Rural round-up

February 5, 2016

Demand pushes ewes up to $200 – Annette Scott:

A shortage of sheep and recent pasture growth has seen ewe prices skyrocket against all odds at the South Island ewe fairs this past week.

With the dismal state of lamb prices and the dry start to summer, ewe fairs were not expected to fire this season.  

“I don’t know where the confidence is coming from. The processing companies are certainly not giving much confidence,” PGG Wrightson south Canterbury livestock manager Joe Higgins said. . . 

Pressure on NZ’s farmland discussed – John Gibb:

The challenge of achieving sustainability and growing pressure on New Zealand’s rural landscape were highlighted during a national geography conference at the University of Otago yesterday.

New Zealand Geographical Society president Emeritus Prof Harvey Perkins, of Auckland University, and Prof Eric Pawson, of Canterbury University, gave a joint keynote presentation on New Zealand ‘‘going global”.

They also focused on ‘‘the tensions of rapidly shifting external relationships and the remaking of domestic rural landscapes”. . . 

Fonterra Introduces Market-Linked Price for Organic Milk:

The success of Fonterra’s organic business has prompted the Co-operative to introduce an independent organic milk price linked to market returns for organic products.

From June 2016, organic milk payments will reflect the performance of the organics business. Organic farmers currently receive a fixed premium together with the conventional Farmgate Milk Price for their organic milk supply. Organic farmers can choose to move to the new payment approach or stay under the existing payment system. . . 

TPP will help remove regulatory barriers:

The main benefit for the deer industry from the Trans-Pacific Partnership (TPP) agreement will be the ability to challenge any potentially unfair regulations imposed by importing countries.

“Regulatory barriers can sometimes do more to impede trade than tariffs and quotas. Under the TPP, there will be an independent disputes mechanism that will allow our exporters to appeal regulations in importing countries they believe are unjustified or unfair,” says Deer Industry NZ (DINZ) chief executive Dan Coup. . . 

Red meat sector welcomes signing of the Trans-Pacific Partnership (TPP) Agreement:

The signing of the Trans-Pacific Partnership (TPP) Agreement today in Auckland is a significant step towards reducing the amount of tariff and non-tariff barriers on New Zealand red meat exports, according to the Chairmen of Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA).

Trade Minister Todd McClay signed the TPP Agreement today with the 11 member countries, including from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, the United States and Vietnam. . . 

He’s farming again after drought – Alan Williams:

David Hyde is a happy farmer who credits his positive attitude for coming through the north Canterbury drought still loving being on the land. He told Alan Williams how he coped by adapting his usual farming practices to meet the challenges.  

David Hyde says he can start farming again after January rain ended the severe and long-running drought on his Scargill Valley farm in north Canterbury.  

The lucerne that had browned off by late last year has raced away in the last few weeks and will soon be cut for balage – something not normally expected in early February in north Canterbury. . . 

Horticulture Welcomes TPP Signing:

New Zealand’s peak body for commercial fruit and vegetable growers, Horticulture New Zealand, has welcomed the official New Zealand signing of the Trans Pacific Partnership agreement today.

Horticulture is New Zealand’s fourth largest export earner, sending fresh and processed products to more than 120 countries, valued at more than $2.5 billion every year.

The estimated saving for nine key product lines (kiwifruit, apples, avocado, buttercup squash, capsicum, cherries, onions, potatoes and vegetable juices) is just over $25 million a year for the growers now exporting these products to Japan, the USA and Vietnam. . . 

Kiwifruit winner in TPP Agreement:

The Trans-Pacific Partnership (TPP) Agreement will generate significant value for the New Zealand kiwifruit industry and Zespri welcomes the signing of the Agreement today in Auckland.

Zespri Chief Executive Lain Jager explains the TPP will eliminate tariffs on kiwifruit exports into all 12 Asia-Pacific nations when it comes into force, with the biggest impact to be seen in Japan.

In 2014, the industry paid over $15 million in tariffs into Japan which is Zespri’s largest country market . . 

World’s largest fruit trade show shines spotlight on Kiwi ingenuity.

The world’s fresh produce industry is gathering in Berlin this February to showcase its wares as well as discussing global trends in fruit and vegetable production and consumption.

Among them will be New Zealand’s leading horticultural producers and the creators of some world-leading Kiwi technology.

