Rural round-up

11/12/2020

Dairy farmer confidence is improving but there are challenges in export markets – Point of Order:

The dairy industry  has  recovered some  of  its  confidence, as  its  role  as the  backbone  of  NZ’s  export structure has  moved  into sharper  relief  in the  Covid-19  pandemic.

Rabobank’s  latest quarterly survey of  farmer confidence says  it  has improved from  minus 32%  to minus 23%, with  demand  for  NZ dairy products  holding up well  since the  previous survey  in September.

The  dairy  industry  over  past  seasons   has  been the  target  of  urban critics  for  so-called   “dirty dairying”, climate  change  warriors  who want a reduction in methane emissions,  and the  government, which is implementing  new  freshwater regulations. Internally the industry was  stricken  with  the  financial  woes   of   Fonterra.

Even  now  as the  industry absorbs the evidence  for greater  confidence,  it   is  not  without  strategic  concerns.  . . 

Fonterra’s new ‘carbon zero milk’  50 Shades of Green:

Reading this week about the launch of Fonterra’s ‘Five anchor milks are now carbon zero’ we learned that this product claim would be achieved by gaining off-sets through funding a solar farm in India and a wind farm in New Caledonia.

In our opinion the embracing of the ETS and the use of off-setting is being used simply as a greenwashing marketing tool and duping New Zealanders who perhaps don’t understand the nuance of offsetting on our country.

It’s the ETS and off-setting mentality that is currently ruining our rural communities, replacing good productive farms and displacing people that live and work there with carbon pine forests, that will, far from being a solution, grow old, rot and burn. A disaster of our own short sighted making. . . 

Survey confirms value of farm environment plans:

Recently released fantastic survey results from farmers in the Aparima catchment in Southland confirm the value of farm environment plans, Invercargill MP and National’s associate Agriculture spokesperson Penny Simmonds says.

The survey was of 151 dairy and sheep and beef farmers in the Aparima Community Environment project who are committed to addressing water quality issues and reducing their environmental footprint.

“The survey results confirm what National has been promoting – that farmer-led action and working with scientists and industry experts is most effective, not the over prescriptive, unworkable regulations such as what the Labour Government has put in place,” Ms Simmonds says. . .

Farmer bank pressure drops but so do satisfaction rates :

Fewer farmers are feeling undue pressure from their bank but satisfaction rates continue to slide, according to the Federated Farmers November Banking Survey.

Of the 1,341 farmers who responded to the survey independently run by ResearchFirst, 65.4% said they were satisfied or very satisfied with their bank relationship. That’s down from 68.5% from the Feds’ survey in May.

“Satisfaction has steadily slipped over the past three years – in our November 2017 survey it was 80.8%,” Federated Farmers President and commerce spokesperson Andrew Hoggard said . . 

Seeka forecasts higher underlying earnings :

Strong sales, cost savings and significant one-off gains has seen kiwifruit exporter Seeka lift and narrows its full-year profit guidance.

The company expects underlying earnings between $15 million and $17m, compared with its previous guidance of between $9m and $12m

In a statement to the stock exchange, the company said the update reflected an improvement in its operational earnings, cost savings and the gain it expects from the sale and lease back of its Australian kiwifruit orchards. . .

Heartland launches farm term loan with self-serve online application:

Challenger bank Heartland has added another product to its growing list of digital offerings – this time for the rural market.

The term loan, called Sheep & Beef Direct, is designed for established farmers who are looking to buy or refinance a sheep or beef farm. In launching this product, Heartland is testing the appetite for a low-touch, online application that farmers can complete whenever and wherever – and they’ll be given an initial decision then and there.

Sheep & Beef Direct is the most recent of Heartland’s digital lending offerings. Joining the likes of Heartland’s Open for Business loans, car loans and home loans, it offers an online application which can be completed in minutes. . . 

 

 


Rural round-up

22/08/2019

600 farmers in big water project

Large-scale initiative in Southland expected to have big effect on water quality:

You could say it’s “ace” that more than 600 farmers and multiple agencies are working together to improve water quality in the Aparima catchment area in the deep south.

ACE – otherwise known as the Aparima Community Environment (ACE) project – is a farmer-led initiative in Southland aimed at over 600 farms spread over 207,000 hectares – with 81 per cent of that area developed. It has multi-agency participation with DairyNZ, Beef & Lamb and Environment Southland involved.

