Rural round-up

March 30, 2014

Deutsche Bank keeps ‘sell’ rating on Fonterra, seeks more transparency – Pattrick Smellie:

(BusinessDesk) – Fonterra Cooperative Group needs to make it far clearer to farmers and other investors how its business model operates, says Deutsche Bank after the dairy exporter shored up a slump in half-year profits by intervening in the regulated price it pays for milk at the farm gate.

Deutsche Bank retains its ‘sell’ rating on Fonterra Shareholders Fund units, with a 12-month target price of $5.64. The units slipped 0.2 percent by mid-afternoon to $6.08, and have fallen from a closing price of $6.15 on March 26, when the result for the six months to Jan. 31 was declared.

Fonterra posted a 53 percent fall in first-half net profit to $217 million, a result that would have been far worse if the cooperative had not taken the unprecedented action last December of deciding to reduce the regulated Farm Gate Milk Price (FGMP) to farmer-shareholders by 70 cents per kilogram of milk solids. . . .

New Zealand dairy farmers are responding to high prices by cranking the handle on their production to cash in on record payout – Jeff Smith:

Our dairy farmers are “cranking the handle” on production in response to high prices they are receiving for their milk.

As a result nationwide dairy production is expected to be up by 11% this current season.

Strong dairy prices have “handed the baton” to strong dairy volumes, ASB says in its economic update released today.

Volumes would be higher than normal this year as farmers had bought extra feed to increase milk production in anticipation of higher prices, ASB Bank rural economist Nathan Penny told interest.co.nz today. . . .

Farmer lands $30,000 in prizes – Elliot Parker:

Hard work has its merits.

Hinakura farmer Donald McCreary can attest to this after winning the award for the Beef and Lamb Wairarapa Farm Business of the Year and in the process scoring himself $30,000 in prizes.

McCleary has been farming in Hinakura, east of Martinborough, since 2004 on a 1375 ha property which is predominantly steep, hill country.

The property contains 6700 ewes and 225 breeding cattle.

McCreary says his approach to good farming is to be well versed in all areas of farm management. . .

Meat industry on the rise – Carmen Hall:

Higher lambing percentages and export carcass weights are helping offset a dramatic drop in sheep numbers.

Numbers have almost halved since 1991, but the amount of product being exported has remained stable as farmers focus on improving their systems.

Negative publicity has overshadowed the fact farmers have made significant gains in productivity and the industry has the potential to cash in on future growth, industry leaders are saying. Beef and Lamb New Zealand chief executive Scott Champion says the organisation focused on “best practice behind the farm gate”. . .

Finance support adds up for farmers :

Tauranga HR company Teaming Up hopes to connect accountancy firms with farmers in an economic development project that could generate millions of dollars.

The company spearheaded the Beyond Reasonable Drought inaugural road shows in the Bay of Plenty and East Coast last month, which attracted nearly 1000 people.

Marlborough sheep and beef farmer Doug Avery, who was on the brink of disaster 15 years ago after consecutive droughts, presented the seminars. He overcame adversity by adopting a scientific approach to agriculture and introducing deep-rooted, drought-tolerant lucerne. He employs six full-time staff, including son Frazer, and his business is a profitable operation that promotes high-reward, low-impact farming. . .

Honey lovers could get stung:

Honey prices could rise as much as 20 percent due to one of the worst seasons in decades.

Beekeepers say lower than usual temperatures in January meant the insects stayed inside their hives during the peak season and produced less honey. . .


Rural round-up

March 5, 2014

Good news keeps on coming for New Zealand dairy farmers with record prices and production figures – Jeff Smith:

Record production and milk prices bode well for confidence in dairying areas and will overcome some of the problems in areas affected by dry conditions.

Rural communities across the country will be celebrating record milk production as well as an increase in Fonterra’s forecast Farmgate Milk Price for the 2013/14 season by 35 cents to a record level of $8.65 per kilogram of milksolids.

“Milk production across the country is looking great for most areas, with Bay of Plenty in particular up nine percent on the drought reduced production in 2012-13. Production in Canterbury is also seven percent up on last year, but some of this extra milk is from more cows being milked,” says DairyNZ chief executive Tim Mackle. . .

