Quote of the day

August 25, 2015

“What we’re trying to do is create options for New Zealand over the next 20 years so we never recreate the same dependency that we used to have 40 years ago, which was [on] Britain,” he said. “Southeast Asia, for us, is frankly our number one insurance policy if things go the wrong way in China.” –  Tim Groser


Rural round-up

August 2, 2015

Groser disappointed TPP deal not reached:

Trade Minister Tim Groser is disappointed that the TPP negotiations were unable to reach a conclusion today, but TPP ministers collectively pledged to meet again as soon as possible to finalise the deal.

“Good progress was made this week, but a number of challenging issues remain, including intellectual property and market access for dairy products”, Mr Groser said.

“We will continue to work toward a successful conclusion. This is about getting the best possible deal for New Zealand, not a deal at any cost.” . . .

TPP pressure on Canada, but US is super-star in agriculture subsidies – Lawrence Herman:

Americans provide billions in protectionism to dairy that will have to be given up for trade deal.

We rail against Canada’s supply management system. Rightly so. It’s a Soviet-style regime that is out of step with Canada’s international trade interests and objectives. Every credible Canadian think-tank has said that supply management is a regressive system that distorts the market by guaranteeing dairy, poultry and egg producers a positive return on production, inhibiting competitiveness and, in the long-run, preventing Canada from becoming an exporting agriculture powerhouse. . .

 Groser proves trade credentials by insisting on a good deal:

The Dairy Companies Association of New Zealand (DCANZ) is commending New Zealand Trade Minister, Tim Groser, for standing firm against enormous pressure to concede to a sub-standard deal for dairy. The Minister and his team of expert negotiators have preserved the ability to conclude a good deal in the future.

“What was on the table fell well short of the deal required to deliver the commercially meaningful access that is needed by New Zealand’s dairy industry” says DCANZ Chairman Malcolm Bailey, who has been in Maui, Hawaii, where the negotiations took place over the past week.

Agreeing a bad deal would have consigned New Zealand farmers to many more years under the burden of heavy protectionism. Trade prohibitive tariff levels in Japan, Canada and the United States contribute to a thin global dairy market and exacerbate extreme price volatility. . .

 Concerns over strong El Niño:

NIWA fears this year’s El Nino may be as bad as 18 years ago, when widespread drought cost the country a billion dollars in lost exports.

International guidelines indicated a 97 percent chance of El Niño continuing over the next three months and a 90 per cent chance it will continue over summer.

El Niño typically sees the west of New Zealand wet, and the east very dry.

Niwa forecaster Chris Brandolino said it was looking like it could be as significant as the El Nino in the nineties. . .

Where every day is a good day – Kate Taylor:

Discussion groups, monitor farm programmes, running a Gisborne hill country station and his house burning down couldn’t prepare farmer Ken Shaw for being given a 15 per cent chance of surviving the cancer attacking his body. But survive he did.

“Every day’s a good day,” he says, driving his bike in driving, freezing cold rain on his Matawai farm the day before a big snow storm hits the region and dumps a metre of snow on tops of his hills.

Ken and Kirsty Shaw farm the 709ha hectare Elmore Station (680ha effective) on Rakauroa Road at Matawai near the highest point of the highway between Gisborne and Opotiki. . .

Cut unprofitable production – DairyNZ CEO:

With the continued decline in milk price, DairyNZ chief executive Tim Mackle is calling on farmers to cut unprofitable production from their systems.

“These are extraordinary times. Open Country Dairy’s milk price forecast is under $4 per kilogram of milksolids (kg MS) and all indicators show Fonterra will be forced to lower their forecast on August 7. This price dip is lower and longer than anything we’ve seen in the last decade,” says Tim.

“Assuming a milk price of $4.00 for the average Open Country Dairy supplier, that means a potential deficit of around $250,000 for the year ahead.” . . .

