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Are capacity utilisation and processing costs part of the beef problem, and if so, what is the solution, asks Keith Woodford

Rural News
Are capacity utilisation and processing costs part of the beef problem, and if so, what is the solution, asks Keith Woodford

By Keith Woodford*

I have previously analysed data from consultants GHD on capacity utilisation and processing costs in the sheep industry.

These GHD data underpinned the major Meat Industry Eexcellence (MIE) recommendations in their recent Report.

However, whereas MIE focused on the need for amalgamations, I showed that the crucial evidence was the exposed position of Silver Fern Farms relative to other processors.

The overall cost leader was Ovation, which lies outside the ‘Big Four’.

Here I analyse the beef processing costs to see if a similar story emerges.

The simple answer is that for beef, as with sheep, there are big differences between the industry cost leaders and the rest.

Once again, Silver Fern Farms appears to be one of the laggards, but it is not there by itself.

The small Te Kuiti-based UBP company, owned by American Taiwanese and registered in the Virgin Islands, is the apparent cost leader. [Correction: I am advised by UBP Managing Director Roger Stewart that the ownership came back to New Zealand approximately five years ago.]. It has combined variable and fixed operating costs about 16% less than most other operators. They are described by GHD as the ‘best practice’ company.

In the sheep industry, processing capacity utilisation has been declining as a consequence of declining sheep numbers, and it is now only 47%.

However, for the beef industry, although in recent years there has been some minor decline in capacity utilisation, the consequences have been less severe.

Across the industry, capacity utilisation as estimated by GHD averages 59% and ranges from 33% (Taylor Preston) to 75% (ANZCO).

GHD proposes that six of New Zealand’s 27 export beef facilities should be closed.  It estimates that this capacity utilisation across the industry would rise to 70%, with individual firms then ranging from 33% to 79% capacity utilisation.

GHD believes that with overtime worked when necessary, there would still be sufficient capacity to meet peak seasonal demands. The estimated saving in operating costs is $30 million per annum.

This potential for savings appears to be based on an unstated assumption of a typical year and to ignore regional peaks that differ from national peaks. So the assumptions do look somewhat troublesome, particularly as they apply to some companies.

GHD estimates that implementation of best practice could save $60 million per annum. This is double the savings from closing facilities. However, this separation tends to be lost when the findings are subsequently used within the MIE report.

This lack of separation has implications, given that getting all facilities up to optimal efficiency will not be easy. It will require writing-off some existing equipment and it will require considerable new investment. There is no evidence these costs are included.

It is also possible that GHD has miscued in regard to the improved capacity utilisation for Silver Fern Farms, which is the biggest beef processor. GHD recommends that Silver Fern Farms should close just one medium sized beef plant (Waitoa), which from GHD’s data has 11% of the Silver Fern Farms’ beef processing capacity, but that this will somehow decrease subsequent processing capacity by 20%. Those numbers do not add up.

Unlike the sheep industry, for beef processing there is no one company that stands out as the weak link.

Instead, there is evidence that most of the companies have a mix of high cost and lower cost plants, with the best quartile of facilities having labour costs about 25% lower than the rest. For commercial reasons, each facility with its labour costs is identified only by a number rather than by name and location.

Despite all of the above, and the evidence that Silver Fern Farms has operating costs similar to many other companies, it is inevitable that much of the focus will now be on Silver Fern Farms.

This is the company that has been struggling the most, in part because of its sheep operations. It is also the company that is currently seeking $100 million of new capital.

In beef it is the largest of the processing companies with a 32% share, whereas in sheep it is only second at 25%.

Whereas many of Silver Fern Farms’ sheep processing facilities can be regarded as surplus to national capacity, Silver Fern Farms’ beef processing capacity is vital.

It is in that context that the decision by Silver Fern Farms in late 2014 to restructure its sheep and beef as separate business units has clear strategic implications. Given that some of its facilities such as Finegand in South Otago are multispecies, that decision will not have been made lightly.  

Silver Fern Farms and its bankers can be confident that someone will eventually decide to buy the SFF beef business once the sheep business is clearly separated.

