large amounts of high quality arable land. In Brazil, for example, soybean production has increased from 15m t in 1990 to 62m t in 2008 (Figure 2). By comparison, New Zealand produces about 2m t of dairy products each year.

Synlait’s response

Synlait has worked from the outset to minimise the amount of regular commodity product manufactured and marketed. In what has been a period of exceptionally difficult market conditions, 70% of the product manufactured through the season to the end of January was specific functional powders manufactured for specific customers.

As a small proportion of the industry we have targeted a product and market position that has not been filled by other New Zealand manufacturers.

Not only do we not want to produce and supply regular commodity products, our business is not well suited to manufacturing and marketing the large volumes these customers usually require. This is recognised by ourselves and our customers.

SPEAKERS - PIONEERS OF THE PLAINS

JOHN PENNO

26

2. To build a premium market and product position, we must differentiate milk inside the farm gate.

As demonstrated earlier, 75% of the value of milk is created on

farm. Yet, under current industry structures, dairy farmers are

commodity producers by definition. There is no way of separating

the milk produced on one farm from milk produced on the next.

In fact, the milk is mixed together in the tanker and silo, before it

is standardised in the manufacturing process.

Without a tangible way of differentiating our milk at the point of

production, it is difficult to generate value from the other intangible

benefits that are part of New Zealand product – primarily that it is

produced in a sustainable way in a very healthy environment.

Value adding strategies that are likely to position us best in

the long term, both with consumers, and against the threat of

vegetable proteins, are likely to focus on enhancing milk at the

point of production. In turn this will deliver a tangible benefit

from which to leverage value from the unique position as product

of New Zealand.

Consumers who are prepared to pay for the tangible benefits of

more healthy milk are more likely to pay for the intangible benefits

of where and how the milk was produced.

Synlait’s response

milk on-farm in ways that add real value for our customer’s

customers – the end consumers.

relationships we have established with potential customers

and technology providers, will see this strategy deliver higher

margin products.

first trial of special milks have been made on farm and sample

quantities are in the bag.

integrated supply chain. We regularly get our customers out to

the plant and onto the farm, with over 27 customer visits since

commencing operations.

so that our suppliers learn about our customers products,

businesses and their end markets.

3. Investment in a modern farming enterprise is completely different to an investment in a food manufacturing and marketing business, and is unlikely to suit the same investors.

Cooperative structures result in the investors in the farming

enterprises being the investors in the processing and marketing

firm by default. However, because the businesses are completely different in nature, a common set of investors is unlikely to be optimum for either the investors or either individual business.

For example, consider the typical Canterbury dairy farmer. Dairy farmers typically work in their business. Through hard work and good decisions, large farm owners are usually successful business owners and have achieved high rates of total return on their investments. Long run internal rates of return in excess of 15% are not uncommon. They are usually leveraged and are often focused on growth through the acquisition of more land and cows where they can put their skills to work.

Any off-farm investment, including investment in the processing and marketing enterprise is effectively funded by debt and requires an adequate cash return from that investment to at least service the debt.

Conversely, developing a value added food business requires patient capital. Long term strategies require investors who are happily to see no cash returns for some time and are prepared to see a high proportion of earnings continually reinvested.

Kerry Group, for example, paid shareholders a dividend amounting to only 15% of total shareholder earnings in the year ending 31 December 2007. More than 85% of earnings were retained and reinvested for further growth and development of the company. Of course the shareholders expect to see the return for this reinvestment; however they are happy to take them as capital growth in the company reflected in the value of the share.

Even Nestle, the most established value-add dairy company in the world, generally only returns shareholders 80% of shareholder earnings as a dividend and share buybacks (http://www.nestle.com).

Investing in a company that is unlikely to pay a cash return for many years while it develops and becomes established is unlikely to suit a leveraged owner. Likewise, a shareholding base of investors demanding that total shareholder earnings are paid each year, as is normal in the cooperative model, is unlikely to enable the company to successfully pursue long term investment strategies required to build a sophisticated international ingredients business.

Compare the relative success of Kerry and the New Zealand industry in its various forms. Kerry changed its capital structure to pursue its marketing strategy in 1986 when it was the size that Westland Dairies is today. Since embarking on its international strategy Kerry has grown revenues to 75% of Fonterra’s, and has developed a world leading ingredients business with net profits of NZ$0.6b.

Synlaits response

necessity for suppliers to invest, but equally there is nothing

preventing them from investing in the company.

SPEAKERS - PIONEERS OF THE PLAINS

JOHN PENNO

27

SPEAKERS - PIONEERS OF THE PLAINS

JOHN PENNO

building a value added dairy company through the long term.

to be reinvested rather than distributed for a considerable

period.

investment and development prospects of the company ahead

of the demands for cash returns from the investors.

4. That farmers primarily want certainly of off-take, and are happy to rely on commercial agreements.

A growing proportion of farmers see no need to hold an

investment in a cooperative to keep certainty of supply – and why

would they.

Firstly, they are selling a valuable product, albeit with a fluctuating

market value based on international supply and demand of dairy.

The risk that farmers will be unable to sell a valuable commodity

such as raw milk at a fair market is only a risk if there are not

competing purchasers. Having competing purchasers ensures that

a fair market price will be received, which is the primary reason

that farmers in Australia generally receive higher prices than New

Zealand farmers – even farmers supplying milk under contract to

New Zealand owned companies.

Secondly, every business in the world operates with suppliers

and customers relying on commercial contracts. It is in both the

farmers and the processors interest to agree pricing mechanisms

and conditions of supply. The appetite for this form of supply has

been demonstrated over the past two years with a large number

for farmers switching to contract supply as soon as it became

available.

Synlaits response

contract.

receiving the same terms and conditions including milk pricing

mechanisms.

until one party notifies the other of an intended change,

whereby two complete seasons pass to 31 May before the

change can take place.

returns, the performance of the company and planned growth,

but is underpinned by a minimum price guarantee relative to

industry benchmarks.

5. That farmers want clear transparent pricing signals to optimise their long run financial performance.

Whenever market mechanisms have been put in place, farmers

have quickly responded on mass to deliver what is financially

optimum for them to do so. Over the years we have seen farmers

deliver what the pricing signals called for be it fitting within milks

quality parameters to avoid financial penalties or growing milk

production ahead of anticipated share allocations.

Therefore it is up to the purchaser of the milk to ensure that pricing

signals are accurate and clear to maximise value creation along the

entire value chain.

Synlait’s response

farmers for the actual value of the key milk components in the

products we manufacture. This has seen us reduce the volume

charge and incorporate lactose into the Synlait payment

system.

benefited both the company and most of our suppliers. It has

allowed us to target the milk we want in a fair and transparent

way and has changed the composition of the milk we process,

increasing yields in the manufacturing operation, and allowing

greater returns for those who supply the right milk.

both the market at the time and the interaction with the capital

costs of plant utilisation.

cycle. For commodities products annual aggregation of annual

milk payment can create large price distortions to farmers in

the milk value. For example in August 2007, the commodity

markets and exchange rate supported raw milk values of

greater than $7.00/kg MS. Milk produced in March could

probably support only $4.50. Yet farmers will receive the same

payments for milk produced in the year ending 31 July 2009.

link pricing from commodity pricing, an annual pricing change

might be too frequent. Long term contracts with customers

could be linked to long term pricing for farmers involved in

producing special milks for certain products.

Summary

There is no monopoly on the best ideas. For this reason, it is vital

for the future of the industry and for dairy farmers that a range of

processing and marketing firms evolve and compete for farmer’s

milk.

Each firm will pursue its own strategy and create its own product

and market position. Some will work and some won’t (and by the

28

way history has shown no matter how dominant the incumbent they tend to be overtaken by once small nimble start-ups; Christensen, 1997).

Those that excel will need more milk to grow and will pay farmers more to get it. Those that don’t will loose their capital (put in by others) and their share of the raw milk to the successful – from a farmers perspective it is difficult to see the downside.

Synlait is executing a plan to;

1) Establish a market and product position away from commodities

2) Differentiate milk on farm in ways that create value for our customer’s customers

3) Ensure the company has the right capital structure and shareholders to execute our market and product strategy over the long term

4) Offer transparent fairly priced milk contracts that provide farmers with long term security of off-take without the need to invest capital in a downstream business

5) Champion new and innovative pricing mechanisms to ensure Synlait suppliers have simple but accurate and transparent pricing mechanisms built into their milk payments.

This is how we plan to provide Canterbury farmers with competition for milk, clear pricing signals and a real choice!

Feel free to join us.

References:

Euromonitor, September 2008. Global Packaged Food: Market opportunities for baby food to 2013.

Christensen, C. M., 1997. The Innovators Dilemma. When technologies cause great firms to fail. Harvard Business School Press, USA.

Kennelly, J. J., 2001. The Kerry Way. The history of Kerry Group 1972 – 2000. Oak Tree Press, Dublin, Ireland.

Hamilton, W. M., 1942. New Zealand Journal of Science & Technology.

SPEAKERS - PIONEERS OF THE PLAINS

JOHN PENNO

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DR TERRY HEILER, CEO Irrigation NZ

Dr Terry Heiler is an international consultant in natural resources, specialising in water management and irrigation. His engineering consultancy works with clients in New Zealand, Australia, Asia and with major international development agencies.

His prior experience includes 25 years as a principal research engineer - soil and water, and 11 years as director of New Zealand Agricultural Engineering Institute, Lincoln University.

He runs a small farminmg business based in West Melton, Central Canterbury. Terry was appointed as the inaugural chief executive of INZ in July 2006. His role with INZ is primarily leadership of the New Zealand irrigation industry with scientific and accurate advocacy to government and other key decision makers.

Rangitata Diversion RacePhoto courtesy of Ashburton District Tourism

31

SPEAKERS - WATER - EFFICIENCY, RE-CHARGE, HOW DOES WATER EFFECT THE WHOLE COMMUNITY

Conor English was born in Invercargill in 1964 and grew up on a farm in Dipton, Southland. He received his secondary school education as a boarder at St Patricks College Silverstream, Wellington. He holds a commerce degree in Economics from Otago University.

Conor started his career as a farm worker, shearer, fencer and presser in the Taranaki region, before moving south and running his own farm in partnership with a brother. The farm was built up to 7000 stock units running sheep, cattle, grain, deer and forestry.

Conor shifted to Wellington in the early 1990s and worked in the insurance and oil industry before taking a role with Federated Farmers where he was responsible for the Grains Section and various policy issues. During his three years at the Federation he was involved in helping the organisation adjust to the new MMP environment.

He then moved to the Beehive to initially undertake the role of press secretary for Hon Warren Cooper. He then became a private secretary and then press secretary and advisor to Hon John Luxton, number four in Cabinet. Conor worked with ministers who held a number of portfolios covering ministerial responsibilities for commerce, industry, police, Maori affairs, defence, war pensions, internal affairs civil defence, associate international trade, biosecurity, lands, fisheries and agriculture.

Conor was selected as the 1996 New Zealand representative for the European Union Visitors Programme and visited Belgium, France and Germany to look at agriculture, economic and trade issues, and political systems.

Conor left parliament to take a senior management role at the New Zealand Employers Federation before taking on the chief executive role at the newly formed New Zealand Property Institute. After five years in that role, Conor accepted the role of second-in-charge and commercial director for The Property Group Limited, a private infrastructure property consultancy with 80 staff. After about three years, Conor resigned to take up his new role at Federated Farmers of New Zealand.

Conor is married to Jo Coughlan, a farmer’s daughter, who runs her own business and is a Wellington city councillor. Conor and Jo have six children aged between five and 16. The family have lived in Wellington for 17 years.

Conor’s interests include watching family play sport, skiing, camping, economics and supporting the Highlanders.

CONOR ENGLISH, CEO Federation of Farmers

32

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I’m General Manager, Sustainable Production within Fonterra Milk Supply. I report to Barry Harris. I’ve been with Fonterra for just over two years. I spent the three years before that within the Department of Prime Minister and Cabinet providing advice to Helen Clark on local government, environment, Auckland affairs, hazardous substances and sustainability (as a neutral public servant – not a political appointment). My early career was with local government. This included five years as Strategy Manager with Local Government New Zealand covering environment, infrastructure and regulation.

JOHN HUTCHINGS, General Manager Sustainable Production, Fonterra Co-operative Group Ltd

Trotts Garden, AshburtonPhoto courtesy of Ashburton District Tourism

34

SPEAKERS - CARBON FOOTPRINT

Craige Mackenzie and his wife, Roz, are arable and dairy farmers from Methven, Mid Canterbury in the South Island of New Zealand. They have two children, Jemma, in her final year of an Agricultural Science degree at Lincoln University and Scott who is in his first year at Canterbury University studying Physics and Philosophy.

The Mackenzie’s intensively crop 200ha, harvesting grain, ryegrass and vegetable seeds. They have recently expanded their operation to include a 220ha dairy farm milking 830 cows which they farm in conjunction with the Leferink and ter Bogt families. In 2006 they were finalists in the Rabobank-Lincoln Farmer of the Year Competition. Craige is currently serving on the Foundation for Arable Research (FAR) Strategic Research Committee and is involved in various research projects run by MAF SFF, FAR and other industry groups within the arable sector.

Craige was a recipient of a New Zealand Nuffield Farming Scholarship in 2008. His study topic was “Understanding Carbon Footprints within Farming Systems”. He believes that understanding and managing carbon emissions on farm will become critical in maximising the potential available to New Zealand agriculture globally. Areas that Craige studied are sustainable use of irrigation resources, efficient and accurate nutrient budgeting (including Bio Char) and the use of Precision Agriculture in mitigating greenhouse gas emissions.

CRAIGE MACKENZIE, New Zealand Nuffield Scholar 2008

Climate Change has become one of the crucial issues of the early 21st Century. Pressures are increasing on agribusinesses to reduce carbon emissions. This drive for change is coming from an international level, not just nationally. The Intergovernmental Panel on Climate Change (IPCC), established in 1988 by the United Nations, has played a huge part in turning our attention to the concerns surrounding climate change. More recently in May 2008, the European Union adopted a report calling for carbon foot-printing labels on all goods and services. Recently UK supermarkets have adopted programmes which offer incentives to their growers if they join and achieve good scores in whole-farm carbon footprint assessment. A recent supermarket survey in the UK found that around 80% of those buying the family groceries used carbon footprint or food miles information as part of their decision making process.

New Zealand has a unique Greenhouse gas emissions profile with the agriculture sector the largest source of emissions, very unlike that of other developed countries. They make up almost half of our total emissions and have been rising at close to 1% per year since 1990. Despite the continued rise in absolute emissions, emissions intensity, the amount of GHG produced per unit of food produced, has been dropping. New Zealand’s agricultural sector produces enough food for approx 35 million people annually. Because of this New Zealand’s greenhouse gas emissions, from ruminant stock in particular, are disproportionate to our relatively low population.

Regional and larger scale estimates of GHG emissions are usually obtained using simple spreadsheet calculations which are associated with high uncertainty. Carbon management models can be a very precise way of working out what is happening on farm and what steps can be taken by agribusinesses to increase carbon

conservation measures. Many countries are currently working on or have produced soil carbon models and carbon calculators to help manage agricultural GHG emissions. In discussion with researchers at Arhus University, Denmark, it was stated that the best models were those that had a C/H

2O/N relationship and included mitigation.

The efficiencies gained by effective use of Precision Agriculture (PA) technology and New Zealand’s natural water resources could be a very quick way to make some significant progress in the reduction of agriculture’s GHG emissions. Precision Agriculture has progressed from Global Positioning (GPS) and pretty maps to the broader stance of using the right input, in the right amount, in the right place, at the right time and in the right way. The acceptance of all 5 R’s will ensure that New Zealand farmers are maximising PA to its fullest potential, enabling us to operate in the most efficient, environmentally sustainable manner possible.

Issues with water demand differ little in New Zealand to the rest of the world. Irrigation plays a very important role in helping to maximise carbon sequestration and minimising GHG emissions through increased yields. With substandard application, it can also play a very negative role causing leaching of nitrogen in the soil, resulting in polluted waterways. Concerns regarding water quality and availability are reported in the media most weeks. Many researchers and farmers are looking at ways to better manage what is often regarded as New Zealand’s premier natural resource.

No matter what happens with the Kyoto Protocol or our national Emissions Trading Scheme (ETS), New Zealand needs to prepare for a world where cost will be associated with greenhouse gases (GHGs).The current global credit crunch may have an impact on the timeframe but it is likely only to delay the inevitable – GHGs will be a cost to New Zealand’s agriculture.

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Robin retired from dairy farming in 2007 to a 15 hectare avocado orchard he has owned with his wife since 2000. He has a Diploma in Agriculture from Massey University. As a tutor for Ruraltec in Whangarei Robin teaches students in Ag ITO courses up to production management level. He also tutors for Farmsafe and is an accredited Growsafe trainer.

His interest in the Government’s Emission Trading Scheme has led him to research the topic and he is a regular contributor to rural publications with his opinion pieces on that subject published in New Zealand and Australia.

Robin is a founder and Chairman of Pastural Farming Climate Research Inc. The purpose of the organisation is to represent farmer’s interests by highlighting the many discrepancies and misinformation surrounding any role livestock play in global warming. The lack of any true scientific evidence, the use of assumptions and theoretical models instead of facts and the reliance on uncertain and questionable information by organisations including the New Zealand Government is in the organisation’s opinion totally unacceptable and dishonest. The organisation intends funding research to provide the facts that are missing from the current debate. This, it is hoped, will result in the role livestock play in global warming proven to be negligible if not zero.

ROBIN GRIEVE, Agricultural Tutor

I think we are all familiar with the concept of global warming.

It is supposed that since industrialisation when we began to use

fossil fuels for energy and transport, large amounts of carbon

have been pumped into the atmosphere. This carbon was taken

from the atmosphere over millions of years and became locked

away in oil and coal and gas reserves and the fact that it has been

released in a relatively short time has resulted in an increase in

carbon dioxide levels in the atmosphere. As far as I am aware

the one and only fact in the entire global warming story is that

carbon dioxide levels in the atmosphere have increased. They talk

of carbon dioxide because carbon does not exist as carbon it is

always with something, in this case with oxygen. In the process of

burning or firing an engine oxygen is combined with the carbon

in the fuel and after it explodes in the combustion chamber the

exhaust is primarily CO2.

To debate global warming is not our purpose today but it is

important to bear in mind, as we talk about ruminants and the

role they may or may not play in all this, what global warming is

all about. We start with the one fact that I am aware of and that is

that the concentration of CO2 in the atmosphere has increased in

recent times. From there what you believe is a personal journey;

Do you believe the increase in CO2 levels is due to the use of fossil

fuels or other reasons?

Do you believe the globe is warming?

If so do you believe the globe is warming due to increased levels of

carbon in the atmosphere or is it due to other things?

My comments on each are:

It is definitely a plausible theory that the use of fossil fuels has

changed the atmosphere. While unlikely to ever be proven it is

definitely believable.

Is the globe warming? I have no idea, some say yes and some say

no. Most people with any information on this have a vested interest

so all views should be treated with a degree of scepticism.

If you believe the globe is warming is it due to CO2 from fossil

fuel? To answer that you need to know what all the factors are

that influence global temperatures eg the sun. If you can discount

the sun and the other factors that influence temperature as being

the culprits and are happy to blame greenhouse gases, which

ones? 95% of the greenhouse effect is caused by water vapour,

3%by CO2 of which about 3% is from human activity including

the use of fossil fuel. Thus human activity involving CO2 totals

about 0.09 % of the greenhouse gas effect. Human activity also

involving methane from fossil fuel and livestock etc total 0.06%

of the greenhouse gas effect and nitrous oxide 0.04%. Is that

significant enough? The figures I am quoting are indicative only

because it is not easy to find impartial or universally accepted

information about this. The figures I am using came from the

United States Department of Energy.