Rural Women as relevant today:

In 90 years, Rural Women New Zealand has grown to a 2700-strong organisation but many of the issues it works on have remained the same.

In July 1925, Florence Polson became the first head of the women’s division of the forerunner of Federated Farmers.

Women’s Division Farmers Union was driven by concerns about health and the effects of isolation for women living on farms. . .

 


More ambitious climate change targets

July 8, 2015

New Zealand will commit to a new, more ambitious climate change target, Climate Change Issues Minister Tim Groser announced:

“This target is to reduce our greenhouse gas emissions to 30 per cent below 2005 levels by 2030,” Mr Groser said. “This is a significant increase on our current target of five per cent below 1990 emission levels by 2020.”

New Zealand will submit the target to the United Nations Framework Convention on Climate Change. All countries are expected to table targets as part of work towards a new climate change agreement, due to be concluded in Paris in December.

“While New Zealand’s emissions are small on a global scale, we are keen to make a fair and ambitious contribution to the international effort to reduce greenhouse gas emissions and avoid the most harmful effects of climate change,” Mr Groser said.

“Almost 80% of our electricity is renewable already, and around half our emissions come from producing food for which there aren’t yet cost-effective technologies to reduce emissions. So there are fewer opportunities for New Zealand to reduce its emissions right now.

Those who think New Zealand isn’t doing enough forget that we’re already doing quite a bit.

Some of that is because there aren’t many of us and we don’t have a lot of heavy industry but do have a natural advantage in generating renewable energy

It’s also important t take a global perspective and acknowledge that although farming contributes a high percentage of our emissions, most of what we produce goes to other countries few if any convert grass to protein as efficiently as we do.

“However, I’m optimistic about the future – our investment in agricultural research is beginning to bear fruit and the cost of electric and plug-in hybrid vehicles continues to fall. I think in 5-10 years we’ll be in a good position to reduce our emissions in both agriculture and transport.

“In setting the new target, the Government needed to ensure it was achievable and to avoid imposing unfair costs on any particular sector or group of people. . .

“New Zealand’s target is equivalent to a reduction of 11 per cent below our 1990 emission levels by 2030. Our target is expressed against 2005 emission levels similar to the approach of other significant players including the United States and Canada,” Mr Groser said.

“The target will remain provisional until we ratify the new international agreement. The detailed rules and guidelines for national reduction targets are likely to be set after the Paris meeting. These will cover matters such as the rules on accounting for the land sector, and ensuring international carbon markets meet high standards of environmental integrity.”

“The Government will adopt an appropriate mix of policies to ensure the target is met. In particular, we will begin a review of the Emissions Trading Scheme this year, which will include scope for further public discussion on what New Zealand will do domestically.” Mr Groser said.

Federated Farmers says the new target is an ambitious one:

Federated Farmers Climate Change Spokesperson Anders Crofoot says in line with the Intergovernmental Panel on Climate Change report which says reducing fossil fuel use will need to be the major focus to achieve this target. However agriculture will also play its part in development of technologies which will increase productivity whilst reducing carbon intensity of primary sector products.

“Agriculture takes its responsibilities as New Zealand and global citizens seriously and the primary sector already has an impressive track record in achieving carbon efficiency.”

“We continue to play an on-going role in meeting the world’s demand for nutrient-dense protein and finding solutions which addresses both climate change concerns and the food security dynamic.”

“To date, the amount of carbon released in producing a block of butter here in New Zealand is the lowest in the world. It is important to make sure our approach to reducing New Zealand’s emissions does not undermine our critical export industries.”

“In a resource-constrained world, it is vital to use resources efficiently and wisely. Climate change does not begin or end at New Zealand’s borders and New Zealand plays a vital world leading role as one of the most emission efficient food producers and exporters in the world.”

Beggering agriculture here would cause great harm to our economy and it would also increase emissions as less efficient producers in other countries increased production to fill the gap left by us producing less.

