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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 […]

Bull calves have value – no bull!

In tight times dairy farmers are looking for new ways to add cash to their back pocket and CRV Ambreed believes the cash can often be found in the bull calf. CRV Ambreed’s breeding team manager, Aaron Parker, says a bull calf could provide an extra $4,000 upfront if they are suitable for CRV Ambreed’s breeding programme. A proven bull can provide an additional $7,000 in income from graduation payments – sometimes more if a royalty option is chosen. With calving now underway, this source of extra income could be dropping in the paddock right now. However, Parker says the financial benefits are just one spoke in the wheel. New Zealand dairy farmers will only be competitive long-term with greater genetic diversity and advancement across the national herd. “CRV Ambreed is future focused and we’re building our portfolio to suit the broad range of environments, conditions and farming systems that our clients will be operating within in years to come,” Parker explains. “While elite bull calves are more commonly sourced through contract mating, stud breeders and our embryo transfer programme, it’s the open market – farmers nominating their bull calves for our breeding programme – where the more unique bulls are discovered,” he says. Legacy Friesian bull Firenze and current Jersey star Murmur are two examples of where farmers have offered bulls to CRV Ambreed through the open market, which have not only gone on to reward their breeders, but also the dairy industry as a whole. In the end, Parker says the more bulls in CRV Ambreed’s breeding programme, the greater genetic diversity and the higher genetic gain for New Zealand’s entire national herd. “Every New Zealand dairy farmer benefits by having a herd that produces more high value milk and lasts longer,” he adds. “Farmers we haven’t worked […]

Dairy modules hitting the spot for DWN members

Dairy Women’s Network has received feedback on how its latest professional development offering is being perceived by its members – with impressive results. The network launched its new Dairy Modules programme for the first time in November 2014 and has since had the programme evaluated by the renowned Net Promoter Score system, confirming world class standard. In the past eight months, with the help of its partners, Dairy Women’s Network has delivered free modules on negotiating fair contracts, goal setting, rostering-on-farm, better use of smartphones, budgeting, animal welfare and calf rearing to more than 100 participants in 41 different towns throughout rural New Zealand. The independently rated modules have received excellent scores using the Net Promoter Scores system, which are measured from -100 to 100+ with the Network’s various scores sitting between 53+ to 70+. Dairy Women’s Network chief executive Zelda de Villiers said a score of 30+ is considered “good”. “The three reports that have been completed on smartphones, goal setting and animal welfare, have resulted in upper echelon scores which we are really thrilled about,” she said. “It is particularly heartening to read many verbatim comments from participants in the reports saying things like: “what I have learnt today is unbelievable”, “excellent presenters” and “very informative and motivating to continue on”. “Given that our organisation’s vision is to support and inspire women to succeed in the business of dairying, we are very proud of these results.” The modules replace the organisation’s previous professional development programmes called Dairy Days and Financial Days – nationwide roadshows which ran annually from 2005 to 2014. “In comparison, Dairy Modules are developed with the members’ knowledge of on-farm training needs to ensure the training is practical, farm-focused and developed and delivered by farmers for farmers in a way in that our members prefer […]

Expert’s visit fruition of relationship cultivation

In the picture: BPRC Director Professor Travis Glare with Dr Meng Zhang. Feijoas and Kiwifruit have been on the menu as Lincoln hosted a plant specialist recently to initiate closer working ties around food production with a Chinese province of 90 million people. Feijoa expert Dr Meng Zhang, of Southwest University of Science and Technology (SWUST) in Sichuan Province, spent a month with Lincoln University and the Bio-Protection Research Centre (BPRC) at Lincoln specifically to learn more about New Zealand horticulture production systems, biological protection and bio-control. The visit comes a few months after SWUST’s President, Jun-bo Wang, and Director Guan-zhi Zhang, were in Lincoln as part of a large Sichuan trade delegation intended to further extend co-operation between the two institute. Dr Zhang has setup new collaborations with BPRC Director, Professor Travis Glare, and Senior Scientist, Dr Robert Hill through the hosting. Lincoln University Business Development Manager, Dr Samuel Yu, says Sichuan province has a population of 90 million, with fertile grounds and a good climate for growing agricultural produce. “The province has over 10,000 hectares of land growing red centred Kiwifruit and production has been sensitive to PSA attack and pollination,” Dr Yu says. “Bioprotection techniques could assist farmers that struggle to control PSA, and the Bio-Protection Research Centre has a lot of expertise in this space.” This visit is part of the 2015 China-New Zealand Scientist Exchange Program funded by the Chinese Ministry of Science and Technology and the New Zealand Ministry of Business, Innovation and employment. SWUST have a good relationship with Lincoln which started over 10 years ago through now retired Lincoln lecturer Michael Morley-Bunker. Dr Zhang also met with a range of Lincoln’s staff, such as the international recruitment team’s Patrick Yeung and Anna Soboleva to explore Study Abroad opportunities and Lincoln Agritech […]

More days in milk worth $11 million

Short gestation dairy genetics is expected to generate more than $11 million in extra milk production for New Zealand farmers this spring. LIC experienced unprecedented demand for its extended range of short gestation genetics last mating season (Sept-Dec 2014), for its ability to naturally deliver offspring up to 10 days early, bringing late calving cows forward and increasing days in milk. The farmer-owned co-operative, which breeds around three-quarters of the country’s dairy cows, had previously been researching the genetics solution for more than 15 years on behalf of its farmer shareholders. As a result, an estimated 148,613 calves are due to be born an average 7.5 days earlier this spring, and those animals will have a big impact on a farm’s bottom line says Malcolm Ellis, LIC’s SGL breeding programme manager. “Seven or eight days are pretty significant for a farm’s calving pattern and production, especially in these times of lower payout – because the sooner the cow calves, the sooner she’ll be back in the shed making milk. “Cows that calve early can provide a range of benefits to the farm but ultimately it means more money for the farmer and let’s be honest, I’m sure they could all do with a bit more of that at the moment.” The cows will also start cycling earlier and get back in-calf quicker, Ellis said, providing flow-on benefits beyond than the current calving period. He calculates the extra days in milk to be worth up to $11.2 million in milk production this spring, or $75.60 per cow based on the opening forecast milk price of $5.25 per kg milk solids (MS) and the average daily production of a cow at this time of year, 1.92kg MS per day. “Multiply that across 100 cows, and that’s an extra $7500 for the farmer. […]

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