Rural round-up

April 2, 2018

Action call over any found to have illegally brought in ‘M.bovis’ – Sally Rae:

Consequences are needed if any farmers have put other farmers, animals and livelihoods at risk, let alone the New Zealand economy, DairyNZ chief executive Tim Mackle says.

Dr Mackle was responding to an announcement by the Ministry for Primary Industries yesterday that it had simultaneously executed search warrants at three locations as part of the Mycoplasma bovis investigation.

The New Zealand Herald reported there was growing speculation the bacterial cattle disease was introduced to New Zealand through illegally imported livestock drugs, and sources suggested Tuesday’s simultaneous searches were in Auckland and Southland. . .

Fonterra negotiating ‘roadblocks’ in China – Fran O’Sullivan:

Fonterra’s news that it was writing down its $774 million investment in Chinese infant formula company Beingmate by $405m inevitably dominated news headlines after the dairy co-operative announced its 2018 interim result to the NZX.

But that was eclipsed when chairman John Wilson announced the seven-year reign of his chief executive Theo Spierings was in its final phase.

It was a brutal press conference. . .

Food for thought: How to secure New Zealand’s food supply in the face of a changing climate – Tess Nicholl:

We take for granted the bounty on offer at our supermarkets, but destructive cyclones and the hottest month in 150 years are turning attention to how long New Zealand can provide fresh food for its growing population. Tess Nichol investigates.

On the outskirts of Dargaville, Andre de Bruin has been growing kumara for the past two decades.

He produces 40 hectares of the purple tuber annually, but last year his yield was halved thanks to what de Bruin calls a “perfect storm” — drought followed by unseasonal amounts of rain right before harvest.

“We had drought drought drought, then bam, floods,” he recalls. . .

Get the basics right – Sam Whitelock:

I come from a farming background and once I complete my rugby career I’ll be taking the lessons I’ve learnt from professional sport and applying them back on the farm. (Sam Whitelock, Farmstrong Ambassador)

Rugby has certainly taught me heaps about how to look after myself and handle pressure.

I reckon rugby and farming are really similar that way – there’s always targets to meet and results to achieve.

So how can you prepare for the ups and downs of it all? . .

Merino stud tour held in conjunction with awards – Yvonne O’Hara:

About 170 people took part in a two-day self-drive tour visiting eight merino studs in Central Otago earlier this month.

The tour was held in conjunction with the Otago Merino Association Awards, which were announced at a formal dinner in Alexandra on March 16.

The studs on the tour were Nine Mile Station, Malvern Downs, Earnscleugh Station, Matangi Station, Little Valley Station, Matarae Station, Stonehenge Station and Armidale Merino Stud.

Lunch was at Earnscleugh Station’s woolshed . .

 Art Basel Hong Kong 2018: Loro Piana’s cloud-like “The Gift of Kings” exhibition 590 panels of the world’s finest wool make for a jubilant immersive experience   – Alessandro De Toni:

In conjunction with Art Basel Hong Kong, Loro Piana—one of the world’s most prestigious cashmere and luxury fabric manufacturers—pays homage to its most renowned material known as The Gift of Kings.

It’s quite a bold name but it represents an incredibly fine, feather-light and rare wool sourced by Loro Piana through a 30-year-long collaboration with a selection of Merino sheep breeders in Australia and New Zealand. This material, measuring only 12 microns (one thousandth of a millimeter), is far finer than cashmere and only available in very limited quantities, meaning it’s quite extraordinary that it was used as the principal source material for this installation.

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Rural round-up

March 23, 2018

Gore couple win top sharemilking award :

Gore couple Simon and Hilary Vallely have been named share farmers of the year in the Southland-Otago Dairy Industry Awards.
The awards function was held last night at Bill Richardson Transport World in Invercargill.

Mr and Mrs Vallely, both 31, are 50:50 sharemilking 475 cows on David and Valerie Stafford’s 160ha farm.

They believed strong relationships with all people they dealt with were the key to their successful business. . .

