HBT - Farming Outlook August 2018

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Thursday, August 23, 2018

www.hawkesbaytoday.co.nz

FARMING OUTLOOK

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APRIL 2018 AUGUST 2018

Emily tackles HR issues with diploma TRAINING

Farmer decided to learn more about operating an agribusiness

H

aving won the 2007 national Farm Manager of the Year Award with her husband Daniel, Emily Woolsey had a pretty good grasp of dairy farming — yet she knew there was so much more to learn. The 32-year-old was busy juggling her career as an occupational therapist in Invercargill then raising two sons, so had never worked on their farm fulltime. But a recent move back to a familyowned property in Gorge Rd to become equity managers overseeing two dairy units (comprising 1300 cows in total), as well as overseeing a second equity partnership in a 400 cow property, prompted Emily to further her own education and farming career by enrolling in Primary ITO’s Diploma in Agribusiness Management (Level 5) last year. “I decided I wanted to know more about operating an agribusiness,” she explained. “I’ve learned a lot from other people over the years but I’ve also had to teach myself along the way. “So I was aware there were gaps in my knowledge and I thought the diploma could help fill those gaps.” So far she’s completed the diploma’s human resources module which has helped streamline the couple’s own HR practices when dealing with their six fulltime and two part-time staff. “What I found beneficial was putting together a folder for successful recruitment and managing an effective on-farm team. I’ve been able to tweak certain

areas of our HR practice and tailor resources to suit our business. “Just looking at things like the interview process — what questions should we be asking in an interview. The success of your business all starts from the recruitment process and finding the right person to hire. The diploma’s HR module looks at all the critical areas to consider when employing someone.” Emily says she’s now about to introduce formal performance reviews as a result of her study to keep staff motivated and help them develop and improve. “Farming often seems to lack a formal process where people can look at their strengths and weaknesses. Having a proper review helps people with their industry progression.” She’s now tackling the diploma’s finance module which is also proving extremely useful. “I can sit down now and really look at the budget figures and understand what they actually mean and what impact they will have on our cash flows going forward. “I also feel I am becoming more confident in having those conversations with our bank manager and accountant because now I understand what all the terminology means.” Emily says overall the diploma is worthwhile because it’s specific to agriculture rather than just a general business course. “I can directly relate it to our farming business. I’m an examples person so I love the fact all the examples relate to our agribusiness.” She

I also feel I am becoming more confident in having those conversations with our bank manager and accountant because now I understand what all the terminology means. attends classroom lessons once a fortnight and enjoys the face-to-face contact with fellow students to discuss what systems and ideas they use on their farm and what challenges they face. “Our tutor has been very good. If you do get stuck, you can easily contact him for help and motivation. He’s also very good at challenging our ideas and thoughts about why we do what we’re doing and looking at the big picture which is always good.” Emily says finding time to study in amongst family and farm life is always a challenge. Her advice is to remind yourself why you are doing the diploma and put time aside to get your assessments done. “Don’t go in with a predetermined idea of what you think you might learn because I have learned far more than I expected,” she adds. One of the reasons the dairy industry appeals so much to Emily is the progression pathways that exist. “It’s a challenge but there’s definitely ways to improve yourself, grow your business and enjoy your lifestyle. We’ve got two young boys who

Emily Woolsey with husband Daniel and their two sons. She says she undertook a diploma course because she was aware of gaps in her knowledge.

love being out on the farm with us. “There’s not many jobs where you can take your kids to work with you.” She also loves how many positive people are involved in dairy farming and how willing people are to share their knowledge and experience to help others. She’s been heavily involved in the Dairy Women’s Network in recent years and says there are plenty of opportunities to extend your skills. “The cool thing about dairy farming is we’re all in it together. We’re not competing against each other. “I think we’re very fortunate to have industry organisations like DairyNZ, Dairy Women’s Network and Primary ITO to help us grow and develop,” she says. ■

Photo / Supplied

RAM CATALOGUE 2018 BE PART OF IT! If you are looking to get your ram sales information to potential buyers or your products and services in front of our extensive rural readership in the central and lower North Island, this is the publication for you. We’ll include articles sourced from breeders and associated industry sectors for reader interest and retention. This year’s Ram Catalogue is distributed from Thursday 18 October to the rural readership of Hawke’s Bay Today, Gisborne Herald, Waitomo News, The Guardian Manawatu and Wairarapa Times Age Midweek.

For further details contact Features Department 06 873 0834.

First with the Bay’s news


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Thursday, August 23, 2018

FARMING OUTLOOK APRIL 2018 AUGUST 2018

How precision technology saves water IRRIGATION

And perhaps, more importantly, it reduces leaching and runoff

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ith the ever-increasing pressure on the agricultural industry from environmental groups and the Government to mitigate its often exaggerated effect on the environment, it is essential that farmers continue to work towards limiting nutrient leaching from their farms. Farmers with irrigation receive more criticism as this is seen as the most serious of evils, but irrigation when used with precision can be beneficial to the environment — good pasture or crop growth uses up available water and nutrients and limits runoff in times of drought. Using precision technology on irrigators not only provides these benefits but also greatly reduces the amount of water used to grow good pasture or crops. Irrigators using Growsmart Precision VRI experience water savings of between 25 per cent and 30 per cent, reducing electricity and giving the other benefits of being able to turn off irrigation over and around pivot ruts, tracks, water troughs, gateways, drains and any boggy areas. Growsmart Precision VRI has been supplying these benefits for 10 years now with the original systems still working perfectly and producing world record crops for their farmers with technology that leads in this area and is continually updated to provide the farmer with ease of use and the required reporting for the environmental regulators. A new innovation enables farmers to create irrigation plans to apply effluent,

