Owen Poole CNZM

01/06/2015

Owen Poole, of Wanaka, has been recognised for his service to the meat industry and business with a CNZM – Companion of the New Zealand Order of Merit.

He began work as an office boy at Southland Frozen Meat and worked his way up to Chief Executive before leaving the company.

When he returned to help with the integration of the Alliance Group and Waitaki International five years later the company was in a very precarious position. He turned that round as Chief Executive then Chairman, built a strong foundation for the company and turned it into the biggest sheep processor and exporter in the world.

His hard work, strategic thinking, knowledge of the industry, industrial relations, and markets has made Alliance not just a national success story but an international one too.

Under Owen’s leadership the company took a series of tough decisions to rationalise killing space in response to falling stock numbers. Under his guidance, Alliance became the leader in the introduction of shift processing to large scale plants and more recently it has adopted multi-species processing in several plants.

Owen’s interest and dedication was not just to the company but to the wider meat industry. He was a valued member of both the Meat Industry Association and what was then the New Zealand Meat and Wool Board.

The Alliance Group is a co-operative. He was a firm believer in that model and the importance of good governance.

Owen devoted more than 30 years to the Alliance Group and the wider meat industry, leaving them both much better for his dedication, vision and leadership.


Rural round-up

17/12/2013

Canterbury suffers another blow:

Farmers are reeling from yet another blow, after a severe localised hail storm tore its way through the Mayfield area of Mid-Canterbury.

“As the year draws to a close and we are fast approaching harvesting season, Mid-Canterbury farmers are facing a financial nightmare after the hail storm yesterday,” says David Clark, Mid-Canterbury Grain and Seed Chairperson.

“This has been a mongrel year for farmers in Mid-Canterbury; we have gone from snow to wind storms to a very dry spring to now this. It is a horrible way to finish off the year, with radish and carrot crops shredded and wheat and barley crops having the stuffing knocked out of them. . .

A timely reminder:

Fonterra dropped a bombshell last week when it announced its latest consideration on its farmgate milk price.

For farmer shareholders in New Zealand’s largest company, it had been shaping up to be a particularly merry Christmas, with economists suggesting the milk price could be lifted as much as 40c.

Elevated prices, which have defied predictions and remained at very high levels – the GlobalDairyTrade price index was just 7% below its April high and about 50% higher than a year ago – raised expectations for the forecast to rise. . .

UK butter eaters lose taste for Anchor after dairy giant cuts NZ ties – Nicholas Jones:

British shoppers have noticed that their favourite Anchor butter tastes different – with the explanation being it’s no longer from New Zealand.

In Britain, the famous Kiwi brand is used by European dairy company Arla. Until recently, Arla had shipped over New Zealand butter made by Fonterra, but has now switched production to its British facilities.

The Arla logo has been added to block butter packs, but the company has faced a number of complaints from disgruntled customers who were unaware of the change. . .

How much dairying is too much in terms of water quality? – Daniel Collins:

On 21 November the Parliamentary Commissioner for the Environment, Jan Wright, released her second report on water quality. It warned that business-as-usual dairy expansion by 2020 would leave our lakes and rivers more degraded than they are now, even with improved mitigation. I’d now like to re-cap what the report concluded, how it got there, and how it was received.

The report

The purpose of the report was to illustrate how land use change could affect future nutrient runoff – nitrogen and phosphorus – based on a simple, business-as-usual scenario for 2020.

Motu used a combined economics-land use model called LURNZ to project what land use changes are likely by 2020, driven by commodity process and knowledge of land use practices and landscape characteristics. Sheep and beef farming were expected to give way to dairying, forestry, and even reversion to shrubland. . .

Director elections mean an exciting Red Meat Industry:

Federated Farmers looks forward to working with the Boards of the cooperatively owned Silver Fern Farms and Alliance Group following their recent Director elections.

“Federated Farmers congratulates the new directors elected to our two largest cooperatives, Don Morrison at Alliance Group as well as Richard Young and Dan Jex-Blake at Silver Fern Farms,” says Jeanette Maxwell, Federated Farmers Meat & Fibre chairperson.

“We also congratulate Alliance Group chairman Murray Taggart on his re-election.

“Federated Farmers Meat & Fibre wishes to formally thank Alliance Group’s Owen Poole and Jason Miller as well as Silver Fern Farms’ David Shaw for their service to shareholders. . .


Rural round-up

27/11/2013

Moment of truth for MIE and its board candidates – Allan Barber:

In the seven months since MIE’s first farmer meeting in Gore, there have been more meetings, discussions with meat companies and, most recently, nominations for the boards of Silver Fern Farms and Alliance Group. Meat companies have tried and failed to find an acceptable solution to the problems raised by MIE.

Previous MIE executive members Richard Young and Dan Jex-Blake are standing for election to Silver Fern Farms’ board. Don Morrison has been nominated for the Alliance board as a farmer director, while a shareholder, Mark Paterson, has proposed a resolution to nominate Fonterra director John Monaghan for the independent directorship vacated by Owen Poole. This will be voted on by those members present at the AGM, but the result of that vote is not binding on the board.

Alliance Group’s AGM takes place on the 13th December and SFF’s on 18th. Therefore we will know before Christmas how many of these candidates have actually made it onto one or other of the cooperative’s boards. . .

Northland trust goes dairy with Te Tumu Paeroa:

A Northland Maori trust has entered into a partnership with land administrator Te Tumu Paeroa to turn a sheep and beef farm into a money-making dairy operation.

The Omapere Rangihamama Trust runs a farm near Kaikohe, which is currently used for forestry and maize, as well as sheep and beef.

But chair Sonny Tau says the Rangihamama Farm will soon be converted into a dairy farming operation, with 500 cows over 278 hectares. He says it will mean a better financial return on the land. . .

New x-rays and staff to strengthen border biosecurity:

New x-ray technology and more frontline staff will help to beef up New Zealand’s biosecurity defences at the border, says Primary Industries Minister Nathan Guy.

Mr Guy today unveiled a new x-ray machine at Auckland Airport, one of 12 machines that have been installed around the country.

“The new machines will be more reliable than the Ministry for Primary Industries’ older x-ray units and will provide better image quality,” says Mr Guy.

“MPI will be able to screen baggage with greater accuracy and image quality. This means border staff will be better equipped to spot biosecurity risk items before they enter New Zealand. . .

Labour Inspectorate extending dairy farm visits to regions:

The Labour Inspectorate is extending its dairy farm visits to regions across New Zealand to check compliance with minimum employment rights.

Labour Inspectors began visiting dairy farms in Southland in August, with the work now being replicated in the Waikato, Hawkes Bay and Taranaki.

The visits are part of a long-term operation to identify breaches of employment law, with particular focus on a practice called seasonal averaging and the failure to keep accurate time and wage records. . .

AgResearch, Invermay and Genetics – Peter K. Dearden:

The opinions below are my own, and not necessarily those of the University of Otago, my employer.

You may be aware that AgResearch has decided to move its genetics/genomics team from Invermay near Dunedin, to Lincoln. This move has excited a great deal of attention in the Otago press, and some consternation around here. Genetics Otago  has been drawn into this as a centre of research excellence and hub for genetics and genomics that AgResearch is linked into, that they will lose the benefit of if they move. This has led to some unfortunate exchanges in the media, so I thought I would write something from my point of view.

