2008 News Archive

Scourer adapts to less wool
Wool Services International (WSI), which yesterday reported a "satisfactory" full-year profit, says the wool industry is facing its biggest challenge for 100 years with the change of rural land use to dairy. Managing director Michael Dwyer said the wool scourer and exporter had adopted a business model that suited the new scenario with less wool product given that it had its own marketing, procurement, processing chain and added value. There needed to be more change, but Christchurch-based WSI will not chase consolidation, he said. WSI yesterday reported a net profit of $2.39 million, down from $2.868m in the fiscal year to June 30, 2007 with last year's profit restated under new IFRS international accounting rules. more>>

Fonterra new of poisoned milk
The Govt knew nine days ago that dairy giant Fonterra's Chinese joint venture partner was selling contaminated milk since linked to the death of at least one baby, Trade Minister Phil Goff said .Fonterra today admitted it had known of the contamination since August, and said it had urged Chinese executives to mount a public recall. But until today it did not disclose publicly information about the poisoned milkpowder, which is reported to have killed one baby and made another 432 sick with kidney damage. Mr Goff said tonight he did not believe the scandal would damage NZ's trade interests in China. "I have had the assurance from Fonterra that they did everything within their power to ensure the product was recalled and that the local authorities in the city. . . where they are operating were fully informed of that problem." Fonterra said today it had pushed for a full public recall of all affected product since learning of the problem last month. more>>

Farmers face reality check
"What are we doing to our reputation in the international market?" asks Sam Robinson, AgResearch's new chairman, when asked about the Environment Waikato report which revealed more than two-thirds of Waikato rivers tested were so dirty it was unsafe to swim, or for stock to drink from them. "NZ is credited to produce healthy, nutritious and safe food, and we clearly should be doing the same to the environment," Mr Robinson, a Hawke's Bay sheep farmer who took the reins of NZ's largest Crown Research Institute in July, said. The report, overseen by regional council soil scientist Peter Singleton, found soil and water quality were deteriorating in intensely farmed areas, with nutrient concentrations, sediment and animal faecal levels high, and warned the full effects of intensive farming may only be evident decades from now. And Dr Singleton was uncertain whether best farming practice would be enough to stop these trends in some areas. "Those best practices definitely help, but they're only one of the tools: to try to reverse these trends, we need all those tools, and new ones we don't yet have. We're finding farmers are putting on more phosphate fertiliser than they need to grow the plants." more>>

Fantastic new fabric from wool
A fabric that is stab- and fireproof and can be worn as everyday clothing has been developed by NZ scientists. The world-first fabric - which weighs no more than existing woollen jackets such as a Swanndri - is the brainchild of crown research institute AgResearch. As well as repelling all but the sharpest of knives, the black wool is so resistant to flames that skin underneath it can withstand a blowtorch for 30 seconds before feeling the heat. The fabric could have a huge international market as a new option for military and police forces, security firms and postal services. AgResearch Lincoln textiles section manager Peter Ingham said the material was produced by knitting highly protective Vectran - a substance used in bulletproof vests - together with wool. "It looks just like a normal Swanndri-type thing and it's very comfortable to wear because it's got all the properties of wool, but in the middle is this incredibly tough Vectran knitted structure.more>>

ETS- farmers fear the worst
Farmers could have most to lose under the emissions trading law. Agriculture will not be fully exposed to the emissions trading scheme until 2030 but already the risks and opportunities are being hotly debated. The Govt is trying to reassure farmers that NZ's biggest earning sector will not be hung out to dry. NZ must reduce net emissions to 1990 levels under the Kyoto Protocol or purchase emission units internationally to cover any shortfall. The farm sector will be included from 2013 with an initial free allocation equivalent to 90% of emissions in 2005, reduced to zero between 2018 and 2030. Lincoln University professor of farm management Keith Woodford said the biggest uncertainty in attempting to calculate the implication of the scheme on the farming was the unknown value of carbon. A Lincoln University colleague estimated a 4000-head sheep and beef farm would produce 1443 tonnes of carbon dioxide equivalent, while a 350-cow dairy farm would make 1632 tonnes. If the price of carbon was $25 a tonne the annual liability would be $36,085 for the sheep and beef farm, and $40,804 for the dairy farm. M&WNZ has said sheep and beef farm profit was expected to improve from an average of $19,400 in the 2007-08 year to $53,000 in the coming season. Woodford said under current calculations methane accounted for two-thirds of agricultural emissions but there was almost no prospect of science coming up with anything to help by 2013.more>>

Co-op to explore NZ phosphate
Ravensdown is considering mining phosphate rock under Milton farmland in the lower SI, which might take some of the sting out of fertiliser prices for farmers.The Milton deposit was last commercially mined during WW2, but rising prices for the key fertiliser ingredient up ten-fold from a year ago have driven fertiliser co-operative Ravensdown to sign up mineral and land agreements. Ravensdown began exploring the reserves this week over the 500ha site, about 5km north of Milton, near Dunedin. Chief executive Dr Rodney Green said the price of phosphate rock had risen steeply, making mining and upgrading its concentration at Milton a viable option. "We know there is phosphate there and we also know the price of phosphate rock is 10 times what it was a year ago from $US50 a tonne to $US490 and the cost of shipping has gone from $US20 a tonne to $120, and our dollar is dropping. We have (currency) cover, but cover does not last forever, so this is extremely important." more>>

Season of uncertainty looms for farmers
Prices for store lambs and cattle are the great unknown for the coming season, Wilson and Keeling farm advisers told 30 farmers at the M&WNZ Manawatu Finishing Monitor Farm day. They were reluctant to guess what store lambs and cattle might be worth, and the ready-to-slaughter prices per kilogram, were also up in the air. No one replied when farmers were asked, who intended to buy store stock to finish on their farms. This suggests farmers who had the option were keen to put in crops and support the dairy industry. The group talked about the options of growing grain or a silage crop, but was told seed was pretty tight for most crops. But it was taking on store stock for finishing that had the consultants and farmers guessing. However, they agreed with fewer lambs around breeders in the hill country were likely to finish many of their own lambs. more>>

More meat consolidation likely
More consolidation in the meat industry is tipped by farming specialist Prof Keith Woodford at Lincoln University.But a merger of Silver Fern Farms and Alliance was not a goer now SFF and PGG Wrightson achieved 75% farmer backing for a partnership this week. However, there were other small meat companies and consolidation was needed, especially with the estimate of nine million fewer lambs and ewes available for slaughter this season. He expected many of the companies to be talking to each other. "I don't think anybody believes that with Craig Norgate and PGGW Wrightson making this move that that's the last move. It's a step along the way." Woodford said all the meat plants would be desperately trying to shore up their supplies. So it would be a difficult season for the meat companies. Some meat companies would be looking at whether they could buy out other processors. more>>

Dairy payouts tipped to dwindle
Investors have had second thoughts on entering the dairy sector, given a sudden plunge in global whole milk dairy prices. With whole milk powder prices retreating significantly in the past couple of months, market participants are saying demand for rural land suitable for dairy is lessening and linking it to new production investment. Global Dairy Network director John Shaskey said the latest price being paid for whole milk powder was about US$3000 a metric tonne, a significant retreat from recent peaks. University of Wisconsin data showed whole milk prices peaking at more than US$5800 about a year ago. There were also now expectations of "a pretty normal supply year" from Oceania markets, including Australia and NZ, where Fonterra was expecting about 10% more production compared with last year's drought-ravaged supply. Mr Shaskey, whose company trades and exports on behalf of NZ and overseas producers, said the Kiwi dollar would need to retreat even further from its existing levels of US66c-US68c to support Fonterra's payout plans. Another industry insider said the price falls had created uncertainty in terms of investment in land and the development of infrastructure for processing milk. "This will have an impact on the payout price by Fonterra- the banks are talking somewhere between $5.50 and $5.80/kg ms" more>

Its election time again
Political policy comparison website www.policy.net.nz is ramping up its service ahead of the election by adding blogs from prominent independent commentators Chris Trotter and Matthew Hooton. This election will be the first in NZ's history where debate will be just as intense in the blogosphere as on the hustings and in the mainstream media. policy.net.nz now has two commentators from either end of the political spectrum who can cut through the political spin and noise of the debate. They will deliver an insightful and often trenchant view of the politics and the politicians doing battle in this campaign. Their commentary and the online debates they spark will complement the comprehensive comparison of policy details published on policy.net.nz from all political parties. Moderated comments from readers will add to the flavour of the debate. more>>

The price of dirt - Westpac
The Westpac quarterlry review that looks at the price of farms that has had its strongest run for two decades on the back of the dairy boom. They suggest caution in taking dairy land prices higher as world prices ease and costs rise. Also beyond the farm gate looks at commodity price forecasts in the differing sectors. more>>

Its payback time for deer
It's been a big year for Southland DFA chair Brian Russell, who is now reaping the financial rewards from sticking with the deer industry. The venison schedule is continuing to head into uncharted territory. For Central Southland deer farmer Brian Russell it's welcome payback after more than five years of low returns. "We couldn't have stood more than one year of poor prices or we'd have been looking at other options," he said. Falling production and strong demand for venison has resulted in a lift in the schedule to well above $9 a kilogram this season, prompting speculation of another boom and bust. But Brian said he was confident the deer industry could sustain the price increases, and continue to grow at a steady pace as well as meet the demand for venison in overseas markets. He and wife Kristine farm more than 3000 red breeding hinds on the three properties they farm in partnership with Brian's parents, Bruce and Annabel Russell, at Avondale and Mossburn. Brian's main focus is venison production, which makes up 60% of the farm income, while the velveting operation, comprising 350 mixed-age stags, makes up 10%. more>>

From hope to optimism
Fed Farmers Meat & Fibre chair, Bruce Wills said sheep and beef farmers can now look forward to a future where meat and fibre is once again a sustainable and profitable business. He made the comments after the special general meeting of SFFs today, where farming shareholders voted in favour of a proposed partnership with PGG Wrightson. "I am pleased that initiative is being taken in an industry that has shown a reluctance to change. Farmers have voted for the benefits that an injection of capital and an integrated supply chain will deliver to the previously farmer-owned cooperative," Mr Wills said. "When this partnership was first proposed, I made the comment that it may be the catalyst the industry needs to move forward. With the partnership now a reality, the onus is firmly on the farmer suppliers of Silver Fern Farms to support the new venture. If this can be achieved, it should ensure that the partnership is the first step towards further consolidation of the meat industry. Farmers will keenly look forward to the realisation of the financial benefits that should accrue from the projected increases in operating efficiency and other synergies that drove the proposal," Mr Wills said. more>>

Farmers vote for change
Farmer shareholders in SFF have voted overwhelmingly in favour of the partnership proposal with PGG Wrightson , taking a major step in securing a sustainable future for NZ's red meat industry. 75% of the votes cast were in favour of the partnership. The vote attracted a very high turnout, with more than 83% of the eligible votes being cast. Remarkably, 100 percent of the votes cast at the Special General Meeting today voted in favour of the proposal. Eoin Garden, SFFs' chairman, said he was delighted with the result and the support of shareholders. "We strongly believe partnering with PGW is in the best interests of Silver Fern Farms' suppliers and, going forward, the wider pastoral sector. This is not just about Silver Fern Farms and its shareholders; it's about the future of the red meat industry." Under the partnership PGW will contribute $220m to recapitalise Silver Fern Farms, creating an entity with shareholders funds of $510m and an equity ratio of 80% . "It's an unprecedented injection of new capital into our industry, and farmers and shareholders in Silver Fern Farms will benefit significantly," said Mr Garden. In a joint statement, Mr Garden and PGW chairman Craig Norgate said: "This is a great day for both companies and indeed the red meat industry in NZ. "We are excited by the opportunity to create a truly vertically integrated supply chain - from plate to pasture - that better serves the needs of international customers. We intend capitalising on the opportunities presented by an increasingly affluent and sophisticated international market, for high quality red meat products. more>>

A winter from hell says farmers
It has been a winter from hell for many NZ farmers, with record rain, wind and snow, following on from summer drought feed shortages… and it isn’t over yet. Southern North Island hill country sheep farmers are in a vice, caught on one side by feed shortages through drought and a difficult spring, and on the other side by three years of low prices and depleted cash reserves. ‘It’s been extremely difficult,’ says chairwoman of the Manawatu-Wanganui Rural Family Support Trust Margaret Millard, Palmerston North. ‘The drought was difficult and now in Manawatu we have surface flooding all over the place. We’ve gone from one extreme to the other.’ She says life is particularly difficult for sheep farmers, mainly those on hill country. Millard says: ‘They have run out of options. They don’t have extra feed and they are low on cash reserves – it will be another year before we know if they’ll come through. ‘Banks are supporting them and monitoring the situation in the meantime. more>>

Alliance shareholders reject SFF merger
Farmer shareholders of Alliance Group have roundly rejected a proposal to set up an external committee to try and broker a merger between Alliance and Silver Fern Farms (SFF). Alliance farmer shareholders defeated two proposals to that affect by 92% and 86% yesterday. Alliance's board had advised farmers to vote against the proposals. Chairman Owen Poole said yesterday he was pleased with the comprehensive result. The past few months had been frustrating with the Meat Industry Action Group a lobby group of farmers wanting a merger and the Natural Products Company pushing for the standalone merger. Poole said the vote had put that to rest and was confirmation of the feedback from the company's recent farmer meetings over the merger. more>>

NZ needs to keep up with GE technology
State science company Agresearch says over 100 million hectares of land overseas is planted with genetically engineered crops, and NZ needs to be able to keep up the technology. "NZ's ability to remain globally competitive may be compromised unless it addresses GE crop and animal issues," Agresearch general manager of applied biotechnologies, Jimmy Suttie, said today.He said recent studies suggested that NZers were becoming progressively less opposed to GE organisms, especially when there was an opportunity to improve human health. Agresearch today called on NZers to make submissions to the Environmental Risk Management Authority (Erma) over its controversial genetic engineering applications. Agresearch is asking for a wide-ranging expansion of its transgenic livestock programme as it carries out research to underpin a national network of farms producing GE milks containing specialised proteins, and other products which can be used for pharmaceuticals or functional foods. more>>

$6 million upgrade at Finegand meat works
A multimillion-dollar fit-out during the off-season at SFFs' Finegand plant should lay to rest any doubts about the long-term future of Clutha's largest employer, manager Graeme Stanbury said. Following a $20 million upgrade which included a new effluent treatment plant and boiler system, the plant, near Balclutha, is now undergoing a $6 million upgrade of its lamb cutting and beef boning departments. Another $5 million will be spent on annual site maintenance. The plant last season recorded a record beef kill of 61,286, surpassing the previous best kill of 60,996 in 2003. Mr Stanbury said there was no doubt Silver Fern Farms was positioning Finegand to be a key player long into the future. The investment showed the plant was thriving and was here to stay. At its peak, it employed more than 900 staff. Alterations had started in the lamb cuts department, increasing the flow of products and creating extra chilling capacity. After trials at its Silverstream plant, boning robotics technology would be introduced into this area in the coming season. more>>

DINZ delighted with $8+ schedule
Good times are back for the deer industry. Venison prices have jumped to $8.20/kg on the back of a decreased supply into an expanded European Union market. Marketing strategies implemented by DINZ have increased demand for chilled venison at retail outlets in the EU. Chief executive Mark O’Connor says more venison is being consumed outside the traditional game season. However, a major challenge facing the industry is the continuing drop in production. Venison production in NZ has fallen from a peak of 770,000 head in 2005 to 640,000 this season.But the upswing in venison prices is making deer farming an attractive option once again. Comparing deer farming in a mix of 31 farming options on a similar class of land and returns per kilogram of dry matter, deer options took two of the top three spots behind dairying. O’Connor notes that the comparison is based on a schedule of $7.20/kg. With production expected to drop further, O’Connor expects venison production over the next two years to be challenging.‘The challenge now is operating in and managing a lower supply environment.’ more>>

Climate change - tough challenges for livestock
The world’s livestock industries will face a tough future as they come to grips with climate change. In a speech to the 2008 Crawford Fund Conference in Canberra, Australiar. IRL Chief Executive Shaun Coffey says livestock farming will be doubly impacted. “Livestock enterprises are being directly affected by climate change while at the same time contributing to that change.” Mr Coffey, who is a livestock industry expert, told delegates that while there were ready options for livestock farmers to adapt to climate change, the same was not true for mitigating the impact of livestock on greenhouse gas emissions. “In a world where livestock numbers are tipped to double in the next 40 years to meet global food demand, it is not unreasonable to expect emissions from animals will also rise. The task of reducing or maintaining emissions at current levels from livestock is daunting.” He cites one study that suggests the wealthy developed countries of the world such as the US, Australia and NZ may need to reduce meat consumption by up to two-thirds by the year 2050. more>>

Fertiliser price rises will hurt
Shell-shocked sheep and beef farmers still recovering from poor returns and rising costs have been hit again with another fertiliser price rise. "This is a major disaster for the hill country farmer," Tarata farmer Bryan Hocken said. Ravensdown has increased super by almost 10% to $560 per tonne from $511/t. In June last year it was $193/t. Urea has climbed to $1111/t, up from $948/t and $567/t in June last year. DAP rose 16%t to $1783/t. Last June it was $567/t. Potash stays at $859/t. Taranaki Federated Farmers president Peter Adamski said the rise would drastically affect sheep and beef farmers. "With the low returns on farming, fertiliser is one of the major expenses and first to get cut. It will affect production later on. With dairy farmers this will affect the bottom line. Farmers have already taken out the savings on their nutrient budgets. There is no room to move." more>>

M&WNZ names new CEO
M&WNZ Chairman, Mike Petersen has announced the appointment of Dr Scott Champion as the organisation’s new Chief Executive Officer. Dr Champion is currently the GM Market Access and Services with M&WNZ. He will take over the new position on Monday 29 September. Mr Petersen said “Scott has significant knowledge and experience of industry issues and as the leader of the Market Access and Services team, he has shown us an energy for building important industry relationships that deliver benefits for sheep and beef farmers and the wider industry.“Scott has led the development of our beef and sheepmeat marketing programmes and the market access work that contributed to improved access for meat and wool products through the China Free Trade Agreement (FTA) plus the recently announced ASEAN-Australia New Zealand FTA. This is alongside the range of technical issues work that helps protect our beef, and sheepmeat trade and the wool industry. more>>

Record deer semen prices
The top two semen straws in an elite red deer hind sale held at Peel Forest have sold for record prices. Ten semen straws from two of NZ's most impressive Furzeland trophy stags were put to the hammer. The top two semen straws from stag Chancellor Peel sold for record prices of $6,000 per straw, while straws from Chancellor Peel's son, Mega Peel an outstanding spiker, sold for $2,400 each. Peel Forest Estate has been breeding Furzeland genetics since 1994, when they imported live deer, semen and embryos from the UK and established a herd near Geraldine, South Canterbury. Furzeland genetics are renowned internationally for antler development. Top sires are scored on the basis of their antler size and Chancellor Peel has won the National Trophy award three times as well as breeding top priced sires at Peel Forest Estate's annual stag sale. Mega Peel continues the spiker genetics with a higher scoring head than the three year old National champion. Peel Forest use DEERSelect breeding values and have also bred Atlas, the country's top breeding value stag for 12 month growth. more>>

New ag focus at Massey University
Massey University has launched three degrees in AgriScience, AgriCommerce and Environmental Management, to meet the needs of industry and better future-proof graduates pro vice-chancellor of the College of Sciences, Robert Anderson said.
Professor Anderson believes there is more opportunity for graduates of agricultural and environmental degrees now than before. It is about Massey University's Palmerston North campus playing to its strengths, of animal- and land- based disciplines. "Clearly Massey University has been and, thankfully, remains a power-house in the agricultural education and research arena," Prof Anderson said. This is good for Massey University as Government funding for universities is based on its specialist areas rather than the number of fulltime students, as had been the case in the past. more>>

Rural Equities profit result
Rural property investment and management group Rural Equities Limited (REL) has recorded a major jump in annual profit assisted by higher property valuations.Rural Equities, chaired by former Air NZ chairman Sir Selwyn Cushing, today posted June year net profit of $32.4 million compared to $2.7 million last year. REL owns 62.4% of the units in the NZ Rural Property Trust and has the contract to manage the Trust, which owns 30 farms and a pine forest. REL said its huge jump in annual profit reflected strong gains in the value of rural properties over the past year. The Trust's properties and assets are now valued at more than $230 million. Sir Selwyn said REL's performance vindicated investment in the productive rural sector. The key positive influence on the rural sector was very strong demand for dairy and arable properties, or those capable of dairy support operations, which led to a substantial increase in rural land values, he added. "It was also very satisfying to have achieved a level of profitability that was well ahead of many of the more well known listed companies," Sir Selwyn said more>>

Grasslands conference in Marlborough in October
What's new in pastoral farming will be up for discussion at the 70th NZ Grasslands Assoc annual conference in Marlborough in October 14 to 16. Innovation and adaptation is the theme of the conference, which features sessions on biotechnology and nutrient management, as well as tools for decision-making. NZGA executive director Ross White said 40 papers and the poster sessions would represent the latest in agricultural research and delegates will be the first to hear data from several recently completed field trials. PGG Wrightson international seeds manager Richard Green will present an inside and outside perspective of NZ grassland farming. With carbon debits and credits a hot topic in the farming sector, Mr White said there would be strong interest in the "Lowdown on Soil Carbon" , from visiting speaker Dr Jeff Baldock of the Commonwealth Science and Industrial Research Organisation, South Australia. more>>

Dairy farmers outraged by wage demands
Short-staffed dairy farmers were being exploited by southern farm workers demanding "ridiculous" wages, industry insiders said. However, Amalgamated Workers Union secretary Calvin Fisher said he was still hearing many cases of workers being exploited by the farmers and it was "still like the wild west, to be honest". Director of dairy farm workers recruitment company Greener Horizons Workforce Peter Macfarlane said some southern farm workers with little experience were demanding up to $50,000 a year plus free accommodation from farmers struggling to attract staff. This was about $15,000 a year more than would normally be paid, he said. But union secretary Calvin Fisher said when the industry had the ability to exploit farm workers it didn't hesitate. Though there were some good farm employers, the industry had been slow to respond to reasonable employment practices and had "exhausted people off the industry", he said. Dairy farm workers started at 4am and worked huge hours, he said. more>>

Farmers higher prices offset by lower volumes
Don't expect the rural economy to single-handedly turn around the recession, BNZ economists say. The expectation that agriculture will be a saviour is not entirely unfounded, as commodity prices remain well-supported. But there will be some constraints. "The lagged impacts of this year's drought is set to have a major bearing on overall agricultural production over the next 12 months. It forced many sheep and beef farmers to cull breeding stock with the consequence of a sharp drop in lamb numbers predicted this spring. Poor growing conditions in recent weeks have only compounded this, the economists say. Heavy rainfall across much of the country not to mention repeated flooding in areas along the east coast of the South Island has severely hampered grass growth. Dairy farmers will fare better, producing 5% more milk this year, but this will do little more than offset the production loses from meat farmers. "And while the higher relative weighting of dairy farming compared to its meat counterpart might be sufficient to tilt the balance in favour of a net positive result, the overall outcome won't be sufficient to set the broader economy alight." more>>

Fish & Game to take on farmers
A hunting and fishing lobby group says it will ask the High Court to decide whether Crown leases to high country farmers were only meant to be for grazing. Fish and Game is challenging the right of pastoral lessees to restrict access to their properties. It plans to seek a judicial declaration that the farmers were never intended to have extended property rights - such as the right to keep members of the public off the Crown land. For more than 100 years, farmers have been able to pay low rentals to use crown land in the iconic South Island high country for grazing, with restrictions against use of the land for other purposes such as tourist resorts, subdivision, or forestry. "From a public access point of view, we're hugely interested in that. It could be a good outcome for the public." Fed Farmers' high country chairman, Donald Aubrey said he believed the court action was to gain access to privately held land for Fish and Game members.Farmers with pastoral leases had the right to exclude others, just like a tenant in a rented house."It is not practical to farm anywhere if farmers have no control over livestock or their land," Mr Aubrey said. more>>

M&WNZ welcomes FTA success
Mike Petersen, is pleased that Free Trade Agreement (FTA) negotiations with the 10 ASEAN countries have concluded successfully. “This is a great accomplishment for NZ in terms of trade liberalisation,” Mr Petersen said. “The negotiations have been difficult, as NZ had to negotiate one-on-one with each of the 10 member countries. The meat industry urged negotiators to keep the pressure on for full liberalisation without exclusions. “I’m pleased that the Government took that message to the table and has been successful in delivering on it. The ASEAN group of countries is growing fast and we expect it to be a significant market for the future.” While the FTA’s final details won’t be known until it is signed by Ministers in December, Meat & Wool NZ expects to see tariff elimination over an acceptable timeframe for all our products of interest. “Although the current tariffs applied by ASEAN countries are relatively low, the maximum tariffs that can be charged are high. This agreement will eliminate the risk of tariff increases.” more>>

Braced for the challenge in wool
The wool industry is in the throes of a good shake-up. At the heart of the matter is procurement of the clip and reaction to the new kid on the block, The Wool Company (TWC), officially open for business, and accepting wool through NZ Wool Handlers. When the Wool Industry Network (WIN), early this year, released its catalyst-for-change document the authors would barely have envisaged the fallout from their intent to restructure the wool industry through the new company. Wool exporters have attacked the concept, and last week hosted a media day in Wellington to launch their new United Wool Marketers Group and its plans to look for positive and proactive solutions for the wool industry. Passionate about the mission she is on, Ms Gattung said: “I’m concerned if returns to growers don’t improve, New Zealand is going to be one big dairy farm.” Currently, NZ wool is not strongly branded, despite being a premium product. She, along with other proactive wool companies, sees opportunities to market wool as a luxury item, and appropriately segment the rest. more>>

Gattung offers ear to all in wool industry
It was hardly surprising there was little unity in the wool industry given a decade of decaying prices and confidence, chairwoman of the newly formed Wool Company Theresa Gattung says. She said in an interview it was little surprise the industry was so divided and reiterated she would talk to any participant at any time. "The industry has been in slow decline for over a decade. It is not something you can rejuvenate between breakfast and lunchtime." That division took a significant step this week, with some brokers, private buyers, scours, exporters, growers and manufacturers forming the United Wool Marketers Group in direct competition to Ms Gattung's Wool Company. It has the same aims and aspirations as the newly formed joint venture between PGG Wrightson and growers, with the difference appearing to be historical and personal. more>>

Carbon tax a threat to economic viability
Hororata farmer Gavin King would rather slaughter his sheep and cattle than pay an estimated $168,000 a year in carbon tax for belching and farting livestock. He said few farmers seemed to realise the full implications for their farm business of the Emissions Trading Scheme to reduce global warming. Many farms would fall over depending on the final tax rate and it would severely hurt service industries, he said. "We could survive, but I am not going to pay carbon tax on my animals farting and burping. He said he was prepared to pay carbon tax for greenhouse emissions from fuel used on the farm, but not for livestock emissions of methane and nitrous oxide. "I cannot accept a tax on animals doing a natural thing," he said. "They have evolved over thousands of years burping and farting and to think we can change that in a short time is stupid. Several hundred years ago there would probably have been more animals than today." He said for him, going into cropping would require more energy-consuming machinery. more>>

