dairy news australia august 2014

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august 2014 ISSUE 50 // www.dairynewsaustralia.com.au50th

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TASSIE TIGERSCan Victoria match Tasmania’s recent growth this season?

PAGES 4-7

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Dai ry NewS aUSTraLia august 2014

NEWS // 3

Queensland farmer Luke Stock can see positive signs for his state’s industry after a tough three years. pG.07

Cattle expert Phillip Poulton says farmers must determine cause of downer cows to ensure they are properly managed. pG.26

WA farmer Rob Giura has installed a cut and carry system to complement his new milking robots. pG.17

NEWS ��3-11

OpINION ��12-13

AGRIbUSINESS �� 14-15

MANAGEMENT ��16-18

bREEDING MANAGEMENT ��19-20

ANIMAL HEALTH �� 21-26

HAY & SILAGE ��27-31

MACHINERY &

pRODUCTS �� 32-34

Saputo opens up on WCB battleCANADA’S LARGEST milk pro-cessor has opened up about the pro-tracted battle to acquire Australian company Warrnambool Cheese and Butter, saying it was a battle worth fighting.

In its annual report released late last month, Saputo says it has made 23 acquisi-tions since becoming a public company in 1997, but Warrnambool was the most public acqui-sition process so far.

In a question and answer segment in the annual report, Saputo chief executive Lino Saputo Junior said the acquisition was filled with exciting twists and turns.

“It kept everyone on their toes;

our team came together and rose to the challenge,” he said.

Saputo paid $519 million for 88% of the listed processor.

Saputo Jnr said he enjoyed get-ting to know the Warrnambool employees, suppliers and share-holders, and letting them get to know Saputo.

“A memorable moment occurred at meetings we held with Warrnambool farmer shareholders.”

Saputo has a cor-porate culture that explicitly values the employee.

Saputo Jnr said Saputo started as a

family business in the dairy prod-ucts industry where quality was the only path to success.

“You soon realise no one person can safeguard quality, and a high level of trust must be placed in your

employees. “As we grow larger, we find this

reality does not change.“When we acquire a new com-

pany, I take part in the integration by personally visiting the facilities.

“I want to make sure manage-ment understands and applies our corporate culture from the start.

“Our culture is a key differen-tiator for us; we know we couldn’t experience the same success with-out appreciating and trusting our employees and providing them with the right training, tools, resources and support.”

Saputo Jnr said the company will learn from its takeovers in Canada, US and Argentina to guide its Warrnambool operation.

“The companies we acquire usually find they can manage more effectively because they gain access to our knowhow, international experience, financial resources and support.

“Saputo intends to invest in Warrnambool to accelerate its growth, and create new opportuni-ties for the company, its employees and suppliers.

“We see potential to increase manufacturing capacity, grow milk intake, drive improvements in operating efficiency, and support innovation and new product devel-opment.”

He said Saputo has a lot of confi-dence in the Warrnambool manage-ment team.

Former WCB chief executive David Lord is now president of its dairy division in Australia.

It is a great business with a strong heritage—one that Saputo intends to preserve, Saputo Jnr said.

“Moreover, we will retain and grow current brands while we seek to introduce new product lines.”

SUDESH kISSUN

RMD address changesRMD delivery addresses for farmers are being phased out by Australia Post and replaced with a road number�

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Lino Saputo Jnr

Cows grazing on Chad Parker’s dairy farm on the sunshine Coast hinterland. Mr Parker has achieved an annual growth of 25% over the last five years. See page 27

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4 // NEWS - MILk pRODUCTION

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Southern supply sees production rise slowlyAUSTRALIA’S MILk production has edged ahead marginally over the past year on the back of big gains in Tasmania and parts of Victoria.

However, volumes continued to decline in Queensland, New South Wales, Western Australia and South Australia, leaving the industry precariously placed.

The 0.41% national increase was achieved thanks to big gains this autumn and June that helped to overcome a sluggish start to the financial year.

Tasmania with a 5.85% rise was the biggest growth area, followed by eastern Victoria, while Queensland continued to shrink, recording a 5.64% drop in production.

South Australia and New South Wales also fell by more than 3%.

Farmers are calling for consistent milk prices and ongoing positive signals from manufacturers to bring sustained confidence back to the industry to stimulate more growth and investment.

While pricing concerns dominate

across the country, the production figures were also dampened by poor weather conditions in early 2013 before a return to more buoyant output over recent months.

Industry leaders are expecting modest growth over the coming season.

Dairy Australia industry analyst John Droppert said the industry finished the year with a strong recovery, particularly in states with export exposure.

“Farmgate prices were on a high driven by high export prices over the season,” Mr Droppert said.

He said a good season, strong price and growing positivity contributed to the late surge and that momentum should continue into 2014-15 where an incremental 2% growth is forecast.

“That builds off the momentum of the last part of last season and we’re expecting most farmers will be able to make some decent money this year for the second year in a row,” he said.

“We’ll probably see more growth this year because farmers have had time to get their balance sheet sorted out and pay off creditors, so they

can go into this spring in a reasonable financial position.”

However, Mr Droppert warned that a substantial drop of about 30% in export commodity prices meant farmgate prices won’t be as high.

“We’re not going to see the same prices as last season, but that’s not to say they’re going to be bad. The major exporting manufacturers are forecasting a $6.10-$6.30kg MS closing price,

and that’s still pretty good territory,” he said.

“Six dollar plus prices are prices where the majority of farmers should be able to make decent money.”

Mr Droppert added that seasonal conditions were good and most farmers were set up for a good spring.

“But as we saw in 2013 the wheels can fall off fairly quickly. It comes

down to whether we’re going to have an El Nino or not,” he added.

Mr Droppert said Tasmania’s growth agenda, including the development of new

farms, expansion of irrigation, and a sense of confidence pushed by processor investment, had helped it to record production levels.

“That’s a bit harder

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to replicate in the other states. It’s not only the plan; it’s also the sentiment that comes with the processors investing. It’s good for confidence when you see processors investing money and the government is keen as well,” he said.

Mr Droppert said farmers in other areas were more cautious about investing in long-term expansion.

“In south-west Victoria many farmers were burnt

last year and people in fresh milk regions had experience with surplus milk being penalised, but there are quite a few young farmers who see a good future for the industry who are looking to grow.

“It’s about sustaining the confidence that is there and processors proving that they want milk for more than just this season if they want people to invest in the longer-term.”

Most farmers are set for a good spring.

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VICTORIA REMAINS Australia’s biggest milk producing state and has made a steady increase over the past 12 months.

Gippsland and north-ern Victoria were the growth areas with 3.19% and 1.67% respectively, while the western region experienced a slight decline of 0.49% after a disastrous start to the year caused by low prices and a bad 2013 autumn.

State leaders believe the steady growth can be maintained during 2014-15, although their optimism is muted by concerns about weather conditions.

The state’s three regions are each produc-ing about two billion litres per year.

Northern Victoria hasn’t had negative growth period in more than three years.

“We’re building on a solid trend,” Murray Dairy chairman Malcolm Holm said. “Even though it’s a small percentage it’s still solid growth, especially given that it was tough last season in regards to milk prices and conditions. We’ve done pretty well.”

Mr Holm said there was capacity on farm and in the milk processing sector to continue that growth. “It’s still pretty early in the season but it would appear with the current weather

conditions that we’re set up for a good spring,” he said.

The region has a con-fident outlook pushed by strong on-farm invest-ment.

“People are investing fairly heavily into their farms and I think we’ll see that converting into growth,” Mr Holm said.

“We had a good price last season. It has come back a bit but it shouldn’t affect us too much.

“We’re well placed for people to get into dairy and we’re still the largest producing region in Aus-tralia with good steady growth.”

South Gippsland dairy farmer Graeme Nicoll said the season had been reasonably good and he expected the region’s steady growth of more than 3% to continue.

“The economics have been good, the optimism has been high and the

season has been reason-ably good for some and very good for others,” Mr Nicoll said.

“Gippsland is a very stable region that often doesn’t express the vola-tility of other regions, due to the relatively stable cli-mactic conditions and the style of farming with a very strong pasture focus,” he said.

“When the eco-nomic dials are right for Gippsland, we’re in a posi-tion where we can capi-talise on our strength in growing grass. Home-grown fodder is the eco-nomic driver of the industry.”

Mr Nicoll said his farm’s production was up. “The past 12 months have been fantastic for us,” he said.

“Once the eco-nomic drivers are there, Gippsland has demon-

strated in the past 12 months that production will grow. The opportunity is there.”

Western Victoria has suffered a small decline, largely on the back of a poor 2013 season, but has gained ground in recent months.

WestVic Dairy chair-person Lisa Dwyer said the region was coming off an extraordinarily diffi-cult year.

“We had a most unfavourable autumn period last year so you would expect there to be a significant lift for the corresponding months in 2014, particularly as this year’s season has been near enough to perfect in most areas,” Mrs Dwyer said.

“When you combine a better season with much more favourable milk pricing you would expect

to see continuing good figures.”

However, Mrs Dwyer said that farmers were “gun shy” about predicting too much success.

“We’ve had lessons on how quickly a season can turn around and there are ongoing concerns about the likelihood of an El Nino this spring,” she said.

“While there is signifi-cant confidence around this year, we’re all rather cautious about the outlook and a number of farmers are still recovering from that tough period.”

Mrs Dwyer said price and conditions remained the two fundamental drivers of success.

“We really need a couple of consecutive good seasons for farm-ers to feel confident in expanding and have the financial resources to do it.”

NEWS- MILk pRODUCTION // 5

Victoria ready to expand

Malcolm Holm Graeme Nicoll

CONFIDENCE TO invest remains an issue in New South Wales, which saw its milk production fall by more than 3% compared to the previous finan-cial year.

Dairy NSW chairman Michael Perich said lack of confidence was the biggest issue facing the industry.

“That really comes from the proces-sors giving us the confidence to con-tinue to invest on farm. It’s not just price; it’s more about confidence and long-term strategy,” he said.

Mr Perich said the industry was constrained by the capacity of farmers willing to invest, not only on farm infra-structure but on consultants or advi-sors to assist them in moving forward.

He said he doubted the industry could grow but he hoped it could stop the decline.

“With the Queensland industry retracting we’ve got some opportuni-ties, along with the export market.”

Conditions in New South Wales have been variable but mostly quite dry “which is causing a big issue for farm-ers without irrigation.”

Western Australian Farmers Feder-ation dairy president Phil Depiazzi said the state’s 2.73% decline was a major concern that could only be addressed by paying better prices.

A recent two cent lift would go some way to halting the decline and stimulate more interest in growth, but he said it wouldn’t solve the problem.

“What we’re after is clear signals from the processors that they want milk and are prepared to pay a reason-able price for it,” Mr Depiazzi said.

“We’ve got some farmers down

around 45 cents and that’s just not enough. The Sustainable Price Report suggests we need mid-50s to get a rea-sonable return on assets and to get guys motivated to halt this decline in milk production.”

Despite the ongoing price concerns, Mr Depiazzi said there was a slightly more positive feel about the industry.

“I don’t believe it will decline in the coming 12 months. The figures will show we struggled with a wet spring last year that limited production.

“This year we’ve had a good start. Grain crops are looking pretty good and that should stimulate a bit of pro-duction through summer, as should a summer incentive program.”

While WA volumes have dropped, some farms are increasing production and predicting better times ahead.

Price critical to NSW, WA growth

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6 // NEWS - MILk pRODUCTION

TASMANIA IS becom-ing the star performer in Australia’s dairy industry.

The island state is lead-ing the way in growing Australia’s milk output with a record-breaking 5.85% increase in the past year.

The state’s milk pro-duction reached a new high of 804.6 million litres in 2013-14, easily passing the previous top of 788 million litres.

The big increase has been attributed to an “awesome autumn” and good prices encouraging farmers to reinvest, and industry sources predict the increase will be even higher this year.

Tasmania now accounts for 8.7% of national production and the state’s strong growth contrasts with the rest of Australia where produc-tion grew by only 0.4%.

