Rural round-up

July 12, 2014

Trade deal with Japan could prove too costly:

Japan’s Prime Minister, Shinzo Abe, must have noticed a striking difference between New Zealand and Australia when he visited the countries on consecutive days this week. In New Zealand he found a firm commitment to a comprehensive trade agreement, the Trans Pacific Partnership. In Australia he was able to sign a soft bilateral “free trade” agreement, settling for much less on agriculture than other food producers hope to gain from the TPP. Australia is not a team player on trade – it is prepared to undermine collective efforts when offered a lesser but exclusive deal. Japan’s attitude is more important.

It is a country in economic and demographic decline but it is still one of the world’s largest economies, second only to the United States among the 12 nations negotiating the TPP. Its side-deal with Australia was disappointing, bearing out New Zealand’s expressed doubts that admitting Japan to the talks was a good idea. But elsewhere hopes persist that Mr Abe is serious when he uses the TPP as leverage for much needed and long overdue reforms of Japan’s economy. . .

Council not investing in water scheme:

Another potential investor has decided against putting money into Hawke’s Bay’s controversial Ruataniwha water storage scheme.

The Central Hawke’s Bay District Council says it believes the proposed $600 million scheme, which could irrigate about 25,000 hectares, could be a huge money- and job-spinner for the region.

But deputy mayor Ian Sharp said on Friday the council won’t be investing in it, now that residents have overwhelmingly opposed borrowing the $5 million needed to do so.

“I think it’s important we distinguish between support for the water scheme and borrowing money to invest in the water scheme,” he said.

“A number of the submitters who did not want us to borrow money to invest are 100 percent behind the scheme, they just felt it was fiscally irresponsible for the council to borrow money to invest in the scheme.” . . .

Reappointments to FSANZ board:

Minister for Food Safety Nikki Kaye today announced the reappointment of Andrew McKenzie and Neil Walker to the Food Standards Australia and New Zealand (FSANZ) Board.

Dr McKenzie has a background in veterinary public health, food safety, food regulation, international and financial management.  He has extensive knowledge of the New Zealand food regulation system having led the New Zealand Food Safety Authority from its inception in 2002 until 2010.

Mr Walker is a food scientist and has spent 35 years working in senior roles in New Zealand’s dairy industry.  He has strong governance experience and has been a chair, director, trustee and committee member of public councils and authorities.

The reappointments were proposed by New Zealand in a formal process that required acceptance by the Australia and New Zealand Ministerial Forum on Food Regulation. . .

Fonterra and Abbott to Form Strategic Alliance for Dairy Farming in China:

First Farm Expected to Produce Milk in First Half of 2017

Fonterra Co-operative Group Ltd and Abbott today announced the signing of an agreement to develop a proposed dairy farm hub in China. The strategic alliance, which is subject to Chinese regulatory approval, will leverage Fonterra’s expertise in dairy nutrition and farming in China and Abbott’s continued commitment to business development in China.

Dairy consumption in China has been rising steadily over the past 10 years. The continued development of safe, high-quality milk sources is essential to meeting this growing demand from Chinese consumers. Fonterra and Abbott are pleased to be able to work together and through this alliance to make a positive contribution to the growth and development of China’s dairy industry. . . .

Fonterra seeks Hokkaido farmers for dairy study:

Fonterra is seeking four Hokkaido dairy farms to take part in a study to increase the efficiency and profitability of grassland dairy farming in Japan.

The study, which begins in December this year, will involve the collection and monitoring of physical, production and economic performance data from four leading Hokkaido grassland dairy farms. The analysis will take place over one production season and include data collection over summer outside grazing periods and during indoor winter housing.   . .

Top food science award for Massey professor:

MASSEY UNIVERSITY Professor Richard Archer has been awarded the New Zealand Institute of Food Science and Technology’s most prestigious honour, the JC Andrews Award.

The annual award is in memory of Massey’s first Chancellor, Dr John Clark Andrews, who proposed that New Zealand’s first food technology degree be established in 1964. The award recognises institute members who have made a substantial contribution to science and technology and leadership in the food industry. . .

A brilliant new wound care products – Medihoney:

Now available at the SummerGlow Apiaries online store is the Comvita Medihoney range of products.

Medihoney combines leading wound care and therapeutic skincare products made with an exceptionally high quality medical grade Manuka Honey.

Comvita uses advanced scientific knowledge to maximise this honey’s potential in all of its therapeutic products.

Medihoney products challenge the reliance on synthetic medicines and treatments and provide a natural alternative for wound and skin care, suitable for use by the whole family. . .

It's Cow Appreciation Day! Let's pause for a little moment and think about all the  amazing cows in the world. It’s easy to forget how awesome these animals are and how integral to our daily life. #CowAppreciationDay


Rural round-up

July 10, 2014

India’s massive buffalo exports reflect different approach to food safety – Alan Barber:

India has exported well over 500,000 tonnes of buffalo to Vietnam in 10 months of the latest July to June year. This figure easily exceeds the total of New Zealand’s beef exports to all countries.

Over the same period India’s total bovine (buffalo) exports were 1.45 million tonnes at an average value of US$3041 (NZ$3475), while the average price to Vietnam was US$3489 (NZ$3987), an increase of 40% since 2012. Other main markets in order of importance are Malaysia, Egypt, Saudi Arabia, Jordan and United Arab Emirates.

In comparison New Zealand’s beef exports command an FOB price of between $5000 to the USA, Canada, Korea and China and up to $9000 to French Polynesia, the highest paying market, with other main markets such as Japan, Taiwan and Europe at various points in between. . . .

Consultation opens on infant formula proposals:

Food Safety Minister Nikki Kaye today announced the opening of consultation on measures that aim to ensure the robustness of the government’s assurance system for infant formula exports.

“In June last year I announced a work plan to further protect and strengthen confidence in New Zealand’s food assurance systems, to match rapid growth in infant formula exports,” Ms Kaye says.

“Export assurances are particularly important for infant formula exports where consumers have strong concerns about food safety, quality and product integrity.” . . .

Wools of NZ:

It’s not our wool, we borrow it from nature to where we can return it.Photo: It's not our wool, we borrow it from nature to where we can return it.

Why politicians shouldn’t be on the field of play – Andrew Hoggard:

In case you were expecting Willy Leferink this week, there has been a bit of a change at Federated Farmers.  My name is Andrew Hoggard and I am the new Dairy Industry Group chair.  That’s not the only change.  Being a North Islander you may get a slightly different perspective on things as I farm with my wife and two children near Fielding in Manawatu. That’s of course the region which gave us that planning beast called “One Plan.”

At Federated Farmers National Conference last week, we heard from political leaders from across the spectrum.

One common theme that annoyed me and the farmers around me was this notion that New Zealand is doing the wrong thing in the marketing of its agricultural products.  That we are not adding value and are just doing cheap and nasty commodity products thanks to industrial farming practices.  Oh and the primary industries are like putting all our economic eggs in one basket.  Now where have I heard that before? . . .

Environment Southland listening to farmers:

Federated Farmers commends Environment Southland for listening to the concerns of Hill and High Country farmers, and delaying notification of the proposed Hill and High Country Development Plan Change today.

“The council’s decision, having engaged and taken on board farmers concerns, will result in better outcomes for farmers and the environment,” says Allan Baird Federated Farmers Southland acting provincial president.

“Taking time to fully consider the issues, potential impacts, inclusive of the whole community and their values, is a fundamental part of the National Policy Statement for Fresh Water Management, and needs to be central in all decision making. . .

Finalists of Consultant of the Year Awards announced:

The judges have deliberated and the finalists have been selected for this year’s annual Farmax Consultant of the Year Awards.

Today Farmax announced the finalists for the DairyNZ Dairy Consultant of the Year, Beef + Lamb NZ Sheep and Beef Consultant of the Year, and NZIPIM Emerging Rural Professional of the Year.

Farmax general manager, Gavin McEwen, said it was great to see such a high standard of talent and skills amongst the nominations. . . .


Rural round-up

July 9, 2014

Thoughts from the UK – Alan Barber:

While in the UK briefly last week I spent a couple of nights with an old university friend who actually got a First in Agriculture at Cambridge which was the best degree achieved by any of my friends or, not surprisingly, me. He farms near the M4 in Berkshire less than 100 kilometres from London.

As usual when I see him, we were chatting about the state of agriculture in our respective countries. He asked me whether I needed a ‘pommie farmer whinge’ to provide some material for a column, so not unnaturally I told him to go ahead. His first complaint was about the amount of New Zealand lamb competing with British lamb in the supermarkets. I suggested the view back home was the natural seasonal fit of New Zealand product didn’t really cut across, but rather complemented, the seasonal availability of British lamb. . .

