Australia's dairy sector has undergone hard times in recent years: dry weather marred dairy production in the first half of 2016, while production costs inflated 25% over four years as farmgate milk prices plunged 31% in the same period, according to the South Australia Dairy Farmers Association.

"The Australian dairy industry is currently in a state of flux," Charlie Culley (pictured, right), DSM's ruminant business development manager for APAC, tells Dairy Business Worldwide. 26% of Australia's milk production is consumed as drinking milk. The remainder is further processed. About 35% of the total dairy production is exported."

Export is the linchpin of growth for the Australian dairy sector (Australian dairy exports account for 6% of global dairy trade) which also delivers heifers to China, Australia's top dairy export market. Against the backdrop of these challenges (drought, poor farmer returns), the Australian industry has to ensure the delivery of high-quality products, especially to the Chinese market where consumers have lost trust in local products following the 2008 milk scandal in China.

"The biggest challenge is the increased pressure exerted by external markets on Australian processors, as they expect Australia and New Zealand to maintain their clean, green production systems," Culley says, noting the challenge will continue to intensify.

In these trying times, DSM sees itself contributing to the maintenance of healthy productive cows, which will improve farmers' profitability.

This is something which has become more challenging with the impact of climate extremes on the Australian production system.

The company's dairy portfolio is backed by an integrated supply chain, which ensures all DSM products are of the highest quality in both performance and purity. This gives reliability to the milk product supply chain. "Sentinel" or monitored farms provide useful, local data that aids DSM in developing applications that complement the farmers' feed programme.

More recently, DSM's newly-opened biotechnology facility in Delft, the Netherlands, is able to coordinate the development of relevant molecular technologies (such as in fuel, pharmaceutical, and bio-based materials). In relation to DSM's business, this will expedite the introduction of sustainable solutions for the dairy industry in the next few years.

"We have taken an approach that DSM can't be all things to the dairy market, so we focus on the micro nutrition segment and its interaction to the total feeding programme. We are happy to impart that knowledge through business partners who communicate directly with farmers," Culley points out. "We participate in industry seminars in which Dr Joe McGrath, our regional ruminant technical manager, and our country-based technical managers will present DSM's research in the micro nutrition segment to dairy nutritionists. We have conducted fundamental research with universities and research at the farm level with our partners. DSM also uses diagnostics and rapid tests to identify the presence of health challenges, particularly issues concerning cow fertility."

The cooperation between the global life sciences company and the Australian industry is namely around the profitability of dairy cows, focusing on lifetime production and milk quality.

Five DSM core competencies for dairy ruminants

A dairy business's profitability is related to its total farm system profitability. This is largely unrelated to individual peak production from a cow and more closely aligned with lifetime productivity of animals. Healthy, productive cows result in a greater percentage of variable and fixed costs transformed into milk and less being used for heifer rearing and dry cow management.

Total farm system productivity is delivered by concentrating on management of animals throughout their various life stages, including calf, heifer, transition, and lactation. Nutrition as a tool for preventative health care is key. There are only five key areas of nutrition for cows. They are protein, energy, fibre, fat-soluble vitamins, and minerals. "A cow's ability to get the most from the feed it consumes is tied to the metabolic function of the cow," Culley explains. "Vitamins, trace minerals, and macro minerals drive the cow's metabolic system, allowing its feed energy and protein to be efficiently utilised improving milk output."

To bolster its expertise in dairy ruminant nutrition, DSM established its five core competencies. Each of these competencies focuses on a specific area affecting cow nutrition and health. DSM's areas of core competency focus on utilising dietary components for optimum production. These are referred to as Skeletal Health, Nutrient Utilisation, Oxidative Health, Raised Without Antibiotics, and the Environment.

These five core competencies are customised to local requirements, which can be facilitated through DSM's premix plant network which allows for solutions to be blended locally.

The first core competency is the Skeletal Health improvement of cows.

DSM engaged with universities in the research of this field, primarily the University of New England in Australia – partnering with Dr.

McGrath to investigate the role of Ca, P, Mg, and vitamin D in grazing dairy and beef animals.

DSM also engaged the Hannover Veterinary School in Germany, working with Dr. Mirja Wilkens to investigate the role of vitamin D metabolites in dairy cows and goats.

