Market backs voters

September 22, 2014

The share market reacted positively to the election result:

New Zealand shares jumped, led by MightyRiverPower, after the National Party’s convincing election victory on the weekend wiped out any regulatory fears for the power companies. Meridian Energy, Genesis Energy and Contact Energy paced gains.

The NZX 50 Index advanced 54.947 points, or 1.1 percent, to 5236.292. Within the index, 27 stocks rose, 13 fell and 10 were unchanged. Turnover was $144.2 million. . . .

“The market is buoyant and led by the power companies, which is not a surprise, given the regulatory risk declined with the National party coming into power again,” said Shane Solly, director at Harbour Asset Management. The return of the National government means a” a consistent framework and more of the same” giving the market certainty.  . .

The market likes certainty.

Business does too and it’s good not just for businesses but the jobs which depend on them.


Rural round-up

September 22, 2014

IrrigationNZ sees National’s re-election as opportunity to progress water infrastructure

IrrigationNZ congratulates the National Party on winning the 2014 general election.

“National’s re-election is an opportunity to develop the infrastructure New Zealand needs to provide surety of water for agriculture, town drinking water supply, waterways, recreational use and to future proof the country from climate change,” says Andrew Curtis, CEO of IrrigationNZ.

“The RMA reforms proposed by National will allow irrigation schemes to get up and running without further delay,” says Nicky Hyslop, IrrigationNZ acting Chair.

These schemes include Ruataniwha in the Hawke’s Bay, Hurunui in North Canterbury, Hunter Downs in South Canterbury and the Wairarapa. . .

Telford offers chance to pass on knowledge – Sally Rae:

Having worked in the dairy industries in both Africa and New Zealand, Justin Pigou says they are like ”chalk and cheese”.

Now dairy farm manager at Telford, a division of Lincoln University, in South Otago, Mr Pigou (50) is sharing his experiences in the industry.

Brought up in Zambia, he was from a farming background, which included beef, sheep, tobacco, cropping, maize and soya beans. . .

Glad he joined Young Farmers – Sally Rae:

Clinton Young Farmers Club president Andy Wells believes the skills he has learned through his involvement with the organisation will help him in the future. Photo supplied.

When Cantabrian Andy Wells (28) moved south to farm near Clinton, he thought joining Young Farmers might be a good way to meet people.

Not only had he since made ”a hell of a lot of friends” but he had also made a lot of useful connections.

The skills he gained through his involvement with the organisation would also stand him in good stead in the future, when he hoped to take on other roles in the agricultural sector. After studying environmental management at Lincoln University, Mr Wells headed overseas with a friend. . .

Synlait Milk full-year profit rises 70%, to take 25% stake in New Hope Nutritional – Jonathan Underhill:

 (BusinessDesk) – Synlait Milk, which twice cut its earnings forecast, posted earnings growth that met revised guidance and said it plans to take a 25 percent stake Sichuan New Hope Nutritional Foods Co to gain a direct interest in a Chinese infant formula brand.

Profit rose 70 percent to $19.6 million in the 12 months ended July 31, from $11.5 million a year earlier, the Rakaia-based company said in a statement. Sales rose 43 percent to $600 million.

Profit was within the guidance of between $17.5 million and $22.5 million Synlait gave in May, when it said earnings growth would be less than previously forecast because of a strong currency and an unfavourable product mix. Profit still met its prospective financial information (PFI) target. Its shares have fallen 16 percent this year as the NZX 50 Index gained 9 percent and last traded at $3.30, up from its $2.20 listing price last year. . .

Pomahaka catchment plan to manage water quality – Sally Rae,

Janet Gregory is passionate about both farming and the environment; a firm believer the two go ”hand-in-hand”.

One of the biggest challenges at the moment was the public perception of farming and its impact on water quality.

”So many people don’t think farmers care about their water and they do,” Mrs Gregory, who is NZ Landcare Trust Southland regional co-ordinator, said. . .

Primary ITO board member helping to shape the future of training in the arboricultural industry -

For Primary ITO board member Richard Wanhill it took him a while to uncover his true passion.

