Lower milk price good in long run

18/04/2015

Dairy farmers aren’t enjoying the lower prices that have followed a drop in demand for milk, but they could be good in the long run:

Low dairy prices will benefit the New Zealand dairy industry in the long term, Lincoln University Agribusiness and Food Marketing Programme Director Nic Lees says.

“The low prices are the best thing that can happen as it will limit the European expansion.”

He says a cost war is going on between New Zealand and Europe at the moment.

“Quotas have come off production in Europe so they are expanding production. This is similar to what is happening in oil with expanding production due to shale gas,” Mr Lees says.

“Ireland, for example, is planning to increase milk production by 50 per cent.”

A Dutch dairy farmer who visited us last year had begun increasing his cow numbers in preparation for the end of quotas.

He says New Zealand is the Saudi Arabia of milk — “We can be the lowest cost producer, but need to focus on grass based production to weather the storm”.

“Grass will always be the lowest cost source of feed and New Zealand has the most efficient grass- based dairy system in the world.

“Ireland can grow grass too but currently they utilise less than half what they grow. The large housed dairy operations in Europe are also only profitable at high milk prices,’’ Mr Lees says.

“We need to focus on what we are good at, which is grass.”

Higher prices encouraged farmers to use more expensive feeding systems but our climate and soils give us a natural advantage in growing grass.

The halcyon days may be gone for a while though.

“We are unlikely to see high prices again soon.

“It is going to be a slow recovery of price and dairy farmers need to be able to be profitable at $5/kgMS or they won’t survive.”

He says the average milk price over the last 10 years was around $5.50/kg MS.

“It is likely that this will be similar over the next decade as well. What we are seeing though is greater volatility. This is going to continue so farmers need to have systems that are still profitable when the price is low. The most resilient system is the low input grass based system.”

As an economy we also need to see the opportunities in other areas, he adds.

“For example there have been record high returns for beef in the first six months of this season, with the average per tonne value up 28 per cent. Beef is a great story with China needing to increase its beef imports by up to 20 per cent a year for the next five years to meet its surging demand for protein.”

Lamb also has good prospects, Mr Lees says, and there are other opportunities, such as can be seen with the growing sheep dairy industry.

Lower dairy prices will take the heat out of land prices.

They’ll also make conventional sheep and beef farming more attractive and there is potential for more sheep milk production.

 


Rural round-up

16/03/2015

Dairy firms confident of safety, security systems – Alan Williams:

Dairy manufacturing companies are very confident of their food safety systems against any risk of the 1080 threat but one has stepped up its security.

Synlait Milk has brought in round the clock physical security checks for site access, including photo identification for all staff at its plant in central Canterbury. . .

Women must invite themselves –  Annette Scott:

A report suggesting business women need to get more assertive to arrest the dramatic fall in women around New Zealand board tables has been challenged by industry experts.

 Dairy Women’s Network (DWN) chief executive Zelda de Villiers acknowledged it was a challenge for women to get their feet under the table in the male-dominated agribusiness sector. . .

Picked, washed, packed and stacked, it’s all about apples  – Lynda van Kempen :

This year, almost more than 10,000 tonnes of Otago apples will be traded in more than 60 countries around the world. The apple industry has kept the van der Voort family in business in Central Otago for 50 years. Their Ettrick apple export packhouse is one of New Zealand’s largest. Reporter Lynda van Kempen follows some early season Cox’s Orange apples, as careful hands and high technology guide the way from picking and packing to trucking out.

Collected from home, a quick bath, a spin through the packhouse and then chilling out on a leisurely sea cruise before meeting the fans overseas – that’s the lot of an Otago-grown export apple. . .

Sheep and beef are doing it tough in drought – Tim Cronshaw:

The drought has put a dent in the incomes of South Island sheep and beef farmers, particularly those with lower beef cattle ratios.

South Island prices at about $4.95 a kilogram for an average 17 kilogram lamb are back about 12 per cent from $5.55/kg the same time last year. A gap lies between southern returns and North Island prices of $5 to $5.10/kg.

Lamb volumes have increased as farmers cull more stock during the drought through much of the South Island’s east coast. Volumes were up 11 per cent at 9.1 million lambs the middle of last month from 8.2 million the same time last year. . .

Alliance steps up its links with rural women – Tim Cronshaw:

Half of the Alliance Group’s 5000 shareholders are women and the meat processor and exporter is strengthening its links with them to help them improve their decision-making on farms.

A Nelson visit to a meat plant today followed a Christchurch workshop yesterday and a visit to Alliance’s Smithfield site in South Canterbury this week.

The workshops were devised after it was noticed that women sometimes felt uncomfortable attending Alliance meetings and a pilot was held in Invercargill last year. . .

New Zealand’s first purpose-built calf feeding system has been developed:

Inspired by a European farming system, but with an understanding that New Zealand farms are different, a local engineer has developed New Zealand’s first purpose built calf feeding system. CalfSMART has the potential to reduce labour costs and lead to overall herd improvements.

New Zealand has nearly 12,000 dairy herds that rear cohorts of calves ranging in size from less than 100 to over 250. The largest 15% of New Zealand’s dairy farms rear 35% of the entire country’s replacement heifers. Traditionally, calf rearing has been carried out by farming families, however in recent years as farms grow in size this work has increasingly been carried out by a migratory workforce. . .

