Extra production does not necessarily mean extra dollars. PAGE 17
Earthquaker leaves its mark.
MPI’s new boss hits the ground running PAGE 9
TO ALL FARMERS, FOR ALL FARMERS DECEMBER 18, 2018: ISSUE 667
Pamu playing politics
BIG TICK SUDESH KISSUN firstname.lastname@example.org
STATE FARMER Landcorp has raised the ire of Opposition politicians and Federated Farmers over its increasingly overt political behaviour. Landcorp – now known as Pamu Farms of NZ – has peeved former agriculture ministers Nathan Guy and David Carter over a previously secret submission to the Tax Working Group (TWG) led by former finance minister Sir Michael Cullen. In its submission, the state-owned farmer advocated for both a tax on water and nitrogen fertiliser and stated that it was not opposed to a capital gains tax. Landcorp’s pro-tax submission is in stark contrast to the views of Federated Farmers and many others in the
farming sector. Guy and Carter have described the submission as ‘a kick in the guts’ for rural communities. “Landcorp’s sneaky submission to the TWG proposing a water tax, nitrogen fertiliser tax and not opposing a capital gains tax proves just how out of touch the state-owned company is with farmers on the ground,” Guy claims. The former agriculture minister has
Something special South Canterbury grower Hamish McFarlane believes there is something about the climate that makes the region ideal for growing blackcurrants. “Some of the varieties we have here are the same as grown overseas but ours would probably be double the anthocyanins. We believe it’s due to our latitude.” About 100ha of his 550ha is planted in blackcurrants. McFarlane also grows barley, seeds, potatoes and variously coloured carrots for a Timaru company that juices them for export. He also grazes a few trade lambs and dairy heifers. – See the full story in the Hort News supplement of Rural News January 15, 2019.
also questioned why Landcorp could submit to the TWG more than a month after submissions to it were closed off. He believes the state farmer has been encouraged ‘behind the scenes’ by its political masters to present a pro-tax opinion from the farming sector to the tax working group. Guy is also asking why Landcorp’s submission wasn’t publicly listed on
the TWG website until it became public through the Official Information Act. Federated Farmers Andrew Hoggard has accused Landcorp of “throwing other farmers under the bus “. Federated Farmers rejects these new tax proposals, Hoggard says. “There’s already a lot of regulations TO PAGE 4
FORMER FONTERRA director Greg Gent says the co-op has made the right decision to change its external auditor. Gent told Rural News that he gave the Fonterra board “a big tick” for the decision. The co-op announced earlier this month that it was recommending KPMG be appointed its new auditor from July 31, 2020; shareholder approval will be sought at the coop’s annual meeting in November next year. “Fonterra’s current audit agreement with PricewaterhouseCoopers (PwC) concludes at the completion of the FY19 financial statements,” the co-op says. At the co-op’s annual meeting in south Waikato on November 8 this year, Gent opposed the resolution to re-elect PwC as auditor for another year. Gent told the meeting that he felt the relationship between PwC and Fonterra had “become too close”. He says it was time to look at new auditors. Gent also noted that several PwC executives have ended up on the Fonterra board. Farmer-elected director Brent Goldsack was a partner in PwC for more than 12 years, and appointed director Bruce Hassall had a 35-year career at PwC, including seven years as chief executive of its NZ practice. Gent says PwC has been Fonterra’s auditor since its inception. “That’s a very long time and it’s time to change the auditor.”
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RURAL NEWS // DECEMBER 18, 2018
NEWS 3 ISSUE 667
It’s no silver bullet! in horticulture. “Bay of Plenty Regional Council, which has a major problem around Rotorua, has used Overseer in a very intelligent way and it has helped solve specific issues they have there,” Upton says. The report reveals a distinct lack of information needed to confirm Overseer’s use in a regulatory setting, and this means that a well-resourced evaluation of it is needed. The report says one of the assumptions built into Overseer is that all farms have adopted good management practices, so regional councils must ensure their compliance monitoring is of the highest order. “Overseer and the use of it by regional councils has been rightly criticised by farmers and commercial growers. The only way forward is to refine it so that it becomes a trusted tool,” Upton says. “I am not aware that there is another tool waiting in the wings and certainly a lot of investment has been in it, so it’s better to modify it and not waste that investment.”
PETER BURKE email@example.com
NEWS��������������������������������������1-14 AGRIBUSINESS���������������� 16-17 MARKETS���������������������������18-19 HOUND, EDNA���������������������� 20 CONTACTS����������������������������� 20 OPINION��������������������������� 20-22 MANAGEMENT���������������23-24 ANIMAL HEALTH����������� 25-26 MACHINERY AND PRODUCTS�����������������������27-29 RURAL TRADER�������������� 30-31
HEAD OFFICE Top Floor, 29 Northcroft Street, Takapuna, Auckland 0622 Phone: 09-307 0399 Fax: 09-307 0122 POSTAL ADDRESS PO Box 331100, Takapuna, Auckland 0740 Published by: Rural News Group Printed by: PMP Print CONTACTS Editorial: firstname.lastname@example.org Advertising material: email@example.com Rural News online: www.ruralnews.co.nz Subscriptions: firstname.lastname@example.org ABC audited circulation 79,599 as at 30.09.2018
THE PARLIAMENTARY Commissioner for the Environment has effectively put the kybosh on using the nutrient measurement tool Overseer for regulatory purposes until some major changes are made to it. In a detailed 136-page report, Simon Upton points out that Overseer was designed as a farm management tool to calculate nutrient loss on pastoral farms. But he says it’s now being used by some regional councils to define regulations. “For all the fascinating detail this investigation has traversed concerning Overseer and farm based nutrient management, I am left with a keen sense that resolving nutrient pollution will have to commandeer a much wider array of tools.” In other words Overseer is not a silver bullet. Upton has called on the Government to say clearly whether Overseer may be used as a regulatory tool, and if so, more the model needs more trans-
parency and should be independently peer reviewed and analysed for sensitivity and uncertainty. Upton says the Government must also provide official guidance on how regional councils should use Overseer. “In the meantime, regional councils can still use it but they need to be aware of its limitations.” Upton points out that if Overseer
Fonterra unveils fixed milk price SUDESH KISSUN email@example.com
FARMERS WILL welcome the choice offered in Fonterra’s new milk pricing scheme unveiled last week, says Waikato Federated Farmers president Andrew McGiven. “As long as it’s transparent and shown that it doesn’t impact the milk price of farmers who choose not to participate, then I think it will be a viable option for some farmers who want certainty for budgeting,” McGiven told Rural News. Fonterra will introduce the scheme from June 2019 as a new financial tool to help farmers gain more cer-
HOW IT WILL WORK ■■
All Fonterra farmers will have the opportunity to participate on a monthly basis (excluding January and February). Fixed Milk Price will be referenced to the NZX milk futures market, minus a service fee not exceeding 10c/kgMS initially. Over a season, farmers will be able to fix up to 50% of their estimated milk production per farm. Fonterra will make at least 1 million kgMS available at every event and up to a total of 5% of the NZ milk supply available in a given season.
tainty on what they will be paid for their milk for the season. The Fixed Milk Price scheme can help them with budgeting, planning and managing farm profitability, the co-op says. It retains some aspects of the guar-
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anteed milk price scheme, which the co-op scrapped at the end of 2015-16 season due to poor farmer support. All Fonterra farmers will have the opportunity to participate on a monthly basis, excluding January
and February. The fixed milk price will be referenced to the NZX milk futures market, minus a service fee not exceeding 10c/kgMS initially. Farm Source and global operations chief operating officer Robert Spurway says the co-op is committed to making a difference for its farmers and providing flexible options will help them “share up, invest onfarm, and manage financial exposure”. “In addition to providing farmers with the opportunity to get more price certainty, Fixed Milk Price will also provide the cooperative with certainty about the margins it can achieve on a portion of milk supplied. It’s a win-win,” says Spurway.
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RURAL NEWS // DECEMBER 18, 2018
Landcorp defends tax submission SUDESH KISSUN firstname.lastname@example.org
STATE FARMER Pamu Farms (formerly Landcorp) is defending its submission to Government’s Tax Working Group (TWG). Pamu head of communications Simon King says the SOE wasn’t asked to make a submission. He also clarified that the submission was late because the Pamu employee responsible was on three weeks bereavement leave in the UK. King was responding to criticisms of Pamu’s submission. National agriculture spokesman Nathan Guy
says the submission is a kick in the guts for rural communities. “Landcorp’s sneaky submission to the TWG proposing a water tax, nitrogen fertiliser tax and not opposing a capital gains tax proves how outof-touch the state-owned company is with farmers on the ground,” Guy says. “Landcorp’s submission wasn’t publicly listed on the TWG website until it became public through the Official Information Act last week. Why was this submission hidden?” King says the TWG was specifically looking at environmental taxes, land taxes and capital gains taxes – all of which will
Landcorp (Pamu Farms) spokesman Simon King.
have an impact on the company. However, he admitted the submission made in May this year wasn’t copied to the Govern-
ment. “We failed to flag this submission with the shareholder, which was against the usual ‘no surprises’ protocol, and we
regret that,” he says. “Nonetheless, as a taxpaying New Zealand company, with large land holdings, Pāmu has an interest in the deliberations of the TWG as do many other companies. Being an SOE does not change that. We note that other Crown controlled companies such as Genesis Energy and Meridian Energy also made submissions to the TWG. “Pāmu will sometimes make submissions on issues where the company has a direct interest; previous examples include a submission on the Emissions Trading Review in 2008, NAIT Cost Recovery in 2011 and the Health and Safety
at Work Bill in 2013, along with a range of submissions to various regional councils. “We also see this as consistent with taking a leadership stand in a similar way to, for example, our stand on health and safety issues which has contributed to greater use of helmets on quads on farms and a broader recognition of the importance of safe farming practices.” Guy says farmers and growers nationwide have been working incred-
ibly hard to improve their farming practices to reduce environmental impacts without government intervention and more taxes. “Landcorp has taxpayers’ money, the best tractors, the best laneways, the best of everything and it is out there [implying] it is holier-than-thou. Landcorp should be very careful about welcoming new taxes on hardworking farmers and growers when these taxes will not affect them.”
Playing politics FROM PAGE 1
by regional councils focusing on a lot of these issues -- managing it that way. Coming in with taxes is sortof like just doubling up.” When questioned in Parliament, the minister responsible for Landcorp, Shane Jones, conceded he was not aware of the submission until alerted by media and that he did not know the SOE was promoting environmental taxes. Jones denied there has been political encouragement for Landcorp to make a submission. However, he conceded the idea for the submission came after Landcorp executives – including its head of environment Alison Dewes and consultant Peter Fraser – met with Treasury officials about environmental taxes. Both Dewes and Fraser are well-known environmental advocates and have publicly campaigned against irrigation expansion and other environmental issues. Landcorp also has its own ‘environmental reference group’ chaired by freshwater-campaigner Marnie Prickett and including high-profile anti-farming advocates Mike Joy and Forest and Bird’s AnnaBeth Cohen. It is understood that Landcorp’s chief executive Steven Carden approved the TWG submission and although it was signed off by Landcorp’s board, the board members were not aware of its advocacy for environmental taxes.
