Fonterra caught by non-tariff barriers

August 14, 2013

Russia, Belarus and Kazakhstan have banned products from most Fonterra plants .

Trade Minister Tim Groser’s office today confirmed the three former Soviet states had banned all Fonterra dairy products, despite none of the potentially affected product being shipped there.

Dairy exports in the three countries are worth $133 million a year.

Primary Industries Minister Nathan Guy said officials were working to rectify the ban.

“We’ve got our ambassador from Moscow working around the clock with Russian authorities to provide them with the information they are demanding,” he said. . .

Fonterra confirmed it sent none of the potentially affected why protein concentrate (WPC80) to these countries and no Fonterra products sent there used the affected WPC80 as an ingredient. . .

This is a non-tariff barrier.

It’s almost certain that Sri Lanka’s recall of Fonterra products is too.

Sri Lankan test results for agricultural chemical Dicyandiamide in Fonterra milk products were “off the charts” in comparison to other “extensive” testing according to New Zealand Prime Minister John Key.
 
Officials in Colombo have ordered a recall after they say DCD, a nitrate inhibitor used in fertiliser, was found in two batches of imported milk powder.

Fonterra disputes DCD traces were present in the product in Sri Lanka and says testing regimes are flawed. . .

This is disappointing when so much effort has been put into getting a toe-hold in these markets but non-tariff barriers can be just as difficult to combat as blatant protectionism.

 


Milk DCD free

February 22, 2013

Ministry of Primary Industries tests have confirmed no traces of DCD in milk since November.

“MPI and the New Zealand dairy industry have conducted voluntary testing of New Zealand dairy products to build a comprehensive picture of the presence of DCD in New Zealand’s milk supply,” MPI Director General Wayne McNee said.

The tests have found no traces of DCD in milk collected from New Zealand farms after mid November 2012.

“We are releasing the core findings of the testing today to be as open as we can be with our markets and customers, despite the fact that the quantities of DCD found in our dairy products creates absolutely no food safety risk whatsoever,” Mr McNee said.

With the co-operation of the dairy industry, nearly 2000 samples of dairy products have been tested from all the major dairy companies.

Testing has specifically targeted dairy products using milk collected during the New Zealand spring last year from the less than five percent of dairy farmers who used DCD on pastures. Results have been coming in as recently as last week.

As expected, minute traces of DCD have been found in various dairy products already in the supply chain from a variety of companies. However, there remains no food safety risk – all traces have been significantly below the European Commission’s daily intake level for DCD.

“Importantly, tests on products made from milk collected from farms after mid-November show no traces of DCD at all,” Mr McNee said.

“These findings confirm our expectations. We have informed markets of them.”

There never was a food safety issue.

The problem was there was no international standard for DCD but the tiny traces found in some milk products late last year were well below the EU standard.

There was a perception problem but the prices have continued to increase in Fonterra’s GlobalDairyTrade auctions since the announcement traces of DCD were found.

This shows that markets weren’t concerned, in spite of some opposition politicians attempts to manufacture a scandal.

It’s also a vote of confidence in New Zealand’s very high food safety standards and a reminder of why maintaining them is so important.


Milk up 2.4% in GDT auction

February 6, 2013

The trade weighted index increased 2.4% in this morning’s GlobalDairyTrade auction.

This is the fourth price gain in succession.

GDT Trade Weighted Index Changes

GDT feb 6The increase is particularly good news as this was the first auction since news broke of tiny traces of the nitrogen inhibitor DCD being found in some milk products.Even though there was no food safety risk there was a perception risk but that doesn’t seem to have impacted on demand.Price changes:  Anydrous milk fat was up 7.2%; butter milk powder increased 3.7%; cheddar was down .1%; milk protein concentrate was up 1.2%; rennet casein increased 3.3%; skim milk powder increased .5% and whole milk powder, which has the biggest impact on the farm gate price, increased 5.4%.


Rural round-up

February 5, 2013

ECann Rakaia River recommendation accepted:

Canterbury Earthquake Recovery Minister Gerry Brownlee says the Government has accepted Environment Canterbury’s recommendation to change the water conservation order that covers the Rakaia River.

The change will allow TrustPower to release water from Lake Coleridge for irrigation when the river is low, increasing the reliability of the water supply.

“Environment Canterbury’s report and recommendation is a good example of both environmental considerations and the needs of the farming community being taken into account,” Mr Brownlee says. . .

Why wash clean linen in public – Alan Emerson:

Farming is certainly in the mainstream media. 

Most outlets are covering the DCD saga and they weren’t helped by some woolly statements from the Ministry for Primary Industries (MPI) and Fonterra.

I thought the two fertiliser co-operatives, Ballance and Ravensdown, handled the issue well, with their media releases being factual and unemotive. Both withdrew their DCD product and that, in my opinion, should have been the end of the story.

The issue is simple – DCD is safe. It has been around since the 1920s and used in its current form since 1981 and that is the problem.

Because it isn’t a new product but an adaption of an existing chemical, it is not classified under the international Codex Alimentarium. For that reason there is no minimum or maximum allowable level.

The problem is technical and procedural – it is not a chemical or health issue. Googling DCD you can identify all the many countries using it. You can also read glowing references about the product’s ability to increase yields in tomatoes, wheat, barley, rice and grass. . .

Lessons learned on managing perception – Alan Williams:

THE DCD issue has thrown up some lessons on how to manage market perceptions when the debate gets away from the science, Ministry for Primary Industries deputy director general (Standards) Carol Barnao says.

MPI’s risk assessment team discovered quickly there were no food safety concerns from traces of DCD found in whole milk powder, but the time taken for action was seen by some people as too slow and the presence of an unexpected compound was linked with tainted food in some markets.

More than three months passed between Fonterra’s product testing and the withdrawal from the market of the fertilisers containing DCD.

If there had been food safety concerns action would have happened much sooner, Barnao said.

Working groups were set up as soon as MPI was alerted in early November but it took time to complete the testing methodology and the why, when, and how of what happened, she said. . .

Happy to break new ground - Hannah Lynch:

Primary industries might be getting a new minister, but it’s in the associate role where a woman will be getting to make a mark for the first time. Hannah Lynch reports from Parliament.

The first woman appointed to a ministerial role in agriculture is not afraid of bringing a touch of femininity to the job, revealing she wears high-heeled boots on the family farm. 

Jo Goodhew has just been made Associate Primary Industries Minister in a Cabinet reshuffle that elevated the previous associate, Nathan Guy, into the main role.

“It is exciting but it is part of the general trend we are seeing where women who have the right skills are doing anything,” Goodhew said. 

“Women are going into roles that were previously held by men but now it’s just recognition that if you have got the skills it doesn’t matter what gender you are.”  . . .

MyFarm expanding to sheep and beef farms – Hugh Stringleman:

MyFarm intends to use its farm ownership syndication model for sheep and beef farms as well as dairy farms.

It put together one sheep and beef farm syndicate in 2010, for Kaiangaroa farm east of Taihape, and during this year will offer several more.

MyFarm director Andrew Watters would not specify the locations but gave parameters for the suitable properties and regions.

They would be mainly sheep-breeding and lamb-finishing properties, with beef cattle only additional. . .

Farmers Preparing to Steak Their Claim :

Farmers across the country are selecting their entries for the 2013 Beef + Lamb New Zealand Steak of Origin.

The competition to find the country’s most tender and tasty steak is entering its 11th year and is keenly contested nationwide.

Beef + Lamb New Zealand CEO, Dr Scott Champion, says the competition is taken very seriously and winning has become a badge of honour.

“The Steak of Origin rewards farmers for their efforts and showcases the skill in the New Zealand beef farming industry,” says Champion. . .

Freshman Sire Highlights Final Day of Karaka 2013:

New Zealand Bloodstock’s 2013 National Yearling Sales Series has drawn to a close today at Karaka with the final 212 yearlings of the Festival Sale concluding a bumper seven days of selling that has seen a total of 1021 lots traded for $72,387,700.

For the third day in a row Westbury Stud’s first season sire Swiss Ace (Secret Savings) provided the top price of the day, this time it was the colt at Lot 1353 from the four-time winning Stravinsky mare Poetic Music bought by Rogerson Bloodstock for $95,000.
1353 web
Top lot of the day the Swiss Ace colt (Lot 1353) purchased by Rogerson Bloodstock for $95,000

“He was the nicest horse here today and he proved that because he was the top lot of the day.

http://www.fwplus.co.nz/article/alternative-view-why-wash-clean-linen-in-public?p=6


Tiny traces of DCD in Westland samples

January 31, 2013

Westland Milk has found tiny traces of DCD in some samples of its products in tests this week.

Westland Milk Products customers are being assured food safety and human health has not been put at risk by the discovery of traces of DCD in some of its own samples this week.

Following advice late last week from the Ministry of Primary Industries (MPI) of the discovery by Fonterra of traces of DCD in some of their milk products, Westland Milk Products commenced its own testing through an independent laboratory. These tests revealed minute trades of DCD in samples produced prior to 1 November 2012. The evidence indicates that product made after 1 November 2012 is free from DCD.

“While we are assured by independent health authorities and the New Zealand Government that DCD is not a food safety risk,” says Westland Chief Executive Rod Quin, “we are very aware that for many of our customers any residue in milk products is undesirable. Some of our customers in Asia have already requested tests for DCD following the MPI announcement last week.”

As a priority, Westland is currently conducting further testing in line with customer and government requirements and will report the results to customers as soon as possible.

“The best way to allay our customers’ fears is with accurate information,” says Rod Quin. “We will continue to work with the New Zealand dairy industry, MPI and Government to reassure suppliers, customers and stakeholders that DCD is not harmful to human health and that every step to remedy this situation and prevent its ongoing occurrence is being taken.”

Mr Quin said only a minority of Westland’s shareholders had used DCD, and that most of the application of the product occurred outside of peak milk production periods.

The use of nitrogen inhibitors, which contain DCD, wouldn’t have been confined to Fonterra suppliers so this isn’t a surprise.

There is no risk to health from the tiny amounts of DCD found in any products and nitrogen inhibitors haven’t been used for months but the company has done the right thing by letting its customers know.

New Zealand’s reputation for safe food relies on high standards, strict compliance and good communication.

 


Rural round-up

January 29, 2013

NZ food is safe and our systems work:

Federated Farmers says New Zealand’s continual testing for impurities and open disclosure is why New Zealand primary exports are of the highest quality.

“We are aware some media reporting seems to have moved beyond facts and into uninformed opinion,” says Dr William Rolleston, Federated Farmers spokesperson on food safety.