 

 


Nearly 1 in 10 want to quit dairy

07/10/2014

Almost 1 in 10 dairy farmers are considering getting out of the industry:

According to DairyCo’s Farmer Intentions Survey, milk producers have lost confidence in the industry over the past year, with 9% planning to quit within the next two years.

This is in Britain, not New Zealand.

Only 32% of 1,230 UK respondents planned to increase production over the next couple of years, compared to 36% at the same time last year. “There was a noticeable increase in the proportion of farmers who were undecided on production levels two years hence, up from 5% in 2012 to 13% this year,” said the report. “This is likely to be a response to the difficulties faced during the 2012-13 milk year and the continued uncertainty on operating conditions for the upcoming year.” . . .

The high level of uncertainty meant 36% of farmers were undecided on investment plans for the next five years, up from 12% in last year’s survey. The number planning to invest nothing over the next five years increased from 12% to 29% over the same period. . . .

The forecast payout for the current season here is uncomfortably close to break-even for most farmers here.

But in spite of that the industry is in a much healthier state than it is in the UK and the medium to long term outlook is good.


Dairying cuts needed on light soils?

04/06/2014

Dairy cow numbers might have to be cut on light soils, Federated Farmers president Bruce Wills says.

“We’re losing too much nitrogen. The massive shift to dairy has caught us, and the science hasn’t kept up.”

The “easy yards” of fencing waterways, modern effluent systems and fertiliser application advice had been done, but nitrogen was still leaching into streams, he said.

“It’s a hard conversation, but we have to have it.

“The guys leaching 70, 80, 90kg of nitrogen per hectare per year on the lighter soils will have to get that down to 30-40kg.

“If science won’t deliver the goods, we’re going to have to get these people to change their farming system.

“That’s not easy when a lot of them have borrowed many millions of dollars to get a system going and they’ve got a bit caught with interest payments.”

Regional councils are already imposing lower limits on sensitive soils, particularly those near waterways.

Many farmers had changed already, Wills said. “They’ve read the signals, backed off from four cows per hectare to 3-3.5 cows, and put in less inputs.”

This did not necessarily mean reduced profits, he said. “What we’re finding is that as well as a more relaxed, comfortable farming system, they’re actually making a higher net profit.”

While farmers were prepared to act more responsibly to protect the environment, their businesses had to remain economic, he said. “My worry is the pendulum is going to swing too far in favour of the environment.”

Farming, and dairying in particular is being blamed for problems which have multiple causes and have been building up over many years.

The remedy isn’t always as simples as reducing stock numbers.

Science-based solutions are helping but reversing damage which happened over a long period takes time.

It’s easy to sell the message that economic development shouldn’t come at the cost of the environment.

That shouldn’t be taken to the extreme where standards based on emotion rather than science lead to environmental concerns getting out of balance from the economic and social ones.

He said Labour finance spokesman David Parker was calling for the scrapping of the irrigation investment fund and for charges on water.

“If we had a change of government, we can kiss goodbye to any hope of meeting the ag double of increasing the export value.

 

Labour has made it quite clear it doesn’t understand farming and its importance to the economic and social fabric of the country.

That they’d be in coalition with the Green Party whose carbon tax, water charges and other anti-farming policies makes the prospect of them in government even more dangerous.

The silver lining to this red-green cloud is that persuading farmers to support National gets easier with every utterance from the opposition.


Rural round-up

16/05/2014

One in the eye for dairying’s critics – Jon Morgan:

Dairying is the popular whipping boy of the age. Dissembling politicians, rabid environmentalists, lazy news media, ignorant online commenters – they all have a go.

They peddle the usual half-truths and blatant lies: Dairying is responsible for all water pollution, dairy farmers are saddled with too much debt, they are running too many cows, using too much nitrogen fertiliser and poisoning the soils and plants, they mistreat their workers, they don’t pay their fair share of taxes, they’re responsible for global warming, the moral decay of today’s youth, war in Ukraine, the Pope turning Communist and, don’t forget, they also shot JFK.

However, one or two of their assumptions will have to be revised after the release of the latest DairyNZ economic survey.

It was a surprise even for those who support dairying to learn from the survey – which has been running for 50 years – that the costs of dairy farming have stayed the same for the past 25 years and that farms are as affordable as 40 years ago. . .

Angus cleans up at Steak of Origin Grand Final:

Colin Brown from Cambridge has been named Grand Champion in the 2014 Beef + Lamb New Zealand Steak of Origin competition with his Angus processed at AgResearch Ruakura.

After being a finalist in previous years and his Lake Farm Beef brand winning Supreme Brand in 2009, Colin has taken out the competition, sponsored by Zoetis, to find the country’s most tender and tasty sirloin steak in the Grand Final at AgInnovation in Feilding this evening.

Colin is humbled with the announcement.  “I am absolutely thrilled with the result after being named as a finalist four times in the last six years, and finally taking the title”, he says. . . .

Victory for man with big stake in beef:

It’s taken a few years, but an artisan beef producer has finally cracked the big one.

Colin Brown of Lake Farm on the shore of lake Karapiro in Waikato won the grand champion title in the Steak of Origin competition this week with a pure Angus sirloin steak.

He’s been a finalist for four of the past six years and in 2009 he won the supreme brand award with his Lake Farm Beef brand.

