Rural round-up

July 17, 2020

Government’s food and fibre reset lacks a core – Keith Woodford:

The Government’s new food and fibre reset document is PR aspirational fluff. The hard work remains to be done

On July 7 Prime Minister Jacinda Ardern released the Government’s document “Fit for a Better World – Accelerating our Economic Potential”. The associated  press release  from the Beehive says that it provides a 10-year roadmap for the food and fibre industries’.

At the same function where this report was released, Agriculture Minister Damien O’Connor released a companion document from his Primary Sector Council of chosen industry leaders.  That document is also titled “Fit for a Better World” but lacks the title extension about ‘accelerating our economic potential’.   This second document is indeed a different document, singing from the same song-sheet, but with considerably different material. Very confusing indeed!

My focus here is on the Government’s version of the report because this is the one that has been signed off by Cabinet. Minsters in attendance at the release also included Stuart Nash and Shane Jones. . . 

Concerns for shearing as overseas workers can’t get in – Susan Murray:

New Zealand’s traditional shearing routines could be thrown into disarray this summer if overseas shearers can’t get into the country.

The New Zealand Shearing Contractors Association said, nationally, at least two million sheep are shorn by international shearers.

The vice president, Carolyn Clegg, said farmers may have to re-design their shearing plans to avoid animal welfare issues, and it could have business implications too.

She said some lambs may not get shorn, or ewes may just get crutched, rather than fully shorn.

Taste Pure Nature one year on – Allan Barber:

A little over a year since the launch of the Taste Pure Nature country of origin brand in California, Beef + Lamb’s GM Market Development, Nick Beeby, is thrilled with the evolution of the programme. At the start a small number of meat exporters were supportive of what Beeby concedes was initially seen as a B+LNZ initiative, but 15 months later success in targeting specific consumer groups and expansion of the scheme into China have brought increased industry commitment. TPN is now viewed positively as a sector-led strategy and the meat exporters have injected huge momentum and drive in support.

Original participants included Lamb Company shareholders, Alliance, ANZCO and Silver Fern Farms, and Atkins Ranch and First Light, two exporters which stood to benefit from the tightly targeted digital strategy directed at the Conscious Foodie consumer segment in California. The initial strategy was to raise awareness and increase the preference for New Zealand grass fed, naturally raised and anti-biotic free red meat, and importantly to point consumers to where they can buy it. These strategic objectives remain the same. . . 

Craggy Range Winery staff celebrate being among World’s Best Vineyards – Shannon Johnstone:

Craggy Range Winery staff celebrated with, well, a glass of lunchtime wine, as they found they were sitting at number 17 among the World’s Best Vineyards.

This year, the winery placed among some of the world’s most respected wineries such as France’s Mouton Rothschild & Château Margaux, Italy’s Antinori, the United States Opus One and Australia’s Penfold.

It is one of two New Zealand wineries to make the list alongside Rippon in Central Otago.

Craggy Range director Mary-Jeanne Peabody said they were “thrilled” to have been recognised. Last year they placed 11th. . . 

HoneyLab does licensing deal with US company:–  Andrew McRae:

Health product company HoneyLab is to sell seven of its products in North America through a licensing agreement with American company Taro Pharmaceuticals USA Inc.

The agreement covers the sale of its kanuka honey products for the treatment of cold-sores, rosacea and acne, a bee venom-based cosmetic range and a product for joint and muscle pain.

Taro will be able to make and sell these licenced products in the US, Canada and Israel and they will be on shelves in stores sometime in 2021. . .

ASB appoints Ben Speedy as Rural General Manager:

ASB is pleased to announce that Ben Speedy has been appointed to the bank’s leadership team in the role of general manager, Rural.

Speedy joins ASB from his previous role as New Zealand Country Manager for Core Logic International.

Speedy grew up on a farm and started his career with BNZ after graduating from Massey University with a Bachelor of Applied Science in Farm Management and Rural Valuation, and Post-Graduate Diploma in Business Administration (Marketing).

As an Agribusiness Graduate he worked his way up to become Senior Agribusiness Manager in Hawke’s Bay. . . 


Rural round-up

May 8, 2020

Concern farmers’ wellbeing affected: –  David Hill:

North Canterbury Rural Support Trust chairman Andy Munro is concerned for the wellbeing of farmers as they negotiate the ongoing effects of a dry season and the Covid-19 lockdown.

He said last month’s rain was “a great morale booster” for farmers in the drought-affected area in North Canterbury.

“Since that rain four weeks ago, things went pretty quiet. But it’s just a pity we haven’t had a follow-up rain and we really need a good warm follow-up rain, particularly for the farmers from Waipara north to get some growth before winter.

“It’s starting to get dry and cold in that northern part, but other than that it’s business as usual. . . 

Farmers need to be heard not patronised:

The Government’s drought recovery advice fund announced today is merely a drop in the bucket for supporting farmers affected by drought, National’s Agriculture spokesperson Todd Muller says.

“The fund is specifically for providing affected farmers with recovery and planning advice, but does not contribute to farmers’ rising feed costs or general business costs.

