Rural round-up

July 17, 2015

Fonterra shares first results of business review:

Fonterra Co-operative Group Limited has provided a further update on its business review.

Chief Executive Theo Spierings said the Co-operative’s leadership was developing initiatives to deliver value right across the organisation.
“The key aims of the review are to ensure that the Co-operative is best placed to successfully deliver its strategy, increase focus on generating cash flow, and implement specific, sustainable measures for enhancing efficiency. . .

Fonterra top brass on notice from farmers as 523 jobs go in shake-up – Fiona Rotherham:

(BusinessDesk) – Federated Farmers says top management should be leaving Fonterra Cooperative Group if results don’t start improving in the next couple of years.

The comments, from Fed Farmers dairy chair Andrew Hoggard, were in response to the confirmation today by the world’s largest dairy exporter that it will cut 523 jobs to save up to $60 a million a year on its payroll in the first swathe of a major review of the business. Hoggard said he hoped the job losses were part of a wider strategy to redirect resources in new areas rather than a knee-jerk reaction to cut costs as dairy prices continue to fall.

“Fonterra has had a history of knee-jerk reactions like that where it gets rid of a whole bunch of people and then two years later hires them back again, or rather having got rid of people with institutional knowledge, they hire new graduates who can’t do as good a job,” he said. . .

Waipaoa Station moulds young farm cadets for workforce – Kate Taylor:

The physical nature of the work means some farm cadets he works with fill out and some get lean but they all change, says Waipaoa Station stock manager Jerry Cook.

The station and the Waipaoa Farm Cadet Training Trust welcomes five new cadets every year for two years – all straight out of school.

“They come in as kids and leave ready for the workforce. They might arrive still with a bit of puppy fat at 17 and leave two years later toned and strong and armed with the right skills to go farming as adults.” . . .

New Ospri head sees big opportunities ahead – Gerald Piddock:

New Ospri chief executive Michelle Edge has some bold visions for where she sees the organisation making a greater contribution to New Zealand agriculture.

Edge started her new role in May and said there were exciting opportunities ahead for Ospri’s (Operational Solutions for Primary Industries) two wholly-owned subsidiaries TBfree New Zealand and NAIT (National Animal Identification and Tracing).

“There’s also a range of business development prospects on the horizon,” she said. . .

 Enterprising Rural Women Awards open for 2015:

Entries have opened for the 2015 Enterprising Rural Women Awards (ERWA) offering women who run their own rural businesses the opportunity to boost their profiles and gain recognition for their achievements.

“This year is very special as we have a lot of interest in the awards and we’re already fielding enquiries from women keen to enter,” says Rural Women NZ national president, Wendy McGowan.

Last year’s supreme winners, Keri Johnston and Haidee McCabe from Irricon Resource Solutions have come on board as sponsors. They are enthusiastic about the awards and want to encourage other women in rural businesses to have an opportunity to get the benefits that their business has gained since winning in 2014.

The future of Fijian sugar cane industry not so sweet:

Fiji’s National Farmers Union says the future of the country’s sugar cane industry could be in doubt.

The country’s cane farmers have begun harvesting however many are facing delays of up to six months due to labour shortages.

The union estimates up to 40 percent of the country’s harvesting labour gangs aren’t operating as they are unable to find enough people to fill them. . .

Weaker NZ Dollar Helps Lift Value of Meat Exports:

Beef + Lamb New Zealand compiles lamb, mutton and beef export statistics for the country. The following is a summary of the first nine months of the 2014-15 meat export season (1 October 2014 to 30 June 2015).

Summary

Over the first nine months of this season, beef and veal returns and volumes have been higher than lamb and mutton.

Because of the significant size of the market, changes in Chinese demand – specifically, less lamb and mutton and more beef – impacted across all categories of New Zealand meat exports.

Meanwhile, the USD / NZD exchange rate averaged 0.76 in the first nine months of the current season, compared with 0.84 over the same period last season – a 10 per cent drop. This NZD weakness contributed significantly to this season’s higher average export values across all products. . .

 

LIC sires named best in season:

Two of LIC’s artificial breeding bulls were named sires of the season by Jersey and Holstein-Friesian breed societies at their annual conferences last month.

South Land Jericho received Jersey New Zealand’s JT Thwaites Sire of the Season award and San Ray FM Beamer received Holstein-Friesian New Zealand’s Mahoe Trophy.

