December 2020
Learn, grow, excel
SPECIAL REPORT: Budgeting for a better future
SQUEEZING OUT THE NITROGEN
Going bananas
Time for
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Dairy Exporter | www.nzfarmlife.co.nz | November 2020
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Dairy Exporter | www.nzfarmlife.co.nz | December 2020
28 L IVING FRUGALLY PAYS DIVIDENDS
CONTENTS MILKING PLATFORM 10 George Moss sees a pressing need for plastic recycling 11 An unpredictable year for Kirsty and Nic Verhoek 12 John Milne adapts to change 13 Frances Coles finds a case for the keyboard warriors
UPFRONT 34 SQUEEZING OUT THE NITROGEN
14 Dairy farms are looking more investible 20 Global Dairy: The struggle of FrieslandCampina 21 Market view: Price remains resilient
BUSINESS 22 Lewis Road: The tale of two butters 28 Living frugally pays dividends 33 CO Diary: Rising to the challenge
SYSTEMS 34
Squeezing out the nitrogen
40 Going bananas for diversity 46 KNOW THY NUMBERS
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
42 Field-testing regenerative ag
3
TF
TOW AND Fert
REDUCING THEIR NITROGEN Align Farms drops under the 190 Units N/Ha limitation one year before they need to. Rhys Roberts, CEO of Align Farms, knew they needed to change their nutrient programme. He and his team changed to foliar application, using a Tow and Fert across the company’s five dairy farms. They reduced their Nitrogen inputs, grew more grass, and produced more milk one year before the government regulations kick in. LEARN HOW ALIGN FARMS ACHIEVED THE FOLLOWING:
Reduced their ‘N’ inputs across their farms by up to 33% Went from a farm average of 246 units ‘N’ per ha to 173 units ‘N’ per ha Reduced their milk urea from 20 to 25mg/dl to between 3 and 5mg/dl
Read the FULL Case Study.
“The Tow and Fert system is versatile, pragmatic and does everything that we need it to do”. Rhys Roberts CEO, Align Farms
Or watch the videos www.towandfert.co.nz/align
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CALL 0800 337 747 orExporter email| us at dairy@towandfarm.co.nz Dairy www.nzfarmlife.co.nz | December 2020
SPECIAL REPORT
SPECIAL REPORT:
BUDGETING
BUDGETING FOR A BETTER FUTURE
46
52 Planning to succeed
FOR A BETTER FUTURE
46 Know thy numbers 50 Knowing where you’ve been 54 Budget is a living document
KNOW THY NUMBERS
50
KNOWING WHERE YOU’VE BEEN
52 PLANNING TO SUCCEED
54
BUDGET IS A LIVING DOCUMENT
ENVIRONMENT 56 In action for the springs 60 Down the drain - or not 62 Trapping rats to reduce leptospirosis risk
STOCK 64 Win: win for grazing partnership 67 Is heat stress affecting herd reproduction 69 DairyNZ: The year dairy joined the essential few
YOUNG COUNTRY 71 Confident in their business 72 Experimenting with transition 74 My challenge to you…
RESEARCH WRAP 75 Using human care techniques on mastitis
WELLBEING 76 A child’s perspective
DAIRY 101 56 IN ACTION FOR THE SPRINGS
78 Early ultrasound scanning safe and successful
SOLUTIONS 80 Long-term genomics investment paying off 81 Opportunities to upskill
OUR STORY 82 The Dairy Exporter in 1970
COVER: This month’s covergirl, Miss 550, is enjoying the Align Farms diverse pasture mix. Photo Johnny Houston, RedBox Photography.
44 WIN: WIN FOR GRAZING PARTNERSHIP Dairy Exporter | www.nzfarmlife.co.nz | December 2020
5
DAIRY DIARY December – Registrations are open for
January 26-28 – The New Zealand Dairy
get the most from farm environmental plans.
DairyNZ’s 2021 Mark and Measure three-day
Event is being held at Manfeild Agri-Centre
There is no registration fee for participants
courses to learn key business concepts and
in Feilding. The event showcases some of the
joining online and it is expected to be a one-off
skills. Locations/dates: Taupo, May 18-20;
finest genetics in the industry and continues to
replacement of the annual workshop. More?
Queenstown, June 15-17; West Coast at
have a major focus on farming youth. The PGG
and to register visit http://flrc.massey.ac.nz/
Greymouth, June 29-July 1; Northland E350
Wrightson Summer Sensation Sale will also
farmers at Tutukaka, March 24-26. For more
feature again. More? visit www.nzdairyevent.
February 21 – Entries close for the Fonterra
information contact Paul Bird on 021 08162710
com
Dairy Woman of the Year 2021 award which
or paul.bird@dairynz.co.nz. Northland E350
recognises an outstanding woman who
farmers contact Jan McPhail on 021 0564698 or
January 27 – Canterbury’s winners of the
has contributed to the dairy industry with
jan.mcphail@northlandnz.com. Or register your
Ballance Farm Environment Awards, Tony
passion, drive, innovation and leadership. The
interest at https://www.dairynz.co.nz/business/
Coltman and Dana Carver who own Canlac
winner receives a scholarship prize of up to
mark-and-measure/
Holdings, have a field day on their property.
$20,000 to undertake a professional business
More about their win can be found at
development programme. To view the criteria
December 15 – Taranaki Organics Group
https://www.nzfeatrust.org.nz and for more
and read about past winners, plus make a
holds its last meeting for the year. Renowned
information about the field day contact
nomination visit https://www.dwn.co.nz/
for being innovative and constantly pushing
Kaylene Fenton on 021 02871318.
fonterra-dairy-woman-of-the-year/
and 1.30pm at Opunake. More? contact Mark
February 4 – Lincoln University Dairy Farm
February 25 – Greater Wellington winners
Laurence on 027 7045562.
focus day on the farm between 10am and 1pm.
of the Ballance Farm Environment Awards,
A chance to hear how the farm has performed
Kaiwaiwai Dairies which is run as an equity
January 20 – Tiller Talk in Manawatu talks
as well as the challenges and opportunities in
partnership with six shareholders, has a field
about the forage value index, regrassing,
the coming months. More? visit www.siddc.
day on the South Wairarapa property. For
summer supplements with analysis on cost and
org.nz
details about their business visit https://
the boundaries. Being held between 11am
www.nzfeatrust.org.nz and for more
benefit to business, and winter crops. Tiller Talk are small groups of like-minded farmers
February 10 – The 2021 Farmed Landscapes
details about the field day contact Georgie
who meet several times a year, supported by
Research Centre (FLRC) workshop will be run
Cranswick on 021 02356192.
agronomists for technical advice. More? visit
as a one-day live Zoom webinar between 10am
https://www.dairynz.co.nz/events/lower-
and 6pm. Participants can attend face to face
north-island/tiller-talk-manawatu-january/
or online. The programme will focus on how to
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Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Editor’s note
REALIGNMENT
I
think the word pivoting has been overused this year, but maybe a realignment is more what is needed and what we see leading farmers doing. Making small changes to better fit with their values, buttoning off intensity, stepping away from using so much N, finding more balance. Covid-19 came along and we all stopped with the overseas work trips and the holidays and realigned ourselves to enjoy staycations and conferences over Zoom. It’s become wasteful and resourcehungry to buy a new wardrobe each season so we have adjusted to wearing the old ones and trawling through the second-hand shops to re-use and recycle. I have spent the year cutting down on plastic use, refilling the old plastic and glass bottles as much as possible with my new-found BFFs at the local Bin Inn, and I really have cut down on trips to the recycling centre by simply not buying the plastic. As a family we have also cut meat consumption - not because I really believe eating less of New Zealand’s low-carbon beef and lamb will actually save the planet from climate change - it’s more for the health benefits of higher vegetable content in our diet. At the recent Primary Industry Summit, Dave Frame from the NZ
and work-ons
Climate Change Institute said the CO2 increasingly dominates the climate change problem and while methane needs to reduce a little, CO2 really needs to go to zero - because of the longer timeframe that CO2 spends in the atmosphere. A split gas approach is fairer and less arming in the long run - and so while destocking cows is tinkering around the edges, it’s really all about cutting fossil fuel use and emissions. So that is a work-on for next year which at farm scale will take a lot of realignment of systems and processes. Talking of work-ons, our budgeting special report reminds why it’s important to be a ‘super-spread-sheeter’, creating, monitoring and reviewing the budget at frequent intervals to help make better decisions. You can’t go forward or change direction if you don’t know where you sit. (pg 45) In a similar vein, Align Farms in Canterbury want to understand more about regen ag, so have embarked on farm-scale trials, running regen and conventional systems side by side so they can actually get data and make informed decisions on the financial, environmental, human and animal
health and social impacts of the system. They are after robust scientific outcomes that they can share with other farmers (pg42). The Dairy Exporter will follow the trials and help spread their data and conclusions. The Wards in Canterbury are re-aligning their N use and cover off how they are driving down their N surplus to fit under the 190kgN/ha/year ceiling set under the Freshwater policy reforms. (pg 34) While not classically beautiful, our cover-girl cow from Align Farms certainly has attitude - with the stumpy horns, the googly eyes and her tongue hanging out, she made me smile - and perhaps personified a little how we all feel about 2020. Bugger off crazy old 2020, bring on 2021 so we can all work-on our realignment!
NZ Dairy Exporter @YoungDairyED @DairyExporterNZ @nzdairyexporter
Sneak peek JANUARY 2021 ISSUE
• Flexible Milking… a look at different milking regimes, OAD, 3in2, TAD, what is the latest research? • Cashflows follow Yili purchase How are the Coasters feeling one year on from selling their co-operative.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
7
NEW ZEALAND
NZ Dairy Exporter is published by NZ Farm Life Media PO Box 218, Feilding 4740, Toll free 0800 224 782, www.nzfarmlife.co.nz
NEW ZEALAND
Dairy Exporter Editor Jackie Harrigan P: 06 280 3165, M: 027 359 7781 jackie.harrigan@nzfarmlife.co.nz
ONLINE New Zealand Dairy Exporter’s online presence is an added dimension to your magazine. Through digital media, we share a selection of stories and photographs from the magazine. Here we share a selection of just some of what you can enjoy. Read more at www.nzfarmlife.co.nz
Lead sub-editor: Andy Maciver, P: 06 280 3166 Reporters Anne Hardie, P: 027 540 3635 verbatim@xtra.co.nz Anne Lee, P: 021 413 346 anne.lee@nzfarmlife.co.nz Karen Trebilcock, P: 03 489 8083 ak.trebilcock@xtra.co.nz
DAIRY DIVERSIFICATION AT MT SOMERS STATION
FIELD-TESTING REGEN AG
Andrew Swallow, P: 021 745 183 andrew@falveyfarm.co.nz Chris Neill, P: 027 249 1186 waipuvian@gmail.com Phil Edmonds phil.edmonds@gmail.com
We visited David and Kate Acland at Mt Somers Station where diversification is embedded in their intergenerational business vision. Dairy, beef, deer, sheep and honey, lambswool blankets, two country stores and a winery exporting to 17 countries. The 850-cow dairy conversion has been a key factor in making it all happen adding value without risking the overall business and land.
We visited Rhys and Kiri Roberts at Align farms to see the farm-scale trials they are running on regen ag vs. conventional dairying. They are collecting data on financial, physical, social and animal health metrics to make informed decisions and share with other farmers on the regen farming system. Check out the Align Farms video on YouTube ‘Dairy Exporter’ channel.
PODCASTS: For all Dairy Banter Podcasts visit www.nzfarmlife.co.nz/tag/dairy-banter
www.youtube.com/watch?v=Km-83gw3Al0
MILK PAYOUT TRACKER: 7
Series 2, Podcast 2 In this podcast, Okoroire farmer Floyd Smit joins CRV’s Jenna O’Sullivan and Rosanna Dickson to talk about breeding with Polled genetics. www.crv4all.co.nz/podcast/series2-episode2/ Series 2 podcast 1 Join Rosanna Dickson as she chats with Dr Ky Pohler from Texas A&M University about his findings and how New Zealand farmers can ensure they are mating their cows at the right time. www.crv4all.co.nz/series2-episode1/ 8
6.70
$/kg MS
Series 2 Podcast 3 Determining the pregnancy status of your herd via milk can be done as part of your CRV herd test. Listen to DairyNZ animal and feed developer, Sam Tennent, and CRV herd testing manager Mark Redgate to find out more. www.crv4all.co.nz/podcast/series2-episode3/
Average $6.81/kg MS
2020/2021 Fonterra forecast price
6.75
6.80
7.16
6
7.00 6.35
5
Anne-Marie Case-Miller P: 021 210 4778 annieproppy@gmail.com Design and Production: Jo Hannam jo.hannam@nzfarmlife.co.nz Emily Rees emily.rees@nzfarmlife.co.nz Social Media: Charlie Pearson, P: 06 280 3169 Partnerships Managers: Janine Aish Auckland, Waikato, Bay of Plenty P: 027 890 0015 janine.aish@nzfarmlife.co.nz Tony Leggett Lower North Island P: 027 474 6093 tony.leggett@nzfarmlife.co.nz David Paterson South Island P: 027 289 2326 david.paterson@nzfarmlife.co.nz
4
CONNECT WITH US ONLINE: www
6.90
Elaine Fisher, P: 021 061 0847 elainefisher@xtra.co.nz
www.nzfarmlife.co.nz NZ Dairy Exporter @DairyExporterNZ
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Dairy Exporter | www.nzfarmlife.co.nz | December 2020
YO U PROV E I T E V E RY DAY
Now it’s our turn You measure your own performance at every milking. Our performance should be measured by our ability to support you, today and tomorrow. That’s why we’d like to meet, face to face and talk through the most recent data and reports for your farm, so that you can plan your future with confidence.
Go to fonterra.com/proveit to request a
It’s time t i to prove
face-to-face meeting at a time that suits you Dairy Exporter | www.nzfarmlife.co.nz | December 2020
9
MILKING PLATFORM SOUTH WAIKATO
take them but it does allow us to “store” plastic in an organised fashion. We have been fortunate enough to have been given an old hydraulic press which we will have on the front of the tractor and either run directly off the tractor’s hydraulics or a generator, this will eliminate the need to climb on the press bin and pack the plastic. Cows have milked very well up to 10 days ago, but have since “fallen apart”. With the grass growth above 80kg drymatter (DM)/day for about the last 30 days and a lot of cloud and damp means we have been swamped in low-quality feed. Addressing this is our priority right now with topping and silage.
We have bought an old wool press, secondhand wool packs cost $7 each and we can get about 80 wraps into a bale with no problems.
Bales of plastic ready for recycling.
Recycling plastic a pressing need George Moss asks why anyone would want to invest in anything but dairy?
W
ow - what a spring! In just off 40 years of dairy farming I cannot remember a spring for grass growth like this one. We have made double silage so far and have still more to come. Regrettably, because of the weather it did not come off at anything like near the optimal time. Consequently, we have had some (read a lot of) overly mature and in some cases very wet silage, with some paddocks looking like the rats chewed them. We are not overly concerned, feed is feed, and feed on hand does not need to be purchased, and leaves us in a strong position should “Hughy” throw us another “curve ball” like last autumn. There will still be the opportunity to make “milking quality silage” as the clover comes. 10
We make baled silage as opposed to pit or stack, we have found that bales make feed allocation to “smaller” herds a lot easier for staff with rarely more than two bales having to be fed out to any given mob: one on the front of the tractor and one on the feeder. The downside is masses of plastic wrap. The local Achievement Centre used to take it for recycling but has since stopped for health and safety reasons because of potential “bugs” on the plastic. Buying large plastic bags to put plastic in at great cost seems counterintuitive as well as being a time-consuming and frustrating job when bags split etc. We have bought an old wool press, secondhand wool packs cost $7 each and we can get about 80 wraps into a bale with no problems. We still need to find who will
Mating performance, while still early days, also looks to be going exceedingly well with very few returns and some days nil, which is all leading to a strong start for next season. Both farms have brought their calving dates forward by over a week in recognition of the increasingly mild winters, but dry autumns seem to be the new pattern. We have increased the use of both sexed semen and Wagyu straws and this strategy along with mating yearlings hopefully will fast track genetic gains. New staff have settled in well and appear to be enjoying the challenges of managing a low-stocked farm and achieving very good animal performance. Unfortunately, one of existing staff members is off on ACC with a previous but serious back injury that has flared up. We also have a “Covid-19” returnee who has had no previous dairy experience filling in and she has been very quick to learn and loves the animals. With all that - with the milk price looking increasingly strong, a great start to the season and with potential further interest rate falls why would you want to invest in anything other than dairy? Have a restful festive season.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
MILKING PLATFORM WAIKATO
Spring; role of weatherperson and taking punts on the weather for getting crops done those jobs that had been put off over the busy period.
Catching up those jobs that had been put off over the busy period.
An entirely unpredictable year A new role as employers adds another variable to Kirsty & Nic Verhoek’s season.
D
ecember marks six months into our 50/50 position and a reflection of 2020, a year that has been entirely unpredictable. Even the farming seasons seem out of whack. Our run of unprecedented pasture growth rates here in northern Waikato has continued through spring with our feed banks of grass silage now put away for summer. Chicory and maize silage are in the ground and flourishing so far – long may it last. Managing grass quality has been a real challenge this spring, especially when it has come to keeping milk production buoyant. From what we are hearing, this seems to be a trend in the wider region. Alleviating this problem has been frequent pasture measuring and monitoring of residuals and average pasture cover. The surplus pasture has allowed us to look at options such as taking out more paddocks than usual for summer crop, keeping
young stock on the dairy platform for longer (thanks to generous concessions of our farm owner), making additional grass silage, and deferred grazing. The new farm is now starting to feel like a well-worn and favourite pair of overalls as we get more of a handle of the ins and outs. With the backside of the bulls almost gone from sight (yippee) this has been the time that we look forward to a break and focus on giving our staff some welldeserved time off. After being the employee for a number of years and now being the employer, we aim to treat our staff the way we would like to be treated. Our focus is on a good roster all year round (8 and 2, 8 and 3) with good breaks off during the day (typically 3 h), well remunerated, good time off to spend with family over the holiday period, opportunities to learn and grow, and rewards for success/milestones. We like to keep the staff fridge full and baking on hand to keep morale up. When hiring
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
new staff, while skills and experience are good these are something that can often be taught – but attitude not so much! With our recruitment we look for someone who has the right attitude and is the right fit for our existing team, a piece that fits our puzzle. Looking forward, we are moving from mid to late lactation and preparing for the dry period. Our farm goals are to keep milk production profitable, monitor body condition score and set a plan for the rest of the season. Although this is seen as the “downtime” it is crucial for setting up next season. If mating has gone as well as we anticipate, this will mean accommodating a huge number of calves in a very tight timeframe (just the thought gives a slight tightening of the chest), so we need to make sure that infrastructure and staff are going to cope. We have also been fortunate to pick up a 110ha lease block 10 minutes up the road, with takeover on the 1st June. This block will give us full control of growing our young stock. We intend to have some time off-farm ourselves and will use this opportunity to update our goals and where we are heading. We hope to get along to a few more local discussion groups and meet others in the farming community now that Covid-19 seems to be (temporarily?) dampened down. A highlight this year has been attending the DairyNZ FeedRight course. This has been great for making profitable and sustainable feed management and nutrition decisions onfarm. It also adds “more tools to your toolkit” in terms of an awareness of resources available and how to use them, networks and knowledge. See the DairyNZ website for more information. 11
MILKING PLATFORM WEST COAST
The animals seem to adjust to the change in pattern better than we do. All you have to remember is that as with any change there are some positives and negatives.
A sunny couple of days for AgFest brought out all the punters and showed ‘The Coast’ at its best.
Adapting to change John Milne believes more farmers will look at farm system changes to suit their farming needs.
W
hat a year! Our youngest has finished a very broken ‘Covid-19’ 2020 school year, that’s him out into
the workforce. Jacinda has climbed back into the history books. Winnie has disappeared, Biden is in power, Trump is still golfing. OMG as the kids would say. By the time this article is being read around New Zealand we will be close to halfway through our season here on the coast. All the future offspring will be weaned and well on track for growth rates, to ensure a good contribution to the future herd. Bulls will almost be finished, with the tail end of mating. Summer crops will be reaching mid-point in their growth, so we can take our foot off the throttle and head into our 3-in-2 milking regime (6am, 6pm, 11am milking times). That’s our system, it works for us and our farm/family life and workload. Our cows adapt to this system very well, 12
The offspring are weaned - as well as the youngest Milne child - through school and out into the workforce!
sure you lose a bit of production in the period when you first change their regime but this is quickly halted as they adjust. The animals seem to adjust to the change in pattern better than we do. All you have
to remember is that as with any change there are some positives and negatives. The trap is that you can fall into doing more hours’ work than you would normally do between the 6am and 6pm milkings. It’s that time of year: silage/ baling time and you can be burning the candle at both ends, so you have to be aware of this. On the flipside when the 11am milking is done, that’s it for the day, if that’s what you choose. And it’s nice to have a sleep-in every other day, even though your body clock tells you it’s time to wake up still. With the way 2020 has panned out I believe there will be more farmers looking at these sort of farm system changes to suit their farming needs. With Dairy NZ parking its “Let’s go Dairying” campaign because of limited success, and Covid restrictions it makes it hard to watch vegetable growers see their hard work go to waste. Rural contractors are struggling for staff to harvest this season’s crops, and to plant for the coming winter. Somewhere along the line Kiwis are going to have to want to get their hands dirty and contribute to the primary industries that have kept the country going while we have battled through this event. It’s not over yet. The team of five million have stuck together fairly well to save each other until now but Jacinda has 250,000 Kiwis heading home, if the media and journalists have it right (I have my doubts). She will have to pull a magic trick like never seen before, out of her hat, to keep the team happy. Finally congratulations to the Agfest team for pulling off what was thought to be a risky event when it was first mentioned. A great two days was had by all. The sun shone and showed off The Coast.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
MILKING PLATFORM SOUTH CANTERBURY
A case for the keyboard warriors An inaccurate draft proposal had the good people of South Canterbury up in arms. Frances Coles reports.
W
e’ve had a wee storm in a teacup happening in our neck of the woods recently, with the Timaru District making the front page in spectacular yet negative fashion. It was all kicked off a couple of weeks ago by the release of the Timaru District Council’s Draft District Plan, which seemed to imply that the mere act of farming animals – particularly dairy cows – was an intensive activity which needed all sorts of regulations. To be honest, it sounded too ridiculous to be true at first glance, but attention was being directed to it by people I trust and respect, so I started to look a little more closely at the specifics. In the interests of research on which to base an educated opinion, I conducted some quick ‘back-of-the-envelope’ colouring on one of our farm maps to get an idea of exactly how much of our home
farm would need to have animals excluded if the proposed regulations were to be applied. You’ll see from the photograph of my masterpiece that the prescribed set back of 100 metres from road and internal boundaries and 400m from residential units on adjoining sites was going to rapidly convert us from dairy farmers to cropping farmers or some other alternative and have serious repercussions on our bottom line. The mere existence of neighbours along our boundary was going to have a particularly dire effect on the bottom part of the farm! On the same day I did this, a farming newspaper ran a front page story about the dangerous precedent this district plan was setting for other councils around the country, and this was in due course shared in various places on social media. It was like a red rag to a bull for all the keyboard warriors of the district and the storm was
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
in full force. Trusting my gut instinct that the idea seemed too ridiculous to be true, I held off joining the mob who were no doubt all pounding out an online submission expressing their virtuous rage at the council’s presumption that even the sight of farm animals in a rural setting was offensive to neighbours and passers-by. Sure enough, the level-headed communications manager from the Timaru District Council set about allaying people’s fears and reminding everyone that the plan was just a draft. A few days later this was followed by an email to local members of Federated Farmers: “To put people’s minds at ease, we can confirm Timaru District Council has been in touch and have stated that the setback for stock was an error on their behalf and will not be in the final draft plan. “ And with that the storm seemed to subside, the clouds parted and the sunshine could be glimpsed again over the verdant green pastures of South Canterbury. But I still had a feeling of unease – a real sense of disappointment that it was farming news media, not urban-based mainstream media that had beaten this whole thing up in the first place. This year has hardly been the year many hoped it would be as they optimistically sipped on their celebratory New Years’ beverage. Many farmers are under the pump already for various reasons, even if it’s just that this is traditionally the busiest time of year for many. So they don’t need the news outlets charged with championing their cause to be the very ones adding unnecessary mental load about the often-trumpeted urban-rural divide and tidal wave of compliance bearing down on them. Keep the stories upbeat – inspire farmers to believe in themselves and their neighbours – and at the very least provide some balanced journalism! Back when I was a reporter it was simply considered good practice to have both sides of the argument offered the opportunity to speak their piece – a privilege it seems the TDC was denied in this case. Here’s to a calmer, more considered 2021 for all – cheers! 13
UPFRONT INVESTING IN DAIRY
INSIGHT
Back to the land
The Covid-19 pandemic has helped focus investors on the possibilities of the dairy industry. Phil Edmonds reports.
