FARM FOCUS DAY Thursday, 17 March 2022 - Owl Farm
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FARM FOCUS DAY Thursday, 17 March 2022 Season Update Farm performance season to date Criteria for investing in technology Brian Dela Rue (DairyNZ research engineer) - key considerations when choosing which technology is right for you. Why soil matters for climate change Prof. Louis Schipper (Waikato Uni) - research happening at Owl Farm to measure changes in soil carbon Disclaimer: While every effort has been made to ensure information provided in this handout was true and correct and the time of going to print, Owl Farm takes no responsibility for the use of data outside of the purpose to inform readers of the current situation at Owl Farm on the Focus Day.
CONTENTS Contents ......................................................................................................................................... 2 Owl Farm Strategy ...................................................................................................................... 3 Health and Safety ....................................................................................................................... 4 Owl Farm Multi-Year Snapshot ............................................................................................... 6 Wagon Wheel KPIs 2020/21 ..................................................................................................... 7 1.0 Farm Performance ................................................................................................................ 9 Season to date comparison .............................................................................................................................................. 9 Climate .................................................................................................................................................................................. 11 Rainfall ................................................................................................................................................................................... 12 pasture Growth Rates ....................................................................................................................................................... 15 Pasture Cover....................................................................................................................................................................... 15 Milk Production .................................................................................................................................................................. 16 Milk Quality .......................................................................................................................................................................... 19 MS/ha from Homegrown Feed ...................................................................................................................................... 20 Feed Supply and Demand graph .................................................................................................................................. 21 Paddock Performance ...................................................................................................................................................... 22 Livestock Growth ................................................................................................................................................................ 23 Reproductive Performance............................................................................................................................................. 24 2.0 Animal Wellbeing ............................................................................................................... 25 Body Condition Score ....................................................................................................................................................... 25 SCC (Somatic Cell Count) ................................................................................................................................................ 26 Lameness .............................................................................................................................................................................. 27 3.0 Business Health .................................................................................................................. 28 Cashflow against original budget ................................................................................................................................. 28 Sustainable Agriculture Finance Initiative (SAFI) ..................................................................................................... 29 Revised budget for 2021/22 season .............................................................................................................................. 31 4.0 Community ........................................................................................................................... 32 Students studying Ag/Hort ............................................................................................................................................. 32 Te Awa River Cycleway ..................................................................................................................................................... 33 2022 Public Open Day ...................................................................................................................................................... 33 5.0 Quality Workplace ............................................................................................................. 34 6.0 Environment ........................................................................................................................ 42 Why soil matters for climate change - The University of Waikato’s research on Owl Farm ....................... 45 2
OWL FARM STRATEGY 1. Vision a. Dairy Farm • Demonstrating excellence in farm performance to create a sustainable future. b. Students • To encourage more young people into the dairy industry. 2. Strategic Objectives a. Dairy Farm • Providing leadership to dairy farmers and the wider community by demonstrating progressive practices that can be achieved on farm. • Optimising profit through identifying the appropriate dairy production system for Owl Farm. • Achieving a sustainable environmental footprint based on industry good management practice. • To attract, train and retain quality employees. b. Students • To provide educational opportunities and exposure to the dairy industry which demonstrates career opportunities to students. 3