“After school I went overseas, and when I came back to Auckland I started University. I studied a Bachelor of Science majoring in Geography and Geology. But I didn’t really feel it was for me and I dropped out after the first year”, Richard explains.

After almost two years with no real focus and living off the unemployment benefit, Richard spotted an ad in a local newspaper for a trainee arborist.

“I didn’t even know what an arborist was!” Richard laughs. “I had to look it up in the dictionary”.

It was that newspaper ad thay spurred Richard towards a career in arboriculture. . .


Rural round-up

September 21, 2014

Diversity of services competing for awards – Sally Rae:

Three diverse Southern businesses are among the entrants in this year’s Rural Women New Zealand Enterprising Rural Women Awards. Agribusiness reporter Sally Rae finds out a little more about them.

A line-up of work boots outside Riversdale accountancy firm Hammond Davidson is not an unusual sight.

”There’s boots out there at the moment,” partner Kylie Davidson laughed yesterday, as she glanced at the front door of the business, where about 80% of the client base are farmers, farming support businesses or contractors. . .

One-stop irrigation know-how shop – Maureen Bishop:

A pilot project on 14 farms in Canterbury and North Otago has shown there is considerable scope to improve the efficiency of energy used in on-farm irrigation systems.

The pilot project was a partnership between Irrigation New Zealand (INZ), the Energy Efficiency Conservation Authority and the electricity lines companies of Canterbury and North Otago. It considered where there was an opportunity to improve the energy efficiency of on-farm irrigation systems and their operation and, if so, what the scale was. . .

Business with a twist in final – Sally Brooker:

A Timaru business is a finalist in this year’s Enterprising Rural Women Awards.

Irricon Resource Solutions Ltd is an environmental consultancy co-owned by Keri Johnston and Haidee McCabe. It is based at Washdyke but works throughout the South Island, offering services including designing dairy effluent systems, preparing and auditing Overseer nutrient budgets and farm environmental plans, water quality monitoring, aquifer and irrigation tests, ecological assessments, and resource consent advice.

Clients range from smallholdings to corporate farms. . .

  GM on the agenda at Roundtable – Tim Cronshaw:

The challenge of feeding another two billion people will go on the shoulders of Ashburton farmers Craige and Roz Mackenzie when they attend the Global Farmer Roundtable next month.

Craige Mackenzie became the first Kiwi to be invited to join farming leaders at the roundtable talks two years ago and was asked back to the event, which is part of the World Food Prize meetings in Iowa, United States. Roz has been officially invited after informally attending the last meeting.

The focus is on providing enough food for 9 billion people by 2050 through trade and technology and the subject of genetic modification (GM) to improve agriculture production – controversial in New Zealand – will be freely discussed. . . .

                                       *   *   *  *   *


Rural round-up

September 20, 2014

New products to help meet regulations:

Agri-companies are under pressure to come up with innovative new products to assist dairy farmers as they struggle to comply with tough new environmental regulations.

For example, if a farmer fails a water quality test, they face stringent conditions such as wash down before and after every milking, as well as increasing fines.

At present, the most popular method of treating water is to run it through an UltraViolet lamp, but this can sometimes cause problems if it is not cleaned regularly. . .

Kick start your career with Balance:

Ballance Agri-Nutrients is calling for applications to its 2015 agricultural and process engineering scholarship programme.

Specialist skills in the areas of engineering, science, precision agriculture and agri-business have been identified, by a Ministry of Primary Industries report, as key areas to support the future of New Zealand’s primary sector. This is a view shared by Ballance.

The Ministry of Primary Industries (MPI) released a research paper ‘People Powered – building capabilities to keep New Zealand’s primary industries internationally competitive’, on 6 June 2014, in partnership with Beef + Lamb New Zealand and DairyNZ. The report summarises the expected capability needs for each of the primary industries and associated support services. . . .

A market for all except for the roar of the stag:

Pampered pooches in America and pizzle hot pots in China are helping support venison prices to farmers.

While the top priority for the deer industry is building restaurant demand for farm-raised venison, it also caters for customers eager to source every part of the animal except, perhaps, the roar of the stag.