Professional Foresters Award Their Achievers:

Leaders in the forestry industry were recognised at the New Zealand Institute of Forestry’s annual awards dinner held in Napier last night.

Forester of the Year was awarded to Paul Nicholls, managing director of Rayonier NZ,for outstanding service to the forestry industry.

The award is one of the highest accolades in the industry, recognising contribution, leadership, excellence and integrity. . . .

 Agrarian socialism’s sticky end? - David Leyonhjelm :

THE sugar industry is notorious for attaching itself to the public teat. Concentrated in several marginal seats along the Queensland coast, it has a long history of extracting taxpayer subsidies when prices are down, coercing governments into mandatory use of ethanol in fuel, and blocking imports of both sugar and ethanol.

Most famously, a decade ago it received hundreds of millions of taxpayer dollars to help it restructure in the face of low prices. Prices bounced back soon after the scheme commenced and, apart from the impact of abolition of the single desk in 2006, not a lot of restructuring occurred. They kept the money though.

A major controversy has now erupted as a result of the decision by the sugar processing company Wilmar to sell all its sugar direct to international customers rather than via the grower-owned marketing organisation, Queensland Sugar Limited (QSL), beginning in 2017. This has prompted another processor, Thai-owned MSF Sugar, to suggest it may follow suit. True to form, there are numerous calls for regulators and governments to intervene. A horde of politicians, including the Queensland Minister for Agriculture, is taking a close interest. . . .

 Environmental support for sheep and beef farmers:

Sheep and beef farmers will have a stronger voice in the regions on environmental issues, through an agreement between Federated Farmers and Beef + Lamb New Zealand.

Beef + Lamb New Zealand has added a regional policy capacity to its national and international policy activities directed at sustainability, through a contract with Federated Farmers to use its regional policy network.

Beef + Lamb New Zealand chief executive, Dr Scott Champion said: “Federated Farmers has an excellent regional network. Rather than duplicate that, we’ve reached an agreement to use its resources on regional environmental issues.

“We think this is the most efficient way of using sheep and beef farmers’ money to strengthen our voice in this important area.” . .

Genetics used to combat facial eczema:

Dairy farmers battling the devastating livestock disease facial eczema are getting help from scientists and a cattle breeding company.

Facial eczema is a fungal disease spread from spores in pasture. It can kill livestock and is estimated to cost dairy farmers about $160 million a year in lost milk production.

AgResearch and CRV Ambreed, with the backing of DairyNZ, are taking a genetics approach by breeding dairy cattle that are more resistant to the disease. . .

Clue to late puberty in sheep discovered by AgResearch:

A needle-in-a-haystack search for the genetic cause of delayed puberty in a flock of Romney ewes has paid off for a team of AgResearch scientists.

Understanding what regulates the arrival of puberty is important for livestock breeding as well as human health.

Researchers in AgResearch’s Animal Reproduction team at Invermay had noticed that late puberty was a family trait in their research flock. This caused the late developers to miss out on lambing during what could be their first breeding season. They had previously demonstrated that late developers also produce fewer lambs during their lifespans. . .

Rural talent on display in Lincoln:

Every year New Zealand Young Farmers (NZYF) members from across the country come together to catch up, cheer on their Grand Finalist at the ANZ Young Farmer Contest, compete in the clay target shooting, fencing and stock judging national finals and attend the Annual General Meeting.

The top scoring competitors from the regional levels represented their regions as they battled it out for top place at the finals in Lincoln University, Friday 4 July.

The winner of the Gun City Clay Target Shooting Final was Waikato/Bay of Plenty’s Jeffrey Benson of the Hamilton City Young Farmers Club followed by Isaac Billington of the South Waikato Club and in third place was Otago/Southland representative, Brendon Clark of the Tokomairiro Club. . .


Rural round-up

May 31, 2014

Lower forecast still good - Hugh Stringleman:

Fonterra’s confident opening forecast of $7 a kilogram of milksolids for the new season has equal upside and downside in volatile times for world prices and the New Zealand dollar, chairman John Wilson says.

Many uncertainties meant the only thing Fonterra could predict was that the 2014-15 season wouldn’t end on $7, he joked.

“The best way we can serve our farmers in the pre-season is by giving the most accurate forecasts.”

The market realities included considerable volatility in world prices, high NZ dollar exchange rates, and potential for big milk production increases in Europe and the United States, he said.

That said, Fonterra surprised market commentators with its opening price because some were picking $6.50 or less. . .

Wool stands up well when the heat goes on – Alan Williams:

People going to see I’m Loving Wool at Auckland’s Britomart as part of Wool Week were shown how wool can’t be set on fire.

Shearer and showman Billy the Sheep Man – also known as Billy Black – set an oxy-acetylene torch to the fabric to show bystanders its inflammability. 

He also showed how easy it was to set fire to a synthetic fabric.

“The blowtorch was really good,” Primary Wool Co-operative (PWC) chairman Bay de Lautour said. 

“It showed up wool’s fire-resistant qualities and we need to do more on that to show how safe woollen children’s wear is.” . . .

The reasoning behind my micro dairy business – Milking on the Moove:

In the next 2 months, I’ll begin milking a small herd of 15 cows. I’ll sell the milk direct to the public. I’ll milk my herd on leased lifestyle blocks, using my mobile cowshed.

In my last blog post I outlined 5 points that I wanted to achieve with my new business.

  • Create a truly environmentally sustainable dairy business
  • Create farming opportunities for young people that also provided a great lifestyle
  • Keep control of the value chain
  • Offer real unaltered whole milk to the public
  • Concentrate on building a brand rather than owning land

It’s taken a few years of thinking about the issues and I wanted to briefly outline how I have come to settle on my current system. . .

He has a  quick video of the mobile cowshed.

Overseas experience to boost foot and mouth preparedness:

A team of vets and animal industry representatives are heading to Nepal next week for first-hand experience in dealing with foot and mouth disease (FMD), Primary Industries Minister Nathan Guy says.

“This field training is part of a newly signed agreement with Australia to cooperate and work together on preparedness for this disease,” Mr Guy says.

“While both countries are determined that it never enters our borders, we still need to be prepared and work on our readiness and capacity.

“Everyone knows that an outbreak would have major impacts on our valuable livestock industries, disrupting our exports and trading reputation. It would be devastating for farming families, rural businesses and communities. . .

Govt Inquiry into WPC to conclude in November 2014:

Primary Industries Minister Nathan Guy and Food Safety Minister Nikki Kaye said today that they have received a letter from the Chair of the Government Inquiry into the Whey Protein Concentrate (WPC) Contamination Incident, advising that:

“The Inquiry has considered the time that will be needed to report, taking into account the work already undertaken by the Ministry for Primary Industries and Fonterra investigations, the number and nature of the issues arising from the Terms of Reference; the number of participants; volume of material; and the need for fairness to all participants.

Our preliminary advice has been that 6 -9 months would be an appropriate estimate. However, conscious of the need to resolve matters promptly, and in anticipation of full cooperation from all participants, the Inquiry’s present estimate is that it will require until Friday 28 November 2014 (6 months) to present its final report. Participants with whom the Inquiry has consulted have accepted this is a realistic estimate.” . . .

Addressing the big issues at our High Country Conference:

Federated Farmers will be addressing the big issues at their High Country Conference next week in Queenstown.

“We will be talking about what it means to be a ‘Good Neighbour’, and what it means in achieving positive outcomes,” says Chas Todhunter, Federated Farmers High Country Spokesperson.

“We are pleased that we have both sides of the political spectrum speaking, with Eugenie Sage, Green Party spokesperson on the Environment, Conservation, Water and Local Government, and Hon. Jo Goodhew, Associate Primary Industries Minister, both attending. I would expect there will be a lengthy question time from our delegates. . .

New programme set to transform hill country farms:

A new Primary Growth Partnership (PGP) programme focussed on transforming hill country farms is formally underway, after this week’s contract signing between the Ministry for Primary Industries (MPI) and industry co-investor Ravensdown.

Announced in principle in June last year, the Pioneering to Precision: Application of Fertiliser in Hill Country PGP programme is a seven-year programme that aims to improve hill country sheep and beef farming productivity and protect the environment through more efficient and more precise use of fertiliser. 

By doing this, the programme will improve the profitability of hill country farming and generate earnings of $120 million per annum by 2030 from additional exports of meat and wool. . .

Dairy Awards Help 7000 Entrants:

About 7000 entries have been received in the New Zealand Dairy Industry Awards, since the New Zealand Sharemilker of the Year competition began 25 years ago.

“It’s a pretty impressive number. When we started to look at the figures and add up those that have entered over the years we were really surprised,” national convenor Chris Keeping says.

