Rural News 04 October

MACHINERY

MANAGEMENT

Self-driving tractors seen as the future to boosting productivity. PAGE 46

A chance to tell a good news story. PAGE 38

NEWS The Polish meat industry looks to NZ as a potential export market.

RURALNEWS

PAGE 14-15

TO ALL FARMERS, FOR ALL FARMERS

OCTOBER 4, 2016: ISSUE 616

www.ruralnews.co.nz

Farmers get the lot SUDESH KISSUN sudeshk@ruralnews.co.nz

FONTERRA HAS for the first time passed all its forecast milk price rise to its cash-strapped farmer suppliers.

The co-op last month announced a 50c increase in its 2016-17 farmgate milk price, lifting it to $5.25/kgMS. Normally farmers get an advance payment – about 70% of the forecast price – then a final payment after the end of the season.

But Fonterra chairman John Wilson says all of the 50c increase has been passed to farmers as an advance.

“This has been done for the first time; it reflects our co-op’s strong balance sheet and acknowledgment of the tough times our farmers are facing out there,” he told Rural News.

Last week, Fonterra directors, including Wilson, held about 45 share-

holder meetings to discuss the annual results.

He says farmers appreciate Fonterra’s net profit jumping 65% to $834 million, “but we realise things are difficult on farms right now…. Fonterra has responded by building a stronger balance sheet and getting cash to farmers quicker than we normally do.”

Earlier this year, Fonterra lifted the advance rate and brought forward its dividend payment. Wilson says it’s pleasing to hear farmers appreciate the work the co-op is doing; more needs to be done, he adds.

He says Fonterra’s rural service

subsidiary Farm Source is also helping farmers, using scale to buy goods cheaper and passing those savings to farmers. Under Farm Source’s rewards programme, farmers accumulate ‘eligible spend dollars’ -- helpful for sharemilkers and young farmers. It also offers extended credit on farm purchases.

Wilson says Fonterra has been focusing on its balance sheet for three years, working hard to return every possible cent of value back to farmers.

“Our business strategy is serving us well. We are moving more milk into higher-returning consumer and food-

service products while securing sustainable ingredients margins over the GlobalDairyTrade benchmarks, especially in specialty ingredients and service offerings.

“Increased earnings and continuing financial discipline have increased the return on capital and strengthened our balance sheet by significantly reducing debt.”

Fonterra’s milk supply over the past five years has grown at an average of 5% annually and the co-op has built more plant to process the extra milk. More efficient processing has shaved costs by 8%.

PHOTO NIGEL MALTHUS

A BLAZE OF COLOUR Father and daughter John and Courtney Chamberlain pictured among the tulips on Hadstock Farm, on the north bank of the Selwyn River at Springston, Canterbury. The property is one of the region’s largest flower producers and is a blaze of coloured tulips and daffodils despite this being a couple of weeks past the height of the season. At the height of the picking season, up to 40 pickers harvest as many as 8000 bunches a day. Boxes are flown overnight to the auction houses in Wellington and Auckland or trucked each morning to Christchurch, eventually for sale around the country.

More on Hadstock Farm next issue.

ANOTHER TOUGH YEAR? WHILE DAIRY farmers look to be over the slump in milk prices they’ve endured for the past couple of seasons, their lamb-producing counterparts seem destined for another tough year.

Alliance Group chairman Murray Taggart says the outlook for lamb remains difficult.

“It would take a brave person to say lamb prices will be dramatically higher Murray Taggart than last season,” he told Rural News. “But there is no indication they will be dramatically lower either.”

Taggart blames the confluence of exchange rates, stock availability and market demand for making the job of forecasting lamb prices extremely difficult.

“Most companies are pretty gunshy, especially given what happened with prices last year.”

Taggart says the new lamb season has begun with a “pretty intensive procurement” battle, but he is unsure how long this will last, especially when the bulk of lambs come on stream.

Taggart concedes that another season of poor lamb prices will put even more pressure on hard-pressed sheepmeat producers, but says the company can only offer prices the market is willing to pay for product.

•See more page 7

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RURAL NEWS // OCTOBER 4, 2016

NEWS 3 ISSUE 616

www.ruralnews.co.nz

NEWS ����������������������������������� 1-22 MARKETS ������������������������ 24-25 AGRIBUSINESS �������������� 26-29 HOUND, EDNA ����������������������� 30 CONTACTS ������������������������������ 30 OPINION ���������������������������� 30-33 MANAGEMENT �������������� 34-39 ANIMAL HEALTH ���������� 41-44 MACHINERY AND PRODUCTS ���������������������� 45-50 RURAL TRADER ������������������� 51

HEAD OFFICE Top Floor, 29 Northcroft Street, Takapuna, Auckland 0622 Phone: 09-307 0399 Fax: 09-307 0122 POSTAL ADDRESS PO Box 331100, Takapuna, Auckland 0740 Published by: Rural News Group Printed by: PMP Print CONTACTS Editorial: editor@ruralnews.co.nz Advertising material: davef@ruralnews.co.nz Rural News online: www.ruralnews.co.nz Subscriptions: subsrndn@ruralnews.co.nz

SUDESH KISSUN sudeshk@ruralnews.co.nz

FONTERRA CHAIRMAN John Wilson is confident farmers will next week approve changes to the co-op’s governance structure.

A special meeting in Palmerston North on Wednesday will require at least 75% support; Fonterra’s attempt late last year to pass the reforms received only 64% farmer support.

The key change proposed to the governance structure is that farmers would directly nominate their own choice for selection to the board. A reduced 11-director board and first-past-thepost voting rather than the current single-transferable-vote model have been retained from the original proposal.

Fonterra directors, led by chairman John Wilson, discussed the latest gov-

ernance proposal at 45 farmer meetings last week.

Wilson says 64% accepted the last proposal and the board listened “very carefully” to those who did not.

“We have tweaked the proposal and addressed the question of choice; now any farmer shareholder can stand in his or her own right,” he told Rural News.

Wilson says feedback from early meetings last week indicated strong support for the revised proposal.

“We’ve had this conversation for eight months with our shareholders; it’s great for the co-op and gives our farmer shareholders a greater understanding, but farmers believe it’s time to move forward. From the feedback it sounds as if we have the support required to pass the reforms.”

Former Fonterra directors Colin Armer and Greg Gent prompted Fon-

terra to restart the review after filing a remit to reduce the board to nine at the 2015 annual meeting; the remit, though supported by a majority of farmers, did not get the 75% needed to pass.

Armer told Rural News he still has questions about the revised proposal and will comment later.

Fonterra currently has 13 directors; under the proposed new structure the board would be reduced to 11 directors – seven farmer-elected and four appointed.

Farmers supported the proposed size and composition of the board.

They also liked the proposal for an attributes and skills matrix.

Wilson says the review committee thought carefully about having an independent selection panel recommend a shortlist of candidates for farmers to vote on, but farmers did

John Wilson

not support this.

“A vote off a shortlist does not answer farmers’ calls for choice; it just gives farmers more of the same – candidates by the same process, measured against the same criteria by the same people.

“The best way to give voting farmers a real choice and achieve the outcome we are looking for is to enable farmer candidates to stand outside the nomination process.”

The review also included a revamp of Fonterra Shareholders Council and a re-focus on its core constitutional role as a cornerstone shareholder.

The special meeting will start 10.30am at the Palmerston North Convention Centre on October 12.

EMERGING MARKETS PROVIDE OPPORTUNITIES CHINA, THE broader Asian region and the Indian subcontinent hold untapped opportunities for the red meat sector, say Meat Industry Association chief executive Tim Ritchie.

“China has become a very new and important market but the companies are well established there,” he says.

“In India, where they are naturally sheep meat eaters and have a massive population, we haven’t done much business yet.

“That is in part because there are market access issues and getting the protocols agreed and all that stuff.

“That is the technical side of market access. We don’t have a free trade agreement but our government is working on one.

“We face high tariffs and things like that, so there are barriers but there is a bit of business being done.

OF FOFER R E OC XT TO EN BE D R ED

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Governance changes expected to pass

“But that is the sort of market that in the future will be extremely important because of that significant population; they are natural eaters of sheep meat.

“They will be an important market because it is all part of creating that competitive tension.

“China has become a very important sheepmeat market. It will be good to have another market in that broader region that is also competing for that product.

“It is all about keeping markets honest and not becoming beholden to any one area of any one market because we would then lose the leverage we have.”

Africa is a whole new continent we have had little to do with except the northern parts like Algeria and Morocco, says Ritchie.

He says there are not necessarily opportunities

there right now but there could be in future.

“Indonesia is more of a beef market and in 20002010 it grew into our second-largest beef market. But it is still only 10% of our market because of the significance of North America.

“But we’ve had market access issues in Indonesia which we have been working through and it has been a rollercoaster in terms of our fortunes. It has been up and down a couple of times as they have restricted imports to try to grow their domestic industry,” Ritchie adds.

“That hasn’t proved successful so now they have opened the door again and New Zealand and the USA have taken Indonesia to the WTO, from which we are awaiting results. For NZ, that is on beef access and for North America it is horticulture.”

– Pam Tipa • More on meat outlook pages 6-7

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RURAL NEWS // OCTOBER 4, 2016

4 NEWS

Tatua tops – again!

SUDESH KISSUN sudeshk@ruralnews.co.nz

ers, but the news will not be unexpected.

“We have been predicting for the whole season that 2015-16 would be a tough one for farmers, with our recent cash forecasts in the $3.80$3.90/kgMS range.

“We did what we could to maintain farmers’ cashflow by starting the season with a higher advance rate of $3.80/kgMS and holding this.

This ensured our focus was on cashflow management and delivered as much cash as possible to shareholders.”

Tatua benefited from its hedging policy in the face of a strengthening NZ dollar.

Allen says Tatua’s total revenues for last season reached $281.2 million; gearing ratio (debt divided

by debt plus equity) decreased to 35.7% from 36.6% at the end of the previous year.

“The NZ dollar has slowly appreciated through the year and the company’s foreign exchange hedging policies have achieved an overall conversion rate of 0.7135 to the US dollar, a strong performance and in line with Tatua’s benchmark,” says Allen.

Tatua’s farmer shareholders supplied 15.6 million kgMS last season, versus 15.7m kgMS in 201415.

“Our supplying shareholders’ milk quality has continued outstanding, with average somatic cell counts remaining at historically low levels and 99.7% of milk collected graded ‘finest’,” says Allen.

“Great product - I’m very satisfied with my new shed!”

WAIKATO MILK processor Tatua Dairy has done it again -- topping last season’s milk payout, leaving Fonterra and other processors far behind.

The Morrinsville cooperative, owned by 86 farming families, will pay its suppliers $6.30/kgMS for the 2015-16 season, retaining 11c/kgMS for plant upgrading.

Tatua has a distinguished history of topping the payout stakes.

Fonterra suppliers will get a final payout of $4.30/kgMS, comprising a farmgate milk price of $3.90/kgMS and a dividend of 40c/share.

Suppliers of Westland Milk, Hokitika, New Zealand’s second

largest dairy co-op, will get $3.87/ kgMS for the last season.

Tatua chairman Steve Allen says the 2015-16 season has been a challenging year, with global milk supply rising in the face of generally lacklustre demand; benchmark milk powder prices declined for most of the year.

He says Tatua achieved a strong result despite the weak market, selling its caseinate, whey protein casenites (WPC) and anhydrous milk fat (AMF) as customer-preferred product all year; and the co-op increased margins on its specialised added value business as a result of the low NZ milk price.

Westland chairman Matt Regan says its payout will be below the breakeven point for most farm-

John Brackenridge

MERINO MEAT BRAND JUMPS SHIP IT LOOKS as though heated competition between the two big South Island meat companies – Alliance Group and Silver Fern Farms – has already begun.

Only days after SFF announced it would quit its relationship with NZ Merino in the joint Merino meat brand Silere, Alliance has stepped into the gap. This comes within days of the go-ahead for SFF to merge with Shanghai Maling.

Last week, Alliance Group and the New Zealand Merino Company announced a new partnership “to further build” the Silere brand.

The Silere Alpine Origin Merino Lamb was established by NZ Merino and SFF in 2011.

However, SFF quit the relationship saying it wants to “concentrate on its own brands” (see page 22).

NZ Merino chief executive John Brakenridge says the new partnership with Alliance will build on a solid platform to accelerate Silere’s growth.

“We are now at a point where change is required to fully realise the potential of the programme,” he says.

“The partnership with Alliance Group will ‘re-boot’ and accelerate Silere’s growth.”

Alliance chief executive David Surveyor says the Merino meat brand will form a part of the co-operative’s value add strategy.

“This is another step in the transformation of the Alliance co-operative and we look forward to sharing our strategy with Silere growers.”

He says the Silere Alpine Origin Merino brand will be retained, and stock will be processed at Alliance’s Nelson, Smithfield and Pukeuri plants.

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RURAL NEWS // OCTOBER 4, 2016

NEWS 5

Timaru to hold Grasslands conference in November SCIENTIST, FARMERS and agricultural industry representatives will gather in Timaru, in early November, for the 78th New Zealand Grassland Association (NZGA) annual conference.

The conference theme is ‘Land of Diversity and Opportunity’.

Local organising committee chairman Herstall Ulrich says everything from horticulture to high country Merino farming will be on display.

“The region also boasts many associated industries: meat processing in two major plants, milk processing including one of Fonterra’s bigger plants at Clandeboye, and vegetable processing, to name a few.”

Pastoral farm-

ing remains the dominant topic in conference papers, including the latest science on pasture renewal, novel forages, pasture pest management and environmental impact and mitigation.

Association president David Stevens, of AgResearch, says for farmers and their agricultural industry business partners the conference is an opportunity to hear from and quiz the scientists who are taking the industry forward.

“More than ever farmers need a good grounding in science to make good decisions for production and the environment. The conference relays good, practical science that’s been peer-reviewed and that they can be confident

tional breeding-finishing operation feeding some of the latest forages.

Irrigation and the importance of water and nutrient management in the often Everything from summer dry region horticulture to will feature strongly.

Besides the field high country trips and science Merino farming papers, for delegates will be on display. unfamiliar with the region leading local farmers and a farm banker ing field trips including will set the scene on the a robotic, pasture-based opening morning, and on dairy farm; intensive the second morning the sheep and beef finishing keynote Levy Oration will with and without irrigagive an industry leader an tion; and a more tradiof if they decide to deploy it on their farms.”

The conference afternoons will have leading local farms will host-

Local organising committee chair Herstall Ulrich.

open platform to speak on a topic of his/her choosing.

The NZGA Timaru 2016 conference is being held from November 2 – 4.

See www.grassland.org.nz for the full programme or to register.

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• The Polish are coming! Page 14-15

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RURAL NEWS // OCTOBER 4, 2016

6 NEWS

New meat strategy positive – MIA priate for today’s environment – to see where is there market failure or a need for collective activity,” Ritchie told Rural News.

“The companies are well integrated into the mature markets, [so now] it is logical to have some sort of re-orientation of BLNZ resources into emerging markets, where it is important to lay foundations for the future.

“This is just as the BLNZ legacy organisations – the Meat Board and [similar] – did in North America and Japan decades ago.

“When Britain joined the [European Economic] Community there was a lot of activity in North America and Japan.”

Now it is logical to

PAM TIPA pamelat@ruralnews.co.nz

BEEF+LAMB NZ’s new red meat marketing strategy results from a stepup in collaboration by the wider red meat sector, says Meat Industry Association chief executive Tim Ritchie.

And the new approach is not without valuable precedent. The refocused strategy, with BLNZ directing promotional efforts to new markets, is similar to decades ago when North American and Japanese markets were targeted after Britain joined the European Union (then known as the Common Market), Ritchie says.

“It has been timely to re-evaluate what is appro-

work together on marketing in the new markets “with that NZ story which underpins the value we can extract from a market,” Ritchie says.

“We must sell ourselves, the nature of our farming systems and our processes as all being part of our value proposition. It is entirely logical to do this on a whole-sector basis because there is a common message there – it is almost pre-competitive.”

BLNZ chairman James Parsons says development of a red meat sector ‘story’, capturing the culture, values and integrity long associated with NZ sheep and beef farmers, is the angle they aim to exploit, to differentiate NZ from its competitors

peting to get our product, the more we can charge.

That competitive tension -- the new markets versus the mature markets -that’s important.

“The red meat sector story will be used by the meat companies in the mature markets as well.

They will be able to integrate that into their marketing. It is collateral – it will be like a toolbox of stuff they can lift out and blend into their own story, talking about all the benefits of the grass, the water… all those positive things.”

The new initiatives are not unilateral; they will involve “both sides of the farmgate working together and looking at what is necessary for the future, [identifying] where there

in the international marketplace.

The story will build on NZ’s farming systems using free-range, grassfed livestock farmed to the highest standards of animal welfare and authenticated through a national quality assurance (QA) programme. This will be developed through the Red Meat Profit Partnership (RMPP).

Ritchie says the story makes sense and will talk about NZ in the emerging markets seen as important to us in the future.

“The existing mature markets will still be important too. We need to always capitalise on all opportunities and have good competitive tension between all markets. The more people we have com-

Beef+Lamb NZ chair James Parsons.

is market failure, and activity not being tackled.

That would be for the long term benefit of NZ and the industry -- “in these new emerging markets”.

