Posts by Farmer Green
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Farmer Green sees that the entry of NON Co-operative dairy companies to the NZ raw milk market is the real big game changer.
If non co-op companies pay the same or higher raw -milk price directly to farmers , then the Fonterra farmers are effectively receiving no return for their compulsory investment in Fonterra Co-op shares.
Fonterra will (if it is to remain a co-op) have no option but to raise the dividend payment WITHOUT dropping the raw -milk component of its payout to its farmers .
The only way to do this will be to add more value i.e. to change the product mix away from commodities.The other game changer will be if the new non co-op companies elect to produce all year round (why wouldn't you go for maximum utilisation of a several hundred million dollar investment in plant?).
This will allow the new companies to minimise the proportion of their production emerging as low- value commodities , and to raise their raw -milk payout further, in the process encouraging further defections from Fonterra.Game on!
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Hard News: Fact and fantasy, in reply to Ian Dalziel,
Hope springs eternal . . .
http://www.stuff.co.nz/business/farming/8127171/Farmers-likely-to-benefit-from-Chinese-purchaseNotice the acknowledgement that NZ could easily produce the same or greater quantity of milk with fewer cows(resulting in less pollution and better animal welfare; possibly a slight improvement in working conditions for dairy-slaves as well).
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Hard News: Fact and fantasy, in reply to Sacha,
someone else’s sharemilkers and factory hands.
Farmer Green likes your turn of phrase: very well put.
As others , in fact many, continue to emphasise, it is about having a brand which says CLEAN, GREEN and FRESH GODZONE. And making it real (needless to say).
That has been the predominant consumer trend ot the last 40 years ; it shows no signs of going away, or even weakening.
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Hard News: Fact and fantasy, in reply to Ian Dalziel,
if we lose Comalco
You think that this would be a loss? (Sorry Tim)
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Hard News: Fact and fantasy, in reply to Sacha,
Yes but NZ branded/manufactured /infant milk powder, while it is better than 25kg bags of the same thing, can never hold a candle to 200 ml sachets of NZ fresh yoghurt for a lactose intolerant population.
And the plastic packaging is made in China ; we just need to fill it up with mostly water and send it back, by the shipload.
Then we will be in a position to achieve the economic, environmental and social outcomes that we (seemingly) all agree are features of the future NZ that we want to live in. -
Hard News: Fact and fantasy, in reply to Ian Dalziel,
When did Pat Morrison first float the idea of building a large dam to irrigate parts of Canterbury?
Towards the end of the Second Millenium wasn’t it?” Much of the land in that area currently irrigated is supplied with water from underground aquifers that have been under severe pressure over recent summers. The Canterbury Strategic Water Study carried out on behalf of the regional council Environment Canterbury and district councils identified that water storage was the way forward for Canterbury, given that there is enough water for the region but it is not always in the right place at the right time.”
"CPW was granted requiring authority status by Labour Environment Minister David Benson-Pope in 2005." -
Hard News: Fact and fantasy, in reply to Kyle Matthews,
Where is the evidence that Taranaki waterways have higher levels of nitrate , phosphorus and coliforms than those of the Waikato?
The geography of the two regions could hardly be more different: think about it. -
Hard News: Fact and fantasy, in reply to Chris Waugh,
You may recall that Farmergreen posted earlier about a foreign (Chinese) dairy company looking to purchase an existing NZ dairy brand.
This article fleshes the story out somewhat.There are some interesting aspects to the proposal.
Any proposal which sought ultimately to take milk directly from NZ dairy farmers by offering a better price than Fonterra would have the potential for more desirable outcomes vis a vis sustainability, initially economic , but possibly environmental as well.
Increased profitability can lead to reduced stocking rates and more resilient/self-contained farm enterprises . -
Federated farmers and The One Plan(to rule them all):-
“We need to be more militant and stand up like the French farmers do”. Yes there are times I dream of hiring a slurry tanker, sucking the effluent pond dry and then doing a few drive bys of various locations, but I doubt those actions would bring the public onside, which given our small size is what we need to do. Yes we generate the wealth that stops this country turning into a banana economy, but to play that card we have to harm ourselves just as much as we harm everyone else. So the reality for me is, we need to get the normal townies onside, show we are doing what we can reasonably do and explain clearly the cost for all of us from doing what Mike Joy and his ilk want. Once we have the normal and reasonable kiwis on board, then the hysterical nutters will be ignored.