AgResearch has had a long-term and excellent genetic/ genomics group at Invermay. Many of that group are members of Genetics Otago. Genetics Otago has over 200 members across the University of Otago, AgResearch, AbacusBio, and others (both companies and individuals) across Otago. AgResearch is a small, but important, part of that collaboration. . .

Herd TB status changes encourage testing:

Farmers and lifestylers are being encouraged to get their cattle and deer tested for bovine tuberculosis (TB) as soon as they have been registered with the TBfree New Zealand programme.

To ensure the programme’s testing requirements are as accurate as possible for all animals, some changes have been made to the TB status of herds.

The changes directly affect newly-registered breeding herds and non-breeding (dry stock) herds. All new herds now start off on a Suspended (S) herd TB status until they have passed their first whole herd test. . .

New Zealand’s Favourite Honey: Manuka Trumps Clover in 2013 National Honey Week Survey:

The popularity of Manuka honey has been confirmed in a recent national survey, which places it above Clover and other floral varieties. In the New Zealand-wide survey launched by Airborne Honey this month to celebrate the country’s first National Honey Week, 40% of Kiwis named Manuka as their favourite and 29% choose Clover. A number of other floral honeys featured further down the scale, including Vipers Bugloss (3%) and Rewarewa (2.26%).

The survey also revealed that the favoured way to eat honey in New Zealand is on toast (57%), followed by a sweetener in hot drinks (9%) and straight off the spoon for medicinal purposes (9%). Most New Zealanders eat honey once or twice a week with only 2% never eating honey at all. . . .

Brancott Estate Heritage Centre wins International Wine Tourism Award:

A New Zealand cellar door has won a 2014 International Best of Wine Tourism award with the Brancott Estate Heritage Centre in Marlborough being the only New Zealand cellar door to win this prestigious award.

The Brancott Estate Heritage Centre, home of Brancott Estate wines, is located at Brancott Vineyard, the site of the original Sauvignon Blanc plantings in Marlborough.

The Great Wine Capitals Global Network recently announced the winners of the 2014 International Best of Wine Tourism awards at a ceremony held at the Culinary Institute of America’s Greystone campus in St. Helena, California. The nine international winners were chosen from 53 local ‘Best Of‘ winners from nine Great Wine Capitals. In all, 350 applications were received this year. . .


Rural round-up

17/10/2013

Overseas experience to boost FMD preparation:

Primary Industries Minister Nathan Guy has announced that a delegation of 10 veterinarians, farming leaders and MPI staff will take part in foot and mouth disease (FMD) training in Asia next year to experience working with the disease first hand.

“While the major focus is always on preventing FMD, it is also very important that we are prepared to respond to such an outbreak quickly and effectively if it ever did happen.

“The training will develop a larger pool of people in New Zealand with experience in recognising, diagnosing and controlling the disease.

“This is the latest initiative in a major 18-month programme of work, which involves the Ministry for Primary Industries and an industry working group working together on key projects,” says Mr Guy. . .

End of an era for southern cooperatives – Allan Barber:

Alliance Group chairman Owen Poole retired at the end of September after five years on the board and 15 in top management roles, while Eoin Garden, Silver Fern Farms’ chairman since 2007 is retiring at the AGM in December.

Both men in different ways have provided notably determined leadership of their respective companies through particularly difficult times for the meat industry. Although each will retire with some regrets at not being able to lead the way to a permanent recovery, it will be a relief to step back from the limelight and leave the battle to their successors.

Poole has been succeeded by North Canterbury farmer Murray Taggart who ironically was voted off the Alliance board at the same AGM as previous chairman John Turner, resulting in Poole being appointed the company’s first independent chairman. That was a consequence of farmer disaffection with low lamb prices, so in spite of some recovery before the last price drop nothing much has really changed. . .

Rise of corporate dairying in China:

A new report says China’s dairy industry is undergoing a massive restructuring, with traditional small farmers departing to make way for large-scale commerical dairying operations.

Rabobank’s report China’s Raw Milk Supply – Still Dreaming of a White River says the rapid changes taking place in China will have an impact on its demand for imports.

Co-author Hayley Moynihan says the restructuring is limiting China’s domestic milk flow. She says as the supply chain restructures, is it put under pressure in terms of its ability to increase the volume of quality raw milk supplies.

Ms Moynihan says the Chinese Government has taken significant action to improve milk quality since the melamine crisis in 2008. . .

Evolving a truly customer-centric industry:

New Zealand’s primary sector needs to develop a customer-centric approach to its marketing – by creating products with unique attributes that are sought after by global consumers.

That was a key theme of the just-released Volume 3 of the KPMG Agribusiness Agenda, titled “Evolving a truly customer-centric industry”.

KPMG’s Global Head of Agribusiness, Ian Proudfoot, says the sector needs to replace its traditional ‘trading mentality’ with a more targeted approach.

“Those customers who see the most value in what we produce – and are consequently willing to pay a higher price for the attributes they value – must be at the centre of everything we do.” . .

A primer of water quality – Clive Howard-Williams at Waiology:

Society is increasingly concerned over water quality. The means by which this is maintained and enhanced while growing an economy is a major challenge for governments in many places. Here I introduce some underlying concepts around water quality that Waiology followers will need to appreciate when they look at the forthcoming series of blogs.

What is good water quality?

Rather than just being a set of defined scientific numbers, water quality is rather a perception defined by communities and it varies from place to place and between communities. What is seen as poor water quality by some may be adequate for others. Generally however, good quality is usually recognized as water that is safely drinkable, swimmable and from where food may be gathered and that provides for community spiritual and cultural needs and for healthy ecosystems. . .

Happy World Food Day:

We all love to eat, but make sure that as you celebrate World Food Day today you spare a thought today for those who don’t have enough to eat.

‘Across the world 842 million people still suffer from chronic malnutrition, including a growing number in the developed world’, said HRLA chairperson Edward Miller, ‘and the latest New Zealand food security study reported that less than 6 in 10 NZ households are food secure.’ . .


Rural round-up

27/07/2013

Owen Poole to step down from Alliance Group after 18 years, Taggart named chairman:

Owen Poole is to step down from Alliance Group, after an association with the Invercargill-based meat company stretching back 18 years, and will be replaced as chairman by fellow board member Murray Taggart.

Taggart was a farmer-elected director of Alliance between 2002 and 2007 and was re-elected to the board in 2010. He farms a 457 hectare sheep and cropping unit under irrigation in Oxford, North Canterbury.

Poole will step down as chairman on Sept. 30, having held the position since being appointed to the board as an independent director in 2008. He was the company’s chief executive between 1995 and 2005. . .

Strong backing for CPW share structure:

Central Plains Water Ltd yesterday received strong backing from farmers attending a Special General Meeting to agree the share structure and construction approvals necessary for first stage construction to proceed.

More than 200 shareholders attended the July 25 meeting, along with Selwyn District Mayor Kelvin Coe and MPI representative, Kevin Steel.

The meeting voted unanimously to proceed with construction of the irrigation scheme, with only one shareholder voting against the proposed share structure. . .

