dairy news australia may 2014

Fonterra changes milk payment system Page 6

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Global prices fall from record highsthe FiRst Global Dairy Trade auction of May was down 1.1% on the previous sale with an average winning price of US$3950/t.

While the result was the sixth fall in a row – a fact made much of in mainstream media – it repre-sented a levelling of prices after a fall of 2.6% three weeks earlier, and 8.9% before that.

At US$3950/t the average win-ning price is 21.7% down on the Feb 4 peak of US$5042/t.

Whole milk powder, the biggest product sold on the auction site by volume, fell 1.7% to $US3928/t, a 14-month low.

Dairy Australia industry analyst, John Droppert, said the weighted average price across all commod-ities has fallen 20% since early February, and is tracking around 19% below the same time last year (which was just after prices first spiked).

“Although rapid in the context of the months of price stability that

sellers enjoyed, this adjustment shouldn’t come as a surprise,” Mr Droppert said.

“With farmers in all export-focused regions enjoying substan-tially higher farmgate milk prices for several months now, the incentive to boost production was bound to elicit a response.

“In a further contrast to the 2012/13 season, constrained feed prices are also improving the eco-nomics of incremental produc-tion increases, and many regions are enjoying favourable weather to boot. “

Mr Droppert said the result is more product on the market.

“To again take GDT as an exam-ple, the April 15 event saw 36,549 tonnes of product sold, 143% more than the same time last year.”

Current pricing is also a function of Chinese buyers’ reduced activity of late as record imports through March boosted their stocks, Mr Droppert said.

“With healthy inventories and a new season commencing at home, importers aren’t under pressure to contract ahead – and are disinclined to do so while prices are falling.

“As stocks run down, China is likely to start buying in more sig-nificant volumes again, which will not only remove more product from the market, but likely convince other buyers that opportunities to secure discounted product are near-ing an end.

“With China expected to return as a significant buyer in the coming months and other purchasers enjoy-ing much better affordability, stabi-lisation at prices that still provide above-average returns is a decent prospect heading into the 2014/15 season.”

Murray Goulburn announced its fifth step-up for the season last month, taking its weighted-average available price to $6.66kg/MS after raising the price of butterfat by 9c/kg and protein by 19c/kg.

The co-op has also revised its forecast for the full year from its current price of $6.66 up to $6.85/kg MS.

Managing director, Gary Helou, said external factors including fluctuating international com-modity prices and currency move-ments may result in a final price that is higher or lower than this forecast.

“Global prices for dairy ingre-dients have decreased from their record highs in the past two months,” Mr Helou said.

“The Australian dollar has also seen some recent strength but remains lower than the same time last year when it was well above parity with the US dollar.

“As we look towards the 2014/15 season, these market movements will influence our farmgate price.However, as the current year’s pro-duction is now largely sold, their impact on our current season price is limited,” he said.

Northern Victorian farmer Terry Malone says he’s never had more fun farming and credits this in part to his new irrigation system. See page 25.


4 // news

daiRy austRalia wants three dairy farmers to fill the levy payer representative positions on the six-person panel to under-take the Dairy Levy Poll Process Review.

The review was first signalled by former chair Max Roberts at last November’s AGM.

The panel will be chaired by John Law-renson, a former director of Bonlac Supply Company and United Milk Tasmania.

Former ADF president Chris Griffin and DA company secretary, Ross Joblin, are the other members.

The remaining three members of the panel will be levy payers selected from applicants by the presidents of the indus-try’s state representative bodies.

All levy payers are eligible to apply and should shortly receive a letter outlining the key requirements of panel roles and the application process.

Applications must be submitted by May 26.

Once the Panel has been fully estab-lished, levy payers will receive more infor-mation on how they can make submissions to the Review.

It is currently proposed that any recom-mended changes to the current levy poll process be presented to the industry at the November 2014 Dairy Australia Annual General Meeting.

“The goal is to ensure that the review process is as extensive and transparent as possible, that there is wide consultation with the industry and that it allows the views of levy payers to be clearly reflected by the panel as it considers whether any changes in the dairy industry levy poll pro-cess should be recommended,” Mr Lawren-son said.

Levy review wants farmers

MORe than 270,000 containers of SADA Fresh milk have been sold in South Australia since the brand was launched six months ago, making it one of the State’s top selling milk brands.

Full cream and low fat milk under the SADA Fresh label was launched by the South Australian Dairyfarmers’ Associ-ation last October under a special licens-ing agreement with Parmalat, and sold through Coles supermarkets across the State.

As part of the deal, SADA negotiated that 40 cents from every 2 litre bottle would go to supporting the brand, and financing projects that will benefit South Australian dairy farmers.

The brand is now returning about $20,000 a month.

SADA president David Basham said the brand and the fund was making a genuine difference to the state’s farmers.

“It has won the respect of agricul-

tural leaders across Australia, as well as federal and state politicians and decision-makers, helping to give SADA greater influence and to open the doors on potential new markets for local dairy products,” Mr Basham said.

“We are having conversations that just would not have been possible before.

“It’s also given our farmers a greater sense of pride in what they do and con-siderably more optimism about our future. And for that we have to thank the general public.

“South Australian consumers have warmly embraced the concept as a t angible way of supporting our farmers, and are buying SADA Fresh in quantities that exceeded our initial expectations.”

SADA president David Basham said the brand was returning about $20,000 a month, equating to about 10,000 units

sold every week.Although sold exclusively through

Coles supermarkets across the State for the first 12 months, SADA will look to make the brand available through other retailers, and extend the range of prod-ucts sold under the label.

Its long-term goal is to secure 1% of the drinking milk market of 220 million litres (or 2.2 million litres).

The brand stemmed from a meet-ing in October, 2012, involving SA state MP and Mount Compass dairy farmer Robert Brokenshire, Coles Chief Oper-ating Officer, John Durkan, and SADA CEO Ken Lyons.

Lyons suggested creating a regional milk brand, similar to the Great Ocean Road label packaged exclusively for Coles supermarkets in western Victoria by Warrnambool Cheese and Butter. Durkan thought the idea worth investigating and agreed to further

discussions.After working through all the practi-

cal issues involved in creating, packag-ing and distributing a new milk brand, SADA’s senior management and board decided that the best approach would

be to work in conjunction with an estab-lished manufacturer, with facilities in South Australia.

Mr Basham has since held talks with the Queensland Dairyfarmers’ Organ-isation.

SADA Fresh one of state’s top selling milk brands

sa daiRy farmers should be able to submit project applications to a new fund by October following the success of the SADA Fresh milk brand.

More than 270,000 containers of SADA Fresh milk has been sold since the brand was launched six months ago, making it one of the State’s top selling milk brands.

As part of the deal with Parmlat and Coles, the South Australian Dairyfarm-ers’ Association (SADA) negotiated that 40 cents from every 2 litre bottle sold would go to supporting the brand, and financing projects that will benefit South Australian dairy farmers.

AS part of this, Dennis Mutton has been appointed inaugural chair of the new fund.

Mr Mutton will lead a small board selected for its specialist expertise to

manage profits generated by the sale of SADA Fresh.

Announcing the appointment, SADA President David Basham said the organisation was extremely pleased Mr Mutton had agreed to take on chairing the fund during its crucial set-up phase.

“We could not think of a better person to lead it, and we feel very hon-oured that he has offered to waive sit-

ting fees as part of his contribution to what he sees as an exciting and ground-breaking initia-tive,” Mr Basham said.

SADA’s aim is to appoint other board members over the coming weeks.

Legal and financial arrangements for the fund will be formalised

by the start of the new financial year, with enough money likely to be in hand to call for project applications before the brand celebrates its first anniver-sary.

Mr Mutton said he agreed to become involved with the fund because he was impressed by the concept and its poten-tial to make a genuine difference to the

South Australian dairy industry.“This is an industry association

showing significant initiative and lead-ership,” he said.

“SADA Fresh provides the oppor-tunity to demonstrate that by working collectively farmers can secure a more viable future.

“They are not sitting back and saying ‘woe is us’; they are doing something pro-active to generate opportunities and a return on investment.”

Mr Mutton’s brief is to make sure the fund is invested in a way that maximises returns to the local dairy industry.

Over the coming months this will involve helping to develop clear guide-lines and protocols for the allocation process, including identifying research and development priorities, and criteria for selecting projects.

A former chief executive of South Australia’s primary industries depart-ment, Mr Mutton is Chair of the CRC for High Integrity Australian Pork and BioInnovation SA, and a member of the Premier’s Science and Industry Coun-cil.

He is a former chair of the national Grape and Wine Research and Devel-opment Corporation and the Council of Rural Research and Development Cor-porations, and has held directorships with the Australian Landcare Council and Australian Rural Leadership Foun-dation.

Since leaving the public service in 2002, he has worked as an independent consultant in the fields of industry and regional development, natural resource management, and the strategic manage-ment of research and development.

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news // 5

the FiRst commercial shipment of fresh milk to China occurred early this month when 4500 bottles of fresh milk from NSW co-op Norco were flown to Shanghai.

Norco’s milk will be sold as a premium product for about $9 a litre in Chinese supermarkets, a similar price to the equivalent products in the market.

Norco is now capitalising on a successful trial of 1000 litres of fresh milk last month that saw fresh milk delivered from Australian farms to Chinese consumers in seven days.

Norco chairman Greg McNamara said the changes have opened the door for the farmer co-op to access the burgeoning demand from Chinese consumers for Australian fresh milk products.

“The pipeline has the capacity to deliver more

than 20 million litres of fresh milk to consumers in China within the first 12 months of operation,” Mr McNamara said.

Norco doesn’t have a 20 million litre contract but is confident interest from China will enable them to build to that level.

The trial was conducted by NSW

farmer representatives Dairy Connect, farmer co-op Norco and international export consulting company, Peloris Global Sourcing (PGS).

Dairy Connect chairman, George Davey, said the commercially viable cold chain pipeline would open the door for millions of litres of fresh

milk exports to China each year.

PGS, Dairy Connect and Norco have implemented an unprecedented quarantine clearance agreement with China to bring the delivery time well within the shelf life of fresh Australian pasteurised milk.

Mr Davey said up until

now all export efforts have been hampered by lengthy testing and quarantine processes before shipment from Australia – and again upon arrival in China.

Accordingly, the export lead time for fresh milk typically ranged from 14 to 21 days which did not fit within the normal shelf life for fresh

Australian pasteurised milk.

This breakthrough has come after 12 months of collaboration between PGS and Chinese officials to develop rigorous quality assurance protocols that have now been fully tested and officially sanctioned by the relevant Chinese agencies.

As a consequence, the PGS cold chain pipeline has been supported by changes to existing China import

clearance procedures to accommodate the limited shelf life of fresh milk imports from Australia.

PGS managing director, Peter Verry, said the cold chain pipeline solution incorporates stringent quality assurance controls that ensure the fresh milk meets or exceeds China’s food health and safety

standards.“It ensures the

product is maintained at optimal temperature at all times during transit, and incorporates an innovative product

security system that identifies and tracks the location of individual units.”

Norco has a new contract with Coles kicking off in July and, to

meet demand, Mr Kelly said the co-operative had increased production from Northern Rivers members and taken on 60 new farms in Queensland.

nORCO’s new fresh milk pipeline to China has been described as a “real game changer” by Queensland Dairyfarmers’ Organisation president (QDO) Brian Tessmann.

Mr Tessmann said he applauded news that the process for taking fresh milk from Australian farms and landing it into dairy cabinets in China has become simpler.

“This could be a real game changer,” Mr Tessmann said.

“This is especially the case for the northern dairy industry, including

NSW and Queensland, where we predominantly specialise in fresh drinking milk production for the domestic market and currently have very limited capacity for other export avenues such as milk powder or cheese.

“With the news that Norco is sending commercial shipments of fresh milk, this will help open another, potentially major high value, export door for Norco farmers.”

Mr Tessmann said he hoped the process started the “much needed”

path of diversification of markets for the northern dairy industry.

“The northern dairy industry desperately needs new market avenues that help farmers gain better returns at farm gate, create more competition for Queensland fresh milk and challenge the ‘milk price war’ and supermarkets selling fresh milk at the ridiculous price of $1 per litre which has caused market failure in our region,” he said.

“If ventures such as this take off – which I believe they have

enormous potential to do – it will very quickly send a message to the major supermarkets that they cannot take Queensland fresh milk or dairy farmers for granted.”

Mr Tessmann said that the industry was realistic that fresh milk exports to Asia would not solve the challenges facing the industry overnight, but he also pointed to the enormous potential in the growing Asian middle class.

“A recent conference in Cairns looked at this very issue of servicing

the rapidly growing demands for clean, green, Australian produce in China and Asia.

“There is a very strong and increasing desire to grow export markets, both in Australia and in Asia, and QDO continues to applaud all those involved in these ventures.

“QDO is keen to support, and is continuing to work with, governments and industry partners on similar such ventures that can assist the Northern dairy industry to rebuild and to have a brighter future.”

Norco sends fresh milk to China

A ‘game changer’ for northern states

“The pipeline has the capacity to deliver more than 20 million litres of fresh milk to China within the first 12 months.”

– Greg McNamara

Norco chairman Greg McNamara.


6 // news

FOnteRRa austRalia has over-hauled its milk pricing structure, claim-ing it is easier to understand, reduces risk and complexity, and above all is fairer to all suppliers.

Fonterra Australia managing direc-tor, Judith Swales, said many of their suppliers said a simpler milk price system would better support farm prof-itability and informed decision making on-farm.

“We listened to that feedback and agreed we needed to actually do some-thing to lead the industry forward,” Ms Swales said.

“The new system is simpler, fairer, equitable, and more transparent.

“It will reduce the range of prices paid to farmers against the average and will help them understand the impact milk price and incentives have on their farm businesses so they can make more informed decisions on farm.

“I believe it will be instrumental to

setting up farmers and the industry for long-term, sustainable growth.”

The new system was developed over more than a year in partnership with Bonlac Supply Company (BSC) and col-laboration with industry experts such as well-known industry consultant John Mulvany, the UDV, and inter-national pricing system experts.

Under the new system, the milk pool stays the same, but suppliers will receive a higher base price (with money paid under the former Boost category now paid as part of the higher base price).

The Seasonal Payment, SRP and SRP+ (Seaonal Ratio Payment) cate-gories have been replaced with a single

Off-peak Payment category. Fonterra said SRP was removed

and reinvested into off-peak pricing to reduce risk for farmers and maintain a price signal for the value of off-peak

milk to its cus-tomers

It said the Boost growth incentive (pay-ments for growth in milk produc-tion) will be rein-vested back into base price and growth will be supported out-

side the pricing system to make it more attractive and material for farmers in an expansion phase. Ways to support growth will be announced closer to the season.

Production payments will remain according to their current terms.

Monthly prices will stand alone and won’t be linked to production in other months.

Fonterra said compensation will be available for the next two years for sup-pliers who do not receive more money under the new system.

BSC Chairman Tony Marwood said the new system will make it easier for farmers to understand their milk price and will assist them in making informed decisions for their farm businesses.

“We’ve worked very closely over the past year with Fonterra Australia and I’m pleased the new system really captures the feedback we got from our farmers,” Mr Marwood said.

“It will send clear pricing signals for farmers and let farmers focus on run-ning their farms and making decisions that increase their profitability, rather than deciphering milk price.”

John Mulvany said although milk price is important for farmers, many

other areas – such as costs of produc-tion – impact a farmer’s bottom line and profitability.

“My research confirmed that com-plexity in milk pricing doesn’t support good, profitable decision making on farm,” Mr Mulvany said.

“Some farmers confuse a high cost of production with out-of-season milk, but some farmers simply produce milk at much lower costs than others.

“That’s why it’s better to have a sim-pler, more transparent system that lets farmers produce milk when it best suits their business and is most profitable for them.

“I’m pleased Fonterra has recog-nised this and put in place a system that farmers can easily understand and use to make informed decisions for their farm businesses.

“It’s a great change and I hope it spurs the rest of the industry to take notice.”

Fonterra changes pricing

FOnteRRa’s new pricing system has been described as more equita-ble and “a gutsy move” by one long-time supplier.

