Business not Minister’s business

June 14, 2018

NZ First MP Shane Jones has stomped with his clod hoppers where he has no business to be again:

Regional Development Minister Shane Jones has climbed into the leadership of dairy giant Fonterra, calling for chairman John Wilson to follow chief executive Theo Spierings out the door.

Jones said he told the company it should stop being political and instead focus on its business.

Says the Minister who uses personal attacks instead of polite discourse and ought to be focusing on politics not meddling in business.

They should focus less on interfering in politics and more on justifying the money they’ve lost overseas. I believe that they have become disconnected from the farming community.”

Jones said he had suggested to Agriculture Minister Damien O’Connor whether it was time to restructure the dairy co-op, and singled out Wilson for special mention.

Doesn’t he know that the Dairy Industry Restructuring Act (DIRA), under which Fonterra was created, is under review already?

The leadership of Fonterra, I believe, starting with the chairman, is full of its own importance and has become disconnected.”

He said there was an absolute absence of accountability for the “enormous amounts of dough” that the current chairman had presided over.

This sounds very like a minister full of his own importance presiding over a billion dollar slush fund with little accountability.

The CEO has gone, well that’s only one party of the double-Dutch we’ve had to put up with in Fonterra over the last nine years. I thoroughly believe this … that as the CEO leaves Fonterra, the chairman should in quick order catch the next cab out of town.

Double-Dutch? Is this a xenophobic reference to the retiring CEO Theo Spierings and past chair Sir Henry van der Heyden who stepped down nearly a decade ago?

“I’ve been bloody disappointed that Fonterra, in my view, the leadership has not accepted that there’s a new Government and there is a new narrative and I’ve had a gutsful of them believing they are bigger then what they really are.” . .

Believing they’re bigger than they are? That’s rich coming from the party with far more power – and voter money – than its voter support at the election entitle it to.

This sort of tirade does nothing to reassure  businesses which are already very wary of the policies and directions of the government.:

The time has come for the Prime Minister to step in and discipline her Regional Economic Development Minister who repeatedly seeks publicity by attacking business leaders, National’s Regional Economic Development spokesperson Paul Goldsmith said today.

“Business confidence in New Zealand is plummeting and the reasons for that are mounting.

“The Government’s low growth policies like higher taxes and stronger unions are causing businesses to hire fewer people and invest less in growth and it has them concerned about the future of New Zealand and who can blame them?

“Because on top of that you have a loudmouth Regional Economic Development Minister who’s putting his own ego and need for publicity ahead of the interests of New Zealand.

“Shane Jones’ attacks on Fonterra’s leadership are the latest burp from a man who is fast losing any respect he once had.

“He says Fonterra’s leadership is ‘full of their own importance’.  That sounds like a more apt description of himself.

“He even added he’s ‘worried about the absolute absence of accountability for the enormous amounts of dough that the current Fonterrra chairman has presided over’.

“This is startling hypocrisy from the same man who defended his own region getting the lion’s share of funding from his billion-dollar Provincial Growth Fund by stating ‘to the winner goes the booty’.

“Well it’s not his booty and it’s clear Shane Jones has no idea what accountability means.

“This Government has decided to spend $3 billion over the next three years on regional economic development, including roundabouts and church restorations. It’s critical the responsible is up to the job and focused on doing his job well.

“At the moment, all he seems good for is attacking business leaders whenever a few days have gone by without some of the media coverage for which he craves.

A friend who was at the KPMG breakfast at which Jones launched his tirade said it was entirely inappropriate, and a very poor reflection on the MP and the government.

Fonterra is a co-operative. The performance of the company and its chair are the business of its shareholders not an MP.

There is some dissatisfaction and there are concerns but this season’s  milk price is the third highest since the company was formed.

Shareholders could well be more concerned about the MP who has no business interfering in their business than the chair’s performance.

So Jones’s loose lips could well strengthen the position of Wilson who is up for re-election this year.