“Residues of DCD (Dicyandiamide) nitrification inhibitors were detected but the levels recorded were in the order of parts per million. These residues only came to light because New Zealand continually tests for and refines testing for impurities.

“I doubt many countries test to the level we do but once DCD was verified our consumers and trading partners were notified. We take this seriously, very seriously and any suggestion otherwise is scurrilous. . .

DCD scare will ‘enhance’ NZ’s reputation:

The head of Federated Farmers says Fonterra only had to report the presence of agricultural chemical dicyandiamide in its milk because of a “technicality”.

Both the Government and Fonterra have reassured the public and our trading partners that there is nothing to fear from dicyandiamide, also known as DCD, which is used to prevent nitrogen seeping into waterways.
Fonterra says the traces of the substance – found four months ago – were so small they were not worth mentioning. Federated Farmers CEO Conor English agrees, saying there has been a “massive overreaction”.

Red Meat PGP Collaboration Programme for Greater Farmer Profitability

The red meat industry has agreed to work together to promote and assist in the adoption of best practice by sheep and beef farmers, as part of a new $65 million dollar sector development project with Government co-funding.

Wayne McNee, Director-General of the Ministry for Primary Industries (MPI), has just approved a commitment of up to $32.4 million from MPI’s Primary Growth Partnership Fund (PGP) for the red meat sector’s new Collaboration for Sustainable Growth programme.

This seven-year programme will bring together a number of participants in New Zealand’s red meat sector including co-operatively owned and privately owned processing companies that together account for a substantial majority of New Zealand’s sheep and beef exports, two banks and Beef + Lamb New Zealand. . .

Beef + Lamb New Zealand Welcomes Government Support For PGP Programme

Beef + Lamb New Zealand Chairman, Mike Petersen has welcomed the announcement by Wayne McNee, Director-General of the Ministry for Primary Industries (MPI), of the Ministry’s commitment of up to $32.4 million from the Primary Growth Partnership Fund (PGP) for the red meat sector’s proposed $65 million, seven year, Collaboration for Sustainable Growth programme.

“This will be a huge boost for the sector and will accelerate progress in an increasingly collaborative approach across a range of issues that are important for sheep and beef farmers,” Mr Petersen said.

The Collaboration programme involves industry participants AFFCO, Alliance Group Ltd, ANZCO Foods, ANZ Bank, Beef + Lamb New Zealand, Blue Sky Meats, Deloitte, Progressive Meats, Rabobank and Silver Fern Farms, who following approval and contracting processes will match MPI’s investment and establish a joint venture entity to undertake the programme. The programme is open to new investors who can join once the programme starts. . .

Start networking with the farming world don’t become isolated – Pasture to Profit:

There is a new opportunity to network with the farming world. Farming can be a very isolated profession. Farms can be remote. The very nature of the profession means that you are often working alone. It’s that same feature which of course attracts people to farming. Farming gives you the ability to be your own boss and to make your own decisions. Running your own business can be both exhilarating & very stressful.

You don’t have to farm alone or in isolation! Today there are some very good online farming Discussion Groups. Social media won’t ever replace face to face talking with other farmers. However on for example; Twitter forums like #AgchatNZ, #AgchatOZ, #Agchat, #AgrichatUK provide an opportunity for talking to likeminded farming professionals. . .

 

2013 – Tipping Point Year for the ‘Blackcurrant Renaissance':

Over the last 500 years the blackcurrant has gone from being one of the most respected health foods of the medieval era to a staple household beverage, to being overshadowed by trendy new berries in recent times. But a Renaissance is underway and 2013 looks set to be a pivotal year for the blackcurrant industry, says global blackcurrant industry leader, Svend Jensen.

“For hundreds of years the blackcurrant has been a staple of the berry basket in European civilisation, as a health tonic and as a food. But over the last 30 years scientists have started to unveil the true health potential of the “king of berries”. New generation research started in Japan in the 1980’s and then the United Kingdom and New Zealand. Now exciting projects are also being undertaken by research teams in Scandinavia, France, Eastern Europe, and the USA,” says Jensen, President of the 5-year old industry group, the International Blackcurrant Association. . .

And from a new-found blog, The Farming Game, which aims to give an insight into the real world of farming in Australia, a bit of variety:

Wednesday night was the last night of this irrigation cycle with day shift wrapping up the final field Thursday afternoon, so it was an early start on Friday to go chipping. Volunteer cotton from last season was coming up in one of the refugee crops and needed to be removed, the only way to remove it is to chip it out so we had to walk up and down the rows and chip out the volunteer cotton and weeds with a hoe. Its not the best job to do but it needs to be done. . . .

And from the northern hemisphere – life of the farmer in January from the Peterson Farm Bros:


Petty politicking feeds perception problems

January 29, 2013

Opposition MPs are supposed to oppose the government but in trying to score points against the MPI, Labour’s agriculture spokesman Damien O’Connor has gone far, too far:

Fonterra chief executive Theo Spierings has torn strips off Labour agriculture spokesman Damien O’Connor for, he says, endangering the whole of the New Zealand dairy industry with “drastic” allegations relating to traces of a benign chemical, DCD, found in some powdered milk.

O’Connor issued a press statement alleging a cover-up of the DCD findings in September to allow the Fonterra Shareholder Fund float to occur unimpeded in November.