“It has been very timely to re-evaluate where the BLNZ market resource is focused and reorient this towards emerging markets. [Our aim is] to work closely with the meat companies – the people doing the selling, that is sensible -- and providing the collateral the companies can also integrate into their own marketing in the mature markets.

“This is positive: both sides working together, not taking a competitive position. It is in the long term interests of farmers, meat processors and meat marketers that we grow the industry and make it more profitable.

“We’ve had dis-investment over the last decade or so with the growth in dairy, so we’ve got to do everything we can to lift profitability and ensure there is a good future for all participants in the sector.” @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 4, 2016

NEWS 7

Don’t hold your breath for jump in lamb price DAVID ANDERSON

SHEEP FARMERS desperately looking for a lift in lamb prices this coming season may be in for more disappointment, according to Alliance Group chairman Murray Taggart.

Just back from a market trip to Malaysia, Singapore, Japan and China, Taggart told Rural News it is very hard to pick what the market will do in the coming season.

“It’s fair to say the crystal ball is probably cloudier than ever,” he quips.

“It would take a brave person to say lamb prices will be dramatically higher than last season.

“But there is no indication they will be dramatically lower either.”

Taggart says the confluence of exchange rates, stock availability and market demand make the job of forecasting prices extremely difficult.

“Most companies are pretty gun-shy, especially given what happened with prices last year.”

Taggart says the new lamb season has begun with a “pretty intensive procurement” battle, but he is unsure how long this will last, especially when the bulk of lambs come on stream.

“We’d prefer procurement prices to

MORE

“With numbers properly reflect the down, markets on current market situthe up and overseas ation.” competition all but Taggart concedes disappeared, venison that another season prices look strong,” of poor lamb prices Taggart says. will put even more But he says with pressure on harddeer numbers halvpressed sheepmeat ing over the past producers, but says decade the sector is the company can starting from a very only offer prices the low base and has conmarket is willing to cerns these shortages pay for product. and high prices could “We absolutely Alliance chair Murray Taggart. damage relationships understand the need for sheep farmers to be profitable for the if customer demands are not met.

Taggart says people must remember future of the industry,” he says. “As the only 100% NZ-owned farmer co-opera- that meat co-products such as casings and tive our whole reason is to make the best pelts make up a significant part of the meat possible returns for our farmer suppliers business.

“While there are some indications there and we need every link in the meat chain may be a slight improvement in these marto be making money.”

Meanwhile, Taggart says the outlook kets, unfortunately we do not see any great for beef looks to be less rosy than the past increases going forward.”

In regard to the SFF/Shanghai Maling couple of seasons.

“Beef prices have come off and we’ve merger, Taggart says some disaffected SFF probably seen the end of the high prices shareholders may come over to supply Alliance. “However, at this stage, there is no of the last couple of years,” he says.

However, the news is more positive on indication of a great tidal wave of farmers moving camp.” the venison front.

ASIA A GROWING MARKET THE ASIAN markets of Malaysia, Singapore, Japan and China are a growing and important market for NZ red meat, according to Alliance Group chair Murray Taggart.

Taggart, fellow Alliance board member Russell Drummond and chief executive David Suveryor recently returned from a two-week trip to these markets late last month.

He says Alliance has been in these markets for around 30 years, but nowadays is focussing more on developing one-on-one relationships with customers in each market.

But Taggart says while the Asian markets are important, the company is still determined to have a footprint around the world.

“We prefer to have a spread of markets as we don’t want to have all our eggs in one basket -- so to speak.”

Taggart says the rising numbers of affluent customers in Asia open up huge opportunities for NZ meat.

“They are wealthy and discerning customers,” he explains. “NZ meat offers grass-fed, hormone-free, outdoor-raised product which ticks quite a few boxes for these types of people.”

Taggart says China is a huge market and Alliance’s relationship with Grand Farms in that country has led the company to become NZ’s largest exporter of lamb to China.

“There is huge potential for NZ meat in China and the fact is you don’t trip over each other in this market. It is rare to see competing NZ meat in the outlets we are selling in and I’m guessing it’s the same for other NZ companies in China.”

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RURAL NEWS // OCTOBER 4, 2016

8 NEWS

TPP not dead yet!

OH CANADA!

NZ’s special agricultural trade envoy Mike Petersen recently completed two weeks of talks in Canada and the US advocating for the TPP and trade. He tells David Anderson politics dominate, but TPP is definitely moving forward.

“TO PARAPHRASE Mark Twain: ‘reports of the TPP’s death are greatly exaggerated.’ ” So quips NZ’s special agricultural trade envoy Mike Petersen.

Petersen recently returned from a trip to Canada and the US where he gave a push towards ratifying the TPP in both countries.

He met with politicians, business people, sector groups, farm leaders, staff and advisors for congressmen and senators.

He claims that commentary about TPP being dead is over-simplifying the debate.

“TPP is definitely not dead in spite of the rhetoric being thrown around during the US presidential electioneering debate in the US,” Petersen told Rural News.

“True, there is fervent discussion about the benefits of trade and the wider integration of global economies. However, TPP has

Petersen says US business strong support from key business sector leaders and there is a strong groups and companies are increaspush to ratify TPP during the ‘lame ingly concerned about the US duck’ period later this year [and “losing Asia-Pacific”.

“They realise Asia-Pacific is early next] in the US. the fastest growing “I remain comregion on earth and pletely confident failure to ratify and that even if TPP does join TPP will effecnot pass in the ‘lame tively remove them duck’ period, it will from this market be passed by the next opportunity in the US president, though future,” he explains. this will take more “The geo-political time than is desirMike Petersen tug-of-war between able.”

Petersen says the benefits of the US and China is forefront in the TPP deal for the US are com- this thinking in the US. There is widespread recognition that failpelling.

“While the politics of the debate ure to ratify TPP would effectively about TPP in the US suggest it is hand Asia-Pacific to China.”

Petersen says people should not dead, it is not. I reiterate that US business groups are strongly sup- underestimate how strong a driver portive [of TPP] in order to secure this is in the US. “And there is now no doubt that greater access and influence in the all the other 11 countries will sign Asia-Pacific region.”

TPP,” he adds. “Japan is well on the way to ratifying the TPP. The US is the only country where this is at risk. The big question is whether the others would sign without the US and [so without] the opportunity to integrate with the large domestic market of the US. “In my view this is entirely possible and the addition of other countries could happen quite quickly. This would be a major setback for the US in the Asia-Pacific region.”

Petersen says the anti-TPP rhetoric coming from the US presidential contenders is largely political.

“I have no doubt that following the US election, the next president will find a way to ensure the US continues to integrate with the wider world. Closing the borders and trading among themselves will not drive the US forward in the future.”

MIKE PETERSEN says the Canadians are still right on board the TPP. “The new Trudeau-led government strongly supports trade, even though they did not negotiate TPP on behalf of Canada.”

He says the Canadians are expected to ratify the TPP once the US has committed to do so.

Meanwhile, Petersen says the protectionist policies of the Canadian dairy industry were raised at every meeting he attended, “one of the main reasons for my visit to Canada and it remains a real concern, but it is a long and complex story”.

Petersen says Canada has a system in place for five commodities commonly referred to as ‘supply management’ (SM). Dairy is one of these commodities and it affects New Zealand the most.

“Under SM, production is set at a level to meet demand within Canada and quotas are allocated to ensure this happens,” he explains. “Prices are fixed using a model that ensures farmers receive a price sufficiently above the cost of production to be profitable. Then as a double whammy, import tariffs are set at a level so high that it is prohibitive for exports to enter Canada.”

Canadian consumers pay for all this in the price of their dairy products and farmers get about double the world price at any given time.

“Consumers have no choice, because you can go to jail for importing milk across the border from the US. I am not joking. This is good old protectionism by a powerful, well-organised and well-funded supply management lobby.”

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RURAL NEWS // OCTOBER 4, 2016

NEWS 9

LIC directors in for pay rise SUDESH KISSUN sudeshk@ruralnews.co.nz

LIC DIRECTORS set to get a 1.5% pay rise at the annual meeting this month.

The chairman’s fees will rise by $1725 to $116,725; each of the nine directors will be paid $48,212, a rise of $712.

Recommending the rise to shareholders in the notice of annual meeting, the LIC honoraria committee says the role and business of LIC differs from those of other companies.

It says the speed of technology change, mergers and acquisitions and the international markets all bring risk and complexities to the business; health and safety, listing rules and financial market legislation also have a big impact on the business and responsibilities of an LIC director.

“It is imperative that LIC maintains a highcalibre of director on its board particularly as it enters a period of significant change for the company,” the committee says.

“Elected directors bring a strong understanding of the cooperative shareholder base and the New Zealand market, and appointed directors bring skills in international markets, merger and acquisitions, health

and safety, technology, finance and risk and complex business.”

The committee agreed an increase in the base honoraria for the LIC chair and directors would be appropriate because no rise had been granted the directors for two years; to maintain parity with other organisations the committee recommended the increase, though it “acknowledged the current economic environment dairy farmers are facing”.

The committee also reviewed the shareholder council chair’s remuneration, recommending a rise of $2500 to $27,500.

It noted that the LIC shareholders council differs from the Fonterra shareholders council, and is unique in how it represents LIC’s 10,400 co-op shareholders.

“In recent times the role of the shareholders council chair has increased significantly and is now more in line with the workload of a Fonterra councillor.

“In particular, the review of LIC’s capital structure has increased the council chair’s involvement on behalf of shareholders. So an increase of $2500 pa in the council chair’s honoraria is appropriate.

“Councillors, in particular the chair, spend much time away from their own

businesses when a constant focus is required in tight times.”

There is no change to fees paid to the deputy chair and councillors.

The annual meeting will also vote on a oneyear extension to the term of appointed director Phil Lough.

Lough joined the LIC board in 2002; he chairs the remuneration and appointments committee and the recently established capital structure review committee.

The board and shareholders council have recommended Lough’s reappointment so they can

utilise his expertise and experience in business restructure and transformation and to retain his knowledge of LIC and its current structures, the need for LIC to transform how it operates and the review of LIC’s capital structure.

Lough is a former

OH CANADA! FROM PAGE 8

Recent developments in Canada are a worry, he says. Changes proposed to SM could markedly affect global dairy markets for some products.

“My visit was to gain greater understanding of what effect these changes might have on NZ exports to various parts of the world. The short answer is that we remain concerned, but until the proposed changes take effect in Canada we cannot form a definitive view.”

Petersen says his visit was useful to reinforce the view that Canada needs to ensure any changes to domestic policy don’t spill over into international markets where NZ has a significant portion of global trade.

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deputy chief executive of the NZ Dairy Board and chief executive of the Sealord Group. He is now a professional director. He has worked in the dairy industry in roles including farm ownership, executive roles in dairy businesses and as a director.

Lough is currently chair of Methven Ltd and Port of Nelson Ltd; he has also been a director of a number of companies.

The annual meeting will be held at LIC on Wednesday, October 19, starting 10.30am. @rural_news facebook.com/ruralnews

RURAL NEWS // OCTOBER 4, 2016

10 NEWS

Rural services company has a good year PAM TIPA pamelat@ruralnews.co.nz

STRENGTH IN beef cattle, horticulture and real estate helped offset Wrightson Ltd (PGW) a tough year for the parts

of the business exposed to dairy.

PGW says it made after-tax profit of $39.6 million in the year ending June 30, 21% up on the previous year.

The company lifted

benefit of having diverse exposure in agriculture.

“While New Zealand dairy and our South American business have traded through a challenging period, other areas such as the

earnings growth for a third consecutive year, to $70.2 million from $69.6m in the previous year.

Chief executive Mark Dewdney says the company is showing the

horticulture sector in New Zealand are doing very well.

“The parts of our business most exposed to dairy, such as water, have had a tough year.

However, a buoyant

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PGW chief executive Mark Dewdney.

market for beef cattle helped livestock offset the reduced market for dairy cattle and provided a strong finish to the year.”

Fruitfed Supplies, the company’s supplier to the horticulture and viticulture sectors, and its Agritrade wholesaling business, helped retail increase earnings year-onyear, he says. Real estate had good year with growing sales in the lifestyle and horticultural markets.

“Our seed and grain business benefited from the continued shift towards proprietary seed with better technical performance,” he says.

“This trend, and improved performance by our Australian seed business in 2016, resulted in a strong result for our seed and grain group.

“South America was hit hard by a combination of low commodity prices, high rainfall and flooding in Uruguay in April.

Despite these headwinds, our South American activities contributed positively to the group result.”

Improving value for customers helped boost market share, and product mix improvements and internal cost efficiency also led to profit gains, he says.

PGW chairman Alan Lai says the board is pleased the performance of the company “has led to an outstanding financial result given market conditions”.

“The progress PGW has made since 2013 is worthy of praise. In three years PGW has grown operating earnings before interest, taxes, depreciation and amortization by around 50%.

“Our balance sheet remains strong and the investments we’ve made over the year will prove crucial.”

AUSSIE BACKPACKER TAX REVAMPED THE AUSTRALIAN government is watering down its planned $500 million backpacker tax in a deal with National.

The move will please the Liberal Party’s coalition National colleagues who had campaigned against the measure during the country’s recent election. The country-based Nationals opposed the backpacker tax, which many of its farming supporters feared would affect their businesses.

Under the new deal, devised by Treasurer Scott Morrison and National leader and deputy-prime minister Barnaby Joyce, the plan to impose a 32.5¢ tax on all backpackers’ earnings, rather than earnings above the A$18,200 tax-free threshold, is modified.

Instead, a 19¢ rate will apply and the tax revenue foregone will be made up by a $5 increase in the passenger levy that applies to some international flights.

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RURAL NEWS // OCTOBER 4, 2016

NEWS 11

Rotorua dairy farmers to be paid to quit cows SUDESH KISSUN sudeshk@ruralnews.co.nz

THE EQUATION is simple for dairy farmers around Lake Rotorua: agree to reduce the nutrient discharges from your farms into the lake and collectively pocket $40 million.

The voluntary scheme had its first success this month: the Bay of Plenty Regional Council announced it had struck a deal with an unidentified dairy farmer (confidentiality is part of the deal).

The dairy farmer agrees to convert to dry stock support and cut feed and export it off farm. This deal will prevent 5.75 tonnes of nitrogen from entering the lake.

The council expects to achieve 100 tonnes of nitrogen reductions via voluntary land-use change.

It is one of four schemes underway to prevent 320 tonnes of nitrogen entering Lake Rotorua by 2032.

The Lake Rotorua Incentives Board has the task of negotiating with landowners; its chair, Rotorua chartered accountant Judith Stanway, is confident of more deals in the coming weeks.

“We are close to finalising another deal and we hope to announce it before the council’s term ends,” she told Rural News.

Stanway expects more farm-

ers around Lake Rotorua to reach agreements now that the first deal has been announced.

She reports a mixed reaction from farmers.

“The fact that the rules are not completely established at this point has meant some are holding off and waiting... for the first deals to happen.

“Now that we have announced the first deal, I expect a lot more interest.”

Stanway says the board’s negotiations with the dairy farmer were “quite prolonged”; both parties had issues to sort.

“But the farmer was good to deal with; both parties were focussed on getting the best deal for the landowner.”

Improving the health of Lake Rotorua is a top priority in the region. Apart from being important to tourism and local residents, the lake has the most landowners in its catchment.

Stanway says farmers understand the importance of cleaning up the lake.

“The quality of the lake is the primary concern and they understand change must occur, though they may not like it.”

Stanway says the board is determined to reach the 100 tonne target.

“We are going to get it, and there’s $40 million to go back

CLEANING THE LAKE ❱❱ 100 tonnes of nitrogen reductions will be achieved via voluntary land use change; $40 million is available to compensate landowners ❱❱ 140 tonnes of nitrogen reductions will be achieved via regulatory rules ❱❱ 30 tonnes of nitrogen reductions will be achieved via voluntary gorse conversion ❱❱ 50 tonnes of nitrogen reductions will be achieved via engineering initiatives.

into the catchment. That’s a good thing and I’m sure farmers don’t want that to go begging.”

The board is talking to eight other farmers around Lake Rotorua.

“We have begun negotiations with eight other landowners which could mean up to 28 tonnes of nitrogen secured by the end of the financial year.”

Regional council chief executive Mary-Anne Macleod says the landowner’s decision to engage with the Lake Rotorua Incentives Board and convert to a lowernutrient farm system is a big step towards sustaining the lake water quality.

Lake Rotorua Incentives Board chair Judith Stanway.

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RURAL NEWS // OCTOBER 4, 2016

12 NEWS

Big fine for employment law breaches

The Labour Inspectorate says farmers can expect random visits to ensure they are meeting all of their employment obligations.

A TARANAKI dairy farm has been fined $87,000 for employment breaches in a case reflecting the Labour Inspectorate’s intolerance of negligent employers.

The Taranaki dairy farm will pay at least $87,000 for serious

employment law breaches following a Labour Inspectorate investigation, including $64,000 in arrears and a $23,000 penalty issued by the Employment Relations Authority (ERA).

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been paying his employees their minimum wage entitlements nor their correct public holiday pay.

The Labour Inspectorate told Rural News it is randomly visiting dairy farms across the country and all farmers should be prepared for a visit, says regional manager Natalie Gardiner.

However, she says, farmers who are compliant have nothing to worry about.

“The inspectorate has given farmers plenty of warning, and has worked with industry organisations to provide additional support,” Gardiner says.

“Farmers know their obligations, but they’re just not meeting them, which is extremely disappointing. All farmers must meet their obligations as employers.

