Rural round-up

March 17, 2016

It’s cyclic – ‘We will survive’  – Dirk Sieling:

Dairy economist Peter Fraser cannot go unchallenged. The anti-Fonterra and dairying bias he showed during his time at the Ministry for Primary Industries continues unabated.

His simple tactic of building a case on an unsubstantiated or false premise is typical of the misguided notions that often end up in the public domain.

In his March 7 article, he quotes data from the Reserve Bank showing that dairy farmers are borrowing about $3.5 billion per year “just to stay afloat”. This is just a nonsense.

Dairy farmers may well be borrowing that amount on average over time, but it is more often than not to buy another farm, build a new cowshed or convert drystock land to dairying.

But on the premise that it is “just to stay afloat”, he builds a scenario of lots of farmers going broke and collapsing land prices, all in a downward spiral. . . 

From a farming MP to her province – Barbara Kuriger:

The dairy industry is once again headlining news this week. I acknowledge this is a tough time for farmers. You and I as farmers know that the dairy pay-out is volatile; it rises and it dips and as a result of this, it has evolved as one of the most financially enduring industries in the agricultural sector. Falling dairy prices means it may be a tight year for many, and budgets are being adapted to counter this.

There has been much emotive talk by opposition about how our Government is ‘failing the dairy industry’, because they can’t actively step into this situation and raise the dairy pay out back to $8 kilogram MS. But the Government does have in progress three incredibly gutsy pieces of legislation that will assist the dairy industry, for which the benefits to dairy are widely unreported.  . . 

Dairy farmers forget past lessons – Mark Lister:

Milk is a cyclical commodity, and prices have been low before.

he long-term outlook for the dairy sector is strong, but the immediate future is highly concerning. Global prices are down 12 per cent this year and about a third lower than a year ago.

Against that backdrop, it was unsurprising to see Fonterra reduce its milk payout forecast to $3.90 per kg of milksolids this week. Adding in the dividend from Fonterra, the total payout will be about $4.25.

This is the lowest payout since 2006/07, and with a break-even price of about $5.30, the majority of farmers will suffer a second year of operating losses. . . 

Controlling dairy farm cost of production – Keith Woodford:

The key dairy priority at the moment, which stands above all else, is to minimise the number of New Zealand dairy farmers who will succumb to the current downturn. In particular, we all need to try and limit the damage to the latest generation of younger farmers who are often the most indebted.

It is all about getting the cost of production under control.

I have previously written about survival strategies and the need for each farm and farmer to chart his or her own path. I have also tried to caution against panicking and making big system changes when in a crisis. More particularly, I have tried to emphasise that hungry cows always kick their owners in the back pocket. Also, I regularly try and remind people that cost of production has both a numerator (which is cost) and a denominator (which is production). . . 

Irrigation funding boost for Wairarapa, Hawke’s Bay and Gisborne:

Primary Industries Minister Nathan Guy has welcomed three new investments totalling $1.6 million into irrigation projects coming from the Ministry for Primary Industries’ Irrigation Acceleration Fund (IAF).

The three irrigation projects receiving funding are in the Wairarapa ($804,000), Hawke’s Bay ($575,000), and Gisborne ($250,000).

“This funding helps support the development of irrigation proposals to the stage where they are investment ready,” says Mr Guy.  . . 

Funding for irrigation unlocks potential:

Irrigation New Zealand applauds the latest announcement by Government sighting three more grants by the Irrigation Acceleration Fund – $804,000 for the Wairarapa Water Use Project, $575,000 for Ruataniwha (Hawke’s Bay) and $250,000 for Gisborne’s Managed Aquifer Recharge Trial.

“It’s great to see the Irrigation Acceleration Fund delivering on what it was set up to do – supporting the potential for irrigated agriculture to contribute to New Zealand’s sustainable economic growth,” says Irrigation New Zealand chairwoman Nicky Hyslop. . . .

Research to set NZ sheep milk apart:

New Zealand’s sheep milk industry is set to benefit from ground-breaking research by AgResearch.