Genomic selection of dairy bulls
DairyNZ welcomes the world-leading release of genomic selection bulls by LIC and AmBreed this mating season. Dr Bruce Thorrold, DairyNZ Strategy and Investment Leader, supports the breeding companies’ view that genomic selection will increase the rate of genetic gain in the NZ dairy herd. NZ farmers benefit from having a farmer-controlled national animal evaluation system, including a national breeding objective represented by the $BW Index. To maintain the value of a national animal evaluation system to farmers, DairyNZ is committing investment to a project that will integrate genomic, parentage and performance data into a single set of breeding values and a single $BW measure for all bulls. “DairyNZ wants to see genomic selection deliver real gains to farmers,” said Dr Thorrold. “We are working with breeding companies to integrate genomic data into breeding values so that farmers can be confident that the breeding values and $BW for each animal reflects all information available. more>>

Moves to save the meat industry
Resolutions to be considered at special meetings of the two Southern meat co-operatives are designed to avert a collapse of the sheep-meat industry, South Otago farmers were told yesterday. A member of the MIAG executive, Stephen Cullen, told a meeting of 30 farmers at Balclutha yesterday that executives at Alliance and Silver Fern Farms were not talking constructively with each other and he feared the industry was on the brink of collapse. The action group was rallying support ahead of shareholder-initiated special meetings of the Alliance Group on September 5 and Silver Fern Farms on October 7, where remits designed to get companies talking about the future of the industry, and ultimately to get industry consolidation and improved profitability, would be voted on. Action group chairman John Gregan said the 11 resolutions compiled by it were not binding and were split into two parts, the first to get the boards of the two co-operatives talking and the second to make them accountable by standing for shareholder re-election, should there be no progress. He said "resounding" Yes votes for the remits at next Friday's Alliance meeting was crucial as failure would make it pointless to hold the Silver Fern meeting. more>>

Surviving the big snow
Nelson farmers have experienced their most damaging snowstorm, which killed stock and took down trees, power lines, phones, fences and sheds. The heavy snow that fell a week and a half ago took many by surprise. Howard Junction sheep and beef farmer Lloyd Higgins had gone to Christchurch when his son Phillip sent him a text alerting him to the first snowfall and telling him more was forecast. His major concern was stock loss. By the time he got back, sleepy sickness was setting in, with ewes expecting multiple births. Higgins says it is like the animals' motors run in reverse - they run out of energy, become sleepy, shiver and die. Despite injections, 50 ewes with twins and 150 ewes with triplets died even though they were in a well-sheltered paddock. He got other ewes feeding on kale and is lucky to have lots of good baleage. One of the first problems was getting to the stock. "We had a heck of a job getting the gates open," says Higgins. more>>

Fonterra "agressive" $7 target to stay
The forecast payout of $7/kg milksolids (MS) for this season remains an “aggressive target” despite the continuing slide of the NZ $, according to Fonterra chairman Henry van der Heyden.
Although the NZ$ has fallen sharply against the US currency from the 75c level when the forecast was made, to below 70c in mid-August, commodity prices have also “come off considerably,” he said. Worldwide economic factors were creating uncertainty.Across all sectors a cautious approach was being taken as the ripple effects of the financial and credit markets’ woes were felt and commentators were wary about global growth predictions. Based on that uncertainty and the negative response to high retail prices by consumers in some markets, the market “tone” was softer in terms of demand. Milk production in US was up on the previous year by 3.4% compared with the same month last year when dairy commodity milkpowder prices hit record levels. As a result, exports of skim milkpowder out of the US have also lifted, boosting global supply.“The outcome of all this is that the market tone is for a softening in prices,” he said. Fonterra had expected this when it made its forecast and to date the falls in commodity prices had not been “untoward”, van der Heyden said. But he warned that the market was entering a period of greater volatility than what had been seen previously. more>>

No SFF- bid secrets farmers told
Farmers have grilled executives of rural services firm PGG Wrightson at a Christchurch meeting, where distrust of the company's $220-million bid to buy half of meat processor Silver Fern Farms was apparent.But PGGW managing director Tim Miles said there were no hidden motives and no secret agenda behind the bid. He said some farmers feared PGG Wrightson planned to sneak up on them and "rip the guts" out of their pocket. "Lots of people are looking for them. I'll save you the trouble; they are not there," Miles told the 50 farmer-shareholders at a meeting at Russley Golf Club in Christchurch. Miles said most companies would not do what PGGW was doing without getting 50% plus one vote, but it was doing it for the long-term viability of the industry. more>>

Lack of minerals hits cattle
A global shortage of magnesium oxide is resulting in more cases of clinical grass staggers in cattle due to magnesium deficiency, says NZ Vet Association Ross Beal. Fed as a supplement to dairy cattle, magnesium oxide is in short supply following the earthquake in China's Sichuan province which curtailed mining operations. Mr Beal said some farmers were restricting the amount of magnesium oxide fed and substituting magnesium sulphate and magnesium chloride to try to meet cow requirements. "Dose rates and alternative strategies for magnesium supplementation should be considered carefully with help from a veterinarian." "Cows are either drenched when they come through the milking shed or through an in-line dispenser in their water," he said. "The problem is pre-calving you are not getting the cows through the shed so you can't drench them and the only way is through their drinking water." more>>

How much for a sustainable lamb???
If you look at the typical Southland intensive farm, this is the one with good alternative options, then to produce a breakeven budget you need an $80 lamb. Is this "sustainable"? To answer this you need to answer three questions. First, "will this stop the decline in sheep numbers?" Second, "will this encourage farmers to remain in sheep farming?" and third, "is this a profitability level that will enable good succession planning?" If you answer no to any one of these then you have to say that $80 is not sustainable. What level of lamb value will equate to the profitability of the strongest competitor for land use — milking platforms. On an economic farm surplus to equity basis we need to achieve $155 per lamb to match the current dairy farm.So a lamb value that lies somewhere between $80 and $155. I'll be more specific. I believe a sustainable lamb value is about $115 on the more intensively farmed areas of Southland. Can the market deliver this and can farm practices change to achieve this? Let's be optimistic and say yes — but there's plenty of work to do first. more>>

Fonterra left out in Aussie dairy sale
Fonterra will face a powerful new competitor across the Tasman with National Foods set to buy Australian co-op Dairy Farmers for $1.1 billion. After a competitive sales process, Dairy Farmers announced yesterday that it would recommend the bid by Kirin-owned National Foods to its farmer shareholders. It will require the approval of at least 75% of its shareholders in a vote scheduled for mid-November. Fonterra pulled out of the race to buy Dairy Farmers in June after buying Nestle's Australian yoghurt and dairy dessert business. BusinessDay understands Fonterra and Dairy Farmers had been in exclusive talks with the aim of combining the two co-operatives but talks broke down last year with Dairy Farmers deciding to run a competitive sales process instead. National Foods has given assurances to the Australian Competition and Consumer Commission that it will divest milk-processing plants in New South Wales and South Australia and license some fresh and flavoured milk brands if it acquires Dairy Farmers. more>>

Mid Canterbury dairy farmers best in NZ
Ashburton District has become the leading dairy farming region in the country with a report showing the district's dairy farmers top five categories, including highest milk solids per hectare. New research, commissioned by Enterprise Ashburton and carried out by Berl was released today and shows Ashburton has the largest herds of any district in NZ at 779 cows per herd. This compares with a national average of 337 cows. The Ashburton District had the highest number of kilograms of milk solids per effective hectare in NZ at 1,263, compared with the national average of 934. While Ashburton District does not have the largest farms, it has the highest number of cows per effective hectare (3.36 compared with a national average of 2.81) and produced above average milk solids (376 kg of milk solids per cow on average in 2007 reporting year, compared with the national average of 330). more>>

No changes to milk price until after the election
The Government has baulked at making changes to the supply of "cheap" raw milk to Fonterra's rivals – which would have raised retail prices – in advance of the coming general election. "The time is not right for increases in the price of milk and dairy products for domestic consumers," Agriculture Minister Jim Anderton said. "In the current economic environment, it is not responsible to take decisions that could increase the price of milk for domestic consumers next year." Instead, the Government has rolled over for another dairy season a formula that sets the price of "regulated milk", and told Fonterra to keep supplying 600 million litres for next season.Fonterra controls about 95% of the nation's milk production, which is about 15 billion litres a year, and was initially required by law to provide smaller companies with 400 million litres a year at cost price. Its main rival, Goodman Fielder, gets 250 million litres for its Meadowlea brands, and other independents can each seek up to 50 million litres. more>>

Scientists to trial new TB-control ideas
Landcare Research scientists will trial new pest-control methods in Marlborough this spring which may pave the way for a dramatic reduction in 1080-poison use in NZ. Landcare Research's wildlife ecology and epidemiology science team has been working on possum-control techniques on Marlborough's Molesworth Station for the past three years. Lead scientist Graham Nugent said his team would test three new projects this spring aimed at breaking the tuberculosis (Tb) cycle in wildlife. One, using 1080 poison and a Tb vaccine simultaneously, might be a global first."This idea is to use the smallest possible amount of toxin to knock numbers down and then use the vaccine to ensure that the Tb cycle is well and truly broken," Nugent told Landcare's Discovery newsletter. "The argument is they will work far better together than they would alone." Scientists intend to mix 5 per cent of vaccine baits into the 1080 mix. They expect most of the local possums to be killed by the poison, and hope the remainder will eat the vaccine baits. That should halt the spread of Tb among possums and reduce its spread to cattle. Nugent said Landcare was also trialling vaccinating cattle against Tb. more>>

Meat Coys changing stance on ram lambs
With the bulk of docking in this district only weeks away farmers will be giving serious thought to their male lambs as some meat companies tighten conditions on the supply of ram lambs. Affco and Silver Fern Farms (SFF) have both announced dates after which they will not accept ram lambs, because the taste of older animals can be substandard. Affco livestock manager Wayne File said Affco was basically sending a signal to farmers that it preferred to take other than ram lambs from March each season. "We will probably still accept them in limited numbers but there will be market differentiation and likely price differential as well."If there is a surplus available, ram lambs will certainly have a lower priority for slaughter space. We will still accept cryptorchids for another full season but intend to review that policy again in 12 months. "Our advice to farmers is to think seriously about this issue before making decisions at docking time and to discuss likely implications with the meat company representatives." more>>

Wool group denies marketing blunder
Accusations of multi-million dollar wool losses caused by market meddling have been met with puzzled denials. According to wool exporters, a big United States wool buyer will shift his custom from NZ to South America after an attempt to secure his exclusive business by the farmer-backed Wool Industry Network went wrong. The exporters' council alleges Win offered the American who it says wishes to remain anonymous for commercial reasons $2 million in promotional support, provided he gave all his business to the network's new wool company. However, the buyer objected to being tied down like this, so much so that he decided to turn his back on NZ and source his wool from South America. He is said to have secured deals that undercut NZ by 7 to 9 %. He is estimated to have spent as much as $10m in New Zealand in the past year. However, the network, a body set up two years ago with funding from the Govt and M&WNZ to find ways to revive the failing wool industry, denied making any offers to overseas buyers. more>>

Looking for the feed efficency gene
The rising cost of grain combined with the pressure to reduce greenhouse gas emissions are the driving factors behind America’s push to breed more feed-efficient cattle.“US scientists and the US beef industry have watched with interest our research that has lead to trial breeding values for feed efficiency being developed for Australian cattle producers. They are now rapidly developing their own testing capacity to find feed efficient bulls,” said Dr Herd. “Their industry rely largely on corn supply which is being diverted into the production of bio-fuels. Lot feeders are under enormous pressure to reduce the cost of feeding. Improving the animal’s ability to convert food is one way of doing that.” Dr Herd said the Beef CRC was trying to identify the DNA markers associated with feed efficiency in cattle. “It’s an expensive and time consuming process to record each animal’s feed intake and most bull breeders don’t do it. The industry would like a breeding value for their animals based on DNA rather than on actual measurement,” Dr Herd said. But Dr Herd said scientists needed to determine whether selecting animals with genes for improved feed efficiency also affected other production traits. more>>

Heading for the hills
As sheep farming is increasingly pushed into the hills, sheep production systems come under the spotlight in the search for industry sustainability. AgResearch, along with M&WNZ and the Sustainable Farming Fund, is looking at ways to modify sheep production systems to improve productivity and enable farmers to finish their own stock .AgR scientist Tom Fraser says farming steep terrain represents its share of challenges. “The technology you have on flat land is much more difficult to implement in the steep country, but these farmers have lived with hill country before and adapted their systems, so that’s not a major concern.“AgResearch Dr Greg Lambert says the main challenge in finishing on hill country revolves around attempting to finish stock in late summer and autumn where quality, and sometimes quantity, of typical permanent pasture is low. “The surest ways to overcome these warm season deficits is to crop or irrigate, but this is particularly difficult in hill country. One of the areas we have identified as a priority, and we are working with MWNZ on, is generating quality forage so farmers have more flexibility to finish their own animals.” Another common technique is maintaining pasture quality through buying and selling stock at optimum times. This keeps the pressure on pasture so it doesn’t get out of control and lose quality but it means buying stock on an expensive “grass market” when demand is high. more>>

Six years to TB cattle vaccine
Scientists estimate they will have tuberculosis vaccines for possums and cattle ready in six years' time, but they have only secured two years' funding because a long-term prevention strategy hasn't been developed. The Hopkirk Institute has been allocated more than $1million for the next two years to work on a vaccine against Tb for cattle. The AHB responsible for national Tb control, is reviewing its strategy and is due to release its long-term plan in September 2009. FORST is funding the research but doesn't want to commit to funding the full six years without the AHB's long-term plan being announced. The main Tb control strategy now is based on restricting possum numbers and cattle movement. A vaccine for cattle, when developed, could be used in isolated areas where it is uneconomic to try to control possums. more>>

Silver Fern Farms deal positive
An independent report says a 50% shareholding in Silver Fern Farms is valued between $205 million and $225m, with PGG Wrightson's proposed purchase of a half stake for $220m within that range. The Grant Samuel independent adviser's report, released today, said if the proposed transaction is implemented SFF "will be in a significantly stronger financial position and will have the resources to develop a strong international in-market presence". The report noted the management of PGGW and SFF have identified substantial benefits to flow from the proposed transaction with SFF to gain the bulk of these benefits. "The vast majority of these fall to Silver Fern Farms or directly to supplier shareholders,'' the report said. At present the farmer-owned co-operative SFF had only limited ability to increase its equity and reduce debt, with only limited expenditure for technology upgrades at its processing plants. more>>

Dirty dairying has no place here in NZ
Taupo's Crafar family are making themselves the poster boys for dirty dairying.Their track record suggests they consider public waterways a perfectly appropriate place to tip their cowshed effluent. The Crafar businesses have been prosecuted four times already. Often their tactic has been to plead not guilty then to change their plea virtually at the courtroom door. In this way they maximise the cost to ratepayers for legal preparation and minimise their own costs. A cynic would say the tactic is working for them. The latest fine, $37,500, is petty cash in the scale of operations they now run. But two more Crafar cases are now before the courts so the justice system still has the opportunity to impose a meaningful sentence a maximum $200,000 fine or two-year jail sentence are allowed. Now the industry needs to demonstrate that it will clean up its own messes and Fonterra has not been convincing in its claims of commitment to environmental performance. While Environment Waikato presents the case to farmers from the perspective of environmental responsibility and community expectations, Fonterra needs to be vigorously arguing the business case for clean dairying. And, if that doesn't work with people like the Crafars, Fonterra needs to act on its commitment to stop taking their milk. Simple, effective, fast. more>>

Farmers tip higher prices than MAF
Sheep and beef farmers hope and expect more significant increases in returns than predicted in the MAF’s recent outlook report. Fed Farmers Meat and Fibre chairman Bruce Wills says if the levels cited by MAF prove to be true, it will be very disappointing. The $3.84/kg price for lamb tipped for next year in the Situation and Outlook (SONZAF) 2008 report would not cover costs of production. ‘It has got to be well over $4/kg. And in two years’ time, if costs keep going up, it would need to be much closer to $5/kg than $4 for us to turn around the decline we have seen in sheep numbers,’ he says. ‘My own feeling is we will see prices get quite a bit higher than that and sheep and beef farmers are optimistic they will see some pretty useful increases,’ says Wills. The SONZAF report talks about strength in meat and wool prices, which farmers can see happening with the shortage of supply, combined with a decreasing dollar. more>>

PGGW profit soars
Shares in rural services firm PGG Wrightson touched their highest level in five years after an 80% spike in annual net profit, bolstered by healthy returns to farmers as the rural-urban economic divide widens. After PGGW yesterday posted $73.2 million net profit to June, from $40.6 million a year ago, chairman Craig Norgate said dairy farmers in particular would get even better returns. For the year to June 30, profit excluding capital gains, other one-off items and earnings from the NZ Farming Systems Uruguay rose 35% to $39.2 million.PGGW's share price rose five cents to $2.85 after it revealed its 2008-09 forecast was stronger than analysts' predictions of around $44 million. The shares closed at $2.84. Mr Norgate said the outlook for the year to June 2009 was "substantially above expectations", with expected profit of $50 million to $55 million, including a $4.2 million performance fee from NZFSU based on a share price of around $1.87 for the final quarter of the 2009 year. "We haven't seen the start of the rural economy yet," he said. "Dairy farmers are only just starting to get the money in their pockets. It often takes a couple of years for it to flow through to towns and cities." more>>

Sheep & beef new season outlook
Sheep and beef farm profits will be much better next season with improved in-market prices for lamb, beef and strong wool due to tightening supply and some depreciation in the New Zealand exchange rate, according to Meat & Wool New Zealand’s New Season Outlook 2008-2009. To access the report go more>>

Venison sky high but with pricing fears
The venison schedule is continuing its meteoric rise, lifting more than 60% in the past year. An average 55kg stag is now fetching about $8.60 a kilogram, up from $5.40 this time last year, and is tipped to exceed the $9/kg at the peak of the chilled season. However, industry pundits fear further hikes in the schedule could price venison off the market and some restaurant menus. NZDFA chairn Bill Taylor said farmers were enjoying their most buoyant returns in more than five years. "Deer farmers have waited long enough for good returns and should enjoy them," he said. The current high prices had been driven largely by strong demand for chilled venison overseas, and the creation of new markets outside the traditional game season, as well as a perceived shortage of product. The weakening of the NZ dollar against the euro had also had a major imapct. "I'd say the impact of currency alone has added about $1/kg to the venison schedule," he said. However, DINZ venison services marketing manager Innes Moffat said some consumer resistance was already being felt towards the high prices. "We've got to be careful we don't price venison off the market." more>>

Do your sums with increasing feed prices
DairyNZ is encouraging farmers to do their homework before committing to some of the current increases in feed costs.Maize silage, grazing and grain prices have all increased significantly over the last few months and DairyNZ says now is a good time to review supplement strategies and effectiveness before committing to new contracts.“To get the best value out of supplements, you need to be getting at least an additional 80 grams milksolids per kilo (kgMS) – any less response means you are wasting pasture and supplement. “At a projected payout of $7.00/kgMS, this 80 grams is worth 56 cents/kgDM. We calculate that maize silage purchased for 40 cents standing will cost 55 cents by the time it is transported, stored and fed out. This leaves virtually no margin for other risks,” he said. When costing basic energy feeds, a useful rule of thumb that DairyNZ recommends is to keep supplement costs to 5% of payout or below, in this case, 35 cents/kgDM (at a $7.00/kgMS payout). more>>

Lighting up with cow power
Power generated from cow dung has been identified as one way NZ could make billions from an emissions trading scheme.The work of a Christchurch company in using biomass for electricity generation is offered as an example of a business opportunity in a report issued this morning as a curtain-raiser to a climate change conference in Auckland. A report says businesses could make billions from new technology investments stimulated by the proposed emissions trading scheme. Some of the main opportunities are included in biomass-like opportunities for some farmers to generate electricity from cow manure methane. Natural Systems is already running a pilot project on a Landcorp dairy farm in North Canterbury. Technical director Ian Bywater said a farmer with 850 cows could save up to $30,000 a year in electricity costs. more>>

Alliance considers offshore lamb to meet orders
Alliance Group is investigating using South American lamb to fill orders it is unable to meet from this country. CE Grant Cuff said with sheep numbers declining around the world, Alliance was looking at supplying North American and European markets with South American lamb, the ODT reported. "NZ has looked at it before. It is all a matter of timing and priorities and we think the moment is right to have another look," Mr Cuff said. Alliance was still to decide if the lamb would be sold under its own brands, but initially that was unlikely. NZ sheep numbers have fallen to a 50-year low with this year's lamb kill expected to be six million fewer than last year due to drought and land use change. more>>

Urgent wool industry talks sought
Wool industry leaders and growers are concerned the industry will implode unless warring factions sort out their differences, which have been aired in the media recently. The scrap follows the launch of The Wool Company established under the umbrella of the Wool Industry Network, to attract farmer revenue and wool consignment. The company’s intention is to restructure the wool industry. Entrenched, established wool industry leaders have attacked the plan. Wool Advancement Group (WAG) want to broker an urgent summit meeting within two weeks to bang heads together, establish common ground and find a way forward.If matters are not resolved soon, WAG believes the industry will be destroyed forever. WAG is a voluntary group of high-profile, successful participants in wool and includes entrepreneurs, consultants, manufacturers, processors and retailers as well as strong representation from wool growers. more>>

Lamb prices soaring
Australian lamb surged to $A4.70/kg carcass weight in mid-June, before trading between $A4.53 and $A4.65/kg during the last six weeks, averaging 26% higher than the same period last year, according to Rabobank's Agribusiness Review.Prices for NZ lamb rose a further 25c/kg (6%) over the last month as international markets adjusted to lower lamb availability and an easing NZ$ provided some relief. Prices are now 32% ($1.11/kg) ahead of the same period last year and higher than the 2004 and 2005 peaks as the impact of a much smaller lambing season approaches. The true test will be in the summer months when lamb supplies start flowing through, but already the signs are good for continued better prices than the last three tough seasons. "In terms of traded lamb and sheepmeat, Australasia is the world's largest exporter and sheep flocks are declining. That means a tighter supply of lamb availability. "This is promising for higher prices in the future particularly for key markets such as Europe and North America." more>>

PGGW picks up $19m bonus
New Zealand Farming Systems Uruguay today posted a net after tax profit of US$1.6 million (NZ$2.3m) for the year to June 30, boosted by earnings of US$8m from milk sales, at record prices of about US40c a litre. But the real winner appears to be PGG Wrightson, which has picked up a "performance fee" of US$13.6m (NZ$19.61m) because of a total annual shareholder return of 43% a year since establishment of Farming Systems in December 2006. NZFS said its other "income" was US$18 million – mainly from improvements in the value of livestock, partly driven by the global rise in dairy commodity prices. The company spent US$84m buying a further 10,000 hectares of farmland, regrassing and redeveloping 22,000ha, getting 11 milking sheds operating by the end of the year, and doubling livestock numbers to 50,000 head. more>>

Intervention in the hills
A radical change in sheep farming, matching up hill-country breeders with finishing farms, will take a big step closer to realisation if the SFF-PGGW partnership deal is successful.The move, designed to streamline the farm-to-processer lamb supply chain, is championed by innovative farming company Rissington Breedline and is also being advocated by M&WNZ at meetings around the country. Linking the two farming systems has begun in isolated instances, but progress has been hampered by the attraction for finishers of more lucrative cropping and dairy uses for their land at a time when lamb returns have slumped. Chief executive Keith Cooper says talks between the two rural giants are deciding details of a plan to intervene in the lamb-rearing process.It would entail contracting farmers to breed lambs to certain weights at certain times – possibly even directing them which genetics to use – and buying those lambs. The lambs would then be handed on to contracted finishers to grow to market weights. more>>

Feed switch should pay
Feeding calves on calf milk replacer (CMR) rather than vat milk could pay well this spring, says calf rearing guru Paul Muir, On-Farm Research. Muir calculates 8% milksolids Friesian milk is worth 63c/litre, assuming a payout of $7.90/kg, while casein-based CMR is available at $79.50/bag. That equates to 50c/litre, and whey-based CMRs are available at 40c/litre. ‘You can even buy a ‘brown bag’ of CMR for $57.30/bag which equates to 36c/litre.’ A survey by On-Farm Research in 2004 showed the average dairy farmer rears calves with 316L of milk, about twice as much as bull calf rearers. Muir says those figures hold true today and while much of the dairy farm use is colostrum, transition or even antibiotic milk, there’s a shortfall of about 130L which is usually made up from the vat later in the rearing season. As the vat milk is generally used for older calves there should be little problem with switching to one of the cheaper CMRs, which would save about $30 per calf reared. more>>

Bobby calves rejected for travel
Farmers are still presenting bobby calves in unfit condition despite a booklet detailing best practice guidelines being sent out to all dairy farmers.Road Transport Association western branch spokesman Tom Cloke says truckies are having to refuse calves because they are not up to condition."Basically they don't believe they would stand the journey," Mr Cloke says. "Calves need to be in a dry, covered pen," he says. Mr Cloke says the best practice guideline pack, sent out to all farmers, has given truckies leverage when refusing to pick up the calves. "Before, they were putting their neck out. Every farmer got a pack. They are well aware weather protection is part of the guidelines. We can go back to the farmer and say they are not meeting them." more>>

Irish wasp here top stay but not in Northland
The AgResearch entomologist who leads AgResearch programme to control clover root weevil, Dr Pip Gerard, says the Irish wasp, introduced from Ireland by AgResearch to control the pest, has for the second successive season failed to establish in the Far North. Yet it has thrived in most other North Island districts despite the summer drought, she says. The clover root weevil is a serious pasture pest. The weevil larvae attack clover roots and nodules throughout the year, which results in less clover available for animals, especially in spring and early summer. Farmers have observed that livestock have slower weight gains and lower milk yields on infested pastures, unless fertiliser levels are increased to compensate. However, the Irish wasp should alleviate this problem. It strikes at the adult weevil, injecting one or more eggs into the abdomen. This makes female weevils sterile, thus breaking the weevil’s life cycle. The wasp larvae grow inside the weevil and kill it when the last larval stage bursts out of the weevil’s body. The larva then pupates in the pasture litter, before emerging as a wasp to start the next generation. more>>

Respect the deer industry
DINZ says the deer industry is being undervalued and that leads to it not receiving the support it should. Chief executive Mark O'Connor told 50 farmers at a deer industry information and discussion forum, in Palmerston North, the venison industry in particular is being undervalued. "We did our own research and it shows that next to dairy grazing, venison production is the next most profitable thing - and that's at a schedule price of $7.10," he said.DINZ supports the NAIT. "Because of biosecurity concerns, consumers want it and the markets expect it." Processors are in favour of NAIT too, because they're seeing market pressure for such a traceability system. He also talked to deer farmers about the industry's stance on the Emissions Trading Scheme (ETS) proposed by the Government. He said depending on what the cost of emissions becomes, at $30 per tonne (believed to be about average) it will cost agriculture in NZ around $320 million a year."At the high end, of $50/tonne, it will drop profit for deer farmers by 200%, which they can't afford." 'We don't support the introduction of the scheme at all. We believe it won't address the issue of Greenhouse Warming at all. The ETS is a red herring," Mr O'Connor said. more>>

