Rural round-up

August 26, 2018

NZAgbiz launches first electrolyte product:

Developed by NZAgbiz in conjunction with leading veterinary scientists, Novolyte has been formulated to replace fluids lost due to scouring, treat dehydration and exhaustion and help calves recover from stressors such as transportation.

NZAgbiz is a Fonterra business unit that manufactures livestock nutrition products using primarily Fonterra ingredients, and General Manager Greg Cate says Novolyte was the logical next step in their range of scientifically formulated animal health supplements.

“All NZAgbiz products are based on solid scientific evidence and we saw the need for a high-quality electrolyte replacement to help farmers raise calves that thrive,” says Cate. . . 

Farm plans reduce N loss:

Farming practices now piloted by Mid Canterbury dairy farmers Grant and Jan Early could show other New Zealand farmers how they can successfully reduce their environmental impacts.

Earlys’ Mayfield farm is one of a small group in the Forages for Reduced Nitrate Leaching project looking for ways to cut nitrogen losses.

They have so far achieved a 20% cut in one year on their dairy support farm. The research results are made available to help farmers adopt new practices. . .

Milking it: I”m a farmer and I’m a very lucky man: – Craig Hickman:

NZ is known for its dairy products, and is home to one of the biggest dairy companies in the world. In this Stuff special investigation, we examine how the price of milk is set and explore the industry behind our liquid asset.

OPINION: Someone recently asked me why I’m a farmer and I think it’s fair to say it was something of an accident; I don’t’ come from a farming background and I had only a vague notions of what it might be like having spent a few summer holidays working on a deer farm.

I broached the idea with my parents at the end of my sixth form year, saying I would like to skip my final year of college and go work on a dairy farm, ostensibly to earn enough money to put myself through university.

My father, ever the practical man, came back to me with a counter proposal; if the object of working for a year is to save money for university, why not do something that pays real money? . . 

Hill country going well – Peter Burke:

Beef + Lamb NZ director Kirsten Bryant is concerned about the perception that hill country farmers aren’t doing well. Bryant says she and her husband have three hill country farms and financially they have never done as well as they are doing now.

Their properties are returning 5% to 8% on capital. “I don’t know where this perception that hill country farming is not profitable has come from,” she told Rural News. “For a start, let’s not forget about hill country farms that this is where the lambs are bred.

So you start focusing on hill country farming as a negative and talking it down and soon you are going to lose your breeding ewes and total lamb production,” she says. . . 

First NZ company receives Medical Cannabis license:

Hikurangi Cannabis has become the first New Zealand company to secure a license to cultivate medicinal cannabis plants.

The license issued by the Ministry of Health enables Hikurangi to breed cannabis strains that can eventually be used in medicines.

Hikurangi has secured significant investment and will now start building high tech greenhouses and processing facilities near Ruatoria on the East Coast. Hikurangi has commissioned clinical trials to start next year for the first New Zealand made cannabis medicines. . .

A2 Milk reports an a1 result while scientists work on the health benefits – Point of Order:

Revenue up   68%, profit up 116% , cash  on hand up  280% …

Those annual results are the sort most  companies’ bosses  dream of.  They are certainly are the  kind  of  results  Fonterra’s  farmer-suppliers    are  not  likely  to  hear  from  the  co-op’s  board in  this lifetime.

But  for A2 Milk’s  shareholders  they are  real.   Reporting to shareholders  (who  indeed have had a  dream run  this year), the   company this week  said revenue  reached  $922.7m,  annual profit $195.7m,  and  the sales margin  was  31%,  up  from  26% . . 

NZ pipfruit industry heading for a record 2018 crop, MyFarm says – Tina Morrison:

(BusinessDesk) – New Zealand’s pipfruit industry is headed for a record crop this year as it benefits from favourable growing weather, low Northern Hemisphere stocks, market changes, premium varieties, and a weaker New Zealand dollar, according to a report published today by MyFarm Investments.

The vast majority of the 2018 apple crop has been picked and nearly 90 percent has been exported, said MyFarm head of investment research Con Williams, who joined New Zealand’s largest rural investment syndicator last month after eight years as ANZ Bank’s agri economist. Williams said the crop is expected to have increased by 5-6 percent from last year, registering a new all-time high. . . 