From the comfort of your home, you can use your laptop to remotely monitor and control all the Lindsay irrigation products. Photo / Supplied

fertigation and/or chemigation to specific areas under an irrigator. This lets farmers target resources to maximise yields, ensuring efficient use of inputs such as water and nutrients, yet still preventing leaching and run-off. Couple this with FieldNet, which is the platform that remotely monitors and controls all the Lindsay irrigation products from your mobile or laptop. The newest addition to this technology is FieldNET Advisor — a revolution-

ary management solution designed to provide simple science-based irrigation recommendations enabling faster, betterinformed irrigation management decisions. This innovative solution combines more than 40 years of crop and irrigation research into FieldNET’s proven technology platform, leveraging massive amounts of data, cloud computing capabilities and machine learning to deliver one easy-to-use tool. No need to manually track growth or

WE MAKE THE SOLUTION THIS SIMPLE

make complex calculations to ascertain the daily water usage with the frustration of using multiple unintegrated tools to track water needs and manage equipment. ■

Growsmart Precision VRI can be installed on new irrigation systems or as an add-on to existing systems. For more information, contact your local Growsmart by Lindsay dealer or visit www.growsmartvri.com

With Growsmart® Precision VRI, FieldNET® remote management and Zimmatic® irrigation systems, your Zimmatic dealer will deliver a “single box” irrigation solution – the only fully integrated solution on the market. Growsmart Precision VRI is the world’s first true variable rate irrigation system, and it’s the most advanced precision irrigation solution available. The fully integrated system, managed through FieldNET, provides unparalleled ease-of-use. And with the support of your Zimmatic dealer backed by Lindsay you can rest assured you’re working with the most experienced precision irrigation specialists globally. Having one point of contact makes upgrading and maintaining your irrigation system seamless, so you can spend less time in the field, giving you more time for what matters.

CALLYOURLOCALZIMMATIC® DEALER TO MAKE IRRIGATION CHILD’S PLAY! 0800 438 627 • growsmartvri.com

ZIMMATIC, FIELDNET AND GROWSMART ARE REGISTERED TRADEMARKS OF THE LINDSAY CORPORATION. © 2017 LINDSAY. ALL RIGHTS RESERVED.


Thursday, August 23, 2018

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FARMING OUTLOOK

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APRIL 2018 AUGUST 2018

A winning quadfecta of horse sense VETERINARIANS

Who you gonna call when you need equine experts

V

et Services has clinics in Napier, Hastings, Waipukurau and Dannevirke with four key equine vets to cover all eventualities with your noble steed. Behind them are a team of vets and receptionists who will take care of your horses, no matter what time, no matter the problem.

JOHNNY ATKINS Dannevirke

Johnny has been working with Vet Services Dannevirke since January 2012, after completing his veterinary degree at Massey University in Palmerston North. He is from Wellington but thoroughly enjoys the ‘small town life’ that Dannevirke offers. Johnny has a keen interest in all areas of mixed veterinary practice, but especially equine medicine. He’s completed a wide range of related education including equine dentistry, medicine, wound management, imaging, lameness and pre-purchase examinations. When not at work you can often find him out running and he enjoys a range of sports, including a bit of hunting when he finds the time.

From left, Johnny Atkins, Mike Fitzgerald, Richard McKenzie, and Dave Kruger.

MIKE FITZGERALD Waipukurau

Mike originally hails from the Mainland, and is as one-eyed as any Cantabrian. He’s been with Vet Services since 2011 after graduating

from Massey University. He established himself as a thorough clinician in Waipukurau before doing his OE. During his travels Mike was visited some great equine clinics in England, upskilling himself before returning to the Bay in 2016. Mike is a great all-rounder but his area of special interest is horses. He has studied lameness, performance, wound management, dentistry, and pre-purchase examinations. In his spare time, Mike is an avid runner and outdoorsman, and can often be caught dreaming of future adventures.

RICHARD McKENZIE Hastings

Rich graduated in 1990 from

Massey University. He worked in Hastings until 1992 then spent several years working in the UK and Guernsey before returning to Vet Services in 1996. Now his daily clinical workload is 95 per cent equine. Within this caseload Rich has special interests in equine radiography and reproduction, including artificial insemination and foaling. He has two children who are both at Victoria University. Rich breeds thoroughbreds and has recently taken out his owner/trainers licence to try the challenge of racing with his partner Jordie. He enjoys rugby, racing, beer and pinot noir, in what little time is not immersed in horses.

DAVE KRUGER Hastings/Napier

While having a keen interest in all things equine, Dave’s main focus is equine dentistry. To this end he has attended numerous local and overseas post graduate courses and conferences in dentistry. Dave also enjoys lameness examinations, including imaging modalities such as radiography, and in particular ultrasonography. Recently Dave attended a course in equine joint and tendon ultrasonography run by Jean-Marie Denoix, arguably the world’s top equine ultrasound expert. Outside of work Dave rides horses, farms bees and is into all manner of water sports. ■

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Thursday, August 23, 2018

FARMING OUTLOOK APRIL 2018 AUGUST 2018

Knowing your numbers key to success FINANCE

Agribusiness Diploma gives farmers a good understanding of financial analysis

It’s often about wealth creation over the medium to long term.