Departing Fonterra chief executive has taken the company forward – Christine McKay:

Fonterra’s departing chief executive Theo Spierings has been a strong leader, Tararua Federated Farmer’s president Neil Filer says.

Mr Filer, who is also the Tararua group’s dairy spokesman, told the Dannevirke News Spierings had moved Fonterra to a value-added space, which was good for dairy farmers.

“He’s done a good job since he began,” Filer said.

Spierings has not named a date for his departure after seven years, but Fonterra board chairman John Wilson said he had made an “extraordinary” contribution while in the job. . . 

Kiwi butchers finish second on world stage:

New Zealand’s butchery team, The Pure South Sharp Blacks, just missed out on being crowned world champions yesterday after finishing runners up at the World Butchers’ Challenge in Belfast, Northern Ireland.

Team Ireland, the host nation took the top spot in a tense battle of the butchers with the Aussies – the Australian Steelers – finishing third… to the delight of many this side of the ditch.

Website to find workers praised:

Demand for horticulture workers is higher than the number of people available, Horticulture New Zealand chief executive Mike Chapman says.

He applauded the Work The Seasons website launched on Friday by the Ministry of Social Development. It gave growers access to more workers and gave people looking for work the chance to see what great opportunities existed in horticulture, ”not only for seasonal work, but also for permanent work and a lasting career”, Mr Chapman said. . 

 

Telemedicine – keeping Kiwis well closer to home:

Dr Ben Wheeler is running remote diabetes clinics for rural Otago families, saving them the long trip to Dunedin.

Type one diabetes is the second most common chronic condition in children, after asthma. In my region, from South Canterbury to Stewart Island, there are up to 200 children and young people with diabetes. Being a kid with diabetes is no fun. You have to be careful about what you eat, put up with finger prick blood tests and injections every day, and often wear a bulky insulin pump under your clothes. When I first started working here, children with diabetes in Otago had to make the trip to Dunedin every three months, sometimes more often, to see me for their clinic. For some families that meant a round trip of up to nine hours. It meant mum and dad having to take a day off work – sometimes two days, if they had to stay overnight. Often brothers and sisters would need to come too, with everyone missing school – all this for a half-hour consultation. . . 

When the death of a family farm leads to suicide -Corey Kilgannon:

Fred Morgan was already deep in debt from rebuilding his milking barn after a fire when milk prices plunged in 2015, setting off an economic drought that is now entering its fourth year — the worst in recent memory for dairy farmers in New York State.

Mr. Morgan, 50, saw no way to save the dairy farm in central New York State that he took over as a teenager from his ailing father and ran with his wife, Judy, and their son, Cody.

With the farm operating at a loss and facing foreclosure, Mr. Morgan believed his only solution was his $150,000 life insurance policy. He said he planned on killing himself so his family could receive the payout.

“I’d sacrifice my life so my family could keep the farm,” Mr. Morgan said. His wife persuaded him otherwise. . .

Those who work ina cares not hours and those who feed others before themselves . . .thank you. #NationalAgDay


Was he pushed?

March 21, 2018

Fonterra has a strangely worded media release announcing it’s seeking a new CEO:

Fonterra Co-operative Group Limited (Fonterra) today announced that, as part of a planned CEO succession process, the Fonterra Board and its CEO Theo Spierings have agreed that Mr Spierings will leave his role later this year.

Fonterra says its Board and Mr Spierings had formally commenced succession discussions last year. As a result of that, the Fonterra Board initiated international searches in November last year to identify potential candidates and was now shortlisting candidates.

Fonterra Chairman John Wilson says the Board was taking the decision to bring forward the announcement, which the Board was expecting to make in April, to avoid speculation.

“It is not yet clear exactly when any appointment for Theo’s replacement will be made, but it is absolutely clear that Theo will continue in the meantime to drive the Co-operative’s strategy and business, with special emphasis on China.

“The Board and Theo are committed to a high-quality transition to a new CEO and when we have more information in regards to timing we will let our farmers and the wider market know. Until then it is business as usual with the focus on driving returns to our farmers and unitholders.

