ANNUAL
REPORT
2012–2013
CONTENTS
Chairman’s review
2
Global context
3
CEO’s review
4
Program 1 – Designer Forages
6
Program 2 – Animal Improvement
10
Education and training
14
Communications and industry engagement
18
Summary of performance and impact
20
Corporate management
22
Governance
25
Statutory financial accounts 2012–13
27
Publications
44
Glossary and abbreviations
50
PROJECT PARTNERS
ESSENTIAL PARTICIPANTS
Dairy Futures CRC is creating a positive future for Australian
dairy farmers and companies that supply products and services
to the dairy industry through transformational innovations.
PROJECTED BENEFITS
• An increase in the productive value of dairy farms through pastures with better feed quality, yield and persistence
• Double the rate of genetic gain in Australian dairy herds, through more reliable genomic breeding values, and a better balance between fertility, production and feed conversion efficiency • Technological innovations efficiently translated
to direct value for dairy farmers, through partnerships with commercial organisations • The ongoing capacity for further bioscience
innovations through the support and training of new scientists, from forging global science linkages, and from the rapid adoption of new technology as it becomes available.
A formal assessment calculated $323 million of projected benefits from improved pastures and cattle (benefits accumulated through to 2023–24). However, many technologies will only be partially used by farmers at this time, and substantial additional benefits are likely in future years (e.g. benefits will more than double over the subsequent five years).
REALISED BENEFITS
Australian dairy farmers are now using genomics extensively:• 58 of the 100 most elite bulls in Australia are young genomic sires (bulls assessed with genomics) • 22% of semen sold during 2011–12
was from young genomic sires • 83% of elite bulls now have genomic
information included in the assessment of their merit
• 92% of semen sold in Australia is from the Holstein and Jersey breeds, both of which have genomic breeding values (ABV(g)s).
Sources: NHIA Annual Semen Survey 2011–12, internal analysis of ADHIS August 2013 ABVs.
Innovations in the CRC’s forages program are now in use to breed improved cultivars. Benefits will be measured upon commercial release.
DELIVERING INNOVATION TO
A MAJOR AUSTRALIAN INDUSTRY
• Dairy contributes $13 billion to Australia’s GDP • Australia has 6700 dairy farm businesses• Dairy provides jobs for more than 140,000 Australians on farms, in factories and in service industries.
The CRC’s Board and management have defined a clear strategic vision to put world-leading bioscience to work on Australian dairy farms and in commercial pasture and animal breeding programs. Notwithstanding immediate challenges, Australian dairy farmers have shown great willingness to embrace this vision. This year has been particularly volatile, with dairy farmers facing low milk prices and significant increases in operating costs. Australian milk production fell by 3% during the year 2012–13 compared with 2011–12, and by as much as 6% in some regions. It is gratifying that, despite the challenging times, most farmers continue to see the CRC’s research as relevant to their business, and continue to support our research. Participation in the CRC continues to represent a broad cross-section of dairy industry organisations. We are well aware it is the strength of our industry partnerships that will allow us to deliver the benefits to farmers and we continue to work closely with our commercial partners to fine-tune the scope and scale of our research to match industry needs. Our participants’ active contribution will become even more important in the final years of the CRC as we increase our focus on the utilisation of research. Strong partnerships are also important to support bioscience research beyond the term of this CRC.
During the year we expanded our global reach across our research programs. Important developments have included a joint research project with leading international dairy improvement company CRV for accelerated dairy cattle genomics, and a new agreement for the CRC to join 14 international organisations in the Global Dry Matter Intake initiative to develop genomic breeding values for feed intake. Our forages program comprises a broad spectrum of activities based on our genomics platform, ranging from new genetic tools to select elite plants through to new ways to measure pasture performance. While all of these will bring industry benefits, the Board considers our work in genetically modified (GM) pasture to offer the greatest economic benefit to dairy farmers if social licence to operate is sustained. Our most advanced lines of ryegrass have progressed well during the year (details are provided on page 8 of this report). We are keenly aware of the global context for our research, and international trends are promising. Use of GM plants is growing in a diverse range of economies throughout the world, as illustrated on the page opposite — in Europe, for example, millions of people are consuming meat, milk and eggs every day from animals fed on GM feed.
During the year, the CRC comprehensively reviewed its projected impact in preparation for the Commonwealth’s performance
review. The Board remains confident the CRC will deliver the projected value of more than $320 million to Australian dairy farmers by the original timeline of 2023–24. However, the CRC’s true impact will be realised over a longer timeframe, and the Board expects the CRC’s impact to reach more than $800 million by 2028–29.
The CRC’s record of achievement and its vision are due in large part to outstanding work by the CEO, Dr David Nation and the Chief Scientist, Professor German Spangenberg, ably supported by program leaders, the executive team and head office staff. I would also like to thank my fellow Board members for their contributions and insight.
In closing, I would like to thank the CRC’s key partners, Dairy Australia and the Department of Environment and Primary Industries Victoria, for their continuing support as we work towards a legacy of science-based innovations that will have a lasting impact on the dairy industry and Australia.
DR MIKE GINNIVAN
CHAIRMANCHAIRMAN’S REVIEW
On behalf of Dairy Futures Cooperative Research Centre’s Board
of Directors, I am pleased to report the CRC has received a very
positive Major Performance Review by the Commonwealth and has
entered the second half of its life in a sound financial position.
GLOBAL CONTEXT
GLOBAL TRENDS
IN FOOD CONSUMPTION
— USE OF GM
GM crops have been part of the supply chain for nearly 20 years and are contributing to economic growth, food security and overcoming nutritional deficiencies. A few recent observations about food consumption are:
• Supermarkets across Europe, North America, South America and parts of Asia routinely stock meat, milk and
egg products where the animals have consumed GM feed.
• Recent media analyses suggest that 70–80% of grocery items in US supermarkets contain GM ingredients. • The three major staple foods (rice,
wheat and corn) all have extensive GM programs either in commercial use or the final stages of testing.
• There are significant humanitarian projects to overcome malnutrition through GM fortification of staple foods.
Examples include: GM rice and bananas with increased iron content to combat anaemia, and rice with increased beta-carotene to alleviate vitamin A deficiency and blindness. • Comprehensive reviews by food safety
regulators have confirmed the safety of GM technology in the food supply chain. • The food safety regulator in Australia
(FSANZ) has now approved more than 55 GM food products as being safe for consumption and has also set standards for labelling foods containing GM.
A major trend within both CRC programs — Designer Forages and Animal Improvement — is the expansion of global collaboration and a greater emphasis on the application of new innovations in global food consumption. This page illustrates these trends by profiling the CRC’s international linkages with both commercial and research collaborators, and illustrates the scale of current use of genetically modified (GM) technology in the food supply chain.
DAIRY FUTURES CRC’S
INTERNATIONAL LINKAGES
UK IRELAND BELGIUM FRANCE FINLAND DENMARK NETHERLANDS GERMANY SWITZERLAND ITALY NEW ZEALAND BRAZIL ARGENTINA CHINA CANADA USApartner and are now in pre-commercial testing. Ongoing studies into the genetic modification of pasture plants have produced high-value breeding lines. A superior high-energy ryegrass has now entered a contained breeding program and white clover plants have been produced with multiple improved traits.
Bioscience: the ability to measure biological
variation at an industrial scale and with remarkable
precision, relying on massive computing power
to create practical applications.