HEALTH AND SAFETY Welcome to Owl Farm. We are a fully operational, commercial dairy farm with several potential hazards to both visitors and staff. Many of these hazards cannot be eliminated while also providing access to visitors, therefore all staff and visitors MUST watch for potential hazards and act with caution. St Peter’s School / Owl Farm Hazard Notifications • Children are the responsibility of their parent or guardian • Normal hazards associated with a dairy farm • Other vehicular traffic on farm roads and races • Races may be slippery ARE YOU TRAINED FOR WHAT YOU ARE ABOUT TO DO? If not, STOP. Emergency Contact Information In the event of an emergency, ensure the scene is safe and raise the alarm to get Owl Farm staff and emergency services to assist. Emergency Services • Fire, Police and Ambulance 111 1716 Cambridge Road, follow Hanlin Road through the school to the farm Farm Staff • Jo Sheridan – Demonstration Manager 021 712 680 • Tom Buckley – Farm Manager 021 058 4916 Safety Equipment Location • First Aid Kits Dairy Shed and Vehicles • Fire Extinguishers Dairy Shed and Tractor • Defibrillator Main Office and St Peter’s Medical Centre By entering Owl Farm and signing in at registration, you are acknowledging your understanding of any potential hazards and agree to take personal responsibility and act in such a manner as to protect yourselves and others also on-farm. 4|Page
OWL FARM MULTI-YEAR SNAPSHOT Year 2017-18 2018-19 2019-20 2020-21 Total farm area 164 164 164 160 Effective area (ha) 148 147.3 147.5 144 Physical Info Effective area leased (ha) 18 18 22 33.3 Leased run off (ha) 5 3+12 5+5 4.7 Cows wintered 441 419 421 416 Peak cows (1 Nov) 418 406 405 405 Peak stocking rate cows/ha 2.82 2.76 2.75 2.81 Total kg MS 168,169 169,359 167,185 178,125 MS/cow 402 417 413 440 Production MS/ha 1,136 1,150 1,133 1,237 MS/ha from homegrown feed 978 1,013 931 1,034 MS as % liveweight 86.5% 89.7% 86% 92% Average SCC 146,000 172,000 162,000 144,000 Pasture growth rates total T DM/ha 17.4 15.7 13.4 14.7 Feed and Inputs Homegrown feed harvested T DM/ha (actual weight) 13.8 13.7 11.4 11.7 Supplements imported T DM/ha 2.3 2.3 2.7 2.6 Supplements imported T DM 339 337 440 368 Percentage of diet imported 13% 13% 17% 16% Percentage of farm cropped & harvested (silages) 33% 93% 45% 24% Nitrogen fertiliser applied on pasture (kg/ha) 161kg 149kg 140kg 138kg Gross farm revenue/kg MS (including stock/dividend) $7.56 $6.86 $7.58 $7.94 Cash farmgate milk price/kg MS (Dairybase) $6.39 $6.43 $7.11 $7.47 Stock sales/kg MS $0.54 $0.43 $0.37 $0.52 Financials Dividend/kg MS $0.36 $0.00 $0.00 $0.15 FWE/kg MS $4.28 $4.66 $4.96 $4.60 OPEX/kg MS (inc depn & feed inv) $4.59 $4.97 $5.46 $5.10 Op Profit/ha actual payouts (cash milk rev) Dairybase $3,096 $2,147 $2,405 $3,482 Opening debt/kg MS held $21.23 $23.02 $21.61 $20.86 Estimated N loss kg/ha 35 35 32 34 Estimated P loss kg/ha 0.8 0.9 0.8 1.0 Enviro GHG loss/ha Overseer FM kg CO2e/ha 11,801 11,728 11,304 11,623 Biological GHG/ha (methane + nitrous oxide) 9,548 9,192 9,074 9,945 N conversion efficiency 24% 25% 25% 27% Cowshed 36 Rot 36 Rot 36 Rot 36 Rot Feed infrastructure NIL NIL NIL NIL Herd BW/PW 112/135 119/153 159/186 171/197 Industry BW/PW 72/93 64/73 93/117 Effluent storage New lined pond Amount of farm effluent is applied to 51 ha 34% 51 ha 34% 51 ha 34% 41 ha 28% 6
1.0 FARM PERFORMANCE SEASON TO DATE COMPARISON With warm winter soil temperatures and dry soils coming into the season, the spring peak growth and production was hampered by high rainfall in September and a subsequent growth surge in November. Cows peaked lower than last season and, even with slightly more imported feed being used during the wet weather and milk replacer being used for the first time this season, we struggled to keep up with last year’s production. Temperatures heated up in December followed by an exceptionally dry January causing soil moisture levels to plummet along with pasture covers, like last season but a month earlier. Predictions of heat stress times were from 11am to 8pm for days on end, causing reduced intakes and lower milk production in December through January. Using our 11 ha of crops and 3n2 milking since before Christmas helped to reduce the pressure, along with yard sprinklers. The Waitangi weekend saw welcome rain which allowed us to slow the rotation right down to 70 days for 2-3 weeks to build cover before the regular autumn recovery rain was due. Holding the cows up on kale crops, along with feeding PK and high amounts of low energy silage (up to 8 kg DM) to minimise pasture intake, also had an impact on milk production. Cows were transitioned to OAD on 22nd February when we could still feed them 18+ kg DM and we prepared for the impacts of Covid on our workforce. In the last week of February we sold 70 cows to further reduce feed demand while we were still able to get cows sold and to the works. With lower stock numbers and continued dry weather predicted for March we have updated our Farmax feed budget to revise our milksolids production target for the year, down to 166,640 kg MS from 175,000 kg MS. This includes drying off approximately 70 cows on BCS criteria through late March and miking 250 cows through to 10th May. Summer crop yields have been slightly lower this year but, with high quality and good utilisation, they have added an additional 4 kg DM to the diet from 22nd December through to the end of March. Notes: 9
Season to date 28/02/2022 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Notes Milking Platform 148 147 147 144 144 1 Cows on farm 412 361 374 385 321 2 Stock Peak cows 418 406 405 405 410 3 Peak stocking rate 2.82 2.76 2.75 2.81 2.85 4 Total kgMS Season to date to factory 144,909 152,670 151,268 150,443 144,826 5 Production MS/cow Season to date 347 376 374 371 353 6 MS/ha Season to date 976 1,036 1,026 1,045 1,008 7 MS/ha from homegrown feed to date 868 941 914 912 868 8 Average Pasture Cover 1 June 2,256 2,430 2,516 2,517 2,334 9 Pasture growth rates total TDM/ha 14.0 13.3 10.9 11.8 11.9 10 Actual pasture grown to graze and harvest as silage 12.8 12.3 10.2 10.5 10.8 11 excl area sprayed out in crop Total pasture supply TDM/ha 12.8 12.3 10.2 10.5 10.8 12 Yield of Crop grown per total farm /ha 0.8 0.8 0.5 0.7 0.7 13 Winter homemade silage on hand fed 0.2 0.8 0.6 0.2 0.2 14 Imported Supplements fed/ha 1.6 1.2 1.4 1.5 1.7 15 Total Feed supply TDM/ha 15.3 15.1 12.7 12.9 13.3 16 Homegrown grass eaten TDM/Ha (grown this year) 9.2 8.4 7.9 8.2 8.1 17 Feed and Inputs Homegrown silage grown and eaten this year 0.0 0.3 0.5 0.0 0.0 18 Crop eaten per total farm/ha 0.7 0.7 0.5 0.6 0.6 19 Homegrown feed EatenTDM/ha (grown this year) 9.8 9.5 8.9 8.8 8.6 20 Silage harvested TDM/ha Season to date 1.1 1.6 1.0 0.8 0.6 21 Total Homegrown feed Harvested TDM/ha 11.0 11.1 9.8 9.6 9.3 22 Winter homemade silage on hand eaten 0.2 0.6 0.5 0.2 0.2 23 Imported Supplements Eaten TDM/ha 1.2 1.0 1.1 1.3 1.4 24 Total Feed eaten this year (includes only silage fed) 11.2 11.1 10.5 10.3 10.2 25 TDM/ha % Feed eaten grown on farm 89% 91% 89% 87% 86% 26 Feed conversion Eff (kgDM eaten/kgMS) 11.5 10.7 10.2 9.8 10.2 27 Nitrogen Applied/effective ha 122 93 102 77 86 28 Notes: 10
