Rural round-up

August 25, 2019

Powering up well-beings could power up costs :

Federated Farmers is concerned the call on councils to “power up” the four well-beings re-introduced into local government legislation will pile on more costs for ratepayers.

“Councils up and down the country have lost the battle to keep rates increases in touch with inflation, and debt levels are soaring.  Many can’t keep up with the costs of activities and infrastructure maintenance/replacement that most residents would count as core – water, stormwater, flood protection, local roads, rubbish and recycling collection,” Feds President and local government spokesperson Katie Milne says.

“Yet Local Government Minister Nanaia Mahuta has just exhorted councils to power up ways communities can realise their ambitions for social, economic, environmental and cultural priorities.”  . . 

Food giant Danone signs deal to grow Waikato sheep milk industry – Andrea Fox:

New Zealand’s emerging sheep dairy industry has graduated to the big league with the launch of a sheep milk toddler formula by global food giant Danone.

Nutricia Karicare toddler sheep milk powder will be 100 per cent New Zealand sheep milk from Maui Milk, which operates two farms on the western shores of Lake Taupo.

And Danone plans to launch a full sheep milk formula range next year under the Nutricia brand. . . 

‘Learn so much about yourself’ at dairy awards – Yvonne O’Hara:

One of Bridget Bell’s goals was to place in the top five of this year’s Southland Otago Dairy Industry awards.

She first entered the farm manager of the year section in 2018 and did not place, but she tried again this year and came second, which she was thrilled with.

Mrs Bell also won three merit awards: The Shand Thomson leadership award; the AWS legal employee engagement award and the Fonterra dairy management award.

”I really wanted the Fonterra award,” Mrs Bell said. . . 

Master farrier keeps his foot in the industry after 51 years – Gordon Findlater:

Brian Wilson (85) is a name anyone in the horse racing industry will recognise. The former farrier can still be found at Riccarton as the club’s plating inspector. On Saturday, August 10, race three in the Grand National Festival of Racing’s first event was named ‘Brian Wilson 51 years a farrier’ in his honour. Gordon Findlater catches up with him

Can you remember the first time you shoed a horse?

I would have been 14 or 15 on the West Coast and one of the guys that did have a horse was Jock Butterfield, who played for the Kiwis, and he wanted to put some shoes on this horse, so they gave me some tools and to this day I feel sorry for the horse. That was my first experience of shoeing a horse.

What was it like growing up on the West Coast back then?

I quite enjoyed it, but there wasn’t a great future. You worked in the forestry or the bush as we called it, or the mines. I came over here in 1951 and that’s when I really got involved in the horses. My brother was an apprentice jockey, so I thought, well, I’ll see how I go, but it wasn’t to be. . . 

IHC hopes for sheep farmers’ support:

This spring, IHC is launching its new Lamb Programme, urging sheep farmers to join with dairy farmers to support people with intellectual disabilities and their families in rural communities.

IHC’s Calf & Rural Scheme was hit hard last year by Mycoplasma bovis, losing half its usual income, in what was an incredibly difficult year for many dairy farmers.

IHC National Fundraising Manager Greg Millar is hoping farmers will now pledge a lamb or sheep to support children and adults with an intellectual disability in rural communities. . . 

The average US farm is $1.3 Million in debt, and now the worse farming crisis in modern history is upon us – Michael Snyder:

We haven’t seen anything like this since the Great Depression of the 1930s.  Leading up to this year, farm incomes had been trending lower for most of the past decade, and meanwhile farm debt levels have been absolutely exploding.  So U.S. farmers were desperate for a really good year, but instead 2019 has been a total disaster.  As I have been carefully documenting, due to endless rain and catastrophic flooding millions of acres of prime farmland didn’t get planted at all this year, and the yields on tens of millions of other acres are expected to be way, way below normal.  As a result, we are facing the worst farming crisis in modern American history, and this comes at a time when U.S. farms are drowning in more debt than ever before.  In fact, the latest numbers that we have show that the average U.S. farm is 1.3 million dollars in debt

Debt-to-asset ratios are seeing the same squeeze, with more farms moving into a ratio exceeding 80%. Barrett notes each year since 2009 has seen an increase in the average amount of total debt among farmers, and 2017 was no exception. Average debt rose 10% to $1.3 million. The biggest increase was in long-term debt, such as land.

Farming in the 21st century has become an extraordinarily risky business, and countless U.S. farmers were already on the verge of going under even before we got to 2019.

Now that this year has been such a complete and utter disaster, many farms will not be able to operate once we get to 2020.

Minnesota farmers Liz and Bob Krocak were hoping for better days ahead as this year began, but things have been really tough and their debts have become overwhelming.  During a recent meeting with their creditors, Liz was so distraught that she literally burst into tears


Rural round-up

August 8, 2019

Meat industry concerned by education shake-up :

A shake-up of vocational education could be a backwards step for training in the meat industry, the sector’s leaders say.

Last week, Education Minister Chris Hipkins announced seven key changes in store for on-the-job training and apprenticeships, which included the creation of a “mega-polytech”.

Up to seven industry-governed Workforce Development Councils would also be created to “replace and expand” Industry Training Organisations (ITOs). . . 

Consumer trust is key for future success of NZ food industry:

Consumer trust has never been more valuable to the New Zealand food industry and is set to play a key role in its future success, a visiting international agricultural expert has told the horticulture sector. Yet winning and sustaining this trust has also never been more complex.

Speaking at the New Zealand Horticulture conference in Hamilton last week, the Sydney-based general manager for RaboResearch Australia and New Zealand Tim Hunt said consumer trust was becoming an increasingly precious commodity for New Zealand food producers.

“New Zealand’s emerging markets, like China and South East Asia, place a high value on food safety and the process of food preparation, while more mature wealthy markets are willing to pay for sustainability, animal welfare, fairness and attractive provenance,” he said. . . 

‘No ordinary job’: Dairy farmers put in the hard yards over calving – Esther Taunton:

Most calves are born like Superman, with their front legs up over their heads, but sometimes even Superman needs a hand, Taranaki sharemilker Jody McCaig says.

McCaig and her husband, Charlie, farm at Te Kiri, inland from Opunake, and like dairy farmers around the country, they’re headed into another busy calving.

At the height of the season, up to 50 calves a day will be born on the 1000-cow, 320-hectare property. . . 

Stop pigeonholing farm systems– TIm Fulton:

Support for regenerative agriculture is building across New Zealand and Australia. As Crown-run Landcare Research seeks state funding to test the principles and practice Tim Fulton spoke to Australian soil science leader Professor John McLean for an assessment of the movement.

At home with a newborn in southeast Queensland Associate Professor John McLean recently read a an article on regenerative agriculture in the special Fieldays issue of Farmers Weekly.

Bennett is a principal research fellow at the university’s Centre for Sustainable Agricultural Systems and the immediate past president of Soil Science Australia. . .

New Zealand’s first carbon neutral milk plant – Nigel Malthus:

French global food company Danone says it will spend NZ$40 million on its Nutricia spray drying plant at Balclutha to achieve net carbon neutrality there by 2021.

NZ operations director Cyril Marniquet says it will make the Balclutha plant NZ’s first carbon neutral one of its kind.

A NZ$30m biomass boiler will reduce the plant’s CO2 emissions by 20,000 tonnes per year – the equivalent, the company says, of removing 60,000 cars from NZ’s roads. And a more efficient waste water treatment plant will meet Danone’s stringent global clean water standards.  . .

China confirms it is suspending agricultural product purchases in response to Trump’s new tariffs – Kate Rooney:

China confirmed reports that it was pulling out of U.S. agriculture as a weapon in the ongoing trade war.

A spokesperson for the Chinese Ministry of Commerce said Chinese companies have stopped purchasing U.S. agricultural products in response to President Trump’s new 10% tariffs on $300 billion of Chinese goods.

