Contents Area Farmed By Region Farm Staff Structure (Eastern - - PDF document

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NZ Farming Systems Uruguay Management Presentation – April 2009

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Contents

• Area Farmed – By Region
• Farm Staff Structure (Eastern Example)
• Development – Key Statistics
• Irrigation – Performance
• Demonstration Farms Performance (STD)

– Physical Metrics – Financial Overview

• Progress – Lessons & Observations

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The Farms

Total area West 3,749 ha Total area Centre 13,407 ha Total area East 19,211 ha

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Eastern Structure (E1 – E6)

Group Farm Manager Ben Smit

Senior Dairy Manager

• R. Urrestarazú

Senior Dairy Manager

• M. De Freitas

Senior Dry Stock Manager

• A. García Austt

Senior Calf Rear Manager

• S. Cresci

Dairy 1 Dairy Manager Dairy 4 Dairy Manager Dairy 5 Dairy Manager Dairy 2 Dairy Manager Dairy 3 Dairy Manager Dairy 6 Dairy Manager Monasterio Dry Stock Foreman Tobay Dry Stock Foreman Higuerón Dry Stock Foreman Don Pepe Dry Stock Foreman Monasterio Guachera Foreman Tobay Guachera Foreman Senior Animal Health Manager

• S. Cresci

Veterinarian Veterinarian

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Eastern Structure cont. (E1 – E6)

Group Farm Manager Ben Smit Senior Dairy Manager Raul Urrestarazú Dairy 1 Manager Dairy 4 Manager Dairy 5 Manager Milkers (5) Cook Milkers (5) Cook Milkers (5) Cook Tractorist Tractorist (Share with other dairy) Veterinarian

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Development – Key Statistics

As at March 31, 2009

• 11 Irrigation Dams Constructed.
• 15 Centre Pivots – current position c 400 hectares (c 1,600 available by summer 2009).
• 26 new and upgraded dairies.
• 44 new + 12 upgraded houses.
• 5 new + 2 upgraded storage/implement sheds.
• Water Bores – providing 420,900litres/hour.
• 1,326km Water lines.
• 4,979 Water troughs.
• 1,790km new fencing.
• 464km new races/roading.
• 65.6km New power lines (15kv).
• 6.2km New power lines (280v).
• 49 Transformers.
• 22,000ha new pastures – Autumn 2008.
• 9,500ha new pastures – Autumn 2009.

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Irrigation

• Drought of 2008 – Limited availability of irrigation water.
• East 1 – Dairy 3 (Demo farm) only irrigated area from November 2008.
• Statistics compelling:

Pasture Growth E1 - D3 (Irrigated v Dry) 10 20 30 40 50 60 70 80 90 July August September O ctober Novem ber December January February March Date K g D M /ha/day Growth Rate Irrigated (kgDM/ha/day) Growth Rate Non Irrigated (kgDM/ha/day)

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MENAFRA (W3 – D2) DEMONSTRATION FARM METRICS 2008-09 YTD (March 31st)

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“Los Azahares de Menafra”

(the Orange Trees of Menafra)

• 1,019 ha property (900 ha Azahares + 119 ha Montesano)
• 629 ha milking platform
• Split into two dairies:

– Dairy 1 – 271ha – Dairy 2 – 357ha (Demonstration Farm) – Dairy 1 (48ashb) constructed and commenced milking August 2007 (kiwi dairy builders). – Dairy 2 (48ashb) locally built and commissioned October 2007.