“Inevitably you will get ambivalent investors, who will be looking at dairy more favourably.”
T
here’s no chance we’ll look back fondly on the events that have unfolded this year, but there’s no getting away from the fact that it’s taken the catastrophe to help light investors' eyes again to the merits of dairy. Milk prices are up against initial odds, demand for New Zealand dairy products has not slowed and after some business model resetting, farm profitability is returning. The questions now are will new investors follow the numbers? If not, why not? First, the helicopter view. The unprecedented low interest rate 14
environment created by the economic upheaval has sharpened investors' focus on yield. With returns in every sector of the economy squeezed, and some facing structural challenges that present newfound risk, attention is inevitably falling on those propositions that look more stable. At a cursory level, those with just half an ear tuned to sector fortunes will have noted global milk price resilience (contrary to many expectations) as other commodities (especially non-food related) have emerged from Covid-19 less assured. Westpac senior agri economist Nathan
Penny says while dairy returns have not been excessive, they haven’t taken a hit like others. “Inevitably you will get ambivalent investors, who will be looking at dairy more favourably.” To be clear from the outset, dairy is not all of a sudden a beacon of light, nor is it necessarily getting more attention than other food sectors. Indeed, fresh stardust has settled across all agriculture since the world turned upside down earlier in the year. During the first wave of lockdowns – in NZ and overseas – access to food was one
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
NZX Head of Analytics Julia Jones.
During the first wave of lockdowns – in NZ and overseas – access to food was one of the few concerns people had.
Westpac senior agri economist Nathan Penny.
of the few concerns people had (or at least needed to have). The reality has been that irrespective of ability to pay, some food has been unattainable. And scarcity is something that clearly makes people think about investing. NZX Head of Analytics Julia Jones says there is evidence that investors are tuning into this new realisation overseas. So far, it’s too early to say that cheque books have been opened and food-producing asset prices are set to climb, but the key outcome in NZ from the emerging global sentiment has been fresh interest in understanding where people looking for a food haven can invest.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
As far as land-based assets are concerned, dairy has been off neutral investors’ radar since milk price volatility moved into unmanageable territory and a consensus emerged around a disconnect between dairy farm prices and dairy business profitability. That was compounded by an attitude towards structuring farm businesses as property developments with a focus on adding value to the land, rather than cash yield. But those forces no longer dominate the industry’s fundamental proposition. “The days of getting swings from $8.00/ kg milksolids (MS) to $4.30/kg MS are well past us,” Penny says. “That is increasingly clear. That volatility has narrowed, and the long run milk price looks closer to $7.00/ kg MS than $6.00/kg MS.” Meanwhile, the price of dairy land is now more likely to reflect the value of the businesses that operate on it. Tougher bank restrictions on rural lending and tighter rules around foreign investment were contributing factors to easing land prices, but values also fell because investors weren’t necessarily liking what they saw, with returns not reaching levels that matched alternative offerings. Anecdotal information on recent dairy farm sales suggests competition is creeping back into the market, and that capital providers are willing to support buyers 15
‘Entry costs into investment in kiwifruit are rising, so that is bringing the yields down.’
with robust financial positions. In addition to encouraging signs of more stable milk prices, and implications of that for land prices, Penny points to more maturity in dairy farm businesses that has arisen in the post-growth phase hangover. Businesses have been keeping more of an eye on costs as they’ve adjusted to pay for the massive expansion in the 2000s.
SUN SHINING ON HORTICULTURE INVESTABILITY
While the top-level fundamentals are looking positive and potentially setting dairy on course for an upswing in fortunes, there’s no sign that the investment tide is turning away from other primary sector assets. Horticulture still holds the allure it has enjoyed for the past few years. “The shine hasn’t come off horticulture. It’s done a brilliant job through marketing channels and connecting to consumers and has succeeded in creating value by not doing much to it,” Jones says. These types of attributes have clearly been ticking investors’ boxes – evidenced by horticulture sector investor MyFarm, which noted in November that demand for horticultural investments that generate a cash return has seen it raise $102 million of investor equity since April, double the 16
make sure they’re all attractive, and also recognise they are not mutually exclusive. We can’t just end up with a tonne of kiwifruit everywhere we look – we never want just one investment solution.”
GETTING INTO AND OUT OF THE MARKET Syndex chief executive Ross Verry.
average it raised between 2016 and 2018. Penny accepts that for now, you would still expect investors to head horticulture’s way. But he says the gap is narrowing. “Entry costs into investment in kiwifruit are rising, so that is bringing the yields are down. For existing players that still tends to be doable – cashflows are strong so they are often able to fund new costs from cash. For an outside investor though, it’s becoming more expensive and yields not as good as they were two or three years ago. All that makes dairy more comparatively favourable.” Jones also notes that new investors aren’t likely to have a ‘one, but not the other’ mindset. “We need all our food sectors performing to optimum levels at all times. We need to
As we all know, it’s not as simple as a sector looking attractive to start the money flowing, and dairy has got two particular challenges that don’t necessary blight other sectors – lack of liquidity and regulatory uncertainty. Gaining exposure to land-based assets in NZ has never been easy. For dairy it has typically meant taking an active stake in the operation, which inevitably requires experience and involvement in farming. If a neutral investor ran into a multi-million dollar windfall would they dump it in a dairy farm, if on paper it looked like the best way to safeguard their capital? Let’s just say no. As well as needing know-how, investing in agri-land does not tend to offer easy exits. In an environment where more liquid assets present returns that match, let alone surpass dairy offerings, it certainly makes it a harder sell. But Covid-19 has begun to change that. As mentioned earlier, the differential on
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
"In this system, the cows are more contented, relaxed and stress free which brings us huge benefits in production and cow’s health traits” Bruce Dinnington (Invercargill, New Zealand)
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Lely Lely Lely New New New Zealand Zealand Zealand (Invercargill) (Invercargill) (Invercargill) Ph.: Ph.: Ph.: 027 027 027 558 558 558 8770 8770 8770
Lely Lely Lely Center Center Center ininin Waikato Waikato Waikato Ph.: Ph.: Ph.: 021 021 021 399 399 399 096 096 096
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Lely Lely Lely Center Center Center ininin Taranaki Taranaki Taranaki Ph.: Ph.: Ph.: 022 022 022 325 325 325 0056 0056 0056
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yields has narrowed. Meanwhile, and to some extent coincidentally, the advent of the NZ Rural Land Company, established in June this year with a mission to raise at least $75m to spend on rural land presents a step forward for new investors to participate. The NZ Rural Land Company has specifically stated that dairy farms are its initial target. With early encouraging signs of success, it is now planning to list on the NZX in December, opening the opportunity for retail as well as larger investors to get a piece of the dairy prize. A public listing will undoubtedly help solve liquidity, although others have also been working to address that problem over the last few years. Capital-raising platform Syndex has been offering investors access to assets behind the farmgate since its inception, and chief executive Ross Verry says a fair chunk of all its business has been agri-based. As part of its offering, Syndex also provides opportunities for investors to exit. Verry says Syndex is committed to improving access to assets in the primary sector, and has established a partnership this year with NZX – to work on agri. “From our perspective, if there are farming businesses that need capital for growth or a succession event, we think there are smart and innovative ways of structuring investment vehicles to help them access capital from external investors. Our job is to try and make those primary sector businesses as investable as possible, with a secondary market enabling price discovery and exit strategies. “The other benefit of Syndex’s platform is that it requires investment propositions to offer information needed to help make good investment decisions. That means greater transparency.”
UNCERTAINTY AROUND ENVIRONMENTAL COMPLIANCE
The other contemporary issue challenging the investor community contemplating dairy assets is the uncertainty over environmental regulation, which has hardly acted as a motivating force for those looking to house their spare cash. Uncertainty is the enemy for any investor, so how is the need to factor in unknown environmental compliance costs being worked through by those courting new money? Rabobank New Zealand chief executive Todd Charteris believes the weight of attention given to environmental 18
regulation has effectively acted to normalise it, particularly since the election. “I think there will be more certainty off the back of the election. A stable, single party Government should mean the direction will be clearer. That’s not to say everyone will agree with it. There will be some issues to work out, but it will be a case of getting down to the detail of what it means for individual farms.” Of course, the banks are the last stakeholders in the sector that want to see farm prices slump due to farmers being wary of spending capital to ensure their operation remains compliant, and they’re actively looking to fund projects that meet new standards.
Rabobank New Zealand chief executive Todd Charteris.
A Rabobank report released in November identified the market for sustainable finance – finance specifically used for activities which produce a verifiable positive impact on the environment or society – is continuing to grow in scope and scale in NZ to meet both governmentset environmental targets and the agri sector’s own sustainability aspirations. Rabobank sees global financial markets increasingly looking to redirect capital into businesses that deliver positive environmental outcomes, and away from investments considered unsustainable. In terms of the impact of these future costs acting as a deterrent, Penny believes they are, at a national level at least, already being priced into land values. But investors should be recognising that environmental costs are not unique to NZ dairy farmers – they will be hitting farmers in all markets. “If everyone’s costs are rising then ultimately the consumer has to bear those costs and you have to assume people are going to eat regardless. If New Zealand can
cover those costs more efficiently than rivals in Europe, United States, Australia etc, investors should be able to identify a competitive advantage – rather than a risk.” Jones agrees. “Environmental standards are what they are – an opportunity. Standards have only come about because consumers want them, and New Zealand is in a far better position than many other countries to implement them.”
GROWING DEMAND DESPITE COVID
It’s not only about getting dairy’s house in order in NZ that is raising investors' eyes. The demand side still looks very encouraging – even if all the projections of growth are being recalibrated as the impact of Covid-19 gets worked through in different markets. While China will never be far from NZ’s focus, more attention is likely to be paid to emerging markets, including those in South East Asia. Charteris’ enthusiasm for dairy’s future in NZ is as much about opportunities to meet new demand as our price competitiveness. “There’s a really growing deficit in that block of countries, and we think that deficit is going to grow from something like 13 billion litres now to 19 billion litres in the next 10 years. That represents a massive opportunity for us to supply dairy products. That anticipated demand should underpin farmgate returns for New Zealand producers, and as a result, land values.” Plenty of lessons have arisen from Covid-19 for investors, but an important one is that food producing land (and water) will always be solid, long-term propositions. There are few others like it. NZ’s role in contributing to food security and meeting the needs of a growing global population is going to be around long after we’re gone. Land and water have come into their own again, and it shouldn’t be any wonder that dairy, as much as any other food-producing sector is back in the limelight. Verry suggests looking at long-term investment trends at the moment is more relevant than ever. “Historically land and food have been good investments. They do run a little bit counter cyclical to some of the more volatile investments. But land and food has been a good hedge against inflation and they provide reliable long-term returns.” Perfect for the times.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Pasture & Forage News
December 2020
Rust-proofing tips for summer The onset of hot, humid weather is often also the time your grass can change from green to orange as rust takes hold in pastures.
Latest industry performance data confirms ryegrass ‘dream team’ for autumn sowing The latest results from the National Forage Variety Trials (NFVT) are out, and they make essential reading for any farmer weighing up their choices for which ryegrass pasture to sow this autumn. Started in 1991, the NFVT is an industry-led performance evaluation programme for new pasture cultivars created by New Zealand’s plant breeding and research companies. Results from the NFVT are also used in calculating DairyNZ’s Forage Value Index (FVI). At any one time there are approximately 40 active NFVT trials in the ground, nation-wide. Dry matter yields for all cultivars are measured seasonally, and the cumulative totals determine how high each cultivar is ranked at the end of the trial period (e.g. three years for perennial ryegrass). This year, there’s a new ‘dream team’ of ryegrasses at or near the top of the national NFVT table, and we’re proud to say they’re all from Barenbrug. In the 12 month pasture list Shogun NEA and Tabu+ are in the top rank. And for annual
ryegrass Hogan is up there too. “For Barenbrug this is a great result and shows just how strong our plant breeding programmes are. I don’t think we have ever had so many cultivars performing so well across the lists,” says marketing manager Graham Kerr. “The NFVT is a test of seasonal DM yield, and that makes it different from the FVI, which takes the NFVT data, adds predicted ME into a whole farm model to calculate predicted operating profit from cultivars on a dairy farm.” Both systems are important, but DM yield is still arguably the most important part of pasture value, however, particularly in winter, early spring and autumn, he says. The 2020 NFVT ‘dream team’ of Maxsyn, Governor, Trojan, Tabu+ and Hogan are all available through your local reseller.
facebook.com/BarenbrugNZ barenbrug.co.nz 0800 449 955 Dairy Exporter | www.nzfarmlife.co.nz | December 2020
@BarenbrugNZ
An air-borne fungus, rust spores usually attach themselves to the less healthy part of your ryegrass plants, multiply quickly and end up all over the paddock. Leftover trash from poor post-grazing residuals provides a perfect breeding ground. Rust can turn up in early summer because many grasses have grown a lot of DM leading up to this point, and in the process, they’ve used a lot of food, i.e. nitrogen. Rust is N averse. Healthy, thriving plants with some N in the system are much less prone to infection. Rust is harmless to animals, but it can reduce palatability. Do what you can to graze or cut the paddock to a nice even residual of 5cm, or 1500 kg DM/ha, removing all the herbage. Don’t let trash build up. Then wait for some moisture and apply N (20-30 units/ha). Grass regrowth will be greener and there will be little or no rust. Rust spores are a distant cousin of facial eczema spores. So managing for rust can help alleviate risk of high FE spore counts too.
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GLOBAL DAIRY NETHERLANDS
The struggle of FrieslandCampina Words by: Sjoerd Hofstee
D
utch dairy co-operative FrieslandCampina has hit financial trouble. While farmer shareholders believe that while the co-op still performs above average they complain that uncertainties in dairy farming are increasing rapidly and are worse than previously thought. Other experts say the impact of the coronavirus epidemic is the main culprit for the company’s woes. What is clear is that FrieslandCampina does not run as smoothly as management and members would like. The results of a member survey initiated by FrieslandCampina itself were presented mid-November. The conclusions are firm, but clear: more than half of the farmers hardly feel involved or feel badly involved in the cooperative. They feel the board and management do not listen to members and have a very limited sense of influence.
The co-op has been unable to make it clear to the members that extra efforts on sustainability are essential if they are to survive in the highly competitive dairy market. It is struggling with a communication problem. Increasing demands in the field of sustainability, which above all require more costs and work for very little return, are causing great annoyance. About 70% of Dutch farmers are members of the co-op and many are concerned about its financial position. Recent sales of profitable business units and FrieslandCampina's difficult search for additional financing among members to maintain equity capital have fed the concern. Two days after the results of the survey 20
FrieslandCampina dairy co-operative members are unhappy - is it Covid-19 or shareholder communications?
came out, FrieslandCampina announced a major reorganization will be launched in 2021, whereby about 1200 of its 10,750 employees in the Netherlands, Germany and Belgium will be made redundant. While FrieslandCampina is still among the top in the world in international milk price comparison, the difference with many other dairy companies has become noticeably smaller in the last two years Until 2019 the members of FC didn't have too much to complain about, apart from the fact that the milk price for many dairy farmers was simply too low compared to their costs. The coronavirus pandemic certainly has not helped. The problems facing FrieslandCampina and its members are familiar to dairy farmers worldwide. Certainly in New Zealand, major player Fonterra has also faced increasing financial headwinds and distrust among members in recent years. It is an issue seen all over the world, especially with the major players such as Milcobel and DMK, the largest dairy co-operatives in Belgium and Germany respectively. What these major European players have in common is that, from the abolition of the European Union milk quota in 2015, they had to process much more milk within a short period of time. They have a purchasing obligation and are often not as flexible as smaller players. Moderate results logically feed mistrust
Sjoerd Hofstee.
among the members of the dairy cooperatives. Perhaps much more it is the commitment to environmental sustainability that plays an important role. This is certainly the case between FrieslandCampina and its members. The management of FrieslandCampina sees environmental sustainability as essential to be able to continue to serve important customers such as Unilever. However, the co-op has been unable to make it clear to the members that extra efforts on sustainability are essential if they are to survive in the highly competitive dairy market. It is struggling with a communication problem. That will have to change quickly, otherwise the trust between members and management will drop to a new low in the coming months. With pressure on the financial results and the organisation due to mass layoffs, this is something the co-op really can’t afford.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
INSIGHT
UPFRONT MARKET VIEW
Price remains resilient Words by: Amy Castleton
New Zealand milk production was up 1.8% year on year in September on a airy commodity price milksolids basis. October production is movements were mixed in yet to be released at the time of writing; November. Prices fell 2% at the however our expectations are that we first Global Dairy Trade (GDT) will see a smaller increase in October. Soil event of the month, but increased 1.8% at moisture had largely continued to decline the second event. This leaves the average through late October and the first half of price across all GDT commodities about November, particularly in the upper half of where it was at the end of October. the North Island and that impacted pasture Demand for dairy still seems to be largely conditions. resilient, though some commodities remain North Island peak milk production impacted by the state of the global food reportedly occurred a little earlier in the service sector. month than usual, and pasture quality This is particularly evident in butter and has now turned, with pastures heading anhydrous milkfat prices, which remain into their reproductive stage rather than considerably down on year-ago price levels. growth. However a bit of rain in late Cheddar is also affected to some degree but November means there is plenty of pasture less so than the fat products, as mozzarella about, even if the quality is not as good. tends to be more used by the food service November production is therefore expected sector than cheddar. Global milk supply to be flatter, but we’re unlikely to see a fall. is also building, though this seems to Overall we still expect to see growth in NZ be having little impact on commodity milk production for the 2020-21 season. prices to date. Buyers and sellers of dairy The excellent dairy commodity prices commodities seem to be more concerned also continue to be reflected on the NZX about Covid-19 and its impacts than the Dairy Derivatives market, notably in milk volume of product that is likely to be price futures. At the time of writing, the available. September 2020 contract sits at $6.95/ United States milk production was up kg MS. This is above the mid-point of a huge 2.3% year on year in September. Fonterra’s forecast range. The NZX forecast European Union milk production was is over $7/kg MS, at $7.13/kg MS. up a smaller 0.7% (indicative at the time The September 2022 milk prices futures of writing) – while a small increase in contract is $6.70/kg MS, with some percentage terms, Europe produces a large decline in commodity prices expected enough volume of milk that even a small next season. Assuming Covid-19 gets increase can be significant. Australian under control early next year (and that is production was up just 0.2% year on a big assumption!) growing milk supplies year in September – its smallest increase are likely to weigh on commodity prices, for several months. However year to especially if there is some hangover of date production is up 2% and Australia product in storage. Even if Covid-19 is has continued to have a good season so not under control, we may see a decline expectations are that milk will continue to in demand that weighs more heavily on grow. prices with many economies experiencing large drops in Gross Dairy commodity prices Domestic Product (and 7000 thus incomes). A $6.70/kg 6000 MS milk price would still 5000 be an excellent result but 4000 there is certainly downside 3000 2000 pressure on this. 1000 • Amy Castleton, senior Sep 18 Mar 19 Sep 19 Mar 20 Sep 20 dairy analyst at NZX Agri. WMP SMP AMF Butter
US$/tonne
D
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Rethink cups on If you could cut cupping times by 1-2 seconds per cow, how much time would you save during milking? For Waikato dairy farmer Dries Verrycken who’s milking 500 cows, he can now save around 16 minutes at cups-on alone thanks to the new iCR+ with EasyStart simple lift or pull vacuum activation. That’s over 30 minutes a day and over 3.5 hours a week in this 50-bail iFLOW rotary. Meaning his cows can be back out to pasture quicker, and he can get on with other jobs. Time to rethink how you put the cups on? We can help. gea.com/new-zealand Driving dairy efficiencies? We can help.
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BUSINESS ADDING VALUE
The tale of
A two butters The (true) story of how a former global advertising guru with a passion for making patisserie and a former international banker and property investor with a passion for dung beetles may just have produced that rare prize - a New Zealand value-add dairy export brand. Nikki Mandow has the story. (Story courtesy of Newsroom). 22
nyone shopping at the gourmet Central Market grocery store in Austin, Texas last year might have been surprised to know that the middle aged man handing them a slice of bread and butter to taste wasn’t a down-onhis-luck casual retail worker, but a high net worth Kiwi businessman on a mission to reform New Zealand dairy. Former Saatchi & Saatchi global boss Peter Cullinane, better known in New Zealand as the guy that sparked that chocolate milk madness in 2014, was accompanied on those trial-by-in-store-tastings by his Lewis Road colleague and company general manager Nicola O’Rourke. The pair reckon they spent around 330 hours between them (that’s like two weeks of their pre-Covid lives if they did it non-stop) greeting, smiling, spreading, and
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
In Texas, ordinary butter costs as little as $US1.60; premium butter might be $US4-$4.50 and $US6.99 was a serious ask for Lewis Road butter, even for the Texans, the global number one consumers of butter. But it seemed they were up for it.
inviting shoppers to try their Kiwi butter. Each time Cullinane and O’Rourke succeeded in their in-store marketing pitch, a Texan customer would stump up $US6.99 (that’s more than $NZ10) for an 8oz (227g) pack of Lewis Road Creamery ‘grass-fed and traditionally churned New Zealand butter’. Quick comparison: At Countdown in Auckland you can get a 500g pack of butter for around $5.50 - about a quarter of the price, gram for gram. Lewis Road’s premium butter (250g) costs only $6.90. In Texas, ordinary butter costs as little as $US1.60; premium butter might be $US4-$4.50. Even for the Texans, the global number one consumers of butter, $US6.99 was a serious ask. But it seemed they were up for it. Central Market ordered more butter for its 10 stores and Cullinane and O’Rourke used what they learned from talking to customers there to develop mini-business cases to take to bigger supermarkets. And they made a lot of calls. Four other supermarket chains, including the Amazon-owned and Austin-based Whole Foods Market, started taking Lewis Road’s export butter, and store numbers climbed to 800. The first shipment - two pallets of airfreighted butter (“You freeze a pallet of butter, hand stack it and pray a lot no one leaves it on the tarmac,” O’Rourke says) turned into container-loads of sea-freighted butter. In the year to October 2021, Lewis Road is expecting to ship 800 tonnes (approximately 3.5 million packs) to the US; by October 2022 they hope to have lifted volumes to 1300 tonnes (5.5 million packs).
Rethink udder health Lewis Road’s GM Nicola O’Rourke says you should be able to eat butter like cheese. Photo: Nikki Mandow.
The goal is to have 3000 stores stocking the butter by the end of next year, O’Rourke says. It’s already in Australia (“they were willing to stock it at that price range”) and discussions are going on with British supermarkets Sainsbury and Waitrose. “We’ve had early interest from them, but we are certainly not going to be flying there anytime soon.”
AHH... COVID The pandemic is both a curse and a blessing for New Zealand exporters like Lewis Road, says Maury Leyland Penno, a professional director who spent 11 years at Fonterra, including as head of strategy. Getting attention for a Kiwi brand is hard in a massive market like the US. “We tend to go offshore and think we are going to punch above our weight, but traditionally consumers aren’t thinking about what New Zealand products they
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
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Driving dairy efficiencies? We can help.
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Brexit negotiations, O’Rourke says. Kiwi butter would become significantly more competitive in England if Irish butter manufacturers were paying similar import tariffs.