“This is a serious violation of the meeting between the heads of state of China and the United States,” the Minister of Commerce said in a statement Monday that was translated via Google. . . 


Rural round-up

June 13, 2018

New faces take on arable roles – Annette Scott:

Wairarapa cropping farmer Karen Williams made history as she took up the reins of the Federated Farmers arable section at its annual conference.

The first woman to head the section, the 2017 biosecurity farmer of the year and former Ballance Farm Environment Award winner takes on the job with a bundle of enthusiasm.

“I am excited about the opportunity. 

“For me this role gives me the opportunity to continue to work in biosecurity and engage in that space in Wellington. . . 

Drones prove worth on farms – Richard Rennie:

Drones initially welcomed as great novelties are now fixtures as business tools and on farms they can have multiple uses. Richard Rennie talked to farmers who have used them and found a new drone firm setting up shop here as their use becomes more widely accepted.

IN THE heady early days of drone deployment many promises were made about how they would revolutionise some of the grinding daily farm jobs, often all from the comfort of the farm kitchen table. 

A few years on they have proved to be more than a flash in the pan. 

For some farmers they are now an established tool but still as dependent on the technology they take into the sky as the inventiveness of farmers using them. . . 

Meat company results only average for 2017 – will 2018 be any better?  – Allan Barber:

ANZCO’s lacklustre result for 2017, posted last month, concludes the financial reporting for last year by the three major processors which publish their results. ANZCO’s pre-tax profit was $1.8 million which compares disappointingly with Alliance Group’s $16.7 million profit and Silver Fern Farms Cooperative’s 15 month profit of $7.8 million.

None of the three companies achieved a particularly good return on their investment in the business, but both Alliance and SFF showed improvement on the previous year which was in each case the result of substantial changes in the business structure and balance sheet. The $261 million investment by Shanghai Maling in acquiring 50% of SFF had an immediately positive impact on the company’s balance sheet strength and interest bill. During its year to September Alliance was able to reduce debt and make increased investment in plant upgrades at the same time. . . 

Danone adds to investment in NZ infant formula with proposal to buy up to 49% of Yashili New Zealand – Jonathan Underhill

(BusinessDesk) – Danone plans to increase its investment in New Zealand infant formula manufacturing by acquiring up to 49 percent of Yashili New Zealand Dairy Co, the local unit of China Mengniu Dairy, according to a filing in Hong Kong.

Terms of the transaction haven’t been finalised, including the price and method of payment, Yashili International said in a statement to the Hong Kong stock exchange. “The consideration, the payment method and the payment schedule shall be determined after arm’s length negotiations and mutual agreement between the parties,” it said in a statement to the Hong Kong stock exchange. . .

Changes on board of Young farmers – Sally Rae:

Experienced Dunedin marketer Sharon Angus has joined the board of New Zealand Young Farmers as an appointed director.

Ms Angus (54), who is former general manager of marketing at Silver Fern Farms, has extensive experience with food brands.

The marketing consultant was excited about joining the board as she felt New Zealand Young Farmers “represents the future”. . . 

Process vegetables industry signs up to GIA:

Today, Horticulture New Zealand signed a Government Industry Agreement (GIA) for Biosecurity Readiness and Response on behalf of Process Vegetables New Zealand (PVNZ).

PVNZ chair David Hadfield says robust biosecurity should be seen as an investment for growers.

“Committing to the GIA enables us to have closer, more informed interactions with the Ministry for Primary Industries (MPI) and other GIA industry partners around biosecurity. This includes planning for potential incursions and taking a leading role in collective biosecurity management where it impacts our members,” Hadfield says. . . 

Knitted with love:

How Fonterra is helping keep Gore’s newest residents warm and cosy this winter.

It’s a rainy Wednesday afternoon in Gore and Lois Shallard’s knitting needles are working over-time. Beside her on the table is a pile of tiny knitted baby socks, singlets and hats and at her feet are balls of wool – hot pink, lime green, lavender and a “lovely mottled blue”.

Lois is 70 this year and she’s been knitting since her teens. She knitted clothes for all her children back in the day and now she’s moved on to knitting for her town’s new mums.

“I love knitting the little socks the best, they are just so tiny and cute.” . . 


Fonterra forecast down, shares up

December 2, 2017

Fonterra has dropped its forecast payout after being ordered to pay Danone $183 million in compensation:

Fonterra Cooperative Group has cut its forecast for 2018 earnings per share after an arbitration tribunal in Singapore ruled it must pay 105 million euros ($183 million) to Danone in the wake of 2013’s whey protein recall.

The award for recall costs suffered by Danone comes after the French company launched arbitration proceedings in Singapore and a legal suit in the New Zealand High Court, estimating the cost of recalling the whey protein concentrate to be about 350 million euros. At the time, Fonterra said it expected any court action would show it wasn’t liable under the contract. The recall was recognised as a $14 million contingent liability in its accounts.

In 2013, Fonterra quarantined several batches of whey protein concentrate amid fears it was contaminated with a potentially dangerous form of the clostridium bacteria. The whey protein was ultimately cleared as a false alarm. Fonterra cut deals with seven of the eight customers affected.

“We are disappointed that the arbitration tribunal did not fully recognise the terms of our supply agreement with Danone, including the agreed limitations of liability, which was the basis on which we had agreed to do business,” Fonterra chief executive Theo Spierings said in a statement. Fonterra was “reviewing the tribunal’s findings closely, but recognised that there was likely to be limited options for challenging the decision of an international arbitration.”

Fonterra had assessed the potential financial implications of the decision and made “a prudent decision to revise its forecast earnings per share range for the 2017/18 financial year to 35 to 45 cents, down from 45 to 55 cents,” the company said. The decision wouldn’t impact the company’s forecast farmgate milk price, currently at $6.75 per kilogram of milk solids.

“Fonterra is in a strong financial position and is able to meet the recall costs,” Spierings said. As at July 31, Fonterra had $3.8 billion in undrawn lines of credit and $393 million of cash.

Earlier today, Danone said it “welcomes this arbitration decision as a guarantee that the lessons from the crisis will not be forgotten.” The arbitration “underscores the merit of its legal actions against Fonterra, including to champion the highest standards of food safety across the industry,” it said. Food companies and their suppliers “can only work together through a solid relationship based on trust, transparency, and accountability. Danone will continue to build that relationship with its suppliers across the world.” Danone’s New Zealand subsidiary Danone Nutricia ceased doing business with Fonterra in the wake of the dispute.

Fonterra had its shareholders’ fund units and listed bonds halted from trading today ahead of a media conference at 3pm in Auckland.

“While there was never any risk to the public, we have learned from this experience and as a result have made improvements to our escalation, product traceability and recall processes, and incident management systems,” Spierings said. “We operate in a fast-changing and complex industry, and will always prioritise food safety and quality in our commitment to be the world’s most trusted source of dairy nutrition.”

Since Danone ended its supply contract with Fonterra, it’s sourced product from Synlait Milk and other manufacturers and bought two Kiwi dairy processing companies, Sutton Group and Gardians, with the latter providing access to milk supply from 18 farms owned by Grant Paterson of Dunedin. 

While the forecast payout has dropped, Fonterra shares gained in price:

Fonterra Shareholders Fund units gained 0.6 percent to $6.40. . . 

The award for recall costs suffered by Danone comes after the French company launched arbitration proceedings in Singapore and a legal suit in the New Zealand High Court, estimating the cost of recalling the whey protein concentrate to be about 350 million euros. At the time, Fonterra said it expected any court action would show it wasn’t liable under the contract. The recall was recognised as a $14 million contingent liability in its accounts.

Fonterra had assessed the potential financial implications of the decision and made “a prudent decision to revise its forecast earnings per share range for the 2017/18 financial year to 35 to 45 cents, down from 45 to 55 cents,” the company said. The decision wouldn’t impact the company’s forecast farmgate milk price, currently at $6.75 per kilogram of milk solids.