Two hundred people are attending the second Sheep Milk NZ industry conference, being held in Palmerston North this week (14th-15th March). The first conference last year attracted 160 people, with the rise reflecting the increased interest in the industry.

AgResearch scientists presented the initial results from two years of research from the $6 million MBIE-funded programme “Boosting exports of the emerging dairy sheep industry”, ranging from composition of New Zealand sheep milk through to best practice effluent management. . . 

Industry looks beyond radiata:

Future generations of New Zealanders may live in a patchwork landscape where several different forest species compete on the hills for growing space with the familiar Pinus radiata.

“Radiata is a great multi-purpose tree that grows well in many places. But it is not perfect for all growing situations or market needs. And there are obvious risks in having all our eggs in one species basket,” says Forest Owners Association research and development manager Russell Dale.

“We are therefore thrilled as an industry that the government is joining us in the Specialty Woods Products Research Partnership. This is a major programme that will investigate new products and markets for alternative species and build the confidence of forest growers in planting those species that show promise.” . . 

Fonterra’s Anmum Formula Hits Nz Shelves:

Fonterra’s internationally established infant nutrition brand Anmum is now available to New Zealand families.

Fonterra Brands New Zealand Managing Director Leon Clement says Anmum is a $200 million brand in Fonterra’s Asian markets with an established track record of quality and trust with parents.

“Anmum draws on Fonterra and its legacy companies’ 50 plus years of experience in dairy research and in producing paediatric formulas for third parties. Bringing Anmum to New Zealand families means we are now providing nutrition for key life stages,” he says. . . 

Growth Attracts 28 New Canterbury Milk Suppliers:

Synlait now has 201 milk suppliers for 2016 / 2017 to meet forecast growth in their value-added nutritional product business.

John Penno, Managing Director and CEO, said a combination of increased customer demand for nutritional products – such as a2 Platimum® Infant Formula – and increased production capacity with a new large scale spray dryer has created an opportunity for Canterbury dairy farmers to supply Synlait.

“We’ve had a very positive response to this opportunity, to the extent we have not been able to accept supply from everyone interested and we now have a waiting list,” said Mr Penno. . . 


Rural round-up

June 10, 2015

Two options for Wairarapa water storage:

Two options for water storage schemes in the Wairarapa have been selected for a feasibility study after six other options were ruled out.

A four-year investigation by the Wairarapa Water Use Project will now consider building reservoirs near Masterton at Black Creek and Tividale.

The two reservoirs would irrigate about 30,000 hectares from Masterton to Lake Wairarapa.

An independent study calculates the scheme could add $157 million to the Wellington regional economy each year and create 1,200 new jobs. . .

 Plea for open minds on Wairarapa water project:

A Wairarapa farming leader is asking people to keep an open mind on plans for large scale irrigation in the region as a feasibility study begins on two potential dam sites.

Following four years of investigation so far, the Wairarapa Water Use Project will focus on building reservoirs near Masterton, at Black Creek and Tividale.

They could irrigate almost 30,000 hectares, stretching from north of Masterton and southwest of Greytown to the north of Lake Wairarapa. . .

Young couple learn from old hands – Barbara Gillham:

AFTER several years’ farm leasing, sheep and beef farmers Tom Cranswick and his fiancé Ellie Meadows see the equity partnership they have recently entered as an exciting step in their farming career.

In April the couple became equity partners with brothers Peter and Andrew Gawith and their wives on an 830ha-effective farm near Gladstone, Wairarapa.

The farm has been in the Gawith family for three generations, and Peter has been farming it since taking it over from his parents. Andrew is an economist who lives and works in Wellington. . .

Fieldays fencer aims for 60th birthday win – Te Ahua Maitland:

After 40 years of competing, Nick Liefting is preparing to lace up his boots one last time for this year’s Fieldays at Mystery Creek Golden Pliers fencing competition.

