Rural round-up

December 13, 2018

Bill’s passage clears way for Dam construction:

The passing of the Tasman District Council (Waimea Water Augmentation Scheme) Bill has cleared the way for the construction to begin on the largest dam to be built in New Zealand for more than 20 years, Nelson MP Nick Smith says.

“The Bill passed by 112 – 8 votes and clears the way for a sustainable solution to the regions long standing water problems.

“The passage of this Bill concludes a 17-year tortuous process for developing and gaining approval for a sustainable solution for the regions water problems. This Bill resolves the last issue of access to the conservation and LINZ land. . . 

Govt adopts National’s Bill to stop livestock rustling:

Rangitikei MP Ian McKelvie is pleased that his Sentencing (Livestock Rustling) Amendment Members Bill has been adopted by the Government as a Supplementary Order Paper on the Crimes Amendment Bill.

“Stock rustling is a crime that cuts to the heart of many rural families and the farming community.

“Theft of livestock from farms or property is estimated to cost the farming community over $120 million a year. More recently, the risk to farms of Mycoplasma bovis spreading through stock theft has added strength to the call to take action. . . 

Something festive for Fonterra farmers? A hint of solace would be a start… – Point of Order:

Fonterra’s  suppliers will be choking on their  Xmas  rations, as they  digest the  price  blows  the co-op  has delivered.  First,  the dairy giant has  revised down  its  forecast milk payout  range  for the season to $6-$6.30 from the  earlier  $6.25-$6.50, and, second,  it is clawing back  some of the $4.15/kg  advance payment  rate.

Farmers  in  January will be paid  $4/kg for the  milk they supplied in  December plus the  co-op  is  clawing  back  15c/kg for all the  milk  supplied   between  June and November.

It  is  not   surprising that farmers   with  costs of  production  running   at  or above  $6/kg  are  reported to  be  “shocked”  and  “angry”.   Even those  efficient  operators   who have  lower  operating costs  won’t be happy  with   Fonterra  saying it  “appreciates”  the budgeting impact  the updated $4 advance rate will have on farmers in  January.  . . 

The facts about nitrogen in horticulture – Mike Chapman:

Stuff recently gave space to an opinion piece from Glen Herud, a dairy farmer, which had a number of inaccurate references to the use of nitrogen in horticulture and horticulture practices in general (Stuff, December 4, 2018).

 It is important to note, the primary industries are working together to address both the real and the perceived impacts of food production on the environment. At Horticulture New Zealand, we are sitting down and talking to key Government Ministers and their officials from the relevant government agencies to look at the best ways to clean up waterways and address climate change. This is how the best policies will continue to be made.

 In his opinion piece, Mr Herud’s numbers and references to research are unsubstantiated. I don’t want this to be a science class, but there is a lot of misinformation about nitrogen being spread around and it is essential to deal in facts, backed by science. . . 

Getting a buzz out of dairying – Samantha Tennent,:

Michael McCombs has had success by putting himself out therein the NZ Dairy Industry Awards, FMG Young Farmer of the Year contest and the Young Farmers Excellence Awards just by doing his thing and loving the journey along the way. Samantha Tennent reports.

A geography class trip sealed the deal for Michael McCombs  – he knew dairy farming was where he wanted to be. He grew up in Upper Hutt, attending Upper Hutt College and from a young age had always planned to become a farmer.

It was a 220-cow farm near Carterton he’d visited with school and thought to himself he’d love to work there.  The following summer holidays he did. It was a once-a-day herd and the owner, Dave Hodder, recommended Michael look at the Taratahi training farm.

“I wasn’t enjoying school and was looking at my options. I landed a spot on the training farm so left school at the end of year 11.” . . 

Milmeq sale expected to expand service offering:

Privately-held New Zealand engineering company Milmeq Limited, a designer and manufacturer of meat processing equipment, will be split and sold in the coming months, but it doesn’t mean the end of the brand. An agreement was signed at the end of last week for the sale of Milmeq’s chilling and freezing capability to New Zealand-listed company Mercer Group Limited, effective from 1 March 2019.

Chairman Ralph Marshall describes the sale as a good move for staff, customers and suppliers.

