News Ticker

Agribusiness needs to budget for volatility

While volatility in business is to be expected, many of New Zealand’s primary producers have experienced a bumpy ride in recent years. Increased volatility driven by to swings in international commodity prices and the value of the NZ dollar is now the new normal according to professional services firm Crowe Horwath. In this context, Crowe Horwath says a strong case is made for agribusinesses in general to invest time and effort into careful budgeting and cash flow planning to weather unexpected difficult times. “The dairy sector witnessed the heady payout levels of 2013-14 rapidly give way to the current trough and associated uncertainty around a recovery timeframe. This has created real pressure for many,” confirms Larry Mitchell Agribusiness Advisor at Crowe Horwath. “However, while this is a case in point, it illustrates that as a globally traded commodity any agribusiness faces volatility risks where markets can and do change regularly.” That, Mitchell notes, makes a strong case for optimising cash flow through careful planning and preparation. “Getting a clear handle on budgets and cash flows is good business practice that should be undertaken in the good times as well as bad. In fact, the point of planning is to give your business the resilience to ride the lows – even though you may have little-to-no idea when they might come,” Mitchell adds. Take stock of spending habits Putting together cash flow and budgets starts with taking the time to honestly evaluate spending patterns for the business. “Once budgets are established, stick to them. Avoid the temptation to spend a little bit extra here and there; the extras quickly add up and soon you could be looking at a significant amount of unplanned expenditure over the year,” Mitchell points out. The temptation is likely to be stronger in good times; don’t […]

Training vital through the ups and downs

Michael and Susie Woodward, runners up in the Share Farmer of the Year category in the 2016 New Zealand Dairy Industry Awards (NZDIA), know that riding the ups and downs of the dairy sector is part and parcel of the industry but the key is knowing what’s truly adding value to your business. “This is not the time to take shortcuts,” Michael says. The award-winning 50/50 Share Farmers are strong believers in constantly upskilling – both themselves and their staff. The Woodward’s have four full-time staff on board at the farm in Leeston on the Canterbury Plains completing a range of qualifications through Primary ITO, the industry training organisation for the dairy sector. “We’re firm believers in continuing education. Training is crucial to ensure you don’t fall behind the times. We actively encourage our team to train, and we’re constantly upskilling ourselves,” Susie says. “The most important thing is that the right decision is made the first time. There is a cost to training but without it, it could come at a large expense to the business,” Michael says. “I believe it’s easy to get the money back and for every dollar you invest in a person’s training – you receive a whole lot more in return.” In terms of how the couple split their farm roles, Michael holds responsibility for staff engagement on farm, ensuring everything gets done. He also looks after staff training. Susie heads up accounts, payroll, HR and office admin, recruitment, legal requirements and on top of that health and safety requirements. Hailing from the USA, Susie built up her skills through Primary ITO training. “I’ve competed Rural Staff Management through the ITO,” Susie says. “It gave me better information about how to make our recruitment and employment process fluid and fail safe. I gained the […]

The world needs carbon-in not carbon-out

If we stopped releasing carbon from the soil into the atmosphere and captured it instead then the serious problem of global warming could be solved. International soil scientist, Dr John Baker, says, in relation to soil, there’s more “carbon going out than coming in” and the world has reached a stage where the process must be reversed. When it is, there won’t be a problem with climate change. Dr Baker points out we recycle bottles and plastics but not carbon and the time to start recycling carbon is long overdue. “There’s more CO2 in the atmosphere and less in the soil than ever before,” he says. “While the first crucial step is to grow more plants, it’s even more important to ensure the carbon that existing plants absorb from the atmosphere through photosynthesis remains in the soil.” At the moment carbon is squandered. About 50 percent is lost when food is harvested but Dr Baker says that’s acceptable because it’s why we grow food in the first place. But as much carbon again remains as straw, stubble and roots after harvest and, if this is removed, burnt or incorporated, then most of it gets back into the atmosphere where it contributes to global warming. “Instead we must retain the crop residue after harvest and offer the carbon to the soil microbes. They decompose it and earthworms and other fauna take it into the soil which enriches it,” he says. “The future of mankind depends on harnessing the biology in the soil and making it work for us. The impact would be massive if the uneaten carbon that food crops gather globally was transferred into the soil and stayed there.” The good news is that the world doesn’t need to invent new technologies to make it happen. New Zealand already has […]