• Both have Read slide pulsation milking plants
• 80ha dam constructed January 2008. Insufficient rain to allow irrigation

until the late summer of 2009

• Currently 790,000m3 water stored. Capacity 1,500,000 m3
• Centre pivot irrigation (Fockink – Brazil):

– Pivot 1 - Dairy 1: 100ha (37%) – Pivot 2 - Dairy 2: 200ha (56%)

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Management & Staff

• Farm Manager: Ricardo Ferrando (Chileano – NZ Experienced)
• Assistant Manager (Vet): Julio Ariztia
• Roster System; 4 days off/month

16 Total 2 Cooks 2 Calf Rearing 1 Calving 1 Tractor driver 5 Dairy 2 5 Dairy 1

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Climate

1,300 mm Average Annual Rainfall 860 mm Rainfall 2008 9.5°C / June Minimum Soil Temperature / Date 27°C / December Maximum Soil Temperature / Date 8 - 18oC Annual Minimum Temperature Range 22 - 32oC Annual Maximum Temperature Range

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Soils & Fertiliser

• Soils are a deep sandy silt or clay, dark black-brown, with imperfect

drainage.

• Capital fertiliser applied at purchase 2007. Goal to has been to apply 60kg

elemental phosphate/ha/year for 3 years to lift Bray P levels from 9 (at purchase) to 20.

• P target level already reached (~30 at January 2009).
• On going policy more targeted within farm.
• Pastures and cereal crops have received a variety of starter fertiliser. Basic

policy is to provide 17-22kg elemental phosphate/ha.

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Pastures

• Pasture persistence has been problematic. Combination of dry conditions

in the autumn of 2008 and the drought of 2009 meant c70% re-grassed in autumn 2009.

• Permanent pasture based on fescue/white clover (18/2 kg/ha). Annual/Bi-

annual Ryegrass sown alone.

• Weed competition high. Chicory (used in past) left out of mix for this

reason.

• Heat stress problem with perennial persistence. P Ryegrass not viable

(unless under irrigation).

• Clover broadcast in spring following drilling.
• Irrigation to assist in persistence and trialing of variety options.

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Animal Deaths

# Uruguay average is 5% cow deaths. The death rate across NZFSU farms

for 6 months to December was 2.4%; Annualised 4.8%.

* Reduction in calving problems (and related calf deaths) since the

introduction of jersey semen.

4.3 Calves (Pre-weaning) 5.1 Calves (dead at calving) * 3.1 Cows # % Category

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Reproductive Performance

• The average for the Menafra milking herd is 65% in calf after 180 days of

mating.

• Results typical for Uruguay – Below par for NZ.
• Indicative of age structure of herd (80+% R3 Yrs), North American genetics,

and nature of season.

• Jersey semen of NZ origin almost exclusively used.

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Breeding Plan 2009

• Program 2009:
• Dairy herd mating and calving in 3 blocks of 45 days as tabled:
• Bull selection to be finalised but likely to be 70/20/10

Jersey/Friesian/Crossbred mix of NZ sourced sires.

• Heifer mating and calving in 2 blocks of 60 days as tabled:
• Heifers mated only to Jersey sires of NZ origin.

Mating Date: June 25 – Aug 8 Aug 29 – Oct 12 Nov 1 – Dec 15 Calving Date: April 3 – May 17 June 7 – July 21 Aug 10 – Sept 23

Mating Date: June 10 – Aug 8 Sept 10 – Nov 8 Calving Date: March 19 – May 17 June 19 – Aug 17

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Physical Summary & Projections

(Dairy 2 Demonstration Data Only):

56% 56%* Irrigated % 690 660 Cows into Vat (Average) 690 670 Milking Cows (Average) 820 850 Milking Cows (Peak Milked) 2.30 2.40 Peak Cows/ha 200 200* Irrigated Area 357 357 Total Area W3 - D2 '08 - 09 W3 - D2 (March 31) Farm: W3 - D2 FY Plan Actual Summary (75% of season):

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650 510 Milksolids/ha 9,500 7,300 Litres/ha 6.80% 7.05% Milksolids % 330 275 Milksolids/cow 230,000 182,000 Production - Milksolids 4,100 3,900 Litres/cow 3.4million 2.6million Production – (Litres) Performance: W3 - D2 '08 - 09 W3 - D2 (March 31) Farm: W3 - D2 FY Plan Actual Summary:

