Rural News 06 October 2015

RURALNEWS TO ALL FARMERS, FOR ALL FARMERS

OCTOBER 6, 2015: ISSUE 593

www.ruralnews.co.nz

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ANIMAL HEALTH

MACHINERY

Parasite larvae tricked into shedding skins. PAGE 44

Modified Avatar set to shake-up UTV market. PAGE 47

RURALNEWS

NEWS Tatua’s payout has left other dairy co-ops trailing behind.

PAGE 17

TO ALL FARMERS, FOR ALL FARMERS

OCTOBER 6, 2015: ISSUE 593

www.ruralnews.co.nz

Just two words!

DAVID ANDERSON davida@ruralnews.co.nz

CLAIMS THAT Silver Fern Farms approached the Government for funding and/or sought a meeting with Finance Minister Bill English for over a year have been debunked by the co-op’s chairman Rob Hewett.

When asked by Rural News about the validity of the claims Hewett had a blunt two word answer: “That’s bullshit.”

This rebuttal came late last month in a sit-down with Rural News – with both Hewett and Shanghai Maling president Wei Ping Shen – to discuss the proposed merger of the two companies, at Silver Fern Farms’ head office in Dunedin.

In a wide-ranging interview, Hewett and Shen also dismissed claims of a

possible procurement war if the deal went ahead.

Critics of the proposed deal claim the newly cashed-up company will burn off competitor meat companies offering over-the-top prices, which will leave SFF as the ‘last man standing’. This, critics believe, will see red meat producers in NZ totally dependent on the company and risk low livestock prices in the future.

“We have no desire to start a procurement war,” Hewett says. “We have seen enough procurement wars in the past; it erodes value and is not sustainable.” He says such assertions

are “a simplistic and stupid argument”.

Hewett believes if the deal with Shanghai Maling is sealed (SFF shareholders will vote on this on October 16 at a special meeting) the logic of the new company’s strategy will see farmers getting better prices, not a procurement war.

“We want to pay farmers more, but that will be earned through the implementation of our strategy and the synergies we will make through our alignment with Shanghai Maling.”

Meanwhile, Shen says his company chose SFF for its first foray into the beef and lamb sector outside of China

because of the “booming demand” for the products in his country, especially by the younger generation.

“SFF’s brands are the strongest in the Chinese red meat market and with Shanghai Maling’s reach of 1000 supermarkets in the country and our parent company Bright Foods’ 60,000 outlets there is no better investment for SFF shareholders than this one,” he said.

Shen also believes there is potential for more jobs to be created from the joint venture than the company’s current 7000.

• See full interview on page 12-13

NOTHING BLUE ABOUT THESE BERRIES! The taste of a single blueberry was enough to launch Harry and Anne Frost into developing a blueberry orchard near Rotorua.

Forty years later, their Mamaku Blue blueberry enterprise offers a range of products that stretch the imagination of most people. Anne is pictured here sampling some wine made from the Frosts’ own berries.

More on Mamuka Blue operation on pages 36-37 of this issue.

FEDS TO TALK WITH PM ON SCIENCE PETER BURKE peterb@ruralnews.co.nz

FEDERATED FARMERS president William Rolleston says he’s planning to meet the Prime Minister in the next few weeks to discuss government funding of agricultural science.

This meet- William Rolleston ing comes amid growing concerns in the agriculture sector about the proposed restructure of key Crown Research Institute AgResearch.

Rolleston says he will raise with Key the long decline of funding for agricultural science – a fundamental problem.

The federation is now doing its own evaluation of science funding and priorities and until the results of this are known he won’t make further comment.

He says it’s hard to tell whether the proposed AgResearch cutbacks are due to the CRI failing to win bids for funding or whether there are other reasons for it.

• See more on the proposed AgResearch restructure: pp-6-7

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RURAL NEWS // OCTOBER 6, 2015

NEWS 3

Farmer consortium linked to new Silver Fern Farm bid

ISSUE 593

www.ruralnews.co.nz

PAM TIPA pamelat@ruralnews.co.nz

NEWS ����������������������������������� 1-23

A FARMER-BACKED consortium was planning to take to Silver Fern Farms a counter-offer to the $261 million buy-in

by Chinese company Shanghai Maling, according to conjecture within the industry.

It was understood the consortium offer was imminent when Rural News went to press. Several industry players had heard of such rumours.

Alliance Group chief executive David Surveyor was asked by Rural News if the cooperative was involved, but he refused to comment on whether the company was part of a renewed offer due to ‘commercial reasons’.

However, Surveyor did confirm that this particular group had previously been considered as one of the pathways the Alliance Group could take.

“A consortium to put a proposal to Silver Fern Farms is one of the many models we have considered,” he told Rural News last week.

“One of the things we want to make sure our shareholders appreciate is we have not been able to say a lot for legal reasons around Silver Fern Farms as they went through their Goldman Sachs process. But it is important that share-

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holders and New Zealand farmers know we have put a lot of time into understanding what opportunities there may be.”

Surveyor admits the Silver Fern Farms (Shanghai Maling) proposal is a major change for the red meat sector.

“We’ve done a lot of work on our strategy, we have really thought deeply about it. That work included Silver Fern Farms, but Silver Fern is not critical to our strategy. We’ve got confidence that what we’ve got works. We have something really robust that creates a huge amount of upside for farmers.”

Surveyor says over the years Alliance Group looked many times at opportunities for mergers and acquisitions with Silver Fern Farms.

“We have already publicly stated, before the capital raising programme, we had an offer that had been rejected,” he says. “Over the last 12 months the management and the board have worked really hard to review opportunities around Silver Fern Farms. We have continued to think about them but we are not compelled by them in terms of our strategy.

“We have looked at them, we have done the work, but the company (Alliance) hasn’t found something that makes sense,” Surveyor told Rural News.

MIE chair Peter McDonald is hopeful of a ‘farmer-controlled’ option for SFF.

“Silver Fern Farms would have done exactly the same thing; they would have been looking over the fence at Alliance Group asking themselves the same questions and the two businesses have never collectively found a model that creates enough economic wealth or value for this [merger] to happen.”

Surveyor says the two companies already cooperate on a number of projects. Alliance Group, Silver Fern Farms and Anzco are all members of The Lamb Company, a joint venture for the supply of sheepmeat to North America.

He says both companies are also mem-

bers of the Meat Industry Association and share safety information with each other.

He points out that it doesn’t matter who owns Silver Fern Farms as this will not prevent the ability to talk and do things together, but they are also competitors.

“MIE is not trying to put a spanner in the works of this proposal, but we feel all the options should be there for voters and all the questions should be answered before they vote,” he says.

• Read more about the SFF-Shanghai Maling proposal on pages 12-15.

THEO ASKS FOR HIS SALARY TO BE ICED

Published by: Rural News Group Printed by: PMP Print

FONTERRA CHAIRMAN John Wilson says there has been “a complete misunderstanding” over the pay increase for the co-op’s chief executive.

Wilson says Theo Spierings’ base salary was frozen last month at his own request.

He says the $750,000 increase reported last month in its 2014-15 annual accounts was related to performance incentive payment for the previous year, when the payout to farmers

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 81,004 as at 30.06.2015

was a record $8.40/kgMS. Wilson, who attended farmer meetings with Spierings last week, says they were “front footing” the issue and explaining to farmers.

Many Fonterra farmers are struggling to make ends meet; low dairy prices have slashed farmgate returns.

Fonterra last week disclosed that Spierings earned between $4.93 million and $4.94 million in the year to July 31, 2015, up from $4.17m to $4.18m in the

previous year.

The company does not disclose Spierings’ base salary, but it is understood to be close to $4m.

Wilson says the incentive payment to Spierings was made in October 2014, after the successful 2013-14 season.

“Although it was reported in the last financial year statements, the actual payment was made a year earlier,” he told Rural News.

He says Spierings and the manage-

ment realise the challenging times faced by farmers.

“Theo came to the board sub-committee and asked that his salary be frozen for Fonterra’s $5 million dollar man this year. It’s very – Theo Spierings. unfortunate that this has been misrepresented in some media.” – Sudesh Kissun

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RURAL NEWS // OCTOBER 6, 2015

4 NEWS

Alliance Group out to entice new and shore up old suppliers PAM TIPA pamelat@ruralnews.co.nz

ALLIANCE GROUP is out to entice dissatisfied Silver Fern Farm suppliers and shore up support of its own in 24 roadshows around the country, which kicked off last Thursday.

Chief executive David Surveyor told Rural News the meat processor and exporter wants to return to its roots as a cooperative and will emphasise during the roadshows its cooperative principles and a new strategy it believes will get better returns to farmer shareholders.

“We are a 100% New Zealand-owned com-

pany and we exist for the benefit of our farmers,” he says. “The message we will give is that farmers are at the absolute heart of every decision we make.”

Surveyor says New Zealand farmers fundamentally understand that it is useful for them to have ownership in the value chain and the ability to influence the value chain for the red meat sector.

“Because we are a co-op, if you think about all the various participants in the value chain, we are the only ones who are absolutely thinking about the whole value chain and how to get more

money into the farmers’ pockets.

“Others, quite reasonably, are thinking about their own position. That whole cooperative ethos is really important to how we run our business and our farmers get and understand that.

“Or, at least, we are here for cooperatively minded farmers. There will be some who, quite rightly, have their own view on how they want to operate.”

Survey says they will hold 24 events across the North and South Island as compared to nine last year. They are encouraging smaller groups so they can have closer discus-

sions and answer questions.

The cooperative principles will be the first of three main topics that will be talked about including rolling out, in a detailed sense, what their principles are.

“These principles we have spent quite some time thinking through and we’ve done market research to road test them and make sure they work for them. We are now going to take these out to farmers and give them the message that we’re in partnership with them.”

Surveyor says they have spent a lot of this year thinking about company strategy. “We’ve

Alliance chief executive David Surveyor says the company will be highlighting its 100% NZ-owned and co-op model during its roadshow.

Decisions made in July product than frozen, and really got clear how we and August on automathey also get the operadrive forward the ecotion and the Smithfield tional benefits of having nomics of our business and Pukeuri plants will a week longer to produce and create a model that improve the yield from perpetually builds velocity chilled product.

The second part of this the animals, with the beninto the way we operate. efit going back to farmers. model is reducing costs.

“The strategy has two Surveyor took up the “If you want to be suckey parts: first, capturchief executive position cessful you have to get at ing more market value for in January and says the the right end of the cost our product; making sure in-depth look at the comcurve in a highly competwe match our product to pany’s strategy has the market we been valuable. are in; ensur“It has helped us [see “It has helped ing we continue clearly] how we will make us [see clearly] how to develop new marmore money for farmers we will make more money for farmers – kets; investing – whether in livestock whether in livestock in new prodpayments or distribution payments or disuct development, product prices we will be able to tribution prices we will be able to make life extension, make over time. It has over time. It has packing and uncovered some of brands, etc. uncovered some of the the opportunity we “We intend opportunity we have had have had to improve to use the gains generated by to improve the capability the capability of our We are capturing more of our business. We are business. adding some people value-added adding some people into into our business market and to bring particular putting that our business to bring skills. into higher liveparticular skills.”

“The other stock prices insight is the imporfor our farmtance of engaging our itive market,” Surveyor ers. That will pull through farmers. They are both says. more volumes for our our suppliers and our “We are investing in plants and we will reinvest owners and we need to building our capability the gains from that in our to get to lower cost; we whole sales and market make sure we are really will use that lower cost journey and back into connected with them.” once again to pay farmmore livestock value for The roadshows will ers higher prices for their our farmers.” also see the co-op commit livestock; that will pull An example of value is to giving regular market through more volumes improving product shelf updates “so farmers get and allow us to get the life. They have been able some sense of how the benefit of that to continuto extend the chilled life world is progressing as ally reinvest. by an extra week. That we move through the “We have these two gives economic value in season”. virtuous loops we are cresales, particularly in their “I think it will be a ating in the way we run UK markets, because better season than last for the business.” chilled is a higher value sheepmeat.”

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RURAL NEWS // OCTOBER 6, 2015

NEWS 5

Big lamb losses from rain PETER BURKE peterb@ruralnews.co.nz

SOME FARMERS in Hawkes Bay have suffered big lamb losses as a result of the recent floods.

Federated Farmers provincial president Will Foley, who farms in Central Hawkes Bay, lost 400 lambs, and he says farmers in northern parts of the province lost more.

Some farmers lost upwards Will Foley of 1000 lambs and others have lost calves. The heavy rain in the region has also caused slips on farms, damaging tracks and other infrastructure.

AgFirst consultant in Hawkes Bay Phil Tither says lambing is condensed on many of the high-performing sheep farms in the region, a possible reason for the high lamb losses on some farms.

Tither has also had reports that some older lambs didn’t survive the heavy rain, which he says is unusual.

“There will be individual farms hit badly, but as a region [there won’t be] a large impact overall,” Tither told Rural News. “Prior to this downpour, the weather for lambing was good from a survival perspective. As region it will probably average out, but for individuals it’s a different story.”

Tither says farmers are looking to get some sun on their lambs. He adds that the flipside is that all the rain has had a positive effect on farms because many people were worried about the dry weather they had been experiencing.

“I was updating a lot of Farmax models with a pasture growth rates forecast based on what El Nino might bring. Quite a few of our clients were running low pasture growth plans and looking at how their stock would cope with that,” Tither says.

“Now we have all breathed a sigh of relief and we can go back to plan A and put plan B aside. However in six or eight weeks we might be pulling plan B out again.”

Tither says this latest rain has given put enough moisture in the ground to get good spring growth rates for a reasonable time.

FONTERRA’S CHINA FARMS LEAK $44M SUDESH KISSUN sudeshk@ruralnews.co.nz

LOW MILK prices have not only affected farmgate returns in New Zealand, they blew a $44 million hole last financial year in Fonterra’s China farm business.

In the last financial year, ending July 31, 2015, the co-op spent $360m developing farming hubs in China; normalised earnings before interest and tax (EBIT) was -$44m.

The co-op is blaming the loss on the low milk price in China, a drop in livestock valuation and

farm development costs.

However, Fonterra chairman John Wilson expects the Chinese farm operations to return to profit this financial year.

Wilson says the co-op hopes the milk price in China will reach sustainable levels within six months.

“It’s hard to predict how milk prices will move,” he told Rural News. “But our Chinese farms are efficient, safe and have good environmental credentials and we are happy with that.”

Some Fonterra farmers have questioned the investment in

China and the lack of returns.

Wilson says Fonterra farmers understand how important the farms are as part of its commitment to China’s dairy industry.

“They also know how important it is to source own milk for value added products in China.

Just like farmers in NZ, farmers in China are facing low milk prices and are not making money.”

Fonterra has nearly completed its second hub in Ying County, Shanxi Province. Like the first Yutian Hub, near Beijing, the hub will end up with five farms of 3000 cows each.

Sales volume of raw milk for the year increased to 164,000 million tonnes largely due to additional capacity coming online.

This equates to 12m kgMS of milk produced for the year.

Fonterra has signalled the future investments in China farms may include funding from strategic partners as well as the co-op, enabling continuing integration.

Despite the loss in the China farming business, Fonterra reported a net profit after tax of $506m for the financial year, 183% more than the previous year.

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RURAL NEWS // OCTOBER 6, 2015

6 NEWS

AgResearch restructure plans criticised PETER BURKE peterb@ruralnews.co.nz

A FORMER director of AgResearch, Dr Jock Allison, says the present organisation doesn’t know how to nurture and grow its scientists.

He was commenting on a proposal by AgResearch to make 83 of its scientists redundant and to hire just 27 others to replace them -- a net loss of 56 jobs.

Allison says in whole areas of agriculture AgResearch now has no capability. He says it claims dairy fertility is a priority, but notes that the best scientist in this field resigned and went back to Canada.

“At one stage AgResearch was proudly telling a parliamentary select committee about material its staff had published in the

AgResearch’s controversial restructuring proposal has been developed by its management team lead by chief executive Tom Richardson.

prestigious science journal Nature, which was great,” he told Rural News. “But what they didn’t tell the committee was that they fired two out of the three authors of one of the papers within the year, so what does that tell you?”

Allison is also highly critical of Science and

Innovation Minister Steven Joyce’s defence of AgResearch, in which he claimed the CRI was doing what the farming industry wanted. Allison says this is “absolute nonsense”.

“AgResearch is substantially reducing research into animal health, parasitology and

immunology and yet they are [not reducing] areas of social science, which will provide nothing to the industry.

They say they are going to concentrate on farm systems, whatever that means.

“One might cynically think that increasing farm systems research means a whole lot of scientists running around with laptops trying to figure out where all the information goes. It is absolutely dismaying really.”

Allison questions the wisdom of AgResearch putting $10 million into a demonstration dairy farm in Southland. He believes that money could have been better spent retaining the scientists they are planning to make redundant.

He also criticises what he describes as a

disastrously top-heavy management structure, which increases the CRI’s overhead costs.

Compounding AgResearch’s problems is the science funding system, which is broken, Allison says.

“We have national science challenges -- an effort to try to prescribe the areas of research. But I haven’t heard anyone say a good thing about the national science challenges.

“There are some 14 areas for which scientists must bid to get funding and the whole thing is a terrible mess. The amount of time spent writing bids is enormous.

When I was a research director, scientists spent very little time bidding.

“They had to write project proposals to get money from their research directors and

AgResearch chair Sam Robinson says the organisation has to recalibrate is priorities to ensure it meets industry needs for scientific research.

they were reviewed within the organisation.

But nowadays these guys are spending 20-30% of their time looking for money and from what I have heard only one bid in ten is successful.”

Allison says extension work with farmers in AgResearch is virtually non-existent and he

believes some people in the organisation wouldn’t know what a farmer looked like. This is a far cry from the days when he was the boss at Invermay research station when up to 2000 people would turn up for a field day. @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 6, 2015

NEWS 7

Chair claims proposal well thought-out PETER BURKE peterb@ruralnews.co.nz

AGRESEARCH CHAIRMAN Sam Robinson says the proposal for change has been well thought out.

