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road safety Amber beacons are to be mandatory on farm vehicles for on-road travel. page 28

animal health Vets advise to think BVD when attending bull sales in the coming months. page 31

Rural NEWS to all farmers, for all farmers

may 7, 2013: Issue 537 

Agresearch A world-class research and education ‘hub’ is to be set up at Lincoln University in 2014.

page 11

www.ruralnews.co.nz

Rain brings relief for most P E TE R BU R K E peterb@ruralnews.co.nz

THE COUNTRY is entering a crucial period following the drought, says outgoing MPI director-general Wayne McNee. McNee told Rural News much of the country has had good rain and is getting good pasture growth. If this continues for three or four weeks, with rain and warm weather, it will help set up many farmers for the winter. But much depends on how soon cold weather stops that growth. “Farmers are positive at the moment. They are getting good growth and that’s starting to set them up for winter, depending on where they are and if

they’ve had irrigation. “There is no doubt some farmers have been seriously affected and it will take them time to recover. But the story is generally a lot more positive than it was a few weeks ago and it is getting more positive. However, there are areas like the central North Island and Hawkes Bay, which still have serious issues.” McNee says feed is important and MPI is working with suppliers to see what the feed requirements are likely to

Eyeing the silverware She’s already got her eye on the Ahuwhenua Trophy. Traci Houpapa, is chairman of Te Uranga B2 Incorporation, which is one of three finalists in this year’s award for excellence in Maori farming. It’s now 80 years since the Ahuwhenua Trophy was first inaugurated and this year the competition is for the best sheep and beef unit. The other two finalists are Te Awahohonu Forest Trust and Te Hape B trust. (See pages 12 and 26-27 for more details)

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be. The big lesson from the drought has been the value of irrigation. “It reminds us all how important irrigation is and the need for investment to give resilience to farming.” Meanwhile, AgFirst consultant Darren McNae, in Rotorua, says the drought has hit farming in the central North Island and the biggest impact has still to come. “This is on ewe performance and the impact next year. Animal condition varies throughout the region. A lot of

ewes came through in pretty good condition out of a good growing season last year and a good spring. “But we’d still expect to see the lambing percentage drop by up to 10%. The big pressure now is on managing feed is through until the spring.” McNae says farmers need to be proactive about how they manage their feed resource through to spring and be realistic about what they are dealing with now. @rural_news facebook.com/ruralnews

It won’t be easy! PA M T I PA pamelat@ruralnews.co.nz

RATIONALISATION IN the red meat processing sector needs to happen – but if “it was easy it would have happened before today”, Minister for Primary Industries Nathan Guy says. “Forming Fonterra took seven years – all of the work, talk, through parliament to legislation took seven years,” he told the Westpac organisation “Farming for the future” seminar in Morrinsville recently. “That was working through a cooperative base. What you’ve got in the red meat sector is about 56% of the red meat sector are in some form of cooperative. The rest are in private companies. “What I have said is ‘yes there is an over-capacity issue, it is great that farmers are mobilising on this issue (with meetings). Let’s see what proposals come out of this’. “Yes this needs to change. The banks in some cases are a bit nervous about their investment as well. Interestingly enough, with the drought we utilised the over-capacity for about two weeks. “If you think out 12, 15, 24 months – the livestock numbers aren’t going to be there so something is going to have to happen.” – More page 5

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Rural News // may 7, 2013

news 3 issue 537

www.ruralnews.co.nz

PKE response disappoints an drew swallow andrews@ruralnews.co.nz

News������������������������������ 1-16 World������������������������������ 17 Markets��������������������� 18-19 Agribusiness����������� 20-21 Hound, Edna������������������� 22 Contacts������������������������� 22 Opinion����������������������� 22-25 Management����������� 26-29 Animal Health�������� 30-33 Machinery and Products������������������ 34-37 Rural Trader���������� 38-39

Head Office Top Floor, 29 Northcroft Street, Takapuna, Auckland 0622 Phone: 09-307 0399 Fax: 09-307 0122 Postal Address PO Box 3855, Shortland Street, Auckland 1140 Published by: Rural News Group Printed by: PMP Print Contacts Editorial: editor@ruralnews.co.nz Advertising material: davef@ruralnews.co.nz Rural News online: www.ruralnews.co.nz Subscriptions: subsrndn@ruralnews.co.nz ABC audited circulation 80,767 as at 31.12.2012

DON’T SAY we didn’t warn you, say the authors of a damning report on the PKE supply chain. Their warning comes after the Ministry for Primary Industry (MPI) said it had no concerns about Malaysian imports into New Zealand. Having visited two Malaysia PKE mills last September, Federated Farmers grain executive members David Clark and Colin Mackinnon filed a report with MPI detailing what they believe are serious biosecurity risks posed by PKE imports (Rural News, November 4). MPI last week issued a statement that Malaysian PKE meets New Zealand’s import standards and that Malaysian officials confirm no palm kernel expeller (PKE) has been exported to New Zealand from the processing mill Clark and Mackinnon had concerns about. However, Clark and Mackinnon have slammed MPI’s response as: “disappointing but expected.” That mill was one of two they visited and in an area where there’d recently been a foot and mouth outbreak and while birds and other animals could obviously access PKE post-processing. However, as far as the mill was concerned, it met all the standards for exports.

MPI director plants, food and environment, Peter Thomson, says the ministry has reviewed all the documentation for PKE shipments from Malaysia since 2011 and met Malaysian officials to ensure full understanding of New Zealand’s concerns.  “MPI officials will also visit Malaysian production mills in May this year to ensure each step along the supply chain is being correctly adhered to in accordance with New Zealand’s Import Health Standard. “Malaysian officials are also carrying out their own investigation to ensure they are adhering to New Zealand’s requirements.” Thomson says PKE for import to New Zealand must be processed in palm-only plants to remove the possibility of contamination from other products, and there are “stringent controls all along the supply chain.” Documentation must attest that handling, storage and inspections post-production and pre-shipping are correctly managed; also, that PKE was heated to 85oC, a temperature at which the foot and mouth virus cannot survive, and every shipment is fumigated. “From our understanding of the export supply chain, I do not see how

Lesson learnt?

PKI imports pose a

MPI can be serious biosecurity certain that risk claims a PKE did Fed Farmers not come to report. New Zealand from plants such as the one we visited because industry practice is to sell PKE to commodity traders who consolidate [PKE consignments] at the port for bulk export,” Clark told Rural News. “We all accept that when the PKE is expelled from the screw press the product is clean. “It is the storage and supply chain from then on that is the source of contaminants. To rely on this heat treatment for biosecurity purposes is completely flawed as it occurs some weeks or months prior to export.” Clark says he considers the report puts the dairy industry, Ministry and government “on notice”. “In my view there are clear failings in the import process for PKE. It is now up to the dairy industry and government to decide if they wish to learn lessons from the kiwifruit / PSA tragedy.”

Fonterra job cuts please investors THE SHARE market has reacted favourably to Fonterra’s plan to cut 300 jobs in New Zealand and save $65 million annually. Shares in Fonterra Shareholders Fund jumped 20c on the news, breaking the $8 threshold for the first time. Last Thursday (May 2) morning, the shares were hovering about $8. The co-op says 50 roles are vacant

because of a staff freeze imposed in February. The other jobs will go from its corporate offices in New Zealand. Most of the savings will go to support Fonterra’s growth, says chief executive Theo Spierings. “Fonterra has a clear strategy to drive growth,” says Spierings. “While we are investing in growth, we have to make

sure our people are working on the right things and that we are spending our precious capital on the right priorities. “The review has identified potential opportunities for us to deliver a range of corporate services centrally, reducing duplication and removing layers of management.” Fonterra employs 17,000 people globally.

A PROTOCOL on better communication over food safety issues is being developed between dairy companies and the Government. The Dairy Companies of New Zealand (DCANZ) met MPI officials last week. A joint working group including all members of DCANZ has been set up. The recent DCD-tainted milk scare exposed differences between dairy companies. Fonterra came under fire for not informing the other processors about minute traces of DCD found in milk products. DCANZ chairman and Fonterra director Malcolm Bailey says the meeting with MPI was a positive step forward in strengthening closer ties between dairy companies and government to meet market information needs on food testing. “New Zealand has one of the most robust food safety response systems in the world. The detection of DCDs was not a food safety issue, but demonstrated strong interest from markets for information on food testing,” says Bailey. MPI and DCANZ have agreed to formalise coordination and communication protocols related to all future food testing incidents, to help meet market needs both in New Zealand and overseas. Outgoing MPI chief executive Wayne McNee supports the DCANZ move. “We pride ourselves on our food standards and it’s important that we have an agreed framework for dealing with issues around food integrity and food composition that will become more sensitive as testing moves forward in the future.” @rural_news facebook.com/ruralnews

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Rural News // May 7, 2013

4 news

Rain ends dairy’s golden run

We’re here to stay – ANZCO chair su d es h ki ssu n sudeshk@ruralnews.co.nz

REMOVAL OF excess capacity is a key to breaking the impasse in the meat industry, says Anzco Foods chairman Sir Graeme Harrison. This will ultimately be achieved, either in a relatively orderly way or through company collapses, he says. “Either way, Anzco Foods as a predominantly beef company intends to remain a part of the New Zealand meat industry,” Harrison told Rural News. His comments come as farmers make another push for merging co-ops Silver Fern Farms and Alliance in a bid to lift returns. However, combining the co-ops is unlikely to be enough to change the industry’s performance, strategy and structure. SFF and Alliance collectively hold a market share of only 53%. Adding the private Affco and Anzco companies would bring total processing capacity to nearly 80%. According to Harrison, Anzco supports the objective of New Zealand meat industry consolidation. But it is a strong believer in the importance of creative tension,

sudesh kissu n sudeshk@ruralnews.co.nz

ANZCO chair Graeme Harrison.

regardless of the business sector, he says. “It has been unfortunate that focus has been given to the model of a single dominant player. “ANZCO owned no slaughter plants 20 years ago and was a sheepmeat company, yet has transformed itself to become the industry’s second largest beef processor.  It is important that such an opportunity is never lost to some other future industry player to be able to do the same, whether it is farmer or privately owned.” Harrison, who has been associ-

ated with the meat industry for 40 years, also holds directorships in dairy and fishing sector companies. He says land use competition with dairy and dairy support is the major challenge facing the red meat sector. While improved market access and consumer demand in Asia looks set to improve the prospects for beef, the sheep sector will continue to be highly challenged unless returns for all items, and especially wool, can be lifted significantly, he adds. @rural_news facebook.com/ruralnews

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GLOBAL DAIRY prices are easing and the recent rain in New Zealand is partly responsible. BNZ economist Doug Steel says the rain has severely lessened the supply risk out of New Zealand, the largest exporter of dairy products. Steel is not surprised by last week’s 7.3% drop in the GDT’s trade weighted index. Milk powder prices fell sharply, with whole milk powder down 10.2% and skim milk powder down 9.5% from the previous auction. He points out the big factor in nine consecutive price raises was supply concerns out of New Zealand. “While this won’t turn around quickly, the rain has certainly lessened the supply risk for longer term contracts,” he told Rural News. The contract price for September dropped 24% over the previous auction. Despite the drop, global dairy prices remain high. Prices have risen 60% since December and a 7.3% drop is not a surprise, says Steel. And they could drop further as northern hemisphere supply enters the market. But the drop will be small as strong demand from China and flat supply from Europe, the US and Australia keep a squeeze on supply. Westpac economist Nathan Penny

agrees prices will drop further. Prices for the new season’s product (contracts for delivery in four to six months time) now account for the majority of products on offer, he says.   “Accordingly, as the new season’s product continues to replace this season’s drought-hit offerings, prices should drop further. From here, we expect world dairy prices to descend further from their peak, but to remain at elevated levels by historical standards.” Westpac has also revised its 2012-13 production estimate. It expects milk production to be 2% less than last year’s record yield. “While the rain across the country improves prospects for next season’s production, it appears to have come too late to reverse falls in production this season. “ Fonterra’s next GDT auction will be on May 15. The GDT-TWI is now 1580 compared with 894 at the same time a year ago, and represents a 77% gain over that time, despite last week’s fall. The index peaked at 1704 on April 16. Anhydrous milk fats fell 5.2% from the prior auction but are still up 70% from a year ago. Butter fell 6.7% from the previous auction. It was not offered a year ago. Cheddar cheese was up 3.4% from the prior auction, and up 72% from a year ago. Rennett casein fell 3.1% from the prior auction, but is still up 74% from a year ago.

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Rural News // may 7, 2013

news 5

Change called for, but answers not so clear P E TE R BU R K E peterb@ruralnews.co.nz

BEEF+LAMB NEW Zealand chair Mike Petersen says his organisation will do what it can to help the group of farmers campaigning for changes in the meat industry. About 600 farmers attended a recent meeting in Feilding to hear producers’ concerns about the state of the meat industry and put forward a plan for change. The meeting voted to support the organisers in their quest for change. Petersen says BLNZ has already helped the group by supplying data, used in their presentations. However, calls for BLNZ to fund the campaign will probably not be heeded and the meat companieas don’t want BLNZ to get involved. Petersen says some farmers have already put money up and that’s the way it should be. “There is certainly a lot of farmer frustration out there, but this campaign has to be grassroots farmer driven.” Petersen says an important point often missed in the debate is that farmers do not own a majority share of the red meat processing and exporting sector. “While SFF and Alliance are large in sheep meat collec-

tively, their market share is still only 52% and for beef collectively they only hold 39% of market share.” An organiser of the Feilding meeting, Ohakune farmer John McCarthy, told the gathering that meat farming was not a worthwhile profession to be in at present because of the state of the industry. “We’re here because we are sick of the roller coaster. There’s one good year in ten and we’re told it’s our fault. I am sick of being told by our farming leaders that we need to lift our game… it may have escaped their notice that we have already done that. This meeting is not about blame, it’s about finding a solution. If we don’t find a solution we may as well pack it in.” But McCarthy warned that if this change movement was to be successful it needed to be taken slowly; past movements have failed because people had moved too quickly, he said. Among those present at the meet-

ing was Labour’s spokesperson on agriculture, Damien O’Connor. He described the turnout as ‘brilliant’ and says it showed North Island farmers were just as concerned as those in the South Island. He says a new model for the meat industry needs to be developed – one that connects with consumers. “I think there has been too much year-to-year thinking by the cooperatives in particular. They need to work Around 600 people turned up to the meeting at Feilding.