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RURAL NEWS // DECEMBER 18, 2018
It’s looking like a good year PAM TIPA email@example.com
PRIMARY SECTORS will have a good start to 2019, with horticulture the likely star performer for the year, according to the Ministry for Primary Industries’ December Situation and Outlook report. But it warns that potential volatility is on the horizon: international markets, weather and labour could present challenges. Primary industry exports are forecast to increase by 3.8% for the year ending June 2019 to $44.3 billion, the report says. “Overall, the forecast has been increased $505 million from the previous forecast round, boosted by higher prices in New Zealand dollar (NZD) terms and a positive production outlook so far this season. “This would be the fourth straight year of rising export revenue following the dairy downturn in 2015. “Export revenue increased 11.7% last year, with higher export revenue in all primary industry sectors. “Horticulture is expected to be the fastest-growing export sector in 2019, driven by both strong consumer demand and good growing conditions for most horticultural crops in the most recent harvests. “Dairy export revenue
Kiwifruit revenue is predicted to rise 21%.
SECTOR OUTLOOKS ■■
is now forecast to reach $17.2b in the year ended June 2019 -- a rise of 3.3% on the previous year. This rise has been driven by an increase in milk production following a very strong start to the dairy season.” While prices are weakening for some key dairy commodities, the impact is offset by growth in higher value products such as infant formula and a more favourable exchange rate. Looking beyond 2019, primary industry exports are forecast to fall slightly to $44.0b for the year ended June 2020. “Dairy production and export volumes are forecast to dip slightly, and red meat prices are expected to decline since prices are currently well above long run averages.” Most macroeconomic indicators are positive for the primary industries. The Comprehensive and
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Breaking news Management Animal health HEADER Agribusiness Ferist et quati aut pedici te vollab imod quamet atur soleniet quiatibu. PAGE 15
Progressive Trans-Pacific Partnership (CPTPP) has been ratified, and income growth in NZ’s main trading partners remains robust. However, international markets have begun to experience an increase in volatility. This is particularly the case with the NZ dollar, but also with a recent fall in dairy commodity prices and in equity markets around the world. “The underlying causes of this volatility are complex, but Brexit and the trade dispute between the US and China both highlight the uncertainty under which global markets are currently operating,” the report says. “While the medium term implications for this volatility are yet to become apparent, the risks to primary industry exports have increased.” Other potential chal-
❱❱ Machinery & Products reviews ❱❱ Competitions... HEADER and much more HEADER Ferist et quati aut pedici te vollab imod quamet atur soleniet quiatibu. PAGE 23
RURALNEWS TO ALL FARMERS, FOR ALL FARMERS
Ferist et quati aut pedici te vollab imod quamet atur soleniet quiatibu.
lenges identified include a developing El Nino weather pattern; while the impacts of each El Nino are different, they generally lead to drier conditions in the north and east of NZ. Labour supply also presents a challenge. “With unemployment rates currently at low levels and employment demand projected to increase, labour constraints are present not just in the primary industries, but across the NZ economy. “The challenges created by this issue are often amplified by the seasonal nature of labour demand in the primary sectors. Part of this pressure has been addressed with the recent 15.8% increase in the Recognised Seasonal Employer Scheme cap on immigrant workers to 12,850.” @rural_news facebook.com/ruralnews
Dairy: A forecast rise of 3% in milk production is expected to boost export volumes. While international price declines are forecast for key commodities such as whole milk powder (WMP), butter, and skim milk powder (SMP), this will be partially offset by a forecast weakening of the NZ dollar and continued strong prices for higher value dairy exports. Meat and Wool: A positive outlook with strong red meat export and farm gate prices offsetting lower volumes forecast for 2019. Export revenue for the year ending June 2019 is forecast to reach $9.6b, up 0.8% on the previous year. Edible offal, processed meat, poultry, and co-products continue to add to the sector’s export performance, offset by a weaker outlook for wool, carpets, hides, and skins. Horticulture: Export revenue is forecast to rise 12% for the year ending June 2019 to $6b. Kiwifruit revenue is forecast to rise 21% over this period, driven by a large kiwifruit harvest in 2018 and rising kiwifruit prices. Apple and pear production and exports are at record levels.
RURAL NEWS // DECEMBER 18, 2018
The good, the bad, and the As we bid farewell to another year it’s time for the annual review of 2018 in the primary sector as seen by the Rural News editorial team. THE GOOD: • The great start award: to outgoing Zespri chairman Peter McBride for his level-headed, down-to-earth approach on taking up Fonterra directorship. An independent thinker and experienced hand. Is he the next Fonterra chair in waiting?
• Straight talking award: kumara grower and Vegetables NZ chairman Andre De Bruin for honest opinion on drugs and employment issues – rather than the usual PR massaged ‘never say anything controversial’ comment that does not face issues head-on. • The Lazarus award: she’s back! Leonie Guiney is back on the Fonterra board after being unceremoniously dumped last year as Fonterra’s ‘independent’ selection panel declined to choose her to stand again. This time Guiney self-nominated and went direct to shareholders who voted her back. • Thank God he’s there award: agriculture Minister Damien O’Connor. The coalition Government is not overly-endowed with many profarming types. However, O’Connor has proven to be a pragmatic minister and strong advocate for the sector. His efforts in getting Government backing
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with the Meat Industry Association it is protecting NZ’s interests in Europe as Britain makes a clumsy exit from the EU. Both chairman Andrew Morrison and chief executive Sam McIvor have not held back in telling the Europeans to honour the WTO deal on sheepmeat access to the EU and UK. • The hort sector, with the rise and rise of the kiwifruit industry, helped along by pipfruit and spuds no less.
for the fight against M.bovis is a good example of this. • Miraka the Maori dairy company at Taupo has given real meaning to the word excellence. It won the Maori agribusiness award for being a top employer and also has a great incentive system in place for its suppliers -- Te Ara Miraka. • Beef + Lamb NZ is certainly giving its levy payers excellent value for money. Working in collaboration
But will Aucklanders ever get the fact that taking productive land for housing is pushing up the price of their fruit and vegetables? Probably not. • NZ has many great farmers, but we’d like to single out dairy farmer Trevor Hamilton who will never get on the board of Fonterra because he asks questions -- hard, honest questions -and is not one of the ‘old boys’. Ben Allomes is another model farmer and won best employer gong. He and wife Nicky are great farming leaders and role models. THE BAD: • The ‘WTF’ award: for everyone involved in climate change-affected agricultural policy-making: for conflicting statements, nil clarity and completely leaving farmers in the dark. • The knock-out award: former Associate Agriculture Minister Meka Whaitiri. After getting too pushy with her staff, Whaitiri was unceremoniously dumped by the PM and her associate ag portfolio has not been assigned to anyone else. It seems the ag portfolio – like the former minister’s staff
RURAL NEWS // DECEMBER 18, 2018
ugly - 2018 year in review member – has been left a ‘punching bag’ for Whatiri’s appalling behaviour. • Cracked-record awards: another year and yet again Greenpeace, the Green Party, Fish and Game, SAFE and the usual coterie of anti-farming PhD types have continued their relentless attacks on the sector. Let’s face it, these groups hate farming and will not be happy until all farming in NZ is shut down. The groups are fast losing credibility – if they ever had it. • Past its use-by date: the entity formerly known as Landcorp – now Pamu Farms – is losing the support of the farming sector quicker than its pathetic returns on capital. The state farmer is not only spending taxpayer funds on giving farming critics such as Mike Joy, Marnie Prickett and AnnaBeth Cohen cushy jobs, but is even now overtly political in publicly advocating for capital gains and water and nitrogen taxes. It’s time it was sold. • Buying votes: while there is merit in the Government’s much-vaunted Provincial Growth Fund aimed at funding worthy projects in provincial NZ, there are legitimate questions
THE UGLY: • How the mighty have fallen: in past years, when Lain Jager was heading Zespri, – he was a regular fixture on the annual ‘good’ list. However, 2018 has not been a stellar year for the former kiwifruit boss. He now heads up the highly questionable and ineffective $500,000-a-year Primary Sector Council, which has taken the saying ‘All hui, no doey’ to new levels.
over the management of the PGF by Shane Jones. This has not been helped by the bulk of the fund being spent in Northland where Jones and Winston Peters are trying to build NZ First’s base. However, the decision to extend struggling dairy co-op Westland Milk a sweetheart loan of $10 million – without any public scrutiny – sounds alarm bells about the lack of analysis about how this fund is being used.
If the PSC had been a bull or a ram, this expensive white-elephant would have been culled long ago. • Sour milk: Fonterra... where do we start? In 2018, Fonterra recorded its first loss in history, continually kept dropping its forecast payout for the current season, lost both its chair and chief executive and then had to re-run its director elections due to the archaic and confusing rules it has governing director votes. 2019 can’t come round quick enough for the dairy co-op. • Golden goodbye: former Fonterra chief executive Theo Spierings left the co-op in a hurry and a mess yet he is rumoured to have collected a golden-parachute payment of about $8 million. Who wouldn’t want a job like that? • How low can it go: strong wool prices continue to tumble. It now costs more to harvest one kilo of crossbred wool than grow it. Ag Minister Damien O’Connor has set up yet another talking heads group to look at improving prices. However, one suspects the Wool Working Group will be as ineffective and impotent at doing any-
thing about wool prices as his Primary Sector Council is in setting the agenda in the ag sector. Thankfully fine wool prices are looking good and the future for this fibre looks bright. • Bloody bogan awards: those laggard farmers who still pollute waterways and treat their animals and staff badly. They destroy the reputational capital of NZ Inc.
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Mycoplasma bovis : December update The Mycoplasma bovis team is continuing to test properties across New Zealand, as part of the government and sector’s plan to eradicate the disease.
Spring bulk milk testing – preliminary results We are three-quarters of the way through the fifth round of testing, and half-way through the final round of the spring bulk milk testing surveillance programme. Only three properties have had a positive result detected and all of them are connected to other infected properties through tracing.
Dairy properties tested
Calf rearers survey – initial results 112 calf rearing properties out of 153 properties have had their tests completed as part of the survey. No properties have tested positive so far. These results are a positive sign that nothing has been found outside of our known networks, indicating that the disease is not endemic to New Zealand.
Top tips for farmers from farmers directly involved in the Mycoplasma bovis response These have been developed with input from farmers, industry representatives and officials. • Put your compensation claims in as quickly as possible with full documentation. You can get help from the DairyNZ and Beef + Lamb New Zealand Compensation Assistance Team (DBCAT) for help with your claim on 0800 322 281.
• Reach out to friends and family and/or the Rural Support Trust for support. If your farm is caught up in a biosecurity response, it’s normal to find this stressful. Nobody should be expected to handle this alone. There is support to help you with the process.
For more information on Mycoplasma bovis, visit www.biosecurity.govt.nz/bovis
3 Properties infected
• Update and maintain accurate NAIT records, and give MPI response officials all of the information they ask for. Poor records can really slow down getting your property through the testing process and movement controls lifted. You can find these and other top tips for farmers on our website. You have until December 19th 2018 to give feedback on proposed changes to the NAIT Act and regulations. Further information, including the consultation document and submission form, is available on the MPI website: biosecurity.govt.nz/NAITconsultation
Christmas operating details Over the Christmas period, the Mycoplasma bovis directorate will be operating close to business as usual. If you need to contact anyone, please call 0800 008 333. Please note that our offices will be closed on the statutory days.
We wish you and your family a safe and fun Christmas, and a happy New Year.
