Rural News Dec 17 2013

REVIEW We take a look at 2013 – the good, the bad and the ugly.

PAGE 6-7

MANAGEMENT Innovative American couple lead the way at Castlepoint Station. PAGE 23

BEEF Opportunities arise for more farmer suppliers to join Wagyu producer group.

RURALNEWS

PAGE 11

TO ALL FARMERS, FOR ALL FARMERS

DECEMBER 17, 2013: ISSUE 552

www.ruralnews.co.nz

Sheep and beef vital

Danone’s move SUD ESH K I SSUN

P E TE R BU R K E peterb@ruralnews.co.nz

A RAMPANT dairy sector is in danger of affecting the ‘self-esteem’ of the sheep and beef sector, says Beef + Lamb New Zealand chairman Mike Petersen.

He told guests at BLNZ’s Christmas function last week that New Zealand is not just one big dairy farm and in fact 80% of the pastoral land is under sheep and beef farming. Petersen says the meat industry often cops a lot of flak from the media and it needs to build self confidence.

“We need to think about the importance of the sheep and beef sector. Part of BLNZ’s role is to make sure we do build confidence in the sector because the red meat sector is a crucial part of the landscape in New Zealand.

“So while you drive down the length of the country and only see dairy cows, just remember the vast proportion of farmland out there is sheep and beef.”

Petersen also says the sheep and beef sector is a good business and there is money in sheep and beef farming.

“In fact, the sector is alive and well… very vibrant, 88-90% of the [farming] industry. The dairy industry is not the dominant player….

“The sheep and beef sector is investing in individual companies in differentiated products and singularly trying to move value to consumers and also back to farmers. In many cases they

LESS LAMB Beef + Lamb New Zealand economists Rob Davison and Andrew Burtt pictured with the annual lamb crop report, which says the total number of lambs tailed this spring was 25.5 million – making it the secondsmallest lamb crop since 1960. While the numbers are down, Davison and Burtt say they are “pleasantly surprised” it’s not a lot worse. The lower lamb kill means there will be 19.5 million lambs available for slaughter in the 2013/14 season, the third-lowest number of lambs available for export since 1960-61.

Full report page 10

are doing that very well.”

According to Petersen, the red meat sector has made a lot of progress and investment and has done a lot of thinking about how it might perform better.

“With the universities, CRIs and companies playing a role, we have a sector that is here for the future and is fighting hard to do better.”

Petersen says while he applauds the success of the dairy industry and its achievements, other sectors need to reflect on this.

“The rest of us – not just the red meat sector – run the risk of pulling ourselves apart at the expense of dairy

because we are frustrated we aren’t earning the same as dairy. It’s not just in the sheep and beef sector, but also the deer sector that farmers are also getting frustrated over land use change.

“The dairy industry is a runaway train at the moment, going phenomenally well, but we all need to remind ourselves that large parts of New Zealand will be in other land uses. We must continue to build those industries over time.”

Petersen says he doesn’t want New Zealand to become one big dairy farm, but equally he applauds what that dairy industry does.

sudeshk@ruralnews.co.nz

FONTERRA HAS denied building a multi million-dollar warchest for a court battle with French dairy giant Danone over the false botulism scare-related product recall.

Chief executive Theo Spierings says a commercial proposition is on the table and it is waiting to hear back from Danone. “The ball is in Danone’s court,” Spierings last week told Rural News.

Danone is the parent company of Nutricia Australia New Zealand which produces Karicare infant formula, one of the affected and recalled products. Media reports suggest Danone is seeking millions in damages from Fonterra.

Asked if Fonterra’s decision not to increase the 2013-14 forecast payout was tied to a possible looming legal battle with Danone, Spierings said “that is pure speculation. We have a commercial proposition on the table and we’re waiting to hear back from Danone.”

Spierings still hopes for a commercial deal rather than a legal deal.

The co-op has sealed commercial deals with seven of the eight companies caught up in the false botulism scare.

The contamination was confined to 38 tonnes of WPC80 made at Fonterra’s Hautapu plant near Cambridge and first picked up at a plant in Australia. It was used to make infant formula, juice and dairy beverages, yoghurt, body building powder and animal food.

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RURAL NEWS // DECEMBER 17, 2013

NEWS 3 ISSUE 552

www.ruralnews.co.nz

TAF stumbles at first hurdle?

SU DES H KISSU N sudeshk@ruralnews.co.nz

NEWS ������������������������������ 1-13 MARKETS ��������������������� 14-15 AGRIBUSINESS ������������ 16-17 HOUND, EDNA ������������������� 18 CONTACTS ������������������������� 18 OPINION ������������������������18-20 MANAGEMENT ������������21-23 ANIMAL HEALTH �������� 24-25 MACHINERY AND PRODUCTS ������������������ 26-29 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 3855, Shortland Street, Auckland 1140 Published by: Rural News Group Printed by: PMP Print CONTACTS Editorial: editor@ruralnews.co.nz Advertising material: davef@ruralnews.co.nz Rural News online: www.ruralnews.co.nz Subscriptions: subsrndn@ruralnews.co.nz ABC audited circulation 81,232 as at 30.06.2013

THE FONTERRA board’s decision to interfere with the milk payout shows TAF has stumbled at its first hurdle, says agribusiness expert Keith Woodford, Lincoln University.

The board’s decision to keep the farmgate payout at $8.30/kgMS despite a $9 recommendation by the co-op’s milk price panel strikes at the fundamentals of its capital structure, he says.

“In stating that they are now proposing to retain 70c from what the projected milk price would otherwise be, if calculated as per the milk price manual, Fonterra is demonstrating that TAF has stumbled at the first major hurdle,” Woodford told Rural News.

“What this decision means is that retentions are in effect going to come from the milk price, despite earlier statements from Fonterra that this would not occur. Even more important is this means that the rules for allocating income between milk price and return to investors have been cast aside.”

Woodford questioned the milk

pricing rules underpinning the integrity of TAF. We are now seeing the board – rather than a set of rules – determine how money will be allocated between farmers and investors, he notes. “And that opens the door to ongoing tension between farmers and investors, including intensive lobbying of the board by investors.”

However, a Fonterra spokesman says the suggestion that the board’s decision to maintain the forecast milk price at the record level of $8.30 has something to do with TAF is incorrect.

Stream returns have nothing to do with TAF, he says.

“It is important to understand that retentions are a vital part of Fonterra’s ability to invest in future growth, stay on strategy and ensure the cooperative maintains its global position.

“Fonterra’s [transparency] about its decision to maintain the forecast at $8.30 demonstrates the integrity of the process for setting the milk price.”

He points out that about 95% of those who have a financial interest in the cooperative are in fact farmer share-

holders. Obviously they benefit from the payment of dividends, he says.

“Twelve months on, TAF is meeting its two goals of providing permanent stable capital for the cooperative and more flexibility for our farmers.

“The drought in the second half of the year was the worst in 70 years. It hit the cooperative and our farmers hard.

But it would have been a lot tougher without our current capital structure.

“Potentially the cooperative would have been facing the prospects of paying out about $130 million to redeem shares. Instead, our permanent stable capital structure meant we could support farmers with a lift in the advance rate. Our new capital structure has also enabled us to drive transactions to support our volume and value strategy.”

While keeping the forecast payout at $8.30/kgMS the board also lowered the dividend forecast for the 2014 financial year to 10c/share.

The co-op says it is in an “extraordinary” situation, with the gap between prices for milk powders compared to cheese and casein being greater than ever.

Wool remains volatile A VERY volatile wool market is leading to a seesawing of prices for different types of wools, says Malcolm Ching, from Wool Services International (WSI).

Crossbred wool prices spiked at $5.85/kg about a month ago and have now dropped to $5.15. But they are still 30% ahead of last year when the average price was $3.80/kg.

“Long term we think there will be better levels overall than the previous season but I doubt prices will go back up to the peak prices we’ve had in the last three months,” says Ching, WSI’s Purelana manager.

“You are likely to see short spikes, and things drop back quickly for certain types. So rather than a steady lift or a steady drop there is likely

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to be seesawing for individual types depending on market demand.

“It is getting very, very difficult for us to predict what is going to happen now because there are no buffers… nothing to smooth out what normally happens in the marketplace, so we are in the winds of fashion, currency, supply, demand and client sentiment. It makes life very difficult.”

Long term few stocks are held by anybody – farmers, exporters, brokers, merchants and the manufacturing pipeline. But customers are holding off because prices got overheated.

“There was not enough wool around, and we’ve had a drought affected supply this year. Everyone

was telling us the stock numbers were about the same as last year or very close. That wasn’t the case.

It got slightly oversold, pressuring prices dramatically locally. It made clients offshore sit back and say ‘this is too dear for us and if it keeps on at these levels, we’re out’.

“Markets like China did stop buying for a while. They could afford to do so because they bought a lot of wool and it had gone through first stage processing in China.

“That’s slow to go out at the consuming end. The manufacturers are now using other textiles or wools from other origins that are cheaper.”

The Asian buyers will have to come back to our market.

– Pam Tipa

Woodford did not criticise the board’s decision to take 70c off the milk price.

Clearly something had to be done to Keith Woodford maintain the integrity of the balance sheet in an extraordinary situation, he says.

“However, as long as Fonterra cannot pay out the full milk price as calculated by the agreed formula then there should be zero dividend,” he says.

“The decision to keep it at 10c rather than zero can only be interpreted as an attempt to appease the investors, who will already be more than a little bit cross.

“My key point is that the necessary decision to lop 70c of the projected milk price shows that TAF was not adequately tested under wide-ranging scenarios. And it has now come up short. The long term implications of this are profound.” @rural_news

facebook.com/ruralnews

Deer PGP not there yet!

DEER INDUSTRY New Zealand’s application for a Primary Growth Partnership scheme has not been approved for funding, as reported in Rural News (December 3) and other publications – merely approved to proceed to business case development, Deer Industry New Zealand points out.

“The PGP’s independent advisory panel considered the deer industry application and has recommended that the industry start working with MPI to develop a detailed business case for the investment, which will then go to the director-general for final approval.

“Only after that stage has been successfully completed would a contract be entered into which would allow a PGP programme to start and any funds from the government to be directed to that deer industry programme,” DINZ says.

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RURAL NEWS // DECEMBER 17, 2013

4 NEWS

New factory secures suppliers A N D REW SWA LLOW andrews@ruralnews.co.nz

OCEANIA DAIRY, the wholly owned subsidiary of China’s largest dairy company Yili, has secured half its target first year supply for the $214m factory it is building in South Canterbury.

A group of suppliers

with 20 farms between them has signed for three years of Oceania paying Fonterra’s milk price plus 10 cents.

“We are proud to be the inaugural suppliers to Oceania Dairy Ltd,” Aad van Leeuwen says. “With a world-class processing plant and strong ownership structure [it] offers

local farmers choice and opportunity. This is a real shot in the arm for the local economy.”

Van Leeuwen told Rural News there are seven or eight individual farmers in the group. “Basically it’s the group that was supplying NZDL and has been supplying Synlait for the past three years.”

Aad and Wilma van Leeuwen say they are proud to be suppliers to the new dairy company.

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Between them they’ll supply at least six million kgMS, 80% of the payout made “upfront”, says van Leeuwen.

Oceania’s factory is at Glenavy, about 20km south of the former New Zealand Dairies (now Fonterra) plant at Studholme.

Van Leeuwen was instrumental in that development in 2006/07 and has sold the land to Oceania for its factory. His farms will supply about half that 6mkgMS. Oceania chief executive Aidan Johnstone says the firm is delighted to have contracted Aad and Wilma van Leeuwen among its first suppliers.

“They are industry leaders and excellent farmers. They typify the sort of suppliers that we are looking to work with.”

Oceania says it will contract up to 40 local

Record powder prices cause discomfort

farmers for the 2014-15 season to procure 130 million litres of milk. At capacity, targeted for the 2016-17 season, it will process 300 million litres/ year, making 47,000t/year of milk powder for export to China where Yili will make it into infant formula.

The factory will employ about 70 permanent staff when complete, most recruited locally.

Johnstone says milk suppliers will have the security of knowing they are contributing to a firstclass product for a substantial and progressive single end-user client.

“That provides suppliers with security and confidence to invest in their businesses.”

Construction of the factory is on schedule and it will take its first milk next July.

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FONTERRA IS reviewing its business plans and asset base in view of a widening gap between the prices of milk powders and other dairy products.

Fonterra chief executive Theo Spierings says high milk powder prices is the “new reality” for the dairy industry.

