Rural round-up

July 25, 2015

Govt: Lighter rules insulating dairy shock – Suze Metherell:

Light regulation in the New Zealand dairy industry has insulated the wider economy from the sharp decline in prices for the country’s largest export commodity, according to Finance Minister Bill English.

Prices for whole milk powder, the country’s key commodity export, have plunged this year and dropped an unexpectedly large 10.7 percent in in the GlobalDairyTrade auction last week, sending the kiwi dollar to six-year-lows.

Dairy prices are now expected to remain lower for longer than previously forecast, amid higher global supplies, weak demand in China and an import ban in Russia on European dairy products, which are being sold into other market. . .

Vets to cut down on antibiotics:

The Veterinary Association has set an ambitious target to reduce the use of antibiotics to control disease in animals.

Its goal is to have New Zealand no longer having to rely on using antibiotics for animals by 2030.

President Steve Merchant said the country was well suited to the challenge because of its size, and the fact that it was already the world’s third lowest user of antibiotics on animals. . .

Changes to Health and Safety Reform Bill are sensible:

Federated Farmers believe the two month delay in the Select Committee reporting back the Health and Safety Reform Bill to Parliament has led to improvements for the farming industry.

The Bill has been reported back today.

Federated Farmers health and safety spokesperson Katie Milne says the Bill overall will make farms safer places.

Specifically she says the Bill has gone some way to recognising that farms are different to urban industrial workplaces. . .

 

New Māori aquaculture agreements signed:

New regional agreements for Māori commercial aquaculture have been signed by Government Ministers today, including Primary Industries Minister Nathan Guy.

Three regional agreements have been signed with iwi from the Auckland, Tasman, and Marlborough regions following successful negotiations between the Crown and regional Iwi aquaculture organisations.

The agreements are the result of the Māori Commercial Aquaculture Claims Settlement Act 2004, which requires the Crown to provide Iwi aquaculture organisations with 20% of new commercial aquaculture space consented since October 2011, or anticipated to occur into the future. . .

Australian consortium said to be in no hurry to up their bid for A2 Milk – Fiona Rotherham:

(BusinessDesk) – Australian-based Freedom Foods and US-based Dean Foods are said to be in no hurry to up their bid for A2 Milk Co after the milk marketer this week told its suitors to try again after an initial offer wasn’t compelling and drew out as yet unnamed rival bidders.

A source close to the bidding consortium said they were underwhelmed by a trading update A2 Milk released at the same time as rejecting the offer and request for due diligence, saying it contained “nothing that would shift their view on valuation”.

Given Freedom Foods, the company’s previous joint venture partner in Australia, has a 19.1 percent blocking stake in A2 Milk, any rival bidders may struggle to get an offer across the line. . .

 

Wool market buoyant:

New Zealand Wool Services International Limited’s General Manager, Mr John Dawson reports that today’s sale of 6,617 bales saw increases of 1 to 2 percent overall. A good result, considering offering of 52 percent Coarse Crossbred Early Shorn and Second Shear types.

There was good demand for shorter Second Shear types 2 to 3 inch 32 to 35 micron as buyers bid to cover Chinese orders.

The trade weighted indicator was little changed from the last wool sale on 16th July. . .

 

 


Rural round-up

July 21, 2015

Farmers And Forest & Bird Unite to Explain 1080 Facts:

The Pest Control Education Trust, a joint Federated Farmers and Forest & Bird initiative, today released ‘1080: The Facts’, a resource created to increase public understanding of 1080 and how it is used.

The fact sheet is an illustrated, easy-to-read rundown on which predators are targeted by 1080 and the native species that benefit from its use, and how using 1080 prevents the spread of bovine tuberculosis. It also outlines the precautions taken to ensure 1080 operations are safe.

Federated Farmers National Board Member and a Trustee of the Pest Control Education Trust (PCET) Chris Allen says the fact sheet has been produced in response to strong public demand for accessible, factual, summary information about 1080 and its use. . .

