GDT milk price up 1.1%

The trade weighted index went up by 1.1% in this morning’s GlobalDairyTrade auction.

The price of anhydrous milk fat increased 1.7%, butter was up 4.7%; butter milk powder was down 2.2%; cheddar dropped 6.5%; skim milk powder was up 3.9% and whole milk powder increased 2.2%.

Rural round-up

40% productivity rise realistic - Sally Rae:

On-farm productivity gains in the New Zealand sheep industry over the past 25 years have been an ”extraordinary story”, AbacusBio consultant Dr Peter Fennessy says.

Productivity, which drove profitability, had been increasing at about 2.5% a year, which he attributed to a combination of genetics and management.

There had been genetic improvement through consolidation of the ram-breeding sector and larger ram-breeding flocks, and uptake of new technology (rams and pasture) and better pasture management. . .

Working within cap on nitrogen – Sally Rae:

“As a nation, we cannot continue to have conversations about protecting water quality without having a parallel set of conversations that redefine the New Zealand farming business model.”

So says Taupo farmer and entrepreneur Mike Barton, who, when faced with what was effectively a cap on stock numbers, sought to increase the value of the product he produced.

A nitrogen cap was imposed on farmers around Lake Taupo to protect its water quality, with 35,000ha of land now covenanted for 999 years to remove 20% of manageable nitrogen. . .

Fonterra invests further $30m into Whareroa:

Fonterra has announced a further $30 million investment to expand its Dry Distribution Centre at its Whareroa site in Taranaki.

This follows a $23 million upgrade of the Whareroa coolstores last year, bringing the total capital investment in the logistics infrastructure on site to more than $50 million since 2011.

Fonterra Director of Logistics, Mark Leslie, says the project is part of Fonterra’s overall drive to simplify their supply chain and reduce the associated costs.

“These investments are part of a strategy to deliver more products, more directly to ports for export. . . “

Fieldays; washer cleans up- Jackie Harrigan:

Taranaki dairy farmer Simon Washer made a clean sweep of the Fieldays Rural Bachelor of the Year Competition for 2013.

After a busy week of an Amazing Race through the North Island followed by a series of eight challenges at Mystery Creek, 25-year-old Simon won the People’s Choice Award – having built his Facebook following to more than 700 likes – before being presented with the Golden Gumboot Award for overall Rural Bachelor of the Year.

Simon is sharemilking in coastal Taranaki and a motor-cross and trail riding fan who is also involved in Young Farmers and chairman of his local club. . .

Green’s Taranaki claims poppycock – Harvey Leach:

What we saw on TV3’s Campbell Live about landfarming in Taranaki and then got from a Green Party media release was straight out of the conspiracy theorists’ playbook.

The Green Party called on Fonterra to stop taking milk from land in Taranaki that it said had been spread with oil and fracking waste, which included toxic chemicals.

This divides things into “everyone even remotely involved-qualified versus me”. In our case, those remotely involved-qualified were landowners, Fonterra, Taranaki Regional Council, petroleum companies and the Petroleum Exploration and Production Association. The “me” in this story was the Green Party of Dr Russel Norman. . .

 

Rural round-up

Winning farm proud but aims to be better still:

Tarawera Station, winner of the Maori excellence in sheep and beef farming title, says it’s proud to have received the title, but there’s still room for improvement.

The winner of the Ahuwhenua Trophy was announced on Friday night.

Te Awahohonu Forest Trust’s Tarawera Station, which is 60 kms northwest of Napier edged out two other finalists. . .

Te Kuiti shepherd wins inaugural Moari Young farmer Award:

Young Te Kuiti shepherd named as inaugural winner in Ahuwhenua Young Māori Sheep & Beef Farmer of the year competition

Jordan Smith, a young shepherd working on the Kearins Bros Limited farm in Te Kuiti has been announced as the inaugural winner of the Ahuwhenua Young Maori Sheep & Beef Farmer of the Year award in the Hawke’s Bay tonight. . .

Distribution deal launches value-added dairy product into Japanese market:

New Zealand-based dairy biotechnology company, Quantec Ltd, announced today that it has signed a distribution and supply agreement with a major Japanese specialty ingredients company, Kanematsu Chemicals Corporation.

Kanematsu will distribute Quantec’s patented complex of bioactive milk proteins, called IDP®, throughout Japan.

In a deal that is expected to extend over a number of years, the distribution agreement gives Quantec an expansion opportunity into a key Asian market and provides Kanematsu with access to a unique New Zealand dairy-based bioactive protein ingredient for inclusion into Japanese functional foods and human health products. . .

Bulls in the rain – rivettingKate taylor:

Black bulls everywhere this afternoon – if you were in the same paddocks as me near Norsewood!

I was taking photos at the annual Mt Mable Angus bull sale at Pukerimu – home to Kevin and Megan Friel.

It was a tad wet at times when viewing the bulls before the sale…

Three successful years of Primary Growth Partnership marked:

Science and Innovation Minister Steven Joyce and Primary Industries Minister Nathan Guy have marked three years of the Primary Growth Partnership (PGP) at a function at Parliament tonight.

“The PGP invests in research and innovation to boost productivity in New Zealand’s farming, forestry and food sectors,” Mr Guy says. “This will mean more exports, jobs and better environmental outcomes as well.”

“The Government and industry have so far committed $658 million of multi-year funding for 13 projects.  The potential benefit to the wider economy from these projects is over $7 billion per year from 2025.

“Some examples of current projects include red meat sector collaboration, manuka honey trials, harvesting trees from steep land, improving the precision of seafood catches, and selective breeding of greenshell mussels. . .