Rural round-up

June 3, 2018

Already-stressed farmers will need to use all resources available to cope with the added impact of mycoplasma bovis. Their personal resilience faces a severe test – Daniel Tisch:

The mycoplasma bovis eradication programme underway will challenge farmer resilience. Resilience addresses the return to normal after a shock.

The shock felt by farmers from culling their herds has been widely reported. From what we know about resilience, this initial impact will be followed by a recovery period, in which the mental and emotional state of farmers will be affected for years.

The incidence of depression, suicide and other mental health conditions will rise.

An average of one farmer every other week commits suicide in New Zealand and this rate increases during stressful times such as a drought. International studies of farmers highlight their vulnerability. Many countries have programmes to support farmer resilience.  For example, US-lawmakers are currently discussing The Stress Act for farmers.  . . 

Just get on with it farmer says – Neal Wallace:

Leo and Maite Bensegues aren’t really interested in how Mycoplasma bovis arrived on their South Canterbury farm last August.

It meant the destruction of 950 cows and 222 yearlings but the Morven sharemilkers do not dwell on those dark days.

Instead the Argentinian who arrived in New Zealand in 2005 with $728 to his name focuses on the future and a day in late June when his farm will be declared free of the disease and he can start preparing for the calving of his recently bought 700-cow herd. . .

MPI answers questions:

When did Mycoplasma bovis arrive in New Zealand?

All the evidence we have is that Mycoplasma bovis arrived in New Zealand in late 2015 to early 2016. Investigations are ongoing.

Why do you think this?

We have two lots of evidence. A genetic clock and our tracking and tracing activity where we identify and test animals on farms that have received cattle or other risk items from Mycoplasma bovis positive farms, like milk for feeding calves.

What’s a genetic clock?

Since we discovered Mycoplasma bovis in NZ in July 2017 we have been gene sequencing the disease to identify its genetic fingerprint. . . 

Leisurely trip with cows allows rubbish pick-up – Jono Edwards:

Dairy farmers across the country braved the cold yesterday to embark on a yearly stock pilgrimage.

In some areas, they were concerned about the travel and mixing of stock that came with Gypsy Day in the era of Mycoplasma bovis.

Taieri dairy farmer Philip Wilson was not too worried about the  threat of the infection yesterday as he moved a small herd just 3km down the road. . . 

Wilson, Spierings argue valid comparisons, value-add – Hugh Stringleman:

For the Fonterra Scorecard series Farmers Weekly sought an interview with chairman John Wilson and chief executive Theo Spierings, now in his last year at the top of the world’s second-largest dairy processor and trader.

Aspects of Fonterra’s historical performance, Spiering’s strategies, the dairy industry review and Fonterra’s most-recent downgrade in earnings and dividends were discussed. It was their only joint interview with rural media during the past seven years. Hugh Stringleman reports. 

Fonterra’s performance

New Zealand dairy farmers who supply Fonterra now receive better payouts than their counterparts almost everywhere in the world, chairman John Wilson and chief executive Theo Spierings say. . .

New directors elected to Horticulture NZ board:

Horticulture New Zealand’s Board welcomes new director Bernadine Guilleux and re-elected director Mike Smith, after four well-qualified candidates contested two vacant roles on the Board.

Horticulture New Zealand’s President Julian Raine was advised of the results by Electionz, which ran an independent voting process for the Board.

Welcome Bay kiwifruit grower Mike Smith offered himself for re-election and Bernadine Guilleux, marketing manager at Balle Bros in Auckland, is a first-time candidate. . . 

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Rural round-up

May 28, 2018

Dairy farmers are an easy target and not alone in environmental guilt– Lyn Webster:

 As a dairy farmer I hear a lot of criticism about the perceived environmental impact of farming animals on land, and this has made me extremely environmentally aware.

Everywhere I look I see the environmental impact of humans: people just moving around, eating, breathing and living their lives.

Every buying decision we make has an impact – whether it be food, clothes off the internet from China or an overseas trip. TV advertising incessantly tells us to buy more and more things to make us happy, to make our children happy and to tick off our bucket list.  

