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LtoR Stuart Gordon CEO of Waikato Innovation Park Minister Steven Joyce and Hamilton Mayor Julie Hardaker Oct2014

Waikato Innovation Park receives $3M to ramp up value-added food production

The Waikato Innovation Park has received a $3 million equity injection from Callaghan Innovation. It will use the funds to kick off a $5.0 million expansion of its FoodWaikato spray drying facility this month. At full capacity, the new manufacturing capability is expected to inject an additional $38.5 million per year in export revenues back into the New Zealand economy from the sale of new, value-added consumer products. “With this expansion, FoodWaikato will provide a greater level of development and innovation capability to dairy companies – that’s cow, goat and sheep – as well as fruit and vegetables producers. “We’re moving from helping our customers manufacture ingredients that sell for around US$4,700 per tonne to US$20,000 per tonne. At full capacity, we will produce around 2500 tonnes of new, value-added products,” explained Waikato Innovation Park CEO, Stuart Gordon. Science and Innovation Minister Steven Joyce said the investment aligns with Callaghan Innovation’s goal of accelerating commercialisation of innovation by firms in New Zealand. “The expansion of FoodWaikato provides more open access facilities that support smart ideas coming out of the food and beverage sector. “With an estimated $38.25 million per year of additional export revenues expected to flow back into the New Zealand economy due to this one initiative, the FoodWaikato plant expansion will help more companies take their innovations to new export markets and help the Government reach its goal of doubling the value of exports by 2025,” Joyce outlined. Stuart Gordon said expanding the facility is all about helping more companies take their innovations to new export markets. “There’s no other open access spray drying facility in Australasia where companies can manufacture smaller runs of their first commercial batch of a new product. The only option for them is to build their own plant, which is cost-prohibitive for most companies […]

Rural Contractors question machinery and parts costs

Rural Contractors New Zealand is questioning the high cost of machinery and parts that contractors and farmers are currently paying. RCNZ President, Steve Levet says with the falling forecast milk price for the coming season dairy farmers are going to be careful when making decisions this year – and cost cutting will be top of mind. “With the reality of a lower dairy payout this year, sheep and beef farmers already under the pump and arable producers also feeling the squeeze – further pressure is going to come on contractors to at least hold or reduce our costs,” he explains. “Rural contractors do not have the luxury or the ability to absorb continued cost increases and just pass them on in our pricing to clients. So while farmers are not able to wear any price increases; contractors certainly cannot afford to carry on losing money either.” Mr Levet says rural contracting is a tough business and in today’s highly competitive environment it is not easy to make a profit.“Contractors are already running pretty tight operations and there is not a lot – or in most cases any – fat to cut.” He says like their farmer clients rural contractors will have to look at reducing their costs. “For most rural contracting business; one key area of cost is that of machinery and parts. Ask anyone about the costs of parts and they will all tell you the same thing: eye-watering!” Mr Levet says this has seen many contractors – and farmers – look at sourcing parts from either non-aligned dealers and/or the internet. “Just like consumers in the other parts of the economy; many rural contractors are finding the attraction and availability of cheaper goods via the internet a genuine way for them to cut costs.” He admits there are […]

Upskilling one strategy to cope with lower payout

With the announcement of a drop in Fonterra’s forecast milk solid payout, there’s an urgent need for farmers to review and revise budgets and to monitor cashflow going forward, to ensure debt levels don’t rise unnecessarily. Agribusiness management training is one way that farmers can address these issues and apply better management practices to their businesses. As farm budgets come under scrutiny, farmers may need to cut back on spending or look at increasing their milk production and improve on-farm performance, to offset the lower payout. Primary ITO’s Diploma in Agribusiness Management supports farmers to hone their business management skills so they can manage risks like a volatile payout and take control of their business. Key learning areas such as Business and Finance, where students learn how to develop and monitor financial plans, monitor on-farm performance against objectives, and develop a budget to share with their bank manager or accountant, are all directly applicable to the farmer’s own business. Cath Blake, Manager of Dairy Training Limited, says “Good cashflow budget development and implementation are core parts of successful and profitable business performance. The skills farmers gain by completing the Diploma in Agribusiness really assist in managing financial risk such as the drop in payout this season. This financial capability helps farmers to look to the future goals of the business and gives long term confidence that the dairy industry is a great business to be in.” The cost of human resources can also be a point of contention when budgets are tightened. Staff are often let go of or professional development and training costs are slashed at times of reining in expenses. Mark Paine, DairyNZ strategy and investment leader (people and business) says “Recruiting the right staff and keeping staff motivated can mean staff turnover is reduced. The cost of […]