Linda Roache, who milks around 300 cows at Woolsthorpe in south-west Victoria, said the new system was a huge leap in the right direction.

Mrs Roache has been on the Fonterra supplier forum for the past six years and was involved in clus-ter meetings to explain the roll out of the new pricing structure.

The forum had been advocating for a better and

simpler pricing system for several years.

“I think it is a more equitable way of distrib-uting the milk pool,” Mrs Roache said.

“Fonterra is being pro-active in looking after their suppliers. To build more into the base price is long overdue. It is a gutsy move by Fonterra to go out with this first.”

Mrs Roache expects other processors to follow. “How can they compete if they don’t,” she said.

She said the system also stopped sending the wrong signals to farmers.

“The whole onus is to stop people chasing pro-duction bonuses that they weren’t achieving sustain-ably. There’s no point get-ting to 41, 42 or 43% SRP Plus if you spend too much money chasing it and fall short by a few thousand litres. The risk there was incredible.”

“The timing of the mes-sages to promote confi-dence or knock it on the head is critical in a dairy season.”

Mrs Roache said there was potential for her farm to make more money out of it but “I am guaranteed

not to lose any money for the next two years and that is a really important para-chute for any business”.

“In dairy farming I have never heard those words before.”

Mrs Roache said the

“honeymoon period” of two years would be valu-able for farmers to see how their milk volume works in the new pricing system compared to the old system.

“That is a clever way of launching a new pricing system.”

Mrs Roache said the new structure was well received when details were revealed at regional cluster meetings in early April.

“Some of the people who were getting SRP and had been making money out of things that had been dropped showed a bit of

concern, but they were reassured by the fact that for the next two years they couldn’t lose any money.”

“They will make their decisions in that time on how they adjust their busi-ness or look at alterna-tives.”

Mrs Roache said the system would encour-age farmers to look at how they could reduce costs to manipulate their bottom line.

“The days are gone when you could just get out there and milk the cows and hope for the best.”

Suppliers won’t lose money for two years

Linda Roache

“It’s a great change and I hope it spurs the rest of the industry to take notice.”

– John Mulvany

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MuRRay gOulbuRn will invest $127 million to upgrade three of its exist-ing sites in Victoria and Tasmania over the next 12 to 18 months. The projects are dependent on upgrades to regional infrastructure, particularly energy, and Murray Goulburn will seek to work with the Govern-

ment and energy providers to deliver the upgrades.

MG managing director, Gary Helou, said the co-op will invest $74m in cheese facilities at its Cobram fac-tory, $38m in infant nutri-tion at Koroit and Cobram and $14m in dairy bever-ages at Edith Creek in Tas-mania.

“The three projects involve investment in world-leading technology with state-of-the-art auto-mation for processing and packaging a range of dairy foods destined for Asian and Australian consum-ers,” Mr Helou said.

“The plants will carry superior capabilities to

customise dairy prod-ucts for local prefer-ences with efficiency and speed to meet the growing demand for high quality and safe dairy foods from Australia.”

The $74 million invest-ment at Cobram will build a cheese cut and wrap facility to serve Australian

and Asian consumer and food service markets.

The $38 million investment at Koroit and Cobram will increase capacity for production of nutritionals for growing international infant nutri-tion markets.

The $14 million invest-ment at Edith Creek will

install and commission a flexible small format cup and bottle filling line to commercialise a range of dairy beverage prod-ucts for consumer mar-kets in Australia and Asia.Mr Helou said these announcements follow decisions made last year to invest $120 million in two

new liquid milk facilities in Melbourne and Sydney to service the co-op’s 10-year deal with Coles, $19 million in projects to increase UHT capac-ity at Leongatha, $5 mil-lion for consumer butter at Koroit, and $2 million to increase cheese capacity at Cobram.


news // 7

MG’s $127m factory upgrade

a new $45 million UHT milk processing plant in Shepparton has the capability of lifting capacity to 300 million litres of milk a year to service high value Asian markets.

The Pactum Dairy Group’s new plant was officially opened earlier this month, producing UHT milk in 250ml, 330ml and one litre packs.

It is currently processing 100m litres of milk per year.

Pactum Dairy Group signed a supply agreement last month for premium high quality dairy milk with the Chinese Government-owned Bright Dairy, one of the country’s largest companies with total sales last year of US$2.6 billion.

Bright Dairy sells fresh milk, cheese, powder and yogurt under six brands, distributed throughout China through 400 distributors and in more than 400,000 sales outlets.

Freedom Foods managing director, Rory Macleod, said his company was pleased to be aligned with a mar-ket-leading company with the resources and capabil-ity to market and distribute premium dairy products.

“PDG will look to further building on its relation-ship with Bright Dairy in the longer term as it expands its product and market presence.”

Mr Macleod said Australia has a unique advantage in the supply and manufacture of high quality premium foods.

“With increasing demand from markets in China and SE Asia for high quality value added product, Aus-tralia through companies such as Pactum, is well placed to play an important role in this supply chain.”

Building off Australia’s competitive advantage in sourcing high quality dairy milk at a competitive world price, Mr Macleod said PDG would provide long term supply of value-added dairy milk products, based on state of the art low cost manufacturing assets in UHT packaging formats.

“In the future, enhanced trade arrangements between Australia and China will further increase trade between our two countries and build a stronger stra-tegic alignment for the benefit of both countries,” Mr Macleod said.

Shepparton plant will grow with Chinese demand

Bright Dairy UHT milk.


8 // news

the viCtORian Government’s decision to lease the Port of Melbourne to the private sector has angered the Tasmanian Farmers and Graziers Association. Farmers fear steeper increases in charges for handling their produce than if the port stayed in government hands yet there is no alternative port available, said the associa-tion’s chief executive Jan Davis.

The Victorian government has confirmed that under the federal government’s 15% bonus to encourage states to sell their assets, it would lease out the Port of Melbourne for at least the next 40 years to pay for major infrastruc-ture projects.

In a separate move the government has sold the rights to build a third international container terminal at the port to an international consortium of Anglo Ports Pty Ltd and Philippines-based group International Container Termi-nal Services Inc.

Ms Davis said the potential impact on Tasmania was immense. “Tasmania is the biggest single customer of the Port of Melbourne. Up to 30% of freight passing through the port is dispatched from, or destined for, Tasmania,” she said. “Nearly half of that – 12% of all movements – comes from Tasmanian farmers.

“We have no option but to send our produce through that port, as it is effectively the only access we have to the mainland and to export markets.” Ms Davis said user charges had increased enormously recently. While a private enterprise operator might run a more efficient port administration, they would also seek to maximise profits. There is no incentive for savings to be passed through to farmers, or other customers.

Port of Melbourne sale would hurt Tasmanian farmers

Commission of Audit report provokes outrageFaRM gROuPs across the country have shaken their heads that the National Commission of Audit report would target research and develop-ment as a saving, when

the return on investment is so great.

The Queensland Farm-ers Federation said the report provides “a seem-ingly very shallow analysis of key issues and where

savings could be made”.“In many instances,

much more sophisti-cated modelling is needed to analyse the impact of some decisions,” the Queensland lobby

group said.“For example, its rec-

ommendation to reduce funding to the Rural Research and Develop-ment Corporations would see the Australian agri-

cultural sector fall behind the rest of the world in its productivity and profit-ability, eventually cost-ing the economy far more than it would save.

“If the Government

adopts this proposal, it will mean the death of our Research and Develop-ment Centre which deliv-ers vital services to our industry,” Mr Jones said.

“The dairy industry is export reliant. We com-pete with the best indus-tries from all over the world, so it is essential we continue to invest in new products, technologies and innovations.

“The most recent eval-uation of RDCs, reviewed by Treasury and the Department of Finance, found for every A$1 invested, $10.51 is gained over 25 years.

“The Coalition under-stands the value of this investment as it made an election promise to increase the Common-wealth’s spending on rural R&D by $100 mil-lion.”

National Farmers Fed-eration CEO, Matt Lin-negar, said reducing industry assistance in the form of government com-mitment to research and

development, drought funding, and abolishing Rural Financial Counsel-lors suggests the Com-mission of Audit has a limited understanding of agriculture.

“The fact is there is simply no ‘fat’ to cut in agricultural investment by the Government if the ultimate aim is a stronger economy.

“The commission report claims that industry assistance has been increasing. This is not the case for the agriculture sector. According to the OECD figures, Australian Government provided support to agriculture was worth almost 13% of farm income in 1986; and the figure is now less than 3%. This compares with our international competitors receiving up to 60%.

“Government’s role is to invest in outcomes that deliver a public bene-fit. And in several of these areas, there is a clear role for Government.”


news // 9

austRalia needs a long-term national food plan, a widespread shift to higher-value products and to trade more effec-tively on its reputation for growing safe food if it is to capitalise on the emerging Asian market.

Australia has the poten-tial to feed 60 to 80 mil-lion people but the future of food production for export will depend on productivity increases, according to a new report from the Academy of Technological Sciences and Engineering (ATSE).

The Academy’s newest report, Food and Fibre: Australia’s Opportuni-ties, assesses the current state of Australia’s food and fibre sector to identify challenges and potential areas of growth.

It emphasises the need to support the agricul-

tural innovation system through ongoing invest-ment in research and development in order to achieve the increases in productivity that will be required for this sector to remain competitive and develop emerging export opportunities.

The report was launched at a Rural Press Club of Victoria break-fast last month by report author Professor Snow Barlow of Melbourne Uni-versity.

“Considerable research innovation and capac-ity development will be required to provide the technical and eco-nomic basis to suc-cessfully pursue these strategies towards cap-turing an increased share of the emerging Asian middle class food and fibre market,” Prof Barlow told

the audience.Among the report’s rec-

ommendations are: ■ Australia needs a long-

term policy vision with focus on export growth and high value-add, resulting in enhanced profitability that flows back to all sectors, including farm-gate.

■ Australia needs to build and promote global brand recognition of Australia’s food and fibre products – Brand Australia.

■ Australia must stay ahead of the pack in

innovation. ■ Australia needs better

networks and con-nectivity between researchers, growers, producers and mar-keters.The ATSE report

recommended a national approach to branding Australian agricultural products, recommending a ‘Brand Australia’ concept.

“It’s all about things you actually get on the table that have a brand on them not commodi-ties that you put in some-one’s silo or commodities that you put in someone’s freezer to get minced,” Prof Barlow said.

“Australian produce has a very good reputation internationally as being safe, quality and traceable.

“We need to brand products in order to get

Asia a pipedream without long-term national plan

austRalia Risks missing a “golden opportunity” to grow its agricultural sector, and addressing this requires a concerted and coor-dinated approach from all sector stakeholders, according to a Rabo-bank report.

Agriculture in Focus 2014: Com-petitive Challenges says Australian agribusiness is facing mounting competitive threats throughout the supply chain, which require resolute and aligned action from industry and government.

Rabobank’s Luke Chandler said Australia risked failing to capital-ise on rising demand for food from Asian without a more co-ordinated effort from industry and govern-ment.

“Many of Australia’s competitors in agricultural markets around the world are investing heavily and becoming much more productive, and this is very much raising the bar for our agricultural industries.”

“We need to realise that Aus-tralia is not the only agricultural exporter looking to capture this increasing demand,” he said.

“Over the past decade highly-resourceful developing countries have begun to assume a greater role in the global export trade of

food and agriculture products.“The potential of countries

in South America and Eastern Europe is obvious, but even some major food-importing countries and regions, such as China and the ASEAN-5 nations, are playing a greater role in shaping the export landscape.”

Mr Chandler said higher on-farm costs and slowing produc-tivity growth in many sectors in Australia relative to global peers have increased the importance of driving efficiencies in alternate parts of the supply chain.

“This requires commitment to a unified industry-wide, long-term strategy to invest in infrastructure improvement which involves uni-lateral input from government, supply chain operators and indus-try participants.”

Mr Chandler says that while the solution to the competitive chal-lenges to Australian agriculture does not lie in any one direction, there is a ‘road map’ that can guide industries to build a more compet-itive and sustainable base for the sector into the future.

“While some competitive fac-

tors such as exchange rates and wage costs are beyond the sector’s control, many other issues can be successfully addressed through the concerted and coordinated action of industry and government insti-

tutions,” he said.“There is no ques-

tion that a food and agriculture sector that has better access to global markets, ready access to capital, more efficient logistics infra-structure, higher value product and processes,

a highly sustainable environmen-tal impact, and more affordable production inputs will be better placed to capture the ‘Asian dining boom’.”

However, Mr Chandler said the objective should not be for Austra-lia to feed the world.

“The reality is Australia is not in a position to supply and compete in the high-volume markets.

“Rather our focus needs to be on developing into high-value markets where we can compete on quality and other sought-after attributes where consumers have the capac-ity to pay. Australia will not be the food bowl of Asia, but we can be the delicatessen.”

Other exporting nations surpassing Australia

that value that we actu-ally have in our produce because of its record.”

A united approach was also needed if Australia wanted to help feed the world’s growing popula-tion.

“The Victorian Depart-ment of Environment and Primary Industries did put out an actual plan for Victoria in terms of Asian

food (demand) a few weeks ago which I think was a very good move for-ward but this plan has got to be a national plan, it has got to be driven by the minister and it’s got to be something that doesn’t wobble between govern-ments,” Prof Barlow said.

“Governments come and go and it would be tweaked as the markets

evolve but it needs to be something that we stick to for at least a decade.”

While the current White Paper was a govern-ment-led process, Profes-sor Barlow said there was no Ministerial council to guarantee implementa-tion.

He said he hoped the ATSE report would influ-ence the White Paper.

Professor Snow Barlow

Luke Chandler

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10 // news

China has imposed strict accredita-tion criteria on suppliers of infant for-mula which has cut access to more than 100 former suppliers.

China is seeking an integrated supply chain, according to Keith Woodford, professor of agribusiness at New Zea-land’s Lincoln University, who is cur-rently in China working on agribusiness projects.

“They want to see companies that have control of the supply chain from the time the milk comes out of the udder of the cow right through to the final formulation, and they want to be able to talk to one person who has con-trol and who can make decisions and report on the whole supply chain,” Prof Woodford said.

“In the infant formula area there are many sensitive issues in regards to the health of small babies.

“They simply want a few large scale companies they can be confident have total systems in place which they can monitor.

“But when you have 60 or 100 differ-ent brands coming into China, they are

saying this is hopeless for guarantee-ing food safety.”

A 2008 scandal in which domes-tic milk was deliberately adulterated with melamine, a byproduct of coal, in order to fake protein tests is still hurt-ing Chinese dairy producers more than five years on.

Foreign infant formula brands now account for half the market, up from about 30% before the revelation that at least six infants had died and 300,000 were made ill after drinking tainted formula.

Since then, Chinese parents have snapped up infant formula with any international connection, allowing for-eign brands to charge a hefty premium and spawning a homegrown industry of smugglers hauling boxes of formula into the country.

The new rules require dairy products produced overseas to be registered with the quality watchdog, or be barred from entry at China’s ports.

A second regulation requires all for-mula sold in China to carry Chinese-language labelling affixed at the source.

China imported a record 1m tons of milk powder last year. In the first quar-ter of this year, imports rose nearly 24% to 240,000t. One of the biggest benefi-ciaries from Chinese consumer’s deci-sion to source imported formula has been New Zealand, and their suppliers

will feel the brunt as a result.There are currently 127 NZ compa-

nies supplying infant formula to China, and these will be reduced to six.

“There have been a lot more tiny infant formula companies out of New Zealand than anywhere else,” Prof

Woodford said. “Switzerland has only a few very big

companies, including the likes of Nestle, but New Zealand has had a proliferation of small-scale companies.

“It has this huge proliferation of brands specifically for China.”

New criteria sees China cut infant formula brands

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news // 11

ROsevale daiRy farmer Craig Sellars faces the prospect of moving his farm business from the land his family has held for 134 years. But despite the emotional pull, he sees a silver lining.

The Sellars farm has been prone to flooding through the generations but the family has persisted through adversity.

As the Queensland Government considers building dams to combat flooding in the south-east of the state, the fifth-generation farmer realises his dairying opera-tion could soon be under water.

However, as long as he can continue dairying in another location, Mr Sellars is open to change.