Big shops bring us zillions of dollar’s worth of colourful plastic shaped into seemingly desirable objects, many of which are discarded quickly in the shape of broken toys, cracked garden gnomes and punctured plastic swimming pools. . . 

Sharemilker protects his herd ahead of Gypsy Day – Gerald Piddock:

A nervous Calvin Lauridsen​ has done all he can to protect his prized dairy herd from Mycoplasma bovis ahead of next week’s Gypsy Day.

The Arapuni farmer is in the final stages of packing up and leaving the 138 hectare farm he and wife Nadine have 50:50 share milked with 440 cows for the past eight years.

All that is left on the farm are a few items of machinery and his dairy herd, which is being picked up on Monday , the same day Cabinet will make a final decision whether to try and eradicate the disease or shift to a management regime.

So far, the cattle disease has spread to 39 farms since July last year, including the latest addition of a dairy farm near Cambridge.  . .

There’s more risk on moving day – Hugh Stringleman:

Several hundred sharemilkers and their cows will move farms on Gypsy Day with extra time-consuming and costly animal health precautions because of Mycoplasma bovis.

The spread of at-risk properties shows precautions must be taken for cattle movements in all dairying regions of the country, DairyNZ extension general manager Andrew Reid said.

About 3000 of the nation’s 12,000 dairy farms have sharemilkers and the standard contract length is three years.

Therefore up to 1000 herds could move at the end of the season though more likely several hundred will move on June 1, Reid said. . .

Former Fonterra director calls for chair Wilson to resign – Jamiie  Grey:

A former director of Fonterra has called on chairman John Wilson to “move on” after what he said was the co-operative’s ongoing underperformance.

Fonterra this week issued its nine-month business update which featured a strong farmgate milk price but which also highlighted a downward pressure on the company’s earnings.

Taranaki-based Harry Bayliss, a founding director who served on the board from 2001 to 2006, sent an email to existing board members on March 31 calling for Wilson to step down. A spokesman for Fonterra said it had no comment to make. . . 

Getting the good oil in Central – Yvonne O’Hara:

This season’s long summer has resulted in a bumper harvest for olive growers in Central Otago.

Lowburn’s Stephen Morris, his wife Olivia and his in-laws Alistair and Sue Stark own Olive Press Central Otago (Opco) on the family’s vineyard, St Bathans Range, near Cromwell.

Mr Morris has been busy during the past three weeks cold-processing olives to produce extra virgin olive oil,

The good summer has meant the fruit produces more oil with a better flavour, and promises to be one of the best they have had. . . 

Droving journey highlights ongoing drought in Queensland – Sally Cripps:

When Jodie Muntelwit and PJ Elliott decided to put 1200 head of their cattle on the road last October, they imagined it would only be for a month or two.

Eight months later, the mob of mostly weaners, under the care of Ned Elmy, an offsider and Ned’s 18 dogs, is trudging towards home at Corfield, living on hope and whatever Queensland’s stock routes can offer.

The season didn’t give PJ and Jodie the break they’d hoped for on their country north of Winton last summer, and the 150mm single fall in March at Weeba and Enryb Downs brought a half-hearted pasture response from most of their paddocks. . . 


Rural round-up

April 2, 2018

Action call over any found to have illegally brought in ‘M.bovis’ – Sally Rae:

Consequences are needed if any farmers have put other farmers, animals and livelihoods at risk, let alone the New Zealand economy, DairyNZ chief executive Tim Mackle says.

Dr Mackle was responding to an announcement by the Ministry for Primary Industries yesterday that it had simultaneously executed search warrants at three locations as part of the Mycoplasma bovis investigation.

The New Zealand Herald reported there was growing speculation the bacterial cattle disease was introduced to New Zealand through illegally imported livestock drugs, and sources suggested Tuesday’s simultaneous searches were in Auckland and Southland. . .

Fonterra negotiating ‘roadblocks’ in China – Fran O’Sullivan:

Fonterra’s news that it was writing down its $774 million investment in Chinese infant formula company Beingmate by $405m inevitably dominated news headlines after the dairy co-operative announced its 2018 interim result to the NZX.