Spierings told Rural News that Fonterra will look at overseas milk pools to produce more milk powders to meet a growing appetite in China and emerging economies in Asia and North Africa.

Over the next two months the co-op will review its asset base and draw up a business plan.

Economic factors in Europe, the US and Japan had meant cheese prices had not kept pace with milk. While the record high prices for milk powders is good and has pushed the milk payout to a record level, it also pushes up the cost of production of value added products. Over the past few months the price difference between milk powders and cheese and casein has had an $800 million effect on the co-op’s balance sheet.

Last week the co-op was forced to take the unprecedented step of holding the milk payout at $8.30/kgMS despite a milk price panel’s recommendation of $9/kgMS. Fonterra also said its earnings before interest and tax would fall to $500 m to $600 m in the year to July 31, 2014 – down from $1 billion a year earlier – mostly because of higher costs imposed by strong dairy prices, which are an added cost to its manufacturing activities.

Spierings says until recently the biggest difference between powder and cheese prices was $150m. The $800m gap is not sustainable.

About 70% of Fonterra plants in New Zealand make milk powders while 30% produce cheese and casein.

“We have to act now; doing nothing in this is case is not an option,” he told Rural News. “We have to ask ourselves whether this huge price gap will be around just for a few weeks or are we looking at the new reality? I suspect we are and the key strategic question we have to address over the next two months is how do we deal with it?”

Spierings says it’s too early to say whether Fonterra could shut down some cheese and casein plants in New Zealand. But he warns volatility has become the new norm, and Fonterra must have the flexibility to respond quickly to shifting global demands for dairy nutrition.

“We need to continue investing in greater flexibility in our manufacturing assets so we can meet changes in global demand and commodity cycles. The new market realities mean new opportunities, and we must go after them now as we have in the past by driving forward with our volume and value strategy.”

Since Fonterra was formed it has not built any new cheese or casein plants, but it has built more milk powder plant. A new dryer has been approved for Pahiatua, work is underway on a UHT plant at Waitoa and a new dryer was officially opened at Darfield this month.

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RURAL NEWS // DECEMBER 17, 2013

NEWS 5

Food safety boost from WPC inquiry pamelat@ruralnews.co.nz

SOME OF the greatest risks to our food safety reputation lie ahead, says a report to Government on the Fonterra whey protein concentrate (WPC) contamination scare.

Food Minister Nikki Kaye told Rural News the Government agrees with that and so is adopting all recommendations of the independent inquiry, allocating $8-12 million a year

to strengthen systems.

“Our food safety systems are world leading and it is a huge relief for the Government to have this report saying that,” Kaye told Rural News. “But we recognise some of the greatest risks lie ahead.”

A notable proposal given the go-ahead is a $5 m per annum food safety science and research centre – possibly a “virtual” centre, says Kaye.

Fonterra chief executive Theo Spierings says the

More for China THE GOVERNMENT will post four more senior people to China and six to other developing markets as a result of the WPC report.

This is will cost $4.4 million initially, rising to $8.2 m in three to four years.

It had already increased the market access team from eight to 16 immediately after the botulism scare.

The new appointees will be seniors with diverse skills including technical and trade, says Food Safety Minister Nikki Kaye. “You need people with wide understanding of issues from food safety to changing market access rules.

“The other key expenditure is $1 million to improve dairy capability and a working group will be set up to develop a strategic plan,” says Kaye. “And we have committed $250,000 to establish a food safety and assurance advisory council. That’s likely to have industry and academic representation. The purpose is to scan for emerging risk… this council will have a mechanism to scan for those risks.”

The Government has also announced $250,000 to fast-track work underway to simplify food laws.

That includes a working group on traceability looking at the food safety supply chain.

Kaye says the report also highlight the Food Bill, legislation that’s been in train over successive governments for 10 years. “I have committed today to that bill passing within the first few months of next year,” says Kaye.

proposal is “exciting” and wants to be part of it.

Kaye says $7 m is spent annually on food safety research, but the report is clear this funding needs to increase. “We agree with them. At least $5 m will be spent on the centre and it could be more. There will be contributions from industry and government.”

The report suggests several models. “They have suggested it could be

a virtual centre to make sure as much as possible is spent on the research rather than the actual buildings,” says Kaye.

“We have to work through those issues.” She will work with the Minister of Science and Innovation, Steven Joyce, to develop the best model.

Spierings says Fonterra would welcome the opportunity to commit its expertise to the project. “Fonterra must play

a lead role in creating a new global benchmark for food safety and quality,” he says. “We have learned critical lessons from a difficult experience, and the findings of this forwardlooking review are an important step in our own reputation rebuild.”

Kaye told Rural News it was “very positive” that Fonterra has signalled it wants to contribute to the centre. She will discuss the offer with Joyce.

Food Safety Minister Nikki Kaye agrees that some of our greatest risks lie ahead.

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RURAL NEWS // DECEMBER 17, 2013

6 NEWS

2013 – a year in review: the Another year has passed, yet another busy one for the agribusiness sector.

In this last paper for 2013 Rural News’ editorial team reviews the year and its highs and lows.

THE BAD

‘KICK EM in the guts Trev’ award: AgResearch for the way it handled its relocation strategy. Another crop of good scientists gets dumped on and New Zealand loses again. While the CRI may have a point with its relocation strategy, it seems to many that the company is more interested in paying dividends to the Government than serving farmers’ needs.

‘Missing in action’ award: John Wilson, Fonterra chairman. Happy to front new milk in schools programmes, but he went into hiding when the proverbial hit the

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fan at Fonterra during the botulism botch-up.

Biggest loser of the year: Gary Romano, after he walked (voluntarily or not) the plank following Fonterra’s botulism saga. Second biggest: New Zealand – or was it the biggest?

Biggest botch-up of the year and the people’s choice: Fonterra for botulism botch-up or was it notulism? Inept in every way, from the first sign of trouble to the appalling communication of the crisis at all levels of the organisation.

Second biggest botch-up:

MPI for not changing the old MAF paperwork for meat exports to China.

Meat sat on wharves for weeks and exporters lost money while authorities haggled over an acronym. A ‘high performing department’? Yeah right! Not high and not performing. Oh, and what’s in our PKE? A sheep’s foot, a deer’s hoof or a fish?

Worst PR effort in the rural sector: MPI by a country mile. They never failed to underperform. The struggling government department even spent $250,000 on buying-in spin doctors from outside, to no avail! Can anything be ‘Dunne’ about this?

Fonterra is at least trying to change its ways, but still has a fair way to go.

“Most to prove” award: Ravensdown – having finally pulled the pin in Australia and shuffled some key people the refocused fert coop could finally start to give Ballance a run for its money.

central government.

Best score: Dairy Women’s Network again for attracting DeLaval NZ’s managing director Zelda de Villiers as its new chief executive.

Politician of the year: Amy Adams for driving the RMA and water reforms and putting regional government on notice for some suboptimal performance. A very smart politician.

Grace under fire: Nutricia ANZ managing director Corine Tap, facing hysterical mums and massive product recall; but none of it was her fault.

Leading the way: Miraka for notching up a deal with the Chinese this year, while Fonterra was busy apologising to them for its numerous cock-ups.

Top lobbyist: HortNZ who got more dogs, more X ray machines, better biosecurity.

Biggest turnaround: Also ran a great conference and The kiwifruit industry, from survival to revival in the face of Psa destruction. vastly improved its relationships with

Runner-up: MIE for trying hard to get reforms in the meat industry. Harder than herding cats.

Trying hard award: Nathan Guy for doing his best – despite taking advice from a department (MPI) that has been restructured so many times that too many good people have gone.

THE GOOD

Runner-up: Damien O’Connor who did his best despite belonging to a party more inter-

RURAL NEWS // DECEMBER 17, 2013

NEWS 7

good, the bad, the ugly ested in the rights of unions and teachers than the primary export sector.

Right guy, wrong party.

Farming leader: Hard to go past Bruce Wills who has turned Feds from a feral, grumpy lobby group to one respected nationwide especially on environmental issues.

Hard act to follow: Mike Petersen, chairman of Beef + Lamb NZ. After six years at the head of the levy-body table he’ll do New Zealand proud in his new trade ambassador role.

Agribusiness person of the year: Kingi Smiler continues to impress

by his leadership in Maori agribusiness. Others to watch are Gerard Hickey of Firstlight Foods and Dion Tuuta of PKW.

the bus were equally impressive.

Ag event of the year: Hard to beat the Ahuwhenua Awards for the top Maori farmer. Attracting 850 people to an amazing gala dinner is pretty impressive.

Best communication of science: Massey and Lincoln universities and DairyNZ. Always willing to help the media and farmers and innovative in the way they communicate. MPI take note!

Best PR in rural sector: Feds, if you base it on the number of media releases and their willingness to front people. DairyNZ, Rural Women NZ and Massey University are also very much up there.

THE UGLY

Young person: Lincoln University undergraduate Brigitte Ravera for her brilliant endorsement of the opportunities agriculture offers young people, spoken during a bus tour organised for teachers and careers advisors. The other young people on

Knockers of the year: Fish and Game and Massey University’s Mike Joy who seem to forget that moaning in the media doesn’t earn export dollars, nor does it help our export sector.

Greatest hysteria: Anti-PKE groups using some media to foulmouth the key supplement feed in the dairy sector. MPI reacts by agreeing on greater screening of PKE. Idiots of the year:

The small minority of dairy farmers who continued to pollute waterways and failed to respect the environment, so tainting New Zealand’s image. It’s time Fonterra and other dairy companies made them walk the plank (a la Gary Romano).

Greatest challenges for 2014: Getting unity in the meat industry, making MPI a high performing government department, stopping Mike Joy and his green mob from badmouthing farming, encouraging young people to make a career in agribusiness, and getting Fonterra’s John Wilson to front the bad as well as the good news .

A bouquet: To the big majority of farmers who have met their environmental obligations.

IF ONLY...

Dr Mike Joy would say one good thing about dairying farming.

Nathan Guy would stop referring to MPI as being a “high performing government department” until it is.

Fish and Game would accept they

are not environmentalists; they’re there only to kill and catch fish.

Fonterra would fire some ‘feral’ dairy farmers.

The CRI’s would do some serious ‘technology transfer’ and have regular interactive sessions with farmers.

The meat industry would unite and farmers would fully support that.

Someone would take a real leadership role in the primary sector.

MPI would stop referring to Maori as “having potential”. Maori are already performing well and, yes, they have potential, but so do many non-Maori farmers.

26/11/13 3:53 PM

RURAL NEWS // DECEMBER 17, 2013

8 NEWS

Australian farmers happy with decision to keep grain giant local SUD ES H K I SSU N sudeshk@ruralnews.co.nz

AUSTRALIAN GRAIN farmers are backing the Federal Government’s decision to keep the country’s largest agribusiness in local hands.

NSW Farmers’ Grains chairman Daniel Cooper says the Federal Treasurer Joe Hockey’s decision to block US giant ArcherDaniels-Midland’s (ADM) A$2.2 billion takeover of GrainCorp was the right decision.

GrainCorp handles 75% of the grain grown on the east coast of Australia, Cooper points out.

“Had the sale to ADM been allowed, the inability of grain traders to compete would have increased concerns about compe-

tition for farmers’ grain.

While we appreciate our agriculture industry needs investment, ADM was not a good match for GrainCorp and growers margins could have been further eroded.”

ADM is the world’s largest corn processor and holds a 19.9% stake in GrainCorp, which is listed on the Australian Stock Exchange. ADM says it is disappointed with Hockey’s decision.

“We are confident our acquisition of GrainCorp would have created value for shareholders of ADM and GrainCorp, as well as grain growers and the Australian economy,” says ADM chairman and chief executive Patricia Woertz.

But farmers think otherwise. NSW Farm-

ers first flagged its concern about the takeover as early as October 2012.

The National Party, a partner in the ruling Coalition, also opposed the sale.

NSW Farmers president Fiona Simson says the association had told the current and former governments of farmers’ concerns about ADM’s takeover bid. The association and other industry bodies including Victorian Farmers Federation, Agforce Queensland and Grain Producers Australia had met with the Foreign Investment Review Board, the Government and other stakeholders to ensure farmers’ concerns were understood.

“The decision is not the end of line for all the issues in our grain indus-

Australian Federal Treasurer Joe Hockey has rejected ADM’s A$2.2 billion takeover offer for GrainCorp.

try; we still have a lot of work to do. But it is great that the Government has listened to us because our

farmers would be affected the most by entrenching a low level of competition in the grain market.”

