Rural round-up

August 16, 2018

 A flow of “fresh air” – here’s hoping Fonterra’ s financial performance gets a good whiff – Point of Order:

Fonterra’s  latest move, appointing Miles Hurrell as interim CEO  “with immediate  effect”, has   sent  fresh rumbles  through the  dairy industry.

The  co-op’s  chairman John Monaghan, announcing the move,  spoke of the need  to  “breathe  some fresh  air  into the business”.

He is  not alone with this observation:  several  politicians  have been calling for just that – but  many of the  co-op’s 10,500 farmer-suppliers may be wondering  what exactly  a  blast of   “fresh air”  may do. . .

Animal tracking legislation to be debated under urgency – Gia Garrick:

Legislation to properly enforce the animal tracking guidelines, which were found to be hugely inadequate during the Mycoplasma bovis response, is to be debated under urgency tonight and through tomorrow.

It will mean farmers’ compliance with the National Animal Identification and Tracing scheme (NAIT) – the country’s cattle and deer tracking system – will be properly monitored.

Agriculture Minister Damien O’Connor said there would be penalties for those who did not comply.

“We will certainly have enforcement of these new guidelines, I can promise you that,” he said. . . 

Farmers encouraged to open homes to drought-hit Australians –  Esther Taunton:

Kiwi farmers are being urged to extend the hand of mateship to their drought-stricken Australian counterparts.

Federated Farmers national president Katie Milne said the organisation was working on ways to help farmers hit by severe drought across the Tasman.

Much of southeastern Australia is struggling with drought but conditions in New South Wales are the driest and most widespread since 1965.  . . 

Poorest performing iwi invested in large farms, ANZ report says – Tina Morrison:

(BusinessDesk) – The poorest performing iwi investment in recent years has come from farming, which is often favoured for cultural rather than economic considerations, according to the latest annual ‘Iwi Investment Insights’ report by ANZ Bank New Zealand.

In its 2018 annual ‘Te Tirohanga Whānui’ research report, ANZ evaluated the asset base of 34 iwi and hapū, finding the commercial assets of the combined group had increased by just over $1 billion, or 12 percent, to $5.4 billion since 2015. The report found the most common asset in the top quartile for underlying returns was the significant holdings in managed funds which have performed well in recent years. On the flip-side, most iwi/hapū in the lower quartile were actively managing large farms. . .

Raising triplets indoors works – Joanna Grigg:

It’s raining outside, again, but it’s not worrying these new lambs.

All 250 of Richard Dawkins’ triplet-bearing ewes get seven days or so indoors to adjust to supplementary feed, birth their lambs, bond and feed.

Then it’s out to the real world, albeit a nearby paddock with ad-lib clover and a watchful eye for that fading third lamb. . .

Sheep meats are in a sweet spot – Keith Woodford:

This year has been an exceptional year for many sheep farmers.  Lamb and mutton prices have been at record levels.

The key drivers have been increasing demand from China combined with lower exchange rates. Sales to Britain have slowed down, linked to a ‘buy British’ campaign over there. But that has not been enough to counter the overall good news story.

Sheep farmers are telling me that, for the first time in many years, sheep farming is fun again. The cash is coming through to upgrade tracks and other infrastructure. Venison prices have also been exceptional for those sheep farmers who also farm deer. Most sheep farmers also run beef cattle and they too have been paying well. . .

LIC’s Murray King named Co-operative Leader of the Year:

Farmer owned co-operative LIC is pleased to announce its board chairman Murray King has been named Co-operative Leader of the Year at the Co-operative Business NZ Awards 2018.

The annual award recognises those who have shown strong leadership and commitment to the co-operative sector.

A Nelson-based dairy farmer, Murray has a long-standing connection to LIC and the dairy farming community of the upper South Island. . .


Intermim CEO for Fonterra

August 15, 2018

Fonterra has announced the appointment of an interim CEO, Mike Hurrell, who will take over immediately:

Mr Hurrell is currently the Co-operative’s Chief Operating Officer, Farm Source – the unit responsible for working directly with the Co-operative’s farmer-owners. In that role, he is responsible for Fonterra’s global Co-operative farming strategy that includes farmer services and engagement, milk sourcing and the chain of 70 Farm Source™ rural retail stores throughout New Zealand. 

Mr Hurrell first joined Fonterra in the year 2000. His 18 years’ experience in the dairy industry has spanned four continents, including roles in Europe, the United States, Middle East, Africa and Russia. 

Fonterra Chairman John Monaghan says the Co-operative’s Board is clear that it is not best practice to have the Chairman and CEO stand down at the same time, but events have overtaken that decision. I have agreed with the Board that we will stop the global CEO search while we review the Co-operative’s current portfolio and direction.

