Rural round-up

July 9, 2019

Uncertainty plus unique ownership structure drive Fonterra share volatility – Keith Woodford:

Fonterra’s shares have been on a steady downward slide for the last 18 months. In January 2018 they were selling at $6.60 dropping to $3.86 at closing on 30 June 2019.

Then this last week things suddenly turned volatile, dropping at one point on 4 July a further 10 percent to $3.45, before rising by six percent to $3.69 at close of trade on 5 July.

The causes of the long-term drop are well understood. Very simply, Fonterra made a loss of $196 million in financial year 2018 largely because of write-down on assets. Fonterra is also now in asset-selling mode to strengthen its balance sheet. Non-farmer investors are coming to understand that, with family silver having to be sold as well as some rubbish disposal, any turnaround is likely to be long-term rather than short-term. . .

One billion tree flawed says climate scientist :

The Forestry Minister Shane Jones’ one billion trees won’t reduce carbon emissions, as too few natives are being planted, climate scientist Jim Salinger says.

The government has allocated $120 million in grants to landowners to plant trees on their properties, and wants two-thirds of those planted to be natives.

Forestry New Zealand figures show in the first year, of the 91m trees planted, only 12 percent were native. . .

Falling log prices may make some woodlots unprofitable – ANZ -Rebecca Howard

(BusinessDesk) – In-market prices for logs in China – New Zealand’s largest export market – have fallen in recent weeks and ANZ Bank warns the drop will make the harvest of some woodlots unprofitable.

While some price softening is not unusual at this time of year as construction activity slows in the hot months, “the scale of the correction was unexpected,” said ANZ agriculture economist Susan Kilsby.

The price of an A-grade log landed in China has fallen from US$130/JAS cubic-metre in early June to approximately US$105/JAS cubic-metre.. .

Vet behind Mycoplasma Bovis detection hopeful for eradication:

The Ōamaru vet, whose efforts led to the identification of cattle disease Mycoplasma Bovis in New Zealand, says she is optimistic the disease can be eradicated.

Earlier this week, Dr Merlyn Hay was given the Outstanding Contribution to the Primary Industries Award, for her work to identify M Bovis in July 2017.

Dr Hay told Saturday Morning that the disease was very hard to diagnose, and in many other countries it was only detected after it had already been spreading for several decades . .

Group aims to help farmers improve M. Boris response – Daniel Birchfield:

Lines of communication between the Ministry for Primary Industries and farmers impacted by cattle disease Mycoplasma bovis have been muddied for too long, Waitaki Mayor Gary Kircher says.

Alongside Waimate Mayor Craig Rowley, he chaired the first meeting of the recently formed Waimate/Waitaki Mycoplasma Bovis Advisory Group held at the Waimate District Council on Wednesday.

The group, modelled on a similar Ashburton arrangement, was formed to support the ministry’s M. bovis eradication programme and assist with regional decision-making to benefit farmers. . .

Lamb contract rewards loyalty – Colin Williscroft:

A $9/kg fixed-price lamb contract for August is a reward for customer loyalty, Affco national livestock manager Tom Young says.

So, farmers generally should not raise their hopes it signals prices higher that they might usually expect as the season unfolds.

The contract has been the subject of much discussion at sale yards but Young said it is not an offer being made to every farmer.

It is only available to loyal clients, farmers who have shown Affco consistent support. . .

Dismantling free markets won’t solve biodiversity threat – Matt Ridley:

Driven perhaps by envy at the attention that climate change is getting, and ambition to set up a great new intergovernmental body that can fly scientists to mega-conferences, biologists have gone into overdrive on the subject of biodiversity this week.

They are right that there is a lot wrong with the world’s wildlife, that we can do much more to conserve, enhance and recover it, but much of the coverage in the media, and many of the pronouncements of Sir Bob Watson, chair of the Intergovernmental Panel on Biodiversity and Ecosystem Services (IPBES), are frankly weird.

The threat to biodiversity is not new, not necessarily accelerating, mostly not caused by economic growth or prosperity, nor by climate change, and won’t be reversed by retreating into organic self-sufficiency. Here’s a few gentle correctives.

Much of the human destruction of biodiversity happened a long time ago . . .