LIC bull acquisition manager, Malcolm Ellis, said it is an honour for the co-op’s sires to be recognised by the societies again, after LIC sires took out both awards last year also. . .

Carrfields Group brand to commence market rollout :

The Carrfields Group brand will begin a market rollout from August 2015 and will be fully integrated across the New Zealand agrimarket by December 2015.

Carrfields is borne from the Carr Group’s acquisition of the Elders New Zealand business in August 2014. The name is representative of the South Island based Carr family who have farmed and built the Carr Group of companies over the past forty years from the fields of the Canterbury region. . .

 

 


Rural round-up

July 7, 2015

Is A2 milk about to leap forward? _ Keith Woodford:

Shares in The a2 Milk Company (coded as ATM on the NZX stock exchange) have increased from 48.5 cents on 29 May to 75 cents at 3 July. The market capitalisation has risen from $330 million to $495 million. Where the shares will go in the next few weeks is a journey into the unknown.

What is known is that some of the international big boys have been putting together a syndicate to purchase ATM (also listed jointly on the Australian exchange as A2M). The publicly announced parties are America’s Dean Foods and Australia’s Freedom Foods. But in the background are Australia’s Perich family, Australia’s Moxey family, and China’s New Hope agri-food conglomerate. And hovering nearby is Richard Liu from the rapidly growing Chinese online marketer JD.com. . .

Top Performing Sheep Farmers And Industry Leaders Celebrated:

Sheep farmers have celebrated the top performers in their industry at the Beef + Lamb New Zealand Sheep Industry Awards in Invercargill tonight.

This is the fourth year the awards have been held and Beef + Lamb New Zealand chief executive, Dr Scott Champion said the awards night was a wonderful way to showcase the sheep industry – a major contributor to the New Zealand economy.

“The industry has and continues to make huge progress – for instance, while the number of sheep has halved in the last 25 years, lamb production has only fallen by seven per cent. Improved genetics is part of this fabulous productivity improvement story and tonight’s winners are leading the way in sheep genetics.” . .

 

Marlborough Lines takes 80% stake in Yealands Wine for $89M – Suze Metherell:

(BusinessDesk) – Marlborough Lines has bought an 80 percent stake in Yealands Wine Group, New Zealand’s sixth-largest wine exporter, for $89 million.

The South Island electricity lines company took control from founder Peter Yealands, who wanted to keep the winery fully New Zealand owned, the companies said in a joint statement. Marlborough Lines is debt free and had realised $100 million in cash from investments which it wanted to reinvest locally.

“Opportunities to invest in the electricity industry are limited and this led to us looking to other options,” said Marlborough Lines managing director Ken Forrest. “We are satisfied that this will be a successful investment which will broaden our asset base for the benefit of the people of Marlborough.” . .

 

New phase for NAIT programme

July is the start of the next phase for OSPRI’s NAIT programme with the three-year exemption period for pre-NAIT cattle now over. This means that all cattle must be tagged and registered in the NAIT system, even if they are not leaving your property or were born before the NAIT programme launched in July 2012 (the transition period for deer ends on 1 March 2016).

Dr. Stu Hutchings, OSPRI Group Manager, says, “Our goal is to get everybody on board with NAIT so we can all reap the benefits of tighter TB control and continued access to export markets. The only way to make this happen is if farmers play their part and fulfil their NAIT obligations.” . . .

 

Fonterra Updates Progress of Its Business Review:

Fonterra Co-operative Group Limited today provided an update on the business review it announced in March this year.

Fonterra Chief Executive Theo Spierings said the purpose of the review is to ensure that Fonterra is best placed to respond to a rapidly changing global environment.

The initial phases had looked at the entire business in detail and had identified potential areas, including significant initiatives in procurement, business operations and working capital, where the Co-operative can unlock increased value for its owners. . .

 

Silver Fern Farms chief executive appointed to deer board:

Silver Fern Farms chief executive Dean Hamilton has been appointed to the Deer Industry New Zealand (DINZ) board for a three year term.

Mr Hamilton joined the board as a venison processor-appointee on 1 July, replacing Dr Andrew West at the end of Dr West’s three-year term.

Deer Industry New Zealand chair Andy Macfarlane welcomed Mr Hamilton.