“It’s important that we give ourselves the time to take stock of where we are as a Co-operative, breathe some fresh air into the business, then determine any changes that are needed.

The board has to know where it’s going before it works out who is best to lead it there.

“Appointing a new CEO is the most critical decision a Board will make. We will take all the time we need to find the right person.

“In the meantime, we need a new leader that can hit the ground running. Miles has great mana. He has a deep understanding of our business and has demonstrated his ability to manage large, complex business units in most of our global markets. Miles is well-respected both within our Co-operative and by our key global customers and wider stakeholders.

“Our CEO role requires intellect, energy and commitment. Miles brings that in spades.”

Mr Hurrell said he was excited by the challenge and as a proud New Zealander understood the responsibility that comes with the role.

“I’ve been part of the Co-operative for 18 years and understand that its true potential really comes down to its people.

“Theo leaves behind a talented leadership team that includes some of the best minds in global dairy. I’ve been privileged to be part of that group for the last four years and I’m totally confident that, by working as a team, we can deliver on the expectations New Zealand has of us.

“As a group, we haven’t always got everything right. Those lessons will be invaluable as we face up to challenges that are in front of us. . . 

The chair is right – appointing a CEO is the most critical decision for a board.

It is better to take time to get the appointment right, than to rush the process and get it wrong.


Fonterra drops milk price

August 10, 2018

Fonterra has announced a 5 cent drop in the forecast farmgate milk price for the 2017/18 season:

The Co-operative is reducing last season’s 2017/18 forecast Farmgate Milk Price to $6.70 per kgMS from $6.75 per kgMS. The previously announced 25-30 cents guidance range has been held but the Co-operative is indicating that it will be at or slightly below this range and it is likely that the full year dividend will be just the 10 cents already paid in April.

Chairman John Monaghan said the Board has made these decisions in the best long-term interests of its farmer shareholders and unitholders.

“It is important for our Co-operative to have a strong balance sheet and, as we indicated in May, the higher milk price, which is good for our farmers, has put pressure on Fonterra’s earnings, and therefore our balance sheet in a year which was already challenging due to the payment to Danone and the impairment of the Co-operative’s Beingmate investment.

“You never want to have to reduce the Milk Price at the season’s end, but it is the right thing to do and $6.70 remains a strong milk price.

“Maintaining a strong balance sheet has helped us to support farmers during tough seasons through our Co-operative Support Loan and being able to bring forward the Advance Rate Schedule and get money to farmers earlier in the season.

“We need to do everything within our control to keep these options on the table for when farmers need them. This means keeping our balance sheet strong.

Mr Monaghan said he wanted to be upfront with farmers and unitholders that to achieve this the Board has taken the step to depart from the amount calculated under the Farmgate Milk Price Manual. This is permitted within Fonterra’s Constitution.

“During the process of closing our books for the financial year end, the need for these actions has become clear. Our forecast performance is not where we expected it would be. While the numbers are not finalised, our margins were less than we forecasted right across our global Ingredients and Consumer and Foodservice businesses.”

The Co-operative’s full year results will be announced on 13 September 2018.

This is disappointing but not unexpected.

It’s also a reminder that the forecast milk price can change and that budgets should be conservative until its confirmed.


John Wilson stands down as Fonterra chair

July 27, 2018

John Wilson  has announced that he is standing down as Fonterra chair immediately and will retire from the board in November.

In an email to shareholders he said:

  • I have made the difficult decision to stand down as your Chairman to recover from a recent serious health scare.
  • Within the last month I have undergone a significant surgery.
  • I have made a very good recovery and am well but need on-going treatment.
  • I have been humbled by the support of my fellow Directors, and after deep discussions with them and with my family, I have decided to stand down as Chairman as of today and will retire from the Board at the Annual Meeting in November.
  • It has been a privilege to serve you as Chairman and give something back to this great Co-operative that continues to give my family and me so much.
  • As many of you will know from experience, governance roles are incredibly rewarding, but equally demanding on the individual and their families.
  • Continuing as Chairman when I cannot put my full energy and attention into the role is not appropriate.
  • I look forward to spending more time back on the farm with Belinda and the girls.
  • Long standing director, John Monaghan has been selected by the Board as the new Chairman of Fonterra.
  • John, who has been on the Board since 2008, has been closely involved in the process to appoint a new CEO to Fonterra and will now be responsible for advancing this appointment with the full involvement and support of the Board.
  • I know you will join me in putting your full support behind John and the Board as he leads the Co-operative through this critical period of CEO transition, the DIRA review, farmer flexibility, and the vision and purpose work alongside the Shareholders’ Council.