CLIMATE Climate data is recorded from one weather station on the farm, collecting rainfall, air temperature, humidity and wind. We also have a 600mm soil probe that measures soil moisture and temperature at 100mm depths. Graphs show readings at 100mm depth over time. Graphic 1.1: Average temperature over years Average temperature 24.00 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 17/18 18/19 19/20 20/21 21/22 6 year average Graphic 1.2: Average soil temperature over years Average soil temperature 26.00 24.00 22.00 20.00 18.00 16.00 14.00 12.00 10.00 8.00 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 17/18 18/19 19/20 20/21 21/22 6 year average Notes: 11
Graphic 1.3: Average soil moisture over years Average Soil Moisture 100mm 40.00 35.00 30.00 25.00 20.00 15.00 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 17/18 18/19 19/20 20/21 21/22 6 yr average RAINFALL The 2021/22 season is shaping up to be a hotter and drier season than most. While it felt like a wetter spring compared with the last two seasons, we are still receiving average rainfall, but low soil moisture levels at the start of the season meant that we went into summer dry once again. This gave us insights into our risk management strategies in case of another prolonged dry spell. We used long rotations, forward-contracting supplements and booking in early pregnancy diagnosis and culls to leave the farm to manage the reduced pasture growth rates resulting from low soil moisture. Notes: 12
Graphic 1.4: Cumulative monthly rainfall over seasons Rainfall - Farming year 1400 1269 1200 1080 991 1000 837 808 800 753 600 400 200 0 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 17/18 18/19 19/20 20/21 21/22 5 yr average Graphic 1.5: Cumulative monthly rainfall over years Rainfall - Calendar year 1400 1388 1317 1200 1000 1062 800 766 711 600 400 200 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 2019 2020 2021 5 yr average 13
Graphic 1.6: Monthly rainfall over years Rainfall by month 200 180 160 140 120 100 80 60 40 20 0 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 17/18 18-19 19/20 20/21 21/22 6 year average Notes: 14
PASTURE GROWTH RATES A noticeable growth check in October put pressure on early mating and silage harvesting and crop planting. Low growth rates in January have been balanced by higher February growth; however, destocking the farm early was necessary to reduce grazing pressure and ensure remaining cows were allocated enough feed to maintain body condition and appropriate FEI levels in milk. Graphic 1.7: Pasture Growth Rates from Farmax Growth Rates 90 Growth Rate kgDM/ha/day 80 70 60 50 40 30 20 10 0 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2017-18 23 28 50 59 73 76 49 49 55 40 33 39 2018-19 23 20 42 59 71 73 74 52 21 23 30 28 2019-20 38 30 43 52 65 77 43 7 1 12 31 38 2020-21 41 34 43 49 55 59 56 39 12 19 42 33 2021-22 32 26 36 52 52 79 59 22 34 Long term average 25 26 40 56 68 72 58 38 27 32 35 34 PASTURE COVER Covers have been maintained nicely between 2100 and 2400 kg DM/ha since Balance Date, due to timely management of surplus through crops, silage or baleage. They bottomed out at 1800 kg DM/ha in early February prior to the rain and have since recovered to 2200 kg DM/ha, due to the long rotation being used in February. This should allow us to continue allocating 8-9 kg DM grass/cow/day until the autumn rains come. Notes: 15
Graphic 1.8: Pasture Cover from weekly farm walk MILK PRODUCTION Milk production exceeded target in September and October but was below target during July and August due to the slower calving rate. Milk production continued to fall below target as production per cow was lower from November onwards. Graphic 1.9: Monthly milk production Production: Monthly Performance 30,000 25,000 20,000 15,000 10,000 5,000 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 17/18 Production 6,807 21,183 23,287 24,376 21,030 19,213 16,158 12,856 14,641 7,549 1,070 18/19 Production 6,216 21,391 24,460 24,906 22,042 19,744 18,745 15,165 11,509 5,181 19/20 Production 7,184 22,507 24,485 23,924 21,544 19,879 17,675 14,070 8,179 4,564 3,173 20/21 Production 5,052 20,543 25,146 25,222 20,716 19,866 18,488 15,411 14,234 9,178 4,270 21/22 Production 5,945 19,307 25,906 25,576 21,137 18,472 16,263 12,220 Budgeted 7,000 22,000 24,000 24,000 22,000 20,000 18,000 15,000 12,000 8,000 3,000 17/18 Production 18/19 Production 19/20 Production 20/21 Production 21/22 Production Budgeted 16
We saw a strong per cow peak in September but cows dropped off peak in October as temperatures started to increase in November. Once the heat rose in December, milk production continued to decline even with allocated feeding levels around 19 kg DM/cow/day being offered. Graphic 1.10: Production per cow Production per cow: monthly average 2.20 2.00 1.80 kgMS/cow/day 1.60 1.40 1.20 1.00 0.80 0.60 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2017-18 2018-19 2019-20 2020-21 2021-22 Budgeted kgMS Our target of 850 kg MS/ha by 31st December or 122,000 kg MS relies on early, condensed calving to create more milk in July and August. By 31st December 2021 we had achieved 809 kg MS/ha. Our target was achieved by 11th January. Notes: 17
Graphic 1.11: Production per hectare Production per ha: cumulative 1400.00 1200.00 1000.00 Dec, 850.00 800.00 kgMS/ha/day 600.00 400.00 200.00 0.00 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 2017-18 2018-19 2019-20 20-21 21-22 Budgeted kgMS Notes: 18