He told Rural News that the CRI’s board and senior management have been looking at the issues for several months.

He says AgResearch is responding to change signals from the sector that there are areas of science they no longer wish to fund and no longer seen as relevant as they used to be in the NZ agribusiness context.

He says, conversely, there are also areas that have grown.

Robinson believes they are looking at what science is now relevant and identifying science partners they can work with such as Landcare, Lincoln University and Plant and Food.

“We have had discussions with our customers and stakeholders

and we also have an international science advisory panel which we use. This proposal is not the end of AgResearch, it is about AgResearch becoming fit for purpose and delivering the most cost-effective and relevant science it can for our primary sector.”

Robinson says as a hill country farmer himself he can empathise with the comments about the lack of hill country research. But he says all the sectors involved in the hill country need to come up with a cohesive plan – including what science needs to be done and how this will be funded.

“The hill country is an enormous land area of NZ and it’s something we ignore at our peril.

We are as keen as anyone to do that work and we are doing work for the hill country. But if we are not doing enough, then the sector needs tell us what to do and how they are going to fund it.”

Robinson says AgResearch

has three ‘science horizons’ – essentially short, medium and long term. The horizon one science is work that is moving into development and being readied for commercialisation.

While the deep science, which is often science for science sake, may never be commercialised, but if it does it could take upwards of 12 years.

“We apply way more government funding to the horizon three science -- which hasn’t got an obvious industry partner -- than we do for the horizon one science,” Robinson says. “Again we take advice from our science roadmaps which are well-thought-out documents than we have been doing for the last three years. We think we have the mix right.”

Robinson doesn’t believe agriculture is suffering from a low blip in science funding, but rather that funding has steadily declined

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over the last couple of decades. He says AgResearch has to respond to this trend line and recalibrate its priorities to ensure that what they are doing meets industry needs, has the necessary impact and can be funded.

As for the proposed restructure, Robinson says as the leader of AgResearch he is deeply conscious of the stress and pressure this is putting on the people who work there.

“All our scientists are good people and we are doing the best we can to minimise that stress.

We are consulting with them and we will do all we can to help those who are made redundant through this process,” he says.

“Some areas of science are no longer being funded and some emerging areas are being funded.

While maybe some scientists can’t transfer from one discipline to another there are certain areas of growth we need to be aware of.”

A FORMER AgResearch scientist who specialised in hill country research and extension work says he’ll never forgive the organisation for walking away from this area of research Dr Clive Dalton, who worked at the McMeeken Centre, Ruakura, says AgResearch has left hill country farmers to their own devices and all the CRI can see is dairy cows.

“The hill country makes up two thirds of NZ farming and sheep farmers have been living from hand to mouth for the last 10-15 years. Nobody seems to give a stuff about their problems and solve them,” he told Rural News.

“For example, the Whatawhata hill country research station is all but abandoned. The last time I went past it all I could see were preventive detention workers potting trees. What an image for hill country research,” he says.

Dalton is also appalled at Steven Joyce’s comments that all the fundamental research was being done in universities. He’s unaware of any university in the country that is bristling with money to do fundamental research.

According to Dalton the environment is supposed to be a priority. But he claims the environment in the hill country, with land slips and other damage, doesn’t appear to figure as priority.

“On that basis one could argue that the future of hill country will be manuka and bees,” he says.

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RURAL NEWS // OCTOBER 6, 2015

8 NEWS

Fonterra’s PKE decision upsets many sudeshk@ruralnews.co.nz

FONTERRA IS being urged not to force restrictions on the use of palm kernel expeller (PKE) without consulting farmers.

The co-op’s handling of the issue hasn’t gone down well with farmers, says Federated Farmers Dairy chairman Andrew Hoggard.

He says many farmers were disappointed to get a letter last month urging them to restrict PKE usage below 3kg/ day/cow.

“It’s the way it was announced; rather than engaging with farmers the co-op sent a letter leaving farmers a bit concerned,” he told Rural News.

Hoggard last week attended a Fonterra shareholders meeting in Palmerston North and raised the issue; chairman John Wilson and chief executive Theo Spierings were at

the meeting.

Hoggard says the farmers were told that excessive use of PKE could become an issue for our international customers.

“If there’s an issue, then we have to take action; we can’t be making milk that no one will buy. But I hope Fonterra doesn’t come down with us on with processes; I hope they give us information and get our feedback before deciding what to do.”

Hoggard believes a bonus system for less PKE use and a demerit system for high PKE use may work.

Fonterra has told farmers it is setting guidelines for the use of PKE: maximum quantity 3kg/cow/day.

Fonterra chairman John Wilson says PKE usage has doubled in the past four years. Higher levels of PKE begin to affect milk composition, he says.

Fonterra is planning more tests and research in the coming months on PKE

WHY NEW RULES? ■■

■■

■■

■■

Trend shows large increase in PKE use Fonterra is developing a milk test for indications of high PKE use No current hard-and-fast rules on PKE limits The 3kg PKE/cow/day ‘guidance’

■■

precludes PKE use getting to the point where the co-op cannot process the milk to customers’ requirements The biggest part of a cow’s daily intake (18–20kg) in NZ is pasture, seen as a benefit by consumers.

usage and its effect on milk composition.

Fonterra subsidiary Farm Feds dairy chair Andrew Hoggard.

Source is a major traders of line and we will work with our farmers PKE, a by-product of the palm oil industry in South East Asia. PKE is to help them maximise profitability the residue of mechanical extraction of while ensuring the health of their herd.”

Hurrell says consumers globally are oil from the nut of the palm tree.

PKE is a dry, gritty meal with a soapy driving a trend towards dairy products smell and has low palatability until that are sourced from pasture-based cows get a taste for it. However, it has milk.

“Consumers want to know what is reasonable levels of energy (ME) and protein, and is relatively easy to intro- in their food and where it comes from.

We… make the most of this trend to duce to cows.

Fonterra group director co-oper- enhance returns to our farmers who ative affairs Miles Hurrell says after are already renowned for producing pasture, PKE is one of the cheapest sup- the best milk in the world… from pasture-based farming. plementary feed options for farmers.

“This gives us a key competitive Our data shows that use of PKE is advantage globally. Our milk products increasing, he says.

“We recommend our farmers follow have an excellent reputation and we [our maximum ration] guidelines…. want to maintain that, and stay ahead The recommended maximum of 3kg/ of increasing consumer expectations.” per day/per cow is a voluntary guide@rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 6, 2015

NEWS 9

Banks raise dairy forecasts PAM TIPA pamelat@ruralnews.co.nz

FARMGATE MILK price forecasts by at least two banks, ASB and BNZ, have now been hiked upwards to $5/kgMS for the 2015-16 season.

This follows the most recent GlobalDairyTrade auction in which the overall index rose 16.5% and whole milk powder rose 20% to $2495/t.

ASB has raised its forecast milk price by 50c from $4.50/kgMS to $5/kgMS and BNZ by $1.20, from $3.80 to $5/kgMS. All eyes will be on Fonterra this week to see if it revises its forecast milk price of $3.85/kgMS at the release of its annual results on Thursday.

of this current season but certainly we haven’t factored in anything like the pace of climbs we have seen in the last three events.”

BNZ is factoring in prices getting to $2700/t to $2800/t for whole milk powder. “They are currently averaging about $2500/t, so we are forecasting a little bit higher but nowhere near the degree of increase we have seen over the last few events.

“We have stressed over the last few months the wide range of possibilities and there are many moving parts out there -- whether it be demand from China, or wobbles in financial markets or indeed just [the state of] the weather. We

dicts NZ production could fall up to 8%.

“We have more buyers in the latest auction and these have been largely spooked by the prospect of further volume reductions, and some are looking to sell their 2016 pipelines at the lowest-possible prices and they are tied to NZ

product in some cases.”

However she says the GDT is unlikely to continue rallying at these extreme rates until there is a major shift in the fundamentals and a rebalancing of supply and demand factors.

“That is starting. Farmgate prices are falling

ASB’s Nathan Penny.

elsewhere; we have seen farmers converge on Brussels protesting at the milk price. Once prices start falling that is a huge signal to decrease production and that’s what we need when the world is still awash with milk,” she says. @rural_news facebook.com/ruralnews

“The market is still a bit focused on what Fonterra is doing with its auction volumes. That may explain some of that additional price strength for now.”

Doug Steel, BNZ economist, says just two months ago there was probably a downside risk to the coop’s previous forecast of $3.80/kgMS. This risk squared to neutral, then at the last auction it went to upside and it has now lifted, showing how much things have changed in the past couple of months.

Steel says they had been hoping for a decent increase in last week’s GDT -- maybe in the 5-10% range. But at 16.5% the rise was “encouraging”. Prices are moving in the right direction and obviously less volume is part of it.

“Potentially there is a change in buyer psychology. When prices were falling rapidly before, there was the tendency [for them] to step back, thinking [they] would get the product cheaper at the next event,” he says.

“Now that prices have clearly turned higher, there seems to be more keenness to buy now and there is an increase in the number of unsatisfied buyers which suggests there are more of them and they are struggling to get product, which is pushing prices higher in the near term.

“We are of the opinion there [will be] some further gains over the course

know there is a very strong El Nino but we don’t know what will be its impact on production.

“When there are so many things in play the market tries to figure out all those things and you see volatility in prices and that’s what we have.”

ASB rural economist Nathan Penny says the bank expected a decent increase at last week’s auction of about 15% for whole milk powder so the 20% was within the range of its forecasts.

“The market is still a bit focused on what Fonterra is doing with its auction volumes. That may explain some of that additional price strength for now,” he says. But he says the market has not yet fully realised the potential extent of a drop in NZ milk production which the ASB forecasts could be up to 5%.

Rabobank economist Emma Higgins says the massive jump in GDT prices is extremely pleasing and positive news.

“The underlying reasons are largely a decrease in available supply and an increase in interest.

The main driver is falling supply which is creating a short term mini-market,” she says. Rabobank pre-

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RURAL NEWS // OCTOBER 6, 2015

10 NEWS

Skellerup’s international sales up PAM TIPA pamelat@ruralnews.co.nz

AGRICULTURE PRODUCT sales growth in US, China and South America enabled Skellerup to increase its agri division earnings despite the slightly softer New Zealand market, says chairman Sir Selwyn Cushing.

Skellerup Holdings made $21.9m after-tax profit in the last financial year; NZ, Australia

and North America generated about 25% of the revenue, followed by Europe then Asia. The agri division which makes dairy rubberware, animal hygiene products and technical footwear recorded pretax earnings of $22.1m, up by 2% on flat revenue of $80.5m.

“Our focus on international markets enabled the agri division to record an increase in earnings and overcome the impact

of a reduced contribution from a NZ market buffeted by lower dairy pay-outs,” says Cushing in the annual report.

“Significant growth was achieved in the US, China and South America. Although results in NZ were slightly softer than in the prior year, sales of dairy rubberware during the winter peak, when much of the onfarm and shed maintenance work is done, were relatively solid.”

Cushing says the demand for protein remains a key driver of the global dairy industry and that demand should continue for the medium term.

“While world prices for dairy commodities remain volatile and are presently below the levels of recent years, long-term prospects for the industry are good,” he says. “US milk production continues to increase, as does the demand for dairy

products in developing countries.”

He says deregulation in the dairy market in Europe and the inevitable removal of the sanctions on Russia will provide new opportunities for growth. Many countries in South America are continuing to develop their dairy capability also.

Cushing says a highlight of the year is the excellent progress being made at its new Wigram plant; $15m has been spent on the

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project this year and $25m more is earmarked to complete the construction and fitout.

“As shareholders will appreciate, our Woolston factory has been the cornerstone of our agri division for some 75 years.

The new facility sets us up to stay at the forefront of dairying best practice for the next 75 years and beyond.”

Agri division general manager Guy Keogh says

with the new dairy rubberware development and manufacturing facility being built at Wigram they had the opportunity to lay out the ideal design. “Our business has changed significantly over that time and, while we’ve continued to manipulate and adapt the current site for our needs, a purpose-built facility is going to provide opportunities that will benefit customers and staff.”

LESS MILK EXPECTED NOW Most of the major banks are predicting a drop between 4% and 8% – much higher than Fonterra’s current forecast of a 2-3% fall.

Rabobank is picking a fall of 8%, ASB forecasts 5% and BNZ picks 4%.

ASB rural economist Nathan Penny says the market has been focused on Fonterra’s reduction in volumes on the GDT but will soon turn its focus on production and this is looking particularly weak.

“We’ve now factored in a 5% fall in production. Historically, that [would be] the largest fall since 1999… On that basis we would expect prices to continue to rise,” Penny says.

Aggressive cow culling by farmers is evidence “both in numbers and what we are hearing around the traps”.

“If you look at cow slaughter, the data is running well ahead of last year. With US beef exports we are going to breach the quota for the first time since 2004, I believe, and that is largely down to the dairy cow cull.

“Farmers are likely to cull more once they get through calving and peak milk production so they are continuing to think along the lines of reducing their herd size.”

And spring has been poor, particularly down south, he says.

“In Southland they are struggling with temperatures and grass growth. The other factor is farmers using supplementary feed sparingly. So adding those things up, they are all effectively bowing to production being pretty weak. El Nino is another risk that hasn’t been factored in.”

Rabobank’s Emma Higgins says supply could fall more – maybe up to 8% - as farmers cull, cut back the use of supplementary feed and take other measures to reduce costs.

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RURAL NEWS // OCTOBER 6, 2015

12 NEWS FEATURE

Industry takeover or saviour?

Chinese investor Shanghai Maling proposes buying a $261 million (50%) stake in meat co-operative Silver Fern Farms. David Anderson sat down with SFF chair Rob Hewett and Shanghai Maling president Wei ping Shen at SFF’s headquarters in Dunedin, in late September, to ask why the Chinese company was looking to make the investment and what benefit the proposed joint venture would have for NZ and shareholder farmers.

SINCE THE SFF/Shanghai Maling deal was announced earlier last month some SFF shareholders, and other critics, have expressed concerns about the implications of foreign investment, while others have welcomed the move.

Speaking through an interpreter Shanghai Maling president Weiping Shen told Rural News that SFF farmer shareholders would be “very happy” with his company’s investment in the meat co-operative.

He says his company understands the Chi-

nese market and believes its insight and reach into that market will improve returns for red meat farming in New Zealand and to SFF shareholders.

Shanghai Maling, a subsidiary of state-owned food giant Bright Food Group (which owns a 38% stake), was the first food processing company to list on the main board of the Shanghai stock exchange in 1997.

Until now pork has been its major focus, but Shen believes a coming “boom” in beef and lamb demand – driven by younger, Chinese con-

sumers – is just around the corner. Traditionally, pork was the most widely consumed red meat in China, but beef and lamb has been growing fast and he expects it to be ‘’booming’’ in the next few years.

The company has been looking for opportunities in overseas markets for a few years – including Australia, New Zealand, Argentina, Brazil and Uruguay.

Shen says Silver Fern Farms’ ‘plate to pasture’ strategy aligns with his company’s values and vision. Over the past few months there have been

comprehensive discussions with Silver Fern Farms’ board and management and this alignment of strategy has grown. He sees NZ as the right place to build the partnership and SFF as the right partner.

Shen says SFF enjoys the strongest brand recognition in red meat in China and that the firm is the strongest exporter to the region. Further, he believes a Silver Fern Farms Shanghai Maling partnership will make the brand the best recognised red meat name in the Chinese market.

He predicts huge growth in red meat consumption in China during the next 10 years – greater than the 7% forecast.

“Imports into China of beef and lamb have grown by 30% year on year. Chinese consumers, especially the younger generation, appreciate the value and taste of NZsourced beef and lamb.”

Asked why his company would want to invest in the NZ red meat sector when it has barely been profitable all these years, Shen said the same question has been asked by TO PAGE 13

Shanghai Maling president Weiping Shen says SFF farmers will be ‘very happy’ with the new joint venture.

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RURAL NEWS // OCTOBER 6, 2015

NEWS FEATURE 13

70 years of change The company was established in 1948 as the Primary Producers Cooperative Society, based in the South Island as a meat marketing cooperative, mostly of sheep.

It became known as PPCS Ltd but remained small in the meat industry until the early 1970s when new management was

Saviour or takeover? shareholders and market commentators back in China.

“This investment is not attractive in the short term, but our long term view is with the joint vision and strategy through this partnership the investment will be significantly different.”

Questioned about the concerns expressed in some quarters about Chinese investment in the NZ agri sector, Shen claims this deal is “different”.

“This partnership is different from most Chinese investments in NZ, where they are just buying land,” he says. “Shanghai Maling brings value to SFF, not just money.”

He says his company is a leading player in Chinese red meat distribution, with access to 1000 supermarkets, and the parent company Bright Foods reaches another 60,000. This new joint venture will put SFF brand names “on the map” in China.

“There is no better investment than this for SFF shareholders,” Shen adds. “It will mean better returns to shareholders and farmers and we also see the potential of creating more jobs in NZ.” Silver Fern Farms chairman Rob Hewett says the deal is not just a “financial transaction” and he is excited by the prospect of the joint-venture opportunity, which includes the expectation of no debt and cash in the bank.

He admits Shanghai Maling comes across as SFF’s proposed business partner from central casting. “As I tell shareholders

at our meetings, ‘if you get married only for money it usually ends up in tears’.”

Hewett claims the deal will mean no other meat company has the same access into China, and a supply chain vertically integrated and deep into retail.

The deal is subject to Overseas Investment Office and Chinese regulatory approval.

While it does not need shareholder approval, either by law or company rules, Silver Fern Farms decided it wanted a buy-in by farmers and is seeking 50% shareholder support. Hewett is confident shareholders will approve the deal.

Shareholder meetings are being held before a special meeting in Dunedin on October 16. Five meetings have already been held, attended by 650 farmers; Hewett was delighted with the high degree of interest and turnout.

