Rural round-up

27/07/2021

Opportunity obscured by rules – Bryan Gibson:

Farmers across the country descended on towns and cities on Friday to protest against the raft of reforms they say unfairly target their livelihoods.

When asked about the protests last week, the Prime Minister agreed that reform was coming thick and fast and that it was a challenging time for those working in the primary industries.

But she maintained that transforming our economy to limit climate change and environmental degradation would only get harder the longer it was left.

That may be true, but what is also true is that if a sector of society feels that its only way forward is to take to the streets, then there’s been a failure of communication and leadership. . .

Buller farmers in recovery mode – Peter Burke:

With calving just a few weeks away, farmers in the Buller district are now busy repairing damage to their properties.

The recent floods caused stock losses, ruined pasture and damaged sheds and tracks on about a dozen farms in the district.

This latest flood is being described as the worst anyone in  Westport has seen in their lifetime but most of the damage is in the town rather than in the rural areas. . .

Labour’s immigration policy could do lasting damage to the Pacific – John Roughan:

Next Sunday Jacinda Ardern is scheduled to make another of those nauseating apologies for the past, this time for the “dawn raids” against suspected overstayers from the Pacific Islands that happened a few years before she was born.

It’s not just the assumed moral superiority of the present that always gets up my nose, it’s also the injustice to people now dead and unable to speak for themselves. It makes me wonder what apologies the future might make for things governments are doing now.

One potentially regrettable project is particularly ironic. The Prime Minister who will apologise for the dawn raids next weekend is presiding over an immigration “reset” that could do far more lasting damage to the Pacific Islands than the clumsy policing their New Zealand expats suffered in the 1970s.

It surprises me that a Labour Government takes a dim view of seasonal work that enables Pacific Islanders to come here and earn some good money picking fruit for a few months. In a recent TVNZ item on our travel bubble with the Cook Islands we heard people there lamenting the loss of their younger people migrating permanently to New Zealand. . .

Spring Seep wins at Dairy Innovation Award – Gerald Piddock:

Spring Sheep Milk has beaten global giants Nestle and China Feihe to win the best infant nutrition category product at the World Dairy Innovation Awards.

The company won the category with its Gentle Sheep infant milk drink, beating Wyeth Nutrition, which is owned by Nestle, Chinese infant formula giant China Feihe and Blueriver Nutrition Co.

Spring Sheep’s general manager of milk supply Thomas Macdonald says they are proud of the achievement.

“They are some pretty big names playing in the infant space globally and a sheep milking company from New Zealand managed to beat them. It also validates the consumer story,” Macdonald said. . .

Direct drilling no-till system good – Shawn McAvinue:

Southern growers featured at the Federated Farmers Arable Industry Awards in Christchurch earlier this month. Shawn McAvinue talks to them about their mixed cropping operations.

The Horrell family has been cropping for five generations in Northern Southland and the future is looking bright.

Grain Grower of the Year winner Morgan Horrell said his great-great-grandfather started the farm in the 1860s.

The chances of his children — Zara (23), Jake (21), Sam (14) and Dan (12) — continuing on for a sixth generation was looking good.

“Sam’s driving tractors already.” . .

New grain legume varieties a step closer to commercial use:

Plant Research (NZ) Ltd is a New Zealand based R&D company specialising in the development of new grain legume varieties.

This summer, the company enters the final stages of development and multiplication of chickpea and soy varieties developed specifically for New Zealand’s maritime environment.

Managing Director and Principal Plant Breeder Adrian Russell says his team have worked through a large number of potential genetics from both programmes to identify varieties that are adapted to our unique environment and have functional traits for product development in the plant protein space. . .

The Golden Goose: Farmer’s poem for Jacinda Ardern – Graeme Williams:

Inspired by the Howl of a Protest last week and concerned with government regulations on the rural sector, East Coast farmer and bush poet Graeme Williams has put pen to paper in a plea to Jacinda Ardern to look out for farmers. He shared his poem, The Golden Goose, with The Country today.

The Golden Goose, by Graeme Williams

Dear Aunty Jacinda,
A moment if I may,
A response I think is needed,
To the protest the other day.

Farmers are generally too busy,
To rally and cause a stink,
But their overwhelming response,
Must have made you stop and think. . .


Rural round-up

17/02/2021

Cows, coal and carbon – Elbow Deep:

I was once told by someone much smarter than me that the Green Party policy of today will be Labour Party policy in 10 years’ time. Even without that level of insight, nobody who has been paying attention to the political discourse for the past decade will be very surprised at the Climate Change Commission’s recent report, though there do seem to be large numbers of people shaking their heads in dazed bewilderment.

The Commission’s report largely reflects the findings and recommendations of the Royal Society’s 2016 one, Transition to a Low-Carbon Economy for New Zealand. That report was essentially ignored by the government of the day, but it is extremely unlikely the current government will treat the latest version in the same manner.

The report calls for, among other things, an immediate end to the construction of coal fired boilers, an end to the burning of coal for process heat by 2037 and a reduction in the national dairy, beef and sheep numbers of 15% each by 2030.

No matter how climate hesitant you might be or how little New Zealand has contributed to global warming since pre-industrial times, the Commission estimates that figure to be 0.0028 degrees C, the fact remains our share of global warming is 4 times greater than our share of the total population and 1.5 times greater than our share of landmass. . . 

