Federated Farmers - April 2011

Dairy Alert

The bi-monthly newsletter from Federated Farmers Dairy Industry Group

Chairperson's commentary

Federated Farmers Dairy chairperson, Lachlan McKenzie

A big thank you to all who have helped in some way in Christchurch. Many people have put in a huge effort to help our city friends. Your efforts will be remembered long after the clean up is finished.

Seeing how the community pulled together not only makes me feel pride but also causes me to pause and think: how would my community cope with such a disaster? Do take time to talk to the local civil defence co-ordinator, think of what resources you have and who would co-ordinate the deployment of resources. Having the power out for a considerable time is an issue every dairy farmer has to plan for.

A very successful Federated Farmers Dairy Council meeting was held in Ashburton. See details below. I want to publicly thank all participants and especially the speakers who put considerable effort into preparing their presentations. I have to mention a special thank you to Willy Leferink who not only organised a very successful field trip but chaired the first day with many speakers and to time, which is no mean feat!

In the months to come Federated Farmers Dairy will continue on your behalf to lobby Government to ensure the regulations in DIRA (Dairy Industry Restructuring Act) are appropriate in the area of Trading Among Farmers (TAF), the Raw Milk Regulations and the core data base.

The roll out of the Farm Dairy Effluent Design Standards and Design Code of Practice along with development in nutrient management will be areas of keen interest to farmers.

Regards,

Lachlan McKenzie
Chairperson
Federated Farmers Dairy
Phone: 07 332 3440
Mobile: 021 382 442
Email: lmckenzie@fedfarm.org.nz

INDUSTRY NEWS

The Federated Farmers Dairy Council meeting, which also included the Sharemilkers' Section, was held in Ashburton on 17 and 18 February. The meeting agenda was very full, with most of the first day being taken up with external speakers, and the second devoted mainly to Federated Farmers' business.

High on the discussion level at the meeting was a possible development of a contract for Contract Milking. After robust discussion a remit was put to the meeting: THAT Federated Farmers Dairy develops a sound contract milking agreement as part of a suite of contracts. It will continue to promote sharemilking as a career path. This remit passed by a majority.

The importance of the sharemilking pathway in the industry was also discussed, and it was decided that a project on promoting sharemilking as a good career choice be developed.

Those attending the meeting were concerned that new entrants to the dairy industry often don't know what questions to ask before signing agreements and contracts, and this lack of knowledge often sees these people getting into difficulty. Federated Farmers has wide expertise in this area and it was decided by the Council that a workshop could be trialled where experienced farmers could arm these ‘novices' with information. If this proves successful, this could be used in other provinces who request it. The first workshop is being offered in Winton.

Tips on dealing with the media were also given. The top five were:

The message coming out of Federated Farmers must be consistent in order to be effective. If the issue is a national one, make sure you know what Federated Farmers' stance is before the interview
If a journalist rings and you are not comfortable with answering them straight away, tell them that you will get back to them. Spend this time getting information from the local president, the industry group President, the communications team etc and then contact them back, well prepared. Make sure they leave you with the correct information.
Build the relationship before the interview starts. Chat with them about family life, ask them a few easy questions to gauge their level of farming knowledge, let them get to know you as a person.
Pick where you want to be filmed - check what is behind you as that will be what viewers see. Show what would make a good photo.
Stay on message. If necessary, give the same message more than once.

And so on to some of the presentations that filled the days.

Executive member, Andrew Hoggard and Federated Farmers' policy advisor, Tessa Mills, set the theme for the day as they told of their experiences with their regional council's One Plan. They had a whole list of tips for other provinces to use when they are tackling a difficult issue, and their top ten are:

Get the affected provinces together and hold farmer meetings early in the process to get a common outcome.
Nominate a spokesperson to allow a consistent message to be given
Make sure landowners and farmers understand the implications of the plan
Ensure that the social and financial implications of the plan are well communicated
Provide clear solutions which give regard to the concerns of the council as well as landowners, and prepare to compromise
Coordinate with other industries where appropriate (for example Fonterra, DairyNZ, HortNZ)
Get the message out, with background information. Good press relationships (radio, TV and print) are important to get good information out.
Construct compelling hearing evidence using case studies for the hearing commissioners
Get farmers to present their cases in practical terms. Show how/where the plan fails; and
Hold a trial run of the hearing process to give those planning on speaking an idea of the proceedings and the time limit.