“When the venture is explained to them, they can see the value. This is a great opportunity for Silver Fern Farms.

“We’ve got alignment on strategy. We’ve got an opportunity for a privileged position inside China. If this is not an example of a good investment, what is?’’

If the deal is approved, the new company will be governed by a 10-person board: five directors from Shanghai Maling, three farmer directors and two independent directors from SFF. Shen and Hewett will co-chair the joint venture board.

was a vehicle that allowed the acquisition of Canterbury Frozen Meat.

In 2006, it took over Richmond Meats, Hawkes Bay, after a long and acrimonious battle.

This move saddled the cooperative with huge debt.

The company was renamed Silver Fern Farms in 2008. A take-

over by PGG Wrightson that year fell through due to the global financial crisis.

Since then the cooperative has suffered big losses, barely making a profit most years and leading to a restructure in 2013.

In 2015 Chinese investor Shanghai Maling offered $261 million for a 50% stake.

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FROM PAGE 12

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RURAL NEWS // OCTOBER 6, 2015

14 NEWS FEATURE

Who is Shanghai Maling?

■■

■■

Shanghai Maling Aquarius Co Ltd (Shanghai Maling) was founded in 1997.

It is a listed subsidiary of Bright Food (Group) Co, processing and distributing chilled and fresh meat, valueadded beef, and candy and bottled honey.

■■

■■

Shanghai Maling directly controls 800 supermarket and retail stores including 56 meat retail stores in Shanghai.

Its meat sales network covers large-medium size cities in Shanghai and Chinese provinces.

■■

■■

■■

food and beverage company, based in Shanghai, is the largest China-based food company; it is owned by the Shanghai Government.

It has a presence on most Chinese online shopping websites.

It has a market cap of $3.2 billion, total assets of $1.65b and revenue of $2.65bn.

Owner Bright Food Group was founded in August 2006. This multinational

■■

Bright Food has four listed subsidiaries: Bright Dairy & Food Co Ltd, Shanghai

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RURAL NEWS // OCTOBER 6, 2015

NEWS FEATURE 15 Lobby group continues fight LOBBY GROUP Meat Industry Excellence (MIE) says Silver Fern Farms shareholders must carefully scrutinise the proposed joint venture with Shanghai Maling.

Chairman Peter McDonald questions whether the proposal is the best or only option available to the company or to farmers.

He is calling on farmers to get engaged in understanding and

debating the proposal and to question the SFF Board.

“Why has a potential 50% partner been granted executive power at board level which doesn’t seem to be reflective of their proposed share?” McDonald asks.

“Of course there are some positive elements to the proposal, but there seems to be very little understanding of the risks or

costs to farmer shareholders and the industry.”

He says the biggest question of all is why just one option was being put forward by the SFF board.

“Shareholders should be trusted to view and vote on more than one option” MIE wants Silver Fern Farms shareholders to get engaged in this process. McDonald says

farmers should attend meetings and pass on information to other shareholders.

He also questions the “sweeteners” being offered to shareholders in the deal. “These should not be the deciding factor,” McDonald adds. “If anything, farmers should be asking why the deal requires a financial sweetener to shareholders if it makes sense in the long run.”

Merger proponent Jeff Grant has not given up hope yet.

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ANY OPPORTUNITY to cooperate with Silver Farm Farms should continue to be pursued, says Alliance shareholder Jeff Grant.

“I am a great believer that you keep plugging away until the fat lady sings,” says Grant, who was a leader in a successful bid by Alliance shareholders to ask their board for a special meeting to consider merger opportunities with Silver Fern Farms.

The Chinese bid to invest $261 million in Silver Fern Farms “slightly changes the game”, he jokes, and the special meeting resolutions were written before the bid was announced.

They have discussed and agreed with the Silver Fern Farms group of shareholders and the Alliance chair that they will wait for the SFF special meeting on October 16 and, subject to the outcome of that, will decide on the special meeting for Alliance.

Grant believes there has been an initial rush of enthusiasm for the Chinese deal but subsequently some debate on the offer and whether shareholders will overwhelmingly accept it.

He says there may be second option.

“We were aware there was some work done on a previous option prior to the announcement of the Chinese option and there has been some discussion of a re-proposed second offer.”

He understands it is a consortium involving a number of parties.

“Our focus is still looking at whether there is a logical step for Alliance to have any discussions about shared facilities. That focus hasn’t gone away but if that vote on October 16 is overwhelmingly in favour and the deal goes through, the opportunities are somewhat less than proposed initially.”

He says although Silver Fern Farms will still be talking about retaining its cooperative model – which would invest in the new Silver Fern Farms company – what legitimacy the co-op has as a shareholder is yet to be seen.

Any future possibilities of collaboration would depend “whether it is just a shareholders’ committee or a true co-op”.

Reaching agreements within the industry “like everything in the meat industry, will be long and torturous,” Grant says.

“When you think there is one solution, another one comes along …..,” he says. “There is a whole range of opportunities for procurement, processing and marketing for the co-ops that would be advantageous to both groups of shareholders.

“Whether that required, even in the initial discussion, a full merger or not wasn’t the issue. The issue was that fundamentally the co-ops need to formally get together and decide a strategy which would benefit both shareholders.”

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RURAL NEWS // OCTOBER 6, 2015

NEWS 17

Tatua shines again in dairy payout SUDESH KISSUN sudeshk@ruralnews.co.nz

SMALL WAIKATO milk processor Tatua’s payout has again left other dairy co-ops trailing behind.

Tatua’s 86 supplier families will receive $7.10/kgMS for milk supplied last season; Fonterra is paying its 100% shared up suppliers only $4.65/kgMS and Westland $4.85/kgMS. Tatua has also retained a whopping 63c/kgMS for capital expenditure; Westland retained 10c/kgMS. Fonterra chairman John Wilson congratulated Tatua on its results but notes that the two co-ops cannot be compared. “We are quite a different dairy business and our farmers appreciate that,” he told Rural News.

Fonterra benchmarks its performance against global dairy co-ops like European giants Arla Foods and FrieslandCampina, based on the return on capital.

“At the moment, we are among the best in the world when compared with the Arlas and FrieslandCampinas.”

Last season, all dairy processors were hit by lower commodity prices.

Benchmark whole milk powder prices

ON THE RISE RECENT GAINS in global dairy prices have prompted dairy companies to raise their payout forecasts for this coming season.

Fonterra has lifted its forecast by 75c to a range of $5.00-$5.10/ kgMS; it comprises a farmgate milk price of $4.60 and a forecast dividend range of 40-50c/share.

Westland has lifted its forecast payout by 30c to $4.90/kgMS to $5.30/kgMS. Westland chief executive Rod Quin is cautiously optimistic.

“The current market has shown signs of increasing demand and price recovery,” Quin says. “The key contributors to Westland’s pay-out are the prices for skim milk powder, casein and butter, and a growing

declined from US$3250/t at the beginning of the year to US$1850/t by the end of the year, down 43%.

Tatua chairman Steve Allen says despite market weakness the company recorded a strong result due to its product mix of caseinate, WPC and AMF (anhydrous milk fat) being preferred

contribution from infant and toddler nutrition.”

Tatua chairman Steve Allen says recent upturns in prices on the Global Dairy Trade auction are positive, but global milk supply continues to exceed demand. Until this corrects, further upward, price movements may be limited, he says.

“In announcing a strong result for 2014-15, we are mindful that the 2015-16 year will be challenging. Demand remains fragile, climatic conditions are uncertain and we anticipate continuing volatility in prices and exchange rates.

Despite this, we expect our focus on specialised added value products to continue to hold us in good stead.”

throughout the year, and improved margins on its specialised added value businesses as a result of the falling New Zealand milk price.

Foreign exchange management continued to be a challenge with the NZ dollar falling throughout the year.

“Our foreign exchange hedging

Tatua chair Steve Allen.

policies have achieved an overall conversion rate of 0.7570 -- a strong performance,” says Allen.

Milk supply from Tatua suppliers was 15.7m kgMS vs 13.2m kgMS in 2013-14.

“Milk from our farmers continues to be outstanding in quality with average somatic cell counts at historically low levels,” he says.

At Westland, the lower commodity prices affected total revenues, down 23% to $639m.

Chief executive Rod Quin says West-

land, like dairy companies globally, has been adversely impacted by the “significantly lower” market prices last season.

He says continuing its move into more value-added production is the best strategy to ensure shareholders competitive and sustainable returns.

Fonterra’s final payout of $4.65 comprises a farmgate milk price of $4.40/ kgMS and a dividend of 25 cents/share.

Chairman John Wilson says extremely challenging trading conditions globally had affected all parts of the cooperative’s business.

“Falling global dairy prices due to a supply and demand imbalance impacted the milk price, while the dividend reflected the higher [cost of expanding the co-op’s capacity] to support milk growth in New Zealand, essential investments in China, and the cost of maintaining a higher advance rate through the season.

“Stronger performance in the second half resulted in normal earnings before interest and tax almost doubling, with good growth in our consumer and foodservice businesses and a major push in our ingredients business to offset low milk prices with improved margins.”

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RURAL NEWS // OCTOBER 6, 2015

18 NEWS

Psa bounces back in wet, windy winter and surfaces in Whangarei PAM TIPA pamelat@ruralnews.co.nz

A COLD winter and wet, windy spring has seen a resurgence of Psa in kiwifruit vines in all affected areas.

And the bacterial disease has been found in the Whangarei region for the first time.

However, Kiwifruit Vine Health (KVH) chief executive Barry O’Neil is confident the management techniques developed over the past five years will keep it well under control. In fact, he believes management practices developed to combat Psa have helped boost kiwifruit production.

KVH met with 50 Whangarei growers and industry people last week.

“Obviously there is disappointment in the region but we focused both as a region and as individual growers on what needs to happen now Psa has been identified,” says O’Neil.

“The pro-activeness of individual growers in managing the risk and the collective action of the regional grow-

ing community are important now.”

Until now Whangarei’s 144ha of kiwifruit production in 49 orchards has been free of the disease, despite confirmed Psa being found further north in Kerikeri and south in Kumeu, Auckland.

O’Neil says at last week’s meeting they discussed how regions like Kumeu had stopped the spread after Psa was identified two years ago in one orchard.

That orchard of Hort16a – an older variety of Gold which is very Psa sensitive -was cut out straight away. “So far there haven’t been any more orchards in the Kumeu region where Hort16a has been identified.”

O’Neil says there is only 25ha of Hort16a left in the Whangarei region.

Most Gold growers are already transferring to the more resistant G3. The orchard in Mangatapere where Psa has been found on male and female vines was already grafting G3 onto the rootstock and the Hort16a is being cut out.

Growers were disappointed but generally calm about the find.

But overall more Psa is being seen

Until now, Whangarei’s 144ha of kiwifruit have been free of Psa.

this season. “Spring is the time we see Psa show itself as the vines come out of dormancy,” says O’Neil. “But this year we are seeing more Psa than last year because of the winter conditions were colder and now spring is wetter and windier.

“It comes through on the new Gold variety but it is relatively tolerant. Providing growers are proactive in managing it, it is not creating significant

problems in most cases.

“Some of the more challenged orchards, very cold low areas or wet areas, have more of a problem.”

But O’Neil says it is not anticipated it will have any impact on overall production this season.

“When you look at the industry recovery and the record production levels we have had this last season, even in a Psa environment, we as an industry have increased our productivity,” he says.

Growers are helping this by paying more attention to the details – getting shelter and drainage right, artificially pollinating, protecting vines better and improving orchard hygiene between vines.

“Collectively, even with Psa, that has resulted in growers increasing their production rather than decreasing. So it is too early to say what the impact will be for next harvest but at this stage we are not anticipating any significant change.”

Green is affected in different ways

than the Gold. In Gold there is more cane dieback and collapse. In the Green there is leaf spotting and flower infection, so the flowers don’t pollinate and they drop off. “That is a challenge for Green growers who need to be vigilant in managing that.”

Various research efforts are still underway to combat Psa. “I don’t think for a windborne bacterial disease there is one cure that will be found but there are a number of strategies underway.

One is breeding more tolerant varieties and so Zespri with Plant and Food is [working hard] to do that.

“Secondly, improve tools to manage the impacts on vines – whether that’s cheaper products, small biological products and endophytes; we’ve got a large research programme underway investing $2m a year, totally $12m to date, and that will continue until we are confident we understand Psa, and the impacts of Psa have been minimised in the industry.” @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 6, 2015

NEWS 19

Rural areas feeling ag slowdown BUSINESSES IN rural areas are feeling the effects of a marked slowdown in the agricultural sector, according the latest MYOB Business Monitor.

The survey of over 1000 businesses nationwide, including at least 200 rural SMEs,

found that in the last 12 months only 18% of rural SMEs have seen revenues rise; the SME average for rising revenues is 31%.

Almost one third (32%) have seen revenue decline in the year to August 2015 (25% SME average).

MYOB New Zealand national sales manager

Scott Gardiner says the challenges in the agricultural sector, especially with the fall in dairy prices, have reverberated quickly in the regions.

“These latest results are a good indicator of how quickly a downturn at the farmgate can have

an impact on businesses in communities throughout rural NZ,” says Gardiner.

“While the effects of instability in international markets, especially China, a slowdown in Australia, and the fall in dairy prices are widely recognised as having pressured NZ

farmers, it is troubling to see how fast that has rippled through rural business communities.”

Meanwhile, only 20% of business operators surveyed in rural areas are forecasting revenue growth in the next year, and only 16% of those in the agricultural sector

forsee improving revenue in the next 12 months.

Gardiner says the survey also found that 28% of rural businesses are expecting a revenue fall and 35% of SMEs in the agricultural industry.

Falling revenue in the rural sector is also reflected in much

lower confidence in the overall economy.

While half (51%) of all SME operators expect the economy to decline in the next year, 69% of rural business operators and 76% of agricultural businesses are forecasting a deterioration in the whole economy.

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THE BOARD of the kiwifruit industry regulator Kiwifruit New Zealand (KNZ) has a new chair, Kristy McDonald QC. The outgoing chairman of KNZ, Sir Brian Elwood, says McDonald is a highly regarded Queen’s Counsel with a wealth of legal, governance and regulatory experience and a genuine interest in primary industries.

McDonald, a Wellington barrister, is a director on boards including the Accident Compensation Corporation and Wairarapa Building Society; she chairs the Judicial Control Authority for Racing and is the former chair of the Real Estate Agents Authority.

Geoff Morgan has recently been appointed chief executive, replacing Richard Procter who was in the role for 10 years. Morgan has experience in exportoriented industries worldwide, including seafood and meat. He also has regulatory and marketing experience.

Morgan, who lives in Tauranga, is chair of the Tauranga Boys’ College board of trustees. The outgoing chairman, Sir Brian Elwood, has been in the role for 11 years.

“I believe the kiwifruit regulations have created a stable environment to enable growth and success in the kiwifruit industry. It is pleasing to see the industry now poised for growth and substantial expansion,” says Elwood.

RURAL NEWS // OCTOBER 6, 2015

20 NEWS

Don’t write China off yet!

IT’S TOO early to write off China, says Hayden Dillon, head of corporate agribusiness for Crowe Horwath.

“China is far from

finished as a key driver of growth for the New Zealand agribusiness sector,” says Dillon.

Despite recent negative market

commentary on China, Dillon, who recently visited there on a BNZ ‘Port to Plate’ tour, was optimistic about the future of NZ agribusiness.

But he acknowledges there are challenges in doing business in China, which is “large, complex and changing faster than we can possibly

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understand”. “There is no simple headline or strategy to sum up this market, but no doubt it is still the most valuable opportunity to NZ agribusiness,” says Dillon.

Referring to reported drops in Chinese imports, Dillon suggests ‘reading between the lines’ and focussing on the key numbers for NZ exporters.

“Though Chinese imports dropped yearon-year to August 2015 by 13.8%, food imports grew by up to 25%. This might be bad news for the likes of Prada, Audi and other luxury brands, but the story for NZ, exporting food and food technology, is very strong,” says Dillon.

He forsees no change in the trend in rising food imports by China. “We’re feeding the dragon: China has a rapidly growing population with rising incomes and is far from reaching its satisfaction point in food demand.”

Changing diets in China were explained to the visiting Kiwis by the Agricultural Development Bank of China. The bank says demand for edible oil, meat and dairy will keep growing and rice consumption per capita will decrease.

Dillon notes the beginning of a rise in demand for ‘green’ products, essentially organic or highly certified food. Here could be further niche opportunities for NZ

Crowe Howarth’s head of agribusiness Hayden Dillon says China is far from finished as a key driver of NZ agriculture.

businesses.

The real risk is not seen in the short-term news from China, Dillon says. It is instead the risk that NZ will not position itself as being able to meet China’s immediate food demands.

“The opportunities in China are almost limitless. Our products are sought as being safe, but that will not last. The complexities of China mean that our simple approach of producing and shipping a commodity to a port will not suffice once China starts addressing the immediate demand shortfalls through growth in its industrial farming practices.”

To manage the productivity and quality of the food supply chain

has prompted the Chinese government to support the development of farms with 15,000 cows. “And China produces half the world’s apples, so they know about industrial farming,” Dillon says.

Dillon says Fonterra’s setting up dairy farms for local supply in China, using New Zealand expertise and farming technology, is a smart move.

NZ agribusiness must develop successful brands in China, he says.

“The consumers are far savvier than we give them credit for: they do not trust lightly and will do homework on traceability and social feedback before buying.” @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 6, 2015

NEWS 21

Overseas worker rules to be simplified AGRICULTURAL CONTRACTORS around the country will soon be able to bring in overseas workers far easier than in the past following a deal between its national body and Immigration NZ. Rural Contractors NZ (RCNZ) president Steve Levet says his organisation has been working with Immigration New Zealand for a long time

explains.

