. ROCK MUSIC Captions by Glenna Casalme. www.able.co.nz Captions were made possible with funding from NZ On Air. Copyright Able 2016 Hello, and welcome. A conversation with a professor at Waikato University began a series of meetings resulting in an agricultural innovation award at the 2014 National Fieldays for Graeme and Alison Franklin. This week we meet the dairy farming couple who developed and marketed a device to prevent water contamination as a result of cleaning lines after milking. We visit Pencoed Farm in the Rangitikei river catchment, a property that was involved in a district-wide water management study. And we catch up on the progress made over 15 years at The Village Press, now producing a range of olive and avocado oils. Ex-dairy farmers Graeme and Alison Franklin have developed an electronic probe that detects the difference between milk and water. Along the way, they've won an innovation award and learned about product development and marketing with help from a number of organisations. The device allows dairy farmers to capture the maximum amount of milk produced at every milking. Graeme explains how it began. I had a dream one night that I milked my son's cows and I put all the wash-up water into the vat. So when I woke up in the morning, it bugged me, and I thought, 'There must be a way to be able to stopping that.' So that was the start of DTex. SIREN WAILS The idea of the DTexH2O is when the farmer finishes milking, he's gotta wash up, and he's gotta put water through the plant. And so he puts the water through, and because it's in stainless steel pipes, he doesn't know where the water is in the line. So he's either a) turning the tap too soon and wasting valuable milk, or he's turned it too late and there's water going into the vat. Now, on some farms they're not allowed any water into the vat. They get penalised for it. So with our system, it tells 'em when to turn it, and it's cutting down the wastage. Some farmers are wasting a minimum of 40 litres a day. Now, that's crazy, where they're milking two to three cows for nothing ` just to tip down the drain. The installation of the DTex is, uh, very easy. You're gonna take out this flange, and we'll put the probe in the milk line. I've been doing a lot of them myself. Some farmers have done them. They're easy to follow, easy instructions. The cost of it, at $1850 plus GST, it soon pays for itself. So if you're milking three cows a day and you're wasting that money, why milk them? We extended our cow shed last season, and from where the position of the milk pump was to where it is now is a significant difference. We're talking probably 80 litres of milk that was left in the line. So we sort of worked on ideas of what we could use, and then I remembered the likes of Graeme and Alison had this device. I wasn't too sure how it sort of worked, so I rung them up and found out from there, and, um, yeah, it's been ideal. Traditionally, a lot of guys, we might hold a hand above the` the tap and feel the change in temperature; we might have a count of how long that the milk's coming through and stuff like that. But that gets very risky when it comes to the likes of relief milkers and also other partners in the shed and whatnot like that, whereas the DTex sort of took care of that problem. The probe's going into the milk line in there. When the milk and water go past the, um, probes at 50%, we pick it up. It's set to pick up that, and then it sounds an alarm. And then it sounds a second alarm` BEEP! ...when the water is just about` ALARM WAILS ...to enter the vat to tell the farmer when to turn the tap. 90% of the, uh, farms have the same ferrule fittings that fit into this housing. So it was just a matter of us putting new O-rings in there and then clamping them on, and away they go. Everyone's is adjusted to suit each shed ` the vat from where this is installed, which is usually close to the cooler; some vats are only 5m away; some are 15m away. So it's just` uh, you know, we adjust it to get it right. The only problem sometimes is when you're doing AI and you're a little bit quiet and you're sitting down here and you forget about it and it goes off, you get a fright. But that's` ALARM WAILS ...the least of my worries. We were pretty much flailing around in the dark, not really knowing what we should or shouldn't do. And when we won the Most Viable Business award at Mystery Creek, it came with a prize package of $15,000 worth of business training. And that taught us pretty much everything that we really needed to know at the time in terms of, um, all of the things that you need to do to actually make sure, first and foremost, that you've got a product that people want, um, in terms of your market research and your product validation ` all of those things that we never knew about ` um, and how to form a business plan, a strategic plan, how to work towards internationalism, the dos and don'ts. And so they basically took us by the hand and guided us through the whole process. Now, that was done by Soda Incorporated in Hamilton, which is their start-up company there that's funded by Trade and Enterprise and the Callaghan Institute. And so what they did was they brought in experts for every area that we needed to learn about. And so they bring in people from law firms and