But that was eclipsed when chairman John Wilson announced the seven-year reign of his chief executive Theo Spierings was in its final phase.

It was a brutal press conference. . .

Food for thought: How to secure New Zealand’s food supply in the face of a changing climate – Tess Nicholl:

We take for granted the bounty on offer at our supermarkets, but destructive cyclones and the hottest month in 150 years are turning attention to how long New Zealand can provide fresh food for its growing population. Tess Nichol investigates.

On the outskirts of Dargaville, Andre de Bruin has been growing kumara for the past two decades.

He produces 40 hectares of the purple tuber annually, but last year his yield was halved thanks to what de Bruin calls a “perfect storm” — drought followed by unseasonal amounts of rain right before harvest.

“We had drought drought drought, then bam, floods,” he recalls. . .

Get the basics right – Sam Whitelock:

I come from a farming background and once I complete my rugby career I’ll be taking the lessons I’ve learnt from professional sport and applying them back on the farm. (Sam Whitelock, Farmstrong Ambassador)

Rugby has certainly taught me heaps about how to look after myself and handle pressure.

I reckon rugby and farming are really similar that way – there’s always targets to meet and results to achieve.

So how can you prepare for the ups and downs of it all? . .

Merino stud tour held in conjunction with awards – Yvonne O’Hara:

About 170 people took part in a two-day self-drive tour visiting eight merino studs in Central Otago earlier this month.

The tour was held in conjunction with the Otago Merino Association Awards, which were announced at a formal dinner in Alexandra on March 16.

The studs on the tour were Nine Mile Station, Malvern Downs, Earnscleugh Station, Matangi Station, Little Valley Station, Matarae Station, Stonehenge Station and Armidale Merino Stud.

Lunch was at Earnscleugh Station’s woolshed . .

 Art Basel Hong Kong 2018: Loro Piana’s cloud-like “The Gift of Kings” exhibition 590 panels of the world’s finest wool make for a jubilant immersive experience   – Alessandro De Toni:

In conjunction with Art Basel Hong Kong, Loro Piana—one of the world’s most prestigious cashmere and luxury fabric manufacturers—pays homage to its most renowned material known as The Gift of Kings.

It’s quite a bold name but it represents an incredibly fine, feather-light and rare wool sourced by Loro Piana through a 30-year-long collaboration with a selection of Merino sheep breeders in Australia and New Zealand. This material, measuring only 12 microns (one thousandth of a millimeter), is far finer than cashmere and only available in very limited quantities, meaning it’s quite extraordinary that it was used as the principal source material for this installation.


Good news from Fonterra & Synlait

March 21, 2018

Fonterra has announced an increase in the forecast milk payout:

Fonterra Co-operative Group Limited today increased its forecast Farmgate Milk Price for the 2017/18 season to $6.55 per kgMS and announced a full year forecast dividend range of 25 – 35 cents per share with an interim dividend of 10 cents per share.

Chairman John Wilson says the ongoing strong global demand for dairy and stable global supply are continuing to support global prices, particularly for the important Whole Milk Powder category.

“Farmers will welcome a forecast cash payout of $6.80 – $6.90, which would be the third highest in the last decade. This is also good news for New Zealand as it represents around $10 billion flowing into the country’s economy. However, we are very aware of the challenges many of our farmers are facing this season with difficult weather conditions impacting production.

“While the global supply and demand picture remains positive and we expect prices to stay around current levels, we will be watching for any impact on market sentiment as spring production volumes build in Europe,” he added.

New from China isn’t all good though.

Fonterra’s Greater China business continues to perform well overall but the Co-operative has re- assessed the value of its Beingmate investment so that it reflects a fair value at this point in time.

Commenting on this decision, Mr Wilson says the Board has assessed the carrying value of Beingmate at $244 million and therefore taken an impairment of $405 million. . . 