Forestry sector stands to gain major economic boost:

Associate Primary Industries Minister Jo Goodhew has welcomed the announcement of a government and industry research study that could rejuvenate New Zealand’s forestry industry.

The 14-month project will study the feasibility of making biofuel from the waste product of forestry harvesting and processing. Material including sawdust, bark and harvest residue currently has little or no value, but could be a valuable new revenue stream if it can be commercially converted into biofuels.

“This study is potentially the first step in a very exciting new revenue stream for the forestry industry,” says Mrs Goodhew. . .

Forest owners pumped by bioenergy project:

Forest owners are hopeful that a project designed to convert forest waste into liquid biofuels will provide growers and mills with extra income streams.

In what is known as the ‘Stump to Pump’ project, the government has approved $6.75 million in funding to be matched by partners Norske Skog and Z Energy.

The $13.5 million project will be based at Norske Skog’s Tasman mill in Kawerau. The initial 14-month study will examine the feasibility and economics of making biofuel from sawdust, bark and harvest residue which currently has little or no value. If successful, a test plant will then be built in Kawerau. . . .

Bioenergy Association is encouraged by the Government’s support for biofuels:

The announcement by the Government of Primary Growth Partnership funding of $6.75 million) to investigate producing biofuels from forestry residues is encouraging and supports the forestry and wood processing sector strategy that identified that some emerging biofuel technologies can provide attractive additional revenue streams for existing businesses. . . .

Young farmer wins upland farm for 12 months – Isabel Davies:

A 23-year-old farmer has been given the chance to run a 248ha upland farm in Snowdownia after winning a unique scholarship.

Caryl Hughes from Dyffryn Ceiriog, near Llangollen, beat off stiff competition to win the opportunity to farm Llyndy Isaf, on the shores of Llyn Dinas near Beddgelert for 12 months from September.

The farm drew international attention in 2011 when £1m appeal to rescue it was spearheaded by Welsh Hollywood actor Matthew Rhys and supported by Catherine Zeta-Jones. . .


Rural round-up

06/05/2013

Red meat industry change afoot – Sally Rae:

”Band-aid solutions” might be needed to avoid potential problems in the red meat sector next season, but a long-term view is essential to finding the right solutions, Meat Industry Excellence chairman Richard Young says.

More farmers have gathered to establish a mandate for industry change and further meetings are scheduled in the North Island.

At a recent meeting in Feilding, attended by about 700 farmers, Alliance Group chairman Owen Poole said the industry was developing an improved model and and a decision on whether it would go ahead could be expected within two months, Farmers Weekly reported. . .

Making a difference for dairy women – Sally Rae:

Sue Peoples wants to help make a difference to women involved in the dairy industry.

Dr Peoples, a social scientist based at AgResearch Invermay, is leading the first phase of Project Pathfinder, an initiative aiming to build the leadership capacity of New Zealand’s dairying women.

The project, which recently gained a Sustainable Farming Fund grant of $180,000 over three years, will get under way in July. . .

Adapting agriculture to a changing climate – Dr Gavin Kenny:

For more than 20 years I have worked professionally on the “what ifs” of climate change, focused mostly on what it might mean for agriculture. I’ve done this work in New Zealand, Europe, the Pacific Islands and Asia. During that time I have experienced the progression from the hypothetical to real-world responses. Climate change, particularly as experienced through more frequent drought and flood events, is increasingly influencing what farmers are doing in many countries. It is not clear whether this is yet the case in New Zealand, but I suspect so.

With a record summer drought just behind us, and with negative and positive effects that will continue to unfold for farmers, it is relevant to ask: What if we get more frequent and intense droughts in the future? How might farming change and how might those changes affect wider society? . . .

Real Mix in Farm Manager Finalists:

The 11 finalists competing for the 2013 New Zealand Farm Manager of the Year title are split between contract milkers and farm managers – as well as age, experience, and farm size.

Judging begins next week for the finalists comprising four males and seven couples, and involves a two-hour farm visit covering financial planning, human resource and farm management. The final component of the judging, an interview, will take place in Wellington prior to the winners being announced at the 2013 New Zealand Dairy Industry Awards on May 24.

Winners in the 2013 New Zealand Sharemilker/Equity Farmer of the Year and New Zealand Dairy Trainee of the Year will also be announced and nearly $150,000 in prizes will be given away. . .

Fonterra Pilot Scheme to Give Farmers Milk Price Certainty:

Fonterra is piloting a new ‘Guaranteed Milk Price’ (GMP) scheme that will provide farmers with the opportunity to have more certainty in their milk price. The pilot will mean farmers can choose to lock in a milk price announced at the beginning of a season for up to 75 per cent of their milk supply.

Fonterra’s Managing Director of Group Optimisation and Supply Chain, Ian Palliser says the past few years have confirmed that volatility in commodity prices is here to stay.

“We recognise that every farming business is different. And while most farmers can live with the market volatility, there are times when some farmers would prefer more certainty as it would help them manage their own farming businesses,” Mr Palliser says. . .

Fonterra confirms supply offer dates:

Fonterra Co-operative Group Limited today confirmed that a Supply Offer enabling farmer shareholders to sell the economic rights of some of their shares will open on 2 May and close at 5pm on 23 May.

Farmer shareholders will have the opportunity to offer to sell the economic rights of up to 25 per cent of their minimum required shares (‘Wet Shares’) to the Fonterra Shareholders’ Fund.

The price farmers will receive for their economic rights (the “final price”) will be announced on 16 May. It will be calculated by reference to the average daily sales prices on the NZX for Fonterra Units for each trading day between 2 – 15 May inclusive.

Farmer shareholders will then have a further week after the final price has been announced to confirm if they wish to participate in the Supply Offer before it closes. . .


Rural round-up

30/04/2013

New Lincoln Hub plans unveiled:

Science and Innovation Minister Steven Joyce and Primary Industries Minister Nathan Guy have today unveiled concept plans for a world-class agricultural research and education facility to be sited at Lincoln, near Christchurch.

The Lincoln Hub concept plans and business proposal have been developed by a partnership of Lincoln University, DairyNZ and Crown Research Institutes (CRIs) AgResearch, Plant & Food Research, and Landcare Research.

“The Lincoln Hub has the potential to transform New Zealand’s farming productivity by providing a one-stop shop allowing information and ideas to be shared more easily,” Mr Joyce says. “Internationally, science and innovation parks that collect together public and private organisations in one place drive a lot of education, science and innovation. The Lincoln Hub can achieve this for New Zealand farming.” . .

AgResearch capitalises its strengths to boost science:

A mammoth $100 million investment in AgResearch’s core science resource will help boost its potential to support exports from the primary industries in reaching $60 billion by 2025, on current policy settings.

“It is no secret that some of AgResearch’s physical scientific infrastructure is getting a bit creaky,” says Dr William Rolleston, Federated Farmers Vice-President.

“It was a genuine pleasure to be at the unveiling of an impressive roadmap that will also see the “hubbing” of primary research capabilities at and with Lincoln University. . .

Meat Industry excellence Group campaign warms up – Allan Barber:

The MIE organised farmer meeting in Feilding on Friday was attended by about 700 farmers which one speaker from the floor compared unfavourably with 2000 at the Drought Shout. However there is obviously an increasing level of support for substantial change to the meat industry’s operating method which results in volatile market returns.