“In the share price you’ve seen an element of relief, albeit on low volume” said Rickey Ward, NZ equity manager at JBWere. “There’s an issue that had been overhanging the company, which could be enormously material, which has been resolved, and it doesn’t appear there’s any desire to pursue recourse on this.”

“It’s full and final, it provides clarity and therefore investors can start to analyse or take a view of the company on fundamentals now, rather than this issue that’s been lurking in the background,” Ward said. “It could have been quite stressful for them if it had been at the upper end of what some people were suggesting. The company would have been capable of addressing it, but they would have had to find a way of addressing it which might not have pleased the unitholders in the shareholders’ fund.”

The market must have been expecting worse news.

Farmers have been anticipating a drop in the farmgate milk price in the wake of price falls in several successive GlobalDairyTrade auctions. However, it’s the earnings per share forecast which has been lowered, not the farmgate milk price.


Rural round-up

November 9, 2015

Alliance in good shape, Donald says – Sally Rae:

He’s been sitting around the board table at Alliance Group for 24 years but Murray Donald has finally called time.

Come December 17 and the Southland farmer will be gone, as he is standing down as a supplier representative at the company’s annual meeting in Oamaru.

Mr Donald (54), who farms near Winton, and fellow long serving director Doug Brown, of Maheno, who was elected in 2001, have decided not to seek re election. . . 

Exit from EU could cripple UK agriculture – Allan Barber:

A new report by agricultural consultancy Agra Europe entitled Preparing for Brexit suggests leaving the EU, to be determined by a referendum in 2017, could destroy the British farming sector. The authors have based their forecast on the Coalition government’s 2013 Fresh Start Policy document which theorised that British agriculture could imitate New Zealand and Australia’s success in surviving, even flourishing, in a post-subsidy world.

Not surprisingly there is plenty of scepticism about the realistic prospect of either of these scenarios eventuating. If British voters chose the Brexit option, it is most unlikely any government would eliminate all subsidies, while a cursory glance at the proportion of farm income from EU Common Agricultural Policy payments shows how laughable it would be to expect them to become suddenly profitable. . . 

Contest continues to hold appeal – Sally Rae:

Chris Pemberton was just a lad when he competed in the Young Farmers Contest.

It was 2005 and, at 17, Mr Pemberton was one of the youngest regional finalists in the contest’s then 36-year history.

He was still at boarding school at St Kevin’s College when he competed in the Aorangi regional final.

While unplaced, he performed creditably and was a favourite with the crowd. . . 

Spaans new DairyNZ head – Stephen Bell:

Waikato dairy farmer Michael Spaans has been elected the new chairman of DairyNZ.

The industry-good body held a special meeting of the board this weekend.

Spaans will serve an annual term as chairman, leading an eight-member board made up of five farmer-elected and three independent directors.
He replaced long-serving chairman and former Cabinet minister John Luxton who retired from the DairyNZ board last month after 12 years of service on dairy industry bodies. . . 

Yashili New Zealand’s Pokeno factory opens – Gerald Piddock:

Yashili New Zealand Dairy Co has opened its new state-of-the-art infant formula manufacturing plant in Pokeno, south of Auckland.

The 30,000m2 plant will employ 85 staff and have an annual production capacity of about 52,000 tonnes of formula product. It will produce formula under the brand ‘Super Alpha-Golden Stage Infant Formula’ with shipments to China expected to begin in early 2016.

Yashili New Zealand is a leading producer of infant milk formula for the domestic market in China. It was founded in July 2012 and is a subsidiary of Yashili International Holdings and Mengniu Dairy Co.  The new factory took three years to build and cost $220 million. The company’s goals were to produce the highest quality infant formula and raise the healthiest babies in China. . . 

Yashili, Arla and Danone sign agreement – Gerald Piddock:

Yashili International along with European dairy producers Arla and Danone have entered into global strategic cooperation agreement.

Signed at the opening of Yashili’s new infant formula plant at Pokeno on November 6, the agreement will see the three companies work closer together in supplying products into Arla and Danone’s markets.

“It is a significant agreement between these two great dairy producers who are each committed to the highest standard of food quality and safety,” Yashili International Holdings president Lu Mingfang said. . . 

 


Rural round-up

August 7, 2015

Rabobank Report: Moving Globally; What role will China play in the global beef market?:

Rabobank sees great potential in China’s beef market, and believes that Chinese investors will play an influential role in the global beef market over the next decade. According to Rabobank’s latest report, Moving Globally: What role will China play in the global beef market?, China’s beef demand will grow an additional 2.2 million tonnes by 2025. Driven by the weak domestic production, but with strong demand, the beef sector will likely become the first agricultural sector where China has high integration with the rest of the world and Chinese investors are expected to play an influential role in the global beef market.

In addition to the volume gap, China’s beef market also demonstrates potential for value-added and branded beef products. Strong demand from the food service and retail market channels provides opportunities for both Chinese and foreign companies in the further processing sector. . .

 

Fonterra’s restructure more about poor strategy than milk price – Allan Barber:

When Fonterra was formed back in 2001, there was a great sense of optimism about the potential for a New Zealand dairy company to compete on a truly global scale. The industry’s infighting and parochialism would be a thing of the past and the clear intention was to use the greater efficiencies and scale to create a substantially better performing business model.

The big question 14 years down the track is whether that objective has even remotely been achieved. Fonterra is the world’s leading exporter of milk products and the fourth largest dairy processor, so achievement to date appears consistent with the objective. But for many observers there was another, more ambitious expectation: to establish an internationally competitive value added business to compare and compete with Nestle and Danone. . .

Dairy sector needs to work together to manage downturn:

National accounting and business advisory firm Crowe Horwath is calling on all stakeholders in the dairy industry to work together to help the sector get through the current difficult period of lower milk solid prices.

On the back of dairy companies announcing a string of forecast milk price downgrades and prices continuing to plunge at the Global Dairy Trade (GDT) auctions, predictions are the current hard times for the dairy sector could potentially last another 18 months to two years.

Crowe Horwath says given the scale of the challenge now being faced by the industry, doing nothing is not an option for anyone involved, including farmers, banks, farm consultants and business advisors. . .

 

Fish & Game Calls for Fonterra to Lift Its Game After Pollution Conviction:

Fish & Game says Fonterra needs to lift its game after the dairy giant was fined $174,000 for several pollution offences under the Resource Management Act.

The Bay of Plenty Regional Council prosecuted Fonterra for polluting the and other waterways after several wastewater system failures at Fonterra’s Edgecumbe dairy plant.

The offences occurred several times between September 2014 and April 2015.

Fonterra pleaded guilty to six charges and was sentenced in the Tauranga District Court by Judge Smith. . .

 

I’m worried! I’m sympathising with organic farmers over a land use conflict! – Jim Rose:

Writing this blog of sound mind and sober disposition, I still have considerable sympathy with two organic farmers over a land use conflict they have with the neighbouring gun range.

Local land use regulations allows a gun club to set up 600 m away with competitive shooting days all day for 88 days a year. That is a voluntary self restraint. They could hold shooting competitions every day of the year. The local land use regulations allow the use of guns on rural land. The gun club used this absence of a prohibition on the use of guns in the frequency of use to set up a gun range to fire guns all day long on rural land. . . .

Market Continues to Show Strength:

New Zealand Wool Services International Limited’s General Manager, Mr John Dawson reports that a continuing upward trend at today’s South Island wool sale saw prices increase.

The weighted indicator for the main trading currencies decreased from 0.6314 to 0.6181, down 2.1 percent. The US dollar rate was down to .6520 from .6670 which meant increased prices in NZC terms.

Of the 5,564 bales on offer 5,260 sold, a clearance of 95 percent. . .