The point I am making is that to subscribe to the notion of fossil

fuelled global warming you have to ask yourself a lot of questions

and for me personally there are not yet enough answers. There are

a lot of theories, theories that should be examined, and certainly

the effect of fossil fuel emissions on our atmosphere should be

studied and certainly we should be open to these possibilities.

But where I have difficulty, where I really have problems is

when I go to the websites of our Government Ministries such

as the Environment and Agriculture and I see the theories I have

mentioned portrayed as facts. They are crossing a line by doing so

and I am very uncomfortable with this because it smacks to me of

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propaganda and I don’t like the concept of living in a regime that

uses such things. Individuals can believe what they like about this

or anything, lobby groups too can believe what they like, as can

a political party but it is not ok for a government to believe when

they enact legislation, they must know.

They don’t know and whether they ever will know is unlikely and it

is my point that we must always remind them that they should not

act against individuals and groups like pastoral farmers until they

do know. The problem is that the global warming industry has

taken on a life of its own. If we do not constantly bring it back to

the first principle and distinguish always between fact and theory

then we are in danger of finding ourselves lost in a world created

by this global warming industry where theories have become facts

not because they are proven but because everyone just forgot that

they were never proven. And the first principle of global warming,

its central plank is that the globe is warming due to an increase in

CO2 caused by burning fossil fuels.

It is vital we remember this for now I wish to focus on my subject

which is where do ruminants fit in all this. How do ruminants cause

CO2 levels in the atmosphere to rise? I will start at the beginning.

For me it has been a journey of discovery and it continues today. It

began when I looked at what we were being told and I thought,

this just does not make sense. I live in Whangarei, I drive to

Auckland regularly, I pass through dairy country and beef farming

country, and some sheep country, I look at cattle grazing on a

green hill and it looks good to me. I get to Auckland I sit in traffic

on the motorway, thousands of vehicles burning fuel I smell the

exhaust fumes and they say that those cows and sheep are doing

more damage to our atmosphere than all those cars and I say that

does not make sense. I spent a month in the UK last year and I saw

people and cars you would not believe. A beautiful country with

lots of space but crowded into the cities and towns are 60 million

people living on a land mass smaller than New Zealand. When I

get home I can’t figure it out, 4 million people scattered about

with all this land with trees and grass all soaking up the CO2 from

our car exhausts. We must have as many trees, as much grass as

the whole of the UK with only 4 million people how can we have a

problem? So I decided what they said can not be right and began

to research it and get some answers. I do not have many answers

but I have lots of questions.

My first question was how can a farmer be taxed for carbon

emissions yet not given a credit for the CO2 used to grow the

grass. Eventually the answer was on hand and it is that the farmer

is given a credit for the grass. Below is a diagram I received from

the Ministry of Agriculture.

It shows the following;

All the carbon from unutilised pasture, and urine and faeces returns

to the atmosphere. This is an assumption and it is made because

they have to account for it somehow. They do not know what

happens to it but because we can not prove yet that this carbon,

or even some of it, becomes incorporated in the soil then it is

assumed that it all returns to the atmosphere. Work is being done

with this and it may be we can one day replace an assumption

with a fact which will benefit farmers, if it is established that soil

carbon increases under farming. If it is proven that soil carbon

levels do not increase with pastoral farming we will be no worse

off than we are now.

The next thing it shows is 0.62 tonnes of carbon are removed

as products, meat, milk, wool and leather all eaten by humans

according to AgResearch. This is not regarded as a carbon sink

because it is not removed from the atmosphere for long enough.

This may be true of something you or I ate yesterday and is returned

to the atmosphere today. But it ignores woollen products, leather

products and it ignores the milk I drank at school 44years ago that

grew the bones that have carried me all this time and hopefully

another 40years yet. An anomaly exists also by not including

these products in the carbon equation. A New Zealand farmer’s

produce is sent overseas and consumed overseas. The carbon is

not credited to the NZ farmer to offset their carbon liabilities so

they are effectively being taxed for the 0.62 tonnes of carbon. The

carbon is released back into the atmosphere from this overseas

country yet the NZ farmer has paid for the carbon tax. The same

NZ farmer then purchases a product produced overseas, namely

fuel, and is held liable for these emissions as well. How is that

fair?

The next thing the diagram shows is the part that is central to

this whole thing, the methane. 0.25 tonnes of methane which

together with the other components including respiration and

faeces total the 5.6 tonnes of carbon that were consumed. So the

answer to my first question, how can a farmer be taxed for carbon

emissions yet not given a credit for the CO2 used to grow the

grass? Is that they do give credit for the carbon used to grow the

grass, 10.6 tonnes of credit which they then take back by making

assumptions on some things and ignoring others. On the methane,

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the 0.25 tonnes, that is an accurate figure as there is plenty of

material to support the fact that cows and other ruminants emit

a given quantity of methane to a given quantity of dry matter

consumed or product produced. It is how the methane emission

is treated that is at the core of our industries problem. The 0.25

tonnes of carbon in the form of methane is multiplied by a ‘global

warming factor’ of 21. This is because methane has a greenhouse

gas effect 21 times greater than CO2 over a one hundred year

period. So because the cow was in balance 5.6 tonnes in and 5.6

tonnes out (according to them) the methane component being

multiplied by 21 blows the budget and while 5.6tonnes of carbon

come in, 10.9 tonnes of carbon equivalent go out.

This is a big problem, even if we get credit for our faeces carbon

and our product carbon we are still short. Even if we get the Enron

style accounting they use questioned, whereby the methane

carbon is counted twice, once as carbon and secondly as methane

we are still a long way short. I grappled with this, I looked at the

cows and sheep in the padocks as I made my way down to sit in

Auckland’s motorway traffic and I thought this does not make sense

yet I could not figure out what was wrong with the AgResearch

diagram and the methodology of accounting for carbon emissions

in agriculture. And then one day clarity, the answer was not

in the complex methodologies and the numerous figures and

explanations. The answer, as it always is, is in the simplicity. Earlier

I talked of first principles and the first principle of global warming,

its central plank, is that the globe is warming due to an increase in

CO2 caused by burning fossil fuels. The Intergovernmental Panel

on Climate Change states in its website “most of the warming

that occurred during the last quarter of the 20th century was likely

due to the growth of atmospheric carbon dioxide concentration”.

Further it states; “emissions from human activities are substantially

increasing the atmospheric concentrations of the greenhouse

gases CO2, CH4, CFCs,N2O”.

Livestock enteric emissions of carbon dioxide and methane result in

no increase in atmospheric concentrations of CO2 (carbon dioxide)

or CH4 (methane). This is because an animal such as a cow or a

sheep is incapable of producing carbon; they are simply part of a

very short term carbon cycle. The livestock farming carbon cycle

lasts between ten days and ten years as opposed to the fossil fuel

carbon cycle that lasts for millions of years.

The question is then why is methane from livestock treated as it

is. Why does the 0.25 tonnes of carbon as methane have to be

multiplied by 21 times at all? Who says it has to be, why does

it have to be and what evidence do they have to back up their

claims?

The Ministry of Agriculture state:

“Although methane from animals breaks down into CO2 and water

eventually as part of the natural carbon cycle, until that point, it is

contributing to the gradual warming of the atmosphere (see later

section on how non-CO2 gases are converted to CO2 equivalents).

This break-down can take in excess of 10 years to occur.”

“As almost all of the CO2 removed by plants is recycled back to the

atmosphere as CO2 relatively quickly (as shown in the diagram) it

is effectively balanced which means the only real difference is the

methane. As a molecule of methane is more effective (21 times

over 100years) at trapping radiant energy reflected from the earth

than a molecule of CO2.This means there is still a net warming

effect.”

What they are saying now is an assumption, “it (the methane) is

contributing to the gradual warming of the atmosphere” how do

they know this? What evidence do they have that this is so? Where

are the studies and the research? There may be some evidence

about methane but we are not just talking about methane we are

talking about enteric methane from livestock.

There is a difference as this diagram shows.

The Ministry of Agriculture do acknowledge this to a certain extent

because the methane from fossil fuels has a 10 percent higher

‘global warming potential’ than methane from biomass ingested

by animals. This is because the molecule of CO2 that is left in the

atmosphere by emitting fossil fuel methane, after methane breaks

SPEAKERS - CARBON FOOTPRINT

ROBIN GRIEVE

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down, is increasing the total levels of CO2 in the atmosphere.

They then depart from the original concept of global warming as expressed by the IPCC by stating:

“Although methane from animals breaks down into CO2 and water eventually as part of the natural carbon cycle, until that point, it is contributing to the gradual warming of the atmosphere.”

This questionable assumption is not only contrary to assumptions made by others including climate scientists it is well outside the IPCC’s concerns about increasing concentrations of greenhouse gases. So why do we do it? Why do we include something which has nothing to do with increasing concentrations of atmospheric CO2?

Further if we are to take into account other causes of warming in our environment that are nothing to do with the concentration of greenhouse gases such as the Ministry of Agriculture is doing with livestock methane we would need to consider for example other things such as the extra warming caused by forestry land and bush reserves due to their lower rate of surface reflection of heat as opposed to pastoral land.

At the end of the day the methane from biomass ingested by livestock is renewable and adds nothing to the atmosphere and can therefore not be responsible for global warming, the methane

in coal and natural gas is quite different and could affect the

climate.

One has to remember we are not talking just about effect on the

climate. If a cow converts CO2 to methane there may well be a

warming effect as with the forestry land retaining more heat

than if it was pasture. As it is with my orchard I plant thousands of

shelter trees, fifteen hundred avocado trees, it is a warmer micro

climate than it was. Kerikeri in Northland a sunny spot filled with

orange groves and vineyards etc. It once was a windswept desolate

spot until people started planting shelter trees many years ago. The

local climate has changed but none of this including the belching

ruminant has any effect on the concentration of a greenhouse

gas which was the first and only principle of global warming.

Of course these are my assumptions and as with the Ministry of

Agriculture’s assumptions good for nothing more than to debate

the issue and definitely not adequate for any government to base

legislation on. The diagram above shows a point of difference

between our assumptions. They assume every ruminant belch

should be included as a greenhouse gas, I assume every ruminant

belch just replaces the methane that was belched ten years ago

and has now broken down to CO2 and is being absorbed by grass

as we speak.

Even changing stock numbers do not fit into the area of concern

dictated by the underlying principle of global warming. Any

changes in livestock numbers can only result in a one off increase

or decrease in methane levels. Even a rapid increase in livestock

numbers would be balanced within 10 years by the equivalent

offsets in the cycle. This is in stark contrast to fossil fuel methane

that is never balanced by offsets.

It is my belief that treating livestock methane emissions as they

do is a big mistake. There is no justification for it in terms of

addressing the concept of global warming and no justification in

science and any published research anywhere in the world. My

reasons for believing this I have just explained, now I would like

to highlight a few of the problems they face by including livestock

methane emissions as they do.

1

The treatment of bio fuels and livestock emissions.

Under the present system bio fuel emissions are regarded as

carbon neutral. The Energy Efficiency and Conservation Authority

states; “As bio fuels are produced from biological material they are

to varying degrees ‘carbon neutral’ which means they do not put

extra CO2 into the atmosphere- unlike fossil fuels.”

The Ministry of Transport states on its website; “Bio fuels are

regarded as carbon neutral because they are made from renewable

sources. Therefore the bio fuel component of any fuel would be

exempt from a carbon tax or similar tax.”

39

The emphasis placed by both agencies on whether the emission

of the carbon equivalent has a net effect of increasing the

concentration of greenhouse gases is in line with the original

concept of global warming being due to increasing concentrations

of greenhouse gases. If only the Government could see the double

standard here. Bio fuels are the darling of the environmentalists.

Apart from bio fuels being described to the European Community

as the “biggest crime against humanity ever” because of the

starvation they cause, they have other problems. Bio diesel might

emit sustainable carbon but plenty of fossil fuel is used to process

it just about cancelling out the benefits and then because a bio

diesel powered car has a higher concentration of nitrous oxide in

its exhaust gas than a fossil fuelled derived diesel powered engine

they are downright dirty, but the Ministry of the Environment

excludes N2O emissions in the equations “because it is too hard

to work out” This is a questionable excuse considering that when

something is too hard to work out in the area of agricultural

emissions they just guess. But then agriculture is not the darling

bio fuels are.

2

Lawnmower versus sheep.

Using the methodology laid out by the Ministry of the Environment

in The New Zealand Inventory of Greenhouse Gases I calculated

the following:

To mow a lawn of 1000 square meters using 1litre of fuel 3.035

kgs of CO2 are emitted to the atmosphere.

1 litre of fuel at 85% carbon = 850 grams of carbon =3.035kgs

CO2 (CO2 is 28% carbon)

To graze a sheep on the same lawn would require it to eat 72kgs

of dry matter of grass. (This is based on Dairy NZ calculations for

removing grass at a height of 75mm to a residual height of 25 mm

in height over 1000 square meters.)

1 kg dry matter eaten by a sheep produces 18g methane. (NZ

Inventory of Greenhouse Gases, Ministry of Environment)

18g methane multiplied by 72 = 1296 grams of methane.

1296 grams methane multiplied by 21 (global warming potential)

=27.216 kgs CO2 equivalent.

Therefore under the current treatment of livestock methane

emissions we are being told the global warming impact of using

a sheep to graze a lawn is 9 times worse for the environment

than using a lawnmower. This is clearly absurd and should cause

a rethink of the methods used to estimate greenhouse gases. The

reason this ridiculous situation exists is because of the failure to

differentiate enough between fossil fuel carbon emissions and

biomass livestock emissions.

3

There is a growing perception in New Zealand and around the

world that carbon is a pollutant. The Canadian Government has

declared carbon a pollutant. We must challenge that thinking and

demonstrate where ever we can how absurd this thinking is. If

we do not do this New Zealand farming is in danger of being

portrayed as a producer of non green products. Already there

are calls to not eat meat because of the methane produced by

livestock. This is grits to the mill of our competitors and the more

they can portray pastoral farming as bad for the environment the

better for them.

Maybe this is the motivation behind some of this emission trading

concept and I can understand this from our competitors but why

do we have to suffer this thinking from within New Zealand?

Thanks to some members of parliament and some people within

our own industry there is a perception the taxpayer is subsidising

polluting dairy farmers because they ruin the rivers and don’t pay

their carbon tax. This thinking has to be challenged and when

I see material from within from the likes of Fonterra that state

that agriculture is responsible for 48.5 percent of New Zealand’s

greenhouse gases I want to scream. Why do they accept this

rubbish unchallenged? When I hear a group called the Kyoto

Forestry Association calling for farmers to face the full force of

the emission trading scheme so that farm land can get cheap

enough for them to buy and then put into forestry you realise

that everyone has an agenda. And whether they be a group or

a political party such as the Greens you start to wonder, are they

really concerned about global warming or are they just using it as

an excuse to fulfil their own agendas?

I’ll finish with a quick look at the other greenhouse gas nitrous

oxide.

There are three ways a dairy farming operation produces this.

Artificial nitrogen is a fair cop. By applying it, nitrogen is added

to the cycle from a fossil fuel derived product so it could be an

advantage in terms of PR to pay something there. As for the other

two, they are part of the natural cycle, all be it a long one of 300

years and one thing I have found is that when you start trying to

tax an isolated part of a natural cycle the accuracy and fairness

of it is questionable. Animals do produce urine and faeces and

there is a nitrogen component in it of which a very small amount,

which differs from farm to farm and at different times of the year,

is converted to N2O. But if you hold the animal responsible for that

what credit do you give them for their other roles in the cycle? At

present none is given because it is too hard to work out!

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As for rotting vegetation, the soil microbes and other decomposing medium, again part of a cycle so why include it? Also if we are to include these emissions:

hectares of pastoral farmland and ignore the same emissions from the remaining 17 million hectares of land in, forests, parks and lawns, bush and reserves.

(Gorse areas in forestry and unmanaged land emits similar nitrogen emissions to dairy farmland yet are ignored, this from Dr Guna Magesan, senior scientist with Crown Research Institute SCION).

which includes any activities using mulching instead of burning, composting toilets and bio fuels. These activities are deemed good for the environment but when N2O emissions are considered they are in fact not as environmentally friendly as we are being led to believe.

From the NIWA website in a report about the Environment Waikato’s nitrogen trading/ capping scheme I got this information: In the Taupo area average nitrogen emissions from pasture being farmed is 14 kg /ha/year. What these emissions are is not important as it is just the comparison between the different land use that is the issue. Average nitrogen emissions from forestry and undeveloped land is 2kg/ha//year. In this area there are 51,483 ha in pasture that produce 743 tonnes of nitrogen emissions per year. The remaining 194,802 ha produce 390 tonnes of nitrogen emissions per year. The New Zealand government want to tax the N2O emissions produced from the 743 tonnes and want to ignore the N2O emissions from the 390 tonnes. Why would they want to do that? I focus on these things when I face a question like this:

it is not a scientific one.

ever been. Statements made by Ministries such as Environment and Agriculture should be viewed with suspicion.

simply because some people working for the Government and other groups wanted them to be so treated, while the others just forgot that they had never been established as facts.

I can understand them ignoring all the emissions they can get away with from forestry and bio fuel and composting and all the things they want to believe are clean and green because of what I have just said but if this is to be about global warming they must not be allowed to be selective, they must be fair and honest but most of all they must be sure and have all their facts established beyond dispute and I intend to go on questioning every time they use information that is not factual until they can either prove them or until they stop using them.

So what does this all mean in a nutshell?

The global warming industry is big business; agendas ranging from

greed to ideology along with politics are the driving forces that

are far greater than any concern about global warming. The basic

principle of global warming is that CO2 levels are increasing and

causing temperatures to rise.

The Intergovernmental Panel on Climate Change states in its

website “most of the warming that occurred during the last

quarter of the 20th century was likely due to the growth of

atmospheric carbon dioxide concentration”. Further it states;

“emissions from human activities are substantially increasing the

atmospheric concentrations of the greenhouse gases CO2, CH4,

CFCs,N2O”. Livestock can not be responsible for any increase in

any of the greenhouse gases they talk of. Unfortunately we live in

a country and a world that responds more to emotion than logic

and for farmers to avoid being labelled greenhouse gas emitters

they are going to have to fight. Even if we have a government with

seemingly little appetite to impose a tax there are many dangers in

allowing current thinking to remain unchallenged.

By promoting the concept that there is a carbon pollution

factor in the production of livestock produce they can get

more traction with the buy local campaigns.

they are not paying their carbon taxes. Farmers overseas receive

huge support from their general population and it is tragic that

NZ lobby groups, government departments and some politicians

do everything they can to marginalise NZ farmers. These people

must be challenged so that we can restore the understanding

between town and country that is so important.

of meat and dairy products because they are responsible for

greenhouse gas production. While this is a small voice now it

must be challenged because unless we do it could become a

large voice.

There is a lot of factual information missing from the current

debate and very little research is being done to address that.

Millions of dollars of farmer’s money is being used on research that

starts by assuming the theory and models that promote agriculture

as New Zealand’s largest greenhouse gas emitter are true even

though there is no evidence of this. This research will not help NZ

farmers at all. The only research currently underway that may be

of any use is on soil carbon. I belong to a group called Pastural

Farming Climate Research and our purpose is to raise funds to do

the research that will establish the truth about livestock methane

emissions. We are in the process of undertaking that study now

and it is my hope that with your support we can get the answers

that will show livestock farming to be at least carbon neutral if not

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a carbon sink. We also intend to challenge any group whether it

is government or private that states, as a fact, that agriculture is

responsible for 48.5 percent of New Zealand’s greenhouse gases

because for the reasons I have explained that figure is not an

honest representation of the facts.

