PSA could have come in pollen


MAF has commissioned an independent review of its  its importing rules as part of ongoing work into how the kiwifruit vine disease Psa entered New Zealand.

Director General Wayne McNee says the review is a sensible step to ensure that MAF’s systems are as good as they can be and will be welcomed by the kiwifruit industry which had requested such an inquiry.

The review follows a series of investigations that MAF has undertaken since the outbreak of Psa in Bay of Plenty orchards.

He says in order to help the kiwifruit industry manage the disease’s spread, MAF has looked into a number of possible ways the bacterium could have entered New Zealand and has produced a report summarising the results of those investigations.

“The report does not identify a definite means of introduction, but does find there are a number of potential pathways, including people, equipment, and pollen.

It wasn’t known that pollen could carry Psa when rules were changed in 2007 to allow it to be imported.

MAF’s importing rules at the time of the Psa outbreak permitted imports of overseas kiwifruit pollen by the kiwifruit industry and others under strict conditions.

Any imported pollen had to have been sourced from unopened flowers to avoid any issues of bacterial contamination. At the time of granting pollen import permits, there was no internationally published science that indicated pollen was able to spread Psa.

“Given the new information that has emerged on the potential for pollen to spread the disease, I want to review our processes for assessing risk, and incorporating changing science. We still cannot categorically say that Psa in pollen can infect healthy vines – there’s more work to be done to prove that – so we still cannot definitively say that pollen was the way that Psa entered New Zealand,” Mr McNee says.

Imports of pollen were suspended at the time of the Psa outbreak.

The impact of PSA on the kiwifruit industry is as devastating as foot and mouth disease would be to livestock farming.

It is a reminder of how vulnerable agriculture and horticulture are and the importance of tough biosecurity rules.

Working out how Psa got here won’t help those affected but it could help prevent other incursions of pests and diseases.

Feds urge NZers to be biosecurity 1st XV


Federated farmers is urging us all to be the biosecurity 1st XV:

“We welcome Rugby World Cup visitors to see, taste and wear some of the best food and fibre in the world,” says Dr William Rolleston, Federated Farmers Vice-President and the Federation’s Biosecurity spokesperson.

“New Zealand is unique in that we are relatively free of major pests and diseases affecting agriculture in other parts of the world. While we all wish to see visitors enter our country quickly to enjoy our great Kiwi hospitality, biosecurity is one thing that must not be compromised.

“The office of the Minister of Biosecurity has assured Federated Farmers that biosecurity standards are not being relaxed due to the world cup. The Rugby World Cup will be a great boon for the economy but it would be a tragedy, if any gain was wiped out by a major incursion.

“That’s a message the Government fully understands, but we also need New Zealand’s public and businesses in the biosecurity team.

“Many visitors will be staying with friends, family or in paid-for accommodation. We really need the public, from hotel cleaners to friends and family to play the role of fullback. Each country has a list of its worst pests and diseases; they are the players we don’t want in New Zealand for Rugby World Cup 2011.

Many visitors, and far too many New Zealanders, don’t understand the importance of our rigorous biosecurity regulations and checks.

People used to travelling between countries where the border is nothing more than a line on a map aren’t used to the requirements to clean shoes and leave behind food, plants and other material which might harbour unwelcome visitors.

Our island status offers good protection from incursions by pests and diseases which could threaten export industries but unwitting visitors pose a threat which makes Feds’ warning, and tortured rugby analogy, very timely.

The message has added resonance as it coincides with the news a Fielding man has been prosecuted for keeping a snake.

Nathan Bush, 38, pleaded guilty to acquiring a snake in the Palmerston North District Court. He was sentenced to four months imprisonment.

In sentencing Bush, Judge Callander stressed that New Zealand has a snake-free environment and it is important to keep snakes out.

He intended the sentence to denounce Bush’s behaviour and also act as a deterrent.

The attraction of snakes escapes me and I can’t fathom why anyone would want to have one as a pet when it’s illegal.

Biosecurity month reminder of need for vigilence


An overseas visitor was amused about how concerned border control staff were about dirt on his shoes.

“I thought New Zealanders must have a very high standard of dress,” he said.

We explained that they weren’t concerend about his satorial standards but the risk of introducing pests or diseases which could endanger native flora and fauna and primary produce.

That message isn’t clear to all visitors, or locals, so  Biosecurity Month  provides a timely reminder of the need for eternal vigilence:

From an emperor penguin on Peka Peka beach to the kiwifruit vine disease Psa and the alga didymo which congests waterways, it’s always possible that a new plant, animal or microbe will arrive in New Zealand.