“If it did come I’d shed a bit of a tear because we’ve been there so long, but maybe I could improve myself by buying a better farm in another location,” he said.

“We would have to discuss it as a family, but I’m getting to a point where I don’t want to look back and prefer to look forward. If they offer the right money I’ll go somewhere else to keep farming.

“They’re trying to save the flood-prone towns down-stream, particularly Ipswich, and we understand that. We only have to have wrong rainfall in the wrong spot and it can do a lot of damage.”

Mr Sellars, 33, said dairy farming remains in his blood and despite tough times in Queensland he has no plans to leave the industry.

“Farming is all I ever wanted to do since I was old enough to understand what it was all about. It’s in my blood,” he said. “I always wanted to come back on the farm and never liked being in town. I love working with the cows, the machinery, everything about it.

“Our dairy is quite low in a valley and gets quite wet. There’s always some form of flood or wet problem,” Mr Sellars said.

The farm was a victim of last year’s deluge.“Between rotting crops, washing out crops, erosion,

wiping out fences, there was a lot of destruction,” Mr Sellars said.

The damage forced the family to end a sideline hay production and selling business.

“Over the years we’ve done a lot of different things and diversified into production and sales of lucerne and cereal hay. That stopped after the floods and we returned the land to cropping for the dairy,” Mr Sel-lars said.

Despite his love for dairying, Mr Sellars admits times have been tough in Queensland.

“It’s been a combination of a lot of things. The floods hit hard and then there was dry weather for the past 9-10 months. People can’t afford to be buying feed at the price that it is. Costs are just going through the roof but the milk price isn’t keeping up. Recent rain has eased the pressure at bit.”

Silver lining in potential move

the Queensland Govern-ment will consider increasing the size of Wivenhoe Dam and con-structing a number of new dams to lessen the impact of future major floods in Brisbane and Ipswich.

However, farmland would be a victim of the proposed changes.

Premier Campbell Newman said the locations of eight new dams had been identified which would potentially protect thou-sands of homes and businesses.

“This is very early days and I

stress to those landowners in the areas affected that there is a lot of work that needs to be undertaken before any plans are implemented,” Mr Newman said.

“But it is our duty to do what-ever work we can to investigate all possible options.”

Mr Newman said he understood this would worry rural landowners in the Brisbane Valley.

“I say to them, we will deal with this sensitively and carefully,” he said.

Possible new dam sites include the upper Brisbane River (near Linville), the Cooyar Creek (near Benarkin National Park), Emu Creek (near Harlin), the Bremer River (near Mt Walker), the Stan-ley River (near Peachester), Tenter-hill Creek (near Gatton), Lockyer Creek (near Murphy’s Creek) and Cressbrook Creek (near Kipper).

The State Government says it does not know how it will afford to build new dams in the south-east.

Water Minister Mark McCardle

told the ABC the projects would be expensive.

“This is very early days,” he said.“Our focus at this point in time

is on building dams, but again I get back to the point that these dams will cost a lot of money to build.

“We’d like to have federal help but we can’t be guaranteed of that, so it could fall back on the state.

“We need to work out how we’re going to pay for that - that’s a ques-tion we have to face in the very near future.”

New dams would affect farmland

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12 // news

the COnsuMeR watchdog will take Coles to the Federal Court over claims it tried to extract $16 million from 200 suppliers.

In the Australian Competition and Consumer Commission (ACCC) claims registered with the Federal Court, Coles’ target was to obtain $16m in “rebates” from smaller suppliers through its Active Retail Collaboration (ARC) program.

The ACCC says Coles engaged in unconscionable conduct under its ARC program and convened the Australian Consumer Law (ACL).

Coles has said it would “vigorously defend the allegations made against if by the ACCC”.

“The ... legal action concerns a detailed supply chain program

implemented by Coles over two years ago as a part of its strategy to develop a more efficient and internationally competitive supply chain,” Coles said in a statement.

“The project involved improvements to both supply chain collaboration and efficiencies in logistics. It was designed to deliver benefits to Coles, suppliers and customers through lowering costs and improving availability of stock in our stores.”

The ACCC alleges that in 2011, Coles developed a strategy to improve its earnings by obtaining better trading terms from its suppliers.

It is alleged that one of the ways Coles sought to improve its earnings was through the

introduction of ongoing rebates to be paid by its suppliers in connection with the Coles ARC program, based on purported benefits to large and small suppliers that Coles asserted had resulted from changes Coles had made to its supply chain.

The ACCC says Coles was ultimately seeking an ongoing ARC rebate in the form of a percentage of the price it paid for the supplier’s grocery products.

The ACCC alleges that in relation to 200 of its smaller suppliers, Coles required agreement by the supplier to the rebate within a matter of days.

If these suppliers declined to agree to pay the rebate, Coles personnel were allegedly instructed to escalate the matter to more senior staff, and to threaten commercial consequences if the supplier did not agree.

The ACCC alleges that, in a number of cases, threats were made when suppliers declined to agree to pay the rebate.

“The ACCC alleges that Coles used undue pressure and unfair tactics in negotiating with suppliers, provided misleading information and took advantage of its superior

bargaining position, so that its overall conduct was in all the circumstances unconscionable,” ACCC chairman Rod Sims said.

“The conduct of Coles alleged by the ACCC in these proceedings was capable of causing significant detriment to small suppliers’ businesses.”

These proceedings arise from a broader investigation by the ACCC into allegations that supermarket suppliers were being treated inappropriately by the major supermarket chains. That broader investigation is continuing.

The matter is listed for a directions hearing in Melbourne on June 6.

the austRalian Dairy Farmers and National Farmers Federation have both welcomed the ACCC’s legal action against Coles, and repeated calls for a man-datory code of conduct.

The ACCC has alleged that in 2011, Coles sought to boost earnings by requiring grocery suppliers to pay ongoing rebates, and if the supplier declined the agreement, allegedly threatened them with commer-cial consequences.

The NFF has raised concerns over particular areas which are the subject of the allegations, includ-ing Coles’ use of undue influence and unfair tactics against suppliers in order to obtain payments, and its ability to take advantage of its superior bargaining posi-tion.

If proven true, this type of behaviour in the market place is capable of causing significant detriment to small business operators, said NFF President Brent Finlay.

“The NFF recognises the importance of an Austra-lian food supply chain where all players – farmers, pro-cessors and retailers – have the opportunity to make a profit, and that there’s not a misuse of market power by one player against another.

“That’s why it’s important that these particular alle-gations are aired in court and that Coles has a chance to respond.”

ADF President, Noel Campbell, said the ADF looked forward to the result of the court case.

“This latest action by the ACCC once again high-lights the need for a Mandatory Code of Conduct, including the establishment of an independent Super-market Ombudsman with penalties to balance the excessive power of the major retailers.

“ADF will continue to lobby Government as well as engage in dialogue with the major retailers about the code.”

The NFF also wants a mandatory code. It was actively involved in the development of a prescribed voluntary code with retailers and processors before leaving negotiations, sighting a loss of confidence.

Coles said this month it had supported a code of conduct proposed by the industry, which is currently being assessed by the Federal Government.

However, the ACCC said the code would not pre-vent the type of behaviour alleged in their court action.

“You can drive a truck through the code,” ACCC chairman Rod Sims said.

Farmers welcome ACCC decision

the accc alleges coles❱❱ Provided misleading information to suppliers

about the savings and value to them from the changes Coles had made.

❱❱ Used undue influence and unfair tactics against suppliers to obtain payments of the “rebate”.

❱❱ Took advantage of its superior bargaining position by, amongst other things, seeking payments when it had no legitimate basis for seeking them.

❱❱ Required suppliers to agree to the ongoing “rebate” without providing them with sufficient time to assess the value to their business.

Coles’ strong-arm tactics result in court

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news // 13

the OPPORtunity to investigate agriculture on a global scale is now open through two dairy scholar-ships available through Nuffield Australia.

Applications are required by June 30, with inter-views held in July and August. Scholarships are awarded in September with the Scholarship travel commenc-ing next year.

There is a scholarship available for a dairy farmer anywhere in Australia, supported by Dairy Australia, and a second scholarship available for a dairy farmer based in Victoria, supported by the Gardiner Founda-tion.

The successful applications receive a total of 16 weeks international travel. This begins with a six week Global Focus Program of group travel to the power-houses of agriculture such as China, India, Brazil, USA, Canada and Europe.

Additionally each Scholar undertakes a further 10 weeks of travel to countries of choice to pursue an indi-vidual study program into a research topic of interest to themselves and to the industry.

The Nuffield network provides assistance to develop itineraries for individual study programs and gain access to the key institutions and people central to the Scholar’s area of study.

Scholars then become part of a powerful alumni net-work of scholars right around the world, providing life-long opportunities for further learning and friendship.Visit: www.nuffield.com.au

Arla Foods targets Chinese taste budshOw dO you win the hearts of dairy consumers in China?

Danish dairy proces-sor Arla Foods aims to do this by developing prod-ucts that appeal to their taste preferences and food habits.

Central to this proj-ect is a US$1.8 million innovation lab opened last week in Beijing. It brings together Danish and Chinese innovation to develop cheeses and other dairy products.

Located in the China-Denmark Milk Technol-ogy Cooperation Centre in Beijing, the lab has Arla and Mengniu Dairy Group working to strengthen the Chinese dairy industry’s milk quality, food safety and quality control on the dairy farms. The princi-ples applied are based on those guiding Arla’s Euro-pean quality programme Arlagården.

The Prince Consort of Denmark opened the lab which will employ four people including cheese-

makers and innovation specialists with Danish or Chinese background. They will work with custom-ers, consumer groups and Mengniu.

Arla senior vice pres-ident Frede Juulsen, responsible for Arla’s busi-ness in China, says more Chinese consumers are experimenting with food, wine and tastes.

“We are striving to be as close to the Chinese consumer as possible to create taste experiences that suit their diets and taste profiles, thereby bringing health and inspi-ration to China.

“We aim to take the lead in the cheese category in China, and building a cheese lab is a key step… a place where we can co-create and innovate in an agile and dynamic manner.”

Chinese have recently been gaining an appetite for cheese.

Arla’s business in China is based on the export of dairy products

from Europe including milk powder, UHT milk and cheese.

The innovation lab in Beijing will enable Arla to launch products developed and produced exclusively for Chinese

consumers.“It’s all about develop-

ing the next blockbuster product for the Chinese dairy market. Our first focus will be to create the right kind of cheese prod-ucts that will make more

Chinese consumers love cheese in new and differ-ent ways.

“But it must be done in a way that respects and contributes to the food trends developing in China.”

Winning a slice of China’s cheese trade: Arla Foods is partnering with Mengniu Dairy to develop cheeses to suit local tastes.

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14 // wORld news

Farmers should consider global retail trendskey tRends in food, nutrition and health are good news for dairy because they all align in favour of dairy products – but not the traditional ones, says a UK food mar-keting expert.

Farmers should stop thinking only as producers and start learning about what their product is made into because it’s impor-tant for the future, said Dr David Hughes, professor of food marketing at Impe-rial College London.

Consumers in the Western world are inter-ested in naturally func-tional foods. There’s a huge interest in energy foods and protein, seniors’ and kids’ nutrition and

healthy snacking. All these relate to dairy products. Similarly there’s concern with weight management and its link with protein, Hughes said.

“All the big megatrends are facing in the same direction for dairy which is good news.”

In the biggest con-sumer markets in the world, such as the US, the new products doing extraordinarily well in the last few years have been dairy-based. “Chobani, a Greek-style yoghurt, has gone from nothing to $1 billion in, say, five years; that is astonishing. A brand that’s available in Australia, Danone’s Activia (a probiotic yoghurt), is a multi-million dollar brand.”

At least half the most successful new prod-

ucts launched in the US recently are dairy includ-ing another Greek yoghurt – Danone’s Dannon Oikos.

“But even the tradi-tional products which have been relaunched, like chocolate milk, are doing well because we are now adapting those products, reducing the amount of sugar and fats.

“We are giving mums permission to go out and buy products children like to consume – no high-fructose corn syrup and added essential nutrients. We’ve got 21st century products emerging from products that have been around for years.”

Mr Hughes says you know dairy is important when the “really big boys” get involved, such as Pep-siCo’s joint venture with Muller, the German dairy

company, to launch food products in the US. And Coca Cola is launching a joint venture for milk-based energy products.

“If you see PepsiCo and Coca Cola move into milk then you see a lot of dyna-mism in modern milk mar-kets – that’s good stuff.

“In the western world it’s pretty good news: there are new dairy prod-ucts doing very well. How-ever the dairy products of yore – block cheddar, regu-lar butter or fluid milk – in many developed country markets are going back-wards. They are seen as too fatty, too inconve-nient, incompatible with 21st century lifestyle.

“Most developed coun-tries say milk consump-tion is going backwards. In developed countries you expect to see low growth

in classical product areas. The growth is in new prod-ucts such as Greek yoghurt which has done astonish-ingly well.”

Mr Hughes said the developing world is a dif-ferent story. Global pop-ulation growth could be 2 billion in the next 40 years and disproportionately

that population growth will be in Asia and Africa.

As their incomes go up they trade up to higher protein foods.

Mr Hughes said those companies or co-ops that don’t move for higher value branded specialty products and ingredients face being squeezed out by

brand-orientated multi-nationals.• Hughes was speaking last week at a Dairy Summit in Christchurch hosted by animal health com-pany Zoetis. He spoke about emerging trends in food and retailing and their impact on New Zealand’s farming and dairy industries.

Growth in Greek yoghurt like Chobani in the US, has been astonishing, says David Hughes.

Arla farmers cut carbon footprint

As part of Arla’s new strategy for sustainable development, it is offering free and voluntary farm inpsections to shareholders.

euROPean daiRy processor Arla says it has developed a global strat-egy for sustainable dairy farming.

The new strategy, encompassing climate, waste and animal welfare, will help Arla farmers to improve their environ-mental credentials, the company says.

European dairy farmers are said to be highly rated in mitigating their climate impact. The Arla strat-egy is capable of helping its suppliers achieve more sustainable milk produc-tion, chief executive Peder Tuborgh said.

“We can and have taken a stand on animal welfare, climate change, sustain-ability and other environ-mental issues. In Arla, we believe that by working with sustainable solutions across the entire value chain we will increase our competitiveness.”

The strategy was unveiled in 2013 in the countries where Arla has farmer owners: Sweden, Denmark, UK, Germany,

Belgium and Luxembourg. Company staff and farmer shareholders contributed. The goal is that by 2020 the carbon footprint per kg of milk from Arla farms will be reduced by 30% compared to 1990.

“Farmers… [are] com-fortable that sustainabil-ity is not to the detriment of financial performance,” Arla chairman Åke Hantoft said.

The strategy is based on findings from four focus areas: animals – ensure a high standard of animal welfare; cli-mate – reduce the carbon footprint of milk produc-tion at Arla members’ farms; nature – encourage and inspire Arla’s farm-ers to protect biodiversity and ensure a more sus-tainable feed supply; and resources – reduce waste

and increase reuse of resources at Arla farms.

On-farm carbon assessments have been done on 1500 Arla farms in UK, Sweden and Denmark (voluntary and free for the farmers). About 280 farm workshops have been held in the UK, Sweden and Denmark, for small

groups of Arla farmers, aimed at reducing the carbon footprint by better management and less waste in the production cycle.

Arla says it expects to do 800 carbon assess-ments every year. The company has set global targets for follow-up ensure that 2020 targets are reached.

The strategy does not place new demands on farmers, over and above the standards already included in the Arlagården program.

■ Arla offers its farmers free of charge on-farm carbon assessments.

■ Farm workshops began in 2010 in UK; in Sweden and Denmark they started in 2013. In UK, workshop topics included eight themes including improving cow fertility, reducing energy use, using re-newable energy and increasing feeding efficiency.

■ Every year new activities will be offered to support the aim of the strategy.

aRla’s stRategy

Onfarm carbon assessments have been done on 1500 Arla farms in Europe.

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wORld news // 15 Dai ry NewS aUSTraLia may 2014

Mr Smith goes to Beijingthe new Zealand Gov-ernment has assigned the deputy director-general of its Primary Industries department, Roger Smith, China.