“Most farmers already know what is needed to help their business recover and it is insulting for the Government to tell them they simply need to seek more advice to get through the drought. . . 

Rural GPs not just another business – Peter Burke:

Rural General Practice Network chair Dr Fiona Bolden is disappointed that the Government is treating rural general practices the same as any other business in the community.

Bolden told Rural News that rural GPs were expecting to get two payments from the Government to assist them financially.

However, she says while they had received the first payment, Cabinet vetoed the second payment – just days before it was expected to be paid.  . .

Differing responses to wage subsidy scheme – Allan Barber:

The country’s meat processors have followed two distinctly different paths in response to the government’s wage subsidy scheme which is available to all businesses for 12 weeks, providing they can substantiate a 30% drop in revenue during the period. Silver Fern Farms, Alliance, ANZCO, Taylor Preston and Blue Sky Meats have all claimed the subsidy to varying extents, whereas AFFCO, Greenlea and Wilson Hellaby have decided it is not justified or necessary, at least partly on ethical grounds.

The contrast in approach has already been commented on by independent economist, Cameron Bagrie, who has slammed the two largest claimants, SFF which has claimed $43 million and Alliance $34 million, for taking advantage of taxpayer funding when they are classified as an essential business, operating in lockdown. Equally Bagrie complimented those companies not making a claim because they were getting on with business as usual. Speaking to The Country’s Jamie Mackay, he said “the wage subsidy is out there to support businesses that are getting clobbered, that are effectively in lockdown.”

I am not convinced this interpretation is either totally fair or even correct. Both SFF’s Simon Limmer and Alliance’s CEO David Surveyor are clear the wage subsidy is not a company entitlement, but is paid directly to various categories of employees: firstly it maintains standard wage rates at normal processing speeds despite the 30-50% reduction to meet distance requirements, it retains those who would have to have been terminated seasonally, and it is used to pay those who cannot work e.g. because of age,  compromised immunity or family circumstances. . .

Community to the rescue for harvest – Toni Williams:

CharRees Vineyard owners Charlie and Esma Hill put a call out on social media for help to harvest during lockdown.

They were so overwhelmed by community response, including some from Christchurch, they had to turn people away.

The lockdown harvest, approved by Ministry for Primary Industries as essential for food and beverage production, attracted about 20 people from Ashburton and Methven — many who had never harvested grapes before — to put their hands up to help.

The pickers worked alongside family members of the couple and vineyard workers to pick the first of three annual grape harvests. . . 

Red meat exports top $1 billion in March 2020, a first for monthly exports:

The monthly value of New Zealand red meat and co-product exports topped $1 billion for the first time, according to an analysis by the Meat Industry Association (MIA).

Total exports reached $1.1 billion in March 2020, an increase of 12 per cent on March 2019.

While overall exports to China for the month of March were down by nine per cent compared to last March as a result of COVID-19, exports to all other major markets increased, demonstrating the agility and resilience of the New Zealand red meat sector. . . 

Time to take ag reform out of the “too hard basket” – Fiona Simson:

Regional Australia is well placed to be the engine that powers Australia’s COVID-19 recovery. The bush has done this before, with strong exports helping keep recession at bay during the Global Financial Crisis.

And, after a challenging period of drought, bushfires and floods, widespread rainfall has seen the fortunes of farmers begin to improve. Agriculture is ready and raring to grow.

As we dare to cast an eye to the world post-COVID-19, now is the opportune time to consider the changes agriculture and regional Australia needs to best contribute to the recovery task. . . 


Rural round-up

April 28, 2020

Farmers must bide their time – Annette Scott:

The probability of a global recession is growing along with the likelihood of reduced consumer spending in all red meat markets.

The covid-19 pandemic has shifted demand for red meat away from food service to eating at home, Beef + Lamb chief economist Andrew Burtt said.

Just how long that will take to reverse will depend on how long it takes people to be comfortable to eat out in restaurants again.

The key for New Zealand across the supply chain will be maintaining integrity, reliability and consistency. . .

Disaster plans made – Toni Williams:

Vicki and Hamish Mee are planning a ‘‘worst case scenario’’ for stock at their Mid Canterbury free-farm piggery.

The Mees run Le Mee Farms and also have a cropping operation.

Their planning follows restrictions during the lockdown period which stop independent butchers from opening, and make any sale of pork limited to supermarket stores, other processors or retailers which were open.

As imported pork was still allowed, the Mees were preparing themselves for a different future market post-lockdown. . .

Backing ‘best fibre in the world’ – Sally Rae:

Long-time wool advocate Craig Smith says his new role as chairman of the National Council of New Zealand Wool Interests is about “championing the cause of wool”.

The council is an association of organisations engaged in the production, testing, merchandising, processing, spinning and weaving of wool and allied fibres.

Mr Smith, who is general manager of Devold Wool Direct, was the first New Zealander to be appointed to the global executive committee of the International Wool Textile Organisation, and he has also been heavily involved with Campaign for Wool, a global project initiated by Prince Charles. . . 

Meat plants back to near normal – Neal Wallace:

Meat processing throughput could be back at close to maximum on Tuesday when the country’s covid-19 response level drops to level three.