The New Zealand Biosecurity Institute has designated July as “Biosecurity month” to raise awareness of the work done by those involved in protecting New Zealand’s natural environment from pests and diseases.

Peter Thomson, MAF Acting Deputy Director-General says collaboration is key.

“New Zealand’s biosecurity system is designed to balance the careful management of risks, with protecting our ability to trade and travel internationally,” says Peter.

“MAF leads a biosecurity system that operates on three fronts: working overseas to stop travellers and importers from bringing pests here; working at the border to identify and eliminate pests that do arrive; and working in New Zealand to find, manage or eliminate pests that have established here.”

“Collaboration is the key to keeping our country safe from incursions, and MAF works in partnership with other organisations with an interest in biosecurity, such as the Department of Conservation, regional councils, affected industry and iwi.

“But all New Zealanders have a role to play.

“For example: farmers need to make sure they buy disease-free stock; boaties need to check, clean and dry their gear between waterways; and for anyone who finds something unusual, it means calling MAF to report it.”

There is more information at

Good news x 3


1.  After tax wages outstripped prices in march year:

After-tax wages continue to rise faster than prices, Finance Minister Bill English says.

The real after-tax average wage increased 2.5 per cent in the year to March 2011, after accounting for all consumer price increases including food prices and the one-off rise in GST last October.

“Everyone’s circumstances are different, and we appreciate things remain challenging for many New Zealanders. But it’s encouraging to see that, on average, take-home wages continue to rise faster than prices,” Mr English told Parliament today.

“In the latest March year, the after-tax average wage grew 7.1 per cent in nominal terms and 2.5 per cent after adjusting for inflation.

“This means that since September 2008, after-tax wages have increased 17 per cent in nominal terms and 10 per cent after adjusting for inflation.

“That compares with real growth of just 4 per cent over the entire nine years to September 2008.”

“To put these figures into perspective, New Zealand’s 2.5 per cent increase in inflation-adjusted after-tax wages in the latest year compares with just 0.6 per cent real growth in Australia.”

The figures use data on average weekly ordinary time earnings from Statistics New Zealand’s Quarterly Employment Survey. This is the official series used to calculate the wage floor for New Zealand Superannuation. Comparable data is drawn from the Australian Bureau of Statistics.

“This Government is committed to helping New Zealanders get ahead, enjoy higher incomes and lower interest rates for longer,” Mr English says. “This will require continuing change, year after year, to put the economy on a more competitive footing.”

2. Outlook for economy continues to improve:

The best terms of trade since the early 1970s and growing business confidence are bringing a positive outlook for the New Zealand economy, according to the BusinessNZ Planning Forecast for the June quarter 2011.

The BusinessNZ Planning Forecast incorporates BusinessNZ’s Economic Conditions Index (ECI) which tracks 33 indicators, including GDP, export volumes, commodity prices and inflation, debt and confidence figures.

The ECI for the June quarter is 22. This is up 10 from the previous quarter and up 10 from a year ago.

Key factors include the continuing rise in world commodity prices and continued strong growth in New Zealand’s largest trading partners Australia and China.

Projections of 3-4% growth for 2012 and 2013 appear feasible.

3. MAF expects good returns for primary produce to continue in the medium term:

MAF’s Situation and Outlook for New Zealand Agriculture  and Forestry says:

New Zealand exporters are receiving high prices for logs, wool, lamb, timber, beef and dairy products as the rebounding global economy drives demand for commodities.

With the exception of horticulture, these rises are more broadly based than the 2008 rise, which mainly affected dairy prices.

Short-term supply disruptions such as droughts and floods in various parts of the world are a significant factor supporting recent agricultural price increases.

At the same time, the strength of demand coming through from emerging markets, the recovery in many developed economies, and continuing demand for agricultural resources for biofuel production has led
the Ministry of Agriculture and Forestry to revise upwards its view of medium-term international agricultural prices.

The relative strength in the New Zealand dollar has seen only a portion of these foreign currency price gains passed through to New Zealand farmers and foresters. The strong New Zealand dollar has, however, also reduced the
impact of price rises in imports, especially fuel and fertiliser.

Beyond 2012, steady production growth in dairy, forestry, wine and kiwifruit, together with an assumed depreciation in the New Zealand dollar, leads to strong forecast growth in export revenues.

There is light at the end of the tunnel.

It isn’t a train coming towards us, it’s daylight and a sunny day at that.