Food Safety Concerns Driving Kiwis to Buy Local

Kiwi consumers are seeking out locally made food, as concerns about product safety and levels of additives in consumer goods manufactured offshore drive purchasing behaviour – according to the findings of a new survey. The Munchkin study which investigated the attitudes and habits of Kiwi shoppers showed that more than two thirds (69%) of Kiwi consumers said country of origin for food products they ate was important to them. Interestingly, this figure jumped to 86% for parents who had children who were of school age or younger, with almost nine in 10 of this group saying it was an important factor in deciding whether or not to give the product to their children. The regional sales director for Munchkin Gary Hunter says the survey provides insights for food policy makers in this market. “The one clear message from the research is that Kiwi’s care where their food is made. It provides consumers with an important level of reassurance of quality as well as allowing them to proactively support local suppliers,” he says. More than half (54%) of Kiwis believe products sold on our supermarket shelves do not label their products adequately with enough country of origin details. The research showed the majority two thirds, (65%) of New Zealand shoppers try to buy food or beverage products made in NZ from NZ ingredients as often as possible. A fifth (19%) said they always purchase food or beverage products that are made in New Zealand with locally sourced ingredients. Respondents were also asked to provide the most important reason for knowing the country of origin of their food products, the most common response was a desire to support locally made wherever possible with more than a third (35%) giving this answer. This was closely followed by concerns over food safety standards with […]

If you buy health and safety advice, make sure it’s the right advice

Good health and safety practice is not something you can just buy off the shelf, and farmers need to build health and safety into everyday activity on farm. WorkSafe’s Agriculture Programme Manager, Al McCone, says while many farmers will want to get consultants in to give them expert advice, there is no single product or document that is a silver bullet for farm safety. Farmers should only employ competent and qualified professional health and safety advisors. “When selecting a new contractor or buying stock, farmers do their homework,” says Mr McCone. “They shop around, look online, ask other farmers and make a decision based on sound information. The same should apply to buying health and safety advice and resources. “Farmers should make sure that they’re not simply going to get a folder or piles of forms someone else has done for them. That won’t make their farm any safer. What they actually need is a way of building a health and safety culture into farm activities and constructing a really effective culture of involving everyone.” There’s no substitute for the unique knowledge the farmer, family and workers have of the land, its terrain, its facilities and day-to-day operation, says Mr McCone. “What’s most important is everyone on farm thinking about the risks and managing them so everyone stays healthy and safe. When everyone is involved there is a positive impact on other parts of the business.” Mr McCone says while there are good health and safety consultants out there, they are not all of the same quality and effectiveness. “Farmers need to make sure they are working with a competent and qualified professional safety advisor – that may not be the first health and safety advisor they get talking to at the local field day.” To help farmers buy the […]

Young fruit growers compete to be Hawke’s Bay’s best

Eight young fruit growers from orchards across the Hawke’s Bay are sharpening their secateurs in preparation for next week’s Hawke’s Bay Young Fruitgrower of the Year competition. The competitors will battle it out on Friday 8 and Saturday 9 July in a series of theoretical, practical and public speaking challenges to take out the title of Hawke’s Bay Young Fruitgrower 2016. The champion will go on to represent Hawke’s Bay at the national Young Grower of the Year competition, hosted by Horticulture New Zealand, on 19-20 July in Auckland. “The Hawke’s Bay Young Fruitgrower competition showcases and celebrates our industry’s top young talent each year. We’re very proud to be supporting the development of our industry’s future leaders and see them putting their knowledge and skills to the test,” said Lesley Wilson, President of Hawke’s Bay Fruitgrowers’ Association, which runs the local competition. Contestants complete a range of exercises including general knowledge and orchard husbandry, health and safety, pest control and equipment assembly. The tests are designed around the fundamental skills needed to run a successful export-focused horticulture business of the likes that operate in the Hawke’s Bay. Competitors include: • Anthony Taueki, 26, Leading Hand, Mr Apple, Napier • Balwinder Singh, 29, Senior Leading hand, T&G, Napier • Cherokee Hancox Kiri-Kiri, 23, Export Dispatch Supervisor, Mr Apple, Takapau • Adam Fulford, Orchard Hand, T&G, Mangateretere • Harry Fraser, 23, Foreman, Provident/Freshmax, Hastings • Jordan James, 25, Senior Supervisor, Mr Apple, Haumoana • Pauly Douglas, 30, Manager, Orchard Investments, Havelock North • Ryan May, 30, Senior Leading Hand, T&G, Napier The event is part of the National Horticultural Field Day which also includes the Pick a Career in Horticulture expo. More than 200 high school students from around the region will be introduced to the exciting career opportunities within the […]