Guaranteed Milk Price Set At $7:

Fonterra has confirmed that the Guaranteed Milk Price (GMP) for the 2013/14 season pilot will be $7.00 per kgMS, following the announcement of its opening Milk Price forecast for the season.

Earlier this year the Co-operative announced a GMP pilot programme allowing farmers to lock in a milk price announced at the beginning of a season for up to 75 per cent of their milk supply. With strong interest shown from farmer shareholders, Fonterra is looking for around 200 farms to take part.

Fonterra’s Director of Commodity Risk and Trading, Bruce Turner, says ideally they are looking for a broad base of farmers who are at different stages of their farm’s operations, have varying herd sizes and are located across the country. . .

Discuss the state of NZ’s agricultural sectors at Fieldays:

The Ministry for Primary Industries will present a snapshot of the current position of New Zealand’s agricultural sectors at a free seminar at National Fieldays this week.

An MPI speaker will outline the main conclusions from the Situation and Outlook for Primary Industries (SOPI) including the significant and long-reaching affects of the recent drought, the upcoming reform in water management, and a view of the areas for largest potential growth within the agricultural sectors. . .

Lifting the performance of Maori agribuisness:

The Ministry for Primary Industries will host a free seminar on Friday 14 June at National Fieldays on its work to lift the performance of Māori agribusiness.

Māori agribusiness is a government priority, and MPI has work under way partnering with Māori to support them in maximising the sustainable use of their primary sector assets.

“There is a discernable shift happening in the ownership and management of Māori freehold land,” says MPI Director General Wayne McNee. “Māori landowners are taking a more active approach to fully capitalise on huge gains possible by increasing the productivity and profitability of assets, and by making the most of opportunities to develop the value of its primary produce. . . .

Rural round-up

Hepatitis A outbreak linked to Oregon berry farm – Mary Clare Jalonick:

The Food and Drug Administration is investigating an outbreak of hepatitis A linked to a frozen organic berry mix sold by an Oregon company.

The FDA and the federal Centers for Disease Control and Prevention said Friday that 30 illnesses are linked to Townsend Farms Organic Anti-Oxidant Blend, which contains pomegranate seed mix. Illnesses were reported in Colorado, New Mexico, Nevada, Arizona and California.

Several of those who fell ill reported buying the berry mix at Costco, according to CDC. A Costco spokesman said Friday that the company has removed the product from stores and is attempting to contact members who purchased the product in recent months. . .

Research shows importance of dairy -

New consumer research shows 72% of Asians think dairy is an important part of a balanced diet.

However, the research also shows fewer than half the 9000 people surveyed in nine countries are eating every day.

Fonterra strategy director Maury Leyland said the results clearly demonstrate growing awareness of the importance of dairy nutrition across the region and the opportunity this presents to the New Zealand dairy industry. . .

High quality tipped for bumper olive harvest - Peter Watson:

It’s a nervous time for Nelson olive growers as they try to beat the onset of winter, and the birds, to harvest what is expected to be a record crop.

Ideally, Peter Coubrough wanted to wait a couple of weeks before starting picking on his small grove on the Waimea estuary near Mapua to allow further ripening and get the oil percentage up, but he was unwilling to take that risk and lose a heavy crop.

“The weather hasn’t been as warm and sunny as we would have hoped.

“If we don’t get the fruit off now it will either get frosted or the birds will get it,” he said as the pickers arrived last week to begin work at Frog’s End Estate. . .

Vital investment tool developed for wood processors:

A major study report released by the Wood Council highlights the need for by-products from established industries like sawmilling if New Zealand is to develop profitable businesses based on emerging technologies, like bio-fuels and bio-chemicals.

The WoodScape study is the result of collaboration between the forest and wood products industry, the NZ Ministry for Primary Industries and NZ Trade and Enterprise, which together funded the project.

Crown Research Institute Scion, in partnership with FP Innovations and the Wood Council, evaluated wood processing investment opportunities in a New Zealand setting. . .

Fertiliser company seeking $10m for phosphate project:

Chatham Rock Phosphate is going to the public for the first time to raise up to $10 million, to help fund it through to the start of mining in 2015.

The fertiliser company said the public offer aims to raise $4 million with the ability to accept oversubscriptions of a further $6 million.

The offer will consist of new ordinary shares at an issue price of 35 cents per share with one option attached to every three shares issued. . .

Reaping rewards of hard work – Rebecca Harper:

There seem to have been a rash of farming awards handed out recently – perhaps it’s the season for it.

As a first-time attendee at the New Zealand Dairy Industry Awards, they were extremely impressive.

The awards, held at the TSB Arena in Wellington, ran like a well-oiled machine. It was a most professional and well-attended black-tie event.

The evening reflected the pride in the dairying industry and the esteem the awards are held in. There was truly the cream of the crop in the room.

And for an industry that pulls in a huge chunk of the country’s wealth, it was great to see its top achievers given the credit they are due, in the capital city. . .

Russell McVeagh and Fonterra scoop up ALB Law Awards:

Fonterra’s Trading Among Farmers transaction, completed in November 2012, was one of the big winners at this year’s ALB Australasian Law Awards. The transaction won New Zealand Deal of the Year and the IPO of the Fonterra Shareholders’ Fund won the Equity Deal of the Year Award, an Australasian-wide category. Russell McVeagh acted as the principal legal advisors to Fonterra from the beginning of the transaction in 2010 to its completion.

The firm would like to congratulate the Fonterra legal team, which also won the New Zealand In-house Team of the Year Award in recognition of their outstanding hard work and achievement. . .

