Talks Fonterra FRANFRAN O'SULLIVAN PROPERTY UPDATE - NEW TODAY
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THURSDAY, JUNE 26, 2014
RURAL
NEW TODAY
FRAN
O’SULLIVAN
talks Fonterra
PROPERTY
UPDATE
■ EXCLUSIVE COLUMN FROM RADIO HOST DOMINIC GEORGE
2 Te Awamutu Courier Thursday, June 26, 2014
by DOMINIC GEORGE
COMMENT
Rural radio personality Dominic George will air his views right here every Thursday
Oh ... oh ... my eulogy was a little unnecessary
I heard a great story last week from the your favour. A few weeks ago, The opposition to the AgResearch restruc- team recommending Invermay be
godfather of New Zealand broadcasting, Farming Show received a text that read: ture, incorporating the relocation of jobs enhanced rather than downsized.
Keith Quinn. It was 19 years to the day “Jamie, Friday was a sad day for Sheep from Invermay and Ruakura to But, as we’ve seen, it doesn’t follow
since he uttered his famous line as All Farmers of NZ as we have Lost a Gr8 centralised “hubs’’. that the result will ultimately be a
Blacks wing Jonah Lomu ran over Scientist Dr Julie Everett-Hincks who The protests have been well negative one. As Federated Farmers’
England fullback Mike Catt en route to a worked for Agresearch. orchestrated and consistent but president-in-waiting, Dr William Rolles-
quartet of tries in the 1995 World Cup As you can see, it’s pretty sombre stuff ultimately have failed in their objective. ton, says: “We must not become senti-
semi-final at Newlands. — a eulogy by text, if you will. I read the Save for the occasional concession, mental over tired bricks and mortar.”
The “Lomu . . . Oh, Oh . . . ” line was text out and then pontificated in suitable especially in relation to deer research at There’s always a degree of sentimen-
actually more accident than design. tones along with host Jamie Mackay as to Invermay, the proposal has been given tality when it comes to change. Heck, I
Quinn was searching for a pre-prepared the terrible nature of someone being the green light. The majority of those was engulfed with pangs of nostalgia
line he’d included in his match-day notes taken before their time. who have voiced an opinion on this when they started turning Carisbrook to
for the broadcast but failed to locate it in Turned out, however, it was simply matter in a public forum have over- rubble, despite the creation of the
time, hence the “Oh, Oh”. Everett-Hincks’ last day at work. I can whelmingly stressed it’s a mistake, plain country’s best stadium across town.
He says it wasn’t entirely the product only imagine what her family and and simple. Many thought that was the biggest
of a lost piece of paper, as Lomu’s effort friends went through as they digested the They have been forthright in their mistake in the history of Dunedin. Some
that day did leave many people lost for information. I did manage to track her opinion that it will lead to some of the still do, but there is no better place in
words, but it certainly wasn’t entirely down, though, and can assure you she’s best and brightest this country has to New Zealand to watch the national game.
spontaneous either. It has become one of very much alive. I managed to get a very offer plying their trade elsewhere or Put simply, a mistake doesn’t neces-
the best known pieces of Kiwi sporting good interview in which she spoke quitting the profession. They may well be sarily manifest in failure.
commentary — ironic as it was two- openly of her redundancy from Invermay right, given the seemingly iron-fisted And by the way, the line Keith Quinn
thirds “sounds’’ rather than words. and that she is now starting a new approach with which the restructure has was going to use when Jonah scored
What it shows is that blunders aren’t chapter in her life. been implemented and despite even “that’’ try against the Poms: “All muscle
always costly and can, in fact, work in There has been vociferous and vocal AgResearch’s own change management and pump.” Not bad.
CONTACT US
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Thursday, June 26, 2014 Te Awamutu Courier 3
Welcome OPINION FRAN O’SULLIVAN
to our Business writers Fran O’Sullivan and Alexander Speirs call the shots here every Thursday
Millions at stake in
new rural
section
milk scare stoush
Today we launch our new
liftout, The Land, celebrat-
ing our all-important prim-
ary sector.
The Land
will be part of
your Te Awa-
mutu Courier
every French supplier Danone claims Fonterra misled it over the
Thursday.
