Rural roundup

December 14, 2013

Storm-hit farmers feel heat - Annette Scott:

Repairs to wind-battered irrigation systems are progressing but for many Canterbury farmers being back on tap will come too late.

Delayed irrigation has reached crisis point and the economic consequences could rival last year’s drought.

The picture is grim for farmers whose irrigators require complicated rebuilds.

Cropping farmers in particular are counting lost dollars by the day because crops desperately need water. . .

Cottingley and Bradford wool firm spins a successful yarn – Chris Holland:

It used to be said that for woolmen ‘every silver lining has a cloud’ but that’s certainly doesn’t apply to Martin Curtis and his team at Curtis Wools Direct, the Cottingley-based wool merchants he runs with his brother Simon and which owns Howarth Scouring and Combing in Bradford.

Wool may be as old as the hills – and the scale of the processing that produced much of Bradford’s wealth is miniscule compared with the industry’s heyday – but optimism and evangelism about the qualities of this natural fibre and its commercial future dominate their thinking. . .

Raw milk all the rage - Laird Harper:

A milk revolution is bubbling up in Taranaki.

Touted as being a “powerhouse food”, raw cow’s milk keeps many vitamins, enzymes and probiotics often considered lost in the processing plant.

But it’s not a concept lost on Dolly’s Milk owners Peter and Margaret Dalziel, and Cindy and Kevin Death.

Hunting for something new, the group stumbled across the idea while flicking through a magazine.

And as they researched the rules and ways to safely distribute the product, they knew they had to get out in front of this fledgling industry. . . .

Raw milk option expands into South Canterbury – Jacqui Webby:

South Canterbury consumers looking for a choice in the type of milk they use will soon have another option.

Early next year, Timaru dairy farmers Stu and Andrea Weir, and son Mitch, will open a raw-milk outlet at their property in Fairview Rd.

The couple, who milk a herd of about 200 mainly friesian cows, have long been interested in the concept of fresh raw milk and were quick to initiate franchise discussions to open a Timaru outlet with Nelson-based Village Milk. . . .

Bumper Fonterra pay-out boosts farm values at auctions:

Fonterra’s bumper payout for dairy milk solids has underpinned the multi-million dollar sale of two large scale dairy conversion farms in Northern Hawke’s Bay.

The two farms sold for a combined value of more than $12.5million after some hectic bidding in the auction room of Bayleys Napier last week – with multiple parties bidding on each of the properties. Some 58 farmers, stock managers, accountants and rural banking specialists from across the Hawke’s Bay were in the auction room to watch proceedings.

Bidding on the 351 hectare Ben Alpin farm opened at $3.9million. After 16 bids from four potential buyers, the property sold under the hammer for $5.020million. . .

Synlait Milk expects to outperform financial targets:

Synlait Milk expects to outperform financial targets on the basis of a favourable product mix.

Current international dairy commodity price differentials are larger than usual, and continue to favour Synlait’s milk powder and AMF dominant product mix. The company expects that ongoing demand, particularly from China, will mean that this will be maintained for much of the current season.

While it is still early in the season, recent announcements also make it clear that the current season’s milk price is likely to be less than the company was expecting.

John Penno said that Synlait’s policy is to pay our contract suppliers a fair market price.  . .

Strong finish for Young Farmer at Rural Ambassador competition:

New Zealand Young Farmers Vice-Chairman Cam Lewis finished runner up at the recent trans-Tasman Rural Ambassador competition in Feilding, 6-8 December.

The top honour and a $5000 travel grant were awarded to Prue Capp, an equine dentist from New South Wales, and in third place was Samantha Neumann from South Australia.

Mr Lewis, a dairy farmer from Levin, keeps the kiwi success in this competition going strong. The 2012 winner was another Young Farmer member and 2013 ANZ Young Farmer Contest Champion, Tim Van de Molen.

Mr Lewis won the Royal Agricultural Society’s Rural Young Achiever Award at the RAS Conference in Christchurch earlier this year and was the only representation from New Zealand in the Rural Ambassador competition. The other six competitors were the top Australian state finalists. . .