“In the United States, venison and other game meats are now vital ingredients in gourmet pet foods. The inclusion of 10 per cent venison in a chicken-based formula can give it serious cachet, dramatically increasing the price consumers are willing to pay for the product,” says Deer Industry NZ (DINZ) chief executive officer Dan Coup. . . .

 

Increase in milk production drives additional rail services for Hokitika:

Westland Milk Products has reached an agreement with KiwiRail for an additional daily rail service between Christchurch and Hokitika to meet the dairy company’s increasing freight needs.

Westland Chief Executive Rod Quin says the move will have substantial benefits for Westland, road users and the environment.

“During the last few years Westland’s rail freight requirements have increased substantially,” Quin says. “This has been driven by record increases in production by our shareholders, up nearly 22 percent in the 2013/14 season alone, along with an expanding product range and growing sales success in international markets. When our new nutritionals dryer comes into production in August next year, we can expect our demand for additional freight to increase further.” . . .

 

ASB Farmshed Economics Report

Mixed fortunes for long term commodity prices

• ASB revises its milk price forecast down to $5.30/kg of milk solids

• Beef prices could hit record high by year’s end.

• Lamb price gains running out of steam

The dairy markets can’t seem to catch a break, according to the latest ASB Farmshed Economics Report.

“With bumper production driving down prices, the recent Russian dairy import ban will further add to the sluggish dairy price woes,” says ASB’s Rural Economist Nathan Penny. . .


Environment first for farmers

September 20, 2014

Lincoln University research shows environmental stewardship is a high priority for farmers:

Farmers on properties with a net annual profit less than $50,000 list ‘minimising pollution’, ‘improving the condition of the property’ and ‘ensuring employees enjoy their job’ as more important objectives than ‘expanding the business’ or ‘making a comfortable living’.

That’s according to the latest results from research conducted by Lincoln University Senior Lecturer in Farm Management Research, Dr Kevin Old, and Research Fellow, Dr Peter Nuthall, who sought opinions and preferences with regard to farm succession and governance.

According to the researchers, the prioritised objectives of less profitable farmers may reflect a mindset which has largely dismissed the idea of achieving larger returns or expanding the business on grounds that these are essentially unobtainable. As such, job satisfaction or meaning comes from notions of environmental stewardship or quality of life.

Interestingly, farmers on properties with lower returns also placed ‘attending field days’ as one of the lowest objectives.

There could well be a link between this apparent unwillingness to learn and low returns. But it could also be that these farmers don’t feel they can afford the time off their farms.

For more profitable farms (those with a net annual profit of $100,000-$150,000) the same objectives appear as top choices, albeit in a slightly different order. These farmers put ‘it is important to make a comfortable living’ at the top of the list. However, the other top ranked objectives are in the same order with ‘minimise pollution’ fitting in after ‘ensuring employees enjoy their job’.

Of great surprise to the researchers was the objective ‘it is important to pass the farm to family’ being placed at the bottom of the list as the lowest ranked objective. . .

I think this has changed after the ag-sag of the 80s when farms couldn’t afford to have adult children come home and they got work elsewhere.

New Zealand has historically had an orientation toward the family farm: ownership systems were simple, and most farms kept one or two people fully occupied. Likewise, objectives were orientated toward farming ‘as a way of life’. The research aimed at ascertaining whether this traditional model has changed and to what degree.

It was found that the average age of farmers in New Zealand in 2006 was 50, but in 2013 this had edged up to 53. The average farm size has similarly increased, from 557 hectares in 2006 to 591 hectares in 2013.

The average number of people working on the farms has also increased. In 2006 it was 2.05, whereas the figure for 2013 sits at 2.76.

The researchers noted that changes in employment levels per farm are most pronounced in the dairy sector. This is no doubt due to growth in the sector which has seen dairy production increase from 951.5 kilograms of milksolids per hectare in 2006 to 1134.3 kilograms of milksolids per hectare in 2013 (compared with a drop in lambing productivity from 130.3 percent to 127 percent).

The South Island in particular has seen a notable increase in average farm size, which has gone some way to contribute to the fact that 3.2 percent of all farms in New Zealand – all of which are dairy operations – now have eight or more people working on them.

