Rural round-up

September 16, 2015

Deal will change face of industry – Dene Mackenzie:

Silver Fern Farms aims to be debt free with money in the bank by this time next year if a deal to form a 50:50 joint venture with Chinese food giant Shanghai Maling gets shareholder approval.

Silver Fern Farms chairman Rob Hewett remained optimistic yesterday the deal would receive the required 50% shareholder support and the company is offering significant sweeteners to persuade shareholders to vote yes.

The deal would allow Silver Fern Farms to become unleashed, he said.

Mr Hewett’s presentation to a media conference was peppered with phrases such as ”turbo-charged” and ”compelling”. . . 

 

Shock waves from Silver Fern Farms will now pulsate through the industry – Keith Woodford:

Five months ago I wrote that whatever happened at Silver Fern Farms, it would be like an earthquake within the meat industry. Given that Silver Fern Farms is New Zealand’s largest meat company, and with the status quo unsustainable, it could not be any other way.

The offer that has now come forward from Shanghai Maling is remarkable. This offer, once regulatory approvals are received, will change Silver Fern Farms from being large but financially very weak, to being large and financially very strong.

Apart from mid-season working capital, Silver Fern Farms will be debt free and with cash in their war chest to ‘take it’ to their competitors. . . 

Alliance reaches out to Silver Fern suppliers – Dene Mackenzie:

Invercargill meat processor Alliance Group wasted no time yesterday in trying to woo disgruntled Silver Fern Farm suppliers after Silver Fern announced a joint venture with a Chinese company.

Alliance chairman Murray Taggart said it was important for New Zealand farmers to retain ownership of their industry and the best way to achieve that would be to supply Alliance as the only remaining major co-operative.

Alliance also muddied the water somewhat by saying it submitted a bid for Silver Fern before Silver Fern’s capital-raising process got under way as part of ongoing discussions with the Dunedin group. . . 

Beef and Lamb expects farm profits to rise – Dene Mackenzie:

New Zealand ”average” sheep and beef farmers are in for a profit lift and Beef and Lamb chief economist Andrew Burtt calls it positive news at a time when the economy would benefit from increased farm sector spending.

Beef and Lamb predicted the average sheep and beef farm would see its profit before tax lift to $109,000 this season – 9.6% more than last season but 3.1% below the five year average. . . 

Sheep meat marketing needs focus on premium – Simon Hartley:

Softening demand for sheepmeat in China and Europe should be prompting New Zealand to prioritise getting premium chilled lamb cuts in China, and to also look further afield to new Middle Eastern markets.

Softer overseas demand for New Zealand sheepmeat, particularly from China, had curtailed New Zealand sheepmeat producers’ returns in recent months, Rabobank animal protein analyst, Matthew Costello said in his recent report on the New Zealand sheepmeat industry.

While China’s imports had ”exploded on to the New Zealand sheepmeat export scene” in 2013, to become New Zealand’s largest sheepmeat trading partner, its own production had since grown to about eight times that of New Zealand. . . 

Large trade blocs good for NZ exports:

New Zealand’s refreshed priorities for international trade have been welcomed by ExportNZ.

The Government’s Business Growth Agenda on trade has been updated, with a focus on completing the Trans Pacific Partnership, achieving a free trade agreement with the European Union, and engaging more with emerging economies in Latin and South America.

ExportNZ Executive Director Catherine Beard said exporters welcomed the continued emphasis on TPP. . .

Swede test a first for NZ – Hamish Maclean:

The plight of Southern farmers last year has led to a first for New Zealand.

When 200 dairy cows died in Southland and South Otago and many more became ill, the cause – a naturally occurring compound in winter feed, swedes in particular, – could not be tested at any New Zealand commercial laboratories.

Now, commercial glucosinolate testing of plants is available in New Zealand, and that is good news for the dairy industry, Dairy NZ says. . . 

Farm prices hold up; MyFarm eyeing dairy opportunities – Fiona Rotherham:

(BusinessDesk) – Farm prices are holding up well on a drop in volume over the winter months, according to the latest Real Estate Institute of New Zealand rural farm sales data.

There were only three dairy farm sales recorded in the past month and the median sales price per hectare for dairy farms for the three months ended August fell to $26,906, compared to $35,304 for the three months ended July and $43,125 for the three months ended August 2014.

But the REINZ Dairy Farm Price Index, which adjusts for differences in farm size and location, rose by 17.3 percent in the three months to August, compared to the three months to July. . . 

Tests before tightening help protect farm fertility:

Soil tests should be the first step for farmers trying to managing budgets while maintaining pasture productivity.

Ballance Science Extension Manager, Ian Tarbotton, says keeping soils fertile is good insurance with pasture an essential feed source, but gut instinct or past experience won’t lead to good decisions on what to spend or save.