Alliance and Silver Fern Farms were both represented and the respective chairmen, Owen Poole and EoinGarden, spoke in support of the group’s aims. Poole told the meeting the industry was working constructively to develop an improved model which was simpler than MIE’s plan and it was important to ensure the two plans were complementary. . .

MPI’s loss is LIC’s gain but Primary still comes out on top:

The resignation of Wayne McNee, Ministry for Primary Industries Director-General, to take up the position of Chief Executive at Livestock Improvement Corporation (LIC), will still see this talented person working in and for New Zealand’s primary industries.

“This role shows the versatility of Wayne who has performed to a very high standard with the public service and now departs for a high profile leadership role in a company important to New Zealand agriculture,” says Bruce Wills, President of Federated Farmers.

“Wayne has put the Ministry on the right path for farmers following the merger of the old MAF with the Ministry of Fisheries. I feel disappointed in one regard because he leaves it, just when we are starting to see the fruits of his work appear in this new and dynamic Ministry. . .

Budget 2012; support for frontline conservation work:

An additional $20 million over four years has been allocated to the Department of Conservation in Budget 2013 to provide for additional frontline roles and the upgrade of recreational facilities, Conservation Minister Nick Smith announced today.

“The four year funding package complements the Government’s recently announced tourism investment. It recognises that DOC is the Government’s primary agency responsible for providing infrastructure, visitor services and nature-based experiences that support the tourism industry,” Dr Smith says. . .

Innovative Dairy Companies Form Partnership to Boost Exports:

Two of New Zealand’s most innovative dairy companies are forming a partnership to boost exports to one of the world’s fastest growing consumer markets.

Synlait Milk will next month despatch the first consignment of a2® Platinum™ infant formula destined for mothers and infants in China. a2 milk™ contains only the A2 version of the beta casein protein which is more comparable to protein that mothers naturally produce than other versions of the beta casein protein found in standard milk.

Synlait Milk will be processing a2 milk™ from 10 suppliers from August this year and will further expand production to meet the requirements of A2 Corporation when a2® Platinum™ infant formula becomes available to mothers in New Zealand and Australia later this year. . .

Brancott Estate Celebrates the End of a “Sensational” Vintage:

Vineyard beats the weather to harvest pristine, flavoursome fruit

Early predictions of an outstanding vintage have proven true for Brancott Estate, the pioneers of the original Marlborough Sauvignon Blanc, who have successfully completed harvest ahead of autumn rain, and with fruit that bears all the characteristics of the region.

“The season has been so dry until now and this has delivered a sensational vintage for Marlborough” says Patrick Materman, Chief Winemaker for Brancott Estate. “While we’ve enjoyed the sunshine, it hasn’t been a particularly warm season, tracking around the long-term average in terms of Growing Degree Days. This, combined with the lack of rain, is a real positive for vineyards. The dry conditions mean pristine fruit development and allow us to make harvest decisions based on optimal flavour development, while the relatively cool temperatures ensure the aromatic expression and balance of natural acidity that has made Marlborough famous.” . .


Rural round-up

29/04/2013

Hydatids rule changes proposed:

The Ministry for Primary Industries is proposing changes to controls covering a disease that has not been seen in New Zealand since the 1990s.

Hydatids can infect humans, sheep and other animals, and is contracted from dogs which carry the hydatid tapeworm.

The disease killed more than 140 people in a decade between 1946 – 1956. Many more people had to have surgery to remove hydatids cysts.

After about 50 years of control efforts, including regular dog dosing, the Ministry of Agriculture declared New Zealand to be provisionally free of hydatids in 2002.

But regulations have remained in place aimed at preventing any future outbreaks. . .

Farmers back tradeable killing rights, says Beef + Lamb:

Beef + Lamb New Zealand’s chairman says he’s had strong farmer feed-back supporting tradable slaughter rights as one way of helping to rationalise the processing end of the meat industry.

Mike Petersen says the concept was first suggested in a consultants’ report 28 years ago, but never picked up.

He thinks it could be a circuit breaker to unlock the challenges of getting farmers and privately owned meat companies to work together.

Mr Petersen says a share of the kill would have to be allocated to each company, and from a set point in time companies would have the right to slaughter that percentage on an annual basis.

He says regular updates on the size of the kill would be needed. . .

Meat firms working on simple plan

Meat companies are working together on a plan to rationalise the processing industry and the two big co-ops are willing to work with the Meat Industry Excellence group, farmers at a packed meeting in Feilding on Friday were told.

The co-ops and up to 700 farmers endorsed the MIE group’s aims and put forward John McCarthy, Steve Wyn-Harris and Tom O’Sullivan to represent North Island farmers on the group executive.

Alliance chairman Owen Poole said the industry was putting effort into an improved model and a decision on whether it would go ahead could be expected within two months. . . .

North Island farmers back calls for meat industry reform:

North Island farmers are planning further meetings to keep the pressure on for meat industry restructuring.

An estimated 600 to 700 farmers met in Feilding on Friday, to support the Meat Industry Excellence Group campaign launched in the South Island last month.

It has a five step plan to overhaul the red meat sector to improve profitability for companies and farmers through more co-ordinated processing and marketing.

Spokesman John McCarthy says there’s a strong commitment from farmers to see meat industry reforms through this time, but it is important to take things one step at a time. . .

Federated Farmers feed operation may be approaching an end:

The Federated Farmers Grain & Seed led feed operation, which will have shipped some 220,000 small bale equivalents from the South Island, may soon be approaching an end. With demand beginning to slow, Federated Farmers is concerned some farmers may be over-estimating pasture recovery following rain.

“Federated Farmers Grain & Seed can rightly be proud of the contribution our members have made in helping our North Island colleagues out,” says David Clark, Federated Farmers Grain & Seed Vice-Chairperson.

“With winter upon us demand for feed is slowing right up and we don’t understand why. . .

A Beekeeper’s Story:

When he was just a young lad, Bill Bennett built his first bee hive from scrap wood.

Thus a lifelong passion for producing the best quality Manuka honey had its beginnings.

From its humble beginnings, SummerGlow Apiaries has blossomed to over 1600 hives, setting the standards for Manuka Honey production.

Bill and Margaret Bennett have been beekeeping for over 36 years in the greater Waikato area.

Summerglow Apiaries specialises in the production of high activity UMF Manuka Honey.

Back in the early days of SummerGlow, Bill and Margaret used to make their own bee hives. . .

Queenstown Biking Community ‘thrilled’ with New Rabbit Ridge Bike Resort:

Queenstown’s Rabbit Ridge Bike Resort got the thumbs up at the soft launch yesterday when members of the local biking community got to check out the newly-constructed trails.
 
Some last minute rain ensured the trails were ‘bedded in’ and locals of all ages and experiences took to the trails with vigour.
 
From experienced downhill bikers to families with children, everyone enjoyed the opportunity to test trails including the beginner ‘Bunny’ trail and intermediate Donnas Dually track.
 
The invitation-only event saw bikers, bike shop owners and front line staff experience the resort for the first time. Rabbit Ridge is a joint venture by local bike business Around the Basin and Gibbston Valley Winery and will be the area’s only year-round dedicated and serviced bike resort. . . .