Agriculture Minister Barnaby Joyce, deputy leader of National, also welcomed Hockey’s decision, saying that keeping GrainCorp Australianowned does not mean foreign investment in agriculture is not welcomed.

“I recognise foreign investment is important for growth and innovation, and contributes to the prosperity of local businesses, rural communities and the broader economy. However, it is critical the Government ensures these investments are not contrary to our national interest and provide flowon benefits for farmers and rural communities.”

GrainCorp’s chairman Don Taylor says Hockey’s decision “will have enduring implications that will be felt not only by our shareholders but by the entire industry”. “Australian agriculture has been prevented from realising the potential benefits from the significant capital

ADM would have invested in the long term future of the industry.”

Australia’s shadow treasurer Chris Bowen says the foreign investment process should be independent and free from political interference. @rural_news facebook.com/ruralnews

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RURAL NEWS // DECEMBER 17, 2013

NEWS 9

Burn-off breakout could be arson A N D REW SWA LLOW andrews@ruralnews.co.nz

ARE YOU an arsonist? You may be any time soon.

Changes to the Crimes Act mean if you lose control of a burn-off you could be convicted of just that, says Ashburton District principal rural fire officer Don Geddes. He sounded this warning to growers at a Foundation for Arable Research field day earlier this month.

“If you light a fire recklessly and it damages other people’s property that can now be considered arson,” Geddes warned.

While farmers would doubtless argue they didn’t light the burn-off recklessly, his experience is that plenty do, failing to meet district council requirements for fire-

break width and quality, wind limits and preparedness to deal with escapes.

Knowledge of those requirements, which vary district to district, is often found wanting, so check what’s required with your local council, Geddes stressed. “You probably think you know all the requirements, but I’d challenge that.”

In Ashburton district, council policy is automatic prosecution, regardless of circumstances, if a 111 call results from a breach of burn-off requirements, he points out.

And prosecution isn’t the only thing to worry about: the fire service can recover all costs incurred fighting an escaped burnoff, and those can be considerable. One nor’west day saw $130,000 racked

up in Ashburton district alone.

“And most of those fires were avoidable…. So when it comes to dropping the match, have a think about the consequences if it gets out.”

That could be up to 14 years in jail if it’s deemed arson and life is endangered, or up to seven years if just property is damaged.

• More from the FAR field day: p21

Cropping farmers could soon be liable for any damage done from crop burn offs.

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RURAL NEWS // DECEMBER 17, 2013

10 NEWS

Lamb numbers take a hit P E TE R BU R K E peterb@ruralnews.co.nz

LAMB NUMBERS are down this season by 1.3 million – 4.7% fewer than last spring.

The total number of lambs tailed this spring was 25.5 million, making it the second-smallest

lamb crop since 1960; only 2010/11 was lower.

While the numbers are down, Beef + Lamb New Zealand economists Rob Davison and Andrew Burtt say they are “pleasantly surprised” it’s not a lot worse.

The lower lamb kill means there will be 19.5

million lambs available for slaughter in the 2013/14 season, the third-lowest number of lambs available for export since 1960-61.

The overall lambing percentage for the season is down to 120.8%, which is 3.8% lower than 2012 – but the spread between the islands is marked.

In the North Island, the lambing percentage was 117.6%, in the South Island 123.6%.

Davison also notes the number of lambs from hoggets was down 17%, though lambs from hoggets make up only 5% of the lambs born.

“The kind winter and

Lamb numbers this year are forecast to be down by 1.3 million from 2011-12.

spring delivered more lambs than we expected.

The earlier comments we tended to hear, perhaps about the disastrous scanning percentages because of the drought, didn’t really materialise,” he says.

“What saved the situation was the drought ended in late autumn then we had a warm winter. So that resulted in a very high survival of lambs and the ewes were also in quite good condition.”

While the drought impacted lamb numbers this season, interestingly the weights of lambs last season were the thirdhighest on record at 18kg.

“So weights were quite low during that drought period when light lambs were being drafted out of some of the badly affected drought regions. But come late autumn, that started to catch up again,” says Burtt.

The areas that took a hammering, in lambing percentages, were central North Island east of Taihape and Hawkes Bay. However, despite some

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Davison is predicting farmers will average $100 for a lamb this season, up $15 on last season. With weights also up, the impact on most farmers will not be as great as anticipated despite the strong exchange rate.

Also shown by the survey is that the sheep flock in New Zealand is getting ‘younger’. Burtt says this is due to a high mutton kill some years ago and that the hoggets not mated this past season will go into the flock next season.

Davison says farmers managed better through the recent drought than through past droughts.

BLNZ held information meetings on the drought around the country and a lot of information was provided on-line. @rural_news facebook.com/ruralnews

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RURAL NEWS // DECEMBER 17, 2013

NEWS 11

Firstlight beefs up interest in grass-fed quality product P E TE R BU R K E peterb@ruralnews.co.nz

FIRSTLIGHT FOODS, which markets high-value, grass-fed Wagyu beef to the world, says it has opportunities for more farmer suppliers to join its venture – the Firstlight Wagyu Producer Group.

The Hawkes Bay company started its Wagyu beef operation in 2011 and now has farmers raising 13,000 cattle nationwide. And 20,000 deer have been supplied to its Firstlight Venison Producer Group, operating for eight years.

Managing director Gerard Hickey has been talking to farmers about joining the group.

“For farmers wanting to retain involvement with their product through to the market and get rewarded for quality the Firstlight Wagyu concept is an opportunity. We also provide for farmers who want the benefits of price certainty, which to some may be a bit frightening.

“We can give farmers a price 12-18

months out right now. We hedge foreign exchange and have forward orders for product.”

Firstlight operates a model unique to the New Zealand meat industry, in which farmer shareholders own 50% of their respective producer group and have direct transparent linkages to their customers in 20 countries. Firstlight grass-fed Wagyu beef and venison is sold directly to end customers.

Hickey says that while many beef finishers are natural traders, some finishers also want a degree of stability in their system and sometimes an opportunity to reduce the number of bulls being farmed. The producer group structure also offers opportunity for breeders and store cattle farmers to retain an interest in their cattle after they have sold them to a finisher. It offers an opportunity for both groups of producers.

“We are looking for ‘smart’ farmers who proudly wish to retain an attachment to their product after it has left their property,” Hickey explains. “For example, we took half a dozen of our

farmers to the US this year to cook in the stores and meet their consumers.

They were farmers interested in where their product was going, who was eating it and they wanted to tell consumers how this special Wagyu beef is produced. The feedback from the consumers gave the farmers a real buzz.”

While Wagyu beef in itself is not new – the Japanese have been producing it for generations – the concept of having Wagyu cattle grass-fed is special to New Zealand and one that Firstlight Foods have sought to capitalise on. The company says there is a growing movement in the US against intensive grainfed production and the widespread use of antibiotics and hormones in beef production.

“We own the space as the go-to country for pasture-raised protein and with grass-fed Wagyu beef we are producing a product which delivers on the promise of consistently tender, juicy and tasty beef,” says Hickey.

Firstlight has Wagyu farmer supplier hubs in Northland and the East Coast

and others are being developed in King Country/Waikato, central North Island and Manawatu/ Hawkes Bay/Wairarapa. A new hub is planned for Canterbury in 2014.

Hickey says average farmer returns for Wagyu beef for 2014 are expected to exceed $5/kg and some in the winter months to fetch $5.50/kg.

“Premiums for higher quality are also available, some reaching as high as $7/kg. The higher the quality, the higher the price.”

Firstlight Foods earlier this year entered into a $23 million It Primary Growth Partnership scheme with MPI. Its aim is to move New Zea- Firstlight Food’s Gerard Hickey is seeking farmer suppliers to join its Waygu venture. land away from producing manufacturing beef products to high aims to build the producer group to quality, high-value cuts and develop- 180 farmers by the end of the scheme in 2019 and deliver $200 million ecoing the value chain.

It is also looking at improving genet- nomic benefits by 2029, principally to ics, on-farm growth and international rural areas.

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RURAL NEWS // DECEMBER 17, 2013

12 NEWS It won’t happen again! checks the truck and trailer not just the truck. pamelat@ruralnews.co.nz “[Further], we have welded shut all the cleaning pipes on nonTHE PROBLEM of a non foodfoodgrade tanker so we cannot grade tanker contaminating milk connect a non-foodgrade tanker tankers via the cleaning process to our cleaning system.” cannot happen again, says Walls says the incident Scott Walls, Fonterra general showed the systems worked manager operations, Lower “We detected it well. “We detected it quickly North Island. which is great. Obviously we Fonterra has completed quickly which is great. don’t want it to happen in an inquiry into an October Obviously we don’t the first place so we’re trying incident in which 14 tankers to eliminate it at the cause. was contaminated with want it to happen in The same problem cannot mud and dirt at its Eltham, the first place so we’re happen again.”

Taranaki plant, requiring The automated system 150,000L of milk to be trying to eliminate it at gave an initial indication of a dumped. the cause. The same problem then a visual “The root cause of the find problem cannot happen check picked up the dirt and was that we had a contractor gravel. who accidentally connected again.”

About 14 milk tankers a non food-grade trailer to a had gone through the cycle food-grade truck and tanker,” with the affected water – six Walls told Rural News. of them had collected milk. The “That was the beginning of the the country and implemented mistake was picked up within corrective action so they now problem. The second finding we about 44 minutes. discovered is when that non food- record truck-and-trailer units when they are assigning vehicles grade tanker came on the site it @rural_news to their drivers. So the driver was able to be connected to our facebook.com/ruralnews cleaning system, which put 1-4kg of dirt and gravel into our system.

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Irish eyes our dairying!

Proudfoot says New Zealand must be very aware that the Irish are already peterb@ruralnews.co.nz well into articulating a sustainability BEWARE, THE Irish are eyeing our story about their products and we need dairy markets in Asia and they’ll be in to ensure we are just as good as them in our patch soon according to the head of that respect. They are doing this though a scheme called ‘Origen Green’. He says agribusiness at KPMG. Ian Proudfoot has just returned from it’s something New Zealand needs to Ireland where he’s been meeting with look at.

“It’s a scheme which most of their farming leaders and politicians as well as KPMG staff. He says with a just over producers have signed up to. It extends a year to go before the restrictions on back onto the farm and each farm then milk production are lifted in the EU, the effectively gets its own carbon footprint Irish are gearing up to take advantage of done as well as how it can reduce its carbon footprint this. He says New Zealand needs by improving to move quickly productivity and to counter any profitability. marketing push by “It’s very much the Irish and other tied to improving milk producers in commercial Europe. outcomes, but it The milk is a market driven quotas were put scheme designed in place in 1984 to meet the needs in response to of the consumers. excess production Whichever way you in Europe which look at it we don’t led to the so called have anything we ‘milk lakes’. But can articulate in the Ian Proudfoot same way and to KPMG head of agribusiness Ian Proudfoot. says the Irish my mind we need in particular are to work out how do looking to increase stocking rates and that and fairly quickly.” are generally growing production. A Proudfoot is critical of New Zealand’s lot of investment is going into new ‘100 % Pure’ brand, saying while it might milk processing plants and the Irish be fine for tourism it doesn’t present a are casting their eyes around for new good picture of New Zealand’s unique markets for their increased production. food production.

“I am told there is a feeling of It fails to tell the story about what is optimism that the Irish dairy industry is most important in our food production about to be unleashed. When you look at – safety and efficacy. the product they are going to produce, New Zealand has not had to “work too it’s a high quality high premium product hard to get customers”, Proudfoot says, very similar to the product we produce because we have had a unique product and they’re going to look at the same to offer. But he predicts we’ll have to growth markets we sell in. That means work harder to win the confidence of New Zealand is going to face more consumers once the Irish and others competition in the key markets.” start marketing their products in Asia.

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RURAL NEWS // DECEMBER 17, 2013

NEWS 13

Korean FTA to beef up Aus exports SUD ES H K I SSU N sudeshk@ruralnews.co.nz

AUSTRALIAN BEEF exporters are the big winners in a free trade deal negotiated this month with South Korea.

Federal Agriculture Minister Barnaby Joyce says the Korea-Australia Free Trade Deal (KAFTA) will give producers and exporters a more level playing field on which to build market share.

Modelling by the Centre for International Economics forecasts that by 2030 Australian agricultural exporters could expect to sell 73% more product to Korea than if the agreement was not in place The modelling also showed that KAFTA would double its current levels of beef exports to Korea by 2030, expected to be worth an extra A$846 million a year.

Joyce says Korea is its largest market for sugar (A$495 million in 2012), the third-largest market for beef (A$646 million in 2012), and an important market for dairy, grain and horticultural products.