What can we do as farmers?

join me at farmcrbon.co.nz.

they have done to question the assertion made about livestock

emissions. Next time you are asked if you want to contribute

a milk solid levy for Dairy NZ ask them what research they

did to establish whether or not livestock could change the

atmosphere enough to cause global warming? Maybe their

answer will influence your vote?

that NZ agriculture produces 48.5 % of NZ’s greenhouse gas

make a complaint to the broadcasting standards authority, it

will probably not succeed but it is easy to do and may stop

them saying it again. If the statement is attributed to a group

or a report then it is fair for them to report it but if it is made by the broadcaster as a statement of fact then they should be in breach of the act if the complainant can prove there is some doubt about the truth of the statement. Pastural Farming Climate Research can help with that.

state theory as fact. If enough of us do this they will think twice before publishing more of these untruths. Write to Members of Parliament if any of them mention agriculture being subsidised by being kept out of an emission scheme swamp them with letters, ask them for some proof. If they have to reply to a thousand letters or 10,000 letters every time they hit on agriculture they might think twice about it.

Lastly I will say that I hear from farmers who are worried about this carbon taxation and they feel frustrated because it seems there is nothing we can do about it. My advice is that you need not feel frustrated because there are a lot of little things each of us can do, as I have just listed, and if enough of us do the little things great things can be achieved. Things that will at the least ensure whatever the future holds for livestock emissions it will be based on fairness and fact.

BA

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all you need to growwww.ballance.co.nz freephone 0800 222 090

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Jock Macmillan has conducted research wide ranging research on the reproductive performance of dairy cattle, mostly in New Zealand, but also in Australia and the USA. He defined the management differences between year-round calving patterns and seasonal ones; commercialised the development of tailpainting; and developed the CIDR insert, in particular its use for treating anoestrus. He was a Research Officer with the NZ Dairy Board from 1967 to 1977 before transferring to Ruakura, first with MAFFTech until 1988 and then with the DRC until 1997. He has been the Dairy Australia Professor at the University of Melbourne since 1997.

He was awarded the CP McMeekan Memorial Award (1983), the International Dairy Production Award by the American Dairy Science Association (1991), Fellow of the Royal Society of New Zealand (1995), Life Membership of the NZ Large Herds Association (1997), Honorary DSc by Massey University (2003) and Life Membership of the NZ Society of Animal Production (2004). He held a Fulbright-Hayes Research Fellowship at the University of Florida in 1987/88.

The ISI Web has classified him as ranking in the leading 1% of the World’s animal scientists for the last 10 years based on his record of scientific publications and the frequency with which they are cited by other scientists. He is the Editor-in-Chief of the international journal Animal Reproduction Science that is currently ranked second out of 45 research journals related to dairy, veterinary and animal sciences. By contrast, he also writes regularly for dairy industry publications and had his own column in the Dairy Exporter (Breeding Briefs) for 25 years. Thirty postgraduate students have conducted their research under his supervision.

PROFESSOR KL (JOCK) MACMILLAN, University of Melbourne

What do inflation and infertility have in common?

For are start, both have insidious effects on profitability. They

gradually erode net income by increasing costs directly or indirectly

and they need to be monitored and managed lest they get out of

control. The control has an “off” farm as well as an “on” farm

component in both cases.

The Reserve Bank is the major form of “off” farm control in the

case of inflation. Interest rates will increase with increasing inflation

risk. This is a blunt form of management as it has only indirect

effects on major inflation drivers like exchange rate. The “on”

farm component of inflation management involves careful cost

monitoring to ensure that every avenue of expenditure produces a

fair return. The effective incorporation of new technology can be

one way of increasing labour productivity. Herd health programs

can also reduce replacement costs by increasing longevity and

lifetime productivity.

The present economic crisis may have seen the effects of recent

inflation recede but infertility remains a continuing problem in

many herds. If herd owners in New Zealand consider that their

herds have an infertility problem, then spare a thought for their

contemporaries in many other countries. Most dairy industries now

recognize that to focus on forms of genetic improvement that are

associated with increases in yield usually comes at a price with

compromised cow health, reduced survival and lowered fertility.

These negative effects can be reduced by developing a selection

index that includes production traits as well as health, longevity

and fertility. But there is also an associated decrease in the rate of

genetic progress for yield.

The geneticists maintain that the rates of change in most of the

non-production characteristics can only be very gradual because of

their low rates on heritability. Fertility, for example, has a heritability

that is closer to zero than to 10% whereas milkyield is closer to

30%, and protein test is about 40%. That theoretical explanation

aside, there appears to have been a rapid decline in fertility over

the last 15 years that has exceeded the associated increases in

yield. This could be a genetic trend accelerated by the changes in

diet necessary to achieve ever-increasing peaks in milk yield during

early lactation.

The costs of infertility

“Infertility” also has “on” farm and “off” farm components. The

“on” farm aspects relate to effective breeding management as

described in the Incalf program. It is up to the herd owner and

INFLATION vs INFERTILITY

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SPEAKERS - SCIENCE

PROFESSOR JOCK MACMILLAN

staff to be diligent with heat detection, etc. It’s not the cow’s

responsibility. As with cost monitoring on a whole farm basis, so all

of the components of breeding management must be maintained

at the highest level. Good heat detection and correct insemination

practice need to be used with all cows, but they will not make

non-cyclers in poor body condition start cycling and conceive!

It is the “off” farm component of infertility that may not seem so

obvious. It is the “AB” provider that plays the role of the Reserve

Bank in minimizing any negative effects that may be linked to

reproductive performance. The introduction of negative recessive

genes can be reasonably well monitored and is best controlled

on a population basis. However, some negative recessive genes

can be unwittingly introduced and become widely disseminated

through AB systems where sires can produce large numbers of

doses of semen that can be distributed throughout many dairy

industries. It is possible that “Holstein-related” infertility is a case

in point.

Fertility and infertility are both difficult to measure. They must be

measured using large numbers of records to provide any form of

reliability. That is where herd owners are almost totally reliant on the

“AB” provider to act as the “off” farm monitor and regulator.

But it is that this point where the “AB” provider becomes

dependant on the herd owner customers to provide useful figures

to allow fertility effects and trends to be monitored. It is this vital

herd owner role that has not been adequately emphasized in

many dairy industries. The exception would be the Scandinavian

industries, especially the Norwegian industry. Even in 2009, “AB”

providers are still expected to produce reliable fertility figures for

individual sires when there is only indirect data available that is

based on daughter calving dates.

Reliable “on” farm data

This lack of reliable “on” farm data has a historical perspective in

most countries. In the case of New Zealand, it goes right back to

the days when induced calving was first introduced in the early

seventies. When Dr Bob Welch first conducted his trail-blazing

research, it was expected that about 5% of the cows would be

induced because they had conceived after the tenth to twelfth

week of the seasonal breeding program. This would be equivalent

to about 4 cows per herd as the average herd size at that time was

only 90 cows.

Induced calving was widely adopted quite quickly because it fitted

with the need to maintain seasonally concentrated calving patterns.

The problem was that no one thought to strongly recommend (if

not insist) that the identification number for each induced cow be

recorded and (preferably) fed into a central database.

It would have soon become apparent that induction numbers were

increasing faster than the size of the national herd. The reasons for

the greater rate of increase could have been linked to increasing

herd size or greater use of employed labour. It could even have

been linked to increasing levels of production.

Any changes in the national level of fertility were not recognized

because of the lack of data that could be used as evidence.

Crossbreeding and hybrid vigor

It was about this time that crossbreeding Jersey cows with Friesian

semen became the recommended trend. There would have been

obvious changes in reproductive performance associated with the

consequent hybrid vigor. This benefit may have been real, but

it was never measured. Instead, it covered up for an increasing

reliance on induced calving to maintain calving patterns. Once

again, herd owner records could have been used to monitor

trends. It mattered little whether any trends were associated with

increasing difficulties with breeding management in larger herds,

or with genetic trends. Some suggested that cows in larger herds

(of over 200 cows in those days) were under increasing stress as

reflected by the increasing number of heifers that had a short cycle

after their first insemination.

One of the genetic trends was in the increasing prevalence of

anoestrus (non-cycling) in cows that were back-crossed progeny

from crossbred cows inseminated with semen from Friesian sires.

This was before the days of CIDR-treatments. Instead, the lower

submission rates were “accommodated” by increasing the rate of

use of calving induction. This likely association has not been proven

with reliable figures; but, then no reliable figures were available

because induction details were not being routinely recorded and

submitted along with calving details.

A recent UK study reported that the interval from calving to first

ovulation (in Holstein cows) was quite highly inherited at about

30%. This result indicates that likely sire-related differences exist

amongst daughters of AB sires. It also is the reason why submission

rate data is now being included in the calculations of Fertility BW’s

for individual sires. But, having access to compete records for

induced calvings would have been a useful addition.

Treating non-cyclers

One of the main reasons for maintaining research to develop a

treatment for non-cycling cows right through the 1970’s and

1980’s was to allow herd owners to maintain high submission

rates by allowing successfully treated non-cyclers to be treated

and inseminated early in the AB program. New Zealand was a

World leader in this research, partly because anoestrus was (and

still is) of greater economic significance in seasonally calving herds

that in other calving systems. The development of the CIDR insert

was the first major breakthrough. The second was made by Scott

McDougal. His research showed that if the progesterone derived

from the use of a CIDR was combined with a single injection of

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SPEAKERS - SCIENCE

PROFESSOR JOCK MACMILLAN

oestradiol, then mimicking the hormonal changes of a normal

cycle was sufficient to get most of the non-cyclers to have a fertile

heat and be inseminated.

Treating non-cyclers early seemed an obvious way of allowing

more of them to conceive during the AB program rather that

having them conceive to bulls in the herd and then have to be

induced. The new treatments for non-cyclers were seen as

preferred options to induced calving as a way of maintaining a

seasonally concentrated calving. It also meant that younger first-

calving heifers could contribute to the replacement pool thereby

increasing genetic progress. We estimated that treating about

15% of the cows in a herd with the CIDR programs would allow

the calving induction rate to be reduced from the 10% to 12% as

it was in 1990 to less than 5%.

But, as with the introduction of induced calving back in the

1970’s, few records were kept on which cows were treated as non-

cyclers. Any trends in CIDR-use could only be monitored in a very

general way. The likelihood that some sires’ daughters were more

likely to non-cyclers could not to be measured accurately. This was

unfortunate as the use of the CIDR treatments meant that non-

cyclers were able to produce replacements that themselves were

more likely to be non-cyclers. Any opportunities to identify sire

effects and to use that information effectively were largely wasted.

Instead, CIDR usage rates steadily increased and calving induction

rates also started to increase again.

More “treatments”

The combination of the two forms of intervention to maintain

seasonally concentrated calvings meant that the underlying factors

contributing to this increased reliance could not be monitored and

measured. The impact of the “Holstein” effect on herd fertility may

have been recognized much sooner if daughters with increasing

proportions of Holstein genes were observed to have differing

rates of use for induction or non-cycling. All that would have been

required is that individual cow ID’s for induced cows and treated

non-cyclers would have been recorded and submitted to the

national database. Some cows would have been recorded in both

categories in the same year. Others would have been recorded for

the same treatment in consecutive years.

Maybe the need for such recording was not considered necessary

because it was commonly believed that New Zealand’s cows could

maintain their reputation for high fertility simply by culling the

empties. But that was not the case.

There is still some debate about the extent of the decline in the

reproductive performance of cows in New Zealand’s herds. The

increases in herd size have not made tasks like heat detection and

accurate cow identification any easier. But whether the decline

has been management driven or influenced by issues related to

genetics, the monitoring of reproductive performance is important

nationally as well as for individual herds owners.

Monitoring infertility

And this is where the analogy between inflation and infertility

has some relevance. The breeding management component is

clearly “on” farm whereas the “off” farm component can only

be achieved if reliable data is available to allow the monitoring to

occur. Insemination records are an excellent “first step”; but more

individual cow information related to calving induction (even if the

rates of use have declined) and to non-cycling treatment rates are

also required.

In an ideal World, accurate conception dates derived from

pregnancy testing can be very beneficial. For example, a recent

Victorian study was able to compare the effectiveness of the

recommended CIDR + oestradiol treatment involving cows in

herds in the Maffra district first in 1999/2000 and then again

in 2007/08. Most of the herds participated in both studies. The

post-treatment submission rates were similar in both trials; but the

conception rates to first insemination had declined from 40% to

25% in the intervening 8 years. Not surprisingly, the 6-week incalf

rate (confirmed by pregnancy testing) had also declined from 60%

to 41%. In other words, the effectiveness of the treatment had

declined even though the post-treatment submission rate had

not changed. Average milk yields had increased in 2007, more

concentrates were being fed and the herds had effectively become

pure Holstein. There may have been other reasons; but the decline

was sufficiently dramatic to make treatment cost-effectiveness in

many of those Maffra herds a very real issue irrespective of the

reasons for the decline.

It’s all very well to hope that genomics will sort out the good genes

from the bad genes for a whole range of production and non-

production characteristics. The sorting is best done when records

are available that allow the gene jockeys to identify which sires

are leaving daughters that either have the desired characteristic

or do not have the less desired characteristic. New Zealand herd

owners have a special responsibility in recognizing their role in the

recording of traits other than production, especially those related

to health and fertility.

This is because the New Zealand dairy industry is likely to have

a reliance on pasture-based systems for longer than any other

industry and for the foreseeable future. There will be a continueing

need to breed cows that have attributes that are particularly suited

to these systems. It is a case of helping the geneticists to help

the herd owner so that traits like fertility can be monitored and

effective action taken to make infertility different from inflation by

minimizing its impact on farm profitability.

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SPEAKERS - SCIENCE

The 2009 Ashburton Conference will be the first time that NZLHA delegates will have the opportunity to hear and see for themselves the results of exciting research being conducted by the next generation of scientists currently establishing their careers in the dairy industry. They will see and hear from eight finalists competing for the Young Dairy Scientists Communication Award.

The emphasis is on the word COMMUNICATION. Scientists are often criticised for not having their feet firmly on the ground and not communicating the results of their research to herd owners in a readily understandable and usable form. Well, this Award is doing more than addressing that comment. It is providing the finalist with a new “communication” experience. Each one of them must take the skills that relate to communicating scientific information within the scientific community and adapt them to deliver the same scientific message but to the end user. That end user will usually be a levy payer who likely funded the research that the young dairy scientists will describe.

Who are the first finalists for the Award?The rules for entry are quite simple: An entrant must be less than 40 years of age on the date of their presentation to the NZLHA Conference and have completed their most recent qualification within the last five years; or still be studying for a qualification. They can be employed by a research organisation, commercial company, university or government agency as long as they are resident in New Zealand at the time of entry.

The Ashburton Conference has attracted eight finalists representing DairyNZ, Agresearch, Massey University and Eltham Veterinary Services. The gender balance favours young woman, keeping with the trend that science and research careers are becoming increasingly attractive to women.

Each finalist submitted a conventionally written scientific abstract that allowed the scientific merit of the research to be evaluated. Once that was acknowledged, they were advised to start all over again and forget about using sophisticated technical jargon supported by statistical probabilities.

What will the finalists have to do?There are three “disciplines” that each finalist must complete. The first is to make a Powerpoint presentation of only 5 minutes at the post-afternoon tea session on the first day of the Conference, Tuesday March 31. The objective for this presentation is promoting delegate interest in the research that can be discussed in detail by visiting the presenter’s poster located in the main tea break area of the Conference. The presentation is followed by a single question that is asked by one of the two chairmen. This is a “rapid fire” session which requires the presenter to use all of the “power” of this type of presentation. They must project themselves to an audience made up of herd owners. It has been described as “sizzling science”.

The second discipline involves effective use of a poster to deliver a scientific message, usually on a one-to-one or small group basis. It requires the presenter to be a good listener and to answer enquirers’ questions.

The third discipline involves writing a short article that is suitable

for publishing in a mag such as the Dairy Exporter. This is a skill that most young scientists have not been required to develop. It is not part of normal scientific training. They must learn to choose an attention-grabbing title and follow it with a punchy first sentence that arouses the reader’s interest. In contrast to scientific writing, they must avoid writing a ponderous conclusion that may be “scientifically correct” but quite boring.

Who are the judges?There are three panels of official judges, each made up of 10 Conference delegates. One panel judges the Powerpoint presentation; one the posters; and one the mag article. The third panel that judges the mag article, also includes up to three professional agricultural journalists who will be asked to give each article “the third degree” as well as providing written feedback to each finalist.

Specifically designed score sheets have been drafted to be used by each panel. Copies of these score sheets appear at the end of this article. Feel free to appoint yourself as an additional judge. Completed score sheets can be left at the registration desk.

Please help make this innovative session a success for delegates and finalists by offering to be a judge, or by agreeing to be a judge if you are approached by one of the organiser’s.

The final ranking and places are obtained by averaging each finalist’s score for each discipline out of 20 and then adding up the three averages. Prizes are awarded for first, second and third. These will be announced and presented at the official Conference dinner on the Thursday evening.

Where did this “silly” idea come from?The NZLHA version of the Young Dairy Scientists Communication Award is based on a concept that has become a permanent part of the Australian Dairy Conference for the last four years. It originated from a Conference Planning Committee that was not particularly interested in having any more boring presentations of boring research from boring scientists (there are more of these in Australia than in New Zealand!!). That Planning Committee accepted a suggestion made by Jock Macmillan to focus the research session on young scientists who had fewer opportunities to present their research in an interactive way that older scientists may not be able to relate to.

The first session was so successful that it has now become a “must have” part of the Australian Dairy Conference. It has always received a “big tick” from delegates and finalists as there is no other presentation format quite like it. In this case, the Executive Committee of the NZLHA has agreed to support the Local Organising Committee to trial the Award presentations.

To that extent, Jock Macmillan was invited to be the inaugural organiser. He has recruited Dr Peter Hutton as the local representative. Peter was the winner of the first Communication Award in this format at the Australian Dairy Conference in Shepparton in 2005. He has recently been appointed as a lecturer in Dairy Science at Massey University. Peter will co-chair the Powerpoint session and is the local point-of-contact for the finalists.

YOUNG DAIRY SCIENTIST COMMUNICATION AWARD

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PETER HUTTON

Peter completed his undergraduate degree in Animal Science in 2003 followed by a PhD in 2008 at the University of Western Australia. The focus of his study has been on using bioactive plants to manipulate rumen fermentation. Specifically, he has concentrated on identifying plants that could prevent the rumen disorder that is known as lactic acidosis. This has taken him down the path of rumen microbiology and in vitro incubations. In 2008 he accepted the position of Lecturer in Dairy Production at Massey University and began work in September this year. Prior to the advent of grey hair Peter was a dairy farmer on my family property at Nowra in NSW. Peter sees the value that the Young Dairy Scientist Communication Award has for early career scientists and the industry because he was a contestant in the inaugural and highly successful Australian version of the contest in 2005.

DR. PETER HUTTON, Lecturer in Dairy Production

Aoraki Balloon Safaris, MethvenPhoto courtesy of Ashburton District Tourism

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SPEAKERS - SCIENCE

Jeremy is originally from Taranaki having lower order share-milked for three years after leaving school. In 2006, Jeremy completed his PhD at Massey University majoring in Animal Science which included farm simulation and exploring genotype by environment interactions in NZ dairy farming systems. His PhD supervisors were Dr Nicolas Lopez-Villalobos, Prof Colin Holmes (both Massey) and Dr Jennie Pryce (LIC). From 2006 to 2008, Jeremy worked as an agricultural systems modeller at AgResearch and he is now employed as a Farm Systems Specialist with Farmax. Jeremy lives in Palmerston North with his wife Michelle and a 1 year old son, Zachary.

