Rural round-up

December 11, 2019

Carbon neutrality requires permanent forests not production forests – Keith Woodford:

In recent months I have been writing about land-use transformation that will be driven increasingly by carbon trading. If New Zealand is to approach net-zero carbon, then it can only be achieved by a combination of modified lifestyles plus new technologies that either don’t yet exist or are yet to be commercialised. Even with all of these things, it will still require lots of forest plantings to offset carbon emissions from elsewhere in the economy.

A key point underlying the recent articles I have written is that the implications for rural-landscape change have been under-estimated and poorly communicated. A key thrust of this current article is that it is only by permanent forests rather than multiple-rotations of production forests that the march of the pine trees across the landscape can be managed. . .

Fonterra finds an ally – Elbow Deep:

I recently found myself in a pub with a group of people I’d only just met, and for reasons that still remain unclear found myself waxing lyrical about the myriad shortcomings of the Dairy Industry Restructuring Act (DIRA). I was as eloquent and convincing as only a man on his fifth pint can be, and when I finally paused for breath to consider whether I’d missed any crucial points, the woman next to me fixed me with a cool stare and asked “Is that your opinion or Fonterra’s?”

Less than a week later I was online watching DIRA submissions to the Primary Production Select Committee and saw National MP Amy Adams ask Federated Farmer’s Dairy Chair Chris Lewis almost exactly the same question. Why, Adams wanted to know, should the Select Committee take any notice of a Federated Farmers submission. “I’m just trying to understand,” Adams said, “how you ensure that it isn’t effectively the Fonterra Shareholders’ Council by another name.”
Was Lewis voicing Fed’s opinion or that of the Fonterra Shareholders’ Council’s?

Therein lies the problem for the Committee of MPs, how do they cut through the obviously self-serving nature of every submission and arrive at the decision of what’s best? . . 

Merino brand plan global from the start – Sally Rae:

The International Wool Textile Organisation held its Wool Round Table in Queenstown recently, 19 years since its last event in New Zealand. Since 1930, IWTO has represented the collective interests of the global wool trade. Business and rural editor Sally Rae attended one of the days.

Hamish Acland has always seen things a little differently.

That came about from the environment he grew up in — an entrepreneurial Canterbury farming family — and has been a trait that he has followed. That was particularly evident with the founding of merino clothing brand Mons Royale.

Ten years on, and Mons Royale now has 700 retail stockists globally, offices in Innsbruck, Vancouver and Wanaka and 50 staff. It has recently opened its first pop-up retail store in Rees St, Queenstown. . . 

Dairy Environment Leaders are embracing change:

The DairyNZ Dairy Environment Leaders have concluded their 7th Annual farmer-led forum in Wellington and are returning to their individual communities optimistic about the future of dairy farming and energized to drive positive change, says DEL Chairwoman Tracy Brown.

“This year’s theme was about embracing change and supporting communities’ which we strongly believe are two sides of the same coin. You can’t have one without the other” Mrs Brown said.

“Farmers are demonstrating a real willingness to embrace change, and New Zealanders need to see that willingness and support our rural communities and famers on their journey to a more sustainable future. We are all in this together and we all want the same thing at the end of the day. . . 

Big bucks to perk up farmers – Neal Wallace:

An injection of up to $9 million in 23 Southland catchment groups should also help improve the wellbeing of farmers.

Agriculture Minister Damien O’Connor announced the funding at a Thriving Southland function at Five Rivers in northern Southland in what is the first region-wide extension project funded by the $229m Sustainable Land Use package.

Thriving Southland chairman Ewen Mathieson says the project will help farmers reduce their environmental footprint by paying for experts to provide them with advice and guidance.

Enhancing or extending the catchment group model will also provide a social outlet for farmers that should enhance their wellness in an era when they are becoming increasingly isolated. . .

Grasslands more reliable carbon sinks than trees – Kat Kerlin:

Forests have long served as a critical carbon sink, consuming about a quarter of the carbon dioxide pollution produced by humans worldwide. But decades of fire suppression, warming temperatures and drought have increased wildfire risks — turning California’s forests from carbon sinks to carbon sources.

A study from the University of California, Davis, found that grasslands and rangelands are more resilient carbon sinks than forests in 21st century California. As such, the study indicates they should be given opportunities in the state’s cap-and-and trade market, which is designed to reduce California’s greenhouse gas emissions to 40 percent below 1990 levels by 2030. 

The findings, published in the journal Environmental Research Letters, could inform similar carbon offset efforts around the globe, particularly those in semi-arid environments, which cover about 40 percent of the planet .. . 


Will Icebreaker VF deal get OIO tick?

November 4, 2017

Icebreaker, one of the company’s that made merino fashionable, is selling to a USA company  but the deal needs OIO approval:

US-based VF Corporation needs Overseas investment office approval to buy Kiwi merino clothing maker Icebreaker, meaning the deal is worth at least $100 million. The terms of the deal were not disclosed.

Merino producers have been getting a lot of pressure to sign up to 10-year contracts with Icebreaker. The proposed sale explains that and a good number of committed producers would have made the deal more attractive to the buyer.

VF Corporation has a market capitalization of around US$28 billion and its portfolio includes The North Face, Timberland, SmartWool, Vans, Wrangler and Lee. In its third-quarter result, the company forecast its 2017 revenue would be approximately US$12.1 billion.

Icebreaker had annual sales of $220 million, of which 86 percent were in offshore markets. Its own outlets and e-commerce sales make up 32 percent of sales, according to the company’s latest statement.

While the terms of the deal were not disclosed, Icebreaker confirmed the need for OIO approval due to the size of the transaction, implying a minimum value of at least $100 million. In a separate statement, VF said “the purchase price is not material to VF.” It also clarified that it expects the transaction to close in April 2018. . . 

I would think the deal would be worth considerably more than $100 million. Regardless of how much more, closure by next April is probably very optimistic.

Friends who have had dealings with the OIO, as sellers and buyers, said it was a very time-consuming process.

Unless it gets a straight decline from the outset, it won’t be any faster under the new government.

According to Icebreaker, the deal creates an expanded opportunity for the New Zealand merino industry. “This is a once in a lifetime opportunity for our global Icebreaker team and for our New Zealand wool suppliers to introduce a whole new universe of consumers to the benefits of sustainably farmed, ethically sourced, New Zealand Merino wool,” said Icebreaker founder Jeremy Moon.

John Brakenridge, CEO of the NZ Merino Company, noted VF have also had a long-term commitment to the New Zealand Merino industry through their investment in SmartWool and NZ Merino has worked with SmartWool in areas such as sustainability and social responsibility.

“Today we are seeing record demand and prices for New Zealand merino wool …the synergy of these two brands working as sisters from the same stable to build increased awareness of the Merino apparel category represents an exciting new development for the New Zealand merino wool industry,” he said. . . 

People tend to be less opposed to selling land to foreigners than selling companies.

But no matter who owns it the land and the business carried out on it stay here.

When a company is sold, there is no guarantee anything will stay in New Zealand.

Icebreaker is a New Zealand company and its clothing is designed here using locally grown merino wool but manufacturing has been done overseas for several years.

If the sale does go ahead, people who want New Zealand made merino will still have the choice of buying from companies like Glowing Sky and Mons Royale.

 


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