Rural round-up

April 5, 2018

Feds welcomes NAIT recommendations:

Federated Farmers says its members will jump at the chance to contribute to the drive for improvements to the National Animal Identification and Tracing (NAIT) scheme.

A report detailing a major review of NAIT, with 38 recommendations aimed at streamlining processes and boosting access and compliance, was released today after a long process involving OSPRI, MPI and a host of industry groups including Federated Farmers. . . 

Organic produce sitting pretty in a tasty $90 billion global market – Neil Hodgson:

The perception of organic fruit and vegetables is often of misshapen produce that doesn’t look very appetising, and it is fair comment.

However, the reality is many of those perfect looking fruits and vegetables have a beautiful appearance because producers use synthetic products to treat various bugs and diseases.

If you grow your own produce at home, then chances are they won’t look as perfect as the goods piled high on the supermarket or general food store shelves because chances are you don’t use too many synthetics in your garden at home.

You might use a bug spray and you probably add fertilisers and that is about it. . . 

Unusually, farmers and meat processors doing well at the same time. Beef prices slip. Deer prices get boost from pet food market – Guy Trafford:

SHEEP
Since allowing Shanghai Maling to purchase 50% of Silver Fern Farms (SFF) the meat company has had a significant turn around of fortune. For the twelve months from the $261 mln injection from Shanghai Maling, SFF has paid of $203 mln worth of debt and has managed to achieve a $15.4 mln after tax profit.

In the past it has often been a toss up between farmers and processors as to whom makes the profit. Rarely is it both. . . 

International acclaim for Whitestone:

Whitestone Cheese Co. is riding a wave of international critical acclaim after recent achievements at the world’s biggest cheese competition in Wisconsin USA and a trophy from the New Zealand Champions of Cheese Awards.

At Wisconsin, Ohau Goat’s Blue achieved the highest accolade with 4th place in its category with a near perfect 99.7 out of a 100 – an incredible result and just 0.1 points off the bronze medal. Ohau Goat’s Blue is a new addition to Whitestone’s Premium Black Label range. The goat milk comes from a Washdyke farm just north of Whitestone’s Oamaru cheese factory, and the cheese is made with Whitestone’s Windsor Blue culture. . . 

Samantha is a cut above the rest – Robyn Bristow:

The knives were out last week as Samantha Weller, from New World Rangiora, trimmed her way to the title of World Champion Apprentice Butcher.

The 23-year-old travelled to Belfast, Northern Ireland, with New Zealand’s butchery team, the Pure South Sharp Blacks, to compete in the cutting test.

She competed against 10 others from five countries, who had two hours to turn a beef rump on the bone, a side of lamb, and a loin of pork belly into a display of value-added cuts – much like that seen in a butcher shop or supermarket. . . 

Seeka  sells out of Zespri after opposing changes to constitution tying shares to trays – Jonathan Underhill:

(BusinessDesk) – Seeka, New Zealand’s biggest kiwifruit grower, has sold out of Zespri Group after opposing constitutional changes at the monopoly export body that tie shareholdings to trays of fruit produced.

The changes were approved by more than 75 percent of shareholders last month but among the resolutions was that shareholders who voted all their shares against the overhaul could require Zespri to buy back their shares. . . 

OIO signs off on Icebreaker sale to US clothing giant VF Corp – Sophie Boot:

Icebreaker Holdings has been sold to US-based VF Corporation for at least $100 million after the Overseas Investment Office approved the deal.

In a media release today, North Carolina-based VF Corp said the OIO signed off on the transaction, which completed the transaction. The acquisition “is an ideal complement to VF’s Smartwool brand, which also features merino wool in its clothing and accessories. Together, the Smartwool and Icebreaker brands will position VF as a global leader in the merino wool and natural fibre categories.” The brand is expected to be immediately accretive to VF’s earnings per share, it said. . . 

Kiwi apple remains ‘Envy’ of others in USA:

American’s have once again selected New Zealand-born Envy™ apple as their favourite in a consumer competition run by the US Apple Association.

The interactive tournament-style competition called on American apple fans to vote for their favourite from 16 different apple varieties during the month of March.

Kiwi grower, T&G Global, was well represented in the competition with three of its premium apples namely JAZZ™, Envy™ and Pacific Rose™ being voted on by apple-lovers. . . 

Berry orchard sale offers horticultural operators a sweet growth opportunity:

One of the North Island’s most diverse boutique orchards –encompassing blueberry, raspberry and avocado production operations – has been placed on the market for sale.