State farmer in ETS dilemma
State farmer Landcorp says the proposed emissions trading scheme could spell the end of its pastoral development programme. If the scheme remains unchanged it will render uneconomic any further development in converting forest to dairy farms in central NI. Landcorp chief executive Chris Kelly said that all farmers will take ‘a big hit’ unless ETS is modified. Kelly says if ETS proceeds unchanged and becomes law by 2013, Landcorp expects between a quarter and half of its profits to go as carbon tax. And by 2025, three-quarters of its profits will be disappear as carbon tax. According to Kelly, the dairy development will be stopped at 9000 cows if the proposed ETS is passed without any changes. However, if the scheme is modified and timeframes for agriculture is put further out, Landcorp hopes to have 30,000 cows at Wairakei within 15 years. Kelly points out that if carbon is priced at a conservative $20/tonne, it will add another $20,000/ha in development costs. more>>

Alliance board resists merger approach
Alliance Group directors are warning farmer-suppliers that a merger being advanced by a rival meat co-operative will compromise control and financial returns. Silver Fern Farms last week took the unconventional approach of writing to Alliance's farmer-suppliers asking for their support for a merger. Alliance's bosses were in Milton yesterday for the first of 12 meetings with farmers to discuss issues, including industry consolidation. The farmer-suppliers were told that Alliance directors believed SFF had poorly located processing assets, which would require significant capital to upgrade. Alliance chairman Owen Poole said a merger of Alliance and SFF would not give synergies and commercial benefits commensurate with the risks. The resulting company would not be small and nimble, nor big and dominant in tough overseas markets, and "you're just nowhere", Poole said. "Once farmer ownership is lost, it is largely irrecoverable. If you sell your soul for silver, the prize must be compelling." Poole said the Commerce Commission would require the merged company to sell plants in the South Island to competitors and there would be few market benefits. more>>

M&W Economic services stock survey
M&WNZ’s Economic Service says drought and dairy expansion have had a significant impact on sheep numbers which will be down 4.3 million (-11%) this year to 34.2 million. Executive Director, Rob Davison says the largest decline in sheep numbers is in the South Island where there are 3.0 million less sheep (-15%). North Island sheep numbers are down 1.3 million (-7%). “The drought has forced the slaughter of extra capital stock and accounts for 60% of the decrease in stock numbers while the dairy expansion accounts for the other 40%. Included in the dairy expansion is the increase in dairy support stock that are reared on sheep and beef farms and which have also displaced sheep and beef cattle.Further compounding the situation is an increase in cash cropping at the expense of sheep numbers. This is because crop prices have increased 50% or more due to international price trends. As a result farms with arable land have increased their crop areas rather than restocking with sheep. “We expect export lamb slaughter to be down 6 million (-23%) to 20.3 million lambs. “The export sheep slaughter will be down 3.3 million (-53%) to 2.9 million. more>>

Knitting together for sheep farmers prosperity
Wool prices are the lowest since the early 1950s and farmers can be lucky to cover the cost of shearing - but AgResearch has a vision of a sustainable industry transformed from making low-value commodity wool to high-quality niche products. The MAF says the inflation-adjusted wool price is only 6.2 per cent of the peak of the Korean War wool boom. AgResearch growth and development section manager Allan Pearson says one industry issue is the need to blend wool from different flocks and breeds to produce consistency in the volume manufacturers require. The vision involves linking the production of specific types of wool more directly to end users, Pearson says. "We've got to have new wool types and produce them in large enough quantities to interest or to persuade end users to pay significant premiums for them." The Enhanced NZ Wool Quality Project started late last year with funding from the Foundation for Research, Science and Technology to look at the genetic and protein differences in wool that relate to fibre properties."We can afford to be more ambitious about the properties of wool than we have been in the past," Pearson says. more>>

Second globalDairyTrade complete
Managing Director Fonterra Global Trade, Kelvin Wickham, said the Company was pleased with globalDairyTrade’s second trading event. Overall the prices ranged from US$3705 MT FAS to more than US$4000 MT FAS for product to be shipped from October 2008 to April 2009. “These prices are in line with expectation and reflect the current commodity market environment” said Mr Wickham. The Independent Trading Manager from CRA International informed Fonterra that trading ran for just under one hour. CRA reported there was again good interest from customers and the trading platform performed well. The next monthly trading event is on Tuesday 2 September 2008.globalDairyTrade, an online trading platform, represents a significant change in the way Fonterra sells some of its commodity products, and is a first in international dairy trade. Over the next 12 months Fonterra expects to sell around $NZ 1 billion of whole milk powder on the trading platform, with volumes growing over time. more>>

SFF unviels proposed board
Silver Fern Farms today announced its new eight-member transitional board line-up in the event that the proposed partnership with PGG Wrightson proceeds.Following approval of the partnership arrangement between the two companies by transacting shareholders on 8 September 2008, the existing board would be reduced from 12 directors to eight. Heading the new board would be the current Silver Fern Farms chairman Eoin Garden, who would be joined by three other Silver Fern Farms directors, namely Joe Ferraby, Rob Hewett and independent director Richard Somerville. The four PGW directors would be Craig Norgate, Baird McConnon, Tim Miles and Keith Smith. Chairman Eoin Garden says the new directors bring a level of business acumen and depth of international experience not previously seen in the red meat industry.“Further, the board’s composition underpins a central part of the agreement with PGW, in that farmer shareholders of Silver Fern Farms would retain effective control and influence in the partnership, while the approval of farmer shareholders would be required for resolutions to be passed,” he says. more>>

US dairy poised to resist NZ free tarde push
The US' dairy sector is looming as a major stumbling block for any NZ-USA free trade agreement (FTA). There has been increasing optimism in NZ about such a deal - either as a bilateral FTA or as part of an expanded "P4" trading block with NZ Chile, Singapore and Brunei - but American farm lobbyists worry that NZ dairy exports could flood their domestic market. In the heartland of US dairying, Wisconsin, a Democrat congressional candidate, Roger Kittelson has warned industry in the state could be in trouble if a free trade agreement with NZ materialises. Imports from NZ - such as milk protein concentrates and other milkpowders - would compete directly with Wisconsin's production of milk, cheese, whey, butter, cream and lactose. "I would not support any trade deal with any country that will displace American industries," Kittelson told the Daily Kenoshan newspaper. "We need to ensure that our food supply is secure and we are safe from unfair trade deals." more>>

The south leads the dairy boom
The South Island is driving the expansion of the dairy industry as competition for land in the North Island stymies the march of dairy conversions. Herds in the South Island grew by 13% last year, with 31% of NZ's dairy herds now in the South Island. The South Island growth has come at the expense of lamb finishing where farmers have sold out or converted to dairying. But growth has been halted in the North Island and cattle numbers are dropping as competition for prime dairy land for lifestyle blocks and other non-pastoral uses heats up, according to the MAF's Situation and Outlook report. At June 30 last year, there were 4.2 million dairy cows and heifers in milk or in calf up 0.7% on the previous year while total dairy cattle numbers increased by 1.8%, reflecting the replacement of more heifers for dairy-farm expansion.The growth comes on the back of strong export value for dairy products, which rose 25% to $10 billion for the year to March. more>>

Labour shortage despite the layoff
A labour shortage at NZ meat companies is compromising supply of special products requested by overseas customers.Last season, meat companies were unable at times to meet product specifications that could have earned NZ more money. MIA chief executive Tim Ritchie says the labour shortage forced meat companies at times to compromise back to less labour intensive specifications. This led to some orders not being fulfilled. According to Ritchie the MIA wants processors to have greater flexibility in hiring foreign workers for its labour-strapped plants. It is seeking a recognised seasonal employer scheme, similar to the one adopted by the horticulture industry. According to Ritchie, access to sufficient skills is a real issue for meat processors. more>>

Lean industry fights back
Sheep farmers are ready to adapt to make their industry viable.
Jeremy Absolom tells about his first meeting in London with Marks and Spencer executives to talk over a deal to buy meat from his Hawke's Bay farming company's sheep. "This marketing guy came in and really thrashed the table. They had been able to make three roasts out of the lamb legs they had been getting, but then suddenly the leg sizes changed and they were getting only two and half. Mr Absolom told this story to more than 150 farmers at the annual conference of his company, Rissington Breedline, in Napier last week. It was a salutary lesson of the need to meet the demands of a highly competitive market.The new season's price has yet to be set but last year's began from a base of $3.55 a kg, with bonuses paid to farmers who met their contracted number of lambs, delivered them when they said they would and to "spec" - at the target weight and not too fat. Extra payments were also made for those who farmed sustainably and who used best animal welfare practices, aspects highly regarded by Britain's shoppers. For an 18kg lamb, the average Rissington farmer was paid $70.38, well above the national average of about $61. more>>

Researchers discover meat spaghetti
Picky children may soon be tricked into eating meat, thanks to an accidental discovery by Agresearch scientist Dr Mustafa Farouk.
He was investigating the binding strength of meat proteins when he found mutton or beef can be formed into long, colourful spaghetti-like strings."It tastes like meat and it can look like meat but we can actually change the composition of the product quite a lot so we can mask the meaty flavour," Agresearch spokesman Mike North said. He said many parents found it hard to get children to eat meat but a meaty, protein-saturated "pasta" could be an innovative way of providing more iron and zinc. Mr North said Agresearch was now looking for a commercial partner to market the meat. "We'd really love to see this product on the supermarket shelves". The meat spaghetti could be made out of cheap cuts of meat and even dried as novel snacks. more>>

Irish taught NZ grazing methods
They're keen on using NZ grazing techniques in Ireland. A life member of the NZ Grassland Assoc, Deric Charlton, talked to more than 300 beef farmers in Tipperary, southern Ireland recently about ways to more successfully manage their beef animals. He was invited by the Irish Grassland Association to talk about the Techno Grazing system, put together by Bulls organic farmer Harry Wier. Mr Wier adapted pasture/animal research findings of the former director of DSIR Grasslands, Ray Brougham and others, into a practical and profitable farm management system. It was initially for farming entire bulls, but has later been used for sheep, deer and dairy cattle. Mr Wier developed cost-effective fencing and livestock watering materials, and since 1992 he has trained farmers to use the concept and his equipment successfully on pastoral farms, mainly in Australia, NZ and South America. Through this controlled grazing system, a production levels of about 1100 kg/ha of lwg are achievable with low inputs, a high stocking rate and small group sizes."The most profound benefit of this grazing management capability is that the farmer can carry enough stock through the winter at very low cost, to fully utilise spring production. It means they can get premium prices when selling finished stock before Christmas," Dr Charlton said. more>>

Council soft on dirty dairying
NZ's clean and green image is being sold out on the West Coast by the "complacent" regional council's reluctance to prosecute dirty dairying, environmentalists have claimed. The booming dairy industry was named in a report commissioned by the West Coast District Health Board in June as a factor for the region failing to have any official water sources that met drinking water standards. In recent years, the West Coast Regional Council (WCRC) has failed to get any convictions for dairy farms in the region that breached effluent discharge rules. On the other side of the alps, Environment Canterbury staff can set in train a prosecution but on the West Coast, the decision has to be approved by regional councillors, on the recommendation of staff. more>>

PGW play stymies merger - Alliance
The opportunity for meat industry consolidation has passed, says Alliance Group chairman Owen Poole. SFF and PGW’s proposed partnership makes a merger between SFF and Alliance even less appealing and other parties in the industry, such as Affco and Anzco, have moved on. Poole says he has had a ‘brief, high-level discussion with them’ about that possibility but it remains unappealing. He has ‘a whole page’ of reasons for that, but the key concerns are loss of farmer control, the corporate/cooperative hybrid model, and that Alliance is already vertically integrated. Whether Alliance should engage with the partnership proposal will be an agenda item at Alliance’s shareholder meetings next week so suppliers will have their say. However, he says the group has ‘no immediate plans to rationalise further,’ despite the forecast 2.5 million drop in NZ’s lamb production next season. ‘Alliance, in terms of sheepmeat, is now the biggest player in the country with only six plants, and eight in total… its done its rationalisation. SFF still has 20 more plants.’ more>>

Meat industry expects to profit
Meat companies are expected to report healthy financial accounts in the coming weeks, but they will be tempered by prospects of difficult years ahead from falling sheep numbers. M&WNZ has reported 1.2 million more adult sheep have been killed so far this season compared to last, due to drought and land-use change from sheep to dairying.Listed company Affco reported last week it was experiencing strong market demand for sheep, beef and venison, which was being helped by better market conditions and a lower exchange rate. In the six months to March 31, it reported a $15.2 million operating profit before interest and tax compared to an $18.7 million loss for the corresponding period a year earlier. Silver Fern Farms and Alliance Group also report improved market conditions and expect better financial performances than last year. Companies were benefiting from a higher kill following drought in the North Island and land-use change from sheep and beef to dairy in the south of the South Island. more>>

Consumer meat trends for 2008
The proliferation of food culture and growing worries over food safety has combined to create a flood of information about food products. Here are some trends that industry experts say are likely to influence what consumers will eat in 2008. Research firm Mitel International reported that in the US natural was the fastest growing meat category in 2006 growing by over 17%. In terms of marketing, while organic meat is still popular among consumers, its growth levels are starting to drop. Repeated recalls of meat and produce have drawn attention to the slow and outdated American food safety system, and the government has faced mounting calls for an overhaul. However, unlike the government, marketers work quickly. Expect meat product companies to be touting new and increased safety measures. The ‘90s were all about grocers becoming either massive superstores or sparse warehouses. Today, the trend is toward glamorising the grocery experience. Safeway, for example, says it is overhauling its markets as “lifestyle” stores, sporting larger departments and speciality food bars that promote health, such as organic and natural meats. more>>

NZ primary sector forecasts encouraging
TheMAF is forecasting solid growth for the primary sector over the next five years despite the tougher immediate economic outlook both internationally and locally. The Situation and Outlook for NZ Agriculture and Forestry 2008 report released today, forecasts that while world dairy prices have eased from recent record highs, international demand for food products looks set to keep key commodity prices buoyant for the next five years. Dairy export earnings are projected to peak next year at just over $12 billion – more than 40% higher than last year’s export returns. Prices are expected to ease from recent record highs, but earnings are predicted to remain strong throughout the five year forecast period. Lamb and beef prices are improving and the outlook is brighter in both sectors with beef export earnings, projected to increase by more than 40% over the forecast period. Challenges at home include the 2008 drought, which continues to have a significant affect across the sectors. In the meat sector, this has resulted in wide-spread de-stocking that will lead to falling beef and lamb export volumes next year. more>>

Water everywhere & MAF report card due
Too much drought you say? How about a deluge of water instead. You can control only so much on a farm, and, unlike many businesses, the great outdoors is the factory floor. The summer drought that ravaged many parts of the country was estimated to have cost between $500 million and $1 billion. Fed Farmers president Don Nicolson says warnings from forecasters meant farmers were well prepared for the recent storms. Some farmers have started lambing and calving, but there have been no reports of large stock losses, Nicolson says.The MAF will release its five-year primary sector report card tomorrow. And as for some recent performances, here's the report card: Well done Dairyton, keep up the good work, go to the top of the class. Meatly, you're full of ideas and have plenty of promise but you need to focus lad, focus. Woolley, very industrious, A for effort but poor results, put your cap on straight and don't forget about the point of your assignments. more>>

Deer farmers stock poisoned by 1080
A West Coast deer farmer has lost two thirds of his herd after deadly 1080 pellets were dropped over his property. Before the Animal Health Board drop on July 25, allegedly including a night time drop, Wayne Fairhall of Kaiata, 5km east of Greymouth, had 16 deer grazing his farm block. By Friday, 10 of the animals were dead after grazing on the poisoned pellets and most of the others were holed up in a clump of bush on the farm, their fate unknown. Fairhall said that on Monday the deer were running around fine but when he returned home from work on Tuesday he found a dead deer in the gateway. "I got worried and started walking through the paddock and found more deer. I went round and there was 1080 everywhere."But Vector Control Services, owned by the West Coast Regional Council, disputed Fairhall's claim that the pellet drop had missed the intended zone, saying it had written permission to drop 1080 in the paddock and that stock food had been given to make up for the loss of grazing. However, Fairhall said that permission had been to drop 1080 only in the bush on their property at the back of the farm, and claimed the deer paddocks were meant to be off limits. more>>

Tougher fines called for rural polluters
Fish & Game has called on Fonterra to stop taking milk from the country's largest family dairying business after it copped its fourth conviction for illegal dairy discharges. Taharua Ltd pleaded guilty and was fined $37,500 in the Environment Court in Napier on Friday. The Green Party, however, says that though this is the biggest fine yet in NZ for a single dairy effluent discharge, it is not enough. The party is now calling for bigger fines for rural polluters. CraFarm Group owns 80% of Taharua, one of 14 farms in the central North Island and Waikato in which Allan Crafar, his wife Elizabeth and brother Frank have interests. Fish & Game spokesman Bryce Johnson said the Crafars' record was a disgrace. "It's time for Fonterra to put their money where their mouth is and look at whether these guys should be dairy farming at all. That sort of environmental abuse brings the whole industry into disrepute." Fonterra's sustainable production manager, John Hutchings, said any level of non-compliance was unacceptable. "Over the last year we have been working with Crafar Group management to ensure their issues are addressed." more>>

Experts excited about weighty issue
The Feed Conversion Efficiency Trial got under way at the Westpac Whareroa Research Centre on February 29 and finished at the end of May. Scientists are still collating the results, but already they are showing there is a difference in feed eaten per kilogram of liveweight gained, and it is exciting them. "We weren't certain, but we were hoping there would be," DairyNZ senior scientist Kevin Macdonald says. "If there is a difference in their efficiency in growth then hopefully we can identify a difference in efficiency as milking animals. "What we can say is we know for beef animals there is a wide range of efficiency," he adds. "We were wanting to see if it was the same for dairy cattle. In the preliminary results we have noticed a difference." One hundred and sixty four Holstein Friesian calves with high BW and known parentage were chosen for the research. more>>

Two way deals the 'best option'
NZ should aim for more two way trade deals with countries such as Sth Korea , US and Japan says business groups after the collapse of the latest trade talks. The NZ International Business Forum said it was deeply disappointed the World Trade Organisation meeting in Geneva failed to agree on a way forward in the Doha negotiations, which have been running on and off since 2001. The talks fell over in their ninth day after cabinet ministers reached agreement on about 80 per cent of a package deal that would have eventually saved the world economy US$130 billion (NZ$175 billion) a year in lower tariffs alone. The boost for NZ had been expected to be significant in the long term, but Wellington Regional Chamber of Commerce chief executive Charles Finny said gains would not have come overnight. The gains would not have been as big as the benefit from the previous Uruguay Round of trade liberalisation, which was worth about $1 billion a year to NZ. "Hopefully, we will still realise the gains, but will have to wait a little longer for them." more>>

More analysis less emotion in M&W sectors
Northern Hawke's Bay hill country farmer Bruce Wills spent 20 years in banking. You can tell.His experience as a rural lender with a head for figures is already being called into use just weeks into his new role as chairman of Federated Farmers' meat and fibre section. He is reserving judgment on the recent big moves in the meat and wool industries till he can see more financial detail, and has not hesitated to ring the principals involved to ask for them. "I'm making a bit of a nuisance of myself," he says, "but I think it is my commercial background and new thinking that has got me into this job. I'm looking for commercial outcomes that bring real benefits to our members." He has a young and energetic executive who all rely on income from sheep and cattle to feed their families. It is a critical time for agriculture, he says. "We're sitting on the precipice of change we haven't seen in generations. We've got to get it right." The changes are happening so quickly that farmers risk approving them based on emotion alone. "We have to see the business case and it has to be analysed. That's my interest." more>>

Gross margins keep an objective view
I've been updating Southland gross margins over the past couple of weeks, writes Graham Butcher in this week's Rural Solutions. But I'm doing them so the profitability can be expressed as c/kgDM consumed. This is easy enough to do with the likes of Stockpol and some other smaller feed/growth programs. Normally gross margins are shown as profit per hectare. This is still a useful approach, but looking at the feed used adds a further dimension. Finishing summer store lambs is a good example.Obviously purchase price, sale price and lamb growth rate are the keys. Let's say we buy store lambs at $1.80kgLW. They are 28kg, so that's $50.40. We manage to grow the lambs at a modest 180g/day for 56 days to reach 17.2kgCW. Now, the lamb price — I'm going to use $4.20/kgCW, giving a $72.24 lamb and possibly a pool bonus.We have costs, freight, deaths, animal health, slaughter preparation and interest on the purchase price, at a little over $5. All up we've made $17.52 profit over the 56 days. Now, we know that to grow a 28kg lamb at 180g/day to 40kg (17.2kgCW at 43%) it takes 80kgDM of average quality. That's 21.9c profit per kgDM consumed. Is this any good? Well, yes it is. In fact, so far it is the highest return done, but finishing weaner deer is to be done yet and I suspect this may be as good and it runs for nearly a year. more>>

More analysis less emotion in M&W sectors
Northern Hawke's Bay hill country farmer Bruce Wills spent 20 years in banking. You can tell.His experience as a rural lender with a head for figures is already being called into use just weeks into his new role as chairman of Federated Farmers' meat and fibre section. He is reserving judgment on the recent big moves in the meat and wool industries till he can see more financial detail, and has not hesitated to ring the principals involved to ask for them. "I'm making a bit of a nuisance of myself," he says, "but I think it is my commercial background and new thinking that has got me into this job. I'm looking for commercial outcomes that bring real benefits to our members." He has a young and energetic executive who all rely on income from sheep and cattle to feed their families. It is a critical time for agriculture, he says. "We're sitting on the precipice of change we haven't seen in generations. We've got to get it right." The changes are happening so quickly that farmers risk approving them based on emotion alone. "We have to see the business case and it has to be analysed. That's my interest." more>>

Recycling wraps feed wrap
Farmers are using and recycling more silage wrap. An increase in demand for supplementary feed over recent months has resulted in a massive increase in used silage wrap and Slattery Contractors at Matamata has processed nearly 55 tonnes for recycling so far this year, up on just eight tonnes last year. "It really moved with the drought, there were a lot of bales coming in from everywhere," managing director Roger Slattery said. A baler built by Christchurch-based plastic supplier Agpac has been in use to process the plastic wrap for recycling at Slattery Contractors' yard fo about a month. Farmers buy a bin with a liner to store their plastic wrap in for collection by a contractor. "We charge about $40 to pick up the liner and we might pick up once or twice a year, depending on how much they have," Mr Slattery said. The baler needs on average six filled liners to complete a bale, which weighs about 750kg. The wrap is used to make recycling bins and other plastic products. more>>

Gross margins keep an objective view
I've been updating Southland gross margins over the past couple of weeks, writes Graham Butcher in this week's Rural Solutions. But I'm doing them so the profitability can be expressed as c/kgDM consumed. This is easy enough to do with the likes of Stockpol and some other smaller feed/growth programs. Normally gross margins are shown as profit per hectare. This is still a useful approach, but looking at the feed used adds a further dimension. Finishing summer store lambs is a good example.Obviously purchase price, sale price and lamb growth rate are the keys. Let's say we buy store lambs at $1.80kgLW. They are 28kg, so that's $50.40. We manage to grow the lambs at a modest 180g/day for 56 days to reach 17.2kgCW. Now, the lamb price — I'm going to use $4.20/kgCW, giving a $72.24 lamb and possibly a pool bonus.We have costs, freight, deaths, animal health, slaughter preparation and interest on the purchase price, at a little over $5. All up we've made $17.52 profit over the 56 days. Now, we know that to grow a 28kg lamb at 180g/day to 40kg (17.2kgCW at 43%) it takes 80kgDM of average quality. That's 21.9c profit per kgDM consumed. Is this any good? Well, yes it is. In fact, so far it is the highest return done, but finishing weaner deer is to be done yet and I suspect this may be as good and it runs for nearly a year. more>>

Legacy of aricultural scientist 100 years on
This week marks the 100-year anniversary of the birth of Dr C.P. McMeekan, a great innovator and promoter of science who established a legacy for world-leading agricultural science research in NZ. DairyNZ Dr Tim Mackle believes McMeekan’s work on pasture based farming systems gave NZ agriculture a direction still largely in place today. “His ‘Grass to Milk’ systems made NZ famous for its dairy farming,” Dr Mackle said. “He placed great emphasis on dry matter production per hectare, which created a model for low cost dairy production and put NZ in the forefront of the world’s dairy producers. Even today, DairyNZ uses the principles of grazing management he and later, Dr Arnold Bryant advocated to promote profitable dairy farming from pasture.” “McMeekan’s driving motivation was to encourage farmers to adopt the best technologies science could offer. Under him, farming practice formed the basis for experiments at Ruakura and outcomes were assessed on their ease of application on farms, principles which underpin our science to this day,” Dr Mackle said. more>>

Longer lamb season urged
Seasonal lamb production is the biggest handicap facing NZ sheep farmers, according to M&WNZ chair Mike Petersen .He said 75% of the lamb kill occurred from December to May, which was out of sync with the demand for year-round supply of chilled product. "There is an urgent need to address seasonal production. We will never have flat 12 month supply because of our grass-based systems, but we need to flatten the peak and lift the trough," he told farmers at a farmer levy consultation meeting in Winton on Wednesday. Mr Petersen said the total lamb crop could be killed in about 29 weeks with about 4 million killed during the peak of the season and about 600,000 lambs on the shoulders. However, meat companies such as Silver Fern Farms, formerly PPCS, had taken steps to address the production deficit by offering farmers premiums for out-of-season lamb supply. more>>

Low lamb numbers may fuel procurement war?
Falling lamb numbers could lead to a procurement war in Southland this season, independent agribusiness commentator Prof Keith Woodford warned. And while farmers stood to benefit from higher lamb prices, the current overcapacity in the southern meat-processing industry could result in slaughter chains being shut down or plants closed, he said. He believed the coming season could be potentially difficult for processors that were expected to compete aggressively for lamb supply. "We don't want a procurement war. But there's a lot of capacity out there and higher overhead costs are going to be spread over a smaller kill," he said. He believed consolidation of the meat industry was crucial and that a Silver Fern Farms-PGG Wrightson partnership could be key to breaking the cycle of inaction. "It has the potential to be a circuit breaker. "The meat industry is under-capitalised and we need money for market development," he said. more>>

Legacy of aricultural scientist 100 years on
This week marks the 100-year anniversary of the birth of Dr C.P. McMeekan, a great innovator and promoter of science who established a legacy for world-leading agricultural science research in NZ. DairyNZ Dr Tim Mackle believes McMeekan’s work on pasture based farming systems gave NZ agriculture a direction still largely in place today. “His ‘Grass to Milk’ systems made NZ famous for its dairy farming,” Dr Mackle said. “He placed great emphasis on dry matter production per hectare, which created a model for low cost dairy production and put NZ in the forefront of the world’s dairy producers. Even today, DairyNZ uses the principles of grazing management he and later, Dr Arnold Bryant advocated to promote profitable dairy farming from pasture.” “McMeekan’s driving motivation was to encourage farmers to adopt the best technologies science could offer. Under him, farming practice formed the basis for experiments at Ruakura and outcomes were assessed on their ease of application on farms, principles which underpin our science to this day,” Dr Mackle said. more>>

