Total farm sales in NZ slumped more than a third to 46 in the month of January from the same month a year ago, Real Estate Institute (REINZ) figures show.REINZ President Peter McDonald said it was “most alarming” that only 7 dairy farms were sold in the ‘prime’ month of January and he cited weak bank lending rather than a lack of demand from buyers reported The NZ Herald .

“There is confidence amongst buyers in the rural sector and a lot of interest in farms, but there appears to be a distinct lack of confidence from lenders,” he says. Reserve Bank figures show bank lending to farms dropped NZ$315 million to NZ$46.916 billion between the end of September and the end of December. This was the first fall in agriculture lending in 9 years.

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South Canterbury farmers are threatening to lock out Transpower in a move that could delay important work on the Roxburgh-Islington line that supplies Christchurch, potentially threatening the city’s security of supply reports Stuff. At a meeting yesterday the South Canterbury Fed Farmers pylons committee – representing landowners with pylons on their properties – gave representatives of the national grid operator seven days to agree to pay farmers compensation or be locked out.

Committee member David Moore said if Transpower failed to agree to compensation, it would advise members to deny Transpower access to their properties to complete the upgrade of 20 remaining pylons in South Canterbury as part of the Roxburgh-Islington line. Talks broke down at the meeting after the sides failed to reach a deal on compensation for landowners.

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The Chairmen and CEOs of farmer organisations from five of the world’s major beef exporting nations, making up the Five Nations Beef Alliance, are meeting in Northland this week to consider how to make beef production more profitable.

M&WNZ Chair, Mike Petersen said NZ was hosting beef producers from Canada, the US, Mexico, Australia and NZ in the forum set up to progress trade policy and technical issues. “This is an opportunity M&WNZ takes every 18 months or so to deepen our relationships at the highest level with other beef producing nations. These relationships are very important in ensuring that we are able to work together on common issues as they arise in key markets.

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A controversial scheme to tag and trace cattle and deer could trigger a hi-tech revolution boosting farm productivity and profit, according to some in the industry. But any sea change is unlikely to happen overnight reports Stuff.

Farmers are required to tag all deer and cattle with radio-frequency identification (RFID) chips by the middle of 2011 after Cabinet approved the second-stage business case for the National Animal Identification and Tracing (Nait) scheme. Stock movements will be recorded in a database to track animals during outbreaks of disease and to tell consumers where meat comes from.

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Pasture-damaging clover root weevils have spread further in Otago after first being found in the province a year ago. AgResearch said today that it had discovered clover root weevils (CRW) on the Taieri Plain and its scientists were sampling local farms to see how well established the pest was in the area, before deciding how to address the infestation.

The CRW reduces the contribution clover makes to soil fertility by helping “fix” nitrogen from the atmosphere in soil to help pastures grow reports The ODT. The nitrogen-fixing role of clover is also under threat from the loss of “feral” honeybees to pollinate clover for free, as varroa mites kill off bees outside managed hives.

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A pre-Christmas shortage of lamb in British supermarkets has caused a spike in the amount of chilled product being air-freighted from NZ to the UK. Meat & Wool NZ’s Economic Service says 7700 tonnes of lamb were despatched from New Zealand in November reports Radio NZ.

About 3% of this – a couple of hundred tonnes – had to be airfreighted to meet demand. This is much more than last year. Executive director Rob Davison says UK lamb supplies are quite tight due to a wet summer and autumn there and domestic prices are quite high

With the currency falling in the UK, local farmers are sending their product to European markets at good value, and leaving opportunities for NZ lamb this Xmas. Don’t hear any moans about food miles and NZ product from UK sheep farmers at the moment.

globalDairyTrade, Fonterra’s internet-based sales platform, concluded its December trading event this morning (NZT) with the average price for Whole Milk Powder up 3.6%. The trading manager, CRA International, advised Fonterra that the average price achieved across all contracts and contract periods for Whole Milk Powder (WMP) was US$3,560 per tonne FAS. This was US$123 per tonne higher than the November event. Prices ranged from US$3,370 per tonne FAS to US$3,760 per tonne FAS.

Paul Grave, globalDairyTrade manager, said the market continued to be underpinned by tight supply conditions.“However, the economic outlook is still relatively fragile. A sustained recovery is reliant on strong consumer demand,” Mr Grave said.“WMP prices have risen by 95% since July. While the outlook remains positive, we expect more volatility as a result of supply and demand responses to this large price increase.”

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The NZ dollar may fall this week as investors get jittery about the speed and strength of the global recovery and flock back to so-called safe-haven currencies such as the US dollar and yen reports The NZ Herald. Four of seven economists and strategists in a BusinessWire survey predict the kiwi will decline this week as traders grow nervous about the sustainability of the US economic recovery, and eschew higher-yielding, or riskier, assets.

Two forecast the currency will consolidate in its current range, and the last anticipates the kiwi will edge higher after it slumped 4.8 per cent against the greenback last week.

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Economic cornerstone Fonterra needs a formal profits distribution policy so farmers being asked to invest cash in the dairy giant know what payoff they are likely to reap, says the Fonterra Shareholders’ Council. The call to Fonterra directors comes in the watchdog’s annual report, and can be interpreted as a condition of the council’s continuing agreement to a rejig of the capital-starved co-operative’s financial structure reports The Herald.

The first stage of the Fonterra board’s three-step capital restructure proposal is to offer farmer-shareholders the opportunity to buy 20 per cent more shares. These shares will not, as is the norm, be linked to how much milk a farmer supplies New Zealand’s biggest company. The proposal, if voted in by farmers at this month’s annual meeting, has the potential to inject up to $900 million new capital.

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The past week has seen a number of things that will have an impact on sheep and beef farmers’ incomes, and their industries, says Manawatu/Rangtitikei Federated Farmers Meat and Fibre chairman Tony Gray. And he doesn’t think it bodes well for farmers. He said, after having good prices last year for beef and lamb, he thinks the recovery is going to be short-lived despite the continued firm prices in the market place reports The Manawatu Standard. “Given the current exchange rates with the US, pound and euro, the average price for lamb may be closer to $70 than the $88 last year and beef $689 compared with $816 last year,” he said.

He does not expect the New Zealand currency rate to move much from its current US70 cent high, although exporters would like to see it come down, and many financial pundits expect the value of the kiwi to fall. Mr Gray said Treasury is reporting that New Zealand is over the recession, so the longer-term outlook for interest rates is that they are likely to increase. “So where does that leave the profitability of the sheep and beef sector? In the hand of the world’s currency traders.”

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