New agriculture vehicle regulations:

New rules for agricultural vehicles came into force on June 1 with rural contractors – and farmers –being encouraged to familiarise themselves with these changes.

Rural Contractors New Zealand – the national association and the leading advocate for rural contractors in New Zealand – executive director Roger Parton says the new rules offer agricultural vehicle owners improved compliance and greater operational flexibility. He says Rural Contractors NZ has worked collaboratively with Ministry of Transport, NZTA and NZ Police to develop them.

“These changes are a long time coming and have resulted in rules that are easy to understand, comply with and enforce,” Roger Parton adds. “These changes recognise the unique operating characteristics and environment that agricultural vehicles require to travel on the road.” . . .

Milk price down 5.3% in GDT auction

The trade weighted price of mik dropped 5.3% in his morning’s GlobablDairyTrade auction.

The price of anhydrous mik fat dropped 4.3%; butter was down 2.6%; butter milk increased 3.3%; skim milk powder was down 3.1% and wholemilk powder dropped 7.1%.

 

Rural round-up

Dairy development helping environment - Gerald Piddock:

A controversial dairying development near Omarama is leading the way with its environmental practices.

It is still early days but the structure, fertility, health and depth of Little Ben dairy farm’s soil has significantly improved over the past three years.

Farmers saw the progress the farm had made at a field day last week.

The 470ha farm operates as a partnership between Richard Gloag and Merv McCabe. . . .

PGG Wrightson managing director to step down in August – Tina Morrison:

PGG Wrightson managing director George Gould will step down from New Zealand’s biggest rural technology and services firm after helping refocus the company.

Mr Gould previously headed Pyne Gould Guinness and was appointed to the top job at the larger company in February 2011 to help stabilise it as it exited non-core activities.

He will leave on August 31, the Christchurch-based company says in a statement today. . .

Merino man shakes up primary industries -

In 1995, John Brakenridge had an acute case of ‘new guy’. 

He’d been hired by the board of Canterbury-based wool marketer New Zealand Merino to breathe fresh air into a stale sector.

But the high country heartlanders were wary.

‘Which part of the South Island are you from?’ they asked the bloke who grew up in Auckland. ‘You look a bit young, don’t you?’ they said to the 34-year-old. ‘How long have you been in the wool industry?’ It was his first day.

Although he had a track record in the primary sector, serving as marketing manager for produce company Cedenco Foods in the late 1980s and partnering with the New Zealand Dairy Board in the Middle East, he was unmistakably a wool industry outsider.  . .

So close on second go - Jill Galloway:

Cam Brown says he will always be known as the guy who was second in the grand final of the Young Farmer Contest.

He was one of seven regional winners who won a place in the final. He was the winner of the Manawatu-Taranaki final.

Brown is competitive. He likes to do everything correctly and win.

“I lost by five points. I thought afterwards about places I could have made up those points. But I knew I’d given it my best shot in the contest.” . . .

Westland Milk Products Predicts Lifts Payout Prediction for 2013-14:

Westland Milk Products has announced a pay-out prediction for the 2013-14 season of $6.60 to $7 per kilo of milk solids (kgMS), an increase of 60 to 70 cents on the current season, with an opening advance (payable 20 September) of $4.80 per kgMS for all milk collected from 1 August 2013.

The Hokitika-based dairy cooperative also confirmed the forecast pay-out for this season of $6 to $6.30 per kgMS excluding retentions. The advance rate payable 20 June 2013 has been approved at $5.20 per kgMS.

Chief Executive Rod Quin says the forward view for the dairy market is relatively strong, even with the recent decline from the highs of six weeks ago. The strong outlook is being driven by ongoing firm demand and the expected shortfall of milk supply from key exporting markets. . .

Dairy farmers welcome some good news at last:

After a harsh drought and massive feed costs, dairy farmers needed good news and Fonterra Cooperative Group may have just delivered it.

“The forecast farmgate milk price of $7 per kilogram of milksolids (kg/MS) for 2013/14 is going to get a lot of attention,” says Willy Leferink, Federated Farmers Dairy Chairperson.

“Boy oh boy did we need some morale raising good news. In plain-English, it means that farmers could get about 0.58 cents per litre for milk they will produce between June and May 2014.

“While a $7 kg/MS milkprice forecast sounds amazing, the public deserve to know this is forecast revenue and revenue is not profit. To get to profit, you need to take off the farm’s working expenses, tax obligations and pay back the bank manager; a big expense being right there. . .

Aggressive forecast Farmgate Milk Price, advance welcomed by Farmers:

Fonterra Shareholders’ Council Chairman, Ian Brown, said it was encouraging for Farmers to see Fonterra take an aggressive stance in its Milk Price forecasting for next season.

The Fonterra Board of Directors today announced an opening Farmgate Milk Price forecast of $7.00 per kg/MS for the 2013/14 season, including a $5.00 advance.

Ian Brown: “This is great news for our Farmer Shareholders and reinforces the good position our Co-operative is in.

“Having a strong forecast Milk Price and advance puts Farmers in a healthier position and provides them greater flexibility in running their farms. . .

Great food starts with great soil:

Ballance Agri-Nutrients is showcasing the connection between great soil and premium produce, with quality producers of beef, vegetables, apples and wine featuring at their Fieldays site this year.

Ballance General Manager Sales, Andrew Reid, explains that soil is an integral part of the success of our farmers.

“In fact the whole New Zealand economy starts with those three inches of topsoil which support our rural production sector,” says Mr Reid.

Mr Reid says that premium producers have one thing in common – respect for the soil and the ability to work with it. . . .