marketing companies and all of those sorts of things, and you sit round the table with them, and they basically teach you and take you` guide you by the hand through the whole process. A company in Colombia found us via the internet, just basically searching for a product that would detect the difference between milk and water, which is exactly what our product does. They found us, they approached us, um, we set up a Skype meeting with them and discovered that the model that we had wouldn't do what they actually wanted it to do. Whilst it would detect the difference between the milk and water, they needed to integrate with a computer. So we were totally naive about the IT side of how that works. And so we called on a local computer expert who put us in touch with a gentleman who works for Fonterra. He's an IT expert. We set up a three-way Skype meeting with Midad in Colombia. He was able to then translate to our technical guys what was required. And so the Mach2 model was created. That has actually led us to believe that there is actually quite a worldwide opportunity for this product, and we're actually hoping that the company in Colombia will actually take that with us to the rest of the world. Our exposure at Mystery Creek is huge. That's probably our biggest tool for marketing the product is Mystery Creek. Um, we've attended pretty much all the Fieldays in NZ in the last, sort of, 18 months, um, to get the word out there. And now people are actually saying, 'Oh, yes, I've heard about that.' Product validation, I think, is the most valuable piece of advice. It's all well and good for us to think people need something. But do they? And if they don't need they need it, then at market a product's never going to fly. So that was the most important thing. And it's the first and most important thing that anybody selling any new product should do is get out there and validate the product with your prospective customers. So that was our most valuable piece of advice. When we return, we learn about a project in Rangitikei that's promoting smarter water use in the district. . UPBEAT MUSIC Welcome back. Pencoed Trust runs a relatively small sheep, beef and cropping operation that's kept flexible to take advantage of shifting market opportunities. With limited land area, the focus is on maximising production. The farm became involved in a district-wide study funded by the Rangitikei District Council and MPI called the Strategic Water Assessment Project and run by the Catalyst Group. Pencoed was one of the properties that did a trial assessment to look at smart water use. This was one of the kind of foundation properties. We ran that project through 2015. With this particular property, we were looking at what would happen if we brought irrigation to it and what would happen if we did a dairy conversion ` what would the numbers look like and what were the impacts? What makes these properties and this trial pretty special is that this is the first region in the country operating under a nutrient cap. So it's got a regulatory framework, uh, where each property has effectively got a nutrient loss on` a per kilo of nutrient loss per hectare per annum that it has to meet. And so we were doing it on the basis that whatever we came through with had to` had to meet that number. What we did here for every one of the catchments, with the regional council and a lot of other stakeholders, was effectively work out in every river, in every stream what the load needed to be to meet the values of the community. And then effectively, you assign the right to put that nutrient into those water bodies, to industry, to communities, to farming. And it's really challenging in some areas. The Upper Manawatu, the amount of nutrients grossly exceeds what should be going in there. So you're clawing back. But in the Rangitikei, where we're doing this project, it's really special because very high-quality water body. The Rangitikei is a, you know` It's a river of national importance. It's got a water conservation order on it. It's very highly valued by the community, and it's in a good state. So the decisions we're making today are easier decisions to make, but they have an economic consequence for every landowner. We were looking at whether a dairy was a solution from an economic perspective. First thing is, of course, the landowner needs to want to go dairying. And in this case, that wasn't a particular driver for Brendan and Rachel. But, you know, they were interested in what those numbers could do for them. Uh, it turned out that if they went dairying, it's about $4 million capital injection. There might be a` a moderate return on investment on a per annum basis, and it shows how fast the market's moving. But, uh, these few months ago, when that trial was done, it would've stacked up for a capital gain over the long term. So had they been in the game of developing land to on-sell, like` The assessment showed that with the $4 million injection, you know, within a decade, they could've taken a mil or a mil and a half out of the project. But they've been` they're in their second generation on this land now, and there's a third in the wings, and that` that wasn't in their plans. So it was about cash flow and net return on a per hectare basis, on a per annum basis that ended