Rural round-up


MAF director-general plans to be visible – Neal Wallace interviews Wayne McNee:

The new director-general of the Ministry of Agriculture and Forestry is looking forward to re-acquainting himself with those who he says work in “the engine room of the economy”.

Wayne McNee, who was raised on a North Otago farm, started his new position last Monday, and said he did not underestimate the importance of the role to New Zealanders and the New Zealand economy. . .

 Telford Polytech to be Lincoln run:

While it’s been described as a merger, the assets of Telford Polytechnic such as buildings, other improvements and staff contracts, will be transferred to Lincoln University without any cash changing hands.

The Telford brand will continue to be recognised, says Lincoln University vice-chancellor Professor Roger Field, with Telford becoming a division of the university and its 880 hectare Telford farm in South Otago remaining in trust ownership and management by the farm training institute. . .

Farm sales hit by doubt over OIO hurdles:

Uncertainty over foreign land deals is thought to be weighing heavily on efforts to sell a group of dairy farms in the central North Island.

Twenty-nine “designer” dairy farms created by Carter Holt Harvey around Tokoroa have been sitting on the market since early this year.

The company initially hoped to sell them for $224.5 million.

But a real estate agent involved in the marketing effort says interested parties are waiting for the outcome of the Crafar farms deal to set the tone on foreign farm ownership. . .

Wheat growers call in Comerce Commission:

New Zealand grain growers are appealing to the Commerce Commission and other government agencies amid fears large multinationals are achieving a dominant position in the local market and limiting access to markets for local produce.

“Our concerns are not solely regarding [Canadian company] Viterra but a general loss of transparency of grain markets and vertical integration across several multinationals operating in New Zealand,” said David Clark, chairman of the Mid Canterbury Grain and Seed Section of Federated Farmers. . .

Lamb stance comes up short: Jon Morgan writes:

When I asked two of the biggest meat companies, Silver Fern and Alliance, what effect they expected a 2.8 million plunge in lamb numbers to have on them, they said they were insouciant, which is a French word meaning they couldn’t care less.

I don’t believe this for one moment. Calling on my basic French again, they are talking merde du boeuf, or in patois (with appropriate gesticulation) – “conneries!”.

I don’t hold it against them. You would hardly expect them to reveal to their competitors their true concerns. But they must be at least a trifle uneasy. . .

It all bodes well for hazelnuts:

The seventh annual New Zealand Gourmet Oil Competition was held in conjunction with the Canterbury A&P Association annual show. The competition, open to New Zealand-produced olive, walnut, avocado and hazelnut oil, attracted more than 40 entries, with the judges awarding 25 medals. . .

New MAF DG from North Otago


The Ministry of Agriculture and Forestry’s new Chief Executive and Director General is Wayne McNee .

He’s been CE of the Ministry of Fisheries for nearly three years and before that was CE of Pharmac.

“In his current role, Mr McNee is responsible for managing New Zealand’s fisheries resources worth approximately $1.6 billion per annum, and employs around 460 staff in 19 offices in New Zealand. . .

. . . In his previous role as Chief Executive of PHARMAC, Mr McNee was responsible for an operating budget of $15 million and approximately 50 staff, and a pharmaceutical budget of almost $1 billion dollars . . .”

He will take up the appointment next month.

The official announcement says he has a Bachelor of Pharmacy and PG Dip in Clinical Pharmacy from the University of Otago and has undertaken general management programmes at Monash, Oxford and Stanford Universities.

It doesn’t also say Wayne comes from North Otago. He grew up in Enfield and went to Waitaki Boys’ High.

PKE brings biosecutiry risk


Federated Farmers has been questioning the biosecurity risk from imports of Palm Kernel Extract  for some time and Rural News reports that risk has now been officially recognised.

Foot and mouth disease could reach New Zealand in palm kernel but steps are finally being taken to close down the pathway, says Federated Farmers.

Biosecurity spokesman John Hartnell says he understands Biosecurity NZ is working with its Australian counterpart to tackle what it now admits is a gap in the current import health standard.

‘There is a big hole in the process and that’s the time the product sits on the ground between when it leaves the crusher and when it is loaded on the boat.

Greenpeace has been campaigning against PKE imports on environmental grounds. The biosecuirty risk is far more serious.

The current import health standard relies on heating during oil extraction, rendering the meal sterile, but meal is often stored before shipment, sometimes on bare earth.

That provides a window for insect infestation and, worse still, contamination with potential foot and mouth disease bearing material such as soil or animal remains, says Hartnell.