Longer lamb season urged
Seasonal lamb production is the biggest handicap facing NZ sheep farmers, according to M&WNZ chair Mike Petersen .He said 75% of the lamb kill occurred from December to May, which was out of sync with the demand for year-round supply of chilled product. "There is an urgent need to address seasonal production. We will never have flat 12 month supply because of our grass-based systems, but we need to flatten the peak and lift the trough," he told farmers at a farmer levy consultation meeting in Winton on Wednesday. Mr Petersen said the total lamb crop could be killed in about 29 weeks with about 4 million killed during the peak of the season and about 600,000 lambs on the shoulders. However, meat companies such as Silver Fern Farms, formerly PPCS, had taken steps to address the production deficit by offering farmers premiums for out-of-season lamb supply. more>>

Low lamb numbers may fuel procurement war?
Falling lamb numbers could lead to a procurement war in Southland this season, independent agribusiness commentator Prof Keith Woodford warned. And while farmers stood to benefit from higher lamb prices, the current overcapacity in the southern meat-processing industry could result in slaughter chains being shut down or plants closed, he said. He believed the coming season could be potentially difficult for processors that were expected to compete aggressively for lamb supply. "We don't want a procurement war. But there's a lot of capacity out there and higher overhead costs are going to be spread over a smaller kill," he said. He believed consolidation of the meat industry was crucial and that a Silver Fern Farms-PGG Wrightson partnership could be key to breaking the cycle of inaction. "It has the potential to be a circuit breaker. "The meat industry is under-capitalised and we need money for market development," he said. more>>

On track to a big beef
Steak and chips takes on new meaning with a proposal that will ultimately see all livestock in NZ tagged as part of a database tracing animals from paddock to plate. Why do it? To maintain commercial market access in the face of increased demand for traceability from global consumers. Improve tracing of stock for biosecurity purposes. Enhance traceability to protect food safety. Tagging 50 million animals is an ambitious plan. It is also not too popular with farmers, who see it as another unnecessary cost. The National Animal Identification and Tracing project is a joint industry-government initiative that is set to start next year and be mandatory by 2011. Ag Minister Jim Anderton has heralded it as an important move for NZ. "This is how we demonstrate that we are one of the world's leaders in producing high-quality, high-value, safe food," he said. He said the world's markets were increasingly demanding proof that food systems were of high quality, and traceability was an important part of that. more>>

On farm costs leach payouts
Sheep and beef farmers could well be in catch-up mode on returns compared with neighbour dairy farmers, but increased costs for the latter’s high input systems had closed the gap on their milk payouts in Canterbury. Ramifications for farmers of the extremely high inflation had not been thought about much, said Kevin Geddes, senior policy advisor for the Ashburton office of Federated Farmers. He expected the level of input costs would be cut back on farms this year and dairy farmers in particular would have to mine their herd’s fertility to maintain productivity. The same dollar will be spent on inputs but it will deliver a lot less. The four Fs — fertiliser, freight, fuel and food — are the biggest culprits for the 25-26% increase in this season’s budgets for on-farm costs of dairy, sheep and beef. Among the difficulties predicted will be ongoing price increases for fertilisers and supplements. Farmers will need to plan well in advance to ensure supply for when they need it. more>>

PGGW tables meat plan
The proposed partnership between Silver Fern Farms and PGG Wrightson is expected to open up new marketing opportunities for the ailing lamb industry. Yesterday, accountancy firm PriceWaterhouseCoopers released a 36-page business case summary on the corporate giant's proposal to buy a 50% stake in NZ's largest meat company for $220 million. But, it was not the full report SFFs shareholders may have expected, with both companies refusing to release information they said was commercially sensitive. The partnership, which was briefly outlined to farmers at a series of meetings recently, was expected to deliver ongoing annual benefits of $59 million in the short-term and $111 million in the long-term. The benefits would come from savings in livestock procurement, corporate overheads, increased stock volumes and better processing efficiencies and on-farm productivity gains. The aim of the partnership was to bring together the on-farm capability of PGGW with the processing and in-market capabilities of SFF. It was also expected to accelerate SFF' efforts in opening up new markets, expand existing markets and increase revenue from NZ lamb, beef and venison. more>>

Synlait set to process milk
Synlait's new $80 million Dunsandel dairy processing plant will receive its first milk on Saturday as the privately-owned company continues to eye farmland to cement its supply chains. Synlait estimates it will produce $150m worth of high-specification milk powder, mainly for export to Asia, in the next 12 months. The plant will be able to process up to 1.6 million litres of milk a day, and is expected to produce about 30,000 tonnes of milk powder and 5000 tonnes of anhydrous milk fat a year. Discussions with customers started three years ago, with about 80% of the product to go to Asia. The Middle East and South America were other key markets, sales and marketing manager John Begg said. "Asia is attractive ... there's a lot of people there, and increasing westernisation of diets and increasing milk consumption, a growing economy it has all the right ticks beside it."more>>

Ruling puts Fonterra in front for leftovers
The Australian Competition and Consumer Commission has cleared National Foods' and Warrnambool Cheese and Butter's bid for Australian cooperative Dairy Farmers, paving the way for Fonterra to pick up some of the leftovers. The Australian competition watchdog accepted court-enforceable undertakings from the Kirin-owned National Foods that it would sell milk processing plants in New South Wales and South Australia and license some fresh and flavoured milk brands. Fonterra, which withdrew from the Dairy Farmers sales process last month, would then probably be the frontrunner to buy the assets. Dairy Farmers granted National Foods and Fonterra permission to work together to finalise terms to enhance the National Food-led bid. more>>

ETS set to slash dairy returns
Within farming, dairying is probably top of the list that needs to start thinking about how the Emissions Trading Scheme will affect it, says SI Dairy Development Centre executive director Richard Christie.The ETS is set to hit the most productive dairy farms hardest, judging by figures presented at a recent Lincoln University Dairy Farm Focus Day. LUDF’s carbon footprint is 17,700kgCO2eq/h, considerably higher than the 10,340kg figure for the ‘typical’ Waikato dairy farm. However, when that footprint is allocated per kg of milksolids and meat produced, LUDF’s high MS/ha output means it has 11% lower emissions than that typical farm, or 21% lower if use of nitrification inhibitor eco-n is taken into account. The problem is that under ETS that efficiency counts for nothing, says Richard Christie. NZ’s Kyoto commitment is to limit national emissions to 1990 levels or pay for carbon credits to balance the books if it exceeds that. Consequently the ETS has been drawn up on an emissions per ha basis, rather than emissions per unit production, says Christie. ‘Taking account of efficiency doesn’t cut it politically at the moment.’ more>>

Research alert for sheep & beef farmers
Last week's science funding allocation sent a thinly concealed warning to sheep and beef farmers about the need to contribute funds to research. The Foundation for Research Science and Technology last week cut funding to primary industry research projects on reproduction, textiles and beef genomics because of a lack of industry contribution.AgResearch applied biotechnologies manager Dr Jimmy Suttie said while the research organisation had issues with the foundation's funding decision process, farmers should take heed about how pastoral research was being funded and the Government's expectations about industry involvement. That expectation was translated loud and clear by Research Science and Technology Minister Pete Hodgson and the foundation, who both noted the lack in industry co-funding for some projects in this year's round.Dr Suttie said AgResearch was disappointed the foundation took such a "rigid" view to allocating funds, especially given the meat and wool sector was going through a period of low profits. But AgResearch had responded by extending that research to include lamb survivability, making it more practical for farmers, Dr Suttie said. more>>

Vet fears for under weight stock after drought
Underweight animals are causing concern to a Taranaki vet as the effects of the drought linger on. Inglewood vet Jonathan Spencer says while some farmers are managing their stock well, the problem of underweight animals is particularly bad this season. "I have not seen it on such a big scale. In the past there have been the odd one," he says. Dr Spencer is advising farmers with underweight cattle to draught off their thinner cows and preferentially feed them as one solution to the problem. He acknowledges it is more difficult for the sheep and beef farmer to fix the problem and says another solution is to decrease numbers. "It is easier for dairy farmers to solve. They can buy supplements. Dr Spencer says underweight animals are likely to have problems going into calving or lambing. "There are a significant number of welfare issues. If an animal is giving birth it needs to be in good condition. If not, everything else is compromised, the immune system is compromised, it is across the board." Dr Spencer foresees problems in some herds when it comes time for induction. "You can't induce cows when the condition score is below 4.5. We are anticipating possible problems. We are likely to refuse to do inductions. Farmers should be picking out the cows that need induction now and looking after them." more>>

WIN's gamble on wool growers future
The NZ Wool industry will be completely decimated if the Wool Industry Network (WIN) has got it wrong in its mission to restructure the industry and replace wool auctions. A new wool company set up by WIN recently bought the PGG Wrightson wool business and has publicly stated they will restructure the industry and do away with wool auctions. “There will be no going back or getting a second chance for growers once the present wool industry infrastructure and selling system is demolished,” the chairman of the Wool Exporters Council Mr Henderson said. “When it’s gone, it’s gone and at present there are no hard facts out in the public arena around the deal the Wool Industry Network negotiated with PGG Wrightson or how growers’ wool will be sold once the auction no longer exists.” Mr Henderson said the new wool company was attempting to garner public support for an end to wool auctions without publishing any financial facts and figures. “It does not take into account years of relationship building that exporters have spent with end users and the investment of millions of dollar working sometimes months ahead to establish forward contracts.“On the day, the auction is a snapshot of prices that represents a lot of hard work and financial commitment and risk taking. The WIN vision is to assume all of this risk with a grower-owned entity that will have to establish a price ‘on the day’ without the auction, which is presently used as a price indicator for all wool sales. more>>

Change your ways says M&WNZ
A fundamental shift in farming systems and behaviour is needed to rebuild returns and confidence in the sheep and beef industry. That’s the view of M&WNZ chairman Mike Petersen who adds the attitude that farmgate competition is a good thing has to go. Greater use of contract arrangements between breeders, finishers and processors to meet predetermined, market-driven specifications for stock is needed, he says. Exactly how that happens will be down to commercial companies but MWNZ will spell out why it should and urge farmers to back such initiatives at its annual round of levypayer consultation meetings which got underway last week. ‘I still get quite a number of farmers saying to me that premiums from competition at the farmgate are where they make their money. That is the wrong mentality completely,’ says Petersen. Working together along the value chain to better meet market demands and extract more value is the way to go. more>>

Don't hold your breath for a trade deal
Trade Minister Phil Goff is among the trade leaders from 30 countries who have traipsed back to Switzerland to press on with the Doha round of global trade negotiations. The primary sector should wish him luck. If and when a multilateral deal is struck, dismantling protectionist barriers against agricultural imports in some of our key markets, NZ's farm-based exports will be a major beneficiary. But don't hold your breath. The negotiations have dragged on for seven years. As World Bank president Robert Zoellick said last week, progress on farm issues would lift confidence in a world economy strained by soaring food and energy prices and a financial crisis. An open and fair trading system would give farmers in developing countries a reason to expand production, he said (he was the US trade representative when the Doha round kicked off in 2001). Consumers would benefit from lower prices; governments could save on the costs of subsidies and improve their budgets. more>>

More dry matter please we're lambing
No big announcements this week on meat matters except for rumours of Alliance talks with other players to defend their position post the Silver Fern/PGG-Wrightson announcement, Back to more mundane matters like feeding ewes. We are still in maintenance mode right now, scanning is under way and mobs will be resorted ready for different feeding beginning about 6 weeks prior to lambing. Maintenance feeding is now 1kgDM a day and grazing down to 500kgDM residual, unless you have 55kg ewes doing 100 percent. With heavier, higher performing ewes you should be using about 1.1kgDM and a 600kgDM residual for ewes that you just want to hold steady and even then a proportion will lose condition. For ewes hurt by the drought, 1.2kgDM and a 700kgDM residual would be better. About six weeks out from lambing, multiple lambers in particular need that additional feed. Over this time there should be a steady increase that doubles intake to a minimum of 2kgDM. Singles need a lift to about 1.5kgDM but the multiple mob takes priority. If you take out the triplets for some special attention that's good, but in terms of supplying grass DM to satisfy their needs in the last couple of weeks prior to lambing they can't actually eat enough. more>>

US customers keen to buy strong wool
At least two major potential United States strong wool customers have said a shift away from high cost synthetic carpet manufacturing is urgent, says the new Wool Company chairman Theresa Gattung. The negative impact of very high oil prices on the synthetics carpet industry was coming at a serendipitous time for wool, just when the NZ industry is being restructured. Wool's natural and eco-friendly character would enable it to compete strongly for the huge market share lost to synthetics in recent decades. "Some of this is commercially sensitive, but two of the biggest in the industry have told us that this is urgent for them. Manufacturers and retailers are in touch with consumers, know what they want and these groups are hot to trot,'' Gattung said. The former Telecom chief executive has been appointed as independent chairman of the Wool Company, the subsidiary set up by the farmer-owned Wool Growers Holdings (WGH) to buy the PGG Wrightson (PGW) wool business. more>>

Tactical milk pricing subject to complaint
The Commerce Commission is considering investigations into Fonterra for tactical milk pricing and the retail price of dairy products. Dairy Trust and Open Country Cheese, in which it has a cornerstone shareholding, have lodged a complaint about tactical pricing, where Fonterra last season paid contracted suppliers more for milk in areas where it faced competition. Fonterra's tactical pricing policy applied to contracted milk supplied last season in South Canterbury and Waikato where it faced competition from New Zealand Dairies and Open Country Cheese.The policy was to have been subjected to a review, and given the growth of competition this season from Synlait in Canterbury and Dairy Trust in Southland, as well as the need to secure supply for expansion of Fonterra's Edendale plant, observers believe tactical pricing could be extended this season. It is understood Fonterra paid between 12c and 28c a kg of milksolids more to contracted suppliers, than to fully paid-up shareholders. more>>

Aussie farmers gain early ETS advantage
Farmers across the Tasman are relieved they won’t have to pay the financially crippling Emissions Trading Scheme (ETS) costs set to be imposed on their Kiwi counterparts. The Australian Government late last week released details of its much-awaited ETS, which includes delaying agriculture’s inclusion. The sector will not be incorporated into the scheme at the 2010 start date, though it is ‘likely’ to be phased in after 2015. The Australian Government says it does not consider it practical to include agriculture from the start, but hopes to have all major polluting industries covered by 2015.
NZ was the first country to feature the primary sector in an ETS, which will be introduced from 2013, with 90% free allocations to be phased out from 2018.The National Party refuses to support the NZ Government’s ETS on the grounds the policy has been rushed, arguing we should instead follow Australia’s moves. more>>

More SFF rightsizing at Belfast
Silver Fern Farms has proposed to close the sheep and lamb slaughter processing portion of its operation at the Canterbury processing plant near Christchurch.The proposal to shut down the two slaughter chains, which was communicated to staff at the plant today, would impact on a total of 225 processing and 24 administration and maintenance positions. Canterbury employs as many as 450 staff at peak of season. Keith Cooper, SFF CE, says the closure of the slaughter operations was the final instalment of its 'Project Rightsize' for 2008, a programme which was designed to align processing capacity with supply, enhance financial performance, and re-position the business as a true marketing organisation under the Silver Fern brand. "It reflects the overall decline in S I sheep and lamb numbers, which are expected to drop by an estimated 2.2 million next year, as conversions in traditional sheep and lamb farming areas to dairy and alternate land uses translates into lower stock units." These decisive actions, coupled to the proposed partnership with PGGW and commitment of additional capital of $220 million, should now address the concerns Alliance had with a merger last year and create the opportunity for Alliance to recommence merger discussions. This can only benefit suppliers to the two co-operatives," says Mr Cooper. more>>

Dairy is driving the economy
The valuable contribution dairying makes to the NZ economy has been highlighted in a report prepared by Statistics NZ for Fonterra which shows that Fonterra now accounts for a quarter of the country’s export earnings. Fonterra Chair Henry van der Heyden said the figures for the year to May 2008 confirmed “dairying and our dairy farmers as a true cornerstone of our economy.“While there’s an obvious contribution to our export receipts and the trade balance, the real benefits here are the contribution from dairying which starts on the farms of our shareholders and flows through local communities and the regions, and our cities.” In the latest figures dairying’s contribution has risen by more than three percent to a total of 27% of NZ’s export revenues, and Fonterra’s contribution alone is 25%. Clearly much of this increase has been driven by record high commodity prices. If we hadn’t had the drought, which saw our milk production drop by around 4%, the figure could have been even higher. “This is a business that touches every corner of NZ with direct employment and many thousands more jobs and economic activity. Everything from professional services, consultancy and construction work, through to transport, technology and research,” Mr van der Heyden said. more>>

Wool Companys claims questioned
Wool exporters are questioning the validity of much of the publicity about the new Wool Company and say that recently appointed Chairman, Ms Theresa Gattung, has been thrown a hospital pass on a subject that she demonstrated yesterday that she knows absolutely nothing about. Wool Exporters Council executive manager, Nick Nicholson said today that the formation of the new company seems to be all about smoke and mirrors with very little in the way of any real knowledge of, or experience in, marketing wool. He said that there is a lot of rhetoric but very little truth in many of the claims made by the Wool Industry Network about what the problems of the wool industry really are. “Most of the comments by Ms Gattung at the launch of the company on Thursday were nothing short of appalling and her analogies with rugby were, at best bizarre.” said Mr Nicholson “But there were some good bits. They were her references to working with architects and designers to promote wool use.” “These were of course almost direct quotes from a recent worldwide study of Interior Textiles to which the NZ wool industry, including the Exporters Council, was the major financial contributor.” more>>

Co-op status unaffected by merger plans
A merger between Silver Fern Farms and PGG-Wrightson would not compromise the meat processer's co-operative status. It has been asked if corporate shareholding inSFF would mean the new entity would no longer have co-operative status, but SFF chief executive Keith Cooper said PGG-Wrightson would be a transacting shareholder, supplying goods and services to the meat processor and marketer. "The most important thing is to preserve all the characteristics of a co-operative, with a rebate structure, ownership and governance structure." The NZ Co-operatives Association has confirmed that more than a 40% stake by an investor shareholder in a co-operative would mean the loss of co-operative status. Preserving that status in the advent of a merger between the two centred on the type of PGG-Wrightson shareholding. Retaining farmer control was also considered an issue. more>>

Man of the moment- Norgate
Craig Norgate is becoming an increasingly influential player in changing NZ agribusiness’s tired old way of doing things. As chief executive of Kiwi Dairies, one of the two milk companies that merged with the Dairy Board to form Fonterra, he was an architect of the integrated supply chain model that became Fonterra. It is now being applied to other sectors of NZ agribusiness, and is finally gaining traction with the ailing meat industry. He became the inaugural chief executive of Fonterra, but was dumped two years later when his contract was not renewed. In 2003, he formed Rural Portfolio Investments, a 50:50 partnership with the McConnon family of Otago. That company obtained a controlling interest in rural services company Wrightson in 2004.Wrightson soon took over NI rural services company Williams & Kettle, and by 2005 the amalgamation of a big section of the country’s rural services was completed when Wrightson merged with South Island-based PGG to form PGG Wrightson. Since then, PGW has set up Farming Systems Uruguay, which may be used to source livestock under the new PGW-SFF plan. As well, PGW is bringing about rationalisation in NZ’s strong wool industry in partnership with a grower co-operative. This will complement its 50% share in the NZ Merino Company. more>>

Knife still out for SFF rightsize
Silver Fern Farms (SFF) has taken the cutting knife out in a fresh round of restructuring, with the loss of more than 50 meat jobs at its Silverstream plant near Dunedin. But it is promising investment at other South Island operations. Last month, the SFF farmer-owned co-operative cut more than 600 jobs at plants in Dunedin and the North Island, with 16 more now to go at Silverstream and a cap on hiring for the upcoming processing season. The meat processor, the subject of a $220 million partnership deal with PGG Wrightson, yesterday announced the job losses as part of a downsizing of the Silverstream processing facility. SFF, previously known as PPCS, will sell and partially lease back the plant in an agreement worth tens of millions of dollars with Christchurch cool-store business Scales Group already aligned with the processor through Polarcold Stores. more>>

Gattung named to head Wool Company
Former Telecom chief executive Theresa Gattung has been appointed to chair the new strong wools company set up by farmers and rural services company PGGW. The Wool Company has bought Wrightson's strong wool business for $37.5 million – less than the initially-announced sale price of $46 mill. PGG has said the lower final price reflects the exclusion of its mid-micron business from the sale, closing debt levels and final due-diligence adjustments. The mid-micron business has been sold separately to the NZ Merino company. Ms Gattung formerly earned nearly $3 million a year running Telecom, but her payout last year of more than $5 million had $1.8m in "special payments", including a $550,000 restraint of trade deal to stop her going back into the telecommunications field. Directors of the company include PGGW chairman Craig Norgate, whose business has a 40% stake in The Wool Company, Aorangi Laboratories executive director Alan McConnon, Bendigo Station owner John Perriam of Central Otago, and former investment banker Keith Sutton. more>>

Another game of two calves
It's calf-rearing time again. On farms around the country, new homes are being found for the millions of calves produced by the dairy industry. The females will be raised to return to dairying as replacements. The males, if kept, are destined to end up in American hamburgers. The profit difference between the two is enormous. The dairy boom has caused an insatiable demand for cows and contracts for 12-week-old dairy heifers are as high as $600 each - a $300 profit. In contrast, contracts for 12-week-old bulls are rare and predictions are for sales at around $355. Even this may be optimistic. Last year they settled at $315 - a miserly $30 profit before cartage. It's a big worry for the beef industry, which depends on a steady supply of Friesian and cross-bred bulls and steers for the American manufacturing beef market. It looks as if this year NZ will again be unable to fill its US quota. For the past two years exports have been around 80,000 tonnes, well under the 213,000-tonne quota. Paradoxically, this is happening when boneless beef prices in the US are at a record high, when exports of our main competitor, Australia, have slumped because of drought, when Americans are eating more fast food than ever and when US production is expected to fall because of high feed-grain prices. Dr Muir says the most telling statistic was that at the autumn Tuakau calf sale, near Pukekohe, when 40% went to pet food producers, rather than the usual 5%. South Taranaki rearer Mark Stevenson usually rears 2000 calves and describes the beef industry as an "absolute disaster", hamstrung by the imbalance that has a dairy yearling worth four times the price of a beef yearling. "At the moment, the pendulum has swung well over to the dairy side. It might swing back to beef but I reckon dairy still has four or five years on top."more>>

Low scanning results in Taranaki
Initial scanning results show there are 20 to 30 per cent less lambs than last year and, in some cases, up to 25 per cent of mobs are dry. One farmer was reported to have 400 of his 1200 mob dry. M&WNZ regional manager Liz Russell says the dry rates are variable. "It depends on the condition of the stock when people put the rams out. "Some were able to get their rams out early, when the ewes were in better nick. Some got reasonable scanning rates." Ms Russell says Meat&Wool is still working out the number of ewes left in the area and more information will be available at the farm monitor meeting at Tikorangi Hall on Friday. "Many farmers have switched to dairy grazing and changed their systems. There is going to be such a shortage of stock in general, certainly sheep," she says. On a more positive side for farmers, the figures in the July 2008 Australia and NZ Agribusiness Review from Rabobank, show Australian lamb prices are 25 per cent higher and NZ 34% higher than this time last year, despite the high currency. The beef schedule is also on the upward trend with cattle selling up to $2.20/kg liveweight at the sale. more>>

Meat merger talks back on
A meat industry ginger group has succeeded in forcing the two southern processing and marketing co-operatives to call special general meetings and discuss a merger. The MIAG announced yesterday it had the necessary shareholder numbers to force the Alliance Group and Silver Fern Farms to call the meetings at which a resolution calling for an independently-chaired joint working party to look at consolidation would be considered. Group spokesman John Gregan said the proposed PGG-Wrightson purchase of 50% of Silver Fern Farms would have no impact on his group's ultimate plan of creating an entity to handle 80% of New Zealand's red meat procurement and processing. The meetings were unlikely to be called until after September's vote by Silver Fern Farms' shareholders on the proposal to merge with PGG-Wrightson. Alliance Group chairman Owen Poole said he had meetings planned with shareholders next month to discuss his company's strategic plan and would not consider holding a special meeting until after those talks. more>>

Rural fuel theft on the increase
Farm supplies have been pillaged, vehicles drained and small service stations hit as diesel approaches the $2 a litre mark. Dannevirke police are on the lookout for anyone trying to sell cheap diesel after 400 litres of the fuel was stolen from a farm south of Dannevirke last week. Manawatu Neighbourhood Support co-ordinator Allan Muntz had encountered three rural petrol thefts over the past two weeks - two on farms and one on a lifestyle block. Feilding Sergeant Mike Lawton said there had been a number of drive offs in Feilding, especially at service stations on the outskirts of town. "Security cameras, putting pumps onto prepay early and having at least two staff members on at any time were some of the ways to battle the problem, he said. more>>

Dry stock farmers face real pain
Drystock farmers who lost tens of thousands of dollars last season due to the Waikato drought and rising fuel and fertiliser costs are expecting further pain this season. Graeme and Lynn Merchant, who have run a sheep and beef farm in the Waitomo district, for two decades, made a $70,000 loss last season in a good year they can make up to $60,000 profit. As a result, they are expecting this season's profit to be about $48,000 20% less than their top figure- as a resultand are turning to dairy grazing to help pick up the slack. The financial pressure means son Jonathan, 14, who boards at a Hamilton school, is spending more weekends away from home as the couple say it's uneconomical to pick him up every weekend. For farmers the effect is multiple because most are a (long) distance from the city and fertiliser or stock has to be brought in or trucked out.'' Bruce says farmers are hurting from a price increase of 95% last month for superphosphate after a six-month freeze."We are having to go back to the way we were farming 15 to 20 years ago with less input and less productivity.''In June livestock listings on TradeMe increased 40% nationally and is expected to grow if fuel prices continue their climb. more>>

Lime live trial delivers
Farmers often face a decision between increasing production or preserving the environment but Waikato farmer Dave Muggeridge thinks he may have found the answer. A year ago Dave, with McDonald's Lime in Te Kuiti, began a five-year trial, Lime Live, to record the effects of dosing paddocks with smaller amounts of lime at more regular periods. The trial, monitored by soil scientist Paddy Shannon and dairy farm consultant Sue Macky, has seen Dave's 90ha dairy farm at Tatuanui dosed with 400kg of lime per hectare once a year with the exception of two 2ha paddocks. Samples collected from the unlimed paddocks are used to compare with the data from the limed area. Results, released last month, for the first full year of monitoring show an increase in soil quality, pasture growth and rooting weights at deeper levels, which could decrease the amounts of chemicals leaching into waterways. Pasture production recorded so far is 3500kg more per hectare in the limed paddock than the unlimed. It also appears the limed paddock recovered more quickly from the drought than the unlimed paddock. more>>

