Business

Strong growth across most primary sectors

The Ministry for Primary Industries (MPI) says the outlook for New Zealand primary industries is positive with strong growth forecast across most sectors and dairy prices expected to gradually increase over the next 2 years. MPI Director of Sector Policy, Jarred Mair, says the latest Situation and Outlook for Primary Industries (SOPI) shows that, overall, exports have returned to growth this year – providing a clear signal of the strength of our primary industries. “New Zealand primary industry export revenue is estimated to reach over $36.7 billion in the year ending June 2016, supported by strong growth in horticulture and other primary sector exports and foods,” says Mr Mair. Recent years have provided challenges for a number of our sectors, and underlined the highly competitive and dynamic markets we trade in. For some sectors a drop in the New Zealand dollar has softened the impact of lower US dollar prices. Meanwhile on-farm, production across the primary sector has been relatively stable as El Niño conditions did not result in widespread drought. “The dairy industry has responded decisively to the subdued outlook through consolidation of their businesses to improve productivity and manage their costs,” says Mr Mair. “Dairy prices have remained weak as global supply is still abundant. New Zealand production is down marginally but export volumes are up. Production is still high in the EU [European Union], which is keeping downward pressure on prices. “Overall there has been a 6 percent decline in the value of dairy exports in the past year, but an expected gradual price recovery should lead to increasing dairy export values looking out 2 to 3 years. Overall our forecasts show 34 percent growth out to 2020.” Mr Mair says horticulture exports are expected to continue their run of impressive growth over the medium term. Horticulture […]

New Regulations to Strengthen Bobby Calf Welfare

Details announced today for new regulations for the management and treatment of young calves are part of a wider programme of work by farmers, industry and government to strengthen bobby calf welfare. The eight organisations that formed the Bobby Calf Action Group at the end of 2015 have accelerated and added to existing measures aimed at ensuring everyone involved with bobby calves applies best practice in their handling and care. The Bobby Calf Action Group is made up of DairyNZ, Dairy Companies Association of New Zealand, Meat Industry Association, Federated Farmers, New Zealand Petfood Manufacturers Association, Road Transport Forum, New Zealand Veterinary Association and the Ministry for Primary Industries. “There has been a significant amount of commitment and work by the Group to advance initiatives that will impact on farms and during the transportation and processing of bobby calves,” says MPI’s Deputy Director General, Scott Gallacher. “Farmers, industry and government have been working for some years on lifting the standard of care for bobby calves and that has been effective.” “Last year’s footage of bobby calf mistreatment provided an impetus to accelerate the work programme,” says Mr Gallacher. DairyNZ’s Chief Executive Tim Mackle says the issues go beyond the farm gate. “There are many players in the value chain and it was important that we got together to solve these issues,” says Mr Mackle. “We saw some unacceptable behaviour last year and we are committed to eliminating it from the industry,” added Mr Mackle. Mr Gallacher noted that MPI’s investigation into potential animal mistreatment following the release of the bobby calf footage is ongoing. A processing worker pleaded guilty to all 10 charges over alleged bobby calf offences when he appeared in court early June. MPI also laid a further four representative charges against a company and an individual last month […]

The economics of butterfly farming

Karl Rich has been helping to farm an altogether more delicate animal than those usually associated with agribusiness. The Lincoln University Agribusiness and International Development Associate Professor was recently part of a multi-disciplinary, international group of researchers looking to develop an innovative approach to conservation in India — butterfly farming. The group wants to aid conservation of butterflies in Western Ghats, “an area with some of the highest levels of biodiversity in the world and one threatened by unsustainable agricultural and land use patterns,” Associate Professor Rich says. He says in developing countries conservation efforts can be very challenging. “It can be more financially lucrative to engage in activities that are harmful to the environment and biodiversity. A crucial need is to develop and promote conservation programs that take place as part of the wider socio-economic system, balancing environmental considerations with those of stakeholders.” They looked at exporting the butterflies but strict regulations prevent the export of India’s flora and fauna. “Global markets for butterflies are largely saturated as well,” he adds. So the team explored ways of integrating butterfly farming into farming itself. “Our research found that butterfly gardens can be integrated at low cost in many farming systems, such as coffee, as a source of income diversification through ecotourism or environmental branding. They also designed a model butterfly garden as an education tool for biodiversity and environmental protection. “By housing this garden at a school for the disabled (Swastha), such a site could further provide vocational skills, rehabilitation, and therapy for students, while promoting social awareness at a community level.” “Our approach represents a low-cost, scalable means to mainstream conservation efforts into everyday activities, and promote social awareness of the plight of disadvantaged groups,” he says. An expected outcome of this project will be to highlight Kodagu, the […]

Is your food product really made here?

