Dairy News 08 March 2016

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MARCH 8, 2016 ISSUE 352 // www.dairynews.co.nz

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Grass will be back in fashionFORMER FONTERRA director Greg Gent says grass will become fashionable again as the effects of lower dairy prices continue.

The Northland farmer believes this one of the positive consequences of the current crisis.

“Our comparative advantage in the world is grass, and not all dairy farmers moved away from that,” he told Dairy News at the opening of Shang-hai Pengxin’s Central North Island Dairy Academy in Taupo last week.

“There was quite a chunk of farmers who’ve stayed with that straightforward farming system. Moving back to greater use of grass and less reli-ance on supplements will make for a stronger indus-try,” he says.

Gent says in the days when New Zealand was get-ting $US5000 a tonne for milk powder any farm system could work and make money.

But the fallout from the price downturn is now showing, and as a result farmers will probably take a different view of risk management; they will look at how they handle risk and maybe build more resilience into their businesses -- a positive conse-quence.

One concern raised by banks over the years has been the lack of financial literacy of some farmers, but Gent says risk management is a bigger issue.

“You can blame all sorts of things. You can

equally say that banks have had a fairly short cor-porate memory. I would translate financial literacy more as risk management... and if I saw a weakness it would be that,” he says.

Farmers will in time take greater ownership of their budgets, instead of these being largely owned by the banks Gent says. Farmers will get into devel-oping various scenarios and planning for these.

Another former Fonterra director, Colin Armer, says clearer market signals from Fonterra would have been useful for farmers trying to manage through the present difficult times. While the low dairy prices can’t be blamed on Fonterra, clearer sig-

nals would have helped. Armer says restoring profitability to the industry

requires a move back to basics -- volumes of produc-tion coming off farms and the cost of production.

“There will have to be a reset and some costs taken out of the business. We don’t know how long this oversupply situation will last, but in the mean-time people can’t go on banking losses.”

Armer says the present crisis arose from many factors including the Chinese market going off the boil, increased dairy production in Europe and US and trade bans imposed by Russia.

THE $8.40/KGMS payout was probably the worst thing that happened to the dairy industry, says family corporate farmer Trevor Hamilton.

He says in the present era of market volatility and low payouts, farmers need to go and check the balance sheet and really delve into their cost structure.

Hamilton, who has farms in the North and South Islands, says farmers need to

get costs down to about $3.50/kgMS.“My personal view is that if you

average the Fonterra milk price over the last ten years it’s about $6.00. So medium term if you have a sound business at about $6.00 you are probably ok. But if you haven’t, you could well do with an assessment of your business.”

Hamilton says dairy companies such

as Tatua and Westland Milk Products, with a higher percentage of value add products, are more shielded from the volatility of the commodity market. He says while Fonterra does have some value add products, it’s a very small percentage of their business. But he says it’s hard to blame Fonterra for this given that they have to take all the milk produced in NZ.

PAYOUT GOT TOO HIGH – HAMILTON

PETER BURKEpeterb@ruralnews�co�nz

@dairy_news facebook.com/dairynews

Colin Armer (left) and Greg Gent at Shanghai Pengxin’s dairy academy opening last week.


4 // NEWS

NZ loses influence on global prices

NEW ZEALAND appears to have lost its ability to influence global dairy prices, says Rabobank analyst Thomas Bailey.

He says historically when NZ milk production dropped, prices shot up. But not this season: despite analysts forecasting a drop in milk production of up to 10%, prices continued to fall.

Bailey told the Federated Farmers Dairy

council conference in Nelson last month that Rabobank was forecasting NZ milk production to be down at least 5%.

“But prices did not respond; they continued to drop… because they knew they could just go to Europe to get that milk now. NZ appears to have temporarily lost the advantage of influence on prices.”

Bailey says NZ’s inability to influence prices is one of five “tectonic shifts” happening in the dairy industry. Others are the

growth in Europe’s milk production, demand slowdown in China and Russia, low oil prices and growing appetite for value added dairy in the US.

The EU has pumped 9 billion litres of extra milk into the market over the past 24 months -- the equivalent of NZ growing 50%. This has caught everyone off guard.

“The market is completely oversupplied; that’s why we are getting US$1800/t for milk powder.”

On the demand side, China is importing

SUDESH [email protected]

less dairy products and Russia has banned imports from Europe and other western countries.

Added to this is the low oil prices affecting consumer demand for dairy in the oil-rich Middle East and North Africa.

According to Bailey, dairy and oil prices are “about 86% correlated”. “There is a direct relation between oil and dairy when it comes to demand.

“The Middle East and North Africa, huge importers of dairy, and South America, the largest importer of NZ dairy products, are impacted.

“Oil income is down and economies are struggling with a price of US$38 /barrel; we see demand down in Algeria, Nigeria, Iran and Saudi Arabia.”

Bailey says conflicts in the region are adding to dairy’s price woes. But

he expects dairy prices to bounce back before oil prices.

Last week’s latest GDT auction saw the price index up 1.4%, its first rise this year. More importantly, whole milk powder prices rose 5.5% to US$1974/tonne. Skim milk powder was up 1.3% to US$1802/t.

Thomas Bailey, Rabobank analyst.

“Dairy and oil prices are “about 86% correlated”. “There is a direct relation between oil and dairy when it comes to demand.”

– Thomas Bailey

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NEWS // 5

Shangai Pengxin New Zealand president Terry Lee.

No takeover plans despite OIO fears

THE PRESIDENT of Shanghai Pengxin Investments in New Zealand, Terry Lee, says the company’s future investment in the NZ dairy industry is being thwarted by the rules imposed by the Overseas Investment Office (OIO) which approves land purchases by foreigners.

He says the rules need to change and be clearer for investors.

Lee says many people misunderstand Shanghai Pengxin’s investment

intentions; there is no fear of them taking over the country.

“This is a wrong perception about Shanghai Pengxin. There is no other Chinese company coming to NZ and buying dairy arms and we are quite small in percentage terms compared with other investors from Europe, America and Australia.”

Lee says his company is also invested in real estate and hotels in NZ and is keen to build relationships here. The company would expand its interests in dairying or other types of farming if opportunities arose.

PETER [email protected]

“We believe NZ is a modern country with a good legal system and well educated people,” Lee says. “I hope in time NZ people will understand more about Pengxin and more

about our strategy and our contribution to the local economy and society.”

The company’s long term strategy is to seek partnerships and joint ventures.

Milk from Shanghai Pengxin farms are processed by Miraka for China.

El Nino no-show helps Miraka suppliersTHE NO-SHOW of El Nino has been a boon to farm-ers supplying Miraka, the Maori owned dairy company located near Taupo.

Chief executive Richard Wyeth says farmers are doing well for grass, but are challenged by the milk payout. His main concern now is the farmer suppliers and how they are coping.

“Suppliers are doing everything they can that’s in their control. One told me recently that he was looking to strip costs out wherever possible. Obviously they are going to keep farming but they know that the future of the payout is not great short-term so they just need to pull back on expenditure.”

Wyeth says production is down 7% on budget and he expects this trend to continue into next season. It results from farmers reducing cow numbers and feed-ing fewer supplements to cows during the peak.

“Ironically while production for the season is down, we’ve had the highest milk output ever for this time of the year. We’ve had a fantastic summer-autumn. People are still cutting silage which for this area is unheard of.”

Wyeth says there is plenty of evidence that farmers are returning to pasture feeding and are using fewer supplements.

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6 // NEWS

First students busy at dairy academy

A NEW training facility for aspiring dairy farmers and herd and farm man-agers in the central North Island has its first intake of students.

The Central North Island Dairy Academy is a $1.1 million project by Shanghai Pengxin on its Ariki farm on the outskirts of Taupo.

The venture is a col-laboration by Shanghai Pengxin and Landcorp

Farming’s joint venture company, Pengxin NZ Farm Management; it was a condition under which the Chinese company bought the former Crafar farms.

Six men and four women have begun their tuition in the inaugural 32 week live-in programme which combines theory and practical training with onfarm experience.

Teaching staff are from Taratahi Agricultural Training Centre and the practical learning happens on the Ariki dairy farm.

The students are housed on nearby farms.

Graduates will be awarded Massey Universi-ty’s Diploma in Agriculture (Level 5).

The programme is designed to appeal to people with some tech-nical skill or knowledge in dairying. The official opening of the classroom facility was attended by representatives of Shang-hai Pengxin, Landcorp, Taratahi, Massey Univer-sity, and government and industry.

The deal to set up the

academy was negotiated by the former chief exec-utive of Landcorp, Chris Kelly, who is now the chancellor of Massey Uni-versity. He was among the many guests present and says it was great to see the facility finally open.

Pengxin Farm Group chief executive Andy MacLeod says leaders will be needed in the dairy industry to succeed the present cohort of farmers as they retire. He sees the academy as a small step-ping stone for the industry, given that it will produce

only ten graduates when there are 12,000 dairy farms in NZ.

He says good leaders will be needed to manage those farms economi-cally and sustainably; the new facility is the compa-ny’s contribution to the industry to promote young people coming through.

In addition to paying for the building, Shanghai Pengxin is putting in about $350,000 a year to run it. It cost the students nothing

– their tuition, accommo-dation and food are free.

In May 2017, when Landcorp’s contract as the sharemilker for Shang-hai Pengxin ends, it will step aside. But this won’t change anything, McLeod says.

“I guarantee right now Shanghai Pengxin will maintain it. This is not even a question we ask. We should get enough ben-efit out of this if the stu-dents who come here learn

our network and come and work on our farms. The benefits to us and the industry speak for them-selves.”

MacLeod says it would be easy to replicate the facility in the South Island. He would like to work with other industry partners on such a venture.

He likes the way the students get to mix with farm staff and gain an appreciation of what farm life is all about.

PETER [email protected]

LANDCORP CHIEF executive Steve Carden says Landcorp is commit-ted to developing young talent in New Zealand agriculture and the dairy academy will sit beside Landcorp’s other investments in training nationwide.

“There is strong demand for skilled people, particularly in mid-management roles such as herd

or production managers and we’re proud of our involvement in this initiative,” he says.

Though Landcorp’s joint ven-ture with Shanghai Pengxin and the academy will end in May 2017, Landcorp says the students will have opportunities to work on its farms occasionally to gain work experience.

WORK EXPERIENCE PROSPECTS

Jaymee Smith serves tea during the opening last week.

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NEWS // 7

$8kg/MS payout ‘will return’

Mike Petersen

THE WORLD has changed and we need to understand that, says Mike Petersen, special agricul-tural trade envoy.

Nimbleness and agility is the key – both for farm businesses and for the bigger companies.

“I don’t think we understand well enough the level of volatility that will continue for the foreseeable future,” the former Beef + Lamb NZ chairman told an Agcarm conference in Auckland.

Dairy farmers are sick of hearing it, but the future is still bright: the fundamentals are incredi-bly strong, Petersen said.

Finance Minister Bill English had been reported as saying we will never $8/kgMS again. “Well, he is wrong: I guarantee we will. We will see $4/kgMS again as well,” Petersen says. “That’s what’s happening in these markets.”

Market insights and market intelligence will be important in the next 12-24 months, he said.

Food retailers now operate on just-in-time delivery. NZ produces 30% of the cross-border trade in dairy – that will always get hit first and hardest by volatility. Domestic pro-ducers will always be more cushioned.

“We need to build a bit more resilience. I get a bit frustrated with farmers moaning about volatility….

looking for someone else to fix these problems.

“What we don’t do well enough in NZ – as grow-ers and producers – is set ourselves up to be more resilient in the face of this volatility.”

Our country of 4.6 mil-lion produces enough food for 40 million people, Petersen said.

“So we’re not looking to sell food to the masses. We’re looking to target those discerning consum-ers who will pay premium prices for our quality products.”

The world was built on self-sufficiency in food but now, with scarce resources and a lack of water, coun-tries are realising they can’t rely on producing food themselves forever. So the sector will see vola-tile times but also contin-ual upward movement in demand.

Petersen says to suc-ceed in the world we need to be much more nimble and agile than ever before.

“The big companies and corporates are strug-gling with the pace of change happening world-wide. The pace of change is phenomenal.

“Very often the big companies don’t see it coming or when they do it is very hard to react, it is hard for them to turn around, it is hard for them to engage in an intimate way with a lot of the cus-tomers.

“My advice to big com-panies is ‘yes you have a future’. But in my view

you need to start to break yourselves down a bit and get into smaller more agile groups to deal more inti-mately with groups of consumers rather than countries and markets.”

Nimble and agile is the key, he said. Big interna-tional food companies like Tesco and McDon-alds have been challenged in adapting to the pace of change.

PAM [email protected]

FRESH MILK opportunities in China should be explored among consumers there concerned about the quality of their water, say two agricul-tural experts.

Special trade envoy Mike Petersen says only about 10 years ago the dairy industry was saying we shouldn’t be shipping fresh milk or milk with water in it. With freight costs it was more efficient to dry it for shipping around the world.

“But New Zealand’s comparative advantage is water, and food is virtually water, and many coun-tries now are importing food because they don’t have enough water to grow their own,” he says.

“We have to think about this smartly; there are real opportunities for us and people understand that the integrity of food production is important when you get it from a single source.

“In NZ the opportunity for us has to be in fresh products that can contain the water – that is part of the story.”

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NEWS // 9

New plants, more jobsSIXTY NEW dairy process jobs were created when Fonterra opened four plants in the South Island recently.

First came the Mozzarella plant at the Clandeboye site, followed next day by Deputy Prime Minister Bill English opening three plants at the Edendale site in Southland. The three were an anhydrous milk fat plant, a reverse osmosis plant to make the dryers more efficient and a milk protein concentrate plant.

Some 200 people attended -- Fonterra farmers, staff, iwi and central and local government representatives.

Fonterra managing director global operations Robert Spurway said “Investing in dairy processing in towns like Clandeboye and Edendale supports the local dairy workforce, brings opportunities for tradesmen, consultants and contractors and has a flow-on effect for local businesses.”

Leading up to the 60 process

jobs, the projects have also provided work for thousands of people during construction.

Spurway said “While our preference is to fill roles locally, these expansions are also a drawcard for people looking to move in from outside the region, bringing investment in housing and infrastructure.”

These new plants help Fonterra to shift milk into more products that deliver higher returns.

After attending both events, Fonterra director Leonie Guiney said “the site expansions had already contributed to Fonterra’s improved performance in the first quarter of the current financial year”.

“Our new plants enabled our co-op to avoid incurring additional costs at the peak of the current season. We are achieving higher yields and quality, and the flexibility to vary our product mix is enabling us to earn margins above the prevailing market prices.”

Mozzarella miracle plant opensTWO PERCENT isn’t much, but at Fonterra’s Clandeboye site a revolutionary cheese plant only required 2% of the site’s 45ha to rock the cheese world.

After years of hard work, and a huge team effort across Fon-terra, the super-secret plant has cut the mozzarella cheese making process from three months to six hours.

