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. . . 


People and birds pooh too

December 28, 2018

Auckland beaches are awash with human faeces.

Holidaymakers are being asked to avoid 12 Auckland beaches because they are contaminated by faeces.

An alert on the SafeSwim website today advises that water-quality models predict levels of Faecal Indicator Bacteria that exceed national guidelines for swimming, based on guidance published by the Ministry of Health and Ministry for the Environment.

Eight beaches in West Auckland and two in central Auckland have long-term alerts which rate them as no-swim zones. . . 

Further south Craig Hickman says seagulls are to blame:

As you travel north into Ashburton you are greeted by a stark black billboard with large white lettering making a very bold claim: Ravensdown & Ballance Pollute Rivers.

The billboard is in a 50km zone so your passenger may even get the chance to read the hashtag in the bottom left hand corner, #TooManyCows, and see Greenpeace’s distinct logo in the bottom right.

Shortly after passing the billboard you’ll drive over the bridge that spans the Ashburton River and through a flock of wheeling and squawking gulls in a scene reminiscent of the rubbish dumps of my childhood. You could take this opportunity to explain to your travelling companion that the guano from the thousands of gulls nesting in the braided river below is as thick as the irony contained in the billboard’s simplistic message.

You see, from State Highway 1 to the ocean it’s those native seagulls that are polluting our river, not a fertiliser company. There’s not as many nesting this year as have in the past, only an estimated 8000, but that’s still equivalent to 4000 cows pumping E.Coli into the river every single day.

That’s right, two seagulls excrete as much E.Coli per day as a single dairy cow, which is still far preferable to ducks, a single one of which poops out nearly 16 times as many of the nasty organisms daily as a cow does.

Up river you can still happily and safely swim, but once you reach the colony of seagulls the danger of getting sick becomes very real.

I guess NATIVE SEAGULLS ARE POLLUTING RIVERS wouldn’t cause the type of outrage their disingenuous offering is hoping for. . . 

Seagulls are the source of high E.Coli in the Kakanui River which borders our farm, and from which we get our drinking water.

If you listened to the propaganda you’d think that cows were the cause of all New Zealand’s water woes.

But people and birds pooh too and in Auckland and these rivers they are to blame for unhealthy water.

If farmers were to blame they’d be liable for prosecution and sizable fines.

If individuals aren’t responsible for the dirty beaches, at least one council is but rather than fines, it should be required to upgrade its storm and waste water systems urgently.

We can’t fine birds, but if they are so numerous as to cause significant pollution, why can’t some be culled?

There are strong calls to cull cows, but there’s one rule for bovines and another for the birds.


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. . . 


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