Category Archives: New Zealand At Home

Meat activity in New Zealand, of interest to exporters and importers.

Sheep and beef income down, while deer is stable

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Sheep and beef farmers can expect their income to be down six percent this season (2012/2013), compared to last year, while deer farmers are experiencing their third season of relatively stable prices, according to new figures issues by the Ministry of Primary Industries (MPI).

The 2012/2013 season is expected to be more subdued for pastoral farm businesses as product prices come off recent highs, MPI says.

The government departed has released the 2012 pastoral farm analyses as part of its annual Farm Monitoring Report series. The reports provide models and overviews of the financial performance of typical dairy, sheep and beef and deer farms, based on information gathered from a sample of farmers and industry stakeholders.

On sheep farms, lambing was up nearly 10 percent on last season. Improved prices for sheepmeat, beef and wool, combined with the higher productivity in 2011/2012, lifted net cash income for the sheep and beef farm model by 18 percent to $543,000.

For 2012/2013, sheep and beef income is expected to be down six percent due to lower returns for lambs and wool and farmers are cautious. However, while the profit before tax is forecast to fall around 15 percent, at $181,300 it is still the second-highest profit for the national sheep and beef farm model since 2000. Note that the 2011/2012 actual result was $213,841 profit before tax, which was an improvement of 44 percent on the previous season.

Deer farmers, meanwhile, experienced their third season of relative stability in product prices and good on-farm productivity in 2011/2012, which has enabled some capital expenditure and debt repayment and boosted confidence in their sector. Similar results are forecast for 2012/2013.

National dairy production was up nearly 10 percent on 2011/2012. However, this was offset by a declining payout so the farm income was similar to the previous year. In 2012/2013, however, total income from milksolids is expected to fall 20 percent for the national dairy farm model, resulting in a 57 percent drop in profit before tax.

MPI analysts have also noted some key developments for the pastoral sector, including the beginning of mandatory tagging of cattle under the National Animal Identification and Tracing (NAIT) programme, land-use change and succession for sheep and beef farmers, together with the need to reduce environmental impacts such as nutrient runoff into waterways and the Trading among farmers proposal for dairy farmers.

 

Primary growth coupled with energy efficiencies

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Growth in the primary sector has been coupled with energy efficiencies, according to Statistics New Zealand.

Data from SNZ’s latest Energy Use Survey shows that overall energy use by the primary sector was almost 35,000 terajoules (TJ) in 2011 and one-third of businesses had energy saving technologies. Total energy use in this sector stayed steady in the last three years, while the sector’s contribution to gross domestic product rose nine percent.

The total energy used in the sector equates to enough diesel to make two million trips from Cape Reinga to Bluff in a medium-sized diesel car. “While this sounds like a lot, the primary sector actually uses a relatively small proportion of New Zealand’s total energy. It makes up less than 10 percent of total business energy use,” energy statistics manager Hamish Hill said.

Agriculture, the biggest industry in this sector, uses almost half the total energy. Diesel and electricity remain the main energy types. “Diesel is integral to our production of timber, livestock, and crops. This contrasts with the industrial and trade sector, which is more reliant on natural gas and other energy types, such as coal.”

This is the second time that energy use data has been collected for the primary sector. The New Zealand Energy Use Survey covers each of the primary, industrial and trade, and services sectors over a three-year period.

Ministry for Primary Industries’ Strategy 2030

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The Ministry for Primary Industries (MPI) has set itself an ambitious strategy to 2030 with the subtitle ‘Growing and protecting New Zealand,’ writes Allan Barber.

In its introduction, the Ministry asks ‘Why this strategy?’ which it answers by saying a re-balancing of the economy towards more productive sources of growth is required and New Zealand must trade itself to greater growth and prosperity.