In this first
risks associated with botulism scandal
edition we fea-
ture a monthly rural prop- It’s high-stakes for Fonterra and its rigorous internal inquiry headed by
erty update, with Tony more than 10,000 farmer shareholders Fonterra director Sir Ralph Norris. It
Verdon finding out that an as the dairy cooperative tries to halt has quietly settled claims with eight
easing of the soaring price of Danone’s multimillion-dollar action in other customers who were affected
dairy farmland is being the High Court at Auckland. when Fonterra publicly fronted up to
welcomed, plus he checks The French food conglomerate the possibility that a batch of whey
out how values are trending wants compensation for alleged protein concentrate, known as
in your region. damages of the more than half a WPC80, was affected by the
Every week, Fran billion dollars it claims to have botulinum bacteria.
O’Sullivan will turn her ana- suffered as a result of last year’s But the Norris report was also
lytical eye to the politics, botulism scare. The scare ultimately “trimmed for trial”, with any conten- Fonterra Cooperative Group em-
business matters and cur- proved false, but Danone’s valuable tious findings that could have THE DAIRY ployees provided it with “incorrect
rent affairs that are having a China trade was severely affected as exacerbated a damages claim and misleading information” in April
bearing on our rural econ- its New Zealand subsidiary Nutricea redacted from the final report. COOPERATIVE last year. This included the fact that
omy. Today she’s focusing recalled several Karicare infant for- Danone has brought four causes of the WPC80 whey protein concentrate
on the Fonterra issue. mula brands and other potentially action against Fonterra; two for HAS ALREADY was clear of certain bacteria when
A full page of data from affected products from Chinese super- breach of the Fair Trading Act and testing was yet to be completed.
Agrifax and the Metservice market shelves. two for tortious conduct. Tortious FRONTED UP Danone had been “lulled into a false
will gather together vital Fonterra is arguing that the cor- conduct is a claim actioned when a sense of security” in April and
weather, climate and market rect place to settle Danone’s claim is civil wrong has occurred, resulting in TO ITS FAILINGS continued to manufacture and distri-
information, and, on a behind closed doors at arbitration in damages against the plaintiff. The bute product. The crucial point is that
lighter note, rural radio’s Singapore. The New Zealand com- most common category is negligence, Danone alleges that Fonterra knew
Dominic George will muse pany argues that because Danone’s but the possibility of defamation could there were uncertainties about the
each Thursday on life, sport supply agreement was with Fonterra also fall under a tort claim. whey protein product.
and goings-on down on the Limited, its liability is capped at A$30 That contract however is between It also has concerns that it had to
farm. million ($32.3 million) with the final Danone and Fonterra Ltd, a subsidi- issue a multi-country recall when it
In the weeks to come we’ll settlement to be determined through ary company under the Fonterra later turned out to be based on a false
be exploring the questions a binding arbitration. Cooperative Group umbrella that alarm.
posed for the rural sector by Problem is sources close to the owns the Hautapu plant where the This month Fonterra was fined
the upcoming general elec- arbitration believe it could stretch on suspect batch originated. Danone’s $150,000 by the NZX Markets Discip-
tion, we’ll look at how qual- for another year. action lists Fonterra Group as the linary Tribunal for breaching continu-
ity issues and food scares And with Danone reckoning its defendant, skipping the web of sub- ous disclosure requirements to the
are threatening New Zea- damages totalled $544.5 million from sidiaries and commercial agreements stock exchange during the botulism
land’s global reputation, the product recalls and associated to seek reimbursement from the scare.
we’ll check out how beef and brand damage alone, it’s easy to see source. That followed a $300,000 fine from
lamb are riding the wave of why it has the Fonterra Cooperative Danone’s attorneys however the Ministry of Primary Industries
China’s growing economy Group — and a potentially much maintain that although their present after Fonterra admitted four charges.
and much more. larger damages award in its sights. claims arise from the botulism inci- Danone’s action will be far more
Let us know what you’d Fonterra’s reputation will inevit- dent, they differ from what is covered worrying to Fonterra and its farmers
like to see covered in The ably be on trial if Justice Geoffrey under the supply agreement and they than the relative slaps on wrist
Land. Our team of rural Venning allows the Danone action to should be free to pursue their case they’ve endured thus far — that’s
specialists will be pleased to proceed in open court rather than before the High Court. why the stakes are so high.
hear your feedback. wait for the outcome of arbitration. This week’s skirmishes at the High
— Dean Taylor The dairy cooperative has already Court tell the story. Fran O’Sullivan is a business columnist for the NZ Herald
Editor fronted up to its failings in the Danone’s counsel has alleged and Alexander Speirs is a business journalist for Herald Business Reports.