We can get $7

Fonterra has announced an opening forecast Farmgate Milk Price of $7.00 per kgMS for the 2013/14 season – up $1.20 on the current season.

In addition, the Co-operative confirmed a higher Advance Rate schedule, with an opening rate of $5.00 per kgMS, reflecting the higher forecast Farmgate Milk Price for 2013/14.

This payout with a relatively high dollar reflects an expectation that the demand for milk will hold up.

The Board will announce its forecast Cash Payout – which comprises the Forecast Farmgate Milk Price and dividend for the 2013/14 season – in July when Fonterra’s budget is completed and approved.

Chairman John Wilson said the higher forecast Milk Price for the new season reflected continuing strong international prices for dairy.

“The general consensus is that dairy commodity prices have peaked but will continue at or near current levels until the fourth quarter of 2013. Most external forecasts point to prices remaining relatively strong through 2014.”

Commenting on the Advance Rate increase Mr Wilson said: “A stronger forecast Farmgate Milk Price, supported by our improving cash flows and strong balance sheet, means we are able to lift the Advance Rate for the new season to ensure farmers receive higher payments for their milk early in the season.

“A large proportion of our farmer shareholders have experienced drought conditions, which have had a significant impact on feed costs and production, resulting in early drying off of their herds.

A higher Advance Rate at the start of the new season will help our shareholders in managing their farming businesses to ensure an ongoing supply of high quality milk to the Co-operative,” said Mr Wilson.

Market Factors Influencing the Milk Price

Chief Executive Theo Spierings said the fundamental supply and demand balance has shifted: “Global milk production growth is slowing as a result of unfavourable weather conditions in many key milk production regions.

“Although we are seeing modest production growth in the USA, recent cold conditions in Europe have had a negative impact on crops and dairy, and the outlook remains mixed.

“Milk production growth in 2013 for the top 15 exporting countries is projected at 0.5 per cent or 1.2 billion litres – well below the 1.8 per cent (4.5 billion litres) growth levels we saw in 2012.

“In general, the global economic outlook remains steady but with some downside risk. In the USA modest growth continues, while China has managed a soft landing with the consensus on growth at around 7.8 per cent.

“While we expect most farmer shareholders will welcome a higher Milk Price, we will continue to closely monitor these key factors contributing to Fonterra’s opening forecast for the 2013/14 season.”

Mr Spierings said Fonterra was currently preparing its budgets for 2014, however, shareholders and unit holders should expect the strong uplift in international dairy powder prices to create a more challenging environment for Fonterra’s earnings in the first half of the 2014 financial year.

2012/13 Forecast

The Co-operative also confirmed today that it is holding its current forecast Farmgate Milk Price for the 2012/13 season at $5.80 per kgMS, and a forecast dividend of 32 cents per share, amounting to a cash Payout of $6.12 for a fully shared-up farmer.

“We are maintaining our current season forecast but advising farmers to be cautious in managing their budgets as we have seen a sharp drop in milk volumes as a result of the drought, and recent declines in GlobalDairyTrade auction results,” said Mr Wilson.

Raw Milk Regulation Change

Fonterra welcomed changes to Raw Milk Regulations that will apply from June 1.

“This season is the last when competitors can cherry pick when they get milk during the season, and it has coincided with the drought and the recent higher export prices.

“This meant Fonterra was required to supply large volumes of milk to competitors when milk flows were very low because of the drought, reducing the utilisation of our factories.

“At current prices, we estimate that the milk we have supplied our export competitors from March to May will cost our shareholders about $25 million in lost earnings, amounting to 1.5 cents per share in lost earnings.

“At the same time we estimate that due to the drought the benefit to our competitors is far greater, with the potential to add between 5 – 30 cents per kgMS to their performance.

“As this year’s drought has shown us, the Government did the right thing in changing the Raw Milk Regulations last year,” said Mr Wilson.

A forecast payout is just a forecast, it can change. But the board and management do their best to neither over nor under promise so suppliers have reasonable certainty when budgeting.

Who should feed the children?

In an ideal world all parents would take responsibility for looking after their children.

In a less than ideal world, there are times someone else has to help, for the children’s sakes.

The KickStart breakfast programme is a partnership between government, business and charity which is a good mix.

Prime Minister John Key today announced Government funding to expand Fonterra and Sanitarium’s KickStart Breakfast programme, and a grant to KidsCan to boost a variety of the charity’s initiatives.

“By teaming up with Fonterra and Sanitarium, and deepening our support for KidsCan, we are building on the existing strengths of these organisations, while keeping the costs to taxpayers down,” says Mr Key.

“The most enduring solutions to help vulnerable children and families happen when communities are stepping up – not just government.” . . .

The government should be the last resort, and initiatives like this usually work best when they start with communities helping themselves.

It would however, be better if there was no need for this sort of assistance.

“I’d like to make one thing clear – the Government believes parents have the primary responsibility for providing their kids with the basics, including a decent breakfast and a pair of shoes.

“But the fact remains that some children are going to school hungry and therefore not in good shape to learn.” . . .

Social Development Minister Paula Bennett reinforces that point:

“Parents are responsible for feeding their children. But we can’t ignore the fact that some children turn up hungry and can’t learn on an empty stomach.”

“We don’t want to replace parental responsibility, but the Government,  community, non-government organisations and business partners all have a shared responsibility for children,” says Mrs Bennett. . .

The policy has been criticised from the right for going too far and from the left for not going far enough.

John Banks says the food in schools programme is a band-aid that won’t fix the problem.

. . . “Rather than create a new welfare scheme, we should be looking at why kids are going to school hungry. We should then look closely at the assistance already in place.