“For starters, there will need to be a written contract between RCNZ and each member company participating in the scheme, to ensure each knows their responsibilities and that RCNZ and other member companies are protected. If these conditions are not complied with, the AIP can be rescinded.”

out this seasonal work,” Levet explains. “That’s why it is necessary for us to look overseas to find experienced people to fill this need.”

Levet describes the new scheme as great news

for the sector and believes it will streamline and simplify the whole process of bringing in overseas workers – rather than the current rigmarole agricultural contractors currently endure.

Rural Contractors NZ president Steve Levet says the new scheme is great news for the ag contracting sector.

“Members who are registered with RCNZ will now apply to bring in overseas workers under our umbrella, rather than go through all the hoops and hurdles they currently have to as individuals.” in an effort to resolve the problems around contractors bringing in overseas workers for the harvest season.

“After many meetings and a lot of hard work by RCNZ – together with Immigration NZ – we believe we have come up with a solution that will solve many of the problems rural contractors currently experience every year and make it much easier to bring in overseas workers,” he says.

“Members who are registered with RCNZ will now apply to bring in overseas workers under our umbrella, rather than go through all the hoops and hurdles they currently have to as individuals.”

Levet says the new scheme will see RCNZ applying for an approval in principle (AIP) on behalf of all members of the national body and contractors. Contractors will then be able to apply online for a visa for the person being recruited without having to advertise, go to WINZ or any the other requirements currently causing so much difficulty.

“As RCNZ will hold the AIP, there are a number of responsibilities placed on us and it will be important that all those contractors who wish to use this scheme comply with all these conditions and requirements,” he

These conditions include that the AIP is only available to members of RCNZ and that the contractor or company must also hold registered contractor accreditation with national body.

“This is a safeguard to ensure that the appropriate statutory and regulatory compliances are being met,” Levet explains. “Those applying to the scheme will also have to fully comply with RCNZ’s Code of Ethics and our Code for Employing Overseas Staff.”

Levet says contractors will also be required to advise the national body when an overseas worker moves to another company.

“Should a worker go to a company that is not part of this scheme, they (the overseas worker) will be in breach of their visa.”

Levet adds that – due to the amount of the work involved in setting up the new scheme and the imminent start of the new season – RCNZ aims to have it up and running by 1 June 2016.

It is not known exactly how many temporary, overseas workers are needed by rural contractors around each year, but it is thought to be around 900.

“Every year, in many parts of the country, it’s often impossible for rural contractors to find skilled New Zealanders to carry

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RURAL NEWS // OCTOBER 6, 2015

22 NEWS SPCA GETS IN ON THE ACT A ‘BLUE Tick’ accreditation scheme being offered by the SPCA for egg production can be viewed by producers as a marketing tool they may or may not want to use, says Brooks.

Under the new welfare requirements colony, barn or free range systems are approved – as are aviary systems, which are not common in NZ. The industry association’s view is that colony, barn or free range systems all meet the Animal Welfare Act, so then it is a customer choice.

Colonies are like larger cages with 20-60 birds but they have nesting areas, perch areas and scratch pads. They are deemed to meet the act; in fact they are deemed to be as good as barn or free range in different ways, says Brooks. The barn, free range or colony systems all have advantages but are all deemed appropriate.

The SPCA is offering a ‘Blue Tick’ which is an audited accreditation scheme giving consumers a guarantee that the products they are choosing are humanely farmed.

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Brooks says ‘Blue Tick’ is an option which egg producers may wish to consider as a “marketing device”.

“If farmers believe in the system for their marketing they may wish to use it,” says Brooks.

“We don’t want that sort of thing to happen but if people believe they want another system to audit farms they are entitled to do so. But it’s a marketing call.”

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Cracking a new egg code PAM TIPA pamelat@ruralnews.co.nz

THE NEW welfare code is likely to bring consolidation in the egg industry, according to the Poultry Industry Association of NZ. Executive director Michael Brooks says with cages to be phased out by 2022, the minimum cost of conversion for even a small-medium producer will be $1 million.

However, he warns that these minimum increases in costs will be 15-20% and the price of eggs will rise.

But despite a tough timeframe to meet new welfare standards, egg demand is rising and Brooks says the industry has a bright future.

The new 2012 welfare code requires a step-by-step process to phase out caged egg production. The first cages were to have gone by 2016 but that’s been moved back to 2018 because it wasn’t able to be done in time – a fact independently confirmed, Brooks says.

Under the new code of welfare about one third of the cages must be gone by 2018, another third by 2020 and all battery cages by 2022. And the new Animal Welfare Act will make some practices into offences.

“We are happy with that; we want to make sure everyone meets the standards,” Brook says.

The alternative options for egg producers are barns, free range or colony. They could also go to aviary but that’s a European system not yet big here.

Brooks says the conversions will be costly. To switch from cage to colony even for small-medium size farms will cost about $1 million.

“Some of the older farmers are probably weighing up when the time comes whether to get out of the sector,” he says.

“If you go into free range you need to buy land and set it all up, so there are costs…. The minimum we are looking at is probably a 15-20% increase in costs just to enable farmers to go to colony alone, to get the funding together and set up the operations. And that is a cost the consumer will have to pay for.

“The price of eggs will go up; it is a question how much but there has to be some increase. There is simply too much cost in the new changes not to cause an increase.”

Small-medium size cage farmers may see the cost of borrowing for new systems

Poultry Industry NZ’s Michael Brooks.

as too much.

“Also, like a lot of agricultural industries in NZ, the age profile is on the older side and you’ll have farmers who will says ‘at my age do I want to take on this big loading of debt and work my way through it?’. They’ll probably look to sell to someone who is able to do that or farm out of the system as the time comes for the cages to be removed.

“You will probably see fewer but bigger farms, both in the free range and the cage [colony] sector.”

An egg shortage in the future is a possibility. “It is a complex process, you have to order the chicks, hens take five months to get to their date of lay, you’ve got to get your rotations right in ordering the birds ahead, there’s a question of costs and we know some farmers have had issues in getting through the Resource Management Act to get new farms; it’s taken a lot longer.

“That is one of the reasons when the code first came out we said the timeframe is just too short, there will be all these holdups. Lining up money, lining up resource consent, getting equipment from overseas – some equipment comes in from Europe.

If people get those timings wrong, there may well be an issue [of supply] there.”

An egg shortage is “probably not going to happen but could happen”.

Meanwhile demand for eggs is growing.

It is seen as a healthy option and scientists seem to have agreed there’s not the issue with cholesterol that people thought about 10-15 years ago.

He says it is a tough timeframe for conversion and a difficult one. But there is an increasing demand for eggs, with an average of about 226 eggs per person per year, and a small but growing export industry.

“So the future is looking bright for the egg industry at the moment.”

RURAL NEWS // OCTOBER 6, 2015

NEWS 23

Hopes for better rural health services PAM TIPA pamelat@ruralnews.co.nz

NZLOCUMS, A recruitment division of the NZ Rural General Practice Network, has placed its first nurse practitioner in a permanent role in a New Zealand rural general practice.

Network chairwoman and Temuka nurse practitioner Sharon Hansen hopes for more such appointments, saying these nurse practitioners in rural areas are “absolutely” positive for the community.

Nurse practitioners have master’s degrees and must go through an extensive assessment by the Nursing Council. They can do a wider range of duties than other nurses, including some diagnosis and prescribing of medicines.

Under the NZLocums appointment, nurse practitioner Rachael Pretorius began work at Martinborough Health Services in southern Wairarapa in August. She holds a Masters of Nursing and qualified as a nurse practitioner primary care with prescribing in 2014.

Pretorius says she loves working in the rural setting which is a world away from the fastpaced Auckland practice where she was previously employed and offers a completely different sort of medicine.

Hansen told Rural News that nurse practitioners have been around for 30-40 years in the US but the first nurse practitioner in NZ was registered in 2001 and not many have been appointed here. It is an onerous process

Sharon Hansen, NZ Rural General Practice Network chairwoman.

to become registered, she says. As at March 31 this year 145 nursing practitioners were registered by the Nursing Council. Not all are in primary care; some, for instance, go into specialist position in hospitals.

NZLocums has a government contract to fill rural locum positions and for several years has been able to place a nurse practitioner in a long term position, Hansen says.

“It has been incredibly difficult. Number one,

we haven’t had the nurse practitioners to place, and number two, the sector has been relatively naïve about the benefits of having nurse practitioners, but now we are coming of age.

“We now have practices that know what nurse practitioners can offer and we have a nurse practitioner who was willing to move into the rural sector, so it is a red letter day.”

The Government announced recently an extra $846,000 to train 20 more nursing practitioners in 2016 including

more support in mentoring and placement. The extra money also “makes a clear statement to the sector that the Government is serious about this scope of practice and sees it as a solution to the problem of providing health care in rural areas,” says Hansen.

She hopes some of those trained will be attracted to the rural sector which could probably take all the nurse practitioners it could get.

The Rural General Practice Network’s role is in supporting people to find placements in the rural

sector.

“With nursing practitioners the community gets a higher level of nursing care than before. They get a nurse who works with them with their concerns in mind and who can diagnose and prescribe.”

Having a nursing practitioner in a practice can enable a GP to specialise and take their medical care to a different level. “They are not so bogged down; they don’t have to do absolutely everything in the practice anymore if they are working with nurse

practitioners.

“That’s a huge advantage. There’s a real sharing of providing care.

From a nurses’ point of view it enables us to work more autonomously and see through some of the issues we might be dealing with for the patients.”

Nurses in general in rural areas are often “embedded” in the community and can be the “glue” in a practice which may have had trouble attracting a permanent GP and seen locum doctors come and go. @rural_news facebook.com/ruralnews

GROWING FARMERS SINCE 1919

Taratahi is New Zealand’s largest provider of agricultural training

practitioner works, Hansen says she can work with a patient diagnosed with a cancer. “I can work with them as they go through that process of diagnosis, refer them on for treatment and when they come back into the practice I can work with them to determine what level of care they need. I can prescribe the medication they need for their journey.

“That doesn’t mean I would prescribe chemotherapy but I can prescribe the pain relief and adjunctive therapy they might need, for example if they’ve got a blood pressure issue alongside it. I can work with the family and help support them through the process as well. That is everyday work for us.

“Nurses like making a difference and that’s why we are in it. We like walking beside people and supporting them in ways they might need supporting. It is about developing relationships with people in their communities and the rural sector offers that in a unique way.”

AIR

Y

Taratahi offers NZQA approved qualifications that provide hands-on introductory skills through to management level programmes.

Industry Recognition: Primary ITO Industry Trainer of the Year (Beef + Lamb NZ Sheep Industry Awards) 2014 Education Institute for Excellence in Beef Industry Training (Hoof & Hook Competition) 2014 Farmer feedback indicates that graduates are valued for their skills and safe work practices.

ENQUIRE NOW! 0800 TARATAHI

www.taratahi.ac.nz I info@taratahi.ac.nz

86549-08-15

THE EMERGENCE of nurse practitioners has taken some people by surprise, says Hansen, chairwoman of the NZ Rural General Practice Network and a nursing practitioner herself.

“People in the community and medical practitioner specialists weren’t sure what to make of it initially but I think we are coming of age with that and people are understanding how these professions work together.

“Those who have experienced working with nurse practitioners don’t want to step back in time.

“When I first started it was quite difficult. People didn’t think I could do what I do. Now there are other doctors in the area who don’t have nurse practitioners working with them who want them.

“So they are saying if there are others coming into the area we will employ them, so that has been a huge change. The first 10 years have been ground breaking for all of us.”

As an example of how a nurse

D

IDEA GAINS TRACTION

RURAL NEWS // OCTOBER 6, 2015

24 MARKETS & TRENDS MARKET SNAPSHOT 



     

          

          

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 

          

          









BEEF MARKET TRENDS

NI NI

P2 Steer - 300kg

M2 Bull - 300kg c/kgCWT

M Cow M2 Bull - 200kg 300kg Local P2Trade Cow - 230kg



Slaughter



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



 











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



 



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

 

 

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   



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 







  





 

 





 

3.35 4.75 5.00 3.40

4.00

5.90

3.35

5.90

5.00

                     

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 

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      





  

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  

  



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          







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

 

 



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

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

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 

   

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 



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

Mutton

MX1 PX - 21kg - 19.0kg

SI Lamb

Mutton



 



    

 

     

Last Year

6.10 6.06 6.11 6.08

6.00 5.96 6.01 5.98

6.40 6.36 6.41 6.38

6.06 Last 6.08 Week

2 5.96 Wks 5.98 Ago

6.36 Last 6.38 Year

3.30 6.10 5.83 6.11

3.30 6.00 5.68 6.01

3.65 6.40 5.99 6.41

n/c +15

5.83 2.88 5.83

5.68 2.88 5.68

6.04 6.01 3.20 6.03

n/c

2.88

2.88

3.20

5.83 3.30 5.83

5.83

5.68 3.30 5.68

6.01 3.65 6.03 5.99

5.68

6.04

       









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



 











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

   





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



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

 

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

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Export Market Demand

Export Market Demand

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Export Market DemandWeek



Last

Change







2 Wks Ago

Change

Last Week

NZ$/kg

-9 Change -25

2.47 Last8.61 Week

95CL US$/lb



Export Market Demand 95CL US$/lb

 NZ$/kg

-9

2.47

-25

2 2.56 Wks 8.86 Ago

5yr Ave

3.17 Last Year 8.82

2.15 5yr Ave 5.99

3.17

2.15

2.56

8.61

UK Leg £/lb

Last Year

8.86

8.82

5.99

 

 











  



  Procurement Indicator Change

2Wks Ago

% Returned NI % Returned SI

+2% Change +2%

66.2% 2Wks Ago 59.2%

% Returned NI

+2%

% Returned SI       

66.2%





3 Wks Ago

64.3% 3 Wks 57.6% Ago 64.3%

+2% 

59.2%

57.6%



Last Year

5yr Ave

61.26% Last Year 53.3%

74.7% 5yr Ave 68.6%

61.26%

74.7%



53.3%

68.6%

 



        

NZ$/kg

UK Leg £/lb





    



  







           & venison prices are reported as gross (before normal levies & charges are deducted). Lamb & mutton prices are reported nett (after levies & charges are deducted).

Beef 

FARMER TRAVEL 2016

8.55

8.55

2.16

8.01

1.94

8.46

 





  

   Procurement Indicator











Procurement

2Wks Change Indicator Ago

% Returned SI

+2% Change +1%

% Returned NI

+2%

% Returned NI

71.3% 2Wks 66.7% Ago 71.3%

3 Wks Ago

369.6% Wks 65.5% Ago 69.6%



Last Year 5yr Ave 79.9% 75.3% Last Year 5yr Ave 76.5% 69.1% 79.9%

 +1%

% Returned SI

       

       

66.7%

65.5%

76.5%

75.3% 69.1%

  







  





    



  









  













Venison Prices 

2.16 1.94 Last Year 5yr Ave 8.01 8.46



Change



1.55

Last Year 5yr Ave

  

 

 

2 1.55 Wks 8.55 Ago

1.55

n/c







1.55 Last 8.55 Week



 

n/c

2 Wks Ago

NZ$/kg

 





n/c Change n/c

   



 



2 Wks Ago

+15

PH - 22.0kg

MX1 - 21kg

   



Last Week

+15 +15

- 19.0kg YM -PX 13.5kg PH - 22.0kg PM 16.0kg

 Slaughter





MX1 PX - 21kg - 19.0kg

Slaughter





 

Mutton

n/c +10 +15 +10 +15 n/c





+10 +10

- 19.0kg YM - PX 13.5kg PH - 22.0kg PM 16.0kg YM -PH 13.5kg - 22.0kg - 16.0kg MX1PM - 21kg

 

Procurement Indicator

      

Mutton

SI Lamb

 

  

NI Lamb

+10 PM - 16.0kg Change +10

YM - 13.5kg

c/kgCWT





 

NI Lamb





Change

c/kgCWT LAMB PRICES





  





4.00

n/c

4.75 5.45 3.40 5.05

4.00 5.10 5.90 4.10



 







          

5.10 6.10 4.10 5.90

4.00 5.10 5.90 4.10

n/c

5.45 4.35 5.05 4.35



 Slaughter

   

M Cow - 200kg

Local Trade - 230kg

4.35 5.45 4.35 5.45

6.10 4.55 5.90 4.55

5.10 6.10 4.10 5.90

n/c n/c

5.45 Last 5.45 Year

4.55 6.10 4.55 5.70

6.10 4.55 5.90 4.55

n/c n/c

Last Year

2 6.10 Wks 5.70 Ago

4.55 6.10 4.55 5.70

n/c n/c

Bull - 300kg LocalM2 Trade 230kg Cow - 230kg P2 P2 Steer - 300kg

SI

2 Wks Ago

6.10 Last 5.70 Week

n/c n/c

Local P2Trade Cow - 230kg P2 Steer - 300kg M Cow - 200kg

  

n/c

Change n/c

Cow - 230kg P2 P2 Steer - 300kg M Cow 200kg M2 Bull - 300kg

SI

Last Week

Change

c/kgCWT BEEF PRICES

LAMB MARKET TRENDS

LAMB PRICES

BEEF PRICES

Venison Prices NI Stag - 60kg SI Stag - 60kg

+5 Change +10

NI Stag - 60kg SI Stag - 60kg

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

Join our escorted tours designed especially for country people

+5

+10

Last Week 8.45 Last 8.75 Week 8.45

8.75

2 Wks Ago 2 8.40 Wks 8.65 Ago 8.40

8.65



Last Year 5yr Ave 7.25 7.75 Last Year 5yr Ave 7.65 8.11 7.25

7.65

7.75

8.11

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RURAL NEWS // OCTOBER 6, 2015

MARKETS & TRENDS 25 NEWS BEEF:. Both islands are experiencing a period of stability in beef slaughter prices at present. However this may be shortlived as US imported beef prices decline sharply.

Reports suggest that processing margins for bull are being compromised despite the weaker NZD, and processors will be looking to pass further market declines onto farmers. One company has already signalled this intent through printed schedules.

