Rural round-up

November 20, 2014

Further GDT drop leaves farmers uncertain:

Another drop in the GlobalDairyTrade of 3.1 percent will be a huge disappointment to New Zealand’s dairy farmers.

“It goes without saying that the lowest auction price in five years is going to be a blow to the industry,” says Andrew Hoggard, Federated Farmers Dairy Chair.

“Dairy farmers were hoping to see a lift or at least a plateau to realise Fonterra’s $5.30 forecast in December. So this further drop increases the uncertainty of how realistic that goal is. . .

 

New devices target specific pests:

New advanced pest control using devices to target specific species is being hailed as the latest tools in controlling them on farms and diseases such as tuberculosis.

Researchers are meeting at Massey University at the New Zealand Ecological Society Conference.

James Ross, a senior lecturer in wildlife management at Lincoln, said advanced multi-delivery traps called spitfire were capable of killing up to 100 animals before needing to be restocked with poison.

He said they were a major breakthrough in the control and eradication of pests including stoats and possums. . .

Federated Farmers and Forest & Bird welcome Predator Free NZ project:

Federated Farmers and the conservation organisation Forest & Bird are welcoming the Predator Free New Zealand initiative as an ambitious but achievable project that will have real benefits for conservation and the economy.

The Predator Free New Zealand Trust was launched today at the “A Place to Live,” conference in Whanganui.

Federated Farmers and Forest & Bird are actively supporting the Predator Free mission – of clearing New Zealand of all rats, stoats, ferrets, possums, and feral cats. Both organisations have many members who are already actively controlling introduced predators. . .

Sanford lifts profit despite ‘challenging year’ - Suze Metherell:

(BusinessDesk) – Sanford, New Zealand’s largest listed fishing group, lifted annual profit 10 percent as gains in its deepwater fishing and aquaculture operations offset falling skipjack tuna prices.

Tax-paid profit before minority interests rose to $22.4 million in the year ended Sept. 30, from $20.4 million a year earlier, the Auckland-based fisher said in a statement. Sales fell 2.2 percent to $452.4 million, reflecting “highly variable operational performance across the business”, which saw the Australian arm continue to trade unprofitably.

Earnings before interest, tax, depreciation and amortisation fell by 5 percent to $46.7 million in the first year under new leadership since the departure of veteran former chief executive Eric Barratt. . .

 

Beef + Lamb New Zealand Director Elections:

Beef + Lamb New Zealand Ltd is calling for nominations to stand for two farmer-elected director positions on its board.

They are for the Northern North Island and Northern South Island electorates.

Nominations need to be made to the Beef + Lamb New Zealand returning officer, Warwick Lampp by 5pm on Friday 19 December. Farmers can call him on 0508 666 447 to get information on how to make a nomination. . .

 

Young Friesian follows in father’s fertile footsteps:

Herd improvement company CRV Ambreed has cause to celebrate this month as its top performing bull, Aljo TEF Maelstrom, continues to prove his strong genetic value.

Maelstrom has broken the 300 mark on both Breeding Worth (BW) and New Zealand Merit Index (NZMI) indexes; a first for any CRV Ambreed bull since the company was established 45 years ago.

CRV Ambreed’s managing director Angus Haslett explained the indexes. . .

 


Rural round-up

November 19, 2014

Peony growers’ business blooming – Sally Rae:

When Rodger and Cindy Whitson decided to get into the cut flower industry back in 2000, they started with a bare paddock and no horticultural knowledge.

They trialled gentians, viburnum and peonies before deciding peonies were best suited to their property, near Mosgiel.

Peony plant numbers have since swelled from 2000 to about 10,000, with plans for more plantings. . .

 Profitable harvest of Jersey Bennes - Sally Brooker:

North Otago’s most famous produce is being harvested for the new season.

Rows of Jersey Benne potatoes are coming out of paddocks in the Totara area just south of Oamaru, renowned for the tarry, fertile soils that produce exceptional early spuds.

A workforce boosted by tertiary and secondary students as they finish their exams is picking and packing the Jersey Bennes.

Organic horticulturist Marty Quennell said his harvest started early this year – the week before Labour Weekend. That meant he had the market to himself for the first three weeks, when a premium price was being paid. With others growers now getting going, the price would drop back, he said. . .

