Rural round-up

August 27, 2015

Farmers not off the hook on health and safety:

It’s a complete fallacy that the farming community doesn’t have to worry about health and safety as a result of proposed changes to the Health and Safety Reform Bill, according to an expert in the field.

Crowe Horwath agri health and safety expert Melissa Vining says the recent hype around proposed changes have monopolised the headlines in recent days with many accusing the government of letting farmers off the hook.

However she is quick to dispel the myth that farmers have been given a mandate to ignore health and safety. . . 

Landcorp posts 2014/15 annual results:

Landcorp has recorded a net operating profit of $4.9 million on revenue of $224.3 million for the year ended 30 June 2015.

The $4.9 million net operating profit is down from the $30 million result the previous year. The sharp decline in the price of milk solids, combined with lower lamb prices, saw income from farm products drop 11.7 per cent on the previous year, to $213.5 million.

Landcorp chief executive Steven Carden said record-low dairy prices and tough growing conditions had driven overall financial performance down. However, a constructive response to challenging conditions had helped buffer Landcorp from major impact. . .

New Zealand in unique position for ‘water development’:

New Zealand has many advantages over the rest of the world when it comes to ‘water development’ but we need to get better at leveraging water use – for our future well-being and to protect us from the effects of climate change, says IrrigationNZ CEO Andrew Curtis.

This week is World Water Week 2015 with a theme of ‘Water for Development’. More than 3000 people, including world leaders, water experts and international aid organisations, have gathered in Stockholm, Sweden to debate solutions for water crisis around the globe at an annual symposium run by the Stockholm International Water Institute (SIWI) (www.worldwaterweek.org.nz).

Mr Curtis says New Zealanders are blissfully unaware of the relative advantage New Zealand has with plentiful rivers, lakes and groundwater supply across the country. . . 

Huge potential in Chathams – farmer:

The Chatham Islands has a huge, untapped potential for farming but a better understanding of soils is needed, one of the islands’ farmers says.

The islands are part of New Zealand and lie 750km east of the South Island.

Federated Farmers Chatham Islands chair Tony Anderson said there were 15 large farming operations there but many farmers worked a second job in the fishing industry. . . 

‘Power Play’ Innovation in Dairy Awards:

Entrants in the 2016 Dairy Manager of the Year contest will play to their strengths with a ‘power play’ initiative among the new judging criteria.

The change is one of many to the 2016 New Zealand Dairy Industry Awards programme, aimed at enabling more people to enter the awards competitions and at ensuring people with similar age, skills, maturity and investment in the industry compete against each other.

National convenor Chris Keeping says other changes include new competition names, entry and judging criteria – like the power play. . . 

OMG Dairy NZ Confessions Stories Advice's photo.


$1.6b better invested elsewhere

August 19, 2015

Stuff reports that the partial privatisation of Landcorp is on the cards because Finance Minister Bill English is concerned about its level of debt.

. . . English indicated Landcorp may sell farms to improve its balance sheet, but while he would not rule out partial privatisation he said the Government was not at that stage yet. The Landcorp board had looked at ways to raise capital, but not a float or big sell-offs.

“We are not ruling anything in or anything out because we aren’t actually dealing with propositions at the moment.”

But there had been discussions to ensure it was sustainable. He said he had confidence in the board.

He said he “would expect Landcorp to sell off farms if that’s part of maintaining the sustainability of their business”. . . 

Selling the company as a whole would be difficult if not impossible, given its value.

The management arm could be sold separately and farms gradually sold off until the company disappeared but that would be politically unpalatable which is unfortunate.

Think of the good $1.6 billion could do if invested in research and development, infrastructure, education, health, reducing debt  . . .

Now think about the benefits of tying that amount of public money up in farm land.

The only one I can come up with is as a land bank for treaty settlements but I don’t think settling all those still unresolved requires 137 farms covering 158,394 hectares spread throughout New Zealand.

The company made an operating profit of just $1 million in the first six months of this financial year which is an abysmal return on investment.

Even in good years, the return on investment is modest which is not unusual for even the best farmers.

Landcorp farms are well run. They have a good record for staff training, environmental protection and enhancement, and genetics.

But that still doesn’t justify tying up $1.6 billion which could provide much better value if invested elsewhere.