Canada farm persecuted by gov., thankful for help: Tiffany’s non-blog:

For some background:

Apparently I am farmed and dangerous…

But I am not a criminal. I’m a shepherd, farmer and writer who has been preserving rare Shropshire sheep for the last 12 years, and farming various other heritage breeds and vegetables for the last 30.

Then the Canadian Food Inspection Agency (CFIA) killed my beautiful ewes and their unborn lambs to find out if they were healthy. They were.

They were also rare and pregnant. Now they are dead. . .

There are always at least two sides to a story and a Google search led me to several others including these two:

Sheep flock is both rare and slated for slaughter – Suzanne Atkinson:

A Hastings’ woman’s desperate attempt to save her rare Shropshire sheep from the CFIA’s axe is ballooning into a fundraising and full scale social media campaign.

Montana Jones, whose flock of 44 Shropshires represents approximately 25 percent of the country’s inventory of the breed, is facing the decimation of her flock after Scrapies was found in a sheep which originated in her herd more than five years ago. While her entire herd has tested negative – a test considered 85 per cent accurate, the 44 animals have also been genotyped QQ and are considered less resistant to the disease.
While Scrapies is not a human health risk, it can affect the productivity of sheep and CFIA is mandated to eradicate it within Canada to enhance trade opportunities. . .
Rare sheep on death row – Alyshah Hasham:

Montana Jones loves her Shropshire sheep.

She raises the rare heritage breed at no profit in a bid to protect the bloodlines tracing back to some of the first sheep on Canadian shores.

But the fluffy romance of 12 years has become a nightmare, with more than half of her flock of 75 slated for the chopping block for no reason, says the farmer.

Her Wholearth Farm in Hastings, near Peterborough, was put under quarantine and listed as a possible source of infection after a ewe she sold to an Alberta farmer five years ago was diagnosed with scrapie. . .

How endangered are Shropshire sheep? – Agrodiversity  Weblog:

You may have seen stories in the past week or so of a flock of Shropshire sheep that authorities in Canada have threatened with destruction. The sheep belong to Montana Jones, who raises them at her Wholearth Farm, near Hastings in Peterborough. Five years ago she sold a ewe to a farmer in Alberta, and that sheep has been diagnosed with scrapie. As a result, the Canadian Food Inspection Agency wants to destroy other animals from the same flock who are infected or suspected of being infected.

One problem for Montana Jones is that the test “is only about 85% accurate”. So the sheep that tested positive may not have scrapie, although I have no idea what that 85% figure actually means. False positives? False negatives? What?

It is a long time since I last had to get my ahead around scrapie, the risks to humans (it is not “mad sheep disease”), the different breed susceptibilities, and the different approaches to eradication. All of those are important issues, I am sure. What concerns me about Montana Jones’ case is whether the appeal to the rarity of Shropshire sheep justifies not taking the precaution of slaughtering some of the flock. . .


Rural round-up

01/04/2013

We need a dream – Dave Stanton:

My neighbour was saying farmers were once ranked alongside doctors, lawyers and accountants.

My dad used to shear the sheep and go off to town and buy a new car.

Fat chance of that these days. You can draft all your lambs and barely clear the seasonal financing.

We are still getting the same prices for beef that we were 20 years ago, when we started farming, and inflation has tripled the cost of things since then.

To borrow from Martin Luthur King, we need a dream.

A dream of a better future. . .

True cost sought for consolidation – Nigel Stirling:

The farmer-led group behind a renewed push for consolidation in the meat industry say its major players need to come clean on the true costs involved.

The Meat Industry Excellence Group is pushing for 80% of New Zealand’s red meat to be sold through a single company in an effort to boost recent poor returns.

Alliance Group chairman Owen Poole has put the cost of such a plan at $600 million. . .

Drought challenges still lie ahead:

 Minister for Primary Industries Nathan Guy says he is pleased with the way New Zealanders have rallied to help drought-affected communities, but challenging times still remain ahead.

“Scattered rain is forecast over the next week which will be welcomed, but on its own it won’t be enough to break the drought conditions. We still need plenty more rain to help grass growth before the colder weather settles in.

“However it’s encouraging to see a range of support available from not just the Government but also businesses and communities.

“Federated Farmers have run a series of ‘farming in drought’ field days and have been organising shipments of feed from the South Island to the North which have been gratefully received. . .

Top soil scientists gather:

More than 150 soil scientists from around 30 countries will meet in Queenstown in April to discuss the ins and outs of testing soil.

They will also look at the environmental impacts of increased fertiliser use on soil carbon and the increasingly important role of soil testing in environmental stewardship both now and in the future.

The symposium, held every second year at different locations around the world, is being hosted in New Zealand for the first time in its 26-year history. . .

Fonterra to slash Australian brands to restore profitability:

(Business Desk) – Fonterra Cooperative Group plans to slash its consumer brands in Australia to restore profitability as competition intensifies for both milk supply and retail sales.

The company’s ANZ division, which produces consumer products and ingredients in Australia and New Zealand and runs the RD1 rural supplies chain, posted a 32 percent decline in normalised earnings before interest and tax in the first half to $98 million. Of that, EBIT from Australian consumer brands fell 31 percent while New Zealand consumer brand earnings were “slightly up.”

“There’s a new reality in Australia,” chief executive Theo Spierings told reporters on a conference call. . .

Northland farmers urged to register for DairyNZ Farmers’ Forum, 5 April:

DairyNZ’s national series of Farmers’ Forum events kicks off in Whangarei on Friday, 5 April.

The event is free to levy-paying farmers and their staff who are urged to register this week for the informative and practical seminars to be held at the ASB Leisure Centre from 9.30-2pm.

Each year the Farmers’ Forum provides a great opportunity for dairy farmers to see how their levy is invested and to learn about dairy industry research and development work.

Every second year the event is held in the regions where forum topics are customised based on locally relevant issues. . .

Once a day milking a hot topic at North Island DairyNZ Farmers’ Forums:

The benefits and costs of milking cows once a day when you’re short on feed will be the focus of one hot science topic scientists will be sharing with dairy farmers at its North Island DairyNZ Farmers’ Forum events during April and May.

DairyNZ kicks off its regional Farmer’s Forum events in Whangarei on 5 April. Two other North Island events are in Hawera on 18 April and Woodville on 28 May.

Extreme weather conditions, such as those we’re experiencing now but also flooding in late winter and early spring can create short and long term feed shortages. DairyNZ scientist Jane Kay said for many years farmers have used once-a-day milking as a means of alleviating nutritional stress on the cow. . .

Farmers, don’t be afraid to discuss: “Who gets the family farm?”

DairyNZ’s Farmers’ Forum event is coming to Hawera on 18 April. One of the most anticipated speakers at the event is Joan Baker, a succession planning expert.

Joan herself comes from a farming family and knows first-hand the intricacies that come with succession. She says it can be quite easy to organise all the money and the legalities surrounding successions, “It’s actually very difficult for people to face up to the need to plan for succession and to think about what they really want and to have the conversations with all of the people they need to have them with to make it happen.”