up being the driver. So, we look at what irrigation could do for cropping. The best thing about this property, and the biggest dilemma, it's a very high-performing property. So it's in the top 5% to 10% in properties, and so it means it's really hard to get those gains out. And what we demonstrated that` Irrigation just wasn't the answer. You know, fractional return on investment, but it's not worth that investment, really. It's a risky proposition. Brendan's got a system here where he has eked the most out of this land in what we think is a really sustainable way. We went through the exercise of looking at the land-use capability, and I guess what we've always said is that that's the foundation for all critical decision-making on` on land. We're about 210 effective hectares. It's a mixed arable farm. We grow about 100ha in maize for grain. The remaining 110ha, we normally do 25ha to 30ha of cereal, which is either wheat or barley or a bit of both. And then the remainder's left in grass, and we just finish lamb and cattle. Greg Carlyon from the Catalyst Group asked us to` to get involved in the, um, strategic water assessment that they were doing, our property being typical of a lot of the properties around here, that it was probably a good opportunity to see what other opportunities would fall out not just for us but for the locals, as far as irrigation went. We probably always knew in the back of our mind that adding water to the likes of a maize crop would add a certain amount of yield. But whether it was actually worth chasing that last bit of yield for the` for the cost of that, um... you know, of having irrigation... Um, I guess it's easy for everyone to be interested in irrigation in the dry season, cos you start thinking, 'Oh, you know, if we could add water now...' But, um, you've also got to take into account those seasons where you'll park it in the shed and won't need it. The assessment gave us the chance to have the numbers crunched for you and then make an informed decision. We were able to work out that, look, if you were gonna get involved in an irrigation project here, then how was that gonna affect it, and how was that gonna change the limits? We know that we're gonna be shortly under the One Plan and gonna have to start looking at those limits. I guess you do consider it. And the cropping model was reasonably easy, because you're, um... you're soil testing before you plant, and you can work out what nutrients for what yield. So it's a reasonably easy scenario. A big part of the study was what draws people to irrigation. And what we found was that most of the decisions to go to irrigation are heart decisions, not head decisions. I think the take-home message is that before you got into irrigation, you really do the numbers. And the other thing that people make an investment decision to irrigation for ` it's insurance. And so they go, 'I'll put it in for insurance.' But it's not very smart insurance either. What we found in some of the other trial properties is a 60% return on investment. So there's places where irrigation really does pay. Um, (TUTS) the challenge with it is that where irrigation pays, there's generally quite significant environmental consequences, and you need to balance those up, and you need to be prepared to offset the costs of those impacts. We'll be back soon in Hawke's Bay to find out about growth at The Village Press. ROCK MUSIC Hello again. The Village Press is one of NZ's most successful olive oil companies, which has recently diversified into avocado oil production. Wayne and Maureen Startup began in 1994 with a handful of olive trees on their Havelock North property and have now added their own harvesting, pressing, bottling and storage facilities. The Village Press has grown significantly in its 15 years of existence. We started out planting the olive groves to give us a secure supply of olives. We've gone through three different presses now, which have steadily increased in volume all the way through. Our latest press is an Alfa Laval system that we purchased second-hand out of South Australia to handle both our increased olives, as well as avocado production. The volumes have increased exponentially year upon year. Uh, last season was our first year of avocado oil production. Unfortunately, an off year for avocado ` fruit production-wise ` this year. But we are seeing exponential increases in both our core lines of olive oil and avocado oil year upon year. The olive oil industry has been tough. It's up against major competition, particularly out of Europe. We do believe the NZ product is far superior product and has all the nuances of the wine industry ` you know, the fruit-growing of NZ, beautiful flavour and the likes. However, to be competitive there, we did need scale. Which is why we went ahead with syndicated olive blocks, to start with, in Hastings, decent-sized olive-pressing capacity, and a determination to be first in the channel to market for NZ supermarkets, where we could have some access to shelf space, where people could actually buy on a daily basis a quality NZ product at an affordable price. The Village Press home of groves consists of 30ha of olive-growing property just on the edge of the Gimblett Gravels grape-growing appellation area in Hastings, Hawke's Bay. In