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The latest round of Primary Growth Partnership (PGP) funding has been spread across forestry, merino wool and arable farming organisations.

Agriculture and Forestry Minister David Carter said today $20 million would be split between the New Zealand Forest Owners Association, the Foundation for Arable Research and the New Zealand Merino Company (NZMC) reports The ODT. At slightly over $15m, NZMC will get the lion’s share of the funding, and with their own funding input included, the three government-industry partnerships will be worth over $45m.The government funds will be received over five to seven years and Mr Carter said the economic spin-offs could amount to billions of dollars “if the proposals’ scientific and market research and product development are brought to fruition”.

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About a year ago, three Southland families ended their three-year stint as monitor farmers .Kaiwera farmer Robert Young is effusive in his praise of the monitor farm program that he was involved with for three years, reports The Southland Times.

“When it finished, there was a big sigh of relief of not being in the fish bowl and we were quite happy to not have any of that stuff happen for a little bit.” But with the benefit of time, he and wife Stacey realised they had got a “huge amount” out of the Meat & Wool New Zealand scheme, Mr Young said. “It improved our farming out of sight and was worth a lot of money to us.” Their profit more than doubled, he said.

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Hill country farmers are changing their attitudes to their erosion-prone country, says Agriculture and Forestry Minister David Carter. He was flown in a helicopter by Horizons Regional Council to check out flood protection in the lowland area and hill country. Mr Carter went to stopbanks on the lower Manawatu, Moutoa floodgates, Kopane Bridge and Pohangina and Turakina Valley hill country.

He said two hill country farmers he spoke to said there seemed to be a greater awareness of the erosion problem coming from the hills reports The Manawatu Standard. The sustainable land use initiative (SLUI) programme was developed around voluntary whole-farm plans which assess the farms’ physical, environmental and business resources in a structured way. They are funded by Horizons in partnership with the Government on a dollar-for-dollar deal, through MAF’s hill country erosion fund.

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A meat industry leader says if NZ processors continue to shun consolidation it is inevitable that a multinational processor will step in reports Rural News. And unless there is consolidation of meat processors here, overseas supermarket chains will continue to take the bulk share of returns. Northland farmer James Parsons points out that a low cost of production is not a competitive advantage “unless you can bank it”.

The Nuffield scholar and M&WNZ director says in the EU supply chain funnel, the power lies with the big supermarkets. In the UK, the big four supermarket chains – Tesco, Asda, Sainsbury’s and Morrisons – have boosted their market shares and collectively hold about 75% of the market. Because of their power in the supply chains, these supermarkets are able to pressure suppliers to discount prices, resulting in lower returns for farmers.

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Sheep and beef producers should pick the companies they supply carefully to avoid becoming casualties of an impending “train crash” in the industry, says the chairman of one of the key players in Rural News. Speaking at a M&WNZ monitor farm meeting in South Canterbury last week, Anzco chairman Graeme Harrison  said average return on shareholders’ funds across the four main companies is “not even the cost of capital”.

Normalised earnings figures – with exceptionals taken out to leave only meat industry activity – for the four largest meat companies over the past five years show combined earnings in 2008-09 were well below the five-year average even though turnover and assets employed increased.Average margin on sales was just 0.7%.“You can all see from these numbers a train crash is coming.”

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The world wants chilled lamb meat but the challenge was to get it to the right markets at the right time, Alliance Group livestock manager Murray Behrent told farmers at a field day last week. While frozen lamb still accounted for 60 to 70 per cent of exports, the aim was to convert that to chilled to maximise returns, he said. “Lamb is a premium product and we want to sell to the millionaires of the world.”

Shelf life had been extended from nine weeks to 11, which meant the meat was on retail shelves for longer, offering more sale opportunities reports The Southland Times. Speaking at M&WNZ’s new Meat the Future field day last week, Mr Behrent said the co-operative knew farmers wanted $100 for a lamb now and were unhappy with returns lower than last year. But if the NZ dollar was the same as last year, farmers would be getting between $112 and $115, because of record prices being achieved in British retail markets.

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Meat companies do “a pretty good job” marketing their product in Europe but are often unfairly criticised for their efforts in what is an extremely sophisticated market, an agriculture academic believes. Lincoln University Professor of Farm Management and Agribusiness Keith Woodford said the EU – including the United Kingdom – took 65 per cent of New Zealand’s lamb by value, paying the best global prices reports The Southland Times.

Companies were getting better returns than for beef, so for lamb to be so well placed in price suggested someone had done something right, Dr Woodford said. “I think they’ve got Europe pretty well sussed but always, of course, they could do a little better.” He told attendees at Meat & Wool NZ’s new Meat the Future field day last week that he expected New Zealand’s meat industry would need restructuring to survive, but did not believe that would lead to a Fonterra-like mega-company. It would probably lead to two large companies – one a co-operative, the other an investor-owner – and maybe some other smaller niche businesses, he said.

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Te Pohue farm manager Peter Procter said years of losing thousands of dollars of stock and having to repair smashed gates and fences had pushed farmers to the point where they will fight back reports The NZ Herald. “I’ve had a gutsful – and so has everybody else who lives on Waitara Rd. It’s come to the crunch … if a dog sets foot on my place it will be dead and hanging on my gate for the owner to come and collect.”

Mr Proctor said he had seen too many shot and savaged livestock over the past few years on the property, off SH5, as illegal hunters target private farms and blocks for their shooting expeditions. “I’ve had poachers leave dogs on the farm overnight which have attacked sheep within a short period of time. I’ve had up to 20 ewes at once killed, and if you’ve ever seen a sheep still alive with half its face peeled off you wouldn’t think twice about shooting these kinds of dogs.”.

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The dairy boom continued in Canterbury and Southland with the South Island dairy herd up 13 per cent last year to 2.1 million, according to official figures. The South Island dairy herd is almost seven times the size it wasy 20 years ago. Canterbury was the South Island’s largest dairying region, recording 10 per cent growth to reach a herd size of 918,000, followed by Southland, where numbers grew 19 per cent to reach 589,000, according to the final results of the 2009 Agricultural Production Survey reports Stuff.

National dairy herd numbers reached a record high of 5.9 million at 30 June 2009, up 282,000 since 2008. The size of the North Island herd remained stable at 3.8 million. Factors contributing to the South Island growth include continued dairy conversions, a smaller number of dairy cows and heifers going to the beef herd, more older cows remaining in milking herds, and the sourcing of dairy heifers from the North Island. “In 2009, South Island dairy cattle numbers were almost seven times larger than 20 years ago when there were 312,000 dairy cattle,” said agricultural statistics manager Gary Dunnet.

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