Each day the plant makes enough mozzarella for around 825,000 pizzas -- annually that’s 300 million pizzas!

The plant was officially opened by the Minister for Sci-ence and Innovation Steven Joyce and Minister for Food Safety Jo Goodhew in a function attended by 200 staff, farmers, scientists and dignitaries.

To protect the intellectual

property behind the unique process the opening was held across the road from the plant at the former Clandeboye Pri-mary School.

Marketed as the biggest secret since the 11 herbs and spices, the production process is jealously guarded by Fonterra. Access to the plant is severely restricted, so much so that some co-op senior managers are not allowed inside.

Managing director global operations Robert Spurway says the innovation behind the groundbreaking time reduction is part of Fonterra’s strategy to add value to every drop of milk and therefore to shareholders.

Spurway says this type of innovation is crucial to Fonter-ra’s success and they are spend-ing $80 million per annum on R&D.

The mozzarella plant was a

demand-driven investment, and they succeeded in developing an innovative natural process that has mozzarella ready for export in six hours, which they can adjust to individual customers demands.

Joyce brought a smile to faces when he described his recent run-in with a sex toy at Waitangi Day as “doing his best to market New Zealand glob-

ally”, but said “he still needed to work on his brand message”.

On a more serious note, Joyce said dairying had been in the spotlight for all the wrong reasons; the long-term story is positive for dairying and NZ food has excellent prospects worldwide.

The mozzarella plant came from one of the Government’s primary growth partnerships (PGP) which are designed to increase productivity in the pri-mary sector. Mozzarella is a big part of the Fonterra story and will allow the co-op to uncou-ple from the commodity market, always in ebb and flow.

In highlighting the impor-tance of Clandeboye to the co-op, Fonterra director Leonie Guiney said dairying is worth $3 billion to Canterbury and 18% of NZ cows are milked at Clande-boye.

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10 // NEWS

$20 million gives new life to clapped-out farmsShanghai Pengxin recently showed off its upgrade of the former Crafar farms it bought in the central North Island in 2012. And before attending the opening of the new dairy academy on one farm, guests toured Pineview, a farm on the plateau near Reporoa. Peter Burke was there.

PINEVIEW IS one of 16 farms in the North Island bought by Shang-hai Pengxin. This is one of four farms near Reporoa; the others are in Waikato,

Taranaki and Manawatu. Shanghai Pengxin also owns 13 dairy farms in the South Island.

Visitors were bussed to Pineview and, from under

umbrellas, saw changes made there and on the other farms.

Pineview runs 1130 cows on a 385ha milk-ing platform, producing

461,000kgMS. The irriga-tors were going during our visit but good, unseasonal rain has helped the grass grow well. The farm looks in good shape.

ALL TOLD, Shanghai Pengxin owns 29 farms (16 in the North Island) and runs 30,000 cows on 12,000ha, producing about 19 million kgMS annually.

Landcorp recently gave notice that it would not seek to renew its North Island-farm sharemilking contract with Shanghai Pengxin when it expires in May 2017. The length of notice given by Landcorp is most helpful, says Andy

MacLeod.“Normally we wouldn’t have

been told this until December so we have well over a year to plan that transition.

“The fact is we are already milking 18,000 of the 30,000 cows, and we have good skills at Purata in the South Island where our farms are located and among our staff in the North Island.

“I have told my masters that

we don’t need to own every cow and the share milking model is a good one that’s worked well for years.”

But MacLeod acknowl-edges that the present volatility in the dairy industry makes it hard for sharemilkers. New contracts that take into account such vola-tility may be necessary in future, he says.

‘WE DON’T NEED TO OWN EVERY COW’

Head-ing the tour

party was Terry Lee,

now the man-aging

direc-tor of NZ

Milk and president of

overseas invest-

ment for the Pengxin Group.

Lee told Dairy News of his pride in the farms’ rapid improvement: $20 million of new infrastruc-ture including 300km of fencing, 900 water troughs, 1500 gates, four houses, five effluent ponds and two cowsheds.

“We did everything we could to improve the farms, including improving animal welfare and taking

care of the people who work there.

Shanghai Pengxin NZ Farms chief executive Andy MacLeod.

seen livestock mistreated?

mpi.govt.nz/animal-welfare

$20 million gives new life to clapped-out farms


NEWS // 11

We have achieved a lot with the help of Landcorp, our joint venture partner.

“We see the farm as an asset, but the real asset is the combination of farm and people. Without good management and people the farm is not going to produce to its capacity.

“We want to be a good corporate citizen in New Zealand and the care of people and animals are most important to us,” he says.

Lee came to NZ with his family in 2003 and says he enjoys the clean green nature of the country and the friendliness of the people.

Pengxin NZ Farm Group chief executive Andy MacLeod says the North Island farms were dilapidated when his organisation took them over. (The South Island farms they bought from Synlait in 2014 were much better.)

An immediate, sharp focus on the North Island

farms after the takeover improved animal welfare and staff accommoda-tion. Landcorp, the North Island farm sharemilker, quickly nipped problems in the bud. Now perfor-mance and productivity are trending in a “pleas-ing way”.

Pineview shows some signs of its past -- old water troughs and sheds stand alongside new pur-pose built sheds and fences. There’s a new effluent pond and rotary milking shed.

But, like Lee, MacLeod is people focused.

“It’s very easy to put people in a bus and show them a nice new shed etc. There are four farms up there on the plateau and two are old herringbones and they have a long term future. So it’s not all about new sheds and effluent ponds, it’s really about the people and having good accommodation for the managers and their part-ners who live here. We

need to keep them safe and well.”

MacLeod says the com-pany does not intend to ‘gold plate’ the farms, but rather to bring them up to a profitable and sustain-able level which complies with all rules and regula-tions.

ANTHONY KIFF joined Landcorp immediately after the Crafar farms came into Shanghai Pengxin ownership and Landcorp took over as the sharemilker. He now manages Pineview and says there’s been massive improvements since he arrived.

“When I first came here it was challenging and trying. I spent a lot of hours in the shed due to the poor facilities -- a 64-aside herringbone where you could only cup about 55 cows at a time. We were spending about six and half hours in the morning and at night because of the design.

“Our ac-commodation you could say had eczema because the house was not main-tained and was run down. But after a year they got things back to a good standard.”

Each paddock had only one water trough, now there are two, Kiff says. These upgrades have made a huge difference for him and his staff.

“With the better facilities I’m able to upskill and educate my staff.

“That’s been the biggest bonus for me personally – spending time with the staff and teaching them new skills and not making them into glorified milkers.”

Kiff is a local lad who first worked for Alan Wills, the local Federated Farmers president and a highly respected dairy farmer. Kiff credits Wills with teaching him a lot of the skills he has today, which he is now passing on to his staff.

SHAREMILKERS STAYS, REAPS REWARDS

Anthony Kiff

A new milking shed at Pineview Farm, Reporoa.

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12 // NEWS

One eye on the night sky, the other on his beloved herd

Oxford farmer Stu Parker with his 16-inch telescope he uses to scan the sky for supernovas.

MANY DAIRY farmers might recently have been looking into the night skies for stellar inspira-tion.

That’s just where one North Canterbury dairy farmer goes to relax after a hard day on the farm.

Oxford dairy farmer Stu Parker has 250 cows on his 95ha property, and he has a backyard obser-vatory where he searches the sky looking for Super-novas.

Parker is a part of BOSS -- the Backyard Observa-tory Supernova Search -- and to say he’s good at is

an understatement: he’s only the sixth amateur in the world to have discov-ered a hundred superno-vas, and he’s still searching -- the current tally exceeds 120.

His wife Lynn describes him as a part-time farmer and a professional astron-omer, but it wasn’t always this way.

Dairy News had origi-nally contacted Parker to get his opinion on a Lin-coln University study saying small herd dairy farmers were generally happy with their lot.

Parker had been a large herd farmer in South-land, then he shifted back to North Canterbury to a

small herd six years ago.In Southland the Park-

ers milked 700 cows as contract sharemilkers as well as milking 250 cows on their own farm some distance away. It was full on, Stu racking up 35,000km one year driving between the farms.

At one stage they realised they hadn’t had a day off in three years and Lynn hadn’t left their farm in nine weeks.

After some family members died, the Parkers realised you couldn’t put a price on your sanity and they moved to North Can-terbury.

On bare land near Oxford they started from

scratch, rediscovering life. Saying that he couldn’t

go back to a big herd, Parker finds small herd farming more enjoyable, saying you can truly get to know your cows and have a better quality herd; the couple have excelled at pedigree breeding Frie-sians.

Being a member of Ambreed for 26 years, they were delighted to have a bull accepted by the firm, and they also have a stun-ning line of heifers coming through this year.

Saying that the scale can be difficult, he said “You can’t do anything about the payout so you have to focus on your

farm and your cows; that’s where you can make a dif-ference.”

They recounted that when they were sharemilk-ing the payout was at one stage $3/L, of which they were getting only half.

It’s obvious the Park-ers have a bond with their cows: when it’s milking time many of the cows will come over for a scratch or rub while waiting their turn in the shed.

Parker says some farm-ers will think he’s soft, but when recently faced with a dying cow of 16 years standing on the farm, he opted to have a vet eutha-

nase the animals and he buried her on the farm.

He asks, what’s the point of sending her off to the works and getting $500 for her when she has given many thousands of dollars to the business over those 16 years.

The Parkers have done some big farm things like centre pivot irriga-tion and a winter shed for the 60-odd cows they winter milk. He describes the shed as necessary for maintaining condition in the harsh snowy winters Oxford can experience.

Downsizing has allowed him to have a bit

more of a life; Parker says he’ll step back a bit when the downturn comes right.

Not wanting 100% of their focus to be on the farm is how he expanded his astronomy hobby.

Joining the supernova search has given him a new challenge. A supernova is a star at the end of its life, going out in a huge explo-sion whose after-effects are visible from earth.

With the discovery of his first supernova in 2009, he has gone from strength to strength, recently buying a new 16inch telescope from Italy.

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NEWS // 13

Future lies in exporting premium food – Rowarth

Jacqueline Rowarth

FAILING TO market our products properly is costing us billions, says Jacqueline Rowarth, agri-business professor at the University of Waikato.

Many of our products including dairy occupy ‘premium healthy’ catego-ries, she says, but we are not telling that story suf-ficiently.

“Our farmers have traditionally been more about ‘can we sell our product?’ than ‘we can think about what the market actually wants’. Our companies are begin-ning to move into it but they are taking some time,” she told an Agcarm conference in Auckland.

“Our future is in pre-mium; we have been saying this for some time but we haven’t been tar-geting.”

From 2006 to 2014 the premium category in the supermarkets increased 11.3%. Studies have shown the health aspect is con-sidered the most impor-tant by consumers -- more important than the envi-ronment.

“We know our free range, mostly pasture grown products are higher in omega 3 than the grain fed counterparts. It might be so tiny it doesn’t have

any real health benefits but nevertheless grass-fed organic is being marketed on that basis, command-ing much higher premi-ums -- in the case of milk twice as much at the farm-gate in the US for the organic factor.”

An organic cow in America only has to have access to pasture for 120 days a year.

“We are the third-low-est user of antibiotics in animals in the world., and we have good animal wel-fare,” she says.

‘Health’ labels include low sugar, sugar free, no artificial colours, GM-free, natural flavours, all natu-ral and high in fibre. “But the figures I really like are that 18% of people will pay a premium for GM free or natural,” she says. New Zealand milk and kiwi-fruit, for instance, fit those labels.

“So there’s a whole second wave of conven-tional retailers demanding this natural, organic, GMO free – the emphasis is on farm to table,” she says.

Ethical food allows consumers to feel mor-ally superior and triggers part of their brain to pro-duce seratonin so the food tastes better. The same with eco labelled food: research has shown if you eco label a Big Mac burger but not another, the eco labelled one tastes better

even if they actually taste the same. Eco labelled water tastes better than the others.

“It’s the imagination [that counts], but what have we been doing about capturing the imagination for New Zealand prod-ucts?”

Rowarth said if we go too far down any of these purity tracks we run the risk of dropping the money. This is what hap-pened to premium and organic products during the global financial crisis.

IT IS “daft” that Fonterra has to collect milk, as stipulated by the Dairy Industry Restructuring Act, says Rowarth.

Asked for her opinion on Fonterra versus Tatua, she said that in contrast to Fonterra, Tatua has a 19km radius and is a limited cooperative. It is breaking its components down for added value.

“Another thing Fonterra has to do is supply milk to its competitors for their first three years. Potty, absolutely potty, when there are so many of them and the new competitors are able to do what Tatua has done and pick up in the 12km radius or whatever,” she said.

It’s not economies of scale but economies of geography.

“Poor old Fonterra; I feel sorry for it. But it’s got the completely wrong strategy. Absolutely.

“Its strategy ‘Volume, Value and Velocity’ is not working. [It has 30 billion litres] from six [global] milk hubs, but it can’t sell the 22b L it has now at a price to cover the cost to farm-ers; this defeats them. But it wants to review its governance board to ensure it can lead a 30b L company.

“The money that has gone offshore and isn’t working is just appalling.”

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want higher prices either supply needs to decrease or demand needs to increase, and demand certainly won’t increase by filling supermarket carparks with cowshit.”

Hoggard points out that Euro 850 million in subsidies is being paid to dairy farmers, as reported by the European Commission.

“These production linked subsidies are particularly for those on marginal land, or in areas where dairy is at an economic disadvantage to other land-use types. Yes, apparently if you live in a region where there are higher value uses for your land for, you can get a subsidy to stay dairy farming rather than switch to the higher value land use. Surely this should be the first production to drop by the wayside in the current environment.”

“When, however, 42% of your income comes from support payments, the reality is it influences your decisions and enables you to make different decisions than you would otherwise make. The current increase in supply flies completely against economic logic.”

Hoggard says the current downturn is cyclical and structural.

“The current downturn started due to a standard cyclical event -- low demand from one market, China, together with high levels of supply worldwide. It was then compounded by another cyclical event -- the geopolitical market shock

of the Russian ban on food imports; but holding us down is the underlying structural issue with the global dairy market, i.e. dairy is a highly protected product.”

Only 13% of global dairy consumption is accessible to New Zealand

dairy exporters at tariffs below 10%. These barriers mean only a small volume of global dairy production is traded, Hoggard says.

“Put simply, the liquidity of the global dairy market is constrained, making it more prone to volatility.

And this volatility is then compounded by some large developed country milk producers continuing to use subsidies and supports to shift price risk from their farmers and into the international market -- the market that sets the milk price.”


14 // FEDERATED FARMERS DAIRY COUNCIL CONFERENCE

Subsidies keep milk flowing, defy logic

FEDERATED FARMERS Dairy chairman Andrew Hoggard says subsidies and support payments to farmers are partly responsible for the shock rise in global milk production.