“This is the law, and it is not an option to ignore it. If they do not meet their employment obligations, the inspectorate will not hesitate to fine them.”

In the Taranaki case, the ERA has directed that discussions between Allan Marx, of Vintage Farm Trust, and employees, continue. Marx accepts that he owes arrears because he had not paid minimum wages or public holiday pay. The issue was complicated by Marx not keeping records

of employees’ hours or copies of employment agreements.

“It is unacceptable for employers to take advantage of employees by failing to meet basic legal requirements like paying the minimum wage or keeping proper records,” says Gardiner.

“This case perfectly illustrates the risk farmers take when they don’t keep sufficient employment records.

“Keeping records of the days and hours your employees work is a longstanding legal requirement in New Zealand which we expect every employer to meet; ignorance is not an excuse for breaking the law.”

The investigation was also marred by allegations of bullying: two employees were pressured into signing an agreement to settle their claims for $8500, well below the amount Marx later admitted they were entitled to.

Marx had not correctly paid his employees for working on public holidays, opting to give an extra $50 instead of their minimum entitlements.

The $64,000 in arrears paid so far have gone to the five employees working on the farm at the time of the inspectorate’s investigation, and to six former employees.

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FEDERATED FARMERS is urging farmers to correctly keep employee records and contracts.

Feds’ Taranaki provincial president Bronwyn Muir says it is essential farmers keep up-to-date contracts and wage and time records for all employees.

“Agriculture needs to attract a good quality, motivated workforce to drive productivity gains and to improve performance,” Muir says.

“So farmers need to provide workplaces which will attract those people.

“Getting the basics of employment law right is the foundation of an attractive work environment.”

Feds offers legally compliant contracts and employment agreements, available for members and non-members to buy.

“Legislation changes over time and it’s important to keep on top of changes and keep everything up-todate,” Muir says. “We have contracts, templates and policies available.... It’s better to pay for advice and be compliant than pay a fine.

“We need to be compliant for the good of the industry and those who work in it.”

She says any farmer unsure whether their records and documents are compliant should get advice immediately.

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RURAL NEWS // OCTOBER 4, 2016

14 NEWS

The Polish are coming!

In what many would see as a classic case of exporting coals to Newcastle, the Polish meat industry is looking at New Zealand as a potential export market. It has embarked on a two-year campaign to promote Polish pork, beef and products to NZ and four other countries – South Africa, Taiwan, Singapore and Kazakhstan. David Anderson reports.

UNDER THE auspices of the Union of Producers and Employers of Meat Industry (UPEMI) and the Polish Association of Beef Cattle Breeders (PZPBM), an information and promotion campaign entitled ‘The taste of quality and tradition directly from Europe’ was developed in July 2015 to promote and market chilled or frozen beef, pork and their products originating in the European Union.

According to Agnieszka Rozanska, managing director of UPEMI,

the European Union has one of the world’s highest standards for the production of beef, pork and products.

“Apart from food safety, one EU priority is to cultivate local traditions and customs,” she told Rural News.

“The use of traditional methods of production of European cold meat enables the creation of varied products of unique taste and aroma.”

Among these traditional and regional pork and beef products are

sausages, hams, brawn, gammon, bacon, pork fat, pork chops, liver sausage, black pudding, smoked bacon, smoked sirloin, pâté, leg, knuckle and neck.

Rozanska says the Polish meat industry is very modern with most of the country’s meat plants rebuilt to high, European standards over the past 10 years or so and this means it can actively seek new markets. Poland joined the European Union in 2004.

She says the latest

Bartosz Lenart

Agnieszka Rozanska

market push to the five countries – including NZ – follows UPEMI’s inaugural promotional campaign five years ago to the US, South Korea and Vietnam.

“We are not afraid of distance and are prepared

to seek new markets,” Rozanska says. “Our first campaign was very successful and we now see Poland as the second biggest exporter of pork to the US behind Denmark.”

But it is not all one way traffic; there may also be opportunities for NZ meat exports to Poland and beyond.

Country manager for Polish meat company Madej Wrobel Bartosz Lenart believes Poland provides an ideal “bridge” to get our meat to other countries in Europe.

“Poland has high standards, is affordable and is central to Europe, Russia, the Baltic States and Scandinavia,” he told Rural News.

Lenart also believes the many Poles living in other countries – Poland has 40 million people and as many again are believed to be living elsewhere – offer opportunities for NZ

meat products.

NZ is already a major exporter of beef to Poland – behind only the US and Australia – with annual exports in 2015 totalling $120 million for frozen product and $40m in fresh – up 26% and 22% respectively on the previous year.

Meanwhile, Lenart, in common with many other Polish meat companies, sees NZ as a lucrative market for Polish pork exports. Around 58% of pig meat consumed in NZ in 2015 was imported, meaning the percentage of local pork production fell from 50% only a year earlier.

However, fledgling Polish pork exporters to NZ were given clear instructions by NZ Trade’s European representative Katherine Clift that key requirements will have to be met to satisfy NZ’s stringent biosecurity

measures.

“It is crucial to understand that the NZ government and pork industry take biosecurity very seriously,” she told the seminar held by UPEMI. “Although PRRS (porcine reproductive and respiratory syndrome) has spread all over the world, NZ is free of PRRS; also with the potential outbreak of Asian swine flu (ASF) in the EU there is concern in NZ over the risks of importing product from areas where the disease is present.

“It is important that the Polish industry does everything it can to promote high health standards and co-operate with all measures to control and eradicate ASF,” Clift concluded.

• David Anderson travelled to Poland as a guest of UPEMI @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 4, 2016

NEWS 15

Speed dating European style IT WAS like speed dating as meat sector participants from five countries met their Polish counterparts at a seminar in Warsaw, Poland, last month.

The event, organised

by UPEMI and PABCB (see ‘Who’s who?’ below), saw around 25 delegates (meat traders, processors and exporters) from New Zealand, South Africa, Taiwan, Singapore and Kazakhstan meet members of the Polish meat industry to discuss the industry’s future and possible export co-operation.

It was all part of ‘The taste of quality and tradition directly from Europe’ – a meat promotion campaign aimed at increasing exports of Polish and European beef

and pork to the markets named above.

The seminar was just one event during a weeklong tour of Poland by the international delegation last month.

“The UPEMI has for years been [extensively promoting] the Polish beef and pork industries,” UPEMI president Wieslaw Rozanski told Rural News. “We hope the seminar will result in better relations, new trading contacts and an increase in meat exports to New Zealand, South Africa, Taiwan, Singapore and Kazakhstan.”

Rozanski says increasing Polish meat exports is a key objective of UPEMI. Some 30% of food produced in Poland is now exported to 70

countries. In 2015, Polish agri-food exports totalled 23.6 billion Euros – a 7.7% increase on 2014.

Polish trade with NZ is not small. In 2015, NZ exports to Poland were valued at US$122 million, while Polish exports to NZ

were US$72m, of which agri and food were only $US4.8m.

Rozanski sees opportunity to grow this trade between the two countries, especially in agrifood, biotechnology and environmental protection.

NZ delegation left to right: Chris Graham, Bidvest, Christchurch; Paul Ralph, Advance Marketing, Auckland; Magdalena Bajer, UPEMI; Ken Thomas, Bidvest, Rotorua; Zaneta Kijanowska, UPEMI; David Anderson, Rural News Group and Trent Millns, BX Foods, Oamaru.

WHO'S WHO? The Union of Producers and Employers of the Meat Industry (UPEMI) is a trade association representing entities from throughout the Polish meat industry – breeding and slaughter through to processing and exporting. UPEMI’s task is to promote the European meat industry worldwide.

The Polish Association of Beef Cattle Producers (PACAB) provides Polish beef producers with support from government, non-government organisations and the EU. PACAB’s primary purpose is to support and develop cattle farming in Poland.

‘EUROPEAN MEAT – tradition, quality and taste’ is an information and promotion campaign about beef, pork and food products made in the European Union.

The campaign is a joint effort of the Union of Producers and Employers of the Meat Industry (UPEMI) and the Association of Polish Beef Cattle Producers (PZPBM). It began in July 2015 and is set to run until July 2017, focused on Kazakhstan, Singapore, Taiwan, New Zealand and South Africa.

UPEMI says its main aim is to increase exports of European pork and beef to these markets and raise knowledge and awareness of European meat – its tradition, high production standards and strict EU requirements.

The campaign is also intended to grow trade and influence between the European Union and these five target markets, as represented by two main target groups: Present and future importers and representatives of meat sector organisations linked to food imports in dedicated markets; Journalists and opinion leaders and representatives of institutions associated with the meat trade.

The campaign is funded 50% by the EU, 30% by the Polish government and 20% by the Polish beef and pork sectors.

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RURAL NEWS // OCTOBER 4, 2016

16 NEWS

Canty irrigation scheme presses on CANTERBURY IRRIGATION scheme Central Plains Water (CPW) irrigation says the second stage of its proposed development will now go ahead.

The company says it has received “unanimous support” of at least 200 shareholders for starting work on the 20,000ha

Derek Crombie says.

“The decision, reached at a recent special meeting, has given the board and staff the mandate to proceed with the $250m construction and funding of the project subject to negotiation of acceptable commercial terms.”

Crombie says stage two differs from what

stage, due to be finished

by September 2018. At the same time the 4250ha Sheffield scheme will also be built.

“While preliminary design work has already begun on both projects, the main construction will not hit peak until the middle of next year,” CPW chief executive

was originally planned, in scale and construction methodology.

“Originally we were going to build the scheme in three stages and continue the canal across the Canterbury Plains towards Sheffield. But we are now using a buried pipeline and will lay about 21km of 2.5m to 1.6m

glass-reinforced polymer pipe linking to a further 184km of [plastic] pipes to take the water to farm gates. Fourteen pumping stations will also be built.”

Crombie says CPW will not take water from the Waimakariri River for stage two as originally planned because it can CPW chief Derek Crombie.

source water from Lake Coleridge.

“Very little extra capacity has been built into each pipeline, so it is imperative that those wanting to purchase further shares do so now, otherwise it could be too late. We cannot retrofit extra capacity.

“The other good news is that at all the three stages, mixed farming systems (dairy, sheep and beef, arable and some dairy support) will be the predominant land uses.”

The total CPW scheme (stages one and two and Sheffield) will cost $400m and cover 50,000ha.

“The scheme will provide significant environmental benefits by replacing current groundwater abstraction with

very reliable river water sourced from the Rakaia and Lake Coleridge catchments. Stage one of the scheme has already replaced 75% of the groundwater abstraction in that area and the same is expected in the next stages,” Crombie says.

“Already we are starting to see benefits in the stage one area with bore levels remaining steady, even during drought.”

About 360 shareholders have paid $90 million towards the CPW scheme, supported by funding from the Ministry for Primary Industries irrigation acceleration fund, short term loans from the Selwyn District Council and construction funding from CPW’s banks ANZ and Westpac.

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NEW ZEALAND has the kind of innovative agritech businesses that interest farmers in Ireland, says NZ’s UK ambassador Sir Lockwood Smith.

Speaking to Rural News at the Irish National Ploughing championships recently, Smith said the Irish know innovation is crucial to a sustainable future for their farming industry, so R&D is very important there.

“Irish and NZ farmers have individual concerns about markets, but there is a lot of room for working together as NZ has done with US sheep producers.

The similarity of farming systems between Ireland and NZ should help foster greater cooperation.”

Smith says while Brexit remains a hot topic, especially in Ireland, it is too early to predict how the issue will pan out.

“The British government is exploring a range of approaches to the EU. We are working with them closely because of our experience in international trade negotiations. We are seen as a world leader in trade liberalisation, so the UK government is looking to us for help.”

A key issue to be resolved is whether or not the UK will have a customs union with the EU and what that could mean to trade with other countries.

• See more on page 50

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RURAL NEWS // OCTOBER 4, 2016

18 NEWS

Irish anxious about Brexit PETER RURKE peterb@ruralnews.co.nz

BREXIT HAS thrown up huge uncertainty for farmers within and outside the European Union (EU), says the president of the Irish Farmers Association

(IFA), Joe Healy.

A dairy farmer from country Galway, with a strong New Zealand connection, Healy is regarded as a plain speaker and an excellent commentator on farming issues.

He told Rural News, in

Ireland, that discussion on Brexit takes place in a vacuum of uncertainty because no one knows what the terms of Britain’s exit from the EU will be.

In Ireland this has created huge uncertainty in the beef sector, he says.

“We have also seen processors take advantage of the Brexit and the move in currency; they are trying to drop prices way below what could be justified,” he explains.

“The beef market for Ireland is very important.

Irish Farmers Association president Joe Healy.

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prices and taking the the government keeps We have also seen an place of Irish lamb on coming back to us with increase in dairy cow supermarket shelves in another referendum till numbers, and as the use the UK in particular. of sexed semen increases. we give the result they But criticism of NZ want or Europe wants,” As farmers move for the has largely waned, says Healy said. latter animals in their Healy, mainly because “But to me this herd – towards Angus, NZ does not fill its quota seems unlikely. The fear Hereford or Limousine to the EU. But this may I have is that the EU sires – that will increase soon change. the number “A lot of our of beef cattle lamb goes into in Ireland. So “From a European France, which is getting markets and especially an a very important for those will be market for us. a critical issue.” Irish perspective, Healy says international trade deals We shift as much lamb as possible the British early in the year market is critical are critical. And within to Ireland. these we cannot afford so we are not in competition with He notes that to have agriculture as the UK because 90% of all beef the sacrificial lamb.” when they come in Ireland is on-stream it puts exported and a lot of downward Britain, with its pressure on price. will try to play hardball 60 million population, “From a European and put in place laws buys at least half this, and especially an Irish that discourage other bringing in $1.8 billion perspective, international countries getting ideas dollars a year. trade deals are critical. about following the UK.” Hence the anxiety And within these we For many years NZ about Brexit. cannot afford to have lamb exports drew harsh “Some people hope agriculture as the criticism from Irish there may be another sacrificial lamb.” farmers who considered referendum. Here in the cheaper frozen Ireland, if we don’t get @rural_news lamb was driving down the result we want, facebook.com/ruralnews

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RURAL NEWS // OCTOBER 4, 2016

NEWS 19

Kiwi experience for new IFA boss IFA boss meets up with a member at the Irish Ploughing Champs.

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AS PART of Fonterra’s plan to ‘disrupt’ the dairy industry, it is holding a Dragons’ Den type competition to back e-commerce and digital start-ups, says chief executive Theo Spierings.

“We have invested a lot of money in disruption; we want to be disruptive in this industry,” he says.

“We are in pole position [in regard to competitors], we are fit, we show good results and we are going to be disruptors of this industry. We need to be because things are going to change very, very fast.”

Fonterra is challenging its young and older people to come up with business ideas preferably based on e-commerce and digital because that is where the disruption takes place, he says.

It has at least 110 teams applying, so there was a ‘Dragons Den’ type event in Shanghai with the ex-chief executive of Alibaba, Spierings and a group looking at business ideas.

“We selected five good ideas which we are putting in an accelerator,” Spierings says.

They have 90 days to work on their plans and a demo day will be held on October 13 and specific start-ups chosen.

“Then we will decide which idea will be funded.

People can have their own start-up company within our company – in a protected way, in an incubator.”

Fonterra is yet to decide whether it will fund the start-ups completely or attract outside investment.

Spierings says e-commerce and digital need to be treated as a disruptive power, not just a route to market, as most companies see them. “Trust me we are working on that.” – Pam Tipa

the next two months, but honestly I wouldn’t be putting my money on my team; but then we live in hope.”

• Peter Burke travelled to Ireland courtesy of Enterprise Ireland.

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JOE HEALY has been in the top job only a few months.

The genial Galway dairy farmer was swept into office in April after a major upheaval and controversy involving his predecessor and the executive and senior staff of the IFA. He came not from the hierarchy, but from grassroots farming and has been elected to sort out major administrative problems.

Healy runs 100 cows on his 50ha farm at Athenry, a town steeped in Irish history, including the 1916 uprising. He runs a grass-based system with the emphasis on producing milk as cheaply, and as high in protein and fat, as possible.

Because of his new role, the fields of Athenry are something he seldom sees.

Healy’s happiest memories are of 1988,

of NZ rugby but would love to see Ireland beat the All Blacks.

“Unfortunately Brian O’Driscoll failed to in his career – but we are still hoping. We have to play the All Blacks twice in

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a year he spent in New Zealand – a great experience “I first worked on a dairy farm in Manaia, South Taranaki, and went from there to Canterbury where I worked on a farm at Hinds, which had border dyke irrigation.”

He also worked on a Putaruru, Waikato, farm and lastly for a drainage contractor in Wellington.

“It was the best year of my life – the freedom of it all.”

Back in NZ again in 1996, he represented Ireland in the world sheep shearing championships in Masterton -- another great month, and the Golden Shears an incredible event.

“What is great here in Ireland is that our Ivan Scott recently set a world lamb shearing record,” he says. “A few Kiwis are not too happy about an Irishman taking a world shearing record. He only beat the record by one, but it was a record all the same.”

Healy is a great admirer

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RURAL NEWS // OCTOBER 4, 2016

20 NEWS

Edendale back on track post fire NIGEL MALTHUS

MILK COLLECTIONS at Fonterra’s flagship Edendale factory are now back to normal after the catastrophic collapse of a

large milk silo last month.