DairyTas executive offi-cer Mark Smith said the figures show what can happen when conditions are favourable and milk

prices are high.The 5.85% rise was

mainly driven by huge increases of between 15% and 19% in autumn and June.

“A good season and high milk price combined to give farmers incen-tive and opportunity to increase their milk pro-duction,” Mr Smith said.

DairyTas is predicting 10-15% growth in 2014-15, adding up to 100 million litres more to the state’s milk flow and closing in on an industry target of pro-ducing 350 million litres extra between 2012 and 2018.

DairyTas Chairperson Cheryl McCartie said the season had started slowly but had been boosted by an awesome autumn.

“Our autumn produc-tion was up 15-20%. We had a slow start to spring and cows didn’t peak as well as we’d hoped but they held production longer,” Mrs McCartie said.

“When you’re up nearly

20% for three months of the season, it doesn’t take long to turn things around.”

Ms McCartie said the good milk price had been an extra incentive for farmers that allowed them to capitalise on the good seasonal conditions.

“Because of the milk price, farmers were able to make key decisions around extra feed and pas-ture renovation and that added to the on-farm pro-ductivity. It sets the cows up well for holding pro-duction and being in good condition coming into this season,” she said.

“I know quite a few farmers who bought 20% more hay than normal because the milk price allowed for that.”

Ms McCartie said farmers had benefitted

from lessons learnt in previous years in managing potential feed shortage risks and making early winter feed purchases.

“There’s also been more focus on home-grown feed and hopefully we can see that translate

to their bottom line.”Ms McCartie said the

industry was reason-ably confident of achiev-ing 10-15% growth in the coming year.

“The talk around the industry is that with a few more conversions coming on this season and existing

dairy farmers reinvesting in their farms on the back of a good milk price, we’re pretty optimistic we’ll get 10-15% more in 2014-15.”

Ms McCartie added that while some farmers were still consolidating debt, Tasmanian dairy was well

on the way to reaching its 2018 industry target.

“Our focus is on new farms and growing farms sustainably so we can show people that we’re looking after animals, people and the environ-ment. It’s all looking posi-tive,” she added.

Ambitious target on trackCheryl McCartie


NEWS - MILk pRODUCTION // 7

QUEENSLAND FARMERS fear the state’s struggling milk output will con-tinue to decline unless they get positive signals from the market.

The state has again experienced the biggest production drop in Australia, a 5.34% decline compounding a fall of 5.6% the previous year.

Low prices and bad weather con-tinue to cause negativity in the state.

Queensland Dairy Organisation President Brian Tessmann said it was frustrating and abundantly clear that Queensland needs more milk to cater for its own needs “but the market is failing to provide a response that ade-quately stimulates an increase in pro-duction”.

Mr Tessmann said the clearest signal that farmers can receive is with the farmgate price.

Mr Tessmann said the state had seen some small response in recent months with a lift in price, but this followed three years of depressed prices and huge costs incurred with floods, cyclone, and drought.

“We have lost more than 100 farm-ers in just over three years so it is clear there is a long way to go for the trend to

turn around,” he said.While welcome,

Mr Tessmann said the recent price rises were not enough alone to completely address the shortfall.

“Farmers will be looking for an even stronger indication in the future of the market’s value for fresh Queensland milk.

“Queensland dairy farmers could also do with a couple of years of good seasons free of damaging floods and drought to improve their confidence on the back of recent price movements,” he said.

Lockyer Valley farmer Luke Stock said the $1 litre supermarket price war, Queensland’s reliance on the domestic milk market and poor weather condi-tions were the major factors contribut-ing to the fall.

Mr Stock said consumers can’t be blamed for choosing cheaper generic labelled milk. “However, I don’t think they realise when they make that cheaper option they are putting Queensland farmers out of business.

Maybe if they had a better knowledge of what their actions are implementing they may make a different choice.”

Mr Stock said the general feeling was that the price being paid to farmers needs to rise by

10-12 cents for farming to remain viable and return a profit.

The state has also been hit hard by wildly fluctuating weather. “There wouldn’t be a dairy farmer in Queensland that hasn’t been affected by floods, cyclones or drought in the past three years,” Mr Stock said. “Being able to combat natural disasters all comes back to being able to best manage the risk associated within our own farms.”

However, Mr Stock could see some promising signs.

“The breakthrough that Norco has had with the successful trial shipment of fresh milk to China within seven days, down from the typical 14-21 days, could provide another market place for Queensland milk where the prod-uct is actually treated with the respect it deserves, not downgraded as it is

in our own marketplace by the major supermarkets,” he said.

‘Mr Stock said although there was a lot of negativity, the northern industry

had faced challenging times before. “It will always be our ability to produce and provide a quality product that will see us pull through,” he said.

Weather, prices hurt Qld

SOUTH AUSTRALIA had the second biggest fall (3.79%) but DairySA chairman and Mt Gambier district farmer James Mann believes that trend can be reversed.

Mr Mann attributed about 40% of the loss to one farm going into receivership and said that volume in general was down as a flow on

from a poor 2013 that left cows in lesser condition and saw more heifers exported to support cash flow.

“I’m quietly confident that we’ll recover parts of that. I understand we’re up a bit at the moment,” he said.

“If seasonal and economic conditions become more favourable, people will be able to

resume their former programs. Sustained prices and margins will deliver more growth.”

Mr Mann said there was less need in the past 12 months to sell heifers for export which should leave more numbers in the system this year.

“There’s a bit more confidence around. I hope this year’s milk

price ends up so people have at least two successive reasonably successful years. If that happens then confidence will be okay.”

Decline can be stopped

Luke and Rebekah Stock with their family.


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8 // NEWS

DAI RY NEWS AUSTRALIA AUGUST 2013

6 // NEWS

THREE YEARS ago Barry and Linda Morgan were on top of the world.

The dairy farmers from near Cobden in south-west Victoria had been named 2010 Sharefarmers of the Year in the Great South West Dairy Awards and had won third prize in a state-wide award for creating wealth.

The irony of the third placing in the Genetics Australia breeding award is not lost on them today as they ponder their future in the industry after enduring the toughest season in their 24 years on a dairy farm.

Like many dairy farmers in south-west Victoria they are battling to overcome a ‘perfect storm’ of conditions – low milk prices, a prowlonged dry spell, poor grass growth and high feed and input costs.

The new farmer finance package might provide some help through renegotiated loans but the Morgans are not sure if it will be enough or worth the effort of battling through the difficult application process.

The Morgans have noticed a slight improvement over the past month with the new milk price, good rain and the lower Aussie dollar.

But they don’t know if it’s enough to see them through.

“We’re going to talk to our accountant about whether we can service the debt, sell the cows or have someone else come in and run the farm,” Barry said.

“We entered the dairy industry by choice and we’d sooner leave now while we still have the choice. It’s got to the

stage that it just wears you down…it’s just depressing,” Linda added.

Last September things were looking pretty good. The Morgans had booked a holiday to Egypt (which they later tried to cancel but couldn’t get a refund so went on borrowed money) and were tipping an okay season, despite the low milk prices.

Then the rain stopped.“They say it wasn’t a

drought but they say it was the driest seven months on record…how does that figure?” Barry asks.

They realised the situation was “going pear-shaped” in January and started buying hay supplies and trying different crops.

The Morgans planted four acres of turnips but lost the lot after one stinking hot day.

Millet, oats and rape crops were tried but with minimal growth.

The hay and silage cut was down at least 20%, costs were escalating and income stagnating.

“Chopper prices were disastrous. We were getting 63 to 75 cents whereas last year was $1.20. It was the same for bullocks and bobby calves,” Linda said.

The lack of and cost of quality feed left the Morgans forking out huge money while struggling to maintain their cows in barely average condition.

They fear the lack of quality feed has compounded the problem by affecting the health and production of their mainly Friesian herd.

At their lowest point earlier in the year they were down 3000 litres a day on their 2012 production levels. By the end of July that had picked

up to a 1000 litre deficit but that still counteracted the increase in milk price.

Last year they milked about 400 cows on their 226ha property but look to reduce that to around 350 or 360 this year.

“There’s no incentive to keep them. We’ve had to cut costs and try to build a better herd by keeping the better producers and weeding out those with health problems and those not producing as much,” Barry said.

“We used to persevere

A perfect storm last season of low milk prices, poor conditions and high input costs created heartache for many farmers. Cobden farmers Barry and Linda Morgan tell their story to Rick Bayne.

Casualties from a perfect storm

and give them a second chance, try to pamper them through, but we can’t do that now.”

In May to July the farm spent $52,000 to purchase 206 tonne of hay. “We’ve never had to do that before in the 20 years we’ve been here. We only fed what we had to but it was still a huge cost,” Linda said.

The poor season has had ramifications across the region.

“Because there’s no money around you go for the cheap A.I. straws, don’t do the work on the tracks…it flows on through the whole community,” Linda added.

The Morgans have share-farmed with Gippsland-based owner Barry McGrath for the past 19 years.

“Nineteen years working for the one bloke – that’s not bad so we must have been doing something right,” Barry said.

“We have a good relationship. There is a lot of trust. He leaves us to run it and we might not see him for six weeks.”

The farm invested in a new 44 Rotary dairy two years ago which led to greatly improved productivity. “That was the best thing we ever did. We probably save two or three hours every day,” Linda said.

However, adding to their woes this year a fuse

blew in the dairy in March, causing a fire which forced them to milk on a neighbouring property for a few days.

Barry had come from a beef farm in Gippsland and both maintain interests outside of dairy that are helping to keep the farm afloat. Barry invested in a beef herd a few years ago and Linda works part-time as a school laboratory assistant.

“We’ve had to sell beef this year to prop up the dairy farm but we shouldn’t have to do that,” Barry added.

Now they ponder a future that might not involve dairying, the industry they committed to all those years ago for its lifestyle and appeal as a source of regular income.

They still like the idea of share farming but none of their three children are committed to the industry.

“If you’re building an asset during a tough season that’s all right but if the milk price goes up everything else goes up and so we’re no better off,” Barry said.

“At the same time it’s hard for young people to get into the industry.”

Although uncertain about their futures, the Morgans say the dairy industry has been good to them until recent times.

“The thing we have to look at is what else do we do?” Linda ponders.

Barry and Linda Morgan

The Morgans’ herd.

THIS TIME last year Barry and Linda Morgan were pondering their future in the dairy industry.

The farmers from near Cobden in south-west Victoria were battling what they described as their toughest season in 24 years on a dairy farm.

The ‘perfect storm’ of conditions – low milk prices, a prolonged dry spell, poor grass growth and high feed and input costs – had them planning to exit the industry.

A year later things have turned around.

The milk price is up, the weather has been near enough to perfect, production is up and they’ve made a decent profit.

Linda Morgan says it took some time to turn around from the dire situation, but their persistence has paid off.

“We really did think we would chuck it in,” Mrs Morgan said. “It took some time to recover but we got there.

“When we started getting good milk prices we had to pay off the creditors for the hay and grain we’d been feeding, but we managed to get all that done and ended the year with a profit, which was amazing.”

Mrs Morgan said their priority during the lean period was to protect the cows’ health, which led to high imported feed costs.

However, it was hard to maintain the herd in peak condition and some ramifications of the bad

Blue sky after perfect storm

start to 2013 continue to be felt.

The farm’s calving pattern has expanded to counteract the lesser condition of the herd at joining and they finished with more empty cows than normal.

But the Morgans persisted. “We pulled our head in and got down to the job,” Mrs Morgan said.

The turnaround was prompted by a mixture of price and conditions. “I think if the season weather-wise is perfect, a good milk price is just a bonus,” Mrs Morgan said.

The farm has signed on to Bega’s three-year growth and sustainability program.

“We seem to be able to shop around more

now… there seem to be more options. I still get annoyed that we don’t know our milk prices when we start the financial year. It’s hard to plan when you don’t know what you’re going to get.”

Now the Morgans are on the front foot.

The cows are healthier, the grass is growing,

production is on the rise and their confidence has returned.

The farm is now 2000 litres per day up on last year and

Mrs Morgan is confident that upward trend can continue.

“We were thinking of finishing in March next year, now we’re really motivated to continue,” Mrs Morgan said. “We survived.”