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An interested attendee at the Feilding meeting Brian Lochore.

the outcome of two further meetings. But he has one other concern – apathy! “If you are a farmer who’s been in the game for a while, and have very little debt then you can still stagger on from year to year and you haven’t got that impetus to change,” he warns. @rural_news facebook.com/ruralnews

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out where New Zealand grass fed protein will be in the world in 20 years and I don’t think they have thought about it.” At the Feilding meeting Alliance chairman Owen Poole revealed that a group he referred to as the ‘big four’ was also working on a plan for change, which he claimed could be made public in about two months. “It’s probably further advanced than this group, but not far enough advanced to talk about it in any detail.” Meanwhile, Eoin Garden, chairman of SFF, told the meeting his company was committed to working with the new group and pointed out that any future strategy should be designed to “create greater wealth”. McCarthy says he pleased with the outcome to date and the mandate for change, but the success of the change movement will be in the detail and in

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Rural News // May 7, 2013

6 news

Fears of Fonterra payout revamp allayed

Strategy released PRIMARY INDUSTRIES Minister Nathan Guy recently launched the New Zealand Animal Welfare Strategy, setting out a high level framework for how we treat animals. “Animal Welfare Matters sets out a formal foundation for New Zealand’s animal welfare legislation and policy,” says Guy. “It says that it matters how animals are treated, and that we have responsibilities toward animals. It also says that using animals for activities like farming and racing is acceptable as long as it is humane.” The strategy lists four main routes to improved animal welfare: Better planning to prevent animal welfare problems; Better animal husbandry, science and technology; Clear expectations and sanctions, with help for people to comply; Measuring animal welfare performance. “New Zealand earns about $20 billion a year by exporting animal products, such as meat, milk and wool. Part of why we are so successful internationally is our world-leading reputation for animal welfare. It is vital we recognise and protect that. “New Zealand has a proud history of caring for animals and being a world leader in this area, but we are always looking to do better. This document will be followed up with new legislation to be introduced shortly updating the Animal Welfare Act,” Guy adds. The strategy follows public consultation last year when 2000 public submissions were received.

SUDESH KISSUN sudeshk@ruralnews.co.nz

FONTERRA FARMERS have been assured the co-op is not changing its payout forecasting system. Fonterra Shareholders Council chairman Ian Brown told Rural News the proposed guaranteed milk price scheme (GMP) will be another tool for farmers to mitigate volatility. “Fonterra is not changing the way the milk payout operates. GMP is just a tool to protect farmers against any downward risk to the payout.” Brown doesn’t expect all farmers to adopt the scheme, whereby farmers will be able to lock in a milk price announced at the beginning of a season for up to 75% of their milk supply. Global dairy prices have fluctuated sharply in recent years causing the dairy payout to swing. Fonterra says volatility in commodity prices is here to stay. A

guaranteed milk price will help farmers manage their business and cash flow, it says. About 200 Fonterra farmers will trial the scheme next season. Brown says the scheme is a positive move catering to the needs of some farmers. “It’s one of the risk management tools available to farmers and will appeal to new and growing farmers who need certainty to deal with risks around commodity prices and currency. But farmers embracing GMP may have to pay a price. If the milk payout rises above the fixed price agreed by suppliers under the GMP scheme, farmers will lose out. A break fee will be charged for pulling out of the scheme and reverting to the normal pricing system during the season. Fonterra’s managing director of group optimisation and supply chain, Ian Palliser, says certainty can be particularly important for farmers at times when they are con-

sidering investing in new equipment, expanding or undertaking a new conversion. “It’s a bit like having a fixed interest rate on your mortgage versus a floating rate. It enables you to know exactly where you stand with a percentage of your production and this can help with future planning.” GMP also has benefits for the co-op. Palliser says Fonterra will know how much a certain proportion of its milk will cost the co-op for the season. “This in turn provides us with another selling tool when talking to our customers, some of whom are also looking for price certainty,” he says. “We have been talking to farmers and the Shareholders Council about the GMP concept and we’re now inviting farmers to take part in the pilot scheme that will run over the next season.” Federated Farmers Dairy chairman,Willy Leferink says GMP

Ian Brown

is a risk management tool more for the cooperative than farmer-shareholders. “For farmers to fix intelligently, they would need to take into account seasonal weather outlooks here and overseas, global markets and what the dollar may do; in other words, the sorts of complex risk management farmers rely on the cooperative for and expressed through the forecast payout.  Federated Farmers would be concerned if GMP implied there were going to be less accurate forecasts.”

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Rural News // may 7, 2013

news 7

Macca’s lamb is gone burger! A ND REW SWA LLOW andrews@ruralnews.co.nz

NINE MONTHS after launching lamb burgers they’ve gone from McDonald’s menus. The fast food giant says they will be back, but acknowledges the promise of permanent listing hasn’t eventuated. “What we’ve found with the lamb burgers is they work best making a cameo appearance on the menu,” spokeswoman Kim Bartlett told Rural News. “They’re not there at the moment but they will be from time to time.” When the Serious Lamb burger and Lamb Snack Wrap were launched last August McDonald’s said New Zealand was “the only McDonald’s market in the world to offer lamb on its menu permanently.” However, since last month no

lamb product has been available in its restaurants. Bartlett says McDonald’s was “really happy” with sales initially, but as with all launches they waned towards the end of the campaign. “What we have seen over the last 12-18 months is a consumer shift to wanting more variety, more often, in our menu. While there are core menu items that remain a constant, our customers love new tastes and options. “With lamb this means offering different sauces and other ingredients, rather than one single product. With this in mind we believe the best role for lamb is as a limited time product we can bring on and off the menu. “Much like the Kiwiburger, we believe the

Serious Lamb burger has a following that will enjoy it as a limited time product.” Variations such as the Moroccan Lamb burger, and more recently Barbeque Lamb burger were

only ever intended as limited time products, and overall the introduction of lamb lines has been “very successful,” says Barlett. “Our customers loved the addition of a new protein to our menu, and, much like Angus, it has given new customers a reason to visit

McDonald’s. “It has also attracted attention from other parts of the McDonald’s world, and we know that lamb remains a consideration for other markets.” Beef + Lamb New Zealand chief executive Rod Slater says McDonald’s move suggests sales were insufficient for lamb to entrench itself on the menu as the Angus beef products have. While that’s disappointing, the sheepmeat industry shouldn’t “beat itself up” about it, he believes. “If I’m brutally honest, I’d have liked to have seen a permanent position but [McDonald’s] have to make commercial decisions and I’m sure we’ll see it come again…. We shouldn’t see this as totally bad. It’s shown there is a place for lamb in

a McDonald’s type outlet but more as a promotional product than a mainstay.” Federated Farmers Meat and Fibre chair, Jeanette Maxwell, echoed Slater’s views. “It’s disappointing as it was supposed to be a permanent move so I hope we’ll see it back on the menu in the not-toodistant future.” Maxwell also has a tip for the make-up of the Serious Lamb burger. “Drop the eggs and I think it would be far more popular. Eggs and lamb is just weird.” Bartlett says that as with any product launch, McDonald’s has followed up with customer research. “Some key feedback we received was on the size of the burgers, and the price. The BBQ Lamb burger offered a smaller product at a lower price point.”

Miraka weighs up new options MAORI DAIRY company Miraka says it’s looking at a $100 million of new investment opportunities. Chairman, Kingi Smiler told Rural News the company’s doing due diligence on these options to decide which ones to go with. “We are seeing a lot more activity by people bringing opportunities to us, but we’ve also had a fairly clear idea of some of the opportunities we want to investigate and we have been doing that for some time,” Smiler says. “We have been approached by other Maori groups to see if there is any leverage they can receive from the investments and the approach we’ve taken to assist them to achieve their goals and aims.” This comes just days after Miraka signed a deal with the new owners of the Crafar farms, Shanghai Pengxin, to process UHT milk on their behalf for export to China. As a result of this deal, Miraka will be building a UHT plant alongside its existing milkpowder factory near Taupo. Smiler says Shanghai Pengxin is looking at adding value to the milk from newly acquired farms in the central North Island. When the new plant is built he expects Shanghai Pengxin to take up most of the capacity with its own range of products. Smiler says the deal will enable Miraka to add value to its own brand, but the issue of co-branding and how Miraka does this is still to be decided. However, Smiler says the financial gains the new deal brings will be reflected in the payout to Miraka suppliers. – Peter Burke

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Rural News // May 7, 2013

8 news

China no problem says Asia buff

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tunities. But as I see it, the protection of intellectual property is important and New Zealand has to be strict about that. Protecting IP has been a problem not only for us, but everyone trading with China. “I think their government is trying hard to clamp down on those counterfeit type prod-

which we produce.” Kearns says he doubts if China will ever abandon New Zealand as some people are suggesting, but says they will in time try to do as much in their own country as any other nation would do. “They want to boost their own productivity and employment oppor-

CE 195

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A RESPECTED businessman with vast experience in Asia says New Zealand has little to fear from expansion of trade with China. Graham Kearns, executive director of the New Zealand China Trade

a slowdown,” he explains. “But slowdown in China is quite different from slowdown in our sort of society. They are looking at 6% to 7% growth over the next year or so and with the growth of the middle income population in China there’s going to be greater demand for commodity food products

O

peterb@ruralnews.co.nz

Association, says without the Chinese market New Zealand would have suffered more than it has from the global financial crisis. He doesn’t agree with those who say expansion of trade with China is risky. “I don’t think the bubble will burst with China, but there could be

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Exports like milkpowder have seen China grow into our biggest export market.

ucts being produced there because it’s a bad look for them.” Kearns says New Zealand has to look at opportunities to further process products before these

drinkers, but the younger generation is starting to drink more white wine. “While white wine is not the preferred wine at the moment, I think it could change and we

“They are looking at 6% to 7% growth over the next year or so and with the growth of the middle income population in China there’s going to be greater demand for commodity food products which we produce.”

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– Graham Kearns are exported to China. Timber products are an option, but he says the margins in this area are tight. Food products are also good options, including wine. “We are large producer of white wines, which is not the predominant wine drunk in China. They are predominantly red wine

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Rural News // may 7, 2013

news 9

Wool Equities hoping that ‘difficult’ times are over pamelat@ruralnews.co.nz

2013

12-15 June

FREE TRADE agreements which focus on better access for New Zealand dairy products have a “collateral” effect on manufactured products – including wool, says Wool Equities Ltd. However, it believes high-quality, guaranteed New Zealand-made wool products are making a resurgence. Wool Equities lost $548,000 to December 31, 2012 and described the general outlook for business as “difficult”, in the half-year report released last week. Wool Equities bought a major shareholding in the woollen mill at Milton last year with the plant facing

closure. It partnered with a consortium of 12 textile producing and retailing clients critically dependent on the plant. It also took over Town and Country Textiles Ltd in Palmerston North, one of the few remaining weavers’ plants in New Zealand. It also has interests in Romney Rugs and Miltown Properties. Wool Equities, with 7800 farmer shareholders, says in its report that the free trade agreements which focus on dairy “have the collateral effect of allowing all manner of manufactured products into this country, that coupled with an ever-rising dollar, impacts on the viability of New Zealand manufacturers”. “That said, there is a growing demand from dis-

“There is a growing demand from discerning customers for guaranteed New Zealand-made products.” cerning customers for guaranteed New Zealandmade products. In the wool textile sector, that can only be achieved if the yarn is spun in this country and it is that discerning market the company as a whole seeks to serve,” says chairman Cliff Heath in the report. “It is a niche that can be served and will deliver profit once our various plants are up to full productive capacity.” Both Bruce Woollen Mill – the new name for the Milton plant – and Town and Country Textiles have bought new equipment from Australia

to produce a greater range of products. While Bruce Woollen Mills is not yet using large volumes of wool, “the ability of textiles businesses in New Zealand to continue to produce high quality guaranteed New Zealand made wool products is preserved and enhanced”. It is now marketing itself to the wider sector within New Zealand and Australia. In respect of Romney Rugs, the report says the US carpet and rug market has been depressed but new channels and initiatives are starting to

show results. Wool Equities has moved its head office from Christchurch to Milton. The board was aware it needed to invigorate itself with marketing expertise and “produce a new younger board image”. Two new women directors with marketing expertise have been appointed: Barbara Anderson and Anne Walsh. Anderson is director of operations at Les Mills International, leading global sales in clothing and equipment. She has spent the last 20 years in senior leadership roles in global companies. Walsh has a background in FMCG business specialising in branding and marketing, and previously came from Unilever in the Canada division.

Tomatoes New Zealand has called on the government to ensure irradiated Australian tomatoes and capsicums are clearly labelled. The industry body representing 150 commercial, fresh tomato growers is urging Food Safety Minister Nikki Kaye to ensure that labelling of loose irradiated produce is carried out. From June this year, irradiated Australian tomatoes and capsicums could be available in New Zealand retail outlets, cafes and restaurants. The Minister for Food Safety is due to make her decision on the Food Standards Australia New Zealand (FSANZ) proposal this month. “We are demanding compulsory labelling on all irradiated produce, loose or otherwise, be clear and enforced, so that Kiwi consumers can make an informed decision between Australian irradiated tomatoes and New Zealand tomatoes which are never irradiated,” says Alasdair MacLeod, chair of Tomatoes New Zealand. “Consumers have the right to know where their produce comes from and how it has been treated. “Unlike Australia, New Zealand does not have compulsory labelling of fresh produce – so under the current regime, unless retailers take it upon themselves to clearly label irradiated Australian tomatoes and capsicums, consumers won’t know.” MacLeod says this is a perfect example of why TomatoesNZ supports the mandatory country of origin labelling being introduced into New Zealand. “We label shoes and clothing with their country of origin. Why wouldn’t we label food?”

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Rural News // May 7, 2013

10 news

McNee leaves MPI to head LIC P E TE R BU R K E peterb@ruralnews.co.nz

LIVESTOCK IMPROVEMENT’S new chief executive Wayne McNee always had plans to work for a commercial organisation in the primary sector. After two years leading MPI, McNee will move to LIC in late July.

