Business

Meat industry shareholder groups merge to push their case for reform

The two shareholder groups representing Silver Fern Farms and Alliance farmers have joined forces in a bid to encourage the two meat cooperatives to follow suit and work collaboratively. Each shareholder group has separately gained the 5 percent farmer support needed to call special meetings of their respective cooperatives to try and force the boards to investigate the benefits and risks of a merger, though dates have not yet been set for either. Alliance shareholder Jeff Grant said it is best to wait on the outcome of Silver Fern Farm’s current capital raising before holding either meeting. “If the capital raise changes the structure of the cooperative to be a non cooperative or in foreign ownership then it would be pointless having an SGM (special general meeting) at all,” he said. Silver Fern Farms suspended trading of its shares on the Unlisted exchange in late July while it tried to raise $100 million of new capital through investment bank Goldman Sachs. The company said today the capital raise process is continuing though it’s understood from meat industry sources an announcement could emerge by the end of the week. Grant said it seemed sensible to hold the Silver Fern Farms meeting first, followed by the Alliance one. He said the SFF board had indicated this will likely mean the SGMs will be held in late September or October but the timing is ultimately in the hands of the cooperative boards. Silver Fern Farms shareholder Allan Richardson said there remains an opportunity for the two groups to work together over the next couple of months to continue encouraging the two cooperatives to find a pathway forward for farmer shareholders which will give some confidence in the industry. Grant said the farmer feedback is that they want the two cooperative chairmen to take […]

Young Grower from Pukekohe wins national title

Hamish Gates from Pukekohe has been named Young Grower of the Year 2015. Hamish secured his place at the national competition after being named New Zealand Young Vegetable Grower 2015 in April. The carrot washline supervisor works for AS Wilcox & Sons in Pukekohe. The final phase of the competition saw five regional champions battle it out in a series of practical and theoretical challenges that tested their essential industry knowledge and skills. Julian Raine, President of Horticulture New Zealand, said the competition demonstrated the high calibre of ability in the country. “We have come to expect an outstanding level of talent in the competition and this year’s finalists were no exception. The knowledge and skills Hamish showed throughout the competition clearly demonstrated his ability to succeed in this industry. He gave each challenge his all, and it was this commitment that helped him come out on top.” The challenges ranged from an environment and sustainability exercise, to pest and disease identification, and quad bike health and safety. Competitors also had to participate in a leadership panel, and present a three-minute speech on the role of innovation and technology in the industry. Hamish, 24, said winning the national Young Grower of the Year 2015 title was an honour given the standard of the competition. “I feel really privileged to have won the competition. The other growers are at the top of their game and it was a tough challenge, so I am proud to be able to take this award back to Pukekohe,” says Hamish. “I learned a lot from the competition and have gained a huge amount of confidence in my ability as a grower. Hopefully my success will encourage other young people from across New Zealand to get into this great industry.” As Young Grower of the Year […]

Destruction of our soils more serious than climate change

An international soil scientist says restocking the world’s arable soil with carbon is more important than climate change. Dr John Baker says too many people around the world treat soil like dirt when it should be revered because “our lives depend on it.” He believes that because soil isn’t sexy, is not on our radar and is metaphorically beneath us, it’s taken for granted by many farmers and ignored by politicians and city dwellers. “Instead people are besotted by climate change when improving soil health and feeding the world is more important,” he says. “Climate change, while serious, is not going to starve you but the rape of our soil over the last 1,000 years through traditional tillage methods, is already leading to reduced crop yields and will eventually result in famine and malnutrition.” Dr Baker says alarming figures provided by the United National Food and Agriculture Organisation (FAO) and the UK Farmers Weekly suggest the quality of soil is rapidly diminishing. FAO predicts the world, on average, has 60 more years of growing crops left while the Farmers Weekly claims that only 100 harvests remain in the UK. Eighty percent of the world’s food comes from crops. Ironically climate change and soil health are closely related and can benefit each other Dr Baker, who has a MAgrSc in soil science and Ph.D in agricultural engineering from Massey University, New Zealand, explains. “Soil health is strongly influenced by the amount of carbon in the soil. That carbon has been oxidised by conventional tillage (ploughing) and even minimum tillage and discharged as carbon dioxide back into the atmosphere. Tillage does nothing to recapture it,” he says. “As a result the carbon that was in the soil is now in the atmosphere and contributes to climate change when it should be back […]