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* Irrigation available only since end of Feb

150 130 Nitrogen Use (kg N/ha) 2,100 1,300 Supplements made (kg DM/ha) Supplements Produced (Kg DM/ha): 610 940 Concentrates (kg DM/cow) 430 330 Crop (kg DM/cow) 720 440 Silage (kg DM/cow) Supplements (Kg DM/Cow): 5,200 3,000 Pasture Available (kg DM/cow) 13,700 7,100 Total Pasture Supply (kg DM/ha) Physical: W3 - D2 '08 - 09 W3 - D2 (March 31) Farm: W3 - D2 FY Plan Actual Summary:

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Pasture Growth

Season to Date (April 15, 2009)

• Season to date pasture growth 68% of plan (7.9t/ha v 11.7t DM/ha)
• Budget Projections included full year irrigation.

W3- D2 Pasture Growth Data 10 20 30 40 50 60 70 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Date Pasture Growth (kgDM/ha/day) Pasture Growth Budget Growth

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Make Up of Feed Inputs

Season to Date (March 31, 2009) W3 - D2 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar 2009 Pasture (kg DM/ha/day) Silage (kg DM/ha/day) Crop (kg DM/ha/day) Concentrates (kg DM/ha/day) Demand (kg DM/ha/day)

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Financial

Menafra – Dairy 2 (STD March 31, 2009)

• Season to Date (March 31, 2009):
• Production down 2% on planned litres; but up 3% on Milksolids.
• Milk sales revenue down 20% on plan. Price/litre 26 v 35c/litre planned.
• Total expenses 15% over plan.
• Supplementation requiring 420kg DM/cow extra bridging the drought

shortfall in feed grown on farm.

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EL MONASTERIO (E1 – D3) DEMONSTRATION FARM METRICS 2008-09 YTD (March 31st)

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“El Monasterio” (Dairy 3)

(The Monastery)

• 460 ha milking platform.
• Effective area 418ha.
• Dairy 48 bale herringbone. Commissioned for milking June 2008.
• Westfalia electronic milking plant.
• Centre pivot irrigation (Fockink – Brazil):

– 520m radius; 85ha (18% of milking platform)

• Water sourced from India Muerta dam under a signed contract with
• COMISACO. Dam provides irrigation water for the major rice growing
• perations in region.

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Management & Staff

• Group Farm Manager: Ben Smit
• Farm Manager: Martin De Freitas
• Roster System; 4 days off/month.

7.5 Total 1 Cook 0.5 Tractor driver 5 Tambero’s (Milkers) 1 Foreman

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Climate

1,120 mm Average Annual Rainfall 780 mm Rainfall 2008 9.0°C / June Minimum Soil Temperature / Date 27°C / January Maximum Soil Temperature / Date 9 - 19oC Annual Minimum Temperature Range 18 - 28oC Annual Maximum Temperature Range

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Soils & Fertiliser

• Soil type (as with most of East) is a mixture of dark brown/black silt-silt

loams with low to medium fertility and imperfect to medium drainage capacity.

• Capital fertiliser applied at purchase 2007. Goal to has been to apply 60kg

elemental phosphate/ha/year for 3 years to lift Bray P levels from 4 (at purchase) to 20.

• P strategy working. Level ~17 at January 2009.
• As with Menafra – More targeted phase being moved into.
• pH in some areas needing lifting.
• Nitrogen – Urea 400kg/ha irrigated; 250kg/ha dry land.

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Pastures

• Drought effect less problematic than West/Centre.
• Strategy as per outlined in west. Weed challenge less pronounced.
• Chicory used more (absence of weed competition).
• Renewal program dependant on gramicia (summer grass) population.
• Excellent establishment and persistence evident under irrigation.