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he best financial decisions are rational — not emotional — ones. But the head of Rural and Commercial Banking at SBS, Grant Dermody, says it’s all too easy for agribusiness owners to get caught up in the emotional side of investment decisions if they don’t have a solid understanding of their own financial picture. “When you’ve been looking at a neighbouring piece of land and dreaming about what you might do with it and how it could benefit your business . . . and then real estate agents are creating tension between three or four parties and you feel that pressure of not wanting to miss out, it can very easily become an emotional decision.” The key, Grant says, is knowing your numbers and understanding what they mean. Cash-flows, balance sheets, operating expenses, opportunity cost and the internal rate of return are all important financial terms. But many farmers have to rely on external consultants to interpret their impact and successfully navigate a path forward. Undertaking a qualification such as Primary ITO’s Diploma in Agribusiness is one way of upskilling yourself so you can make more informed financial and investment decisions. “People who have done the diploma understand those metrics

and the importance of them,” Grant says. “There are plenty of astute farmers out there but a lot of them would benefit from having a good understanding around the financial analysis process that would enable them to be more objective. A Diploma in Agribusiness provides this understanding. They’re able to analyse opportunities and understand those return factors and what impact a particular investment would have on the performance of their business.” Grant says farming is often a

Hear from Eva Bradley (Hawkes Bay’s popular wedding photographer) and Yvonne Lorkin (Wine writer and founder of Winefriends). You will be inspired by stories of growing businesses, meeting challenges head on and juggling life responsibilities. Thursday 13 September 5.30pm to 7.00pm at Porters Hotel and BM Accounting, Havelock North

long-term inter-generational business so making the right financial decisions has a long-lasting impact. “It’s often about wealth creation over the medium to long term. How is your business performing today, and what are the financial metrics required to reach your goals? “A qualification such as the Agribusiness Diploma brings a clearer lens to the decision-making process and leads to a very informed discussion between farmers and their rural bankers.” Sound financial knowledge and being able to understand the tech-

Having a good understanding around the financial analysis process helps remove a lot of stress for farmers. Photo / Getty Images

nical terms also makes those conversations with your banking adviser a lot easier and more enjoyable. “It certainly speeds the process up if they’ve already done a robust analysis and it gives the bank confidence that the business owners understand that growth opportunity and how it will impact on the balance sheet and the cashflow of their business.” Grant says knowing your financial position is very empowering. “Working through an analysis process also gives you more clarity. You could uncover some additional benefits you weren’t initially aware of.” It can also help ease worries and tension between multiple stakeholders or family members. “Knowing the numbers is the key thing. Not knowing can lead to a lot of pressure, frustration and stress — and that’s true with anything, not just the financial side of your business. “Undertaking extra study to upskill yourself in this area can remove some of the emotion out of major decisions and help rationalise things. I would certainly recommend it.” ■

We value the skills and professionalism of good staff and offer consistent work and qualified training based in the beautiful Hawke’s Bay, servicing Aotearoa NZ. For woolgrowers we offer an all inclusive service anywhere, anytime that includes a full health and safety policy as per OHS requirements.

Be challenged on your social media marketing skills by Auckland based social media advertising gurus Ad Hoc Digital Marketing. You will learn some great tips to take your social media game to the next level to help you find and engage with your customers. Wednesday 17 October - 5.30pm to 7.00pm at Porters Hotel and BM Accounting, Havelock North Let us serve a slap up bacon and egg buttie for breakfast and demonstrate how you can save time and $$$ on your bookwork, costing, job scheduling and employee management. We’ll even make sure you can be back on the job site by 8am !! Thursday 15 November - 6.30am to 8.00am at BM Accounting, Havelock North

at www.bm.co.nz or phone 06 876 7159 Havelock North

Call Colin NOW for a no obligation confidential chat about all your shearing requirements

022 183 2200 or (06) 879 5553

email colmere@xtra.co.nz Proud to support the NORTH ISLAND WOOLHANDLING CIRCUIT


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Thursday, August 23, 2018

FARMING OUTLOOK APRIL 2018 AUGUST 2018

Understanding the big picture WEATHER

Weather forecasting isn’t just about giving a prediction for a day

This smart weather computer factors in your local geography and knows in an instant historical data, letting us grasp immediately if the weather is trending warmer or colder, or wetter or drier than usual.

