Rural round-up

March 18, 2019

Dairy industry riding to rescue as property boom economy falters – Liam Dann:

It looks like New Zealand’s dairy sector is riding to the economic rescue – again.

Given the aspirations we have to transform and diversify the economy, that’s almost a bit disappointing.

But right now I’ll take it – and so should the Government. . . 

Shania effect swallows farmland:

It is called the Shania effect, named after the Canadian singer-songwriter who in 2004 with her then husband Mutt Lange, paid $21.5 million for Motatapu and Mt Soho Stations in Otago’s lakes district.

Land Squeeze Dinkus 1The marriage subsequently split and Lange kept ownership of the properties before adding Glencoe and Coronet Peak Stations, taking his holding to more than 53,000ha of pastoral land from Glendhu Bay near Wanaka to Coronet Peak near Queenstown.

He later invested heavily in environmentally sympathetic development that removed reliance on livestock farming.

That included spending $1.6 million over three years controlling wilding pines, weeds and pests, planting river margins and fencing waterways and sensitive shrublands. .

Rabobank head strongly linked with land, South – Sally Rae:

Rabobank New Zealand chief executive Todd Charteris has always had a connection with farming – and the South.

While not choosing to pursue a career in hands-on farming, the way it worked out meant he had that “absolute connection” and focus on agriculture, he said during a visit to Dunedin last week.

He might not get back to the South that often but when he did get the opportunity to drive through his old haunts, it was a reminder of what it was “all about”, he said.

Born in Tapanui, where his father was a stock agent, Mr Charteris grew up in West Otago, South Otago and Southland. . . 

Raukumara Conservation Park, the dying forest – Michael Neilson:

A bare forest floor, erosion, slips and no birdsong explain the state of the once-flourishing Raukumara Conservation Park. And experts say there might be less than 10 years to save it. Michael Neilson reports.

Standing in the middle of the Raukumara Conservation Park should be one of those picture perfect, 100% Pure New Zealand moments.

The birdsong should be deafening, rich with raucous kākā, chirping tūī and kōkako.

The forest floor should be lush, with new trees rising up and filling the gaps in the canopy. . . 

We’re doing it wrong – Alan Williams:

Exporters are sitting on a gold mine but failing to sell their provenance story overseas, British grocery expert Rob Ward says.

They need to cash in on sensory perception and the Love Triangle.

“New Zealand is incredibly good at what it does but not enough people know about it,” Ward, a United Kingdom grocery data and analytics expert has been told people at Agri-food Week in Palmerston North.

Lamb is a prime example of how the NZ message can be improved. . . 

Rise of women in agriculture an encouraging sign – Robbie Sefton:

Of all the various ways that humanity has devised for splitting itself into tribes, gender tribes are surely the most pointless. 

Men and women are undoubtedly capable of widely differing viewpoints, and are perfectly capable of exasperating each other, but we are literally nothing without each other.

That’s why it’s been wonderfully encouraging to watch the rise of women in agriculture over the past few decades. 

What was once an industry wholly associated with blokes (at least on the surface) is rapidly becoming one that, in terms of participation, is pretty gender-equal. . . 


Rural round-up

August 3, 2018

Trump farm policy is pure socialism – Liam Dann:

How embarrassing for US farmers. How embarrassing for Republican believers in small government.

Donald Trump’s administration this week unveiled US$12 billion worth of farm subsidies.

In doing so it took a bold leap back to the days of socialist inefficiency that New Zealand has pushed back against for more than 30 years. . .

Feds: unfair to short-change South Canterbury on representation:

As Environment Canterbury’s largest constituency by far, covering an area with significant water quality and quantity issues, South Canterbury should not be short-changed on its number of councillors, Federated Farmers says.

South Canterbury deserves to be represented around the ECan table by two councillors not just one, the three Canterbury provinces of Federated Farmers have said in submissions on the ECan representation proposal.

“At more than 18,000 square kilometres, the South Canterbury is one third again the size of the two other rural constituencies,” Federated Farmers South Canterbury President Jason Grant says. . .

High calibre candidates for High Country Advisory Group

The Chief Executive of Land Information New Zealand (LINZ) today announced the members of the new South Island High Country Advisory Group.

Andrew Crisp says he was delighted with the number of applications and was pleased at the value so many people saw in working together with government through the group.