“If you do those allegations, you better come with some evidence,” Spierings told BusinessDesk. “What you are doing here is not just a Fonterra issue, it is a New Zealand issue. You are attacking your key sector of the country.

“I’m sorry. I get a little bit emotional about it. I don’t like this kind of attitude,” said the recently appointed Dutch ceo, who said O’Connor risked undoing three days’ intensive work, including Prime Minister John Key, with international investors and media. The issue got out of control internationally when a Wall Street Journal article questioned the safety of New Zealand milk.

 Spierings is deeply offended by O’Connor’s attack, and scathing of WSJ’s use of a local journalist he claims was “filling in for someone” to kick the issue into international prominence.

He defends Fonterra’s process once it found DCD, a nitrate inhibitor used to curb greenhouse gas emissions from farming, in tiny quantities in milk powder last spring, saying the first thing considered was whether it got “a green tick on food safety.”

It did. DCD levels were 100 times lower than standards in the European Union. In other parts of the world, no standards exist.

With a “dark green” tick on food safety, the company had “a little bit of time” for collective action with fertiliser companies, telling them they must either manage the DCD issue with farmers or have Fonterra tell farmers to stop using it in the meantime, while international standards were sorted out.

The manufacturers, Ballance Agri-Nutrients and Ravensdown, withdrew fertilisers containing DCD voluntarily, a fact not notified publicly until late last week.

“We are coming with answers and telling the truth,” said Spierings.

FSF units took a small hit early in trading, falling as much as 9 cents to $7.14, as international investors digested the information Fonterra sent on the issue.

The biggest risk for Fonterra would be if one country were to decide to impose even a brief, precautionary ban on milkpowder imports, which constitute a large proportion of Fonterra’s $14.5 billion annual export revenues, said Andrew Bascand, managing director at Harbour Asset Management in Wellington.

“To date, there’s been no market there’s been that sort of reaction. Fonterra appear to be on the front foot handling it. The commentary from our Chinese agents says they feel comfortable with where are at.”

Bascand said any weakness in the FSF price caused by the issue would be seen by some investors as a buying opportunity. The units were sold at IPO last November for $5.50. They listed at $6.60, and have risen above $7 since.

Spierings rubbished O’Connor’s claim the DCD issue was hushed up ahead of the listing, the largest equity event in New Zealand stock exchange’s history for at least a generation.

“If there had been a public health or safety issue, we would have disclosed,” Spierings said.

The range of elements being tested in milk was constantly expanding as testing was becoming more sophisticated. Where there was no public health risk, Spierings argues against mandatory immediate disclosure because of the volume of disclosures that would create.

“We should not need to disclose in our whole business things we want to improve,” said Spierings. “It would get (to be) a zoo. We could not run the company.”

O’Connor’s media release was headlined hard sell after milk taint hushed up.

It not only questions the integrity of Primary Industries Minister David Carter, the MPI and Fonterra, it undermines are very, very high food safety standards.

This is not a health or safety issue it’s a marketing and perception issue.

O’Connor’s petty politicking has the potential to do far more damage not just to Fonterra but to New Zealand’s hard-earned and well-deserved reputation for food safety.

The trade-weighted increase has increased in the first two GlobalDairyTrade auctions this year. This week’s auction will give an indication of whether the perception of problems has affected demand for our products.


NZ milk is safe – MPI, Fonterra

January 28, 2013

Ministry of Primary Industry Director-General Wayne McNee says there’s  confusion about the suspension of a pasture treatment, DCD, in New Zealand and what this means for the safety of New Zealand milk products.

“Use of DCD was suspended by its manufacturers because very small traces of residue were unexpectedly detected in New Zealand milk. DCD residues have been only found in some milk powder products and not in other dairy products such as butter and cheese.

“The detection of these small DCD residues poses no food safety risk. DCD itself is not poisonous,” Mr McNee says.

“DCD is not used directly in or on food in New Zealand and never has been. It is a product used on pastures to reduce greenhouse gas emissions and the leaching of nitrogen into waterways.

“DCD manufacturers have voluntarily suspended DCD because New Zealand’s international dairy customers expect New Zealand products to be residue-free, where there is no internationally accepted standard for residues for particular compounds. An international standard has yet to be agreed for DCD.

Mr McNee says the European Commission has set an acceptable daily intake for DCD, and based on the highest DCD residue that was detected in New Zealand milk products, a 60 kg person would have to drink more than 130 litres of liquid milk or consume some 60 kg of milk powder to reach the Commission’s limit for an acceptable daily intake, and considerably more to have any health effects.

The Ministry says there is only a small amount of dairy product potentially involved in this issue. DCD has been used by less than five percent of the country’s dairy farmers who applied it only twice a year. Each application leaves only traces of residue on the grass for no more than a few days. This means only very small numbers of New Zealand cows could have come into contact with DCD in very limited time frames.

“The chance of any residues of DCD being present in milk products processed now is minimal,” Mr McNee assures.

“There has been no use of DCD on New Zealand pastures since September 2012, and now that its use has been suspended, it is not possible that any New Zealand dairy produce currently in production will have DCD residues in it.”

There has been absolutely no restriction on dairy sales in New Zealand because of this suspension of DCD use on pasture.

DCD is not melamine. It is a different chemical and has none of the toxicity that melamine has.

