Rural round-up

04/02/2021

Pandemic’s silver lining – Anne Boswell:

The recognition of farmers’ contribution to New Zealand’s food production system has been identified as a positive aspect of the covid-19 pandemic experience, according to a new study released by AgResearch.

One farmer experienced “a change in attitude among the public around how they value the security of food production and therefore the role of farmers in providing that food.”

Others noted “NZ agriculture is starting to be seen as an important cog in the mechanism again,” “greater recognition of the true value of agriculture and primary producers,” and “governments and communities recognised the importance to our standards of living that agriculture provides plentiful safe food and fibre.”

The study, conducted by AgResearch scientists, New Zealand Institute of Economic Research (NZIER) and several science organisations in NZ and Australia, surveyed farmers and others working in the agriculture and food systems in Australasia about the impacts of covid-19 in the period through to June 2020, which included national lockdowns. . . 

Outlook for 2021 ‘bristling with risk’:

Amid significant global turbulence, New Zealand agricultural producers are poised to enjoy a fifth consecutive year of general profitability in 2021, according to a new report by Rabobank.

In the bank’s Agribusiness Outlook 2021 report, Rabobank says while the outlook for the year is “bristling with risk”, and bumps are anticipated throughout the coming months, most agricultural sectors can expect to see average to above-average pricing, manageable cost inflation and production holding up well.

Report co-author, Rabobank senior dairy analyst Emma Higgins says that as 2021 gets underway, the world is still turbulent for New Zealand’s agricultural sector. . . 

Important for UK to convert trade liberalisation narrative to action as it seeks to join CPTPP:

In welcoming the UK’s application to join the CPTPP agreement, the Dairy Companies Association of New Zealand (DCANZ) is stressing the need for the UK to convert its statements of commitment to leadership in global trade liberalisation to meaningful action.

“The UK’s application to join CPTPP is another great sign of its interest in advancing global trade liberalisation. However, the real test of UK trade leadership comes from how it honours its existing commitments and what it is prepared to put on the table in negotiations” says DCANZ Chairman Malcolm Bailey.

“Despite the UK’s strong statements of ambition, including for a high-quality UK-NZ FTA, we are yet to see it remedy concerns about diminished quota access following Brexit and we have detected hesitancy on its part to bringing real liberalisation to the FTA negotiating table. Avoiding a disconnect between intent and action is important if current and potential trade negotiating partners are to have confidence in the UK’s stated ambitions”. . . 

Zespri secures labs for taste tests – Richard Rennie:

Zespri has confirmed several laboratories have been approved for the next three seasons to conduct the vital taste profile tests for kiwifruit, a major component of grower payments.

Zespri’s chief global supply officer Alastair Hulbert says following an intensive three-month procurement process, a range of service providers have been selected for the tests.

They include AgFirst in Hawke’s Bay and Nelson, Hill Laboratories, Linnaeus, Pinpoint Lab Services and Verified Lab Services.

The replacement companies were necessary due to Zespri’s previous lab service Eurofins Bay of Plenty dropping the test at the start of last season, leaving the industry without the valuable test. . . 

Station site of lotus research trial – Yvonne O’Hara:

When the Garden family at Avenel Station say Lotus pedunculatus or Lotus uliginosus, they are not casting Harry Potter spells.

They are talking about the legume, Maku lotus (Lotus uliginosus)

It is a variety of trefoil that has been trialled on a 500ha block on their high country property since 2014.

Pat Garden and his brother Eion had sown lotus on the property in the 1980s.

Subsequently, Pat and his son Nick took part in the more formal research “Legumes for Hard Hill Country” trial, which was funded through the Sustainable Farming Fund, with input from PGG Wrightson Seeds, Grasslanz Ltd, AgResearch’s Dr David Stevens, and Beef + Lamb New Zealand. . . 

Offal market lifts on pandemic demand – Shan Goodwin:

OVERSEAS demand for lower-value red meat products as the pandemic continues to cut into household incomes has served the Australian offal market well, with prices across the board either firming or stable.

Meat & Livestock Australia’s latest co-product market reports shows halal kidneys recording the strongest growth, up 93 per cent year-on-year, while lungs and hearts lifted 45 and 28pc, respectively. Halal hearts averaged a solid $3.15 a kilogram, up 70c from December.

Liver prices averaged $1.28 a kilogram, 19c up month-on-month.

On the other hand, premium products such as tongue, thickskirt and rumen pillars eased somewhat. . . 


Rural round-up

22/12/2013

Meat industry looks interesting for 2014 – Allan Barber:

Next year will be an interesting one for the red meat sector with highlights predicted to include improved sheepmeat prices compared with last season, the probability of a procurement battle for fewer lambs and prime cattle, continuing work with research funding and the efforts of new MIE sympathetic directors on the boards of SFF and Alliance.

The big question will be whether the discussions about industry restructuring will actually achieve anything and how much impact the new cooperative boards can have on those efforts. So far we know SFF, Alliance and ANZCO have already talked to the government about introducing some form of tradable slaughter rights, but have been rejected.

There is support for a merger of the two cooperatives from a number of farmers, although retiring chairman, Eion Garden, stated at the AGM on 18th December that a merger wasn’t necessarily the right answer. He said there was no point in creating a bigger version of the same thing, but there was a need for an innovative structure to deliver a ‘great’ outcome. . .

Early Christmas present for sheep farmers:

Meat company Lean Meats has announced a bonus payment to its farmer supplier shareholders after a stronger company performance in 2013.

Lean Meats chief executive Richard Thorp today announced a return to its Atkins Ranch Producer Group (ARPG) providing shareholder farmer suppliers an average of 31 cents a kilogram or $5.74 a lamb.

This year’s payment is split with an average of $1.85 per head paid at six weeks after processing and the remaining $3.89 per head being paid in the last working week of December. . .

Beef in 2014: Demand bright, local supply tight:

New Zealand’s beef industry faces brighter prospects in 2014 with strong international demand, combined with tight local supply, according to a new report released by agribusiness banking specialist, Rabobank.

The report, Beef in 2014: Demand bright, local supply tight, says the decline in beef production, particularly in lean beef, in the United States – New Zealand’s largest beef export market – means New Zealand product will be in demand.

However, the Rabobank report cautions, in other less traditional markets – where cost is the primary determinant – growing competition from India should be expected, with increased local Indian supply available for export. . .

Proactive approach to land management – Anne Hardie:

One of the things Barbara Stuart loves most about her sustainable land management role is working with farming families who are trying hard to look after their environment.

As a regional co-ordinator for NZ Landcare Trust she works with community groups in the top of the South Island dealing with sustainability issues, including the award-winning Sherry River Catchment Group, which carried out research on cow crossings and water quality, leading to environmental plans for the landowners along the river.

Over the years she has also worked on projects to improve the water quality of Aorere River in Golden Bay, following concerns from mussel farmers beyond the river mouth, of Rai River, which leads to the Havelock estuary, and on erosion of Marlborough dryland farming with the Starborough Flaxbourne Soil Conservation Group. . .

Mr Weeds’ latest work has gained attention – Richard Rennie:

AgResearch weed scientist Trevor James’ latest literary efforts may not make the bestseller list but he and his colleagues are already receiving international praise.

Trevor has worked in a cross-sector team to compile a definitive guide to New Zealand weed seeds, the Illustrated Guide to Weed Seeds of New Zealand.

It includes high-resolution shots of every weed seed identified in the country. This includes unwelcome intruders that may not have germinated in this country but have been found as stowaways in biosecurity checks. . .

Small-scale agriculture holds big promise for Africa – Caspar van Vark:

Supporting smallholder irrigation through finance and technical assistance could significantly improve productivity and incomes.

The recent discovery of a large aquifer in Kenya is a reminder that far from being dry, Africa has abundant water resources. The problem for farmers is access: only around 6% of cultivated land is equipped for irrigation, leaving millions dependent on rain-fed agriculture. How might more of them be helped to access water that could raise their productivity?

Large-scale, government-funded irrigation systems have long attempted to address this, with varying degrees of success. Those systems have a place, but research by the International Water Management Institute (IWMI) has found that many smallholders are themselves taking the lead and investing in their own low-cost, small-scale irrigation systems. . . .

And from the Nutters Club NZ:
:) kindest, Boris


Rural round-up

19/11/2013

Lipstick doesn’t hide the ugly truth – Allan Barber:

Silver Fern Farms released its annual loss accompanied by a press release which attempted to put some gloss on what was in reality an awful result. It was an improvement on the year before, a matter of some pride on the teleconference this morning, but a $36.5 million loss was only $5.8 million less than the previous year.

The main improvement was in the cash flow deficit which at $5.1 million was a lot better than the deficit of $104 million in 2012. Nevertheless chairman Eoin Garden’s statement that ‘the equity position at 39% (down from 41%) is healthy and the business platform is sound and competitive’ is a matter for debate and looks suspiciously like applying lipstick to a pig. . .

$56,000 for feed – Geraldine Panapasa:

THE shortage of copra meal in the dairy industry has forced the Fiji Cooperative Dairy Industry Limited Company to look to its regional neighbour for assistance in supplying supplementary feed.

Cooperative chief executive Sachida Nand said four containers from the Solomon Islands carrying 85 tonnes of palm kernels had arrived in Fiji to supplement the major shortage in copra meal and cost the company about $56,000.

He said two containers of the supplementary feed arrived last month and more were expected in the future. . .

Still too early for full assessment of lost trees:

The Farm Forestry Association says it’s too early yet to know how many of the trees lost in the spring storms in Canterbury will be replaced.

Well over 1 million tonnes of timber were lying on the ground throughout Canterbury and further afield in September and October.

Entire shelter belts were knocked down and some commercial plantations and woodlots were badly damaged.

National president Ian Jackson of Canterbury said the priority at the moment is to get the clean-up done. . .

FarmIQ and Fronde put the smarts into farming

 In collaboration with technology company Fronde, FarmIQ has created an online farm management system that helps farmers produce a red meat product that will consistently meet consumer preferences and provide better returns.

FarmIQ, co-funded by the Ministry for Primary Industries, Landcorp and Silver Fern Farms was established to transform the nearly $8 billion annual export red meat industry through innovative technology. . .

New code of practice requirement for aerially-assisted trophy hunting:

The proposed new Game Animal Council will have a new responsibility of developing and applying a code of practice for aerially-assisted trophy hunting, Conservation Minister Dr Nick Smith announced today.

“Hunters and other backcountry users are concerned that certain aerially- assisted trophy hunting methods undermine their recreation through un-sportsman-like hunting. They have lobbied to prevent the practices of shooting from the helicopter, or using the helicopter to herd animals towards the hunter or exhaust them through the practice of hazing,” Dr Smith says. . .


Rural round-up

07/11/2013

DairyNZ ramps up investment in environmental area:

DairyNZ is boosting dairy farmers’ investment in the environmental area by 61 percent in this financial year, from $6.7 million to $11 million as part of its efforts to meet its commitments under the new Sustainable Dairying: Water Accord and the National Policy Statement on Freshwater Management.

DairyNZ Chief Executive, Tim Mackle, says the environmental portfolio is helping farmers boost profits while lowering their environmental impact, supporting farmer-led waterway improvement projects and investing in nutrient management research and resources. “It also supports our industry’s new dairy farming strategy and our objective to have proactive environmental stewardship.

“Biosecurity is also a big investment at $16 million but even this funding has environmental benefits as we are the largest non-government funder of the TBfree programme that focuses a lot on possum control with clear biodiversity benefits,” he says. . .

Landcorp focus will stay at home – Alan Williams:

Landcorp is getting approaches to develop and manage farms overseas but is busy enough in New Zealand.

The magnitude of its work in NZ and the opportunities ahead made expansion offshore unlikely, new chief executive Steven Carden said.

Three months into his posting at the State-owned farmer, he is working through a strategy review with the board, taking stock of where they are and the opportunities ahead. . .

Challenges to food industry for feeding the world:

Finding innovative ways to utilise waste, a greater focus on consumer driven research, and increased Government investment are just some of the challenges facing the food industry in New Zealand according to Lincoln University’s Professor of Food Science, Charles Brennan .

Professor Brennan was speaking as part of the Foods for Now and the Future Forum held at Lincoln University last week. The forum was arranged by the New Zealand Institute of Agricultural and Horticultural Science and the New Zealand Institute of Food Science and Technology.

On the subject of wastage in food production and consumption he noted that some 50% of packaged salad greens and 40% of bread and cereals may be discarded in some countries around the world. However, utilising smarter production methods and taking a more innovative approach when it comes to wastage could mean up to one billion people could be fed worldwide. . .

Fonterra Strengthens Its Position in Australia:

Fonterra has today further strengthened its position in the Australian dairy industry by acquiring the assets of Tasmanian yoghurt business, Tamar Valley Dairy.

Under the agreement, Fonterra will acquire the processing equipment, the related services, and intellectual property and trademark for the Tamar Valley Dairy brand. The acquisition is effective towards the end of November (subject to completion of the sale), with the exact date to be confirmed.