“Being purchased by a publicly-listed company, with a range of complementary products, positions Milmeq equipment well for future growth. We have been nimble over the years, always innovating to meet market needs, but we anticipate this innovation will further accelerate under the new owners.” . . 


Rural round-up

December 11, 2018

Plant a tree grow a community – Luke Chivers:

Matawai farmers Eugene and Pania King are dedicated to sustainability but it isn’t just about the environment. Luke Chivers reports.

Sheep and beef farmers Eugene and Pania King from Kiriroa Station at Matawai are combining their passion for the land with hard work and whanau support.

The couple have a longstanding connection with their family, their environment and their local community.

“We both grew up in rural New Zealand and a career in agriculture was inevitable,” Pania says.  . . 

 

Wee dog helps child farm safety – Alan Williams:

A serious little dachshund and a devil-may-care miniature fox terrier are the heroes in a new book aimed at making children safer on farms.

Ted the foxy races round doing silly things but Poppy is always close by teaching him to put his think-safe brain on.

“They’re both very small and they highlight just how small a child also is on a farm and through them being out and about I’m trying to help children understand about making good decisions,” author Harriet Bremner said. . . 

Farm safety story book launched in wake of tragedy:

A woman who lost her partner in a farm incident has launched a book to keep children safe on the farm.

Harriet Bremner’s partner James died in a farm machinery incident in Hakataramea Valley in January 2017. Now, her new book, Be Safe, Be Seen, sees her miniature dachshund Poppy take on the challenges of keeping safe on the farm as a little dog.

Primary School teacher Harriet hopes that kids will heed the safety messages in the book and that families reading the book to their children will be reminded to make safe choices at work every day. . . 

Fonterra’s strategic reset interacts with new Board dynamics – Keith Woodford:

Fonterra’s December update shows that the strategic reset is under way, albeit at an early stage.

Key indicators include that the Beingmate JV is being unwound and that Fonterra’s China Farms are under heightened scrutiny. The big shock is that Tip Top is on the market. The ownership of Soprole in Chile must also be under scrutiny, although little has been said publicly.

I will return to those issues within this article, but first it is necessary to understand something of the dynamics within the new Fonterra Board. . .

A2 rings in more executive changes under new CEO Hrdlicka – Paul McBeth:

(BusinessDesk) – A2 Milk Co chief executive Jayne Hrdlicka’s executive team is going through more changes as two senior managers depart – one for early retirement and one to pursue another opportunity.

Long-serving executive Simon Hennessy, who is currently general manager international development, will take early retirement. Relative newcomer Michael Bracka, who heads business development in emerging markets, will leave this month to pursue another opportunity, the company said. . . 

Major breakthrough for Mānuka farming initiative:

A ground-breaking milestone could see more Hawke’s Bay farmers producing high-grade mānuka honey worth millions to the New Zealand economy.

Scientifically-bred mānuka cultivars planted on a 130 hectare trial site at Tūtira, Hawke’s Bay between 2011 and 2013 have produced their first crop of mānuka honey with an average Unique Mānuka Factor (UMF®) value of 7. One sample reached medical grade by exceeding UMF® 10. . . 

Dairy and meat products lead manufacturing fall:

A fall in dairy and meat products pushed overall manufacturing sales down for the September 2018 quarter, Stats NZ said today.

After adjusting for seasonal effects, the volume of total manufacturing sales fell 1.6 percent in the September 2018 quarter. This fall was led by a 6.7 percent decrease in meat and dairy product manufacturing.

“Most meat and dairy products in New Zealand are exported and occasionally, the timing of exports, price changes, and exchange rates can affect manufacturing sales,” manufacturing statistics manager Sue Chapman said. . . 


Rural round-up

December 8, 2018

Research farm breaks new ground – Nigel Malthus:

Farmers are hearing that Beef + Lamb NZ is “putting your money where our mouth is” as it launches an innovative research partnership.

Chief executive Sam McIvor made the remark at the formal launch of the North Canterbury Future Farm, a 50:50 farming partnership between BLNZ and a company formed by local farmers.

Together they are leasing Lanercost Farm, a 1310ha sheep and beef property in the Leader Valley, north of Cheviot in North Canterbury. . . 