That risk might be small but it is not something we can afford to ignore.

The detection of atypical scrapie (also known as Nor 98) in a single sheep’s brain last week almost went unnoticed. MAF was upfront about it, explained how it was detected and the implications of the find, including most importantly that it doesn’t change our scrapie-free status.

Even a false alarm about Foot & Mouth disease would be far more serious. The hoax letter sent in 2005 which said the disease was on Waiheke Island, caused a dip in the dollar and threatened exports.

No matter how cheap PKE is, unless it can be guaranteed foot and mouth free it is too expensive.

Sheep & Beef outlook variable


Sheep and beef farmers had a 10 fold increase in profit last year but MAF’s latest farm monitoring reports suggest the outlook for this year is less positive.

MAF’s Christchurch Natural Resources Team Leader John Greer says the sheep and beef reports released today showed better prices for lamb, sheep and cattle boosted income in the 2008/09 season. However, production was below usual in many parts of the country due to this year’s drought or carryover effects from last year’s.

“Sheep and beef numbers continued to fall last season and the average stocking rate is now nearly one stock unit per hectare lower than it was two years ago,” he says.

“This could be due to changing land use or the series of droughts some farmers have experienced.”

Last season’s better returns were a long time coming, most farms had experienced several years of deficits. Although last season’s income improved most farmers kept a tight rein on spending. Fertiliser was one item reduced in a lot of budgets and this is now well below maintenance levels on most farms. 

“In the coming year, production is expected to recover from the effects of the previous year’s drought; however, farm gate prices are predicted to fall for all products due to the rising exchange rate and reduced demand in some markets.

“As a result, sheep and beef farmers are budgeting to make a cash loss of $18,000 for the 2009/10 season.  This will be challenging for many farmers as farm costs and interest rates recover over the year.

“More positively, improved cash surpluses in the 2008/09 season combined with lower interest rates in 2009/10 could see farmers reduce debt levels and expenditure on interest,” he says.

Demand for lamb in Britain is still high but the weakness of the pound will reduce returns.

Lambing in the South Island has been pretty good but early indications of likely prices aren’t encouraging.

Silver Fern Farms released its Backbone contracts last week offering $3.60 a kilo. Last year we were getting around $4.70 a kilo.

That will mean a decrease of $20 or so per lamb compared with last season which will put a strain on farm budgets.

MAf finds significant issues on some Crafar farms


MAF has found significant animal welfare problems on a number of the 22 Crafar-owned properties it inspected  MAF Director-General Murray Sherwin announced today.

His media release says:

“Over the course of the last week, MAF animal welfare inspectors, assisted by New Zealand Food Safety Authority veterinarians and industry organisations, have visited all Crafar properties. A number of properties were found to have significant animal welfare issues. Action was taken at some others to alleviate immediate problems.

“On the properties where a response was necessary, MAF had issued explicit directions of what is needed to remedy particular problems such as under weight animals with underlying health issues, inadequate feed, overstocking, and lack of shelter for calves. Regular and consistent input from veterinarians and farm consultants has also been instructed and organised.

“MAF and the Crafar farm receivers are working together on remedial activity where necessary and will continue to collaborate and stabilise these properties for the long term.

“Animal welfare is our highest concern and the most important aspect of any investigation is the animals. While on farm inspections have been completed, and some serious animal welfare issues identified investigations are ongoing and evidence is still being gathered. It will take time before specific prosecution decisions are made.

“MAF has been supported in this work by industry groups such as Dairy NZ, Fonterra and Federated Farmers, who are all committed to animal welfare and expediting recovery on Crafar properties.

“From a broader perspective, MAF and industry groups have agreed to work together to better co-ordinate early warning systems to identify potential issues at both a systemic and individual farm level.”

Animal welfare ought to be the first priority on any livestock farm but finding an early warning system to alert authorities to problems where it isn’t won’t be easy.

DairyNZ, Federated Farmers and Fonterra have all been supporting MAF. All are rightly concerned about animal welfare but all are limited in what they can do to monitor individual farms when it’s possible no-one except staff could go near stock for days, and sometimes weeks.

Some of Crafar’s critics have blamed Fonterra and said it should should play a bigger role in protecting stock.  I’m not sure how that would happen when the only regular presence the company has on farms is the tanker driver who arrives, picks up the milk and leaves.

Unless there were cows or calves on or close to the tanker track, drivers wouldn’t see them. Even if they did see stock they might not recognise anything was amiss.