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Linda Morgan

Dairy News Australia, August 2013.

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“I think if the season weather-wise is perfect, a good milk price is just a bonus.”– Linda Morgan


NEWS // 9

WA farmers demand higher milk pricesDAIRY FARMERS at last month’s WAFarmers Annual Dairy Conference united to call for more equitable and sustainable farmgate milk prices.

Delegates unanimously determined to call on pro-cessors to raise the price paid per litre to farmers as demand outstripped supply.

“At the conference, we were presented with evidence showing the demand for drinking milk had outstripped produc-tion for the first time ear-lier this year,” WAFarmers Dairy Council president Phil Depiazzi said.

“Additionally, the farm gate price in WA does not match up to that in other states which supply simi-lar markets to ours.

“For example, produc-ers in northern New South Wales and Queensland are paid more than 55 cents per litre, well above that paid to WA producers.”

Mr Depiazzi said these conditions, paired with the outcomes of the Sustainable Milk Price Report (by the Collective Bargaining Group and WAFarmers Dairy Council) showing 55 cents per litre was an appropriate benchmark,

made it imperative for processors to lift their game, and their prices, in order to ensure present and future supply.

“It is in the best inter-ests of processors to come to the table with more competitive prices to secure the future viability and sustainability of WA’s dairy industry,” he said.

The heads of Brownes, Harvey Fresh (which was taken over by Parmalat in April) and Lion took part in a panel discussion as part of the conference.

Brownes Dairy manag-ing director, Ben Purcell, told ABC Radio the three

processors had increased prices back to farmers by $25 million a year over the past three years.

Brownes hasn’t lifted its farmgate prices this year.

“The difference for this year, rather than make a commitment up front, we’ve said we’re going to put prices up in the market to our customers, and see to what extent we can get prices out of the market, and based on affordability make an assessment later on on what that means to farmgate prices.”

A conference delegate asked why Queensland farmers receive more per litre per milk than farm-ers in WA.

Harvey Fresh general manager, Paul Lorimer, said the farmgate price needs to move but needs to move in a sustainable format.

“To make one big jump would be irresponsible for all parties in relation to where we need to be. It needs to move in a con-trolled manner.”

Lion managing direc-tor, Peter West, who joined Lion six months

ago, told ABC Radio the economic return for both farmers and processors isn’t where it should be.

“Essentially, I don’t believe Australians do pay the right price for dairy or milk.

“For the amount of work and effort that goes into that, it’s undoubtable they should pay more.”

Mr West said value-added products is the best

bet to increase returns for farmers.

“We’re very clear that some categories offer greater growth and some don’t achieve the same level.

“The areas where we see strong very growth is yoghurt, speciality cheese and flavoured milk.

“They are three cate-gories where we see any-where between 5%-7%

growth and we need to actively market and bring innovation into those cat-egories and drive that growth.”

Mr Depiazzi was re-elected Dairy Council president at the annual general meeting held with the conference. Michael Partridge and Paul Ieraci were re-elected as senior vice-president and vice-president respectively.

Nicole and Rodney May with their certificate for being in the Top 100 dairy farmers for the 2014 Milk Quality Awards.

Paul Lorimer of Harvey Fresh, Ben Purcell of Brownes and Peter West of Lion.

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10 // NEWS

Council pushes dairy’s worthDAIRYING IS worth a lot more to Gippsland’s Baw Baw Shire in Victo-ria than the $222 million worth of manufacturing it generates.

Dairying is an essen-tial part of the landscape and lifestyle of the Baw Baw region and the shire council goes out of its way – including overseas trade missions - to promote and support the industry.

The shire’s connection to dairy serves as a proto-type for municipal-indus-try interaction.

The shire actively pro-motes all agriculture enterprises, ranging from trout fishing to apple

growing, but it’s dairy that takes centre stage.

CEO Helen Anstis described Baw Baw as a growing municipal-ity and “we want to make sure we’re creating local employment opportuni-ties”.

“We see our agribusi-nesses as a real oppor-tunity to create jobs and growing dairy is a really integral part of that,” Ms Anstis said.

The shire has actively participated in trade mis-sions to the Middle East and in June 2014 to South East Asia.

Dairy is the shire’s big-gest agricultural industry. Apart from the $222 mil-lion manufacturing contri-bution, it directly creates

about 1000 local jobs, sup-ports a vibrant service industry, and is also used in tourism promotions.

Supporting a strong local farming commu-nity, Longwarry Food Park is already exporting into South East Asia, Fonter-ra’s largest milk process-ing facility in Australia is at Darnum, and there is a growing niche cheese making industry in the shire.

“We want to be able to support those businesses to grow so they create local employment oppor-tunities,” Ms Anstis said.

“We have fantastic soil and terrific farming com-munities that provide quality product to those manufacturers.”

The trade missions were primarily aimed at raising the region’s profile for investment and specif-ically promoted high pro-tein milk powders from Darnum and the Long-warry Food Park busi-ness model. This is based around long-life prod-ucts, which are a growing market in South East Asia, and also cheeses, which again are a burgeoning market in South East Asia.

“We wanted to link to the lean and green and perfectly pristine envi-ronment we have in Baw Baw,” Ms Anstis said.

The missions also capi-talised on a recent seven chefs tour in Gippsland focused on cheese and agricultural products.

Ms Anstis said the local community and the shire appreciated the important role played by dairy.

Agricultural land is pro-tected by the shire. Even though Baw Baw is grow-ing, the shire is deter-mined to protect prime

agricultural land and has a settlement plan-ning ensuring residen-tial growth is restricted to where towns already exist and doesn’t interfere with prime agricultural use in greenfields sites.

“It is important we protect that agricultural land,” Ms Anstis said.

The shire also main-

tains close links with dairy farmers.

“We have a number of councillors who are dairy farmers so they are a con-duit to the dairy industry,” Ms Anstis said. “We work closely with the manufac-tures and we’ve recently developed a business advi-sory board and invited a farmer on to that board.”

Helen Anstis

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The Baw Baw Shire offices in Warragul.

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NEWS // 11

EUROpEAN DAIRY companies joining the Global Dairy Trade (GDT) auction reflects that Europe is an expanding market focusing more on exports, says GDT director Paul Grave.

This is accelerating with CAP (EU common agricultural policy) reform and farmers’ quotas lifting in 2015. German cooper-ative Molkerei Ammer-land is to become the third European seller on GDT.

The move is welcome as it further cements the online dairy auction as the key platform for interna-tional dairy trade, says Mr Grave.

“It deepens the liquid-ity of the market – the number of people and the volume going through. It improves price transpar-ency and recognises the growing importance of

GDT in international trade in price setting.”

The other Europe-ans in GDT are Arla, Den-mark, one of the first to join, and Euroserin, France. Molkerei Ammer-land will join an overall existing seven sellers from the beginning of Septem-ber, bringing sweet whey powder to the auction for the first time.

Whey powder is new to the GDT – it comes out of the cheesemaking process which is bigger in Europe than Australia and New Zealand.

“It’s a non-Fonterra product so it makes the market more credible again.”

Molkerei Ammerland, one of Europe’s leading dairy cooperatives, gath-ers milk from 2000 farm-ers in northwest Germany, and processes 1.5b kg of milk for sale to 50 coun-tries worldwide. The co-op makes cheeses, butter,

German co-op joins GDTpAM TIpA

whey powders, milk pow-ders and fresh dairy prod-ucts, and has 125 years experience.

Grave says GDT wants to add more sellers and everyone joins for differ-ent reasons.

“It is a great window into the global market-place, it enables a lot of

them to transact and grow their market presence and grow their visibility in a way they haven’t been able to do before – forge their own way into the market-place.”

GDT enables partici-pants to do business for themselves rather than use traders or third par-

ties. “It is a good price ref-erence so it enables them to determine what the market price is on the day and have a more indepen-dent, trusted, transparent reference price.”

Over the last year $5b was traded through the platform and one mil-lion metric tonnes, which

is huge, says Grave. With eight sellers from seven countries and 650 buyers from 90 different coun-tries, it has gained huge momentum since launch-ing in 2008 by Fonterra with one product, one seller and 100,000 t of product.

The introduction

of sweet whey powder extends GDT’s offerings to nine product groups.

Molkerei Ammerland chief executive Ralf Hin-richs says “exports already make up 49% of our sales, and will become increas-ingly important as we increase our production capacity.”

FONTERRA HAS maintained fourth place in Rabobank’s top 20 dairy companies.

Chinese giants Yili and Mengnui outperformed their peers with 14% and 20% sales growth respectively.

Otherwise, the largest dairy companies are “reason-ably entrenched,” Rabobank says. Switzerland’s Nestle retains number-one spot followed by French compa-nies Danone and Lactalis. Nestle had a 2013 turnover of US$28.3b, Danone US$20.2b, Lactalis US$19.4b and Fonterra US$15.3b.

Yili, with a turnover of US$7.6b, entered the top 10 for the first time, jumping to 10th spot from 12th last year on the back of market share gains, price increases, product mix upgrades, and/or acquisition. Mengniu pushed up to 14th place boosted by the acquisition of Yashili.

Dairy Farmers of America (6th place) saw a 22% expansion in dairy sales on the back of firm milk prices, and mergers and acquisitions.

Canada’s Saputo continues its march up the list to eighth place, previously ninth, partly due to several acquisitions including Warrnambool Cheese and Butter.

Rabobank says the last 18 months have seen most of the players battle challenging conditions with weak economies and supply constraints undermining sales growth in key markets.

“Against this backdrop, mergers and acquisitions have become an attractive route to growth and profitability,” Rabobank says.

“But with billion dollar deals increasingly hard to come by, dairy giants will need to acquire or tie up with more companies to sustain the same rates of growth in the future. Those adept at acquiring and embracing new businesses will remain well positioned to survive and thrive.”

Sales volumes in most OECD dairy markets have been stagnant with better growth in emerging markets, but these markets have also slowed and are generally harder to access.

Fonterra retains global ranking


12 // OpINION

EDITORIAL

MILkING IT...

RUMINATING

A1 or A2? Ah, forget itMarketing teams behind domestic milk brands just don’t see the big picture�

Lion recently relabelled its Pura milk brand with the slogan “naturally contains A2 protein” in a bid to capitalise on the “health benefits” of the A2 protein promoted over the years by the A2 Milk company�

The A2 Milk company, naturally enough, hit back, saying only its milk con-tains 100% A2 protein�

The A2 Milk company’s promotion of the A2 protein has seen it record a steady rise in market share over the years, and we have a feeling Lion’s new label will help its sales too�

However, it just creates confusion with consumers, who head to the supermar-ket and see “good” milk and “less healthy” milk� Is milk not labelled with A2 then left on the shelf? How is that good for the industry?

It’s a repeat of the marketing of “permeate free”� Consumers were left with the idea that milk contained an unhealthy additive, which must have been detrimental to sales and milk’s image�

If it ain’t brokeNew US biotech start-up, Muufri, wants to produce milk, but without using cows� It would like your donations to do so�

Apparently it’s a fairly simple mixture: six key proteins for structure and function and eight key fatty acids for flavour and richness and they will make milk that tastes and functions just like animal-produced milk�

They’re going to have to excuse our scepticism� Laboratory milk tasting as good as that produced naturally? Come on�

Leaving aside their rath-er dubious claim that 75% of the world’s population have some sort of lactose intolerance, if people want lactose-free milk, they should use the money Muufri wants donated and buy a carton of Murray Goulburn’s lactose-free Liddells�

On a completely unrelated matterFonterra is setting up a model farm in Japan, which will direct techni-cal guidance toward those farmers wanting to improve their competitive-ness�

New Zealand is also ac-cepting Japanese farmers into its specialised dairy school to study cattle-raising at its expense�

Some New Zealand farmers have asked why their co-op is spending money improving the ef-ficiency of their “competi-tors”�

Excuse us for being cynical, but it wouldn’t have anything to do with a certain Trans-Pacific Part-nership agreement that is currently being negotiated, would it?