Fonterra is facing criticism from outside but the shareholders who are the farmers who supply the milk can’t argue with the second highest payout and John Wilson must get credit for that.

It is New Zealand’s only internationally rated company and the country ought to be proud of it.

It is constrained by some of the conditions of the DIRA regulations and the review is an opportunity to fix that.

A serious health scare is a serious business and he is doing the right thing for himself, his family and the company by standing down as chair. I wish him a full and speedy recovery.

Fonterra is in the process of appointing a new chief executive.

It isn’t always ideal to replace both the chair and CE at the same time.

But if a board is functioning properly and all board members are pulling their weight there ought to be no problems with new people in both positions.

John Monaghan served as chair of the Shareholders Council and has both the skills and experience to lead Fonterra well.

 


Rural round-up

November 1, 2017

Farmers’ efforts rewarded with improving water quality – Esther Taunton:

Taranaki has recorded its best stream health trends in 21 years, a new report shows.

The 2017 Healthy Waterways report showed water quality in the region was ‘fit for purpose’ by almost all measures within the compulsory national criteria at almost all sites most of the time.

Published by the Taranaki Regional Council, the report looked at trends from 20 years of monitoring and showed most measures were improving or not changing significantly for the ecological health and physical and chemical state of 99 per cent of Taranaki rivers and streams. . . 

No Sign of Bonamia in wild oysters:

The latest testing of the Bluff wild oyster fishery shows no sign of Bonamia ostreae, says the Ministry for Primary Industries.

The testing was part of MPI’s surveillance programme for the invasive parasite, says MPI Director of Readiness and Response Geoff Gwyn.

“This is great news for the local industry and everyone involved in the response,” says Mr Gwyn. . . 

Global meat trends look positive – Allan Barber:

2016 saw widely differing agricultural export performances between New Zealand and our trans-Tasman neighbours. According to the Red Meat Advisory Council’s State of the Industry 2017 report, Australia broke all records by increasing its exports of red meat to A$15.1 billion, up by nearly A$6 billion since 2009. It was the world’s biggest exporter of beef, second biggest for sheep meat and third biggest live exporter.

In contrast New Zealand’s exports of red meat and offal declined by $909 million to $5.9 billion or 7.4% from 2015; the fall was shared fairly evenly between beef (down $481 million) and sheep meat (down $415 million), although the percentage drop for beef was much higher at 14.4% compared with 4.6% for sheep meat. Both volume and value contributed to the decline, with the United States responsible for three quarters of the beef shortfall and the EU, including UK, responsible for half that of sheep meat. . . 

Building a NZ brand:

Beef + Lamb New Zealand’s market development team is building a compelling case for the red meat industry to work with a New Zealand brand story under which individual brands could sit.

Michael Wan, who led a marketing team on a research trip to China, United States, Germany, India, Indonesia, United Kingdom, United Arab Emirates and New Zealand, says this country needs a strong value proposition at a national level and to invest in telling its story.

The trip, which included comprehensive qualitative research at every level of the supply chain in each of the markets they visited, highlighted both a low awareness of NZ – especially its food production systems – but also the potential for growth in the lamb category. . .

Farmer Fast Five – Charles Douglas-Clifford – Claire Inkson:

The Farmers Fast Five: Where we ask a Farmer five quick questions about Farming, and what Agriculture means to them. Today we talk to Ballance Farm Environment Award Winner and Proud North Canterbury Farmer Charles Douglas-Clifford.

1.         How long have you been farming?

I have been involved in farming in one way or another all my life. I grew up on the family farm as a 6th generation descendant, finished
school and worked on various farms in Australia for a year. I then went to Lincoln University to study a BCom Ag. I went on to spend 6 years working as a rural bank manager for the National Bank in Palmerston North, Nelson and Timaru. Then in early 2012 I returned home to Stonyhurst with Erin, after getting married and have been here ever since.           

2.         What sort of farming were/are you involved in?                    

In the 6 years working as a rural manager I got to see a wide range of farming operations throughout the country. I was also
fortunate to have been in the finance sector through the global financial crisis. . . 

2017 Fonterra Elections Results Announced:

Returning Officer Warwick Lampp, of electionz.com Ltd, has declared the final results of the 2017 elections for the Fonterra Board of Directors, Directors’ Remuneration Committee and Shareholders’ Council.

Shareholders voted to elect incumbent Director John Monaghan and new Directors Brent Goldsack and Andy Macfarlane. . . 