Anders Crofoot says New Zealand’s primary sector has made huge gains in carbon efficiency in the past three decades, through enhanced animal and plant genetics, as well as through a much greater understanding of livestock digestion and metabolism. He says our agricultural emissions intensity has declined more than 20 percent since 1990.

“Reducing emissions from biological systems such as dairy cows is not easy. That’s why since 2003, New Zealand’s agricultural sector has invested $30 million to help find solutions. AgResearch scientists have already identified five different animal-safe compounds that can reduce methane emissions from sheep and cattle by 30 to 90 percent. Further trials are needed to confirm that these compounds can reduce emissions in the long term, have no adverse effects on productivity and leave no residues in meat or milk. But all going well, we could possibly see a commercial product for use on-farm within five to ten years.”

“Continued investment will be required to develop science to reduce and treat biological agricultural emissions. This is how we can make a considerable contribution to reducing global greenhouse gas emissions by getting larger developing country emitters to adopt our technologies.”

“New Zealand is already sharing its developments and gains through the Ministry for Primary Industries and Federated Farmers Global Research Alliance World Farmers Organisation Farmer Study Tours. The aim is to increase global understanding on agricultural greenhouse gas research and engage farmers on environmental management practices that support sustainable productivity.”

Mr Crofoot concluded “The task before us now is to work on solutions built off an understanding of the strengths we have as an agricultural producer, and how best we can grow those strengths in a manner that improves emissions efficiency and farm productivity.”

Business New Zealand says the target is challenging but achievable :

. . .”Our unique profile, with unusual predominance of agricultural and transport emissions, means we must be deliberate about how we achieve reductions without harming the economy.

“Key to this will be a balanced outcome for all countries taking part in forthcoming negotiations in Paris, facilitating investment, technology development and access to markets in a way that provides New Zealand businesses with the confidence to invest in low-carbon solutions for emission reductions over the long term.”

Balance is indeed the key – balance between all countries and between environmental and economic concerns keeping in mind it is the most vulnerable people who would  pay most dearly if that balance isn’t achieved.


Trade works

July 1, 2015

Trade Minister Tim Groser’s speech on the future of global trade highlights the benefits of trade:

·         First, consider the evidence for developed countries. Of the 14 main OECD multi-country econometric studies undertaken since 2000, all 14 have concluded that trade plays an independent and positive role in raising incomes.

·         Second, the evidence for developing countries leads to exactly the same conclusion. Case studies reviewing the experience of the 12 most rapidly growing emerging economies over the past 60 years concluded that harnessing the power of the global economy was a central feature common to all and that there was what they called ‘overwhelming’ evidence that trade played an essential role in raising incomes. Sorry guys, the North Koreans got it wrong. The South Koreans got it right.

The final concluding comment of these international experts is dripping with irony. Normally, international officials don’t do irony; it takes extreme frustration to drive experts to use ironic humour. Listen to their words:

“Despite all the debate about whether openness [on trade] contributes to growth, if the issue were truly one warranting nothing but agnosticism, we should expect at least some of the estimates to be negative…The uniformly positive estimates suggest that the relevant terms of the debate by now should be about the size of the positive influence of openness on growth….rather than about whether increased levels of trade relative to GDP have a positive effect on productivity and growth”. . .

I can of course understand vested interests who oppose trade agreements. If, say, your family owns an inefficient sugar processing plant in the wrong part of the United States and which survives only because of sugar subsidies and high protection, I get it. What you need is a long time to adjust to competition, sweetened by a good dose of adjustment assistance. You may even surprise yourself by what you can do to improve your competitive position over a long period of time – I could take you to dozens of examples in this country of industries and companies which vigorously contest our first liberalisation moves in the1980s, staring with the NZ wine industry which used to be deeply protectionist and for understandable reasons. But I am zeroing-in here on the anti-trade, anti-globalisation ideologues who are present around the globe. Even in Germany, a post-war bastion of the open trading system, they have become quite recently a growing element of the political debate on trade. This will complicate the TTIP negotiation.