“What we shouldn’t do is shift responsibility away from parents to government. This will only have negative and unintended consequences, and evidence has shown that food in school programmes are not effective.” . . .

I have some sympathy with that view but if parents let their children down, do we turn a blind eye?

Children are going to school hungry, people understandably don’t think this is acceptable and even though research shows it might not make a difference, they want action.

At least this initiative is voluntary – schools can opt in or not, and children can choose to eat the food which is offered, or not.

That should minimise waste and ensure the children whose parents let them down can have breakfast if they want it.

Will we get $7?

The latest BNZ Market Outlook * is optimistic about the price of milk:

The new season’s payout forecast should be well above
the current estimate ($6.25 to $6.30) for the season just
ending. We have long had $6.60 (milk plus profit) on the
board as an initial pick for the new season. But the upside
risks have grown considerably with world prices holding
up a little better than expected and particularly with the
decent dip in the NZD over recent weeks. We would not
be that surprised to see $7.00. That would be a positive
signal of global dairy market confidence from Fonterra.

Fonterra will announce the new season’s forecast today.

If it’s anywhere near $7 it would make farmers, their staff, suppliers and bankers very happy.

The wider economy would also get a boost.

To put some perspective on the importance of dairy
sector returns, it is worth remembering that dairy
products account for more than a quarter of New
Zealand’s merchandise exports. A total (milk plus profit)
payout forecast of $7.00 along with our assumed 6% lift
in next season’s milk production is indicative of total dairy
industry revenue being almost $2 billion higher than that
of the previous season. Such an outcome would be a cash
injection to the economy in the order of 1% of GDP over
the coming 18 months, a clear strong support to growth.

* This week’s Market Outlook isn’t online yet but will be here.

Rural round-up

Alliance eyes Indian market:

The Alliance Group says the Indian market provides the group with a potentially lucrative export market.

Management from the meat company have just been visiting the country to get a better idea of the market and trading opportunities for the company’s Pure South lamb.

The company says it will be aiming its product at the five-star food service market in top hotels and restaurants. . .

Record returns delivered to New Zealand kiwifruit growers in the shadow of Psa:

Zespri’s annual results for 2012/13 show the highest-ever average Orchard Gate Return (OGR) returns of $51,153 delivered to New Zealand kiwifruit growers. However, the record result comes as the impact of Psa on individual orchards continues to be felt across the industry.

A highlight of the year’s returns was the performance of the Zespri Green category, which accounts for around 70 percent of Zespri’s exported volume. Average per-tray Green returns increased by 21 percent from 2011/12 to $4.62, their highest level since 2003/04. This strong result flowed through to Zespri’s highest-ever average returns per hectare for Green growers of $37,959. . .

Deer industry ponders name change for  venison in Europe:

The deer industry is considering whether to have another go at marketing New Zealand venison in Europe under the name Cervena.

It’s looking for a new approach to counter falling sales in its biggest export market, Germany, where New Zealand venison is under pressure from cheaper European venison coming from countries like Spain and Poland.

Cervena is an appellation for New Zealand farmed venison, developed about 20 years ago.

It’s been used successfully in the United States, as well as New Zealand and Australia. . .

Cardona sale marks first step in Singapore refocus -

Vealls Ltd has named its preferred bidder for Cardrona Alpine Resort, the first step in a strategy to refocus on Singapore that is opposed by shareholder Elevation Capital Management.

Te Anau-based tourism company Real Journeys, whose businesses include the TSS Earnslaw and Milford Sound cruises, will make its first foray into skifields if the acquisition meets due diligence and gets shareholder approval.

Cardrona’s operating assets were valued at $A40.9 million, according to Vealls’ first-half accounts, and the skifield was the biggest source of earnings, at $A5.7 million, while the Australian company’s biggest asset, some $A57 million held on deposit with banks, generated just $A509,000, reflecting low interest rates. . .

Richie McCaw lends a hand to support launch Fonterra milk for schools in Christchurch:

Home-town hero Richie McCaw knows the milk being delivered to Christchurch’s Burnside Primary School children as part of Fonterra Milk for Schools will be top-notch. That’s because the rugby legend understands the value of dairy nutrition as part of a balanced diet.

“Throughout my career, my nutritionists have made sure that dairy is a big part of my diet. The message I’ve always got from them is that when it comes to keeping my body in top shape, a few daily serves of dairy should always be on the menu.”  

 

Richie says it is great to know that kids from his home town will directly benefit from having milk every school day with the help of Fonterra farmers, the commitment of local schools and the support of the Christchurch community.  . .

 

Double GOLD for Cirro at 2013 Decanter World Wine Awards:

Cirro is on ‘cloud nine’ after recently being awarded two Gold medals in the 2013 Decanter World Wine Awards for their 2012 Marlborough Sauvignon blanc and 2010 Marlborough Pinot noir.

Cirro wines are grown and produced in Marlborough, New Zealand. Winemakers David Tyney and Richard Green released their first vintage in 2009 after deciding to ‘join forces’ and combine their extensive winemaking experience. “From the beginning we wanted to create wines that epitomise the best of Marlborough, classic regional wines that over deliver on flavour and intensity” says David. . .

Forecast higher?

Fonterra will announce its forecast payout for the 2013-14 tomorrow.

Several pundits are suggesting it will be higher than this year’s $6.12 for a fully shared-up supplier.

That will be good news for suppliers and the wider economy.

Those competing for land-use,especially sheep and beef farmers, won’t be quite so happy.

Fonterra’s supply offer popular

Fonterra’s latest supply offer to shareholders has been very popular with farmers.