Red meat sector confident despite some headwinds – Allan Barber:

Since I attended the 2016 conference, having missed last year’s, several things have changed considerably: two years ago Donald Trump wasn’t President, Silver Fern Farms hadn’t concluded its capital raising with a Chinese investor, alternative proteins and non-meat burgers weren’t on the industry’s radar and there was little recognition of the need for a Red Meat Story.

This year the conference programme acknowledged these changes by focusing on disruption to global trade, the China influence, heightened consumer expectations, the effects of the digital revolution and the importance of building consumer trust by telling our story about product provenance, traceability and environmental credibility. The conference was very well attended by farmers, processors and service providers, all of whom were optimistic about meeting the challenges ahead of an industry which has faced many different threats to its survival in the past 140 years. . . 

Country Life rural wrap from around New Zealand:

Do you know what is happening on farms and orchards around New Zealand? Each week reporters from Country Life talk to rural people about what is happening around New Zealand. Here’s what they told us.

Northland
Younger cattle have been selling well coming into a spring market. An average-to-better yearling steer has been fetching $880 to $950 and decent heifers $800 to $860. Wednesday was one of the worst days this winter – cold and bleak with hail, thunder and lightning. Thursday was sunny and Friday sunnier.

Pukekohe
This weekend’s weather will be like the last – fine. Unfortunately, the work days have been wet. With few exceptions, growers have kept off their fields unless crops were ready to harvest. With heavy supplies of broccoli retailing at unprofitable prices, working in the rain and muddy fields would appear to be a waste of time. . .

Tariff turmoil in times of abundance – Tim Burrack:

U.S. crop export prices dropped like a rock last month, falling by more than 5 percent. That’s the fastest dive we’ve seen in seven years, according to a report issued on Tuesday by the Department of Labor.

Government figures are important for understanding trends, but they cover up a lot of individual stories.

So let me tell you what these export-price statistics have meant for my farm in Iowa, where I grow corn and soybeans and raise hogs. Or, to look at it another way, let me tell you about my farm’s financial snapshot.

We’re facing tariff turmoil in a time of abundance. . .

 

Cavalier turns to profit in 2018, sees continuing improvements in future years –  Tina Morrison:

(BusinessDesk) – Carpet-maker Cavalier Corp turned to an annual profit and improved its debt and cash balances as it benefits from the previous year’s restructuring.

The Papatoetoe-based company posted a net profit of $4.1 million in the year ended June 30, from a loss of $2.1 million a year earlier. That’s above the top end of its forecast range of $3.7 million to $4 million. . . 


Rural round-up

June 20, 2017

Eating quality combats imitations – Annette Scott:

Grow them fast and kill them young is the recipe for the best eating quality in red meat.

And with the threat from synthetic and plant-based meats a good eating experience was critical to underpin New Zealand’s grass-fed, ethically produced red meat story, AbacusBio consultant Jason Archer said.

Older animals had more connective tissue in their muscles, which made their meat tougher, so fast-finishing made for more tenderness, Archer told farmers at a Beef + Lamb NZ beef-focused field day. . .

Synlait revises 2016 / 2017 forecast milk price to reflect current market:

Synlait Milk (NZX: SML; ASX: SM1) is forecasting a total milk price of $6.29 kgMS for the 2016 / 2017 season, consisting of a forecast base milk price of $6.15 kgMS and $0.14 of premium payments.

An average premium payment of $0.14 kgMS will go to Synlait’s Canterbury milk suppliers creating value behind the farm gate with seasonal and Special Milk progammes such as a2 Milk™, Grass Fed™ and Lead With Pride™. . . 

Impressed by carpet launch – Sally Rae:

Trevor Peters admits he was a bit sceptical before he headed to New York for the launch of Carrfields Primary Wool’s Just Shorn range of wool carpets and rugs.

But once there, the Otago farmer was ”pretty impressed”.

A group of farmers attended the launch last month, along with New Zealand Trade Commissioner-Consul General Beatrice Faumuina.