“What is also true is that the number of people involved or touched by the awards is many more times that.”

Mrs Keeping says many of the entries received were from couples and they were supported by farm owners, farm staff and families. Sponsors have also played a significant role in the awards programme with sponsor representatives from throughout the country backing the awards and encouraging clients to participate. . .

50 MPI officers swoop on rock lobster black market:

Fifty Ministry for Primary Industry (MPI) compliance officers wrapped up an undercover operation today that targeted recreational fishers catching and selling rock lobster (crayfish) in the South Island.

The operation was focused on activities in the Kaikoura area but also included the Christchurch and Marlborough/Nelson areas.

It is illegal to sell your recreational fishing catch with a maximum penalty of five years imprisonment and/or a $250,000 fine. . . .


Highest value exports by country

May 19, 2014

Business Insider labelled every country in the world by its highest-valued export, aka the commodity that makes the country the most money in the global market.

exports

 

 

 

 

 

If you click on the link you’ll be able to see details, for example Australia’s highest value export is coal and ours is dairy products.

What struck me about the map was how few countries have food or beverage as their highest value export.

Of those, sugar was the highest value export for five.

Will the news that sugar is directly linked to heart disease  impact on them?


Rural round-up

May 2, 2014

Canada, dairy and the TPP – Keith Woodford:

Canada and New Zealand are currently in serious negotiations as to future rules for the Trans Pacific Partnership (TPP). In relation to dairy products, we sit on different sides of the debate. We want free access. In contrast, they want to retain their supply management quotas which control how much milk is produced, and hence protect the farm-gate price of milk.

The widespread assumption in New Zealand is that free trade will open up new markets in Canada. The current dairy market there is 8 billion litres per annum. To put that in perspective, our total milk production in New Zealand is about 20 billion litres per annum. So on the surface, free trade could open up exciting new opportunities.

A recent report from The Conference Board of Canada places a different perspective on matters. They agree with New Zealand that Canada should get rid of its supply management scheme. However, they see the outcome being that Canada would rapidly transform its industry and become a major exporter. . .

Dairying’s other big 2014 vote – Willy Leferink:

This year will see a general election but you have to wonder if three-year cycles are sufficient.  Let’s face it, year one is learning the ropes and doing what you promised.  Year two is fine tuning what you’ve done or running a mile from what you’ve done, meanwhile, year three is all about getting re-elected.

Many systems have four or even five year cycles and DairyNZ’s impending vote on its $61 million industry good levy fits into the five year cycle.

It isn’t appreciated by many who bemoan the lack of research and development in New Zealand, that every time my girls come in for milking, 3.6 cents in every kilogram of milksolids they produce goes towards R&D.  This money is collected by the milk processors and passed to our industry good body, DairyNZ.  It undertakes a whole host of research activities that no farmer could ever hope to do individually.  DairyNZ further leverages what it gets from us farmers in larger programmes like the Agricultural Greenhouse Gas Research Consortium and through the Primary Growth Partnership (PGP. . . .

Westland Milk Products Registered for Infant Nutrition Products Export to China:

Westland Milk Products, New Zealand’s second biggest dairy co-operative has confirmed today that it is registered to export dairy products including infant formula milk powder to China.

The company has been working with the Ministry for Primary Industries and Chinese authorities and has been notified of its registration with the Certification and Accreditation Administration of the People’s Republic of China (CNCA).

“We support the Chinese moves to impose greater controls and stricter standards around the importation of infant formula. Ultimately this will benefit New Zealand exporters by giving Chinese consumers more confidence in our products” says Westland CEO Rod Quin. . .

Synlait misses China regulation deadline as it waits on factory build - Suze Metherell:

(BusinessDesk) – Synlait Milk, the dairy processor which counts China’s Bright Dairy as a cornerstone shareholder, missed out in the first round of approvals under China’s new regulation of imported infant formula as it waits for the completion of its new processing and packaging plant.

The Ministry for Primary Industry expects Synlait will receive approval once the new dry blending and consumer packaging factory is built which is scheduled for completion next month, the Rakaia-based company said in a statement. Companies without the new registration won’t be able to sell infant formula produced from today in China.

A2 Milk Company, whose Platinum infant formula is manufactured at Synlait’s Canterbury plant, also missed out on registration, which includes demonstrating a close association between brand owner and manufacturer. . .

Synlait Milk confident of China registration:

The initial list of registered New Zealand companies issued by the Certification and Accreditation Administration of the People’s Republic of China (CNCA) did not include Synlait Milk as an exporter of finished infant formula into China. This announcement has been anticipated by the Company for some time.

The Ministry for Primary Industries (MPI) has confirmed that it expects Synlait Milk to receive registration following the approval of its Risk Management Plan by MPI for its dry blending and consumer packaging facility. Construction of this facility is scheduled for completion in June 2014. . .

FGC welcomes Nutricia’s investment:

The intended acquisition of New Zealand milk-drying and infant formula blending and packing capacity by French-owned Nutricia is a further indication of confidence in the New Zealand food and beverage industry, says the Food & Grocery Council.

Chief Executive Katherine Rich says today’s announcement is significant.

“This is great news for the industry and for New Zealand’s infant formula manufacturing capacity.

“Having such a renowned multinational company purchasing two New Zealand firms to ensure it has a major infant formula local manufacturing facility affirms once again that New Zealand’s dairy industry remains among the best and safest in the world.” . . . .

Comvita annual earnings pip 2013, meeting guidance; shares fall:

(BusinessDesk) – Comvita, which makes health products from manuka honey, said annual earnings and revenue eclipsed 2013, meeting guidance, as recent apiary acquisitions improved its security of supply. The shares fell.

The Te Puke-based company said net profit was about $7.5 million in the 12 months ended March 31 from $7.4 million a year earlier, on revenue of $115.3 million, up from $103.5 million in 2013. The company had previously said it anticipated beating 2013 profit and sales.

“When unconstrained by raw material shortages, as happened in the second six months, we clearly have growth momentum,” chief executive Brett Howlett said in a statement. “The strategy of acquiring apiary businesses is working to alleviate the supply shortage pressures.” . . .


Rural round-up

May 1, 2014

China’s taste for hotpot elevates lamb flaps from offcut to prime cut, sending prices to record – Tina Morrison:

(BusinessDesk) – China’s taste for hotpot, where meat and vegetables are cooked in a broth at the dining table, has driven a four-fold increase in the price of lamb flaps, turning the offcut into a premium cut and lifting the overall return kiwi farmers can get from their animals.

Lamb flaps, the gristly ends of the ribs trimmed away when the butcher cuts racks and rib chops, used to be considered a cheap cut, retailing for about US$1.35 per kilogram as little as eight years ago. It has soared 84 percent to US$5.84/kg, overtaking shoulder at US$5.64/kg and narrowing the gap with lamb leg at US$8.12/kg, based on Agrifax data.

In China, the meat is processed into a lamb roll and sliced thinly for hotpot, the dominant cooking style for lamb and a staple of the national diet. Chinese sheepmeat imports nearly doubled to 165,300 tonnes in the 2013 export year as a growing population, higher incomes and a decline in the world’s largest sheep flock spurred demand for imported protein. . .

New Zealand companies approved for infant formula exporting to China:

Five New Zealand manufacturers have been approved for exporting infant formula to China, Primary Industries Minister Nathan Guy and Food Safety Minister Nikki Kaye have announced today.

“These manufacturers represent around 90% of our infant formula exports to China by volume,” says Mr Guy.

“New Zealand officials have been working intensively with manufacturers and Chinese officials to address corrective actions, allowing these five manufacturers to be registered as of May 1.

“We appreciate the cooperative relationship with Chinese authorities in registering these New Zealand manufacturers. The new rules signal China’s desire for greater accountability for imported infant formula from all countries.

“MPI is working with all manufacturers to ensure the new Overseas Market Access Requirement (OMAR) – issued last night – is complied with. This sets out the requirements needed to produce infant formula for export to China from 1 May,” says Mr Guy. . . .

Nutricia takeover targets Sutton Group, Gardians among first to get China registration – Suze Metherell:

(BusinessDesk) – Sutton Group and Gardians, the dairy manufacturers acquired by Danone’s Nutricia arm, are among infant formula companies to gain registration to export to China under that nation’s new food safety regulations.

Nutricia itself gained registration, as did Fonterra Cooperative Group, GMP Pharmaceuticals and Dairy Goat Cooperative (NZ). They represent about 90 percent of New Zealand’s infant formula exports to China by volume.

Other companies can be registered after the May 1 deadline although owners of infant formula brands who can’t demonstrate a close relationship with a manufacturer may struggle to meet Chinese requirements, Food Safety Minister Nikki Kaye said today. . .