The problems on Crafar Farms aren’t because of the size of the operation by itself. It’s because the business grew too fast without goo systems and processes. But, as I’ve said in previous posts on this issue, the best systems and processes are only as good as the staff who implement them and you get good and bad staff on farms of any size.

You can’t just shut a farm down


One of the questions being asked about the farm where animals were starving to death is why didn’t they shut it down?

You can’t just shut a farm down because that would endanger the stock.

If calving is still underway, cows need to be monitored and looked after; cows which have already calved need to be milked and calves have to be fed.

Another question being asked is why it took MAF three days to react to complaints. They say they don’t operate a 24/7 service which is correct, but they could have asked a vet to go to the farm as soon as the complaints were received.

A third question is why don’t neighbours intervene?

It’s possible that neighbours don’t know what’s happening next door, but in this case one did and it was him/her who reported concerns to MAF.

This is, as DairyNZ chief executive Dr Tim Mackle says, a good demonstration of the farming community’s high awareness of animal welfare standards.

 “Poor management practices are not acceptable. The industry has been working in this area since the late 1980s. We’ve taken an extremely proactive approach in communicating best practice guidelines to farmers, via our consulting officers, the dairy companies, the processing companies, the transport companies and the media. New Zealand’s standards are based on the Animal Welfare Act and our Welfare Code documents and are internationally regarded as world-class,” says Dr Mackle. 

“While we await the outcome of the MAF investigation into the Benneydale farm, DairyNZ would not stand in support of any farmer found to have breached animal welfare standards. It’s bad for the animals, farmers, the industry, and for our country’s image.”

DairyNZ, is the industry good organisation for dairying and it correctly points out that farmers have no excuse for ill-treating animals.

Drought cost helps case for irrigation


The drought from late 2007 to autumn this year cost the New Zealand economy $2.8 billion a MAF report has found.

Agriculture Minister David Carter said the impact shows how important agriculture is to the country.

Federated Farmers president Don Nicolson said this high cost supports the economic case for water storage.

“The negative impact of drought cost billions but the current response is the Community Irrigation Fund’s $5.7 million (excluding GST) in grants over eight years,” says Don Nicolson, President of Federated Farmers.

“It seems ridiculous that when water storage can generate around $8.00 in payback for every dollar invested, it’s not being pushed harder to create jobs and wealth. 

“The prospect of permanent jobs is greater with water storage than say it is with the national cycle way. It headlined Federated Farmers recommendations at the Prime Minister’s Jobs Summit and remains so today.

Our problem isn’t that we don’t have enough water, it’s just we don’t always have it in the right place at the right time.

Storage enables water to be directed to where it’s needed when it’s needed. It also provides opportunities for recreation – fishing, boating, swimming – and environmental enhancement.

Exchange rate woes


Travelling in Europe we might have welcomed a strong New Zealand dollar, but it’s difficult to consider the dollar is high when it takes more than two to buy a euro and if it costs a dollar at home it usually costs a euro here so everything is twice as expensive.

Besides anything we gained while here will be more than cancelled out by the impact of the exchange rate on sales of meat,wool and milk.

The $NZ was at 59 US cents when Fonterra announced its forecast payout for the season. It hit a 10 month high of 66.9 cents this week.

The forecast payout for this season hasn’t changed but MAF economists are prediciting next season’s payout will be lower before recovering a bit in the 2011/12 season.

MAF’s meat future


There’s a brighter future ahead for the sheep meat and beef industry a report into the sector by the Ministry of Agriculture found.

It drew on the views of people in the sector to look at opportunities and challenges in the next 10 to 15 years and concluded:

Despite the obvious challenges that the sector faces over the next 10 to 15 years, this study has identified a general positive slant to people’s perception of the industry’s future. It is clear though that this rosy outlook will not be achieved through inaction or simply “carrying on as normal”.  New Zealand has a comparative advantage across much of the value chain. Leadership, vision and action are required from the sector to ensure this comparative advantage delivers a successful and sustainable industry into the future.


One point everyone who thinks they have a solution for the meat industry overlooks is that it comprises many competing parts.

The processing sector alone includes co-operatives, private companies and public ones. No-one can impose anything on them and too much co-operation between them could risk attracting accusations of collusion.

 Fonterra was held up as a shining example of what the meat industry could aspire to, although I’m not so sure it’s regarded quite so highly now. But milk and meat are very different products.

Dairy farmers have to sign up for a season and their  milk has to be collected every day.