Final protocols are still to be confirmed but level three restrictions should enable meat processing to be close to full production, helping address the backlog of stock waiting to be killed, which has blown out to six weeks, Alliance livestock and shareholder services general manager Danny Hailes says.

At level three social distancing between workers drops from 2m, to 1m.

That should allow throughput for sheep to rise from  50% to 90% of plant capacity and beef from 70% to 100%. . . .

Online auction takes off – Annette Scott:

A handshake still carries weight for livestock trading firm Peter Walsh and Associates but with covid-19 it has been forced to change tack.

The lockdown changed that handshake to a tap on a keyboard as the company held to its first Livebid online auction last week. 

“With no saleyard operation we had to find new ways of moving livestock so we said ‘let’s keep it on the farm’,” Peter Walsh said.

With a smart back office team and the latest technology the independent livestock broker came up with Livebid. . .

Full fields, empty fridges – Laura Reiley:

Farmers in the upper Midwest euthanize their baby pigs because the slaughterhouses are backing up or closing, while dairy owners in the region dump thousands of gallons of milk a day. In Salinas, Calif., rows of ripe iceberg, romaine and red-leaf lettuce shrivel in the spring sun, waiting to be plowed back into the earth.

Drone footage shows a 1.5-mile-long line of cars waiting their turn at a drive-through food bank in Miami. In Dallas, schools serve well north of 500,000 meals on each service day, cars rolling slowly past stations of ice chests and insulated bags as food service employees, volunteers and substitute teachers hand milk and meal packets through the windows.

Across the country, an unprecedented disconnect is emerging between where food is produced and the food banks and low-income neighborhoods that desperately need it. American farmers, ranchers, other food producers and poverty advocates have been asking the federal government to help overcome breakdowns in a food distribution system that have led to producers dumping food while Americans go hungry. . .


Rural round-up

June 17, 2018

Infected cattle bring opportunity for study – Sally Rae:

It will not be possible to control Mycoplasma bovis if an eradication attempt fails, given the present lack of understanding of the infection and the “gross inadequacy” of existing diagnostics, Emeritus Prof Frank Griffin says.

Otago-based Prof Griffin, whose career has focused on animal health research, described that as the “sad reality”.

He believed the Government’s decision to attempt eradication first was the correct one, even though it brought considerable public liability for taxpayer funding. . .

TB work will help fight M. Bovis:

Eradication of Mycoplasma bovis could be supported by the 25-year legacy of co-operation between OSPRI/TBfree and AgResearch in tracking and researching bovine tuberculosis.  Richard Rennie spoke to Dr Neil Wedlock, one of the country’s senior bTB researchers on what can be learned.

Collaboration between AgResearch scientists and disease control managers at OSPRI TBfree and its predecessor the Animal Health Board has led to important technical breakthroughs resulting in a drastic reduction in the prevalence of bovine tuberculosis in livestock.

Eradication of TB from the national herd by 2026 will be hailed as a disease control success story but there are some challenges to deal with before that happens. . . .

Trio share their travels through hills and valleys – Toni Williams:

You can’t go from mountain to the next mountain without going in the valley,” says farmer and author Doug Avery.

Mr Avery, along with Paul ”Pup” Chamberlain and Struan Duthie, was guest speaker at a Rural Support Mid Canterbury session at the Mt Somers Rugby Club rooms.

Rural Mid Cantabrians were encouraged to ”take a break” with the trio as they spoke of their life experiences – the ups and the downs.

From front-line policing during the 1981 Springbok tour, reaching rock bottom farming in drought-stricken Marlborough to cracking open emotions, they shared it all.

All three spoke of the importance of having a mentor, or a support network of people to help when times were tough. . .

Pure taste sours :

Meat companies have asked Beef + Lamb New Zealand not to launch the Taste Pure Nature origin brand in North America fearing it will confuse consumers and give competitors a free ride.

The Lamb Company, a partnership between the country’s three largest lamb exporters Alliance, Anzco and Silver Fern Farms, has spent 54 years jointly developing the North American market.

Its chairman Trevor Burt fears the origin brand will clash with its Spring Lamb brand. . .

Climate change discussion ‘direction of travel’ is positive – Feds:

The National Party’s five principles on which it will base emission reduction policies, including science-based and taking into account economic impact, are spot on, Federated Farmers says.

The Opposition’s support for a bi-partisan approach to establishing an independent, non-political Climate Change Commission was outlined by Leader Simon Bridges in a speech at Fieldays this morning.  National’s three other emission reduction criteria are technology driven, long-term incentives and global response.

“We’re delighted that the Coalition Government, and now National, have both signaled their recognition that there’s a good case for treating short-lived greenhouse gases (such as methane) and long-lived (carbon dioxide and nitrous oxide) differently,” Katie says. . .

Different treatment of methane the right thing for global warming:

The Dairy Companies Association of New Zealand (DCANZ) is pleased to see a differentiated approach, to treat methane differently to long-lived greenhouse gases, being given serious consideration in New Zealand’s climate change policy dialogue.

