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Weak dairy prices pull back Fonterra forecast payout for next season

Weak global dairy prices have prompted analysts to pull back their expectations for Fonterra Cooperative Group’s payout to farmers for next season. Average prices dropped 3.5 percent in the GlobalDairyTrade auction overnight. New Zealand’s key product, whole milk powder, slipped an average 1.8 percent, extending its cumulative decline over the past five auctions to 27 percent. Auckland based Fonterra, the world’s largest dairy exporter, last week cut its forecast payout for the current 2014/15 season to $4.50 per kilogram of milk solids, from a previous forecast of $4.70/kgMS and last year’s record $8.40/kgMS, citing an oversupply in international markets and volatile commodity prices. Fonterra is expected to pay farmers between $5.50/kgMS and $5.75/kgMS for the upcoming 2015/16 season, according to a BusinessDesk survey of five analysts, two of whom reduced their forecasts following last night’s GDT auction. The forecasts have come back from a month ago when Fonterra was expected to pay between $5.75/kgMS and $6.20/kgMS for the upcoming season. The cooperative is expected to publish its forecast for next season following its May 27 board meeting. Global dairy prices have slumped amid higher production and weaker demand. Fears that drought conditions in New Zealand could crimp milk supply proved unfounded, with Fonterra now expecting production this season to lift 1.5 percent from last season, from a previous forecast that it could fall 3.3 percent. Meanwhile, demand is weak, particularly in China, the world’s biggest importer of dairy products, with New Zealand whole milk powder exports to China in March less than half what they were a year ago. The challenge for dairy prices at present is supply has proved to be relatively strong while demand has proved slow to recover,” ASB Bank rural economist Nathan Penny said in a note. “Dairy prices are low and staying there a while longer. […]

Bayer innovation helps secure barley world record

Innovative crop protection products from Bayer CropScience have helped a New Zealand farmer break the world record yield for barley. Warren and Joy Darling, from Timaru, produced 13.8 tonnes per hectare, easily breaking the previous record of 12.2 tonnes, held by Scottish grower Stockton Park since 1989. The new record was officially ratified by Guinness World Records on April 15 after the crop was harvested on 23 January 2015. Bayer New Zealand managing director and head of Bayer CropScience in New Zealand, Dr Holger Detje, says the company is delighted with the role it played in achieving the record. “Bayer provided the entire seed treatment, weed and disease control program, including our newly launched fungicide Aviator Xpro. “Other key products included seed treatments Poncho and Raxil and herbicides Firebird and Hussar™. “We are particularly pleased that these crop protection solutions safeguarded this magnificent barley crop, which has resulted in a world record yield,” says Detje. While Bayer’s products and the in-field expertise from Timaru-based Bayer Territory Manager David Weith played a major role, Detje highlighted the importance of collaboration in achieving the record. “Many factors determine the success of a great crop like this – soil, climate, technologically advanced farming machinery as well as farm inputs like the seed variety, nutrients and crop protection solutions. When the suppliers of these specialised inputs collaborate with skilled farmers like Warren, you see very healthy crops with excellent yields. The realisation of the barley world record shows that New Zealand farmers are among the best in the world.” “World-leading farmers like the Darlings ensure that we will be successful in our ultimate quest to ensure healthy and sufficient food for all people world-wide,” adds Detje. Bayer CropScience has a significant presence in New Zealand agriculture across all parts of the industry. “We are […]

Berries and from China refuels Country of Origin labelling debate

By Stephanie Melbourne New phone scanning technologies could add a new angle to Country of Origin labelling, which traditionally in New Zealand has been a voluntary practice for the food industry to use as a marketing tool, even though it is required in Europe, the United States, Canada and Australia. A recent labelling issue in Australia regarding frozen berries imported from China has further fuelled the ongoing debate surrounding Country of Origin Labelling (CoOL) highlighting its relevancy and the value of knowing exactly where the food we eat comes from. The Australian CoOL standard which commenced in 2006 requires mandatory country of origin labelling on all packaged foods, fish, pork and fresh whole or cut fruit and vegetables. They also have guidelines for the use of the terms “Product of Australia” and “Made in Australia”. Since then, there has been a raft of public reviews, and legislative and regulatory attempts to clarify the laws relating to CoOL in Australia. Last month a brand of frozen mixed berries imported from Chile and China was recalled by the Food Standards Authority of Australia and New Zealand after links were found to a Hepatitis A outbreak in Australia. In this case, the packaging contained the words “Packaged in Australia” in large print and “Made from local and imported ingredients”, although the large majority of the berries were imported. This has prompted calls from the Australian government to take yet another look at its CoOL requirements under the Food Standards Codes. Typically, product labels contain statements like “made in” and “product of”. But what does “Made in [country] from mostly local ingredients” mean? Does more than 50% of the product need to be from the specified country of origin? It is these statements which generate the most confusion amongst shoppers. Here in New Zealand […]

