GlobalDairyTrade’s price index dropped 3.1% in this morning’s auction.
The volume traded was also down.
Federated Farmers says it’s not the government betting on the farm, but instead farmers making sound market decisions. This comes after Green Party co-leader, Dr Russel Norman, said the government has ‘bet on the farm’ with dairying being a ‘one trick pony,’ which is producing a lower tax take and jeopardising a budget surplus.
“Dr Norman is ill-advisedly attacking New Zealand’s most successful export industry,” says Andrew Hoggard, Federated Farmers Dairy chairperson.
“Primary exports are an increasingly large share of our merchandise export returns and dairy an increasingly large share of farm production.
“The signals from the market are that growing middle classes, especially in South Asia, are developing a sustained taste for dairy products, and New Zealand is a respected source of those dairy products.
“Our dairy farmers are rationally taking these market signals on board and not being diverted by the inevitable short term fluctuations, or in Dr Norman’s terms, ‘a bet’
“The reasons for the present market slippage are clear.
“We didn’t cause Ebola in West Africa and our dairy farmers didn’t invade Eastern Ukraine either, but these two disparate events have cost us hundreds of millions of dollars. That same risk would exist if we exported mobile phones or software.
“Yes, the world produced seven billion litres more milk last season in an exceptional run the world-over. While that put a lid on dairy price growth, sanctions following events in the Eastern Ukraine released some three billion more litres and now you’ve got Ebola too.
“No question this season is a poor one. It ranks down there with 2005/6 but that also means the many seasons around them weren’t too shabby. Seasons that have helped to make this country the third most prosperous on earth according to Legatum.
“Unlike the past, our guys have been saving the gains while investing into productivity and environmental improvements. The ASB reckons, according to NZ Farmer, that agricultural bank deposits over the year to the end of September totalled $7.2 billion.
“Within the past few weeks RadioLive’s Duncan Garner has been on-farm and said this after visiting one; “So a bit of a message to the Greens, this guy wanted to pass on a message to the Green Party that they spend hundreds of thousands of dollars on what they do with their waste, and I thought it was quite brilliant, actually”.
Andrew Hoggard however doesn’t take too much issue with Russel Norman that the dairy industry might to likened to a pony.
“If he insists that it is a pony he should acknowledge that it is a very strong pony, it’s a stayer and it can perform economic miracles for our nation that Dr Norman would do well to get acquainted with,” Mr Hoggard concluded.
|Season||Average Dairy Company total payout ($/kg milksolids)||Dairy Company payout (inflation adjusted)a|
|2003/04||$ 4.25||$ 5.34|
|2004/05||$ 4.58||$ 5.60|
|2005/06||$ 4.10||$ 4.83|
|2006/07||$ 4.46||$ 5.14|
|2007/08||$ 7.67||$ 8.51|
|2008/09||$ 5.14||$ 5.59|
|2009/10b||$ 6.37||$ 6.82|
|2010/11b||$ 7.89||$ 8.02|
|2011/12b||$ 6.40||$ 6.44|
|2012/13b||$ 6.18||$ 6.18|
Fonterra’s milk price payout for the immediate past (2013/14) season is $8.40 kg/MS.
Source: DairyNZ Dairy Statistics for 2012/13
a Weighted to give real dollar values using the Consumers Price Index for the end of the June quarter. Sourced from Statistics New Zealand; Excludes dairy company retentions and deduction for DairyNZ Levy.
b Average dairy co-operative payout (Fonterra, Tatua, Westland)
The Green Party doesn’t like dairying and it doesn’t like the government.
But neither farmers nor the government are betting on the industry.
Since National came to power in 2008 it’s introduced several measures to help business, foster trade and lower the burden of government.
Meanwhile farmers have got on with farming, accepting the reality that markets, the weather and various other factors beyond their control will affect the payout.
Last season we got a record high payout, this season will be much more modest but the medium to longer term outlook is still bright for dairying and the export income it earns for New Zealand.
Cheese-making success recognised - Dene Mackenzie:
Whitestone Cheese, of North Otago, was founded in 1987 as a diversification during the 1980s rural downturn and a series of crippling droughts.
Last night, the company won the Westpac-Otago Chamber of Commerce Supreme Business Awards at the 2014 OBiz awards ceremony held in Dunedin.
About 330 people attended the function which is held every two years.
Notes provided to the Otago Daily Times said Whitestone founder Bob Berry’s experience in livestock trading was quickly applied to cheese trading. . .
Alliance pool payment first in 3 years - Sally Rae:
Alliance Group farmer shareholders will receive a pool payment for the first time in three years after a better financial result.
The company has announced an operating profit, before a $7 million pool payment distribution, of $17.6 million for the year to September, up from $8.4 million last year.