Waterways benefit from farmer’s ‘dream’ :

A Southland dairy farmer has invested $200,000 over the last 10 years in planting and fencing around a river and creeks on his property – an outcome of a dream he had back in his native Zimbabwe.

Edwin Mabonga, who together with his wife Fungai milk 850 cows on a 270ha farm bordering the Aparima River at Otautau near Invercargill, used to spend time in Zimbabwe reading books about New Zealand.

“It was always a big goal of mine to come to New Zealand because I saw it as being the world benchmark for dairy farming,” he says. “We used to read books to learn as much as we could and eventually decided to move to find out what the big deal was.” . . .

Agribusiness icon helping to change dairying :

Project to reduce nitrate run-off from farms attracts critical corporate clout.

A key environmental project on lower North Island dairy farms has attracted renewed corporate backing – and a grandmother is helping bring it about.

Two of New Zealand’s biggest business players, Fonterra and Nestle, have joined a DairyNZ-led project in the Tararua district in which a blend of the herb plantain is being sown in pastures with the aim of both reducing nitrate run-off into waterways and lowering on-farm greenhouse gas emissions.

The two companies are bringing their muscle to the project by providing additional funding to enable the 50 farms taking part to increase the amount of plantain they grow. . . 

Lasers used as bird deterrent – Jared Morgan:

Using lasers to control birds might sound like science fiction but Ewing Stevens hopes the technology will save his grapes from the peckish pests.

At age 94, Mr Stevens believes he is New Zealand’s oldest vintner but his age is no barrier to being at the cutting edge of technology when it comes to managing his crop at Anthony James Vineyard near Alexandra.

This week three lasers were installed at his Hillview Rd vineyard to replace labour intensive and expensive bird netting.

Mr Stevens said the idea was born out of a conversation with Viticultura co-owner Timbo Deaker, whose Cromwell-based company manages Mr Stevens’ grapes through its vineyard management service, about three years ago. . . 

FMG Young Farmer of the Year Northern Regional Final postponed :

Following Auckland’s move to Alert Level 3 and the rest of the country to Alert Level 2, we have made the decision to postpone the Northern FMG Young Farmer of the Year Regional Final based on Government recommendations.

Given the uncertainty around the latest COVID-19 community cases, postponement of the event is the safest and most cautious option despite contingency plans we have in place to run events during an alert level two.

Like other businesses, organisations and events, we need to respond and do our part to limit the potential spread of this virus.

The safety of our competitors, staff, sponsors and spectators is our main priority. It is imperative that we protect our people and do not put anyone at risk. . .

 

Grange visit a flashback for ‘Birley girls’ – Shawn McAvinue:

A former Taieri farm girl got her dying wish to say goodbye to the homestead she was raised in.

Joan King (83) and her sister Patricia Snell (75) were young girls when their family moved on to The Grange farm in East Taieri.

Their parents, Percy and Rita Birley, managed the nearly 300ha sheep, beef and dairy farm.

The women, from Motueka and Auckland respectively, visited the homestead recently to celebrate Mrs King’s birthday. . .


Rural round-up

15/12/2020

Scientists press to put ‘regenerative farming’ to the test – Sally Rae:

A call for proposals for projects that will investigate regenerative farming practices “can’t happen soon enough”, New Zealand Institute of Agricultural and Horticultural Science president Jon Hickford says.

In a strongly worded statement, the NZIAHS said it was “concerned about the dearth of sound science underpinning the hype surrounding regenerative agriculture”.

The organisation had published a series of articles from scientists from different disciplines in this month’s issue of its online AgScience magazine which showed regenerative agriculture was “more hype than reality”, it said.

MPI said there was increasing interest from farmers and the wider community about regenerative agricultural practices. . . 

Fonterra, Nestlé and DairyNZ join forces to tackle nitrogen leaching:

Fonterra and Nestlé are teaming up with DairyNZ to expand a promising plantain trial to help improve waterways and reduce on-farm greenhouse gas (GHG) emissions.

Incorporating certain varieties of plantain into a cow’s diet has been shown to reduce the nitrogen concentration in their urine, which can leach through soil into groundwater.

To test the benefits in local pastures, DairyNZ has been leading the Tararua Plantain Project in the lower North Island, where farmers have been growing the leafy herb for their cows. The Ministry for Primary Industries is also involved as a key contributor. . .

Rams key to breeding top lambs – David Hill:

North Canterbury rams are the secret to breeding mint condition lambs, according to Marlborough farmers Ali and Stu Campbell.

The Marlborough father and son duo paid tribute to their ram breeders, Chris and Jane Earl, of Scargill in North Canterbury, after being announced as the winners of the Canterbury A&P Association mint lamb competition on Friday.

“It’s nice to give some recognition to Marlborough, but we couldn’t do it without our ram breeder,” Stu Campbell said.

“Chris and Jane look after us well and we appreciate what they do for us. . . 

My challenge to you – Anna Campbell:

For as long as I have been involved in agriculture, our industry has lamented our poor image and the fact that we struggle to attract young people.

I have heard people say we need a rebrand, agriculture is a term which brings to mind a lack of sophistication. In the game of cricket, an “agricultural batsman” is someone who dispatches the ball to “cow corner” in a rather basic manner!

