Rural round-up

July 10, 2018

Waipahi young farmer keeps national title in South – Nicole Sharp:

Taking the bull by the horns, Logan Wallace did not let his second chance slip through his fingers and  won the FMG Young Farmer of the Year in Invercargill on Saturday night.

After competing in the grand final in 2016, Mr Wallace (28) had a rough idea of the battle in front of him on Thursday, Friday and Saturday. The technical day on Thursday tested mental strength, while the practical day on Friday tested both physical and mental ability before the quiz on Saturday evening.

Mr Wallace won the Ravensdown Agri-Skills Challenge, the Agri-Sports Challenge, Massey University Agri-Growth Challenge and the overall title. . . 

Chinese dairy giant Mengniu eyes formula expansion at Pokeno – Jamie Gray:

China’s Mengniu, through its subsidiary Yashili NZ, is looking at expanding its state-of-the-art infant formula plant at Pokeno, the company’s chief executive Lu Minfang said.

Lu, in an interview, said plans are afoot for a substantial expansion of the already busy plant, which opened late in 2015 at the end of Auckland’s Southern Motorway.

Last month French food giant Danone – which already has close ties with Mengniu and Yashili – said it planned to acquire up to 49 per cent of Yashili NZ. . . 

East Coast seeking solutions to slash floods a month after massive deluge – Patrick O’Sullivan:

The tsunami of forestry slash last month will likely happen again on the East Coast unless the industry stops clear felling erosion-prone area, says forester Chris Perley.

It’s been one month since a deluge in the hills above Tolaga Bay sent thousands of unwanted logs careering downhill – clogging up rivers, endangering lives and destroying homes.

Perley said similar events had occurred in Hawke’s Bay, such as in the Mohaka catchment eight years ago.. . .

Tough questions about ‘M. bovis’ raised by farmers – Nicole Sharp:

Hard questions were raised, some with no answers.

Farmers questioned the Ministry for Primary Industries (MPI) and industry representatives about disease testing and biosecurity issues at a Mycoplasma bovis meeting in Winton last month.

One question raised was how some farmers would sell young stock, such as bobby calves, because putting calves together at stockyards could spread the disease.

Beef + Lamb New Zealand policy and advocacy general manager Dave Harrison said if farm systems involved saleyards and bringing in more calves, then farmers needed to decide whether or not that was a risk they were willing to take.

”Saleyards are going to be a risk area,” he said.. . 

Fumigant use research under way at PFR :

Research into the use of Vapormate, or ethylformate (including CO2) as a potential fumigant to kill mites, and other insects infecting export apricots post harvest, is under way at Plant and Food Research’s (PFR) Clyde base.

Research associate Kate Colhoun said the fumigant ethylformate (EF), which was also known as Vapormate, had proven effective against flower thrips.

The fumigant was ”generally recognised as safe” (GRAS) by the US Food and Drug Administration, was fast acting, residue free and acceptable for most export markets. . . 

A2 milk wave coming – Woodford

Agribusiness expert Keith Woodford says within the next five years China could be accepting only A2 milk products.

Speaking at Federated Farmers Dairy conference in Wellington this morning, Woodford, a retired agribusiness professr, says the push for A2 milk won’t come from the Chinese Government but consumers.

He told dairy leaders that A2 milk was the “largest selling milk” in Australian supermarkets. “I know this because I’m part of the Australian A2 milk story,” he says. . . 

Looking back at a decade of deregulation – Gregor Heard:

It may seem like only yesterday, but July 1 marked 10 years since the Australian export wheat market was officially deregulated.

When the Rudd Government passed the Wheat Marketing Act of 2008, opening up the market to multiple exporters of bulk wheat, it marked the end of almost 70 years of single desk marketing.

Under the single desk, a national pool operated, with all wheat marketed on behalf of growers by the Australian Wheat Board. . . 


Fonterra holds 4th place in global dairy rank

July 16, 2014

Fonterra has held fourth place in Rabobank’s global dairy rankings:

  The latest annual Rabobank survey of the world’s largest dairy companies highlights the giants of one of the world’s most valuable food sectors.

The last 18 months have seen most of these players battle challenging conditions, with weak economies and supply constraints undermining sales growth in key markets. Againt this backdrop, mergers and acquistions have become an attractive route to growth and profitability. But with billion dollar deals increasingly hard to come by, dairy giants will need to acquire or tie up with more companies to sustain the same rates of growth in future. Those adept at acquiring and embracing new businesses will remain well positioned to survive and thrive. 

“Once again, giants Nestlé, Danone and Lactalis top the list, showing that the world’s largest dairy companies are reasonably entrenched,” commented Rabobank analyst Tim Hunt. “We continue to see some companies outperform their peers in sheer growth terms. In particular, the Chinese giants Yili and Mengniu, which saw their sales expand by 14% and 20% respectively, with Yili entering the top 10 for the first time ever”. 

