Rural round-up

July 9, 2019

Uncertainty plus unique ownership structure drive Fonterra share volatility – Keith Woodford:

Fonterra’s shares have been on a steady downward slide for the last 18 months. In January 2018 they were selling at $6.60 dropping to $3.86 at closing on 30 June 2019.

Then this last week things suddenly turned volatile, dropping at one point on 4 July a further 10 percent to $3.45, before rising by six percent to $3.69 at close of trade on 5 July.

The causes of the long-term drop are well understood. Very simply, Fonterra made a loss of $196 million in financial year 2018 largely because of write-down on assets. Fonterra is also now in asset-selling mode to strengthen its balance sheet. Non-farmer investors are coming to understand that, with family silver having to be sold as well as some rubbish disposal, any turnaround is likely to be long-term rather than short-term. . .

One billion tree flawed says climate scientist :

The Forestry Minister Shane Jones’ one billion trees won’t reduce carbon emissions, as too few natives are being planted, climate scientist Jim Salinger says.

The government has allocated $120 million in grants to landowners to plant trees on their properties, and wants two-thirds of those planted to be natives.

Forestry New Zealand figures show in the first year, of the 91m trees planted, only 12 percent were native. . .

Falling log prices may make some woodlots unprofitable – ANZ -Rebecca Howard

(BusinessDesk) – In-market prices for logs in China – New Zealand’s largest export market – have fallen in recent weeks and ANZ Bank warns the drop will make the harvest of some woodlots unprofitable.

While some price softening is not unusual at this time of year as construction activity slows in the hot months, “the scale of the correction was unexpected,” said ANZ agriculture economist Susan Kilsby.

The price of an A-grade log landed in China has fallen from US$130/JAS cubic-metre in early June to approximately US$105/JAS cubic-metre.. .

Vet behind Mycoplasma Bovis detection hopeful for eradication:

The Ōamaru vet, whose efforts led to the identification of cattle disease Mycoplasma Bovis in New Zealand, says she is optimistic the disease can be eradicated.

Earlier this week, Dr Merlyn Hay was given the Outstanding Contribution to the Primary Industries Award, for her work to identify M Bovis in July 2017.

Dr Hay told Saturday Morning that the disease was very hard to diagnose, and in many other countries it was only detected after it had already been spreading for several decades . .

Group aims to help farmers improve M. Boris response – Daniel Birchfield:

Lines of communication between the Ministry for Primary Industries and farmers impacted by cattle disease Mycoplasma bovis have been muddied for too long, Waitaki Mayor Gary Kircher says.

Alongside Waimate Mayor Craig Rowley, he chaired the first meeting of the recently formed Waimate/Waitaki Mycoplasma Bovis Advisory Group held at the Waimate District Council on Wednesday.

The group, modelled on a similar Ashburton arrangement, was formed to support the ministry’s M. bovis eradication programme and assist with regional decision-making to benefit farmers. . .

Lamb contract rewards loyalty – Colin Williscroft:

A $9/kg fixed-price lamb contract for August is a reward for customer loyalty, Affco national livestock manager Tom Young says.

So, farmers generally should not raise their hopes it signals prices higher that they might usually expect as the season unfolds.

The contract has been the subject of much discussion at sale yards but Young said it is not an offer being made to every farmer.

It is only available to loyal clients, farmers who have shown Affco consistent support. . .

Dismantling free markets won’t solve biodiversity threat – Matt Ridley:

Driven perhaps by envy at the attention that climate change is getting, and ambition to set up a great new intergovernmental body that can fly scientists to mega-conferences, biologists have gone into overdrive on the subject of biodiversity this week.

They are right that there is a lot wrong with the world’s wildlife, that we can do much more to conserve, enhance and recover it, but much of the coverage in the media, and many of the pronouncements of Sir Bob Watson, chair of the Intergovernmental Panel on Biodiversity and Ecosystem Services (IPBES), are frankly weird.

The threat to biodiversity is not new, not necessarily accelerating, mostly not caused by economic growth or prosperity, nor by climate change, and won’t be reversed by retreating into organic self-sufficiency. Here’s a few gentle correctives.

Much of the human destruction of biodiversity happened a long time ago . . .


