Rural round-up

15/02/2019

Promising results from denitrification wall :

A world-first denitrification wall at Silverstream, North Canterbury designed to reduce high groundwater nitrate levels is working as anticipated.

The trial is led by the Institute of Environmental and Scientific Research (ESR).

So far the nitrate levels in groundwater have been reduced from 7.1mg/L to 0.5 mg/L by the wall at Silverstream Reserve. . . 

Thanks John, for the milk price – Sudesh Kissun:

Dairy farmers have former Fonterra chairman John Wilson to thank for the milk price they enjoy today, says Sir Henry van der Heyden.

In a eulogy at Wilson’s funeral in Hamilton early this month, van der Heyden told of Wilson’s relentless push for a fair and transparent milk price.

“His relentless questioning and his ability to process and retain vast amounts of information means we have a tremendous legacy from him in the milk price,” he said. . . 

Feds backs wool levy if there is a sound plan of action :

The Federated Farmers Meat & Wool Council has today voted to support a compulsory wool levy on producers – but only if the cross-industry Wool Working Group comes up with a clear, practicable and compelling blueprint for lifting wool’s profile and returns.

Delegates from the 24 Federated Farmers provinces meeting in Wellington agreed that unless a collaborative plan for wool research, development and marketing is formulated – and then widely backed – the death-knell for the crossbred wool industry in New Zealand would be sounded. . .

Are deer the new moa: Ecosystem re-wilding or a flight of fancy? – Nic Rawlence:

It’s the depths of winter and I’m squatting in the snow, surrounded by southern beech forest, using a pair of tweezers to pick up fresh steaming deer poo.

My wife Maria, and palaeoecologist Jamie Wood, from Landcare Research, are doubled over in laughter, having just given me the official job title of pooper scooper.

We’re helping Jamie collect deer poo as part of a project investigating whether introduced deer fill the same job vacancy as the extinct moa in what remains of our unique ecosystems – an ecological surrogate to re-wild New Zealand. . . 

You call that meat? Not so fast cattle ranchers say – Nathaniel Popper:

The cattle ranchers and farm bureaus of America are not going to give up their hold on the word meat without a fight.

In recent weeks, beef and farming industry groups have persuaded legislators in more than a dozen states to introduce laws that would make it illegal to use the word meat to describe burgers and sausages that are created from plant-based ingredients or are grown in labs. Just this week, new meat-labeling bills were introduced in Arizona and Arkansas.

These meat alternatives may look and taste and even bleed like meat, but cattle ranchers want to make sure that the new competition can’t use the meat label. . . 

Calling all young nurserymen and women :

We are delighted to announce the 2019 Young Achiever Award run by New Zealand Plant Producers is now open to receive entries.

The competition seeks to reward and recognise the best young nursery people in the country. The costs of running the competition and the prizes are generously supported by the HortiCentre Charitable Trust.

NZPPI chief executive Matthew Dolan says, “This is a fantastic opportunity for young people with careers in the primary sector to take the next steps in their careers and to compete with other nurserymen and women.” . .


Business not Minister’s business

14/06/2018

NZ First MP Shane Jones has stomped with his clod hoppers where he has no business to be again:

Regional Development Minister Shane Jones has climbed into the leadership of dairy giant Fonterra, calling for chairman John Wilson to follow chief executive Theo Spierings out the door.

Jones said he told the company it should stop being political and instead focus on its business.

Says the Minister who uses personal attacks instead of polite discourse and ought to be focusing on politics not meddling in business.

They should focus less on interfering in politics and more on justifying the money they’ve lost overseas. I believe that they have become disconnected from the farming community.”

Jones said he had suggested to Agriculture Minister Damien O’Connor whether it was time to restructure the dairy co-op, and singled out Wilson for special mention.

Doesn’t he know that the Dairy Industry Restructuring Act (DIRA), under which Fonterra was created, is under review already?

The leadership of Fonterra, I believe, starting with the chairman, is full of its own importance and has become disconnected.”

He said there was an absolute absence of accountability for the “enormous amounts of dough” that the current chairman had presided over.

This sounds very like a minister full of his own importance presiding over a billion dollar slush fund with little accountability.

The CEO has gone, well that’s only one party of the double-Dutch we’ve had to put up with in Fonterra over the last nine years. I thoroughly believe this … that as the CEO leaves Fonterra, the chairman should in quick order catch the next cab out of town.

Double-Dutch? Is this a xenophobic reference to the retiring CEO Theo Spierings and past chair Sir Henry van der Heyden who stepped down nearly a decade ago?

“I’ve been bloody disappointed that Fonterra, in my view, the leadership has not accepted that there’s a new Government and there is a new narrative and I’ve had a gutsful of them believing they are bigger then what they really are.” . .

Believing they’re bigger than they are? That’s rich coming from the party with far more power – and voter money – than its voter support at the election entitle it to.

This sort of tirade does nothing to reassure  businesses which are already very wary of the policies and directions of the government.:

The time has come for the Prime Minister to step in and discipline her Regional Economic Development Minister who repeatedly seeks publicity by attacking business leaders, National’s Regional Economic Development spokesperson Paul Goldsmith said today.

“Business confidence in New Zealand is plummeting and the reasons for that are mounting.

“The Government’s low growth policies like higher taxes and stronger unions are causing businesses to hire fewer people and invest less in growth and it has them concerned about the future of New Zealand and who can blame them?

“Because on top of that you have a loudmouth Regional Economic Development Minister who’s putting his own ego and need for publicity ahead of the interests of New Zealand.

“Shane Jones’ attacks on Fonterra’s leadership are the latest burp from a man who is fast losing any respect he once had.

“He says Fonterra’s leadership is ‘full of their own importance’.  That sounds like a more apt description of himself.

“He even added he’s ‘worried about the absolute absence of accountability for the enormous amounts of dough that the current Fonterrra chairman has presided over’.

“This is startling hypocrisy from the same man who defended his own region getting the lion’s share of funding from his billion-dollar Provincial Growth Fund by stating ‘to the winner goes the booty’.

“Well it’s not his booty and it’s clear Shane Jones has no idea what accountability means.

“This Government has decided to spend $3 billion over the next three years on regional economic development, including roundabouts and church restorations. It’s critical the responsible is up to the job and focused on doing his job well.