He told Rural News the opportunity to move came sooner than expected and accepts that there is still unfinished business at MPI. “But when the role came up and I was approached about it, I thought well this is a good opportunity and a company with a lot of potential for growth. It’s a farmer-

owned cooperative, which attracted me as well and it was too good an opportunity to let pass.” He sees the LIC role as a good opportunity to work for a company that is growing and has a lot of potential, both in its core genetics business and farm information systems. LIC is a big investor in

R&D by New Zealand standards, and there is opportunity for excellent service to farmers. McNee was responsible for creating the new MPI, which included agriculture, fisheries, food safety and biosecurity. “The highlight for me was getting clarity on what the ministry is about,

building strong relationships with the companies in the sector to get that clarity and then starting to deliver on it. The merger was a huge challenge to bring three agencies together and I think we’ve pulled that off successfully.” McNee says change will continue at MPI and it

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Wayne McNee says he’d always planned to work for a commercial primary sector organisation.

will be up to his successor to manage this. “But the strategy won’t change. The ministers are comfortable about where MPI is heading.” McNee is also a former CEO of Pharmac and has

worked as a policy advisor in the Department of Prime Minister and Cabinet before joining Fisheries and then MPI. @rural_news facebook.com/ruralnews

Like the cat who got the cream! SUD ESH K I SSUN sudeshk@ruralnews.co.nz

THE APPOINTMENT of Wayne McNee as LIC’s new chief executive is a huge accolade for the farmer-owned co-op, says chairman Murray King. This appointment reflects the role LIC plays in the New Zealand agricultural sector and the economy generally, he says. “Wayne is moving from the ministry to what’s often called the engine room of the dairy industry. We’re one of the country’s best kept secrets….” McNee has been director-general of MPI since November 2010.  In 2011, he led the merger of the Ministry of Agriculture and Forestry, the New Zealand Food Safety Authority and the Ministry of Fisheries to form MPI. He joins LIC on July 29. Primary Industries Minister Nathan Guy says the merger has resulted in savings of $20 million a year and created a new strategy of ‘grow and protect’. “Wayne has created great relationships with key stakeholders, here and internationally. He knows that businesses are the engine room of economic growth. “I’m sorry to see Wayne go but his new role as chief executive LIC will utilise his skills, experience and knowledge.” Federated Farmers has described McNee’s move as a gain for the primary industries sector. “This role shows the versatility of Wayne who has performed to a very high standard with the public service and now departs for a high profile leadership role in a company important to New Zealand agriculture,” says Bruce Wills, Federated Farmers president. “Hehas put the Ministry on the right path for farmers following the merger of the old MAF with the Ministry of Fisheries.  I feel disappointed in one regard because he leaves it, just when we are starting to see the fruits of his work appear in this new and dynamic Ministry. “I know Wayne believes New Zealand agriculture can lead the world and LIC is positioned to help achieve that.”


Rural News // may 7, 2013

news 11

New agricultural research hub at Lincoln interests to create the and funding. Institutes (CRIs) innovation hubs. Science and InnovaAgResearch, Plant & Food pamelat@ruralnews.co.nz AgResearch chief exection minister Steven Joyce and Landcare. says, “The Lincoln hub has utive Dr Tom Richardson Primary Industries A DETAILED business the potential to transform says at the Lincoln hub it Minister Nathan Guy plan will now be develplans to concentrate many New Zealand’s farming says the hub has been oped to set up a worldof its on-farm research productivity by providclass agricultural research made possible because of Lincoln’s need and education ‘hub’ at to rebuild its sciLincoln University, near “The Lincoln hub has the potential ence facilities postChristchurch. to transform New Zealand’s farming earthquake and This will be the first AgResearch’s deci- productivity by providing a one-stop of several primary indussion to invest the try research hubs to be shop allowing information and ideas $100m in upgradset up around the couning its science facil- to be shared more easily.” try financed partly by a ities around the $100m investment by ing a one-stop shop allow- areas. AgResearch plans country. AgResearch and working a focus on farm systems, ing information and ideas Lincoln University with a range of partners. environmental science to be shared more easily. One aim will be to support says development should and dairying at its Ruakura start on the hub from early Internationally, science the Government objeccampus in Hamilton and 2014, with continued work and innovation parks that tive of doubling primary much of the beyond-thecollect together public this year on governance, exports to $60 billion by farmgate science is proand private organisations management 2025.  posed for its Grasslands in one place drive a lot of structure The Lincoln hub campus in Palmerston education, science and concept plans North. At its Invermay innovation. The Lincoln and business campus, near Dunedin, it hub can achieve this for proposal plans to focus on environNew Zealand farming.” have been mental and farm systems AgResearch says the developed capability, says Richard$100m investment is the by Linlargest of its kind in New son. coln UniNow the programme Zealand agricultural sciversity, has the support of shareence. Reflecting global DairyNZ trends, it is working with holding ministers, work and the will start with a detailed research providers Crown design and consultation and sector Research phase, he says. The new investment programme, starting this year, will be funded mainly through the disposal of existing under-utilised assets, and will not require any new Science and Innovation minister Steven Joyce. Government money. PA M TI PA

Lincoln chancellor Tom Lambie says the Lincoln hub is an integral part of the university’s wider plan to enhance its strategic position as New Zealand’s specialist landbased university. “The work of the Lincoln hub will be crucial to food production and agribusiness… the hub will become a global centre for research and education excellence.”

Anthony Scott, chief executive of Science New Zealand, says the Lincoln hub proposal is significant in the drive to enhance New Zealand’s innovation and productivity. “Hubs are proven performers in generating new ideas from the interaction of industry and researchers, attracting and fostering talent vital to our economic future, and shortening the time to put ideas into action.

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Rural News // May 7, 2013

12 news

Bar continues to rise for Maori farming P E TE R BU R K E peterb@ruralnews.co.nz

THE STANDARD of the entrants in the prestigious Ahuwhenua Trophy

awards continues to rise, says the chairman of the trust that runs the awards, Kingi Smiler. He told Rural News that all the finalists in this

year’s event, which is for the best Maori sheep and beef farm, have demonstrated that the bar’s been lifted on previous years. Smiler says Maori farms

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are three-ten times larger than most commercial farms in their regions and in all areas of performance they are well above the average. “This shows that it can be done on a large scale and shows other farmers just what can be done. The key trend I see over time is that in the leadership and governance areas these farmers are performing at such a high level that they great role models for the whole industry,” Smiler adds. It’s now 80 years since the awards were inaugurated by Sir Apirana Ngata and the then GovernorGeneral Lord Bledisloe. After an initial burst of interest, the awards lapsed until 2003 when they were re-launched – but on the basis that the trophy would alternate each year between dairy and sheep and beef. “It’s interesting that many of the criteria that applied to the competition in those early days still apply today. These include the importance of leadership and sustainability which continue to be major factors,” says Smiler. “This year’s three finalists are clearly demonstrating that they are leading the whole industry, not just Maori farming.” He says one key difference between Maori

Kingi Smiler says Maori farms are both bigger and performing better than the average.

and mainstream farming is that Maori are required to farm for sustainability and also to generate cash returns for owners.

support. That contrasts with mainstream farming which is essentially about property development and capital gains.”

“The land is never going to be sold. It’s being held for future generations and therefore the current generation needs to benefit. For that to happen there needs to be cash dividends, education and cultural support.” “The land is never going to be sold. It’s being held for future generations and therefore the current generation needs to benefit. For that to happen there needs to be cash dividends, education and cultural

Smiler says he’s disappointed at the lack of interest in Maori farming by mainstream media. (Rural News was the only media organisation to attend the recent Ahuwhenua Awards field day at Te Uranga, near

Taumarunui.) “I think that’s partly because media are not prepared to pick up and do the research and analysis to see what Maori are doing. I also think Maori are happy to fly below the radar in respect of their achievements,” he adds. Field days will be held at Te Awahohono Forest Trust – Tarawera Station on the Napier Taupo highway, and the Te Hape B Trust – Te Hape Station, near Benneydale, before the winner is announced at gala function in Hawkes Bay in June. All of the finalists receive prizes to the value of $15,000, with the winner getting an extra $40,000 in prizes. @rural_news facebook.com/ruralnews

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Rural News // May 7, 2013

14 news

Fonterra on the hunt for global brands boss su d es h k i ssu n sudeshk@ruralnews.co.nz

FONTERRA IS looking for a new head for its revamped global brands business. Mark Wilson left the co-op last week citing

family health matters. Before he left, the co-op announced a new leadership team for its new Asia Pacific Middle East Africa (APMEA) business unit. It has also appointed a new managing director for Australia, where it is

facing a double whammy – increased competition for farmgate milk and falling profit margins in consumer brands due to supermarkets promoting private labels. Fonterra chief executive Theo Spierings hopes

Swales will use her business acumen to turn the business around. “Judith has considerable experience in business turnarounds across a number of industry sectors, with a great understanding of consumer, customer and

Fonterra is hoping for a turnaround in its Australian business performance.

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operations which will be critical in our Australian business.” Swales joins Fonterra after leading Heinz in Australasia and before that the Goodyear Dunlop business in Australia. In Fonterra’s halfyear results announced in March, the APMEA business unit contributed $271 million to normalised earnings before tax compared to $293m the year before. Consumer and food service earnings rose in Asia and Middle East. Fonterra’s Chilean subsidiary Soprole also performed strongly. But Australia’s normalised earnings dropped 32%. Spierings praised Wilson’s important contribution to Fonterra, leading sustained growth in the cooperative’s Asian and Middle East consumer businesses over the past five years.  He says Wilson had overseen the creation of the new APMEA business unit. “It has been a big undertaking and with all the key management now in place for APMEA, Mark has decided due to some family health matters that

the time is right for him to leave the cooperative.” The co-op has also appointed Juan Carlos Pestana as managing director ASEAN. He is currently head of Fonterra’s Latin American joint venture with Nestle. The new managing director ISMEA (Indian sub-continent, Middle East-Africa) is Alan Fitzsimmons, general manager of Fonterra’s Indo-China business. The managing director of Fonterra Brands New Zealand, Peter McClure, is retained in the role. The chief financial officer for Fonterra’s ASEAN— Middle East North Africa business, Malcolm Smith, becomes the new director commercial. Chris Augustijns is the new director marketing. Hamilton-based optimisation director for Fonterra, Joe Coote, becomes the new director operations and supply chain. The new director people, culture and services is Garry Mudford, who headed IT upgrades in the Australia-New Zealand business unit of Fonterra.

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RURAL WOMEN New Zealand will run a water seminar, open to all, ahead of its annual conference, Christchurch May 23-26. “The focus will be on drought preparedness, water storage and irrigation systems, which are not only topical, but also tie in with the UN International Year of Water Cooperation 2013,” says national president Liz Evans. The seminar starts 9am with discussion led by panelists David Caygill of Environment Canterbury, Green MP Eugenie Sage and Federated Farmers’ spokesperson on water and the environment, Ian McKenzie. The conference programme proper begins after lunch with a bus tour of the city’s quake damage and recovery, then an official opening and evening event featuring guest speaker Peri Drysdale and presentation of the Enterprising Rural Women Awards. www.ruralwomen.org


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Rural News // May 7, 2013

16 news

Latin attraction for NZ PA M TI PA pamelat@ruralnews.co.nz

Minister for Primary Industries Nathan Guy.

partner and collaborate on joint ventures”. Eighteen businesses travelled with the trade delegation including agri-seeds, meat and electronic tag companies and companies already working in Latin American. Taking the companies sent the message that New Zealand was willing to partner with them as was already happening with Chile. Guy says Brazil had amazing cli-

matic conditions and 200 million people with the same number of cattle. “But three quarters of their dairy cattle are hand-milked,” he said. “So the opportunities for New Zealand companies to get milking machine expertise in there and to provide Kiwi know-how and ingenuity, is huge.” But in respect of ease of doing business and lack of corruption,

while various worldwide studies rank New Zealand between one and four, Brazil is ranked somewhere in the 350s. “So they’ve got a massive tariff, a massive taxation system and corruption issues.” But he said there are Kiwis there growing dry matter at three times the rate of the average Morrinsville dairy farm. @rural_news

WHEN BIG overseas companies come to New Zealand now they are not interested in looking at processing plants – they want to know what’s happening behind the farmgate, says Guy. He was answering a question from the floor on the MPI target of doubling agricultural exports from $30 billion to $60 billion. “How are we going to do that sustainably – convince our fellow Kiwis, without having something like a licence to farm?” Guy was asked. Guy replied, “Most farmers are environmentalists, most know they need to look after the natural resources because that’s how they produce their income and want to return their farms to kids and grandchildren in the future. “We have proven in the last couple of decades we have a world class food processing safety system – the best in the world,” Guy says. “You could within reason eat your dinner off the floor of our processing plants – they are that hygienic. “But the market has moved. The big companies we do deals with – whether it’s Marks and Spencer or other companies – when they come to New Zealand they are not interested in looking at the processing plants, they are more interested in looking at what’s inside the farm gate. “They want to know, what’s your animal health system? what is your animal welfare system? what about your transportation? That’s why NAIT is going to be an important part of our gate to plate.”