This year marked the CRC’s midpoint, prompting considerable activity to analyse and review performance. A wide
cross-section of CRC staff and external consultants contributed to a review of the CRC’s Impact Tool. That process confirmed that the CRC is likely to achieve its projected impact over the next 10 years, and substantially exceed that impact over a longer time frame.
The CRC now has a transition plan, which will be continually updated to reflect the desire to sustain a cooperative research effort and to confirm arrangements that persist after the end of the current Commonwealth Agreement. It is clear there is ongoing potential to keep innovating in dairy bioscience and many participants have an appetite to continue investment. A formal review of the CRC’s performance took place in May 2013. The independent review panel recognised a wide range of CRC activities that deserved commendation, including cutting-edge new science, an excellent education program and strong relationships with industry. The review made eight recommendations, which the CRC’s Board have considered. Further detail on how the CRC will implement the recommendations is provided in the Corporate Management section of this report.
Both the CRC’s Designer Forages and Animal Improvement research programs are performing strongly. We have now built a core set of projects within each program that integrate different innovations into a larger commercial or industrial outcome
while retaining and managing other high-value projects. This has been done in a manner that continues to stimulate crossover of skills and ideas between the forages and animals programs.
The major goal of the Designer Forages program is to concurrently deliver four streams of new innovations that
CEO’S REVIEW
The 2012–13 year has been pivotal in setting up the CRC’s lasting
legacy of innovation using bioscience. We have consolidated
efforts and clarified directions across research programs, realised
benefits in terms of the widespread industry adoption of genomics,
and developed a plan to sustain a cooperative research effort after
the end of the current Commonwealth Agreement.
substantially increase the quality of new pasture varieties. The first stream is the improved selection of advanced plants through both genomic tests and a range of high-throughput and low-cost
performance records. The second stream is the use of multiple new endophytes with novel roles in plant performance. The third stream is the use of elite transgenic events to create an immediate increase in both nutritive value and yield. The fourth stream is to maximise hybrid vigour in ryegrass by exploiting the genetic basis for its self-incompatible nature in breeding. As the program builds towards this major goal it continues to produce commercial plant breeding innovations. The test to map the genetic difference of ryegrass cultivars has been refined, reducing the test cost by 80%. Ryegrass and tall fescue endophytes that have passed all laboratory test phases have been delivered to a commercial
There was an organisational change due to the withdrawal of PGG Wrightson from the Designer Grasses breeding projects. PGG Wrightson has made a long-standing contribution to these projects, and the CRC appreciates their efforts to allow the grass breeding program to continue as a CRC activity.
The Animal Improvement program completed the delivery of animal genomic technology and made further advances through the year. Examples include the first use of genomics for the Jersey breed during August 2012 and ongoing improvement in the way pedigree information is used to complement information from DNA markers. Joint efforts with industry partners more than doubled young sire testing during 2012–13. The rapid impact of genomic technology was recognised with a CRC Association Award for Excellence in Innovation in 2013.
An ongoing focus on selecting more fertile cows led to the launch of a new method to calculate fertility breeding values during April 2013. This is one of many instances of Dairy Futures CRC researchers working with the Australian Dairy Herd Improvement Scheme (ADHIS) to improve the genetic evaluation of Australian dairy cattle. Current research activity in the Animal Improvement program is designed to continue three areas of existing strength and to converge technologies to generate additional impacts. The largest research activity involves developing a second generation of genomic technology that utilises information from the entire DNA sequence (whereas current technology is based on limited markers distributed across the DNA sequence). Additional activities include use of stem cell and advanced reproductive technology to accelerate genetic gain, and the expansion of current activities related to cows’ feed intake and efficiency to select cows with reduced methane emissions and more tolerant of heat stress.
Education and training remains a high priority. Although the CRC has already recruited enough students to satisfy the Commonwealth Agreement, recruitment is continuing. An active program of professional development opportunities and industry mentoring is equipping our students to deliver bioscience with a clear understanding of commercialisation challenges and dairy farmer needs. It is very pleasing that the
quality of our education and training program was recognised as ‘best practice’ by the performance review and shortlisted for the CRC Association Award for Excellence in Innovation. Dairy Futures CRC’s work programs address a fundamental business imperative for dairy farmers: making a profit from the biology of growing grass and producing milk. We have maintained a singular purpose to generate high-value innovations to address that imperative. Our relocation during the year to the new AgriBio, Centre for AgriBioscience is allowing us to showcase the scale of effort being undertaken.
I would like to acknowledge the growing list of people who actively contribute to the success of the CRC: the executive team, the staff that span across all participants and project partners, the rapidly expanding group of global collaborators, and the students and their mentors who play such a vital role. Nearly all projects are now in a position to demonstrate their success and this has created an energetic and buoyant work environment that supports management in delivering short-term value from innovations while establishing our innovation legacy.
DR DAVID NATION
CHIEF EXECUTIVE OFFICERDairy Futures CRC’s work programs address
a fundamental business imperative for dairy
farmers: making a profit from the biology of
growing grass and producing milk.
“
The 2012–13 year marks a significant shift
in progress for the CRC’s Designer Forages
program. Having built a comprehensive
understanding of the genetic and nutritional
differences of pasture plants, researchers
are now applying the knowledge to create
outcomes for Australian dairy farmers.
The CRC’s research is leading towards an entirely new breeding scheme for pasture plants and will deliver a more nutritious, productive and resilient forage base.
PROGRAM LEADERS
PROGRAM 1
DESIGNER
FORAGES
ACHIEVEMENTS
• Delivered multiple tranches of new endophytes to commercial partners • Actively selected elite plants
based on nutritive quality, with a major emphasis on plants with a higher energy content
• Implemented a new breeding scheme design for field testing elite Italian and perennial ryegrass plants selected using genomics
• Narrowed the list of genes likely to be responsible for self-incompatibility in ryegrass • Identified the two
highest-performing transgenic lines
of ryegrass plants, confirmed they meet all required technical specifications and commenced breeding activities
• Commenced a pilot study with commercial partners to select elite plants within a cultivar • Developed economic models
to evaluate new innovations for both ryegrass and white clover • Completed a draft DNA sequence
that contains all the genes that constitute a ryegrass plant • Characterised entire DNA
sequences for approximately 70 endophyte strains. Prof. John Forster
Program 1 Research Leader
Prof. German Spangenberg
Dairy Futures CRC Chief Scientist, Program 1 Utilisation Leader
BETTER PASTURES
THROUGH GENOMIC
SELECTION
The CRC has now demonstrated that genomic selection in ryegrass breeding could accelerate genetic progress to as much as three times the current rate, and scientists have developed the tools to realise the gains.
Researchers have selected and bred elite Italian and perennial ryegrass plants to create a unique and elite plant nursery. Evaluation of 16,300 plants over eight months showed that some plants compared equally or better than the original cultivars — their breeding parents — in terms of yield, performance and quality. This has provided confidence that elite plants can be identified to rapidly enhance quality traits in breeding programs. Building on this work, the CRC has developed a breeding scheme
to achieve single-trait improvement in a cultivar, without eroding other traits, in around half the time required by conventional breeding. The CRC is actively working with commercial partners to align these science outputs with commercial-scale plant breeding practices.
