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Dairy Focus NOVEMBER, 2015

VOTING TIME Fonterra’s crucial board elections

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INDEX

COMMENT FROM EDITOR

Voting time! New director Ashley Waugh

3

New independent Fonterra director Clinton Dines

6

KPMG agenda talks tough

7 10

Irrigation NZ column Synlait wants more milk

12-13

International dairy news

14

New Zealand briefs

16

Around the traps

18

TOP FARMING STUFF-UPS

CONTACTS We appreciate your feedback. Editor Email your comments to nadine.p@theguardian.co.nz or phone 03 307 7957.

Advertising Email emma.j@theguardian.co.nz or phone 03 307 7936.

It’s a crucial time for all Fonterra suppliers. Board elections are taking place and by the end of this month we may have some new directors. Governance has certainly been a critical issue for the co-operative, and those that are critical of the strategy and direction of the giant milk processor. Recently we had a new candidate visit Ashburton and we feature his story in this issue. Ashley Waugh has some critical insight having been in the Australian food industry. It’s fair to say that even if he’s not elected, his experience and knowledge along with others must be communicated in an effective forum. Now is the time for discussion. As Ashley says - “never waste a crisis”. And it’s certain that our emerging leaders are taking that advice. At a recent forum organised by KPMG, a selection of primary industry emerging leaders batted ideas around and formed a vision of what our sector could look like by 2035. What was fascinating was their combined view that we must collaborate more within industries. This is something our younger generation are used to doing. In order for us to drive efficiencies and create value throughout the food chain it seems logical that we need to be on the same team. The New Zealand Inc Brand should be a given but it needs to happen now. We cannot procrastinate and allow the rest of the world to pass us by. Our greatest asset continues to be our overseas image and we must protect and promote that as one. This means Fonterra, Synlait, Westland and Tatua need to combine their resources for the greater good. It’s not collaboration but co-operation and our emerging leaders see it as vital for our future. And maybe there’s a role for Government in this too – and Tourism New Zealand. But are we brave enough to accept the challenge?

Nadine Porter

RURAL REPORTER

Tweet us @farmjourno

Do we have enough visionaries among our established leaders that can help us drive towards that goal? I want to believe that we do but we are yet to see concrete actions proving those leaders worth. The emerging leaders also spoke of the need for Government to establish a clear and defined policy on genetic modification so that we can take it to the market place. Back on the home front, the dry continues to bite and it seems the Gods are against us this season! Some of us are struggling more than others and we must continue to be vigilant and look out for our neighbours and our mates. While the banks have been sympathetic and helpful at this point, it doesn’t alleviate the bottom line but there is support available particularly with the Mid Canterbury Rural Support Trust. Having just hired a capable manager in Sue Baird, help is just a phone call away. Technical help and support and an outside ear can make all the difference. Sometimes an afternoon away from the farm with family can also be a cathartic exercise and, of course, exercising regularly can alleviate stress and keep your work life balance intact. In the meantime it might be time to do a few rain dances and keep our fingers crossed that the weather forecasters have got their predictions utterly wrong! But at the moment it’s as Albert Einstein said “Adversity introduces a man to himself.”

Post Ashburton Guardian, PO Box 77, Ashburton.

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Corporate giant aims for Fonterra He is a corporate giant having overseen a successful merger of National Foods Australia with Lion Nathan, as well as building a highly profitable specialty cheese division – but now he’s facing a different challenge when he stands as a candidate for the Fonterra board. Ashley Waugh is charismatic and passionate, having spent the majority of his corporate life within the dairy industry – firstly within the New Zealand Dairy Board, before joining National Foods in 2002, eventually becoming the CEO three years later. His resume shows vast experience and understanding of an industry, yet he wanted more and spent 18 months searching for a dairy farm in the North Island. It might have seemed a strange choice for the highflying Kiwi, but his wife Catherine says he always wanted to own his own dairy farm. And so in June, 2012, the couple made the big move from Melbourne to Pokuru

New board candidate for Fonterra, Ashley Waugh.