DR. JEREMY BRYANT - Farm Systems Specialist, Farmax

“Reductions in milk payout mean it is more important than ever to

do your sums when choosing to winter cows off”, according to Dr

Jeremy Bryant of Farmax. Using the recently developed simulation

model, Farmax Dairy Pro, Bryant determined that at a payout of

$5.00/kg milksolids, farmers could only afford to pay about $22

per head per week for wintering off dry cows. This compares with

costs often in excess of $28/head/week charged by graziers last

winter. He also found that cows coming home from wintering off

with lower condition scores, or unexpected cow deaths, could

have a serious effect on farm profitability.

Grazing costs and milk prices

Using Farmax Dairy Pro, Bryant calculated at $6.00/kg MS, the

break-even cost of wintering off was about $31/head/week,

compared with $22/head/week at $5.00/kg milksolids. “So, as a

rough rule of thumb, you could afford to pay an extra $9/head/

week for every $1 increase in milksolids payout”, Bryant said.

These values were calculated for a 300 hectare irrigated property,

where cows were wintered off for six weeks, or wintered on using

a combination of kale and pasture silage as sources of feed.

Wintering on

Wintering cows on the property reduced milksolids yield by 12

kg/cow and 150 kg/hectare when compared to wintering off. He

found when wintering on, days in milk need to be reduced by

10 days and 25 fewer cows should be carried per 100 hectares.

These changes compensate for the area out of pasture to grow

the kale crop, which was just over 10% of the effective area. In a

more favourable area for winter pasture growth, it may be more

profitable to feed pasture or purchase supplements rather than

having a winter crop. He also commented that not reducing cow

numbers enough or drying off too late would negatively affect

average pasture cover, especially in late lactation and during the

dry period when the kale crop is out of pasture. Another important

consideration is that staff will have less chance to have a break

away from the farm if you choose to winter the herd on the

property.

Risk of wintering off

If cows return from grazing off at condition score of 4.5 as opposed

to the target of 5.0, the effects on per cow production and profit

are quite serious. “Milksolids production could be reduced by at

least 4 kg per cow, with profit reduced by around $80 per hectare

at milk prices of $5.00 per kg of milksolids, not to mention how

cow fertility and health is affected by having thinner animals”,

Bryant said. Unexpected deaths could erode any financial benefits

of wintering off. He recommends regularly monitoring cows

grazing off to ensure they are well fed and healthy, even if it

requires weekly visits.

Farmax Dairy Pro

During his PhD carried out under the supervision of Massey

University’s Dr Nicolas Lopez-Villalobos and Prof Colin Holmes,

and Dr Jennie Pryce (formerly LIC) he constructed a dairy cattle

simulation model called MOOSIM. Farmax then approached him

to include MOOSIM in a whole farm system model. The resulting

model, Farmax Dairy Pro, predicts total milksolids yields within 6

kg/cow of measured values based on four years of farmlet studies

carried out by DairyNZ and Massey University. “The model represents

the whole farm, from pasture growth to animal performance to

farm management and profitability”, Bryant said. For day-to-day

farm management, farmers could use the model to investigate

the immediate and carryover responses to supplements, once a

day milking or nitrogen use. At a strategic level, farmers could use

Farmax Dairy Pro to explore the profitability of a farm conversion,

or a drastic shift in the intensity of a production system.

Price and risk

The key message is that the price you can afford to pay for

wintering off drops considerably with a reduction in milksolids

payout. In addition, not meeting condition score targets or

excessive cow deaths while wintering off seriously influences

profitability so monitoring is vital. “Source and choose your winter

feeding options wisely”, Bryant said.

WINTER COWS ON OR OFF?

48

SPEAKERS - SCIENCE

I graduated from Massey with a vet degree in 2001 and started work at Eltham District Vet Services in Taranaki as a (mostly) dairy vet. I’ve been there ever since with my wife Kath and now have 2 kids (Sarah and Esther, 6 and 4 years old). I started into research by being involved at the frontline in various research projects managed by Scott McDougall (Morrinsville) starting in 2003 and continuing till today. In 2006 I started post grad studies part time through the EpiCentre at Massey to learn the skills and techniques needed to plan, manage, and analyse high quality research. Back in 2003 I started working on an idea for a trial looking at BVD, and that grew steadily until in 2006, and 2007 I was granted DairyNZ (then Dairy Insight) funding for the project, and in the last half of 2007 I started pulling back from full time dairy vet work to focus more on the research. I’m still employed full time at Eltham Vets but most of my time now is spent on various research projects, including the BVD research which has become a PhD (doctorate).

ANDREW WEIR - Eltham District Vet Services

Part of the cost of the highly infectious Bovine Viral Diarrhoea (BVD) virus in New Zealand dairy herds is $75.29 per infected cow according to a recent study.

This large cost is only part of the total cost but is enough on its own to justify taking action in many herds.

The study looked at the reproductive and disease costs of new infections in cows between the start of mating and autumn compared to the rest of the herd.

Infected cows conceived 6 days later ($36.72), were 7.5% less likely to conceive to AB ($4.50), had 2.9% lower pregnancy rate ($23.47), and had $10.60 more spent on them due to disease including discarded milk.

BVD is known to cause devastating abortion outbreaks in naïve herds when infection is introduced at the right time. It’s also known to cause persistent infection (PI) when infecting foetuses, and these PI calves and cows have all sorts of problems and costs during their lives (see pictures), but this study focused on the costs of infection in adult cows in herds where infection is already established.

The Opportunity

Several countries in Europe have successfully eradicated BVD where it is considered an important production limiting disease

with some welfare issues, and several more countries are in the process.

There are many tools available for control of BVD e.g. vaccination, test and removal. The issue is that they all cost money and we should be confident that the disease is costing more than prevention before attacking it too aggressively.

There has been some good work done both at herd-level and at the level of persistently infected (PI) cows, but we didn’t have good information about exactly what’s happening in infected herds in New Zealand.

Armed with the new information from this study along with other research, we may be able to recommend more wide-spread control or eradication of BVD – if the combined effects add up.

Infection rates

The 10 herds investigated had a wide range of numbers of cows previously infected (so now immune), and a wide range of number infected during the study.

PI cows are the usual source of infection and are very efficient at spreading the infection. In fact all but one of the herds in this study with a PI had more than 69% of susceptible cows infected.

In herds without a PI the rate of new infections was lower, but the total number of new infections was much higher because the number of initially immune cows was much lower.

Costs at herd level

In herds without a PI the cost of infections averaged over the whole herd is $6.77 per cow.

The average cost of BVD infection over the 6 months of the study averaged over all cows in all 10 herds was $3.39 per cow. This cost can be added to the other costs reported elsewhere such as the cost of PI cows, and PI calves resulting from infection during pregnancy which would be an additional $7.42 per cow in this

BVD COSTS YOU

49

trial. That’s $10.81 per cow total cost without accounting for

cows infected before the start of mating, or effects in subsequent

seasons from increased cell-count or later calving.

Infection was already well established in these herds, but with a

new introduction such as a PI bull into a herd with less immunity,

the $75 for each new infection would apply to many more of the

cows and could add up to $53,000 per 1,000 cows for example,

just for the cost of new infections.

Where to from here

This study was part of the author’s doctoral research into BVD at

Eltham District Vet Services, with Cord Heuer and Mark Stevenson

at the EpiCentre, Massey University, and Scott McDougall of the

Animal Health Centre, Morrinsville.

The next stage is to use this information and combine it with results

from other research to develop a complete economic analysis of

BVD under New Zealand conditions. This will demonstrate the

benefits of controlling BVD for various farm types and compare

that to the costs of different control options.

So over the next year or two we hope to have an answer to the

question of the cost effectiveness of control compared to ignoring

infection.

In the mean-time most experts agree that testing and vaccinating

bulls for BVD is essential. Talk to your vet about testing your bulk-

tank to find out your BVD status and take it from there.

Funding from DairyNZ, Dairy Cattle Vet association, Eltham

District Vet Services, and McKenzie Legacy Trust is gratefully

acknowledged. See www.controlbvd.org.nz, or your vet for more

information on BVD.

SPEAKERS - SCIENCE

ANDREW WEIR

Ulcers in the mouth of a very sick PI calf

Terrace Downs Rakaia GorgePhoto courtesy of Ashburton District Tourism

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SPEAKERS - SCIENCE

Jane Kay is a scientist in the Animals Research Team at DairyNZ, specialising in dairy cow physiology and energy metabolism. She completed a BPhEd and BSc at the University of Otago in 1994 before heading overseas to work and travel for four years. In 1999 she joined DairyNZ (formerly known as DRC and Dexcel) as a research technician in the Milk Composition Team and in 2002 completed a MSc at the University of Waikato. In 2003 Jane was awarded a FRST Top Achiever Doctoral Scholarship to undertake her PhD at the University of Arizona, Tucson, USA. In 2006, she graduated from Arizona with a PhD in Animal Sciences, focusing on dairy cow lipid metabolism and energy balance, and returned to DairyNZ as a scientist. Jane’s current research involves investigating the effects of nutrition, milking frequency, and lactation length, on milk production and energy metabolism, in an attempt to identify individual animals suited to specific production systems.

DR. JANE KAY - DairyNZ Scientist

Results from a recent DairyNZ trial provide dairy farmers with a guide on how to remain profitable during a severe feed deficit.

In 2008 alone, New Zealand dairy farmers battled drought, floods, hail storms, and heavy snow, and the prediction is that extreme weather events will be more prevalent in the future. To survive during these harsh times, farmers need to make informed management decisions about supplementary feeding to maintain production, reproduction, and most importantly profitability.

Losses in milk production during severe feed restrictions occur both during the feed restriction and in the weeks after. Depending on the timing of the feed restriction, farmers must also consider the effects on reproduction.

There is little information on the long term effect of severe feed restrictions so in 2007/08, scientists at DairyNZ, with funding from NZ dairy farmers, measured the effects of a severe two-week feed restriction during mid-spring. The trial was designed to mimic an adverse weather event (e.g. flood, snowfall) that would temporarily, but severely, reduce feed supply.

Trial Findings

320 cows were divided into 2 herds. Pasture was restricted by 47% for two weeks in the restricted herd (Table 1).

Table 1: Daily Pasture Intakes

Results demonstrated that daily milksolids (MS) yield was reduced by 32% during the two-week feed deficit, and MS production did not return to that of the control herd until 13 weeks post-restriction (mid-January; Graph 1). In total, the two-week restriction reduced MS production by 18.6 kg MS/cow.

Graph 1: Effect of a severe feed deficit on milksolids production. The feed restriction period is highlighted by the grey bar.

In addition to the reduced MS production, the 6-week in-calf rate was reduced by 6% in the restricted herd, and the final empty rate was 2% greater. This is the worst possible scenario for reproduction, as the restriction occurred right at the beginning of mating.

What was the total cost of the restriction?

Many farmers will have heard the well known Irish dairy farmer and businessman Michael Murphy say “production is vanity, profit is sanity”, therefore management must consider not just the loss in MS production, but the total loss in revenue along with the total cost of plugging the feed gap.

In a scenario with a milk price of $5.50/kg MS, income lost from:a) reduced milksolids was $96.00/cowb) reduced reproductive performance was $44.00/cow

(DairyNZ InCalf calculator)

DAILY PASTURE INTAKES (DM/COW/DAY)

HERDS Post-calving Oct 10th to Oct 24th Oct 25th to Jan 21st

Control 15 kg 15 kg 15 kg

Restricted 15 kg 8 kg 15 kg

THE REAL COST OF A FEED DEFICIT

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Therefore, the total cost of the feed restriction was $140/cow.

Although it would be easy to assume that one could spend $140

on feed/cow (or $10/day) to plug this gap, this is not the case.

When you supplement grazing cows, they reduce pasture intake, a

phenomenon known as substitution. In this trial during spring, the

substitution rate for the restricted cows would be approximately

40%.

What would be the response to supplements?

Trial results imply that cows will produce 15 g MS for every

extra megajoule (MJ) of metabolisable energy (ME) eaten. Thus,

if farmers fed their cows 5.5 kg palm kernel (11 MJ ME/kg DM)

for the two weeks of the feed deficit (taking into consideration

substitution rate) they would expect an increase of 6.5 kg MS/cow

or $35.75/cow, and could calculate if this benefit outweighed the

total cost of feed (feed, wastage, labour, machinery depreciation,

etc).

If the restriction occurs early in the mating period, there is an added

incentive to supplement cows. Based on the above scenario, 2%

more cows will get in calf to AI and the final empty rate will be

reduced by 1%. Combining the increased milk production with

the improved reproduction, this would equate to approximately

$50/cow.

Conclusions

The milk production response to supplementary feed during a

two-week severe feed deficit is 15g MS/MJ ME eaten. Armed with

this information, but remembering to account for substitution rate

and supplement quality, farmers can make informed decisions on

the likely benefit of feeding supplements, and the amount they

can spend on supplementary feed.

At a $5.50 milk price, offering 5 kg DM of a medium quality

supplement (ME = 11 MJ/kg DM) to cows eating only 8 kg pasture

DM/day for two weeks would increase MS production and improve

reproduction to the tune of $50/cow.

With the continued decline in world dairy commodity prices, and

increasing adverse weather events, information such as this is

extremely valuable in determining where money can be spared

or earned.

This trial was funded by NZ Dairy Farmers through DairyNZ Inc.

SPEAKERS - SCIENCE

DR JANE KAY

Dairy cows struggle to find pasture as it disappears under water.

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SPEAKERS - SCIENCE

Mairi completed her BSc and MSc at Waikato University. The aim of her MSc was to investigate the effects of air transport on horses, which she completed in 2000. Since then she has worked for AgResearch at Ruakura in Hamilton and the last four years she has been undertaking a PhD in Animal Science through Massey University, which she graduated from in October last year. Since working at AgResearch her research has been mainly dairy focussed and her PhD research has been specifically aimed at developing non-invasive techniques to measure stress and pain in dairy cattle. Recently she was awarded a Kudos Emerging Scientist Award for this work

DR. MAIRI STEWART, AgResearch, Ruakura

ANIMAL WELFARE: An Inconveient Truth or Market Opportunity?

Like global warming is to Al Gore, animal welfare may be ‘an

inconvenient truth’ for farmers. But this inconvenience is not

going away. Increasing consumer concern is placing pressure on

our industries to provide ‘welfare friendly’ products. Scientist, Dr

Mairi Stewart based at AgResearch’s Ruakura campus in Hamilton

says to demonstrate an acceptable level of animal welfare and

protect our markets, new technologies and tools to evaluate the

welfare impact of husbandry practices used on New Zealand farms

are necessary.

“Consumers need reassurance that routine procedures like

disbudding and castration are being carried out humanely. Some

retailers in our overseas markets already have welfare labeling

systems in place to enable the consumer to make choices based on

welfare standards.” However, she says, - for welfare assessments

to be effective, they must be scientifically-based and must relate to

our farming systems. The problem, says Dr Stewart, is that many

of the techniques used to assess welfare are expensive and require

invasive procedures, like blood sampling. That in itself can stress

the animal and lead to uncertainty in interpreting results.

Dr Stewart has been developing a non-invasive technique for

measuring stress and pain in cattle. She uses a hand-held infrared

camera, which measures radiated heat. “Its totally non-invasive.

You don’t have to have contact with the animal to collect the

images,” she explains.

She says the technology has been used in medicine, engineering

and military applications and recently the US Department of

Defense has investigated it as a lie detection tool. “They found

that changes in eye temperature picked up by the camera are a

more accurate measure of lying than the traditional polygraph.”

Dr Stewart’s research is the first of its kind to use this technique

to detect and diagnose pain in cattle. Similar to the ‘lying’ model,

Dr Stewart found that during pain the camera can very sensitively

pick up changes in eye temperature due to changes in blood flow.

“When we combined these changes in eye temperature with

various cardiac responses, also measured non-invasively, we were

able to detect different responses depending on the type of pain.

For example, a rapid drop in eye temperature occurred immediately

after disbudding due to the blood flow being redirected away

from the extremities to more vital organs and muscles required

during the ‘fight or flight’ reaction. In contrast, deeper visceral

pain from castration caused the opposite effect on cardiac activity

and increased eye temperature.”

This novel method offers advantages over traditional indicators of

stress and pain. “Not only do we now have the ability to non-

invasively collect continuous measurements with little disruption

to the animal, but we have the potential to replace more invasive

and costly procedures,” Dr Stewart says.

Dr Stewart’s research also set out to make recommendations

regarding the use of painkillers. For example, when a local

anesthetic is used before disbudding, the drop in eye temperature

and immediate pain responses are eliminated. However, when

the ‘local’ starts to wear off, eye temperature drops and cardiac

activity increases due to the onset of pain at this time. “Just like

when you’re at the the dentist and the pain starts to kick in when

the drugs start to wear off,” she says.

To prevent the pain when local wears off a non-steroidal anti-

inflammatory drug is necessary. In the hours after the procedure,

it’s the inflammation that causes the ongoing pain. A ‘non-

steroidal’ can last for 24 hours, at which time the majority of the

inflammation has subsided. “We found that the combination of

both drugs is the most effective way to alleviate pain during these

procedures.”

“I know the pressures that farmers are under, especially in the

current economic climate, and although most farmers want the

best for their animals, implementing some of these ‘best practice’

procedures on farm comes down to cost and practicalities. But

the New Zealand dairy industry is developing their own set of best

practice guidelines for animal welfare because they need to protect

their markets. I think, rather than an inconvenience, there could be

major benefits for farmers in the future. There are opportunities

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SPEAKERS - SCIENCE

to capitalise on ‘welfare friendly’ shoppers and collect premium

prices for products. New Zealand is in a prime position, due to our

pasture-based systems, to develop unique niche markets. We need

to be one step ahead of the game.”

Dr Stewart’s research was done as part of her PhD in animal

science, which she recently obtained from Massey University. It

also earned her the Emerging Scientist Award in the Kudos Science

Excellence Awards in Hamilton late last year. The research was

done in collaboration with Professor Kevin Stafford from Massey

University, AgResearch’s Dr Jim Webster and Dr Allan Schaefer

from Agriculture and Agri-Food Canada and was funded by the

New Zealand Foundation for Research, Science and Technology.

DR MAIRI STEWART

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SPEAKERS - SCIENCE

Mairi completed her BSc and MSc at Waikato University. The aim of her MSc was to investigate the effects of air transport on horses, which she completed in 2000. Since then she has worked for AgResearch at Ruakura in Hamilton and the last four years she has been undertaking a PhD in Animal Science through Massey University, which she graduated from in October last year. Since working at AgResearch her research has been mainly dairy focussed and her PhD research has been specifically aimed at developing non-invasive techniques to measure stress and pain in dairy cattle. Recently she was awarded a Kudos Emerging Scientist Award for this work

DR. KIRSTY McLEOD, Research Technician, DairyNZ

EIGHT HOUR GRAZING

Grazing cows for eight hours a day, reduces urinations on pasture

by 41%.

This has important implications for dairying in environmentally

sensitive areas.

With increasing environmental regulations, practical grazing

solutions are required to help farmers reduce the environmental

impact of dairy farming.

A trial at DairyNZ’s Scott Farm in spring 2008, restricted the daily

grazing access of aHolstein Friesian cows (35 DIM) to either:

The 2x4 and 1x8 hour cows were stood off on a bark standoff pad

when not on pasture or at the dairy. All cows were offered 33 kg

DM/cow/day pasture measured to ground level.

