Rural round-up

October 2, 2018

Fonterra’s China farms are a target for asset sales – Keith Woodford:

This is the first of a two-part series putting Fonterra’s China Farms under scrutiny. In this first part, the focus is on the origins of how Fonterra managed to entrap itself in its loss-making China Farms project.

Fonterra’s new leadership team of Chair John Monaghan, CEO Miles Hurrell and CFO Marc Rivers has made it clear in recent farmer meetings that debt reduction is a priority.  All options are supposedly on the table. However, the only way to achieve rapid debt reduction is by selling non-strategic assets. In that context, Fonterra’s China Farms must surely be lined up in the cross wires.

Fonterra’s China Farms have been loss-making for at least four years. Accumulated losses over that period, using market prices rather than internal transfer prices, total NZD $179 million EBIT.  These losses are before any contribution to Fonterra’s unallocated overheads of nearly $500 million per annum or paying interest on the borrowed capital. More detail on that in Part 2 of this series. . .

Planting a billion trees – Primary Land Users Group:

How does that relate to the Waikato Region under PC1?

The Government has set a goal to plant one billion trees over 10 years (between 2018 and 2027).

Why plant 1 billion trees? The short answer is because trees absorb carbon dioxide (CO2) from the atmosphere and turn it into wood, which holds carbon for as much as hundreds of years. Trees absorb CO2, protect the soil, improve water quality and create wildlife habitat. The long answer is because New Zealand has committed to reduce greenhouse gas levels which contribute to climate change. It has three reduction targets – for 2020, 2030 and 2050.

Urbanitess keen for a career in dairy :

One in five of all people wanting to take up a dairy apprenticeship is coming from New Zealand’s biggest city, and Primary ITO chief executive Linda Sissons says many more will be needed where they came from. Primary ITO (industry training organisation) and Federated Farmers are celebrating the first year of the joint Federated Farmers Apprenticeship Dairy. . .

Have your say on the dairy herd management scheme:

The Ministry for Primary Industries (MPI) wants to hear from the dairy industry and people with an interest in how the dairy herd improvement regulatory regime can help to ensure that New Zealand’s dairy industry remains world leading.

The dairy herd improvement regulatory regime has not been comprehensively reviewed since it was established in 2001, says Emma Taylor, MPI’s Director of Agriculture, Marine & Plant Policy. “It’s important the dairy herd improvement regulatory regime reflects the changing needs of the dairy industry. It’s timely to look at how the regulatory settings can better support industry both now and into the future. . .

Consuming milk at breakfast lowers blood glucose throughout the day :

A change in breakfast routine may provide benefits for the management of type 2 diabetes, according to a new study published in the Journal of Dairy Science. H. Douglas Goff, PhD, and the team of scientists from the Human Nutraceutical Research Unit at the University of Guelph, in collaboration with the University of Toronto, examined the effects of consuming high-protein milk at breakfast on blood glucose levels and satiety after breakfast and after a second meal. Milk consumed with breakfast cereal reduced postprandial blood glucose concentration compared with water, and high dairy protein concentration reduced postprandial blood glucose concentration compared with normal dairy protein concentration. The high-protein treatment also reduced appetite after the second meal compared with the low-protein equivalent.

“Metabolic diseases are on the rise globally, with type 2 diabetes and obesity as leading concerns in human health,” Dr. Goff and team said. “Thus, there is impetus to develop dietary strategies for the risk reduction and management of obesity and diabetes to empower consumers to improve their personal health.” . .

Capacity crowd expected at inaugural ‘Beyond Bovis’ seminar:

 Hundreds of farmers and rural professionals are expected to attend the inaugural ‘Beyond Bovis’ seminar in Hamilton next month Held in conjunction with the Waikato A&P Show the event is, according to the Director of Showing Waikato, Doug Lineham, the first of its kind in New Zealand, its goal being to rebuild and strengthen the New Zealand cattle industry in the wake of Mycoplasma Bovis (Mb).

The impact of (Mb) has extended beyond the breeding and animal containment strategies of individual farms to a widespread impact on the movement of all cattle,” Doug Lineham said. . .

 

Rural round-up

March 28, 2018

WRC Fencing Proposal Breeds Resentment in the Hills:

Drystock farmers have the most water on their land of any farming sector and are therefore key, in any final policy to improve water quality across Waikato. Under the proposed fencing rules contained in the Waikato Regional Council’s Plan Change 1, many hill country farmers will eventually be forced off their land by the costs of installing fencing and water reticulation. Worse than that, the installation such a vast amount of fencing will leave many of our smallest and cleanest streams – clogged and filthy with sediment.

Due to the nature of the ground, some hill country farmers may lose up to forty percent of their total grazing area, if the proposed fencing requirements are implemented without changes. “The absurd idea being espoused by some WRC staff, that farmers can somehow graze sheep on the sides of hills and cattle on the tops of hills is totally impractical and just shows how far out of touch the WRC is, with hill country farming realities” says Mr Andy Loader, Chairman of PLUG.  . . 