Rural round-up

August 18, 2016

Trade access landscape increasingly crowded – Allan Barber:

At the same time as the TPP is struggling to get across the finish line before the next American President takes over early next year, there are several signs of access to the USA freeing up for some of New Zealand’s competitors.

The announcement of greatest significance concerns access for Brazilian beef after 17 years of negotiations which will be permitted to begin in September. Admittedly Brazilian plants must still gain accreditation before they can export to the USA and, when they do, their entitlement will be included in the ‘other country’ quota of 64,800 tonnes at the same preferential tariff of 4.4 cents per kilo as New Zealand for its 213,402 tonne quota. However, there is a possibility Brazil’s eagerness to export, combined with its weak currency, will encourage it to sell at the 26.4% general tariff rate. . . 

The pros and cons of PKE – Keith Woodford:

In recent weeks, PKE has been in the spotlight.  The key reason for this has been the decision by Landcorp to phase out its use on the Landcorp farms. This has brought back into focus Fonterra’s 2015 recommendation to farmers to only use 3kg per cow per day. It has also given a platform for various other groups to promote their own perspectives.

Amongst the environmental groups, there are two polar perspectives. Greenpeace says we should stop using all PKE. However, the World Wildlife Fund (WWF) says that palm oil production is OK as long as it sustainable, and certified by the Roundtable on Sustainable Palm Oil (RSPO). . . 

A farming mum who loves helping others – Kate Taylor:

Regular visitors to the Facebook site, Farming Mums NZ, will be familiar with an online blogger whose zest for life seems never-ending. Kate Taylor reports.

There’s an element of irony about the name of Chanelle O’Sullivan’s daily blog, Just a Farmer’s Wife, because it couldn’t be further from the truth.

She is, actually, a farmer’s wife, but is also a mother of two, qualified vet nurse, blogger, project manager, 2016 scholar on the Kellogg Rural Leadership Course, guest speaker, online business woman, long-distance runner and admin for several flourishing Facebook pages.

Chanelle lives at Waitohi in South Canterbury with husband Dave, who is working on a farm on Rockwood Rd. He grew up near Timaru and has a Diploma in Farm Management from Lincoln University. . . 

Silver Fern Farms shareholders vote conclusively in favour – Allan Barber:

The long awaited special meeting finally took place this afternoon with the company’s desired outcome. 80.4% of shareholders voting voted in favour of the Shanghai Maling deal, a small reduction from the 82% that voted in favour last October.

At today’s meeting in Dunedin, as soon as the result was announced, it appears John Shrimpton who led the requisition group shook SFF chairman Rob Hewitt’s hand and agreed that democracy had had its say and the campaign was over. . . 

Clear vision for red meat sector in sight at last – Allan Barber:

After many years of relatively low levels of expenditure on market development and promotion, the red meat industry faces a major challenge in deciding how best to create the desired image to appeal to the world’s affluent consumers. Currently expenditure is divided between generic promotion, funded by farmer levies, and brand advertising by the meat exporters, with a small amount of joint funding in some of the less mature markets.

Delegates at the recent Red Meat Sector Conference heard about the importance of telling a believable and emotionally compelling story built on the heritage and healthy attributes of New Zealand and its farming sector. But they were also challenged to make sure this story is constructed on credible building blocks of environmentally sustainable farm, animal welfare and processing practices. . . 

New primary sector groups to support climate change goals:

Two new reference groups will help support New Zealand’s climate change goals and reduce emissions from the livestock and forestry sectors, Primary Industries Ministers Nathan Guy and Jo Goodhew have announced today.

“As part of ratifying the Paris agreement on climate change, New Zealand has set a target of reducing our emissions by 30 per cent below 2005 levels by 2030. The primary sector will need to be an important part of that,” says Mr Guy.

“The Biological Emissions Reference Group will bring together a wide range of agricultural, horticultural and farming stakeholders to collaborate with Government and build a solid evidence base. This will ensure we have the best possible range of information on what can be done right now to reduce biological greenhouse emissions. . . 

Glass half-full for dairy after price lift – Alexa Cook:

Dairy farmers could finally have break-even milk prices this season, AgriHQ dairy analyst Susan Kilsby says.

This season’s forecast of $4.25kg/ms is the third season of prices below $5.