“Policy must be underpinned by robust science and be appropriate to the targeted outcome. If the outcome we want is climate stabilisation, then the science is telling us to treat long-lived gases differently to methane in policy frameworks” says DCANZ Executive Director Kimberly Crewther . . .

This generation of women not just farm wives anymore – Colleen Kottke:

For many generations, the heads of farm operations across America were likely to be men clad in overalls wearing a cap emblazoned with the logo of a local seed dealership or cooperative.

Back then, most women were viewed as homemakers who raised the children, kept the family fed and clothed, and were delegated as the indispensable “go-fer” who ran for spare parts, delivered meals out to the field and kept watch over sows during farrowing – all the while keeping hearth and home running efficiently

Although many of these duties were important to the success of the farm, they were often looked upon as secondary in nature. Today women are stepping into the forefront and playing more prominent roles on the farm and in careers in the agribusiness industry once dominated by their male counterparts. . .


Labour lurches further left with McCarten as CoS

February 26, 2014

Matt McCarten is Labour’s new chief of staff.

Former New Labour and Alliance party founder Matt McCarten has been appointed chief of staff for Labour Party leader David Cunliffe.

In a move likely to please Cunliffe’s backers on the left of the party and place further strain on relationships with centrist, senior members of his caucus, Cunliffe said McCarten’s proven track record as a political organiser and strategist over more than 30 years qualified him for the role.

“He has spent his life fighting for social justice and workers’ rights. His values are the values of the Labour Party and the values of the government I want to lead,” said Cunliffe.

McCarten’s early professional life was in the trade union movement. He split with the Labour Party in 1989 to help form the New Labour Party with dissident Labour MP Jim Anderton, then split with Anderton in 2002 over the Alliance’s coalition with the Labour-led government of Helen Clark.

Anderton went on to form the Progressive Party and the Alliance lost all its parliamentary seats that year.

McCarten most recently stood for Parliament in the Mana by-election in 2010 as a candidate for the far left-wing Mana Party, led by Te Tai Tokerau MP Hone Harawira, and has been an adviser to Mana.

That’s an interesting political journey -he started in the Labour Party, moved to New Labour, then Alliance,  Mana and now he’s back in Labour.

Do the values of the Labour Party Cunliffe says he shares, not paying tax?

Inland Revenue is chasing unionist Matt McCarten’s Unite Support Services Ltd. for $150,750 in unpaid taxes after the department forced the company into liquidation last month.

McCarten’s vehicle, which supplied administrative support services to the youth-orientated union Unite Inc., was put into liquidation by a High Court order last month after the tax department pursued it for “failure to provide for taxation,” according to the first liquidator’s report. . .

Whatever he’s done and wherever he’s been, there’s no question about where he wants to go and take Labour with him  – that’s to the far left.
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Meeting the candidates

October 17, 2011

A long serving MP told me that the incumbent in a safe seat was always at a disadvantage at pre-election meet-the-candidates-meetings.

The other would-be MPs could say almost anything ,secure in the knowledge they’d never get to parliament to be held to account. The incumbent had a much harder task of making no promises s/he couldn’t realistically deliver.

With MMP the MP might expect to have at least one other candidate on the same side of the political spectrum to balance the opposition but at North Otago Greypower’s meeting on Saturday it was five to one against the sitting MP.

However, National’s Waitaki MP Jacqui Dean was more than a match for the other five candidates representing the Alliance, Green, Labour and Democrats for Social Credit parties and an independent.

She presented the facts and figures on National’s term. This included the explanation that superannuation had gone up 18.9% since National came to power and the sobering reminder that around half of New Zealand households were net tax recipients and 71% of net tax was paid by the relatively small number of people earning more than $150,000.

She also explained the importance of continuing to rebalance the economy to move from high spending, taxing and borrowing to savings and export-led growth.

Unlike the other candidates Jacqui is actively campaigning for both the party and constituent votes and she gave examples which showed her knowledge of Waitaki, its people and their concerns; and the breadth and depth of her work across her 34,888 square kilometre electorate.

As for the other candidates?

Like Jacqui, the Green’s Sue Coutts was articulate and exuded warmth and conviction. She was clear about her party’s policies, though unlike Jacqui, was much stronger on aspirational goals than practicalities.

Labour’s Barry Monks began by saying he didn’t realise he was expected to make a five mintue speech. This showed he’d failed candidates 101: if invited to a meeting, ascertain date, time, venue and purpose and what’s required.

The independent, David Ford, told us he was an entrepreneur. Any positive impression this might have created was spoiled when he went on to say he’d returned to New Zealand after 38 years overseas with only $10,000 which suggests he wasn’t a particularly successful one.

The Alliance candidate, Norman MacRitchie, who received 93 votes in the last election, wanted to repeal the States Services Act.  The Democrat for Social Credit candidate, Hessel Van Wieren, who gained 140 votes in the last election, tried to convince us the Reserve Bank could solve all our problems by creating more money.

When the speakers finished the man two along from me accused the bloke between us of having made up his mind before he got there. I suspect that was true of most of the audience, but at least they’d made the effort to get to the meeting and listen to other points of view, even if it only confirmed preconceived ideas.

