Rural round-up

19/09/2016

Officials crack down on dairy farmers for breaching employment obligations – Gerard Hutching:

Officials have discovered that half of the 28 dairy farms they visited in the last two months in Waikato were in breach of their employment obligations and have fined some farmers $2000 each.

The Labour Inspectorate has promised a nationwide crackdown on employers who fail to keep written employment agreements or time records. Maximum fines can reach $20,000 for serious breaches.

Federated Farmers dairy spokesman Andrew Hoggard said he could not defend the farmers.

“There are no excuses. Employment agreements have been around since 1991 so they can’t say they don’t know,” Hoggard  said. . .

Tenacity and vision mark tenure – Guy Williams:

One of Queenstown’s most respected community servants has hung up his chainsaw. Peter Willsman, the driving force behind the region’s ground-breaking wilding tree control group, has stepped down as co-chairman. Queenstown reporter Guy Williams asks him why, and looks at his legacy.

Wilding trees throughout the Wakatipu — and probably in the rest of the country as well — may well be standing a little taller this week.

That is because one of their biggest scourges, Peter Willsman, has called time on his leadership role in the Wakatipu Wilding Conifer Control Group (WCG).

Co-chairman since the group’s formation in 2009, he announced his resignation at its annual “reporting night” last week. . . 

100 farmers dump milk following silo collapse – Vaughan Elder:

About 100 farmers in Otago and Southland were forced to dump milk over the weekend in  the aftermath of the milk silo collapse at Fonterra’s Edendale site.

Fonterra has called in engineers from around New Zealand and the world to try to get the plant fully operational again after the silo collapsed  on Friday, bringing down an overhead gantry carrying large steam pipes.

Neighbours reported hearing a  loud boom about 1.50pm, followed by the  sound of steam escaping from the ruptured pipes, a noise which continued for about 30 minutes.

One said it sounded like a Boeing 747 flying low overhead. . . 

Farm trends shut yards – Neal Wallace:

The South Island’s largest sale yards at Temuka in South Canterbury are benefiting from competitors closing but could not take anything for granted, Temuka Saleyards Company chairman Ian Bowan says.  

The company has spent more than $100,000 on electronic ear tag readers and was planning a new effluent disposal system.  “We’ve kept up with everything. We haven’t got behind,” he said.  

News the Tinwald yards in Ashburton would close later this year confirmed a trend of consolidation of sale yards around the country, some closing and others holding fewer sales.  

Closures in recent years included Cromwell, Matamau near Dannevirke and Studholme and Holme Station in South Canterbury. . . 

Synlait’s Profit Triples in Fy16, Launches Next Growth Phase:

Synlait’s reported net profit after tax (NPAT) has more than tripled to $34.4 million for the financial year ending 31 July 2016.

Driven by an almost fourfold increase in canned infant formula volumes and growth in powder and cream product volumes, the positive result has also set the foundation for Synlait’s next phase of growth.

“Synlait is a growth company. Our FY16 performance highlights the progress we’ve made since our IPO in 2013 towards our aspiration of making more from milk,” said Chairman Graeme Milne.

“We are continuing this momentum with an accelerated pro-rata entitlement offer to eligible shareholders[1] to raise approximately $98 million in support of our next growth phase. Investing in further capital projects to expand our capability and capacity will put us in a strong position to pursue customer, product and market development opportunities in the coming years,” said Mr Milne. . . 

Quality can sell grain – Annette Scott:

New Zealand grains are in a league of their own and should be marketed as such, industry leaders say.  

Heavy reliance on the dairy industry had affected arable growers’ returns so they suggested other principle markets should be explored.  Market trends, challenges and opportunities were the focus of a grains forum held in Canterbury on Thursday.  

Facilitated by the Grain and Seed Trade Association (GSTA) in conjunction with the Foundation for Arable Research and Federated Farmers, the forum stimulated thinking around plans for future action in the grains sector. . . 

Prices keep heads shaking – Hugh Stringleman:

Keen demand for young cattle for restocking will centre on sale yard prices for 100kg weaners from the end of the month, AgriHQ livestock market analyst Rachel Agnew says.  

The weaner market was expected to open with prices well over $4/kg liveweight, probably $4.50 to $4.80.  

“Inquiry levels are starting to build up and the first weaner calves are an eagerly anticipated part of the annual cattle cycle,” she said.  

Buying weaners was a way of stocking up with the lowest financial outlay. . . 

Computing giant includes rural secondary schools in “vision’ competition:

HP New Zealand (HP NZ) is asking rural students to share their vision of how they think they will learn in the future to be in the running to win a share of $26,000 worth of HP products and support.

The HP Rural Schools Competition, in its third year, gives rural New Zealand primary schools – and for the first time this year – secondary schools, the chance to win HP technology and support best suited to the school’s needs. Entries are open now. . . 

Image may contain: text


Fonterra expands in NZ and proposes partnership in China

27/08/2014

A newsletter to suppliers from Fonterra chair John Wilson announces plans to expand processing in New Zealand and the proposal for a new partnership in China:

Your Board has given approval to build a new high efficiency milk powder drier in the North Island and further increase milk processing capacity in the South Island to help meet global demand for dairy products.

This investment, totalling $555 million, will grow the Co-operative’s processing capability and allow for more flexibility to better optimise production.

New Zealand is our most important milk pool.  Our strategy is to increase earnings by driving more of your milk into higher value categories.  It’s all about turning the wheel from commodities to higher-margin products.

Key points on the new Lichfield drier:

  • Capable of processing up to 4.4. million litres per day
  • Similar in size to the world’s largest drier at Darfield which produces up to 30 metric tonnes of Whole Milk Powder per hour, and 700 metric tonnes per day
  • Will use the latest energy-efficient processing and water reuse technology.