The other comment I have heard from time to time is that the ‘One Plan won’t affect me’; sorry but if you live in this region it will. For one there will be an impact on property values, and two, there will be increased compliance costs. Hill country farmers will now require consents where previously they never needed them, intensive farmers will need to have a consent to farm, costing anywhere from $3,000 to $10,000 depending on how difficult your farm is to model for the consultants. If you think the council is going to be able to implement this massive workload with its current level of funding, without the need for increased rates, then you are highly mistaken.
Whether you live in the city or on a farm this plan will cost you. Farmers lucky enough to have ended up with the right ingredients, soil and weather wise, that spit out a simple N leaching number to meet, you are not as safe as you may think.
One Plan
Now I am on the subject, there is a hell of a lot of confusion out there in the media around the economic impact of the plan, so I am going to attempt to clear things up.Firstly the council with any plan change are supposed to do a section 32 report, which is a cost benefit analysis of this plan. The original one that was done prior to the notification of the plan back in 2007 was a joke. The only numbers included in it where the page numbers. It made bland statements that the environmental gain would be fantastic and the economic cost minimal. So when the plan was notified the councillors at the time had the poor choice between continuing to spend ratepayer’s funds on the never ending development of the Plan and, as they were told by staff, “let’s get it out there and will make changes along the way as more info comes to light”. Unfortunately the councillors trusted the staff, which then stuck with their baby and fought any changes to it. Check with David Meads or Malcolm Guy for there take on it, if you like.
So , when the Plan was notified, there were no economic costing’s as to what the economic impact might be, a real failing of the RMA, which is hopefully now being addressed.
The council then went and got some economic analysis done prior to the Commissioners hearings in 2010. This work done by Neald and Rhodes, looked at 20 farms that had been modelled doing the councils proposed “FARM Strategy” Whole Farm Plan. They looked at what it would cost those farmers to implement the Plan and came up with, on average, a 5 percent increase to farm working expenses. For the farms that would struggle the increase to their expenses would be around 16 percent.
The issues I have with this report are, firstly the council making statements that no farmers would need to cut cow numbers or production to meet the targets. So these Farmer Applied Resource Management, (FARM) strategies then focused solely on what mitigating could be done to maintain production, whereas I think for most farmers “profit” is key. So for many farmers the most profitable option to meet the target would have been to reduce numbers and hence production, but because the report assumed the same production would still occur in the region, there would be no wider impact than the supposedly wealthy farmers having to spend more. However, if less production is occurring, then in theory you will have much wider community impacts, that were never considered.
Another flaw in the process was that only dairy farms were modelled, whereas the Environment Court has spread these rules over cropping, market gardening, and intensive sheep and beef, with a recommendation that extensive sheep and beef be included in the future.
The final point, which has only become an issue now, is that the new Version of Overseer has changed the ball game; the anecdotal evidence is that numbers have increased on more farms than they have decreased on. This means an average overall increase, which surely results in an increase in the costs. This still yet to be known, so what we really need is some solid data on the degree of change the new version of Overseer brings.
The other report that is causing confusion is Landcare Research’s report for the Ministry for the Environment (MFE). It was done for the Land and Water Forum, looking at the Horizons region as an example, making some analysis of the potential effects of various options in this region. The option that most resembles the current version of the One Plan and the council’s original notified version, it arrived at a reduction in farm profitability of 22 to 43 percent. Since then we have had Horizons and MPI arguing back and forth whether the impact is 5 percent or up to 43 percent. They are both right because they are both describing the same outcome in a different language.
I looked at the last couple of year’s benchmark data for this region, from the DairyNZ Dairy Base programme and if you increase the farm working costs by 5 percent the profit reduces by 20 percent, if you increase them by 16 percent then it is a 60 percent decrease in profit. You do not want to look at the year when, on average, dairy farmers all made a slight loss. That extra 5 percent or 16percent would have spelled the end for a number of farmer’s livelihoods that year.
DairyNZ are currently doing a lot of modelling work on farms to get a better handle on reductions in profit. The work they have currently done shows a 10 – 30 percent decrease in profit, but this is them focusing on farm profit, so with cow numbers reduced and production down the flow on effect will hit the rural service industry and rural towns. Once they have enough farms done they will be working out the cost on the community as well.
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Hard News: Fact and fantasy, in reply to Will Mandeville,
This looks interesting
www.biofarm.com
anyone know anything about this crowdThis looks like the NZ equivalent. They’ve been at it a while too.
Another link to it:-