After a two week adaptation period, pre- and post-grazing

residuals were measured to monitor pasture intakes. Cows were

fitted with urine sensors and GPS collars to determine frequency

and location of urinations. The objective of the trial was to reduce

the number of urinations on pasture to minimise nitrogen losses.

This trial was funded by New Zealand dairy farmers through

DairyNZ’s industry good levy and the Ministry of Agriculture and

Forestry Sustainable Farming Fund (SFF).

Reduced urinations on pasture

When spring pastures were grazed for eight hours a day, the

percentage of urinations on pasture dropped from 82% to 45%.

Urine spots have high concentrations of nitrogen, which can be

lost by nitrate leaching and nitrous oxide (N2O) emissions, especially

during wet spring conditions.

Restricting grazing access to eight hours and standing cows off on

a bark pad enabled three times more urinations to be collected in

a sump. The even application of these urinations back to pasture

in drier conditions will reduce the risk of nitrogen losses. This could

provide potential economic gains by reducing artificial fertiliser

requirements. DairyNZ currently values dairy shed effluent from

100 cows at $1200 - $1500 per annum.

Two four-hour grazing periods

Cows with eight hours grazing access were able to maintain their

pasture intakes (13 kg DM/cow/day), provided the eight hours

was offered as two four-hour periods. After two weeks cows had

changed their grazing behaviour. They grazed for longer on pasture,

using their time on the standoff pad to rest and ruminate.

Cows that were restricted to two four-hour grazing periods in

early lactation produced 1.59 kg MS/cow/day. This was 0.18 kg

MS/cow/day less than the cows with unrestricted grazing, despite

similar pasture intakes. Restricting grazing access had no effect on

milk fat or protein concentration.

The reduction in milksolid production is partially due to the extra

1.4 km walked by the cows each day to use the standoff pad. If the

standoff pad was located closer to the dairy, the energy required

for walking could be reduced, minimising loss of production and

labour input.

One eight-hour grazing period

Allocating cows two grazing periods in early lactation requires

additional labour input. Offering cows one eight-hour day grazing

period between milkings each day and standing them off at night

would reduce this additional labour requirement.

However, cows offered only one eight-hour grazing period were

only able to eat 11 kg DM/cow/day. The cows simply could not eat

13 kg DM/cow from pasture in eight hours, because of their need

to rest and ruminate during that period. As a result these cows

EIGHT HOUR GRAZING

• Reduces urinations on pasture by 41%

• Reduces milk production

• Supplementation may overcome production and labour issues.

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SPEAKERS - SCIENCE

KIRSTY McLEOD

only produced 1.55 kg MS/cow/day, despite walking 1 km/day less then the cows with unrestricted grazing.

Restricting unsupplemented cows to just one eight-hour grazing period to reduce the number of urinations on pasture was not considered a viable option. We need to explore whether reducing pasture allowances and feeding supplements can improve the viability of this grazing strategy.

Animal welfare

The cows using the standoff pad did not show any increase in lameness. Maintenance of the bark pad and the provision of adequate cow area also ensured that there was no increase in somatic cell count for the cows using the standoff pad.

Future challenges

Currently the viability of restricting grazing access to eight hours to reduce urinations on pasture is limited by production and labour issues. We need to assess whether these issues can be overcome by feeding supplements. The economic impact of restricted grazing access also needs to be investigated.

In the future, restricting grazing access could be a viable option used to minimise the environmental impact of pastoral dairy farming.

Cow fitted with a urine sensor, used to detect when urinations occur. GPS collars were used to identify the

location of these urinations.

View from Mt HuttPhoto courtesy of Ashburton District Tourism

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SPEAKERS - SCIENCE

I am a Massey-trained veterinarian and worked in dairy practice in Taranaki for 8 years before returning to Massey in 2002 where my job involves providing veterinary services to local farmers and teaching veterinary students (both lectures and practical training). I am passionate about encouraging veterinary students to go into dairy practice and run the Bovine Appreciation Group at Massey to provide extra lectures and farm walks for students about cattle medicine. I am in the process of writing up my PhD on aspects of the control and diagnosis of Neospora caninum in cattle and am also involved in the BVD steering committee raising awareness among vets and farmers about this disease. I have been on the committee of the Society of Dairy Cattle Veterinarians for the past 11 years and am involved in organising conferences for dairy cattle vets. My other interests include breeding Scottish Highland cattle, Arab horses and endurance riding.

DR. JENNY WESTON, Dairy Systems

NEOSPORA INFECTION A TICKING TIME-BOMBFarmers can lessen their risk of abortion losses in heifers by blood testing young calves and culling those that are born infected with Neospora caninum. Recent Massey research has shown that infected heifers are up to 24 times more likely to abort, so not rearing these animals and selecting other calves to raise will reduce the level of abortion in the herd. Another option is to identify infected cows and not keep replacements from them.

Neospora caninum is the most commonly diagnosed cause of abortion in cattle in New Zealand and in many countries around the world. In 1998 it was estimated to cost New Zealand dairy farmers at least $24 million annually.

Massey University senior vet lecturer and PhD student Jenny Weston said the parasite can infect dogs, cattle and other grazing animals but abortion is mainly seen in cattle.

“Cows become infected after eating feed or water contaminated with faeces from an infected dog and infection is commonly passed from cow to calf during the pregnancy. Most infected cows in New Zealand are due to their mother passing on the infection rather than from contact with infected dog faeces. “

Ms Weston said Neospora can cause extremely damaging “abortion storms”, where up to 35% of a herd abort over a short time.

“We think this occurs when a previously uninfected herd comes in contact with infection – probably from a dog. Once this settles down, affected herds then go on to have a lower level of abortion - 3-10% - over many years due to the ongoing effects of having infected cows in the herd.”

Infected cows produce antibodies that control the infection and these can be measured in the blood for some months. Antibodies provide some protection against future infection but the parasite is never fully eliminated from the cow and “hibernates” in tissue cysts in the brain and spine.

“During times of stress and when the immune system is suppressed (as it must be to allow a pregnancy to continue) the parasite

reactivates and spreads via the cow’s circulation to the foetus. Depending on the stage of development of the foetus and the strength of the cow’s immune response this may cause the death of the foetus or the foetus may survive the infection but be born infected and carrying the parasite with antibodies in their blood.”

In a trial supported by Dairy Insight funding, the replacement heifers on a 700 cow dairy farm in the central North Island were followed through their first pregnancy to identify abortion and measure Neospora infection status.

The farm had experienced a Neospora abortion storm seven years earlier and was continuing to have low level losses associated with Neospora.

“As part of previous work, Massey University veterinarians had been collecting blood from all cattle on the farm, about 1000 animals in total, every 3 months since the outbreak began. From this information we knew which animals were infected and had observed that most infected cows gave birth to infected calves,” Ms Weston said.

“The heifers were scanned monthly using ultrasound and had blood collected to measure antibodies against Neospora. All except one of the 165 rising two year-old heifers became pregnant. Eighteen heifers were consistently antibody positive from their first blood sample at three months old and were considered to have been born infected and 11 of these 18 heifers aborted (61%). “

Four of 146 non-infected heifers also aborted (3%). Most of the Neospora-infected heifers aborted during the fourth and fifth months of pregnancy and only one abortion was observed by the farmer – a set of twins from a non-infected heifer at 7 months gestation.

Ms Weston said that Neospora infected cows are far more likely to abort than non-infected cows in any pregnancy.

“So the number of infected cows in a herd would decrease over time from culling aborted cows if it weren’t for the constant

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SPEAKERS - SCIENCE

JENNY WESTON

addition of infected heifers. An infected cow will abort or produce

an infected calf in almost every pregnancy. Blood sampling the

whole herd to identify and cull all infected cows isn’t feasible as

antibody levels may drop below detectable levels in many cows.

“Calves that are born infected however seem to have high and

persistent antibody levels and can easily be identified by blood

testing. Not keeping infected heifer replacement calves means

that you will more quickly remove infected animals from your herd

and lower your abortion rate. The mothers of these infected calves

would also most likely be infected so not breeding replacements

from them in future would also minimise losses.“

The trial was part of Ms Weston’s PhD, focusing on the spread,

diagnosis and control of Neospora caninum infection in dairy

cattle in New Zealand.

Rakaia GorgePhoto courtesy of Ashburton District Tourism

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SPEAKERS - SCIENCE

Ing.Agr., Esp.P.A., M.Sc., Ph.D., P.A.S., C.G.P

It was my interest in models, grazing and pastoral systems that led me to New Zealand, where I accepted my present position with the Modelling Team of the Farm Systems group at DairyNZ Ltd. in May 2008. I was involved in animal agriculture research even before receiving my BS Agronomy in 1998. In 1997, I was research assistant on “Alternative grazing models” at Nat. Inst. of Agricultural Technology (Argentina). During 1997/98, I joined the “Range management group” of the Nat. Univ. of La Plata (UNLP, Argentina). Throughout 1999-2001, I accomplished two graduate programs: Specialist (2000) and MS (2001) in Nutrition and Physiology of Ruminants at the Nat. Univ. of Mar del Plata (Argentina). In 2001, I joined the Animal Prod. Faculty from UNLP, and the “Foraging Management of Dairy Cows in South America” project at the Univ. of the Republic (Uruguay). The following years, I worked as guest researcher at the Wageningen Inst. of Animal Sci. (The Netherlands). There, I focused on dairy nutrition and grazing management. After this, I went to the University of Arkansas, USA, where I completed a PhD in two and a half years, focusing on applied grazing behaviour and management. Then, I help a post-doctoral position at the USDA-ARS, Pasture Systems Research Unit (USA), where I concentrated on nutritional ecology of foraging. It was during this time in USA that I received two distinguishing American certifications, Professional Animal Scientist, and Grassland Professional. In my short career, I was awarded for my academic merit in Europe, South and North America, as well as inducted into the Gamma-Sigma-Delta Honor Society of Agriculture (2005). My research allowed me to experience agriculture around the world, but coming to New Zealand, “The Graziers Paradise”, was my ultimate goal.

DR. PABLO GREGORINI, Scientist, DairyNZ Ltd, Hamilton, NZ

4 HOURS OF GRAZING COULD BE ENOUGH – IF YOU TIME IT RIGHT!Cows eat most of the daily pasture allowance during the first meal, so the eating strategies they perform during that meal determine daily pasture intake. These strategies depend on how motivated they are to eat, which in fact relates to hunger. Through restriction of time available to graze, we can “set” cows’ hunger at the time they start grazing. This gives us a tool to manage the complexity of cows’ eating process in a feeding environment like pasture, which constantly changes in time.

The experiment

To gain a better understanding of cow’s eating strategies in response to restrictions of available grazing time, we investigated the intake and grazing behaviour of dairy cows during the first meal and the changes in circulating concentrations of hunger-related hormones (ghrelin) and metabolites (non-esterified fatty acids, NEFA) at the time they started grazing. To do so, we grazed cows according to the treatments (1x8, 8 hours of available grazing time between milkings; 2x4, 4 hours of available grazing time after each milking and CTL, 24 hours of available grazing time excluding milking time) as presented in Figure 1. Each cow was blood sampled immediately prior to the first meal of the day and grazing behaviour and pasture intake were determined during the first three and a half hours of grazing.

What we found

Based on the observational trial daily pasture intake was relatively similar between treatments (13.3 kg DM) on the days observed; however, during the first three and a half hours of grazing, cows in 1x8 had the greatest pasture intake (86% of the daily pasture intake) compared to cows in 2x4 (70% of the daily pasture intake) and CTL (71% of the daily pasture intake). The way cows allocated times for eating, searching, ruminating and idling during the first

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SPEAKERS - SCIENCE

DR PABLO GREGORINI

three and a half hours of grazing is shown in Figure 2. Bite mass declined from the beginning to the end of this period, but cows in 1x8 maintained the greatest bite mass for the longest time at the most steady bite rate (number of bites per minute). Pasture intake

rate during the first three and a half hours of grazing differed between treatments and determined pasture disappearance dynamics from the paddock, shown in Figure 3.

The concentrations of ghrelin and NEFA were the greatest for cows in 1x8. These data imply that cows in 1x8 were hungrier at the time the new pasture was allocated and they started grazing, which motivated them to eat for a longer period of time with a greater intake rate. They increased bite mass and reduced searching time.

Through this work, we confirmed that the first meal of the day determines daily pasture intake. Moreover, we showed that, at generous herbage allowances, restriction of available grazing time may not affect daily pasture intake. Another interesting point emerging from this study is that the most important factor is not the total amount of hours of grazing restriction, but how it is

allocated. Timing of restriction “sets” cows to a different eating motivation at the time grazing begins. Also, it was identified how the magnitude of pasture intake depends on, and changes when time is considered. Certainly, this is modulated by hunger related metabolites and hormones, which give us a better understanding of the grazing process.

What this means for the farmer

These types of scientific studies allow a fine-tuning of daily grazing management. Pasture quality changes in time. For instance, from dawn to dusk, pasture loses moisture and accumulates sugars, which dilutes fibre and protein concentrations (Figure 4). As a

result, pasture has the highest nutritive value at dusk. We suggest that strategically timed pasture allocations could help farmers to better utilise and control nutrients supplied by pasture. These condensed grazing sessions also reduce pasture/plants damage as cows spend less time in the paddock resulting in less damage and faster recovery. Short and intensive grazing sessions will lead to more even pasture re-growth. This encourages cows to be less selective when grazing.

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About USDEC

- A membership organization, formed in 1995, on the premise of pulling together all sides of the industry to do what was needed to boost the volume and value of U.S. dairy exports.

- About 88 members: processors, traders, allied (suppliers), farmers. Represents the vast majority of US export activity.

- Supported by farmer promotion assessments, government funds and membership dues.

- Functions: Marketing, Market Access, Trade Policy, Communications, Research.

TOM CAMERLO, Chairman of USDEC

About the U.S. dairy industry

- The largest in the world (cow’s milk):

- 9.2 million cows

- 86.0 million MT of milk, about 6 x the size of NZ

- 4.5 million MT of cheese; 735,000 MT of butter, 850,000 MT of NDM/SMP; 700,000 MT of whey proteins

- A big difference (between US and NZ): we produce only negligible amounts of WMP. Government support price prevents manufacturers from investing in WMP and -- so far –alternative proteins production.

- Considerable consolidation throughout the years, but still would be considered fragmented relative to NZ, which is dominated by a single co-op. You mostly hear about DFA, which markets almost 20% of the U.S. milk supply. Other large co-ops include CDI, LOL, Darigold. 16 co-ops that market more than 1 million MT of milk annually.

- U.S. has some of the largest dairy processing companies in the world, including Dean, Kraft, Schreiber, General Mills, Leprino, Nestle, Good Humor.

- Much foreign investment at processing level .

- At farm level – average herd sizes getting larger. West and Southwest are the fastest growing regions. Growth fi nally stalling in California.

- Still have a government support program, which historically has served as an outlet for surplus production. Government purchase program at designated price fl oors. From mid-2004-late 2008, we didn’t use that program; strong export markets took a rising percentage of our growing production; exports enabled us to grow. But since third quarter 2008, we’ve been selling SMP (and some butter) to the government and now all our prices are hovering at or just above this support level.

- From 95-04, we exported about 5% of our production (total solids basis). From 05-08, we exported about 10% of our production. When export demand suffered with current economy, it left us with a huge excess to manage.

What we export (Jan-Nov 2008)

- NDM/SMP [371,116 MT], whey proteins [335,409 MT], cheese [122,533 MT], butterfat [87,428 MT], lactose [171,596 MT], blends [71,005 MT]

- Also, small volumes of perishable products [fl uid milk – 46.5 million liters]

Where we export (Jan-Nov 2008, U.S. dollars)

- Primarily: Mexico [$874 million], SE Asia [$710 million], Canada [$447 million], Japan [$195 million], China [$184 million]

- Also: Middle East/North Africa [$443 million], Caribbean [$140 million], South Korea [$96 million].

Key issues:

- Impact of new administration

- US-NZ FTA?

- Sustainability

- How to manage our surplus and bring the market back into alignment

- How to deal with price volatility

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SPEAKERS - INDUSTRY LEADERS

Andrew Ferrier has been Chief Executive Officer of Fonterra Co-operative Group since September 2003, bringing with him a background of generating stronger performances from companies in both the consumer products sector and the commodities market. He has more than 22 years of experience at the senior executive level, with 14 years as a Chief Executive in operating and holding companies. In his career he has dealt continuously with free trade environments and heavily regulated environments, experience now being applied at Fonterra.

Andrew is founding Chairman of Global Dairy Platform, an international organisation whose mission is to provide insight and guidance in the promotion of the healthy consumption of dairy.

Andrew has a Bachelor of Business Administration from the University of New Brunswick and a Master of Business Administration from Concordia University, both in Canada.

ANDREW FERRIER, Chief Executive Officer, Fonterra

Upper Lake HeronPhoto courtesy of Ashburton District Tourism

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Andrew graduated from Lincoln University in 1981 and has been a farm management consultant since graduation.

He has a background of business, financial, technical advice and practical application across all farming sectors.

He started farming in 1989 and is now involved in four dairy equity partnerships.

His experience in the area of water use and environmentally sound farm management systems saw his home property awarded the Ballance Farm Environment Award 2003, and 2nd in the 2007 Lincoln Foundation Farm of the year award.

Andrew is currently New Zealand President the New Zealand Institute of Primary Industry Management, responsible for New Zealand’s rural professionals. He has a particular interest in building depth in the numbers and quality of young professionals entering the rural sector.

In February and April of 2008, he participated in the UK Institute of Agriculture leadership course. He was the 1st non British person to be awarded a place on the course.

He also has an interest in the meat industry, and is a director of ANZCO Foods Ltd.

ANDREW MacFARLANE, Farm Consultant

Water can be valued according to its ‘quality’.

That quality can be expressed in its ability to generate outputs:

The market pays for quality.In the form of service: - when we want it - where we want it - how we want it

The market pays for real or perceived value.

That value is determined by the image portrayed to consumers:

muddy creek? What image is portrayed by cows chewing their cud while sitting under a nice tree on a sunny day?

portrayed by healthy bouncing babies?

image is portrayed by a nicely landscaped milk collection centre?

As farmers, what do we NEED from our water resource:

supply (typically in the Southern Alps)

system to which it is applies.

are driven from the cost of capital, cost of extraction, water use efficiency, and maintenance costs, (which are minor).

All of these factors create predictability of output, and lower production costs per unit of output.

As farmers, what do we need to GIVE?

used, or the soil to which it is applied.

fellow citizens, tourists, TV watchers, Google viewers!)

As farmers, what do we CREATE?

Are we creating a basic stomach filler that consumers pay as little as possible for?

Or are we creating a product around which our marketers can create a story on which to build value?

We, as farmers, tend to be very critical of our marketers, often with justification. Are we doing our bit to build the image?

New Zealand has a culture of selling “more for less”. We need to sell “less for more”. To do so requires us to:

IT’S NOT “JUST WATER”

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SPEAKERS - LOCAL WATER ISSUES

In that way, we not only leverage our “natural capital”, we

reinforce the integrity of our production.

In other words, we must walk the walk, not just talk the talk!

These issues are critical to our future prosperity as dairy farmers.

They are just as critical to the community, where wealth is also

created.

As an example, consider the National Business Review monthly

search for exciting companies. In April 2008, they focused on

agriculture.

The ten companies named all supply services or product to process

dairy product, or sell product from dairy farms. Five of those

companies are substantially based in Canterbury, and would not

exist on any degree of scale without irrigation in that area.