Popular calf nutrition workshop is back

Dairy Women’s Network and SealesWinslow, a subsidiary of Ballance Agri-Nutrients, are again running free calf nutrition workshops throughout the country after last year’s “extremely successful” events. SealesWinslow’s Nutrition and Quality Manager Wendy Morgan said Dairy Women’s Network had already received expressions of interest from 14 regions throughout rural New Zealand, highlighting just how valuable the best practice workshops are to successful operations. “Farmers recognise how important it is that they get calf rearing right,” she said. “Last year’s Calf Nutrition Days were very well attended by those new to calf rearing, as well as those who had been doing it for years, and it looks like the workshops will be just as popular again this year.” She said the calf nutrition days are best practice-focused, but take into account that every farm has different calf rearing facilities, so provides practical ways to make the best use of existing pens, equipment and systems. “We will cover successful task planning, your calf rearing teams and being aware of the different roles required, as well as best practice calf housing and set up.” Wendy will also do an in-depth session on evaluating feed options and what to look for in calf feed “That includes looking at what a calf actually needs in feed, as well as what it doesn’t,” said Wendy. The workshop is interactive and social, allowing attendees to draw on the knowledge of those taking the sessions, but also others who attend that have been calf rearing for many years. The workshop agendas have been updated this year to make sure common topics that people asked about at last year’s nutrition days are included. To find out more and to register, visit www.dwn.co.nz North Island dates: • Mid-Northern 22 June • Far North 22 June • Whangarei 23 June • North […]

Sheep industry awards finalists

Finalists in the 2015 Beef + Lamb New Zealand Sheep Industry Awards have been announced today. The awards are now in their fourth year and Beef + Lamb New Zealand chief executive, Dr Scott Champion said they were a great way of recognising and celebrating excellence in the industry. “It’s right that we acknowledge the top performers and showcase our industry, which is a significant contributor to the New Zealand economy.” Beef + Lamb New Zealand Farmer Council national chair, Martin Coup, who also chairs the awards judging panel, said the New Zealand sheep industry could take heart from the high quality and quantity of this year’s nominations. “The judging panel was particularly impressed by the calibre of nominees in the new Emerging Talent category.” The Beef + Lamb New Zealand Sheep Industry Awards winners will be announced at the Ascot Park Hotel in Invercargill on Wednesday 1 July 2015. INDUSTRY AWARDS FINALISTS Blackdale Stud Sheep Industry Supplier of the Year Alister & Jeanette Maxwell, Rakaia, supplying ANZCO Stuart Ellingham, Horizon Farming Limited, Waipukurau, supplying Progressive Meats James & Jane Hunter, Waipukurau, supplying Lean Meats Wilson & Gaylene Ronald, Otautau, supplying Alliance Group Focus Genetics Sheep Industry Science Award Dave Leathwick, AgResearch Grasslands John McEwan, AgResearch Invermay Sin Phua, AgResearch Invermay Shannon Clarke, AgResearch Invermay Primary ITO Sheep Industry Trainer of the Year Terry Walters, formerly Smedley Station, Waipawa Tangihau Station (Dean McHardy), Gisborne Waipaoa Station Farm Cadet Training Trust (Geoff Hornblow), Te Karaka, Gisborne Farmlands Individual or business making a significant contribution to the New Zealand sheep industry Robin Campbell, Winton Errol Holgate, East Taieri, Dunedin Derek & Chris Daniell, Masterton Holmes Warren, Featherston Allflex New Zealand Sheep Industry Innovation Award Aaron Meikle, Oamaru John Reeves & Keith Abbott, Waikato Matt & Lynley Wyeth, Masterton Ballance Agri-Nutrients Sheep Industry […]

New dairy forecaster helps farmers plan in challenging times

Updating a milksolids revenue forecast has been significantly simplified, thanks to the release of a new Dairy Forecaster module for Cashmanager RURAL. The new Dairy Forecaster helps farmers estimate how much revenue they can expect to receive in the coming season. CRS Software managing director Brian Eccles says farmers using the cloud based online service also get automatic price updates. At the click of a button, the latest advance and top-up payments applied to estimate the new cashflow. “This is not just a simple forecast. It combines year to date production with the forecast remaining to calculate revenue for the whole season,” he says. “This information drives the overall cashflow forecast and, when combined with a spending plan, is able to assist the farmer to confidently estimate the year end position. This knowledge further informs good decision making.” Lawrence Field, of Masterton-based accounting firm RURAL CA, says the forecaster makes it easier for accountants and bank managers to keep right up to date with the latest picture. “Everything is on one page which makes it easy to follow and all you need to do is input your production estimates and the change in payout automatically feeds through.” Field says if there was ever a time farmers needed to update their forecasts it is in the current environment. “We have really volatile payouts and a lot of farmers impacted by drought. It’s a double whammy and we have to know what currently cashflow is looking like because otherwise we are in the dark and heading for tough times.” Eccles says that the initial release is set up with configuration options for three of the largest dairy companies – with more to follow. The Forecaster also caters for sharemilkers and contract milkers.