Synlait Milk has announced a record half-year profit:

Synlait Milk  has reported a half year net profit after tax (NPAT) of $40.7 million for the six months ending 31 January 2018.

This is compared to $10.6 million for the same period last year (H1 FY17).

Synlait’s Managing Director and CEO, John Penno, says the strong earnings growth of $30.1 million has been driven by increases in manufacture and sales of our highest margin products, as well as improved margins and earlier sales of our ingredients products.

“The growth trajectory of canned infant formula has continued with total consumer packaged volumes almost tripling from the same period last year and up 36% on the second half of last year,” he says.

“Our relationship with The a2 Milk Company™ continues to strengthen where we remain their exclusive manufacturer for the important Australia, New Zealand and China market.”

“We have also renegotiated our supply agreements with New Hope Nutritionals and with Bright Dairy, which provides for four-fold volume growth over a five-year period. However, we don’t expect this to impact sales until FY19,” he says.

In the six months to 31 January 2018, Synlait has invested $34.5 million in capital expenditure throughout New Zealand. The major components of this were the Synlait Auckland blending and canning facility ($11.2 million) the new wetmix kitchen at Synlait Dunsandel ($18.4 million). Synlait also established a new research and development centre in Palmerston North. . . 

This is good news for farmers and the wider economy.

The anti-dairying movement gets a lot of attention, much of it based on mis-information and emotion, but that doesn’t change the importance of the industry as a major export earner.

 


Fonterra’s forecast milk payout falls

December 8, 2017

Fonterra has revised its forecast farmgate milk payout price from $6.75 to $6.40:

Chairman John Wilson says the lower forecast Farmgate Milk Price reflects a prudent approach to ongoing volatility in the global dairy market. The GlobalDairyTrade price for Whole Milk Powder is a big influencer of the Farmgate Milk Price and it has declined by almost 10 percent since 1 August 2017.  

“While the result of the arbitration with Danone has impacted our earnings guidance for the season, it has no influence on our forecast Farmgate Milk Price,” says Mr Wilson.

“What is driving this forecast is that despite demand for dairy remaining strong, particularly in China, other parts of Asia and Latin America, we are seeing strong production out of Europe and continued high levels of EU intervention stockpiles of Skim Milk Powder.

“This downward pressure on global prices is being partly offset by the lower NZ-US dollar exchange rate,” says Mr Wilson.

“Our strong financial position, customer order book at this point in the year, and confidence in demand means that the Board is able to increase the payments made in January by 10 cents per kgMS and will hold the Advance Rate through to the payments in May.

“In effect, our farmers will receive equal or higher payments for their milk over this period than were scheduled under the previous $6.75 milk price.

Fonterra has also updated its full season New Zealand milk collection forecast due to ongoing challenging weather conditions. The Co-operative has reduced its forecast by 1 per cent to 1,525 million kgMS – the same volume as last season. 

Given drops in GlobalDairyTrade price index in successive auctions, relieved by a very small lift this week, the drop in the forecast payout isn’t surprising.

It’s not the early Christmas present dairy farmers, sharemilkers, their staff and those who service and supply them were wanting, but it wasn’t unexpected and it’s still a reasonable return.

Of more concern is the dry weather.

A wet spring enable a late start to irrigation in North Otago but everyone’s watering as much as they can now.

At least here we have reliable water supplies.

Farmers in other areas where there is no irrigation, or where they face restrictions in dry weather, will be hoping forecasts for continuing hot weather and little or no rain are wrong.


Tributes to Michael Spaans

November 21, 2017

Michael Spaans, a former director of Fonterra and chair of DairyNZ has died.

Fonterra chair John Wilson paid tribute to him:

Sadly, today our Co-operative has lost one of our strongest people with former Director Michael Spaans passing away last night. He is survived by his wife Kristina and children Olivia, Logan and Harvey.

Earlier this year, Michael decided to step down from the Fonterra Board and focus on trying to recover from cancer. He and I go back many years and I saw him approach his illness in the same way he approached everything in life. He was resolute and determined and did his utmost to continue on as normal. It was a brave fight and I am sure that will not surprise those of you who knew him.