PROFILE
Award-winner eyes farm ownership
Sharemilker Wiremu Reid has his heart set
on owning a farm by age 30 and he’s making Hard work and intensive study are Maori are well-suited to farming.
“As Maori, we naturally have many key
all the right moves to get there.
The fourth-generation dairy farmer grew
taking an ambitious young man attributes that make us successful farmers.
We have a good sense of humour; make
up in Whangarei and moved south with his to the goal he’s long had in his light of any situation, no matter how
partner Bettina in 2009. Since then the
couple have been building up their equity, sights. Dairy farming’s something stressful; we have an easygoing attitude,
where we give anything a go; and also
making many sacrifices along the way,
hoping to reach farm ownership by 2020.
he grew up with and it is a hardness to stick it out.”
As an applicant, Wiremu was assessed
“I’m confident we’ll get there,” says the lifestyle he loves on a range of skills and qualities, including
24-year-old. “Ultimately, we want a run-off, his commitment to farming, training and
or a lease block, with conversion possi- education, expertise relative to his position,
bilities. But, for the short term, we would On June 13, Wiremu was announced community involvement, plans for the
like somewhere to graze our own stock.” winner of the 2014 Ahuwhenua Young future and personal attributes. AMBITIOUS: Wiremu Reid at the awards
The couple are in their first season 50/50 Maori Farmer of the Year competition. The runners-up for the award were 50/50 evening in Tauranga with his partner Bettina.
sharemilking 1150 cows in Ranfurly with the Sponsored by Primary ITO, Te Tumu sharemilker Joshua MacDonald, from Wai- PHOTO/JOHN COWPLAND
support of Wiremu’s parents. Paeroa, Te Puni Kokiri and Allflex, the kato, and herd manager James Matheson,
“We’re all doing a big marae-style competition, established in 2012, has become from Gore. upskill and acquire the tools to give them
partnership,” says Wiremu. “My parents an exciting addition to the Ahuwhenua To improve his business management better business knowledge.
are helping out with the wintering and Trophy BNZ Maori Excellence in Farming skills, Wiremu is studying for a Diploma in Though dedicated to his goal, Wiremu
mating. Having them involved means Award. Agribusiness Management through Prim- still recognises the importance of family and
there’s more time to do extra jobs that will He says he was impressed with the high ary ITO. The diploma is a qualification for makes every effort to take time out to spend
help us get to where we want to be faster.” calibre of the other entrants and believes agribusiness decision-makers who want to with his young sons, William and Manu.
4 Te Awamutu Courier Thursday, June 26, 2014
DAIRY POWDER PRODUCTS FAT PRODUCTS
FORESTRY
GlobalDairyTrade Previous Year Versus
Agrifax WMP Price US$/t 17/6/14 Auction Ago 5-yr Avg Agrifax Log Price Indicator
8000 120
WMP 3658 3594 4668 –5%
6000 AMF 3898 4058 4589 –13% 100
US$/t
Average 3807 3756 4598 –5%
NZ$/t
80
4000
The GDT auction last week recorded its first overall gain since
February, giving the market a much needed confidence boost. 60
2000 Volumes offered are at seasonally low levels however, and are
Jun Sep Dec Mar 40
2012/13 2013/14 2014/15 forecast to increase at the coming auctions. Jun12 Dec12 Jun13 Dec13 Jun14
BEEF OVERSEAS PRICES FARMGATE PRICES
GRAIN & FEED
North Is. Schedule This Last Year Versus
North Island Steer Schedule $/kg CW net Week Week Ago 5-yr Avg NZ Feed Grain Indicator
450 500
P2 Steer 4.41 4.41 4.03 +14%
400 M2 Bull 4.19 4.19 3.95 +9% 400
NZc/kg(net)
NZ$/t
M Cow 3.10 3.10 3.05 +9%
350 300
Beef schedules in the North Island are holding at very high
levels. Prices jumped up earlier than normal this season, due
300 200