Nutricia to Add Milk Drying and Packing Capacity to Existing Platform in New Zealand:

Nutricia today announces an agreement for the simultaneous acquisition of the spray dryer of Gardians, located near Balclutha, and the blending, packing and can-forming activities of the Sutton Group in Auckland.

This transaction will provide Nutricia with a large milk drying capacity, along with a long-term fresh milk supply access. It will also add an infant formula blending and packing facility to Nutricia’s existing operations platform. . . .

Dairy Herd Consultation Underway:

The Ministry for Primary Industries (MPI) has today announced consultation on the future direction of the dairy herd improvement industry.

“The government’s main objective is to ensure New Zealand’s dairy industry can benefit from genetic gain in the national dairy herd. This objective supports the National Breeding Objective to identify animals whose progeny will be the most efficient converters of feed into farmer profit, says Marianne Lukkien, Acting Director Sector Policy.

“To achieve this we need to ensure the Dairy Core Database is fit for purpose, services are accessible at competitive prices and above all farmer’s interests are protected.

“The dairy industry is preparing for the transfer of the Dairy Core Database from Livestock Improvement Corporation (LIC) to DairyNZ. . .

A new generation of tools for the primary sector:

The primary sector is facing a major evolution in how they operate their businesses. Whether its satellite imagery of plantation forests, GPS tracking and real-time scheduling of transport and logistics, soil management through wireless sensor monitoring and automated tractor or irrigation systems, our primary sector businesses have a lot to benefit from improved mobile technologies.

Some of the best minds in New Zealand and Australia came together last year in Wellington for this region’s inaugural MobileTECH Summit 2013, an event designed to discuss and showcase new mobile technologies best suited to increase productivity for the primary sector. Building on this momentum, MobileTECH 2014 will be running this year in Brisbane, Australia and again, in Auckland, New Zealand in August. . .

Chinese buy five vineyards

Hong Kong-owned QWIL and Accolade Wines have been given the go ahead by the Overseas Investment Office to buy five vineyards from Mud House Wines.

The deal for $46.4 million involves the acquisition by QWIL of a freehold interest in five vineyards – Woolshed Vineyard in Marlborough, Home, Mound and Deans Vineyards in Canterbury, and Claim Vineyard in Otago.

The land comprises about 596ha. . . .

 


Rural round-up

April 25, 2014

Food Safety Assurance Advisory Council established:

Food Safety Minister Nikki Kaye said today a Food Safety and Assurance Advisory Council is being set up to provide independent advice to the government on issues relating to food safety.

Establishing this council is one of the 29 recommendations of the Government Inquiry into the Whey Protein Concentrate Contamination Incident, released in December last year.

“At the moment there is no independent group that looks at the whole of New Zealand’s food safety and assurance system and is able to provide high-level independent advice and risk analysis,” Ms Kaye says.

“This council is being set up to do this and will report to the Director-General of the Ministry for Primary Industries (MPI). It will provide a valuable sounding board for new ideas and contribute to raising consumer and market confidence in New Zealand’s food. . .

Memorandum to restore Waiapu catchment signed:

Primary Industries Minister Nathan Guy and Associate Minister Jo Goodhew today announced a collaborative partnership to restore the Waiapu catchment in the Gisborne District.

“The signing of a Memorandum of Understanding between MPI, Te Runanganui O Ngāti Porou and Gisborne District Council demonstrates a long term commitment to work together and with landowners to address the erosion control problems in the catchment.

“The Waiapu River has the highest suspended sediment yield of any river in New Zealand and one of the highest in the world. If nothing is done, erosion and sedimentation could double by 2050.

“This is a great example of this Government working together with iwi and local councils to invest in and develop our regions. This long-term partnership will create significant environmental, cultural, social and economic benefits for iwi and the local community,” says Mr Guy. . .

Otago landowners help control TB through levy:

Consultation with Otago landowners over the levy for the region’s bovine tuberculosis (TB) control programme has gathered positive responses.

TBfree Otago Committee Chairman Ross Beckingsale said through the levy and a grant from the Otago Regional Council, landowners will fund around 10 per cent of the $7.5 million TB control programme to be implemented in the region.

The remainder comes from the farming sector and central government.

The 2014/2015 programme will consist of about one million hectares of pest control, mainly ground-based possum trapping, and a single aerial operation in difficult terrain. There will also be work assessing the possum populations and surveillance of pests to detect if TB is present in wild animal populations. . .

Earnscleugh Orchard Supreme Winner of Otago Ballance Farm Environment Awards:

An industry leading Central Otago orchard with a long term sustainability focus has won the Supreme title in the 2014 Otago Ballance Farm Environment Awards.

Wayne McIntosh, manager of Earnscleugh-based McIntosh Orchard Ltd, received the Supreme award at a special Ballance Farm Environment Awards (BFEA) ceremony on April 11. He also collected the Hill Laboratories Harvest Award, the Ballance Agri-Nutrients Soil Management Award, the Massey University Innovation Award and the WaterForce Integrated Management Award.

BFEA judges said the 64ha pip and stonefruit operation is a business at the forefront of its industry, describing it as a top producing orchard with “a vision and strategy to promote the Otago region and to be recognised nationally and internationally”. . .

How to lose an argument on food and agriculture topics – Agriculture Proud:

A few weeks back, I shared several lessons learned while sticking my neck out and engaging in discussions centered around food and agriculture topics. Today, I share a few lessons learned by failure; sometimes my own.

  1. Assuming science will give us all the answers; it only gives us some of the answers. Pick a topic, any topic. Chances are you can find “scientists” on either side of the issue. Many people in the general public do not trust science or believe it can be bought-off. Often times, questions may be more about the ethics than the science.
  2. Using economics as the justification for all of our practices. If you own a business or depend on something for your livelihood, chances are who know what makes sound economic sense. “Of course we treat our cows well or they wouldn’t produce for us,” probably doesn’t convey the right message to a non-farm consumer. Making more money and welfare of animals/environment doesn’t always go hand in hand.
  3. Assuming that you have to speak up in defense of all agricultural practices. Chances are you don’t have experience in all areas, you’ll get backed into a corner and lose all credibility. Also, not all practices are defensible. (Read more) Wait, why are we waiting to play defense? . . .

Resistance better than resilience – Jamie-Lee Oldfield:

DRY conditions have meant lower than usual worm egg counts in sheep throughout summer, but recent rainfall and warm temperatures could see a rapid rate of infection.

However, those producers focusing on resistance, rather than resilience, may be better off this season.

Veterinary Health Research lab manager Rad Nielsen said while the worm season will potentially be less severe than normal because of the drought, he has seen high counts in recent weeks, and producers should be cautious not to “get caught out”. . .

  “Agriculture, science …. And stuff like that”… A New Blog – Pasture to Profit:

“Agriculture,science and stuff like that” is a new blog created by AgResearch scientist Jill Walcroft as part of an action research project investigating the ins and outs of science communication with social media.

Worth exploring and discussing, especially science to do with land. I feel that sometimes science is not very accessible. So I’ve given myself a challenge, “can I present the stories in such a way that people’s eyes don’t glaze over after the first sentence”. I am also keen to understand the reasons scientists may or may not see social media as a good avenue for communicating their scientific findings, and to hopefully find ways of enabling scientists to uptake up these technologies with some confidence.

Summer shade for cool cows - Agriculture, science . . . and stuff like that:

A study investigating the impacts of shade on the wellbeing of cattle came up with some ‘cool’ stuff, really cool for the cattle that is.

AgResearch scientist, Keith Betteridge, started his science career at the Kaikohe Regional Station of DSIR Grasslands. When he arrived in the far north, he couldn’t understand why the land had not been cleared of trees and scrub. Conversely, when he returned to the Manawatu 12 years later, he could not understand why so many farmers had cut down nearly every tree on their farm. That shift in his perception about what makes an attractive and healthy landscape has sunk in deep and made the study he carried out recently seem very logical.

At a recent beef farmer discussion group an argument was put forward, that if cattle are under shade then they aren’t eating and therefore might be slower to fatten and this might lead to a loss of income. Since there was little science data to support or dispel this argument, AgResearch was asked to undertake a short experiment to provide some hard facts. . .


Fonterra fined $300,000

April 5, 2014

Fonterra has been fined $300,000 for it failings in last year’s food safety scare.

Fonterra Cooperative Group, the country’s biggest company, was fined $300,000 for breaches of the Animal Products Act during last year’s whey protein concentrate incident.

Judge Peter Hobbs fined Fonterra $60,000 for three separate charges and $120,000 for a fourth charge in the Wellington District Court. The judge took a starting point of $375,000, before mitigating factors including Fonterra’s early guilty plea and steps it took to address the issue, though he lifted the penalty to reflect the company’s size.