Researchers have now completed a draft DNA sequence containing all the genes that constitute a ryegrass plant and have examined the expression of these genes in 19 parts of the plant. The scale and novelty of this work mean the CRC now has a critical new source of information for selecting plants with improvements for traits such as yield, persistence and tolerance of a range of environmental stresses. In parallel, the research team has also refined new
methods for measuring key aspects of nutritive quality to increase the speed and reduce the cost of testing.
In other achievements, the advanced cultivar catalogue developed last year has been refined into a version that reduces testing costs by 80%. Research into self-incompatibility in ryegrass has continued, and researchers have narrowed the field of candidate genes believed to be responsible for this trait. Testing will continue with the aim of isolating the genes responsible for self-incompatibility to create novel hybrid cultivars, potentially more than doubling genetic gain
compared with conventional breeding. u
LEFT: Ryegrass plants
in a glasshouse study
RIGHT: Dissection of
a ryegrass plant into roots, pseudo-stems and leaves
DESIGNER GRASSES
AND LEGUMES
The CRC is using genetic modification techniques to increase the energy content in perennial ryegrass that grazing animals can utilise. The modification brings together two fructan genes with a ryegrass ‘light switch’ (a gene promoter that responds to sunlight) so the plant produces more fructan in the leaf blade — the part of the plant primarily grazed by cattle. After many rounds of selection and subsequent testing of thousands of plants in glasshouses and in the field, researchers have identified two elite lines that deliver an increase in metabolisable energy of 0.8–1.44 megajoules per kilogram compared with the plants from which they were derived. Glasshouse trials comparing 2000 seedlings from the elite events have confirmed the high-energy trait remains stable in subsequent generations. The CRC has estimated the value of the high-energy trait in two contrasting dairy systems. Based on this modelling, the high-energy ryegrass trait has the potential to increase on-farm profitability by at least $200 per hectare per annum.
Research into key pasture legumes has continued. The CRC has combined virus resistance, aluminium tolerance and herbage yield enhancement into a single source and inserted the genes into an elite white clover cultivar using new techniques. These plants are currently undergoing glasshouse testing. Research to refine the application of this approach to lucerne (alfalfa) has continued.
DESIGNER ENDOPHYTE–
GRASS ASSOCIATIONS
Pairing plants with the most compatible endophytes is an essential part of commercial pasture grass breeding programs. During 2012–13 the CRC delivered three tranches of new endophytes for commercial testing (making a total of four tranches since the project started). These endophytes have been successfully inoculated into both perennial ryegrass and tall fescue. Testing has confirmed they retain their animal-safe and pest-deterrent properties without negatively affecting the growth of the host plant.Researchers have now characterised entire DNA sequences of approximately 70 endophyte strains. Collectively, these strains represent all the diversity observed for perennial ryegrass and tall fescue. This work contributes to a detailed understanding of sources of genetic variance in pasture grass endophytes.
Dairy Futures CRC student Samira Rahimi-Ashtiani and researcher
PROJECT MANAGERS
Prof. John Mason
DEPI Victoria and La Trobe University
Dr Noel Cogan
DEPI VictoriaDr Kathryn Guthridge
DEPI VictoriaMr Pieter Badenhorst
DEPI VictoriaProf. Kevin Smith
University of Melbourne
Assoc. Prof. Joe Jacobs
DEPI Victoria
AUSTRALIAN RESEARCH
PARTNERS
• Department of Environment and Primary Industries Victoria, Biosciences Research Division • Department of Environment and
Primary Industries Victoria, Future Farming Systems Research • La Trobe University
• University of Melbourne
COMMERCIAL / INDUSTRY
PARTNERS
• Dairy Australia Ltd
• New Zealand Agriseeds Ltd • Royal Barenbrug Group • Heritage Seeds Pty Ltd • PGG Wrightson Genomics Ltd
INTERNATIONAL
COLLABORATORS
• Embrapa, Brazil• Lanzhou University, China
• National Southern University, Argentina • University of Buenos Aires, Argentina • University of Sao Paulo, Brazil
The CRC’s Animal Improvement program has
now provided the Australian dairy industry with
a complete pipeline of innovation. Genomic
technologies are benefiting farmers today,
bold and novel research projects are underway,
and global partnerships are keeping Australia
at the forefront of international developments.
The CRC’s researchers are delivering powerful genomic selection tools into the hands of dairy farmers. Working closely with industry partners in Australia and overseas, researchers are developing a deep understanding of entire genome sequences, with the goal of pinpointing the real sources of genetic variation for traits critical to industry profitability.
PROGRAM LEADERS
ACHIEVEMENTS
• Developed genomic breeding values (ABV(g)s) for Jerseys, which were released in August 2012, with similar reliabilities to those of Holsteins • Commenced a joint research project
with leading international cattle improvement organisation CRV, which aims to increase the reliability of genomic breeding values by at least 10% by 2015 • Developed a better model for
calculating the fertility Australian Breeding Value (ABV) with higher reliabilities, which was incorporated into the April 2013 ABV release • Initiated a cooperative industry effort
to enable more fertility data from dairy farms to be incorporated into fertility breeding values
• Developed provisional genomic breeding values for residual feed intake.
PROGRAM 2
ANIMAL
IMPROVEMENT
Assoc. Prof. Ben Hayes
Program 2 Research Leader
Dr Mick Blake
Program 2 Utilisation Leader
Prof. Ben Cocks
Dairy Futures CRC Deputy Chief Scientist
BREEDING WITH GENOMICS
The CRC’s work to double the rate of genetic gain in Australian dairy herds has progressed from delivery of genomic technology to widespread industry adoption. The introduction of genomics has transformed the breeding conversation, created an entirely new market segment for young bulls assessed with genomics and led to the development of new products and services. In a recent survey by Dairy Australia, 59% of famers said they are aware of genomic breeding values and 49% have used genomic semen. As a result of the CRC’s Jer-nomics project, genomic breeding values for the Jersey breed were released for the first time in August 2012. A cooperative effort led by Jersey Australia identified 63 Jersey herds across Australia to supply genotypes for the reference set and CRC researchers genotyped 4202 cows. The new Jersey ABV(g) has an average reliability of 61% for production, making it comparable to Holstein ABV(g)s (average 63% reliability for production). The CRC’s 1000 Bull Genomes project has extended its international reach with the addition of six new partners during the year. The project aims to map the entire DNA sequence of key dairy ancestors and use these sequences to impute genotypesin other bulls to improve the reliability of genomic breeding values. The database now contains complete sequences for 433 ‘key ancestor’ bulls provided by 14 international partners. As part of the project, and together with partners, 31 million points of interest within the DNA sequence have been identified, including one that causes embryonic death in Holsteins.
During the year, the CRC started a new joint research project with leading international cattle improvement organisation CRV. The project will draw on findings from the 1000 Bull Genomes project. By sharing data and enlarging the reference population, the collaboration aims to increase the reliability of genomic breeding values by at least 10% by 2015. u
PROJECT MANAGERS
Dr Jennie PryceDEPI Victoria Prof. Paul Verma Monash University Prof. Mike Holland CSIRO and University of Queensland Dr Coralie Reich DEPI Victoria Dr Mekonnen Haile-Mariam DEPI Victoria Dr Amanda Chamberlain DEPI Victoria
fertility record, compared with only 32 before implementation of the technology. Complementing this work, the CRC is spearheading an industry-wide effort to improve the flow of fertility-related data from dairy farms to ADHIS. The CRC’s fertility project aims to overcome barriers preventing fertility data being transferred from farms to data processing centres and then incorporated into bull breeding values. Working with project partners ADHIS and Warrnambool Veterinary Clinic, the CRC launched this work by bringing together farmers, ADHIS, data processing companies, veterinarians and leading dairy software providers at a workshop in April 2013. Work so far has demonstrated it is practical to unblock the data pipeline. Combined, the new fertility model and the extra fertility data could increase the pregnancy rate of cows (known as the six-week in-calf rate) by 10%.