OIO favours forestry over farming

May 23, 2019

A newsletter from 50 Shades of Green points out that Overseas Investment Office rules favour forestry over farming:

The unfair advantage.
Did you know, the threshold for farm sales approval is different for farms selling to farmers than it is for farms selling to forestry investors?Forestry doesn’t have to meet the jobs criteria.  Double whammy again, taking out valuable land and jobs at the same time, impacting local communities and displacing jobs.  Sheep + Beef estimate 7  jobs are displaced for 1 forestry job.
We  don’t think the general public is aware of the indications of 5 million hectares of pine trees, what that looks like in 40, 50 years time, and much of  it, with sink initiatives,  not likely to be harvested

 

It is ironic that Shane Jones the self-proclaimed savior of the regions who has the $3 billion provincial slush fund to throw around to create jobs, is also the Minister promoting the billion trees policy which will kill them.

The Paris Accord states that climate change policy should not conflict with food production but Alan Emerson writes that trees are being planted at the expense of food:

Every now and then we hear some idiot describing agriculture as being a sunset industry despite the fact we contribute 79.3% of the country’s wealth.

What we should be discussing is New Zealand becoming a sunset economy because it will be if the Government’s ad hoc response to climate change continues along the line it’s going.

For the record, I accept the climate is changing, human activity has done it and we need to do something to fix it.

What I don’t accept is all the Wellington centric crazy fixes that are, in the main, anti-farmer and without the benefit of solid science and economic calculations grounded in reality.

NZ won’t survive without agriculture.

It is still agriculture which earns most of our export income.

Its carbon footprint per kilogram of product is one of the lowest in the world and we’re producing a lot more with less input than we’ve ever done.

If you take nutrient density into account New Zealand farm produce stacks up even better.

In addition, as Parliamentary Commissioner for the Environment Simon Upton said, pines are fine for mitigating methane emissions but not for carbon dioxide.

The people who criticize anyone who won’t accept the science on climate change won’t accept this science, nor will they accept the science on gene-editing that could help us reduce methane emissions.

So, why are we planting a billion trees?

Another question is where are we planting them? In Wairarapa we’ve recently lost seven good farms to forestry and that is a major issue.

At Pongaroa they’ve lost between 6000 and 8000 hectares to forestry.

It was interesting to read in last week’s Farmers Weekly Rabobank believes farm forestry will become more appealing. Sustainability analyst Blake Holgate said Government incentives make forestry a more appealing land use option at the cost of food production.

He also said forestry provides opportunity to generate income from area that has been unproductive.

I agree with both statements but was somewhat amazed by comments from Forest Owners Association president Peter Weir who claimed millions of hectares of land for forestry isn’t available. He suggested very little land is being bought for forestry, which I disagree with.

Simply put, my position is there is a lot of marginal land that could go into trees and provide extra income for farmers. That’s good.

Good, productive land and entire farms going into forestry at the expense of food production is bad.

The discussion takes me back to the Muldoon government in the 1970s with its Land Development Encouragement Loans.

Money was available to farmers to clear native bush with the aim of improving NZ Inc’s performance.

So 940,000 hectares were cleared and a massive amount of biodiversity was lost but much of it has since reverted and some has been planted in pines.

Some areas should never have been cleared in the first place and it makes both environmental and financial sense to replant them in trees.

But planting trees on land best suited to producing food will come at a high economic and social cost for no real environmental gain.

Simply, the subsidy didn’t work.

Now we have a subsidy to plant trees, millions of them.

Subsidies are an evil from the past and distort the market. They have no future in a modern economy.

While I applaud Regional Development Minister Shane Jones’ aim of revitalising the regions I believe his forestry initiative will achieve exactly the opposite.

He needs to change advisers.

Let’s look at the facts.

According to the NZ Forestry Bulletin Jones’ billion trees mean 50,000 hectares a year is taken out of production.

To achieve the Productivity Commission’s goals, however, would require 100,000 hectares to be taken out of production each and every year for three decades – a total of three million hectares.

That’s almost a third of our total farmland and it won’t be marginal but productive, food-producing country.

Wairarapa farmer and ram breeder Derek Daniell has done his sums.

For a start every thousand hectares of sheep and beef farms employs seven people each and every year. The same amount of forestry supports one.

That is six jobs lost for every farm that is converted to forestry.

What will that do to provincial NZ?

One retired meat company director told me the removal of stock for trees on the North Island’s east coast would mean the closure of one meat processing works.