And from the Farming Show:

 The Farming Show's photo.

Com Com gives Fonterra tick

August 16, 2013

The Commerce Commission has given Fonterra  a tick for its raw milk price.

This is the second of two annual reviews the Dairy Industry Restructuring Act 2001 (DIRA) requires the Commission to undertake. The Commission completed the first review in December 2012 on Fonterra’s Milk Price Manual.

The base milk price review focusses on the Commission’s assessment of the extent to which Fonterra’s 2012/13 base milk price calculation is consistent with the purpose of the milk price monitoring regime set out in DIRA.

“The Commission specifically considered the extent to which the assumptions adopted, inputs and process used to calculate the base price provide an incentive to Fonterra to operate efficiently while providing for contestability in the market for the purchase of milk from farmers, “ said Sue Begg, Commerce Commission Deputy Chair.

“The Commission’s view is that these statutory tests are largely met,” said Ms Begg.

The Commission has identified one assumption that does not appear to be practically feasible.  This relates to the assumed energy usage rates, which rely on data generated during peak capacity utilisation and therefore do not take account of variable plant utilisation across the season.

There are also assumptions that the Commission is unable to come to a conclusion on, given the information available to it at this stage. However, having regard to the direction and potential size of the impact these assumptions might have on the base milk price calculation, the Commission does not consider them to have a significant impact on the overall conclusion.
This draft report is being provided to Fonterra for comment. In addition, the Commission welcomes feedback from other interested parties on the draft conclusions and supporting analysis in this draft report. Any comments must be provided by 5:00pm on Thursday 29 August 2013. . .

In plain English this means the Commission has found the milk price to be fair which is what Fonterra has always said.


Rural round-up

January 7, 2013

Rabbit rise may bring 1080 response – Gerald Piddock:

Environment Canterbury’s annual count shows that rabbit numbers are on the rise in the Mackenzie Basin and Omarama.

The regional council monitors rabbit trends every year and the latest draft analysis showed a noticeable increase of rabbits in the Mackenzie Basin, eastern Mackenzie around Haldon Rd and in Omarama.

ECan’s biosecurity team leader, Brent Glentworth, expected there would be some large 1080 operations this summer, particularly on the eastern side of the Mackenzie, as land owners battle to keep rabbit numbers down. . .

UK biofuels influence NZ wheats:

European, notably UK, breeding programmes, growers at PGW’s agronomy group field day last week heard.

 Europe is normally a regular exporter of wheat, but three massive biofuel plants have created an extra 2mt of demand for wheat, preferably high starch soft milling types that maximise ethanol yield, Limagrain’s UK director of sales and New Zealand coordinator, Alastair Moore (pictured), explained.

“We’re seeing quite a drive to the soft wheat end and a lot of the new varieties recommended [in the UK] were in that category.” . .

Insecticide removal would hit crops hard – Gerald Piddock:

Seed and cereal farmers face a major risk to their productivity and profitability from the removal of organophosphate insecticides from the market.

Current control practices used by farmers, particularly during crop establishment rely heavily on organophosphates which are currently the subject of a review and re-regulation by the Environmental Protection Authority (EPA).

Organophosphate insecticides are used by farmers to control grass grub, one of the country’s most destructive plant pests. . .

Van der Heyden works till end:

OUTGOING FONTERRA chairman Henry van der Heyden will be using the next five months as a director to help execute the co-op’s strategy refresh.

Van der Heyden is defending his decision to stay on the board after relinquishing the chairmanship to John Wilson. He says the decision has been taken in the interest of the co-op. Some shareholders have questioned the decision.
Van der Heyden says he has always done what is right for Fonterra. . .

Kirkwood takes vote for council – Gerald Piddock:

Oamaru dairy farmer Greg Kirkwood is the new Fonterra Shareholders councillor for ward 32 in Southern Canterbury.

Mr Kirkwood was elected to the council ahead of Geraldine dairy farmer Ad Hendriks.

He takes over from Desiree Reid, who retired from the position by rotation.

Mr Kirkwood said he put his name forward for the Shareholders Council because he wanted to get involved more in the co-operative.

