Rural round-up

August 13, 2014

Getting New Zealand agriculture on the global market access ‘VIP’ list:

Priority must be given to policy and regulatory settings that improve market access for New Zealand exporters, with a heightened focus on the negotiation of Free Trade Agreements and building business-to-business and government-to-government working relationships, according a new report by global agribusiness specialist Rabobank.

Further leveraging New Zealand’s world class production and supply chain systems is also of utmost importance, the report says.

Releasing the research report, Competitive Challenges – Getting on the global market access ‘VIP’ list – Rabobank animal proteins analyst Matt Costello says improving market access is critical for the future growth and success of New Zealand agriculture, given the importance and reliance on exports across all sectors. . . .

Human clinical trial demonstrates digestive differences in A1 and A2 beta-casein – Keith Woodford:

The results of a human trial comparing A1 and A2 beta-casein have been published recently in the European Journal of Clinical Nutrition, which is a high ranking journal of the Nature Publishing Group. The trial demonstrated statistically significant differences in faecal consistency, with the faeces on A1 being overall looser. Also, for those people who on the A1 milk had the looser and runnier faeces, there was very strong evidence (p<.001) that this was associated with more stomach pain, whereas this relationship did not hold on the A2.

The trial was undertaken at Curtin University and led by Associate Professor Sebely Pal. I was part of the analysis and writing team, and I am listed as a co-author.

Prior to this trial there was already conclusive evidence that A1 and A2 beta-casein digest differently in animals. . . .

DNA technology a ‘game changer’ for monitoring environmental impacts:

Cawthron scientists have proved DNA technology can be used to accurately and effectively assess changes in the environment around marine-based operations.

Their findings have generated international interest – in particular from the aquaculture and off-shore oil and gas sectors that see huge potential for the technology. It will enable them to undertake environmental monitoring in near real-time.

“This revolutionary DNA technology, while still in its infancy, will eventually deliver results in real-time so industries can know instantly if anything is changing in the marine ecosystems around their operations, and if necessary, they can respond and adapt their practices immediately – it’s a game changer,” Cawthron Institute Chief Executive Charles Eason says. . .

Oh No! The ‘Perfect Bad Storm’ for Dairy Farmers World-Wide – Pasture to Profit:

Falling demand for dairy products, increasing wheat stocks, Russian ban on food imports have created the worst possible “Perfect Storm” for dairy farmers worldwide.

Dairy farmers’ business resilience will be severely tested, especially over the next year until these extraordinary events are resolved or resume normal trading.   Farmers need to quickly get control of their cash-flows, debt servicing and capital spending needs to ‘out of cash surplus’ only.

New Zealand dairy farmers have been ‘farming the milk price’…some have made decisions based on “an apparently ever increasing milk price”. . .

 Nothing forbidden about 40-fruit tree:

If you are the indecisive sort, especially when choosing exactly what sort of snack you’re craving, a special tree may be the answer.

A man in the US has created a fruit tree that grows 40 different kinds of fruit.

Sam Van Aken’s nursery is a workshop, laboratory and easel all rolled into one, and here he has created his masterpiece.

A springtime rendering of what the tree will look like in blossom has been gathering world-wide attention.

“It’s flattering. It’s amazing. But yeah, it’s also overwhelming,” Mr Van Aken says.  . .

Strong interest in 2014 South Island Farmer of the Year competition:

A wide variety of entries has been received for this year’s Lincoln University Foundation South Island Farmer of the Year competition, with meat, wool and dairy dominating the range of farm types competing.

Canterbury, Otago and Southland are particularly well represented among the entries, which include high and low country operations ranging from a large-scale pig operation to beef cattle specialists, dairy farms, sheep (both meat and wool breeds) and deer farms. Two of the entries include a cropping component their business. . .


Rural round-up

September 27, 2013

New funding for Global Research Alliance projects in Latin America:

Primary Industries Minister Nathan Guy has announced $800,000 in funding for two new Global Research Alliance projects in Latin America.

Mr Guy made the announcement during his speech at the Inter American Institute for Cooperation on Agriculture conference in Buenos Aires, involving Agriculture Ministers from across the region.

“This funding will support two regional livestock greenhouse gas research projects in Latin America – one looking at dairying in the Andes with Peru, Ecuador, Bolivia and Colombia, and the other looking at trees on farms in Central America with Costa Rica, Panama, Nicaragua and Honduras.”

“This additional funding recognises the growing importance of this region to New Zealand,” says Mr Guy. . .