Fruit Logistica 2016 is a trade fair with a global scope. It provides an excellent opportunity for growers and equipment manufacturers to get in front of the European market, which takes over half a billion dollars of our horticultural exports every year. This year’s exhibitors include Zespri, Plant & Food Research, Wyma, BBC Technologies and Compac. . . 

Exciting Mānuka honey scheme launched:

A new initiative to boost the mānuka honey industry in Northland and provide educational and employment opportunities has been launched today at Northland College by Māori Development Minister Te Ururoa Flavell, Education Minister Hekia Parata and Primary Industries Minister Nathan Guy.

The Mānuka Planting Initiative at Northland College is part of the Tai Tokerau Northland Economic Action Plan which was launched this morning.

Mr Flavell, who is also the Associate Economic Development Minister, says the initiative will help prepare and upskill unemployed adults living in Kaikohe. . . 

Aotearoa Fisheries appoints new directors to Sealord:

Aotearoa Fisheries Limited is making changes to its appointed directors to Sealord Group Limited in order to have a complete alignment of its appointees with its own board. Aotearoa Fisheries owns 50% of Sealord on behalf of all Māori, and as such appoints half of the Sealord board of directors.

As part of the recent Maori Fisheries Act review Iwi expressed a strong desire for the Aotearoa Fisheries Limited appointed Sealord directors to come directly from the Aotearoa Fisheries Limited Board. Aotearoa Fisheries Limited Chairman Whaimutu Dewes said these changes will give effect to this desire. . . 

Dairy Awards Entrants in the Spotlight:

Entrants in the 2016 New Zealand Dairy Industry Awards are being put through their paces, as judges deliberate who the first regional winners will be.

Judging is currently underway in the 11 regional competitions of the 2016 New Zealand Share Farmer of the Year, New Zealand Dairy Manager of the Year and New Zealand Dairy Trainee of Year competitions.

More than 450 people entered the awards, with the first of the regional winners to be announced in Taranaki on March 4. . . 

Brancott Estate and BlueChilli seek the next big idea in wine tech:

Brancott Estate revolutionised the wine industry when they pioneered Marlborough Sauvignon Blanc in 1975. Now they are looking for the next pioneer in the wine industry with the announcement of winexplorer, an innovation challenge designed to revolutionise the way wine is enjoyed.

“When we decided to plant Sauvignon Blanc vines in Marlborough in 1975, we created one of the world’s most popular wine styles and turned New Zealand into one of the world’s premier wine growing regions. Now we are looking to change the wine world again by identifying ideas that will fundamentally change the way people enjoy wine.” says Patrick Materman, Brancott Estate Chief Winemaker and a winexplorer judge.

“Whether it’s an idea about how people choose what wine to drink, or how they share that wine with their friends, if it’s big, bold and revolutionary, then we want to hear it.” . . 

Wine Flight to take off:

More than 60 of the world’s most influential wine media, trade and sommeliers will enjoy a unique “Wine Flight” today thanks to Air New Zealand and New Zealand Winegrowers.

Two Air New Zealand Q300 aircraft are scheduled to take off from Blenheim this afternoon and cruise at 11,000ft, taking in spectacular views of some of New Zealand’s best known wine regions, including Marlborough, Nelson, Martinborough/Wairarapa, Hawke’s Bay and Gisborne.

On board the VIP passengers will enjoy wines from some of the regions they’re flying over, including a Nelson Albariño, a Martinborough Pinot Noir and a Hawke’s Bay Syrah. . . 


Rural round-up

February 4, 2016

Federated Farmers welcomes TPP signing:

 

Federated Farmers welcomes today’s signing in Auckland of the Trans Pacific Partnership (TPP) agreement as a significant milestone for the New Zealand economy and a positive deal for the agriculture sector.

Federated Farmers President Dr William Rolleston says the agreement may not have delivered everything the sector desired, but the scale and its importance to New Zealand is undoubtedly profound.

“As a founding member, the signing of the latest TPP agreement introduces another chapter in our proud history as a trading nation,” he says.

“For the primary sector, the TPP offers diverse opportunities not only for agriculture but for future generations of New Zealanders and their prosperity. You only have to look at the current state of dairy prices to realise the vital importance of opening up new export markets and ensuring a level playing field for New Zealand exporters. . . 

Quota allocations suggest change in balance of industry power – Allan Barber:

The release of the 2016 quota allocation which Alan Williams analysed in detail (Farmers Weekly 11th January) show some considerable shifts in tonnage entitlements between the major meat exporters. The quota is allocated as a percentage of the total allowable quota for shipment to the EU for sheepmeat and USA for beef during a calendar year; in the last two years New Zealand has only filled around 75% of the EU quota and 90% and 98% of the USA beef quota.