“Silver Fern Farms is our largest venison processor and marketer and we are very pleased to now have a close connection to that company through Dean’s appointment. To have a leader of his calibre on the board will be an asset for DINZ and is a good signal of Silver Fern Farms’ commitment to the deer industry.” . . .


Labour still wants to meddle in other people’s business

June 14, 2015

One criticism of the last Labour government was its propensity for meddling in other people’s business.

Ruminations from party primary industries spokesman Damien O’Connor show it still wants to do that:

The Labour Party has launched into the controversy surrounding Fonterra’s latest restructuring by saying chief executive Theo Spierings should take a voluntary pay cut “to restore credibility with farmers and staff”.

Spierings’ salary has been estimated to be worth about $4 million a year.

“The events of the last week have shaken the farming sector’s confidence in Fonterra, and the chief executive must take responsibility,” Labour’s Primary Industries spokesperson Damien O’Connor said in a statement.

“Theo Spierings should lead by example and voluntarily reduce his pay by half,” he said. . .

Fonterra’s fortunes do impact on the wider economy but it’s not a public company nor is it an SOE.

It’s a co-operative and the chief executive’s salary isn’t any politician’s business.

It’s the business of the board and shareholders and Labour should keep its nose out of it.


What have they been doing?

June 11, 2015

Fonterra expects to layoff hundreds of staff as a result of a comprehensive review of the company:

Fonterra chief executive Theo Spierings said he’s determined not to allow the dairy cooperative to fall below its current 87 percent share of the New Zealand milk pool, despite increased competition for supply.

Spierings fronted up to the media this morning after widespread criticism of the dairy cooperative’s management performance following a weak half-year financial result, lower forecast dairy payout, and anecdotal reports many of its 10,500 suppliers were seeking to leave and supply independents.

He said a major review underway of the business would lead to hundreds of its 1,500 head office and support function staff being laid off because it wanted to redirect more staff into sales and in market roles to help drive up returns. Fonterra currently employs 11,500 staff in New Zealand and 18,000 worldwide. . .

Job losses are always difficult for a business and for the people who lose their jobs.

But the loss of this many positions does lead to questions:

What have the hundreds of people who will lose their jobs been doing?

How long have they been doing it and if they don’t need to be doing it after the review why have they been doing it?


Rural round-up

April 25, 2015

Industry-Leading Orchardists Win Supreme in 2015 Waikato Ballance Farm Environment Awards


Matamata horticulturists Frans and Tineke de Jong, their son Talbert de Jong and his partner Emily Meese are Supreme winners of the 2015 Waikato Ballance Farm Environment Awards (BFEA).

At a special BFEA ceremony on April 23, the de Jong’s family-run business, Southern Belle Orchard, also collected the Hill Laboratories Harvest Award, the Massey University Innovation Award, the WaterForce Integrated Management Award and the Ballance Agri-Nutrients Soil Management Award. . .

Disappearance of bees a mystery:

Bee scientists have been left baffled by the disappearance of thousands of honey bees from hives last spring, and say unless it happens again, it remains a mystery as to what caused it.

Plant and Food research bee scientist Mark Goodwin said last October a number of bee keepers from around the country began reporting strange symptoms occurring in their hives.

He said bees usually rebuilt their colonies in spring after winter, however, large numbers of bees were disappearing from hives in the Coromandel, Raglan and Wairarapa areas.

“So instead of having a queen and a lot of brood – that’s larvae and pupa – and about 30 or 40,000 bees, when the bee keeper came back a few weeks later … suddenly there were no bees there at all, there was a queen and about a hand full of bees and everybody else had gone. And we saw that in whole apiaries and between apiaries and then we were getting reports from beekeepers elsewhere in the North Island that were noticing very similar things.” . .

What Mondayising means on-farm – John Brosnan:

You’ve probably seen this advertised.

You might remember the law was changed in 2013 to allow Anzac day and Waitangi day to be moved to a Monday if they fall on a weekend.

This year’s Anzac day will be the first affected – but what does Mondayising really mean for you as a rural employer?

In reality for most farm staff – not much.

Why? Well here’s what the law states re this …

DairyNZ sessions help farmers assess cash flow – Sally Rae:

Another round of farmer events is under way nationally to give dairy farmers a ”wake-up call” to assess their cash-flow situation, given the low milk price forecasts.

DairyNZ, which is behind the Tactics for Tight Times campaign, has analysed what it is like for the average farmer in every dairying region and it is ”not looking pretty”, chief executive Tim Mackle says.