Contracts could boost wool returns
Woolgrowers consigning their wool to the new forward contract initiative introduced last year by NZ Wool Services International (WSI) will benefit from a premium of between $15 and $30 per bale, says the company. WSI managing director Michael Dwyer is advising growers to sign up to the Purelana branded scheme for the upcoming season. ‘Based on independent analysis, we are confident that growers under contract to us could be better off by up to $30/bale compared to other methods of selling their wool,’ he says. ‘We are able to provide these benefits through the critical mass of the wool we process, which enables us to minimise freight, handling and commission costs that are associated with other methods of selling wool.’ more>>

Putting meat into words
When Kiwi-born, California-based Steve Kay talks about the global meat industry, people all over the world listen. It's 39deg in Petaluma in Northern California and Kay is about to close the door on another working day as an analyst of the mighty meat industry in the United States. The Christchurch-trained journalist has carved out a respected foothold in the sector and, as well as being the editor-publisher of marketing and business newsletter Cattle Buyers Weekly (CBW), he is widely quoted in many of the major publications in the United States, such as the Wall Street Journal and Business Week. He is sought after for his ability to explain an often complicated meat industry in an easy-reading fashion. A measure of the respect he has in the industry is the confidential report from the World Bank that has landed on his table. The bank report cautions that the growing of food for biofuels is responsible for three-quarters of a 140% increase in prices for a randomly selected basket of food from 2002 to February this year. more>>

Gene can increase beef yield
Researchers at Adelaide University have discovered a gene which can increase beef yields by 20%. The gene is a modification of the Myostatin gene and is found naturally in Limousin cattle. Team leader, Dr Wayne Pitchford, says the gene increases the amount of prime cuts."It's pretty exciting really because you're getting about 20% more of the real high value cuts," he says. "The lion muscle, the one that runs down the back that's the highest quality cut, it improves tenderness. more>>

Limousin cattle lead carcass contests
High-yielding limousin cattle are continuing to make waves.The breed won top awards in the Otago-Southland beef carcass competition at the Alliance Group's Mataura plant last Thursday. A 342kg steer finished by Allanton farmer Doug Lindsay was named the champion and winner of the Alan Dodd Trophy while a 290kg heifer bred by Rob Johnstone, of Outram, was reserve champion. "Limousin are not just a flash in the pan — they continue to dominate carcass competitions worldwide," Mr Johnstone said. Mr Johnstone said the limousin was capable of producing twice as much ribeye muscle area — the most expensive meat on an animal — than traditional cattle breeds. more>>

Threat for plans of trade pact
Indonesia's ban on NZ beef could threaten plans to sign a lucrative free-trade pact with South-east Asian nations this year, industry officials say. Trade Minister Phil Goff said the ban announced this week was a threat to more than $90 million of exports annually and would be raised with the Indonesian Government. "NZ is urgently seeking information from Indonesia about the reasons for this suspension," he said. "The NZ embassy in Jakarta will make representations to the Government of Indonesia on this issue. We will seek to have trade restored while any issues are resolved." Goff said NZ would take up the issue at bilateral Trade and Investment Framework talks with Indonesia in Wellington next week. Indonesia, the world's most populous Muslim nation, has cited the halal code, or strict religious certification rules for food, as the reason for its ban. more>>

New thinking urged on costs
Quad bikes may not be a farmer's cheapest form of motorised transport. AbacusBio consultant Jack Cocks said based on a fuel cost of less than $2 a litre, it cost 76c a km to run a 400cc-600cc quad bike compared with an imported 10-year-old Suzuki ute at 40c-50c a km and a double-cab four-wheel-drive utility at 83c a km. Mr Cocks said with fuel prices at $2.19 a litre, costs would be subsequently higher. Typically, sheep and beef farmers budgeted $3 a stock unit on plant and machinery, and given rising costs and the lack of profitability in the industry, he said farmers needed to ensure they did not have "irons disease". He suggested farmers calculate what it cost to run a tractor, whether it was more efficient to run two smaller tractors than a bigger, newer one and whether it was cheaper to get a contractor to do the cultivation. Mr Cocks said his research showed that for many cases it was more efficient to employ a contractor to sow pasture and winter feed crops than to buy and maintain their own direct drill. more>>

N Inhibitors value questioned
A review of nitrogen inhibitors including eco-n, DCn and SustaiN has found they have been over promoted and many claims made about them are unsubstantiated. Independent soil scientist Dr Doug Edmeades was paid by Ravensdown to review a large body of trial work on the fertiliser co-operative's econ-n and competitors' products. Edmeades says it showed Ravensdown's eco-n had little effect on pasture production. It did show a positive effect on reducing soil nitrates, but by how much is still is unknown."We may find that the product is more of an environmental tool to deal with leaching than one to boost production. "Further research on nitrification inhibitors is definitely needed before NZ farmers can use them with confidence." Environmental groups and politicians expect farmers to utilise the likes of eco-n so they can invoke a costly emissions trading scheme (ETS) on farming to combat greenhouses gases. They believe farmers can negate the ETS cost by simply using N inhibitors to produce more grass while protecting the environment. more>>

Venison fit for a Chancellor
NZ farm-raised venison featured on the menu of a summer barbecue in Berlin last week, and among the guests who enjoyed it was Federal Chancellor Angela Merkel. Deer Industry NZ (DINZ) was invited to serve venison at this year’s summer garden party held by a joint Christian Democrat and Christian Socialist (CDU/CSU) parliamentary committee. Merkel, the leader of the CDU political party (and the equivalent of Germany’s Prime Minister) stopped at the NZ venison tasting station and spoke briefly with guest chef Thomas Prehl, before enjoying a taste of the venison on offer. This was one of a series of tasting opportunities organised by the Kiwi deer industry to increase German consumers’ awareness of the quality and availability of NZ farm-raised venison. Germany is NZ’s largest market for venison (exports worth $100 million in the 12 months to May 2008) and around half of the venison eaten in Germany comes from NZ. more>>

Carbon value may be key to farm profits
The value of trees for atmospheric carbon storage may be the saviour of struggling hill country farmers. Carbon farms could produce as much as $10,000/Ha on previously unforested land, says Dr Gary Bedford, director of environment quality for the Taranaki Regional Council. He told Fed Farmers' seminars on the Government's proposed emissions trading scheme: "It may be unpalatable for fourth generation family farmers, but the bottom line is that some of these farms may have more value in carbon, not animals. "The smart money left Auckland a year ago when the property boom started to die, and is being invested in hill country for carbon farming." A carbon farm (or Permanent Forest Sink Initiative) offers land owners the ability to earn credits for carbon sequestered in post-1990 planted forests, covenanted for 50 years but with limited harvesting allowed as long as the forest canopy is sustained. Forest owners have to meet all costs to earn the credits, and be liable for maintaining the carbon stock. They must also develop a cost-effective and scientifically defensible process for measuring carbon in their forest. Dr Bedford told farmers at the seminars last week: "However sceptical you are about the science of climate change, it isn't going to protect you from the policies. The whole world is going down this path of implementing emissions trading schemes. more>>

Future lies in flocking together
A radical change to the design of sheep farms is to be put to farmers by M&WNZ with the aim of providing year-round lambs to overseas markets. In a year in which the industry has heard one big idea after another, this could be the biggest. If it was to work perfectly, it would see closer cooperation between farmers, in which they shared the responsibility - and the profit - for breeding and growing a lamb to the ideal slaughter weight. At present, farmers prevented by climate and terrain from finishing their lambs are forced to sell them on the store markets, where they are bought by farmers on warmer, flat land. This has led to some resentment in recent years when hill country farmers have received as little as $25 for a lamb at a store sale, only to see a finisher get more than twice as much from a meat company a few weeks later. Under M&W's scheme, the two farmers would share the profit. The big benefit would be that it would allow them to speed up or slow down lamb growth to stretch out the season. The companies complain now that too many lambs arrive for slaughter at the season's peak: 77% of all lambs are killed between December and May, creating huge logistical problems. They are forced to sell the lamb into a congested market or freeze it and try to sell it later. However, frozen lamb is not a shopper's preference. M&Wl will shortly begin a round of farmer meetings to explain the idea. more>>

Dairy Trust has big backers
Ambitious new dairy sector player Dairy Trust (DTL) is showing itself as a potentially serious rival to Fonterra. The company in which the multimillionaire Talley family has a strong interest, said today it had acquired a major food industry backer and was launching a full takeover bid for Open Country Cheese.DTL said today that Singapore-based Olam International was buying 25% of it for $101.05 million. After the latest moves, Talley Group controlled-Affco will still be the largest individual shareholder in DTL with 35.5 %, while the Talley Group will own 17% in its own right. Olam, which operates in 56 countries and has 4000 customers, has also entered into a long term marketing agreement for an escalating percentage of Dairy Trust's production volumes. Olam ranks among the 40 largest companies in Singapore by market capitalisation. Olam's chief executive Sunny Verghese said the investment in DTL was "central to our strategy" of developing a global position in the dairy business in the next few years. more>>

The price of hay begins to bite
The effects of the summer drought continue to hurt struggling sheep and beef farmers as well-off dairy farmers drive up the price of crucial winter feed. Farming leaders in areas worst hit by the drought say the price of a conventional bale of hay has almost tripled, with those still holding meagre stocks demanding up to $14 a bale. The price of grass baleage has skyrocketed from an average $70 to $160. Agribusiness consultant David Baker said dairy farmers, who have received record payouts, could afford to pay big prices being demanded for winter feed, and had pushed cash-strapped beef and sheep farmers out of the market. "Those with dairy cows are paying, in some cases, as much as $21 to $28 per week per head of cattle for grazing. Those with beef cows just can't match that, and many are being forced to get rid of their capital stock at the freezing works because the costs just do not stack up. There is a real sense of greed growing out there, as those with the land available for grazing deliberately set out to get top dollar from dairying at the expense of the beef and sheep farmer." more>>

Alliance to retain structure
Alliance, NZ's biggest sheep meat processor, remains committed to its co-operative model, as rival PPCS is preparing to dilute its co-operative structure. Alliance Group chairman Owen Poole said given recent strong feedback from farmer owners, it wanted to keep control of the meat processor with about $1.1 billion in annual sales. Poole did point to media-based "rumours" that this week it would meet Affco, another processor, for informal talks, but he would not comment further. Alliance farmer suppliers have been watching with interest developments at SFF with a challenge to the traditional ownership structure at a time of poor returns to farmers.Poole said any board decisions by the Invercargill co-operative on a response to the PGGW-SFF plan would be kept behind closed doors. Poole expected annual farmer returns to improve 30% next season starting from October 1, compared with the existing season, taking some pressure off farmers. more>>

Higher input prices increase pressure
Higher input prices increase pressure on the sheep and beef sector NZ sheep and beef on-farm costs have increased almost 10% in the year to March 2008. M&WNZ Economic Service Executive Director, Rob Davison said fertiliser, fuel and grazing had seen the biggest cost increases. Fertilizer, lime and seeds as a combined category, are up 30%on last year, fuel is up 23.5% and feed and grazing has risen 13.7%. “However, since March 2008 the price for a tonne of superphosphate has increased significantly from $260 to $480 on 1 June 2008 (+85 per cent) and will impact on fertiliser demand in the 2008-09 farming year. It is cold comfort to know that farmers around the world are also facing these cost hikes with this international price trend.” Mr Davison said similarly fuel increases were impacting on farming operations. The drought conditions throughout large parts of New Zealand over the summer and autumn had contributed to feed and grazing price increases. Interest rates also showed a significant rise of 9% for the year and electricity was up 7.2%. “Local government rates and charges increased 6.6% and this was the second largest increase in 17 years. In the past five years rates have risen 33% an average of 6.6 % a year.” more>>

How farmers vote the issue for Silver Fern Farms
The votes of about 9000 farmers – rebate-receiving suppliers in Silver Fern Farms – will cast a much wider shadow than the future path of their co-operative.Their decision on whether the Silver Fern co-operative should surrender control of its assets to a corporate board in a "partnership" with listed PGG Wrightson has implications for not only its big rival, Alliance Group, but also the dairy sector. Fonterra's 10,000 dairy farmers are wrestling with the concept of handing over their own co-operative's assets and operations to a corporate. They have threatened to veto a preliminary move as a protest against plans to later bring in outside shareholders. In the case of Wrightson and the nation's biggest meat processor, Silver Fern, the proposal is for each to have four directors in the new hybrid Silver Fern.The Wrightson directors will take their seats through the 50%t stake the rural services company wants to buy for $220 million. Much of the money will go for repayment of debt. Cooperatives Association chairman Peter Macdougall said he was concerned about the effect on farmer income if half of Silver Fern Farms is sold to PGG Wrightson. more>>

Westland mulls switch to A2 bulls
West Coast dairy farmers are planning to be the first in the country to produce only the alternative A2 milk.In what would be a highly significant shift for the NZ dairy industry, the more than 330 farmer shareholders of Westland Milk Products are considering converting to purely A2 herds. A2 milk does not contain the protein in normal A1 milk that some link to illnesses such as type-one diabetes, heart disease, autism, schizophrenia and Crohn's disease.Westland is the second largest dairy co-operative in NZ behind Fonterra. Westland chief executive Scott Eglinton told The Press yesterday it was still "very early days" for the move to A2. However, at meetings held around the Coast in the past couple of months farmers had expressed "neutral to positive" support for changing. About two-thirds of Westland's milk was already A2 from jersey cows, he said. more>>

Korean beef exports at risk
Beef exports to South Korea, NZ's second-biggest market, are at risk after the discovery of chemical contamination. Meat tainted with the insecticide endosulfan has prompted an urgent investigation by the NZ Food Safety Authority after a complaint from its South Korean counterpart. The revelation is likely to be a blow to the industry, which was enjoying a boost in sales in the South Korean market amid a ban on beef from the United States over mad-cow fears. The reputation of NZ beef suffered in 2005 when the misuse of endosulfan on cattle on a single farm led to a recall in the South Korean and Taiwanese markets, costing millions of dollars. NZ beef exports are worth about $1.8 billion, according to Statistics NZ. Last year, South Korea was the second-largest market after the United States, at $256 million. Japan and Taiwan are the third and fourth-biggest markets for Kiwi beef. more>>

Effluent compliance a pressing concern
Horizons Regional Council says its phones have been running hot since it told dairy farmers they needed to get their effluent disposal and stock water consents in order before the start of the new season.
Farmers heading into the new dairy season without adequate effluent disposal systems in place face heavy penalties and fines, says the council's regulatory manager Greg Carlyon. The region's 900 dairy operations have been sent letters urging them to contact the council, which covers Tararua, Manawatu, Horowhenua, Rangitikei, Wanganui and Ruapehu districts, if they have expanded herd sizes without modifying their effluent disposal and stock water consents. They were told the council plans to start a concentrated campaign of inspections in August. more>>

Premium paid for non muelsed wool
One of NZ's largest fine wool buyers will next season pay a $A2 ($NZ2.53) a head premium for wool from non-mulesed sheep.New England Wool, which buys for its shareholding Italian processors Reda and Barberis, has announced any wool bought at auction next season from non-mulesed sheep would be paid a $A100 rebate per bale to cover the extra cost of flystrike prevention. NZ Merino chief executive John Brakenridge said New England Wool was the largest auction buyer by value of NZ merino wool, and it was the first company to offer such a payment. Reda also contracted growers to supply wool, and it would include a premium for non-mulesed sheep in its contracts. Mulesing, where skin folds are cut off the breech of lambs to prevent fly strike, has become an emotive issue for animal welfare groups such as People for the ethical treatment of Animals (Peta). more>>

Farms profitable and sustainable
The Ballance Farm Environment Awards celebrated the eight supreme winners from around the country at its Sustainability Showcase in Palmerston North on Friday.The inaugural winner of the NZ Farm Environment Award Trust and MAF Study Scholarship went to Canterbury farmer David Ward, a supreme winner in the 2007 competition. Mr Ward is a mixed cropping farmer, and the annual $15,000 scholarship will enable him to study the use of lucerne for cut and carry crop or to graze dairy cows on. He'll report back to MAF and the trust next year. The Minister of Agriculture, Jim Anderton, in announcing the scholarship, said NZ should celebrate its farmers who take care of the environment. "But to be environmentally sustainable, they also have to be sustainable financially," he said. Mr Anderton said the awards showed that all the supreme winners had good relationships with their farm staff, "and without that, you won't have success on a farm". Once again, the adaptability and reliance of the rural sector comes through, he said. more>>

Implications of tailing & castration of lambs
Animal welfare issues are getting stronger in the UK. The Farm Animal Welfare Council (FAWC) UK, today launched its "Report on the implications of castration and tail docking for the welfare of lambs". The report considers the implications of castration and tail docking for the welfare of lambs and reiterates FAWC's earlier view that castration and tail docking of lambs are mutilations which should not be undertaken without strong justification.Professor Wathes, Chairman of FAWC, said "FAWC believes that scientifically based advice can now be given that will minimise the suffering arising from castration and tail docking."He continued "If castration is warranted, some methods cause more suffering than others and pain relief should be given once practical methods of delivering local anaesthetics and analgesics have been developed." The report recommends that sheep farmers, the meat industry, operators of farm assurance schemes, and retailers should implement the Welfare Code, which requires careful consideration of the need for castration and tail docking, and should introduce measures to avoid these mutilations. more>>

Wool industry starts knitting together
Consolidation in the wool industry is growing with listed rural services and finance company Allied Farmers selling its wool business to The Wool Company. Allied Farmers chairman John Loughlin said the company was pleased to participate as an early mover in the consolidation of the wool industry and contribute to an initiative to grow value in the sector. Progress was desperately needed in the wool industry, Loughlin said. "We have to find ways to get better wool returns and we didn't see that we were going to achieve that on our own and that it was better to facilitate a sensible outcome on behalf of farmers," he said. The business accounted for less than 5 per cent of the national wool clip and the value of the sale was not disclosed. "It's not a particularly large part of Allied Farmers but it's a very useful add-on to the business that Wool Company is acquiring from [PGG Wrightson]," Loughlin said more>>

Silver Ferns head office to be sold
Silver Ferm farms is selling millions of dollars of property, including its central Dunedin head office along with disposing of its recently-closed Burnside deer processing plant. Chief executive Keith Cooper said the decision to sell the three-storeyed 0.33ha George St site, known as Harvest Court, followed an approach by a buyer with an offer "too good to refuse", and had nothing to do with recent closures of processing plants, he said.The 3800sq m building was owned by a holding company, Farm Enterprises Otago, which was 74% owned by Silver Fern Farms (SFF) and the balance by Federated Farmers Otago. SFF would remain the anchor tennant, Mr Cooper said. While the sale was an unplanned opportunity, Mr Cooper said it fitted with the company's plan to quit non-core assets, which had included the recent sale of a United Kingdom lamb-cutting plant and the closure and sale of a South Otago lamb pelt processing business. more>>

Broadband access vital for farmers
Rural people can expect an improvement in technology to result in better internet and phone connections even in remote areas, says Vodafone's chief executive Russell Stanners."It is harder to get out to rural regions. If we look at our wireless network, it covers 97% of where people work, live and play. That equates to about 38% of the geography." Many rural regions fall into the other 3% of the population. "We talked to Fonterra about six years ago, and at that time, we covered 84% of their dairy farmers." Mr Stanners says like any business Vodafone wants to go where there are opportunities, and he thinks there's a big opportunity in the rural sector. But the future for the rural sector might be satellite though."You've seen Bay City announce they have a satellite offering, which means you can get to every single location. That's a broadband offering. Not the fastest broadband, but much better than dial- up.They've brought the cost right down. It's only $49 a month. It's not an offering from us [Vodafone] but a satellite company". more>>

Scepticism on synergies of meat deal
PGG Wrightson's prediction that it can deliver $100 million-plus in annual savings if it buys half of meat cooperative Silver Fern Farms has been greeted with scepticism by analysts. On Monday, PGGW announced plans to buy 50% of Silver Fern, formerly PPCS, for $220 million as a first step in an effort to consolidate the ailing meat sector. At least 75% of Silver Fern's 9000 farmers will need to approve the deal at a vote planned for September. The two companies cited commissioned research from Pricewaterhouse Coopers that said short-term synergy gains from the partnership would be $60 million a year, rising to $110 million a year. "It's very easy to quantify synergies but to actually realise them is another thing," Forsyth Barr analyst John Cairns said. "You only have to go back to the merger of PGG and Wrightsons. They talked about synergies, but I think we're still waiting." First NZ Capital analyst Andrew Mortimer said: "The quantum of those synergies look massive ... but how achievable are they is the question." more>>

Elders say no change to wool business
Elders' NZ business is unaffected by a decision to stop speculative trading of greasy wool in Australia, the company said today. The company said media reports last week that it has stopped wool broking were incorrect. The company has only stopped speculative trading of greasy wool in Australia.He said the NZ business was not affected by the change and would benefit from the freeing up of capital that had been committed to speculative trading in Australia. Elders' NZ managing director Stuart Chapman said broker and auction business Elders Primary Wool was continuing and there was no change to the JS Brooksbank unit. Mr Rodda said that business includes a greasy wool trading operation. "We are acutely aware that current wool prices are unacceptable to growers and we are continuing to look for further opportunities to maximise grower returns," Mr Chapman said. more>>

ETS to load extra costs
A leading economist warns the proposed Emissions Trading Scheme (ETS) will load ‘very significant’ costs onto the agriculture sector, with liabilities likely to range from ‘onerous’ to ‘unsustainable’ for some farming operations. National bank economist Kevin Wilson also cautions in his latest rural report that planting trees to offset livestock emissions may not be the simple solution it has been portrayed as being. ‘Our research suggests that there may be opportunities to sell carbon credits from forestry or combining agriculture with forestry,’ says Wilson. But both require ‘careful management and the value of contingent liabilities could be major’. ‘A decision to change land use for carbon farming should not be rushed.’The most chilling note for farmers in the report points to ‘the impact of the ETS on the profitability of agriculture is likely to be very significant’. National Bank analysis suggests farm businesses will face increased costs on two fronts: first, in the form of carbon charges added onto key inputs (energy, fertiliser and fuel, and second, from the having to pay for emissions generated on farm in the production of agriculture goods. more>>

$220 million meat deal on knife edge
Meat industry players remain guarded over whether farmers will support PGG Wrightson and Silver Fern Farms' partnership proposal - but its success could finally lead to a consolidation and strengthening of the ailing sector. The proposal, announced yesterday, would see PGG take up a 50% stake in the Dunedin-based cooperative of 9000 farmer suppliers. But the scheme still needs 75% shareholder approval - something that remains far from a certainty. One industry insider, however, believes the proposal stands a good chance of succeeding, with farmer sentiment - particularly in the South Island - tilting towards a change. He said its success could see PGG chairman Craig Norgate capitalise on farmer disaffection in the other industry cooperative, Alliance Group, for another merger. "We all agree that there needs to be more collaboration. And a step towards a merger of the co-operatives probably isn't a bad thing." Alliance chairman Owen Poole said the proposal could possibly lead to industry "aggregation", but appears to compromise farmer ownership and control if successful. more>>

Fears rules will crush farming
A Taupo couple are unsure of their future after their farm's value was slashed by $2 million because of tough new farming rules around the lake. Sheep and beef farmers Mary and Robbie Dymock have owned the 271-ha Roma Farm for 26 years but the property was recently valued by the Lake Taupo Protection Trust at $2 million less than its rateable value of nearly $3.2 million.The trust was set up by central government, Environment Waikato and Taupo District Council, to protect water quality in Lake Taupo by reducing nitrogen run-off into the lake from farming. It has budgeted $81.5 million to reduce nitrogen run-off by 20% over15 years. EW has adopted a variation to the regional plan which makes farming in the Taupo catchment a controlled activity. This means farmers need resource consent to increase stock rates and apply fertiliser, and many claim it will make farming uneconomic. Landowners can sell their land to the Lake Taupo Protection Trust and Mrs Dymock said that while they did not wish to sell their farm now, they had made inquiries and were shocked by the value offered." There is no flexibility now with the Resource Management Act (RMA). It really is affecting our business. she said." more>>

Pasture fed cows produce better milk
Good news for Taranaki dairy farmers - cows who eat grass produce milk that is healthier for humans. Those are the findings of Gillian Butler, senior research associate for the agriculture, food and rural development school at Newcastle University in the UK. Mrs Butler is working on a study that has shown a high level of health-beneficial fatty acids in milk from cows that eat grass rather than supplements. The 18 million euro ($NZ37.3 million) European Union-funded project is called Quality Low Input Food and covers a range of areas.Mrs Butler, who specialises in the dairy industry, is particularly interested in the composition of milk and fats, based on what cows are fed. She says dairy farming practices in NZ are comparable to low-input farms studied in the UK. She says several organic farmers from the UK have come to NZ to learn from their counterparts here.Traditionally farmers in the UK used a lot of concentrate for feed. more>>

Meat Coys deny causing taskforce demise
Each of the big four meat companies is saying it is not to blame for wrecking the meat industry task force, the panel set up six months ago to find a strategy to return the ailing industry to profitability. But task force chairman Sir John Anderson says he knows one of them is responsible. "I rang around. I had them in the gunsights," he said yesterday. The task force was set up by M&WNZ in the midst of a third successive year of poor meat returns to farmers and to the companies. Yesterday, with its work hardly begun, it announced its disbandment. It had hired PricewaterhouseCoopers to advise on a strategy, but the accounting and corporate consultancy reported that it could not get the informed consent of all parties to allow it to become involved.Sir John said that because Pricewaterhouse Coopers could not get the consent, it had "reluctantly withdrawn" from the process. PWC also told the task force that one of the companies had said it did not support an industry strategy, instead preferring to follow its own. more>>

Fonterra eye joint bid for Dairy Farmers
Fonterra may link with National Foods and Warrnambool Cheese and Butter in a joint bid for Australia's Dairy Farmers, which is valued at up to A$1 billion ($961.5 million), according to Australian media reports. In an unsourced report, the Australian Financial Review said Dairy Farmers had consented to allow Fonterra to enter discussions with National Foods, owned by Japan's Kirin Holdings , and Warrnambool, releasing them from a confidentiality clause imposed on bidders. Dairy Farmers, which is owned by 2000 farmers and processes one billion litres of milk a year, had been planning to float its manufacturing and marketing division but signalled last year it would look at broader options. Fonterra had separately sought regulatory clearance to bid, along with Italian dairy group Parmalat, which is eyeing a bid alongside Australian farming cooperative Murray Goulburn. more>>

Meat industry taskforce disbanded
M&WNZ says the Meat Industry Taskforce has been disbanded after failing to get enough cooperation within the sector. Chair Mike Petersen says the Taskforce went to great lengths to try and develop a sector strategy looking at the high level issues that would move the industry forward. "Unfortunately some meat companies wouldn't provide informed consent to enable PwC to develop the strategy. The subsequent withdrawal of PwC from the process left the Taskforce with no other option than to disband," he says. However, Mr Petersen says while the sector strategy as first envisaged won't now proceed, M&WNZ is not prepared to lose the momentum for change that continues to build. He says they will be using the farmer consultation meetings planned in July and August to provide key market trend information and to work with farmers on ways they can better respond to market opportunities."We will facilitate farmer discussions and develop strategies for farmers that benefit the areas of the value chain where we can have influence. Those areas are predominantly behind the farm-gate, in market access and development and in a range of risk mitigation areas." more>>