IMPROVING FEED
EFFICIENCY
The project team continues to observe considerable differences in how much cattle eat and how intake compares with milk production. These observations are difficult and expensive to measure on commercial farms, so are limited to research herds.
The CRC has now developed the ability to select for residual feed intake (the difference between an animal’s actual and predicted dry matter intake). To achieve this, researchers studied 2000 growing heifers (together with Livestock
Improvement Corporation in New Zealand) and 108 cows to confirm that feed efficiency persists as a cow matures: the animals that are most feed-efficient as calves and as first-lactation cows are also more feed-efficient in later lactations. A second validation experiment of 79 cows has confirmed the genomic prediction equation the CRC developed for growing heifers can be used to predict feed efficiency in lactating cows.
Additional research with the University of Melbourne has provided valuable insights into the physiological differences between cows classed as either efficient or inefficient, including a link between feed efficiency and stress responsiveness. In a further development, the CRC became part of an international consortium that has assembled a very large reference population for predicting genomic breeding values for feed intake (the Global Dry Matter Intake initiative).
An added benefit of selecting for feed efficiency is that more efficient cows emit less methane. By studying 32 cows over several lactations, the CRC has demonstrated a relationship between feed efficiency and methane. Work into both feed conversion efficiency and methane emissions will continue as a result of the CRC being awarded a three-year Climate
IMPROVING FERTILITY
The CRC’s research into dairy cattle fertility reached an important milestone with the release of an improved fertility ABV in April 2013.
Previously, the ABV for fertility only measured limited fertility-related indicators; primarily calving interval and days from calving to first service. The research aim was to develop a broader model that incorporates more indicators and more accurately reflects the complexities of the fertility trait. The new multi-trait model has added lactation length, mating data and pregnancy data to the existing indicators. The resulting fertility ABV has increased in reliability by 6–8% for Holsteins and Jerseys, and up to 13.5% for some other breeds. The reliability increase means more bulls now meet the minimum standard for publication of their genetic merit. For example, 59 of the top 100 bulls in April 2013 had a publishable
Dairy Futures CRC researchers Dr Brett Mason and Dr Coralie Reich
INTERNATIONAL
COLLABORATORS
• Aarhus University, Denmark • Christian Albrechts, Germany • CRV, Netherlands• DairyCo, UK • Frisona, Spain • INRA, France
• Iowa State University, USA • Irish Cattle Breeding Federation,
Ireland
• Livestock Improvement Corporation, New Zealand
• MTT Agrifood Research, Finland • Qualitas AG Swiss, Switzerland • Scottish Agricultural College, UK • SRUC Edinburgh, UK
• Technische Universitat Munchen, Germany
• Teagasc, Ireland
• Universita degli Studi di Milano, Italy • University of Alberta, Canada • USDA, USA
• Wageningen UR, Netherlands • Wisconsin University, USA
AUSTRALIAN RESEARCH
PARTNERS
• Department of Environment and Primary Industries Victoria, Biosciences Research Division • Department of Environment
and Primary Industries Victoria, Future Farming Systems Research • La Trobe University • Monash University • University of Melbourne • University of Queensland • CSIRO
COMMERCIAL /
INDUSTRY PARTNERS
• Dairy Australia Ltd • ADHIS Pty Ltd • CRV • Genetics Australia Co-operative Ltd • Holstein Australia • Jersey Australia • Geoffrey Gardiner DairyFoundation Ltd
Readiness grant by the Department of Agriculture, Fisheries and Forestry (DAFF), together with investment by Dairy Australia. This work will also develop a breeding value for heat stress tolerance.
TOWARDS FEMALE-ONLY
BIRTHS
Monash University continues to use stem cell technology to identify new methods to select sperm. This includes significant progress in understanding the process of cells differentiating into sperm cells and the creation of new methods to direct the development of stem cells into embryos that are female. This work continues to be ground-breaking and has the potential to change the breeding method of cattle in the medium to longer term.
During the year the research being carried out by CSIRO and the University of Queensland completed a detailed analysis of the surface proteins of X and Y sperm. However, a project review concluded that, while the research was of a high quality, none of the differences were large enough to lead to a viable sex selection technology, and the project has been discontinued.
Gabriel Turlea, DEPI scientific computing specialist, at the bioinformatics and advanced scientific computing cluster at AgriBio
Dairy Futures CRC continues to support
post-graduate researchers through its industry
mentoring and professional development
programs, and to support national agriculture
education objectives through its secondary
schools program. The quality of the education
program was commended in the Commonwealth
performance review, and the industry mentoring
program was shortlisted in the 2013 CRC
Association Award for Excellence in Innovation.
TRAINING TOMORROW’S RESEARCHERS
The CRC is currently training 20 post-graduate students and will exceed the objective of producing at least 30 PhD-trained researchers over the life of the program. To date, 10 CRC students have successfully completed their PhD and most graduates continue in scientific research. During 2012–13 two new students enrolled with Program 1 and two with Program 2 through La Trobe University and the University of Melbourne, and one candidate discontinued. Two post-graduate students from Wageningen University in the Netherlands and one Masters student from Universidad Nacional Autonoma de Mexico spent several months at AgriBio working with the Program 2 research team.With funding support from Dairy Futures CRC, seven students travelled to international conferences and workshops and many made the most of the opportunity to visit research facilities and
commercial businesses while overseas. Students presented abstracts and
posters at conferences including Quantitative Genetics (Edinburgh, UK), the Symposium on Molecular Breeding of Forage and Turf (Utah, USA), the International Symposium on Fungal Endophytes
of Grasses (Lanzhou, China) and Greenhouse Gases and Animal Agriculture (Dublin, Ireland).
EDUCATION
AND TRAINING
“
The education program [is]
of excellent quality and is an
example of best practice for CRCs.
Major Performance Review Report forDairy Futures CRC, May 2013.
”
Belinda Griffiths, Education & Industry Engagement Manager
GLOBAL LEARNING
“My PhD uses farm system models to assess the economic and greenhouse gas implications of changes in pasture traits. Recently I travelled to Europe where I attended the Greenhouse Gases and Animal Agriculture conference in Dublin: a ‘must attend’ event attracting many eminent scientists. We were treated to a wide range of research concerning methods for mitigating animal greenhouse gas emissions across many different farm systems. I also visited the UK to talk to researchers and key dairy industry people in Edinburgh, Birmingham and Aberystwyth. The trip was well worthwhile in terms of gaining feedback on my PhD and building contacts for after I finish my thesis.”Cameron Ludemann
Dairy Futures CRC Student
“In October 2012 I spent a month working with NZ Agriseeds in Christchurch, where I was able to see and work in the different parts of their breeding program, from crossing and phenotypic screening of plant lines, through to seed production steps, and then also marketing and agronomy trials. I was also able to meet with farmers and other industry researchers during my visit. The trip gave me a really good insight into commercial plant breeding and has allowed me to ensure my research is developed with the commercial partner and dairy industry in mind.“
Luke Pembleton
Dairy Futures CRC Student
ABOVE: Luke Pembleton ABOVE LEFT: Cameron Ludemann
INDUSTRY MENTORING
The CRC’s industry mentoring program, which pairs research students with an experienced industry mentor, has grown during the year, adding six new mentoring partnerships. In February 2013, the cohort of 21 students who commenced mentoring in 2012 attended a workshop with their mentors where they reviewed the successes and challenges of a full 12 months of mentoring partnerships. Most plan to continue their partnerships.