“There’s no doubt the flawed reworking process and its fall-out had wide ramifications,” Judge Hobbs said. “I accept, however, the offending resulted from careless failure to follow proper procedure rather than a deliberate or reckless plan – things could have and should have been done better.” . . .

Every company which deals in food faces the risk of a safety problem. All should have better systems in palce to deal with it than Fonterra had.

It let its customers and suppliers down and it is the latter who will ultimately pay:

After accepting four Ministry for Primary Industries (MPI) charges relating to the 2013 whey protein concentrate recall, Federated Farmers believes the $300,000 fine is proportionate.

“To a shareholder, $300,000 is much better than what the cooperative potentially faced,” says Willy Leferink, Federated Farmers Dairy Chairperson.

“Given the size of negative coverage relating to the non-botulism scare and the dent it put into the coop’s reputation, the size of the fine is proportionate.

“Especially given Fonterra did not contest the charges brought by MPI. Even the Crown Prosecutor acknowledges Fonterra has swiftly moved to put its house in order.

“As supplier shareholders and unit holders will ultimately meet the cost of the fine, we are certain Fonterra’s management has got the message loud and clear,” Mr Leferink concluded.

The company has implemented changes which show it has got the message.

This is vitally important because it’s not just Fonterra but the country’s reputation for food safety which would be damaged by another debacle.


Rural round-up

March 26, 2014

Environment and the economy are one in the same thing – Lynda Murchison:

“It’s a classic case of environment versus economics”, commented Parliamentary Commissioner Jan Wright in her report into water quality.

Economics certainly plays a part in addressing water quality issues but as a geographer, environmental planner and farmer I cannot look at fresh water as a choice between economics and the environment. The notion that environmental protection and economic development are potentially conflicting goals is not, in my view, a recipe for success. It removes any expectation that businesses should take responsibility for protecting the environment; or that environmentalists need to consider social or economic costs of environmental outcomes.

In my world, economic and environmental considerations are two sides of the same coin. It is hard to be green if you are in the red; but you cannot have long-term social or economic prosperity if you undermine the natural capital you rely on to create it. This link between economics and the environment is recognised in the purpose of the Resource Management Act 1991, the main statute that manages natural and physical resources in New Zealand. The purpose of the Act is not about economic development, nor environmental protection. It is to promote the sustainable management of natural and physical resources – a concept that encompasses environmental, economic, cultural and social well-being. . .

PGP Forestry programme takes big step forward:

Primary Industries Ministers Nathan Guy and Jo Goodhew are welcoming commercialisation of new forestry technology this week as a big step forward in improving both productivity and safety.

“The Steepland Harvesting Programme is a very exciting Primary Growth Partnership (PGP) project, with $6 million in joint funding from the industry and the Government and a vision of ‘No worker on the slope, no hand on the chainsaw’,” says Mr Guy.

The new technology involves harvesting on steep slopes using new mechanised technology, rather than exposing forestry workers to risk.

The project was demonstrated to around 55 forestry contractors and company representatives at a Future Forest Research field day in Maungataniwha forest near Napier this week.

“These are the first products from the Steepland Harvesting Programme to be put into commercial use, which is an outstanding accomplishment,” says Mr Guy. . .

Federated Farmers looks beyond China exports:

The Prime Minister has focused on pushing trade with China this week, but sheep and beef farmers are trying to push their products to as many markets as possible.

The industry has faced a number of hurdles in recent years, including drought, a high Kiwi dollar and problems with Chinese border controls.

Federated Farmers meat and fibre chair Jeanette Maxwell says while much of the talk is about more trade with China, her industry believes it is important to get into multiple markets. . .

Fonterra food scare good for Irish milk industry:

Ireland’s Agriculture & Food Minister says Irish dairy companies gained new business off New Zealand during Fonterra’s food scare crisis last year.

Simon Coveney has been in New Zealand to learn how Ireland could also become a global dairy giant.

Mr Coveney told TVNZ’s Q+A programme, that at the time of the food crisis, customers were worried about relying on New Zealand suppliers:

“At the time of that difficulty I had a number of trade missions at the time. One was to the Middle East, and people were starting to say to me, look we source a lot from New Zealand, we like New Zealand we like Fonterra, we think they give us very good product, but we think we’re overly reliant on one supplier. And so a lot of countries are now looking at Ireland as a second supplier in case something goes wrong with their primary supply source.” . . .

Poor rail threatens food boom – Julie-Anne Sprague:

THE disgraceful state of rural railways means grain growers could become uncompetitive and miss out on big profits from the Asian food boom, warns GrainCorp chairman Don Taylor.

The chairman of eastern Australia’s biggest grains handler says urgent spending is needed on the railways.

“We don’t have any right to benefit from the food boom; we have to earn it,” Taylor tells The Australian Financial Review.

“The Canadians want to participate in [the Asian food boom]. The Ukranians are investing and doing things to participate in it. . .

How much would you pay for socks? – James Griffin:

How much would you pay for socks? Socks, actual socks that go on your feet, one per foot, not socks as a euphemism for a word that sounds a lot like “socks”.

Think about it a moment. Then settle on the absolute highest amount of dosh you would be willing to lay out for one pair of socks.

If that number is $1744.88 (or thereabouts, depending on what the exchange rate today is for £895) then, boy, have I got the socks for you. . . .

 


Fonterra accepts MPI charges

March 13, 2014

The Ministry of Primary Industries has filed charges against Fonterra over last year’s whey protein concentrate incident.

Charging documents have been filed for the following four charges:

  • Processing dairy product not in accordance with its Risk Management Programme
  • Exporting dairy product that failed to meet relevant animal product standards
  • Failing to notify its verifier of significant concerns that dairy product had not been processed in accordance with its Risk Management Programme
  • Failing to notify the Director General as soon as possible that exported dairy product was not fit for intended purpose.

MPI cannot make further comment as the matter is before the courts.

In a newsletter to shareholders, Fonterra chair John Wilson says the company accepts the charges:

  • We have announced that we have accepted all four charges, which are consistent with the findings of our Operational Review, and the Independent Board Inquiry.  A copy of our media release will be on fonterra.com.
  • The business is implementing the recommendations of the Operational Review and Independent Board Inquiry.

I’m pleased the company accepts the charges and that it is already implementing the recommendations resulting from the review and inquiry.

Fonterra let consumers, shareholders, the country and itself down over its handling of this incident.

Accepting the charges shows it accepts that.

Even more important is that it has already implemented very necessary changes to its processes and procedures.


Fonterra has learned

January 14, 2014

Fonterra has issued a voluntary recall of Anchor and Pams fresh cream bottles, after tests revealed the possibility of contamination by  E. Coli.

Fonterra Brands NZ is today conducting a voluntary recall of 300ml and 500ml bottles of Anchor and Pams fresh cream with a best before date of 21 January 2014, distributed in the North Island from Northland to Turangi, including Gisborne.

The recall involves 8,700 bottles of fresh cream that have been distributed to retail and foodservice outlets.

Fonterra Brands NZ Managing Director Peter McClure said the voluntary recall is being done because quality tests have shown there may be the presence of E.Coli in some Anchor and Pams bottles of cream with the 21 January 2014 best before date.

“We are sorry for the inconvenience and concern this recall might cause but food safety and quality are our top priorities,” said Mr McClure.  

Consumers are advised not to consume this product and to return it to the place of purchase for a refund. If they require further information, they should contact Fonterra Brands’ customer service centre on 0800 256 257.

This recall does not affect any other Anchor or Pams products.

The affected batch numbers are:

Product Batch Number Best Before Date
Pams Cream 500ml 1400684206 21/01/2014
Anchor Cream 500ml 1400684207 21/01/2014
Anchor Cream 300ml 1400684208 21/01/2014
Pams Cream 300ml 1400684209 21/01/2014

The way this has been handled shows Fonterra has learned from the many mistakes it made in precautionary recall of products in the botulism scare.

This time the company has the news on its website giving all the details consumers need.

No business wants to do a recall but doing it properly, as Fonterra is this time, rather than damaging a reputation can improve consumers’ trust in a company and its products.


Danone takes Fotnerra to court

January 9, 2014

French food company Danone is taking Fonterra to court and terminating its contracts:

. . . Danone is terminating its existing supply contract with Fonterra and making any further collaboration contingent on a commitment by its supplier to full transparency and compliance with the cutting-edge food safety procedures applied to all products supplied to Danone.

Danone is also initiating proceedings in the New Zealand High Court, as well as arbitration proceedings in Singapore to bring all facts to light and to obtain compensation for the harm it has suffered. . .

Danone is the parent of Nutricia which had to recall its infant formula during Fonterra’s botulism scare.