largely to increased procurement pressure and record-high Jun12
Jun 12 Dec12
Dec 12 Jun13
Jun 13 Dec13
Dec 13 Jun14
Jun 14
Oct Jan Apr Jul
5yravg 2012/13 2013/14 prices for NZ beef in the US. Millingwheat Feedwheat Feedbarley
SHEEP OVERSEAS PRICES FARMGATE PRICES
WOOL
North Is. Schedule This Last Year Versus
North Island Lamb Schedule $/head net Week Week Ago 5-yr Avg Wool Prices
125 1200
Lamb 17.5kg 102.82 102.82 88.27 +1%
Lamb 19kg 111.68 111.68 95.88
NZ$/hd(net)
100 +1%
NZc/kg
Mutton 21kg 123.49 123.49 106.03 +1% 700
75
Lamb schedules have remained steady during the past three
weeks. It seems companies are satisfied with processing
50 200
numbers, operating reduced shifts for now. Their main focus is
Oct Jan Apr Jul Jun12 Dec12 Jun13 Dec13 Jun14
5yravg 2012/13 2013/14 on completing chilled programmes for UK customers. 29Micron 39Micron Lamb
EXPORT LOG PRICES SINK ivan.luketina@nzx.com NZX DAIRY PGI
IVAN LUKETINA – Agrifax Market Analyst Last 15 Days
A real estate slowdown in China has caused a huge correction to its at Chinese ports. Prices were forced into a downward correction to As at June 22, 2014
imported log and lumber markets. New Zealand exports over half its balance supply and demand, but with such large volumes already in
log production to China so this has resulted in a big fall in returns to the system, supply has taken longer than expected to correct. Pasture Growth Index
New Zealand foresters and exporters. A-grade log export prices have Above normal
China’s log prices cannot consolidate until imports slow and provide Near normal
fallen by 30% since March, to $87/t at the wharf gate, and are yet to
more certainty that the lower price will bring about shrinking Below normal
find the bottom.
inventories. This is expected to occur in June and July, when supply
China’s slowing real estate sales have weighed on market sentiment from the more price-sensitive sources such as Australia, Ukraine and The NZX Pasture Growth Index (PGI) is
an indicator of potential pasture growth
and tightened credit availability for developers and log buyers. The southern regions of the US is reduced. New Zealand exports will also based on three key climatic variables –
resulting slowdown in log consumption has combined with a 21% ease as winter conditions hamper harvesting and production from temperature, moisture and light.
year-on-year increase in China’s first quarter log imports to tip the marginal stands stops.
market into oversupply, approximately doubling log inventory levels
China Housing Sales vs Softwood Imports NZ log exports vs A-grade log price
200%
2.0
export log price ($/t AWG)
year on year growth
100%
100
exports million m³
0% 1.0
50
100%
2006 2009 2012 0.0 0
C
Commercial
i l housing
h i sales
l S ft
Softwood d (RWE) imports
i t 2009 2010 2011 2012 2013 2014
Source: Agrifax, GTIS, China NBS
Exports Agrade price
MORE: The information above is extracted from key reports produced by NZX Agrifax, the leading provider of specialist industry data and
intelligence on the New Zealand sheep, beef, dairy, forestry, venison, wool and grain sectors. Please contact us to view the full reports. 26Jun2014 metservice.com | graphic compiled by
www.agrifax.co.nz | info@nzxagrifax.co.nz
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Thursday, June 26, 2014 Te Awamutu Courier 5
PROPERTY by TONY VERDON
Farm prices remain firm
as economy continues to grow
Even with international dairy commodity prices falling from
historical highs, regional rural real estate markets remain stable.
It may sound odd at first, but tive purchasers.
farmers, rural economists and Values for dry stock pastoral
valuers are welcoming an easing of farms in Northland were typically
dairy farm price increases across between $500 and $850 per stock
much of the country. unit.