“Fonterra is a long-standing partner of Tamar Valley Dairy, and has supported and worked closely with the administrators of the family-owned business during what has recently been a difficult period for the Tasmanian business and its founders,” said Judith Swales, Managing Director, Fonterra Australia. . .

Aussie cattle empire sale fails, amid land wrangle:

A second huge Australian cattle operation has had trouble selling, with the North Australian Pastoral Company being withdrawn from the market, amid tough industry conditions and a growing debate over land ownership.

North Australian Pastoral Company’s ruling Foster family has taken down the for sale sign after six months of marketing the 58,000-square kilometre (14.3m acre) property – an area nearly twice the size of Belgium and nearly as big as the US state of West Virginia – failed to attract an “acceptable proposal”.

Besides the Foster family’s 61% stake in Napco, a 34% stake held by London-listed plantations group MP Evans was also up for sale. . .

New Directors Appointed to Board of Aotearoa Fisheries Limited:

Te Ohu Kaimoana (the Maori Fisheries Trust) has appointed three new directors to the board of Aotearoa Fisheries Limited.

Mr Anthony Hannon, a merchant banker with extensive experience in tax consulting, private equity and asset management, and Ms Liz Ward (Ngāti Porou), a former Chief Executive of Deep Cove Fisheries and Wellington’s CentrePort, have been appointed for a term of three-years. Mr Alan Gourdie, an Auckland-based consultant with international management and marketing experience as a chief executive and director, has been appointed for a two-year term from 1 November. . .

Nominations in for Silver Fern Farms’ Director Elections:

Three nominations have been received for the two positions on the Silver Fern Farms’ Board of Directors.

Eoin Garden and David Shaw retire by rotation at the Company’s 2013 Annual Meeting which is to be held in Dunedin on 18 December 2013.

Eoin Garden has advised he will not be standing for re-election and will therefore retire at the Annual Meeting. David Shaw has advised that he will stand for re-election.

The candidates for election are:

Dan Jex-Blake
David Shaw
Richard Young . . .


Rural round-up

17/10/2013

Overseas experience to boost FMD preparation:

Primary Industries Minister Nathan Guy has announced that a delegation of 10 veterinarians, farming leaders and MPI staff will take part in foot and mouth disease (FMD) training in Asia next year to experience working with the disease first hand.

“While the major focus is always on preventing FMD, it is also very important that we are prepared to respond to such an outbreak quickly and effectively if it ever did happen.

“The training will develop a larger pool of people in New Zealand with experience in recognising, diagnosing and controlling the disease.

“This is the latest initiative in a major 18-month programme of work, which involves the Ministry for Primary Industries and an industry working group working together on key projects,” says Mr Guy. . .

End of an era for southern cooperatives – Allan Barber:

Alliance Group chairman Owen Poole retired at the end of September after five years on the board and 15 in top management roles, while Eoin Garden, Silver Fern Farms’ chairman since 2007 is retiring at the AGM in December.

Both men in different ways have provided notably determined leadership of their respective companies through particularly difficult times for the meat industry. Although each will retire with some regrets at not being able to lead the way to a permanent recovery, it will be a relief to step back from the limelight and leave the battle to their successors.

Poole has been succeeded by North Canterbury farmer Murray Taggart who ironically was voted off the Alliance board at the same AGM as previous chairman John Turner, resulting in Poole being appointed the company’s first independent chairman. That was a consequence of farmer disaffection with low lamb prices, so in spite of some recovery before the last price drop nothing much has really changed. . .

Rise of corporate dairying in China:

A new report says China’s dairy industry is undergoing a massive restructuring, with traditional small farmers departing to make way for large-scale commerical dairying operations.

Rabobank’s report China’s Raw Milk Supply – Still Dreaming of a White River says the rapid changes taking place in China will have an impact on its demand for imports.

Co-author Hayley Moynihan says the restructuring is limiting China’s domestic milk flow. She says as the supply chain restructures, is it put under pressure in terms of its ability to increase the volume of quality raw milk supplies.

Ms Moynihan says the Chinese Government has taken significant action to improve milk quality since the melamine crisis in 2008. . .

Evolving a truly customer-centric industry:

New Zealand’s primary sector needs to develop a customer-centric approach to its marketing – by creating products with unique attributes that are sought after by global consumers.

That was a key theme of the just-released Volume 3 of the KPMG Agribusiness Agenda, titled “Evolving a truly customer-centric industry”.

KPMG’s Global Head of Agribusiness, Ian Proudfoot, says the sector needs to replace its traditional ‘trading mentality’ with a more targeted approach.

“Those customers who see the most value in what we produce – and are consequently willing to pay a higher price for the attributes they value – must be at the centre of everything we do.” . .

A primer of water quality – Clive Howard-Williams at Waiology:

Society is increasingly concerned over water quality. The means by which this is maintained and enhanced while growing an economy is a major challenge for governments in many places. Here I introduce some underlying concepts around water quality that Waiology followers will need to appreciate when they look at the forthcoming series of blogs.

What is good water quality?

Rather than just being a set of defined scientific numbers, water quality is rather a perception defined by communities and it varies from place to place and between communities. What is seen as poor water quality by some may be adequate for others. Generally however, good quality is usually recognized as water that is safely drinkable, swimmable and from where food may be gathered and that provides for community spiritual and cultural needs and for healthy ecosystems. . .

Happy World Food Day:

We all love to eat, but make sure that as you celebrate World Food Day today you spare a thought today for those who don’t have enough to eat.

‘Across the world 842 million people still suffer from chronic malnutrition, including a growing number in the developed world’, said HRLA chairperson Edward Miller, ‘and the latest New Zealand food security study reported that less than 6 in 10 NZ households are food secure.’ . .


Rural round-up

14/10/2013

Low wool supply puzzles exporters:

Wool industry representatives are trying to unravel the mystery of an unexpected drop in the amount of wool coming forward for auction.

Thursday’s South Island sale had fewer than 8000 bales on offer, which was about 40% below the amount which had been anticipated, while the amount of wool for next week’s North Island sale is 25% lower than what had been rostered.

That’s even more of a surprise, as recent North Island sales have been offering more than the amount forecast. . .

Garden stepping down at SFF – Alan Williams:

Silver Fern Farms will be looking for a new chairman, after Eoin Garden retires from the board at the annual meeting in December.

Garden, a Central Otago farmer, has been chairman of New Zealand’s biggest meat processor and exporter since early 2008.

He was elected to the board in 1998 and is the longest-serving of the current directors. . .