Support for dairy farmers through tough times

Primary ITO, the industry training organisation for the dairy sector, and industry good body, DairyNZ, have partnered up to fund a Study Grant to help retain dairy employees in training during the challenging times. “In a prolonged downturn such as we’re experiencing now, the temptation might be to abandon what some might see as non-essential costs, like training,” explains DairyNZ Strategy and Investment Leader for People and Business, Dr Mark Paine. “However, to do that would not only lose you the investment that you’ve put in, but also the full benefits of the training, which will only become apparent when the training is completed.” The Study Grant will cover the full amount of training fee paid by trainees, and is available on a first in, first served basis until December 2016 or until the fund is exhausted. “Primary ITO is committed to supporting talented people who are dedicated to a career in dairy farming,” says Primary ITO Chief Executive, Mark Jeffries. “We believe the Study Grant is an invaluable way to support them in the current dairy climate.” “We don’t want farmers to discontinue training due to hardship. The initiative is a way that we can all work jointly to make sure we help farmers stay the course and take a long term view of the business, which is critical to ultimate success,” concludes Dr Mark Paine. To qualify for a Study Grant you must meet some criteria. To see if you’re eligible, visit www.dairytogether.co.nz. Study grant applications must be made through your Primary ITO Training Adviser. All applications are considered and reviewed on their merits, and a decision will be made within two weeks. All applications must be received by the 30th of November 2016.

Hard lessons to be heeded

Owl Farm’s fourth and final Farm Focus Day for the 2016/17 season at the end of May was an opportunity to review the season, and for others in the dairy industry to benefit from the hard lessons learned on farm. Demonstration Manager Doug Dibley says financially it’s been a difficult year with production and payout down. Underweight heifers, staffing changes through the middle of the season, poor performing pastures and eczema are just some of the major challenges faced by Owl Farm. “We’ll look in detail at where we ended up, how and why. Looking towards the future, we’ll share our focus and targets for next year, including the significantly lower cost structure that we need to achieve to ensure financial survival in what all are anticipating to be another tough season.” Owl Farm has shifted its attention to the five P’s – planning and preparation to prevent poor performance. “Last season we didn’t have an entirely effective plan and weren’t prepared for what was to come. This season’s approach is to plan for the worst and hope for the best.” Doug says that although these may sound negative, he is optimistic about the future. “These are the lessons which all farmers learn early in their journey. We are now in a much better place regard our operating knowledge of the farm. Although we have learned the hard way, we will now be able to plan to ensure we manage these issues and others as best as possible.” Owl Farm also want share their investment strategy in preparation for the season ahead. Doug acknowledges that some areas of the farm’s cost structure were unsustainable. “All of our investments now are in areas where a solid return has been identified and where it supports our strategic direction.” Owl Farm gives the […]

NZ should be milking it in organic market

Consistent growth in the demand for organic produce over the last four decades is a missed opportunity New Zealand dairy farmers can’t afford to ignore any longer, says organics stalwart Bob Crowder. His comments are a response to a payout forecast of $9.20 for organic milk solids, more than double the price of conventional milk, which he believes has the potential to take New Zealand back to being a world leader in organics. He laments New Zealand letting its status as a frontrunner in organics slide. “At one time we were one of the top certified organic nations in the world. Now we’re almost insignificant in the global picture,” says Mr Crowder. He puts this down to a cheap food mentality with no thought for quality or origin, which means organics have not advanced as far as he thought they would when, as a Senior Horticulture Lecturer at Lincoln University (then College), he established the Biological Husbandry Unit (BHU) in 1976. Although Mr Crowder was looking for `another way of doing things’ he says much of the impetus came from students who wanted a more practical degree with a focus on sustainability and organics. The so-called ‘Sandwich Degree’ introduced to Lincoln in 1978 for horticulture students were critical to the success of the BHU as it allowed students to work on the site as part of their studies. “Students in the 1970’s were very radical. They weren’t forced to be organic. What we were doing had to be integrated into the general teaching. The BHU was for the teaching and demonstration of holistic environmental aspects. It was based on good scientific principles, not muck and mystery.” The BHU is celebrating 40 years of organic status this year. It has grown from an area for teaching and demonstration based on a […]

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 […]

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