Mr Smith said his status there as a senior government official will help him build strong, long-term relationships, smoothing the way for New Zealand exporters.

Mr Smith, son of an Auckland dairy farmer and a cow milker in his youth, is the highest-ranked MPI (Ministry for Primary Industries) official ever posted overseas and now holds the title regional director Asia.

MPI deliberately made this high-level appoint-ment to the Beijing post. Smith has no illusions about the quantum of the challenge, describing it as “huge”.

In Asian cultures, such as China, a person’s seniority carries consider-able weight and Mr Smith said this will enable him to develop long-term rela-tionships with very senior Chinese officials and poli-ticians.

Mr Smith will primar-ily work with New Zealand exporters to China and has been talking to many chief executives and chairmen of big companies export-ing there.

He will also work with New Zealand-China trade associations and their counterparts and will accompany Chinese trade delegations to New Zea-land.

He sees no problems in him being the regula-tor “walking side by side” with industry and helping them on their sales trips to China.

“I am going to be the face of the Government for primary industries in China and that’s a pretty important face to have for them.

“We are all focused on the same thing: New Zea-land having continued access to China.

“If you want to sell to China you should be able to do so and maximise the FTA and not get stuff stuck on wharves or any other surprises.”

Following Mr Smith’s move to head its opera-tions in Beijing, MPI will send five more people there within months.

The MPI’s move to up the ante in China results partly from such disas-ters as meat being delayed at the Chinese border and the Fonterra botulism scare.

MPI was said then to have been ‘understaffed’ in this number-one market.

Mr Smith was on the team that negotiated the FTA with China in 2005-07, then working for the Customs Department.

“The ideal is to go in, get a deal, leave, then let business get on and do what business does best,” Mr Smith said.

“However that is not necessarily a long-term sustainable model within Asia. Everybody needs to know that you have to build relationships, you need to spend time in a country.

“If you read any 101 learners guide to export-ing to China it will say you have to spend time [there].

“We need to follow that advice ourselves and make sure we form a govern-ment perspective to build a much better long-term relationship with Chinese officials so we can better understand their think-ing.”

Mr Smith’s includes “some star gazing” to get a better understanding of what China is thinking and what its needs are. Food safety tops their agenda, he said.

“We have to get a little ahead of the game now and think about what’s going to come up in future. For example, what are their concerns and how can we address them?

“Frankly it’s not a case of New Zealand telling China ‘this is the model’. It’s a time to be working in partnership with China in a way we have always done with Brussels, Washington and Canberra – working in partnerships and develop-ing partnership solutions.”

Though Smith declined to comment on the specifics of the Fon-terra botulism issue he acknowledges it gave New Zealand a chance to ‘reflect’ on how it deals with China.

The magnitude and acceleration of dairy exports to China took many people by surprise

and many were slow off the mark to deal with this expansion, he said.

“With growth rates like that you have to be careful you don’t stub your toe.

“If you want to be in the market you have to commit to understanding that if China has specific regulations and require-

ments, particularly in the infant formula market, you have to meet these.

“They have the full right to food safety and traceability.”

Roger Smith’s seniority will help him build strong, long-term relationships, smoothing the way for New Zealand exporters. Roger Smith

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Actions speak louder than words. They also inspire.Cursing Coles and Woolworths for devaluing fresh milk by selling

it for $1 a litre is one approach; searching for alternative markets and overcoming all obstacles to supply them is another.

When economists and other commentators said Asia would be the future for Australian agriculture, a myth was perpetuated that custom-ers from China, South Korea etc would come to us, asking to buy milk.

It was never going to happen.Australian companies had to show the initiative and offer these cus-

tomers something they wanted.Norco, working in partnership with Dairy Connect and consulting

firm PGS, are now selling fresh milk to China after securing an unprec-edented quarantine clearance agreement to bring the delivery time well within the shelf life of fresh Australian pasteurised milk.

Until then, all export efforts had been hampered by lengthy test-ing and quarantine processes before shipment from Australia – and again upon arrival in China.

The export lead time for fresh milk typically ranged from 14 to 21 days which did not fit within the normal shelf life for fresh Australian pasteurised milk.

The breakthrough only came after 12 months of collaboration between PGS and Chinese officials to develop rigorous quality assur-ance protocols that have now been fully tested and officially sanc-tioned by the relevant Chinese agencies.

The work performed by Norco, PGS and Dairy Connect to make fresh milk exports a reality has not only provided a new outlet for their suppliers, it has shown all farmers and processors there are alterna-tives, a reward for effort, and a bright future.

Those farmers in the drinking milk states that have been knocked about by a supermarket-influenced squeeze on farmgate prices now know there are alternatives.

These alternatives won’t come without hard work, and the ability to think outside the square, but they are there.

Similar initiative was shown in South Australia where the SA Dairy Association created fresh milk brand SADA Fresh, which has almost paid back the initial investment after six months.

Profits from all sales now will fund projects that will benefit SA farmers.

Local customers were told to “support farmers” because “we grow your food”. It didn’t work as the $1/litre milk pricing proved too attrac-tive.

SADA offered them something they were happy to purchase – local milk, packaged attractively with a story behind it – and have been rewarded.

Both results have provided a breakthrough for the farming commu-nity of both states and we applaud all those involved - inspirational in the true sense of the word.

When actions inspire


16 // OPiniOn

editORial

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bathing routinesCleopatra bathed in milk as part of her beauty regime, but we’re not sure why workers at a Siberian dairy company recently followed suit�

A Siberian dairy plant was temporarily closed recently after photos emerged of workers bath-ing in one of the milk vats�

A clue to the unusual behaviour may come from the date – it hap-pened on New Year’s Eve�

After the footage was played on a federal televi-sion network, residents of the town boycotted the factory’s produce�

Such events are ap-parently commonplace in the country as sanitary oversight has virtually ceased, with plant inspec-tions occurring once every three years�

It was left to one of the workers involved to provide an explanation: “In reality, our work is very boring,” Artyom Romanov said�

Well, when you put it like that…

native languageFarmers at a New Zealand field day recently heard a yarn from guest speaker Waaka Vercoe, who is Maori, and used to milk cows with his uncle for the farm owner�

Naturally enough, they spoke to the cows in Maori� Things unravelled when the farm owner told Ver-coe and his uncle to take an afternoon off�

The owner was furious the following morning, tell-ing Vercoe and his uncle that he spoke to the cows in English but they couldn’t understand a word he said�

He demanded they speak to the herd in English, but Vercoe’s uncle refused, saying they would give more milk when spo-ken to in Maori�

“I thought that was wise advice so we just kept speaking Maori,” Vercoe told the crowd� “Whenever he spoke to them in Eng-lish they just looked blank�”

This might be some food for thought for those who hire backpackers for milking time�

Cows on the looseIt can be hard enough for farmers to do their job without having to deal with idiots on the other side of the boundary fence�

The RSPCA recently released a list of mind-numbing calls from the public, which reveal that some people have too much time on their hands, not enough brain cells, or both�

Turns out the animal welfare group received several complaints of two cows in a paddock with no shelter outside of Nowra in southern NSW� The cows turned out to be made of steel�

We hope the same people don’t visit Shep-parton, where there are more than 90 fibre glass cows in a variety of colours and designs scattered around the town as part of the MooovingArt project, or the RSCPA helpline will be ringing off the hook�

(Our favourite from the RSCPA list was that of a highly distressed woman calling about a mini croco-dile in her backyard which was threatening the lives of her children� Turns out it was a blue-tongue lizard�)

visa review pleaGood to see the National Farmers Federation call for greater access to 457 visas in the dairy industry in its submission to the current review of the program�

The tightening of the temporary visa scheme was made by the Gillard Govern-ment in June last year in a misguided attempt to look tough on foreign workers taking Aussie jobs (and please the unions)�

Her attempt at political chicanery failed as everyone saw through it, but the laws were passed and it hurt the farming sector, which finds it increasingly tough to hire relief milkers at the very least�

Backpackers with an ag background are often the best recruits, but recruiting them and retaining them for longer than six months is proving increasingly difficult�

The proposals were made to an independent panel reviewing the 457 temporary-visa scheme and submissions closed on April 30�

Its request to relax the rules, or introduce a new form of temporary visa, is receiving staunch opposi-tion from the likes of the Australian Council of Trade Unions, but it’s a fight worth having�


OPiniOn // 17

when luke Skywalker and C-3PO enter Chalmun’s Cantina in the first Star Wars movie, the barman says ‘the robot’s not welcome’. This is despite the bar being filled with roughneck freight pilots, oddballs and scary mon-sters.

The federal government’s Commis-sion of Audit is a bit like that cantina, full of monsters and other creatures usually kept out back in a locked room.

There’s no denying the recommen-dations of the Commission of Audit were shocking. Some suggest this is an insight into what the government would really like to do if they think they can get away with it. Others suggest it’s all a red herring to make a horror budget look mild in comparison. There is merit in each theory.

The Commissioners made 86 pro-posals for sweeping spending cuts, rang-ing from the politically possible to the crazy brave. The devil is in the detail, all 5kg of it.

I was particularly surprised about the obvious lack of thought that has gone into some of the recommenda-tions. For example: privatising the Royal Australian Mint. This would mean it would be in someone’s commercial interests to print more money. What could possibly go wrong?

The report would have you believe that the national budget is in crisis and, if we don’t address our debt with a dose of draconian measures, Third World status beckons.

But is there a budget crisis?When in doubt consult the soothsay-

ers, I say. On this subject, the modern day soothsayers are the economists – and they seem to be agreeing that this is all a bit of a con.

University of Canberra economics professor, Phil Lewis, says that while it might be legitimate to say that lower debt would free up more government revenue to fund worthwhile projects, you cannot argue that running the econ-omy or low debt implies the economy will perform better. And Australia, he says, is sailing along very nicely when its inflation, unemployment rate and GDP

growth are compared to the US, UK, Germany, Japan and the OECD average.

The ratio of debt to GDP is a key indi-cator of how well a country can repay its debt without incurring more debt. It is similar to assessing your own ability to repay your mortgage each year from your annual revenue without going further into hock. Commonwealth net debt is about 11 per cent of GDP, the third lowest in the OECD, where the average is 50 per cent. In other words, our national debt is low by international standards.

So what is the justification for a one-off deficit levy, a.k.a. a deficit tax?

Richard Holden, Professor of Eco-nomics in the Aus-tralian School of Business at the University of NSW, dismisses this pro-posal with an apt analogy.

“When your local surf club has a fire not cov-ered by insurance it makes sense, painful though it may be, for the members to kick in for the repairs. When the committee says they need a special levy to pay for recurring expenses like petrol for the inflatable rescue boat, there’s a change of commit-tee at the next annual general meeting.”

Among a raft of other unpalatable

recommendations, the National Com-mission of Audit proposes:

■ Abolishing the Bass Strait Freight Equalisation Scheme.

■ Removing the diesel fuel rebate. ■ Scrapping the Rural Finan-

cial Counselling Service and the

Farm Finance concessional loans scheme.

■ Halving Landcare funding. ■ Reducing the funding for rural

research and development corpo-rations.Agriculture has been identified as

one of the five pillars of the national

economy. The federal government has recognised that Australian farmers are facing challenges in being internation-ally competitive. It doesn’t take a rocket scientist to work out that sweeping changes such as those recommended in the Commission’s report will put farm-

ers even further behind the game.

That’s not to say there is no need for any change. Rather, it is a plea for strate-gic and informed consideration of the whole pic-ture, recognising impacts and flow-on implications of

any changes. It also means that nothing should be immune from consideration; and that both the income and expendi-ture sides of the budget should be inves-tigated.

Professor Lewis went on to say that there is more to government policy than balancing the budget.

“Policy should be made in the con-text of a long-term vision for the econ-omy,” he says. “This includes getting everyone who wants to into work, pro-viding the public infrastructure needed to increase productivity, the right mix of private and government provision of health and education, and reform of the regulatory environment.”

Now that’s more like it: those are aspirations we can all understand and accept.

Commentator Greg Jericho, writing on The Guardian’s website, examined the recommendations and commented “anyone recommending our health system follows the US really should not cut paper without supervision, let alone give advice on how to cut the budget.”

In my view, many of the recommen-dations are at best problematic; and at worst potentially disastrous. Further-more, it really goes against my grain to be taking advice on saving money from a committee who ran up a bill of 21/

2 times

the budget they were allocated.• Jan Davis is CEO of Tasmania Farmers and Graziers Association.

Commission of Audit promotes budget hysteria

opiNioNjaN DaviS

“There’s no denying the recommendations of the Commission of Audit were shocking. Some suggest this is an insight into what the government would really like to do if they think they can get away with it. Others suggest it’s all a red herring to make a horror budget look mild in comparison. There is merit in each theory.”

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0102_0513_OFSDairyNews_80x265AU_FA.indd 1 6/05/13 11:16 AM

daiRy COMMOdity markets have entered a distinctly different phase since the last update in these pages.

As supply has con-tinued to expand across key export regions, sev-eral major importers have slowed their purchases to match seasonal changes in requirements.

The confluence of these supply and demand cycles has caused the rapid price correction that has characterised recent weeks.

Published results of the GlobalDairyTrade (GDT) auctions have illustrated the drop in prices most starkly.

The weighted aver-age price across all com-modities has fallen 20% since early February, and is tracking around 19% below the same time last year (which was just after prices first spiked).

Although rapid in the context of the months of price stability that sellers enjoyed, this adjustment shouldn’t come as a sur-prise.

With farmers in all export-focused regions enjoying substantially

higher farmgate milk prices for sev-eral months now, the incentive to boost production was bound to elicit a response.

In a further con-trast to the 2012/13 season, constrained feed prices are also improv-ing the economics of incremental produc-tion increases, and many regions are enjoying favourable weather to boot.

The result is more product on the market: to again take GDT as an example, the April 15th event saw 36,549 tonnes of product sold, 143% more than the same time last year.

New Zealand is show-ing the most dramatic response, with official data to February reporting 12% growth for that month compared to February 2013, and over 6% for the season to date.

This season, NZ’s export exposure has allowed quick pass-through of higher commodity prices while the weather has been much more favourable

than early 2013. Double digit growth

rates are virtually inevi-table for the remaining months to June, and this has been reflected in the increased offer volumes on the GDT platform.

Other parcels of NZ product are reportedly hit-ting the market at sub-stantial discounts to clear warehouses as the end of financial year approaches. This is adding a further, short term, dampener to pricing.

Although additional volumes are hitting the market, the commonly held view is that New Zea-land is relatively well sold for the remaining months of their June-May produc-tion season.

Much of the cur-rent sales competition is coming from the north-ern hemisphere, where Europe’s steady growth continues.

February data from sta-

tistics agency Euro-stat suggests EU-28 milk production grew 5% for that month, building on similar growth through January.

The European winter has been

so mild that the biggest concern at the moment seems to be the too-rapid development of winter grain crops, which now need seasonal rains ear-lier than usual.

Some processors have recently announced cuts to farmgate prices (in line with commodity price falls) however with mar-gins remaining good, these are unlikely to slow pro-duction.

The US hasn’t been as blessed climatically, and growth is mixed. In the Midwest (taking in states such as Wisconsin, the second largest in terms of milk output), lingering effects of a harsh winter have production tracking below last year, but pros-pects are good as tempera-tures warm up.

In California milk flows are well up on the same time in 2013, though the continuing drought threat-

ens to derail the industry as feed supplies become more stretched. Overall, the US is up 1% for 2014 to March; a similar figure to January and February.

With such a broad geo-graphic base, the current supply response is unlikely to reverse in a hurry. How-ever it is only part of the current story.

Current pricing is also a function of Chinese buyers’ reduced activity of late as record imports through March boosted their stocks.

With healthy inven-tories and a new season commencing at home, importers aren’t under pressure to contract ahead – and are disinclined to do

so while prices are falling. As stocks run down,

China is likely to start buying in more signifi-cant volumes again, which will not only remove more product from the market, but likely convince other buyers that opportunities to secure discounted prod-uct are nearing an end.

Traders have recently been reporting a renewal in interest from price sen-sitive markets (such as the Middle East and Africa) that were sidelined for much of 2013, but have been enticed back by the much more ‘workable’ prices on offer.