New Zealand ‘beefs’ up presence in China:

The growing appetite for beef in China – which can’t be met by domestic production in the near-term – is good news for New Zealand exporters, according to a new industry report.

In its report, ‘Australia and New Zealand beef up their presence in China’, agricultural banking specialist Rabobank says Chinese beef consumption is expected to continue growing at a faster pace than domestic production, increasing the reliance on imports to satisfy demand.

Report co-author, Rabobank animal proteins analyst Matt Costello warns however, that while the New Zealand beef industry sees long-term growth and potential within the Chinese market, so too do competitors from around the world. . .

Icelandic fishing industry has some lessons for New Zealand’s commodity sector – Allan Barber:

Ogmundur Knutsson, Dean of the school of business and science at Iceland’s University of Akureyri, was in New Zealand in early September to give a keynote speech at the conference Charting Pathways for Maori Industry Future.

He is an expert in the Icelandic fishing industry which has moved from a low cost, harvest-driven model to a market-driven, value added model within the last 40 years. He believes New Zealand is trapped in the same low-cost industry operating model that existed in Iceland and needs to change its thinking to lift the fishing industry’s profitability.

The dramatic improvement in Icelandic fishing returns since it changed from the old, low value, largely frozen model to a new high tech, mostly chilled model provides a very good lesson for our fishing industry. Without having any firm knowledge base of how our fishing industry operates, I was struck by the philosophy which appears to have potential to be applied to other New Zealand commodity sectors, such as the meat industry. . .

Deepwater Fish Stocks in Healthy State:

Reduced hoki catch limits over the past few years have paid off for New Zealand’s second most valuable fishery.

Increases in the Total Allowable Commercial Catch (TACC) levels, from 1 October, for a range of deepwater species, have just been announced by the Minister for Primary Industries, Nathan Guy.

Both the eastern and western hoki stocks are double the size required to produce the statutory maximum sustainable yield. The western hoki stock is now above the management target range set by the Ministry for Primary Industries (MPI), and the eastern stock is at the top of the target range. . .

Estates turn to barn conversions as farms struggle – Agrimoney:

Owners of UK country estates are turning to commercial opportunities, such as office lets, to boost takings in the face of a pressure on agriculture income which is “to continue”, Savills said.

Estate owners are – encouraged by a relaxation in May of UK planning laws, and by an acceleration in economic growth to 0.6% in the second quarter from 0.3% in the first – looking to non-agricultural areas such as turning barns into  industrial units to bolster income.

“The increasing optimism in the economic outlook is reflected in more enquiries to rent commercial space, which is helping to boost rents and reduce void periods and debtors,” Sophie Barrett at Savills said. . .

Good nutrition sets heifers up for lifetime performance:

With the first mating season for heifers coming up rapidly, good nutrition not only has a major role to play in getting replacement stock up to live weight targets, but also in the cow’s productive future.

Failure to achieve adequate mature live weight targets affects the heifer’s lifetime performance, starting with low conception rates and leading to lower milk production in the first lactation.

Yet a recent study, published in the Proceedings of the New Zealand Society of Animal Production 2013 concluded that between 86-92% of heifers were not achieving optimal weights. . .

New Sacred Hill Sauvignon Blanc already a Gold Medal winner:

The newly released Sacred Hill Orange Label Sauvignon Blanc 2013 is already amongst the gold medals, reflecting this year’s blockbuster vintage.

The wine received a gold medal and was selected in the Top 50 at this year’s New World Wine Awards.

Sacred Hill winemaker Tony Bish says the Orange Label Sauvignon Blanc 2013 showcases everything that was great about the Marlborough vintage, from the cool spring through the warm, dry summer and autumn.

“This year’s Marlborough Sauvignon Blancs sing with energy and are packed with bursting flavour and aromas derived from the long, idyllic summer,” he says. . .

Fine Wools Ease, Coarser Types Steady

New Zealand Wool Services International Limited’s Marketing Executive, Mr Paul Steel reports that the weaker New Zealand dollar played a small role in the South Island Wool auction of 10,300 bales this week, with supply and demand factors influencing sectors differently. There was a 90 percent clearance rate with the fine wool sector making up most of the passed in lots.

The weighted indicator for the main trading currencies eased 1.53 percent compared to the last sale on the 19th September.

Mr Steel advises that compared to the last time offered on 12th September Merino Fleece 17 to 19 microns ranged from slightly easier to slightly dearer. . .


Perfect storm shows sheepmeat challenges

June 5, 2013

A report from Rabobank shows the challenges facing the sheep industry:

The New Zealand sheepmeat industry has been riding a ‘rollercoaster of returns’ in recent years, according to agribusiness banking specialist, Rabobank. A perfect storm of high supply, strong local currency and weak consumer demand has reduced returns and some key challenges must be addressed in order to secure a prosperous future for the sector.