Japanese farmers are in no mood to open their bor-ders� Looks like Fonterra is happy to play the long game�

One last thingSpeaking of Fonterra, it had to revise its original 2014-15 forecast price of NZ$7kg/MS back to NZ$6kg late last month�

It was quite the shock for NZ dairy farmers, who received $8�40kg/MS in the past financial year due to overwhelming demand from China�

Hindsight has 20/20 vision, but hard to believe that $7/kg it offered for its fixed price pilot scheme this season was undersub-scribed�

The guaranteed milk-price scheme meant farm-ers could choose to lock in up to 75% of their milk supply at $7/kg MS�

DAIRY FARMERS across the country need to make their sup-port of the proposed Free Trade Agreement with China clear.

We have a once-in-a-generation opportunity to secure a deal that will provide significantly greater access to an enormous market, largely untapped by Australia.

Federal Trade Minister Andrew Robb has said he will secure a ‘New Zealand plus’ dairy outcome with China.

That’s a big call – NZ’s access to China is the envy of the world.The Victorian Farmers Federation wants all exports to China

to be tariff-free by 2019.That would provide enormous opportunities.What we don’t want to see is a replication of the result with

Japan, where very little was achieved.To ensure those at the pointy end of negotiations fully com-

prehend how important the opening of China’s borders are, we encourage all farmers to contact their state farm group, the Aus-tralian Dairy Farmers and, most importantly, their local Federal member to state the case.

The Federal Government is under pressure and a successful result in this agreement would be a boost for them, as much as the dairy industry.

Don’t sit on the fence – write an email, take to social media, pick up the phone or call into the local member’s office when you’re next in town.

Make them realise how important this result is. If enough farmers take the time to express their opinion, the

noise generated will be heard all the way at the top.The squeaky wheel gets the grease. Let’s make this an issue

the Government simply can’t ignore.

Our 50th issueOn the release of our 50th issue, and now in our fifth year, we give our sincere thanks to all our readers who have embraced Dairy News Australia with such enthusiasm.

We were told quite clearly by farmers before we launched our first issue that the dairy industry deserved its own newspaper.

We agreed – and we’ve been overwhelmed by the support we’ve received from farmers since.

So thank you everyone, and here’s to the next 50.

Raise your voice for the China FTA

Advertising�Chris Dingle 0417.735.001

[email protected]

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

� Publisher� Brian Hight

� Production� �Dave Ferguson Becky Williams

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Publishing Limited. All editorial copy and

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OpINION // 13

I IMAGINE that if you asked Australians where they believed the major-ity of the total value of the nation’s goods and ser-vices was produced most would say the mines in WA and Queensland or the vast farmlands of this Big Country.

Well, they would be wrong. It’s in the cities. According to a report just released by the indepen-dent think tank, the Grat-tan Institute, 80% of the value of all goods and ser-vices produced in Aus-tralia is generated on just 0.2% of the nation’s land-mass, mostly in the cities.

“Today, cities are the engines of economic pros-perity,” according to the researchers. This may look like a state-ment of the bleeding obvi-ous. However, it is not that straightforward.

The Grattan Institute defines economic activ-ity as the dollar value of goods and services pro-duced by workers within a particular area. It thus comes as no surprise to discover that economic activity is concentrated most heavily in the cen-tral business districts and inner areas of large cities.

According to the report, the Sydney and Melbourne CBDs gener-ated $118 billion in 2011/12, almost 10% of all eco-

nomic activity in Aus-tralia, and triple the contribution of the entire agriculture sector. And they did that from a com-bined total area of just 7.1 square kilometres.

The Sydney CBD alone produced $64.1 bil-lion worth of goods and services: about $100 for every hour worked there

The businesses in these areas provide intel-lectual and highly special-ised services such as funds management, insurance, design, engineering and international education.

In WA, the brain power within the Perth CBD spreads itself across all sectors, notably in manu-facturing and mining with a strong representation of accountants, administra-tors, geologists and spe-cialist engineers.

However, it could be argued that, while these inner city businesses have been churning out the invoices and creating frequent flyer points for their customers as they pay, they don’t actually put food on the table, in the literal sense of the phrase. What do these people eat and where does it come from?

The Grattan Insti-tute says that, a century ago, one in three workers was employed in primary industry, and almost half

of the population lived on rural properties or in towns of less than 3000 people. By 1960, manufac-turing had grown to make up almost 30% of GDP and employed one in four Aus-tralians, with a big pres-ence in suburban areas.

“A great reshaping of Australia’s economic geog-raphy is underway,” it says. “The nation has moved from prosperity coming from regional jobs in pri-mary industry a century ago, to suburban jobs in manufacturing after World War II, to city centre jobs in knowledge-intensive businesses today.”

The particular prob-lem that the think tank is highlighting is the increas-ing urbanisation of Austra-lia, the spread of the outer suburbs, away from these very concentrated areas of most feverish economic wealth generation

“For the sake of the economy and the fair go, we have to find ways either to enable more workers to

live closer to these cen-tres, or to reach them more quickly by road and public transport.”

Which rather glosses over the rather basic question – what do people eat and where does it come from?

Australian farmers produce about $40 bil-lion worth of food each year and export about $30

billion worth. The food industry accounts for 1.68 million people, or 15% of total employment. But we’re up against it.

In 2010, a Senate select committee found there is intense competition for land producing food from housing development, hobby farms, forestry, bio-fuels and mining, “making the price of agricultural land so high in some areas that it is not economic to grow food”

It said: “Australian gov-ernments need to give serious consideration to mechanisms for pro-tecting our most fertile agricultural land from alternative uses in the interests of our long term productive capacity and food security.”

There are lessons for all of us in this. In the long run, everyone needs to eat. Hard-nosed economists would have us disregard this truth. They believe the market will solve every-

A city-centric view leaves our food security under serious threat

thing and, if we’ve got enough money, we’ll be able to buy whatever food we want from producers in other countries.

Good luck with that. When it comes down to survival, history shows

people will fight to protect their own food supply. As recently as 2006, the pasta riots in Italy proved noth-ing has changed. Where will that leave us when we have allowed Australian farmers to be driven out of

business?We have to give seri-

ous thought to where our priorities lie – before it is too late.• Jan Davis is the CEO of the Tasmanian Farmers and Graziers Association.

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14 // MARkETS

RECENTLY THE Busi-ness Council of Australia released a report it com-missioned from McKinsey & Co - Compete to Pros-per: Improving Australia’s global competitiveness.

It was fascinating read-ing – taking a helicop-ter view of the Australian economy and the global competitiveness of indus-try sectors.

Most of us probably regard Australia as a trad-ing nation, but the McK-insey analysis highlights the fact that our economy remains quite inwardly focussed – while we are the world’s 12th largest economy, we rank 21st

in terms of global trade – well behind some that you might assume we should be ahead of.

As part of the study, the McKinsey number-crunchers developed a Relative Competitive-ness Score, applied it to all sectors of the Australian

economy and found that only one sector – agricul-ture – stood out as truly competitive.

The analysis then honed in on our own dairy industry and asked the reader to “Imagine this: an additional $6 billion in exports: by replicat-ing NZ’s success as traded milk demand grows 60% by 2025”.

This is where a lot of farmers turn off at being

compared to the Kiwis, but the key areas the McK-insey folk examine here is the different structures of the respective process-ing sectors and the entire value chain rather than just farms.

The report urges “pur-poseful market design” and “thinking strategically the whole way along the supply chain”.

It points to New Zea-land’s deliberate strat-egy to allow its industry to achieve the scale to com-pete globally.

In Australia, we haven’t pondered this too much as an industry, nor do we have governments – of either political persuasion – that pay much more than lip service to the challenge of achieving a globally competitive food industry.

Instead we have poli-cies on science and inno-vation, labour, trade policy, foreign investment and competition that pick at the edge and are often at cross-purposes.

The McKinsey analysis points to Australia’s Com-petition Policy itself as needing to evolve.

“When economies of scale are required to com-pete globally, Australia’s relatively small market size can be an impedi-ment, especially if merger and acquisition rules pre-vent the consolidation required to match interna-tional rivals.”

It’s not just the Kiwis either – in Europe and the

US we have seen mergers and acquisitions aplenty, as companies position themselves to be globally competitive players.

The latest Rabobank ranking of dairy compa-nies paints the picture clearly, Australia’s com-petitors and customers – dwarf our companies, the largest of which is well outside the top 20.

As an industry we still seem to be in two minds.

Some believe the more companies that com-pete for milk supply, the better, and so welcome more, necessarily smaller players. More players are thought to be good for bidding up prices – they might offer options, but in overall terms the cost of doing business gets higher.

Others want to see the consolidation they believe will allow Australia to remain globally relevant and access export markets of choice. It isn’t about lowest-cost – we have long ago lost that mantle – but it can be about reputation for supply chain integrity and having more scope to supply growing customer requirements.

We can’t have it both ways, but one thing is for

certain – this industry needs to get much bigger to stay relevant and cap-ture higher unit value.

If we don’t grow with our customers, we can’t capture higher value.

At present any moves to further significantly consolidate within the industry will be subject to competition scrutiny, which applies market tests at a regional level for milk supply and sale of finished product.

In responding to the BCA-McKinsey report Rod Sims, the head honcho of the ACCC did not acknowledge the need for anything to change in the Commission’s approach – instead he raised concerns over governments “pick-ing winners”.

The reception to the McKinsey report has been mixed, but it does raise some interesting issues with respect to our own industry in the broader context of the Australian economy and global com-petitiveness.

What is our vision, where and how do we want to compete, what do we need to do to win?

As an industry this seems a worthwhile con-

versation to have as the spotlight is on the “oppor-tunities” offered by global demand for our healthy, safe, high quality products delivered through agile business models and rela-tionships – while many farmers are still very much feeling the “challenge” of the present and future.

We can’t be another New Zealand, nor do we need to be, but we do need to change our attitude to be more effective in attracting capital and Gov-ernment collaboration.

Making the business case to government for the right policy settings that allow the industry to inno-vate and prosper in the long term is just one part of the puzzle.

However, to do this effectively the industry needs to have a view of the future it is looking to shape – “the vision thing” for Australian dairy has never been more impor-tant. • Jo Bills is a director of Mel-bourne-based firm Fresha-genda, a Melbourne-based consulting and analysis firm that provides food value chain insights and solutions to a wide range of clients from farm to retail.

frESh AGENDAjo biLLS

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MARkETS // 15

DAIRY COMMODITY prices have been track-ing downwards since mid-February, when the GlobalDairyTrade (GDT) auction weighted average price peaked at US$5042/t.

As at mid-July, the average was at US$3309/t – an average fall of 34% across all products. Such conspicuous numbers, coupled with Fonterra’s reduction in its forecast Farmgate Milk Price for its New Zealand farmer-shareholders have caused some level of consterna-tion here in Australia.

While GDT is an important market indica-tor, and farmgate returns in Australia are ultimately a product of movements on world markets, some caution must be applied in interpreting these events in an Australian context.

The differences between Australian and New Zealand exposure to world markets are worth revisiting to illustrate this.

The most obvious dif-ference between Austra-lia and New Zealand is the share of milk that is exported. New Zealand exports around 95% of

its milk in various forms, for Australia the figure is closer to 40%.

An open market, coupled with pricing agreements linked to international benchmarks means up to 75% of Aus-tralia’s milk is directly influenced by global markets, be it actually exported or simply com-peting with imports.

In years like 2013 where commodity prices are high, the domes-tic market is regarded by some as a ‘handbrake’ on pass-through of returns, but with typically longer term agreements and rel-atively ‘sticky’ pricing it provides a useful hedge when prices are falling.

In addition to enjoying a greater balance between domestic and export mar-kets, Australia’s dairy industry also produces a different ‘basket’ of prod-ucts for export.

Almost half (45%)

of New Zealand’s dairy exports by volume are in the form of Whole Milk Powder (WMP), and a further 16% are Skim Milk Powder (SMP); tying nearly 60% of New Zea-land’s export returns to milk powder markets (see graph right).

Australia’s largest dairy export by volume – cheese – accounts for only 22% of our total shipments, with SMP the second big-gest at 16%. While cheese pricing tends to track that of powders, it does tend to be more stable from month to month.