Breaking the cycle – farming sustainability requires change

By Phil Beatson – Genetic Development Strategist at CRV Ambreed Albert Einstein once said the definition of insanity is doing the same thing over and over again and expecting different results. The need for change in the dairy industry has prompted me to revise an article I originally wrote back in 1999 that is still very much relevant today. When it comes to the ongoing economic welfare of today’s farmers – the backbone of New Zealand’s largest industry – all sectors must work together to create change. As history demonstrates, without change, we will continue to get the same results. In 1999 the payout was at $3.42. Back then, I stated that unless growth in production was controlled and emphasis placed on consumer products, farmers faced a payout of $3.10 (in 1999 dollar terms) by 2017. The fact that $4.40 today translates to $3.01 in 1999 dollar terms has prompted this contribution. In a nutshell: I believe no one should be unduly surprised by the dairy payout being in the $4-$5 range, although this season’s $3.85 payout is a record low in CPI adjusted terms. After all, in 14 of the last 22 years (if next season’s projected payout is considered), the CPI-adjusted payout has started with a $3, $4 or $5. As illustrated in the accompanying graph, in only six of the past nine years and in two seasons at the beginning of the century has the payout started at $6, $7 or $8. Source: Dairy Statistics 2014. 2015 and 2016 values are Fonterra’s forecast payouts. These recent ’high’ payouts have been solely due to China’s demand while those in 2001 and 2002 were due to America diverting grain from dairy to biofuel production. This trend has simply continued the long-running erosion of the payout; back in the 1950s […]

Dairy sector needs to work together to manage downturn

National accounting and business advisory firm Crowe Horwath is calling on all stakeholders in the dairy industry to work together to help the sector get through the current difficult period of lower milk solid prices. On the back of dairy companies announcing a string of forecast milk price downgrades and prices continuing to plunge at the Global Dairy Trade (GDT) auctions, predictions are the current hard times for the dairy sector could potentially last another 18 months to two years. Crowe Horwath says given the scale of the challenge now being faced by the industry, doing nothing is not an option for anyone involved, including farmers, banks, farm consultants and business advisors. To back its call, the company is encouraging a collaborative national response across New Zealand agribusiness to address the challenges and ensure farmers receive the best advice and support to get through. Crowe Horwath Head of Agribusiness Neil McAra says the payout has dropped further and looks to be staying lower for longer than anyone expected and this means action is required. Crowe Horwath has met with key players in the industry including the banking sector, farm advisors and rural support networks to help prepare a Best Practice Action Plan for its advisors to work through with their dairy clients. “In the first instance as business advisors we need to manage financial stress, which means knowing what the banks need from our clients and ensuring we help them in providing this, McAra says. “Secondly, it’s about working with the other industry players to facilitate a comprehensive support network being wrapped around the farmer. Our action plan provides guidance along these lines for our advisors. McAra says a collaborative approach is vital with several key players needing to be involved. “Farmers and rural professionals need to understand each other’s […]

Seeka to buy Australia’s Bunbartha Fruit Packers for A$m22

Seeka Kiwifruit Industries, the country’s biggest kiwifruit grower, has agree dot buy Australia’s Bunbartha Fruit Packers for A$22 million, making it the biggest kiwifruit grower on both sides of the Tasman. The deal is expected to be completed on Aug. 20, subject to regulatory approvals including Foreign Investment Review Board sign-off. Seeka has set up an Australian-based subsidiary to acquire the business, it said in a statement. The purchase will be funded through debt facilities and includes a deferred payment element, while sellers Jamie Craig and John Karl will continue to be involved in the Australian business. Bunbartha generates annual revenue of $17 million, and is expected to lift Seeka’s earnings before interest, tax, depreciation and amortisation by between $3.2 million and $4 million. Seeka will acquire 505 hectares of land in Shepparton, Victoria, and all prime water shares linked to the properties. “The fruit produced and marketed by BFP (Bunbartha Fruit Packers) broadens and complements Seeka’s existing offering of kiwifruit, avocadoes and kiwiberries,” chief executive Michael Franks said. “We expect to add further value through the synergies that both businesses can deliver to each other from internal optimisation and market expansion.” In June, Seeka reported a better-than-expected harvest for the 2015 season, which would likely be positive for earnings, but crimp tray returns from global marketer Zespri International due to the bigger crop. Seeka said it will continue to look for acquisition opportunities, and is reviewing its mix of assets to ensure they fit with the company’s strategy. “Our current focus is on the integration of BFP into the Seeka group and putting management, compliance, safety and reporting systems in place,” Franks said. The shares were unchanged at $3.15 and have declined 2.5 percent this year. The announcement was made just before trading closed.

NZ’s top ag consultants named

Three winners have been named in the third annual Farmax Consultant of the Year Awards in Ashburton overnight. The winners are: Sully Alsop of Baker and Associates in Masterton who won the Beef + Lamb NZ Sheep and Beef Consultant of the Year title; Phil Journeaux of AgFirst Waikato who won the DairyNZ Dairy Consultant of the Year; and Lycinda Lett, also from AgFirst Waikato who was named the NZIPIM Emerging Rural Professional of the Year. Sponsored by Dairy NZ, Beef + Lamb NZ, New Zealand Institute for Primary Industry Management and the Ministry for Primary Industries, the awards are open to all agricultural consultants and the prizes won by each category winner include: • A Windows tablet • A paid overseas study trip • Funds for personal development; and • 40 paid hours to undertake a research project to benefit New Zealand’s agriculture industry. Sully Alsop Alsop trained at Smedley Station and Massey University and for the past nine years, has worked as a sheep and beef consultant and director for Baker & Associates in Masterton. He also runs a 3000-unit sheep and beef farm with this wife. Alsop also recently came second in the ANZ New Zealand Young Farmers Contest. Farmax general manager Gavin McEwen said Alsop is a great example of the “new breed” of consultant. “Sully promotes excellence, gets involved and puts himself out there,” he said. “His areas of expertise are strategic planning, business management and high performance sheep and beef production.” Phil Journeaux Journeaux joined AgFirst’s Waikato office in 2012, after 25 years with what was then the Ministry of Agriculture and Forestry. He has worked in agriculture all of his working life, covering a wide range of the industry. Farmax general manager Gavin McEwen said that Journeaux was not your typical consultant. “He […]