Suggesting an agricultural career to a youngster will not automatically make them think about producing the finest food in the world, advanced genetics, machine learning, international food chains, global food security, financial modelling or GIS mapping. Yet, those of us in the industry understand agriculture encompasses all of that and so much more.

Various government and industry initiatives have produced scholarships for students and held open days to attract youngsters. This has helped, but we need more – we face an aging workforce, challenges in world food supply systems and a growing rural-urban divide. It will take a commitment from all agriculturalists to turn the tide – what might that commitment look like? . .

Shepherding when I’m 64 – Paul Brut:

I’m 64 and my heading dog is 63. We were watching a ewe standing awkwardly on a steep face above a dirty gully. She was trying to lamb but with only one foot showing I doubted she would cope on her own.

We needed to catch her. At 64 you can’t just do it, you need a plan. A shepherd’s crook is essential but I had temporarily misplaced mine… agility isn’t the only thing that deserts you at 64.

There was a whiff on the cool October breeze, at least about me, and I remembered where I had left the crook. Earlier that morning I had lambed a hogget with lambs that had been long dead inside her. That must be one of the most unpleasant jobs of shepherding as the state of decomposition meant the second lamb didn’t come out whole.

The extreme thing, apart from the smell is that that hogget will most likely survive. It’s a marvel that a mammal’s physiology can contain that level of infection and not let the body succumb. . .

Farmers could be ‘unintended victims’ of Wealth Tax plan:

Struggling farming businesses could be unintended victims of the recently proposed Wealth Tax plan, NFU Mutual has warned.

The Wealth Tax Commission issued its report this week, proposing a one percent tax for the next five years on individual wealth over £500,000.

The pandemic has placed a significant strain on the UK economy, and the government is exploring a number of different revenue-raising options.

The proposed tax would apply to all wealth, including homes and other property such as farms, pensions, as well as business wealth. . . 


Rural round-up

12/12/2018

Inspirational focus in driving NZ wool business honoured – Sally Rae:

Dave Maslen is a reluctant sustainability superstar.

The New Zealand Merino Co’s general manager for markets and sustainability was a finalist in the sustainability superstar category in the recent NZI Sustainable Business Network Awards.

The category, won by Waikato dairy farmer Tracy Brown, celebrated people who inspired and led others to make a difference.

Mr Maslen’s own nomination came as a surprise and he was reluctant to be singled out, saying it was “most definitely” a team effort. . . 

Leaders discuss sustainable farming – Sally Rae:

Agriculture, as a whole, needs to be brave.

That was the take-home message for North Otago dairy farmer Lyndon Strang after attending the annual DairyNZ Dairy Environment Leaders Forum in Wellington recently.

The three-day event was attended by nearly 100 dairy farming leaders who discussed sustainable farming and progressed goals for the future.

Mr Strang and his wife Jane milk 450 cows at Five Forks and run a self-contained operation, wintering all cows, rearing young stock and growing the majority of their supplements. . . 

Waimea Dam to aid eels on journey to Pacific – scientist – Tracy Neal:

The Waimea Dam will improve the health of the river downstream, and ensure the path of eels to their breeding grounds in the Pacific is not hindered, a freshwater scientist says.

The Tasman District Council recently voted to go ahead with the $105 million irrigation and urban supply scheme, despite levels of public opposition, mainly over cost.

Scientist Roger Young, from Nelson’s Cawthron Institute, has been involved in the project since its inception. . .

More farmers feel under financial pressure:

Farmer satisfaction with their banks is dropping, and more are feeling they are under financial pressure, the Federated Farmers November Banking Survey shows.

While 73.7% of the 750 farmers who responded to the Research First-conducted survey said they were satisfied or very satisfied with their bank, that was a drop of 5% since the previous survey in May.   It’s also the lowest satisfaction level recorded in any of the 10 surveys conducted since 2015.

“The results show a need for renewed efforts to improve relationships between farmers and banks,” Federated Farmers Economics and Commerce spokesperson Andrew Hoggard says. . . 

SenseHub monitors treats – Sonita Chandar:

Consumers of Nestle products can be assured the treats they like best have been made with milk from happy, healthy cows.

As part of Nestle’s commitment on animal welfare it has partnered with Antelliq’s Allflex on a pilot programme to monitor dairy cows’ wellbeing through Allflex’s SenseHub on several Nestle farms.

The collaboration aims to provide Nestle with full visibility into the wellbeing of individual cows and the herd according to a set of key performance indicators. . . 

Group of sheep breeders running parasite resistant stock:

A group of leading sheep breeders have formed WormFEC Gold to show farmers that breeding for parasite resistant genetics will strengthen flocks and save time and money on-farm.

Growing concerns from farmers around increasing levels of drench resistance, rising farming input costs, and issues getting farm labour have prompted 10 WormFEC breeders from across New Zealand to join forces. The breeders’ group brings together more than 200 years combined experience breeding highly productive, parasite resistant rams.

Chairman Robert Peacock of Orari Gorge Station in South Canterbury said the WormFEC Gold group aims to show farmers that breeding sheep for parasite resistance is achievable and will save farmers time and money. He said breeding animals with natural resistance to parasites is part of the long-term sustainable solution for parasite management. . . 

Researchers conclude livestock have no detectable effect on climate – Amanda Radke:

Cow burps are destroying the ozone layer — we’ve all heard that one, and frankly, it’s time for the industry to ditch that myth once and for all.