Across all farm types, 25 percent are run by a single person. Farms with two people make up a further 41 percent, with three person farms covering an additional 13.5 percent. As such, close to 80 percent of farms in New Zealand are still low labour operations.

Of note, 20 percent of all New Zealand farms are sheep farms and have three people or fewer working on them.

It was also found that sheep farms experience less of a problem finding sufficient labour than dairy operations.

That reflects our experience.

Along with the increasing age of farm managers, the number of years which farmers own their farms is probably increasing. Currently the average length of ownership is 25 years.

Another change is likely to be in the number of farms each farmer has an interest in. While nearly 60 percent of farmers are involved with only one farm, the average across all farm types is 1.75 farms. This number is increasing, however, largely due to the growth in dairying, with some farmers holding an interest in more than seven farms.

It was found that family farms have a variety of ownership systems. Private companies are becoming important, with 14 percent of the respondents noting they have such a company. This might be combined with various other ownership systems, of which a trust could be one. In fact, the results showed that trusts factor into 47 percent of all properties in one form or another. Of the respondents, only 1.24 percent reported a public company ownership model.

Of all partnerships, around 70 percent involve a spouse. An additional 25 percent also involve one or more family members, but partnerships with non-family members are uncommon. A farmer’s spouse is also an important person in the case of trusts.

The researchers found that, on the whole, family ownership systems are such that the farmers themselves make most of the decisions. Indeed, the farmers reported they were the main decision maker on 71 percent of the farms, although they do frequently consult other family members before acting. It is suspected that this has probably changed over the years. Overall, it is likely that family members and other ‘important people’ are increasingly consulted.

All in all, while farms are certainly getting larger and farmers are staying longer on their farms, ownership systems largely remain relatively simple, and farmers continue to make most of the decisions on their own. Likewise, farmer objectives probably haven’t changed much, although the extra emphasis on the environment and sustainability was surprising.

“If you believe all that you read you would get the impression that New Zealand farming is going corporate,” says Dr Peter Nuthall. “But, while it is true that some corporate or quasi-corporate family arrangements exist, by far the majority of farms are simple family affairs.”

Farming doesn’t provide a high return on capital so is more suited to family operations than corporate ones which generally are more focussed on the bottom line over a shorter time period.


Rural round-up

September 19, 2014

Farmers have spent millions in the Horizons region:

A Federated Farmers survey has revealed the average dairy farmer in the Horizons Region has spent over $110,000 on environmental management in the past five years.

“There are huge numbers being invested in the region, which tells a really positive story about where we are heading environmentally and the buy in that is coming from the farmers,” says James Stewart, Federated Farmers Manawatu-Rangitikei provincial president.

“As people vote tomorrow I genuinely hope they will realise that farmers are doing a lot to farm more sustainably.

“It is very difficult to put a number on environmental spending, but we wanted to try, so we sent a survey out to all 918 dairy farms via the Horizons Regional Council. We were stunned by the response, not just the figures but how many people replied during their busiest time of year, calving season. . .

 

Working group focused on clear advice:

The industry-led working group looking at the issues with swedes affecting dairy cattle in Southland says a key priority will be developing clear and agreed advice for farmers.

The group met for the first time this week, with DairyNZ’s Southland regional leader, Richard Kyte, chairing the meeting. The group includes representatives from Southland veterinary practices, Federated Farmers, Beef+Lamb NZ and PGG Wrightson Seeds. It also has specialist advisors on veterinary pathology and plant science.

“Evidence and science-based information is crucial and will be the focus of this group. Gathering this information is a work in progress and will involve all parties,” says Richard. . .

Dairying business woman takes top role:

Delwyn Knight has taken the role of general manager of Liberty Genetics where she is leading a team that’s making headway in the competitive dairy genetics market.

Although modest about landing the top job, Knight admits that she is one of very few women working in top dairy genetics roles, and she is excited about taking on the position.

“It’s great to be in a position where I can provide value and support to farmers when they are making important farming business decisions,” said Knight.