Procurement competition will be the opposing force here as the cow kill drops off sharply around NZ, and killable cattle supply declines. With many companies typically operating at full capacity by the end of October the pressure to keep these plants full may override market forces. .

SHEEP: Lamb operating prices in both islands are enjoying a period of sharp upwards momentum at present. This trend is expected to continue through to mid November when the last boat for Christmas trade leaves. Lamb supply for this trade is a concern for processors. In the South Island the country that has typically produced lambs for this trade is now in dairy and in the North Island new seasons lambs are 2-3 weeks behind in growth due to cold and wet conditions. There are some

PRICE WATCH competitive contracts available for this trade, and competition for supply is expected to keep spot prices equal to or above these contracts. Once the Christmas trade supply is over around mid November, prices are expected to fall rapidly as normal market trading resumes. Schedules are picked to drop to the early $5/kg range by Christmas, which is a much sharper drop than typical over this period.

VENISON: Deer farmers are enjoying a lucrative season as schedules reach highs not seen for several years.

Returns are predominately underpinned by the weaker NZD, but supported by firm demand and prices from the EU market over the traditional chilled supply season. Schedules are sitting over $1/kg above last year, and still well above 5yr average levels. Based on historical trends there is still likely to be some upside to prices as the peak is typically seen around mid October. From here prices historically hold for several weeks, until the window for getting chilled product into the EU market closes around the second week of November. There has been some optimism in the industry that recent marketing efforts in alternative markets may hold the price up for a longer period, as

Overseas Wool Price Indicators

WOOL PRICE WATCH Indicators in NZ$

Change

24-Sep

Last Year

17-Sep

Coarse Xbred

+9

6.09

6.00

5.40

Fine Xbred

+28

6.96

6.68

5.72

Lamb

-

-

-

-

Mid Micron

-

10.51

-

7.41

        

 



Change

Coarse Xbred Fine Xbred Lamb

24-Sep

Last Year

17-Sep

+1

3.83

3.82

4.41

+12

4.38

4.26

4.67

Mid Micron

-

-

-

-

-

6.61

-

6.05







    









 

























Indicators in US$/kg

 





  



  

 

 











currently the peak pricing is dictated by the length of the chilled season in the EU. However it may be too early this year for these marketing efforts to be reaping rewards.

Deer slaughter has continued its decline through 2014/15, with the national kill down 8% to end July 2015.













With hinds making up an increasing proportion of this kill at 55%, there is little sign of herd rebuilding. It could be that this years high returns, combined with another change in land use patterns following the dairy downturn, may see more hinds retained on farm.



RURAL NEWS // OCTOBER 6, 2015

26 AGRIBUSINESS

NZ infant formula making a comeback in China shows NZ infant formula is making a comeback in China after Fonterra’s false botulism scare two years ago. It also proves infant formula made in NZ still resonates well with Chinese consumers, he says.

Ming was in Auckland recently to attend a Cowala charity event: for every can of Cowala sold in China, Evergrande is donating 10c to the Foundation of Youth Develop-

SUDESH KISSUN sudeshk@ruralnews.co.nz

A CHINESE corporation has made $73 million sales within 12 months of launching its New Zealand infant formula.

Evergrande Dairy has sold two million cans of Cowala branded infant formula in China; it aims to double sales this year.

Evergrande Dairy Group general manager Yu Wei Ming says this

ment in NZ. Evergrande hopes to make Cowala a top infant formula brand in China.

Ming says the 100% NZ product is the main reason for Cowala’s early success.

NZ infant formula’s reputation in China took a hit after Fonterra’s false botulism scare in 2013.

This allowed infant formula makers in Europe to steal our market share.

Ming says competi-

tion remains strong but the NZ brand is making a comeback.

“After the crisis, NZ branded infant formula sales dropped a little,” he told Rural News. “But each year we have millions of new babies and new mothers and there is new awareness about NZ infant formula.

“We are gradually seeing NZ products getting back and in the next two-three years NZ prod-

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Evergrande Dairy general manager Yu Wei Ming and GMP Dairy’s deputy general manager Ravi Kumaran.

ucts will get back on the right track.”

Evergrande markets its Cowala infant formula as 100% from NZ and the best in the world.

He notes that Cowala’s first year sales form a small proportion of the total infant formula sales in China.

“We are focussing on lifting sales and targeting to double sales this year; tripling sales will be even better.”

Evergrande Dairy owns 51% of GMP Dairy, a South Auckland infant formula maker among the first to get new accreditation

from Chinese authorities.

GMP Dairy managing director Karl Ye says the company has received great support in NZ over the last 14 years. “It’s now time to pay back to the community for the support,” he says.

The ‘Cowala 10c of Love’ charity was launched to coincide with the mid-autumn moon festival in China.

Evergrande and GMP were a big sponsor of a charity auction night for children with autism, held in June by Young Business Women in NZ. Evergrande Dairy is

part of the Evergrande Group, which started in real estate and has since diversified into other businesses including fast moving consumer goods.

Cowala infant formula’s claimed point of difference is its world-first patented traceability via the cans: this allows consumers to use their smartphone to scan a barcode telling them the milk powder’s history and shows an x-ray picture of the contents.

Shipping information on each can helps streamline access at the Chinese border.

AUSSIE FARMERS BACK CHINA TRADE DEAL AS AUSTRALIAN politicians haggle over endorsing a free trade agreement with China, farmers are warning that failure to ratify the deal will cost them up to A$18 billion over 10 years.

The National Farmers’ Federation (NFF) says it has done economic analysis of the FTA and is calling for bipartisan support for the China FTA as enabling legislation is tabled in the Australian parliament.

However the Opposition Labour Party, while backing the deal, wants changes to safeguard Australian jobs.

Labour fears temporary Chinese labour coming into Australia will jeopardise local jobs. The powerful Construction, Forestry, Mining and Energy Union (CFMEU) has campaigned against the FTA, warning it will be bad for Australian jobs.

But Prime Minister Malcolm Turnbull accused unions of “scaremongering” and challenged Labor to suggest a compromise on the FTA. Farmers believe the deal is a good one. NFF president Brent Finlay says the China FTA is an unambiguously

good deal for Australians and any delay to the enabling legislation would hurt the economy.

“This agreement is a game-changer: it’s a golden ticket to the world’s second largest marketplace -- 1.3 billion consumers eager for Australian products and services,” Finlay says.

“It’s an opportunity to supercharge the Australian economy at a time when access to larger markets is desperately needed, particularly for our agriculture sector. “[Close] to a wealthier, choosier and hungrier Asian population, the opportunities for Australia’s quality produce are endless. The need to ratify this agreement is now more important than ever.”

The China FTA will remove 85% of the taxes and duties imposed on Australian goods this year, rising to 93% after four years and 95% when fully implemented.

“As the legislation is introduced into parliament today, we urge all sides of politics to restore confidence and rationality to the debate by offering bipartisan support for the agreement.”

RURAL NEWS // OCTOBER 6, 2015

AGRIBUSINESS 27

Getting connected in rural communities PENNY HARTILL

IT’S NO secret that the quality and availability of internet connectivity in rural communities varies greatly, from patchy in some areas to non-existent in others, with a few able to get speeds that rival those of their urban cousins.

The good news for those with below par connections is that things are on the rapid improve.

This is due to two things: first, in 2015 the Government committed $150 million more to expand the rural broadband initiative (RBI), and to improve mobile coverage in black spot areas. This adds to the first $300 million RBI spend. Second, there is increasing competition between internet service providers (ISPs).

Given the many differences between packages and providers on offer, finding out which of them is right for you can be a minefield. The key is to find out which ISPs offer a product suited to your geographic location. A good place to start is the Chorus broadband capability map https://www. chorus.co.nz/maps While the big guns – Spark and Vodafone -- cater to rural communities, it isn’t their core business. You could consider dedicated rural internet provider Wireless Nation, or others. To see who offers what and where: http://www. therural.co.nz/countryliving/rural-broadband-

options-in-new-zealand Check ISPs’ installation prices before signing up as they can range from $99 to $599 depending on type of service, where you are and the proposed contract length. Ask about self-install options; many of the newer offerings throw this in, either gratis or at negligible cost, as part of the deal.

As part of the RBI, the Government contracted telco giant Chorus to bring broadband of at least 5Mbit/s to 86% of rural customers by 2016.

Chorus says that by the end of 2015 it will have: laid 3350km of fibre installed or upgraded 1000 new broadband cabinets enabled 40,000 lines in rural areas to access broadband services with no previous access connected 1000 rural schools to fibre connected 154 new Vodafone cell sites to fibre given fibre access to 50 hospitals and integrated family health centres and 183 rural libraries.

If you live within 6km of one of the 138 cell sites already erected you’re in luck: fast, 4G connectivity is yours for the taking from most internet providers. Do your homework though; monthly prices are variable and there could be install costs.

If the cost of getting fibre to your farm is prohibitive, or you’re too far from a connection service, then satellite is good option. It’s fast, reliable and reasonably cost effec-

tive. Wireless Nation uses the Optus satellite network which isn’t prone to rain fade and has a high look angle with strong signal strength over NZ. TrueNet, an independent agency measuring broadband performance, says the RBI is having an immense impact, halving download times for

The quality and variety of internet connectivity in rural communities varies greatly.

upgraded connections.

ISPs report data usage has almost doubled in the last six months over our rural network as the latest technology becomes more accessible. Some farms are using real-time digital applications that improve productivity and help keep a lid on costs.

The internet is a critical

tool for rural businesses, helping them reach their customers quickly and providing access to local and global stock and land information.

• Wireless Nation is a New Zealand internet service provider. www. wirelessnation.co.nz @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 6, 2015

28 AGRIBUSINESS

Family trusts: What happens when the relationship splits?

Is your business or its assets owned by your family trust? If so, complications could arise should your marriage or de facto relationship fail. Mark Sandelin, a partner at the national law firm Minter Ellison Rudd Watts, discusses your options.

IT IS common for familyowned businesses to have an ownership structure which includes a family trust. If so, the legal owners of the assets of your business will be the trustees.

In New Zealand the typical family trust often consists of three trustees – you, your spouse/partner and a third person such as another family member or a long-standing profes-

sional advisor. All parties must understand the complications of this ownership structure in the event of a relationship failure.

The most important consequence is that the assets of your trust may not be classed as relationship property and may not be covered by the usual equal sharing rule at the end of a relationship.

If you are a trustee, you and your fellow trustees will remain collectively responsible and must continue to manage the trust assets together irrespective of any change to your domestic circumstances.

Given this state of affairs, businesses commonly ‘stall’ or close when the trustees’ decisionmaking on key matters is paralysed.

The existence of a third ‘impartial’ trustee is often no answer because one spouse/partner may accuse that trustee of being conflicted and/or siding with the other trustee.

How will your assets be divided and who will control them post-breakup?

There are various avenues for dealing with your family trust following the end of your relationship.

For instance, you could attempt to negotiate a change to the management structure of the trust to everyone’s benefit, or alternatively, when all else fails you may be able to apply to the courts to employ ‘trust busting’ mechanisms.

Option 1: Amicable agreement between the trustees. Obviously, this is best, but not always possible because of the terms of the trust deed or relationship dynamics. It involves sitting down with fellow trustees and working out a process for re-settling the assets of the trust or for re-organising the trust’s management structure.

The more thought that goes into the setting up of a trust the more likely it is that the trustees will be in a position to reach an amicable solution in its unravelling.

Option 2: Ask the courts to help. The courts are the ultimate backstop when things go wrong. In certain circumstances they

Mark Sandeline

make orders in respect of a family trust, including varying its terms, resettling it or vesting trust capital on one or more of the parties involved. And when trustees are at an impasse due to hostility, or when there are accusations concerning the misappropriation of trust assets or trustees not acting in the best interests of the beneficiaries, then a disaffected party can also apply to the court to appoint, remove and/or substitute trustees.

The courts will also be able to intervene when it can be shown that one party placed assets in a trust to defeat the interests of their spouse/partner. It is necessary to show that the party making the transfer knew the transfer would have this effect.

Alternatively, the courts may order that one spouse/ partner pay the other compensation in circumstances where a nondevious disposition of relationship property to a trust after the marriage/ relationship began has the effect of depriving one spouse/partner of relationship property rights.

Whether any of these options are available to you will depend on your individual circumstances and the nature of your family trust.

About Minter Ellison Rudd Watts Minters is a law firm with experience at the farm gate and in the commercial world.

The team can help you to negotiate contracts, comply with regulations, scale your operation or divest your assets – and everything in between. Whatever your operation, your goals or situation, talk to them for practical pragmatic legal advice. www.minterellison. co.nz Tel: 0800 862 774

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RURAL NEWS // OCTOBER 6, 2015

30 OPINION EDITORIAL

EDNA

Communication breakdown ANOTHER DAY, another PR gaffe by Fonterra The latest in a long and seemingly never-ending line of PR gaffes by the dairy giant comes this time over the annual salary of chief executive Theo Spierings.

It reminds Rural News of the classic film Cool Hand Luke, when the tough prison warden tells off the stubborn prisoner Luke with the classic line: “What we’ve got here is failure to communicate!”

The Spierings’ salary announcement, coinciding with the co-op’s job cuts and with its recent directive on the use of PKE by farmers, has again shown Fonterra ‘failing to communicate’.

At a time Fonterra is currently cutting hundreds of jobs and farmers are struggling, it reports the chief executive is getting an 18% pay rise. This bumps up Spierings’ salary to almost $5 million in the last financial year – from a paltry $4.17m the previous year.

To make matters worse, reports also show the number of employees earning $1m annually rose from 17 to 22 during the same period.

Fonterra tries to defend the move by explaining that the latest figure accounted for Spierings’ salary package as well as performance incentives earned in the previous year (when the record $8.40 payout was made to suppliers). It also says his salary was based on international benchmarking.

All true, but very dumb communications, especially as many of the co-op’s farmers will suffer huge losses this year and hundreds of staff are getting their marching orders.

It beggars belief that Fonterra’s board, management and others did not see this as major issue and a very, very, bad look.

Why they didn’t defer the payments or put them on ice until farmer returns improved and the latest restructuring was well out of the way shows what tin ears are pinned to the noggins of the gold-plated directors, managers and ‘communicators’ at Fonterra.

Out of touch? Wait till you hear this! We now know that Spierings asked the board to freeze his salary due to the looming job cuts and the tough time farmers are going through.

Why did it take an internal leak from inside the organisation to get this information made public? All news media, staff and farmers should have heard this before all the lame and meaningless “international benchmarking” and “previous year performance incentive” lines were used.

Fonterra may be NZ’s biggest company, but its communication – or more correctly lack of it – makes it also the country’s biggest joke. It is time Fonterra seriously upped its game!

RURAL NEWS HEAD OFFICE POSTAL ADDRESS: PO Box 331100, Takapuna, Auckland 0740 PUBLISHER: Brian Hight .............................................. Ph 09 307 0399

“WOW!” – Imagine the price we’d get if they held back the lot!”

THE HOUND

Want to share your opinion or gossip with the Hound?

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

Yellow peril!

Dairy confidence

3 Rs

Bludgers

YOUR OLD mate reckons former Meat Industry Excellence Group head John McCarthy has clearly taken political and tolerance lessons from none other than Winston Peters. In a desperate and failed attempt -- he must be getting use to failure -- to prevent the Shanghai Maling Investment stake in Silver Fern Farms, McCarthy issued a Petersesquestyle media release that went on for about three years and was headed: ‘Will our killing sheets be in Mandarin?’. This old mutt suggests that if McCarthy had spent more of his time eloquently arguing MIE’s cause rather than hectoring and lecturing all and sundry, his proposal may have gained more credibility instead of wasting $200k red meat levy payer funds, 18 months of haranguing farmers and miles of newspaper column inches .

THEY SAY the best sign of confidence in the sector is when people are buying farms, especially in a downturn. According to an informer of your canine crusader, Fonterra chairman ‘Little’ Johnny Wilson is so confident about the future of dairying he is buying the next door neighbour’s place.

The Hound’s source claims his info is “accurate and reliable”.

He also claims “that some dairy farmers may be a little bemused that John Wilson is about to buy his neighbour’s farm when many farmers are tightening their belts and borrowing money to stay afloat”. Meanwhile, obviously the Hound’s confidant seems to have issues with Wilson making a farm purchase, but your old mate reckons it’s a case of the Fonterra chair putting his money where his mouth is and investing in the future of the dairy industry.

THE HOUND has always thought that the practice of individual councils around the country making up silly rules all the time makes local government about as useful as an ashtray on a motorbike. The latest example is the Hastings District Council, which recently pontificated that the Hawkes Bay is now a GM-free region. The council has declared its district the first official genetically modified free food producing zone in New Zealand with its district plan rules now prohibiting both the release and field trial of genetically modified crops and animals. All well and good, but your old mate would like to know just how the tree huggers from Hastings are going to prevent GM trials or livestock in neighbouring districts such as Napier, Central Hawkes Bay or Wairoa. What a waste of time and effort.

YOUR OLD mate was intrigued by the yawning absence of some key political opponents of foreign investment in the ag sector when both the SFF/ Shanghai Maling and Lochinver no-sale deals were announced last month. The Hound could not work out why the likes of Winston Peters, Stuart Nash and Damien O’Connor – who are always quick to whine about foreign takeovers etc – were completely missing in action. In fact, NZ First’s criticism of the deal was led by a firstterm nobody who gained no traction, while Labour left it up to its ineffectual leader Andrew Little to make... well... ineffectual comments. It turns out the hardworking and dedicated Peters, Nash and O’Connor were off on a junket to the UK as part of the parliamentary rugby team just in time for the real RWC. What a joke!

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

RURAL NEWS // OCTOBER 6, 2015

OPINION 31

Keep eye on dairy prize MALCOLM BAILEY

AS NEGOTIATORS prepare for the next TPP ministerial meeting, I urge them to stay focused on delivering a deal that stacks up for New Zealand.