RURAL NEWS // DECEMBER 18, 2018
MPI’s new boss hits the ground running He’s only been in the job a month or so, but already Ray Smith — MPI’s new director general – has been on the road meeting staff and stakeholders and rapidly coming to grips with his new role. Reporter Peter Burke spoke with Smith about his plans for the future and how he will manage the department. FIRST AND foremost, Ray Smith is a people person. His previous roles heading the Department of Social Welfare and, more recently, the Department of Corrections, have seen him deal with challenging types. As head of Corrections, Smith led 9000 staff, and while MPI has a smaller staff, its role is wider and impacts the lives of all New Zealanders. He says the primary sector is the backbone of the economy and unless it’s successful NZ has a bleak future. The other difference, Smith says, is that MPI is much more externally focused than the other departments he’s worked for. “Farmers and other people depend on what we do to help them in difficult situations and M.bovis has been incredibly hard for farmers to get their heads around,” he told Rural News. “A lot of them are hurting... especially those who have had to depopulate their farms and restock.” Smith says his top priority is making sure the eradication of M.bovis succeeds and he’ll be dedicating much of his time to supporting farmers affected by the disease. He says MPI’s role in biosecurity is of paramount importance and getting visitors to NZ to declare fruit or vegetables is a priority for him and the department. While MPI has a large regulatory role within NZ, more resources of the department are
MPI’s new director general Ray Smith.
now being directed offshore to biosecurity and to trade-related issues. “We have staff in 13 countries now and I can see that expanding as trade agreements expand. We need to work closely with industry to make sure the products people receive overseas can be traced to show they come from an environment where we care about ensur-
ing our products are safe,” he explains. “We need to show consumers that when they buy something from NZ they can trust it and believe in it. “We also want to generate more wealth from our primary products.” Smith says as part of this the regulations that MPI administers
are important in stipulating rules people must comply with. “MPI has a critical role to make sure people conform to the standards we all expect and, yes, there will always be more regulation.” Smith says the aim is to get people to lift their performance to the highest level possible which will lead to more high value products being produced.
WHO’S RAY SMITH? ALTHOUGH RAY Smith has spent all his working life until now in social welfare and corrections, he has strong personal and family links to the land. He was born in Pukekohe and as a five-year-old at school he would look out the window and see topdressing aircraft spraying nearby crops. His father was a stock agent who bought pigs. The family moved to Hawera where Craig Norgate -- the first head of Fonterra -- was a personal friend, classmate and in the football team Smith captained. He loved Taranaki and enjoyed the opportunities it offered. Smith was the top junior tennis player in the province and he developed leadership skills at an early age. He also spent time on his older brother’s dairy farm in Waikato. “As an 11-year-old I’d be sent up to Te Awamutu to his farm for the holidays. I’d spend summer on one of the farms he was working on and it was great fun haymaking, learning to drive tractors and all the things you learn to do on a farm,” Smith said. “He is still farming, I have a connection into that world and I think most Kiwis growing up in NZ in my time probably had the opportunity for some connections with that world.” As head of Corrections, Smith had a big interest in farming because that department ran prison farms. When he left school at 17, Smith started at the Department of Social Welfare on the ground floor, but quickly rose to the top of the agency. He says by starting at the bottom and working in difficult places such as South Auckland, he learned what life is like for front-line staff. His mantra has been to empower people to make decisions, but as manager he has always ensured that their workplace is safe. “When working in South Auckland, I visited thousands of homes and got bitten by a few dogs. I learnt a lot about the way people lived, their lives and what they didn’t have in their lives, and I thought how fortunate I was.” Smith wants to use his leadership skills to good effect in MPI and help staff to achieve their potential. In the last few weeks, he has been running open forum for head office staff and getting out into the field. “I’m loving the job and the challenges it offers. I have been with my staff at the terminal at Auckland International airport and I admire those people hugely because they work in very cramped conditions. “I have been out on the wharf as 1800 people disembarked from a cruise ship, talked with farmers in Invercargill and also been to the Canterbury A&P Show. I have also been to MPI’s laboratories in Upper Hutt and Auckland.” Smith says he hopes his skills as a leader will ensure that the good work of MPI and its staff continue.
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RURAL NEWS // DECEMBER 18, 2018
No easy fix-it for Brexit PETER BURKE firstname.lastname@example.org
“IT’S LIKE watching your parents go mad at the Mad Hatter’s Tea party.” That’s how commentators were last week describing the fiasco in Britain, as Prime Minister Theresa May realised she didn’t have the support to push her Brexit proposal through parliament and postponed the vote. May now has just three weeks to come up with another plan or face the prospect of the UK leaving the EU without a deal. This scenario, according to NZ special agricultural trade envoy Mike Petersen – just back from Europe – is knife-edge stuff. He says few people in either the EU or Britain relish the prospect of a no-deal, describing it the worst case scenario. Petersen says those in favour of Brexit have yet to put forward any credible alternative, which is adding to the concerns. During his recent trip to Europe, Petersen was putting out the message that Brexit is not just a problem for Britain and the 27 remaining nations in the EU. “I don’t think they are focused about third-party
NZ special agricultural trade envoy Mike Petersen.
countries like NZ and the risks and challenges we are also facing,” he told Rural News. “Our future hinges on the future relationship that’s going to be agreed between the UK and EU 27 and there are numbers of scenarios around that. But regardless of which one transpires there are risks for NZ.” Petersen says the impacts of Brexit will be
felt by all components of the NZ primary sector in terms of access. There are not only problems for third countries, but also for EU countries that traditionally export to the UK. “What happens if Spain can no longer export tomatoes to the UK and what does that mean in the UK market for other vegetables?” Petersen says about
70% of the tomatoes consumed in the UK come from Spain, so will those tomatoes from Spain end up going to other parts of the world? “Another example is cheese,” he adds. “About 70% of the cheddar cheese in UK supermarkets comes from Ireland. So what’s going to happen to these value chains if there is disruption on the March 29,
2019, the day that Britain is officially due to leave the EU?” he asks. Petersen believes a major sticking point in the Brexit negotiations – the retention of an open border between Northern Ireland and the Republic of Ireland – is to a degree taken care of under Theresa May’s latest proposal. But he says a no-deal exit could kill off such an agreement and the Irish are worried. Petersen says despite all the woes of Brexit, he believes Europe is stronger and contends that few if any other countries in the 27 are likely to leave the customs union. But he has concerns about Britain itself. “I am worried about the UK irrespective of the decisions,” he told Rural News. “I think the UK is going to be in for a pretty tough 10 years and I think that is going to be challenging for NZ exporters and they need to reduce their risk into the UK.” As for the EU 27, Petersen says they will carry on largely regardless. But there will be big changes in displacement of product right across Europe, which will affect NZ companies.
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Irish ‘sad’ to see UK leave EU A SENIOR official in the Republic of Ireland (Eire) Ministry of Foreign Affairs and Trade says his country is puzzled and saddened by Britain’s decision to leave the EU. Eamonn McKee, visiting NZ briefly, recently told an Irish business network that there is little Eire can do except hope for the best and try to get the best deal possible in the circumstances. McKee says with the vote in the British parliament postponed, Ireland doesn’t know what may come next. He says Eire would much prefer an orderly exit as it provides some certainty. If Britain crashes out of the EU it raises the issue of what will happen to the border between Northern Ireland and the Republic of Ireland – a complex problem which has already caused much angst there. It’s not only the border McKee says, it’s also the transport of Irish goods to Europe. “About 60% of trucks from Ireland go through Britain to deliver in the EU, but also drop stuff off in Britain,” he told Rural News. “We refer to it as the land bridge because the easiest way to get Irish products to the EU is through Britain. “But if Britain crashes out you could have chaos at the ports and that is a major issue. It would mean that our trucks would have to go by sea to Europe which is longer and more expensive.” McKee says Eire will miss having the UK as a member of the EU. He says they have been a good partner and were pro-business. He says the UK was very influential within the EU and carved out a good relationship with Brussels. “We are going to miss them.” McKee says the British market is very important to Eire and many people in Britain would not distinguish between Irish and British products. “While there is a lot of anxiety about what might happen I suspect most of the trade will continue uninterrupted but maybe with some tariffs. People will try to keep the status quo as much as possible.” As a result of Britain leaving the EU, McKee believes Eire will have to create new alliances within the EU to compensate for the absence of the UK. “So we are finding partners like the Danes, Dutch, Belgians and other countries with a probusiness agenda.” – Peter Burke
RURAL NEWS // DECEMBER 18, 2018
A threat to hort exports PETER BURKE firstname.lastname@example.org
WHILE HORTICULTURAL exports rise in value, there are concerns that this growth is being impeded by a mix of tariff and non-tariff barriers. The state of the sector and the changes occurring there are reviewed in detail in the two-yearly report of the Horticultural Export Authority (HEA). Chief executive Simon Hegarty says the industry has maintained momentum despite two challenging years in international trade and at home, notably because of the weather. The 233-page report analyses in detail the state of every horticultural crop, from the big export earners kiwifruit, apples, potatoes, onions and avocados, right down to nashi pears and tamarilloes. It lists the number of growers, pack-houses and growing areas and shows sales trends over the last six years for each crop. Hegarty says the data is designed to help people
who are planning to export. “It’s hugely beneficial as a reference to how their sector and other sectors are progressing and the challenges they are facing in certain markets,” he told Rural News. “It’s a snapshot in time of the sector; there is a lot of information and detail and it’s a great starting point for people doing market research.” Hegarty has talked to exporters about this and the value they get out of it. He says while people can build up knowledge over time, this document has a lot of valuable information in one place that it is easily accessible. The information is only available to people who belong to organisations that fund HEA. The report notes that the European Union remains the largest market for NZ horticultural exports followed by China, Japan and Australia. China is the big mover: in 2010, horticultural exports to China were a mere $80 million; today they are nearly
$600m. Kiwifruit remains the biggest single export earner, its value having risen by 11% on just a 1% increase in volume. Potatoes are a big mover, having outrun onions to claim third spot as an export earner. “Potato exports -fresh and frozen – are
mainly French fries; frozen goods have grown a lot,” says Hegarty. “The reputation of NZ’s quality product is being picked up by our customers offshore and that’s positive for the potato sector.” But higher export value and volume will only continue if tariffs are lifted through free trade
agreements, Hegarty says. He points to the value to NZ of the CTPP, which will see tariffs quashed in the key Japanese market, while in Korea our hort exports are now benefitting from tariffs having been lifted. But Hegarty says nontariff barriers continue to stifle expansion.
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RURAL NEWS // DECEMBER 18, 2018
Fewer herds, but more milk SUDESH KISSUN email@example.com
NEW ZELAND’s dairy sector is evolving, with the latest data showing a shift to fewer herds and a greater focus on their performance. According to the New Zealand Dairy Statistics 2017-18 report, published by DairyNZ and LIC, there were 11,590 dairy herds last season – 158
fewer than the previous season. This was the third year of decreasing herd numbers, but the average herd size increased by 17 cows to 431. The total 201718 cow population was 4.99 million, an increase of 2.7% from the previous season but still below the peak population of at least 5.01m cows in the 2014-15 season. DairyNZ senior econ-
omist Matthew Newman says despite last year’s challenging spring weather, milk production was only slightly decreased. Dairy companies processed 20.7 billion litres of milk last season, containing 1.84b kgMS, down 0.6% on the previous season. “Farmers benefitted from favourable late summer and autumn con-
“This movement from sharemilking to contract milking is driven by people wanting the greater certainty of milk income that contract milking provides,” says Newman. The report also showed a surge in the uptake of herd improvement services, as farmers seek higher performing and more efficient dairy cows through the use of
ditions so a number of the regions were able to milk their herds longer into the new year, which supported reasonable production for the year,” says Newman. Sharemilking arrangements were down by 44 herds from the previous season. Herds under sharemilking arrangements have declined from 36% in 2008-09 to 27% of herds in 2017-18.