Rural round-up: payout edition

August 8, 2015

Fonterra forecasts $3.85:

Fonterra suppliers will get a total possible payout of $4.85/kg of milksolids this season – but there’s a catch.

The farmgate milk price is $3.85/kg MS with a predicted dividend of 40-50 cents then an extra 50 cents for each fully shared kilogram giving a total of $4.85/kg MS.

But the extra 50 cents is a loan, interest-free for up to two years, which farmers will have to apply for. Farmers would have to pay the money back when the Farmgate Milk Price or Advance Rate went above $6/kg MS.

Shareholders’ Council Welcomes Fonterra Shareholder Support Package Announced as Milk Price Plummets:

Fonterra Shareholders’ Council Chairman, Duncan Coull said the Co-operatives unique position has enabled it to provide assistance to its farmers in these tough times. The announced support package in the form of an interest free loan of 50 cents per kgMS for production between June and December will help farmers get through the tough times ahead.

While Fonterra Farmers were expecting a drop in the forecast Milk Price (down $ 1.40 per kg/MS to $ 3.85) it does not make today’s announcement any easier to bear. The dividend forecast of 40 – 50 cents per share lifts the total available for payout to $4.25 – $ 4.35 per kgMs. The retention policy means that the forecast Cash Payout for the season would be in the range of $ 4.15 – $ 4.20 for a fully shared up farmer. . .

Interest-free loans soften payout hit – Fran O’Sullivan:

Fonterra’s top brass cooked up a $430 million parachute so that the dairy co-operative could offer farmers a cushion for yesterday’s brutal cut to the forecast milk payment.

Fonterra chief executive Theo Spierings and chief financial officer Lukas Paravicini began work on the deal five to six days ago along with a couple of the co-operative’s farmer directors.

The upshot was that the Fonterra board was able to yesterday tick off a plan to leverage savings from the company’s transformation project and pump them out to farmers in the form of interest free loans. . .

Plan – do more and work longer – Neal Wallace:

Gerald Holmes concedes he will be a grumpy employer this milking season.

The Taieri dairy farmer has been through downturns before and said the biggest change he will make on his 600-cow farm is to become more self-sufficient.

“It is easy to say no to everything regardless of how reasonable the expense is.”

Gone this season are the days of calling in a plumber, mechanic or electrician to repair equipment.  . .

Times just get tougher for dairy industry – Sally Rae:

”If it continues into next year, … it’s going to be ugly for a lot of people. There will be casualties eventually.”

That was the sobering response of Berwick dairy farmer Mark McLennan on a day dubbed ”Black Friday” for the dairy industry, with Fonterra slashing its 2015-16 forecast price to $3.85 per kg of milk solids, the lowest figure since 2002.

DairyNZ’s latest analysis showed an average farmer needed $5.40 per kg to break even. . .

Fonterra revises down milk price to $3.85 – Tao Lin  and Gerald Piddock:

Fonterra’s decision to slash the price it pays its farmers for milk solids will wipe $2.5 billion off the economy, an analyst says.

Fonterra has cut its milk price forecast to $3.85 per kilogram of milk solids, down from $5.25.

Fonterra has also announced it will provide an estimated $430 million in financial support for farmers to help them cope with the low payout. . .

It is tough down on the farm – Regan Schoultz:

Craig Maxwell, his wife Kathy, and their daughter Penelope have been living on their dairy farm in Paparimu just south of Auckland for 25 years.

It is a big part of who they are as people and a lot of time, blood and sweat has been poured into it.

News of Fonterra’s announcement, informing New Zealanders that the farmgate milk price is set at $3.85, is not welcome.

“It is obviously disappointing but not surprising,” he said. “Nobody is going to be shocked by that figure, but no one is going to be happy.” . .

Milk price drop will have big impact on rural communities:

Rural businesses, not just dairy farmers, will feel a big impact from Fonterra’s announcement today that its 2015-16 Forecast Farmgate Milk Price is reducing from $5.25 to $3.85, says industry body DairyNZ.

DairyNZ chief executive Tim Mackle says the drop means a further reduction of $150,000 for the average dairy farm income for this season. “The harsh reality of this announcement is that Fonterra farmers won’t actually receive $4.25-$4.35 because of the way the payment system works. It’s likely to be more like $3.65,” he says. (see graph below for more details)

“The effect on the level of payments over a season will keep farmers’ cash income constrained for at least the next 18 months and it will take some farmers many years to recover from these low milk prices. . .