“In just four weeks we had 33 applications, demonstrating how passionately people feel about this iconic area,” says Mr Crisp. . .

Warning over potentially infectious bacteria carried by cattle – Katie Doyle:

Taranaki District Health Board is urging rural communities to be on the alert for bacteria carried in by cattle that can be passed on to humans.

Verotoxin-producing E coli is a bacteria carried in the intestines of cattle, which when passed onto children can cause severe gastroenteritis.

DHB medical officer of health Jonathan Jarman said children on farms were at a high risk of catching the disease, with nearly half of cases ending up in hospital. . . 

Sustainability attributes set to play increasing role in Chinese food choices – NZ hort industry informed:

New Zealand’s horticultural sector will need to keep a close eye on the role sustainability attributes play in the purchasing decisions of Chinese consumers if it is to maximise returns from the rapidly-growing Chinese fruit and vegetable market, according to Rabobank’s senior horticultural analyst Hayden Higgins.

Speaking at the Horticulture New Zealand Conference in Christchurch last week, Mr Higgins said, while food safety, quality and nutrition credentials were currently the most significant factors influencing Chinese consumers’ food purchasing decisions, awareness of other product characteristics, including sustainability attributes, such as water usage and emissions, was growing. . .

 

OIO approves land sale near Arthur’s Pass to Czech businessman

The Overseas Investment Office has approved the sale of more than 40,000 hectares of South Island high country land to a Czech businessman, Lukas Travnicek, who has permanent New Zealand residence.

The land in question is Mount White Station, a 120-year-old sheep and beef station near Arthur’s Pass.

It includes 39,337 hectares of Crown pastoral lease and 678 hectares of freehold land in Bealey. . .

Craggy Range Vineyards gets green light to expand from OIO – Rebecca Howard:

(BusinessDesk) – Craggy Range Vineyards has been given a green light to buy 132 hectares of land in the Wairarapa for $3.6 million.

The purchase will let the Australian-owned company expand its existing Martinborough vineyard, which is about a kilometre away, the Overseas Investment Office said. . .

Onerahi forest garden celebrates three years of feeding the community :

It started out as a messy bit of land behind Whangārei Airport.

Now the Wai Ariki Food Forest Onerahi-rahi, on the corner of Whimp Ave and Church St, Onerahi, has celebrated its third birthday after countless volunteer hours has it producing fruit and veges for the community.

Wendy Giffin, from the forest garden, said Saturday’s birthday celebrations were an indication of how far the garden has come in the three years since it started as a community vision. . .

Lewis Road cuts plastic production for milk bottles:

Premium dairy brand Lewis Road Creamery has announced it will move to recycled (rPET) bottles for its milk range from the end of August as part of its commitment to the New Zealand Packaging Declaration, committing to 100 percent of its packaging being recyclable, reusable or compostable by 2025 or earlier.

Lewis Road is the first milk producer in the country to change to rPET bottles which are made from entirely recycled plastic. This means no new plastic is created to produce the bottles, which can then be continuously recycled. . .

 

To feed the world sustainably, repair the soil – David R. Montgomery:

New technologies and genetically modified crops are usually invoked as the key to feeding the world’s growing population. But a widely overlooked opportunity lies in reversing the soil degradation that has already taken something like a third of global farmland out of production. Simple changes in conventional farming practices offer opportunities to advance humanity’s most neglected natural infrastructure project—returning health to the soil that grows our food.

It is critical we do so. In 2015, a U.N. Food and Agricultural Organization report concluded that ongoing soil degradation reduces global harvests by a third of a percent each year under conventional farming practices. In some parts of the U.S. I’ve visited, the rich black topsoil that settlers once plowed is gone, eroded away leaving farmers tilling anemic subsoil. . .


Rural round-up

June 5, 2018

Cold facts don’t diminish need to look after farmers – Liam Dann:

Economists and business writers tread a fine line between staying true to the data and the reality of the experience suffered (or enjoyed) by individuals.

There is a risk of coming across cold and robotic.

Take the Mycoplasma bovis outbreak.

I felt a little cold hearted this week pointing out the scale of the cattle cull is not statistically large. . .