“We envisage that even after the announcement of our new CEO, Theo will be involved in an advisory role so that we make best use of his knowledge and expertise during the transition,” says Mr Wilson.

Mr Spierings says that he has been proud to have led Fonterra as CEO for seven years as the Co-operative has established a strong demand-led strategy and oriented itself to become innovative and sustainable.

“It is now time for a new CEO who can lead the Co-operative through this next phase. The time is right for the Co-operative and that is important to me and to the Board.

“It is also the right time for me personally. I look forward to new challenges, but right now my focus is on Fonterra. That will be the case until I finish with the Co-operative.”

The usual wording would be that a CEO was resigning and a replacement was being sought.

The convoluted wording makes it sound like he was pushed.

Whether or not he was, I hope that the new CEO brings a culture change with better communication, including a willingness to front the media.

Last week Duncan Garner on the AM Show complained that no-one from Fonterra would come on the show.

It’s the second time I’ve heard Garner make that complaint and I can’t understand why Fonterra wouldn’t take up the opportunity to tell its story.


Front up Fonterra

December 14, 2017

On the AM Show this morning Duncan Garner criticised Fonterra for not fronting up.

The company had been asked to come on the show to talk about the price of butter.

No-one would.

I don’t understand why.

Explaining the high price of butter is simple.

After years of being advised to eat less fat in general and less butter in particular, the advice has changed. Butter is no longer the bad diet bogey it was, people are discovering, or rediscovering, the joy of it and demand has risen faster than supply.

How hard would it have been for someone from the company to explain that?

This isn’t the first time Fonterra wouldn’t front the media. If the company doesn’t want all the good its advertising campaign is doing to be undone it must be the last.

Chief executive Theo Spierings is paid an eye watering amount to run the company.

I don’t have a problem with that but I do have a problem if he isn’t doing his job properly. Part of a CE’s job is to front the media or, if he’s not the right person to do so, to find that person and make sure s/he does.

Fonterra is running a very good advertising campaign which shows the interconnections between everyone who contributes to making the company work and work well and the economic and social benefits of that.

It’s not just about converting grass to milk and processing and selling it. It’s about all the people who use the milk and the ones who do the work between the paddock and plate, glass or cup who enable them to do so.

It’s a really good story but there is a huge risk that good will be undone if the company turns down requests to front the media.


Fonterra forecast down, shares up

December 2, 2017

Fonterra has dropped its forecast payout after being ordered to pay Danone $183 million in compensation:

Fonterra Cooperative Group has cut its forecast for 2018 earnings per share after an arbitration tribunal in Singapore ruled it must pay 105 million euros ($183 million) to Danone in the wake of 2013’s whey protein recall.

The award for recall costs suffered by Danone comes after the French company launched arbitration proceedings in Singapore and a legal suit in the New Zealand High Court, estimating the cost of recalling the whey protein concentrate to be about 350 million euros. At the time, Fonterra said it expected any court action would show it wasn’t liable under the contract. The recall was recognised as a $14 million contingent liability in its accounts.

In 2013, Fonterra quarantined several batches of whey protein concentrate amid fears it was contaminated with a potentially dangerous form of the clostridium bacteria. The whey protein was ultimately cleared as a false alarm. Fonterra cut deals with seven of the eight customers affected.

“We are disappointed that the arbitration tribunal did not fully recognise the terms of our supply agreement with Danone, including the agreed limitations of liability, which was the basis on which we had agreed to do business,” Fonterra chief executive Theo Spierings said in a statement. Fonterra was “reviewing the tribunal’s findings closely, but recognised that there was likely to be limited options for challenging the decision of an international arbitration.”

Fonterra had assessed the potential financial implications of the decision and made “a prudent decision to revise its forecast earnings per share range for the 2017/18 financial year to 35 to 45 cents, down from 45 to 55 cents,” the company said. The decision wouldn’t impact the company’s forecast farmgate milk price, currently at $6.75 per kilogram of milk solids.

“Fonterra is in a strong financial position and is able to meet the recall costs,” Spierings said. As at July 31, Fonterra had $3.8 billion in undrawn lines of credit and $393 million of cash.