Mr Peters and his family operate Peters Genetics, a large-scale farming operation in Otago, running about 32,000 ewes.

All action at Holstein-Friesian conference – Sally Rae:

Holstein-Friesian breeders from throughout New Zealand will converge on Central Otago this week.

The New Zealand Holstein-Friesian (HFNZ) Association is holding its conference in Cromwell, organised by the Otago branch of the organisation.

Holstein-Friesian cattle make up more than 45% of the national dairy herd and HFNZ has more than 750 members nationally, Otago branch chairwoman Judith Ray said.

The conference theme was High Octane: Gold, Wine and Speed, with various activities organised around that, and it was ”action-packed”.

Planning began about 18 months ago and organisers wanted to ”showcase” what the region had to offer, Mrs Ray said. . . 

More irrigation work approved – Annette Scott:

The $195 million Hunter Downs Water project has received the all clear to implement its proposed irrigation scheme in South Canterbury.

Environment Minister Nick Smith has granted Hunter Downs Water requiring authority status to develop and operate the Hunter Downs irrigation scheme, effectively giving it the green light to go.

The milestone decision gave it the authority to apply to the Timaru and Waimate District Councils and Environment Canterbury for the necessary designations to implement the scheme. . . 

Fieldays showcases the tech changing farming:

A technology tsunami is set to change the way New Zealand agricultural producers do business according to ANZ’s Rural Economist Con Williams.

At Fieldays this week to talk about his latest Agri Focus research into the digital tsunami hitting the primary industries, Mr Williams said the number of apps and innovations designed to help improve agricultural businesses has exploded in recent years.

“A technology tsunami is upon the primary sectors. From meeting consumer demands around how food is produced to adapting to changing regulatory requirements, technology is poised to play a much bigger role in farm management,” Mr Williams said. . . 

Strong interest in on-farm bull sale at Rangiwahia – Jemma Brakebush:

As the bull sale season picks up around the country, the first on-farm bull sale in more than a decade was held in the small farming community of Rangiwahia, this week.

Murray and Fiona Curtis set up Riverlee Stud four years ago and held their first sale on Wednesday, to allow sheep and beef farmers to buy the bulls direct through them. , , 

What’s brown and sticky? – Thomas Lumley:

Q: What’s brown and sticky?

A: A stick!

Q: What do you call a cow on a trampoline?

A: A milk shake!

Q: Where does chocolate milk come from?

A: Brown cows!

There’s a popular news story around claiming that 7% of Americans think chocolate milk comes from brown cows.

It’s not true. . . 

Wilderness Home in Fiordland National Park For Sale:

An idyllic waterfront holiday home in New Zealand’s Fiordland National Park, the ultimate wilderness playground, has been placed on the market for sale.

The property is one of only 25 privately-owned sections located within the majestic Fiordland National Park.

The traditional Kiwi bach is located in an area called Jamestown, which was founded in the 1870s on the shores of Lake McKerrow near the bottom of the South Island’s West Coast. . . 


Rural round-up

May 9, 2017

NZ beef, lamb and dairy prices on ‘reasonable’ footing – Simon Hartley:

Two separate New Zealand commodity price indexes have the country’s exports in good health, but the strength of the New Zealand dollar remains a concern.

ANZ agri-economist Con Williams said while the headline ANZ commodity price index dipped 0.2% in April, the underlying detail for New Zealand’s main commodities remained ”robust”.

The headline index was driven lower by dairy – it was down 2.5% month on month – while the non-dairy component rose 1.2% for the same period. . .

Gas to energy project – Rueben on line:

An Isla Bank dairy farm is saving money and preventing harmful greenhouse gases from entering the atmosphere by converting waste to energy.

Glenarlea Farm, a Fortuna Group dairy farm, is now converting methane gas captured from the dairy effluent pond into electricity for the dairy shed, as well as for heating water which can be used for wash-down purposes on the farm.

Quick decision lead to success – Neal Wallace:

Weo Maag concedes the Pukepoto Farm Trust does things a bit differently.

A trustee of the entity that owns the 1400ha breeding and finishing property at Ongarue near Taumarunui, Maag said the trust aimed to keep things simple but was a willing adopter of any systems or tools that worked.