Food safety good but can be better

December 12, 2013

Primary Industries Minister Nathan Guy and Food Safety Minister Nikki Kaye say the government has accepted in principle all the 29 recommendations in the report on the first stage of the Government Inquiry into the Whey Protein Concentrate Contamination Incident.

“This part of the inquiry focused on our dairy food safety system and we are pleased to confirm it found the whey protein concentrate (WPC) incident in August this year (2013) was not the result of any failure in the regulatory system,” Mr Guy says.

“The inquiry report finds New Zealand’s food safety regulatory model is consistent with international principles and is among the best in the world,” Ms Kaye says.

“This is a finding of fundamental importance to reassure our off-shore markets,” Mr Guy says.

“The report was peer reviewed by an international expert in the structure and management of food safety systems, Professor Alan Reilly who heads the Food Safety Authority of Ireland. He confirmed he was satisfied with the quality and integrity of the inquiry’s report,” Ms Kaye says.

“The report makes a number of recommendations, most of which are about further strengthening the New Zealand food safety system for the challenges that lie ahead.”

“Exports to China have trebled since 2007. On top of that, food safety requirements and systems are continuing to evolve,” Mr Guy says.

“New Zealand’s export performance depends heavily on the success of the dairy sector and we are committed to ensuring its underpinning food safety system remains world-leading.”

The Government will allocate between $8-12 million per year for the following key recommendations:

  • Strengthening capability in emerging export markets, particularly China. Additional personnel are needed to support growing China trade. The Government has committed to an additional four people in China and six people in other international markets. The specific location of personnel will be agreed between the Minister for Primary Industries, Minister for Food Safety, Minister of Foreign Affairs and Minister of Trade. The Government has committed an additional $4.430 million in 2014/15 rising to $8.295 million in 2017/18 and out-years to increase the Ministry for Primary Industries (MPI) presence overseas.
  • Establishing a centre of food safety science and research. This will bring together New Zealand government agencies and research organisations allowing for collaboration, including with overseas science centres. (At least an additional $5 million per year made up of contributions from Government and industry.)
  • Increasing dairy processing and regulatory capability. A working group will be set up to develop a strategic plan and this will see a further $1 million per year invested in dairy capability.
  • Establishing a food safety and assurance advisory council to provide high level independent advice and risk analysis. ($250,000 per year.)
  • Fast-tracking work to consolidate and simplify legislation and regulations. ($250,000 for 2014/15.)

“The inquiry report also recommends we fast-track the revision of New Zealand regulatory requirements for the manufacture of infant formula and work is already underway on this,” Ms Kaye says.

“This is a special work programme due to the vulnerability of babies and young children.

“Legislative change is required to meet some of the recommendations and we will be delivering some of that through the Food Bill, which we hope to pass as soon as possible next year. We are looking at aligning other food legislation with an omnibus bill in 2014,” Ms Kaye says.

“The inquiry findings and recommendations should renew confidence in New Zealand’s dairy food safety system,” Mr Guy says.

“We would like to thank the inquiry team, led by Miriam Dean CNZM QC, for completing this report within three months.”

This report released today is on Parts B and C of the Government’s inquiry and is separate to the compliance investigation being undertaken by the Ministry for Primary Industries (MPI). Part A of the Government’s inquiry will look at the question of what happened and the regulator’s response.

In August, MPI indicated the compliance investigation would take three to six months to complete. Part A of the Government’s inquiry cannot be completed until that compliance investigation is completed.

Federated Farmers says the report says our food safety system ‘isn’t broke but needs a tune-up‘.

“Whilst the report puts some minds at ease, confirming the regulatory system is not to blame, it also highlights the need for a stronger food safety system and a stronger understanding of the markets we deal with,” says Willy Leferink, Federated Farmers Dairy Chairperson.

“If our dairy industry is to continue to go from strength to strength, we need to invest more into the framework of how we operate here and overseas. As we diversify into foreign markets, we need people that understand them.

“Before we get there we need to get things right at home. I am thrilled at the recommendations to simplify the regulatory processes and invest in more science and research. Food safety is paramount for the dairy industry and it has long been overdue that we put our money where our mouth is.

“This substantial investment of $8-12 million will go a long way to rebuilding our reputation overseas,” concluded Mr Leferink.

Our reputation for safe food is our biggest marketing advantage and people’s health depends on the reality matching the reputation.

We need the best system of regulating and enforcing food safety possible and these recommendations ought to ensure we have it.

A copy of the report can be found here.

A table of the recommendations and the government’s response is here.

 


Jury still out

November 14, 2013

Fonterra’s internal report on the  botulism scare was full and frank.

The company has said it will implement all 33 recommendations.

It must because as Federated Farmers chief executive Conor English told the international food safety conference,  food safety is New Zealand’s number one issue – and the botulism scare was damaging and a massive risk for the economy.

Mr English compared it to Christchurch’s February 2011 earthquake.

“The stuff that happened with Fonterra and the dairy industry is very like the earthquake … and if they can’t get, frankly, their s*** together so that they are better for it – then I think New Zealand’s in a lot of trouble.

“So I hope, that they do – but the jury’s out for me, to be honest.”

These are strong words.

The earthquake killed lots of people and in the end no lives were at risk from the contaminated why protein.

But a real health threat in any of our dairy products would have as devastating an impact as the earthquakes have.

Fonterra is our biggest exporter and the fallout from the botulism scare shows the damage goes much wider than the company when something goes wrong.

That it appears not to have done any lasting damage has been in spite of the company’s inept handling of the issue when it broke and in the immediate aftermath.

The director of Victoria University’s contemporary China research centre, Xiaoming Huang, said Fonterra’s problem was not as big a deal in China as it might appear from New Zealand.

Professor Huang said New Zealand food still has a very good reputation and believes the public over-reacted.

The Global Food Safety forum’s founder, Rick Gilmore, said time will tell if New Zealand’s response so far is the right one.

“Agricultural and ag exports are so important to the New Zealand economy, that you can’t afford to do otherwise. I think everybody recognises that. So my impression is that New Zealand has held on to its claim to be a food safety model.”

That’s reassuring but no excuse for complacency.


NZ-China food safety agreement signed

November 3, 2013

Food Safety Minister Nikki Kaye welcomed a food safety agreement signed today between New Zealand and China to strengthen cooperation in food safety and food quality.

The Food Safety Cooperation Arrangement between the Ministry for Primary Industries(MPI) and the China Food and Drug Administration (CFDA) was signed today in Wellington by the Chinese Vice Minister, Liu Peizhi and MPI Deputy Director General Carol Barnao.

“This is an important agreement that will be beneficial to both countries,” Ms Kaye says. “It will encourage cooperation and the sharing of knowledge in the fields of food safety, risk management, food standards and regulations.

“The agreement shows commitment and a willingness between New Zealand and China to work together on food safety programmes.

“It will allow MPI and the CFDA to work together to enhance food safety, continually improve our regulatory regimes and enhance the bilateral relationship.”

The agreement will see a Joint Food Safety Commission (JFSC) established to enhance food safety regulatory cooperation.

“The JFSC will allow MPI and the CFDA to meet on an annual basis to help build a better understanding of how our respective food safety systems work. We can identify areas of shared interest and potential new areas of cooperation,” Ms Kaye says.  

“The agreement also allows us to formalise our joint interests and is an important step in the evolution of China and New Zealand cooperation in food safety. 

“It will further build on the strong relationship that our two countries share, particularly in the agricultural and food sectors.”

This should be good for exporters and consumers.

Food safety is very important in #gigatownoamaru.


Rural round-up

October 30, 2013

Beef + Lamb New Zealand Puts Case to Washington:

Beef + Lamb New Zealand (B+LNZ) and representatives from other Five Nations Beef Alliance partners have called on Washington’s Capitol Hill to promote a unified view of how trade in agricultural products – and especially beef – should be treated under the Trans-Pacific Partnership (TPP) agreement.

The TPP, which is currently being negotiated and of which New Zealand is a participant, aims to open up trade in goods and services. Progress towards an outcome was most recently reviewed in Bali, where Prime Minister John Key chaired the meeting of the 12 TPP negotiating countries.

The Five Nations Beef Alliance is made up of the national organisations that represent beef cattle producers in Australia, Canada, Mexico, New Zealand and the United States. Collectively, the five countries account for one third of global beef production and approximately half of global beef exports. . .

New Zealand food and beverage producers need to be bulletproof:

New Zealand food and beverage producers need to ensure their operations are “bulletproof” if they want to compete in an increasingly aggressive global marketplace, an industry expert says.

Grant Thornton New Zealand Partner and National Leader, Food and Beverage, Simon Hunter, is describing the firm’s latest International Food and Beverage sector report, ‘Hunger for growth: Food and Beverage looks to the future’, as a wake-up call for the local industry.