It could be a Brazilian company or it could be a Chinese company. Or it could be a mix of existing New Zealand companies that each purchase particular beef assets, and perhaps also some of the best sheep assets. Only time will tell. But that time is now not far away.

Indeed the bidding process has already begun.

However it turns out, it will be like an earthquake in the red meat industry.

Given that Silver Fern Farms is New Zealand’s largest combined sheep plus beef processing and marketing company, it cannot be any other way.

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Keith Woodford is Honorary Professor of Agri-Food Systems at Lincoln University. He combines this with project and consulting work in agri-food systems. He will be writing a regular column here. His archived writings are available at http://keithwoodford.wordpress.com

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24 Comments

Yes and so the dominos begin to fall. Private companies buy the assets at concrete prices restructure and transfer the benefits to their share holders. The pressure then goes on the next weakest link Alliance. Slowly the Co op shareholders realise their losses and loose control of their industry along with the benefits.

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Bang on Zeebeck, sheep and beef farmers want a genuinely profitable future they need to step up and sort their co ops out before its too late. Alliance's head in the sand approach will see it wake up one day to having a well resoursed multinational on its back doorstep who will blow them out of the water in a couple of years leaving farmers as vulnerable price takers. Wakey wakey Alliance directors.

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As Fonterra has proved this year, if the sheef and beep farmers want genuinely profitable future they need to create and retain control over their whole production and distribution chain, or risk the marketing and value-add portion taking everyone by the short and curlies.
 Only the farmers truly have the farmers best interests at heart.  and it's in the farmers best interests to see the rest of the production chain is efficient.  Put the corporate in charge, and it's in the big salary people interest to see the farmers are paid as little as possible and other peoples wages are tight rationed and that shareholders get minimum possible, while growing the "company toys" (eg asset holdings and processes) as much as possible.  (known as empire building).

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I think more small companies are the future of NZ beef and lamb. We need there to be competition for procurement, but smaller  high tech plants (robots rather than people that can run 24 hrs.)  I don't think one big company will try and take over the industry and screw the farmers, because it will just shrink the industry more. I may be wrong, but i just don't know if sheep and beef NZ suits the corporate model. it's going to be more boutique than corporate.

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Without control of the marketing end the farmers end up as the ultimate price followers.
Just like the guy in Taranaki who setup his own local butter company - the competition just went around all the supermarkets and gave away free samples of their butter product until he went bankrupt.
 Because he was a farmer and working with other farmers they didn't have income from outside the system to keep them liquid against the barely legal antics of their competitors.  Likewise they couldn't get support from other farmers, all of whom were in debt and over committed to those same under paying competitors  - as long sa the processing/marketing companies never quite paid enough it ensure the farmers could never get the funds to compete.
 It a system known as a water empire.

Remember the story about how a person sets up a business carrying water for people to the village with buckets. (saving them time and hassle of doing it themselves).
And he hired staff to carry buckets for expansion, and then tanker drawnwagons.

And along came another clever person who realise the service required was easy reliable access to quality water - so he raised funds with shares and bonds - dug a pipeline, allowing him to under cut the huge person architechure of the earlier water carrier with a better capital investment (which he could then spend on improving the product) but best of all the overheads per productivity unit had gone down, making him very successful.   (of course, not so good for the old staff, but those profits have to come from somewhere).  But prices could drop and be passed on to consumers and businesses.

In the water empire however, the pipeline owner is only successful for as long as he's got the only pipeline in town - while he's the price settor and the resource owner.

A large multinational comes along, takes half the river for bottled water - then what is left isn't so cheap to supply for the village, and a multinational with deep pockets and shareholders with income from elsewhere can just put in their own pipeline to the village, and tap the equipment their need for their outside purposes.  The supply to the village becomes a co-product (or by-product) of the river harvesting process, so there is no need to pay shareholders or local service suppliers, so they can under cut the pipeline and the water carrier.  This means all those profits that the local pipeline guy AND all the wages of the staff _AND_ all the velocity of money (trickle down/up) from those locals goes overseas, now that water is a commodity for elsewhere.  Thus the pipeline water empire collapses with introduction of outsider "foreign investment".
  As history has repeatedly shown when the multinational wants more it is the village that suffers and when the multinational has destroyed the site or local economy or the market dries up or loses a battle the village is the one that does not have the water or water infrastructure.