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herd testing and artificial breeding (AB). A total of 71.1% NZ herds were herd tested (8242 herds), up from 64.3% (7557) in 2016-17. Total cows herd tested was 3.62m, up from 3.21m last season and close to the record level of 3.65m in 2014-15. LIC general manager NZ markets Malcolm Ellis says this reflects a shift to precision agriculture, as farmers work to optimise their systems. “The days of significant cow growth may be over and we know that farmers are more focused on productivity and efficiency. Without doubt farmers are wanting to
know more about the production status of the cows they milk, gain more confidence about their parentage and certainly invest appropriately to breed superior livestock into the future.” While the number of cows mated to AB had a nominal increase of 1.01%, the number of yearlings mated to AB jumped 17% on the previous season which Ellis says reflects farmers identifying every opportunity to maximise the rate of genetic gain. Genetic gain is worth upwards of $200m to the NZ dairy sector each year. @rural_news facebook.com/ruralnews
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RURAL NEWS // DECEMBER 18, 2018
Ex-director suggests Fonterra suspends dividends SUDESH KISSUN email@example.com
A FORMER Fonterra director says the co-op could suspend dividends to shore up its balance sheet rather than sell key assets. Greg Gent says farmers and investors would understand if the co-op suspended dividends to get its books in better shape. And it could suspend dividends and sell some assets that don’t align with its new strategy. However, he wants to see the co-op’s strategy before decisions are made on selling assets. “The co-op must first have a strategy and then sell assets that don’t corelate to the strategy,” he told Rural News. “I haven’t seen a strategy, but I’m not on the board any more.” Fonterra’s new chief executive Miles Hurrell is hoping to reduce the coop’s debt by $800m this year; asset sales are to
help achieve this target. The co-op is looking at offloading its disastrous investment in Chinese food company Beingmate and the sale of its iconic ice cream brand Tip Top. Earlier this month, Fonterra chairman John Monaghan announced it was looking at selling Tip Top. The co-op has appointed FNZC as an external advisor to work with as it considers a range of options. “We want to see Tip Top remain a New Zealand based business and this is being factored into our options. “While performing well, Tip Top is our only ice cream business and has reached maturity as an investment for us. To take it to its next phase successfully will require a level of investment beyond what we are willing to make.” But Fonterra’s announcement triggered angry response on social media. A petition was
STOCK THEFT LAWS TOUGHENED THE GOVERNMENT last week introduced a supplementary order paper (SOP) on the Crimes Amendment Bill to crack down on livestock rustling. Federated Farmers estimates the cost of livestock theft to the farming community at over $120 million every year. “The Coalition Government has listened to farmers and rural communities,” Justice Minister Andrew Little said. “Farmers have told us about the toll the scourge of livestock rustling is having on their livelihoods and quality of life. That’s why we’re taking action to address livestock rustling before Christmas.” The SOP proposes two new offences be added to the Crimes Act. The offences are: • Theft of livestock or other animal, carrying a maximum penalty of seven years imprisonment. • Unlawful entry to land used for agricultural purposes, where the offender intends to steal livestock or act unlawfully against specified things, such as buildings or machinery, on that land. That offence carries up to 10 years imprisonment. Little acknowledged the primary production committee –particularly National’s Ian McKelvie and Labour’s Kieran McAnulty – for their bipartisan assistance in addressing the issue. Federated Farmers rural security spokesman Miles Anderson says the introduction of a SOP on the Crimes Amendment Bill is a win for all farmers. “The two new offences of theft of livestock or other animal, and unlawful entry to land used for agricultural purposes, will give power back to farmers, the police and the judiciary in dealing with offenders,” he says.
launched by Taranaki farmer Matthew Herbert to block the sale of Tip Top; over 5000 people have signed it online so far. The petiton says Fonterra is looking at selling its Tip Top ice cream
farmers and people who live in our cities. Sign the petition and help farmers save Tip Top from the chopping block! Lets tell Fonterra to hold onto Tip Top and keep our delicious ice cream going from farm to freezer.”
brand. “Kiwi’s eat more ice cream per person than any other country on earth,” it says. “Tip Top ice cream is one of the biggest links between fresh New Zealand milk from Fonterra
Greg Gent believes Fonterra should look at suspending dividend payments rather than selling assets.
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RURAL NEWS // DECEMBER 18, 2018
Westland ‘soft loan’ raises eyebrows PAM TIPA firstname.lastname@example.org
TRADE EXPERT Stephen Jacobi would be “very surprised” if the Government had not ensured its $9.9 million loan to Westland Milk – via the Provincial Growth Fund – comes within our World Trade Organisation com-
mitments. He says both the letter and the spirit of the law need to be considered with trade deals. Jacobi didn’t have any details on the loan. “It would be concerning if this were to undermine New Zealand’s long-standing advocacy for the elimination of
trade-distorting subsidies and domestic support,” Jacobi, the executive director of the NZ International Business Forum, told Rural News. Commitment to this elimination was recently reaffirmed at a meeting of the Cairns Group involving NZ and 18 other countries on Novem-
ber 30. The low-interest loan will be made from the Provincial Growth Fund. It has come under attack by Opposition MPs. National’s economic and regional development spokesperson Paul Goldsmith says the minister in charge of the Provincial Growth Fund, Shane
Jones, couldn’t tell Parliament what terms he had in mind when he undercut commercial lenders to provide debt funding for a new Westland processing plant. “I wouldn’t blame any business like Westland Milk for accepting a cheap loan from a secure lender,” said Goldsmith.
Trade expert Stephen Jacobi.
“But that’s no excuse for sloppy process when it comes to taxpayer money.” Regional Economic Development Minister Shane Jones said the full terms of the loan were “yet to be settled” but it would be for a longer term than its existing private sector bank lenders would offer. “That would be of interest to Westland’s rivals, particularly for milk pools in Canterbury, and it underlines why such proposals need rigorous scrutiny,” said Goldsmith. Westland welcomed the loan to help build a $22m plant at Hokitika. Its specifically designed facilities for ‘made-toorder’ segregation of milk types will have wide-ranging benefits for the West Coast region, Westland says. The plant will allow
Westland to separately process (segregate) various types of special quality milks into high value products. Chief executive Toni Brendish says segregated production of specialty milks is a key component of Westland’s five-year strategy. “Westland needs to reduce its dependence on bulk dairy commodities with their volatile pricing cycles,” says Brendish. “We’ll do this by expanding our capacity to produce high value products, differentiated by the special qualities of the milk used to make them. This will include A2 milk and our new Ten Star Premium Standard milk. There is also potential, in later stages of the project, for other segregated products such as grassfed, pure Jersey, goat or sheep milk, or even plantbased nutrition.”
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WESTLAND’S CAPITAL structure review has attracted a number of proposals from interested parties. At least 25 parties engaged with Westland on the process, shareholders heard at the annual meeting recently. Chairman Pete Morrison told shareholders that on the strength of the indicative proposals, the board will go to the next step of the review process. It intends to move forward with a selected number of parties into a detailed due diligence and final proposal process. The next update to shareholders will be in March. The review process is strictly confidential and no further information will be provided until then. Meanwhile Pat McEvedy, Canterbury, was elected to the board. He has farmed as a sole trader and in partnerships since 1982. He’s had business interests on the West Coast since 2008 and been with Westland since 2010 through his role as a shareholder of Shooting Creek Dairy, south of Hokitika.
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RURAL NEWS // DECEMBER 18, 2018
FTA with UK could be a boomer PAM TIPA email@example.com
DYNAMIC GAINS in both the New Zealand and United Kingdom economies could be made if some trade barriers were freed up – particularly in the agri-feed area, says NZ International Business Forum chair
Malcolm Bailey. The two economies could use a free trade agreement to build new global value chains serving markets in Asia and North America, he says. The NZ International Business Forum (NZIBF) has released a discussion paper on the potential for a future free trade agree-
ment (FTA) with the UK as it prepares to leave the European Union. “The UK is one of our most steadfast and likeminded trade friends,” says Bailey. “We have deep shared history, culture and people-to-people links. Despite the huge shift in our trade to the Asia-Pacific, the UK
remains our fifth-largest trading partner, fourthbiggest agri-food export destination and fifth-biggest source of investment.” The NZIBF report was prepared by associate director Stephanie Honey on the basis of interviews with a wide range of business and other con-
tacts over the last three months. The preparation of the NZIBF report was supported by BusinessNZ, Beef + Lamb NZ, Dairy Companies’ Association (DCANZ), Meat Industry Association, NZ Winegrowers and NZ Apples and Pears. Bailey notes that the UK is a key market for
NZIBF chair Malcolm Bailey.
many NZIBF members, especially for sheepmeat, wine, apples and honey, and with huge potential for dairy and beef. The UK and NZ have both signalled an interest in an FTA. NZ was one of only four new potential partners identified by the UK earlier this year. The NZ Government has launched a consultation process for stakeholders. Highlights from the report were presented recently by NZIBF executive director Stephen Jacobi to a business audience brought together by NZIBF member Russell McVeagh and the British
NZ Business Association. He says a future NZ-UK FTA could be a building block in eventual UK membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). “Perhaps one day it might even form part of a Commonwealthwide trade arrangement. That’s why we need this deal to be as ambitious as possible.” The discussion paper says interviews with NZ primary exporter stakeholders suggest that they are watching Brexit closely.
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GOVERNMENT DISSATISFACTION with the business case for Lincoln University and AgResearch’s much-anticipated $206 million joint facility building has forced more delay to the project. In a joint statement, the two partners say the Government says more time is required to assess the current business case for construction of the facility. “This will mean a significant delay in the building programme, and the implications are currently being worked through by the partner organisations.” However, they say getting the project moving remains a top priority. “We look forward to advancing our partnership and the significant benefits it will deliver for New Zealand’s agricultural and land-based sectors, in the new year.” The 27,000sq.m building is supposed to embody the Lincoln Hub concept, aimed at joint R&D for farming. It is expected to house 700 agricultural science staff from Lincoln University, AgResearch and DairyNZ, with further tenants envisaged in the future. However, apart from some site works, the building site has remained fenced off, overgrown and idle since a ground-breaking ceremony in August 2017. The main build was delayed by a decision in April 2018 to call for more quotes. It was then hoped to appoint a main contractor by the end of September, but that has not been confirmed. – Nigel Malthus
RURAL NEWS // DECEMBER 18, 2018
Extra production does not necessarily mean extra dollars firstname.lastname@example.org
EXTRA AND hidden cost of bringing in feed can often mean increased milk production does not correlate with increased operating profit, says Dr Jane Kay, DairyNZ research scientist. In fact sometimes producing the extra milk can cost money, she told a Northland Dairy Development Trust field day at Wellsford. “We know supplements equal more milk but does it equal more money? What we see from DairyBase is that if we increase the amount of supplementary feed coming into our system we don’t (necessarily) see an increase in profit; we see an increase in expenses,” she says. The cost of supplementary feed is 40c/kgMS for every extra tonne of DM/ cow. “A lot of people will say ‘I am paying $330/tonne for my palm kernel so that makes it 30c/kg of dry matter; I am going to get an 80g response to that; a $6 payout means I will get an extra 48c back for that. That is profitable – that is worth doing’. “But you must be really careful with those calculations.” The cost of getting that supplement onfarm and feeding it out, including tractor, trailer, labour, fuel, repairs and maintenance on equipment, also needs to be counted. “With any form of feeding supplement you’ve got associated costs. We also have hidden costs and an increase in both fixed costs and variable costs when you introduce supplements into the system.” Study done in Ireland using data from 3000 farms looked at what was
DairyNZ’s Dr Jane Kay.
spent on feed and the total cost of the farm business. “What they found is that the total expenses for the system increased by 1.53 times the cost of feed. For every euro they spent on their supplement or feed the total cost to the business increased by 1.53 euros.” They found a similar result here in New Zealand. Here, for every $1 spent on imported feed, expenses increased by $1.68 in Waikato and $1.53 in Canterbury. The UK measure was 1.62. “So for every $300 of palm kernel coming onto your farm, that could actually cost your business $450/t.” Kay says with increased production you need to ask whether you are making money from milk or milk from money? “Did the extra milk make us money or cost us money to make?” An example is a farm doing 150,000kgMS: their total costs are
LOOK AT THIS! ■■ ■■ ■■ ■■ ■■
Reduced expenses are associated with increased profit Production is not associated with profit Profit increases by $300/ha with every extra tDM/ha pasture and crop eaten Expenses increased by 1.5 times the cost of imported feed. Beware of averages: calculate the cost of extra milk on your farm.