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NEW ZEALAND has been focused on Asia for trade growth, but Latin America may offer plenty of opportunity, says Minister for Primary Industry Nathan Guy. The Ministry for Primary Industries (MPI) has set the ambitious target of doubling primary exports, from $30 billion to $60 billion, by 2025. New trade opportunities will be the key to growth, Guy added, including China but the Trans Pacific Partnership was also potentially worth $2 billion to New Zealand. Guy said his recent visit to Latin America showed him there was fantastic opportunity. Mexico had signed up to TPP negotiations and the Colombian president stood up at one meeting and said he would love to have a free trade agreement with New Zealand. He says the opportunity in South American was “not so much in getting more dairy into these markets but an opportunity to

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Rural News // may 7, 2013

world 17

Debt-riddled Aussie farmers given government-backed lifeline debt and the NFF’s advoDEBT LADEN Australian farmers have been thrown cacy for the finalisation a lifeline by the Australian of the national drought reform policy. But he Government. questioned whether the A farm finance package announced last month Government was going far enough on drought, and grants NSW, Queensland, Tasmania, South Australia, criticised the piecemeal Western Australia and Vic- approach to policy.  “Today, we are pleased toria $A60 million each to to see that the Governhelp farmers restructure their debt. Under the two- ment is responding to our calls, and to the calls of year scheme farmers may farmers who are feeling borrow up to $A650,000. the effects of $A60 billion The package includes of rural debt and a return hiring 16 extra financial to very dry conditions in counsellors to work with some parts of the country. agricultural businesses. A “While today’s tax relief deposit scheme announcement is a step to help farmers manage forward, fluctusome ations questions in their remain income unanwill also be swered overhauled on the from July national 2014, drought including reform raising the Farmers across Australia are feeling policy off-farm the pinch from a strong dollar. and the income uncertain threshoperating environment old from $A65,000 to faced by farmers,” says $A100,000. Finlay. The assistance packFarmers welcome the age follows a rural finance concessional loans but roundtable held in Octowarn the devil could be in ber last year, convened by the detail. Treasurer Wayne Swan, “The Government which heard how farmers has spoken of the need to were being hit by the high invest in productivity and Australian dollar. They prepare for the future – are also facing rising production costs and a risk of exactly what we have been saying the Government returning to drought. Australian farmers have needs to do in reprioritising Australian agriculture. cautiously welcomed the We are very pleased to see news. National Farmers’ Fed- that they are listening, and have acknowledged the eration (NFF) vice president Brent Finlay says it is scale of the task at hand, and we look forward to good to see the Government listening to farmers’ seeing the finer detail on these loans.” calls for action on rural

Farmers like the idea of more financial counsellors. They also welcome the increase in off-farm income allowance under Farm Management Deposits (FMD) from $A65,000 to $A100,000; and help to

streamline the FMD process to reduce time and cost. “Yet while these changes to FMDs are good news for farm businesses operating in a partnership structure or as a sole

trader, the same flexibility has not been afforded to the growing number of family farms that operate under company structures – meaning inequity among farmers,” says Finlay. “And we are yet to see

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Rural News // May 7, 2013

beef market trends

Market snapshot Meat c/kgCWT

North Island

South Island

Change c/kg

Change c/kg

Last Week

Last Week

BEEF PRICES

LAMB PRICES Change

c/kgCWT NI

lamb market trends

+3

P2 Steer - 300kg

Last Week

2 Wks Ago

Last Year

Change

c/kgCWT

NI Lamb

+5

YM - 13.5kg

Last Week

2 Wks Ago

Last Year

4.10

4.07

3.98

4.43

4.38

5.53

M2 Bull - 300kg

+3

4.08

4.05

4.10

PM - 16.0kg

+5

4.45

4.40

5.55

P2 Cow - 230kg

n/c

3.20

3.20

3.15

PX - 19.0kg

+5

4.47

4.42

5.57

PH - 22.0kg

+5

4.48

4.43

5.58

Lamb - PM 16.0kg

+5

4.45

n/c

4.38

Steer - P2 300kg

+3

4.10

n/c

3.75

M Cow - 200kg

n/c

3.05

3.05

3.03

Bull - M2 300kg

+3

4.08

n/c

3.68

Local Trade - 230kg

+5

4.12

4.07

4.05

Mutton

MX1 - 21kg

+2

2.67

2.65

3.20

Venison - AP 60kg

n/c

6.25

n/c

6.45

P2 Steer - 300kg

n/c

3.75

3.75

3.80

SI Lamb

YM - 13.5kg

n/c

4.38

4.38

5.51

M2 Bull - 300kg

n/c

3.68

3.68

3.80

PM - 16.0kg

n/c

4.38

4.38

5.53

P2 Cow - 230kg

n/c

2.70

2.70

3.00

PX - 19.0kg

n/c

4.38

4.38

5.55

M Cow - 200kg

n/c

2.55

2.55

2.90

PH - 22.0kg

n/c

4.38

4.38

5.56

Local Trade - 230kg

+2

3.85

3.83

3.90

n/c

2.48

2.48

3.10

SI

North Island 16.0kg M Lamb Price $8.5

5yr Ave Last Year This Year

$7.5 $6.5

NZ Slaughter Change

3 Wks Ago

Cattle NI

+14%

40.1

35.2

42.5

47.6

Cattle SI

+5%

25.2

23.9

19.4

18.7

Cattle NZ

+10%

65.3

59.1

61.9

Bull NI

+31%

5.1

3.9

Bull SI

-23%

1.7

Str & Hfr NI

+13%

Str & Hfr SI

0%

1000s

$4.5 $3.5 Feb

Mar

Apr

May

Jun

Jul

South Island 16.0kg M Lamb Price $8.5

5yr Ave Last Year This Year

$7.5

2Wks Ago

3 Wks Ago

Lamb NI

+9%

174

160

243

244

Lamb SI

+1%

456

452

433

400

66.3

Lamb NZ

+3%

630

612

676

644

6.8

6.6

Mutton NZ

-20%

72

90

45

66

2.2

1.8

2.0

12.2

10.8

14.6

14.7

7.1

7.1

5.2

6.6

Cows NI

+11%

22.8

20.5

21.1

26.3

$5.5

Cows SI

+12%

16.4

14.6

12.4

10.1

NZ Weekly Beef Kill

80

$3.5 Feb

Mar

Apr

May

Jun

40

NZ Weekly Lamb Kill

900 750 600 450 300 150 0

Last Year This Year

Feb

This Year

$4.5

Feb

Mar

Apr

May

Jun

5yr Ave Last Year This Year

$3.5 $3.0 Feb

Mar

Apr

May

Jun

Jul

South Island 300kg Steer Price

$4.5

Change

Last Week

2 Wks Ago

May

Jun

Last Week

2 Wks Ago

Last Year 5yr Ave

n/c

1.51

1.51

1.70

1.80

NZ$/kg

-1

6.04

6.05

7.45

8.88

Demand Indicator - UK Leg Price Last Year 5yr Ave

95CL US$/lb

-5

2.15

2.20

2.20

1.79

NZ$/kg

-19

5.57

5.76

5.96

5.33

$2.30

Apr

UK Leg £/lb

Export Market Demand

$4.0

Mar

Change

0 Jan

Last Year 5yr Ave

Export Market Demand

Last Year

20

North Island 300kg Bull Price

$5.0

1000s

Jan

60

Jul

Estimated Weekly Kill Change

Last Year 5yr Ave

$6.5

$4.5

MX1 - 21kg

NZ Slaughter

Estimated Weekly Kill 2Wks Ago

$5.5

Mutton

Demand Indicator - US 95CL Beef

£2.50

Last Year This Year

£2.00 £1.50 £1.00 Feb

Last Year

Mar

Apr

May

Jun

Jul

This Year

$4.0

$2.10 $3.5

Procurement Indicator Change

2Wks Ago

3 Wks Ago

% Returned NI

+0%

74.8%

74.4%

76.1%

59.8%

% Returned SI

+0%

72.8%

72.7%

75.8%

56.8%

5yr Ave Last Year This Year

$1.90 Feb

Mar

Apr

May

Jun

Jul

$3.0 Feb

Mar

Apr

May

Jun

Jul

Procurement Indicator

5yr Ave Last Year This Year

$8.0 $7.5

Change

3 Wks Ago

% Returned NI

+3%

72.7%

70.0%

68.78%

69.1%

80%

% Returned SI

+3%

66.1%

63.4%

63.7%

63.8%

70%

80%

$7.0 $6.5

Procurement Indicator - North I. 100%

2Wks Ago

North Island 60kg Stag Price

$8.5

Last Year 5yr Ave

Last Year 5yr Ave

Procurement Indicator - North I.

90%

Last Year

60%

This Year

50% Feb

Mar

Apr

May

Jun

Jul

70% Last Year

$6.0 Feb

Mar

Apr

May

Jun

Jul

South Island 60kg Stag Price

$8.5

60% Feb

This Year

Apr

Jun

5yr Ave

$8.0

Last Year

80%

This Year

$7.5

Procurement Indicator - South I. Last Year This Year

$7.0

Procurement Indicator - South I. 105% 95% 85% 75% 65% 55% 45% Feb

Last Year This Year

Mar

Apr

May

Jun

Jul

70% $6.5

Venison Prices

$6.0 Feb

Mar

Apr

May

Jun

Jul

60% Feb

Apr

Change

Jun

Beef & venison prices are reported as gross (before normal levies & charges are deducted). Lamb & mutton prices are reported nett (after levies & charges are deducted). Note: Freight is paid in the North Island but not by all companies in the South Island.

Last Week

2 Wks Ago

Last Year 5yr Ave

NI Stag - 60kg

n/c

6.25

6.25

7.15

7.21

SI Stag - 60kg

n/c

6.45

6.45

7.20

7.49

How much can a Youn

Find out at the ANZ Young Farmer Contest Grand Final practical day on coin donation. Plus be part of the Grand Final Show on Saturday, 18 For more information on the Grand Final and how to get ticke ANZ Bank New Zealand Limited 04/13

14749


Rural News // may 7, 2013

news BEEF

price watch WOOL PRICE WATCH Change

24-Apr

18-Apr

Coarse Xbred Indic.

+6

3.89

3.83

4.58

Fine Xbred Indicator

+8

4.73

4.65

5.32

Lamb Indicator

-14

4.91

5.05

5.10

-

-

-

-

Farmgate price gap between islands grows

Indicators in NZ$

It is a tale of two islands at the moment in regards to the beef prices. Kill rates are under normal levels in the North Island and this is resulting in more competition for supply and further increases in farmgate prices – particularly on lines of decent numbers. In contrast, South Island kill rates remain above average with cull dairy cows continuing to dominate the kill. The lack of procurement competition is holding farmgate prices back. There is currently a 3540c/kg differential between North and South Island pricing for steer and bull as a result.

US imported beef market takes a step back

400

The US imported beef market has taken a step back in recent weeks as supply and demand issues continue to impact on returns. On the supply side of the equation, there has been more than expected beef available in the US as a result of high US cow slaughter rates and strong import volumes with the latest USDA cold store report showing US beef stocks are up 2% on last year. And on the demand side, retail beef demand has been lacklustre on the back of record high retail beef prices and increased availability of cheaper competitive meats as reduced US pork and chicken exports have seen more of those products available on the domestic market. Now traders are seeing increased supplies of Aussie product on the back of large kills in the Eastern States and these supplies are tipping the balance with a significant weakening of US imported prices noted in the market.

LAMB

Mid Micron Indic.

Wool Indicator Trends

600

CXI

550

Butter Skim Milk Powder Whole Milk Powder Cheddar

Last 2 Wks

Prev. 2 Wks

Last Year

+226

5467

5241

4056

-300

6143

6443

3564

+213

6584

6370

3902

+312

5408

5096

4486

Change

Dairy Prices Trends

7,000

LI

450

SMP But.

WMP Ched.

5,000 4,000

350 300 Apr

Jun

Aug

Oct

Dec

3,000 Apr

Feb

Coarse Xbred Indicator

600

Jun

500

Aug

Oct

Dec

Feb

Whole Milk Powder Price (NZ$)

7,500 Last Year This Year

Last Year

6,500

This Year

5,500 400

4,500

300 Feb

3,500 Mar

Apr

May

Jun

Jul

Feb

Overseas Price Indicators Indicators in US$/kg Coarse Xbred Indicator Lamb Indicator

24-Apr

Last Year

18-Apr

+5

3.28

3.23

3.74

+7

3.99

3.92

4.34

-12

4.14

4.26

4.17

-

-

-

-

Indicators in US$/T Butter Skim Milk Powder Whole Milk Powder Cheddar

Wool Indicator in US$

550

CXI

500

Mar

Apr

May

Jun

Jul

Overseas Price Indicators

Change

Fine Xbred Indicator Mid Micron Indicator

Change

Last 2 Wks

Prev. 2 Wks

Last Year

+125

4650

4525

3300

-338

5225

5563

2900

+100

5600

5500

3175

+200

4600

4400

3650

Dairy Prices in US$/Tonne

FXI

LI

SMP .But

5,500

450

WMP .Ched

4,500

400 350

3,500

300 250 Apr

Jun

Aug

Oct

Dec

2,500 Apr

Feb

Coarse Xbred Indictor in US$ 550

Store lamb prices heat up in North Island

500

North Island store lamb prices have surged over the $2/kg mark in the last 2 weeks and are now sitting above South Island prices for the first time since spring. Despite the large number of lambs hitting the market in the north, demand has lifted to a new level. Widespread autumn rains have seen an increase in availability of lamb feed with crops and new grass paddocks kicking to gear. There is also an expectation of a lack of number of store lambs up north with so many lambs heading across the strait during the summer. Lifting schedules are also providing more buyer confidence. Paddock prices in the North Island were $2.00/kg last week for 3035kg males and $1.90/kg for ewe lambs. Paddock prices in the South Island are 5-10c/kg below these levels.

400

Around 15,000 bales were sold at South Island auction on April 24. The Chinese buyers dominated the fine wool section with relatively low supplies helping to underpin this market. Fine crossbred fleece appreciated by 1% and the shears jumped by between 3 and 7% to fully recover from the softer North Island sale the precious week. In contrast however the lambs wool section made up 20% of the total offering and the coarser types did not find favour with prices falling by up to 3.5%.

Indicators in NZ$/T

6,000

There continues to be a big variation in meat company prices for lambs in the North Island. Export lambs were priced between $4.50$4.70/kg (gross incl. presentation premiums etc). Local trade prices were $4.60-$4.80/kg and contracts were operating around $4.85-4.90/kg. On average lamb prices continue to move higher in the North Island as kill numbers remain 25-30% lower than the same time last year and the 5yr average. Numbers out front are expected to dip and prices should keep lifting, albeit at a measured pace (as companies manage their capacity). It’s a different picture in the South Island however with the lamb kill currently running around 15% higher than typical for this time of year. As a result farmgate pricing for lamb has been fairly stagnant at around $4.40/kg gross.