But hey, NZ government tells us "foreign investment is good" so it must be true (for someone?).

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I agree cowboy, i think this is where the government needs to only approve foreign investment that's in the interests of the industry, discouraging anti competitive behaviour.. I think Bill English was quoted as saying the price the Chinese offered for Lochinvar was a good one. Personally I don't think price should be a factor when the OIO decides on overseas Investment. (that's called selling out).

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The entire purpose of the OIO was setup exactly for that.  So big bucks foreigners wouldn't be able to buy into NZ without strategic advantage to NZ (Technology or skills not available any other way).    I don't know what games were played, and I don't think we'll ever find out where the money and favours were (I have my suspicions).    But with most of NZ more interest in whats on shortland st or other tv crap or facebook/app-games, whats the point, 

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Put the corporate in charge, and it's....

 

The breakfast cereal giant Kellogg’s, which routes a huge chunk of its global revenues through Ireland, has warned investors the international clampdown on corporate tax avoidance could have a “material impact” on its finances.

An Irish Times analysis of its accounts reveals the US giant, whose brands include Rice Krispies and Coco Pops, has directed more than €7.1 billion in sales from Europe, the Middle East and Africa through Dublin-registered Kellogg Europe Trading (KET) over the last five years.

In that time it has paid corporation tax in Ireland of only about €7 million, because KET is often loss-making due to large interest bills on loans it receives from a Luxembourg-registered cog of the Kellogg empire.

http://www.irishtimes.com/business/economy/kellogg-s-pays-7m-tax-on-7-1bn-sales-moved-through-state-1.2166810

 

structure design needs recognise the business environs for what they are and retain resilience to withstand focus from such other groups.

 

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Henry - here's a bit of reading for you - a bit closer to home - and it's ongoing - and you can follow it next week as it unfolds

 

Tax Avoidance and Profit Shifting in our backyard

It's happening - it's just not a problem yet - until dairy prices tank

 

http://www.members.optusnet.com.au/~iconoklast/evasion.htm

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Good to see you back Shaggers, how was summer? I hear it got a bit dry down your way, had a pretty cruzy time up with us in Hawkes bay. California is wet and cold, must be spring.

 

Believe it or not when I was a young man, I did a season in the meat industry for HB Farmers Co-op or was it Richmonds, anyway SFF own it now. The Plant was full of conflict and waste. We had supervisors every where, no trust and using your own brain was out of the question. I started at 5.30am and finished at 6pm, all day out of the sun, money was good, as good as they pay today due to overtime. Union was strong and the company deserved what it got. It completely changed my view of the meat industry and I still have my union card.

 

We made some very poor management decisions and I think it's always going to be a problem. We elect farmers onto a board but only a few understand whats going on, others become megalomaniacs and join the Kleptocracy.  

 

As you can probably tell by now I'm not impressed with farmer management in NZ. Although I'm often wrong and prone to not thinking things through well enough. There must be and have been some very good farmer directors I'm just not sure they were good enough and often stayed past their 'best before date' and were unwilling to make tough decisions regarding management and instead focused on cost cutting on the plant floor.

 

 I have a few thoughts on the meat industry, my first concern is that we cannot undo the past. There have been some very poor decisions made and this goes for Fonterra too, and now we get to deal with the results, we cannot undo them. The debt is a huge problem and it's been a problem for years and years. Companies like AFFCO survive till the next management stuff up, then get slowly absorbed into other enterprises. SFF should never had ventured onto Richmonds turf.

 

The industry was competitive enough to make it hard for debt repayment. I remember talking to John Fallon years ago about the debt in the industry and it was obvious then that the government was following the industry with its 'troika' of banking partners very closely.