Many questions are being asked of the Fonterra board right now. As a candidate in upcoming elections, a former big player in the Australian dairy industry tells Guardian rural reporter Nadine Porter why we must not waste the current crisis and his experience of the arrogance within parts of the New Zealand industry. near Te Awamutu to a farm they described as being “very run-down”. Their farming adventure coincided with the most tumultuous period of New Zealand dairying history, including $8 payouts and now a slump that has everyone querying the future strategy and direction of our largest co-operative, Fonterra. It’s not surprising then that Ashley has thrown his hat into the ring, believing he has the qualifications to make a significant contribution at a time when farmers are challenging every facet of

governance inside Fonterra. And he has the credibility to match his passion. During his time at National Foods he helped transform the business from a public listed company to a privately-owned business growing from $1.2 billion in turnover to $2.5 billion. Currently a director for Seeka Kiwifruit industries, The Heat Group in Australia and chairman of Moa Brewing since February this year, Ashley believes he brings “heaps of plain old governance commonsense”.

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From P3 While managing his new farming business from a commercial perspective has not been difficult, Ashley said understanding what was going on inside Fonterra was, and that’s what led him to seek election to the board. His main concerns for Fonterra stem from the increasing presence of offshoreowned dairy processing capacity in New Zealand and the amount of milk those companies are able to attract. “Those companies have an ability to continue to devalue our co-operative in terms of milk payout.” This has led to his key concern surrounding Fonterra’s strategy. “Is the strategy that is driving velocity for Fonterra right? More milk has not translated into more profit and more payout. Regardless of the state of the commodity markets, the relative payout from Fonterra is no better than it was five or 10 years ago.” On the ground since his decision to stand for the board, Ashley has been talking to many farmers around the country and their message has been clear – they have concerns around governance.

Although difficult to make comments on the structure of the board having not seen them operate in person, he did comment that there seemed to be “a lot of directors”. “But I wouldn’t be hell-bent

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on reducing independents, because I think they bring more variety, variation and skill sets to the table. We employ people to run this business and if governance is getting in the way of running the business

then governance has to step back. But the governors have also got make sure the strategy is right and that they are investing shareholders’ funds in the right things that add value to milk long term.”

Ashley said he was a strong supporter of the consumer and food service drive and back in his NZ Dairy Board days that was the focus of the industry. But he believes that with the “wall of milk” coming in that

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Above – Ashley Waugh praised Fonterra CEO Theo Spierings for trying to cut costs. Left – Current Fonterra board of directors

had changed somewhat. “That creates the illusion that Fonterra is just a commodity player, but I actually think they’ve done a pretty good job driving the consumer and food service growth and that’s my

background.” His experience with National Foods came at a time when the market environment for consumer-led businesses in Australia changed dramatically with retailers’ power at extracting value from

suppliers increasing. “So when it comes to consumer-branded business, it’s a very difficult market and I’m still involved with companies other than Fonterra as a supplier that faces those exact same challenges.” He believes Fonterra needs to “sit back” and review its performance and praised the executive for aggressively going through that process at the moment. “I actually think Theo [Spierings] is on the right track by going after suppliers. I’ve done that myself with National Foods and written to every business and said I want the costs down and longer terms of payment.” Never waste a good crisis, he said. “I hope we learn too that we need to run our business far more commercially on lower expectations of future pricing. We can’t run the business on the hope plan and say ‘I hope the price goes up’.” Farmers had to cut their cloth to suit the pricing with volatility in the market place meaning value is trending downwards. “So that means we’ve got to take costs out of our businesses.” Fonterra was a good

FONTERRA ELECTIONS Fonterra elections will take place by post, fax or internet until November 23 with the result made public at the Fonterra AGM on November 25.

New candidates seeking election include Murray Beach from Marlborough, Greg Maughan from Marton and Ashley Waugh from Te Awamutu.

ASHLEY WAUGH CV Ford Motor Company: – Marketing manager 1985-1988 – General manager, marketing 1988-1991 New Zealand Dairy Board – General manager NZ Rennet Company 19911995 – GM customer services, 1995-1997

– Regional CEO, global strategy director, global category director, Foodservice 1997-2001 National Foods Australia – Group executive, Cheese and International 20022005 – CEO 2005-2010 Dairy farm owner – 2012 onwards

company, but not a great one, he said. “It’s a very average consumerbranded company to be honest and it could do better.” He believed some in the industry (not Fonterra executives) were arrogant and there could be no room for that attitude in the future. “I do get farmers saying they

think Fonterra is arrogant. They don’t feel they are being listened too, nor do they have clarity and feel they can’t get answers to their questions.” However, he did think that every director on the board was doing their best. “But collectively I’m not 100 per cent convinced in their performance.”