Raw milk health risks under review:

Since the 1950s, New Zealand’s commercial milk supply has been pasteurised – treated with heat to kill bacteria – and most of us have swallowed the official position, that untreated milk is potentially dangerous to drink.

But there’s a growing trend of consumers wanting their food in a natural state, and that includes milk. They say raw milk is not only safe, it’s better for you, and a major study is underway to see if they’re right.

Most of us buy our milk pasteurised and from a dairy or supermarket fridge. But for mums like Angela Jones that’s changing. She’s one of thousands of townies making a regular trek to a trusted farmer to buy raw milk at the farm gate. . .


Rural round-up

December 14, 2012

Food and beverage stars for NZ to hitch its wagon to – report – sticK:

There’s not that many reports you can sit down and study and go – uumm, interesting.

But Auckland-based Coriolis has done it (again), and their ‘Investors guide to emerging growth opportunities in NZ food and beverage exports’ is, and I don’t say this lightly, quite fascinating.

The company has deliberately taken its methodology and report-back from a (potential) investor’s point of view.

The simple objective was to find the next ‘wine’ – such as that fledgling industry existed 25 years ago.
Over 500 food & beverage items, based on export trade codes, were screened down to 25 candidates for stage II in-depth investigation. . . .

Strong Finish To Spring Selling Season:

Summary

Farm sales increase 9.8 per cent compared to October
Median $/ha price rose 11.9 percent compared to November 2011
After noticeable period of absence first farm buyers active in Waikato and Taranaki
Lifestyle property sales lift 24% compared to November 2011

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 25 more farm sales (+9.8%) for the three months ended November 2012 than for the three months ended October 2012. Overall, there were 281 farm sales in the three months to end of November 2012, compared with 315 farm sales in the three months to November 2011, a decrease of 34 sales (-10.8%). 1,417 farms were sold in the year to November 2012, 23.4% more than were sold in the year to November 2011. . .

Cheese first made at least 7,500 years ago – Maria Cheng:

Little Miss Muffet could have been separating her curds and whey 7,500 years ago, according to a new study that finds the earliest solid evidence of cheese-making.

Scientists performed a chemical analysis on fragments from 34 pottery sieves discovered in Poland to determine their purpose. Until now, experts weren’t sure whether such sieves were used to make cheese, beer or honey.

Though there is no definitive test for cheese, Richard Evershed at the University of Bristol and colleagues found large amounts of fatty milk residue on the pottery shards compared to cooking or storage pots from the same sites. That suggests the sieves were specifically used to separate fat-rich curds from liquid whey in soured milk in a crude cheese-making process. . .

Debt is good under some circumstances – Allan Barber:

After my column last week about meat industry debt levels, Keith Cooper, CEO of Silver Fern Farms, took me to task for incorrectly reporting the situation with Silver Fern Farms’ debt facility.

I stated that these expired in September 2012 and therefore the company was operating on a temporary extension. The correct position was that the debt facility was originally negotiated for two years from September 2010 and consequently due to expire in September 2012. This remained the position at balance date in September 2011. However in the 2012 annual report, the facility was stated as expiring on 31 December 2012. . . .

Farmgate raw milk sales to continue:

Farm gate sales of raw milk will continue and the amount that can be purchased is likely to increase, Food Safety Minister Kate Wilkinson said today.

Farmers will also be exempt from the current requirement to have a costly Risk Management Programme for farm gate sales of raw milk and will instead need to adhere to certain animal health and hygiene requirements.

“The current Food Act allows people to buy only up to five litres of raw milk at the farm gate to drink themselves or give to their family,” Ms Wilkinson says.

Consultation carried out by the Ministry for Primary Industries (MPI) on possible changes to rules for raw drinking milk sales attracted nearly 1700 submissions. . .

ANZCO embarks on group-wide energy management programme:

One of New Zealand’s largest exporters is set to save more than $2 million a year and enhance its global reputation as a sustainable producer through a company-wide energy management programme.

EECA Business today announced it would support the initiative over two years to help ANZCO generate long-term energy savings in its New Zealand plants.