Kiwifruit grower Seeka joins Psa class action against MPI

Seeka Kiwifruit Industries, the country’s biggest kiwifruit grower, will join the $885 million class action against the Ministry for Primary Industries over the 2010 outbreak of Psa-V vine disease, seeking compensation for the devastation of golden kiwifruit crops in the Bay of Plenty. The Te Puke-based company estimates the Psa bacteria has cost it more than $45 million, and prompted it to slash its workforce by 40 percent to mitigate the impact of the outbreak, which is still impacting on the kiwifruit grower and coolstore owner. “Having fully considered the financial and human impacts on Seeka and its people of the alleged biosecurity breach and the loss of wealth by our shareholders, Seeka has taken the decision to join the class action,” chief executive Michael Franks said in a statement. “Seeka has seen the legal opinions both for and against and offers no opinion on their merits, other than to say in our opinion, there is merit having them tested.” Last week, Zespri International, the country’s kiwifruit market body, urged growers not to join the action, saying it would compromise the industry’s relationship with the government and complaining it had not been consulted before the action was launched. Seeka said it rejected any argument the claim would put Zespri’s statutory monopoly export position for all foreign markets bar Australia at risk, saying “the government has on a number of occasions outlined its responsible policy that so long as growers support the single desk then the government will leave the desk settled.” The kiwifruit grower reiterated its support for Zespri, and said the single desk isn’t involved in the action. “We understand the group of growers seeking support for this action considers it to be a matter of accountability and compensation,” the company said. Shares of Seeka last traded at $3.10 […]

Foreign Asset Sales: Are they worth it?

By Hayden Dillon The current sale of Lochinver Station and the wider debate around foreign investment in land assets (both rural and residential), has the issue of direct foreign investment in land at the top of the queue of hot issues. Much of the discussion has been emotive, and that is entirely legitimate, but it’s the economic debate that seems to have been lost. We pose the question, “What is the economic return to NZ Inc. by allowing foreign direct investment in land?” Many of the public offerings in the NZ market place that are targeting an investment in farming, offer returns of around 3-4% cash return, and an 8-9% capital return. Importantly, the capital return (if treated appropriately) is tax free. Given that much of the NZ Inc. Agribusiness value is tied up in the value of our rural land, it seems the first major test appears to fail. Profits from a gain in the value of land are not taxed, (if managed appropriately) so there is no return for NZ Inc., particularly if those funds are repatriated and not invested into better (i.e. greater than 3-4%) cash-returning assets. Of course, there is the counter argument that if the capital is released and applied to a better returning asset, then there is some value. Using the Lochinver Station example, it can be argued that NZ Inc. is releasing capital from one lower performing asset to invest in a higher performing asset, which has a better outcome for NZ Inc. But in the Crafar farms example, that capital simply repaid debt. What is done with the Lochinver purchase from an economic perspective in the future, will be the final determinant as to whether NZ Inc. benefits. As yet, we don’t have that information. The Crafar example also showed another factor to […]

Vitafoods Asia Strengthens its Position in the Nutraceutical Industry

Singapore: Vitafoods Asia, the only Pan-Asian event dedicated exclusively to the nutraceutical industry, recently concluded its fourth edition on a high note, reinforcing its status as the definitive exhibition for the market. More than 170 suppliers from all over the world, including ADM, Chr. Hansen, Epax, Huisong Pharmaceuticals and Malaysian Biotech Corporation, showcased the latest nutraceutical innovations in ingredients, raw materials, as well as functional food and drinks during the two-day event. Held in Hong Kong’s AsiaWorld-Expo from 3 to 4 September 2014, Vitafoods Asia welcomed a total of 2,474 trade professionals from across the region, which represented an 11% increase in visitor attendance. This year, a large proportion of visitors were senior decision-makers, including executives from companies such as Danone, Blackmores, Korea Yakult, Tate and Lyle, and a number of leading distributors. As the Asian nutraceutical market continues to gain strong interest on the international stage, industry players expect the region to increase in dominance. Analysis by Frost & Sullivan confirms this, as the Asia Pacific region generated the largest demand for the global nutraceuticals market in 2013, contributing to 37% of total market revenue, which is valued at US$175 billion. Chris LEE, Portfolio Director, Vitafoods, said, “The Asian nutraceutical market has performed extremely well in the last decade and there is every indication, both empirical and anecdotal, that Asia will continue to lead the global market in the years ahead. The show is well poised to support the region’s growth, and we look forward to bringing more of the industry together to help them realise the full potential that the market possesses.” Professional and Specialised Trade Event Exhibitors at this year’s event were pleased with their decision to participate, citing the show’s specialised audience, the focus on doing business, and its level of professionalism as key benefits. Some […]

NZ economy – changing down a gear?