What will that do to the provinces?

An economist suggested the value to the country of a hectare of sheep and beef is about $55,000.

At Pongaroa, taking the lowest figure of land out of production, that would mean a loss to their economy of $330m.

What will that loss achieve for the provinces?

Then we have trees harvested every 25-30 years. That’s a long time to wait for a pay cheque.

The money in the interim will be from carbon farming but according Upton that isn’t sustainable.

Further, what is to stop some political party changing the ETS, as has happened.

Relying on political whim for your pay cheque doesn’t spin my wheels.

When it comes to pollution and carbon footprints Daniell points to the cities and not the provinces

The problem is that even with the best of intentions from Jones that instead of forestry boosting the provincial economy it will destroy it.

The madness needs to stop.

You can read more from 50 Shades of Green and subscribe to their newsletter here.


Rural round-up

May 18, 2019

‘A recipe for disaster’: Rural lobby group launched to oppose billion trees policy – Angie Skerrett:

A lobby group has been formed as concern grows about the impact of the Government’s billion trees policy on rural communities.

The group, named 50 Shades of Green, aims to convince politicians and decision makers that the current push to plant a billion trees will destroy the provinces, and ultimately the New Zealand economy.

Spokesperson Andy Scott said converting whole farms to trees, often by foreign companies was a recipe for disaster.

“In the Wairarapa there have been seven farms moved from production, in Pongaroa there has been between 6000 and 8000 hectares planted in trees,” he said . .

Group targets tree policy – Colin Williscroft:

The Government’s goal of planting a billion trees will destroy the provincial heartland and the New Zealand economy, a new lobby group says.

The group, 50 Shades of Green, has grown out of concerns held by Wairarapa farmers and businesspeople but spokesman Mike Butterick is confident people from around the country will jump on board.

Productive farmland is at risk from the tree-planting policy, Butterick says.

“It’s essential that as a country we stop and think about the long-term impact that will have.” . .

Ag sacrifice – Annette Scott:

The Government’s targets for methane reduction are unrealistic and unfair and there’s little sense in sacrificing New Zealand’s economic backbone in the Zero Carbon Bill, Deer Industry NZ chairman Ian Walker says.

The deer industry is disappointed by the Government’s agricultural emissions reduction targets that will result in significant reductions in stock numbers. 

Even if tools and technologies were available to reduce methane and nitrous oxide in future the level of reduction will effectively mean the agriculture sector is being asked not just to cease its own contribution to global warming but also offset the contribution of other sectors. . .

Forestry ‘gold rush’ underway in Wairoa :

Warnings a modern day gold rush is underway as productive farm land is sold to make room for lucrative forestry. Farmers and community leaders in Wairoa have become the latest group to raise concerns, estimating around ten-thousand hectares of the region’s most productive land has recently been sold to out-of-town investors wanting to plant trees for harvest and carbon credits. They’re worried thousands of jobs could be lost from the area, and communities seriously affected, if it continues. The government’s one billion trees programme continues – this week, Shane Jones, the Minister in charge of the programme announced a further $ 58 million for forestry to help Forestry NZ increase its regional presence.  . .

Living under the Zero Carbon Act – Andrew Hoggard:

I have been a farmer for the majority of my working life. Like any farmer, I always look at what I can do to make the farm better, to improve production, or just make life easier. I don’t know whether my girls will want to go farming or do something else, but at the back of my mind when I think about what we do on farm there is always that long term view, of making it better for the next generation.

With the Zero Carbon Act announcement some are saying that it’s far away, what are you worried about? But it is not far away, it’s just the next generation away. For me I don’t look at those targets and think about what the right PR spin thing to say now is, to improve the corporate brand, and who cares if the farmers can’t achieve it? . .

Sheep farming is not to blame for climate change – Gordon Davidson:

SHEEP INDUSTRY leaders have hit back at the ‘fashionable’ argument that UK consumers can help reduce climate change by eating less red meat, and argued instead that UK sheepmeat should be the ‘environmentally conscious person’s meat of choice’.

Responding to the Committee for Climate Change and the UN’s nature report, National Sheep Association chief executive Phil Stocker said that some of the recommendations being made to consumers were ‘unbalanced, based on inadequate science, and understood little about the UK sheep industry’.

