By Bruce Wills*
The great thing about New Zealand farming is that we don’t do it by numbers.
It isn’t about doing things exactly as your parents did but improving things for the next generation.
You can say the culture in New Zealand farming is an open one.
If it can be farmed here and farmed better, someone will give it a go, conventionally, biologically or organically.
I’m no exception, as you will see on July 21 when Country Calendar comes to our farm. My brother and I do not tail our lambs yet fly strike and ‘daggy’ lambs are the first thing farmers think about when they hear ‘long tails’. Our lambs, like cattle, successfully use their longer tails as ‘fly swats’.
For those who don’t know what I am talking about and unsavoury as it sounds, the rear of a sheep or lamb has a magnetic attraction for blowflies over spring and summer. Their maggots create terrible sores that are as bad for an animal’s health, as it is for farmer morale. We have experimented with longer tails of varying lengths for five years now; some breeds having shorter tails than others. Like all experiments there are pluses and minuses but we find our lambs develop better muscling in their rear quarters, don’t have the usual ‘check’ that cutting off an appendage causes, suffer less fly strike and are generally, less daggy. The minuses are a little added time spent crutching and shearing.
I am the first to appreciate that what works for us may not work for all sheep farmers. Farming is as much a creative art as it is a science.
My point is this culture of farming innovation makes New Zealand the Palo Alto of global farming.
Look at how solid our dairy industry is compared to what’s happening around the world.
While conversion to dairy remains a big talking point here, in the UK, around four dairy farms are being forced to leave the industry every week. The worst United States drought since Ronald Reagan was president will seriously hurt feed grain production. That is significant because the U.S. dairy and beef industry is largely grain dependent.
Our dairy chair, Willy Leferink, has heard estimates a modest 0.2 percent growth forecast for U.S. dairy production could turn into a two percent drop. WeatherWatch’s Philip Duncan says half of the continental United States is now in drought and this affects the world’s largest corn crop. While this drought continues to unfold, the U.S. Farm Bill, estimated by the New York Times at nearly US$1 trillion over ten years, grinds its way through their legislature.
We farmers, especially sheep farmers, learned the hard way that subsidies distort markets and behaviour. Over the past six years U.S. dairy farmers have received something like US$4.9 billion in subsidies.
It is a similar story in Europe where hundreds of dairy farmers from Italy, Germany, Ireland and France created a milk lake outside the European Parliament. They did this to protest the phase out production quotas, farmers there blame for releasing a lot more milk onto the market lowering prices. As this lake was emptied onto the street and milk poured into stormwater drains with applause, it tells me Belgium doesn’t seem to have the equivalent of our Resource Management Act. The fact overseas is that the producer is being squeezed white. UK dairy farmers in their thousands marched on London mid-week to protest milk payouts lower than the cost of production. This is down to a vicious supermarket price war. It is a war which reached Australia last year after ex-staff from the UK supermarket giant Asda, took up senior positions with Coles. The UK’s Asda is a fully owned subsidiary of U.S. retail behemoth, Walmart.
So despite our many issues here in New Zealand, strong cooperative-led business models have helped most farmers to control their future through joint ownership of processing and marketing.
We see this in our inputs too, with co-ops dominating fertiliser and even farm supplies.
While local consumers may bemoan what they see as higher prices for meat and milk at the supermarket, the cost of food as a percentage of income has never been lower.
What’s more, they are paying the real international price that has not been gamed up or down.
Higher prices also generally mean increased returns for ‘NZ Inc’ but with the commodities wave now flattening out due to an ugly international trading environment, less pain at the supermarket checkout may mean less gain for us all.
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Bruce Wills is the President of Federated Farmers. You can contact him here »
12 Comments
Whats being said here?
1. My point is this culture of farming innovation makes New Zealand the Palo Alto of global farming.
If this were true, then would not farm incomes would be increasing, farm workers be well paid and all dairy processors (corporate as well) would be making profits.
2. So despite our many issues here in New Zealand, strong cooperative-led business models have helped most farmers to control their future through joint ownership of processing and marketing.
We see this in our inputs too, with co-ops dominating fertiliser and even farm supplies.
Most must be just dairy, is this a backhand put down of TAF?
Wool, and meat wouldn't be that happy we suggest...
And comments wouldn't apply to arable?
We would be interested in Bruce's thoughts on:
3. The large increase in dairy related farm debt 2 x's over the last 5/7 years, and corresponding small increase in production 20% to 30%. Refer some of Colin R's posts and figures ex RBNZ we have earlier posted. Add this to a payout figure dropping to levels of 5 to 6 years ago.....
4. Given the increase in dairy supply over this period, and the $$s fonterra has raised as supply shares on this new production, how well has this "flood" of funds been applied...
5. Would Bruce consider the sea change to dairy everywhere a sign of high profits in dairy, or low incomes from the other pastoral activities...
4 all 2 c:
Chinese food companies are looking to produce cheaper versions of Western foods, squeezing the margin of foreign exporters.
http://www.chinadaily.com.cn/cndy/2012-05/15/content_15291300.htm
US dairy exporters have started to feel the pinch in the past two years....