Fantastic velvet and venison prospects excite deer veteran – Annette Scott:

The deer industry is in a good spot and farmers should be happy with how their industry levies are being spent, Deer Farmers’ Association executive member David Morgan says.

Farming deer at Raincliff Station in South Canterbury, Morgan is as excited about the industry now as he was when he came to New Zealand as an 18-year-old on work experience.

Originally from Wales, Morgan has farmed deer all his life and it was that first NZ experience that got him started.

“I saw what could be done with deer and went back home to set up a deer farm and farm deer for venison supply. . . 

Bring on 2019:

Without doubt, 2018 will be remembered as Fonterra’s annus horribilis.

It is not overstating the case to say that the past year has seen a series of failures and fiascos for the dairy co-op.

For the first time, it reported a net loss for the financial year of $196 million. Meanwhile, weaker global dairy prices have forced the co-op to keep lowering its forecast payout from an opening estimate of $7/kgMS in May to $6.25 to $6.50/kgMS . . 

Farmer’s widow fulfils husband’s dying wish to win fight against DOC – Gerald Piddock:

Murray Ward always knew he was right but never lived to see it proven. 

Instead his widow Evelyn is left to savour a bitter victory after an 18 year battle against officialdom over a drainage system that left part of the couple’s Waikato farm under a toxic lake and Murray urging his family from his deathbed to continue the fight. 

Now Evelyn fears that despite a court victory she may not live to see everything put right. . . 

Government and industry partners release report on biological emissions:

A new report shows many farmers want to take action to reduce emissions, but need more information about what steps they can take.

It also shows if all farmers operated using today’s best practice, we may be able to reduce emissions by up to 10%. Continued funding for research into new, novel technologies will be important for reducing emissions further.

The Biological Emissions Reference Group Report is the culmination of two years of research into the opportunities, costs and barriers to reducing biological emissions in New Zealand’s primary industries. . . 

Raise a glass to dairy emissions intensity progress:

New analysis shows that dairy farmers around the world are making significant progress lowering the greenhouse gas emission intensity of milk production, Federated Farmers climate change spokesperson Andrew Hoggard says.

“It’s clear that while New Zealand dairy farmers must continue their ongoing efforts to boost productivity and reduce their environmental footprint, on the global emissions and food security front the best thing we can do is to help dairy farmers in developing nations get to where we already are,” says Andrew, who owns and runs a dairy farm in the Manawatu. . . 

Farmers Smeared by Smirnoff Over Non-GMO label? – Chris Bennett:

After a day in Kansas corn, Cole Nondorf lay in bed watching evening television’s requisite barrage of commercials when he was jolted him from near-slumber by a 16-second advertisement. He watched as celebrity faces Ted Danson and Jenna Fischer cheerfully pronounced Smirnoff’s base vodka, No. 21, as non-GMO. Adios to GMO grain and welcome to the inference of health—even inside a bottle of booze. Nondorf sat up, looked at his wife, Allison, and muted the television, “Are they joking? Enough. That is enough.”

When Smirnoff kicked off a promotional campaign in October 2018, touting its No. 21 vodka as free from GMO corn, a Kansas farming couple crossed a business Rubicon. The Nondorfs swept Smirnoff products from the shelves of their liquor store after the commercial aired. The result? A wave of support from farm country and beyond.

Real Life

Tucked in Sheridan County, in the northwest quarter of the Jayhawk State, the Nondorf operation is a mix of cattle, corn, grain sorghum, soybeans and wheat. The Nondorfs, both 36, also own A & C Liquid Assets, a wine and spirits business located in Hoxie, just off Highway 24, 20 miles north of I-70: Toss a dart at Hoxie on a wall map and the point will land center of Colorado Springs, Denver, Wichita and Kansas City. . . 

 


Rural round-up

December 7, 2018

Maize crops sick, seeds failing:

 A major seed supplier is urgently investigating reports from farmers that some of their maize crops aren’t growing properly.

Genetic Technologies Limited is the New Zealand producer and distributor of the Pioneer seeds brand and sells more than 20 hybrid maize varieties.

The crop is grown in New Zealand for the production of animal feed, either in the form of grain maize or as maize silage.