Fine crossbred wool up, lambs wool down

FXI

500

Lamb prices lift in north, stagnant in south

WOOL

DAIRY PRICE WATCH Last Year

Last Year This Year

450 350 300 250 Feb

Mar

Apr

May

Jun

Jul

Last Week 2 Wks Ago 4 Wks Ago Last Year

Feb

0.90

0.837

0.814

Euro

0.654

0.645

0.655

0.616

UK pound

0.551

0.551

0.553

0.503

0.75

Aus dollar

0.826

0.817

0.801

0.784

Japan yen

84.53

82.71

79.02

66.07

0.70 Feb

This Year

0.62 0.58

Feb

Mar

Apr

May

Jun

ng Farmer handle?

n Friday, 17 May at Kumeu Showgrounds, Auckland. Entry is a gold 8 May at SKYCITY, Auckland or watch it on TVNZ OnDemand. ets to the Grand Final Show visit anz.co.nz/youngfarmer

Jul

Mar

Apr

May

Jun

US Dollar

Feb

Jul

Last Year

0.85

0.842

Last Year

Dec

This Year

0.851

0.66

Oct

Last Year

US dollar

Euro

Aug

Whole Milk Powder Price in US$/T

6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500

CURRENCY WATCH vs. NZ Dollar

Jun

This Year

0.80

0.58 0.56 0.54 0.52 0.50 0.48 0.46 Feb

Mar

Apr

May

Jun

Jul

UK Pound Last Year This Year

Mar

Apr

May

Jun

Jul


Rural News // May 7, 2013

20 agribusiness NZ Dairy Market Product

Auction 6 mths 16/04/2013 prior

1 year prior

NZD/Tonne

Whole Milk Powder(WMP)

6,135

4,002

3,331

Skim Milk Powder(SMP)

5,565

Butter Milk Powder(BMP)

4,658

3,847

2,873

CHEESE

5,560

3,498

3,436

3,906

3,358

francis wolfgram Finance Matters

DAIRY COMMODITY prices have rocketed over the past year but when looking at the entire year from April 2012 to April 2013 a good proportion of rise has come over the last six months and particularly Change the first four months of 2013. The Global Dairy Trade trade weighted year on year index (GDT- TWI) has an average gain of 56.5% since April 2012 but a whopping 51.3% came in the six months from October 2012 representing a gain of only 5.2% from April 2012 to October 2012. The trend is similar for all the major product groups we cover with whole 54.3% milk powder, skim milk powder, buttermilk powder and cheese all showing weak gains in the first six months from April 2012. In fact in the first three months from April 2012 to July 2012 there were steady 60.3% price decreases. Supply concerns from the drought earlier this year clearly had an impact on prices. This has had a balancing effect on the 61.7% impact of the drought overall as dairy production makes up 40% of our agricultural GDP; the dairy commodity price rises will even out our bottom line GDP, but a stronger bottom line GDP will come as 61.8% little comfort to drought effected non-dairy farmers.

new zealand agri shares NZX Code

Company

Prices 30/04/13

Divdend Yield

LIC

Livestock Improvement Corporation Limited (NS)

$5.90

9.22%

SAN

Sanford Limited

$4.60

7.14%

SKL

Skellerup Holdings

$1.48

7.56%

HNZ

Heartland New Zealand

$0.78

6.23%

HBY

Hellaby Holdings

$2.96

6.08%

SEK

Seeka Kiwifruit Industries Limited

$1.69

5.07%

DGL

Delegat’s Group Limited

$3.80

3.38%

FSF

Fonterra Units

$7.81

2.04%

Livestock Improvement announced the appointment of Wayne McNee as chief executive. Wayne McNee is currently-director general of the Ministry for Primary Industries and is to take over from acting chief executive David Hema on July 29, 2013. Sanford Limited has announced they will be releasing their half yearly results on Friday 24th May. Hellaby Holding share price still continues to drift downward to $2.96 from $3.10 two weeks ago suggesting the market is still digesting its recent asset purchases. Delegat’s Group Limited has entered into an agreement for sale and purchase to acquire the assets of Australian Winemaker Barossa Valley Estate Ltd for $A24.7million payable in cash. Managing director Jim Delegat stated “We look forward to the opportunity of building one of the world’s great super premium Shiraz brands from the iconic Barossa region.” Fonterra have confirmed that a supply offer enabling farmer shareholders to sell the economic rights of some of their shares will open on May 2 and close at 5pm on May 23. Farmer shareholders will have the opportunity to offer to sell the economic rights of up to 25% of their minimum required shares ‘wet shares’ to the Fonterra Shareholders’ Fund. The price farmers will get for their economic rights – the ‘final price’ – will be announced on May 16.

US Agricultural Commodity Prices Commodity

Units

Price This Price Last Change Issue Issue

Live Cattle

USD/Kg

Feeder Cattle

USD/Kg

$3.297

$3.107

$0.190

Lean Hogs

USD/Kg

$2.028

$1.982

$0.046

Greasy Wool

USD/Kg

$10.750

$11.300

-$0.550

Corn

USD/ Bushel

$6.668

$6.315

$0.353

Wheat

USD/ Bushel

$7.188

$7.100

$0.088

$2.695

$2.662

US agricultural commodities have climbed across the board over the last two weeks. Cattle prices rose on signs of improving demand for US beef, wholesale beef rallied on the 30th of April to a six-week high and is heading for the biggest monthly gain since October 2012, US Department of Agriculture data shows. Demand prospects are driven by the possibility of another hot summer and the upcoming US holiday season which will boost meat demand for outdoor barbecueing. Corn prices have been on a roll after a government report showed cold, wet weather earlier this year delayed planting across the US. Additional supply concerns show farmers have sowed only 5% of corn crops as of April 28 2013; this drastically trails the five-year average pace of 31%. Wheat futures capped a 6.3% gain in April, most of which (5.6%) was over the last few days of the month. This was on concern that unusually low temperatures will damage wheat already under stress from cold, dry weather since farmers planted seeds last October. Reports show production of hard, red winter wheat – the variety used to make bread and flour – may fall 24% to 766 million bushels from 1.004 billion a year earlier, drastically impacting supply. This table and information is in no way a recommendation to buy or sell any share but a list of New Zealand agrishares that have the highest dividends. Please consult your financial advisor before entering into any sharemarket investment.

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Rural News // may 7, 2013

agribusiness 21

Opportunities for cheap money pam t i pa pamelat@ruralnews.co.nz

THERE’S PLENTY of money out in the global economy right now looking for a “safe” home, Westpac economist Nathan Penny says. “Money is cheap,” he says. “World banks around the world have dropped interest rates, some of them down to zero. “There is a lot of money out in the global economy sloshing around looking for a home. [Investors] are looking for somewhere to put that money. They want it to grow, they want somewhere safe. They are looking at New Zealand because we are growing. We are tapped into the Chinese and other markets where demand for food is growing.” Penny was outlining opportunities in the agricultural sector at a Westpac organised “Farming in the Future – opportunities and challenges” session held at Morrinsville. Attended by the Minister for Primary Industries, Nathan Guy, it was the first of a series of such events to be held around the country to support farmers in drought recovery. Penny says the excess of money in the global economy is a big opportunity but the key is to find the right investors. “We haven’t dealt with many of these investors before, we don’t know them. We need to get to know them and this is a challenge. We want people we can invest with long term,” he says.

“Another spin-off from this flow of money around the world is that the currency is high,” he says. “It is making capital equipment such as machinery really cheap. The yen is down about 30% this year against the dollar – we get a lot of machinery and other technology from Japan so there’s an opportunity to take advantage of that.” On the challenge side, however, he says it is making us more expensive. “We are a somewhat low cost producer – over time it will make us a higher cost producer. We need to look at what that means to us – we need to look at the markets. We need to be moving up to more lucrative markets – places like South America will eventually beat us on cost. “Food safety is going to become even more important. We are a world leader in food safety and we can take advantage of that and fend off our competitors. But we can’t take our eye of the ball – part of the premium we get for our product is this, so we need to be vigilant.” Penny says another current trend is that carbon is cheaper – making it more economic to cut down trees. “This is partly to do with the European recession. So there’s been a pick-up in deforestation and log exports, and it is one lower cost to converting forest to pasture.” Penny says the drought had been massive and the costs from lost production had been very high.

Westpac estimated the total costs to the economy from lost production at $2 billion. However the increased payout from Fonterra may put back about $1 billion. He estimated the milk payout would be in the ‘sixes’ this season and next, and that Fonterra would be revising it upwards at its next

NO

vider of dairy to China to fend off competitive response. Latin America has big potential to grow its supply of dairy. The opportunities were still huge with China’s growth at 8% this year and an estimated 7% next year. China will account for a third of world growth until about 2020.

Nathan Penny

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NEW ZEALAND winemaker Delegat’s Group has spread its wings to Australia. It has bought Barossa Valley Estate in South Australia for A$25 million, to be settled in June. Barossa, a grape grower-owned co-op, went into receivership in January. Australian media report that Woolworths had also bid for the winemaker through its subsidiary Cellarmasters. Delegat’s has bought Barossa’s modern 5000 tonne winery and a 41ha vineyard on 80ha. The deal includes Barossa Valley Estate and E&E brands and grape grower contracts. Delegat’s managing director Jim Delegat describes the acquisition as “an ideal fit with the group’s portfolio of high quality wine assets. We look forward to the opportunity of building one of the world’s great shiraz brands from the iconic Barossa region.” Barossa Valley is recognised globally for producing world-class shiraz.

announcement. Looking beyond the drought, Penny says New Zealand is well placed. Chinese milk powder consumption had grown 10% a year in the last five years and it had all come from New Zealand. The challenge is to cement our place as number one pro-

*CONDITIONS Interest rates current as at 12th March 2013 and subject to change without notice. Fees and charges are payable. Conditions apply. Finance available through John Deere Financial Ltd to approved applicants only. Image is a sample only and accessories may not be available in NZ models. Offer valid 1st April 2013 to 30th June 2013. Does not apply to existing purchase contracts.


Rural News // May 7, 2013

22 opinion editorial

edna

What’s in a meatwave? A ‘MEATWAVE’ is sweeping the country in the form of a series of well-attended meetings where farmers have voiced their frustration at the state of the meat industry. Interesting, you might say, since many of them are shareholders in the two farmer cooperatives in the spotlight This ‘meatwave’ is fuelled by a group of farmers calling themselves the Meat Industry Excellence group or MIE. Their campaign is based on the word change – a familiar politically charged word. In their view, the meat industry ‘needs to change’ and it probably does have to. Ideas on what should be done have been floated for years. However, as always the devil will be in the detail. Just how the ‘yes’ votes at meetings up and down the country translates into serious support and agreement at crunch time remains to be seen. There is also the question about the status of MIE and what makes a group of unhappy farmers especially qualified to lead any change. But give them their due: they are trying and who knows they may succeed where others have failed. However, it could be argued the ‘meatwave’ is a manifestation of a wider and bigger problem in the overall the primary sector – a lack of high level leadership. The primary sector is a bit like a company with about a dozen good second-tier managers and no chief executive. No one is standing up and staking a claim to lead the primary sector from the front. Everyone is too busy in their own little silos – doing in most cases a very good job. Someone needs to step up and take a high-level overview, then grab the sector by the scruff of the neck and shake some unity, common sense and above all dynamic leadership into it. Until that happens, meatwaves, woolwaves, milkwaves, etc, will come and go and nothing will change.

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“Trouble is, because of the drought, the pond was dry when I built the maimai!”

the hound

Want to share your opinion or gossip with the Hound? Send your emails to: hound@ruralnews.co.nz

Dumb call

Own goal?

World leading?

Inappropriate

ACCORDING TO a mate of the Hound, God invented astrologers to try to make economists look good. And after recent comments by Westpac economist Nathan Penny, that the cost to New Zealand’s economy of the drought could be close to zero thanks to the sharp gains in world dairy prices, your canine crusader would have to agree with his mate’s sentiments. It was all nicely summed up in the headline of a media release issued by Federated Farmers adverse events spokesperson and West Coast provincial president Katie Milne, following Penny’s reported remarks: ‘Rainfall missing in some areas – like economists’ logic’.

THIS OLD mutt has a grudging respect for Silver Fern Farms (SFF) boss Keith Cooper for telling it like it is – even though he comes across as grumpy and angry at the world. A recent commentary by Cooper on proposed meat sector reforms made some valid points: calling farmers out for their lack of loyalty in not taking long-term contracts, debunking the myth that the Fonterra model is appropriate for the meat sector, and asking for figures on how the 80% would actually work. Cooper also reminded farmers that many of the co-ops they had formed had been sold out by them!

YOUR OLD mate was intrigued by all the fuss made by the media recently when Parliament passed the Marriage Equality Bill or what is commonly known as the gay marriage bill. The Hound is unsure just how passing this new law will create jobs or grow our economy. However, apparently – according to proponents of this new law – it now makes New Zealand a really go-ahead place to live. This is despite the fact we are the 13th country in the world to make gay marriage legal, so not actually a worldfirst, as some in the media would lead you to believe.

A MATE of the Hound attended his local ANZAC Day commemoration and was delighted by the big turnout of people young and old. However, the ceremony was put off stride when the MC announced that a six-year-old boy would perform a special song – Two Little Boys by Rolf Harris. Apparently none of the local organisers had heard the news that Harris, is being questioned by UK police over allegations of underage sex abuse. The Hound’s informant said there was much shuffling of feet and distinct discomfort in the crowd as they endured the youngster’s screeched rendition of the WWI-set ballad.

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Drought hits green economy YOUR OLD mate understands the drought has done the Gisborne and Hawke’s Bay regions a favour by greatly reducing the size and quality of the annual cannabis crop. This after a police marijuana swoop late February to mid March, using a fixed-wing aircraft and a helicopter. Said detective senior sergeant Mike Foster (eastern district organised crime head), “Many plants we found were poor quality because of the drought. The drought did the community a favour this year.”

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ABC audited circulation 80,767 as at 31.12.2012

Rural News is published by Rural News Group Ltd. All editorial copy and photographs are subject to copyright and may not be reproduced without prior written permission of the publisher. Opinions or comments expressed within this publication are not necessarily those of staff, management or directors of Rural News Group Ltd.


