Rural round-up

June 8, 2016

 –  Allan Barber:

Introduction

I gave a presentation recently to a Beef + Lamb Field Day about the meat industry. I briefly reviewed the history of the industry, the impact of certain key events and the influence of politics leading up to the 1985 election. I then gave an appraisal of the present covering the last 30 years, post subsidies, when the sector had to modernise fast; and lastly I took a punt on predicting what might happen in the foreseeable future and how farmers and meat companies might have to adapt to survive and flourish.

For the purpose of presenting these thoughts to interested readers I have divided the presentation into three parts which will be published separately. The first part is a review of the first 100 years and how this period determined the structure of the industry. . .

 – Allan Barber:

Present

Today’s industry has many of the same characteristics as the mid 1980s, but a number of things have changed, mostly for the better.

In my opinion all parts of the meat industry (farmers, processors and exporters) have done a very good job of producing, processing and selling a vast range of products into a big range of markets. Since deregulation and subsidy removal, the sector has had to cope with a significant change in market demand while modernising farming methods and processing plants, achieving functional industrial relations and employment policies, developing more sophisticated products, improving packaging and coping with ever more stringent health and safety, hygiene and biosecurity compliance requirements. . . 

Measuring up – Gerard Hall :

Information is king and it’s turning grass and forages into dollars on Barnhill, an undeveloped hill block in Southland. Gerard Hall reports.

 The costs and benefits of growing feed on a northern Southland farm have come under close scrutiny.  

The decision to invest in pasture cages, monthly cuts and charting the results was an easy one for Guy and Vicki Goodeve who manage Barnhill, a 1019ha undeveloped hill block near Lumsden in Southland.  

Twelve homemade, one-square-metre cages range across six sites specifically chosen to accurately represent the three soil types, aspects (sun and shade), and altitudes on the farm. Each site is nine-metres square and includes a caged control area. The cages were all welded and netted for $1200. Farmer Glen McPhail is contracted to do the pasture cuts using a lawnmower. . . 

Heartland Bank warns dairy farm values could fall 40 percent from peak – Edwin Mitson:

Heartland Bank, the Auckland-based lender, has told investors it is monitoring the dairy sector “with close attention” at a presentation and has warned farm values could fall 40 percent from peak to trough if the downturn continues or worsens beyond current expectations.

Exposure to dairy farmers makes up 8 percent of its total lending book and 17 percent of its net receivables, which is the total money owed to the bank by customers minus amounts the bank accepts will never be repaid and has written off. . . 

NZ and EU agricultural partnership in Vanuatu:

Foreign Minister Murray McCully has announced a new partnership between the European Union, New Zealand and the Government of Vanuatu, aimed supporting sustainable agricultural development.

“New Zealand and the EU have a strong track record of working together with Pacific Governments to deliver development gains,” Mr McCully says.

“The Partnership we have entered into today will see the EU and New Zealand providing support to Vanuatu’s agricultural sector, and it is a model for further cooperation between the EU and New Zealand in the region. . . 

Forestry contractors focused on new safety laws:

Leading forestry contractors are moving fast to ensure they understand and implement systems for meeting new health and safety laws brought in last month. Under the guidance of their industry association – the Forest Industry Contractors Association (FICA) – forest contractors are being encouraged to attend special workshops on the new legislation around health and safety in forestry workplaces. They have responded in greater numbers than ever before.

Ross Davis, President of FICA, says has they’ve seen a surge in contractor numbers attending new health and safety legislation workshops in Gisborne and Tokoroa. More are expected when the series of regional workshops goes to Balclutha on 16 June and up to Whangarei on 14 July. Contractors are turning out in droves for these events. . . 

5 Truths Every Farmer Needs to Speak – Uptown Farms:

A lot of what is happening in our world of farming is being driven by marketing that happens well after food leaves the farm. Labels are applied, misleading ads are run, misconceptions are often conveniently left to linger in our consumers’ minds.

The marketing done by the food industry is often not concerned with the facts and the common practice now seems to be to repeat these lies until they become truth by perception.

This puts farmers in a unique position. We can make the choice to stand up for fact and reason and sell our product based on its true qualities. . . 

The Search For Tastier Supermarket Tomatoes: A Tale In 3 Acts  – Daniel Charles:

One of my fondest childhood memories is of eating tomatoes. We picked them in the garden and ate them in sandwiches, sitting on a picnic table under the trees outside our house. That juicy, acidic taste is forever lodged in the pleasure centers of my brain.