She acknowledges that the most difficult decisions are the emotional ones: “What’s very hard for people is to do the thinking and the talking that’s required to get them to the point of having a succession plan.” . .


Sheep industry in farmers’ hands

19/03/2013

Alliance Group chair Owen Poole suggested a mega-merger of 80% of meat companies several years ago.

That idea was scuttled by Silver Fern Farms.

The 80% model has resurfaced as one of six principles put forward by the Meat Industry Excellence Group which attracted hundreds of farmers to a meeting in Gore yesterday .

• Up to 80% of red meat processed and marketed by one ”coalition of the willing” structure.
• Identify and extract best personnel and strategies. Contracting of stock to specification; need to commit to a company.
• Legislation required to support new structure be sought.
• All participants to fund restructuring.
• Suppliers to be treated fairly, equally and with full transparency.

This time both major companies appear to be supportive.

However, they are also aware of the costs and challenges:

. . . Alliance Group chairman Owen Poole said there was not a meat processor or exporter in the country that did not think a better model should be employed.

Alliance Group and Silver Fern Farms had been talking for some time about that prospect and were still in discussions. One of the group’s principles was for up to 80% of the red meat processed and marketed by one ”coalition of the willing” structure.

Silver Fern Farms chairman Eoin Garden said that was a ”huge challenge”.

”Look how the dairy industry is fragmented because all of a sudden when you get a major player … Federated Farmers or farming leaders get up and say we need another player in the industry to keep the big fellow honest,” Mr Garden said. . .

Merging the two big co-operatives could be a first step but it would be a very expensive one:

Mr Poole warned a merger of the co-operatives would mean they would bear the burden of the amalgamation costs. There were significant costs in that, which should be shared across the industry, whether you were a co-operative supplier or non co-operative supplier. He estimated it at between $250 million and $300 million and asked co-operative suppliers if they wanted to ”pick that up on your own”.

He urged those present to be careful with the process and to ”get it right”.

The biggest challenge is to get all farmers on one page.

Farmers always want a better price than their neighbours and what they say they want for the industry and what they do in their own operations are often very different.

There is too much capacity but how much is enough?

What would be happening now if farmers having to cull their flocks because of drought couldn’t get killing space and what would that do to the already low prices they’re receiving?

Who’s willing to pay the very high costs of plant closures?

The answers are in farmers’ hands – all could now choose to sign up each season to supply one or other of the co-operatives and if most did the smaller companies would be squeezed out of the market.


Alliance reports $50.8m loss

09/11/2012

Anyone who paid any attention to the industry last season would have known to expect red ink in meat company annual reports.

Even so the media release from Alliance Group makes sobering reading:

Alliance Group has reported a net loss after tax of $50.8 million from a turnover of $1.37 billion for the year ending 30 September 2012.

The result is after incurring restructuring costs of $13.5 million arising from the cessation of sheep
and lamb processing at its Mataura Plant.

In announcing the company’s first operating loss in 20 years, the Chairman of Alliance Group, Owen
Poole, said: “While this is a very disappointing result, it reflects a substantial change in our export
markets over the past 12 months, in particular for sheepmeat.

“Export   market   prices   for   lamb   suffered   a   steep   decline   in   key   markets   due   to   the   widespread
economic crisis. The increasing value of the New Zealand dollar through the period exacerbated the
impact of the price decline.

“We accept that many exporters and processors like ourselves did not respond to the changing
economic environment fast enough, and in an intensely competitive industry, continued to pay too
much for livestock for too long.

Competition for stock which boosted returns for farmers in the short term have cost the company dearly.

This won’t be the only annual report showing a big loss.

“Despite the significant loss, and after providing for the restructuring costs associated with ending
sheepmeat processing at  our Mataura Plant and the closure of Sockburn Plant, the company’s
balance sheet remains robust.

“These decisions, as well as investments in beef processing at Mataura, venison processing at
Smithfield and rendering at Lorneville, will provide significant ongoing cost savings and benefits.
Alliance Group anticipates a much improved financial result for the 2013 year.”

The company is also making changes to its procurement policies to reinforce its commitment to loyal
shareholder/suppliers, he said.

Grant Cuff, Chief Executive of Alliance Group, said: “Despite the challenging economic environment,
stability is now returning to the market and recent events give Alliance Group and its 5,000
shareholders cause for optimism.

“China continues to show strong growth, particularly with higher-value products being added to the
offer, while the first shipment of Pure South lamb has now arrived in Brazil. Alliance Group believes
Brazil offers significant potential, given its natural affinity for red meat, a growing population and an
emerging middle class.

“The recent announcement of an exclusive deal to supply chilled New Zealand lamb to iconic UK
retailer Marks & Spencer is also good news for suppliers.”

We spent a day with one of the men responsible for selling our meat when we were in London in June.

Lamb was by far the most expensive meat on supermarket shelves. This showed we can’t hope to compete on price, we have to market on quality.

However, even the top end of the market has its limits and the price paid for stock last season was out of kilter with the prices consumers were willing to pay for meat in supermarkets and restaurants.

Prices for stock will be lower this season but the medium to long term outlook for sheep and beef are brighter and the company is strong enough to withstand this one bad year.


MIAG taking SFF to court

15/08/2008

The Meat Industry Action Group  is taking Silver Fern Farms to the High Court to force it to name a date for a special general meeting.

MIAG collected enough proxy votes from shareholders to force both SFF and Alliance Group to hold sgms as a first step in MIAG’s plan to promote a merger between the two co-operatives.

Alliance has agreed to hold its meeting on September 5, but MIAG said SFF has delayed committing to a date, forcing it to seek a court ruling.

But it appears the meat companies are less than enthusiastic about calling the special meetings at which MIAG has 11 remits to put to shareholders.

MIAG says the remits would advance industry consolidation and help create a new farmer-owned entity, it calls the National Champion, to handle 80% of the country’s red meat industry.

Alliance chairman Owen Poole this week slated MIAG, saying the resolutions were prescriptive, divisive and counter to the legal requirements of directors acting in the best interests of the company.

SFF chairman Eoin Garden accused MIAG of being disruptive and misleading.

“It is more likely that history would record MIAG, by its actions in destabilising the governance of both companies, has in itself been the cause of slowing the progress of industry consolidation.”

MIAG has got the co-operatives agreeing about something – their opposition to the ginger group.

Mr Garden said the company had agreed to hold the meeting following its own special meeting on September 8. A promise to hold the meeting was communicated to MIAG on August 10 and he said the court action was a waste of time, resources and money.

It was important to get an outcome on the SFF-PGG Wrightson vote so the new board could hear issues raised at the special meeting initiated by MIAG.

“We have a firm option on the table to be voted on, whereas MIAG requirements are about a process, as opposed to a concrete transaction.”

MIAG is seeking proxies for the special general meetings. Farmers should be very careful about giving them until they understand exactly what their votes would be supporting.

The groups demands for industry consolidation are not a recipe for improved returns and as Poole points out they would breach directors’ legal responsibility to act in the best interests of their company.


Too late for merger talks

14/08/2008

Events have overtaken any ideas Silver Fern Farms and the Meat Industry Action Group have about a merger between SFF and Alliance Group.

The prediction that the sheep kill will be down by 9 million this season changes everything.