The negotiation is finally down to three big issues, amongst them dairy which alone accounts for 25-33% of NZ’s exports earnings.

Twenty years after the Uruguay Round of WTO negotiations, global dairy trade remains highly restricted, meaning a thin market prone to price volatility. NZ dairy farm-

ers, and our economy as a whole, have felt the pain of that over the last year.

Dairy volatility has meant $7 billion less revenue for NZ in the last year. For a small export economy that is a significant impact.

The NZ dairy industry is looking to this deal to help ease price volatility in the global market. That would be good for farmers, good for businesses that supply goods and services to the dairy industry, good for regional NZ, and would make TPP a much better deal for NZ as a whole.

Trade liberalisation for agriculture is not only a

ag twits

NZ policy platform. It is clearly recognised in the draft 2030 Agenda for Sustainable Development, which the UN general assembly is expected to adopt in the coming days.

The draft implementation commitment for goal two of this agenda specifically refers to correcting and

preventing trade restrictions and to ensuring the proper functioning of food commodity markets in order to help limit extreme food price volatility.

The nations involved in the TPP negotiations have the opportunity to make an early and substantial downpayment on achiev-

ing these goals for dairy.

But doing so will require a major lift in ambition from what was on the table in Maui.

Japan’s offer in Maui was reported to be 70,000 milk equivalent tonnes; this equates to 7000 actual product tonnes or an effective 2% market open-

ing. This level of access offer cannot be considered to match the intent for trade liberalisation that Japan continues to sign in international declarations such as the 2030 Agenda for Sustainable Development. Nor does the ambition shown by the US and Canada.

It is time for action and commitment that matches intent. The political will must be mustered for a good TPP outcome for dairy. A successful deal will make the entire region more prosperous.

• Malcolm Bailey is the chairman of Dairy Companies Association of NZ.

More power.

Less expense.

Rural News’ irreverent and hypothetical look at what’s happening in the farming world Top Bleats view all @robhewettSFF : I’m not a racist but in future all SFF shareholders should address me as Your Excellency Mr Party Secretary and Co-President of SFF/Shanghai Maling. Ni how! #nomorechinesewhispers @shenweiping @robhewettSFF : I’m not a lacist, but honoulable Lob Hewett you will make no further comment until I say you can.

Understand Cookie Boy? #takeoveralmostcomplete @littleandrewlabour: I’m not a racist, but Shanghai Maling is not as Chinese-sounding to me as Shanghai Pengxin therefore I am comfortable with the former taking over SFF and uncomfortable with the latter buying Lochinver Farm. #workthatout winstonfirstandlast: I’m not a racist, but am I the only one on this parliamentary Rugby World Cup junket concerned about the takeover of a NZ meat co-op by the Chinese? I am so distraught I can hardly enjoy watching the games and drinking all the free booze, but I soldier on. #toughlife

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@johnmcarthyformermie: I’m not a racist, but if the SFF/Shanghai Maling deal goes ahead all the company’s killing sheets will be in Mandarin and just how will Kiwi farmers know the Chows are ripping them off? #yesiamthatdesperate @mtaggartalliance: I’m not a racist, but isn’t it good to see an Alliance win over SFF for once? I just kicked Keith Cooper’s arse in the recent Ballance director elections. #suckonthatsff @jparsonsbeef+lambnz: I’m not a racist, but wasn’t it fantastic to see the thumping mandate our levy referendum was given by the 30% or so of farmers who could be arsed voting . Results like this make the Chinese political system look positively democratic! #sixmoreyears

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@jwilsonfonterra@ littleandrewlabour: I’m not a racist, but Andrew thank you and the Labour Party for declaring a dairy crisis a few months back. Since then, the GDT has leapt 48%; please keep this current crisis going. #rollercoasterprices @theospieringsfonterra: I’m not a racist, but I’ve got some double Dutch news on the dairy front. The bad news is the payout for this year is terrible and next year is not much better. Also I’m laying off 750 more staff. The good news is I get a pay rise to $5 million a year and we’re about to move into our new fancy waterfront HQ in Auckland. #badforyougreatforme #tinear

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RURAL NEWS // OCTOBER 6, 2015

32 OPINION

Handouts for hairy little Hobbits, what about for water?

HERE’S A question for the big brains out there.

You and I have forked out $191 million, via tax rebates, for Sir Peter Jackson to make hobbit

movies. Up to March 2014, the taxpayer had given the film industry $258 million in direct grants and subsidies.

At the time, Minister of

Economic Development Steven Joyce said the money would create 3000 new jobs and bring other significant direct economic benefits.

Subsidies are generally a bad idea.

We country folk know it well. Bankrolling the film industry works until someone else raises the

Order Corson maize seed this season.

revenue and jobs long after Sir Peter Jackson and co have moved elsewhere.

Minister Joyce says he may lend the dam project $80 million, but he wants commercial interest rates and the money repaid in threefive years. Jackson and co don’t have to repay a ante and the industry cent. decamps en masse to So here’s the Albania, Arkansas or question: if Mr Joyce Alaska, thinks it is clever California has to give $258 reintroduced million to an massive payments Economists assessing industry that is to film makers risky, transitory, to counter the the project say barely profitable move away from that the fully and can operate Hollywood to anywhere in the places like – you operational scheme world, would it guessed it – New will create 2500 jobs not be just as Zealand! in Hawkes Bay and clever – some Meanwhile, in might say even Central Hawkes add 1.5 % to GDP cleverer – to give Bay we are trying on a permanent $286 million to to build a dam to a sector that is a irrigate thousands basis. This will stable, profitable of hectares of generate another and a permanent farmland. $150 million in tax resident?

Local MP The water will Alistair Scott says revenue per annum. be benefiting the the construction nation long after of the dam alone Bilbo Baggins has, will increase thankfully, been eaten by movie cameras and film employment in Hawkes Orcs. stars. No one has yet Bay by 3.5% and increase • Tim Gilbertson farms in worked out how to load GDP by 4 %. The tax Central Hawkes Bay. He a lump of concrete and take on the increased is a former chairman of a lake – weighing several GDP alone will be $150 Waipukurau Fed Farmers million tonnes – into the million, according to the and was mayor of CHB for hold of an aircraft and man I talked to recently six years before a stint on take it offshore. So the at Statistics NZ. the HB Regional Council. dam will keep producing Economists assessing the project say that the fully operational scheme will create 2500 jobs in Hawkes Bay and add 1.5 % to GDP on a permanent basis .This will generate another $150 million in tax revenue per annum.

So the dam – costing $280 million – will return $300 million to the Government pretty well straight away.

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RURAL NEWS // OCTOBER 6, 2015

OPINION 33

A win for bringing overseas workers IT HAS been a tough year so far for rural contractors with the pressure on the dairy sector, while many areas – such as Southland and the West Coast – are too wet to do anything.

However, there are a couple of bright spots on the horizon. At the time of writing, we have seen the last three dairy auctions all increase – meaning dairy prices have jumped 48% since April. It is good to be talking about positive increases in dairy prices – albeit small – for once.

Speaking of positive news, for some time now Rural Contractors NZ (RCNZ) has been working with Immigration New Zealand to see how we can resolve the problem of bringing in overseas workers for the harvest season.

After much input, many meetings and a lot of hard work by RCNZ – together with Immigration NZ – we have come up with a solution, which we believe will solve many of the problems that rural contractors currently experience every year and make it much easier to bring in overseas workers.

The deal agreed between Immigration NZ and RCNZ will work like this: ■■ Rural Contractors New Zealand will apply for an approval in principle (AIP) on behalf of all members of RCNZ. ■■ Contractors will then be able to apply online for a visa for the person being recruited, without having to advertise, go to WINZ and all the other requirements currently causing so much work.

■■ Contractors will need to obtain from RCNZ a letter of support to enable the application to proceed.

■■ Once in NZ, the holder of the visa will be able to move freely between RCNZ member companies – as work, weather, etc dictate.

■■ All processing will probably be done by one or two people in the Wellington office of Immigration NZ, to simplify and standardise the procedures.

As RCNZ will hold the AIP, there are a number of responsibilities placed on us and it will be important that all those contrac-

tors who wish to use this scheme comply with all conditions and requirements of it.

For starters, there will need to be a written contract between RCNZ and each member company participating in the scheme, to ensure each knows their responsibilities and that RCNZ and

other member companies are protected. If these conditions are not complied with, the AIP can be rescinded.

These conditions include that the AIP is only available to full, financial members of RCNZ. Also a contractor or company must hold current registered contractor accreditation with RCNZ. This is a safeguard to ensure that the appropriate statutory and regulatory compliances are being met.

Another condition is that RCNZ’s individual employment agreements must be used for each person coming from overseas. There will be minimum wage rates to be applied, these have yet to be determined and we will be seeking feedback from members about the appropriate levels of remuneration currently applied so a fair minimum can be set.

Those applying to the scheme will also have to fully comply with RCNZ’s Code of Ethics and the Code for Employing Overseas Staff. Contractors will also be required to advise when an overseas worker moves to another company and also the name of that company if known.

Should a worker go to a company that is not part of this scheme, they will be in breach of their visa.

Because of the work involved in setting up this scheme – and the imminent start of the new season – we have decided to start this in time for June 2016. The AIP will be for one year and if all goes well it will move out to three years.

The June 2016 start date will also allow for all the paperwork to be completed and legally checked and for RCNZ members to obtain registered contractor accreditation.

I have to stress that Immigration NZ will hold RCNZ accountable for this scheme and therefore we will ensure that

application for an overseas worker is as it should be. Therefore our letter of support – which will enable a contractor to use the AIP process – will not be issued until we are completely satisfied all is in order.

RCNZ will be obligated to advise Immigration NZ of any breach and if nec-

essary remove a member company from the AIP provision.

Despite all of this, I am confident that this new scheme will be of great benefit to all rural contractors who want to bring in overseas staff and it will bolster the status of RCNZ’s registered contractor accreditation.

It is also a drawcard and a good excuse to join RCNZ – as if you needed one – as the cost of membership is significantly less than the cost of advertising and the application process for bringing in international workers on your own behalf.

They say ‘good things

come to those who wait’ and that is definitely the case in this instance! It also shows the true value of belonging to an industry organisation like RCNZ. • Wellsford-based agricultural contractor Steve Levet is the president of the Rural Contractors New Zealand (RCNZ).

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RURAL NEWS // OCTOBER 6, 2015

34 MANAGEMENT

Spring growth key to pasture cover DEBBIE NORTON

EARLY SPRING growth is an important factor for key animal production systems and farmers can make big differences with forage choices, according to Agricom’s Allister Moorhead, product development specialist.

He told the forage company’s recent Marshdale field day that this period of growth coincides with two very important spring feed periods.

For a sheep breeding property, pasture cover often declines rapidly at set stocking and there is significant need for growth under increasing stock demand. For a dairy farm, this is near the second grazing round – which influences the date

a farmer may reach balance date (supply meeting demand).

Moorhead says this 30-45 day period of growth between mid-September and mid-October can be influenced by traditional ryegrass heading dates. However, this time frame is not always obvious. “Most data on spring growth presented to farmers are means of multiple measurements throughout late winter and spring, often masking the true effect of heading date when they may only influence a 30-40 day period,” he explains.

Moorhead highlights how forage choice can affect spring production and refers to Agricom’s Easton. Although this is considered a late flowering tall fescue, it is minus

14 Nui. “As an industry we’ve had mixed messages about spring pasture management. The first seed heads will be out at the start of October which means it been growing ‘like stink’ throughout September, forcing the early spring growth phase on you.”

He says these are very strong spring plants and in cooler environments, as they are putting feed at farmer’s feet when traditional rye grass does not.

Moorhead says that in many cases you do not need mid-heading perennials for early spring growth. Mid-heading grasses have reliable September/October growth and produce extra with the onset of seed head development, which drives the ‘spring flush’.

Agricom’s Allister Moorhead explains the importance of early spring growth to attendees at the recent Marshdale field day.

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to making sure they are capturing this as vegetative (the leafy growth that occurs without the influence of seed head initiation or stem development) and/or quality forage, it is not until farmers get that wrong that the seed head emerges and quality collapses.

Instead, many late heading perennials, which are particularly winter active, can be used to carry cover into August and early September.

Moorhead recommends that if farmers are using tall fescue or mid heading ryegrasses, it can be beneficial to have larger areas of later heading genetics to broaden the peak growth period, enabling better pasture management.

He suggests using late heading cultivars, which have a high total production such as Agricom’s One (+20) and Prospect (+12). However, he cautions against using all late genetics on

farm, suggesting doing so “makes spring pasture management very easy, but may mean in some environments that you do not get a flush of extra growth in September and early October”.

Moorheads says Savvy Cocksfoot is relatively late heading and has significant October growth.

While it is only considered average during September, by October its growth is ‘phenomenal.’

By early November it can be just under 400kg ahead of tall fescues.

Although the seed heads of late heading ryegrasses are often slower to emerge – due to being removed during the normal grazing round – the stem has still been created, he warns. This will lead to a post grazing barrier to animals and the residual will build up through November and December. He says this can be worse in unirrigated areas and by January and February this may

result in round lengths of 30 days or more.

Whatever a farmer decides, Moorhead suggests that the key to spring management is to start planning early. He recommends aiming for a quick return to grazing through September and October and to defer late heading ryegrass in early October, in favour of quick return on tall fescue or cocksfoot.

He believes it would also be beneficial to consider setting a percentage of tall fescue aside for late October/ early November silage. He adds that while late flowering ryegrasses are still highly attractive in farming systems, it is important to understand what is the most important ‘big money’ time for a farm.

While the actual potential of vegetative growth lies with the genetics of the cultivar, day length, temperature and nitrogen availability also have huge influence.

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RURAL NEWS // OCTOBER 6, 2015

36 MANAGEMENT

Plenty of thrills on this B

The taste of a single blueberry was enough to launch Harry and Anne Frost into developing a blueberry orchard near Rotorua. Forty years later they offer a range of products that stretch the imagination of most people. Peter Burke recently visited Mamaku Blue’s orchard, visitor centre and cafe.

THE MAMAKU Ranges rise 600m above sea level to the west of Rotorua, occasionally getting snow in winter and mist shrouding the tops.

It’s cold, perhaps not appealing to many but ideal for blueberries and gooseberries that thrive in such conditions.

It all started in the

1980’s on 40ha which Anne Frost describes as too big and too small: too small to farm and too big as a lifestyle block!

The blueberry development happened when diversification was a popular word in the Muldoon government, with people looking at kiwifruit in particular, which she says

was unsuitable for their location. Then someone said ‘try blueberries’ and they did, on the strength of that brief encounter buying $10,000 of blueberry plants.

“In the 1980’s $10,000 was a lot of money. We bought the plants from a nursery at Cambridge and then we wondered

‘how do you get that many plants back home?’

Because they were just a little too big to fit on the trailer,” Anne Frost told Rural News.

“So in the end, we hired a stock truck, and some people still remember the truck going

past with the blueberry plants sticking out the top waving in the wind.”

That $10,000 roughly equated to 1900 plants and was enough for the first 1.2ha. Today, the Frosts have 6ha in blueberries and another 0.8ha in goose-

new markets opening

budget at the time we actually halved the income expectations and doubled the expenditure and we were about right, but even this

Anne Frost samples some blueberry wine.

berries and the remainder of the land is used for drystock and native reserve.

Anne says in 1982 not a lot was known about blueberries so they linked up with 99 other growers and an exporting co-operative Kiwi Blue and until 2004 most of their crop was exported. The blueberries from Mamaku Blue graced tables all around the world – from Russia to Italy and many places between.

They were led to believe that even Queen Elizabeth in London had tasted their product.

The fruit was exported because blueberries were recognised as “the miracle berry” for health, with

worldwide.

However, Frost says with new varieties being developed in America and available worldwide, this niche market was no longer available to NZ and Mamaku Blue. She adds that in the 1980’s it was a different story in NZ: everybody was trying new export opportunities.

“When we first started there were 17 growers in the Rotorua region and we had our own discussion group. It was a sort of cottage industry and many people thought they were going to make a small fortune. Which was correct, it was a very small fortune!

“When we did our

Blueberry ice-creams are a favourite at the Mamaku Blue shop.

took eight years hard work to achieve,” she says.

Frost says the novelty and dream of a cottage industry died a natural death as costs and availability of staff to work in the orchards were realised. Today, Mamaku Blue is the only commercial blueberry grower in the district.

It was a combination of a high NZ dollar and the flood of blueberries from other northern hemisphere countries which ended the Frosts’ exporting venture. It simply wasn’t worth it anymore and so they started selling their blueberries for processing. The lower cost of machine harvesting

RURAL NEWS // OCTOBER 6, 2015

MANAGEMENT 37

s Blueberry hill There’s a Gaucho treated seed, and then there’s the rest!

A range of blueberry products are sold on site at Mamuka Blue.

other peoples’ products. Since then, we have developed recipes for jams and chutneys preserves and now we make 95% of all the products we sell,” Frost explains.

“Harry trained as a wine maker and over the years Mamaku Blue Blueberry Wine has achieved several gold, silver or bronze medals; our wine is now available online.”

She says blueberries are well known as ‘the miracle fruit’ with scientific research claiming it has reversed the onset of Alzheimer’s disease.

“We are also developing a growing range of health products, soaps and toiletries, chocolates and even Blueberry dog bones for canine pets.”

During the blueberry season, customers come to Mamaku

to buy berries, fresh or frozen. No Mamaku Blue berries are now sold in supermarkets and just a few products are sold in selected health shops. In a good season, Mamaku Blue will produce 30-40 tonnes of blueberries.

However, Frost says disease can be a problem and the last couple of years have been challenging in this respect. Their enterprise is HACCP accredited and they try always to use organic control.

Pollination is a challenge and the Frosts say it’s costing them twice as much as in previous years to pollinate their 15,000 trees. Bumble bees are popular in their orchard and complement the thousands of regular honey bees.