Sheep and beef farmers have more licence and more choice. That gives them a lot of power when there’s a lot of feed but can leave them in trouble in difficult seasons.

There isn’t an easy answer for the sector, especially when a decline in the sheep numbers has led to excess killing capacity.

But those looking for improvements should start by looking back because solutions which didn’t work in the past aren’t likely to work in the future either.

The Bull Pen has a related post on the report.

Community Irrigation Schemes get $562,000 boost


North Otago Irrigation Company has been granted up to $241,500 over four years from MAF’s Community Irrigation Fund.

It will be used to help the development of the second stage in its scheme which pumps water from the Waitaki River.

The first stage brought water to about 8,000 hectares in the Waiareka Valley. The second stage will provide water for another 12,000 hectares and extend the scheme to the Kakanui Valley and Tokarahi district.

MAF has provided $562,000 over four years for five irrigation projects as part of the Community Irrigation Fund (CIF), Deputy – Director-General Paul Stocks announced today.

“The CIF helps rural communities make use of their water resources and adapt to climate change by helping community water irrigation schemes get off the ground.”

  “When people think of irrigation and water infrastructure, they usually think of building dams, aquaducts and pipelines. What is often not considered is the enormously important work in planning and community and stakeholder consultation that has to happen before the earthmovers arrive.”

The taxpayer should not be expected to help with on-farm work for irrigation but the wider economic, environmental and social benefits from irrigation justify assistance in the planning stage.

The other four projects to receive funding are inTasman, North Canterbury, South Canterbury and Central Otago.

The ODT reports  these are the Lees Valley storege dam, the Hurunui Water Project, and the Waihao Downs and Lindis irrigation schemes.

Biosecurity threat or just non-tariff barrier?


MAF’ Biosecurity’s  provisional import health standards  for pig meat and by-products is a swine of a decision according to Federated Farmers.

The Ministry of Agriculture and Forestry (MAF) is setting a disturbing precedent by lowering the bar for imported pork.  It is simply unacceptable on biosecurity grounds,” says John Hartnell, Federated Farmers biosecurity spokesperson. 

“The unintentional risk of the HIV-like Porcine Reproductive and Respiratory Syndrome (PRRS virus) entering New Zealand is too high and the Federation backs New Zealand Pork on this issue.

“New Zealand and Australia are the only two countries on earth free of PRRS.  It’s no wonder the pork industry doesn’t want it here, given piglet mortality can peak at 70 percent during the acute phase.

“The New Zealand pig herd could become infected with PRRS if infected imported raw pork was fed to an unregistered pig.  This could easily occur on a lifestyle block or in the suburbs. 

MAF says  the risk of PRRS in consumer-ready products can be managed by the import health standards they’re proposing so is the farmers’ opposition based on facts or fear of competition?

New Zealand apple growers have long complained that Australia’s opposition to our fruit because of the risk of fireblight is really a non-tariff barrier barrier masquerading as a biosecurity threat. Opposition to the new standards for pig meat imports could be regarded as a similar ploy.

We have to be very careful that any opposition we have to the import of goods from other countries is based on science and not just an attempt to reduce competition because the sauce we try to apply to other people’s pork could just as easily be applied to our produce elsewhere.

Dirty streams disappoint


MAF’s snapshot of progress on dairying and the clean stream accord shows there is still a lot of work to be done to improve the perofrmance of some farmers.

Agriculture Minister David Carter is right:

“No farmer has the right to pollute.  The small numbers of dairy farmers who ignore effluent disposal requirements are testing the patience of all New Zealanders, and risk damaging the reputation of the dairy industry as a whole,” says Mr Carter.

 Accidents will happen and equipment break down on the best managed operations so 100% compliance all the time will be impossible but carelessness or simple disregard for good environmental practices is unacceptable.

The regular, deliberate offenders may be small in number but they are doing a great deal of damage not just to waterways but to the reputation of dairying and New Zealand’s image as well.

The NBR’s final piece on Fonterra’s five biggest challenges deals with “dirty dairying”.

Ag commodities down but will lead 2009 rebound


The ANZ Commodities Price Index fell 7.2% in November, contributing to a 21% fall in four months.

Prices for dairy products fell 12% and have almost halved from their record levels a year ago. Prices for pelts tumbled 41%, the biggest decline among products tracked in the index. Beef, wool, lumber and aluminium all fell more than 10%. Seafood prices dropped for the first time in 18 months, sliding 0.6%. Lamb rose 4.3% and kiwifruit gained 0.3%.