Australia’s mix of des-tination markets is also more evenly distributed. As a result of concurrent NZ supply and Chinese demand growth, coupled with the NZ-China Free Trade Agreement signed in 2009, almost one third of New Zealand dairy exports by volume are now destined for China.

China is also Austra-lia’s largest dairy market by volume, but only accounts for 15% of our exports, narrowly ahead of Japan at 14%.

These ‘market-level’ differences mean that although both the Aus-tralian and New Zea-land dairy industries are dependent on, and exposed to, export mar-kets the experience varies.

While New Zealand’s industry has captured a greater share of the ben-efits when international growth markets – particu-larly China – are booming, Australia’s larger domes-tic market and more even distribution of interna-tional destinations and products helps to cushion the downside.

The differences in exposure are notewor-thy in the current market situation, where Chi-nese demand is largely non-existent due to large WMP inventories.

Indications suggest that China’s milk produc-tion remains very strong; slowing stock drawdown and in some cases lead-ing to import shipments being diverted to third countries.

In other words, demand for New Zea-land’s dominant product from its largest buyer has fallen back.

This has set a bearish tone across global mar-kets in general, and will affect Australian export returns.

Booming global milk supplies and a steady ramp-up of forecast GDT volumes mean fur-ther pricing downside is not unlikely before the market eventually recov-

ers, reinforcing the need to approach the current season with caution.

However, the 15%

reduction in Fonterra’s Farmgate Milk Price is not necessarily an experience that will translate directly

across the Tasman. • John Droppert is indus-try analyst with Dairy Aus-tralia.

China’s withdrawal hurts NZ

GLobAL imPAcTjohN DroPPErT

Dairy NewS aUSTraLia june, 2012

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

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

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

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

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

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

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

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

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

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

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

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

agribusiness // 17

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

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

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

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

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

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

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

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

Pactum makes UHT products for private label and proprietary customers.

Freedom Foods planttargets Asia

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

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

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

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

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

The FTA will fill a number of gaps within the

ASEAN-Australia-New Zealand FTA (AANZFTA).

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

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

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

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

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

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

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

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

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

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

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

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

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

Export demand remains strong

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

gLobaL impacTJohN DropperT

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SPECIAL REPORT


16 // MANAGEMENT

THIRTEEN MONTHS after becoming the first dairy farmer in Western Australia to install a robotic milking system, Rob Giura is finally seeing some positive outcomes.

The installation has been plagued by teething problems that have

been exacerbated by other external factors, including health issues for his herd.

But there is light at the end of the tunnel.

“It’s been a bit of a hard road,” Mr Giura admitted. “We’ve had some issues but we’re getting on top of them now.”

“It’s just now starting to make things a bit

easier. On the weekends I can get into it on my own, though I wouldn’t want to do that for a long period of time. It’s good to know that when need be, I can manage on my own with this system.”

Mr Giura has been on the farm at Keysbrook, about an hour south of Perth, for 24 years and is in for the long haul.

At 47, he decided it

was the right time to make the investment to get full value over the next 10 to 20 years.

“Part of the reason for the investment was that I thought I was going to be here for a long time and would make things easier for myself,” he said.

He hopes for a payback period of 10 years on the robotics, depending on seasonal

Robots aided by cut and carry systemRICk bAYNE

conditions.The system was

primarily installed to address labour issues.

“I was trying to free-up some of my time,” Mr Giura said. “It’s hard to get quality labour and hard to get people to do the job the way you want it done.”

He was also attracted to the hygiene factor. “Teat preparation is much better than what we would normally have under our original system.”

The four-robot DeLaval system was fitted into an existing dairy shed, which Mr Giura said had worked fairly well.

However, hopes that

production would drop off just temporarily before an upswing to higher than earlier levels failed to materialise.

Production remains down, though not all related to robots.

“That’s been one of the main disappointing aspects,” Mr Giura said. “We were a 9000 litre herd before we started but we haven’t been able to get back up to those levels as we expected. I expected production to drop for two or three months, but not this long.”

Production is now about 6500 litres and Mr Giura said the fall had been “quite painful”.

“There are other

external factors relating to herd health that we’re trying to resolve. We’re trying a few things, playing around with feed and taking blood tests and other tests to try to pin down the herd health issues.”

The 325ha farm has pure-bred Holsteins, chosen for overall production and the wide availability of genetics.

The cows are mostly fed on a feedpad with cut and carry pasture.

“The cut and carry system was something we decided to do after we got the robots. We thought it would make the herd traffic better and make better use of pasture,” Mr Giura said.

“The cut and carry system was something we decided to do after we got the robots. We thought it would make the herd traffic better and make better use of pasture.” – Rob Giura

Cows are mostly fed on a feedpad with cut and carry pasture. PHOTO: FARMWeST

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MANAGEMENT // 17

Robots aided by cut and carry system

“With a voluntary milking system we can’t turn cows out too far. We’ve got to keep them fairly close by otherwise they’re just not going to come back.

“By using the cut and carry system we can get better use of pasture and take pasture from anywhere off the property and bring it to the cows.”

The system is proving successful.

“You’ve got to have more bulk than if you were grazing. You need a bit of height in the grass to cut it, which means you’ve got to wait longer this time of year when it’s very wet and there’s slow pasture growth,” Mr Giura said.

“But it works pretty well. When there’s a surplus of pasture you can certainly make good use of it.

“We still don’t have ideal voluntary cow movement. At this time of year when it’s very wet and muddy, it’s hard to get cows to move voluntarily, but we do get some.”

The farm has mainly ryegrass pastures. “We’ve been through some of the slow growth time of the year with short days and cold and wet but it’s starting to kick along now,” Mr Giura said.

The farm used to have a combination of ryegrass and clover but is now favouring ryegrass for its higher production values.

Mr Giura had considered expanding the herd up to 280 or even 300 cows to build production back to previous levels or higher. However, he fears that more numbers could have negative impacts.

“Our target is to have an average milking frequency of two-and-a-half times per day. Obviously cow numbers have to be managed to achieve that,” he said.

Another robotic system is about to be commissioned about 500km away from Mr Giura’s farm and he expects the process to be much smoother.

“They shouldn’t have as much trouble as we did because the local technicians have learnt a lot here,” he said.

Mr Giura remains committed to dairying and improving his farm despite the hiccups.

“We still need more money for our milk than what we get. It’s all about a return of profit.

It’s the same story everywhere – we’re not getting as much for our milk as we should be for the input costs.”

who: Rob Giura whErE: Keysbrook whAT: Automated dairy

Rob Giura at the recent Dairy Innovation Day on his farm. PHOTO: FARMWeST

The four-robot DeLaval system. PHOTO: FARMWeST

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18 // MANAGEMENT

More bouquets than brickbatsHOW OFTEN do you give positive or negative feedback to your staff, or anyone in your life come to that?

Research shows there’s a threshold ratio – the Losada ratio – of three

positives to every negative required to gain engage-ment, and an optimum range running up to about six positives to one nega-tive.

Dana Carver, of DairyNZ’s people team, told South Island Dairy Event (SIDE) attendees that surveys in the dairy

DairyNZ’s Dana Carver (right) and Robert McIntosh.

industry have found the ratio onfarm averages four negatives to one posi-tive. Little wonder that the industry has 50% higher staff turnover than the national average.

“If they (employees) are not engaged, then turnover is going to be high,” she warned, during a workshop on staff engage-ment.

Most staff leave not because of money, but because they’re not engaged in the job or there’s something more engaging on offer else-where, she said.

Long hours, lack of career progression, attracting the wrong people in the first place, and poor people manage-ment also contribute to the sector’s high turnover.

“How do we break the cycle? We have to priori-tise the time to put the people management sys-tems in place and upskill.”

Ms Carver said she’s worried those respond-ing to television advertise-ments promoting dairying as a career aren’t going to get the experience prom-ised because of the lack of people management skills which on many farms. That shortfall is easily explained.

“Most of us have not actually been trained in people management like we have in the operational things.”

But just as managers had learned to be good with pasture and stock – the skills progressed them to positions with staff to manage – so they could learn to be good with people, she said. “There is a formula for it, just like there is with pasture man-agement.”

Good recruitment prac-tice and thorough, planned orientation is the start (see panel). Recruitment

should include a detailed job description with farm culture and values spelt out, at least three ways of advertising, an application form, phone screening of applicants, thorough refer-ence checks, and face-to-face interviews done in a professional manner.

Orientation means a full introduction to the job, responsibilities, other staff, the farm and its sys-tems. One-to-one reviews of progress should be held four, eight and 12 weeks in. Calving or other busy times are no excuse.

“You can make time for it. You’ve just got to believe it makes a differ-ence,” Ms Carver stressed, pointing out managers would often find half an hour to talk to a contractor about a job on the farm, yet many fail to find that time for their staff.

Good team meet-ings – planned, engag-ing and involving all, and delivering action points and results – are the next step. One-on-one reviews should be similarly planned and scheduled. Agreeing and provid-ing good training is also important, as is good lead-ership.

“The bottom line is a manager must be respected and trusted in order to motivate staff.”

Making time to get to know employees, and observe them or their work would enable genu-ine, positive feedback to be given, gaining engage-ment.

While prioritising people management, upskilling and getting sys-tems in place may at first make a manager busier, in the long-run it’s the only sustainable option, Ms Carver argued. “Once you can manage people, the world’s kind of your oyster.”

Pasture system People SystemRoutine farm walks and feed wedges Good recruitment and orientationPlan paddock use Good team meetingsPlan fertiliser use One-on-one review timeUse correct round lengths Good training

Good communication and feedbackResult: Quality grass with good growth and correct covers

Result: A happy, capable and efficient team that stick around

Adopted from Dana Carver’s presentation to SIDe 2014.

People and pasture management parallelsANDREW SWALLOW

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bREEDING MANAGEMENT // 19

pRELIMINARY RESULTS of a new Euro-pean mastitis treatment study have implications for higher cow concep-tion rates, according to the New Zealand veterinary researcher who did the work, Dr Scott McDougall, of the R&D group Cog-nosco.

Dr McDougall and his Belgian co-author Elke Abbeloos, from Boehringer Ingelheim, presented their initial findings at the World Buiatrics Congress in Cairns late last month, attended by 900 cattle veterinarians and scientists.

Their preliminary analysis found that cows treated for post-calving mastitis with a non-ste-roidal anti-inflammatory drug in addition to stan-dard antibiotic intramam-mary treatment tended to be ready for their first ser-vice one week earlier, and were 1.4 times more likely to conceive (i.e. a first ser-vice conception rate of 35% vs 25% for the treated compared with control cows) from that first ser-vice than cows given anti-biotics only.

Known as the Fertile trial, the multi-centre, blinded, randomised con-trolled study monitored 509 cows diagnosed with mastitis within 120 days of calving on 60 European farms serviced by 10 dif-ferent vet clinics.

All animals were treated with the same anti-

biotic intramammary, fol-lowed by either the NSAID drug meloxicam or a pla-cebo. Cows were then bred and pregnancy tested normally.

Dr McDougall said the preliminary findings are based on conception rate to first service for the 346 cows for which a service date and pregnancy test data were available.

The Fertile trial was prompted by 2009 New Zealand farm research which showed a single dose of the NSAID Meta-cam20 used with an antibiotic for mild and moderate clinical masti-tis significantly reduced culling.

In that case, Dr McDougall and fellow vet-erinary researchers Drs Mark Bryan and Richard Tiddy found that mastitis cows treated with an anti-biotic alone had a cull rate of 28.2%.

The addition of a single dose of Metacam20 – known as ‘tandem treat-ment’ – reduced the cull rate to 16.4%.

Additionally, Metacam treated cows had a lower somatic cell count in the weeks following treat-ment, indicating a faster return to quality milk pro-duction.

Return on investment for tandem treatment in the 2009 study was four to one, based solely on reduced cull costs, accord-ing to Boehringer Ingel-heim Kiwi brand manager Jonathan Leslie.

New mastitis study flags higher conception rates

He said although cull data from the 2009 proj-ect was “intriguing and robust,” the study wasn’t designed to explain the underlying mechanisms.