He’s a small scale operator, producing his beef from 100 cattle, and selling directly to customers through the internet. . .

Rockstar awards showcase our rockstar dairy industry:

The only shame about last Friday’s 2014 New Zealand Dairy Awards, at Auckland’s SkyCity, was the absence of the dairying’s most ardent critics.  Instead it was the perfect showcase for the capability and dynamism of New Zealand’s leading export industry. 

“I can forgive the print media as the Canon Awards were on the same night and the media at our industry’s event got to see dairying in its dynamic reality.  Special thanks must go to the brilliant MC Mike McRoberts but especially the New Zealand Dairy Industry Awards Trust,” says Willy Leferink, Federated Farmers Dairy chairperson.

“I honestly thought there would have been more than one Member of Parliament present but as MP’s go, the Minister for Primary Industries is a very big fish indeed.

“After the awards I saw one political party leader in a debate label-dairy low value.  There is no way you could hold those views if he’d attended these awards.  That’s the problem we have.  There are some who won’t risk shaking their beliefs by opening their eyes. . .

Firenze sires 40,000 cows, retires:

With more than 40,000 daughters in New Zealand alone there’s no denying Firenze has been one very busy bull.

The herd improvement company CRV Ambreed retired the 12-year-old holstein-friesian bull this week at a ceremony in Hamilton.

Firenze has generated about $8 million in revenue and produced about 650,000 doses of semen that have been sold around the world.

Now he’s heading back to the farm where he came from near Dunedin.

His original owner, Philip Wilson, says he’s going to ensure Firenze sees out his days in style.

“Well, we’re just bringing him home because we are proud of him and we reckon he deserves a bloody good retirement. . . .

UN look to Marlborough grape vine pruning crews – Chloe Winter:

Marlborough’s autumn colours are slowly disappearing as vine-pruning contractors move in to prepare the vineyards for next season’s growth.

Alapa Viticultural Services owner Alan Wilkinson has a team of 230 workers for the pruning season.

The workers were from Thailand, Japan, Samoa, China, Malaysia and the Czech Republic and would stay until the end of the season in September.

By that time, more than four million plants would have been pruned, stripped and wrapped, Wilkinson said. . .

 Bee’s conference breaking ground for the industry:

This year, for the first time, Federated Farmers Bee Industry Group will be joining with the National Beekeepers Association to host a New Zealand Apiculture Industry Conference in Wanganui.

“The theme of this conference is “Working Together” with a critical focus on advancing our fast growing and vital industry that is pivotal to New Zealand’s economy, with an estimated annual contribution of $5 billion a year,” says John Hartnell, Federated Farmers Bee Chairperson. . . .


Fonterra must lift game – Spierings

28/11/2013

Fonterra chief executive Theo Spierings said this will be a record season but the company must lift its game:

An optimistic Spierings told the meeting in Edendale he expected it would be an “outstanding year” for the corporation, farmers and shareholders.

He estimated 2.5 to 3 per cent growth.

The forecast cash payout for 2013-14 has been worked out as a farmgate milk price of $8.30 per kilogram of milksolids, with an estimated dividend of 32 cents per share, to give farmers a record payout of $8.62.

Speaking about the botulism scare which hit the co-op earlier this year, Spierings said Fonterra was now in rebuild mode and in a good space with local authorities and customers.

He said Fonterra was not walking away from the event and had to lift its game in food supply quality and sustainability.

Farmers wanted to see Fonterra learn from the scare, translate this into actions and come out stronger, he said.

His promise to farmers was that Fonterra would learn and lift its standards. . .

The company let itself, its customers, its shareholders and the country down.

It must implement all the recommendations in the report on the incident to ensure it does everything to prevent a repeat of that incident and that it is far better prepared for any future problems.

Spierings said there were areas Fonterra “must do better” and work was under way.

“Going forward, when we want to grow dairy, we will need to do it in a sustainable way.” This was not just “on farm” but included factory and logistics.

Fonterra wanted to look forwards and had a 10-year growth plan, which it had presented to the Government.

Southland, one of the four pillars of the New Zealand dairy sector, was still growing in farm conversions and cow numbers.

However, the game had to shift from just adding animals and become more sustainable, he said.

Southland farmers were looking for solutions in sustainability, environment and winter milk.

“But there are definitely issues they still want to discuss with us.”

With regard to sustainability solutions, it would not be a one size fits all – Fonterra would look at each farm individually, he said.

Sustainability in the entire supply chain was the key to securing further international growth and Fonterra now had a strategic plan for this.

Spierings spoke about Parliamentary Commissioner Dr Jan Wright’s Water quality in New Zealand report released last week.

He said the report was “in the past and looking backwards”.

It looked at samples and situations which Fonterra had already said a few years ago were not good enough and had started to fence waterways.

But last week Dr Wright said the report, based on satellite images from 2008, included current best practices.

Spierings said Fonterra farmers had now fenced 20,400 kilometres of waterways – about 90 per cent.

The final 10 per cent, mostly in hilly terrain, would be done because such fencing was part of the Fonterra supply contract.

He said Fonterra would consider doing its own scientific water research project.

Dairy’s reputation isn’t good.

Too often discussion of it is prefaced with the word dirty.

Some of that is based on perception rather than reality.