MILK QUALITY Our target this season is to provide the highest quality milk for Fonterra by achieving Te Tihi status in the Co-operative Difference framework. This represents Excellence in milk quality for 90% of our milk supply days. To unlock the 7c/kg MS we have worked on the following: Co-operative and Prosperity • We will have full and accurate farm dairy records by 30th June 2022 Environment • A Farm Environment Plan meeting all four key practices • Purchased N surplus will be less than 137 kg N/ha (was 110 kg N/ha in 2020-21) • We participate in a product stewardship scheme for plastics • No discharge of farm dairy effluent to water • 80% of our feed used for the season will be farm grown Animals • An Animal Wellbeing Plan that addresses nutrition, health, environment, and behavioural issues People and Community • The 360 Workplace Assessment achieving 100% on the foundation section Graphic 1.12: The Co-operative Difference summary at 07/03/2022 19
MS/HA FROM HOMEGROWN FEED We maintain a focus on homegrown feed that enables us to meet Co-operative Difference criteria and manage risks associated with imported feed supply and pricing. With lower production season to date and more supplements required to achieve it, we have lower milksolids from homegrown feed season to date. Graphic 1.13: Production per hectare to date between seasons 1,200 Production/ha to date 1,000 800 kgMS/ha 600 400 200 0 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 MS/ha Season to date 976 1,036 1,026 1,045 1,008 MS/ha from homegrown feed to date 868 941 914 912 868 Notes: 20
FEED SUPPLY AND DEMAND GRAPH Homegrown grass eaten year to date is slightly below last year which reflects the lower August, September, October and January growth rates. More imported supplements have been used to date to ensure adequate feed intakes during periods of poor pasture utilisation in a wet spring. Included is low utilisation of low ME grass silage at high feeding levels during a dry summer. Graphic 1.14: Total feed used season to date between seasons 12.0 TDM/ha Total feed used TDM/ha by type 10.0 TDM/ha 8.0 TDM/ha 6.0 TDM/ha 4.0 TDM/ha 2.0 TDM/ha 0.0 TDM/ha 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Imported Supplements Eaten TDM/ha 1.2 1.0 1.1 1.3 1.4 Crop eaten per total farm/ha 0.7 0.7 0.5 0.6 0.6 Homegrown silage grown and eaten this 0.0 0.3 0.5 0.0 0.0 year Winter homemade silage on hand eaten 0.2 0.6 0.5 0.2 0.2 Homegrown grass eaten TDM/Ha (grown 9.2 8.4 7.9 8.2 8.1 this year) Total Feed eaten this year (includes only 11.2 11.1 10.5 10.3 10.2 silage fed) TDM/ha % Feed eaten grown on farm 89% 91% 89% 87% 86% Notes: 21
PADDOCK PERFORMANCE Weekly farm walk data is used to calculate paddock growth rates for the season to date. The paddocks on the right include annual and crop yields and are the highest-performing, following Cleancrop brassica systems. We use this data plus last year’s annual yield, clover and plantain composition, and pasture condition scores, to make informed decisions on which paddocks are suitable for cropping, weed management requirements, and which need fertiliser or potential drainage. Graphic 1.15: Paddock performance season to date from farm walk data 22
LIVESTOCK GROWTH 2020-born calves left the farm on 1st June to commence grazing at Waikato Heifer Growers at 247 kg; they weighed 327 kg on average at Planned Start of Mating and were 410kg on 14th January. Graphic 1.20: 2020-born calves 2021-born calves were reared on milk replacer this season, averaged 180 kg on 18th January and are now grazing 7.1 ha of chicory on leased support land with additional grass silage and PK. Graphic 1.21: 2021-born calves 23
REPRODUCTIVE PERFORMANCE 24
2.0 ANIMAL WELLBEING For the 2021/22 season we have improved our Healthy Calves KPI, with 83% of calves testing with adequate IgG (immunoglobulin) levels for optimum calf health. Purposeful Lives for Calves increased to 70% in 2021. Our final empty rate is one of the biggest contributors to involuntary culls; this year it is 9%, down from 14% last season. BODY CONDITION SCORE Last year we were challenged with having high BCS cows that mobilised a lot of weight to continue producing during mating. We worked hard to get a better BCS result and prevent over- fat cows at calving. While heifers calved at target 5.5 BCS, the cows were slightly under BCS target (4.9) and the second-calvers at 4.9 did not hit their 5.5 BCS target. However, body condition score loss has been limited to 0.5 BCS so far this season and cows have been in excellent metabolic health. While BCS continues to track lower this season, at an average of 4.3 in February and March we have cows that can continue to milk through to early May. Graphic 2.1: Monthly Body Condition Score Monthly Body Condition Score 6.0 5.5 AVERAGE HERD BCS 5.0 4.5 4.0 3.5 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 17/18 18/19 19/20 20/21 21/22 25
SCC (SOMATIC CELL COUNT) Last season we culled high SCC cows to prepare us for 90% of milk at < 150,000 SCC threshold to achieve Te Tihi Co-operative Difference. This had a huge impact on our SCC in early lactation. However, even with few cases of mastitis (9% season to date), lower production and reduced milking frequency has made it hard to consistently maintain SCC below 150,000 to reach Excellence standard. Graphic 2.2: Monthly SCC over years Graphic 2.3: Mastitis Cases Treated Mastitis - cases treated 90 80 70 60 MASTITIS CASE 50 40 30 20 10 0 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 17/18 18/19 19/20 20/21 21/22 26
LAMENESS Lameness cases started off low for the season, but wet conditions in September increased lameness through October to December and, while new cases have slowed dramatically through January and February, we have already exceeded our lameness goal of less than 12% for the season. Graphic 2.4: Lameness events between years Lameness events 160 140 120 NUMBER OF CASES 100 80 60 40 20 0 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 17/18 18/19 19/20 20/21 21/22 Notes: 27
3.0 BUSINESS HEALTH CASHFLOW AGAINST ORIGINAL BUDGET With increasing uncertainty about product supply and cost throughout the 2021/22 season (since the budget was approved in March 2021) we have been focused on securing essential pasture growth and animal wellbeing inputs at the lowest possible cost relative to budget. Milk replacer for calves has been the only approved out-of-budget expenditure for this season. The milk production target has been revised down to 166,640 kg MS for the 2022/23 season, based on Farmax feed budgets, taking into account milk production season to date and feed remaining within budget, while achieving our BCS, APC and feed reserves for next season. Breeding costs are expected to be lower due to the Halter subscription starting one month later than budgeted (Note 9). Silage made costs are expected to be lower, due to budgeting on 55 ha made and we have only made 42 ha (Note 12). Capital expenses to date include Halter setup ($22.7k), with bale grabs and bale feeder, concrete tanker pad and water reticulation included in the approved $60k capital spend for the season (Note 33). We have tried to reduce the effect of increasing input prices on PK and N fertiliser, two significant expense areas. The 2021/22 budget was set at $800/t SustaiN to deliver 120 Units N/ha. With prices increasing significantly over the year, in December we purchased 12 t of SustaiN and 6 t of DAP (at $1345/t) for our autumn fertiliser requirements, to store on farm before further significant price increases. We have averaged $1027.25/t SustaiN for the season so far. Graphic 3.1: SustaiN purchase price Date Volume Price/t product 31/8/21 4.5 t SustaiN $949 30/9/21 2.5 t SustaiN $949 5/10/21 2 t SustaiN $949 31/11/21 1.3 t SustaiN $999 1/12/21 10 t SustaiN $1,049 14/12/21 2 t SustaiN $1,289 22.3 t purchased to date $1027.25/t average price (Current price as at 13/3/22 is $1239/t) 28
