Rural round-up

Tourism reset would hurt agricultural exporters :

The Government’s proposal to reduce future international tourism visitor numbers post-COVID to concentrate on higher spending visitors may solve one problem but create others.

Research by Lincoln University’s Dr Rob Radics, Dr Muhammad Umar, and Associate Professor Anthony Brien, highlighted that most of our agricultural products delivered fresh to market are transported on passenger planes, and tourists contribute to the cost.

The drop in tourism numbers could push up transport costs to the point some businesses do not export at all and are put out of business.

Their work showed that before COVID-19 hit, there were 550 international flights into and out of New Zealand each week, which carried 80% of New Zealand’s overall export airfreight in their belly-holds, and that it was worth $10.8 billion in December 2019. . . 

A fillip for farmers from Fonterra’s milk-payment forecast – Point of Order:

In    a  timely   boost  to  the  rural regions,  Fonterra has raised its forecast milk payment to farmers for this season to match its previous record high  of  8.45kg/MS, as demand for dairy holds up while supply tightens.

The giant co-operative lifted and narrowed its forecast farmgate milk price range for the 2021/22 season to between $7.90 and $8.90kg/MS from the  initial $7.25 to $8.75  kgMS.

The midpoint of the range on which farmers are paid increased to $8.40 kg/MS, from $8 last  season.  That would match the previous record, paid in the 2013/14 season, and would result in almost $13bn flowing into regional New Zealand.

The  country is heading into its peak milk production period in late spring and output so far is below last season, constrained by poor weather and limits on expansion. Milk production is also soft elsewhere, because  of  poor weather and high feed costs. . . 

Log exports to peak before dropping more than a third within decade – Forsyth Barr – Nona Pelletier:

Major changes are looming for the forestry sector as the deluge of raw log exports fades amid dwindling supplies and demands increase from the building industry and other users.

An industry report by investment house Forsyth Barr suggests the mainstay of the industry, log exports, will peak and then drop by more than a third within a decade.

“Export volumes will peak by 2026 then decline as insufficient planting activity after the 1990s boom means total harvest volumes will fall,” report author and head of research Andy Bowley said.

“The use of wood domestically is undergoing a transformation through the use of trees to sequester carbon, power boilers and as a low carbon building material alternative.” . . 

Primary sector returns strengthen export-led recovery:

Farmers’ hard work in leading New Zealand’s export-led recovery from COVID-19 is being rewarded with high prices forecast for milk and very strong returns for meat, says Trade and Export Growth and Agriculture Minister Damien O’Connor.

Fonterra announced today a record predicted milk price of $7.90 to $8.90 for the coming season. The mid-point of $8.40 would match the previous record set in 2014. The announcement follows continuing high demand for NZ-grown meat.

“Our farmers and growers have been working hard maintaining their volumes and together, through the COVID response, we’ve been able to keep supply chains ticking and freight links open,” said Damien O’Connor.

“The resilience of all export sectors is vital to our ongoing economic strength. Just as we aim to have diversified export markets, we’re also focussed on growing all our export sectors.” . . 

Pāmu and Westpac NZ agree market- leading sustainability-linked loan :

Westpac NZ and Pāmu have signed New Zealand’s most comprehensive Sustainability-Linked Loan to date, also the largest in the agricultural sector, and the first involving a state-owned enterprise.

Pāmu, also known as Landcorp, is New Zealand’s biggest farming business. It will borrow $85m from Westpac NZ over three years. To incentivise continued improvement in sustainability performance, Pāmu will receive a pricing discount from Westpac NZ if it meets material and ambitious performance targets and pay higher interest costs if it fails to reach them.

It is the first Sustainability-Linked Loan in the agricultural sector to include a 1.5-degree Science-Based emissions reduction target that will be validated against global best practice. . .

Farm 2050 coalition names first five nutrient technology trial startups :

 Finistere Ventures and Innovation Endeavors today revealed the first five companies selected for the Farm2050 Nutrient Technology Trialing Platform, a dual-hemisphere agritech testing and validation platform. The Farm2050 Nutrient Trialing Platform aims to identify, validate and demonstrate at scale promising technologies in nutrient management and water contamination reduction across broad acre crops, horticulture and pasture-based dairy in collaboration with agritech investors, farmers, researchers and startup companies around the globe.

The innovators chosen for the first wave of trials in New Zealand include:

– ClimateAi, which uses AI to tackle climate risk across the food supply chain

– CropX, an established farm management platform with soil sensing and nitrogen monitoring solutions. . 

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