$525,000, giving average costs of $3.50/ kgMS. Under one scenario, if they increase production by 125,000kgMS by better use of pasture, etc, their total costs increase to $650,000, the average cost of production becomes $3.71/ kgMS but the cost of the extra milk is $5/kgMS. They may still be making money. But if the same farm brought in supplements and didn’t watch costs, their total costs could increase to $725,000 for the same increase in production. Their average cost would be $4.14/kgMS.
“Some people are quite happy with that … they believe they are still making money,” says Kay. “But it has cost $200,000 to make the extra milk. So the cost of the extra milk is $8/kgMS. Unless the payout is more than $8/kgMS they lost money making the extra milk, she says. “We might still have a profitable business but we might have been better off not spending the extra money to make the extra milk. That extra production on our farm has decreased our profitability.
“You can get lost in the averages and you can think that is okay, we are still making money; but you could have made more money if you hadn’t made that extra milk.” She cites the case of a South Waikato farm. The farmer now does just under $3/kgMS cost of production. When they looked over seven years his average cost of production was $4/kgMS. But the marginal milk he was making was costing him an average $5.60/kgMS. One year he had an average cost of production of $5/kgMS but the marginal milk was costing him $10.75/kgMS to make. Another year his average cost was $5.70/kgMS and in May that year the extra milk was costing him $17/kgMS. He was doing a lot of production but sacrificing profitability for it, says Kay. He says it has been a good turnaround: he is doing less production than four or five years ago but the money is coming in. Kay was asked what her advice was for those who had already spent money on a feed pad or wagon. She says the farmer in question now used the feed pad as a stand-off pad and had sold his wagon. You need to ask the questions before spending on capital items. “But if you do have it you are not going to fix a bad decision by making more and more bad decisions. “I have talked to a lot of farmers who have that infrastructure there and they don’t use it. I think [the idea is to be] able to make those decisions and being able to have a system where you take supplement out and put it in when you need to.” @rural_news facebook.com/ruralnews
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RURAL NEWS // DECEMBER 18, 2018
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farmers to connect Content supplied by Rabobank – Grow with the bank farmers for farmers with by worldwide , founded 12630
18 MARKETS & TRENDS
global agribusiness research analysts sharing market outlooks
World dairy production slows THE 2018 theme of slowing Big 7 milk production growth has continued to creep into the final months of the year. Q3 2018 growth sunk to just 0.8% YOY and indicative Q4 2018 numbers show a similar modest growth rate. Lingering effects from Mother Nature has severely impacted Australian milk flows and
stalled European growth with feed quality and quantity impacted across the second half of 2018. The US looks set see the lowest year-on-year growth since 2013. Yet other corners of the dairy exporting globe are testing this trend. Brazil has moved into growth territory during Q3 2018: a result of more moderate feed costs and
recent months has not yet been fully translated into the farmgate prices. As a result we expect the average EU farmgate price to decline in the remaining months of 2018 and the opening months of 2019.
profitable milk prices. Argentinian producers have overcome inflated milk production costs and continue to make a recovery from the low volumes delivered over the prior two years. But the star performer remains New Zealand, setting a new record for peak milk flows in the month of October. Still, estimated flows for the Big 7 during Q4 2018 are for just 0.6% YOY – the lowest since 2016 (see Figure 1).
US THE US is on pace to increase milk production
EU THE LINGERING effect of the drought in North-Western Europe and high comparable numbers from the prior year pulled the EU milk production curve into a decline in September (-0.2% YOY) – effectively ending 18 months of
consecutive growth. As a result, Q3 2018 milk production growth finished at just +0.2% YOY, with year-to-date milk production slowing down to just +1.2% YOY (see Figure 3). EU farmgate milk prices have improved
and are averaging EUR 35.71/100kg across Europe in October. However, the current farmgate price is still EUR 1.82/100kg lower compared to the same month last year. Moreover, the weakening of most commodity prices over the most
by just 1% in 2018, the lowest year-overyear growth since 2013. October milk production totalled 17.9bn pounds, up 0.8% from a year ago. Year-to-date culling through October totalled 2.6m head, up 5.1% vs. last year. However, dairy cow slaughter soared year on year by 11% in October, foreshadowing
usiness ysts et outlooks
Rabobank supports clients from farm to fork in
RURAL NEWS // DECEMBER 18, 2018
MARKETS & TRENDS 19
Content supplied by Rabobank – Grow with the bank founded by farmers for farmers
an even smaller US dairy herd by year-end. (see Figure 4). The US dairy herd peaked in May at 9.404m head but has decreased consistently to 9.365m head in October, down 30,000 head from last year.
New Zealand EARLY SEASON milk production began with a hiss and a roar and continued its momentum over the months of October and November 2018. The dry weather risks emerging last quarterly report have been allayed with extremely volatile weather for the last month of spring. The heavy rainfall in parts of both islands spurring on grass growth. It’s little wonder that milk flows have continued to march along, culminating in a strong seasonal peak period. October milk
production reached a new record +6% on a milksolids basis to 271m kgMS, just pipping the prior record set in 2014. Season-to-date (October) collections are up by 6% (see Figure 6). Rabobank’s full year season milk production forecast through to Q2 2019 has been lifted to 4.5% effectively underwritten by the favourable seasonal conditions to date.
The counter to strong milk production has been sliding Oceania commodity prices: a theme evident across much of the season. Fonterra has revised lower its forecast range for the 2018/19 season to NZD 6.00-6.30/kgMS. Rabobank are forecasting NZD 6.25/kgMS.
Australia AUSTRALIAN MILK production has
contracted by 4% in the season-to-date (to October) and this rate of decline will accelerate further into Q1 2019. A period of sustained higher feed and fodder costs, along with no major improvement in farmgate milk prices, has put farmer margins under severe pressure. To mitigate rising costs, culling activity has escalated since the start of the season as farmers look to lower feed bills. In the three months between July and September, dairy cow cull rates jumped 15% versus the same period last year. Dairy farmers may look to make further herd reductions during the summer months should feed shortages worsen. October and early November did bring some much needed rainfall across most dairying regions. However, this follows the driest September on record. The challenging
taking the milk pool back below 9bn litres for the first time since 1996/97.
conditions continue to weigh heavily on farmer confidence. According to the Rabobank’s latest Rural Confidence Survey, sentiment amongst dairy farmers is the weakest amongst all the main agricultural commodity groups. Not surprisingly, Rabobank has trimmed its expectations for milk production for Australia. National production for the 2018/19 season will fall by as much as 4%;
China AVERAGE MILK prices in China improved 3.5% during most of Q4 2018 compared to the prior quarter and were up just 1% year-on-year, largely reflecting a seasonal recovery. But prices in US dollarterms were up by just 1.5% compared to the prior quarter, due to further depreciation of
the renminbi vs. the US dollar since Q3 2018. International WMP prices are at attractive levels for importers, resulting in a higher discount of 20% compared to a seasonally higher domestic milk prices, from 10% in 2017 and much of 2018. Demand for dairy products in China continues to grow. Rabobank is maintaining its milk production forecast for 2018 at 2% YOY, supported by a strong year-on-year recovery in Q3 2018 due to better preparation on large farms (early investments in cooling). For 2019, we are trimming production growth to 1% YOY (from 1.6% previously). • Keep up-to-date with the latest food & agribusiness insights. Tune into RaboResearch Food & Agribusiness Australia & NZ podcast channel. @rural_news facebook.com/ruralnews
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RURAL NEWS // DECEMBER 18, 2018
20 OPINION EDITORIAL
Dangerous games WHAT’S GOING on at Landcorp? It appears the state-owned farmer has taken a dangerous lurch into the political world with its recent actions. An Official Information Act (OIA) request has revealed that the Government-owned and controlled farmer lodged a late submission to the Tax Working Group (TWG), advocating for taxes on water and nitrogen fertiliser and saying it was “not opposed” to a capital gains tax. This pro-tax stance is directly at odds with the majority view of the farming sector and raises questions about why the state farmer would stick its beak into highly political issues. That a government body should be seen as promoting and advocating for such overt, politically charged tax policies is a big enough concern. However, to also learn that Landcorp lodged its submission to the TWG more than a month after applications closed gives the impression it was encouraged to do so by its political masters. This should be a major concern for all taxpayers that the long-held tenet of an apolitical public service is now being called into question. One also would have to ask if the Minister responsible for Landcorp – Shane Jones – is either asleep at the wheel or complicit in the SOE’s irresponsible and dangerous politicking. The state farmer must not only be seen as apolitical, but also perceived as being apolitical. At present, perception and reality are opposite. And Landcorp’s actions have – unsurprisingly – attracted political fire. Current National Opposition members and former agriculture ministers Nathan Guy and David Carter have heavily criticised its behavior. Carter has accused the state farmer of having been encouraged ‘behind the scenes’ by its political masters to present a protax opinion from the farming sector to the TWG. The TWG submission comes on top of the state farmer’s highly questionable appointment of a number of high-profile environmental activists to advisory roles in its midst. Questions are now also being raised about whether these appointments are just a sop to the green-leaning politicians occupying the Treasury benches. Former AgResearch and Scion (forestry) boss Warren Parker has just been appointed chair of Landcorp. As a former high-level public servant, Dr Parker will be well aware of the sacrosanctity of an apolitical stance needed at Landcorp. He needs to pull the state farmer and its management back into line quick-smart. If he fails to do so, Landcorp will face the wrath of avenging politicians hell-bent on revenge when the government changes, as it will at some time.
RURALNEWS TO ALL FARMERS, FOR ALL FARMERS
HEAD OFFICE POSTAL ADDRESS: PO Box 331100, Takapuna, Auckland 0740 PUBLISHER: Brian Hight ......................................... Ph 09 307 0399 GENERAL MANAGER: Adam Fricker ....................................... Ph 09 913 9632 CONSULTING EDITOR: David Anderson .................................. Ph 09 307 0399 firstname.lastname@example.org
“Yeah, but then I thought – what if we’re wrong and he does?!”
Want to share your opinion or gossip with the Hound? Send your emails to: email@example.com
THE HOUND Out of control?
Top of the list?
YOUR OLD mate reckons the state farmer formerly known as Landcorp – but rechristened with the far more politically correct te reo moniker Pamu Farms -- is fast becoming a dangerous political advocate. This old mutt reckons Landcorp’s behaviour seriously threatens its supposed apolitical stance. It has already appointed several leftleaning, anti-farming types to its management and advisory groups. And now it has been caught out providing a secret submission to the Tax Working Group advocating taxes on fertiliser and water use and supporting a capital gains tax. The Government recently appointed former Forestry Service and Landcare boss Warren Parker as its new chair. He needs to pull Pamu Farms into line quickly before any more damage is done to the company’s apolitical reputation.
MEANWHILE, THE Hound hears rumours that Landcorp’s current chief executive Steven Carden has designs on a political future – as a Labour MP. Your old mate can understand why Labour would want Carden on its ticket as the party is very light on people with any agri experience in its ranks, and the current ag minister Damien O’Connor is due to be on the pension soon. Your canine crusader believes Carden is welcome to throw his hat into the political ring, but he should not be using his position running a state entity to enhance his chances by having it kow-tow to the current government’s political philosophy. Nor should Carden be using taxpayer funds (Landcorp has none) to appoint environmental agitators to cushy advisory roles at the SOE.
SPEAKING OF anti-farming types, the Hound notes that two of farming’s biggest critics recently joined forces to do some good, old-fashioned, pre-Christmas scaremongering. Fish & Game [Bitch & Complain] and Dr Mike [No] Joy teamed up to carry out what they described as a ‘citizen science experiment’ (which translates to having no credible scientific basis) on Canterbury drinking water sources and concluded that “contaminated drinking water may be increasing the risk of bowel cancer for some Cantabrians”. However, Environment Canterbury questioned the ‘study’s’ figures, with chief scientist Dr Tim Davie saying there was “quite a lot missing from a proper analysis and some pretty poor understanding”. Your old mate reckons it is no surprise the F&G would grab dodgy research to continue its anti-farming campaign.
THIS OLD mutt had to giggle at the level of ignorance of animal rights activists in the UK who have been ridiculed for demanding the name of the Dorset village of Wool be changed to ‘Vegan Wool’ to promote kindness to sheep. However, residents of the 1000-year-old village near Dorchester took to social media to ridicule the animal charity’s claim that the name Wool “promotes cruelty to sheep”. It seems the do-gooders at Peta were unaware that the village’s name actually comes from the ancient word ‘welle’, meaning well, or water spring.
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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 // DECEMBER 18, 2018
It’s time to look at soil health HANS EERENS
WE HAVE known for many years the importance of frugality with our natural resources, especially in respect of climate change and ever-increasing extreme weather. However, spare a thought for soil -- arguably our most underappreciated natural resource. Globally, 95% of the food we consume comes from the earth. Soil serves as the earth’s largest natural water filter helping supply the world with fresh, clean water. Additionally, one quarter of the world’s biodiversity -- including millions of microbes which are key to the success of today’s antibiotics -- are found in soil. Yet despite all this our soil is being destroyed at a rapid rate. Continued erosion is central in degrading our soil. To create just 10cm of topsoil takes about 2000 years, but destroying it takes only moments. Erosion accounts for the loss of roughly 24 billion tonnes
of arable topsoil globally every year. In turn, our ability to produce cereals – wheat, rye, barley, oats and corn -- is severely impacted. Annually, the world’s cereal production loss equates to 7.6 million tonnes. By 2050, we would have lost over 253m tonnes of cereals. This is not all. The global population shows no sign of slowing down. Our world population is now about 7.2b, but by 2050 it’s projected to reach almost 9.8b. And in New Zealand, according to the Ministry of Primary Industries, soil is a crucial building block for agriculture and other land-based primary industries. Erosion is the most critical issue affecting soil and the productivity of the land we use for farming, horticulture and forestry. In general, farmers have stayed on top of erosion by planting trees or using modern tools such as no-tillage systems and generally relying on glyphosate-based herbicides. No-tillage systems
protect soil moisture and the soil itself, both critical to maintain sustainable soil-based agricultural ecosystems. Without herbicides – especially glyphosate – farmers are likely to revert to traditional methods of soil preparation such as plough-
ing. This releases more carbon into the atmosphere and contributes to soil degradation. But although much needs doing redress the damage done so far, the good news is that a growing global movement and scientific advances are Hans Eerens helping to restore soil
health. Advances in genetic sequencing have identified a broad range of microbes that can be used to improve our soil’s health and fertility. We now have many means of understanding the complex nature of our soils’ ecosystem and biological
make-up. Technology is also contributing to more sustainable farming practices, optimising our use of fertiliser and removing pollutants to maximise our soil productivity while still preserving its health. Technological innovation, individual effort
and global education are all crucial to ensuring the future liveability of our planet. We need to treat each environmental resource with the same level of importance. • Dr Han Eerens is crop science national development manager, Bayer New Zealand.
Can you guess her weight?
SCIENTISTS ARE being invited to play a greater role as informers and moderators in the public forum of ideas and debates about the environment and agriculture. Speaking at a recent conference of soil scientists in Napier, Hawke’s Bay farmer and former AgResearch chairman Sam Robinson said that in a world where there is tension between farmers and the wider community, scientists could play a constructive role in explaining what is realistic and practical. Robinson said public opinion is too often swayed by populist one-liners and ill-informed slogans, sometimes misleading the public about the genuine efforts of farmers. “We live in a world where proper debate has been cleverly undermined or superseded by catchy slogans and purely emotional campaigns. So, it has never been more important for the science community to confront these false prophets in our society, and to find a way of communicating that resonates with people through the channels to which they are tuned.” Robinson said that since the industrial revolution society has become organised so that about 1% of the population produce the food for the other 99%. “On the whole, farmers are conscious of the demands of the 99%’s expectations, and have been quietly and diligently making improvements. He says scientists can also help raise awareness of the progress achieved over this time in environmental mitigation, e.g. the majority of farmers who have fenced off thousands of kilometres of streams and rivers.
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RURAL NEWS // DECEMBER 18, 2018
Changes coming for water regs
Government is looking to make significant changes to the way water is regulated and this will have a big impact on rural water schemes.
Local Government Minister Nanaia Mahuta outlines the Government’s moves to ensure safe drinking water and to reduce environmental damage from poorly treated wastewater. SAFE, CLEAN water is a birthright of every New Zealander. Wherever they live, Kiwi ratepayers and communities expect to be able to turn on the tap and drink the water
without fear of getting sick. They also want to be able to swim in our rivers and lakes, and enjoy beaches free from the worry of raw sewage seeping into the ocean. Funding is short to
achieve the above, and with aging infrastructure, population change, increased tourist numbers and the need to act because of climate change and natural events, the situation will
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worsen if we neglect it. The Havelock North campylobacter outbreak in 2016 made about 5500 people ill and contributed to the deaths of at least four people. Many others suffered long-term health effects as a result of it. An inquiry recommended a dedicated water regulator, and I have just announced an overhaul of water regulation. NZers deserve nothing less and we need a solution that builds on our own context rather than simply adopting models from overseas. Along with ministers David Parker (Environment) and David Clark (Health), I aim to take detailed proposals on the new regulatory arrangements to the Cabinet in June 2019. By then it will be clearer who will do what and how it will be done. But public safety must be our priority, as must reduced environmental damage and contamination from wastewater. In some places the notion of ‘mandatory residual treatment’ of water translates to many people as mandatory chlorination. That is one option, but there are others; no decisions have been made on mandatory chlorination. The emphasis must be on meeting the higher drinking water and environmental standards
Councils in several regions have voluntarily begun to look at the pros and cons of working together; these include in Hawkes Bay, Wellington, Waikato and in the northern South Island. and the shape and form of the regulator. The inquiry also suggested consolidating water service providers but we have not decided on this; it needs discussing with local government which owns most of the water assets and which is facing wide-ranging funding challenges and capability issues, particularly in rural and provincial regions. Councils in several regions have voluntarily begun to look at the pros and cons of working together; these include in Hawkes Bay, Wellington, Waikato and in the northern South Island. We want to see continued public ownership of water assets; contrary to speculation, privatisation is not on the agenda and the Government is mindful of the concerns expressed in many regions about this. Neither does this Government have an amalgamation agenda; we are determined to strengthen local governance, not undermine it. To this end, I aim to discuss further
with local government how we can work together more generally to meet the funding and capability issues. At issue are demographics, climate change and infrastructure, and also financing and debt constraints. What are we doing about it? We have instructed the Productivity Commission to review local government funding and financing arrangements. We have progressed an urban growth agenda to assist with better planning in high-growth areas. We are working with agencies to explore how central government can better support the relationship between Māori and local government. We are looking at how we can fund the infrastructure necessary for regional growth. And we have begun by taking concrete steps to ensure the safety and quality of water. • Hon Nanaia Mahuta is the Minister of Local Government @rural_news facebook.com/ruralnews
RURAL NEWS // DECEMBER 18, 2018
Farming systems will need to change NIGEL MALTHUS
FARMERS WILL have to look at their fundamental farming systems if they are to meet future nitrogen leaching limits, claims DairyNZ science manager Dave McCall. However, he says farmers might not have to move completely away from “the philosophies we all grew up with”. “But, we are going to have to dig deeper than just a few, small tweaks.” McCall was speaking at the launch of a new DairyNZ initiative, called Meeting a Sustainable Future. This aims to help farmers in Canterbury’s Hinds and Selwyn catchments to remain profitable, while meeting new nitrogen loss limits under the Canterbury Land & Water Regional Plan (LWRP). Under the LWRP, Selwyn farmers must reduce N losses by 30% by 2022 and in Hinds by 15% by 2025, 25% by 2030 and 36% by 2035. The project was launched at a wellattended field day on the Canlac Holdings farm at Dunsandel, in the Selwyn Catchment, run by sharemilker Tony Coltman. McCall told the gathering that he
was there to bring confidence that farmers can meet the new limits. He says the first thing to know was that the more nitrogen that comes onto a farm, the more will be leached out. The question was how much nitrogen was converted into product. “The poorest conversion is about 25% of the nitrogen that comes into the farm goes out the gate,” he explained. “In exceptional circumstances, you might get over 40-45% of that nitrogen going out the gate. So that’s what we’ve got to manage.” He says fertiliser and feed are the two biggest nitrogen inputs. “If everyone understands their nitrogen surplus, that’s a good start,” McCall explained. The programme aimed to recruit about 30 farmers, take the science to them and “co-develop” practical solutions. McCall added that science had some of the knowledge, but farmers also had a lot of knowledge. “We want to get you to understand what we understand, and then we want to work with you one-on-one to put what we know into the context of what you want to do on your farm.” In return for that one-on-one help,
YOU COULD BE RECEIVING A VERY UNWELCOME PRESENT THIS CHRISTMAS Make sure all dogs are dosed for sheep measles at least 48 hours before going on, or near, sheep pasture.
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those farmers would then pass their new knowledge on to others, McCall says. “There’s more than one way of skinning the cat here and one size doesn’t fit all. “So, we want to provide a bunch of examples that other farmers can come along to and listen to on days like this and decide ‘this is how I want to do it’.” McCall emphasised that there would not be one solution. He says talk of too high a stocking rate being the problem or a lower stocking rate being the answer “drives me nuts”. “Whether high or low, the solution is matching feed supply and demand in a way that doesn’t introduce too much nitrogen when you don’t want it.”
DairyNZ science manager David McCall speaks at the launch of the Meeting a Sustainable Future project on the Canlac Holdings farm at Dunsandel. RURAL NEWS GROUP
SHOWING HOW IT’S DONE CANLAC IS one of the benchmark farms used by the Lincoln University Dairy Farm to judge its performance. The property consistently ranks among the top 5% on operating profit – even while sharemilker Tony Coltman has managed to reduce N leaching significantly towards his 2022 target
with a variety of measures including revised irrigation and reduced fertiliser use. The farm has also taken part in the Forages for Reduced Nitrate Leaching project. Coltman has also introduced plantain in his pastures. Plantain’s lower nitrogen content means less nitrogen in
urine, and it has a diuretic effect which further dilutes it. The Meeting a Sustainable Future project is also supported by the Canterbury Dairy Leaders Group, whose chairman Alister Body said it would provide leadership for all farmers on this, a huge challenge.