Boehringer Ingelheim then commissioned the Fertile trial specifically to learn more about how tandem treatment pro-tects mastitis cows.

“Mastitis is an extremely expensive dis-ease, [because of ] lower milk yields, higher cell counts, reduced repro-ductive performance and

higher risk of culling. “If we can find a way to

reduce the impact of the disease on New Zealand herds, especially the eco-nomic losses and genetic

wastage associated with culling, the industry can only benefit.”

Publication of the Fer-tile trial with the full data set is expected next year.

Dr Scott McDougall and his Belgian co-author elke Abbeloos.


20 // ANIMAL HEALTH

Consumer demands will guide genetic selectionA WORLD-LEADING dairy researcher says major changes in the way cows

are bred will pave the way for the development of new dairy products.

Dr John Lucey is the director of the Wisconsin Centre for Dairy Research

and a professor of food sci-ence at Wisconsin Uni-versity.

Mr Lucey, raised on an Irish dairy farm, spoke at a recent symposium mark-

ing 50 years of teaching food technology at Massey University, New Zealand. He once taught food sci-ence there.

He said that genetic

technology will enable sci-entists to breed for specific traits in dairy cows, rather than wait to see what traits sons and daughters of cows produce and how

SOCIAL MEDIA pITFALLS

SOCIAL MEDIA may be great in many respects, but it poses new challenges for many industries, including dairy, John Lucey says.

Instantaneous sending of information to con-sumers has a downside – the stories can be just plain wrong.

“Most writers in the media have very little science training; few actual science writers are [about nowadays]. So some inaccurate stories [on social media]… are taken at face value by the public…. So food researchers and university people must speak out and get the correct mes-sages across.”

Mr Lucey said worldwide not enough money is being spent on dairy research. With dairy being so diverse biologically it can provide lots of excellent quality products and great health benefits and there is a need to capitalise on that.

beneficial these are. “Rather than just breed

for an amount of milk or an amount of fat or pro-tein, you start breeding for individual proteins. You might say a lot of a particu-lar protein has health ben-efits but it is produced in low amounts, but there is a cow or bull that has this trait and has the ability to produce it and pass it on.

“That kind of focus would enable us to target that individual protein or component. In the next ten next years we’ll prob-ably see more of that drive whereby people will breed animals for what I would call non-traditional traits.”

Mr Lucey said this idea is not unrealistic as from a genetic perspective the markers are already there and have been researched and developed, and ani-mals worldwide have been identified as having these traits.

Now the technol-ogy needs to be commer-cialised.

Mr Lucy said after a roller coaster ride dairy products are again in

favour with consumers, many so-called health concerns having been rebuffed. Now many con-sumers appreciate the value of high quality dairy protein.

“For example in the US a huge phenomenon for the last five years has been Greek yogurt… with about twice the protein of regu-lar yogurt. It was kind-of chugging along in the US, but it’s had phenomenal growth because people are appreciating the high pro-tein content.”

Taste, flavour and tex-ture are the important drivers for getting con-sumers to buy a product, Mr Lucey said. “They are the givens but [they are also] looking for some-thing healthy and conve-nient and they don’t want it to cost a lot.”

With the market for dairy products opening up in Asia, food scientists must attend to the needs of these new consumers. Though interested in dairy products, they have dif-ferent taste preferences to Western consumers.

Dr John Lucey says cow could soon be bred for individual proteins, rather than just milk or fat.

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ANIMAL HEALTH // 21

LAST WEEk, I was in Cairns in Far North Queensland enjoying a week of warm weather. I attended the World Buiat-rics Congress, a gather-ing of nearly 1000 cattle vets and animal scien-tists where attendees were updated on all things related to cattle.

I presented a paper outlining my experiences in Nepal gaining first hand experience of FMD, and the importance of private practitioner engagement in preparing for, and our role in surveillance for, an exotic animal disease out-break.

I attended a number of lectures relating to colos-trum and passive immu-nity transfer in calves. With spring calving get-ting into full steam I once again remind you all about the importance of colos-trum and passive transfer of immunity.

Calves are born with no immunity due to the type of placenta they have which doesn’t allow the movement of antibod-ies into the calf ’s blood stream from the cow’s blood stream prior to birth.

The cow produces colostrum in the final 3-4 weeks of her dry period which is rich in antibod-ies against diseases that the cow has been exposed to during her life, or vacci-nated against.

The absorption of the antibodies undigested directly into the calf ’s bloodstream, providing what is known as passive immunity, is a time lim-ited thing with a window of opportunity of 24 hours or less.

As soon as the cow calves, she begins produc-ing milk which dilutes the antibodies in the colos-trum, and as soon as the calf is born and especially after it has fed, the pro-duction of stomach acid begins to digest the anti-bodies rather than allow them to be absorbed whole and unchanged.

The first milking colos-trum is at least three times more concentrated in anti-bodies than subsequent milkings so it is important that only first milking is used when feeding or sup-plementing calves with the aim of improving the pas-sive transfer of immunity.

There are some easy methods of measuring the quality of colostrum which should become an important part of your calf induction protocols. There was strong emphasis in the lectures on the impor-tance of the quality of the colostrum.

Colostrum quality is broadly discussed in two ways: the level of anti-bodies and the level of bacterial contamination. Antibody levels can be enhanced by optimum transition nutrition and immune system prepa-ration of the cow using specific vaccinations for things like Salmonella, Rotavirus, E.coli etc.

Milking the cow as soon as possible after she calves and especially within 12 hours of birth is a critical factor to ensure the highest concentration of antibodies possible in the colostrum.

Feeding volume is dependant on antibody concentration and esti-mation of antibody con-centration should be performed using either a colostrometer or a Brix scaled refractometer.

Brix refractometers are a relatively cheap and robust tool to ensure that the best quality colostrum can be fed.

The other important quality issue is related to the bacterial contamina-tion of the colostrum.

Many colostrum sam-ples are heavily contam-inated with bacteria due to a combination of poor pre-milking preparation of the cow, poor cleanliness of the collection buckets and poor storage of the collected colostrum after milking and prior to feed-ing.

It is also important that colostrum with blood contamination or signs of clinical mastitis (clots, flecks etc) is not fed to calves unless there is no other alternative.

The use of pasteuri-sation of colostrum to reduce bacterial contami-

Small window for colostrum

ANimAL hEALThrob boNANNo

nation was discussed, but there is a strong empha-sis that pasteurisation cannot make up for poor milking or other hygiene practices.

The importance of rap-idly chilling and keeping stored colostrum refriger-ated at 4C for short-term storage (up to 1 week)

or frozen at -18C (up to 6 months) looks like being a very valuable tool to ensure colostrum quality.

Dairy farmers should strongly consider instal-lation of a cool room or some other method of adequately storing chilled colostrum in sufficient quantities for their needs.

So after the high quality colostrum has been col-lected and stored, then fed quickly in adequate amounts, the only thing left to consider is the mon-itoring of the success (or otherwise) of your colos-trum protocol.

Monitoring of the blood protein concentra-

tion between 2-7 days after birth can give us an esti-mate of the antibody levels present in the blood. If you are consistently meet-ing or exceeding the target of 55 grams of protein per litre of blood then you could reasonably expect that your colostrum proto-col is adequate and expect

better than average calf health and performance providing you attend to their nutritional and hous-ing needs.• Rob Bonanno is a former president of the Australian Cattle Veterinarians Asso-ciation and is a director of the Shepparton Veterinary Clinic.

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22 // ANIMAL HEALTH

WHEN ASSISTING a cow to calve, it’s always exciting to deliver a live calf.

While the first thing that usually happens is to check if it’s a bull or a heifer, there are some other things we need to do that will make sure the calf has the best start in life.

The following tips apply to every calf – those calves showing signs of a prolonged or stressful delivery (such as swollen heads or tongues, or meconium staining) will need extra TLC.

■ Clear mucous from the calf ’s nostrils and mouth.

■ Place the calf onto its chest, with the back feet pointing towards their ears (see photo). This position gives both lungs the best chance to expand. Holding calves upside down puts pressure on the diaphragm and lungs and interferes with breathing: don’t do it!

■ Have a whole lot of old towels on hand at the dairy. Use them to dry the calf and rub them for

stimulation – brush upwards from tail to neck. Pinching the nose can also help stimulate a calf to breathe.

■ Monitor the calf over the next few hours, and encourage them to drink 2 litres of good quality first-milking colostrum from a teat feeder (good quality colostrum is 22% or more measured with a Brix refractometer). If the calf is unable to do this, use an oesophageal feeder to tube feed the colostrum.

■ Spray or dip the calf ’s navel with

5-7% iodine solution to dry it out and minimise the risk of infection. Teat spray from the dairy is only 0.5% iodine – not nearly strong enough, so don’t use it. Spray the navel while the calf is in the calving

area and again when they arrive in the calf shed.

■ Ensure the calf ’s bedding is clean and dry and draft free. A calf coat can also help newborns stay warm.

■ Make sure everyone involved in

calf rearing knows which calves have had a difficult delivery and monitors them closely for signs of disease.

• Zoe Vogels is a veterinarian with The Vet Group.

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ANIMAL HEALTH // 23

Preventing drench resistance

MANAGING WORMS in dairy replacements may seem like a relatively straight forward task… drench, drench, drench!

However, in reality it is far from simple. A current research project looking at drench efficacy in the Macalister Irrigation Dis-trict (MID) has found that four out of five farms now have drench resistance.

What is scary is that once it has developed on your farm it is irreversible.

The five main actions by a dairy farmer that can inadvertently cause drench resistance are:

■ Confusing rotation of drench classes with drench products

■ Moving heifers to a new “clean” paddock after drenching

■ Using pour-on drenches

■ Inappropriate or lack of quarantine drenching

■ Dosing incorrectly to the average, not the heaviest in the mob

■ Rotation of drench classesRotation of drenches

has been advocated as a way in which to avoid drench resistance for decades.

However, product labels are misleading and many farmers are in fact rotating between products and not classes (i.e. mech-anisms of action).

The three classes of drenches include:

■ White drenches (e.g. Panacur, Flukazole, Parafend) – always oral

■ Clear drenches (e.g. Nilverm, Nilzan) – always oral

■ ‘Mectins’ (e.g. Cydec-tin, Dectomax, Ivomec, Virbamec) – injection or pour-onIn order to effectively

rotate you must rotate between classes. For example, if you usually use Cydectin (mectin) and for the next drench use Nilverm (clear drench) you are effectively rotat-ing.

If you use Cydectin then rotate to Dectomax, you are not effectively rotating.

If unsure, go armed to your local supplier with a sticky note with ‘white drench, clear drench, mectin’ on it.

Ask the retailer or vet what you used last time and they will find you a product in a different class.

There are not yet any combination (i.e. combin-ing two or more classes) of worm drenches for dairy cattle on the market that use multiple classes together (e.g. both Pan-acur and Nilverm).

Using multiple classes together at label dose rates is even better than rota-tion for preventing resis-tance. It is anticipated that a combination prod-uct will be available later this year.

Moving to a ‘clean’ pad-dock after drenching

Historically farmers were told to move heif-ers to a clean pasture after drenching to stretch out the interval between treat-ments and many still do this today.

However, what is actu-ally happening is the resis-tant worms that survive treatment continue pro-ducing eggs and create a population of worms that is entirely resistant in the new paddock.

So, instead, put your heifers onto a new pasture for a couple of days to two weeks before drenching (depending on the size of your paddock).

Allow them to poop out some drench-sus-ceptible worms onto the ground which can go on to breed with those that sur-vive treatment and then drench.

It is a new concept and one which is argu-ably going to be the hard-est to penetrate the dairy industry.

However, the reality is, sheep farmers stopped moving their lambs to clean paddocks 20 years ago and we are just lagging behind.

Pour-on drenchesInjectable products are

more cost-effective than pour-on drenches.

What many farmers don’t realise is that pour-ons are actually absorbed by the animals licking the product off themselves and their herd mates.

