Rural round-up

August 10, 2015

Fonterra must evolve – Hugh Stringleman:

Fonterra’s structure must keep evolving, as farmers’ own businesses change through time, former founding director Greg Gent believes.

However, nothing in its structure was preventing farmers from getting the maximum available returns from world dairy markets in the downturn.

As big as it is, Fonterra could not control the milk price.

Fonterra remains silent on dividend impact – Eye to the Long Run:

The staggering hit to milk payouts – around 27% – is also a staggering reduction in the input costs to every product for which milk is an input.

The “model” is supposed to generate returns to suppliers of milk solids and returns to investors (and the two are one in the same for the majority) on sales of processed product. The reduction in input cost must by now be cumulatively very significant. . .

Fonterra overshoot on 2015 advance payment worsens 2016 farmer cash flows – Paul McBeth:

 (BusinessDesk) – Milk prices have dropped so dramatically that Fonterra Cooperative Group effectively overpaid farmers under an advance payments scheme last year, sapping funds available to pay out farmers at the end of the season and leaving them short of cash even before last week’s deep cut to the 2016 forecast payout.

“Last year, Fonterra came out with a higher advance rate schedule during the year, effectively almost overpaying for milk as they went,” Dairy Holdings chief executive Colin Glass told BusinessDesk. “That meant there was nothing left at the end of the year to come through. That’s effectively been the major impact on farm cash flows today.

“Those deferred payments for the previous year haven’t been there and that’s coinciding with what is now the lower advance rate schedule.” . .

 

Hard work and sacrifice reap stellar success – Kate Taylor:

A determination to buy their own farms has seen a set of siblings grow their businesses from 7000 stock units to about 37,000 in 14 years.

One of the partners, Bart and Nukuhia (Nuku) Hadfield, went on to win the 2015 Ahuwhenua Trophy – the BNZ Maori Excellence in Farming Award (sheep and beef).

In 2001 they had pooled resources with Nuku’s siblings – Eugene, Ronald and Marama – and their partners to lease Mangaroa Station in the Ruakituri Valley and neighbouring Ruakaka Station in Tiniroto. . .

El Niño explained as simply as possible – Weather Watch:

It’s been talked about for almost two years in the global scientific community and now it’s finally showing up on weather stations here in New Zealand – El Nino, the weather/climate event that often causes great concern in the rural sector.

But should be we concerned ?  Short answer – yes, somewhat – long answer, yes, but let’s not get carried away, NZ can buck the international trends and we are still not 100% sure how this will all pan out over summer. 

So saying things like “This El Nino will be worse than the drought creating one of the 1990s” is a bit like saying a newly developing tropical low is going to hurt NZ more than Bola did.  But until it fully forms and until we really get a good feeling as to how it’s going to impact New Zealand, then we need to take a deep breath and not talk about extreme worst case scenarios as if they are locked in with certainty…because we simply don’t know this early.  . .

Blair draws a line on farm trespass – Robyn Ainsworth:

TRESPASSERS will definitely be prosecuted under strict new penalties to be introduced to state parliament under the proposed Biosecurity Bill, industry stakeholders heard this week.

The penalties are one plank of the government’s NSW Farm Incursions Policy being rolled out, which NSW Primary Industries Minister Niall Blair (pictured) hopes will be extended nationwide to protect farmers and crack down on the illegal practices of animal welfare activists and others who trespass on farms. . .

 MyFarm share trading shifts to Syndex – Syndex launches offering investors the opportunity to trade farm and orchard shares:

Syndex, the online investment trading platform, has launched today offering investors the opportunity to buy and sell shares in farms and orchards.

Farm investment company, MyFarm, is the inaugural partner for Syndex’s Agri Syndicate Market.

Syndex will allow people to buy and sell shares in MyFarm’s dairy and kiwifruit investment opportunities. It opened today with shares available for purchase in a new Bay of Plenty kiwifruit syndicate and an established Canterbury dairy farm. . .

Will a red hot beef market cool anytime soon? –  Texas Farm Bureau:

The cattle market the last two years is like August weather in Texas. Red hot!

More than 1,680 beef cattle producers gathered at Texas A&M to hear the latest about the cattle market and future trends at the 61st Texas A&M Beef Cattle Short Course, held this week in College Station.

“I think there is a lot to look forward to down the road,” said Dr. Jason Cleere, conference coordinator and Texas A&M AgriLife beef cattle specialist. . .


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