Fonterra is also reassuring consumers our milk is safe:

Fonterra Co-operative Group Limited Chief Executive Theo Spierings has today reassured global customers that New Zealand dairy products are safe to consume.

“We know some of our customers and regulators have questions.

“We need to answer them, and that’s exactly what we are doing.

“We have strong science and we are providing assurances about the safety of our products.

Let’s keep it in perspective. Our testing has found only minute traces of DCD in samples of some of our products.

“It is important to remember that the minute traces detected were around 100 times lower than acceptable levels under European food safety limits.

“The Ministry of Primary Industries has confirmed that the minute traces pose no risk to human health.

“DCD has never at any point been a food safety issue – and if it had been, we would have been the first to speak out. Fonterra has one of the highest standard food supply chains in the world, and safety is part of our DNA.

“Since November we have been closely involved in a working group with the Government, the fertiliser companies, scientists and other dairy industry representatives gathering information, scientific opinion, and undertaking tests.

“The bottom line? Our products are safe. Customers can rest assured,” said Mr Spierings.

Those are the facts.

DCD was only found in some milk powder products, not in butter or cheese. It poses no food safety risk and it’s not poisonous.

But when it comes to food safety perception and emotion will trump facts.

Overseas media is a carrying the story and that will be enough to make some consumers wary, regardless of the facts.

The risk isn’t a food safety one. It’s a perception and marketing one and will be higher in countries where people can’t trust their government and businesses to tell them the truth.


Rural round-up

January 27, 2013

Maori Trust beats 1080 opponent in court:

A veteran oponent of using 1080 poison to kill possums has lost his latest bid in the courts to stop a Maori organisation using the compound.

David Livingston asked for a review of the Lake Taupo Forest Trust, after the Maori Land Court previously refused to grant an injunction against the trustees . . .

The use of dicyandiamide (DCD) to control nitrogen pollution in NZ - Bob Wilcock:

For the last 20 years New Zealand has been undergoing a rapid expansion in dairy farming, driven by commodity prices. New Zealand’s dairy exports, although small on a global scale of production, comprise 30-40% of internationally traded dairy products and are a major component of our gross domestic product (roughly 3%). Dairy farming is an intensive form of agriculture and its expansion into areas that were previously used for sheep and beef farming, combined with increased stocking rates in established dairy farming regions, has resulted in much greater leaching of nitrate to groundwater, and to surface waters receiving inputs of groundwater. . . .

Cargill to idle Plainview, Texas, beef processing plant; dwindling cattle supply cited:

Cargill today announced that it will idle its Plainview, Texas, beef processing facility effective at the close of business, Friday, Feb.1, 2013, resulting primarily from the tight cattle supply brought about by years of drought in Texas and Southern Plains states.  Approximately 2,000 people work at the Plainview facility, and they will receive company support.  Federal, state, county and city government representatives, as well as Cargill customers, suppliers and other key stakeholders were informed today of Cargill’s decision, concurrent with Cargill employees being notified.

“The decision to idle our Plainview beef processing plant was a difficult and painful one to make and was made only after we conducted an exhaustive analysis of the regional cattle supply and processing capacity situation in North America,” said John Keating, president of Cargill Beef, based in Wichita, Kan.  “While idling a major beef plant is unfortunate because of the resulting layoff of good people, which impacts their families and the community of Plainview, we were compelled to make a decision that would reduce the strain created on our beef business by the reduced cattle supply.  The U.S. cattle herd is at its lowest level since 1952.  Increased feed costs resulting from the prolonged drought, combined with herd liquidations by cattle ranchers, are severely and adversely contributing to the challenging business conditions we face as an industry.  Our preference would have been not to idle a plant.” . . .

Brazillian beef imports doubled in 2012 – Gemma Mackenzie:

UK imports of Brazilian beef doubled during 2012, but trade restrictions mean import levels are still 85% lower than in 2007, said Quality Meat Scotland.

Speaking at a recent “EU Imports and CAP” seminar in Bridge of Allan, QMS head of economic services Stuart Ashworth said that since trade restrictions were placed on Brazil in 2008, beef imports to the UK fell by 80% between 2007 and 2008, and continued to fall until 2011.
 
The European market was shielded from these imports as a result of significant import tariffs, however if trade restrictions were lifted, Scottish farmers faced the prospect of lower and more volatile beef prices, he warned. . .

Fonterra CFO announces retirement:

 One of the chief architects of Fonterra’s successfully launched listed units, chief financial officer Jonathan Mason, is to leave the co-operative.

The softly spoken former senior executive for the American wood products giant International Paper first came to New Zealand from 2000 to 2005 to be cfo at Carter Holt Harvey, which IP owned at the time, before returning to the US. . .

And a media release from the Pasture Renewal Charitable Trust:

Competition to boost awareness of pasture renewal:

Over 80% of New Zealand dairy farmers intend to renew run-out pastures this season, regardless of their financial outlook, reports a dairy farm survey released recently from CINTA.

This result highlights farmers know that annual pasture renewal is vital to their operations and yet actions do not always follow those intentions.

To encourage more action on pasture renewal, agribusiness organisations have the opportunity to get alongside farmers to discuss and encourage their annual pasture renewal programmes through the “Win a Free Paddock” campaign which runs from 20 January through until the closure date of 28 February.