Even without that, although there were good reasons why SFF might to merge with Alliance, the case for Alliance joining SFF was much weaker; and something MIAG seems not to understand is that directors are legally required to act in the best interets of the company.

But now sheep numbers have dropped so steeply the meat industry is entering a new era.

There will have to be more works closures and job losses not only in the freezing industry but in allied areas such as shearing. That will be difficult for the many people involved but there is a silver lining to this cloud for sheep farmers because decreased supply is coming while demand is rising and that will mean better prices.

SFF lost any opportunity it might have had for joining others in the industry when it pulled out of discussions over Alliance’s plan for a mega merger. It now has its hopes set on shareholders accepting PGG Wrightson’s proposal to take a 50% stake in the company and says it there is no plan B.

But if that plan isn’t accepted SFF will have to come up with another, and the letter Alliance directors has sent to shareholders makes it clear it has its own plan which don’t involve either SFF or PGW.

In a strongly worded letter, Alliance chair Owen Poole pours cold water on both SFF’s desire to reopen merger discussions and its proposal to allow PGG Wrightson to take a 50% stake in the company.

He wrote, in response to one SFF chair Eion Garden wrote to Alliance shareholders, and lists the arguments against the PGW proposal and SFF advances.

 Poole’s letter follows the break: Read the rest of this entry »


SFF wants to resume merger talks

07/08/2008

Silver Fern Farms’ directors want to resume merger discussion with Alliance Group.

They have written to Alliance directors with their request and to Alliance shareholders explaining what they are doing.

I don’t fancy their chances because just this week Alliance chair Owen Poole told Rural News the opportunity for meat industry consolidation had passed.

SFF and PGW’s proposed partnership makes a merger between SFF and Alliance even less appealing and other parties in the industry, such as Affco and Anzco, have moved on.‘The opportunity for industry aggregation has passed. What we are going to end up with, potentially, is SFF and PGW together, and the rest.’

SFF chairman Eoin Garden and PGW chairman Craig Norgate have both made it clear they would like Alliance to be part of the partnership.

Poole says he has had a ‘brief, high-level discussion with them’ about that possibility but it remains unappealing.

He has ‘a whole page’ of reasons for that, but the key concerns are loss of farmer control, the corporate/cooperative hybrid model, and that Alliance is already vertically integrated.

 One of SFF’s selling points has been that there is no Plan B. But Alliance begins three weeks of shareholder meetings next week and that will provide the opportunity to show they have an alternative.

‘Alliance, in terms of sheepmeat, is now the biggest player in the country with only six plants, and eight in total… its done its rationalisation. SFF still has 20 more plants.’The cut in lamb numbers will create ‘competitive tension’ in procurement, he predicts, but whether that will be a greater war than before, he is unsure.
Farmers keep criticising the industry for procurement battles and the Sunday night ring-around. However, the solution to that lies not with the companies but the farmers. Loyalty is a two-way street and if farmers want loyalty from the company they must be prepared to give it as well.

The letter to shareholders follows: Read the rest of this entry »


MIAG has numbers for merger meetings

17/07/2008

The Meat Industry Action Group has the shareholder numbers to force Alliance Group and Silver Fern Farms to call special general meetings and discuss a merger.

MIAG wants an independently-chaired joint working party to look at consolidation.

Group spokesman John Gregan said the proposed PGG-Wrightson purchase of 50% of Silver Fern Farms would have no impact on his group’s ultimate plan of creating an entity to handle 80% of New Zealand’s red meat procurement and processing.

The meetings were unlikely to be called until after September’s vote by Silver Fern Farms’ shareholders on the proposal to merge with PGG-Wrightson.

Alliance Group chairman Owen Poole said he had meetings planned with shareholders next month to discuss his company’s strategic plan and would not consider holding a special meeting until after those talks.

SFF chief executive Keith Cooper said the board would meet next week and consider the action group’s proposition.

Mr Gregan did not have any problem with delaying the special meetings, saying having them after the PGG-Wrightson-Silver Fern Farms vote would make the situation clearer.

A “no” vote by shareholders would add to the pressure to get the two co-operatives talking. A “yes” vote meant the industry still needed consolidation, he said.

The detail of the resolutions was still being worked on with the meat companies. Mr Gregan said another remit would try to ensure the committee reached a decision.

“It is all very well telling them to get around the table, but we need some teeth . . . we need to give the chairman some ability to make them toe the line.”

This presupposes the working party will conclude a merger is the best option. 

It also ignores the legal requirement for directors to do what is in the best interests of their companies so no matter what the working party concludes unless it is in the best interests of each company it will not be acted on.


Alliance minding own business

14/07/2008

Alliance Group CEO Owen Poole  says the company was not looking at merging with Silver Fern Farms because there was no proposal to do so.

He said that it was business as usual for Alliance in spite of speculation that a plan by PGG-Wrightson to invest $220 million in SFF would draw Alliance into merger talks. 

“We are working on our own strategy and we are going to talk to our shareholders about our own plans,” he said in an interview last week. Mr Poole said the PGG-W and SFF merger was the business of those companies.

“As far as Alliance is concerned, they’ve got to deal with their own shareholders.”

He had some reservations about the merger and the loss of farmer control, governance issues from having a corporate investor, the hybrid ownership model and outsourcing stock procurement.

All very valid concerns. 

Alliance experienced the hybrid ownership model when Freesia Meat Holdings was an investor, and Mr Poole said it was difficult reconciling conflicting demands.

“It was a good day for us both when the arrangement ended.”

Mr Poole said procurement was “a central pillar to vertical integration,” which he felt should not be outsourced to a third party.

If PGW is contracted to procure for SFF, what do their stock agents do when other companies offer better prices?

Alliance already operated an integrated model. In 1997, it launched Securing the Future, which introduced a genetics and breeding scheme to farmers to show the type of animals wanted by the market, based on consumer research.

It has also addressed capacity issues and recently introduced Via Scan technology, which objectively measured lamb carcasses and provided the information to farmers.

“This is not new. We’re extremely well advanced in all of this,” he said of changes proposed by SFF.

If Alliance is implementing the right strategy under its own steam, I’m yet to be convinced SFF needs PGW as a partner to do the same thing.


Informed Vote Essential for PGW SFF Deal

11/07/2008

Gerry Eckhoff  has some concerns about the proposal for PGG Wrightsons to take a 50% stake in Silver Fern Farms.

The wider industry is bedevilled by self-interest, protectionist or silo mentalities which have cost the sheep industry dearly.

A statement by Owen Poole, chairman of Alliance Group, that Alliance has the best brands in Europe, is a case in point. Silver Fern Farms (formerly PPCS) also tell farmers that its brands are the best. Both are wrong.

The best brand is “New Zealand Lamb”, yet the two large co-operatives continue to believe in their own rhetoric and that, divided, we farmers stand a better chance of survival in the international market place.

I don’t think Alliance is a good brand name for meat. Silver Fern Farms is an improvement on PPCS but Eckhoff is right, New Zealand Lamb is the recognised brand.

The offer by PGG Wrightson to buy 50% of Silver Fern Farms (SFF) is, in reality, the only lifeboat afloat as the sheep industry sinks, so it is little wonder many farmers want to grasp the lifeline offered.