Cricketers to front Indian venutre – Annette Scott:

An exclusive supply contract with meat processor and exporter Alliance Group has set the wheels in motion for fledgling company QualityNZ to build a meat trade with India.

QualityNZ has spent the past three years “under the radar” devising strategy to set up a market for New Zealand sheep meat in India.

Building around NZ and India’s sporting relationships, cricketing stars Brendon McCullum, Stephen Fleming, and Daniel Vettori will play a big part in the marketing and profile of the new meat trade.

All three cricketers have a shareholding in QualityNZ alongside the two major shareholders, former NZ fast bowler Geoff Allott and NZ Cricket Board member and Geoff Thin. . .

Keep it clean:

RURAL CONTRACTORS are being reminded to make sure their machinery is cleaned between jobs to ensure that plant pests and weeds are not spread around on dirty gear.

Rural Contractors New Zealand (RCNZ) president Steve Levet says dirty machines carry soil, seeds, and organic matter, which could dislodge when it’s next used and spread contamination to new sites.

“Soil-borne pests and diseases can be transferred in wet soil attached to wheels, tracks or parts of the machine that work in the ground. While some pests and disease can also be transferred in dust that can accumulate on many parts of the machine – engine bay, cabins and air intakes,” Levet explains. . .

NZ merino a winner during America’s Cup – Tim Cronshaw:

New Zealand may have lost the America’s Cup, but some consolation can be taken from 5500 meals of merino-branded lamb being served up at a pop-up restaurant on the San Francisco waterfront to diners including film actor Tom Cruise.

The branded lamb meat, Silere alpine origin merino, was a winner among supporters of the race won last month by the United States Oracle team led by Kiwi Sir Russell Coutts and bankrolled by billionaire Larry Ellison.

More than 1.4 tonnes of merino lamb was dished up during the 12 weeks of the America’s Cup at the Waiheke Island Yacht Club pop-up restaurant at the Embarcadero in San Francisco which will remain open until the end of the year. . .

Dairy man jumps on asparagus bandwagon:

THIRTY FIVE years ago Geoff Lewis left his parent’s small dairy farm to seek his fortune in the sheep and cattle industry.

Today Lewis has added a dairy farm to his business, but asparagus growing has propelled him to prominence as a highly regarded grower using technology for maximum profit.

“When Liz and I got married, I went and managed a coastal sheep and beef farm and forestry block north of Foxton. My employer there was keen to diversify. In the late 1970’s the catchcry was ‘diversify’ and there were goats, deer, kiwifruit – all embryonic. 

“MAF had an advisory office supporting diversification by farmers so we investigated and decided perhaps asparagus was a good option for the free-draining sands of the west coast.” . . .


Rural round-up

30/04/2013

New Lincoln Hub plans unveiled:

Science and Innovation Minister Steven Joyce and Primary Industries Minister Nathan Guy have today unveiled concept plans for a world-class agricultural research and education facility to be sited at Lincoln, near Christchurch.

The Lincoln Hub concept plans and business proposal have been developed by a partnership of Lincoln University, DairyNZ and Crown Research Institutes (CRIs) AgResearch, Plant & Food Research, and Landcare Research.

“The Lincoln Hub has the potential to transform New Zealand’s farming productivity by providing a one-stop shop allowing information and ideas to be shared more easily,” Mr Joyce says. “Internationally, science and innovation parks that collect together public and private organisations in one place drive a lot of education, science and innovation. The Lincoln Hub can achieve this for New Zealand farming.” . .

AgResearch capitalises its strengths to boost science:

A mammoth $100 million investment in AgResearch’s core science resource will help boost its potential to support exports from the primary industries in reaching $60 billion by 2025, on current policy settings.

“It is no secret that some of AgResearch’s physical scientific infrastructure is getting a bit creaky,” says Dr William Rolleston, Federated Farmers Vice-President.

“It was a genuine pleasure to be at the unveiling of an impressive roadmap that will also see the “hubbing” of primary research capabilities at and with Lincoln University. . .

Meat Industry excellence Group campaign warms up – Allan Barber:

The MIE organised farmer meeting in Feilding on Friday was attended by about 700 farmers which one speaker from the floor compared unfavourably with 2000 at the Drought Shout. However there is obviously an increasing level of support for substantial change to the meat industry’s operating method which results in volatile market returns.

Alliance and Silver Fern Farms were both represented and the respective chairmen, Owen Poole and EoinGarden, spoke in support of the group’s aims. Poole told the meeting the industry was working constructively to develop an improved model which was simpler than MIE’s plan and it was important to ensure the two plans were complementary. . .

MPI’s loss is LIC’s gain but Primary still comes out on top:

The resignation of Wayne McNee, Ministry for Primary Industries Director-General, to take up the position of Chief Executive at Livestock Improvement Corporation (LIC), will still see this talented person working in and for New Zealand’s primary industries.

“This role shows the versatility of Wayne who has performed to a very high standard with the public service and now departs for a high profile leadership role in a company important to New Zealand agriculture,” says Bruce Wills, President of Federated Farmers.

“Wayne has put the Ministry on the right path for farmers following the merger of the old MAF with the Ministry of Fisheries. I feel disappointed in one regard because he leaves it, just when we are starting to see the fruits of his work appear in this new and dynamic Ministry. . .

Budget 2012; support for frontline conservation work:

An additional $20 million over four years has been allocated to the Department of Conservation in Budget 2013 to provide for additional frontline roles and the upgrade of recreational facilities, Conservation Minister Nick Smith announced today.

“The four year funding package complements the Government’s recently announced tourism investment. It recognises that DOC is the Government’s primary agency responsible for providing infrastructure, visitor services and nature-based experiences that support the tourism industry,” Dr Smith says. . .

Innovative Dairy Companies Form Partnership to Boost Exports:

Two of New Zealand’s most innovative dairy companies are forming a partnership to boost exports to one of the world’s fastest growing consumer markets.

Synlait Milk will next month despatch the first consignment of a2® Platinum™ infant formula destined for mothers and infants in China. a2 milk™ contains only the A2 version of the beta casein protein which is more comparable to protein that mothers naturally produce than other versions of the beta casein protein found in standard milk.

Synlait Milk will be processing a2 milk™ from 10 suppliers from August this year and will further expand production to meet the requirements of A2 Corporation when a2® Platinum™ infant formula becomes available to mothers in New Zealand and Australia later this year. . .

Brancott Estate Celebrates the End of a “Sensational” Vintage:

Vineyard beats the weather to harvest pristine, flavoursome fruit

Early predictions of an outstanding vintage have proven true for Brancott Estate, the pioneers of the original Marlborough Sauvignon Blanc, who have successfully completed harvest ahead of autumn rain, and with fruit that bears all the characteristics of the region.