A recent High Court case shows companies need to take extra care when claiming their products are New Zealand made, an intellectual property expert says. In the case, health products business New Zealand Nutritionals (NZ Nutritionals) was ruled to have breached the Fair Trading Act with misleading and deceptive labelling and marketing of goat’s milk products, including statements they were ‘100% NZ made’. James & Wells Partner Gus Hazel says the case highlights that country of origin claims such as ‘NZ made’ can be a tricky area. “While the products were manufactured in Christchurch, the majority of the ingredients, including goat’s milk powder, were imported from overseas. The Commerce Commission alleged consumers would be led to believe the goat’s milk was sourced from goats milked in New Zealand,” he says. “NZ Nutritionals argued that producing and packaging the products within New Zealand, meant that the ‘100% NZ made’ claims were not misleading or deceptive. However, Justice Venning ruled that the goat’s milk powder was such a significant part of the product that where it was produced was important.” Hazel says the case offers some useful commentary on the issue of product labelling, with particular reference to food or nutritional products. “For producers of food and nutritional products there are important lessons here. Firstly, it would be prudent for producers to undertake an audit of the source of ingredients in their products. “Secondly, producers also need to consider the importance of the ingredients in relation to the nature and characteristics of the products. They need to get into the heads of consumers, because the NZ Nutritionals case shows consumer perception is a key factor to consider.” These considerations are important in relation to the Fair Trading Act, but that is not the only piece of legislation natural product producers may need […]

Most farmers still satisfied with banks but pressure building for some

Farmers overall remain satisfied with their banks, but pressure is building and sharemilkers are feeling it most a Federated Farmers survey has revealed. The Federated Farmers Banking Survey, which is undertaken quarterly to gauge the relationship farmers hold with their banks, has indicated that perceptions about ‘undue pressure’ have gradually built. Federated Farmers Dairy chairman Andrew Hoggard says that it comes at no surprise considering the current environment. “Despite sharemilkers being particularly exposed at present bank satisfaction remains strong overall.” The survey shows 81 percent of all farmers and 79 percent of dairy farmers were ‘very satisfied’ or ‘satisfied’ with their banks. However, 9.7 percent of all farmers felt they were coming under ‘undue pressure’ regarding their mortgage, up from February’s 8.5 percent. For dairy farmers this was up to 12.9 percent from 10.9 percent last quarter. Mr Hoggard said it was important to recognise that to date other farming types, like sheep and beef and arable, are not reporting nearly the extent of bank pressure and numbers have hardly shifted since the survey started. New Zealand Bankers’ Association chief executive Karen Scott-Howman says that banks are still working closely with farmers to help them plan and manage through the tough times, and the survey results are positive given the current environment for farmers. “Banks remain committed to supporting their farming customers, and they will continue working closely with dairy farmers and sharemilkers to help support the viability of their businesses,” Ms Scott-Howman said. “The survey shows the vast majority of farmers remain happy with the quality of communication with their banks. Regular two-way communication is vital in times of financial pressure. We encourage farmers to continue talking with their banks early and often about budget planning, managing cashflow and the assistance that may be available to them,” she added. […]

Role in Indonesian agricultural project formalised

Lincoln University’s part in a US$106m (NZD$156m) project to sustainably manage and help spread technology through Indonesian agriculture was formally recognised recently. In the picture: Lincoln University Vice-Chancellor Professor Robin Pollard, left, with Indonesian Agency for Agricultural Research and Development (IAARD) Executive Secretary Dr M Prama Yufdy. Vice Chancellor Professor Robin Pollard signed a Memorandum of Understanding with Indonesian Agency for Agricultural Research and Development (IAARD) Executive Secretary Dr M Prama Yufdy on May 6. IAARD is part of the Indonesian Ministry of Agriculture and is implementing the Sustainable Management of Agricultural Research and Technology Dissemination (SMARTD) project funded by the World Bank. Lincoln already has several IAARD staff studying at post graduate level after they completed the University’s English language programme, and there is a need for more staff to be upskilled. IAARD have been sending staff to North America, Europe, Australia and New Zealand for training. The agreement establishes areas where Lincoln could further increase its involvement in the training as well as looking at other areas of collaboration. These include; Government scholarship programmes aimed at addressing institutional research needs in Indonesia, establishing pathways for Indonesian students to complete Masters and PhD Programmes in relevant agricultural fields, as well as the development of collaborative research projects in priority areas. Lincoln’s Director of International and Student Engagement, Dee Coleman, says Lincoln’s strength in Agriculture has been favourable for the Indonesian Government and “we welcome these relationships where we can engage in international knowledge sharing between nations”. “The perception in Indonesia of Lincoln as New Zealand’s specialist land based university is cemented, and it lifts our academic profile with other Government departments,” she says. *Indonesian Agency for Agricultural Research and Development functions are performed by the Secretariat and 13 research centres for the purpose of managing research and development. These […]