This shortfall, especially for sheepmeat, has been a result of the lower lamb kill, economic conditions in Europe and the availability of China as an alternative market eager for product at a competitive price. In 2014 China also took large quantities of beef. . . 

Cattle operated drinking trough:

A new trough that allows cows to pump their own water as they drink could be the answer to keeping stock out of the country’s rivers and lakes, a company says.

Beef cattle roaming in waterways] have hit the headlines in the past week.

Veterinary equipment company Shoof International, which is the importer of the new pump, says it could offer a solution.

Company group sales manager John Stubbs said because it was operated by the animals there was no need for electricity or other mechanical means.

The pump could supply enough water for up to 50 stock. “[It ] operates from the animal’s nose actually pushing on a lever as they drink water from the bowl. . . 

A2 cows are the future – Keith Woodford:

Towards the end of 2015 there was a massive re-assessment of A2 milk on the New Zealand and Australian stock exchanges. The shares of ‘The a2 Milk Company’ (abbreviated hereafter to their NZX code of ATM) closed the year at almost four times their price back in May, and with market capitalisation at $NZ1.35 billion.

For a few heady hours the capital value was close to 1.7 billion – more than Trade Me and almost double The Warehouse. Since then the shares have settled back somewhat, but still showing a three-fold gain from 12 months earlier.

In essence, the drive was fuelled by several major Australian institutional investors building their stakes, and then hundreds of smaller investors climbed on board. This was in response to ongoing good news stories from ATM, based on sky rocketing sales of infant formula in Australia and China, with this news particularly well reported in the Australian media. . . 

Fishing for a complimentary use of fire reservoir ponds – Peter Kerr:

Years ago for a farm management report at Lincoln University, I wrote a tongue-in-cheek plan around the integration of goldfish in troughs on dairy farms (we’d spotted the use of such technology to help keep the troughs clean).

Well here’s a huge expansion on this idea, one that’s taken my fancy…this time utilising water ponds kept on hand by forestry companies in case they ever need to fight a fire.

(Check out the story here in last year’s Otago Daily Times)

Ernslaw One started with an experiment in one of its Maniototo forest ponds, growing koura, or freshwater crayfish, and it has been such a success, it is going to expand the programme around some of its 2000 ponds spread throughout Southland and Otago.  . . 

New Zealand wine industry financial metrics remain sound:

Financial benchmarking survey shows industry resilience

The New Zealand wine industry continues to show sound financial metrics in 2015 on the back of profitability in all but the smallest wineries and stable or increased gross margins across the board, according to the tenth annual financial benchmarking survey released today by Deloitte.

Vintage 2015 tracks the financial results of wineries accounting for nearly 40% of the industry’s total wine production by volume. Survey respondents have been categorised into bands according to revenue to assist comparison within the industry. . . 

Help cows chill out this summer:

With the current El Niño weather pattern bringing heatwave conditions to many parts of the country, it’s important to ensure cows avoid heat stress and closely monitor cow health.

As temperature and humidity levels rise this summer, farmers should take steps to ensure stock stay cool and where necessary put in place a plan help prevent facial eczema.

“These conditions also encourage facial eczema, so farmers are reminded to monitor spore levels in your area, talk to your vet and put in place a prevention plan to suit your farm situation.”

“When it comes to high temperatures this summer, put simply a cool cow is a happy cow,” says DairyNZ animal welfare team manager Chris Leach. . . 

Farmers looking for environmentally friendly solutions:

Despite recent bad press of a select few dairy farmers’ poor environmental practices, New Zealand farmers are showing an increasing interest in finding environmentally friendly farming solutions, according to Frizzell Agricultural Electronics General Manager Alastair Frizzell.

Frizzell have supplied farmers with solar powered water pump systems for the past five years and have noticed a steady increase in demand as farmers search for more sustainable ways to farm.

“We’re getting more and more calls from farmers who genuinely care about implementing sustainable farming practices,” Alastair said. . . 

How a huge dairy is solving a major pollution problem – Beth Kowitt:

Hint: The secret ingredient comes from cows.

