rural news 15 may 2012

may 15, 2012: Issue 515 www.ruralnews.co.nz

RuRalNEWS

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to all farmers, for all farmers

Debt déjã vu

AGRICULTURAL DEBT repaid after the global financial crisis is rap-idly being borrowed again, AgFirst consultant Phil Journeaux told a Waikato University seminar he hosted this month.

Agricultural debt peaked at $47.8 billion in September 2010 and $1.2 billion was paid off to March 2011. But over the last 12 months farmers have borrowed back $1 billion.

“The elephant is still in the room,” he said, referring to farm debt. “When you look at the percent-age of debt, most of it is held in the pastoral sector and two thirds of our total aggregate is in the dairy sector.

“That was causing serious prob-lems up until a couple of years ago and it died away from public con-sciousness simply because incomes and moved up and we can repay our debt servicing.”

With the milk price on the wane, this could be of concern.

Journeaux says agricultural debt doubled from 1980 to 1990 then again from 1990 to 2000 – but since 2000 it has quadrupled.

“There’s a close correlation between debt and dairy land value.”

About 20% of farmers are car-rying 80% of the debt. The average debt in sheep and beef sector is $159 per stocking unit “which isn’t too bad”. Dairy debt was more evenly distributed and at 6% interest rates averaged about $1.40/kgMS.

The average equity in dairy is 59% which in a business sense “is ok but not particularly great”.

pam tipaSwine of a rulingPIG FARMERS battling dismal returns fear a High Court ruling has condemned them to an even more uncertain future.

It follows the High Court’s decision to uphold Ministry for Primary Indus-tries’ (MPI) import health standards for pork. While an appeal remains an option New Zealand Pork has already spent $1.4 million fighting the case.

Pig farmer fears centre on the risk of fresh pork imports bringing an anti-immune response virus into the country and with it, Porcine Reproductive and

Respiratory Syndrome (PRRS).In herds not previously exposed to

the virus PRRS can kill 70% of piglets and increase abortions and still births. Production recovers post initial infec-tion, but never quite to what it was. It’s endemic in all but a handful of pork pro-ducing nations.

Pork New Zealand has expert sci-entific advice from Massey University that if 3kg cuts of fresh imported pork are sold, as per the MPI’s new Import Health Standard, a PRRS incursion is likely within three years.

MPI’s science, drawn from overseas experts, says it’s more like 1200 years,

andrew Swallowif at all. As Rural News went to press, New Zealand Pork chairman Ian Carter, Oamaru, said a decision on whether to appeal hadn’t been made.

“We’re trying to work with the Min-istry to get a solution but we haven’t ruled out an appeal.”

MPI maintains food waste disposal regulations will prevent fresh pork scraps reaching pigs, a potential PRRS infection pathway. Carter says that’s unrealistic, given the thousands of back-yard pigs in New Zealand.

“Just take a look on TradeMe.”Rules will accidentally or knowingly

be broken, with people thinking they are doing the right thing recycling food waste through pigs, he says.

Once one pig is infected, experi-ence with post weaning multi-systemic wasting syndrome (PMWS) shows such viruses spread nationwide within a few years.

“There are only four or five pig farms that don’t vaccinate for PMWS now.”

Vaccination for PMWS costs about $4/pig/year. PRRS vaccines would cost $8-15/pig/year and are unreliable owing to the constantly mutating nature of the bug.

“The question we’ve still not had an answer to is where is the benefit to New Zealand in this? Surely you have to err on the side of caution.”

MPI director general Wayne McNee last week told Rural News it would implement the new IHS but work with NZ Pork to ensure effective risk man-agement relating to feeding waste meat to pigs.

Getting out: after 24 years in pig farm-ing, Brent and shar Youdale are pack-ing up, forced out by rising costs and cheaper imports. more on page 4.

“the question we’ve still not had an answer to is where is the benefit to New Zealand in this? surely you have to err on the side of caution.”

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rural News // may 15, 2012

news 3

issue 515www.ruralnews.co.nz

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BlNZ moves on wool levy

BEEF AND Lamb New Zealand is working its networks to assem-ble an independent group to report on whether to reinstate a wool levy.

Farmers voted in 2009 to ditch the commodity levy on wool, but a remit passed at BLNZ’s recent annual meeting calls for investigation of a return to levies.

Chairman Mike Petersen told Rural News the board at its last meeting supported assembling a review group.

“We don’t think it’s a huge job but we’re in the process of looking at some names and we will be talking to a wide range of people around the industry including Colin Harvey’s Wool Unity group to ensure we have the right mix of names. We’ll also be talking to the promoter of the remit, Derek Daniell.”

Petersen says they don’t want “a cast of thousands” but says it’s important to cover the range of interested parties. “But we’ve got to acknowledge though, that the wool levy is paid by farmers, so clearly farming interests are the ones that will have the most interest in this piece of work. That doesn’t mean we’ll ignore the industry because they will have a view about what’s not now being provided.”

Petersen says the general atti-tude of the board is to ensure fair process. “There was a bit of ner-vousness in the organisation about revisiting some of the his-toric wool issues because it’s a polarised debate. There is cer-tainly a bit of nervousness about making sure we do this as inde-pendently as possible.”

westpac targets farmersEXPECT TO see a higher profile from Westpac at farm and agribusi-ness events, and even on your farm, in coming months as the bank looks to build market share in agriculture.

“We have about 12.5% of ag sector debt and we’re very keen to take that to 20%,” head of agribusiness for Westpac, David Jones, told Rural News last week.

Farmer loyalty to financiers, and the hassle of changing banks, means it won’t be a fast process but Westpac is already attracting clients from other banks, he adds.

That’s come through doing the hard yards seeing clients and prospects reg-ularly, sponsoring events and compe-titions such as the New Zealand Dairy Awards, and having a presence at field days such as monitor farms, Jones says.

“In the last four years we’ve really stepped up our profile.”

Helping young farmers manage their money, and guide them through what they need to do financially to estab-lish themselves is also paving the way to more clients.

“It’s all around making sure we are supporting the industry.”

Stronger advertising and more people on the road going up farm drives can also be expected.

“We know relationships are not built on one call and we believe in seeing our clients on a regular basis.”

Jones says in pursuit of market share they won’t be encouraging farm-ers to take on debt that perhaps they shouldn’t.

And while some are voicing concerns

that total farm debt is on the rise again, at a time when commodity prices are falling more or less across the board, Jones doesn’t believe the sector’s debt is the problem it was.

“We wouldn’t have the concerns we had four years ago. I think most farms manage their money a lot better now and are very much more disciplined in the way they manage cashflow than they were. We’re very pleased with the risk profile of our book.”

Jones says it will be taking “a bal-anced approach” to growing the book between dairy, sheep and beef, crop-ping and horticulture, and looking to address a relatively weak market share in the North Island.

“We are particularly strong in South-land.”

taking on the big boysA NEW online rural supplies service is about more than just offering your farm needs direct to door: it promises to help independent local stores compete with the big chains.

Heartland Rural is the brainchild of Paul Boyack, owner-operator of a sin-gle-outlet farm and lifestyle block sup-plies store near Porirua, Wellington.

“There are two tiers to the business. One is to give small, independent retail-ers in New Zealand an opportunity to buy farm supplies that’s cost effective... The other is for farmers to buy online and have goods delivered to their door,” he told Rural News.

Boyack has set up a warehouse in Lower Hutt where he’ll consolidate retailers’ orders for things like farm clothing, or fencing materials, and deliver to their stores at a cost that he says will compete with the price the large chains, such as PGG Wrightson or RD1, are able to buy at.

A second warehouse is planned to service the South Island.

andrew Swallow

He’s been working on the proj-ect for over a year, “getting the brand established and suppliers on board.” In the past month he’s distributed flyers

nationwide.To buy from the website users will

need to register. “Rural retailers will be approached by me individually.”

Paul Boyack has been working on his new rural online supply business for over a year.

peter burke

HB3908 Sheep_NZ Farmers Weekly/Rural News_10x7.indd 1 30/04/12 10:55 AM


4 news

tough times for pig producersSOME NEW Zealand pig farmers aren’t waiting for what they see as the inevita-ble arrival of PRRS, and are leaving the sector already, forced out by rising costs and falling schedules.

One such farmer is Brent Youdale, South Canterbury. After 24 years in the industry he’s culling his herd of 1350 outdoor sows and laying off 11 staff.

“It’s because of the imports. Nearly 50% of pork is imported now and we’re just not being paid enough.”

Baconers are making $3.15/kg. At today’s costs he reckons he needs $4/kg.

“The problem is the costs just keep going up: grain, meat and bonemeal, fishmeal, fuel, wages. Then there’s all the AssureQuality and MAF require-

ments.”Exposed edges on corrugated iron

arcs, and even the use of corrugated iron itself, could soon be banned, he fears. The alternative plywood on steel frame arcs are warmer in winter, cooler in summer, but at $800 a time, upgrad-ing is a costly business.

“It’s all the things like that. It’s just not viable to be a pig farmer in New Zealand anymore.”

He’s yet to decide whether he’ll totally exit or keep a few sows and fin-ishers on his 220-acre main farm. Dairy grazers and crop will take the land the sows don’t use.

Having started with 30 sows and one boar, and built the business from there, both he and wife Shar are sad, and a little bitter, at having to call time

on the operation. Laying off staff who have been with them for years, and kill-ing healthy, productive sows for $1.85/kg is particularly tough.

“The hard thing is we’ve been learn-ing all the way along to get things right and we are doing everything right now. We’re rearing 21 weaners per sow per

year, the feeding’s right, the water, the fences, the sheds. It’s all perfect. We’re simply not getting paid enough.”

His exit from pigs will have a knock-on effect on several local businesses, he adds. “We have 20 odd trucks coming or going from here every week. There’s a lot of spin-off from what we do.”

Youdale acknowledges the indus-try is notoriously cyclical, and returns could recover in a year’s time.

“But we’d probably lose a million dollars by the time it came right.”

Besides, with the spectre of a PRRS incursion adding $8 to $15/sow/year in vaccination costs at some point down the track, not to mention severe pro-

duction losses initially and an ongoing drag on productivity, he’s not waiting to see if they do.

andrew Swallow

doomed: this sow will be culled when her piglets are weaned due to falling schedules and rising costs.

WHILe PORK New Zealand chairman Ian Carter wouldn’t speculate on whether there’s a hidden agenda in permitting fresh pork imports, others in the industry are more forth-right.

“Our industry is a reasonably expendable free trade bargaining chip and we were played some years ago,” says steve Glass, managing director of Fresh Pork.

Fresh Pork employs about 150 staff with works in auckland, Levin, Burnham and Timaru processing only New Zealand-grown pigs.

“I can’t understand why maF Biosecurity would go overseas and

completely ignore massey university’s epidemiology centre on this. These guys know the topography of New Zealand, and the climate, and their modelling is

focussed on New Zealand.”as it is, under current import

health standards, nearly 50% of New Zealand’s pigmeat is imported already, going through further processing

such as curing for bacon or ham, or cooking for sausages,

to kill any virus present prior to sale, points out Glass.

The price of those imports, and a surge in supply, are behind the drop in schedule Fresh Pork and others are paying suppliers, he says.

“It’s a simple matter of supply and demand.”

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news 5

Slow going at sheep dog trials

ROTTEN WEATHER for the first few days of the Tux North Island Sheep Dog Trial Championships made it tough going for competitors, their dogs and the sheep in the Far North.

Several hundred competitors, 400 dogs, and 1800 sheep took part in the May 7-11 championships on Mt Ahu Ahu, near Ohaeawai.

Northland Sheep Dog Trial Association president, John Nelley says organisers were forced to play catch up after heavy rain, sleet and fog combined to delay starts and finish days early.

“The first day was foggy, cold and windy and on the second day we got about 6 inches of rain and we had to close up early because of the flooding,” Nelley says.

He adds the foul weather made the sheep uncoopera-tive, making it hard work for the trialists and their dogs to control them.

From day three on, in order to make up for lost time, judges began calling off a run as soon as it became clear the dog had lost enough points to be out of contention.

But one competitor who wasn’t complaining was Te Kuiti’s Robyn Stephens (pictured above) who was stoked just to have qualified for her first North Island Champion-ships with her five-year-old header Will.

“Will is very hard running and sometimes he’s a bit hard to control, and sometimes that costs me a few points, but I just love his spirit,” she says.

The South Island and New Zealand Championships begin in Wanaka May 28.

benedict collinS

Get ready for weather changeNEW ZEALAND farmers need to plan and maintain viability in the face of extreme weather events.

This was the message passed to Waikato rural professionals at a seminar funded by MAF and run by AgFirst and PA Handford & Associates’ consultants. Sim-ilar seminars are being held in other regions.

The seminar heard there has been a threefold increase in extreme weather events around the world in the last 30 years. New Zealand is experiencing its share of more frequent droughts, floods, and cold snaps. These events are having disastrous effects on sys-tems and profitability for those trying to farm for an ‘average’ year, says consultant John-Paul Praat,

PA Hanford & Associates. “We can’t stop the weather

doing its worst, but we can look at the potential implications and plan what to do in regard to stock-ing rates, animal welfare, feed availability,” says Praat. “We can also take steps now to lessen the problems caused by a warming cli-mate, such as breeding for facial eczema resilience, pest explo-

sions, changes in pasture species and weeds. Pasture growth peri-ods will change, meaning that lambing and calving may need to be earlier, and more effort put into making supplements at different times than now.”

He says there’s already a huge effort to cope with changes through government agencies and other working groups. Various

tools are being provided to help farmers understand likely future problems, and sort out how best to use them for their own situations.

One group has devised a risk management planner for farmers, farm managers and consultants, titled “Resilient Farm Systems & Climate Variability - What impli-cations are relevant for my farm?” This lists critical factors to be con-sidered; likely effects, things that can make a difference, what it might mean for my farm system, what’s relevant for me, and a blank column for individual action plans (with dates of intended action to be included).

Written in farmer friendly language, it has been loaded on the AgFirst website: http://www.agfirst.co.nz/agriculture/projects/climate-change.

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6 news

westland first to forecast for 2012-13SOUTH ISLAND dairy co-operative Westland is forecasting a payout for 2012-13 between $5.70 and $6.10/kg with advance payments set at $3.80/kgMS.

“We’ve put our forecast out on the table early,” chief executive Rod Quin told Rural News after a round of share-holder meetings earlier this month.

The forecast is back on Westland’s

latest prediction for this season, $6.30-6.60/kgMS, which was itself cut 30c/kg on April 26.

Quin says “it’s very much a buy-er’s market at the moment” for dairy products globally as a stellar season for nearly all in New Zealand draws to a close.

“We would expect prices to pick up later in the year but we’ve got to start the budget working with a high dollar.”

This season’s supply from West-land’s traditional West Coast catch-ment is 9-10% ahead of last year. Milk from four Canterbury farms, railed over the hill to the Hokitika factory via a con-densing plant at Rolleston, means total intake will be 13.5% up.

It’s the first season Westland has had suppliers in Canterbury and Quin says several more farms in the region, sup-plying “tens of millions of litres more

milk”, have signed for next season.A processing plant at Rolleston

remains on the cards, but hasn’t been signed off.

“It’s still a concept and we’re talk-ing to shareholders about our options to fund that facility. At this stage it’s not approved but we are going through the resource consent process.”

Westland’s name has also been linked with South Canterbury-based

New Zealand Dairies. Russian owner Nutritek put the plant on the market in November 2010 and despite visits from several potential suitors – domestic and overseas – no buyer has emerged. Quin says he can’t comment on Westland’s interest, other than to say all options have to be considered.

Fonterra says it won’t be releasing a 2012-13 forecast until after its next board meeting, May 22.

andrew Swallow

Team Theo takes shapeFONTERRA CHIEF executive Theo Spierings has unveiled a new management team to drive his strategy refresh.

All the 12-member executive team are internal appoint-ments. One position – managing director culture, people and services – is yet to be filled.

Spierings, who in September last year took over Fonter-ra’s reins from Andrew Ferrier, has retained five members of Ferrier’s seven-member executive team. Chief financial officer, Jonathan Mason, managing director Australia New Zealand, John Doumani and managing director ASEAN/Middle East/North Africa, Mark Wilson retain their titles.

Meanwhile, former man-aging director Fonterra trade and operations Gary Romano is the new managing direc-tor New Zealand Milk. He retains responsi-bility for the co-op’s New Zealand opera-tions, the core of its business.

Former group director, supplier and external relations Kelvin Wickham becomes managing director for China and India. Fonterra’s strategy refresh includes setting up 30 farms in China by 2020.

New entrants to the management team are Ian Palliser, managing director group optimisation and supply chain, Maury Leyland, group general manager strategy, Paul Campbell, group general manager mergers and acquisi-tions, Todd Muller, managing director cooperative affairs, Alex Turnbull, managing director Latin America and head of subsidiary RDI, Sarah Kennedy, who becomes the new managing director Fonterra Nutrition.

Two executives - managing director, global ingredients and foodservices, Andrei Mikhalevsky and group director human resources Jennifer Kerr recently resigned.

Spierings says from day one he has been impressed by the quality of people at Fonterra.

It is great to be able to draw on this strong bench strength when assembling our team, he says.

“With our refreshed group strategy confirmed, we have now aligned our business to deliver on our strategic pri-orities.

“The new structure and senior appointments reflect our focus on dairy nutrition and emerging markets, as well as our intention to reduce layers and duplication to drive efficiencies across the business.”

In line with the group strategy, Fonterra has formed new business divisions to grow emerging markets in China/India and Latin America, as well as a new global Fonterra Nutrition business to build the nutrition port-folio across the business, driven by innovation.

“These changes, along with re-configuration of exist-ing business units and the support functions within the company, will position us to increase volumes and value in line with our strategy,” says Spierings.

The new organisation structure will take full effect from the start of the financial year on August 1.

theo spierings


news 7

Rents row settled

HIGH COUNTRY farmers are hope-ful the spectre of “pay per view” rents is finally dead with Parliament passing the Crown Pastoral Land (Rent for Pas-toral Leases) Amendment Act on May 2.

“This is good news,” Federated Farmers High Country chairman Graham Reed told Rural News.

“It makes for better relations between the Crown and high country farmers.”

The Act will see rents set on carrying capacity of land exclusive of improve-ments, as opposed to a percentage of land value, which Land Information New Zealand had been interpreting as including aesthetic values such as set-ting and scenery.

The Minaret Case found that to be contrary to the Pastoral Land Act 1998, prompting the amendment.

In theory the amendment means “it’s back to business as usual” for farm-ers with crown pastoral leases, but the past decade’s saga of massive, and sub-sequently disputed, rent hikes has left a

sour taste, says Reed.“It’s done a hell of a lot of damage to

the confidence in pastoral leases.”He’s unimpressed with Labour’s

response to the Act passing, which was to slam it as “a sweetheart deal for a few farmers”, and concerned a change in Government could see the whole sorry saga start again.

“We hope it will be difficult to unravel this legislation but certainly we’re fearful of that.”

Reed says the legislation “is not a hand out” and the Minaret test case, taken by the Wallis family with help from the High Country Accord, should never have been necessary.

“Previous court actions had clearly identified the rents should be based on pastoral values. Unfortunately, this intention was clouded by political ide-ology and outside interest groups’ actions.

“Those who called for rents based on the High Country’s rugged beauty ignored farmers’ role in maintaining these environments so future gener-ations of New Zealanders can enjoy them.”

andrew Swallow

italians’ claim amuses nZ researchersWE ARE used to Aussies laying claim to everything from pavlova to Fon-terra… and are Italian scientists now getting into the act?

A group of international scientists headed by the Italians last week laid an ‘academic-first’ claim on linking the kiwifruit disease Psa with China – findings which Kiwi biochemists working out of Otago University released at the beginning of April.

Rural News discovered the Italian claim through a press release sent to a US corre-spondent and embargoed until last week. The overseas group said theirs was the first study released in a scientific journal to trace the bacte-rium back to its likely origin of China.

As has happened with many scientific discoveries, the international group has indeed beaten the New Zea-landers to journal publica-tion. But Professor Russell Poulter of Otago University says his group was still first to the findings but didn’t submit them to a scientific journal at that stage because they were focused on solving problems for our kiwifruit industry.

He is unperturbed and found the situation amusing. “We are delighted our finding has been confirmed by a group consisting of people from Italy, Canada, US, Brazil and Exeter…. It took five other countries to catch up with us but we are delighted,” Poul-ter muses.

He and his two Kiwi colleagues are

happy the Italian-led findings backed up their research.

“ Would we have liked to have been the first? Yes. We were the first to find it and report it. We were working directly at the request of Seeka and EastPack so these are industry people who want answers.”

Poulter says submitting to a sci-

entific journal is a time-consuming process which can hold up results becoming available.

“ We have been feeding our find-ings immediately to Seeka , EastPack and MAF.

“Basically it’s good news we got the same result.”

Poulter says there are differences in the two studies.

“We have done whole genome

sequencing and assembly of multiple strains including a number of the New Zealand isolates and our Chinese iso-lates are different from their Chinese isolates.

“We are also in the process of gen-erating a complete genome from the Chilean isolates.”

The Italian-led paper doesn’t have any Chilean data and has only a ‘snapshot’ type analysis of the New Zealand strains, but, unlike the New Zealand group, has looked at Korean data.

“We will have two Chi-nese sequences which all brings strengths to the analysis…. From the point of view of the kiwifruit industry it is all good. If another three groups want to publish something this month and they all come to the same conclusions, that’s even better.”

Poulter says they could have submitted to a scien-tific journal at Christmas but that would have left out the Chilean analysis which is being done now.

“The Chilean stuff is an important part of the puzzle.

“There’s a serious possibility the New Zealand infection came from China via Chile.”

Poulter believes his group will come up with an important scientific paper. “We are a New Zealand group looking at a New Zealand crisis; they are a European group looking at a European crisis so if the two groups take their data and add them together they become complementary.”

russell Poulter

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from 25,000t to close to 35,000t.

The co-op will need to widen its customer base. “A number of our cur-rent customers have told us they want more prod-ucts, which is a pretty good position, but we will spread our market. The likes of the Middle East, for example, will come

on stream for us next season.”

At the same time Miraka continues to grow its links with Vietnam. A recent delegation from Vietnam, led by officials from the World Bank, vis-ited Miraka and some of its farmer suppliers. Wyeth says the delega-tion wanted to see New

Zealand’s milk processing and farming systems and the relationship between farmer suppliers and milk processors.


news 9

miraka off to a flying start

miraka ceo richard wyeth says next year the company will be at 100% capacity – 5% ahead of its original target.

IN JUST its first year Miraka, the new Maori-owned dairy company, is ahead of its production targets.

The major sharehold-ers in the plant are the Tuaropaki Trust, owners of the land where the plant is built, and Wairarapa Moana, owner of at least 10,000ha in the area north of Taupo.

Vinamilk, Vietnams largest dairy company, has a 19% shareholding in Miraka. Other Maori trusts and individual farm-ers supply milk to Miraka. Tuaropaki also owns geo-thermal power generation used to run the plant’s 8-tonne drier.

Miraka chief executive Richard Wyeth told Rural News that next year they will be at 100% capacity – 5% ahead of their original target.

“Our goal was to sign up enough farmers to take us to full capacity next season and we’ve done that. We’ve had a lot of favourable responses from our farmers. We’ve had a good first season and that’s created credibility among farmers that makes

them confident to come across to Miraka as a good competitive option.

“We did some direct marketing to farmers but word of mouth has also helped and it’s very satis-fying when farmers start coming to us and are keen to join Miraka.”

Wyeth says their sales in the first year have gone remarkable well consid-ering they didn’t start making product until August last year when the factory opened. This also meant they weren’t able to take advantage of higher prices of about $4000/tonne for whole milk powder (WMP). But since then Global Dairy Net-work, which sells for them, has done a fantastic job selling their products.

Wyeth says because of Miraka’s relationship with Vinamilk, a lot of Mira-ka’s WMP has been sold to Vietnam. “But we’ve also sold into China and other markets in South America and the US. This is mainly WMP but we have also made a small amount of skim milk powder to sell.”

In the coming season the Miraka plant will come up to full capacity, mean-ing it will lift production

peter burke

Vive le re-woolution!EUROPE’S FINANCIAL crisis prompted at least one of the big name Italian fine wool users to reinvent itself to save its business, delegates at the New Zea-land Merino conference heard.

“Through that very difficult moment [2009] we understood we had to change our company com-pletely,” Francesco Poala, of Reda, told the confer-ence.

Turnover in the vertically integrated company – “we nearly go from sheep to shop,” notes Poala – had tumbled 30% and the jobs of at least 100 employees in Italy were at risk. “We had to save them.”

The answer was “Rewoolution”, a departure from Reda’s core market of high-end suit fabrics, to pro-duce next-to-skin merino sportswear.

Sponsorship of summer and winter sports events raised brand awareness but Poala told the conference product trials are key. “Only if people try the wool on will they understand the properties and advantages.”

Wool for Rewoolution product comes from Reda’s three farms in New Zealand, totalling 30,000ha, and others, via New Zealand Merino. In total the firm uses 16,000-18,000 bales/year.

NZM chief executive John Brakenridge says Reda’s skill, like many in the Italian industry, is to know when to cooperate and when to compete – and there’s a lesson in that for New Zealand.

“Some of their biggest competitors are their best friends. What we’re saying is we need to do a lot more of that [cooperation].”

• More on NZ merino conference pages 12-13

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news 11

High farm debt causes concern

Phil Journeaux sounded warnings about farm costs, debt and productivity.

WE ARE slowly but surely killing our farms with costs, agricultural consul-tant Phil Journeaux says.

“We simply have to get these under control,” he told a seminar he ran at Waikato University where he also sounded warnings on debt levels and produc-tivity, particularly for the dairy sector.

As an example he says the average dairy farm last year needed a $6.15/kgMS payout to break even. The forecasts for next season were between $5.70 and $6. (The BNZ recently pre-

dicted $5.80). He person-ally did not think it would reach $6.

And despite the mas-sive growth in dairying in the last decade, Jour-neaux said in the face of increasing costs it had only boosted productivity by 1.4%

“The squeeze is coming back on farmers and comes back to the increase in farm costs,” he says. “There’s a combination of rapidly increasing farm costs and relatively aver-age improvement in pro-ductivity. The only thing that will beat inflation is improving productivity.”

Journeaux, who joined AgFirst on April 2 after 35 years with MAF, says mod-eling he did while at MAF (now Ministry for Pri-mary Industries) showed growth in costs was larger than the growth in rev-enue.

“Farmers don’t know that – you have a spot of bother and it’s easy within three to 24 hours to have a truck full of palm kernel come in the gate and prob-lem solved.

“Many farmers are replacing pasture which is their cheapest feed with imported feed and that’s where some of the produc-tivity goes down the tube.”

Journeaux says, in con-trast to the past, roughly

a third of farm working expense now is supple-mentary feed including hay and silage on farm, grazing out and supple-mentary feed in particular palm kernel.

“The average farm is buying in one hell of a lot of feed these days,” he said, while labour costs had stabilised.

Earlier Journeux showed comparisons between the Consumer Price Index (CPI) and the Primary Producers Index (PPI). Over the past 15 years the CPI had grown 45% and the sheep and beef PPI by 56%. But dairy-

ing had grown 5.4% per annum or 99% during that time. “Which is of crucial interest to the ag sector – we are slowly but surely killing our farms with the costs.”

Journeaux says farm-ers face increased costs in non-tradeables (under CPI) such as doctors bills, rates and electric-ity charges, and rising fertiliser costs are also a factor.

“But coming back down to the farm situation – dairy farming had the highest inflation,” he says.

Productivity for all farming sectors had increased two and a half times over the last decade which “isn’t too bad versus the rest of the economy which grew at 0.2% which is truly appalling and why we are rapidly approach-ing the bottom of the OECD tables in just about everything.”

But dairying produc-tivity improved 1.4% in a decade “which isn’t par-ticularly good at farm level”. Journeaux says the break-even for the top 10% of dairy farmers is $4.56. Alarmingly the bottom 10% had a break-even of $8.48 which presumably meant they were devel-oping farms and cross-subsidising from another business. However he

pam tipasaid it was of concern in the face of the falling milk price.

Journeaux says last year’s data showed the top 10 dairy farmers were two times more profitable per hectare than the aver-age farmer and five times more profitable than the bottom 10%.

In sheep-and-beef the

top 10% were two times more profitable than the average but 32 times more profitable than the bottom 10.

“There’s a significant tail end in profitability,” he says. “There’s a relentless need to improve produc-tivity in the sector… it is a matter of a combination of farmer skills and trans-

fer. The technology and management systems are out there – it’s a matter of applying them.”

“there’s a combination of rapidly increasing farm costs and relatively average improvement in productivity. the only thing that will beat inflation is improving productivity.”

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12 news / nz merino stampede

Fine wool flying highThe outlook for all things merino is promising, delegates were told at New Zealand Merino’s Stampede conference in Christchurch. andrew swallow reports.

BY THE time New Zea-land Merino and its part-ners are finished, there won’t be scrap of the fine wool left that they haven’t

found a niche market for, judging by the firm’s recent conference in Christchurch.

The 560 or so dele-

gates – a record atten-dance – heard how textile brand partners around the world are seeing sales soar, despite economic pres-

sures. Meanwhile initia-tives in meat, leather, and even the animal’s horns look like paying off.

“I’m not saying we’re

going to be Apples, and we’re not going to be Googles, certainly not Virgins... but we must endeavour to be the best we possibly can be,” said NZM chief executive John Brackenridge early in the day’s proceedings.

The firm’s $36 mil-lion Primary Growth Part-

nership with Silver Fern Farms, now into its second year, provides more fuel to work towards that goal.

“The aim is to be an exemplar to the rest of the primary sector to dem-onstrate what can be achieved.”

A string of supply chain and brand partners from around the world graced the conference stage, Brackenridge asking ques-tions TV show-host style. Most commented on how demand for merino wool is growing; some touched on the tension shrinking supply and now soaring prices are creating.

As John Fernsell, of US outdoor clothing man-ufacturer Ibex put it, a divergence in supply and demand is “not going to end well and we need to deal with that.”

After a decade of pro-ducer visits where growers complained about rising production costs, Govern-ment policies and weather extremes, this year he found “everybody really happy.”

“We’re at a [price] point now where you guys are doing very well. That’s outstanding because if you weren’t, we were all going to go down.”

Current prices would prove a challenge for Ibex, but it’s a challenge Fern-sell welcomes. “It’s up to us to market better so the supply will continue to grow.”

Fellow American Les Wan, of SmartWool, echoed the demand-growth line. “SmartWool

is growing and we are going to need more wool. So are many of our brand partners. We are going to need more wool!”

Meanwhile Götz Giebel, of German multi-national spinner Südwolle noted how once “wool was a no go... Nowadays it’s a must have fibre.”

Introducing Giebel, NZM international marketing manager Gretchen Kane pointed out Südwolle has the capacity to spin three times New Zealand’s entire production. Kane says despite its economic difficulties Europe remains the “heart of luxury” and main market for fine wool, largely through the global brands of Italian manufacturers.

But while the brands are European, buyers increasingly are not, with the newly wealthy of China, Russia and else-where seeking the top labels, even flying in to “buy the best and avoid taxes in their own coun-try.”

Wool’s share of the sector has recovered from next to nil – “people had been educated out of wool” – to 15%. Even “die-hard synthetics” users such as Patagonia have introduced a merino base layer range, she added.

But for all the “me toos” coming into the merino clothing market, 75% of sales are accounted for by just three firms, and they’re all NZM brand partners: Icebreaker, Ibex and Smartwool.

NZ merino international marketing manager Gretchen Kane.

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nz merino stampede / news 13

Icebreaker warms to price rises

THE LIFT in merino wool prices is “the crisis we’ve been looking forward to,” IceBreaker chief executive Jeremy Moon told the NZM conference.

“The price of merino wool is going up; it’s been creeping up for a long time but it’s had a leap this year... I feel really good about that. I always wanted it to get to the point that reflects the true value of the fibre.”

Moon says he hopes the price surge can “lift the industry out of the sunset phase into a new dawn.”

“The good thing about the contracts we have is they give us time to adjust our business models. But it’s still very chal-lenging.”

Firms such as Icebreaker have fairly narrow net margins because of their continual high level of investment, notably in product innovation, he points out.

Icebreaker is also rapidly developing its own retail chain with seven stores across North

America, the first “flagship” New York outlet opening November 2010, followed by a second in the Big Apple, then San Francisco, Vancouver, Portland, and Mon-treal. The Vancouver one paid for itself in six months so a sec-ond’s been opened.

Moon says the stores are to raise brand awareness and facil-itate direct customer contact, helping sell the sustainable, fine wool story. They also get around the inherent conservatism of retailers which can limit prod-uct offering.

However, marketing through other retailers is a great test because goods must sell well, at a premium, on the shelf next to big brand outdoor clothing names such as North Face and Patago-nia with their billion dollar bud-gets.

“We’d been a pretty tradi-tional business since our 1995 launch – making things and sell-ing them to the retailer. We were always that one step abstracted [from the customer].”

merino and its many magnificent formsDEVELOPING A premium market for merino meat is well underway in New Zea-land, with 35 top restaurants serving the elite Silere brand launched to coincide with the Rugby World Cup.

“The programme’s in place. We’ve now got the confidence to take this prod-uct, in a careful manner, on a global roll out,” Brackenridge told the conference.

“But just like with merino fibre, we’re segmenting the market,” he added, introduc-ing the premium retail brand Alpine Origin, which, like Silere, has been developed with PGP project partner Silver Fern Farms.

Meat isn’t the only non-wool market NZM’s intent on developing: niches for merino lanolin are being looked at.

“We’re hearing some

people are offering to scour the wool pretty much for free because of the value of the lan-olin,” says Brackenridge.

Colleague Nick Aubrey told the conference it’s “liquid gold” in cosmetics and prices are “skyrocketing”. AgResearch work had shown New Zealand merino lanolin to be less strongly coloured than crossbred or Australian merino.

“We have the best quality. It’s fantastic. It’s exactly what we were looking for.”

Meanwhile, the quest for the best possible partner to make something of merino skins took NZM round the world, and back again, ending in Washdyke, South Canter-bury, at deerskin specialist, New Zealand Light Leath-ers. “They work with all the superheros of leather across

the world,” noted Aubrey.NZLL’s first three merino-

skin handbags were unveiled at the conference.

“It’s a challenging mate-rial to work with... but has a wonderful natural texture,” said NZLL’s Neil Dickson. “There’s real potential that’s untapped.”

As for the horns, Aubrey says dog-chew markets are being scoped through a pet store in San Franscisco, and a heap were given to a husky team to try.

China’s academy of tradi-tional medicine has also been engaged to see if they might offer an alternative to increas-ingly hard-to-find antelope horn. “We don’t know what’s in them, but we’re going to find out.”

The product development work is being driven with PGP funding.

chef Hayden mcmillan serving silere merino meat to conference delegates.

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14 news

interest in bio-farming keeps growingINTEREST IN biologi-cal farming systems keeps rising, says scientist Guna Magesan.

His comments came as 120 representatives from academic institutions, crown research institutes, regional councils, biologi-cal fertiliser companies, Maori land trusts, Feder-ated Farmers and Rural

Women New Zealand recently attended an infor-mation day in Rotorua.

“This shows there is a growing interest in bio-logical farming systems in New Zealand as can be seen from the number and the quality of people at the information day,” says Magesan, who organised the event for New Zealand

Biological Farming Sys-tems Research Centre. It was sponsored by the Bay of Plenty Regional Coun-cil.

The council’s sustain-able farming advisor, John Paterson, told attendees biological farming systems are attracting considerable interest and appear to hold some promise for protect-

ing our environment.“Conventional farm-

ers understand more and more that they need to look to the land itself and look to nature to find more sustainable ways of managing their farms. We understand that modern biological farming meth-ods use nature and sci-ence to build healthy soil

quality that can support healthy crops and healthy livestock.

“The combining of good science with sound farming practices should be a drawcard for any farmer.”

Keynote speaker Dr Ravi Sangakkara, professor of crop science at Sri Lan-ka’s University of Perad-

eniya, spoke on ‘Effective microbes technology’. For many farmers the topic was reasonably new, says Magesan.

“Many of the partic-ipants felt happy to be part of the growing trend in sustainable farming through biological farming systems, but they wanted more scientific data to be presented at the seminar to have a good discussion.”

Gifford McFadden, a trustee and the proj-ect leader for biological farming systems research, says people from as far as Whangarei and Balclu-tha attended the informa-tion day.

Many local farmers and biological fertiliser sup-

pliers from Edgecumbe, Galatea, Lake Karapiro, Matamata, Paeroa, Puta-ruru, Raetihi, Repo-roa, Taupo, Tauranga, Te Puke, Thames, Waihi and Whakatane also attended.

Magesan says partici-pants took part in group discussion to take biologi-cal farming forward. Com-ments and suggestions will be circulated to the participants.

New Zealand Biolog-ical Farming Systems Research Centre is the trade name of the Rotorua Lakes and Land Trust – a joint venture between Te Arawa Federation of Maori Authorities and Rotorua/Taupo Province of Feder-ated Farmers.

BCF tickled pink with rural supportIT CAUSES more ill-health and deaths in the coun-try than tractor and quad accidents combined, yet it gets fewer headlines.

On average, five rural women per week are diag-nosed with breast cancer.

That’s not the only bad news. Living rurally makes it more challenging for women to access reg-ular screening than their urban counterparts, which means diagnosis can be later and medical outcomes less promising.

In May and June, Speedrite by Tru-Test is offering a range of ‘pink’ fencing products – the AN90 strip grazing energiser, polywire and gate-break handles – giving $7 from each product directly to the Breast Cancer Foundation. The money will pay for research and raising awareness of breast cancer in the rural community.

“We think it’s a natural step to use the profile of Speedrite to help address breast cancer in the coun-try,” Tru-Test Group marketing manager Shaun Owen says.

“Speedrite is about good farm management while breast screening is about good health management; there’s a big overlap between the two.

“Farming businesses are now, more than ever, shared enterprises, which means breast cancer is more than a deeply emotional issue; it can be an eco-nomic one as well.”

BreastScreen Aotearoa offers free mammograms every two years to women aged 45 to 69. In addition, the New Zealand Breast Cancer Foundation recom-mends annual mammograms for women aged 40 to 50.

Gifford mcfadden, a project leader for bio-logical farming systems at a research farm.

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16 news

competition a boost to maori farmingTHE PERFORMANCE of Maori farming has lifted as a direct result of the Ahu-whenua Trophy compe-tition for excellence, says

Kingi Smiler, chairman of the contest management committee.

He told Rural News there’s been a vast improvement in gover-nance and leadership in

the trusts managing Maori farming enterprises. His comments came as the three finalists in this year’s competition held field days to show the judges and others what they have

achieved.The Ahuwhenua

Trophy competition is held annually, but alter-nates between sheep and beef and dairying. This year’s competition is for

peter burke

dairy farmers, the winners to be announced early June at a function in Auck-land.

Smiler says previous winners of the trophy have been good role models for new entrants to the com-petition and there is a better understanding of the requirements. Field days and other networking opportunities are held and there’s been more formal training.

“The Institute of Direc-tors courses, along with a lot of smaller courses on governance, have helped build governance and lead-ership skills. We are seeing the Maori trusts becoming much more professional now and using their advi-sors well. They are much more demanding of them in terms of performance.

“The trusts are also making sure they employ good staff such as share milkers. Sometimes it’s their own people but they are quite happy to go out there and find the best people to help them on their farms.”

Smiler says Maori are

making a significant con-tribution to New Zealand agriculture. They make up about 10% of dairy pro-duction and 15-20% of the sheep and beef sector. Because Maori farms are mostly large they can pro-vide a significant benefit to the economy.

Smiler points out that Maori are now starting to extend their role in the value chain with its agri-cultural production.

For example, the new Maori-owned Miraka dairy plant near Taupo, now in its first year of operation, has proved highly suc-cessful.

“We are looking to con-trol our own destiny in a way we would like. If we find we can do that eco-nomically and benefi-cially, we think the long term will be a more sus-tainable proposition for our people, rather than some of the previous value chains like Fonterra and the other more frag-mented ones in the sheep and beef industry.”• More on the Ahuwhenua Trophy, see page 36-37.

Kingi smiler with the ahuwhenua

trophy.

$8m granted in latest SFF roundTHE MINISTRY of Primary Industries (MPI) has approved 61 projects for funding from its Sustainable Farming Fund (SFF) , with a total allocation of just over $8 million over three years.

Of the new projects, 29 projects will get grants of at least $25,000 for up to three years (total allocation $7,388,432).

Also, 29 smaller schemes targeted at feasibility proj-ects for smaller sectors or regional groups will get funding not exceeding $25,000 (total allocation $636,472).Three existing projects will get extension funding (total alloca-tion $76,087).

Kathy Mansell, MPI director of growth and Innovation, says the approved projects represent a balance of funding across the primary sectors, regions of New Zealand and types of activities (such as development, extension, fea-sibility studies and capability building).

“The SFF is typically between three and four times oversubscribed, and this round was no exception. Com-petition is tough and the approved projects deserve MPI’s support. We look forward to seeing the outcomes of their work.”

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IT24

88


18 news

cow pooling adds $200 per beastFARMERS CAN make an extra $200 a beast by cow pooling, while the pur-chaser gets cheaper meat, says Federated Farmers Rural Butchers chairper-son Mike Hanson.

And the practice of urban people banding together to buy a beast and

have it processed for meat is on the increase, says Hanson.

“It’s really just buying in bulk,” he says. “The freezing works is only paying $3.50/kg. The farmer may be able to sell it to the cow pool-ing person for $4-$5/kg, so they might be making an extra $2/kg. He might

make an extra couple of hundred dollars for him-self from one beast.

“The person buying it, instead of paying $15-20/kg is only paying $8-$9… it works out a lot cheaper.”

Following a Sunday television programme on this practice of urban people banding together to buy a beast and have

it butchered, the Abat-toirs Association and Beef + Lamb NZ have raised safety concerns, the latter saying the practice should be stopped.

But Hanson says cow pooling is safe provided beasts are sent to abattoirs for killing.

“It’s been done for hun-dreds of years now – kill-

ing the beast on the farm and cutting up. That’s probably safe, but if every-one is going to do cow pooling it has to be sent to the abattoirs.”

Sunday made it look as though it was all farm-killed meat, creating con-fusion, Hanson says.

“But if it goes to abat-toirs it’s good as gold.

pam tipa

If you kill it on the farm for the farmer he must eat it himself or give it to friends; he’s not allowed to sell or trade.”

Hanson, who runs Netherby Meats, Ashbur-ton, says demand for ‘cow pools’ are on the increase. His business offers butch-ery, processing and home kills for farmers. But ‘cow pool’ beasts are sent to the abattoir.

“We’ve had heaps of people talking about it; we had 10 last week, 8-10 this week for cow pooling people. But it’s all being sent to the abattoirs so it’s all good to go.”

Hanson says if you

aren’t a farmer or farm worker the Animal Prod-ucts Act states you must be actively engaged in the ‘day-to-day’ maintenance of an animal for 28 days before it is processed.

“That said, it’s poten-tially a good way to recon-nect people to where their food actually comes from,” he says.

“That connection is important when the Sunday Star Times quizzed 21 primary students, all believing cotton socks came from animals. Some thought scrambled eggs came from plants and most were convinced yoghurt grew on trees.”

mike Hanson says cow pooling is safe provided beasts are sent to abbatoirs for slaughter and processing.

a CaNTeRBuRy farmer who has sold animals for meat privately for some years says he does it because he enjoys seeing people get quality meat at cheaper prices.

But the farmer, who does not want to be named, makes no extra money out of it because he sells the cow at the going farmgate rate. The beast must then be killed at the abattoir and he uses a butcher “who knows what he is doing”.

He doesn’t chase the business, but if he “had his time again” he might look at it. But a farmer looking seriously at it as a money-making venture would have to factor in such things as quality of meat and year-round supply.

“For us it is only a service to people we’ve known for years and it’s been a word of mouth. The same people do it every year.

“We make sure they get the best animals available. Being in the beef business all my life, I know it’s the quality of the animal that determines what it’s like in the freezer and it’s the breed as well.”

He says the cost to his buyers, averaged out over the cuts, would be about $6-$8 a kilo while the retail price in supermarkets is $15.

The difference between what the farmer gets and the retail price in supermarkets has progressively worsened over the years, he says. By the time the meat reaches the shelves it is double the price the farmer gets, then the retail price is greater again.

“It is the old saying for farmers ‘you buy retail and sell wholesale’.”

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dira hearings draw a mixed response


20 news

THE DAIRY Industry Restructuring Amendment Bill (DIRA) drew a very mixed response during its recent pas-sage through the parliamentary select committee process.

Fonterra described the bill as “piv-otal to its future,” a leading opponent, Leonie Guiney, wanted the bill scrapped altogether and the private dairy proces-sors and Federated Farmers wanted a variety of changes – especially in the way Fonterra sets the farmgate milk price.

The hearing of submissions on DIRA provided a forum for people with

already well-known positions to per-sonally express them. Chaired by farmer and National MP Shane Ardern the hearings were low key with friendly out-bursts of banter throughout the day. But though the process was low key, there were strong and technically detailed submissions against the bill.

Leading the Fonterra team, Sir Henry van der Heyden gave the bill the thumbs up saying with a few minor tech-nical tweaks the co-op could live with the proposed legislation. He described the bill as “the thing for New Zealand, Fonterra and all dairy farmers”. He was “excited about its introduction to Par-liament and especially the provisions in

it for TAF (trading among farm-ers).

He noted Fonterra has pro-posed some “technical changes” to TAF provisions and reiterated the key outcome of TAF would be ‘per-manent capital’ for the co-op. Fonterra chief executive Theo Spierings – making his first appearance at a parliamentary select committee – said Fonterra was at a “crossroads as a cooperative”. He saw DIRA as a “defining moment” for Fonterra.

Sir Henry again voiced concerns at the milk oversight provisions, saying though Fonterra didn’t like them it could live with them. However Fon-terra Shareholders Council chairman Simon Couper said they couldn’t live with them. He described the provisions as “unnecessary” and that extra regula-tions ran the risk of politicising the milk price issue and impacting negatively on dairy farmers balance sheets.

The main broadside against DIRA came from the Independent Dairy Producers Group (IDPG) represent-ing Miraka, Synlait and Open Country. IDPG wants changes to the legislation to stop Fonterra doing what it now does. They accused Fonterra of being “anti-competitive” in the way it sets the farmgate milk price.

IDPG spokesman Dr John Penno told the hearing Fonterra set the price artificially high by cross-subsidising this from its profits to the tune of $600 million. This process resulted in Fon-terra’s profit being substantially lower

than a group of international peers, arti-ficially lowering Fonterra’s share price.

IDPG said DIRA effectively enshrines the “super competitor” con-cept and will permanently lock in an artificially high farmgate milk price.

“This is having a dramatic negative effect on the dairy industry, as well as stifling competition and is sending farmers distorted pricing signals about milk. This will lead to overpriced dairy farm land, accelerated rates of dairy conversion and over production on existing farms,” Penno claimed.

He said the raw milk market in New Zealand is not a competitive market. “We have a very dominant player put there by legislation. What we are asking for is a milk price that approximates what would happen in a competitive environment rather than a dominant player setting that in an unfettered way.”

Also unhappy about Fonterra’s apparently privileged position in the legislation was Rod Quin, chief execu-tive of Westland Milk Products, a farmer cooperative based in Hokitika. Quin says the co-op wants a “level playing field” allowing for “genuine competi-tion”. He says to date DIRA regulations have failed to effectively regulate Fon-terra’s activities – especially the way it sets its farmgate milk price.

“Westland wants the milk price set-ting done off ‘actuals’. By that we mean actual product mix, actual prices and actual operating costs. We’ve seen argu-ments from Fonterra saying it’s driven mainly off prices. I accept they are using actual prices, but they are not using actual product mix and they are not using operating costs. It’s a theoretical model which they have designed and are implementing but that’s not a healthy outcome from our perspective.”

Federated Farmers told the commit-tee it wanted a “very clear DIRA Bill”, not one open to interpretation by law-yers. Andrew Hoggard told the hear-ing that the Feds also want Fonterra to set its farmgate milk price on ‘actuals’. He claimed this is simple and will give greater certainty and clarity to farm-ers. Interestingly, the Feds favour the oversight of the milk price by the Com-merce Commission; they hope it will provide true oversight and not allow for ‘gaming’ with the milk price.

An individual submitter on DIRA was Fairlie dairy farmer Leonie Guiney, along with 600 others a strong oppo-nent of he legislation. She said the bill was ill-informed and premature and that farmers needed it like a hole in the head. Guiney described the TAF part of the bill as “a public float by stealth” on the part of Fonterra.

peter burke

from left: John monaghan, fonterra director, sir Henry van der Heyden and theo spierings.

from left: steven smith, ceo open coun-try dairy; dr John Penno, ceo synlait and Kingi smiler, chairman miraka.

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news 21

primary sector boot camp for the uSA STUDY some years ago of New Zealand’s tourism, dairy, beef, lamb, deer and kiwifruit export markets found a lot of duplication, says AGMARDT chairman Jeff Grant.

“We discovered we all invested in North Amer-ica, we all invested in

Asia and Europe by simi-lar amounts… we had the same markets to the same countries,” says Grant, then chairman of the NZ Meat Board.

Grant says the only reason collaborative mar-keting did not get off the ground was Tourism NZ was then committed to the 100% Pure brand (which in the end which was not deemed successful) which agriculture was not com-fortable with.

When 20 of New Zea-land’s chief executives in deer, dairy, beef and sheep, seafood and horticulture get locked away together in August at a ‘primary sector boot camp’ at Stam-ford University, Grant has high hopes they will come up with some joint mar-keting strategies which, this time, will stick.

“You take, for exam-ple, Germany – we put wine, venison, beef and lamb into there. If you took those four products and looked at working together on some of the structural stuff for export, you could do it differently and help shift the prod-uct,” he says.

“It’s not going to work for every product, but the opportunities are there.”

The idea of the boot camp, the first grant to be awarded under AGMARDT’s new stra-tegic priority for in-mar-ket grants, was kicked off

by John Brackenridge of The New Zealand Merino Company and Keith Cooper from Silver Fern Farms, says Grant.

They are working on a cooperative agreement to increase the value of New Zealand meat and were involved through the Primary Growth Partnership (PGP) with

Stamford University, where Brackenridge had also done a course as part of his professional development.

“There’s always been this debate in agriculture about whether competi-tive companies should be more collaborative about the way they operate in the market.

“What formed out of that is ‘what if you got a whole lot of chief execu-tives together and went off and looked at what are the opportunities?’ ”

The boot camp idea was born and AGMART was impressed that 20 chief executives are willing to take part.

“You get a group of like-minded people together, physically shift yourself away for a week and devote the whole time to looking at what the opportunities could be for New Zealand agriculture, horticulture and the sea-food industry.

“So we have done a deal with Stamford to have access to the university for a week, we are fund-ing some of the top-flight speakers but companies have to put up the money to go and stay there.

“We put up $100,000 and our expectations are that after the week they come back and tell us what new things are worth look-ing at collectively for agri-culture and horticulture

pam tipa – what we could do dif-ferently especially into Asia. We will look at fund-ing some of those in the future.”

Other supporters of the

“You get a group of like-minded people together, physically shift yourself away for a week and devote the whole time to looking at what the opportunities could be for New Zealand agriculture, horticulture and the seafood industry.”

• More on Agmardt funds page 24

primary sector boot camp are the Ministry of Science and Innovation, the Minis-

try for Primary Industries and New Zealand Trade and Enterprise.

Jeff Grant


22 world

uS co-ops earn $144bn and rising

AMERICA’S 100 largest agriculture co-opera-tives reported revenues rising 4% to a near-record NZ$144.66 billion in 2010, driven higher by booming dairy co-op returns. The US Department of Agricul-ture says net income was up at least 10% to NZ$2.93 billion.

CHS Inc, a farm supply, grain and foods co-op based in Saint Paul, MN, topped the list with 2010 revenue of NZ$31.01 billion.

Land O’ Lakes, a dairy foods and farm supply co-op, also based in Saint Paul, ranked second with revenue of NZ$13.6 billion; Dairy Farmers of Amer-ica, based in Kansas City, Mo., was third with NZ$12 billion.

The USDA’s top 100 co-op list shows that 23 had 2010 revenue of NZ$1.22 billion. Another 47 had rev-enue between NZ$620 million (US$506 million) and US$1 billion. The 100th ranked co-op had sales of NZ$338 million.

Leading the revenue increase from 2009 to 2010 were dairy co-ops, which saw revenue climb 14.5% to NZ$36.1 billion. Dairy co-ops accounted for at least half the revenue increase recorded by the top 100 co-ops.

Gross margins, as a percentage of total sales, were up slightly, from 9% to 9.2%. The increase in gross margins partially covered higher expenses.

Total expenses for the top 100 co-ops were up NZ$705 million in 2010. The largest cost increase was for labour, where expenses climbed by 7% to NZ$5.6 billion. On the other hand, lower interest rates and less debt caused interest expense to drop 11%.

“While it is encouraging to see the nation’s larg-est farmer-owned cooperatives reporting strong rev-enue and income, it is also noteworthy the nation is seeing a surge in the formation of small-farmer co-operatives and quasi-co-operatives created to meet the growing demand for locally produced foods,” USDA rural development under secretary Dallas Tonsager says.

The asset base for the top 100 co-ops grew by NZ$2.8 billion between 2009 and 2010. Cur-rent assets accounted for nearly two-thirds of that increase. Fixed assets also showed an increase of NZ$735.8 million.

alan Harman

aussies look to underground water storage to meet demand

BACKERS OF a proposal to store large volumes of Aus-tralia’s precious fresh water underground say the move would offset climate change, avoid evaporation losses and meet national water needs.

Researchers in the National Centre for Ground-water Research and Training (NCGRT) say managed aqui-fer recharge – the injection or infiltration of excess surface water into underground aqui-fers – could help secure the nation’s water supplies for an uncertain future.

Prof. Tony Jakeman of NCGRT and the Austra-lian National University says with bigger droughts and floods forecast under climate change, along with rapidly rising emand from growing cities and industries, managing water wisely will be central to the nation’s pros-perity and sustainability.

He says a workshop of leading groundwater experts convened by NCGRT identified twelve dif-ferent sources of water in regional Australia that could be success-fully ‘parked’ underground for use in time of need. These include sup-plementary irrigation water, sur-plus runoff into dams, and water brought to the surface by coal seam gas extraction and other mining.

“There are many benefits from storing water underground,” Jake-man says. “These include recharg-ing depleted aquifers, enlarging storages without building more dams, reducing evaporative losses,

reconnecting surface and ground-waters, watering the Australian landscape from underground and creating strategic reserves in crit-ical food-growing or urban areas.”

Doctoral researcher Andrew Ross says Australia already stores the equivalent of 1800 Olympic-size swimming pools of water underground in the Burdekin region of Queensland every year – and brings it up again for use in agriculture and horticulture.

“But in Orange County, Califor-nia, they store about 300 gigalitres (GL) a year – enough for the house-hold use of 2.3 million people,” Ross says.

The combined proven storage capacity of aquifers below Perth, Adelaide and Melbourne is 200GL – capable of meeting the needs of

2.5 million residents and poten-tially as much as 430GL, he says.

Australia now loses about 4200 GL a year in evaporation from sur-face storages across the Murray-Darling Basin, enough water to supply Sydney and Melbourne for four and a half years.

“On the face of it managed aqui-fer recharge looks tremendously promising, but we need a more detailed understanding of our aqui-fers, likely environmental impacts and, of course, we need effective rules and rights for injecting and recovering water on a large scale,” Jakeman says.

The workshop identified four potential projects where the con-cept of underground storage can be tested more thoroughly – on the Condamine in Queensland,

the Namoi in NSW and two rivers in northern Victoria.

“Water injection looks to be a whole lot more affordable than desalinating sea water, which is often proposed as a solution to our urban water shortages,” Ross says.

One of the largest untapped sources of water in Australia is the northern wet, covering the top one third of the continent. The wish to preserve wild rivers combined with high evaporation rates make major dam building in the north unlikely.

“Underground storage is likely to be socially more acceptable than building new dams in Australia – but it must be carried out with care, and with a detailed understanding of the impact on other water bodies on natural ecosystems and commu-nities,” Jakeman says.

alan Harman

each year australia loses in evaporation from surface storages across the murray-darling Basin enough water to supply sydney and melbourne for four and a half years.


world 23

uk farmers outraged at milk price cutTHE NATIONAL Farm-ers’ Union is demanding UK milk processors stop exploiting dairy farm-ers after four major com-panies cut farm gate milk prices.

NFU says something is fundamentally wrong with the dairy market after Dairy Crest, Robert Wise-man, Arla and Muller all announced exactly the

same cuts to suppliers of 2p (4.06 NZ cents)/L.

“Dairy farming is a long-term exercise,” NFU dairy board chairman Mansel Raymond says. “Investment, breeding, skills and a range of other elements allow farmers to improve their businesses to meet market demands, reduce their environmen-tal impact and generally strive to fulfill the require-ments of a growing pop-ulation with dairy at the heart of its diet.

“It is catastrophic that short-termism further up the supply chain has led to cuts which mean a typi-cal farmer will lose about £20,000 (NZ$40,614) per year.”

Raymond says the buyers claim to be building long-term relationships with suppliers and cus-tomers and demand spe-cific standards to match.

“Yet when an opportu-nity to cut farmers’ milk prices presents itself, it seems this all means nothing,” he says. “Milk buyers transferring losses accrued as a result of their own business strategies to farmers whose businesses are already struggling is totally unsustainable.”

This raft of milk price cuts exposes fundamen-tal problems in milk con-tracts, Raymond says. “As long as milk proces-sors can get away with this atrocious behaviour, it seems they will do so.

“Farmers need and deserve contracts where their basic terms are clear, specifically on price,” Ray-

mond says. “The status quo where buyers can change the deal and cut prices without conse-quence is fundamentally wrong and must change.”

Dairy Crest and Robert Wiseman Dairies blamed the “challenging” market environment for their decisions.

Dairy Crest has already cut the price to its 1300 dairy farmers. The proces-sor recently announced

the closure of two of its UK plants after Tesco (Britain’s biggest super-market chain) told Dairy Crest its contract to supply liquid milk will not be renewed when it ends in July. About 3% of Dairy Crest’s liquid milk sales in 2011-12 were made to Tesco.

“On top of downward pressure on its selling prices in a tough con-sumer environment and an extremely competitive middle ground, the whole dairy sector is suffering from steeply falling com-modity markets,” Dairy Crest says.

Raymond says the deci-sion to slash the price with a mere four days’ notice was outrageous.

“How can any farmer run a business faced with cuts of this degree and immediacy? This only reinforces the need for balanced and fair milk contracts. Farmers sup-plying Dairy Crest liquid contracts are now forced to accept a price cut they have not agreed to for at least the 12-month notice on their contract.

“This is sheer exploi-tation and the clearest demonstration yet that those dairy contracts, where buyers have the dis-cretion to change price without mutual consent, must have break clauses which allow farmers to leave earlier.”

The Robert Wiseman reduction doesn’t kick in until June 1. It says its farm-gate milk price reduction after three

alan Harman years of increases totalling 4.55p (9.24 NZ cents)/L reflects the continu-ing and sustained impact of a challenging market environment and more recently a collapse in the value of bulk cream.

“Higher returns from cream prior to the turn of the year partially compen-sated for other pressures

facing the business, but the collapse in bulk cream value since the begin-ning of 2012 has resulted in an untenable position,” Robert Wiseman says.

The price cut lowers the farm-gate price to 26.42p (NZ53.65 cents).

“The slide in the value of cream has accelerated since the turn of the year

and the lack of relief from other market related pres-sures mean we can no longer sustain the Wise-man milk price at the level it was at,” Wiseman milk procurement director Pete Nicholson says. “It is essential we continue to strike a balance between paying a competitive milk price to farmers who are

not aligned with major retailers, and the ability to compete within our sector of the dairy industry.”

Wiseman says when its last farmgate milk price increase took effect in October, 2011, cream was trading at £1580 (NZ$ 3208) a tonne. Latest fig-ures from DairyCo put the value of cream some 47%

less at £840 (NZ$1705) a tonne.

Arla’s price cut takes effect June 1 and lowers the payment to its 575 producers to 26.61 pence (NZ54 cents)/L.

NFU president Peter Kendall says he wants Farming Minister Jim Paice to take action over unfair milk contracts.

“on top of downward pressure on its selling prices in a tough consumer environment and an extremely competitive middle ground, the whole dairy sector is suffering from steeply falling commodity markets.”

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24 agribusiness

High demand for funds

MORE GRANTS for export market research will be provided by AGMARDT as a result of it learning of New Zealand exporters’ difficulties in putting their products on the market.

Chairman Jeff Grant said this was a major mes-sage after talking to about 30 agribusiness people. “It costs a lot of money, and getting research and understanding new markets is hard,” Grant says.

AGMARDT also reviewed its strategy because it found it was funding core research on farm and in universities covering similar ground to Beef +Lamb and DairyNZ.

Established in 1987 with $30 million from the British Phosphate Commission, the not-for-profit organisation’s fund has now grown to $70 million and it distributes $2.3 million to $3 million a year to the farm sector.

AGMARDT has decided that for the next three years its two or three areas of priority will be in-mar-ket grants to enable agribusiness to understand and successfully integrate with the marketplace. And its agribusiness innovation grants will support innova-tive solutions in agribusiness value chains.

The former leadership awards, worth $300,000 this year, will now include governance. An exam-ple is in irrigation, with community groups rap-idly coming together in Hawkes Bay, Canterbury and parts of Southland to address issues and raise capital.

“We are happy to start part funding some gov-ernance programmes so these people can be upskilled,” says Grant.

AGMARDT will continue to fund Young Farmer of the Year and Young Horticulturalist of the Year to encourage young people into the industry.

Assistance to the avocado industry is an example of the new focus on markets. The growing industry has problems exporting to Asia and Europe because of short shelf life. AGMART has helped fund research on shelf life, with some positive results already showing and trial shipments have begun.

Another fund recipient is the threatened bee industry, fundamental to horticulture and agricul-ture and worth about $300 million annually to the pastoral sector, Grant says.

“New Zealand would rely on bees much more than anyone else in production.

The industry is disparate in terms of its struc-ture; we are helping them look at the key things they want to do over the next four or five years to make it a sustainable industry.

“We won’t end up being the funders but we are helping them get direction. They may need to go back to the government or CRIs to establish their future security.”

One of the reasons to change strategy was the quality of applications. They are keen to look at more innovations or ‘left field’ applications. “Not always the products on the radar screen,” Grant says. – Pam Tipa

the middle has its place

tim Groser speaks at the opening of New image’s plant in auckland.

NEW ZEALAND’S middle-of-the-road ‘space’ in export markets has a potential three billion people, Trade Minister Tim Groser says.

“Our space in the market has not been always at the absolute top end. That’s for Louis Vuitton and companies like that,” he said at the recent opening of dairy-based man-ufacturing and marketing company

New Image Group’s new $10 mil-lion plant at Penrose, Auckland.

“It certainly isn’t at the low end – it’s that middle... [where] we do well, whether it is tourism, educa-tion or food and beverages. That’s New Zealand’s space and it’s a very good space to be in.

“We now have through the extraordinary economic develop-ment occurring in emerging Asia, a middle class that is our market and

it did not really exist in a meaning-ful way until recently.

“It is now about 500 million and all the projections tell us that as soon as 2030... that’s going to be 3 billion people.

“That is our market; China is the single most important part of that. I am also very conscious of other great countries like India, Indone-sia, Philippines – all of these other countries have a great future ahead

of them.”Groser jointly opened the new

plant with New Image executive chairman Graeme Clegg.

Among new capabilities of New Image’s Penrose plant is HPP tech-nology used to manufacture its new health drink called Col + colos-trums to add to the company’s range of colostrum-based health products

pam tipa

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ON THE subject of foreign own-ership of New Zealand’s

farm land, my family has a unique per-spective.

We’re not New Zealand born, but we’re

staunch New Zealand citi-zens. We’re also proud Wair-arapa sheep and beef farmers. Before my wife and I moved

our family thousands of miles from upstate New York we did

research – a great deal of it. As we wanted to go farming, we narrowed

our choices to Canada, Australia and of course New Zealand.

South America was out of contention. We made the conscious deci-sion to live in an Eng-lish-speaking country for the simple reason a new language would add

too much complexity. We dropped Canada

from consideration for being even colder

than New York. We

also wanted to break out of the clos-eted subsidy culture that’s prevalent in North America.

Our preference was for New Zea-land’s more benign temperate climate. Emily was the farmer, I was an invest-ment analyst. Together we learned more about the country, its political stability, history, economy, agricultural system, climate and the rural property market. Of course, being ‘foreign investors’, we checked out whether we’d be wel-comed or not by Kiwis. Being in Feder-ated Farmers a few years later, I came across one farmer who made Win-ston Peters look like a weak-kneed lib-eral. This man genuinely hates foreign investment. Yet proving the debate is seemingly two-thirds heart and one-third brain, I recently learnt he’d bought a farm in Australia and was an absentee owner. Without any sense of contradiction he still opposes foreign investment, albeit slightly sheepishly. Deciding on a country is one thing, but it’s quite another to get the ideal farm. We were fortunate to convince Castle-point’s board that a family of New York Yankees were fit custodians for their iconic Wairarapa station. That was 1998 and we’ve never looked back.

Kiwis are the most hospitable people, with an unerring knack of con-vincing you to take on more respon-sibilities. Currently I am one of two non-New Zealand born farmers on Fed-erated Farmers national board. I’m also on the board of Grow Wellington and the NZ Grassland Association.

To keep my feet firmly on the ground I’m also Castlepoint’s fire chief. Emily is similarly involved and our children are progressing through university here in New Zealand. Seeing we live near Wellington and serve on the Federated Farmers board, politicians are quick to say families such as us are ‘ideal’ business migrants. The message is that ‘people like us’ will con-tinue to be welcomed whichever party wins the next election. Unfortunately, that nuance is lost if you are thousands of miles away reading media reports, watching TV news on-demand or lis-tening to talkback radio streamed live on the internet.

If, today, we were researching New Zealand, would we make the biggest of big moves? Possibly not. The tone about foreign investment has hardened for the worse. To outsiders, politics and popu-larity now seem big determinants.

There’s also a nasty undercur-rent which reflects poorly on us as Kiwis. Who this is putting off we’ll never know, but it is off-putting. Farming is the most international indus-try we have. It’s this mix of people that makes New Zealand agriculture unique and the success it is. The Green Party opposed Shania Twain’s High Coun-try purchase, but I understand that station is now working on one of the largest privately funded conservation efforts in New Zealand. The restora-tion and enhancement of Young Nicks Head would never have taken place had a Kiwi farmer bought it rather than the New York financier John Griffin.

Politics must come out of the ‘for-eign investment’ debate because it can so easily spiral into the gutter. Rules are important and we Kiwis accept that with sport so why not with overseas invest-ment? There will always be ‘the rub of the green’ with individual decisions but New Zealand benefits far more from the people, capital and the ideas it brings.• Anders Crofoot is a Federated Farmers national board member and with his wife Emily runs Castlepoint Station, recently named 2012 Wairarapa sheep and beef farm business of the year.


agribusiness 25

take the politics out of foreign investmentanderS croFoot

anders crofoot says the nasty undercurrent in rela-tion to foreign land ownership does not reflect well on New Zealanders.


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Lamb Market Trends Beef Market Trends


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Beef

Prices fall as cull cows start to flow The cow kill looks to finally be in full swing in the North Island. Delays of up to two weeks are forming at some processing plants. Some plants are expecting to be reasonably full for the next two-to-three months, which will keep a lid on farmer operating prices. End users like to take advantage of this peak kill period, which is making trading more difficult in our overseas markets as the bids are lower. Cow prices came back last week with manufacturing cow averaging $2.85/kg and prime cow easing to $2.95/kg. 300kg cwt bull eased to $4.00/kg on average while prime steer dipped to $3.90/kg. In the South Island, the export cattle market remains under pressure. Prices edged back last week on the back of increased volumes and processing delays at some plants. 300kg cwt bull and steer fell to $3.77/kg on average. In some parts the dairy cows are slowly making their way out while there has been an increase in dry beef cows now scanning is underway. Cow prices are also under pressure with manufacturing cow now $2.87/kg for a 200kg cwt, and $2.97/kg for prime cow 230kg cwt.

Could the Korean beef market be turning around? The beef market in Japan and Korea has been stagnant following a 50% lift in domestic beef production and a massive push by the US beef industry. Consumer demand is also sluggish. This has limited demand for both New Zealand and Australian beef which often attract higher prices. However some exporters have noticed increased buyer activity out of Korea since the recent US BSE scare. It is too early to say if this initial reaction will be long-term.

Lamb

No let up on lamb pressure The pressure remains on export lamb prices in the North Island. Last week, lamb prices for a 16kg cwt lamb fell between 5-10c/kg to $5.48/kg (net). The abundance of frozen heavy lamb legs in storage is a burden. This is from excellent grass growing seasons, however heavy cuts are not what the consumer wants. Recent North Island carcass weights are nearly 1kg up on this time last year at 18.97kg. Meat processors are sending the message, with some discounting lambs from 19.3kg. In the South Island the market for export lamb remains on the softer side. The price for a 16kg cwt export lamb eased by 10c/kg last week to $5.53/kg (net). There are indications that some farmers are opting to hold onto lambs for weight gain and to ride out the current market. It is possible many of these lambs were bought on the high store market earlier on. However the downside of this is that market signals are already weak for heavy cwt lambs, so there is serious potential that if these lambs kill out too heavy they will be penalised.

Outlook not rosy for lamb The continued fall in operating prices for lamb is simply a reflection of the struggle most exporters are facing in our main markets. Demand for lamb is virtually non-existent with prices edging lower on an almost daily basis. Even the chilled market is starting to feel the effects of the overall lower demand from our international markets. Stocks of lamb bought earlier on at higher prices are sufficient in most of our main markets and importers are prepared to sit and wait for these stocks to clear. With so much market uncertainty around buyers are holding off, clearly expecting prices to be lower as the week’s progress.

Venison

Status quo for venison prices There has been little change to venison prices for the past month. AP 60kg stag prices are ranging between $7.10-$7.20/kg across both islands. Some plants are undertaking maintenance checks which is limiting slaughter days, but delays do not seem to be an issue.


28 opinion

editorial

the hound

edna

want to share your opinion or gossip with the Hound?

send your emails to: [email protected]

like she’d knowTHIs OLD mutt almost keeled over when he heard mainstream media going to well-known agri-business commentator and friend of the farmer – yeah, right – the CTu’s Helen Kelly for comment on how the Crafar farm deal and Fonterra’s proposed TaF scheme may pan out.Kelly breathlessly claimed that once the changes at Fonterra were implemented, foreign inves-tors would be in the box-seat to take over the cooperative.With this sort of sensationalist comment allowed by some media no wonder the conspiracy theo-rists have had a field day over TaF and DIRa.

prove it, Sir mikesPeaKING OF the Crafar farm saga, we’ve heard a lot of hot air from sir michael Fay about how he wants to invest in the local dairy sector, save us from the ‘evil’ Chinese and help grow the New Zealand economy.Well there’s an option for him that ticks all the boxes – instead of his america’s Cup-like continual liti-gation of the Crafar farm deal: the news is that a $100 million dairy factory, near Waimate, south Canterbury, owned by Russian investors, is for sale and is being eyed by Chinese interests.so why don’t Fay and his backers put their money where their mouths are and buy the dairy factory employing about 60 people?Just a thought.

raymond who?yOuR OLD mate opined in the last issue about his sadness over the anti-farmer feeling still emanating from Labour and the Green polit-ical parties. The latest anti-rural diatribe comes from nondescript Labour list mP Raymond Huo (pronounced who), the party’s spokesperson on land informa-tion, over the law passed recently by the Government, setting high country rents.Huo lashed out claiming “a select few high country farmers have been handed a sweetener from the Government in the form of cheap rents”.David shearer has a big enough job convincing wider New Zealand that Labour is credible, but his job is an even bigger one in the rural sector while his spokespeople keep bashing up farmers.

Zero budgetTHe ImPeNDING Budget, may 24, has been flagged as a ‘zero budget’, meaning no new spending, just a shuffling of funds. Given the snowstorm of pre-Budget announcements in recent weeks, your old mate reckons it’s a zero budget for another reason: by the time it arrives there will be zero left to announce.

Farmers likely to close their walletsWITH GLOOMY trade news almost daily, farmers are likely to revise their farm bud-gets downwards, warns Federated Farmers.

Feds president Bruce Wills believes that given pastoral agriculture spends about $13 billion on goods and services each year, this has implications for the provincial and national economy.

“It’s no secret while primary export vol-umes have increased, commodity prices are in retreat. The current export climate still has Europe in a bad way. America remains bad, though slightly less bad of late, but demand from key Asian economies has weakened and this includes China.”

Wills adds the picture in Australia isn’t much rosier; most state economies are either in or tiptoeing their way around recession.

“While some say we shouldn’t have all our blocks of butter in the dairy basket, whatever we export and wherever it goes we face the same tough international environment. It applies equally to hi-tech and tourism as much as to wool.”

Wills says compared to last year he’s get-ting about $40 less for a heavy prime lamb and expects his farm income to be down 20%.

“The New Zealand dollar isn’t doing exporters any favours either and I’m at a loss to explain why it hasn’t fallen. Economic fun-damentals should be driving it lower.

“Whatever the cause, we’re hurting and that will be expressed by farmers keeping a close lid on what they spend.”

He says while there’ll be calls for currency intervention, that’s like trying to stop the incoming tide with your hands.

“We can’t take on global markets, but need actions to support exporters. Councils must keep their rate and fee increases in check and this applies equally to the Government’s spending plans ahead of Budget 2012.”

Wills says the priority for farmers will be productive investment and tackling debt to take advantage of stable interest rates.

“Whatever happens we expect farmers will recast their farm budgets on an extremely conservative basis.”

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opinion 29

is taF’s second vote a déjã vu moment?AFTER MONTHS of dis-sension, denials, criti-cism and rumblings Fonterra has decided to hold another vote on its controversial TAF (trading among farmers scheme.

As famous US base-ball figure and cultural icon Yogi Berra would say, “It’s deja vu all over again.”

Yet it was only back in February that Fonterra chairman Henry van der Heyden ruled out a second shareholder vote on the controversial share-trading-among-farm-ers plan.

The TAF scheme involves offering the public NZX-listed units in Fonterra shares to help shore up the co-op’s cap-ital base. As things cur-rently stand, it is obliged to cash up farmers’ shares if they want to leave the co-op or reduce milk supply.

This means the balance sheet is subject to pos-sible future runs on capi-tal, if dairy farmers’ own finances come under pres-sure because of drought, market collapse or disease – or simply if they decide to supply a Fonterra rival.

Obviously buoyed by the November 2010 vote – when Fonterra first put TAF to its shareholders, where the proposal gar-nered nearly 90% support from farmers – the board will have been confident of shareholder support.

In the ensuing 18 months Fonterra ploughed ahead undeterred with its plans, dismissing any crit-icism or concerns raised

about the proposal as the ramblings of a loopy minority. Critics claim little detail has been made available to shareholders about TAF and they have become alarmed about the

potential for losing con-trol of the company via a proposed shareholder fund.

This vacuum has seen TAF opponents, led by South Canterbury dairy farmer Leonie Guiney, claim TAF is little more than a Trojan horse (or should that be a Trojan bovine) for listing the farmer-owned co-opera-tive on the NZX.

She told the primary production select commit-tee hearing submissions on the Dairy Industry Restructuring Act (DIRA) that provisions for TAF within Fonterra would enable overseas institu-tional investors to form “highly organised, well-funded lobby groups and inevitably exert downward pressure on milk price – for dividend and share appreciation”. Guiney and her supporters claim TAF will open to over-seas investors “the sale of the century” they’ve been

waiting for.So what has made van

der Heyden and Fonterra now blink and opt for another vote?

I’m guessing van der Heyden, who steps down at the end of the year, would have been having one of those déjà vu seasons, with recur-

ring nightmares about the last time he tried to pro-mote a capital restruc-ture scheme. In 2007 a major push-back by farmer shareholders saw

his initial capi-tal restructuring plans – dividing the co-operative into a supplier-owned co-op and a listed com-pany – dropped

quicker than John Banks’ credibility.

Despite the white knight’s consistent and continued promise that Fonterra will remain 100% farmer-owned and controlled, his reassur-ances have fallen on deaf ears in some parts of the shareholder base. Van der Heyden and Fonterra’s cause has not been helped by scaremongering by pol-iticians such as Labour’s agriculture spokesman Damien O’Connor, who claims Fonterra will “fall into outside investor hands in very short order” if TAF is introduced.

The Fonterra chair told the primary indus-try select committee, that TAF will enable Fonterra to “remain the national champion our farmer shareholders and New Zealand need”.

“We need a stable per-manent capital base to implement our refreshed business strategy that

will drive returns for our shareholders, and to also protect the co-op from future shocks such as a major drought.”

So democracy rules and Fonterra sharehold-ers have now been given another shot at voting.

It is unlikely the out-

come will be much dif-ferent from the 2010 vote – but perhaps with a smaller majority. How-ever, TAF opponents can always call on another ‘Yogism’ for hope and inspiration on a ‘no’ vote: “It ain’t over ‘til it’s over.”

Watch this space!

as famous us baseball figure and cultural icon Yogi Berra would say, “it’s deja vu all over again.”

Henry van der Heyden

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30 opinion

mill’s phoenix-like comeback

Bruce woollen mill’s rundown buildings still exhibit a certain decaying majesty in the town of milton.

LIKE A legendary phoe-nix, Bruce Woollen Mill has literally risen from the ashes.

Once Milton’s pri-mary industry, employ-ing at its peak at least 400 people, the proces-sor was razed in 1901, four years after the building’s foundation stone was laid. However the fledgling operation by then had a reputation for making quality prod-ucts and another mill was quickly built.

On May 1 Bruce Wool-

len Mill defied the odds and is back operating, at this stage in a small way.

For most of last century Bruce Woollen Mill domi-nated the town of Milton. To overcome labour short-

ages some employees were bussed in from sur-rounding towns such as Kaitangata, Balclutha and Lawrence. A housing scheme assisted work-ers and a women’s hostel was managed by the YWCA.

Since 1963 the mill has been owned first by Alliance textiles then by

Quality Yarns in 1999.Even now in its some-

what rundown state the main buildings, especially the office block, have a certain decaying majesty.

I’m told the office and boardroom are equally magnificent, reflecting a bygone age before the cor-porates moved in with their asset sale mentality.

Back in 1897 a group of local farmers saw the value of a woollen mill in the district. The result was the creation of an early cooperative. Now the revi-talised Bruce Woollen Mill will also be a coop-erative. The board has decided to return to the original name Bruce, being the name of the local dis-

trict before the amalgama-tions of the counties in the 1990s.

The mill was not named after Scotland’s Robert the Bruce, although his image was used exten-sively in advertising. It was an excellent picture portraying what we all believed Robert the Bruce would have looked like in his suit of armour.

The major shareholder in the new Bruce Wool-len Mill is Wool Equities Ltd with a 77% sharehold-ing. The other sharehold-ers are former customers of previous owner Qual-ity Yarns. The mill started working again on May 1, and there is several months work ahead.

Wool Equities Ltd spokesman and chairman Cliff Heath says the oppor-tunity was unique – the

machinery was there and in surprisingly good condi-tion. It could cost millions to assemble such a wide range of working machin-ery.

There was a skilled workforce available and a realisation that this was possibly the last chance to save a woollen mill that produced a product needed by the specialist operators.

Cliff said Bruce Wool-len Mill Ltd will be the cornerstone spinning company, producing spe-cialist yarns for the inno-vative New Zealand wool-based textiles sector, hand knitters, machine knitters and fabric weav-ers.

At this stage 19 people are employed, a number expected to grow increase significantly. The plans

include a training scheme to get more younger people into the industy.

Lui Gundersen, for-merly a plant manager for Feltex and Godfrey Hirst, is appointed to manage the Milton mill and began work on April 26.

The balance of the shares will be held by 11 industry participants who are customers of mill.

Wool Equities is a much different operation from that which evolved from the Wool Board. There are new people and a totally different culture.

In the Bruce Wool-len Mill background is my old mate Michael Mellon who specialises in rescue endeavours such as Bush Road Salads and Barkers Fruit Wines.

Mike survives where others have fallen.

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opinion 31

timely change for dairyIT IS estimated the dairy industry, including down-stream activities such as marketing, wholesaling and transport, contrib-utes about 3.4% to New Zealand’s GDP and $13.9 billion to our export earn-ings.

Given the importance to our economy, it is crit-ical the dairy industry remains dynamic, innova-tive and efficient.

A key element of this is that Fonterra gets its farmgate milk price right. If this price is right, it will drive the right investment and production decisions and ensure the market is contestable – that poten-tial competitors have an opportunity to compete with Fonterra and keep it on its toes.

This is the intent behind the Dairy Industry Restructuring Act (DIRA) and why I am progressing legislative amendments aimed at increasing confi-dence in and transparency of Fonterra’s farm gate milk pricing.

It’s important to remember that without the DIRA Fonterra would not exist. The DIRA is fundamental to ensuring that in spite of Fonterra having a dominant market position, the industry continues to be efficient, competitive and innova-tive. This is in everyone’s interest.

The current DIRA Bill will ensure Fonterra’s cur-rent milk price governance arrangements remain in place, and that it contin-ues to publicly disclose

information on its milk price setting. It also intro-duces an annual milk price monitoring regime to be undertaken by the Com-merce Commission. I can see no reason why anyone would argue with this.

The bill also enables Fonterra to proceed with TAF (trading among farm-ers). Most dairy farmers know that the ability for farmers to freely enter and exit Fonterra, at a price that reasonably reflects the value of their capi-tal contributions, is a core plank of the DIRA. The Government’s main con-cern with TAF is therefore that it preserves this abil-ity to freely enter and exit.

Ultimately TAF is a decision for Fonterra’s shareholders but I believe TAF could offer Fon-terra and its capital struc-ture stability and agility to respond to opportunities when they arise.

China should grow up to 30% in the next decade and Fonterra’s strategy is to participate in this through development of its own production in China. Fonterra believes in order to continue to capitalise on growth opportunities in China and elsewhere, it needs the permanent capital TAF would deliver.

Fonterra’s share price is important: an artificially low share price could sub-sidise entry to the co-op and discourage exit from it. If Fonterra proceeds with TAF, I am confident the market will deter-mine a fair value for Fon-terra’s shares. However if it doesn’t proceed then

it’s important Fonterra’s share price still reflects fair value in the future.

A fair value share price will ensure farmers’ deci-sions on whether or not to supply Fonterra are based on Fonterra’s milk price and performance, not dis-torted incentives about the value of farmers’ capi-tal contributions. That’s

why the bill proposes Fon-terra must price shares according to full fair value if TAF doesn’t proceed.

In ten years Fonterra has become New Zealand’s largest company, and a company New Zealanders can be justifiably proud of. However, in ten years the dairy industry has changed substantially and a review

is timely. The Government’s

responsibility is to give Fonterra the tools it needs to tackle the challenges of the next decade and beyond. It is for Fonterra and its shareholders to seize the opportunity.• David Carter is the Minister for Primary Industries

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32 management

dairy to beef and back againA focus on effluent management and fencing landed dairy and beef farmers Clive and Jorga Walden the supreme title in the 2012 Northland Ballance Farm Awards. Gareth Gillatt reports

CLIVE AND Jorga Walden sharemilk a 160ha, 415-cow dairy farm and run a 167ha drystock farm to the rear of the dairy property.

Both farms, south-west of Mangonui in the Far North, are owned by Clive’s parents Murray and Liz Walden.

When the family took on the property in 2005 it was all one dairy farm which frequently had com-pliance issues.

The Walden’s ini-tially converted it to high intensity beef and ran as many as 2000 two-year-old bulls. But in 2008 they decided to go back into dairying after getting poor prices for stock even though they were produc-ing top animals.

To save more money for the farm they bought a herd of dried-off empty cows from Waikato at $800/head compared

to the 2008 average of $2000-3000/head of in-calf stock.

They lengthened the herringbone shed, increased the yard area and upgraded the effluent system.

Clive says investing in a better effluent system was a big part of the dairy con-version process as there had been so many issues with compliance previ-ously.

They opted for a gravity fed, four pond treatment system, digging anaerobic and aerobic ponds while using a smaller, existing pond system for wastewa-ter. The area immediately below the pond was also developed into wetland to catch any remaining run-off nutrients.

A pond system was chosen because of the lim-itation on days suitable for effluent disposal to the

land. They have capacity for 120 days effluent but do all they can to cut down the material going into the system, including scraping down yards and feed pads

and setting up the shed so cows don’t turn any right angles. “The more water you put into a system the faster it goes through… so we want to minimise that

as much as we can,” says Clive.

He believes effluent isn’t as much a problem in the north as is pugging and erosion, both of which

Northland Bfea supreme title winners, murray, liz, clive and Jorga walden.

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DaIRy FaRmING can be as clean or cleaner than beef, says Clive Walden, supreme winner of North-land’s Ballance Farm environment

awards 2012. as a farmer with a foot in both camps, he believes dairy

farmers have

more systems available to them than beef for managing effluent and preventing erosion.

That’s particularly true in North-land where phosphate leaching and erosion is a much bigger problem than effluent and nutrient runoff, he adds.

“With a dairy system, when it’s largely one mob of animals, it’s easy to put them all onto a standoff pad on those wet days.”

a 2007 Northland Regional Council study says at least half the region is erosion prone, while Dairy

NZ says phosphate leaching, driven by soil runoff, is a much

bigger problem in Northland than nitrate leaching.

Walden says the stock numbers beef finishers need to carry over winter to ensure they have the capacity to utilise spring grass efficiently puts them in a dangerous position should the winter turn wet.

Northland Regional Council land management specialist Bob Cathcart echoes that, saying many areas of the region aren’t able to handle heavy stocking over winter.

“I think there are opportunities here with two-year-old bulls for on- and off-paddock wintering.”

Walden adds the steady cash-flow and ability to buy more supplement if need be are other advantages on the dairy side.

“For all the bad rap dairy farming gets, I think it’s [environmentally] as good, if not better than beef farming.”


management 33farm facts:area: 353ha total, split 166ha dairy, 167ha

drystock, 20ha forestry.

Dairy herd: 415 cows, 75% Friesian.

Calving: split 60% autumn, 40% spring.

Farm location: Far North, near mangonui

have absorbed his time and energies to fix.

Longer rounds than the norm, and careful moni-toring of pasture, prevent cows damaging paddocks. Bush and waterways are fenced off.

Much of the extra fenc-ing work was done while reconverting, but it had started under the beef system to get more out of pastures.

“I found as soon as you

tried to put any pressure on the paddock the bulls would just go through the creek and get into the other paddock,” recalls Clive.

Northland Regional Council helped finance fencing the river, but doing so meant the Waldens had the extra cost of install-ing troughs where streams had previously been the stock’s water source. This, plus the costs of a new

shed, effluent system and improved water system, meant a large initial cost.

Murray says that wouldn’t have been pos-sible without the ongo-ing bull farming operation on the rear section of the farm.

“It was important to keep the beef operation running cashflow wise… It also gave us options.”

The conversion was anything but smooth and they had to learn some hard lessons on calving dates.

Over the past two seasons the milking platform’s done about 919kgMS/ha in an area that averages 600kgMS/ha. Murray says he never doubted he would reach that figure.

more enviro options with dairy

Northand regional council’s Bob cathcart, speaking at the field day.

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34 management

advantages in leasing out stock?

will Purvis, Heartland

Building society.

OWNERS OF capital stock are being encouraged to lease out herds or flocks before values fall.

Heartland Building Society’s head of rural, Will Purvis, says it’s inevi-table falling export returns

will in the medium term be reflected in lower capi-tal stock values. Leasing now before values fall further will release more capital and maximise tax deductability, he argues.

“It’s about releasing

the capital you have tied up for other things,” he told Rural News. “You may argue that’s just transfer-ring one form of debt for another but we’re convin-ced there are tax advan-tages.”

No connectionPuRVIs says there’s no connection between Heartland Building society and Porirua-based business Heartland Rural supplies which recently circulated a flyer promoting an online farm supplies business, apparently trademarked as Heartland Rural.

Purvis says the building society is investigating its options with regards to use of the name Heartland Rural.

Dairy cow prices have already fallen from over $2000 before Christmas to $1800 and if current commodity trends conti-nue they could be lower still in six months, he reasons.

“Realising the cur-rent peak capital values for livestock and levera-ging them using smart financing options now will make a big difference to

future cash flows and farm profitability.”

Lease terms can be tai-lored to client needs and situations. Changes to livestock taxation schemes may also impact financing options, he notes.

“We believe Heartland Livestock Leasing adds a viable alternative to tra-ditional ways of financing future growth of a farming business.”

Plant now to cut erosion tomorrow

Poplar planting in Northland.

PLANT POPLARS or willows now through to August to help bind soil and prevent future erosion, says Northland Regional Council.

Both species have extensive root systems and the council’s promoting planting as part of its soil conser-vation and water quality work, supported by its Envi-ronment Fund.

Wayne Teal, an NRC land management advisor, says poplars are typically used on hill and rolling coun-try, with willows more suited to stream banks and gul-lies. He expects to have 3500 to 4000 poplar poles available and plentiful ‘Kinuyanagi’ (Salix schwerinii) willows, also known as the Japanese fodder willow, as 1m stakes.

“These are grown locally and are specifically devel-oped for soil conservation. They don’t cause river/drain blocking issues that ‘crack’ and ‘grey’ willows can as they don’t grow as big and heavy. They’re also an excellent supplementary fodder species and highly resistant to willow saw fly.”

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36 management

From receivership to award finalistIn a month, the winner of this year’s Ahuwhenua Trophy for the best Maori Dairy farm will be announced at a gala function in Auckland. Peter Burke reports from one of three recent finalists’ field days, which form part of the judging process.

TAUHARA MOANA Trust dairy farm near Taupo is a long narrow block located between Mt Tau-hara (Maunga or moun-tain) and Lake Rotokawa (Moana - water). It’s one of many large-scale dairy farms in the Broadlands area where Mt Tauhara forms an imposing back-drop, as does steam rising from Lake Rotokawa and adjacent geothermal sites. The farm is part of Ngati Tuwharetoa and Te Ara-wa’s ancestral lands, the tribes to which the trust is affiliated.

It’s a beautiful setting, and the performance of

Tauhara Moana is equally brilliant, propelling it into contention as a potential winner of this year’s Ahu-whenua Trophy.

The 680ha milking platform carries 1700 cows with 900ha of leased land used mainly for dairy sup-port. In time, some of this leased land will be added to the milking platform.

The shed is a 66-aside herringbone with revolv-ing breast rail making for better cow flow.

Governance comes from a board of seven Trustees, with a team of rural professionals advising them. Up to 13

staff work on the prop-erty, managed by 50/50 sharemilkers Olly and Kim Gibberd.

The land was origi-nally in sheep and beef but was converted to dairy in 2006 and leased to Plateau Farms, part of the now defunct Crafar empire. Crafar Farms’ receivers took it over, before the Trust regained full owner-ship in March 2010.

Fonterra shares were relinquished and it became a supplier to local Maori dairy processor Miraka. The trust is one of Miraka’s biggest suppliers.

Farm advisor Mark

Johnston, like trustees, says he was happy with the way the farm was being run under the Crafars, but it was the arrival of the receivers that caused the problems.

“They had basically

wound down everything: no fertiliser had been applied; no supplements made; no proviso made for the winter and the cows were light so we had to buy in feed, mainly PKE.

“On top of that, it

had been a dry summer. It’s an unfortunate that under receivership law the receivers don’t have to live by any of the warranties or covenants in a lease deed, so they just ran the prop-erty as they saw fit.”

With the farm back in hand, Tauhara Moana Trustees developed a stra-tegic plan to get it back on its feet, fast. They retained Olly and Kim Gibbard, highly regarded as excel-lent managers of large-

Picturesque, and now productive: tauhara moana, upper waikato.

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management 37

From receivership to award finalistscale dairy farms, and hired a team of top advi-sors.

One trustee, Topia Rameka, was heavily involved in bringing the farm back to its potential.

“The trust received an asset that had been under resourced and underin-vested in for a number of years… We weren’t afraid of making hard decisions and were willing to take an educated risk that has ulti-mately paid off,” he says.

Fertiliser went on, 200ha of new grass was sown, and PKE and other supplements used to get cows back to target con-dition. Johnston says the re-grassing programme has continued a pace, with more ryegrass and recently some lucerne, which appears to suit the dryland pumice country, also going in. Resurgence of browntop is a threat so a summer and winter crop sequence is used to clean the ground before going back to pasture.

In the Crafa era, pro-duction was 664,428kgMS. Under the receivers, that dropped to 392,307kgMS. Tauhara Moana’s first season, under diffi-cult conditions, lifted it to 515,423kgMS and this season is on target for 550,000kgMS.

The target for next season is 800,000kgMS.

While Tauhara Moana has ‘fast-tracked’ farm productivity, it’s been done adhering to strict Maori values such as kaitiakitanga, ensur-ing people and natural resources are nurtured. Cultural values (tikanga) mesh with innovation, excellence and integrity.

Rameka says Maori values are critical to the success of the business.

“They are the guiding lights in terms of our busi-ness parameters and how we operate.”

The farm is the first dairy farm in the Waikato River catchment.

“We take that respon-sibility very seriously. We are very aware of our role within the commu-nity and impacts upstream have impacts downstream. Whilst we are wanting to develop and grow our asset to its full potential, we want to do that in a way that minimises or elimi-nates any potential harm to the environment down stream.”

Nitrogen leached is just 23kg/ha and the aim is to keep it at that while pumping up production. Rameka says they are already using new technol-ogies and are focussed on science and innovation to achieve a balance between high production and kai-tiakitanga.

INTeRNaTIONaLLy ReNOWNeD farm consultant Tom Phillips, of massey university’s centre for farm excellence, says Tauhara moana’s human resources management is the best he’s seen worldwide.

at the field day, Olly Gibberd explained he oper-ates by the basic principle of treating people as he would want to be treated: with respect, dignity and courtesy. However, it was his unusual bonus system that attracted most attention.

“In addition to their salary, every day a staff member turns up for work and does a reasonable job they automatically accumulate an extra $5. If they have an extraordinary day or do something like finding leaking water troughs or put in extra hours, they get a reward of extra money which can be anything from $10 to $100/day. On the otherhand, if they are late to work or they have left gates open and stock get mixed up it can cost them anything from $5 to $50 a day, and that’s written in red on a white board in the dairy shed. The positives are written in blue.

“The greatest thing we like about it is that it doesn’t matter what your skill set is or whether you are junior or a senior. If you make a stuff-up it’s noted; if you make an outstanding performance it’s noted.”

Bonuses are payable only if staff last the season. “If they leave before the end of the season they forfeit the whole lot.”

Hr system a standout

Sharemilkers’ storyTAUHARA MOANA’S sharemilkers, Olly and Kim Gibberd, were originally employed by the Crafar’s. Olly says the time when the receivers had the farm was ‘very trying’, but he’s delighted with the way the Trust has breathed new life into the property.

He management structure, which sees Trustees, farm advisors and staff working together, also appeals. “The more opinions the better.”

The farm has many challenges, not least its shape: it’s 11km end to end and Olly calls

his cows triathletes given the distances they walk. “Sometimes the cows walk between 10 and 14kms per day. The races are pumice which is soft and easy on the cows hooves so we only have between five and twenty lame cows which is quite acceptable for herd of this size.”

A new shed will be built next year, trim-ming the trek and generally making life easier. The Trust plans to buy the herd, with the Gibberd’s staying on in a management role. olly and Kim Gibberd

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38 animal health

Honey helps save valuable lamb

HuLme says last year’s Texel impor-tation was a natural follow-on from his original NZ suffolk importation when he brought in frozen embryos in 2006, prompted by changes in the composi-tion of the British flock.

In 1990, suffolks sired 49% of all lambs in the uK and there were no fewer than 2500 pedigree flocks within the suffolk sheep society.

“The story of the suffolk has been one of continuous decline since then, so by 2003 the market share had dropped to 22%, while the Texel had risen from zero in 1990 to 24% in 2003.”

a meeting with murray Rohloff, then a leading New Zealand ram breeder near Gore, further convinced Hulme something had to change.

“In a nutshell, I and others concluded the modern uK suffolk with its big head and wide legs was producing lambs that could not be born easily and which, if born, were slow to stand and suck due to the prolonged and difficult birth process.

“so we sold our traditional uK suffolks in 2006 and imported suffolk embryos from New Zealand.”

His ‘conversion’ amazed and horri-fied former suffolk breeding colleagues who thought him mad and a threat to their businesses, he adds. “There has been considerable antagonism from many of them towards me.”

But he is winning converts: in 2007 he sold 15 rams; 35 in 2008; 75 in 2009; 103 in 2010; 133 in 2011 and he hopes to sell about 180 this year.

“Our immediate target would be to sell 500 rams a year within the next five years,” he says.

Clients are finding the New Zealand suffolk and sufftex are active, robust sheep which thrive on grass with no supplementary feed.

He’s importing four rams and two ewe lambs direct from New Zealand this winter after a 60-day quarantine here to widen the genetic base of his suffolk, Texel and sufftex flocks.

easyrams’ inspiration

A PIONEER of New Zea-land sheep genetics in the UK is crediting manuka honey with helping save a valuable lamb.

Robyn and Phillipa Hulme run Easyrams, a Suffolk, Texel and Sufftex stud at Ellesmere, in the

West Midlands, built on New Zealand imports.

Earlier this year, a sheep trod on and broke one of its lamb’s leg, which became infected.

“Our vet came out and after an examination the leg was cleaned, dressed, bandaged and plastered and a course of antibiotics

prescribed,” Hulme told Rural News.

“After three weeks, as instructed, we took the lamb to the surgery to see how the leg was progress-ing.”

The news was bad.“In spite of the anti-

biotics, infection had got into the leg through the

alan Harmanbroken skin and now we had a leg with a large open wound and very obviously a bone in two totally sepa-rate pieces.

“The prognosis… was poor and normally in such a situation one would put the lamb to sleep.”

But the lamb was one of only seven ewe lambs born to his New Zealand imported Texel ewes, so Hulme decided to perse-vere.

“The lamb was anaes-thetised, the wound thor-oughly cleansed, antibiotic powder sprinkled on the open wound and then – and this is not a wind up – a spoonful of [manuka] honey plopped into the open wound.”

The lamb’s leg was then redressed, bandaged and the original splint reap-plied.

“This process was repeated a further three

to paGe 39

uK easyrams’ injured texel ewe lamb, one of a handful of first generation NZ imports.

sons of NZ: seven-month-old sufftex ram lambs, born to NZ suffolk ewes put to a New Zealand genetics 50/50 sufftex ram.

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animal health 39

times at weekly inter-vals before we were told the X-ray showed the two bones were knitting well enough for the splint and bandages to be removed. The result is we have a perfectly healthy lamb – with one slightly short leg.”

Hulme says the reason he spent so much time and expense on the ewe lamb was that her mother was one of 10 ewe lambs and yearling ewes and three rams imported from New Zealand in 2011.

“These sheep were dif-ficult to source since for entry to the European

Union countries sheep must be fully scrapie resis-tant and have an ARR/ARR genotype.

“These are difficult to find in New Zealand due, I assume, to the fact New Zealand is scrapie-free so no one has ever needed to select against scrapie susceptibility. It seems in both the Suffolk and Texel breeds less than 5% of the [New Zealand] population is the appropriate geno-type.”

The seven-month-old Sufftex lambs are three quarter New Zealand Suf-folk and one quarter New Zealand Texel. Their dams were New Zealand Suffolk

From paGe 38

Honey helps save lamb

animal health about risk management says vet

ANIMAL HEALTH issues will be one of the priority areas as the deer indus-try takes a long close look at itself this week during its annual conference, at Wanaka.

Adrian Campbell, a Timaru veteri-narian and a member of a group that’s put together a discussion paper on the productivity of the deer industry, says farmers need to be aware of the risks on their farms in relation to animal health issues.

He says a good example of this is the risks posed by yersiniosis, a bac-terial disease that affects the gut of weaners in their first year of life. It causes scouring, blood loss, shock and can ultimately kill stock.

“It might be that for some farm-ers the risk of having yersiniosis is low but mitigating against that [with]

certain management steps can reduce that low risk to a very low risk.

“Alternatively, a farmer may say that in the past I have lost stock and risk is high therefore I will vaccinate because I’ve got a business case that per weaner vaccination at about $2/head stacks up well.”

Campbell says what they are trying to instill in deer farmers is the philos-ophy of risk management.

That comes quite naturally in other parts of the business, such as insuring their tractors or other infrastructure, so why not animal health?

“We’re not saying to farmers that as part of the productivity strategy they have to go around vaccinating, drenching and administering sup-plements to cover all the main dis-eases, but what we are saying is that farmers need to be aware of the risk

that those conditions and diseases pose to their operation, wherever they may live, and then get them to assess that risk.”

Veterinarians have not had as much input to farms in the deer industry as they have had in the dairy industry, he notes.

The productivity review opens the door for vets to have more involve-ment with deer farmers, he believes, as vets are trusted and can play an important leadership role in the sector.

“The farmer is absolutely inun-dated with offers of all sorts of advice on such topics as the environment, grass, fertiliser, drenching policy and even legal issues.

So it’s a very crowded market that we vets vie for to get farmers’ atten-tion but we do have a special support role for our farmer clients.”

peter burke

in brief

ewes and their sire was a half Suffolk-half Texel ram.

The parents were

flown from Auckland to London via Los Angeles and arrived in late July last year.

fao conferencemiNisters aNd senior officials from the Near east and North africa will meet may 14-18 at fao headquarters in rome for the regional confer-ence for the Near east.

ministers and senior officials from 30 fao member states are expected to attend the meeting, plus observers.

talks will focus on hunger and nutrition-related issues, including food waste and food losses, agriculture and climate change, forestry and food security, as well as policies and good governance.

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40 animal health

VETS ARE suggesting abamectin pour-on prod-ucts should carry a label warning that dogs fed meat from recently treated animals may be poi-soned.

A paper in the May issue of the New Zealand Veterinary Journal documents two cases where one dog died and five others suffered serious clin-ical symptoms from such a situation.

“Advising clients of the dangers of exposure to, or application of macrocyclic lactones [such as abamectin, ivermectin, and moxidectin] marketed for other species will help reduce the incidences of poisoning,” write authors Parton, Wiffen, Haglund and Cave in the paper’s discussion.

“Reporting all known or suspected cases of poi-soning to the manufacturer and New Zealand Food Safety Authority might encourage companies to be proactive and provide warnings on their prod-uct labels.”

Symptoms, including coordination loss, high stepping hind limbs, pupil dilation, blindness, sal-ivation and depression may be observed within a day of dogs eating the affected meat. Cases of poi-soning from eating faeces from treated-animals have also been recorded, notes the paper.

Early recognition of poisoning and treatment improves chance of survival, say the authors.

Pour-ons linked to dog death

new Fmd strain spreads eastA NOVEL strain of foot-and-mouth (FMD) ravag-ing Egyptian and Libyan herds has spread to the Gaza Strip, prompting a call from the UN Food and Agriculture Organisation for movement controls.

“Diseases simply do

not respect international boundaries, and if FMD SAT2 reaches deeper into the Middle East it could spread throughout vast areas, threatening the Gulf countries – even south-ern and eastern Europe, and perhaps beyond,” says Juan Lubroth, FAO chief veterinary officer and

head of the organisation’s Animal Health Service.

Vaccines for SAT2 are

still in short supply, so the priority is to limit animal movements to prevent

its further spread, raise surveillance to expedite outbreak detection and respond promptly to new cases, he says.

Movements of animals from the Nile Delta east through the Sinai Penin-sula and north into Gaza Strip are thought to blame for this latest spread of the

andrew SwallowSAT2 strain, confirmed April 19.

Transmitted in saliva or aerosols from sick ani-mals, the FMD virus can live outside a host for long periods and spreads easily via contaminated hay, yards, trucks, shoes and clothing – even the hands of traders inspecting ani-mals at market.

For many in the Middle East, livestock are a major component of household food security.

The disease affects most cloven-hoof mam-mals and has devastating effects on meat and milk production, causing mor-talities in pregnant and young animals.

While FMD poses no direct human health risk, milk or meat from infected stock should not be con-sumed, adds the FAO, so the outbreak has nutri-tional as well as economic implications.

Following official reports of SAT2 outbreaks in Egypt, Israel imple-mented targeted vacci-nation along its southern borders to create a buffer zone. Gaza Strip will be receiving an initial lot of 20,000 vaccine doses to protect its cattle. A further 40,000 doses will be made available as soon as possi-ble for sheep and goats.

The FAO and the FAO-based European Commis-sion for the Control of Foot-and-Mouth Disease (EuFMD) are negotiating with producers and vac-cine banks to find sources for vaccines in the event of further spread of the strain and a worsening of the current situation. Early this month a FAO/OIE Crisis Management Centre for Animal Health (CMC-AH) team arrived in Libya to take extra sam-ples from affected animals there.

The aim is to better characterise the virus so the most suitable vaccine can be found or produced, so maximising efficacy of eventual vaccination cam-paigns.

The team will also sup-port Libyan veterinary services in strengthen-ing efforts to control FMD outbreaks. FAO is also involved in developing a regional response plan in consulta-tion with countries east of Egypt and west of Libya at risk of SAT2 spread.

Veterinary officials from the Middle East, North Africa, and south-ern Europe are meeting to promote coordinated action and effective imple-mentation of the response plan.

“diseases simply do not respect international boundaries.” – Juan Lubroth, FAO chief veterinary

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animal health 41

pke can pose copper problemsCASES OF copper poisoning in cattle are emerging again this year, and more could be expected as dairy farmers begin to dry off.

Copper poisoning was seen widely in 2011, mostly in the North Island, but this year South Island farm-ers are also reporting outbreaks. At first farmers and veteri-narians were unsure what the prob-lem was, faced with downer or dead cows soon after drying off. But laboratory inves-tigations soon confirmed copper poisoning.

In almost all the cases palm kernel was being fed. On some properties extra supplements of copper were being used. In one case, copper was added to the water supply because the farm water had high iron content. Iron and copper interact within the gut of the animal so less copper is absorbed.

The farmer installed a filter to remove iron from the water but never decreased the copper con-centration. Now the copper was free to be absorbed by the cow without interference. Palm kernel was being fed to the cows as well.

Soon after the cows were preg-nancy tested one cow died and vet-erinary investigations found liver copper concentrations were exces-sive, leading to copper poisoning.

Copper is stored in the liver and continues to accumulate if more is consumed than is used for growth and milk production. Once the liver cells’ capacity to take any more copper is exceeded the cell

ruptures and ill-ness and death soon follow.

Contrary to copper deficiency, copper poison-ing in dairy cows is an entirely man-made problem. The copper ‘budget’ on each farm should be

assessed to account for all sources of copper, such as pasture, forages, feed concentrates, drinking water and mineral supplements. Feed-ing 4kg of palm kernel per day provides half the daily copper a cow needs.

To effectively manage copper nutrition the herd’s copper status needs to be monitored. Samples of liver could be collected from cull cows in the autumn, or from herd cows by biopsy at any time and analysed for their copper con-centration.

If extra supplements of copper are provided consider sampling more often. Dietary copper intake can be calculated by measuring the copper concentration in pasture, forages, feed concentrates, palm kernel and water.

If your veterinarian has iden-

tified a risk or diagnosed cases of copper poisoning, then immediate actions are required:

• Withdraw all copper supple-ments and consider withdrawing palm kernel if the energy deficit can be accommodated by replac-ing with grass silage, hay or maize silage.

• Determine herd copper status using liver biopsies and continue to test these same cows as a way to monitor the changing copper status of the herd.

• Discuss whether a molyb-denum supplement in the form of sodium molybdate should be added to feeds or drenched at a rate of 200mg/cow/day, in order to reduce liver copper concentrations over four-five weeks.

If you are feeding palm kernel and don’t know your herd’s copper status, contact your veterinarian for advice.• Fraser Hill is a veterinary pathologist with Gribbles Veterinary, Palmerston North.

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THE LAST Saturday of April was World Veterinary Day which this year focussed on resistance to, and responsible use of, antimicrobials.

While the day was marked with awareness-raising events in many nations, in New Zealand it passed relatively unrecognised.

“I certainly would have liked to see more activity here,” New Zea-land-based veterinary consultant Jim Edwards, a former president of the WVA, told Rural News.

As editor of the WVA website, he says he was aware of only a couple of low-key events marking the day here, and while antimicrobial use here dif-fers from many nations’, the resis-tance issue is still relevant.

“We use antibiotics for thera-peutic use only here, so our regula-tions are designed to control use in that context, but there are still a lot used so they have to be well mana-ged... The over-arching aim is to pre-serve their use for animal and human medicine.”

The British Veterinary Association’s representative on the World Veterinary Association, Bob Stevenson, said World Veterinary Day 2012 was “a critical wake up call for all veterinarians worldwide.

“From the perspective of our global organisation, the World Veter-

42 animal healthSelenium link to bee problems

ADD SELENIUM to the list of things bugging

honey bees.University of California

Riverside entomologists say selenium, a nonmetal

chemical element, can dis-rupt the foraging behavior and survival of honey bees.

Selenium in very low

concentrations is neces-sary for the normal devel-opment of insects – and humans – but becomes toxic at only slightly higher concentrations when it replaces sulfur in amino acids.

John Trumble, a pro-fessor of entomology, and graduate student Kristen Hladun found bees for-aged on flowering mustard and weedy radish plants regardless of selenium concentration, some of which were very high fol-lowing fertigation with the mineral.

“Nature has not equipped bees to avoid selenium,” Trumble says. “Unless the rates of con-centrations of selenium were extremely high in our experiments, the bees did not appear to respond to its presence.”

The researchers also found bees fed selenate in the lab were less respon-sive to sugar (as sucrose).

“The selenium interfered with their sucrose response,” Hladun says.

“Such bees would be less likely to recruit bees

to forage because they wouldn’t be stimulated to communicate information about sucrose availability to the sister bees.”

Trumble and Hladun also found forager bees fed moderate selenium amounts over a few days died at younger ages.

Trumble says the consequences of bees’ inability to avoid selenium could be substantial, but stresses their research does not show that large losses of honey bees are currently occurring due

to selenium, or that there is any relationship with Colony Collapse Disorder (CCD).

Field studies are needed to determine if honey bees collect enough selenium from contam-inated plants to cause significant effects on learning, behavior and adult or larval survival.

With USDA funding the researchers are to investigate influence other elements, such as cadmium and lead, which have been found in urban honeybee hives.

Bees don’t avoid flowers with high selenium nectar.

World vet day low key in NZ

lameness video comingA NEW Dairy NZ video is to intro-duce six lameness indicators and a scoring system of zero (no lameness) to three, severely lame.

“We want to raise awareness of lameness among farm staff and teach them what to look out for,” says Dairy NZ animal husbandry and welfare developer Chris Leach in the latest Inside Dairy.

“They’re the ones who spend time with cows, especially on bigger farms, so getting them to identify lameness is important.”

Massey University research

shows there’s often a delay between onset and identifica-tion of lameness, exacerbating problems.

“It’s critical action that we’re after,” stresses Leach.

The scoring system is based on similar UK and US models but modified for New Zealand. The six indicators are: walking speed; walking rhythm; stride length; weight bearing; back alignment; head position.See www.dairynz.co.nz/lamenessvideo for more

alan Harman

niary Association, to the individual veterinarian treating an animal, there can be no more crucial theme than that selected for 2012.”

The BVA notes interest in anti-microbial resistance “shows no sign of abating” but political efforts to tackle it tend to focus on animal app-lications, rather than human.

BVA president Carl Padgett belie-ves a coordinated approach is needed to tackle resistance worldwide.

“Antimicrobial resistance is a

serious problem for human and animal health. As veterinary surge-ons – no matter where in the world we live and work – we have a duty to use these medicines responsibly for the good of animal health and wel-fare, as well as public health....

“Antibiotics are a vital tool in our armoury to combat animal diseases and the global veterinary profession must ensure they are used prudently and responsibly if we are to avoid a crisis.”

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machinery & products 43

Hilux is back!

TOYOTA NEW Zealand says its Hilux ute is again in good supply, in time for National Fieldays. Floods last year in Thailand interrupted supply.

Fieldays deals will run in May and June on the Hilux.

Toyota general manager sales and operations, Steve Prangnell, said, “We are excited the Hilux is well and truly back…. We experienced a dramatic shortage of stock last year following supply issues from the Thailand floods and Japan earthquake and tsunami.

“Customers have been understanding… and we are grateful for their loyalty.”

The Hilux has been a mainstay of rural New Zea-land and a Kiwi workhorse from the late 1970s to the re-designed 2012 version, Prangnell says.

Hilux is the segment leader in New Zealand. Global sales are at least 5 mil-lion.

Staring at stubble?TOPPING’S LONG since over, harvest stubble stares you in the face and neglected areas of your farm await slashing and mulching for bringing into production.

Sound familiar?It’s a perfect opportunity

for a Fieldmaster GMM Mul-ticut – a three-in-one rotary mulcher made in New Zea-land, based on findings from a lengthy research project on stubble management in Brit-ain, says the Auckland com-pany.

Knife design and the oper-ator-selected ‘just-right’ cut-ting height combine to suck dust into the mulched plant trash, helping it rot down faster.

Fewer pests and less spray are two beneficial results of this work, contributing to sustainability, says Fieldmas-ter. And in addition to their not being dowsed in chemi-cals, worms and soil microbes largely miss out on the bash-

ing they would get if the cul-tivator was a deep-working one.

Blades are interchange-able, depending on what you want to chop – kikuyu, bul-rushes, gorse, blackberry and general plant rubbish.

Drive is all gears – no belts and therefore minimal power loss to transmission.

Design and construc-tion features include modu-lar construction with 5mm or 6mm monocoque steel decks with double-skin rein-forced sections; rugged reli-able drivelines and Super Ag gearboxes.

The toppers are garnet blasted, zinc primed and powder coated.

Primer and topcoat are baked on.

Testing includes 600 hours of salt water scouring – relevant in the tough New Zealand environment.

Working width to 3.3m.tel. 0800 500 275

mulching adds dust to the trash, speeding its decomposition.


44 machinery & products

‘Smart’ tractors ease vineyard jobs‘SMART’ FENDT vineyard tractors are making life easier for manager and drivers on a vineyard at Kaituna, Marl-borough, says the brand national dis-tributor AGCO New Zealand.

Kaituna Vineyard manager Peter Duncan saw the Fendt at a field day and recalled a friend saying he was impressed by the model he owned.

Duncan bought a Fendt 209P and a 211P in association with two other vineyards, and the tractors will harvest all the properties. He also contract har-vests once all the owners’ properties are done.

In a normal week the tractors work 40-45 hours, more during harvesting.

Measuring 1.8m wide, the tractors fit comfortably between vineyard rows. And their Vario transmissions are said to make driving easy.

Kaituna Vineyard is on the northern bank of the Wairau River between Kai-tuna and Tuamarina. It is 105ha and has six varieties of grapes, sauvignon blanc the most abundant.

The new tractors arrived in Decem-ber from Tractor Repairs and Spares, Blenheim. Duncan is said to be impressed: “They are smooth and com-fortable to drive and very well made.”

The vineyard has three fulltime driv-ers. Phil Dixon has worked there for nine years and is the vineyard foreman. New to the brand, he says he finds them ‘smart’, and he expects to get more out of them as he learns their capabilities.

He likes using ‘cruise control’ with headland management – going down the rows and pushing a button to have the headland management stop the implement and raise it as the tractor prepares to turn. Another push and the gear is lowered and restarted in the programmed order. Then it’s back into cruise control.

Says Dixon, “I can focus on what I’m doing and leave the Fendt to choose the most effi-cient gear for the set speed. There’s a lot of turning in an orchard, so it saves the driver a lot of work. The steering also saves us time and effort. You can turn on a dime.”

Headlands in the vineyard are vulnerable to damage; here automatic 4WD helps. If a turn exceeds 15o the 4WD automat-ically switches off, saving the ground from getting ripped up.

Dixon says even a 12-hour

day is manageable in the cab, with its air-condition-ing and noise-proofing. “It’s brilliant; you can hear the phone ringing if the stereo isn’t up too loud.”

Peter Duncan also likes the quiet cab, “especially good during harvest when the drivers are in there a lot. You can hear the phone ringing and hold a conver-sation without shouting.”

Vario transmission

requires clutch use only during engine starts. Then Dixon controls everything with a joystick: “Push the gearstick forward and it changes automatically, or a quick flick for-ward and it changes one gear.”

The vineyard uses the Fendts to tow sprayer, leaf plucker, defoliator and trimmer. The tractor will often have a trimmer on the front and a mower on the back. Hydraulic flow

to each implement is adjusted with a twist of a dial.

Says Dixon, “I can turn down the trimmer and still have the mower on the back at 540. The Fendts can work at lower revs than most tractors. I run the mower at 1600 but otherwise it’s usu-ally 1250-1300.”

Fuel efficiency is reckoned notice-ably better than other tractors on the property.

Kaituna Vineyard manager Peter duncan and foreman Phil dixon.

fendt 200P tractors are flexible enough to handle a wide range of vineyard implements.

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Quad skills honed on day referesher

aRGumeNT RaGes on about helmets. employers are required to supply them, as items of the personal protective equipment that should be supplied to employees, and employees should wear them.

The minister Kate Wilkinson has said “While not law, it will be used by the courts to help decide whether or not someone has failed to comply with any provision of Hse act. Ignoring the guidelines is not an option.”

so both employer and employee can be prose-cuted, and the fines range up to $25,000 for individ-uals, to $250,000 for companies.

Getting your head around helmets

bernard lilburn

RECENT PUBLICITY on quad and ATV accidents has spawned lots of activ-ity in the training industry as people try and come to terms with their require-ments under the Health and Safety in Employment Act (HASIE).

The Act states, “Every employer shall take all

practicable steps to ensure the safety of employees while at work.”

Land Based Training (LBT) is a private train-ing enterprise (PTE) with a head office in Wanganui and offices and tutors in the North Island and able to outsource work in the South Island.

LBT was the subject of an ERO review last year, gaining a ‘highly confi-dent’ rating after compre-hensive appraisal. This is the highest possible result. Being a PTE it doesn’t get government funding to run its short courses yet is regarded as in the top 10% of training organisations.

LBT saw a gap in the market for a practical quad course to update farmers

with current legislation. (There is also the NZQA unit standard course which can take up to three days with at least 10 hours classroom time.

LBT managing direc-tor Rob Gollan, also a farm consultant, says “Farm-ers don’t want to be taken out of their businesses for two or three days to do a course, which is basically

teaching them something they already know how to do.

“We identified a gap in the market, and with demand from our clients, saw an opportunity to develop another style or method of conveying the information to existing cli-ents and to provide a ser-vice to the farming and service sectors.”