The 2021/22 budget for PK was set at 160 t purchased at $317/t (plus 13 t PK for calves). We have averaged $342/t PK for the season. Graphic 3.2: PK purchase price Date Volume Price Contract/Spot 1/7/21 107 t $324/t Contract 1 July for 8 months 1/11/21 30 t $380/t Contract 1 November for 3 months 1/3/22 28.7 t $352.95/t Spot price 1/4/21 15 t $379/t Contract 1 April for 6 months 180 t (includes 13-15t $342/t average price (spot price PK for calves) as at 13/3/21 is $464/t) 1/4/21 (for 30 t $379 Contract 1 April for 6 months to be 2022/23 season) used in June/July SUSTAINABLE AGRICULTURE FINANCE INITIATIVE (SAFI) Owl Farm is pleased to partner with Westpac in their Sustainable Agriculture Finance Initiative which acknowledges the reduced risk of lending due to our sustainable farm practices. Committing to the SAFI framework is extremely well aligned with our wagon wheel KPIs and allows us to receive a lower interest rate as we work through meeting the criteria over the next two years. We look forward to presenting this in more detail with Westpac at our May Focus Day Notes: 29
Graphic 3.3: 2021/22 cashflow updated to end of January Jun Jul Aug Sep Oct Nov Dec Jan YTD Total YTD Budget Variance Full Year Budget Notes Milksolids KG - 5,945 19,307 25,906 25,576 21,137 18,472 16,263 132,606 137,000 4,394 175,000 1 Total Milk Receipts (63,005) (98,223) (156,187) (192,073) (171,096) (131,665) (103,131) (196,870) (1,112,250) (916,205) 196,045 (1,259,743) 2 Dividends Received - - (7,450) - (27,925) - - (5,954) (41,329) (7,700) 33,629 (7,700) 3 All Cattle Sales (3,215) (1,775) (15,691) (18,713) (4,422) (1,026) (1,000) (13,418) (59,260) (23,900) 35,360 (79,900) 4 All other Income (3,433) (13,310) (3,433) - (3,433) (3,433) (3,433) (3,433) (33,910) (31,200) 2,710 (46,800) 5 Total Income (69,653) (113,308) (182,761) (210,786) (206,876) (136,125) (107,564) (219,676) (1,246,749) (979,005) 267,744 (1,394,143) 6 Wages 16,015 17,757 24,899 16,512 16,512 16,642 19,514 22,867 150,718 158,280 7,562 241,420 7 Animal Health 9,217 3,530 3,755 3,692 480 7,323 3,091 1,537 32,627 24,800 (7,827) 42,000 8 Breeding & Herd Improvement 719 785 1,795 21,323 13,477 5,014 2,595 5,819 51,527 48,040 (3,487) 65,260 9 Farm dairy 1,869 355 77 110 481 1,271 - 106 4,269 3,860 (409) 4,940 10 Electricity - 869 1,422 1,487 1,690 1,678 1,358 1,497 10,001 9,100 (901) 12,900 11 Silage made - - - - 5,118 8,702 300 3,870 17,989 32,820 14,831 32,820 12 Supplements purchased 9,357 3,055 6,731 9,856 17,388 - 10,041 - 56,428 75,600 19,172 97,008 13 Calf rearing 2,015 1,515 16,937 211 5,809 1,553 9 - 28,049 13,000 (15,049) 13,000 14 Young & dry stock grazing 9,041 7,256 5,600 5,060 5,060 - 8,418 5,060 45,494 47,520 2,026 69,480 15 Fertiliser (incl. N) (2,164) 3,124 17,594 2,586 853 20,989 21,138 - 64,119 44,500 (19,619) 66,500 16 Regrassing & cropping 1,398 1,313 - 10,471 9,068 7,349 1,198 2,476 33,273 28,600 (4,673) 46,600 17 Weed and pest - 36 491 1,636 - 150 4,532 - 6,845 2,500 (4,345) 2,500 18 Planting - - 8,705 - - - - - 8,705 15,000 6,295 15,000 19 Effluent spreading - - 180 421 12,237 2,380 - 603 15,822 8,000 (7,822) 15,000 20 Vehicles - Fuel and R&M 3,537 1,447 2,017 2,606 1,499 5,337 2,884 1,783 21,110 20,920 (190) 31,380 21 R&M (land,buildings, plant, machinery) 2,549 3,475 616 14,556 1,477 1,445 1,160 412 25,691 37,764 12,073 56,196 22 Freight and general farm expenses 2,840 6,247 4,100 6,702 5,019 5,269 4,095 4,072 38,345 34,340 (4,005) 50,060 23 Administration 1,251 1,250 1,838 1,253 1,250 1,250 1,280 1,253 10,625 12,330 1,705 17,920 24 Rates, Insurance, ACC 1,000 1,000 2,048 2,044 2,048 2,048 2,097 1,048 13,334 16,000 2,666 32,500 25 CASH Farm Working Expenses 58,646 53,013 98,805 100,526 99,466 88,402 83,710 52,403 634,970 632,974 (1,996) 912,484 26 Surplus before Finance charges (11,007) (60,295) (83,956) (110,260) (107,409) (47,723) (23,855) (167,273) (611,778) (346,031) 265,747 (481,659) 27 Lease Land on Milking Platform 4,485 4,485 4,485 4,485 4,485 9,545 4,485 4,485 40,938 41,008 70 61,512 28 Interest - Farm Loan 10,172 10,172 10,172 10,172 10,172 10,172 10,172 10,172 81,376 81,376 - 122,064 29 Depreciation 7,243 7,243 7,243 7,243 7,243 7,243 7,243 7,243 57,940 61,160 3,220 91,740 30 Total Financial Charges 21,899 21,899 21,899 21,899 21,899 26,959 21,899 21,899 180,254 183,544 3,290 275,316 31 Principal 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 120,000 120,000 - 180,000 32 Capital Expenditure - - - - - 93 - 22,720 22,813 - (22,813) - 33 Surplus After Finance charges, Principal and CAPEX 25,892 (23,396) (47,057) (73,361) (70,510) (5,671) 13,045 (107,653) (288,711) (42,487) 246,224 (26,343) 34 30
REVISED BUDGET FOR 2021/22 SEASON Graphic 3.4: Revised budget for 2021/22 season – updated production target of 166,640 kg MS Revised 9/3/22 Full Year Budget Full Year Budget Notes Milksolids KG 175,000 166,640 1 Total Milk Receipts (1,259,743) (1,548,066) 2 Dividends Received (7,700) (27,674) 3 All Cattle Sales (79,900) (97,900) 4 All other Income (46,800) (46,800) 5 Total Income (1,394,143) (1,720,440) 6 Wages 241,420 241,420 7 Animal Health 42,000 42,000 8 Breeding & Herd Improvement 65,260 61,260 9 Farm dairy 4,940 4,940 10 Electricity 12,900 12,900 11 Silage made 32,820 15,000 12 Supplements purchased 97,008 104,008 13 Calf rearing 13,000 27,000 14 Young & dry stock grazing 69,480 69,480 15 Fertiliser (incl. N) 66,500 76,000 16 Regrassing & cropping 46,600 46,600 17 Weed and pest 2,500 2,500 18 Planting 15,000 15,000 19 Effluent spreading 15,000 15,000 20 Vehicles - Fuel and R&M 31,380 31,380 21 R&M (land,buildings, plant, machinery) 56,196 56,196 22 Freight and general farm expenses 50,060 50,060 23 Administration 17,920 17,920 24 Rates, Insurance, ACC 32,500 32,500 25 CASH Farm Working Expenses 912,484 921,164 26 Surplus before Finance charges (481,659) (799,276) 27 Lease Land on Milking Platform 61,512 61,512 28 Interest - Farm Loan 122,064 122,064 29 Depreciation 91,740 91,740 30 Total Financial Charges 275,316 275,316 31 Principal 180,000 180,000 32 Capital Expenditure - 60,000 33 Surplus After Finance charges, Principal and CAPEX (26,343) (283,960) 34 31