Kansas farm boys put ag in national spotlight with parody videos – Karoline Rose :

“We are seriously just normal guys,” said Greg Peterson, the oldest of the three “Peterson brothers.” The Kansas farm boys have put agriculture in the national spotlight by producing and starring in farming parody videos of top music hits.

Peterson said the boys think it is “hilarious” that fellow agriculturalists are treating them like celebrities. “We are just down-to-earth Kansas farm kids,” he said.

It all started June of 2012, when “I’m Farming and I Grow it” hit YouTube.com. Greg, an agricultural communications major at Kansas State said, “Professors were always challenging us to find new ways to advocate for agriculture. I was browsing YouTube one day and noticed that the most popular YouTube videos were music videos. At that point I decided I wanted to make a farming music video with my brothers.” After hearing “I’m Sexy and I Know it,” Greg jokingly changed it to “I’m Farming and I Grow it.” The idea caught fire and after writing the song, he took it home to his brothers and they filmed their first humorous mock video. . . .

Ballance signals CEO’s retirement plans:

Ballance Agri-Nutrients Chairman David Peacocke has announced that Larry Bilodeau will be retiring as Chief Executive of the co-operative at the end of September. His retirement will end 17 years with the co-operative, 14 of them as Chief Executive.

Mr Peacocke said that under Mr Bilodeau’s leadership Ballance had evolved from a fertiliser business to a co-operative covering the full spectrum of farm nutrient requirements.

“Larry has always ensured our co-operative has stayed one step ahead of our shareholders’ and customers’ needs. He developed and led our strategy and ensured we earned our place as a trusted name in complete farm nutrient management. That trust is reflected in our consistent financial performance.” . . .

Comvita looks to new manuka types:

Honey and natural health products company Comvita expects plantings of manuka to make a significant contribution to increasing the supply of the sought-after honey.

The company, which produces and markets manuka honey for medicinal as well as culinary use, has been running trials of new varieties of the tree, with the aim of establishing plantations to supplement naturally growing stands.

Gathering manuka honey.

Gathering manuka honey.                                                                                                                     Photo: PHOTO NZ

Chief executive Brett Hewlett says crosses of indigenous varieties and special varieties are making progress.

“We’ve got some 25 different planting programmes and trials around the country where we’re studying the behaviour of these unique varieties. . .

Hamilton-based SummerGlow Apiaries – what you need to know about medical grade manuka honey:

TE KOWHAI’S SummerGlow Apiaries believe a recent UK television show has done a great job in showing consumers the difference between medical grade manuka honey and the honeys you eat.

Food Unwrapped presenter Jimmy Doherty recently investigated whether manuka honey has any medicinal properties.

He found that while all honey – even that which you buy in the supermarket – could have benefits, only medical grade manuka honey should be used to treat wounds, cuts, scratches, burns and skin ulcers as it has a naturally present activity not found in other honeys. . .

te Pā strikes again: Gold Medal at Royal Easter Wine Show:

Wairau Bar based vineyard, te Pā, has been awarded again for its 2013 Sauvignon Blanc with a Gold Medal win at the 2014 Royal Easter Show Wine Awards, racking up a double Gold record in just four months.

The Royal Easter Wine Show win follows up te Pā’s almost perfect score in the Air New Zealand Wine Awards in November, where the Sauvignon Blanc was awarded 19 points out of a possible 20.

Winemaker at te Pā Liam McElhinney says of the win: “The 2013 Sauvignon Blanc offers a rich, full and honest taste, which is due in part to the fact that we source our grapes from a single site. Because of te Pā’s unique position on the Wairau Bar, the soil and climate creates the ideal conditions for the highest quality wine. We create limited volume because we’re about quality and perfection – and this second Gold nod in just a few months shows that critics and consumers love what we are doing.” . . .


Rural round-up

February 14, 2014

Stars align for NZ foresters as ‘wall of wood’ comes on stream, prices reach record highs – Tina Morrison:

(BusinessDesk) – New Zealand forest growers, long overshadowed by booming returns from the dairy industry, look set to cash in on record prices for logs as they prepare to harvest trees planted in a flurry of activity two decades ago.