Though city dwellers may not realize it, agriculture is a big source of carbon emissions. That’s because of livestock’s production of methane, how manure is handled, and soil management (something as simple as tilling the soil releases greenhouse gases). Dairy geniuses Mike and Sue McCloskey, partners in one of the country’s biggest dairy operations, have come up with an elegant approach to tackling several of these problems at once in the hopes of creating a zero-carbon footprint dairy farm. At the heart of the operation: a process that turns their dairies’ tons of cow manure into natural-gas fuel. Here’s how it works. . . 

 

 


Rural round-up

February 3, 2016

Booklet kicks off Fonterra structure review – Hugh Stringleman:

Fonterra’s farmer-shareholders have received a preliminary booklet on the co-operative’s governance and representation, raising many questions but not providing answers.  

It begins a five-month journey to a revised structure more appropriate for Fonterra’s size, complexity and global ambitions.  Farmer-shareholders will be expected to contribute to the review and vote on the final proposal in May. . . 

Rabobank announces new head of Food & Agri Research:

Rabobank Australia & New Zealand Group has announced the appointment of Tim Hunt as new General Manager of its Food & Agribusiness Research (FAR) division.

Mr Hunt takes on the role after five years with Rabobank in New York, where he served in the international position of Global Strategist – Dairy.

In his new role, Mr Hunt will lead Rabobank’s highly-regarded food and agri commodities research team – comprising 10 specialist analysts – in New Zealand and Australia. . . 

Alliance drafter has eye for winner – Sally Rae:

Warwick Howie received a little good-natured ribbing when he won the Paddock to Plate competition at the recent Otago-Taieri A&P Show.

Mr Howie, a drafter for Alliance Group, laughed that he had ‘‘copped a bit of flak” following the victory.

The competition, which attracted 41 entries, has become an annual fixture at the show, with proceeds going to the A&P Society. . . 

Course already tidy for Legends – Sally Rae,

When it comes to maintaining the Tokarahi golf course, greenkeeper Marty McCone has the same philosophy as for his farm – he likes it tidy all the time.

So preparing for this month’s PGA Legends Tour, which is returning to Tokarahi for the second year, did not require an extraordinarily massive effort.

‘‘I try and keep the course up to speed all the time. There’s a lot of little things you do to have it really tip-top,” Mr McCone said. . . 

Synlait revises milk price forecast to $4.20:

Synlait Milk has revised its forecast milk price for the 2015 / 2016 season from $5.00 per kgMS[1] to $4.20 per kgMS.

Chairman Graeme Milne said the revision is driven by the sustained low global commodity prices since September 2015, and a view that the recovery will be slower than anticipated.

“Our previous forecast of $5.00 kgMS expected prices to recover somewhat by this stage in the season, however this hasn’t happened and our revised forecast reflects this,” said Mr Milne. . . 

World Wetlands Day celebrated:

World Wetlands Day is a chance for New Zealanders to find out more about some of the country’s most important natural treasures, Conservation Minister Maggie Barry and Associate Conservation Minister Nicky Wagner say.

To mark the day the Department of Conservation has released a new online resource,Our Estuaries, to help people explore and look after the wetland environment.

“New Zealand has more than 300 estuaries, and they are home to a wide range of native plants, fish and birds,” Ms Barry says. . . 

Rethink needed over dairy farm planting incentives:

The cost and benefits of planting trees to help mitigate environmental effects of dairy farming need to be shared by us all for it to succeed, a new study says.

Evaluation of an agri-environmental program for developing woody green infrastructure within pastoral dairy landscapes: A New Zealand case study says Government incentive programs are ineffective in overcoming barriers to planting such as the higher cost and slow growth of native plants, and the perception of planting being of little direct benefit to farmers’ operations.

Lead author, Lincoln University Landscape Ecology Senior Lecturer, Dr Wendy McWilliam, says the Government and the dairy industry need to work closely together to develop and maintain a landscape-scaled woody vegetation network on both private and public land. . .

Forestry show NZ way to better safety:

A sharp drop in forestry deaths and serious injuries after a massive safety overhaul in 2014 shows what can be achieved when an industry joins together to make improvements, the Business Leaders’ Health and Safety Forum says.

The fall is welcome and sets an example for other industries to follow, says Forum Executive Director Francois Barton.

“Forestry has shown us some of the things that need to be done to bring down high fatality and serious injury rates in an industry,” Francois says. . . 

Good Progress – But More Work to Do to Make Forestry Safe:

A reduction in deaths and serious injuries in forestry since 2013 is encouraging but there is more work to be done yet, the Forest Industry Safety Council (FISC) says.