As our industry zeroes in on topics of sustainability and ways we as beef producers can improve for the better, I continue to beat the same drum — cattlemen and women already do a spectacular job of managing our land and water to produce more beef using fewer resources.

Simply stated, beef production isn’t just sustainable; it’s regenerative. And despite what the naysayers claim, cattle grazing and consuming by-products of crop production play a critical role in our ecosystem. . .

 


Rural round-up

24/04/2018

Precious arable land – Eric Crampton:

I just don’t get the fixation with making sure that nobody builds a house on agricultural land.

The government plans to make it harder for councils to approve new homes and lifestyle blocks on productive land near urban areas.

A report out today, called Our Land 2018, shows New Zealand’s urban sprawl is eating up some of the country’s most versatile land.

It highlights that between 1990 and 2008, 29 percent of new urban areas were built on some of the country’s most versatile land. . . 

We are growing houses instead of food – Feds:

We are losing our most productive land to houses – that’s the most significant point Federated Farmers takes from the ‘Our Land 2018’ report released today.

The Ministry for the Environment report shows the pressure New Zealand agriculture is under from the loss of highly productive and versatile land due to urbanisation.

There was a 10% increase in urban areas from 2002 to 2012 and the loss would be even more now with the pressure on housing in the last few years. . . 

Auckland Council rates policy fails to value private land conservation:

Auckland Council is proposing to remove rates remission for privately owned land protected by QEII covenants.

QEII National Trust CEO Mike Jebson says “we are submitting against Auckland Council’s proposed policy. This policy discourages landowners from protecting natural heritage areas on their properties and fails to support protection of biodiversity on private land in the region.”

“QEII covenants often protect the habitat of threatened indigenous species, and provide corridors linking larger areas of private and public land set aside for conservation. The work landowners do in protecting their land, like excluding stock from the protected area, is critical in encouraging regeneration of native vegetation.” . .

 A2 shifts from a brand to a category, with Nestle and Mengniu now on board – Keith Woodford:

It is only six weeks since mega-sized Fonterra in New Zealand and medium-sized Freedom Foods in Australia announced their intention to produce A2 dairy products, these being products free of A1 beta-casein.  Since then, both Nestle and Mengniu have stepped up to announce that they too are developing brands for A2 infant nutrition products.

To place this in perspective, and as reported by Rabobank, Nestle is easily the largest global dairy company by turnover, followed by Lactalis, Danone, Dairy Farmers of America and then Fonterra. Further down comes Mengniu at number 11 globally, but number 2 in China.

It is now evident that dairy products free of A1 beta-casein are shifting from being a niche brand belonging to The a2 Milk Company (A2M) to becoming a broader dairy category. This was always going to happen, but the speed at which it is now occurring is taking most people by surprise. . . 

Livestock Improvement buys back $5.3M of shares to simplify structure – Tina Morrison:

 (BusinessDesk) – Farmer-owned cooperative Livestock Improvement Corp will buy back $5.3 million of its shares as part of its move to simplify its share structure.

In March the company’s shareholders voted to reclassify all cooperative control shares and investment shares into a single class of ordinary shares. Livestock Improvement said today that a small number of shareholders had elected to exercise their minority buy-out rights under the proposal. . . 

#SustainabilitySunday: A tale of two farms – Uptown Farms:

What you see above is crazy exciting for our family!

These two pictures are from two fields, only separated by an old fence row. The photos were taken about 4 foot apart. 

The farm in the bottom photo has been traditionally managed for north Missouri row crop farms. You see larger and more compacted soil clods, fairly typical of dirt in the area. 

On the farm in the top photo we have been using no-till and cover crop practices for three growing seasons. What you see, and would feel if you were here, is a light and loose soil. It’s full of organic matter without any compaction. (Think of potting soil compared to dirt from your backyard.) 

We have actually added soil to this farm by allowing crop residue and cover crops to decompose and turn to dirt. In only three years, we have changed the soil makeup of our farm.  . . 

Scales hunts for NZ agribusiness acquisitions to fit with apple export business – Tina Morrison:

 (BusinessDesk) – Scales Corp is eyeing potential agribusiness acquisitions that would fit well with its export apple business as the country’s largest apple grower aims to become the foremost investor in and grower of New Zealand agribusiness.

“We think New Zealand agribusinesses are in a good space, they make good products, and sell them to Asia,” chief executive Andy Borland told BusinessDesk. “We have over the years developed our skills around exporting and dealing with Asia, particularly China, and we are looking at businesses within New Zealand that would work with those sort of dynamics and be complementary to our apple business. We are really looking for those sort of New Zealand opportunities.” . . 

Good Idea! Feds Likes NZX Primary Sector Index Concept:

Federated Farmers congratulates the New Zealand Stock Exchange for coming up with the idea of creating a ‘primary sector index’ for investors.

The NZX intends to launch the new primary sector index later this year, where it will sit alongside the existing indices for other sectors such as energy, healthcare and real estate.

The index will include 15 companies, including Fonterra and A2 Milk. . . 