Big improvements have been made – in attitude and practice  – but there are areas of concern which still need to be addressed.

Fonterra  must do all it can to ensure it and its farmers are operating in a sustainable way.


Rural round-up

04/11/2013

Few farms in foreign hands says English – Alan Wood:

Foreign investment in New Zealand farmland, including dairy farms, remains relatively low and has significant safeguards, Finance Minister Bill English says.

Some investment, including that in the Crafar farms in the North Island by the Chinese, has raised the hackles of some Kiwis.

For example, Campaign Against Foreign Control of Aotearoa spokesman Murray Horton says he is firmly against ownership of New Zealand land by foreigners, whether they be Chinese, American, Australian or British.

Last month the China-based Shanghai Pengxin Group announced a takeover bid for Synlait Farms, in association with two of Synlait’s founders, John Penno and Juliet Maclean. . .

The Industrialisation of American Dairying and the Implications for New Zealand: Keith Woodford:

The ‘handout notes’ that follow were written  for a Lincoln University Dairy Farm Focus Day on 10 October 2013. These focus days are held every two months. This one was attended by about 200 farmers and rural professionals. I gave the presentation as Lincoln’s Professor of Farm Management and Agribusiness, standing on a trailer out in the paddock – so basically it was all ad libbed without visual aids. Actually,  sometimes it is fun to talk without the distraction of powerpoints!

Background

  • The American dairy industry is rapidly transforming to an industrial model based on large scale (>2000 cow) mega farms.
  • As of 2013, approximately 40% of American production comes from 800 mega farms.
  • Another 30% comes from a further 2500 farms, each with between 500 and 2,000 cows.
  • The final 30% comes from more than 50,000 farms with less than 500 cows
  • The mega farms have costs of production that are much lower than the smaller farms. . .

 

Farming robot could bring the cows in – Jill Galloway:

“Like a four-wheel-drive wheelchair on steroids” is how Andrew Manderson describes his Agri-Rover.

He designed the prototype farm robot which was built by a team from AgResearch and Lincoln University, using industrial parts and costing $4000.

It was a robust machine and had a powerful engine, said Dr Manderson.

It would comfortably trundle around a paddock, so long as it didn’t encounter a gradient of more than 20 degrees.

He said it had a top speed of 5kmh, but with a few adjustments it could really motor.

(Click on the link above to see a video of the robot in action)

Winning the battle against boxthorn pest – Ruth Grundy:

Graeme Loh is the first to admit he is more ”exterminator” than ”nurturer”.

He is the Department of Conservation (Doc) ranger who oversees one of the country’s newest reserves, a prominent and ancient limestone outcrop at Gards Rd, between Duntroon and Kurow.

He said his main focus was to eradicate an aggressive exotic invader – boxthorn – which threatened to appropriate this national treasure.

”People don’t realise how bad a weed it is and how difficult it is to remove.” . . .

Farmsafe says quad bike research backs roll bars – Anna Vidot:

Farm safety advocates say the science is in, and now is the time to start encouraging people to use quad bikes with roll bars.

Manufacturers of the vehicles have long argued that crush protection bars cause more injuries than they prevent, and take the focus away from other safety measures like helmets and proper training.

But Farmsafe Australia says there’s mounting evidence that crush protection bars are more likely to save a life than not, if a quad bike rolls. . . .

Dogs queue up for aversion training

Kiwi advocate Lesley Baigent  was  gratified by the response  to Saturday’s kiwi aversion  training session for dogs at the
Raetea reserve, at the northern foot of the Mangamuka  Gorge.

Dogs were literally queuing  up to undergo the training,  which involves a special collar  delivering an electric shock at  the appropriate moment to  persuade the dogs that kiwi  are best left alone. Success rates varied, Lesley said, and there were certainly  no expectations of 100 per  cent. . . .


USA fracking helps NZ dairying

31/10/2013

Tweet of the day:

Federated Farmers@FedFarmers 46m

Fracking will mean the United States will be energy self-sufficient that will make the US dairy Industry uncompetitive. ..good news that!

We like good news for dairying in #gigatownoamaru .


Dairying is diversification

09/08/2013

Labour’s initial response to the whey protein contamination was restrained but the restraint didn’t last long.

During Question Time yesterday David Parker reminded us that his party doesn’t like dairying.

Hon David Parker: Does he agree with the article in the Washington Post on 7 August that the botulism issue highlights New Zealand’s reliance on dairy exports?

Hon BILL ENGLISH: Well, you did not need the botulism issue to highlight the importance of the dairy industry to New Zealand. I must say that the dairy industry deserves some support, despite New Zealand talking for 20 or 30 years about being too reliant on commodities. The dairy industry has performed better than the fashion industry, the IT industry, the wine industry, and the film industry, and it has injected billions of dollars of extra income into this economy in the last decade. We think that is not a bad performance.

Hon David Parker: Given that over the last 5 years under National, New Zealand’s reliance upon dairying has increased and the latest jobs statistics show a further decline in manufacturing employment, how can he deny that he has failed to rebalance and diversify the export sector despite his promise to do so?

Hon BILL ENGLISH: As the member may well know, it is not really a matter of whether Governments can just pick to have another industry. New Zealand has 30 years of experience of trying to do that, and how it has turned out is that we are very good at some things, such as the production of protein and high-value niche manufacturing, and those are the growing parts of the economy. Labour thinks it is good at government, and it decided to grow the Government part of the economy. Well, it turned out that that does not work very well.