Research affirms TB strategy
Targeting possums to stop the spread of bovine tuberculosis is the right thing to do, new research has shown. Landcare Researchers have confirmed that ferrets and pigs have little or no role in spreading the disease, but were end hosts. Ivor Yockney, from Lincoln, told the recent Federated Farmers High Country committee conference that research on Molesworth Station tried to determine the roles of pigs and ferrets in spreading the disease. It confirmed they were the end hosts and that possums remained the main culprit.Mr Yockney said the research looked at the relationship between habitat, altitude, wildlife and possum numbers, the seasonal movement of ferrets and possums, the prevalence of Tb in pigs, ferrets and possums, the status of pigs in spreading the disease and identifying priority areas for vector control.Possums were caught over all terrain, from valley floors to scree slopes 1700m above sea level, but numbers did decline the higher the altitude.The movement of pigs and ferrets during vector control programmes was considered a risk in negating poison efforts in specific regions. more>>

More deer, fewer sheep targeted
There will be substantially more deer and fewer sheep on White Rock Station this winter as the DINZ South Canterbury/North Otago Focus Farm tunes its enterprises to maximise returns.Ewe numbers on the 1340ha property, which lies on the south side of the Rangitata Gorge, have been slashed from 2000 to 1350 and are likely to fall further while the hind herd is up by a third at 1020.But this is no knee-jerk reaction to the improved venison market or poor store lamb sales, although having to sell store this year due to the dry did hurt financially, says farm manager Ross Stevens. Rather, it is an attempt to better match the forage growth profile of the 60% hard hill country farm to livestock demand, and to make better use of what is grown. Crunching the numbers on the cost benefit of deer fencing the three blocks shows a 16% return on capital should be achieved, based on an $80/SU return from the deer compared with $47/SU from sheep. ‘And that $47/SU isn’t based on this year’s store price. We were looking much more long term,’ says Hyslop. more>>

Federated Farmers meat forum highlights
Fed Farmers staged a forum on the meat industry at its AGM in Christchurch on Tuesday. The forum was designed to draw on a range of opinions from some key people in the sector. Comments
Mike Peterson, M&WNZ
"The status quo is not an option.Food is the new fashion.Food security is a new phenomenon, and there is a need for a new culture in trading and marketing.There is a lack of trust between farmers and companies.So much finishing land is being taken from the sheep for dairying."
Professor Keith Woodford, Lincoln University:
"Processing and marketing lamb is a hard game The meat industry is in trouble for multiple reasons.There is a danger of focusing on the mega merger rather than focusing on co-operative structures.
Overcapacity is a problem - meat company assets are hard to sell for cash and more rationalisation is required."
Simon Gatenby - Taylor Preston Meats:
"Excess capacity is the bane of the lives of people in the industry.
The sheepmeat market is showing signs of recovery. Lamb is almost a luxury meat. Meat farmers need to think carefully about what they want and work out the best way this could be delivered." more>>

Paying the organic price
A world-first 10-year trial by agricultural science institute AgResearch shows hill-country sheep and beef farmers can make the change to organics without harming animal health. But it comes at a price. Production from organics is lower and a substantial premium is needed to make up the difference, the leader of the research, Alec Mackay, says. "Without a premium you're not better off and you also have a system that is more challenging. This explains why the sector is still very small. You have to work a lot harder and you've got fewer options in your toolbox if things come unstuck." However, organic sheep and beef farmers Ian and Heather Atkinson dispute this.The South Wairarapa couple have been selling their organic lamb for eight years and say low production is only likely in a transition period."We are enjoying levels of production and returns equal to or above those of our conventional counterparts and our inputs are considerably cheaper," Mrs Atkinson says. A 2001 Agriculture and Forestry Ministry-commissioned study estimated a Hawke's Bay organic sheep and beef farm would need a premium of 50% for both lamb and beef to make the same profit as a conventional farm. Most meat exporters' premiums for the estimated 30,000 organic lambs killed in the past year were 25%, though one paid 100% above schedule prices for lamb produced to a specific quality for a top-end British supermarket. more>>

Fonterra boosts Aussie prescence
Fonterra is boosting its presence across the Tasman by buying the yoghurt and dairy dessert business of Nestle Australia.The deal, for an undisclosed sum, includes the rights for 28 years to manufacture, market and sell Nestle's brands under licence. Fonterra said it would be the third largest player in that segment with a 16% market share when combined with existing brands of Brownes Fresh n' Fruity yoghurt and CalciYum dairy dessert. The acquisition includes Nestle's Echuca factory in Victoria and brands Nestle Diet and All Natural yoghurts, Milo Mousse, Blissful and Munch Bunch.Fonterra Australia/NZ managing director John Doumani said the acquisition was a step towards achieving the growth strategy for Australia. "By acquiring Nestle's yoghurt and dairy dessert business, it provides us with a national position and complements our existing portfolio where we hold leading national positions in cheese and spreads through our Mainland, Bega and Western Star brands." more>>

Livestock farming needs to change
Livestock farming desperately needs to change to survive, says the new chairman of Fed Farmers meat and fibre section, Hawke's Bay sheep and beef farmer Bruce Wills. "It needs new people, it needs new thinking, and it needs these things now," Mr Wills, 47, said today after being elected at the group's annual meeting in Christchurch today. Mr Wills is also vice-president of Hawke's Bay's Federated Farmers, and farms 10,000 stock-units on hill country north of Napier. "I don't pretend to have huge experience in farm politics," he said. "What I do have is a new approach to farming from a commercial and analytical background". Mr Wills returned to farming only four years ago after having spent 20 years in banking. He has a bachelor of commerce degree from Lincoln University and is both a qualified registered valuer and is a registered farm management consultant. more>>

Boosting lamb survival
A good farm might lose 10% of potential lambs between scanning and docking, but a farm not performing might lose 25%, Sheppard Agriculture consultant Greg Sheppard told farmers. There were a handful at a seminar on management guidelines to improve lamb survival, held at Dannevirke late last week. It was eighth held around the country, and brought farmers the latest research funded by the MAF Sustainable Farming Fund. "They've been attended by sheep and beef farmers who want better lamb survival. They've identified that they have a high death rate and they're looking at ways to improve that."Nationally the wastage rate is about 22-25%, Mr Sheppard said, and they know it can be better. "Feed ewes well, and provide shelter, yes, but animal health such as the vaccination programme, the genetics and the heritability of survival factors need to be taken into account." Mr Sheppard said lamb survivability depends on the size of the lamb, the mothering ability of the ewe and the landscape, the shelter available and contour of the paddock. more>>

Commodity price rises fuel optimism
International meat prices are starting to follow other escalating food values upward, bringing some hope to struggling sheep and beef producers.The predicted global food crisis continues throughout international markets. Meat producers have been hearing for some time the outlook is bright as rising demand for protein outstrips supply, but they are only recently starting to receive some benefits. Lamb prices in the United Kingdom are up 34% on a year ago while beef prices in the United States are a record 21% on a year ago and Westpac economists think further increases are ahead.Westpac expects average lamb prices to nudge $5/kg over the next five years. Local farmers need to continue to work to ensure they are in the best position to take advantage of the global situation and Westpac says establishing a mega-meat company may well improve the chances of getting a better slice of the action. more>>

A calling that's dear to his heart
Deer agent Brian Duggan will never forget a phone call he received in the mid 1990s. It was the late Howard Paterson. "I need 8000 weaners," he said. Such a request from any other deer farmer would seem unusual, but Mr Duggan was used to dealing in big numbers when it came to sourcing stock for Mr Paterson's company New Zealand Deer Farms. A decade on Mr Duggan still buys and sells deer for his large client base that extends south of the Waitaki River. And it's a job he clearly loves. "I'd hate to be one of those people that got up in the morning and dreaded the thought of going to work," he said. Mr Duggan, who has lived and breathed deer since the live capture days, received the Matuschka award at the Deer Industry Conference in Invercargill last month. The award is given to a quiet achiever, and Mr Duggan is a somewhat reluctant, although well-deserved, recipient. more>>

Carbon neutrality not sustainable for sheep, beef
The sheep and beef sector still has concerns that the proposed Emissions Trading Scheme goes beyond meeting NZh’s international obligations – despite the recent amendments by the Finance and Expenditure Select Committee, M&WNZ Chair, Mike Petersen said. M&WNZ has been actively engaging with the Government over the last 12 months to try and ensure sheep and beef farmers are not disadvantaged by NZ’s endeavours to meet its international obligations.“We are disappointed that the select committee has not understood the impact of this legislation on the sector, after we impressed on it the effect of going beyond NZ’s emission targets under the Kyoto protocol. “The sheep and beef industry in NZ is already Kyoto compliant having reduced emissions to below 1990 levels.” Mr Petersen said NZ sheep and beef farmers recognise that environmental sustainability is critical, but there is a balance that must be found so that the sector remains economically viable. “The economic flow-on effects of this legislation throughout rural and the wider economy cannot be under-estimated. This will come at a time that should hold enormous opportunity for NZ as the world looks for secure food supplies.” more>>

Carbon, Farming and Trading
NZ is a small contributor to global greenhouse gasses (GHG) in absolute terms, but large per capita from the influence of pastoral livestock farming. The costs of the proposed NZ emissions trading scheme to be borne by agriculture are significant. There is currently a high degree of uncertainty with government proposals, compounded by both major political parties now suggesting deferred implementation. There is also a significant ongoing policy risk, both national and international. Our research suggests that there may be opportunities to sell carbon credits from forestry or combining agriculture with forestry. Both require careful management and the monetary value of contingent liabilities could be major. We conclude that a decision to change land use for carbon farming should not be rushed. As usual there are no recipes. Read all about this in the June National Bank Rural report more>>

Impacts of drought require ongoing management
The National Drought Committee says the drought will have long term consequences for farmers and the sector must be well prepared to manage the ongoing impact. The immediate impacts of the drought include feed deficits and lower than normal stock condition on most farms. Longer term economic impacts include reduced capital stock numbers, and lighter weight replacement stock, both of which will adversely impact on future production.“The end of the drought does not mean an end to drought issues”, says Phil Journeaux. “The impact of the drought will be felt by farmers through the winter and spring. This will have financial consequences and it is absolutely vital for farmers to make good decisions and plan ahead, especially through the winter.”“Issues highlighted at our meeting this week include feed deficits for winter and spring and the possibility of extreme snow or storm conditions causing a double whammy effect.We are currently in a ‘green drought’ phase which means although the pastures have greened with recent rain, feed deficits are likely to last well into the coming spring. There is a critical need for feed budgeting and farmers are strongly advised to undertake a feed assessment immediately at the very least,” he says . more>>

Ireland's most progressive and profitable dairy farmer
Waikato farmers have the opportunity to hear from one of the world's most successful dairy farmers and businessmen.Michael Murphy is one of Ireland's most progressive and profitable dairy farmers, owning and investing in farms in Ireland, NZ, North and South America, says DairyNZ Field Extension Manager Dave Miller. "He is a Director of seven companies, an investor in shares property and venture capital across many countries."As well as growing his business and investment portfolio at an astonishing rate for over 30 years, Michael is the co-founder of the successful Irish 'Wealth Creation' course and spends a large proportion of his time supporting individuals and businesses to develop effective growth strategies. Michael Murphy's presentation will focus on philosophies on wealth creation and predictions on where the dairy industry is heading five to ten years from now. "There will also be opportunity for questions from the floor, and I'm sure plenty of motivating discussion," says Dave. more>>

Investment establishes the family business
It is a remarkably generous gift. Manawatu dairy farmers Barry and Maree Taylor allowed their sons to use the equity in their farm to borrow $3.2 million to pay for their own 100-hectare farm and the dairy company shares needed to run it. It's all part of their plan to hand over the running of their 950-cow farming operation to sons Michael, 28, and Aaron, 26, and retire, leaving themselves comfortably off. So far, it is working well. The 100ha farm, bought two years ago, is now worth twice what they paid for it and after a high payout year, with the promise of another high one to come, the family business is prospering. The brothers say they are hugely grateful. They had little savings of their own and the backing of their parents allowed them to borrow 100 per cent of the money needed to buy the farm and shares. "A lot of guys work all their lives to get an opportunity like this," Aaron says. more>>

Merger group hits 5pc voter target
The MIAG has moved a step closer to getting the mega meat merger concept back on track. Yesterday it reached the 5% voter threshold required to force a special general meeting between the Alliance Group and Silver Fern Farms (formerly PPCS). However, it could be mid September before both co-operatives get round the table as they have 90 days to do so. MIAG chairman John Gregan still believed a single company with an 80% share of the livestock processing industry was the key to improving returns for sheep farmers. The mega meat company concept fell over earlier this year after PPCS failed to agree to Alliance's terms. PPCS wanted to see a detailed busIness case and objected to the possibility that beef could be excluded from the mega meat company. Silver Fern Farms chairman Eoin Garden said while he had received a courtesy call from MIAG he was awaiting a formal approach before the co-operative would resume talks with Alliance. more>>

Primary industry cause of international envy
Farmers may not feel it, but NZ's primary industry is viewed with envy by its counterparts around the world. The primary sector has increased its contribution to NZ's gross domestic product (GDP) from 14% in 1986 to 17% today, something Associate Prof Hamish Gow, an ex-patriate NZer now a leading United States food marketing specialist, said had not been achieved elsewhere. Prof Gow, of Michigan State University, told the recent NZ Institute of Primary Industry Management conference in Queenstown that farmers throughout the world were trying to develop branded marketing channels, but itwas not easily achieved because they could not get industry unity. Despite that, Prof Gow believed NZ's primary sector had done well, although the models used needed some improving. The key was to concentrate on strategy not structure. more>>

Maize residue helps fibre shortage but has limitations
Maize residue, the straw left over after grain harvest, is proving a popular form of feed for dry dairy cows. Despite the drought breaking rain in the Waikato last month, dry conditions still prevail and many farmers are struggling to build pasture cover for winter. DairyNZ recommends maize residue as a feed option only where there is insufficient pasture cover on a dairy farm (less than 1700 kg DM/ha) and pasture silage or hay is not available. If the feed situation is better than this, other options will provide better use of time and money. Around 20,000 ha of maize grain is grown around the Waikato, Northland, Bay of Plenty, Hawke’s Bay and Gisborne regions, and the resulting crop residue is made up of stem, leaf, husk (the wrapper leaves around the cob) and rachis (the core of the cob). The residue, which can yield up to 13 T DM/ha is normally incorporated back into the soil, but this season is being baled to supply stock feed for drought stricken farmers. While maize residue may be plentiful and very filling, the feed value is low. Tests conducted by FAR, indicate that baled maize residue, excluding the rachis or cob centre, has an energy value around 7 MJ ME/kg DM. That means an intake of 9 kg DM/ha/day is needed to feed to a 500 kg dry dairy cow at maintenance levels. more>>

Value-added approach
High-country tours and rock sales are part of the business mix at a Canterbury farm. Bruce and Lyn Nell took diversification at Middle Rock farm to a new level the day they began selling rocks. Bruce Nell has become a reluctant expert on rocks after decades of developing Middle Rock. Scores of smaller fragments left by retreating glaciers were pushed into heaps in paddocks, often next to a larger boulder that couldn't be shifted, or alongside shelter belts and out-of-sight hollows. But Bruce knew he had hit paydirt when a man inquired if he wanted to sell them for river protection work. Rocks are hardly in short supply at Middle Rock, named, it is generally accepted, in reference to a glacial-age "floater" still perched on a hillside today in the centre of the property. Nearly 7000 tonnes of sold rocks later, they now get stockpiled for easy pick-up in the gate-free lanes that Nell created for easy access around the station. Now even the big ones are prised from their position by bulldozer. This enterprising approach should come as little surprise, because the Nells have made a living out of eking a variety of returns from their high-country farm, which at one point runs alongside the Rakaia River between Windwhistle and Lake Coleridge. more>>

Marketing promotes various messages for NZ meat
Frozen beef is New Zealand's largest export item to the United States, Germany is New Zealand's second most valuable lamb export market and South Korea is New Zealand's second most valuable beef export market. These statistics and more were available at Meat & Wool New Zealand's stand at the Fieldays. Farmers were also able to learn where their meat went and the kind of message used to promote it. Different messages promote our products in different parts of the world. In Germany our lamb is marketed as fun, easy, trendy and a healthy option for meal times, as a quality and delicious meal alternative, and natural and free-ranging for 12 months of the year. South Korea tells customers New Zealand grass-fed beef is safe, a healthy, low-fat, low-calorie, low-cholesterol source of protein and a healthy gift from the pure nature of New Zealand. more>>

Farm prices in Southland almost double
Southland farm prices have almost doubled during the past year, latest Real Estate Institute of NZ figures show. Last month, 108 farms were sold for a median farm sale price of $2,413,750. The price was almost double that of May last year, when the median price was $1,300,000. Southern Wide Real Estate licensee Dallas Lucas said the monthly median sale price varied depending on the size of the farms sold but a 45% price increase was a good reflection of the market. Confidence in the rural sector was strong but the market would stay at similar levels because increasing costs, such as the fuel price shock and a hike in fertiliser prices, would hit farmers, Mr Lucas said. Institute spokesman Peter McDonald said nationally there had been a significant increase in the median farm sale price, particularly for dairy farms. "It's driven simply by Fonterra's payout announcements," Mr McDonald said. Southland's sales surge appeared to be driven by the number of dairy farm sales and conversions in the area, he said. "I understand there are over 100 dairy conversions in Southland and that's what's putting the pressure on (prices). more>>

Farmers urged to stick with deer
The outlook for deer farming is bright, say industry leaders, but it could be undermined by the lure of dairy.Deer-industry leaders are urging farmers to do their homework before quitting deer farming for the greener economic pastures of dairy support. They said that while dairy farming is one of the more profitable land-use options, venison finishing stacked up well alongside dairy cow and replacement dairy-heifer grazing. DINZ venison marketing services manager, Innes Moffat, said independent farm-management budgets had shown deer farming was one of the more "profitable" land-use options, ranking well alongside dairy-grazing options. He urged farmers to stick with the venison industry, which had turned a corner, with demand from traditional European and North American markets "very, very strong". He said dairying was pushing up the price of supplementary feed on deer breeding and finishing units, which was forcing farmers to destock and kill early rather than pay the "inflated" price to take their stock through the winter to kill in the chill season.It was also driving the conversion of deer farms, particularly in Southland, Otago and Canterbury, to dairy units and dairy support at a time when venison was meeting a strong demand in traditional and non-traditional markets. more>>

Grass is still the best and cheapest nutrition
If you are a dairy farmer, with good pasture - feed that to cows, as it is the best nutrition they can get, and the cheapest, DairyNZ principal scientist of animal research John Roche told about 60 farmers at a seminar at the Livestock Improvement Corporation at Awahuri. A nutrition expert, he said dairy farmers need to think hard before adding supplements to their herd. "If they understand their system and feed supplements, then the maximum gain is got from feeding it to a cow who otherwise would be hungry. Otherwise cows will waste pasture to eat the supplement." Dr Roche said if a cow is fed grain in the dairy shed, her brain will tell her she is no longer hungry and she will reduce the time she grazes in the paddock."For every kg of grain you feed, you feed in the shed, the cow will reduce her grazing time by 12 minutes. 5kgs of supplement means an hour less grazing."He advised farmers to consider the costs of supplements."Two years to a year ago, grain increased on the world market 100 percent. And it's gone up 75 percent in the last year again since then. There is no sign of that dropping off."He did tell farmers they should be giving their in-calf cows magnesium supplements. more>>

Trans Tasman collaboration in sheepmeat markets Speaking at a number of NZ Sheep Council Seminars last week, senior Rabobank Food & Agribusiness Research and Advisory analyst Wendy Voss said there was a need for a greater degree of collaboration between Australian and NZ sheepmeat producers to fully take advantage of opportunities in export markets. Ms Voss noted a number of significant differences between Australian and NZ sheepmeat markets; the most marked being the destination of the final product.“In Australia 57% of sheepmeat remains in the domestic market, with the US the largest of the export markets at 12% and only 3% heading to the European Union (EU). The picture is vastly different in New Zealand with less than 10%of sheep meat remaining in the domestic market and a massive 62% exported to the EU.”Ms Voss said that while Australia’s domestic market currently provides the largest market for sheepmeat there has been growth in export sales over the last decade and that the importance of export markets, particularly the US market, is likely to continue to increase in coming years. more>>

Internet saving on fuel costs
More people are turning to technology in response to rising fuel costs.Rural broadband provider Farmside recently reported that during April their contact centre experienced a 97% increase in rural broadband inquiries with a similar pattern emerging through May.Farmside sales and marketing director Nick Carter said many of the new customers cited rising fuel costs as one of the main reasons for getting satellite or wireless broadband. "They realise they can save money by using the internet for errands that have traditionally required a personal trip, like banking, shopping, vehicle registration, study or even doing tax returns."According to the Ministry of Transport Ongoing Household Travel Survey, the average driver in rural NZ spends 300 hours driving nearly 15,000km each year, with 30 per cent of this travel for reasons such as shopping or to carry out personal business.Mr Carter said with the increase in online services offered by the retail, business and government sectors, rural people were becoming more aware of how using the internet could save on travel costs. Based on today's petrol prices, an annual saving of $720.78 would be made by increased internet use for things such as business, shopping and online banking. more>>

AgResearch and Ancare in scientific collaboration Ancare Scientific and AgResearch have combined to fund the further development of a technology that has the potential to increase milk production in dairy cattle.The technology will be trialled over the next 12 months in a project costing in excess of $500,000. This deal is another example of the increasing collaboration between these two key players at the forefront of ‘The Science of Farming’ in NZ, which was also the theme of this year’s National Fieldays, held last week at Mystery Creek in Hamilton.“I think this is a tremendously exciting deal because if this technology works in a practical, farming sense then it could become a significant technology in global dairying,” says AgR General Manager, Applied Biotechnologies Dr Jimmy Suttie. With rising on farm costs of feed and fertiliser, Ancare sees a ready market for new products that improve the effectiveness of dairy farming. “It is about using science to make the job easier and more effective for farmers. For example, the extension of our sheep bolus technology into the cattle market will simplify parasite control in a wide range of situations,” says Director of Ancare Scientific, Colin Harvey. more>>

Taskforce announce process for sector strategy
The Meat Industry Taskforce has today outlined the process it is undertaking to complete a sector strategy for the red meat industry in NZ. M&WNZ formed the Meat Industry Taskforce early in 2008 to assist in rejuvenating the meat industry and to restore profitability for all stakeholders in NZ. It is chaired by Sir John Anderson and comprises senior industry leaders alongside a number of leading non-meat industry business leaders and farmers."The Taskforce has firstly commissioned valuable industry analysis to enable it to objectively identify the key issues that the industry needs to address," Sir John said."Members have agreed that we now need to move to the next stage, which is the completion of a sector strategy which will provide a pathway for the future."I am pleased to announce that we have engaged the services of a leading advisory firm PricewaterhouseCoopers (PwC) to assist us in this process. PwC has a strong history of accounting and corporate advice, which will be invaluable in the development of this much needed strategic focus for the sector," Sir John said. more>>

Not one, but two players mooted
A meat industry leader is advocating the creation of two dominant processing and marketing companies that would compete in NZ but co-operate in selected markets. Anzco Foods chairman Graeme Harrison told a recent NZ Institute of Primary Industry Management conference in Queenstown that he would like to see the industry dominated by two large players, one publicly listed and the other a farmer-owned co-operative. He said the two companies would have the scale to globalise their business but go head-to-head in competition for stock and market share. They would also co-operate in supplying selected markets but leave room for small niche operators.Mr Harrison's alternative suggestion comes after a failed proposal to merge 80% of the processing and marketing industry into one entity, the so-called meat mega merger.He said his proposal would give choice to farmers, allowing them to invest in either a publicly listed or co-operative company. more>>

Records tumble at Mystery Creek
A record 131,629 people went through the Mystery Creek gates at last week's National Agricultural Fieldays, but how much they spent is yet to be seen.Attendance was up 6500 on last year's event and 3819 more than 2003, which held the previous record.On Wednesday, when the agricultural trade show opened, 26,864 people attended one per cent down on last year's record opening day causing some to speculate that the drought had taken its toll and knocked confidence in the farming sector. It will be some weeks before Mystery Creek has collected all the sales information and can release a final sales total, but Westpac expects it to be a record $200 million.Despite the record numbers and a record 1001 stalls, spending was down on the non-farming stalls, with trading comparable to last year, said Mystery Creek chief executive Barry Quayle. He described the overall mood as positive, with vehicle dealers doing well. more>>

NZ Merino Company takes on finer wool business
Sheep farmers will no longer sell wool directly to PGG Wrightson, after it sold its remaining wool business to its joint venture The NZ Merino Company . PGG Wrightson announced yesterday it had sold the finer edge of its mid-micron business for an undisclosed price, after announcing last month it was moving the rest of its wool business to The Wool Company, a new marketing company it formed with farming co-operative Wool Grower Holdings.PGG Wrightson Wool general manager Kevin Winders said The Wool Company would be focused on selling strong wool into the flooring and rug market and NZM was focused on apparel, which was more suited to its finer edge mid-micron wool.PGG Wrightson had about 70% of the mid-micron market share, and that business was now expected to boost the $100 million turnover of NZM about 25%. NZM chief executive John Brakenridge said the company already had 85% market share of the national merino clip and the deal would complement that business while not distracting from the core focus of adding value to the merino clip. more>>

Record earnings for co-op
The boom in dairying and cropping has boosted the fortunes of South Island farming services co-operative CRT, which has posted record earnings.The surplus before rebates to farmer shareholders was $26.6 million from record revenues of $576m for the year to March 2008.Farmers enjoyed rebates of $23.5m from that, made up of trading rebates of $17.5m and a bonus rebate of $6m, comprised of cash and CRT shares.The trading surplus after one-off gains and rebates was $8m, a 122 per cent jump on the previous year.CRT has decided to distribute 75% of it to shareholders $3.6m in cash and $2.4m in shares, leaving an after-tax profit of $2.55m.Chief executive Brent Esler said revenue grew 20 % ( $98 million) to a record $576m for the year to March 2008, due to buoyancy in the dairying and arable sectors, as well as other parts of the farming community.The growth also came from the expansion during the past three years of the company's business in the South Island, where its store numbers rose from 23 to 30. more>>

Fonterra restructure back on table
Fonterra is tentatively moving forward again on plans for a capital restructuring.The shareholders' council has written to farmers calling for submissions on the issue - which was dealt a major blow in March when the board's preferred option of a partial float was shelved.In November, Fonterra unveiled its preferred capital structure to deal with issues of capital for growth, redemption risk and investor choice.The restructure would have created an asset-holding company to be listed on the stock exchange, with two votes needed to complete the journey.However, the first vote to create the two-entity structure was cancelled in February with the board saying it was highly unlikely to get 75% support. In a letter to farmers, shareholders' council chairman Blue Read has called on them to keep progressing the issue. But there was no point in the board wasting time on a capital restructuring plan that will not get support from farmers, he wrote."The council and the board have agreed that farmer acceptability will be included as criteria for evaluating potential capital structure options prior to substantive work being undertaken," he said. more>>