The Australian Government will now work with Korea on the formal ratification process during which details of the agreement will be made available – a process anticipated to be underway in the first half of 2014.

Australia is the largest supplier of beef to Korea but its major competitor,

the US, is already benefiting from beef tariff cuts from its 2012 FTA with Korea. In beef, it has a 5.4% advantage over Australia.

The KAFTA will help Australian exports compete on a more level playing field and will enable Australian beef producers to capitalise further on Koreans’ growing taste for Australian beef, Joyce says.

Australian cheese producers will also gain dutyfree access to Korea’s growing middle class market. Australian cheese exports face Korean tariffs up to 36%.

The FTA is also good news for Australian wine producers. Sparkling, red and white wines are subject to a tariff of 15% but wine from the US, EU and Chile enter duty free. The FTA will give a boost to the wine industry, whose exports to Korea have been decreasing since 2007.

Australian farmers have welcomed the deal. NFF president Brent Finlay says the deal recognises agriculture as one of the nation’s export strengths and will open opportunities for the sector in Korea.

“While the deal doesn’t deliver everything the Australian agricultural sector had advocated for, it is a step towards securing Australia’s trading future with Korea and in improving international market access for Australian agricultural goods,” says Finlay.

“Given protectionist sentiment over agricultural goods is rife in many countries, it is pleasing that Australia has managed to forge an agreement with Korea that has dealt with some sensitive agricultural issues…. [But] the deal does not deliver… for all agricultural industries,

most notably rice.

“We have long advocated for trade agreements to be all-inclusive, factoring in all of our important agricultural commodities and this deal goes a long way towards this. That said, we urge the Government to continue their work by building on gains made on the Korean deal

in other negotiations.”

Australian Trade Minister Andrew Robb says the benefits of the FTA start flowing immediately and will be long-lasting.

Federal Agriculture Minister Barnaby Joyce.

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RURAL NEWS // DECEMBER 17, 2013

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





BEEF PRICES NI



Change

c/kgCWT











4.50

4.52

4.35

4.58

4.60

4.25

Change

c/kgCWT

NI Lamb







5.80

4.96 4.98

3.55

3.50

PX - 19.0kg

-10

5.72

5.82

3.50

3.40

PH - 22.0kg

-10

5.73

5.83

4.99

Local Trade - 230kg

-2

4.43

4.45

4.15

Mutton

MX1 - 21kg

-2

3.60

3.62

2.95

P2 Steer - 300kg

-5

4.25

4.30

4.05

SI Lamb

YM - 13.5kg

-10

5.63

5.73

4.89

-5

4.10

4.15

4.08

-10

5.63

5.73

4.91 4.93

PM - 16.0kg

P2 Cow - 230kg

-5

3.10

3.15

3.20

PX - 19.0kg

-10

5.63

5.73

M Cow - 200kg

-5

2.90

2.95

3.00

PH - 22.0kg

-10

5.63

5.73

4.94

Local Trade - 230kg

n/c

4.30

4.30

4.10

n/c

3.38

3.38

2.75

Change +33%

Cattle SI

+55%

Cattle NZ

+39%

Bull NI

+136%

Bull SI

+149%

Str NI

+17%

Str SI

+15%

Cows NI

+30%

Cows SI

+113%

Oct

Sep

86,303 32,389 118,692 13,611

Last Year

5yr Ave

64,667

90,122

92,200

20,905

37,197

34,964

85,572

127,319

127,164

5,766

14,385

14,960

879

2,267

3,749

19,428

22,563

23,947

8,438

14,689

13,188



18,561

28,882

26,787



4,987

9,158

7,814



2,191 22,689 9,711 24,114 10,608

Mutton

MX1 - 21kg

NZ Slaughter

Total Monthly Kill

Cattle NI

1000s

Change

Oct

Sep

Lamb NI

+24%

751

604

761

Lamb SI

+102%

659

326

622

562

Lamb NZ

+52%

1410

930

1384

1316

Mutton NZ

+145%

108

44

128

143





This Season

 











  

Change 











   







Last Year 5yr Ave

1.98

1.95

1.33

1.76

NZ$/kg

-1

8.68

8.69

5.65

8.43

 Last Year

5yr Ave

 

-1

2.08

2.09

2.25

1.75

NZ$/kg

-11

5.58

5.69

5.96

5.33

 

  





2 Wks Ago

+3

2 Wks Ago

 

Last Week

UK Leg £/lb

Last Week

95CL US$/lb

 

755

Last Season

Export Market Demand



Change

  



Last Year 5yr Ave





Export Market Demand





Total Monthly Kill



  



4.94

5.70









5.78

-10

3.53





5.68

PM - 16.0kg

 



Last Year

3.48

 

2 Wks Ago

-2





-10

YM - 13.5kg

Last Week

-2

NZ Slaughter

  

Last Year

-2

M2 Bull - 300kg



2 Wks Ago

M Cow - 200kg SI



Last Week

P2 Cow - 230kg

1000s



-2

P2 Steer - 300kg



 

LAMB PRICES

M2 Bull - 300kg

  

LAMB MARKET TRENDS



















Procurement Indicator Change

  











 











Procurement Indicator Change





  

 

3 Wks Ago

Last Year 5yr Ave

% Returned NI

-1%

68.2%

69.3%

91.7%

68.7%

% Returned SI

-2%

66.2%

67.9%

91.1%

67.8%



2Wks Ago

3 Wks Ago

Last Year

5yr Ave

% Returned NI

+2%

81.0%

79.4%

73.03%

73.1%

% Returned SI

+1%

74.4%

73.5%

68.5%

68.1%





2Wks Ago



       

 











 



 





















 



 









 



        

 

















Venison Prices

 

















Change



 Beef  & venison prices are reported as gross (before normal levies & charges are deducted). Lamb & mutton prices are reported nett (after levies & charges are deducted).

Last Week

2 Wks Ago

Last Year 5yr Ave

NI Stag - 60kg

-10

6.60

6.70

6.90

7.62

SI Stag - 60kg

-10

6.80

6.90

7.15

8.00



Stock as security who would have thought

RURAL NEWS // DECEMBER 17, 2013

NEWS

PRICE WATCH



WOOL PRICE WATCH

BEEF

Change

05-Dec

28-Nov

Coarse Xbred Indic.

-9

5.15

5.24

3.91

Fine Xbred Indicator

-9

5.28

5.37

4.66

Lamb Indicator

-

-

-

-

-27

7.47

7.74

8.77

Patchy supply underpins export prices

Indicators in NZ$

A patchy supply of cattle to slaughter has underpinned export prices in both islands in recent weeks. Recent rainfall has seen cancellations as feed availability leads to farmers holding on to stock for longer.

Procurement pressure is all that is underpinning the market with processor margins slim. In the NI export steer prices ranged between $4.50-$4.65/kg and bull ranged between $4.40-$4.65/kg. In the SI export steer ranged between $4.20-$4.35/kg and bull between $3.80-$4.20/kg. 



US imported beef outlook positive The outlook for US imported beef prices looks positive in the coming weeks with the US domestic cow kill really starting to tighten up now.

Steiner has predicted prices will rally 10cents in the next 3months with 90CL seeing gains of up to 13cents in the same period in 2011.

However, Australia could be a real fly in the ointment. Since the start of Nov, the Aussie dollar has fallen 4.6% vs the US$ while the NZ currency has declined less than 1%. This has made Aussie beef much for competitive in the US market which in turn could see more Aussie beef head their way. But if US supplies tighten as quickly as expected there should still be room for NZ beef.

DAIRY PRICE WATCH Last Year

Mid Micron Indic.



        





Export lamb prices continued their downwards fall last week. In the NI a 17kg cwt lamb was earning between 5.80-6.10/kg gross, with the SI ranging between $5.55-$5.90/kg gross. In the NI many farmers are choosing to hold lambs longer than normal due to the feed and this may create bottlenecks further on in the season, particularly if it gets dry quickly. Mutton continues to earn good money with a range of $3.50-$3.70/kg in the NI and $3.30-$3.50/kg in the SI. Once orders for the Chinese New Year are filled, mutton prices are likely to come back.

Demand for store lambs in the North Island has maintained its strength in recent weeks. Paddock prices for 27-28kg mix sex lines ranged from $2.70-2.90/kg but it has been reasonably hard to source numbers on the back of the recent rain. Some farmers who normally sell store pre-christmas are holding on to kill themselves come Jan/Feb given the lower numbers on farm. This is further pressuring store supplies at present Prices at both Stortford and Feilding ranged between $2.70-$3.00/kg last week.

DAIRY

Cheddar

Last Year

+252

5113

4861

3933

+132

5722

5590

4083

+72

6087

6015

4053

+314

5783

5468

4803



 

 







 













 







  









 



 

 









Last Year

05-Dec

28-Nov

-4

4.22

4.26

-4

4.33

4.37

3.90

-

-

-

-

-17

6.13

6.30

7.35

Fine Xbred Indicator Lamb Indicator Mid Micron Indicator



3.27

Indicators in US$/T Butter









Last 2 Wks

Prev. 2 Wks

Last Year

+100

4700

4600

3400

+50

5000

4950

3375

+250

4750

4500

4000

Change +200

Skim Milk Powder Whole Milk Powder Cheddar







Overseas Price Indicators

Change

Coarse Xbred Indicator

4200

4000

3275

 

 











 













 



  

 







 





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Waning demand for store lambs in South Island Store lamb prices eased in the South Island last week. On-farm sales bore the brunt of some softer demand with some potential buyers preferring the smaller yardings in the sale yards rather than being lumbered with large numbers when feed and rain are at the fore front of everyone’s minds. At the on-farm sales medium to heavier lambs at 27-32kg ranged from $2.30-$2.45/kg, however at the yards a range of $2.50-$2.70/kg was apparent. The store market is clearly suffering by a lack of demand with traders moving over to support the dairy industry. The next spike in demand for store lambs will come from the cropping farmers, but that’s still 2-3months away.

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Lamb prices on a steady decline

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CURRENCY WATCH vs. NZ Dollar

Last Week 2 Wks Ago 4 Wks Ago Last Year

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Prices of dairy products had their biggest gain in five months at the latest Global Dairy Trade (GDT) auction, pushing the average price to a two month high. The GDT index rose 3.9% from the last sale. The price of rennet casein, an ingredient used in processed products, rose 18.9% to $11,000/tonne. Whole milk powder rose 3.4% and skim milk powder rose 5.6%. Fonterra have reported that their recent increase in forecast payout is a reflection of the huge demand for whole milk powder and other products used to calculate its milk price.

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RURAL NEWS // DECEMBER 17, 2013

16 AGRIBUSINESS

FRANCIS WOLFGRAM FINANCE MATTERS

2013 Agricultural Review WHOLESALE PRICING trends in our major export food commodity groups over 2013 have mostly been strongly lead by dairy prices now ending the year on a solid note, despite the projected pullback.

The dairy market remains intriguing: the supply response from the major exporters is not yet strong enough to tip the balance and see a sustained adjustment lower in prices. China, unsurprisingly, remains the focal point as import demand looks to be moderating as record domestic farmgate prices stabilise their own domestic production.

The beef markets in the last few months have shown schedule prices tracking 4% to 8% ahead of last year, but US manufacturing prices (in NZD) have been back by 6%.

Part of the support seems

to be better prices for primal cuts and co-products, but that doesn’t seem to explain the whole situation.

solid year for sheepmeat prices. Good prices were achieved for the European Christmas chilled trade; focus is now turn-

It will be interesting to see which path markets take in 2014, but with the recent buoyancy in the rural sector there is reason for optimism.

Throughput for the likes of bull beef and steers has been slow, and it seems with lower stocking rates and good pasture covers farmers are adding weight before selling. Hence processors have to pay higher premiums to attract stock, and this is likely to continue causing a stand-off developing between farmers and meat processors.

In-market prices for the main lamb cuts have continued to improve in recent months, capping a

ing to the frozen market.

Traditionally the decline in the schedule price from the Christmas shoulder to the March/April period is 15%-20%. The lift in retail demand for leg and other cuts will help importer confidence when it comes to paying higher asking prices. Heading into 2014 it seems on balance schedule prices could be about the mid $5/kg mark until April.

Strong wool prices corrected lower in late November after push-

ing up to $5.80/kg during October, driven mostly by constant disruption to shearing and reduced supply. Over the first 17 weeks of the season, supply in NZ auctions was estimated to be back by 15% year on year (y/y).

Despite the lower supply, total auction sales over the same period were up 8% year y/y, with high clearance rates above 90% as buyers competed for product.