Turnover increased from $1.38 billion to $1.46 billion, while after-tax profit increased from $5.6 million to $6.2 million. . .
Merino genetics focus breeds success - Sally Rae:
When Gordon Lucas’ parents bought Nine Mile Station, the local land agent commented that it ”wouldn’t be a bad stepping stone for the lad”.
”Here I am at the end of my career and I’m still on the stepping stone,” Mr Lucas quipped.
He was outlining the story of Nine Mile Pastoral Ltd to those attending the New Zealand Grassland Association conference, which was based in Alexandra last week.
As part of several field trips, including Ida Valley Station and Hills Creek Station, those attending visited Willowbank, near Tarras, an intensive irrigated finishing property run in conjunction with Nine Mile. . .
Mobile Milking System, Bureaucrats & Regulations – Milking on the Moove:
When I decided to actually build the mobile cowshed & process my own milk, I knew that the regulatory requirements would be the hardest part.
New Zealand trades on our food safety reputation. We need to protect that reputation. I’m aware that even small scale producers have the potential to put our whole reputation at risk too.
With this in mind, I delved into all the regulations that a mobile cowshed would have to meet.
The regulations for the farm dairy side of things are in a document named NZCP1.
People wanting to process milk will also need to know all the requirements of DCP1, DCP2, DCP3 & DCP4. . .
Clutha-Southland MP Todd Barclay congratulates the Gibbston community, landowners, and the Queenstown Trails Trust for delivering the $370,000 Gibbston River Trail which will join the Queenstown Trail as a part of the NZ Cycle Trail Great Rides network.
The Gibbston River Trail Upgrade was reopened today (8 November). Mr Barclay was presenting certificates to the landowners who provided easements to make the trail possible. . .
Grain growers will be heading into the next harvest with silos completely empty, and an emerging potential for shortages. This is according to a recent study published by the Arable Industry Marketing Initiative (AIMI).
David Clark, Federated Farmers Grain and Seed vice-chairperson, says this time two years ago there was a glut of wheat and barley available to end-users.
“That has now been obliterated” he says.
“Twenty-four months ago the market had a big surplus of carry-over stock heading into the end of the year.
“Last year we made a big dent in that surplus, but these latest figures show that it has now disappeared. . .
Building the next generation of Federated Farmers - Casey Huffstutler:
When it comes down to it, people are the key to our primary industry success and even survival. They are our most precious resource.
Our value recognised in the multiple organisations set up to promote and support the industry and its people. From education, to industry good, to insurance, to lobby organisations; New Zealanders are building a strong agri-community. NZ Young Farmers and Federated Farmers sit at the core of this; made up of the very farmers this community exists for.
The Waikato and Bay of Plenty regions, of which I have been a NZ Young Farmers Field Officer for nearing on four years, have a great working relationship with Federated Farmers Waikato. It is important to have cohesion between our young farmers and our farming leaders, to ensure we are supporting the next generation into the spotlight. . .
Connecting city folk with ‘what goes on behind the gate’ is just one of the objectives for the upcoming Farm Open Day to be held at the Lincoln University Dairy Farm (LUDF).
Following on from the success of last year’s inaugural event, the farm will once again open its gates to the public to showcase the operations of a commercial dairy farm and provide perspective on the broader scientific, commercial and logistical aspects of sustainable food production.
The event is organised by the South Island Dairying Development Centre (SIDDC) and Fonterra, and will include nine outdoor educational demonstrations and displays which take people on the journey of ‘turning sunshine into food’. A central marquee will offer information to the public, along with samples of a range of milk-based products, such as cheeses, yoghurt, milk drinks and ice creams. . .
New Zealand Government owned AsureQuality and PwC’s New Zealand and China firms are cooperating with COFCO, China’s largest agricultural and food products supplier, to continually improve China’s food safety and quality. All four parties signed a cooperation agreement to that effect on the side-lines of the 2014 Asia Pacific Economic Cooperation Summit in Beijing, China today.
Drawing on leading New Zealand and international food and agricultural models, the agreement formalises areas where AsureQuality and PwC will support COFCO in embedding best practice in food safety and quality across the food and agriculture industries. . .
Returning Officer Warwick Lampp, of electionz.com Ltd, has declared the final results of the 2014 elections for the Fonterra Board of Directors, Directors’ Remuneration Committee and Shareholders’ Council.
Shareholders voted to re-elect incumbent Directors John Monaghan and David MacLeod. They will be joined by new Director Leonie Guiney.
Leonie Guiney lives and farms near Fairlie where she is Director of four dairy farming companies. Leonie has previous experience as a Consulting Officer, Dairy Production Lecturer and has studied overseas co-operatives in the Netherlands and Ireland. Leonie was the 2014 winner of the low-input Dairy Business of the Year. . .