For less biased reports on the metting see: party candidates set out policies for voters in the ODT; and Waitaki Candidates grilled on asset sales in the Timaru Herald.


Is MMP good for wee parties?

February 8, 2011

One of the supposed virtues of MMP is that it give wee parties a far better opportunity to get into parliament than would be possible under FPP.

But there is little point just getting into parliament. To achieve much a party must get into government and how many of the wee parties that have got into government have survived?

New Zealand First splintered into bits which disappeared at the next election. NZ First came back only because its leader won his seat and in spite of bringing other MPs into parliament was, and still is, no more than a one-man vanity vehicle.

United Future has swallowed up several other parties to no good effect. It too survives on the strength of its leader’s now tenuous hold on a seat and when he goes the party will too.

Act has pulled itself together after nearly falling apart last year. But it struggles to articulate what it really stands for and survives only by virtue of the people of Epsom who voted for its leader.

Alliance imploded. Jim Anderton clung to his seat and pretence at leadership through various changes in party names. The current manifestation still exists only to provide him with a leader’s budget and will go at the next election.

I was pulled up for calling the Green Party wee when it is the third biggest in New Zealand politics.

But that is not so much a reflection on its success, as the failures of all but the two bigger parties. An organisation which can’t count its members in at least thousands, and for democracy’s sakes it should be 10s of thousands, is really only a lobby group not a party.

Call it what you like, a party which has managed to get into parliament in three successive elections but failed to get into government is effectively only a lobby group with public funding.

Now the Maori Party is facing the problem all wee parties face in government – the need to differentiate itself and claim kudos for its achievements without undermining the government or its own support base.

The party’s co-leaders and two of its other MPs have accepted the reality that it’s better to get something  than to stand on a high horse and get nothing. Hone Harawira hasn’t and his antics threaten the party.

If he becomes an independent or forms another party and stands again he might split the vote and allow the Labour candidate to get through. When the Maori Party loses its seats it will almost certainly disappear and the seats could well follow.

The National Party policy to get rid of the seats was set aside in coalition negotiations with the Maori Party. If the party allies itself with Labour or disappears that policy is almost certain to be resuscitated.

After five elections under MMP only three wee parties survive with more than a leader. One has never been in government. The other two are there only because they hold a seat or seats and neither could be regarded as being secure in the long term.

MMP gives wee parties the oxygen of representation in parliament but they risk suffocation when they get into government.


Fewer lambs but still enough chops for bbq

August 10, 2008

The t-shirt which proclaimed New Zealand’s ewenique – 60 million sheep can’t be wrong is well out of date with the national flock now down by more than a third from that number according to Meat and Wool New Zealand’s report on the year to June 2008. 

 

Breeding ewes dropped by 9.5% from 26.063m to 23.59m; and total sheep numbers declined 11.2% from 38.461m to 34.150m. This is the lowest number of breeding ewes since 1952 and the lowest total of sheep we’ve had since 1050.

 

The estimated lamb crop was 31.836m in June last year and declined by 13.4% to 27.599m.  Hogget numbers are estimated to have decreased 16.2% with a drop in the North Island of 7% and 26.6% in the South,

 

The sharp drop in numbers is attributed to concerns about the profitability of the sheep industry, last season’s drought and more attractive alternative land uses, especially dairy and dairy support.

 

Ewe condition at mating was poor because dry weather led to inadequate flushing feed and consequently lower rates of conception.

 

Scanning shows a lot of variability but the decline in ewe and hogget numbers mated and a lower expected lambing percentage is expected to lead to a decline in the total lamb crop of 4.2 million or 13.4%. 

 

Beef cattle are estimated to have decreased by between 0.3and 19.6 per cent although this was partially offset by herd rebuilding in Gisborne and of Hawke’s Bay.

 

These figures will be sobering reading for the meat industry. Kill numbers are expected to be down by 9 million in total throughout New Zealand. To put that into perspective a plant like Alliance’s Pukeuri works would kill about 2 million sheep a season.

 

That would indicate that closing of freezing works has not finished. However, Frogblog draws a long bow in concluding summer’s bbq chops are at risk because of dairy conversions. The 34 million sheep left will still provide enough chops and sausages.

 

The Frog is also wrong in asserting:

 

It’s funny how short term economic decisions, like the mad rush to industrial dairy, have long term economic, environmental and social consequences like climate change, water pollution and, it seems, diet.

 

There is nothing short term or purely economic about the decision to convert from sheep farming to dairy. It is a huge investment which is not undertaken lightly and has to be for the long term.

 

There are many positive social consequences from dairying which requires more staff and so leads to an increase in population, a boost in school rolls and the creation of jobs in servicing and support which flows on to rural towns.

 

Dairying doesn’t automatically lead to water pollution either. Regional Councils are taking a very strict approach to breaches of consent and the pollution of waterways and there are a lot of proactive approaches to safeguarding the environment from farmers, irrigation companies and dairy companies.

 


Alliance releases list

July 28, 2008

The Alliance must still be in existance because it has released its party list.

Co-leadersKay Murray and Andrew McKenzie have the top two palces. Murray, who is also Dunedin South candidate, is a programme manager for people with disabilities. McKenzie, who is standing in Port Hills, is a barrister specialising in employment law. 

Other top ten candidates include Victor Billot, communications officer for the Maritime Union, at number 3, Alliance Party president Paul Piesse at number 4, secondary teacher Richard Wallis at number 5, postgraduate student Sarah Campbell at number 6, truck driver Bob van Ruyssevelt at number 7, University of Otago emeritus professor of Politics Jim Flynn at number 8, union organizer and postgraduate student Sarita Divis at number 9, and merchandiser Amy Tubman at number 10.

Other candidates include Wellington publisher and branding expert Jack Yan (number 12), Alliance disabilities spokesperson Chris Ford (number 22), and a young New Zealander working in the mining industry in Pilbara, Western Australia, Justin Wilson (number 23).

This is the remnants of the party which got 7.74% of the party vote and 10 MPs in 1999. But the Greens pulled out then Jim Anderton left to form whatever the party what is now the Progressive Party, leaving Laila Harre to lead the Alliance until it was defeated at the 2002 election.

We’re pretty far apart on the political spectrum, but I admire the dedication of these volunteers who are prepared to stand for what they believe in when they have no hope of getting into parliament to implement it.


More SFF jobs lost

July 22, 2008

At least a couple of hundred people will lose their jobs when Silver Fern Farms closes its sheep and lamb slaughtering and processing plant at Belfast.

SFF chief executive Keith Cooper said the closure of the slaughter operations was the final instalment of its Project Rightsize for 2008, a programme which was designed to align processing capacity with supply, enhance financial performance, and re-position the business as a true marketing organisation under the Silver Fern brand.

It reflects the overall decline in South Island sheep and lamb numbers, which are expected to drop by an estimated 2.2 million units next year, as conversions in traditional sheep and lamb farming areas to dairy and alternate land uses translate into lower stock units.

Cooper said SFF projections were broadly aligned with Meat and Wool Economic Service forecasts that signal an overall reduction in livestock over at least the next three years.

There were also specific issues that make the slaughter processing operation at Canterbury less tenable. These include the requirement for capital investment in effluent management systems, environmental upgrading, and limited development options compared to other key sites.

“The proximity to residential zoning also contributed to the decision,” he said.

The processors boning room facilities would continue to operate as usual, as the company needed to retain its processing capability to meet increased demand for chilled product across the business, Cooper said.

Cooper said while no further closures are planned, all operations are subject to ongoing review based on site economics.

With this proposal, Silver Farm Farms would have reduced the number of full operating sites by six, with lamb capacity reduced by five chains.

Since February 2007 the company has reduced debt by $150 million.

“These decisive actions, coupled to the proposed partnership with PGG Wrightson and commitment of additional capital of $220 million, should now address the concerns Alliance had with a merger last year and create the opportunity for Alliance to recommence merger discussions,” Cooper said.

“This can only benefit suppliers to the two co-operatives.” 

The admission that Alliance’s concerns over last year’s proposed merger is interesting but it doesn’ explain why SFF spurned Alliance’s mega-merger proposal this year.

As for creating an opportunity for Alliance to recommence merger discussion, It’s possible I’m not talking to the right people, but those I am discussing the issue are strongly opposed to PGW’s involvement with SFF and that would make a merger with Alliance less likely not more.


New era or just paying SFF’s debt?

July 6, 2008

If debt is not behind this deal, than why would a cooperative want to invite into the fold a company like PGG Wrightson, a public company dominated by two major shareholders?

The question comes from Jon Morgan.  His answer follows:

 The spin merchants for Silver Fern Farms and PGG Wrightson are hailing their merger proposal as the dawn of a wonderful new era in the meat industry.

 Well, they would say that.

They may be right, but here’s an alternative view. Some industry observers feel the deal is more about Silver Fern (formerly known as PPCS) finding someone to pay its debt.

Under the deal, PGG Wrightson will pay $220 million for 50 per cent of Silver Fern, a cooperative owned by 9000 farmer shareholders.

In October PPCS posted a $40 million loss but was back in the black this year with a first-half profit of $11.2 million. Though it expects to make big savings from plant closures it still has to find the money to pay for them – the recent Oringi shutdown is costed at $12 million-$15 million alone.

Silver Fern’s immediate concern is to make sure its accounts are passed for the financial year ending August 31 and it has to show the auditors that its bondholders are secure. Two tranches of bonds are in the market – $50 million to be repaid next March and $75 million due in December 2010.

Though this deal with PGG Wrightson would not be approved by shareholders till September it may be enough to cover any auditors’ concerns.

The debt goes back to the costly Richmond takeover, achieved after a long and bitter battle in 2004, and has been exacerbated by Silver Fern’s failure to make any money for the past three years.

If debt is not behind this deal, than why would a cooperative want to invite into the fold a company like PGG Wrightson, a public company dominated by two major shareholders?