John Donkers, of the Canterbury Water Management Strategy, then spoke of how, through consultation, a range of targets for the community can go some way to shortening the Resource Management process. For Canterbury, these targets were environmental, economic and irrigation ones. John acknowledged that the task of balancing the targets is a challenge. This strategy will, however, allow more focussed scientific research and will add depth to the inevitable ‘value judgements' that will need to be made. Keeping the community (both rural and urban) informed is necessary as their understanding will be important in driving this forward.

Kim Drummond, of Environment Canterbury (ECan), spoke of how farmers and ECan are working together in order for farming to ‘tick all the right environmental boxes' and how a good system of self auditing can help.

James Tricker, also of ECan, spoke of the Eiffleton Community Irrigation Scheme (ECIS) where the ECIS will hold all the consents for those farms belonging to it. In return, users will have to undergo a self auditing scheme and provide an annual report, and ECan will provide one operational package. This allows for less regulation by regional council and more control for farmers.

Barbara Stuart, of the Landcare Trust spoke of bridging the gap between the rural and the urban communities and how the combined approach leads to better outcomes for all. Key tips for success were:

Engage with private landowners
Understand the issues
Use farmer knowledge
Make good use of science
And don't forget to celebrate the successes

She did caution that getting long term change takes time, and closed by saying that turning back the clock is not an option for farmers and communities and that change requires a team effort.

John Penno, Synlait, in his provocative presentation entitled ‘Getting dairy onside with kiwis' raised the public's perception of farmers as being that of: farmers are making money at the public's expense, New Zealand will become one big dairy farm, and farmers will then sell up the land to overseas' interests. He went on to say that farmers were supporting this perception by engaging in an issue-by-issue debate and were losing every time. Debates around inductions, ETS tax on productivity, offshore land sales and Canterbury's water allocation were being lost. He noted farmers who were in breach of their effluent consents were fuelling the "dirty dairying" debate.

He cautioned that farmers would be losing their right to farm freely if the industry didn't engage with the public on issues collectively. Collective action is needed in the key area of managing the environment and taking responsibility for the industry's footprint. The industry then had to act responsibly with increased individual accountability, strong financial performance incentives and needed to face both the good and the bad.

Malcolm Bailey, Fonterra Director, in his presentation on Fonterra and sustainability, opened by saying that profit is essential to all farmers as it gives them choices. Farmers can then choose to demonstrate good stewardship of the land and can then be justifiably proud of their business. He called on all those present to do just that.

Because Fonterra is a world player and the majority player within New Zealand, how its farmer suppliers act impacts on Fonterra's whole business. The co-operative is employing Dairy Advisors whose role is to actively encourage its suppliers to decrease their environmental footprint. It is also working with the industry on various greenhouse gas research projects.

Simon Couper, the Chairman of Fonterra Shareholders' Council (SHC) spoke on the changing role of the SHC and also the Networker groups. The idea of the SHC taking on a greater role at the expense of the Directors of Fonterra led to Lachlan McKenzie stating that he, like all farmers, wanted to see the ‘whites of the eyes' of the Directors in order to make sure that the message was heard. Federated Farmers will continue to ask the Directors difficult questions.

Richard Wild, President of the New Zealand Veterinary Association, spoke on how animal welfare used to be based solely on science but now the beliefs and opinions of the public are also taken into consideration. He also noted that animal cruelty was a much more interesting topic for the media than examples of good animal welfare practices. Therefore, public perceptions of the animal welfare situation in New Zealand are significantly influenced by what is seen and heard in the media. The Council agreed with Richard that incompetent farmers needed to be held to account - animal cruelty would not be tolerated.

John Hartnell, Federated Farmers National Board Member, expressed his concern that the coming Rugby World Cup games would expose New Zealand to the risks of a major agriculture disaster because of the current approach to biosecurity - the ‘ambulance at the bottom of the cliff' approach. He is concerned that fewer than ten percent of containers are examined at our ports and called on the Government to stop foreign pests and diseases before they reached New Zealand's border

Other News

A WORD FROM THE SHAREMILKERS’ SECTION CHAIRPERSON

It was good to be able to attend some of the recent New Zealand Dairy Industry Award (NZDIA) dinners in parts of the North Island. Congratulations to all those who entered and all those who were winners! However, I must show my bias and congratulate all those (but in particular those who are members of the Sharemilkers' Section!) who won Leadership Awards and also placings in the Sharemilker/Equity Farmer of the Year (SEFOTY) categories. I will be writing to all winners to congratulate them and highlight the work the Sharemilkers' Section does on their behalf. It is pleasing to see such a good calibre of operator growing through the Awards process and I look forward to seeing the finalists being crowned in Queenstown in May.