Here in New Zealand we have anti-trade activists who are relentlessly consistent: they have never supported a single Trade Agreement and they never will. They are politically irrelevant to my political party. However, they get an enormous amount of airplay and are not politically irrelevant to other important elements in our democracy. For reasons I explained earlier, I believe broad bipartisan support for open trade strategies is vital to avoid your country being marginalised.

There is no point in asking them to explain how on earth New Zealand could have survived, let alone prospered, without CER, without the Uruguay Round, the China FTA, the network of FTAs that New Zealand has with ASEAN countries – they opposed even the Singapore/NZ FTA, the first building block of the DNA of TPP. To paraphrase a well-known quote of our Prime Minister, are we meant to earn our living just be selling to ourselves?

There is no point in asking them to explain this, because this is not an evidence-based fight. This is about ideology and the role of markets. On a purely personal note, and going back to my political past in the late 1960s and on which I will not elaborate, I understand exactly how and why these people think like this. I recall wistfully an old political doctrinal statement ‘The final battle will be between the socialists and the ex-socialists’.

If it were just these anti-trade activists, they could be safely ignored by everyone. But their modus operandi is to give currency to concerns about policies that middle New Zealand, which is anything but ideological, cares about – and then to exaggerate those concerns out of the park.

Happily, those concerns of middle New Zealand are widely shared starting with me, my colleagues in Cabinet and Caucus and the Kiwi voters who elected us. And as I survey the likely landing zone for these issues, I am extremely confident that our negotiators, who are world class, have done an excellent job. We shall be able to defend our position.

He counters some of the scaremongering from opponents of the TPP:

So, to put it bluntly, we are not going to sign up to poorly constructed ISDS provisions that ‘transfer control of the country’s sovereignty’ to foreign corporations. We are not going to sign up to agreements that undermine a central pillar of our Public Health system – the pharmaceutical purchasing agency called Pharmac, which is used to keep the cost of medicines very affordable for middle New Zealand. We are not going to sign up to agreements that stop this or future Governments putting well-designed environmental protections in place. We are not going to sign up to provisions on ISPs that make every mother in Lower Hutt worry that the TPP electronic police are going to fly in from Houston to cart their 16 year old son off to jail for file-sharing with his girlfriend.

If and when we get TPP in place, extreme claims that the sky is going to fall in will be made, irrespective of a balanced and sober reading of the final agreed TPP texts. It will be ground hog day for Chicken Licken. I recall, for example, at the end of the Uruguay Round where I was our chief negotiator, absurd claims that the Uruguay Round TRIPs agreement would ‘destroy the Maori economy’, in spite of the fact that the vast bulk of Maori assets, today valued at $40 billion, are in the export sector with much to gain from the Uruguay Round.

That exciting new dairy export company near Taupo called Miraka, the Maori name for milk, that combines significant Maori business assets, locally available renewable geothermal energy and overseas capital invested in it, simply would not exist without the Uruguay Round export subsidy disciplines that allowed our dairy industry to grow against grossly unfair competition, along with the more recent FTAs that created markets and created the interest of Asian investors in investing in New Zealand’s future alongside our own people. . .

He is aiming to get the political deal done by the end of this month:

The deal is ripe for the picking politically, which does not mean it will be easy to reach up and pick nice ripe fruit without damage. I have been deeply involved in the endgame of some pretty significant international negotiations over the last few decades and sometimes it isn’t very pretty. If I told true stories of what I have seen – right up to and including fist fights and negotiators sobbing over the phone, I really don’t think people would believe me.

So please remember this: nothing is ‘too big to fail’. Nor can I be 100% sure that all twelve countries will arrive on the right page at the same time. The one thing I can say with near certainty is that in the course of the endgame, something will come out of left field that we knew about but which no-one had seen before as a deal-breaker.  . .