Although major parts of the plant remain out of action, Robert Spurway, chief operating officer global operations, says Fonterra is balancing milk across the South Island,

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and will communicate directly with farmers if there is any further affect on their collections.

A five-storey milk silo, representing about 10% of the plant’s milk storage, collapsed suddenly on September 16, smashing though a gantry carrying steam pipes. The incident was first widely reported as an explosion because of the noise of the collapse, which neighbours say was followed by about 30 minutes of the sound of steam escaping.

Investigations into the cause of the collapse were underway.

“Our Edendale D4 dryer and milk protein concentrate plant may take some time to reinstate, but we have expert engineers working on a plan,” Spurway said.

Fonterra teams would keeping farmers informed of expected collection delays and let them know of any need to dispose of milk. Where disposal was needed, they had worked with farmers and councils to ensure this was managed appropriately.

Federated Farmers Southland dairy chair Graeme McKenzie says Fonterra handled the incident well.

About 100 farmers were affected, but the interruption was only one pick-up, or about four milkings.

McKenzie says the season worked in farmers’ favour because many farmers had replacement calves to raise, so the uncollected

milk went straight into their feeding vats.

“If it had been a different time of year they would have had to look at either dumping it through their effluent systems or finding other people who may have had other uses for it, to pick it up and take it offfarm.”

McKenzie says he is unaware of any farmer suffering serious difficulties. All have proper effluent handling systems so milk dumping would have done no harm to the environment.

He expected Fonterra to reimburse the affected suppliers, but calculating the financial consequences would be complicated because of the time of year, with milking herd numbers changing daily as cows come into milk.

“They were good at coming out and making farmers aware of what they could and couldn’t do and how they would be reimbursed. The specifics aren’t quite out yet but it was clear they would be doing that.”

Established in 1881, Edendale is believed to be New Zealand’s oldest manufacturing site and is Fonterra’s largest, processing 15 million L of milk a day at peak season. It produces 350,000 tonnes of milk powder, 60,000 tonnes of anhydrous milk fat, 5000 of tonnes of cheddar cheese, 4000 tonnes of mineral acid casein and 1000 tonnes of whey cheese a year.

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RURAL NEWS // OCTOBER 4, 2016

22 NEWS

SFF deal gets OIO tick-off SHANGHAI MALING’S application to buy a 50% stake in Silver Fern Farms has at last been approved by the Overseas Investment Office.

SFF had sought official approval for the $261 million joint venture deal after the vast majority of its farmer shareholders backed it. Minister for Land Information Louise Upston announced the approval late last month.

“The Overseas Investment Office recommended that we approve Shanghai Maling’s application because it meets the criteria set down in the Overseas Investment Act 2005,” Upston said.

“We are satisfied that the investment will be of substantial and identifiable benefit to New Zealand, which is the test set out in the act. The investment will put the company in a better financial position and allow it to increase its exports.

“NZ shareholders will continue to have 50% ownership of Silver Fern Farms, while benefiting from the injection of funds by the new investor.”

Finance Minister Bill English said

SFF shareholder farmers thought it was a good deal, which he believed was a good test.

“It’s a deal that’s been tested by the shareholders of Silver Fern farms a few times, so ministers have seen fit to agree with the recommendation.”

Shanghai Maling’s $261m purchase of half the business was approved by 82% of SFF shareholders last

October. A meeting called by dissident shareholders in August this year did not change the farmers’ minds; at least 80% still backed the sale.

SFF says it welcomes the OIO’s approval to create a 50/50 partnership with Shanghai Maling.

“The proposed investment is now unconditional and is set to be completed on January 4, 2017, the first

business day of the new financial year for the partnership.”

SFF chair Rob Hewett believes the new partnership will create a unique opportunity, “making Silver Fern Farms financially the strongest company in the NZ meat industry, able to confidently invest in our business”.

Hewett says he is looking forward to the partnership at last getting

MERINO MEAT BRAND SOLD SILVER FERN Farms has sold its 50% stake in the Silere Merino meat brand to the New Zealand Merino Company (NZM).

Prior to the sale, SFF jointly owned Alpine Origin Merino Ltd with NZM. The company was set up five years ago as a joint venture between NZM and Silver Fern Farms to own the Silere alpine origin Merino brand and to fund the development and marketing of the branded Merino meat range. NZM is now the sole shareholder in Alpine Origin

Merino Ltd. “When we set out, we needed to prove that Merino meat could be differentiated as luxury [product] and that the value created in the market could be delivered to grower suppliers,” NZM chief executive John Brakenridge says.

“Silere alpine origin Merino has been built into a successful brand and product for the food service market mostly in NZ and the US. The intention is for Alpine Origin Merino to continue to develop and build the

brand in niche markets globally.”

SFF chief executive Dean Hamilton says it makes sense for NZM to have taken charge to develop the Merino product range.

“Our focus today is on our Silver Fern Farms brand and we are looking to create our own branded premium lamb range for food service, which is not breed specific,” Hamilton says.

“So it can be sourced from a wider group of our shareholder suppliers, consistent with our Silver Fern Farms premier selection reserve beef range.”

SFF chair Rob Hewett.

underway in the new year, and Shanghai Maling president Wei Ping Shen says he is also pleased.

Hewett says when the deal is complete in January, SFF will pay all holders of ordinary and rebate shares a special dividend of 30c per share, expected to be paid before March 31, 2017.

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RURAL NEWS // OCTOBER 4, 2016

24 MARKETS & TRENDS MARKET SNAPSHOT Me at

BEEF MARKET TRENDS

No rth Is lan d C h an g e c /kg

c /kgCWT

L as t We e k

S o u th Is lan d C h an g e c /kg

L as t We e k

L amb - PM 16.0kg

+10

5 .9 8

+10

5 .5 8

S te e r - P2 300kg

-5

5 .6 0

n/c

5 .5 0

B u ll - M2 300kg

-5

5 .3 0

n/c

4 .9 5

Ve n is o n - AP 60kg

n/c

8 .8 0

n/c

8 .8 5

c/kgCWT

Change

Last Week

2 Wks A go

Last Year

-5

5.60

5.65

6.10

M 2 B ull - 300kg

-5

5.30

5.35

5.70

P 2 Co w - 230kg

-5

4.25

4.30

4.55

M Co w - 200kg

-5

4.25

4.30

4.55

Lo cal Trade - 230kg

- 10

5.75

5.85

6.10

n/c

5.50

5.50

5.90

M 2 B ull - 300kg

n/c

4.95

4.95

5.10

P 2 Co w - 230kg

n/c

4.15

4.15

4.10

M Co w - 200kg

n/c

4.15

4.15

4.00

Lo cal Trade - 230kg

n/c

5.60

5.60

5.90

NI

P 2 Steer - 300kg

SI

P 2 Steer - 300kg

$6.5

$5.5

5yr Av e 26-Jul

26-Aug

Last Year 26-Sep

26-Nov

SI Lamb

M utto n

5.96

5.86

5.91

+10

5.98

5.88

5.93

P X - 19.0kg

+10

6.00

5.90

5.95

P H - 22.0kg

+10

6.01

5.91

5.96

M X1 - 21kg

n/c

2.80

2.80

3.30

YM - 13.5kg

+10

5.58

5.48

5.56

P M - 16.0kg

+10

5.58

5.48

5.58

P X - 19.0kg

+10

5.58

5.48

5.60

P H - 22.0kg

+10

5.58

5.48

5.61

n/c

2.68

2.68

2.90

M X1- 21kg

N ort h Island Weekly Lamb Kill

100k

10k

5yr Ave

$6 .5

$6 .0

26-Jul

Last Year

26-Aug

26-Sep

26-Oct

5yr Ave

k 19 Jun

This Y ear

19 Jul

26-Nov

5yr Ave

$5 .0 5yr Ave

26-Jul

26-Aug

Last Year

26-Sep

This Y ear

26-Oct

26-Nov

Last Year

19 Sep

This Y ear

19 Oct

19 Nov

200k

S outh Island Weekly Cattle Kill

20k

Last Year

19 Aug

S outh Island Weekly Lamb Kill

250k

$5 .5

Last Year

150k

20k

k 26-Jun

2 Wks A go

+10

50k

S outh Island 16.0kg M Lamb Price

Last Week

200k

30k

This Year 26-Oct

M utto n

Change

P M - 16.0kg

250k

N ort h Island Weekly Cattle Kill

40k

$5.0

c/kgCWT NI Lamb YM - 13.5kg

Slaughter

Slaughter

$6.0

$4 .5 26-Jun

LAMB PRICES

BEEF PRICES

No rth Island 16.0kg M Lamb Price

$4.5 26-Jun

LAMB MARKET TRENDS

150k

This Y ear

100k

15k

50k

10k

k 19 Jun

19 Jul

19 Aug

19 Sep

19 Oct

19 Nov

5k

No rth Island 300kg Bull Price

k 26-Jun

$6 .0

26-Jul

26-Aug

26-Sep

26-Oct

Export Market Demand

26-Nov

Change

$5 .5

Export Market Demand

$5 .0 $4 .5 5yr Ave

$4 .0 26 -Jun

$6 .0

26 -Jul

26 -Aug

Last Year

26 -Sep

This Year

26 -O ct

26 -No v

S outh Island 300kg Steer Price

Change

Last Week

95CL US$ /lb

-4

2.06

2.10

2.56

2.33

NZ$ /kg

-9

6.24

6.33

8.86

6.60

Last Year

5yr A ve

D e mand Indicator - US 95CL B eef

$3.00

$5 .5

2 Wks A go

Last Week

2 Wks A go

Last Year

5yr A ve

UK Leg £/lb

n/c

1.85

1.85

1.55

1.85

NZ$ /kg

+10

8.50

8.40

8.78

8.54

D e mand Indicator - UK Leg Price

£2.50 Last Year

£2.00

This Year

£1.50 £1.00 26-Jun

$2.50

26-Jul

26-Aug 26-Sep 26-Oct

26-Nov

$5 .0

$2.00

$4 .5 $4 .0 $3 .5 26 -Jun

5yr Ave

26 -Jul

26 -Aug

Last Year

26 -Sep

This Year

26 -O ct

Procurement Indicator Last Year

$1.50 26-Jun

26-Jul

This Year

26-Aug

26-Sep

26-Oct

26 -No v

Procurement Indicator $9 .0 $8 .5 $8 .0 $7 .5

5yr Av e Last Year This Year

$7 .0 $6 .5 $6 .0 26 -Jun $9 .0

Change

2Wks A go

3 Wks A go

Last Year

% Returned NI

+0 %

85.7%

85.3%

64.35%

73.3%

% Returned SI

-0%

79.3%

79.8%

57.6%

65.9%

No rth Island 60kg S tag Price

26 -Jul

26 -Aug

26 -Sep

26 -O ct

26 -No v

S outh Island 60kg Stag Price

90% 85% 80% 75% 70% 65% 60% 26-Jun

5yr A ve

2Wks A go

3 Wks A go

Last Year

5yr A ve

% Returned NI

- 0 .8 %

70.6%

71.4%

67.8%

74.3%

% Returned SI

- 0 .2 %

64.7%

64.9%

63.8%

72.2%

P rocu rement Indicator - North I. 80% 70% 60%

P rocu rement Indicator - North I.

50% 11-Jul

Last Year This Y ear

26-Jul

26-Aug

26-Sep

26-Oct

26-Nov

$8 .5

Last Year

11-Aug

11-Sep

This Year

11-Oct

11-Nov

11-Dec

P rocu rement Indicator - South I.

80% 70% 60%

$8 .0 $7 .5 $7 .0

5yr Ave

$6 .5

Last Year

$6 .0 26 -Jun

Change

26-Nov

This Year

26 -Jul

26 -Aug

26 -Sep

26 -O ct

26 -No v

85% 80% 75% 70% 65% 60% 55% 26-Jun

P rocu rement Indicator - South I.

Last Year

50% 1-Jul

1-Aug

1-Sep

This Year

1-Oct

1-Nov

1-Dec

Venison Prices Last Year

Change

Last Week

2 Wks A go

Last Year

5yr A ve

NI Stag - 60kg

n/c

8.80

8.80

8.30

7.79

SI Stag - 60kg

n/c

8.85

8.85

8.50

8.10

This Year

26-Jul

26-Aug

26-Sep

26-Oct

26-Nov

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

RURAL NEWS // OCTOBER 4, 2016

MARKETS & TRENDS 25 NEWS

PRICE WATCH

BEEF: Cattle slaughter prices have come under pressure over the past fortnight. Prices have eased across the board, and we expect there will be continued pressure on cattle prices going forward. Bull and cow prices have been the worst affected. However, it is worth noting that based on the level of returns made from overseas markets, processors are still paying well above normal levels. Processor margins for prime are better than manufacturing, but processors have indicated they still need to see prices lower than current levels.

With pasture growth rates accelerating each week, demand for store cattle is only firming in the North Island. Some buyers are waiting for some correction to the overheated store prices, but it may be slow in coming. Numbers traded through the South Island have varied week-to-week, but as a whole the market remains firms.

INTERNATIONAL BEEF: The US

imported beef market has continued to ease recently. Imported beef returns have come back around 6% over the last month, driven by lower in-market prices and the strength of the NZ dollar. There is a large volume of domestically produced beef in circulation through the US, cooling interest in NZ product.

Competition from pork and poultry also remains a barrier to better beef returns.

Their relative cheapness compared to beef is weakening demand for beef at a consumer level. Reports suggest that the first shipment of beef has already left Brazil for the US since it gained access a couple month ago.

WOOL PRICE WATCH Change

22-Sep

15-Sep

Last Year

Indicators in US$/kg

Coarse Xbred

+4

4.74

4.70

4.78

Coarse Xbred

Fine Xbred

-5

4.89

4.94

5.26

Fine Xbred

Lamb

-

-

-

6.25

Lamb

Mid Micron

-

8.40

-

10.56

Mid Micron

Indicators in NZ$

SHEEP: Competition for lamb has

remained strong. Many processors are beginning Christmas chilled production and competitive pressure will remain firm through this period. Most processors are now teething some, if not all, lambs that come in. There have been reports of a few early teeth appearances. The number of store lambs trading each week has continued to ease back in the North Island. What demand is out there, is focused on the very short term lambs.

The South Island market has been a mixed bag, though lighter lambs have gradually lost some of their appeal.

Ewe lambs 32-40kg have made as much as $126-$132 at Temuka.

There’s been good interest in ewes with lambs at foot so far. Top lines have made $80-$85 all counted in the North Island, while similar types are more like $75-$80 all counted through the South Island.

Wool Indicator Trends

850

CXI

750

FXI LI

650

450

22-Sep

15-Sep

Last Year

+6

3.48

3.42

3.81

n/c

3.59

3.59

4.30

-

-

-

-

-

6.17

-

6.68

Change

Wool Indicator Trends

550

CXI

500

FXI

450

LI

400

550

350 Sep

Nov

Jan

Mar

May

Jul

Last Year

600

300

Sep

Nov

Jan

Mar

May

Jul

Coarse Xbred Indictor in US$

Coarse Xbred Indicator

650

450 This Year

400

550 350

500 450

Last Year

Oct

Dec

Feb

Apr

Jun

Aug

88

The Rabobank difference

93

Overseas Wool Price Indicators

%

The average time our Rural Managers have worked with us

300

Oct

Dec

Feb

Apr

This Year

Jun

Aug

of our Rural Managers own or grew up on a farm

%

100

%

of customers would definitely recommend Rabobank*

of Rabobank deposits directly fund NZ agribusiness

*TNS NZ Brand Health Survey 2015

running business management programs for farmers years of global agricultural history

global agribusiness research analysts sharing market outlooks

RURAL NEWS // OCTOBER 4, 2016

26 AGRIBUSINESS

Europe cutting back milk production SUDESH KISSUN sudeshk@ruralnews.co.nz

MORE SIGNS are emerging that European farmers are cutting back milk production.

According to Fonterra’s latest global dairy update, EU production in June fell 2% on the same month last year -- June being the first month since March 2015 that production has fallen vs the same period last year.

Fonterra says more culling, less supplementary feeding and poor weather contributed to the decrease.

The largest EU producers -- UK, France and Germany -- are down 7%, 3% and 1% respectively. Production for the 12 months to June is up 4% vs the same period in the previous year.

Last week Fonterra surprised everyone by raising its milk price by 50 cents to $5.25/kgMS; with forecast earnings per share now 50-60 cents, the total payout available to farmers will be $5.75-

$5.85 before retentions.

Fonterra chairman John Wilson notes that since the co-op’s last review in August, global milk supply has kept falling and demand has remained stable.

“Milk production in key dairying regions globally is reducing in response to low milk prices. Milk production in

the EU for 2016 is beginning to flatten out and our New Zealand milk collection is currently 3% lower than last season.”

ASB rural economist Nathan Penny says Fonterra is coming around to the bank’s view sooner than they expected.

“Specifically, our view is that dairy mar-

kets have fundamentally shifted. In particular, farmers have changed behaviour in response to low milk prices by lowering production.”

Penny expects more production weakness to show this year.

“With that in mind, we expect prices to stabilise over the short term, before

EU EXPORTS BOOM EU DAIRY exports rose 6% in May (22,000MT) vs the same month in the previous year.

Fonterra says increases were seen in all major dairy categories, excluding SMP which fell 27%.

The EU’s two largest export categories, fluid and fresh dairy and cheese, both rose 17%. Exports are up 12% (551,000MT) for the 12 months to May vs the same period last year. Export increases are seen in fluid and fresh dairy (+27%), cheese (+12%) and whey powder (+11%).