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Dines has ‘outstanding credentials’ Nadine Porter

RURAL REPORTER

Tweet us @farmjourno

Fonterra Co-operative Group Limited has announced the appointment of new independent director Clinton Dines who will take up the board position made vacant when Sir Ralph Norris steps down at the annual meeting on November 25. Chairman John Wilson said worldclass governance is one of the board’s top priorities and the co-operative needed directors with a broad range of talent and depth of business experience. “The board welcomes Mr Dines, an Australian, who has outstanding business and governance credentials. “Mr Dines has deep experience in China, having lived and worked there for 36 years, including 21 years as a senior executive for BHP Billiton. “His expertise in managing the complexities of a large global

commodity business, and leading organisations through change and growth make him ideally qualified to

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join Fonterra’s board. “China is one of BHP’s biggest markets. Taking up the role with BHP in 1988, Mr Dines inherited a small trading business of $A20 million. During his tenure, the company experienced a sustained period of very strong growth as China’s demand for commodities accelerated dramatically. “Mr Dines is well versed in managing the impacts of global commodity price fluctuations. Fourteen years of his time at BHP in China were in a buyers’ market where the prices were low, while the last seven years were in a boom market. “He has specialised in developing strategies and processes for setting up and running investments and joint ventures in China and overseen teams undertaking significant change and business development in that country,” Mr Wilson said. “He was closely involved in one of the earliest joint ventures established in China in 1980, and was then continuously involved in a wide range

Clinton Dines is a new independent director for Fonterra.

of business ventures across a variety of industries and regions in China.” Mr Dines, who speaks fluent Mandarin, retired as president of BHP Billiton China in 2009. He serves on the boards of KAZ Minerals plc and Zanaga Iron Ore Company. These are significant businesses listed on the London Stock Exchange and AIM. In addition he is a non-executive director of Aurecon, a professional services engineering group, North Queensland Airports, and Griffith University. Mr Dines and his family live in Brisbane. The independent directors of the manager of the Fonterra Shareholders’ Fund support Mr Dines’ appointment.


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Primary industry urged to collaborate By Nadine Porter Following a one-day summit, 50 of New Zealand’s emerging primary sector leaders pushed for the primary industry to collaborate more and help build a NZ Inc brand and hub. Organised by KPMG as part of their Agribusiness agenda, the summit gave emerging leaders the chance to discuss their frustrations and to paint a picture of what the primary sector needs to look like in 2035. KPMG farm enterprise specialist Julia Jones said the primary sector needs to hold a single vision and focus and learn the true value of collaboration. “Emerging leaders believe that existing leaders – particularly those in like industries – need to learn to trust each other. To do this they need to shut the door on the past. It’s time to let go of the history and move forward.” Ms Jones said the group was dismayed by the “street fighting” that occurs among companies in the red meat sector. “They want to see us working together to gain market advantage against our international competitors, not competing against each other to needlessly drive prices down for everyone in New Zealand.” For the generation of under-30s, collaboration was a natural way of doing business, she said. “Collaboration is their MO … they’ve gone through the education system that’s based on achieving outcomes in groups. “For them it’s just a normal way of working and they believe it should be part of everyday business.” The group called for the creation of a New Zealand story brand – believing the success of our future food products lay in a single, clear and cohesive primary sector brand, supported by our story. New Zealand products needed to be easily identified by their packaging via an accredited symbol and the story behind products must be given more prominence, the group said. The leaders also wanted a position on genetic modification to be made

clear so that the primary sector could position itself appropriately for the future.