US market offers huge potential for New Zealand wines

New Zealand wine exports to the United States are growing faster than to our traditional international markets of Australia and the UK, and that pace is being matched by increasing recognition at the top competitions. In the five years from 2010-2015, exports of Kiwi wines increased three times faster than the UK and Australia. For the 12 months ended April 2015, New Zealand exported 5.88 million cases of wine to the US – up three million since 2010. During that period, exports to Australia increased to 6.4 million (4.8 million five years ago), and in the UK to 6.3 million (4.7 million). Giesen Wines began exporting to the US in 1997 and these exports now make up 10% of total sales. Alex Giesen said the US market is changing dramatically from a New Zealand perspective. “This is the fastest growing mature market and is increasing at a faster rate than Australia and the UK. We think it will become New Zealand’s biggest market by value and volume in the next 12-24 months. At the moment, it’s second by value and third by volume. “With the growth the US has experienced in sales of New Zealand Sauvignon Blanc over the past 10 years, we’re quickly gaining the reputation as a serious winemaking country.” Giesen’s wines are winning impressive plaudits from international judges at US competitions. At the LA International Wine Competition Giesen won two Best of Class medals, five golds, three silvers and three bronze. And at the most recent New York International Wine Competition, it was named Marlborough Winery of the Year. “The US has a real thirst for our wines, and particularly Marlborough Sauvignon Blanc. It’s a very easy drinking, fruit forward varietal that’s always popular. Marlborough Sauvignon Blanc is really driving this category in the US now and […]

Yashili, Danone collaboration to include new Pokeno milk plant

Chinese owned Yashili International Holdings will collaborate with French dairy giant Danone on its new $212 million plant in Auckland, as part of a wider deal for the Chinese milk formula maker to buy Danone’s Dumex China brand amid tightening competition in the world’s largest infant formula market. Yashili, which is 25 percent owned by Danone and one of China’s top 10 infant formula makers by sales, said it plans to acquire Dumex Baby Food for an undisclosed amount. Danone will use the proceeds to buy shares in milk producer China Mengniu Dairy, which owns an indirect 51.04 percent stake in Yashili. The filing to the Hong Kong stock exchange also said Yashili and Danone intend to collaborate in New Zealand with respect to a manufacturing plant with the aim of “achieving synergies and support in various areas”. The official opening of Yashili’s Pokeno plant has been delayed eight months until October while the company awaits the required approvals under China’s complex food safety regulations. The company has been negotiating with Fonterra Cooperative Group and Open Country Dairy for raw milk supply. Yashili had previously imported milk powder from New Zealand for 10 years. The factory will be the biggest single drying plant for infant milk in Asia, processing 300,000 litres of milk daily when it reaches full production. All of its products will be exported to China, where its website said infant formula sales are expected to grow to $32 billion by 2017. Danone’s local subsidiary, Danone Nutricia, ended its supply contract with Fonterra after the August 2013 botulism scare and launched a $1 billion law suit against the dairy cooperative in compensation for disrupted sales. It has since been sourcing product from Synlait and other manufacturers and last year bought two Kiwi dairy processing companies, Sutton Group and […]

Smartest executives selected for Prime Minister’s Business Scholarship

For Carolyn Paewai-Young, being a recipient of the Prime Minister’s Business Scholarship means two trips to France next year to one of the world’s most prestigious business schools, and the added knowledge to help grow Palmerston North-based, Prepared Foods. Carolyn is the newly appointed General Manager for the company, which is part of the largest Iwiowned fisheries company in New Zealand, Aotearoa Fisheries Ltd. She has worked her way up, starting as a Food Technologist 23 years ago. Carolyn is one of just twelve to receive the scholarship which allows New Zealand’s smartest executives and business owners to expand their international expertise, and grow their business skills to help make Kiwi firms more internationally competitive. Fifty per cent of the cost of the study is funded by the Government, and Carolyn has chosen to study Transition to General Management through INSEAD. She is delighted to have been given the opportunity, and with the support she has received over the years at Prepared Foods. “I’ve had the opportunity to progress through the company and learn the whole business from operations, logistics to sales and finance. I’ve worked hard to achieve what I have accomplished, but it’s worth it with such a great bunch of committed staff” she says. During her time at Prepared Foods she has completed a Post Graduate Diploma in Nutrition on her own time. During that time Prepared Foods won the tender to supply Retort pouch meals for ration packs to the Australian Army. Prepared Foods has also expanded into producing unique and innovative ready to eat meals for global retail and foodservice channels and with her new knowledge and change in role from Operations Manager to General Manager, Carolyn believes this is an area where there is plenty of room to build the business. “That is why […]

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