“The bumble bees are good pollinators because they will fly when our spring weather is cold and wet. Whereas the honey bees will stay home,” Frost explains. “We say

the bumble bees are like the older people who will go outside working in all sorts of weather whereas the honey bees are like the younger generation who prefer and need warmer temperatures to fly.”

Another plant that suits the colder climate of the Mamakus is the gooseberry and the Frosts have planted 0.8ha of the Invicta variety, which are more resistant to mould, a common problem with the fruit.

Like the blueberry, the gooseberry has good health properties and their shop and website boast a wide range of products from the fruit.

“Gooseberries are a good source of natural vitamin C. “They are also a body cleanser and are much sought after and known in places such as Eastern Europe, being one of the first fruits of the season especially in the northern hemisphere.”

The Frosts, with their son Phillip, have persevered with their quest to make a living from these two berries that are recognised as good, healthy foods. They have learned on the job, applied available science when needed and have adapted their business to the every changing and volatile world market. www.mamakublue.co.nz

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and less staff made financial sense. But even that was relatively short-lived.

That’s when they started to develop the business as it is today.

Mamaku Blue sells blueberries from the gate and at farmers’ markets in Auckland and Tauranga.

But chiefly they develop value-added products using their blueberries.

They now have a visitor centre where these products are sold, a café where people can have a blueberry muffin, lunch or ice cream, a function centre for weddings and other occasions and they take people for orchard tours to explain the special characteristics of the blueberry and its health benefits.

“When we opened our tourism complex in 2000 we had wine, liqueur and

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RURAL NEWS // OCTOBER 6, 2015

38 MANAGEMENT

New entrant sings praises of awards IT TOOK West Otago farmers Richard and Kerry France eight years to enter the Ballance Farm Environment Awards (BFEA): they finally gave it a go last year.

Richard France says

the experience was worthwhile and he recommends other first-time entrants don’t leave it as long as they did.

“It’s a well-run competition and it makes you take a ‘big picture’ look at

the sustainability of your operation,” he says. “We put up our hand this year because we felt our farm was ready, but my advice to other farmers would be to get in as soon as you can because that way you

Richard and Kerry France advise farmers to have a go at Farm Environment awards.

will get the benefits earlier.”

France says it’s important that entrants keep an open mind going into the competition. “You should listen to what the judges say and then put your plans in place from there.”

The Frances, who run a commercial sheep and beef operation and Hazeldale Perendale Stud on 568ha Longview Farm at Moa Flat, won two category awards in the 2015 Otago awards, including the Hill Laboratories Harvest Award.

This award recognises excellent crop, pasture and soil management, considering the effects the farming system has on the land resource now and long term.

The Frances grow a wide range of feed crops to support their livestock and the awards judges said the attention to detail and careful timing shown in the cropping operation is reflected in the “excellent husbandry, clean crops and good yields”.

Judges also noted the successful use of lucerne to generate high quality finishing feed and supplements for dry periods. Lucerne is not traditionally grown in the area, but France says he likes to experiment by trying new crops and techniques.

The Hill Laboratories Harvest Award was a pat on the back for his

To make sure your brassica crop gets established what would you do?

management of the cropping system, he says.

“I’ve always been passionate about growing good crops. The judges gave us some great feedback and they also pointed out a couple of areas where we could improve, and that is something we will work on in future.”

France was also thrilled to win the Alliance Quality Livestock Award and regards this as a great endorsement of his livestock management and the stud breeding enterprise.

He says winning the award is good exposure for the stud and “beneficial for our business”. “It’s a great feeling to get recognised in front of your farming colleagues. The awards evening was one of the best farming events I’ve been to in a long time, and we enjoyed talking to other farmers about what they are doing to improve sustainability.”

The awards are open to all farming types. Entries for the 2016 Otago awards close on October 31. Entry is free and entry forms are available online: www.bfea.org.nz

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RURAL NEWS // OCTOBER 6, 2015

40 MANAGEMENT

Paper records yield to online ONLINE SOFTWARE and a mobile phone app are helping a sheep and beef farmer quickly and easily present data for farm assurance and compliance audits, says the supplier, Farm IQ. Marcus Edge, South Wairarapa, this year changed his farm recording, using online farm management software and the mobile phone app.

Edge and his wife Vanessa lease 330ha at Pirinoa from a family member, the flat property suiting intensive finishing: chiefly they raise 2000 ewe lamb replacements for hill country breeders.

“We keep them for 12 months and lamb them and give the breeder back a rising two-tooth. Then we take their next batch of lambs off them,” Edge says.

This enables the breeders to focus on other stock classes, he says, and they’re also getting a well-grown, 65kgplus two-tooth that will perform better through its lambing life as a result.

The Edges also finish about 300 bulls and steers.

“Currently we’ve got 162 yearling steers and 124 Friesian bulls.

We buy them in as weaners in AprilMay and winter them on crops, then

take them through spring and once all spring grass has been eaten we sell them store at about 400kg liveweight.”

Dealing with several other farmers and different stock classes adds complexity, but Edge no longer uses a paper diary.

“I record everything with my mobile phone. In the past, if we drenched a mob of lambs I would mark it in the notebook and in the evening I’d transfer it to a diary. Now, I push a few buttons on the phone and it is done.

“NAIT transactions happen automatically when I record a sale or purchase of cattle on the system.

“And you are building up paddock history: I can go into the record for any paddock and look at the history of pasture covers, grazing days, what mobs have been in there, what fertiliser or chemicals have been applied and what crops have been grown.”

Using the software means when the meat company assurance man came a few months ago Edge just had to print out a few reports. “All of our records were sitting there in our online database, so it was just a matter of hitting print.”

He is also using the software to organise farm tasks and to test management options.

To coordinate farm work between himself, Vanessa and their shepherd, Edge has set up a plan for each class of stock through the whole new season and an online calendar shows when tasks need to be done. He can also set up stock rotations.

“Then in the morning our shepherd can see what stock movements need to be done and go and do them.”

Edge also sees potential for using it to manage health and safety. And the software can be used as an inves-

Wairarapa farmer Marcus Edge now uses online software and a mobile app for all farm management recordings.

tigative tool.

“For example one thing we’ve done this winter is put some cattle on kale and some on Swedes, and we’ve tracked their growth. I take their liveweights straight from my Tru-Test indicator and send them to my online database with my phone.

“I don’t do any manual recording.

The database is helping us decide what is more profitable for us.”

Edge wants in future to use the software to provide the sheep breeders with information about what happened with their ewe replacements during the year they were grazed away.

“We could give them feedback including a printout of all animal health treatment, growth rates and reproduction data from the day they arrived to the day they left.”

Combined with EID tagging, the software can also make mob management easier, he says, because it keeps track of what animal is from where, even in mixed mobs. And if they need to be drafted, the database provides a file for the auto-drafter. @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 6, 2015

ANIMAL HEALTH 41 Border Collies have been bred for different uses over the years; like the show dog on the left and working dog on the right.

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Think twice before pulling the trigger!

I HAD an email recently from a woman whose father was looking to get a dog to help him on his small block.

They were thinking of getting a pup, taking it to obedience classes and then sending it to me for training when it was old enough. They were wondering what my thoughts were on breeds as they had been thinking about Border Collies and were wondering how much better (or not) pure bred dogs were, compared to mixed breeds.

It is quite a dilemma for inexperienced people; they just don’t know.

The inevitable happens: they get either a Border Collie pup or mixed breed pup that usually consists of either Border Collie, Heading dog or Huntaway bloodlines. Sometimes it contains all three as well as other parentage thrown in for good measure, and the ‘breeder’ in ignorance tells the poor unsuspecting souls “it will be a good working dog”.

The new owner hasn’t read my columns where I bleat on … if you want a Huntaway get a Huntaway and if you want a Heading dog get a Heading dog and just because it is a mixture of both breeds doesn’t mean it’s going to be the handy dog claimed.

Also, a lot of people don’t realise there are Border Collies and there are Border Collies. Border Collies have been bred for years to look stunning, be companions and do tricks to amuse us, whereas the working Border Collie,

bred by experienced shepherds and farmers, is a totally different animal -- not only in looks but in its whole demeanour.

Would I recommend that someone with a small farm get a pup to help them? No, unless they are experienced with herding dogs or they have a driving passion to learn and have a mentor to call on 24/7.

Maybe they will fluke it, but chances are the pup will drive them up the wall as well as running amuck with their stock or the neighbours’. Most young dogs have energy to burn and combine that with not enough work and inexperienced handlers and you have a recipe for disaster.

But in saying that, some young dogs are relatively relaxed and they can cope with being pets and some novice people manage to get it right; it does happen.

My advice to most people with small blocks is find an older dog. Often someone will be training a dog that isn’t coming up to scratch, or maybe it has started working but lacks energy and stamina for big country and big days. Instead of shooting “the gutless bastard” – it may be the perfect dog for someone who doesn’t have the pressure of big numbers, big paddocks and deadlines.

I know it’s easy to reach for the gun, but before you do, think for a moment … can this dog gather up 5 – 50 head of stock in a small holding paddock and guide them through a gate kindly? And does he have a couple of basic commands in order to control him?

If the answer is yes, then please give the dog a second chance. Trust me, there are plenty of people with small blocks who would love to have the dog and would like nothing more than a Sunday drive out into ‘real country’ to pick up their new family member.

And the dog that couldn’t cope and you hated gets to have a cruisy life as a companion, helping his new family with their livestock and is worth its weight in gold to them.

You will come out smelling of roses rather than wiping the blood from your hands.

• Anna Holland is teaching people dog training. For more information www. annaholland.co.nz or Ph 06) 212 4848 or annaholland@xtra.co.nz

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RURAL NEWS // OCTOBER 6, 2015

42 ANIMAL HEALTH Inaccurate yield measurements of fodder beef will lend to inaccurate feed allocations and serious animal health issues, warns animal nutritionalist Glenn Judson.

Maximise gains and minimise risks with fodder beet – expert get as close as 4.5 tonne either side of true mean. He warns that farmers, in doing this, risk over feeding stock FARMERS NEED to accurately deterduring this phase. mine fodder beet yields in order to However, the high yields that maximise gains and minimise risk. make the crop so popular can come This was one of the key messages at a cost. Judson warns that the more reiterated by Agricom animal nutriyou crop, the lower your potential tionist Dr Glenn Judson at the recent yield. The higher winter stocking Marshdale field day. rate means soil structure damage Looking to the difficulty in and degradation occurs a determining absolute measurements Due to rumen acidosis typically lot faster.

As a result, Agricom on yield, Judson cautions does not recommend farmers that inaccurate occurring during the transition sowing consecutive crops yield measurements will period, it is vital that DM yields of fodder beet. Doing so lead to incorrect allocaare as accurate as possible to may lead to the same sittions – a serious issue for uation as with brassicas stock during the transi- prevent occurrence. where diseases have been tion phase. This phase is the first 10-14 days a herd is transi- itself needs to be focused on: it is encouraged. tioned onto the crop and is critical as better to over estimate yields rather The company also advises farmers rumen acidosis can occur as a result than to under estimate. He suggests when choosing a paddock, to ensure of over-consumption of fodder beet the most accurate way to do this is there has been no recent history of by working at 3-4 tonne either side chemical use as fodder beet is very before the rumen has adapted.

As an example, the transition of mean. sensitive to residual chemicals.

Although fodder beet is a preciprogramme developed at Lincoln By accurately determining fodder University, via the Dairy NZ fodder sion sown crop, it will still not have beet yields, farmers can maximise beet project, starts cows on 1.2kgDM 100% germination or 100% emer- liveweight gain through a more preof fodder beet allocated on the first gence and therefore gaps are inevita- cise feed allocation, Judson believes. day. This is increased by 1kgDM every ble. To calculate DM and get within He says the high palatability of second day for 14 days. Supplement 3t of true mean, Judson recommends fodder beet encourages high intakes inputs begin at 8kgDM on day 1, drop- taking eight samples in a paddock and with an ME of 12 MJ/kg DM it has ping to 4kg by day 14 and down to with a standard deviation of 4.3. strong associated BCS gains. Further, A paddock with a standard devia- with a strong focus on management 2-3kg by day 21.

Judson says due to rumen acidosis tion of 5.4 would require 13 samples. If and planning, the risks associated typically occurring during the transi- only eight were taken in this instance, with fodder beet can be greatly mintion period, it is vital that DM yields Judson believes you would likely only imised.

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are as accurate as possible to prevent occurrence. Signs of rumen acidosis are depression, dehydration, scouring, bloating, milk fever and sudden death.

He says any affected cows should be immediately removed and put onto pasture for treatment.

Judson advises that in order to minimise risk, the transition face

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RURAL NEWS // OCTOBER 6, 2015

ANIMAL HEALTH 43

Nationwide study into leptospirosis A NATIONWIDE dairy farm survey is underway as part of a project to evaluate the effectiveness of current vaccination practices to prevent leptospirosis in dairy herds.

Leptospirosis is the country’s most common zoonotic disease affecting the health of animals and people on pastoral farms.

A Massey University pilot study in 2010-11 found 13% of cows supposedly properly vaccinated were shedding leptospires in 44 Manawatu, Waikato and Southland herds – affecting 30% of herds. While this was not representative of the New Zealand dairy population, it raised questions about the effectiveness of vaccination on those farms, including the age of calves when first vaccinated.

Professor Cord Heuer, from Massey University’s Institute of Veterinary, Animal and Biomedical Sciences, says the current research project, which began in June, aims to clarify the findings from the initial study that provided only limited insight due to the small sample used.

The project will focus on reducing leptospirosis risks in dairy cattle by surveying farmers about vaccination practices, col-

lecting blood and urine samples from stock and collating other information to find out best practice for leptospirosis vaccination.

“We will look at the extent of animal exposure and shedding [the release of bacteria into the environment from urine], current vaccination practices against leptospirosis and links with antibody prevalence and shedding,” Heuer explains.

“Ultimately, this research will be used to update best practice guidelines for farmers, veterinarians and industry stakeholders, to reduce the risk of leptospirosis infection in animals and people working on farms and in the dairy industry.”

Randomly selected dairy farmers throughout NZ will be participating in this research and will be contacted initially by the Massey team. Dairy veterinarians are also being encouraged to promote the study to their clients.

Sampling is scheduled to begin in December and will target 200 dairy herds across all regions, stratified by the number of lactating cows per herd.

Twenty cows per herd will be randomly selected for blood and urine samples by each farm’s veterinar-

ians. A bulk milk sample will also be collected.

The study is being overseen by the Farmers Leptospirosis Action Group (FLAG), which includes representatives from Massey University,

the New Zealand Veterinary Association, Rural Women New Zealand and DairyNZ. Funding is coming from the Sustainable Farming Fund of the Ministry for Primary Industries, AgMardt, and

industry and stakeholder groups.

The study will be subject to animal ethics approval and farms will not be individually identified to ensure confidentiality.

Professor Cord Heuer from Massey University is leading the new research project on leptospirosis.

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LEPTOSPIROSIS IS an infectious bacterial disease caused by leptospires. These multiply in the kidneys of animals and are shed in the urine. They can also infect reproductive tissue. Leptospirosis affects many types of animals as well as humans.

How do people catch leptospirosis?

Transmission of the bacteria occurs when infected animal urine, or water contaminated with urine, gets in your eyes, nose, mouth or through cracks in your skin.

For dairy farmers it is usually by way of infected cattle urine through cuts in the skin, assisting in animal birth, or handling membranes, kidneys or bladders. Infected pigs are also a common source of infection for humans because of the exposure to urine. Contact with urine from infected rats, mice and hedgehogs is also a common source of infection, eg handling calf feed contaminated by rat urine.

What are the symptoms for humans?

It may just feel like a bad case of flu, with headaches and fever. Some people become seriously ill and need hospital intensive care and it can cause death. The disease might progress to kidney failure, liver failure or meningitis, requiring hospitalisation.

Symptoms are often prolonged and recurrent because the physical damage to the kidney and liver may remain after the infection has cleared.

ACVM No.s A9402, A9984 1. Data on file.

Shaping the future of animal health

RURAL NEWS // OCTOBER 6, 2015

44 ANIMAL HEALTH

Worms tricked into shedding skins A NEW AgResearch science project is believed to be the first of its kind in the world.

It will investigate the potential of tricking animal parasite larvae to shed their protective shell (a process called ‘exsheathing’) on pasture so they die rather than being ingested by animals.

This work will be funded for two years, costing $1.15 million, by the Ministry of Business, Innovation and Employment ‘Smart ideas’ scheme.

Internal parasites cost New Zealand sheep, beef and deer farmers $700M each year in lost production

and treatments. If the project succeeds it will benefit those farmers and the owners of horses, alpaca and other noncommercial livestock.

Principal scientist Dave Leathwick, AgResearch, says the idea is to stimulate nematode parasite larvae to exsheath while still on

the pasture, rather than in the host, causing them to rapidly die by being in the wrong place at the wrong time.

An effective treatment capable of killing parasite larvae on pasture would have many and wideranging benefits for farmers. For example, it would improve the

ability of sheep and beef farmers to prevent the importation of resistant worms onto their farm with bought-in stock.

Also, parasites bother milking goat farmers because of the milk withholding periods when normal drenches are used. An effective paddock treatment for

AgResearch scientist Dave Leathwick is leading the worldleading research into new parasite control.

OPS0025

worm larvae would reduce or eliminate drenching of milking goats.

Leathwick says the project could also benefit pastoral farmers worldwide by reducing dependence on animal health remedies and cut labour costs.

“The aim of the study is to find triggers that will stimulate larvae to exsheath outside the host.

The team realises this will not be easy.

“Our team has capability in chemistry, microbiology, soil biology and parasitology.”

Leathwick says the concept of triggering larvae to exsheath outside the host is logical, but it appears from the literature that no-one has previously investigated the possibility. The major focus of R&D over previous decades has been on targeting control through the animal.