Fonterra Co-operative Group today confirmed that farmer shareholders offered to sell 75,223,742 economic rights of Wet Shares in this month’s Supply Offer, amounting to a total value of $595,772,036.64.

The high level of demand means the Offer will be scaled.  Fonterra will buy 79.7284 per cent of the economic rights each farmer shareholder offered to sell.

Chairman John Wilson said about 20 per cent of Fonterra’s farmers took advantage of the opportunity to release some of the value of their shareholding, providing more flexibility for their businesses.

“A significant number of farmer shareholders have thought through the potential benefits of using the additional flexibility provided by the changes made to our capital structure last year.

“Some have indicated they will use the Offer proceeds to fund further growth of their farming businesses, while others are saying they will relieve some of the cash flow pressure after this year’s drought,” said Mr Wilson.

The Supply Offer will not increase the current size of the Fonterra Shareholders’ Fund.  Fonterra is purchasing the Units that arise as a result of this Supply Offer and will then redeem them for Fonterra Shares, which means that the Offer will not affect the total number of Units on issue.

Shareholders Council chair Ian Brown says the take-up shows farmers are beginning to take advantage of the flexibility Trading Among Farmers (TAF) offers them.

“The first Supply Offer saw Farmers exercise some understandable caution but with growing confidence in the new system Farmers are now ready to use TAF as it was intended.

“The solid level of demand from Shareholders to release some of the economic value of their shares shows they are using TAF to their benefit.

“Farmers are taking advantage of the greater flexibility it offers them in making decisions that impact the day-to-day running of their business.

“This also strengthens our Co-operative as Fonterra is now able to make better use of our capital rather than, as the recent drought would have compelled it to, distribute it as Farmers redeemed their shares.”

TAF was started to offer protection for the company from redemption risk – too many farmers selling shares when the price was high.

The new system was designed to give farmers more flexibility and the company more security and it seems to be working as intended.

Rural round-up

What Fonterra’s CEO tells the Dutch - David Williams:

When he was playing rugby at university, Theo Spierings’ 1.96m frame was an advantage.

The Dutchman probably doesn’t think about it much now, as he leans more towards sailing than rugby, and is kept busy running New Zealand’s biggest company, Fonterra.

But for media, Mr Spierings’ height is crucial: it makes him easy to spy across a room where, literally, he can be (shaved) head and shoulders above the rest. . .

Drought blamed for export drop – James Weir:

The summer drought took a bite out of dairy and meat export volumes in April although higher commodity prices helped the dairy values hold almost steady for the month.

Seasonally adjusted figures showed total exports fell almost 9 per cent in April, compared with March, as meat, logs, timber and oil exports dropped in the month.

While exports were down, imports were also stronger than expected, leading to a much smaller than expected trade surplus of $157m in April.

The trade balance is expected to get worse in coming months because of the lingering effect of the summer drought on dairy and meat exports. . .

Kiwifruit Post Harvest Operators Join Forces in Support of Zespri Structure:

As a group of post harvest operators in the New Zealand kiwifruit industry, we represent approximately 76 percent of the total volume of kiwifruit exports.
Whilst we are quite diverse in our ownership structures, as a group we represent the largest capital investment in the New Zealand kiwifruit industry, with more than $450 million in investments in orchards, packing facilities and related assets.  At the peak of the kiwifruit season, we employ more than 8,500 people in our post harvest facilities and return approximately $100 million through wages and salaries to the communities in which we operate. . .

Tomatoes New Zealand Encouraged By Minister Kaye’s Move On Irradiated Produce:

Tomatoes New Zealand says the decision not to enforce compulsory individual labelling of irradiated Australian tomatoes and capsicums is disappointing, but the industry organisation believes their concerns have been heard.

In a letter to Tomatoes New Zealand received this week, the Minister for Food Safety Nikki Kaye said she understood Tomatoes New Zealand’s concerns with ensuring irradiated produce was clearly labelled and wanted to work with the organisation to ensure labelling requirements are enforced.

Alasdair MacLeod, Chair of Tomatoes New Zealand, says; “We called for Minister Kaye to put in place tougher labelling requirements for irradiated tomatoes. . .

Cowbassadors take Wellington by storm:

Finalists from the New Zealand Dairy Industry Awards (NZDIA) are taking central Wellington by storm, fundraising for Ronald McDonald House Wellington. Farmers are on the streets in force ahead of the NZDIA finals tonight under Master of Ceremonies, TV3 News’ Mike McRoberts.

“I guess these cow balloons raise dairying to new heights,” quipped Willy Leferink, Federated Farmers Dairy Chairperson.

“There are dairy farmers in central Wellington right now ahead of tonight’s New Zealand Dairy Industry Awards. Being part of the community, they are selling the balloons and doing other tasks to raise money for Ronald McDonald House Wellington. . .

And from Introverts are Awesome:

Fonterra’s price will tempt suppliers to sell

Fonterra has announced a final price of $7.92 for shares suppliers sell into the shareholders fund.

The price was calculated by reference to an average of the daily traded price on the NZX for Fonterra Units for each trading day between 2 – 15 May inclusive.

 General Manager – Trading Among Farmers, Aaron Jenkins, said farmer shareholders have a further week to confirm if they wish to participate in the Supply Offer before it closes at 5pm on 23 May. . .

At that price farmers who have more shares than they need will be tempted to sell their excess.

Cashing up surplus shares will be especially tempting for those whose supply and income were hit by drought.

Milk price down 2.1% in GDT auction

The trade weighted index was down 2.1% in this morning’s GlobalDairyTrade auction.

This was the second drop in a row after nine consecutive increases.

Prices were still well above the long term average.