The Green Party wants to provide free food for all low decile schools, whether or not they want it.
Fonterra is already sharing the goodness of milk, delivering it free to any and all schools which want it.
Read the story not just the headline – Jon Morgan:
Milk not as good as we thought? Milk may do more harm than good – not quite the headlines to lift the confidence of dairy farmers.
Unfortunately, they and others like them have been seen in major newspapers, on TV news and on news websites around the world in the past week.
They come from a study by Swedish researchers that comes to the conclusion that drinking more than three glasses of milk a day may not protect bones against breaking, and may even lead to higher rates of death.
The study suggests certain types of sugars found in milk may increase inflammation and oxidative stress, which can damage body cells.
To the credit of some reports, they also added high up in the story the researchers’ comment that they could not prove “cause and effect” and much more research was needed before anyone would be advised to limit their milk consumption. . .
Dairy farm focus on cost-cutting - Dene Mackenzie:
Dairy farmers will focus on the parts of their business they can easily change as their income drops in the 2014-15 season, according to ASB chief economist Nick Tuffley.
In his quarterly economic forecasts, released this morning, Mr Tuffley said the firstthings farmers would look at were likely to be feed and farm maintenance.
Last season, farmers had incentive to increase production through additional feed and, generally, the feed price was of secondary importance to feed availability. That resulted in palm kernel imports rising by 400 million kg, or 29%, on the previous season, at an additional cost of $120 millon, he said.
”This season, in many cases extra feed doesn’t pay. Farmers may reduce the amount of feed they purchase or make what they do have go further.” . . .
Uruguay link still strong - Sally Rae:
Back in the 1960s, a young Enrique Larraechea, from Uruguay, visited the Robertson family in West Otago and bought a Romney ram.
Decades later, Mr Larraechea has returned, recently purchasing rams from Blair Robertson at the Merrydowns stud at Waikoikoi, and his uncle David Robertson, at the Aurora stud at Palmerston.
Buying from the Robertson family had become a ”very, very nice family tradition” over the years.
”I feel very much together with them … we have complete faith in each other,” Mr Larraechea, known as Kike, said.
In the 1960s, he travelled throughout New Zealand looking at sheep. While the rams in the north were ”very nice” and very refined, they were not what he wanted in a commercial sheep. . .
Speech to Fonterra UHT plant opening in Waitoa - Nathan Guy:
It’s great to be here today at the official opening of Fonterra’s new UHT milk processing plant.
This is a $126 million project which has been completed in just 12 months, and has created 100 new local jobs.
It’s a real vote of confidence in New Zealand’s dairy industry, which continues to be a major contributor to our economy. Dairy is our biggest single export earner.
Our farmers produce a quality product that ends up in over 100 countries around the world. The primary sector is the backbone of our economy that generates around $4 million an hour. This helps the Government get back into surplus and invest in things like schools, hospitals and roads.
As a Government we have an ambitious goal of doubling the value of our primary sector exports to $64b by 2025. . .
The Sheepmeat Council of Australia (supported by Meat & Livestock Australia), Beef + Lamb New Zealand and Organismo de la Unidad Nacional de Ovinocultores (‘the National Mexican Sheep Producers Organisation’) have signed a Memorandum of Understanding (MoU) on sheepmeat cooperation.
The MoU recognises that the sheepmeat industries of Australia, New Zealand and Mexico share the goal of building sheepmeat demand globally. There are also a number of other common objectives including animal health and welfare, food safety, environmental sustainability, and industry profitability.
Beef + Lamb New Zealand Director Andy Fox said there are considerable advantages to be gained by working together to further these objectives.
“The Australian and New Zealand sheepmeat industries are seeking to build relationships with producer organisations from around the world. The reality is sheepmeat faces strong competition in the marketplace from other protein sources. It is important the sheepmeat industry works together to promote our premium product,” Mr Fox said. . .
Lincoln University and Massey University are pleased to announce the appointment of Mark Williamson as chief executive officer of their joint venture, Agri One.
Mr Williamson was formerly domestic marketing manager at Solid Energy and has extensive management and marketing experience.
Agri One was set up in 2011 with a focus on the two institutions working together to create new market opportunities. It promotes research-led education to assist farming and agri-food industries and facilitates professional development courses, joint research proposals, and seminars and symposia in the area.
It also undertakes a brokering role to introduce agri-food businesses to academics at Lincoln University and Massey University. . . .
Fonterra’s Milk in Schools programme has been operating for more than a year.
Those schools which choose to participate get free, chilled milk.
Unlike the Bill before parliament which aims to provide free food for all low decile schools, the Fonterra programme is targeted and only those schools which want it, get it.