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Reproduction

• Eastern Dairy Cow Mating Results:

Pregnancy rate – June to September 66%. Pregnancy rate – October to January 51%.

• As with entire company herd; age structure (80+% R3 Yrs), North American

genetics, and nature of season main challenges.

• Heifers; ~80% in calf. Mating weight envelope pushed to meet number

needs.

• Jersey semen of NZ origin almost exclusively used.
• Program for 2009 as outlined in Menafra presentation.

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Physical Summary & Projections

85 85 Irrigated Area 750 770 Cows into Vat (Average) 750 780 Milking Cows (Average) 750 850 Milking Cows (Peak Milked) 1.80 2.00 Peak Cows/ha 20% 20% Irrigated % 418 418 Total Area E1 – D3 '08 - 09 E1 – D3 (March 31) Farm: E1 – D3 FY Plan Actual Summary (75% of season):

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FY Plan Actual Summary: E1 – D3 '08 - 09 E1 – D3 (March 31) Farm: E1 – D3 480 430 Milksolids/ha 7,100 6,700 Litres/ha 6.80% 6.74% Milksolids % 270 235 Milksolids/cow 202,000 181,000 Production - Milksolids 4,000 3,600 Litres/cow 3.0million 2.7million Production – (Litres) Performance:

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FY Plan Actual Summary: E1 – D3 '08 - 09 E1 – D3 (March 31) Farm: E1 – D3 130 75 Nitrogen Use (kg N/ha) Supplements made (kg DM/ha) Supplements Produced (Kg DM/ha): 550 440 Concentrates (kg DM/cow) 520 390 Crop (kg DM/cow) 340 370 Silage (kg DM/cow) Supplements (Kg DM/Cow): 5,000 3,800 Pasture Available (kg DM/cow) 11,970 7,600 Total Pasture Supply (kg DM/ha) Physical:

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Pasture Growth

Season to Date (April 15, 2009)

E1 - D3 Pasture Growth Data 10 20 30 40 50 60 70 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Date Pasture Growth (kgDM/ha/day) Pasture Growth Budget Growth

• Season to date pasture growth 81% of plan (8.0t v 9.9t DM/ha)

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Irrigated Growth

Season to Date (March 31, 2009)

• Season to date irrigated growth 90% of plan (12.0t v 13.3t DM/ha).
• +58% on non-irrigated.

E1 - D3 (Irrigated) 10 20 30 40 50 60 70 80 90 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Date Actual Irrigated Budget Irrigated

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Make Up of Feed Inputs

Season to Date (March 31, 2009) E1 - D3 0.0 10.0 20.0 30.0 40.0 50.0 Jul Aug Sep Oct Nov Dec Jan Feb Mar 2009 Pasture (kg DM/ha/day) Silage (kg DM/ha/day) Crop (kg DM/ha/day) Concentrates (kg DM/ha/day) Demand (kg DM/ha/day)

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Financial

El Monasterio – Dairy 3 (STD March 31, 2009)

• Season to Date (March 31, 2009):
• Production up 21% on planned litres; 20% on Milksolids.
• Milk sales revenue down 10% on plan. Price/litre 26 v 35c/litre planned.
• Total expenses 3% over plan.
• Cost of diesel generated energy until power installed one contributor.
• Supplementation requiring extra 190kg DM/cow bridging drought shortfall

in feed grown on farm.

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Progress/Lessons Learned

• Importance of Team.
• Recognising and Understanding key differences between Uruguay and New

Zealand.

– Adaptation of NZ pasture based farming techniques versus Adoption. – Pace of Development.

• Importance of people.

– Creation of culture that progression possible at all levels.

• Importance of Relationships.

– Recognition of intercultural differences.

• Establish learning culture.

– Non – repeated mistakes = learning experiences.

• Importance of Irrigation to mitigate climate risk.

– Productivity improvement through greater utilisation and resulting efficiency.

• Focus on Basics.

– Don’t get lost in detail.