Top 10 Agriculture

Rank CompanyExcitement

Index

1 Synlait 68.4

2 Fuel Storage Systems 67.0

3 Carter Holt Harvey 64.5

4 NZ Farming Systems Uruguay 59.1

5 Fonterra 58.3

6 Anzco Group 56.0

7 MilkHub 55.0

8 Macfarlane Rural Business 54.5

9 Reporoa Engineering 53.5

10 Pfizer Animal Health 53.0

(The National Business Review April 24 2008)

In addition to that list, Ashburton District has other growth

companies deserving of mention

RX Plastics

Designline Engineering

Rainer irrigation

Midland Seeds

South Pacific Seeds

Agricom

Talleys

Water has been the common factor in these companies having

a base from which to build a business. The farmers they work

with, and the people they employ, make servicing companies like

Drummond & Etheridge (John Deere), Gluyas Ford, and Winslow

Ltd, strong.

Retailers like Mitre 10 Mega, Retravision, Farmers, Todds, Paper

Plus increase in strength, and indeed, win awards from their

peers.

Social services are in strong heart. Ashburton has a hospital with

three surgeons, good GP’s, top schools and a low crime rate.

Recreational facilities are abundant . . . . Lake Hood, Mt Hutt, all

weather tennis courts and hockey turf, and a new Trust Event

Centre.

Our citizens have a high income in a low cost, safe, pleasant

climate.

Remember though, that those same citizens have invested heavily

to build that infrastructure.

That investment far exceeds reinvested profits. They have

borrowed heavily. . . . to the extent that the average mortgage

is around $1.5M per farm. The top 50%, those who have been

the reinvestors, owe $2.7M per farm . . . and it will increase this

year!

There is nothing wrong with debt – it keeps us sharp, focused,

innovative!

It also increases our risk profile –

Lower interest rates are great news

Lower commodity prices will prove difficult

Farm equity is more volatile

We are dependent on bankers ability and willingness to lend

They had confidence to lend last year. We need to retain that

confidence.

Government has a role in maintaining that confidence, reducing our

costs, and smoothing the path for infrastructure development.

We have the next project ready to roll:

Barhill Chertsey Irrigation will need a community working

together, guts from those prepared to borrow, confidence from

those prepared to lend, and support from a government willing to

facilitate growth and investment.

ANDREW MacFARLANE

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SPEAKERS - LOCAL WATER ISSUES

IAN McKENZIE, Chairman Ashburton Community Water Trust

Ian Mackenzie....Chairman Ashburton Community Water Trust...Trust set up by the Ashburton District Council to encourage and facilitate water development in this district for the benefit of the Ashburton Community. The Trust has commisioned and funded several research projects to quantify the water resource,[ both ground water and run of river water], and how the demand for water can be satisfied whilst protecting those environmental parameters considered important by the community. Working with this information we have supported BCI and developed and applied for consents for a stage 2 for BCI: the Rakaia Terrace Project. [In cooperation with Central Plains].

Other involvement includes Chairman Eiffelton Irrigation Scheme, Chairman Mid Canterbury Farmers Charitable Trust, Director A.T.S., board member Irrigation NZ, Nuffield Scholar and a history of various positions within Federated Farmers. Farm an irrigated intensive arable farm at Eiffelton.

My part of the presentation with John Wright and Andy Macfarlane is to discuss those things that are going to stymy and limit achieving the vision we have in developing the water resource to continue the economic growth [within environmental limits] that this region has seen in the last few years; and what we can do collectively to get it right to combat these issues.

Rangitata Diversion RacePhoto courtesy of Ashburton District Tourism

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SPEAKERS - LOCAL WATER ISSUES

John is an arable farmer from Methven with interests in feed milling and seed cleaning. He is a Nuffield Scholar, recently stepped down as Chairman of United Wheatgrowers NZ Limited, and is Deputy Chairman of the Foundation for Arable Research.

John is Executive Chairman and Project Manager for the BCI development which seeks to provide water to 40,000ha in Mid Canterbury.

JOHN WRIGHT, Chairman, Barrhill Chertsey Irrigation Ltd (BCI)

The Canterbury Water Strategy was developed by the Canterbury Mayoral Forum and has proposed some concepts for the coordinated development of Canterbury’s water resource. With a goal of sustainably irrigating the entire Canterbury Plains the general principle has emerged that water needs to be moved south to meet future demand. For Mid Canterbury this means the primary source of future water will be the Rakaia River.

The study has also highlighted the need to store water so that poor reliability “run of river” takes can be supplemented. The logical storage site for Mid Canterbury is to further utilise Lake Coleridge and bring water across the Rakaia River to the district.

Regardless of the strategy Mid Canterbury developers are working with their counterparts to the North and South to ensure a sensible and coordinated use of resources.

Mid Canterbury has approximately 250,000ha of irrigable land. Around 64,000ha is currently irrigated by the Rangitata Diversion Race (RDR) schemes and 110,000ha through ground water supply. The remaining area could be irrigated by the consented 40,000ha BCI scheme and use of the Ashburton Community Water Trust water under application for hydro generation.

The goal in Mid Canterbury is to supply the upper plains with river water from the supplies outlined above and allow the lower plains to abstract from ground water. This will reduce the reliance on deep wells in the upper plains which are energy intensive and also replenish the ground water in the lower plains through application of river water in the upper plains.

The BCI development proposal involves pumping water 95m from new infrastructure adjacent to the Rakaia River at Highbank and utilising the existing RDR infrastructure in a water swap arrangement. This allows water to be delivered in pressurised pipes to properties across the entire upper plains. Initially minimal storage will be incorporated in distribution on the plains.

Shareholders in the cooperative development will be required to fund significant infrastructure through a combination of capital contribution and annual charge. These charges ensure that the development is intergenerational with minimal cash surpluses in early years of irrigation.

One of the keys to future development will be the reliability of supply. Economic studies show significantly higher returns to the local economy from provision of high reliability water versus mediocre supply due to farmer confidence to enter more intensive agricultural systems. Both run of the river and ground water supply will benefit from the use of storage to supply high reliability water to the upper plains.

The district also has some ambition regarding hydro generation. As an intensive summer user of energy for irrigation the strategy involves the provision of generation in conjunction with future and existing irrigation development.

THE LOCAL WATER VISION

68

Jacqueline holds the Foundation Chair of Pastoral Agriculture at Massey University, and is Director of Massey Agriculture. She is on the AGMARDT Board of trustees, the Executive of the New Zealand Grasslands Association, the Primary Resources Advisory Committee for the Royal Society of New Zealand, and the Massey-Lincoln Agricultural Industry Trust Partnership for Excellence.

Jacqueline obtained an Agricultural Science degree with first class honours in Environmental Agriculture, has a PhD in Soil Science from Massey University (given the Morice Fieldes award by the NZ Society of Soil Science for ‘exceptional merit’), worked in Plant Improvement with AgResearch for 6 years and then taught Plant Science at Lincoln University for 6 years. From 2000-2004 she was Dean of the Postgraduate Division and Director of Research at Unitec, Auckland, becoming Vice-President, Research and Development, at the beginning of 2005. From 2005 to the beginning of 2007 she was Director, Office for Environmental Programs, The University of Melbourne.

Throughout her career she has been an active scientist, with a strong commitment to technology transfer. She has also been dedicated to promoting awareness of science and the importance of research to schools, interest groups and society in general. For her work in all these areas, she received the Zonta Award for excellence in science in 1994, a New Zealand Science and Technology Medal in 1997, and in 2001 was elected as a Companion of the Royal Society of NZ, recognising ‘pre-eminence in the promotion of science and technology’. In 2003 she was elected as a Fellow of the New Zealand Institute of Agricultural Science in recognition of her contribution to agricultural science. She was also made an honorary member in acknowledgement of her contribution to the profession. In 2008 she was awarded Companion of the New Zealand Order of Merit for services to Agricultural Science.

Professor JACQUELINE ROWARTH, CNZM, CRSNZ, FNZIAHS

Introduction

In October 2008, the Department of Labour released Workforce

2020: Forces for change in the future labour market of New

Zealand. The report identified four forces in the New Zealand

labour market in the next 12 years:

1. Population and labour force changes

2. Continuing globalisation

3. Technology and changing skill requirements

4. Climate change and resource pressures

“Environmental pressures, particularly climate change and

emerging resource constraints, will play a larger role in technology

and skills development. Although overall employment will not

change considerably, the move towards a low-carbon economy

will require new skills and considerable labour market flexibility

to allow New Zealand industries to take advantage of new

opportunities.”

Key growth sectors for New Zealand have been reported to

be Farming, Biotechnology, Engineering, Information and

Communications Technology, Food and Beverages, Healthcare,

Construction, Creative Industries and Tourism. Of the nine areas,

only two might be considered not to require some sort of science

background. Over half require understanding of environmental

impact, and three of them (farming, food and tourism) account

for most of New Zealand’s export economy.

Staffing, employment and human relations (and relationships)

are top of mind for many people in these growth sectors. Staff

shortages are being reported all over the country, and, indeed, the

world. Employee retention is already a major business concern for

70% of human resources managers and long-term demographic

changes, which include baby-boomer retirement, have the

potential to aggravate the situation.

In New Zealand the problems are exacerbated in the sector

underpinning the economy – agriculture. This is because only

4.27 million people live in New Zealand, 86% of the population

lives in urban areas, government focus has been on sectors other

than agriculture for two decades, baby boomers (born between

approximately 1946 and 1964) are beginning to retire, and the

Y-generation (born between approximately 1978 and 1994) has

COMMUNICATION ACROSS CULTURES

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Professor JACQUELINE ROWARTH

come into the work place with expectations which are quite

different from those of previous generations. These differences…

reflecting positive parenting, a no-fail education system, and an

era of high employment… mean that becoming the employer

of choice is something of a challenge, particularly for the

agricultural sector for the home-grown workforce. Moving to

overseas-born staff creates equal challenges, and the challenges

are different according to country of origin. At least part of the

answer is, however, appropriate for all: appropriate, timely, clear

communication, and leadership.

This paper considers why the new workforce requires new

management, and what that new management could entail.

The Y-generation

– the low-down… and why

The number-one career goal in a survey of nearly 40,000 students

in America was to ‘balance personal and professional life’. They

want a good income without working long hour and though they

have what they consider to be a strong work ethic, as do baby

boomers, Peter Sheehan, Y-generation guru, reports that there

appears to be a 30-hour per week difference. Although work-

life balance rates more highly than salary in their desires, salary

expectations are high. In fact, members of Generation-Y do not

believe they need to choose between having a balanced lifestyle

and professional success; they want, and expect, to be able to

have both.

Generation-Y members want responsibility and don’t regard lack of

experience as an impediment. Furthermore, they want challenge,

which implies effort and persistence, but instant rewards, which

implies ease and immediacy. Eighty-three percent of graduates

in Generation-Y expected to receive promotion within 2 years

of starting the job; 63% expected promotion within one year of

starting. If expectations are not achieved, they will leave.

Further points to consider are that members of Generation-Y do

not like being managed, but complain if ‘they do not get to learn

enough’ and they do want personal career development. “Who

will guide me, who will motivate me, who will encourage me to

be all that I can be?” is a common refrain. They have grown up

with television programmes such as Teenage Mutant Ninja Turtles

and Morphin’ Power Rangers, and are used to the concept of a

mentor. Translate this to the workforce and twenty-five percent

of Y-generation believe that they should have feedback from their

boss on a weekly basis in contrast with 11% of baby boomers.

They regard critique as criticism, however. “What’s in it for me?”

is a repeated question, and they do not want to have to work it

out for themselves.

The Y-generation is, however, the employee of the future. They

are what will dominate the workforce within a few years. And the

baby boomers have made them what they are.

For members of the Y-Generation, which make up over a quarter

of the population in Australasia, being regarded highly is the

expectation – they have been the focus of the family and know that

they are ‘special’. The typical baby boomer parents in developed

countries and relative affluence have brought their children up

with more involvement and affection than previous generations

were able to show, frequently treating them as equals. In marked

contrast to the ‘children should be seen and not heard’ attitude

of previous generations, opinions have been encouraged, listened

to and celebrated by their parents. This high level of parenting

and building of confidence, in an era of tolerance, has resulted

in what has been described as ‘a generation of narcissists’ with

self-inflated views. Y-Generation members have been encouraged

to think big; they have embraced the concept that if you want

something enough it will be achieved. San Diego State University

psychology professor Jean Twenge has recorded a 30% increase

since 1982 in students recording above average scores in an

evaluation (involving over 16,000 college students nationwide)

termed the Narcissistic Personality Inventory: by 2006 two thirds

of the students had above-average scores. At the same time,

underperformance (linked to what has been termed ‘vacuous

over-praise’) has increased. Motivation to learn, ability to work

in teams, and showing initiative are already being reported as

problems in the workplace.

- the up-side

Members of the Y-generation are young, fresh, energetic and

technologically literate. They are prepared to take risks (reflecting

high employment, parental support, and failing them, the

Y-Generation believes that the government will step in) and will

find efficient ways of doing things (the working ‘smarter not

harder’ approach); they will bring new approaches to new tasks.

Making a contribution to society is important; 27 % of the 37,000

graduates surveyed in America said that their main career goal

was to make a contribution to society. (Australian research has

suggested, however, that this will be the case only as long as social

enlightenment is seen to be ‘cool’.) They also want to be ‘valued’

(hence the attraction of a profession) and are career focussed.

When the match is right, they can make very good employees.

We know them as our children, now we need to adapt to them

as our employees.

Communication

Communication for the Y-generation must be clear, concise

and contain an explanation of ‘why’. Increasingly this group

has experienced mastery tests, unit standards and the National

Certificate of Educational Achievement, and so likes templates

and tick-the-box. In a monthly survey of 17,000 managers by a

leadership and performance management expert, ‘failing to meet

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Professor JACQUELINE ROWARTH

the unspoken expectations’ rated as the hardest thing for the

managers in managing their people. The Y-Generation must be

spoken to and the unspoken expectations must be made clear.

Add to this the fact that so many have not grown up in a rural

family, and the reason for clarity is apparent.

For immigrant labour, the same requirement for clarity exists. New

Zealand farming systems are unique and expectations for people

and animals vary across the world. Explanation and setting of

parameters is vital.

The Y-generation, from whatever country, has particular learning

trends, probably reflecting access to television and interactive

computer games. They tend to be holistic learners and so want

the big picture rather than detail. Furthermore, they want to be

overtly high on the pecking order - they want to drive the tractor

with the feed out wagon and will play with the computer system

to make it work, rather than listen to you explain how each bit

operates. This aligns with ‘making tasks real’ – they want to do

it not hear about it – and making the task a game assists. Doing

rather then listening, and pictures rather than words. Of further

consideration is the fact that they are motivated by technology,

have a low threshold for boredom, a short attention span, and do

not regard memorisation as part of life. Customisation of tasks to

suit them as individuals is ideal, and ‘the boss showing them how’

is good.

Leadership

Leadership for the Y-generation means being inspiring. Generation

Y members need constant stimulation, reassurance and praise in

order to perform. An Australian workplace survey reported in the

media in May 2006 indicated that two-thirds of Generation Y

employees believe that they don’t receive enough attention in the

workplace. (In contrast, two thirds of baby boomers think that the

Y-generation receives rather more than deserved.)

For the Y-generation, coaching will be paramount in the workforce

as a way of achieving performance. Coaches listen, support,

encourage and give positive feedback, serving as a guide, but

encouraging the employees to direct their own progress. Lester Levy,

the Chief Executive of the Auckland University-based Leadership

Institute Excelerator, terms this transformational leadership

– where bosses treat people “like hearts and souls rather than

heads and hands”. Regular informal and meaningful feedback is

associated with a nearly 40 per cent increase in performance and

a 20 per cent rise in discretionary effort. In contrast, transactional

leadership, common in New Zealand, focuses on goals and

objectives and tells employees when something has gone well or

wrong. It results in disengagement, which does not lead to a happy

or productive workforce. There is a negative impact of almost 30

per cent in people who have their weaknesses highlighted in an

annual performance review.

Unhappy employees are not creative. Furthermore, members of

the Y-generation, never knowing anything but full employment

(and knowing that their parents or the Government will look

after them if they aren’t working), will not stay where they don’t

feel valued and happy. We know this already. And though the

economic downturn and rising unemployment might make some

people reluctant to leave, how productive will they be if they are

disaffected?

Common features in top workplaces include excellence in

leadership, focus on performance and results (including

performance-based rewards, recognition systems and formal

management structures), allowing employees to feel they are

making a difference, and ensuring that they are acknowledged

for their contribution. Investment in the accelerated development

of workers, open lines of communication, high levels of employee

engagement, competitive remuneration, and strong drive for

work-life balance are also important.

Although 71% of companies in a Deloitte’s survey on Competing

for Talent reported that they relied on financial incentives to

attract and retain employees, today’s workforce appears to

place more value on greater freedom in schedules and control

of where and how they worked over financial compensation.

This can mean working hours around their needs, and might

mean writing time in to their job description for further study,

or professional development with, for instance, the local Young

Farmers Club, by giving them an afternoon off milking a week.

This can be part of their personalised career development plan -

what the Y-generation members want is a customised career that

matches their customised workplace, giving them experience and

exposure to leaders: career development, overseen by the boss, is

paramount.

Rural employers must also ensure that they have the six dimensions

of high-performance work systems: a fair promotion process,

few status differences, accurate performance appraisals, regular

constructive feedback on performance, information sharing,

inclusion in decision-making. Creating such a system has been

reported to lift job satisfaction, commitment, trust in leadership,

and ultimately performance, for the business.

Remuneration should never be overlooked. The Federated

Farmers/Rabobank Farm Employee Remuneration Report released

in mid-January revealed that the average farm worker earned

more that the average non-farm worker ($41,941 in comparison

with $39,517) last year. Other benefits increased the average

farm-worker package to $46,374. For the Y-generation, mobile

telephone, car and regular rewards (double pass to a film, dinner

for two at a local restaurant - this type of thing after a big harvest

or a record milk yield), should also be part of the package.

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Professor JACQUELINE ROWARTH

Management training

To ensure the culture in which Y-Generation members will thrive,

employers need to be investing time and money in current and

future managers - helping them to listen more and talk less,

encouraging them to learn how to give constructive feedback

on both good and poor performance. Coaching training may

be of assistance; learning to ask open-ended questions and

offer information to clarify a situation, helping the employee to

identify possible actions, e.g. “What do you think we need to/

could do? What options do we have? What if we did…?”, gain

agreement on a course of action, and offer support, e.g. What

can I do/what do you need to assist your decision?”. Inclusive

approaches to problem-solving by involving employees across the

organisation must be the norm. Generation-Y has been likened

to Generation-X on fast-forward with self-esteem on steroids;

spending time with them is vital for development and retention.

Remember that members of the Y-generation are used to their

parents hovering and are more comfortable with ongoing access

to somebody interested in their personal development than ‘going

it alone’.

Conclusions

Motivators for Generation-Y employees have been identified by

Peter Sheahan (and others) as culture, team, management style,

flexibility, conditions, and salary. Given the basic statement that a

significant number of the Y-Generation members do want to do

good for society, and be valued for what they do, employers in

land-based industries can build upon this foundation to create a

workplace culture that acts as a magnet for talent.

Creating the workplace of choice for the Y-generation, will benefit

all generations from all cultures. It means developing a creative

and personal work environment where employees are treated and

developed as individuals. The cost of backing off on accountability

while increasing coaching efforts will be more than covered by

increased productivity.