Producers were cushioned from the slide in commodity prices by the weakening New Zealand dollar and the ANZ New Zealand Dollar Commodity Price Index was down only 1.8% in the latest month.

“Although the currency softened further in the month, it failed to match the drop in value of the commodities that we monitor,” ANZ economist Steve Edwards said in a statement. “It is clear that a weaker currency is acting as a buffer to falling commodity prices.”

Prices in yesterday’s on-line auction by Fonterra continued to slide with an average price of $4203.50 ($US2223) a tonne, 14% lower than last month’s auction and a fall of 49% since July.

Fonterra commercial director of GlobalTrade Guy Roper said the economic crisis had resulted in a significant drop in the demand for dairy commodities and a continued decline in prices had been expected.

“There will continue to be downward pressure on prices, until either the supply of product declines, or buyers have confidence that the global economic situation will improve,” Roper said.

Fonterra has been criticised for its auction which some feel is leading the market down. The Bull Pen disucsses that here.

However, the news isn’t all bad. Stock & Land  expects agricultural commodities to rebound next year.

After the dust settles from the sell off across commodities triggered by the global financial crisis, agricultural commodities will benefit from a secure demand outlook and tight supplies to outperform metals and oil in 2009.
Regardless of the gloomy macroeconomic outlook people still need to eat; therefore agricultural commodities will be more resilient during the economic downturn.

“Demand for agricultural commodities tends to be less elastic, less responsive to economic factors, more responsive to population,” said Lawrence Eagles, a commodities analyst at J.P. Morgan.


That’s encouraging because the MAF Briefing to Incoming Ministers warns the outlook is uncertain:


Over the next 20 years, New Zealand’s food and fibre producing capability will become increasingly important. Globally, rising population and economic growth is expected to increase demand for agricultural and forestry products. At the same time land and resources, such as freshwater, available for food and fibre production worldwide is likely to decline.

Despite this favourable long-term outlook for New Zealand’s primary production sectors, our industries, environment and broader society face a complex set of challenges to reap future opportunities. These challenges are exacerbated by the current global financial crisis that continues to unfold with uncertain impacts and duration.

Added to that is the growing threat of drought.

The contrast between irrigated and dryland in North Otago increases by the day, showing how badly we need rain and most of the east coast of both islands is similarly desperate for rain.


National good has local and national cost


The Timaru Herald urges people to think of the national good before appealing to the environment Court over the resource consent granted to Meridian Energy.

The fact that a significant chunk of power – enough to run a city the size of Christchurch – can be generated, apparently cost-efficiently, surely deserves strong consideration. Barely a winter goes by without security of power supply being raised as a potential problem, so significantly increased generation capacity must be a positive thing.

I agree but the national benefit isn’t without local and national costs.

The obvious one is environmental from reduced flows but there could be an economic cost too if fishing and boating which bring tourist dollars into the region are affected. And there will definitely be a local and national cost if Meridian’s project threatens the reliability of supply for irrigation.

The Mid River New Applicants’ Group, which represents irrigators on the lower river, wants Meridian to guarantee that reliable water supply will not be affected.

Ensuring reliability for existing irrigators is also something Waitaki Mayor Alex Familton will be watching closely.

He said the NBTC scheme would benefit the Waitaki district in terms of potential employment and an improved infrastructure.

However, he said it was vital present irrigators, at the very least, maintained their reliability of supply and were not disadvantaged by the scheme.

The Lower Waitaki irrigation scheme has been operating for about 30 years, the North Otago Irrigation Scheme is just over two years old and there are other smaller schemes, all of which provide 100% reliability of supply for farmers.

Any threat to that reliability is a threat to farming businesses, it would be a bit like building a hotel then finding that the road to it was only open some of the time.

The MAF Briefing to Incoming Ministers  noted the contribution irrigation makes to the economy:

In 2002/03, irrigation was estimated to contribute around $920 million netGDP “at the farm gate”, over and above that which would have been produced from the same land without irrigation. Since then, the area of irrigated agriculture and horticulture has increased by about 25 percent, from 480 000 hectares to around 600 000 hectares.

Both a reliable supply of electricity and irrigation are important for the economy, the concern is that Meridian’s scheme to increase the former will reduce the latter.

Irrigation funding


The Government’s finally come up with some money to help investigate  community irrigation and water storeage schemes.

The Ministry of Agriculture and Forestry has allocated $390,000 under its Community Irrigation Fund to seven schemes, including the Strath Taieri Irrigation scheme, Dairy Creek Irrigation scheme, Mount Ida Dam and Tarras Community Water Scheme.