An Ahuwhenua Trophy finalist, the Pukepoto trust was formed in 1978 and its 1000 shareholders owned land that was originally used as a thoroughfare for Maori travelling between Taranaki and Whanganui. . . 

Disastrous end-of-harvest for South Canterbury’s cropping farmers – Pat Deavoll:

Twice the normal rainfall in March followed by four times the amount in April has meant a disastrous end to the harvest for South Canterbury’s arable farmers.

Federated Farmers arable chairman for South Canterbury Mike Porter said he “struggled and battled” his way through harvest and finished last week.

“It’s been a very challenging harvest – the most challenging I have ever known.” . .

Dairy women gathering –  Sally Rae:

Dairying women from throughout New Zealand will converge on Queenstown this week for the Dairy Women’s Network conference.

The event, on Thursday and Friday, features practical workshops and keynote speakers, including All Blacks manager Gilbert Enoka and Corrections Minister Louise Upston. . . 

Water scheme will reflect demand – Annette Scott:

Hunter Downs Water will forge ahead with a multi-million-dollar irrigation scheme for South Canterbury despite falling short of its capital-raising target.

What form it would take was being worked through with the contractor in a redesigned scheme to meet the demand from farmers who had committed through the share uptake, Hunter Downs Water (HDW) project manager Stacey Scott said.

The deadline for the uptake of water and development shares in the $195m scheme was on April 28, after its initial April 10 deadline was extended. . . 


Rural round-up

January 13, 2017

Global milk production downturn bodes well – Simon Hartley:

The global downturn in milk production bodes well for New Zealand’s dairy farmers for much of 2017 and is increasing the likelihood of a boost in estimated payouts.

Between the key whole milk powder prices rising 45% during the past six months and six of the seven major dairy-producing countries reporting production declines, Rabobank’s dairy quarterly report paints a reasonably positive outlook for 2017.

However, recovery may become the catchphrase of the current season, as opposed to outright profitability, and the US currency may yet have a major impact, and on various markets.

Co-author Rabobank dairy analyst Emma Higgins said the recent rally in global dairy prices heralded further positives as global efforts to increase overall production would take time. . . 

A woman valued and connected within the dairy industry – Anne Boswell:

Anne Boswell talks to an Atiamuri dairy farmer who can’t sit still, busy with family, friends, land and organisations helping farming women succeed.

Connection – to one’s family, friends and like-minded people – is fundamental to personal wellbeing but can be challenging for farmers, says Atiamuri dairy farmer and Dairy Women’s Network trustee Karen Forlong.

“Fundamentally we are hard-wired to need to belong to something, to feel a connection to something over and above ‘I am what I work at’,” she says. 

“Farming’s a business, but it’s so much more than that, and equally, the success of my farm does not define me as a person.” . . 

Ryan looks forward to challenges:

The New Zealand Farm Environment Trust’s new General Manager James Ryan is looking forward to the challenges the new job will bring.

Christchurch-based James Ryan, a former policy manager with DairyNZ, was appointed in October this year.  

He says the Trust will play a crucial role in guiding farmers through an era of increasingly complex sustainability issues. . . 

Fonterra & LIC Set to Release Farm Performance System – Agrigate:

Fonterra and Livestock Improvement Corporation (LIC) are in the final stages of developing an online tool, Agrigate, designed specifically to help farmers improve their farm performance through the use of their existing data.

Agrigate has been developed by the two farmer-owned co-operatives to make it easier for farmers to:

• access key information about their farming business in one place

• identify areas where they can benchmark their performance on a scale that they have not been able to in the past

• make smarter and faster decisions

• manage their environmental information (e.g. nutrient management) . . 

NZ commodity prices rise for eighth month, buoyed by dairy recovery – Rebecca Howard

(BusinessDesk) – New Zealand commodity prices rose in December, the eighth consecutive monthly gain, as dairy prices continued to improve.

The ANZ Commodity Price Index advanced 0.7 percent in December to 277.3 and was up 16.5 percent on an annual basis. In New Zealand dollar terms the index increased 2 percent in the month and rose 9.4 percent on an annual basis as the kiwi eased against the greenback and the British pound.