Although unemployment is increasing, the fundamental problem

of attracting and retaining good staff will remain. Not getting this

right endangers New Zealand’s economic foundation: management

training to ensure that the importance of communication and

coaching is well understood may well be the key.

Lake Hood, AshburtonPhoto courtesy of Ashburton District Tourism

72

Mike Sabin, is a former New Zealand Police Clan Lab specialist and founder of MethCon Group Ltd, a company specialising in drug education, research and policy related to methamphetamine and other addictive drugs. Mr. Sabin spent 12 years in the New Zealand Police, specialising early in his career in the area of drug enforcement. He worked on surveillance operations, electronic interception and undercover operations, before becoming one of New Zealand’s first specialist Clandestine Drug Laboratory investigators responsible for investigating and dismantling meth labs.

Early in 2006, Mr. Sabin left the Police having founded MethCon Group Ltd, concerned that law enforcement interventions have had a disappointingly limited efficacy with regard to methamphetamine. He believed a more balanced approach was needed to address what had become New Zealand’s worst ever drug problem. MethCon Group Ltd is the only organisation of its kind in the world, providing specialist education related to the multiple risks posed to communities due to methamphetamine use and manufacture.

MethCon Group Ltd is also a specialist drug awareness education provider, with their team running methamphetamine and drug awareness education programmes with companies, government departments and secondary schools across New Zealand and now also working with companies in Australia.

Mr. Sabin spent 18 months researching the methamphetamine problem in New Zealand and across the world looking to identify what works and what doesn’t, to reduce the prevalence of the drug. The aim of this research was to influence more robust and effective policy and legislative responses while seeking to develop a more comprehensive and balanced approach to addressing methamphetamine use and prevalence. This research titled Solutions to the Methamphetamine Crisis in New Zealand: A Study of Supply and Demand-Side Interventions and their Efficacy was presented to New Zealand Members of Parliament and government officials in late May 2008.

Methcon Group Ltd, now a leading drug education provider nationally, has won three business awards while Mr. Sabin, now recognised nationally and internationally for his expertise in this field, was recently honoured with a Sir Peter Blake Emerging Leader award, along with an honourable mention in the North and South New Zealander of the year nominations, for his endeavours and initiatives aimed at reducing the prevalence of methamphetamine and drug abuse in New Zealand. For more information or to contact Mike, go to

www.methcon.co.nz

MIKE SABIN, Managing Director, Methcon Group Ltd

DRUGS AND EDUCATION

Drugs and Pleasure The human brain is an immensely complex organ with at least 100

billion nerve cells, known as neurons that carry electrical impulses

throughout the brain, each of them capable of making 10,000

connections each.

Learning new information or skills and creating and storing

memories are a result of these connections being made and new

nerve pathways being formed, which occurs within seconds to

minutes. A healthy brain is in a constant state of change and can

continue creating countless millions of new connections right up

until death.

When these connections are made the electrical impulses are

passed between a tiny gap in the neurons via chemical messengers

called neurotransmitters, the primary one responsible for pleasure

being dopamine. It is in this critical area where electrical pulses are

passed via chemical messengers that drugs work.

The brain is thought to produce hundreds of neurotransmitters

naturally which provide for the immensely diverse range of

pleasures, moods and emotions we are capable of experiencing

naturally. However there are thousands of chemicals that

occur naturally or can be synthetically constructed which share

properties similar to the brain’s own neurotransmitters. When

these chemicals are ingested they travel via the bloodstream to the

SPEAKERS - RURAL PEOPLE

73

brain and mimic or inhibit the naturally occurring mood altering

chemical found in the brain.

Drugs of abuse all share in common the ability to activate and

stimulate these chemical messengers in the brain producing

feelings of well-being, pleasure, and euphoria. By over stimulating

the pleasure system, drugs can indiscriminately alter this critical

area and changes occur, which ultimately damages the normal

experience of pleasure.

What Is Methamphetamine (‘P’)?

for pleasure and euphoria

How Does Methamphetamine Affect People?

Psychological

Physical

How Is It Used?

Smoking: Burns, hitting the pipe, hit. Using a glass pipe, light

bulb, on tin foil

Snorting/Sniffing: Using razor blades, credit cards, glass,

mirror, straws, rolled up money, snuff dispenser

Injecting: Blasting, pinging, shooting up. Using needle,

syringe, spoon, belt/elastic tubing

Drinking: Bombing. Using water, alcohol, juice

Understanding Methamphetamine Addiction

Methamphetamine is a highly addictive synthetic stimulant

that triggers the release of large quantities of the chemicals,

predominantly dopamine, causing a euphoric high which may last

for between 4 and 24 hours.

Pure methamphetamine or ‘P’ is known to produce about 12

times the levels of dopamine that normal life pleasure will,

immediately causing the brain to compensate by killing off the

receptors in the nerve cells which receive the pleasure. Continued

use of methamphetamine results in ever increasing damage to the

pleasure pathways, while requiring ever increasing amounts of the

drug to achieve the same pleasure.

While initially the user may feel in control and ‘ten foot tall and

bullet proof’, the reality is far from this, with continued use of the

drug leaving the user unable to feel normal life pleasure without

drug stimulation. Faced with abstinence the user feels as low as

they did high, and must contend with overpowering biological

cravings for the drug.

After use has ceased the user may be faced with months of

anhedonia (loss of ability to experience pleasure) and dysphoria

(the opposite of euphoria) with intense cravings which can cause

many to relapse to drug use to escape the negative sensations.

Even months of methamphetamine use can cause permanent

damage to the reward pathways, meaning that the user will be

unable to experience pleasure in the same way they did prior to

methamphetamine use.

Signs Of Meth Addiction

Behaviours

Physical

grinding

gram bags etc

SPEAKERS - RURAL PEOPLE

MIKE SABIN

74

What Is Commonly Found In Meth Clan Labs?

Chemicals And Substances

padsEquipment

SPEAKERS - RURAL PEOPLE

MIKE SABIN

75

K N O W S D A I R Y I N G

BE

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85

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Dr Blennerhassett is a graduate of Massey University specialising in soil and water management to Masters level before undertaking a Doctorate in hill country nitrogen fertiliser use. Since leaving university Jamie has worked as Technical Services Manager at Summit Quinphos in charge of a comprehensive research program focusing on nutrient use efficiency for the benefit of increased production and reduced environmental impact.

DR JAMIE BLENNERHASSETT

Kayaking on Lake HeronPhoto courtesy of Ashburton District Tourism

77

I am 33 years old and originate from Hawkes Bay where our family was associated with the pipfruit industry. I attended Massey University and graduated with a Bachelor of Applied Science (Agr) in 1998. My wife Julie is a Lincoln University graduate and former Dexcel (Dairy NZ) consultant. We have three pre-school aged children.

I moved to North Otago upon completion of my tertiary education and have spent the past ten years in the dairy industry. The first three seasons as a farm manager on the Waitaki Plains, followed by four seasons 50:50 sharemilking a 400ha development property south of Oamaru. We now operate two farms milking 1700 cows. One a 450 ha self contained property that we 50:50 sharemilk for Kelvin and Debbie Weir, and the second a neighbouring 320ha property in which we farm in partnership with Neil and Julie Hamilton.

Each operation milks 850 cows on a 230 ha milking platform and produces in excess of 400,000 kg of milksolids. The cows are wintered on the balance of each farm, and a medium input production system utilizing pasture silage and barley is employed.

Julie and I have been fortunate to share a very busy but rewarding 10 years in the dairy industry and look forward to its future development. For us this was further endorsed when we were awarded the 2007 New Zealand Sharemilker of the Year title within the New Zealand Dairy Industry Awards programme.

In addition to overseeing the running and development of our farming operations I spend a considerable amount of time off farm on irrigation business as the chairman of our local company. This includes the ongoing operations and governance within the company and more recently has centered on regional issues as irrigators and the local hydro generator work toward a sustainable and enduring future for the catchment. My industry involvement has extended further with my appointment to the board of Irrigation New Zealand in October 2008.

Off the farm I enjoy the outdoors, hunting and fishing and when time allows a trip to the nearby lakes for some boating and water sports is always enjoyed by the family.

I welcome the invitation to be part of the Large Herds conference and the opportunities that it will bring.

MATT ROSS, 2007 Sharemilker of the Year

What does tomorrow mean for you? I challenge you to think about

that statement for a moment. In my brief for this presentation the

“day after tomorrow” sets out to address the medium term and

beyond. Let’s say 3-5 years plus. How many of you genuinely farm

and make decisions with these time frames in mind?

For some of you it will literally mean tomorrow and what that day

brings, the operational and seasonal requirements that go with

the day to day running of your farming systems.

For others it is the medium term and will include decisions like

how is my farm run? By whom? What scale of investment will

I make in the dairy industry? Do I want to own a farm or am I

motivated by an empire of farms? What is my investment strategy

and how will I apply that?

Another group will be those considering farm succession and deciding whether or not it is feasible for their farm business/investments to become an intergenerational asset.

My view is that “tomorrow” will mean a variety of things to all of us but will find relative meaning depending on the age and stage of the respective business and individual you apply it to.

I believe the future of my dairying business is reliant on an enduring strategy that encompasses all of the aforementioned timeframes. It is important to get the right balance between these timeframes. The challenge then becomes the application of that strategy to all aspects of the farm business. The physical, financial and human resources required to operate within the environment the business is located.

In my opinion, too often, decisions are made on the basis of the

THE DAY AFTER TOMORROW

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SPEAKERS - THE DAY AFTER TOMORROW

MATT ROSS

here and now with little regard for the longer term view and its

associated implications. A good example may be the price of feed.

How many of you paid too much for feed at some point during

last season? What have you done about it this season? What then

are the implications to your farm business, your supplier, the local

community and to the wider industry?

Industry Sustainability

I firmly believe Industry Sustainability is the key to our future.

We need to harness that statement, develop it and deliver a

result for our industry’s future. It is essential for the “day after

tomorrow”.

Too often catch phrases dominate discussion, presentations,

debate and the media without delivering a real result. I believe

the word sustainability is no exception and our biggest challenge

for the future, “the day after tomorrow”, is an enduring industry

strategy focused on true sustainability that will deliver a result.

Industry sustainability needs to be all encompassing. It means

decisions and policies need to cover all aspects of our on farm

business and the industry within which it operates.

It’s no mistake my fellow speakers are here to address the financial,

environmental and market related aspects of the industry and

what influence each of these areas has on our future.

These three components, and there are more of equal importance,

are critical to our future.

The Industry and Structure:

I believe the future for our industry looks promising, there is some

great potential with expanding markets and the worlds appetite

for protein bodes well for its producers. This potential is tempered

by the challenges of ensuring the right type of product is in the

market at the right place and time and in sustainable volumes.

Quality and its control from the farm through to consumption is

essential. We all know the consequence if quality of that product is

compromised and the San Lu incident in China is testament to that.

We are in the food market with a range of products promoted as

healthy, sustainable protein providers. We need to remember and

respect that, certainly not abuse it if the potential of our future is

to be realized.

All New Zealand dairy companies have had a very difficult twelve

months dealing with a broad range of issues in order to maintain

the security New Zealand dairy farmers and the industry has come

to enjoy. The companies and their respective boards have the

unenviable task of plotting a course through the next period of

uncertainty as the world struggles to regain its feet after a severe

economic knock.

The world economy and its markets have experienced a truly

historic event over the last twelve months and to manage that

and pre-empt any kind of outcome has been basically impossible.

I think we need to bear this in mind as we move forward. We

need to concentrate on being part of a solution to these uncertain

times and ensuring our part in the equation is fore filled rather

than dragging the process down by partitioning blame and talking

about all the things that might have been.

As a Fonterra shareholder and supplier I support the concept of

rolling out the Fonterra strategy. I believe the board is far more

likely to maintain and build shareholder support in their strategy

with this approach. Certainly a step in the right direction following

the failed capital structure options/discussions of last season.

I am a little apprehensive about the sustainability of the shareholder

base. The current distribution of shareholders, their age and stage,

owner operators compared with equity partnership and corporate

structures. The current proportion of each group is constantly

moving. How does this merge with the capital structure issue

synonymous with the Fonterra strategy of going “global” and the

very real issue of industry growth and succession? How will the

next generation of farmers own Fonterra and in what form will

it be? I believe the same issues are applicable to and will surface

in all New Zealand dairy companies. It is part of any company’s

structure and growth cycle.

Financial Situation and Economic Outlook:Not an easy or desirable topic to deal with at the moment or into

the future. The unprecedented volatility and fickleness of the past

12 months has made forecasting any future very difficult.

That doesn’t mean we ignore it as the risk of that means our own

business may become part of the stats column.

Again it’s about being ahead of the game. Make prudent decisions

when conditions are favorable and strong. Sound financial

structures need to be put in place at day one not when the pressure

comes on. For me it’s about staying informed. Take advice, stay up

to date with the most recent information and make your decisions.

Then get on with the business of delivering a result the banker and

accountant are expecting and the business requires to meet its

financial obligations. Do not over commit.

The current environment in some ways is a good test for your

business. You may be required to rationalize and justify expenditure,

reassess debt structures and consider the scope of the operational

parameters and resources employed to run your farm. Is this a

bad thing?

Environmental Sustainability and our Future:All agriculture is heavily reliant, in fact dependant, on the physical

environment to operate. After all agricultural production is derived

from the management of animals or plants (crops) within the

bounds of the physical resources of soil, water and air on the

land.

Without these essential natural resources agricultural production

is not possible. New Zealand is fortunate enough to have had an

abundance of these natural resources and is a nation built on the

back of agricultural production.

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Over the years the value of these natural resources has become realized and is now considered for a wide range of uses, which respond to social, economic and environmental stimulus. The key to our future is a collaborative balance between these stimuli.

In my opinion one of our biggest challenges is the future management of our natural resources to ensure true environmental sustainability. The quality of the soil, water and air resources which agriculture is so reliant on is in decline.

To ensure we have a future this needs to be addressed yesterday. It is our obligation as individuals, an industry and a country. It is not an option and unacceptable to get this wrong.

To provide direction and deliver a result in environmental sustainability we need to make informed decisions backed by science and implemented with proven effective technology. I believe it is our obligation as an industry to act on this issue. I stress the word obligation, because for me that is part of the deal for being a manager of the natural resources we need in order to farm. This is not a choice because without them we have no future.

The sooner we all wake up and accept where we are at rather than arguing about who is or isn’t to blame the sooner everyone can participate and focus their energies into workable solutions that will deliver a result.

Where are the people and who are they?

People are critical to the future of the industry. There are some great people at all levels and I have been fortunate enough to work for, work with and provide work to some amazing individuals during my time in the industry.

Developing people to work in, manage, develop and govern tomorrows industry is essential to a sustainable future.

Where will they come from? What type of training is required? Where is it provided and at what stage? Are all questions that need constant review. The measure is, are the right people available when required?

The industry like all others will follow natural labour cycles driven principally by economic forces. We as individuals operating within that do need to ensure we do our bit to provide for the people employed in our farming operations. Whatever the mix on your farm the challenge for all of us is to stay ahead of the game and provide an environment and conditions that encourages the best from our people.

Public Perception – The Rural/Urban myth, Is it real? Is it a threat?

Fact vs. Fiction, Lack of info/communication leads to assumption and generally a negative perception.

The industry as a whole needs to get buy in from the public, particularly the urban communities. They are part of our operating environment and should be given due consideration. Their concerns need to be addressed.

The reality is there is an ever increasing disconnect between the

rural and urban communities. There is now a whole generation of

urban children with little or no understanding of the agricultural

basis/foundation in which our country’s economy is so heavily

reliant. The fundamental question of where does our food come

from gets forgotten as the raw product transitions through the

manufacturing, packaging and marketing processes and appears

in our supermarkets. It is one thing for a small agricultural nation

to encounter and attempt to deal with this situation at a national

level. The implication of this on a global scale is a serious concern

for the future.

I believe it’s about giving the public understanding. Provide

them with the information before they need it, rather than as a

reactionary measure after the event. Generally most situations

deteriorate because those involved have lack of regard or little

understanding of each other’s position. The industry and its

representatives need to engage in information and knowledge

transfer to manage this relationship better into the future. The

solutions to these challenges do not lie in putting up fences and

lobbing stones in self defence.

I would like to see our industry leaders and lobby groups participate

in all forums/debates with a genuine desire and style that seeks

resolution to the issues. If as an industry we can improve then we

should accept that and implement a process that delivers change.

Our time is better spent on solutions rather than antagonizing the

debate.

The Day after Tomorrow, when will it be here and what does it mean?

The “Day after Tomorrow” begins today with what we put in place

to ensure we guarantee a future for our individual farm business,

the industry and therefore our country.

Our industry has an exciting future. We are an agricultural nation

capable of producing high quality protein products for the global

market. We do it on predominately pasture based systems and

that gives our industry a unique competitive advantage. We must

not lose sight of that if we are to maintain and enhance our profile

in the world market. Our industry and its future is dependent on

the export of the majority of our end product. To ensure our future

potential is realized we need to maintain and enhance our current

market access, failure to do so has serious implications.

True industry sustainability is therefore the key to the future for

the New Zealand dairy industry. That sustainability needs to be all

encompassing and will be measured by the physical, environmental

and social footprint we leave in the communities within which we

operate.

The opportunities for our industry and our country in the “Day

after Tomorrow” are vast. Opportunity brings choice and that’s

positive for our future. It’s up to us as individuals and as an

industry to make the right choice and honour the obligations and

commitments those choices bring.

SPEAKERS - THE DAY AFTER TOMORROW

MATT ROSS

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SPEAKERS - THE DAY AFTER TOMORROW

Guy Salmon is executive director of the Ecologic Foundation. Ecologic is an independent think tank which does policy research on sustainable development, supported by its members, consultancy work, and research grants from the Foundation on Research, Science and Technology. He is a member of the current Government’s Technical Advisory Group on the Resource Management Act.

Stuart Nattrass was elected to the Fonterra Board of Directors in June 2003. He is a member of the

Audit, Finance and Risk Committee and the Fair Value Share Review Committee. View full profile...

Mr Nattrass was involved in international financial markets, principally foreign exchange risk

management, for 16 years. He was initially employed at the National Bank in Wellington and he left

the industry having held the position of Global Head of Foreign Exchange Risk for Westpac, based

in Sydney.

He has been involved in farming all his life, and his interests now include ownership of a 420 hectare

pastoral property near Geraldine. He also has a share in a 1,200 cow spray irrigated dairy farm near

Ashburton. Mr Nattrass has a Bachelor of Agricultural Science with Honours from Lincoln University.

GUY SALMON, Executive Director, Ecologic Foundation

STUART NATTRASS, B.Ag.Sc, (Hons) Lincoln

TIM HUNT, Senior Dairy Analyst, Rabobank Food and Agribusiness Research and Advisory

As a senior analyst and global dairy sector team leader, Tim is responsible for coverage of the Australian dairy markets and co-ordinating the bank’s views on the global dairy market. This includes analysing developments in regional and global dairy markets, coordinating the banks medium term forecasts and advising the bank on engagement with the dairy industry.

Tim advises clients on the implications of market developments for their businesses, assists with the Mergers & Acquisitions’ Advisory business and he has co-authored a number of very highly regarded Rabobank reports.

Tim is a highly sought after speaker at local and international conferences and a professional economist with 14 years experience, gained working with leading financial institutions and strategic consultancies in the United Kingdom and Australia. He graduated from the University of Melbourne with an honors degree in Economics and Bachelor of Commerce and Bachelor of Arts degrees.