“I’m really looking forward to working directly with our farming clients, understanding what their needs are and supporting them to get the best results for their herds.” . . .

Robotic sheepdogs unlikely Kiwi farmers say:

At the risk of being out of step with technology, Federated Farmers is dubious robotic sheepdogs will replace the real thing anytime soon.  Reported late last month, European academics believe they have created an algorithm simulating sheepdog behaviour.

“I am not saying it won’t come to pass but it’ll be more like one farmer robot and its droid than dog trials being replaced by droid trials,” says Rick Powdrell, Federated Farmers Meat & Fibre spokesperson.

“Anyone who works with dogs and sheep knows there’s more to this than an algorithm.

“For starters, there is a primordial instinctive connection between the two animals.  How you simulate that I have no idea. . .

Landcorp completes  full purchase of Focus Genetics:

Landcorp Farming Ltd. is now sole owner of livestock genetics business, Focus Genetics. The announcement comes after Landcorp successfully acquired the remaining 33% shareholding from
Rissington Breedline.

Hawkes Bay based Focus Genetics is New Zealand’s largest red meat genetics business with 17 breeding partners throughout New Zealand.  Formed in 2011, Focus Genetics has since grown its
market share, serving more than 750 commercial farm operations. 

Last year the company sold over 4,000 rams, 800 bulls and 400 stags to farmers in New Zealand and overseas.
Gavin Foulsham, Focus Genetics CEO, said having one owner provided certainty for the company’s plans to invest more towards achieving greater rates of genetic improvement. 

It also means Focus could explore more sales opportunities offshore. . .

I want to eat a weka - Offsetting Behaviour:

It’s been more than five years since I first posted on Roger Beattie’s felicitous “Eat them to save them” campaign. And I still am not allowed to buy a weka for dinner.

Roger is one of New Zealand’s great enviropreneurs: the National Farming Review called him an Eco Anarchist. He loves the environment and sees the best way of saving it as ensuring that it’s profitable to save it. Weka are endangered, but they’re easily farmed and tasty. Why aren’t we raising them for the restaurant trade and conserving an endangered species in the process? The Department of Conservation says no. They say no incredibly incoherently. But their “No” is what matters. . .

Two gold medals for Goldie Wines:

Goldie Wines on Waiheke Island has won its first gold medals for new owners, University of Auckland and winemaker, Heinrich Storm.

Two Goldie Syrah wines from the 2013 vintage took two of the eight gold medals awarded in the Syrah category at the recent NZ International Wine Show.

The Goldie Syrah 2013 and Goldie Reserve Syrah 2013 were awarded gold in what Heinrich says is a significant achievement for the new operation.

“These medals are the first won since the University took over ownership of the vineyard in 2011 from Goldwater Wines,” he says. “Also for me it is significant, because they are my first as winemaker for Goldie Wines.” .  . .


Rural round-up

September 18, 2014

The most boring bankrupt economic argument–“we export raw logs when we could be adding value and making jobs” : Eye to the Long Run:

The rot set in in the late 1940s on this. Jim Anderton was maybe the first in the modern era to believe we wantonly refused to profit from the blindingly obvious money and jobs to be had from processing timber.

In recent times only Winston Peters has been bright enough to see what the entire business sector has apparently completely missed.

Now, joining him as a value add timber processing expert we have the lawyer from Herne Bay – Mr Cunliffe who has spotted the opportunity.

It is, you understand, not so profitable that any of them would give up their day job… it never is, is it? . . .

Future of red meat promotion under threat – Allan Barber:

Next year’s Commodity Levy Act referendum is one of the factors concentrating meat industry minds on the question of red meat promotional investment. B+LNZ is currently conducting a consultation round with individual meat companies to find out how this critically important, if contentious, topic should be agreed for the benefit of all industry participants.

B+LNZ Chief Executive Scott Champion told me it’s too early to make any predictions about the outcome, at least until after completion of the consultation round at the end of September. With the referendum about 12 months away, the process is geared to providing time to gather enough detail for promotional strategy development before taking this out to farmers to test it in advance of the vote. . . 