“It is really frustrating to yet again see our extensive livestock sectors caught up within criticisms of agriculture and their impact on climate change and biodiversity, and little mention of other damaging activities, that may be less popular to criticise,” said Mr Stocker. “It is seemingly OK to offset emissions from flying around the world through carbon sequestering actions such as tree planting and peatland management, but not OK for a farm to do its own internal offsetting. . .

 


Rural round-up

March 26, 2019

Last calves go under the hammer – Sally Rae:

It was dubbed The Last Hurrah.

Rural folk from throughout the Catlins and further afield gathered on Thursday for the last-ever Owaka calf sale.

As the stories and nostalgia flowed – many commenting on how long it could take in years gone by to get home from the sale – there was also a touch of sadness.

PGG Wrightson, which owns and operates the saleyards, is moving the sale from next year to a special sale day at the Balclutha saleyards. . .

Pilot ‘trees and carbon’ workshop proves popular – Sally Brooker:

A pilot project helping farmers make the most of the One Billion Trees Fund has generated a lot of interest.

Beef + Lamb New Zealand ran a series of workshops in the central South Island this month called ”Farms, Trees and Carbon”.

Experts from Wairarapa forestry and marginal land use advisory and management company Woodnet presented an overview of global warming and New Zealand’s commitment to reducing greenhouse gases.

Then they discussed possibilities for plantings on attendees’ land. . . 

‘Serious pest’ affecting avocado trees discovered in Auckland

An avocado tree-loving beetle, regarded as a serious pest overseas, has been discovered in Auckland.

The wood-boring granulate ambrosia beetle has been detected in four Auckland areas since late February, according to Biosecurity New Zealand.

The beetle is known to feed on a wide range of broadleaf trees, including horticultural species such as avocado, and can spread fungal diseases. . . 

Primary sector attitudes give lessons for life – Bryan Gibson:

It has been a challenging week or so in New Zealand as we all try to make sense of the events in Christchurch on March 15. We’ve all been doing some soul-searching, wondering about the foundations of our society and how it will recover from this tragedy.

As an island nation at the bottom of the world many of us might have thought we were isolated from the hatred that we see in much of the world at the moment.

But we’d be wrong to think that. Our nation was formed through conflict and to this day we often express our fear of others through anger. It might help for rural communities and primary producers to reflect on our make-up. People of all nationalities work the land, grow the crops, pick the fruit and milk the cows. There’s only four million of us here but we produce enough to feed many more people so we’ve had to form partnerships with other nations to sell our great food internationally. . . 

Dairy dramas – Hugh Stringleman:

Dairy farmers face a strange mix of uncertainties when contemplating with satisfaction the likelihood of a fourth consecutive season of $6-plus milk prices.

While extreme volatility in dairy product prices has calmed down and New Zealand farmers now receive as good as others in Europe and the United States, their institutions have developed cracks.

There might be no better time to rebuild the foundation, beginning with the Dairy Industry Restructuring Act, part 2019.

Last week Fonterra’s leaders promised for the third or fourth time since the embarrassment of their first financial loss in 2018 a fundamental strategy review. . . 

NZ Champion of Cheese Medals Announced:

NZ Champions of Cheese Awards 2019 has awarded 223 medals to locally-made cheese, proving the quality of New Zealand speciality cheese continues to improve.

Organised by the New Zealand Specialist Cheesemakers Association, the NZ Champions of Cheese Awards has been run since 2003. The Bronze, Silver and Gold Medal winners have been announced today, with the Gold Medal winners vying for one of 26 cheese trophies, which will be announced in Hamilton in May. All the New Zealand Champion of Cheese medal winners are on the NZSCA website https://nzsca.org.nz/winners/. . .

Hawke’s Bay dairy farm opportunity on market:

A top-end Patoka dairy farm with consents in place to increase its output by 30 percent for at least the next 10-years has been placed on the market for sale. With Hawke’s Bay’s land values around half of some other districts, the returns from this property would likely be stronger than anywhere else.

Raumati Dairy some 41-kilometres north-west of Napier is a 458-hectare property milking a herd of between 730 – 750 cows, but with consent from Hawke’s Bay Regional Council to stock up to 1000 cows through to 2028. It ticks all the environmental boxes too with riparian areas fenced off. A 60 bail rotary, 600 cow feed pad and all the bells and whistles make this a must view. . . 


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