 

Matariki Forestry Group announces recapitalisation:

Matariki Forestry Group (“Matariki”) today announced a NZ$242 million capital infusion from Rayonier Inc., its largest shareholder. This injection of capital will be used for the repayment of all outstanding amounts under its existing NZ$235 million credit facility and for general corporate purposes.

Upon completion of this capital infusion, Rayonier’s ownership in Matariki will increase from 65% to approximately 77% and the Phaunos Timber Fund ownership will be reduced from 35% to approximately 23%. The capital infusion is subject to certain closing conditions including New Zealand Overseas Investment Office approval and is expected to close by year end. Matariki will realise interest cost savings of approximately NZ$15 million annually as a result of the recapitalisation. . .

 

NZARN says strategic feed approach key to farmer viability:

Nutrition experts have entered the milk price payout debate saying that a strategic approach and optimising home grown and supplementary feed resources are key to long-term viability.

The New Zealand Association of Ruminant Nutritionists (NZARN) urges farmers, in an article published on their website (www.nzarn.org.nz) to benchmark themselves against the best performing farms to identify areas for improvement.

Dr. Julian Waters, NZARN Chairman says, “Maximising utilisation of home grown resources such as pasture, silage and crops should be the basis for a profitable business, with a sound strategy to incorporate supplements to increase efficiencies when home grown feed is limited.” . . .

 Internet Provider Puts Farmers’ Wellbeing First:

New Zealand internet provider, Wireless Nation, further demonstrates its commitment to the rural sector in a new agreement with Farmstrong, an initiative to promote wellbeing for all farmers and growers across New Zealand.

Wireless Nation’s zero-rated data agreement means that its Satellite Broadband customers can access Farmstrong’s website without the data counting towards their data cap.

Wireless Nation’s technical director, Tom Linn says he is passionate about making internet connectivity easier for people living in rural areas. . .

New Forests agrees to purchase Marlborough timber plantations from Flight Group:

New Forests today announced that it has reached agreement to purchase approximately 4,200 hectares of freehold land and softwood plantations from the Flight Group. The plantations consist of radiata pine and are located in the Marlborough region of New Zealand’s South Island.

The agreement forms part of a larger transaction by Flight Group, including the purchase of the Flight Timbers sawmilling assets by Timberlink, an Australian timber products processor that is also an investee company of New Forests. Completion of the plantation purchase by New Forests is subject to approval by the Overseas Investment Office. . .

 


Fonterra holds 4th place in global dairy rank

July 16, 2014

Fonterra has held fourth place in Rabobank’s global dairy rankings:

  The latest annual Rabobank survey of the world’s largest dairy companies highlights the giants of one of the world’s most valuable food sectors.

The last 18 months have seen most of these players battle challenging conditions, with weak economies and supply constraints undermining sales growth in key markets. Againt this backdrop, mergers and acquistions have become an attractive route to growth and profitability. But with billion dollar deals increasingly hard to come by, dairy giants will need to acquire or tie up with more companies to sustain the same rates of growth in future. Those adept at acquiring and embracing new businesses will remain well positioned to survive and thrive. 

“Once again, giants Nestlé, Danone and Lactalis top the list, showing that the world’s largest dairy companies are reasonably entrenched,” commented Rabobank analyst Tim Hunt. “We continue to see some companies outperform their peers in sheer growth terms. In particular, the Chinese giants Yili and Mengniu, which saw their sales expand by 14% and 20% respectively, with Yili entering the top 10 for the first time ever”. 

Saputo continued its march up the list to push to eighth place, in part due to several recent acquisitions. Meiji and Morinaga slipped down the list largely due to the sharp decline in the value of the Yen (in which most of their products are sold).  

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2013 was a challenging year for most of the world’s major dairy companies, with stagnant sales volumes in most OECD dairy markets. Acquisitions have become a more attractive route to grow sales and in 2013, there were 124 dairy transactions, up from 111 in 2012 and the highest since 2007.

Positioning for maximum effectiveness in the expanding Chinese market remains prominent. In 2013, joint ventures were announced between Mengniu and Whitewave and COFCO and Danone while Yili announced a partnership agreement with Dairy Farmers of America.

Mengniu took a stake in China Modern Dairy to secure raw milk supply. A further joint venture is pending between FrieslandCampina and Huishan. Despite the increase in transactions, the dairy sector saw no billion dollar deals in the 12 months to 30 June 2014.

While underlying growth will pick up in coming years, many markets will not return to the rapid growth rates seen before 2008. In this context, mergers, acquisitions and joint ventures will remain a key avenue to growth and profitability.

“The catch is that the number of attractive targets is shrinking and multiples have risen,”  explained Hunt. “With billion dollar value deals harder to come by, dairy giants will need to acquire or tie up with more companies than in the past to sustain the same rates of growth”.

Fonterra made a record pay out to its suppliers last season but that was overshadowed in the media by its poor handling of the whey protein concentrate debacle.

However, it maintained its 4th place in the rankings.


Rural round-up

May 26, 2014

Golden times return for kiwifruit trade – Jamie Gray:

Just as the last rites were about to be administered to the New Zealand kiwifruit industry, a new disease-resistant variety has restored grower confidence to where it was just before the devastating Psa virus swept through Bay of Plenty orchards late in 2010.

Orchard prices have rebounded, investment has started again and fruit prices are better than for more than 10 years, giving growers reason to be more optimistic, industry representatives say.

Psa has already had a big impact on kiwifruit “gold” volumes, which fell by 55 per cent in 2013/14 compared with the previous season and to the lowest ever, but higher prices overall have helped to boost returns. Zespri estimates that this season will yield 17 million trays of Gold, up from 11 million trays in the previous season — thanks mostly to the fact that the new variety, called Gold3, is Psa-tolerant compared with its highly susceptible predecessor, Hort16A. . .

Open day showcase for award winner – Sally Rae:

”Capturing sunlight in a form you can eat.”

That is how Wayne McIntosh describes the fruit produced on his family’s award-winning orchard at Earnscleugh, near Alexandra.

Mr McIntosh, who has been managing the orchard for 10 years, was the supreme winner of this year’s Otago Ballance Farm Environment Awards and hosted a field day on the property on Wednesday.

The 64ha property has about 34,000 trees producing cherries, peaches, nectarines, apricots, apples and a range of trial fruits. . .

Dairy boss picks industry evolution – Jamie Gray:

The acquisition by French food giant Danone of two New Zealand dairy companies last month signals a new phase in the evolution of the local dairy industry – one in which manufacturers will get closer to their brands, says Synlait Milk managing director John Penno.

Danone last month said it had entered an agreement to buy processing firms Sutton Group and Gardians.

The announcement came as the dairy industry negotiated its way through new Chinese infant formula regulations.

Auckland company Sutton is best known for contract manufacturing of infant formula; Gardians has a milk powder spray drying plant in Otago. . . .

Pastoral lifestyles on the Qinghai-Tibetan Plateau – Keith Woodford:

This week I am writing from the Qinghai-Tibetan Plateau in Western China, at 3600 metres above sea level. The Plateau is part of China’s pastoral zone where lifestyles are based on sheep and yak farming systems. I am here with three New Zealand colleagues from Lincoln University and AgResearch. Jim Moir is our soils specialist, Phil Rolston is our agronomy specialist, and Sharon (Xiaomeng) Lucock is our science and general translator who also helps co-ordinate the program. We are working with colleagues from Qinghai University, and also working with a commercial partner who processes yak milk into yoghurt which sells as far afield as Beijing and Shanghai.

The zone that we are working in is part of the Sanjiangyuan (Source of Three Rivers) Ecological Zone with an area 25% larger than all of New Zealand. The winter lasts for more than six months and the growing season is limited to late May through to the end of September. . . .

Theme recognises Fieldays’ future success – Tony Benny:

The theme for the National Fieldays premier feature this year recognises that the future success of New Zealand agriculture rests on effective use of all resources, says Fieldays chief executive Jon Calder.

