Rural News 8 April 2014

Page 1

FINANCE

MACHINERY

The commercial sector is keen to start cozying up to Maori. PAGE 8

Good gear makes dairy conversion a success for Burnham farmers. PAGE 50

RURALNEWS

WORKSAFE Safety seminar sees agreement on restrictions of children on quad bikes.

PAGE 9

TO ALL FARMERS, FOR ALL FARMERS

APRIL 8, 2014: ISSUE 558

www.ruralnews.co.nz

Dairy boom far from over! SUD ES H K I SSU N sudeshk@ruralnews.co.nz

DAIRY PRICES are continuing to drop but the dairy boom is far from over. Instead, it’s the commodity cycle at play, says BNZ economist Doug Steel. At US$4033/t, the whole milk powder price is more than double the US$1800 paid to US farmers after the global financial crisis hit in 2008-09. Prices are expected to ease further as more milk floods the market but Steel predicts a payout near $7/kgMS next season – relatively high compared

to those of previous years. Long term, dairy prices will remain strong on the back of good demand for milk products, he says. At last week’s auction, the GlobalDairyTrade price index dropped 8.9% to US$4124/t from US$4563 a tonne two weeks ago, the fourth straight decline and the lowest level since August 2012. But Steel observes the 2013-14 season has been “one out of the box” and no one should expect prices to remain around US$5000/t. “We might just get prices sustained at US$5000/t one day but over the next

“Twelve months ago milk 12 months prices will ease,” he supply was squeezed and that told Rural News. kicked prices higher…. For 12 He puts this down to months very high prices were increased milk supply from the maintained. Now milk proEU, New Zealand, US and even duction is ramped up and Australia. The milk supply situprices are easing… this is the ation has changed much in the Doug Steel commodity cycle at play.” last 12 months. However, demand for dairy remains Last year New Zealand was reeling from a severe drought and an extreme strong in China and the Middle East and winter in Europe had affected produc- this should keep prices strong longertion. This year EU’s production is up 5% term. On the 2013-14 payout, Steel says and US up 1%. Steel predicts New Zealand to produce 11% more milk than last there is only a small downward risk because much of the season’s milk is season. now processed. “Whether its $8.65 or $8.55, it’s still a good payout and there’s a lot of cash around for farmers. Cashflow on farms remains strong.” Fonterra in February raised its forecast farmgate milk price for 2013-14 by 35c to a record of $8.65/kgMS.

Minister for Primary Industries Nathan Guy and Beef+Lamb New Zealand chair James Parsons, pictured together, at a field day held in Northland last week. Topics of discussion included the on-going dry spell in parts of Northland and the Waikato; as well as the next moves in the red meat sector following on from last month’s farmer vote at Beef+Lamb NZ’s annual meeting. More on both topics, and much more, in this week’s issue. PHOTO GARETH GILLATT

Kiwifruit’s comeback PA M T I PA pamelat@ruralnews.co.nz

THE KIWIFRUIT industry’s recovery from vine-killing disease Psa may become one of New Zealand’s great comeback stories. Zespri’s chief executive Lain Jager agrees with Rural News that,

viewed through the eyes of history, the recovery could well be held up as a tale of triumph in the face of possible annihilation. The full story of the turnaround will become clearer as exports of the new Gold kiwifruit export variety escalate over the next year or two. But as little as 18 months ago the situation still looked dire as Gold growers were regrafting dying vines to a new variety during a wet soggy spring which played perfect host to the Psa bacteria. Jager says it’s a story of determination and perseverance by growers, backed by a cohesive industry, good research and Government support. He even praises the banks, describing their response as “wonderful”. • More on kiwifruit pages 10 & 11.

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Rural News 8 April 2014 by Rural News Group - Issuu