This season some farmers say up to 30 percent of their maize seeds from Pioneer have failed and other seeds that have struck are looking sick.

A tale of two milk companies – one of them is being suckled by taxpayers – Point of Order:

The contrasting fortunes of Synlait Milk and Westland Milk Products were thrown into sharp relief last week. On the one hand Synlait won applause at its annual meeting from shareholders, impressed by its performance in virtually doubling profit ($74.6m against $39.4m) in its tenth year of operations. On the other hand Westland had the begging bowl out for a Provincial Growth Fund loan of $9.9m which will help the co-op in funding a $22m manufacturing plant aimed at converting milk to higher-value products.

The Westland dairy exporter, discussing a capital restructure in its 2018 annual report, said it had relatively high debt and limited financial flexibility. . . 

Sheep needed on hill country – Alan Williams:

Waikato farmer Alastair Reeves has taken umbrage at the Productivity Commission’s suggestion sheep should be cast aside to make way for trees. He reckons sheep have a great future if they are not threatened by people making decisions in isolation and ignoring the ramifications of being wrong. He’s even got a plan for wool involving the Duchess of Sussex, aka Meghan Markle.

Sheep should be at the forefront of sustainable farming on hill country rather than being tossed aside for massive tree-planting programmes, Waikato hill farmer Alastair Reeves says.

It is a disgrace for the Productivity Commission to suggest up to 2.8 million hectares of new forestry be planted as a means of achieving a low carbon-emissions economy.  . . 

Water storage essential for future resilience – as experts cite drought as a major risk to NZ:

IrrigationNZ says a recent expert discussion document on drought and climate change highlights that future national planning to improve water storage and look at a range of options to mitigate the effects of the more severe droughts forecast is urgently needed.

“More frequent droughts and more variable rainfall will affect both urban and rural communities and will mean that we will need to rethink how we manage water in the future.
For example with less rainfall forecast over summer in western areas of New Zealand, there will be more demand for water storage from both councils and farmers to provide a reliable water supply,” says IrrigationNZ Chief Executive Andrew Curtis. . . 

Elitism of another kind – Clive Bibby:

I grew up on a farm just outside the small Central Hawkes Bay town of Waipawa.

My forebears had owned sizeable tracts of farming land that had been hacked out of the bush and scrub under the Ruahine Ranges.

I am very proud to be a descendant of such pioneering folk who understood what it means to build a business from nothing and see it grow into something that makes a reasonable contribution to the local economy. They also built the first trading general store in CHB. The building still stands.

It is perhaps ironic that much of the farm land in question was in the near vicinity of the catchment area for the now defunct Ruataniwha Fresh Water Dam proposal. . . 

New tool helps farmers gauge carbon footprint:

Meridian Energy and Westpac NZ are proud to support a new carbon calculator that gives farmers a guide to the size of their carbon footprint

The tool has been developed by Lincoln University’s Agribusiness and Economics Research Unit (AERU) and Agrilink NZ, with financial assistance from Meridian Energy and Westpac NZ.

It is available at http://www.lincoln.ac.nz/carboncalculator. . . 

Horticulture growth retains momentum:

Horticulture growth retained momentum with a seven percent growth in export earnings since 2016, according to an updated report, with tariffs on exported produce down by 12 percent since 2012.

The New Zealand Horticulture Export Authority (HEA) and Horticulture New Zealand commission the report New Zealand Horticulture – Barriers to Our Export Trade every two years, with funding support from the Ministry of Foreign Affairs and Trade, NZ Fruitgrowers Charitable Trust, and industry. . . 

International Boma NZ summit to help Aotearoa’s food:

A future-thinking agriculture summit will bring together global and local experts on future farming trends, exponential change, and new business models and product pathways. The summit, called Grow 2019, is designed to help Aotearoa’s food and fibre sector be more innovative, collaborative, sustainable and profitable now and into the future.

Organiser Kaila Colbin says the two-day summit is an opportunity to learn about the future trends that are impacting the agriculture sector, and what to do about them, in a practical way, from people on the ground. Grow 2019 will also connect groups of like-minded individuals and organisations so that together we can understand, adapt and grow in a future that looks nothing like today. . . 