Tomo Orchard at Pukenui near Houhora in the Far North, is an intensive 6.2 hectare horticultural venture growing blueberries under some 10,000 square metres of fully-enclosed framed canopies and 8000 square metres of covered netting. . . 


NZ loses its way

November 22, 2017

For several years, New Zealand has received international attention and praise for its economic success.

Just a few weeks with a new government this commentary from Jared Dillian at Forbes is less than enthusiastic about its policies:

On September 23, the people of New Zealand elected 37-year-old Jacinda Ardern as prime minister, the youngest prime minister in New Zealand’s history. Ardern has brought youthful energy to New Zealand politics, but her scary rhetoric during the campaign (like calling capitalism a “blatant failure”) has some people wondering if she will take the country back to the bad old days of the 70s and early 80s.

New Zealand is a supply-side economic miracle. Not long ago, it was one of the most unfree economies that was not actually Communist in name. Most industry was nationalized, from telecommunications and transportation, to banks and hotels. There were strict capital controls and prohibitions on owning foreign assets. And of course punitively high tax rates, inflation, and extraordinary levels of government debt. . .

Those policies from the early 80s back are the ones which failed us.

The 1980s saw an enormous rollback in the size and scope of government, and the beginning of a supply-side revolution. Of course, economic liberalization was happening around the world at that time, but it was most dramatic in tiny New Zealand.

New Zealand enjoyed unprecedented economic growth, and leapfrogged to near the top of the economic freedom rankings, where it usually sits only behind Hong Kong and Singapore. It became one of the richest countries in the world. Part of New Zealand’s success was due to good central banking; the Reserve Bank of New Zealand was the first central bank in the world to institute a formal policy of inflation targeting, which other central banks have copied over the years, to everyone’s benefit. . . 

Inflation is theft. It steals the real value of money and it’s the poorest who are hit hardest by it.

It seems likely that New Zealand will experience a recession during Ardern’s term. Nobody is predicting a return to the bad old days of the 70s, but New Zealand will probably lose its status as one of the most open, free economies in the world. It takes decades to weaken an economy, just like it takes decades to strengthen it. But investors will probably want to avoid New Zealand for the time being.

This government has taken down the welcome sign to immigrants and inwards investment.

Richard Harman at Politik reports the Government is to put the approval of overseas purchases of farmland on hold as it gets advice from officials on how to carry out its coalition agreement with NZ First to strengthen the Overseas Investment Act.

The hold is likely to affect tens of millions of dollars of property sales and possibly hundreds of millions of dollars worth of business transactions.

POLITIK understands that the sale of one large South Island property and the potential sale of an iconic Wanaka station along with two large North Island dairy properties are likely to be caught up in the move.

It was not clear from the comments from Prime Minister Jacinda Ardern yesterday whether the hold will also apply to overseas business investments – but if that is the case, there are proposed takeovers in both the oil and gas and private hospital sectors that could be affected. . . 

The sale of Icebreaker  to VF Corporation which needs OIO approval as will the sale of carpet maker Godfrey Hirst to global flooring manufacturer Mohawk Industries.

Uncertainty over the economy, the inflationary affect of a lower dollar and higher borrowing, and whether immigrants will be available to fill staff vacancies is denting business confidence.

Less confidence means businesses are less willing to take risks, including hiring more staff.

It’s very early days but if overseas investors are being warned off and local businesses are losing confidence, it’s a sign that New Zealand is losing its way.

 


Rural round-up

November 12, 2017

Westland Looks to Take Its Wastewater Out of the Hokitika River:

Westland Milk Products said today it is well down the path toward potentially taking its treated wastewater discharge out of the Hokitika River.

CEO Toni Brendish says that in September last year Westland re-opened its investigations into an ocean outfall for its treated wastewater discharge, which would take it out of the Hokitika River two years prior to the existing in-river discharge consent expiring in 2021. A final decision on whether to go with the option will be made early in 2018. The investigations are at the stage that the company is about to go back to the West Coast Regional Council for a minor variation to its existing permit. . . 

Challenging future facing livestock farming – Nigel Malthus:

The disruptive forces facing New Zealand agriculture could mean a tough future for livestock farming, says the new president of the New Zealand Institute of Primary Industry Management (NZIPIM).

Farm consultant Craig Osborne, from Oxford, North Canterbury, has been named to replace Guy Blundell, heading the institute for the next two-year term.

Osborne says that where NZ farming is heading is the “million-dollar question” and a tough one to answer because of all the competing forces gaining momentum globally. . .