Most farmers need about $5kg/ms to cover their costs, which is about $US3000 a tonne for whole milk powder, the industry’s main export.

In the overnight Global Dairy Trade auction prices lifted by 12.7 percent and whole-milk powder surged 18.9 percent to $US2695 a tonne. . . 

Countdown Egg Producer Programme for Free Range and Barn launches today – Supermarket assures farmers their investment in free range and barn eggs will pay off:

Countdown has today launched an Egg Producer Programme to support free range and barn egg farmers to increase the supply available for Countdown stores and our customers.

The Egg Producer Programme provides farmers an opportunity to increase investment in free range and barn egg capacity, as Countdown will make a commitment to take future supply through individual partnership agreements.

Currently, just 18 per cent of eggs produced in New Zealand are free range. Countdown wants to put in place plans with farmers, to increase the availability of the free range and barn eggs.  . . 

Bill to streamline Food Safety passes first reading:

Food Safety Minister Jo Goodhew is welcoming the Food Safety Law Reform Bill having passed its first reading in Parliament last night, with unanimous support.

The Bill is the final step in implementing the Whey Protein Concentrate (WPC) Inquiry recommendations, in particular those which require legislative change.

“This Bill is an important part of putting the false Botulism scare behind us. It illustrates the Government’s commitment to ensuring the safety and suitability of food, which is vitally important for the health of consumers – both in New Zealand and overseas – and our international trade reputation,” says Mrs Goodhew. . . 

Retirement of Fonterra Director:

Fonterra Co-operative Group Limited today announced that Mr John Waller ONZM will be retiring as an Independent Director on the Fonterra Board with effect from 31 August 2016.

Fonterra Chairman John Wilson said that Mr Waller is retiring to reduce his workload after serving on the Fonterra Board since 2009. He chaired Fonterra’s Fair Value Share Review Committee, the Trading Among Farmers Due Diligence Committee and the Milk Price Panel, and was a member of the Audit and Finance Committee and the Risk Committee.

“John has been an outstanding director of our Co-operative and has made an invaluable contribution by combining his strong personal values, drive and leadership with commercial common-sense. I am pleased that after such a significant contribution John is finding the time to rebalance his commitments so that he can spend more time with his family and pursue his other interests. . . 


GDT price index down .4%

July 6, 2016

Dairy prices are still in the doldrums with a .4% drop in GlobalDairyTrade’s price index this morning.

GDT6.7.16

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It doesn’t help that the EU’s skim milk powder intervention scheme has been officially raised to a record 350,000 tonnes.

AgriHQ dairy analyst Susan Kilsby said the scheme takes the excess milk from the market and puts it into storage, which has a mixed effect on prices.

“In the short term it’s providing some stability in the market, and some support around skim milk powder levels.

“But what it does over the longer term is we’ve now got skim milk powder stocks built up in the EU to record levels so it’s going to take several years for those stocks to work through the market as it’s slowly released, and that will only happen once milk supply slows down and the markets rebalance.”

Ms Kilsby said this would prevent milk powder prices from rising quickly for quite some time.

“It certainly will keep prices for skim milk powder down while we sell more of our milk powder in the format of whole milk powder – there is a link between the two products because they can be substituted to a certain degree.

“It’s certainly going to hamper dairy commodity prices from lifting quickly even when the milk supply does slow down in Europe.” . . 

However, we were in Zambia with dairy farmers from Holland and Ireland lst month and they are no happier about milk prices than we are.


Rural round-up

August 24, 2014

Smart switch could save lives on farms – Lauren Hayes:

The scientific smarts of a young Southlander could save lives on farms.

James Hargest College pupil Maria Burnett took home the premier technology award from the NZAS Science and Technology Fair for her project, Smart Switch.

For the project, the 16-year-old invented a shield to cover the power take-off (PTO) shaft on tractors.

The PTO shaft carried electricity from the tractor to the implement attached to it and spun 16.6 times a second, so was very dangerous, Maria said. . .

White truffles could transform forestry industry – Annabelle Tukia:

At $3000 a kilogram, white truffles are a true gourmet delight.

Now a team from Plant and Food Research have come up with a way to cultivate the delicacy on pine tree roots, and they say forestry owners could do the same, adding another stream of income to their business.