China begins to challenge multinationals in domestic infant formula market, says GlobalData :

CITIC Agri Fund Management, backed by Chinese state-owned CITIC Group, has recently agreed to buy a 25.18% stake in Hong Kong-based Ausnutria Dairy, one of the leading local suppliers of infant formula in the Chinese market. This clearly marks a change in direction for the government, which has hitherto been focusing its efforts on regulation in this sector, says leading data and analytics company GlobalData.

Local suppliers in China are yet to recover from the melamine contamination scandal in 2008, with parents continuing to put their faith in foreign-made milks even after a decade. . . 


Rural round-up

07/08/2015

Rabobank Report: Moving Globally; What role will China play in the global beef market?:

Rabobank sees great potential in China’s beef market, and believes that Chinese investors will play an influential role in the global beef market over the next decade. According to Rabobank’s latest report, Moving Globally: What role will China play in the global beef market?, China’s beef demand will grow an additional 2.2 million tonnes by 2025. Driven by the weak domestic production, but with strong demand, the beef sector will likely become the first agricultural sector where China has high integration with the rest of the world and Chinese investors are expected to play an influential role in the global beef market.

In addition to the volume gap, China’s beef market also demonstrates potential for value-added and branded beef products. Strong demand from the food service and retail market channels provides opportunities for both Chinese and foreign companies in the further processing sector. . .

 

Fonterra’s restructure more about poor strategy than milk price – Allan Barber:

When Fonterra was formed back in 2001, there was a great sense of optimism about the potential for a New Zealand dairy company to compete on a truly global scale. The industry’s infighting and parochialism would be a thing of the past and the clear intention was to use the greater efficiencies and scale to create a substantially better performing business model.

The big question 14 years down the track is whether that objective has even remotely been achieved. Fonterra is the world’s leading exporter of milk products and the fourth largest dairy processor, so achievement to date appears consistent with the objective. But for many observers there was another, more ambitious expectation: to establish an internationally competitive value added business to compare and compete with Nestle and Danone. . .

Dairy sector needs to work together to manage downturn:

National accounting and business advisory firm Crowe Horwath is calling on all stakeholders in the dairy industry to work together to help the sector get through the current difficult period of lower milk solid prices.

On the back of dairy companies announcing a string of forecast milk price downgrades and prices continuing to plunge at the Global Dairy Trade (GDT) auctions, predictions are the current hard times for the dairy sector could potentially last another 18 months to two years.

Crowe Horwath says given the scale of the challenge now being faced by the industry, doing nothing is not an option for anyone involved, including farmers, banks, farm consultants and business advisors. . .

 

Fish & Game Calls for Fonterra to Lift Its Game After Pollution Conviction:

Fish & Game says Fonterra needs to lift its game after the dairy giant was fined $174,000 for several pollution offences under the Resource Management Act.

The Bay of Plenty Regional Council prosecuted Fonterra for polluting the and other waterways after several wastewater system failures at Fonterra’s Edgecumbe dairy plant.

The offences occurred several times between September 2014 and April 2015.

Fonterra pleaded guilty to six charges and was sentenced in the Tauranga District Court by Judge Smith. . .

 

I’m worried! I’m sympathising with organic farmers over a land use conflict! – Jim Rose:

Writing this blog of sound mind and sober disposition, I still have considerable sympathy with two organic farmers over a land use conflict they have with the neighbouring gun range.

Local land use regulations allows a gun club to set up 600 m away with competitive shooting days all day for 88 days a year. That is a voluntary self restraint. They could hold shooting competitions every day of the year. The local land use regulations allow the use of guns on rural land. The gun club used this absence of a prohibition on the use of guns in the frequency of use to set up a gun range to fire guns all day long on rural land. . . .

Market Continues to Show Strength:

New Zealand Wool Services International Limited’s General Manager, Mr John Dawson reports that a continuing upward trend at today’s South Island wool sale saw prices increase.

The weighted indicator for the main trading currencies decreased from 0.6314 to 0.6181, down 2.1 percent. The US dollar rate was down to .6520 from .6670 which meant increased prices in NZC terms.

Of the 5,564 bales on offer 5,260 sold, a clearance of 95 percent. . .

 

Matariki Forestry Group announces recapitalisation:

Matariki Forestry Group (“Matariki”) today announced a NZ$242 million capital infusion from Rayonier Inc., its largest shareholder. This injection of capital will be used for the repayment of all outstanding amounts under its existing NZ$235 million credit facility and for general corporate purposes.

Upon completion of this capital infusion, Rayonier’s ownership in Matariki will increase from 65% to approximately 77% and the Phaunos Timber Fund ownership will be reduced from 35% to approximately 23%. The capital infusion is subject to certain closing conditions including New Zealand Overseas Investment Office approval and is expected to close by year end. Matariki will realise interest cost savings of approximately NZ$15 million annually as a result of the recapitalisation. . .

 

NZARN says strategic feed approach key to farmer viability:

Nutrition experts have entered the milk price payout debate saying that a strategic approach and optimising home grown and supplementary feed resources are key to long-term viability.

The New Zealand Association of Ruminant Nutritionists (NZARN) urges farmers, in an article published on their website (www.nzarn.org.nz) to benchmark themselves against the best performing farms to identify areas for improvement.

Dr. Julian Waters, NZARN Chairman says, “Maximising utilisation of home grown resources such as pasture, silage and crops should be the basis for a profitable business, with a sound strategy to incorporate supplements to increase efficiencies when home grown feed is limited.” . . .