Forestry plantation activity in New Zealand jumped between 1992 and 1998, as a surge in Asian log prices lured investment syndicates to the sector. Radiata pine, which makes up about 90 percent of the nation’s plantations, are typically felled between 26 and 32 years, meaning the “wall of wood” will start being harvested from about 2018, according to government figures.

Rising prices for forestry products, the nation’s third-largest commodity export, have been overshadowed in the past year by a rapid rise in the fortune of dairy products, with overseas sales of milk powder, butter and cheese worth more than three times as much as sales of logs and wood. Still, forestry has been the quiet achiever, with the ASB New Zealand forestry index and the forestry sub-group of the ANZ Commodity Price Index touching record highs in January. . .

Forestry’s Good Returns Attract Investment Interest:

With forest products exports continuing to enjoy a run of high commodity prices there is plenty of attention worldwide on the robust returns delivered from forest resources. So it’s timely that New Zealand and Australia are soon to host a major forest investment and market outlook conference series. The event in it’s third year is popular with forest company CEOs and financial sector leaders for it’s insight.

One of the keynote speakers headlining the FIEA event is Kevin Mason, Managing Director and Senior Analyst of ERA Forest Products Research (www.ERA-Research.com), a Canadian-based independent research firm that covers the global forest products sector.

“We focus first and foremost on understanding the commodity side of the market,” says Mason, “as trends in the underlying commodities far outweigh managerial abilities, or the lack of.” . . .

Bog Roy story one of challenges down through generations – Ruth Grundy:

It is fair to say farming Bog Roy station has put each generation of Anderson family to the test.

It is also true to say their dogged determination to face down the challenges thrown at them is testament to their love and vision for the land.

Dave Anderson is the fourth Anderson generation to take on the high country run. . .

New Horticulture Industry Initiative Helps Combat Labour Shortage:

A new ‘hands on’ initiative, which brings the classroom into the orchard, is helping combat the labour shortage in the horticulture industry.

The Eastern Institute of Technology (EIT), Work and Income and local iwi have teamed up with John Bostock, owner of JM Bostock Ltd, to help get people off the unemployment benefit and into permanent employment.

The partners have worked together to establish an EIT level three sustainable fruit production course, which has both theory and practical modules. The theory mirrors the orchard cycle to enhance the student’s learning. In 2014 the programme will start earlier in the year to better coincide with orchard practice. . .

Mutton export values jump:

Mutton exports from New Zealand rose significantly in the first quarter of this season.

Beef and Lamb New Zealand has released statistics for lamb, mutton and beef exports for October, November and December 2013 – the first three months of the 2013-14 meat export season.

While there was little change in the volume and value of beef and veal exports compared with the corresponding period last season, mutton exports were up 16.3% in volume and 22% in total value.

The average return increased by 4.9% to $5200 FOB per tonne, Beef and Lamb said. . .

Proving deer viable satisfying outcome :

Canterbury farmer Sam Zino is well on the way to showing that deer farming is a viable alternative.

The region’s deer focus farm facilitator, Wayne Allan, said Mr Zino had achieved most of his goals and had increased production and profit at a time when the venison price was falling.

Mr Zino and his brother, Mark, were selected as the North Canterbury deer focus farm in 2011 for three years. At the time, Mr Zino said he wanted to demonstrate that deer farming was profitable.

”What Sam has shown is that if you’re smart about it and you take a planned approach then deer farming can be a highly economic land-use option,” Mr Allan said. . .

Land values could have started to enter over heated territory when assessed against historical returns – Jeff Smith:

The dairy land price paid per kg of milk solids has broken through the $40/kg mark and it is being predicted to keep on climbing with land value rising by up to 9% in the coming year.

At an average of $41.50/kg, this is a 12% lift on the post global financial crisis average of $37.

Commentators in the February ANZ Agri Focus say looking back through history, the $40/kg  has been an important psychological level.

It also suggested land values could have started to enter over heated territory when assessed against historical returns. . .

 


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