This week’s food health scare, made worse by Fonterra’s response, has reinforced just how reliant we are on dairying.

It would be better if our economy was more diversified but Rob Hosking points out that diversification is a slogan not a policy.

He also points out that dairying is diversification.

Forty years ago we depended on the produce of one animal in one market – sheep in Britain.

Successive governments tried various ways to foster a variety of industries, without success, but dairying has grown without any government initiatives.

Farmers have made the most of New Zealand’s natural advantages to respond to international market signals driven by growing global demand for protein by producing, and selling more milk.

The export income and economic growth which has resulted from that has made a significant contribution to helping the country through the global financial crisis.

We would have done even better had we been producing lots more of whatever else the world wants and is prepared to pay for.

A broader economic base would make the country stronger but Labour’s failed strategy of bigger government wouldn’t.


Perfect storm shows sheepmeat challenges

05/06/2013

A report from Rabobank shows the challenges facing the sheep industry:

The New Zealand sheepmeat industry has been riding a ‘rollercoaster of returns’ in recent years, according to agribusiness banking specialist, Rabobank. A perfect storm of high supply, strong local currency and weak consumer demand has reduced returns and some key challenges must be addressed in order to secure a prosperous future for the sector.

In its recently released report ‘Sheepmeat – riding the rollercoaster of returns’ reviewing the sheepmeat sectors in New Zealand and Australia, Rabobank says in order to capitalise as conditions improve in established export markets, the sector will need to retain sufficient scale and market presence relative to competing meats.

Rabobank CEO New Zealand Ben Russell says the industry has experienced extreme volatility in returns throughout the value chain, and that is likely to continue with an expected supply shortfall looming in the coming season.

“The New Zealand sheep flock has been declining in size for many years with the drought and lower prices last season likely to see that trend continue next year,” he said.

“The shrinking flock has created structural over-capacity that will need to be addressed, however there are risks and practical challenges in achieving this that need to be carefully considered by processing companies.

“Ultimately the path to greater industry prosperity and growth is creating more value for consumers and a more efficient supply chain, including on-farm, procurement, processing and marketing.”

Better returns for sheep farmers depend not just on better prices for meat, it requires better returns for by-products including wool.

New Zealand’s sheep industry started to produce wool. The introduction of refrigeration enabled meat to be exported too but wool was still an important part of sheep farmers’ incomes.

Two or three seasons ago strong wool prices were reasonable but they’re fallen away again and that is one of the reasons sheep farmers’ incomes have slumped.

Notwithstanding the challenges facing the sheepmeat industry, Mr Russell says Rabobank remains enthusiastic about the long-term potential for the sector in New Zealand, and working alongside its clients throughout the supply chain to capitalise on future opportunities.

Report author, Rabobank animal proteins analyst Matt Costello says that, given the sector’s exposure to and reliance on export markets, and the fact that sheepmeat is a higher valued product, the sheepmeat industry is dependent on the economic environment and consumers in these markets.

“Market demand for sheepmeat has been subdued as a result of higher prices and fragile economies, especially in Europe, whereas Asia and the Middle East have emerged as stronger markets and should be cultivated,” he says.

“With an improving outlook in some of the lucrative sheepmeat export markets and with the optimism surrounding the potential of developing markets such as China – New Media Release June 3, 2013 2
Zealand and Australia will be the only countries positioned to supply consumers around the world.

“It is increasingly important that the sheepmeat sector retains significant scale and market presence in comparison to competing meats to remain viable and capitalise on the longer-term growth opportunities.”

Part of the problem in New Zealand isn’t competition from other meats in export markets, it’s competition for land from dairying.

Dairy returns are better and improving which has pushed up farm prices. Growing demand for milk can support the increase in prices, volatile returns for sheepmeat can’t.

The big ‘dip’

The Rabobank report finds that the variation in returns for sheepmeat producers and exporters over the past few years has been significant, with “unprecedented” volatility.

Mr Costello says there is a lack of confidence among producers across the sheepmeat industries in both countries.

“The extreme high and low points over the past few years have not helped anyone, only serving to add to frustration and disillusionment,” he says.

“In simple terms, historically tight supply from both New Zealand and Australia underpinned the initial surge in livestock prices during 2010 and 2011, and the ensuing weak prices through 2012 and 2013 have been driven by higher short-term production due to the extremely dry conditions across both countries.”

While tighter supply in 2013/14 will assist to firm pricing over the coming year, a more sustainable market recovery will need to be driven by improved consumer demand and ultimately a more buoyant global economy.

Sheepmeat isn’t a traditional food in many parts of the world but the demand for protein from developing countries might help that.

Emerging markets

Globally, rising prices have been met by stubborn consumers in the major sheepmeat export markets of the EU, UK and the US. The emergence of developing markets throughout Asia and the Middle East has helped to offset the declines in volumes and, to a lesser extent, returns from the traditional export markets.

Not only is weak consumer demand impacting returns for the industry currently, but a persistently high exchange rate has also been challenging both countries.

Even with a slight fall in recent weeks, the prolonged high dollar in both New Zealand and Australia has been pressuring competitiveness in the global market, resulting in substitution and weaker export demand for sheepmeat, the Rabobank report says.
China, the report says, is a good example of the emerging market demand for sheepmeat.