"We definitely see this trend, that Chinese dairy producers like Bright Food (from Shanghai) and Sanyuan (from Beijing) are upgrading their formulas .....," said Jiang Yan, vice-president of PR Consultants Ltd, which represents the US Dairy Export Council in China........, she admitted that domestic counterparts have edged ahead by catering to local tastes.
Country to wean itself off dairy cattle importsUpdated: 2012-06-20 09:06
By Wang Zhuoqiong ( China Daily)http://www.chinadaily.com.cn/business/2012-06/20/content_15513876.htm
Li said the great demand for foreign cattle is likely to last for about five years, after which Chinese farms will have the capacity to have the overseas breeds reproduce on a large scale.
Mengniu set up more farms
Updated: 2012-06-13 16:44
By Wang Zhuoqiong in Beijing ( chinadaily.com.cn) http://www.chinadaily.com.cn/business/2012-06/13/content_15499611.htm China Mengniu Dairy said it will invest 3.5 billion yuan ($549.15 million) to set up eight to 12 dairies by 2015 to ensure the quality of its milk supply and rebuild consumer confidence amid tainted milk incidents.Setting up dairy farms is on the top of the agenda for many leading dairy producers in China.
Bright Dairy and Food is expected to build a 130-million-yuan-farm in Wuhan, Hubei province.
A 220-million-yuan farm with 5,000 milk cows was launched last month by Inner Mongolia Yili Industrial Group.
Foreign brands also join the trend as Nestlé (China) Ltd set up a dairy farming institute at its Shuangcheng fresh milk supply base early this month. The institute has three training farms, including 10,720 cows.
Dairy companies have also received policy support from central and local governments. For example, a farm that raises more than 1,000 cows in a year will receive 1.5 million yuan as subsidy.
Fletchers into bashing low earners...( bosses expect fat salary rise)
"Fletcher spokesman Barry Akers said the firm had looked at benchmark data and rates paid through Fletcher's non-quake work in Christchurch and around New Zealand for the review. It also took into account the price of paint and other materials, he said.
Although this was the first time contractors' rates had been changed, they would continue to be reviewed under the principle of good management, he said.
Much remained to be done and there were painters there to do the work. The lower rates would encourage painters and plasterers to do more work, he said."
http://www.stuff.co.nz/the-press/news/7277683/Fletcher-cuts-pay-rates-for-painters
Let's run Bary's concept shall we....surely we could expect more work from the MPs and senior civil servants if their fat salaries were slashed back by the same %.....
And of course Barry Akers and his salary bloated fellow Fletcher bosses will do more if they are paid less....right!
Wrong union - they need to be paid up card carrying members of the Renumeration Authority, then they will be guilt free, gifting pay rises to charity when it suits.
Yes Wolly:
This is very poor form.
The mangled logic beggars belief, nothing more than corporate double speak we think...
All that can be said is the painters rates seem to be tracking the Fetchers Share price.....
$$ need be spent with care, and max the circulation locally, not ripped off/out to plugg gaps in unrelated areas/locations in a corporate model not doing that well...
EG. why should Chch rebuild spend help out business activities in Ozz.
Ling going speaks...
Jonathan Ling, chief executive of the country's largest-listed company Fletcher Building, is stepping down after six years at the helm but won't receive a huge settlement when he leaves on September 30.
http://www.stuff.co.nz/taranaki-daily-news/business/7126711/No-big-payo…
here is an investor presentation:
http://www.asx.com.au/asxpdf/20120503/pdf/4261bkpstljc5p.pdf
look at page 22 and page 23 for before and after pictures of Christchurch (thou form different view sides we suggest), implying the $$ they will make out of/off the back of the quake by noting rebuilding Ch/ch a priority for govt. infrastructure expenditure...
other items worth a look:
http://www.asx.com.au/asx/research/companyInfo.do?by=asxCode&allinfo=&a…
The problems of any business is the overheads. Those over head want more and they want the workers to get less.
And now Fletchers for example want to paint the town red, but with the blood and sweat of the painters.
And your analogy about MP's and Civil Serpents Wolly, fits in with my philosophy of running any business.
Lead by bleedin example. Not by do as I say....not as I do.
Sucking the blood out of a business is the current problem. Precisely why workers are being laid orf in droves.
But not the Management that got them in the predicament in the first place and thunk that it will all get better soon...borrow more....give it time....and no workers...ala....NZ..inc
A funder-mental....ploy.
A wee bit like the Olympic Security Issue. Gormless overheads.
As kiwi touring Europe for the last 30 months mainly looking and comparing farming in the EU. At present spending 10 weeks on a number of farms in County Clare, west coast of Ireland. Had lunch with a progressive beef breeder and dairy farmer yesterday, he opened his mail which included his milk cheque for €4240, not bad monthly income from milking 38 cows. We discussed his gross income which is approximately €110,000 pa made up of EU subsidies totaling €60,000, €50,000 milk income, €20,000 beef income. We discussed how long he thought the subsidies would continue for, he said, forever..... Good if you can get them, eh. Don't let me start on the French farmers subsidies, no wonder the EU is down the gurgler, or have I missed something?
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