Rural News // may 7, 2013

opinion 23

The threat of house brands grows HOUSE BRANDS are going viral: a catchy heading, but a real-life threat to those on the land. House brands are cheaper and in the supermarket wars it isn’t the New Zealand farmer that is winning: house brands are more than twice as likely to be made from imported produce as market-leading brands. A Campbell Live investigation, last month, urged shoppers to ‘Buy New Zealand’ wherever possible, but

‘possible’ depends on the concept of food price. New Zealand has very high animal welfare, human employment and environmental standards, and costs of production are therefore higher than in some other countries. When supermarkets are trying to achieve market edge for their products, they source the cheapest production system. This could reflect climate and ease of growing, or it could reflect standards to do with animal welfare, human working conditions and/ or environmental impact. Supermarkets also play suppliers off against each other. This is well known in respect of UK supermarkets and the New Zealand meat companies, but also occurs within New Zealand. What the supermarkets say is that house brand products can be sourced in bulk, manufacturing is streamlined, R&D can achieve economies of scale, and marketing is easy – just one ‘brand’. But social media articles (see Michael Bracka, managing director of Freedom Foods, on Facebook) have indicated that supermarkets allow companies to undertake the expensive

areas of product development, market awareness and initial market penetration with supply chain logistics. When the product is achieving traction, they will reduce distribution and sales while they launch their slightly cheaper ‘house’ brand. The indication is that the supermarkets don’t have to bother about R&D as they let others do it for them. Last year Coles supermarket in

House brands pose a major risk to the likes of Fonterra’s Anchor brand.

Australia stopped selling Mainland cheese. The reason given was their philosophy that 90% of food should be Australian. Nobody appears to have challenged the calculation – and though such things as chocolate, cocoa, coffee, rice are mostly (or entirely) not grown in Australia, the minute they are in a house brand they apparently count. Fonterra refused to repackage Mainland into a house brand. Fonterra has indicated that the 21 brands currently in Australia will be reduced to four or five, and its 65 global brands will be trimmed. The cost of this to the Fonterra shareholders is considerable. Last year earnings in Australia before interest and tax (excluding the Western Australia dairy business) were down 15.9%. This year the half year (to January) net profit released at the end of March indicated that earnings before interest and tax from the Australia-NZ foods business were down 32% to $NZ98 million.

The retail price war between Woolworths and Coles and increased competition from house brands has been blamed. House brands are unlikely to disappear – they are part of what Fonterra terms ‘the new reality’. Last year Consumer New Zealand reported that supermar-

ket house brands ‘slash grocery bills for the serious shopper’. Shoppers were sent out to buy 20 basic items from supermarkets in Auckland, Wellington and Christchurch, and saved 36%. As households feel financial pressure, shoppers are likely to take the cheap options despite

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the fact that they say they want fair trade, and to know that the animals, humans and the environment are being treated with high regard. This shows the extremely high risk farmers face when being asked to produce to these high standards not imposed in other countries. It also shows the

risk in putting money into creating new brands and products offshore rather than educating society and policy makers in New Zealand. It isn’t just the drought that is putting farmers out of business. • Jacqueline Rowarth is Professor of Agribusiness, The University of Waikato.

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Rural News // May 7, 2013

24 opinion Meat sector change needed THERE IS no doubt a structural change is needed in how the meat industry operates. It appears that ‘farmer buy in’ is a given – we are a key stakeholder. Other stakeholders are meat processors, unions and bankers. Which prompts the question where do the politicians, quasi-farmer organisations, suppliers, retailers and consumers connect to the supply chain? Unless commitment from all these other key stakeholders is sought and obtained at the outset, MIE will die a long and painful death – along with many farmers. Now is the time to ‘open the books’ so that key decisions and strategies can be generated in the short term. $250 million may be the cost to implement the changes necessary, but since $200 million is lost annually, this $250 m) appears to be a small amount in the overall context. What about the lost earnings on our investments, which probably should be another $250 million? In

effect our delay is ‘costing’ in excess of $1 million per week. Farmers are well-seasoned towards taking losses on the chin. Providing a sensible and well programmed strategy is promoted,

they will lead in supporting a process which improves the farmgate returns. We are being hoodwinked by meat Industry leaders who preach procurement issues, lack of loyalty, global financial crisis, seasonal markets and high cost structures. There is an on-going catch cry “be loyal and we can improve your returns”. We are loyal, but not to the point of stupidity. Why should we

accept mediocre returns from any party, when others are able to and are prepared to pay more? The retail returns being gained by many stakeholders is a key reason why we need to have a greater part in the process, so that the returns may be shared across the board. What about the high protected salaries, poor performance and lack of accountability across the board? We need to work together on this matter, identify and champion the profitable performers and value all participants in the meat chain including the consumers. Farmers have access to the funds now, to support MIE ‘moving forwards’. Let us be loyal to those stakeholders that are loyal to us…. It is critical that we establish from ‘day 1’ who supports this process, so that we can work positively and proactively towards improving our returns. Richard Kuegler Matira Limited

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Hound barking up the wrong tree on Joy CONGRATULATIONS TO Rural News on producing a topical rural paper that invariably contains valuable information not always appearing in other publications. However, the tone of this paper has taken a hit with the Hound’s attack (April 23) on Prof Mike Joy’s recent public statements on the dangers of cadmium in agriculture. The Hound accuses Joy of “trying to whip up public hysteria” and being “not happy unless he is putting the boot into farmers”. The Hound even suggested farmers might think against sending their kids to Massey Uni (where Joy works) “as it is so antifarming”. This attack on a messenger is flippant and unfortunate. Cadmium is widely recognised as a dangerous heavy metal

which accumulates in body tissue and can quickly cause irreversible organ damage, mainly affecting liver and kidney function. Industry internationally has moved years ago to minimise using cadmium and human exposure to it because of its disastrous impact on health. Product recalls where cadmium has been found in products are taken seriously All power to Joy for alerting us to a serious problem that has huge implications for our farmers as the push for food safety by consumers is matched by increasing scientific testing for these residues in the vegetables and meat that we produce. It is measurable and people understandably don’t want to eat it. Even those with short

memories will know the cost to some farmers whose soil DDT levels have prevented them from dairying. Cadmium is every bit as toxic, and we are saving ourselves a lot of future grief by confronting the use of fertilisers that contain the stuff, and dealing to the issues now. Nick Loughnan (abridged), Alexandra

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Rural News // may 7, 2013

opinion 25 Auckland unitary Plan adds to farming headaches

ag twits Rural News’ irreverent and hypothetical look at what’s happening in the farming world Top Bleats view all richardyoungmie: We’re making such great progress on meat sector reforms. At the MIE we’ve already consolidated our six principles down to a five-point plan. Amazing! #changeiscoming kcoopersilverfernfarms: I can’t comprehend why any meat company executive would want to cause the current low returns for sheep. But then again, I can’t comprehend much these days! #dazedandconfused johnmccarthy: The meat industry is a disgrace. I’m sick of all the talk-fests, strategies and the like. So my answer is to … hold another talkfest – but at Feilding this time! #sameoldsameold

AUCKLAND’S UNITARY Plan seems to have added more deleterious planning proposals to erode the bundle of rights which underpin the ownership principle of fee simple land tenure. The council, since the 1992 RMA, has zoned our farms by environmental land forms, cultural values, heritage values, natural values, ecological values. All these planning mechanisms

have attached rules, objectives and outcomes. Often farming in marginal land where full development has not been achieved has potentially a lot of consultancy and consent applications. In fact, landuse people all sail close to compliance misadventure. The business of growing a cow now seems to be well entangled in the politics of the perceived community good. The plethora of

overlapping rules affects us farmers daily. The council should foster and nurture production and productive practices instead of limiting one’s ability to work for the country. Now we have this outstanding natural landscape zone and natural character zone – zones based primarily on vegetation and lack of built form. These two new zones have a new set of criteria

and rules. It seems soon we will have to ring the council before we start the tractor or maybe apply to DOC for a concession to manage and propagate brown teal ducks. So all keen litigating farmers need to check the Auckland Council unitary plan and work out whether they can afford the added headache. Sean O’Shea Great Barrier Island

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gerryeckoffexmp: Hello? Hello? Does anybody in MIE group want me to help? I’m willing to chair meetings, set up the seating or even make the tea? Hello? Hello? #outinthecold johngreganexsheepfarmer: All this MIE business and talk of farmer-led reforms in the red meat sector reminds me just why I quit sheep farming and went dairying instead! #dejavualloveragain damienoconnormp: There is no doubt the lack of profitable returns meat producers are experiencing can be blamed on Fonterra’s decision to implement TAF. Well, I will anyway! #onetrickpony thatguynathan@damienoconnormp: So tell me do you actually want the Fonterra model implemented in the meat industry or are you happy with the status quo? #confusingmessage npennywestpac: I’ve been crunching the numbers in my ivory tower based in Auckland and have concluded that the recent drought will have no impact at all on the country’s economy! #delusional kmilnefedfarmers@npennywestpac: Just because it rains in central Auckland or Wellington, does not mean it has rained in Taihape, Taumanauri or Tinwald, you plonker! #whywehateeconomists

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Rural News // May 7, 2013

26 management

Integration lifts Maori farming This year’s Ahuwhenua Trophy competition for excellence in Maori farming is in its closing phase, with the three finalists hosting field days. Peter Burke reports from Te Uranga B2 Incorporation’s farm near Taumarunui, central North Island. A STRATEGY shift a few years ago to integrate the dairy and sheep and beef units with a flexible stocking policy provided a step change in performance for large-scale Maori-owned farm business, Te Uranga B2. Now, its sheep and beef unit is one of three finalists in this year’s Ahuwhenua Trophy for excellence in

Maori farming. “The farming philosophy is around maximising pasture production, optimising feed conversion and then maximising productivity,” says Te Uranga B2 chairman Traci Houpapa. “When we set that as a goal three or four years ago it changed our focus in terms of the overall cor-

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porate farming model that we have. We started to think how we could lift our performance in terms of strategic and business planning, and our financial management became tighter.” As well as running her own consultancy business, Houpapa is a director of Landcorp, Chairman of the Federation of Maori

Authorities (FOMA) and is a director of a number of other companies. Te Uranga B2 has 750 shareholders, a large number of whom live outside the district. Communication is an area where a lot of effort is directed to ensure people know what the organisation is doing and why. Houpapa says the Incorporation’s man-

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agement committee’s role is to grow the wealth and wellbeing of these shareholders. “To do this we also need to be aware that the decisions for the corporate body may not always be in line with the wants of our shareholder base, so there is that balancing act, but we have an intergenerational focus and we need to be thinking about what next in terms of our operation.” An annual dividend of up to 20% of net profit after tax is paid to shareholders. “We are also pretty clear that some of our shareholders want distribution in the form of grants and otherwise so we need to balance that out

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Lambing at 140% is the target.

Te Uranga B2 chair, Traci Houpapa.

with the reinvestment in property and growth and development of the overall farming systems.” As a management committee they are very focused on ensuring that they remain a successful and innovative operation, she adds. While Te Uranga B2 was established 103 years ago, it has been trading in its own right since 1958. It has two dairy farms, a forestry block and some outside investments, but the focus for the field day was the 1,123ha sheep and beef

unit which winters 12,100 stock units. The 5,500 ewe flock is Romney/Coopworth, and there are 140 Angus breeding cows plus steers, heifers and weaners. The land is a mixture of flat and hill country and while the dairy and sheep and beef operations are treated as separate business units for financial purposes they’re run as an integrated farming operation. There’s a strong environmental focus and three Balance Farm Environment Awards have been won for work mitigating erosion and providing environmental buffer zones. The finalists’ field days are the final phase of the Ahuwhenua Trophy judging process, a last opportunity of Te Uranga B2 to impress the judges. The initial judging panel was glowing in its praise of the Incorporation for its overall management, its commitment to Tikanga Maori and its strong leadership and governance. Houpapa says as a management committee they are very focused on ensuring that they remain a successful and innovative


Rural News // may 7, 2013

management 27

finalist’s game operation. Besides farming, the Incorporation has a strong community focus, financially supporting the local Ngakonui school and a number of other local sporting, social and cultural activities and initiatives, but the task of delivering the farm strategy set by the committee falls to farm manager Jack Valois. Valois is an experienced manager who’s worked for other Maori Incorporations and in the private sector. He’s been at Te Uranga 18 months and has set in place some changes designed to drive production, for example increasing lambing percentage from 120% to 140% by improving genetics, feeding, subdivision and water

Farm manager Jack Valois.

reticulation. “The drought challenge for me this year was mainly lack of water. We simply didn’t have water in some paddocks.” Improving stock water is part of a three-year plan. “We have the water lines in now and it’s just a matter of tapping into these and installing troughs. Water is a big thing especially when you

start fencing off the natural water ways which we are doing.” Facial eczema and worms, especially liver fluke, are other key management challenges, he says, though FE has been somewhat taken care of by selection of resistant stock. He’s also very focused on getting his ewes up to 65kg to ensure they are low maintenance in winter and produce a good lamb. Ewe lambs over 40kg will be mated to lamb as hoggets. Present calving percentage is around 88%, his target being 90%. Valois says he’s very much the traditional stockman, relying heavily on gut instinct to guide his decision making, but he is fan of NAIT. “I am probably the only farmer in New Zealand that likes NAIT. It’s a

good tool for me and helps me identify the best cattle I buy from which breeders. It allows me to do the weight gains, the predictions and stock counts. It’s all good for me. With NAIT you only get out of it what you put into it.” Another key person on the Te Uranga B2 farm is AgFirst consultant, Darren McNae. He’s been involved since 2006 and says the Incorporation has always had good long-term plans. Working for Te Uranga and other Maori incorporations is a pleasure because of their mantra of social, cultural and environmental goals as well as profit, he adds. Knowing the land will be held by one organisation forever changes the thinking and strategy. “But it must make money. If the business

Field day detail

is not making money it doesn’t allow them to generate the surpluses that allow them to do the environmentally focused work they are doing.” Te Uranga spends about $40,000 a year on environmental matters, working closely with Horizons Regional Council to manage erosion and prevent sediment and phosphorous getting into waterways. Riparian planting is extensive, notes McNae.

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As has come to be expected with Ahuwhenua finalists’ field days, the Te Uranga B2 day was an extremely well organized. The Procession to sacred site. Powhiri (welcome) took place at a sacred site adjacent to one of the dairy farms, a moving and special ceremony as the Ahuwhenua trophy was carried to the site by Ahuwhenua Trust chairman, Kingi Smiler. Then the 100 or so attendees climbed into a fleet of 4WDs for a farm tour of stock, environmental plantings and a picture of what has been done and what is planned for the farm. Back at the woolshed, the management committee and staff gave a series of presentations. It was a good old fashioned hard sell, the Maori way, and most professional.