“At the moment, all he seems good for is attacking business leaders whenever a few days have gone by without some of the media coverage for which he craves.

A friend who was at the KPMG breakfast at which Jones launched his tirade said it was entirely inappropriate, and a very poor reflection on the MP and the government.

Fonterra is a co-operative. The performance of the company and its chair are the business of its shareholders not an MP.

There is some dissatisfaction and there are concerns but this season’s  milk price is the third highest since the company was formed.

Shareholders could well be more concerned about the MP who has no business interfering in their business than the chair’s performance.

So Jones’s loose lips could well strengthen the position of Wilson who is up for re-election this year.


Rural round-up

19/12/2017

The water is on, now for the hard bit – Hamish MacLean:

The $57million North Otago Irrigation Company expansion is complete — much to the relief of shareholders, with weather forecasters predicting a warm, dry summer. But irrigation is not so easy for farmers as simply turning on the water and watching the grass grow, Hamish MacLean finds out.

It could be a couple of years before North Otago’s newest irrigators get to grips with their new resource, but with a big dry spell predicted this summer, farmers are pleased to have a guaranteed water supply.

While the water on the North Otago Irrigation Company’s expansion began flowing in September, it was the end of November when all 85 off-takes of the expansion were commissioned, reaching the end of the line at All Day Bay. . . 

Rabobank New Zealand announces new CEO:

Rabobank New Zealand has announced it proposes to appoint Todd Charteris to the position of chief executive officer, subject to regulatory approval.

Rabobank New Zealand chairman Sir Henry van der Heyden said Mr Charteris “will bring significant experience with Rabobank on both sides of the Tasman to the role of CEO, as well as a deep knowledge of agribusiness and extensive relationships across the global Rabobank network”. . . 

Jonni keeps quality core at Stirling cheese – Sally Rae:

You could call Jonni de Malmanche a jack-of-all-trades, or more accurately, a Jane of them.

The South Otago woman is one of the long-serving staff members at Fonterra’s Stirling cheese factory, having worked there for the past 23 years.

“I still enjoy coming to work every day. I love the people, I love basically what Stirling stands for which is we make great cheese,” she said.

The factory, which opened in 1983, was built by the Otago Cheese Company, formed after the merger of three small South Otago dairy companies. In 2010, Fonterra spent $7.75 million upgrading the factory. . . 

 

Westland Milk Products soon to announce new products – Alexa Cook:

New Zealand’s second largest milk company is planning to step away from selling dairy products alone and expand into alternative protein and blended products.

Westland Milk Products has bounced back from a $14.5m loss in 2015/16 to break even this year.

Chief executive Toni Brendish says the co-operative worked hard over the past year to become more efficient.

The company’s purpose was now “nourishment made beautifully for generations” which she said gave it freedom to go beyond traditional dairy products. . . 

Dry summer weather prompts farmers to offload stock, AgriHQ – Tina Morrison:

(BusinessDesk) – Dry summer weather is denting grass growth, prompting farmers to reduce their livestock numbers, with the increased volumes of animals hitting the market starting to weigh on prices, according to AgriHQ’s Monthly Sheep & Beef report for December.

“The common factor pulling values down throughout NZ is the weather,” AgriHQ analyst Reece Brick said in his report. “It was a rapid transition from a particularly wet early spring into one of the driest late spring/early summers in recent years, catching many farmers off guard.”

For the sheep industry, below-average growth rates through November kept a lid on the number of lambs being sent to slaughter, keeping prices higher than anticipated. However numbers were now coming forward in significant volume and the long awaited fall in prices has finally begun, Brick said, noting that meat companies had dropped lamb slaughter prices by 15-20 cents per kilogram over the past fortnight, bringing the price to $7.10/kg. . .

Capital gains tax may be on the horizon with the new government:

With the new government reversing National’s tax cuts in April 2018, the government has now announced the items that are on the tax agenda, and have also signalled other potential changes. Tony Marshall, tax advisory partner for Crowe Horwath, predicts how the government’s new tax agenda may affect farmers.

As promised, the government is forming a Tax Working Group and has stated one of the focuses of the group will be looking into capital gains associated with property speculation. Capital gains tax has always been a contentious topic and sends nervous tension through the farming community. . . 

Monthly Dairy production report November 2017:

Key Statistics:

• NZ milk production for November 2017 was up 4.2% (+3.4% on a milksolids basis)
• NZ milk production for the season-to-date was up 1.8% (+1.8% on a milksolids basis)
• NZ milk production for the 12-months through November 2017 was up 1.3% (+1.9% on a milksolids basis)

Full report here.


Rural round-up

07/10/2016

NZ meat industry pioneer honoured:

New Zealand meat industry pioneer Sir Graeme Harrison has won this year’s Rabobank Leadership Award in recognition of his extraordinary contribution to the food, beverage and agribusiness sectors.

Harrison, the founder and chairman of one of NZ’s largest exporters, Anzco Foods, was presented with the trans-Tasman award at the annual Rabobank Leadership Dinner in Sydney, Australia, last night.

It is the second year in a row a New Zealander has taken the honour with former Fonterra chair Sir Henry van der Heyden the recipient of the award last year.

Presenting the award, Rabobank Australia & New Zealand Group managing director Peter Knoblanche said Sir Graeme was a “true champion of agribusiness” who had made an enormous contribution not only as a NZ business leader, but also in the international meat industry trade”. . .

Farmers say river plan will kill businesses – Glenys Christian:

Many of the more than 150 farmers who gathered in Pukekohe last Monday believe the Waikato Regional Council’s Healthy Rivers Wai Ora plan will drive them out of business or severely limit what they can do on their properties.  

And Waikato University Professor of Agribusiness Jacqueline Rowarth told them if the plan came into force there would be a dearth of young people returning to the land.  

New Zealand enjoyed some of the best quality wild water in the world, backed up by a huge amount of environmental protection.  

She questioned comparisons made and said a lot of the research work used by the Healthy Rivers Wai Ora collaborative stakeholder group (CSG) was based on modelling without giving enough attention to the constraints and uncertainties involved, especially went it came to Overseer programme predictions. . . 