What's in the science pipeline for you?
Science has changed the way we farm, giving us improvements in farm systems, milk harvesting and feed through to improved animal health, reproduction, genetics and environmental management practices, says DairyNZ Chief Scientist Dr Eric Hillerton. "Science will also be vital in helping to address the future challenges facing the dairy industry such as labour shortages, overseas competition, climate change, biosecurity threats and balancing on-farm productivity with sustainability."Visitors to the DairyNZ site, PA16, in the Premier Feature area inside the main Mystery Creek Pavilion at National Fieldays, will hear how their dairy industry good investments are solving these challenges."It is our role at DairyNZ to capture the new knowledge and technology generated from both research conducted in NZ and overseas and from on-farm innovation direct from our nation's farmers," he says. "We then scientifically prove its value, turning it into practical tools and solutions for NZ dairy farmers." more>>

Stock procurement union sounds like good idea
Who would have thought a year ago that super would be in excess of $500 a tonne applied, writes Graham Butcher. Managing this situation, for all farmers, will take some thought.This announcement, together with the last Fonterra announcement, increases the pressure on sheep and beef farmers to consider their options.MIAG has established a "procurement union", which, where possible, will direct stock to processors constructively engaged in industry consolidation".We know that stock available for processing is reducing and in this environment any selective direction of stock will be powerful.This is really the ultimate power that farmers can wield.This power has always been there but this is the first time that an organisational base has been established to do the job.No one would believe that this mechanism could stop the flow of stock to a processing company deliberately ignoring shareholder calls for change or pursuing other action without shareholder approval.But even a 15% shift in directed stock could have an enormous influence on a company's finances for the season.more>>

Brighter outlook for sheep and beef
Prospects are high for a brighter year for sheep and beef farmers, according to Westpac economists.International meat prices are rising strongly and likely to lift further, they say in their latest quarterly review.Lamb prices in the lucrative British market are up 34%t on a year ago and beef prices in the United States have hit a new record to be up 21% on a year earlier. Westpac is predicting this will flow on to farmers. Slaughter prices for a 15kg lamb could average $4.39 a kg over the 2008-09 season, up from this season's estimated average of $3.83.This should be sustained, the economists say, with prices averaging $5 a kg over the next five years.This would put the $15kg lamb at $75 and the prime 17.5kg lamb at close to the $90 level not seen for at least five years.Economists also forecast a rise in bull beef slaughter prices, which could average $3.36 a kg over the new season, up from an estimated $3.16 a kg this season.They enter the recent debate over the future of the meat industry by adding that establishing a mega meat company to control 80 per cent of exports "may well improve the chances of getting a better slice of the action". more>>

Fonterra plans milk price war
Fonterra says it will do everything it can to defend its milk supply after news a rival dairy company is starting up in Wanganui. Dairy Trust has announced plans to set up a powder processing plant in the city and hopes to have it operating by August next year. It will collect milk from as far north as New Plymouth.Oakura land owner Don Harvey says he is considering sending milk from one of his farms to the new company.He is angry Fonterra pays a higher price to contract milkers in other parts of the country where there is competition."To be quite honest, to be fair to my sharemilker, Iwould have to seriously consider supplying the new company, unless Fonterra brings my contract price to maintain at the same price as other companies," Mr Harvey said."Given the fact that this industry has reached the stage where Fonterra is going down the track against the co-op principles of paying farmers more in different areas, for the sake of the farmers, they need the competition." more>>

Rural property market hot
The rural property market is running hot on the back of high milk and grain prices in contrast to lurching city residential sales. Dairy and arable properties have jumped 30% in value in Mid-Canterbury this season with high quality farmland now worth between $40,000 and $50,000 a hectare. In the past year Bayleys Canterbury has sold $200 million of mainly dairy and cropping property in greater Canterbury including several $10m-plus farms since Christmas. Eight farms worth nearly a total of $114m have been sold in Mid-Canterbury by PGG Wrightson since December. The last time PGG sold this many properties in the area was in 1996 when they were worth $2m to $3m each. Dairying is driving the hot market but the often overlooked arable boom has generated high interest in cropping land that can also help feed the rising cow population. more>>

Farmers tipped to splurge out at Fieldays
Organisers are tipping farmers will open their wallets at this week's NZ National Agricultural Fieldays despite a tough season for many sectors. Fieldays general manager Barry Quayle says overall the mood at the show will be positive. "There's no doubt that this emphasis on food [prices] is being recognised as supporting what the farmers have always known, that they're an important cog in the world's economy," Quayle says. "From that point of view I think they're going to be fairly positive that there's a good future out there." Business from the show - held at The Mystery Creek Events Centre near Hamilton from Wednesday until Saturday - totalled $320 million last year. Fonterra last month boosted its already record payout to dairy farmers to $7.90 a kilogram of milksolids - compared with $4.46 last season. It has also made an opening forecast for the new season of $7 per kg. more>>

Beef shortage looming, future good
A lack of demand for beef cattle created by dairy grazing in the district is coming to an end and a beef shortage is looming, says Williams and Kettle stud stock auctioneer Neville Clark. At the combined beef breeders sale at Matawhero yesterday, Mr Clark said he was optimistic the "beef job was on the way up". East Coast cattle were renowned for their quality and buying one of the sound bulls on offer should be considered an investment not a cost."There has been a blip over the last seven to eight months but there are great times ahead," he said.Beanbah's Sid Hain said yesterday's "screaming southerly showers" made for one of the coldest bull sales he could remember. more>>

AgResearch's big ideas to prosper
AgResearch's vision for how we can work together to keep NZ prosperous to 2020 and beyond is captured in these five big ideas: Big idea 1: Future dairy production Double the value of dairy production while halving the costs and impacts on the environment. Big idea 2: Future meat and fibre production Double the value of meat and fibre production while halving the costs and impacts on the environment. Big idea 3: Pestilence-free NZ Reducing the risk of pests and diseases gaining a foot-hold in NZ and helping to manage those already here. Big idea 4: Agriculture and its communities Working with rural communities and agribusinesses to ensure they both remain sustainable for future generations in a global environment. Big idea 5: Opportunities beyond food and fibre Working with other researchers in NZ and around the world to use our knowledge of agricultural plants and animals for valuable new opportunities. more>>

NZ farmers cream it as milk sours
As NZ farmers enjoy record milk prices, their European counterparts are striking and blockading dairy plants and supermarkets over falling prices.German farmers have refused to deliver milk to dairies since last week, with more than half of Germany's 100 or so large processing plants blockaded by tractors and other vehicles.Farmers in the Netherlands, Belgium, Luxembourg, Switzerland and Austria have joined them.Prices paid to European Union farmers for milk have fallen about 30% in six months while production costs are up 8%.The apparent contradiction between New Zealand and European prices is caused by several factors. International prices, particularly for skim milk powder, are off their peaks of six months ago. Partially in reaction to the high international prices, the European Union raised its dairy production quota by 2% last month. And big supermarket chains are using market power to keep prices down.Historically, because of the EU's strict quota system and its payment of export subsidies, European dairy farmers have enjoyed milk prices above world prices. The strife now may be the first teething problems as the EU slowly moves to phase out its quota system for dairy products. more>>

Dairy land prices expected to stabilise
The price of Southland dairy farms has increased 40% in the past eight months and land suitable for converting to dairying has almost doubled in the past year, but experts expect prices to stabilise for a while. Southern Wide Real Estate director Dallas Lucas doubted last Friday's record $7.90 a kg of milk solids payout from Fonterra for this season would encourage further land price appreciation, saying the market already had momentum from previous milk price rises. Eight months ago, dairy farms in Southland were selling for $30 to $31 for every kg m/s they produced. Now, the price was $41 to $42 a kg m/s due to this season's payout. When the former listed corporate dairy company Tasman Agriculture divested itself of 67 South Island dairy farms in 2000 and 2001, it averaged between $17 and $18 kg m/s. Better quality sheep and beef land suitable for converting to dairying has increased from $8000 a ha to between $15,000 and $16,000 a ha in the past year. Mr Lucas said normally his company would have 30 dairy farms for sale at this time of the year, but it has just eight. more>>

New wool company raises issues
Adding new entity, “The Wool Company” to an industry which survives on tight margins and where there is no more fat to trim, has been labelled a courageous, timely step by some industry commentators. “But why buy another company when wool growers are still majority shareholders in Wool Equities and where does Wool Services International fit into the scheme of things?” industry commentator Chris Stewart, from North Canterbury, said “Why could they not have provided this role?” With 30 years’ experience, 20 of it in auction and buying for major international trading processors, he should know the industry inside out. He helped Landcorp improve the value of its wool clip, then contributed to establishing flow-on structure entities, from the grower through to the retailer for several types of wool.One of his more challenging assignments involved initiatives to restructure part of the wool industry in Kazakhstan. Soon after The Escorial Company was established in 1999, Mr Stewart provided the operational role including fibre selection in Australia and NZ, and other organisation roles. more>>

Climate policies will have huge cost
As more details emerge, as more analysis is done and as the rhetoric fades, it is clear the Government's climate change policies will have the biggest effect on farming since the invention of the tractor. On the surface, the changes will appear to be beneficial. The upshot will probably be more trees on hills and fewer animals to pollute our atmosphere, soils and waterways. But the economic and social cost will be massive. Many farmers will have to sell up to bigger, more efficient, corporate-owned farms. And food prices will rise. The cost of being carbon-neutral on farms cannot be passed on in any other way. The central feature is the emissions trading scheme. It will force farmers to pay for the harmful greenhouse gases their animals produce - the methane that sheep, deer and cattle belch and fart and the nitrous oxide they excrete. more>>

Lamb export concerns
Last summer’s drought and the continuing shift from drystock to dairy farms will cut NZ’s lamb exports by 10% for the 2008-09 year. The estimate comes from Rob Davison, executive director for the economic service of Meat & Wool NZ. He said the nation’s breeding ewes total 24.8 million, down 6% on last year. Farmers will have to retain thousands of this spring’s lamb drop to make up for ewe hoggets sent to the works in the wake of summer feed shortages across the country. And that will bring down lambs for export by the estimated 10%. Davison says the reduction is significant. ‘Clearly, supply will tighten right up and the industry will focus on servicing higher-paying markets. ‘We absolutely have to make the most of every lamb. The price will be very important. ‘Every dollar is needed at the farmgate.’ Davison says 2007-08 had the third lowest profits in the industry for 50 years. The worst years were 1986-87 when farm subsidies were pulled by the Government, and 1996-97 with low international prices. MWNZ is assembling data now to estimate lamb prices in 2008-09. more>>

Stock farmers feeling pinch
Sheep and beef farmers continue to face a "double drought" of feed shortages coupled with inadequate returns. Sth Canterbury Fed Farmers president David Williams said yesterday rain would eventually come, but sheep and beef farmers would remain exposed, without decent returns. "Of course the biggest drought is really the price." He said farmers had lived with pressure for so long it was getting to them. He heard their annoyance at the persistently poor returns. Drought was less of a concern if sheep and beef farming were profitable. "Some of the national organisations needed to take a bit of leadership and make some real decisions," he said.Last week's St Andrews Federated Farmers-organised drought meeting drew in 80 farmers.Just as important as guest speakers' advice was the chance to meet and talk.Mr Williams said the amount of stock already killed should help lift prices for farmers forced to further reduce numbers. more>>

Fertiliser prices latest blow
The price of superphosphate nearly doubled over the weekend - adding further cost burdens to struggling sheep and beef farmers. The fertiliser shot up from $266 a tonne to $511, a hike of around 90%. Twelve months ago it was only $193. Ravensdown general manager sales Ross Aimer blames the rise on worldwide demand for food and bio-fuels, creating a shortage of basic fertiliser commodities. "International prices started to track up 18 months ago but have surged more dramatically in recent months," he said.Tarata sheep and beef farmer Bryan Hocken says this would be one of the biggest disasters that could happen to hill country farmers."That would mean nobody could put any on."Therefore contractors, aeroplane pilots will go off shore."If it ever does come back again, there won't be any guys to sow it.'more>>

Kiwi scientists make methane breakthrough
NZ scientists have made a breakthrough in methane research which could reduce the amount of gas farm animals produce. The scientists from the Pastoral Greenhouse Gas Research Consortium have mapped the genetic sequence of a microbe, which produces methane from the rumen of cattle and sheep. Methane produced by farm animals accounts for 32% of NZ's total greenhouse gas emissions. The project team led by Dr Graeme Attwood of AgResearch spent five years studying the micro organisms called methanogens to determine their genetic code. Consortium chairman Mark Leslie said the completion of the research was a significant milestone that would help researchers gain a better understanding of how methanogens work. "While we still have some way to go in finding a solution to reduce methane emissions, closing this genomic sequence is an important piece of the complex puzzle,"he said. more>

Brassica feeding management
If you have brassicas, no doubt you will have stock on them by now. So, how long will they last? It's not difficult to measure the yield, and if you know the yield you can do some sums. You need to mark out 1m squares on the ground and cut everything inside the square and weight it. I use a high-tech piece of string for the job of marking out the area. You need to do about 1 square metre per hectare to get a reasonable result — just average them out. This way of doing things applies to turnips, swedes and chou, or anything else, for that matter.Once you know the fresh weight per square metre, just multiply that by 10,000. There are 10,000 square metres in 1 hectare. You now have the fresh weight per hectare. Now you need to multiply this by a dry matter percentage to get the yield — use 10% for swedes, 14% for chou and 9% for turnips. That's all fairly straightforward until you have to measure a chou crop that's 6-foot tall and it's raining. more>>

'Stick to what we're good at'
NZ will lose its farmers unless their contributions to the country are valued more, said the Director of Agriculture at Massey University, Professor Jacqueline Rowarth. Farms and sustainable food production remain NZ's greatest hope for future prosperity in difficult times, she said. "We should stick to what we're good at and do it more efficiently, more sustainably." Prof Rowarth, one of the country's leading agricultural scientists, was made a Companion of the NZ Order of Merit in the Queen's Birthday Honours today for her services to agricultural science. When the packet of documents arrived from Government House she said she at first thought she was being asked to make suggestions or give advice about someone else - a request she has met several times before. Then she read the cover letter again and realised it was about her. "It was a complete surprise and is a great honour," she said. more>>

Affco swings into first half profit
Meat company Affco Holdings turned around its previous year's interim net loss to a $10 million profit despite revenue remaining flat. Profit for the six months ended March 31 was on the back of improved market returns, better performance and increased efficiency, the company said.A year earlier the Waikato-based company had posted a net loss of $18.8 million. Revenue of $496.6 million was down 0.5 percent."Labour supply remains the key constraint to capacity and profitability, and has been highlighted throughout the extended dry period. These shortages led to heavy livestock bookings over the summer and created a processing backlog which placed pressure on our farmer suppliers," said chairman Sam Lewis. The strong dollar was also hurting profitability at the country's largest listed meat company. "The planned improvements in operations and sales activities are progressing well. The benefit of these will become increasingly evident in subsequent reporting periods," Mr Lewis said. more>>

Carbon calculator now available to NZ farmers
NZ farmers will be able to calculate and monitor their carbon footprints from today, following the launch of an industry-specific carbon calculator. The free web-based calculator, designed by Lincoln University’s Agribusiness and Economics Research Unit (AERU) and engineering consultancy AgriLINK, is the first monitoring tool of its kind made specifically for farmers. It uses software developed by Lincoln University’s Applied Computing Group. The calculator determines emissions from livestock, farm energy use, and the use of fertiliser and feed, to arrive at totals for methane, nitrous oxide and carbon dioxide emissions. These are then converted and expressed as total CO2 equivalents. The calculation requires farmers to enter basic data such as farm size, livestock numbers, fertiliser application, fuel usage and their contractors’ activities. more>>

FVS and payout forecast for next season- Fonterra
Fonterra today announced a 60 cent increase in the Co-operative’s 2007/08 forecast payout to $7.90 per kg of milksolids (kgMS), and a record opening forecast of $7.00 for next season. Fonterra signalled in April the potential for further upside in this year’s payout, and Chairman, Henry van der Heyden said it was satisfying to be able to confirm a further increase in payout – particularly given the current volatile trading environment and unstable financial markets increasing Fonterra’s cost of capital.Mr van der Heyden said this season’s record payout and the strong forecast for 2008/09 gave “every reason to be confident about the outlook for dairying”. The new forecast for the current season is made up of a milk price of $7.55 and a value component of 35 cents. “This is good news for our farmers to have the extra cash flow at a time when they are facing sharply rising input costs, which DairyNZ confirms are up by 32% over the past year. It will also go some way to make up for the production lost this season due to the drought.” more>>

60-year-old PPCS set to change name
Sixty years of history will be erased on Sunday when PPCS officially becomes known as Silver Fern Farms Ltd. But, there will be no fanfare — no giant inflatable Silver Fern floating down the River Thames. Instead, there will be a gradual roll-out of Silver Fern Farms, a major rebranding exercise aimed at repositioning PPCS as a fully integrated marketing company in overseas markets from June 1. The company's main focus is continuing with its Rightsize Programme — a bold new intiative aimed at realigning overcapacity in its processing plants with the changing livestock profile. And, as a market leader, NZ's largest farmer-owned meat processing co-operative must be commended. An estimated 1.8 million fewer lambs will be available for the export market next season. Lamb is not the only casualty; the national deer kill also continues to decline.And, not surprisingly, the dairy boom, fuelled by a payout of $7.30 a kilogram of milksolids this season, will continue in the south, with the southern dairy herd set to increase by 24 percent to 520,000 cows in June next year, according to M&WNZ statistics. PPCS has had no option but to close the doors on several plants. more>>

Pastoral crusader's mission
Outspoken defender of science Doug Edmeades talks about nutrient efficiency and fertiliser, what he thinks of organics, and his passion for protecting hard-working farmers from being `ripped off'. An encounter with an angry young farmer at a meeting in the Hauraki Plains town of Ngatea in 1985 set Doug Edmeades on the pathway to national science notoriety. When Dr Edmeades, then an Agriculture Ministry soil scientist, said the liquid fertiliser Maxicrop was useless, the farmer rose to his feet and gave him an earful. What was going on? How could such a product be promoted on prime-time television as a substitute for normal fertilisers? As a public servant funded by the taxpayer, why wasn't he doing something about it? That Dr Edmeades did do something about it is now history. He repeated his assertions about Maxicrop on watchdog programme Fair Go, the makers sued, he stood his ground through the country's longest civil court case, and emerged with his reputation unscathed. more>>

MIAG holds inaugural AGM
After a very successful 3 days of meetings in the North Island, MIAG held its inaugural AGM at Queenstown on Saturday 24th May. The North Island MIAG meetings received a huge groundswell of interest with over 500 farmers indicating support. MIAG are keen to secure a farmer controlled market led company that delivers the highest possible returns to farmer shareholders through meaningful consolidation within the industry.There were 28 delegates present at the AGM from throughout NZ representing a wide range of farm types and sizes. An Executive Committee was formed including Keith Milne (Chairman), John Gregan (Spokesperson), Mark Morrow & Stephen Cullen representing the South Island. Dan Jex-Blake (Vice-Chairman) & John Taylor are to represent the North Island with an additional 2 members to be elected by local farmers. Jamie Falloon (Wairarapa) has been appointed Treasurer and Anne Liardet (Otago) Secretary. more>>

Quad bikes 'need design change'
Changes to quad bike designs are needed as growing accident rates turn the farm vehicle into an "$8.3 million annual liability", a new study says. Research by scientist Dave Moore has identified 71 areas where quad bike safety could be improved, after ATVs (all-terrain vehicles) were studied on farms. Moore's findings come as ACC figures show no let-up in quad bike accidents. Moore said ACC payouts had doubled in the past five years, standing at $8.3 million last year. "These statistics indicate an increase in the severity and longevity of injuries caused by quad bike accidents. We need to find out why this is happening." ACC logged 358 quad bike accidents, including 10 deaths, in the 2006 to 2007 financial year, compared with 201 accidents, including seven deaths, in 2001 to 2002 more>>

Russia's Nutritek to own dairy stake
The Govthas given the go-ahead to create NZ's first totally foreign-owned dairy producer, opening the door to more overseas investors in the industry.Finance Minister Michael Cullen and Land Information Minister David Parker yesterday gave Russian-controlled Singapore company Nutritek permission to increase its 5.65% stake in New Zealand Dairies Ltd (NZDL) to 100%. NZDL has built a $100 million-plus dairy factory at Studholme, near Waimate, and began processing in September. The ministers said the acquisition of more shares by Nutritek was likely to result in the creation of new jobs or the retention of existing jobs that could otherwise be lost. It would also introduce new technology and business skills into NZ, increase export receipts, boost competition and provide greater efficiency. more>>

A changing climate is not all bad for agriculture
The EcoClimate report On Climate Change in NZ. Agriculture: examines what the likely impacts of a changing climate on pasture productivity and the economic effect on dairy, sheep and beef farming could be. Using downscaled global climate change models, the report makes projections on future temperatures, rainfall and droughts across NZ.``The primary production sector is the engine room of our economy and it will be affected by climate change driven by global warming.’ says Mike Jebson, MAF’s Director Natural Resources Policy. ``For an average year in the future, the predicted changes are small when averaged across the country, but different parts of the country are affected differently, with the west becoming wetter, the east drier and all of the country becoming warmer. We expect production will increase in Southland and on the West Coast of the South Island but decrease in some North Island East Coast areas and Northland.``The warmer climate may lead to an earlier start for pasture growth in late winter or spring. Farmers may choose to respond by bringing forward lambing or sowing crops earlier. The EcoClimate report provides us a starting point for further analysis and helps the primary production sector to start planning for the future,’’ says Mr Jebson. more>>

Concerns for deer industry
Another boom-and-bust cycle is hanging over the deer industry.
While venison producers are enjoying buoyant returns with an average schedule of about $7 a kilogram, they risk a repeat of the 2001 industry crisis. DINZ venison marketing manager Innes Moffat said the same issues that faced deer farmers more than seven years ago were present today. In 2001 venison demand increased and prices soared in an over-reaction to the perceived troubles of the European beef and sheepmeat industries — followed soon after by the industry crash. "Now we are seeing some speculative buying because of short-term problems with South American beef supply, Mr Moffat said told delegates at the deer industry conference in Invercargill recently. With venison production on a downward spiral — the kill was forecast to drop to 500,000 animals next year — the industry was struggling to meet demand in overseas markets. Exports have fallen 19%, which has pushed prices up more than 40% since the same time last year. Deer Industry NZ said its main focus was on reducing reliance on the German game sector, which accounts for about 40% of NZ venison, lengthening the consumption period and increasing Country of Origin branding in overseas markets. PPCS general manager marketing Glenn Tyrrell said chilled venison was now being supplied to markets 12 months of the year. more>>

World demand forces rise in fertiliser prices
Farmers smarting from increased costs are about to be hit in the pocket again, with fertiliser prices predicted to rise by hundreds of dollars as global demand creates shortages. Fertiliser companies say they will review their prices in the next few weeks. DAP is expected to rise from about $1000 a tonne to between $1800 and $2000 a tonne in the next few months. Two of the largest companies, Ballance Agri-Nutrients and Ravensdown, are being forced to ration supplies. They blame the price rises on the strengthening economies in India and China - which are boosting the demand for food - and the increased interest in biofuels. Ravensdown sales general manager Ross Aimer said his company had run out of superphosphate. "Our sales were well ahead of last year, so we organised additional shipments. One shipment arrived and the other was held up," he said. more>>

Fonterra forecast tipped to rise again
Fonterra is expected to lift its payout forecast for this season by at least 30c/kg of milk solids after a board meeting on Thursday. The dairy industry expects the co-op to reveal the payout boost in an announcement on Friday in which it will also re-set the price of its fair value shares and make its initial estimate of the payout for the 2008-09 season. According to industry sources, Fonterra has been telling farmers at recent meetings to expect a pleasant surprise with the payouts for this season as well as next year. Its current payout forecast for 2007-08 is $7.30. Fonterra has a policy of revising payout estimates, other than its regular updates, only for movements of at least 30 cents, so a payout of at least $7.60 for this season is expected. That would be higher than the current estimates of Goldman Sachs JBWere - $7.40 - and Westpac's $7.50."It would be a mild surprise if the current season's payout was $7.60 or more," Westpac agri-economist Doug Steel said. Fonterra's NZ production was expected to be down about 3% on last year because of the drought. Fonterra suppliers may not see all of this season's payout increase. The co-op's chair, Henry van der Heyden, said last month that the co-op would consider retaining some of this season's payout because of the instability in global financial markets. more>>

Farmer confidence up with recovering lamb prices
After declining sharply earlier this year, NZ farmer confidence has staged a moderate rally off the back of a recovery in lamb prices, according to the latest bi-monthly Rabobank/Nielsen Rural Confidence Survey.The survey showed overall, 18% of NZ farmers expect the agricultural economy to improve in the next 12 months, compared to 15%in the previous survey. Rabobanks Ben Russell said that lamb farm gate schedule prices had been maintained around 10% higher than last year during the peak processing period despite a strong NZ currency and this was likely to have been a driver of improved confidence. Mr Russell said that the improvement in farmer confidence reflected a change in interest rate expectations, with 16% now expecting interest rates to reduce, up from 5% last survey, and 31% now expecting rates to increase, down from 45% last survey. Farmer confidence has also improved across the cropping and beef sectors, with cropping farmers continuing to have a positive outlook and high income expectations. However, despite a modest improvement, beef producers are the most pessimistic of all farmers, with 49%t expecting the economy to worsen, compared to 45% in the last survey. more>>

PPCS defends Govt animal ID plan
Meat processor PPCS and Fed Farmers are at odds over the worth of a national animal identification plan, announced by the Government in the 2008 Budget.PPCS chief executive Keith Cooper expressed concern at the post Budget "kneejerk negative reaction" of Fed Farmers, which had questioned whether the initiative had any value for farmers. He said the country's largest meat processor and marketer had thrown its weight behind Government plans to inject $10.1 million to set up the National Animal Traceability and Identification tracing scheme (NAIT). Agriculture Minister Jim Anderton revealed a further $13.2m allocated in the Budget over four years equating to 35 per cent of the operational costs of the system.The NAIT scheme aims at ensuring all livestock produced in NZ is tagged as part of a database providing lifetime traceability of animals."Federated Farmers seems to be translating the entire issue into short-term dollars and cents without taking into account the national good," said Cooper. "It's more than a little surprising, given that food safety has been highlighted as a major concern in global food procurement markets." more>>