The report, based on interviews with 248 senior executives in seven countries (including New Zealand), says 90% expect revenues to increase in the next 12 months but only half expect to employ more people. . .

Gigatown competition will change the future for one town:

Federated Farmers is excited by Chorus’s year-long competition to bring the fastest broadband speed to one New Zealand town.

“This competition is a great opportunity for rural towns,” says Conor English, Federated Farmers Chief Executive.

“If a rural town wins it will become the first town in the southern hemisphere to receive one-gigabit per second broadband speeds – up to 100 times faster than most cities around the globe.

“New Zealand’s farmers are desperate for new ways to get onto the internet and this competition has the potential, for one fortunate town, to spark innovation and mobilise and transform their local economy and society. . . .

(This is why we’re supporting #gigatownoam and the #gigatown campaign).

Fonterra board to set up separate risk committee after food scare review – Paul McBeth:

(BusinessDesk) – The board of Fonterra Cooperative Group will establish a separate committee to oversee risks facing the dairy group in the wake of the false alarm food scare that prompted a precautionary recall in August.

The company’s board will carve out the risk elements from its audit, finance and risk committee into its own separate committee, which chairman John Wilson said will cover “food safety, food quality and other risks Fonterra in today’s environment faces.”

The measure was one of a raft of recommendations from the board-ordered inquiry, led by Jack Hodder QC, after recall of three batches of whey protein concentrate, which were thought to have been contaminated.

Fonterra’s handling of the fall-out was “inadequate” for the kind and size of the crisis and the company’s lack of responsiveness to external stakeholders was seen as a “fortress” mentality, the report said. . . .

Shareholders’ Council welcomes report, inquiry recommendations:

The Fonterra Shareholders’ Council, which safeguards the interests of the dairy Co-operative’s 10,500 Shareholders, said it welcomed the completion of the Fonterra Board commissioned independent report of the WPC80 issue.

Council Chairman, Ian Brown: “The Council has received the report and we commend the Oversight Committee and the Independent Inquiry Team on the comprehensive nature of the report.

“We also commend the Board on their openness and support their decision to make the report public. . .

New health & safety regulations will increase potential penalties for employers:

The potential for higher penalties for non-compliance as a result of upcoming changes to Health and Safety regulations means employers in the high-risk agricultural sector need to be more aware than ever of their obligations, says Melissa Vining, AGRI Consultant for human resources specialists Progressive Consulting – the HR division of Crowe Horwath.

The government will establish new Crown Agent WorkSafe New Zealand by December 2013, when it also plans to introduce to parliament a new Health and Safety at Work Act, which is expected to come into force by December 2014. . . .

Xero releases farming blueprint:

Xero has released its Farming Integration Guide, a blueprint that helps rural solution providers connect to Xero and deliver integrated farm management and accounting solutions. 

Xero CEO Rod Drury says this is a great example of technology bringing an industry together. “This guide is the key step towards full integration between farmers, rural accountants, rural suppliers, banks and software providers. The innovation we’re experiencing in the tech sector is being applied directly now to the rural economy, the backbone of the NZ economy.” . . .


33 recommendaitons in independent review of contaminated whey protein

October 29, 2013

The independent inquiry into Fonterra’s contaminated whey protein concentrate has made 33 recommendations.

In a detailed report, the inquiry found that a number of factors, including a lack of senior oversight of crucial decisions, problems with tracing potentially affected product and belated escalation of the issue, contributed to the event in August this year. 

Speaking at the tabling of the inquiry report in Auckland today, Jack Hodder QC, who led the inquiry team, said: “Fonterra is a high quality organisation with talented and dedicated people. The WPC80 Precautionary Recall let them down. 

“There were shortcomings in a number of areas, which, compounded by a number of events and co-incidences, converged to create this significant issue. 

“Our findings and recommendations do not indicate any fundamental problems within Fonterra. That is not our conclusion. 

“They do point to a range of improvements Fonterra can make to become an even better company.“

The Chairman of the special oversight committee for the inquiry, also an independent Fonterra director, Sir Ralph Norris, said his committee “endorsed the key recommendations and themes identified by the inquiry team… It has undertaken a thorough, consultative, independent and incisive analysis.”

The inquiry team was led by a legal team from Chapman Tripp, co-ordinated by senior partner Jack Hodder, QC, and independent experts Gabrielle Trainor, a Sydney-based specialist in crisis management and communication, and international dairy consultant, Jacob Heida of the Netherlands.

 “The inquiry team recognises that Fonterra is well advanced on a journey from being a cost-focused dairy ingredients producer to being a customer-focused global foods products supplier that is second to none in its aspirations, standards and people.

“Some areas of weakness have been highlighted, and this has created the opportunity for Fonterra to further strengthen it processes, culture and governance. 

“Acting on the recommendations made will lead to Fonterra becoming even more responsive to the global expectations of excellence in food safety and quality, and engaging more comprehensively with stakeholders.

“The findings and recommendations are important foundations for Fonterra’s continued success.”

 The Chairman of Fonterra, John Wilson, told the media briefing that the board of Fonterra was fully committed to implementing the recommendations made.

“What directors found encouraging is that this Independent report to the Directors has a significant degree of overlap with management’s Operational Review, which was made public last month.

“There are no contradictions between the two sets of recommendations.

“Much of the recommended change is already underway, or has already been identified as needing to be changed.

“We are committed to adopting a ‘best of class’ philosophy around food safety and incorporating the latest, world class methods into every facet of our operations.”

He said the board had also committed to the reconvening of the Independent Inquiry Committee in 9 months, and again in 18 months, to assist the board in reviewing the progress that has been made against the recommendations.

In an email to shareholders, Fonterra chair John Wilson said:

  • There are 33 recommendations, 24 relating to operational issues and many of them overlap with management’s operational review findings.
  • We asked the inquiry team to challenge every aspect of the business to find out what happened and why, to reduce the chance of this ever happening again and to make our Co-operative stronger.
  • It finds Fonterra does most things extremely well and the report says we are “already operating at a high quality level in almost all respects”.
  • The crisis was complex involving many customers, many countries, languages and cultures.  It was on a scale most companies never face.
  • Problems escalated because senior management and the Board were left out of the loop too long and we lost time needed to get an effective plan in place.
  • A change in computer systems compounded difficulty in obtaining accurate information.
  • The report is thorough and the Board accepts its findings and recommendations.

Here is the summary of the findings and recommendations from the report:-

Primary findings of what happened

  1. Fonterra did not include any sulphite reducing clostridia (SRC) tests for any of its production of WPC, even though it had accepted SRC tests under at least one contract with a major customer.
  2. Some errors of judgement were made in preparation for the reworking process applied to the relevant WPC80 batches.
  3. The standard pre-start up automatic cleaning regimes used by Fonterra plants required improvement.
  4. There was insufficient senior oversight of the crucial decision to engage AgResearch to test for C. botulinum.
  5. The commissioning, design and limits of the C. botulinum testing were inadequate.
  6. Fonterra was unable to promptly and definitively track the destinations of the affected WPC80.
  7. There was only belated recognition (and delayed escalation to senior management and the Board) of the explosive reputational risk involved – a failure to “join the dots” between a) C. botulinum b) infant food products c) consumer sensitivities and d) Fonterra’s global reputation.
  8. Fonterra’s crisis management planning, including the external communications aspects, was inadequate for a crisis of this kind and scale.
  9. Fonterra management of the crisis in the critical early period, including the external communications aspects, was not well executed.
  10. There was some lack of alignment and confidence between Fonterra and the New Zealand Government in the critical fortnight after the contamination concerns were advised to the Government and made public.

Principal operational recommendations

  1. Fonterra’s food quality and safety specifications and testing be reviewed to ensure they are “best in class” standard: consistent with the most rigorous requirements of customers, and with international best practice.
  2. Risk management and crisis management processes be strengthened, including by establishment of a specially trained and multi-disciplinary (but not full-time) Incident Management Team and regular relevant training, global best practice product tracing systems, and a new Risk Committee of the Board.
  3. Reputational risk assessment form part of the criteria for escalation and assessment of non-standard external scientific tests.
  4. Plant cleaning programmes be amended.
  5. There be continued building of a directly-employed strong, specialist and experienced communications team, including in key global markets, supplemented with contracted high calibre local expertise where appropriate.
  6. There be enhanced and sustained efforts to address a “Fortress Fonterra” perception held by a material proportion of key stakeholders, by Fonterra redefining the style and substance of its engagement with them.
  7. The Inquiry be reconvened after 9 months and again after 18 months to review Fonterra’s progress on those recommendations.
  • The report notes that the recommendations are “essentially in the nature of incremental improvements and consistent with Fonterra’s pre-existing commitments to both food quality and safety and to continuous improvement.”
  • On the operational side, we will have a specific focus in relation to the re-working process, risk management, testing for contaminants, cleaning processes at our plants, escalation of problems, operational planning, and communications.
  • The Board will split out a specific Risk Committee from the current Audit, Finance and Risk Committee to provide a separate emphasis on managing risk across Fonterra, providing an overview to ensure our management team continues to improve our processes, monitoring and risk escalation right through our Co-operative.
  • Our priorities are to ensure the operational review is completed, the independent inquiry team’s recommendations are acted on, and that future crisis management is “best in class”.
  • Most importantly, we must take all stakeholders with us and make those relationships stronger.
  • I have huge confidence we will build on our world class reputation for food safety and quality.