Students also engaged with the dairy industry through the CRC’s Finance Essentials for Early Career Researchers workshop, presentations at dairy workshops and conferences and farm visits. u
STUDENT AWARDS
• Claire Lewis: Rural Finance IanMorton Memorial Scholarship • Cameron Ludemann: AW
Howard Memorial Trust Travel Scholarship and Melbourne Abroad Travelling Scholarship • Elizabeth Ross: LIMS Miller
Travelling Fellowship
• Pieter Badenhorst: Finalist, 2013 Victorian Young Achiever Awards • Pieter Badenhorst, Cameron
Ludemann: Best Overall Presentation, Dairy Futures CRC Forum 2012
• Christy Vander Jagt: Best Impact Presentation, Dairy Futures CRC Forum 2012
• Samira Rahimi-Ashtiani: Best Science Presentation, Dairy Futures CRC Forum 2012.
SUPPORTING SECONDARY
SCHOOLS
The CRC’s program for secondary schools, Get into Genes, has now reached 20,000 students across Australia since it started in 2004. Get into Genes is the only education program for school students in Australia with a dedicated focus on the agricultural applications of biotechnology. During 2012–13, Get into Genes extended its focus from secondary science and senior biology to include agriculture and horticulture studies. The CRC conducted outreach activities for students in Gippsland and western Victoria, and hosted professional development workshops for teachers. Teacher and student feedback attributes the success of Get into Genes to its strong links with the school curriculum, integration of the latest examples of Australian agribioscience with fun, hands-on activities in a university setting, and bright, enthusiastic PhD student demonstrators.
RIGHT: Secondary school students taking part in Get into Genes FAR RIGHT: Dairy Futures CRC student Majid Khansefid with his industry mentor Peter Thurn from Genetics Australia
Get into Genes enjoyed strong support during the year from funding partners the Australian Centre for Plant Functional Genomics and La Trobe University, with additional support provided by the University of Melbourne, School of Botany and the ARC Centre of Excellence for Plant Cell Walls.
During 2012–13,
Get into Genes
Victoria reached:
• 1778 students
• 147 teachers
• 49 schools
CURRENT POST-GRADUATE
STUDENTS: PROGRAM 1
• Haleh Aghili: Functional genomicsof self-incompatibility in perennial ryegrass (Lolium perenne L.) • Pieter Badenhorst: Molecular
breeding strategies for transgenic Lolium grasses
• Antony Crowther: Metabolome of grass-endophyte symbiota • Piyumi Ekanayake: Molecular
genetic analysis of fescue-derived fungal endophytes
• Inoka Hettiarachchi: Reporter endophytes and studies of host colonisation and symbiotum development
• Claire Lewis: Analysing the potential value of novel white clover for Australian dairy farm systems
CURRENT POST-GRADUATE
STUDENTS: PROGRAM 2
• Mary Abdelsayed: Quantitative geneticsand genomic selection of extended lactation traits in Australian dairy cattle • Hassan Aliloo: Exploiting non-additive
genetic effects for fertility • Frances Bowley: Pleiotrophy and
genotype by environment interactions affecting dairy cattle fertility in Australia • Lesley Gray: Using biological pathway and genome sequence information to map variants affecting milk production in dairy cattle
• Majid Khansefid: Genomic selection for residual feed intake
PHDS AWARDED 2012–13
• Andrea Giordano: Functionalgenomics of lignin biosynthesis in Paspalum dilatatum
• Melanie Hand: Genome evolution, genetic diversity and molecular breeding of tall fescue (Festuca arundinacea Schreb.) • Christy Vander Jagt: Comparative
analysis of marsupial and eutherian genomes to identify genes critical in milk production.
SOME DESTINATIONS
OF 2012–13 CRC
PHD GRADUATES
• Universidade Federal de Viçosa, Brazil (molecular plant breeding) • CSIRO Plant Industry, Adelaide
(plant reproduction research) • Department of Environment
and Primary Industries, Victoria (Designer Forages program).
• Zibei Lin: Computational simulation studies of genomic selection on perennial ryegrass
• Cameron Ludemann: Modelling the impact of GM forage innovations for the Australian dairy industry • Luke Pembleton: Advanced
phenomics and genomics-assisted breeding of perennial (Lolium perenne L.) and Italian (Lolium multiflorum Lam.) ryegrass
• Samira Rahimi-Ashtiani:
Biosynthesis of proanthocyanidins in white clover: single cell omics for designing pathway re-programming.
• Ross Koufariotis: Using functional information in genomic selection based on full genome sequence data • Luis F Malaver-Ortega: Bovine
pluripotent stem cells: Strategies for generation and differentiation towards germ cells
• Catriona Millen: Fine mapping QTL for milk production traits in dairy cattle • Elizabeth Ross: Investigating the bovine microbiome using massively parallel sequencing
• Ting Ting Wang: Computationally efficient genomic predictions with full genome sequence data.
A representative survey of dairy farmers
from all regions of Australia undertaken
by Dairy Australia showed that dairy
farmer awareness of the CRC has grown
to 62%, and 85%
of farmers who are
familiar with the CRC’s
research believe it will
positively impact their
farming business.
During the year the CRC has continued a focused
program of communication and industry
engagement. Activities are designed to strengthen
industry links and encourage technology adoption,
and are conducted principally through our partner
organisations who have well-established business
relationships with dairy farmers.
COMMUNICATIONS
AND INDUSTRY
ENGAGEMENT
Jen Bladon-Clark Communications Manager
DAIRY FARMERS: TRANSFORMING
THE BREEDING DIALOGUE
In accordance with stakeholder research, the CRC and partners communicate with dairy farmers primarily via the web and face-to-face engagement. The Dairy Futures CRC website (www.dairyfuturescrc.com.au) is updated regularly with research developments and announcements. During the year new videos were added to the multimedia gallery on the CRC’s website covering the reliability of genomic breeding values, the use of genomics in breeding programs, and sex selection. Visits to the website increased by approximately 50% over the year.
Face-to-face dialogue between researchers and farmers took place during the year via tours of the AgriBio, Ellinbank and Hamilton research facilities and at industry workshops.