New Zealand’s Hake and Ling Join Top 8% of World’s Sustainable Fisheries:

Hake and ling from New Zealand are now among the top 8% of global sustainable fish species after being recognised by the Marine Stewardship Council (MSC).

Each of the three New Zealand hake trawl fisheries, five ling trawl fisheries and five ling long line fisheries have been certified as sustainable against the MSC standard – the ‘gold standard’ for sustainable seafood production.

Only 8% of the world’s wild-capture harvest is certified through the global MSC programme which sets high internationally-accepted standards for sustainable fishing and provides consumers with assurance that MSC certified seafood is sustainable, based on sound, independent science. . .

 

Rural New Zealand wants gigabit equality:

Federated Farmers and TUANZ believe it is essential the next Government delivers better connectivity to rural New Zealand, and is keen to work with them to make that happen.

“We are encouraged by the National Party’s further commitment of $150million, if they’re re-elected, and hope to see a similar commitment from our next Government announced this Saturday” says Anders Crofoot, Federated Farmers Telecommunications Spokesperson.

“Federated Farmers and TUANZ support a Gigabit Agenda for Rural New Zealand that doesn’t leave our productive sector behind. We need to talk about gigabit speeds, where farmers can eventually get their gigabytes as fast as the townies do. . . .

 The right people trained the right way -  Craig Littin:

Our recently released Manifesto talks about building a sustainable farm system giving us the collective means to go forward as a nation.  We can and we will be more than we are today, but to do that we need the right people trained the right way.

Firstly we need to look at what we are trying to achieve. We need to have the young people of New Zealand believing that farming is the attractive career option that it is. We also need to put our money where our mouth is in terms of investing in education, science, research and innovation.

There are some great stories out there of the highly skilled people in our industry who have worked through the agricultural industry to now run multimillion dollar businesses, on very attractive salaries. These opportunities are available to anyone with the enthusiasm, intellect and discipline required to make it in the dairy industry, but we need sound education systems to get the right people into the industry. To do this we need to align the requirements and standards to fulfil job roles with the qualifications offered within primary industry training/education institutes. . . .

Molkerei Ammerland Completes First Sweet Whey Powder Auction on Globaldairytrade:

Sweet whey powder has been sold for the first time on GlobalDairyTrade (GDT), the world’s leading online dairy auction platform, with Molkerei Ammerland selling the product they offered at their first trading event.

Molkerei Ammerland CEO Ralf Hinrichs said the company was pleased with the results from the first SWP online auction.

“Through GDT we have been able to extend our reach to a larger number of customers, and to transact with them much faster. We’re looking forward to using GDT to grow our export market,” he said. . .

Tasman Tanks Appoints Craig Hemmings as Dairy Effluent Sector Manager:

Leading New Zealand and Australian storage tank company Tasman Tanks, has appointed Craig Hemmings as dairy effluent sector manager.

Mr Hemmings brings to his position more than a decade of management experience with nationally and internationally recognised agricultural companies.

As dairy effluent sector manager for Tasman Tanks, Mr Hemmings will oversee the operational management of the company’s dairy effluent division in New Zealand.

“From small beginnings in 1996, Tasman Tanks has built its reputation on designing, manufacturing and installing fully engineered and certified tanks,” said Mr Hemmings. . .

 Central Otago Wine Industry no longer a “One Trick Pony”:

As we have come to expect, Central Otago wines dominated the medals for pinot noir at the 2014 New Zealand International Wine Show, taking out 10 of the 15 Gold Medals awarded. But what is more interesting about the results of this show is that Central Otago wines won medals in a total of 10 different wine categories – Methode Traditionelle, Riesling, Sauvignon Blanc, Pinot Gris, Gewürztraminer, Chardonnay, Dessert Wine, Rose, Pinot Noir, and Syrah.

Now in its tenth year, The New Zealand International Wine Show is firmly established as the largest wine competition held in New Zealand each year. The 2014 New Zealand International Wine Show was judged from 8th to 10th September in Auckland and attracted a total of 2130 entries. Trophies will be awarded at the Awards Dinner on 27 September. . .


Follow

Get every new post delivered to your Inbox.

Join 1,377 other followers

%d bloggers like this: