News Ticker

Too many farmers flying blind when it comes to financial information

“You wouldn’t fly a plane without instruments these days would you?” questions Craig Sanders, an agribusiness and cloud accounting specialist at Crowe Horwath. However, when it comes to farming, that’s exactly what he believes is happening too often on New Zealand farms. “There are too many farmers effectively flying blind without the right kind of financial information to make sound farm management decisions,” says Sanders. Many farmers only get a fully detailed account of their financial position following a review of their end-of-year accounts with their accountant, which is often too late to make adjustments for a better financial outcome. Given the current market situation Sanders stressed that this is no longer good enough, and now more than ever farmers need accurate real-time financial information. “While volatility is nothing new for New Zealand agribusinesses, large increases in farm debt over the past decade, particularly in the dairy sector, have put pressure on the industry during the recent fall in milk prices.” Sanders explained that while all farming operations face pressure when aspects such as prices fluctuate rapidly, highly leveraged operations often have less room to move. “Rapid or unforseen changes in circumstances such as a major climatic event or a fall in the payout can lead to severe outcomes for under-prepared farmers, especially those with highly leveraged operations.” Sanders continued, “This means those farming businesses need to be fully aware of their current financial position, know what drives their costs, be prepared to review budgets regularly as things change, and be able to make decisions based on the best possible financial information.” Sanders noted that farmers are often very good at tracking cash, but when it comes to the true impact of decisions on their bottom line, things are often a little murky. He points to selling stock as a […]

Dairy report shows less serious but more minor non-compliance

Environment Canterbury today reported less serious non-compliance with resource consent conditions in the 2014-15 dairy season than in the previous year, but higher rates of minor non-compliance. Marty Mortiaux, Regional Manager Monitoring and Compliance, said the season was a very challenging one for farmers facing reduced payouts and drought conditions. “Dairying has been growing in Canterbury and it is very important for the economy,” Mr Mortiaux said. “We now have 1149 farms compared with 632 10 years ago. The average dairy herd size in Canterbury is larger than elsewhere in New Zealand – 912 compared with the national average of 413. The increase in dairying is part of a more widespread increase in farming intensification. “Environment Canterbury’s role is to make sure this intensification does not unduly impact on water quality throughout the region,” Mr Mortiaux said. “Our monitoring of dairy farms has become much more than just assessing compliance with consent conditions. It is an essential part of implementing the Canterbury Water Management Strategy. “We are increasingly working alongside farmers and the industry to help improve environmental performance on farm while at the same time maintaining or improving profitability. “Last season we looked to meet our obligation to monitor compliance with dairy effluent discharge consents while at the same time working with farmers dealing with the season’s many challenges.” Environment Canterbury has changed its monitoring programme. “In 2014 -2015 we moved away from monitoring every dairy farm in the region at least once a year towards a more targeted regime based on risk criteria,” Marty Mortiaux said. “During the 2014-2015 year, 976 of 1149 dairy farms were actively monitored at least once -85% of all farms. Because the farms that were not monitored were assessed as being lower risk, year-on-year results are no longer directly comparable. “The rate of […]

2015 NZIAHS AGMARDT Technology Transfer Award

Diana Mathers from FAR is the recipient of the 2015 New Zealand Institute of Agricultural and Horticultural Science AGMARDT Technology Transfer Award. The award was made in recognition of the significant impact of her work around environmental and economic sustainability on cropping farms. Diana is FAR’s Cropping Systems Research Manager, a role she has held for the last six years. In that time has worked hard to support cropping farmers in the areas of economic and environmental sustainability. The Technology Transfer Award recognised the significant impact of her work in both these areas, especially with regard to effective on-farm environmental management. The testimonial highlighted her work developing and delivering nutrient management plans, and more recently, a Farm Environment Plan template, for cropping farmers. Also mentioned was her work investigating cropping options and opportunities in relation to the proposed Ruataniwha Water Storage Scheme, on-farm biodiversity projects and looking into the impacts of winter grazing on cropping farms. Diana’s extension work is backed up by her involvement in a number of national and regional research projects, which focus on ensuring high quality information is made available to farmers in a format that is easy to understand and apply. As well as the dairy grazing and biodiversity projects, Diana is involved in a national project assessing drainage and N loss from crop systems, national projects on Overseer evaluation and regional projects such as those assessing crop options for the Ruataniwha, and the Matrix for Good Management in Canterbury. In all these projects she focuses on using data collected on farm and farmers’ own records to inform improved on-farm decision making. Diana is also a representative on a number of regional council groups throughout New Zealand where she helps to ensure policy is practically aligned with farm practices, particularly in relation to nutrient management, […]

Record blossoms set New Zealand up for bumper apple crop

Hawke’s Bay’s apple orchards are experiencing some of the best blossoms on record setting New Zealand up for a bumper apple crop. Bostock New Zealand Orchard Manager, Fulton Gillies (pictured) says the hot, sunny weather this season has provided the perfect conditions for pollination. “We have been averaging over 20 degrees each day, so the bees have been out working hard, pollinating our orchards. It’s been perfect to set us up for both a high quality and high yielding crop.” A cold, dry winter has also been good for the apple orchards. “We had a lot of winter chilling which means we have a tighter bloom and strong bud breaks which is ideal for the fruit coming on.” The 2016 season was forecast to be an off season with less apples predicted, but the favourable winter and spring conditions have set the Hawke’s Bay orchards up for another boomer season. The New Zealand 2014 national apple crop was just over 17 million cartons (17,270, 729) and the 2015 season saw over 18 million cartons. “In the off season we are usually hoping for the fruit to stick and keep some consistency, but this year is looking very strong too,” says Mr Gillies. However weather forecasters are predicting one of the driest summers on record so Bostock New Zealand Orchard Managers are already starting to plan for the “big dry”. “We are ensuring we have all our irrigation systems in place and working well to manage water.” Mr Gillies says a hot, dry summer will also bring many benefits, reducing the risk of disease and improving the quality of the fruit. “When its hot and dry we expect good sugar, colour and storage. Bright red, sweet juicy apples that store well are exactly what our markets are looking for so the […]

Prestigious scholarship for Māori student

A Lincoln University Master’s student has been awarded a prestigious scholarship that aims to increase Māori participation in the fisheries and aquaculture industries. Roxanne Lloyd, who is studying towards a Master of Applied Science in Environmental Management, received the Rona Scholarship at the recent 2015 Ngā Whetū Hei Whai: Charting Pathways for Māori Industry Future Conference. Each year, the Te Pūtea Whakatupu Trust awards up to 10 of these scholarships to Māori who are completing degrees in fisheries, aquaculture or marine sciences. “It was great to be given the opportunity to go to the Ngā Whetū Hei Whai conference,” Ms Lloyd says. “There were a number of inspiring speakers, such as Sir Mason Durie, Dr Ernesto Sirolli and the Minister of Māori Development, Hon Te Ururoa Flavell. “All the speakers encouraged and inspired us to work hard and achieve our goals as Māori. The conference was a chance to network with people from different fields. I think the people I met and the relationships I made at the conference will help me achieve my goals and future plans.” Ms Lloyd’s Master’s research involves exploring the pattern of marine farm locations throughout New Zealand and investigating how climate change can play a role in determining the best sites for such farms. “Climate change can affect a number of important resources that humans rely on,” she says. “In particular, aquaculture provides a food source, but an increase in water temperature or ocean acidification can alter the environments needed to farm certain species.” Her research involves mapping the marine farm locations using GIS and agent-based modelling. “I have always had an interest in GIS, and have been able to learn a new skill while carrying out this research.” Ms Lloyd started working towards her Master’s degree at Lincoln in April this year, after […]

Oceania Dairy Invites Applications for Annual Scholarship

Secondary school students within the Waimate and Waitaki Districts have been invited to apply for the Oceania Dairy Scholarship. The annual scholarship was launched last year and Dion Batchelor, a former Head Boy of Waimate High School, was selected as the inaugural recipient. The scholarship provides the successful applicant with an annual payment of $3,000 for up to three years, as well as the opportunity for paid work experience during study or training breaks. Oceania Dairy circulated application forms for the 2016 scholarship to the principals of all schools within the Districts this week. “The scholarship is an important part of our commitment to the communities in which we operate,” said Roger Usmar, General Manager of Oceania Dairy. “We are encouraging an organisational culture of investing in people and supporting local communities. “We can think of no better way of demonstrating that culture by supporting young people as they move from secondary school education to further education or training,” he said. The Oceania Scholarship is available to young people within the Waimate and Waitaki Districts who are completing their secondary schooling and about to move into further education or training next year. The scholarship targets education or training that can lead the recipient into a career in the dairy industry or that has the potential to enhance relations between New Zealand and China. Applications for the 2016 scholarship close on 30 November. The successful applicant will be announced before the end of the year. 2015 scholarship recipient Dion Batchelor is now preparing for his end-of-year exams towards a Bachelor of Commerce undergraduate degree at Otago University “The scholarship has relieved a huge financial burden as I fund my way through University,” he said. “It has also been great to begin to understand the operations of a successful global company as […]

Minerality mysteries remain

Ongoing wine research by Dr Wendy Parr of Lincoln University indicates that while minerality is not a figment of tasters’ sensorial imagination, the source of the perception remains a mystery, and the description should be used with caution in formal wine tasting and judging situations. ‘Minerality’ is used by wine professionals to describe the character of certain wines, with vague references made to wet stones, crushed rock and soil. Regarded variously as a taste, a smell, a trigeminal (mouth-feel) sensation, or all three, until now there’s been little agreement on what is actually meant by this common but enigmatic term, or whether it even exists. Intrigued by the lack of scientific knowledge and the plethora of anecdotal evidence around minerality, Dr Parr collaborated with scientists in France and at Plant and Food Research in New Zealand to investigate what the concept means in Sauvignon Blanc wines, and whether there are cultural differences in perceptions of minerality. Wine professionals from France and New Zealand experienced in the production and tasting of Sauvignon Blanc participated in two sensory studies carried out over two sessions, with wine samples served blind in opaque, standardised glasses in unique order for each participant. Participants evaluated the wines by palate (taste and mouth-feel) alone, smell alone and both palate and smell together. Minerality was perceived by both groups in all cases, and was consistently associated with several wine characteristics, for example citrus. There were more similarities in perception between the groups than differences, implying that wine professionals in France and New Zealand share a mental construct of the concept ‘mineral’, as experienced in Sauvignon Blanc wines. “The concept of minerality in wine is undoubtedly real,” Dr Parr says, “but the source of the perception is still unclear.” It has been variously attributed to acidity, sulphide reduction, and […]

