Lower milk price good in long run

April 18, 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

March 16, 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

October 7, 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?

June 4, 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

May 16, 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

November 28, 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

November 4, 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. . . .


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