The Pukekohe contractor is set to retire following his 60th birthday. His presence this year will make him the first 60-year-old to compete at the Golden Pliers competition, an achievement which crowns appearances that started when he was just 19. . .

Biowaste key ingredient for growing profits:

New research from Lincoln University suggests biowaste can be used on former pine plantations to generate big economic returns.
Four years of research in a greenhouse environment found the waste, which might include sewage and dairy shed effluent, can be used to rapidly establish native vegetation on former pine forest soils.

Early estimates suggest the natives could produce a financial return of over $200 million annually. . .

Be more than just average statistics: 

Averages are a great mathematical tool and brilliant for hiding poorer performing results because they get dragged up by higher results.
Unfortunately the reverse also happens: the top performing results get dragged down into the general population. This is fine when we are only interested in trends in the status quo, but the dairy industry today needs change.

The dairy industry faces a number of challenges – environmental, welfare and profitability to name a few. . .

 

 


Why waste water?

April 16, 2013

A woman once told me that water should be left to flow from the mountains to the sea as God intended it.

I wasn’t quick enough to ask her if God also intended oil to be left in the ground and if so was she going to stop driving a car.

Not everyone uses God as a reason to oppose irrigation but the objections by some of a dark green persuasion have a religious fervour which I don’t understand.

Irrigation has positive economic, environmental and social impacts and the absence of it where it’s needed inflicts a very high cost.

New Zealand has “heaps” of water, but the country is not good at using it efficiently, says Federated Farmers president Bruce Wills, as the country suffers one of the worst droughts in 70 years.

“We let most of it run out to sea in the winter, and the economy gets whacked, (by drought)” Wills said. . .

Government officials now believe the drought could carve as much as $2 billion out of the economy.

After selling off lots of stock because of the lack of grass and feed, farms were now like supermarkets with only half their shelves full.

“It is very hard to make money on that basis,” Wills said and when they restocked it would be at higher prices than when they bailed out and sent stock off to the works.

“It will be a tough few years to go, the impact will go on for some time,” Wills said.

There would be a “good number” of farmers making losses this year, but he hoped only a small number would be pushed to the wall and forced to sell up.

Fertiliser spending had already halted so trucks and planes were not moving and that meant a tough impact on provincial towns.

“Belts will be tightened and chequebooks put away,” Wills said. . .

But for all drought-hit farmers: “If winter comes early it will be tough,” Wills said. “A lot of farmers are still on a knife-edge and a lot will depend on what happens next month, if we get some more rain and more warmth.

“Drought is far from over when the rain comes; that’s just the start of the recovery.”

Farmers had to get through the latest drought, but plan better to get through similar future events, Wills said.

“We have massive potential in this country to sensibly and carefully irrigate vast areas of land,” Wills said.

There were big-scale proposals to help make more parts of the country less prone to drought. . .

These include the $230 million Ruataniwha water storage scheme in Hawke’s Bay.

It is proposed a public-private scheme will build a dam west of Waipukurau that would hold 90 million cubic metres, capable of eventually irrigating 30,000 hectares. At present, just 6000 hectares of land in Hawkes Bay is irrigated.

“That’s on a big scale to be more efficient, so there’s lots we can do,” Wills said, to lessen the impact of drought, including water storage, pasture management and different feed regimes and breeds that cope with drought.

The Ruataniwha scheme would build “sensible” resilience into the economy.

In South Canterbury, the Opuha dam irrigation schemes made the area “substantially” drought proof.

The Wairarapa Water Use Project plans to irrigate more than 60,000 hectares and fuel a boom in farming in the region. But the nine proposed reservoirs would also destroy 35 homes, sever roads and flood land, with local home owners concerned about the secretive process.

But Wills said water storage and irrigation had wider benefits.

“It is not just for farmers. It is for the entire economy,” he said, with the 2008 drought costing the country $2.8 billion. Those costs could be mitigated far more than they are today.