When one considers that 71 cents in every dollar of merchandise export earnings come from the primary sector, there are no prizes for guessing where most of this is expected to come from. The Government’s strategic growth agenda contains the goal of increasing the ratio of exports to GDP from 30 percent to 40 percent of GDP by 2025, so clearly agriculture will be expected to generate the majority of this increase.

MPI, which now incorporates the functions of MAF, as well as the Ministry of Fisheries and New Zealand Food Safety Authority, has a major role and responsibility for helping to achieve these goals. Having always believed that government agencies must provide the framework and environment within which business has to perform and achieve, it’s expecting too much of MPI and its strategy, if we believe that this will be easy.

Strategy 2030 contains two points of focus: first to ‘maximise export opportunities and improve sector productivity’ and second to ‘increase sustainable resource use, and protect from biological risk.’

Key strategies to achieve these are:

  • Partnering with the primary sectors to identify and seize opportunities for improved productivity and market returns;
  • Removing unnecessary barriers to trade and increasing our use of international standards to enhance value;
  • Encouraging and co-investing in industry innovation and adoption;
  • Identifying and managing risks to New Zealand’s natural resources;
  • Partnering innovative approaches to environmental challenges; and
  • Better understanding the challenges to sustainable use of New Zealand’s natural resources.

The Ministry’s approach will concentrate on enabling and partnering by cooperating, facilitating, providing information and tools, using a whole-of-government approach across the primary sector and connecting primary sectors with one another. A key aspect of this is to engage with Maori which MPI sees as a core obligation.

Before jumping to the conclusion that this obligation is yet another example of political correctness, which is tempting, one must realise that Maoridom has $10.6 billion invested in primary sector assets including 1.5 million hectares of land of which MPI says 80 percent is underutilised. This degree of underperformance certainly needs to be improved and will produce economic returns for both Maori and the country as a whole.

MPI’s structure to deliver its strategy consists of five branches across the whole operation: Policy, Standards, Verification and systems, Compliance and response, and Resource management and programmes. These five branches encapsulate the total range of activities which the Ministry undertakes. The ones with the highest profile are food safety, animal welfare and biosecurity, but these are just the tip of the iceberg.

MPI has responsibility for literally everything and everybody leaving and entering the country. It negotiates standards with the regulatory authorities of our trading partners; it establishes the systems and maintains surveillance to ensure compliance with these standards. It also develops and implements policies across the whole gamut of New Zealand’s agriculture, horticulture and aquaculture sectors.

It is staggering to reflect that in 1987 David Lange saw agriculture as a sunset industry with New Zealand’s future lying in becoming the Switzerland of the South Pacific.

Now more than ever, the primary sector is the engine of our economic growth. MPI’s core responsibilities of setting and applying systems and standards for food safety, animal welfare and biosecurity, while ensuring effective response to pest incursions and non-compliance, are absolutely fundamental to our future place in the world.

The Ministry has an enormous responsibility for ensuring the protection and security of our whole primary sector which is a critical part of our economic growth.

Provided it doesn’t lose its focus on the clearly defined essential outcomes listed in its strategy, this is how it will make its major contribution towards ensuring New Zealand’s future prosperity.

Allan is an agribusiness commentator with particular interest in the meat industry and has his own blog Barber’s Meaty Issues. This article also appears at interest.co.nz.

Rennie wins first beef and sheep news award

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A brand new award recognising excellence in hard news reporting about any aspect of the beef and sheep industry has been won by Richard Rennie, for a portfolio of articles that appeared in the  NZ Farmers Weekly.

The award, sponsored by Beef + Lamb NZ Ltd, was added to the New Zealand Guild of Agricultural Journalist & Communicators’ annual awards, which were presented in Wellington last Friday evening.

