Rural round-up

February 1, 2020

Dairy debt and declining values create an equity pincer – Keith Woodford:

Some weeks back I wrote how the market value of dairy land is declining substantially. The biggest factor is a change in bank-lending policies such that local buyers cannot get funding. The second key factor is that foreign buyers can no longer buy land for dairy farming. A third factor is pessimism about the long-term future relating to environmental issues and labour availability.

The consequence of these factors is that although many dairy farmers would like to sell, there are very few buyers. This is despite three years of good dairy prices and now a fourth good year heading into the home straight with nearly all farmers making operating profits.

In this article, I build on that situation to explore the proportion of farmers who, with declining asset values, have either exhausted or are close to exhausting their previous equity. . . 

New levy to hit farmers – Peter Burke:

The New Zealand Agricultural Aviation Association (NZAAA) is up in arms about a proposed new safety levy.

They say it unfairly targets the ag sector and will lead to increased costs of spreading fertiliser and spraying crops. NZAAA chairman Tony Michelle says his organisation is happy to pay levies set by the Civil Aviation Authority (CAA). However, he believes the new proposals are almost double the present ones and says there is a huge inconsistency in the way these would be applied.

Some operators believe the ag sector is seen as a soft target by the CAA, because it assumes the new charges will just be passed on to farmers.

Fonterra’s Te Awamutu site moves to pellet power:

Fonterra is taking another step forward in its commitment to renewable energy as it announces that its Te Awamutu site will be coal free next season. 

Until now the site has used a combination of fuels to process milk – including coal.  This latest move, follows a trial last year and means it will switch from using coal at the end of this season, starting the 2020/21 season powering the boiler with wood pellets. 

Fonterra’s Sustainable Energy and Utility Manager Linda Thompson says it’s an exciting step for the Co-operative and, in particular, the Te Awamutu team. . .

China overtakes the US as top beef market:

China overtook the United States as the biggest market for New Zealand beef exports in 2019, Stats NZ said today. 

In the year ended December 2019, beef exports to China rose $880 million (112 percent) from 2018 to reach $1.7 billion. In contrast, beef exports to the US fell $245 million (20 percent) to $956 million.

“China became the number one destination for beef exports from New Zealand in 2019,” international statistics manager Darren Allan said. . . 

LIC half-year revenue up as farmers invest in ‘precision farming‘:

Performance Highlights H1 2019-20:

$163 million total revenue, up 1.4% from $161 million in the same period last year.

$30.3 million net profit after tax (NPAT), down 7.6% from $32.8 million in the same period last year.
$58.4 million earnings before interest, tax, depreciation and amortisation (EBITDA), down 1.5%.
$43.1 million earnings before interest and tax (EBIT), down 6.5%.
Underlying earnings (NPAT excl bull valuation change)* range remains forecast to be $21-25 million for year-end, up from $19.5 million in 2018-19. . . 

Farm Debt Mediation Scheme – next steps:

The Ministry for Primary Industries (MPI) is taking steps to establish the new Farm Debt Mediation Scheme, which will begin operating on 1 July 2020.

From next week MPI will be able to consider applications from mediation organisations wanting to take part in this scheme.

“We’ve already heard from leading mediation organisations that are interested in participating. If an organisation is approved, they will then make sure their mediators are trained for the new scheme,” says Karen Adair, MPI’s deputy director-general of Agriculture and Investment Services.

The Farm Debt Mediation Act became law on 13 December 2019 and brings a new approach to farm debt mediation. . . 


Rural round-up

July 31, 2019

Levies are killing farming – Annette Scott:

Levies are killing farming as changes to the Biosecurity Act and Nait set to be another nail in the coffin, Federated Farmers dairy chairman Chris Lewis says.

The Government is fixing the Biosecurity Act and the National Animal Identification and Tracing (Nait) Act to ensure they meet future needs, Agriculture and Biosecurity Minister Damien O’Connor said.

Implementing the programme for Mycoplasma bovis exposed the clunkiness of the outdated Biosecurity Act and lessons must be learned from the M bovis experience to formulate a law that’s more flexible and appropriate. . . .