Mr Costello says China became the largest single sheepmeat export market for New Zealand in 2012, surpassing the UK for the first time ever. Furthermore, China is now Australia’s largest sheepmeat export destination. Media Release June 3, 2013 3
“The emergence of China has seen a much greater utilisation of the whole carcass as demand has grown for items that were once rendered or offloaded at a discount and sheepmeat demand is expected to grow as affluence continues to increase,” Mr Costello says.

Utilisation of the whole carcass helps returns.

If only we could persuade the Chinese to embrace wool as well . . .


Mobile milking sheds

18/01/2013

When we were in Argentina last September we visited a farm which had a mobile milking shed.

hp mobile

hp mobile 2

The main reason for using it there is that the land is leased. The mobile shed enabled the lessee to have a dairy farm without investing capital which he wouldn’t be able to recoup when the lease ran out.

I can see possibilities for mobile sheds here for emergency use, for example during prolonged power cuts or after earthquakes; but I wasn’t sure if our environmental requirements would enable them to be used more permanently.

However, Milking on the Moove has posts on the mobile milking systemmobile cowshed and & nitrate leaching of dairy cows;  and mobile milking system: alternative to sharemilking which suggest it could be done.


Without them we’d be Greece

25/07/2012

Quote of the day:

Every week we borrow from the savings of hardworking Swiss, Germans and Chinese so we can keep consuming.  New Zealand would be another Greece without those who get up in the morning and milk the cows; those who take the milk, process it, and sell powder to the world.

In the year to December 2011, dairying generated almost 13 billion in exports – it accounts for about 25 per cent of our exports.  Dairy exports help close our current account deficit and that means lower borrowing costs for all business.

The ACT Party stands with the productive; the wealth creators.  Yes a tiny minority of dairy farmers ignore their responsibility not to pollute local waterways.  But the vast bulk of farmers are keen on a clean environment.

To damn a whole industry as ‘dirty dairying’ because of a tiny minority – as some in this House do – is just ignorant.

Members of Parliament should be deeply grateful for dairying – it keeps the lights on in this place. . .  John Banks.


Gypsy Day

01/06/2012

Today is  Gypsy Day which signals a change of job and home for hundreds of dairy farm staff and thousands of cows.

While June 1 is the date that new-season contracts come into effect,  the moving isn’t confined to a single day. It is more Gypsy week or even month as all those managers, share milkers, other dairy staff, their families, household goods, vehicles, machinery and animals move farms.

The peripatetic nature of dairy farm work affects not just the workers and their families but the communities from and to which they move.

Rural communities where sheep, beef or cropping were in the majority used to have relatively stable populations with many families staying on the same farm, or at least in the same district, for generations.

That might not be quite as common now as it used to be but it is still more the norm than in areas where dairying predominates.

Dairying is different from other types of farming as staff regularly move from farm to farm as they advance up the managerial or share milking ladders.

The transient nature of the increased population does make it harder for people to know their neighbours and we have to work harder to retain a sense of community.

However, if  dairy farm workers are more mobile, they are also more numerous.

Dairying boosts the population of farming areas because it is more labour intensive. That is generally positive, bringing more people to support local businesses and organisations and more children for what are often small schools.

That many of them aren’t there for the long-term is due to the nature of the industry which turns many of its workers into Gypsies each June.


Doesn’t look like an accident

13/01/2012

The best designed effluent systems aren’t immune from human errors and break-downs which can lead to accidental discharges in the wrong place.

That doesn’t make it right but it could be a mitigating factor if damage is done.

However, if the facts of this case as reported are true, it doesn’t look like an accident:

Lloyd disconnected an open pipe from a blocked irrigator and placed it under trees nearby, allowing the effluent to discharge for four days before the pipe was found by Environment Canterbury (ECan) staff.

Unfortunately this enables opponents of dairying to tar all farmers with the same dirty brush.


No “only” in imposing cost

29/08/2011

The Green Party is using MAF profitability statistics to claim its irrigation tax proposal is affordable:

“MAF’s typical dairy farm in Canterbury has a net cash income of $2.2 million, so even using Irrigation New Zealand’s own hefty numbers for water use, we find that our irrigation charge is only 4.8 percent of income,” Dr Norman said .

There is no only about adding costs amounting to 4.8% of income to any business.

Every cent added to cost has to be either absorbed which reduces profitability or passed on by way of increased prices for produce.

“Our charge is 1/100th of a cent per litre. When irrigators are complaining of the high fees they would pay, it just goes to show that they are using massive amounts of our public water resource.

They are also providing employment, producing food and earning export income from which everyone benefits. 

“Furthermore, the MAF profitability statistics for 2010/11 show that after paying our suggested charge for irrigation water, Canterbury dairy farmers would still on, average, receive over $500,000 in farm profit before tax.

Perhaps he could tell Labour that farmers do pay tax.

“Businesses that use public water resources to generate private profit should pay.

Farms aren’t the only businesses which use water, every business does in greater or lesser amounts and it’s private profit which provides jobs and pays taxes.

“A charge on irrigation water is an effective price signal to more efficiently allocate a scarce resource and is in line with the OECD recommendation that we put a price on agricultural uses of water.

We already pay for irrigation and not all irrigation is used for dairying.