With some of our members moving on in June, it is important to highlight some of the key issues regarding taking over a new position. These need to be thought about beforehand to ensure a successful start to their new farming venture. Many will have already signed their contracts but it is important to start communication with their new farm owner before they arrive and ask a few questions now.

Pasture cover:

What pasture cover was agreed?
Is the farm on track to achieve this?
What will happen if the covers aren't reached?
If there are supplements available from June 1st make sure that they aren't eaten off before you arrive!

Employment:

If you are employing staff, make sure you use Federated Farmers' Employment Agreements. These Agreements have been road tested by farmers, click here to view them.
There have been changes to all employment agreements from April 1st. Are your contracts and processes up to date?

Cows

If you are buying a herd or taking over an existing herd, monitor cow condition carefully.
Weight loss now will affect production and fertility next season.
If you think you may need to induce some of the herd, check that you have accurate pregnancy diagnosis (PD) data (see more on this in the advice section below).

Capital works

Where capital work is to be completed before takeover, check that remedies to be made to houses/infrastructure by the owner have been done satisfactorily.

Farm owner's requirements

As you are a sharemilker working with the owner's asset, put good plans and systems in place for how you will operate the farm.
Find out what is important to the owner in terms of on-farm performance. This may be as specific as monthly work plans or just a general instruction to "run it like your own place".
It is important you discover which way suits the farm owner and you.

Disputes arise when there is a breakdown in communication or change in expectation. As with many things, dealing with issues early can save a lot of hassle later on. Taking a minute to check off the important things can ensure a smooth start to your new sharemilking position.

Cheers,

Ciarán Tully
Chairperson
Federated Farmers Dairy Sharemilkers' Section
Phone: 07 867 5330
Mobile: 027 249 8306
Email: ciarantully@yahoo.com.au

DIRA

The Dairy Industry Restructuring Act (DIRA), the Raw Milk Regulations and Trading Among Farmers (TAF) continue to take up the energy of the Federated Farmers Dairy Executive team.

We submitted against the Dairy Industry Restructuring (New Sunset Provisions) Amendment Bill, but did ask for the South Island market to be seen as a single market, given the effects of a good transport corridor from the West Coast to Canterbury. Federated Farmers Dairy was particularly scathing of the analysis that the Bill was based on, and cautioned against amending the DIRA piecemeal and suggested that the whole DIRA be overhauled. The Bill is due to go back to Parliament for its second reading. Click here to read our submission, and to read the Bill as it awaits its second reading click here.

We also submitted to the Ministry of Agriculture and Forestry (MAF) on the Regulatory Regime to accompany Fonterra Capital Restructuring. We asked you for your thoughts on various issues to do with TAF, and these helped us form our submission - thanks so much! To read this click here. We said that when the combined liquidity of the Fonterra Shareholders' Market (FSM) and the Fonterra Shareholders Fund ("Fund") had reached $500 million, then the share issue and redemption obligation clauses within the DIRA could be removed or replaced with the ability of farmers to trade shares. We also said that a "one off" compliance assessment would be needed to ensure that the necessary liquidity was present in the combined Fund and SFM. We do not think that any further regulation is required. To read what other submitters had to say click here.

And so to the Raw Milk Regulations. MAF has consulted with us as part of their preliminary investigation into yet another review of these Regulations. They have yet to put out a consultation document, but we note that it will be business as usual for the coming season with regards to the Raw Milk Regulations as no changes will have been made in time for the 2011/12 season. We, like you, are disappointed.

VARIABLE ORDER SHAREMILKING AGREEMENT

Believe it or not, progress is being made on this Agreement. While it is still with the Department of Labour, we are pushing for their processes to be completed to allow for you to use it in the spring, for the 2012 season. The current, 2001 Sharemilking Agreement is available now for the 2011/12 season, click here to read it or call our freephone number of 0800 327 646.

HERD OWNING SHAREMILKING AGREEMENT

This has been updated to accommodate Fonterra's payment schedule and is available on our website by clicking here or by calling our freephone number of 0800 327 646.

