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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”.

“These proposals are of a very high quality, and stand to deliver enormous returns on investment,” he said.”When the PGP was launched in September last year, the aim was to transform great ideas into research, development, and ultimately products, jobs and growth.”Since then, industry participants have been working hard at refining business plans to provide evidence of how their proposals will add significant value to the New Zealand economy.”

Seven other organisations have to date gained funding under the PGP, which was set up after a $190m commitment from the Government in last year’s budget.

“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.

The growth did not just come from a rise in lamb prices – returns were up in the third year even if the lamb price from the first year was used – but from a significant rethink on farm systems and diversifying where the farm income came from.

Many monitor farms had focused on lifting production levels to generate more income, but the Youngs wanted to lift the farm’s profitability by finding other ways of making money from their 460ha. Production was a factor in boosting profit, but a change in the mix of products and the way they farmed helping achieve the most benefits.

Better pasture management did bring production gains, and to a lesser extent a shift in breed from romney to grow bulk ewes, a romney-texel-poll dorset cross. This shift in breed was starting to pay dividends now but it was looking beyond his traditional land- use mix that made the biggest difference.

The lambing percentage did not lift dramatically, with salmonella brandenburg a problem last year, but average growth rates improved. Even though they were killing at the same time, average weights had lifted from 16-17.5kg to 17.5-18.5kg, Mr Young said. They had been understocked and were letting the spring and early-summer grass get too long and lose quality. By getting on top of that feed, they were able to produce better feed through the rest of the summer and that helped keep lamb growth rates up, he said.

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.

“The two farmers were enthusiastic supporters of the whole-farm plan approach and working with the council to develop planting programmes for the highly erodible country, ” Mr Carter said. He asked the farmers if there was more acceptance amongst the farming community for erosion protection. John Cousins, who farms at Pohangina, where the helicopter landed, said 10 per cent of the property was now planted. But he had not lost any production and carried the same number of stock as he had before the planting, he told the minister. Craig Mitchell, Horizon’s group manager of environmental management, said there are 245 whole farm plans, of which 203 are being implemented. These projects have translated into work on the ground, all aimed at reducing sediment yields from hill country into river systems and include more than 150 kilometres of fencing; 1325 hectares of forestry planted; 19,100 space planted poplar and willow poles; 700 hectares of riparian retirement.

The other 42 which had had farm plans done were on hold, as the farms were on the market or they had experienced a bad year, or other issues, Mr Mitchell said. “We’ve arbitrarily capped whole farm plans at 100 a year and we have no trouble getting that 100 a year because that is what can be managed by the people involved and funded by the community.” He said the idea is that by year 13 or 14, there will be 1500 whole farm plans done and they’ll be implemented.

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.

This has led to other players, like processors, in the supply chain looking at consolidation. Parsons says a good example is the Brazilian beef processor JBS, which started as a small abattoir in Brazil’s Midwest. It has ballooned in size in recent years through a series of acquisitions in the US, Europe and Asia to become the world’s biggest beef exporter, processing an average of 35,000 head of cattle a day.In Australia, JBS already has an extensive presence on the eastern seaboard.

The operations of its Australian subsidiary Swift Australia, includes 10 meat processing plants and five feedlots. Parsons says JBS also has the advantage of sourcing beef products globally and concerns around foot and mouth disease in Brazil is not an issue for the company. “Who wouldn’t want such a company to come to NZ,” he says. “I wouldn’t be surprised if JBS is not in NZ soon.” .Parsons says it all comes down to who controls the supply chain.

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.”

In 2008-09, 19 companies and 36 plants killed 25.6m lambs. Average weekly kill is just 42% of potential capacity. The picture for beef, Anzco’s core business, is only marginally better: export processing plants fell from 36 to 32 with an increase in annual kill from 1.96m to 2.22m over the same time period. Average kill is 56% of capacity.“The train crash is coming because there’s too much capacity in regards to the livestock supply and the second thing is lack of profitability,” He told the monitor farm meeting only two players in the NZ meat industry have paid tax every year in the past decade “and they are Alliance and Anzco”. Harrison also highlighted market share statistics based on EU sheepmeat and US beef quota allocations.“There’s been a huge drop for Silver Fern Farms (SFF) and Alliance has now overtaken Silver Fern Farms as the largest sheepmeat company. Affco’s flat and Anzco is climbing. That tells you some story.” Beef trends are similar, with SFF having suffered “a huge loss of market share” to the US, though it remains the largest player at about 56,000 tonnes..

For all the talk of fragmentation, the NZ meat industry today is the most consolidated it has ever been in its 128 year history, with SFF, Alliance, Affco and Anzco handling 75% or more of both the sheep and beef kill. However, there is no point trying to create a Fonterra-type model, or even having that debate, because sheep and beef farmers have never backed collectivisation, he says. “In the end farmers will come back to choice.”

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.

When questions about a price that farmers might expect in five years, Mr Behrent said the target had to be $120. But he warned farmers not to run their business expecting that. Returns to farmers could be increased if the prices obtained for co-products such as wool and tallow could be lifted. Five years ago, they brought an extra 25 per cent above the meat price. It was about 7 per cent at present. Lifting co-product prices could help put another $10 in farmers’ pockets, he said. He praised farmers for doing a good job adapting to meet the changing market demands. In the 1983-84 season, the average carcass weight was 13.3kg – last season it was 17.7kg, Mr Behrent said.

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.

While currency exchange and recession concerns had created problems for the meat industry, Dr Woodford was optimistic about the global market for lamb and the opportunities for NZ farmers. Lamb production was static or declining in most developed and developing countries, which meant no-one was going to flood the market. That created opportunities but also challenges, he said. There were about 1 billion sheep in the world, but many were in countries such as Somalia or Nigeria, which would never have an impact on where New Zealand sold its product.

Sheep numbers have been declining in New Zealand for about 25 years – about 35 million compared with 70 million in the 1980s. Australian numbers peaked at 150 million about 20 years ago, but that had dropped to about 75 million, while Argentina’s numbers were down from 24 million to about 12 million. Uruguay had 9 million, down from 24 million, while China had shed 15 million to about 135 million. Many of those countries’ stocks would never recover because of extensive land degradation, such as on the Mongolian grass plains, he said.

The lamb market in the United States was more complex but sheep numbers were down from 50 million sheep 60 years ago, to about 7 million. Most young and middle-aged Americans had probably never eaten lamb, he said.

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.”.

“Shooting dogs seems to be the only way to get through to these people. While it seems harsh to punish something that doesn’t know any better, it seems to be the only way to get the message through.”Mr Proctor was responding to a story in Hawke’s Bay Today last Thursday about illegal hunters and poachers hitting properties off the Taihape and Puketitiri Roads.

“We are in the same situation – we are getting poached on a regular basis.”Over the past five years he and neighbours had seen farm deer and cattle shot – most of it taking place during the winter. “I’ve had fences cut and stripped back to allow farm deer into the wild. I’ve had gates smashed open and padlocks cut and shot to gain access through my farm. Padlocks at $100 a pop and fencing at $20 per metre. Cattle around $600-700 dollars each and hinds around $500 each … it doesn’t take long to add up to a costly amount of damage. Then there’s the time it takes to repair as well as patrolling at night till 3am to find these mongrels. It just seems to go on and on.”

Police were out stopping and checking hunters and their vehicles on Waitara Rd last Saturday. “They are being pro-active,” Mr Procter said.

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.

“North Island numbers increased from 3.0 million to 3.8 million over the same period.”Between 2008 and 2009, sheep numbers fell to 32.4 million, deer numbers were down to 1.1 million, and beef numbers remained stable at 4.1 million.