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Dairying down under: Australian dairyman shares breeding strategy, market outlook

Melissa Hart for Progressive Dairyman Published on 03 March 2017
dairy parlor

Milking 2,000 cows and growing 4,700 acres of crops on the other side of the equator is vastly different from dairying in the U.S. James Mann of Donovan’s Dairy opened up about the dairy business in Australia at the recent Great Lakes Regional Dairy Conference held in Frankenmuth, Michigan.

James and his wife, Robyn, started Donovan’s Dairy in 1998. While James came from an English farm and Robyn from a sheep and beef farm in New Zealand, they began their dairy with 120 cows on a farm in Northern Victoria in 1989. Nine years later their herd grew to 400, and they relocated 400 miles south to their current location where they expanded to 1,200 cows on 1,200 acres to establish Donavan’s Dairy. In addition to their 2,000-cow dairy that they milk in a rotary parlor, Robyn maintains a flock of 600 ewes. Today, the operation includes 4,700 acres – 4,200 owned, 500 rented – with 15 pivots to irrigate the pastures. From the farthest pasture, the cows walk nearly two miles. Their goal is to produce all the forages needed for the livestock, raise all the youngstock and buy the grain when needed.

A snapshot of Australia’s dairy industry

Mann shared a snapshot of the Australian dairy industry that produced approximately 21.5 billion pounds of milk in July 2015 through June 2016, their fiscal year. Their national herd size is approximately 1.69 million cows with just over 6,300 registered dairy farms where the average size herd is 268 cows.

The dairy industry in Australia is a pasture-based system, and producers feed predominately pasture, plus grain in the parlor and hay when pasture is not available.

According to Mann, the road has been rocky in the past year for the Australian dairy producer. While their input prices usually track pretty closely to the U.S. feed prices, they have dealt with drought, floods and high input costs the last two years. The “step-downs” and “clawbacks” have also created a dairy crisis. “Our dairy prices are set in June until a year later in July, and we get about 85 to 90 percent of expected payout on the milk we produce,” Mann said. “In April [2016] the biggest co-op announced a step-down and then a clawback. So not only did we get less money for the remaining 10 weeks of the year, we had to pay back about 20 percent of our income for the rest of the year, which hasn’t exactly helped confidence.”

“Trust between producers and the co-ops were at an absolute all-time low,” Mann said. “The good thing, I guess, is that confidence hit rock bottom and is now getting better. I won’t say it’s good, but it’s not as bad as it was.”

The international market is looking brighter for his country as China is buying more product, and Europe, New Zealand and Australia are slowing down in production. However, demand remains fragile, the U.S. is still growing and there are conflicting price signals in Europe.

Mann explained what the future looks like on the farm. “We are looking at about 12-dollar committed price for milk, and we think that should go up. We are just not sure if it will be this year or next.” He added, “Milk production is likely to be down for the year by 6 to 7 percent.” He said dairy producers will proceed with caution, and a period of consolidation is likely.

Donovan's Dairy in Australia

Using genomics to add value

When it comes to the breeding program, Donovan’s Dairy focuses on three primary areas: Improve fertility, improve productive life and maintain production. Mann said they purchase their semen from various companies, and about 75 percent of the semen is imported into Australia, and about 90 percent of that is from the U.S. and Canada. “Up until 2013, I was a strong believer in proven bulls, but now we are 100 percent genomics with a good reliability around heifers as we calve them twice a year, 1,200 at a time,” Mann said.

Daughter pregnancy rate, productive life and somatic cell count resonated with Mann as they began to use genomics as a tool in their mating program. “Surely, the ideal cow is one that gives you a calf when you want, gives you bucket loads of milk, never gets sick, transitions really well,” Mann said. “Why, that’s what we are all shooting for, so if you can actually get something that measures it, it’s got to be better than saying it’s related to some other trait.”

Mann mentioned that stature is also very important in their selection. “With cows walking a long way, we don’t want massive, big, tall cows. If they do fall over, they stay over.”

When genomics first came to Australia, the talk was all about denials, or culling the bottom 20 percent of the herd. “But in my view, the opportunity was equally in matching the females. You could use it as a solid selection tool,” Mann said. “So we tested all the heifers at the start and used that as selection pressure, and if you’re taking out your bottom 20 percent, you can get somewhere actually very quickly.”

Donovan’s Dairy was one of the first herds in Australia to genomically test whole heifer groups. Because of their concentration on genomic testing, they have been able to achieve exceptional results for fertility, identify strong maternal lines and are using the results to help select heifers for export.

While genomics is good at sorting out the lower end of the herd, “I’m not dead certain it sorts the absolute top ones out, and we’ve probably exported a few pretty handy cattle,” Mann commented.

At Donovan’s Dairy, genomics has opened up the potential to market excess heifers domestically at a premium and identify elite maternal lines with possible bulls entering into A.I. In the future, they will use genomics to screen their herd sires while maintaining calving easy but with improved balanced performance index, fertility and longevity.  end mark

Melissa Hart is a freelance writer from North Adams, Michigan.

PHOTO 1: Donovan’s Dairy milks 2,000 cows in a rotary parlor.

PHOTO 2: This photo shows an aerial view of Donovan’s Dairy, which includes 4,700 acres – 4,200 owned, 500 rented. They have 15 pivots to irrigate the pastures, and from the farthest pasture, the cows walk nearly two miles. Photos courtesy of Donovan’s Dairy.

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