Velvet market underpinned by growing demand:

The new deer velvet season has opened strongly, with farmers reporting early enquiry from buyers at prices 10-15 per cent above last season’s close.

Deer Industry NZ (DINZ) Asia market manager Rhys Griffiths says the price recovery is timely, given the investment many farmers are making in upgrades to their velvetting facilities.

“Regulatory changes in China last season led to a loss of buyer confidence and a dip in prices that did not reflect the steady growth in demand for NZ velvet from China and Korea, our major markets,” he says. . . 

Biosecurity Week 2017 kicks off:

Pests and diseases from offshore can cause serious harm to New Zealand’s unique environment and primary industries; and the Port of Tauranga is one of many potential gateways.

Biosecurity Week activities highlight the importance of biosecurity and the role that everyone in the Bay of Plenty can play in managing unwanted biosecurity risks says Kiwifruit Vine Health Chief Executive Barry O’Neil.

“We’re looking forward to talking to people who work on and around the Port about biosecurity – it’s such an important issue and one that really does affect everyone.” . . 

NZX plans to launch skim milk powder option contract – Tina Morrison:

(BusinessDesk) – NZX, the financial markets operator, plans to launch a global skim milk powder option contract in December in response to customer demand.

The Wellington-based company said trading volumes in its skim milk powder futures market are up 113 percent this year as interest in its suite of dairy risk management tools increases. The new contract will add to the NZX’s existing futures contracts for whole milk powder, skim milk powder, anhydrous milk fat and butter, and its whole milk powder options. . . 

Innovative trading platform Syndex announces partnership with agritech firm:

Online share exchange Syndex is supporting New Zealand agritech company Regen to undertake a major expansion.

Syndex is an independent online trading platform for any proportionally owned asset for the private economy. Fractions of agricultural assets, units in commercial property and private equity can all be funded and purchased through the Syndex exchange. . . 


Rural round-up

October 11, 2017

Fall in farm worker deaths ‘encouraging’ – Alexa Cook:

The number of deaths and serious injuries in the farming sector have dropped this year.

Figures from WorkSafe show that this year, up until 1 October, there have been nine deaths in agricultural workplaces, compared to an average of 15 deaths for the same period each year from 2014 to 2016.

Statistics show that the agricultural sector has had almost four times the number of workplace deaths than forestry, construction and manufacturing since 2011. . . 

Nine vying for three spots in Farmlands director elections – Sally Rae:

Voting is open in this year’s Farmlands director elections and there is a strong southern presence among the South Island candidates.

Nine candidates will contest the three director vacancies this year, with elections required in both the North and South Islands.

The South Island vacancy will be contested by former long-serving Alliance Group director Murray Donald (Winton), former Otago regional councillor Gary Kelliher (Alexandra), accountant Mel Montgomery (Southland), former Federated Farmers national board member David Rose (Southland) and current Alliance Group director Dawn Sangster (Maniototo). . . 

Alliance plans capital spending of $54:

Alliance Group is investing $54million in capital expenditure during the next year.

Outlining the investment at a series of roadshows throughout the country, chief executive David Surveyor said the success of the business strategy meant the co-operative was in a position to reinvest to continue to build the company’s operational performance.

In addition to a pool payment, the company would have a bonus share issue and reward farmer shareholders by increasing their shareholding in the co-operative.

The level would be based upon the supply of lambs, sheep, cattle, calves and deer during the 2017-18 season, Mr Surveyor said in a statement. . . 

Possum peppering – still totally implausible, seven years on – Alison Campbell:

Kerikeri award entry turns possums into burning issue“, proclaims a headline in the Northern Advocate.

The story is about an entry in the WWF-NZ’s Conservation Awards for 2017; I hope the judges have a good grasp of science and scientific method. From the article:

The entry from Kerikeri promotes a new take on an old-world biodynamic method of ridding fields of rodents and other furry pests.

It is called peppering, and involves burning the pelts and carcasses of said pests until they’re little more than ash, grinding it finely, mixing it with water and “spray painting” the substance back on the affected land.

Apparently, this version of the ‘traditional’ practice is new in the sense that so far it has not been applied because it lacked ‘scientific background’. . . 

Sheep Meat And Beef Levies to Remain Unchanged:

Beef + Lamb New Zealand (B+LNZ) announced today that sheep meat and beef levies will remain unchanged for the levy year commencing 1 October 2017.

B+LNZ Chairman James Parsons says the Board has reviewed budgets and activities for the financial year commencing 1 October 2017 and that the sheep meat levy on all sheep slaughtered would remain $0.60 per head and the beef levy, on all cattle slaughtered (including beef cattle and dairy cattle but excluding bobby calves), at $4.40 per head GST (exclusive). . . 