Dairy was the standout performer as tight global milk supplies and improved Chinese import demand continued to be the main drivers, said ANZ agri economist Con Williams. . . .

Comvita expects to realise $30M from sale of Medihoney, shares in US partner – Sophie Boot:

(BusinessDesk) – Comvita, the manuka honey products company, has sold its Medihoney brand to US partner Derma Sciences for about $19 million, and will reap a further $11 million selling Derma shares in a takeover offer of the Nasdaq-listed company.

The gross proceeds of the Medihoney deal will amount to US$13.25 million, with a US$5 million earnout payable on sales milestones being achieved, Comvita said in a statement to the NZX. Comvita also owns 1.1 million shares in Derma Sciences, which announced on Jan. 10 that it will be acquired by Nasdaq-listed Integra LifeSciences for US$7 per share by the end of March. That values Comvita’s stake at about $11 million, it said. . . 

Fonterra extends sway over Aussie dairy industry with Bellamy’s ‘poison pill’ – Brian Robbins:

Fonterra is in the box seat to control the future of Australian company Bellamy’s Organic under an effective “poison pill” arrangement that can be triggered if a shareholder group controls more than 30 per cent of Bellamy’s capital.

The troubled infant formula group outlined details on Wednesday of a new arrangement with Fonterra that allows the New Zealand group to terminate a key supply deal if a shareholder group controls more than 30 per cent of the Tasmanian company’s capital.

The disclosure, along with news of the replacement of Laura McBain, the chief executive of Bellamy’s, by another senior executive, Andrew Cohen, on an interim basis, came as part of a trading update to investors. . . 

Tasmanian dairy company Bellamy’s CEO Laura McBain to leave after price plummet – Caitlin Jarvis:

Launceston-headquartered dairy company Bellamy’s has replaced chief executive Laura McBain.

The embattled baby formula company announced to the Australian Securities Exchange (ASX) that Andrew Cohen has been appointed acting chief executive.

The announcement was made by the organic dairy company’s chairman Rob Woolley. . . 

Bid to heritage list Brumbies – John Ellicott:

Brumbies may be protected for their cultural heritage value in new legislation being drawn up and already, according to the proponents, met with approval by NSW Nationals leader John Barilaro.

With  the expected release soon of the new Wild Horse Management Plan, lobby groups are fighting to preserve substantial brumby populations in national parks, especially  in Kosciuszko National Park.

The Snowy Mountains Bush Users Group wants to prevent a culling of brumbies, which may form part of the new management plan – with ground shooting touted as the most likely form of control. . . 

North And South Island Wool Auctions Receive Varied Support:

New Zealand Wool Services International ltd’s CEO Mr John Dawson reports that the wool auctions in the North and South Islands this week produced considerable price variations for comparative types with the North Island levels well below the South’s.

Of the 19500 bales on offer, 7804 percent sold with the weighted currency indicator, compared to the last sale on 21st December was 1.62 percent higher, adding more downward pressure on local prices.

Mr Dawson advises that the South Island sale compared to when last sold on 15 December saw; . .. 

Image may contain: one or more people

Only a farm kid ‘gets’ this.


Rural round-up

July 6, 2016

How many ticks does SFF need? – Neal Wallace:

Silver Fern Farms can rightly ask just how many hoops does it have to jump through before opponents of the proposed transaction with Shanghai Maling accept the legitimacy of last year’s shareholder approval of the deal?  

The Companies Office and Financial Markets Authority – bodies charged with administering business behaviour – have both rejected complaints about SFF’s handling of last October’s shareholder vote, the financial information supplied to its shareholders and to Shanghai Maling.  

But a more important hoop it could be argued SFF has easily traversed is shareholder support. . . 

Highly profitable banks are playing a long-term and responsible game with struggling dairy farmer borrowers – Rees Logan:

In the year to March 2016, lending to the dairy sector increased by 9% to approximately $40 billion.

During that same period, land prices in the dairy sector dropped 16%, according to Real Estate Institute (REINZ) figures. This fall in land prices means the increased lending is effectively funding the losses the banks’ customers are suffering as a result of the low dairy payout.