While 2015-16 would probably still end up being a break-even year for most farmers, he said cash flow would be a major issue that could result in some increased term debt in the sector and less spending in the regions. . .

New Zealand’s Best Eggs awarded last night:

Three of New Zealand’s most well known companies: Fonterra, Deloitte and The Warehouse were last night crowned “Good Business Eggs” in recognition of their work in the community sector. Whilst these companies might be better known for the scale of their business activities, they also demonstrate significant commitments to their various community initiatives.

The event hosted by CQ Hotels Wellington, one of last years winners was packed with business and community leaders anxious to see who had won the annual award. . .

Fonterra management appointments:

Fonterra Co-operative Group Limited today announced changes to the roles and responsibilities of two members of the Fonterra Management Team.

Jacqueline Chow, who is currently Managing Director Global Brands and Nutrition, is stepping into the newly created role of Chief Operating Officer Velocity, effective 1 June 2015 – where she will work alongside the management team to accelerate performance across the Co-operative.

Chief Executive Theo Spierings today said: “In her new role, Jacqueline will lead the next stage in Fonterra’s evolution, working across the entire Co-operative to push forward the Velocity part of our V3 strategy and deliver the best possible performance.” . .

Hooroo to Oz Made brand? – Andrew Miller and Laura Griffin:

ADOPTION of the ‘True Aussie’ brand for all agricultural produce would be “a little perplexing”, says Australian Made campaign marketing manager Ben Lazzaro.

The National Farmers’ Federation (NFF) and Meat and Livestock Australia (MLA) plan to build standards for MLA’s True Aussie brand – developed last year for red meat – which can then be applied to all Australian agricultural products in domestic and global markets.

While the existing government-backed Australian Made label covers a broad range of products including electronics, furniture and clothing as well as food, True Aussie would be “all about agriculture”, an NFF spokeswoman said. . .

 

 

 


Fonterra holds payout

February 27, 2015

Fonterra’s announcement that it is holding the season’s forecast payout at $4.70 with an estimated dividend range taking it to $4.95 – $5.05 for the current season will have disappointed many after successive increases in the GlobaDairyTrade auction and  commentators had suggested an increase to $5.

Chairman John Wilson said that although dairy commodity prices had gone up, the increase was not sufficient to raise the forecast Farmgate Milk Price at this time.

“Since December, GDT prices for Whole Milk Powder have increased 45 per cent and Skim Milk Powder prices have increased 13 per cent,” Mr Wilson said.

“There continues to be significant volatility in international commodity prices. New Zealand volumes are down, with continued uncertainty in milk production due to climatic conditions in New Zealand with droughts in Canterbury, Marlborough, Central Otago and North Otago.

“Today’s forecast reflects the Board and management’s best estimates at this time. We are advising farmers to continue to be cautious with budgeting and we will update them as the season progresses.”

Chief Executive Theo Spierings said Fonterra was sticking to its strategy, with confidence in the long-term fundamentals of dairy demand.

“We will provide a full business update when we report our Interim Result on 25 March,” Mr Spierings said.

Fonterra is required to consider its forecast Farmgate Milk Price every quarter as a condition of the Dairy Industry Restructuring Act (DIRA). . .

 

But maintaining the payout will give farmers confidence.

Fonterra Shareholders’ Council Chairman, Ian Brown said the Co-operative’s announcement to maintain the 2014/15 forecast Farmgate Milk Price at $4.70 per kg/MS will be a relief for Farmers.

Mr Brown: “On-farm conditions have been really tough throughout the country and Farmers will be pleased that the recent downward trend has stopped.

“It has also been encouraging to see GlobalDairyTrade, and in particular Whole Milk Powder prices, increase significantly recently and given what took place late last year it will go some way to building confidence on farm.”

Mr Brown said that Farmers will be looking with great interest when the forecast dividend is announced at the interim results in late March.

“Our Farmers will want to see the strategy, which is key to adding value long term, deliver a return relative to the significant investment they have made and continue to make in their Co-op.

“In the interim, as always, the Council urges Farmers to be prudent in their financial planning to ensure they place their businesses in the best possible shape for next season.”

 

There is time for an increase but any is likely to be modest.

Most of this season’s milk has already been sold and while the outlook is more optimistic it is still volatile.