But I think we will get there – metaphorically, I have called it in some interviews a 7/10 probability. It is not going to be a perfect deal – there never will be a perfect deal because compromises are now required. From a New Zealand point of view, the assessment my team of negotiators, led by Dr David Walker, and I have made and conveyed to other Ministers including the Prime Minister is that there is potentially a landing zone for a good deal that will indeed shape the future of trade and investment integration in the Asia Pacific region and quite decisively.

I would be much more positive in public than this, but for the current lack of clarity on a possible landing zone for our most important export – dairy. It is not that there is nothing on the table on dairy. Nor, let me assure the deep pessimists, do I believe there is any possibility of dairy simply being ‘excluded’ simply because it is too sensitive. That of course would take New Zealand right out of TPP. The issue for us is the quality of the deal on dairy and it is nowhere near there yet.

That will change because it has to change. People have not been putting their real cards on the table until they knew they had to. And until we heard from the US Congress, they were never going to do that. It is going to be an interesting few weeks.

Ladies and gentlemen, if the negotiators representing the 12 countries involved in TPP – almost 40% of global GDP – can pull this together, it will indeed be a big deal. Andrew Robb, my Australian counterpart, calls this ‘the biggest trade deal since the Uruguay Round’. I think he is right. And if we can do it, the TPP bus will not stop finally at the Tokyo station – Japan being among the last TPP entrants. TPP will indeed shape the future integration of the region and possibly strategic thinking elsewhere.

The future for New Zealand is not to shut up shop, to be fearful of foreigners, foreign investment, even targeted migration and suspicious of all Trade Agreements – my word, it must be so depressing to be part of the anti-trade movement. We need to engage with the world. We should back ourselves. We have every reason to be optimistic about our place in the world in the first quarter of the 21st Century. Concluding a high quality TPP Agreement is part of that future.

I am old enough to remember the past when New Zealand businesses were highly subsidised, when the power and money was in the hands of the few who had import licences, when we all paid dearly through higher prices and higher taxes for inferior local goods than higher quality and lower priced alternatives from overseas.

Those who oppose free trade would have us go back to that.

Free trade is fair trade which benefits the buyer and the seller.

As a very small country needing to sell what we produce to people in other countries in order to afford what we can’t produce ourselves, we need free trade and the TPP is an important part of freer trade.

 


Rural round-up

June 23, 2015

Water presents high risk to agribusiness:

Whether it’s growing crops, generating electricity or entertaining tourists, water is a key ingredient for the success of the New Zealand economy, yet this also makes it a key risk.

PwC’s latest publication, Preserving water through collaboration that works, considers how New Zealand within a global context, has responded to water risks and the potential to improve water management in the future. New Zealand faces its own risks which differ from those in other parts of the world, and these risks, are increasing.

PwC Director and Local Government expert David Walker says, “A usable supply of water is fundamental to the New Zealand economy and permeates across all industries – and notably farming, forestry, electricity generation and public sectors. However continued effective water management is becoming more complex and costly. . .

ASB Farmshed Economics Report Cash is king for farmers

• Despite a better milk price forecast, farm cashflows will remain weak this season.

• But falling interest rates are putting cash back in farmers’ pockets.

• Meanwhile, the hot air has been let out of the NZ dollar.

Despite Fonterra’s better opening season milk price forecast, farm cashflows will still face pressure this season, according to the latest ASB Farmshed Economics Report. . .

 

TPP dairy deal ‘not at a level we would currently like’, says Key – Pattrick Smellie:

(BusinessDesk) – The Trans-Pacific Partnership trade pact does not yet include an acceptable deal on access for New Zealand’s most important exports, dairy products, with little more than a month to go before the controversial 12 nation trade deal could be concluded.

“I think the way I would describe it is there’s a deal. It’s probably not at the level that we would currently like,” said Prime Minister John Key at his post-Cabinet press conference in Wellington. He was referring to comments last week by Trade Minister Tim Groser that negotiations on dairy access to the heavily protected US, Canadian and Japanese markets had “barely started.” . . .