Deep in a Canterbury pine plantation, scientist Alexis Guerin is hunting for white truffles, a fungus that could one day transform pine plantations all over the country.

Scientists at Plant and Food Research planted the white truffle-infused pine seedlings 10 years ago and, with the help of truffle-hunting dog Ace, they’re now finding the fruits of their labour cropping up all over this plantation. . .

China’s milk thirst will grow – Stephen Bell:

China’s thirst for imported dairy products will expand over the next five years to equate to New Zealand’s entire annual production, Agrifax senior dairy analyst Susan Kilsby says.

Though NZ had a foot in the door, being first with a free-trade agreement with China, there would be increased international competition, made tougher by Russia’s ban on Western imports, Kilsby, who spent three weeks in China in June, said.

She found China would need to import more dairy produce in coming years than it had so far. . .

Migrant workers need more help – Alan Williams:

Dairy farmers helping their migrant workers to have improved access to English language classes could be the best way to help them integrate more into their communities.

This is the view of people offering support services to the workers, though they say there is also no harm in the various nationalities choosing to stay mostly in their own groups.

Given the challenges involved in living in a foreign country it’s only natural for different groups to gravitate towards their own nationality for comfort, support and advice, Aoraki Multicultural Council executive member Kate Elsen said.

New Zealanders shouldn’t be put off by that, she says, but everyone agrees that the better their understanding of English, the better it is for everybody. . .

Swiss cattle breeder puts rare herd up for sale  – Tim Cronshaw:

Colin Lyon hopes someone with the same passion as him will take on his rare Swiss breed of beef cattle to bigger things.

His small herd of stud braunvieh beef breeding cows, which has twice reached the semifinals of the Steak of Origin contest, was begun by Lyon obtaining embryos from an Australian stud in 2005.

Lyon feels that, having reached 71, beef breeding is a “young man’s caper” and would like to pass on the genetic line to someone else and his herd is for sale.

The braunviehs at his farm near South Canterbury’s Pleasant Point are believed to be the only cattle of their kind in New Zealand. . .

Cows in class:

Nelson dairy farmer Julian Raine is bringing the country into the city, when he teams up next week with the Fonterra Milk for Schools Programme and Victory Primary School. A cow and a calf from Oakland’s, Mr Raine’s family farm, owned and worked by his ancestors since 1842, will visit the school on the morning of Monday 25th August.

The initiative is part of the Victory School’s Year 5 Integrated Study, “From Paddock to Puku”.

Victory School, Deputy Principal, Mr Sullivan, says “The idea for this terms integrated study came from our schools involvement in the Fonterra Milk for Schools Programme, it was important for the students to learn more about where milk comes from and it’s health benefits, together with the cultural and environmental effects of drinking milk.” . . .


Milk payout going higher?

December 7, 2013

Fonterra is already forecasting a record payout for milk this season, could it go higher?

Dairy farmers will get an early Christmas present this week, in the form of a substantial increase to their already-high milk payouts.

NZX Agrifax analyst Susan Kilsby said world prices for whole milk powder (WMP), relentless Chinese demand and New Zealand’s export volumes indicated a milk price of $8.70 a kilogram milksolids (MS).

Fonterra has said it would make milk price, advance rate and dividend announcements after next week’s board meeting.

It is required by the Dairy Industry Restructuring Act to make a re-calculation before December 15, for the purpose of setting the raw milk price to competitors.

Should it follow Kilsby’s prediction on milk price, as well as maintain the dividend guidance at 32c a share, a payout forecast for the season of more than $9/kg MS could result.

Kilsby has also predicted milk production growth of 8%, if good pastoral conditions persist during summer and autumn. . . .

A higher payout and higher production would be great for farmers and would provide a significant boost for the wider economy.

It would also add to the trend of more dairy conversions and operations changing from conventional sheep and beef farming to dairy support.


Rural round-up

November 12, 2013

Plant not closing – Simon Hartley:

Silver Fern Farms’ Silverstream lamb-processing plant near Mosgiel will not open for the start of its season as usual in December – but it is not being closed.

While the plant’s 12-strong management team are in consultation over potential redundancy, Silver Fern and the New Zealand Meat Workers Union are confident the Finegand plant near Balclutha could take the up to 180 boning staff should they choose to transfer there.

With no staff meeting or statements sent to individual staff, there is confusion over the plant’s future and it was ”inadequate for workers to be left dangling”, Otago-Southland Meat Workers’ Union branch president Daryl Carran said. ”Because Silverstream is for overflow processing, to bone lamb at the peak of the season, it’s more open to volatility.”

Coronial report on quad bike deaths – industry forum to be convened:

 Whangarei Coroner Brandt Shortland has today released findings into five workplace quad bike deaths:

As part of his concurrent inquests in April this year into the five deaths, Coroner Shortland invited submissions on quad bike issues from a series of experts and involved parties, and his findings include his conclusions and recommendations (see summary below).

“These findings and recommendations give weight, in the Ministry’s view, to the need to continue focusing on reducing the death and injury toll associated with quad bike use in agricultural settings,” General Manager Health and Safety Operation Ona de Rooy said. . . .

Federated Farmers welcomes coronial recommendations:

Federated Farmers is welcoming recommendations contained in Coroner Shortland’s written findings released today on quad bike related deaths in 2010 and 2011.

“Can we express our heartfelt commiserations to the family and loved ones of those people subject to the Coroner’s findings,” says Jeanette Maxwell, Federated Farmers Health & Safety spokesperson.

“The one thing we welcome in Coroner Shortland’s findings is that it recognises the practical realities of using quad bikes in a farm setting. Indeed, many of the recommendations are current industry practice and that is a good thing.

“There are far more quad bikes in New Zealand than registered road-going motorcycles. Many farmers will spend hundreds of hours a year operating a quad bike because they have become the farmer’s Swiss Army knife. . .

High input costs in China’s milk benefit NZ:

A dairy industry analyst says it’s a good thing for New Zealand farmers that it costs substantially more to produce milk in China than it does to produce the same volume in this country.

The International Farm Comparison Network 2013 Dairy Report shows that producing 100kg of milk in New Zealand costs $US35. In the United States it costs $US44 to produce the same amount and in China it’s 50% higher again.

NZX Agrifax’s dairy analyst Susan Kilsby says that reinforces China’s ongoing dependence on importing dairy products from countries such as New Zealand.

She says it’s importing feed that makes producing milk so expensive in China. . .

Star rating system for food could benefit primary industry sector:

Food Safety Minister Nikki Kaye says food labelling using a star rating system could benefit the primary industry sector in New Zealand.

The star system effectively rates the nutritional value of a product.

The minister announced last week a voluntary star rating system would be the focus of research as to how effective it could be and what consumers think about it.

Ms Kaye says it’s important consumers have the best possible information about making healthier eating choices which is why the New Zealand Front of Pack Labelling Advisory Group decided the system should be looked into.

She says the system could have flow-through benefits for the primary sector.   . .

Giesen, Johanneshof and Villa Maria dominate 2013 Marlborough Wine Show awards:

Family companies dominated the awards at the 2013 Marlborough Wine Show celebration dinner held in Blenheim on Saturday night with Giesen, Johanneshof Cellars and Villa Maria winning nine of the 14 awards presented.

In addition to 12 class trophies, there were two new awards – The Marlborough Wine Show Award for Vineyard Excellence which was presented jointly to Ara Wines and Villa Maria for their Seddon Vineyard and the Marlborough Museum Legacy Award which was presented to Johanneshof Cellars for their Gewurztraminer, vintages 2006, 2010 and 2012. . .


Food safety’s the key

January 27, 2012

It’s not just growing demand for food but safe food which makes New Zealand dairy products and the land which produces them so attractive:

It’s not just New Zealand’s temperate climate and ability to grow lush green  grass that has caught the eye of Chinese investors.

Our ability to produce high quality milk cheaply and efficiently is matched  only by our ability to do so safely.

As an analyst for NZX, Susan Kilsby has compiled a report on the booming  Chinese dairy industry. She says for the Chinese, it’s all about food  security.

“It’s not just setting up the farm, it’s also the security of supply chain  from the time the milk leaves the cow to the time it reaches the consumer  product at the end,” she said.

Our reputation for food safety is priceless and something we must do everything in our power to safeguard.

I don’t have any problem with the sale of farm land to foreigners as mandated by current legislation. But we do need to ensure that any food which is produced in, and marketed as from, New Zealand conforms to our standards.

 


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