NZX adds iFarm to its AgriHQ business

NZX has bought iFarm, the livestock market information business, for an undisclosed sum from owners Jon Sherlock and Peter Fraser and will add the firm to its AgriHQ data business. The Napier based agriculture service publishes rep orts covering export data and prices as well as a wrap up of stock sales across the country, the Wellington based exchange operator said in a statement. The acquisition price was confidential and wasn’t material. “The iFarm business is a great strategic fit with our existing AgriHQ data product set, broadening our data and analytics offering to farmers and corporate subscribers, both nationally and internationally,” NZX chief executive Tim Bennett said. Last week, NZX said sales from its agricultural operations slid 12 percent to $2.6 million in the three months ended March 31, due to lower advertising income in its print publications. Shares of NZX were unchanged at $1.16 and have fallen 0.9 percent since the start of the year.

New research unlocks genetic secrets behind footrot in fine-wool sheep

New Zealand’s fine wool sector is a step closer to eradicating footrot thanks to ground-breaking research in sheep genetics. The FeetFirst project, part of a Primary Growth Partnership between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries, is using genetic testing to identify fine-wool sheep with resistance to footrot. Researchers are now close to developing a simple test for growers to eliminate footrot using selective breeding. It is estimated that footrot costs New Zealand’s fine wool sector up to $10 million each year in lost productivity and treatment. John Brakenridge, NZM chief executive, said finding an answer to reduce footrot in fine wool flocks would significantly improve the sector’s profitability. “Enquiries for New Zealand fine wool is increasing because it is of the very highest quality and integrity. “Footrot is one of the biggest barriers to producing fine wool. It also limits the expansion of fine wool breeds beyond the high country because wetter, warmer conditions are more conducive to infection. “The answer will be a simple and effective genetic test that farmers can use to combat footrot through selective breeding.” More than 3500 DNA samples have been genotyped so far using SNP (single nucleotide polymorphism) chip technology. Geneticists based at the Animal Genetics and Breeding Unit of the University of New England have done initial tests on the dataset to see how accurately a sheep’s resistance (or susceptibility) to footrot can be determined from DNA samples. NZM Production Science Manager, Dr Mark Ferguson, said the goal of the project was to develop a new genomic breeding value (gBV). “Genetics plays a major role in fighting footrot because some sheep are genetically less susceptible to the disease. The development of an accurate gBV will be a major breakthrough in allowing breeders to predict footrot resistance from […]

Fonterra cuts forecast payout to $4.50/kgMS on volatile dairy prices, over-supply

Fonterra Cooperative Group, the world’s biggest dairy exporter, has cut its forecast payout to farmers by 20 cents, blaming volatile global commodity prices and an over supply in international markets. The Auckland based company has reduced its forecast farmgate milk price to $4.50 per kilogram of milk solids from $4.70/kgMS, and retained its estimated dividend range of between 20 and 30 cents, it said in a statement. Fonterra also expects New Zealand milk production to rise to 1.607 million/kgMS in the current season from 1.584 million/kgMS a year earlier. “We have confidence in the long term fundamentals of international dairy demand, however the market has not yet rebalanced and GDT (global dairy auction) prices for products that inform our Farmgate Milk Price have fallen 23 percent since February,” chairman John Wilson said. “This reduction will impact cash flows for our farmers, who will need to continue exercising caution with on-farm budgets.” The reduced payout follows rival Westland Milk Products, which yesterday cut its forecast to between $4.90 and $5.10/kgMS from a previous forecast of $5 to $5.40/kgMS. Fonterra this month reshuffled its management team in a bid to push its value-add strategy harder after shareholders criticised its weak first half result and lower forecast payout. Units in the Fonterra Shareholders’ Fund, which give investors exposure to the cooperative’s dividend stream, last traded at $5.38, and have declined 10 percent over the past 12 months.

NZ Merino inks $8 million contract to supply US-based SmartWool

The New Zealand Merino Company, which markets the nation’s wool to customers on behalf of suppliers, has inked an $8 million one year deal to supply 600 tonnes of New Zealand fine and medium micron wool to US sock and apparel manufacturer SmartWool. NZ Merino aims to boost sheep grower returns from wool through supply agreements with companies such as New Zealand outdoor clothing brand Icebreaker and Danish slipper manufacturer Glerups. The SmartWool supply contract continues an 18 year partnership which has been worth $150 million to NZ Merino growers. “The SmartWool contract is testament that a new way of doing business can work in our commodity based primary sector,” NZ Merino chief executive John Brakenridge said in a statement. “There certainly seems to be heightened awareness of this model now in the primary sector. It brings producers closer to end users and that’s important in making sure we supply a premium offering. It means NZM growers get the best possible return.” Colorado based SmartWool’s parent company, VF Corp, counts The North Face, Timberland and Vans among its global brands. SmartWool started as a ski sock brand in 1994 and has since diversified into performance and lifestyle apparel, selling products in 40 countries. SmartWool’s customers were increasingly interested in the company’s ‘brand story’, particularly fibre that was accredited through NZ Merino’s ZQ programme which requires standards for animal welfare, environmental care and social sustainability, as well as the high quality of the wool, said SmartWool president Mark Satkiewicz. The company’s focus on new product innovation required more complex fibre micron and volume analysis in advance of the contract, Satkiewicz said.

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