Open to all farmers (from both the dairy and sheep/beef/deer sectors) the three prizes, valued at $8,000 each, will be drawn on 5 March 2013. The prizes consist of products and technical advice used in the pasture renewal process and may be redeemed direct from the winners’ nominated rural retailer.

On-line entries are encouraged at http://www.pasturerenewal.org.nz. Entry forms are also available from most rural retailers or direct from their representatives. Winners will have the option to undertake their pasture renewal in either autumn or spring depending on their farming system and location.

Run by the Pasture Renewal Charitable Trust (PRCT), the competition is an excellent chance to be “in the money” and “do something about the difference” between the best producing paddock on farm and the worst”, to boost overall farm productivity, says PRCT project manager Nicola Holmes.

“PRCT recognises the importance of trusted, long-term working relationships between rural retailer representatives, contractors, consultants and farmers and having them plan programmes and timing of pasture sowing to ensure the best results,” says Nicola.  “Right now plans for autumn pasture renewal activity for 2013 will be well underway on many North Island dairy farms.”

Farmers not committed to an annual pasture renewal programme miss the chance to significantly improve pasture quality on their farm, which in turn will ensure greater productivity, increased returns, improved animal health and more farm management options.

Nicola says The CINTA survey of 600 dairy farmers nationwide shows cropping programmes, not finances, are the biggest barrier to increased areas of pasture renewal on New Zealand dairy farms.

Around New Zealand the total percentage of pasture renewal falls well behind the 10-12% annually recommended by the Trust. Dairy farmers renew around 6-7% annually and the sheep and beef sector 2-3%.


Rural round-up

January 25, 2013

How to make $58,788 per year with 20 cows - Milking on the Moove:

Here’s how, with just 20 cows and a few hours a day you can make $58,788 per year.

I’m serious!

My concern is that it is getting more and more difficult for young farmers to get into farming and secondly dairy farming in particular is not an attractive career choice for the youth of today.
This blog is really about alternative ways to go dairy farming. 

The average dairy farmer has millions of dollars in assets made up of land, cows and Fonterra shares. The conventional way to progress is to work on dairy farms and progress up the share farming ladder.

But there are other ways. . .

How much do dairy farmers make part 2 – Milking on the Moove:

How much money do dairy farmers really make?

Are they really that rich?

Do they really pay no tax?

One of my first posts was “how much money do dairy farmers make”. It’s one of my most popular posts too. The major source for this post is the google search, “how much money do dairy farmers make?”.

I thought I’d go into a little more depth.

But first, what constitutes a dairy farmer? . .

2013 may be year for sheepmeat strategy – Allan Barber:

The key question for the meat industry this year is whether anybody will make any money. After last season when farmers enjoyed unprecedented procurement prices and the meat companies lost millions of dollars as a result, prices have headed south and look set to remain there for the foreseeable future.

Sheepmeat is the product most under threat with the traditional markets all showing serious signs of indigestion. As an example a US importer has been reported as saying he has a year’s worth of inventory and can’t buy any more and neither is anyone else. This signals a major problem for middle cuts like lamb racks, while Europe isn’t exactly rushing to buy any product either. . . .

DCD Suspension Supported:

The Ministry for Primary Industries (MPI) supports today’s announcement by Ravensdown and Ballance Agri-Nutrients that they have voluntarily suspended sales and use of Dicyandiamide (DCD) treatment on farm land until further notice.

“Once we knew that even very low levels of DCD residues found in milk may present a trade issue, MPI set up a working group to assess the impact of that, even though there is no food safety concern associated with the use of DCD,” Carol Barnao, MPI Deputy Director General Standards says.

Consumers’ have high expectations of New Zealand food and the regulations we have in place to ensure its quality and safety, Ms Barnao says. . .

DairyNZ supports DCD suspension:

Industry body DairyNZ has come out in support of Ravensdown and Ballance Agri-Nutrients’ voluntary suspension of sales and use of Dicyandiamide (DCD) treatment on farm land until further notice

However, DairyNZ Chief Executive Tim Mackle is urging the two companies, government authorities and dairy companies to work on pragmatic solutions that would enable the product to be back on the market and able to be used by farmers. . .

 Withdraw of DCD based nitrification inhibitors:

After traces of DCD (Dicyandiamide) were detected in liquid milk, Federated Farmers fully endorses the decision to voluntarily withdraw DCD based nitrification inhibitors until acceptable residue levels have been internationally agreed.

“DCDs are considered safe and there is no evidence to suggest otherwise, however, there is no internationally agreed acceptable level and so the default is the level of detection,” says Dr William Rolleston, Federated Farmers spokesperson on food safety.

“These residues have only come to light given the increased sophistication of testing we now possess. It really shows the thoroughness of testing within New Zealand’s primary industries and the high standard we put on ourselves to protect our reputation as a trusted supplier of food products.

“We also need to keep things in perspective because DCD based nitrification inhibitors have been applied on around 500 dairy farms out of some 12,000 in New Zealand. . .

GIMBLETT GRAVELS Syrah reaffirms pedigree to international wine critics:

Sixteen of the world’s most influential wine critics experienced GIMBLETT GRAVELS wines and hospitality yesterday as part of their tour of New Zealand’s wine regions.

For many, the prime purpose of the visit to Hawke’s Bay was to learn more about the rising phenomena of GIMBLETT GRAVELS Syrah. Twelve 2009 and 2010 vintage Syrahs, including four benchmark international wines from France and Australia, were presented ‘blind’ (completely unidentified) for their evaluation. . .