Organic finds whisky farmers – Neal Wallace:

The Styx Valley is in a remote southern corner of the Maniototo basin in Central Otago where the seasons can be harsh. But that isn’t stopping John and Susan Elliot from running an innovative whisky distillery alongside their farm. Neal Wallace visits Lammermoor Station.

The story of Andrew Elliot discovering a copper whisky still on his Central Otago station early last century is family folk lore that resonates with John and Susan Elliot.

It is a link to the latter part of the 1800s when the Otago hills, rivers and valleys were crawling with gold prospectors, swaggers and opportunists. . . .

Guy’s pragmatism appreciated by Federated Farmers:

Farmers regarded Nathan Guy as a pragmatic and knowledgeable Minister for Primary Industries.    

The MP for Otaki, who among other roles served two years as Associate Minister of Primary Industries and four as Minister in the John Key-led government, has announced he will not seek re-election in 2020.

“His door was always open, and he was always level-headed and considered in his dealings with people,” Federated Farmers president Katie Milne said. 

“He had his finger firmly on the rural pulse and I always appreciated that you could have free and frank discussions with him, including occasionally by phone when he was out helping weigh and drench calves.  He has real empathy for the sector and for the wellbeing of rural communities.” . .

IrrigationNZ thanks Nathan Guy for his work in parliament congratulates Tood Muller:

IrrigationNZ wishes to thank Hon Nathan Guy for his contribution to the primary sector as he announces his retirement from 15 years in Parliament with a departure from politics next year.

Following news of Nathan’s decision, the National Party today announced that Todd Muller, Member of Parliament for the Bay of Plenty, will be picking up the Agriculture, Biosecurity and Food Safety portfolios from Hon Nathan Guy. IrrigationNZ would like to congratulate Todd on this new role. IrrigationNZ also notes that Hon Scott Simpson, Member of Parliament for Coromandel, who leads the Environment portfolio for National, will take on Climate Change from Todd, which IrrigationNZ recognises as a sensible and good fit. . .

Grasslands brings science and practice together:

Linking science and technology with grassroots farming and production has been the key to the success of the Grassland Society.

The Grassland Society of Southern Australia has come a long way in the 60 years since a small group of farmers banded together in 1959 to help producers get the best out of their land.

Celebrating its 60th anniversary, the Society assists farmers across three states to create better soils and pastures. . . .

Agricultural aviation celebrates 70th anniversary:

“In September 1949, a group of aerial work operators got together to form the NZ Aerial Work Operators Association ‘to advance the techniques of aerial work’ in the country,” said the New Zealand Agricultural Aviation Association (NZAAA) Chairman, Tony Michelle.

“We celebrate the achievements of those early companies and pilots at an agricultural aviation show at Ardmore Airport on Sunday 4 August, from 12 midday to 4pm. Many examples of aircraft that have worked in agricultural aviation will be on display. It also gives people a chance to mingle with many of the older pilots from those early days, as well as those safely flying our skies today. . .

Mercurey NZ Young Winemaker of the Year 2019 kicks off this week

Now in its fifth year the first of the regional finals will be held this week as the countdown begins to find the Tonnellerie de Mercurey NZ Young Winemaker of the Year 2019.

This year there will be three regional finals and the winner from each will go through to represent their region in the National Final.

The North Island regional competition will be held on Thursday 1st August at EIT in Hawke’s Bay and is open to all emerging young winemakers in the North Island. . .

Brexit: Michael Gove admits farmers may never recover from no-deal – Paris Gourtsoyanis:

A no-deal Brexit would seriously harm the UK’s farmers, Michael Gove has admitted.

The Environment Secretary told the National Farmer’s Union (NFU) conference that there was “no absolute guarantee” that British farmers could export any of their produce to the EU in a no-deal scenario, and would face punishing tariffs even if they could.

Mr Gove also dismissed speculation that the UK Government could slash tariffs on food imports after Brexit, an idea hinted at by International Trade Secretary Liam Fox. . .


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