 

I was in the meat works when the cutting room was expanding, boning was the rage. It was quite slow work, tedious and repetitive like the rest of the plant. When I worked in the Southwest of England we used to go to an old butcher shop. He had NZ lamb carcasses hanging out the back, we ordered the cut we wanted and he went and cut it for us. He didn't want to move to pre-cut packages, he liked whole carcass. I wondered then about the investment in boning rooms, this was in the early 80's. Was it what the market really wanted or were we better off staying with low cost killing plants and supplying whole lamb carcasses.

 

I think today we should get out of cutting carcasses, NZ is too expensive to compete in that market, if it needs to be done, do it somewhere else, survival of the industry will create a lot of unemployment in rural NZ. We have been victims of changing eating habits, changing retail and the birth of the super supermarket, change in demographics and change in living standards and work structures.  I'm just not sure that our lamb market fits into that very well and I'm not sure how we will fare dealing with the Middle East but I think we are better keeping preparation in NZ to a minimum.

 

I had dinner last week with a friend who is a Marine Engineer, he tells me of new wharfs that are fully automated, one man on a crane to watch over forklifts and loading equipment, all self drive and fully automated. Like the new milk drier in France which is fully automated. So who will pay the workers and what will they be doing and how much will they be able to afford to buy? Who will consume?

 

I'd be more worried as a farmer with what low interest rates are doing to investment in North America and the EU, their production is going to increase and they will be very competitive as interest and debt servicing is so low its a minor consideration, unlike the rest of us where its often our biggest cost. The low cost of funding will make them super competitive especially as automation creeps in. Self drive tractors are starting to arrive, automated flour mills. Automation is going to be the big thing for a little while.

 

I've got a meeting with a guy who is involved with a large 9k head dairy beef fattening feedlot in California, should be interesting.

 

Today we supply China and what with, whole carcasses.

http://www.maersk.com/en/the-maersk-group/about-us/maersk-post/2014-5/c…

 

The Aussies have lower production costs than us.

http://www.abc.net.au/news/2014-06-17/wa-meat-exporter-signs-1bn-export…

 

Europe is looking at China as an export market.

http://www.tanjug.rs/news/172088/serbian-lamb-meat-soon-to-go-on-sale-i…

https://www.gov.uk/government/news/negotiations-begin-for-120m-china-be…

 

Automation, remember when we first got automated tellers?

http://www.urs.com/projects/port-of-long-beach-pier-g-terminal-redevelo…

http://www.simscript.com/solutions/transportation/Automated_Port_Facili…

http://www.thecattlesite.com/articles/4219/calf-rearing-tips/

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when they're farmer board they're good.  when they become landlords for farms and professional boardsitters they add nothing but glee votes.

 

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Given companies like Fonterra using fully automated warehousing I'm surprised it took that long to get it to the container/prot system.  Cost of scale I suppose, and downtime availability windows.

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More smaller companies may work for sheep and beef farmers if they own them under a strong cooperative structure, but if they are owned by non-supplying investors the farmer will always be treated as a cost to be minimised. 

I agree with cowboy, and would say that Fonterra and SFF are cooperatives in name only, and not models to aspire to if you want to create a long term strong stable industry for farmers and their communities benefit. But if the recent debate around the wool sector is anything to go by, I'd say sheep and beef farmers have no idea about the benefits of controlling their product as oppossed to relying on external investment to process market, and reap the rewards of their labours.

AJ, I thought there was a recent article in the NY Times about a severe 4 year drought in California, and the demise of crucial ground water resources?

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Thinking on those lines, and looking at Fonterra et al.  It might be better for sheep and beef farmers to go direct for the sales and marketing point, get themselves a farmer board, to setup a multi-suppler supplied marketing platform, and use that to sell to market at their prices.   
 That would mean seetting up something greenfields new, which will be easier in the existing climate, and then suppliers or private coops could contract to supply at agreed prices.  Sales could be streamlined to provide pass through of margins, while maintaining control of the sales process.
 This would give farmers direct access options to customers, give a united front, and stop the corporates splitting off the cream/fat.

