Swedes to buy Hart farms

Southern Pastures Limited Partnership, a group of Swedish investors, have Overseas Investment Office approval to buy eight Waikato dairy farms from Graeme Hart.

Swedish investors have government approval to buy eight Waikato dairy farms owned by NBR Rich Lister Graeme Hart.

The farms were part of 29 former Carter Holt Harvey dairy farms near Tokoroa – supporting almost 20,000 dairy cows over 30,000ha, on land converted from forest – put up for sale in 2010.

They were marketed for $225 million, with the cheapest at $5.1 million, suggesting the Swedish deal is likely to be worth tens of millions of dollars.

Ex-All Black captain Graham Mourie will run the farms for the Swedes. . .

The 16 former Crafar farms, the sale of which caused the xenophobes so much angst, covered about 8000ha and carried 16,000 cows.

That sale was believed to have been for about $200 million.

On the face of it, the Hart farms look like a bargain when compared with the Crafar ones but – and I stand to be corrected on this – I think the Crafar farms are on much better land.

Where are the jobs?

The very restrained and moderate welfare reforms announced by the government have resulted in the obvious question: where are the jobs for the beneficiaries who could work and will now be expected to seek work?

One answer lies in occupations where there is a high proportion of immigrants, among which is dairying.

It is work which requires stamina and the ability to work long hours but the tasks required of basic dairy workers aren’t particularly difficult to master.

Most position offer on-farm accommodation. Workers also have the opportunity to study through AgITO, gain qualifications and promotion.

Yet people who advertise for dairy workers often end up with immigrants because they can’t find New Zealanders willing to do the job.

Last year our dairy farms had a distinctly international look with staff from Belgium, England, the USA, Ireland, Sweden and Nigeria.

More than 1,000 people from the Philipines  are working, or will be next season, on dairy farms in Southland.

It might not be easy for solo-parents to find child-care to enable them to work the hours required in dairying and some older people might not cope with the physical demands of the job.

But there are jobs there for younger people who aren’t primary caregivers with the will to work.

Dairy workers have it easy?

Tesco has a website to promote the nutritional benefits of milk.

It includes a page introducing farmer Jo who it turns out isn’t a fulltime farmer:

Unlike Harry, who was herding cows before he could walk, I never thought I would end up back here. I studied History in Birmingham and lived there and then in London. But the chance came to develop different areas of the farm which are not strictly cow/crop related and I jumped at it. I now run the mountain boarding centre (like snow boarding with pneumatic wheels – loads of fun!) but I still work around the farm.

One of her duties is milking when a herdsman is off and she says:

Their job is a real lifestyle choice. They start at 4am to prepare for 5am milking, then go home and sleep before milking is done again at 5pm.

I’d be surprised if that’s how it is for most dairy farm workers in Britain, it’s certainly not here.

They get up early to do the morning milking. Whoever is rostered to get the herd in will start about 4.30am, the others at 5:00. After milking and washing the shed they go home for breakfast then back to work feeding out, shifting breaks, attending to animal health, doing repairs and maintenance . . .  They go home for lunch and sometimes have time for a short nap and then it’s back for afternoon milking which usually starts with getting the cows in at about 2.30. When milking’s finished they clean the shed before going home for dinner.

Extra staff are usually employed to feed calves but there are other duties around calving then it’s not long before mating which also requires more work. They might also be required to irrigate. Managers and share milkers  have administration to do too.

Dairy workers here are well paid, but the good ones earn every cent. It’s usually only on their days off that they’d have the luxury of sleeping between milkings unless they are employed only for milking and not full time.

Hat Tip: Business Blog

Apropos of websites promoting milk, DairyNZ has appointed Rosie as Cowbassador, the face of New Zealand’s 4.4 million dairy cows  face of New Zealand’s 4.4 million dairy cows. Followers have the chance to win an iPad.

Feds & Fonterra on intensive dairy plans

Federated Farmers has made a very measured response to the news farmers in the Mackenzie Basin are seeking resource consent for intensive dairy operations under which cows will be housed inside from March to October.

Feds president Don Nicolson says the farmers have the right to apply for consent and warns that tighter local authority rules may lead other farmers to look at similar operations:

“I think we need to take a deep breath here.  These are only applications and as such, they have to go through the full resource consent process.  I think it’s safe to say we’re going to have a very helpful debate,” . . . 

“From what I see, it’s a European style of agriculture being applied to a European style of climate.  The MacKenzie Basin supports rapid grass growth over summer but also has harsh winters.

“Yet it’s the right of every single landowner to make an application and let due process test the validity of that application.  Listening to some of the comments, especially from the Greens, makes me wonder when did we become a dictatorship?

“The Greens can’t have it both ways.  They wish to see pastoral free-range farming controlled, yet oppose applications that are fairly much as controlled as you can get.

“Also, given the increasing trend towards council micro management of farming we are seeing in Horizons’ proposed One Plan, a lot of farmers will be following these applications with interest. 

It is possible that what the applicants are proposing will have a lesser impact on the environment than free range dairying because they’ll have much greater control of the effluent.

. . . “This style of closed cycle farming means effluent can, for example, be put into bio-digesters with the resulting biogas used to power the farm offsetting farm animal emissions.  Surplus energy could be sold into the national grid and all the while, nutrient loss is minimised.  

“This is what the emissions trading scheme is meant to encourage, isn’t it?

“Diluted cow effluent also contains vital nutrients that can be recycled back into pasture over the summer months to support grass growth, which further reduces the need for fertiliser. 