Key asset values are decreasing (land and livestock) and debt is increasing so owner equity and bank security is quickly eroding. 

DairyNZ figures show approximately 50% of New Zealand’s dairy sector debt is held by the top 20% of its indebted farmers. This is a major concern. . . 

Marlborough farmer ‘wild’ after overnight electric fence theft – Jennifer Eder:

An electric fence has been stolen in Marlborough in an overnight heist, leaving stock on the loose and a farmer out of pocket.

Grovetown farmer George Wadworth found his sheep loose along the road on Sunday morning and discovered about a kilometre of fence had vanished.

“I was pretty wild. My main concern was not really for stock safety but people using the road. It’s quite close to a main highway, and if a sheep hits someone’s windscreen at 100kmh, it’ll kill you.”

Community constable Russ Smith said someone had “gone to quite a bit of trouble” to remove 250 plastic fence standards, or electric fence posts, from the  16-hectare vineyard. . . 

NZ commodity prices rise in June, led by seafood, dairy – Paul McBeth:

(BusinessDesk) – New Zealand commodity prices rose for a second month in June, led by more seafood and dairy products, although an appreciating kiwi dollar limited those gains in local currency terms.

The ANZ commodity price index rose 3.7 percent last month, after a 1.1 percent increase in May. On an annual basis, prices were down 5.4 percent. In New Zealand dollar terms the index rose 0.3 percent, adding to a 2.5 percent increase in May, and an annual decline of 5.9 percent. The trade-weighted index rose 4.9 percent in June.

“There was broad-based strength across all the major categories. However, producers won’t be celebrating too loudly,” ANZ Bank New Zealand agri-economist Con Williams said in his report. “In many cases, world prices are still below the same time last year and the NZD rose over the month too.” . . 

New partnership supports takahē recovery

A newly-signed partnership between DOC and Fulton Hogan will help the critically-endangered takahē continue its recovery, Conservation Minister Maggie Barry says.

Worth $1 million, the partnership was signed at the Burwood Takahē Centre near Te Anau today by DOC director-general Lou Sanson and Fulton Hogan’s director of investments, Bob Fulton.

“The Takahē Recovery Programme has just had its most successful breeding season on record, with 38 chicks fledged,” Ms Barry says.

“Consistently high numbers of chicks are being produced each year, thanks to the hard work of DOC staff, volunteers and our Treaty partner, Ngai Tahu. Fulton Hogan will support the next step in the species’ recovery.” . . .

TB eradication scheme marks milestone:

New Zealand has taken another step towards becoming TB-free with large areas of previously infected land being declared free of the disease.

OSPRI administers the TBfree programme aimed at eradicating bovine tuberculosis from cattle, deer and wildlife.

It has has been progressively achieving this by intensive possum control, then carrying out wildlife surveys to confirm the disease has been eradicated. . . 

Fonterra Lichfield Achieves One Million Building Hours:

Major milestones are being knocked off as construction on one of the world’s largest dryers races towards completion – the result of over one million working hours on the new Fonterra Lichfield milk powder dryer.

For more than 3,000 people representing 300 companies, the finish is now clearly in sight as the September commissioning date for this world-class dryer nears.

South Waikato Operations Manager Sam Mikaere says it takes one look at the numbers behind the build to get an appreciation for its impressive scale.

“This is not just any dryer we’re building. Along with our D2 dryer down at Fonterra Darfield, this will be the biggest milk powder dryer on the planet,” he says. . . 

Record turnout at RCNZ annual conference:

A record turnout of 153 contractors, from all around the country, descended on the Bay of Islands – in late June – for this year’s RCNZ annual conference.

RCNZ national president Steve Levet was delighted with the record conference turnout – held at the Copthorne Hotel and Resort, in Paihia, from June 27-30 – given the current economic climate.

“This is the largest turnout that I can recall and it seems many rural contractors have decided to ignore some of the doom and gloom merchants and are clearly focussed on looking forward to better times.”