 

The price of anhydrous milk fat was down.2%; butter dropped 12.4%; butter milk powder fell 5.1%;  rennet casein increased 3.7%; skim milk powder was down 2.8% and whole milk powder was down 1.7%.

 

 

Rural round-up

Bee decline worries unjustified says honey producer:

A New Zealand honey producer and exporter says there’s too much unjustified doom and gloom about the health of the world’s bees.

Reports of wide-spread bee losses and colony collapses in Europe, Asia and North America have raised the alarm about the survival of honey bees.

The European Union has recently banned a group of systemic neonicotinoid insecticides.

However, Airborne Honey managing director Peter Bray says global honey statistics show bees are actually doing well.

He says world honey figures show beehive numbers and honey production per hive are up, and world trade is increasing. . .

Taranaki recognised for riparian management:

Taranaki’s flagship riparian management programme, which has “gone the extra mile” in developing relationships with dairy farmers, has been recognised for its outstanding contribution to protecting the environment.

 The Taranaki Regional Council programme is a finalist in two categories of the Ministry for the Environment’s 2013 Green Ribbon Awards: the Caring for Our Water and Public Sector Leadership categories.

Environment Minister Amy Adams announced the finalists in 11 award categories last week. . .

Crusoe wheat variety set to make dough for break makers – David Jones:

When Robinson Crusoe was cast away on his tropical island he would have probably found good use for the breadmaking wheat that is his namesake, to aid his survival until rescue.

The promising eponymous milling variety, named after Daniel Defoe’s hero, could now be delighting growers and breadmakers alike and be the future foundation of the British loaf.

From deserted isle to Kent’s sparsely populated Romney Marsh, one bread wheat grower is planning for the variety to take a big slice of his farm this autumn. . .

Fonterra Tankers Get a School Milk Makeover:

Fonterra Tanker Drivers Mike Courtney, Ian McKavanagh and Jess Drewet with one of the new Fonterra Milk for Schools tankers.

From this week, Fonterra drivers will be hitting the roads in 14 brand new Fonterra Milk for Schools themed tankers.

Fonterra Tanker Driver, Jess Drewet, says the team is excited to get behind the new wheels.

“Not only are these completely new vehicles, they are displaying something of which our team is really proud. When you drive as much as we do, you get quite attached to your tanker, and the team can’t wait to get out on the roads and show the new ones off,” says Mr Drewet. . .

Agriculture extravaganza in Fielding:

Feilding’s Manfeild Park has become a sort of one stop shop for beef and sheep farmers this week.

Three farmer events that have been running for years in Manawatu are being rolled into a single four-day extravaganza.

The Aginnovation programme began on Saturday with Future Beef New Zealand, an event designed to encourage young people into the beef industry. . .

Argentine farmers expected to plant more wheat this coming season -

Argentina will plant more wheat this season than last year because of farmer-friendly adjustments to the government’s export policy and the bad luck that growers had last season with alternative crops such as barley, a key grain exchange said.

At a time of rising world food demand, the grain-exporting powerhouse can expect 3.9 million hectares to be sown with wheat in the 2013/14 season, up from 3.6 million planted in 2012/13, the Buenos Aires Grain Exchange said in its first wheat area estimate of the year. Planting starts next month.

“Our survey of growers shows a clear improvement in terms of intention to sow wheat,” the exchange said in a statement. “This improvement is due primarily to the poor experience that growers had with alternative crops (mostly barley) last season.” . . .

The Frankenchicken kerfuffle – Moon over Martinborough:

“I want us to raise chickens for meat,” CJ said. “Like proper farmers.”

“Seriously?” I said. “When you wanted to breed pigs for meat you fell in love with the pigs and ended up screaming, ‘I will never eat their babies!’ Remember?”

 “That was different. That was pigs.”

It turns out CJ had already arranged to pick up five meat birds from our friend Claudia. He was trading them for our olive oil. . .

Drought takes toll on milk production

The drought has taken its toll on milk production with Fonterra’s milk collection was down .5% in the first 11 months of the season and down 34.4% for April.

Milk collection across New Zealand is down 0.5 percent for the eleven months to 30 April 2013 compared to the same period last year, reaching 1,414 million kgMS collected.

The volume of milksolids collected is down season to date, due to lower monthly collections for February, March and April compared to the same period last season. Consistent rainfall across the country in April has helped to improve on farm conditions, but this has been too late to stop milk production falling below last season’s record levels as many suppliers have already stopped producing for the season. Milk collected across New Zealand for April was down 34.4%  on last season reflecting the impact of the recent dry conditions compared to the strong end to the 2011/12 season.

Our production is better than budgeted. We had a slow start to the season with a long, cold spring and early summer but then it warmed up and with irrigation compensating for lack of rain from early January we had good conditions for grass growth and milk production.

We’re also benefiting from the decision to get smaller and use sharemilkers.

It’s better for stock and staff as neither have to work as hard.

That’s paid off with better animal health, better production and the sharemilkers get a greater reward from the better returns.

Rural round-up

Red meat industry change afoot – Sally Rae:

”Band-aid solutions” might be needed to avoid potential problems in the red meat sector next season, but a long-term view is essential to finding the right solutions, Meat Industry Excellence chairman Richard Young says.

More farmers have gathered to establish a mandate for industry change and further meetings are scheduled in the North Island.

At a recent meeting in Feilding, attended by about 700 farmers, Alliance Group chairman Owen Poole said the industry was developing an improved model and and a decision on whether it would go ahead could be expected within two months, Farmers Weekly reported. . .

Making a difference for dairy women - Sally Rae:

Sue Peoples wants to help make a difference to women involved in the dairy industry.