Earlier today, Danone said it “welcomes this arbitration decision as a guarantee that the lessons from the crisis will not be forgotten.” The arbitration “underscores the merit of its legal actions against Fonterra, including to champion the highest standards of food safety across the industry,” it said. Food companies and their suppliers “can only work together through a solid relationship based on trust, transparency, and accountability. Danone will continue to build that relationship with its suppliers across the world.” Danone’s New Zealand subsidiary Danone Nutricia ceased doing business with Fonterra in the wake of the dispute.

Fonterra had its shareholders’ fund units and listed bonds halted from trading today ahead of a media conference at 3pm in Auckland.

“While there was never any risk to the public, we have learned from this experience and as a result have made improvements to our escalation, product traceability and recall processes, and incident management systems,” Spierings said. “We operate in a fast-changing and complex industry, and will always prioritise food safety and quality in our commitment to be the world’s most trusted source of dairy nutrition.”

Since Danone ended its supply contract with Fonterra, it’s sourced product from Synlait Milk and other manufacturers and bought two Kiwi dairy processing companies, Sutton Group and Gardians, with the latter providing access to milk supply from 18 farms owned by Grant Paterson of Dunedin. 

While the forecast payout has dropped, Fonterra shares gained in price:

Fonterra Shareholders Fund units gained 0.6 percent to $6.40. . . 

The award for recall costs suffered by Danone comes after the French company launched arbitration proceedings in Singapore and a legal suit in the New Zealand High Court, estimating the cost of recalling the whey protein concentrate to be about 350 million euros. At the time, Fonterra said it expected any court action would show it wasn’t liable under the contract. The recall was recognised as a $14 million contingent liability in its accounts.

Fonterra had assessed the potential financial implications of the decision and made “a prudent decision to revise its forecast earnings per share range for the 2017/18 financial year to 35 to 45 cents, down from 45 to 55 cents,” the company said. The decision wouldn’t impact the company’s forecast farmgate milk price, currently at $6.75 per kilogram of milk solids.

“In the share price you’ve seen an element of relief, albeit on low volume” said Rickey Ward, NZ equity manager at JBWere. “There’s an issue that had been overhanging the company, which could be enormously material, which has been resolved, and it doesn’t appear there’s any desire to pursue recourse on this.”

“It’s full and final, it provides clarity and therefore investors can start to analyse or take a view of the company on fundamentals now, rather than this issue that’s been lurking in the background,” Ward said. “It could have been quite stressful for them if it had been at the upper end of what some people were suggesting. The company would have been capable of addressing it, but they would have had to find a way of addressing it which might not have pleased the unitholders in the shareholders’ fund.”

The market must have been expecting worse news.

Farmers have been anticipating a drop in the farmgate milk price in the wake of price falls in several successive GlobalDairyTrade auctions. However, it’s the earnings per share forecast which has been lowered, not the farmgate milk price.


Rural round-up

November 21, 2017

Wool gains ‘dream come true’ – Sally Rae:

Watching the volume of wool growing for Lanaco’s healthcare products and seeing lambs being born from specifically bred genetics is a ‘‘dream come true’’ for Nick Davenport.

Mr Davenport is chief executive and founder of the Auckland-based company, previously known as Texus  Fibre, which specialises in fibre innovation and developing functional materials derived from wool.

Wool from sheep developed by Wanaka man Andy Ramsden, from the Dohne, Cheviot and Finn breeds, and trademarked as the Astino breed, is used in healthcare products. . . 

Family’s top two places a show first – Sally Rae:

‘‘Not a bad show’’ is how Will Gibson dryly describes his family’s record-setting feats at last week’s Canterbury A&P Show in Christchurch.The Gibson family, from Middlemarch, won the prestigious Senior Meat and Wool Cup with their yearling supreme champion Hereford bull and were runners-up with their 2-year-old Santa Gertrudis cow with calf at foot.

It was the first time in the show’s history the same exhibitor has won the top two placings and it was well-deserved recognition for a family who work hard, are passionate about their livestock and also about exhibiting at A&P shows.