That doesn’t get around concerns about what the proposed operations might do for New Zealand’s free-range branding.

Fonterra milk supply manager Tim Deane said the company had “real concerns” about the environmental sustainability of stall-based farming.

New Zealand had been showcased as an example of a country using free-range systems by the World SPCA, he said.

“We will be watching carefully to see if the farms are able to comply with the regulations governing animal welfare and sustainable land use.”

Deane said Fonterra was comfortable with dairy-farming techniques that supported pasture-based farming, such as feed pads and supplementary feeding.

“We don’t believe stall-based farming of this type is consistent with New Zealand’s reputation as a source of dairy products from substantially grass-fed cows.”

As I said in yesterday’s post, the ability to graze stock outside is our natural advantage and it’s the cheapest way to convert grass to protein.

Concerns over animal welfare have also been raised but I don’t think they have any foundation.

Federated Farmers dairy vice-chairman Willy Leferink said  . . . “For these cubicles to work, the cows need to perform at the top end of their ability and they only do that if they’re given a very desirable environment.

“They just shut up shop otherwise.”

Quite, happy cows feed well and produce lots of milk, unhappy cows don’t.

Bollard says some farms must sell

Real Estate agents’ phone have been busy since Fonterra announced an increase in its forecast milk payout.

Some calls have been from would-be buyers and a few have been from vendors wanting to take their farms off the market.

They’d been under pressure from banks but the increase in the payout has given them some respite.

The sharp drop in the payout last season provided a wake up call for farmers who had borrowed heavily and many will use the increased payout to reduce debt.

However, the increase might not be enough for everyone.  The Reserve Bank’s financial stability report says some farms are carrying too much debt and will be forced to sell some or all of their operations.

Very few farms have sold in the last few months because buyers have been holding back but that changed this week.

No-one rings a bell at the bottom of the market, but the number of calls real estate agents are fielding suggests dairy farms, and their prices, might be about to move again.

Keeping it simple better all round

Dairy farmers are being criticised for using palm oil kernel expeller.

Environmentalists are concerned about the effects of felling tropical rain forests which have been replaced by palm plantations.

There is another side to that debate.  Andrei at NZ Conservative points out the hypocrisy of criticising developing nations for doing what developed nations did for years.

However, I have some sympathy for the criticism, albeit for different reasons.

New Zealand’s natural advantage is the climate which enables us to have low cost, free range farming systems. Feed supplements like PKE increase production but they do so at a cost. That might be justified at last year’s record payout but now that the forecast payout for this season is well back it probably isn’t.

The payout goes up and down and there’s very little farmers can do about that. But we do have a fair bit of control about inputs. Keeping the cost of them down with simple systems, based on grass feeding, helps maximise profits in the good years and minimises the damage in the bad ones.

What farmers feed their cows is a business one. But sometimes what’s good for the environment is also good for business and I think less PKE might be better for both.

Immigration NZ tightens criteria for dairy workers

Immigration NZ has tightened the criteria for migrants seeking work on dairy farms, requiring at least two years relevant work experience.

This is a response to the incresing number of dairy workers from the Phillipines and is a ploy to protect jobs for New Zealanders. That might be okay if there were locals willing and able to work on dairy farms but the rapid expansion in the industry has led to a shortage of good staff.

Note the word good – because any worker is not necessarily suitable and most employers would put the right attitude before experience when seeking staff.

Besides work on overseas farms may be so different from ours that “relevant” work experience it isn’t much use anyway.

Immigration rules too strict for dairy workers

A change in the way Immigration New Zealand is interpreting policy  is hampering would-be employers trying to recruit overseas staff for dairy farms.

Immigration Placement Services manager Bruce Porteous, who is based in Manila, said as many as 500 workers have had their visa applications declined because they were not skilled enough.

Assistant herd manager and herd manager are on the INZ Immediate SKills Shortage list but the department has determined that an assistant herd manager needs the equivalent of a National Certificate in Agriculture Level 2, or two years’ work experience or both.

Five Rivers lower order sharemilker Scott Christensen said the rules were too strict. He had hoped to employ another Filipino as a dairy assistant this season but the person had had his visa application declined.

Mr Christensen said the man, who was a qualified veterinarian and worked in a zoo, was turned down by Immigration NZ because he did not have any practical dairy farm experience.

“We can take someone off the streets here and teach them to milk cows in five minutes,” he said. “If this man had milked 10 cows for the past two years then that’s all that would have been required.”

We’ve been having problems with INZ too because our herd manager wants to apply for residency but the rules require him to have a Bachelors degree or five years relevant work experience. He’s been working for us for 2 1/2 years and he’s worked his way up to herd manager, while completing AG ITO levels 2, 3 and 4. He’s had enough relevant experience and has the relevant qualifications for us but that’s not good enough for INZ.

 I sought advice from Federated Farmers which quite rightly works at the policy level rather than with individual cases. However, the bloke I spoke to said he’d had so many approaches from farmers struggling with INZ he could be working on the issue fulltime.

I don’t know who makes the decisions on what’s required but they obviously don’t listen to employers who are usually far more concerned about attitude than relevant experience.

People with good work ethics can easily be trained to milk cows and overseas experience is often so far removed from what happens here it can be a hindrance rather than a help.

I understand the need to ensure that immigrants aren’t taking jobs which could be done by New Zealanders. But there is a desperate shortage of good workers at all levels in the dairy industry and it’s being aggravated because INZ requirements are far stricter than those of the employers.