4.0 COMMUNITY STUDENTS STUDYING AG/HORT Owl Farm aims to provide educational opportunities and exposure to dairy farming which demonstrates career opportunities to students. We offer classroom experiences on farm to all students at St Peter’s as well as Waikato/BOP secondary schools through the Sustainability in Dairy workshop run by Lincoln University for Year 11 students in May every year. This year we are also offering a teacher-only day aligned with these workshops. We are a (DairyNZ) Rosie’s World partner farm, providing an opportunity for primary schools across the district to bring Year 0-8 students onto a working dairy farm (unfortunately due to Covid interruptions we have had no external primary school visits this year). It’s pleasing to see the continued increase in student numbers choosing Ag/Hort subjects at many secondary schools. Graphic 4.1: Increasing numbers of students studying Ag/Hort at St Peter’s Students studying Ag & Hort at St Peter's 350 300 250 200 150 100 50 0 2015 2016 2017 2018 2019 2020 2021 2022 32
TE AWA RIVER CYCLEWAY The new section of the Te Awa River Cycleway opened on Saturday 6th March, with over 1400 users. Construction of the cycleway along approximately 4.5km of the Owl Farm boundary has seen 12 months of contributions from Tom to manage grazing and new fence lines, as well as safe contractor access to the cycleway. We have taken the opportunity to connect with the public by providing an information board about the purpose of Owl Farm, on the cycleway. Graphic 4.2: Owl Farm information boards to inform the public about NZ dairy farming 2022 PUBLIC OPEN DAY Due to the current Covid event restrictions, we have regretfully decided to postpone our Public Open Day until November 2022. As this annual event attracts between 300-600 people, we felt it was better to postpone it to later in the season when we can deal with a large group of visitors, and make the most of our many volunteers’ time to create such a special day. 33
5.0 QUALITY WORKPLACE A farm accident before Christmas has meant that the team has been operating with remote guidance from Tom while in recovery, on leave and for Covid isolation requirements. We were able to secure the services of a relief contractor to cover during January and February to enable the team to have time off farm. Hours worked per week peaked mid December and are currently at 48 hrs/person/week average for the season to date. We continue to work towards our 45 hrs/person/week target by shortening the working day and ensuring more leave off farm is taken by the team during late summer and autumn. Graphic 5.1: Total hours worked on farm for the season Total hours worked on farm for the season 250 200 150 100 50 0 Jun Sep Dec Feb May Total hrs/wk 2021-22 Total hrs/wk 2020-21 Total hrs/wk 2019-20 Total hrs/wk 2018-19 34
Graphic 5.2: Hours spent on tasks during calving and mating (measured in 2019) Combined hours spent on tasks per month 2019 July-August October AB Springer Check Minda Focus day Tidy up Fencing Repairs Calves in Tractor Spraying Feed out Demo Activities Weed Spraying Water Leaks Fert Spread Mowing Break Fences Effluent Lame Cows Farm Walk Data collection Washing down Break times Feed calves Drafting Cows in Milking Other 0 20 40 60 80 100 120 140 160 180 200 At Owl Farm we continue to explore options on how technology can enable quality workplaces for our team and enhance animal wellbeing outcomes, while contributing to farm profitability. Any change in circumstances triggers a review of our systems and resources to ensure we are on the most efficient track to achieve our end goal. 35
Our 2021/22 budget included the deployment of Halter to Owl Farm after mating. Shown below is the timeline of events over the last two years to get to this point. Graphic 5.3: Introducing new technology Jul/Aug and Oct 2019 Analysis of workplace time and task studies March 2020 Received resignation from staff member With increasing urbanisation on our boundary we started planning for future reduced land area which indicated we would require less than the current 2.8 FTE to run the farm Explored options where technology can help improve hours worked or workplace flexibility. Limitations include milking, bringing cows to shed, drafting and putting up break fences in spring and in crops during summer. April 2020 Worked with DairyNZ to create criteria for technology adoption at Owl Farm: 1. Add value to compliance management via proof of practice data 2. Integration with other automation and data 3. Create safer and more attractive workplaces 4. Demonstrate leadership in how to use data to make better decisions 5. Complementary to wagon wheel KPIs April 2020 Explored options available using the 4D4F Technology Warehouse to understand functionality available globally (137 products associated with animal health and feeding) June 2020 Investigated wearables market in NZ – talked to supplies, users etc June 2020 Purchased and installed Protrack auto-draft July 2020 Implemented options like batt-latch to bring cows to the shed October 2020 Put together business proposal for Halter to Farm Management Committee February 2021 Farm Management Committee visited a Halter farm September 2021 Set up criteria including animal ethics November 2021 Waited for product functionality in Gen B collar December 2021 Farm mapped and towers installed 11th January 2022 Cows collared and training begins Analysis of technology explored the impact on all areas of the wagon wheel including cost saving and extra income generated, along with the expense of the technology. Included overleaf are a few examples of the discussion document generated in October 2020 while the product was still developing. We explored current functionality and future plans for the product, knowing that remote software updates allow the product to increase functionality while we are using it. We anticipate an insignificant change in profit after the first year and gains to be made in years 2 and 3 of our three-year contract. 36
Graphic 5.4: Farm performance wagon wheel analysis for Halter technology Graphic 5.5: Quality Workplace wagon wheel analysis for Halter technology 37
Graphic 5.6: Farm budget analysis for Halter technology 38