WorkSafe figures show serious injuries halved to 78 in 2015 from 160 in 2013, FISC National Safety Director Fiona Ewing says.

“The trend is going in the right direction but we can’t rest on our laurels. Three forestry workers died in 2015. That’s well down on the 10 who died in 2013 but it’s up from just one in 2014.. . .

Irrigation scheme loan approved:

An $8 million loan from the Selwyn District Council means design of stage two of a multi-million dollar irrigation scheme can go ahead.

The council approved the loan to Central Plains Water last month, with the money expected to transfer over next week.

But a community group told RNZ News rate payers should not be lending money to fund a private shareholder scheme. . .

Ruataniwha Dam: Investor mix still being finalised:

Hawke’s Bay Regional Council’s investment company (HBRIC) says work on getting farmers to sign up to buy water from the proposed Ruataniwha Dam is on hold until the project’s investor mix becomes clearer.

HBRIC has been looking for institutional investors to put money into the dam since Trustpower and Ngai Tahu pulled out in early 2014, saying the risks surrounding the dam were too high and the returns too low.

The company said it had countersigned contracts for 31 million cubic metres of water with a minimum of 45 million cubic metres needed to be sold to make construction financially viable.

It said finalising the investor mix for the Ruataniwha Dam was its current focus. . . 

Global slump in fert prices benefits NZ farmers:

New Zealand farmers stand to benefit from significant savings on their farm nutrient inputs with Ballance Agri-Nutrients’ latest round of price reductions, effective 31 January.

The price review sees urea drop $50 to $525, DAP reduce $25 per tonne, sulphate of ammonia by $15 and potash by $10. These changes will flow through to product blends.

Ballance CEO Mark Wynne says the move comes on the back of a global slump in fertiliser prices, driven by strong supply and soft demand. . . 

Lowest urea price since 2007:

Farmers stand to benefit from a $50 per tonne saving for urea from 1st February, when Ravensdown will drop its prices.

Chief Executive Greg Campbell says he is pleased that Ravensdown is again leading on a price reduction for farmers who are facing increasing costs in many aspects of their business whilst their returns are under pressure.

“We said it not long ago, with our recent superphosphate cap,” Greg says, “that we are about delivering all-year value to our shareholders, and we’re demonstrating it again with urea and other products.” . . 


GDT drop 7.4%

February 3, 2016

Only the optimistic were expecting an increase in the GlobablDairyTrade price index but even the pessimistic would have been disappointed with the 7.4% drop.

gdt3216

gDt3.2.16

 


Rural round-up

January 29, 2016

Hard to see where sheepmeat solution will come from – Allan Barber:

Not surprisingly farmers are dissatisfied with the state of the sheepmeat market. The impact of drought has brought about a near 20% increase in the kill for the first quarter in a season where the full year lamb kill is forecast to be 1.7 million lambs below last year.

Consequently this season, already characterised by a falling schedule, will come to an early finish. Meat processors will need to manage their capacity and seasonal plant closures very carefully if they are to avoid incurring unwanted costs. From the farmers’ point of view, uneconomic prices for lambs are accompanied by a lack of killing space for ewes, of which there are plenty waiting for capacity to free up. . . 

Another tough season ahead for farmers:

DairyNZ chief executive Tim Mackle says the on-farm cash income of farmers from all milk production this season will be under $4 per kgMS as a result of today’s news from dairy co-operative Fonterra that it is dropping its forecast Farmgate Milk Price to $4.15 per kgMS.

“That’s because some extra Fonterra payments for this season are shifting forward out of the 2015/16 season into 2016/17. Very little was carried over from 2014/15.

“This will have ongoing effects on farmers’ cashflows, their business equity and their ability to keep managing debt. The reduced milk price announcement today means our industry is facing a reduction in dairy revenues by around $800 million. That means $67,000 less in cash revenue for the average farm producing 150,000 kgMS. . . 

Farm scarce wildlife to take profits from poachers – Stephen Franks:

Cheaper DNA identification could soon end lucrative illegal trading in protected New Zealand wildlife. All it needs are some careful law changes. Maori could once again routinely feast on (farmed) kereru, without risk to wild populations.

Current law prohibits buying and selling threatened species. That is meant to prevent profiting from poaching. Illegal supply to meet legal commercial demand could strip wild breeding populations. But the prohibitions perversely increase the scarcity value that makes poaching lucrative.