Not worth the stress farmer says – Sally Rae:

Mycoplasma bovis-affected farmer Kerry Dwyer believes the huge amount of stress placed on farmers through the massive cull of cattle will not be worth the result.

Last Monday, the Government unveiled an $886 million plan to eliminate the disease, rather than undertake long-term management. If successful, New Zealand would be the first country in the world to do so.

The cull, of about 126,000 cattle in addition to the 26,000 well under way, would take place over one to two years.

Mr Dwyer, who voluntarily sent 400 calves to slaughter, said success relied on the premise the Ministry for Primary Industries (MPI) testing regime was accurate and no animals “slip through the net . .

Farmers roast MPI – Annette Scott:

The heat was on Ministry for Primary Industries officials as they sat before 800 farmers at a where-to-from-here Mycoplasma bovis meeting in Ashburton last week.

As the questions and criticism flew from the floor so did the eyebrows rise at the front table that included MPI director-general Martyn Dunne, MPI response veterinary adviser Eve Pleydell and Agriculture Minister Damien O’Connor.

The turnout was indicative of the concern the district stands to lose 25% of its dairy herd. . .

Demand for seedlings stuns mānuka farming group – Esther Taunton:

An offer of free mānuka seedlings has been so popular, the scheme is almost 200 per cent oversubscribed. 

Mānuka Farming New Zealand (MFNZ) offered 1.8 million seedlings to landowners, enough to cover about 1635 hectares across New Zealand.  Within a week, 70 applications were received, accounting for 3.6 million seedlings.  . .

All the cowshed is a stage for singing dairy farmer – Jane Matthews:

Every day Patrick Johnson dresses up for work and sings to a crowd of 750 for about three hours.

But Johnson’s not a musician; his costume is an apron and gumboots and the audience never applaud him – they’re cows.

Johnson is a South Taranaki dairy farmer who recently started recording himself singing while he was milking cows and posting a video on the internet everyday in an attempt to make fellow farmers smile. . . 

 

Taking the lead on water – Sally Rae:

Irrigation New Zealand has been involved in the development of Good Farming Practice: Action Plan for Water Quality which will be launched tomorrow. Sally Rae talks to Irrigation NZ chief executive Andrew Curtis about water — and his varied career.

Andrew Curtis has no interest in “getting back to old Blighty”.

The affable English-born chief executive of Irrigation New Zealand (INZ) is happily settled in Canterbury with his family.

Their lifestyle block is stocked with Belted Galloway cattle and they consider New Zealand “home. . .

We have a responsibility to help our farmers says chef and restauranteur Matt Moran – Matt Moran:

I’m proud to say that I’m a fourth-generation farmer. I had a rural upbringing on a cattle and dairy farm near Tamworth and still have a commercial farm in the NSW Central Tablelands.

Throughout my childhood we, like most farmers, hit both bad times and good and I thank this rural upbringing for instilling in me a work ethic and a certain toughness. It also gave me a genuine understanding of just how hard farmers work to supply us with the food we rely on at every meal and the quality we demand.

With all the discussion these days about food and sustainability, many of our farmers are struggling to be sustainable in even the most basic sense of making ends meet. . . 

 

 

 


Record primary produce exports

June 10, 2014

Primary Industries Minister Nathan Guy says new figures show primary sector exports will reach record levels of $37.7b over the last year – around $1.3b more than previously forecast.

The Ministry for Primary Industries today released Situation and Outlook for Primary Industries 2014 (SOPI 2014) ­- an annual publication that provides a snapshot and forecast for our major primary sectors over the next four years.

“SOPI 2014 reveals export prices increased across most sectors for the year ending June 2014. Both dairy and forestry sectors stood out with good increases in both price and production,” says Mr Guy.

“Dairy now accounts for 46 percent of total primary industry export value and 35 percent of total New Zealand merchandise export value. High price levels for dairy were underpinned by robust demand from China, which remains an important market for dairy, meat and wool, seafood and logs.

“Meat and wool exports have broken $8 billion, which is fantastic considering last year’s drought. Exports are expected to increase by around 22 percent for the five years to 2018.  

“Demand for logs from China is driving the growth of the forestry sector, with export value reaching $5.1 billion at the end of June 2014. Domestic demand for sawn timber is expected to increase with the Auckland and Christchurch housing markets growing.