Called Managing resources for a competitive advantage, the theme recognises that resources can be human, capital, natural, assets or livestock.

“There’s really a two-fold view. One is that we have got strength and capability in the way we manage our resources and the other is looking at what the future holds in terms of new innovations, new technology and new ways of managing resources,” he says.  . .

Volunteers key to Fieldays success – Sonita Chandar:

While visitors to the NZ National Agricultural Fieldays check out the latest products and innovations from the rural sector, a dedicated team of staff and volunteers work tirelessly behind the scenes to ensure all is running smoothly. 

“We have a team of around 36 fulltime staff five of who work solely on Fieldays and more than 120 volunteers,” said Mystery Creek membership administrator Sierra Jenkins.

“Every single one of the volunteers is invaluable and without them the event wouldn’t be the success it is.” 

Volunteers are split into four teams covering all aspects of Fieldays. Around 30 people work in the guest services area overseen by Shirley Murphy. . .

Happy Beef month! We keep one of our steers every so often to use as meat for our family to eat..... it lasts us forever! #EATBEEF Some have pointed out some flaws in this picture and we apologize for that! (It's not ours) But the message to take away is that one steer feeds a lot of people!! (Picture via Kansas Department of Agriculture)


Rural round-up

May 1, 2014

China’s taste for hotpot elevates lamb flaps from offcut to prime cut, sending prices to record – Tina Morrison:

(BusinessDesk) – China’s taste for hotpot, where meat and vegetables are cooked in a broth at the dining table, has driven a four-fold increase in the price of lamb flaps, turning the offcut into a premium cut and lifting the overall return kiwi farmers can get from their animals.

Lamb flaps, the gristly ends of the ribs trimmed away when the butcher cuts racks and rib chops, used to be considered a cheap cut, retailing for about US$1.35 per kilogram as little as eight years ago. It has soared 84 percent to US$5.84/kg, overtaking shoulder at US$5.64/kg and narrowing the gap with lamb leg at US$8.12/kg, based on Agrifax data.

In China, the meat is processed into a lamb roll and sliced thinly for hotpot, the dominant cooking style for lamb and a staple of the national diet. Chinese sheepmeat imports nearly doubled to 165,300 tonnes in the 2013 export year as a growing population, higher incomes and a decline in the world’s largest sheep flock spurred demand for imported protein. . .

New Zealand companies approved for infant formula exporting to China:

Five New Zealand manufacturers have been approved for exporting infant formula to China, Primary Industries Minister Nathan Guy and Food Safety Minister Nikki Kaye have announced today.

“These manufacturers represent around 90% of our infant formula exports to China by volume,” says Mr Guy.

“New Zealand officials have been working intensively with manufacturers and Chinese officials to address corrective actions, allowing these five manufacturers to be registered as of May 1.

“We appreciate the cooperative relationship with Chinese authorities in registering these New Zealand manufacturers. The new rules signal China’s desire for greater accountability for imported infant formula from all countries.

“MPI is working with all manufacturers to ensure the new Overseas Market Access Requirement (OMAR) – issued last night – is complied with. This sets out the requirements needed to produce infant formula for export to China from 1 May,” says Mr Guy. . . .

Nutricia takeover targets Sutton Group, Gardians among first to get China registration – Suze Metherell:

(BusinessDesk) – Sutton Group and Gardians, the dairy manufacturers acquired by Danone’s Nutricia arm, are among infant formula companies to gain registration to export to China under that nation’s new food safety regulations.

Nutricia itself gained registration, as did Fonterra Cooperative Group, GMP Pharmaceuticals and Dairy Goat Cooperative (NZ). They represent about 90 percent of New Zealand’s infant formula exports to China by volume.

Other companies can be registered after the May 1 deadline although owners of infant formula brands who can’t demonstrate a close relationship with a manufacturer may struggle to meet Chinese requirements, Food Safety Minister Nikki Kaye said today. . .

Nutricia to Add Milk Drying and Packing Capacity to Existing Platform in New Zealand:

Nutricia today announces an agreement for the simultaneous acquisition of the spray dryer of Gardians, located near Balclutha, and the blending, packing and can-forming activities of the Sutton Group in Auckland.

This transaction will provide Nutricia with a large milk drying capacity, along with a long-term fresh milk supply access. It will also add an infant formula blending and packing facility to Nutricia’s existing operations platform. . . .

Dairy Herd Consultation Underway:

The Ministry for Primary Industries (MPI) has today announced consultation on the future direction of the dairy herd improvement industry.

“The government’s main objective is to ensure New Zealand’s dairy industry can benefit from genetic gain in the national dairy herd. This objective supports the National Breeding Objective to identify animals whose progeny will be the most efficient converters of feed into farmer profit, says Marianne Lukkien, Acting Director Sector Policy.

“To achieve this we need to ensure the Dairy Core Database is fit for purpose, services are accessible at competitive prices and above all farmer’s interests are protected.

“The dairy industry is preparing for the transfer of the Dairy Core Database from Livestock Improvement Corporation (LIC) to DairyNZ. . .

A new generation of tools for the primary sector:

The primary sector is facing a major evolution in how they operate their businesses. Whether its satellite imagery of plantation forests, GPS tracking and real-time scheduling of transport and logistics, soil management through wireless sensor monitoring and automated tractor or irrigation systems, our primary sector businesses have a lot to benefit from improved mobile technologies.

Some of the best minds in New Zealand and Australia came together last year in Wellington for this region’s inaugural MobileTECH Summit 2013, an event designed to discuss and showcase new mobile technologies best suited to increase productivity for the primary sector. Building on this momentum, MobileTECH 2014 will be running this year in Brisbane, Australia and again, in Auckland, New Zealand in August. . .

Chinese buy five vineyards

Hong Kong-owned QWIL and Accolade Wines have been given the go ahead by the Overseas Investment Office to buy five vineyards from Mud House Wines.

The deal for $46.4 million involves the acquisition by QWIL of a freehold interest in five vineyards – Woolshed Vineyard in Marlborough, Home, Mound and Deans Vineyards in Canterbury, and Claim Vineyard in Otago.

The land comprises about 596ha. . . .

 


Rural round-up

January 18, 2014

Meat Options Paper Seeks Farmer Opinions – Allan Barber:

Federated Farmers’ Meat Options discussion paper, written by Sarah Crofoot, does an extremely good job of laying out the alternative market orientations companies can adopt. It presents three different focus options from which farmers are asked to select their set of preferences.

It should be noted up front that the discussion paper is aimed at Federated Farmers’ farmer members and its key purpose is to engage those farmers in thinking about what they want their industry to look like in 5,10 or 20 years from now. The final output will not be binding on anybody, but it will provide a more comprehensive summary of farmer opinion than the feedback from the series of Meat industry Excellence meetings.

The paper starts with a late 1980s definition of the industry’s unique characteristics quoting Anita Busby, Editor of Meat Producer at the time:

“Meat industry people don’t need to take advice or listen to new ideas. They already have the answers. They strangle new thoughts at conception. If that fails, they discredit the source. If you haven’t been in the meat industry for years, you don’t know what you are talking about. If you have, you’re washed up…”

Sarah Crofoot with the confidence of youth has nevertheless taken the bold step of producing a set of ideas which merit serious consideration. It is now 30 years since subsidies were removed, even longer since the deregulation of the meat industry, and despite many positive developments, the industry still has fundamental structural problems. . .

More than 4000 sheep perish on live export:

More than 4000 Australian sheep have died from heat exhaustion after 21 days on board a live export ship bound for Qatar from Fremantle.

Exporter Livestock Shipping Service said 4179 sheep perished in August aboard their Bader III vessel – the same ship that was loaded with animals last weekend in Perth despite searing 44-degree heat.

LSS are a Jordanian-owned company based in Perth and are already under investigation by Australian Federal Authorities for two breaches of live export regulations in Jordan and Gaza. . .