Saputo continued its march up the list to push to eighth place, in part due to several recent acquisitions. Meiji and Morinaga slipped down the list largely due to the sharp decline in the value of the Yen (in which most of their products are sold).  

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2013 was a challenging year for most of the world’s major dairy companies, with stagnant sales volumes in most OECD dairy markets. Acquisitions have become a more attractive route to grow sales and in 2013, there were 124 dairy transactions, up from 111 in 2012 and the highest since 2007.

Positioning for maximum effectiveness in the expanding Chinese market remains prominent. In 2013, joint ventures were announced between Mengniu and Whitewave and COFCO and Danone while Yili announced a partnership agreement with Dairy Farmers of America.

Mengniu took a stake in China Modern Dairy to secure raw milk supply. A further joint venture is pending between FrieslandCampina and Huishan. Despite the increase in transactions, the dairy sector saw no billion dollar deals in the 12 months to 30 June 2014.

While underlying growth will pick up in coming years, many markets will not return to the rapid growth rates seen before 2008. In this context, mergers, acquisitions and joint ventures will remain a key avenue to growth and profitability.

“The catch is that the number of attractive targets is shrinking and multiples have risen,”  explained Hunt. “With billion dollar value deals harder to come by, dairy giants will need to acquire or tie up with more companies than in the past to sustain the same rates of growth”.

Fonterra made a record pay out to its suppliers last season but that was overshadowed in the media by its poor handling of the whey protein concentrate debacle.

However, it maintained its 4th place in the rankings.


Rural round-up

September 15, 2013

Getting low riding out the big blow – Tim Fulton:

Tom Kearney, his wife and family hunkered down in a bedroom and rode it out when the nor’wester whacked their farm near Ashburton.

The Kearneys’ home at Winslow was well sheltered but it felt for a while like the windows might blow in, Kearney said.

“We’ve got a young daughter and another one on the way in about three weeks time so it could have got a bit frightening if it (the baby) decided to turn up a bit early.”

The sheep farmers expect they lost up to 1000 trees in the gale, about half the trees on the property. Some of thee shelter-belt trees were 50-60 years old. . .

Response needed on black grass – Annette Scott:

The black grass damage is done and the focus now must go on establishing a robust response plan, Methven cropping farmer Ian Letham says.

Letham farms along the route the contaminated seed took on its journey to a Methven seed-dressing plant.

“I’m extremely concerned about this issue,” he said of a biosecurity breach that resulted in the spillage of the noxious weed black grass in Mid Canterbury. . .

NZ-linked Chinese dairy firms rank highly – Jamie Gray:

Chinese dairy companies Yili and Mengniu – both of which will soon have factories in New Zealand – now rate among the top 15 of the world’s biggest dairy companies in terms of turnover, rural lending specialist Rabobank said.

Rabobank said Yili is now ranked at 12th, up from 15th last year, while Mengniu went to 15th from 16th.

Yili has plans to manufacture in South Canterbury while Yashili – which is in the throes of being taken over by Mengniu – is building a factory at Pokeno, on the southern outskirts of Auckland.

The top five rankings – with Fonterra at number four – remained unchanged from last year. . .

Genetics programme critical for improving productivity – Allan Barber:

Two complementary programmes have just been announced which promise to deliver improved sheep traits which will compensate for lower production and generate greater profits.

Beef + Lamb New Zealand Genetics is a proposed new partnership between B+LNZ and the Ministry of Business, Innovation and Employment (MBIE) which will combine existing levy payer funding of $2.9 million with $1.5 million of third party investment to be matched by $4.4 million from MBIE.

B+LNZ currently invests its share in the activities of Sheep Improvement Limited, Central Progeny Test and Ovita which has been a joint venture with AgResearch for the last 10 years. This will now be wrapped up into B+LNZ Genetics, while AgResearch will provide major input into the new programme which will broaden the historical breeding excellence focus to determine breeding values and genetic ability to perform on hill country. . .

Vision projects #4 – Credo Quia Absurdum Est:

I see agribusiness biotechnology startups in the news every week.  They usually have the words “Massey University”, or occasionally the school for backward farm kids “Lincoln” attached to them.

There’s no reason why they shouldn’t have Invercargill attached to them.

But we have had decades of wasteful spending on airport runways, pastoral land at Awarua and other ridiculous projects that are not going to create community wealth or jobs.

Invercargill needs to play to its strengths. . .

Pāua Data Logging to Better Manage the Fishery:
Commercial pāua diving is entering the electronic age with logging of every shellfish taken.

When the new season opens on Oct 1, every diver in the Pāua 2 fishery will be wearing a data logger that will record each captured pāua’s location, depth, weight and the water temperature.

The small electronic boxes strapped to wetsuits unload their data on the supporting dive boat, which will provide a reef by reef picture of what is happening in the fishery.

“This will allow us to spread the catch effort, ensure an area is not over exploited and better manage a sustainable fishery,” Tony Craig, Pāua 2 Management Group chairman, said. . .


Fonterra still #4 in global dairy

September 11, 2013

Fonterra has maintained its fourth place in Rabobanks top 20 dairy rankings.