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Rural News // May 7, 2013

28 management

Amber beacons mandatory from June FROM JUNE 1 it will be mandatory to have an amber beacon flashing on farm vehicles on the road. It’s one of a suite of changes to rules governing agricultural vehicles on roads which were signed

off by Assoicate Minister of Transport, Michael Woodhouse, earlier this month. Rural Contractors New Zealand executive director Roger Parton told Rural News the changes make

“significant concessions” for vehicles travelling under 40kmh but there’s more compliance for those who go over 40kmh. A requirement for Warrants of Fitness on 40kmhplus vehicles comes into

force November 11 – Remembrance Day. No warrant or work time rules apply on slower vehicles but they must be roadworthy. Parton welcomes the sign-off and acknowledges the assistance of the Min-

How fast? 40kmh is the threshold for many of the new rules.

istry, New Zealand Transport Association and NZ Police in developing the new rules. “Having the new rules in place for the next season while make life easier for the industry and safer for the motoring public in that everybody

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will understand the clear rules.” A nationwide roadshow of meetings explaining the changes started yesterday, April 22, in Blenheim and concludes May 30 in Levin. • See www.ruralcontractors. org.nz

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Rural News // may 7, 2013

management 29

Optimising beef cow fat cover their nutrition intake, the level of nutrition they were on and their location. Rib fat and back fat EBVs were used to decide which group a cow should go into. “The cows with the higher fat EBVs tended to be the smaller, earlier calving, easier doing animals.” Researchers then followed their progress over three matings to measure their fertility and success at handling varying levels of feed. While stock on the high nutrition diet had condition scores that rose gradually over time those on the low

GA RE T H G I LLAT T

BEEF COWS with a genetic tendency to put on fat are more likely to cope with tight times such as drought, a visiting Australian expert says. University of Adelaide professor Wayne Pitchford is appearing around the country in a 14-talk Beef and Lamb organised series. Last week he was at an event on the property of Beef Producer Of The Decade Chris Biddles. Pitchford discussed results of a fouryear study which examined whether or not traditional beef stock progeny were getting ‘too soft’ and loosing other positive genetic traits as they got bigger. Many Australian beef breeders have been selecting for larger stock with less fat mass in recent times and Pitchford says that there was a concern that these animals were becoming “European” at the expense of their ability to keep going in a drought. When looking at EBV historical trends on the 600-day feedlot index on the Certified Australian Angus Beef scale it was found that while overall carcass weight, muscle mass and intra-

Adelaide Uni’s Prof Pitchford relays the Australian research.

muscular fat had all uniformly risen from 2000 to 2009, rump fat levels had dropped, stayed level or only increased slightly. “Over time cattle have got bigger, more muscley and gotten leaner. While this is all well and good there is a concern that they will start crashing in tough times.” To test this researchers took 500

Not too ‘European’.

cows who had yet to calve from 10 Australian studs and divided them into groups of 25 based on their fat EBV level,

nutrition diet dropped dramatically after the first calving and didn’t start putting on condition till after the

second calf was weaned. Pitchford says the higher fat groups were able to remain in better condition through the duration of the experiment and at times had twice the amount of fat as those in the low fat groups. As a result they were more likely to last longer without supplementary feed when times were tight. “Under the animal welfare charter we had to kick in supplementary feed when any animal in that group had a condition score lower than two out of a total of five. In all cases it was a genetically low fat animal that triggered supplementary feeding while the high fat cows were still OK.” “We did a few calculations and 1mm rib fat EBV equaled ten days of extra feed that the farmer didn’t need to give them.” More traditional cattle were also likely to be more fertile and didn’t need to reach as heavier targets for optimum results at mating. High fat animals weighing 350 kg with 5mm of rib fat were found to be more likely to get pregnant in a nine week mating cycle than a 450kg animal with 2mm of rib fat.

Dealing with the aftermath of Drought? Decision making is critical. The impact of the drought and the recovery process will take some time. Livestock managers need to make sure they have enough feed to meet stock demands through winter and spring and be able to act early in case of a shortfall. Keep a close eye on your finances and speak to your trusted advisers. There may be banking packages or tax relief measures that you are entitled to. Support is also available for some, including farm workers, from the Ministry of Social Development www.workandincome.govt.nz.

who else can help? The Rural Support Trusts are there to support everyone through the drought. Contact them on 0800 787 245 or at www.rural-support.org.nz. Services are free and confidential. There are lots of agencies ready and willing to help. For a full list go to W25403

www.mpi.govt.nz/drought-faqs


Rural News // May 7, 2013

30 animal health

Neonic future unclear in NZ andrew swallow

WHETHER CALLS for New Zealand regulators to copy the European Commission and ban three widely used insecticides in an attempt to protect bees will gain traction here is unclear. Following last week’s EU announcement (see sidebar) Rural News asked the Environmental Protection Authority, which regulates use of such products here, if it was reviewing, or considering a review of neonicotinoid approvals. The EPA did not directly answer that and other questions within Rural News’ deadline, but in a written response (nobody was available for interview) defended the approvals process. If evidence suggests a substance poses any risk to invertebrates such as bees, this automatically triggers controls to manage those risks, including preventing the substance being used on flowering plants, or in areas where bees may forage, it said. It also said New Zealand’s regulations are already as tight as the new European controls on neonicotinoid use. That’s despite the EU ban on use, even as a seed treatment, in flowering crops such as

oilseed rape, maize and sunflower (see sidebar). In New Zealand neonicotinoid approvals include seed treatment of pumpkin, squash, maize and potatoes, all of which flower, and Rural News understands they’re also used off-label in brassica and other vegetable seed crops. Some neonicotinoids are approved for spraying on crops such as kiwifruit and pipfruit, albeit with a provision that flowering is avoided. National Beekeepers Association president Barry Foster said as yet the association has refrained from calling for a ban on neonicotinoids here. “Our position is more that all the systemic pesticides need to be more closely monitored.” At present, only a pesticide’s impact on adult bees is assessed in the approvals process but in some cases adult bees are a lot less sensitive than larvae or queens, he says. While these other developmental stages are hive-bound, foraging adults can bring traces of chemicals back on their bodies and/or in feed for the hive. Foster also points out the combined effect of sub-lethal doses of pesticides plus viral pathogens or parasites such as varroa isn’t fully understood.

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Exports of direct bee products alone are worth at least $100m/ year to New Zealand but the value of industries dependent on bees for production, such as kiwifruit, is estimated at $5bn/year, he says. “The health of our bees has not had the attention it really deserves when you look at their value in the economy from a pollination point of view. As an agricultural country we rely heavily on the honey bee and its health.” Agcarm, the crop protection industry body in New Zealand, says the EU move is an example of politicians making decisions that

should be left to regulators. “It’s been taken out of the hands of the scientists,” Agcarm chief executive Graeme Peters said, just hours after returning from a visit to Europe where he talked with “key stakeholders” on the neonicotinoid issue, including the Bee Research Centre. “It’s a bleak day for the crop protection industry, farmers and growers in the EU. “There is no evidence of neonicotinoids causing problems for bees in New Zealand. Just because the EU bans something it doesn’t mean New Zealand should follow suit.”

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THE EUROPEAN Union last week announced a twoyear ban on most uses of three common neonicotinoid insecticides – clothianidin, imidacloprid and thiametoxam – from December 1. EU Health and Consumer Commissioner Tonio Borg said risks to bee health identified by the European Food Safety Authority prompted the ban and pledged to do his “utmost” to ensure Europe’s bees, which are so vital to its ecosystem and contribute over €22 billion (NZ$33.67 billion) annually to European agriculture, are protected. The issue had EU member states deeply divided: 15 supported the move, eight voted against and four abstained. All must now observe the restrictions. The bans are for use of the three neonicotinoids for seed treatment, soil application (granules) and foliar treatment on bee attractive plants and flowering crops such as corn, oil seed rape and sunflower. Use in glasshouses or post flowering in paddocks is still permitted but all such remaining authorised uses must be carried out by professionals. The restrictions are subject to review as new information becomes available and at latest within two years. UK organic farming organisation, the Soil Association, hailed the EU decision as a victory for bees, other pollinators, and for independent science over the political, pro-pesticide position adopted by UK Environment Secretary Owen Paterson and the pesticide industry. “In Italy, where the government has (already) taken decisive action and banned certain neonicotinoids pesticides, deaths of honey bees in winter subsequently fell by more than 50% in three years,” says the association’s head of policy, Emma Hockridge. – Alan Harman


Rural News // may 7, 2013

animal health 31

Beware BVD when bull buying andrew swallow andrews@ruralnews.co.nz

THINK BVD when attending bull sales over the coming months, say vets. The difficult to spot viral disease can cause fertility problems for bulls, and severe losses among cows and calves should a naïve herd become infected. “All bulls should be tested to check that they’re not carriers and in my view, vaccinated, to prevent them picking up infection from the herd they go to,” says John Pickering of Wanganui Vets, and a member of the BVD steering committee. While most studs are now testing bulls, not all are vaccinating as well, he notes. Vaccination provides protection for a year so jabs at sale time will still be effective come mating next summer, he points out. Vaccinations should be repeated every year as infection at any time can have a lasting effect on bull fertility. “The virus gets into the testicles and affects semen production, reducing fertility. It can be quite significant. Sometimes it’s only temporary, for a couple of months, other times it’s permanent.”

Pickering says background infection of BVD in commercial beef herds is probably more widespread than many realise so there’s a real risk to incoming bulls if unprotected. Conversely, if a persistently infected or “PI” bull is introduced to a naïve herd (ie never previously infected, so cows have no antibodies) the consequences can be catastrophic, he warns. “I’ve seen absolute devastation, costing hundreds of thousands of dollars.” Cows fail to conceive, abort, or have PI calves. While infected calves tend to be compromised and often won’t survive, some will and if retained perpetuate the problem in the herd. Neil Sanderson, a vet and stud angus breeder from Oamaru, believes it’s irresponsible for any breeder to sell bulls that are not BVD tested and vaccinated. How much the disease contributes to the national average of 17% empties in commercial beef herds isn’t known, he notes, but if it causes 3-4% of cows to fail to produce a calf, then “that’s a very expensive disease,” he stresses. “There are plenty of commercial herds doing

90, 92 even 93% calving but some are down at 60-70%. It tends to go in regions and the North Island is about 7-8% behind the South Island. That in itself poses the question ‘why?’.”

Sanderson says he doesn’t buy arguments it’s all down to environment and believes the matter needs further investigation. @rural_news facebook.com/ruralnews

Bulls should be tested and vaccinated, says vets.

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Rural News // May 7, 2013

32 animal health

Gene identified as small calf cause andrew swal low andrews@ruralnews.co.nz

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THE CAUSE of an occasional but recurring problem of unusually small calves in dairy herds is a newly identified recessive gene, says Livestock Improvement (LIC). Typical 2-4% of calves are lost on dairy farms each year for a variety of reasons and the gene explains a few of those. While the calves are viable when born, generally they are not reared as replacements owing to their diminutive size. Where they have been, two-year-olds have been as small as yearlings. LIC would not put a figure on how much smaller the calves are compared to a normal calf other than to say the difference is “significant.” Acting chief executive David Hemara says the gene’s discovery is important as it means a problem that has existed on farms for decades can start to be managed out of the national herd. LIC estimates 10-15% of Holstein Friesians carry the Small Calf Syndrome (SCS) gene, with about half that frequency in crossbreds. If those carriers are mated with a bull that is also a carrier, there’s a one in four chance the calf will be born with the syndrome – ie homozygous for the recessive gene. LIC says the resulting incidence of the syndrome has been assessed to be around one to two affected calves in the average 400 cow New Zealand herd per year. Hemara says LIC’s large genetics database and ongoing research pro-

gramme enabled the Cooperative to go back 30 years screening the DNA of its bulls, and beyond that through pedigree records. “That research suggests the genetic variation existed in the early 1960s and possibly before then. We can’t be sure of when or where it started.” CRV Ambreed chief executive, Angus Haslett, says the discovery is important for all New Zealand breeding companies and farmers. “Over the years a number of genetic variations have been discovered and managed out of the industry and this will be no different. CRV Ambreed will work with LIC to manage this genetic variation so its impact is minimised on New Zealand farms in the future.” Hemara says SCS is just the latest in a range of genetic variations which have been discovered, and largely eliminated, over the years. “Diseases like CVM and BLAD used to be present in New Zealand herds but their incidence has been reduced thanks to their discovery and

Angus Haslett

managed removal from the national herd.” LIC says it will make the screening test available to all genetics companies with the expectation that they will test their AI sires and publish the results, as it is already doing (see panel). LIC estimates that, over 30 years, around 350 of its bulls have carried SCS. It says it will not necessarily be removing carriers from its bull teams but all bulls are being screened and any carriers will be clearly identified on DataMate so users can minimise the chances of the mating a carrier bull with a carrier cow.

LIC's SCS carriers

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Rural News // may 7, 2013

animal health 33

Rural vet bonding scheme full VETERINARY REPRESENTATIVES and Minister for Primary Industries, Nathan Guy, are hailing the rural veterinary bonding scheme a success following the release of new figures. The scheme, which was launched February 2009, is now fully subscribed with 102 veterinary graduates employed under it across New Zealand. “Even better, 96% of those entering the scheme from the time it commenced in have stayed in it,” says New Zealand Veterinary Association president Gavin Sinclair. The first tranche of graduates that entered the scheme received their first payments of $33,000 before tax, ie $11,000 per year in the scheme, just prior to Christmas. At that point, four had left the scheme, and ten moved to other rural practices. Some regions are still proving tough to recruit for, but the result is encouraging, says Sinclair. “This is just what we wanted; young veterinarians settling into rural practice and hopefully remaining there. They are sorely needed.” The NZVA says it lobbied hard for the introduction of the scheme as gaps were appearing in “the thin green line” of the veterinary rural workforce. While Government has significant responsibili-

ties for food safety, animal welfare, and biosecurity, it relies on veterinarians to monitor livestock to ensure these responsibilities are met, says the association. The market risk of late recognition of an exotic disease outbreak, food safety concerns, animal welfare disasters and veterinary involvement in managing these risks was

NZVA president Gavin Sinclair

recognised in part by government support of the scheme, it notes. For farmers, the NZVA says the scheme means a viable, sustainable, cost effective and responsive rural veterinary workforce for routine and emergency clinical services. “A rural veterinary practice faces many risks and challenges, not the least being able to sustain the 24/7 on call requirement,” notes Sinclair. “These practices have a high workload and a surprisingly low level of

remuneration which can make the work unattractive to young graduates.” Demographic trends, notably 85% of new graduates from Massey being female, and vets wanting

flexible working arrangements, often part-time at some points in their careers, means companion animal practice posts in urban areas have become increasingly popular.