INDUSTRY FERTILITY
COLLABORATION
In April 2013 the CRC hosted the Boosting The Fertility Data Chain workshop, bringing together farmers, ADHIS, data processors, veterinarians and other industry participants to discuss ways to improve the flow of fertility data from farms to ADHIS. The workshop formed part of the CRC’s work to improve dairy cattle fertility (see page 12). As part of this effort, Department of Environment and Primary Industries Victoria project officers and researchers and ADHIS extension staff delivered workshops on Developing Your Herd’s Genetics to more than 100 farmers in Kilarney, Numurkah, Cohuna, Maffra and The Gurdies.DAIRY FUTURES CRC FORUM
The Dairy Futures CRC 2012 Forum What’s Our Impact? took place in November 2012. More than 100 people attended, including CRC participants, researchers and students, to share knowledge about the research programs and their impacts. Forum attendees also helped review the Impact Tool as part of the CRC’s preparation for its Commonwealth Performance Review. Guest speakers included Dairy Australia’s Managing Director Mr Ian Halliday and Gippsland dairy farmer Mr Graeme Nicoll. Feedback after the Forum reflected researchers’ desire to deepen their understanding of industry challenges and opportunities so they can maximise the impacts of their research.RELOCATION TO AGRIBIO
During the year the CRC relocated to the new $288 million AgriBio, Centre for AgriBioscience in Bundoora, Victoria — Australia’s premier agribioscience research facility, which accommodates more than 400 DEPI and La Trobe University staff. The relocation positions the CRC’s head office in close proximity with researchers and provides opportunities to showcase research through facility tours. Approximately 250 people attended the official opening of the facility by The Hon. Dr Denis Napthine, Premier of Victoria in April 2013.“This facility is one of a kind in
Australia and easily ranks among
the world’s best agricultural
bioscience research facilities.”
Dr Denis Napthine,
Premier of Victoria (April 2013)
Since the official opening the CRC has hosted tours of AgriBio for more than 100 service providers and farmers, including many young farmers, from groups including the Goulburn Dairy Business Network, World Jersey Cattle Bureau and Mount Gambier discussion group. Representatives from Australian Dairy Farmers, Regional Development Programs and CRC commercial partners have visited the facility.
Dairy Futures CRC researcher Dr Jennie Pryce at the
Boosting The Fertility Data Chain workshop Dairy Futures CRC researcher Assoc. Prof. Ben Hayes at the 2012 Forum AgriBio, Centre for AgriBioscience
INDUSTRY ENGAGEMENT: CREATING PATHWAYS
TO COMMERCIALISATION
The CRC has continued to actively engage with industry via direct collaboration in research and participation in industry events. Research project teams report to participants via steering committee meetings and other closed groups to align research activities with commercialisation pathways. The CRC’s researchers and students participated in approximately 20 industry workshops and conferences in Australia and New Zealand during the year, and the CRC sponsored Systems Biology Workshops for more than 150 delegates and presenters, hosted by the Department of Environment and Primary Industries Victoria. The CRC’s research staff and managers contributed to industry working groups including the Dairy Moving Forward reproduction steering group, the Cows Network, the Royal Agriculture Society of Victoria’s Agrifood Advisory Group, the Department of Environment and Primary Industries Victoria’s mentoring taskforce and the Rebuilding Agriculture Workforce.
PERFORMANCE REVIEW
A formal review of the CRC’s performance took place during May 2013. The purpose of the review was to assess the CRC’s performance to date and provide recommendations to assist the CRC to maximise the benefits to end-users and Australia.
The review panel concluded that “the Dairy Futures CRC is well run and managed,
SUMMARY OF
PERFORMANCE
AND IMPACTS
undertaken by the CRC is world class, highly relevant to end-users and meets the needs of the dairy industry.”
The review panel’s recommendations and the CRC’s proposed action to implement those recommendations are outlined below.
PERFORMANCE REVIEW RECOMMENDATION
PROPOSED ACTION
Develop a mechanism for obtaining an independent assessment on the quality of the research in the CRC.
The Board will use existing mechanisms to obtain external opinions as required and will enlarge its network of people capable of providing independent assessments.
Consider the establishment of a sub-committee whose responsibility is to manage the transition process.
The entire Board should focus on transition planning as a critical aspect of governance. Transition planning is now a standing agenda item for each Board meeting.
The transition plan specifically give consideration to a formal process to continue the well-established research / industry collaboration which currently exists.
A formal process is warranted and will be organised.
The transition plan should address issues such as the continuation of students and commercialisation activities.
The next version of the transition plan will expand the existing description of transition activities for education, commercialisation and management of intellectual property.
Consider holding an annual forum at which all researchers have an opportunity to present their science.
A forum will be held during Autumn 2014 and then annually.
Seriously consider mechanisms to continue to recruit and fund PhD students over the next three years.
Recruitment of students will continue over the next three years and will be in excess of the required number of students (30). There are currently six student vacancies that will be filled over the next six months. Consider implementing undergraduate vacation studentships and
recruiting honours students.
Honours students are currently being recruited for select projects and are genuine prospects for recruitment.
Consider a support program appropriate to the needs of the post-doctoral fellows.
A support program for post-doctoral fellows will be expanded.
is at the cutting edge of science globally and is delivering real benefits for the dairy industry. The CRC is characterised by strong and strategically focussed leadership and management and a shared unity of purpose by the participants. The collaborative nature of the industry is a strength which underpins the success of the CRC...The research
PROJECTED IMPACT
The CRC’s work is progressing according to expectations and the CRC is on track to deliver the value described in the Commonwealth Agreement across both pasture and animal improvements. There have been clear early indicators of success in the Animal Improvements
program. The Designer Forages program now has a range of innovations at advanced stages of development and there is growing anticipation of implementing multiple new innovations in new pasture varieties. Some project areas, such as sex selection, have faced technical challenges and were reviewed in 2012–13. Each of these projects has clear criteria to determine whether to progress or discontinue activities. One of the sex selection projects has now concluded in accordance with these criteria. A review of the Impact Tool considered progress in each project, revised the likelihood of success and updated economic projections. Many projects now have significantly greater likelihood of success, although there is also a need in some projects to extend the timelines for impact to reflect the tasks required to commercialise new innovations. This re-assessment demonstrated that impact will occur in a similar magnitude to the original modelling ($320 million), with substantial additional benefits likely to accumulate in subsequent years as there is greater uptake of new innovations.
SMALL-TO-MEDIUM
ENTERPRISE ENGAGEMENT
The Australian dairy industry is made up of approximately 6700 small-to-medium enterprises (SMEs) and many of its service providers are also SMEs. The CRC strategy involves both direct contact, and indirect engagement via participants.
One focus of direct engagement with dairy farmers has been the CRC’s work to develop genomic breeding values for Jerseys, which were published in August 2012. Farmers contributed tail hair samples from 63 Jersey herds across Australia for genotyping, and results were shared with each participant in a manner that supports the early use of genomic products. During the year, the CRC also commenced a project to better
engage farmers in sharing fertility data with ADHIS so the data can be incorporated into bull breeding values.
The major participants that support indirect engagement with SMEs include Dairy Australia, ADHIS (which provides information about genetic improvement to all dairy farmers), Murray Goulburn (which has around 2500 dairy farmer shareholders), Fonterra (which has more than 1500 farmer suppliers), and Genetics Australia (which has more than 5000 farmer members).
COLLABORATION
Global collaboration has expanded during 2012–13. The CRC entered into a new agreement for accelerated dairy cattle genomics with leading international dairy improvement company CRV. The CRC also joined with 14 other international organisations in the Global Dry Matter Intake initiative to develop genomic breeding values for feed intake. The CRC has continued to collaborate with breed societies Holstein Australia and Jersey Australia in research projects to deliver genomic products for their breeds. As a result, genomic breeding values are now available through ADHIS for both Holsteins and Jerseys.
Collaboration continued with major pasture seed companies, where a range of innovations is being assessed in a pre-commercial phase or are now in commercial use.
Every project has a research participant and an end-user participant actively involved in the oversight of the project. Projects have been established on the basis of relevance to end-users, and end-user involvement regularly adds value in terms of project design, access to the latest plant varieties and animal genetics, and expertise in marketing and technical support of innovations.