Two others are in Canterbury and the other in the Wairarapa.

MAF director-general Murray Sherwin said in a statement the $6.4 million fund aimed to help rural communities adapt to climate change and reduce the risk of water shortages.

The money can meet 50% of valid costs and can be put towards paying for support staff, promotional and communication activities, developing a prospectus for potential investors, investigating funding arrangements, facilitating farmer investment and to investigate multiple use of water.

This is great news and long overdue. No-one expects the tax payer to contribute to on-farm costs but the development of community irrigation schemes should be treated like other infrastructure with a public benefit.

When the North Otago Irrigation Company was doing the ground work for its scheme to pump water from the Waitaki River then pipe it under pressure to irrigate up to 20,000 hectares in the Waiareka and Kakanui Valleys there wasn’t a cent of government money available.

Then Minsiter of Regional Development Jim Anderton met NOIC directors several times, accepted there was no better form of regional development foe the area, and each time he promised some assistance but never once delivered.

The NOIC Scheme which opened two years ago has provided an amazing economic, environmental and social boost not just to the valleys but the wider District too with flow-on benefits for the national economy. It would have been a bit easier for all concerned had their been the financial assistance MAF is now providing.

Key facts for primary sector outlook


MAF’s SONZAF (Situation and Outlook for Agriculture and Forestry)  key facts  indicate:  


  • Dairy export earnings are projected to peak next year at $12 billion – more than 40% higher than earnings two years ago.
  • Dairy export earnings are projected to ease back to $10.5 billion in 2010 before rising again to just under $12 billion by 2012.
  • The weighted average payout (net of industry goods levy) for the next four years averages around $6 – significantly higher than the previous five year period. Detailed payout projections are $6.90 (2009), $5.78 (2010), $5.98 (2011), $6.32 (2012).
  • Demand is growing from new markets in China and OPEC countries. OPEC countries account for 21% of New Zealand’s total dairy exports.
  • The South Island continues to drive dairy herd expansion. The South Island herd grew by 13% last year – 31% of New Zealand’s dairy herd is now in the South Island.


  • Manufacturing beef (a type of minced beef) prices are expected to rise by more than 30% over the five year forecast period.
  • Beef export volumes are projected to fall by about 2% next year due to drought but to grow back to 2007 levels by the end of the five year forecast period.
  • Export returns currently at $1.5 billion are expected to climb steadily to $2.26 billion by 2012.


  • Sheep numbers were down 4% at June 2007.
  • The drought and recent low prices are pushing further declines in sheep numbers – adult sheep slaughter increased by 28% for the year ended June 2008.
  • Lower stock numbers and lower weights mean lamb export volumes are projected to fall through the five year period by 11% to 287 000 tonnes.
  • Higher prices are set to push overall export earnings over the same period up by 25% from the current $2.1 billion to $2.6 billion.


  • The average wool sale price is projected to rise by just over 40% over the next five years to $5.35 per kilogram.
  • Wool volumes are projected to plateau as falling sheep numbers balance higher prices at 142 000 tonnes.
  • After an initial fall export earnings are projected to grow by 29% over the five year period to $795 million.


  • Log prices and pulp prices are both projected to climb by more than 30% over the next five years.
  • Timber and panel export prices are projected to fall before recovering but volumes remain relatively flat over the next five years.
  • Overall forestry export returns are projected to grow from $3.3 billion in 2008 to $4.5 billion in 2012.


  • Wine grapes are now the largest single horticultural crop in New Zealand at more than 25 000 hectares.
  • A big harvest this year will boost export volumes by 30% in next year and increased plantings will push exports up by more than 50% by 2012.
  • The value of wine exports is projected to rise by 76% to $1.3 billion by 2012.
  • Sauvignon Blanc makes up 75% of wine exports and is New Zealand’s largest wine export followed by Pinot Noir, Chardonnay and Merlot.


  • The current average price of $8.1 per tray of kiwifruit is projected to grow to $10.7 a tray by 2012.
  • Predicted kiwifruit export volumes remain static at just under 100 million trays over the next five years.
  • Kiwifruit export returns are projected to grow from $779 million dollars to $1.06 billion by 2012. 

MAF’s assumptions are based on expectations for “normal” climatic conditions with no allowance for domestic or international natural disasters nor major economic changes. Projections are based on Treasury’s exchange rate assumptions from the 2008 Budget.

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