A2 shareholder Freedom Foods in consortium to take over milk marketer – Fiona Rotherham:

(BusinessDesk) – A2 Milk Co’s cornerstone shareholder, Freedom Foods Group, is part of a consortium with an international dairy group that’s eyeing a takeover of the dual-listed milk marketer.

Freedom Foods, which owns about 19 percent of A2 Milk with a related entity, is mulling a takeover of A2 Milk, making an indicative non-binding and conditional expression of interest to buy the shares it doesn’t already own. A deal would be contingent on the consortium, which includes an “unnamed leading international liquid dairy milk company”, undertaking due diligence. It also has a restriction on A2 Milk changing the number of shares on issue, effectively scotching a planned equity raising. . .

LIC seeks $125M debt facilities this year, targets $140M equity over decade – Jonathan Underhill:

Livestock Improvement Corp, which aims to lift annual revenue to $1 billion by 2025, says it plans to establish $125 million of debt facilities this year and is likely to require $140 million in equity capital over the next 10 years to meet its growth goals.

Details of its capital requirements are included in a presentation the bull semen and dairy genetics database manager is taking around the country to explain to its shareholders how its changing focus, with increased capital spending and new product development, is changing its financial profile. Previously it has only required seasonal debt funding, typically for three months, the presentation shows. .

Upper South Island Butchers Battle It Out:

The best young butchers in the Upper South Island have been announced following the Alto Young Butcher and Competenz Butcher Apprentice of the Year regional final on Saturday.

Rowan Lee from Peter Timbs in Bishopdale was the winner of the Alto Young Butcher category, while Matthew Clemens from New World Ilam topped the Competenz Butcher Apprentice category, both highly sought after titles. . .

 

Tractor and Machinery Association elects new President:

Mark Hamilton-Manns, New Zealand Sales Manager for John Deere, has been elected President of the Tractor and Machinery Association (TAMA).

Formerly Vice President of the organisation, he takes over from Ian Massicks, New Zealand Kubota Manager for CB Norwood Distributors, who had been President for six years.

Roger Nehoff, General Manager New Zealand Retail for Landpower New Zealand, was elected Vice-President. . .


Rural round-up

May 9, 2015

Low-Cost Pasture-Based Dairying Still Our Best Bet, Say Farm Environment Leaders:

New Zealand dairy farmers shouldn’t lose sight of their competitive advantage, say farm environment ambassadors Mark and Devon Slee, who recently returned from a study tour of the Northern Hemisphere.

In late March the Canterbury dairy farmers and National Winners of the 2014 Ballance Farm Environment Awards embarked on a 25-day trip to the United Kingdom, Netherlands and Ireland, visiting a wide range of dairy farms

Mark says a key aim of the tour, which was facilitated by the New Zealand Farm Environment Trust and supported by a range of industry groups, was to study intensive dairy farming systems in Europe and to find out how farmers were using technology to improve sustainability. . .

Pacing global changes a big ask for Fonterra – Fran O’Sullivan:

Tim Groser’s warning that the dairy sector would effectively have to guts it out during a period of low milk payouts was timely.

It’s perhaps easier said than done maybe from the perspective of a Trade Minister.

But dairy farmers are a resilient lot. They’ve been through cyclical times before.

Yet, last week’s Fonterra announcement that the co-operative has downwardly revised its 2014/2015 payout forecast back to $4.50/kg milk solids (from $4.70) was still a hard knock for those that had factored the higher track into their own financial planning.

Federated Farmers pointed out just how difficult it was for some dairy farmers with their comment that the average Canterbury dairy farmer was now facing a loss of 91c for every kilogram of milk solids that they produced. . .