Reputation relies on trust

January 25, 2013

The announcement that traces of DCD have been found in milk is concerning but the way it has been handled is exemplary.

There is no food safety risk but the two fertiliser companies which use products with DCD have immediately suspended sales.

This media release from Ravensdown explains the issue:

Ravensdown announces today that, with immediate effect, it is suspending the sales and application of its eco-n product which contains DCD.

“The reputation of New Zealand as a quality food producer is as important to us as it is to our farmer owners. So it is reassuring that both the MPI’s and our own peer-reviewed research shows there are no food safety issues with DCD or eco-n,” comments Greg Campbell Ravensdown Chief Executive. “What’s changed is that last year, organisations like the US Food and Drug Administration added DCD to a list of substances to test for. This, combined with increasingly sophisticated scanning technology now presents a possible trade risk. Given the risk to NZ’s dairy export reputation, Ravensdown has taken the initiative and is suspending the single product which uses DCD for this calendar year.”

“As DCD has been used safely around the world for 30 years, there has never been a set of international standards around maximum residue level in food products. Because no standard exists for DCD, no detectable presence is acceptable. And because zero detection of DCD cannot be guaranteed, Ravensdown has taken the responsible, voluntary step to suspend its use while the trade issues are resolved,” added Greg.

In December last year, the Ministry for Primary Industries initiated a working party to assess the use of dicyandiamide (DCD) on farm land. The working group comprises representatives from MPI, Fonterra, the Dairy Companies Association of New Zealand and fertiliser companies Ravensdown and Ballance.

The working group was set up after testing on whole milk powder detected the occasional presence of low levels of DCD coinciding with the times of the year that the product is applied.

DCD, which is applied to pasture in autumn, winter and spring, has been used to reduce nitrate leaching and greenhouse gas emissions in New Zealand for nearly a decade.

“Though this news is disappointing for the 500 customers who use eco-n, the potential risk demanded decisive and pre-emptive action ahead of the autumn application season,” said Ravensdown’s Greg Campbell.

Even without eco-n, Ravensdown continues to help farmers lift their production and lower their environmental footprint. The farmer-owned co-operative does this through whole-farm testing, nutrient management planning and advice plus precise fertiliser application.

“We continue to help farmers produce top quality food and do all we can to support New Zealand’s export story in a complex world of international trading partners and regulations. We’ll be foregoing sales of eco-n, which makes up about 1% of Ravensdown’s annual revenues, but we are a 100% farmer-owned co-operative concerned with the long-term future of the rural sector,” added Greg Campbell.

“In the long-term, mitigating nitrate leaching is vital for sustainable New Zealand farming. The effectiveness of nitrification inhibitors like DCD is well proven and helps farmers in the face of stricter requirements being imposed on them. So we’ll be looking to the Ministry for Primary Industries through the working party to initiate the potentially-lengthy process of seeking a new international standard to recognise DCD. This would then specify a level or maximum residue which New Zealand dairy exporters and producers could work below,” concluded Greg.

Ballance’s media release says more research is the key:

More research is the key to developing nitrification inhibitors which help farmers reduce environmental impacts while meeting potential international trade requirements, Ballance Agri-Nutrients Research and Development Manager Warwick Catto said today.

His comments follow the voluntary suspension of sales and application of the nitrification inhibitor dicyandiamide (DCD) on farmland in response to the detection of the occasional presence of low levels of DCD in dairy products. Both major fertiliser co-operatives have announced the suspension until further notice.

“We still have every confidence in the potential for nitrification inhibitors to play an important role in helping New Zealand farmers to operate within nutrient loss limits.

“While our nitrification inhibitor product DCn has been a small part of our portfolio we remain confident that continued research will result in the development of a nitrification inhibitor solution which delivers environmental benefits, meets international requirements and is supported by robust science.”

Mr Catto said Ballance had not sold DCn since July 2012 and had not promoted its use on pastures since late 2010. This means that only a handful of Ballance customers have recently used the product. As a precautionary measure Ballance will not reintroduce any DCD-based products to the market until the potential international trade issue of milk residues is mitigated.

Ballance ceased sales of DCn in early spring 2012 to review the product and its applications, and incorporated it into its $32 million research and development programme aimed at reducing nutrient and greenhouse gas losses through more efficient fertilisers and next generation nitrification inhibitors.

“This is in line with our science-based approach and emphasis on continual evolution of our product and service offerings to meet the needs of New Zealand farmers.

“Our research is partially funded by the Ministry for Primary Industries through their Primary Growth Partnership and our work on nitrification inhibitor developments will take into account potential international trade concerns regarding residues in milk products,” says Mr Catto.

Mr Catto says that Ballance strongly supports all moves to protect New Zealand’s reputation for quality food and believes that all products used in food production must be backed by sound science and ongoing research.

Fonterra backs the suspension:

“We have been assured by New Zealand’s regulatory authority – the Ministry for Primary Industries – that there is no food safety risk.  However, DCD residues in agricultural products may present a future trade issue,” said Managing Director Co-operative Affairs Todd Muller.

“Although DCD was a promising option for reducing nitrate leaching, it is critical that New Zealand’s trade reputation is preserved.  The voluntary suspension is the responsible approach in the absence of any internationally agreed standards for DCD residues in food,” said Mr Muller.