These buyers often wait for signs that prices have ‘bottomed out’ before

committing. As the market turns a rush of interest can boost prices.

The recent market cor-rection was exactly that. Milk powder pricing of US$5000/t was unlikely to be sustained when a global supply response was building.

However, with China expected to return as a significant buyer in the coming months and other purchasers enjoying much better affordability, sta-bilisation at prices that still provide above-aver-age returns is a decent prospect heading into the 2014/15 season.• John Droppert is indus-try analyst with Dairy Aus-tralia.


18 // MaRkets

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

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

China’s return will steady falling global prices

Maleny Milk on Guernsey-fuelled curveit has taken more than a decade and a lot of learning along the way, but a pioneer in farm-direct dairy marketing in Queensland is poised to go to another level.

Maleny Dairies which is now in the fourth genera-tion of the Hopper family farming in the picturesque Sunshine Coast hinter-land has ambitious plans to double milk and fresh dairy product sales in the next 12 months.

The business has built to a weekly throughput of 70,000 to 75,000 litres of milk employing around 40 staff from the factory floor to lab technicians to milk delivery teams.

Owner Ross Hopper says it is the talented man-agement team he now has in place which is driving business growth.

After growing organi-cally, starting with local and independent retail outlets, the business is now moving into volume markets with the major supermarket chains.

“We started with selected Coles and Wool-worths stores and 17 new Woolworths outlets have just come aboard this New Year,” Ross said.

Maleny Dairies qual-ity product range can now be found in retail out-lets throughout southeast Queensland from Noosa to the Gold Coast with sales volumes starting to reflect a boutique product

in the mainstream.Ross is pleased that

their sustainable business model now supports eight farm families in the region with milk now drawn from about 1000 cows, most grazing the hillsides within a 20 kilometre radius of their processing facility.

His grandfather Gordon Hopper started dairying at Maleny in 1948 and in its hey-day there were more than 300 small farms in the region. Now there are just about a dozen left.

Ross and his father Harold, who has now retired, hatched the plan to start processing their own milk in the wake of de-regulation of the indus-try in Queensland in 2000. The first Maleny Dairies

milk rolled off the process-ing line in 2002.

Ross and his wife Sally committed to invest-ing in the launch of the value adding enterprise. His brother Keith who had been working on beef properties in western Queensland came home to take over the family dairy farm with his wife Sonya.

“We run the factory and farm as separate busi-nesses, buying the milk off Ross and our other farm suppliers,” Keith said.

The family farm milks about 130 cows and like many other small prop-erties in the district it is at full capacity with lim-ited potential to buy land highly valued for its scenic views.

The family has always

gORdOn COllie

Ross and Sally Hopper of Maleny Dairies.


MaRkets // 19

EU, US strengthen export capabilitiesat a crucial time in the short-term planning for dairy farmers in southern Austra-lia, we are seeing spot prices for the major dairy commod-ities in a kind of freefall from their giddy heights earlier in 2014.

It had to come – a correc-tion in prices was inevitable. As product prices soared in the second half of last year, so came the gradual recov-ery in milk production in most major export production regions – a response to stron-ger farmgate milk prices and higher profit margins. Production responses in all regions other than New Zealand have been slower than may have been expected as bal-ance sheet recovery from the turbulence in producer margins in recent years has been a handbrake on milk expansion for many.

After the heavy buying of the first quar-ter of 2014, Chinese buyers are apparently feeling very comfortable. With people in the supply chain more generally confident about future availability, it has become a buyer’s market.

At the same time there has been growing nervousness as to when China’s consumer spending will start to slow and, more impor-tantly, whether there might be instability in financial markets that could affect the avail-ability of credit to dairy product buyers in their supply chain.

The hike in prices as a result of China soaking up so much milk powder has resulted in many developing countries in the Middle East, North Africa and South East Asia importing far less product in the past year. Prices simply got too high for their processors to outbid the hungry Chi-

nese market. Softer prices as we go

forward might lure those buyers back, and if China wants less in the near future, they can probably afford to! Economic fore-casters suggest the devel-oping world will continue to enjoy good economic growth in the short-term at least. While Chinese growth expectations have

moderated, growth is likely to remain at rates significantly above the developed world, as long as credit and housing bub-bles are managed.

So how far might commodity prices fall – and which products will be more exposed to a short term oversupply?

All the focus of the slump in prices has been on milk powders, a shortage of which had driven the rally in the global value of milk in 2013. Australia’s overall manu-factured product mix is heavily weighted towards cheese, which in 2012/13 took about 40% of total milk supply in south-eastern regions. Cheddar cheese prices - down 6% from their flatter, Kosciusko-styled peak - haven’t fallen anywhere near as far as milk powders, which are about 20% off the summit.

This reflects a generally more stable and steadily building market over time – so hopefully powder producers don’t switch too much milk away from those lines to chase some of cheese’s better prices.

But when we look a little longer than the next few months, the rides on the swings and roundabouts may get a little scarier. There is a set of potentially major variables that will affect the balance of supply and

demand in the world market over the next two years.

Europe’s dairy industry is readying for the removal of production quotas – which will likely see more milk output from com-petitive EU producers, with gradual shrink-age from those in marginal areas and producers. Weather and input prices will influence just how much additional milk comes onto the market, but significant investment is well underway mostly aimed at a greater export focus.

Meanwhile the US continues to gear up as a more serious exporter. While larger-scale producers have relished the high mar-gins over feed costs in the past few months, balance sheet recovery has kept milk growth to a minimum. A longer period at high mar-gins may well see stronger milk flows.

New Zealand has rebounded strongly from last year’s drought – ahead by close to 7% in the first 10 months of the current season – and good conditions will ensure higher milk flows will carry into the new season starting at the end of this month. Growth in output will slow next season but NZ will still push a healthy amount of milk onto the market. An El Nino pattern might even help to slow things down.

It all comes back to China. The size of their milk supply gap – which at last count by our reckoning was about 10 billion litres in 2013 – won’t close very quickly given the seismic changes in their internal supply chains. But the strength of their appetite for milk products will continue to hold the key to everybody’s milk cheque in 2014/15.• Steve Spencer is a director of Freshagenda, a Melbourne-based consulting and analysis firm that provides food value chain insights and solutions to a wide range of clients from farm to retail.

freSh ageNDaSTeve SpeNcer

Export index continues to fallFReshagenda’s exPORt index has continued to fall throughout the past month, reflecting weaker global dairy prices and an obstinately high Aussie dollar. The index has lost 13 points over the month to the 5th of May, and 40 points since it peaked in the first week of February.

In recent weeks, spot commodity prices have stabilised and even risen, while the dollar has lost some steam. Freshagenda’s Australian export index has settled at around 200 points in early May, close to a year ago. It is interesting to compare movements in the Australian index with NZ’s. Based on the same series of Oceania spot prices, the indices track movements in dairy export returns for each country, with differences driven by product mix and currency movements.

What is striking about the chart below is the much higher peak in the Australian index at the start of 2014 – largely driven by a weakening Australian dollar and strengthening cheese prices. In contrast, flat to weakening WMP prices – the most important product for Kiwi exporters – and a flat NZ dollar saw their export index moving sideways at the beginning of the year. It has set-tled at around 170 in early May – 30 points lower than May 2013.

Companies on both sides of the ditch are likely to take a con-servative approach to 2014/15 farmgate prices – in light of a weak-ening global dairy market. Based on this analysis the Kiwis may be factoring in a greater adjustment to their opening prices than the Aussies!

The index is a lead indicator of average export returns - based on spot prices, currency movements and export mix. The index measures current market sentiment, but in reality it takes 3 to 6 months for prices to translate into actual returns, depending on the timing of contract negotiations. It was set to 100 in Jan-uary 2000.For weekly updates, visit http://www.freshagenda.com.au/

Maleny Milk on Guernsey-fuelled curvehad Guernsey cattle and this has become a mar-keting point of difference for Maleny Dairies selling high protein and butterfat healthy milk.

One of their cows Bel-ladonna became a breed world champion break-ing records in milk, fat and protein. Lactation peaked at an amazing 701/

2 litres of

milk in one day.Paying a price premium

of about 30% for their milk – an average farm pay is 601/

2 cents a litre – it is

not surprising that farm-ers in the region are lined up to join Maleny Dairies.

Supply is conditional on milking Guernseys with five of their existing suppliers having herds in transition to the traditional dairy breed.

Ross said the business now processed a full range of milk products with about 40 percent of production marketed under the premium Farmers Choice Gold Top label which is not homoginised.

About 30% sells as regular full cream milk and 30 percent as low fat product.

“We’ve introduced a range of flavoured milks, yoghurts and custard. We’ve now got a team of technicians working on further product innova-tion,” Ross said.

“With the popula-tion growth in south east Queensland a local enter-prise like ours has a bright future selling fresh dairy products from just up the road,” Ross said.

The Maleny Dairies range.

Dai ry News aUsTraLia may 2014

20 // ABVs

GrAeme GillAn has been appointed as chief executive offi-cer of Holstein Australia, starting in the role late last month.

HA president Ron Chittick said Mr Gillan brought a vast knowl-edge of the Australian dairy indus-try to the association, from a career of direct involvement at executive management level within the herd improvement industry.

“Graeme is the ideal fit for Hol-stein Australia. He has the skills and experience to help us address the rapidly changing dairy herd improvement landscape and to take up new opportunities that can be a significant benefit to our members’ dairy businesses,” Mr Chittick said.

“Graeme is well known at all levels of the Australian dairy indus-

try and will be known to many of our members.”

Mr Gillan said he was excited to join the team which services the largest breed association in the Australia.

“Holstein Australia has a repu-tation for offering a unique range of products and services to mem-

bers as well as to dairy farmers at the cutting edge of improving their herds,” he said.

“There are exciting opportu-nities ahead with what genomics can offer the industry to increase genetic gain within herds and to improve profitability of all dairy farmers.”

Gillan leads Holsteins

A PiOneerinG project to bolster Aus-tralia’s genomic reference population could dramatically change the way data for Australian Breeding Values (ABVs) is captured.

With herd testing in decline across the industry, it is vital to establish alternative sources of data to fuel ABVs.

Dairy Futures CRC’s Ginfo project is creating a “nucleus herd” to feed genomic information and herd data into the national reference set.

By June 2014, Ginfo will have grown to include 100 dairy herds across Australia.

The Ginfo herds have been judged to have the best records in Australia thanks to a scoring system developed by Victoria’s Department of Environment and Primary industries (DEPI).

The system is based on an objective assessment of the amount and quality of data each herd contributes to the current breeding value calculations, particularly for fertility.

Ginfo’s key focus is fertility: a complex and multifactorial trait that is difficult to improve through traditional breeding methods.

Increasing genetic gain on fertility will yield long-term benefits, and this is the aim of initiatives such as the Dairy Australia-led Dairy Moving Forward project.

Ginfo will contribute by providing the Australian Dairy Herd Improvement Scheme (ADHIS) with accurately recorded fertility data from diverse farming systems across Australia to increase the reliability of genomic breeding values – or ABV(g)s - for fertility.

DEPI’s Dr Jennie Pryce, research leader of Ginfo, said: “Although fertility is a focus, Ginfo will also increase the reliability of genomic breeding values for all other traits evaluated by ADHIS.”

Ginfo is part of a broader effort to improve dairy industry fertility that began in 2013 with the redevelopment of the daughter fertility ABV by ADHIS and Dairy Futures CRC.

The improved fertility ABV, introduced

in April 2013, covers more aspects of fertil-ity and has resulted in a rise in reliability of 6-8% for Holstein and Jersey cattle.

This rise has increased the number of international bulls with publishable proofs in Australia, offering farmers more bulls than ever before to choose between.

Ginfo began in mid-2013 and currently comprises 50 Victorian herds.

Work is now underway to select top data-contributing farms from across Aus-tralia to bring the total to 100.

The herds will be representative of the industry in terms of herd size, breed, loca-tion and a number of other factors.

The project offers participants incen-tives to maintain their current levels of data recording and perform additional genotyping.

The Dairy Futures CRC research team will also use the experience of genotyping a large number of cows to explore ways to bring down the cost of genotyping, poten-tially making it more affordable for farm-ers to use over entire herds.

Accurate and cheap genotyping will allow farmers to identify the most prof-itable calves in a herd simply by plucking hair from the tail, therefore eliminating the stress of late night and early morning calf identification during busy calving periods.

Ginfo is not the first time the Australian dairy industry has seen large scale genotyp-ing.

Dairy Futures CRC’s 10,000 Holstein Cows and Jer-nomics projects increased reliabilities of genomic breeding values in 2011 and 2012.

The industry needs Ginfo because over time, the national reference popula-tion will genetically differentiate from the genomic reference population, making it less useful for genomic prediction. New animals need to be added to keep the ref-erence population current and maintain reliabilities.• Matthew Reynolds is part of the Dairy Services team with the Centre For AgriBio-science (AgriBio), a joint initiative of the Vic-toria’s DEPI and La Trobe University.This report was first published as part of the Australian Dairy Conference Dairy Science Communications Award.

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Kage has an overall type APR of 108, with a body depth APR of 111. LIC describe him as the perfect sire to use over the Northern Hemisphere bred cows to get strength and fertility back into a herd.

His A2A2 status will also appeal to many farmers.

Terrific is a Fernaig Admiral son from the renown Lynbrook stud

and LIC says his size and strength are exactly what farmers look for when selecting a sire.

Terrific has an overall APR type score of 104 and a body depth APR of 115. LIC said he is a perfect sire to bring back some spring of rib which so many of the Northern Hemisphere Jerseys lack.

LIC describe him as great fertility, high components and a somatic APR of 113.Tel. 1800 454 694 or visit www.licnz.com.au


ABVs // 21

A new CROP of Australian bred sires from Genetics Aus-tralia have emerged after the April ABV release.

Genetics Australia commercial manager, Anthony Shelly said the new proven sires offer a range of bloodlines and trait profiles adding to an already diverse product line-up.

Christmas is a new total performance sire with a “no holes proof”, according to Mr Shelly.

“Sired by Roumare, he is joined by another Roumare son, type specialist Barbados.

“Decorum is a son of Donante who is one of the best type and protein sires available, and also from the same family comes Dittmar whose outcross pedigree should have widespread appeal.

“Rounding out the new additions is Goldcrest, a son of the highly regarded Goldwyn, who possesses many of his sire’s characteristic traits.”

Calving ease, health and fertility specialists are also present in the Holstein team, according to Mr Shelly.

“Carglo and Eurostar stack up as two of the better fertil-ity bulls available with real Australian fertility data.

“Useage combines calving ease, cell count with super udders and Bullbar is still the first choice calving ease sire and retains his position as Australia’s go-to bull for healthy, long lived, no fuss cows.”

“Our Jersey result highlights our commitment to the Australian Jersey cow,” Mr Shelly said.

“The Valerian sons have come through this year demon-strating our aim to develop genetics for Australian farming conditions rather than simply following the global trends.”

Navarian, Raceway and Roundhill lead the Valerian son charge with Navarian the number one Jersey sire available for profit.

Full brothers Raceway and Roundhill share some common characteristics, however their profiles provide enough differences for both the bulls to warrant places in the proven line up, according to Mr Shelly.

Spiritual son Broadside rounds out the list of newcom-ers to the proven team.

Mr Shelly said three new emerging Aussie Red sires have joined the team.

Arbobama, Arbnick and Arbhilly all have their first daughters milking and have enough information to give confidence that they should be included alongside stal-warts Arblex and Arbbonjovi in our proven line up.

Genetics Australia unveils new line-up

GenetiCs COmPAny, LIC, has added two registerable sires, which it says will not only improve your herd’s fertility and its components; they will not compromise other important traits, including type or volume.

The new additions to this year’s catalogue are

the Holstein-Friesian sire Kage and Jersey sire Terrific.

Kage is a Format son with Pierre and Paladium in his pedigree. His daughters are described as tall, very capacious, with extremely well attached udders.

His fertility APR of 108 shows that despite

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22 // ABVs

Get the breeding right on a dairy farm and overall success will follow, according to Queensland’s Craig Sel-lars.

Over the past few years Mr Sellars, from Rosevale in the south-east of the state, has been doing just that as he strives for the “best possible cow”.