For anyone with similar memories, supermarket tomatoes are bound to disappoint. Indeed, the classic supermarket tomato — hard, tasteless, sometimes mealy — has inspired countless bitter complaints.

Take a closer look at the tomato display in your local grocery store, though, and you’ll notice some big changes. . . 

Best snow in years – Mt Hutt to open with all lifts:

Canterbury’s Mt Hutt ski area is revelling in the white stuff – with a one-metre pre-season snow base being described as “the best in years”.

Two snowstorms in the past four days have delivered “wall-to-wall” snow across the mountain, leading ski area manager James McKenzie to declare that Mt Hutt is expected to open with all lifts operating on opening day (Friday June 10).

“A one-metre snow base is simply stunning and the best we’ve had pre-season since 2011,” he says.

“We’re so far ahead of where we usually are at this stage of the season, we’re planning to open with all lifts operating including the Triple Chair. . . 

Onus on Spreadmark companies to ensure vehicle certificates are valid:

The Fertiliser Quality Council (FQC) is urging all spreading companies registered with Spreadmark – the industry guarantee programme – to check their vehicle certification status. The call from the Council follows an alert from auditors that companies registered with the Spreadmark scheme may, unknowingly, have trucks or aircraft with expired certificates.

Anders Crofoot, FQC Chairman, says the voluntary nature of the Spreadmark scheme means that companies may not necessarily receive an automatic test reminder and may not discover their vehicle certification is out of date until on or after it expires. . . 


Rural round-up

August 15, 2014

Commission releases draft report on 2013/14 review of Fonterra’s base milk price calculation:

The Commerce Commission today released its draft report on Fonterra’s base milk price calculation for the 2013/14 dairy season. The base milk price is the price Fonterra pays to farmers for raw milk.

The Commission is required to review Fonterra’s calculation of the base milk price each year as part of the Dairy Industry Restructuring Act’s milk price monitoring regime. The review assesses if Fonterra’s calculation approach provides incentives for it to operate efficiently and provides for contestability in the market for purchasing farmers’ milk.

The scope of the Commission’s review is only to look at the base milk price, not the retail price that consumers pay for processed milk. . . .

 

Fonterra’s farmgate milk price out of step with efficiency – Pattrick Smellie:

 (BusinessDesk) – The Commerce Commission says Fonterra Cooperative Group’s decision to cut the last season’s forecast payout to farmer shareholders by 55 cents per kilogram of milksolids below the result produced by its Farm Gate Milk Price calculation is not consistent with the milk price regime’s intention to make Fonterra operate efficiently.

However, it says the decision – the first ever taken to vary the payout from the calculated level since the Farm Gate Milk Price regime came into force in 2009 – was consistent with ensuring competitive provision of milk to alternative suppliers, the commission concluded in its annual review of the regime.

Under the Dairy Industry Restructuring Act, which allowed a merger to create Fonterra despite creating a dominant local market player, the commission must monitor how Fonterra sets the price it pays farmers for milk as part of efforts to ensure it’s possible for local dairy market competitors, such as Synlait or Westland Milk, to emerge.

Under the monitoring and reporting regime, the commission has no ability to force any change on Fonterra. . .

 

Latest dairy farm visits reveal poor record keeping:

The Ministry of Business, Innovation and Employment’s Labour Inspectorate has released the results of the third phase of its national dairy strategy, which involved visits to farms that employ migrant workers.

The findings show that while no exploitative conduct was found, a quarter of the farms visited were in breach of employment laws for poor record keeping.

Senior Labour Inspector Kris Metcalf says the visits were part of a long-term operation to check compliance with minimum employment obligations at dairy farms across the country.

“The majority of the 42 dairy farms visited in this phase were meeting minimum employment standards,” says Kris Metcalf.

“However, 11 farms were found to be in breach of their minimum employment obligations which is disappointing. . .

Government migrant dairy worker survey highlights procedure hole:

Following the third phase of the Ministry of Business Innovation and Employment’s (MBIE) dairy strategy, focussed on migrant workers, Federated Farmers knows a sizable minority of farmers still need to meet basic employment law and the Federation is offering to help.