US dairy exports in June rose 2% (4000MT) vs the same month in the previous year. A fall in the major export categories of SMP, lactose and cheese were offset by rises in whey powder, WMP and WPC/WPI, up a combined 16,000 MT.

Asia (excluding China) dairy import volumes rose 7% (25,000MT) in May vs the same month the previous year.

Significant rises in fluid and fresh dairy and whey powder (+26%) and WMP (+20%) were partially offset by falls in SMP, cheese and lactose. Imports for the 12 months to May are up 2% (91,000MT) vs the same period in the previous year.

China dairy imports rose 9% (16,000MT) in July vs the same month last year. Big rises in fluid and fresh dairy and cheese, both up 37%, were partially offset by falls in SMP, whey powder and lactose.

The largest contributions to China’s growth have been fluid and fresh dairy and infant formula.

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lifting again later in the season. As a result, we continue to expect a finalised milk price of $6.00/kgMS for 2016-17.”

US production in July increased 1% vs the same month last year. Milk production for the 12 months to July has increased 1% vs the same period the previous year. The US Department of Agriculture forecasts that milk production for 2016 will be 1.9% up on 2015.

Milk production in NZ for July was 1% up on the same month last year. NZ milk volumes are coming off the low point of the season; volumes will keep rising for several months.

Australian production in July -- the first month in the 2016-17 production season -- fell 10% vs the same month last year.

Fonterra says milk production in the current season has been hit hard by the cut in Australian milk prices to align with global dairy prices. Production for the 12 months to July is down 3% vs the same period the previous year.

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Helping grow the country

RURAL NEWS // OCTOBER 4, 2016

AGRIBUSINESS 27

Fonterra claims No.1 spot in China PAM TIPA pamelat@ruralnews.co.nz

FONTERRA IS numberone in China in business and in reputation, claims Fonterra chief executive Theo Spierings.

“We have just gone to the number-one position in China when we measure our reputation,” he says.

Fonterra’s market share is 11% -- 5 billion L sales in a market consuming 45b L of milk per year.

“When I [refer to] share in litres of milk sold in China by our ingredients, consumer and food service business, we are by far number-one,” Spierings said at the release

of the annual results last week.

In food service Fonterra has gone from zero in 2011, to 400m L in 2013 and now 1b L of milk of high added value.

“All the milk comes from New Zealand so that is massive value creation for our farmers.”

Spierings says Fonterra is building its partnership with Beingmate, the co-op’s first priority because China is its top market.

“A whole lot of things have changed in China… the regulations will change drastically.

The regulations will say that each legal entity in China can have only three

brands with three recipes.”

That may eliminate about 1800 of the country’s 2000 brands in the next 15-18 months.

“You need to have a local partnership in China to be in the game. That is the strategic rationale.”

Spierings believes investing in a listed

company in China will give Fonterra a dividend.

But most important for the company is the global supply agreement with Beingmate and the necessarily huge volume of NZ milk. They also have the Darnum joint venture in Australia for which the co-op just got approval from the Chinese

authorities.

Beingmate is a “massive partnership” which is tapping into Fonterra’s entire strategy and its milk hub strategy, Spierings says.

Chairman John Wilson says China inventories and demand growth are back to normal levels. The co-op’s business in China

is an integrated strategy with many facets and on balance the business is performing well there, he says.

“The China farms business has been through a significant period of growth with the two main farming hubs completed and operating well.”

However, the Chi-

nese business has been hit by very low global dairy prices, as have NZ farmers.

Wilson says now that milk has reached critical mass, Fonterra is confident it will integrate into the Chinese consumer and food service business. @rural_news facebook.com/ruralnews

WINDFALL FOR RURAL VICTORIA SUDESH KISSUN sudeshk@ruralnews.co.nz

RURAL REGIONS in Victoria, Australia, are in line for nearly A$1 billion for infrastructure and irrigation projects.

This results from the Victoria state government getting a A$9.7 billion windfall from leasing the state’s port operations to Lonsdale Consortium for 50 years. The port is Australia’s largest.

Farm roads are getting a A$25m facelift, A$200m will be spent on agriculture infrastructure and job funding and A$3 million is going to help build cattle underpasses.

Victoria farmers also want irrigation upgraded, water pipelines for livestock producers, better freight rail lines and the elimination of mobile phone black spots.

Victoria premier Daniel Andrews says the state has promised to lease the Port of Melbourne, and to give regional and rural communities the support and funding they need to prosper.

“We are putting people first with dedicated funding from the lease going to regional and rural Victoria, helping to create jobs and ensure our state stays number one for food and fibre.”

Victorian Farmers Federation president David Jochinke says the money will help grow the economy by keeping farmers and export supply chains competitive.

Jochinke said the VFF will work to ensure key priorities for rural communities are addressed.

“Our support for the sale has always depended on the state government ensuring theses issue are addressed and the port remains competitive. Now we need to make sure the new leaseholders keep the port efficient and costs for port users down.”

Victoria treasurer Tim Pallas encouraged farmers to apply for the grants; funding will be available from December.

Dairy and beef farmers around Victoria can apply for grants of up to $50,000 to enable them to move stock across their properties unhindered by dangerous road crossings, particularly during peak milking times. Cattle underpasses improve safety for all road users and boost workplace safety for farmers, their families and employees.

Pallas says agriculture is at the the heart of the economy, employing 190,000 people.

We’re open for business just up the road.

Wherever you are and whatever you’re farming or growing, you’ll never be far from one of our stores.

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PGG Wrightson.

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Helping grow the country

RURAL NEWS // OCTOBER 4, 2016

28 AGRIBUSINESS

Lincoln’s new agricultural hub seen as the future NIGEL MALTHUS

THE LINCOLN Hub agricultural science centre has passed a big milestone with an official launch at Lincoln last month.

The event, attended by about 50 people, marked the first public function for the newly appointed hub.

Chairwoman Sue Suckling unveiled its branding including the name He Puna Karikari, bestowed by the local rananga, Te Taumutu.

The name is a metaphor for exploration, cultivation and leadership in land, water and natural resources. Puna means a spring or source, and karikari means cultivation.

The hub plan, signed by the Government in 2014, puts together several agricultural research and commercial entities in one place to collaborate in basic and applied agricultural science.

It has five founding shareholders: Lincoln University, AgResearch, Landcare Research, Plant & Food Research, and DairyNZ, and expects to attract others as it grows and develops. It will also seek wider collaborations, internationally and with other NZ entities including Te Hono Movement, Callaghan Innovation and Food HQ .

Concept plans being developed by Christchurch architects Warren and Mahoney envisage a

62,000m3 facility, the first stage to be completed in 2019. Staff and scientists would work in physical clusters arranged by the science being done rather than the entities they work for, to help remove barriers to communication.

Suckling took on the chairing of the hub on July 1. An experienced businesswoman with strong ties to the science and agricultural sectors, she has an honorary doctorate in science from Lincoln University.

She told last week’s launch that the board of Lincoln Hub has formalised the entity’s purpose as a gateway for business, and an industry-led organisation in

agricultural solutions, education and collaborations that create value – tangible and intangible.

She says it will connect organisations to promote sustainable agribusiness solutions through collaborations, partnerships, technology and testing environments, adding value to producers, businesses and scientific expertise, and providing unique education opportunities.

“Over the coming couple of years the Lincoln precinct will grow to a huge concentration of 900-plus agricultural scientists, representing a significant resource.”

Suckling says the Hub will be of value to the Canterbury region and

NZ, as a specialist network and innovation cluster involving businesses, research and education. It is strengthened by having a research university at its core, making education a key part of its focus.

“We aim to facilitate sustainable solutions to agricultural problems and opportunities, through growing an innovation precinct at Lincoln and a global agricultural science network. This will enable the commercialisation of new ideas into products and services, while capitalising on NZ’s world-leading reputation in agriculture.”

Suckling says Lincoln Hub is talking to several international businesses interested in research and educational.

Sue Suckling speaks at the hub launch event at Lincoln on September 8.

“We expect such partnerships to directly benefit Canterbury and NZ. This will come about through Lincoln Hub assisting organisations to find the best team to develop and commercialise science and research innovations for the benefit of the agricultural sector, improving productivity and competitiveness.”

Suckling says in developing Lincoln Hub’s purpose, the board was inspired by innovation

clusters overseas, including Wageningen University and Research Centre in the Netherlands and Norwich Research Park in the United Kingdom.

“Overseas examples have shown that when you bring industry, research and education together, it creates an ideal environment for innovation.... Lincoln will draw on international best practice and help increase NZ’s global profile as a leader in agribusiness innovation.”

A LONG RECORD SUE SUCKLING is a fellow of the NZ Institute of Directors with 20 years of directorships in agriculture, marketing, electricity, education, health, banking, science and technology, manufacturing, education, service sectors and communications.

She is the chair of Callaghan Innova-

tion, ECL Group, Barker Fruit Processors, Jacobsen Holdings Ltd and NZQA, and is a director of Sky City and Restaurant Brands.

She has previously chaired NIWA and AgriQuality NZ, and been a director of GNS Science and Antarctica NZ and a member of the Takeovers Panel.

RURAL NEWS // OCTOBER 4, 2016

AGRIBUSINESS 29

Rural confidence rebounds – survey IMPROVED DAIRY sector expectations see New Zealand farmer confidence surge higher New Zealand farmer confidence in the agricultural economy has risen for the second consecutive quarter and is now at its highest level since 2013, the latest Rabobank Rural Confidence Survey has shown.

Almost half of all farmers surveyed were expecting the rural economy to improve in the coming 12 months resulting in overall net confidence shooting up to a reading of +35 per cent from +three per cent last survey.

The survey – completed earlier in the month – found the number of farmers expecting the rural economy to improve had risen to 48 per cent (up from 25 per cent last quarter), 37 per cent were expecting it to remain the same (down from 52 per cent), while only 13 per cent were

expecting the agricultural economy to worsen (down from 22 per cent).

Rabobank New Zealand general manager for Country Banking, Hayley Moynihan said the jump

ing is also a reflection of how low confidence in the agricultural economy has been over the past two years contributing to confidence reaching neardecade lows in several

Almost half of all farmers surveyed were expecting the rural economy to improve in the coming 12 months. in confidence recorded in the latest survey was largely attributable to farmers’ expectations that commodity prices – particularly for dairy products – have begun to ascend from the bottom and will continue to rise over the next 12 months.

“Since the last survey, in July, three consecutive increases in Global Dairy Trade (GDT) results have lifted commodity prices by 25 per cent and given those involved in the dairy sector a much-needed boost. The big jump in the overall confidence read-

survey results during this period.”

The improved outlook for the rural economy as a whole was also reflected in farmers’ expectations for their own business performance over the next 12 months.

Overall 44 per cent of the country’s farmers expected their business to improve over this period, with 16 per cent expecting business performance to worsen. This resulted in a jump in the net reading for this measure to +28 per cent (+18 per cent previously). Dairy farmers

were the primary driver of this increase, recording a net positive reading of +57 per cent (up from +nine per cent previously).

“On top of dairy farmers vastly improved expectations for their own businesses, the survey also signalled a potential lift in milk supply for the coming season with 31 per cent of dairy farmers expecting their production to increase and only 15 per cent expecting it to fall in the 16/17 season,” In contrast to the increasing optimism amongst dairy farmers, the expectations of sheep and beef farmers for their own business performance in the coming 12 months dipped.

“The net reading for sheep and beef farmers on this measure fell to +two per cent, back from the +22 per cent recorded last quarter,” Ms Moynihan said.

“This result was not wholly unexpected as,

Hayley Moynihan, Rabobank General Manager for Country Banking

despite lamb prices rising in both the North and South Islands, and farmgate beef prices remaining steady, the high New Zealand dollar is currently providing a challenging trading environment for the sheep and beef sector.”

Horticulturalists expectations for their own business performance also fell, but remain at elevated levels.

“A net reading of +26 per cent was recorded by horticulturalists this survey from +47 per cent previously,” Ms Moynihan said. “This result is well back on last quarter, but the confidence amongst horticulturalists in their own business is still

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ment intentions amongst all farmers.

“The survey showed 42 per cent of horticulturalists are expecting their farm investment to increase in the coming 12 months with only 11 per cent expecting farm investment to decrease,” she said, “and this result reflects the optimism horticulturists have about the returns they will receive for their product this season.”

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relatively high as it has been for a number of consecutive quarters.”

“Export gains in the horticulture sector have been the standout performer for the New Zealand economy in recent years, and expectations are again high for strong returns this coming season, particularly for pip fruit and gold Kiwifruit.”

Ms Moynihan said horticulturalists continued to have the strongest invest-

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RURAL NEWS // OCTOBER 4, 2016

30 OPINION EDITORIAL

EDNA CLASSIC CARTOON

Change needed AS LAMB producers face another year of barely profitable returns, it’s clear something needs to change.

All the consumer and market reports reveal that New Zealand lamb is a well-regarded, highly sought-after and top-end product yet prices have at best flatlined over recent years.

A serious change is needed and we are now seeing change happening in the sector, but will it mean better prices?

The SFF/Shanghai Maling merger – much to the chagrin of MIE and its isolationist political supporters – is now a done deal and it offers a huge opportunity for NZ in the world’s biggest market.

The Alliance Group is already well set up in China, where it has had a presence since the mid1990s, and is now NZ’s largest supplier of lamb to that country.

Meanwhile, news that a new market development strategy devised by Beef + Lamb NZ (BLNZ), for targeting new and emerging markets, will have at its heart the story of NZ farming and its farmers is positive.

At the heart of this strategy is the closure of BLNZ offices in the UK, South Korea and Japan, and instead a focus on developing new and emerging markets. BLNZ says it will keep an office in Brussels – the centre of trade negotiations for Europe -- and in China, which is now a premium market for NZ meat.

Chairman James Parsons says the new strategy should not be seen as a sign that BLNZ is “walking away from the familiar markets” -- far from it, because the meat companies will maintain these via their long-established relationships.

As Labour’s primary industries spokesman Damien O’Connor says, the shift in BLNZ’s strategy is positive in that BLNZ will not be spending resources on duplication and “wasted competitive practices”.

Silver Fern Farms chief executive Dean Hamilton agrees that the change is a rational one and says there’s general agreement on it.

Let’s hope this new strategy will start paying dividends for farmers.

EDNA CLASSICS THE MORE observant among our readers will notice today’s cartoon is an old classic that Edna creator and cartoonist Malcolm Evans has redrawn especially for this issue.

Evans is now re-drawing many Edna cartoons from the early days – in colour and totally re-configured – which we plan to run in Rural News as Edna CLASSICS every now and then.

Many readers will never have seen some of these cartoons before; others will have Edna favourites. We invite you to submit your favourite Edna for ‘Classic’ treatment. Send these to editor@ruralnews.co.nz with Edna Classic in the subject line

RURAL NEWS HEAD OFFICE POSTAL ADDRESS: PO Box 331100, Takapuna, Auckland 0740 PUBLISHER: Brian Hight .............................................. Ph 09 307 0399 GENERAL MANAGER: Adam Fricker ........................................... Ph 09 913 9632 CONSULTING EDITOR: David Anderson .......................................Ph 09 307 0399 davida@ruralnews.co.nz

THE HOUND

Want to share your opinion or gossip with the Hound?

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

Gotcha!

Good call

Say what?

The truth

YOUR OLD mate realises that most politicians can’t lie straight in bed, let alone tell the truth; Labour’s workplace relations spokesperson Iain Lees-Galloway is the latest example of this. The former unionist, in a press statement last week, was quick to put the boot into the Talley’s-owned meat company AFFCO, claiming it was advertising for staff in Manawatu through the Ministry of Social Development, while its union workers remained locked out due to continuing strike action. However, it seems AFFCO pulled Lees-Galloway up on his porky, so the little-heard-of MP hastily had to publish a retraction and apology only hours later, admitting his claim was a work of fiction. And politicians wonder why nobody trusts them.

THE HOUND was sure there would be unsubstantiated, overthe-top, reality-free reaction from NZ First leader and Member for North Korea (whoops, Northland) Winston Peters on the decision by the OIO to approve the SFF/Shanghai Maling merger.

True to form, Peters bleated on with the end-of-the-world-aswe-know-it type of crap he is renowned for. However, your old mate reckons the best reaction to the career politician’s ill-informed diatribe came from ACT MP David Seymour, who savaged the old war-donkey in a statement calling for people to “Ignore Winston’s paranoia over Silver Fern Farms sale.” As Seymour rightly pointed out, “Peters’ call for intervention over the partial sale of a private company proves he is unfit to be in Government.” Exactly!

THIS OLD mutt has been around the traps a few years now, but reckons the latest claptrap coming out of Fonterra has got to be the biggest load of bull effluent he has heard in a long time. The latest buzzword coming out of Fonterra’s fancy new HQ in downtown Auckland is ‘disruption’. Apparently, the shiny suits at gumboot castle have all been challenged to find the next ‘game-changing’ idea or product via the co-op’s new innovation programme ‘Disrupt’.

Really? How about they forget all that trendy market-speak and just do their jobs? ie sell more dairy products at better prices.

Simple really.

YOUR CANINE crusader was delighted to see his good mates at Bitch & Complain (Fish & Game) calling on fishers to ‘enjoy the country’s reputation as a freshwater fishing nirvana’ with the start of the new trout season on October 1. “New Zealand offers world class fishing, in our lakes, rivers and streams from the shoreline, riverbank or boats,” skited Fish & Game NZ communications manager Don Rood in a media release. How refreshing it is to see the messages from the fishing lobby actually being positive about the country’s waterways and fisheries.