In its recently released report ‘Sheepmeat – riding the rollercoaster of returns’ reviewing the sheepmeat sectors in New Zealand and Australia, Rabobank says in order to capitalise as conditions improve in established export markets, the sector will need to retain sufficient scale and market presence relative to competing meats.

Rabobank CEO New Zealand Ben Russell says the industry has experienced extreme volatility in returns throughout the value chain, and that is likely to continue with an expected supply shortfall looming in the coming season.

“The New Zealand sheep flock has been declining in size for many years with the drought and lower prices last season likely to see that trend continue next year,” he said.

“The shrinking flock has created structural over-capacity that will need to be addressed, however there are risks and practical challenges in achieving this that need to be carefully considered by processing companies.

“Ultimately the path to greater industry prosperity and growth is creating more value for consumers and a more efficient supply chain, including on-farm, procurement, processing and marketing.”

Better returns for sheep farmers depend not just on better prices for meat, it requires better returns for by-products including wool.

New Zealand’s sheep industry started to produce wool. The introduction of refrigeration enabled meat to be exported too but wool was still an important part of sheep farmers’ incomes.

Two or three seasons ago strong wool prices were reasonable but they’re fallen away again and that is one of the reasons sheep farmers’ incomes have slumped.

Notwithstanding the challenges facing the sheepmeat industry, Mr Russell says Rabobank remains enthusiastic about the long-term potential for the sector in New Zealand, and working alongside its clients throughout the supply chain to capitalise on future opportunities.

Report author, Rabobank animal proteins analyst Matt Costello says that, given the sector’s exposure to and reliance on export markets, and the fact that sheepmeat is a higher valued product, the sheepmeat industry is dependent on the economic environment and consumers in these markets.

“Market demand for sheepmeat has been subdued as a result of higher prices and fragile economies, especially in Europe, whereas Asia and the Middle East have emerged as stronger markets and should be cultivated,” he says.

“With an improving outlook in some of the lucrative sheepmeat export markets and with the optimism surrounding the potential of developing markets such as China – New Media Release June 3, 2013 2
Zealand and Australia will be the only countries positioned to supply consumers around the world.

“It is increasingly important that the sheepmeat sector retains significant scale and market presence in comparison to competing meats to remain viable and capitalise on the longer-term growth opportunities.”

Part of the problem in New Zealand isn’t competition from other meats in export markets, it’s competition for land from dairying.

Dairy returns are better and improving which has pushed up farm prices. Growing demand for milk can support the increase in prices, volatile returns for sheepmeat can’t.

The big ‘dip’

The Rabobank report finds that the variation in returns for sheepmeat producers and exporters over the past few years has been significant, with “unprecedented” volatility.

Mr Costello says there is a lack of confidence among producers across the sheepmeat industries in both countries.

“The extreme high and low points over the past few years have not helped anyone, only serving to add to frustration and disillusionment,” he says.

“In simple terms, historically tight supply from both New Zealand and Australia underpinned the initial surge in livestock prices during 2010 and 2011, and the ensuing weak prices through 2012 and 2013 have been driven by higher short-term production due to the extremely dry conditions across both countries.”

While tighter supply in 2013/14 will assist to firm pricing over the coming year, a more sustainable market recovery will need to be driven by improved consumer demand and ultimately a more buoyant global economy.

Sheepmeat isn’t a traditional food in many parts of the world but the demand for protein from developing countries might help that.

Emerging markets

Globally, rising prices have been met by stubborn consumers in the major sheepmeat export markets of the EU, UK and the US. The emergence of developing markets throughout Asia and the Middle East has helped to offset the declines in volumes and, to a lesser extent, returns from the traditional export markets.

Not only is weak consumer demand impacting returns for the industry currently, but a persistently high exchange rate has also been challenging both countries.

Even with a slight fall in recent weeks, the prolonged high dollar in both New Zealand and Australia has been pressuring competitiveness in the global market, resulting in substitution and weaker export demand for sheepmeat, the Rabobank report says.
China, the report says, is a good example of the emerging market demand for sheepmeat.

Mr Costello says China became the largest single sheepmeat export market for New Zealand in 2012, surpassing the UK for the first time ever. Furthermore, China is now Australia’s largest sheepmeat export destination. Media Release June 3, 2013 3
“The emergence of China has seen a much greater utilisation of the whole carcass as demand has grown for items that were once rendered or offloaded at a discount and sheepmeat demand is expected to grow as affluence continues to increase,” Mr Costello says.