We must get smarter, cheaper and faster We are kidding ourselves if we think we will be successful in encouraging more than a billion Chinese consumers to become regular dairy consumers, according to a leading commentator. KPMG global head of agri-business Ian Proudfoot said Chinese consumers would instead select components of our diet that reflect their newfound wealth and lifestyle aspirations. “Perhaps an occasional premium grass-fed, hormone-free steak or a glass of fresh grass-fed milk. But on a day-to-day basis they will continue to eat a diet that is an evolution of their traditional diet.” continued over page

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From P7 Consequently, the primary sector needs to think carefully about what it grows in order to align production with the highest value market opportunities, he said. “We cannot simply expect consumers to start eating what we produce.” Mr Proudfoot said we also need to think hard about the way in which we deliver products to consumers. “Products that solve a problem will secure a premium.” It was critical that we understood the problems that needed solutions, he said, and used the aged population as an example. “Designing tailored food solutions for the aged for instance requires a clear understanding of their lifestyle, including the management of chronic health conditions that are prevalent among elderly consumers.” The urban consumer was forecast to become increasingly reliant on convenience food solutions that could be eaten on the move or out of the home, he said. “We can expect to see synthetic and manufactured proteins entering our daily diet within the next 10 years. We can also expect 3D-printed

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Above – 3D printing of meat may be the future. Right – KPMG farm enterprise specialist Julia Jones thinks existing leaders in the primary sector need to trust each other.

foods, algae and insects to become integral to our diets in decades to come.” Mr Proudfoot said businesses must look to do things in a faster, cheaper and smarter way. “Businesses that have relied on heavy investment in capital assets and infrastructure to

protect their position will be shredded by agile, virtual businesses that are built on outsourcing, a willingness to prototype ideas and acceptance of failure as a learning experience.” Paranoid organisations would out-survive the complacent

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enriching the sector. “These are individuals with empathy and high emotional intelligence who are able to engage with and understand consumers and reverse engineer product solutions that exceed expectations.” Mr Maslen said we must know our markets and develop deep insights into who the consumers are, how they are influenced and what motivates and excited them. “Then we will be better positioned to delight them.” Philosophically-aligned businesses need to be encouraged to work collectively and must leverage off each other, he said. This is about individual businesses teaming up where it makes commercial sense to share intelligence, logistics and opportunity (and not to be confused with industry collaboration). His personal view was that the “siloing” in New Zealand’s primary sector must end. “Adding true value goes beyond manufacturing and processing. It means improving the sales, margins and reputations of our customers’ businesses. By doing this, we become less easy to replicate and the conversation becomes about value, not price.”

Emerging primary leaders discuss the need for collaboration. PHOTO SUPPLIED

what is being produced.” Mr Proudfoot thinks our primary products should be as aspirational as a Louis Vuitton handbag, as must-have as an Apple iPhone, and as sought after as a table at Copenhagen’s Norma Restaurant. “We simply cannot afford

for our products to be lost in a crowded commodity market, being sold only on price. In fact they must stand head and shoulders above our competitors – delivering all the attributes consumers expect and desire – to be deserving of the premium we need to

achieve.”

Conversation needs to be about value

While we might know where we need to go as a primary industry, we struggle with the “how”, says global partnership manager for The New Zealand

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SMART campaigns about to launch By the time you read this, IrrigationNZ will be on the cusp of launching SMART Irrigation and SMART Watering campaigns in four districts in Canterbury (Ashburton, Timaru, Selwyn and Waimakariri). We’ll be asking urban gardeners to consider how they can make more efficient use of water, tapping into technology and practices SMART Irrigating farmers employ. It couldn’t come at a better time. From all accounts, we are entering another dry season like last year. For irrigating farmers that means planning now for how you will use your seasonal irrigation volumes. Let’s run over what this means. Timing is everything in a marginal season. Irrigating farmers need to start the season well and maintain consistent performance. Inefficient irrigation now will have a huge impact on whether your irrigation volume will see you through to March. Irrigation scheduling is central to this, particularly now irrigators are limited in the water they have through seasonal volumes. With water meters in place, irrigating farmers should be keeping a close eye on what they are using, regularly reviewing soil moisture levels and crop requirements and applying water as efficiently as possible.