Hoggard told the dairy council conference in Nelson last week that these payments have the effect of insulating farmers from the realities of the world market.

Despite falling milk

prices, global milk production remains strong, particularly in parts of Europe; the extra milk is not helping arrest the decline in prices. Normally, when milk prices drop, farmers cut back production and the drop in supply triggers a price recovery.

However, Hoggard says last year milk production in parts of the world increased substantially.

“The law of supply and demand isn’t some contentious theory that is much debated; there is no debate. It’s straightforward: if you

SUDESH [email protected]

ANDREW HOGGARD says claims that New Zealand dairy farmers are subsidised are false.

He says detractors of the dairy industry like to claim we are subsidised because of the negative externalities of our industry.

“To them I point out that in Europe those farmers get support payments for envi-ronmental issues whereas NZ farmers meet the full cost of those initiatives; the joint Federated Farmers – DairyNZ survey found that in the last

decade NZ farmers had [spent about] $1 billion in environmen-tal initiatives.

“People may also point to the irrigation fund as a subsidy. But when you have to pay it back it’s called a loan not a subsidy.”

Hoggard says he has seen plenty of other comments that NZ increased its production during the last decade, so why can’t others?

“Yes, we increased our pro-duction but we did so based on the economic reality. The mar-ket, through increased prices,

said it wanted more dairy, so we responded with increased production. Right now the market is saying the opposite, and at this stage we have re-sponded and our production is down -- though with all this rain many of you... have received we may not be down by as much as predicted.

“If Europe wants to have a social welfare system for trac-tor driving beneficiaries that’s its business but it becomes our business when that system has distorting and negative effects on world trade.”

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Federated Farmers Dairy vice chairman Chris Lewis (left), Wayne Langford, Golden Bay and Graeme Mackenzie, Southland at the conference.

Fonterra told to lift its game on communicationFONTERRA HAS been told to improve its com-munication with farmer shareholders.

Federated Farmers Dairy chairman Andrew Hoggard told its council conference in Nelson last month that the industry needs to better brand the New Zealand story.

“Our companies need to continue to look to add value, but also better explain how they are doing it,” he says. “At times Fon-terra fills me with hope, and then fills me with doubt. Its communica-tion to farmers on what it is doing, and why, needs to improve dramatically.”

Hoggard says competi-tion for dairy in the global market is getting stronger.

The CAP reforms were aimed at rebalanc-ing in Europe as produc-tion moved to the ‘green belt’ -- to countries such as Ireland. If that occurs, Europe will become more competitive, even without support, and more innova-

tive, Hoggard says.“When your average

herd size is only ten cows, to lift production by 10% only equates to one cow, and there is a very low marginal cost to that.

“So even if we had a level playing field, Europe and others could well be tougher competi-tors than they are now. It means our industry needs to get smarter. We have rested on our laurels to the extent that consum-ers automatically associ-ate NZ products with high standards and safe food. As mentioned, farmers in NZ have invested heavily in environmental initia-tives and animal welfare, and there is a good story to tell on climate change and many other matters.”

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16 // NEWS

FONTERRA IS closing its Kaikoura site with 22 jobs set to go.

Mark Leslie, Director New Zealand Manufacturing, says Fonterra will be dis-cussing the proposal over the coming weeks with the employees, with a decision expected mid-March.

“This is a difficult process for our people and supporting them is our priority as we work through the details,” says Leslie.

“We will be discussing all options and opportunities available to our staff around their future employment, as well as provid-ing the support they need to make decisions should the closure go ahead.”

Fonterra Kaikoura employs 22 full time staff and typically operates between three to five months a year producing a small volume of specialty cheese. Moving this production to other sites would bring significant cost savings for the business and its 10,500 farmer shareholders.

“The proposal to close the Kaikoura site has not been made lightly and is one intended to help generate cost savings for the benefit of all Fonterra farmer sharehold-ers,” says Leslie.

Fonterra to close plant

Young Maori go-getter ‘keeping it humble’THE KEY to getting ahead in dairy-ing, says Tangaroa Walker, is to seize every opportunity and find ways to stand out.

He got this advice early in his career and he’s now passing it on to other aspiring young farmers.

Aged only 26, Walker is a well-respected future leader, having won the inaugural Ahuwhenua Young Maori Farmer Award and the South-land Primary ITO Trainee of the Year in 2012. Entries for this year’s Ahuwhenua competition closed last month.

Walker has agreed to mentor Gen-esis Raroa, a fellow Southlander who wants to move into farm manage-ment.

Primary ITO has facilitated the mentoring arrangement and Walker says he’s looking forward to passing on his knowledge and giving Genesis moral support.

“Winning that competition fast-tracked my career by three years at

least. It’s opened up a lot of oppor-tunities for me and I’m looking forward to helping someone else through the process so they can achieve their own goals.”

Walker, who began milking cows at age 13, says the dairy industry needs more Maori leaders.

“My advice to any Ahuwhenua entrant is that it’s our responsibil-ity, as Maori, to take the opportuni-ties that are out there. We need to be in a position where we can run our own farms and be good role models in business.

“The key to being successful in the dairy industry is to focus on the goals ahead. It can be a struggle moving from a farmhand, to 2IC, then into farm management. It’s tough. You do a lot of work for not much money. But if you have the goal of becoming a contract milker or sharemilker and keep focussed on that, you will get there.”

Walker was offered his dream con-

tract milking job within a week of winning the Ahuwhenua award. This has opened many other doors for him – invitations to speak at schools and on farms and to take part in industry organisations.

“Entering Ahuwhenua opened my eyes. I got to meet so many inspir-ing successful Maori, a lot of whom I’m still in touch with and work-ing with today. I felt very comfort-

able throughout the Ahuwhenua interview. I felt like I could deliver the information to the judges and no-one was looking down on me.”

Walker was recently invited to a KPMG forum for future leaders in the primary sector where partic-ipants were asked to develop a vision for 2025. He is also a member of Pri-mary ITO’s dairy industry partner-ship group helping to shape the future of the industry.

“Plus I’m a member of Venture Southland’s youth taskforce to try to encourage more youngsters to enter the dairy industry.”

Walker believes pushing himself and standing out is the key to getting ahead. And he has more goals.

“I try to keep it humble. I don’t think of myself as a role model yet. I’m looking forward to sitting down with Genesis to help him work out his goals, and to pass on some tips about the Ahuwhenua interview process to help him on his way.”

Tangaroa Walker

www.dairynews.co.nz

BREAKING NEWS MANAGEMENT STORIES MARKETS & TRENDS MACHINERY REVIEWS COMPETITIONS AND MUCH MORE...

Check out our websites


WORLD // 17

Quad bike safety devices are not going down well in Victoria, Australia.Quad safety devices

face backlash

QUAD CRASH injuries and deaths in Australia have prompted Worksafe Victoria (WV) to push the use of crush preven-tion devices (CPDs), but there’s a howl of protest.

WV has declared that crush prevention devices (CPDs) are a good way to mitigate injury in a rollover, and they want employers to fit them if rollover risk is high.

Interestingly, with no law in place requiring CPD use, Worksafe says it will consult for 12-18 months, encouraging employers to fit such a device to miti-gate risk of prosecution in the event of an accident.

But this stance is at odds with quad manu-facturers who cite exten-sive research, including accident modelling for 20 years, that indicate that CPD’s are largely ineffec-tive in saving riders from death or injury, and some-times do more damage than they set out to pre-vent.

The quad makers also say that 99.6% of Austra-lia’s 350,000 quads are ridden without incident, and though the 15 quad deaths in 2015 are regret-table, they are a tiny per-centage of the problem.

They want to see more emphasis on rider train-ing, to ensure operators understand the abilities and limitations of quads, and that quads need more rider ‘input’ than other vehicles.

They also accept that a quad will not always be the best vehicle for a par-ticular job, or difficult ter-rain; instead side-by-side vehicles may be better. These offer the protection of seatbelts and a safety structure over the passen-gers, features impossible on a quad.

Speaking to Dairy News, Worksafe NZ acknowl-edged Worksafe Victoria’s stance on CPDs and the conflicting views of the quad makers. “We’re wait-ing for more detail and the empirical evidence before commenting,” a spokes-person said.

NZ Motor Industry

MARK [email protected]

Association chief execu-tive David Crawford says WV’s proposals are at odds with the reliable sci-ence, and that they con-flict with recent coroners’ inquests in Queensland and NSW: the coroners

had found insufficient evi-dence to recommend the use of CPDs, and they sug-gested that more time and effort should be spent on proving CPDs’ effective-ness.

Crawford says good

operator training, good quality safety gear includ-ing helmets, keeping children off adult sized machines and allowing only solo riders on single-seaters would best tackle the safety problem.

Co-op opens demo farmFONTERRA HAS opened a demonstration and training farm in Sri Lanka.

The farm is part of the co-op’s dairy development programme which supports the growth of sustainable dairy industries in key markets where Fonterra operates.

Prime Minister John Key, Sri Lankan Minister of Sustainable Development & Wildlife Gamini Jayawickrama Perera, and Fonterra chairman John Wilson were guests at the opening.

Sri Lankan dairy farms are typically small, producing around 20L per farm per day; imports fill the supply gap. Anchor is the leading milk powder brand in Sri Lanka and Fonterra collects local milk for its branded business there; most milk is made from powder imported from New Zealand.

Fonterra chairman John Wilson says Fonterra and Anchor have a long history in Sri Lanka.

“Our work to strengthen the Sri Lankan dairy industry helps local dairy communities and it allows us to support the growth of local dairy consumption and continue building our presence in this key market.”

The farm will help Sri Lankan farmers improve milk quality and run their farming businesses more efficiently and profitably.

The demonstration and training farm will train around 2500 small-holder, subsistence farmers every year, sharing the cooperative’s dairy farming knowledge through farmer visits, field days, short course training and apprenticeships.


18 // OPINION

RUMINATING

EDITORIAL

MILKING IT...

IT WAS good to see Shanghai Pengxin open its doors last week and invite dairy industry leaders to hear what the Chinese company has done with the former Crafar farms and to see some of the changes on two of them.

Shanghai Pengxin has been vilified over the years for its strategy of buying farms in New Zealand.

They rightly question the rules and decisions governing the purchase of NZ land and imply the Chinese are treated differently from other nationalities who also buy NZ farms.

Some critics of Chinese land buying pose the question, since Kiwis are prohibited from buying land in China why should Chinese nationals be allowed to buy land here?Maybe there is some validity to that, but would a long term leasing arrangement address this issue?

Some Kiwis seem to think the Chinese, in particular Shanghai Pengxin, will somehow take over Aotearoa, making us tenants in our own country. The critics fear something insidious in China’s buying ‘spree’.

But we don’t hear of such angst when a wealthy opptortunist Israeli, Australian, Brit or American buys a bit of NZ. With Donald Trump attracting huge support in the US presidential race one has to wonder whether NZ has more to fear from the US than from China.

In fact, Shanghai Pengxin has done a lot of good for the NZ dairy industry. It has brought up to standard 16 dairy farms that clearly needed massive cash injection. $20 million has been spent on the farms and that money has gone to local suppliers. Surely that’s good news.

Shanghai Pengxin has worked well with its joint venture partner Landcorp to manage these farms to achieve their potential. And they have entered another joint venture with the Maori dairy company Miraka to produce UHT milk for the Chinese market. This has created many well paid jobs for NZers.

As part of its deal with the OIO, Shanghai Pengxin last week opened a $1 million academy to train future leaders.

The programme is fully funded by Pengxin NZ Farm Management so attendance is free for all participating students; it will also award annual ‘Theland’ scholarships worth $10,000

Shanghai Pengxin can rightly feel aggrieved at the way it is sometimes dismissed as being bad for NZ. The reality is quite the opposite and perhaps the critics need to get out of their glasshouses in the cities and see the reality in the country.

What’s our problem with the Chinese?

Toying with a new brandTHERE WAS collective shuffling of feet and eyes downward when Arow-henua marae kaumatua Tawera King warned peo-ple not to throw anything at Minister Steven Joyce while he was opening Fon-terra’s Mozzarella plant at Clandeboye.

King said since he would be standing next to Joyce he didn’t want to get hit and be be called a dickhead. Joyce was hit on the face with a dildo hurled by a protester at Waitangi Day.

Much to the relief of those attending, Minister Joyce took it in his stride, saying with a smile that he had been “doing his best to market New Zealand globally lately” but he “needed some work on his brand message”.

Politicians eye the main chanceNORMALLY THE North-land Field Days are a low key affair, visited by the Primary Industries Minister and an occasional politi-cian.

But last week, it was different: Science and Innovation Minister and National Party strategist Steven Joyce popped in. So did Opposition leader Andrew Little and North-land’s sitting MP Winston Peters.

With a general election looming next year, Na-tional will be keen to wrest the seat back from Peters.

Fit to breed betterFITNESS TRACKER devices have a worldwide following; now there’s one for cows, by the Japan tech giant Fujitsu, to boost their breeding efficiency.

The estrus detection system for cattle (EDSC) determines exactly when cows are biologically primed for artificial in-semination, reports Digital Trends.

Smarter breeding and birthing are the aims. They consist of a wear-able cattle pedometer and a stationary receiver to process tracked data.

The data collected by the receiver is sent to the Microsoft Azure cloud, from where EDSC automatically sends the feedback to a computer or laptop. This gives cattle owners access to loads of valuable information about the livestock, such as timing for early concep-tion and predicted due dates.

No truck with TrumpUS DAIRY farmers are being caught up in the US primaries.

Building a wall on the border with Mexico and deporting all undocu-mented immigrants has become an applause line at Donald Trump’s rallies and the main policy idea for the GOP front-runner.

But Trump’s promise has sparked fear and frustration among farmers who, like it or not, depend on immigrant labor.

“I’m angry,” says dairy farmer Mike McMahon, who owns 700 cows in upstate New York, now the third-largest dairy produc-ing state and the biggest producer of Greek-style yogurt in the country.

“For someone like Trump or Cruz to say they are going to send them all back is short-sighted because so much of our food supply is dependent on their labor,” he says.

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OPINION // 19

Bulk, boutique go together

IT’S NO exaggeration to say it’s been a challenging season.

We’ve seen a fun-damental imbalance in global supply and demand, driven by the lifting of pro-duction quotas in Europe and ongoing Russian trade sanctions, pushing more product onto the market.

The Middle East was a major destination for cheese, but imports have fallen this season because of low oil prices.

China’s economy has softened, and last year global dairy prices hit their lowest levels in over a decade.

Locally, a prolonged El Nino has seen Australia enter a period of drought, and as production costs have increased, milk col-lection has dropped.

At Fonterra Australia we’ve encountered chal-lenges with a fire at our Stanhope plant in Decem-ber 2014.

Milk that would ordi-narily be going into high value cheese is instead going into skim milk powder.

The key to tackling these challenges is having the right strategy. Rather than trying to do it all, pro-cessors need to focus on their strengths.