 Internet Provider Puts Farmers’ Wellbeing First:

New Zealand internet provider, Wireless Nation, further demonstrates its commitment to the rural sector in a new agreement with Farmstrong, an initiative to promote wellbeing for all farmers and growers across New Zealand.

Wireless Nation’s zero-rated data agreement means that its Satellite Broadband customers can access Farmstrong’s website without the data counting towards their data cap.

Wireless Nation’s technical director, Tom Linn says he is passionate about making internet connectivity easier for people living in rural areas. . .

New Forests agrees to purchase Marlborough timber plantations from Flight Group:

New Forests today announced that it has reached agreement to purchase approximately 4,200 hectares of freehold land and softwood plantations from the Flight Group. The plantations consist of radiata pine and are located in the Marlborough region of New Zealand’s South Island.

The agreement forms part of a larger transaction by Flight Group, including the purchase of the Flight Timbers sawmilling assets by Timberlink, an Australian timber products processor that is also an investee company of New Forests. Completion of the plantation purchase by New Forests is subject to approval by the Overseas Investment Office. . .

 


Rural round-up

22/06/2015

Fonterra – who loves ya baby? – Tim Hunter:

It’s so ironic. Fonterra [NZX: FCG], whose sole reason for being is to benefit its co-operative members, is so distrusted by them that it must have a Shareholders Council to oversee its board, even though the board is already completely controlled by shareholders.

The co-op is so successful it is the world’s largest processor of milk and the world’s biggest dairy exporter, yet its shareholders complain that its head office is not in a provincial town, even though there are barely any international flights from provincial airports.

Meanwhile, the business has become so economically important to New Zealand that non-shareholders argue Fonterra is too focused on processing milk and should be more like Nestle, which sells a lot of coffee, chocolate and instant noodles (although it probably doesn’t want to talk about noodles right now). . . 

 

Tight times for sharemilkers – Hugh Stringleman:

Most sharemilkers will be unable to write a break-even budget for the new dairy season and face several months of negative cash flows before dairy prices are expected to recover.

That is the market reality facing all dairy farmers, but especially taxing for sharemilkers of all descriptions given the low milk prices, incomes in the $1 to $2/kg range, and the lack of discretionary or deferrable spending.

Industry-wide, considerably more seasonal finance will be necessary because herd-owning sharemilkers (40-50% contracts) face losses between 30c and 50c/kg on all milk produced for the remainder of 2015. . .

 Survey captures cost of compliance – Richard Rennie:

Waikato dairy farmers have invested about $400 million in environmental compliance in recent years, but are uncertain about how long that investment will remain compliant.

New Zealand National Agricultural Fieldays scholar Thomas Macdonald has just issued findings from a survey he conducted on Waikato dairy farmers, determining how much they have invested in effluent management and compliant farm systems. . .

 AgResearch hub remodelled for Lincoln – Tim Cronshaw:

AgResearch’s soon to be built science hub programme will look much different from the operation first envisaged, writes Tim Cronshaw.

AgResearch is about to put out new master plans as more science and agriculture partners join its vision for innovation clusters at its main Lincoln and Palmerston North hubs in a nationwide $100 million restructuring programme.

Originally the research organisation was going to build its science centre for its Future Footprint programme on new ground connecting to the Lincoln University campus with the wider Crown Research Institute precinct.

Townie helps out – Annette Scott:

Christchurch businessman Grant Silvester launched a campaign earlier this month to help get feed to North Canterbury farms.

He has been thrilled at the amazing support the campaign has attracted and is more than confident of trucking in his goal of 500 bales of feed to the region.

Silvester, a self-described townie who sells cars and racing car parts from his Christchurch-based business, had seen how dry farms were while travelling through the area. . .

 Firm friendship: The sports star and the girl inventor – Narelle Henson:

It’s easy to see young inventer Ayla Hutchinson and her mentor, Bernice Mene are mates – even though they clearly have pretty different backgrounds.

Mene is a national figure, accomplished in the world of sport, Ayla is a teen inventor from the fields of Taranaki; introverted, inexperienced and – by her own admission – a little anxious.

Fifteen-year-old Ayla is the inventor of the Kindling Cracker, a wood-splitting device taking New Zealand by storm. She’s just signed “a massive” supply deal with major American corporate, Northern Tools + Equipment. The second 12-metre container of orders needs to be sent soon, but New Zealand demand keeps emptying it. She’s constantly being badgered with interview requests, and everywhere she goes people just keep asking how she came up with that invention. . .


Rural round-up

04/08/2014

Award accepted as tribute to young farmer – Alison Beckham:

Southland dairy farmer Stefan Zeestraten should have been accepting an award at the 2014 Southland Environment awards on Thursday recognising the positive environmental practices he promoted on his family’s three central Southland farms.

Instead, there was a minute’s silence as the 300 people attending paid tribute to the 24-year-old, killed on Monday when his vehicle left the road and hit a power pole north of Winton, about 3am. . .

Young farmers there to support others – Nicole Sharp:

Waimea Valley farmers Andrew and Katherine Welsh are never ones to shy away from a challenge, especially when it comes to farming.

Moving to the Waimea Valley, near Mandeville, six years ago, the pair joined Balfour Young Farmers.

Mr Welsh had previously spent 11 years with the Thornbury club. But what they arrived to took them by surprise.

The Balfour club was nearly closed and had about five members.

It was in recession, and the task for the Welshes was simple: to get the club up and running again. . .

Biodiversity grant enables nursery at wetlands – Hamish Maclean:

A plant nursery should be the focal point for visitors to New Zealand’s largest privately owned wetland by this summer.

A biodiversity funding contribution of $9600 from the Clutha District Council means work can begin immediately on a nursery at Sinclair Wetlands (Te Nohoaka o Tukiuau), wetlands co-ordinator Glen Riley says.

Mr Riley said the wetlands had benefited from 1000-plus volunteer hours already this year. . .

In sheep farming for the long haul – Annette Scott:

Canterbury farmer Chris Allen grew up on a sheep-and-beef farm in Waikato.

He is a licensed aircraft engineer but 20 years ago the farming in his blood lured him back to the land.

He and wife Anne-Marie headed south and bought a 360ha sheep-and-beef property near Mt Somers.

Despite the growing challenges behind the farmgate Allen is upbeat about the red-meat sector’s revival.

“Either you do what you do or you sell out,” he said.

“Dairy is a whole new level of investment that doesn’t interest me, so I do this.  . .

Taking the sting out of honey cowboys:

Comvita chief executive Brett Hewlett is hopeful new labelling rules for manuka honey will flush out what he says are cowboys who are giving the product and industry a bad name.

The interim labelling guidelines, which come into effect in January 2016, will ensure New Zealand is producing quality manuka honey for export.

Comvita chief executive Brett Hewlett said good brands had been using a quality standard, the Unique Manuka Factor, for a number of years but rogue elements within the industry had put it in jeopardy. . . .

Viability of G9 kiwifruit under question:

There are fears a newly developed kiwifruit variety could be a lemon.

An industry leader said there were concerns about the long-term commercial viability of the gold kiwifruit variety known as G9.

G9 was first commercialised, along with another gold variety, G3, in 2010 in response to the bacterial disease PSA which has virtually wiped out the former variety of gold kiwifruit.

About 150 hectares of G9 is grown, much less than G3’s 4000 hectares. . .

Realignment of Fonterra and Nestlé’s Latin American Alliance Takes Effect:

The first step in the realignment of Fonterra and Nestlé’s Latin American alliance has taken effect.

As announced in May this year, Fonterra and Nestlé have revised their 10-year-old Dairy Partners Americas (DPA) joint venture to better reflect each company’s respective strategies.

Fonterra now has a 51 per cent controlling stake in DPA Brazil, with Nestlé holding the balance; and, together with a local partner, Fonterra has taken over Nestlé’s share of DPA Venezuela.

Fonterra’s Managing Director of Latin America, Alex Turnbull, says: “This is an exciting next step for Fonterra and the people in these businesses as they are formally welcomed to the Co-operative.” . . .

 


Fonterra holds 4th place in global dairy rank

16/07/2014

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

02/04/2014

Nestlé scrutinises 50 South Island dairy farms – Yvonne O’Hara:

Global food and beverage manufacturer Nestlé sent a group of representatives to inspect 50 randomly selected South Island dairy farms – including some in Otago and Southland – last week.

The audit is part of a new pilot project between the corporate giant and Fonterra.

However, Fonterra’s global sales director Tim Deane the visit was not linked in any way to the botulism scare last year.

”It had been on the cards for a while,” Mr Deane said.

Nestlé, like other Fonterra customers, regularly visited plant and factories for auditing. . .

Māori dairy farm set to boost Northland’s economy:

Dairy cows will be led into Northland’s Rangihamama milking sheds for the first time officially this weekend, marking the first tangible example of the Government’s aim to increase regional economic development in Northland.

The Ministry for Primary Industries (MPI) has been working with the Omapere Rangihamama Trust (ORT) to accelerate the Trust’s transformation of 278 hectares of Māori-owned land, from grazing to high-productivity dairy farming since 2012.

“Omapere Rangihamama Trust is a model for growing rural development by pulling together a vast number of stakeholders into a larger and more commercially effective operation,” says MPI’s Deputy Director-General Ben Dalton. . .

Two more NZ-specific insecticides hit market:

A project funded by the Ministry for Primary Industries has resulted in more sustainable insecticides hitting the market, to control two major headaches for growers.

The Minor Crops project, which is being managed by a company called Market Access Solutionz, has launched one insecticide to control Kelly’s citrus thrips and scale, and a second to control key pests in leafy vegetable seedlings.

They are the second and third products to have come out of the project, which is aimed at having between 15 and 20 such insecticides ready for sale before funding runs out next year. . .

 New Farming for Profit programme supported – Yvonne O’Hara:

West Otago farmers have voted to run a Farming for Profit programme to replace the older monitor farm programmes.

Beef and Lamb New Zealand (BLNZ) extension manager for the southern South Island, Paul McCauley, said about a dozen farmers attended a meeting in Waikoikoi last Thursday to discuss what type of extension programme they would like to see in their area for the next three years.

”We got a feel from them for what sort of project they wanted and there was a show of support from people keen to go on a steering committee to kick-start it, which was great,” Mr McCauley said. Those attending said they wanted a Farming for Profit programme, which would be run by BLNZ. . .

2014 Gisborne Vintage Report:

Last year was “the vintage of a lifetime” for Gisborne wines. This vintage is shaping up to be equally exceptional.