No downtime for shearing gangs – Jill Galloway:

When it has been too wet for shearing in one area, sheep have been dry enough in another so shearing has cracked on.

Shearers and contractors say they are not behind, in spite of the recent moist weather. “The boys have not had a day off,” said Feilding-based contractor Erin Bailey.

“They had a few days off over New Year, but they have been working since,” she said.

She and her husband Scott run two shearing gangs from their Feilding base, but shear a lot around Marton and Apiti, she said. . .

Taranaki Trust leads dairy research – Sue O’Dowd:

The Taranaki Agricultural Research Trust provides two platforms for cutting-edge research beneficial to the dairy industry.

The trust leases a 126ha (111ha effective) research farm across the road from Fonterra’s Whareroa site near Hawera and owns the 350 cows milked there. DairyNZ manages the Westpac Taranaki Agricultural Research Station (WTARS) under contract to the trust.

The station, established at Normanby in 1974, has done research into areas as diverse as grass grub, nitrogen and phosphate use, once-a- day-milking and feed conversion efficiency.

It had made a significant contribution to New Zealand farming over the last 40 years, said trust chairman Brendan Attrill. . .

Neil’s pinot empire expands – James Beech:

Actor Sam Neill says his winery’s fourth vineyard acquisition demonstrates ”faith and confidence” in Central Otago and its pinot noir for the global market.

Two Paddocks announced this week it had become the only Central Otago winery with a foothold in all three Central Otago wine-producing sub-regions, owning vineyards in Gibbston, the Alexandra basin and now the Cromwell basin.

Neill said a sum of money which was ”considerable, but both vendors and purchasers think it fair” had bought the established 6ha Desert Heart Vineyard, plus woolshed and house, at the end of Felton Rd, Bannockburn, last week. . .

Don’t let Fonterra’s lawyers run off with the fresh cream – Willy Leferink:

They say bad things come in threes.  We’ve had the news Fonterra is going to “vigorously defend any proceedings” taken by Danone against it for US$400 million.  In recent days, Fonterra Brands has voluntarily recalled 330ml and 500ml bottles of fresh cream sold under the Anchor and Pams brands in the upper North Island. 

As a farmer you wonder, what’s next?

First of all Fonterra is doing things by the book in voluntarily recalling affected bottles of fresh cream stamped “best before 21 January”.  Visit foodsmart.govt.nz and you’ll quickly learn that food product recalls happen irrespective of who’s in government.  In 2008, there were 19 recalls versus the 14 last year and they have involved everything from hash browns to fish fillets to soy milk powder.

While the timing of this is far from ideal given last year’s events, this voluntary recall came from Fonterra’s own testing.  It shows consumers that a company owned by thousands of Kiwi farmers puts food safety first.  When consumers take a Fonterra product off the shelf, they deserve to know someone back at Fonterra is testing it. . .


Rural round-up

January 13, 2014

Inside this hut you see the sky – Sally Rae:

Remote Dansey Pass boasts a hut with all the home comforts. Not only does it have the kitchen sink, it also has the ultimate in hut luxury – a flat-screen television, as Sally Rae reports.

An entry in the visitor’s book says it all.

”Headed back to hut to watch rugby on the new edition. As Neville would say, she’s a bit flash Harry now.”

For as Dansey Pass farmer and prominent dog triallist Neville Hore says, his hut on 4046ha Mt Alexander Station is ”not the ordinary bloody musterers’ hut”.

Not that there is any sibling rivalry, but he did point out that while his big brother Jim’s flash hut over at Stonehenge, in the Maniototo, might boast a double bed, it did not have television. . .

Paper highlights foreign threat to meat industry – Hugh Stringleman:

Another year and another report on the problems of the meat industry.

Federated Farmers Meat and Fibre section has published an options paper by its policy adviser Sarah Crofoot, after circulating it among members and seeking responses.

Section chairwoman Jeanette Maxwell said it was a “pick and mix” of solutions to the complex problems facing the industry.

She wanted to build federation policy by hearing from the members on one of the biggest issues facing New Zealand agriculture. . .

Fonterra’s ‘bigger than this’ – Gerald Piddock Stacey Kirk and Laura Walters:

Court proceedings brought by French food giant Danone were unlikely to cause long-term reputational damage to Fonterra or affect dairy commodity prices, experts say.

Danone has cancelled its supply contract with Fonterra and is launching legal action against the New Zealand dairy co-operative in a bid to win compensation for $492 million of losses incurred last year and reputational damage.

The moves follow a scare in August when Fonterra issued a milk powder contamination warning that later tests found was a false alert. University of Auckland head of marketing, Rod Brodie, said whether Fonterra suffered any long-term reputational damage as a result of the court action would depend on the way the company handled the proceedings. 

“While it will be expensive for Fonterra perhaps in court with litigation, in terms of its end markets I think Fonterra’s bigger than this.” . . .

Changing 30 years of habits to go organic a challenge – Helena de Reus:

Throughout Otago, people with a love of food and fresh produce are turning out amazing products. For some it is just a hobby; for others it has turned into their livelihood. Helena de Reus reports.

A wish to produce nutritious food for people led to the decision of a lifetime for farmer Graham Clarke.

He has farmed near the small South Otago township of Waipahi since 1983, and owns the 1000ha Marama Organic Farm with his partner, Giselle McLachlan, and his brother, Ian.

The sheep farm has been organic for the past eight years, after Mr Clarke heard a talk by a biological farming advocate, and decided the benefits outweighed the challenges. . .

Young adviser challenges farmers:

Sarah Crofoot researched and wrote the meat industry options paper for Federated Farmers quickly after starting employment as a meat, fibre and environment policy adviser last September.

By mid-November her paper was circulated to members of the Feds Meat and Fibre council and it was discussed in a closed session later that month.

The paper has been available to Federated Farmers members since mid-December and an electronic survey of responses conducted.

Crofoot wanted the paper to inform debate about the most important questions facing the New Zealand meat industry and have members help shape the federation policy on industry reform. . .

Scotland’s first bee reserve:

The future of Scotland’s native black bee is looking much brighter

 January 2014: The UK’s first honey bee reserve has been created in Scotland. From 1 January 2014 it has become an offence to keep any other species of honey bee on the Hebridean islands of Colonsay and Oronsay apart from the black bee (Apis mellifera  mellifera).

The black bee is thought to be the only native honey bee in Scotland and the new legislation is designed to protect the species from cross-breeding and disease. . .


Danone takes Fotnerra to court

January 9, 2014

French food company Danone is taking Fonterra to court and terminating its contracts:

. . . Danone is terminating its existing supply contract with Fonterra and making any further collaboration contingent on a commitment by its supplier to full transparency and compliance with the cutting-edge food safety procedures applied to all products supplied to Danone.

Danone is also initiating proceedings in the New Zealand High Court, as well as arbitration proceedings in Singapore to bring all facts to light and to obtain compensation for the harm it has suffered. . .

Danone is the parent of Nutricia which had to recall its infant formula during Fonterra’s botulism scare.


Rural round-up

October 12, 2013

Living up to our global responsibilities – Bruce Wills:

Not to give you the wrong impression, but I am writing this column from Geneva, where I have co-presented the World Farmers Organisation’s trade policy to the World Trade Organisation. I am back in Europe thanks to the WTO but it has helped to advance New Zealand’s agricultural diplomacy.

As a trading nation, we absolutely depend on trade in a world that is utterly dependent upon food. There are some things which keep me awake at night. Adverse weather events and biosecuirty being chief among them but there is a third which increasingly gnaws at me. That is a perfect storm of food production not keeping pace with a world population expected to hit 9.3 billion stomachs in the year 2050; an amazing 2.3 billion more than today.

Henk-Jen Brinkman, of the United Nations Peacebuilding Support Office, called food insecurity “a threat multiplier”. . .