The executive summary starts by pointing out:

. . . any major inquiry will tend to accentuate a few negative considerations. This tendency requires a balancing reminder about the many positive considerations – here including the impressive quality of Fonterra’s people and plants, and its pre-existing commitments to food safety and quality and continuous improvement across the organisation.

This is a reminder that although lots of things went wrong and the subsequent reaction was handled badly, the company itself gets most things right.

The report’s brief was to determine what went wrong and what needs to be done to avoid it happening again.

It has done that and it is up to Fonterra to act on the recommendations to do everything it can to prevent any further food safety issues and to ensure it is prepared to respond if, or when, there is a problem in the future.

The full report is here.

The government is undertaking a ministerial inquiry and the Ministry of Primary Industries is doing a compliance investigation, both of which are expected to be completed by the end of the year.

 

 


Orange and red flags ignored

October 10, 2013

Months after the precautionary recall of products containing whey protein which was later proved to be clear of botulism there is still a lot of confusion about what happened.

Keith Woodford explains it was all about orange and red flags:

. . . It all started back in May 2012 when some plastic came loose in a whey concentrate dryer at the Hautapu plant near Hamilton. The risk was that this plastic had got smashed up and possibly melted within the dryer, and then mixed with the whey.

The only way to find out for sure was to hydrate the whey powder (which is soluble) and then filter out any solids.  For reasons not clear, Fonterra chose to do this using equipment that had not been used recently.  Unfortunately the equipment had not been properly cleaned.

Once hydrated and then re-dried, the product passed the mandatory bacterial tests, but did have a level somewhat higher than typical.

By this stage there should have been two orange flags but the Fonterra system recognised neither.  The first was that once the product had been reprocessed, then it should have been drafted away from human use and used for stock feed. The second orange flag was when the re-processed whey powder gave elevated but technically acceptable bacterial counts. Once again, this should have been enough to restrict its use to stock feed. . .

He explains what happened next and about the testing in the clearest summary I have come across. It is very interesting reading.

He then gets on to the ongoing fallout:

. . . As events have turned out, it is now apparent that it was a false alarm. Further testing overseas has confirmed that in fact it was not botulinum.  However, great damage to Fonterra’s and New Zealand’s reputation occurred, with the recall being splashed globally in the news media, and particularly so in China  where many of Fonterra’s products are sold. In fact I am writing this from China, and I can confirm that it has very much come to the attention of Chinese consumers.

It will be interesting to see how this now plays out. Here in China there is no doubt that Danone in particular has suffered great damage, with their leading infant formula brand Dumex being particularly badly hit. (Dumex is the equivalent of ‘Karicare’ in New Zealand, with Karicare being marketed by  Danone’s  Nutricia subsidiary.)  .

Earlier this week, in a Shanghai supermarket, there was a message over the in-store radio every five minutes advising that the Fonterra food safety scare was actually a false alarm. But unofficial sources tell me that sales of the Dumex brand are still hugely affected, with up to 90% loss of sales. Consumers have moved to other brands and now have to be painstakingly won back. A Google search using Chinese characters for ‘poisonous’ and ‘milk powder’ and ‘Dumex’ produces over one million references. . .

There is an irony that Fonterra’s milk powder is still flowing into China unimpeded, and prices for these bulk products have not suffered.  It is the consumer brands that are not owned by Fonterra that have suffered. . .

It isn’t just milk products which are affected:

Glen Herud at Milking on the Moove was speaking to a food safety consultant recently:

He has a client who manufactures and sells blackberry powder to the Asian market.

His product has been stopped from entering into some Asian countries. 

He was notified by his customer via an email in broken English explaining that they won’t purchase anymore product because botulism was in New Zealand products. . . 

Inquiries into exactly what went wrong at Fonterra and the subsequent handling of the issue are continuing and so are the consequences.

Whatever comes out of the inquiries, all food processors need to be sure they have systems which recognise and respond appropriately to orange flags long before any red ones are raised.


Taranaki landfarms fit for purpose

October 5, 2013

An investigation  commissioned by the Taranaki regional Council has found that landfarms are fit for purpose.

Doctor Doug Edmeades of AgKnowledge  who undertook the investigation found:

1. Waste products (rock cuttings and drilling muds) from the oil exploration industry in Taranaki are being incorporated into  re-contoured formed sand dunes and re-sown back to pasture (a process referred to as Landfarming). This process is controlled by resource consents issued by the Taranaki Regional Council. Three Landfarms have been completed to date and are now being farmed commercially (2 under irrigation).
 
2. The drilling muds contain potential contaminants: petrochemical residues, barium, heavy metals and salts. The question arises: are these reformed soils ‘fit-for-purpose’ – in this case pastoral farming and especially dairy farming.
 
3. As required by the consents regular soil samples were collected and analysed during the disposal process. These results were summarised and examined relative to the permitted limits for the various potential contaminants.
 
4. The completed sites were visited and the pasture and soils inspected. Soil and pasture samples were collected and analysed for all potential contaminants. These results were compared to the properties of normal New Zealand pastorals soils.
 
5. It is concluded from this body of evidence that these modified soils are ‘fit–for-purpose”. The concentrations of: nutrients (macro and micro), heavy metals and soluble salts in these soils and pasture are similar to normal New Zealand soils. The form of barium present is as environmentally benign barite, and there is no evidence of accumulation of petrochemical residues.
 
6. The process of Landfarming these otherwise very poor soils, together with appropriate management (irrigation, fertiliser and improved pastures) has increased the agronomic value of the land from about $3-5000/ha to $30-40,000/ha.
 
Federated Farmers had earlier called Green Party concerns about these properties as scaremongering and is buoyed that an independent scientific investigation has confirmed these farms are not only safe, but may be better for the environment.
 

“Federated Farmers congratulates Taranaki Regional Council for commissioning Dr Doug Edmeades of AgKnowledge to test landfarming,” says Harvey Leach, Federated Farmers Taranaki provincial president.

“If you happen to be a farmer with less than even pasture or soil quality, then the cliché, ‘One man’s trash is another’s treasure,’ very much applies. Landfarms recycle the mud, rocks and clay that comes from mining so is smart recycling.

“The blending of this material into the sand makes it worthwhile to add fertiliser and to put in place irrigation infrastructure. Simply put there is soil.

“These landfarms are also monitored and tested by Taranaki Regional Council and Dr Edmeades study vindicates both the concept and the council’s monitoring approach.

“That’s why the negative claims made about landfarms in Taranaki were so thin they could model in Paris.

“Dr Edmeades is a scientist who has completed an ANZAC Fellowship and was National Science Program Leader (Soils and Fertiliser) for AgResearch. In 1997, he established his own science consulting business, which became AgKnowledge.

“Dr Edmeades is an expert in his field. His report concluded that landfarming made sandy and highly erosion prone coastal farmland, ten times better for dairy farming. That is both an economic and environmental win since these farms previously had poor soils.

“Because of the value and productive uplift from landfarming, it has allowed better management practices to be adopted.

“His report found that the concentrations of heavy metals in the landfarms were at the low end of the range, when compared to soils from various regions in farmed and non-farmed areas. That is a positive.

“While hydrocarbons were found on the most recently completed landfarm, Dr Edmeades said these levels would decline as soil microbes broke them down.

“Being a farmer, I know that earthworms are a strong indicator of soil health and Dr Edmeades found them in large numbers. That’s a key thing for me because he described earthworms as a soil scientist’s ‘canary in the mine’.

“At least we now have a robust independent scientific report saying that landfarming is not only safe but can be environmentally positive. That’s why we need to base discussion on hard facts and evidence and not for short-term political gain,” Mr Leach concluded.

Fonterra had stopped taking milk from new properties on land farms because of the cost of tests.

The perception of a safe clean dairy industry was also a factor.

Perception beats reality – it will probably beat the science because those dark green anti-dairy campaigners only back the science which suits their case.


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