THERE’S BUTTER AND THERE’S BUTTER
Southern Pastures executive chairman Prem Maan.
want to buy. Capturing their attention and making them make a new buying response is hard and very expensive. “But now is a great time for NZ brands. Companies everywhere are facing a whole load of disadvantages [around Covid-related restrictions], but we have advantages as well. “We have the freedom to work together, and the world is saying ‘We want some of what they have got’.” O’Rourke agrees the pandemic has levelled the playing field. Lewis Road can’t stand in a supermarket and give out samples, but then no one can. And when no one can travel easily, a company in an end-of-the-world place like New Zealand isn’t more disadvantaged than someone closer. The other positive for the company is that shopping - particularly supermarket shopping - has a bigger role in people’s lives now so many other activities aren’t available, she says. “US consumers are treating the supermarket as a playground; they are staying there longer. That’s given us an uplift.” In the UK, future success could depend partly on Prime Minister Boris Johnson and his
Their butter - uncultured, production-wise
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O’Rourke says New Zealanders should get the chance to buy Lewis Road export butter early next year, if we are prepared to pay the premium. What? Don’t we have Lewis Road butter already? Aren’t we spreading over here what they are spreading over there? The answer is No. The packaging may look similar, but their Lewis Road butter and our Lewis Road butter is quite different - in butter terms. That’s where the story gets even more interesting, and where our second middleaged man enters the Lewis Road picture. Remember the first one is Peter Cullinane, the former Saatchi & Saatchi ad agency supremo who founded Lewis Road out of a converted shipping container in 2012 because he hated New Zealand’s “mucked about with” butter being sold basically as a commodity product. Cullinane wanted to make a butter that tasted as good, and made pastry and patisserie, as well as European butters. He’s also a former university dropout who went on to get two postgraduate degrees from the University of Auckland and an MBA from Harvard and has been a director of SkyCity and chair of NZME. Prem Maan, the new(ish) owner of Lewis Road, has a totally different, though no less interesting back story. Born in Fiji and educated at the University of Canterbury, Maan worked in banking and finance for a few years - Banque Indosuez, Deutsche Bank and Citibank, mostly in New Zealand - before founding an investment company, Maan Martin Capital in 2001, with his wife Lynette, and then an investment fund called Foundation Capital. The Maans targeted institutional investors, often from overseas, and they were particularly interested in housing projects. One of the offerings was the country’s first Islamic home mortgage programme. In total, Foundation Capital raised $250 million, but then in 2007/2008 the GFC hit. Times got tough as the government moved to guarantee banks and finance companies but wholesale funds such as Foundation
were left unguaranteed and found it hard to issue new bonds. But at the same time farm prices fell - and Prem Maan’s direction changed completely. “I had always looked at setting up a farming fund, but in the past people used to farm for capital gains. We wanted farms where we could get cash returns. In 2008/2009 we saw an opportunity to set up a fund.” They set up dairy farm fund Southern Pastures Limited Partnership in 2009 and bought the first farms in 2012. These days, the company owns 20 farms in Canterbury and the Waikato. “Our key driver was to buy farms with a long term focus - where we could improve the land so when we exit we leave a better footprint.” Of course, every farmer and his dog is talking about sustainable farming practices, but Maan says he wants to be a leader and a motivator in the field. He has coined the term ‘inter-generative farming’ - farming for other generations - to describe what Southern Pastures is trying to do. “Soil can hold two times the carbon of the air and plants combined – yet modern
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
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INTEREST*
P.A. INTEREST* OVER 12 MONTHS Peter Cullinane in the Lewis Road head office kitchen. Photo: University of Auckland.
farming methods are releasing carbon, and even more harmfully, water vapour into the atmosphere. “We need to find ways of farming our way out of climate change and climate volatility. And in New Zealand’s case, not through reduction in production humanity needs to eat and New Zealand is already the most efficient pastoral farmer in the world by a country mile – but through more sustainable farming methods.” At a practical level, Maan has a passion for earthworms and dung beetles - he has a box of specimen dung beetles and their dung balls in the office to show to other enthusiasts. He started trialling dung beetles on his farms four years ago as a way to improve soils and reduce methane outputs.
But carbon-neutral, methane-reduced dairy farming is not just about a more sustainable world and climate change, Maan says. It’s also about improving farming profitability and moving towards higher value export dairy. “Our key investors are pension funds - it’s a long term investment for them,” Maan says. “Our policy from the start was to make the best, healthiest dairy products in the world. For us it starts with the best soil, then the best grass and the best cows, from that we want to make the healthiest milk, then the best butter.” Best butter that costs $US6.99 for 227g.
THAT OLD CHESTNUT: VALUE-ADDED DAIRY In 2018, the Ministry for Primary Industries issued its final project report on a wide-ranging, seven-year, $170 million, innovation programme led by DairyNZ and Fonterra and called “Transforming the dairy value chain”. The main aim was “to enable a transformation of the dairy sector creating increased value for New Zealand by 2025 through game-changing innovation and research in the dairy value chain
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
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that delivers economic, social and environmental benefits, and ensures New Zealand’s ongoing success as a dairy industry world leader.” In economic terms, the project was aiming for an additional $2.7 billion in benefits to New Zealand every year by 2025, and one of the four key goals was “enabling innovative but sustainable development of new products”. The final project report, and a followon review in November 2019, showed good results in several areas, including a significant increase in on-farm productivity. But value-add export brands? Not so much. The report talks about some cool new Fonterra mozzarella and UHT creams, and new infant and adult formulas under the Anmum and Anlene brands, also made by Fonterra. But as I wrote in a story about Fonterra in 2018 (Fonterra fails - again - to cash in on dairy value-added), and Newsroom’s Rod Oram wrote in his December 2019 story Fonterra: a lesson in how to sell your future, our main dairy producer has struggled to get nearly as much of its production into higher value food service and consumer products as it would have liked. “Its financial performance and its rewards to farmers are still fundamentally driven by commodity booms and busts,” Oram says. Even some of our more nimble dairy companies - a2 milk, Synlait, even Tatua - are arguably not doing enough in the branded export space.
A POINT OF DIFFERENCE Branding and marketing a premium product is something Lewis Road has done pretty well - in the
Our butter - cultured
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local market at least. Although the initial advertising spend for the chocolate milk was minuscule - $20,000 - the company has used social media well, and with all its products has tapped into mid- to high-socio economic consumers and into the growing retail trend away from mass market products and towards craft, authenticity, health and wellness. The Lewis Road/Southern Pastures export butter takes the branding one step further, into supply chain transparency, and authentication of claims, Maan says. Early on in the process, Southern Pastures developed its own 10-point ethical and healthy production certification, which it is working with governmentowned food standards body AsureQuality to convert into a full-blown accreditation programme over the next 6-12 months. The 10-star commitment is written on the back of every pack. Grass-fed cows, GMO-, palm oil and hormone-free production, 365-day free range cows and “care for the environment, our people and our animals”. Maan says the company realised there were a bunch of consumers in the US willing to pay a premium for ethicallysourced and fully-traceable products. And before teaming up with Lewis Road it found a dairy company, Westland Milk Products, willing to make its butter, even though that meant cleaning out the whole production system between non-Southern Pastures and Southern Pastures butter batches to make sure no non-traceable milk snuck in. Which is part of the reason the butter is so expensive.
IT’S ABOUT THE STORY But Southern Pastures also needed a brand - which is where Lewis Road came in. It bought a 25 percent stake in the creamery in 2017. Pat English is a former NZ Trade Commissioner in China, now working as an international trade consultant, including as chair of the Agricultural Growth Partnership for MPI. He says with many exporting companies he’s seen, success isn’t just about the innovation, it’s as much about the story that goes with it. “There are a whole load of trust factors in there. People see the wonderful images of New Zealand and they translate it into the whole product.”
Southern Pastures 10-point ethical and production certification commitment is written on the back of every pack.
True, says Maan, but as an exporter in a crowded market like US dairy where there might be two dozen butters on the shelf, you’d be foolish to rely too heavily on New Zealand’s reputation for your unique selling point. “You have to sweat ‘Why am I different and why would people be spending so much more on my product?’ Brand New Zealand is quite far down the list. “We targeted the new conscious consumer. People want to know where your product is really from, is it really sustainable, is it ethically sourced, how can I validate that?” The number one target market for Lewis Road in the US is millennial mums - mothers aged from the mid-20s to the early-40s. Maan says research suggests 25-30 percent of these millennial mums - or rather moms - might be in an income bracket to choose a more sustainable product - even if it’s more expensive. “These millennial mums want to know they are making good choices, not just buying great tasting butter. When they switch brands they might be OK with paying more, but they are looking for validation they have a better product carbon neutral, or a B-corp [a company balancing purpose and profit], or one that comes with certification.”
ONE COMPANY, TWO BUTTERS Which is part of the reason why the Lewis Road butter in our supermarkets is different from the US one. The original Lewis Road butter takes
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Southern Pastures sets store by its soil, its grass and its cows. Photo supplied
milk from a range of suppliers and mixes it together - for an individual pack of butter you can’t be sure exactly what sort of grass or feed the cows have eaten or whether they have been in or outside. Whereas all the export butter comes from milk Southern Farm Pastures farms, and everything is tracked, Maan says. But that’s not the only difference. The two products are also quite different butters. Peter Cullinane’s Lewis Road butter the Lewis Road we get in supermarkets in New Zealand - is what is called a ‘cultured butter’ - or sometimes a ‘European-style’ or a ‘lactic’ butter. The cream is mixed with lactic cultures to trigger fermentation (like with yogurt), and then churned. That gives a different taste to normal New Zealand butters, the European flavour Cullinane wanted. It also gives a high butterfat content that produces great results in baking. Maan didn’t want that for the US market. He went for standard non-cultured butter, but adapted the soil, the grass and the cows to produce what he claims is the best butter in the world, in terms of health. In particular, he says the Lewis Road export butter has a good balance of omega-3 and omega-6 fats, is high in conjugated linoleic acid (believed to have health benefits) and higher in certain vitamins than other butters.
THE FUTURE Having progressively increased its Lewis Road stake to 50 percent after 2017, Southern Pastures finally took full control last month and Cullinane stepped down from the company. Newsroom approached him for this story, but he was off fishing. What of the future, I ask Maan and O’Rourke, over crackers and slabs of butter as thick and yellow as cheese. “The next stage is to invite more farmers to join us, as we will need more supply,” Maan says. “Once we get to Britain, it becomes very exciting. The New Zealand provenance story becomes very useful there, as our dairy carbon footprint is significantly lower than the Irish. “It depends on our dear friend Boris.” In terms of other products, the company is trialling 10-star certified flavoured butters. Ghee (clarified butter which has the milk solids taken out) is a potential next product. “Ghee isn’t huge here, but it’s huge in America,” Maan says. “It’s shelf-stable, so you don’t have to keep it in the fridge. And it’s regarded as a non-dairy product in the US, so people on a dairy-free diet can use it.” Like in their butter coffees - or the branded version, the Bulletproof coffee. Apparently it’s all the rage in America... On the other hand, the Americans won’t
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
be getting Lewis Road chocolate milk - too short a shelf life. But maybe ice cream. Lewis Road is trialling that at Central Market at the moment, but without the 10-star certification (which the ice cream doesn’t have at the moment), persuading the Americans to part with $US12.99 for a small tub is a stretch, Maan says. “We’re looking at making a 10-star highprotein ice cream, but it’s still early days. That would have more export potential. Otherwise you are just competing on flavour and indulgence - and that’s the same market as everyone else.” Business commentator and Newsroom columnist Rod Oram says whether Lewis Road has what it takes to produce that elusive elixir - a value-add New Zealand dairy export brand - remains to be seen. “There are three key tests for a pure brand: the margin they make over their competition, their strong customer loyalty and whether they are spread by word of mouth,” he says. All three could apply to Lewis Road chocolate milk, but can the company repeat it with export products? And if it does, will it make a difference to New Zealand’s 20 billion litres of milk a year, most of which is sent out of the country as commodity products? Maan says Southern Pastures is inspired by the successes of the New Zealand wine industry. “There’s a whole lot of niche players, some of which are actually very large. Selling their wine is a branding exercise. “Part of the problem for dairy is because we produce so much, we’ve focused on just trying to sell it all. At Lewis Road we’ve focused on just trying to sell a small part for a premium price.” He says while any export success for Lewis Road isn’t going to make a difference to New Zealand’s overall value add problem in the short term, he hopes it could change attitudes. “I’d like to think we could make a difference. Not in terms of volume, but leadership. We are trying to show the way - that there’s a path for high value New Zealand branded and traceable dairy products being sold in overseas markets. “We hope other farmers will join us if we get some volume, but at the moment we are happy to share our learnings with the dairy industry - even our competitors. “Our journey has just begun, but it’s going well.” 27
BUSINESS DBOY
Living frugally pays dividends Why are a highly indebted Waikato couple “excited” about paying down debt? Elaine Fisher has the answer.
P
aying off debt may sound mundane and boring but for dairy farmers Karla and Gavin Coxon of Putaruru it is exciting. “Normally you get excited about buying machinery, or maybe a runoff, but now we are focused on paying down debt which is exciting because by doing so we can increase the resilience of our business,” says Karla. The couple, who were finalists in the 2020 Dairy Business of the Year awards, say the world economy and environmental legislation creates uncertainty around future dairy returns and land values. Opening their business up to the scrutiny of the awards system revealed that while they were doing well in most aspects of their business, they were also among the 28
most indebted per kilo of milksolids (MS) of the finalists. “Reducing our debt and having a good cashflow will mean more tax and GST to pay but we do believe we have to get to a safe level of debt because there is a lot of uncertainty around future payouts and the volatile land prices. I feel our capital land values may be at risk.” Gavin and Karla also have concerns that legislative changes may limit how much milk they can produce, impacting debt repayment. “It’s quite scary. We have been focused on increasing production and if we have to cut back intensity that will have an effect on how we run the farm and most certainly return on assets. I am not keen on going back into the cowshed,” says Karla.
Without taking on significant debt Gavin and Karla could not have bought the first 79ha of their current 157ha farm in 1998. To do so, they borrowed 100% of the price for the former rehab farm on Old Taupo Road. They describe it as an ideal first farm in need of care and attention from owner operators. They brought with them the 230 strong herd Gavin had been sharemilking with, which included some of his father’s pedigree Holstein Friesian cows. “When Dad sold his herd they went for above average prices and I could only afford to buy two, but it was a start.” Karla, who grew up on a farm at Eureka in the Waikato, began a horticultural apprenticeship with the Hamilton City Council soon after she left school working
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Left: Team photo: from left Cory Osborne, Shontelle Wilson, Gavin Coxon, Karla Coxon, Myles Parkinson, and Hayley Porter-Samuels. Right: While Karla Coxon seldom milks cows now, she is still hands on with calves on the farm she and husband Gavin own near Putaruru.
in the Hamilton Gardens, including three months in the office helping draw up landscape plans for the gardens, and time in the nursery. “Now we have time and resources to put into planting out areas of the farm, Karla is in her element when it comes to plantings,” says Gavin. Time and money was stretched in the early days of farm ownership. As well as bringing up a young family, Gavin and Karla ran the farm and carried out milking together in the 14-a-side double-up shed. “The kids came to the shed with us. I built them a play area, giving them a warm water bottle on frosty mornings, eventually putting a heater in the roof for them. They didn’t mind and all are still interested in the farm,” says Gavin. “To be honest, while taking your children to the shed was quite common for our parents’ generation, 20 years ago I didn’t know many mums who were milking fulltime,” says Karla. For the first year the family recorded a taxable income of around $14,000, causing the IRD staff to question how they survived. The answer was living frugally; meat from the farm and a great home vegetable garden. “Even now family days, when we enjoy full home-grown food on our plates with vegetables from the garden and meat from the freezer, are proud times and our kids enjoy that too. In fact, all of them are interested in growing their own food,” says Karla. Oldest son 23-year-old Ryan is a professional rugby union player for Tasman in the Mitre 10 Cup competition and for the Chiefs in Super Rugby. His position of choice is prop. Daughter Nicole (21) is currently studying adventure tourism management in Queenstown, and younger brother Hunter (16) at boarding school in Cambridge has plans to take
up an electrical apprenticeship. Buying a neighbouring farm in 2009 allowed for increased herd numbers on the rolling to steep country Gavin says he wouldn’t swap for any other. The soil is free draining and fertile Mairoa and Tirau ash and the area fared better than many other parts of the Waikato during the 2020 summer drought. “We fed out grass silage from March 1 but then some rain started around March 20, right in the middle of autumn calving. The pasture came right quickly and we had such a good autumn we produced 22% of our seasons production from March 1 to June 1st 2020, and that has kept going. Our production graph has recovered well,” says Gavin.
FARM FACTS:
Owners: Gavin and Karla Coxon Location: Putaruru Area: 157ha – 147ha milking platform Cows: 500 – 3/4 are pedigree Holstein Friesian Effluent irrigation: 40ha Supplement grown onfarm: 40ha grass pit silage Supplement bought in: 40ha grass pit silage. Hay and balage as required, all from runoff, and meal is 724t meal blend purchased Farm dairy: 44-aside herringbone with cup removers
OLDER PASTURES PREFERRED Gavin says it’s nine years since a paddock was resown. “We believe our older pastures don’t need to be resown or cultivated and we are happy with our pasture harvest figures. We have grown the odd maize crop in the past and used new pasture species then, but just prefer the older species.” This season (2019/20), pasture eaten has risen half a tonne to 14 tonne, largely due to a good growing season. Higher grazing residuals left by winter milking cows, instead of very low residuals by dry cows, allowed pastures to recover quicker and
caused much less pasture damage in the winter. “There are no more than 100 dry cows on the farm through winter. Cows come home from the runoff two weeks before calving. Last spring we did not go under a 24 day round. Grass grows grass, and pushing that creates a surplus which is an integral part of our winter milk programme. We don’t use maize silage these days,” says Gavin. Palm kernel is fed to the herd, and Gavin and Karla monitor amounts carefully to ensure they don’t exceed Fonterra’s limits. 29
DBOY 2019/20
KEY PERFORMANCE INDICATORS
Milk production: 453kg MS/cow, 1535kg MS/ha Return on capital: 5.1% Operating profit margin: 33% Operating profit: $3,641/ha Cost of production: $4.76/kg MS Operating expenses: $2.37/kg MS Pasture harvested: 13.1 DM/ha Pasture % of feed: 70% Labour efficiency cows/FTE: 114 Environment Score: 6.8/15 HR Score: 6/15
Left: Feeding her family home grown produce has always been important to dairy farmer Karla Coxon.
GOING TO WINTER MILK Winter milking wasn’t on Gavin’s agenda five years ago because he felt it would be detrimental to their business. “After one season of winter milking I said I wouldn’t continue unless I bought a runoff. And then three years ago I went and bought one. This offers us control of winter grazing and extra grass silage as required. “The original plan was to graze 100 heifers and 50 beefies but our consultant Andrew Gould suggested using the runoff to support the home farm, grazing 100 heifers and lifting milk production by 40,000 milk solids.” As Fonterra suppliers they earn a premium for their winter milk but Gavin says the biggest financial benefit is the days in milk for the herd.
“The lactation used to be 260-265 but now it’s 300 days. Heifers calve on June 20 instead of August 1. This means we can break in the heifers alongside the winter milk cows and give the heifers an extra six weeks between calving and their second mating.” Around three quarters of the herd is now pedigree Holstein Friesian. “This is a totally commercial herd and the cows have to pull their weight, but I do enjoy looking at a well-bred animal,” says Gavin. Gavin has more than an eye for a good cow. Some of his herd are part of the LICsponsored, Holstein Friesian Discovery Project, which is using advanced breeding technologies to develop top cow families and breed bulls for the AI industry. After Gavin has selected the bulls to
STAFF SET WORK ROSTERS
PRODUCTION STATS • Production has increased by 88,000kg MS since 2003/04 • 2003/04 - first year of five years leasing second farm and production over both was 143,900kg MS • 2010/11 season - meal feeder had been installed for 2 years and production was 168500kg MS feeding small amounts of meal • 2013/14 season - biggest increase in production by 41,000kg MS owing to higher feed inputs • 2019/20 season - continual increases to produce additional 23,500kg MS • Seasonal total production increased by 20,000kg MS over the 3 years since winter milking started and purchase of runoff • Aim now to achieve 250,000kg MS in one season.
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use for the season he provides LIC with a list of traits he considers important for the offspring including production, temperament and body conformation, and the computer system “custom mate” matches cows with bulls, also avoiding inbreeding. “We pick which bulls will suit our cows, and with 300 to 400 cows to mate we usually have two choices on custom mate. I know the weight of the sire and if it’s too big for a particular cow, I’ll select another one. Temperament is important. In 15 years we have only had to cull one cow on temperament.” Karla says she and Gavin would probably tolerate a “slightly stroppy” high producing cow in the herd, but they won’t put their staff in harm’s way with an unruly animal.
The couple value their staff highly; Cory who has been with them for 18 months, and Myles employed since July. Relief milker Shontelle frees Gavin or Cory up from the milking roster, allowing time for farm maintenance and runoff management. Staff set their own work rosters, and enjoy winter milking. “We asked them how they wanted to be rostered and they came up with a system which gives them every third Monday and Tuesday off and every third weekend off. I’m part of the
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Prevents Facial Eczema The PETA Zinc Dispenser nser PETA Zinc Dispensers accurately dispense zinc sulphatee in drinking trough water providing onomical the most efficient, economical way to prevent facial eczema. ural Developed by agricultural scientists at Ruakura Research mount of Centre, the correct amount d treatment is dispensed per-animal per-day. 24 hr & 48 hr models available. ough and Simply place in the trough the job is done.
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roster too and every week, Wednesday to Friday, the whole team is onfarm, which is a great time to get jobs done or sort out any issues,” says Gavin. “We don’t skimp on the time off for staff and are always open to negotiation,” says Karla. The dairy was upgraded in 2016 to a 44-a-side with cup removers. The shed works well now and easily handles 500 cows at the peak. Regular soil tests inform their fertiliser decisions, which are made in consultation with the Ballance rep and Andrew Gould. Sulphurgain or PhaSedN is spread in autumn and Pasturezeal G2 Balancer in spring. “I have bought a fourtonne spreader but mostly a contractor applies the fert. If we need to get it on but conditions are too wet, I don’t hesitate to bring in a helicopter.” Now Gavin is not milking so often,
he has time to consider other aspects of farm improvement, including retiring and planting out areas. “We have a lot of rhyolite rock, which can be good on races, but some of the outcrops are quite dangerous for staff and cows so we are retiring them and putting in native trees.” Aesthetically it’s an attractive farm with a rolling to steep contour and, Karla says, is still after all these years a work in progress. “This is our lifetime’s work and our aspirations are for it to carry on as a profitable business when we finally step away so it can continue to look after our family, our staff and the service businesses we use. If we can achieve that, and step back from the day to day running of the business, it will be a very proud moment.”
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
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Dairy Exporter | www.nzfarmlife.co.nz | December 2020
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see the advertisements pop up on my screen, I remember the farmers who explained both why they farm, and what is important to them. These stories and values are helping show our communities who we are, what we do and why we do it. This will help grow understanding of how we farm in NZ and why we should all be proud of our farmers and the dairy products we produce. But, the most important thing about Rise and Shine is reminding all our farmers that they should be proud of what they do every day. Our farmers create nutritious food, contribute to our economy and have become the world’s most sustainable dairy farmers – that is something to be proud of. But we also shouldn’t take it for granted. We should continue to strive to be the world’s best. • More? visit riseandshine.nz
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
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SYSTEMS SUSTAINABILITY
Matt Ward (right) with Coringa Park farm managers Josh Wardell and Louise Spowart. Josh and Louise have grown from being Scottish back-packers six years ago with little knowledge of Kiwi pastoral farming, to becoming highly knowledgeable managers of pastures.
Squeezing out the nitrogen Farming in an area where cutting nitrogen leaching losses is already a major goal gives added impetus for a team in Mid-Canterbury. Anne Lee reports.
M
att and Amanda Ward’s expansive 2140-cow dairy operation in Mid-Canterbury is among hundreds of Canterbury farms looking hard at options to drag the final few kilograms of nitrogen fertiliser out of the system so it can meet the Government’s new nitrogen cap by next year. The 571-hectare Coringa Park, 14km south west of Ashburton, is in the Hinds water zone – where farmers have already been working hard on strategies to hit the arguably more meaningful goals of cutting nitrogen leaching losses. In the Hinds area, farms - other than those covered by irrigation schemes such as 34
MHV Water - must slash annual potential nitrogen leaching losses by more than a third (36%) by 2035. Within the next five years those losses must be down by 15%. Coringa Park draws water from both MHV Water and a groundwater consent. Matt and Amanda don’t shy away from the need to cut nitrogen losses. “We know nitrate levels in the ground water around the district are too high. There’s no question we all have to be doing what we can to fix that,” Matt says. It’s their water and their community too, he says. That’s why they’ve joined in DairyNZ’s Meeting a Sustainable Future project where more than 40 farmers are working with
DairyNZ and consultants to identify what they can do to reduce nitrate leaching and limit environmental impacts and then share their experiences. Coringa Park was converted eight years ago from dairy support with Matt and Amanda joining with Matt’s parents Rod and Jo, from Te Awamutu, to form an equity partnership. Matt and Amanda had previously been equity managers of another large-herd property near Rakaia. It was there, in 2009, just five years after he graduated from Lincoln University with a Bachelor of Agricultural Commerce, that Matt won the Canterbury Dairy Industry Awards farm manager of the year title.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Left: Matt Ward addresses a field day as part of DairyNZ’s Meeting a Sustainable Future project to identify what the 40 farmers involved can do to reduce nitrate leaching and limit environmental impacts. Right: As a highly profitable unit, Coringa Park easily sits among the top 10% of Canterbury farms across a range of metrics. Now the team are working towards being highly nitrogen efficient.
Matt’s continued as a high performer with Coringa Park easily sitting among the top 10% of Canterbury farms across a range of metrics. The ability of the operation to turn feed – home-grown and bought-in – into milk makes it highly efficient and profitable but over the past three seasons they’ve also added an environmental lens to how they view success. Last season their operating profit was $7189/ha compared with the Canterbury owner operator average in DairyBase of $4014/ha. At $3.95/kg milksolids (MS), operating costs are almost $1/kg MS under the DairyBase average of $4.91/kg MS. Like many Canterbury conversions, Coringa Park - at 320kg nitrogen (N)/ha/ year (prior to 2018) - had been a relatively high user of nitrogen fertiliser. Good response rates make it a highly cost-effective way to boost feed. “But I think when you get on a fast round and you’re following the cows with reasonably solid rates of nitrogen then all of a sudden you’re applying a lot,” Matt says. In the 2018/19 season they embarked on a concerted effort to reduce nitrogen fertiliser use and limit opportunities for nitrogen to leach down through the soil profile without impacting production.
Fertiliser planned through to January 2021 Month
N-P-K-S
August and September
Follow cows with 99kg/ha PhaSedN QuickStart plus 1kg/ha NutriMax selenium
31-0-0-17
October
DAP at 200kg/ha
35-40-0-2
November
Sustain 25K at 125kg/ha
29-0-31-0
December
Sustain at 40kg/ha, may skip paddocks twice grazed
18-0-0-0
January
PhaSedN at 75kg/ha
19-0-0-21
They took a closer look at when and at what rate the nitrogen was being applied and managed to drop an immediate 84kgN/ ha/year less. “We didn’t really see a noticeable drop in pasture production at any particular time through that season. “It wasn’t something we picked up in our measurements and we didn’t see any changes in (pasture) quality or production,” he says. That indicated they were likely wasting a chunk of the nitrogen they were putting on, he suggests. “When we were putting on nitrogen in the high 200 rates, each application was going on at around 80kg N/ha – now that’s back to 50kg.” Last season their total nitrogen use lifted slightly again because Covid-19 meant it was difficult getting culls off and extra feed was required.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
This season they’re aiming for fertiliser nitrogen use of 220kg N/ha and have sat down with their fertiliser rep and drawn up a set plan. “We’ve made some changes in August and September. Where we might have put N on to paddocks with low cover before we graze them – we haven’t done that this season. “We’re looking at dropping out a summer application too and at this stage we’re thinking that any paddocks we graze twice over that month won’t get any N after the second grazing.” DairyNZ environmental change specialist Katherine McCusker has been working with Matt as part of the Meeting a Sustainable Future project to investigate different management options for reducing their environmental footprint. “Cutting out an application over the hot summer months when you’re really not 35
Meeting a Sustainable Future project farmers are learning from each other.
going to get a good response can give you a significant cut without hurting production. “It’s also when clover is active and can be fixing nitrogen.” Matt’s paddock records show both fertiliser applications and pasture production and Katherine says these can help show where the best responses are coming. “We can see some paddocks are getting up around 300kg N/ha and others are getting under 200kg N/ha but with the 190kg N/ha rule that flexibility will be lost,” she says. The farm puts effluent out through it’s pivots and with it spread so widely and thinly there’s no real opportunity to cut nitrogen rates on effluent areas. To counteract any reductions in pasture growth from reducing nitrogen inputs, Katherine says farmers should be looking
36
at other areas within the system that might not be operating efficiently or effectively. Matt’s made some relatively simple fixes in the irrigation system to get good gains for pasture production. He says large pivots, such as their 800m pivot, are known to be less efficient at applying water on the outer ring. “That’s compounded if the pressure isn’t correct because it doesn’t push the water right out (to the end). The simple bucket test revealed they weren’t getting the amount of water they should have been on the outside ring. “We were probably letting the pressure get a bit low in our mainline so we put some strategies in place so when the pressure dropped below a certain level, we could isolate that part of the mainline and use our pumps to make sure the pressure stayed up so the pivot operated correctly.”
They also put more emphasis on managing irrigation scheduling based on the soil moisture probes. MHV Water farmers are all subject to audit of their farm environment plans by the scheme’s independent auditors. Coringa Park earns a “solid A grade” audit. Matt says the bucket tests required as part of the audit are worthwhile. “It’s another tool or piece in the puzzle. It does show up any deficiencies in your system but you still need to be doing other things like regularly looking right along the pivot for any blocked nozzles or ones that aren’t spinning and keeping an eye out for any dry rings starting to appear in the paddock.” The MHV Water irrigation water arrives at the gate in a pipe under pressure now that the formerly open race gravity fed system, that’s part of the larger Rangitata Diversion Race (RDR) scheme is piped. “It’s in our best interests to use that water first rather than pumping it 100m up to the surface from the groundwater and paying that electricity. “We keep that in mind when we’re scheduling so after a rainfall event we might start earlier with the pressurised water and not use the ground water so we’re leaving that in the ground. “It’s a bit like managed aquifer recharge except instead of putting water into the groundwater we’re just not taking it out.” Matt says the farm is tight for water with consents to pump 180litres/second from MHV Water and 80l/sec from groundwater. They also have an onfarm storage
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
pond they fill during the shoulders of the irrigation season and add to during any wet weather periods. They can pump from that at 100l/sec and if that’s continuous will give them water for 30 days. The farm’s watered by four pivots but they only have one Aquaflex soil moisture monitoring unit. “You could argue we should have more and it’s something we may look into but we’re pretty lucky here in that the soil type is all the same – Lismore 2a.” The soil moisture is constantly monitored with the aim to keep it between field capacity and refill point so that plants have enough for growth but it doesn’t get wet enough for drainage to occur because that’s when there’s a heightened risk of nutrients being lost to groundwater. So, there’s two parts to why managing irrigation is important in managing nitrogen loss reductions – one is to ensure the system’s working well so that pasture growth isn’t limited and the other is to ensure it’s managed well so water isn’t draining down into groundwater.
PURCHASED N SURPLUS Katherine says the “purchased N surplus” metric is a good indicator of how efficiently nitrogen is being used. “It takes into account all of the nitrogen you’re bringing into the system – both fertiliser nitrogen and nitrogen in boughtin supplement and then subtracts the amount going out as milk, meat and any feed that goes off the farm.” The number can be calculated using Overseer information and Fonterra farmers are receiving it on the Environmental Report. Coringa Park has 55kg N/ha coming in as supplement and in 2018/19 had 219kg/ ha coming in as fertiliser. Last season fertiliser N coming in rose to 245kg N/ha because of the increased feed demand from culls held. “But Coringa Park doesn’t have a high purchased N surplus at either 154 kg N/ha in 2018/19 or 168 last season because it has high production. “A lot of Coringa Park’s bought-in nitrogen is going out the gate in the tanker and that pulls the N surplus number down and shows it’s an efficient user of nitrogen.” The amount of nitrogen going out in product was 133kg N/ha last season with a
Coringa Park 2017/18
Coringa Park 2018/19
Coringa Park 2019/20
Canterbury DairyBase 2019/20
Milking platform (ha)
550
550
550
257
Peak cows milked
2120
2139
2140
965
Coringa Park physical performance
Liveweight/ha
1812
1840
1868
1820
BW
81/45
88/44
125/51
NA
PW
117/63
128/52
159/51
NA
Kg N applied/effective ha
320
236
252
223
kg MS/ha
1824
1848
2047
1795
kg MS/cow
473
477
526
478
MS % of liveweight
101
100
110
99
Days in milk
275
280
275
269
Pasture and crop eaten (t DM/ha)
15.8
16.5
16.8
16.0
Imported supplements (t DM/ha)
2.8
2.1
3.3
2.3
Dry cow feed (t DM/ha)
2.9
3.3
3.0
2.7
Total feed eaten (tDM/ha)
21.4
21.9
23.1
21.0
2017/18
2018/19
2019/20
Canterbury DairyBase 2019/20
Gross farm revenue ($/ha)
13,292
12,770
15,227
12,333
Operating expenses ($/ha)
7359
7726
8088
8319
Operating profit ($/ha)
5933
5044
7189
4014
Operating expenses ($/kg MS)
4.03
4.18
3.95
4.91
Coringa Park financial performance
lot of Canterbury farms sitting about 100110kg N/ha/year, Katherine says. Pasture and crop eaten is 16.8 tonnes drymatter (DM)/ha with imported supplement about 950kg DM/cow of barley, contracted through a long-term relationship with a local grower and pit silage, bought as standing grass. Efficiency comes from a strong focus on pasture management and turning as much feed, both grown and bought-in, into milk. Farm managers Josh Wardell and Louise Spowart run a farm team of 10 people across the four-herd system and measuring, monitoring and measuring again is the name of the game. The pair are originally from Dunfermline in Scotland and arrived on the farm six years ago as backpackers with little knowledge of Kiwi pastoral dairying. They’re clearly fast learners. Pre-graze covers and post-graze residuals are watched closely and the rising plate meter has been an indispensable tool of trade. “We get quite particular about residuals,” Josh says. If a herd hasn’t cleaned out the paddock
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
to the required 1550kg DM/ha residual it will go back in after milking with cows doing the job rather than the mower. The farm is a mix of diploids and tetraploids and over the past few years they’ve been sowing Viscount tetraploid ryegrass, white clover and plantain. Plantain could offer further nitrogen loss reductions. “Last year’s N loss here was 74. If there was 10% plantain in paddocks that would take it to 68 and if it was 20% it would take it to 62,” Katherine says. While it is a straight line interaction – the more plantain the less nitrogen is lost – getting populations up and keeping them up still appears to be challenging. But for Matt and Amanda and the team at Coringa Park that and other challenges are in their sights. “We still have a way to go – we’re not crushing everything so I’m by no means the pin up man for awesome environmental stuff,” Matt says modestly. But staying open to new knowledge and doing their best to implement, measure and monitor best practice is their modus operandi. 37
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acial eczema should really be called sporidesmin toxicity as the classic skin damage does not occur in all animals and is not always correlated with the real severity of the disease. Facial eczema is primarily a disease of the liver (sporidesmin is a hepatotoxin). The liver is the powerhouse of production in cattle and determines the health, productivity and quality of that life. Most things entering the system from the diet go to the liver first which puts it at significant risk. The skin damage associated with facial eczema is a major welfare issue but it is really a side effect of the reduced ‘work’ capability of the liver itself. Because of the importance of the liver to the optimum health, productivity and survival of the cow, the goal should be to prevent all and any injury from sporidesmin, the toxin produced by the spores of the fungus Pithomyces chartarum, throughout the whole life of the cow.One proven successful way of preventing much of the liver damage caused by facial eczema toxin sporidesmin, is to administer zinc at higher levels than those needed for daily life. For zinc to be most effective and for it to reduce or eliminate all potential liver damage, it must be given early enough in the risk period, it must be given at sufficient rates and administration must continue for long enough. Failure to start treatment early enough, ideally as counts begin to rise (or just before) means that the scene is set for much more severe damage to occur than necessary – this is a cumulative problem. Lots of small individually insignificant ‘insults’ add up, often to just as much damage as a single large hit. Don’t delay, but begin at low levels. Avoiding early damage and already having some zinc in the system makes it much easier to respond to very high counts or a sudden rise. It is the young spores of a rising count that are the most dangerous.
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Using zinc for facial eczema prevention Zinc oxide and Zinc sulphate are the two most commonly used forms of zinc. Zinc oxide is an insoluble powder, zinc sulphate is water soluble and comes as either zinc monohydrate or zinc heptahydrate.
Supplementation
Begin early enough, even if at 25-30% of standard rates. This is one of the biggest causes of failures. You can always increase or decrease rates in line with spore count and risk, you cannot fix liver damage, nor is it easy to get very high doses into animals when counts have already risen to dangerous levels. Use a method that is convenient, reliable and delivers the correct amount of zinc to all animals, without risk. While it seems simple, water treatment is rarely well done. There are a number of problem areas, including palatability. Put some zinc sulphate in water at the concentration you expect your cows to drink it and taste it. Good luck! Anything that reduces total water intake or changes drinking behaviour will affect feed conversion efficiency negatively. While there are obvious issues such as water leaks and lower consumption in wet weather, too many New Zealand farms simply do not have enough trough space. For inclusion in PKE, PKE blends, meals, Water systems have a lot of dead space, water grains or silage which needs to be primed before cows get any zinc Delivered through in-shed feeding systems, in the paddock – there will be hundreds of metres mixer wagons or dry mineral dispensers of piping, plus untreated water already in troughs. Fed at a rate of 200g/cow/day (based on It can be days after the start of treatment before a 450kg cow) animals actually consume the required levels of zinc Your total Zinc requirement for the facial (if ever). This is often too late. Sometimes not all eczema season water sources are being treated, or animals look for Available through all more palatable water such as puddles. good feed companies As always, the fewer unpalatable additives in and rural merchants water, the better – even flavourings have limited long-term effectiveness. Mono and heptahydrate forms can get confused resulting in inaccurate dosing.
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Failure to start treatment early enough, ideally as counts begin to rise (or just before) means that the scene is set for much more severe damage to occur than necessary. Zinc oxide is usually a better option but again it’s all about starting early enough and ensuring all animals get the correct daily dose. Zinc oxide can be drenched, which in itself is physically demanding. This is not always an easy product to keep in solution and is not always compatible with other compounds of the drench mix. While daily drenching ensures all animals get zinc, usually all animals get the same amount daily regardless of size or need. As with water, this means that it is possible to see both zinc toxicity and facial eczema in the same mob at the same time. Zinc oxide can be added to feed and in many cases as feed intake is determined more by cow size and need, a more even protective level of zinc is achieved. Zinc oxide is a powder – it can be unpleasant to handle, especially in windy conditions, which means it needs careful mixing and can separate out.
For conventional wagons and feed troughs, (eg; palm kernel troughs), some physical effort is required to get good distribution, which is not as easy as it seems with small amounts of powdered zinc oxide. Powders added to in-shed systems mean unpleasant dust in the feed which cows do not like. Powders in feed can settle out both before and during feeding, so not all ‘mouthfuls’ contain the same amount of zinc. These problems can all be overcome by producing the zinc oxide in a granule. As an added bonus, granules can be made up to contain calcium (reducing subclinical or clinical hypocalcaemia issues), salt (increasing palatability) and magnesium with all of the minerals mixed together in a predetermined correct ratio. Given a standard amount of zinc oxide per kilogram of granules, it is easy to calculate daily requirements. More significantly granules are easier to mix, are more palatable, don’t settle out and can be used in all types of feed systems for all classes of stock. Granules can be premixed into feed prior to delivery or added on farm. Mineral Boost Zinc is ideal for this purpose. • This is an abridged version of Sue Macky’s article, for the full content or more information please call MineralBoost on 0800 466 736 or visit www.mineralboost.co.nz
SYSTEMS DIVERSIFICATION
F
Going bananas a good fit
Diversification into growing bananas for the Auckland market looks promising for a Northland dairyfarming couple. Chris Neill has the story. 40
or Ross and Karen Potter the transition in 2008 to dairying near Whangarei, after some 20 years with the forestry industry in Kaitaia, was motivated by a combination of personal and family objectives. After seven years of 50:50 sharemilking they purchased a property adjoining their leased dairy farm to milk 400 cows on clay hills close to the city. This gave Karen good options for off-farm work and Ross was in his element with his cows. The Potters wanted diversification in their business and their current journey started over a beer and wine with friends. Karen was looking for an enterprise she could participate in that didn’t include cows. Ross loves his cows but wanted to find another revenue stream alongside dairy that would free him up from working seven days a week and also be something he could stay actively involved in later in life. The conversation led them to investigate growing bananas and identifying their vision of “locally grown for kiwis” with no spray, no gas and no international freight costs. From this emerged their business: “Sunrise Bananas NZ”. Their research revealed a selection of banana varieties that thrive in Northland. Hugh Rose, who chairs Tropical Fruit Growers NZ, lives locally and provided early insights. Several varieties – Lady Finger, particularly Misi Luki, and Dwarf Cavendish – are the main ones growing successfully on a range of Northland soil types. While different in shape, texture and taste from the commonly imported varieties, demand for the locally grown fruit is increasing along with the supply. Sales are typically at local farmers markets, with Whangarei being supplied by small local growers. Ross and Karen don’t want to compromise the livelihood of these producers and so are focusing on supplying Auckland markets and building an online marketplace. The Northland planting season for bananas is October to March. The first planting for Ross and Karen was a scramble as their research and planning took them to the end of the season in March 2018. Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Left: Ross and Karen Potter in the banana plantation. Above: Each bunch of bananas is hung to ripen.
Peak demand in the dairy business at calving is when the bananas are at their slowest, and the different activity provides relief from routine. They feared disaster when the first 500 plants were slow to get started but they came to life in spring, and that encouraged the planting of a further 700 in October, then another 800 stems in 2019. With 2000 stems in the ground planted at 1000 stems/ha, the Potters plan to expand the plantation to 4000 stems. The need for shelter is being addressed with a pine plantation and temporary windbreak until the shelter belts grow. The initial stems were purchased at $10-$15 each but now the plantation is producing sufficient “pups” to supply their expansion and have some plants available for sale. The bananas are grown in clusters of three stems – mother, daughter, and granddaughter. When the fruit are harvested from the mother, the plant will die so it is removed to allow a generational shift and one of the many pups that grow around the cluster is encouraged to grow on. Surplus pups are removed to ensure the three stems in each cluster have sufficient water and nutrients to thrive. A stem needs to produce 42 leaves before it will flower, which takes around 18 months. Then from flowering to fruit harvest is approximately six months. Flowering can occur at any time, which means a continuous supply
of fruit to maintain markets, although growth in winter is slower. Fruit yield will be 6-10kg per bunch as the cluster is establishing; then it’s expected to increase to 15-20kg bunches at cluster maturity. When bunches are harvested the cut stems are hung in a packing shed to ripen, with the rate of ripening managed with temperature control. Bananas are gross feeders and need water in the dry but don’t like wet feet. The availability of land, water and nutrients becomes an interesting combination with a dairy farm. Ross is managing a threepond effluent system for the cowshed and able to draw from the third pond to feed and irrigate the plantation. While this is currently done with a trailer tank he is contemplating connecting to the irrigation system for more consistent feeding and watering, delivering around 50 litres per cluster per week. Feeding is currently supplemented with “Banana Mix”, and the potential of applying effluent solids has yet to be checked out. In choosing their diversification, Ross and Karen were also looking for complementarity with their dairy business. They are finding it in a feed source for the plants and also with labour because peak
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
demand in the dairy business at calving is when the bananas are at their slowest, and the different activity provides relief from routine. In addition to the activity being personally interesting, the other critical factor is profitability. To date, the cash investment on top of the land, machinery and water resources they have in their dairy business includes initial purchase of stems ($15,000), irrigation system with a solar pump ($13,000), and temporary shelter ($4000). Still to come is the cost for a packhouse. Operating costs are primarily time plus machinery operating and weed spray. At this stage they are not accounting for their time in setup or operating. There has been no financial return in the first 18 months. The first year of yield is expected to return 6-10kg of quality fruit per cluster at a price of $5/kg from 1000 stems per ha. Production and markets are expected to increase with maturity. The production, income and expenditure numbers are indicative, and the risks are identified as weather events, harvest management, fruit ripening and marketing. Alongside this, as every gardener living on a farm knows, is the peril of livestock invading the site. Ross and Karen have done their research and taken the plunge. With all new ventures there is a huge amount of learning and management of risks. At this point it looks positive as a form of diversification from dairy farming that will contribute to their business profitability, environmental sustainability, and enjoyment of life. 41
SYSTEMS REGENERATIVE AG
Field-testing regen A multi-farm Canterbury dairy operation is running a comparative study of regenerative agriculture against traditional Kiwi methods. Anne Lee reports.
C
anterbury’s Align Farms is taking the plunge and arguably taking one for the team, putting 50% of two of its high-performing dairy farms into regenerative agriculture so it can run a comparative study and gather scientifically robust data. Rhys Roberts is chief executive of the large scale, seven-farm business and says the farms’ stakeholders have become increasingly focused on farming with a lighter environmental footprint to produce nutritious, healthy food. Regenerative farming principles had sparked their interest but like many others the Align 42
team was frustrated at the lack of New Zealand-based evidence to back up claims being made. “We were all a bit sick of the fact there was just anecdotal data. We wanted some empirical evidence so yes, I guess we’re taking a bit of a risk but we want it to give us robust scientific outcomes. “Then we want to share the data openly and transparently with other dairy farmers so they can get some sound information that’s relevant to New Zealand and the way we farm here,” Rhys says. Two of Align’s dairy farms – the 1080cow Clareview and the 1050-cow Longfield
will have 50% of their area run under a regenerative system with a study also to be set up on a wintering block. Last season about 20% of Clareview was sown in the multispecies pasture mixes that are a hallmark of the regenerative approach with the other 30% being sown this season. Longview’s transition has begun this season and will be a 50:50 split in time for the 2021/22 season. Align’s head of environment and innovation Clare Buchannan says to ensure the study can generate sound, credible data a science advisory board has been set up. It includes Dr Gwen Grelet from
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Left: Rhys Roberts: “By doing our own study and working together ourselves, yes, we’re making a few mistakes but we’re learning what works.” Right: The cows graze when the pastures are hitting 6000-7000kg drymatter (DM)/ha cover and the idea is to graze them down to about 2500 with the high stocking density trampling the residual.
Manaaki Whenua Landcare Research, Otago University Emeritus Professor Frank Griffin and Our Land Our Water National Science Challenge director Dr Jenny Webster-Brown. “We wanted to make sure the study stands up to scrutiny and that we’re measuring and collecting data on all of the metrics we should be. “We don’t want to get five years down the track and find we wished we’d measured something and haven’t. “A lot’s been said about regenerative agriculture in the media both for it and about the lack of data with some even calling it a mythology. “We didn’t want to adopt this and then three years later just be added to the anecdotal pile,” Clare says. The farms have always been diligent in collecting data and benchmarking with peers such as Lincoln University Dairy Farm (LUDF) so many of the production, financial and environmental metrics from the previous four years will form baseline information. Baseline data on other factors including soil carbon levels are being collected this season. The herds on each farm will be split to ensure they’re as similar as possible with one half run only on the regenerative pastures and the other on conventional ryegrass/white clover. Each farm has two vats and each herd will be milked separately and milk kept separate. Other management differences will include a shift away from synthetic fertilisers on the regenerative area. The farms will run on a 50/50 split for two seasons and then transition to fully regenerative. Align’s Jacawanada and Emilius farms totalling 416ha and 1800 cows will continue to run as conventionally managed farms through the study. Clare says they’ve settled on five key areas to record data on.
• Financial • Environmental • Human health • Animal health • Social impacts Environmental data will include the normal soil test information and “above and beyond” soil chemistry analysis as well as soil biology measurements. Clare says monitor paddocks have been selected on each farm to make comparisons within farms as robust as possible and those monitor paddocks will be sampled regularly throughout the study period. Soil carbon sampling is being carried out on both the dairy farms and the operation’s wintering unit Hinterlands, near Methven. “One of our main motivators for switching to regenerative practices was to try to sequester carbon from the atmosphere and store it in the soil, so it was imperative to us to measure our current carbon stores so we can compare our progress in five year’s time.” Soil water-holding capacity will be measured and metrics that could affect water quality. Human health information will be analysed from milk samples taken from each vat and will look at factors such as Omega 3-6 levels, conjugated linoleic acid (CLA) levels, a range of macro and micro nutrients and residues of synthetic chemicals. Align’s mission statement is to advance human health and environmental outcomes by producing nutrient dense
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
foods in a resilient, diverse and productive environment all can enjoy. “The human health aspect of the study is important to us, we want to be producing nutrient dense food so we want to see if regenerative principles do make a difference to the product,” Clare says. Animal health information will be collected on issues such as mastitis and metabolic disorders with vets carrying out additional blood tests, autopsies on cows that die and liver biopsies. The financial data will include farm working expenses per kilogram of milksolids (MS) along with budgeted and actual spends on budget line items as well as physical data such as milk and pasture production.Social data will also be collected. “It’s a bit of a tricky one to measure accurately but we’ll carry out surveys to look at things like staff engagement and we may go wider and survey people in the community to get an idea of any shifts in perception,” Clare says. “There is no question that dairying has contributed to degraded water quality in New Zealand, so we are hoping these improved practices result in a lower environmental footprint, which in turn will shift the public’s perception of the industry. This will hopefully have the knock-on effect of improving the mental health and wellbeing of our farmers, something that is an issue in the farming community.” 43
Right: Kiri Roberts is farm manager on the Clareview dairy unit and says she has already learnt a lot about how to graze the much longer multi-species pastures.
Rhys says most dairy farmers will want to know the numbers first of all. “They’ll want to know it stacks up at a $6/kg milksolids (MS) payout. “We may be able to move regenerative milk up the value chain to give a greater margin but not everyone is going to be able to do that so I think if farmers generally are going to adopt the principles it has to stack up at the long-term average milk price,” he says. “Farmers need to know it’s profitable – that’s the way our DNA is wired.” They’ve looked at all five parameters because each will have a different weighting for different farmers when it comes to deeming it successful. Some may be facing significant environmental challenges and if it ticks those boxes they may be prepared to forgo some profit. From his perspective, Rhys says a successful farm system has to be repeatable and teachable. “We know what we can do on a ryegrass white clover conventional system and it’s a pretty high bar,” he says. Along with the data collection he says managers and staff will be gathering information on how to best manage the system and share that with others too. “Initially we brought in regenerative consultants, they brought tonnes of energy and challenged the status quo. “We have now settled on learning within and sharing and utilising our own capabilities and expertise. “By doing our own study and working together ourselves yes we’re making a few mistakes but we’re learning what works.” Rhys’ wife Kiri is the farm manager on Clareview and has been since it was purchased in 2013. “We’ve already learnt a lot about how to graze these pastures – they’re obviously very different to what we’ve been used to, much higher covers, higher residuals and putting cows on to smaller areas for shorter periods and moving them more often,” she says. In the first season a primer, soilconditioning, pasture mix is direct drilled, usually in spring. The mix can include more than 25 plant species including deep-rooted plants such 44
The Dairy Exporter will be following the Align Farms journey and reporting regularly on the findings of its study and what it discovers in terms of farm system management. Let us know your questions for the Align team. Email: anne.lee@nzfarmlife.co.nz
as sunflowers and chicory, phacelia, a range of grasses, grains and legumes. Not all will survive or even come up in the first year but Kiri says most have appeared at some stage. A mix of nine to 13 species, mostly grasses and legumes is then sown into that crop using a cross-slot drill. “You’ll get re-seeding from the first diverse mix but you’ll see different plants coming up through as it grows out,” she says. “As these regen pastures grow back they’ll look a lot like a conventional paddock to start with and then as the covers get high you’ll see the more diverse things come through,” Rhys says. They take up to 50 days before they’re ready to be regrazed and will be up around 6000-7000kg drymatter (DM)/ha cover. The idea is to graze them down to about 2500 with the high stocking density trampling the residual so that it lies close to the soil and will break down or be recycled by soil biology. “If you graze these paddocks to 1600kg DM/ha the only thing that will grow back is grass and dandelions,” Rhys says. They’re looking at how they can use the high covers particularly in the soil primer
crop to replace bought-in supplement. “Our view is we shouldn’t need shortterm supplement because there’s enough room there to graze an additional 500kg DM – say going from 2500 residual to 2000kg DM. But we’re still looking at whether we can grow enough to manage a longer-term deficit. “It’s these kinds of learnings that we want to share as we go,” he says.
FIELD-TESTING REGEN AG
We visited Rhys and Kiri Roberts at Align farms to see the farm-scale trials they are running on regen ag vs. conventional dairying. They are collecting data on financial, physical, social and animal health metrics to make informed decisions and share with other farmers on the regen farming system. Check out the Align Farms video on YouTube ‘Dairy Exporter’ channel.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
SPECIAL REPORT
BUDGETING FOR A BETTER FUTURE
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KNOW THY NUMBERS
50
KNOWING WHERE YOU’VE BEEN
52 PLANNING TO SUCCEED
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BUDGET IS A LIVING DOCUMENT
SPECIAL REPORT • SUPER SPREAD-SHEETER
Family time is very important for James and Ashleigh, pictured here with Henry, 8, Payton, 6, Kyan, 4 and Emersyn, 5-months old.
KNOW THY NUMBERS On the Oakes’ farm, carrots are not a go-er but 3-in-2 definitely is, and James Oakes has the numbers to prove it. Jackie Harrigan explains.
J
ames Oakes says he has new ideas all the time – but 90% of them are thrown away by the end of the day and 99% within the week. Having a good set of budgeting skills means the Taranaki dairy farmer can quickly run the ruler over new ideas and discount them or take them further. “Our motivations are family and lifestyle,” he said at a recent SMASH field day in Stratford, “and that’s what we measure everything against.” James and Ashleigh Oakes have four children – boys Henry (8), Payton (6), Kyan (4) and five-month old daughter
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Emersyn – and James values time spent with the children, helping Ashleigh and supporting and coaching the children's sports and activities. He told the Dairy Exporter he measures his lifestyle by how much time he has available to spend with family and to watch rugby and cricket during the day. At the end of their first season on their 320-cow, 135-hectare dairy farm at Midhurst, he and Ashleigh questioned their work/life balance. “I directly compared our time off with our urban siblings and friends and thought ‘would they work these hours?’ ” Reassuring questioners that his friends
are building equity at the same rate that he and Ashleigh are, James says it is important to the couple to have a similar quality of life with similar opportunities for time off the farm and with the children if they want it. Their big change for this season is the shift to 3-in-2 milking for the entire season, which is helping them tick those boxes, all with just a $10,000 reduction in milk income but an overall increase in profitability. “We have always done some 3-in-2. In February 2019 we moved to 3-in-2 to finish the season to cover the feed shortage, but milking at 5am and then 7pm made it too late – we weren’t happy with it.” In January 2020 milking times were changed to 5am and 4.30pm, which James says worked out much better. He enjoyed being able to do more and pick up the kids every second day after the midday milking. In July they brought on a new staff member – Tony Smith, who had been working long hours and was looking for a lifestyle change to spend more time with his children – and promised they would start 3-in-2 in December, but then thought why not look at doing it full-season? “We started breaking it down and worked out it would cost us $2000 for August
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Left: The investment in cow collars is working really well, James says - it’s so easy to see what they are doing from his phone. Below: One of the Oakes’ Shorthorn show cows - a number of Shorthorns have slipped into the herd from Ashleighs’s parents’ pedigree Shorthorn herd.
and September, and a further $18,000 for October to December – so $20,000 less than the season before when we already had done 3-in-2 for half the season.” “But when I adjusted for the $50 shed cost per day, including power, rubberware, detergent, teat spray, etc to run the 40-a-side herringbone shed, and the reduced costs from less lameness, better in-calf rates and better animal health, it looked like a loss of only $10,000 from a 4% drop in production – and I didn’t think $10,000 was all that much for what we were getting. “I ran through it with the bank manager and the DairyNZ consultant and with Ashleigh – in fact I talked it through so many times in the end she said ‘Just do it’. “Our strength is that I do 90% of the books and really monitor the budget spreadsheets, checking weekly or fortnightly, so the bank manager is really happy to talk through scenarios because I really know exactly what's going on. “It's early days but we are really enjoying it and it's taken lots of the stress and grind out of farming.” The cows are very settled too, James says. The gate latch goes off at 5am and they either go to the milking shed or they go and get fed. So milking starts at 5.30am, followed by 4.30pm afternoon milking and then 11am following day. In the spring he and Tony alternate starting at 7am or 8am (on the
2nd day), and for the rest of season both start at 8am. Ali Mattock works for them as a weekend / holiday cover milker.
CHANGING IT UP Other system changes the Oakes made included dropping cow numbers by 30 cows and dropping imported feed from 312 tonnes to 100t, effectively going from 16.7% and System 3 down to 5.6% and System 1. They invested in a new effluent system to spread the effluent further and grow more grass. They also purchased a new silage wagon that was 2.5 times bigger than the old one, because with lower cow numbers, James says, they will make more silage and feed more in the spring, which they didn’t have time to do in the past. “We have time to do it now and so we are feeding more silage more efficiently and making more money from less cows.” The drop in cow numbers and imported feed has also improved their GHG number, dropping from the 30th percentile down to the 20th. “So we are now more environmentally friendly and more profitable.” Adding Allflex cow collars onto the herd was a large financial cost but is working really well. “I can just look at my phone and see what the cows are doing,” James says.”The collars have picked up lameness, mastitis,
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
FARM FACTS
• James and Ashleigh Oakes • Manganui Road, Midhurst, Taranaki • 320 cows (2020/2021) 350 cows (2019/2020) • 135ha + 35ha adjoining leased runoff • 400kg MS/cow • 40-aside herringbone • No feedpad
milk fever and cycling, judged on the cows walking and eating activity. James’ only complaint about the changes they have made is that they are struggling to figure out which change has made the biggest difference – benchmarking against the season before is tricky because they changed so many things at once.
A RULER OVER THE FINANCES There are three kinds of kids – the spenders, the savers and the traders, and James Oakes admits he was the kid who understood market forces from an early age. “We used to travel to Wanganui each year for the Taranaki/Wanganui rugby clash, and a highlight was being able to fill our pick’n’mix punnets from the lolly shop – jam in as many as we could. “I would wait until all my siblings had eaten their lollies and then sell them mine
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– that was a start of the trader instinct.” Since then James, who achieved degrees in both agriculture and business at Massey University (and says the business degree was probably the more useful for him), has been trading cows and cattle to make extra money and get ahead. “Dad gave me my first cow when I passed School Cert agriculture and I traded cows through school and Uni – even when we were overseas in Scotland and I was playing rugby we were trading cows at home.” The GFC hit when the couple were in Scotland, leaving them with lots of cows worth “zero”, James says, but they decided to farm their way out of it, managing to sell a third and lease out a third. They kept the other third, forming the basis of the 100-cow herd they milked on the small farm they leased for three years on arrival back in NZ in 2010. “We traded lots of cows – selling four herds in three season – because the demand was there from the South Island, so we went for it.” Next step was a 200-cow lease farm for four years, with the $3-90 and $4.40/kg MS payout. “We made money and made it work. It was a real challenge but we came through it unscathed, without more debt, which showed that we could be really conservative when we needed to be.” In 2017 the opportunity came to buy 85ha and lease a further 85ha. “It took a lot of budgeting and working with our advisers – my father-in-law, father and brother are our main farming advisers. “When we were trading livestock we took risks, but now we have the children we are more risk averse.” While they have never had a five-year plan on the wall, James says they are always thinking, exploring and bouncing new ideas off each other. “We have had some crazy ideas along with more plausible ones. We looked at having no full-time staff, looked at ACRs but it didn’t really suit our family. “Last year I grew a really good crop of carrots in the garden, so I thought we should do that, talked to the rep, did the research, but it wasn’t a goer so I chucked that idea out pretty quickly. “Everything goes under the ruler of: does it fit our values – fit with the family, the lifestyle, what impact does it have on profitability?”
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Combining farming with family fun is a winning formula for James and Ashleigh Oakes.
STRENGTHS OF THE OAKES’ OPERATION: • Really strong link to values for any changes made – adapting their farming system to how they want to live • Ability to quickly analyse scenarios – run the numbers on the changes before embarking on change • Getting advice and feedback from trusted advisors, including Ashleigh – great to bounce ideas around
WHAT 3-IN-2 MILKING BRINGS TO THEIR WORK/LIFE BALANCE: • Every second day James and Tony finish work at 1.30pm • Breakfast with the kids every second day and an 8am start • Helping get the kids ready for their day every second day
• Coaching two touch teams • Helping out with kids’ activities after school – swimming, cricket, touch, • Poker night online with friends, catching up with mates, staying up till 11pm • Christmas - lunchtime milking enables mornings with the kids • Watching cricket at Pukekura Park during the day, with a few beers • Reduced working time from 60 hours to 45 hours/week • Improved work output – always fresh, one starts at 7am, other at 8am, everything is done faster. • Cow BCS has improved, up to 4.1 in October, improved cow health, and production targeting 400kg MS/cow (producing 2kg MS/day in October).
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Heat detection, no biggie. Allflex Cow Collars detect the optimal time to AI, meaning less time in the shed visually identifying cows on heat. It also means, no tail paint, scratches or kamars. Let Allflex Cow Collars take the stress out of mating. To find out more, check out thegamechanger.farm Dairy Exporter | www.nzfarmlife.co.nz | December 2020
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SPECIAL REPORT • BUDGETING
KNOWING WHERE YOU’VE BEEN Budgeting and benchmarking numbers form a feedback loop to look back and review the year’s performance, serving to inform decisions and add caution when metrics like payout and feed costs change. Ivan Lines looks back at 2019/20 for his Southland and Otago clients.
A
GRAPH 1. GROWING EFFICIENCY: KG MS/KG LW
0.96 0.94 0.92 .09 0.88 0.86 0.84
Cow efficiency kgMS/kgLW
y = 0.0089x + 0.8399 R2 = 0.7349
Linear kgMS/kgLW
0.82 2019-20
2018-19
2017-18
2016-17
2015-16
2014-15
2013-14
AgResearch farm growing nearly 2.5t DM/ha less grass last season than its long-term mean. Thankfully the payout allowed us to buy supplement to offset the poor grass growth. Ivan Lines. The margin of milk income over feed costs improved from $7837/ha to $8851/ha (for a fair comparison, both years are calculated at $7.15/kg MS). We spent $318/ha more on feed, and made another $1014/ha due to the higher payout. These are great results, but we do need to be cautious as this was payout driven. If the
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
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1 0.98
2005-06
gribusiness Consultants Ltd has for the last 15 years intensively analysed the productivity of its nearly 150 Southland and Otago dairy clients. This data forms the basis of monitoring productivity improvements and ensures our clients are objectively measuring their progress. The review has become an annual highlight for clients as they appreciate the opportunity to reflect on the season passed and to take learnings into the new season. There is also a fair bit of competitiveness involved as the top client is identified and hosts a field day, and everyone wants to be better than the average. In comparison to the year before, 2019/20 average milk production per hectare improved from 1417 to 1442kg milksolids (MS)/ha (+1.6%) even though average pasture utilised per hectare dropped from 13.54 to 12.78 tonnes drymatter (DM)/ha (-5.6%). How did this occur? Average imported feed increased from 2.5 to 3.1kg DM/kg MS (+24%). This includes nitrogen and an adjustment for feed on hand. Concentrate usage increased by 20% and silage fed increased from 312kg DM/cow to 350kg DM/cow. We produced more milk by buying in more feed to offset the reduced pasture production. The reduced pasture growth for the region was also seen in the Woodlands
payout had been $6.00/kg MS in both years then we would have earned $156/ha less this year. Production targets must always be dependent on productivity (conversion of grass into milk and cost structures) and milk price. Other interesting trends between 2018/19 and 2019/202 included a decrease in empty rates from 13.4% to 12.0% and an improvement in six week incalf rates from 70.9% to 71.6%. There could be many different reasons for these improvements including better cow condition at calving and better nutrition premating. Although per cow production for the season was similar to last year (471 vs 469kg MS/cow), daily production at mating was lower than the previous year (cows caught up because of a good autumn).
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
GRAPH 2. MARGIN INCOME LESS FEED
Production targets must always be dependent on productivity (conversion of grass into milk and cost structures) and milk price. $7400 $7200 $7000 $6800
y = 72.454x + 6161 R2 = 0.6929
$6600 $6400 $6200 $6000
Margin/ha @$6.00
Linear (Margin/ha @$6.00)
$5800 2019-20
2018-19
2017-18
2016-17
2015-16
2014-15
HFS - Dairy Exporter Dec 2020 - 80x230mm - 5mmbleed.pdf
2013-14
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2005-06
Another possible factor is that milk urea levels were much lower last year than the year before. Overseas research shows high milk urea having a negative effect on herd fertility but the same relationship is yet to be reported in New Zealand dairy systems. Since 2005/06, our clients’ average milk production has improved from 1138kg MS/ha to a record high of 1442kg MS/ ha in 2019/20. The DairyNZ Economic Survey quotes the average production for Otago/Southland at 1148kg MS/ha so the Agribusiness Consultants’ data by no means represents the average performance for the region, however, 15 years of data (and over 65,000 cows and 31 million kg MS) is significant and important trends can be observed. Although feed inputs have increased over this time there has also been an increase
in productivity. At a $6.00/kg MS standard milk price, milk income less feed costs has improved from $6384/ha to $7199/ ha (average of first five years vs average of last five years) – an 11.6% improvement or $72.45 per hectare per annum. That is, from a productivity point of view, Agribusiness Consultants’ clients are improving their net income after feed costs by about $14,500, year on year. Average per cow production amongst clients has improved from 400kg MS/cow to 470kg MS/cow. Many of our costs in Southland are per head related e.g. winter grazing, animal health, breeding etc, so it makes sense to improve production per cow to dilute these costs per kg of MS. It costs the same to winter a cow whether you get 400kg MS or 500kg MS out of her – so long as good pasture utilisation is maintained. 1
17/11/20
The average utilised pasture has improved from 11.35t DM/ha to 12.56t DM/ha (five-year rolling average) or a 10.7% improvement. Some of this is due to improved pasture production but mostly due to improved management and utilisation over that 15 years. As feeding levels are improving, production is going up as are cow weights. Fifteen years ago the average estimated liveweight was 470kg, it is now 485kg – not a lot more, but a trend nonetheless. Pasture utilisation is and will always be the most important contributor to productivity and thus profitability – it has a correlation coefficient (R2) of 0.80 so we need to always keep our eye on the ball here. Another KPI that is almost equally as important (R2 of 0.73) is production per kilogram of liveweight (kgMS/kgLW). Over the last 15 years this has moved from 0.85 to 0.98kg MS/kg LW. Even though our live weights are increasing, our milk production is going up faster – better feeding, better genetics and better management. Cows producing their liveweight is now commonplace amongst our clients and the best are achieving or closing in on 1.2kg MS/kg LW. Southland farmers should be proud of their productivity improvements – we are getting more from less and cement ourselves at the top of the world in terms of efficient milk production. • Ivan Lines is a consultant with Agribusiness Consultants, Invercargill
12:36 AM
TALK TO THE EXPERTS FOR FARMING SUPPORT 07 858 4233 farmservices.nz info@farmservices.nz
TO SUPPORT AGAINST THE BAD EFFECTS RYE GRASS| STAGGERS Dairy ExporterOF | www.nzfarmlife.co.nz December 2020
HOMEOPATHIC FARM SERVICES
@HomeopathicFarmServices 51
SPECIAL REPORT • PLANNING FOR SUCCESS
Left: Planning involves two key parts, preparation of the plan and monitoring and taking action when plans change.
Top performing farmers know and take ownership of their budgets (what gets monitored gets measured). This means looking at budgets monthly, quarterly, or by GST period, reviewing and explaining variances and re-forecasting those variances. BUILD RESILIENCY Resiliency refers to getting your business to a point that allows you to ride out some downturns and tough years, but still have a viable business. Simply put, it is about being financially able to cope with the unexpected. Resiliency involves three key parts: everyday, rainy day and one day. A quote from one of her clients nailed it for her.
PLANNING TO SUCCEED
P
lans are nothing, but planning is everything. It is the process of building, thinking through the possibilities, coming up with predictions and sometimes being proven wrong. When the plan changes, as it will, re-adjust the forecast. That is what developing and then monitoring a budget does for a farming business, says agri specialist accountant Amanda Burling. “2020 has to be one of the most bizarre years ever. Pressure has and still is coming at us from all different directions. In my role I am seeing ongoing financial impacts of severe drought, recovery of the business from drought and low payout and pressure on cash flow from bad years, flowing into high tax bills from good years. “Along with over expansion and over investment in capital and pressure from banks to repay debt and reduced promise of
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capital gains, farmers have regulatory issues around effluent and the environment and a struggle to find good reliable employees. “On the plus side there is a gently optimistic milk Amanda Burling. forecast and low interest rates that we are expecting to stick around for a little while.” So what can farmers do to be ready for change and ensure ongoing success? PLAN
Plan for the unexpected. Manage your farm as a business, build and grow financial awareness of your system, know your position and respond accordingly. Planning involves two key parts, preparation of the plan and monitoring and taking action when plans change.
“Knowing where you are (financially) means that you can spend more time looking at where you are going. Going forward, this means making financially informed business decisions faster, saving time and headspace. Hours and hours of unproductive thought is wasted on not knowing your financial position. It kills productivity and the ability to work efficiently.”
SO WHAT IS THE STARTING POINT? WHAT IS YOUR CURRENT POSITION?
Burling says your current position is not what your last financial statements showed you. This is not what is in your bank account today, but is a combination of all of it. It is how you did last year, how you are going this year and where you plan to finish.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
UNDERSTAND YOUR POSITION
ETIQUETTE IS IMPORTANT
Lots of people don’t understand their position, so they should seek out opportunities to learn, she says. “There are lots of opportunities out there if you look. I do annual workshops on understanding your financial position and budgeting. This year we had to adapt and worked with DairyNZ to do them online.”
“We have seen banks turn down requests for OD extensions this year because it was apparent when viewing the transactions, that the clients had purchased take-aways five or six times a week for a month and it was decided from this that their level of personal expenditure was responsible for the need for an OD extension.”
KNOW YOUR BREAK EVEN MILK
How many chances would you give someone? Turning up late, failing drug testing, making mistakes. How many chances would you give them before you lost trust/faith in them and their ability? The bank is no different. If you have been in a tough spot, you need to prove that you are growing your ability to manage things. If you have a great history, you need to prove your ability to forecast and manage if you want to secure further lending for expansion. “Basically, everyday resiliency means meeting your everyday obligations, making timely decisions, and knowing your reality.”
PRICE OR FWE (IF NOT DAIRY)
Every day farmers need to be bank ready, show good etiquette and build trust in your ability, Burling says. BE BANK READY
“When you are bank ready, you are able to act fast. This means that you can see a cash shortfall coming and arrange an OD facility well before it is needed, or you can act before the neighbors if an opportunity pops up that you want to take advantage of.”
BUILD TRUST IN YOUR ABILITY
Rainy day resiliency means being prepared for the unexpected. Fluctuating market price, drought and the tractor breaking down and could be having insurance to cover the eventuality. Long-term resiliency is our ‘one-day’ goal. This involves actually setting a goal and can be driven by knowing WHY. Phase two is based on building trusted relationships, Burling says. “The more we get to know our clients, and understand what makes them tick, the more value we can add to their business. Tell your trusted advisors everything holding back information doesn’t allow us to make recommendations on the full picture.“ Include all of your team, lawyer, banker, consultant – make sure everyone is on the same page. There are real synergies to be gained from sharing knowledge and working collaboratively on data. • Amanda Burling is an Agri Specialist accountant with Baker Tilly Staples Rodway Taranaki.
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SPECIAL REPORT • BUDGETING
BUDGET IS A LIVING DOCUMENT
S
Words by: Anne Lee
et your budget using the best information you can find, be prepared to redo it as the season progresses if conditions change and monitor, monitor, monitor, Canterbury dairy farmer Alan Davie-Martin says. Alan and his wife Sharron own a 141-hectare, 540-cow irrigated dairy farm near Culverden in North Canterbury and are consistently among the region’s top performers across a wide range of metrics, especially profitability. They share their budget and physical and financial performance throughout the season as one of DairyNZ’s 15 regional budget case study farms. It’s a bit of a reciprocal thing, Alan says in that he too will look at others’ budget numbers when drawing up the budget for their farm Beechbank Dairies. “I do lots of comparisons – I’ll look up previous years’ figures - maybe I’ll make some mental or written comments about them and note whether a line item is normal, abnormal and what was behind it if it was out of the ordinary. “Then I’ll make use of others’ data that’s been shared and see how we compare. “I’ll analyse that data because every farm has its own peculiarities – one farm might have particularly cheap irrigation for instance while another is more expensive so I look a bit more closely at why numbers are what they are.” Keeping budget notes on what’s included in a line item can help when setting next year’s budget.
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“The budget is a living document so I’m revising it all the time as the season goes on. “But what I’ve been advised to do, and have done more of late, is to keep the original so you can go back to it and use it as a reference.” Alan uses Cash Manager for his budgeting and uses the function that allows him to lock and save the original budget while also having the version that he can update. He often sets his budget in February or March for the coming season. “I have to go on the information
available then for my original budget, whereas in my live document if I see milk price or cull cow prices moving, for example, I can adjust the budgeted figures.” His accountant and banker have access to his Cash Manager budget and Alan says it’s vital it’s as accurate and up to date as possible. “Having quality information available for your rural professionals makes it easier for them to carry out quality analysis and give you quality advice in a timely way.” Take tax planning as an example.
Sharron and Alan Davie-Martin: “Trim the fat, not the bone” and “Always budget conservatively, err on the side of caution but be real.”
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
“I don’t want to pay any more or less tax than I need to pay so I need to make sure the budget is right. “If I have a $6 milk price in my budget and now it’s looking like it’s going to be $7.10 I need to make sure tax payments are adjusted.” A more accurate budget will give your banker confidence in how you manage your financials. “And that can mean they give you a bit of wriggle room.” If they’re not confident in your numbers, they’re going to keep you on a tighter rein. Always do your own budget. “I learned at an early age to do my own budget - years and years ago I let an accountant do my budget and it wasn’t good. Each farm is different, each farmer does things differently. “You should definitely let them cast their eye over it, seek their advice. “But do your own budget and own it.” Know your breakeven milk price so at any time that number is firmly fixed in your mind, Alan says.
BEECHCROFT’S BUDGET Here’s a link to Beechcroft’s budget for this year – check out the numbers and the notes that go with them or check out the other case study budgets for your region. www.dairynz.co.nz/business/ budgeting/budget-case-studies/ north-canterbury-ownersystem-4-2020-21/
till the next down cycle to come right again. “Always budget conservatively, err on the side of caution but be real,” he says. It feels good to come out ahead of budget at the end of the year so be realistic - don’t have costs pared back so far you can’t achieve them but don’t build so much fat
“Having quality information available for
your rural professionals makes it easier for
them to carry out quality analysis and give you quality advice in a timely way.”
Breakeven milk price is the milk price you need to meet your operating expenses, interest, tax, principal repayments if required by the bank, drawings and an allowance for asset replacement. In bad milk price years Alan says he looks hard at the areas he can cut back spending on without having a long-term effect on the business. “Trim the fat not the bone. “Don’t prune costs on items that have long-term effects back so far it takes you
into the system you lose discipline on cost control. Monitor your actual spending against budget closely each month and interrogate the numbers. “There will always be unders and overs, you’ll never get it 100% right and in some cases it might just be a matter of timing if an expense has come forward for example. “But if you’re monitoring closely you can often make adjustments as you’re going rather than getting a surprise at the
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
end.” Knowledge is power and a good business person knows their financial position at all times, he says. In tight times knowing where you’re at is vital, it gives you time to take action. Don’t be afraid to talk to suppliers and say I want to do business with you but can we talk about terms of payment. “Nine times out of 10 they’ll accommodate that because you’ve talked to them upfront.” Protecting long-term relationships is important. “It takes me all my life to build up a reputation and I can ruin it in five minutes so honouring contracts with people you’ve built a relationship with is important. “Your people are important. I’ll always wear the cost of a low milk price to keep good staff rather than being tight on people.” Involve the staff. “It’s up to you how much you disclose but involving them can give them a greater sense of ownership and can make them more careful about how they handle gear or maintain it. “You might be amazed at the bright light moments that can come from even the most junior of staff on how something can be done differently to save money.” Try and be an autumn spender rather than spending earlier in the season. “That way you have more certainty the money you expect to be there is.” Levies can be a reasonably significant cost that sometimes gets forgotten. “Remember them, they can be one of those things you remember when you wake up in the night weeks after setting your budget. GST payments that need to be carried through from last year into the new budget are the same.” Review your budget and if there’s a bigger surplus than you expect or things look worse than you thought - ask yourself - is it believable? It can be daunting when you’re starting out but they do get easier, Alan says.
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ENVIRONMENT CLEAR WATER
In action for the springs Words by: Anne Hardie
W
hen you farm within the catchment of the Te Waikoropupu Springs in Golden Bay, your environmental impact comes under particularly close scrutiny because the water is possibly New Zealand’s clearest and cleanest. Steven and Daphne Woods own one of 14 dairy farms in the catchment, milking 450 crossbred cows on 174 effective hectares and they already meet the criteria for the Government’s new freshwater regulations. They farm in a high-rainfall region that can reach three metres a year, with 60mm in one rain event common. The last thing they want is heavy rain flushing nitrogen through the soil into the aquifer that feeds the springs. 56
To ensure that doesn’t happen, they apply nitrogen only when there’s a 14-day period without rain in the weather forecast and then water it in under controlled irrigation from their pivot irrigators. They restrict their nitrogen use to 160kg N/ha/ year, using coated N-Protect for the added advantage of staying longer in the soil for the plant’s uptake so they can use less N overall. It’s just one of the methods they use to protect their environment which in this case is the largest cold-water springs in the Southern Hemisphere. Concerns about the underground aquifer system that sustains the springs led to a proposed Water Conservation Order that is now going to the Environment Court. That could make many dairy farmers nervous, but the Woods have confidence in the Environment Court and the research that
shows any increased N levels over the decades are not statistically significant. Dairy farming has been under attack during the springs debate and the Woods became entangled in its heat when they sought to continue irrigating the farm with their brand new pivot irrigators a few years ago. It was only after they bought the pivots – two 360 degree pivots with arms and a 180 degree one – that they discovered the local council had inadvertently slashed their water consent years earlier through a misunderstanding and the family didn’t know. It took a four-year battle and cost them an estimated $700,000 in lost income, plus the extra costs of running a dry-farm operation on river gravels. Bought-in balage to replace grass “cost a fortune” but was the only way to keep the cows milking through those stressful years. The
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
‘One of the reasons for going for pivots was the efficiency of water and now we can irrigate 121ha with 30,000cu m of water per week compared with 35,000 in the past.’
Left: Steven and Daphne Woods say stone fences give an idea of the stony soils that lie beneath them.
battle ran out of steam when they reached the Environment Court and Steven says the judge basically told everyone to go home because the argument was about the aquifer and the Woods were simply seeking to continue their surface water take from the river. The result was they could irrigate again and more efficiently than in the past. “One of the reasons for going for pivots was the efficiency of water and now we can irrigate 121ha with 30,000cu m of water per week compared with 35,000 in the past,” Steven explains. With the pivots up and running, the farm business suddenly became more efficient as well and Daphne says they have finally been able to pay some of the principal on their bank loan after years of running up more debt without water. The irrigation was part of an upgrade of farming systems when they bought into the family equity partnership a few years ago. Before farming, Steven had been driving trucks for 20 years and the family farm had moved into an equity partnership with neighbours. He came back for a year, realised he wasn’t over truck driving and then returned with Daphne for the 201112 season to work on the farm for the last year it was part of an equity partnership. The next season they leased the farm and bought the cows and four years ago purchased the farm. It was the $8/kg milksolids payout year; a good year to
Steven and Daphne Woods use the pivots to water nitrogen into the soil.
buy a farm. It needed refencing and the irrigation was not efficient. The farm had been irrigated since the 80s – one of the first in the bay – using a big gun travelling irrigator and then a Rotorainer. But Steven says trying to improve the system was akin to trying to make a silk purse out of a sow’s ear. It needed a major rethink to make irrigation more efficient and the farm sustainable. “We didn’t put irrigation in to milk more cows, but to maintain our cows,” Steven says. With that in mind, they considered fixed grid irrigation, K-line and pivots. The latter won because they decided it was the most efficient method at a lesser cost than the fixed grid. Despite the region’s high rainfall, irrigation is a necessary buffer through summer and often the irrigators are used for just six weeks. Though the drought a couple of years ago forced them
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
to turn the water on between December and March. Three terraces rise from the Takaka River that borders the farm, with river silts on the lower terrace and river gravels on the upper two terraces and it’s those upper terraces that really dry out without irrigation. Those same terraces come into their own in winter though when cows can graze a crop of kale with minimum damage to the soil. In the past they grew a crop of fodder beet on the lower terrace with its silty soils and decided that wasn’t to be repeated. “We were running the cows on and off the crop and they pugged the hell out of everything. Made a hell of a mess. Animal welfare was the biggest issue because of the mud.” Though they haven’t repeated it for the environment and animal welfare concerns, 57
Left: Pivots now irrigate 121ha of the farm. Below: The farm spans three terraces.
there were also the financial implications that flow on from that scenario. “We don’t do things just for the environment because it’s a flow-on effect from other farming practices,” Steven says. “It’s the whole package. And if you don’t make money, you aren’t here tomorrow.” All the cows are wintered on the farm, while young stock are grazed off the farm from weaning through to May when they are rising two year olds. Through winter the herd is grazed on a mix of kale, grass and straw. Plus they grow the cereal silage, triticale, for its low ME and high protein to 58
use as a stomach filler for winter. Usually they grow 15ha of kale for winter and break feed the crop in combination with a paddock of triticale and a paddock of oats and ryegrass. That is strip grazed or can be baled to feed out during late lactation. Paddocks are sown back into permanent pasture in autumn because sowing them in spring in a high-rainfall climate requires too much chemical to get them established. That means they have to get from spring to autumn without those paddocks in
production and they have tried different things to achieve that, including baling surplus in spring to feed out in late lactation. They’ve grown maize on the farm which was ideal because they could use it as a green feed, but now grow maize on contract off farm on a per kilogram basis over the weighbridge after harvest. That’s a lot less stress than growing it themselves and it provides a backup feed, especially during those unpredictable seasons. They use it to extend lactation and put weight on the cows before they are dried off at the end of May. Daphne says it’s about animal welfare, but has financial implications as well because if the cows go into winter in poor shape, they will come out of winter in poor shape to begin the next season on a back foot. Their season runs from August 1 to May 31 and from calving they milk twice a day, dropping to 3in2 as the weather heats up to reduce heat stress on the cows. By dropping to 3in2 instead of once a day, she says they have the flexibility of cranking up again to TAD. “If we have them on 3in2 and we get an autumn flush, we can go back to twice a day. Last year we went to once-a-day for 14 days before drying off because that is supposed to lead to less mastitis.” Through the season they also top the cows up with palm kernel, buying in 250 tonnes and feeding it daily so they can increase it if the cows require a boost, particularly on the shoulders of the season. Resulting production is between 196,000kg milksolids (MS) and 200,000kg MS (1126kg MS/ha), though they prefer to focus on per cow production which is between 430kg MS/cow and 440kg. One of the reasons their business achieves its environmental, animal welfare and financial goals is the relatively low stocking rate of 2.6 cows/ha on the farm. And that is dictated by the extended 44bail rotary dairy that limits cow numbers and Steven says the herd size is ideal for the dairy. “In a perfect world I’d milk 100 cows and they’d be all my pets. But in reality I know that’s not possible.” They have a few pets in the herd that stay regardless of whether they get in calf and produce milk and Steven says those
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Together the Proven performers Steven says pet cows in the herd are good for everyone’s mental health.
cows are good for everyone’s mental health, especially when someone is not having a good day. “When I drove a stock truck I absolutely hated dairy cows. Now we have cows that are pets and I can’t get rid of them. There’s the odd cow that doesn’t get culled and stays with the herd. You can be having a shit of a day milking and then number five turns up and the platform gets turned off so I can give her a good scratch. “We’re not just in it for the money. We’re in it for the lifestyle as well, which comes from a generational farm.” Their lifestyle improved this season by taking on a contract milker though they still work with them as needed and rear the calves. It has given Steven the chance to do some more truck driving, which he apparently hasn’t done his dash on yet. Despite being part of an industry in a region that gets a lot of flak from some of the community, Daphne says they are confident about their farming business and their ability to leave the farm in a better position for future generations. “I feel comfortable that we produce nourishing, good food with the least impact we can and I’m proud of that,” she says. Dairy Exporter | www.nzfarmlife.co.nz | December 2020
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ENVIRONMENT DRAINAGE
Left: Massey University associate professor Ranvir Singh talks the crowd through the process of water being piped into the bioreactor and the microbes denitrifying the water as it travels through the woodchips.
flowing into deeper groundwater. Where dissolved oxygen is low this means that the microbes are working, eating the carbon and splitting the O2 out of the nitrate and releasing the nitrogen as gaseous N into the atmosphere. A Further PhD project will investigate if there are ways of further enhancing denitrification in groundwater?
CONTROLLED DRAINAGE
Down the drain...or not? Words by: Jackie Harrigan
T
wo years into a Sustainable Farming Fund project the results are looking promising for the innovative drainage management technologies employed on two Rangitikei farms with artificial drainage. The project has investigated how the nitrates present in drainage water could be attenuated (lessened or reduced) through controlling the drainage and the drainage water. More than 2.5 million hectares of New Zealand farmland is artificially drained, being both a challenge (providing a short circuit to surface waters for pollutants) and also an opportunity (for farmers to lower the water table and maximise growth for pastures and crops). Reducing the time of the drainage water spent in the soil profile, however, reduces the time for subsurface denitrification, when the bacteria in the soil convert water-soluble nitrate into harmless nitrogen gas.
GROUNDWATER MONITORING The first part of the trial work has been monitoring the shallow groundwater to investigate the extent of nitrate 60
denitrification. Sampling water from tubes and screens set into the soil was sampled at levels 1-2.5 metres below the soil surface, 2-3m below the surface and 3.4-4.4m below the soil surface. Analysis of the water for nitrates and dissolved oxygen has shown that nitrate levels dropped from around 9ppm to less than 1ppm between 1m below the surface down to 3.5m below soil surface - showing that more denitrification is happening at the lower levels and nitrates are not
Controlling the speed of water in surface drains can slow the movement of surface water, holding the water in the soil profile making it accessible for plants and allowing more time for natural denitrification. Alternatively speeding up drainage removes more water to facilitate field operations. Putting in a weir and mechanism to speed up or stop the drainage in 2019, the trials have tested the nitrate levels in uncontrolled drainage water at 11g/ cubic metre NO3-N and the water from the controlled drain at 1.41g/cu m NO3-N, proving that denitrification is enhanced by intercepting H2O and slowing the movement of it through the soil profile to drains. Massey University associate professor of soil science Dave Horne estimated with a simple control structure costing $1000, the
Building the bioreactor, filling with woodchips.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
52kg mitigated across 3ha related to 15-20kg/ha at a cost of $3-6/ kg N for the refurbishment, compared with $50-100/kg N for other mitigation options. “Controlling the drainage is very effective, very cheap and very simple, with other advantages of holding up drainage in the soil profile having the effect of reducing the need for irrigation.”
WOODCHIP BIOREACTOR The third piece of the drainage water puzzle has the water from the drain cycling through a woodchip bioreactor built in the paddock. The 90m3 bioreactor is working successfully and is expected to reduce the NO3 load from 4mg NO3-N/l of drainage water at the inlet down to 0.6mg NO3-N/l at the outlet while travelling through the bioreactor at 1.5-2l/sec. “The expected N load reduction over a nine month period is expected to come out at 100-150kg N/year when we get results of that,” Massey University associate professor Ranvir Singh said. Combining the suite of techniques with the profile leaching effect, controlled drainage and the bioreactor will reduce N load to less than 0.5mg NO3-N/l, which is close to the natural level, Singh said. The bioreactor has an expected life span of 10-15 years before the chip is broken down and composted and no longer processing the NO3.
COLLABORATIVE RESEARCH: “Research is ongoing in other parts of the country to look at how to make the bioreactor more efficient in the winter - can we load more carbon into the system, is there an optimum size of woodchip to use, is the N removal affected by temperature?” Singh says. The research group are also developing calculators to determine optimum bioreactor size and flow rates. The project has one more year to run and the results are showing that controlled drainage techniques could be a great N loss mitigation for artificially drained farms.
NEXT STEPS: A 150m bioreactor is to be built and monitored on Andrew Hardie and Helen Long’s Te Maunga dairy farm near Dannevirke. The bioreactor will process drainage water from a 65ha section of the farm including runoff from farm races. Te Maunga is a sensitive environment, bordered by both the Manawatu and Maungatewainui rivers. The Hardies have used numerous strategies to minimise their N loss footprint, including milking OAD, dropping cow numbers, reducing N applied and using coated N products, moving from turnips to chicory, increasing the effluent pond area and being more strategic around when the effluent is applied to the 40-50ha effluent area, riparian planting and wetland areas. Andrew says they are excited about the possibilities of using bioreactors to further minimise their N loss. “If this bioreactor works well we have three other areas of the 240ha milking platform that each drain through a point, potentially building a bioreactor on the end of each is a good mitigation option.” 3
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
When moisture is held up in the soil profile because the drainage has been stopped, more NO3 is removed from the water and plants have more ready access to the moisture.
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ENVIRONMENT TRAPPING
Trapping rats to reduce leptospirosis risk Words by: Richard Rennie
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unique onfarm trapping project aims to reduce resident populations of rodents and improve farmers’ understanding of the link between pests, the environment and leptospirosis. Animal health company Zoetis has teamed up with trapping company Goodnature to set up a trapping network across three Wairarapa farms to try to curb rodent numbers. Victoria Chapman, Zoetis vet advisor, says rats on farms can be a key vector for the transmission of leptospirosis when stock ingest feed or grass that infected rodents have urinated on. “The debilitating effects of lepto’ on humans is quite well known, but it also has a negative effect upon stock productivity in herds or flocks infected with it,” she says. Robbie van Dam, co-founder of Goodnature, says the opportunity to set up the trap networks on the farms has a twofold effect. “Not only are they helping to break that cycle of leptospirosis transmission but also help reduce the populations of pests that have a significant environmental impact, particularly on farms where farmers have been working to rebuild native biodiversity.” The A24 “Chirp” upgraded traps are Bluetooth enabled. When linked to the farmers’ smartphone through an app, they record the time, day and air temperature when each pest was killed. They will also issue an alert when the bait needs renewing or the gas canister that powers the trap needs replacing. 62
Wairarapa farmer and catchment group member Mark Guscott installing a Good Nature trap as part of the leptospirosis project.
“The farmers already have enough things on their plate during the day, and these smart traps just take some of the memory load off them.” Martinborough drystock and cropping farmers Mark and Susannah Guscott have a network of 50 traps installed around their 800ha property, which also includes 20ha of covenanted bush. As part of the Ponatahi Eco Zone, they are aware of the impact rodents like stoats and rats have on the environment. Over the years they have used poison to control rats initially, but also possums. “We think we have made inroads. We certainly see more native birds around than we used to,” says Mark. He has welcomed the opportunity to
extend the trap network with Goodnature and Zoetis. “Lepto is a disease you link to cattle, and I have friends who have had it and it’s a disease that can hang around for a long time. You wouldn’t want it if you can avoid it.” Further north at Carterton, dairy farmer Scott Dormer is also participating in the programme with traps located near the farm creek and around the farm dairy and buildings. “In the first week one trap took out eight mice in one night.” He welcomes the chance to nail any rodents on his farm. “Rodents in the stock feed is something we try to avoid. They destroy the quality
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
“The farmers already have enough things on their plate during the day, and these smart traps just take some of the memory load off them.” and spread lepto when they get into it and the cows eat it.” While Scott has never had lepto, he knows some farmers who have. “It’s a nasty disease and can affect you for quite a while after you first get it.” He appreciates having traps that don’t need to be checked manually every day, and is looking forward to having a few less rodents as a result. For fellow dairy farmer Clint Renall, anything that helps reduce rat numbers is welcome. His father has had leptospirosis, and still struggles at times with its aftereffects. “And it has been a few years now since he got it.” With staff on the farm, Clint
religiously vaccinates his herd to reduce any infection risk, and the Goodnature traps offer a simple, selfmanaging solution to laying poison bait around the farm. Goodnature’s Robbie van Dam says the farm trap project will generate some valuable data on rodent activity and trapping rates, and help in the design of future programmes. Victoria Chapman of Zoetis says the trap network is an invaluable part of a farm’s biosecurity. “Along with vaccination and hygiene, trapping can play an integral role in controlling a disease as problematic for livestock production as it is for human health.”
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STOCK DAIRY GRAZING
WIN: Words by: Sandra Taylor
B
y adding value to the dairy support package they offer, Waikato farmers Phil and Megan Weir are generating returns on a par with a bull beef system. For the past three years, the couple have farmed 250 hectares (the cattle platform is 180ha) in Te Pahu on the slopes of Mt Pirongia, in the heart of Waikato dairy country. They run breeding ewes, trading cattle and dairy heifers and have developed a grazing package that generates a premium and delivers a product that benefits the client’s dairy operation by ensuring they have well grown heifers entering the herd. Phil, who is a Nuffield scholar and Beef + Lamb NZ farmer council member, says they have been grazing heifers for
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win for grazing partnership
dairy farmers Craig and Kylee Mora for three years. Their relationship has grown to one based on trust rather than formal contracts and an understanding that the couple will guarantee the heifers hit their pre-mating and calving target weights, irrespective of seasonal fluctuations in growth rates. The couple farm on a mix of owned and leased land and because they stretched themselves financially to buy land, they appreciate the surety of cash flow offered by dairy support. But after one year, they knew they needed to generate more income from the heifers and to do this they had to add value to their existing grazing arrangement. “Dairy heifer grazing is great for everyone in a good season and terrible for everyone in a bad season. In a bad season, the sheep and beef farmer can’t
afford to feed the heifers so they don’t reach their growth potential.” What Phil and Megan have tried to do is remove seasonal variability and generate enough income to ensure the heifers leave their farm at 90% of their mature liveweight (450-460kg) and are ready to enter the herd as well-grown, high producing cows. Phil says under the traditional model, the grazier is making money when feed is cheap but is in danger of losing money when feed is expensive, as was the case last season. By charging a premium – $10.50/ head/week for calves from December to May and $14.50/head/week from May to May – the Weirs can have a stock policy that allows the heifers to meet their growth targets. “We’re just focusing on what’s important.”
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
‘Dairy heifer grazing is great for everyone in a good season and terrible for everyone in a bad season. In a bad season, the sheep and beef farmer can’t afford to feed the heifers so they don’t reach their growth potential.’ Phil and Megan Weir appreciate the surety of cash flow offered by dairy support but have designed a system to increase that income by adding value to the service they provide.