The outcomes of these two research programmes led to the development of the "skeletal concept", which is utilised within the Asia Pacific region. This focuses on optimising skeletal health – providing a platform for optimum growth, production, and resistance to metabolic diseases, primarily manifesting as the control of milk fever (and its related diseases) in dairy cows and phosphorus/calcium deficiency in grazing beef and sheep.

Milk fever is now known as the primary catalyst for the majority of post-calving diseases in dairy cows, costing approximately $1 billion in New Zealand alone.

DSM's skeletal concept is unique because it has a lifetime focus and has also been shown to reduce the incidence of both clinical and sub-clinical hypocalcaemia. Hence, DSM's skeletal health solution includes HyD (25 Hydroxy D3), the active metabolite of vitamin D3.

Utilisation of calcium and phosphorus is determined by the concentration of active Vitamin D in plasma. Greater utilisation and deposition in the skeleton leads to reduced metabolic stress during the cow's lactation.

Nutrient Utilisation, the second core competency, is critical to improving feed conversion efficiency. "The cow requires adequate feed intake for producing milk and once eaten, you have to use that feed as efficiently as you can," Culley highlights.

The third core competency is Oxidative Health. Culley explains that the extremes of Australia's weather cause some physiological problems for cows. This is on top of the normal periods of stress during the lactation cycle, especially during calving and joining.

Heat stress and high somatic cell count are examples of oxidative stress. DSM mitigates these issues through a management programme combined with its Oxidative Health solutions (examples are Oxicare and Cool Cow).

The last two core competencies – Raised Without Antibiotics, and Environmental Management – are important to meet consumer demands. This is the case in many export markets, including China.

DSM's Raised Without Antibiotics competency is based around three pillars...

The first is to "ensure that the immunity of the cow is well-maintained," Culley says. "Part of achieving this is getting the cow's metabolic and oxidative health right. This (again) has to do with vitamins and trace minerals' roles in oxidative health and metabolism."

The second pillar is the actual products that will replace antibiotics - DSM's own Eubiotics solutions, like CRINA® Ruminant, come to mind. "You have to have a solution with a similar level of efficacy (as antibiotics)," Culley explains.

The third pillar is cow and feed management. "Cows are like us; when they are put under stress, there's a higher incidence of infection," Culley says. "It's about managing cows in a production system in order to minimise stress, and that also includes feed. You need feed that is qualitatively consistent and balanced for the cow's requirements to get the rumen functioning well."

For its final core competency, DSM seeks to support dairy farmers and the wider dairy industry in reducing the environmental impact of their operations, and lowering their carbon footprint – building sustainability into the core operations of a farm.

As one of today's leading environmentally responsible corporations, sustainability is a key platform underpinning many of DSM's activities.

Creating sustainable Australian dairies

"Our focus on sustainability within the dairy industry over the next few years will be based around solutions to help dairies lower their carbon footprint in line with local and global sustainability goals," Culley reveals.

The first focus is on cutting down the presence of nitrogen and phosphorus in dairy farming waste. Drawing on its existing core competencies, DSM is reducing phosphorus and nitrogen in dairy effluent by improving cow health and metabolic efficiency – which leads to more milk from the same feed, concurrently reducing a dairy's impact on the environment.

There is an urgency to achieve optimal cow health so that the wasteful aspects of dairy farming can be minimised.

"When you look at both Australia and New Zealand, the pressure is on the amount of phosphorous getting into waterways.," adds Culley. The other major environmental consideration is methane emissions from cows.

"Methane is now the second largest contributor to global warming. DSM's methane reduction solution will play a key part in reducing dairies' carbon footprints in the coming years," Culley says.

Consumers are also becoming more concerned about animal production systems, especially in regard to welfare. The majority of welfare issues are animal health-related. DSM is striving to provide nutritional tools to help producers reduce the impact of these issues on their businesses.

In Australia, the challenge to improve lifetime production starts with heifer rearing. It is vital the heifer rearing programme gets heifers to the right height and weight for age targets – an issue DSM is focused on solving in the long term.

For example, Dr. Joe McGrath has recently published a paper on the use of antioxidants in accelerated calf rearing programmes and the benefits of this for lifetime productivity.

DSM's strategy is to resolve the five target areas adequately. "To be able to achieve this, DSM is using a combination of research and the provision of local, tailored solutions for our partners in the farm production supply chain," Culley says.

"That's DSM's focus into the future."

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