Massive fluctations in milk price show NZ’s dairy model ‘flawed’, Landcorp boss Carden says – Paul McBeth:

 (BusinessDesk) – A $4.55 swing in the forecast milk price paid to farmers over two seasons shows there’s something wrong with New Zealand’s dairy model, which is centred around farmer-owned Fonterra Cooperative Group, and it needs to change, says Landcorp Farming chief executive Steve Carden.

Fonterra today slashed $1.40 from its forecast payout to farmers to $3.85 per kilogram of milk solids, below the 2015 season’s $4.40/kgMS and less than half the record $8.40/kgMS paid in 2014. A slump in global milk prices through the course of the year had markets primed for a reduced payout, and state-owned Landcorp, the country’s biggest farmer, was pleased to lock in as much as it could at Fonterra’s $5.25/kgMS guaranteed milk price for the current season.

Landcorp’s Carden said the Wellington-based state-owned enterprise had been anticipating a weak revision for a while, so today’s result wasn’t a surprise. . .

Government should fast-track rural infrastructure to assist dairy regions:

Federated Farmers wants the Government to fast-track its infrastructure projects in dairy regions to assist local economies through the downturn in dairy prices.

Fonterra has announced its forecast Farmgate Milk Price for 2015/16 of $3.85 per kilo of milk solids. In late July last year Fonterra’s forecast price was at $6 per kilo for the 2014/15 season.

Federated Farmers Dairy Spokesperson Andrew Hoggard says small scale rural service industries, such as engineering or contracting, in some instances might be hit harder than the dairy farmers they traditionally rely on for work. . .

‘Black Friday’ will mean huge debt for farmers – Emma Jolliff:

Today has been dubbed ‘Black Friday’ not just for dairy farmers, but the whole New Zealand economy.

Fonterra has slashed its forecast payout to farmers to $3.85 per kilogram of milk solids, which is well below the break-even rate of $5.70.

Economists say it could strip $1.5 billion or more out of the New Zealand economy.

Sally Bosch has been sharemilking for eight years.  She knew a drop in the payout was coming, but not one this big. . .

Farmers cashing up assets – Dene Mackenzie:

Otago dairy farmers are selling what they can to generate cash flow as they face up to an immediate prospect of lower milk payout prices for the next 18 months to two years.

Holiday homes, second cars and unneeded plant and equipment have been the first on the block but accountants contacted yesterday by the Otago Daily Times say more, harder decisions will need to be made by some farmers.

Fonterra will this afternoon announce what many expect to be a sharply downgraded milk payout forecast for the current season. . .

 

 

 


No excuse for cruelty, deliberate discharge

August 5, 2015

Don’t click on this link if you’re going to be upset by details of ill treatment of animals:

. . .  Michael James Whitelock pleaded guilty in Greymouth District Court on Monday to 12 charges, including ill treatment of animals, unlawful possession of firearms and attempting to pervert the course of justice.

He was bailed to his home in Timaru until sentencing on October 7.

Whitelock was the dairy manager for a Landcorp farm near Westport from July 2012 until his suspension in September 2013. A Ministry for Primary Industries (MPI) investigation began that month after a Landcorp manager arranged for a vet to examine the herd.  . .

There is no excuse for cruelty to animals.

People who can’t treat animals with the care and respect they deserve shouldn’t even contemplate working on a farm.

Nor is there any excuse for this:

A dairy farmer has been fined almost $73,000 for deliberately discharging effluent into his drains which then flowed into the Coromandel Peninsula’s Tairua River.

The 11 years of illegal discharges is “quite staggering”, the Waikato Regional Council says. . .

Accidents could happen on the best of farms. Deliberate discharges might still occur in third world countries but they should not happen here.

 


Rural round-up

June 20, 2015

Environment Commissioner warns water quality is “not out of the woods yet”:

Parliamentary Commissioner for the Environment, Dr Jan Wright, today released two reports on water quality, calling for further steps to safeguard the quality of New Zealand’s fresh water.