ANZ Bank was most aggressive in rural rate swaps sales to farmers, ComCom says – Paul McBeth:

(BusinessDesk) – ANZ Bank New Zealand, the country’s biggest lender, was the most aggressive in pitching interest rate swaps to farmers, over which it subsequently agreed to pay $19 million in compensation, the Commerce Commission says.

General counsel competition Mary Anne Borrowdale told Parliament’s primary production select committee that of the three banks to settle with the regulator, ANZ had the most customers involved and was investigated over both the way it was able to move its margin and the break fees it charged farmers for an early release. While ANZ announced its settlement with the regulator before ASB Bank and Westpac Banking Corp, it only just made its offer to farmers yesterday. The three banks’ collective settlements totalled $24.2 million. . .

Landmark animal welfare legislation welcomed by veterinarians:

The New Zealand veterinary profession welcomes today’s landmark passage of the Animal Welfare Amendment Bill which brings greater clarity, transparency and enforceability of the country’s animal welfare laws, further strengthening New Zealand’s excellent reputation for animal welfare.

The New Zealand Veterinary Association (NZVA), which played a key role in helping to shape the Bill, says some of the key changes include the legal recognition of animal sentience, which is sensation or feeling in animals, for the first time in New Zealand law.

NZVA President Dr Steve Merchant says: “Veterinarians are at the vanguard of animal welfare advocacy and public support is behind us in the call for greater clarity on issues concerning animal welfare and increased sanctions for animal cruelty. . .

 

 High prices and volumes for avocado growers:

Avocado exporter Avoco says its growers are celebrating the end of a season where they not only got a bumper crop – but decent prices for their fruit too.

Avoco said strong end-of-season demand from Australia lifted returns for growers – to $15 per tray for large avocados and $14 per tray for smaller fruit.

Avoco director John Carroll said the company exported a record volume of fruit – 4.5 million trays, out of a total 7 million trays – and still managed to get good returns for its 700 plus growers. . .

Anchor Gives More New Zealanders an Organic Milk Choice:

Anchor is making organic milk more accessible to New Zealanders with the nationwide launch of Anchor Organic.

Fonterra Brands New Zealand Managing Director Tim Deane said that with other organic milk brands only available in certain regions or very expensive, Anchor is on a mission to make organic milk more widely available at a fair price.

“We want to put organic milk in reach of more New Zealanders. We’ve done just that through our nationwide distribution and providing Anchor Organic at an everyday price that works out at only about 20 cents extra per glass compared to our standard Anchor milk,” said Mr Deane. . .

Wool Prices Bounce:

New Zealand Wool Services International Limited’s General Manager, Mr John Dawson reports that a weaker New Zealand dollar, limited wool volumes pressuring exporters and renewed client interest, combined to lift local prices across the board.

Of the 6,350 bales on offer, 99 percent sold.

The weighted indicator for the main trading currencies was down 1.79 percent compared to the last sale on 30th April.

Mr Dawson advises that Fine Crossbred Full Fleece and longer shears were 7 to 10 percent dearer, stimulated by resurgent Chinese interest with shorter types 3 to 6 percent firmer. . .


Rural round-up

April 30, 2015

Dairy industry ‘paper’ flawed

Federated Farmers is disappointed to see Massey University supporting attempts to use academia to tarnish the dairy industry by pretending a student’s academic hypothesis is established fact.

“The paper is being discredited by the authors’ academic peers as being sloppy,” says Andrew Hoggard, Federated Farmers Dairy Chair.

“Unfortunately Joy, Death and Foote’s conclusions are drawn off assumptions, which are out in the world now and we have to rely on the intellect of its readers to see through its many untruths.”

“We support the authors’ desire to have ‘accurate reporting of real costs’ but the student’s thesis only looks at the negative externalities under very poor and inaccurate assumptions of the dairy industry while ignoring the positives. Therefore it could not possibly arrive at an accurate conclusion.” . .

 Downward revision for Westland Milk Products’ pay-out to shareholders:

The decline in international prices for milk has resulted in Westland Milk Products, New Zealand’s second biggest dairy co-operative, revising its predicted pay-out for the 2014-15 season.