NZ tractor sales set to match records this year on buoyant farming – Tina Morrison:

 (BusinessDesk) – New Zealand tractor sales are expected to match record highs for the modern farming era this year, as farming incomes are boosted by high milk prices and good growing conditions.

Sales of tractors of at least 40 horsepower, the most common measure for farm tractors, have reached 2,536 in the first nine months of this year and are expected to climb by year’s end to match the 3,515 total for 2005, the highest level since the Tractor and Machinery Association began gathering the data in 1990. Some 60 percent of the nation’s farm tractor sales are estimated to relate to the dairy industry.

Farmers had more cash this year to buy farm equipment such as tractors after Fonterra Cooperative Group paid out a record $8.40 per kilogram of milk solids and the agriculture sector generally benefited from good growing conditions which meant farmers could boost production without having to divert funds into areas such as extra stock feed. . . .

 Ambitious predator-free plan launched:

A group of prominent individuals and private businesses has joined forces with the Department of Conservation in a plan to eradicate all pests from mainland New Zealand.

The Predator Free New Zealand Trust unveiled its vision of an Aotearoa free of rats, stoats and possums at the Place To Live conference in Whanganui today.

Trust chairman Devon McLean said that the secret weapon in the battle against pests would be the thousands of New Zealanders already dedicated to controlling predators.

China-Australia FTA milks NZ’s – Nigel Stirling:

Australia’s new trade agreement with China could give it an edge in milk powder exports unless New Zealand can invoke a clause in its own agreement to get similar tariff concessions.

The two countries yesterday announced the end of ten years of talks for a free trade agreement which Australia says is superior to NZ’s 2008 deal which allowed for the full elimination of tariffs on dairy products by 2019.

Australia’s deal allows for the elimination of tariffs on dairy products within eleven years, but crucially does not include the use of special safeguards by China to protect its farmers from surges of imported skim milk powder from Australia. . .

A2 Milk to list on ASX in 1Q 2015 - Suze Metherell:

(BusinessDesk) – A2 Milk Co, the milk marketing company, is planning to list on the Australian stock exchange next year, where it has 9 percent of the fresh milk market sold in grocery stores.

The Auckland-based company doesn’t plan to raise any new capital in a float on the ASX and will keep its New Zealand incorporation and NZX listing, it said in a statement. It has hired Goldman Sachs New Zealand and DLA Piper Australia to manage the listing, and hopes to join the Australian bourse in the first quarter of 2015.

In August, managing director Geoffrey Babidge called the Australian market A2′s “big cash generator”, and said it will bankroll its push into new markets. The company reported annual sales rose 17 percent to $111 million in the year ended June 30, of which 96 percent came from Australian sales. A2 reported a drop in annual profit to $10,000 from $4.1 million a year earlier, as the strength of the kiwi dollar against its Australian counterpart weighed on sales. . .

Ballance helps farmers better weather the weather:

Ballance Agri-Nutrients has joined forces with NIWA to bring advanced hi-resolution weather, climate and environmental forecasts to farmers via the co-operative’s Ag Hub online farm management system.

Announcing the partnership, Ballance General Manager AgInformation Graeme Martin said farm profitability and sustainability are increasingly affected by variable weather patterns, growing conditions and the availability of water.

“Farmers are looking for the best possible support to make operational decisions. NIWA’s advanced forecasting systems and its national climate station network are at the leading edge of weather and environmental information. . .


GDT drops 3.1%

November 19, 2014

GlobalDairyTrade’s price index dropped 3.1% in this morning’s auction.

The volume traded was also down.

gdt19.11

gdt191114


NZ-Korea FTA completed

November 16, 2014

New Zealand and Korea have completed a Free Trade Agreement which will save our exporters $65m in the first year.

Prime Minister John Key today announced that New Zealand and the Republic of Korea have completed Free Trade Agreement negotiations.

“Korea is New Zealand’s sixth largest export destination for goods and services and eighth largest import source of goods and services, with total two-way trade of $4 billion in the year ending June 2014,” says Mr Key.

“The FTA will put New Zealand exporters back on a level playing field with competitors from Korea’s other FTA partners, such as the United States, Chile and the European Union.

“At the moment our exporters to Korea pay $229 million a year in duties. Under the FTA, New Zealand exporters will save an estimated $65 million in duties in the first year alone. . .

This is very good news for producers, manufacturers and consumers in both countries.

One of the messages from Rabobank’s F20, which we attended last week, was that protection threatens food security and hurts the poor most.