It’s a different story from the relentlessly negative spin Bitch & Complain usually puts out about the state of NZ’s waterways. The Hound hopes this change of story is more about the facts rather than just a cynical attempt by the lobby to garner funds by selling more fishing licences.

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RURAL NEWS // OCTOBER 4, 2016

OPINION 31

A damn load of emotional effluent Ill-informed rubbish. It would be an investment yielding THE RUATANIWHA 6.5% per annum and water storage scheme after 70 years the saga has gone far beyond community would own soap opera territory: a $370 million asset. A fantasy has long since review of the project by replaced fact, the noisy Deloitte (HBRC minutes, quashing any sense.

July 8 2016) gave it the Here are some thumbs-up. What does examples. Serial antiWilliams know about the RWSS crusader Grenville dam that we don’t and Christie claims riparian when will he share that planting stops only information with the phosphate from entering Tim Gilbertson public? the waterways (CHB Mail meeting two months his office and asked Anyone can act like Sept 20). Incorrect. It earlier, clearly indicating Winston Peters and fire stops virtually everything for evidence but, like widespread support Greenpeace, he could a machine-gun from an except nitrogen. for the dam – and provide none. Dunne’s armchair. Not one of Filtering improves widespread indifference spokesman said he these critics has come water quality, in some towards politics. And that up with a better idea. cases by up to 80% within thought the article was is informed comment based on information Lucerne and onfarm a few months. Nitrogen unswayed by three years from someone in storage have been enters the rivers via Canterbury, but he wasn’t of biased speculation. suggested. Lucerne groundwater, so riparian These people sure. is hardy but it needs planting is ineffective. water; building But nitrogen will be dams where little severely limited by rain falls is like Plan Change 6, so Filtering improves water quality, running a pub Grenville can rest with no beer. The easy. in some cases by up to 80% anti-dam lobby Greenpeace within a few months. Nitrogen is an example claims the dam enters the rivers via groundwater, of massive, will destroy rivers unremitting one(‘Dodgy dam will so riparian planting is ineffective. sided spin, almost destroy rivers’ says But nitrogen will be severely limited complete devoid of a blog on its website factual backing.

by G. Toop, June

by Plan Change 6, so Grenville There is a 24, 2016 ). When I can rest easy. strong likelihood phoned Ms Toop the dam will be to enquire which kyboshed by rivers the dam would On the contrary, Dr the incoming HBRC destroy – the Tukipo? the recognise that irrigating John Hayes, Cawthron councillors after the Papanui? the Waipawa?

25,000ha responsibly Institute, has published elections on October 8. If – she didn’t have a clue. will revitalise and research on improving so I wonder whether in a When I suggested Plan benefit the whole water quality. Southland decade or so, when global Change 6 would improve region as it has done in Fish and Game manager warming has really kicked the rivers, she said she Canterbury. They agree Zane Moss says it is in and all our Hawkes had never heard of it. with Waitaki district “outstanding in an Bay mokopuna are Greenpeace has mayor Gary Kircher who international context” trekking off to Melbourne campaigned ceaselessly said, “Waitaki district and will have global or Europe, how these against the dam on is buzzing as irrigation significance. Hayes knockers will feel. the grounds that it plays its part in driving concludes, “In New I suspect they won’t would inevitably lead business opportunities….

Zealand, regional care. They will be to intensive dairying There are plenty of councils may need watching Real Housewives and more pollution. To knockers... but we are to revise upwards of Auckland and oiling say that the dam would going places largely due their guns, getting ready inevitably have that effect minimum flows and to irrigation” (Irrigation water allocation limits to ping off the next is like saying that anyone NZ News, winter 2016). downward” (NZ Farmer, inspired idealist who who owns an axe will There is general June 27, 2016). That is pops up with an idea inevitably become an axe agreement that exactly what the dam that might help the bank murderer. It is nonsense. climate change and scheme proposes. balance, the planet and Greenpeace, once environmental misuse A recent survey in the children of the future. a standard bearer for means water is the new Central Hawkes Bay integrity, now resembles ‘gold’. Yet Mike Williams, • Tim Gilbertson was showed 72% of urban chairman of Waipukurau the bogeymen they a high profile Aucklander respondents were keen Federated Farmers, mayor oppose. and former president on the dam (Crowd Count, of the NZ Labour Party, of Central Hawkes Bay Cabinet minister Sept 2,3, 2016), and 400 and a member of Hawkes Peter Dunne says it is writes that the dam is, people attended a proBay Regional Council. He a fact that the dam is “a massive gamble with dam rally in Waipawa last ratepayers’ money” (HB is standing again for the widely rejected locally HBRC. and will inflict significant November.

Today, Sept 3, 2016). He Meanwhile, only seven goes on, “I will be rattling environmental damage people had attended (Baybuzz magazine, many cages in this @rural_news a council annual plan June 20, 2016). I phoned election.” facebook.com/ruralnews

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RURAL NEWS // OCTOBER 4, 2016

32 OPINION

Trade rules for agriculture are fair for all NATHAN GUY

FOR NEW Zealand as a small and remote nation, international engagement and trade are major priorities.

We are committed to being at the forefront of global efforts to improve the global trading system for the benefit of everyone. For us, having consistent, enforceable rules – and forums within which we can debate them – is not a ‘nice to have’. It is essential.

Of course, trade rules reflect the balance of interest of the countries that set them: only those at the table reap the benefits the rules afford. This is particularly true of international trade in agricultural products.

At the multilateral level we see that the negotiation functions of the World Trade Organisation (WTO) remain as relevant as ever. The agreement reached last year to eliminate all export

subsidies on agricultural products represents a momentous decision that will benefit producers worldwide.

The WTO also provides the only avenue for negotiating rules in important areas not covered in FTAs, such as domestic support. Domestic subsidies are coming more into focus worldwide in developing and developed countries.

The value to member countries of the WTO’s legally binding dispute settlement function also cannot be overstated, because it provides for the resolution of market access, export competition and domestic support issues that would otherwise be unresolvable.

On global trade the world finds itself in a situation where the benefits of trade liberalisation have never been more obvious, yet opposition is more apparent than ever.

In NZ, as in the US, there is an ongo-

Nathan Guy

ing tension between those who want to engage fully with the world, and those who oppose greater interconnectedness, including through preferential trade agreements.

Our experience is that open, rules based trade has made NZ richer, more innovative and more secure; our trad-

ing ties strengthen relationships with partners in all regions.

NZ’s farmers remain internationally competitive, despite having no tariffs of consequence and receiving no trade distorting subsidies. For example, in the 1980s we had about 70 million sheep; now we have only 30 million.

Yet importantly we still produce the same amount of sheep meat thanks to advances in animal husbandry, genetics and nutrition.

The removal of subsidies and support for domestic farmers in the 1980s was a painful time for many, but now I don’t believe you’ll find a single farmer in NZ who wants to go back to the old model.

The bottom line for NZ is that international trade has allowed us to develop new markets, create jobs, grow our economy, raise standards of living and stay competitive. This is why we need international trade and common rules to reduce trade barriers and market distortions.

• This comes from a speech given last month by Primary Industries Minister Nathan Guy to the Global Leaders Forum on Agriculture and Trade in Omaha, Nebraska, USA.

RURAL NEWS // OCTOBER 4, 2016

OPINION 33

Co-operative model vital to NZ CRAIG PRESLAND

THE COOPERATIVE business model has stood the test of time and thrives worldwide; New Zealand is an outstanding example of its enduring success.

With member ownership and sustainability at its heart, the co-operative business model goes back almost three centuries to its origins in the UK. In NZ our first known recording of a cooperative was in 1844 in Riwaka, near Nelson as local roads were being designed and built by early settlers. In addition our first known dairy cooperative was formed on John Mathieson’s dairy farm on Otago Peninsula in 1871 and is part of what we now know as Fonterra.

NZ now has at least 100 registered cooperative businesses and organ-

isations. Together, their annual revenues exceed $43 billion – almost 15% of our GDP. Globally there are an estimated 2.6 million co-operatives that turn over at least $US3 trillion a year and employ 250m people.

Cooperative members are usually either suppliers or customers of their organisation although some overseas co-operatives are owned by their staff.

The business model is reasonably simple: benefits are provided to members either on the basis of volumes supplied and/ or the amount of business transacted with the organisation. In the case of volumes supplied, an initial (opening) price is paid for products such as milk, meat and horticultural products by the organisation at the beginning of the financial year

and a final payout is made at the end of the year once annual returns are finalised.

With consumer-owned co-operatives, prices for products (such as building products or fertiliser) or services (such as banking or insurance) are charged to customers and a year-end rebate/ dividend is paid back to customers once annual returns are finalised.

The Cooperative Companies Act 1996 requires that only 60% of voting rights are to be held by transacting shareholders which, therefore, provides a generous level of capital raising options. Cooperatives are able to raise funds from their members, from publicly issued debt securities such as debentures, from private debt, banks and retained earnings.

In recent years Fon-

Craig Presland

terra has listed on the NZX and has differentiated between supplying shareholders (members) and external investors who are able to buy units on the NZX, the latter not being suppliers of milk and having no voting rights.

The cooperative business model is based on economic, social and environmental sustainability.

Cooperatives, enduring and successful for decades or even centuries, offer stable employment – at least 43,000 jobs in NZ

are co-op jobs, critical to social and economic wellbeing.

Of Cooperative Business NZ’s (CBNZ) full members, 70% have been in business at least 25 years and three are 100 years old or more, including Fonterra (by way of its preceding co-ops) at 145 years. The dairy giant is NZ’s largest organisation by far, having succeeded for decades despite fluctuating market conditions, including its recent challenges from high global milk supply volumes, low commodity prices and over the past 12 months a strengthening NZD against the USD. Fonterra’s endurance, and the ability of the dairy industry to ride through market downturns, is a reflection of the strength of the cooperative business model.

It would appear that light

is now beginning to shine on the horizon with the rise in whole milk powder prices (a key indicator) to almost $US3000/tonne and Fonterra’s latest farmgate milk price forecast for 2016-17 to $4.75/ kgMS solids, up from $3.90 paid in 2015-16, and $4.40 paid in 201415. (As a reflection of the strong variability that can eventuate year on year, a record $8.10 was paid in 2013-14.)

Cooperative organisations, large or small, serve their members by succeeding commercially while observing the key cooperative principle: concern for community (social responsibility).

One only has to look at the quality of the top three nominations for our recent CBNZ to gain an understanding of how Kiwi co-operatives give back to local communities

each year: Farmers Mutual Group with its Farmstrong scheme supporting farmers working through tough times, Foodstuffs South Island with its support for people struggling since the Canterbury earthquakes and supporting young people in education in the South Island, and Fonterra with its Milk in Schools scheme. These organisations care about their members, communities and NZ’ers.

NZ has the potential to lead the way globally in achieving all the 17 sustainable development goals, however a key factor will be our willingness and ability to work co-operatively with each other. We need to work smarter.

• Craig Presland is the chief executive of Co-operative Business NZ. @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 4, 2016

34 MANAGEMENT

New challenge in milking goats SUDESH KISSUN sudeshk@ruralnews.co.nz

SOUTH AUCKLAND farmer Hamish Noakes had no crystal ball four years ago when he pulled out of cow dairying and started milking goats. The 40ha family-run farm at Karaka was “just too small and milking 160 cows just wasn’t working”.

“I was always chasing my tail; I had a lot of leased blocks so I was always running around between leased blocks and running this farm,” Hamish told Rural News.

The family looked at goat farms in the Waikato, a similar-sized operation with “a balance sheet much better” than the cow dairy business.

“The family did a lot of thinking and researching and decided to make the switch; the environmental aspects of goat farming

particularly suited this farm on the Manukau Harbour.” Of the 750 goats, 80% are Saanen breed and the rest mixed herd.

But goat farming presented a new challenge. The old 16-bail rotary was converted into a 34-bail goat rotary platform – a ‘goatary’.

Milking the 750 goats took up to nine hours daily.

The huge workload prompted the family to build the new milking shed they had planned for, and two weeks ago Noakes, the family and staff started milking the goats on an 80-bail fully automatic ‘goatary’ from GEA Farm Technologies.

The European milking platform is the first of its kind in New Zealand.

Milking time has been cut in half and Noakes expects this to reduce further as the goats

Farmer Hamish Noakes has no regrets converting from cows to goat milking four years ago.

‘GOATARY’ A FIRST IN NZ GEA NEW Zealand says the goat rotary – ‘goatary’ – platform on Hamish Noakes’ Milkabit Farm is the first of its kind here.

Fully automated, the platform is designed specifically for goats; it comes with an integrated feeding system running five different feed allocations – handy on a farm with different flocks, says GEA product specialist Andy Geissmann.

“If you have different flocks, you can feed them different allocations at the milking platform.

“Farmers can also vary feed regimes on the platform depending on the weather, allocating different

feed during rain or cold.”

It also comes with a head locker that securely holds each goat in place and allows accurate reading of the animal’s ID tag.

Each bail has an individual stainless steel feed bin easily emptied or cleaned.

Milkabit Farm’s platform has a movable floor that can be raised or lowered depending on the height of the operator; it is 4.5m wide so the operator can work on several bails without having to step off the raised floor.

Entry boxes regulate goat flow through the shed, ensuring there

are no empty bails during milking and preventing goats crowding into bails.

Other features: ID tags are read in each milking stall and data is fed into a herd management system, an automatic wash system that facilitates plant cleaning, and glycol snap chilling of the milk to 4oC degrees before it enters the vat.

Geissmann says demand for goat milk platforms is very high; and he believes that GEA’s presence at Fieldays has helped.

“Since the Fieldays we have had stronger interest in both goat and sheep milking systems.”

something else. They are and the family but they become familiar with the cool animals but they are have no regrets. new shed. The time saved phantoms… you’re always He describes goats as will improve the quality trying to work them out”. “phantoms” that need of life and allow for farm A year ago improvements. He Noakes built hopes to take on a “The family did a lot of more managerial thinking and researching and a barn for the goats, having role and have more decided to make the switch.” grazed them time and energy on pasture for to develop a high three years while resource special attention. producing herd. consent was sought for “For us it was a good The farm employs the building; it was a move but you’ve got to two full time and two difficult time. be on the ball; things can part time staff, however The goats are fed change very quickly. You this is a hands on family pasture grown on the need to have your finger business. He is also farm; some brewers’ grain on the pulse 24/7.” planning to increase goat and pellets are bought in.

“For one day they numbers to 1000.

The pellets are used to might go off grass; they He says converting to entice goats to the milking just won’t eat that grass, goat farming has been a parlour. so you have to feed them huge challenge for him TO PAGE 35

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RURAL NEWS // OCTOBER 4, 2016

MANAGEMENT 35

Goat milking challenge FROM PAGE 34

Getting the goats adjusted to automatic milking wasn’t hard; after three days of “hard training” they were “flying through”.

“The goats come in and their heads are locked in a head clamp; every goat is tagged and is identified by the GEA milking machine; if the goat is still milking the head remains locked on and they travel round again,” says Noakes.

The Milkabit farm produces high quality milk daily and supplies to New Image Group Nutritionals; all milk is turned into infant formula for China and Southeast Asia markets.

Milk is collected once every two or three days by NIG Nutritional tankers, depending on factory schedule.

Milk is stored in a 15,000L Packo milk

vat from Dairy Cooling Solutions Ltd. The Packo vat keeps the temperature constant even with milk flow fluctuations; it’s horizontal shape provides greater area for cooling.

Dairy Cooling Solutions Ltd’s refrigeration sales engineer Kelly Larritt says the Packo vat is built to European standards, and “unlike what you can buy in NZ it is fully insulated”.

It comes with 100mm Eurothane insulation and even in a power cut up to 12 hours the milk temperature in the vat won’t exceed 3oC. “If the farm has a power cut the milk’s at 3.5oC and in 12 hours it won’t go any higher than 6.5oC. Hopefully in that time the power outage would be fixed.”

Noakes says he likes the new technology; now comes the challenge of

Goats are housed indoors all year round.

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learning it.

The plan to build a new shed was there right from ‘day one’ but he “decided to do it sooner and enjoy it rather than

waiting another 10 years.

I’m hoping this new shed will reduce the time spent milking and assist me in my goal of producing top quality milk.”

GEA’s 80-bail goatary is the first of its kind in NZ.

RURAL NEWS // OCTOBER 4, 2016

36 MANAGEMENT

Renewed velvetleaf campaign – MPI NIGEL MALTHUS

Last season’s velvetleaf infestation came from six lines of fodder beet seeds imported from Europe.

THE MINISTRY for Primary Industries is calling on farmers to be ‘Vigilant with a capital V’ for velvetleaf infestation as the new growing season approaches.

MPI velvetleaf incident

controller David Yard says some farmers who had velvetleaf on their properties last season took up MPI’s offer of helping them plan to manage the infestation, but many did not.

“We are negotiating with regional councils to

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contact all the higher-risk premises to make sure individual farm management plans are drawn up then implemented. We’re still working with farmers and regional councils to support those we know are contaminated.

“Any farmer aware they’ve had velvetleaf on their property need to be extremely cautious, even if they’ve identified it, and they need good on-farm hygiene practices. There’s plenty of advice on our website about farm management plans.”