Voting for the 2017 Fonterra elections and resolutions underway:

Voting is now open for the 2017 Fonterra Board of Directors’ Elections, the Shareholders’ Councillor Elections in 10 wards, and six Annual Meeting resolutions.

This year Shareholders have the opportunity to elect three Fonterra Directors. The three candidates are Independent Nomination process candidates Brent Goldsack, Andy Macfarlane and John Monaghan. Each candidate requires Shareholder support of over 50% of votes to be elected. . . 

Farmers Fast Five: John McCaskey – Claire Inkson:

Farmers Fast Five : Where we ask a Farmer five quick questions about farming, and what agriculture means to them. Today we talk to John McCaskey : Pioneer of the Wine Industry, Farmers Advocate, Entrepreneur, and Proud Farmer.

1….How long have you been farming?

Since I was big enough to hold a bottle and feed a lamb—say 1939! My infant years were filled with helping feed pigs & chooks progressing to milking the house cow and churning butter after school! By age 10 I was going to be a farmer! I passed all agriculture subjects for School Cert 1954 . . 

New deal sees Palgrove partner with NZ super fund

Leading Queensland seedstock producers, David and Prue Bondfield, Palgrove, are the latest agribusiness to partner with a superannuation fund in order to grow their business.

The Bondfield family released a statement on Wednesday saying their business, had entered into a partnership with the New Zealand Superannuation Fund (NZSF). The terms of the transaction remain confidential.​  . . 

Select Harvest rejects Arab takeover, launches $65m local capital raising – Andrew Marshall:

Select Harvest has more than 7000 hectares of almond plantations likely to deliver about 15,800 tonnes of crop next year.

Hot on the heels of rejecting a $430 million Arab takeover offer, big almond growing and nut processing business, Select Harvest, has launched a share market capital raising bid for about $65m.

Select has already placed 10.7m new shares worth about $45m with institutional investors. . .

 

 


Rural round-up

September 19, 2017

Guiney misses out on selection – Hugh Stringleman:

One long-serving director and two newcomers are the preferred candidates for three Fonterra board seats this year leaving sitting board member Leonie Guiney out in the cold.

They were former Fonterra Shareholders Council chairman and nine-year director John Monaghan, of Wairarapa, former Deer Industry New Zealand chairman and farm consultant Andy Macfarlane of Mid-Canterbury and PWC partner and National Fieldays Society board member Brent Goldsack, of Waikato.

The three were named as independent nomination process candidates for three vacancies among seven farmer-director seats on the Fonterra board. . .

Palmerston North farmer Peter Bills owns more machines than most – Samantha Tennent:

Not many contractors or services agents come through the gate of Te Rata Farm at Linton, owned by Peter and Kim Bills. The Bills try to be as self-sufficient as possible across their business.

The Bills run a pretty taut ship, keeping costs down by doing all their own cultivation, mowing and bailing. They admit they own more gear than the average 260-cow farm; almost the only piece of equipment they don’t have is a harvester.

“It keeps costs down for us but more importantly we aren’t relying on a contractor to get the work done. . .

Weather hits somber pea growers – Annette Scott:

There’s been no compensation for Wairarapa pea growers heading into their second season of a two-year pea moratorium.

And on top of wet weather that meant they could not get crops in the ground put farmers in a pretty sombre mood, Wairarapa cropping farmer Karen Williams said.

Williams, the 2017 Biosecurity Farmer of the Year, was an integral part of the grower group working alongside farmers and the Ministry for Primary Industries in the pea weevil response. . .

Restrictions lifted on feijoas in Taranaki after being cleared of myrtle rust threat – Gerald Piddock:

Feijoa lovers can breathe a sigh of relief after ministry officials put the plant in the low risk category for infection from myrtle rust.

Growers will also be relieved after the Ministry for Primary Industries lifted restrictions for moving feijoa plants in and out of Taranaki after it concluded there was little risk of them spreading myrtle rust.

Since myrtle rust was found in New Zealand earlier this year, there had not been a single feijoa plant found with the infection, the New Zealand Plant Producers Incorporated said in a statement. . .

From milk to medicine with DFE Pharma – a farmer’s journey from Taranaki to Europe:

Under the mountain in Kapuni, Taranaki, our farmers’ milk is being made into something pretty remarkable.

Our Kapuni site focuses on producing pharmaceutical lactose, a key ingredient in inhalers helping people around the world manage their asthma.

The lactose we make at Kapuni is the most pure lactose you can make in the world. And in short, gets the medicine in powder inhalers to where it’s needed – the lungs. . . 


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