The latest Rabobank survey of the world’s largest dairy companies (ranked by dairy product turnover1) has some familiar features. Nestlé and Danone remain at the top of the table and 18 of the 20 companies are the same as 12 months prior.
 
However,the survey also demonstrates some significant changes. The most notable shift at the top end of the table is the continued rise of Lactalis. With ongoing sales growth and the acquisition of Parmalat and Skånemejerier, Lactalis has moved from fourth into third position, and is now within striking distance of Danone. But the biggest strides up the table were made by the Chinese giants. Having entered the top 20 for the first time in 2010, Yili moved up four places into 15th and Mengniu moved up two places into 16th, riding the wave of domestic market sales growth.
 
Perhaps most striking is that despite the rise of the Chinese, the list of the world’s 20 largest dairy companies remains dominated by those based in OECD countries.
 
The headquarters for 18 of the 20 are in the EU, North America, Japan or New Zealand.
Shifting global dynamics call for strategic change:
This highlights one of the key challenges facing the world’s largest dairy companies. As outlined in Rabobank’s January 2012 report Show me the money, growth is expected to slow in these traditional dairy markets over the next five years, as the industry battles economic and demographic headwinds, already high dairy consumption levels, overweight consumers and concerns over the cost of dairy. By contrast, emerging markets such as China, South East Asia, India and Latin America are expected to offer good sales growth, with almost the opposite trends in place.
These dynamics have been developing for some time, and many of the world’s largest dairy companies have been working for years to ensure they are well placed to survive and thrive in this shifting market place. Those who are less well placed are now moving quickly to do so.
In slowing home markets, companies are building larger, leaner businesses and trying to tap into the pockets of faster growth that remain, sparking national and regional consolidation moves. At the same time, most are working hard to acquire the products, brands and competencies to build footholds in newer growth arenas.
Today, 16 of the largest 20 dairy companies have investments in manufacturing in Asia and/or Latin America; 15 of them have investments in China alone.
Companies are jostling for position
But an increased sense of urgency has entered the game of late, as the market trends accelerate and each new acquisition or merger narrows the remaining field of targets.
These strategic imperatives have generated a wave of M&A activity over the last 18 months, much of it cross border. The majority of the companies in our top-20 have bought other companies or entered joint ventures to strengthen their position during this period. The most significant moves have
included:
– Nestlé’s acquisition of Pfizer’s nutrition business, to buy improved entry into the rapidly growing infant nutrition sector in emerging markets;
– Lactalis’s acquisition of Parmalat, giving them access to several new markets around the world;
– FrieslandCampina’s acquisition of Alaska Milk in the Philippines, expanding their foothold in a fast-growing market;
– Arla’s proposed merger with Milk Link in the UK, and Milch-Union Hocheifel in Germany,consolidating their Northern European footprint;
– Canadian-based Saputo’s acquisition of the US cheese maker DCI to bolster its product portfolio in the US cheese market;
– Müller’s acquisition of Robert Wiseman Dairies in the UK and joint venture with PepsiCo in the US to tap into the expanding US yoghurt category.
Rabobank expects to see companies continue to vigorously pursue merger and acquisition targets in the next 12 months as they jostle to position themselves for growth and profit in a changing market environment.
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Fonterra 4th in Rabobank’s Global Dairy top 20

July 19, 2012

Fonterra has dropped a place to fourth by turnover in Rabobank’s Global Dairy Top 20 list – having been overtaken by French company Lactilis.

  The report highlights the ‘who’s who of dairy’ as well as the continuing spate of merger and acquisition activity and tensions between the past and future of the dairy industry.

The report, authored by Rabobank’s Food & Agribusiness Research and Advisory group, shows Nestle and Danone at the top of the list, which remains dominated by dairy companies in OECD countries:  headquarters for 18 of the 20 companies are in the EU, North America, Japan, or New Zealand. 

However, the biggest strides up the rankings this year were made by Chinese giants Yili and Mengniu, riding the wave of domestic market sales growth.  The report says that in fact most of the growth prospects for dairy companies lie beyond OECD boundaries.

The ability of these companies to respond to changing global market dynamics will determine their prospects for survival and success in coming years.  Rabobank expects to see dairy companies continue to vigorously pursue M&A targets in the next 12 months as they jostle to position themselves for growth and profit in a changing market environment.

Rabobank expects demand in traditional markets to face economic and demographic headwinds because of already high consumption, overweight consumers and concerns over price.

However, demand in emerging markets – China, South East Asia, India and Latin America – is expected to increase.

Sixteen of the top 20 companies already have manufacturing investments in Asia or Latin America.

The top 20 companies are: Nestle, Danone, Lactilis, Fonterra, FrieslandCampina, Dairy Farmers of America, Dean Foods, Arla Foods, Kraft Foods, Meiji, Unililver, Saputo, DMK, Sodiaal, Yili, Mengniu, Bongrain, Muller, Schreiber Foods, Land O’Lakes.


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