Rural round-up

March 21, 2019

Shareholders say sale was inevitable – Brendon McMahon:

The possible sale of Westland Milk Products to China is a ”sad day” for the West Coast but necessary to save the business, a sample of farmer-shareholders said yesterday.

The Hokitika dairy co-operative, praised for years for retaining its independence in the face of Fonterra amalgamations, is poised to be sold to the Chinese dairy giant Yili.

Harihari dairy farmer and former board member Jon Sullivan greeted the news yesterday morning with ”she’s gone”.

Farmers had been left with ”no choice” but to sell, he said. . . 

Fonterra Announces 2019 Interim Results And Updates on Its Portfolio And Strategic Reviews:

Fonterra Co-operative Group Limited today announced its 2019 Interim Results which show the Co-op has returned to profitability with a Net Profit After Tax (NPAT) of $80 million, but normalised Earnings Before Interest and Tax (EBIT) are down 29% on the same period last year to $323 million.

• Key numbers in Interim Results
o Sales volumes 10.7 billion liquid milk equivalents (LME), up 2%
o Revenue $9.7 billion, down 1%
o Normalised EBIT: $323 million, down 29%
o NPAT: $80 million, up 123%
o Total normalised gross margin: $1.5 billion
Ingredients Gross Margin: $791 million, down 9%
Consumer and Foodservice Gross Margin: $766 million, down 7%
o Full year forecast earnings: 15-25 cents per share
o Forecast Farmgate Milk Price: $6.30-$6.60 per kgMS
• Sales process started for Fonterra’s 50% share of DFE Pharma
• Completed the sale of Corporacion Inlaca to Mirona
• Update on full strategy review . . 

Fonterra to hit debt reduction target from asset sales – Paul McBeth:

 (BusinessDesk) – Fonterra Cooperative Group expects to slice $800 million from its debt ledger through the sale of assets already signalled for the block.

The world’s biggest dairy exporter is strengthening its balance sheet as part of its wider strategic review. That’s included the divestment of a range of assets no longer deemed central to the cooperative’s future, the latest of which was a 50 percent stake in DFE Pharma – a joint venture with FrieslandCampina which supplies bulking agents, or excipients, in medicines including tablets and inhalers.

Fonterra has already announced plans to sell ice-cream maker Tip Top, with investment bank First NZ Capital receiving final bids earlier this month. It’s also considering its options for its 18.8 percent stake in Beingmate Baby & Child Food. . . 

Comforting news for dairy farmers as companies report results and the world price rises again – Point of Order:

Encouraging signs emerged this week that key elements in the structure of NZ’s largest export industry are whipping themselves back into the shape they should be.

The giant  co-op  Fonterra  has  gone back  into the  black  with a net profit of $80 million in the  first half,  after previously recording  a  net  loss of  $186m.

Meanwhile Westland Milk Products, NZ’s second biggest dairy co-op, is in line to be  sold  to China’s biggest  dairy company,  Yili,  in  a $588m  transaction that would inject nearly half a million  dollars into the operations of  each  of its  suppliers. . . 

Fonterra’s culture change– Craig Hickman:

Is it just me or is Fonterra undergoing a remarkably rapid culture shift in a very short space of time?

Last year I attended the Ashburton leg of the Fonterra Financial Results Roadshow: quite apart from the delicious lunch and sneak preview of the new Whittaker’s ice cream, it was a chance to hear then interim-CEO Miles Hurrell  and new board chair John Monaghan deal with the unpleasant reality of Fonterra’s first ever financial loss.

Miles especially came across as humble, honest and realistic, and those are attributes in direct contrast to the brash and overly optimistic Fonterra leadership we are used to seeing.  . . 

Interim Results support the need for fundamental change :

The Fonterra Shareholders’ Council supports today’s acknowledgement that fundamental change is needed to improve the performance of the Co-operative.

“Fonterra’s farmer shareholders will agree that the results announced today are not where they should be,” says Council Chairman Duncan Coull. “The Shareholders’ Council backs the Board and Management’s initiative to thoroughly review strategy. A well defined and executed strategy focused on our farmers’ milk is critical to maintaining sustainable returns and an enduring co-operative for generations to come.” . . 