New Zealand Merino’s market-making model pays dividends

The New Zealand Merino Company (NZM) has significantly lifted full-year profit and the dividend it will pay to its shareholders in 2014/15. NZM booked a $2.3 million net profit for the year, a 21% increase on the previous year. Shareholders, including 536 wool growers, will receive a total dividend of $1.15 million, up 23% on 2013/14. NZM chief executive John Brakenridge said the strong performance showed the company’s approach of value creation, as opposed to volume play, was a winning one. “Two decades ago fine wool was being dumped on the commodity market and sold at a discount to Australia. The growers knew they had a product that was undervalued and unrecognised. “So NZM was set up to maximise profitability and sustainability right across value chains; from market to grower. Key to this has been confronting volatility head on and establishing multi-year forward contracts that guarantee more stable prices for brands and growers alike.” By removing the boom-and-bust of commodity price cycles, NZM had generated more than $30 million in additional income for growers, across wool and meat programmes, in the past three years compared to returns via traditional commodity systems, said Mr Brakenridge. “This past year we’ve continued to grow our business through establishing new contracts with luxury and active apparel brands such as Loro Piana and Reda in Italy, New Zealand brand Icebreaker and Colorado-based SmartWool. “We’ve also extended our offering into strong wool, where we see excellent potential across the board through innovation. There’s great complementary between strong wool and our fine wool business. “It’s no good sitting back and waiting for the market to come to you. We want to shape it and secure exclusive deals with the world’s leading brands.” In April, NZM secured a two-year contract with Danish footwear firm Glerups to exclusively supply […]

DWN seals the deal with valuable business advisory partner

New Zealand’s largest provider of practical accounting and business advisory services to the rural sector, Crowe Horwath, has offered its support to the Dairy Women’s Network (DWN), signing on as a partner. Dairy Women’s Network is a non-profit organisation dedicated to providing education and support to dairy farming women. It has more than 7500 members throughout New Zealand. “We are excited to enter into this partnership because we see first-hand the significant contribution women make to New Zealand’s rural sector,” said Crowe Horwarth’s New Zealand head of agribusiness Neil McAra. “It is organisations such as DWN that provide vital support and development opportunities for women in agribusiness to grow and prosper. Many Crowe Horwath employees are already actively involved within the Network and it was their glowing endorsement which helped encourage the business towards signing on with DWN.” DWN chief executive Zelda de Villiers said it was heartening in difficult times in the dairy industry to see a collegiality between agribusinesses and non-profit organisations such as DWN. “We know that we offer our members an extremely valuable service, but it’s always nice to have that quality of service recognised by our partners. I think our members, and ultimately the wider industry will gain a lot of knowledge in making sound and smart business decisions from us working with Crowe Horwath in the future.” Crowe Horwath New Zealand is the largest provider of practical accounting, audit, tax and business advice to individuals and businesses. The company has a network of 24 offices throughout the country.

Lincoln ticking all the boxes

There’s a lot pointing to Associate Professor Alison Bailey having made the right choice to come to New Zealand and become the new Professor of Farm Management in Lincoln University’s Faculty of Agribusiness and Commerce early next year. She’s an avid rugby fan, has a strong interest in the outdoors, and is keen for a new challenge. Currently Associate Professor in Farm Business Management at the University of Reading in the United Kingdom, she has authored over 70 publications in the field of agricultural management and environmental economics. She is also Director of Reading University’s Farm Management Unit, responsible for coordinating research, teaching and outreach within her subject area, been a speaker at Biennial International Farm Management Association Congresses, co-authored an influential climate change paper and has had 20 years in the agricultural sector. New Zealand is a country she has always aspired to come to and she has lots of contacts here already in the industry. Lincoln University Deputy Vice-Chancellor, Scholarship and Research, Stefanie Rixecker, says Associate Professor Bailey will lead in developing and promoting the profession of farm management in New Zealand and was happy to have secured her for the position. “She has a strong research background which is focused on areas relevant to Lincoln University, has a strong record in postgraduate supervision, and has a positive record working with the farming community.” Associate Professor Bailey says her research has been done primarily as a social scientist working within multi-disciplinary projects examining the relationship between agriculture, the environment and socio-economic criteria. She led a Royal Agricultural Society of England funded project ‘Water for Agriculture: Implications for Future Policy and Practice’ which reviewed and modelled the impacts of climate change on future food production in England. “Although a small project it has been successful in generating a large […]

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