RURAL NEWS // DECEMBER 18, 2018
Ideas coming thick and fast at network FARMERS ARE reported to have joined a Red Meat Profit Partnership (RMPP) Action Group at Rangiwahia to upskill the people in their businesses
and boost their profitability. Eight farm businesses in northern Manawatu have joined the RMPP Action Network to learn
from each other and various experts. Murray Curtis, who hosted the action group’s third meeting, welcomes the opportunity to “be
part of a group that gets you thinking and gives you ideas you can put into action on your farm”. He says the size of the
Rangiwahia Action Group is paying dividends. “It is not too big and everyone who is a member knows everyone else. The members of the
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group are all comfortable speaking about their farm businesses.” Murray’s wife Fiona Curtis is confident the learnings from the action group will mean the couple’s farm business is well-placed for the years ahead. “Nothing extra is yet in the bank, but it will give us skills for the future,” she says. Rabobank’s Byron Taylor helped connect people and get the group together initially. “I found people keen to be involved and helped steer them towards the group. I can see already that farmers are benefiting from the new ideas.” Taylor knows of other action groups nearby – two in Taihape, one in Ohakune and one in Hawera. “Farmers are talking about the gaps in their knowledge and talking to other members and using experts to help fill those.” Each farming business gets $4000 kick-start funding, pooled for the group to pay for a facilitator and expert advice. In year two, each farm business pays $800 of their own money into the pool to help keep things running. Taylor says any deci-
sion is made by the farmer members of each action group. “The group itself decides which direction it wants to go in -- a direction that they think might be profitable.” The Rangiwahia Action Group has so far discussed feed budgets, how crops and pasture were growing through winter, and stock details on scanning rates, docking percentages and weaning weights. Farm systems scientist Tom Fraser, one of the guests at the action group, talked to farmers about sheep performance. “Most people are happy with their scanning data, but not so pleased about docking percentages and weaning weights,” he says. “However, the idea is how best to use that data. It is no good collecting it if you don’t use it.” Facilitator Sarah Bell says with eight farm businesses in the Rangiwahia Action Group, there is a high level of trust. “With each business contributing in the second year, it also means they have skin in the game. “It changes the level of commitment.” www.actionnetwork.co.nz
WHAT IS RMPP? RMPP IS a seven-year Primary Growth Partnership programme working to help the red meat sector increase productivity and profitability. The programme is funded by 10 partners in the government and private sectors including Ministry for Primary Industries, ANZ, Alliance, ANZCO, Beef + Lamb NZ, Blue Sky Meats, Greenlea Premier Meats, Progressive Meats, Rabobank and Silver Fern Farms. RMPP works with farmers and sector businesses to develop, test and introduce new ways of engaging with information and technology.
RURAL NEWS // DECEMBER 18, 2018
ANIMAL HEALTH 25
Farmers urged not to forget FARMERS, ESPECIALLY in the South Island, are being reminded that while Mycoplasma bovis has captured most of the headlines in the past 18 months, TB is a continuing problem in small pockets of the country. Kevin Crews, head of disease management for OSPRI (manager of the TB-free programme) says outbreaks have spiked in the Strath-Taieri (Otago) area, with “niggles” in the last two to three years. TB has been found in ferrets, pigs and possums in the area and work is underway to see whether it is related to the incidence in cattle herds. “It’s not a major problem, but it is causing a spike,” Crews says. This is a reminder that farmers must be vigilant about TB and follow best-practice in routine testing, grazing and purchasing animals, pest control and ensuring all ASD and NAIT requirements are fulfilled and up-to-date. “This is a minor glitch in an otherwise highly successful TB-
TB is still a problem in pockets of the country with deer and cattle affected.
free control programme,” Crews says. “It has cut TB infected herds down from a peak of over 1700 in the late 1980s and early 90s, to just 32 in June of this year.” He says only two of these infected herds are in the North Island; most are on the West Coast and in small clusters in the
Marlborough mountains and in the Strath Taieri area. Crews says in late 1970s, control programmes had also reduced the incidence of TB to very low numbers. “However, a lapse in control measures saw numbers soar within five years, hence the need to remain vigilant even when
numbers are low.” OSPRI’s TB Plan is aimed at eradicating TB in livestock within nine years, in possums by 2040 and in all NZ by 2015. Beef + Lamb NZ is a partner organisation of OSPRI. ospri.co.nz/nait @rural_news facebook.com/ruralnews
NAIT UPGRADE AIMS TO HELP NAIT SAYS its online system is set to be enhanced by an interactive map to help users accurately define a NAIT location. The development uses Land Information New Zealand’s (LINZ) parcel data as the primary building block of NAIT’s Farm Location information. The system upgrade is scheduled for early 2019; it follows a recommendation in a review of NAIT. It will address farmer and industry uncertainty about assigning a farm location in the NAIT system and whether it meets the ‘10km rule’ criteria. “We know this has frustrated and irrittated farmers when they’ve tried to register their farm locations in NAIT. The interactive map will be more self-explanatory and less confusing for NAIT users who have found the 10km rule challenging to interpret,” says head of traceability Kevin Forward. “This is an important step for the NAIT programme and will allow NAIT and its partners to trace movements and future livestock disease outbreaks with more accuracy.” The system upgrade also includes a new registration form to capture other key details. “In the new registration form there are additional fields for specific information on animals held at a property. This will have benefits for our traceability capability and biosecurity readiness and response. “Effective livestock traceability relies on accurate information about animals and their location. It also can inform decision-making on managing and controlling a biosecurity incursion.” Information on how to complete the new registration process will be sent to NAIT users in January 2019.
RURAL NEWS // DECEMBER 18, 2018
26 ANIMAL HEALTH
Dairy to cover bulk of M.bovis costs NIGEL MALTHUS
FEDERATED FARMERS acting president Andrew Hoggard says a lot of dairy farmers may be questioning the decision to levy dairy with 94%
of the industry costs of Mycoplasma bovis eradication. Hoggard says while it is a simplistic view, the dairy farmers will look at simple things -- like the fact that at least half the
infected farms are now beef farms – and will assume it should be split more evenly. Federated Farmers was not involved in the determination so it is not the Feds’ job to sell it to
farmers, Hoggard said, and he could not comment in detail on how the split was decided. But his personal view as a dairy farmer is that a split of 80:20 -- or “somewhere in the 80s”
Dairy farmers will pay 94% of the ag sector’s costs of the M.bovis eradication programme.
for the dairy contribution -- “probably would’ve sounded about right”. However, Hoggard agrees the actual production effects on the beef sector were never going to be anywhere near as bad as for dairy. “It’s a complex thing to work out: where do the effects lie? Where do the costs lie? Where do the benefits of eradication lie? It can’t have been easy.” Hoggard asked whether the determination took into account heifer grazing, which is a good living for many drystock farmers. They would feel the economic impact if rampant M.bovis prompted dairy farmers to get their own runoff, or downsize enough to keep stock over winter. Service bulls are another drystock farming income stream that could be affected if M.bovis resulted in a lot of farmers moving to AI only. “So, yes it’s not just about the production costs; there’s a whole range of other things,” said Hoggard. “How well they were considered I just don’t know.” His comments follow the agreement between DairyNZ and Beef + Lamb NZ (BLNZ) which will see dairy farmers meet 94% of the industry costs of M.bovis eradication and beef farmers 6%.
For dairy farmers that will mean a total of $272 million, to be funded by a separate biosecurity levy on milk solid production. Beef farmers’ contributions will total about $17.4m collected via a separate biosecurity levy at the point of slaughter. Details such as payback period – probably 10 years – and whether levying will be weighted onto the first years or spread evenly across the period will be determined by each body separately in consultation with their farmers in the new year. In a joint media release, DairyNZ and BLNZ said they had reached agreement after a “challenging but constructive process” and with the help of an independent panel. Both boards say they support the panel’s view that the split represents a reasonable allocation, considering the relative economic size of the two sectors, the risk of infection and the potential clinical impacts, weighted by the farmgate revenue for the respective sectors. The deal follows the Government’s decision in May that it would cover 68% of the eradication costs and dairy and beef farmers would split the remaining 32%. @rural_news facebook.com/ruralnews
HOW IT WILL BE SPLIT DAIRYING WILL pay 94% of the industry costs of eradicating Mycoplasma bovis, and beef farmers will pay 6%, under a deal made by the two sectors’ levying bodies. This means dairy farmers will pay $272 million, to be funded by a separate biosecurity levy on milk solids production. Beef farmers will pay about $17.4m via a separate biosecurity levy at the point of slaughter. Details such as payback period – probably 10 years – and whether levying will be weighted onto the first years or spread evenly across the period, will be determined by each body separately in consultation with their farmers in the new year.
RURAL NEWS // DECEMBER 18, 2018
MACHINERY & PRODUCTS 27
Car of the year an easy choice MARK DANIEL email@example.com
HAVING DRIVEN the 2019 Subaru Forester at Queenstown and through the Bendigo Station at the media launch in August, your reviewer knew it was good. Now, after a week with it in the North Island, it’s easy to see why it has won the Car of The Year award from the NZ Guild of Motoring Writers. For a starting price of $39,990, no other vehicle now on the NZ market has the same mix of practicality, performance and cutting-edge technology -- particularly in a safety sense -- for such a reasonable price. Hugely popular with rural folk, and townies with an urge to hit the great outdoors, the Forester first saw the light
2019 Subaru Forester picked up Car of The Year award from the NZ Guild of Motoring Writers.
in 1997. Now, after several evolutions, it has hit its straps for 2019: this vehicle will satisfy all who long for an SUV. It’s a good looking, mid-sized SUV, achieved with exterior design changes that have removed some of the previous ‘boxiness’.
Start with the wellknown Symmetrical AWD system, add in X-Mode to tackle mud and snow in the Premium version, heaps of ground clearance, and lots of reworks to the torsional and lateral rigidity, then you’ll get the general idea. A flat four, naturally
aspirated petrol boxer engine of 2.5L gets things off the mark promptly with 136kW and 239Nm; it’s best described as perky rather than rapid. The Lineartronic CVT system uses clever software to mimic 7-steps in the transmission, with paddle shifters for driv-
ers who like to be in control. This reviewer prefers to let the car do its own thing, with progress smooth and unhurried. On the road, the seats offer plenty of support and masses of adjustment; grip and cornering ability are
like travelling on the proverbial rails, and braking is equally impressive. The technology matches and exceeds fitments seen in far more expensive brands. For example, recognition software stores the seat, mirrors and AC settings for up to five people and adjusts them automatically. Add to this driver monitoring that detects eyes off the road or fatigue (there’s an off switch for over-the-hedge farmers), crash avoidance, land keep assist and centring and a speed limiter. Other impressive safety features include pedestrian avoidance, pre-collision braking assist, adaptive cruise control and autonomous
emergency breaking. Add in practical features such as front, rear and side-view cameras, reverse automatic braking and reverse interlocking door mirrors that tilt down when reverse is selected, and the Forester is really the business. Further practicality comes from repositioning the C pillars to give a larger door opening for rear seat passengers, a step plate to allow short drivers to reach the roof rack, a fast-acting rear electric door lift, electronic park brake and auto vehicle hold on hills. As for TV’s Hilary Barry moaning about the lack of heated seats, she should know that real country folk will already be wearing long-johns if things are a little cool around the nether regions.
Middle of the pack UTV KAWASAKI’S RECENTLY introduced Pro-MX UTV sits between the larger, three-seater Mule Pro-FX and the compact Mule-SX. The new machine’s vital statistics are 2795mm long and 1525mm wide with a wheelbase of 2005mm. Power is from a single-cylinder engine of 700cc that pumps out 45hp and 58Nm torque, with electronic injection. CVT transmission offers smooth response and predictable engine braking. Electrically selected 2 or 4WD is complemented by a dual-mode rear differential to help in sticky condition or protect turf – dependent on the mode selected. Its 25-inch tyres are mounted on 12-inch rims offering good ground clearance, with front and rear disc brakes bringing things to a halt.