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WATER WORKS

We recommend sitting down and planning your water budgets so you know exactly where you are at. Alongside appropriate irrigation scheduling, checking irrigation equipment is well maintained and performing to specification will minimise down-time, leakage or delivery problems. Ensuring irrigators are working as they should guarantees you’re getting the best from the water you apply. Some simple early season calibration checks can save a lot of water over the season and are a nobrainer to execute. Some systems may be 20-30 per cent out and using more water than you need will shorten your irrigation budget significantly. As the season goes on, regular maintenance will be essential. Checking pressure and sprinklers is recommended. Down the track when we get squeezed, water re-nozzling might help stretch volumes out for

PHOTO ASHBURTON GUARDIAN

longer. Alternatively if you operate a number of irrigation systems, plan ahead now to shut off the less efficient ones; long laterals in pivot corners for example if water restrictions start to bite. The key to surviving this summer will be all about preparation and support is available for irrigating farmers to arm themselves before El Nino worsens. Our website (www.irrigationnz.co.nz) includes checklists and guidelines covering early season maintenance and we offer training workshops and resource books to upskill irrigators who need advice. This month, we’re also rolling out a SMART Irrigation awareness campaign to remind farmers of the pathways to become SMART Irrigators. With an intense El Nino breathing down our neck and depressed dairy price, it’s more relevant than ever to be talking about how we can save money, time and energy.

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IrrigationNZ was pleased to release our first-ever annual snapshot of New Zealand’s irrigation sector recently. This was launched at our AGM earlier this month in response to enquiries about the health of the industry and proposed developments across the country. The 2015 Irrigation Snapshot provides a transparent window on irrigation in New Zealand – where we irrigate, what’s happening with future developments, how much water we use, what it is taken for and

the value this creates for our nation. Many stakeholders have asked for an update on the status of irrigation so we’ve pulled together the latest data to illustrate the national situation. New Zealand has approximately 720,000ha of land under irrigation. The snapshot highlights that another 350,000 hectares could be sustainably irrigated by 2025. New Zealand presently abstracts around 2 per cent of its water resource (minus hydropower which takes it to 5 per cent). By international standards this is an extremely low abstraction rate. Irrigation accounts for 60 per cent of water usage. Pastoral-based activities make up approximately three quarters of our irrigated area (dairy 50 per cent and sheep and beef finishing 25 per cent). The other 25 per cent of land under irrigation supports predominately vegetable and arable crops, alongside fruit and wine growing. In 2012 it was estimated that irrigated farms provided a $2.7 billion contribution to New Zealand’s economy, and more than double this in terms of the benefits to the wider community. IrrigationNZ welcomes your feedback on the snapshot or enquiries regarding developments within the irrigation industry. Downloadable copies of this industry snapshot can be found on our website; http://irrigationnz.co.nz/newsresources/publications/industrysnapshot/ Andrew Curtis is chief executive officer of IrrigationNZ

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A global dairy player in In response to global demand for greater supply chain integrity for infant formula and nutritional products, Synlait has spent the past two years transforming and growing their business to create an integrated supply chain that they control from start to finish. “Consumers around the world want complete confidence in the safety and quality of the products they’re purchasing, particularly when it comes to infant formula for their babies,” John Penno, managing director and chief executive officer of Synlait, said. “We’ve known that for some time and have invested in our business to be able to provide that assurance at the point of purchase to consumers.” As a business to business company, Synlait doesn’t own any consumer brands, but partners with a range of multi-national, regional market leader and uniquely positioned companies who distribute and sell their products around the world. “It’s still important for us

to understand the needs of consumers who purchase our customers’ products. We’re able to innovate as a manufacturer because of that understanding, and we’re beginning to see the benefits of being ahead of the curve as our business is now geared up to deliver a strong value added strategy,” Mr Penno said. Synlait’s supply chain begins with their 173 suppliers in Canterbury. They offer a programme encouraging best practice dairy farming – Lead With Pride™ – and several opportunities to differentiate milk on farm. A point of difference, according to Mr Penno, is they enable their suppliers to do more with their milk and receive premium payments for creating value on their farm. Mr Penno said in the 2015/16 season more than half of Synlait’s milk supply will attract a premium over their base milk price because a supplier has done something special on farm to create value for a specific customer. “The willingness of our suppliers to lead from the edge

Consumers around the world want complete confidence in the safety and quality of the products they’re purchasing ...

and pursue new, innovative opportunities underpins our ability to partner with customers wanting to sell value added products.” The latest Special Milk programme is Grass Fed, which is a partnership with US-based Munchkin Inc to produce an infant formula using milk exclusively produced from pasture-fed cows. Grass Fed targets growing consumer awareness in the United States around the