Angus farmers see grass is greener – Tim Cronshaw:

New Zealand’s grass-based feeding system for cattle was the main talking point of 110 international visitors at Te Mania Angus, during one of the first stops of a South Island tour, before the World Angus Forum in Rotorua next week.

Overseas visitors were treated to a wide selection of angus heifers with calves, mature calving cows, yearling bulls and herd sires, at the breeding operation at Conway Flats, south of Kaikoura.

They were also impressed by food prepared by celebrity chef Al Brown for their Monday visit at one of the largest angus breeding operations in New Zealand, and its setting next to the sea, with a snow-topped mountain backdrop. . . .

Milk powder scare will cause long term disruption – Alan Barber:

It may be a statement of the obvious, but the effects of Fonterra’s botulism scare will last much longer than originally hoped or imagined. Its impact on New Zealand’s international trade reputation gives the impression of being more disastrous than an outbreak of foot and mouth disease, always assumed to be the biggest disaster that could possibly happen.

Economically there is no comparison between the two, because the botulism that wasn’t has initially done no more than cause infant formula manufacturers a loss of business. There has been no apparent impact on dairy payouts or even global auction prices. Fonterra appears to be pretending the whole saga wasn’t even its fault, if its reaction to Danone’s damages claim is any guide.   . .

Sainsbury’s evaluating merits of docking – Alan Williams:

Big United Kingdom supermarket chain Sainsbury’s will be guided by the science on issues it is working on with leading lamb supplier Alliance Group.

These are the docking of lambs’ tails and the use of high-sugar grasses as a livestock feed in New Zealand.

Animal welfare and sustainable production were key parts of Sainsbury’s strategic vision and its work with Alliance was part of the process to have matching values between the main UK lamb supply group and NZ suppliers, the chain’s agriculture manager Philip Hambling said.

The first year of a three-year tail-docking research programme, reported in The New Zealand Farmers Weekly, has been completed.

It produced interesting findings but it was too early to draw conclusions, Hambling said. . .

Gisborne forest boom predicted – Pam Graham:

The harvesting of forests in the Gisborne-Tairawhiti region on the East Coast will create 630 jobs by 2020, potentially reducing drug abuse and crime in the region, according to a report.

A study by Waikato University for the Eastland Wood Council says that by 2020 up to 10 percent of the population of Gisborne will be involved in, or derive a living from forestry.

Salaries and wages to Gisborne residents are likely to increase to $151 million a year in that period.

The number of people receiving welfare benefits will go down, schools will benefit from having parents employed and there may be less drug abuse and crime. . .

Weather helping croppers – Murray Robertson:

THE weather has been helping the district’s croppers in the past week to catch up with their planting programmes after heavy rain last month.

This is a crucial time for every crop and cropper in the district.

Leaderbrand general manager Richard Burke said they had everything they needed at this time.

“Things are pretty good really. . .

Awards offer chance to put spotlight on sustainability – Sue O’Dowd:

There’s no time like the present to enter the Ballance Farm Environment Awards, says national judging co-ordinator Jamie Strang.

Earlier this week the New Zealand Farm Environment Trust (NZFET) confirmed eight entries had been received for the Taranaki Ballance Farm Environment Awards.

The prestigious awards, which are held in 12 regions, are being staged in the province for the first time.

While some farmers said they wanted to delay entering the competition because they thought their farm wasn’t quite ready, often they’d say the same thing in following years, Strang said.

Many farmers did not like being in the spotlight, but entering the awards offered many benefits. . .

Solid start to avocado export sales:

The first of this season’s New Zealand avocados have started hitting the supermarket shelves in Japan this week in a buoyant start to export sales there, and opening prices in Australia are at their best.

Rival Mexican supply is lower, which has allowed Avanza, the international export brand channel for AVOCO, to start early season negotiations in Japan at significantly improved market prices. While this is partly offset by an unfavourable exchange rate it still reflects a significant improvement in grower OGR (orchard gate returns).

At the same time, interest in New Zealand avocados is proving to be strong in developing markets such as Singapore, Thailand and Malaysia and there are encouraging signs that Avanza sales will resume in Hong Kong after a two-year absence. . .


Rural round-up

October 2, 2013

Fonterra Confirms Dispute Resolution Process with Danone:

Fonterra today confirmed that it is in a dispute resolution process with Danone following the whey protein concentrate precautionary recall initiated in August this year.

The discussions between Fonterra and Danone had been confidential with a view to reaching a mutually acceptable commercial outcome however some aspects of these discussions have been made public this morning in the press.

Fonterra confirms that the discussions remain ongoing but strongly denies any legal liability to Danone in relation to the recall.

Wool Expo Shows the Way to ‘Rest in Fleece’:

A coffin, handbags, pet rugs and digitally printed fabrics made from wool are among exhibits that feature in Wool Expo 2013 that takes to the road this month.

A partnership between the Campaign for Wool, PGG Wrightson Wool, and Massey University’s College of Creative Arts, the expo begins in Gisborne in two weeks and works it’s way down the east of the north island to end in Masterton in the middle of November.

Some revolutionary and innovative woollen concepts are explored, exhibited and demonstrated in the expo that will be based in PGG Wrightson’s retail stores in the six centres where the road show stops.

A coffin made of wool is featured. The idea isn’t new – back in the 1600s, in a bid to bolster Britain’s textile industry the British parliament passed a law requiring all corpses to be buried in a woollen shroud. Spin forward to 2009 when a prototype and sturdier wool coffin led to the present version. . .

Speech to the Primary Growth Partnership expo – Nathan Guy:

. . . Innovation has been a hallmark of our primary industries for well over a century.

To become a world leader, the sector has always made great use of science, technology – and innovation.

Just consider the dramatic shift in the way the sector produces, processes, markets and transports food products compared to even a few decades ago.

For example, we now produce the same amount of sheep meat today as we did in the early 1980s but with around half the number of sheep.

The global food market of the 21st century is changing rapidly and there are great opportunities for our food sector, particularly in Asia. . .

Martyn Dunne welcomed as new MPI Director-General:

Federated Farmers is pleased to welcome Martyn Dunne CNZM as the new Director-General of the Ministry for Primary Industries (MPI).

“Martyn Dunne brings a completely new dimension to the leadership of the MPI,” says Dr William Rolleston, Federated Farmers Vice-President.

“Mr Dunne brings a huge wealth of experience being New Zealand’s current High Commissioner in Canberra, the immediate past Comptroller of Customs and Chief Executive of the New Zealand Customs Service and before that, a Major-General in the New Zealand Army. . .

Federated Farmers builds talent with new appointments:

Federated Farmers policy resource is being built up by several new appointments including a new dedicated regional policy advisor to be based in its Invercargill office.

“Federated Farmers is serious about meeting the needs of our members and is investing is capability where it is needed,” says Conor English, Federated Farmers Chief Executive.

“We have excellent and well qualified staff and I am pleased to announce two new policy staff. . .

Farm with royal connections goes on the market:

A history-rich farm once visited by Prince Charles for a private day’s trout fishing has been placed on the market.

Macdonald’s Farm near Galatea in the Eastern Bay of Plenty is a sprawling 907 hectare sheep and beef breeding/finishing property. The Whirinaki River, which runs rich with rainbow and brown trout, is on the western boundary for the farm.

Prince Charles was flown into the farm during the royal family visit here in 1970 to celebrate the bicentennial discovery of New Zealand by Captain James Cook. . .

Synlait Milk supports AgResearch’s approach to campus development:

Canterbury milk nutrition company Synlait Milk is supportive of the investment by AgResearch in its campus infrastructure.

Synlait Milk Managing Director Dr John Penno says there is recognition of the growing importance of Canterbury as an agricultural powerhouse.

“Canterbury is New Zealand’s fastest growing milk supply region, with production growth at an average 11% per season for the last 12 seasons. We acknowledge the technical challenges this growth brings, in particular farmers ability to manage their environmental footprint. . .