Give shareholders first option on Tip Top

December 7, 2018

Fonterra is considering selling its Tip Top ice cream brand:

Chairman John Monaghan said it was looking at its ongoing ownership of Tip Top and had appointed FNZC as an external advisor to consider a range of options.

“We want to see Tip Top remain a New Zealand based business and this is being factored into our options,” Monaghan said.

“While performing well, Tip Top is our only ice cream business and has reached maturity as an investment for us. To take it to its next phase successfully will require a level of investment beyond what we are willing to make.” . . 

Fonterra shareholder Matthew Herbert has started a petition opposing the sale:

Problem
Fonterra is looking at selling off it’s Tip Top ice cream brand.
Kiwi’s eat more ice cream per person than any other country on earth.
Tip Top ice cream is one of the biggest links between fresh New Zealand milk from Fonterra farmers, and people who live in our cities.

Solution
Sign the petition and help farmers save Tip Top from the chopping block!

Lets tell Fonterra to hold onto Tip Top and keep our delicious ice cream going from farm to freezer.
#SaveTipTop

 

I’m not opposed to the idea of selling the company.

Fonterra needs to reduce debt. If it can’t make the investment needed to take the company further then it is better to sell it to others who can, and sell it at the best price it can get.

But why not give Fonterra shareholders first option to buy Tip Top?


Rural round-up

December 6, 2018

Dairy product prices climb as whole milk powder gains – Margaret Dietz:

(BusinessDesk) – Dairy product prices rose at the Global Dairy Trade auction, stemming a decline that began in May.

The GDT price index gained 2.2 percent from the previous auction two weeks ago. The average price was a US$2,819 a tonne, compared with US$2,727 a tonne two weeks ago. Some 36,450 tonnes of product was sold, down from 42,966 tonnes two weeks ago.

Whole milk powder climbed 2.5 percent to US$2,667 a tonne. . . 

Dairy bosses are best employers:

In the first-ever Primary Industries Good Employer Awards dairy farmers Ben and Nicky Allomes won the top accolade, the Minister of Agriculture’s Award for Best Primary Sector Employers.

Woodville dairy farmers Ben and Nicky Allomes have been named the Best Primary Sector Employers. 

The couple, who own Hopelands Dairies, also won the Innovative Employment Practices award. . . 

Fonterra reaches provisional deal with Beingmate:

Fonterra Cooperative Group has reached a provisional deal with Chinese partner Beingmate Baby & Child Food to unwind their Darnum joint venture in Australia.

The joint venture – 51 percent owned by Beingmate and 49 percent Fonterra – produced infant formula products at the Darnum plant in Australia for Beingmate’s Chinese customers, and was a key component of Fonterra’s plan to expand its reach into China’s second and third-tier cities. . . 

Voting for the 2nd Fonterra Directors’ Election is underway:

Voting is now open for the 2018 Fonterra Board of Directors’ Second Election.

Only two candidates from the first election, Leonie Guiney and Peter McBride, obtained more than 50% support from voting shareholders. The Rules of the first election state that if not enough candidates obtain more than 50% support, there must be a second election. . . 

Dairy loan done on a handshake, details to follow:

It beggars belief that the Government has dispensed a $9.9 million low-interest loan to a dairy company without having finalised the terms, National’s Economic and Regional Development spokesperson Paul Goldsmith says.

“The Minister in charge of the Provincial Growth Fund couldn’t tell the House what terms he had in mind when he undercut commercial lenders to provide debt funding for a new processing plant.

“I wouldn’t blame any business like Westland Milk for accepting a cheap loan from a secure lender. . . 

Apple producer’s underlying profit looks to be at top end:

Apple producer Scales has had a bumper year with a record export crop lifting profits to the top end of guidance.

The company’s underlying profit was likely to be at the top end, or slightly exceed, the current guidance range of $58 million to $65m, in the year ending December.

Managing director Andy Borland said it was an excellent performance for the group, with all business units performing well over the year. . . 

New Landcorp chair appointed:

Dr Warren Parker has been appointed as Director and Chair of Landcorp, the Minister of Finance Grant Robertson and Associate Minister of State-Owned Enterprises Shane Jones announced today.