Central Otago District Mayor Tony Lepper manages the Earnscleugh Irrigation Scheme, which supplies 110 landowners and covers 1100ha and charges landowners about $51 per hectare a year.

“With the addition of other small charges, our income is $65,000 per annum, and with this we run a fantastic co-operative irrigation scheme that is of tremendous benefit to the Central Otago economy,” he said.

“Under the Greens’ new policy and proposed rate of 10c per 1000 litres, we would have to fund an additional $1.76 million a year, from our landowners.

“You do not have to be a genius to work out what this would do to the viability of our local horticulture and farming businesses.”

Wouldn’t it be ironic if the tax the Greens want to impose on irrigation because they don’t like dairying led to more of it because other land-uses became uneconomic?

Clean water is a basic necessity but there are far better ways of maintaining and improving waterways than  imposing a tax on irrigation.


Ngai Tahu plans dairy farms

06/01/2011

Ngai Tahu is planning to develop some of its land for dairying:

The board of Te Runanga o Ngai Tahu (Tront) has approved a proposal to trial three dairy farms, with milk production to begin as early as next year.

The iwi outlined its aim of becoming a national leader in sustainable dairying practices to its shareholders at its annual meeting at Karitane late last year.

This is good news for Ngai Tahu, dairying and the wider economy and if the commitment to sustainable practices is upheld it won’t impact negatively on the environment.

. . . Ngai Tahu Property chief executive Tony Sewell told the iwi magazine, Te Karaka: “We are a massive land holder in Canterbury and economically the highest and best uses for this land is to convert it to some form of agricultural use.”

“At this point in time, in economic terms, dairying far outweighs any other agricultural use but that doesn’t mean long term things won’t change.”

While it had objected to dairy farm operations in the past, notably those proposed for the Mackenzie Basin and Upper Waitaki, the iwi was prepared to take “ownership positions and leadership positions” in regards to its own dairying and water management operations, he said.

“We are a natural leader and already people and local and regional councils are coming to us wanting to know where we stand. And we have decided that we are standing here as a leader. It is a philosophical shift.”

Ngai Tahu is generally well regarded in the South Island for its successful business dealings and environmental management.

If it’s able to apply the skills it has in both these areas to dairying it will be very good for the runanga and the industry.


Cows worth far more than hobbits

07/11/2010

The dairy industry will be the focus of attention this week with 1400 delegates from 64 countries meeting in Auckland for the World Dairy Summit.

In preparation for that Fonterra has written an open letter to the country explaining the company’s commitment to sustainability:

As New Zealand’s home-grown, global co-operative, Fonterra is proud to welcome delegates to New Zealand. We bring in one in every four export dollars to New Zealand and we seek to make a lasting contribution to New Zealand and to the communities where we live and work.

We take great pride in being a pasture-based dairy producer and see this as a lasting advantage in our markets, in line with our vision of being a natural source of dairy nutrition. Like all food companies around the world we want to achieve the right balance between social, environmental and economic sustainability.

Over the past nine years, we have made steady gains in our environmental performance. We are committed to embedding sustainability into everything we do.

This means Fonterra and our farmers face complex choices including sources of feed, environmental impacts and animal health issues as we work hard to protect our competitive advantage internationally. To compete, we will always need to be a low cost and efficient producer and to deliver for our shareholders. But we will strive to do so in ways that meet our social and environmental responsibilities, and we will always respect the animals that are the source of our product.

Our commitment is to work together with our farmers, staff, customers, government, local authorities, iwi and the community to ensure good practice is the only practice. We all have a stake in building a sustainable dairy industry for the future.

We have made progress, but we are the first to accept that we still have a long way to go. We acknowledge that we need to intensify our efforts to continuously improve our performance. We believe sustainability will be one of the defining issues for the success of Fonterra and for the global dairy industry. We are focused on doing what’s right, not just on a ‘compliance – only’ approach, but one that excels at innovations which accelerate our ability to do more with less on farms, in our factories, on transport, and for our customers. . .

Poor practice – deliberate or accidental – by the company or its shareholders makes headlines. The on-going commitment by them to sustainability goes unnoticed.

However, it’s value to the country is being taken seriously:

First the Listener editorial made the connection:

. . . the most important money-earning mammals in the Waikato meadows are not hobbits but friesians.

Liam Dann makes a similar  point:

The budget for the two Hobbit films has been reported at a pretty epic $650 million.

Not all of that will be spent here, of course, a lot of it will be used to market the films.

But even if we see half a billion, the figure will be dwarfed by the returns generated from our dairy industry.

At levels confirmed yesterday, Fonterra’s payout forecasts for this season would see $9.11 billion injected into the economy in 2011.

That’s $500 million more than the season before and some $2.5 billion more than the season before that. . .

. . .  It was a drought and a commodity slump that led us into the economic downturn and it looks set to be the weather and a commodity boom that will lead us out.

Dairying might not be as sexy as film making but it earns far more money.

Fonterra and its shareholders are committed to ensuring its economic performance is matched by good environmental practices.


Quote of the week #1

09/10/2010

“The starting point of political correctness is a perfectly well-intentioned desire to give previously marginalised groups such as other races and cultures, women and homosexuals what in New Zealand we call a “fair go”.

The problem with political correctness is that this generous impulse is taken over and twisted into something else, something far less healthy.