Therefore, the perfor-mance of pour-ons can be highly variable and if only treating a few animals it is likely that their untreated

herd mates will lick off a proportion of the product.

So the moral of the story is – use injectable products instead of pour-ons both to save money and to ensure your ani-mals are getting the right amount of drench.

Lack of or ineffective quarantine drenching

Even after ensuring you adopt all the right practices on your farm it is easy to buy in drench resistance with introduced stock.

Therefore, to safe-guard your herd, all intro-duced animals (including bulls) should be drenched with two different classes on arrival. I recommend administering a ‘mectin’ injection with an oral clear drench (e.g. Nilverm).

You will find the clear drenches (e.g. Nilverm and Nilzan) are cheap so having a drum on hand for such occasions will not break the bank. Once new animals have been

drenched leave them in a yard for 48 hours to expel any resistant worms then you are safe to put them out onto your paddocks.

Drench to the heaviest in the mob

Every drench drum, bottle or pack you read clearly states ‘drench to the heaviest in the mob’ however upon visiting farms I discovered that many farmers drench to the average. This means

that the heavier calves in the group are getting under-dosed and there-fore may build resistance in 5-10 years.

So, this serves as a friendly reminder to read the label and always drench to the heaviest in the mob.• Stephanie Bullen is a vet working at the Maffra Vet-erinary Centre. This arti-cle was first published in the July 2014 edition of How Now Gippy Cow.

STEpHANIE bULLEN A current research project looking at drench efficacy has found four out of five farms now have drench resistance.

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

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


24 // ANIMAL HEALTH

Mineral supplements made simpleTAkE YOUR vet’s advice on mineral needs for your herd but push back if they start peddling pricey prod-ucts.

That was the typi-cally blunt advice from Dairy NZ principal scien-tist, animal science, John Roche, at a recent South Island Dairy Event in New Zealand.

“If they say use a che-

lated or hydroxy product you push back and say ‘No thanks, I’ll use inorganic’,” he told delegates during a workshop headed ‘Mineral Supplements – The KISS Principle’.

By way of introduction, Mr Roche had quipped the KISS acronym – Keep It Simple Stupid – was prob-ably directed at him.

“Do cows need miner-als? Overwhelmingly the answer is yes. But as with all things nutritional the

devil is in the detail,” he warned.

Of 25 minerals known to be essential to animal production, 18 are consid-ered trace elements and seven macro nutrients (see sidebar).

“I shall focus on the trace elements because that’s where most of the confusion and complexity seems to arise.”

Part of the problem is there is “virtually no inde-pendent research done

on minerals now. Almost every paper written is funded by a company sell-ing minerals,” Mr Roche said.

That doesn’t mean the science can’t be trusted – “a lot of the research

that is commercial com-pany funded is very, very good,” – but it’s what does and doesn’t get published that’s the problem.

“You really, really struggle to publish papers that show their product in

ANDREW SWALLOW

a negative light. They’ll let you do it but they make it very hard to do.”

Much of the research presented to support min-eral sales is done on cows fed total mixed rations so extrapolating results to pasture is also question-able, Mr Roche added.

Of the 18 trace miner-als only five are likely to be deficient in pasture-based diets: cobalt, copper, iodine, selenium and zinc.

Deficiency may simply be due to not enough in the diet, but interactions with other minerals and vitamins can mean ani-mals can’t absorb enough from what appears to be an adequate amount in a diet.

For example, iron blocks absorption of copper so cows on winter crop eating a bit of soil can become copper deficient. Similarly molybdenum and sulphur form insolu-ble complexes with copper affecting uptake.

But of all the traces, copper is the one most likely to become toxic in excess so care is needed to take account of all sources of the mineral: feed, water (some sources are natu-rally high copper), and fer-tilisers, when working out if and what to supplement with.

Cobalt is more con-tentious, as very little is needed for rumen micro-organisms to produce enough vitamin B12, which is the main use of the min-eral. However, higher intakes than required for B12 production can enhance fibre digestion.

Iodine is vital for energy (via the thyroid), the immune system and reproduction but it is highly soluble and pasture content is very variable. Goitrogens in crops such as brassica prevent iodine uptake and put cows at particular risk of defi-ciency so supplementing during wintering and the first four months of lacta-tion is recommended.

“You can put it into the system very cheaply,” Mr Roche noted.

The two traces Mr Roche expressed “real doubts” about supple-menting with were sele-nium and zinc.

“New Zealand studies indicate 0.5mg/day of sele-nium is enough to maxi-mise production but in the northern US they’re rec-ommending 5mg/day.”

But many areas of New Zealand are known to be selenium deficient and, unless using an organic source, the mineral is very cheap “so do it,” he added. The exception would be on high selenium soils, especially where higher selenium feeds such as brewers’ grains or oilseed byproducts are being fed.

Cereal by-products are also high in zinc so must be taken into account when looking at that min-eral.

Pasture content is very variable farm to farm and paddock to paddock but testing can be worthwhile to find potential problem paddocks/areas.

Overall, and in general, Roche’s recommendation is to supplement pasture-based diets with these five key trace elements for the first six months of lactation when they’re in highest demand and to replenish cows’ stores.

“There are some very good trace element mixes that can be put in for 2-3c/cow/day.”

Work with your vet, and if taking liver tests to check copper status, “test the cows you’re keeping, not the ones that are going to the works,” he stressed, as the latter could have abnormal levels for a whole host of reasons which may not be typical of the herd.

Bloods give a point in time picture but won’t tell the whole story with copper and selenium, he added.

“Use your vet to diag-nose and make a plan but what product to use is where you have to be strong.”

As the Australian dairy herd is so diverse in its geography and its feeding types, Shepparton vet Rob Bonanno told Dairy News Australia there can be no hard and fast “rules” as to what is the best mineral supplement.

“As a general rule, coastal and high rainfall

“As the Australian dairy herd is so diverse in its geography and its feeding types, there can be no hard and fast “rules” as to what is the best mineral supplement.” – Rob Bonanno, Shepparton Vet Clinic

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ANIMAL HEALTH // 25

Mineral supplements made simple

Keeping it simple: DairyNZ’s John Roche handles a mineral supplement question from a SIDe delegate.

ROCHE’S SIDE paper also covers the macro nutrients, calcium, chlorine, magnesium, phospho-rus, potassium, sodium and sulphur.

Sodium can be short if a third or more of feed is a low sodium source such as cereal grain, and dietary phosphorus may be inadequate on fodder beet, but other than that calcium and magnesium are the two macros to watch.

“Magnesium is probably the most important mineral in the diet of the grazing dairy cow,” states the paper.

“It is essential in almost every biochemical reac-tion in the body, not to mention its role in nerve and muscle function and bone development.”

Dr Roche’s paper says there’s little research on chelated magnesium and while it probably is absorbed more quickly and may be excreted slower, “the amount of magnesium supplied by these prod-ucts is unlikely to protect a cow during early lacta-tion,” it warns.

As a rule, calcium should be supplemented during the colostrum period with up to 300g/cow/day of limeflour dusted on pasture or through a molasses lick.

Lower level supplementation through in-shed feeding “may not be sufficient to prevent milk fever, particularly in at risk cows, ie old, jersey or jersey cross”.

Once into lactation, calcium supplements are only likely to pay if large amounts of low calcium feed such as maize silage or cereal grain are used.

Australian dairy farmers should contact their local vet to discuss supplement requirements for their herd.

Two, maybe four, macro nutrients

areas tend to have lower levels of minerals, but some inland very sandy soils can be deficient and on some types of clay based soils, minerals may be present in adequate amounts, but they are

chemically unavailable,” Dr Bonanno said.

Dr Bonanno recom-mended dairy farmers should contact their local vet to discuss supplement requirements for their herd.

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26 // ANIMAL HEALTH

Downer cow assessment crucial to recoveryA LEADING cattle expert discussed the importance of diagnosing

both primary causes and secondary damage to determine the best

treatment for downer cows at the recent World Buiatric Congress in Cairns.

According to Dr Phillip Poulton, when downer cows are first seen by farmers, it’s important that the cause is determined so that they are managed properly.

“Most farmers are able to recognise conditions that cause a cow to be down but should seek veterinary assistance when they are unsure and when the cow suffers further injuries.

“Farmers need to be aware that the urgency of their initial response to the down cow depends on whether the cow is alert or not. Non-alert cows, described as dull, depressed and non-responsive are an emergency.”

Dr Poulton said that appropriate treatment will depend on the condition so an accurate diagnosis is crucial.

“Vets must look carefully for any secondary damage regardless of how long the cow has been down. If these additional complications are not diagnosed the treatment plan can be wrong and lead to a poor outcome.”

According to Dr Poulton, the following secondary damage should be considered:

■ Pressure damage in the hamstring group of muscles by measuring Creatinine Phosphoinase levels. If the levels are above a critical threshold

there is less than a 5% chance of survival and euthanasia should be considered for the welfare of the animal.

■ Neuropathies, especially to the sciatic nerve and forelimbs

■ Femoral nerve damage ■ Dislocated hips ■ Cows lying in lateral

recumbency which can cause pneumonia or death

■ Cows nursed in paddocks in cold climates

■ Bed sores and lifting damage.“Secondary

complications can occur within a very short time so a down cow should be lifted and moved to a proper nursing area quickly to improve the chances of recovery.

“Proper nursing conditions include shelter from adverse weather conditions, suitable soft bedding, barriers to restrict crawling and minimise further injury, suitable feed and water and constant monitoring. Appropriate drug therapy should also be provided,” he said.

A recent Dairy Australia survey showed that on 89% of dairy farms in Australia there had been on average more than two downer cows in the previous 12 months with a survival of only 33%.

At the conference, Dr Poulton released the initial results of research he has undertaken looking at the correlation between nursing conditions and treatment outcomes of downer cows.

Dr Phillip Poulton with one of his patients on a Gippsland property.

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to 62 cents.His milk tests around

3.8% protein and 4.8% and bonus payments for low cell count are also an important part of the mix. The property has been experiencing an extremely dry year, totally reliant on irrigation, with the upside of good cow health.

“You certainly need to be on the ball to make sure of bonuses which are vital with base prices where they are,” Mr Parker said.

Per cow production has been up over 6000 litres, but more recently aver-ages around 5500 litres, reflecting the high pro-portion of young cattle coming into the herd.

He said getting the

individual levels back up was not a major priority with the more important criteria being optimum cost per litre of milk.

With a traditional spring milk flush, some calvings had been moved from November-Decem-ber to March-April to even

out production and reduce the volume of low price excess milk.

He is hopeful that milk prices will further improve under the pressure of fall-ing production levels in the north.

Ultimately he believes the future to be in inten-

sive housing where costs can be fully controlled.

“It’s a big cost per cow to set up and your man-agement has to be spot on. It’s something I’m consid-ering, but not on this prop-erty where the investment has gone into pasture,” Mr Parker said.

YOUNG QUEENSLAND farmer Chad Parker has backed his future in dairying with an aggressive 25% annual growth rate over the last five years.

With an effective dairy-ing area of just 60ha at Kenilworth in the Sun-shine Coast hinterland, Mr Parker invested in a 200ha property at Murgon to run dry stock and also provide some round bale silage to bring back to the home property.

The whole milking area is under solid set irri-gation and is planted to annual ryegrass to provide feed from May through to December. Kikuyu and couch grass grow through

to provide summer feed through until April.

Corn silage is brought in and the cows are fed about 6kg of grain mix in the bails each day, slightly more in summer. The pre-dominant grain is barley with canola mixed in to give more protein during the summer.

Mr Parker invested in a feed mill to achieve cost savings blending his own ration which includes trace elements, and miner-als including fine lime for essential calcium.

The whole dairying area is covered with solid set irrigation with water pumped from the Mary River.

Mr Parker said he aimed to continue to grow the milking herd to stay viable, pursuing his goal

of milking more cows for less cost.

He is looking at poten-tial to acquire more prop-erty to improve viability by taking brought in feed out of his production system.

Current feed costs are around 27 cents a litre, but Mr Parker said he believed a figure under 20 cents was achievable.

While he is now con-fident there will be some milk price upside, his business focus is to con-tinue to strip out produc-tion costs and maximise feed efficiency and quality bonuses.