Dr Parker is a former Chief Executive of Scion (the NZ Forest Research Institute) and Landcare Research, and was previously Chief Operating Officer of AgResearch. He currently holds a number of board roles including on Predator Free 2050 Ltd, Farmlands Cooperative Society, Genomics Aotearoa and is the Chair of the Forestry Ministerial Advisory Group. Until recently he was Chair of the New Zealand Conservation Authority. . . 

Landcorp out of touch with real farmers:

Landcorp’s submission to Sir Michael Cullen’s Tax Working Group (TWG) is a kick in the guts to rural communities, National’s Nathan Guy and David Carter say.

“Landcorp’s sneaky submission to the TWG proposing a water tax, nitrogen fertiliser tax and not opposing a capital gains tax proves how out of touch the state-owned company is with farmers on the ground,” Mr Guy says.

“With 6700 other submissions, why was Landcorp pressured to put in a submission that was more than a month late? The reality seems to be that the TWG are hell-bent on introducing environmental taxes and a capital gains tax, so they leaned on Landcorp to submit supporting more taxes and levies. . . 

New president and vice president elected to HortNZ board:

The Horticulture New Zealand board elected Barry O’Neil as its new President and Chairman at a meeting today. Mr O’Neil replaces Julian Raine, who has been President and Chairman for six years and who has made a significant contribution to horticulture for New Zealand. Mr Raine has stood down to pursue other business interests.

Bernadine Guilleux was elected Vice-President, with both positions effective from 1 January 2019. . . 

Busy orchardist advises small businesses start payday filing:

A Hawke’s Bay orchardist is advising fellow small businesses to be ahead of the game on payday filing.

This is the mandatory requirement from April next year for employers to file their payroll information to Inland Revenue every time they pay their staff.

Te Mata Figs owner Helen Walker has been paying her five staff fortnightly and sending across their details using the online entry method in myIR. . . 


Fonterra’s forecast payout down

December 6, 2018

Fonterra has revised its forecast payout for the 2018/19 season from $6.25-$6.50 per kgMS to $6.00-$6.30 per kgMS.

It’s also reported its first quarter performance:

  • Forecast Farmgate Milk Price range: $6.00 – $6.30 per kgMS
  • Forecast earnings per share range: 25-35 cents
  • Forecast New Zealand milk collections: 1,550 million kgMS, up 3%
  • Sales volumes: 3.6 billion LME, down 6%
  • Revenue: $3.8 billion, down 4%
  • Gross margin: $646 million, down $14 million
  • Gross margin percentage: 17%, up from 16.6%
  • Operating expenses: $656 million, up 3%
  • Capital expenditure: $188 million, up $46 million

Fonterra Chairman John Monaghan says the revision in the forecast Farmgate Milk Price range is due to the global milk supply remaining stronger relative to demand, which has driven a downward trend on the GlobalDairyTrade (GDT) index since May.

“Since our October milk price update, production from Europe has flattened off the back of dry weather and rising feed costs. US milk volumes are still forecast to be up one per cent for the year,” says Mr Monaghan.

“Here in New Zealand, we are maintaining our forecast collections at 1,550 million kgMS. NIWA is saying its likely we will see an abnormal El Nino weather pattern over summer and this could impact our farmers’ milk production.

“Demand from China and Asia remains strong. However, we are seeing geopolitical disruption impacting demand from countries that traditionally buy a lot of fat products from us.

“Today’s forecast range assumes dairy prices will firm across the balance of the season. This is consistent with the views of other market commentators.

“There are still a number of unknowns in the global demand and supply picture and we recommend farmers budget with ongoing caution. Fonterra’s Advance Rate has been set off a milk price of $6.15 per kgMS.” . .

The drop in the forecast price isn’t a surprise.

The small lift in the GlobalDairyTrade price index this week, follows months of price falls.

While the drop is neither unexpected nor welcome, most farmers and shareholders would be reasonably relaxed about a payout of $6 or more.

The supply of milk has been up across the country but successive days of heavy rain over the last few weeks will have had an impact. Few herds will have been able to maintain peak supply for long and milk production will be dropping faster than budgeted for.

 

 


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