Fonterra has global scale, and we are able to leverage that scale to focus on areas where we have a comparative advantage.

In New Zealand, we can produce commodity powders more efficiently than anywhere else in the world. A number of our NZ sites are capable of producing at least 1000 tonnes of powders every day.

Compare this with our largest powder site in Aus-tralia, Darnum, which can produce a maximum of 300 tonnes of powder a day running at full capac-ity.

There is no sense in replicating what we have in NZ here in Australia. We need to focus on our strengths, which is why our focus is on higher value-added products – cheese, whey and nutri-tionals, complementing our retail and foodservice businesses.

Milk costs more to

make in Australia, so we need to squeeze value out of every drop to gener-ate sustainable returns. Cheese, whey, and nutri-tionals deliver on that investment. We can make these products efficiently, and generate a higher return.

Our A$120 million investment to rebuild our cheese capability at Stan-hope is central to this strategy.

Whey and skim from cheese production will go into our nutritionals at Darnum and Denning-ton, so we won’t be wast-ing a drop.

It will complement our consumer retail and food-service businesses, with the fats from milk produc-tion at Cobden going into Western Star butter.

The Australian market is ideally placed to concen-trate on value-added prod-ucts; however it doesn’t mean focussing exclu-sively on boutique prod-ucts and ignoring bulk.

Bulk to boutique is not an either/or prospect. We can leverage our presence in bulk to expand into boutique, de-risking our investment.

On the bulk side, Fon-terra’s joint venture between our Darnum site and Chinese food manu-facturer Beingmate con-nects us to 80,000 points of sale in China.

Beingmate is one of China’s largest infant for-mula companies, and we’ve bought a 20% stake in the business, setting up a distribution channel that will reach millions of Chi-nese families. It allows us to reach Chinese consum-ers directly and efficiently, delivering a high-value, high-quality product.

We’ve been able to parlay that into the bou-tique.

We’ve made an agree-ment with boutique infant formula producer Bel-lamy’s Organic, utilising our manufacturing exper-tise to create their pre-mium product. Because we can do bulk and do it well, it gave Bellamy’s the confidence that we could deliver on boutique.

We’ve just launched Anchor Milk into Australia – it’s a boutique product

Fonterra Australia commercial director Abhy Maharaj recently addressed the Australian Dairy Conference in Victoria. Here are excerpts from his speech.

aimed at the more discern-ing milk drinker.

We know Australia is a crowded marketplace for milk, with over a dozen brands on the market. We’re all looking for that edge to differentiate our-

selves from every other milk in the dairy case.

Anchor uses microfil-tration to create a superior fresh taste, with a longer shelf-life, and is a first for the Australian market.

Anchor complements the milk we’re processing on behalf of Woolworths for their private label.

Boutique is not the

panacea for current global dairy challenges – at least, not on its own.

It has a place in the market, but to be globally relevant, we need to have the bulk as well as the bou-tique.

For companies like Fonterra, bulk is our bread and butter, but boutique is the cream on top. Abhy Maharaj

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20 // AGRIBUSINESS

Former Fonterra chairman Henry van der Heyden spoke at the Australian Dairy Conference last month.

Strong governance critical to successLEADERSHIP THROUGH strong gover-nance is critical for farm-ers, and the sector more broadly, if the dairy indus-try is to seize the oppor-tunities of the decades ahead.

That was the message from Rabobank director and former Fonterra chair Sir Henry van der Heyden to the delegates at this year’s Australian Dairy Conference.

A fourth genera-tion dairy farmer, van der Heyden and his wife started out as a share-farmers and have grown the business to have dairy investments in New Zea-land’s North and South Islands, and in the US and South America.

“Governance is about creating shareholder value through growth,” he said. “I’m only involved in busi-nesses where I can pull that lever for growth; it’s an important part of the value creation chain.”

Van der Heyden says the Australian and NZ dairy industries can no longer rest on their natu-ral advantages, and though there are huge opportuni-ties the landscape is highly competitive.

“Consumers want a Rolls Royce but only want to pay for a Skoda,” he says. “We have to deliver more and more, cheaper and cheaper and at the same time try to create value.

“We are being squeezed: we cannot stand still, we cannot do the same... We have to pro-duce more, produce it better, at a higher quality, with lower inputs of time,

resources and costs.”He said leadership,

including at farm level, was the key to meeting this challenge. “The first part of successful leader-ship is lifting governance,” he said.

Sound business man-agement, and account-ability to a board, was important if farm busi-nesses were to maximise value and grow.

“Having a board and a three-five year plan keeps the banks happy and can save money and minimise risk.”

He said a board should be made up of people already success-ful and truly able to chal-lenge what you are doing onfarm.

“You need people at a strategic level to bring their knowledge and expe-rience to the business. It may be monthly, it may only be quarterly, but this can give you ideas, energy and momentum to drive your business.”

He said boards could add value by looking to the bigger picture and focussing on business objectives; separating gov-ernance from representa-tion is the key.

“There’s always a blur when you sit on a coopera-tive board: are you there as a governor or are you there representing farmers?

“One of the best inno-vations when we formed Fonterra was to separate those two roles. So much value got created in that separation alone.

“When you are on the board as a governor your focus has to be much more on the global marketplace,

while the shareholder councillors represent the voice of the farmers.”

He says diversity of opinion, background, age and gender were also criti-cal to creating successful leadership. “You cannot dismiss capability, but

gender and diversity are very important.”

Van der Heyden also highlighted Rabobank’s executive development programme as a valuable tool for farmers to develop their business manage-ment skills.

■ An annual budget you own

■ Report against your budget at least quarterly

■ A 3-5 year business plan (strategic goals, what does it look like)

■ A succession plan

■ Some form of governance (board) over your business.

On leadership: ■ A vision and a strategy

■ A robust governance framework in place

■ Understand the end customer

■ Set out new ideas and innovations. Learn from others

■ Use technology to help reduce input costs.

WINNING RECIPE ON STRONG GOVERNANCE

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AGRIBUSINESS // 21

Change dairy systems to lift returnsBY 2025 the New Zea-land dairy industry could be emitting 25% less greenhouse gases, 40% fewer pathogens and nitrogen, and earning 60-100% more profit. It will be an industry that can pride itself on being the “farmers’ market for the global village”.

This is the hope held by

veterinarian and agri-ecol-ogy consultant Dr Alison Dewes, and she gave del-egates at a recent seminar sponsored by Sollus NZ an insight into the chal-lenges the industry faces in achieving that.

Drawing upon her experience as a farmer, veterinarian and consult-ing expert witness for

regional councils, Dewes said the dairy industry had to ask itself how much more it could intensify.

She pointed to predic-tions that schemes such as the Central Plains Water irrigation scheme in Can-terbury would result in a 29% increase in nitrogen in waterways. Thirty per-cent of the region’s shal-

low wells had already experienced an increase in nitrogen and pathogen levels within 10-15 years of irrigation on shallow lighter soils.

“And out of 99 sites monitored in Canterbury, 42% show the presence of faecal material and are classed as risky for swim-ming.”

However she also cau-tioned there is a risk things will get worse before they get better. She pointed to a proposed gov-ernment review of water quality standards that could see the ‘bottom line’ level of coliform in water increase 400%.

There was also growing conflict between estab-

lished long term farmers in Waikato who may have to reduce their nitro-gen losses by 30% where thousands of hectares of new pine to dairy con-versions continue to occur. This was to counter the addi-tional 30,000ha of converted land that has come on-stream in the last few years, and that was in addi-tion to the 29,000ha con-verted between 2003-12.

Dewes says farmers were receiving mixed mes-sages from Government and councils on how to manage nitrogen reduc-tions. As the subject of NZ’s first nutrient mitiga-tion scheme, Lake Taupo had used ‘grand-parent-ing’ of rights to nitrogen losses. But this was a very defined catchment.

“And such an approach tends to reward polluters and penalise innovators. It is not a fair way to allo-cate polluter rights, and regional councils are weak at enforcing them.”

She urged farmers to push harder for greater investment in Overseer, the only tool available at present capable of calcu-lating nutrient losses.

“Given our national reliance upon it, the real-ity is it needs significant investment and increased transparency as to how it works, now.”

She pointed to some regions showing prom-ising signs in developing realistic means of manag-ing nutrient losses. This included Hawke’s Bay region, using land use clas-sification for determining acceptable nutrient losses within a farm’s boundar-ies.

Given how hard much of lowland NZ’s pasto-ral systems were already working, Dewes chal-lenged Fonterra’s chief executive Theo Spierings, who insists that NZ has the potential to continue expanding over the next decade.

Spieirings stated in October 2014 that 60% of expansion would be based on conversions and more cows, and 40% on more productivity. He disagreed with the Envi-ronment Commission-er’s comments that more dairying means a drop in

water quality, and said he believed NZ dairying could grow for the next 10 years by 2-3% a year.

Dewes anticipates future efficiency mea-surements were likely to see farm production mea-sured in kgMS/ha versus kg of nitrogen leached.

She has worked with farmers achieving a 6-8% return on investment who are only losing 20-25kg nitrogen/ha, against the Waikato average of 40kg/ha.

“We have a lot of farm systems running 20% or more cows than optimal.”

This meant the average 350 cow dairy farm could lose 80-100 cows imme-diately.

“But this will be unique to each farm, so needs considered marginal analysis that balances resources, capability and cows.

“We are starting to see two herds develop on farms, a marginal herd – where costs to run those cows costs more than they return -- and a profitable herd that is sustained by the natural capability of the system.”

Changes to make NZ dairying the first stop for higher value boutique con-sumers would revolve around a lower intensity system.

“It is likely we will see more varied forages, including assorted herbs and grass alternatives to ryegrass, enhancing more productive/profitable cows in an optimal state of wellbeing to ensure more milk from fewer cows.

“We could also have more calves reared for alternative revenue, less support land required, un-productive land retired, coupled with closed loop nutrient cycles, coupled with pathogen [bug] loads intercepted before they reach waterways.”

Vet Dr Alison Dewes

Contains SustaiN

To maximise pasture growth on the shoulders of the season call your Ballance Nutrient Specialist, call 0800 222 090 or visit sustaingain.co.nz

Spread the wordPhaSedN is a unique formulation of SustaiN, fi ne elemental sulphur and lime in one granule that grows more pasture both sides of winter. The nitrogen provides an immediate boost and by being retained in the soil over winter the fi ne elemental sulphur slowly releases to support early spring pasture growth.


22 // MANAGEMENT

Low-cost winter or spring feed in a hurryTHE APPLICATION of Gibberellic acid, particularly in winter or spring, is a good way to produce low cost feed in a hurry, a Northland study has shown.

However, count on there being a ‘post Gib’ depression period during which you lose some or all of what you gain. But you can work around that to get the boost when you need it, say a scientist and a farmer involved in the study.

The onfarm benefits of using Gibberellic acid (GA) were greater than the trial results really showed (see sidebar),

said Kerry Chestnut, a NARF (Northland Agricultural Research Farm) representative and local farmer. He was speaking at the Northland Dairy Development Trust annual meeting.

Chris Boom, the NARF science manager, said GA is a tool for growing extra grass in winter and spring. They had used GA at the NARF farm for some years and there have been questions about its value, responses and when best to apply it. The questions were “just sitting there” so they initiated trial work.

“GA is a growth hormone that occurs naturally in plants. By applying it we are tricking the plant into thinking it should go into a high

growth phase,” he said.“It increases the

growth rate for a short period and it is a low cost product. When this product first came out back in the 1950s and 60s and 70s it was expensive. Now it is very low cost -- $13/ha for the product. You then have to apply it.” The extra cost depends on how you apply it and what you mix it with.

“We were asking questions about the responses on Northland pastures…. when are we best to apply it?what about multiple applications? Most of the research work had been on single applications and very little on multiple applications.” All other research work had been done further south, not in Northland.

NARF did two trials – 2014 and last year. In the 2014 trial they found GA responds best when applied with nitrogen. If you are applying GA on its own without nitrogen you are likely to deplete the nitrogen reserves and they observed a massive post GA depression.

They tried it with both granular and liquid nitrogen and found no difference in response, so concluded you just use


whatever suits best. They found that July application of GA gives the best response. Responses on multiple applications were unreliable.

In the trial in winter 2015, treatments were replicated five times. There was a control treatment with no nitrogen and no GA applied at all. They applied another control treatment where nitrogen alone was applied five times from July to October.

The GA plots had

TRIAL RESULTS❱❱ Reliable initial responses to Gib in all

application periods❱❱ Low cost feed in a hurry❱❱ Most or all of that response is lost in the

post Gib depression❱❱ Repeat applications delay that post Gib

depression ❱❱ July gave the greatest single response.❱❱ The greatest overall response was

when they gave two applications – in July and September.

WITH GIBBERELLIC acid (GA) grass can be grown for 2-3c/kgDM and there is no product anywhere available to farmers that comes close to that, says Kerry Chestnut.

While GA will usually have a post-Gib depres-sion period, it can be applied strategically at peak periods when it will have least overall effect. Meanwhile you can boost growth when you most need it, in winter or early spring, Chestnut said.

“I have looked at my farm: how I can grow grass with this and try to avoid this post GA depression and try to get the most out of this product,” he said.

Often at the start of winter he did not have enough grass.

“In June we’re looking at 2100kg average pasture cover. We’re 300kg short of our target. If we put one application of GA with our nitrogen, we have seen with our trial work that will grow us an extra 500kg of grass. If we just did half the farm that would be 250kg; that gets us up

to 2350kg, or [an extra] 500kg gets us up to 2600kg.

“So it has a huge impact of increasing feed cover. What we’ve heard from our responses is over the next two-three months we lose much or all of the extra grass that we’ve grown from the GA. But if we’re short of feed cover at the beginning of winter, we need to get our average cover up. It is one product that can do that; wet or dry it just seems the grass jumps out of the ground and it seems to work really well.”

At the NARF farm they are measuring growth on plots. But Chestnut believes there are a lot more benefits to GA than just growing extra feed then losing it two months later.

“If you grow more pasture at an initial cost 2-3c through July-September you come to post GA depression in October and November.

“If we grow 200-300kg less grass through this period and take some pasture cover off the peak, does that really matter? Most farms have surplus grass at that time, silage is good for summer but it is also difficult to manage at times as well.

“Remember this feed is 2-3c/kgDM; multiple applications will lift that cost a little but you are still only looking at 6-7c so it is incredibly cheap feed.”

Through late June-July paddocks can be slightly overgrazed and a little pugged, down to that 1100-1300kg and take forever to come away again, Chestnut said.

In three-four weeks they hardly grow at all – maybe 5-10kg a day. With the GA, four-five days after application it “just seems to jump the pas-ture out and gets it going. It has a huge impact”.

“What I have seen onfarm is that we are achieving far better results than on the plots at NARF,” he said.