That’s the cynic’s view of what the deal will do for Silver Fern. What will it do for PGG Wrightson? Well, here you have to bear in mind a long-term view of the industry and remember that the man at the top of this company is the entrepreneurial Craig Norgate.

If you regard him as the new Ron Brierley, as Sir Ron’s old mate Sir Selwyn Cushing does, then you could look on this deal as the opening gambit of a power play. After winning control of the Silver Fern boardroom his next move is to lure the other South Island cooperative, Alliance, into a merger, during which he will allow his company to be bought out at a handsome profit.

If Alliance spurns such blandishments, he could launch a takeover instead. That’s much harder to do if the shareholders don’t actually hold tradeable shares. But Alliance is troubled by a dwindling supply of stock in the dairy-rich deep south and would be hard-pressed if a procurement war broke out.

He has a third option: to stay in a new Silver Fern- Alliance company and await further opportunities down the road. And they will come. There’s a mood for change in the industry – the failed Alliance mega-merger plan at least showed that the other meat companies were willing to talk about restructuring. It’s so much more painless when you can rationalise – meaning close meat plants and lay off workers – if you can do it in concert.

Before all this can happen there’s one immediate hurdle to jump. It’s a pretty big one – 75 per cent approval of Silver Fern’s shareholders. Almost all will be South Island farmers, a pretty fractious bunch of late.

They’ve been upset about Silver Fern’s prevarication over the mega- merger but now they know why. Maybe they’ll see the intervention of Mr Norgate as the price they have to pay to get the merger back on track. But then, losing control of their company for $5 extra a lamb may be too high a price for them. Time will tell.

Of course, Alliance could launch a pre-emptive strike and make a rival offer for Silver Fern. That would give the shareholders something to really think about.

The possible ramifications of this deal are enough to make your head spin. Another is the procurement situation. Combined, Silver Fern’s and PGG Wrightson’s stock-buying workforce will be more than 350. Will there be enough work for them all? And what about the contracts that PGG Wrightson now has to procure for other processors, such as Bernard Matthews and Progressive? The company says it will continue to fulfil them, but what happens when stock is in short supply? Its priority will surely be the company that it owns half of.

Stock throughput is any processor’s lifeblood. Bills have to be paid. Silver Fern’s debt will be transferred to PGG Wrightson’s balance sheet, but it will borrow to fund the deal and will need the cashflow.

Another issue for the wider industry is the trust it now has in Silver Fern. All the big companies, along with Meat & Wool New Zealand, backed the Meat Industry Taskforce, set up to find a strategy for an industry beset by tough trading times. The taskforce collapsed late last week when it lost the support of a key player, publicly unnamed but widely believed to be Silver Fern.

It would be unsurprising to find the other members of the taskforce do not hold Silver Fern in high regard. Which could be a problem for the industry’s hopes for expanding meat sales outside the main markets of Britain, Europe and United States. This depends on cooperation, but Silver Fern has not been very cooperative lately.

Again, Mr Norgate may be key to resolving this. His business acumen is widely admired by the companies.

If he decides to make a long- term commitment to the new-look Silver Fern he could smooth over the hurt feelings.

A lot depends on him. Is he there for the long haul or just passing through?

He says it all.


Silver Fern Farms PGW Plan Not Silver Bullet

July 1, 2008

The proposal for PGG Wrightson to take a 50% stake in Silver Fern Farms is not a silver bullet for the meat industry and initial reaction to the concept isn’t very positive.

… yesterday’s announcement went down like a “cup of cold sick” with shareholders, who fear farmer-ownership of New Zealand’s largest meat company will be diluted.

Mossburn farmer Stephen Cullen said he was “bloody shocked” that Silver Fern Farms wanted to effectively sell its soul to outside interests and alienate itself from the rest of the industry.

Farmers feel very strongly about retention of farmer-control in the processing industry.

Meat Industry Action Group chairman John Gregan said he was “staggered” that PGG-Wrightson wanted, what he believed, was a controlling share in Silver Fern Farms.

“There’s no doubt the current structure is failing us, but the loss of farmer shareholding will be a sore point for some,” he said.

Mr Gregan believed it would be a “big ask” to achieve the 75 percent voter threshold required to advance the partnership.

MIAG has gathered proxies from SFF & Alliance shareholders to call a special general meeting of both companies aimed at getting the two comapnies together. I don’t know whether the proxies will enable MIAG to vote on the SFF PGW deal as well.
Federated Farmers Southland meat & fibre chair Martin Hall agreed the 75% would be difficult and farmers would have to dedecide whether they wanted to be an owner of a meat company or just a participant.

“I’m a bit angry about it. They (Silver Fern Farms) didn’t dream it up last month. It takes a long time to put together something like this.”

MIAG is meeting SFF chair Eion Garden today. One of the questions they could ask is: why SFF let the Meat Industry Taskforce waste time and money starting the process of developing an industry strategy when they SFF must have already been planning the deal with PGW?

Garden believes shareholders will support the initiative becuase of the immediate benefits.

The new board of SFF would decide on the use of the $220 million, but a sizeable chunk would go on the upgrade of existing processing plants, including the use of robotic meat-cutting systems developed between SFF and Dunedin’s Scott Technology.