W

eatherWatch is New Zealand’s largest private forecaster and the nation’s Rural Weather

Authority. With more than 2000 forecast locations across New Zealand we have your farm, orchard, lifestyle property, local Kiwi community or city suburb covered. Over the years our accuracy has won weather forecasting contracts for the Ministry for Primary Industries (MPI) during NZ’s most severe recent droughts, also Fonterra, Auckland Civil Defence and we also work closely with the NZ rural media sector. Globally we’re proud to be a CNN International Weather Affiliate. Weather forecasting isn’t just about giving a prediction for a day — it’s about understanding the big picture. It’s about understanding if you’re going to have ‘showers’ what sort of showers will they be? Heavy, light? ? We believe in giving the public more data to play with, more maps and graphics to look at and weather videos that tap into the Big Picture. This explains where our weather is coming from, looking over to Australia, or elsewhere, to work out why we’re getting the weather we’re getting. WeatherWatch has forecasters in both the North and South Island, providing national coverage along with our new significant partnership with IBM and one of the most

powerful weather super computers on the planet called Watson. This IBM super computer, in conjunction with forecasters, can learn from its mistakes. This smart weather computer factors in your

local geography and knows in an instant historical data, letting us grasp immediately if the weather is trending warmer or colder, or wetter or drier than usual. Add our local knowledge and

WeatherWatch believes in giving the public more data to play with.

expertise and we have a powerful and unique new weather product. Give our services a try. We’re independent of the two government forecasters and we’re proudly New Zealand based — but we also use some of the globe’s most accurate weather data from satellites and aeroplanes: even your smartphones share barometric pressure exclusively with us on an incredibly local level, through our IBM partnership. That’s the power of WeatherWatch and our new official weather partners — your local conditions really do matter to us. ■

Go to WeatherWatch.co.nz, or download our free WeatherWatchNZ app in Google Play or Apple.

New Zealand’s Rural Weather Authority

New Zealand’s most dedicated rural forecaster. Our focus? To make rural weather as accurate and as helpful for your farm, orchard or lifestyle property. To prove our commitment to rural NZ we now have over 2,000 land forecast locations (compared to around 100 from the two Government forecasters combined). INDEPENDENT forecasts, UNIQUE weather graphics, INTERESTING weather videos! Try us for a fresh second opinion - we have many FREE services!

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Thursday, August 23, 2018

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FARMING OUTLOOK

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APRIL 2018 AUGUST 2018

Ideal for fat-free summer grazing PASTURE

Chicory is a useful grazing option in light of Fonterra’s new FEI grading system

TIPS FOR BUMPER CROP

S

everal factors can negatively affect your herd’s Fat Evaluation Index (FEI) number. Fortunately, 501 Chicory is not one of them. That’s great news for any farmers who want to keep milk in the vat up, and grades down, this summer. With less than a month to go before Fonterra’s new FEI grading system takes effect, there’s still plenty of time to plant chicory for high value summer feed that avoids FEI penalties. “We’re already seeing a lot more interest in 501 Chicory this spring as farmers prepare for the new grading system,” says Richard Doney, upper North Island area manager for Barenbrug Agriseeds. “FEI demerits will be as high as 20 per cent of the price of milk collected on the day, if the grade standards are breached. Farmers are thinking ahead about the best way to manage this if they have previously relied on importing high levels of PKE to keep cows well fed through dry summer conditions.” 501 Chicory has no effect on FEI grading, and even better, Doney says, well-grown crops of this increasingly popular forage herb cost about half the price of PKE per kg dry matter. Protein and metabolisable energy (ME) are higher; cows love chicory and you don’t need machinery to feed it out. “It’s also an excellent way to

renew run-out paddocks. By spraying these out now and sowing chicory for summer crop, you prepare a good seedbed for new grass and clover in autumn. “Poor quality pastures don’t grow much DM over summer, and feed quality is usually low, so it’s an efficient way to turn some of your worst paddocks into your best for next season.” This is particularly useful where pasture pests and weeds like black beetle and yellow bristle grass are

a problem, because 501 Chicory disrupts the infestation cycle. “As long as you spray grass weeds out of your chicory crop, black beetle will pack their bags and leave in search of other feed. The same applies to most other pasture pests, so unlike turnips, no insecticide spray is required once the crop is established.” An annual-type chicory, 501 is quick to establish, and outgrows other perennial types over summer by as much as one full grazing. ■

Chicory is not only healthy for livestock, it’s relatively cheap to grow. Photo / Supplied

■ Sow 501 Chicory early (as soon as soil temps are 12C and rising) ■ Sow Agricote treated seed at 8-10kg/ha ■ Sow shallow (never deeper than 1cm). Pay close attention to depth control when direct drilling ■ Apply slug bait if necessary, especially if direct drilling ■ Sow with the right fertiliser (eg, 150 kg/ha of DAP) ■ Roll, roll, roll. Good seed to soil contact will speed up germination ■ Control weeds, and by doing so control insect pests too. For best results, apply flumetsulam to control broadleaf weeds and clethodim for grasses when weeds are less than 5cm tall and before first grazing ■ Graze at 25-30cm height down to 3-4cm ■ Don’t spray the crop out too late in autumn, as new pastures take priority and need the best start ■ Don’t keep the crop for a second summer. It might look great in autumn, but it will open up in winter, and go to seed next summer, reducing yield and quality. ■

Holden have dropped prices across the diesel range. So, there’s never been a better time to buy a new Colorado diesel. Take the Colorado LTZ 4x2 manual, with 3.5-tonne tow rating and 18 inch alloy wheels. Plus, three years free service comes standard on any new Holden vehicle. www.holden.co.nz/offers. Drop in to your Holden Dealer today.