This coming winter they will look at applica-tion rates. In the past they have said they needed 50-100L of water so they needed a tractor and spray unit or a trailer behind a quad to apply the GA. In Northland wet soils and paddocks that can be a problem. It has been a big hindrance to the more wholesale use of GA.

“There’s been anecdotal evidence from Waikato that they are putting it on with motor-bikes now at rates as low as 20L/ha.

“We will do some work this winter because if it can be put on with a motorbike at low rates that makes it a tool for more farms.”

A TOOL FOR MORE FARMS

Farmer and NARF representative Kerry Chestnut.

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MANAGEMENT // 23

Gibberellic acid is a tool for growing extra grass in winter and spring.

Low-cost winter or spring feed in a hurry

applications at different times and a different number of times but all had the same nitrogen on them.

All the GA treatments included a high regime of nitrogen inputs. They had three different application months (July, August and September) and a combination of those three months, and one which was three application times – July, August and September.

The plot trials last year were run on relatively young ryegrass pasture at NARF.

A boom occurred where they applied nitrogen to the nitrogen-only plot – they grew a heap more grass in response. There was almost 3 tonnes of extra feed on the nitrogen-treated plot over the winter-spring compared to the control-treatment plot.

All the GA treatments were compared against the nitrogen-only treatment. When GA was applied in July we got an immediate response of 600kg DM, Boom says.

“We harvested 600kg at the next harvest which was four weeks after application. That is pretty massive – that’s our initial response. In the next harvest period we had a post-GA depression – a lower rate of pasture growth on our GA treatment than we had on

nitrogen treatment. This is what we call our ‘post-Gib depression’.

“We got a massive response to GA then we lost some of that DM in our post GA period – about half.”

With the August application they had a 400kg DM response to GA and lost all that in the post-Gib period. In September they got a 450kg response and lost some of that.

“We found reliable immediate responses of 400-600kg DM for each Gib application; if you look at that alone it is a very low cost DM – 2-3c/kgDM plus application costs. But some of that response, if not all of it, we lost again in the post GA depression period.”

Multiple applications were made in July and August (July response was 600kg) and if they applied a second application in August it offset the post Gib period. The July-only application had dropped below the nitrogen-only treatment during September. A second application delayed the post-Gib depression into October.

The same thing happened when they applied it in July and September (applications were eight weeks apart): they got a good response from the July application but post Gib depression depleted some of that

response; they gave another application, had another response to GA and they lost some of that again. This treatment grew about 500kg more feed overall with the GA compared to the nitrogen-only treatment over the whole period.

Looking at three applications in July, August and September – the initial response was great, and the second and third applications delayed the post Gib depressions. The post Gib depression didn’t occur until October.

NARF science manager Chris Boom.

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THIS SEASON is a peak time for farm-to-farm spread of the pest plant yellow bristle grass.

Waikato Regional Council advises pre-venting its spread by avoiding grazing stock or making hay from vegetation growing on roadside verges.

“Bristle grass can take over farm paddocks and damage the prof-itability of dairying, so avoiding its spread will help support produc-tivity,” says pest plants officer Darion Embling.

Yellow bristle grass is a summer-growing plant with distinctive, cylindrical seedheads with many yellow-tinged bristles.

Seeds can spread

along roadsides via mowers and other mechanical means, and in freshly chopped maize silage being moved around. If it takes hold on the road-side it can quickly move into farm land, says Embling.

“Yellow bristle grass seeds also pass through animals after being eaten and is spread around farm in dung.”

Studies have shown that dairy farms infested by the plant can lose 13% of dry matter pro-duction.

Embling says to help stop the spread of yellow bristle grass:

■ Ensure all imported maize chopped for silage gets into the pit and that loose

debris is not spread along the access way and into adjacent pasture

■ Inspect all incom-ing hay and machin-ery unless the source is known to be free of

yellow bristle grass ■ Restrict the feed-

out of infested hay to areas where yellow bristle grass can be readily controlled

■ Check that stock being brought in

from outside the farm during summer have not grazed yellow bristle grass infested pasture.www.dairynz.co.nz/

feed/pasture/pests/yellow-bristle-grass/

24 // MANAGEMENT

A HEIFER rearing field day in Central Hawke’s Bay next week will provide farmers and graziers with information to help ensure young stock continue to meet target weights through the summer and autumn.

The field day on March 15 will be held at Craig and Graham Anderson’s farm near Waipukurau. The Andersons run a mixed business with heifers, winter cows, cropping, hogget grazing and some beef across four blocks totalling 1600ha.

DairyNZ consulting officer Scott Cameron says the field day will focus on helping farmers manage through dry periods with a view to setting up for next season.

“Summer can be quite extreme in Central Hawke’s Bay. The timing and location of the field day was planned so farmers can see how the Anderson’s manage through dry weather,” says Cameron.

“Autumn is often the most challenging season to grow

heifers due to low pasture growth rates and peak animal demand. To cover all bases we’ll look at ‘what-if ’ scenarios and strategies that can be put in place to ensure target weights that are set out in grazing contracts are met.

“The Andersons run 1200 heifers and 820 weaners with no irrigation, so careful planning is needed to reduce the impact of summer dry – that plan will be discussed at the field day.”

Cameron says as well as talking through the Anderson’s plans, the field day will provide an update on the region’s heifer grazing focus farm near Marton, owned by Andy Stewart.

“To date we have run four field days hosted by Andy. These have covered a wide range of topics as we have tracked the animals from weaners in December through to in-calf heifers in May when they leave the farm,” he says.

A final focus farm field day will be held at Andy’s farm in May.

Focus on heifersSummer threatens spread of yellow bristle grass

Yellow bristle grass.

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MANAGEMENT // 25

Winning the contest was a bonusTE PAHU farmer Noldy Rust entered a pasture competition late last year only because the organis-ers were looking for more entries.

As chairman of Smaller Milk and Supply Herds, he was asked at a SMASH conference to urge mem-bers to enter the pas-ture renewal persistence competition, run by the DairyNZ-led pasture renewal leadership group.

Rust also entered the competition and won the best pasture more than three years old, picking up $1500 of grass seeds and

pasture renewal products.Last month Rust

hosted farmers to talk about his winning pad-dock, a 10-year-old mix of Alto and Arrow ryegrass.

He told Dairy News his main aim in entering was to give his new farm worker exposure to the judges.

“When the judges came to inspect our paddock I picked a good one that I knew was always grow-ing well,” he says. “When I knew I had won, it was pretty humbling.”

Rust told farmers at the field day that he was not doing anything dif-ferent from them. “I told them they all have pad-docks which could have won; we just happened to enter the competition and had a good paddock that lasted well for a number of reasons.”

Rust and his wife Bev bought the 52ha eff farm in 1996. For the first 10 years they ran it as a low input system; only a small amount of baleage was bought in each year and heifers were grazed off-farm.

The farm ran 170 cows at 3.3 cows/ha and aver-aged 60,000kgMS, equiv-alent to 1165kgMS/ha or 353kgMS/cow.

Rust says after 10 years

they decided they needed another challenge. “We got as far as we could with system 1 so we thought of building a feed pad and importing maize.

“The idea was to lift cow numbers to 200 and gain more profit.”

In 2006 they increased stock numbers to 200 cows and bought maize silage and PKE; they also built a feed pad.

For the next five years the farm averaged 75,500kgMS -- 1466kgMS/ha or 378kgMS/cow.

In 2011 they bought a 24ha runoff in partnership

with another farmer. This is used for growing maize silage which is brought back to the milking plat-form. The farm now aver-ages 90,000kgMS with 200 cows, taking its per ha yield to 1750kgMS/ha or 450 kgMS/cow.

Despite home grown maize silage and con-tracted PKE making half of the total feed, pasture remains king for Rust -- feed conversion efficiency utilising grass.

“We use supplements only when pasture runs out; we are not substitut-ing grass. To do this we must have good paddocks; good pasture management requires dense sward and proper residuals. We do this with a high stock-ing rate, by avoiding both overgrazing and pugging.”

Rust follows a sound grazing management plan. In the summer, morn-ing milking is finished by 7am. Cows stay in the pad-dock until noon and then move to the feedpad. After they have finished at the feedpad they move to the standoff paddock under the trees.

If it is still dry and the hot months have finished, cows will stand off in next season’s maize paddocks, he says.

“As soon as the autumn

rains arrive the cows go out to a 70 day rotation for three weeks to allow average pasture cover to increase, then onto normal autumn rotation lengths.”

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26 // ANIMAL HEALTH

A COROMANDEL conservation group is urging peninsula residents to take advantage of a new funding option to support individuals work-ing independently on killing animal pests on their properties.

The Upper Coromandel Land-care Association (UCLA) is cam-paigning to draw attention to recent changes to Waikato Regional Coun-cil’s small-scale community ini-tiatives fund, which is part of the council’s natural heritage pro-gramme.

The council’s funding policy now includes one-off grants for individu-als, in addition to organised commu-nity groups. Clarification of funding policy reveals that grants are avail-able for work on uncovenanted, as

well as covenanted properties. The regional council fund sup-

ports purchase of materials such as traps and bait stations. Grants are capped at $5000 per application, of which up to $1000 may be for con-tracted services.

UCLA spokeperson Reihana Robinson, who advocated as rep-resentative on WRC’s Coroman-del catchment committee for the changes to the council’s funding policy, says the funding option for individuals on uncovenanted land is a big step forward for protecting vast additional areas of bush on the peninsula.

“Many Coromandel residents have been working independently, off their own bat and in their own

time and at their own expense, to protect and enhance our ecosystems and natural environment. These conservationists deserve the same financial support from council that is afforded to groups and incorpo-rated societies,” Robinson said.

“As for extending grants to work on uncovenanted properties, most stoats and rats I’ve met don’t stop to check the LIM report on a bush block before killing a nestling. All our bush heritage merits the same protection and support.”

Applications are now being accepted by WRC until March 21. The application form is download-able from the regional council web-site or can be requested from Dave Byers at WRC in Hamilton.

Cash support for pest killers

Calcium’s value boosted by supplementAN ANIMAL nutritionist is urging farmers to look deeper than body condition score (BCS) for a true understanding of their cows’ skeletons in assessing their health.

Factors underlying BCS must be understood, says Dr Joe McGrath, ruminant technical

manager for Dutch nutrition company DSM. These will determine how long a cow will remain in a milking herd, McGrath says.

“That comes down to calcium, the key mineral that drives the mineral bus, yet not talked about as much as it needs to be, given how cheap and

easily available it is,” he says.

While working as senior lecturer in ruminant nutrition at the University of New England, McGrath researched the critical relationship between ruminant calcium levels and health.

“What is forgotten is

that cows milk off their calcium rich skeletons, just like they milk off their backs. The problem is, that loss in their skeleton is impossible to see, and difficult to measure.”

Even when she is optimally fed, a cow will be in a calcium deficit for six-nine weeks post calving, typically losing skeletal mass post calving, and regaining some of it back over the late lactation-dry period.

“If calcium is the building block of skeleton structure, then it also requires phosphorous as the ‘mortar’. Basically, you need both in order to rebuild a skeleton successfully.”

But absorption of calcium provided in her diet requires adequate levels of vitamin D, sourced from the sun.

However her vitamin D levels will be lowest over late winter spring, the same time her calcium demand is greatest, and stress levels highest.

Typically a cow’s calcium levels in her skeleton will decline over time, and as she gets older each lactation risks leaving her with lower levels.

“A dead cow costs you nothing; it is the cows that have sub-clinical

hypocalcaemia, often up to 50% of a herd, that cost you. This is linked to metritis, infertility, mastitis and assorted health issues.”

A hypocalcaemic cow will typically end up in a downward health spiral, as her rumen slows down, she eats less, digests less, loses energy and has less immunity to infection and disease.

McGrath cautions while the skeleton is the cow’s reservoir for calcium, she cannot be force fed calcium to top it up, requiring instead a constant “trickle” to maintain bone health.

Published data indicate that during early lactation a cow can lose between 0.3kg-1.5kg of calcium from her bone structure.

But her ability to get optimal levels of calcium and phosphorous out of the grass is compromised by modern grazing systems where she will harvest that grass at 22-25 days of growth.

“But a grass sward’s ideal nutrient profile develops at about day 30-35 so that imbalance can’t be made up by what

she is taking in as pasture alone.”

The implications for lactating dairy cows over several years is their calcium levels will decline, ultimately resulting in them leaving the herd too soon, on grounds of health or fertility problems resulting from depressed skeletal health.

Even excess calcium can be a problem in some areas, where it reduces magnesium absorption, in turn causing hypomagnesaemia issues.

McGrath says DSM had developed a product HyD, which is a next generation form of Vitamin D which is much more efficient, enabling her to better absorb calcium in her diet.

A cow’s uptake of calcium and phosphorus from the diet can be compromised due to excess potassium, deficient magnesium or calcium and phosphorus imbalances. HyD mixed in her feed to ensure what calcium she was getting would be absorbed better thanks to HyD’s unique mode of action.

“Using HyD enables

the cow to absorb calcium and phosphorus better. Studies have shown inserting it into their diet can double the amount of Ca retained, and reduce the amount of bone degradation post calving.”

While an additive may seem unnatural to some, McGrath said there was nothing natural about a high protein, 2-2.5 leaf rye grass plant in spring time.

HyD helped cows get through the challenges pastoral feeding presented at a stressful time for the animal. Similarly supplements like palm kernel, grains and maize silage were also low in calcium and offered little ability to lift levels.

McGrath urged farmers to look harder at the “macro” nutrients like Ca before the “micros”, and at the value HyD can play in mobilising that valuable nutrient for health and milk production.

“Those mid-late lactation cows are in a bone building phase and robbing them of calcium means they will pay in the following lactation.”

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ANIMAL HEALTH // 27

Industry to treat bobby calves better

STOCK MOVEMENT restrictions and TB testing requirements have been eased from March 1.

Disease control areas are reduced, now affecting 5.3 million hectares and about 10,000 herds, resulting in 500,000 fewer TB tests, according to OSPRI.

Farmers in regions where move-ment controls have been removed will be free to move stock without any pre-movement tests; and they will be sub-ject to fewer TB tests as special testing area requirements are reduced.

OSPRI quotes Tasman dairy farmer Phil Riley as saying he has grown used

to pre-movement TB testing after doing it for 22 years, but will be glad to see the back of it.

“A lot of us had got used to it, and it’s just another job you have to do onfarm. But it’s great to see the back of it, because it makes it that bit more dif-ficult if you happen to be selling your farm or stock.”

Since 2011, OSPRI’s TBfree pro-gramme has eradicated TB from 1.2 mil-lion ha and infected herds are down to 35 from nearly 1700 in 1994.

Riley agrees that as we get better at pinpointing where the risk is, move-ment control areas will shrink.

TB restrictions easing

FEEDBACK FROM farmers will help prepare an industry action plan on caring for bobby calves from farm to processor.

DairyNZ will use the feedback in working with six other industry associa-tions to develop a plan for the next calving season.