“I think that if you get breeding right, the rest just happens. If you don’t do the right thing with your breeding program, the rest just falls down around you,” he said.

The farm milks just over 300 mainly Friesian cows and calves 100-110 heifers per year.

That number has been trending upwards in recent years.

“The herd of cows is the core part of the busi-ness,” Mr Sellars said. “That’s where we’re making our money and it makes life easier working with good cows.”

About three and a half years ago Mr Sel-lars adopted an ambi-tious breeding program with Semex that aimed to improve the quantity and quality of his mainly Frie-sian herd.

He started using Rep-romax high fertility, Healthsmart and Caving Ease bulls with the addi-tion of Immunity Plus bulls a year ago to help make significant gains.

The farm uses Immu-nity Plus bulls to cut out breeding and health prob-

lems and produce better animals.

“The Semex rep comes out on the farm and grades the traits of every new heifer. If something is not quite right, such as the udders or the legs, they will try and pick up on it and improve it by select-ing a suitable bull,” Mr Sel-lars said

The program suits Mr Sellars’ desire for a medium size cow that is strong and likely to be a survivor.

“We are trying harder to get more heifers with better breeding and the use of some sexed semen. We are probably 50% up on what we did six or seven years ago,” he said.

“I look at udders, feet, legs and overall strength of the cow and that she has longevity.”

Mr Sellars admits that his emphasis on qual-ity breeding is not for all tastes – he even debates his priorities within the family – but he says it has been achieving good

results.“I’ve spoken to stud

breeders and they say Immunity Plus isn’t for them. If they’re trying to sell a bull they might want other criteria to present to a client or potential buyer.

“In my case, I’m not looking for a sale or a show cow. I’m just looking for a medium cow that will work.

“It just depends on what you want out of a cow. In regards to health

traits, I think they are probably in the elite group.

Prior to adopting this system, Mr Sellars was involved in another com-pany’s program “but I wasn’t achieving the results that I wanted”.

Several years ago the farm had taken part in the Wagyu beef pro-

gram, reducing its num-bers of heifers.

“We got that out of the system a few years back and are going more and more to dairy,” Mr Sel-lars said.

“Anything that is black

and white Friesian we’ll keep every one of them. We’ll keep whatever heifers we can get.”

However, they are more selective if some heifers have been put to a jersey bull.

Since moving to Semex the farm has increased its in-calf rate. “It’s hard to put in a per-centage but I’m happy with the rates,” Mr Sel-lars said.

The farm has been successful in targeting its spending to better quality.

“We have two grades when we mate – the first choice where we spend a bit more money, and a

last choice which we put to a cheaper bull,” Mr Sel-lars said.

“We are getting better conception out of the

first choice so we don’t have to use as much of the second choice and that improves the quality of our herd.”

Program improves herd health

who: Craig Sellars where: Rosevale whaT: AI

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Craig Sellars

“If you don’t do the right thing with your breeding program, the rest just falls down around you.”

Craig Sellars milks about 300 mainly Friesian cows at Rosevale in south-east Queensland.


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ABVs // 23

ABS Australia refines strategyABs AUstrAliA has implemented a new business strategy with a renewed regional focus.

ABS Australia general manager (Australia and New Zea-land) James Smallwood said the company had bolstered technical services capability, and regional product and ser-vice delivery.

Mr Smallwood said the new initiatives were under-taken to better align the way the company does business with clients.

The major changes include the appointment of new regional managers to oversee the company’s operations in western Victoria, South Australia and northern Victoria.

Neville Pulham and Klint Wagstaff have taken on the roles of regional managers in western Victoria/South Aus-tralia and northern Victoria respectively.

“This move has been made recognising each region has a unique set of challenges requiring a more flexible approach,’’ Mr Smallwood said.

“This includes how clients are serviced and the type of products required, in particular, bull teams to suit differ-ing production systems and farming types.

“As a truly global supplier, we are able to provide the full range of bulls – but recognise some will suit manage-ment systems better than others.

“Having regionally focused teams will ensure farm-ers receive the most suitable products for their business.’’

Originally a dairy farmer, Mr Pulham has worked in the dairy genetics industry for 15 years, including the past decade with ABS as retail sales manager based at Warrnambool.

Mr Pulham said the experienced and adaptable work-force at ABS Australia were able to tailor programs to help farmers achieve optimum profit from their herds.

Originally a dairy farmer in Victoria’s western district, Klint Wagstaff has worked in dairy genetics for nine years and the industry as a whole for 18 years.

Now based at Kyabram in northern Victoria as regional manager, Mr Wagstaff said ABS Australia was focused on providing the products, technical services and specialist knowledge in a complete package.

New to the ABS team is Boorcan dairy farmer Marcus Rees, who will take up the role as key account manager at Terang in April.

Marcus and his wife Bec milk up to 280 cows, operate Glamorgan Holstein stud and bred the No. 1 genomic Fred-die son, CRVGlamorgan.

Mr and Mrs Rees are on-farm challenge winners and were co-owners of the IDW 2014 Semex Spectacular sale-topping heifer Gorbro Uno Tiffany at $12,000.

Mr Rees said the role with ABS would take his passion and skills for dairy genetics and bull selection to a new level, helping farmers with breeding decisions to maxi-mise returns.

“ABS Australia has refocused the efforts of the techni-cal services team in recognition of the importance of max-imizing genetic investment and the need to improve the Australian dairy industry’s breeding performance,’’ Mr Smallwood said.

The technical services teams now operate regionally with Matt Aikenhead based in western Victoria/South Aus-tralia, and George Malinov in northern Victoria.

“ABS is committed to having the best technical support team in place to provide information and advice on repro-ductive performance,’’ Mr Smallwood said.

“Matt and George will deliver this service directly to users in Australia, and provide access to the ABS Global Tech Services support network.’’

James Smallwood


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24 // mAnAGement

Building a large dairy from scratchBUildinG A dairy herd from scratch with a short-term goal of milking at least 600 cows a year is a challenge that progressive young Queensland farmers Ged and Rachael Mullins are relishing.

The couple only started in 2009 setting up the former beef grazing property near Leyburn on the Darling Downs.

They began milking with less than 100 cows the following year and have been on an expansion curve ever since.

Mrs Mullins has managed the rapid building of herd numbers, a task achieved through a combination of acquiring cattle from as far away as the Atherton Tableland and breeding up heifers by continuous mating using sexed semen.

The herd is now close to 400 cows and they plan to be milking 600 in about 18 months with a future feeding capac-ity for 800.

They have a four million litre con-tract with Lion which they are now close to filling, having introduced three times a day milking last August.

“We are milking at 4am, noon and 7.30pm and the new system has boosted our milk production by about 20%. Each milking takes about two hours with a one hour washdown,” Mrs Mullins said.

Converting their dairy enterprise has been a huge task, but with upsides.

“We’ve been able to set the place up how we wanted from scratch which has been good. We started with just a bit of boundary fencing and not much else,” Mrs Mullins said.

Mr Mullins grew up dairying on the Downs at nearby Allora. While two brothers followed father Tom into the family business, Ged spent 14 years as a silage contractor.

Mrs Mullins had an early introduc-tion to large scale dairying with Moxey Farms at Richmond, north of Sydney, where she met Ged during his contract-ing travels.

“We decided the time was right to set up our own dairy and started looking for an opportunity,” Mrs Mullins said.

They were attracted to the 900ha property, Ellangowan, and came up with a novel approach to make an affordable entry into the industry.

A 240ha block of sandy ridge coun-try was split off to build their inten-

sive dairy while the silage contractor Mr Mullins had worked for bought the balance of the property which includes fertile creek flats. These were set up to grow silage crops and provide hay under centre pivot irrigation.

Mr Mullins said the arrangement let them get a start in dairying with the benefit of a secure feed supply.

They set about the big task of con-verting their block, building infrastruc-ture including a large milking shed, yards, feed pad and feed shed.

When a big 60 cow rotary dairy came on the market at North Richmond the couple grabbed the chance.

They did their own demolition and the carefully numbered pieces were transported to their new home in Queensland in seven semi-trailer loads.

The huge square shed they built to house the rotary is their own unique design.

The milking platform looks small sit-ting on 300 square metres of concrete slab. Each side has a 10m opening and the roof is 6m high at the eves, rising to almost 10m in the centre.

“We wanted a spacious dairy so we could easily move about and milk in comfort,” Mrs Mullins said.

Mr Mullins said the high pitched roof was designed to cope with extreme rain-fall events and with the big side open-ings provide good air flow.

“We can get a big storm with four inches in an hour and you’ve got to be able to get the water away,” he said.

The sandy ridge soil is free draining and has been great for cow health.

The herd has ad-lib access to a mixed feed ration designed to maintain a steady milk production around 28 to 29 litres a day at 4% fat and 3.5% protein.

“The only bit of pasture we have is for the dry cows,” Mr Mullins said.

The average rainfall is about 650 mm a year, predominately in summer and extremely variable.

“Feeding a total mixed ration is the only way to operate a dairy in this area with any security,” Mr Mullins said.

He laid a 100m by 11m concrete slab for a double sided feed pad with 6m in the centre for easy machine feeding and cleaning and 2.5m standing room for the cows on either side.

The silage mix is fed directly onto the slab rather than in a trough, which Mr Mullins said minimised wastage. It is a quick and easy operation with a tractor and side scraper to keep the feed within reach of the cows.

Roofing the feed pad is on their future agenda. There is also potential to build a second feed pad exactly the same when cow numbers warrant.

The cows are fed a silage-based ration, with about 8.5kg a day of cracked grain, meal and hay. Grain used is two thirds wheat with barley or corn.

“At the moment, I’m mixing about 18 tonnes of feed a day or about 44kg per cow.

“I work on having 2-3% of the ration left over each day and adjust the feed supply to achieve this so I know the cows are not hungry.”

Left over feed is scraped off the pad with a dozer and fed to dry cows which

also get a ration of straight silage.Three above-ground silage heaps

can each hold about 3000 tonnes of wet feed.

Mr Mullins built a 48m by 16m feed shed with bays for bulk feed ingredi-ents and plenty of storage for big square bales of lucerne hay.

They invested in a high quality stain-less steel lined mixing wagon imported from the USA which has a capacity of 20 cubic metres.

The property is laid out for fast, effi-cient ration mixing and feeding which Mr Mullins estimated took about 120

hours of his time every month.Mr Mullins manages the irrigation

with three centre pivots, one of which is towable.

This covers a cropping area of 180 ha, with 140ha irrigated at one time. The towable pivot allows about 40ha to be rotated.

Mr Mullins said one pivot was devoted to growing lucerne with the balance focused on providing about 6000 tonnes of corn silage a year.

Part of their future planning is to buy back the rest of the property when finances allow.

who: Ged and Rachael Mullins where: Leyburn whaT: New dairy

This 60 cow rotary dairy was purchased from North Richmond, dismantled and transported in 7 semi-trailer loads.

GOrdOn COllie

Ged Mullins in front of his feed shed on his Darling Downs property.

Ged and Rachael Mullins with Emily and Jack.

BAmAwm fArmer Terry Malone says he’s never had more fun farm-ing and credits much of this to his new irrigation system.

A new pipe and riser system has replaced the old flood irrigation scheme, freeing up time Mr Malone and his staff now utilise on other aspects of the farm.

The Archards Irriga-tion Pipe & Riser system is now a reality, allow-ing the Malones to utilise both GMW and deep lead bore water to irrigate their whole property, combin-ing nearly 1000 megalitre water license.

“We have already experienced water and time savings, no longer having to fill channels to irrigate a small area is a great benefit,” Mr Malone said.

“One area that used to take up to 48 hours to irri-gate is now irrigated in under 10 hours with our pipe and riser system.”

Mr Malone and his wife, Francie, have 270 cows on 152 hectares, including 20 hectares leased from his brother. The home block of 128ha is now laser levelled and covered by the pipe and riser system.

The Malones received funding from a Goulburn Broken Catchment Man-agement Authority water efficiency program and from the former North-ern Victorian Irrigation Renewal

Project (NVIRP) to com-plete the project in a single installation.

They worked with NVIRP representative Jackie Tomlinson and Goulburn Broken CMA representative Brendan Stary to secure funding and chose an Archards Irrigation Pipe and Riser system.

Channels and water wheels that used to slowly fill the farm’s bays have been replaced by risers, which can water paddocks up to four times quicker than the previous system.

This saves water on perennial pastures, increases production due to improved accuracy of watering, eliminates water losses and seepage from farm channels, reduced labour costs due to reduced maintenance and simplicity of watering and enables the entire farm to be watered.

“We always had a prob-lem with effluent as we could only put it on cer-tain paddocks, now we can put it on any paddock” Mr Malone said.

There are four pumps on the system – effluent,

recycled, a 10 megalitre a day deep bore and a big pump on the Goul-

burn Murray Water channel.

If a bay is over-watered

the water drains into the recycling dam, and this is also connected

to the system. The 12 megalitre recycle dam

is at the lowest point of the farm and this

can now be used to water the

highest point


mAnAGement // 25

Pipe and riser system lifts pasture growth

who: Terry and Francie Malone where: Bamawn whaT: Pipe and riser system

of farm, which still causes Mr Malone to shake his head and smile.

“It mightn’t sound much but I thought this was amazing.

“We can push water from the lowest point to highest point and get

same flow out of there as you do anywhere else.”

The former inefficient Goulburn Murray Water pipes forced them to cap delivery at 10 megalitres from the wheel but they

To PaGE 26

Risers located across the farm can delivery water quickly and efficiently.

Terry Malone

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26 // AnimAl heAlth

can now deliver water at 20ML having installed an 18 inch header pipe, which comes down to a looped 141/

2-15 inch

pipe in the loop. The Malones increased the size of the pipe to 18 inches at their own cost and say it has paid off.

“Probably the greatest thing I appre-ciate, I can set the timer on the bore and that paddock will be watered automat-ically overnight. I can set the timer and go to bed and when I wake up it’s done.”

Since the irrigation, they have grown much more feed. As they can water the areas more quickly, they water them more often. Mr Malone does not want to expand numbers, even though he said the farm could easily run 400 head, so some annual pastures are allowed to go to seed, saving the need to re-sow. “The cattle aren’t keeping up with the feed, especially the young cattle,” he said.

“We can spread more effluent and water is on and off so the paddocks are not water logged.

“We had 23 acres (9ha) that would take 48 hours to water and the water would stay on the ground. We have cut the time it takes to water some bays from 10-12 hours down to three. Lucerne doesn’t like to be water logged and now we use a lot less water.

“In autumn with the old system, you’d be watering up hard ground and it would last for a week. Last year, we were finished in no time at all. It doesn’t matter how hard it is on top, because with that wall of water coming through, it softens the ground quickly.”

Mr Malone is about to add further automation through Archards Irriga-tion.

This involves soil moisture probes to determine how much water is required, and fine-tuning the flow control to ensure the amount required for each bay

is accurate. The pipe and riser system gives the flexibility to water the right crop at the right time.

The Archards Irrigation system is fully portable, so the automatic riser control can be moved according to requirements, reducing the amount of money invested. Water delivery can then be set by Mr Malone from his house.

Soil moisture monitors will help pro-vide a more accurate assessment of the water required, said Brenton Jettner of Archards Irrigation.

“There will always be a visual com-ponent, what we see above ground, but soil monitors extend the range of infor-mation we’re able to collect,” he said.

“Looking at the plant provides 50-70% of the information we need, while soil moisture monitoring provides an additional 30%, so we get a fuller pic-ture.”

Mr Jettner said one moisture probe per soil type would be required, and three usually suffice.

“You can then produce more feed with less water. With bay control and soil moisture monitoring, you’re taking much greater control.”

Mr Malone said the recent improve-ment has kept them on the farm.

“We’re retirement age now if we wanted to be, but I just got so enthused about doing all this, and seeing it through, and I haven’t finished yet.

“It’s a helluva good farm, a good herd of cows, we have good staff. I’m really enjoying it.”

Mr Malone said he could not ask any more of Archards, Humberts Landform-ing, Wickhams Earthworths and his own staff.

