Rural round-up

European farmers surprisingly upbeat – Gerald Piddock:

European farmers are surprisingly upbeat about the future of their industry despite the continent being still very much in a recession, Beef+Lamb chairman Mike Petersen says.

Speaking from Brussels, Mr Petersen said he expected to see “doom and gloom” as a result of the recession.

“I have been pleasantly surprised at the mood of the farming population over here. They are very optimistic about the future and quite optimistic about the coming season.”

Petersen has been in Europe, meeting with counterparts and discussing their expectations for the coming year. He outlined his observations in a Beef+Lamb conference call. . .

Water priorities come up trumps – Jon Morgan:

The elephant in the room analogy is becoming a bit overworked, but I like it. Lately, the elephant has been really showing off. In the debate about freshwater quality the elephant is nitrogen leaching.

It was brought into the room by conservationists a few years back but attempts to prod it into life largely failed. It just sat stinking in the corner.

But a few weeks ago Judge Craig Thompson of the Environment Court climbed aboard and hit it with a big stick.

The elephant reared back on its hind legs and let out an ear-splitting roar, loud enough to be heard in every milking shed and dairy factory throughout the land. . .

NZ Commodity prices rise 1.3% in October, led by wool, cheese:

New Zealand commodity prices rose for the third straight month in October, led by gains in wool and dairy products while aluminium fell.

The ANZ Commodity Price Index rose 1.3 percent last month with 12 commodity prices gaining two declining and three unchanged.

A slightly firmer New Zealand dollar meant the gain in the ANZ NZD Commodity price Index was a slightly lower 1 1 percent. . .

Fonterra’s Trading among farmers launches but I still don’t understand it – Milking on the Moove:

I’ve blogged about TAF before here and here. We now have a bit more information on how it will play out in practice. But to be fair, I still don’t really understand it and this view has been expressed by many observers in the media and the industry. It is not fully understood and some of the reason for this is Fonterra themselves don’t know exactly how the governance will work, as they are still undertaking a review.

My thoughts;

Will farmers sell some of their shares into the fund?
I think they will, there are lots of farmers who have very high debt levels, the drop in the forecast payout is making many farm budgets drop into the red. I think many of these farmers would sell 25% of their shares into the fund and use the proceeds to pay off debt.

The dividend portion of the shares is estimated to return net 4.2%-5%, farmers will be paying 7%-8% interest on their debt, so they make a greater return by reducing their debt.  . .

New director shows youth and wisdom
THE RISING average age of farmers creates succession problems not only for farms and orchards; it is also seen in the boardrooms of primary producer businesses.

That’s why Zespri’s newest director Nathan Flowerday is pleased an Agmardt scheme which helped him get elected to Zespri’s board will be extended to others. 

Flowerday was the successful candidate in 2011 for an associate board trustee position created by Agmardt on its own board to give young farmers or growers governance experience. He believes that experience gave Zespri voters the confidence in him to elect him in July this year to the Zespri board. 

As a result, he and Agmardt are urging other agribusiness organisations to pick up the idea of creating an associate board-membership position, or at least establish observer positions on their boards. . .

Record Early Entries in Dairy Awards

There’s been a record-breaking response to the number of entries received in the 2013 New Zealand Dairy Industry Awards, since entries opened just yesterday.

National Convenor Chris Keeping says 33 entries were received online at www.dairyindustryawards.co.nz yesterday – the first day people could enter the New Zealand Sharemilker/Equity Farmer of the Year, New Zealand Farm Manager of the Year and New Zealand Dairy Trainee of the Year competitions. . .

Babich Wines Look to Expand in Marlborough

The 96 year old New Zealand wine company, Babich Wines Limited, announced today the sale of their 50% share of the Marlborough winemaking facility, Rapaura Vintners Limited to Treasury Wine Estates.

Rapaura Vintners Limited, an integrated winery, packaging and warehouse facility has been invaluable for Babich over the last 12 years as they have continued to grow production and sales of their Marlborough wines.

Babich Wines will now look to build their own state of the art facility in Marlborough – a move that will give the family owned wine company full control over their future winemaking in the region, where over 80% of the company’s production comes from. . .

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