Now DNA technology can cheaply and quickly identify the family of individuals in a population. It could tell which are descended from an authorised commercially bred line and which are from the wild population. . .

New Zealand wine exports reach record $1.5 billion high:

New Zealand wine exports have reached a new record high of $1.54 billion for the 2015 year, up 14% on 2014 according to New Zealand Winegrowers.

‘The new record level of wine exports is an outstanding achievement for New Zealand wine exporters and testifies to the strong global demand for our wines,’ said Philip Gregan, CEO of New Zealand Winegrowers.

New Zealand wine is exported to more than 90 countries, and is New Zealand’s 6th largest export good. . . 

Man plans tractor trek after wife’s death:

Ten vintage tractors will travel the length of New Zealand next month to raise awareness and money for Hospice New Zealand.

Auckland man Phil Aish came up with the idea after the death of his wife Janice 15 months ago.

The Tractor Trek will begin in Bluff on 22 February and end almost a month later on 18 March in Cape Reinga.

Mr Aish said some tractors had been bought in Southland and some were being freighted to Bluff before the big trip. . . 

Purple haze proves a hit – Sally Rae:

Blake Foster has contemplated putting a warning sign on State Highway 80 that reads ‘‘caution, purple distraction ahead”.

For visitors to the Mackenzie district can now stop and smell the lavender – all 99,000 or so plants of it.

Situated on the Mt Cook highway, New Zealand Alpine Lavender is the largest certified organic lavender farm in the southern hemisphere. . . 

Wool Eases Slightly:

New Zealand Wool Services International Limited’s C.E.O, Mr John Dawson reports that the combined North and South Island wool auctions saw targeted buying with some categories firm to slightly dearer and others marginally easier.

Of the 19,800 bales on offer 93.7 percent sold.

The weighted indicator for the main trading currencies remained similar to the last sale on 21th January, softening by 0.23 percent. . . 

Beef + Lamb New Zealand appoints new CEO:

Beef + Lamb New Zealand has appointed Sam McIvor as its new Chief Executive Officer. He will also have the role of CEO of the New Zealand Meat Board.

Beef + Lamb New Zealand Chairman James Parsons said McIvor is an experienced CEO who brings a range of strategic thinking and management experience to support both organisations’ work for sheep and beef farmers, and the broader sector.

McIvor is currently the Group General Manager Farm Operations at Ospri and he has held the roles of CEO Preston Corp Ltd and CEO of New Zealand Pork. . . 


Rural round-up

January 28, 2016

Rural to benefit:

Rural fire chief Mike Grant hopes the intentions outlined in Fire Service reform documents become reality.  

Grant, the principal rural fire officer for the Southern Rural Fire Authority, said much of the detail was unknown because it had still to be discussed by Cabinet but there was a consistent message on how the new management entity should operate in the review document, submissions and analysis. . . 

Dairy farming best choice for Dairy Woman Network local co-convenor

Matamata sharemilker Suzie van Heuven could not imagine going back to working in town.

The Dairy Woman Network (DWN) co-convenor for the East Waikato group is hooked on dairy farming.

That might not be surprising seeing she grew up on a farm in Waitoa except for the fact that her high school career ambition was to be a vet or a cop.

But while waiting to be old enough to apply for the police force she dabbled in the dairy industry and by 2011, had progressed to farm manager. During that time she was involved in the Ngarua Young Farmers club, where she met her future husband, Alex. . . 

Despite Expected Milk Price Correction, 45 Cent Drop is a Sobering Blow to Farmers:

Fonterra Shareholders’ Council Chairman, Duncan Coull, said that today’s announcement of a 45 cent drop in the 2015/16 forecast F from $4.60 kg/MS to $4.15 kg/MS, is one that will further amplify the effects of the current low milk price environment on Farmers and their businesses.

Duncan Coull: “Farmers are very aware that this is a global story which is now having a significant local effect. Strong supply out of Europe coupled with flat demand is driving market sentiment as evidenced by the GDT results. . .

More moo woo – Alison Campbell:

Once I started paying attention to the woo around milk I realised how much of it there is. And how ready people are to accept it.

I’ve written about the notoriously non-scientific Food Babe before. Someone with a high pain threshold could probably manage a daily blog post on this young woman and the way she manipulates opinion, and sometimes sells the very things she inveighs against… But I digress!