“To its credit, the Government has invested heavily in developing policy to improve the management of fresh water,” said Dr Wright. “The 2014 National Policy Statement is a major step forward. Some regional councils have already begun to act and there is a real sense of momentum.”

“But we are not out of the woods yet. Some lakes and streams are below bottom lines and many others are not far above them. And in many places, water quality continues to decline.” . .

PCE report constructively points to next steps in water reform:

The Government has welcomed the two reports released today from the Parliamentary Commissioner for the Environment on managing New Zealand’s freshwater reforms.

“This report acknowledges the step change in improving freshwater management through the National Policy Statement in 2011 and the addition of the National Standards in 2014, but it also challenges the Government on the next steps. The report is timely in that it can feed into the work we are doing with iwi leaders and the reinvigorated Land and Water Forum. Our plan is to have a discussion document out on the next steps in freshwater reform early in 2016,” Dr Smith says.

The Parliamentary Commissioner for the Environment has recommended six improvements to the Freshwater National Policy Statement. The recommendations are: . . .

 Federated Farmers supports PCE report:

Federated Farmers welcomes the Parliamentary Commissioner for the Environment’s report on Managing Water Quality which supports our long held position that the National Policy Statement (NPS) is a major step forward for water management in New Zealand.

Dr Jan Wright has reflected on what has been an effective couple of years since her last report, with a sense of significant momentum in the regions. She has made six recommendations which overall we agree with excluding concerns around the exceptions policy.

Ian MacKenzie, Federated Farmers Environment Spokesperson, says “We agree with the Commissioner’s recommendation for a more strategic approach in prioritising the more vulnerable catchments. To date some councils have spread their efforts too far and thin when they needed to prioritise and make some real progress on the ones that are under the most pressure.” . . .

Landcorp says 2015 earnings ‘on track’ despite weaker dairy prices – Tina Morrison:

(BusinessDesk) – Landcorp Farming, New Zealand’s largest corporate farmer, said it doesn’t need to downgrade its earnings outlook in the wake of falling dairy prices remain weak, as it sheltered from volatility by locking in a guaranteed price at the start of the season.

Dairy product prices slipped in this week’s GlobalDairyTrade auction to the weakest level in almost six years. State-owned Landcorp in October cut its forecast for this year’s operating profit to a range of $1 million to $6 million, from a previous forecast range of $8 million-$12 million, citing weaker milk prices. However the company said it is protected from some of the recent weakness by taking up Fonterra Cooperative Group’s guaranteed milk price. . .

Grass-fed infant formula venture for Synlait:

Canterbury dairy company Synlait is going into partnership with United States company Munchkin to create a new infant formula.

California-based Munchkin has seven offices around the world, and is a leading manufacturer of infant and toddler products.

Synlait’s managing director Doctor John Penno said the unique aspect of this agreement was the product will be grass-fed.

“We’re differentiating inside the farm gate and in a way that really epitomises the very good things about the New Zealand grazing system. . .

Fonterra debate on the wrong track – Andrew Hoggard:

The argument about how well Fonterra is performing is gathering pace. People are claiming there is a bloated management.  We have politicians calling for the CEO to take a pay-cut.  That CEO has just indicated possible redundancies as an outcome of an internal review.

The view seems to be that a number of support roles in New Zealand need to go and be replaced by people in the market.

Pub talk fixes on how many are earning more than what amount, and then assumes that if the pay is slashed the problem is sorted.

I think we sometimes forget how big Fonterra is.  You don’t pay small wages to top people to run a business like that. A far more sensible discussion for us to be having would be on what Fonterra pays in wages as a percentage of turnover. And then break that down by division.  Then compare with other successful dairy co-ops from around the world and see what lessons we can take. . .

Waikato Seasonal Outlook: A new drought and rainy period forecasting system is giving farmers and other primary producer a chance to adjust schedules to improve production and protect investments and livelihoods.

When it comes to climate risks in New Zealand, the bluster and rage of tropical storms can steal the stage. But what has really garnered attention over the last ten years are the recurring droughts some of which have affected not just regional New Zealand but the whole country. These events can flare up quickly, and can cause considerable economic damage and stress to farmers and the ecosystems under their stewardship.