“The season has been so dry until now and this has delivered a sensational vintage for Marlborough” says Patrick Materman, Chief Winemaker for Brancott Estate. “While we’ve enjoyed the sunshine, it hasn’t been a particularly warm season, tracking around the long-term average in terms of Growing Degree Days. This, combined with the lack of rain, is a real positive for vineyards. The dry conditions mean pristine fruit development and allow us to make harvest decisions based on optimal flavour development, while the relatively cool temperatures ensure the aromatic expression and balance of natural acidity that has made Marlborough famous.” . .


Sheep industry in farmers’ hands

19/03/2013

Alliance Group chair Owen Poole suggested a mega-merger of 80% of meat companies several years ago.

That idea was scuttled by Silver Fern Farms.

The 80% model has resurfaced as one of six principles put forward by the Meat Industry Excellence Group which attracted hundreds of farmers to a meeting in Gore yesterday .

• Up to 80% of red meat processed and marketed by one ”coalition of the willing” structure.
• Identify and extract best personnel and strategies. Contracting of stock to specification; need to commit to a company.
• Legislation required to support new structure be sought.
• All participants to fund restructuring.
• Suppliers to be treated fairly, equally and with full transparency.

This time both major companies appear to be supportive.

However, they are also aware of the costs and challenges:

. . . Alliance Group chairman Owen Poole said there was not a meat processor or exporter in the country that did not think a better model should be employed.

Alliance Group and Silver Fern Farms had been talking for some time about that prospect and were still in discussions. One of the group’s principles was for up to 80% of the red meat processed and marketed by one ”coalition of the willing” structure.

Silver Fern Farms chairman Eoin Garden said that was a ”huge challenge”.

”Look how the dairy industry is fragmented because all of a sudden when you get a major player … Federated Farmers or farming leaders get up and say we need another player in the industry to keep the big fellow honest,” Mr Garden said. . .

Merging the two big co-operatives could be a first step but it would be a very expensive one:

Mr Poole warned a merger of the co-operatives would mean they would bear the burden of the amalgamation costs. There were significant costs in that, which should be shared across the industry, whether you were a co-operative supplier or non co-operative supplier. He estimated it at between $250 million and $300 million and asked co-operative suppliers if they wanted to ”pick that up on your own”.

He urged those present to be careful with the process and to ”get it right”.

The biggest challenge is to get all farmers on one page.

Farmers always want a better price than their neighbours and what they say they want for the industry and what they do in their own operations are often very different.

There is too much capacity but how much is enough?

What would be happening now if farmers having to cull their flocks because of drought couldn’t get killing space and what would that do to the already low prices they’re receiving?

Who’s willing to pay the very high costs of plant closures?

The answers are in farmers’ hands – all could now choose to sign up each season to supply one or other of the co-operatives and if most did the smaller companies would be squeezed out of the market.


SFF needs a plan B

19/09/2009

Silver Fern Farms is putting a positive spin on the decision to extend the deadline for farmers to take up its share exchange and cash issue offer.

The chairman of the meat co-operative, Eion Garden, said 37% of shares had been exchanged so far and “a significant number” of shareholders had taken up or exceeded their full cash issue entitlement.

The company had hoped to raise at least $80 million, but with a flood of applications arriving before yesterday’s deadline, more expected over the weekend and the clash with lambing, the deadline had been extended until October 9, Mr Garden said.

I don’t think lambing has anything to do with it. The company obviously didn’t get the support they hoped for. The Press  says the maximum that can be raised is $128m but so far only 12 million new shares at $1 each have been bought by farmer-suppliers.

 The extended deadline might pick up a bit more shahreholder support but it won’t deliver the amount the co-operative needs and the directors will have to look for a plan B.

It hasn’t been a good year for the company.

Alliance Group shareholders turned down the Meat Industry Action Group’s plan for a merger with SFF. PGG Wrightson couldn’t come up with the cash for the 50% buy in it had proposed; and the $10 million PGW shares SFF took as part of their compensation for that are worth little more than half that amount now.

The season ahead won’t be easy either.

Demand for lamb in export markets is firm which is holding prices up. But the strength of the demand is on the back of falling supply caused by drought in Australia and New Zealand and the large number of dairy conversions here.

Fewer sheep to kill exacerbates the over supply of killing space. SFF did some rationalisation last year but the industry as a whole still has excess capacity.

It has been a good season for lambing. The weather has been pretty mild and survival rates have been high. Spring grass growth has been good too but most of the east coast is very dry which will put pressure on feed and bring stock on to the market.

But farmers are spoiled for choice when it comes to meat companies and if they aren’t prepared to invest more in SFF it’s an indication they may well look elsewhere for killing space.


SFF PGW deal still alive?

03/11/2008

Silver Fern Farms  says its deal with PGG Wrightson is still “alive” even though PGW has defaulted on its agreement to take a 50% stake in SFF.

“We’re still awaiting a response from Wrightson — any propositions they can put forward to settle the transaction,” Silver Fern chairman Eion Garden said today.

“The transaction is still alive, albeit they are in default of the originally-agreed payment date.”

If, and when, the agreement was terminated, the cooperative would have to look at the options open to it, possibly another deal “to salvage some of the ashes”, which would have to be approved by shareholders.

“Of course, there’s the other option of pursuing a settlement with them,” Mr Garden said.


SFF $51m profit

01/11/2008

Silver Fern Farms has made a $120m turn around from last year’s loss to post a $51 million profit.

Chairman Eion Garden attributed the improved result to higher livestock throughput with associated efficiencies and improving markets but warned profits would return to “realistic levels” this year.

Mr Garden said Silver Fern Farms (SFF) reduced debt in the year under review by $91 million, from $329.5 million to $238.6 million and attributed that to a tight rein on inventory, improved margins, disposal of non-core assets and the issue of supplier investment shares.

But what happens now that PGG Wrightson can’t secure finance to take the agreed 50% stake in the company?

Mr Garden said SFF and PGG Wrightson were in discussion to look at alternatives to their $220 million partnership, which stalled after the world financial meltdown prevented the rural servicing company meeting its first instalment.

The transaction was unconditional and enforceable, and Mr Garden said the discussions would also deal with PGG Wrightson’s default on the transaction.

The coming season could be a difficult one for meat companies because comeptition for stock will be intense.

Sheep numbers are down so in spite of mutterings about no-one wanting Sunday night auctions it’s a sellers’ market this season. Farmers have a stronger hand than they’ve had for several years and they’ve got a lot of making up to do.