Today I noticed she’s shared a link about how drinking milk encourages the development of osteoporosis. I was mildly suspicious about the source (‘healthy-holistic-living.com) but before taking a look, I skimmed the comments. Oh dear. . . 

New Science Challenge to boost land productivity and the environment:

Science and Innovation Minister Steven Joyce today launched the Our Land and Water National Science Challenge, which aims to enhance primary sector production and productivity while maintaining and improving land and water quality.

The National Science Challenges are dedicated to breaking new ground in areas of science that are crucial to New Zealand’s future.

“From an economic standpoint they don’t come much more important than this,” Mr Joyce says.  “There is increasing confidence that new agricultural tools will be able achieve both these crucial objectives for New Zealand.  The job of this challenge is to use science to accelerate the development of these tools.” . . 

Welfare of horses and donkeys the focus of a new code:

New minimum standards and best practice guidelines for the management of domestic horses and donkeys have been developed in a new code of welfare.

The new code comes into effect on Thursday (28 January 2016) and includes standards for equine management, food and water requirements, handling, training and equipment, husbandry practices and equine health.

The code has been developed by the National Animal Welfare Advisory Committee (NAWAC) and applies to horses, ponies and donkeys and their hybrids kept for any purpose including those kept as companions (pets), for breeding, sport, entertainment or as working animals. The code also applies to foals and any horse captured from the wild. . . .

Retiring Farmers Urged to Consider All Options Before Selling Up:

With succession front of mind for New Zealand agriculture, a North Island sheep and beef farmer turned agribusiness advisor is encouraging farm owners to explore all of the options before settling on a succession plan.

Sean Bennett, a veteran of 20 years on the land prior to becoming an agribusiness advisor for Crowe Horwath, suggests that succession is one of the industry’s biggest challenges over the next decade.

“When you consider the average age of a New Zealand farm owner is marching steadily towards 60, and the forecast capital required to replace their exit has been estimated at over NZ$60 billion, it’s easy to see why there are widely held concerns,” says Bennett. . . 

Soaring Start to Karaka Select Sale:

After just one day of trade at the three-day Karaka 2016 Select Sale the aggregate is already over half of the final aggregate of last year’s Sale, thanks to spirited competition at all levels of the market.

The momentum from the prosperous Premier Sale flowed through to the first day of the Select Sale with the aggregate, average, median and clearance rate tracking higher than Day One of the Sale last year, with two days of the Sale remaining. . . 

 

American Cattlemen's photo.


Fonterra drops forecast to $4.15

January 28, 2016

Fonterra has dropped its forecast payout from $4.60 a kilo to $4.15.

In a newsletter to shareholders, chair John Wilson says:

  • Today we’ve unfortunately had to announce that the forecast Farmgate Milk Price for the 2015/16 season is being reduced from $4.60 per kgMS to $4.15 per kgMS.
  • When combined with the previously announced earnings per share range of 45-55 cents per share, this amounts to a forecast Cash Payout of $4.50 – $4.55 per kgMS for the current season after retentions.
  • I know the reduction of our milk price forecast will be very tough on your farming businesses. As we get closer to our half year results, we will look at ways we can use the expected improvement in dividend returns and the financial strength of our Co-op to help support your cash flow.
  • Global economic conditions are continuing to impact demand for a range of commodities, including dairy. Despite this, our Co-op is performing well in the areas within our control and is on-track to generate improved dividend returns to farmers.
  • We remain confident in the long-term fundamentals of international dairy demand, but right now, the market remains out of balance.
  • Our previous forecast was based on the consensus view that the market would return to balance over first half of this year. However, the timeline for that correction has been pushed further out.
  • Farmers in other regions, particularly Europe, have not responded to the lower global prices by reducing supply as rapidly as New Zealand farmers have.
  • Last week I met with the leaders of the other major international dairy co-operatives. All have a similar view to ours on the medium term forecast, with one European co-operative introducing incentives to encourage their farmers to reduce supply.
  • Clearly, current prices are unsustainably low for farmers globally and cannot continue in the longer term.
  • Given the uncertainty, there continues to be further price risk. Your Board will continue to update you as the season progresses.
  • The 9.8 per cent drop in the forecast means we have had to reduce the Advance Rate payments. . . 

This isn’t surprising and follows Westland’s announcement of a lower forecast payout.

Few farms would have made a profit on the higher forecast. Today’s announcement will mean the average farm will be earning about $50,000 less than had the earlier forecast been maintained.

Fonterra’s media release is here.


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