RISKS AND IMPEDIMENTS
The CRC has a risk management framework, under which the Board and management actively manage risk and regularly review all CRC activities. The overall risk profile of the
CRC is low, given the strong commitment from participants, the technical progress achieved and the stable workforce. Risks that have been identified and are being actively managed are:
• The cash and in-kind contribution risk, which is mitigated through significant additional contributions to date and an increase in project participants • Technical risk, which is mitigated
through the management of a diversified portfolio of projects. Additionally, the CRC has recognised the need to introduce key stop/go points for projects in order to manage research and commercial direction
• Market risk, which is mitigated through regular, consistent and detailed communication to end-users and other key stakeholders. The Board and committees continue to monitor the market risk for adoption of GM pastures. Large-scale increases in food consumption and a reputable process for regulating GM technology are likely to reduce market risk.
END-USER ENVIRONMENT
The recent environment has been difficult for dairy farmers, with a sharp fall in export milk prices, high input costs and a high Australian dollar. National milk production declined by 3% from the previous year (2011–12) to yield 9.2 billion litres. However, the market has turned around quickly, with international milk prices increasing by more than 40% (in $USD terms) between January and June 2013, a reduction in the value of the Australian dollar, and favourable winter conditions. Recent events continue the trend towards greater volatility of the business environment, and further stimulate farmers’ appetite for the adoption of innovations that can reduce the impact of economic volatility.
ACTIVITIES OUTSIDE OF
THE COMMONWEALTH
FUNDING AGREEMENT
None.NAME ORGANISATION CRC POSITION/ROLE COMMITTEDTIME
Dr David Nation Dairy Futures
Ltd Chief Executive Officer 100%
Mr Colin Daws Dairy Futures
Ltd Chief Operating Officer 100%
Ms Belinda
Griffiths Dairy Futures Ltd Education and Industry
Engagement Manager
100%
Ms Jen
Bladon-Clark Dairy Futures Ltd Communications Manager 60%
Prof. German
Spangenberg DEPI Victoria Chief Scientist and Program 1
Utilisation Leader
30%
Prof. Ben Cocks DEPI Victoria Deputy Chief
Scientist 50%
Prof. John
Forster DEPI Victoria Program 1 Manager 70%
Assoc. Prof. Ben
Hayes DEPI Victoria Program 2 Manager 60%
Dr Mick Blake* Dairy Australia Program 2
Utilisation Leader 50%
CORPORATE
MANAGEMENT
MANAGEMENT TEAM
The Chief Executive Officer (CEO), Dr David Nation, is responsible for ensuring the proper management and administration of Dairy Futures CRC. He is accountable for implementing strategic direction set by the Governing Board and has full authority of the Board to carry out his role as defined in the Constitution and as outlined in the Delegated Authority Policy. During the year, support to the CEO in managing the day-to-day operations was provided by the Chief Operating Officer (Colin Daws), Education and Industry Engagement Manager (Belinda Griffiths), Communications Manager (Jen Bladon-Clark), Executive Assistant (Nora Veljanovski), and Administrative Assistant (Amanda Lovell). Participants also provided a range of professional services. The Get into Genes program was delivered by the Get into Genes Acting Manager (Anjali Sahasrabudhe) in conjunction with La Trobe University, the Australian Centre for Plant Functional Genomics and the University of Melbourne.
The CEO is further supported by the Executive Management Group, which meets bi-monthly and considers issues relating to the science quality and strategic input, the annual budget, research project management, risk management and intellectual property (IP) management.
* Dr Mick Blake finished in his position on 31 May 2013 and was replaced in July 2013.
THE EXECUTIVE MANAGEMENT GROUP
Colin Daws
FINANCIAL MANAGEMENT
Two sets of financial information are prepared to describe CRC activities. Contributions to the CRC are recorded on a cash basis and presented in tables in this section. The accounts of Dairy Futures Ltd, the company responsible for managing the CRC, are recorded on an accrual basis and the audited company accounts are presented in the Statutory Financial Accounts commencing on page 27.For the 2012–13 period, contributions of both cash and total in-kind exceeded amounts specified in the Commonwealth Agreement. This excess is a combination of additional contributions from a number of the participants. u
CASH CONTRIBUTIONS FOR 2012–13
SOURCE ACTUAL AGREEMENT DIFFERENCE
Participants $3,404,680 $2,555,000 $849,680 Other income $124,156 - $124,156 CRC program funding $4,780,000 $4,780,000 -Additional activities - -
-Total cash $8,308,836 $7,335,000 $973,836
ORGANISATION ROLE IN CRC ABN ORGANISATION TYPE
Department of Environment and Primary
Industries Victoria Essential 42 579 412 233 State Government
Dairy Australia Ltd Essential 60 105 227 987 Industry (SME)
La Trobe University Essential 64 804 735 113 University
Australian Dairy Herd Improvement Scheme Other 97 006 475 378 Industry (SME)
Genetics Australia Cooperative Ltd Other 64 822 392 303 Private Sector (SME)
Heritage Seeds Pty Ltd Other 43 007 614 379 Private Sector (SME)
Holstein Australia Other 87 455 118 302 Industry (SME)
Jersey Australia Other 25 894 603 423 Industry (SME)
Murray Goulburn Co-operative Ltd Other 23 004 277 089 Private Sector
Fonterra Co-Operative Group Ltd Other Private Sector (International)
New Zealand Agriseeds Ltd Other Private Sector (International)
Royal Barenbrug Group Other Private Sector (International)
PGG Wrightson Genomics Ltd Other Private Sector (International)
Monash University Other 12 377 614 012 University
University of Melbourne Other 84 002 705 224 University
University of Sydney Other 15 211 513 464 University
CRV Project Partner Private Sector (International)
Geoffrey Gardiner Dairy Foundation Project Partner 18 094 733 418 Industry (SME)
CSIRO Project Partner 41 687 119 230 Australian Government
University of Queensland Project Partner 63 942 912 684 University
PARTICIPANTS
During the year CRV joined as a project participant and the University of Sydney retired as a supporting participant. All participants maintained strong contributions to the CRC.
IN-KIND CONTRIBUTIONS FOR 2012–13
CATEGORY ACTUAL AGREEMENT DIFFERENCE
Program leader (FTEs) 5.2 5.7 -0.5 Key researcher (FTEs) 5.4 8.3 -2.9 Researcher (FTEs) 10.2 5.8 4.4 Support staff (FTEs) 2.4 5.1 -2.7 Non-staff in-kind ($) $6,862,075 $5,757,000 $1,105,075
After 3.5 years of operation, the position as at 30 June 2013 is that the CRC has received significant contributions for CRC activities. This is a reflection of the high quality of research and commitment of participants. Capital expenditure
The Board of Dairy Futures CRC has adopted a policy to minimise cash expenditure on capital items wherever possible and utilise assets provided by the research providers. No material capital purchases were made for CRC activities during 2012–13.
Financial position
The CRC maintains a healthy financial position and is carrying forward unearned grant income in order to ensure milestones in the Commonwealth Funding Agreement are met throughout the life of the CRC. Dairy Futures Ltd is income tax exempt, which reduces the risk of future liabilities. Projected contributions
There are no known issues likely to impact on the CRC meeting its goals and objectives at 30 June 2013. There was a significant change in 2012–13 with the termination of projects that were co-funded by PGG Wrightson, but this is not expected to have a material impact due to increases from other participants.