PGW & SFF fight to keep merger alive

06/10/2008

Neal Wallace writes:

Obituaries may already have been written about what might have been with the Silver Fern Farms-PGG Wrightson partnership, but the parties are fighting to the end to keep it alive.

Silver Fern Farms (SFF) chairman Eoin Garden remained upbeat and optimistic on Friday that the $220 million deal could be salvaged, after it was faulted on Tuesday when PGG Wrightson failed to secure funding.

PGG Wrightson (PGG-W) chairman Craig Norgate said on Friday progress was being made.

But it’s hardly a vote of confidence in the plan when Pyne Gould Corp which has a 21.6% share in PGW didn’t take up its option and at the same time announced they’d be selling down their PGW stake to apply for a banking licence. The timing of this announcement is cause to wonder if they wanted the merger with SFF to go ahead.

Regardless whether PGG-W came up with the capital, Mr Garden said in an interview it was business as usual.

When they were trying to sell the merger plan to shareholders, SFF said there was no Plan B. But there is – the company has finance in place to carry on as normal.

SFF has had a good year but no doubt banks will be keeping a very close eye on all the meat companies in these uncertain financial times.

That will make business difficult because in spite of what they say about Sunday night auctions, competition for stock will be intense this season. The national sheep kill will be down by about 9 million which makes it a sellers’ market and companies will have to fight to retain their market share.


Vote expected to be close

08/09/2008

If the vote over whether PGG Wrigthson takes a 50% stake in SIlver Fern Farms required only 51% support I think it would succeed.

But it requires 75% and the result is predicted to be close.

Informed observers are picking support by Silver Fern Farm (SFF) shareholders on whether to form a partnership with rural servicing company PGG Wrightson will lie between 70% and 80%.

This means the vote on the key resolution – the second of two to be considered – could go either way.

It amends the co-operative’s constitution and needs 75% support for the partnership to proceed.

“It will be close because there is such a high threshold,” SFF chairman Eoin Garden said.

. . . Other farming leaders agree the vote will be close.

Meat and Wool New Zealand chairman Mike Petersen said the final count on the key resolution would be 70%-80%.

“It will be a line call whether it gets through,” Mr Petersen said.

Federated Farmers Otago meat and fibre chairman Rob Lawson said there appeared to be plenty of support for the proposal, but it was too close to say whether it was sufficient.

He said the decision meant today was a key day for the industry.

Southland Federated Farmers president David Rose also said it would be close.

“I can’t pick it at the moment.”

Friday’s special general meeting of Alliance Group shareholders made it quite clear that they have no wish to merge with SFF so if the vote goes agaisnt the merger today SFF’s plan B won’t involve the other big co-operative.

And given that there will be around 9 million fewer sheep to kill this year, whether PGW is involved or not the meat industry has not yet finished what SFF calls its “right sizing”.


Date won’t matter if Alliance won’t dance

19/08/2008

The Meat Industry Action Group isn’t happy that Silver Fern Farms won’t be calling a special general meeting until October 7.

MIAG chair John Gregan said that date was too late.

“They (Silver Fern Farms) kept fobbing us off and it’s only now that we have a court order that they decide to set a date.” Mr Gregan said it was critical the meeting was held on or before September 8 when shareholders voted on the proposed partnership with PGG Wrightson because farmer ownership could be diluted to 50 percent.

However, Silver Fern Farms chairman Eion Garden said it was not possible to hold the meeting before or on that date.

“Our primary concern is the confusion that would arise around a vote on two quite separate issues.” Mr Garden also dismissed Mr Gregan’s concerns about farmer shareholding being diluted.

“He (Mr Gregan) doesn’t understand the constitution criteria in place,” he said.

“Any shareholder resolution has got to be passed by 50 percent of farmer shareholders.” Mr Garden said the Silver Fern Farms board would be in a better position to comment on the issues to be considered in light of the outcome of the PGG Wrightson partnership proposal.

He’s right. The outcome of the shareholders’ vote on whether to accept the PGW offer could effect how they view MIAG’s proposal so it should be determined before the SGM is held.

The Meat Industry Action Group’s 11 resolutions, which will be presented at the meeting, were focused on industry consolidation and forming a market-led national champion with 80 percent of the sheep meat industry.

The Alliance Group has agreed to hold its special general meeting on September 5.

However, chairman Owen Poole said at a meeting in Gore last week that he was prepared for a “Gunfight at the OK Corral”.

He described the resolutions as “unrealistic and highly prescriptive” and said they compromised the ability of board directors to act in the best interests of the company.

 If Alliance shareholders vote agains this at their SGM it makes the outcome of the SFF meeting irrelevant anyway.

It will take more than two to do MIAG’s tango. Alliance directors have made it quite clear they’re not wanting to dance with the other co-operative and if shareholders agree with them the dance will be called off.


MIAG taking SFF to court

15/08/2008

The Meat Industry Action Group  is taking Silver Fern Farms to the High Court to force it to name a date for a special general meeting.

MIAG collected enough proxy votes from shareholders to force both SFF and Alliance Group to hold sgms as a first step in MIAG’s plan to promote a merger between the two co-operatives.

Alliance has agreed to hold its meeting on September 5, but MIAG said SFF has delayed committing to a date, forcing it to seek a court ruling.

But it appears the meat companies are less than enthusiastic about calling the special meetings at which MIAG has 11 remits to put to shareholders.

MIAG says the remits would advance industry consolidation and help create a new farmer-owned entity, it calls the National Champion, to handle 80% of the country’s red meat industry.

Alliance chairman Owen Poole this week slated MIAG, saying the resolutions were prescriptive, divisive and counter to the legal requirements of directors acting in the best interests of the company.

SFF chairman Eoin Garden accused MIAG of being disruptive and misleading.

“It is more likely that history would record MIAG, by its actions in destabilising the governance of both companies, has in itself been the cause of slowing the progress of industry consolidation.”

MIAG has got the co-operatives agreeing about something – their opposition to the ginger group.

Mr Garden said the company had agreed to hold the meeting following its own special meeting on September 8. A promise to hold the meeting was communicated to MIAG on August 10 and he said the court action was a waste of time, resources and money.

It was important to get an outcome on the SFF-PGG Wrightson vote so the new board could hear issues raised at the special meeting initiated by MIAG.

“We have a firm option on the table to be voted on, whereas MIAG requirements are about a process, as opposed to a concrete transaction.”

MIAG is seeking proxies for the special general meetings. Farmers should be very careful about giving them until they understand exactly what their votes would be supporting.