Drought is often insidious and creeping, intensifying over many months, stunting or killing crops and limiting grass growth and quality as it develops, reducing groundwater levels and river flow and drying out water supplies. It represents a more frequently occurring and persistent climate hazards faced by New Zealand. Conversely, extended rainy periods and the occasional extreme rainfall event characterised by excessively high rainfall totals over a short duration and typically covering small geographical areas can lead to their own set of problems for the country. . .

 


Rural round-up

April 7, 2015

Sticky fingered thief nabs hives:

A Taranaki beekeeper has been stung by the theft of 20 hives containing up to a million bees.

Stephen Black said the theft had cost him thousands of dollars. The hives had at least 200 kilograms of honey, which was ready for harvest.

He said they were probably targeted because of the increasing value of manuka honey. . .

Kiwi invention manages polluting cow urine :

On dairy farms around the country, pastures and soil are struggling to absorb vast amounts of cow urine, creating a huge headache for farmers.

An Auckland company believes it has come up with a solution to stop nitrates from cow urine polluting soils and waterways, and also believes it will help farmers save money.

“Dairy farming, although it is bringing enormous benefits to the country’s economy, it is producing more nitrates that are getting into our waterways, so something has to be done,” says Dr Bert Quin.

That is what has led Dr Quin and his business partner, Geoff Bates, to come up with the invention they’ve nicknamed “Spikey”. . .

Zespri completes European planting – Gerard Hutching:

The Mafia is just one of the hazards that Zespri’s European supply manager Callum Kay has to be aware of, but he says its threat is well contained.

Based just south of Rome, Kay manages Zespri’s kiwifruit growing business in Italy and France. About 1400 hectares are planted in Italy, 400 ha in France.

The majority of the kiwifruit in Italy is grown in the Lazio region near Rome, followed by Veneto, Piedmont and Emilia Romagna in the north. About 5 per cent of plantings are in Calabria and Campania, home to the ‘Ndrangheta and Camorra criminal organisations. . .

Visitors increasingly vital for station – Sally Rae:

Lake Ohau Station managers Simon and Liko Inkersell are very aware they live in a special environment.

The 8322ha high country property, on the shores of Lake Ohau, is situated in a spectacular location, with increasing numbers of visitors in the area.

Part of their business was now also bringing people into the area, with the opening of the Lake Ohau Quarters two years ago, and accommodation was becoming a significant part of the operation, Mr Inkersell told an Otago Merino Association field day at the property recently. . .

Landcorp launches new brand – Gerard Hutching:

State-owned enterprise farmer Landcorp has launched a new brand called Pamu to identify its products.

It was a “great modern design” that had been tested with consumers in New Zealand and overeas.Meaning “to farm” in Maori, Pamu was a “fresh, original name which talks to who we are and what we do” said Landcorp chief executive Steve Carden. The cost of the exercise was $65,000.

Carden said the branding was all about adding value to products.

“Consumers are really interested in finding out about products and where they came from,” he said. . .

NMIT ready to harvest new varieties:

New grape varieties planted on Nelson Marlborough Institute of Technology (NMIT)’s Marlborough campus vineyard are ready for their first vintage this year.

 In 2012, NMIT viticulture and wine staff and students began replacing rows of Pinot Noir on the half-hectare on-campus vineyard with several new and classic varieties donated by Riversun Nursery in Gisborne.  They completed further plantings in 2013 and 2014.

NMIT viticulture tutor Glenn Kirkwood says the new varieties have all grown “incredibly well” on the fertile soil, however it remains to be seen how the fruit pans out.

‘FIRB’ screen locks out investors –  David Leyonhjelm:

NEW foreign investment rules for agricultural land purchases will choke farm sales in red tape, says DAVID LEYONHJELM.


I’VE met plenty of farmers my age who are thinking about and planning for the end of their farming days.

Some have succession plans with family members. But many don’t, and their plan is to sell. They’re not sentimental but they have a strong connection with their land, and they know its worth.

They also need to sell at a fair price. They’ve got debts to repay before funding their retirement. After a lifetime of investing in the farm, their superannuation nest egg doesn’t compare with those who have been ‘pay-as-you-go’ employees all their life.

The potential outcome of one who has decided it’s time to sell goes as follows. . .

 


Rural round-up

March 30, 2015

Candid advocate top dairy woman – Sally Rae:

West Coast dairy farmer Katie Milne was recently named Dairy Woman of the Year. She talks to agribusiness reporter Sally Rae. 