Three plants will also be installed at our Edendale site in Southland.  Key points are:

  • Milk Protein Concentrate (MPC) plant which separates protein from skim milk and turns it into protein powder – capable of processing 1.1 million litres per day
  • Reverse Osmosis (RO) plant which will increase capacity on an existing drier by 300,000 litres per day
  • Anhydrous Milk Fat (AMF) plant capable of processing 550,000 litres of milk into cream per day

In total, the development of Edendale will increase capacity by 1.4 million in milk, and 550,000 litres of cream processing per day.

Global Partnership with Beingmate

We are establishing a global partnership with Beingmate, which is one of the leading infant food manufacturers in China.  Beingmate is already a long-standing customer – and is a well-established and respected company in China.

Our partnership will be the next milestone for our strategy, as it will increase the volume and value of our ingredients and branded infant products exported to China.

Together we will create a fully integrated global supply chain from the farm gate direct to China’s consumers, using Fonterra’s milk pools and manufacturing sites in New Zealand, Australia, and Europe.

This global supply chain will see more of our high quality dairy ingredients and our Anmum™ brand exported from here in New Zealand. It will see more high value paediatric products made in Australia for China at the Darnum plant – that is our second milk pool. And it includes a third milk pool in Europe where whey specialty ingredients will be manufactured at our new JV plant in the Netherlands, and through our alliance with Dairy Crest in the UK.

This partnership is about volume and value.  The value will come from accessing Beingmate’s extensive distribution and sales network in the infant formula market in China.  This market is today worth around NZ$18 billion – and is expected to be worth nearly NZ$33 billion by 2017.

This partnership will come together in two phases:

We are starting the process to issue a partial tender offer to gain up to a 20 per cent stake in Beingmate. Depending on the response to the tender offer, Fonterra’s total investment in the global partnership will be in the range of NZ$615 million (including proceeds from the JV in Australia), funded through debt.  

After gaining regulatory approvals and Fonterra satisfactorily completing the partial tender offer, Fonterra and Beingmate will set up a joint venture to purchase Fonterra’s Darnum plant in Australia and establish a distribution agreement to sell Fonterra’s Anmum brand in China.

The purpose of the proposed joint venture will be to manufacture nutritional powders, including infant formula and growing up milk powder at Darnum, for Beingmate as well as Fonterra.

Beingmate will own 51 per cent of the JV to satisfy Chinese regulatory requirements.

The JV will be governed by a Board, and Fonterra and Beingmate will each appoint two directors. 

We will manage Darnum’s operations, under a formal management agreement.  We will also supply raw milk to Darnum.

Summary

Today’s announcements are a major step forward in our strategy to be a globally relevant co-operative so that we can will deliver increased returns to our farmers – through both the Milk Price and dividend – during the ups and downs of global dairy price volatility.  We are financing the increases to processing capacity and our partnership with Beingmate from a solid balance sheet position, and a strong gearing position will be maintained.  These investments are intended strengthen returns by:

  • Turning more New Zealand milk into higher value products  
  • Optimising the use of our Co-operative’s global assets  
  • Investing in capacity and flexibility of our New Zealand assets  
  • Building a fully integrated global supply chain. . . .

This is very good news for the company and the communities where it is expanding processing because of the jobs that will be created.

The board also decided to hold the forecast farmgate payout at $6 a kilo.

Along with a previously announced estimated dividend range of 20-25 cents per share, the forecast Cash Payout for the season is $6.20-$6.25.

The decision to maintain the forecast Farmgate Milk Price reflects the longer term outlook for international prices for dairy. Current market views supported by our own forecasting indicate commodity prices improving later this year or in early 2015, with global demand for dairy continuing to grow year-on-year. 

While the long-term market fundamentals remain sound, we need to recognise that the current conditions are difficult and there remains further downside risk.

There is still volatility. This reflects challenges with supply and demand following a good dairy season globally. Given these factors, the forecast is our best judgement at this time.

It is early in the season, and it is important to continue exercising caution with your farming business budgets. The reality is, we expect to see ongoing volatility, and we will keep you informed as we move forward.

Russia’s decision to block European imports and cheaper grain prices which are leading to an increase in production in the USA will both have an impact on the supply of milk and other dairy products.

Fonterra and its suppliers are right to be cautious.

For more see media releases:

FONTERRA INCREASES PROCESSING CAPACITY TO HELP MEET GLOBAL DEMAND

FONTERRA AND BEINGMATE INITIATE GLOBAL PARTNERSHIP IN CHINA’S HIGH-VALUE INFANT FORMULA MARKET

FONTERRA MAINTAINS FORECAST FARMGATE MILK PRICE FOR 2014/15 SEASON


We went to the field days and we saw . . .

12/02/2010

The sun shone, the people flocked and the exhibitors smiled at the Southern field days at Waimumu .

Many companies were sharing sites to save money so site numbers were down a bit on the 2008 record but there were still about 450 exhibitors covering several acres of ground.

We probably saw fewer than half of them in the couple of hours we were there but those we chatted to were happy with the sales they were making – especially the Mitsubishi dealer who’d sold 6 utes.

The mood was relaxed. Farmers we spoke to were looking for rain but cautiously optimistic about the outlook.

Today’s the final of the three day event.

Jamie Mckay  will be broadcasting the Farming Show live from Waimumu. One of his guests will be Prime Minister John Keywho will then be going to Edendale to open Fonterra’s new milk drying plant – the biggest raw milk processing plant in the world.


%d bloggers like this: