Rural round-up

Fall in farm worker deaths ‘encouraging’ – Alexa Cook:

The number of deaths and serious injuries in the farming sector have dropped this year.

Figures from WorkSafe show that this year, up until 1 October, there have been nine deaths in agricultural workplaces, compared to an average of 15 deaths for the same period each year from 2014 to 2016.

Statistics show that the agricultural sector has had almost four times the number of workplace deaths than forestry, construction and manufacturing since 2011. . . 

Nine vying for three spots in Farmlands director elections – Sally Rae:

Voting is open in this year’s Farmlands director elections and there is a strong southern presence among the South Island candidates.

Nine candidates will contest the three director vacancies this year, with elections required in both the North and South Islands.

The South Island vacancy will be contested by former long-serving Alliance Group director Murray Donald (Winton), former Otago regional councillor Gary Kelliher (Alexandra), accountant Mel Montgomery (Southland), former Federated Farmers national board member David Rose (Southland) and current Alliance Group director Dawn Sangster (Maniototo). . . 

Alliance plans capital spending of $54:

Alliance Group is investing $54million in capital expenditure during the next year.

Outlining the investment at a series of roadshows throughout the country, chief executive David Surveyor said the success of the business strategy meant the co-operative was in a position to reinvest to continue to build the company’s operational performance.

In addition to a pool payment, the company would have a bonus share issue and reward farmer shareholders by increasing their shareholding in the co-operative.

The level would be based upon the supply of lambs, sheep, cattle, calves and deer during the 2017-18 season, Mr Surveyor said in a statement. . . 

Possum peppering – still totally implausible, seven years on – Alison Campbell:

“Kerikeri award entry turns possums into burning issue“, proclaims a headline in the Northern Advocate.

The story is about an entry in the WWF-NZ’s Conservation Awards for 2017; I hope the judges have a good grasp of science and scientific method. From the article:

The entry from Kerikeri promotes a new take on an old-world biodynamic method of ridding fields of rodents and other furry pests.

It is called peppering, and involves burning the pelts and carcasses of said pests until they’re little more than ash, grinding it finely, mixing it with water and “spray painting” the substance back on the affected land.

Apparently, this version of the ‘traditional’ practice is new in the sense that so far it has not been applied because it lacked ‘scientific background’. . . 

Sheep Meat And Beef Levies to Remain Unchanged:

Beef + Lamb New Zealand (B+LNZ) announced today that sheep meat and beef levies will remain unchanged for the levy year commencing 1 October 2017.

B+LNZ Chairman James Parsons says the Board has reviewed budgets and activities for the financial year commencing 1 October 2017 and that the sheep meat levy on all sheep slaughtered would remain $0.60 per head and the beef levy, on all cattle slaughtered (including beef cattle and dairy cattle but excluding bobby calves), at $4.40 per head GST (exclusive). . . 

Voting for the 2017 Fonterra elections and resolutions underway:

Voting is now open for the 2017 Fonterra Board of Directors’ Elections, the Shareholders’ Councillor Elections in 10 wards, and six Annual Meeting resolutions.

This year Shareholders have the opportunity to elect three Fonterra Directors. The three candidates are Independent Nomination process candidates Brent Goldsack, Andy Macfarlane and John Monaghan. Each candidate requires Shareholder support of over 50% of votes to be elected. . . 

Farmers Fast Five: John McCaskey – Claire Inkson:

Farmers Fast Five : Where we ask a Farmer five quick questions about farming, and what agriculture means to them. Today we talk to John McCaskey : Pioneer of the Wine Industry, Farmers Advocate, Entrepreneur, and Proud Farmer.

1….How long have you been farming?

Since I was big enough to hold a bottle and feed a lamb—say 1939! My infant years were filled with helping feed pigs & chooks progressing to milking the house cow and churning butter after school! By age 10 I was going to be a farmer! I passed all agriculture subjects for School Cert 1954 . . 

New deal sees Palgrove partner with NZ super fund –

Leading Queensland seedstock producers, David and Prue Bondfield, Palgrove, are the latest agribusiness to partner with a superannuation fund in order to grow their business.

The Bondfield family released a statement on Wednesday saying their business, had entered into a partnership with the New Zealand Superannuation Fund (NZSF). The terms of the transaction remain confidential.​  . . 

Select Harvest rejects Arab takeover, launches $65m local capital raising – Andrew Marshall:

Select Harvest has more than 7000 hectares of almond plantations likely to deliver about 15,800 tonnes of crop next year.

Hot on the heels of rejecting a $430 million Arab takeover offer, big almond growing and nut processing business, Select Harvest, has launched a share market capital raising bid for about $65m.

Select has already placed 10.7m new shares worth about $45m with institutional investors. . .

 

 

OK there, not ok here?

The New Zealand superannuation fund has taken a stake in an Australian cattle stud:

 The New Zealand Superannuation Fund has made its first offshore farm investment, taking a stake in Australian beef stud Palgrove for an undisclosed amount.

The deal, which has received approval from the Australian Foreign Investment Review Board, will increase the fund’s rural land portfolio to 33 farms worth approximately $340 million, it said in a press release. In its 2016 annual report, the Fund said it owned 21 farms valued at $204 million. As at Aug. 31 this year, however, it had 1 percent of its $35.7 billion fund invested in rural farmland.

Chief investment officer Matt Whineray said Palgrove is a high quality, highly successful business that complemented the Fund’s existing investment portfolio. “We are pleased to make the fund’s first offshore investment under our rural land strategy. We continue to see rural land as an attractive long-term investment and a good diversifier for our portfolio,” he said.

Palgrove is based near Stanthorpe, Queensland, but has livestock and properties now spread across Queensland and New South Wales, according to its website. The stud currently runs about 5,000 head of registered cattle.

The Super Fund was set up in 2001 to help meet the country’s future pension needs. Its acquisition of rural land is driven by a desire to diversify its investments and to benefit from increased demand for meat and proteins as Asian countries become wealthier and favour a more western diet.

The business will continue to be run by the Bondfield family who founded it.

NZ Super Fund portfolio manager Neil Woods, said it intends to invest more in Palgrove to help it expand.

“The arrangement is we will grow the business through the purchase of land and the development of new technology to increase it size and value. We could invest another $100 million in this business in the medium term.”

He said Palgrove was a first step in rural investments in Australia and the fund was on the look out for other agriculture investments.

The stud’s founder David Bondfield said the fund had the right approach to investment in the sector.

“This partnership with NZSF gives the Palgrove business the capacity to grow its cattle numbers to meet increasing demand from our clients. It also enables us to accelerate genetic development.”

I know the Bondfields and admire their business. This should be a good investment for the super fund.

It is important for it to spread its risk and to invest both in New Zealand and overseas. I am also open to foreign investment here.

However, not everyone shares my views.

Some are vehemently opposed to foreign investment.

It would be interesting to know if that applies to both inwards and outwards investment.

If it doesn’t, how do they explain that it’s okay for us to invest there but not for people form other countries to invest here?

Rural round-up

NZ Super Fund sells forestry blocks to Chines, local investors – Paul McBeth:

The New Zealand Superannuation Fund, which today said the value of its portfolio topped $22 billion, has sold the bulk of 11 forestry blocks in the North Island to China National Forest Products Trading Corp for an undisclosed sum, with the remaining going to local investors.

The Chinese company, a subsidiary of state-owned China Forestry Group Corp, bought the majority of the portfolio, subject to Chinese regulatory approval, after getting the thumbs up from New Zealand’s Overseas Investment Office, the super fund said in a statement.

The Cullen Fund, so-called for its architect former Finance Minister Michael Cullen, was looking for a buyer for the blocks last year, when it valued the estates at some $91.1 million as at June 30. General manager investments Matt Whineray said the sale would let the fund focus on other domestic and international investment opportunities. . . 

Pivotal time for central farms – Mark Price:

Dozens of centre-pivot irrigation machines installed in the past couple of years are turning the dry plains of Central Otago into lush meadows. But, as Mark Price reports, this is just the beginning.

One farm on the flat near Tarras installed four irrigation pivots over the summer.

Another, on terraces above Tarras, installed eight or nine.

And, when the Tarras water scheme goes ahead there will be room for another 80 to 90 in that area alone.

In the world of irrigation, pivots are the state-of-the-art way of growing crops to feed dairy cows. . .

Maori land bursting with farm potential -Ben Dalton:

Primary industries generate over 70 per cent of New Zealand’s merchandise exports.

You’d be forgiven then for thinking that every last hectare of rural land is producing at its maximum. But you’d be wrong.

It has been known for some time that a significant proportion of Maori land is not delivering its potential.

A 2011 Ministry of Agriculture and Forestry report estimated that close to one million hectares were under-productive.

Now, a report commissioned by the Ministry of Primary Industries has allowed a glimpse of what’s at stake in bringing this land into full production – for Maori, the primary industries, and the country. . .

Quest for semi-rural playground – Alison Rudd:

The organisation which runs most of Southland’s kindergartens wants to buy a back yard for urban children who have no access to a semi-rural playground.

Kindergarten South wants a 1ha block close to Invercargill with trees, native bush and perhaps a stream. It will be a place where the 3 and 4-year-olds can ”get back to good old-fashioned play”, business development manager Sandra King said.

”It’s somewhere where they can climb trees, dig worms, puddle in water, draw pictures on the ground using sticks, learn to take a bit of a risk.”. . .

Delegat’s buys Australia’s Barossa Valley Estate assets out of receivership for A$24.7M – Paul McBeth:

Delegat’s Group has bought the assets of Australia’s Barossa Valley Estate out of receivership for A$24.7 million, just two months after snapping up the distressed vineyard and winery assets of Matariki Wines and Stony Bay Wines.

The Auckland-based winemaker, whose stable includes the Oyster Bay brand, will acquire a 5,000 tonne winery, a 41 hectare vineyard in the Barossa Valley, grape grower contracts and inventory and brands, it said in a statement. The deal is expected to settle in June, and will be funded through existing bank facilities. . .

Gunn Estate Ups the Ante With Reserve Range:

Hawke’s Bay’s popular Gunn Estate has just launched a range of Reserve wines, adding to the long history of the brand.

The 2012 Reserve range includes Sauvignon Blanc, Pinot Gris, Pinot Noir and Merlot/Cabernet varieties, made with grapes from specially selected vineyards in Hawke’s Bay and Marlborough.

Gunn Estate spokesman Denis Gunn says the new range represents the brand’s strong tradition.

“The Gunn Family has worked the land in Hawke’s Bay since 1920 and these wines are about keeping the passion and determination of three generations alive and well,” Mr Gunn says.

NZ Superfund looking for foreign farms

The New Zealand Superfund has already invested in farms here, now it is looking further afield:

New Zealand’s state pension fund is looking at buying overseas farmland amid growing demand for food in emerging markets, and it is also interested in assets offered by struggling European banks as well as catastrophe insurance.

Crop, dairy and livestock farming operations in North and South America, Australia and Europe are potentially attractive, Matt Whineray, general manager of investments at the NZ$21 billion ($17.5 billion) New Zealand Superannuation Fund told Reuters in an interview.

“If we go and buy a farm, we will sell a little bit of global equities and fixed income,” Whineray said, adding that the fund was looking to increase its allocation for rural farmland to 3 percent from less than 1 percent at the moment. . .

The advent of a rising middle class in many emerging economies such as China and Indonesia has prompted other pension funds around the world, including those Australia, Canada and Sweden, to increase investments in farms.

But the difficulties of directly buying land overseas and the lack of large size farmland available has proved a challenge for big institutional investors.

“Farms and forests are more difficult to buy than equities, so it provides a real challenge,” Whineray said.

But he added: “You haven’t got a big weight of institutional money in those things at the moment. That’s part of the reason that the opportunity exists.” . . .

What will the people who don’t like foreign investment in farms here think of this?

Dairy Holdings’ farms staying in NZ ownership

If the sale of the 16 Crafar farms to foreigners exercised the xenophobic, they’d be even more upset by the  prospect of Dairy Holdings’ 58 dairy units on 14,243 effective hectares, milking 43,992 cows to produce approximately 15.18 million kilograms of milk solids.

However, if TVNZ is right the farms will be staying in New Zealand hands.

“I can’t tell you who the buyer will be but I can tell you the Overseas Investment Office won’t be involved,” said Dairy Holdings Chairman Bill Bayliss.

The New Zealand Super Fund is known to have expressed interest in Dairy Holdings and some say that would be a good outcome. . .

Clearly such an investment has been on the radar for the Super Fund. Chief executive Adrian Orr said in 2010 the fund had up to $500 million to invest in rural land over the next five years.

One of the arguments against the sale of the Crafar farms to the Chinese company Pengxin was that it would make farm ownership more difficult for young New Zealanders.

Will there will be a similar level of opposition to Dairy Holdings sale to the super fund for the same reasons?

Whether or not there is, I’m with Federated Farmers chief executive Conor English who says ownership isn’t the issue:

Federated Farmers says while there may be debate around foreign ownership of Kiwi farms – the most important outcome is good farm management.

“They’re managed well in terms of the environmental impact, in terms of economic impact, in terms of how they fit into the community,” said English.

The first two points matter to the whole country and the last one is very important for the neighbourhood.

Why stop at $6 billion?

Labour says borrowing to put money into the Superannuation Fund isn’t increasing debt.

If that’s the case, why stop at $6 billion?

If borrowing that much is a good thing to do without increasing debt, wouldn’t borrowing more be even better and still not increase debt?

Let Super Fund buy Landcorp farms

The NBR reports that the New Zealand Superannuation Fund is on a farm buying spree:

Since February the Super Fund has  bought eight farms with a combined value of about $60 million, with four in the North Island and four in the South . . .

. . . Up to 3% of the $19 billion fund or about $500 million could be allocated as part of its rural land strategy although there was no compulsion to invest all the money if the right opportunities did not exist . . .

There’s a way to create some right opportunities and that’s by putting Landcorp farms on the market, and I mean the farms rather than the company.

The government doesn’t need to be a farmer but I don’t think Landcorp should be one of the SOEs put up for partial sale.

Instead, the properties it owns should be sold off in a gradual and orderly manner.

There’s already a willing buyer for some of its property in the Super Fund.