Mr Levet says the conference had an exciting agenda of relevant and pertinent issues to the rural contracting sector – along with a number of top-line speakers. This year’s conference theme was: “Your Business from Start to Finish” and it also celebrated the 20 year anniversary of Rural Contractors NZ (RCNZ) as an organisation. . . 

Hawke’s Bay Tonnellerie de Mercurey Young Winemaker 2016 Announced:

Congratulations to Alex Roper from Mission Estate for winning Hawkes Bay Young Winemaker 2016. The competition took place on 1 July at EIT in Taradale followed by dinner and contestants speeches at Mission Estate. Yvonne Lorkin was the charming and entertaining MC who also ran the wine options section of the evening.

Congratulations also goes to Tom Hindmarsh from Dry River in Martinborough who came second (contestants from around the North Island were eligible to enter) and Brad Frederickson from the Hawke’s Bay Wine Company who came third. . . 


$250m for 50% of SFF

September 15, 2015

Shanghai Maling Aquarius – a Bright Foods subsidiary – would invest $260 million to form a 50/50 joint partnership withSilver Fern Farms:

Chairman Rob Hewett said the move, which he said would prove to be a “watershed” for both company and the meat industry, and would make Silver Fern debt free by the year’s end.

Silver Fern, a hybrid farmer-owned co-operative, has for several months been looking at its capital structure with a view to paying down debt.

A number of parties, both domestic and foreign, are understood to have looked at Silver Fern at some point after Silver Fern late last year hired Goldman Sachs to look at its options to raise up to $100 million.

The meat industry has for several years struggled with issues of overcapacity and competition for stock – made worse by a dwindling sheep population which has gone from a peak of 70.3 million in 1982 to 28.6 million today.

“A lot of money needs to be spent on Silver Fern Farms to make it efficient again,” said one analyst. “Many of the Silver Fern plants are at the high end in terms of operating costs.”

The industry suffers from overcapacity, much of it with Silver Fern Farms.

ANZ rural economist Con Williams said profitability in the sector had been poor for an extended period, which had hampered reinvestment, weakening profits and balance sheets. . . 

It would be difficult for local investors to offer that much money and the ability to put the firm on a sound financial footing.

Fran O’Sullivan made this point yesterday:

. . .The extent of the proposed Chinese commitment has made it more difficult for those Silver Fern Farms shareholders who want to keep control of their hybrid co-operative in NZ ownership to persuade their board, and more importantly the company’s bankers, to support other alternatives.

Herald inquiries reveal that sufficient support was earlier raised from a range of parties for a $40 million to $45 million underwrite for a rights issue to help recapitalise the company. But one of the parties – who wished to remain anonymous – said that did not go far enough for the co-operative’s banking syndicate. At least $70 million would be required and that would have flowed straight out the door to reduce debt.

It is understood other endeavours to find a “white knight” to ensure Silver Fern Farms remains majority-controlled by Kiwi interests have been pursued.

But the company is fast running up against a banking-imposed deadline to reduced its debt exposure. . .

It’s not just what the company owes now but the ability to pay the costs of getting rid of excess capacity and upgrading plants.

But it’s not just the cash investment either, the deal has the potential to give much better access to Chinese markets.

This is how the meat industry used to be – British companies owned freezing works to ensure access to meat.

Shareholders now have to decide whether they are prepared to let 50% of the company go in return for the significant investment by Shanghai Maling Aquarius.

And regardless of what some opposition politicians are saying, providing the offer satisfies the Overseas Investment Office, this is a matter for the board and shareholders not the government.


Rural round-up

May 29, 2014

Speech to the B3 Better Border Biosecurity Conference – Nathan Guy:

Thank you to Better Border Biosecurity (B3) for hosting this important conference. The theme is “10 years on – Adding Value to New Zealand’s Plant Biosecurity System through Research”.

Today I want to talk to you about the importance of biosecurity to New Zealand, and the importance of scientific research to back it up.

I want to start by acknowledging the B3 partnership as a great model for working together on research.

The signed up partners include four Crown Research Institutes (CRI), a university based research entity, three government agencies, and an industry group. It’s important that it involves end-users from both government and industry.

The importance of biosecurity

Everyone here has probably heard me say many times that “biosecurity is my number one priority as Minister.” Today I want to say a few words to remind why that is, and why this agreement today is so important.