Dr Peoples, a social scientist based at AgResearch Invermay, is leading the first phase of Project Pathfinder, an initiative aiming to build the leadership capacity of New Zealand’s dairying women.

The project, which recently gained a Sustainable Farming Fund grant of $180,000 over three years, will get under way in July. . .

Adapting agriculture to a changing climate - Dr Gavin Kenny:

For more than 20 years I have worked professionally on the “what ifs” of climate change, focused mostly on what it might mean for agriculture. I’ve done this work in New Zealand, Europe, the Pacific Islands and Asia. During that time I have experienced the progression from the hypothetical to real-world responses. Climate change, particularly as experienced through more frequent drought and flood events, is increasingly influencing what farmers are doing in many countries. It is not clear whether this is yet the case in New Zealand, but I suspect so.

With a record summer drought just behind us, and with negative and positive effects that will continue to unfold for farmers, it is relevant to ask: What if we get more frequent and intense droughts in the future? How might farming change and how might those changes affect wider society? . . .

Real Mix in Farm Manager Finalists:

The 11 finalists competing for the 2013 New Zealand Farm Manager of the Year title are split between contract milkers and farm managers – as well as age, experience, and farm size.

Judging begins next week for the finalists comprising four males and seven couples, and involves a two-hour farm visit covering financial planning, human resource and farm management. The final component of the judging, an interview, will take place in Wellington prior to the winners being announced at the 2013 New Zealand Dairy Industry Awards on May 24.

Winners in the 2013 New Zealand Sharemilker/Equity Farmer of the Year and New Zealand Dairy Trainee of the Year will also be announced and nearly $150,000 in prizes will be given away. . .

Fonterra Pilot Scheme to Give Farmers Milk Price Certainty:

Fonterra is piloting a new ‘Guaranteed Milk Price’ (GMP) scheme that will provide farmers with the opportunity to have more certainty in their milk price. The pilot will mean farmers can choose to lock in a milk price announced at the beginning of a season for up to 75 per cent of their milk supply.

Fonterra’s Managing Director of Group Optimisation and Supply Chain, Ian Palliser says the past few years have confirmed that volatility in commodity prices is here to stay.

“We recognise that every farming business is different. And while most farmers can live with the market volatility, there are times when some farmers would prefer more certainty as it would help them manage their own farming businesses,” Mr Palliser says. . .

Fonterra confirms supply offer dates:

Fonterra Co-operative Group Limited today confirmed that a Supply Offer enabling farmer shareholders to sell the economic rights of some of their shares will open on 2 May and close at 5pm on 23 May.

Farmer shareholders will have the opportunity to offer to sell the economic rights of up to 25 per cent of their minimum required shares (‘Wet Shares’) to the Fonterra Shareholders’ Fund.

The price farmers will receive for their economic rights (the “final price”) will be announced on 16 May. It will be calculated by reference to the average daily sales prices on the NZX for Fonterra Units for each trading day between 2 – 15 May inclusive.

Farmer shareholders will then have a further week after the final price has been announced to confirm if they wish to participate in the Supply Offer before it closes. . .

Not all schools want free food

Hone Harawira’s Bill proposing to provide food for all decile one and two schools will be debated in parliament soon.

It is a blunt instrument which will do nothing for hungry children in higher decile schools and provide food where it’s not needed and not wanted.

A school principal in Whangarei says a proposed law change aimed at providing meals for students in poorer schools could reinforce negative stereotypes. . .

Hora hora Primary principal Pat Newman said that may send a message that all parents with children at poorer schools don’t feed them properly.

He said it does not cost his school a lot to step in when it needs to, discretely offering breakfast and sandwiches to individual students in need. . .

The Press points out other problems with the proposal:

One difficulty is the sheer logistics of the proposal. Most schools are neither set up nor staffed to provide meals to pupils. One figure much bandied about during recent debate has suggested that 80,000 children go to school each morning without having had breakfast.

While that number has a whiff of the Ministry of Made-Up Numbers about it, even confined to decile 1 and 2 schools, Harawira’s proposal would be a large and time- consuming effort to get breakfast and lunch to all those deemed to need them.

But the main difficulty with Harawira’s idea is that it tackles the issue from the wrong end. Hungry children in school are a just symptom of a root cause – inadequate, negligent parenting and decision-making.

For the state to take over providing something as fundamental as proper meals will, if anything, only aggravate that root cause.

The more dud parents become aware that their children will be fed if they fail to do so, the more they will be inclined to abdicate the responsibility.

Providing a decent breakfast and lunch for a child is hardly an onerous or expensive task. Eggs on toast or cereal for breakfast, and sandwiches with a nourishing filling for lunch, are within the capacity of every parent. . .

It’s not the fault of hungry children that their parents don’t feed them and it is a problem which needs to be addressed.

But providing food for all low decile schools isn’t the best way to do it.

Fonterra is providing free milk for all schools that want it – some high decile schools choose to have it, some low ones don’t.

This targeted and voluntary approach, in conjunction with charities like Kids Can which provides food,  doesn’t address the problem of hopeless parents.

But at least it doesn’t waste food on schools which don’t need it, and gives it do children who do.

Opt in and targeting better than universal

NZEI is urging the government to vote for the bill to provide children in low decile schools with breakfasts and lunches.

This is a blunt instrument. It’s also an expensive and wasteful one.

Fonterra has offered all schools free milk and some have chosen not to take it because their children don’t need it or the staff think it’s too much work.

Allowing schools to opt in and targeting those whose pupils are most in need is far better than a universal approach which will be cost more and generate more waste.