Many of today’s veterinary graduates seek work with smaller animals.

Drought Recovery PARTICIPATING VETS AND MERIAL ANCARE HAVE TEAMED UP TO PROVIDE EXTENDED TERMS ON MERIAL ANCARE SHEEP AND CATTLE DRENCHES.

Ministerial support Earlier this month Minister for Primary Industries Nathan Guy welcomed 30 new vets onto the 2013 intake of the Rural Veterinary Bonding Scheme, taking the total since launch to 136. He says the scheme is “making real headway in tackling the rural vet shortage” and it’s “a solid incentive, helping to make rural practices more attractive to junior vets who might otherwise end up in city clinics or heading overseas. “Livestock farming is the engine room of New Zealand’s economy. We export around $30 billion in primary sector exports a year and we want to double that by 2025. That’s not going to happen without practically skilled, dedicated rural vets who provide animal health advice. The scheme is open to newly qualified veterinarians from Massey University who have secured jobs in rural practices working with farm animals. At the end of their third year of employment they are entitled to a $33,000 payment, and additional payments of $11,000 at the end of their fourth and fifth years.

TALK TO YOUR LOCAL VET TODAY TO DISCUSS HOW THEY CAN HELP YOUR STOCK AND YOUR CASHFLOW. •130411 Drought Assist 187x280.indd 1

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Rural News // May 7, 2013

34 machinery & products

Chainless feeder key to plant KIWI INGENUITY in the spirit of ‘Heath Robinson’ has resulted in a plant that for 10 years has made chaff for horse feed at Oakland Stables, on the outskirts of Hastings. Central to the plant is a Hustler Chainless 1000 bale feeder. Paul Reynolds, with his wife Sue, a keen horsewoman, first saw the business opportunity when he realised most of the chaff available at the time was of poor quality or too dusty. He has been making horse chaff for 15 years. Having been involved with haymaking since he was 12, Reynolds knew he could produce the quality of hay needed for making good chaff, he says. “Horse people are very particular,” he says. “By growing the hay, making the chaff and bagging it, we have complete control of the process. This helps

ensure the consistency in quality our customers expect.” One challenge in setting up the chaff operation was finding a system suited to high volume production that also fitted within Reynolds’ modest startup budget. The answer was to employ Tom Dear, a jackof-all-trades, who put together a system for much less cost than the $500,000 needed at the time for an off-the-shelf solution. Reynolds describes his operation as ‘Kiwi ingenuity meets Heath Robinson’. The current system has been operating since 2003 and is made up of a custom-built Hustler Chainless 1000 ale eeder (with a stationary frame and no wheels or forks), a silage cutter, riddles for separating the fines and the chaff

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Chaff maker Paul Reynolds with his custom built Hustler Chainless 1000 bale feeder that has been running eight hours a day since 2003.

that is still too long, and a silage wagon. “The Hustler bale feeder is reliable and easy

to operate,” Reynolds says. “It handles rounds and squares, runs eight hours a day, five days a

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PROPERTY SERVICES company Programmed Property Services will be canvassing farmers on the changing business environment and needs from July, says New Zealand sales manager Tony Jane. Jane says sales personnel from the company’s 15 branch network will be talking to clients and farmers about the changing face of farm buildings and property maintenance. The company has been in the business since 1986. Jane points out that the needs of farmers are changing with new

building materials, new operations and on-going maintenance requirements. And he reflects on the drag on farms resulting from the drought. Though many farmers are likely to be strapped for cash this season, the demand for building maintenance is constant, he points out. Programmed allows farmers to get the building maintenance work done while being able to spread the cost over the term of the programme. “Our flexible payment terms mean there are various payment options available to farmers which best suits their cash flow,”

Jane says. While larger farming blocks tend to make up the bulk of the company’s rural business, Jane says the company would also be a useful resource for small to medium-sized farms. “With a programme in place no matter what climatic conditions are happening, buildings assets are being maintained. Hence a longer lifespan from that asset while maintaining its value.” Jane experienced this first hand as a customer when he worked as the maintenance manager for Chemical Cleaning Ltd (now Orica) a New Zealand-based cor-

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Rural News // may 7, 2013

machinery & products 35

More bouquets for NH’s big baler NEW HOLLAND’S BigBaler large square baler range has won another award – the 2012 Good Design award conferred by the Chicago Athenaeum: Museum of Architecture and Design and The European Centre for Architecture, Art, Design and Urban Studies. The award is for outstanding

design and styling. “The BigBaler has increased capacity by up to 20% and density by up to 5%, and has revolutionised large square baler styling, increasing productivity and enhancing the operator experience as never before,” said New Holland Agriculture’s product director of hay and forage

“The BigBaler has increased capacity by up to 20% and density by up to 5%, and has revolutionised large square baler styling, increasing productivity.” and crop production, Bob Hatz. The company says the award “cements the BigBaler’s segment-leading position on both sides of

Longer warranty for rural tyre buyers GARE T H G ILLAT T

COOPER TIRE users will have a new high mileage warranty, regardless of where they buy them from, says importer Exclusive Tyre Distributors. Motorists who buy Cooper tyres from any Cooper Tire dealership in New Zealand will get up to 60,000 km warranty “in the near future”, according to Simon Billington, sales manager for Exclusive Tyre Distributors.

“Our new tyres have only been in the market 18 months and we are just getting figures back now and they are doing well. In most cases we will be offering around 60,000km in rural areas.” While mileage warranties have been available in metropolitan areas for a number of years, motorists outside major urban centers had a limited or no warranty – due to variable road conditions. But feedback from customers about Coopers latest tyres has meant that it is now viable for the importer to extend the coverage right across the country says Billington. “Our new tyres have only been in the market 18 months and we are just getting figures back now and they are doing well. In most cases we will be offering around 60,000km in rural areas.” Billington says the secret behind the tyres’ long life is the deep tread depths and strong casing construction. “Around 70-80% of the material used in a tyre is in the casing.” The better the casing the better the tyre performs. Comparing Cooper tyres to the original fitted tyres on the new utes, the Cooper Tires can carry 25% more load. “This makes them great for people who use their vehicle for work, towing and loading up.” Billington says another benefit of stronger casings is greater resistance to damage. Tel 0800 645 3243 www.coopertire.co.nz

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the Atlantic”. A recent North American AE50 award focused on the BigBaler’s productivity and efficiency, with outputs as high as 110 bales/hour.

And a Silver Innovation Medal awarded for the BigBaler at the Sima Exhibition, Paris, in February, was for “outstanding safety features and its

operator friendly design,” says New Holland. Productivity enhancing features include the MaxiSweep pickup to ensure constant smooth feeding, and the SmartFill system which gives uniform flake formation by means of a network of sensors. The maker says

variants of its large square balers have pioneered baling firsts which are now industry standards, e.g. double knot technology, electronic proportional density control and the pre-compression chamber. The BigBaler is made in Zedelgem, Belgium. Tel. 06 356 4920 www.newholland.co.nz


Rural News // May 7, 2013

36 machinery & products

Better than a big stick! ELECTRIC STOCK prods by Gallagher, used in Australia to keep stock moving in cattle yards and loading ramps, are now on sale in New Zealand. Spokesman Kevin Marquand says Aussie truckies “rave about them, and farmers are using them in cattle yards… to save valuable time.” Gallagher last month launched two models of prod – the SG 150

and the SG 250 – in New Zealand. Used sensibly they are a safe and reliable alternative to a big stick, Marquand says, and they are durable. “They can handle getting knocked around better than most other makes.” Notably, a prod allows the farmer to keep some distance between himself and an animal. It can be used simply as a poker or, if needed, a squeeze of the trigger will

safely electrically ‘zap’ an animal to get it moving in the right direction. Gallagher prods come with three removable shafts: 55, 82 and 107cm (includes unit) to suit different jobs. The shafts are flexible, reducing risk of damage. The Stock Prod 150 is battery powered, the Stock Prod 250 has a rechargeable battery and comes with a free car recharger. “The advantage of the 250

model for stock truck operators is that they can charge the unit between yards,” says Marquand. “If they’ve got two prods, they can have one on charge while they are using the other.” The Stock Prod 250 also has a button safety clip and a patented one-piece moulded handle for durability and moisture resistance. Both models are well balanced and comfortable to use.

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Help for droughtstricken pastures HATZENBICHLER air seeder harrows are an ideal solution for farmers looking to renovate summer stressed pasture, says the New Zealand distributor Origin AgGroup. The company’s principal Dave Donnelly says “its accuracy allows small seeds to be sown down to 1kg/ha for forage crops and up to 40kg/ha for grass. This versatility allows farmers to sow new grass into existing pasture without cultivation.” Donnelly says the machine is also equally suited to sowing into cultivated ground in spring to help establish forage crops for summer grazing. Its 6m working width ensures high productivity – up to 6ha/hour at 10km/h. “Total machine weight of only 550kg (before seed) and three-point-linkage mounting make it particularly suitable on smaller tractors and easy to use on hilly country,” says Donnelly. It is also fitted with a precision broadcast air seeder which distributes seed evenly across the full width of machine. “The specially designed tines scarify, grind and de-thatch dead plant material and lightly aerate the soil to encourage new grass seed to germinate and establish itself quickly,” Donnelly adds. Standard features include powder coat finish, central tine angle lever adjustment, three-pointlinkage mounted, loading access platform for easy filling of the seed box, and hydraulic folding frame for a 3m transport width. Tel. 07 823 7582

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These offers are valid until 30 June 2013 or while stocks last, and only available at Fieldays or participating Suzuki dealers. Prices are recommended retail, excluding GST. Models shown are indicative only and may differ to the actual sale stock. Some models may not be available at all participating dealers. Savings shown include GST. Offers not available in conjunction with any other promotions. promotus 4930RN

Contact your local rural supplies merchant or phone 0800 266 258


Rural News // may 7, 2013

machinery & products 37

Stock feeder helps animals make good daily liveweight gains GARE T H G ILLAT T

FEEDING GRAIN by Advantage Feeder grain dispensers has allowed a South Canterbury farmer to lift live weight gain on weaner lambs by 100 grams a day, the equipment maker says. Bill Wright runs a 390ha drystock farm at Cave, 28km northwest of Timaru – 850 breeding ewes, 250 hoggets, 130 bull calves, 130 R2 bulls and grazing 500 dairy heifers. Wright rears 1500 lambs plus some trading lambs on contract for Silver Fern Farms from breeding ewes and hoggets, lifting them to an average of 19kg. He grazes lambs on 70ha of permanent lucerne to get them to required weights but says that the high quality pasture also has high protein levels and doesn’t always allow stock to reach their potential weight; adding grain and straw helps balance the diet by increasing carbohydrates and fibre. “The cloudy damp conditions

The feeders have a 2 slide system that allows how much grain gets allocated.

last year meant we had disappointing results from the lucerne. The weaned lambs only gained 150g/ lw/day.” As chairman of the central South Island Beef + Lamb farmer council, Wright went looking for answers at local Beef + Lamb field days and says the solution of added grains came fairly quickly. “There’s the opportunity to get a lot of good information and make good contacts.” People he met through these field days suggested using a grain crop with

lambs to increase the amount of carbohydrates in the animals’ diet, and to add straw for fibre. To test this, Wright grazed half this season’s lambs on the lucerne without any form of grains while the other half were offered 100 grams of feed barley a day from two Advantage Feeders that contain 1200kg each. Stock offered grain gained 350g/lw/day while those without gained just 250g/lw/day. This meant stock were converting all the grain into weight gain, says Wright. “With grain

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costing 3.6 cents per 100 grams ($360/t) and live weight gain equaling 18-20 cents per 100 gram live weight gain, depending on the schedule, it’s a great return.” While the average weight of lambs lifts from 19kg to 19.7kg and the lambs were away quicker, Wright says the study was anything but scientific. “It is only over one season and was only done with one

mob. It certainly wouldn’t hold up in a science paper.” While Wright feels the potential is there to do better, he says the trial wouldn’t have been possible without the use of Advantage Next Generation feeders. The feeders have a twoslide system to allow the farmer to control how much grain gets allocated while preventing stock from over consuming. The dual slide system forces the stock to lick the feed out of an adjustable groove; they are prevented from continuing to eat after their reservoir of saliva has been depleted. Wright introduced the feeders to lambs and ewes in spring and he says it didn’t take long for stock to get used to the system of getting barley from the feeders. “Lambs are naturally inquisitive, grain is like lollies to stock and a good number of sheep

have had grain so it didn’t take long for animals to work out how to get grain from the feeders.” With Wright growing 30ha of barley already he was able to keep supplement costs low but said the system should work with bought-in barley as the returns are substantial. Farmers can allocate a certain amount of grain and need only fill the feeder once it has emptied, which could be up to 23 days later, reducing labour costs. Advantage Feeders managing director Gerard Roney says results like those seen by Wright mean that the capital cost of feeders would be easy to recoup. “The increased production can mean that the capital investment is paid off the first time the feeder is emptied.” Tel. 09 431 7276 www.advantagefeeders. co.nz

Vintage win for Watson TON Y HO P K INSON

THIS YEAR’S winner of the vintage ploughing section at the New Zealand Ploughing Championships has farmed at Ashburton all his life. “I had a 140ha farm and I am now on a 13ha lifestyle block,” says Pearce Watson, who first competed in the late 1950-60s at YFC events. He then bought his farm in 1970 and started competing again in the mid 1990s. He was one of the first delegates who helped start the vintage section at the New Zealand Ploughing Championships. Watson’s tractor was a John Deere AR made in 1938 and the plough was a trailed Reid and Gray converted from a horse plough. “As a horse plough it is 100 years old,” he told Rural News. This was Watson’s third win at New Zealand finals, where he has also been a judge.


Rural News // May 7, 2013

38 rural trader FLY OR LICE PROBLEM?

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www.ruralnews.co.nz www.dairynews.co.nz @rural_news facebook.com/ruralnews

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Rural News // may 7, 2013

rural trader 39 Weatherstations, unusual gifts and science support for over 40 years...

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Rural News 7 May 2013