In his articles, Rennie covered a series of issues affecting New Zealand beef and sheep farmers. One tackled the potential damage of fracking to Taranaki farmland – he discovered that not only was the practice not new, it had helped restore marginal coastal farmland into productive pastoral operations and stabilised coastal dune movement. Another covered a forced sale of Alec Campbell’s property after mortgagee action by Rabobank. It revealed the farmer’s claims about stock being within the with-holding period, after being treated with a long-acting drench, were well founded, raising justifiable concerns over food safety as a result of the actions. Transpower’s proposed pylons for a Western Bay of Plenty sheep and beef farm, and the ensuing battle, were the subject of the third item.

The supreme Rongo Award, recognising excellence in agricultural journalism, was won by Auckland-based freelance journalist, Benedict Collins, for a series of programmes on the devastation of the kiwfruit industry by PSA-V, which appeared on Country99TV.

The runner-up was Shawn McAvinue, for articles that appeared in the Southland Times (though he is now working for the Otago Daily Times). This is the first year that TBfree New Zealand has sponsored this award.

At Friday night’s awards dinner, a total of ten awards were presented, nine for journalism and one for photography. The key objectives of the awards are the encouragement and recognition of excellence in agricultural journalism.

Another new sponsor, for an award that has been around for a number years, is Ballance Agri-Nutrients, which has funded the Farm Business Writing Award. The inaugural winner of this award was Tim Cronshaw, of The Press.

The PGG Wrightson Sustainable Land Management Award focuses on local, national and global agribusiness and environmental factors impacting on the sustainability of farm businesses, and was won by Susan Murray, of Radio New Zealand’s Country Life programme

The AgResearch Science Writers Award, established to enhance standards of science writing, especially about pastoral agriculture, was won by Tim Cronshaw of The Press.

The Horticulture New Zealand Journalism Award, set up to recognise excellence in agricultural journalism focusing on New Zealand’s horticulture industry, was won this year by Tim Fulton of New Zealand Farmers Weekly.

The Rural Women of New Zealand Award, which recognises the important contribution women make (and have always made)  in the rural community, was won by Jackie Harrigan for articles which appeared in Country-Wide.

The AGMARDT Agribusiness Award, which recognises high quality information about and effective analysis of national, global and other agribusiness, was won by Hugh Stringleman, for articles which appeared in NZ Farmers Weekly.

The Federated Farmers Rural Photography Award, for a single photo that illustrates a rural event or activity was won by Taranaki Daily News photographer, Jonathan Cameron.

The Guild’s own award is designed to encourage and recognise excellence among journalists with three or less years reporting on agricultural issues, The Agricultural Journalism Encouragement Award, went to John Watson, of Country99TV.

One man and his dogs

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The work of one man over the last four decades has contributed to the eradication of one significant disease and the control and reduction in incidence of another meat quality issue, earning him the respect of his meat industry colleagues.

Geoff Neilson, sheep farmer and chairman of Ovis Management Ltd (OML), has retired after a role spanning 41 years.

Starting in 1971, when he was elected to the Hydatids Council, Geoff contributed not only to the enhancement of sheep meat quality but also to the eradication in New Zealand of hydatids, which caused significant numbers of deaths and hospital admissions in New Zealand.

With the disbandment of the Hydatids Council in the early 1990s, there then became a need for the sheep industry to focus on another parasite Cysticercus Ovis, also known as ‘sheep measles’. The condition was not a human health issue, but was a meat quality issue that had the potential to erode market share and income for farmers and meat companies.

Geoff was the inaugural and only chair of OML until his retirement at the OML AGM on 28 August. OML was established by, and is funded by, sheepmeat processors through the Meat Industry Association (MIA).

MIA chairman, Bill Falconer, paid a formal tribute to Geoff’s lifetime commitment to the meat industry at the recent Red Meat Sector conference in Queenstown.

The OML board has elected a new chairman, Roger Barton, a sheep and beef farmer from Greytown in the Wairarapa.

This article has appeared in Food NZ magazine (October/November 2012).

Alliance to transfer Mataura sheepmeat processing to Lorneville

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Alliance Group announced this afternoon its intention to close its sheep and lamb processing operations at its Mataura plant and transfer them to its main Southland lamb plant at Lorneville, reports Allan Barber.