INTELLECTUAL PROPERTY
MANAGEMENT
Dairy Futures CRC aims to derive maximum benefit from research outcomes through effective intellectual property (IP) management, protection and exploitation. The CRC’s Audit and Risk Management Committee and Board oversees IP management.
Formal arrangements for the management of IP are described in a range of agreements, including the participants agreement, supporting participants agreements, project agreements and an IP trust deed. Project IP is owned in accordance with the relevant project agreement. The general principle applied is that each project participant will have a beneficial interest in project IP in proportion to their contribution to the project. Similarly, the CRC will have a proportional interest based on its contribution to the project. The IP management includes invention reporting, project IP and background IP evaluation, IP portfolio management and the appropriate use of IP protection strategies. The Chief Operating Officer manages the IP portfolio. An IP register including project IP and background IP is maintained in the head office. How IP arrangements will ensure maximum benefits will accrue to end-users
All project and participants agreements refer to the principle of maximising the national economic benefit from investment. This principle drives the selection of projects and the prioritisation of effort within projects. Licensing and royalty arrangements are negotiated to maximise the adoption of technology in Australia. This includes preferential access (including first access) and simplified licensing arrangements for use of technology in Australia.
IP management strategies and their alignment with National Principles The CRC’s IP management strategies are in line with the National Principles of IP management for publicly-funded research.
The CRC and participating research providers have policies in place for ownership, protection and exploitation of IP. These policies address identification and reporting of IP, laboratory records and data management, confidentiality, publication, assessment of IP, management of IP and IP agreements. Confidentiality agreements are required for any discussions with third parties involving sensitive information. Management also ensures researcher IP agreements are adequate and effective in the assignment of IP to Dairy Futures CRC.
Dairy Futures CRC is an unincorporated joint venture with three Essential Participants (Dairy Australia, the Department of Environment and Primary Industries Victoria and La Trobe University) and a broad range of Supporting Participants.
Dairy Futures Ltd (DFL), a public company limited by guarantee, has been established to manage and govern the CRC and ensure the activities are at all times carried out in accordance with the Commonwealth Funding Agreement. DFL holds this role exclusively in that there is only one governing entity for this CRC and the one governing board (being the board of DFL itself). As a not-for-profit organisation, DFL has income tax exemption.
The Governing Board has adopted the Governance Principles as drafted by the Australian Stock Exchange and amended in the CRC guidelines.1
BOARD STRUCTURE AND
RESPONSIBILITIES
The Dairy Futures Ltd Board of Directors comprises a non-executive Chairman and five non-executive members and the CEO. The majority of non-executive directors and the Chairman are independent of any participant. The Board meets formally six times per year.
Directors are selected for the skill sets they contribute to the CRC. A majority of directors have had some experience in or exposure to the dairy industry. Collectively, the Directors bring the following skills and experience to the Board:
• governance and strategic analysis skills
• financial control skills • risk and audit skills • experience in agricultural
biotechnology activities
• experience in utilisation of science, particularly agricultural science, by dairy farmers and associated service providers
• experience in leading / managing medium to large innovation businesses • experience in commercialisation
and valuation of IP
• experience in education and training in the areas of science and utilisation • experience in liaising with
Commonwealth Government agencies. Under the company’s Constitution it is a requirement that at every Annual General Meeting two Directors must retire from office either voluntarily or by rotation. Those retiring by rotation are the Directors that have been the longest in office. During the year the Board Selection Committee, comprising key industry personnel, met to consider Gary Cornelius
and Stephen Coats who had tendered their resignations and offered themselves for re-election. At the Annual General Meeting held on 26 November 2012 the members resolved to elect both Gary Cornelius and Stephen Coats to the office of non-executive director. The Board has an Audit and Risk Management Committee and an Industry Liaison Committee. Each committee has an advisory role and comprises non-executive directors. The Board of Directors and its two committees each operate via a Charter. The primary functions of the Board are to: • formulate strategy
• monitor and assess performance • provide direction to the CEO • ensure compliance with the myriad
of contracts and agreements • review and monitor risk and
financial management • review stakeholder relations. Among its other responsibilities, the Board approves the CRC’s annual budgets, oversees and approves the allocation of research project funds, and determines whether intellectual property protection is to be pursued for the outcomes of the activities.
The Board undertakes an internal analysis of performance on an annual basis.
GOVERNANCE
The Dairy Futures CRC Board
(L–R): Dr Bruce Kefford PSM, Ms Kathryn Adams, Mr Stephen Coats, Dr Julian Caples, Mr Gary Cornelius, Dr Michael Ginnivan (Chairman), Dr David Nation (CEO), Mr Colin Daws (Company Secretary).
STATUTORY
FINANCIAL
ACCOUNTS
2012–13
Directors’ report
28
Directors’ declaration
31
Auditor’s independence declaration
32
Statement of financial position
33
Statement of profit or loss and other
comprehensive income
34
Statement of cash flows
35
Statement of changes in equity
35
Notes to the financial statements
36
Independent auditor’s report
43
The Directors of Dairy
Futures Ltd present their
report, together with the
financial statements,
of the Company for the
year ended 30 June 2013.
DIRECTORS’
REPORT
NAMES COMMENCEMENT QUALIFICATIONS EXPERIENCE SPECIAL RESPONSIBILITIES
Dr Michael Ginnivan
17/12/2009 B.Agr.Sc. PhD, MAICD Experienced agribusiness executive who has held senior management roles with international and Australian companies
Chairman
Mr Gary Cornelius 17/12/2009 B.Ec. (Hons.), FCT, FAICD
Dip
Senior adviser in corporate strategy, financial valuations, mergers and acquisitions
Chair, Audit and Risk Management Committee
Mr Stephen Coats 11/2/2010 B.Agr.Sc. (Hons.),
M.Agr.Sc. Grad. Dip. Business (Agriculture)
Senior executive with expertise in technology transfer in private and public sector operations for the dairy industry
Chair, Industry Liaison Committee Dr Bruce Kefford PSM 17/12/2009 B.Sc. (Hons.), PhD (Microbiology), Grad. Management (AGSM), MAICD, FIPAA
Senior executive with extensive experience in public sector research, specifically in the agriculture and food sectors
Ms Kathryn Adams
11/2/2010 B.Sc.Agr. (Hons), LLM, M.Bus. M.Env.Stud, Grad. Dip. Leg, Pract, Prof. Cert. Arbitration, FAICD
Agricultural scientist and lawyer with extensive knowledge of agricultural research through involvement with R&D corporations and rural-based CRCs
Dr Julian Caples 11/2/2010 M.B., B.S. (Monash
University), FAFOEM (RACP), MAICD
Corporate adviser specialising in risk management, sustainability, public relations and government affairs
Dr David Nation 16/3/2010 B.Sc.Agr. (Hons.),
PhD (Waikato, NZ), Grad. Cert. Bus. Mgmt.
Experienced manager in dairy research and agribusiness operations
Executive Director (CEO)
DIRECTORS
The name of each person who has been a director of the Company at any time during or since the end of the year is listed below, with the period for which the person was a director and their qualifications, experience and special responsibilities.
COMPANY SECRETARY
Mr Colin Daws is the Company Secretary.
PRINCIPAL ACTIVITY
The Company’s principal activity during the current year has been the promotion and management of research into and development of Australia’s dairy indus