WTO declines Indonesia appeal on ruling over trade barriers that hurt NZ beef trade –  Jonathan Underhill

(BusinessDesk) – The World Trade Organization has turned down Indonesia’s appeal against a ruling that trade barriers imposed since 2011, which hurt New Zealand’s beef exports, were inconsistent with global trade rules.

New Zealand had invoked WTO dispute settlement consultations with Indonesia in 2013 and 2014 over 18 trade barriers it said had resulted in an 80 percent drop in the nation’s exports to Indonesia of beef and horticultural products such as apples and onions. Prior to the restrictions, Indonesia was New Zealand’s second-largest market for beef, worth $180 million a year, and the accumulated trade impact was an estimated $500 million to $1 billion, according to the complaint. . . 

Icebreaker inks $100M 10-year supply contract for NZ merino wool – Tina Morrison:

(BusinessDesk) – Merino outdoor clothing company Icebreaker has signed the longest ever supply contract with growers of New Zealand merino wool, worth $100 million over 10 years.

The Auckland-based company, which announced this week that it is being bought by US-based VF Corporation, has inked agreements with New Zealand woolgrowers in collaboration with wool marketer The New Zealand Merino Company to ensure it has long-term supply of the fibre. Pricing will be at a premium to market prices to recognise long-term grower loyalty and to enable Icebreaker to use farm imagery and storytelling in its global marketing campaigns, Icebreaker said in a statement. . . 

Fencing best practice showcased – Sally Brooker:

Fencing industry folk from a large part of the South Island converged on a North Otago landmark on October 25.

The Fencing Contractors Association New Zealand ran a demonstration day at Parkside Quarries, the place where Oamaru stone is hewn from the hills.

More than 50 people attended – a mix of fencing contractors and practitioners, suppliers, and industry partners.

Motueka-based fencer and tutor John Noakes said the event showcased fencing best practice – both traditional and modern techniques. . . 

NZ  company Fifth Breath launches woollen yoga mat – Brittany Pickett:

It all started with the idea that traditional yoga mats didn’t align with yogi principles and now Fifth Breath has launched the first yoga mat made from wool.

Co-founders of the New Zealand company Dana McKenzie and Irina Arya have spent the last year working to develop the mat’s design and key technology elements, with the aim to retain the functionality expected by yoga followers.

Both of them are engineers by training and met during studying for a masters in business administration at the IMD Business School in Lausanne, Switzerland in 2008. Since then, they have both enjoyed corporate careers and growing families, yet a passion for wool and yoga prompted them to build Fifth Breath Ltd, a company with an ethos about offering naturally safe yoga mats. . . 


Will Icebreaker VF deal get OIO tick?

November 4, 2017

Icebreaker, one of the company’s that made merino fashionable, is selling to a USA company  but the deal needs OIO approval:

US-based VF Corporation needs Overseas investment office approval to buy Kiwi merino clothing maker Icebreaker, meaning the deal is worth at least $100 million. The terms of the deal were not disclosed.

Merino producers have been getting a lot of pressure to sign up to 10-year contracts with Icebreaker. The proposed sale explains that and a good number of committed producers would have made the deal more attractive to the buyer.

VF Corporation has a market capitalization of around US$28 billion and its portfolio includes The North Face, Timberland, SmartWool, Vans, Wrangler and Lee. In its third-quarter result, the company forecast its 2017 revenue would be approximately US$12.1 billion.

Icebreaker had annual sales of $220 million, of which 86 percent were in offshore markets. Its own outlets and e-commerce sales make up 32 percent of sales, according to the company’s latest statement.

While the terms of the deal were not disclosed, Icebreaker confirmed the need for OIO approval due to the size of the transaction, implying a minimum value of at least $100 million. In a separate statement, VF said “the purchase price is not material to VF.” It also clarified that it expects the transaction to close in April 2018. . . 

I would think the deal would be worth considerably more than $100 million. Regardless of how much more, closure by next April is probably very optimistic.

Friends who have had dealings with the OIO, as sellers and buyers, said it was a very time-consuming process.

Unless it gets a straight decline from the outset, it won’t be any faster under the new government.

According to Icebreaker, the deal creates an expanded opportunity for the New Zealand merino industry. “This is a once in a lifetime opportunity for our global Icebreaker team and for our New Zealand wool suppliers to introduce a whole new universe of consumers to the benefits of sustainably farmed, ethically sourced, New Zealand Merino wool,” said Icebreaker founder Jeremy Moon.