“Soil tests will show you what you have to work with and they are the best guide to decisions around a fertiliser budget. The last thing farmers want to do is to compromise future productivity, so understanding what nutrients are available now is the best basis for decisions on fertiliser budgets.” . . 


Rural round-up

September 9, 2015

Bright Foods tipped as Silver Fern bidder – Fran O’Sullivan:

Chinese Government backed Bright Food is understood to be the party which has been in negotiations with Silver Fern to take a stake in the NZ meat company.

Bright is a wholly Government-owned State Owned Enterprise.

But the negotiating vehicle is understood to one of Bright’s four listed subsidiaries. One of those subsidiaries – Bright Dairy & Food – took a majority stake in Canterbury milk processor Synlait Milk for $82 million in 2010.

Late last week speculation suggested the proposed deal would be announced today by Silver Fern Farms. . .

Waikato farmer wearing undies and gumboots chases burgler – Florence Kerr:

An attempted robbery was thwarted by an angry Waikato farmer who chased down the not-so-clever burglars wearing his undies and his gumboots.

Fed-up with continued thefts from his and neighbouring farms, Ohaupo farmer Arnold Reekers was forced into action in the early hours of Sunday morning when he heard his quad bike beeping as the thieves attempted to hot-wire the vehicle.

And despite having a knife pulled on him by the would-be thieves, Reekers wouldn’t hesitate to do it again saying continued thefts would drive farmers to take up arms despite pleas from the police for people not to take matters into their own hands.  . . 

Agility to drive value – Hugh Stringleman:

Fonterra chairman John Wilson has hit back at repeated criticism the huge co-operative has lost its way or not delivered on the promise it once held.

“I do sense the frustration of farmers with critics who come out of their holes when global milk prices are low,” he said ahead of the annual results release on September 24.

Wilson is one of three farmer-directors who retire by rotation this year to face the farmers’ vote in October. . .

New Zealand sheepmeat – maximising the cut:

Softer overseas demand for New Zealand sheepmeat – particularly out of China – which has curtailed New Zealand sheepmeat producers’ returns in recent months, has largely been driven by decline in demand for the forequarter portion of the carcase, says agribusiness specialist Rabobank in a recently-released report.

The report, New Zealand Sheepmeat: Maximising the Cut – Breaking It All Down, says it is important for producers to understand the breakdown of the animal and market demand for specific products as it ultimately determines the farmgate price. 

“While farmers are paid on a per head or per kilogramme basis, the price they receive is calculated from the summation of all the products derived from the animal – from the extensive array of cuts, to the offal, co-products, skin and wool,” says report author and animal protein analyst, Matthew Costello. . .

 

Foreign investment decisions could be fast-tracked – Brook Sabin:

The Government is considering speeding up foreign investment decisions, but Finance Minister Bill English is giving a cast-iron guarantee the rules won’t be watered down.

The Overseas Investment Office (OIO) considers whether to approve high-value and sensitive land investments from overseas buyers. It then makes a recommendation to the Government, which ultimately decides whether the sale can proceed.

The most high-profile sale currently before the OIO is the 14,000ha Lochinver Station, which China’s Shanghai Pengxin wants to buy. The application has been held up for more than a year, but the Government is finally close to deciding whether it will go ahead. . .

Investment reduces AsureQuality profit:

AsureQuality posted a 9% drop in 2015 annual profit and expects a further decline in 2016 as the state-owned food safety company steps up investment for future growth.

Profit fell to $11.4 million in the 12 months ended June 30, from $12.5m a year earlier, the Auckland-based state-owned enterprise said in a statement posted on the Treasury website. It expects profit to decline further to $10.6m in 2016 before increasing to $12m in 2017, according to its 2015-2018 statement of corporate intent. . .

Organic farming is actually worse for climate change than conventional farming –  Deena Shanker:

Organic food is booming right now, as more and more people choose what they perceive to be healthier, more environmentally friendly food.

But a new study published in the June issue of Agriculture and Human Values suggests that organic farming, as it currently stands, is not as sustainable as it could be, and when done on a large scale, even produces more greenhouse gases (“GHGs” are heat-trapping compounds that contribute to climate change) than its conventional counterpart.

To determine the difference in emissions of organic agriculture versus conventional, University of Oregon researcher Julius McGee used state-level data, available through the United States Department of Agriculture and the Environmental Protection Agency, that showed agricultural GHG emissions from 49 states from 2000 to 2008. . .  Hat tip: Utopia

Biofilms in the Dairy Industry:

Recent high-profile contamination scares within the international food industry have highlighted the need for best practice when it comes to dairy manufacturing. After 15 years of research into dairy biofilms, there is now a cornerstone publication for a better understanding of the current science, and ways to reduce the occurrence of biofilms associated with dairy manufacturing.

Biofilms in the Dairy Industry provides a comprehensive overview of biofilm-related issues currently facing the New Zealand and international dairy sector. . . 


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