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Dunsandel

John Penno

nutritional benefits of milk from animals grazing pasture, rather than being farmed indoors on grain diets. Suppliers must follow the unique Grass Fed standard to provide the Special Milk, which outlines how to transition away from feeding any grain or concentrate feeds. Compliance with standard is independently assessed by AsureQuality and it will soon be ISO/IEC 17065 certified. In return for differentiating milk for Grass Fed, suppliers

receive a premium for every kilogram of milk solids (kgMS) produced. Another Special Milk programme is for The a2 Milk Company, where Synlait is the exclusive manufacturer of their a2 Platinum infant formula range sold in New Zealand, Australia and China. Milk from suppliers is processed at Synlait’s Dunsandel site, which is considered one of the largest and highest specification infant formula production

sites globally. A $250 million growth initiative programme saw a lactoferrin plant, 22,500m2 drystore and a state-of-the-art blending and consumer-packaging facility commissioned in 2014. Synlait’s third largescale spray dryer and a new administration office have recently been commissioned, with a product testing laboratory and new product development centre due to be operational before the end of the year.

Milk is processed into either a high specification ingredient, an added-value nutritional or infant formula powder (which may be put into a retailready package, onsite) or a nutraceutical product such as iNdream3, also known as night milk. It is then prepared for export on site, before being transported to Lyttelton port and shipped to customers around the world. “Investing in our manufacturing capability and wider site is critical to becoming the world’s most innovative and trusted dairy company,” Mr Penno said. “We’re now competing with some of the best infant formula and nutritional companies in the world, right here from Dunsandal. “One of our biggest opportunities is communicating every step of our supply chain to consumers who don’t know about the excellence we’ve achieved here in Canterbury”. To address the challenge, Synlait created a product verification and traceability system called Synlait Sure. It

allows a consumer to check the infant formula product they’re purchasing is genuine and to see how the product was made by entering unique details on their package into a website (www.synlaitsure.co.nz). Launched in China in April 2015, customers can choose to include the system on their product. It details each step of Synlait’s integrated supply chain, so consumers can purchase with confidence. “We now have the suppliers, customers, people and manufacturing capability needed to achieve our growth targets. It’s a very exciting time and we’ve come a long way from processing our first milk at the same site in 2008”. Mr Penno also points out there is an opportunity for new suppliers to join Synlait. “The growth we’re forecasting to achieve in the 2016/17 season has created a window for current suppliers to expand their milk supply and for other dairy farmers in the region to consider being a part of something truly unique,” Mr Penno said.

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INTERNATIONAL DAIRY NEWS UK Cows Britain’s deadliest animals Cows have become Britain’s deadliest large animal as figures reveal they were responsible for the deaths of 74 people over the past 15 years. According to figures from the Health and Safety Executive (HSE), cows killed 56 farm workers and 18 walkers by trampling or crushing their victims. Of the 18 ramblers killed by cows, all but one were walking

their dogs into fields. This has resulted in the National Farmers Union (NFU) suggesting that some deaths could be prevented as “people don’t understand animal behaviour”. The HSE said cows are now more lethal than dogs, which caused 17 deaths between 20052013. The figures led the organisation to issue new advice to farmers on how to raise cattle, including not holding cows in fields with public footpaths.

17-year-old steak!

Anthrax outbreak Restrictions are still in place at a farm in Westbury after it was confirmed a second cow died there from the deadly bacterial disease anthrax. One of the animals died on October 23, with the second cow dying four days later. Both cows were from the same herd at Storridge Farm. A footpath 1.8km long which runs from Cutteridge on the edge of Dilton Marsh to Brook Farm remains closed as a precaution and it was confirmed that no cattle from the field entered the food chain. The bacterial disease, which primarily affects herbivorous animals, rarely affects humans with the last case confirmed in 2006.

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Top restaurants like London’s Kitty Fisher’s and Chiltern Firehouse, Levanter in Manchester and Bellita in Bristol are selling steaks from middle-aged beef, from animals as old as 17 in some cases – as part of a new foodie trend. According to Nemanja Borjanovic, the Serbian-born owner of London restaurants Lurra and Donostia, who imports the beef through his company Txuleta (pronounced

chew-letter), older animals give a very different meat, far darker in colour than the pinky-red meat from younger animals that we see in supermarkets. Its flavour is deeper, stronger and, says Borjanovic, “it has length, like wine. The taste stays with you”. The meat is imported from one of two districts in Spain, Galicia or the Basque Country. The Galician beef comes from animals called Galician Blond, and the prized meat comes from old bullocks (castrated males).