Mataura’s beef facility which has recently had a $15 million upgrade will continue to process beef with its remaining staff count of more than 400.

This decision is still up for final consultation with the workforce and union but, as always, this is a formality in as much as the decision has already been made. However, the media release indicates that other options could emerge during the consultation process. If the proposal remains unchanged, approximately 260 workers will be offered the chance to transfer to Lorneville with a further 65 engineering, administration and management staff also affected.

In a media release, Alliance’s chief executive Grant Cuff refers to the company’s status as one of Southland’s largest employers, emphasising its duty as a cooperative to its shareholders to operate the plant configuration most appropriate to the available stock numbers. Significant efforts had been made to retain complementary sheep, lamb and beef processing at Mataura, but declining stock numbers have made this unsustainable.

Cuff refers to the strength of Alliance’s balance sheet, which will enable it to withstand the challenge of a difficult period for the industry as a whole. He also says: “We are confident in the long-term outlook and these changes are essential to allow the company and its 5,000 farmer shareholders to benefit from the demand for New Zealand meat products in the global market.”

Today’s announcement confirms the rumours of industry rationalisation that have been circulating in recent days. The fact that Alliance has made the first move does not mean there won’t be further changes in due course affecting either the South Island’s other large cooperative Silver Fern Farms or ANZCO’s Canterbury Meat Packers operation near Ashburton.

However Alliance’s move will provide a small breathing space before further capacity or structural changes are necessary.

Iron Maidens + Sophie

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London Paralympic Games champion swimmer Sophie Pascoe is the newest Beef+Lamb NZ Inc Iron Maiden, becoming the + between Sarah Walker’s ‘Beef’ and Lisa Carrington’s ‘Lamb’.

Announced first on the domestic promotion agency’s Facebook page this morning, the well anticipated news has since been covered at the NZ Herald, which says ‘It all adds up now Sophie has joined in‘.

The 19 year old swimmer from Christchurch, who lost the lower half of her left leg aged two following a lawnmower accident, scored three gold and three silver medals at the recent games in London – breaking two world records and setting a new Paralympic record in the process. She added those to her earlier hauls of ten medals at the Summer Paralympics and four medals at the 2008 Paralympics.

Sophie, who  was made a Member of the New Zealand Order of Merit earlier this year for her services to swimming, will appear alongside the other two B+LNZ ambassadors in a marketing campaign promoting the importance of a healthy diet, including red meat. Kiwis can expect to see Pascoe, Walker and Carrington on their television screens from November.

B+LNZ Inc chief executive, Rod Slater, says Pascoe completes the team.

“She has it all; the New Zealand public love her. Sophie fits seamlessly into the Beef + Lamb brand. We really are seeing the second generation of superstars following on from the original Iron Maidens” says Slater.

Pascoe says she’s really excited to be part of the team.

“I’m thrilled, especially to be working with two other amazing athletes. We all get on so well, it’s going to be great,” says Pascoe.

Congratulations Sophie and B+LNZ!

Agriculture contributes to GDP growth

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Agriculture was a main contributor to growth in New Zealand’s economic growth in the March 2012 quarter, according to Statistics NZ.

Economic activity, as measured by gross domestic product (GDP) grew 0.6 percent in the June 2012 quarter, following revised growth of one percent in the March 2012 quarter.

Agriculture was one of the main contributors to the growth, increasing by 4.7 percent, with continued good growing conditions resulting in increased milk production, Statistics NZ says.

“The good pasture conditions in the first half of the year continued to contribute to economic growth this quarter, national accounts manager Rachael Milicich says.

Construction, transport, postal and warehousing and manufacturing were other strong sectors.

“We are also now seeing evidence of a rebuild in Canterbury following the earthquakes,” Milicich says.

The size of the economy (in current prices) was $205 billion for the year ended June 2012.