John Brakenridge, CEO of the NZ Merino Company, noted VF have also had a long-term commitment to the New Zealand Merino industry through their investment in SmartWool and NZ Merino has worked with SmartWool in areas such as sustainability and social responsibility.

“Today we are seeing record demand and prices for New Zealand merino wool …the synergy of these two brands working as sisters from the same stable to build increased awareness of the Merino apparel category represents an exciting new development for the New Zealand merino wool industry,” he said. . . 

People tend to be less opposed to selling land to foreigners than selling companies.

But no matter who owns it the land and the business carried out on it stay here.

When a company is sold, there is no guarantee anything will stay in New Zealand.

Icebreaker is a New Zealand company and its clothing is designed here using locally grown merino wool but manufacturing has been done overseas for several years.

If the sale does go ahead, people who want New Zealand made merino will still have the choice of buying from companies like Glowing Sky and Mons Royale.

 


Rural round-up

May 9, 2016

Women motivate NZ dairy industry’s survival – Kelsey Wilkie:

Stress, money management and solidarity were the themes of a women in dairy conference. Kelsey Wilkie reports.

Hundreds of women dairy workers came together to talk milk prices, cash cows and rugby in Waikato this week.

The Dairy Women’s Network event at Claudelands Event Centre in Hamilton  attracted 340 women keen to to discuss farming issues in the wake of a devastating downturn in milk prices..

Fonterra’s forecasted payout has fallen from $5.25 a kilogram of milksolids down to $3.90/kg. . . 

From wet feet to wool sock success – Sally Rae:

It all began with cold, wet feet.

American couple Peter and Patty Duke were long-time ski instructors before embarking on a business career which has resulted in their launching outdoor apparel brand SmartWool.

The company, based in Steamboat Springs, Colorado, was later sold to Timberland and is now a wholly owned subsidiary of the VF Corporation, which owns other well-known brands such as Wrangler, The North Face and Lee.

After a break away from the industry, the apparel entrepreneurs got back into business, continuing their passion for merino wool with their woollen sock company, Point6. . .

Landcorp/NZM ink carpet deal:

Landcorp and The New Zealand Merino Company (NZM) have signed a contract to supply wool to Australia’s most exclusive carpet manufacturer.

The agreement with Prestige Carpets will see 120 tonnes of wool sent to Australia through their New Zealand-based supply chain.

Prestige uses pure New Zealand wool and a cutting-edge tufted construction method to create carpets targeted at Australia’s leading designers and architects. . . 

Objects of the exercise:

They are the unsung heroes of the Golden Shears World Shearing and Wool Handling Championships.

Millers Flat farmer Trevor Peters is supplying more than 2000 Romney sheep for the event which is being held in Invercargill in February.

The sheep would present the world-class shearers with a good challenge, Mr Peters said.

The Peters family farms six properties: Spylaw, at Dunrobin, Bullock Range, at Moa Flat, Clutha Downs, at Beaumont, Attadale Station, at Middlemarch, Teviot Valley Station, at Millers Flat, and a finishing farm at Waikaka. . . 

Farming difficult but not all gloom and doom – Steve Wyn-Harris:

There is an increasingly growing level of anxiety in this part of the world as the dry conditions reduce options for building up some feed covers as we head in towards winter.

If we don’t get proper rain in these last two or three weeks of May then we can, at best, expect 10kg DM/ha/day or a total of 600kg DM/ha for June and July, which for most is about maintenance.

So early August feed covers are going to be around end of May covers and for many this will be too short for lambing and calving. . .

Old-fashioned farming and good old-fashioned common sense – Peter Burke:

The name Johnstone has been synonymous with breeding bulls in the Whanganui district for at least 90 years.

There are now five generations of Lindsay Johnstones: the latest one is Lindsay – call him Lindsay the fifth.

Back in 1925 Lindsay’s grandfather started off by developing a herd of Herefords. He managed to breed some pure white Herefords and, remarkably, Lindsay has kept that tradition going and has 25 of these animals on his property; more in memory of his grandfather than for commercial gain. . .

Feijoa-geddon could be coming to New Plymouth – Jermey Wilkinson:

Peter Peckham has collected bugs of all kinds for nearly 80 years and had never seen a guava moth until last month.

The New Plymouth man said he was in the shower when he saw the Pacific Island guava moth and rushed to get his bug net to capture it.

“They have quite a distinctive flight pattern, they fly quite slowly unlike other moths,” he said.  . .

 


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