“SOPI also forecasts horticulture export revenues to surpass $4 billion in 2016, a major milestone for the sector. Last week’s National Horticulture Fieldays in Hawke’s Bay was a great showcase of the potential of this exciting industry.

“Export earnings for the New Zealand seafood industry are expected to increase to $1.64 billion in 2018, with prices likely to remain high due to strong demand from China, Australia, US and the EU.

“This results are helped by programmes such as the Primary Growth Partnership (PGP), Sustainable Farming Fund, and the Irrigation Acceleration Fund which all deliver long-term value to the sector, and the New Zealand economy. 

“This report makes great reading for New Zealand’s primary industries as it enters the 2014/15 year, and I’m anticipating positive vibes at this week’s Mystery Creek National Fieldays,” says Mr Guy.

The full report is here.

While the report is forecasting a bright future for primary produce, Liam Dann is arguing that the dip in the dairy boom is a warning to diversify:

How worried should we be about the slump in global dairy prices? After all these years, New Zealand is still a giant grass-processing factory and milk remains the lifeblood of our economy.

In fact, dairy products now account for nearly 30 per cent of the country’s merchandise exports, by value. That figure was closer to 20 per cent when I first started covering the sector more than a decade ago.

Dairy exports are on track to generate a record return in excess of $17 billion this year – about $4 billion more than they delivered on average across the previous three years.

That big return is due to a historically unprecedented spike in dairy prices that peaked in February.

So the 23 per cent fall in dairy prices since then is certainly significant. It has prompted Fonterra to lower its payout forecast for the 2014/15 season and is finally starting to put downward pressure on the dollar. . . .

Last season’s payout was a record, this season’s was expected to be lower but the forecast is still the fourth highest.

The lowering dollar in response is how it’s supposed to work.

Dairy may be ahead of the curve in terms of New Zealand commodity export prices. It seems likely that a boom in log prices will peak this year. Other commodities like beef and lamb are also contributing to a record balance of payments.

If they start to fall too, that will add to the downward pressure. But really, for the bloke on the Wall Street trading desk who keeps an eye on this part of the world, the New Zealand story is all about dairy.

To put the other sectors in perspective, the $4 billion fluctuation in dairy returns between 2013 and 2014 is likely to be in excess of the total return for all lamb, mutton and wool exports combined last year.

So much for New Zealand living off the sheep’s back.

Dairy prices are also where the attentions of the Reserve Bank are fixed.

The bank’s economists won’t be panicking just yet. They will be keeping the current prices firmly in context. The giddy heights that dairy prices reached early this year mean that even now they are sitting at historically high levels.

I can still recall the excitement in the dairy sector when Fonterra announced its first $7 payout – the figure Fonterra is picking for the 2014/15 season. That was a record and reflected the peak of the dairy price cycle in 2005.

If the price plateaus at that level then that would be a pretty sweet bottom end to the cycle.

There are good reasons – most of them to do with Chinese demand – why the global dairy price now has a much higher top and bottom than it had a decade ago.

But the trend will become concerning if it continues, and China is the great unknown.

Where the current slowdown in Chinese economic growth settles is anyone’s guess. If there were to be a more serious and uncontrolled financial economic crisis in China then things could get ugly fast.

Meanwhile, good grass growing conditions and continued expansion of dairying in the South Island are driving increased production volumes which will prop up overall export returns to New Zealand.

A major drought next summer would still have a greater impact on New Zealand’s economic outlook than the current dairy price.

That is why irrigation is so important. It doesn’t replace rain but it insures against too little.

What a slowdown in the dairy boom does do is remind us that we should maintain a firm focus on diversifying and expanding the economy into new and less commodity-focused areas.

Ironically, chief among those is the dairy sector itself. Fonterra is well aware that lower prices for milk powder will provide more opportunities to drive the brands side of the business.

Turning more New Zealand milk powder into yoghurt and baby formula before we export it suddenly makes even more sense.

Meanwhile, that $4 billion of extra dairy cash from the 2013/14 season still has to wash through the economy and should buoy domestic growth for a while yet.

Our “rock star” label won’t stack up if our growth is all pinned to dairy and the Christchurch rebuild. Both of these factors have been timely in getting New Zealand ahead of the recovery curve in comparison with other nations – notably Australia.

The trick is to have the rest of the economy firing efficiently when we come out the other side.