So in consultation with the Department of Labour, existing clients and tutors the company developed a one-day on-farm course ideally for at least eight participants. It covers employers’ and employ-ees’ obligations under the HASIE Act and gives examples of what hap-pens when lapses occur,

to paGe 47

the penalties and costs of rehabilitation. The instructors use a Power Point presentation (90 minutes) and it requires no writing or form filling by participants.

Then it’s on to the

quads, with the tutor pro-viding information and, if needed, instruction on techniques and eventually assessment. The course covers all aspects of quad riding such as towing, riders on the lBt course stayed involved

and took away a good handout.

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46 machinery & products

LELY HAS launched a new automated feeding system. The Lely Vector is the next major step in automating working methods within dairy farming and as such, it matches the impact of the milk-ing robot, the company says.

The Lely Vector makes sure that cor-rect rations are fed to cows consistently and on time, allowing cattle farmers to achieve efficient and high-grade milk and beef production. Lely says the system ensures a constant supply of feed in a flexible manner, 24 hours a day, seven days a week. The process is fully automated and ensures optimal flexibility for cattle farmers using the system.

The Lely Vector enables cattle farmers to define and adjust their feeding strategy for different groups of animals, it says.

“This results in improved animal health, improved feed effi-ciency resulting in optimal milk and beef production.

“The feed is stored in the feed kitchen; an open area without any obstacles, in which all kinds of feed can be stored, each in its own location. Depending upon the size of the feed kitchen, feed can even be stored for a three-day period. This means that that there is sufficient feed for more than a weekend.”

TRACTOR AND machinery maker New Holland (NH) is lending its weight in Europe to the cause of ‘conservation agriculture’ – so called by Benoit Lavier, a farmer and founding member of the Insti-tut de l’Agriculture Durable (IAD).

NH’s top executives spoke recently at a meeting called with European Parliament members by the chairman of the EU’s com-mittee on agriculture and rural development, Paulo de Castro. The meeting was about ‘Innova-tion and Technologies for Sustain-able Agriculture’.

Benoit Lavier referred to the growth of ‘conservation agricul-ture’, saying Europe must set in motion a ‘virtuous cycle’ embrac-ing all makers of foods and machin-ery, plus energy generators. All must contribute to boosting bio-mass production, he said.

The NH team was led by chief executive Franco Fusignani. Other speakers included Joseph Daul, the

chairman of the European People’s Party, and other members of the European Parliament including Matthias Groote, chairman of the committee on the environment, public health and food safety.

NH has since 2006 honed its

strategy of developing dedicated machinery and systems to increase sustainable agriculture and reduce polluting emissions and farmers’ dependence on fossil fuels.

Paolo De Castro described changes to European legislation as a result of the new and recently approved Common Agricultural Policy.

He stressed that environ-mental sustainability must go hand-in-hand with the economic sustainability of each planned mea-

sure, and he described how energy independence and zero-emissions agriculture are essential.

Franco Fusignani described NH’s ‘clean energy leader’ strat-egy for “practical and accessible” ways to reconcile farming needs

with protecting the environment. The strategy includes biodiesel, biomass, Tier4A EcoBlue engine technology reducing carbon foot-print, the NH2 hydrogen tractor and the ‘energy independent farm’.

Said Fusignani, “We believe agriculture has the potential to spur the global economy to a more sustainable future.... Agriculture needs more attention and financial support to fund research and pro-mote innovation in machinery, if the challenges are to be overcome.”

Giuseppe Gavioli, from CNH Innovation and Advanced Research, explained that energy-efficient machinery, biofuels derived from biomass, and clean engines are essential to cut emis-sions and achieve energy indepen-dence in agriculture.

Biofuels derived from biomass (biodiesel, bio-ethanol, bio-meth-ane and hydrogen) are the next steps to zero emissions; bio-meth-ane and hydrogen are also better suited to local production in small-scale plants on farming land.

Pierre Lahutte, New Holland agriculture product management, described in detail each stage of the development of the NH2 hydrogen tractor – the world’s first-ever zero emissions tractor.

He also outlined tests on the first pilot farm in New Holland’s ‘energy independent farm’ proj-ect, at La Bellotta di Venaria, Italy, where the NH2 tractor will be introduced this European summer.

Blue tractor firm growing greener

“we believe agriculture has the potential to spur the global economy to a more sustainable future....”

New auto feederduals suit lawns workDUAL WHEELS supplied by Clic, Rotorua, are making a difference to the work of Lawn Services Ltd, says chief execu-tive John Smith.

He has used his Clic dual-equipped Kubota ZD221 zero turn mower on all but one of his commercial jobs, and says the wheels are “the best piece of equipment I have bought to complement my Kubota”.

“At the end of each run when I turn back and com-mence the return cut, over-lapping the previous one, the mower turns as easily as when it had only single wheels on the rear.

“I cut a ‘motorway bun’ (a huge mound built by the motorways systems to deflect vehicle noise) and the finished [ job] usually mimics the side

of a weatherboard house. With the dual wheels I now get an even smooth cut, although the machine is on a 30 degree angle while doing sideways cuts. “I cut an effluent paddock

and there were soft spots all over the place. I had origi-nally bought an electric winch that clips over a tow ball on the mower and this was used on a regular basis to retrieve the

mower from bog spots. I then permanently mounted a 3500 lb winch to the mower, mainly for this job.

“[But recently] I’ve not had to winch, because of the Clic duals…. I’ve also noticed a more even and uniform cut because of the wider foot-print of the dual wheel system. “I can now do vertical down cuts whereas before I regu-larly experienced rear tyre break-out and away I’d go on a wild out-of-control downward slide.”

Smith says he has checked and re-torqued all the wheel mount hubs; no adjustment needed. He runs the outside Clic wheels at 5psi and the orig-inal rears at 20psi. tel. 07 347 2292www.clicdualwheels.co.nz

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HERDHOMES is building on the success of its orig-inal HerdHomes shelter with a range of lower cost flooring options. The new range features a Herd-Homes roofing system with patented airflow design.

This roofing system is at the core of each design, ensuring all floors are as dry as possible and maxi-mum cooling and warming are achieved year-round, the company says.

This has been improved on with a new roof design by HerdHomes which can now span up to 16m or be

looped together for larger widths.

By adding a Herd-Homes roof to a standard concrete feed pad, efflu-ent is reduced markedly, simply by keeping rain off the pad. Effluent is then scraped to a covered bin at the end of the pad – this can be 75% smaller than a pond – and stored until conditions suit application on land.

This dry effluent prod-uct is excellent for crops and can be used as the sole fertiliser for maize to achieve yields of at least 25 tonnes/ha, the com-

wider roof, cheaper floor

HerdHomes team demonstrating the strength of the new roof truss.

Quad skills honed

active riding, riding on undulating terrain and with mounted loads.

Says Gollan, “It’s not re-inventing the wheel. The aim is for employers to make sure staff are aware of the laws, are competent and safe, and we at LBT will do everything to give them the skills to stay safe. It’s important staff realise their responsibilities.”

DoL inspectors have reviewed the course and approved it. Participants are awarded a certificate of course comple-tion, a valuable add-on to their CV.

This reporter attended an LBT course (10am to 3pm) run for the Atihau Whanganui Incorporation (AWHI) on the Tohunga property near Ohakune. Six new staff mem-bers took part.

The Power Point presentation outlined DoL require-ments and the AWHI directives. Participants took away a reference manual recording the presentation, plus some techniques and guidelines – controlling skids, getting the quad off a hill after a failed ascent and so on. It also had checklists of daily and routine maintenance, and compe-tency assessment by the assessor.

The guys there were well involved and maintained their interest, as well as gaining a few new skills.tel. 0508 trainme (872 466)

From paGe 45

pany says. Covering a feedpad can also reduce animal feed requirements and lead to production increases of at least 10%, Herd Homes says, by shelter-

ing stock from cold and wet in winter and heat in summer (with the addition of shade cloth).tel. 07 857 0526 [email protected]

Call now for more information for a 1 week obligation free trial09 414 1028www.prosol.co.nz

PROSOL PCS Ultrasonic flowmeters are simple to install, reliable and suit standard council metering requirements. The transducers mount to the outside of the pipe, and will suit most pipe materials 15mm to 3m diameter. Onsite display, datalogging or telemetry options available. Transducers can be mounted up to 100m from display.

Flowmeteringcausing you a headache?Consider Ultrasonic Clamp-on meters as your first solution

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How to Deal withyour Stubble.

Compared with some traditional methods of stubble removal that tend to be dangerous, ineffective and bad for the environment, rotary mulching is fast, efficient and beneficial to your land optimising natural crop cycles and retaining valuable nutrients in your soil. The GMM Multicut blade design and counter-rotating operation produces the optimum level of pulverisation resulting in fast decomposition and leaves a well prepared surface reducing the need for extra cultivation and seedbed preparation.

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Farmers in the know are going ‘rotary’ using the GMM Multicut mulcher for their stubble management needs.


48 motoring

High-tech deckHIGH-TECH MATERIAL resembling wood is being used to make a new farm ute deck.

Best Bars Limited is combining polymers and wood to produce a mate-rial that resembles timber with equal strength and durability.

Deck sides, tail gate and bed are made from it.

The Advantage heavy-duty ute deck will be launched at National Fieldays. It looks like a traditional ute deck but, lighter in weight, allows a heavier load, Best Bars says.

“This material has been designed and made especially for Best Bars, not only to suit the application, but also to be aesthetically pleasing, so it looks like wood when it is used in our Advan-tage deck,” says John Nash, sales man-ager.

“It’s been tested in the market for the past year [and] subjected to vari-ous kinds of treatment.... We build it to heavy-duty standards, but without the weight penalty you’d get in a steel-only or steel/timber deck.”

The price is competitive, “which will please farmers, contractors and others who will see it as an advantage in their work.”

The welded one-piece steel frame and bed is similarly light, yet strong

and flexible.The steel has a zinc phosphate base

coat and industrial, heavy-duty, pow-der-coat finish.

The deck has full-length hinges fitted with nylon anti-rattle bushes and the sides and tail gate are locked by anti-luce latches. All fasteners are stainless steel with nyloc nuts.

Design features: rear lamp clus-ters have built-in alloy protectors; side steps just behind the cab; rope tie bars and powder-coated steel mudguards. The deck also comes standard with a polished alloy headboard with a pair of vertical pins, along with an alloy mesh cab protector.

Accessories include a rear removable ladder rack, sliding under-tray toolbox, floor mounted tie-downs and side tool-boxes.

An hydraulic unit can be fitted to convert the deck into a tipper.

The Advantage ute deck comes in five different sizes to fit all cab-and-chassis utes on the New Zealand market – whether single, extra or double cabs, starting with a 1674mm length x 1800mm width and going up to 2585mm length x 1800mm width.

They can be supplied as DIY kits, ready to assemble, or they can be fitted by new vehicle franchise dealers.

volvo’s entry level option brings top range qualitiesAT THE luxury end of the car market, ‘entry level’ variants often stack up better than the fully-loaded top-of-the-range.

With premium brand cars ‘entry level’ doesn’t equate to ‘mean and nasty’ as it can do in cheap vehicles. The Volvo XC60 T5, for example, is the same capable car as the full-noise T6 AWD R-Design, but does without the big engine, big wheels and some of the high-tech gizmos that, let’s face, often don’t get used anyway.

The T5 is still equipped to the level you would expect a $69,990 SUV to be, but doesn’t have high-end gear such as adaptive cruise control with collision warning and automatic brak-ing (a $4590 option on the T5), or the blind spot warning system.

But with leather upholstery, Blue-tooth and i-Pod connectivity, power tail gate, premium stereo... you don’t want for much in the T5. And being a Volvo, it is loaded with airbags,

dynamic stability and traction con-trol, anti-lock brakes and crash safety performance second to none.

The ‘entry level’ theory also applies to the engine: The 224kW turbocharged 6-cylinder engine you’d find in the T6 is by all accounts a great engine, but more than you’ll ever need in normal driving, espe-cially in a family wagon such as the T5. The T5’s 177kW turbocharged direct injection petrol engine is plenty, especially when it delivers its healthy peak torque of 320Nm in the 1800-5000rpm range where most normal driving is done.

Matched to a 6-speed automatic, the result is effortless acceleration, safe and spritely overtaking, and pull-ing power that happily lugged Rural News staff and equipment to the ploughing nationals, and took a family and stacks of luggage on a weekend jaunt – tasks this car is perfect for.

The manufacturer quotes per-formance figures of 8.1 seconds for the 0-100km/h sprint, top speed

of 210km/h and fuel economy of 8.7L/100km. We didn’t put the speed claims to the test, but didn’t feel at any stage we needed more power, the 4-cylinder T5 pulling for all the world like a torquey 6-cylinder.

One feature of the higher-end XC60s not included in the T5 is all-wheel-drive. If you need the extra traction you’ll need to buy the $79,990 D5 AWD, a capable diesel variant with a few more toys than the T5, or the $86,990 T6 (or go all the way and get the R-Design T6 for $96,990). However, front-wheel-drive will suit most situations, such as driv-ing across paddocks to set up for the ploughing nationals.

The chassis has coil-over-strut front suspension with multi-link independent rear suspension, anti-dive, anti-lift function with anti-roll bars front and rear. Making for a com-fortable ride and secure handling. On the school commute or long-distance touring, as with the engine perfor-mance, this car is effortless.

adam Fricker

the Volvo Xc60 is the same capable car as the full-noise t6, but without some of the gizmos.

© 2010 Bombardier Recreational Products Inc. (BRP). All rights reserved. ®, ™ and the BRP logo are trademarks of BRP or its affiliates. † Visco-Lok is a trademark of GKN Viscodrive GmbH. ‡ All other trademarks are the property of their respective owners. Specifications for EC homologated units may differ slightly from specifications mentioned herein. BRP reserves the right at any time to discontinue or change specifications, prices, designs, features, models or equipment without incurring obligation. Some models depicted may include optional equipment or equipment which is not available in your country. Picture taken outward on a private land. Photographed using highly skilled operator under controlled conditions. Do not attempt these manoeuvres if they are beyond your skill level. *International versions only. EC homologated models respect EC homologation restrictions. As per manufacturer’s official MY10 declaration to the California Air Resources Board.

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© 2010 Bombardier Recreational Products Inc. (BRP). All rights reserved. ®, ™ and the BRP logo are trademarks of BRP or its affiliates. † Visco-Lok is a trademark of GKN Viscodrive GmbH. ‡ All other trademarks are the property of their respective owners. Specifications for EC homologated units may differ slightly from specifications mentioned herein. BRP reserves the right at any time to discontinue or change specifications, prices, designs, features, models or equipment without incurring obligation. Some models depicted may include optional equipment or equipment which is not available in your country. Picture taken outward on a private land. Photographed using highly skilled operator under controlled conditions. Do not attempt these manoeuvres if they are beyond your skill level. *International versions only. EC homologated models respect EC homologation restrictions. As per manufacturer’s official MY10 declaration to the California Air Resources Board.

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vintage 49

a true david brown fanJIM GREGAN grew up seeing his father own four different models of the same tractor, so it was a better-than-even chance Jim would follow his dad’s lead when starting his own collection.

Gregan, of Roto-rangi, near Cambridge, has a collection of 31 different David Brown models – believed one of the biggest in New Zealand.

He has one model of every tractor made by David Brown including machines made during the brief ownership of David

Brown by CASE. These include farm and garden tractors and models built for work on WWII air-fields.

Gregan is president of the David Brown Club of New Zealand, with 100 members nationwide. He also belongs to the Waikato Vintage Tractor & Machinery Club, helping run its vintage tractor and machinery expo during the recent New Zealand Ploughing Association Championships.

The Expo had 164 vin-tage tractors of all makes and models, vintage cars, shearing plants and sta-

tionary engines. A dis-play of vintage ploughs included two built in 1890 and a 1913 Reid and Gray that had won a New Zea-land Ploughing champi-onship.

“David Brown had more models than any other tractor,” said Gregan.

David Brown, an Eng-lishman, began making tractors in 1936 in partner-ship with Harry Fergus-son. This arrangement was dissolved when Fergusson went to the US and joined Henry Ford.

Within two months he had his first model pro-

tony HopkinSon

duced under his own name: the Vak-1 farm trac-tor.

He was quickly involved with the war effort supplying beefed-up models with winches for towing aircraft, models for towing barges along the canals and farm tractors.

The company merged with CASE in 1972 and the name was dropped when

CASE joined with Inter-national Harvester in 1987. “They were manu-factured under the name David Brown for almost 50 years.”

Gregan prefers not to single out any model as special but “first among equals” in his collection is the David Brown 50D with a 6-cylinder direct injec-tion diesel engine gener-ating 50hp. “This tractor

was built only for towing with a PTO shaft and no hydraulics.”

Only 1260 machines were made 1953-1958, all exported. Sixty nine came to New Zealand, most to the South Island.

Many are now back in the UK as collectors’ items and have changed hand for as much as £45,000. Only 80 are believed still existing, 12 in New

Zealand. Gregan bought his as

deceased estate, paying a record price for a vintage tractor.

At the recent expo, Gregan had organised for six 50D models to be in the same place – believed a world record.

“I believe the 50D is one of the most sought after tractors for collec-tors in the world.”

Jim Gregan, roto-rangi, waikato.

a line up of Jim Gregan’s 50d david Brown’s at the waikato Vintage tractor and machinery expo at cambridge last month.

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rural trader 51

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rural news 15 may 2012

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