Last season’s infestation came from six lines of fodder beet seeds imported from Europe by DLF Seeds and Science, the Christchurch subsidiary of a Danish seed distribution farmers’ co-op.

Yard says MPI is “extremely confident” contaminated importation would not happen again.

“I think we can put everyone’s mind to rest that any new seed lines that come in this season will be free of velvetleaf.

We know what the problem is, we’ve tightened up the import requirements and the contaminated seed lines themselves are banned from entry.”

In the off-season MPI visited all the relevant European authorities, made recommendations and tightened the import standards, Yard says.

“We have a much tighter control in place to prevent further contamination coming in. So the problem is not new seed lines, it’s the seed lines that were planted last year.”

DLF Seeds and Science expects to be selling new season fodder beet seed for sowing from about mid-October. Managing director Tom Bruynel says the protocols on preparing and cleaning seed in the factory in Denmark are much tougher.

“We’re confident about it because of everything that’s been done, right back to the paddocks and the weeding of the paddocks prior to harvesting the seed, that happened a couple of months ago.”

Bruynel says DLF is

also doing its own internal testing -- “vastly more” than MPI is doing – and has found no velvetleaf contamination.

However, Yard says MPI expects “quite a number” of new velvetleaf finds as stray seeds from plants which grew last season start to germinate in November and December.

Yard says MPI will not repeat the intensive “search and destroy” programme it did with other authorities last season, which was primarily aimed at the first two seed lines identified.

“Later in the season we became aware of another four seed lines, but it wasn’t possible given the timing to do a wider search-and-destroy so anyone who received these six seed lines remains at greater risk than the average farming population.”

Velvetleaf was identified on 252 properties, but Yard says there is likely to be farmers who, for whatever reason, missed it.

Yard says that because the fodder beet seed was imported in pelletised form it had been an arduous and expensive process testing it for velvetleaf seed. Each 5kg box contained 100,000 seeds which all had to be stripped and inspected by microscope.

“To put it into context, the level of contamination was extremely low.

In some cases it was as low as one seed per box,” he says.

“We’ve had to discover one seed in 100,000. But that one seed once it’s planted will produce one plant capable of producing 15,000 seeds, if they remain undetected this season.

“The saving grace is that the seeds are not generally windborne so it’s quite likely you’ll get an area of a few square metres of velvetleaf fairly intensively growing, which will make it easier to spot.”

Farmers can call the MPI helpline on 0800 809966. @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 4, 2016

38 MANAGEMENT 2016 Southland Ballance Farm Award entries Vince and Bella Ansley.

A chance to tell a good news story VINCE AND Bella Aynsley entered the Ballance Farm Environment Awards to tell a good news story about their industry.

“I’m a bit sick of the negative press farming gets,” he says. “The vast

majority of us are doing a good job considering the financial and environmental limitations we face.”

The Ansleys farm 1020ha Bushy Park, an 8000 stock-unit sheep and beef property at

A good start goes a long way.

Waimumu, west of Gore.

“It’s a beautiful farm and our family takes immense pride in the place,” he says.

The Aynleys entered the Southland awards for the first time in 2016 and won two category awards – including the Beef + Lamb NZ Livestock Award. The judges described Bushy Park as “efficient, profitable and well-managed – a top performing operation”.

Ansley says the award endorsed what they had tried to achieve.

“We were reasonably happy we were on the right track in the first place, but it was great to get that vote of confidence from the judges.”

But even if they hadn’t won a prize, he reckons entering would still be worthwhile.

“Opening the farm to five expert judges from all walks of life gave us a valuable outside view. Like

most farmers, I tend to plod away largely on my own and that can make you very inward thinking.

But having those judges take a hard look at your business for free is hugely beneficial.”

They learnt a lot from the experience, he says.

“It made me aware of the need to document more about the farm’s management, rather than just carrying things around in my head all the time. If something happened to me, I’d want Bella or whoever took over to have the ‘big picture’ information that will help them manage the place efficiently.”

He recommends the awards to other farmers as “a great way to showcase the positive things happening out there.

They also help farmers learn more about how to improve their individual operations.” www.nzfeatrust.org.nz

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MINISCULE ‘BEE’ drones’ using nano-computing could be the future of horticultural pollination suggests Hamish Gates, NZ Young Grower of the Year 2015 and drone enthusiast.

“What will happen when bees disappear? Nano computing. These are miniscule robotics but very complex,” says Gates, who came across the programme called New Bees online.

“This is designed to take a tiny bee-like device, launched in a swarm – a collective, singular intelligent unit, into fields and orchards, literally designed to replace bees.

“They have built-in insecticides so if wasps attack them they can fight back, so you don’t lose these probably very expensive little bees.

“They are designed to be human friendly: you won’t get attacked by a swarm of mechanical bees. I hope they are built with no stings because ‘why would you?’” he jokes. They are designed the size of bees.

The bees, which can be seen on YouTube by searching New Bees, was the most unusual in a presentation

by Gates on the potential of drone technology to Horticulture NZ growers.

“Drones are an awesome technology we are getting towards…. We are scratching the surface of where we can go and what we can do,” he says.

“The drone technology today is just a platform; the true value exists in the brain, sensors and the intellect of it all. The body vehicle is interchangeable, replaceable; what we need is the brains.”

The researchers need to develop that intelligence so growers can learn to implement it and make it work.

– Pam Tipa

RURAL NEWS // OCTOBER 4, 2016

MANAGEMENT 39

Quarry helps to keep soil sweet NIGEL MALTHUS

WHEN THE weather is right, travellers on the tourist route between Geraldine and Fairlie might notice the curious sight of a water vapour plume apparently coming from the top of a farm ridge a couple of kilometres to the south.

It seems an odd place for any kind of industry, but it’s Ravensdown’s Geraldine lime quarry, high on a ridge above Winchester’s Hanging Rock Road.

This is limestone country, a fact underlined as you leave the main highway and drive down the gravelled Hall Road towards the quarry, and come across an historic lime kiln dating from 1876 – one of many which used to dot the area.

On the day Rural News visits, drivers Steve Northcott and Ned Cunningham, of local contractor Four Peaks Transport, are spreading lime on the rolling pastures of the Kakahu Angus stud farm, which extends over both sides of the valley and surrounds the quarry site.

Having the quarry effectively onsite

simplifies the job. Instead of 30-tonne trucks having to ferry lime to spreading trucks and loaders onfarm, Northcott and Cunningham simply reload their 8-tonne spreader trucks directly from the quarry. It’s a 680-tonne job that’ll take them a few days.

Over on the quarry side of the valley, quarry manager Paul Johnston says that at busy times up to 17 trucks can sometimes be seen queued up for loading.

The quarry can produce up to 45 tonnes an hour of the main product, AgLime – essentially raw limestone, kiln-dried and finely ground.

Lower-quality stone is sold as track rock, popular among dairy farmers to spread on farm tracks where the soft stone provides a clean surface easy on animals’ hooves.

The 85ha quarry is mining part of a long seam of limestone believed to run the length of the lower South Island all the way to Rangiora. Started in the early 1980s, the quarry has been owned

by Ravensdown since 2002; Johnston believes it has another 25 years of economic life.

The co-op plans to return the site to a mixture of farmland and native bush.

As it is removed, clay overburden is

stockpiled at the top of the quarry; already one gully straddling the boundary between the quarry and the Kakahu farm is being filled and the spoil is ready for replanting.

The quarrying usually starts with blasting the rock, then a mobile tracked crusher breaks it into manageable sizes for trucking to a hopper beside the central machinery of the quarry, a long coal-fired rotary drying kiln.

Once dried, the limestone repeatedly circulates through a fine crusher until it is small enough to fall through a screen and be added to the covered bunkers ready for loading out. The

LIME KEY TO FARM’S GOOD GRASS GROWTH THE QUARRY’S neighbour, Kakahu Angus stud, has been in the Hargreaves family for about 85 years.

Tom Hargreaves, who has run it for eight years since returning to the farm from a career in architecture, says lime is a crucial

part of growing grass and having a healthy soil. “You need to start with lime, really.”

But he concedes it’s the more productive parts of the farm that get the attention, and the scrubbier parts “as you can afford it”.

“We don’t do it as much as we should, but you know farming – you’ve got to prioritise so this year we’re trying to put on what we need. We’re putting 680 tonnes of lime on about 260 ha. We do parts of the farm every year.”

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Quarry manager Paul Johnston at Ravensdown’s Geraldine Lime Quarry at Kakahu.

dryer brings the water content down to around 2% and the fine crusher ensures the particle sizes are all less than 2mm.

The Geraldine lime quarry is one of seven owned by Ravensdown, four in the South Island and three in the North.

That indicates the South Island soils are generally more acidic; the south accounts for about 70% of national lime usage.

Ravensdown produces about 500,000 tonnes a year, some from third party-owned quarries. Nationally, the annual usage is about 2 million tonnes a year, but is believed lower in the past year because of the dairy downturn.

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RURAL NEWS // OCTOBER 4, 2016

ANIMAL HEALTH 41

Supplements needed for multi-lamb ewes PAM TIPA pamelat@ruralnews.co.nz

FOR A high-yielding 80kg ewe -- dairy or with multiple lambs – to produce at least 3kgMS/day, her voluntary intake of highenergy feed must be near 3kgDM/day, says Sam Peterson, from the International Sheep Research Centre at Massey University.

If the target is not hit, she will enter negative energy balance (NEB) or reduce milk production, he says.

New Zealand’s traditional sheep are not likely to sustain NEB for long, he says.

maturing animals, there has been no selection in our national sheep flock for persistence in milk production. Thus, our traditional sheep breeds will tend to reduce milk yield steadily after an early peak, and put on body condition during lactation even when well fed.

“Underfeeding will simply result in reduced yields in most ewes, though some will ‘milk off their back’.

“Lactating sheep, especially dairy sheep and those with multiple lambs, should be fed at ‘luxury’ levels -- offered pasture, lucerne or herb and legume mixes at over

should be fed to dairy ewes in the shed, both as an aid to management and as a nutritional strategy to increase ME intake.”

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“Underfeeding will simply result in reduced yields in most ewes.”

“Our meat and dual purpose breeds were selected for more than half a century to produce ‘fat lambs’ for the Smithfield market in London at Christmas,” he says in a paper to the NZ Veterinary Association conference.

“Unsurprisingly in retrospect, the result was a small, early maturing sheep that produced a lot of milk for a short period and did not mobilise fat easily.

“Despite the change to selection for large, late-

2000kgDM/ha with residuals over 1500kg DM/ha.”

Supplementary crops with high ME content chosen to suit local soils and climate should be used to fill gaps in feed supply, he says.

“These may be fed fresh or conserved. Forages such as chicory have ME content similar to barley and maize grain, so are viable alternatives, although they will take longer to eat and digest.

“Hence, starch-based concentrates (around 300g/day but not more)

NZ ANIMAL HEALTH COMPANY CELEBRATES A DECADE IN BUSINESS

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Beginning as a two-man contract research company in Manurewa in 2006, it says it has grown into a highly profitable international brand with four locations in the US and New Zealand and at least 300 staff globally.

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RURAL NEWS // OCTOBER 4, 2016

42 ANIMAL HEALTH

Drench benefits both ewes and their twins PAM TIPA pamelat@ruralnews.co.nz

TREATING TWIN-BEARING ewes with anthelmintics has positive results for both the ewe and lamb, as shown by a recent study, says Clive Bingham of Zoetis NZ. The aim of the study was to determine if there was any benefit on production from treating poorcondition twin bearing ewes with a long acting anthelmintic product prelamb, Bingham says in a paper to the NZ Veterinary Association conference.

It also aimed to find out if there was any difference between the two treatment options.

The assessment of productivity was based on the body weight and condition score (CS) of twin bearing ewes and the body weight of their lambs.

On this farm, most animals were in poor condition, so the trial was limited to this ‘class’ of stock.

A total of 599 mixed age twin bearing ewes (average CS 2) were drafted into three equal groups. All ewes were given a 5-in-1 clostridial vaccine.

The negative control group received no anthelmintic treatment pre-lamb.

The other two groups received either a Bionic Hi Mineral combination sheep capsule (abamectin 160mg and albendazole 4.62g) or an injection of Cydectin long acting (LA) injection for sheep (moxidectin 20mg/ml) four weeks prior to the start of lambing.

All ewes were body condition scored (0–5 scale) and weighed at pre-lamb, docking (65 days after treatment) and at weaning (127 days after treatment).

Faecal egg counts (FEC) and larval cultures were taken at these three times.

The faecal egg counts at docking showed a marked reduction in the treatment groups compared to the control.

At weaning all groups had low counts due to the ewes’ immunity reducing the parasite burdens. The Cydectin LA group was significantly lower than the controls at this time.

The larval cultures at both pre-lamb and weaning were similar for treatment and control groups. The predominant species present was Cooperia but this was accompanied by smaller numbers of Haemonchus, Trichostrongylus and Teladorsagia.

At docking the population within all

Treating twin-bearing lambs pre-lamb proves beneficial to both ewe and twins’ body weights.

groups had changed substantially.

The predominant parasite represented in the control group was now Haemonchus, with smaller numbers of Cooperia, Trichostrongylus and Teladorsagia present. Both treatment groups had higher proportions of Teladorsagia and Trichostrongylus, compared to the control. This is most likely a result of these species having drench resistance.

At weaning both ewe treatment groups were significantly heavier

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(Ave=3.5kg, p<0.0001) than the nontreated ewes. There was no significant difference in weight between the treated groups.

The proportion of ewes with condition scores <3 increased substantially by weaning in all groups but both treatment groups had significantly (p<0.0001) more bettercondition ewes than the control group.

The lambs from both treatment groups were significantly heavier at weaning. There was no significant

difference in the weight of the lambs between the treatment groups.

The return from treating poorcondition twin bearing ewes with either Cydectin LA injection or Bionic capsules was substantial from financial and feed saving viewpoints.

Ewes that wean at condition score ≥3 do not require extra feeding above maintenance before mating.

This extra feed can then be used to either get light ewes up to weight or to fatten lambs. The extra 3.5kg of weight on the treated ewes is worth about 100kgDM/ewe. This equates to a substantial saving in feed, when applied to the whole flock.

In conclusion, the study found that treating twin bearing ewes that are in poor condition pre-lamb, with long acting anthelmintic treatments (Cydectin LA or Bionic capsules) results in both a significant increase in body weight of the ewe (Ave=3.5kg) and lamb (Ave=2.6kg) by weaning.

No significant difference was demonstrated between the two treatments in either the weight of the ewe or the lambs by weaning. @rural_news facebook.com/ruralnews

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ANIMAL HEALTH 43

Body condition scoring on the improve ment is also essential to farmers for decision-making. For example, cows may be dried off to give them time to regain body condition lost during lactation before calving.

When using the BCS dry-off rules for cows in a low input system, incorrectly estimating a cow’s BCS by 0.5 could lead to premature dry off and missing out on another 30 days in milk. Alternatively, cows may calve thinner than the recommended optimum.

Although affected by milk price, the value of increasing BCS at calving from 4.5 to 5.0 is conservatively estimated at $60/ cow (InCalf), through increased milk production and better reproductive performance.

The positive relationship between calving BCS and milk production continues above BCS 5.5, but the risk of metabolic disease increases significantly.

Peripartum health is very sensitive to calving BCS. For example, the risk of ketosis is doubled in cows that calve at a BCS >6, compared with cows that calve at a BCS 5.5.

In a recent DairyNZ study, 40% of cows that calved at a BCS of 5.5 had β-hydroxybutyrate concentrations greater than 1.4mmol/L postpartum whereas none of the cows calving at 4.5 exceeded this threshold.

In the same study, although all cows underwent an inflammatory response around calving time, cows that calved at BCS 4.5 appeared to recover faster than cows calving at either BCS 3.5 or 5.5.

As farmers move toward winter crops such as fodder beet and put more value on achieving BCS targets, it is essential that accurate BCS is provided at the top end of the scale as well as the lower end to guard against metabolic disease.

Given that subtle changes in the BCS at calving can have significant effects on subsequent productivity and health, particularly when BCS is greater than 5.0, it is important that farmers

make management decisions based on accurate BCS. Despite evidence of the importance of BCS management for productivity and welfare, it is a subjective measure that requires practitioners to be trained

and perform regular calibration.

DairyNZ began to develop a BCS certification scheme in 2011. Initially, this was a one day training course aimed at improving the scoring TO PAGE 44

Dairy NZ’s Chris Leach.

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BODY CONDITION score (BCS) will increasingly be adopted as a measure in welfare assurance schemes, so scoring must be accurate throughout the BCS range, say DairyNZ’s Chris Leach and Jacqueline McGowan.

The National Body Condition Score Assessor Certification Programme, backed by DairyNZ and the Ministry for Primary Industries, was launched in 2012. This is to ensure the dairy sector has access to trained, competent rural professionals who maintain calibration to the DairyNZ BSC national reference standards, say Leach and McGowan in a paper for the NZ Veterinary Association.

The programme ensures delivery of training, initial and ongoing assessment, and BCS assessment activity levels necessary to achieve and retain calibration. It certifies those achieving the set requirements and agreeing to provide service; they must agree to a code of practice and become certified BCS assessors.

Accurate BCS assessment is essential when farmers use it to support decision-making or when the BCS is a criterion in animal welfare assessments.

Farmers are encouraged to do their own BCS assessments, but many do not due to lack of time or confidence, the paper says.