DairyNZ, the Meat Industry Association, Federated Farmers, the Road Transport Forum, NZ Petfood Manufactur-ers Association, the Dairy Companies Association of NZ, NZ Veterinary Associ-ation, and the Ministry for Primary Industries have agreed to stamp out mis-treatment of calves.

The farmer insights result from 20 interviews with farmers by DairyNZ staff in Northland, Waikato, lower North Island, Canterbury and Southland. The respon-dents were farm owners, sharemilkers or opera-tional managers, in a feed-back group representing a cross-section of farm own-ership type, farm system and size.

DairyNZ chief execu-tive Tim Mackle says the dairy industry is focused on preparing for the next calving season and giving good advice to farmers.

“Resolving these issues will depend not on words

but on actions. We [will work] with everyone in the supply chain, including farmers, to ensure bobby calves are well cared for. We have ensured some good practice advice is already available and that farmers have forums avail-able where they can share their own good manage-ment practices.”

Tim Ritchie, chief exec-utive of the Meat Industry Association, says the meat processing and export industry is well regulated and that the meat indus-try, together with the dairy industry, is systemati-cally reviewing the path from farm to processor to identify opportunities for improvement. This will be finished before the next bobby calf season.

DairyNZ animal hus-bandry and welfare team leader Chris Leach says it is important to test ideas

and process ‘mapping’ with farmers to ensure everyone well understands the onfarm elements of bobby calf care.

“Farmers gave us valu-able feedback in the inter-views. It is essential that we work with them to ensure that any changes are well thought through, practical, workable, cost effective and result in gen-uine welfare benefits.

“We’ll continue to keep talking to farmers as we finalise advice on improvements that farm-ers can make this coming season. Generally those interviewed saw our ini-tiative as a positive oppor-tunity to review the current process and how to improve it, particu-larly when viewed through public eyes. Another saw ‘education, not regulation’ as the answer’,” he says.

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28 // ANIMAL HEALTH

FODDER BEET is an increasingly popular winter crop for beef and dairy cattle due to the large amounts of dry matter it produces, but stock won’t get the best out of the crop if its nutritional gaps aren’t managed, warns product development manager Jackie Aveling, of SealesWinslow.

Its high sugar content makes fodder beet very pal-atable to stock, but it has sub-optimal protein content (13%), low fibre levels (<20%) and is low in phospho-rus, magnesium and essential trace elements.

“At SealesWinslow, we’ve found a way to over-come these issues with a solution that’s easy to use and which provides good nutritional support for stock grazing on fodder beet,” says Aveling.

The result is a specially formulated Cattle Fodder Beet Block now on sale following on farm testing.

The new block addresses phosphorus deficiency and balances other minerals like magnesium and essential trace elements that are lacking in cows and heifers on a fodder beet diet.

“A diet deficient in these minerals, particularly phosphorus, can lead to ‘creeper cows’ in the short term, and longer-term difficulties including poor milk production, reduced appetite, weight loss and poor reproductive performance.

“Current practice to reduce the chance of phos-phate deficiencies developing in stock grazed on fodder beet is to dust the crop with dicalcium phos-phate (DCP) or use a slurry of the compound on silage or straw. However these practices can be dusty, time-consuming, wasteful and the intake is variable.”

The new Cattle Fodder Beet Blocks come in 25kg tubs which are simply placed at the crop face under the fence in front of the cows.

Available from merchant retail stores, the block is said to pay its way in convenience, labour time saved, lower downer costs and longer-term stock problems, the supplier says.

It also compares favourably with the price of a single intravenous downer cow treatment. The rec-ommended block to cow ratio is 1:25.

Fodder beet supplement pays its way

Digital dermatitis is hereDIGITAL DERMATITIS is the most serious infectious cause of lameness in dairy cattle worldwide, and now affects New Zealand dairy herds, says Richard Laven, associate professor in production animal health at Massey University.

Typically, digital dermatitis is found on the skin just above the interdigital space, and it may also be found along the coronary band. Digital dermatitis is most commonly found on the hind feet; fewer than 3%

of affected cattle have lesions on the front feet only.

The classical lesion of digital dermatitis is a moist ulcer, Laven says.

However, digital dermatitis is a cyclical disease with lesions forming, healing and then returning, so it has multiple stages. The most persistent stage (often called M4) is a chronic thickening of the skin with rapidly spreading growths which can often resemble hairs (in some countries these are called hairy hoof warts).

In NZ the most common appearance of digital dermatitis is a small lesion less than 1 cm in size.

Larger lesions, either when they develop into ulcers or when they are growing, tend to be extremely painful

Digital dermatitis was first identified in Northern Italy in 1974, and is now reported worldwide. The first NZ case occurred in 2004, with sporadic reports until around 2011 when the number increased markedly.

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EFFLUENT & WATER MANAGEMENT // 29

Fertiliser value of effluentFARM DAIRY effluent is a natural, dilute liquid fertiliser.

It contains nitrogen (N), phospho-rus (P), potassium (K), magnesium (Mg), sulphur (S) and trace elements that you would normally pay to have applied to pasture.

Think of dairy effluent as a resource, not a waste.

When spread over land and applied in timely fashion, the effluent of 100 cows can save farmers substantial money. This saving could be much higher for high input farms, e.g. farms feeding supplements.

Applying the maximum amount of nitrogen from effluent allowed per year (150kg/ha for grazed grass), dairy shed effluent also provides about:

■ 20kg phosphate per hectare ■ 117kg potassium per hectare ■ 20-30kg sulphur per hectare ■ Smaller amounts of magnesium

and calcium.

Applying effluentEffluent management systems in

place on your farm should give you enough flexibility so that you don’t

irrigate: ■ When soil is water-

logged (too wet to absorb the effluent)

■ If there is an equip-ment breakdown.

■ Remember to cover water troughs when irrigating effluent.

■ Protect waterways on your farm by:

■ Not irrigating within 50m of a water supply

■ Leaving a strip of non-irrigated land next to all water-courses – at least 20m wide

■ Ensuring that spray drift isn’t getting into nearby streams or rivers.

Soil – a living filterSoil acts as a living filter. It treats

the applied effluent by changing it: ■ Physically – filtering out effluent

particles, breaking them down and incorporating them into the soil

structure ■ Chemically – absorbing nutri-

ents and making them available to plants

■ Biologically – harmful micro-organ-

isms (such as bacteria) present in the effluent are retained by the soil, or are killed when the effluent dries or when they become exposed to sunlight.

Don’t apply too muchSoil can only filter so much

effluent at a time. It’s impor-tant to match the irrigation depth to the capability of the soil. Land with impeded or arti-ficial drainage, high or rising water tables or slopes greater than 7 degrees have a higher risk of over-application, and therefore application depths should be adjusted accord-ingly to reflect soil and weather conditions. Note this could be less than the maximum appli-cation depth stated in Waikato Regional Council rules.

Too much effluent can: ■ Kill pasture – especially

where effluent has ‘ponded’ on the soil surface

■ Pollute nearby streams and rivers – where it runs off pad-docks into waterways

■ Pollute groundwater – by seeping too deep into the soil

■ Be an ineffective use of nutrients -- by seeping past the root zone before the plant can utilise it.

Think of effluent as a resource, not a waste.


30 // EFFLUENT & WATER MANAGEMENT

The soil type where your effluent pond will be located is key.

Location of pondA SITE investigation before design and construction starts is important to make sure the pond can be built structurally sound given the site conditions and to meet regulations, says DairyNZ.

While an engineer will probably do the site investigation, the responsibility for proving the adequacy of a pond and liner rests with the farmer.

The soil type where the effluent pond will be located is also important.

In comparison to most other soil types, peat soils require more ground investigation. The main issues are peat thickness, strength, compressibility and groundwater level.

Before ground investigations begin, a desktop study should be done by your designer, who should then explore the site. There should be a minimum of three holes around the perimeter of the proposed tank or pond. The investigation should extend to the full depth of the peat, or to twice the width of the proposed tank or pond bank.

Your designer should then perform specific engineering tests to determine

the suitability of the site and the design requirements.

During the investigation and design stage make sure you discuss with the designer the cost versus benefit of different design options for peat versus the long term maintenance costs of each.

Effluent systems can include a solids separation component. This can be either mechanical (press type systems) or non-mechanical (weeping wall type systems).

If solids are removed prior to the effluent reaching the storage pond, this averts or at least reduces the risks inherent in managing the solids in the pond. But you still must store and manage them. Mechanical removal should usually be done before effluent enters the storage pond.

Non-mechanical separation methods are generally weeping wall or settling pond systems. These fundamentally change the pond design requirements. In this case the pond component of the solids removal system needs to be designed specifically for solids removal.

Data monitoring ensures staying within the rulesFARM DATA monitoring has risen to a new level using technology that ensures compliance with a new code, says one such system supplier.

Smart Farm Systems, and its sister company Gateway Data Ser-vices, point out that the New Zealand Farm Data Code of Practice requires data to be encrypted and stored securely, to allow proof of place-ment of effluent on land (rate and depth), and to confirm that a farm’s water usage is in line with its consent and with new vat monitoring rules in force from August 1 this year.

The companies say they have developed a managed ‘gap redun-dancy’ system with high data integ-rity and secure cloud backup.

Gateway Data Services collects farm data from onfarm sensors

such as soil moisture tapes, water meters and effluent applicators on dairy, goat and pig farms -- in fact anywhere sensors need monitoring.

The company’s GDS app mon-itors in real time, allowing rapid response by farm staff; notifica-tions and critical alerts can be cus-tomised to a farm. “Just what you’ve been looking for,” says the company.

Gateway Data Services says it sets a high priority on farm safety and recognises what it takes to farm in a remote location or just to manage a business.

The app includes an emergency safety alert which will send out a GPS co-ordinate to names on a contact list, so the closest can tell the man-ager that help is on its way.

The app helps a farm to meet

compliance conditions and can help economise on animal health prod-ucts in water troughs. It will signal any spike in water usage above set levels, caused by, say, a leaking water line or above normal rate of drinking by a sick animal or fowl.

Technology of this calibre is the future of farming, the company says. “Providing real time applications in a corporate farming environment provides an audit trail of responses to alerts to assist in on farm training and accountability.”

As regional councils favour com-pliance reports from accredited data service providers, Gateway Data Services is positioned to provide encrypted data for environmental plans, industry reports and operat-ing reports.

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DAIRY FARM effluent should be treated as a fertil-iser, but carefully, because it is not a balanced fertiliser, being very high in potassium.

This can lead to higher leaching levels of magnesium and subsequent animal health problems if potassium soil test levels are high.

According to Waikato Regional Council, you can manage this risk by increasing the effluent area or by making silage on the effluent area and feeding it out on non-effluent areas of the farm.

Applying shed effluent at light rates will ensure stock feed intakes are not adversely affected. Man-aging dairy effluent is also necessary for the health of waterways and groundwater, so knowing the regional council’s rules for effluent management is important.

Under the Waikato Regional Plan you cannot exceed 25mm per application and 150kg of nitrogen from efflu-ent per hectare per year.

“So you need to know how much your irrigator is applying and how concentrated your effluent is,” the council says.

“Dairy effluent must not discharge into surface water or contaminate groundwater. Having the capac-ity to store effluent before it is applied to land means effluent doesn’t have to be applied during wet periods when the risk of surface ponding and runoff is high. This substantially reduces the risk of overflows to sur-face water and maximises plant nutrient uptake.

Effluent storage facilities should be sealed to the required standard of 1 x 10-9 m/s. Storage should be correctly sized for your individual farm system and management.

Having adequate storage means that you: ■ Can defer irrigation in wet weather ■ Lower the risk of ponding, run off and leaching in

wet weather ■ Irrigate when plant uptake is maximised ■ Can irrigate in dry weather ■ Can store effluent during mechanical breakdown ■ Have less stress during busy times, e.g. calving.

Increasing your effluent area means that you: ■ Spread nutrients further, reducing fertiliser

requirements and associated costs ■ Slow the buildup of potassium in effluent pad-

docks which can lead to animal health problems in the early spring

■ Have more flexibility in grazing around effluent applications and safer withholding periods prior to grazing. The Pond Calculator is an excellent tool if you

are building a new effluent pond. Accredited effluent system designers will assist in matching all compo-nents of effluent management to your farming system.

Treat poo as fert

Logan Bowler, DairyNZ (right) and Jon Palmer, Waikato Regional Council at the effluent field day.

Field day turnout shows farmer interestA LARGE Reporoa and Waikite dairy farmer turn-out at a recent effluent management field day shows they want to do the right thing with the envi-ronment, says organiser Jon Palmer.

“We had about 100 farmers and industry pro-fessionals at the field day at the Tumunui Dairy property to see how its effluent system works,”

says Palmer, a sustain-able agricultural advisor at Waikato Regional Council.

“It’s excellent to see such farmer interest in managing dairy effluent.”

Farmers at the event, held near Rotorua, were able to consult experts from DairyNZ, AgFirst and OPUS, and council staff. Dairy companies Fonterra and Miraka were on hand to talk about their envi-

ronmental initiatives.The council is talking

one-to-one with farmers to help them ensure their effluent management sys-tems are up to scratch, and is encouraging them to make improvements where required. It’s part

of a new region-wide approach.

“Farmers have been responding positively to this approach,” says Palmer.


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How much effluent to irrigate?ALTHOUGH EFFLU-ENT contains many nutri-ents which can affect your farm management, it is the environmental effects of nitrogen that determine how much you can irrigate onto land, says Waikato Regional Council.

Too much nitrogen can reduce pasture perfor-mance and reduce water quality in neighbouring waterways.

If you know eactly how much nitrogen is in efflu-ent, you can work out the

most effective application rates for your land.

In the Waikato region, no more than 150kg of nitrogen in effluent can be applied per hectare of grazed grass per year. You’ll need to get efflu-ent tested to work out how much nitrogen is going onto your land during irri-gation.

Most registered analyt-ical laboratories offer this service for around $100. When used with a nutrient budget this is a small cost

compared to the fertiliser savings possible over time when effluent applications are timed efficiently.

The Overseer nutrient budget can be used to help determine how much land is needed for effluent irri-gation. For more infor-mation on Overseer, click here.

How deep does each application have to be?

Each effluent appli-cation must not be more than 25mm deep. How deep you irrigate effluent over an area will depend on how much nitrogen you want to apply. Use our online calculation sheet to work out applica-tion depth, given that you know:

■ The nitrogen content of the effluent

■ How much nitrogen (kg) you want to spread per hectare.

■ Working out applica-tion ratesOnce you’ve worked

out the application depth, you’ll need to work out the application rate for your irrigator.

Spray irrigators1. Using the same

principal as a rain gauge, mark a scale on the sides of several containers.