Rabobank Rural Confidence Survey Quarter 1:

New Zealand’s farmers have started the year with increasing optimism, with rural confidence edging higher after two consecutive sharp declines recorded in the second half of 2017.

The first quarterly Rabobank Rural Confidence Survey for the year – completed earlier this month – has shown the nation’s net farmer confidence index inched up to +15 per cent, from +13 per cent recorded in the December 2017 survey, primarily driven by an optimistic outlook among horticulturalists.

While the latest survey found the number of New Zealand farmers expecting the agricultural economy to improve in the year ahead had declined slightly to 27 per cent of those surveyed (compared with 29 per cent in the previous quarter) – those expecting agricultural economic conditions to worsen had fallen to 12 per cent (from 16 per cent previously). . . 

Why has Fonterra gone a2? – Keith Woodford:

It is now more than a month since Fonterra and The a2 Milk Company (A2M) announced that they are going to work together. After the initial shock, and with Malcolm Bell, National Market Manager from New Zealand-dominant dairy-semen provider LIC describing it as “the biggest announcement to come out of Fonterra since its formation”, there is a need for some analysis as to what it is going to mean.

From the perspective of A2M, there is a simple answer. It will provide a supply base of milk free of A1 beta-casein that A2M desperately needs for the coming years of growth.

For Fonterra, the issues are far more complex.  Why have they made a U-turn after 17 years of condescending denigration of the A2 concept?  And why is Fonterra doing it as a joint venture rather than striking out on its own? . . .

NZ log exports top 1M cubic metres in January, second-highest level ever for the month – Tina Morrison:

(BusinessDesk) – New Zealand exported more than one million cubic metres of softwood logs in January, only the second time in the country’s history that such a high volume has been shipped in the month.

The country exported 1.1 million cubic metres of softwood logs overseas in January this year, up 32 percent on January 2017, according to data from Global Trade Information Services published in AgriHQ’s monthly forestry market report. That’s the highest level for the month since 2014 and only the second time volumes have exceeded 1 million for a January month. . . 

Beef + Lamb New Zealand elects new chairman:

Southland sheep and beef farmer Andrew Morrison is the new Chairman of Beef + Lamb New Zealand (B+LNZ) following a Board election on 23 March.

Morrison takes the Chair after four years on the Board representing the Southern South Island region.

Along with his wife Lisa, Morrison farms a total of 1030ha of breeding and finishing units spread between Southland and Otago.  . . 

Feds and all farmers will be relieved by M.Bovis decision:

The government’s decision to cull all the livestock on properties so far identified as having been contaminated by the Mycoplasma Bovis disease will be a huge relief for all drystock and dairy farmers.

Federated Farmers applauds the Ministry for Primary Industries decision announced today to continue the cull on all the 28 farms so far infected by the nasty disease.

“Basically what this says to us is that the government and MPI are still committed to trying to eradicate this disease. Their determination to do the best we can to get rid of it should be acknowledged by all farmers,” Federated Farmers president Katie Milne says. . . 

Beef + Lamb NZ welcomes certainty for infected Mp.bovis properties:

The Ministry for Primary Industries (MPI) has announced that all cattle on properties infected with the Mycoplasma bovis (Mp.bovis) cattle disease will be culled and the farmers’ losses compensated.

“The MPI decision that cattle on all infected properties will be culled provides clarity to farmers that have been living with this uncertainty,” said Dave Harrison, General Manager Policy and Advocacy at B+LNZ.

“This has been a very trying few months for affected farmers who have been restricted from trading, borne extra costs, and suffered worry and anxiety about the future. . . 

Details of FMG Young Farmer of the Year Grand Final in Invercargill revealed:

In less than four months Invercargill will be buzzing with FMG Young Farmer of the Year Grand Final fever.

The iconic agricultural competition marks its 50th anniversary this year, a milestone worthy of celebration.

The last of the seven grand finalists will be decided at the Otago/Southland Regional Final in Winton on April 21st.

A sell-out crowd is expected at ILT Stadium Southland for the main quiz and awards night in July. . . 

NZ Ag: B+LNZ  future meat report – great on detail, what’s the solution? – St John Craner:

I was eager to read this report. As eager as I am to read their much anticipated Red Meat Story (which by my best guess will be about the provenance of real meat, and rightly so because it’s their only point of difference). Beef + Lamb New Zealand (B+LNZ) should be applauded for commissioning such a thorough analysis on the challenge and opportunities from alternative protein. Its Future Meat Report is a solid piece of work that will be doing the stakeholder rounds and roadshows up and down the country as we speak. However having read it what are the next actions? And does it go far enough?

Its Executive Summary suggests, in regards to our story, “we just need to tell it better”. It’s too simplistic to say this. To be fair and credit the agency Antedote, they recognise this too as they go deeper explaining each of the different strategic scenarios and responses which offers the greatest value to readers.

Being ready for the threat of alternative proteins and their cashed-up Silicon Valley investors will take far more than having a good story.  . . 


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