“The latest information from MBIE shows that there has been a significant improvement in the performance of dairy farmers, but far too many are failing to take accurate time sheets seriously enough,” says Andrew Hoggard, Federated Farmers Employment Spokesperson.

“We are pleased MBIE inspectors did not find any exploitative behaviour of migrant workers on the 42 farms they visited. That said we’ve still got a bit of work to do with our guys on record keeping and basic employment practices. . . .

Softening the dairy blow:

• NZ dollar is under pressure
• Interest rate predictions delayed
• Meat sector outlook remains bullish

While eleven of the last twelve dairy auctions have recorded price falls, the sheer magnitude of the falls is bringing other factors in to play, according to the latest ASB Farmshed Economics Report.

“With dairy prices down by 37 percent on a year ago, the NZD has finally come under some pressure” says Nathan Penny, ASB Rural Economist.

“The NZD has passed its peak. We expect the NZD to trade at around 85 US cents for the rest of the year.”

“The dairy price falls are also a major reason why we’ve pushed back our interest rate call.” ASB Economics now expects the next OCR increase in March 2014 rather than their previous call for a December 2014 hike. . .

 

Working group for dairy processing sector:

Primary Industries Minister Nathan Guy has announced the establishment of a working group to develop a ‘roadmap’ on how to meet the future capability needs of the dairy processing sector.

“This was a recommendation of the independent Government Inquiry into the Whey Protein Concentrate (WPC) Contamination Incident last year. It found that our food safety regulatory model for dairy is among the best in the world, but also recommended improving people capability to strengthen the food safety system.

“The inquiry highlighted the shortage of experienced people with processing expertise across the industry’s regulatory sector, and at all levels of the system. . .

 Does Australia want to compete? – Jo Bills :

Recently the Business Council of Australia released a report it commissioned from McKinsey & Co – Compete to Prosper: Improving Australia’s global competitiveness.

It was fascinating reading – taking a helicopter view of the Australian economy and the global competitiveness of industry sectors.

Most of us probably regard Australia as a trading nation, but the McKinsey analysis highlights the fact that our economy remains quite inwardly focussed – while we are the world’s 12th largest economy, we rank 21st in terms of global trade – well behind some that you might assume we should be ahead of.

As part of the study, the McKinsey number-crunchers developed a Relative Competitiveness Score, applied it to all sectors of the Australian economy and found that only one sector – agriculture – stood out as truly competitive. . .

Boost for wilding tree control in Waimakariri:

A group of volunteers dedicated to clearing wilding trees around Flock Hill in upper Waimakariri is to receive a major funding boost, Associate Conservation Minister Nicky Wagner announced today.

Waimakariri Ecological and Landscape Restoration Alliance will receive $309,000 over the next three years from the Department of Conservation’s Community Conservation Partnership Fund.

“Wilding trees are now the most significant threat to biodiversity and infrastructure in the 60,000 hectares of public and privately owned lands in the upper Waimakariri Basin. . .

Forest contractors welcome WorkSafe submission:

Today the government’s safety agency for forestry, WorkSafe NZ, has publicly released its submission to the panel of the Independent Forest Safety Review. The Forest Industry Contractors Association (FICA), the industry group that originally initiated the review, has welcomed the comments from the regulator.

“We’re pleased that some vital issues have been highlighted by Gordon MacDonald’s WorkSafe NZ team,” says spokesman John Stulen of the Forest Industry Contractors Association, “They’ve made some very practical observations vital to making change in our industry.”

Stulen says WorkSafe NZ has been open and frank in their criticism of some shortcomings, yet has also been constructive at the same time. . .

Feed Partnership Set to Shake Up South Island Mag Regime:

South Island dairy farmers can now reap the rewards of a revolutionary new Magnesium product, which is transforming Magnesium use in dairying.

Animal feed ingredient supplier, BEC Feed Solutions, is partnering with South Island animal feed manufacturer and blender, James & Son (NZ) Pty Ltd, to give the region’s dairy farmers convenient access to its Bolifor® MGP+ product.

Bolifor® MGP+ is a unique alternative to messy pasture dusting and laborious daily drenching, and contains the essential minerals Magnesium and Phosphorus in the one product. It’s anticipated thatBolifor® MGP+ will be well received in the South Island, given that farmers, vets and animal nutritionists are observing an increase in Phosphorus deficiency due to the region’s dependency on fodder beet crops and changing land use. . .


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