With the help of a consultant, they carried out Farmax modelling to compare dairy grazing with other enterprises such as bull beef. “That’s how we set the price so that it is equivalent to a beef system from a profit perspective.” The bulk of the calves arrive on the Weirs’ farm on December 1 weighing about 140kg and leave 18 months later in May. Another small number of calves arrives in May. The Weirs agree on an animal health plan developed by the Mora’s vet and they are responsible for executing it. “The only treatment we don’t do is zinc boluses because it can be upwards of 550
animals that need treating. When the need arises, they employ a vet technician to do the job, although Facial Eczema hasn’t been an issue for the past two years.” The layout of the farm, with a road through the middle, means the Weirs can run dairy grazers on one side and trading stock on the other, so biosecurity risks are minimised. The heifers are grown out on ryegrass and clover pastures, but to get through the drought last autumn, the Weirs grew kale and bought in palm kernel. Phil says they had raised the grazing price prior to the drought and this enabled
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
them to spend the money on the palm kernel to help maintain growth rates. Autumn is always a pinch time for the Weirs and next year they will be using home-grown maize silage to fill any feed deficits. While they would use palm kernel the price can get too high, and with maize they can control costs. If they have a fantastic season and don’t need the crop, they will sell it as standing feed. They also make grass silage out of spring surpluses for use in autumn. All stock are wintered on pasture, and the heifers are run on a rotational grazing regime with Phil applying techno or celltype grazing principles. “One of the challenges is that we don’t carry enough stock over winter to fully
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The Weirs appreciate running heifers on the farm as their young children are involved in helping with the work on the farm. Phil and Megan Weir with Henry, 6, Margot, 2, and Freya,4.
utilise feed in spring, so we buy in trading stock in the autumn and early winter with the plan to have these trades off-farm by Christmas.” Initially they were weighing routinely, but as trust has been built between Phil and Megan and Craig and Kylee, this has stopped. Instead they have identified critical dates and these include six weeks after arrival, a month before mating so they can ensure all the heifers will be at the 300kg mark at mating, and their leaving weights. They have learnt that it is difficult to put weight on the heifers over late summer and autumn, hence the use of high energy feeds such as maize and palm kernel, but also the focus on maximizing growth rates over the spring and early summer period. While most of the heifers leave in May, the Weirs hold onto a few for an extra month which is an arrangement that suits both parties. Phil says there are hidden costs with dairy grazing such as the labour costs associated with feeding out, but similarly bulls have hidden costs, especially in damage to infrastructure and equipment. From a health and safety point of view, the dairy heifers are a better fit for the couple who run a family farm of which their three young children are a big part. 66
WELL-GROWN HEIFERS BENEFIT THE DAIRY BUSINESS Dairy farmer Craig Mora says they simply cannot afford to have under-grown heifers entering their herd because they cost them so much through poor lactation and high empty rates. For this reason, they are willing to pay a premium for grazing and invest in the future performance of their herd. “Under-grown heifers just fall out of the system.” Such is the value that Craig and his wife Kylee place on heifer grazing, that they suggested Phil and Megan work out the true cost of heifer grazing, including opportunity costs, and base their rate on that. This allows the Weirs to do the best job they can. “Too many graziers don’t base their price on anything.” Craig acknowledges that it is very hard to find good grazing and they value the Weirs’ ability to produce well-grown heifers. “We just couldn’t afford for them to switch to bull beef.” Their relationship is one based on regular communication and mutual trust, and as both parties are at similar ages and life stages this has helped build a more personal relationship. Craig says they are always more than willing to help Phil with the heifers if required and at artificial breeding time Phil will yard the heifers while they carry out the insemination work.
The Moras play their part in the relationship by delivering well-grown (average 140kg) calves to Phil and Megan and they will hold back lighter calves and grow them out for an extra five months before sending them off to join their herdmates. At a value of around $1000/heifer, Craig and Kylee like to keep an eye on their future milking herd and they cannot understand dairy farmers who send their heifers off to grazing and don’t see them again until they return. Craig admits that when they first entered into a grazing arrangement with Phil and Megan they were weighing the heifers a lot more than they are now, but as the relationship has developed, so too has trust and they know the heifers are being fed well every day and will meet their target weights. Craig feels they are now in an arrangement that works well for everyone. He admits that there will be fluctuations in profitability due to seasonal variability driving the price of feed up or down, but on average it needs to be fair so that both parties benefit from the arrangement.
• B+LNZ works alongside DairyNZ running dairy heifer raising workshops and offers a range of feeding, nutrition and management resources on its website.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
VET VOICE HEAT STRESS
Is heat stress affecting your herd reproductive success? Words by: Lisa Whitfield Production Animal Veterinarian
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eat stress has been mentioned a lot in the last few years and is a buzzword at discussion groups leading up to summer. It has been clearly demonstrated that heat stress has a significant impact on cow welfare and production. The reproductive impact of heat stress is not insignificant either, and consideration should be made to heat stress days which occur over the mating period. Cows
experience heat stress where energy balance from reduced feed there are ambient temperatures intake, changes in reproductive exceeding 25C, or at lower hormone levels and damaged temperatures when the follicles are all substantial humidity index is above 70%. problems when it comes to Heat stress impacts not only establishing pregnancy. the fertility of the cow and her Changes in physical activity ability to become pregnant in the include a reduction in the display of Lisa Whitfield first place, but it also reduces her heat behaviour during oestrus, which ability to maintain pregnancy. is so heavily relied on to detect when The behaviour of a cow is altered when she is ready to be bred. she is experiencing heat stress – she is Heat displays may be both weaker and of less active, spends less time grazing and shorter duration. spends less time lying down. Negative This is not only due to the physical effect
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Tree lines giving the herd the option of shade on a hot afternoon.
of excessive heat changing the normal behaviour of a cow. The granulosa cells, which line follicles and release the hormone Oestradiol, which drives the act of heat behaviours just prior to ovulation, are very sensitive damage from high temperatures. Developing follicles which contain the oocyte from which a pregnancy will eventually establish, are susceptible to damage from high heat up to 42 days prior to when they are ovulated. The first month of pregnancy is the most sensitive part of gestation where damage from heat stress, may result in the loss of pregnancy. This means those hot days in early to mid-summer could potentially be affecting a substantial number of early pregnancies in spring calving cows. Bull fertility must not be forgotten either as heat stress resulting in a high peripheral body temperature damages spermatozoa, and can render a bull infertile for many weeks following the heat event. Mitigating the effects of heat stress is challenging and requires short and long term planning. The provision of enough shade and fresh water to meet the needs of the whole herd at peak demand has practical limitations on most farms. 68
The first month of pregnancy is the most sensitive part of gestation where damage from heat stress, may result in the loss of pregnancy. With a long term view, planting trees to provide large areas of shade is both good for the cows and the environment. It would be good to see someone design a portable shade system which is able to withstand the variable climate of New Zealand’s pastoral farms. Reductions in non-voluntary physical activities should be considered. This may include: • Grazing the herd closer to the shed to reduce commuting distances to afternoon milkings or night paddocks • Reducing crowding in the collecting yard • Controlling of nuisance flies from early in summer, right through the end of the hot season. Flies not only create irritable cows, but will drive crowding behaviour, tail swishing, stamping and head shaking. NZ farms struggle with the practicalities of reducing heat stress in large open spaces. There is a gap in the market for a durable, portable shelter for use in large open spaces where many animals need access at once.
Perhaps light coloured, breathable covers could help our black cows? In areas where infrastructure is established, systems can be put in place such as: • Creating air flow enclosed sheds by opening doorways or using industrial fans • Using misting systems over yards to create evaporation • Providing water troughs on races for cows walking long distances In summary, heat stress has known negative impacts on cattle reproduction. It is a practically challenging problem, and there is scope for the development of shelter and cooling systems which allow for the management of groups of cows in open spaces which are exposed to high ambient temperatures. Thought should be invested early on to changing management practices which exacerbate heat stress. • Lisa Whitfield MVM (Distinction) BVSc Production Animal Veterinarian.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
VALUE OF DAIRY
The year dairy joined the essential few Words by: Tim Mackle
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he year 2020 was a year where dairy faced a range of challenges head-on, while capturing opportunities too. Stepping up as an essential service was a credit to farming but also a challenge, as we faced issues farming during a national lockdown. Being an essential service for New Zealand is a nod to the value we provide our communities, and the world. Keeping everyone safe, while producing food and much-needed export income for NZ, was an experience I suspect few in farming will forget. All our industry organisations, including DairyNZ, switched focus to support the
issues farmers would face as a our sector. As we head into 2021, result – helping make sure we plan to continue a range of Moving Day could go ahead, work to ensure we have great advocating for visa extensions workplaces and that dairy for migrant workers, and is attracting talent onto our information to ensure farms. farmers complied with the new Covid-19 rules. Covid-19 also VALUE OF DAIRY Tim Mackle prompted a campaign to highlight Covid-19 has also shone a light on the opportunities of working in the dairy sector in NZ. dairy. Dairy is playing an increasing role as a In June, DairyNZ launched the GoDairy source of income and employment, but campaign, offering Kiwis who lost jobs showing the public the other great work due to Covid-19 the opportunity to move we do helps increase understanding of into a dairy career. This is a positive step dairy farming. toward bridging the staffing gap on farms Our Vision is Clear campaign has been by drawing newcomers into our sector, and sharing stories of environmental change received wide-reaching public exposure for both onfarm and in our communities, with
“making milking easier and faster”
See our website or phone for more info.
for circular and s te ga g in ck ba e iv ct fe ef ut bo A rectangular dairy yards
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a growing number of Kiwis over the past two years. This included reaching more than 400,000 people through The Vision is Clear website, and an average of over 500,000 on social media this month alone. These stories, and all the work being done in the sector, is helping deliver some very positive shifts in the way the community perceives dairy. Our most recent public perception survey found 73% of people felt positively towards dairy farmers and 62% of all respondents felt positively towards the dairy sector (up from 58% a year ago). We know some of this stems from the greater recognition of dairy farming through Covid-19 disruption, but also from continued improvement in farm practices.
SUSTAINABLE FARMING
Being the most sustainable producers of milk offers our sector great opportunities. Our future is bright. We are making tremendous strides in actions to reduce our farm footprint and, while we need to continue that, it’s important we acknowledge the progress we’ve already
made. We are investing in a wide range of research to help make it easier to develop practical onfarm solutions to reduce footprint, while increasing profitability. Some of this work includes trialling plantain to reduce farm nitrogen loss and a partnership in PgGRC which continues to seek technology to reduce methane output. Policy also plays a big part too. This was highlighted through the new freshwater policy which many farmers and sector groups provided feedback to. DairyNZ alone developed a 240-page submission and submitted 27 technical papers to Government last year. Some changes were made by Government and work continues in this space, liaising with government, partners and local councils. Next year DairyNZ will continue to work positively and constructively with the Government, advocating on behalf of dairy farmers for outcomes that are pragmatic and fair. We want Government to back our sector through policies which support us to deliver economically and environmentally. For farmers, we know how important it
is to make environmental improvements while running a profitable business, which is where our Step Change programme comes in. This project will help farmers increase profitability while making progress towards environmental goals and adapting to future requirements. We have also made good progress towards the eradication of Mycoplasma bovis. As part of that, over 1000 farmers have used the free compensation service offered by DairyNZ and Beef + Lamb New Zealand. DairyNZ will continue to be actively involved in the M. bovis programme, at both a governance level and on the ground with farmers. As we look ahead to the rest of the season, DairyNZ will continue to work with you, and for you, to deliver a better future for all New Zealand dairy farmers. Now with Christmas and New Year coming soon, I hope you and your team take the opportunity to enjoy time with family and friends, and recharge as we look ahead to 2021. • Dr Tim Mackle is DairyNZ chief executive.
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Confident in their business Words by: Chris Neill
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uawai sharemilkers Luke and Sunny Oud experience in the Northland Extension 350 project was highlighted at an E350 field day in November when they shared their story of change. As contract milkers on the family farm, they started as target farmers in the project along with Luke’s parents Tony and Sue two and a half years ago. The farm is now operated by the family’s fourth-generation having previously passed from Sue’s grandmother through three generations of women. Supported by farmer mentors Peter Flood and Garth Preston and farm consultant Tafi Manjala, the Oud family have completed many of the goals they initially considered aspirational. For Tony and Sue it is a realistic succession plan and for Luke and Sunny a new life adventure in dairy farming. The transition from year 1 when the challenges were “too hard and we wanted to quit” to now boldly asking, “come on then, what’s next” is inspiring. The two generations of Oud farmers have come to understand and actively support each other to achieve their vision and goals. Communication and trust are key ingredients along with the desire to learn and adapt to change. It’s been quite an intense journey with some key learnings that Luke identifies are now part of their business: • “It’s really important to invest time in the $1000/hr jobs rather than burning all your time on the $20/hr jobs.” • “Employing staff to get work done can be more profitable than spending capital.” • “Knowing your targets to monitor your progress against and the trigger points to identify when you have to act with a new plan are must haves.” • “Maintaining pasture residuals is the key to feeding cows what they want at the lowest possible cost.” • “Body condition score 5 at calving is non-negotiable.”
Luke and Sunny Oud present their planning wheel.
• “Farm Environment Plans are not as scary as expected.” • “Reducing emissions – we’ll find out what we need to do and just deal with it.” • “Running a profitable business is vital, so make it happen.” • “Regular monitoring of our cash flow budget is essential.” Now in their first year of sharemilking, Luke and Sunny are highly motivated to reduce debt and be ready for the next “adventure” which could be more cows or land. They are hungry for opportunities to capitalise on what they have learned to date. Through the project they have accepted the balanced approach of profitability, environmental sustainability and personal wellbeing. They see a profitable, sustainable farming business as their means to achieve this. Sunny manages their business finances and uses the DairyNZ Sharemilker budget template. The first draft of the budget is based on the previous year with adjustments for the milk price projection and expenditure required for known system changes or plant upgrades. Sunny utilises her effort of completing bi-monthly GST returns to provide actual
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
expenditure and income for the period to update their budget. The updated cash flow budget supports an informed conversation where Sunny and Luke look at options for applying additional income to debt reduction or reassessing the need and timing of expenditure. If there is a significant variation to the original budget, they will do a full budget review to ensure the year is profitable. The discipline of working together to agree on and work within the budget gives both Luke and Sunny a greater sense of ownership of their business and pride in what they are achieving. Luke is comfortable with justifying expenditure such as a new tractor to prove to them both that it is a financially sound decision. Regular reviewing of their financial position as well as projected income and expenditure gives them confidence that they control their business. It enables them to manage unexpected needs for expenditure which in turn maintains a positive relationship with their financier. Luke and Sunny recognise the necessity of selling themselves as competent financial managers to their accountant and banker as pursuing future opportunities relies on their confidence. 71
Experimenting with transition
Research conducted on Dairy Trust Taranaki’s Kavanagh farm is considering the benefits, and downsides, of a transition to autumn calving. Anne-Marie Case-Miller reports.
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ompleting his ag science masters degree through Massey University, with support from the DairyNZ Masters Scholarship, saw Jake Jarman make a retrospective analysis of transitioning to autumn calving, based on data collected from the Dairy Trust Taranaki’s Kavanagh Farm. The 208-hectare research farm, next to Fonterra’s Whareroa dairy factory near Hawera, transitioned to autumn calving between July 2017 and March 2019, with Jake beginning the data analysis in February 2019. “When I came on board, the experiment had been underway a while and the cows had just finished the extended lactation period and were about to calve the next month.” “The hard and fast transition process
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comes with both risks and benefits and that’s what we were looking at,” Jake says. The benefits of that process include completing the transitioning of the whole herd at the same time and maintaining the herd. “If you’ve got a connection to the herd, maybe you’ve been breeding it up for years or maybe you just don’t want to sell it, then the extended lactation is a good option. You also get to control that process all the way through.” The risks include the unsuitability of New Zealand dairy cows for extended lactations which leads to cows gaining above-optimal body condition post 300 days in-milk, which can result in problems around metabolic risks heading into calving. “Because the cows don’t produce much milk later on in the extended lactation
period, there’s going to be a lack of milk production in the second financial year, relative to if the farmer had stayed spring calving,” Jake says. The data suggests seasonally specific mismatches between feed supply and feed demand. “What we saw over time was through the first winter period when the cows began the extended lactation, a lot of supplementary feed was needed as there wasn’t enough grass available to meet cow feed demand. Conversely, the first summer when they’re just about to be dried off, the cows’ feed demand was really low relative to the pasture supply. Through the decision rules of the trial, deferred grazing was chosen as an option for the herd. This is believed to have led to an unintended consequence of some cases of ryegrass staggers in the herd just before they started to calve.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Left: Jake Jarman and Debbie McCallum, DTT general manager on Kavanagh farm. Above: Drone view of Kavanagh farm.
‘Because the cows don’t produce much milk later on in the extended lactation period, there’s going to be a lack of milk production in the second financial year, relative to if the farmer had stayed spring calving.’ Swing to autumn calving There are multiple different reasons to choose autumn calving, including financial, the change in feed demand and the social aspect. The winter milk premium through Fonterra and offered by other supply companies is also an attractive benefit. “A major driver of this research in South Taranaki is that there is a feeling that summer pasture growth is becoming more variable from year to year and the winter pasture growth rates are increasing.” “This has driven a lot of farmers in the area to change to autumn or split calving to mitigate the risk of the summer dry and capitalise on greater winter pasture growth.” Other farmers spoken to referenced a social or personal aspect for the change, with family holidays at the beach during January or February a preference to holidaying in Australia during June or July. Calving in March and April when the weather is warmer is also appealing and there is anecdotal evidence that the calves respond better and grow quicker. “We briefly looked at some weather trends in South Taranaki and we saw evidence of an increase in minimum
winter air temperatures over the past 30 years, which supports comments from farmers that we’re growing more grass in winter,” comments Jake. “However we’ve also got to remember we’re putting on a lot more nitrogen and managing the pasture better and growing new pasture species. There’s a combination of factors leading to greater winter pasture growth.”
Show me the profit The data was recorded over all facets of the farm system, from milk production, supplementary feed, pasture growth, body condition score, reproduction and different economic modelling of the cost, expense, profit and revenue. “We also looked at different scenarios over a 10-year investment horizon to assess whether changing to autumn calving is a good investment,” Jake says. Results from the trial concluded a farmer should only consider changing to autumn calving if they can have an economically sustainable system without a winter premium. he data showed that over 10 years, the autumn calving system was a better investment than spring calving, if the farmer received the winter milk premium –
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
of which there is no guarantee. “This was also based on the assumption that the autumn-calving farmer produced more milk than the spring-calving farmer, and we only had one year’s data to base that off.” The trial is continuing at Kavanagh Farm until May 2023 and Jake is keen to retrospectively analyse the data in three years’ time to find out if the autumn calving farmer performs better than the spring calving farmer. Jake recommends any farmer considering transitioning to autumn-calving talk to a consultant and their bank representative and with local farmers who have already transitioned. “I think there lots to learn from farmers who have ‘been there and done that’ and it will also help with the region-specific details.” Jake concludes that autumn calving is highly specific to the unique circumstances of the farm, the region, the climate, the finances of the business and the goals and aspirations of the owners. “Not every single goal is 100% profit-driven. You’ve got to consider all goals and values, not just profit. You can’t put a price on having a holiday in summer with your family.” 73
My challenge to you... An internship programme can be a win:win for the owner and the students as well as bring good cheer to the Christmas party.
Words by: Anna Campbell
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or as long as I have been involved in agriculture, our industry has lamented our poor image and the fact that we struggle to attract young people. I have heard people say we need a rebrand, agriculture is a term which brings to mind a lack of sophistication. In the game of cricket, an “agricultural batsman” is someone who dispatches the ball to “cow corner” in a rather basic manner! Suggesting an agricultural career to a youngster will not automatically make them think about producing the finest food in the world, advanced genetics, machine learning, international food chains, global food security, financial modelling or GIS mapping. Yet, those of us in the industry understand agriculture encompasses all of that and so much more. Various government and industry initiatives have produced scholarships for students and held open days to attract youngsters. This has helped, but we need more - we face an aging workforce, challenges in world food supply systems and a growing rural-urban divide. It will take a commitment from all agriculturalists to turn the tide - what might that commitment look like? This year, AbacusBio has taken on 11 interns, we have been supported by Callaghan Innovation and the Dunedin City Council and we also commit our own funds and energy into growing these young people. This year, of the 11 students, only one comes from a course directly connected to agriculture (forestry engineering at 74
Canterbury University), the rest are general science, IT or commerce students. The students stay with us for 10-14 weeks. In non-Covid times, we also take on international interns, who work with us for three to six months, sometimes in partnership with other agricultural companies. The internship programme is a win:win for us and the students. We are able to get students working on projects we haven’t got the time or head space to investigate. This year’s interns are working on a wide array of projects including: an engineering model for a bioforestry initiative (converting forestry waste to packaging as a replacement for plastic); understanding the genetic diversity of the New Zealand honey bee population, determining how AbacusBio can grow the market for our genetic analysis product, Dtreo and a business plan for growing nigella sativa (black seed) as an alternate crop. The interns bring vitality and energy to our business and they certainly add much good cheer to our Christmas party! In return, the students learn from us technical and business skills and they learn about the breadth of our wonderful sector in what is often their first agricultural workplace. Some of the interns will go on to seek employment in agriculture. We also employ the occasional intern ourselves. One of our previous interns, Fiona Hely, is now a partner in our business. So here is my challenge to you as farmers, industry bodies and agribusinesses. Imagine if every agricultural company in NZ took on, or shared, a summer intern. A farmer who has thought about shifting to Xero for their accounting
needs, but never quite got around to it. The farmer could work with an accounting student, maybe in partnership with their accounting firm, to help them shift the business over, manage greater automatic coding and model differing financial scenarios for their business. A farmer who has long thought about modelling their environmental footprint and identifying and planting trees in areas of low productivity, could work with students to GIS map, footprint and plant new areas of their farm. A stud breeder could bring on an intern to assist with data management and developing a social media marketing campaign and, of course, a little fencing and stock work will never go amiss in a youngster’s life skills. As for larger agricultural companies, if AbacusBio can take on 10 interns, I see no reason why meat, milk, financial and fertiliser companies could not take on 30, or even 50 interns. Interns can sign confidentiality agreements within their contracts and a good programme co-ordinator can really help embed these young people in many parts of the business. Let’s think big here – the future of our industry has to be worth the investment and from a personal perspective, youthful enthusiasm does help sweep away the cynicism and negativity which creeps up as we age! • Anna Campbell is managing director of AbacusBio, a Dunedin based agri-technology company. • First published in Country-Wide December 2020.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
RESEARCH WRAP OVERSEAS RESEARCH
Using human care techniques on mastitis Words by: Chris McCullough
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educing the use of antibiotics to treat mastitis in dairy herds is a prime focus for dairy farmers these days and a number of new solutions afre coming to the market. Mastitis costs the global dairy industry billions of dollars every year in lost production and is one of the biggest consumers of antibiotics, or at least it was. One of the latest developments concentrates on the use of acoustic pulse technology and its ability to treat inflammatory diseases in human healthcare. Based in Israel, Armenta has adapted this human care technology to increase the health of cattle by focusing on mastitis, which is also an inflammatory disease. Following a number of trials on dairy farms across the world the company found its new test had a success rate of more than 70% tackling mastitis.
Acoustic pulse technology used in human healthcare is being trialed on mastitis in cows.
A unique, simple-to-use, lightweight hand-held device, the APT-X, provides comprehensive mastitis treatment in just three minutes, with immediate results. During field studies on dairy farms around the world, farmers and veterinarians applied the appropriate Armenta course of therapy to hundreds of cows with clinical or subclinical mastitis. The equipment was comfortable to use and performed well, the treatments were simple to administer, and the animals displayed no resistance.
The company says the real impact was on the cattle’s health and milk production which after treatment showed a mastitis recovery rate of over 70% with normal SCC levels and infection-free. Also, about 10% more milk was produced daily using the APT-X than without treatment. These improvements in productivity and animal welfare meant an 80% reduction in culling rates, and a measurable and rapid improvement in farm profitability. The APT-X system consists of a pulse generator (APT-X1) which is a hand-held device that generates the acoustic pulses through ballistic impact. It also contains an applicator unit (AM-1) which is disposable and needs to be replaced every 20 to 80 cows. The design of Armenta’s APT solution means it uses pulses that are generated via ballistic impact powered by high-pressurised air covering a large area at therapeutic levels and all that in a short treatment time.