The groups demands for industry consolidation are not a recipe for improved returns and as Poole points out they would breach directors’ legal responsibility to act in the best interests of their company.


Too late for merger talks

14/08/2008

Events have overtaken any ideas Silver Fern Farms and the Meat Industry Action Group have about a merger between SFF and Alliance Group.

The prediction that the sheep kill will be down by 9 million this season changes everything.

Even without that, although there were good reasons why SFF might to merge with Alliance, the case for Alliance joining SFF was much weaker; and something MIAG seems not to understand is that directors are legally required to act in the best interets of the company.

But now sheep numbers have dropped so steeply the meat industry is entering a new era.

There will have to be more works closures and job losses not only in the freezing industry but in allied areas such as shearing. That will be difficult for the many people involved but there is a silver lining to this cloud for sheep farmers because decreased supply is coming while demand is rising and that will mean better prices.

SFF lost any opportunity it might have had for joining others in the industry when it pulled out of discussions over Alliance’s plan for a mega merger. It now has its hopes set on shareholders accepting PGG Wrightson’s proposal to take a 50% stake in the company and says it there is no plan B.

But if that plan isn’t accepted SFF will have to come up with another, and the letter Alliance directors has sent to shareholders makes it clear it has its own plan which don’t involve either SFF or PGW.

In a strongly worded letter, Alliance chair Owen Poole pours cold water on both SFF’s desire to reopen merger discussions and its proposal to allow PGG Wrightson to take a 50% stake in the company.

He wrote, in response to one SFF chair Eion Garden wrote to Alliance shareholders, and lists the arguments against the PGW proposal and SFF advances.

 Poole’s letter follows the break: Read the rest of this entry »


PGW SFF deal demutualisation by stealth?

21/07/2008

The proposed joint venture between PGG Wrigthson and Silver Fern Farms is demutualisation in sheep’s clothing according to Alan Robb.

He is an adjunct professor in the co-operatives programme at St Mary’s Unviersity, Canada, and an independent financail analyst and commentator based in New Zealand.

Writing in The NZ Farmers Weekly (not yet on line) he says:

In return for its $220 million, PGW will receive shares giving 50% of the voting equity. It will also have the right to appoint half of the board of directors. The share issue is likely to prevent SFF continuing as a co-operative.

The Co-operative Companies Act 1996 requires that not less than 60% of the voting rights are held by transacting shareholders. As PGW will hold Capital Shares with 50% of the voting equity and the transacting shareholders will have Supplier Shares it seems clear that SFF will no longer qualify as a co-operative.

Farmers who are considering the proposal should be aware of this defect. Will SFF cease to be a co-operative?

…If the board cannot see a future for SFF as a co-operative it has a duty to resign and allow those who are committed to co-operative principles and values to work with other co-operatives in the meat industry.

I spoke to SFF chair Eion Garden a couple of weeks ago about whether the company would be able to retain its co-operative status if the deal with PGW went ahead. He said that PGW will be transacting shareholders. Chief executive Keith Cooper told the ODT  the same thing:

PGG-Wrightson would be a transacting shareholder, supplying goods and services to the meat processor and marketer.

“The most important thing is to preserve all the characteristics of a co-operative, with a rebate structure, ownership and governance structure.”

But what does this mean? That PGW is a transacting shareholder by dint of its contract to procure stock of SFF’s behalf?  Wouldn’t that make PGW a third-party trader? I don’t have a problem with third parties, but PPCS, as SFF was known until its recent rebranding, has been adamant that it didn’t use third parties.

If this is the case it raises another question: why would PGW be allowed to own 50% of the company’s shares when all other transacting shareholders have their shareholdings capped at a much lower level?


Informed Vote Essential for PGW SFF Deal

11/07/2008

Gerry Eckhoff  has some concerns about the proposal for PGG Wrightsons to take a 50% stake in Silver Fern Farms.

The wider industry is bedevilled by self-interest, protectionist or silo mentalities which have cost the sheep industry dearly.

A statement by Owen Poole, chairman of Alliance Group, that Alliance has the best brands in Europe, is a case in point. Silver Fern Farms (formerly PPCS) also tell farmers that its brands are the best. Both are wrong.

The best brand is “New Zealand Lamb”, yet the two large co-operatives continue to believe in their own rhetoric and that, divided, we farmers stand a better chance of survival in the international market place.

I don’t think Alliance is a good brand name for meat. Silver Fern Farms is an improvement on PPCS but Eckhoff is right, New Zealand Lamb is the recognised brand.

The offer by PGG Wrightson to buy 50% of Silver Fern Farms (SFF) is, in reality, the only lifeboat afloat as the sheep industry sinks, so it is little wonder many farmers want to grasp the lifeline offered.

The $220 million offer may well be a very fair one but the question as to why the SSF board, after deciding to seek outside capital, did not call for wider expressions of interest for a 50% stake in the company remains unanswered by the board.

Farmers have had their shares in the company capped because it’s argued too big a shareholding is contrary to the co-operative ethos. But that doesn’t seem to be a consideration with PGW taking a 50% share. A lot of farmers would not be in a position to increase their investment, but there may be some who would not only be able but willing to do so.

Silver Fern Farms has a turnover of $2 billion so the offer by PGG Wrightson of $220 million effectively allows the purchase of a controlling interest in New Zealand’s biggest meat company, for 12c in the turnover dollar.

That seems like a fire-sale price to many sheep farmers, but it also speaks volumes as to the ability of Craig Norgate and Tim Myles of PGG Wrightson.

Farmers will await with interest an analysis/advice from the one non-farmer or independent director of SFF.

The SFF chairman, Eion Garden, says the proposal should not be seen as a financial bailout. That view will be greeted with some incredulity by observers.

If Mr Garden is correct, then he needs to explain why he does not simply invite Mr Norgate and Mr Myles on to the board of SFF for their undoubted expertise, but without the cash.

The Board says the capital injection will be used for improved technology and marketing, but that doesn’t explain why it needs to come from PGW.

Much of the rationale for the merger presented to farmers is the need for year-round supply and the technical assistance PGG Wrightson can bring to ensure this happens.

All that needs to happen to ensure supply during the August-September-October period (the off-season for supply volumes) is for meat processors to ask farmers, in, say, February, to submit a tender price to supply whatever number of stock the processor needs during these months.

The processor then obviously accepts the lowest tender prices until the required numbers are reached. Whether a merger is necessary to achieve that easily obtained outcome is a moot question.

A change in strategy doesn’t necessarily require a change in structure.

It is concerning that the emphasis of the merger appears not to be so much about capturing a greater share of the overseas value chain but locking in the domestic supply chain.