“This industry is starved of capital.

It’s one of the fundamental reasons we don’t have strong balance sheets and strong profits on a long-term basis,” Mr Garden said.

He is right that lack of capital is a problem, but it’s not the only one. The drastic drop in sheep numbers has resulted in an over-supply of killing space so whether or not the deal goes ahead there will be more works closures.

The other problem is marketing and SFF & PGW say more money would be spent on researching customers and stronger branding of New Zealand meat. But they also say the money won’t be used for reducing debt and high debt is one of SFF’s big problems.

I haven’t spoken to anyone who is wildly enthusiastic about the plan yet but perhaps I’m talking to the wrong people. The ODT found a more positive reaction from Otago Fed Farmers meat & fibre chair Rob Lawson because it involved Craig Norgate.

I am cautiously optimistic. I can see some really positive things, and one of those is the business acumen of Craig Norgate and the PGG Wrightson team.”

Other factors the Merton farmer saw as favourable were the injection of $220 million from PGG Wrightson; the move to an integrated supply chain linking consumers with farmers; the potential for industry rationalisation; and the market focus the investment would encourage.

All these are fair points and there is no doubting Norgate’s abilities, nor his powers of persuasion. If he fronts a road show to sell the concept he may be able to change the minds of at least some of those who aren’t enthusiastic about it.

The loss of total farmer control of SFF was a possible concern, but Mr Lawson said farmers had to ask themselves what farmer control of the meat industry had achieved so far.

That’s a fair question but as Fonterra found when they tried to persuade their shareholders to open up the company to outside investment that farmers aren’t keen to lose control.


Two works down…

May 19, 2008

There are no surprises in today’s announcement that PPCS is closing its Burnside venison plant in Dunedin with the loss of 138 jobs.

 

The age of the plant was one of the factors counting against it and PP chief executive Keith Cooper said it had been losing millions of dollars.

“Tightening New Zealand and European food safety regulations make the continued operation of export meat processing facilities at Burnside increasingly problematic as all areas on site, even those not used for food processing, must be maintained to specified standards,” Mr Cooper said.

“In addition, the modern blast freezers used for venison processing require a large section of now-obsolete conventional cold storage to be frozen down, which incurs significant ongoing electricity costs.”

Mr Cooper said sheep and lamb numbers were expected to drop by two million in the South Island next year and national deer numbers were forecast to drop from 736,000 to around 500,000.

“The forecast seriously impacts on the ongoing viability of the venison and (lamb and deer) skin processing operations at Burnside,” he said.

It’s been a horror month for employment in Dunedin with 430 jobs lost through Fisher and Paykal’s closure of its Mosgiel plant and a further 50 jobs lost with the closure of Tamahine knitwear.  

The announcement will also be making staff at other freezing works nervous. PP announced the closure of its Orinigi works with the loss of 446 jobs last week  and there may be more to come.

Owen Hembry points out that PP with 24 plants, including Orinigi, has as many plants as Alliance with 8,  Affco (10) and ANZCo Foods (7) combined.

In fact Alliance and Affco, which has previously restructured, have both said they have no plans to rationalise.

So the pain is going to fall mainly on PPCS but as the saying goes, no pain no gain – and what comes out the other end will undoubtedly be a leaner, fitter company.

The cost of redundancies at Oringi – which employs 466 people with an opportunity for about 100 to be relocated within the company – will be about $14 million to $15 million with operating cost savings of about $15 million a year.

A fitter PPCS will have another card to play – a good geographic and product spread.

One of the reasons Alliance didn’t want to merge with PP was the overcapacity of PP works. These closures will change that, but PP may also feel that having bitten the bullet it is in the best interests of the company to continue on its own.


Oringi closure first but won’t be last.

May 13, 2008

The numbers tell the story – New Zealand’s sheep population is falling. Twenty years ago we had around 60 million sheep, now ther are fewer than 40 million so it wasn’t surprising that the Meatworkers Union was supportive, at least in principle, of the Alliance proposal for a mega-merger.

 

The combination of drought and conversion to dairy or dairy support has led to a dramatic decrease in sheep numbers. That in turn means there is an over supply of killing capacity and the unions wisely decided an orderly process of reorganisation would be preferable to a disorderly one.

 

However, PPCS turned down the mega-merger proposal which would have resulted in a new company combining the two big players, Alliance and PPCS, and some smaller companies to control 80% of the country’s sheep meat trade.

 

Today’s announcement that PP is closing its Oringi processing plant near Danneverke is sudden but not surprising. It will be a blow for the workers and will have an economic and social impact on the community. It will add to uncertainty at other works too because it is very unlikely this will be the last freezing works to close in the near future.

 

The outlook for sheep farming is looking up, but numbers are still going down. Just this week a record price of $32.5 million was paid for a 3,139 hectare Waipa Valley farm. It has been used to finish sheep and beef but the new owners plan to use it for dairy grazing.  

This illustrates the gap between incomes for dairying and sheep farming and indicates there is not going to be a sudden recovery in sheep numbers.


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