Equally, in corporate farm structures, grazing arrangements and herd sales, a BCS assessment provided by a certified BCS assessor holds more weight than unvalidated assessments.

The Code of Welfare for Dairy Cattle stipulates a minimum BCS of 3.0. Farmers can be prosecuted under the Animal Welfare Act 1999 if they have cows thinner than this and fail to take action.

Since 0.5 of a BCS unit could mean the difference between compliance and noncompliance, any operator scoring cows at the lower end of the range needs to be certain of accuracy.

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RURAL NEWS // OCTOBER 4, 2016

44 ANIMAL HEALTH

BCS on the improve FROM PAGE 43

capability of attendees (vets and others), so that they could score a group of cows to within 0.2 of the trainer-derived mean for the group.

In autumn 2012, a BCS operator test scheme was piloted, which assessed individuals for their ability to score a group of cows (i.e. mean and range) as well as their ability to score individual animals.

A ‘gold standard’ team provides the model scores against which

that the scoring of most assessors changes relative to the DairyNZ reference standard from one assessment to the next. Additionally, assessors tend to under-score cows with high BCS and over-score cows with low BCS. This highlighted the importance of re-calibration and re-testing to maintain high scoring accuracy among certified assessors, and the need to expose them to unfamiliar BCS scores in between on-farm

assessors are tested.

The general consensus was that annual retesting was appropriate because of international evidence of the need for calibration to reduce drift, i.e. that accuracy of BCS declines with time since training. However, participants in the BCS programme frequently state that annual on-farm retesting is excessive.

Results from the NZ BCS certification assessments suggest

assessments.

At the launch of the DairyNZ BCS certification scheme, the gold standard team consisted of five DairyNZ animal husbandry extension specialists.

There are currently 12 gold standard scorers in the team – five DairyNZ extension specialists and seven contracted assessors, three of whom joined the programme in November 2015 and four in February 2016.

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FARMERS BUY IN TO SCHEME THE UPTAKE by farmers of the BCS system has been encouraging, say Leach and McGowan.

The BCS management initiative has exposed farmers in most regions to the benefits of using a certified assessor to help manage BCS. In the 2014-15 season, 21% of 485 surveyed farmers reported they used a certified assessor. The true proportion is likely to be higher since many are unaware that assessors are certified.

Also, 53% of farmers believed that assessors provide BCS as a ‘value-add’ service, and are unlikely to query the credentials of an assessor if they are not paying specifically for the service.

There were 223 certified BCS assessors as at the end of March this year and a total of 676 rural professionals were recorded as having engaged with the programme since its launch in 2012-13.

Over the past 12 months, the scheme has been trialling an online calibration tool, to determine whether it may be used to maintain accuracy over time and potentially to extend the interval between onfarm assessments for those who demonstrate continued accuracy.

“Unfortunately, the trial has been plagued with technical issues which were not apparent during piloting,” they say.

“Consequently, the calibration is not developed and proven to the point that it could be relied on for either of the intended purposes.”

In a recent survey of participants in the programme, 75% of respondents supported some use of online calibration, including further development so that it performs as originally intended.

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Zoetis New Zealand Limited. Tel: 0800 650 277; www.zoetis.co.nz. CYDECTIN is a registered trademark of Zoetis Inc. or its subsidiaries. ACVM No. A6203. 1. A.W. Murphy; The effect of treatment with Moxidectin, a long-acting endectocide, on milk production in lactating dairy cows. World Buiatrics Congress Sydney 1998. 2. The Impact of Eprinomectin Treatment on Dairy Cattle Reproductive Performance. McPherson et al Proc. DCV NZVA, 2000.

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RURAL NEWS // OCTOBER 4, 2016

MACHINERY & PRODUCTS 45

Time to wake up and get safe!

WHILE QUAD fatalities keep fuelling a media frenzy, it’s time to look at the broader picture and try to understand what makes our farms such dangerous places.

Dangerous they are: statistics between 2013 and December 2015 show farmers suffered 63 deaths*; the next-highest sectors, transport and warehousing, had 17 and forestry 14 respectively during the same period.

So the death rate on farms is around four times higher; why is that?

If you’ve visited a quarry, warehouse or forest lately, you’ll know that before you get to the action you’ll be hit with rules, hazard identification, hi-vis vests, hard hats and steel-toe boots.

Easy to do, you say, on a compact ring fenced site, but much harder to do in the backblocks of New Zealand.

Of course, it’s just not possible to have ‘big brother’ watch your every move, so the farming community has to take the task on board and start looking after themselves and their cohort.

You can learn a lot from numbers and the story they tell.

Of all the deaths recorded in 201315, 43% were suffered by people 60 and older, and 50-60 year olds pushed that percentage to 56%. You have to wonder if the ‘I’ve-always-done-it-like-this-andgot-away-with-it’ mentality causes over-reporting of this age group.

Looking at the causes of the fatalities makes interesting reading too.

While quad deaths make up around 32% (20 deaths), the numbers also show that 68% occurred in other situations: tractor rollovers accounted for 14% (9) and being struck by tractors or falling objects, such as big bales, caused 20% (13). Machinery or PTO shaft accidents caused 10% of fatalities (6), and drowning, crushing or burning caused 20% (12). Fatalities involving vehicles, including three fertiliser spreading truck rollovers, accounted for 14% (9), showing that farms are

Quad fatalities make the headlines, but all on-farm deaths need a serious look at by farmers.

particularly dangerous places.

We have to be proactive to stop this waste of life and the ensuing misery it causes, by understanding the risks that mundane tasks can expose us all to.

The new health and safety legislation

has focused some attention. But we need to get beyond the ‘she’ll-be-right’ attitude said to typify being Kiwi and understand that it might not be alright.

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RURAL NEWS // OCTOBER 4, 2016

46 MACHINERY & PRODUCTS Unmanned machines make better use of available labour, says manufacturer CNH Industrial.

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AUTOMATION SEEMS to know no boundaries and the latest manufacturer to show its hand – CNH Industrial – sees self-driving tractors as the future for boosting production and improving productivity.

Unmanned machines make better use of available labour, CNH says; they work unmanned around the clock, integrating with existing fleets and using artificial intelligence to automatically respond to predicted weather.

Building on current auto-steering and telematics, CNH’s latest concept vehicles are based on Case IH Magnum and New Holland T8 tractors, using high accuracycorrected GPS signals, immediate recording and transmission of field data to allow remote deployment, monitoring and control.

Configured in two layouts, the Case machine has no cabin, while the NH has a conventional layout. The latter is said to offer more flexibility, for instance, allowing the

operator to drive on the highway or in intricate tasks that do not suit automation. Other than the ‘clever stuff’, both tractors use standard engines, transmissions and chassis.

Control is via a fully interactive interface, with the inputting of field boundaries as the starting point, followed by path plotting to achieve the most efficient route for the tractor. The company suggests, at this early stage, the technology best suits tasks needing little operator intervention such as cultivation, planting and spraying.

Once field plotting has been completed, the user chooses a job from a prepopulated menu, selects a vehicle, picks a paddock and starts the procedure – all inside 30 seconds.

When in work, the tractor/implement can be monitored from the office or via a remote tablet, which both receive live camera feeds from up to four cameras to show progress. This includes readouts for fuel or seed levels, implement readings such as seeding rates or coulter downforce displayed in a secondary

screen.

In work, LiDAR (range finding lasers) and video cameras detect obstacles and effect avoidance, alerting the operator by audio and visible means of an impending collision and giving a choice of manual avoidance, controlled from base, or path re-plotted by the system. If fuel or seed run low, an on-screen alarm is activated and the machine stops, for safety, if no action is taken.

As work progresses, tasks can be modified at any time, and built-in connection to weather satellites can allow the machines to decide to stop work then start again when the bad weather has passed.

The system allows multiple tractors to work individually or in tandem in the same paddock and to do tasks in sequence.

The concept is envisaged as workable, eventually, on grass and cereal harvesters, self-propelled sprayers and support vehicles delivering seed and fuel. www.cnh.com @rural_news facebook.com/ruralnews

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RURAL NEWS // OCTOBER 4, 2016

MACHINERY & PRODUCTS 47

Breezing through the firewood MARK DANIEL markd@ruralnews.co.nz

WITH SUMMER to hand, forward-thinkers will be replenishing their woodsheds – a backbreaker or a breeze depending on the machinery used.

Hefty splitters – vertical or horizontal – from Daytech Engineering, Masterton, lean towards the breeze outome.

At the heart of the machine a double-skinned main beam ensures strength and durability,

while the business-end brandishes a unique, fabricated, dish-shaped splitting wedge with a sharpened BIS alloy leading edge.

The wedge also uses extra thick wear strips and bears down on a 50mm thick anvil for fast, jamfree splitting Mounted on an integral chassis and running 12 inch wheel equipment mounted on 1500kg rated hubs, the units are easy to tow and position for splitting, the drawbar including a jockey wheel set-up.

The standard hydraulics are powered by a quality 9hp 4-stroke engine driving a two stage Barnes hydraulic pump for fast cycling. The

pump acts on a 4 x 24 inch hydraulic cylinder to drive the wedge.

An oversize hydraulic reservoir and large bore hydraulic pipework

Hefty wood splitters to make your work easy this summer.

combine to keep temperatures under control, and integral filtration protects all hydraulic components. www.daytech.co.nz

HARD WORKING. EASY TO OWN.

The disc-shaped splitting wedge has a sharpened BIS alloy leading edge.

TWO GIANTS AT WORK ON MIDGET CNH INDUSTRIAL and Hyundai Heavy Industries have agreed to produce and keep developing miniexcavators.

Each will benefit from the other’s development, component sourcing and manufacture.

CNH will make excavators up to 5 tonnes capacity and source larger models from HHI. The global deal -- excepting South Korea – will run for 10 years with a three year renewal option.

CNH will offer 14 models from 1t to 6t.

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Some products, options, attachments or accessories may not be available in all regions and from all dealers. Images used are for illustrative purposes only and may show features or attachments not included in the advertised price. Products, specifications and availability are subject to change without notice. *Conditions apply. Finance available through John Deere Financial Limited to approved commercial applicants only. Repayments based on a price of $85,369 for 5083E cab tractor with H240 Non Self-Levelling (NSL) loader, $4,154 for pallet fork and $9,467 for post hole digger & auger. Price does not include pre-delivery, freight, assembly or dealer charges, these are determined by your dealer. Implements and attachments sold separately. Calculated on a 60 month term at an annual percentage rate of 3.99% with 40% deposit and GST back. Fees and charges apply. Valid on eligible equipment delivered no later than 31/10/2016. Offer only applies when bundled as a single purchase. If not amended or withdrawn earlier, the promotion expires on 31/10/2016. †Implements shown are manufactured by FieldQuip and are available at participating dealers.

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RURAL NEWS // OCTOBER 4, 2016

48 MACHINERY & PRODUCTS

App makes for best harvesting efficiency A NEW smartphone app from Claas helps operators optimise the efficiency of the company’s Lexion combine harvesters.

The new technology is a scaled-down version of the company’s awardwinning Claas electronic machine optimisation system (CEMOS), a system that automatically adjusts key settings to maximise throughput, grain quality or fuel efficiency and, more importantly, raise output by up to 20% “Combine harvester operators usually have to rely on their experience or intuition to rectify grain losses or other problems by manually adjusting individual settings, but this app – CEMOS Advisor – is a

BETTER CUT THROUGH MARK DANIEL markd@ruralnews.co.nz

decision-making tool that guides the operator to the most appropriate settings, step-by-step,” says Claas Lexion product manager Jono Ham. In use, the operator enters his query into the app of his smartphone, from where the app will suggest

the correct settings to improve efficiency or throughput based on the recommendations found in the operating manual. The operator can then adjust the settings and check to see if that recommendation has been effective.

If not, the app will provide further

recommendations until it finds the best settings for the prevailing conditions.

Settings can be saved in the app for use at a later date.

The CEMOS Advisor app is available for iOS and Android operating systems and can be downloaded from the app store. – Mark Daniel

CLAAS SET the benchmark in combine harvesting in the 1990s with its Lexion series and Vario cutter-bars.

The latter allow a variable knife position to deal with a diverse range of crops such as wheat, linseed or canola. Current models offer 30cm of movement hydraulically or 50cm if manually installed filler plates are utilised.

For the 2016-17 season, the latest upgrades to the 1080, 1230 and 1380 headers have variable knife positions increased to 70cm, controlled from the

seat to markedly improve crop flow in a range of conditions.

Table length can be adjusted on the move as crop conditions or varieties change, plus the added benefit of being able to attach side knives without the need for tools.

Drivelines have also come under the designers’ microscope: a split header and auger drive is mechanically driven by a gearbox from either side of the header and in synchronisation. This is said to reduce loading on the drive line and by achieving a large centre overlap at the knife it allows clean, high-speed cutting in tough conditions. www.claasharvestcentre.co.nz

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RURAL NEWS // OCTOBER 4, 2016

MACHINERY & PRODUCTS 49

Scrapers added to range MARK DANIEL markd@ruralnews.co.nz

MORRINSVILLE COMPANY Power and Earth, Sales and Leasing, well known nationwide for tractor and machinery leasing, has won the NZ distribution rights to products from Ashland Industries, US. Ashland, of Wisconsin, makes extreme-duty pull scrapers for the construction and agriculture industries, drawing on 60 years of expertise.

This machine does cost-effective contouring onfarm, e.g. creating new races, removing humps, filling dips

and leveling paddocks.

Key components such as hydraulic cylinders are built in-house using friction welding, said to be up to 400% stronger than conventional manufacture; these are then assembly tested to 6000psi operating pressures.

Paint finishes include two-part urethane primer coats preceding twopart top coats, for best protection.

Power and Earth says it will offer machines from 11 to 22 cubic yards, suitable for tractors 150-500hp, depending on soil type and operating terrain.

The machines have hydraulic sus-

pension on the rear wheel assemblies, and tractor cabin and front axle suspension for a smoother ride.

The company will also supply a heavy-duty, tractor-specific drawbar to ensure all loadings are transferred effectively through the rear of the towing tractor.

Machines are available for hire or purchase, Power and Earth principal Brent Osborne says.

He suggests the new release 14TS2-LGP, with oversized tyres for difficult conditions, will be popular, given that it can be pulled by 250hp tractor. www.powerandearth.com/nz

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The team, from sprayer manufacturer Evrard, used one of their trailed, 5400L Meteor sprayers with a 44m boom, pulled by a Claas 900 series tractor to break the world record for area sprayed in one hour.

Aiming to prove that large, trailed set-ups can match the output of giant, self-propelled machines, the group covered 136.83ha in 60 minutes, travelling at an average speed of 33km/h and applying a target dose of 35L/ha.

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RURAL NEWS // OCTOBER 4, 2016

50 MACHINERY & PRODUCTS

NZ Fieldays on steroids bring their products to NZ to test them in our conditions because they are very similar.”

Dromgool says Fieldays had a good experience at the ploughing championships; he noted the organisers’ great job given that they have no permanent site. At Tullamore the organisers had laid thousands of metres of steel walkways to prevent the site – on ordinary farm land – turning to mud. Wood chips also helped.

PETER BURKE peterb@ruralnews.co.nz

THE IRISH National Ploughing Championships are similar to the NZ National Fieldays, with a massive array of farm equipment and technology on display.

Over the three days of the event, about 250,000 people pass through the gates.

The main difference from Fieldays is that the ploughing championships are moved around the country every two years – it has no permanent venue. However, crowds from all over Ireland visit. Dedicated souls watch the ploughing but the main attraction for visitors is the massive number of exhibits.

New Zealand Trade & Enterprise exhibited for the first time at the Irish champs, held this year

Lockwood Smith.

near Tullamore, County Offaly, in the midlands of Ireland.

NZ’s ambassador to the UK, Sir Lockwood Smith, says NZ is exploring where its agritech businesses can be more involved.

Ireland’s farming resembles NZ’s so it’s natural that several of our

high-tech agri companies exhibited at Tullamore.

Gallagher and LIC had their own sites; others, including National Fieldays Society, were based on the NZTE site.

Nick Dromgool, of the NZ Fieldays Society, says over time it has developed a strong relationship

NZTE’s trade commissioner for Ireland, based in London, Danial Taylor, says his organisation never had a presence like this before and was trying to discern whether it could pull something like this together. He believes the idea worked, given support from NZ companies.

“What we have seen here validates that support. The interest has been huge. This field day attracts farmers and decisions makers

interested in the NZ story.

“There is much commonality between [the Irish] operations here and how we think about our farmers back home. The Irish are driven to be highly productive and more efficient and what we are talking to them about meets that need.”

Taylor says there was a strong political presence at the event, indicating how important farming is to the Irish government.

with Enterprise Ireland which has had up to 12 exhibitors at Fieldays for ten years.

“Enterprise Ireland is keen to bring machinery manufacturers to NZ. A lot of the innovation we have in NZ has come from Ireland,” he told Rural News. “Often companies in Ireland will

Over three days 250,000 people passed through the gates at the Irish National Ploughing Champs.

LIC LAUNCHES PRODUCT LIC LAUNCHED its product Saber (Protrack in NZ) at the Irish National Ploughing Championships.

The product, says LIC Europe manager Mark Ryder, is now used on 2000 farms in NZ. The event was the product’s first northern hemisphere showing.

Ryder reported huge interest.

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RURAL NEWS // OCTOBER 4, 2016

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