Venison exports have not fared so well during 2013. Farmgate prices have disappointed this season, peaking about the $7.20/kg mark in September/October, well down on the average of the last five years ($8.30/kg). Sales of chilled product picked up volumewise during August/October, but historically chilled volumes were still 3% behind year-to-date and

prices were flat.

Bulk wholesale wine prices are also lagging this year. There is potential for a very big 2014 vintage; vines especially in Marlborough typically have been pruned for a large crop and shoots are loaded with large bunches. This will cause some nervousness over pricing, with

global wine production forecast to reach its highest level since 2006. The main indicator to watch will be bulk wine prices: this is where pricing pressure is likely to first show.

Zespri raised its forecast 2013/14 orchard returns in October and since most of the fruit is sold little will change.

For all categories forecast returns increased as a result of strong market prices, improved market mix, reduced post-harvest costs and low fruit losses.

It will be interesting to see which path markets take in 2014, but with the recent buoyancy in the rural sector there is reason for optimism.

Current Month

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Yearly Change

8.2

8.25

5.35

34.76%

NZ Bull Beef (NZD per Kg)

4.02

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3.88

3.48%

NZ Lamb (NZD per Kg)

5.93

5.52

5.51

7.08%

NZ Coarse Wool (NZD per Kg)

5.74

5.06

3.93

31.53%

Venison (NZD 60kg Stag Grade)

6.72

6.97

7.21

-7.29%

Average Wine Price (USD per Litre)

5.5

5.7

5.7

-3.64%

Kiwifruit (USD per kg)

3.5

3.6

3.1

11.43%

Apples (Weighted Index)

265

267

247

6.79%

Commodity & Units Milk Price (USD per Kg MS)

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RURAL NEWS // DECEMBER 17, 2013

AGRIBUSINESS 17 NOT A HEAVY METAL FAN IT’S NOT only investors in exploration company Chatham Rock Phosphate (CRP) who should be concerned about high trace levels of uranium in the phosphate nodules they plan to extract from the ocean floor (Jacqueline Rowarth, ‘Do you want Uranium with that?’, Rural News Nov 29).

Ultimately, the issue of toxic trace elements extends throughout the supply chain, from the farmer to the consumer.

At least in the case of CRP they’ve done extensive analysis and, by all accounts, are comfortable enough to refer to their mined product as “ultra-low cadmium direct-application fertiliser”. This is more than can be said for chemical fertilisers now spread on most New Zealand farms.

There is overwhelming evidence that cadmium levels in soil are directly aligned to the use (and overuse) of superphosphate, yet the chemical fertiliser industry has historically done little to educate or inform farmers on how to manage this.

In 2008 the Cadmium Working Group concluded that while “cadmium in foods didn’t pose a risk to human health in New Zealand”, there was risk of exceeding food standards in some offal types and some vegetables. In subsequent reports it also highlighted the risks of New Zealand falling behind the cadmium standards of our trading partners – a warning shot over the bow of our ‘clean and green’ image.

The National Cadmium Strategy (NCS), published in 2011, made a clear recommendation that farmers and growers should be implementing a ‘tiered fertiliser management system’ to manage potential soil cadmium build-up over a 100 year timeframe, while also regularly testing for cadmium as part of a regular nutrient management programme.

Farmers were encouraged to work with their fertiliser company representative to progress this.

Two years on not much has changed. Most farmers we deal with haven’t heard of this strategy and we contend that if large fertiliser companies were serious about helping the future of farming they would be informing their sales forces, their farming clients and growers about the worst areas of heavy metal build-up.

Regional councils are now stepping into the breach, primarily to protect waterways because of nitrate leaching.

Rather than being forced to change their ways, farmers could look at some of the advantages of ‘alternative farming’ methods. Biological methods of soil management are yielding some fantastic results, with improved soil health, plant production and stock health translating directly to the bottom line.

Keith Jackson Viafos guano phosphate

World’s biggest drier opens PAM TIPA pamelat@ruralnews.co.nz

AN OFFICIAL OPENING of Fonterra’s Darfield site in Canterbury on December 7 marked the completion of a $500 million development over three years.

The world’s largest milk powder drier has already produced at least 50,000 metric tonnes of whole milk powder since start-up in September. It was officially opened by Selwyn MP and Minister for the Environment, Amy Adams as part of a public open day.

Fonterra can now make the most of the cooperative’s milk produced in the South Island, says direc-

tor of New Zealand operations, Robert Spurway.

“Canterbury is New Zealand’s fastest-growing dairying region. The completion of Darfield stage two means Fonterra can

continue to process the increasing milk volumes and meet the growing demand from customers around the world.”

Spurway says Darfield stage two supports the co-

Darfield key facts Darfield’s drier two is the world’s largest milk powder drier The drier has the capacity to produce up to 30 metric tonnes of whole milk powder per hour, and 700 metric tonnes per day Drier two produced 100 metric tonnes of whole milk powder during its first production run At least 1500 staff and contractors worked 700,000 man-hours to build the plant.

Milk is collected from Fonterra’s farmer shareholders, within a 65km radius, delivered by tanker to Darfield, then processed into whole milk powder and packed into 25kg bags.

YES: These ARE a ‘pistol grip’

Minister for the Environment Amy Adams cuts the ribbon at Fonterra’s Darfield site with Fonterra director John Monaghan and Fonterra’s director of New Zealand operations Robert Spurway.

op’s strategy of optimising its milk, while streamlining its operations and supply chain. “Drier two will help us to process more milk and optimise production to ensure that we are getting the best value for every drop of our farmers’ milk, even during times of peak milk flow.”

At the peak of the

season, the drier runs 24 hours a day, seven days a week. It produces at least 700 metric tonnes – the equivalent of 45 shipping containers – each day.

With drier two now on line, milk can be collected up to 65km from the site.

Drier one, already completed, ran successfully last year.

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RURAL NEWS // DECEMBER 17, 2013

18 OPINION EDITORIAL

EDNA

Foreign ownership brings out dogwhistlers THE DEBATE over foreign investment in agriculture is clouded in politics, ambition and fear.

It polarises farmers, political parties, investors and the community.

Yet foreign investment in New Zealand agriculture has been a reality for decades. In fact, New Zealand agriculture was founded on foreign investment.

With former Labour leader and trade minster Phil Goff recently pulling his Rural Land Sales Bill from the parliamentary private members ballot, we are going to hear this issue debated again.

Many in the farming sector may sympathise with the populist intent of Goff’s bill, but they should be careful what they wish for. Are they saying a farmer who owns the land does not have the right to sell it to the highest bidder, if that happens to be a foreigner? That has severe connotations for his business, income and retirement.

Farmers create income for the country by producing products better than anyone else and allowing that produce to be sold to the world for high prices. Are we now saying New Zealand-produced milk, meat, fruit and wine should not be sold to these overseas buyers because it makes prices to locals too high?

No doubt Goff’s bill will garner support from the xenophobes in NZ First, the economic isolationists in the Greens and the populists in Labour.

Supporters of this bill will claim it is intended to protect New Zealand for New Zealanders, but in reality it is simple dog-whistle politics.

It’s not really about foreign ownership, it’s about Asian ownership. However, the real foreign land owners in this country ironically aren’t Asian – they’re Brits and Australians. Look at the media coverage of the Shanghai Pengxin purchase of the Crafar farms, compared to that of Hollywood director James Cameron buying his growing swath of land in Wairarapa.

What’s the difference? Both are foreign owners. They can’t take the land back to their home countries. They are employing New Zealanders, buying New Zealand inputs and investing back into New Zealand. Surely this is all good for our economy?

New Zealand is a player in the global market and a strong proponent of free trade. Is it not more than a little ironic – even hypocritical – that the great free trader now wants to restrict who we will sell our farmland to? We can’t expect to play in a global market with free trade deals and open access if we’re going to slam the door on foreign investment.

RURAL NEWS HEAD OFFICE POSTAL ADDRESS: PO Box 3855, Shortland Street, Auckland 1140 PUBLISHER: Brian Hight .............................................. Ph 09 307 0399 GENERAL MANAGER: Adam Fricker ........................................... Ph 09 913 9632 CONSULTING EDITOR: David Anderson .......................................Ph 09 307 0399 davida@ruralnews.co.nz

“... and for those who don’t believe in Christmas, it’s your tribute to Nelson Mendela!”

THE HOUND Out of touch A MATE of the Hound reckons the recent Fonterra director candidates roadshow was a perfect example of how out of touch the big cheeses at the co-op are with the shareholder base. “One would have assumed prospective candidates would have wanted the opportunity of meeting with their hard working milk harvesting shareholders,” your canine crusader’s informant explained. “However, with a meeting time set at 4pm (the November 15 meeting at Pukekohe), one wonders who on earth they want to meet?

Want to share your opinion or gossip with the Hound?

Send your emails to: hound@ruralnews.co.nz

GE rethink THE HOUND notes that about a year ago the anti-GE movement made much of a paper in Food and Chemical Toxicology claiming a link between cancer in rats and a diet of glyphosate-tolerant (ie GE) maize. Now the journal has recalled the paper, saying no definitive conclusion should have been reached due to small sample size, and the breed of rats being tumour-prone. No doubt some pro-GE folk will say “told you so”, but your old mate suggests the scientists’ favourite refrain “more work needed” would be more appropriate.

TECHNICAL EDITOR: Andrew Swallow ................... Ph 03 688 2080 PRODUCTION: Dave Ferguson ........................Ph 09 913 9633 Becky Williams ........................Ph 09 913 9634 REPORTERS: Sudesh Kissun ....................... Ph 09 913 9627 Pamela Tipa ............................ Ph 09 913 9630 Peter Burke .............................Ph 06 362 6319 SUB-EDITOR: Neil Keating ............................Ph 09 913 9628 WEBSITE PRODUCER: James Anderson .................... Ph 09 913 9621

Powerful latte sippers THIS OLD mutt reckons farmers’ blood will boil after hearing their favourite taxpayer-owned company and national power grid operator (not) Transpower has been caught out spending $1.2 million on a staff café in a building where the lease expires in the next year.

This was discovered by lobby group the Taxpayers’ Union; it found that in 2012 Transpower spent $1.2 million refurbishing its reception and building ‘The Wire’, a place where personnel “can engage and collaborate with each other, and with our guests.”

Mixed messages

Fancy co-op car?

YOUR OLD mate would like to suggest a new nickname for Fonterra’s chief executive: Theo ‘The Tailor’ Spierings. Why? Because he seems to be ‘tailoring’ his messages: one message for the stock market, another for farmer shareholders. At Fonterra’s annual meeting farmers were told negotiation with Danone continues.

Three days later, unit fund holders heard that talks had failed. Fonterra’s smoothing of dividends also smacks of outside investor influence shifting cooperative priorities.

THE HOUND hears that Fonterra and wannabe Alliance Group director John Monaghan (this column was penned before the meat company’s annual meeting) has got a nifty Xmas present. The selfproclaimed saviour of red meat producers won a new BMW valued at $83,800 in a prize draw.

Monaghan says he was absolutely flabbergasted and very excited to be getting a BMW in time for Christmas. No mention if he was going to add the new Beemer to the car pool for either of the co-operatives.

NATIONAL SALES MANAGER: Ted Darley .......... Ph 07 854 6292/021 832 505 ted@ruralnews.co.nz

WELLINGTON SALES REPRESENTATIVE: Mark Macfarlane .Ph 04 234 6239/021 453 914 markm@ruralnews.co.nz

AUCKLAND SALES REPRESENTATIVE: Stephen Pollard ....Ph 09 913 9637/021 963 166 stephenp@ruralnews.co.nz

SOUTH ISLAND SALES REPRESENTATIVE: Kaye Sutherland Ph 03 337 3828/021 221 1994 kayes@ruralnews.co.nz

TAURANGA SALES REPRESENTATIVE: Tony Hopkinson .. Ph 07 579 1010/021 949 226 hoppy1@clear.net.nz

ABC audited circulation 81,232 as at 30.06.2013

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 17, 2013

OPINION 19

Plant research benefits economy, environment AS THE debate about the relative merits of the economy and the environment continues, researchers are making progress towards both goals.

Massey University’s professor Tony Parsons (who holds the AGMARDT chair in carbon cycling) and AgResearch scientist Dr Susanne Rasmussen have been funded

by FRST (now MBIE) and the New Zealand Agricultural Greenhouse Gas Research Centre (NZAGRC) to work on improving nitrogen use efficiency (NUE) in the whole pastoral system.

The first goal was focussed on altering the partitioning of N in the animal to reduce the proportion of N eaten that is excreted as urine.