Forward-looking indicators give cause for optimism in the latest BusinessNZ Planning Forecast. The Forecast for the September quarter signposts economic growth at an annual rate of around 3 percent, at mixed levels across various sectors and regions. Business and consumer confidence remain positive, meanwhile the Christchurch rebuild and Auckland housing growth are driving a buoyant construction sector. While strong net migration inflows and robust housing and construction activity could be expected to increase inflationary pressures, Reserve Bank statements indicate that the economy has already responded to interest rate hikes earlier this year. BusinessNZ Chief Executive Phil O’Reilly says with pre-election uncertainty now resolved, it will be hoped that regulatory policy can be improved to address some of the factors holding the economy back, including housing affordability. “It is helpful that the issue has been taken out of the political arena, with land supply processes now being reviewed by the Productivity Commission.” Mr O’Reilly said the health of the economy would be significantly influenced by prudent management of government spending. “The combined surplus between now and mid-2018 is forecast to be $6 billion – down $1.5 billion on the May Budget forecast – so spending restraint will be needed.” He said risks to the economy include the recent drop in global dairy prices and high levels of private debt, in particular agricultural debt, of over $50 billion. The BusinessNZ Planning Forecast incorporates BusinessNZ’s Economic Conditions Index (ECI) which tracks 33 indicators, including GDP, export volumes, commodity prices and inflation, debt and confidence figures. The ECI sits at 10 for the September 2014 quarter, up 6 on the previous quarter and up 5 on a year ago. The BusinessNZ Planning Forecast for the September 2014 quarter is on www.businessnz.org.nz

2015 Graduate Programme Foundation for Arable Research

Welcome to the arable industry, the industry that feeds New Zealanders and underpins our vital pastoral industries. The Foundation for Arable Research (FAR) is looking for graduates interested in a career within the arable industry. Our new Graduate Programme has been specifically designed to introduce you to all aspects of the industry from agronomy to marketing. We are looking for: Graduates with a degree in science, agriculture or agricultural commerce who want a career working with some of the world’s best cropping farmers. We are offering you the opportunity to: • Learn about all aspects of the New Zealand cropping industry. • Spend time with experienced agronomists and internationally recognised researchers. • FAR and industry placements, making connections throughout New Zealand. FAR’s Graduate Programme will run for 12 months, offering successful candidates the opportunity to view our research across New Zealand and Australia and to spend time with cropping businesses across New Zealand. At the end of the programme, you will have developed a good knowledge of all the factors driving the New Zealand arable industry and a clear idea of how you see your career progressing within it. A competitive salary will be offered. Apply now Download application form from http://www.far.org.nz/index.php/careers and return it to Mel Bond bondm@far.org.nz.

Elite programme gives farmers latest genetics at a lower cost

With pay outs tipped to decline and farmers wanting to reduce their operating costs, CRV Ambreed’s progeny testing programme is one way to get the latest genetics and other herd improvement products and services at a lower cost. CRV Ambreed progeny testing programme coordinator, Simon McLachlan, said that to gain maximum return on investment, farmers choose bulls with high reliabilities to get the greatest amount of genetic gain for their herds, with as little risk as possible. But, they can’t achieve this without the progeny testing programme. “The programme allows CRV Ambreed to identify superior trait leaders and market these as proven bulls,” said Mr McLachlan. “Hundreds of potential superstars are considered each year to build the team of bulls to progeny test. We select the bulls based on their breeding value, pedigree and phenotypic traits, so farmers can access the latest genetics at a lower price.” Any farmer can join the programme. They must maintain an excellent standard of records for their herd, use a minimum of 80% of the herd in the programme, herd test four times each year on a classical am/pm testing model, and complete and assist with TOP inspections, live-weight and body condition scoring when requested. “Progeny testing is fundamental to the future of our industry and we need more farmers to take part,” said Mr McLachlan. “It gives us the information we need to select the bulls that will fit well into our herds to make us more profitable in the future.”

Dairying women get dairy automation demo

The Dairy Women’s Network and its network partner Tru-Test will be educating dairy women around automation and how it can support decision-making on the farm. Earlier this year Tru-Test ran three education days for the Dairy Women’s Network focussing on dairy automation systems. Attendees from the Dairy Women’s Network regions said they were blown away by the MilkHub Dairy Automation System and information they could access and use through the MiHub Online Herd Management tool. “It was a very informative day and I was impressed by what Tru-Test had to offer with regards to automation and information,” said attendee Sue Duffy from CRV Ambreed. Dairy Women’s Network Invercargill convenor Katrina Thomas helped to organise the education days and was impressed by Tru-Test presenter Gillian Fullerton-Smith’s knowledge on the product. “The presenter’s knowledge created really good discussion about automation in dairy sheds,” she said. “Local farmer Scott Hindrup, who used the system on a day-to-day basis, also talked about how MilkHub dairy automation worked for him. It was great to hear Scott’s point of view and how this system adds value to their dairy business.” Tru-Test’s New Zealand marketing manager Shaun Owen says, “Dairy women juggle many of the daily demands of dairy farming, often managing all the farm information. It’s really important that we can share with Dairy Women’s Network members how we can better support them as the key decision maker. “These workshops are all about transferring knowledge, offering options, stimulating new conversations and helping to make life easier.” All workshops include practical demonstrations of MilkHub modules including the MiHub Online Herd Management Tool which captures individual cow information, herd and shed activity to track performance, reduce the risk of error, and increase efficiency and productivity. Fast, accurate information is essential for recognising and managing many issues that affect […]

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