They say a continuation of the Mr Paterson said the dairy mar-
soaring international milk prices ket in the Waikato and Bay of
could have ultimately led to over- Plenty Regions was positive and
investment in rural property and showing signs of a good recovery in
farm prices inevitably reaching value levels in some areas. There
unsustainable levels. has been a slight increase in values
Most rural land prices remain generally.
firm, and with the local and interna- “Those areas that saw large
tional economy continuing to grow, declines post 2008 and have
prospects look encouraging. struggled since with high numbers
ANZ rural economists say from a of mortgagee or forced sales are
long term perspective a fall in milk now also experiencing good interest
prices is likely to be a good thing. in properties on the market, and a
Back-to-back record high pay- corresponding increase in sales
outs could have fostered over- volume and values,” he says.
investment, unsustainable land There had been a strong recov-
prices, and too large a supply of ery in values in the Bay of Plenty
milk around the globe. and the Hauraki District in particu-
This would ultimately have led lar.
to prices undershooting a season or The market for sheep and beef
so down the track, causing unneces- properties around Rotorua was
sary investment volatility. limited because most farms in the
So the easing of milk prices from region had already been converted
historically high levels has been to dairying.
accepted with few complaints. Mr Paterson said many of the
Quotable Value’s registered smaller properties were being
valuers point to Northland as an bought as dairy support.
example of a much improved rural The largest breeding sheep and
property market. beef farm sold over the past 12
QV’s Rural Value head valuer, months in the Central North Island
David Paterson, says following sev- was Mangaohane Station, near Tai- “There have been 22 confirmed more positive sentiment in the rural
eral years of difficult rural property hape, which sold at $553 per stock sales of properties over 300ha in economy and property market.”
market conditions, Northland was unit for 4840ha. size since June 2013, plus a number Mr Paterson says smaller blocks
experiencing a moderate increase The property also included an of others which are yet to settle. oftenhave good interest from neigh-
in prospective purchasers, which in area of commercial forest. Value levels are generally in the bouring owners prepared to pay
turn was lifting sales volume. Other smaller properties in the $500 to $800 per stock unit range, good money for land adjoining their
“With parties competing for pro- Rotorua area were selling for with good levels of interest shown own farms.
perties, this has brought an in- between $625 and $1001 per stock in most properties,” he says.
crease in values for the first time unit with the higher value being Values probably remained
since 2008,” he says. influenced by dairy farm or dairy slightly behind those seen during REAL ESTATE AGENTS IN NORTHLAND
Mr Paterson says real estate support potential. the 2007-08 period.
agents in Northland were having The Hawke’s Bay-Gisborne re- The Manawatu/Wairarapa re- ARE HAVING DIFFICULTY
difficulty finding enough farms to gion had been recovering relatively gion had seen renewed interest in
sell to willing buyers. well following drought conditions. dry stock pastoral properties on the FINDING ENOUGH FARMS
Some well-located areas had After a relatively subdued few market.
seen increases of more than 10 per years, current sale levels were “There have been slight value TO SELL TO WILLING BUYERS
cent for smaller farms that generally strong and showing a increases for this region of between
attracted a larger pool of prospec- slight increase on recent years. 2 to 4 per cent which reflected the
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6 Te Awamutu Courier Thursday, June 26, 2014
Doghouse can THE INNOVATORS with DEAN TAYLOR
be a cosy place
First-time inventor Rosie Todhunter went to keeping dogs cool in summer.
National Fieldays with a concept for a new type of She says the obvious benefit is better rested
dog kennel inspired by her late grandfather, Tony dogs, but there is a cost benefit as well.
Prentice. “In winter, dogs aren’t using a lot of energy
The Thermo Kennel is designed to keep dogs trying to stay warm, therefore they need less food,”
warm in winter and cool in summer. It earned a says Rosie.
merit award. The same applies to a lesser extent to dogs trying
Her invention is based on a design Rosie’s to get cool in summer.
grandfather made 20 years ago — a double-skinned, The kennel isn’t on the market yet, but Rosie
insulated dog kennel. reckons she could have sold plenty as she had
Rosie says it is basically a chilly bin — two skins nothing but positive feedback about the invention.
insulated with 30mm of polystyrene and a polyvinyl She has 65 people ready to buy when the product
chloride door (that’s the flash name for PVC strips comes on the market.
used on walk-in freezers and coolstores). Rosie says the benefits of being at Fieldays
Rosie lives on High Peak Station in Canterbury’s included meeting people with knowledge about
Rakaia Gorge and works for New Zealand Young production and distribution.