2. Place the con-tainers within the area being irrigated.

3. Stop irrigating when the desired depth (maximum of 25mm) has been applied.

Other irrigatorsTo ensure you

don’t over-irrigate, use our online calculation sheet to work out effluent application rates for:

■ Travelling irrigators – the distance an irriga-tor needs to travel (in metres) per hour

■ Stationary spray ‘can-nons’ – the length of time a spray head can stay in one place

■ Tanker systems -- the distance an irriga-tor needs to travel (in metres) per hour.

Ongoing irrigation man-agement

When irrigating check for effluent ponding, par-ticularly in areas with pugging damage. Stop ponding by avoiding irri-gation in these areas, or improve the drainage by:

■ Loosening the soil in small ponding areas with a spade

■ Breaking up the soil surface, e.g. by shallow ripping.Because effluent con-

tains a range of nutrients, irrigated areas will need less fertiliser. Talk to your fertiliser consultant about the reduced fertiliser needs of irrigated blocks.

IN WAIKATO region, applying effluent to land

is a permitted activity. This means farmers

can apply effluent without having to get a

resource consent, as long as you follow these

conditions: ■ No more than 150kg of nitrogen can be

applied per hectare, per year (1.5 applica-

tions at 25mm deep and 0.04% nitrogen).

■ The farmer/contractor must have contin-

gency measures in place in case there is

prolonged wet weather or a pump breaks

down.

■ Any ponds or effluent holding facilities

must be sealed to reduce leakage.

■ The farmer/contractor must spread ef-

fluent and sludge in a way that reduces

odour and spray drift.

■ Each effluent application must not exceed

25mm deep.

■ Effluent must not run off the land into

waterways.

■ Effluent must not pond on the land sur-

face after application.

REGULATIONS FOR APPLYING EFFLUENT

Too much nitrogen spread via effluent can affect pasture and water quality.

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Australian farmer Andrew Holman amd Denis the Greyhound.

Mainland system does the job on steep Oz landMORE GRASS can result from effective efflu-ent management, but you have to get the system right.

In Australia, the Holman family is apply-ing effluent on more of its steep property via a main-line installed last year; now they are starting to see benefits -- more grass.

The property, at Loch in the Strzelecki Ranges, Victoria, has some steep slopes that make efflu-ent pumping difficult.

The farm milks about 400 spring calv-ing cows. Manure from the yards is collected by a solids trap and stored in a 50,000L sump, pumped daily to pasture via a 1300m mainline and a gun irrigator.

Expanding the efflu-ent application area has enabled better use of the nutrients in the effluent, particularly potassium and nitrogen.

The gun irrigator is moved around every couple of days, Andrew Holman says. “I’m able

to apply nutrients now to areas of the farm that were difficult to drive over and apply fertiliser to and we’re now able to see a response.”

The effluent was tested, showing 1 megalitre con-tained 232kg of potassium, 95kg of phosphorus, 22kg of sulphur and 200kg of nitrogen. This is equiv-alent to 0.46 tonnes of

potash, 0.43 tonnes of urea and 1 tonne of single superphosphate costing about $1015 per megalitre (prices are a rough guide to illustrate value of efflu-ent).

Each year about 7.4 megalitres is generated on the property with a fertil-iser equivalence value of $7511.

Reducing the mainte-nance cost of the effluent system is also needed to

gain the most value from the nutrients in the efflu-ent.

The effluent system must be able to gener-ate enough pressure at the irrigator and prevent solids blockages in the pipes.

Holman had a plumber size the mainline to ensure it had the right pressure rating for the steeper

property to ensure pump-ing efficiency and reduce the risk of splitting pipes.

Solids from the efflu-ent are removed by a trap but some enters the sump where it is agitated then applied daily to pasture.

Holman says mainline flushing is important to remove solid material if it gets pumped through.

Placing hydrants at 50m intervals for the first 200m of the mainline then

100m after that is some-thing he would do differ-ently next time to enable ease of flushing.

Holman also removed the foot valve from the effluent pump (which is immersed on a pontoon) to allow effluent in the line to drain back to the sump when turned off to flush the pipe.

The mainline is buried to protect it from stock trampling, and to help reduce blockages by keep-ing the pipe cool over summer, reduc-ing the baking of manure inside.

Two posts and hori-zontal rails protect the hydrants from stock and machinery.

Effluent is managed daily. “At the end of each milking the effluent is gone; it’s not another job I have to do. There are no excavators, tankers or weeds on dams to deal with later.” These are the benefits of a direct appli-cation system.

But it can be difficult

“Mainline flushing is important to remove solid material if it gets pumped through.”

– Andrew Holman

to manage these systems when conditions are wet so the farm has backup storage capacity.

The Melbourne Water Rural Land programme has supported the instal-lation of the effluent mainline through a 50% co-contribution financial incentive.

www.melbournewater.com.au

The Growsmart® Precision VRI system installed on Brian and Jo Bosch’s dairy farm in the South Wairarapa has been saving them precious water and dollars since it was first installed in 2008.

The couple use the intelligent system to avoid watering the tracks, ponds and drains underneath their Zimmatic™ centre-pivot. The water saved by avoiding these areas is diverted to other areas of the farm, increasing their irrigated land area by approximately 10%.

And after over six years of using the technology he’s pretty happy about the low maintenance requirements of the system hardware, “It’s just worked!”

The Bosch’s are not alone in the great results achieved using variable rate irrigation. Trials show savings of up to 27% on dairy and cropping farms are realistically achievable. Why? Because Precision VRI controls every individual sprinkler allowing you to irrigate where it is needed.

Find out how you could achieve great results like Brian and Jo by talking to your Zimmatic by Lindsay dealer today, calling 0800 438 627 or by visiting growsmartprecisionvri.co.nz

© 2013 LINDSAY. ALL RIGHTS RESERVED. ZIMMATIC IS A TRADEMARK OF THE LINDSAY CORPORATION.

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Do your home-work before pond constructionA NEW effluent pond project must start with planning -- a critical stage, says DairyNZ.

Poor information at the project’s start will com-promise all and the pond may never meet your needs.

To ensure the designer and contractor have the right information, the farmer must be clear about design preferences and intentions for the future.

“You do not want your new pond to be inappro-priate or unable to cope in five years,” DairyNZ says.

Using the right person or people for the job is also critical. Designing and constructing effluent ponds is a technical job requiring specialist knowl-edge.

The designer must be suitably qualified, to ensure:

■ The investment in the pond will be appropri-ate for the farm and farming system

■ The pond will comply with regional council requirements

■ The pond is designed with an understand-ing of current research and best technology options

■ The pond will meet the design requirements.Earthworks and con-

struction contractors and equipment/service sup-pliers may all be involved at different stages of the project, e.g. excavation and liner installation.

When choosing who to use, consider the fol-lowing:

■ Are they experienced in building effluent ponds?

■ Do they have experi-

ence in the type of pond and liner you want?

■ Do they offer a war-ranty and/or certifica-tion of work?

■ Do they have experi-ence working with your specific regional coun-cil rules?

■ Do they have farmer or industry professional references or testimo-nials?

■ Are they acceptable to the person signing off the work?Settling a suitable con-

tract before design or con-struction begins is critical to ensure both parties are clear about expectations. A written contract will protect your interests and sets out your rights and obligations. It also gives your engineer/contractor an incentive to get things right first time.

When discussing con-tracts with different par-ties:

1. Make sure the roles and responsibilities of the farmer, contractor and engineer are clearly

defined before construc-tion work starts.

2. Clearly define who the subcontractors are directly working for -- the contractor, the engineer or yourself.

The scope of the ser-vices to be provided should be clearly recorded and agreed to, for a full understanding by all par-ties from the outset. The following elements should be included in the scope of work:

■ Evaluation of the exist-ing system (if appli-cable)

■ Identify improvement options/advise good practice systems

■ Survey and geotechni-cal investigations

■ Design ■ Tendering and tender

evaluation/recommen-dation

■ Construction super-vision

■ Certification and reporting

■ Operations and main-tenance

■ Payment schedule.

TO DETERMINE the pond size required for a deferred irrigation storage pond, use the indus-try’s ‘dairy effluent storage calculator’ (DESC). Make provision for:

■ Local rainfall variability: coverage of rain gauge sites in the calculator is patchy in some regions

■ Variation in the amount of storage different regional councils require. We recommend that sizing be based on DESC calculations rather than a council minimum storage requirement where the latter gives a lesser volume

■ The DESC determines pond volume and does not allow for freeboard or sludge ac-cumulation volume.

ESTABLISHING POND SIZE

Effective effluent dispersal for enhanced sustainability

Our slow-absorbing sewage treatment tanks and irrigation systems help improve soil, reduce pollutants, and decrease the costs involved in running your farm.

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Research and development team leader at the TIA Dairy Centre Dr James Hills with project officer David McLaren.

Oz auto irrigator thinks before it watersRESEARCHERS AT the Tasmanian Institute of Agriculture (TIA) are using sensors and autonomous technology to develop a system that tells you when to irrigate your pasture, then goes ahead and does it for you.

The system automatically irrigates pasture, and it will apply variable volumes of water to the same paddock, which could save time, water and money.

R&D team leader at the TIA Dairy Centre and chief investigator on the project, Dr James Hills, says the end goal is an autonomous machine interface that collects information about the pasture, water use, soil and climate and then uses crop modelling processes to make decisions about when and where to apply water.

The development of this autonomous system is part of a bigger three year project looking at the use of irrigation water in pastures by collecting data on water use,

energy use and pasture production from five sites in Tasmania.

Paying for the project are the federal Department of Agriculture and Water Resources (under the Rural R&D for Profit programme), Dairy Australia and TIA.

From the data collected at the five sites, the team will work with farmers to make changes to improve water use efficiency and will continue monitoring the sites to measure the success of these changes.

Hills says gathering this benchmarking data is an essential step to getting the most out of the new irrigation schemes.

“The funding of irrigation infrastructure in Tasmania by federal and state governments

enables us to increase our agricultural productivity, but we need to do it properly and sustainably,” Hills says.

“To introduce management strategies that increase efficiency we really need that baseline data. We need to know the facts and figures for water use to know how to improve on that use.”

The trial sites have been selected to give enough variability across different topography and soils that are likely to be irrigated.

David McLaren, project officer at the TIA Dairy Centre, is on the ground installing the sensors and data logging equipment at the sites and will also oversee the data collected in the field.

“A big part of the project will be to visualise that data, so that when it comes to making management decisions we can quickly know what to do through a visual display of data,

and not have to interpret numbers,” McLaren says.

“The devices on site will have an interface that you can connect to from your smartphone or tablet so you can start to look at real-time values of pressure, temperature and energy without being physically on site, which is a real advantage.”

In its third year the project will trial an automation system at one of the sites to see how this type of system could be used to save farmers time and effort.

“We are interested in how far we can go using a system with a machine interface as opposed to a human interface,” Hills says.

To do this, the team has linked with The National Centre for Engineering in Agriculture at the

“We are interested in how far we can go using a system with a machine interface as opposed to a human interface.”

University of Southern Queensland, which has developed a control platform called VARIWise.

The VARIWise system has been developed and tested in cotton, but this

is the first time it will be applied to a pasture based system.

Installation of the sensor and logging equipment on the sites was completed in October.

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IRRIGATION EFFLUENTSTOCKWATERWATER TREATMENTTECHNOLOGY

King

St54

758_

DN

_C



EffluentMonitoringandControllingcapabili4esthatareimportanttoconsider,nowandforthefutureEffluentMonitoringandControllingcapabili4esthatareimportanttoconsider,nowandforthefutureEffluentMonitoringandControllingcapabili4esthatareimportanttoconsider,nowandforthefutureEffluentMonitoringandControllingcapabili4esthatareimportanttoconsider,nowandforthefutureEffluentMonitoringandControllingcapabili4esthatareimportanttoconsider,nowandforthefutureEffluentMonitoringandControllingcapabili4esthatareimportanttoconsider,nowandforthefuture

AutoShutOff FailSafe GPSrecords Overseer&MilkCompanydata

Integra4onwithfer4liser

Integra4onwithMINDA

Thisisthemostbasicfunc0on-shu2ngdownofthepumpiftheirrigatorstopsmoving.

Truefail-safemeanspumpingcon0nuesprovidedthereisaconstantflowofdatafromthemonitorattheirrigatorbacktothecontrolleratthepump,showingthesystemisopera0ngwithinthesetparameters.

Notonlytoensurecompliance(ifnotinyourprovincenowbutincreasinglyinthefuture)butalsotocreatereliablemanagementrecordsofwherestaffhavebeenapplyingeffluent,GPSrecordsareimportant,especiallywhenabletobeintegratedwithfer0liserrecords.

MilkcompaniesandOverseerwillincreasinglyrequireconfirma0onofenvironmentalbestprac0ce,sobeingabletocallupcomplete,accurateelectronicrecordsisimportantfuture-proofingwhenselec0nganeffluentmonitoringandcontrollingsystem.

Reducingfer0liserapplica0onbytherightamountineffluentareassavesonfer0liser,providedthefarmercanbothmonitortheamountandloca0onofeffluentapplied,andalsoadjustfer0liserorderscorrectly,inanintegratedGPS-basedpasturemanagementsystem,especiallyifitalsorecordssoilmoistureandtemperature.

Takingcostsoutofpasturebasedsystemswhileop0misingproduc0onismoreimportantthanever,sobeingabletobringallmanagementinforma0onincludingherddatatogethertoiden0fycostsavingswhilealsomakingmanagementdecisionsmoreaccuratelyandmorequicklyisamajorbenefitofusinganeffluentsystemthatintegrateswithMINDA.

Op0on1 ✔︎

Op0on2 ✔︎ ✔︎

Op0on3 ✔︎ ✔︎ ✔︎

Op0on4 ✔︎ ✔︎ ✔︎ ✔︎ ✔︎ ✔︎

Get these five things right in choosing a monitoring systemAFTER INSTALLING, upgrading or fine-tuning pumps, ponds and pipes -- the ‘three P’s’ of dairy effluent infrastructure – dairy farmers are increasingly using technology to monitor and control their systems, says Precision Farming Ltd.

There are two reasons: to improve farm performance by reducing costs, and for safer environmental compliance, the company says.

When installed on farms that use a pond or saucer for effluent storage, monitoring and control systems typically have three sets of components:

■ First, hardware that controls the pump and the stirrer, at the pond or in the shed

■ Second, hardware that operates at the effluent distribution end, whether K-lines or pods, a travelling irrigator, or a pivot, whether underslung or injected

■ Third, software that enables the controlling and monitoring, providing local and remote starting and stopping, alerts, auto shut-down, GPS and flow data reporting, and more.When considering

what effluent monitoring and control system is best for the farm in question, the following are primary:Trustworthiness

If you are looking to have a fail-safe system, make sure it can be trusted. Some monitors work by sending a message such as a text, only when something goes wrong with your irrigator, for example if the wire rope jams and the irrigator stops moving but it keeps spreading.

However if the messaging system itself fails, then the alert does not get through and an effluent ‘doughnut’ can

result, and potentially a hefty fine for a resource breach.