Reducing methane with seaweed Words by: Chris McCullough
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Swedish start-up company is on a mission to reduce methane emissions from cows by feeding them a specially grown type of seaweed. According to Volta Greentech, there are 1.5 billion cows on the planet that together burp out 5% of the world’s greenhouse gas emissions. Co-founded by Leo Wezelius, CMO and Angelo Demeter, head of R & D, the company is on a mission to reduce emissions by providing farmers with their seaweed supplement, called Volta Seafeed. The duo claims that when this is fed
to cows at a daily dose of 100g/head, methane emissions are reduced by up to 80%. The feed is based on a mix of red seaweeds and includes natural bioactive compounds that block one of the enzymes that microbial methanogens in the rumen use to produce methane. This eliminates the majority of the methane gas the cows burp out and unlocks more energy in the form of hydrogen and carbon that previously was used to produce the unwanted byproduct methane. Volta Factory 01 will be up and running by early 2022, aiming to grow enough seaweed under artificial light to feed 12,500 cows with Volta Seafeed daily.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Wonder weed: 100grams each day of seaweed can reduce methane emissions by up to 80%.
The building will be powered by 100% clean electricity and industrial waste heat. Just like any land plant, seaweed grows through photosynthesis, so in addition to reducing methane emissions, the seaweed produced in Volta Factory 01 will be able to absorb 1000 tonnes of CO2 per year. 75
WELLBEING KEEPING CHILDREN SAFE
A child’s perspective Small children view safety from a different perspective to adults. Harriet Bremner reports.
I Harriet Bremner and Poppy.
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magine your child is six years old and catches the local school bus every day. They are sponsored with high vis vests to wear while waiting by the road. A great initiative to help keep our children safe as they are more visible. But what if you heard that child say: “I can stand out on the road now and won’t get run over because I am wearing my high vis vest.” I heard this very thing once a few years back and remember thinking, wow, is this what health and safety has come to in our country? Now, don’t get me wrong, the vest is a great idea BUT the child did not really understand the purpose of it. Sure, it works to be more easily seen but it doesn’t make them instantly bombproof. At what point have we stopped teaching people to primarily make good decisions first, always? If you make a bad decision while wearing a brightly colored vest, you can still be badly hurt or killed. We want our children to grow up being adults who are able to think for themselves and make good decisions that will keep them and others around them safe, no matter what situation they find themselves in. As adults, it is our responsibility to engage in conversations with children about the ‘why’ so that they have a full understanding of what we are saying. Does it ever make you wonder why your children ask you ‘why’ all the time? The basic reasoning for this is because they need the ‘why’ to help them understand things in the environment around them. I believe children are going to be a gamechanger in the space of health, safety and wellbeing in our rural communities. First, they are not affected by the tainted brand that we, as adults, generally perceive health and safety to be. We think it’s just about
having that shiny paperwork folder and boom, we are compliant. We are wrong. So incredibly wrong and it is time that the behaviour towards this starts to change so that the culture in the future has a fighting chance. Children are the future, the future in ag, our future farmers and our future experts and probably of things we aren’t even aware of yet so let’s give them the best start in practical, hands on knowledge when it comes to farming and good decision making. Our take on the world and our perspective is different to a child’s both literally, in a physical sense and based on the life experiences that we have had compared to them. Take for instance, our view of the back of a vehicle…. As an adult we are able to physically see more and possibly be seen due to our size. A child, however, cannot be seen if they stand in that same place and this is where they get hurt. We might casually say to the child, ‘don’t stand there/here’. They may ask why and are told just don’t it’s not safe. Safer Farms and Gurt and Pops recently collaborated with NZ Young Farmers and Strath Taieri School in Middlemarch to run a practical farming health and safety day for the children plus two other schools who came along as well. The day was a roaring success and started off with the children doing first aid training in class for the morning with local Police. It is incredibly important that children know how to handle an emergency situation as they could be presented with this at any time in their lives. The other two schools then arrived, and all the children had a sausage sizzle. During the second part of the day, nearly 120 children were put into their groups with leaders from
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
We want our children to grow up being adults who are able to think for themselves and make good decisions that will keep them and others around them safe, no matter what situation they find themselves in.
the student council at Strath Taieri School. They were then to take part in a wide range of modules where they would practical ways of how to keep safe in situations. The parents and community members supplied the tools, machinery and more so that we could run the day. From the NZ Police tractor, to motorbikes, trailers, side by sides and more, children engaged in a day where they identified risks and hazards and had important conversations around these. They completed tasks like stropping down a load safely on to a trailer as a team and explaining why this is important. The children were learning to use their Think Safe Brains, a tagline that I created in my Be Safe, Be Seen picture book. The idea of this is to encourage adults and children to be able to stop, think and make the best decision possible in any moment. We cannot teach every single situation that you or your children could come across while on farm, but we can install clear messages about good decision making that can be applied to any situation on farm and in life. My aim is to encourage parents to have these important conversations with their children and give them the why so that they truly understand why you have told or talked to them about not doing something e.g. walking/running/standing in a blind spot behind a tractor or truck. We want children to wear their helmets when riding their bikes because they know it could save their life and it’s the best decision to make‌ NOT because it is compliance.
Kelly Abbott is standing in the tractors blind spot. If the driver was in his/her seat they would not be able to see her.
This photo gives the illusion that there is nothing behind the tractor but the drill. However Kelly is still standing in the same spot! It is all about perspective and making sure you have conversations with your children so they know the dangers.
If we are making health and safety decisions based around compliance then we are not having the right conversations and these attitudes and behavior’s need to change today, starting with our children. We all want everyone to go home safely at the end of every single day. It was amazing to see that parents and grandparents took time off their farms to supply equipment needed for the day and then got actively involved in the running of the day. I have a dream for these farm safety days to happen all over the country. It is not just about farm safety; it brings small
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
communities together and celebrates our farming industry. Next month I will share with you some helpful tips and tricks to having these conversations with your little people so that you know everyone making good decisions on your farm during the school holidays when we know life can be a little hectic! I wish you all a very safe and healthy Merry Christmas and Happy New Year with the people you love. Remember it is the decisions that you make in a moment that keep yourself and your loved ones safe so always, always, stop, think, then decide. 77
DAIRY 101 SCANNING
40 days following conception.
50 days following conception.
65 days following conception.
Early ultrasound scanning is safe and useful Story by: Karen Trebilcock
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ating has gone pretty well, you think, although more than a few cows came up twice for artificial insemination (AI) and one came up three times. Not unusual, but the calving report will show the cow holding to the last insemination and you know that doesn’t always happen. Sometimes the cow will be pregnant to the first one. And with the new wintering rules requiring no calves to be born on crop you’re worried because you know you won’t have accurate calving dates. Also there were a lot of cows in the herd that came up only once for AI. Was the technician that good that they got almost all of them in calf? What to do? The answer is to get your cows pregnancy scanned. And the earlier you do it, the better the accuracy of aging the calf and so predicting 78
the calving date. Vets use a rectal ultrasound machine and either a screen or goggles, and it’s a quick process either done during milking on rotary platforms or between milkings in herringbone dairies. Ultrasound uses soundwaves, not radiation. The soundwaves bounce off what is inside, producing a black and white image. Black is fluid and white is bones, and various shades of grey are the sides of the uterus and other structures. There are no harmful side effects for the cow, the calf or for anyone standing nearby. If no calf is detected, vets can then do a manual check through the rectal wall of the uterus to see if there is a calf or not, because pregnancies of less than six weeks can be hard to detect with ultrasound. Scanning at this time also finds your phantom pregnancies. These are cows that come on heat, are inseminated, then never come on heat again so it’s assumed they’re pregnant – but they’re not.
It’s not unusual to have between 5% and 15% of a herd with phantom pregnancies and it’s now acknowledged as one of the reasons why we have such poor six-week in-calf rates. The causes of phantom cows are still being figured out but cows that calve late, so have less time between calving and coming on heat, are more at risk as are heifers and cows more than seven years old. Non-cycling cows that have been inseminated as part of a PG or a CIDR programme also have a higher chance of being a phantom. A general rule is that 70% of cows should hold to the first insemination. If your non-return rate is higher than that, especially if a large number of those cows had CIDRs or PG shots, then you need to do an early scan to check. The phantom cows can be found at 35 to 42 days after insemination and given a single dose PG or a CIDR to get them back cycling. Scanning can be done at weekly intervals, so cows inseminated in week
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
The earlier you do it, the better the accuracy of aging the calf and so predicting the calving date.
one, two and three of mating can be scanned in weeks six, seven and eight. This gives you time to get the cow cycling again and in calf before mating ends. Think about using compact calving or short gestation length dairy semen on these cows so they will calve earlier and will be less likely to become phantom cows again next season. Or, if you’ve stopped AI, you now won’t have to guess how much bull power you need to finish the job. However, if you are going to intervene with phantom cows, you have to trust your records because a cow pregnant for only a couple of weeks will probably show up as empty with the scan and the PG or CIDR will abort the calf. If you have tag double-ups or dirty tags that are impossible to read, don’t do it. And it’s probably not something to do after the bulls have gone out as those matings can never be accurately recorded. Early scans, between 35 days and 90 days from conception, also accurately age the calf so you can confidently split your herd into calving dates come spring. Any earlier or later than these dates and it’s too hard to tell. Before 35 days the scanner might not pick up the pregnancy and after 90 days the foetus starts to drop down into the cow’s abdomen as it grows. The calf is aged by the amount of fluid in the uterus, the presence of the amnion (also known as the birth sack) and the cotyledons and placentomes in the uterus. Cotyledons and placentomes are part of the placenta and allow the exchange of oxygen and nutrients between the calf and its mum. From day 60, when the calf is the size of a mouse, the skull or the trunk diameter is usually measured to age it using a grid on the ultrasound screen. After about day 90, when it’s snuggled down deep into the cow’s abdomen, the calf’s head is often out of reach of the rectal scanner. Depending on the skill of the person doing the scan, the aging of the calf is usually within 10%. That means a 100-day pregnancy is called between 90 and 110 days, a 40-day pregnancy is between 36 and 44 days. Dairy Exporter | www.nzfarmlife.co.nz | December 2020
75 days following conception – the skull of the calf can be clearly seen.
100 days following conception.
This means the earlier you do the scan, the more accurate the aging. Early scans can also diagnose reproductive issues such as uterine infections, mummified calves or cysts that are stopping the cow getting in calf. Again, if you do the scan early, there is time to do something about it and the cow won’t be destined for the works or to become a carry-over. A final scan can be done around the time of drying off to find any cows that have aborted. It’s too late to age the calf, and far too late to do something about getting the cow pregnant, but it’s a useful tool if you don’t want the expense of wintering empty cows. Another way to find out whether a cow is pregnant or not is milk testing. Pregnancy-associated glycoproteins (PAGs) can be detected in milk from day 28 of a pregnancy. However, the amount of PAGs won’t age the calf, and, if an animal has recently aborted it will take two weeks for their PAGs to drop, which can mean a false positive. For more information, talk to your vet. • Thanks to Steve Cranefield of Agrihealth for the scan images.
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SOLUTIONS What’s NEW? GENOMICS
Long-term genomics investment paying off
A
n investment of more than $78 million over the past decade by LIC into genomic science and genome sequencing technology is generating markedly increased productivity and health traits for dairy cows and better returns for dairy farmers. LIC’s board chair, Murray King, says the co-operative should be proud that it has built such significant genetic wealth for the New Zealand dairy industry. “Significant investment has been made to ensure LIC leads the world in pastoral genomic science, the board is pleased to see this paying off, with all shareholders able to share in the productivity and profitability improvements”. LIC’s general manager NZ Markets, Malcolm Ellis, says when it comes to breeding, LIC is investing in the long game on behalf of its shareholders, with the big prize to benefit farmers. “Farmers appreciate the time lag of genetic gain between putting quality genetics into their herd and seeing the resulting benefits. But through sustained farmer shareholder investment and a wealth of genomics data we are delivering an increased rate of genetic gain within the bulls that arrive onfarm each year,” Ellis says. “Coupling this with good cows and a good herd presents a real opportunity to further sharpen up the New Zealand dairy herd’s efficiency – and its ability to deliver significant, sustainable productive and financial gains for farmers and our country overall.” The use of Genomic Sires has grown significantly since 2017, where just under 400,000 inseminations were completed. This year LIC is expecting to complete 1.4 million genomic inseminations throughout the country, a growth of over 1 million inseminations in just three seasons. Ellis says LIC is continuing to invest on 80
For bulls used over multiple years and in multiple teams, genomics can be adding value a decade after the bull was bred.
behalf of its farmer shareholders into R&D including genomics. “As we invest more into the space, it is pleasing to see more and more farmers utilising genomic sires, creating on-farm value out of an investment that started with innovative foresight nearly 30 years ago.” LIC’s chief scientist, Richard Spelman, says LIC has been on a genomics journey since the 1990s with the focus being increasing the rate of genetic improvement in New Zealand dairy animals. The cooperative is achieving this by shortening the five-year generation interval by genomically selecting marketable sires up to three years earlier than conventional progeny testing. “Our journey began in 1994 which was when our gene discovery programme of work commenced,” Spelman says. “The foresight shown by LIC’s board and shareholders at that time was quite remarkable and it’s what enabled us to develop our platform and build the current genetic wealth our dairy farmers currently share.” “This science investment has included genotyping over 150 thousand animals, genomically sequencing over one thousand animals and employing smart people to undertake detailed statistical
research. This investment has resulted in our work now delivering improved rates of genetic improvement for today’s dairy farmers.” In February this year LIC released its Single Step Animal Model (SSAM) which uses animal genomic information in a more efficient way; combining ancestry, phenotypic and genomic information all in one step. “Not only does the SSAM improve the efficiency of our breeding scheme, it also delivers farmers with clearer information on the most profitable and efficient cows onfarm for better breeding and culling decisions,” Spelman says. “We evaluate all information simultaneously compared to previously combined daughter proven data with DNA marker information. By combining all data at once – calculating breeding values for all animals in the population in a single-step, the evaluation is significantly improved.” Validation of the 2011 to 2014 code cohorts of LIC’s Sire Proving Scheme – animals which now have milking daughters with herd testing data, shows the use of the new SSAM has resulted in an 8% increase in genomic prediction accuracy (i.e. comparing genomic predictions to actual daughter proofs).
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
SOLUTIONS What’s NEW? TRAINING
Growing good weaners…
T
he importance of growing a healthy strong young heifer replacement is crucial when thinking about your future herd and its ability to have a stronger immunity for life within the dairy herd. It starts from birth. Most dairy farmers now realise the benefits of hitting target weights with their heifer replacements and the impacts on the stock if they do not. Calves can be compromised in their first few months of life due to weather or illnesses that can hamper their growth. Once a check has been taken it can be difficult to rectify, especially when it comes to weather challenges that are now more common in the later months of their first year of life. With careful use, homoeopathic products can support and grow young heifers and bring them through the challenges they encounter in their first months of life. By using the animals’ “natural” ability to overcome these issues and by supporting them with natural products, we help encourage the animal’s immunity to be stronger, healthier and less susceptible to bacteria and virus. Several products can be beneficial for young stock that have been afflicted by ailments such as E. coli, rotavirus, coccidiosis, ringworm, and growth disturbances (lack of assimilation of nutrients) to name a few. A Herbal Digestive Drench works extremely well to support a healthy fecal egg count and works as an animal tonic. These replacements are babies and their immune system is immature, so using products that strengthen the animal, build immunity, and encourage growth in all the right areas is important. The first year and even the second year of life has a huge impact on the longevity of the animal itself.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Opportunities to upskill
F
ree fees and flexible learning means there has never been a better time to upskill. The complexities of running a dairy farm business in 2020 have never been greater. With increased emphasis on staff welfare, environmental regulation and sound business planning, it can seem overwhelming at times. The New Zealand Diploma in Agribusiness Anna Yarndley, Agribusiness Diploma Graduate. Management is the best way to build extra skills to help grow your business – in a way that lets you fit in your study around the other parts of your life. Learning through Primary ITO means you’ll gain the skills specifically needed for your farming business, with the support of experts from Primary ITO and the polytechnic in your region. If you have been considering doing the diploma, it is now covered by the Government’s “Free Trades Training” package, which means you won’t need to pay any fees up until December 2022 so there has never been a better time to start. Primary ITO understand that your time is precious, so the Diploma in Agribusiness Management is designed to deliver the core elements required to to run a successful business in a way that works around your busy schedule. You’ll cover four course areas: Business Planning and Management, Financial Management and Planning, Human Resource Management, and Resource Management and Sustainability. At the heart of the diploma is the opportunity for you to put everything into practice as you learn, and then bring it all together into a business report at the end, to analyse and critique your own business. Primary ITO are taking registrations of interest for courses starting in February 2021. Find out more at www.primaryitodiploma.ac.nz
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OUR STORY 50 YEARS AGO IN NZ DAIRY EXPORTER
50 years ago in the Dairy Exporter December As NZ Dairy Exporter counts down to its centenary in 2025, we look back at the issues of earlier decades. 50 Years Ago – December 1970.
DATA SERVICE EXPANDING
S
ince 1967 the Dairy Board has spent something like half a million dollars on electronic data processing equipment and spends a further $250,000 in programming and processing data through it each year. Herd testing data is fed into the computer which calculates yields to date of milk and butterfat for each cow tested. At the same time it works out a production ranking within each herd, making allowance for the age of the cows and their time of calving. Production records for some 750,000 cows a year are now recorded on magnetic tape. On the artificial breeding side, a record of inseminations is supplied to the computer at regular intervals during the A.B. season and non-return rates are worked out. When the season is finished two sets of information are prepared for A.B. users: 1. The farmer’s cows are listed in calving order, showing the number of grazing days required from the time calving starts; and 2. A calving record is prepared listing each cow in herd number order and showing the bull she is in-calf to and his rating, the expected calving date and, in a tested herd, the estimated genetic merit of the cow. The farmer can use this information when selecting calves the following spring. About 60 percent of dairyfarmers use A.B. and about 30 percent use the herd testing service. 82
GRASSLAND ENERGY TRAP
“It has been estimated that our grasslands trap sunlight energy more than equivalent to the whole of our hydroelectric energy,” Sir Bruce Levy, retired Director of the Grasslands Division, D.S.I.R. said. “The more productive our grasslands, the more protein nitrogen and energy goods they will garner from the air and soil water. “To set this machine in motion and keep it in production all we have to supply as fuel is a few hundredweights of mineral fertilisers per acre per annum to galvanise the clovers into action. Any marked departure from this proven, simple cyclic routine must affect our world lead in producing relatively cheap foods of animal origin.”
BAN LIFTED ON CATTLE FROM AUSTRALIA
The ban imposed by New Zealand on the importation of Australian mainland cattle has been removed, the Minister of Agriculture, the Hon. D. J. Carter, announced last month. The ban was imposed in 1880 when contagious Bovine Pleuropneumonia was introduced into New Zealand by imported cattle from the Australian mainland. The disease was eradicated from New Zealand two years later. The director of the Animal Health Division has advised that is was now safe to import cattle from certain States in mainland Australia under certain conditions and that agreement had been
Dairy cows being herded along the road at Cable Bay, 21 miles north-east of Kaitaia, Northland, past New Zealand Christmas Trees, pohutukawas, in full flower.
reached with Australian authorities on the requisite quarantine certification, Mr Carter said. “I must emphasise,” said the Minister, “that permits will be issued only for purchased cattle in controlled shipments and that the certification does not allow the purchase of animals from saleyards or shows.”
CHRISTMAS FARE – BAKED HAM
Soak the ham overnight or for at least 12 hours. Scrub the skin with a stiff brush. Either wrap the ham in aluminium foil or cover with a ½ inch thick dough made from flour and water. Place the ham, fat side up, on a rack in the roasting pan. Set the oven to 325 degrees and cook as follows. For ham of 12-13 lbs allow 18-20 minutes per pound, 14-15 lbs allow 16-1 8 minutes, 16 lbs and over allow 15 minutes. About 20 minutes before the ham is cooked, remove from the oven, take off the wrapping and skin and score the fat by making shallow cuts to form diamond shapes. Return to the oven for the last 20 minutes, basting several times to form a crunchy glaze – Tilly. • Thanks to the Hocken Library, Dunedin.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
DairyNZ consulting officers
December Events
Upper North Island – Head: Sharon Morrell 027 492 2907 Northland Regional Leader
Tareen Ellis
027 499 9021
Far North
Amy Weston
027 807 9686
Lower Northland
Hamish Matthews
021 242 5719
Whangarei West
Ryan Baxter
021 809 569
Regional Leader
Wilma Foster
021 246 2147
South Auckland
Mike Bramley
027 486 4344
Hauraki Plains/Coromandel
Michael Booth
021 245 8055
Te Aroha/Waihi
Euan Lock
027 293 4401
Cambridge
Lizzy Moore
021 242 2127
Get it while it’s hot
Hamilton
Ashley Smith
027 807 3049
Huntly/Tatuanui
Brigitte Ravera
027 288 1244
Sign up for the weekly update on risk of heat stress in your region
Matamata/Kereone
Frank Portegys
027 807 9685
and tips for managing it. Visit dairynz.co.nz/heatstress
Pirongia
Steve Canton
027 475 0918
Otorohanga/King Country
Phil Irvine
027 483 9820
Waipa South
Kirsty Dickens
027 483 2205
Regional Leader
Andrew Reid
027 292 3682
Central Plateau
Colin Grainger-Allen
021 225 8345
South Waikato/Rotorua South
Angela Clarke
027 276 2675
Eastern Bay of Plenty
Ross Bishop
027 563 1785
Central Bay of Plenty
Kevin McKinley
027 288 8238
Waikato
Heat stress
Bay of Plenty
Dec-Mar Summary
Lower North Island – Head: Rob Brazendale 021 683 139 Taranaki Regional Leader
Mark Laurence
027 704 5562
South Taranaki
Ashely Primrose
027 304 9823
Central Taranaki
Emma Hawley
021 276 5832
Coastal Taranaki
Caroline Benson
027 210 2137
North Taranaki
Ian Burmeister
027 593 4122
Horowhenua/Coastal and Southern Manawatu
Kate Stewart
027 702 3760
Wairarapa/Tararua
Abby Scott
021 244 3428
Eketahuna
Andrew Hull
027 298 7260
Hawke's Bay
Gray Beagley
021 286 4346
Northern Manawatu/Woodville
Janine Swansson
027 381 2025
Central Manawatu/Rangitikei/Whanganui
Rob Brazendale
021 683 139
Lower North Island
Mark and Measure 2021
South Island – Head: Tony Finch 027 706 6183 Top of South Island/West Coast
Get the skills and confidence you need to achieve your unique version of personal and business
Nelson/Marlborough
Mark Shadwick
021 287 7057
West Coast
Angela Leslie
021 277 2894
success. Registrations are open for DairyNZ’s Mark
Canterbury/North Otago
and Measure business course for contract milkers,
Regional Leader
Rachael Russell
027 261 3250
farm owners, and sharemilkers. Taupo 18-20 May, West
North Canterbury
Amy Chamberlain
027 243 0943
Central Canterbury
Alice Reilly
027 3798 069
Mid Canterbury
Rachael Russell
027 261 3250
South Canterbury
Heather Donaldson
027 593 4124
North Otago
Alana Hall
027 290 5988
Regional Leader
Ollie Knowles
027 226 4420
West Otago/Gore
Keely Sullivan
027 524 5890
DairyNZ wishes everyone a safe, healthy and happy
South Otago
Guy Michaels
021 302 034
holiday season. DairyNZ is closed from December 25
Northern/Central Southland
Nicole E Hammond
021 240 8529
and will reopen on January 11. Check out events for
Eastern Southland
Nathan Nelson
021 225 6931
Western Southland
Leo Pekar
027 211 1389
Coast 29 June to 1 July, and Queenstown 15-17 June 2021. Visit dairynz.co.nz/markandmeasure
Southland/South Otago
Christmas period
January 2021 at dairynz.co.nz/events.
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
Z
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83
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84
Dairy Exporter | www.nzfarmlife.co.nz | December 2020