The second goal was to achieve plants that grow as much, if not more, for less N input; the aim was to reduce the N intake needed per unit of animal product.

Professor Parsons and Dr Rasmussen’s team examined different approaches to achieving the goals.

Exploration of previous high sugar grasses (HSG) research found that if the energy: protein ratios within the plants can be altered sufficiently, the proportion of N emitted in the urine can be reduced.

The analysis established proof of concept and also revealed why previous research has not always shown that HSG are effective; early cultivars did not have sufficient sugar expression to alter the balance of energy: protein. In addition, a management and environmental interaction was revealed.

Plant material (and the insights generated by the research) from the Parsons/ Rasmussen experiments with major differences in HSGs is now with plant breeders.

The second approach involved examining the possibilities of growing

plants at low N yet achieving high production. It is generally believed that plant growth is fundamentally N limited: plants grown at low N grow slowly resulting in small plants with low N content whereas plants grown at high N have rapid growth creating large plants with a high N content. Professor Parsons and Dr Rasmussen used a plant growth hormone (gibberellin) to test whether plant growth was always limited by nitrogen. Proof of concept required demonstrating that it was possible to gain more plant growth (biomass and not just elongation) without adding more nitrogen.

Using the readily available plant growth hormone gibberellins, Professor Parsons and Dr Rasmussen demonstrated that even low N plants could be made to grow faster despite being at low N content. This confirmed that there are internal controls of plant growth rate in perennial ryegrass which, at least at some times of the year, could be restricting forage production.

Dr Rasmussen and colleagues then identified previously unknown genes and components of the mechanism involved in the internal control of plant growth. These occur on the part of the chromosomes known to be involved in plant growth; identifying the specific genes involved is a large step forward for breeding.

The research is classified as fundamental, not applied, research, but has given ‘runs on the board’ for the NZAGRC. It has led directly to practical applications for plant breeding allowing for sustained growth in the primary production industry – reducing N inputs and also potent GHG emissions.

This means there is proof of concept for improvements in NUE. “Success in these areas

has long been proclaimed by others but real results have not been apparent,” said Professor Parsons.

“Industry and government want progress now

and willingness to support fundamental research has been evaporating. This research shows that the fundamental approach, which includes the ‘proof

of concept’ requirement, remains the best chance of making a difference for the future. The results show clearly that altering partitioning of N within

the animal and improving NUE in the plant is possible.”

The NZAGRC-funded research is a win for production and the environ-

ment. It now relies on plant breeders to realise potential.

• Jacqueline Rowarth is professor of agribusiness, The University of Waikato.

RURAL NEWS // DECEMBER 17, 2013

20 OPINION

Rising food price confounds doomsayers on climate STEVE G O R E H A M

THIS YEAR has been great for global agriculture.

Record production of rice and good crops of wheat

and corn came despite predictions world agricultural output is headed for a decline.

The US Department of Agriculture (USDA)

reports world rice harvests for 2012/2013 were a record 469 million metric tons. Corn and wheat harvests were also strong, following record harvests for

both during 2011/2012. The USDA is now projecting world record harvests for corn, wheat, and rice for 2013/2014 (see attached graph).

The 50-year trend shows remarkable growth in world grain production.

Since 1960, global wheat and rice production has tripled and corn produc-

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Rethinking the Everyday

tion is almost five times higher.

For decades, doomsayers have predicted food production would fail to keep up with the needs of humanity. In 1972, Donella Meadows and others of the Massachusetts Institute of Technology published The Limits to Growth, which asked the question, “Do these dismal statistics mean the limits of food production on the earth have already been reached?” And Paul Ehrlich wrote in The End of Affluence, in 1974, “due to a combination of ignorance, greed and callousness, a situation has been created that could lead to a billion or more people starving to death.”

But Norman Borlaug’s development of disease-resistant, high-yield strains of wheat and rice had already revolutionised 20th century agriculture. A few years before Meadows and Ehrlich warned about coming famines, Borlaug’s wheat and rice were introduced into Latin America and Asia with astounding results. Mexico’s wheat production soared sixfold by 1970 from levels in the 1940s. India’s wheat production jumped from a huge deficit in 1965 to a surplus only five years later.

Food production continues to grow faster than population. Data from the Food and Agriculture Organisation (FAO) of the United Nations shows a 30% gain in the per capita agricultural production index 1980-2010. Consumers have access to more grain, meat, dairy products and fruit and vegetables.

Even fish production is

climbing because of large gains in fish farming.

The increased availability of food reduced the undernourished portion of the world’s population from 18.6% in 1990 to 12.5% in 2010, says the FAO. Some 868 million people are still classified as undernourished.

Today’s leading agriculture alarmists push the ideology of ‘climatism’, the belief that man-made greenhouse gases are destroying Earth’s climate.

Earlier this month, a leaked draft report from Working Group II of the Intergovernmental Panel on Climate Change predicted that man-made climate change would reduce global agricultural production yields by up to 2% per decade throughout the 21st century.

Lester Brown’s Earth Policy Institute has long predicted agricultural collapse. His website states, “…climate change is heightening the likelihood of weather extremes, like heat waves, droughts and flooding, that can so easily decimate harvests.” Even the USDA warns that manmade climate change threatens US agriculture.

But still we wonder when the climate-damaging effects on agriculture will appear. The IPCC states that 1983-2012 was likely the warmest 30-year period in the northern hemisphere of the last 1400 years. We should have seen some negative agricultural impact by now.

• Steve Goreham is executive director of the Climate Science Coalition of America.

RURAL NEWS // DECEMBER 17, 2013

MANAGEMENT 21

Agchem resistance rising issue A N D REW SWA LLOW andrews@ruralnews.co.nz

IF YOU think you’re onto a good thing with an agrichemical, it’s probably time to do something different.

That was one key takehome message among many for cropping farmers at the Foundation of Arable Research’s main field day for the year, Arable Research In Action (ARIA), earlier this month.

“Avoid applying the same chemical repeatedly,” FAR’s agrichemical research manager Mike Parker warned. “We’ve got to get a bit smarter.

When you’re onto a good thing, you’ve got to make changes,” he stressed.

While Parker was presenting FAR-led work on glyphosate resistant weeds, a guest speaker from Denmark, Lise Jørgensen, warned how cereal diseases in Europe had become resistant to many fungicides.

Even the efficacy of triazoles, the mainstay of crop protection programmes, is waning and growers need to take care using products with new modes of action, such as the SDHI fungicides, to ensure they remain effective as long as possible.

“All the companies have their own version of these [SDHIs] and they are going to be used a lot. The lesson is not to misuse

FAR guest speaker Lise Jorgensen.

them from the beginning.

We need to make sure we don’t over-use them. But what that means is a good question,” Jørgensen said, noting advice on number of applications per season varies between companies and countries.

As a rule with all fungicides, limiting dose rates, number of applications per season, and mixing with products with different modes of action will help reduce the risk of resistant strains of disease building up, she says.

The co-presenter during the session on fungicide resistance, Suvi Viljanen-Rollinson of Plant and Food Research, said New Zealand’s “in quite a good position so far,” regarding fungicide-resistant strains of disease, which is a credit to growers.

However, strobilurinresistant powdery mildew,

and a reduction in sensitivity of septoria tritici to triazole fungicides, have been observed in New Zealand. “The situation is serious and I think we should try as hard as we can to preserve the fungicides we’ve got,” she stressed.

Parker’s advice on herbicides was similar. “One of the greatest risk areas is fencelines where we get repeated use.”

He questions whether creating a “biological vacuum” by repeatedly spraying fencelines is necessary, given the resistance risk it poses.

If fencelines must be

sprayed, use mixtures of herbicides and an alternative mode-of-action product, such as glufosinate instead of glyphosate, once in a while, he says.

A grower from Australia, Martin Chandler, rammed home just how big a problem herbicide resistant weeds can become.

He’s now having to follow glyphosate applications with paraquat – a particularly nasty chemical to use – a week or so later to kill glyphosate survivors. That extra application means following crops are delayed, reducing yield, and alternative modes-of-action have to be used for weed control in-crop, pushing up costs. “It all flows on,” he warned.

FAR chief executive Nick Pyke urged any growers here who suspect weeds or ryegrasses may have developed herbicide resistance to contact the foundation.

Besides being a particularly competitive weed in cereal crops, herbicide resistant ryegrasses could play havoc with New Zealand’s large herbage seed

Burning too good tool to lose Burning is an agronomic tool that helps reduce selection pressure on weeds to become herbicide resistant FAR’s Nick Poole told growers in a separate session at the event. Elsewhere in the world where the practice has been banned, notably in his homeland Britain in 1993, herbicide resistance has rocketed, so that incorporating the deep-litter left from high yielding wheat crops similar to those grown in New Zealand means farms need more horsepower and burn more diesel.

Slug populations have also soared, prompting greater use of slug baits, residues of which are now “turning up in the water,” he noted.

“It is a privilege to be able burn our stubbles [here in New Zealand] and we’ve got to be able to keep that tool,” he stressed, urging growers to be responsible in their use of it.

Try drilling into that, says FAR’s Nick Poole.

industry, he added. “If we do get [herbicide] resistant annual and perennial ryegrasses, seed production of those species is going to be particularly challenging.” @rural_news facebook.com/ruralnews

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RURAL NEWS // DECEMBER 17, 2013

22 MANAGEMENT

Alternative pasture species show Castlepoint Station on the Wairarapa coast is among New Zealand’s oldest stations, and, thanks to the lighthouse, motor camp and landmark rock, one of the best known. As a farm it’s also one of the most innovative, as Peter Burke found out on a Beef + Lamb New Zealand field day earlier this year.

FIRST SETTLED in 1847

by Thomas Guthrie and family, today the 2952ha of rugged Wairarapa coastline that is Castlepoint Station is owned by Emily and Anders Crofoot.

The Crofoots are well known for innovative thinking and since buying the station in 1998, have invested heavily in technology and farm management systems to lift performance.

Last month, nearly 200 people in 80 vehicles took up Beef + Lamb’s invite to a field day on the iconic property to look at trials with ‘modern farming forages’ and hear from scientists Dr Derrick Moot of

Lincoln University, Dr Paul Muir of On-Farm Research, and researcher and consultant, Dr Malcolm McFarlane.

The Crofoots have been working with the scientists

for many years. Emily says they host trials to learn how to lift animal performance, especially by getting legumes into early spring pastures. Their quest started with a con-

ference at Lincoln, then a farm visit in North Canterbury convinced them options like lucerne had to be tried at Castlepoint.

Anders says the overall objective is lifting weaning

TAKEN ROOT IN NZ

The Crofoots bought Castlepoint in 1998 and while their accents are American, in every sense of the word today they are kiwis. They say they came to New Zealand because they love the place: it’s a far cry from their original home in New York State. Their amazing story and that of other Castlepoint owners and/or occupiers over the years are told in the book Castlepoint, by Lorain Day. Today the station runs 25,000 stock units, split 80:20 between sheep and cattle. It’s typical North Island dry east coast country. Sheep are mainly Romney.

Malcolm McFarlane with plantain, one of several pasture species being trialled at Castlepoint Station.

Anders and Emily Crofoot.

weights of lambs by growing them faster and to have more killable, or at least at higher weights, before summer dry sets in and the lambs go.

“We do finish some, but only a very small proportion.”

Lucerne is one pasture species they’ve turned to try to improve that, and eight years since sowing their first stand of the deep rooting legume, it’s “no longer an experiment,” says Anders.

“We are looking at ways of expanding it and possibly, as everybody learns more about it, we could put it on to hills; hills that we may not have considered ten years ago.”

Dr Derrick Moot is the go-to guru on lucerne.

What’s happening with it

on Castlepoint potentially could be applied along Wairarapa’s coastal dryland, he believes, but more pilot crops are needed.

“We need more farmers to put it in so we get a better feel for how it goes on some of the soils and some of the clay country and some of the rolling hill country…. They have had it here for eight years and I think that’s pretty good.”

He stresses success with lucerne is as much about management as the species itself. Historically, it was regarded in New Zealand as a ‘cut and carry’ crop, but in South America farmers grazed it and that approach is gaining ground here.

“I am a huge advocate of graze, graze, graze.... Don’t put your best quality feed into a bale to then feed

out in the hot dry summer when you could have got rid of the lambs earlier if you had fed the mum on the Lucerne. Whenever you can, I would be direct feeding lucerne.”

Clovers are also on the agenda at Castlepoint.