Farmers as project leader for the Get Ahead She has a couple of leads to follow and hopes to
Programme. have the kennels out there this year.
She says people assume she made it for her dogs She is aiming for a $500 price tag, putting her
because she lives in a cold climate, but she has only product right in the middle of the existing market.
a pet dog — although her fiance has a team of Rosie also got advice from farmers, and the DOGGONE IT: Rosie
working dogs. production model will be bigger than the prototype Todhunter.
And, she adds, an important aspect is also and able to be used with a run.
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Thursday, June 26, 2014 Te Awamutu Courier 7
TRAINING
DairyNZ teaches StockSense
Farm teams are gaining hands-on skills for “In the Healthy Udder session, most
the calving season, as DairyNZ StockSense attendees went away with a draft policy and THE SESSIONS WERE WAIKATO STOCKSENSE EVENTS
events continue around the country. a procedure for managing mastitis in their
Te Awamutu, Putaruru and Piopio will colostrum herd. There were some really INTERACTIVE, BUT REALLY ■ Te Awamutu — June, 30.
host a StockSense event over the next two good discussions about strategies to reduce ■ Putaruru — July, 1.
weeks, with workshops for both junior and mastitis.” CLEAR AND EASY TO ■ Piopio — July, 7.
senior dairy farm staff. Participant numbers are limited and Farm location will be provided upon
July heralds the start of a new calving farmers must register. Events are free for all UNDERSTAND. registration — events run from 10am till 2pm.
season. Dairy farmers nationwide begin levy-paying dairy farmers and their staff
their ‘busy period’ when calves are born and a free barbecue lunch is provided. ■ Register at www.dairynz.co.nz/stocksense
and set up as the future of the milking
herd.
The junior workshop focuses on practi-
cal skills to get staff ready for calving,
WE SEE
while the senior workshop focuses on the
new requirements for humane slaughter
on-farm and udder health.
Taranaki farmer Tim DeBeer attended
last week’s Stratford StockSense event
and said the junior workshop was practical A DAIRY FARM ASSISTANT ON
$41K IN JUST
for developing calving skills.
“I’m new to dairy farming and it gave
me a good heads-up for what to expect
over calving and how to prepare for it,” he
said.
12MONTHS’TIME
“The session on the birthing process
was really helpful. I learnt the signs and
stages of labour, how to tell if the calf is
presented properly for birth, how to use
ropes to assist if the calf is in the wrong
position and when to get the vet in.
“The sessions were interactive, but
really clear and easy to understand so I got
a heap of value from it.”
He benefited from the tips for reducing
stress over the busy season.
“I really like how the workshop pro-
vided advice for staying healthy over
calving. I actually went out and bought a
crock pot. Having hot meals ready when I
get in late from the farm sounds like a good
idea.”
DairyNZ’s animal husbandry and wel-
fare team manager Chris Leach says in the
senior workshop, farmers are updated on
the recent welfare code change which
prohibits the use of blunt force for
euthanasia of calves, except in unforeseen
emergencies.
“Most dairy cattle, including calves, are
generally not slaughtered on farms by
farmers anyway, but are sent to
processing facilities. The amendments to
the code of welfare make it much clearer
what is an emergency and what is
acceptable practice on farms when that
situation does arise.
“Farmers learnt what humane options
are available, what best practice looks like
and skills training to ensure the very best
standards of welfare are achieved on
farm,” he says.
With one year’s practical, hands-on training Taratahi graduates
take their places on dairy farms around the country with a
NZQA approved qualification under their belts, a great starting
package in the bag and a successful future in their sights.
Can you see it too?
ENROL NOW FOR
LEARNING: Dairy farmer Tim DeBeer (left)
learns about birth presentation from Joe
OUR JULY INTAKE.
Craddock from Taratahi Agricultural Training www.taratahi.ac.nz
TRACTA52276-TLTAC
Centre, who was working on behalf of 0800 827 2824
TRACTA52276
DairyNZ at the DairyNZ StockSense calving
workshop.
8 Te Awamutu Courier Thursday, June 26, 2014
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