The $220 million offer may well be a very fair one but the question as to why the SSF board, after deciding to seek outside capital, did not call for wider expressions of interest for a 50% stake in the company remains unanswered by the board.

Farmers have had their shares in the company capped because it’s argued too big a shareholding is contrary to the co-operative ethos. But that doesn’t seem to be a consideration with PGW taking a 50% share. A lot of farmers would not be in a position to increase their investment, but there may be some who would not only be able but willing to do so.

Silver Fern Farms has a turnover of $2 billion so the offer by PGG Wrightson of $220 million effectively allows the purchase of a controlling interest in New Zealand’s biggest meat company, for 12c in the turnover dollar.

That seems like a fire-sale price to many sheep farmers, but it also speaks volumes as to the ability of Craig Norgate and Tim Myles of PGG Wrightson.

Farmers will await with interest an analysis/advice from the one non-farmer or independent director of SFF.

The SFF chairman, Eion Garden, says the proposal should not be seen as a financial bailout. That view will be greeted with some incredulity by observers.

If Mr Garden is correct, then he needs to explain why he does not simply invite Mr Norgate and Mr Myles on to the board of SFF for their undoubted expertise, but without the cash.

The Board says the capital injection will be used for improved technology and marketing, but that doesn’t explain why it needs to come from PGW.

Much of the rationale for the merger presented to farmers is the need for year-round supply and the technical assistance PGG Wrightson can bring to ensure this happens.

All that needs to happen to ensure supply during the August-September-October period (the off-season for supply volumes) is for meat processors to ask farmers, in, say, February, to submit a tender price to supply whatever number of stock the processor needs during these months.

The processor then obviously accepts the lowest tender prices until the required numbers are reached. Whether a merger is necessary to achieve that easily obtained outcome is a moot question.

A change in strategy doesn’t necessarily require a change in structure.

It is concerning that the emphasis of the merger appears not to be so much about capturing a greater share of the overseas value chain but locking in the domestic supply chain.

At a time when the world is increasingly short of meat protein and with the prices set to rise substantially, the board of SFF offers to sell 50% of the business to a very willing buyer.

That clearly indicates that there is not too much wrong with the industry – just the people currently running it.

TI wouldn’t say that about all the people running the industry.

If sheep farmers choose to exercise their right to vote on this issue, as they must, they have a duty to future generations to inform themselves as well as possible on all the issues and not just rely on the opinion of vested interests.

That’s good advice for any vote, but you can’t require people to have a comprehension test before they put their tick on the voting paper.


Alliance Committed to Co-operative Model

09/07/2008

While Silver Fern Farms is open to PGG Wrigthson’s offer to take a 50% stake in the company, Alliance Group remains committed to the co-operative model.

Alliance Group chairman Owen Poole said given recent strong feedback from farmer owners, it wanted to keep control of the meat processor with about $1.1 billion in annual sales.

Poole said yesterday Alliance did not want to comment on any industry consolidation discussions it may be involved in.

Last week, listed PGG Wrightson (PGGW) announced it wanted to take 50 per cent ownership of Silver Fern Farms (SFF), formerly PPCS, for $220m, but the plan is dependent on a 75 per cent approval vote by SFF farmers.

Poole did point to media-based “rumours” that this week it would meet Affco, another processor, for informal talks, but he would not comment further.

Last week SFF chair Eion Garden said his company didn’t have a Plan B. Is this a hint from Poole that Alliance might be coming up with one?

Alliance’s board will meet in Invercargill tomorrow.

Poole said any board decisions by the Invercargill co-operative on a response to the PGGW-SFF plan would be kept behind closed doors.

However, the board would give a response at a series of farmer meetings next month.

Poole expected annual farmer returns to improve 30 per cent next season starting from October 1, compared with the existing season, taking some pressure off farmers.

That will take the price of a lamb to somewhere between $75 and $80. Still not at the $100 which is what farmers say they need,  but a definite improvement on last season’s prices of $50 to $60 a head.

He had proposed four months ago a merger of the biggest meat companies to control 80% of the nation’s lamb and beef produce, but talks with SFF fell apart.

Poole said yesterday that 80 per cent level remained the key for any aggregation.

Farmers that had phoned him were strongly against any move away from the co-operative standard.

Alliance shareholders and supplying farmers had been concerned about the new developments, particularly if it would take an industry player away from co-operative status.

This would make the 80 per cent consolidation level widely accepted as a minimum that much harder to reach, he said.

“(But) if there’s opportunity for aggregation under an open model, then we’ve got a very open model.”

He added his phone had been extraordinarily busy from concerned farmers with no enthusiasm at all for the idea of corporate involvement in Alliance ownership.

Fonterra shareholders aren’t keen on diluting farmer ownership of their company. The grapevine is suggesting SFF shareholders are yet to be convinced that losing farmer control will be the best option for the meat industry too. What they say now is not necessarily a reflection on how they will vote later in the year and someone could come up with a Plan B before then anyway.


Meat Industry Disunity Scuttles Taskforce

29/06/2008

Disappointment but little surprise has greeted the news that the Meat Industry Taskforce  has disbanded.

Taskforce chairman Sir John Anderson said yesterday that consultant PricewaterhouseCoopers (PWC), which was commissioned to complete an industry analysis, could not get informed consent from all industry participants.

In addition, Sir John said that in the last week one company had announced it was withdrawing its support for an industry strategy, saying it was pursuing its own plans, making it impossible to compile a report.

Meat and Wool New Zealand (MWNZ) established the taskforce earlier this year to create a red meat industry strategy to address international marketing, supplier dynamics and processing.

Owen Poole who chairs Alliance Group said his company supported the taskforce and was disappointed it had failed. 

Mr Poole said the strategy could have been the catalyst for industry aggregation, and the fact PWC was going to seek contributions from farmers, meat companies and unions, would have produced meaningful results.

“I see it as a lost opportunity,” he said.

Silver Fern Farms chief executive Keith Cooper said he supported any initiative to create an industry strategy, but the taskforce never released its terms of reference, so companies did not know what it was trying to achieve.

Mr Cooper said Silver Fern Farms (formerly PPCS) was not the reason the taskforce failed.

“In regard to the Meat Industry taskforce announcement, from a Silver Fern Farms perspective, we were never asked for informed consent by PWC on the issue.”

The company supported any initiatives to improve supplier returns.

“Silver Fern Farms supported any initiative about reviewing the industry strategy or structures.”

Anzco chairman Graeme Harrison was also supportive but not surprised it had failed, given the reluctance of the four major meat companies to co-operate on industry issues.

“Unless the four companies were prepared to talk in meaningful ways, then it was never going to happen.”

While he had reservations about the size of regulatory and commercial hurdles the taskforce faced, he said it would have provided an important circuit-breaker for farmer confidence.

Mr Harrison said commercial reality would now play its hand and there would be change.

“Sooner or later, something will happen and it will be a commercial decision.”

The 07-08 season was a very tough one for sheep farmers with falling returns and steeply increasing prices for fuel, fertiliser and other inputs. The outlook for next season’s lamb prices is more optimistic, but even so they’ll be hoping that whatever happens in the industry happens sooner not later.


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