“My staff used to milk then work til after dark – pulling out fences, putting fences back up. It was a big effort by everyone and a credit to all involved.”

Pipe and risers boost production

FRoM PaGE 25

Australia and NZ sign FMD pactAUstrAliA And New Zealand will work together on preparedness for a foot-and-mouth disease (FMD) outbreak in either country.

Minister for Agriculture, Barnaby Joyce, and his New Zealand counter-part, Nathan Guy, met in Melbourne to sign an agreement on the joint effort.

“Our number-one plan and focus of much of our biosecurity efforts is to keep FMD out of Australia and New Zealand. But you can’t stick your head in the sand about something this big; you have to plan for the worst,” Mr Joyce said.

“Australia can deal quickly and effectively with emergency animal disease outbreaks.

“However, an FMD outbreak could have devastating impacts on our live-stock industries, exporting capabili-ties and trading reputation.”

Recent Australian research found the impact of an FMD outbreak could cost the economy $52 billion over 10 years.

Mr Guy said greater collaboration would improve readiness and capacity to cope with an outbreak of FMD or

any other exotic animal disease.“We will share intel-

ligence on risk, collabo-rate on training, share scarce skills in the event of an outbreak and influence inter-national policy on disease manage-ment.”

New Zea-land has now joined an Aus-tralian FMD training scheme in Nepal, which has engaged the UN Food and Agriculture Organisation to allow veterinarians and livestock industry rep-resentatives to experience FMD in the field.

An outbreak of FMD would cause huge economic and social damage with the closure of many interna-tional markets for animal products, Mr Guy said.

Control measures have huge effects on tourism,

food chain businesses, farming families, rural business and commu-nities, he said.

The agreement pro-vides for a reserve of

veterinary specialists and other skilled per-sonnel to be put to

work quickly.New Zealand

recently sent vets to help in an avian influenza eradi-

cation effort. They continue to observe the Australian FMD

simulation - Exercise Odysseus - discussions and field exercises

being held this year.“Exercise simulations and par-

ticipation in activities also ensure understanding of how systems work in the other country, which

means staff can rapidly integrate into the other country’s systems if they are needed,” Mr Guy said.

Mr Joyce said working together and participating in exercises helped build useful links.

Terry Malone with long-time employee Sam Newth.

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AnimAl heAlth // 27

JUne in Northern Victo-ria is when the spring cows are dried off and for many lucky people it’s not just the cows who are taking a holiday.

I have written before about how important the management of the dry herd is, and what an incredible opportunity the couple of months that we give our girls off when they are dry represents.

The dry period of a cow’s lactation cycle rep-resents often the best chance to cure intra-mammary infections that may have been picked up during the previous lac-tation.

Dry cow antibiotic therapy can not only cure existing infections but also prevent new infections from occurring whilst dry.

Using products that produce a physical bar-rier to the entry of bacte-ria into the dry udder also have an important role to play in preventing new mastitis cases in dry cows, and increasingly in heifers.

Combination therapy with both a dry cow antibi-otic product and a physical barrier product represents the optimum level of mas-titis control and preven-tion and has for some time been my preferred option.

I have had a number of farmers say that combina-tion therapy is too expen-sive to use and I simply cannot agree with that analysis. ‘Mastitis is simply too expensive to ignore’ is a more accurate statement to make with a clinical case estimated to cost in excess of $150 and the financial penalties due to high cell count and the production losses from sub clinical udder damage amounting to a great deal more.

Depending on the choice of antibiotic used, a combination therapy pro-tocol can cost as little as $21/cow and even when using the premium broad spectrum longest acting intra-mammary dry cow antibiotic it can cost as little as $32/cow.

When you review the published studies on the level of reduction of both subsequent cell counts and new clinical cases in the following lactation, it is hard not to make an argu-ment for dry cow therapy.

Consulting with your herd veterinarian to iden-

tify the level of infection and the types of masti-tis pathogens (bugs) that you have in your herd is also of critical importance if we are to use antibiot-ics responsibly and target treatment to cows with a realistic chance of coming in clean in their next lac-tation.

Cows that carry an active or chronic infec-tion from one lactation into the next have a very low chance of being suc-cessfully cured in the future, and if they carry an infectious pathogen like Staphylococcus aureus also represent a clear and pres-ent danger of spreading the infection to other cows in the herd.

The Dry period is also a time of preparing the cow’s immune system to produce the quality colos-trum that will protect her calf in its vital first few weeks of life.

Vaccinating the cow when she is dried off is an ideal time. The vaccina-tion, if an annual booster, will cause a rapid spike in her antibody levels and will thus provide the max-imum level of antibody available to transfer into the colostrum.

Where a primary or priming shot is required, it must be given early in the dry period to allow the booster shot to be given no later than 3-4 weeks before the expected calving date to allow the production of the antibodies in time to be transferred into the colostrum.

Dry off is also an ideal time to consider a drench for fluke and worms so that they can enter the next lactation free of par-asites.

It may be worth seek-ing advice from your vet-erinarian as to which drench product is going to be appropriate. Bulk milk tank testing for liver fluke antibodies or faecal egg count analysis to deter-mine the need (or other-wise) for a drenching is often money well spent compared to using an inap-propriate or unnecessary drench.

Sadly but truly, I know a lot of dairy farms that choose their drench prod-uct based solely and wholly on what gift with purchase they will receive. Whilst this may be a great way to

Dry cows need attention

choose what makeup you may buy, choosing which and whether to drench based on the trinket that

comes with it is never appropriate.

Talk to your veterinar-ian about getting some testing done this autumn.

It is also critically important to, at the barest minimum, maintain the body condition score on the cows in the dry herd. Too often, the dry cows can be “out of sight, out of mind”, especially if out on a run-off block or at agistment.

My advice is that it is

always worth the fuel and the time to take a drive out to check on the dry cows with your own eyes every week or two at a minimum.

Many times over my career I have seen cows return from agistment in poor condition and facing a very tough assignment to transition successfully into lactation, especially if the feed situation is described as “a bit tight”.

Working with your vet, and the new

body condition score application from Dairy Australia for your iPhone, it is possible for you to measure their body condition over a period of time to track changes.

Assuming that your cows are in good condi-tion, they have had all their vaccine boosters, been drenched (if necessary) and are ready to fire, then about 2-3 weeks before their due date it is time for them to enter the transi-

tion herd and begin their final preparations to a suc-cessful calving and subse-quent lactation.

Talk to your dairy vet and your other advisors about their nutritional requirements at this time as it is critically important that you get it right. That, my dear readers, is a topic of discussion for another day!• Rob Bonanno is director of the Shepparton Veterinary Clinic.

aNimaL heaLThrob boNaNNo

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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


28 // AnimAl heAlth

the myth that applying lime to pasture will reduce the incidence of facial eczema spores has been scotched by a study by DairyNZ, the New Zealand levy-funded

research body.A few other FE myths

also took a hit.The study, three years

in the running, was aimed at better understanding how to control and

manage FE. DairyNZ project leader

Jo Sheridan said the project was launched after farmers raised concerns about their high reliance on zinc to control

FE in cows. The farmers wanted to

know whether more could be done to limit or reduce the amount of spores in pastures.

Funding from DairyNZ

New Zealand dairy farmer Michael Bennett and veterinarian Emma Cuttance.Three-year study

scotches facial eczema myth

and the Sustainable Farming Fund allowed the appointment of Emma Cuttance, a veterinarian and post-graduate student who is completing a thesis on FE.

“We have managed to examine a range of options that come up on farmers’ radar when it comes to controlling facial eczema at a pasture level, and also to test some of the recommendations that exist for it,” Ms Sheridan said.

One idea was that applying lime to pasture will reduce FE spore counts to harmless levels.

DairyNZ arranged for New Zealand sharemilker Michael Bennett to test the claims between 2011 and autumn 2013.

Trialling lime applications at varying levels against a control of no lime showed there was no statistically significant difference in spore count concentrations on the application areas and the control.

“The trial proved that short-term liming was not a reliable option, and removed another ‘possible’ treatment you hear about,” Mr Bennett said.

The project on his farm also sought to better understand the variability of spore count levels within a particular property.

Studying the spore counts at 40 different sites in one paddock revealed significant count variability and reinforced the need to have an

accurate spore count specific to the farm, and even to paddocks.

“Many farmers will just look in the newspaper to see what levels are doing in their area, but the results showed that’s not good enough – the range is simply too great,” Mr Bennett said.

He counts spores every week from early January in a district renowned for its high FE risk. Accurate spore counting early on means he can determine when to start drenching his 450 cows.

The work also showed that spore counting remains the most accurate means of determining FE risk.

Meanwhile a pasture study by DairyNZ looked at whether using different pasture species reduced FE risk.

“We found tall fescue and chicory could be options, though it needs to be a 100% pure sward of each variety,” Ms Cuttance said.

Results from a study done this season at North Island FE risk zones will identify farmers who are successful at managing eczema risk.

“We will be analysing the results from 110 farms to test the effectiveness of their protocols in protecting their herds,” Ms Cuttance said.

“This information will be used with the previous two years of trial work to help revise the best practice approach to facial eczema management for the industry.”

“A second pasture study looked at whether using different pasture species reduced facial eczema risks.”

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Mark Williams – Toolamba West, VICTORIA “The use of Teatseal is now an integral part of my herd

management. The initial cost is far outweighed by the time and money saved treating clinical mastitis. Less stress on

cows, staff and in particular management.”

Peter & Jeanette Clark – Korrine, VICTORIA “250 cows treated with Teatseal costs approximately $4,000. Milk from each cow saved - 7,000L at 35cents/L equals $2,450. So in our case, two cows saved [from being culled] more than pays for the Teatseal.”

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AnimAl heAlth // 29

Unlocking the mystery of ruminal acidosisrUminAl ACidOsis costs the average Austra-lian farmer around $350 per year for every cow, according to young scien-tist Helen Golder.

“On average 11% of lac-tating cows have rumi-nal acidosis at any time,” she said.

Ms Golder’s research is based on reducing the costs of ruminal acido-sis through better iden-tification of acidosis and improved management.

Ms Golder, from SBS-cibus, a science-based advisory and research company based at Camden NSW, has com-pleted a joint industry-university PhD with her employer and the Univer-sity of Sydney.

She was also awarded the Feed Central Young Dairy Scientists’ Communication Award at the recent Australian Dairy Conference in Geelong.

“My PhD focussed on increasing understandings of ruminal acidosis. Part of my current research with SBScibus is develop-ing simple, cost effective, fast and reliable on-farm tests to assist farmers to identify ruminal acidosis,” she said.

“Improved diagnosis of ruminal acidosis will help Australian dairy farmers because it will allow better control of acidosis.

“The end result will be happier, healthier and higher producing cows and more dollars in the pockets of Australian dairy farmers.”

Ruminal acidosis (also called grain poisoning) is a complex nutritional disor-der that produces a range of syndromes in dairy cattle.

Ms Golder said cows develop ruminal acido-sis when they are switched between feeds too rapidly or are fed large amounts of grain- or sugar-based feeds (including turnips, molas-ses and fruit) without being fed enough rough-age.

Ms Golder said herds generally have a low risk of ruminal acidosis when fed less than 6 kg of grain, but some forages, especially lush grasses and legumes

increase that risk. “Cows are particu-

larly at risk of ruminal acidosis around calving as this is a time they are often off their feed and are then given access to grain during milking.”

The costs incurred from acidosis are from lameness, loss of milk pro-duction, a drop in milk solids, especially fat con-tent, costs of preventive treatments, loss of body condition, premature cull-ing and death, Ms Golder said.

She said cows with ruminal acidosis are not always noticed in the herd as many of the signs can be subtle.

Cows displaying the following symptoms may be experiencing ruminal acidosis or had ruminal acidosis in the past: bubbly scours; paint brush haemorrhages associated with laminitis; bleeding from the mouth or nostrils.

Current identification of the disorder involves observing clinical signs of ruminal acidosis in the herd; assessment of feed and feed management practices; examination of milk production history; interpretation of disease and feed management his-tory.

Diagnosis should then be supported by feed, rumen and blood analysis.

To improve the diagno-sis of ruminal acidosis, Ms Golder tested the ability of a model developed by Dr Liz Bramley to accurately diagnose ruminal acidosis in cattle under experimen-tal conditions.

Dr Bramley, as part of her PhD, developed the model based on rumen pH and concentrations of the rumen fermentation prod-ucts: volatile fatty acids, ammonia and lactate.

“These were tested in rumen fluid she collected from 8 cows per herd in 100 dairy herds in South Eastern Australia.

“My colleagues and I then tested the diagnostic ability of each of the indi-vidual rumen measures to predict ruminal acidosis that was used in Dr Bram-ley’s model.”

Ms Golder said the

model was able to cor-rectly identify cows with grain-based ruminal aci-dosis, but was not suitable for identifying ruminal acidosis in cows that had consumed significant amounts of sugar.

Ms Golder is currently exploring new methods of assessing rumen function on-farm.

“This research aims to deliver a simple, cost

effective, fast and reliable tool that can be used on-farm to assist farmers to diagnose ruminal acidosis.

“Accurate identifica-tion of ruminal acidosis will allow implementation of better control strate-gies, lower the financial costs and improve animal welfare.”

To reduce the risk of ruminal acidosis, Ms

Golder suggests: ■ Avoid rapid changes to

feed. ■ Feed high levels of grain

(more than 6 kg) or sugar sources including turnips with caution.

■ Ensure an adequate chop length of forage supplements (>2.5 cm).

■ Use feed additives if recommended by your veterinary advisor or nutritionist.

Feed Central’s Kim Colwell presents Helen Golder with an award for her research on acidosis.

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when the Lang family at Tatura in the Goulburn Valley needed to replace their ageing silage wagon, there was little hesitation about which brand they would go for.

Werner and Josy Lang run Lang Dair-ies, from their prop-erty ‘Greythorne Park’, just out of Tatura.

Their son, Markus, oversees the operation at Greythorne Park and his brother Philip runs another dairy just across the road.

They have 50 unit rotaries on each place, and each milk 650 cows. It is a mainly Holstein herd with 15 to 20% Jersey crossbreds.

Both farms milk all year round with split calving of 65% in the spring and 35% autumn.

The dairy operation runs over 1000 hectares, including a few out-blocks and all within a few kilome-tres.

They bought their first 16 cubic metre Schuitemaker silage wagon in 2006. “We were short of horse-power at the time and it was half the price of a feed mixer, so it was the logical thing to do” said Phil Lang. “We didn’t need a mixer because the feed was already chopped. It needs smaller horsepower to run, that’s less cost and you just load it up and go.”

They get contractors in to cut the grass and maize silage, and it is loaded into the wagon with a JCB telehandler.

Both dairies have permanent concrete feed pads. The Langs run at fairly high stocking rates and Markus said that they have heavy clay soil that gets wet and boggy; “So minimising wastage is a big focus. We feed them so they clean it up.” The cows eat the pads out each day after milking.

Markus said that the old wagon was getting too small for their expanding operation, so they

looked for a replacement and last July they purchased a 24 cubic metre Schuitemaker, but still held onto the older one; “We bought the new one as an extra large machine,

but we’re starting to fill it up now.”

“The new one has scales”, chips in Werner, “that’s mainly for a casual operator and they allow us to be con-sistent with the loads. It is very sol-idly built, and the three beaters in the

front really mix it up very satisfac-torily.”

“We priced feed mixers”’ said Phil, “but there are limitations on the size of the feedpad alley. A mixer wasn’t for us.”

“We never really had any prob-lems with the old one”’ remarked Werner. “At one stage we fed a few hundred large square bales of canola, they were very hard pressed, and it just tore them to bits and fed them out. It put up with a lot of punishment during the drought.

“It was feeding out for over 1000 cows a year – it certainly did

its work.”The 16 cubic metre machine had

very few problems in the 7 1/2 years

that the Langs ran it. They only needed to replace a conveyor belt and a broken gear on the floor.

Richard van Dooren, from Ag Machinery Australia at Strathmer-ton, has taken over the distribution of the Schuitemaker equipment in Australia since the Langs bought their first one.

“Richard gave me the confi-dence to buy another one”, said Werner. “He’s a farmer and he understands. He’s taken stock-ing parts seriously and the service behind it is excellent.”