Best to buy a system that constantly sends metrics such as pressure at the irrigator and movement that keeps the pump going; but such a system will interpret any cessation of the ‘keep pumping’ data -- whether because of a fault with the irrigator or with the messaging itself -- as a reason to shut off the pump. Good.Compliance

After spending hefty sums on effluent infrastructure, it makes sense to complete the entire system with a monitor/controller, but only if it ensures

environmental compliance. To ensure compliance-quality data, GPS-based records of applied nutrients will increasingly need to be complete and accurate, and electronically generated and recorded. Entering records manually is subject to hit-and-miss, human error, and perhaps even intentional fudging by staff who were too busy to relocate the irrigator when the farm owner was away.Financial viability

The set-up and operation costs of a good system when properly designed and integrated not only show a return on capital investment but also save money. Fresh, nutrient-rich effluent is a valuable resource, so setting up an optimal system should generate a return on investment, and cut indirect costs such as staff time and wear and tear on quads.Modularity

Dairy farms increasingly rely

on accurate data to support management decisionmaking. An effluent monitoring and control system needs to send data across the farm, using the same network or UHF equipment as other devices onfarm. Buying a proprietary system that is ‘sealed’, i.e. that will operate only with itself and will not link with other onfarm activities, is obsolete even now, never mind in the future as modularity becomes the norm.Integration

Dairy farms are complex businesses with substantial interdependence between herd and pasture, people and production.

Until recently, companies selling sophisticated technology have tended to polarise into two camps – herd and pasture. A step change is now afoot, notably in LIC’s

long-term partnership with Precision Farming. LIC’s expertise is chiefly in livestock, whereas Precision Farming’s is in pasture. This partnership will now allow dairy farmers to accumulate their herd and pasture data in one place, optimising their farm performance, especially in the interdependence of herd and pasture.

When considering an effluent monitoring and control system, think of it as one building block in the whole structure of farm management information, rather than a single activity on its own. This approach, bringing together herd data including feed demand with pasture production including feed wedge, fertiliser, effluent, soil moisture and temperature and other data takes the farmer takes the farmer a long way towards cutting costs in a pasture based system.

‘If you are looking to have a fail-safe system, make sure it can be trusted.’


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MACHINERY & PRODUCTS // 37

Saxon conquers min-tillWELL KNOWN for its Centurion and Spar-tan drill series, Great Plains has recently introduced the all-new Saxon series, with min-till work in mind.

Based on the Cen-turion series launched in 2012, the Saxon will work where there are high volumes of residue from previous crops or in established cover crops.

The series comes in 3m and 4m working widths and carries over a lot of the seed deliv-ery, placement and con-solidation features of the Centurion; but it has a key difference -- Great Plains Turbo coulter discs.

This set-up has a good slicing action with min-imal disturbance. Each disc is set to operate in-

line with trailing dou-ble-disc openers, their unique profile creating a friable seedbed 30-50mm wide into which the seeds are planted.

Both machines use the same 3000L capac-ity hopper also found on the Centurion series, although an upgrade to 4000L is available for the 4m model. Spacing on the 3m models can

be set at 167mm over 18 rows, or narrowed down to 125mm spread over 24 rows; the 4m model can be set to the same spac-ings over 24 or 32 rows.

Hydraulic down-pressure helps main-tain an even depth in all soil types, and accu-racy is ensured by a rail that transfers weight to the coulters and press wheels, whilst keeping

everything parallel to the ground.

Seed distribution is via injection moulded distribution heads, with optional tramline shut off and blockage mon-itors, and the system is said to be variable rate application ready. Seed calibration is easy, selected from the cab.www.powerfarming.co.nz

Heavy metal hits Mystery Creek

A RECENT unreserved auction held by specialists Ritchie Bros saw around 320 lots of plant and heavy machinery sold at Mystery Creek Event Centre near Hamilton.

There was something for everyone: 30 tonne excavators, dump trucks, road rollers and pick-up trucks – plenty of big boys’ toys for construction heavyweights and farming folk alike.

With the sun shin-ing, 350 registered bid-ders took to the field and around 160 online bid-ders checked in from as far

afield as Hong Kong, New York and Stockholm.

Ritchies’ manag-ing director Asia Pacific, Kieran Holm, debunked the idea that New Zea-land is the home of high priced machinery. “This type of machinery is well priced in NZ, as evidenced with buyers from as far afield as Europe seeing value, despite the typically high freight costs in getting stuff home.”

Ritchies set up in Canada in 1958 and is now the largest com-pany of its type in the world:

2015 turnover was US$4.3 billion, of which US$1.5 was conducted online.

It has 44 permanent auction sites worldwide and runs about 350 auc-tions each year. Their scale is seen in a recent five-day event in Florida where sales were US$175 million.

Holm also commented “our business sees global liquidity as economies around the world rise and fall, and although we deal in big lumps of metal, with a little bit of thought and ingenuity they can be moved around the globe”.www.rbauction.com



Machinery on display at Mystery Creek.

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38 // MACHINERY & PRODUCTS

Take the guesswork out of harvesting

SELF-PROPELLED FORAGE harvesters have come a long way since the early 1970s when they struggled to push 200hp, whereas now there are machines in paddocks bigger than 1000hp.

But power isn’t every-thing; now there are technologies in the new machines that can improve output and help make useful harvesting and future production decisions.

The latest Jaguar har-vesters from Claas offer operator focussed items such as Opti-Fill to increase performance, and they take partial control of the delivery spout to allow the driver to focus on crop input, and in practice con-trol the spout position and more importantly the end flap to achieve maximum trailer fills.

But crop measurement technologies are the ones that truly move the range into the 21st century.

The Claas Quantim-eter can measure output in tonnes/hour tonnes/ha by utilising position sen-sors in the upper rear feed roller, which measure the feed opening, feed roller and forward speeds to pro-duce a tonnage through-put figure. This can be squared up with test weighings -- inputting a correction factor to ensure accuracy -- and is recom-

mended when crop or field conditions change.

Until recently moisture measurement was done by a dry matter sensor that read the conductivity and temperature to deliver an average DM figure, and is still a good option for operators working mainly with grass.

Intended for use with a wider range of crops is the recently introduced near infra-red (NIR) sensor system which marks a step up in operating range and accuracy, using a spec-trometer that measures specific wavelengths 20 times/second.

Able to deliver mois-ture readings for grass

of 24-65% and maize 20-60%, the unit also showed improved accu-racy to 98.6% during test-ing by the prestigious DLG organisation in Germany. This new technology will allow operators to decide timing of harvest, and to make informed decisions to cease harvesting should crop or weather condi-tions deteriorate.

The current Claas har-vesters also offer a range of Data management strategies by way of the Telematics systems now incorporated.

Likened to the telem-etry systems that tell For-mula 1 technicians how the car is performing

and being driven on the track, the Claas Telemat-ics system sends informa-tion on 200 parameters to a central database every 5 seconds. A licensing agreement allows users or managers to access this information to look at machine performance, such as operating versus travel time, time station-ary, crop throughputs or fuel used. It can also be used to look at crop yields, identifying areas of high or low yields in specific areas, and produce data that can be supplied as an ISO XML download that will allow the information to be incorporated into propri-etary yield management or yield mapping applica-tions.

One thing’s for sure in today’s modern agri-culture: information is king, and the evolution will move on at a pace, so be sure not to blink and miss it.


The NIR sensor allows the operator to decide timing of harvest.

The latest Jaguar harvester from Claas.

But power isn’t everything; now there are technologies in the new machines that can improve output and help make useful harvesting and future production decisions.


MACHINERY & PRODUCTS // 39

Vat monitor makes sure milk stays coolA NEW all-in-one milk vat monitor and controller that ensures milk is cooled and held to temperature has been launched by Tru-Test. Its launch coincides with tougher cooling standards requiring raw milk be cooled faster and held at the correct temperature.

Vat Manager Plus, made by Tru-Test, regulates temperature and agitation, and monitors critical incoming and in-vat milk temperatures and rates of temperature change. The unit, with its supporting online interface, holds memory for data recording, storage and audit requirements and reliably warns of cooling problems inside and outside the vat.

Text messages and emails generated by Vat Manager Plus to multiple devices will alert farmers if their milk cooling is not on track. Early notification includes milk which is too hot, too cold or taking too long to cool, plus wash, power and hardware faults.

Tru-Test general manager New Zealand, Verne Atmore, says cooling problems can be difficult to detect; they may be caused by a farmer forgetting to throw a switch, a power outage or hidden pre-cooling or vat problems.

“At present, discovery of milk cooling issues

regularly happens at tanker pick-up or when the farmer gets a temperature grade. Farmers bear the cost of detecting poorly chilled milk late in the process. They receive no payment for rejected milk.

“Vat Manager Plus will help make latent cooling problems visible so farmers can investigate. With tighter control of onfarm cooling and early response to issues as they happen, farmers will have better control over the quality of milk presented for sale and will maximise the payment for their efforts,” Atmore says.

The company says industry flow-on benefits from farmers using the product could include a greater national milk yield at current inputs and removal of waste from the dairy supply chain.

“In the bigger picture, we are moving towards solutions that show New Zealand at the global forefront of responsible dairying,” she says.

Vat Manager Plus is a robust vat-side unit with temperature display easily viewable at a distance, in low light and extreme brightness, and includes high-specification system components and temperature probes. It provides a vat-side 30-day history of the vat’s contents, complemented by longer history online.

The product is priced

at $1795 plus installation cost.

Tru-Test also anticipates launching Vat Manager Auto, a ‘premium’ monitor-controller which will automatically turn on vat

and side wall refrigeration and signal vat volume alerts.

The company also makes livestock weighing and ID systems, dairy refrigeration and data management systems.

Tougher milk cooling standards are being introduced.

Text messages will alert farmers if milk cooling is not on track.

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40 // MACHINERY & PRODUCTS

Kia Sportage 2016 model.

Bang-up SUV just what they want

AS THE top selling model for Kia Motors, the arrival of the 2016 Sportage SUV is timely considering New Zealand’s current love affair with this type of vehi-cle.

Drawing on a pedigree that saw the Sportage become the first compact SUV on its introduction in 1996, the outgoing model went on to sell 1.6 million vehicles in 2010-2015.

The fourth-generation 2016 model is bigger, more sophisticated and offers higher levels of comfort and technol-ogy. Its new look has lots more ‘pres-ence’ -- the headlights are located higher and combine with the ‘tiger-nose’ grille to create a distinctive frontal aspect. A redesign sees a 30mm increase in wheel-base, an overall lengthening of the vehicle by 40mm and a swept back rear spoiler which reduces overall drag, but more importantly results in more room for pas-sengers and luggage. Inside, high quality, soft touch materials are used throughout, and leather is the favoured upholstery on

all models except the entry level LX ver-sion.

For power, the choice is between three engines: a 2L petrol that puts out 114kW / 192Nm torque, a 2.4L delivering 135Kw / 237Nm, and a 2L diesel developing 136kW and a gnarly 400Nm.

A redesigned fully independent sus-pension system and electric power steering are tuned specifically for NZ conditions, refining the handling, ride comfort and stability. These and the inte-rior improvements greatly reduce noise and vibrations.

As with any new model introduction, safety is to the forefront, seen in a raft of model dependent inclusions such as blind spot detection, lane change assist, rear cross traffic alert and a forward col-lision warning system. Then there is sat-ellite navigation, a reversing camera, rear parking sensors, a panoramic roof, Xenon HID headlights and a hands-free powered tailgate function.

These features bring the Kia Sportage bang up to date and will find favour with those looking for a fully specified com-pact SUV.www.kia.co.nz


Giltrap plays hardball with Hardox

WITH A history dating back 57 years to 1959, it’s safe to say Giltrap Engi-neering knows how to manufacture trailers. A first look at its recent Con-struction series suggest this is so.

Brought about by requests from contrac-tors for a reliable heavy-duty trailer for general work, and and able to add a silage bin during the season, the series also lends itself to construc-tion and quarry site work.

There are four stan-dard models with volumes 6-11 cu.m and nominal capacities of 12-22 tonnes. The trailers have a heavy-duty chassis that carries a tipper body made from 6mm Hardox 450 steel. Hardox is up to 35% lighter than traditional fine grain steels, resulting in a lower machine tare weight and a greater payload. The mate-rial is also extremely resis-tant to knocks, dents or scrapes inflicted by boul-ders or rubble; it has rated yield strength of 1100 MPa compared to a typical mild steel’s 250 MPa.

Units are supplied as standard on heavy-duty

tandem axles; the braked front axles have oscillating beams using oil impreg-nated nylon bushes for longer service life. Over-size 560-60R22.5 tyres ensure good usability in poor conditions. To ensure some comfort for the operator, col spring drawbar suspension com-bines with a 25 tonne rated swivel eye coupling or an optional K80 ball hitch.

Calling on its lengthy expertise, the team at Oto-rohanga has come up with design features to make the unit more durable and user friendly.

With a body width of 2735mm -- versus a con-tainer landed import mea-

suring only 2250mm -- the trailers are said to be extremely stable and to travel well over difficult terrain; and their rated capacities are achieved using lower sides, result-ing in a lower centre of gravity and increased safety.

Another clever design feature is the lower cylin-der mount for the tipping mechanism. This uses a four-way pivot system which counters side-forces that threaten to damage the cylinder, the internal seals or ultimately the trailer body, during emptying on level or slop-ing ground.

The standard pack-

age includes an extended front headboard to protect against overspill, a high clearance hydraulic tail door, a hydraulic parking stand, and, on the safety front, robust mudguards and LED lighting. Options include rear door spread-ing chains, a sprung steer-ing axle and rollover silage sheets.

Sales and marketing manager Eric Crosby com-mented “we have sup-plied a number of units to customers which have exceeded their expec-tations, and we’re now building a number of bespoke units -- a further option with this series”.www.giltrapag.co.nz


Giltrap’s Construction series trailers.

Palatable, convenient and cost-effective, New Cattle Fodder Beet Block, is a molasses-

based supplement to help prevent phosphorus deficiency and balance other minerals

lacking in your herds’ diet.

To order today or learn more, phone 0800 287 325 or visit sealeswinslow.co.nz

New Cattle Fodder Beet Block

Helping grow the countryFreephone 0800 864 774 www.pggwrightson.co.nz

In a fl uid world, one name stands fi rm. Your business’ irrigation system is an important investment. One you

want your supplier to stand by and stake their name against.

PGG Wrightson has been a proven name in water and irrigation solutions for over 40 years, boasting an expert technical team and access to the latest irrigation and pumping technology from around the world.

We’re committed to going the extra mile in designing, developing and maintaining world-class irrigation systems for New Zealand farmers. We always will be.

So wherever you are, PGG Wrightson is here to keep your water fl owing.

To help you grow your business, there’s only one name you need to remember. PGG Wrightson.

Dairy News 08 March 2016

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Transcript of Dairy News 08 March 2016