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Dr Gareth Morgan is an economist, portfolio investor, motorcycle adventurer and fisherman. He has instigated three successful businesses—economics consultancy, Infometrics Ltd; personal portfolio management business, Gareth Morgan Investments; and Gareth Morgan Kiwisaver. He also is an active philanthropist and is a UNICEF Ambassador and Patron of the Kyrygzsyan-New Zealand Trust.

He is a well-known media columnist and commentator and sought-after conference speaker and has co-authored with his wife Joanne 3 books on their offshore motorcycle trips – Silkriders, Backblocks America and Under African Skies – as well has having written two books on personal investment, Pension Panic and KiwiSafer. His new book – due out in a couple of months is entitled Poles Apart and is an analysis of the science of climate change.

Gareth’s past directorships include Property For Industry Limited, the Advisory Board of Work and Income New Zealand, the Board of law firm Phillips Fox, Greens Industries Ltd, TradeMe Ltd, and public-listed company Direct Capital Partners Ltd.

Gareth graduated from Victoria University with a PhD in economics 1982.

GARETH MORGAN

Mountain Biking, Mt HuttPhoto couresy of Ashburton District Tourism

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A Merck Sharp & Dohme and sanofi-aventis CompanyMerial Ancare, Level 3 MERIAL Building, Osterley Way, Manukau City. ®EPRINEX and ®GENESIS are registered trademarks of Merial Limited. Registered pursuant to the ACVM Act 1997, No.’s A7353, A7191. ©Copyright 2009, Merial Limited. All Rights Reserved. NZ-09-MAL-037

Merial Ancare ...proud to support the

NZ Large Herds Association.

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EALING PASTURES – Water Turbine Power and irrigation and Effl uent DisposalANDREW and RACHEL MORRIS

Sponsored by

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FARM VISITS - EALING PASTURES

ANDREW AND RACHEL MORRIS

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FARM VISITS - EALING PASTURES

ANDREW AND RACHEL MORRIS

86

FARM VISITS - EALING PASTURES

ANDREW AND RACHEL MORRIS

87

FARM VISITS - EALING PASTURES

ANDREW AND RACHEL MORRIS

88

FARM VISITS - EALING PASTURES

ANDREW AND RACHEL MORRIS

Rakaia GorgePhoto courtesy of Ashburton District Tourism

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FARM VISITS - STONEHAVEN FARM

STONEHAVEN FARM – Large Scale Winter Grazing - Mayfield Hinds Irrigation SystemDAVID and RUTH KEELEY

Sponsored by

pond

feed (2600 t DM)

suit

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FARM VISITS - STONEHAVEN FARM

DAVID AND RUTH KEELEY

Vision Statement: “To be the leading New Zealand water management organisation committed to supplying an accurately measured flow to all shareholders and through progressive innovation and effective asset management meet the needs of existing and future shareholders.

To assist shareholders adopt robust environmentally and financially sustainable irrigation practices.

To aggressively pursue the maximum use of our water entitlement through: storage, trading, generation, flexible water delivery and promotion of efficient use.”

The Mayfield Hinds Irrigation Scheme delivers water from the Rangitata River via the Rangitata Diversion Race (RDR), and has since 1947. The scheme was purchased from the Government in 1990, now a co-operative and employs three racemen.

The MHIS is the largest privately owned irrigation scheme in NZ and covers 32,000 hectares, delivering water to 146 properties. MHIS was designed principally as a flood scheme with the main races and laterals designed for multiples of 230 l/sec (8 cusecs). Today our flows vary from less than 28 l/sec to 300 l/sec to accommodate farmer’s requirements. For flood irrigation the 300 l/sec flow is proving to be more efficient than the historical 230 l/sec flow. At present approximately 25% of our shareholders are delivered 300 l/sec, 15% delivered 230 l/sec and 60% a spray flow delivery - most being delivered to approximately 80 on-farm storage ponds.

Because MHIS is “a run of the river scheme” the water delivery is based on a rostered usage and ordering system. Contracted water delivery to shareholder farmers is based on a flow of 230 litres per second for 12 hours per 40 hectares per week. This maximum allocation of 2 shares per hectare equates to approximately 3.5mm per day.

The irrigation season starts 10 September and finishes 10 May (243 days). Irrigation restrictions are imposed by Environment Canterbury when the Rangitata or Ashburton Rivers reach their respective minimum flows. Over the last 16 years we have experienced an average of 36 days of restriction per season, and seasonal restrictions have varied from 0 to 98 days!

Under the terms of the MHIS Water Supply Agreement the farmers are responsible for the efficient use of water. Flow monitoring is carried out by qualified scheme staff who provide the Directors with a monthly report comparing deliveries to contract allocation.

Although the scheme design provided for five discharge points (for which we have both operational and emergency consents) the scheme operates a “no discharge” policy.

Within the scheme boundary there are approximately 4500 hectares not contracted. Trading of shares is allowed to this area but only up to the standard 2 shares per hectare.

MAYFIELD HINDS IRRIGATION SOCIETY LIMITED

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FARM VISITS - STONEHAVEN FARM

IAN WILLIAMS

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FARM VISITS - STONEHAVEN FARM

IAN WILLIAMS

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FARM VISITS - STONEHAVEN FARM

IAN WILLIAMS

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Ph 0800 00 77 66 www.winslowltd.co.nz

Think Winslow,Your Total Farming Solution

- Calf meal & dairy feed- Molassed mineral blocks- Silage, hay & straw contracting- Farm technology systems- Feed preservatives & toxin binders- Grain procurement & seed production

Salmon fishing Rakaia GorgePhoto courtesy of Ashburton District Tourism

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FARM VISITS - STRADBROOK FARM

STRADBROOK FARM – Robotic Milking and Voyager Grazing SystemWINSLOW LTD

Sponsored by

Voyager Grazing System

The Voyager grazing system is a method of intensive grazing management that allows livestock to continually graze on fresh food. The Voyager grazing system consists of two mobile robots. A solar panel provides power for the battery and gives the robots total autonomy. The robots allocate feed according to a pre-programmed time and number of metres. All the farmer has to do is set how many metres of feed per day he wishes to feed and the voyager will make the calculations and release this distance during the day. An electrified wire is moved forward and releases the pasture during the day. Here at Stradbrook we operate two Voyager systems, one on each side of the farm.

Robotic Milking Shed

In March 2007 planning and research around robotic milking on Stradbrook farm began. This started with visiting five farms around the world in the UK, Europe and Australia. It was decided that the Lely Astronaut A3 was the best machine available. Work began on the site in February this year and by September the milking shed was fully operational. Using the Lely Technology proven in other parts of the world and adapted here for New Zealand’s pasture based grazing system, we are today successfully milking 253 cows with two full time staff. At full production we will milk 300 cows under a split calving system milking 12 months per year.

The Astronaut A3 incorporates a Milk Quality Control system which provides information on milk colour, dead milk time, conductivity, milk speed, volume, yield and other factors relating to cow health. The system ensures only high quality milk is transported to the dairy factories.

Grazeway

The Grazeway system consists of gates that open and close automatically and direct the cow to different parts of the farm depending on what each cow needs and the pasture rotation. Depending on the previous milking time of the cow, she can be either guided back to the shed and robotic milking system to be milked or allowed to go to the pasture or new field. Grazeway is also used for auto separation of heat and sick cows into treatment yards.

Effluent System

This consists of a solids separating system where by all effluent from the dairy shed is separated into solids and liquid. The advantage of this is that only liquid is transported back through the irrigation system and onto pasture.

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FARM VISITS - STRADBROOK FARM

We hope you have an enjoyable day at Stradbrook Farm. Please note that this is a working farm with multiple hazards. Please take care of yourself and be mindful of the hazards that exist on this property.

Please do not enter the dairy shed unless accompanied by a Winslow representative. You will have the opportunity to view

the robotic shed in operation during the farm tour.

For further information on Winslow Farm Technology Systems

please contact our Product Sales Specialist Vanessa Gilbertson.

Phone: 0274 393 010.

Email: vanessa.gilbertson@winslowltd.co.nz

WINSLOW LTD

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FARM VISITS - STRADBROOK FARM

WINSLOW LTD

Q: How big is Stradbrook Robotic Dairy Farm?A: 68 ha effective dairy.

Q: How many cows are you milking at Stradbrook?A: 253.

Q: What is the stocking rate on the farm?A: 3.7.

Q: How many staff do you employ?A: Two at present. Soon there will be just one person employed

to run the farm now that it is up and running.

Q: How many KGs of milk solids are produced?A: The goal is 550 - 600kgs. Our current estimate for the season

is 450 to 500kg.

Q: What is the Somatic Cell Count?A: 80 to 160 on average.

Q: What is the cost of the Lely equipment?A: Talk to Winslow Ltd.

Q: How do you handle breeding and treatments?A: Cows are separated into treatment yard by the discretion of

the operator, or automatic separation can be enabled. Heat detection is done by eye and by the pedometer in the collars.

Q: How much mastitis is there?A: We have had four treated cases so far this season.

Q: How do you detect mastitis?A: Via Somatic Cell Count testing and milk colour sensors on the

robot, and through conductivity of the milk which is monitored through the robot also.

Q: How much lameness have you had on the farm?A: We have only had one case so far. We try and keep them close

to the shed.

Q: How much grain are you feeding?A: An average of 4 kg per cow per day.

Q: What is it like to train a cow to use the robots?A: It is very hard work but as soon as they are trained the rewards

of your work will show.

Q: Who services and repairs you machines?A: A qualified Lely technician.

Q: What happens if there is an issue with one of the robots?A: It will alert you via your mobile phone.

Q: Where does the milk go when the silo is washing?A: Into a small storage vessel.

Q: Do you have to feed grain?A: For the best results you should, but the system can work with

very limited amounts.

Q: How many cows can I milk per robot?A: It depends on your production goals, but stocking rates are

generally between 60 and 90 cows per robot.

Q: How often do your cows milk?A: We are averaging 480 to 530 milkings a day for the herd at

present.

Q: What does a normal day consist of?A: Shifting irrigation, measuring dry matter in paddocks,

checking cow records and herd health information from robot computer, make sure all the cows have come in for milking and seasonal tasks like those carried out with conventional dairying.

Q: What is your calving pattern?A: We calve from the 1st of August through to the 1st of January.

This is done in order to fill as much capacity on the robots as possible.

Q: What are your future goals and expectations?A: - 300 to 320 cows milking. - 550 – 600kgs milk solids per annum. - All year round milking maximising robot capacity. - Utilisation of winter housing barns and maximising pasture

grazing.

Frequently Asked Questions at Stradbrook Robotic Dairy Farm

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FARM VISITS - THREE SPRINGS FARM

THREE SPRINGS DAIRIES LTD – High Producing Equity PartnershipWILLY & JEANET LEFERINK, CRAIGE & ROZ McKENZIE and FREDDY & HIELKJE ter BOGT

Sponsored byDAIRY BUSINESS CENTRE (NZ) LIMITED

Three Springs Dairies Ltd is an equity partnership, with three partners.

Craige and Roz Mackenzie, Willy and Jeanet Leferink and Freddy and Hielkje ter Bogt.

The Property is a 220 Ha operation milking 830 cows

Staffing is five full time.

Farm manager is Dale Leigh and his wife Theresa Leigh. With Sandros Alves, Pieter van Leerdam and Rodel Manuel making up the rest of our great team.

The cowshed is a 54 bale rotary with a west falia plant. Cow I.D, cupremovers, auto feeding, drafting and auto teatspray.

Soil types: Hororata and Mayfield

Annual Rainfall: 900 mm

Fully irrigated 3 pivots and 72 sprinklers.

Production:

06/07 356.560 MS

07/08 434.860 MS

08/09 455.000 MS target

Current production:

1.9 ms/cow/day from 770 cows(01-03-’09)

� Do you think your herd could produce more but you are worried that it wouldn’t

be profitable?

� Are you maximising the true potential of your capital investment?

� Would you like to set your profit at the start of the season rather than waiting

to see what falls out of the bottom?

� Are you concerned that your profitability is controlled by the milk companies?

Dairy Business Centre (NZ) Limited 208 Havelock Street, PO Box 29 Ashburton 7740

P +64 03 308 0094 F +64 03 308 0089 E dbcnzl@xtra.co.nz

MANAGEMENT � MILK � MONEY

Discover another way of increasing profitability without driving more costs out of your system

Developing profitable feeding strategies for New Zealand dairy farmers

DAIRY BUSINESS CENTRE (NZ) LIMITED

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FARM VISITS - THREE SPRINGS FARM

WILLY & JEANET LEFERINK, CRAIGE & ROZ McKENZIE and FREDDY & HIELKJE ter BOGT

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FARM VISITS - LAURISTON DAIRIES LTD

LAURISTON DAIRIES LTD – Conversion in Progress and Opportunities with ScaleCRAIG and HELEN ELLIOTT and PARTNERS

Sponsored by

377 Ha 80 Bale Rotary. Single 800mtr Pivot from Groundwater.

Purchased a mixed crop, sheep, deer and bull fattening unit to convert to dairying.

At purchase:

Conversion to be completed by 1st June 2009 for milking due to start in mid July.

2009.

Budgeted Costs of Conversion (10th June 2008)

Cowshed 1,400,000Irrigation/Stockwater 682,000Clearing of Farm 100,000Lanes 150,000Regrassing/Fertiliser 255,000Calf Sheds 85,000Fencing 150,000Housing 1,050,000Plant 250,000Cows (1525@$2400) 3,660,000Land Purchase incl all turborainers 14,310,000

TOTAL 22,092,000

Total cost of conversion is $58,599/ha or $33/kgms with no shares but includes stock and plant.

Operations

Farm will be run by a manager with 5 other staff, including a 2IC then a mix of other abilities.

Target is 1850kg MS/ha from Year One

Majority of cows purchased are Friesian or X-bred with a view to keep it all friesian to suit supplier.

Calving Date 28th July

Grass silage fed out in paddocks, grain fed out in milking shed.

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FARM VISITS - LAURISTON DAIRIES LTD

HUGH JELLIE, DAIRYCONCEPTS LTD, PAUL FITZPATRICK, PFIZER ANIMAL HEALTHAND JENNY MASSEY, HR2GO LTD

Last year at this conference we announced that we were conducting a survey into the issues which compromise performance and productivity in large dairy herds and we asked for volunteers wanting to be involved. This was a collaborative project between dairyconcepts and Pfizer Animal Health and was conducted because of our concerns about the state of large herds dairying.

We’ve now completed all the interviews and first level analysis. Thanks to those of you who participated, we couldn’t have done it without you. For those of you who didn’t participate in the interviews this is how the survey worked.

We established the distribution of large herds in NZ (>700 cows) and targeted to interview about 9% of the large herds with in each of the key large herds regions which included Northland, South Waikato, Manawatu, Canterbuty, Southland and Westland.

Jenny Massey, whose company HR2GO specializes in making business more effective through people, was retained to assist in the development of the questionnaires and in conducting the survey. A separate questionnaire was developed for managers and staff. A data base was developed for recording data during interviews.

Interviews were conducted with the manager and 2 staff members on each of the target farms. Jenny conducted all the interviews to provide continuity from the interview process and not let interviewees hide behind bland answers. This was a massive undertaking and took from April to the end of September. The interview process was formal and confidential. Each person was interviewed separately. The Managers interview was about 1.5 hrs, the staff interviews each about 45 minutes.

After completion of the interviews and analysis, we conducted a road show around the country feeding back the results to participating farms.

The survey had 5 initial objectives:

1. To determine issues within large herd dairying which you feel compromise performance and productivity

2. To develop an understanding of the standard of staff management practiced within the large herd dairy industry and the impact on animals, people, farm productivity and profitability.

3. To determine the reasons why people leave the industry

4. To identify ways to attract new talent (the right people)

5. To explore ways we can improve the public perception of large herd dairying

don’t have time to go through it all here today but I would like to relate the key messages that came from the data.

aren’t great. This doesn’t really come as a surprise, but it is a very important issue for large herds. Most animal problems stem from people problems – a high proportion of animal health conditions can be prevented by better husbandry and better skills. People are the single biggest impactor on animals and you can’t run a large herd without them. And incidentally good people management costs less!

people management practices. 53% of staff interviewed had been on that farm for less than a year. 41% of staff had been in the industry for less than 3 years. This means we have a very inexperienced work force – some animal skills take years to fully develop.

they were thoroughly interviewed and reference checked when they were employed. Nearly 25% of staff interviewed took the job because it was there – they did not make a conscious choice to work in the industry.

lifestyle and money. It’s also the reasons why people come into the industry. We must be getting something wrong here.

to attract and retain talent into the industry. The way we treat people, animals and the environment does matter. It matters to our target employment audience and it matters to our buying market. We need to get better at this. Some people take this seriously whilst others don’t seem to care – this is not good enough.

A SURVEY INTO THE ISSUES WHICH COMPROMISE PERFORMANCE AND PRODUCTIVITY INLARGE DAIRY HERDS AND THE EVOLUTION OF CARING DAIRYING

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HUGH JELLIE, DAIRYCONCEPTS LTD, PAUL FITZPATRICK, PFIZER ANIMAL HEALTHAND JENNY MASSEY, HR2GO LTD

strong and capable leaders, but when pressed didn’t really know what this meant or required.

on the job supervision. This included that provided by AgITO. Are we expecting AgITO to provide some of the basic training that should actually be provided on farm?

on this. Many people are trying to run before they can walk and don’t understand the importance of getting basics right or even what the basics are.

of the herd. Many farms grow in a haphazard unplanned manner around the requirements of increased cow numbers. Infrastructure becomes piecemeal and inadequate. Famers must invest in infrastructure to have successful businesses.

on farms. They have a valuable role to play but there are cultural impacts, language barriers, issues of knowledge retention, training and the questionable value of sending people to AgITO who don’t have a good understanding of English.

operations and need to be set up as such; they require good infrastructure, leadership, management, financials, plans and operations. A good working environment for cows is fundamental to a good large herds business.

A couple of real concerns that have come from the survey:

in regard to people issues. Superficially results from the survey showed that all was well, it wasn’t until we started to drill down into the answers that it became apparent this wasn’t the case.

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enough. Large herd dairying is taken as an excuse for not being able to keep focus on the individual cow. People working in the industry don’t understand the impact their actions have on the animal or in fact the needs of the animals with which they work.

The industry doesn’t realize the costs incurred through the wastage created or the potential benefits from getting this right.

When we started the project we didn’t have an identity for it. As the project evolved and developed a very strong theme began to emerge until a high level frame work became clear.

PEOPLE + ANIMALS + BUSINESS = CARING DAIRYING

So I ask you now – do you care?

What do you care about exactly?

How do you demonstrate that you care?

What is the impact of not caring of not having sufficient skills in one of these main areas: People, Animals or Business?

It is incredibly sad and frightening to see the slipping of standards that we see in large herds. This has got to change – it impacts on the success of our farms, it impacts people, it impacts animals and it impacts on our ability to globally position our NZ dairy industry as the product of choice, alongside our international competitors.

If you are not an owner/operator chose to partner with or work for someone who cares and demonstrates that!

If you are an owner operator – please demonstrate that you care about the right things. Don’t put up with less than acceptable behavior.

Caring Dairying has taken on a life of its own. It is our intention to drive forward with further research and pilot programmes aimed at improving standards, performance and productivity. We have applied for funding and are currently in discussion with DairyNZ to further the recommendations that came out of the original survey.

Large Herds Dairy Farming has the best potential of all industries to lead NZ out of economic difficulties. It is up to all of us to play our part. If you are interested in being involved in some way, perhaps as a pilot farm or just to keep informed of developments, please contact us at the email address or contact me directly.

Many thanks

Hugh Jellie

caringdairying@pfizer.com

hugh@dairyconcepts.co.nz

0274 949 895

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