Open Country dairy slashes milk price forecast – Andrea Fox:

New Zealand’s second biggest milk processor Open Country Dairy has slashed its milk payout forecast by more than $1kg for the season as industry pessimism deepens about the multi-billion dollar dairy sector’s earnings outlook.

Open Country had until last week been forecasting a milk payment of $4.75-4.95kg milksolids to its around 700 national supplier farmers. 

Now it has told its farmers to instead bank on $3.65-$3.95kg. . .  

Partnership Helps to Set New Zealand Beef Apart From the Competition:

A partnership between Beef + Lamb New Zealand and a restaurant chain in Taiwan is helping to open consumers’ eyes to the nutritional benefits of grass-fed New Zealand beef.

New Zealand product makes up more than 80 per cent of the beef dishes offered on Royal Host’s menu.

The chain has 14 locations across Taiwan and caters for family dining in particular. Vice President Shirley Huang says local diners put a premium on safe, quality food, so Royal Host values that New Zealand beef is such a positive option. “In our menus, we include images of cows grazing peacefully on open pasture. New Zealand grass-fed beef is low in fat and has lower cholesterol.” . .

 

A2 shares fall as investors weigh up funding needs – Paul McBeth:

 (BusinessDesk) – A2 Milk Co shares fell to a three-week low as investors weighed up the company’s funding needs after the board turned down a potential offer from cornerstone shareholder Freedom Foods Group and US food and beverage firm Dean Foods.

The shares fell as low as 70 cents in morning trading on the NZX, and were 6.5 percent to 72 cents shortly before midday. A2 today said it told Freedom and Dean Foods the expression of interest wasn’t compelling enough to get a board recommendation if a formal bid was made, though was open to talking with the suitors. It has also attracted other potential bidders and is evaluating them. . .

Major Revamp of Dairy Awards:

The most significant changes in the history of the New Zealand Dairy Industry Awards have been made to enhance the competitions and enable more dairy farm workers to enter the awards programme.

Awards Executive Chairman Gavin Roden says he is excited about the changes that have been made to all three of the awards competitions.

“As an executive we had identified for a few years that there were a lot of people that couldn’t enter our awards because of the changing face of the industry and employment,” Mr Roden says. . .

Worker participation key to future safety:

After months of industry consultation, the forest industry has a new safety body – the Forest Industry Safety Council (FISC). Most importantly, there has been practical input from experienced forest contractors from on the forest floor and workers with experience at the bushline.

Some simple questions and answers may help explain how FISC will work:

Q: Who decided forestry needs a safety council?

A: The independent forest safety review team was not satisfied that people on the forest floor had a voice in making workplaces safer. Following the review and its recommendations, FICA has worked with forest owners and managers to put in place this new group. It will focus on safety using incident information reported by people working at the bushline to identify work areas. . .

 

Farmers get online survey option:

Farmers are for the first time this month completing their annual Agricultural Production Survey online.

Every year Statistics New Zealand surveys about 30,000 farmers about their land, livestock and crops, and farming practices.

This week farmers can start filling in their online survey forms, once they’ve received details in the post.

The survey measures changes in the sector, and is used for planning and forecasting. Farmers can use survey results on the Statistics NZ website to keep track of trends and make changes in their businesses. . .

 

Ballance appoints General Manager Sales:

Ballance Agri-Nutrients has appointed Campbell Parker as General Manager Sales.

Campbell will join the co-operative in October, following a successful banking career, including leadership of BNZ’s Partners Network and a track record in rural lending.

Ballance CEO Mark Wynne says Campbell combines sales leadership experience with a strong understanding and connection with the agri-business sector. . .

Bayer Central Otago Young Viticulturist of the Year 2015 announced:

Congratulations to Mike Winter from Amisfield who has just become the Bayer Central Otago Young Viticulturist of the Year 2015 and now goes through to the National Final. After a challenging day of activities on Friday at the Central Otago Polytechnic, the contestants’ final task was to deliver a speech at the Annual Winemakers Feraud dinner on Saturday night at Northburn.

It was a very close competition with Annabel Bulk taking 2nd place and Cliff Wickham coming 3rd, both from Felton Road Vineyard. . .