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USA

Americans eat less beef, force change A drop in annual beef consumption in the United States means ranchers are looking overseas to put a better cut of steak on dinner plates. As Congress weighs whether to commit the US to the Trans Pacific Partnership (TPP) - a 12-nation free-trade pact, Texas cattle ranchers are looking to export further

afield to dinner plants in Japan, Vietnam and Australia. That global outlook has been on display in the two weeks since the World Health Organisation announced that eating too much beef is more than just bad for the heart — it might cause cancer, too. Health concerns have had Americans thinking twice about a ribeye for dinner for years. Their annual consumption of beef has dropped from 85 pounds in 1974 to 55 pounds last year. USA

U.S. per capita meat consumption Pounds per capita, retail weight

Source: USDA Agricultural Projections to 2018, February 2009. USDA Economic Research Service.

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India

Cow ambulances rescue holy cows from streets At a time when the holy cow has become a political hot potato in India, a Jharkhandbased industrialist-cum-social worker, RK Agarwal, has come up with India’s first of its kind ambulance service for bovines despite there being no human ambulances in the area. Earlier this month 10 mini-trucks, remodelled and specially designed in the shape of ambulances, hit the Jharkhand roads lifting cows lying injured in the streets, sick, or rescued from slaughter houses and transporting them to the nearest goushalas (cow shelters). The ambulances come with safety equipment that will lift the cows, no matter how heavy they are, with ease and ensure that the animals do not get hurt in the process. It will have a driver and technician, who will be trained in giving first aid to ailing cows.

Ireland

Ignoring dry period could affect productivity To ignore, or significantly shorten, the dry period could have a detrimental effect on the productivity of the herd in 2016, according to Ireland’s food authority. In the absence of quotas this year, Teagasc has stated that there may be a temptation to continue milking cows as long as they keep producing milk. However, it advises that this could prove to be a costly exercise in the long run saying it was important to remember that every cow needs a dry

period before she calves again and starts her next lactation. The dry period is the time when a cow’s mammary tissue regenerates, repairs and prepares to produce milk again. It is also the period when cows have an opportunity to the optimal body condition score, in preparation for calving and the start of the next breeding cycle.

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2 16

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NZ NEWS BRIEF Draft report on dairy competition released Primary industries minister Nathan Guy and Commerce and Consumer Affairs Minister Paul Goldsmith have welcomed the Commerce Commission’s release of a draft report on the state of competition in New Zealand’s dairy industry. The report was commissioned by the two ministers on June 2, 2015, as required under the Dairy Industry Restructuring Act 2001. That act allowed the formation of Fonterra and

includes provisions to promote contestability in New Zealand’s farm gate and factory gate dairy markets to ensure their efficient operation. “The Commerce Commission has formed an independent view based on its expertise as New Zealand’s primary competition regulatory agency. On balance, the draft report has found that competition is not sufficient to warrant deregulation at this point,” Mr Guy said.

He also has farming interests in Canterbury, Chile and the United States. He sits on the boards of Fonterra Co-op Group and ASB Bank and is a chartered member of the Institute of Directors.

FMG named best workplace New chair of DairyNZ Waikato dairy farmer Michael Spaans has been elected as new chairman of industry body DairyNZ at a special meeting of the board held recently. Michael will serve an annual term as chairman, leading an eight-member board, made up of five farmer-elected and three independent directors. He replaces long-serving chairman and former cabinet minister John Luxton who retired from the DairyNZ board last month after 12 years of service on dairy industry bodies. Mr Spaans is a dairy farmer from Te Aroha in the Waikato.

New Zealand’s leading rural insurer FMG is honoured to be named the country’s best large workplace for 2015. It’s the third year running FMG has been a finalist in the large workplace category and the seventh year in a row it’s

been named a category finalist. “What’s really significant and pleasing about this award is that it’s endorsement directly from our employees that FMG is a great place to work,” says Andrea Brunner, chief marketing and human resources officer. “We’ve worked hard as an organisation over many years to build a unique culture. “Being a great place to work means that employees are our best advocates and with record numbers of client growth over the last five years this means we are also a great place to do business.”