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INTRODUCING THE NORWOOD FARM MACHINERY CENTRE, HASTINGS TEAM “Norwood Farm Machinery Centre” is celebrating its 70 year anniversary this year. There has been a few changes to the staff here in Hastings since I started in 2004 , so I thought it was timely to introduce some of the new faces in our business and some not so new. We have specialists in all areas of our business, parts , sales and service - covering all industries and professions from Farming , Contracting, Horticulture , Viticulture through to Lifestyle etc. With worldwide renown Brands we are 100% confident we will have a solution for you. We currently have branches in Hastings and Gisborne , our goal is use our expertise to further increase the profitability of your business.

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Alistair Horricks

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We are dedicated to further lifting our customer service, focus on the best solutions and outcomes for our client base.

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HASTINGS | 1199 Omahu Road | Ph: (06) 876 7034 | www.norwood.co.nz/hastings


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Thursday, August 23, 2018

FARMING OUTLOOK APRIL 2018 AUGUST 2018

Portion of meat in what you eat part of DIET with FIONA GREIG

Nutrition and environmental impact of farming part of complex challenge

A

s a registered nutritionist working in the New Zealand red meat industry, I’m faced with a myriad of balls to juggle in the “meat and planetary health” discussion. Nutrition is not a simple science; add environment and moral dilemma in to the mix, and you’ve got a complex challenge that keeps all involved researching to the nth degree. And it’s just the beginning. How are you feeling about the noise regarding the demise of the environment? We all have a part to play, but does that mean a few meals of meat across the week should be removed? I believe not. What I am comfortable with is reinforcing what the dietary guidelines have always said, and that means plant-based eating (spoiler alert it’s not the latest

trend), ie. about three-quarters of your food intake should be from foods derived from plants — I’m talking fruit, vege, wholegrains and pulses, which are perfectly complemented by nutrient-rich animal foods — meat, dairy, fish. And yes

It’s a beautiful thing when you can say the Kiwi sheep and beef sector is focused on farming within the natural limits of the environment, relying on rainfall, sunshine and providing a habitat for native fauna...

— it still comes back to moderation. As sexy as it is not, that word should be the mantra of all dietary patterns regardless of whether you eat animal products or not. As a nutrition professional, I’m very proud about what our industry does here in little ’ol New Zealand, beyond just providing a nutritious staple on the tables of Kiwis — for those that are still eating meat of course — and according to our insights, that’s still 89 per cent of us. I’m talking about farmers, the backbone of our country, the guardians of our land who raise livestock to feed the world. Many will not realise what has to happen on a farm

Moderation should be the mantra of all dietary patterns regardless of whether you eat animal products or Photo / Supplied not.

to produce a premium product, nor the advances that have been happening for a long time to address environmental concerns. Sheep and beef pasture-based farming systems in New Zealand are among the lowest-intensity systems in the world for greenhouse gas emissions. Our sheep and beef farmers have already reduced their carbon emissions by around 30 per cent below 1990 carbon emissions levels, exceeding New Zealand’s current Paris 2030 target (11 per cent below 1990 levels) on the back of productivity and efficiency gains. We are moving in the right direction. It’s a beautiful thing when you can say the Kiwi sheep and beef sector is focused on farming within the natural limits of the environment, relying on rainfall, sunshine and providing a habitat for native fauna — with 24 per cent of New Zealand’s total native vegetation on sheep and beef farms — while potentially contributing to offsetting emissions from the animals. And have you seen our butchers on the world stage? Call me biased, but they are rocking it, showcasing one of the oldest professions, yet being from one of the youngest countries — the New Zealand butchery trade is punching above its weight. So, with the rise of alternative proteins and growing concerns about agriculture’s impact on the environment, what will our industry look like in 10, 20, 50 years’

BETTER Residential / Commercial / Rural / Property Services LICENSED UNDER THE REA ACT 2008

continued on A13


Thursday, August 23, 2018

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FARMING OUTLOOK

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APRIL 2018 AUGUST 2018

a holistic diet continued from A12

time? Will a meat nutritionist be representing cell cultured meat, and/or working closer with plantbased nutritionists to deliver nutritious products that have very little impact on environment, if that’s possible? There is room for faux meat, plant meat or alternative protein. Call it what you will — this makes sense to feed a growing global population who want more options to meet their needs and desires. The nutritionist in me couldn’t help notice with the recent hype of the Impossible Burger on the Air New Zealand menu, how this new product stacks up nutritionally. It has 20 ingredients, so in trendy eating circles, this would not be considered to have a ‘clean label’. Okay, it’s a burger so you may not expect it to be an elixir, but comparing to a burger using New Zealand beef, you may be surprised to learn the Impossible Burger is higher in saturated fat, due to the

The Impossible Burger is higher in saturated fat, due to the added coconut oil, and a lot higher in sodium [than a NZ beef burger].

added coconut oil, and a lot higher in sodium. Without the intrinsic ‘meat factor’, your body would have to work harder to absorb the nutrients it contains, but if it’s ‘saving the planet’, would you be cool with that? On the topic of processed foods, over in Australia, agricultural and food scientists, Commonwealth Scientific and Industrial Research Organisation have looked at whether changing our diets will reduce environmental impact. In a nutshell, they highlight the food system is a major source of environmental impact, but assessing the environmental impact is complex due to the diversity of agricultural systems, the variances within production systems, and range of foods eaten around the world. Of the limited evidence available, it says that in some cases recommended diets that governments endorse have a lower environmental impact. This means our over-consumption of food energy associated with average diets including treat foods (ie, eating more food than our bodies actually need) is likely to be the issue, not a single food. So, we need to define what a sustainable diet actually looks like and this means taking a holistic approach to the solutions we implement. Simply looking at meat in isolation is not the answer. ■ Fiona Greig is head of nutrition for Beef + Lamb New Zealand

Around 89 per cent of New Zealanders enjoy having meat on their menu.

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FARMING OUTLOOK APRIL 2018 AUGUST 2018

KEEP IT

in the family FINANCE with PAUL DYKES

Farm succession is more civilised these days - but not necessarily any easier

I

n the ‘old days’ it was not uncommon for a dictatorial patriarch to unilaterally decree who was going to take over the family farm, leaving little room for siblings to challenge the decision. These days, everything is much more civilised — but that doesn’t mean it has got any easier. As many farmers are learning as they hit retirement age, finding a family member interested in owning the farm can be a battle in itself. Depending who you talk to, this generation is not that keen on following in their parents’ footsteps, having seen the hours and effort they have put in over the years – often for little reward. This is especially true in dairying. And in many cases, the children have gone out into the world with their university degrees and are earning far more than their parents.

Some don’t want to give up their city jobs and salaries, or leave their exotic lifestyles overseas. Then there is a group who want to stay working in the farming sector – but not as farmers. Their education has enabled them to get interesting jobs in soil management, herd testing and rural banking, for example. A third group may well put their

hand up for the job, but a quick look at the financial implications will test their resolve. The cost of buying farming land these days makes the succession process a daunting undertaking. If no one wants to take on the farm, the parents can keep farming until they die, or sell it all to a stranger and live the high life. Dominic Stewart, a principal at

Sellar & Sellar Chartered Accountants in Masterton, is well versed in succession planning — he says he always has several on the go at any one time. He takes pleasure in helping to pass farms on to the following generation and, in some cases, the one after that as well. “I’m concluding a farm

It’s important to prepare for succession but often countryraised children aren’t that keen — for a variety of reasons. Photo / Getty Images

continued on A15

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FARMING OUTLOOK

15

APRIL 2018 AUGUST 2018

Farmers should start thinking about their succession plan about 20 years out, and seek professional advice early. They need to establish their intentions about what they want out of retirement — for example, do they want to stay living on the farm? — and then sit down and do the planning. This is most important.

continued from A14

succession just now where I did the previous one for the grandfather. It’s nice when you can do that — it’s a career highlight.”

NO ONE FORMULA

But he warns that no succession plan is the same as another – there is no formula for success. “They are all different — some can be very difficult. You have to take into account the circumstances, the possibilities, and the attitudes of everyone involved.” He says there is an old saying in succession circles: “Fair is not always equal and equal is not always fair”. “Successions are difficult at the moment because land values are inflated. Another major problem is high expectations of each child and the parents.” For example, if one child gets to take over the farm, when will the other children receive their share? Many will want it now, rather than having to wait 20 years, say. And if the farm remains in the parents’ trust, does that make the new “owner” just a tenant farmer? How can he or she later split it up among the children? Some succession-planning meetings ring to the tune of “what’s in it for me”; says Stewart, while in other cases there is mutual respect and understanding and a real desire to make it work.

“There are still a lot of farmers who see the land not as theirs, but as a family asset that should be passed on,” he says. “Farmers should start thinking about their succession plan about 20 years out, and seek professional advice early,” he says. “They need to establish their intentions about what they want out of retirement — for example, do they want to stay living on the farm? — and then sit down and do the planning. This is most important. “Put in place a business plan and some financial modelling to identify what’s possible and what will work. Communicate this well with the rest of the family, in open discussion. “Children don’t like to be faced with a fait accompli — sometimes the best solutions come from the children, with co-operation

between them to overcome challenges.” He says it helps if the farm is in good financial health, as debt will invariably be passed on with the asset. It might be preferable to sell an off-farm asset such as a bach, company shares or a forestry investment, to clear debt, or to earmark these assets for the other children.

OTHER PATHWAYS

In a recent ANZ Bank Agri Focus report, ANZ Agri Economist Con Williams took a look at other pathways to farm ownership in the red meat sector: equity partnership, leasing and share farming. He says the initial steps to formation, the challenges, benefits and keys to success apply equally to other primary sector businesses too.

There are still a lot of farmers who see the land not as theirs, but as a family asset that should be passed on, says Dominic Stewart.

In an equity partnership, the individuals have a share of the business based on what they have invested. Profit is distributed based on an agreed percentage (after any owner salaries). In this way, the partnership has the potential to achieve greater revenue and business growth than the partners could achieve as individuals, says Williams. Success would be based on securing the right mix of personalities, skills, cash, stock, and equipment from the various parties. He warns that the parties should have a clear exit strategy right from the start. Leasing is a contractual agreement between a landowner and a tenant to lease the land and its fixtures, usually for a fixed period of time. The lease agreement should cover maintenance and ownership of chattels, says Williams, and stipulate which party is responsible for the cost of specific farm inputs, such as fertiliser. Williams warns that if the

agreement is not clear on issues around payment, length, exit, maintenance, responsibilities, communication, etc, this can cause friction. With share farming, two parties (the landowner and share farmer) each contribute an agreed level of asset and labour and receive a proportional return. Typically, the landowner provides the land and buildings and the share farmer provides livestock, plant, and labour. However, each situation can be tailored to meet the needs of the parties involved. Such an undertaking requires a strong working relationship, so it is essential that the two parties are compatible from the off. “There is no “one size fits all” solution and the reality is that many succession plans simply don’t work,” says Williams. “The three key ingredients for a successful transition of the farm to the next generation are: a shared family vision, a strong profitable business and the separation of roles within the business during the transition process.” ■

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FARMING OUTLOOK APRIL 2018 AUGUST 2018

Throwing the baby out IRRIGATION with PAUL DYKES

Funding loss hits schemes that could have made a difference to the environment

T

he Government’s decision to end seed funding for major irrigation schemes appears to be an environmental move, yet the main schemes being affected were going to deliver improvements in water quality. “Most were trying to solve past issues,” says Andrew Curtis, chief executive of Irrigation New Zealand. “For example, the Hunter Downs scheme was planning to augment river flows into the Wainono Lagoon to help restore this culturally and environmentally significant ecosystem. “The Hurunui water project would primarily be used by sheep and beef farmers, while the Manuherikia River project in Central Otago sought to modernise the Falls Dam to meet new safety requirements, as well as providing additional water storage to allow for higher river flows and some additional storage for irrigation. “Both projects would provide a secure water supply to some of New Zealand’s most drought-prone areas.” Five projects in total are affected

by the Government decision. The Government funding through Crown Irrigation Investments was in effect a form of bridging finance, he says, as it was difficult to get eventual users of the scheme to fund 100 per cent of the establishment costs. “It would have been a 10-15 year investment horizon for the Government — then it would exit,” explains Curtis. With a 50 per cent government grant up front, the scheme developers would be able to investigate the best solutions for the project. “Take that money out, and it’s harder to come to the optimal

solution. It is now likely that the schemes that do get built will be sub-optimal,” says Curtis. The organisers would have to minimise spend because they wouldn’t know the final uptake for the scheme until much later. Even if they doubled the contribution per hectare for private subscribers, it would have to be considered as risk capital. Ironically, he says some of the initial funding came from the Community Irrigation Fund, a previous Labour Government initiative.

The Hunter Downs irrigation scheme would have helped restore the Wainono Lagoon, says Irrigation NZ CEO Andrew Curtis (left). Photo / Supplied

BAD TIMING

a time when real progress was being made on changing people’s attitudes to water use on farm and in the surrounding rural communities. “Farmers realise it has to be sorted out,” he says about run-off entering waterways. “At the end of the day, this is a complete change in their mindset.” Many rural communities had grown up based on the current situation, and people there were also now more aware of their contributions to pollution of waterways. Some of the proposed improvements would have fixed problems now evident in schemes launched 30 years ago. “Some of the newer schemes have been most effective in getting farmers to improve their environmental footprint. These farms are inspected annually by independent auditors and receive regular visits from environmental managers. We have seen a big change quite quickly with these schemes.” Some schemes were soon to complete their third-year audit, and this would provide conclusive evidence of the efficacy of the schemes, he says. “By turning off the funding tap, the Government has undermined the whole process underway in South Canterbury, for example. “This is not a surprise — it was signalled in the parts of the

He says the funding cuts come at

continued on A17

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FARMING OUTLOOK

17

APRIL 2018 AUGUST 2018

with the bath water continued from A16

coalition agreement that we saw. We hope they will reflect and work their way through the issue. “But some of these schemes were solutions to inherited water quality issues and are crucial to the well-being of some communities.” In other cases, water security was to be addressed for vineyards, horticulture and vegetable cropping. Stage 2 of the Central Plains scheme, for example, is horticulture and seed oriented. He says it is not the end of the line for these proposed schemes. There may be other funding avenues, such as the Provincial Growth Fund. “The local district councils might also have to step in, as water security is vital to their economies. “We are not for stopping. Perhaps we need to explain things better — our goals and objectives. Any scheme now has to be sustainable, and be supported by the community.”

RAFT OF BENEFITS

Soil scientist and noted communicator Dr Jacqueline Rowarth is also keen for people to look beyond the obvious when it comes to irrigation. Rowarth was challenged by some people over a comment she made last year that careful irri-

gation had environmental benefits. Her comments were about soil quality and the increase in organic matter. The dissenting argument was that irrigation enabled intensification, and intensification these days was mostly in dairying — linked to increased nitrate in waterways. Her thinking is that irrigation allows increased photosynthesis by overcoming drought, which then allows organic matter to increase and high-value contracts for fattening animals to be met. This reduces risk in the income stream, so bank managers are happy to support investment in environmental technologies, pest control and conservational projects on farm that would otherwise have been unaffordable. “Irrigation allows better economic options,” says Rowarth. “Farmers have the income to do storage of water, and pest control. In the Mackenzie Basin, by irrigating 600ha out of more than 20,000 at Haldan Station they have been able to spend an extra $100,000 to fight wilding pine, Alexandra rose, possums, rabbits and wallabies — that’s on top of

government spending. “It’s hard to be green if you are in the red. “If you are going to use irrigation, it has to be precision. That prevents nitrogen loss through the soil profile into the waterways. It keeps water in the rooting depth,” says Rowarth.