The yearling bull Foulden Hill Mustang was unbeaten in his classes over the two days, both in the Hereford and all-breeds classes, and he also won the Junior Meat and Wool Cup. . . 

Alternative proteins – on the verge of  mainstream:

Alternative proteins are on the verge of becoming mainstream and ‘stealing’ growth from traditional meat products as they play a growing role in meeting consumer needs and preferences, according to a recently-released global research paper.

The report, Watch out…or they will steal your growth by agribusiness banking specialist Rabobank, examines why alternative proteins – including plant-based meat substitutes, emerging insect or algae-based products and lab-grown meat products – are starting to successfully compete for the “centre of the plate”.

Report author, Rabobank global sector strategist for Animal Protein Justin Sherrard, says it is the ‘growth’ – rather than the current market size – of alternative proteins that is of greatest significance. . . 

Predator Free farm award:

Farmers will be recognised for their part in the nationwide movement of Predator Free New Zealand when a new Predator Free Farm Award will be presented next year as part of the Ballance Farm Environment Awards.

Sponsored by Predator Free NZ Trust and the New Zealand Farm Environment Trust, the new award will acknowledge the efforts of farmers who have put in place systems to effectively manage and monitor predators including possums, rats, feral cats, ferrets, weasels and stoats.

The award will be given to farmers who have been successful in controlling predators and are likely to have wider native biodiversity and habitat enhancement programmes in place.

Chair of Predator Free NZ Trust, Sir Rob Fenwick, said “farmers manage a significant proportion of the New Zealand landscape so they are vital in the drive to make New Zealand predator free.” . . 

Beef + Lamb New Zealand extends its support of B+LNZ Genetics:

After four years of operation and a series of successful milestones, Beef + Lamb New Zealand (B+LNZ) has extended its support of wholly-owned subsidiary B+LNZ Genetics beyond its initial five-year funding programme.

B+LNZ Genetics was established in 2013 to consolidate farmer investment in New Zealand’s sheep and beef genetics research and innovation into a single entity. Its programme was forecast to generate $742m of benefits over 10 years, but that figure has since been reviewed upwards, to $947m, or $7,890 per annum per sheep and beef farm. With rising costs this helps keep farmers competitive. . . 

Butter at record $5.67 a block :

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017.

Butter prices led the way again – up 62 percent from the same time last year. Milk and cheese prices also increased (up 7.5 and 12 percent respectively) and had large contributions to the increase in food prices seen in the year to October 2017.

“Dairy products are very widely used inputs in a number of food items,” consumers price index manager Matthew Haigh said. “The effects of price rises flow on to products such as takeaway biscuits, buns, cakes and coffee, and eating out for lunch and dinner, all of which saw increases in the year to October 2017.” . . 

Global Dairy Platform announces new chairman:

Global Dairy Platform (GDP) has appointed Fonterra Chief Executive Officer, Theo Spierings, as GDP chairman, effective November 16, 2017.

Mr. Spierings says he is pleased to be taking on the role and playing a part in maximizing the contribution dairy can make to the world.

“More than ever, people are turning to dairy for nutritional security and sustainable food and every day we see the good that dairy can do. . . 

 


Rural round-up

November 3, 2017

The big dry – Waimea Water:

The 2001 drought was the most severe drought our region experienced in 60 years. Different phrases were used to describe it, including a shortage or a crisis. Early on it was ‘water fears.’ In the end, the drought stuck and it became known as the ‘Big Dry’ and it affected everyone in the region from Nelson to Richmond to Motueka to Golden Bay.

Riverbeds dried up. Saltwater threatened the bores in the lower Waimea River. Stories about the scarcity of rain appeared almost daily in newspapers. Councils met to assess the water supply risks and the rationing requirements. Green pastures were brown with no grass in sight. Dairy farm stock had to be dried off months early, with cattle and sheep sold below cost to cover lost revenue. Permitted users, including irrigators across the Waimea Plains, had been reduced to 40 percent of their allowed take.  . .