Significant investment in major growth projects for Synlait:

– NPAT half year profit of $37.3 million
– Re-confirmed guidance for canned infant formula volumes of 41,000 – 45,000 MT
– Manufacturing efficiencies have supported improved production and sales volumes
– Key growth projects including Synlait Pokeno and our Advanced Liquid Dairy Packaging Facility remain on track
– New growth opportunities in liquid milk, Talbot Forest Cheese and lactoferrin expansion
– New purpose ‘Doing Milk Differently for a Healthier World’ established. . . 

Hyslop elected to Beef + Lamb directorship – Sally Rae:

Irrigation New Zealand chairwoman Nicky Hyslop has ousted sitting Beef + Lamb New Zealand director Bill Wright.

She beat Mr Wright, a Cave farmer, by a margin of 1808 votes in the recent Central South Island director election.

Mrs Hyslop and her husband Jonty farm Levels Estate, an intensive sheep, beef and arable property on the outskirts of Timaru.

Mr Wright was elected in 2016, having previously been chairman of the B+LNZ Central South Island Farmer Council for six years. . . 

Urban-fringe kiwifruit orchard with growth potential placed on the market for sale:

One of closest commercial kiwifruit orchards to Auckland’s urban boundary – with potential to treble its production capacity – been placed on the market for sale.

Known as MacLachlan Orchard, the 12.2-hectare property at 90 Mullins Road in Ardmore is planted on flat land, and is forecast to produce some 42,000 trays of fruit in the current season.

The orchard’s 3.3 canopy hectares of productive land comprises some 2.29-canopy hectares of the Hayward green kiwifruit variety and 1.07 canopy hectares of the G3 gold kiwifruit strain picked off vines which were grafted some six years ago. . . 


Rural round-up

November 14, 2018

Mackenzie Country and Waitaki: Balancing the extremes – Sally Rae:

Over the past two decades, the Mackenzie Basin and Waitaki Valley have undergone significant change.

The region has gone from a little known backwater to one of the highest profile battlegrounds over environmental protection and agricultural intensification, farmer Annabelle Subtil says.

The Omarama woman  addressed  delegates at the New Zealand Grassland Association’s 80th annual conference in Twizel last week. . . 

Farmers find irrigation can be controversial -Sally Rae:

For Glenn and Sarah Fastier, farming Simons Hill Station  on the eastern side of State Highway 8 between Tekapo and Twizel  is like living in a glasshouse.

The Mackenzie district was an area  many New Zealanders felt connected to and, when it came to land use, there were a lot of differing opinions as to what was appropriate, Mr Fastier said.

They farm next to Simons Pass Station, where a high-profile dairying operation is being established by  Dunedin businessman Murray Valentine,  attracting the ire of environmental activists.

“There’s definitely a different public perception on anything related to dairy. I don’t often think it’s justified. . . 

Guiney for the protest and McBride for the promise – Hugh Stringleman:

Fonterra shareholders have spoken loudly with the re-election of Leonie Guiney and election of soon-to-be-former Zespri chairman Peter McBride.

One director position is unfilled because incumbent Ashley Waugh, Maori farming leader Jamie Tuuta and multi-farm Canterbury candidate John Nicholls did not reach the required 50% approval of votes cast.

Waugh’s failure to reach the threshold is another aspect of the protest vote and the mood for change among farmer-shareholders after Fonterra’s worst year in financial results and setbacks. . . 

Details vague on proposed rewards scheme – Hugh Stringleman:

Fonterra will introduce a single on-farm assurance and recognition scheme including the existing milk quality, animal welfare and environmental requirements.

The scheme will begin next season, farmers at the annual meeting in Lichfield were told.

Chairman John Monaghan said the new scheme has not been named and Farm Source employees will interview farmers on the types of recognition and rewards it should contain.

“Once the commercial value is better understood we will decide whether to expand the programme to include financial incentives.”

A small minority of farmers who do not meet minimum standards will be subject to demerits, as is the case now. . . 

Profits up at Westland Milk pre-tax – Brendon McMahon:

Westland Milk Products yesterday posted a before-tax profit of $3.25million as it tries to claw its way to profitability.