A diversified economy will be a stronger one.

But our climate and soils give us a natural advantage when it comes to producing protein for which there’s growing world demand.

I’m pleased to see that Dann isn’t downplaying that and isn’t suggest we do less farming, but that other parts of the economy step up to play their parts in New Zealand’s success.

 


What’s he offering?

March 4, 2014

Liam Dann asks a very good question:

What is David Cunliffe offering? A dramatic experiment with a winning formula? A worrying fix for something that isn’t broken?

He’s referring to Labour’s determination to follow Green Party policy to meddle with the Reserve Bank.

Labour’s embrace of Green Party policy to reform the Reserve Bank Act is a big stumbling block for the party if it wants mainstream acceptance from the business community.

It surely gains the party few fresh votes from the wide pool of mainstream voters who find monetary policy debate arcane.

Yet it makes Labour almost impossible to endorse for many of the nation’s most powerful and influential business leaders.

The monetary policy reformists are full of ideas about the magic a broader definition of the Reserve Bank Act might achieve. But they ignore the extent to which having one target – inflation – has worked. And just how fundamental controlling inflation is to creating a stable economy on which growth can be built.

Why, when the Act has just seen us through such an enormous global downturn so efficiently, would you change it. In the hope it might bring the dollar down?

Well, if you damage the economy the dollar will certainly fall. But it seems a brutal path to take.

And why, if you were going to make changes, would you loosen the shackles during the growth phase of the economic cycle – just when inflation starts to become a serious risk.

We should be grateful we don’t have to make radical changes to our economy. We’ve come through the downturn well, and while National can take some credit for steering the ship, so too can the last Labour Government for the healthy growth it oversaw.

Radical change is for those nations that have run out of options. Let’s leave it to the Greeks.

National has generally trod a cautious path, some would say too cautious. But it’s getting results.

The economy is growing, and other economic indicators like business confidence, investment intentions and employment are positive.

All of this would be at risk if inflation is let loose with the inevitable steep increase in interest rates that would follow.

In 2008, when Labour was last in power interest rates were about 11%.

Now they’re about half that and while they’re expected to rise providing inflation is kept under control, they shouldn’t get back to double figures.

But if a Labour/Green government starts meddling with the RBA, inflation will surge and interest rates will  too with the high cost that imposes on business and households.

If people are concerned about the affordability of houses and farms now, how much worse will it be when interest rates are twice the current rate, or higher?

That’s what Cunliffe is offering.


It’s up to business

July 29, 2012

Anyone who has taken a modicum of interest in politics in the last four years should be in no doubt about the government’s economic plans.

They might not like it but they should understand it.

But a majority of respondents to the Herald’s mood of the boardroom survey say the government has failed to articulate its plan.

Just how much does a political party have to do to get its message across?

Almost every speech from Prime Minister John Key, Finance Minister Bill English, and any other minister who mentions the economy spell out the plan quite clearly.

Perhaps those who haven’t got the message should follow this advice:

Can’t understand why the Business leaders aren’t aware of the present National Governments long term PLANS. I have certainly had no trouble finding and understanding where National wishes to position NZ, such that the sons and daughters of not only Business Leaders, but all NZ’ers will have a future in NZ.This is a vastly different future to that which Parker is planning for when he rolls Shearer next year, a possibility, regardless of the recent labour conference change of rules.
The information is out there, if one looks; BUT you are unlikely to find it headlined in the written, or voice media. They are too Socialist.
Perhaps the Business Leaders should step out of the Cocktail circuit, and visit their local National Party office for a briefing; or if they wish have both, hold the Chardonnay glass in the left hand, and lookup the National website using the Right hand.

However, in spite of what respondents to the Herald survey said, a BusinessNZ survey show its members do understand, and support, what the government is doing:

BusinessNZ chief executive Phil O’Reilly said the “standard response” that might otherwise be expected from business was that the Government should cut spending. But the results from his organisation’s survey were consistent with what members were telling him.

“They are supportive of this kind of track the Government’s taking. You don’t want to get so much austerity that you push the economy into recession – at the same time you don’t want them to just blast money everywhere in the hope of getting the economy moving faster because a lot of it will be low-quality spend.” . . .