Katie Milne is a straight shooter.

So it’s not hard to imagine those attending a meeting on the West Coast, in the early 1990s, took notice when she went along with some concerns about the Resource Management Act’s impact on her ability to farm.

There were a large number of Federated Farmers people there, but they were ”all older fellas with grey hair”. . .

Landcorp’s Carden optimistic despite low half year profit – Allan Barber:

The state owned farmer Landcorp last month reported a substantial drop in both revenue and profit for the six months ended 31 December last year, but CEO Steve Carden is still very positive about future prospects and the importance of Landcorp as a farming business.

In response to a question about the impact of dairy and whether the exposure to it has gone too far, he said he felt the balance was about right at a similar proportion to red meat which had traditionally been the dominant farming type. Dairy represented over half the turnover last year, but in the current year that percentage had fallen to 46%, as evident from the almost $10 million decline in first half year revenue. . .

Synlait releases Interim Report for 2015 financial year:

Synlait Milk has posted a $6.4 million net loss after tax for the first six months to 31 January in the 2015 financial year (FY15).

This result includes after tax unrealised foreign exchange losses of $6.8 million.

The underlying after tax financial performance of $0.4 million for the period was lower than expected and primarily due to delays in the shipment of infant formula and nutraceutical products.

A one-off, after tax product mix benefit of $7.5 million in the first half of FY14, combined with increased depreciation and interest costs from the commissioning of three growth initiatives projects in the second half of FY14, are the primary reasons for a $11.7 million variation between the underlying FY15 interim result of $0.4 million and the FY14 interim result of $12.1 million net profit after tax. . .

New kiwifruit variety revives industry – Jenna Lynch:

Kiwifruit growers are celebrating a bumper export season, with fruit volumes at their highest since the outbreak of the vine-killing disease Psa in 2010.

The disease devastated New Zealand’s kiwifruit industry, costing growers millions.

But a new variety has helped bring the industry back from the brink of collapse.

It’s the industry king, its green brother fetching a fraction of its price, but after years of small crop yield due to Psa the gold kiwifruit is back. . .

Kiwifruit industry set for strong growth in 2015 season:

The first kiwifruit charter ship for 2015 is set to sail from the Port of Tauranga tomorrow (Sunday 28 March), marking the start of a season promising strong growth with volumes back to pre-Psa levels this season, Zespri’s Chief Executive Lain Jager says.

The 2015 harvest began in orchards in Gisborne, Katikati and Te Puke last week, with the first charter shipments of gold kiwifruit leaving on the MV Atlantic Erica today for Zespri’s long-standing premium market of Japan. Zespri has chartered 55 refrigerated ships – including five ships direct to Shanghai – and 8,000 refrigerated containers to carry the 2015 Zespri harvest to 54 countries around the world. . .

Swedes farmer survey results coming in May:

The results of an in-depth farmer survey carried out to help understand the factors behind the toxic swedes issues that hit Southland dairy herds last year are expected to be available by the end of May.

DairyNZ’s Southland regional leader Richard Kyte says DairyNZ interviewed 134 affected and unaffected farmers and 34 graziers last year as part of its study into why many cows became ill after feeding on swedes last season. The detailed interviews followed a general short survey of all dairy farmers that generated more than 400 replies. Analysis of all the survey data is now nearly complete.

“We interviewed farmers across the region to help us understand whether farm management practices may have been a contributing factor. We had some delays in getting the data from the field as farmers got busy just as we started approaching them for information. Until all this analysis is complete, we won’t know if we need to gather more background information. We are expecting to have the results of all this work released to farmers from around mid to late May,” he says. . .

 

Consultation on Campylobacter performance targets open:

The Ministry for Primary Industries (MPI) is asking for feedback on a range of proposed options for testing of Campylobacter in poultry.

The consultation considers the need for any change to Campylobacter performance targets – contamination limits poultry processors must meet as part of MPI’s routine testing for Campylobacter in broiler chickens.

Paul Dansted, MPI’s Acting Director Systems Audit, Assurance and Monitoring, says that while there have been significant improvements in the control of Campylobacter since performance targets were introduced, it’s important they are continually reviewed. . .

 


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