Government studies of Opuha suggest that every 1000ha irrigated created 27 jobs and injects $7.7 million into the local economy. With 30 potential projects covering around 1 million ha up the eastern seaboard that’s about $7.5 billion extra revenue for the country each year and 27,000 new jobs. . .

A few decades ago farmers often waited for government help before making decisions. Now there are no subsidies they know they have to make decisions early, and to be prepared for drought.

Wills says most farmers are good at responding to the signals of drought.

He changed the way he farmed dramatically after the last bad drought in 2007.

“This has been tough, but we have got through this drought much better than 2007, because we have done dramatic things,” he said.

In 2007, his farm had 85 per cent sheep and the balance in cattle. This year he had 60 per cent cattle and just 40 per cent sheep. “We massively changed,” he said.

Wills farms in hill country in Northern Hawke’s Bay, but after the 2007 drought he built 60 new dams for stock water, which was a cheap way to store water.

“We learnt last time, when you run out of water, you run out of options,” he said. “We get plenty of rain in the winter, just not enough in the summer”. . .

That’s where storage, for stock water and irrigation comes in.

Why waste water when there’s too much when it’s possible to store it?

If you accept that some use of water is alright, taking it from rivers at high flow and storing it until it’s needed has the least impact on rivers and a big impact on soil health, pasture growth and farming profitability.


Rural round-up

December 13, 2012

Agricultural producers and food processors call for full trade liberalisation through the Trans Pacific Partnership

Farmers and food processors from Australia, New Zealand and Canada are calling on Trans Pacific Partnership (TPP) countries to conclude a 21st century trade agreement in 2013 that liberalises trade across all goods and services.

At the 15th round of TPP negotiations taking place in Auckland, New Zealand, agri-food groups from across the TPP region are meeting together and call for negotiators to uphold a high level of ambition in the trade talks. . .

TPP negotiations need to deliver for agriculture:

New Zealand’s red meat sector is encouraging all negotiating parties in the Trans-Pacific Partnership (TPP) to work tirelessly to ensure this agreement can be completed by October 2013. Key outcomes from the completion of TPP must be the elimination of agricultural trade barriers and the opportunity for greater economic integration across the Asia Pacific region, Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA) say.

The B+LNZ and MIA chairmen, Mike Petersen and Bill Falconer (respectively) reinforced the need for reduced barriers to agricultural trade, including the elimination of tariffs and other technical barriers as a priority. Achieving that would create benefits and opportunities for all TPP members exporting red meat products. . .

$2.5 million for irrigation project a welcome potential boost for jobs and the environment

The government’s announcement that it is funding half of the $2.5 million Wairarapa Water Use Project to investigate the feasibility of developing water storage, alongside the Greater Wellington Regional Council, is warmly welcomed by Federated Farmers.

“Water is the lifeblood of farming, which is why Federated Farmers welcomes Primary Industries Minister David Carter’s announcement this morning that the government will add this funding from the Irrigation Acceleration Fund (IAF) to look at the feasibility of this project,” says Federated Farmers water spokesperson Ian Mackenzie.

“This announcement means Wairarapa is potentially a huge step closer to securing a brighter economic future for its farmers and everyone else in the region. . . .

New Zealand Winegrowers explores the science of Sauvignon blanc

New Zealand Winegrowers (NZW) has commissioned UK wine writer Jamie Goode to publish The Science of Sauvignon blanc. The book is based on the results of a six year multidisciplinary research initiative that explores the key aroma and flavour compounds in Sauvignon blanc wine and how they relate to viticulture and winemaking.

“In our research programme we wanted to understand the unique characters of New Zealand Sauvignon blanc” says Dr Simon Hooker, General Manager Research at New Zealand Winegrowers. “What are its sensory attributes? Can they be linked back to viticultural management? Are they generated in the vineyard, through winemaking processes or by the yeasts? This book presents an overview to these questions in a very user friendly way that has given the industry new tools for driving flavour”. . .

Rapaura Springs Judged No2 New Zealand Sauvignon Blanc:

The Rapaura Springs 2012 Reserve Sauvignon Blanc has been named one of the two best Sauvignon Blancs in the country by Cuisine Magazine’s judging panel.