ORGANIC MATTER

“Irrigation is also important because it improves ground cover. The dust storms across the Can-

terbury Plains are now a thing of the past because organic matter has built up [thanks to irrigation]. We need to retain organic matter.” Research shows that pasture does the best job of providing the required cover. Cultivation for crops exposes the bare soil to the elements at certain stages of the crop cycle, and at these times there is great risk of soil being blown away by wind or washed away by rains.

Irrigation allows better economic options . . . it’s hard to be green if you are in the red.

Rowarth says it is disappointing to see central government backing away from some of the irrigation schemes that were in progress. “We have just lost the national approach. The winding-up of Crown Irrigation Investments means we will lose the economies of scale and the efficiencies a nationwide approach would have given.” The schemes immediately affected are Flaxborne (Ward), Hurunui Water Project (south of Hurunui and Hawarden), Hunter Downs (south Canterbury, south of Timaru), Manuherikia (Omakau) and Water Wairarapa (Wairarapa). ■

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Use irrigation with precision and you prevent nitrogen loss into the waterways, says soil scientist Jacqueline Rowarth (left). Photos / File


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Thursday, August 23, 2018

FARMING OUTLOOK APRIL 2018 AUGUST 2018

Diploma boosts self-confidence they burn out. They don’t have that knowledge behind them to support them in their journey and make sure they’re successful. “If you’re going to go into selfemployment you need to do budgets and know if you’re actually going to make any money. You need to know what you’re doing so you can avoid silly mistakes like not putting enough aside to cover your tax bill. I understand all of those issues now.”

EDUCATION

Understanding theory and business practices the real key to success

T

here’s no doubt that dairy farming is a hands-on industry, but Frankie Stevens will tell you understanding the theory and business practices that underpin every farm is the real key to success. Frankie has spent her entire life working on dairy farms around New Zealand as a herd manager and contract milker — but the pieces of the puzzle finally clicked into place when she enrolled in Primary ITO’s Certificate in Production Management in 2011 followed by a Diploma in Agribusiness Management in 2016. “It was like all the lights had come on. I was getting all these results from the cows and actually getting it down on paper and seeing it all make sense was just so enlightening. “There were so many useful things I learned about in the diploma like taxation, doing cash flows and budgets, and working out operating profit. I really enjoyed the financial side of things. And then there was HR. I’d had an HR toolkit since 2011 and it had sat on my bookshelf. Now I know that thing inside and out thanks to my diploma. Whenever we need to employ people now, I have a plan I actually utilise.”

THIRST FOR KNOWLEDGE

OVERCOMING HURDLES

Frankie admits she never particularly enjoyed school and struggled with dyslexia. She was forced to take over milking her parents’ herd on the West Coast of the South Island when she was 15 after a motorbike accident injured her father. At age 18 she went to Telford Rural Polytech and completed a Certificate in Agriculture but subsequent efforts to further her education were prevented by employers who felt it would impact on her work. Many years later, she was inspired to get back on track and into study again — and her passion for dairy farming and enthusiasm

to learn saw her speed through her diploma in just 18 months. “I did two modules at a time. When I hear other people say the diploma is so much work I just laugh because I was doing it twice as fast but still contract milking 350 cows with the support of my partner, and raising my son.”

So many people go into contract milking or share milking with absolutely no idea about issues like taxation, accounting, dealing with banks or how to handle staff. I think that’s why we lose a lot of people in the industry because they burn out.

Frankie says the diploma covered topics like resource management and included working out how to convert a sheep and beef farm to a dairy unit. Risk assessment was another important aspect, learning how to deal with situations like payout volatility, climate change and biosecurity. Understanding financial and accounting paperwork, tax requirements and different ownership structures has now given Frankie a solid foundation. “So many people go into contract milking or share milking with absolutely no idea about issues like taxation, accounting, dealing with banks or how to handle staff. “I think that’s why we lose a lot of people in the industry because

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A Certificate in Production Management in 2011 followed by a Diploma in Agribusiness Management in 2016 “was like all the lights had come on”, says Frankie Stevens. Photo / File

Frankie says being able to talk to farmers in a business sense is another huge advantage when it comes to job interviews. “I know all about how to increase profit and production, and how to decrease their expenses. Without having studied the diploma, I wouldn’t be able to have those conversations.” Primary ITO’s courses are designed for adult-directed learning, and offer a mix of hand-written notes, whiteboard sessions, class interaction and internet research. “I remember my tutor saying, ‘no question is a silly question’ and it was so true. If you didn’t know something, it was all right. We were really encouraged to help each other too which was great. There’s lots of different ways they give us the information because everyone has a different way of learning.” While doing the assessments wasn’t easy, Frankie said she enjoyed studying because she was also involved in practical farm work every day. The friends she made while studying have also turned into a valuable network and a helpful sounding board. Now aged 40, Frankie has her sights set on a Bachelor in AgriCommerce majoring in Farm Management which she hopes to start next year. “One day I’d like to work as a farm consultant and maybe even do a bit of tutoring myself. I love the idea of helping people acquire those great skills. The diploma has given me a thirst for more knowledge and I wouldn’t have even thought about doing a degree if I hadn’t previously done the diploma.” Following her study, Frankie has also become a regional leader for the Dairy Women’s Network in the Western Bay of Plenty. “A biggest thing I’ve gained is self-confidence in my ability as a learner and to have the initiative to do this sort of thing. I wouldn’t have it without having gone through the diploma process.” ■


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