Last year’s before-tax profit was just $29,000.

On releasing its annual report the West Coast farmer-owned co-operative acknowledged it was still not industry competitive and lacked “financial flexibility” due to high debt levels and the need for more working capital. . . 

Four Mycoplasma bovis myths busted:

Many farmers are going through a challenging time with the Mycoplasma bovis outbreak. But the Ministry for Primary Industries says their stress and anxiety is being compounded by some misinformation. Here the MPI dispels some of those myths:

Myth 1: Mycoplasma bovis has been in New Zealand since around 2004

All of the available research, as well as data collated during on-farm investigations, indicates that Mycoplasma bovis is likely to have arrived in New Zealand in late 2015 to early 2016. Although investigations are ongoing, two pieces of evidence give MPI confidence about that: . . 

Three young leaders up for major agribusiness award :

THREE young agriculturalists from Australia and New Zealand are through to the final for the prestigious 2019 Zanda McDonald Award. 

The award is widely recognised as a badge of honour in the agriculture industry, recognising future leaders and innovative young professionals from both sides of the Tasman.

The 2019 finalists are made up by two Australians and one New Zealander, who were described by judges as ‘diverse and equally impressive’.  . . 


Rural round-up

May 26, 2018

Waikato farmer reveals his farm first in the region to get Mycoplasma bovis cattle disease – Gerald Piddock:

Henk Smit has come forward as the Waikato dairy farmer whose herd has tested positive for Mycoplasma bovis.

Smit walked up to the stage and put his hand up during a meeting attended by close to 600 farmers at the Sir Don Rowlands Centre near Cambridge.

He outlined how the cattle disease arrived on his farm and his frustrations with dealing with the Ministry for Primary Industries.

Smit has farming interests in three properties around Waikato including the dairy farm that tested positive for M bovis. . .

Good clearance at online sale – Alan Williams:

About 96% of the wool offered in the first Natural Fibre Exchange (NFX) online auction was sold.

Indications are the sale was in line with the improving tone in wool prices at the latest open-cry auctions.

Six sellers provided lots for sale and a good cross-section of New Zealand’s major wool buyers were bidding online for the 1525 bales offered on May 22, Wools of NZ chief executive Rosstan Mazey said. . .

Performing as a co-op should – Neal Wallace:

Fonterra gets a pass mark from industry observers for its performance as a co-operatively-owned business.

But they warn it cannot rest on its laurels given challenges connecting with 10,500 owners and plans for further investment in added-value and consumer products.

Fonterra Shareholder’s Council chairman Duncan Coull said Fonterra has performed as a co-operative should. It is owned and democratically controlled by members, it serves its members, returns surpluses to members and strives to operate profitably. . .

Fonterra approach farmes to switch from WMP – Brendon McMahon:

Fonterra has again approached Westland Milk Products suppliers to switch loyalties with the promise of better returns.

The West Coast Federated Farmers annual general meeting in Greymouth this week heard that Westland suppliers from Inchbonnie and Rotomanu in the south and Springs Junction in the north, were being courted by the country’s largest dairy co-operative, which has a massive milk powder factory at Darfield.

Fonterra scouts were on the West Coast several years ago, but at that time few local farmers were tempted. . . 

STRESS removes headache for hill country farmers:

Taranaki farmer Roger Pearce is confident he’s hit a good formula allowing him to make a successful living in the eastern Taranaki hillcountry without bringing nature’s wrath on himself.

…or indeed a wrath on the communities and farms all the way down to the sea.

He’s tapped into the South Taranaki and Regional Erosion Support Scheme (STRESS) to allow him to reap more of the potential of his 2000ha Waitōtara Valley property – while ensuring its soil does not erode into waterways where it degrades water quality and heightens the risk of downstream flooding. . .

Australian milk production up 3.5%

Australian milk production to the end of April is up 3.5 per cent on the same time last year, according to the latest figures from Dairy Australia.

The figures reveal April production was up 4.5 per cent compared with last year, with increases in all states except Queensland.

Tasmania led the growth with production up 19.6 per cent for April, followed by South Australia, where production was up 8.6 per cent. . .


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