 

 


Rural round-up

June 25, 2015

Supplies helicoptered to rural people:

Emergency services in Taranaki have delivered essential supplies to 20 to 30 rural people who remain cut-off following the weekend floods.

Helicopters have been kept busy in Taranaki and the neighbouring Whanganui region ferrying supplies to isolated farms and rural communities and in some cases, evacuating people needing to get out.

Taranaki Rural Support Trust chair Graeme Hight said there were still two areas in the south of the region where road access was blocked. . .

Dean – Balance needed around Rural Health and Safety Reforms:

Waitaki MP Jacqui Dean says it is crucial to get the balance right with proposed health and safety reforms.

“The health and safety reform bill is currently before parliament and while I welcome any moves to improve safety for farmers and small business owners, I also don’t want it to prove too onerous. . .

Student out to make a difference – Sally Rae:

Shaun Snoxell loves the land and food production.

The Lincoln University student also has a passion for poverty alleviation, the result of time spent volunteering in Africa.

So when he found out about a global Youth Ag Summit in Australia this year, with a theme of Feeding a Hungry Planet, he was keen to apply. . .

NZ honey peak body could cost $2m, but who pays? – Suze Metherell:

(BusinessDesk) – A proposal to create a single body representing New Zealand’s beekeepers and honey product sellers could cost $2 million a year, but doesn’t yet have agreement on how it would be funded.

The industry concluded its four-day conference in Taupo amid expectations China will impose standards on the lucrative manuka honey trade, which has drawn criticism in the UK after a number of false claims to manuka pedigree from what were just blends. Asian demand for manuka honey has seen the price across all New Zealand honey increase, stoked by a global shortage of honey. Bees produced $187 million of exported honey in the June 2014 year, up 8 percent by volume and almost 30 percent by value on the previous year. . .

A2 confirms Dean Foods is other party in possible bid -Paul McBeth:

(BusinessDesk) – A2 Milk Co has confirmed media speculation that Texas-based food and beverage company Dean Foods is the other party with Freedom Foods that is contemplating making a takeover offer for the milk marketing business.

Dual-listed A2 said it made the disclosure at the request of the ASX in response to media reports. The Australian Financial Review’s Street Talk column yesterday named Dean Foods as the second party in a consortium seeking to buy A2, providing an alternative route for the company, which markets milk with a variant protein, to expand in the US. The AFR speculated the bid could be as much as $2 a share, a massive premium to A2’s share price of 57 cents before potential takeover became public. . .

Solving the dairy payout – Chris Lewis:

After reading the article ‘The buck stops at Theo’, with Labour’s Primary Industry Spokesmen, Damien O’Connor, claiming he needs to take a voluntary pay cut, I wondered will this solve our problems.

A topical discussion at the moment is that do Fonterra directors need to go? Would such a move restore credibility with farmers and staff? While it might bring a bit of satisfaction to people to have someone fall on the sword for our low pay out, I personally doubt all these calls will solve our issues. . .

 


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.


Fonterra #1 world processor

June 25, 2009

The International Farm Comparison Network has judged Fonterra the number one milk processor in the world.

IFCN benchmarked 600 milk processors in more than 70 countries and found that the top 21 processors represent just 21% of world production.

Fonterra, at number 1, processes 2.7% of world production. It was followed by Dairy Farmers of America, Nestlé, Dean Foods and FrieslandCampina.

India produces 114.4 million tonnes of milk making it the top producer by volume. New Zealand is ninth with 17.3 million tonnes.

The report says the dairy crisis is global, affecting 150 million dairy farming families.

The world price for milk reached $US20 (15 Euro) for 100 kilos in 2008 but IFCN found only 10% of the world’s milk can be produced at that price.

It said that price isn’t sustainable unless the market is distorted by policy and that dairy policy will be the main driver for the future milk price level.

I’m not sure what they mean by policy but I suspect it means political interference resulting in subsidies and/or quota.

The NBR has Fonterra’s reaction to the report.


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