With annual sales of NZ $1.25 billion, ANZCO Foods Ltd processes and markets New Zealand beef and lamb products around the world. The firm employs over 3,000 staff world-wide and has 11 meat processing plants in New Zealand. . .

Feedback sought about regulation of dairy herd improvement

The Ministry for Primary Industries (MPI) is looking for feedback on the rules surrounding the New Zealand dairy herd improvement industry.

The New Zealand dairy industry has been a world leader in herd improvement, and its ability to trace the performance of the national herd – through the dairy core database – has been central to that success.

Studies have shown that genetic gains through dairy herd improvement have accounted for about two thirds of the sector’s productivity over the last decade. . . .


New raw milk regs ok

November 15, 2012

When proposed changes to raw milk regulations were announced earlier this year Fonterra and many shareholders were less than impressed.

However, the proposals were just that and open to consultation which has produced changes most in the industry will accept as okay.

Primary Industries Minister David Carter today announced amendments to the Raw Milk Regulations, the rules by which independent milk processors can access raw milk from Fonterra.

“The Regulations ensure dairy processors can access raw milk when they are starting up and aim to support competition in domestic dairy products,” Mr Carter says.

“The changes follow an extensive consultation and review process on how best to achieve a fair and efficient dairy market in New Zealand.”

The key amendments are:

  • Large independent processors who collect a significant quantity of milk directly from farmers will have a three-season limit for accessing regulated milk;
  • The total quantity of milk available under the Raw Milk Regulations will be set at approximately five per cent of Fonterra’s milk supply, as provided for in the legislation;
  • A range of maximum quantities will apply to processors accessing milk under the Raw Milk Regulations in different months of the season to reflect the seasonal nature of milk production;
  • Processors who do not take much, or any milk, directly from farmers will be able to pay a fixed price for milk accessed under the Raw Milk Regulations and will not be subject to the “wash-up” process at the end of the season.

The aim of the changes was to foster competition without being unfair to Fonterra and I think that’s been achieved.


Fonterra opposes DIRA proposals

January 24, 2012

The government has opened consultation on its proposed response to reviews of Fonterra’s farm gate milk price setting and the Raw Milk Regulations.

Primary Industries Minister David Carter says comprehensive work by the Ministry of Agriculture and Forestry, with input from economic, regulatory and legal experts, has resulted in a set of preferred options for amendments to the Dairy Industry Restructuring Act (DIRA) and the Raw Milk Regulations.

The review recommends:

  • embedding Fonterra’s current milk price governance arrangements in legislation
  • requiring Fonterra to publicly disclose information about its milk price setting
  • introducing an annual milk price monitoring regime to be undertaken by the Commerce Commission

And:

The preferred option for the revised Raw Milk Regulations recommends:

  • a three-season limit for independent processors who source raw milk directly from farmer
  • an increase in the total quantity of milk available under the Raw Milk Regulations to approximately 5% of Fonterra’s milk supply, as currently allowed for in the DIRA
  • a range of maximum quantity limits for independent processors accessing milk under the Raw Milk Regulations in different months to reflect the seasonal nature of milk production.

Fonterra is far from happy and says foreign-owned processors will benefit  at the expense of  farmers and domestic consumers:

Fonterra Chairman Sir Henry van der Heyden said the proposed changes to Raw Milk Regulations won’t work and will have New Zealanders subsidising increasingly foreign-owned dairy processors that don’t sell milk in New Zealand and who send their products and profits offshore.

“The Government’s move to require more raw milk to be handed over to increasingly foreign-owned dairy companies operating in New Zealand will impose nearly $200 million of additional costs over the next three years alone and work against our efforts to reduce the price of milk in New Zealand,” Sir Henry says.

“That’s because not one of the six other major dairy processors supplies milk to New Zealanders,” he says.

“The proposed changes will see windfall profits head straight into the pockets of increasingly foreign-owned dairy co mpanies and will hinder, rather than help, New Zealanders get access to affordable milk.”

The DIRA was supposed to protect domestic consumers and competitors from Fonterra’s dominant position. It wasn’t supposed to protect foreign competitors.


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