McFarlane describes them as a “sheep’s version of ice cream”. He’s been looking at ways to increase clover in hill country pasture, broadcasting seed from fixed-wing aircraft or helicopters.

Annual clovers – especially species like Balansa – don’t like competition at establishment so McFarlane says spray out other grasses. Annual clovers also like moisture so autumn sowing is preferable to spring in summer dry regions.

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RURAL NEWS // DECEMBER 17, 2013

MANAGEMENT 23

promise in East During many years as a research scientist McFarlane picked up some tricks on aerial seeding, such as sowing across wind, rather than with and against it, and avoiding very calm days.

“You get a better spread with a moderate crosswind than you do when you oversow seed in still conditions. It’s counterintuitive but the better spread is with 12-15kmh wind. It surprises most pilots and at

first they don’t believe it,” he says.

That holds for both helicopter buckets and fixedwing aircraft, applying either seed or seed mixed with fertiliser. The reason is the slight crosswind produces a wider swath and overlapping swaths give better coverage and a chance of better and more even pasture. In still conditions most seed drops directly below the aircraft, he explains.

The field day takes a tour of Castlepoint Station.

Graze, graze, graze lucerne, Lincoln University’s Derrick Moot told the East Coast field day.

GET SOCIAL WITH RURALNEWS Keep up with the latest stories from by following us at

Future forage systems project Castlepoint is one of a number of “hub” farms in the Future Forage Systems project at which which discussion groups meet to discuss forage ideas and select winning options.

Project manager, Paul Muir of On-Farm Research, says the ideal participation in such discussion group is about a dozen people but concedes where interest is high numbers frequently get to double that.

“What we are trying to get with these hubs is to demonstrate the role of new forage systems and how they might help farmers with an increasingly variable climate.

“What lessons can we learn to make the quantum shift within our North Island east coast systems?

“We are looking at lucerne but we are also looking at plantain and annual clovers as a crop on hill country. The lesson so far is that if you get everything right you’ll get a good strike and good establishment and here at Castlepoint they

have achieved that with plantain and clover and they are getting a much higher yield.”

Muir says the challenge then is to maintain that yield, which requires optimum grazing management.

“These species are difficult and you’ve got to change your management to accommodate them.

You’ve got to farm to the plant, rather than to the stock.”

The website www.nzforagesystems.co.nz has tips on how to do that, as well as notes from the various hub farms, he points out.

Moot echoes Muir’s point that management of lucerne and clover is critical. Get proficient with lucerne before tackling annual clovers, he sugggests.

“In the hill country development we have always talked about the four S’s: seed, super, stock and subdivision. The key message is that there are options out there, especially for dryland farmers. They don’t have to do ryegrass and white clover. Farmers are pretty innova-

facebook.com/ruralnews tive so we’re just here to give them some tools.”

For the Crofoots, the scientists’ input has been invaluable, but it has been a two-way learning experience. They’ve proved a willingness to invite change pays off and acknowledge there’s more learning to be had.

“One of the fascinating things about walking around the paddocks with Malcolm [McFarlane] is that he’s got such a detailed understanding of how the plants actually grow,” notes Anders.

“As farmers we probably spend too much time looking at the stock and not enough time looking at the plants…. Once you understand the whole lifecycle of the plant, the management actually becomes much easier.”

Under the ownership and management of the Crofoots, Castlepoint has lifted its performance and their hard work and innovation is paying off not only for them, but for other farmers.

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RURAL NEWS // DECEMBER 17, 2013

24 ANIMAL HEALTH

Many causes of mute Huntaways DO YOU have a young Huntaway that doesn’t bark at stock? What can cause a dog’s reluctance to bark?

Following on from my last column about a young handy Huntaway that would bark plenty, but not at the right times, I thought I’d tackle this more tricky problem. The cause may be bloodlines.

It may be something that happened in its past to cause the problem. It may be that you are the problem.

Firstly, don’t expect too much from a young dog; age and confidence play a big part. A dog won’t open up if he is terrified of sheep, or you.

How a pup is reared

and the experiences it has when young, very much affect the adult dog. If a pup barks and it is growled at, beaten or electrocuted every time, odds are you will ruin its confidence, put it off barking, and it will mistrust you - forever.

It is a very fine line.

Young dogs need to learn when it is OK to bark and when it isn’t. With some that may take a while

to learn. I allow my Huntaway pups to bark when they are loose, and if they are barking as they play I can take advantage of it by saying in my happy high voice ‘good girl Princess, good girl’. The pup knows that I am thrilled with it – I’ll sometimes throw in ‘shi shi shi – speak’.

Bad parents constantly growl at their children, never praising them or having fun with them; good parent’s love, praise and play with their children as well as reprimand when necessary.

Pups respond well to the same treatment.

Watch packs of dogs; the dam and other pack members will play as well as discipline all the pups. The

pups don’t grow up terrified or spoilt.

Do you bully and dominate your pups so they grow up sullen, meek, submissive and lacking all character? Or do you allow them to get away with everything and turn into hoodlums?

This is a wonderful case for grey – black and white are too extreme.

As I have mentioned before, all early dog training with sheep is in the sheepyards, controlled in a small/medium sized yard, in a non-work situation; stroppy sheep are removed.

If the pup runs after the sheep barking say ‘good boy .... shi shi shi – speak, speak’. Don’t say its name

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Can’t bark or won’t bark?

as this is distracting and it may turn to you, away from the sheep. Also don’t look the pup in the eye as this may have the same effect.

If it’s reluctant to bark and you have another Huntaway, let the pup work with it; as soon as it barks say ‘good boy’ in a

happy voice and give it a rub; ‘Shi shi shi – speak’ and praise it every time it does. If that doesn’t work, try tying the pup up in the yard, where it can’t get hurt, ignore it, and work the other dog; often this encourages barking as it is restricted from helping.

Praise as soon as it barks.

If it barks a bit when chasing the sheep but not as much as you would like, try holding it back on a lead or harness and get the other dog to chase the sheep.

If you haven’t got another dog, try making some barking noises yourself, focus on the sheep, crouch down, and chase them around.

Pups do a lot of learning through copying, and seeing you chasing sheep and making noise may be all it takes.

In the early stages, the split second it barks at sheep, give lots of praise in a very happy voice as you rub its chest – it seems to excite them, stimulating barking.

• Anna Holland is teaching people dog training. For more information www. annaholland.co.nz or Ph 07) 217 0101 or annaholland@xtra.co.nz

New tack with TB tests BRITISH AND Indian researchers aim to develop a cheaper test for bovine TB and a vaccine with it that could revolutionise control of the disease, they say.

Johnjoe McFadden, Professor of molecular genetics at the University of Surrey, is leading the three-year project to develop skin tests that only show positive if infection with the TB bacillus is detected, eliminating the problem of vaccinated cattle testing positive.

The UK has a compulsory bovine TB

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screening and slaughter programme for cattle similar to New Zealand. Vaccination, which is effective in protecting cattle against the disease, isn’t permitted as the BCG vaccine used interferes with skin tests.

In India, the problem of cattle to human transmission of TB is compounded by almost 70% of milk sold being processed by the “unorganised” sector, and bovine TB screening and control is ineffective.

RURAL NEWS // DECEMBER 17, 2013

ANIMAL HEALTH 25 Palatability can be an issue with some zinc treatments, says Ballance’s Jackie Aveling.

Facial eczema reminder STAY ALERT to increased risk of facial eczema in the wake of recent hot, humid weather, says Ballance Agrinutrients.

“Prevention is the best form of defence,” says animal nutrition product manager, Jackie Aveling.

All cattle, sheep, deer and goats are susceptible to the fungal spore induced disease that causes liver damage, inflammation of bile ducts, and accumulation of compounds resulting in sensitivity to sunlight.

Even before physical signs appear in stock, production losses can be considerable, warns Aveling.

“It’s possible that farmers will not be aware of the full extent of a facial eczema problem until it’s too late. If as little as three percent of the herd show clinical signs, then subclinical cases can affect up to 70 percent of the herd.

“This can eat into dairy profits

with a drop in production in affected animals by up to 50 percent, and with a record payout following last season’s drought farmers want to ensure every cent hits the bank.”

Spore counts increase when grass temperatures exceed 12 deg C for

Dairy NZ on FE Ideally start zinc treatment two to three weeks before the spore growth danger period for maximum protection, either as a drench, in water/feed supplies, or zinc bullets, says Dairy NZ on its website.

Fungicide treatment of pasture, avoiding topping, and mapping high and low risk areas of the farm by getting spore counts done on pasture samples will also help manage exposure.

three consecutive nights, but can vary considerably from farm to farm, and even paddock to paddock.

Various websites provide weekly spore count information, typically starting in January.

Aveling says zinc treatment during from late December to May is recommended to help prevent facial eczema, but dosing water troughs with zinc sulphate doesn’t guarantee prevention as zinc tastes bitter and can reduce water intake.

Ballance’s solution is Zincmax+, a combination facial eczema treatment with a peppermint taste that makes it palatable, and that provides organic copper to offset reduced uptake of copper which can be a side-effect of zinc treatment.

“For dairy farmers facial eczema can put a real brake on production when they are aiming to make the most of reasonable growing conditions.”

Flystrike.

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Now its payback time. Cyrex is a new combination of two powerful active ingredients acting together to combat flystrike for up to 12 weeks, with rapid kill of maggots and lice. Cyrex Liquid is an ideal flystrike treatment product that will treat existing strike and provide lasting protection for both whole flock use, or treatment of individually struck sheep.

Could canola boost Poll gene marker improved conception?

SPRING SOWN oilseed rape, aka canola, is being tested in Australia for its potential to increase ewe lamb conception and reproduction.

The Meat and Livestock Australia-funded work is part of a national project that aims to integrate dual-purpose – ie feed and grain – cereal and brassica crops with pasture to increase meat production.

Victoria Agriculture and Food Security Minister Peter Walsh says the research could significantly increase productivity and profitability in high rainfall areas.

“The use of forages with optimum energy and protein over summer and autumn can result in pregnancy scanning rates of 89-149 foetuses scanned per 100 ewes – compared to industry average figures of around 60%.”

Profit increases up to A$12/ha for every 10% improvement in pregnancy scanning above 70%, he notes.

Composite ewe lambs will be grazed on the springsown crops at 7-8 months old.

“Dual purpose canola varieties can be sown in spring in high rainfall environments to produce a high quality forage crop suitable for grazing during the first summer and autumn,” says Department of Primary Industries scientist Maggie Raeside.

Conception and reproduction rates from stock on the dual purpose canola will be compared with those off forage rape, lucerne, chicory and plantain.

The research is part of an initiative to help the sheep industry double production by 2030. – Alan Harman

AN AUSTRALIAN poll gene marker test developed for Brahmans can now be used with a high degree of confidence in temperate cattle breeds, say industry organisations across the ditch.

The hornless trait test determines if an animal is “true polled”, measuring likelihood that it carries only the polled gene.

CSIRO beef genetics specialist John Henshall says the original test was based on a single DNA marker, but the new test uses additional markers and is up to 99% accurate across all breeds.

“Using information from an additional nine markers allows more accurate tracking of genes and their association with polledness,” he explains.

Identifying breeding animals that are true polled and carry two copies of the poll gene will dramatically reduce the requirement for dehorning in subsequent generations.

Changing a herd to polled using traditional selective breeding practices takes decades. The new test cuts it to eight years.

Meat and Livestock Australia managing director Scott Hansen says the new test will assist breeding selections and cut dehorning costs, production losses, carcase downgrades and mortalities.

Bruising costs the Australian beef industry about A$30 million a year, or about A$4 an animal at the point of slaughter on average, with horns identified as the major cause, he notes. – Alan Harman

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RURAL NEWS // DECEMBER 17, 2013

26 MACHINERY & PRODUCTS

Powerful UTV hits spot for farmers GA RE T H G I LLAT T

A NEW ZEALAND UTV manufacturer will this March launch a diesel UTV (‘side-by-side’) reckoned New Zealand’s most powerful.

Hawkes Bay firm Avatar Products’ 62hp utility is developed and designed specifically for New Zealand farmers, says the designer and engineer, Hamish Gilbert.

He says New Zealand conditions and the expectations of farmers necessitated a powerful and durable diesel powered machine. “When a customer sits in a UTV instead of a [quad] he thinks it’s a small tractor or truck because of the pedals on the floor and the steering wheel.

Referring to less-powerful machines available locally, Gilbert says farmers, “instead of carrying just a post on the back, will hook on a car trailer with 16 posts and wonder why it struggles and the maintenance costs increase.

