Rural round-up

Deal will change face of industry – Dene Mackenzie:

Silver Fern Farms aims to be debt free with money in the bank by this time next year if a deal to form a 50:50 joint venture with Chinese food giant Shanghai Maling gets shareholder approval.

Silver Fern Farms chairman Rob Hewett remained optimistic yesterday the deal would receive the required 50% shareholder support and the company is offering significant sweeteners to persuade shareholders to vote yes.

The deal would allow Silver Fern Farms to become unleashed, he said.

Mr Hewett’s presentation to a media conference was peppered with phrases such as ”turbo-charged” and ”compelling”. . . 

 

Shock waves from Silver Fern Farms will now pulsate through the industry – Keith Woodford:

Five months ago I wrote that whatever happened at Silver Fern Farms, it would be like an earthquake within the meat industry. Given that Silver Fern Farms is New Zealand’s largest meat company, and with the status quo unsustainable, it could not be any other way.

The offer that has now come forward from Shanghai Maling is remarkable. This offer, once regulatory approvals are received, will change Silver Fern Farms from being large but financially very weak, to being large and financially very strong.

Apart from mid-season working capital, Silver Fern Farms will be debt free and with cash in their war chest to ‘take it’ to their competitors. . . 

Alliance reaches out to Silver Fern suppliers – Dene Mackenzie:

Invercargill meat processor Alliance Group wasted no time yesterday in trying to woo disgruntled Silver Fern Farm suppliers after Silver Fern announced a joint venture with a Chinese company.

Alliance chairman Murray Taggart said it was important for New Zealand farmers to retain ownership of their industry and the best way to achieve that would be to supply Alliance as the only remaining major co-operative.

Alliance also muddied the water somewhat by saying it submitted a bid for Silver Fern before Silver Fern’s capital-raising process got under way as part of ongoing discussions with the Dunedin group. . . 

Beef and Lamb expects farm profits to rise – Dene Mackenzie:

New Zealand ”average” sheep and beef farmers are in for a profit lift and Beef and Lamb chief economist Andrew Burtt calls it positive news at a time when the economy would benefit from increased farm sector spending.

Beef and Lamb predicted the average sheep and beef farm would see its profit before tax lift to $109,000 this season – 9.6% more than last season but 3.1% below the five year average. . . 

Sheep meat marketing needs focus on premium – Simon Hartley:

Softening demand for sheepmeat in China and Europe should be prompting New Zealand to prioritise getting premium chilled lamb cuts in China, and to also look further afield to new Middle Eastern markets.

Softer overseas demand for New Zealand sheepmeat, particularly from China, had curtailed New Zealand sheepmeat producers’ returns in recent months, Rabobank animal protein analyst, Matthew Costello said in his recent report on the New Zealand sheepmeat industry.

While China’s imports had ”exploded on to the New Zealand sheepmeat export scene” in 2013, to become New Zealand’s largest sheepmeat trading partner, its own production had since grown to about eight times that of New Zealand. . . 

Large trade blocs good for NZ exports:

New Zealand’s refreshed priorities for international trade have been welcomed by ExportNZ.

The Government’s Business Growth Agenda on trade has been updated, with a focus on completing the Trans Pacific Partnership, achieving a free trade agreement with the European Union, and engaging more with emerging economies in Latin and South America.

ExportNZ Executive Director Catherine Beard said exporters welcomed the continued emphasis on TPP. . .

Swede test a first for NZ – Hamish Maclean:

The plight of Southern farmers last year has led to a first for New Zealand.

When 200 dairy cows died in Southland and South Otago and many more became ill, the cause – a naturally occurring compound in winter feed, swedes in particular, – could not be tested at any New Zealand commercial laboratories.

Now, commercial glucosinolate testing of plants is available in New Zealand, and that is good news for the dairy industry, Dairy NZ says. . . 

Farm prices hold up; MyFarm eyeing dairy opportunities – Fiona Rotherham:

(BusinessDesk) – Farm prices are holding up well on a drop in volume over the winter months, according to the latest Real Estate Institute of New Zealand rural farm sales data.

There were only three dairy farm sales recorded in the past month and the median sales price per hectare for dairy farms for the three months ended August fell to $26,906, compared to $35,304 for the three months ended July and $43,125 for the three months ended August 2014.

But the REINZ Dairy Farm Price Index, which adjusts for differences in farm size and location, rose by 17.3 percent in the three months to August, compared to the three months to July. . . 

Tests before tightening help protect farm fertility:

Soil tests should be the first step for farmers trying to managing budgets while maintaining pasture productivity.

Ballance Science Extension Manager, Ian Tarbotton, says keeping soils fertile is good insurance with pasture an essential feed source, but gut instinct or past experience won’t lead to good decisions on what to spend or save.

“Soil tests will show you what you have to work with and they are the best guide to decisions around a fertiliser budget. The last thing farmers want to do is to compromise future productivity, so understanding what nutrients are available now is the best basis for decisions on fertiliser budgets.” . . 

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