“While exhorting us to be as ‘inclusive’ as we can,” writes [Roger] Scruton, “political correctness encourages the denigration of what is felt to be most especially ours . . .  Although they involve the deliberate condemnation of people on the grounds of class, race, sex or colour, the purpose is not to include the Other but to condemn Ourselves.

“The gentle advocacy of inclusion masks the far-from-gentle desire to exclude the old excluder: in other words to repudiate the cultural inheritance that defines us as something distinct from the rest.”

This definition is important in many ways because it makes the battle lines between a kind of non-ideological conservatism and the forces of political correctness much more clear.”

                                                                                                                         – Rob Hosking – print edition of the NBR.

He gives an example from the economy of what Scruton calls the culture of repudiation – environmentalists’ attempts to wreck dairying and says:

“It is a target not primarily because of its pollution – dairy farmers now have to be far more careful with their wastes than they did a generation ago – but because it is successful.

P.S.

If you’re interested in reading more from Roger Scruton,  a writer, philosopher and public commenter, he has a blog.


On farm life and deaths are messy

03/08/2010

In town life is clean.

Food comes from supermarkets in hygienic packages.

On farms life is a bit messier.

Food comes from living, breathing animals.

Life here is dirty and dusty, muddy and bloody and sometimes it’s not just life but death.

I don’t know any good farmer s who are complacent about animal deaths, whether they happen naturally or by human intervention to prevent suffering. But they can’t afford to be squeamish either.

TV1’s  Sunday evening news story on cow inductions was designed to be squeamish.

 Breakfast yesterday morning added some rational comments (though Pippa’s statement that if a cow didn’t calve in time “he or she” wouldn’t be able to get in calf again in time for next season shows a gap in her understanding of biology which ought to be addressed).

Last night’s news continued the story as if nothing was being done to change the practice.

It is, inductions which happen to a minority of cows on a minority of farms are being phased out and DairyNZ said the industry is united behind its plan:

Dr Rick Pridmore, Strategy and Investment Leader for Sustainability at DairyNZ says earlier this year the programme was revised to move the reduction target from a national herd level to targets at an individual farm level. These targets reduce over a three year period.

“The change to individual herd targets will focus efforts on the small tail of the industry who are yet to reduce their use of the practice. This small tail represents only 4.6% of the nation’s dairy cows.”

Letters were sent out to every dairy farmer in the country in early June telling them of this change. The industry stakeholders backing the programme are the New Zealand Veterinary Association, DairyNZ, Federated Farmers Dairy and the Dairy Companies Association of New Zealand.

The industry is collecting data on this procedure from all dairy farms as part of their annual farm drug use audit. Induction records will be sighted and checked, and the percentage of animals induced will be reported, with cross-checks back against veterinary records. In addition, any farm which does not meet the targets will be notified to their supplier through their veterinarian.

Dr Pridmore says the programme is phased over three years so farmers who use the practice can be supported as they change their farm system by making alternative stock management decisions, which is a complex and lengthy process for many.

“The key advantage of this new process is that we will be able to identify these businesses so we can support them with the InCalf educational programme as well as through the dairy companies and local veterinarians.”

Dr Pridmore says the practice is allowable under the Animal Welfare Act and the Dairy Cattle Code of Welfare so long as it is carried out by a veterinarian according to the guidelines set out in the agreed Operational Plan.

“The practice is not an issue of animal welfare, it is an ethical issue and one the industry has proactively reduced since the 1990s so that we are now dealing with the tail-end.”

 That last sentence is important: “”The practice is not an issue of animal welfare, it is an ethical issue . . .”

Ethics change. What was once regarded as acceptable is no longer and it’s being phased out.  Though like rivettingKate Taylor I do wonder what’s the story ? and note a double standard.

P.S.

The people who say they’ll give up milk  milk on the strength of this story should have nothing to worry about. If the milk comes from town supply herds, they calve all year round and wouldn’t normally be induced.


First they came for the pigs . . .

02/08/2010

Last year animal welfare activists targeted pig farming and they’ve had another go at it recently.

The grapevine warned us they would also be on the warpath during calving and lambing and they are.  TV1 news last night started with a story on inducing calves in dairy herds.

There are differing views on the practice – some vets say as long as it’s done properly it’s not inhumane, others oppose the practice.

Regardless of whether it is humane or not induction is  being phased out anyway.

The  reporter said cows are induced to get them producing milk earlier. That’s only part of the story – if cows are too late calving one season they’ll be later, sometimes too late, getting in calf for the following season.

The story also didn’t explain that cows are induced here because unlike most other countries we have seasonal milking.

Overseas where most of the milk produced is for the domestic market herds have some cows calving all through the year so it doesn’t really matter if the calves aren’t produced at a particular time. That happens with town supply herds here too but most of our herds produced milk for export.

Some farms milk through winter for export but most calve in spring, get the cows pregnant in early summer and stop milking by the end of May. This cycle follows grass growth – cows are producing milk when there’s more for them to eat. Grass growth slows or stops altogether over winter.

Cows which are too late for artificial insemination  or going to the bull or don’t conceive are usually culled.

When inductions stop altogether there will be more dry cows which will be sent to the works and farmers will be likely to increase the size of their herds to compensate.

No doubt some people will object to that too.


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