Electric power steering offers excellent feedback and helps drivers achieve a tight 4.2m turning radius. A bench seat, with obligatory seat belts, provides ample room and security for the driver and a passenger. Neat half doors keep limbs inside and dirt and mud out of the cabin area. At the rear of the machine, a large cargo bed carries 317kg and gas struts assist tipping. Also, the Pro-MX offers a useful 680kg of towing capacity via a standard 2-inch receiver. Watch out for an in-depth review and user opinions in the pre-Christmas issue of Rural News. – Mark Daniel
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RURAL NEWS // DECEMBER 18, 2018
28 MACHINERY & PRODUCTS
Earthquaker leaves its mark MARK DANIEL firstname.lastname@example.org
THE BENEFITS of sub-soiling and soil aeration are well known. Not least they create vertical fissures that help the movement of water and nutrients to plants roots, in turn helping increase production. The process is also useful as a remedial action in pugged paddocks or gateways, by removing standing water and bringing ground back into production more quickly. The Aitchison Earthquaker, marketed by Power Farming, has a 2.44m wide double-bar, high-tensile steel frame and uses cast clamping components to secure legs or tines to the frame. Straight legs or parabolic tines are manufactured from bisalloy steels, with dimensions of 500mm x 16mm thick, to allow operating depths of 300-400mm. The straight leg is useful for creating ‘shatter’, while minimising inversion of the soil profile, so should suit operators not wishing to bring clay sub-soils into the surface layer. The curved, parabolic tine option causes a degree of inversion, but offers key benefits in draught reduction by making the units about 30% easier to pull.
The Earthquaker subsoiler helps break soil pans and improves drainage.
The legs or tines each carry a knockon/off point and wing assembly to ensure penetration and the sub-soil or pan shatter. Overload protection from stones or trash is by a 20mm transverse shear bolt, pre-stressed to ensure a clean break. Depending on requirements, a range of two to seven legs can be mounted on the frame – the former ideal for loosening tramlines. These are all easily adjusted to create the desired effect and typically require 60 - 150hp for effective use. In operation, depth control is by a fullwidth flat roller assembly fitted with a scraper that also levels and firms the surface after use. For working on grassland, an optional 350mm diameter disc coulter cuts a path through the sward to allow the tine a clean entry and works with the rear roller to ensure a prompt return to grazing or harvesting operations. “The Earthquaker is a versatile tool for removing pans and improving vertical drainage, but also lends itself to soil loosening in cultivation operations,” says JP Chapman, product manager, Power Farming. “It’s perhaps ahead of discs, tines or power harrows in primary cultivation or remedial situations.” @rural_news facebook.com/ruralnews
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WITH CHRISTMAS just around the corner, farmers thoughts will be on finding a gift for the domestic manager, the ankle-biters – and maybe a little prezzie for themselves. Global player John Deere entered the spirit of the season at the recent EIMA 18 show in Italy, no doubt thinking about the saying: ‘The only difference between men and boys is the size of their toys’. Using the event to promote the recently upgraded JD 3038E compact tractor, they displayed a 1:1 scale model (psst… it was the real thing). It was packed in a cardboard box ready to be taken home, wrapped and popped under the Christmas tree.
The packaging also noted that the model was suitable for “big kids” from 17-99 years old. Said to be a perennial favourite with JD customers since its introduction in 2008, the 3038E offers 37hp from its 3-cylinder Yanmar diesel engine. It has new side panels and cowling, and a larger fuel tank and a service interval extended to 1200 hours. The tractor uses a hydrostatic transmission with twin-touch F/R pedals. Apparently, the only problem for would-be buyers at the event was finding someone tall enough and strong enough to get it off the shelf, and of course a big enough carrier bag to take it home.
RURAL NEWS // DECEMBER 18, 2018
MACHINERY & PRODUCTS 29
Dual-up with ease! MARK DANIEL email@example.com
ARGUMENTS ABOUT whether tracks or duals are the best option for getting power to the ground in farming will go on for ever, but duals are the staple on tractors in New Zealand. Suppliers claim that fitting duals offer several advantages. Not least is the ability to create more grip from the greater surface contact between the tyres and the ground, that in turn means less wheel slip, less wear and tear on tyres and less fuel consumed. Add to that good agronomic reasons such as reduced soil compaction leading to better soil structure, allowing the free passage of water and nutrients to plant roots: these should offer increased production, making the case for fitment of duals a convincing one. Euroduals, distributed in NZ by Ag- Attachments, Hamilton, are manufactured by Schaad Starco in Switzerland. This company is said to be Europe’s largest supplier of wheels, tyres and complete wheel/tyre assemblies to the aftermarket and OEM markets. The company claims that its attention to detail during manufacture sees the fitment of cali-
The world record maize harvest in action.
An ‘a-mazing’ set of records Duals are the staple on tractors in New Zealand.
brated spacer rings that offer a perfect fit. This removes the risk of “jamming during fitment and removal and ensures the loads imparted by the fitment of the secondary wheels are directed through the spacer ring and not the clamps. This results in the number of clamps required to secure duals being reduced”. MD Plus and HD Plus fitting systems are offered for tractors rated to maximum horsepower settings of 200 and 600 respectively. Both have a heavy-duty ‘socket’ that is fitted to the original inner wheel, that connects the clamp with the outer sec-
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the added benefit that tractors up to 200hp will only need four clamps, even when fitted with 42-inch wheel equipment. Likewise, that same design detail means there are no alignment issues requiring heavy and cumbersome wheels to be ‘spun’ to align properly with the clamps. Once the wheel is positioned against the original inner wheel, clamps can be quickly attached and tightened, meaning that when not required the duals can be removed to
RAMOS Mowers Cutting power without compromise
prevent excessive wear or reduce transport width. “The quality of the manufacture of these dual sets means that fitment is extremely precise, letting us reduce the number of clamps down to four on most tractors,” says national sales manager for Ag Attachments, Martin Gray. “In some situations, especially if the horsepower creeps above 400hp, we would suggest that six clamps might be required.” www.agattachments.co.nz
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ondary wheel via a short threaded and adjustable rod. The design means that tensioning or releasing clamps is quick and easy, with the connecting rods removed from the sockets without the need for hooking or unhooking. The other key design difference sees the clamping ring being placed inside the dual wheel assembly, meaning a short distance for the connecting rods, resulting in secure attachment, even when reversing, with
A US family-owned farming operation has set not one, but two new Guinness World Records by harvesting 1111 tonnes of maize in eight hours and then 1620 tonnes in 12 hours using a Claas Lexion 760 Terra Trac combine harvester equipped with a 16-row corn front. In doing so, the team at Stewart Farms Partnership, Yorkville, Illinois, easily cruised past the 1300 tonne, 10-hour record they set eight years ago. The feat represents a throughput of almost 135 tonnes per hour or one truckload every 12 minutes. Harvesting commenced at 9am in less-than-ideal conditions, with 12mm of rain having fallen the previous day. The grain bin was emptied at precisely eight, 10 and 12 hours after the work started. The 1379 tonnes recorded at the 10-hour mark represents a 6% improvement on the 2010 record, which was attributed to ongoing improvements to the Lexion. Compared to its 2010 counterpart, today’s Lexion 760 has much higher power, a more efficient cooling system, a larger grain tank and several operator assistance systems.
RURAL NEWS // DECEMBER 18, 2018
30 WORKSAFE / RURAL TRADER
Make sure the kids are around to open presents MARK DANIEL firstname.lastname@example.org
AS YOU read this Rural News, its probably only a week to Christmas day and many of your children will have finished the school term about two weeks ago. With time on their hands, many youngsters will be wanting to get out onto the farm ‘to lend a hand’. So take a few minutes to understand the risks involved. While many country kids are a lot more safety-savvy than their townie counterparts, it isn’t always enough to keep them safe. Even the most sensible child can be impetuous or want to show off to mates or visitors. Remember also that children often have less understanding of risky situations, have less strength and coordination
than adults and less experience of decisionmaking about physical danger. This means children appear too much in ACC figures each year: at least 100 children are injured, about 30 are hospitalised and – tragically – an average of four are killed. Typical risks on the farm includes animals, vehicles, water, machinery and agri-chemicals. If you then consider the adventure playgrounds -- rivers, creeks, dams, ponds, troughs and sheep dips – then it’s not difficult to see why accidents happen. And remember things that might form part of an adult’s daily routine – such as scalding hot water or high-strength, undiluted cleaning chemicals in dairy sheds. So, what can we do to protect our young folk or visitors to the farm? First,
stroll around the property with the children involved, to point out risks and indicate no-go areas. Get the children to buy-in to wearing high-vis clothing, pointing out it’s what adult visitors must do to when visiting. Make sure they wash their hands after handling livestock and ensure they wear approved helmets when riding on a quad or UTV. This will hopefully encourage it as normal practice as they grow older. Adults on the farm set the best examples for youngsters, who generally will look up to them, take their lead from them and aspire to be like them. Ensure all machinery is guarded securely, being mindful that small hands can get into the tightest spaces and young minds are always inquisitive. Store agri-chemicals
away out of sight, preferably in a locked store and make sure keys are removed from vehicles, tractors and particularly farm bikes or quads. Never leave a vehicle unattended with the engine running. Children, especially those who are younger, can easily get absorbed in what they are doing and will often be unaware of what is going on around them. If you are about to use a farm vehicle, walk around it to check for children and get into the habit of sounding the horn twice as part of your daily routine. Don’t be tempted to allow children to ride on tractors, trailers or the rear tray of a farm ute. Instead make sure they are inside vehicles – either in an approved child seat or wearing a seatbelt. Out on the prop-
Keeping young ones safe around the farm takes a bit of planning and thought.
erty, ensure high-risk areas such as effluent ponds, tanks, wells and silos are fenced-off or secured. Don’t forget to lower things like spare or dual rear tractor wheels from their normal leaning against a shed position, to lay flat on the ground to remove the crush risk. If your own or visiting children are lucky enough to have a child-sized quad
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or farm bike, make sure they wear an approved helmet and sturdy footwear, know where they can go and always under the supervision of an adult. While many of these things might seem glaringly obvious, every holiday season children are killed or seriously injured on rural properties. Planning may help you avoid
having to spend some of your holiday sitting in a hospital emergency department, alongside a bed or – in the worst case – at a morgue. The teams at Rural News Group and WorkSafe hope you’ll enjoy your holiday season safely and come back and see us in 2019. @rural_news facebook.com/ruralnews
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RURAL NEWS // DECEMBER 18, 2018
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Ph 06-835 6863 • Mob 021-061 1800 Jetter Video: www.craigcojetters.com
Ph/Fax 07 347 2292 www.clicdualwheels.co.nz
Culvert Pipes New Zealand’s CHEAPEST Culvert Pipes! FREE joiners supplied on request. ONE STOP WATER SHOP 300mm x 6 metre ................................ $410 400mm x 6 metre ................................ $515 500mm x 6 metre ................................ $690 600mm x 6 metre ................................ $925 800mm x 6 metre .............................. $1399 1000mm x 6 metre ............................ $2175 1200mm x 6 metre ............................ $3475 ALL PRICES INCLUDE G.S.T.
• Lightweight, easy to install • Made from polyethylene
McKee Plastics Mahinui Street, Feilding Ph 06 323 4181 Fax 06 323 4183
firstname.lastname@example.org | www.mckeeplastics.co.nz
We’ll Look After You
Ring Walco NOW for Your Nearest Stockist of these Robust Wipers TM
Ph 0800 853 002
Helping Farmers Boost Production
0800 625 826
for your nearest stockist
Joiners supplied FREE with culvert pipes
Check it’s alright before you light
Before you do any burning off this summer, go to www.checkitsalright.nz or search “ﬁre permit” for the latest ﬁre season status in your area and, if needed, apply for a ﬁre permit.
Rural News 18 December 2018