Gisborne is renowned for sunny weather and Chardonnay, and the two have combined again this year to produce a vintage that has local grape growers and winemakers marveling at its quality. The region’s burgeoning reputation for other white varietals, particularly Viognier and Albariño, will be further cemented with 2014’s superlative harvest.

Warm temperatures in spring ensured excellent flowering, while the cool nights and warm days towards the end of January enhanced véraison (onset of ripening). . .

New owner to grow New Zealand wine brands:

A suite of award-winning New Zealand brands have today been acquired by leading Australian wine company, Accolade Wines, which plans to use its global reach to grow the brands.

The deal, announced last November pending Overseas Investment Office approval, has been finalised following regulatory approvals, and includes the Mud House, Waipara Hills, Dusky Sounds, Haymaker and Skyleaf brands and their assets and operation of Waipara Hills cellar door and café.

Accolade Wines General Manager Asia Pacific, Michael East, said the company had been keen to enhance its portfolio of New World wine brands and had been looking for brands which would complement its existing portfolio for some time. . . .


Fonterra still #4 in global dairy

11/09/2013

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

19/07/2012

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.


Fonterra #1 world processor

25/06/2009

The International Farm Comparison Network has judged Fonterra the number one milk processor in the world.

IFCN benchmarked 600 milk processors in more than 70 countries and found that the top 21 processors represent just 21% of world production.

Fonterra, at number 1, processes 2.7% of world production. It was followed by Dairy Farmers of America, Nestlé, Dean Foods and FrieslandCampina.

India produces 114.4 million tonnes of milk making it the top producer by volume. New Zealand is ninth with 17.3 million tonnes.

The report says the dairy crisis is global, affecting 150 million dairy farming families.

The world price for milk reached $US20 (15 Euro) for 100 kilos in 2008 but IFCN found only 10% of the world’s milk can be produced at that price.

It said that price isn’t sustainable unless the market is distorted by policy and that dairy policy will be the main driver for the future milk price level.

I’m not sure what they mean by policy but I suspect it means political interference resulting in subsidies and/or quota.

The NBR has Fonterra’s reaction to the report.


Fonterra must apply NZ stds in China

20/04/2009

Prime Minister John Key sees opportunities for New Zealand to help China with its food safety standards.

He’s right but with the opportunities come risks, one of which is an association with New Zealand or New Zealand companies and their products if standards aren’t up to scratch.

Another is the difficulty of  transferring our standards to a country with a very differenct culture, customs and ethics.

The significance of Fonterra chairman Henry Van der Heyden accompanying Key hasn’t been missed. The company was badly bitten by its involvement with Sanlu but is looking for fresh opportunities in China.

They will have learnt from the Sanlu disaster, but I’m not yet convinced they have learnt all the lessons and realise all the risks.

One of these is the danger of selling infant milk powder in a country where companies don’t abide by the International Code of Marketing Breast Milk Substitutes.

The code was developed by the World Health Organisation in 1981 and prohibits almost all advertising of breast milk substitutes to the public.

If Fonterra is associated in any way with companies which disregard the code it risks an international backlash.

Baby Milk Action is an organisation  which monitors the baby food industry. Its website shows Sanlu advertisements which contravene the international code and it has a campaign to boycott Nestle because it breaches the code.

 If Fonterra wants to invest and operate in China it must not only ensure that the animal welfare and food health and safety standards which it requires in New Zealand are adhered to there, it must also ensure none of its produce is advertised in breach of the ICMBMS.


Melamine taint prompts recalls in Sth Korea

05/10/2008

Nestle and Mars branded snacks made in China have been recalled in South Korea after melamine was detected in samples.

The Korea Food and Drug Administration says the industrial chemical has been found in M&M’s and Snickers peanut Fun Size, both produced by Mars in China.

Kit Kat bars from Nestle were also found carrying melamine, bringing the total number of melamine-detected items to 10 in Seoul.

The report doesn’t mention whether the amounts of melamine detected were at dangerous levels, but given the deaths and illnesses in China recalls are a sensible precaution.


Melamine map

01/10/2008

Our competitiors will love this:

Map

New Zealand is in purple, denoting that melamine has been found in products here. It doesn’t explain that it was in minute quantities: New Zealand Food Safety Authority Dr Geoff Allen said:

“Without exception, all results fall below the safety threshold set by NZFSA, and also fall below any safety limits set by other food safety regulators around the world including US and EU,” he said.

NZFSA has set a 1ppm limit on melamine in infant formula, a 2.5ppm limit on melamine in foods on shop shelves, and a 5ppm limit on foods which might be used as ingredients.

“From all 116 tests there is clearly no indication of any deliberate adulteration,” he said. “Based on results to date we are confident that all New Zealand dairy products are fully compliant.”

Tatua chief executive Paul McGilvary told NZPA though the NZFSA, and major multinational food companies including Nestle and Heinz have argued that low-level melamine contamination does not pose a health risk, the Chinese dairy scandal involving Fonterra’s joint venture Sanlu has triggered consumer sensitivities around the world.

Global markets had been sensitised to melamine contamination, and consumer perceptions were important even where contamination levels were so low they did not present a health risk, he said.

Emotion and perception will beat the facts in food safety and our competitors will be very keen to use this to their advantage if they can.


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