The ace thing about ACE, says DairyNZ’s strategy and investment leader for responsible dairying, Dr David Burger, is its enormous scale and the intent to support all land managers in good farming practice. It will also track what happens on every single farm in the six Aparima catchment groups – Pourakino, Lower Aparima, Orepuki, Mid Aparima, Upper Aparima and Waimatuku – and relate this to water quality downstream. . . 

Federated Farmers hails court ruling as a win for Rotorua community:

The voices of farmers in Rotorua, led by Federated Farmers, have been instrumental in the Environment Court’s rejection of Land Use Capability (LUC) as a tool for nitrogen allocation.

Federated Farmers, along with the Lake Rotorua Primary Producers Collective, has been fighting a proposal by Rotorua Lakes Council, forestry and others seeking to allocate nitrogen discharges using LUC methodology.  With evidence from member farmers in the catchment, as well as by engaging experts and consultants, Federated Farmers demonstrated the LUC proposal would fail farm businesses and their communities to the point of potential ruin, Feds environment spokesperson Chris Allen said.

“It would also have had a more uncertain environmental outcome than the original proposal  by Bay of Plenty Regional Council in Plan Change 10,” he said.

“We’re pleased the Court comprehensively rejected the LUC proposal that would have required nitrogen discharge reductions of 80% by dairy farmers and 40% by drystock farmers.  In contrast, the allocation for forestry would have increased six fold. This would have meant that most farmers would have had to lease back nitrogen (that had been transferred to forestry) in order to continue farming.” . . 

Forget about another share trading review – Sudesh Kissun:

Former Fonterra director Nicola Shadbolt says the recent collapse of a few dairy cooperatives should be blamed on their strategy, not their co-op structure.

She says the collapse of Australia’s biggest dairy co-op Murray Goulburn and the demise of Westland Milk co-op on the West Coast is not about their structure.

“It is governance, it is strategy. I mean for every two co-ops that fail there are about a thousand corporates… nobody says of the corporates that it’s their business model. But with co-ops it’s always their business model that is blamed.”

Shadbolt, a fierce proponent of the cooperative model, is aware of moves by some farmers and a few directors to return capital structure to the table. . .

Is there a future for OZ Fonterra as Fonterra’s finances unravel – Keith Woodford:

Fonterra’s announcement that it expects a loss of around $600 million or more for the year ended 31 July 2019 has big ramifications for Oz Fonterra.  With overseas-milk pools now lying outside the central focus of Fonterra’s new strategy, and with Fonterra seriously short of capital, the Australian-milk pool and associated processing assets look increasingly burdensome.

If Fonterra were to divest its Australian operations, then it would demonstrate that Fonterra really is retreating to be a New Zealand producer of New Zealand dairy ingredients. It would also reinforce the notion that consumer-branded products are now largely beyond its reach.

This strategic position is close to where Fonterra was in around 2006, when it decided that it was 50 years too late to take on the likes of Nestlé.  It did have both Australian and Chilean operations at that time but they were smaller than now. It also took on an initial shareholding in Chinese San Lu at that time, but essentially Fonterra saw itself as a New Zealand-based co-operative. . .

Agriculture fears it will be milked by EU free trade deal – Mike Foley:

Australia risks trading away hundreds of millions of dollars in agricultural earnings if it doesn’t negotiate significant concessions from the European Union.

That’s according to industry groups Australian Dairy Farmers and the National Farmers’ Federation, which warned Trade Minister Simon Birmingham the EU will have to reduce its onerous tariffs and import barriers to make a free trade agreement (FTA).

“There would be no point in doing the deal for Australian farmers if we can’t see a realistic and positive outcome from this FTA,” NFF president Tony Mahar said. . . 

Want to protect the planet? Eat more beef, not less – Patrick Holden:

If students and staff at Goldsmiths University really want to help the environment, they should end their ban on selling beef on campus. Far from being the bogeymen portrayed by environmental campaigners, sustainably farmed beef and dairy cattle are integral to maintaining our green and pleasant land, keeping our waterways free of chemicals and feeding our population in the most efficient manner possible.

Two thirds of UK farmland is under grass and in most cases cannot be used for other crops. The only responsible way to convert this into food is to feed it to cattle, which are capable of deriving 100 per cent of their nutrition from grass and therefore are more efficient on such land than chickens or pigs. Even on grassland where crops could be grown, ploughing it up to create arable farms would release huge amounts of carbon into the atmosphere and require the use of pesticides, herbicides and fertiliser, all of which can devastate biodiversity.

Cattle farming does not just help to maintain grassland – it also works to improve the sustainability of existing cropland.  . . 


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