Technology in the NZ Dairy Sector Brian Dela Rue, DairyNZ Setting the scene Dairy farmers are rising to the challenge of evolving environmental, animal wellbeing and consumer requirements to maintain market access and community support, while remaining profitable. Farms are heavily reliant on people to operate them, people with skill, who are hardworking and resilient. But there has been minimal improvement in labour productivity (e.g., cows/FTE or kg MS/hours worked) over the past decade and, as herds have grown, more people have been required. Pressures are evident of a critical shortage of farm workers, estimated at over 4000 people and projected to get worse, increasing the workload on current staff and impacting wellbeing. To improve labour productivity, make profitable decisions and attract and retain the right people to deliver this, we need to change the way we work. Technology will be one of the key solutions, but the focus needs to be wider, including: • Continued improvement – identify workplace opportunities with the farm team • Less reliance on people – eliminate, reduce, or automate tasks • Reducing hours worked – better rosters, fewer unsociable hours • Use of data in decision making – sensors for animal or pasture monitoring, for example • Improving workplace safety – less time off injured e.g., reduce strains and sprains in spring • A positive workplace culture - communication, opportunity, flexibility, choice, appreciation What technologies are farmers adopting? Our 2018 technology use survey shows that farmers are investing mostly in automation technologies that reduce tasks and make the job easier, particularly at the dairy. There is more technology in rotary dairies, but they are also newer and milk larger herds than herringbone dairies. Technologies that support the ‘one-person shed’ improve labour productivity (cows milked/person per /hour) and have been a main driver of uptake, evident in rotaries where a combination of devices can remove the need for cups-off person. There has been less investment in data capture technologies that support decision making. This can be due to issues like a lack of confidence in the performance of 39
technology, a perceived lack of value or difficulty integrating the data into decisions. The use of sensors across the farm can be limited by internet connectivity. Around 50% of farmers were still assessing their pastures visually, and only around 40% were recording data in software where it could be used for performance analysis and benchmarking. What have we been observing recently? Animal monitoring Since our 2018 survey there appears to have been an upsurge in the use of animal wearables, mostly activity-based heat detection collars/tags as farmers gain confidence in these systems. Many systems are now being offered on a subscription model rather than purchase. Most measure additional indicators of an animal’s status such as eating time or rumination time, or lying behaviour that can indicate health issues. The devices need to perform their primary task well, e.g. heat detection, and other indicators add to the value of the device. Smart phones and apps Apps on smart phones are being used widely for business and operational recording and team communication. These low-cost platforms enable innovation and quick adoption. Too many separate apps may become frustrating. Virtual fencing There has been strong farmer interest in virtual fencing collars such as Halter and Gallagher’s eShepherd. These technologies promise to automate time-consuming daily tasks and offer opportunities for animal health monitoring and heat detection. Farmer experience to date is positive but it is too early to assess benefits, limitations and return on investment. Workplace improvements Farmers have been trialling options to improve efficiency and job satisfaction for farm teams. Our Workplace Design project has piloted some options that support improvements that farmers had identified. • Work choice app for flexible rosters – option for farm teams choose shifts within their roster • Emerging leaders online training in emotional intelligence and leadership – bite-sized on- farm learning o see our Thought leaders and futurists webinar series • Task planning and choice using a Kanban board www.dairynz.co.nz/kanban • App for simple step-by-step visual instructions for key farm tasks (www.dairynz.co.nz/skills) For more information, search Workplace design on our DairyNZ web site 40
What to consider when evaluating a technology? What are your current goals? • Map out each part of your business and where you want improvement o e.g. productivity/profit, managing compliance requirements, reducing reliance on people, supporting new workers, or creating a workplace that attracts the best available people • Keep up to date with ‘what good looks like’ in each area as farming is constantly evolving. What is the issue or opportunity you are addressing and what does a successful outcome look like? • For example, reducing the team workload during spring, or a system to ensure consistent heat detection performance without reliance on key people • Success may be maintaining the current good performance without farm team fatigue or burn-out What is your current performance in this area? • Having sound numbers on hours required on the task and/or performance data will help in evaluating the value of a new technology and how long until the break-even point is reached. What are the technology options and alternatives? • Keep up to date with technology options through farming contacts, social media chats, discussion groups, field days and technology provider information • Be open-minded about different ways to achieve a similar result o e.g., installing technology to automate a daily task OR reducing the number of milkings (flexible milking options like ‘3 in 2’, ‘7 in 10’, or OAD) leaving more time for those tasks. Will this technology meet your goals? • Seek independent information (where available) on the technical performance. • Speak with farmers who have experience using the technology and discuss their results and experiences. • Consider ease of use and the skills required to operate the technology successfully • Assess the impact this technology will have across your business (e.g., profit, sustainability, cows, people) • Does it integrate with other technology on farm? • What is a realistic return on investment and when will you break even? Who will be the technology champion on your farm? • It’s important that someone takes responsibility for ensuring every effort is made to get the best performance out of the technology, adaptions to farm practices are made as required and the team is supported in operating the system. 41