Sheep and cattle farmers in NZ spend around $150M annually on anthelmintics to kill parasites, and there is growing concern at increasing resistance to many of these remedies.

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INTERNAL PARASITE resistance is now reckoned to cost New Zealand sheep, cattle, deer, and goat farmers at least $20 million per annum.

Given that resistance can develop to any drench, every farmer needs a plan to manage the risk of worm resistance to drench. Future animal welfare and productivity will rely on farm plans developed today to control the emergence of drench resistance.

Drench chemicals are limited in number and no new ones are forseen in the near future, so drench use must be part of an overall parasite management plan so that today’s drenches remain effective for many years.

The industry initiative Wormwise has developed a national worm management strategy which provides simple and important tactics for farmers in managing internal parasites.

Wormwise shows collective responsibility to use anthelmintics responsibly and sustainably, by establishing best management practices. The aim is to ensure farmers get well-researched, up-to-date advice agreed on by the industry. Wormwise achieves this by managing and integrating research work, education, communication and extension services for farmers, veterinarians, key influencers and retailers.

Farmers should review their drench use and overall parasite management over the last few years. To determine the resistance status of the different worm species present on their farms, a drench test should also be done.

Each farm is different, so veterinarians and animal health advisors are essential for farm-specific animal health plans. These must be flexible and be regularly revised as indicators of stock performance. They should also monitor signs and symptoms of parasitism.

As resistance develops drenching becomes less effective, farmers must reassess their worm management practices regularly.

• Mark Ross is chief executive of Agcarm.

RURAL NEWS // OCTOBER 6, 2015

MACHINERY & PRODUCTS 45

No drum, concave or straw-walkers, but grain still gets harvested MARK DANIEL markd@ruralnews.co.nz

COMBINE HARVESTERS don’t come more productive than the new CR series from New Holland, whose flagship CR 10.90 holds the Guinness World Record for harvesting nearly 800 tonnes of wheat in eight hours at nearly 100 tonnes/hour average.

The 2016 CR models are based on a twin rotor system that first saw the light in 1975 in the TR 70 model.

However, it differs from conventional harvester layout in having no drum, concave or straw walkers.

The crop is delivered via a horizontal beater into two longitudinal rotors up to 22 inches diameter that spin within a series of grates for threshing, before delivering the threshed straw onto a straw flow beater at the rear.

This simplified layout results in higher outputs, and the ‘forced’ threshing works particularly well in damp climates such as New Zealand and the UK, also protecting the straw quality for future use.

After the grain is separated by the

twin rotors it passes to the grain pan with conventional upper and lower opposed sieves for final cleaning.

The cleaning fans use adjustable vanes for precise control and the addition of the Opti-Fan system automatically compensates for the position of the machine on uphill or downhill slopes by decreasing or increasing fan speeds in each situation.

From the grain preparation area, the crop is passed to the 14,500L holding tank that can unload into trucks and trailers at up to 142L/sec via a 10m folding unloading auger While the TR 70 of 40 years ago developed a modest 168hp, today’s CR models are powered

by Tier 4A and 4B engines of 490-652hp.

It also uses the latest Ad-Blue/SCR technology to gain extremely efficient fuel usage and low emissions. Tank capacities are up to 1300L on the largest machines.

At the business end, header widths of up to 12.5m are available, with auto cutting height and reel height control, and the option of retractable knife positioning makes these giants suitable for

harvesting all types of crop. Performance can be enhanced further by fitting the SmartTrax rubber track and TerraGlide suspension systems, standard on the CR 10.90, which improve traction and ride, and reduce overall width.

The new Harvest Suite cab has 3.7 cu m volume -- roomy and redesigned with operator comfort and ergonomics in mind. Seat finish ranges from humble cloth to luxurious leather with auto weight adjustment. The window glass slopes down below floor level at the front to aid header visibility.

Other cab features: a new CommandGrip multi-function control lever for all main functions, a new control console for important

The New Holland CR series of harvesters are highly efficient and productive machines.

displays and 26.4 cm Intelliview touch screen monitor for machine setup.

Lighting options include HID and LED for immediate illumination around the machine and long range function up to 500m ahead. www.newholland.co.nz

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RURAL NEWS // OCTOBER 6, 2015

46 MACHINERY & PRODUCTS

Big mover now comes as 4-track MARK DANIEL markd@ruralnews.co.nz

THE WAIT is over: after many months of speculation and grainy overthe-hedge spy shots John Deere has released details of the new addition to its 9 series stable – the 9RX. Owners of this large prime mover will be able to choose wheeled (9R), twin track (9RT) or now the new four track, centre pivot version (9RX).

There are four models, powered by the latest Tier 4 engines -- the smallest 470hp, the largest a mighty 620hp.

The smaller 470 and 520hp units make use of a 13.5L John Deere Powertech engine, the larger 570 and 620hp models use a 15L Cummins QSX

plant. Both offer high torque and constant power throughout the rev range.

Transmission is via the e18-full powershift transmission with ‘Efficiency Manager’. This automatically matches engine load and target speed to shift to the correct speed in the transmission for best performance and fuel economy.

From the transmission, drive power is transferred to large diameter drive sprockets and large heavy duty drive lugs to Camso Duradrive 3500 or 6500 belts which transmit the power to the ground.

The 30 or 36 inch wide belts are supported by optimally spaced idlers and mid-rollers which ensure great grip and min-

imal slippage.

Up on top, the operator sits in the Commandview cabin supported by a new fourlink mechanical cab suspension giving up to 10cm of movement – much more comfortable.

To help the driver get the best performance out of the machine, there is well known JD technology such as Auto Trak for guidance, JD Link for connectivity, and a new Active Command Steering system (ACS) for easier headland turns and line holding ability at road speeds.

A new hydraulic system can support up to eight selective control valves with 235L/min flow; this can be beefed up to 435L/min for high demand

applications.

“The new 9RX brings to the market John Deere’s 20 years of experience gained with the 8RT and 9Rt tractors,” says John Deere product manager for the 9 series, Jerry Griffith.

He also notes that customers say the new tractor is easier to manoeuvre and has power to get the job done. www.JohnDeere.co.nz @rural_news facebook.com/ruralnews

STOPS IN A FLASH! adding single units.”

Meanwhile the firm’s TPW Xpress woolpress has added features including low filling height, making it more operator friendly -- less stress and strain on the operator’s back.

“This coupled with the larger opening of the wool box ensures large armfuls of wool can be placed easily in the filling chamber,” Minke adds.

Automatic side pinning gives compact, square, contamination-free bales ideal for safe and compliant truck loading and road carting, Minke says.

“Powerful, quiet hydraulics ensure more wool is pressed into fewer bales, resulting in less storage and cartage costs, saving extra costs at shearing.”

Bales are automatically ejected easily using the rear control ejection lever and directly loaded onto the optional wool bale trolley. The TPW Xpress has digital scales.

SHEARERS’ SAFETY is assured by the developments in Heiniger’s latest equipment, the company says.

Its Evo shearing plant is a world-first in using an electronic safety switch to prevent handpiece lock-ups.

If a handpiece locks or is jammed by trash such as wire the plant instantly cuts the power supply, stopping the handpiece in a “fraction of a second”.

Heiniger says these safety features are endorsed by government agencies, gaining it two awards. Also reckoned unique is a quick release downtube isolated from all electric components, eliminating the risk of electric shock.

“The Evo has brought a new level of safety and performance to New Zealand and Australian shearing sheds,” says Heiniger Australasian sales and marketing manager, Chris Minke.

“The unit appeals to larger woolgrowers doing total shearing shed revamps, and to smaller producers

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RURAL NEWS // OCTOBER 6, 2015

MACHINERY & PRODUCTS 47

Modified Avatar set to shake-up UTV market MARK DANIEL markd@ruralnews.co.nz

IT WOULD be fair to say the Avatar is a new name to the global market for UTV’s, but that could be about to change.

Following a quad accident that left a family friend disabled, Hamish Gilbert began looking for a better alternative to the then current market offerings. It looks like a re-working of North American sports-derived machines, but the idea was to build a machine more suitable to New Zealand conditions in durability, noise and speed.

Gilbert quickly found that durability and noise aspects could best be achieved by taking components from the automobile industry, on the premise that they were well tested and engineered and freely available at a sensible price.

The development over the last four years has resulted in a large step forward for Avatar with the recent signing of an agreement for the worldwide distribution of product with Sinomach, of Luoyang, China, part of a manufacturing group that includes the YTO company that first manufactured tractors in that country Recently landed on NZ shores, the machine impresses as being well thought out. Inspection of the chassis and A-arm suspension units show that everything is galvanised and should be durable -- confirmed when you notice that the A-arms are greaseable.

Petrol-heads will notice that the 32mm driveshafts started life in a Mazda 626.

The machine is available with either a 62hp diesel or 800cc petrol engine. The former uses a 3-cylinder turbocharged and intercooled unit commonly used in 1.5 tonne trucks from the Chery stable, with technical input from Mitsubishi, GM and Chevrolet; the petrol model takes its design

lead from a Canadian offroad specialist.

In the diesel variant, the engine is laid on its side, producing 62hp vs its nearest rival in this segment whose units produce 24hp – so no problems on the power front.

Transmission on the diesel variant is centred on a 5-speed manual gearbox, sourced again from the delivery truck sector; top speed is about 85km/h, with speeds two and three covering most farm applications in the 1800-2500rpm band with a minimum of noise.

The 800cc petrol unit sticks with the more conventional layout of a CVT transmission, with the bonus of an advance engine braking system.

For daily maintenance the lift-out bench seat gives easy access to the engine bay for normal checking of the air cleaner, battery and engine oil level, and a low level indicator shows radiator levels.

Once on the move there is selectable 2- or 4WD and front and rear diffs that can be activated individually or run as a pair in tough conditions.

Parking, even in difficult locations, is helped by a dashboard activated, electronic park switch which acts on the rear discs.

The driver’s area is well thought out with saloon style doors for easy access to the roomy bench seat, an adjustable steering column to suit all sizes and a full width opening front windscreen. Individual seat belts assure safety, as do substantial headrests on each seat. The rollbar further enhances safety and combines with a rear glass panel, a HD roof panel and rear view mirrors to complete the look.

The service interval is 250 hours: a full service including labour, filters and fluids costs about $490.

A manually operated tipping deck appears well thought out: gone is the electric tipping mechanism that was

unreliable in previous models. Tie-down rails and hooks keep loads secure. Options include a front mounted winch, full enclosures for the cab and a range of tyre options for difficult terrain.

The diesel version tips the scales at 720kg, the petrol option 680kg. Each takes a healthy 500kg payload on the rear tray and the rear ball. Ground clearance of 290mm and suspension travel of 8

inches should see the Avatar well able to tackle the toughest terrain with ease. www.avatarproducts. co.nz @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 6, 2015

48 MACHINERY & PRODUCTS

APC ensures good, tight bales MARK DANIEL markd@ruralnews.co.nz

GERMAN HARVEST specialist Claas will take away a silver medal from the upcoming Agritechnica show for its automatic pressure control system (APC).

The APC allows operators to get maximum performance from the new Quadrant 5200 and 4200 large square balers.

As experienced operators know

well, while a tractor of sufficient power is required for output, there is little point in baling at high pressure setting if the twine is unable to withstand these loads. So for the new series, Claas has moved away from working only on bale chamber pressure, to now also monitoring the load on the baling twine.

The quality of the twine, measured in metres per kilogramme, will determine its ultimate capacity. This value is entered into

the implement control terminal (ICT) by the operator. Ion operation sensors measure the load on the twine and if this approaches or exceeds the maximum load the system automatically and gradually reduces the system pressure until the overload is rectified – then it resets to the pre-arranged system pressure. With this system of measurement the baler is capable of making bales of uniform density irrespective of crop con-

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IN A move to compete with the Case Quadtrac, John Deere has recently shown the world its new 9RX series which uses four track layout and technology similar to Case IH, and offers models from 470 to 620hp using a mixture of JD 13.5L and Cummins QSX 15L, stage 4 engines. Transmission is an 18 speed power-shift and the driver sits in a suspended cabin. Expect a full launch at Agritechnica.

TOYOTA Toyota recently showed journalists its facelift Prado SUV in rugged Canterbury high country. The key change was the new 1 GD-FTV diesel engine with more power and torque and lower fuel consumption and noise. It will soon be seen in the new Hi-Lux series. At least 7.5 million units have been sold since its inception. The company says it will regain its place at the top of the ‘medium rugged’ SUV sector by year end, having just lost out to Jeep Grand Cherokee last year.

NEW HOLLAND In parallel with its Case IH cousin, NH has just released its precision land management (PLM) app for the iPhone and Android platforms. The items include set-up, operation and best use of a range of GPS based products, and includes a large number of how-to guides.

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The recently opened national parts distribution centre at East Tamaki will ship Ford-certified parts faster nationwide to dealers, the company says. It holds at least 750,000 items. The purpose built facility uses the latest storage, retrieval and despatch systems, and is a safe and comfortable workplace.

EUROAGRI Cultivation specialist EuroAgri of Ashburton has been appointed a dealer of Kellands Group, UK, products.

Part of the Alamo Group, Kellands makes self-propelled spray equipment including Multi-Drive and Frazier Agribuggy.

DEUTZ ENGINES Deutz built the first four stroke engine (invented by Herr Otto) in 1876. Fast forward to June 2015 when it produced its nine millionth unit. After 150 years the products remain at the forefront of modern engine technology, powering many leading brands.

RURAL NEWS // OCTOBER 6, 2015

MACHINERY & PRODUCTS 49

Rotor rake tackles most demanding jobs MARK DANIEL markd@ruralnews.co.nz

Not just for kids it is.

Ground contouring is excellent because the transport wheels are outside, between the rotors. The wide position of the 4-6 wheels per rotor combined with 3D ground contour following provide clean results.

It is fast and easy to move the rake into and out of transport mode and its transport width is just 2.99m.

working width and then on the go the rake’s components move automatically to suit the control settings.

The Hibiscus 1515 CD also offers different configurations to suit several types of headland turns and the computer lifts and lowers the rotors individually at the right time. Wide positioning of the transport wheels gives good stability on hills and headlands: the wider it is, the more stable

WHILE YOUNG people have their faces glued to smartphones using the latest social media apps, remember many apps have potential to add value to techsavvy farm businesses.

Case IH’s recently introduced mobile app gives users of its Advanced Farming System (AFS) products access to masses of information, explaining the basics and how to get the best from the systems.

The app contains around a 100 tuto-

rials in PDF or video format covering topics such as installation, set-up and calibration of automated steering systems, and best use of mapping software.

Freshly loaded on the system is a guide to the newly launched AFS Connect Telematics function.

The app can be downloaded free for smartphones and tablet PC’s with Android or Apple IOS via the normal channels. Search for Case IH AFS Academy.

Tel. 0800 535 969

WELCOME INN. Your Landini’s best accommodation for:

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LELY SAYS its new Hibiscus 1515 CD four rotor rake is designed for demanding operations, available in working widths of 11-14.8m and swath widths from 1.2-3.5m.

The rake has two main chassis beams in a V-shape and two rotors are suspended from each beam on a subframe that can be adjusted for the working width by altering the swath width and the overlap of the rotors.

The position of the rotors remains consistent due to the parallelogram construction that allows the wheels to self-steer. The rotors’ suspension arms can be extended to increase the raking width.

Using the ISOBUS control system in the cab, the operator can vary the angle between the two main beams and/or extend and retract the suspension arms of the rotor to select the ideal set-up. This is simple to do: the operator only has to input or adjust the required swath width and

NORTHLAND Agridustrial - p 09 431 2148 BAY OF PLENTY Bay Of Plenty Tractors - p 07 573 4910 GISBORNE Watts Motors - p 06 867 4749 TARARUA Lancaster Tractor Services - p 06 374 7731 HOROWHENUA P&T Tractors - ph 06 363 7044 NEW PLYMOUTH AgTraction - p 06 759 8432 OTAGO Ag & Auto Direct - p 03 418 0555

AUCKLAND Tractors Ag &Turf - p 09 278 8288 KING COUNTRY Brian Collins Machinery - p 07 895 5242 HAWKES BAY ECR Equipment - p 06 876 9835 MANAWATU AgTorque - p 06 323 4858 STRATFORD Hartley Bridges & Engineering - p 06 762 2762 TASMAN Motueka Farm Machinery - p 03 528 9065 SOUTHLAND Otautau Tractors - p 03 225 8516

For all other areas contact us p: +64 7 573 8132 www.agtek.co.nz Landini is a worldwide brand of the ARGO Group of Companies

Distributed by

RURAL NEWS // OCTOBER 6, 2015

50 MACHINERY & PRODUCTS / RURAL TRADER

Machinery show-goers hear optimism MARK DANIEL markd@ruralnews.co.nz

THE AMERICAN Farm Progress Show, in Illinois, is an important launch platform for new products and a good barometer of how the industry is faring.

At this year’s early September event, Jim Walker,

Case IH vice president for North American sales, gave journalists a cautiously optimistic overview of prospects.

He compared the 201213 season, with its 13,700 sales of combine harvesters, with the following year that saw a substantial ‘retreat’ and the current

a glut of used machines gathered during the boom. Especially he cited the Tier 4 engine issue that makes it tough to get sales in South America -the traditional destination for a lot of used machines – because the continent does not have fuel of sufficient quality to run these

season in which pundits forecast a comeback to 7000 units -- a drop of 49% within two years.

Walker says most manufacturers had seen the fall coming, but the 201213 zenith had made it so much greater.

Also causing a logjam in the combine sector was

high tech engines.

Walker said in the spray sector pre-2012 sales had gone to contractors and farmers in a 60:40 split. But this reversed as farmers bought their own self-

propelled rigs; and in the current year these same farmers were unloading their big units onto an already clogged market.

The main bright spot for the industry was the livestock sector where

an upturn in sales of utility tractors and hay and forage equipment had occurred as producers did more of this work inhouse. @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 6, 2015

RURAL TRADER 51 DOLOMITE

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