The primary sector is the powerhouse of New Zealand’s economy, accounting for over 70 percent of our export earnings.

It helps pay the bills for our schools, hospitals and social services, and supports many jobs in our regions and cities. . .

Farmers cream productivity profit:

ANZ Bank economist Con Williams says many people are overlooking the huge improvements in productivity dairy farmers have achieved recently.

Fonterra on Wednesday set next season’s initial forecast farmgate milk price at $7 per kilo of milk solids, which was higher than some had expected.

However, the dairy giant has cut this season’s forecast payout by 25 cents to $8.40 per kilo of milk solids. That would reduce farmers’ incomes by nearly $400 million but Mr said it represented just a little less cream from what was still a record payout.

The average annual yield per cow was close to 381kg of milk solids – a new record and about 7.5 percent ahead of trend. . .

NIWA gets down to brass tacks with farmers – Tony Benny:

National Fieldays seminar host Niwa is taking its science directly to farmers to optimise water use and lessen the negative impacts of dairy effluent.

National Institute of Water and Atmospheric Research’s chief scientist, environmental information, Jochen Schmidt, said the organisation has moved its focus to the one-on-one farmer level gradually over the past five years. 

“This is definitely an area that we’re strategically pushing at the moment. The minister [Science and Innovation Minister Steven Joyce] is our shareholder and that’s what he told us because the growth agenda is out there and we want to ensure our primary sector is growing while sustainably managing the environment. . .

 

StockSense workshops take pressure off calving:

DairyNZ is running 19 StockSense events in June and July to help farmers prepare for the calving season.

The events are split into two workshops – one for junior staff and one for senior staff – with each workshop focusing on developing skills to help the calving season go well and reduce stress.

Humane slaughter on-farm and udder health will be the focus of the senior level workshop.

DairyNZ’s animal husbandry and welfare team manager, Chris Leach, says the humane slaughter topic is particularly timely due to the expected change in the animal welfare code and the implications for farmers.

“Farmers need to understand what’s expected of them,” says Chris.

The senior workshop will also focus on actions owners and managers can take to reduce stress for themselves and their teams, to help calving go smoothly.

“The workshop will provide tips and tricks to stay healthy during the busy period. Being prepared and staying healthy eases stress and will make for an easier spring,” says Chris. . .

New report shows PGP delivering major benefits:

Primary Industries Minister Nathan Guy has welcomed the findings of an independent report into the Primary Growth Partnership (PGP), which estimates it will add $6.4 billion per annum to New Zealand’s economy by 2025.

“The NZIER report further concludes that the PGP has the potential to achieve an additional $4.7 billion per annum by 2025 if all the R&D is successful, the aspirational stretch of PGP programmes is achieved, and the innovations are widely uptaken. 

“This would add up to $11.1 billion per annum to New Zealand’s economy by 2025.

“The PGP is about supporting innovation in the primary industries, which are the backbone of New Zealand’s economy – accounting for over 70% of our merchandise exports. There are currently 18 announced programmes jointly funded by industry and government.” . .

Steak stakes double success:

Ballyhooley Beef has done it again – winning best retail brand with the Murray Grey meat at the Steak of Origin competition last week in Feilding.

But this year, Winton farmer Barry Macdonald and his beef have done one better, as his steak was chosen as the tastiest by the public, also winning the people’s choice award.

In what was a first for the competition, Mr Macdonald’s steak was put up against the other 19 finalists to see which the public liked best. . .

2013 winner a bachelor no more – Sonita Chandar:

Sorry ladies, it’s official – 2013 Fieldays Rural Bachelor of the Year Simon Washer is now spoken for.

However, a whole new group of eligible young men are set to strut their stuff at the NZ National Agricultural Fieldays in June.

Washer only entered the competition by default as his fellow members of the local young farmers’ club balked at the idea of entering.

“I was the chairman of the club at the time the entry form came through and when I asked the guys if anyone was interested in entering, they all gave me a dirty look,  pointed the finger at me and then nominated me so I didn’t really have much of a choice. . . .

 

 


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