New Zealand wine industry participates in national sustainability project:

The wine industry is the first to trial a new national environmental, economic and social performance Dashboard system.

Led by The Agribusiness Group Ltd and funded by government and industries, the $11 million New Zealand Sustainability Dashboard project will provide a sustainability assessment and reporting tool for the primary industry sectors.

The Dashboard project will deliver tools that provide farmers and growers with crucial information on the environmental, economic and social performance of their vineyards or farms.  Information from key performance indicators will be used to improve results in areas such as energy use, nitrogen loss, carbon footprint and maintenance of biodiversity. . .

Prestigious Awards Reflect Heritage for Johanneshof Cellars:

Another two Gold Medals and a Trophy for Johanneshof Cellars at the recent New Zealand International Wine Show held over the weekend, reinforces the opinion that this Boutique Winery is on a record breaking streak. Just six weeks ago Wine Makers Edel Everling and Warwick Foley were on the winners podium at the 2013 Spiegelau International Wine Competition, accepting four medals and 3 trophies, including joint ‘Champion Producer of the Show’.  This time the Johanneshof Cellars 2011 Noble Late Harvest Riesling and the 2012 Marlborough Gewürztraminer received Gold Medal honours with the Gewürztraminer being awarded overall Trophy.

How does this unique winery, nestled in a tiny valley on the outskirts of the seaport town of Picton on New Zealand’s South Island, continually have the spotlight shined on them? . . .

Prized Clayvin Vineyard signs lease with Giesen Wines:

One of the oldest and most prized vineyards in New Zealand, Clayvin Vineyard in Marlborough, has signed a long-term lease to Giesen Wines.

The coveted vineyard, which is more than 20 years old, covers 13.4ha in the sought after Wairau Valley, and has supplied grapes for a string of award-winning wines over the years. Developed in 1991, Clayvin was Marlborough’s first commercial hillside vineyard.

Wholly organic, the block comprises 7.8ha of Pinot Noir vines, 3.36ha of Chardonnay, 1ha of Syrah, and another hectare of younger Sauvignon Blanc vines that are not yet in production. . .

Cloudy Bay 2013 Sauvignon Blanc Released Worldwide Today:

The 2013 vintage of Cloudy Bay’s international benchmark wine is now available to fine wine lovers worldwide from today Tuesday October 1st. An outstanding summer with excellent growing conditions has enabled Cloudy Bay winemakers to craft New Zealand’s most precious summer flavours into their Sauvignon Blanc 2013 vintage.

Widely regarded as the quintessential expression of the acclaimed Marlborough wine region – which enjoys the longest hours of sunshine of any place in New Zealand, Cloudy Bay’s Sauvignon Blanc is noted for its vibrant aromatics, layers of pure fruit flavours and fine structure. . .


Fonterra still #4 in global dairy

September 11, 2013

Fonterra has maintained its fourth place in Rabobanks top 20 dairy rankings.

The latest Rabobank survey of the world’s largest dairy companies (ranked by dairy product turnover1) has some familiar features. Nestlé and Danone remain at the top of the table and 18 of the 20 companies are the same as 12 months prior.
 
However,the survey also demonstrates some significant changes. The most notable shift at the top end of the table is the continued rise of Lactalis. With ongoing sales growth and the acquisition of Parmalat and Skånemejerier, Lactalis has moved from fourth into third position, and is now within striking distance of Danone. But the biggest strides up the table were made by the Chinese giants. Having entered the top 20 for the first time in 2010, Yili moved up four places into 15th and Mengniu moved up two places into 16th, riding the wave of domestic market sales growth.
 
Perhaps most striking is that despite the rise of the Chinese, the list of the world’s 20 largest dairy companies remains dominated by those based in OECD countries.
 
The headquarters for 18 of the 20 are in the EU, North America, Japan or New Zealand.
Shifting global dynamics call for strategic change:
This highlights one of the key challenges facing the world’s largest dairy companies. As outlined in Rabobank’s January 2012 report Show me the money, growth is expected to slow in these traditional dairy markets over the next five years, as the industry battles economic and demographic headwinds, already high dairy consumption levels, overweight consumers and concerns over the cost of dairy. By contrast, emerging markets such as China, South East Asia, India and Latin America are expected to offer good sales growth, with almost the opposite trends in place.
These dynamics have been developing for some time, and many of the world’s largest dairy companies have been working for years to ensure they are well placed to survive and thrive in this shifting market place. Those who are less well placed are now moving quickly to do so.
In slowing home markets, companies are building larger, leaner businesses and trying to tap into the pockets of faster growth that remain, sparking national and regional consolidation moves. At the same time, most are working hard to acquire the products, brands and competencies to build footholds in newer growth arenas.
Today, 16 of the largest 20 dairy companies have investments in manufacturing in Asia and/or Latin America; 15 of them have investments in China alone.
Companies are jostling for position
But an increased sense of urgency has entered the game of late, as the market trends accelerate and each new acquisition or merger narrows the remaining field of targets.
These strategic imperatives have generated a wave of M&A activity over the last 18 months, much of it cross border. The majority of the companies in our top-20 have bought other companies or entered joint ventures to strengthen their position during this period. The most significant moves have
included:
– Nestlé’s acquisition of Pfizer’s nutrition business, to buy improved entry into the rapidly growing infant nutrition sector in emerging markets;
– Lactalis’s acquisition of Parmalat, giving them access to several new markets around the world;
– FrieslandCampina’s acquisition of Alaska Milk in the Philippines, expanding their foothold in a fast-growing market;
– Arla’s proposed merger with Milk Link in the UK, and Milch-Union Hocheifel in Germany,consolidating their Northern European footprint;
– Canadian-based Saputo’s acquisition of the US cheese maker DCI to bolster its product portfolio in the US cheese market;
– Müller’s acquisition of Robert Wiseman Dairies in the UK and joint venture with PepsiCo in the US to tap into the expanding US yoghurt category.
Rabobank expects to see companies continue to vigorously pursue merger and acquisition targets in the next 12 months as they jostle to position themselves for growth and profit in a changing market environment.
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Fonterra 4th in Rabobank’s Global Dairy top 20

July 19, 2012

Fonterra has dropped a place to fourth by turnover in Rabobank’s Global Dairy Top 20 list – having been overtaken by French company Lactilis.

  The report highlights the ‘who’s who of dairy’ as well as the continuing spate of merger and acquisition activity and tensions between the past and future of the dairy industry.

The report, authored by Rabobank’s Food & Agribusiness Research and Advisory group, shows Nestle and Danone at the top of the list, which remains dominated by dairy companies in OECD countries:  headquarters for 18 of the 20 companies are in the EU, North America, Japan, or New Zealand. 

However, the biggest strides up the rankings this year were made by Chinese giants Yili and Mengniu, riding the wave of domestic market sales growth.  The report says that in fact most of the growth prospects for dairy companies lie beyond OECD boundaries.

The ability of these companies to respond to changing global market dynamics will determine their prospects for survival and success in coming years.  Rabobank expects to see dairy companies continue to vigorously pursue M&A targets in the next 12 months as they jostle to position themselves for growth and profit in a changing market environment.

Rabobank expects demand in traditional markets to face economic and demographic headwinds because of already high consumption, overweight consumers and concerns over price.

However, demand in emerging markets – China, South East Asia, India and Latin America – is expected to increase.

Sixteen of the top 20 companies already have manufacturing investments in Asia or Latin America.

The top 20 companies are: Nestle, Danone, Lactilis, Fonterra, FrieslandCampina, Dairy Farmers of America, Dean Foods, Arla Foods, Kraft Foods, Meiji, Unililver, Saputo, DMK, Sodiaal, Yili, Mengniu, Bongrain, Muller, Schreiber Foods, Land O’Lakes.


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