Feds Say No to NAIT
Fed Farmers says it questions the value of government investing in a National Animal Identification and Tracing (NAIT) initiative for cattle and deer. In today’s budget the Minister of Agriculture announced the spending of nearly $5 million on this initiative which is aimed at improving food safety. But Charlie Pedersen says the initiative risks loading additional cost onto farmers for no tangible price benefit. He says the Federation has always been sceptical about the idea and says if it was so good, processing companies could make it compulsory by making it a condition of supply, which they haven’t.“This weekend I am having discussions with my counterpart from Australia where such a scheme is compulsory just to check again whether they are getting a premium in the market and I am pretty sure that they are not. “The reality of the situation is that once the animal is in the works, the tag is gone, so there is no way that an individual cut of meat can be accurately traced to the plate. I look forward to the day when a restaurateur in New York can wave his cell phone over a lamb chop, and on the screen will appear a picture of the farmer who raised this animal.” more>>

It's back to the farm
Charlie Pedersen brushes a speck from his pin-striped NZ-made merino wool suit, looks down at his chisel- toed Italian shoes, and contemplates donning his blue overalls and his gumboots and going back to the farm to his cows. After 14 years of coming to Wellington to schmooze politicians and bureaucrats, he is going home for good. "But you won't catch me milking a cow. My days of that are well and truly over," he says. His three-year tenure as president of Fed Farmers is almost at an end and he is bound by the lobby group's firm policy of no second terms. "I've got nothing else in mind, nothing has been offered me. Anyway, I've got plenty to do at home," the 51-year-old says. He has a growing farm business to direct and is looking forward to reacquainting himself with his golf clubs and his guitar.Not a man to be content with working quietly behind the scenes, he came into office with a reputation for fearless outspokenness. And though he pledged to tone it down, he was soon caught up in controversy with attacks on environmental extremists. more>>

'Future of agriculture - value or volume?'
Registration has opened for Australasia’s major science and agribusiness conference, to be held in Christchurch, 28-30 October 2008. The fifth in the Horizons in Livestock Sciences conference series will be hosted by Australia’s CSIRO Livestock industries and NZ’s largest CRI, AgResearch.Expected to generate strong debate on the future directions for Trans-Tasman animal industries the series will address the increasingly contentious issue of “The future of agriculture: Value or Volume?” According to AgResearch’s , Dr Andrew West, if the world is to maintain the same effective level of food supply in 2050 as there was in 2000, there will need to be a 50% improvement in the world’s agricultural productivity.“There are several complicating factors that will make this achievement much more challenging than it might appear,” he says.“One factor will be the stress that all human activity, including agriculture, puts on the environment. We must not only increase the volume of food production to feed the world’s human population that will increase by 3 billion in the next 60 years, but we must also do it in ways that substantially reduce the impact of producing food on our environment. more>>

Angus scoops prize at beef expo
They knew he was a winner, but the drought almost prevented the Sandersons from entering their top Angus bull in the Beef Expo competition last week. Rose Sanderson said, like most places, it had been a desperate season in Oamaru, with feed thin on the ground at Fossil Creek Farm. But their 2-year-old bull Update did get to the expo. Not only was he named top Angus, he was also presented with the Champion of Champions sash on the last day. "For a long time we knew he was a good bull, but we did not think we could come because we just did not have the grass," Mrs Sanderson said. The fact it was the meat on the bull's carcass that caught the judges' attention was awesome, she said. Update had a sturdy structure, but the Sandersons worried the led bulls in the other breeds had an advantage. "We felt that he had a very good chance, but without having him on a holter we thought we would be [disadvantaged]," Mrs Sanderson said.Despite his inability to be led, Update was a good-natured bull that dealt with the constant grooming well, she said. more>>

PPCS bond rise after restructuring
Investors in PPCS bonds have taken comfort from the big meat exporter's restructuring and programme of job cuts. In the last month the bonds have risen in value after the Dunedin- company announced two meat-plant closures and the axing of 600 jobs.PPCS has still to address sheepmeat processing capacity in the SI at its plants. Several hundred jobs are hanging in the balance. Last year, PPCS's two tranches of bonds fell in value and their yields rose because of concern about risks to the company.In October last year, PPCS posted a $40 million loss but was back in the black this year with a first-half profit of $11.2m.Chief executive Keith Cooper said last week the company's performance for the year to August 2008 would be significantly improved after it completed its "right sizing" programme matching plant capacity with stock availability.Yesterday, $100 worth of PPCS March 2009 bonds were selling for $96, up from $89 in April. At a price of $96, the yield on the bonds is 16.5 per cent. At $89 the yield is 26%. more>>

ID one step closer
A national animal identification and tracing (NAIT) system has moved a step closer to fruition with the launch of a pilot programme in Waikato.Using radio frequency identification device (RFID) tags, the trials involve cattle farms, saleyards and three meat processors – PPCS, Affco and Greenlea.The trials will continue for three months before results are evaluated, said NAIT project chairman Ian Corney. The NAIT committee has set 2011 as the mandatory phase-in date for animal ID and traceability for the cattle sector. However, Corney says the timetable will move forward depending on how well the technology is adopted. ‘It’s all very well to say that the technology is robust but we can’t move forward until it’s trialled in the working environment like cattle yards, milking sheds, saleyards and processing plants.’ Corney believes the committee is making good progress and has received support from the Government and stakeholders. more>>

End the old guard says MIAG in NI
Gisborne farmers are getting behind a call to form their own producer monopoly along the lines of Fonterra. About 170 farmers from throughout the district turned out for the first NI meeting of the Meat Industry Action Group. There was talk about getting rid of the "old guard" with individual agendas and entrenched behaviours who were no longer delivering.A show of hands showed the majority supported the consolidation call, with many also coming forward to contribute seeding funds.The meat industry, particularly the sheep industry, was in crisis, said Gisborne MIAG spokesman Dan Jex-Blake.Farmers were just price takers in the processor-driven market of today, he said. Producer returns were only 17% per carcase. "We are supplying the raw material for someone else to get the added value -- we need to step up and take control." The group's vision was for a global meat co-operative, said South Island farmer and former investment banker Forbes Elworthy. more>>

Dairy not dirty Lincoln research proves
Newly released data from Lincoln University shows intensive dairying can have a minimal impact on water quality. Five years’ work on the university’s dairy farm shows no more nitrate is leached than under traditional mixed cropping systems and that there is no evidence of bugs such as E.coli reaching groundwater. ‘We hope that that’s a positive story from us… that dairy farming can have no greater impact than any other land use on the Canterbury Plains,’ says Prof Keith Cameron, who has been leading the work with fellow Lincoln Prof Hong Di and Dr Jim Moir. While the work hasn’t yet been published, the team has presented its data to Environment Canterbury councillors and staff in an attempt to enlighten policy-makers. ‘We want to help these new councillors understand that these emotive letters to editors may not be the reality.’ The data comes from 60 lysimeters dotted across the free-draining soils of the farm’s north block and specially constructed drainage plots under the clay soils of the south block. An average of just 22kg/N/ha/year and 20kg/N/ha/year was collected in drainage water from each block respectively, figures which tallied closely with predictions of the Overseer nutrient budget model. more>>

Energy boost for velvet
Energy drinks are usually associated with a high intake of caffeine and copious amounts of sugar.But, a new deer velvet tonic, manufactured in Korea from NZ-farmed deer, is providing a new kind of buzz. DINZ Velvet Services Marketing manager Rhys Griffiths said the tonic was targeted at school-age kids and career-oriented people on the go.``They can get their daily dose of vitamins in a way that's appealing. Its a bit like V or Red Bull, but its much healthier and with no added sugar or caffeine,'' Mr Griffiths told delegates at the Deer Industry NZ conference in Invercargill last week. The tonic, which contains 3.75g of deer velvet per 80ml, also includes apple juice and vitamins. Each energy drink retails at about $NZ6 a sachet.
NZDFA chairman Bill Taylor described the velvet tonic, which comes in packaging similar to Macs Gold, as ``great-tasting but slightly sweet''. more>>

They are moving out of sheep in Aussie too
Meat and Livestock Australia chief market analyst, Peter Weeks, said the national flock was set to fall by 3-5pc again this year. "That's assuming we have a decent season and it hasn't started very well at all which has only really served to heighten the move to grain production," Dr Weeks said."Unfortunately meat and wool have not joined the soft commodity boom yet." In the last three weeks, sheep turn off and slaughter numbers have risen dramatically.In Victoria alone there has been a 70pc increase in sheep turnoff in the last few weeks compared to the same time last year.This has been influenced by an early Easter but nationally a six-week rolling average shows a 24pc rise on last year.Other MLA figures suggest farmers wanted to the end the liquidation of the national flock but without decent falls, cropping has looked better and better, even with last week's big grain price fall.more>>

Parmalat joins race for Aussie dairy farmers
Italian dairy giant Parmalat has teamed up with Australian farmers cooperative Murray Goulburn to bid for NSW-based co-operative Dairy Farmers. The Parmalat and Murray Goulburn consortium join Fonterra and Japanese-owned National Foods in the auction for the dairy cooperative.Dairy Farmers confirmed the Italian dairy firm and its consortium partner had sought clearance from the Australian Competition and Consumer Commission (ACCC) to make a bid.Dairy Farmers chief executive Rob Gordon also signalled there may be further bidders who come forward to seek "regulatory clearance processes in coming months"."Any bidder that does not have existing dairy operations in Australia would not, however, be expected to seek an ACCC review at this point," Mr Gordon said in a statement. more>>

Loan book tops $500m at PGW Finance
Fuelled by the dairy boom, PGG Wrightson Finance says it is outperforming its rural lending peers by growing its loan book to farmers to $500 million.That book had grown at an annual compound rate of 25% compared to growth in the overall rural finance sector of 15%, financial services spokesman Michael Thomas said. PGG Wrightson Finance's agricultural slant has left it clear of troubles surrounding the rest of the finance company sector over the last 18 months.The Christchurch-headquartered lender was looking for similar 20% plus growth ahead, with extra funding options being sought, Thomas said.The dairy sector would likely see similarly high prices in the next 18 months to those it has been experiencing today, and with rural land values also holding up at high levels over the next year and a half. more>>

Meat in the sandwich
Meat company PPCS has shunned a mega merger, but its farmer-suppliers are not convinced it's on the right track.Close to their hearts, as suppliers of PPCS, is the performance of the nation's largest meat processor with a $2 billion turnover. Uppermost though, is the death of the mega merger. It had been a glimmer of hope against a gloomy three years of agonising lamb returns.The merger plan, led by the Alliance Group and based around combining five processing co-operatives, came unstuck last month when PPCS rejected the idea.But the lure of an extra $15 to $20 from a new-look industry was a big pull for farmers. They are suffering and want that money.This is the first of PPCS's seven roadshows around the country and if this meeting is anything to go by, chairman Eoin Garden and chief executive Keith Cooper are in for a tough time. more>>

PPCS calls meeting over Burnside plant
It is Dunedin's turn to brace itself for the worst as meat processing company PPCS calls workers at its Burnside plant to a meeting today.The company last week closed its Oringi plant in Dannevirke with the loss of 450 jobs and Dunedin Mayor Peter Chin fears the news will be the same for the 120 Burnside workers.The Burnside plant is the largest of five PPCS deer processing sites in the South Island. The company also has venison plants in Southland, Christchurch, the West Coast and Rotorua. Any news of closure at Burnside would be a blow to the Dunedin economy, as it would come only a month after Fisher & Paykel announced it was closing it nearby Mosgiel plant with the loss of 430 jobs, and 50 jobs were lost when Dunedin knitwear firm Tamahine also announced its closure. more>>

PGG Wrightson in new wool co-op venture
PGG Wrightson said today it had signed an agreement to combine the majority of its wool business with a new growers' co-operative, Wool Grower Holdings Ltd, formed by the Wool Industry Network.
The agreement follows discussions between the two organisations over the past year.PGG Wrightson's wool operations will be transferred into a newly established entity with the interim name The Wool Company.The business is expected to begin operations on July 1.Wool Grower Holdings will own a minimum 60% shareholding in the new company, while PGG Wrightson will hold up to 40% depending on participation by other organisations.The new company will acquire the PGG Wrightson operations for a net $46 million, of which $10m will be paid in cash on settlement. more>>

Food pricing power with supermarkets - Farmers
Farmers deny they are running a "spin" campaign to divert consumers from blaming them for feeling the pain of soaring food prices."We have suspected for some time that the farmers' share (of retail food prices) has actually gone down,said Fed Farmers president Charlie Pedersen."If that's the case, it's a strong signal to us that. . . something needs to be done about it," said Mr Pedersen, who said that farmers historically used to receive up to half of the retail price of the foods they sold."Farmers' share for meat used to be some 40 to 50%," he told journalists in Wellington today.He did not directly blame the nation's two main supermarket chains, but said: "There is considerable market power in the supermarkets."That is a difficult problem food producers around the world have not managed to meet in any meaningful way yet: the conversation we're starting. . . is designed to stimulate the thinking of farmers and farmer groups as to how they need to engage with the real power in the food chain: the supermarkets."Farmers' share of the retail price of milk had risen by 10 percentage points in recent years, to 35%, suggesting the meat industry could look at the benefits of the Fonterra-style approach, such as owning their product further down the processing chain, and cooperating more widely. more>>

Lincoln lucerne research provides farming turnaround
He’s been called the “lucerne revolutionary” - Lincoln University’s Professor of Plant Science Derrick Moot - but he’s the first to admit that any results achieved through his lucerne crusade owe more to a long tradition of careful scientific work at Lincoln, and willing implementation by farmers, than to any “quick fix” formula that popular opinion might see in his research. On Wednesday 14 May farmers and members of the public will be able to assess some of that combined researcher-farmer work for themselves at a national Field Day on “Bonavaree” Farm, at Seddon, south-east of Blenheim.Professor Moot and farmer Doug Avery will be describing the “lucerne revolution” responsible for turning around the once flagging fortunes of “Bonavaree”, a 1100-hectare property in Marlborough’s driest, drought-prone heartland. more>>

Farmers Say National Strategy Needed
Fed Farmers M&Fibre Chair, Keith Kelly says the closing of the PPCS plant at Oringi has demonstrated that the problems plaguing the meat industry are not confined to farmers.“In this instance, the loss of the Oringi plant will directly affect Dannevirke and surrounding communities. Other communities too are likely to face similar problems as industry restructuring continues.“The problem highlights the complexity of the issues that bedevil the industry. One of these issues has developed as meat companies, in competition with each other, have built plants in high production areas to gain better access to stock.“As stock numbers have decreased, overcapacity develops and some plants, such as Oringi, are closed. At the same time however, farmers wishing to destock to manage drought conditions have often been unable to get their stock killed. Finally, to add a bizarre touch to the circumstances, Australian lamb is now on sale in NZ. “The combination of rising on-farm costs and the pressures the meat industry is imposing on itself, make the situation intolerable for farmers, processors and rural communities.Fed Farmers urges all the players in the meat industry to come together to develop a national strategy for the industry. more>>

Lamb Survival Field Days
Farmers across the country are invited to a series of Lamb Survival Field Days run by the Lamb Survival Solutions Group funded by MAF’s Sustainable Farming Fund. An AgResearch scientist, as well as consultants from Sheppard Agriculture and Agribusiness Consultants and a vet from Vetlife Ashburton, will be on hand to offer advice and practical solutions. The field day topics covered will include: a lamb survival introduction & overview; the benefits of shelter; an animal health calendar; best management practices; a landscape assessment tool and lamb post mortem examination training to identify the major cause of lamb death on farm. For fieldays schedule and venues look here. more>>

Parasite project reveals 'scary' findings
Findings from one of the largest projects conducted on parasite management in the sheep industry in NZ were presented at a field day at Lincoln recently.Where stud breeders lead, commercial producers should follow, say managers of the recently completed S3 project. During the project’s three-year term the 37 Merino and mid-micron stud breeders involved have boosted productivity, cut costs, and reduced the risk of new drench resistances affecting their farms. ‘There was a large component of behaviour change and enhancement in this project,’ says project technical manager Greg Mirams of FECPAK International which, with Lincoln University, SIL and Lambplan, implemented the scheme.For example, Canterbury Corriedale breeder Robin Wilson dropped routine dosing, changed drench products, introduced quarantine protocols and regular FEC testing, and now includes FEC score among his ram selection criteria. ‘We’ve seen a dramatic drop in animal health costs yet production has stayed the same,’ he says. more>>

Cloud over Pareora works
News of PPCS's decision to close the Oringi meat plant in the North Island has sent a ripple of anxiety through the company's meatworks in the South Island. Job losses at PPCS's two central South Island plants -- Pareora and Fairton -- cannot be ruled out on the back of the company yesterday announcing its intention to close the Oringi plant near Dannevirke.PPCS chief executive Keith Cooper said the rationalisation of South Island meat processing plants was inevitable because of decreasing stock numbers, changes of land use and poor lamb returns. Internal forecasts by PPCS have indicated a severe drop in lamb numbers as a result of the drought, poor returns and changing land use caused by dairy conversions. Mr Cooper said there would be a minimum of two million fewer lambs in the South Island and he expects other meat processing companies to follow suit. more>>

Calls for independent grass trials of cultivars
In an industry worth billions of dollars to the NZ economy, Germinal Seeds NZ Ltd general manager David Kerr says farmers deserve an independent body to test the product that fuels that industry.Mr Kerr has called for independent grass trials that would rank grass cultivars in order of feed value as well as yield. "The thing that amazes me in NZ is we have an industry worth billions and yet we have absolutely no standard measure for the farmer to gauge what the fuel is that is driving this industry," Mr Kerr said."Meat and Wool NZ and Fonterra want more production, but there is no one out there saying here is a guideline of what might give you more production."Mr Kerr said current data was mostly limited to drymatter yield with some estimation of energy value per hectare. more>>

Fonterra eyes Dairy Farmers
Fonterra has notified Australian competition authorities of its intention to bid for Australian co-op Dairy Farmers.The NZ co-op is the second party to advise the Australian Competition and Consumer Commission of its intention to bid for Dairy Farmers after the Kirin-owned National Foods did so last month. Any potential Dairy Farmers suitor which already has significant dairy operations in Australia needs to notify the ACCC and request if it has any competition concerns.Around a dozen companies are thought to have lodged initial bids with the Australian Financial Review reporting the front runners are National Foods, Fonterra and Australian co-op Murray Goulburn in partnership with Italian dairy company Parmalat. Dairy Farmers has around 2,000 farmer shareholders and is a major fresh milk supplier with popular cheese and yoghurt brands. more>>

Emissions trading erodes farming profits - Landcorp
The nation's biggest farmer – state-owned Landcorp – says farmers shouldn't be asked to pay for methane and nitrous oxide emissions from their properties before 2013."None of NZ's international pastoral farming competitors so far. . . face this problem, at least in the foreseeable future," former agriculture minister Jim Sutton, now the chairman of Landcorp, told MPs today.Landcorp's chief executive, Chris Kelly, told Parliament's finance select committee that the Government's proposed emissions trading scheme could cost reduce the company's net profit by between 25 per cent and 50 per cent in 2013, and by 75 per cent by 2030.The impact on the wider pastoral farming sector would be huge, he said. In answer to MPs' questions, he said accelerating agriculture's entry into the scheme to this year would have a "catastrophic effect". more>>

Meatworks to close, 466 jobs on line
PPCS plans to close its Oringi sheep and lamb processing facility near Dannevirke, which employs 466 staff.Workers at the southern Hawke's Bay works were told of the decision at a meeting at the plant this morning.CE Keith Cooper said the proposed closure was part of the company's "right-sizing programme" - aimed at aligning the company's processing capacity to current and projected livestock availability."Today we began a consultation process with our employees and their representatives at the plant. A final decision is expected within the next fortnight once that process has concluded," he said."This is an industry that is suffering from poor returns and the threat of alternative land uses, and PPCS must and will continue to make hard decisions to give security to the business and its farmer-shareholders going forward." more>>

Lamb prices disappoint in forward supply deal
PPCS’s new forward supply agreements for lamb may be too little, too late for many farmers.The co-operative claimed a first for the meat industry when it announced the introduction of a fixed forward supply agreement for lamb from June 08 to May 09. Chief Keith Cooper said the forward supply agreements were designed to give certainty in advance to suppliers on the final value of their product. This would enable farmers to make commercial on-farm decisions to capture the opportunities the certainty of value created.MIAG chair and Southland farmer Keith Milne said that while farmers were pleased to see longer-term contracts being offered, the people he had spoken to were very disheartened by the price being offered.Mr Milne said the current price of lamb reflected farmers’ desperation to kill stock, but that was starting to turn and farmers were looking beyond that. “The farmers I’ve talked to would be very cautious of signing at those price levels.He said that in Southland a lot of farmers would have to make major changes to their management to be able to supply lambs in winter. more>>

Merger out, but rumbles persist
A fresh attempt is being made to restructure the meat industry but on a less grand scale than the mega merger proposed by the Alliance Group. It would be a staged process, with like-companies merging for commercial reasons to eventually create a large entity, rather than the Alliance model in which it would have merged with PPCS and become the vehicle to acquire other companies. There is now little likelihood Alliance and PPCS will merge.M&WNZ chair Mike Petersen said while the Alliance model was the ultimate goal, it could take longer to get there as companies worked through their options.‘‘There is a lot of ongoing discussion between the different parties trying to work out the best way to get to the end game,’’ he said. ‘‘It is going to be a staged approach and that is appropriate.’’He believed the first signs of industry restructuring could come within 12 months. more>>

Simple keys to balance feed budget
A couple of reasonably heavy frosts in a row have certainly tripped the mental processes into winter mode and feed budgets are to the fore.It's important to get things right in winter. Stock condition and average pasture cover in early spring will either give you a good springboard or put you behind for a critical part of the year.The simplest feed budget adds up feed supply and takes off feed demand. The bit left is the feed that will be left on the grassed area and assumes all the brassica and supplements are used. This can be expressed as kgDM/ha. Depending on your lambing date it should be somewhere between 1300kg and 1500kg. The earlier you lamb prior to the onset of growth, then the higher the feed cover should be.You need to get your rationing right or the feed budget will fall apart in August. For ewes, as I said, the 1kgDM each day with pasture taken down to 500kg residual will produce low-condition ewes eventually. I tend to use 1.2kgDM and 700kg residual to feed a 65kg ewe to maintain herself.This gets a bit more complex. You need to know paddock size, pasture cover when stock enter the paddock, and mob size of course.With this, it's simple to work out how many days the mob should have in the paddock. more>>

Drought-hardened Marlborough shares tips
Marlborough's enduring experience with drought is drawing hundreds of farmers from around the country seeking ways of coping with climate change.About 350 people from as far away as northern Hawkes Bay and northern Southland are expected to attend Wednesday's Beyond Reasonable Drought adapting dryland farming to climate change field day at Doug Avery's Lake Grassmere property Bonavaree.Previous Starborough-Flaxbourne Soil Conservation Group days have attracted up to 100 people.Mr Avery said the logistics were turning out to be fairly challenging, but things were under control. Things had moved from the woolshed to "the biggest marquee we could find" and a key element would be moving people around quickly and efficiently on the tour of the property.Mr Avery said he believed the big story was growing lucerne, and there would be some dramatic figures to illustrate that. Dryland farming techniques had turned a 54% increase in profits on the east coast Marlborough farm, despite a 15% drop in rainfall in the last 12 years. more>>

More reasons to go A2, says Woodford
A new report adds to the argument for dairy farmers to start using only A2 bulls, says Lincoln Uni professor Keith Woodford. His book, Devil in the Milk, created a furore last September, reigniting the debate about whether A1 milk is a health risk. Now, an independent European expert’s review of the NZ Food Safety Authority’s risk management appears to have endorsed Woodford’s argument that the body of scientific evidence points to A1 milk being a factor in heart disease, type-one diabetes, and other illnesses. Woodford says the key points relating to milk are made on page 41 of the 94-page report by Dr Stuart Slorach. Paragraph three on that page states that ‘the [NZFSA] assertion that ‘there is no safety issue with either type of milk’… is not correct.’Slorach goes on to say that, ‘according to NZFSA, the phrase ‘there is no safety issue with either type of milk’ was intended to provide the public with assurance that their choice to use either (A1 or A2) milk product was not going to result in the safety issues that are otherwise associated with unsafe food, such as sickness or hospitalisation.’ more>>

Every household needs a farmer
Fed Farmers, Charlie Pedersen says too many NZers have become disconnected from the land and most now only have a relationship with their supermarket and not the people who produce some of the best food in the world. But he says farmers are very aware of the needs of consumers.“Not that many years ago most kiwis had friends or relatives who farmed, but with the urbanisation of NZ, this connection with the land has been lost. Fewer people understand the nature and vagaries of farming and the modern production systems which make NZ a world class food producer, said Mr Pedersen.“I sense that people forget that $17.2 billion or 47% of our export earning come from food production and that around 40% of the nation is employed by the food sector. Any moves to severely restrict food production in NZ will result in the loss of jobs and a lowering of the general standard of living.”Mr Pedersen says the public’s lack of connection with the land is leading to attitudes which threaten the right of farmers to farm in a sensible and sustainable way. He says some extreme elements of the environment movement are spreading misinformation about the impacts of farming and some of this material is being taken as fact by local and central government decision makers. more>>

Dairy Trust signs up 56 suppliers
More than 50 Fonterra suppliers have jumped the fence and signed up with rival dairy company Dairy Trust. And it's not just the financial benefits from cashing up their Fonterra shares that have got farmers excited. Suppliers said they liked Dairy Trust's "personal touch" and its ability to connect with grass-roots farmers.Chief executive Mark Fankhauser agreed. "When a supplier calls in, someone knows their name. "We're proud of that," he said. Mr Fankhauser and his team have overseen the development and transformation of Dairy Trust's new $60 million plant at Awarua, south of Invercargill, which is almost complete. The simple concrete prefab building with its compact, streamlined design may not exude the glamour of Fonterra's sites — but, then, looks aren't everything. In less than three months the first milk will be flowing into the vats, but recruiting supply had been a challenge for the new kid on the block. more>>

Drench resistance costly
Fine-wool farmers are losing as much as $2.2m a year in wool returns from drench resistance.The losses were estimated by merino and mid-micron farmers at a sheep sustainability strategy conference, the S3 Project, at Lincoln University last week, attended by industry experts and scientists. Of the 37 merino and mid- micron breeders in the project, 45% were found to be using drenches that were proven to be ineffective. No breeders had an effective quarantine programme to stop the spread of parasites to other farms. They learned that about 13% of their sheep contributed half of the egg contamination.Project manager John Bates said more farmers knew that parasite resistance to drenches was a problem but few farmers knew if they had a problem. "That is most frustrating because drench resistance is a manageable problem, but needs to be understood. It is no different to your tractor which is not working because there is no fuel in it." more>>

Biotech grass developed to reduce methane
Australian researchers working for a NZ stock and station company are developing a genetically engineered grass to reduce the amount of methane given off by livestock such as cows.The scientists at Gramina, a joint biotech venture by NZ rural services group PGG Wrightson Genomics and Australia's Molecular Plant Breeding Cooperative Research Centre developing a grass that will not only reduce the amount of methane cows burp up when chewing the cud but also grow in warmer climates. This means that farmers may be able to maintain dairy herds' productivity and profitability in the face of a global warming, while reducing their greenhouse gas emissions, according to the latest issue of the Society of Chemical Industry's (SCI) magazine Chemistry and Industry. more>>

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