Markus added, “It’s a disaster

if you have the machine out of order.”

The Schuitemaker wagon is generally used every day from December to August and is cur-rently operated by a 105 horse-power Massey Ferguson 6265. It does 14 or 15 tonne of wet feed per day, including 900kg of addi-tives. It is not used during spring, but if it is a dry finish to the spring, they’ll start earlier. Markus said that he would recommend the Schuitemaker to any dairy farmer.

“The main feed here is always grazing”, explained Markus.

“There’s never any spare feed on either of the dairies, but we have no intention of going to a feedlot system. We grow our own hay and silage and we are fairly well self-suf-ficient. We just buy in grain and by-products. We can adjust the value of the feed with the material in the cart.”

The Lang family philosophy appears to be ‘Sustainable Expan-sion’. As Werner says: “I’ve always had confidence in the dairy indus-try. You take every opportunity as it comes along. We expand nearly every year. We purchased an addi-tional 1000 acres (400ha) two years ago.”


30 // mAChinery & PrOdUCts

Replacement wagon an easy decision

who: Lang family where: Tatura whaT: Silage wagon

workiNg cLoTheschris DiNgLe

Werner and Markus Lang.


mAChinery & PrOdUCts // 31

reliABility is an operational keystone when agricultural contractors are intent on making hay and silage bales at the opti-mum time under the most favourable conditions.

So it was exactly that way for Daniel Custance from Nyora, in south Gippsland, when it came time to upgrade his round baler last September.

Mr Custance runs his own ag contracting and tractor repair and servic-ing business and bought his Welger RP445 baler through Traf Tractors at Trafalgar, the local Lely dealership.

At the same time he took delivery of a Fendt 724 tractor, which he uses to operate the baler.

Mr Custance had always previously run a differ-ent brand of balers. “It was time for a change, and it’s been well worth it,” he said.

“The Welger is unbe-lievable, the best baler I’ve ever driven - even though it was a little dearer than the other balers I looked at, it is fantastic.

“The speed, efficiency, bale density and ease of use are real advantages. It runs on an ISOBUS con-nection, so we don’t have to wire up or set up the con-trol box in the cab, we just have the monitor with a touch screen and fingertip control.”

Bale density, bale diam-eter, tying material and cutting length can be con-trolled from the baler hand-set in the tractor cab.

Lely Australia claim that the RP 445 is the most advanced variable round baler in the market place with bale diameters vary-ing from 0.90 to 1.60m and the best tensioning system,

crop intake and chopping systems.

So far Mr Custance has done 10,000 bales this season with his regular cus-tomers, in a 30km radius from his home base at Nyora. The 10,000 bales is an indication of how good the season has been.

He describes the Welger as very user friendly. “The build quality is a big part of it. It has bigger rollers which mean it turns slower. Greaseable bearings, auto-matic chain lubrication, endless belts, drop floor, Hydroflex control and rotor chop.”

He chose the optional ‘Xtracut17’ chopping unit and hydraulic brakes.

“You can change the knife selection from the cab. It has 17 knives in all, and you can run 9, 8 or all 17, depending on the fine-ness (the length) of chop that you need.”

Lely’s ‘Xtracut17’ system means that the 17 knives of the chopping unit are divided in two groups of eight and nine knives respectively which can be selected by the opera-tor from the tractor cab to determine the length of chop.

The baler’s pick-up width is 2.25m and the 500 mm diameter chopping rotor has an exceptionally open construction ensur-ing that the spirally config-ured tines have a large grip of the crop.

Due to this rotor con-struction, crop throughput to the bale chamber is mas-sive ensuring high output when baling high volume crops.Tel. Lely Australia on 1300 946 306 or contact your local Lely dealer.

Daniel banks on reliable Welger baler

Daniel Custance’s Welger baler has done over 10,000 bales since last September without a problem.

Strength / Quality / Performance

www.mcintosh.net.nz

For More inForMation contact

titan Series 7.8 - 25m3

The Titan Series Forage Wagons are built for the serious farmer. Heavy-duty 13mm floor and elevator chains and larger diameter sprockets are designed to handle larger and heavier volumes of material with ease. Larger floor and elevator shafts and bigger gearboxes give trouble-free operation and extended service life, with less time needed adjusting chains.

Strength / Quality / Performance

www.mcintosh.net.nz0800 622 276 Palmerston north

BALE FEEDERS

You expect strength, quality and performance from your farm machinery, and McIntosh Bale Feeders deliver all three. The McIntosh Bale Feeder is designed to an uncompromising strength standard. It is not designed to be the lightest on the market, because with today’s larger bales, faster tractors and less time for maintenance, the need for additional strength has never been more important.

Our range of Single, Double and Single or Double Trough Bale Feeders have been carefully thought out to reduce breakdowns and provide trouble free operation for years to come.

www.mcintosh.net.nz

2-3 June Crt Warragul Vic 3820 Ph: 0356 234 023 Mobile: 41 851 5510



Mower’s central drawbar lifts flexibilityfellA hAs launch-ing a trailed mower with transport chassis and centrally linked draw-bar. The SM 3065 Trans with a working width of 3.00 m and the SM 3575 Trans with a working width of 3.50 m are both available with roller or tine-rotor conditioner.

Because the drawbar is centrally linked the mower can be easily swung to the left and right behind the tractor, the company says. This offers the flexibility of mowing to suit the ground surface and any other requirement, for example, when forage is lying on the ground, on sloping terrain and for contour line work.

The high lifting height (600mm) of the new trailed mower at the headland is made possible by lifting the transport wheels. The resulting ground clear-ance is perfectly suited for travelling effort-lessly over mowed swathes, Fella says.

The freedom of movement of the mower

Because the drawbar is centrally linked the mower can be easily swung.

Fella’s trailed mower.

unit in working position of up to 400 mm can be relied upon to prevent the it from contacting the ground and digging into the sward, including even on closely undulating ter-rain.

The trailed hitch attachment of the SM 3065 Trans/SM 3575 Trans ensures good ground adaptation as well as ground-conserving and fuel-saving mowing.

Operator convenience is high, the maker says. Fold-up hoods give good cutter bar access,

and steplessly variable cutting-height adjustment, without tools, speeds the job.

A robust pivoting gear-box puts less strain on the driveshaft even in sharp bends.

The tool box is inte-grated in the drawbar.

The mower with roller conditioner suits low-impact conditioning of leafy forage, good for large volumes.

With the tine-

rotor conditioner ver-sion the possibility of adjusting the condition-ing intensity in five posi-tions without the use of tools makes for flexibility regardless of weather.

The SM 3065 Trans / SM 3575 Trans is fitted with Fella’s Driveguard overload protection as standard equipment. www.williamadams.

com.au

POOwOnG nOrth dairy farmer Ken Snell’s initial reaction to the McIntosh trailed bale feeder proved correct.

“As soon as I saw it I knew it would work well,” Mr Snell said. “It is so strong and durable, but so easy to use and that really appeals to me.

“Having the ability to hold the bales above the feeding cradle means even with our roto cut bales, we are able to remove the plastic and net without having the silage fall every-where.”

The machine’s unique twin ram lift system gently places the bale into the cradle no matter what size or shape bale.

“Just drop the forks,

back in and lift and it just works,” Mr Snell said.

The deep vee construc-tion gives a constant and even unrolling of the bales.

“Our farm has some steep hills here and I have been able to feed bales out in places I have never been able to feed out on before.

“We have total control of how we want the bale to be feed out right to the very end. This machine has certainly made feeding much quicker and easier.”

Allan Slater, from Claas Harvest Centre Gippsland, said they have received very positive results from the new bale feeder.

“We recently had trials of the machine with five foot silage bales weighing

up to 1300kg and it han-dled them and fed them out with ease.

“As balers are now able to produce larger and heavier bales each year, we have found we needed a bale feeder that can handle these bales.

“The McIntosh bale feeders’ robust design and strength where it’s needed will suit these demands of many of our customers”.

The McIntosh trailed bale feeder was voted the TMA Best Non Powered Machine of the Year at the recent Farm World field days, with judges com-mending its strong and simplistic design. Tel. TracMac Farm Equipment 03 56 234023; 0418 515510 .

McIntosh makes feeding time easier

Ken Snell with the McIntosh trailed bale feeder.

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mAChinery & PrOdUCts // 33

Automation opportunities

AUstrAliAn PUmP Industries (or Aussie Pumps) has produced a cleaning equipment cat-alogue, Aussie Blaster Blitz, specifically targeting rural applications.

Aussie Pumps’ high pressure cleaning equipment is uniquely suited for tough applications ranging from machinery wash-down to stockyard flushing, dairy wash-down and even shipping shed decon-tamination.

“We set out to showcase our R&D efforts and to show that all Australian farmers can cut costs, save time and water, and carry out cleaning tasks more safely with the right equipment,” said Aussie Pumps’ Hamish Lorenz.

The company’s full range is illustrated from engine drive pressure cleaners, right through to heavy duty steam cleaners designed for decontami-nation or sterilisation.

The full range of machines features Australian designs that have won awards in the USA and other export markets.

A full range of labour saving cleaning accessories are also fully illustrated with details to make selec-tion easy.

They include hose reels for long length hoses (ideal for cleaning combines or big machinery), long length telescopic lances, grit blast kits and replace-ment unloaders and other major pressure cleaner components.

Replacement pumps from the ‘Big Berty’ range are also featured with interchange ability data between brands to enable operators to replace com-plete pumps on their existing machines at minimal cost.

aussie Pumps launches cleaning blitz

AUtOmAtiOn sOlU-tiOns are already having a big impact on many Aus-tralian dairy farms and there are exciting options on the horizon.

FutureDairy project leader, Associate Professor Kendra Kerrisk, believes the greatest opportunities lie with technologies that save labour by automating repeated tasks, collect and report data to help deci-sion making or collect new data that hasn’t been able to be recorded in the past.

“Robotic milking offers all three benefits but of course it involves a major capital outlay and a period of 6-12 months to adapt the farming system to realise these benefits,” she said. “There are now four brands on the market giving more options with single box, multi-box and the robotic rotary.”

Other repetitive tasks that can currently be auto-mated in the dairy include yard washing, drafting

and weighing cows, indi-vidualised feeding, milk sampling and testing for composition, oestrus detection aids and mastitis indicators.

“There are numer-ous robotic arms available overseas for pre-milk-ing teat preparation and post milking teat sanita-tion, although they are not available here yet. These are mostly compat-ible with the manufactur-ers’ own milk harvesting installations.”

The FutureDairy team is excited about new technologies that allow dairy farmers to collect animal performance information.

“This is an example of products that allow auto-matic collection of infor-mation that we haven’t been able to record in the past.”

“For example, the combined use of activ-ity monitors and rumi-nation sensors is looking very promising for auto-

matic heat detection, early diagnosis of illnesses and possibly to provide an automatic alert at the onset of calving. This tech-

nology is commercially available in Australia,” she said.

In 2014 the FutureDairy team will be conducting

trials to better understand the value of the data pro-vided and how to interpret the results.

Technology has also been developed to auto-matically sample milk from individual cows and analyse it for automatic detection of animal per-formance, particularly oestrus, mastitis and keto-sis.

“The technology is sold overseas but it is unknown if, or when it might become available in Aus-tralia,” she said.

FutureDairy has con-ducted some initial trials on the potential to use a robot to herd dairy cows from the paddock to the dairy.

“The results were very promising; we were

amazed at how calm the cows were in the presence of a robot.”

FutureDairy will be continuing work in this area using a custom-built prototype, in association with the Australian Centre for Field Robotics at the University of Sydney, who are pioneering the use of robots in a range of agri-cultural settings.

FutureDairy has conducted some initial trials on robots to herd dairy cows from the paddock to the dairy with promising results.

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i hAVe to say it didn’t occur to me that this column would become an obituary so soon, but the timing somehow seems appropriate. The reason is simple: one of the last of the few examples in Aus-tralia of this month’s fea-ture is likely to be replaced soon. It has fallen victim to age, hard work, and the need to have ever more productive machines at the front line of contract-ing and farming.

You see, the tractor of interest is the almighty Case 4994. This beast of a machine was released in the mid-1980s when Case ran short of money to complete development of their ambitious six-wheeled dual-articu-lation high horsepower

super tractor. What they did instead

was build upon the highly successful four-wheel steer 4WD range they had, pairing a turbocharged 400hp V8 Saab-scania engine with a 12 speed full powershift transmission.

The resulting mon-ster topped out the range of the 300hp 4894, 261hp 4694 and 212hp 4494. Not a machine for dairy farming - and certainly not one for hobby farmers - but a cre-ation worthy of respect for its sheer power and pres-ence.

Unfortunately, despite being at the forefront of technological progress the

big machine proved to be a bit of a handful to keep running. Well, by some accounts, a lot of a hand-ful.

Weaknesses in the powertrain meant reliabil-ity was poor and break-downs frequent. With the acquisition of the Stei-ger company in 1986, Case obtained an alternative large 4WD platform.

Further development of the range ended and the iconic rigid frame machines ultimately dis-appeared. The worst seller was the first to go, and in the end only 224 4994s were built, of which a dozen or so reportedly made it to Australia. Small numbers in service only compounded the reliabil-ity woes, with parts dif-


grUNTjohN DropperT

Case 4994 now a rare sighting

mUCK rUnner Pty Ltd, based in Mount Gambier, SA, has been supplying quality machines to Aus-tralian farmers and contractors for more than 16 years.

Run by Tom and Louise Pal-tridge, the company is the official Australian importer of the French-manufactured Pichon and Rolland machines.

Muck Runner recently deliv-ered the latest Pichon manure spreader to SA farmer David Somer-ville. It is the largest model being run in the Southern Hemisphere.

Pichon is a French company which has been manufacturing gal-vanized effluent tankers for at least 40 years and its manufacturing excellence extends to a range of rear discharge manure spreaders.

Muck Runner supplies the whole range of Pichon MuckMaster manure spreaders with capacities from 9.3 cubic metres to 23.6 cubic metres.

Standard features include fully hot dipped galvanized structure at 480°C, commercial axle with 10 studs, hydraulic brakes 420 x 180mm, the largest diameter beat-ers on the market (1035mm diam-eter) with 46 reversible blades, sprung drawbar, rear guillotine door, hydraulic floor chain tension and hydraulic jack.

Mr Paltridge said the machines fit the needs of customers looking for heavy duty construction and spread-ing quality.

“The size of the beaters and their positioning provide overlap of the

left and right beaters and spreading vanes ensuring complete processing of any clumps and lumps,” he said.

“Additionally, this gives a bene-fit of saving energy as the reversible blades only come in contact with the spreaded material during the exiting arc of travel.”

Muck Runner can also order a range of accessories in order to handle any type of solid manure.

A hydraulic rear hood can also be added to any existing machine allow-ing farmers or contractors to spread any material without compromise. Tel. 08 8738 8045

ficult to come by even at the best of times.

I’ve seen two of these machines in action. One belonged to my father and for over a decade was a regular sight laser grad-ing around the Macalister Irrigation District before being traded in and sold out of the region. The other belongs to another Gippsland contractor, also part of a laser grading setup. A few more pop up

from time to time in the classifieds, usually in need of some serious TLC.

The smaller machines in the series are far more numerous, and over two decades since the line was killed off, many are

still going strong. But if you do have a 4994 that you’re perhaps using to roll the silage, drop us a line. It’d be nice to know the obituary is indeed premature.• 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.

No mucking about with Pichon manure spreader

Sa farmer David Sommerville with his new Pichon manure spreader, the largest in the Southern Hemisphere.

The Case 4994 is worthy of respect for its sheer power and presence.

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LANDACO has four types of spreaders for your spreading requirements:• Landaco Trailing 2.5 to 25T • Landaco Chain Floor Linkage 2 & 3T• Bunning Manure 6 to 35T • GFL Econ Linkage 1.5 to 3T

landaco.com.auLANDACO are your distributor for the GT Bunning Manure Spreader range, the key qualities of a Bunning are simplicity, durability & ultimate relability. Suited to both farmers & contractors with a range from 6 to 35 Tonne. Call today & ask about options available.

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www.dairynewsaustralia.com.au

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dairy news australia may 2014

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