6.0 ENVIRONMENT Our focus is to know and understand where our GHG emissions are coming from on farm. All farmers need to know this by December 2022. By January 2025, all farmers will need to include GHG management in their Farm Environment Plan (we are in the process of doing this now) and be participating in a GHG reporting system. Total GHG emissions is still being driven by production each season. Last season proved a challenging year to balance profit goals with our environmental footprint. Both our biological GHG and modelled N loss increased due to exceeding our production target. However, we were able to do the same production as in 2016/17, but with a lighter environmental footprint (7%) while generating more profit (27%). Graphic 6.1: Biological GHG/ha over time Biological GHG 11000 10500 10000 kg CO2E/ha/yr 9500 9000 8500 8000 2015 2016 2017 2018 2019 2020 2021 42
Changes over the last seven years to lighten our environmental footprint include: • Use Ballance SustaiN and Smartfert • Reduce nitrogen application rates to below 30 kg N/ha per application • Reduce total nitrogen used in conjunction with My Pasture Planner • Reduce nitrogen application during May–July • Use soil moisture probe and soil temperature data to ensure nitrogen is applied when soil temperatures are above 10°C and soil moisture levels are above stress point • Reduced stocking rate with reduced urine patches • Reduction in imported supplements • Breed high BW cows: currently top 6% nationally • Reduce replacement rate using sexed semen and focusing on meeting youngstock growth targets • New pastures planted with Agricom Ecotain Plantain (4 kg/ha) • Retire and plant unproductive land • Upgrade effluent storage facilities to eliminate spreading during the winter months • Increase effluent area • Conduct Soil Total N tests to determine most efficient use of nitrogen • Constructed wetland with 63% removal of nitrates from a 7.6 ha catchment area • Zero cultivation using direct drilling of PGG Wrightson Seeds Cleancrop varieties for all crops Graphic 3.2: Methane emissions projected to 2030 target of 10% reduction 43
We continue to focus on improving cow efficiency and reducing wastage: • Improve reproductive performance (6 week in-calf rate to >78%,
WHY SOIL MATTERS FOR CLIMATE CHANGE - THE UNIVERSITY OF WAIKATO’S RESEARCH ON OWL FARM What are we doing? In September 2020, the University of Waikato, in conjunction with the New Zealand Agricultural Greenhouse Gas Research Centre (NZAGRC), established a field site on Owl Farm to study the effect of turnip cropping and strip grazing on soil carbon (C) stocks. We are using a two-pronged approach. Firstly, we are measuring and estimating all the major flows of C into and out of the paddock(s) allowing us to calculate a carbon balance (Figure 1). This gives us information on how big any change in soil C is and, perhaps more usefully, when any change likely occurs. Our second approach is to measure soil C stock down to 60 cm before and after the turnip cropping occurs. This will give us information on how much C is in the soil and at what depth, and is complementary to the carbon balance information. Figure 1: Generalised carbon cycling in a dairy system. Arrows that cross the boundary of the diagram indicate where gains and loss of carbon from the pasture system occur. This of course differs between farms. 45
Why is it important? The over-arching goal of our soil C research is to understand how the management of agricultural systems influences soil C, with the aim of identifying management practices that can increase soil C stocks or minimise losses. Our work at Owl Farm is aimed at determining how production and use of supplementary feed can increase or decrease soil C. Investigating the consequences of grazing turnip crops on soil C builds on our previous research into the consequences of importing a lot of supplemental feed and production of maize silage. Importing supplemental feed to a farm can increase soil C stocks by a small amount (~4% of the imported carbon in the feed is stored, but is spread over the entirety of the farm), and maize silage production causes a large loss of soil C when rotated around a farm. We hope to identify the best approach for producing extra feed from a soil C perspective that also meets farmer needs. Where are we at? We established our field site in September of 2020 across a three-paddock block (total area of 5.4 ha). Carbon balance measurements have been ongoing since then, although the data is yet to be completely analysed. Turnips were planted in one of the paddocks in spring 2021 and were grazed over ~40 days during summer 2022. Since grazing ended in early February, the paddock has remained bare and is due to be reseeded in early-mid March. Despite the data not yet being completely analysed, one clear and expected trend is evident – since grazing finished, the turnip paddock has been a source of C to the atmosphere (net loss of soil C) due to the absence of any photosynthesising plants that provide inputs of C to the soil. Minimising the time the paddock is bare reduces soil C losses, although we acknowledge that Waikato summer conditions can make this challenging in the absence of regular rainfall. Before establishing turnips, we collected soil samples from all three paddocks to determine the soil C stocks for each paddock. Our data from this sampling indicated soil C stocks were 121, 129 and 141 t C ha-1 for the three paddocks. What’s next? Our experimental work is planned to continue through the next two summers as each of the remaining two paddocks are cropped with turnips. Carbon balance measurements will be ongoing throughout this time to not only look at the effects of the turnip crop itself but also how the C balance changes upon a return to permanent pasture. These crops will likely result in relatively large initial losses of soil C but we will also determine how quickly this lost carbon is recovered in the years following return to pasture. Once this summer’s turnip crop paddock has been returned to permanent pasture, we will be taking more samples to measure the soil C stocks for comparison with our initial measurements. A similar process will be repeated once the other two paddocks are cropped in the next two summers. Contact Information For more information on our research please feel free to contact either Louis Schipper (louis.schipper@waikato.ac.nz) or Aaron Wall (aaron.wall@waikato.ac.nz). 46
Next Farm Focus Day Thursday 5th May, 2022 Weekly Farm Walk Tuesdays, 10am facebook.com/OwlFarmNZ twitter.com/OwlFarmNZ Owlfarmnz Subscribe to weekly updates by emailing enquiries@owlfarm.nz 47
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