At a time when the world is increasingly short of meat protein and with the prices set to rise substantially, the board of SFF offers to sell 50% of the business to a very willing buyer.

That clearly indicates that there is not too much wrong with the industry – just the people currently running it.

TI wouldn’t say that about all the people running the industry.

If sheep farmers choose to exercise their right to vote on this issue, as they must, they have a duty to future generations to inform themselves as well as possible on all the issues and not just rely on the opinion of vested interests.

That’s good advice for any vote, but you can’t require people to have a comprehension test before they put their tick on the voting paper.


Alliance Committed to Co-operative Model

09/07/2008

While Silver Fern Farms is open to PGG Wrigthson’s offer to take a 50% stake in the company, Alliance Group remains committed to the co-operative model.

Alliance Group chairman Owen Poole said given recent strong feedback from farmer owners, it wanted to keep control of the meat processor with about $1.1 billion in annual sales.

Poole said yesterday Alliance did not want to comment on any industry consolidation discussions it may be involved in.

Last week, listed PGG Wrightson (PGGW) announced it wanted to take 50 per cent ownership of Silver Fern Farms (SFF), formerly PPCS, for $220m, but the plan is dependent on a 75 per cent approval vote by SFF farmers.

Poole did point to media-based “rumours” that this week it would meet Affco, another processor, for informal talks, but he would not comment further.

Last week SFF chair Eion Garden said his company didn’t have a Plan B. Is this a hint from Poole that Alliance might be coming up with one?

Alliance’s board will meet in Invercargill tomorrow.

Poole said any board decisions by the Invercargill co-operative on a response to the PGGW-SFF plan would be kept behind closed doors.

However, the board would give a response at a series of farmer meetings next month.

Poole expected annual farmer returns to improve 30 per cent next season starting from October 1, compared with the existing season, taking some pressure off farmers.

That will take the price of a lamb to somewhere between $75 and $80. Still not at the $100 which is what farmers say they need,  but a definite improvement on last season’s prices of $50 to $60 a head.

He had proposed four months ago a merger of the biggest meat companies to control 80% of the nation’s lamb and beef produce, but talks with SFF fell apart.

Poole said yesterday that 80 per cent level remained the key for any aggregation.

Farmers that had phoned him were strongly against any move away from the co-operative standard.

Alliance shareholders and supplying farmers had been concerned about the new developments, particularly if it would take an industry player away from co-operative status.

This would make the 80 per cent consolidation level widely accepted as a minimum that much harder to reach, he said.

“(But) if there’s opportunity for aggregation under an open model, then we’ve got a very open model.”

He added his phone had been extraordinarily busy from concerned farmers with no enthusiasm at all for the idea of corporate involvement in Alliance ownership.

Fonterra shareholders aren’t keen on diluting farmer ownership of their company. The grapevine is suggesting SFF shareholders are yet to be convinced that losing farmer control will be the best option for the meat industry too. What they say now is not necessarily a reflection on how they will vote later in the year and someone could come up with a Plan B before then anyway.


Silver Fern Farms PGW Plan Not Silver Bullet

01/07/2008

The proposal for PGG Wrightson to take a 50% stake in Silver Fern Farms is not a silver bullet for the meat industry and initial reaction to the concept isn’t very positive.

… yesterday’s announcement went down like a “cup of cold sick” with shareholders, who fear farmer-ownership of New Zealand’s largest meat company will be diluted.

Mossburn farmer Stephen Cullen said he was “bloody shocked” that Silver Fern Farms wanted to effectively sell its soul to outside interests and alienate itself from the rest of the industry.

Farmers feel very strongly about retention of farmer-control in the processing industry.

Meat Industry Action Group chairman John Gregan said he was “staggered” that PGG-Wrightson wanted, what he believed, was a controlling share in Silver Fern Farms.

“There’s no doubt the current structure is failing us, but the loss of farmer shareholding will be a sore point for some,” he said.

Mr Gregan believed it would be a “big ask” to achieve the 75 percent voter threshold required to advance the partnership.

MIAG has gathered proxies from SFF & Alliance shareholders to call a special general meeting of both companies aimed at getting the two comapnies together. I don’t know whether the proxies will enable MIAG to vote on the SFF PGW deal as well.
Federated Farmers Southland meat & fibre chair Martin Hall agreed the 75% would be difficult and farmers would have to dedecide whether they wanted to be an owner of a meat company or just a participant.

“I’m a bit angry about it. They (Silver Fern Farms) didn’t dream it up last month. It takes a long time to put together something like this.”

MIAG is meeting SFF chair Eion Garden today. One of the questions they could ask is: why SFF let the Meat Industry Taskforce waste time and money starting the process of developing an industry strategy when they SFF must have already been planning the deal with PGW?

Garden believes shareholders will support the initiative becuase of the immediate benefits.

The new board of SFF would decide on the use of the $220 million, but a sizeable chunk would go on the upgrade of existing processing plants, including the use of robotic meat-cutting systems developed between SFF and Dunedin’s Scott Technology.

“This industry is starved of capital.

It’s one of the fundamental reasons we don’t have strong balance sheets and strong profits on a long-term basis,” Mr Garden said.

He is right that lack of capital is a problem, but it’s not the only one. The drastic drop in sheep numbers has resulted in an over-supply of killing space so whether or not the deal goes ahead there will be more works closures.

The other problem is marketing and SFF & PGW say more money would be spent on researching customers and stronger branding of New Zealand meat. But they also say the money won’t be used for reducing debt and high debt is one of SFF’s big problems.

I haven’t spoken to anyone who is wildly enthusiastic about the plan yet but perhaps I’m talking to the wrong people. The ODT found a more positive reaction from Otago Fed Farmers meat & fibre chair Rob Lawson because it involved Craig Norgate.

I am cautiously optimistic. I can see some really positive things, and one of those is the business acumen of Craig Norgate and the PGG Wrightson team.”

Other factors the Merton farmer saw as favourable were the injection of $220 million from PGG Wrightson; the move to an integrated supply chain linking consumers with farmers; the potential for industry rationalisation; and the market focus the investment would encourage.

All these are fair points and there is no doubting Norgate’s abilities, nor his powers of persuasion. If he fronts a road show to sell the concept he may be able to change the minds of at least some of those who aren’t enthusiastic about it.

The loss of total farmer control of SFF was a possible concern, but Mr Lawson said farmers had to ask themselves what farmer control of the meat industry had achieved so far.

That’s a fair question but as Fonterra found when they tried to persuade their shareholders to open up the company to outside investment that farmers aren’t keen to lose control.


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