No Waimea dam: I’m out, says long-time market gardener Mark O’Connor – Cherie Sivignon:

For four generations, Mark O’Connor’s family have been on the Waimea Plains. For the past three, they’ve been growing vegetables.

But the Appleby Fresh managing director says if there’s no Waimea dam, he will consider subdividing some of the land and selling up.

“We actually had a meeting the other day and said what are we going to do if we don’t get the dam and I said: ‘I’m out of it; it’s too hard to farm without having water’,” he said. . . 

Fonterra to invest $100m in Australia after hitting full milk processing capacityFonterra sees Aus opportunities – Gerard Hutching:

Fonterra has unveiled plans to invest $100 million immediately into its Australian business in a major expansion plan.

It is also looking into the possibility of its Australian operation becoming a co-operative.

Chief executive Theo Spierings told the co-operative’s annual general meeting in Hawera on Thursday that Fonterra’s reputation had climbed from 9th to 5th in the RepZ survey and had “changed the minds of 1.5 million New Zealanders.” . . 

We’ve got the bull by the udder – John King:

Here’s a quiz for morning smoko. According to modern grazing practice, where’s best on the curve in the illustration for the following:

  • · Maximum livestock growth?
  • · Maximum pasture longevity?
  • · Maximum soil development and structure?

Many farmers and all agricultural professionals will know where’s best for growing livestock, a few less will know where’s best for pasture longevity, and most wouldn’t even consider where’s best for soil, let alone there might be two places. That’s due to the prevailing culture and training railroading what we believe is normal – focusing on single goals.John King

Farmer Fast Five – Richard Power – Claire Inkson:

The Farmers Fast Five : Where we ask a farmer five quick questions about farming, and what agriculture means to them. Today we talk to Hawarden Proud Farmer Richard Power, who with his wife Mez, won the Romney section of this years Ewe Hogget Competition.

How long have you been farmer?

I am a third generation farmer.  I was bought up on our stud sheep and beef farm where from a young age was taught how to handle and judge stock.  After a stint at Lincoln I went lamb drafting for 5 years.  Travelling around so many different farms gave me a great insight into different breeds and ways of farming.  I carried on drafting for another 3 years after taking on the home farm with my wife in 1990 and changing to a commercial operation.

What sort of Farming are you involved in?

We are involved in a traditional dryland sheep/beef and crop operation, concentrating on early lamb production. All our lambs are gone by Christmas, and what doesn’t go prime is sold store.  On a normal season the split would be 80% sheep and the beef/crop sharing 10% each.  Beef cattle of any type are traded from Autumn to Spring and Barley is grown for a local farmer. . . 

Major deer shed upgrade underway:

Most deer farmers are upgrading their deer sheds so that velvet is harvested, handled, stored and transported in a clean environment.John Tacon, quality assurance manager for Deer Industry NZ (DINZ), says the regulatory bottom line is that all sheds must have a “clean zone” – a designated area where velvet antler is removed, handled and frozen. In this zone, all contact surfaces must be washable and clean prior to velvet removal and handling. 

“As soon as practicable after harvesting, but within 2 hours, velvet also needs to be placed in a velvet-only freezer capable of freezing to at least minus 15 deg C.” 

At some time in the future he expects standards could well be “ramped up, but it’s a good starting point”. . . 

Autumn – Ben Eagle:

 Today I began the first of what will be many bramble bashing (or should that be obliterating) sessions throughout the autumn/winter as I try to get on top of the scrub encroaching on some of the farm’s stewardship plots. The sky seemed to be missing today, a great grey and white canvas only intermittently marked by the odd passing pheasant or pigeon, the former unable to get much lift to make sufficient impact upon the bleak sky as I looked upward and across. Pheasants annoy me, with their loud cackling call, their pompous plumage and their inability to fly properly, but I know I shouldn’t hold it against them. As I write this post now I hear them outside. Something has spooked them and they are calling out, confused and terrified of the world. Who can blame them I suppose when you primary reason for existing so far as human kind is concerned is to be shot. . . 


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