Michael was a proud dairy farmer with a passion for our Co-op and our industry. I have often talked about the importance of having leaders developing within our ranks and Michael is a very fine example. Michael served on the New Zealand Dairy Group Shareholder Council, before joining the Fonterra Shareholders’ Council at the time our Co-op was formed. He was also part of the first intake for the Fonterra Governance Development Programme, and later built his governance experience outside the industry including directorships with ASB Bank, Shoof International, DairyNZ, Manuka SA, Waikato Innovation Park, Innovation Waikato and Ospri New Zealand.

He then brought this experience, along with a huge level of energy and commitment to our Board, and won the respect of his fellow Directors and farmers for his willingness to listen and engage. Michael was a man who knew the importance of detail. He made sure that he knew this business extremely well, understood our strategy and was completely across the detail of the numbers. He always looked for constructive solutions and thought deeply about our Co-op’s governance and his role in the evolution of our business.

His insights and experience — along with his genuine interest and inquisitive mind — were also invaluable on Fonterra’s Milk Price Panel, the Co-operative Relations Committee, and the Audit and Finance Committee.

As late as last month, Michael was working for the betterment of New Zealand farmers in his capacity as Chairman of DairyNZ. He has also remained an ambassador for Fonterra on the international stage and in Wellington, recently speaking at the United Nations in New York on behalf of the Global Dairy Platform and all farmers.

We have lost a close friend, leader and an advocate of our industry much too soon. Our thoughts and deep gratitude for all that he contributed go to his family.

DairyNZ also paid tribute to him:

It is with great sadness that DairyNZ acknowledges the passing of (Reindert) Michael Spaans (54), husband, father, farmer, director, and recent chair of DairyNZ.

Michael Spaans

Michael has been a valuable member of the DairyNZ board since 2008 and was elected chair in November 2015. He was also a director of Fonterra from 2013 until January 2017 when illness forced an early retirement.  However, he continued on as a director of ASB and Shoof International, and with his farming interests in Canterbury, Chile, and the United States, as well as his home farm.

DairyNZ acting chair, Barry Harris, says: “Michael will be greatly missed by the board, our staff, our farmers and the wider Waikato community. His passion and knowledge of the sector, and dedication to improving outcomes for dairy farming profitability and sustainability are well known. We are going to miss his thoughtful debating and farmer-first approach to investment, his involvement with the dairy leaders group, his focus as chair of the Waikato Dairy Leaders Group and the group’s desire to improve the state of the Waikato River, and support for the Healthy Rivers plan in particular.”

Growing up on a family farm at Tauhei, near Morrinsville, Michael attended Mangateparu School, Morrinsville Intermediate and Morrinsville College. He later took over his parents’ farm at Manawaru, residing there with his wife Kristina and their three children, now aged 16, 20 and 22, until his passing.

A keen basketballer as a young man, Michael started farming life in Te Aroha as a young sharemilker, getting into governance around the time of the creation of Fonterra. He started with the old New Zealand Dairy Group shareholders’ council and continued to serve as Te Aroha Ward rep when the council and company became part of Fonterra. From there he has held many governance positions, dedicating his life to improving farming in New Zealand.

“Michael always had presence and not just because he was 6ft 9in tall, but because he was thoughtful, considered, and passionate about farming,” says DairyNZ’s chief Executive Dr Tim Mackle.

“Besides his love and dedication to his family, he was also dedicated to DairyNZ, even ill, he made such an effort to add value to our organisation.  He felt and was often quoted as saying how vital an organisation like DairyNZ was to act in the best interests of farmers, and the DairyNZ family are going to miss him.

“Our deepest sympathies lie with his family, especially his wife Kristina, who has also dedicated her past nine years to us too.”

A replacement chair of DairyNZ will be announced shortly, along with a replacement solution for a new farmer director.

Fifty four is far too young for a good man whose death will leave a large hole in his family and circle of friends.

Farming will also miss his contributions as a farmer, director and community stalwart.


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