Rural round-up

05/02/2021

Dairy prices and Fonterra’s re-establishment as a global leader should be celebrated far beyond the cowsheds – Point of Order:

The New Zealand economy, although battered  by the  Covid-19 pandemic, has  moved   into 2021  in  better  shape  than  anyone  might have predicted  just six months ago.

To  a degree  this has been due  to  the  continuing vibrant performance  in the export  sector  particularly  by the  primary industries. This  week  there  was a  fresh surge  of  confidence   within that sector  because of the signal from the big dairy co-op, Fonterra, in lifting its  milk payout  forecast.

Fonterra  now expects to pay farmers between $6.90-$7.50kg/MS. That is up 20c a kg from its previous forecast range of $6.70 -$7.30. . . 

Dairy markets have hit a sweet spot but big challenges remain – Keith Woodford:

Global dairy markets continue to grow despite negative sentiment in some quarters. The Climate Change Commission expects less cows to be balanced by more milk per cow. Man-made ‘udder factories’ are yet to emerge.

The combined effect of the three latest global dairy auctions has been that US-dollar prices for dairy have risen eleven percent since Christmas. A farmgate payment above $NZ7 for each kg of milksolids (MS) of fat plus protein for the dairy year ending in May 2021 now looks close to ‘baked in’.

This means that for a second year, farmgate prices will exceed $7. This will be the first time that prices have stayed above $7 per kgMS for two consecutive years.

It will also mean that five years have passed since the two bad years of 2015 and 2016. The bad years were largely driven by EU internal quota removals and a consequent surge in EU production. . . 

Feds survey shows farmer confidence has bounced back:

Farmer confidence has bounced back to where it was pre-Covid19 but attracting and retaining staff remains a headache, the latest Federated Farmers Farm Confidence Survey shows.

Of the nearly 1,100 farmers who completed the Research First survey in the second week of January, a net 5.5% considered current economic conditions to be good. That’s a 34-point jump from the July 2020 survey when a net 28.6% considered them bad, marking the lowest level of farmer confidence in the 12 years the six-monthly survey had been conducted.

“Looking ahead, a net 43.8% expect general economic conditions to worsen over the next 12 months. That sound a bit grim, but just six months ago 58.7% of survey respondents expected a deteriorating economy,” Federated Farmers President and commerce spokesperson Andrew Hoggard said.

“I think farmers, like other New Zealanders, are feeling buoyed by the way we’ve handled the pandemic despite the torpedo to international tourism. The agricultural sector is willing and able to maintain production so long as regulatory and other stumbling blocks don’t trip us up.” . . 

Positive attitude asset during lockdown:

A new study* has found a strong ‘can do’ attitude and cooperative spirit in the agricultural industries were significant factors in minimising losses and uncertainties during the COVID restrictions last year in New Zealand and Australia.

Co-authored by Lincoln University’s Dr Lei Cong, with contributors from a number of institutions including AgResearch, The University of Queensland, NZ Institute of Economic Research, and Plant and Food Research, it measures the immediate impacts of COVID-19 control measures to June 2020 on the agri-food systems of Australia and New Zealand and how resilient those systems were.

It found the effects on both countries were broadly similar, and there were relatively minor economic impacts across the surveyed industries.

It stated the high level of ingenuity in the rural communities, both in Australia and New Zealand, was likely a key element of their resilience and capacity to overcome movement restrictions and the disruption of value chains. . . 

Kiwi conservationists count wins in war on wallabies – Nita Blake-Persen:

Pest control experts say they are finally starting to make a dent in New Zealand’s exploding wallaby population, as a battle to stop them destroying native forests rages on.

Checkpoint cameraman Nick Monro and reporter Nita Blake-Persen headed out on a hunt to see how it’s all going.

The government last year allocated $27 million towards culling wallabies as part of its Job for Nature programme.

Among those to receive funding is Dr Tim Day, a pest control expert working in the Bay of Plenty.

Wallaby numbers have been growing in the area in recent times, and Day described them as a “little known villain”. . . 

Scientists have taught spinach to send emails and it could warn us about climate change – Marthe de Ferrer:

It may sound like something out of a futuristic science fiction film, but scientists have managed to engineer spinach plants which are capable of sending emails.

Through nanotechnology, engineers at MIT in the US have transformed spinach into sensors capable of detecting explosive materials. These plants are then able to wirelessly relay this information back to the scientists.

When the spinach roots detect the presence of nitroaromatics in groundwater, a compound often found in explosives like landmines, the carbon nanotubes within the plant leaves emit a signal. This signal is then read by an infrared camera, sending an email alert to the scientists. . . 

 


Farmers gloomier with good reason

13/08/2019

Federated Farmers’ latest Farm Confidence Survey shows why farmers are gloomier:

Climate change policy and the ETS has topped the list of farmers’ biggest concerns for the first time since 2010, according to Federated Farmers’ latest Farm Confidence Survey.

Nearly a quarter of the 1,432 farmers who responded to the July survey said it was their No 1 worry. The second greatest concern was regulation and compliance costs (19%), followed by debt, interest and banks (10%).

“That result is hardly surprising, given analysis coming through that significant numbers of dairy and sheep and beef farms will be uneconomic if the government continues to pursue methane reduction targets that are far more stringent than are necessary to ensure there is no additional global warming,” Federated Farmers economics spokesperson Andrew Hoggard says.

“That’s coupled with concern that the targets, and government incentives for forestry, is driving blanket planting of pines on productive farmland, with huge long-term detriment to rural communities.”

Pertinent to the concerns about production losses to meet climate change targets, and costs if agriculture is put in the ETS, is that only 55% of farmers said their businesses were currently making a profit (similar to the January survey, 56%). The proportion of farms making a loss increased slightly by 2 points to 11.3%. And looking ahead, slightly more farmers expect their profitability to worsen than improve.

The July survey, conducted by Research First, found that the proportion of farmers who consider current general economic conditions to be good (24.9%) has decreased slightly over the last six months. The proportion who consider conditions to be bad remains lower, but not by much (21.3%).

Looking forward, the survey found the lowest level of confidence in the economy since July 2009, in the wake of the Global Financial Crisis.

“On that front, we’re no different to the gloom being expressed by the wider business community,” Hoggard says. “For us there is particular concern about the global uncertainty and instability arising from fallout from Brexit and US-China tensions and how that will impact on our key markets and export returns.”

All regions expect farm production to increase over the coming 12 months but they are mostly less optimistic than six months ago, with large falls in expectations for Auckland-Northland and Taranaki-Manawatu. Slightly more farmers expect to increase their spending rather than reduce it over the coming 12 months but this is also down on January’s survey.

And farmers continue to find it hard, if not harder than ever, to find skilled and motivated staff.

Climate change policy in the Zero Carbon Bill is based on emotion and politics rather than science; ignores the Paris Accord’s stipulation that mitigation shouldn’t come at the expense of food production; and will come at a high economic, social and environmental cost.

Regulation and compliance costs are rising.

Interest rates are low but banks are putting a lot of pressure on farmers to reduce debt.

Dairy and arable farms, orchards and market gardens have been struggling for good staff for years, sheep and beef farms are also having problems now.

Add to that the concerns shared by the wider business community and farmers have good reason to be gloomier.

The full survey report is here.


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