O’Reilly said the SME Snapshot results largely reflected what business people told him every day. That included the widely held view among members that they generally supported the direction of the Government’s “relatively conservative economic reform programme”.

Building business competitiveness, reducing Government spending as a proportion of GDP, improving New Zealand’s international situation, and building innovation and skills were all regarded as important.

“There will be some in the business community that will have concerns about the pace and execution of government policy, but they broadly support it.

Regardless of what businesses know and understand about government’s plans, the good ones treat governments like the weather, enjoy it when it’s good and do all they can in spite of it when it’s not.

The businesses that get on with their businesses, concentrating on what they can control, are the ones with the best chance of success which will be good not just for them but for the wider economy.

This point is made by Liam Dann:

. . . In reality business knows that there is little point in looking to Government for any major new spending in the next few years.

So what next? Where does all this leave business in 2012? Where will the circuit breakers for this economic cycle come from?

We are going to need strong and innovative leadership from the business community to turn the tide. And we are going to have to see some of that dogged optimism translate into business spending.

Teasing the public out of its recessionary mindset will be a slow process but it is a chicken and egg scenario. Business can lead the way by being proactive and trying new things. It is never easy because there are many reasons why we can’t afford to do something. But if the alternative is slowing sinking in the mire of a stagnant economy – can we afford not to?

Governments come and governments go, so do recessions.

The global financial crisis one isn’t going anywhere fast and it will have an impact here.

But where there is crisis there is also opportunity and businesses which realise it’s up to them and do what they can about it will help turn the tide.


Cows worth far more than hobbits

November 7, 2010

The dairy industry will be the focus of attention this week with 1400 delegates from 64 countries meeting in Auckland for the World Dairy Summit.

In preparation for that Fonterra has written an open letter to the country explaining the company’s commitment to sustainability:

As New Zealand’s home-grown, global co-operative, Fonterra is proud to welcome delegates to New Zealand. We bring in one in every four export dollars to New Zealand and we seek to make a lasting contribution to New Zealand and to the communities where we live and work.

We take great pride in being a pasture-based dairy producer and see this as a lasting advantage in our markets, in line with our vision of being a natural source of dairy nutrition. Like all food companies around the world we want to achieve the right balance between social, environmental and economic sustainability.

Over the past nine years, we have made steady gains in our environmental performance. We are committed to embedding sustainability into everything we do.

This means Fonterra and our farmers face complex choices including sources of feed, environmental impacts and animal health issues as we work hard to protect our competitive advantage internationally. To compete, we will always need to be a low cost and efficient producer and to deliver for our shareholders. But we will strive to do so in ways that meet our social and environmental responsibilities, and we will always respect the animals that are the source of our product.

Our commitment is to work together with our farmers, staff, customers, government, local authorities, iwi and the community to ensure good practice is the only practice. We all have a stake in building a sustainable dairy industry for the future.

We have made progress, but we are the first to accept that we still have a long way to go. We acknowledge that we need to intensify our efforts to continuously improve our performance. We believe sustainability will be one of the defining issues for the success of Fonterra and for the global dairy industry. We are focused on doing what’s right, not just on a ‘compliance – only’ approach, but one that excels at innovations which accelerate our ability to do more with less on farms, in our factories, on transport, and for our customers. . .

Poor practice – deliberate or accidental – by the company or its shareholders makes headlines. The on-going commitment by them to sustainability goes unnoticed.

However, it’s value to the country is being taken seriously:

First the Listener editorial made the connection:

. . . the most important money-earning mammals in the Waikato meadows are not hobbits but friesians.

Liam Dann makes a similar  point:

The budget for the two Hobbit films has been reported at a pretty epic $650 million.

Not all of that will be spent here, of course, a lot of it will be used to market the films.

But even if we see half a billion, the figure will be dwarfed by the returns generated from our dairy industry.

At levels confirmed yesterday, Fonterra’s payout forecasts for this season would see $9.11 billion injected into the economy in 2011.

That’s $500 million more than the season before and some $2.5 billion more than the season before that. . .

. . .  It was a drought and a commodity slump that led us into the economic downturn and it looks set to be the weather and a commodity boom that will lead us out.

Dairying might not be as sexy as film making but it earns far more money.

Fonterra and its shareholders are committed to ensuring its economic performance is matched by good environmental practices.


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