The third generation farmer is a plumber by trade who came back home to run the family enterprise at Kenilworth in the Sunshine Coast hinterland seven years ago.

He said that while improvement in milk price had been minimal until now, at least the threat of production limits and 15 cent a litre tier two milk had been lifted.

With about 400 milk-ers he supplies more than 2 million litres a year to Lion and has an unlimited volume contract for five years.

He had been working on a base price of 49 cents a litre which has risen to 52 cents this year. With quality incentives including for butterfat and protein the payment rises


HAY & SILAGE // 27

Homegrown feed cuts costs GORDON COLLIE

Chad Parker

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28 // HAY & SILAGE

A NEW App that will allow hay-making con-tractors and regular hay growers to assess the qual-ity of their product has been unveiled during the Australian Fodder Indus-try Association national fodder conference this month.

Feed Central has devel-oped the Australian-first App which will give producers the ability to market their hay more promptly and to a wider audience.

Quality Assurance and Supply Manager Ian Wick-ham said Feed Central was rolling out the program to accredit contractors and growers to do first round quality assessment and to list hay directly with Feed Central, starting with the 2014/15 hay season.

“It’s a great leap for-

ward for the whole fodder industry,” Mr Wickham said.

“There is no national grading system and in the absence of national stan-dards the app helps stan-dardise assessments and gives buyers greater con-fidence to buy more hay sight unseen, while still allowing growers and contractors to market this product through their own chan-nels,” he said.

“Growers and con-tractors will be able to get their product online and available to sell much quicker. With Feed Cen-tral’s unmatched turn-around time of 24 hours, by answering a few simple

questions sellers of fodder are a chance to sell to the domestic database of more than 15000 buyers within a few days. That’s a really powerful tool.”

Mr Wickham said the App would fit in well

for those wanting a feed test. “Buyers are demand-ing more informa-tion on the

hay before they buy and it’s not just feed test they need to know about,” he added.

Quality assurance is protected in the process. The hay will feature a stamped quality statement to establish if it is assessed by a Feed Central assessor or a self-assessment.

Growers can still have

a Feed Central assessor visit their properties. The assessors will also use the new technology, reducing reliance on a paper-based system.

The new technology was developed in-house by Feed Central and was built with ease of use for both user and buyer in mind.

“We want to ask simple questions about the prod-uct in an easy format, everyone has their phone handy when trying to sell product so this was an obvious extension,” Mr Wickham said.

“Growers will be able to do it themselves; it’s not a difficult process but it has benefits of getting product marketed more effectively and still with all the right information wanted by decision-mak-ers.”

App can assess hay quality

“Growers and contractors will be able to get their product online.”

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// 29

pROpER COMMUNICATION between an accredited fodder contractor and a dairy farmer is normally all it takes to ensure both parties are happy.

That’s according to Australian Agricultural Contrac-tors Association president, Bill Saunders.

“A successful outcome comes down to communica-tion,” Mr Saunders said.

“When some farmers say they can’t get contractors when they want them, nine times out of 10 they have called at the last minute.

“Some of my clients call me two months out and keep me updated.

“There is 100 ways to make silage, so have a cup of tea, discuss exactly what you want, and both parties are then on the same page.

“There is a lot of money involved at the end of the day, so it has to be done right.”

When a farmer employs a contractor, Mr Saunders said it is a legal requirement that they provide a safe workplace.

Farmers should ensure any contractor working on their property has:

■ Public liability insurance ■ Appropriate licences (eg spraying or truck licence) ■ A Job Safety Analysis ■ Machinery insurance ■ Evidence staff have been inducted into his business ■ An employer code of conduct, which sets limits on

what hours staff can work in a 24 hour period.All AACA-accredited contractors agree to install an

employer code of conduct.In order to provide a safe workplace, Mr Saunders said

the farmer should also induct all contractors onto their properties, and supply a list of hazards on their farms.

“A good farm map is also essential,” he said.“The days of saying ‘the third paddock past the gum

tree’ are gone. Detailed farm maps and GPS make the job much easier.”

The AACA has not printed suggested contractor prices in its brochure this year for only the second time in its his-tory.

Mr Saunders said this was done to remove the confu-sion that every job can be done for a set price; and also to ensure contractors and farmers communicate beforehand.

Contractors that become a member of the association (for $80 a year) have access to a cost calculator which will provide an accurate assessment of what each individual job will cost.

The contractor can then share this with the farmer.

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HAY & SILAGE // 31

EXTRA CARE taken to produce quality hay is essentially a waste of time if the finished product is not utilised effectively.

The problem is exacerbated in winter, when hay is fed out on wet ground, and Terry Allan of WasteNot Stockfeeders says there are other considerations, including:

■ Leaf loss – leaf is usually the most valuable part but once it shatters and blows away, the remainder is the poorer.

■ Pugging of paddocks. ■ Damage to laneways and gate-

ways, not just from cow traffic but tractors, wagons and carts.“A sacrifice paddock is one less

paddock in the grazing rotation, and a guaranteed candidate for an expensive re-sowing treatment later on,” Mr Allan said.

Mr Allan said constructing a feedpad with a hay feeder also

ensures every member of the herd gets their fill.

“Watch what happens when you put a line of hay out on the ground,” he said.

“The herd lines up and eats the first half of the hay; but watch what happens to the second half of the hay and see ‘who gets what’.

“A group of cows progressively leave the line with hay still in the line, but no longer an effective feeding space for the tail enders.

“The bossy cows dominate the remaining hay, and it is not until they are full and they leave the line, that the shy cows and heifers get a chance to come back to where the hay was, but it’s gone by now – either eaten by the bosses or tramped into the mud.”

As a result, Mr Allan said some cows get a feast, but the tail-enders get even less when mud is a problem,

and are still hungry.“Half the herd thrives but half the

herd really struggles. We have seen a number of herds this season where there is a major difference between the bosses and the strugglers.”

Mr Allen said with a feed pad, cows can be fed after each milking to boost their intake and/or to balance their total ration, thus increasing the efficiency of conversion.

“When they reach the paddock we see a much gentler scene.

“Cows are much quieter, grazing or laying down much earlier, rather than charging around the pasture chasing the tractor or today’s hay.

“Pasture is eaten out later in the day – even into the afternoon.

“If the feedpad has been used to help manage the pasture better, hopefully we have grown a little more feed and will utilise a little more of it.”

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32 // MACHINERY & pRODUCTS

MATT HAITSMA is back on the family farm after a couple of years at Latrobe University, milk-ing about 130 cows out of their total herd of 210.

He works with his father, Jan and mother Jean, on their 80ha (200 acre) property about 6km out of Rochester in central Victoria.

They have been at this property at Roches-ter for 10 years milking on a 22-unit swingover her-ringbone, and the farm is taken up with pasture and to run the milking cows.

So last October they purchased a 31ha (78 acres) outblock at Bamawm to grow their hay and silage and to keep the young stock. “This prop-erty needed knocking into shape in improving the pastures,” Mr Haitsma said. “We have two Kubota 4WDs to handle the work at the Rochester farm - one with a cab and one with ROPS. So we looked around for a tractor to look after the jobs at the new place.”

In February they took delivery of a Mahindra 9200 4WD with ROPS and a roof, and fitted with a Mahindra ML480 front-end loader, through Echuca TM &V dealership.

Mr Haitsma said they originally saw the Mahin-dra tractor range at the Elmore Field Days. “We didn’t go on any farms to look at them working, but we knew that Echuca TM

&V handled them.“It does the job that we

require. There are no fancy electronics, but it has all the bits that you need. And the price is competitive. We didn’t need anything fancy – just a basic tractor.

“We looked at other brands and ‘horsepower to price’ was the decision-maker with the Mahin-dra.”

The Mahindra 9200 is powered by a 3.53 litre four stroke, direct injection, turbocharged, water-cooled diesel. Mr Haitsma said that it is a very basic tractor - solid and functional, at a good price.

A dedicated left-hand synchronised reverser gives good control during intensive front end loader work.

Terry Scurrah looks after tractor sales at Echuca TM &V and is very enthusiastic about the qualities of the Mahin-dra brand. He researched them thoroughly when the dealership was looking to sell them.

“They were selling like hot cakes in the US because they represented

value for money and they are very robust,” Mr Scur-rah said.

Mahindra has been making tractors and four wheel drive vehicles in India for 62 years.

“The 9200 is an honest tractor with a heavy chas-

sis weight and 12 forward, 12R reverse synchro shut-tle transmission. A Dana limited slip differential on the front drive is a major feature in handling diffi-cult conditions. It comes with tandem hydraulic pumps, delivering a total of more than 60 litres/minute which means good front-end loader perfor-mance.

“Plus the engine has Bosch injection and the electrics are Lucas.”

The Mahindra is kept permanently at the Bamawm property. It is used daily for feed-ing out to the heifers, and for spraying and cultiva-tion. Matt’s brother Chris looks after some of the daily work and Matt and

Jan do the bulk of the trac-tor operating. The tractor is comfortable to oper-ate and easy to get on and off with the flat floor, par-ticularly as the operator is in and out of it to open and shut gates and to take wrapping off bales. Matt said it works well in all conditions.

“We’ll cut oaten and lucerne hay off this block this season. It’s been a good year so far,” he explained.

Jan and Jean are wind-ing down their commit-ment to the dairy as it has become a bit much for them and Matt will even-tually take over the oper-ation – a step that he is obviously looking for-ward to.

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ence from the US’ in the development of the trou-ble-prone 90 series, and the dropping of the David Brown brand in 1983.

The ultimate blow for the Meltham-based David Brown workforce emerged in 1985, when Tenneco took control of the International Har-vester (IH) company, combining it with Case to create ‘Case IH’.

Meltham engineers had been planning a new trac-tor range for Case under project ‘P100’, and run-ning prototypes of the machine were report-edly produced before the merger.

As part of the subse-quent rationalisation how-ever, P100 was moved to the IH plant in Neuss, West Germany, and trac-tor production at Meltham ended a few years later.

The production model Maxxums were built at Neuss, with German-built Cummins engines, French cabs, and transmissions from the IH plant in Saint-Dizier, France.

The series ranged from 90-125hp and were built around a 5.9 litre six cyl-

inder Cummins engine (developed jointly with Case) that in itself has developed a fearsome rep-utation for power and reli-ability.

The smaller 5120 and 5220 models utilised a four cylinder, 3.9 litre version of the same engine – effec-tively just two thirds of the bigger block. They were advanced for their time, employing electronics in the dash and three-point linkage – but came before the era of suspended axles, CVT transmissions and electronic hydraulics.

They were easy to drive, compact and solid machines, albeit rough in the paddock and a prover-bial pain to perform work on due to the restricted access dimensions.

The air conditioner

was particularly unsuited to Australian condi-tions, and many an after-noon mowing silage was spent on the verge of heat stroke. But they were reli-able and powerful, and with a powershift trans-mission and electronic forward-reverse shuttle were suited to an enor-mous range of farm tasks,

from loader duties to field work.

It’s easy to forgive the David Brown aficiona-dos for any bitterness they might feel for a promising British development proj-ect being hijacked by the Americans and given to the French and Germans to complete.

If the second-hand market for the 5000 series Maxxums 25 years later is anything to go by though, everyone involved should remain proud of the end product.• John Droppert has no mechanical qualifications whatsoever, but has been passionate about tractors since before he could talk and has operated many different makes and models in a vari-ety of roles for both profit and fun.


34 // MACHINERY & pRODUCTS

Maxxums survive rocky startTHE MAXXUM series was a first for the newly formed Case IH too. These tractors were developed amidst the storm of merg-ers and acquisitions that

characterised the 1980’s agricultural machinery sector.

Since 1972, David Brown of the UK had been a subsidiary of the US oil

giant and industrial con-glomerate Tenneco Cor-poration, and operated as a division of Tenneco-owned J.I. Case.

David Brown engi-

neers at Meltham, York-shire, appear to have had a testy relationship with US-based Case from at least the late 1970s, no doubt helped along by ‘interfer-

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dairy news australia august 2014

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