Free trade is fair trade.

 

 

 

 


Farming business not bet

November 13, 2014

Dairy farming is ‘no bet’:

Federated Farmers says it’s not the government betting on the farm, but instead farmers making sound market decisions. This comes after Green Party co-leader, Dr Russel Norman, said the government has ‘bet on the farm’ with dairying being a ‘one trick pony,’ which is producing a lower tax take and jeopardising a budget surplus.

“Dr Norman is ill-advisedly attacking New Zealand’s most successful export industry,” says Andrew Hoggard, Federated Farmers Dairy chairperson.

“Primary exports are an increasingly large share of our merchandise export returns and dairy an increasingly large share of farm production.

“The signals from the market are that growing middle classes, especially in South Asia, are developing a sustained taste for dairy products, and New Zealand is a respected source of those dairy products.

“Our dairy farmers are rationally taking these market signals on board and not being diverted by the inevitable short term fluctuations, or in Dr Norman’s terms, ‘a bet’

“The reasons for the present market slippage are clear.

“We didn’t cause Ebola in West Africa and our dairy farmers didn’t invade Eastern Ukraine either, but these two disparate events have cost us hundreds of millions of dollars. That same risk would exist if we exported mobile phones or software.

“Yes, the world produced seven billion litres more milk last season in an exceptional run the world-over. While that put a lid on dairy price growth, sanctions following events in the Eastern Ukraine released some three billion more litres and now you’ve got Ebola too.

“No question this season is a poor one. It ranks down there with 2005/6 but that also means the many seasons around them weren’t too shabby. Seasons that have helped to make this country the third most prosperous on earth according to Legatum.

“Unlike the past, our guys have been saving the gains while investing into productivity and environmental improvements. The ASB reckons, according to NZ Farmer, that agricultural bank deposits over the year to the end of September totalled $7.2 billion.

“Within the past few weeks RadioLive’s Duncan Garner has been on-farm and said this after visiting one; “So a bit of a message to the Greens, this guy wanted to pass on a message to the Green Party that they spend hundreds of thousands of dollars on what they do with their waste, and I thought it was quite brilliant, actually”.

Andrew Hoggard however doesn’t take too much issue with Russel Norman that the dairy industry might to likened to a pony.

“If he insists that it is a pony he should acknowledge that it is a very strong pony, it’s a stayer and it can perform economic miracles for our nation that Dr Norman would do well to get acquainted with,” Mr Hoggard concluded.

Season Average Dairy Company total payout ($/kg milksolids) Dairy Company payout (inflation adjusted)a
2003/04 $ 4.25 $ 5.34
2004/05 $ 4.58 $ 5.60
2005/06 $ 4.10 $ 4.83
2006/07 $ 4.46 $ 5.14
2007/08 $ 7.67 $ 8.51
2008/09 $ 5.14 $ 5.59
2009/10b $ 6.37 $ 6.82
2010/11b $ 7.89 $ 8.02
2011/12b $ 6.40 $ 6.44
2012/13b $ 6.18 $ 6.18

Fonterra’s milk price payout for the immediate past (2013/14) season is $8.40 kg/MS.
Source: DairyNZ Dairy Statistics for 2012/13
a Weighted to give real dollar values using the Consumers Price Index for the end of the June quarter. Sourced from Statistics New Zealand; Excludes dairy company retentions and deduction for DairyNZ Levy.
b Average dairy co-operative payout (Fonterra, Tatua, Westland)

 The Green Party doesn’t like dairying and it doesn’t like the government.

But neither farmers nor the government are betting on the industry.

Since National came to power in 2008 it’s introduced several measures to help business, foster trade and lower the burden of government.

Meanwhile farmers have got on with farming, accepting the reality that markets, the weather and various other factors beyond their control will affect the payout.

Last season we got a record high payout, this season will be much more modest but the medium to longer term outlook is still bright for dairying and the export income it earns for New Zealand.

 


Dairy prices stable

November 5, 2014

Fonterra’s GlobalDairyTrade price index dropped .3% in this morning’s auction but the price of whole milk, on which the payout is largely based, increased 1.6%.

gdt4.11


GDT index up 1.4%

October 16, 2014

GlobalDairyTrade’s price index rose 1.4% in this morning’s auction.

That is welcome news after the big fall in the index at the previous auction.


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