Westland’s board has advised shareholders that the predicted pay-out is now $4.90 – $5.10 per kilo of milk solids (kgMS) before retentions. This is down from the previously announced range of $5 to $5.40 per kgMS.

Chief Executive Rod Quin says prices were such that a $5.20 pay-out seemed possible before the recent auctions, as buyers looked to New Zealand to secure supply ahead of the dry conditions during January and February. . .

 

Rates a balancing act of who’s going to foot the bill – Chris Lewis:

Rates are being set across the country as local government prepare their Long Term Plans (LTP) for the next three years.

These plans set out the council’s long term focus, describe the activities it intends on providing and specifies which community outcomes are to be achieved. More importantly, from the rate payer’s perspective, who is going to foot the bill for these activities?

Across the country Federated Farmers staff and elected members are busy squirrelling away on council’s plans. One of the things members don’t fully understand is where our membership money is spent. It has taken me a while to get my head around all the different activities the Federation covers and the effort that geos in to keeping 85 councils around New Zealand honest and fair for rural communities. . .

Ministers welcome scientific progress in cutting agricultural greenhouse gases:

Climate Change Issues Minister Tim Groser and Primary Industries Minister Nathan Guy have welcomed news of a breakthrough by New Zealand researchers which offers the potential to cut greenhouse gas emissions from sheep and cattle by 30 to 90 percent without cutting production.

This breakthrough in methane inhibitors was made by researchers working through the New Zealand Agricultural Greenhouse Gas Research Centre and Pastoral Greenhouse Gas Research Consortium.

“Livestock methane is New Zealand’s single largest greenhouse gas emissions source, making up 35 percent of our total emissions in 2013,” says Mr Groser. . .

Tight times force farmers to adopt new tactics – Tony Field:

Dairy New Zealand is warning farmers to prepare for tough times next season as well as this one.

It says the average farmer needs $5.40 in income per kilogram of milk solids just to cover farm working expenses and interest and rent this season. Fonterra is forecasting a payout of $4.70 per kilogram of milk solids this season.

Industry body DairyNZ says “bank balances for most dairy farmers will be heading south this winter and spring, producing some short-term but significant cashflow management challenges for farmers”. . .

Secret recipe through the seasons:

There’s a lot to be said for a fertiliser which does double duty, giving an instant boost of nitrogen to promote autumn growth, followed by the slower release of sulphur.

That’s the verdict of King Country sheep and beef farmers, George and Sue Morris who followed advice from their Ballance Agri-Nutrients representative to give PhaSedN a try.

The product is a granulated combination of SustaiN, elemental sulphur and lime. While the nitrogen offers an immediate boost to pasture, the elemental sulphur delivers a long-term supply of sulphur. It is an ideal combination where there is a high sulphur need such as sandy, peat and pumice soils or if there is high rainfall or a high risk of sulphur leaching. . .

 

 

Snapshots of US agriculture – Conversable Economist:

An extraordinary shift happened in the US agricultural sector during the last century or so. Robert A. Hoppe lays out the facts in his report “Structure and Finances of U.S. Farms: Family Farm Report,
2014 Edition,” written as Economic Information Bulletin Number 132, December 2014, for the U.S. Department of Agriculture. Indeed, when I hear arguments about how difficult (impossible?) it will be for the US workforce to adjust to the coming waves of technology, my thought quickly jump to the shift in agriculture.

For example, back around 1910, about one-third of all US workers were in agriculture (blue line, measured on the right-hand scale).  It’s now about 2%. The absolute number of jobs in agriculture declined, too, but the big change was that more than 100% of the job growth in the U.S. was in the non-agricultural sector. I haven’t researched the point, but my guess is that many people around 1910 would have viewed these changes as somewhere between  impossible and inconceivable.  . .  Hat tip: Utopia


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