Utilisation of the whole carcass helps returns.

If only we could persuade the Chinese to embrace wool as well . . .


Rural round-up

February 19, 2013

Better Lake Rotorua = Farmers + Community + Councils:

A “third way” to better water quality is the promise of the Lake Rotorua Primary Producers Collective signed between Federated Farmers, Te Arawa and councils.
“The positive reaction has been pretty amazing,” says Neil Heather, Federated Farmers Rotorua/Taupo provincial president.

“This is the application of a Land and Water Partnership type approach at a local level.

“Despite one academic taking a pot shot, most Kiwis will see farmers and landowners working hard with regulators to improve what is our lake too. . .

A telling quote about co-ops – Milking on the Moove:

“There seemed little room for entrepreneurial creativity; virtually every decision was politicized.  The most politically active members controlled the co-op with the own personal agendas, and much more energy was focused on deciding which companies to boycott than on how to improve the quality of products and services for customers.  I thought I could create a better store than any of the co-ops I belonged to, and decided to become an entrepreneur to prove it.”

This  quote is from Whole Foods CEO John Mckey. The quote is from his recent book Conscious Capitalism and Forbes has run an article about John and his book, which I found interesting.

John was a hippy in the 60s and 70s and was involved in a commune and various food co-ops.

It appears he became disillusioned with the co-ops and started his own natural food store which grew to be the now famous Whole Foods Market. . .

Failure a huge spur as record-breaking shearer faces biggest challenge

Tackling the biggest job of your life might not be the best time to talk about failures.

But that’s not the way for Te Kuiti shearer Stacey Te Huia who on Tuesday tackles possibly the greatest shearing record of them all, hoping to shear more than 721 strongwool ewes in nine hours in a remote a King Country woolshed.

The record has not been tried by any other shearer in the six years since it was set by Southern Hawke’s Bay shearing ironman Rodney Sutton.

Tuesday’s bid will be a at Te Hape B, east of Benneydale on SH30 between Te Kuiti and Taupo, and will start at 5am and end at 5pm, including meal and smoko breaks). . .

Gang of four rips through record – Terri Russell:

A lively crowd of about 800 people cheered as four shearers, two from Southland, set a world shearing record near Mossburn yesterday.

Invercargill shearer Leon Samuels, Ohai’s Eru Weeds – who battled on despite being injured – and North Island shearers John Kirkpatrick and James Mack, shore 2556 sheep in eight hours.

The gang set the record in the previously unattempted Heiniger four-stand crossbred lamb eight-hour event. They shore the sheep in four two-hour runs.

The final countdown was heated, as the crowd screamed and shearers sweated it out. Some members of the crowd also performed a surprise haka to the shearers when they finished shearing. . . .

‘Wiggy’ working to better his skills – Sally Rae:

Meet Wiggy from Wales.

Paul ”Wiggy” Davies has been in North Otago working for shearing contractor Owen Rowland, having met Mr Rowland when he was over shearing in Wales.

Mr Davies (27), who had been shearing with former Oamaru man Grant Rowland, now living in Wales, wanted to improve his shearing. . .

Downright ‘grumpy’ over schedule – Rob Tipa:

NEW Zealand meat companies really should listen to their suppliers, because there are some very frustrated, disillusioned and downright grumpy sheep farmers out there.

And with good reason. Those who have withstood the financial pressures experienced by the meat industry in recent years are survivors who deserve a medal for their enduring loyalty to their respective meat processors.

They have listened patiently to promises of greater co-operation between meat companies in one meat industry review after another going back decades.

When the tide turned on low sheepmeat prices in the last couple of seasons, farmers were rewarded for their loyalty with record returns of an average $117 a head for lambs in 2010/11 and $113 a head in 2011/12. . .

Rabobank strengthens NZ research division – new animal proteins analyst appointed:

Rabobank’s Food and Agribusiness Research & Advisory division has announced the appointment of its new animal proteins analyst for New Zealand, Matt Costello.

Rabobank’s head of Food and Agribusiness Research & Advisory Luke Chandler said Mr Costello – who has strong experience as a researcher in the meat industry – was an excellent addition to the bank’s New Zealand food and agribusiness research team, joining senior analyst Hayley Moynihan, who specialises in the dairy sector.

“We’re pleased to welcome Matt into our team here at Rabobank and I am confident his strong background in the animal proteins sector will be a great asset to help further support our clients in this industry in New Zealand,” Mr Chandler said. . .


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