“One potential buyer told me it cost $1500-1800 every time he took his 18-month-old, well known-brand machine to be serviced.” He reached the point of not being able to afford to run it.

Avatar Products’ new machine is up against 800cc, 56hp and 1100cc, 68hp petrol UTV models that currently give farmers the grunt they need.

The new machine has just 3hp less power than the company’s 1100cc Avatar petrol-powered model, but it has much more torque: 123Nm compared with 97Nm. Gilbert considered CVT transmission impractical for this power output and torque at relatively low engine revs. Instead a specially designed manual transmission with integrated diff and gearbox has been built, also incorporating the transfer case for the 4WD. The base transmission is as used for 1000kg payload, mini trucks and vans. It gives full downhill engine braking and has a low gear slow enough to follow stock and/or creep out of difficult places. The unit is one-piece, similar to that on a tractor: there is no drive shaft between the transmission and the differential.

“One operator carries a 500kg payload of medium square silage bales on his machine. We’ve worked with him to develop new rear multi-stage coil springs on his machine, for a soft ride

Designer Hamish Gilbert says the Avatar UTV is specifically designed for NZ farmers.

when unloaded, and the spring capacity to carry the weight safely when loaded.”

Diesel power should make the machine popular, Gilbert says. “With onfarm cars, trucks and tractors all running on diesel, and the compliance issues of storing petrol, farmers see the benefit of having just one fuel.”

A flat deck with fold-down tail and sides – a miniature version of a ute deck – will be offered as standard on the new machine.

“Because we are a relatively small manufacturer, but having direct contact with the farmer market, we can test in the market place, get a reaction to an idea or customer demand, then it put into production quickly.

“For example, the flat-deck concept we had made locally to gauge market reaction. Demand was such that we had to get it into production, and the first units were produced on our UTVs, ex-factory within four months.”

Says Gilbert, “During a product release at a recent large Australian field day we found the same issues being raised by farmers over the comparisons between ATV and UTV: safety, compliance and repairs and maintenance “A huge number of people asked us “do you have a diesel model?’ ” After hearing the specifications and the power, many asked to be kept informed.

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MACHINERY & PRODUCTS 27

Boron fertiliser tackles deficiencies in brassicas giving more heart and yield BORON DEFICIENCIES in brassica are addressed by a naturally occurring magnesium/calcium borate product called OrganiBor, which replenishes boron levels in soil in a controlled and natural way, says the supplier, PGG Wrightson. The product is certified for organic use.

The result is better crop yields and no hollow hearts or weak stems in plants.

Traditional soluble boron fertilisers help a crop start, but with rainfall and free draining soils most of the required nutrient rapidly leaches, often leaving the plant lacking when it needs it most, PGGW says.

This may result in hollow heart, weak stems and crops being more susceptible to disease, cutting yield or incurring extra cost to apply more boron – adding to the cost of growing the crop.

With brassicas being high boron feeders – they typically need 1.5kg/ ha extra boron above the amount required to correct a soil deficiency – most crops are deficient when plants start to bulb and grow rapidly, the company says.

Key roles of boron on the plant: • Cell wall structure, division and growth;

deficiencies are often seen at growing points • Pollen tube development; deficiencies affect seed set and subsequent fruit growth • Plant internal processes, including sugar movement, carbohydrate use and the creation of amino acids and proteins Aiding nodule formation in legumes.

The product is said to consistently raise soil levels in comparison to other sources of boron that have little or no effect on soil levels of boron at recommended rates.

It has shown high leaf levels relative to other sources and a sustained response in the leaves.

In pastures and brassicas the product has lifted yields consistently in trials done independently

by Agrivet, Jabez, PGG Wrightson and Omnia.

OrganiBor begins to release boron in the first four-eight weeks, with peak boron supply usually arriving in the first six months.

Release time will depend heavily on moisture levels, soil acidity, organic matter, soil biology and soil type.

Due to the product’s gradual release patterns, the chance of inducing boron toxicity is said to

be low. But as with all borate fertilisers, caution is needed when applying the product to ensure even application at the recommended rate. It contains no sodium

borate and so will not destroy soil biology or leach into streams or underground waterways.

For mixed pastures OrganiBor should be applied annually in

spring or autumn for the first 2-3 years, after which boron levels will begin to build in the soil and frequency can be reduced to once every two or three years.

Long-term frequency of application and performance will depend typically on rainfall, and soil acidity, organic matter, biology and type.

Application can be by

truck, helicopter, plane, towed spreader or by hand. It can be applied separately or as part of a fertiliser mix, provided particle size is similar. www.omnia.net.nz

New 0% finance offer for all Lely Welger balers!*

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RURAL NEWS // DECEMBER 17, 2013

28 MACHINERY & PRODUCTS

Keeping workers safe on the job vital and sensible RURAL CONTRACTORS NZ welcomes the Government’s new workplace health and safety reforms.

Employers and employees have an important part to play in improving safety in the workplace. Unfortunately, the attitude towards ensuring workplace safety is not universal in the agriculture sector and it can be a

battle to get safety seen as a priority by every individual.

Government is establishing a new crown agency – WorkSafe New Zealand – and introducing to Parliament the new Health and Safety at Work Act this month. It is expected to come into force by December 2014.

So the spotlight is going

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make more random farm ers use earmuffs and eye of more scrutiny of workprotection when operating visits and issue infringeplace health and safety in ment notices or fines to machinery. the wake of the Pike River non-compliant farmers.

You must also keep a mine disaster.

The rule is that farmers What is this extra scru- register of work-related injuries and serious harm, must not cut corners on tiny going to mean for safety. record and investigate rural contractors?

Take stock of your harm or near-miss inciFirstly, think carefully machinery and equipment about the hazards you and dents and report any seriand farm sheds includyour workers may encoun- ous harm incidents to ing the workshop. Proper the Ministry of Business, ter in their day-to-day machine guarding and regInnovation and Employjobs and on the numerular equipment maintement. ous farm properties they nance checks work on. Farmers may help prehave legal requireAs an employer vent acciments to ensure you must work to dents, as may the safety of those eliminate hazards, and ensuring that coming on to their equipment, properties, and rural if elimination is not chemicals and contractors should practical, try to isolate machinery are be communicating stored safely with their farmer cli- them, for example, away. Similarly, ents to ensure known installing machine cut risks by hazards or potenusing personal tial hazards are iden- guards or ensuring protective tified and known to workers use earmuffs equipment like minimise the risk of and eye protection when overalls, gloves, injury. The farmer boots, hats, must warn you and operating machinery. hearing protecyour staff of any haztion and safety eyewear.

As the new regulaards that may cause seriConsider your emertor, WorkSafe New Zeaous harm. gency preparedness, espeland will begin operating As an employer you cially if hospitals and other next year. More frontline must work to eliminate medical providers are not inspectors are expected hazards, and if eliminareadily accessible. If an tion is not practical, try to and the regulatory focus inspector does visit, it will is likely to grow beyond isolate them, for exambe beneficial if you can inspecting quad safety. ple, installing machine Expect these inspectors to show you have considered guards or ensuring work-

these matters and have a plan in place.

Just how WorkSafe New Zealand will function to address poor health and safety in the agricultural industry is still unknown.

However, it is expected the new regulator will work more closely with industry to provide increased guidance and, as a responsible industry organisation, RCNZ is happy to co-operate to ensure we create as safe work environment for our staff as possible.

I’d strongly encourage any rural contractors wanting help and/or advice on workplace safety to contact us at RCNZ for help.

We must not forget that people are our biggest asset and we need to be doing everything possible to ensure their health and safety while at work.

Unsafe work practices are unacceptable and a danger to our lives and our livelihoods.

• Wellsford-based agricultural contractor Steve Levet is the president of the Rural Contractors New Zealand (RCNZ).

ROUND BALEAGE TIPPER Transports and stands wrapped round bales on end for storage

TR AILED PL ANTER 8-ROW NX WINGFOLD • A folding, pull-type frame – The advantage of the pull-type frame is that it can be used with lower powered tractors.

• Four wheel units – This pull-type frame is equipped with 4 wheel units with hydraulic lift.

• High capacity fertiliser attachment with FertiDriveVM – for easy and rapid adjustment.

• Easy adjustments and operating – All planter functions operate from the tractor cab using a function selector.

IT’S QUICK, IT’S CONVENIENT, IT’S EFFICIENT H NOW AVAILABLE AS A SINGLE OR DUAL UNIT H • Thick layers of plastic on bale ends provide superior protection against ground moisture and weather while stored.

• No flat sided bales (simplifies feeding out).

• Less storage area required.

• Suitable for medium HP tractors.

• 3PL mounted (no front axle stress).

• Bale tipped in one easy movement.

• No need to reposition bale before tipping.

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RURAL NEWS // DECEMBER 17, 2013

MACHINERY & PRODUCTS 29

Mowers cope well with rocky ground CENTRAL OTAGO contractor Bede Ryan’s two Fella mowers cope well with rocky ground and have proved valuable additions to his machinery fleet, reports the supplier Fella, a division of CB Norwood Distributors.

Bede Ryan Contracting Ltd makes grass and lucerne silage and contracts in the Becks and Omakau districts.

Bede has run Fella mowers for several years, currently a 3m Fella SM 310 FZ front disc mower and an SM 3570 TL rear disc mower powered by a New Holland TM165 tractor. The front mower has done two and-a-half seasons, the back mower one season.

Says Bede, “This new rear mower is a centre-pivot machine. It’s the same width at 3.5m but it’s much better handling than the other ones I’ve had because of the centre pivot. The whole frame is a bit stronger and it floats better, as the tractor is holding the weight.

“We’re getting a bit less wear on the skids because of [the floating]. In Central Otago we run extra strong skids because it’s quite abrasive ground.

We’re getting quite good wear on them and that saves us downtime. Without them we’d be wearing out the bottom

Central Otago contractor Bede Ryan says his two Fella mowers have been a valuable addition to his machinery fleet.

of the mower.”

The centre-pivot SM 3570 TL rear mower is designed to closely follow ground contours and has a compensating hydraulic ram that prevents pivot movement on headlands.

It also has a floating-cut TurboLift system, effective guidance of the cutter bar and an impact guard with pivoting gearbox.

The company says Bede also likes the SM 310 FZ front mower; its actu-

ation is reckoned the best available on the market, enabling “outstanding” ground contouring, even during difficult harvesting conditions.

The Fella front mower’s threedimensional sensing of the ground contours allows the operator to mow a wide range of crops without losses.

The mower can be moved laterally and has a steplessly adjustable cutting height and adjustable contact pressure.

It has a tine-rotor conditioner or roller

conditioner.

“The front mower has a frame that pulls the cutterbar – it doesn’t get pushed,” says Bede. “It floats along nicely and holds the ground contours well. In two and-a-half seasons we haven’t done anything to it.”

Both mowers have quick-change blades, which Bede likes. “The mowers are a spindle-drive setup and if we have any problems with any of the modules it isolates each module. We just replace

the module and we keep going. We haven’t had to replace one yet, but I like the concept of it. It seems reliable and we haven’t had any trouble.

The back mower has a drive shear protection system (DriveGuard) on the disc hubs but, again, Bede hasn’t yet sheared one off.”

The gear was bought from Norwood Farm Machinery Centre, Mosgiel.

Tel. 06 356 4920 www.fella.co.nz

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We looked at other brands, but bought a BERTI because they are a lot more solid, they have a good history, and a guy that used to work for us has one and swears by it.

With a BERTI pasture mulcher, it allows the animals to get in and graze where they don’t normally go.

The rushes die out, and the grass thickens up to become lush, top quality pasture.

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RURAL NEWS // DECEMBER 17, 2013

30 RURAL TRADER CHECK OUT OUR WEBSITES BREAKING NEWS

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AND MUCH MORE...

WWW.RURALNEWS.CO.NZ

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This is the story of a special group of pioneers who farmed at Mason Bay, Stewart Island.

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RURAL NEWS // DECEMBER 17, 2013

RURAL TRADER 31 CRAIGCO SENSOR JET DEAL TO FLY AND LICE

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HUNTER BOOTS Comfortable, durable and stylish.

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We will be closing on December 20 and re-opening on January 6, 2014. We would like to wish our customers a very Merry Christmas and a safe and Happy New Year.

FARMER BOOTS Lastrite’s Farmer boots are made for comfort. Constructed from Mad Dog leather they are an ideal farmers, fencers and builders boot. Very sturdy and made to last this boot is robust with a heavy duty construction. It has a leather insole and midsole that is stitched and screwed construction with a rubber, replaceable sole, that is glued and screwed. Update your old boots now and you will never look back.

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