Owner Brendan Neylon says achieving number two rank, as well as a five star accolade, denoting “outstanding quality” in a wine, is an excellent result from such a prestigious tasting, and perfectly timed for Christmas. . .


Rural round-up

December 11, 2012

Irrigation fund project given green light:

Primary Industries Minister David Carter says the go-ahead for the Wairarapa Water Use Project has the potential to irrigate an additional 30,000 to 50,000 hectares of land and boost the area’s GDP by $400 million.

Speaking at the launch of the Business Growth Agenda – Building Natural Resources progress report, Mr Carter welcomed today’s announcement of a $2.5 million pre-feasibility study to develop water storage and distribution in the Wairarapa.

The study is jointly funded by the Government’s Irrigation Acceleration Fund and the Greater Wellington Regional Council. . .

Meat and dairy products lead manufacturing rise:

Meat and dairy products dominated the rise in total manufacturing sales for the September 2012 quarter, Statistics New Zealand said today.

After adjusting for seasonal effects, the value of total manufacturing sales rose 1.6 percent ($370 million), led by the 9.3 percent ($612 million) increase in meat and dairy product manufacturing.

When price changes are removed, the volume of manufacturing sales rose 2.6 percent, also led by meat and dairy product manufacturing, up 13 percent.

“The volume increase in meat and dairy manufacturing is reflected in the rise of export volumes for dairy and meat products, with increases of 32 percent in dairy, and 15 percent in meat,” industry and labour statistics manager Blair

Wider use of crossbred wools urged – Sally Rae:

Crossbred wool has a future – but its uses need to be diversified instead of just concentrating on carpets.

That is the belief of Arrowtown man Tom Murdoch, a former manager of the Alliance Textiles mill in Oamaru (now Summit Wool Spinners).

Mr Murdoch, who spent 28 years in Oamaru, has had a long involvement with the wool industry.

Before moving to Oamaru, he ran a factory in Mauritius which produced knitted Shetland garments. After leaving North Otago, he got involved in a spinning mill in Bangkok and then helped set up a dye-house. . .

Apathy problems for Wools of New Zealand – Gerald Piddock:

Wools of New Zealand chairman Mark Shadbolt hopes farmer apathy won’t derail the company’s $5 million capital raise following low turnouts at meetings nationwide.

One of the final meetings of the wool company’s nationwide roadshow in Waimate last week drew only about 20 farmers.

Overcoming the apathy shown by farmers was their biggest challenge. The small audience at Waimate was typical of the turnout at the meetings, Mr Shadbolt said.

The meetings are to promote Wools of New Zealand’s prospectus, asking wool growers to invest at least $5 million to buy shares in the company and to commit wool for deals to high-end users such as airlines, hotels, luxury apartments and cruise ships. . .

Two appointments made to Dairy Women’s Network Board:

The Dairy Women’s Network has welcomed two new trustees to its Board, Maree Crowley-Hughes from Thornbury and Robyn Judd from Oamaru.

A hands-on farmer and experienced business woman, Maree and husband Peter Hughes own seven farms in Southland and Otago, which collectively milk 5000 cows producing more than two million kilograms of milk solids per year. . .

Cardno said. . .

Knives Out For Former Meatworks:

The former AFFCO meat killing and processing plant at Taumarunui in the Central North Island has been placed on the market for sale – at less than five per cent of what it was once worth.

The 10,000 square metre plant – sitting on 5.5 hectares of land – was once valued at $18million during its peak production period in the 1980s and 1990s. The plant was made redundant in 2009 and has largely remained idle ever since.

The huge site adjacent to State Highway 4 is now being marketed for sale by Bayleys Hamilton at an auction being held on December 13. Jim McKinlay of Bayleys Hamilton said the vendor’s price expectations was upwards of $450,000. . .

And ACC Minister Judith Collins in ACC’s new milking shed safety apron:

milking apron


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