Fonterra will participate in a working group set up by the Ministry for Primary Industries to examine what the suspension means in terms of the future use of DCD in farming, including the impact on water quality requirements.

Not all countries have the strict regulatory and testing standards for food safety that New Zealand does.

Some countries that do test food might hide results that didn’t suit them.

The companies have acted correctly in promptly suspending sales of products with DCD.

It’s about trust.

New Zealand relies on our reputation for high standards of food safety and that reputation relies on trusting that everything possible is done to keep food safe and taking a precautionary approach, even as in this case, there is no risk to consumers.

Products with DCD, a nitrification inhibitor, have been applied with fetiliser to pasture and forage crops to target urine, dung and fertiliser emissions. They can improve water quality, reduce production of the greenhouse gas nitrous oxide and increase pasture growth.


Rural round-up

March 3, 2012

Mount Linton improves ewes’ genetics - Shawn McAvinue:

Dag-laden sheep should be nervous when sheep genetics manager Hamish Bielski enters their paddock on Mt Linton station.

“I want marbles and handgrenades, instead of slops and plops,” he said.

He looks at the lambs’ faecal consistency twice a year, once in autumn and when they are one year old. . .

Kaiwhakahaere used a “Garry Owen” – Gravedodger:

This week I attended the biennial get together  of the High-Country section of Federated Farmers, this year hosted by the Marlborough area centered on the Middle Clarence Valley.
The commencement was at the Kahautara River on Highway 70 and kicked off by current chair, Graeme ‘Stumpy’ Reid. . .

Investment firms eyes southern dairy farms – Shawn McAvinue and Alan Wood:

 A new investment company is looking to buy “attractive” dairy farms in the south.

The dairy farms would be part of an investment fund that opened to investors yesterday.

Investors can buy into the Pastoral Dairy Investments fund with a minimum commitment of $20,000, plus fees. . .

Pig power proves promising:

There’s a new, unlikely energy source that can power farms while reducing greenhouse gas emissions – pig poo.   

A team of scientists at NIWA in Hamilton has developed a system that stores greenhouse gases from pig manure in a deep pond, from where it can be used as an energy source.   

NIWA research engineer Stephan Heubeck said the system reduces greenhouse gases in the atmosphere while providing an alternative source of energy . . .   

Protocol frustrates export of apples – Che Baker:

Apple exports from Central Otago to Australia will not go ahead this year after “excessive” biosecurity protocols have made exporting to the country uneconomic.

Pipfruit New Zealand director and Ettrick apple grower Stephen Darling said despite a 90-year ban on apple exports from Australia being lifted in 2010, the fruit would not be exported from the region this year.

Trial supports DCD’s environmental value – Gerald Piddock:

New research has confirmed the effectiveness of the nitrification inhibitor dicyandiamide (DCD) as a tool to reduce environmental impacts of pastoral farming.

The three-year nitrous oxide mitigation research (NOMR) trials commenced in autumn 2009.

They were conducted in the Waikato, Manawatu, Canterbury and South Otago dairy regions. . .

Boysenberry growers call it quits after continuing losses - Peter Watson:

The country’s two biggest boysenberry growers have quit the Nelson-based industry after another season blighted by bad weather and a high New Zealand dollar.

Their withdrawal means not only the loss of export income, but the end to hundreds of seasonal jobs which local people, particularly students, relied on to supplement their income.

Both Ranzau Horticulture and Berry Fields have started pulling out about 80 hectares of vines, although an existing grower is to take over 23ha of the Berry Fields’ fruit on McShane Rd and another is interested in running its pick-your-own operation.

Ngai Tahu wants to farm more fish species – Penny Wardle:

Ngai Tahu Seafoods Resources plans to add new species to its 14 hectare Marlborough Sounds mussel farm.

The Christchurch-based iwi-owned firm has applied to the Marlborough District Council for resource consents covering its plans to farm king salmon and hapuku, trial 13 New Zealand fish species and to grow algae and seaweeds at its Beatrix Bay marine farm in Pelorus Sound.

The company intends to grow fish, shellfish and seaweed together to improve production while reducing environmental impacts. Scallops and dredge and pacific oysters as well as mussels are covered in its existing consent. . .

Oysters on lunch menu – Shawn McAvinue:

Skippers say they look great and the first few hundred dozen oysters in from Bluff will be flown up to the Dockside restaurant in Wellington for lunch. And, so the oyster season has begun in what has been tipped to be a bumper year.

The first oyster boat got in to Bluff at 5.05am before heading back out . . .

Dairy Farms could save energy: study:

New Zealand dairy farms could achieve cost-effective annual      energy savings of at least 68.4 million kilowatt hours (kWh) in the dairy shed, the results of a pilot programme show.   

That was a 10% reduction and equivalent to the annual electricity use of about 7100 households. Individual farms could cut milking-shed electricity consumption by 16%, and a      post-pilot survey showed 46% of farmers would adopt savings technologies if their costs could be recouped within three years.  

Rabbits still a problem - Gerald Piddock:

Rabbit numbers in the eastern Mackenzie Basin have increased post-Christmas, the Canterbury Regional Council says.

The concerning area is 12,000ha and encompasses seven adjoining high country properties, Environment Canterbury (ECan) biodiversity team leader Brent Glentworth said.

The increase could have resulted from the high levels of vegetation this season caused by the wet spring and summer. . .


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