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New rules for Filipino dairy workers

Payout as good as it gets A sizeable fall in GlobalDairyTrade prices has raised fears that Fonterra’s $4.60/kg milksolids forecast payout might be as good as it gets for the current season, according to the NZ Farmers Weekly. Some analysts have recalibrated their market expectations, pushing out the crucial $US3000/tonne milk powder recovery level to the end of the season, not before. Because Fonterra needed $3000/tonne for its majority whole milk powder (WMP) production to deliver on its $4.60/kg farmgate payout, nothing higher was now expected to emerge.

New rules for Filipino dairy workers who provided incorrect information on their work visa applications will clear the path to enable them to stay in their jobs, Immigration Minister Michael Woodhouse announced recently. The erroneous details generally involved ramping up work experience and qualifications, and is thought to have caught out about 600 Filipinos working in the dairy industry. Mr Woodhouse said those workers who admitted providing incorrect information

17

would be issued with further work visas, as long as they are compliant in all other respects and meet the essential skills requirements. “This approach acknowledges that many of these workers are making a significant contribution to their employers and their communities and are well-settled in New Zealand,” he said.

formula manufacturing plant in Pokeno recently after a threeyear construction period. Yashili NZ - which was founded in July 2012 - said its state of the art plant, which covers 30,000 square metres and which will employ 85 staff, will have an annual production capacity of around 52,000 tonnes of formula.

Shipments to China are expected to begin in early 2016. The company said in a statement the plant’s location was optimal for logistics and transportation of product. Pokeno is strategically located on the main highway within the “golden triangle” formed by Auckland, Hamilton and Tauranga, the statement said.

New infant formula manufacturing plant China’s Yashili New Zealand a joint venture between Yashili International Holdings and Mengniu Dairy Co - officially opened its $220 million infant

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Farming Dairy Focus

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Opinion: Filipino visa dilemma The situation many Filipino dairy workers and their employers have found themselves dealing with in recent weeks has brought stress and heartache for many families whose lives have hung in limbo. And it’s a long way from over for some people. Even those whose paperwork is in order are hooked up in long processing delays as Immigration New Zealand scrutinises every single application for a visa renewal in an effort to identify further visadoctoring problems. Some of these people have been in the country for several years and have sound references earned by a strong work ethic during that time. Others may have embellished qualifications and perhaps exaggerated their experience, but in all honesty, who hasn’t? Most of us have massaged our CVs when applying for a job – perhaps not in terms of inventing qualifications – although it’s common practice in some parts of the world where one can purchase an

Michelle Nelson

RURAL EDITOR

Tweet me @ladyinredbands

online doctorate in almost any subject. We’ve certainly seen evidence of this in New Zealand. Earlier this year a “fake” psychiatrist managed to dupe the Waikato District Health Board for six months after pulling off a complex identity fraud. And who can forget the disastrous consequences of Gerald Shirtcliff ’s deceit, when he “acquired” engineering qualifications by means of identity theft? Shirtcliff was construction manager for the company that built the ill-fated CTV building which collapsed killing 115 people in Christchurch on February 22, 2011. My point is, the visa

Michael Woodhouse

problems identified in the INZ investigations are not unique to either a nationality

or an industry. And the consequences of having an industrious

dairy worker on a farm, with appropriate health and safety training, have be of less risk to the community at large than a fake psychiatrist or engineer. News from Immigration Minister Michael Woodhouse of a waiver for those Filipino workers who have breached visa conditions is of some comfort, however there are still sticking points. One Mid Canterbury farmer waited eight weeks over the calving season for approval to be granted for his new employee to start work. That was a result of the requirement to advertise the position to potential Kiwi workers prior to taking on a migrant. In reality, there is not a bank of New Zealand-born or resident workers available. Many who are looking for work have neither the inclination nor the experience to work long hours with early starts in the dairy industry. Until this can be rectified by providing suitable training or incentives, the industry will be reliant on migrant workers.

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Dairy Focus - November 2015  

Dairy Focus - November 2015