Rural round-up

December 22, 2014

Two exciting years in a row – Allan Barber:

2014 and 2015 promise to be two of the most exciting years the red meat industry has seen for a long time and for a change the news is not all bad. There are some clouds around, but also silver linings like better beef and lamb prices, improved profitability and the possibility of positive developments in the industry’s structure.

At long last, after a slow start, there are plenty of signs the industry as a whole has recognised the need for change to address the main challenges of inadequate prices, declining sheep and beef numbers and excess capacity which have inexorably brought about land use conversions to more profitable activities. . .

  –  Allan Barber:

The Rabobank Rural Confidence Survey conducted in November found confidence among sheep and beef farmers had risen from just under 50% to 75% since the previous survey the previous quarter. However the overall confidence level remained low because of pessimism among dairy farmers, although this was slightly better than the two year low in the previous survey.

Sheep and beef farmer confidence is now on a par with dairy farmers’ confidence about their outlook and consistent with the situation two years ago. Major reasons for the turnaround are not difficult to fathom, but apart from the contrasting price trend for the respective products, half the farmers surveyed were optimistic about the outlook for global red meat demand.

The relative investment intentions of the two sectors also bore out the levels of optimism with 41% of sheep and beef farmers intending to invest more in their farms compared with just 18% of dairy farmers. . .

Fiordland rangers prepare for stoat plague – Dave Goosselink :

Rangers in Fiordland National Park are preparing for a major stoat plague, which will threaten one of our most endangered birds.

There are only around 260 takahe left, and the Department of Conservation (DOC) is doing its best to prevent any of them from becoming a Christmas dinner.

A remote part of the Murchison Mountains is home to the last wild population of takahe. The critically endangered native birds face a fresh wave of predators this summer due to bumper seed production in beech forests. . .

Tradition ties agents to job – Alan Williams:

There has been a raft of changes in the livestock agency industry in the more than 50 years Fred Fowler and John Honeybone have been working in Canterbury saleyards but one feature stays the same.

They’re both out there in the sprawling Canterbury Park facility wearing a tie.

“That’s the dress code,” Honeybone says.

“It’s good for discipline, specially for the young fellas.”

Fowler agrees. 

“If you’re standing in front of the public then you wear a tie.” . . .

The people behind the scene – Sally Millar:

As the year draws to a close, I would like to reflect on the year from a regional policy perspective. As Federated Farmers Policy Advisor my role is to advocate on behalf of our members to ensure they are able to farm without resource management policies and plans unduly impacting on their farm businesses.

With an ever changing regulatory climate, compliance can make farming tricky at times. We consider that most farming activities should be permitted, with appropriate standards that are essentially good farming practice and should be able to be complied with, with minimum fuss.  There are however areas where farmers will need a resource consent such as for building a bridge, discharging effluent, or getting a water consent for dairy shed wash-down.  This can be a confusing and complicated process.

Where resource consent is required, Federated Farmers Policy works to ensure the controls are appropriate, fair and achievable, without undue cost to the farmer.   This means if we do our job well much of what we achieve will go largely unnoticed. So I don’t necessarily see it as a negative if members are unsure of what I really do.  . .

Farmers face risk of dam-dry summer:

Low reserves of water in Canterbury have farmers and irrigation companies concerned ahead of what is threatening to be a dry summer.

The  Opuha Dam in south Canterbury is half empty – when, by now, it is usually more than 90 percent full and ready to keep pastures green through the summer.

Fish and Game said there had been an over-allocation of available water, which affected rivers and their ecosystems and needed to be addressed.

While the dam supplied water for irrigation, its main purpose was to stop the Opuha River from running dry. A dry spring and a lack of snow melt meant the dam had just over half the water it should have at this time of year. . .

Fonterra Welcomes New Managing Director International Farming:

Fonterra Co-operative Group Limited is pleased to welcome new Managing Director International Farming Alan van der Nagel to the business.

Mr van der Nagel reports directly to Chief Executive Theo Spierings, and replaces Henk Bles who has served as Interim Managing Director since April. Mr Bles is staying on in an advisory role for up to six months, ensuring a smooth leadership transition.

Chief Executive Theo Spierings said Mr van der Nagel had a considerable level of executive experience in internationally integrated dairy companies in emerging markets, and an impressive track record of driving operational excellence, working with multi-cultural teams, and managing large-scale international joint ventures. . .

 

 


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