Farmers praise Northland plan – Hugh Stringleman:

Northland’s draft regional plan is pragmatic and headed in the right direction, Federated Farmers says.  

Federated Farmers Northland province found the overall thrust of Northland Regional Council policy-making was appropriate for dairy, sheep and beef cattle farmers.  

In particular, it responded to livestock exclusion rules, setback distance from waterways, farm wastewater storage, wetlands and catchment plans for improving water quality.  

It said Northland’s freshwater resources were in a reasonable state and over-allocation and nitrate loadings were not issues. . . 

A damn load of emotional effluent – Tim Gilbertson:

The Ruataniwha water storage scheme saga has gone far beyond soap opera territory: fantasy has long since replaced fact, the noisy quashing any sense.

Here are some examples. Serial anti-RWSS crusader Grenville Christie claims riparian planting stops only phosphate from entering the waterways (CHB Mail Sept 20). Incorrect. It stops virtually everything except nitrogen.

Filtering improves water quality, in some cases by up to 80% within a few months. Nitrogen enters the rivers via groundwater, so riparian planting is ineffective. But nitrogen will be severely limited by Plan Change 6, so Grenville can rest easy. . . 

Time to wake up and get safe! – Mark Daniel:

While quad fatalities keep fuelling a media frenzy, it’s time to look at the broader picture and try to understand what makes our farms such dangerous places.

Dangerous they are: statistics between 2013 and December 2015 show farmers suffered 63 deaths*; the next-highest sectors, transport and warehousing, had 17 and forestry 14 respectively during the same period.  

So the death rate on farms is around four times higher; why is that? If you’ve visited a quarry, warehouse or forest lately, you’ll know that before you get to the action you’ll be hit with rules, hazard identification, hi-vis vests, hard hats and steel-toe boots. Easy to do, you say, on a compact ring fenced site, but much harder to do in the backblocks of New Zealand. . . 

New challenge in milking goats –  Sudesh Kissun:

South Auckland farmer Hamish Noakes had no crystal ball four years ago when he pulled out of cow dairying and started milking goats.

The 40ha family-run farm at Karaka was “just too small and milking 160 cows just wasn’t working”.  

“I was always chasing my tail; I had a lot of leased blocks so I was always running around between leased blocks and running this farm,” Hamish told Rural News. . . 

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Rural round-up

07/06/2016

Primary sector leader ‘humbled’ by award – Gerard Hutching:

Agricultural leader Chris Kelly said he was “humbled” by the Officer of the New Zealand Order of Merit (ONZM) bestowed on him in the Queen’s Birthday honours.

Kelly, who has been involved in the farming sector all his career, is best known as chief executive of Landcorp. During his 12-year stewardship of the SOE between 2001-13, Landcorp’s value mushroomed from $500 million to $1.6 billion.

“I’m proud to be part of a wonderful industry. The primary sector is not only very important for New Zealand but it’s also a great place to work.

“The most memorable component would have been my sojourn at Landcorp. I feel humbled to have been singled out because there are lots of other people who could have been,” Kelly said. . . 

Harnessing youthful energy at Mangahao – Kate Taylor:

The infamous Mangahao fog doesn’t dampen the farming enthusiasm of the Tararua Farmers of the Year. Kate Taylor paid a visit

Toddler Jack reaches for another piece of his toast as mum Ally puts a cake in the oven and dad Pete Apthorp has a well-earned coffee after sending away lambs in the early morning fog.

“The fog is at least easier to deal with than the dark last week before daylight saving ended. The people who like it lighter in the evenings have obviously never had to get stock away early for same-day kill,” says Pete with a chuckle.

Pete and Ally Apthorp, who are still in their 20s, farm on Mangahao-Pahiatua Rd, otherwise known as the Pahiatua Track to Palmerston North. They have been named the 2016 Rural Aerial Co-op Tararua Farmer of the Year and will host a field day on April 27.  . . 

NZ tech firm raises funds, wins award:

A local agri-technology company is on a high after raising $4.5 million for product development and research and being named the best AG-Tech start up in a Silicon Valley technology competition.

Engender Technologies has worked with two Centres of Research Excellence – the MacDiarmid Institute and the Dodds-Walls Centre – to develop technology to allow dairy farmers to manage the sex make-up of their herds.

It opens the way to a leading position in what’s estimated to be a $3.5 billion market. . . 

Nominations sought for 2016 trans-Tasman agribusiness leadership awards:

Nominations have opened for the 2016 Rabobank Leadership Awards, recognising the contribution of senior and emerging leaders in the success of New Zealand and Australia’s food and agribusiness industries.

The peer-nominated trans-Tasman awards – now in their eleventh year – include the flagship Rabobank Leadership Award, which was last year won by New Zealand business leader Sir Henry van der Heyden, the former chair of global dairy giant Fonterra.

The award is presented annually to an individual in a senior leadership role in the food, beverage and agribusiness sector who has created sustainable growth and prosperity at both corporate and industry level, while also demonstrating a wider commitment to society. . . 

Invasive ants eradicated from Tiritiri Matangi:

An ant considered one of the most destructive invasive species in the world has been successfully eradicated from Tiritiri Matangi Island in the Hauraki Gulf, Conservation Minister Maggie Barry says.

“Tiritiri Matangi is one of the few places in the world where Argentine ants have been successfully eradicated, the culmination of 16 years of hard work by DOC staff and volunteers,” Ms Barry says.

“They may be small, but these ants are one of the most damaging of all invasive pest species. The World Conservation Union lists them as one of the 100 worst eco-invaders on Earth.” . . 

Fungi workshop first of its kind:

Some of the world’s leading experts in fungal biology and the study of pest and weed invasions met recently at a workshop organised by researchers from the Bio-Protection Research Centre.

The aim of the  workshop, the first of its kind in New Zealand, was to stimulate discussion between scientists from different disciplines and develop a publication to guide future research in this area.

Sponsored by the New Phytologist Trust the event attracted more than 70 scientists for a day of public talks and a four day writing workshop for key participants.

“This was an incredible opportunity to bring together plant invasion ecologists, fungal ecologists and plant pathologists,” says Professor of Invasion Ecology Ian Dickie. . . 

Dairy: In a tough year, farmers can optimise tax through preferential livestock valuation:

With this years continued convergence of values between the Herd Scheme Value and National Standard Cost for dairy cattle, professional services firm Crowe Horwath says farmers are presented with an opportunity to review their livestock valuation methods and optimise their operations for tax efficiency.

That’s according to Tony Marshall, agri tax specialist who points out that the IRD’s 2016 Herd Scheme (HS) values have drawn to their closest with the National Standard Cost (NSC) in some time. “Valuation choice is important due to the tax treatment of livestock under each scheme,” he notes. “Once livestock are valued under HS, movements in value are non-taxable, whereas movements in value under the NSC method are always taxable, either as income or a deduction.” . . .

LIC bulls deliver top results for farmers:

LIC is celebrating the co-operative’s top bulls with the release of the industry’s latest Ranking of Active Sires (RAS) list – which ranks the top breeding bulls in New Zealand.

”These are our farmers’ bulls, developed by LIC on behalf of farmers for farmers,” LIC’s General Manager Biological Systems Geoff Corbett said.

The co-operative is pleased to see that 26 of the top 30 bulls of all breeds in the country are LIC’s. In other great results, the top 12 bulls across all breeds are LIC’s. . . 

CropLogic Secures New Licence for Global Growth:

Precision agriculture firm CropLogic has signed an exclusive agreement with the New Zealand Institute of Plant & Food Research to expand the marketing of its patented technology to corn, wheat, soybean and cotton farmers in the United States.

The technology — developed over 30 years out of Plant & Food Research, a New Zealand Crown Research Institute, and guided and shaped for international markets by IP investor Powerhouse Ventures — enables growers using the firm’s predictive modelling systems to pinpoint the best times to apply nutrients and to conserve precious water for maximum plant yields. . . 


Rural round-up

13/11/2013

New Zealand’s Primary sector must not tolerate its weakest links

•        Industry must be prepared to remove those not prepared to meet baseline standards
•        Regulation needs to be balanced to avoid overburdening a strategic sector of the New Zealand economy

The global reputation of New Zealand’s primary sector lives or dies on every participant in the industry doing the right thing each and every day.  In a connected world it only takes one person to fail in fulfilling their duty to the environment, their animals or the community for significant pressure to come to bear on the whole sector’s license to operate.

The message that the industry can no longer tolerate weak links is a central theme in the latest volume of the KPMG Agribusiness Agenda 2013 which is released today. The fourth volume of the Agenda, titled “Balancing the needs of the environment, communities and businesses” discusses the issues associated with building a world class, sustainable primary sector in New Zealand. . .

Rollover protection on quads a lifesaver – researcher:

Associate Professor Charley Lamb, of Lincoln University’s Telford Division, has backed Whangarei coroner Brandt Shortland’s recommendation for more research to be done in New Zealand into the protection devices.

Mr Shortland’s recommendation follows the release this week of his findings into five quad-bike related deaths in which he says the vehicles are a farmer’s best friend, and also their worst enemy.

His recommendations include the compulsory wearing of helmets, more research on roll-bars and more training for riders.

On average, five people each year are killed in quad-bike accidents on farms and a further 850 are injured. . . .

Shock tactics and scars suggested for quad bike safety ads – Abby Brown:

Tweeting farmers say there needs to be an educational advertising campaign that uses shock tactics and even scars to warn of the hazards of using alcohol or drugs before using a quad bike.

Some farmers also said there needs to be more research on roll-over protection, speed limits need to be considered and most supported the call for the use of helmets.

Colin Grainger-Allen (@NZcows) tweeted that authorities like ACC need to use shock tactics to run educational advertising campaigns about the hazards of using quad bikes after drinking or drug use like they do with the anti-drink driving campaign. . .

Van der Heyden shares ideas with MIE – Alan Williams:

Former Fonterra chairman Sir Henry van der Heyden is playing down his role with red-meat lobby group Meat Industry Excellence (MIE).

“I’m sharing my ideas and experience from what I’ve learned in my time in the dairy industry with a large number of farmers and MIE is part of that,” van der Heyden said.

“Over the past two or three years many folk in the red-meat sectors have contacted me.”

It is understood van der Heyden has spoken at “invitation-only” MIE meetings with farmers over the past few months, ahead of director elections at the two biggest meat industry co-operatives, Silver Fern Farms and Alliance Group, at their annual meetings in December. . .

Leadership Reaffirmed for Grape and Wine Industry

New Zealand Winegrowers, the national organisation for the country’s 1,500 grape growers and winemakers, has announced the re-election of Steve Green as Chair and John Clarke as Deputy Chair for a second year.

Mr Green is proprietor of Carrick, a boutique Central Otago winery; he has been involved in the Central Otago grape and wine industry since 1994, has previously served as Chair of Central Otago Winegrowers and has been on the New Zealand Winegrowers Board since 2005.

Mr Clarke is a Gisborne grapegrower with over 30 years’ experience in the grape and wine industry. Mr Clarke, who is a former Gisborne Mayor, has previously served for ten years as the Chair of Gisborne Winegrowers and joined the New Zealand Winegrowers Board in 2006. . .

Wine & Tourism – a Winning Combination:

 2013 is turning out to be an outstanding year for Hawke’s Bay winery Sileni Estates. Off the back of recent local and international award success for their wines, Sileni Estates have recently been awarded the coveted Hawke’s Bay Cellar Door of the Year at the Hawke’s Bay A&P Wine Awards.

Cellar Door of the Year recipients in 2010 and 2012, Sileni Estates are surprised and delighted to receive the award again in 2013. Owner and CEO Graeme Avery comments, “We are thrilled that the Sileni Cellar Store has been awarded Cellar Door of the Year in three of the past four years. It is a credit to our dedicated and hardworking Cellar Store Team – Anne Boustead, Emily Lay and Simone Hartley; and to Sileni’s long term commitment to promote Hawke’s Bay and its wines.” . . .

Quality of wine shines through at Air New Zealand Wine Awards:

New Zealand wineries have again impressed judges at this year’s Air New Zealand Wine Awards with wines of outstanding quality making up the 111 gold medal winners.

Pinot Noir was the strongest performer, winning 22 gold medals, while 20 gold medals were awarded for Sauvignon Blanc and 17 for Chardonnay.

The aromatics classes, consisting of Gewürztraminer, Pinot Gris, Riesling, Viognier and Albariño, also shone in this year’s competition, bagging a total of 25 gold medals. The judges were impressed by the sparkling class, which was awarded 19 medals, including six gold.

Chair of Judges, Michael Brajkovich MW, said New Zealand winemakers are producing world-class wines across an exciting and diverse range of varieties. . .


2013 Agri person – van der Heyden

05/07/2013

Former Fonterra chair Sir Henry van der Heyden is the 2013 Agri Personality.

The 2013 Allflex Agri Business Person is Kingi Smiler, Chairman of the Wairarapa Moana Incorporation.

The announcement was made the  Vodafone/Federated Farmers Cream of the Crop Awards, last night.

Feds chair Bruce Wills said:

“The first of Federated Farmers awards to be announced was our own Agri Personality of the Year. This is to recognise the one outstanding personality who, over 2012/13, has influenced New Zealand farming.

“When the Board met to decide the award, Sir Henry van der Heyden was easily the one person who truly stood out over the past 12-months. While he has left Fonterra his influence and mana has not diminished.

“The final award of the evening was the key Allflex Agri Business Person of the Year.

“For this award we assembled an independent panel to review the shortlist. That shortlist was made up of Landcorp’s Chris Kelly, Wairarapa Moana Incorporation/Miraka Chairman Kingi Smiler and Dr John Baker ONZM, of Baker No-Tillage.

“It was a tough decision but Kingi Smiler’s gifted business leadership of Wairarapa Moana Incorporation, a founding shareholder in Māori Dairy Company Miraka Limited, saw him emerge as first among equals.

“Kingi is simply put an outstanding business person, being a former partner in Ernst & Young and holding directorship across the agribusiness sphere. He is the chairman of Tairawhiti Land Development Trust and is currently a director of Mangatu Incorporation, the Wi Pere Trust and Wellington Rugby Union.

“If that is not enough he has also completed 19 Ironman competitions. . .


Thanks Henry

18/12/2012

Sir Heny van der Heyden stepped down as chair of Fonterra at the company’s AGM yesterday.

In his final address as chair he said that decisions made by farmer shareholders over the last decade have laid a strong and durable foundation for future growth:

 Taking stock of the changes within the industry over the past 10 -15 years, Sir Henry reflected on the important decisions that had strengthened Fonterra’s global position and returns to farmers.

 “It’s been one huge year after another and every one of them has made us stronger.

 “Together we’ve turned a collection of co-ops into the world’s top dairy exporter.

 “Creating Fonterra was a massive leap of faith on two levels.  We put our faith in a single integrated model – and we put our faith in it succeeding in an entirely deregulated market.  I can say without a shadow of a doubt that we pulled it off,” he said.

 “Fonterra came out of the blocks with $11.8 billion in assets.  We have grown that by 28 per cent to $15 billion.  That’s an outstanding performance.

 “We have done what we set out to do – grow farmers’ wealth ¬– and that’s come through in the value of your land, your shares and your earnings on the farm.”

 Sir Henry said global demand for dairy was the strongest it had ever been and was growing.

 “We need to use all of our muscle to push ahead and stay ahead.  But we will do it our way.  History has shown we are not afraid to make the big calls and make big changes without trading what is really important.”

 Chief Executive Theo Spierings  said since Fonterra’s formation in 2001, the Board and farmer shareholders had made the tough decisions required to position the Co-operative for growth.

“Establishing a Fair Value Share, achieving a transparent Milk Price, and introducing a dividend policy were the first three hurdles.  This year, Trading Among Farmers has delivered permanent share capital and a stable capital base.

 “Looking ahead, our business strategy is to grow volumes, grow value, generate more cash and improve our return on capital. To deliver on this, our future priorities are to:

  • Shift more ingredients sales direct to customers and generate prices higher than Global Dairy Trade;
  • Grow consumer and foodservice volumes;
  • Align our costs and spending so we have the money to invest in areas that will generate growth; and
  • Maintain a balance between environmental, economic and social sustainability.

“We have to start thinking differently about cost – and have already started doing this with our focus on reducing costs by $60 million this financial year.”

 Building a durable co-operative for the future meant Fonterra had to align spending, to make sure resources were directed to the right priorities, said Mr Spierings.

Sir Henry said  that when he took the job on, he wanted to make a difference and leave the Co-operative in a better position at the end of his tenure.

He has done that and its not only shareholders who have benefited from that.

Fonterra also makes a very significant contribution to New Zealand’s economy.

Its milk in schools programme is beginning to make a valuable contribution to education and health.

New chair John Wilson and the other incumbent director Nicola Shadbolt were re-elected to the board. The other vacancy was filled by former Shareholders’ Council chair Blue Read.


Fonterra focus still payout

01/12/2012

Yesterday was a big day for Fonterra.

Prime Minister John Key opened the company’s new $200m Darfield site.

Shortly before the opening, Fonterra’s units were launched on the stock exchange making  the biggest listing day stag that investors have seen for years.

The non-voting units, which launched at midday today, surged as high as $6.95, a 26 percent stag before closing at $6.85 from an offer price of $5.50. The fund’s turnover was $179.8 million as investors scrambled to get a slice of dairy exporter Fonterra Cooperative Group’s dividend stream.

Turnover in the NZX50 was lower, but substantial, at $175.2 million.

The most comparable float was the December 2011 listing of TradeMe, which rose 6.9 percent on its first day, and was up about 10 percent on its issue price by the end of its first week’s trading, said Andrew Bascand, at Harbour Asset Management.

The fund attracted more trading than the rest of the NZX50 put together and is likely to have been attractive to foreign investors, who took 42 percent of the initial issue of units after Tuesday’s book-build. . .

The price increase amounts to an extra $300,000 in value for the average Fonterra shareholder.

However, in a newsletter to shareholders, chair Sir Henry van der Heyden says the company’s focus will still be on the payout.

TAF was about removing redemption risk and giving farmers some more flexibility but making money from the milk they produce will be of more importance to shareholders than the price of units on the stock exchange.


Fonterra units $5.50

27/11/2012

An email to shareholders from Fonterra chair Sir Henry van der Heyden says the final price of units in the company’s  Shareholders’ Fund is $5.50.

That is at the op end of the price range in the fund prospectus.

Shares on the Fonterra Shareholders’ Market are expected to tract the price of units in the fund when trading starts on Friday.

The fund will launch at $525 million following strong investor interest.

This means eligible farmers, sharemilkers, and retired farmers will get their requested amounts under Friends of Fonterra

There are more than 9,500 investors in the fund  which meets the company’s  goals for liquidity in the unit market

More than half – 58% – of the units  allocated went to New Zealand retail and institutional investors, and Friends of Fonterra (including Bonlac)

The rest were allocated to offshore institutions

The board will issue around 90 million Shares to the Fonterra Farmer Custodian to support the fund size of $525 million

The impact  on earnings per share is about one cent per share at most.


Rural round-up

17/10/2012

Meanwhile back at the ranch – Fran O’Sullivan:

Is Fonterra’s Sir Henry van der Heyden staying on past his use-by date as the dairy co-operative’s chairman to protect chairman-elect John Wilson from a boardroom coup?

That question was doing the rounds even before Fonterra confirmed on September 27 that van der Heyden would not step down from the board as expected this December when he hands over the chairmanship to John Wilson at the co-op’s AGM.

Van der Heyden will instead stay on for an unspecified period – expected to be much less than the December 2013 period when his term as an elected board member runs out – to ostensibly “provide continuity around the board table” until after Trading among Farmers (Taf) is up and running. . .

Maintaining lifestyle balance – Sally Rae:

Keri Johnston was about halfway through her final year at St Kevin’s College, in Oamaru, when she decided to pursue an engineering degree.

Ms Johnston had always loved science and mathematics but laughingly recalled how she hated the sight of blood, which ruled out anything in the medical profession.

After hearing a talk from a lecturer from the University of Canterbury School of Engineering, she decided engineering was something she might like to do. . .

Rabobank Australia & NZ country banking head appointed CEO of US Rabo AgriFinance:

Rabobank Australia and New Zealand Group country banking division head Neil Dobbin has been appointed to run Rabobank’s United States agri banking business, Rabo Agri Finance (RAF).

Mr Dobbin – a veteran of 25 years with Rabobank in Australia and New Zealand, the past decade as group executive Country Banking Australia & New Zealand – has taken on the role of chief executive officer for RAF.

Announcing the appointment, Rabobank Group executive board member Berry Marttin said during Mr Dobbin’s stewardship of its Country Banking operations in Australia and New Zealand, Rabobank had grown to become the leading food and agribusiness bank in the region. . .

New voice for local farmers

The new president of Federated Farmers in Wairarapa is aiming to make sure local farmers have their voice heard.

Bideford’s Jamie Falloon was voted in on Tuesday night by the executive committee to replace outgoing president Paul McGill, who is taking up a position at Landcorp in Wellington.

Mr Falloon, 43, lives in Bideford with his wife Georgie and three children Joe, 9, John, 6 and Anabelle, 4. . .

Blue sky thinking from green fingered finalists:

Ideas that cut the cost of heating propagation beds to grow plants and turn frost fans into power generators are just two of the six projects being developed by the finalists for the Agmardt Market Innovation project in the 2012 Young Horticulturist of the Year Competition. Other innovation ideas include collapsible crates for freighting small plants, an instant rollout flower mat, and a design that takes weeding to a new level.

Six finalists from around New Zealand who have won their industry sector competitions are preparing for the intensive two day competition on November 14 and 15 in Auckland.

“The standard this year is amazing; I think the judges will have difficulty selecting the winner,” says Nicola Rochester, Chair of the RNZIH Education Trust, which manages the competition. . .


Fonterra’s final payout $6.40

27/09/2012

Fonterra’s final payout for last season is $6.40 for fully shared up farmers.

The result includes a lower Farmgate Milk Price of $6.08 per kilogram of milksolids (kgMS), down from $7.60 last year reflecting lower commodity prices and a strong New Zealand dollar. A dividend of 32 cents per share has been announced, with retentions of 10 cents per share[1].

 
Announcing the result, Chairman Sir Henry van der Heyden said the 2012 year had been one out of the box for dairy: “All around the world, we saw record dairy production which was mirrored back here in New Zealand.
 
“Global dairy demand held up reasonably well but this ocean of milk obviously impacted on global commodity prices, with the GlobalDairyTrade (GDT) index reaching its lowest value in 34 months in May.
 
“This contributed to a lower Farmgate Milk Price in the 2012 year, however, the impact of this decline on overall earnings for farmers has been eased a little by the much higher volumes of milk they produced.” 
 
Fonterra Chief Executive Theo Spierings said the Co-operative had posted a strong operating performance, with normalised earnings[2] of NZ$1.03 billion for the 2012 year, up 2 per cent on the prior year.
 
Profit before tax was up 9 per cent on the prior year and net profit after tax was $624 million, down 19 per cent, largely due to tax credits of $202 million in the prior year not repeated in the current year. Excluding those credits, Fonterra’s net profit after tax improved by 10 per cent. 
 
Results highlights compared to the prior year include: 
  • Record New Zealand milk flows, up 11 per cent to 1,493m kgMS in the current season
  • 11 per cent increase in export volumes to 2.32 million metric tonnes (MT)
  • Sales volumes increased 2 per cent to 3.94 million MT
  • Flat revenues of $19.8 billion
  • Higher operating cash flows of $1.4 billion, up $206 million
  • Balance sheet strengthened with economic gearing ratio[3] improving from 41.8 per cent to 39.1 per cent

There are no surprises there.

The outlook for the current season is volatile which reinforces the benefits of a co-operative which looks after the interests of suppliers.

 

 


John Wilson Fonterra’s chair-elect

26/07/2012

Fonterra board member  John Wilson,is to succeed Sir Henry van der Heyden as the company’s chair.

Mr Wilson is a previous Chairman of the Co-operative’s Shareholders’ Council. John lives on his family dairy farm near Te Awamutu and also manages a dairy farming business in South Canterbury. He is the Chairman of South Auckland Independent Testing Society Ltd and a director of Turner & Growers Ltd.

“Over the past two years the Board has been working through a considered and disciplined process to appoint a Chairman Elect and ensure the succession plan we have is in the best interest of the Co-operative,” says Sir Henry.

“John and I will work together over the next few months to assist with a smooth transition to provide continuity for the Co-operative.”

The announcement has been welcomed by Federated Farmers Dairy Section chair Willie Leferink who said:

. . . John will be in charge of taking the world’s fourth largest dairy company forward in its second decade of life. This includes delivering to shareholders and unit holders, everything promised from Trading Among Farmers (TAF) and the strategy refresh.

“The immediate priority for John, during the transition phase, is to put to bed Fonterra’s constitution in November so we can all move forward. . . “

The passing of the DIRA legislation this week ushers in a new era for Fonterra.

It has grown considerably under Sir Henry’s leadership. Reducing the redemption risk should help the company continue to grow and prosper which will be good for its suppliers and the country.


Farmers vote for TAF

25/06/2012

Fonterra shareholders have voted in favour of the company’s Trading Among Farmers plan.

The resolution for Trading Among Farmers received a 66.45% vote in support at Fonterra’s Special Meeting today, with two out of every three votes in favour.

Fonterra Chairman Sir Henry van der Heyden said the final vote on the share trading scheme attracted a record voter turnout.

“Our farmers have voted in big numbers, representing 85% of the Co-op’s milksolids. It is great to see so many taking part and having their say.

“Now we can move forward with this important evolution in our capital structure,” he said.

“We’ve spent six years talking about capital structure and it has been a rigorous debate and process. Our farmer shareholders have made a great contribution and the final version of Trading Among Farmers is all the richer because of that input.”

Sir Henry said TAF ensures a stable, permanent capital base for the Co-op and secures its future.

“We broke new ground with the formation of Fonterra and now we have the support from our farmer shareholders to refine that model and to break new ground again.

“As in the past, our farmer shareholders will now get behind the Co-op as we move forward. That’s what we all want, a united Fonterra.

“Over recent months we have used some of the best legal minds and co-operative specialists to stress test the concept and proposed trading system as part of the Due Diligence process. This final vote shows the majority agree that TAF is a fundamental pillar for the Co-op and the Board is absolutely unanimous in the belief that this is a lasting solution.”

Sir Henry said the Board listened to farmer shareholders’ concerns on preserving 100% farmer control and ownership and the integrity of the Farmgate Milk Price.

“We asked our farmers to vote on constitutional changes which would tighten limits on the size of the Fonterra Shareholders’ Fund, which is fundamental to 100% farmer control and ownership, and preserve the integrity of the Farmgate Milk Price. This resolution required a 75% vote and received 72.8% support.”

The Board will take this resolution back to the next annual meeting in November and will seek Shareholders’ Council support for this. In the interim, further planning on Trading Among Farmers will proceed within the parameters outlined in Resolution 2. Sir Henry said the Board believed this was in the best interests of the Co-op.

Fonterra Chief Executive Theo Spierings said the vote for TAF means Fonterra can be in charge of its own destiny.

“TAF will stop money washing in and out and give the Co-op a stable, permanent capital base to deliver on its Strategy Refresh.

“There is no co-operative anywhere around the world that is the same as Fonterra. TAF is completely unique as is the solution to eliminating redemption risk.

“We will now be able to implement our strategy and remain a relevant player in the global dairy industry. With overall demand for dairy growing, TAF will ensure that we are well placed to grow volumes and protect our position as the world’s leading dairy exporter.”

Sir Henry said the Board is still working towards a November launch for TAF but this will be dependent on market conditions. The pre-conditions in the Constitution still need to be finally satisfied, including the support of the Shareholders’ Council. The Board is confident that the necessary changes to the Dairy Industry Restructuring Act and the waivers are on track for this to happen. The Board will determine an exact launch date closer to the time.

The result of the vote is as follows:

  • Resolution 1: Trading Among Farmers – 66.45%
  • Resolution 2: Constitutional Changes for Trading Among Farmers – 72.8%
  • Resolution 3: M. Beach Proposal – 20.2%
  • Resolution 4: Upson Downs Limited Proposal – 23.26%

The result is in effect a vote of confidence in the board and management who have spent years designing a scheme to ensure supplier control while minimising redemption risk.


Fonterra seeking clear mandate on TAF

03/06/2012

Voting packs on Trading Among Farmers (TAF) have gone out to Fonterra shareholders and the company has given an assurance it will require more than a simple majority in support of the move:

Fonterra’s Board will be looking for a clear mandate from the Co-operative’s 10,500 dairy farmers when they vote on Trading Among Farmers (TAF) on June 25, says Chairman Sir Henry van der Heyden.

While the TAF resolution at the special shareholder meeting is an ordinary resolution that requires a 50% plus majority to be passed, Sir Henry says the Board won’t be proceeding unless it has a much stronger mandate than that.

“I want a mandate that will unify the Co-operative around this proposed evolution in our capital structure,” he said. “This is the final vote in a long process. Shareholders have given us strong support in the earlier stages and that is what the Board is looking for this time.

“TAF offers a means of sustainably protecting 100% farmer control and ownership into the future and reducing risk to our Co-operative, so we’re looking for a mandate that enables the Board to continue to work towards protecting and strengthening Fonterra,” said Sir Henry.

“We have listened to our farmer shareholders and their key concerns rest on two fundamental points: Preserving 100% control and ownership and the integrity of the Farmgate Milk Price.

“Accordingly, we have proposed a range of resolutions for farmer shareholders to vote on that will tighten limits on the size of the Fonterra Shareholders’ Fund, which is fundamental to 100% farmer control and ownership, and preserve the integrity of the Farmgate Milk Price.

“These resolutions would require Constitutional change and would therefore involve a 75% vote.

“We propose to decrease the threshold on the size of the Fund from 25% to 20% of total shares, and decrease the number of Dry shares on issue from 25% to 15%,” said Sir Henry.

TAF is the company’s response to redemption risk – the very real threat of too many shareholders redeeming shares at high prices.

The other risk is suppliers choosing to leave the company, or being put off joining, as share prices rise when competitors don’t require the up-front expense of share purchases.

He said that robust modelling and much deliberation by the Board had informed the recommendation for a lower 20% threshold which struck the right balance between flexibility to manage seasonal milk fluctuations and controls to manage risk.

“While we intend to operate the Fund at a size of 7%-12% of total Fonterra shares on issue, we do need breathing room to take account of seasonal changes in milk volume,” he said.

“Milk production is driven by weather — for example this year we anticipated 3% milk growth but got 10%. Add 10% growth to our 7%-12% ideal Fund size and a 15% cap is too restrictive.”

He said that over time the Fund would be managed within the target size range, but the Constitutional limit needed to be higher to allow for seasonal shifts in milk production.

“It’s a combination of hard maths and good judgement that leads us to recommend 20%,” he said.

Sir Henry said another key resolution was to enshrine protections for setting the Farmgate Milk Price in the Co-operative’s Constitution so that future changes would require a 75%-plus majority.

“The proposal is that the Shareholders’ Council’s appointment to the Milk Price Panel be added to the constitution,” he said.

“This underpins the integrity of the Farmgate Milk Price going forward,” said Sir Henry. “Unlikely as it might be, were a future Board were to bow to pressure from investors in the Fund, this would become obvious and the Council’s constitutional ability to protect the process provides a further assurance for farmers.”

He said that Commerce Commission oversight of the Farmgate Milk Price formula — a process being worked through independently of TAF — provided a further safeguard in terms of transparency.

The farm gate price is the main reason farmers want to retain ownership of the company. If non-suppliers had control the pressure would be on to lower the price to provide higher dividends.

 


Shareholders’ Council supports TAF – chair resigns

25/05/2012

Simon Couper, resigned as chair of Fonterra’s Shareholders’ Council over the Trading Among Farmers proposal:

Couper’s resignation followed a majority vote by the council in support of the TAF proposal, a view which clashed with his own and made his position untenable, he told BusinessDesk.

“I respect the council’s decision,” he said, but was not personally convinced that the scheme would meet the bottom line objective of securing 100 percent ongoing farmer ownership of Fonterra in perpetuity.

“One hundred percent is 100 percent and in my view, we didn’t get there,” he said, after the council completed a due diligence process on the detail of the TAF scheme, which will go to a special shareholders’ vote on June 25.

Fonterra chair Sir Henry van der Heyden said Couper has done the right thing by the co-operative:

The situation was “not ideal”, van der Heyden told BusinessDesk. “But hey, I’m delighted about where the Shareholders Council got to”, with replacement chairman Ian Brown reporting “a very strong” mandate from the rest of the council.

“I don’t know exactly what the number are, but north of 80 percent,” he said.

The numbers are important because at least some of the votes at a special shareholders’ meeting on June 25 to approve TAF will require 75 percent majority support and involve constitutional change. . .

Couper’s resignation notwithstanding, the Shareholders’ Council’s support of the proposal makes it much more likely farmers will support TAF.

The proposal is contentious and is not without risk.

But there is a greater risk to the company in doing nothing about the threat which could come if too many farmers redeem their shares.

 


Another price fall signals lower payout

16/05/2012

Fonterra’s forecast payout for this season is $6.75 – $6.85 a kilo of milk solids. There have been several signs that next season’s price will be well below that and this morning’s 6.4% drop of the trade-weighted price in the GlobalDairyTrade auction makes that even more likely.

The price of anhydrous milk fat dropped 11.9%; cheddar was down .2%; milk protein concentrate was down 1.2%; rennet casein fell .7%; skim milk powder dropped 5.4% and whole milk powder fell 8.9%.

The price is now below the long-term average.

Fonterra chair Sir Henry van der Heyden said the price reflected the increased amount of milk on sale because of higher production here.

The grapevine has been suggesting next season’s forecast could be around $5.50. That’s a big fall from this season and any wise farmers will be redoing budgets with a very sharp pencil.


Fonterra won’t seek outside equity

01/05/2012

Fonterra chair Sir Henry van der Heyden has ruled out seeking outside equity for the company:

Fonterra will not go outside its farmer shareholder base to look for new capital to fund the co-operative’s growth, and will depend only on retained earnings and new entrants to the dairy industry to pay its portion of future ventures.

Speaking to reporters after a two-hour select committee hearing at Parliament, chairman Sir Henry van der Heyden emphatically ruled out Fonterra seeking new capital for growth.

“No. We’re a co-operative,” he said in response to questions on whether the dairy giant would pursue growth opportunities in the future.

People outside the industry might not be happy about that but farmers will be.

The risk with outside equity would be the non-suppplying shareholders would want to drive maximise profits by driving down the farm gate price of milk.

While the company is 100% supplier owned, their interests are safeguarded.

Competitors wouldn’t mind that though, they reckon the farm gate price is 40 – 50 cents a kilogram higher than it ought to be.

 


Fonterra opening second farm in China

04/04/2012

Fonterra’s chair and chief executive Sir Henry van der Heyden and chief executive Theo Spierings will be in China next week to open the company’s second dairy farm there.

In a newsletter to shareholders they also mention that China’s imports of milk in February were 45% higher than at the same time last year. New Zealand supplied 95% of the whole milk powder and 75% of the skim milk powder.

The trade weighted price of milk increased 1.5% in this morning”s globalDairyTrade auction after three months of falling prices.

the price of anhydrous milk fat increased 8.3%; cheddar was up 13.2%; milk protein concentrate went up 13%; rennet casein was up 13.8%; skim milk powder was down .8% and the price of whole milk powder was down 2,8%.

Arla, a european co-operative, and Murray Goulburn, an Australian co-operative, sold milk in the auction for the first time. The addition of more industry players highlights the GDT’s key role in international dairy trade.

 


Why all the fuss?

28/03/2012

When proposed changes to the Dairy Industry Restructuring Act were announced Fonterra’s strong and very negative  reaction was unexpected.

The company and many of its shareholders made submissions during the consultation period and it appears most of the issues which had caused concern have been addressed in the bill which was tabled yesterday.

Fonterra chair Sir Henry van der Heyden said in a newsletter to shareholders that the company is broadly comfortable with the changes though will be seeking some technical changes.

It makes me wonder why they made such a fuss in the beginning.

The bill details proposals to oversee Fonterra’s farm gate milk price setting and ensure a more transparent and efficient dairy market. Changes to raw milk regulations are still being considered.

Primary Industry Minister David Carter’s media release on the bill is here.

More details on the bill are here.


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