Advice

INDUCTIONS

You will all be aware of the plan to reduce routine inductions of cows and as we near the end of one set of targets, it is timely to remind you of the next target:

From 01/06/10 to 31/05/11, within an individual herd, the level of inductions should not exceed 15% of the herd's total size. It is desirable that the level of inductions in this period does not exceed that of the 2009/10 season.
From 01/06/11 to 31/05/12, within an individual herd, the level of inductions should not exceed 8% of the herd's total size.
From 01/06/12, within an individual herd, the level of inductions should not exceed 4% of the herd's total size.

For those of you who are planning to use inductions, you will need accurate pregnancy diagnosis data (PD). And if you are buying in new cows and think you may need to induce them when the time comes, make sure PD data is included with the cows.

In short, forward planning for inductions is now required.

A list of all cows requiring to be induced must be sent to the vet six weeks before calving;
Inductions will be based on accurate PD data. Farmers will need to make sure that the cows they buy come with accurate PD data;
All calves born via inductions are to be euthanized;
A resolution process has been put in place (e.g. if a farmer has a disastrous mating season). He/she can appear before a Committee with representatives from Vet Council, Federated Farmers and Dairy NZ to explain the extenuating circumstances and a decision will be made;

AND ONTO SHIFTING COWS

Yes, I know, for some it is too soon to start thinking about this (we have only just got through summer!) but for others, it is timely to remind you of your obligations regarding transport of stock as you will be shifting cows on to your winter run-offs.

Stock need to be fit and prepared for travel;
Able to bear weight on all four limbs and be in good condition to enable them to withstand the stress of transport.
Magnesium and hay are things farmers already know about but in a rush can sometimes be overlooked.
Stock must be stood off green feed for a minimum of 4-8 hours before transport to reduce the risk of effluent spillage.
Check with the trucking company for the estimated time of arrival so that the stand-off period can be scheduled.
It is also a good idea to let the owner of the destination farm know the estimated time of arrival so that they can arrange for paddocks to be available.

Trucking companies have their own set of rules. They are required to have effluent holding tanks which are emptied regularly at designated dumping areas to avoid overflow and spillage onto the road.

If cows are to be walking to a farm, check with the relevant council in case a permit is needed.

MIGRANT WORKERS

Many farmers throughout New Zealand employ migrant workers on temporary visas, and these people are a real asset to the industry. However to remain in New Zealand migrant workers must continue to develop their skills.

It is important as an employer to remember that government's immigration schemes are skills based. If you employ migrant workers, take a minute to familiarise yourself with your employees' immigration skills requirements. If you wish to continue employing migrant workers it's important to provide them with the opportunity to study to ensure they are appropriately skilled. If this does not happen, you will be forced to say good bye to your good staff member as they are sent back to their home country and you will have to go through the whole process of employing and training a new person.

Notices

The Farm Dairy Effluent (FDE) Design Code of Practice and Design Standards are now available along with a farmer guide - Planning the right system for your farm - to help take you and your designer and effluent system contractors through the process of having a new system or an upgrade designed and built.

Federated Farmers Dairy along with Irrigation New Zealand, the New Zealand Milking and Pumping Trade Association, Fonterra, and DairyNZ are committed to implementing the standards and the code.

To download the documents click here.

FEDERATED FARMERS DAIRY AGM 2011

The AGM for Federated Farmers Dairy will be held in Rotorua on Wednesday, 29 and Thursday, 30 June 2011. There will also be a farm tour, starting in Auckland and ending up in Rotorua, on Tuesday. Registrations are being accepted now, click here to download a registration form, or for a nomination form click here.

FEDERATED FARMERS SHAREMILKERS’ SECTION AGM and SHAREMILKER EMPLOYERS’ SECTION AGM

Both of these AGMs will be held in Wellington. A tentative date of 25 May has been set. Further information and registration forms will be sent out soon.

Member benefits

MEMBER BENEFITS AND OFFERS

Contracts and agreements - Members can purchase Federated Farmers contracts and agreements at a discounted rate. Click here for more details or to make a purchase or call 0800 327 646.

Special discounts - To find out more about special discounts for members call 0800 327 646 or click here to log in to view the special discounts.

Contacts

Please remember that if you have any issues or queries you would like to discuss, please feel free to contact Federated Farmers on 0800 FARMING (327 646) or contact your local Federated Farmers Dairy representative or one of the Executive team as listed below.