addition to our own olive groves, we manage or have grower-suppliers of another 12 olive groves that supply The Village Press also. Total current area under management and owned, with the olive groves, would be 65ha. When The Village Press planted out its olive groves, we were very traditional and conventional with our horticultural management. We were strip-spraying with Round Ups and the likes. We've gone away from that completely over the last six or seven years. We are now growing everything biologically. So we're really concerned about the nutritional density of the end product. We're just coming through with no strip-spraying; we're grazing under our trees; there's a lot of seaweed, fish manure, kelp going back on the land, really building up the humus of the soil and understanding the content of the soil. We've seen that coming through the vigour and health of our trees and, we believe, the fruit it's producing, and of course the end oil product. The Village Press is first and foremost a olive oil producer. Our pretty expensive processing equipment works very hard for the three months of the olive harvest and processing season but sits bone idle for the other nine months of the year. Rather frustrating when you come from a chartered accounting background of utilisation of expensive equipment. Of those nine months that we aren't processing olives, seven of those nine months are the NZ avocado oil processing season, utilising pretty much the same equipment, apart from some more front-end equipment to de-stone the avocado. And of course the channel to market is exactly the same ` dealing with oil category buyers, whether it be in olive oil or in avocado oil. Also, with both products fitting within The Village Press ethos of growing a NZ, healthy, nutritious product, we saw some great utilisation of equipment, also being able to offer our staff more full-time employment as opposed to seasonal employment, and of course utilisation of that equipment throughout the year. The avocado fruit that we source for our avocado oil is the process-grade fruit that's graded out of the packhouses. So we have relationship with packhouses in the Bay of Plenty, in Northland. It depends very much on the season and the grade standards that are applicable to the season as to how much fruit we do get available. But having that diversity of supply, and again, encouraging an increase in supply chain to those packhouses, we believe that we'll be getting a more consistent supply of avocado fruit for our avocado oil. We now export to 14 countries, particularly focused on Asia. So to enable us to continue to supply those markets with increased growth that we perceive and believe we're going to attract, we are looking to increase our supply chain of quality olive and avocado growers to The Village Press. So we're now starting to propagate from our own trees, encouraging new plantings of olive trees with long-term supply contracts to The Village Press. We're finding the avocado oil being something quite unique, as opposed to the olive oil ` which of course has been around for centuries ` and the bow between avocado and NZ far stronger than what we've experienced with olive oil in NZ. So the olive oil is almost Trojan Horsing in behind the avocado oil in those markets. The time to press for olives is quite critical. We have a company policy of ensuring that all of our olives are pressed within 24 hours of leaving the grove. With our grove so close here, we've got the luxury of probably pressing within an hour of the fruit leaving the trees. So it's critical that the fruit doesn't sit around. If it sits around, even in a large fruit bin, it will start to ferment, and that's when you get rancidity likely to set in there. So time from harvest to pressing ` critical for the olive fruit. Not so with avocado. The avocado fruit's quite unusual in that it doesn't start to ripen until it actually leaves the tree. So the time it leaves the tree, it goes to the packhouse. We probably got five to six days before it's critical that the ripe avocado fruit that we need is available for avocado oil processing. With olive oil it's important we don't heat the paste above 28 degrees centigrade, being the internationally claimed temperature for claiming cold-pressed extra virgin olive oil. With avocado oil, they don't have that same critical standards there, so we can heat the avocado paste up higher, which assists the extraction of oil from the avocado paste. But principally, the process from malaxing, decanting, separating is exactly the same for both pastes, both fruit and oils from there. For more information on these and other stories, you can visit our website. Get there via tvnz.co.nz, where you can also watch this and previous episodes on TVNZ On Demand. Next week ` we learn about a new test developed at the NZ Wool Testing Authority, designed to improve returns for cross-bred wool. We visit Adriaan and Wilma Van Leeuwen, who have adopted a big-barn approach to dairy in South Canterbury. And while in South Canterbury, we stop off in Geraldine to find out about Barker's fruit cordials. Thanks for watching. We hope you'll join us again next time. Bye for now. Captions by Glenna Casalme. www.able.co.nz Captions were made possible with funding from NZ On Air. Copyright Able 2016