International Campaign Set to Boost NZ Dairy Exports

A new multi-million-dollar marketing campaign has begun to educate Australian, Chinese and ultimately U.S consumers on the health benefits of New Zealand’s grass fed dairy products. The international campaign has been launched to raise awareness of the benefits of consuming milk products from 100% grass fed cows over those raised on grain based diets. It’s all part of the introduction of new Munchkin Grass Fed™ milk-based formula and toddler drinks. Milk matters because it is the key ingredient in infant formula and toddler milk drinks, constituting up to 65% of the powder. Steve Dunn CEO of California based Munchkin, the world-class infant and toddler product company behind the campaign, says that a premium brand positioning which leverages New Zealand’s natural advantage may offer significant economic benefits for the local dairy industry. Dunn says that milk from 100% grass fed cows is healthier than milk from grain fed cows, and in the North American market, organic dairy farming relies on a grain based diet. “With growing demand, the livestock industry has shifted and organic milk is now coming from industrial-scale facilities. In fact, many US organic brands are buying milk from mega-dairies with as many as 10,000 cows on a factory farm.” “According to the USDA standard, organic-raised cows are only required to live on pasture 30% of the year, and during that time, only a small portion of their diet must be grass. Other feed may be a mixture of silage, corn, gluten and pulp.” Dunn says the marketing campaign that will include advertising, public relations and social media throughout China, Australia and the U.S. in 2017, aims to communicate the key benefits of the consumption of grass fed milk-based formula products from New Zealand’s grass fed cows. “Most parents don’t realise that up to 65% of infant and toddler […]

Rural Contractors annual conference coming up

Rural Contractors New Zealand (RCNZ) is encouraging all of its members – and any others interested in the agricultural contracting sector – to attend its annual conference being held in the Bay of Islands later next month. Chief executive Roger Parton says this year’s RCNZ annual conference is being held at the Copthorne Hotel and Resort, in Paihia, from June 27-30. “The conference is now only a month away and for those who have not registered yet; now is the time to do so,” he explains. “We will be unable to hold any accommodation past the end of this month, so if people want come they need to get their registrations in now.” Mr Parton says the conference has an exciting agenda of relevant and pertinent issues to the rural contracting sector – along with a number of top-line speakers. The theme for this year’s conference is: “Your Business from Start to Finish” and it will also be a celebration of Rural Contractors NZ 20 years as an organisation. “We have an an agenda chock-full of presentations on how to get smarter in running your business and use of the latest technology,” Mr Parton adds. “If you have never attended a national conference before; I can highly recommend it. It provides a fantastic opportunity to network with contractors from all around the country, learn new stuff and have a bit of fun as well. Registration forms and information on the annual conference are up on the RCNZ website or email: office@ruralcontractors.org.nz for all the details.

Advisory boards can offer guidance for farmers during a period of uncertainty

As the agricultural sector grapples with high levels of dairy debt and increased volatility, Crowe Horwath’s Head of Agribusiness, Neil McAra, says farmers need to look at getting sound governance support. McAra is a strong advocate for advisory boards which can assist farmers with the ability to make better decisions and can help improve business governance. The value, scale and complexity of New Zealand farming operations have increased significantly over the last two decades. McAra reports that this, coupled with an increase in borrowing particularly in the dairy sector, has in many cases left mum dad farming units managing multimillion dollar businesses carrying high levels of debt. Unlike a board of directors, advisory boards are non-binding and have no legal definition. This allows value to be added to the company through forming an appropriate mix of people who can be open and have free-flowing discussions. The structure can be flexible and adaptable to the surrounding environment. “Advisory boards are sounding platforms that can help mollify the pressure business owners are faced with”, McAra comments. “As farming operations expand from small family operations, into a larger scale we need to ensure their governance develops with them.” Ensuring good governance of farms is becoming more important especially since it was reported earlier this year that dairy farm debt in New Zealand is sitting at $38 billion. “The volatility of the market has business owners in the rural sector looking for help. Good advisory boards can give fresh insights and high-quality objective advice to issues and problems that arise,” McAra said. Introducing an advisory board at the very least ensures the farmer or business owner spends time on their business rather than in their business. “With mounting pressure and heavy workloads sometimes it’s hard for farmers to get their head out of the […]

Over $3.5 million a year to grow primary industries talent

Young Kiwis with an interest in the primary industries can apply for over $3.5 million in study assistance each year, says Andy Somerville of GrowingNZ. GrowingNZ is representing the primary industries at the upcoming national Career Expo series. GrowingNZ’s new online directory presents more than 150 types of scholarship offered by a wide range of organisations. These are targeted at secondary-level students to help them in their next step, or to students on tertiary courses. “This adds up to nearly 1000 individual scholarships being handed out each year. “The common factor is that all these scholarships are for young people with an interest in helping take quality food and fibre to the world, or working with water, land, plants or animals – which is what the primary industries are about. “We have many challenges and opportunities – such as reducing our environmental footprint. We are looking to young people to help shape the future of these important industries, which earn about 70% of New Zealand’s export income each year. “The roles range from water scientists and robotics engineers to food safety specialists and the farmers of the future who will work with sophisticated technologies. “And the scholarships focus on different personal strengths or subject areas, so every young person should have a look to see what could be there for them. “For students and their families wanting to know more about the primary industries, we will be at the Career Expos coming up in Christchurch, Auckland, Hamilton and Wellington in May and June.” The scholarships directory is on the GrowingNZ website www.growingnz.org.nz GrowingNZ is an initiative of the Primary Industry Capability Alliance, a membership organisation. The members are: DairyNZ, Beef+Lamb NZ, Ministry for Primary Industries, NZ Young Farmers, Primary ITO, Lincoln University, Taratahi Agricultural Training Centre, Ara Institute of Canterbury, Foundation for Arable […]

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