Then the processing companies could either continue their existing supply arrangements and compete against an organised co-op, or they could agree to supply to a farmer owned market point - think electricity trading market, or gDT.

I think the farmers would be far better served coop-ing and setting up a red meat, and meat, gDT, and inviting suppliers, than trying to stuff the hydra's heads in a single bag, with each corporate wanting to be the next Fonterra.   That way the coop can set their rules, and opt-in through market pressure.

And any processor can join - putting processors in the bidding seat rather than the processor-marketers power seat which they now control.

Also a trading market is easier and cheaper to build that processing plants and far more mobile for a co-op in the future.

IMO.

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That's interesting, freezing companies will  usually give priority space to individual suppliers rather than a Wrightsons agent with a list of clients looking for a best price. I think if you are selling something you all ways have to meet the market. If there is a drought on under the current system, the works will pay only what they have to, to secure the stock. The foreign buyers can also see that there is a drought on and that the works are not paying as much and therefore try to squeeze their margin. If farmers joined a farmers cooperative would they get priority space in a drought? I wonder though if farmers should get together to fight councils? We face so many vague rules today, that leave us in limbo, farmer groups should sue councils to get clarification on some of the airy fairy rules we are faced with. It's a shame federated farmers do nothing.

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tim12 re Fed Farmers.  Our region is always sending us emails for comment on councils plans etc.  Do you not get them or are you not a member?

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I think the whole system is a mess CO. Let me give you an example. A farmer I know (under neibouring council) has been asked to fence all his waterways on the hills. He is freaking out! If they enforce he believes he will be out of business as his farm is full of difficult gorges. On the hill farm i run we have not been asked to do this. ( different council) Seem fair? Someone else i know is trying to figure out what they can do with the cleaning of waterways, they got a consultant to study the rules. One rule says they can do it, another says they can't? I think rules about water should be standardised and nationalised, I think itt's a crazy system that we have where we are at the mercy of local power trippers, or not depending on who you have to deal with.

 

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I understand where you come from Tim.  However I disagree about national/standardised rules.  I am very involved with water quality in our local catchment.

 

To start, I will give you an example of where a national promotion for a dairy effluent WoF is being promoted.  It is a voluntary option being promoted by the industry. It started off as a well meaning response to a 'sort your industry out or we will', threat.  The problem that I have with it as a dairy farmer is this:

* It is promoted by the north island advocates as 'only' costing $5-700. In the deep South that cost is actually $8-1000.

* In Southland the majority of the dairy effluent consents are no more than 4 years old and Southland has had tougher standards than many Regional Councils for effluent systems for many years. (We have learnt to live with them. ;-) )

* Southland accredited assessors have said, on farm, that the system is not likely to be a successful revenue earner for them due to consents in Southland being either recently renewed or new.

* In a Waikato catchment there has been around 700 farmers who have paid $500approx to have one of these assessments done.  Well done to them.  They operate under quite different rules to what I do and frankly IMO Environment Waikato (EW) have been behind the 8-ball when it comes to environment policy on farm for a very long time, and only recently are trying to play catchup.

* What maybe needed in the Waikato in regards to effluent WoFs is not needed in Southland. Our industry should not be promoting it as a national objective.  ES conduct at least one visit every year on dairy farms looking for  effluent consent breaches and taking water samples.  EW mainly rely on flyovers for detection and I am unaware of their water testing requirements. EW have around 4000 dairy farms ES 1000.

 

But getting back to water.  We need to stop worrying about what happens in a neighbouring council area and concern ourselves with our own catchment.  In the catchment I farm, some farms are almost impossible to sell. Some farmers, more sheep and beef than dairy, have had $1m+ wiped off their equity, due to the fact we farm in the Waituna catchment. Some are pinning their hopes on a land buyout by Council and/or DoC as their farms are virtually unsaleable. IMO that won't happen.  What their options are (they are desparate to retire), I don't know as simply there is such a stigma attached to their particular location despite what the price is they may never find a buyer.

One of the problems with national micro policies is that not all waterways have the same problem. Some are sediment limited, some nitrogen and some phosphorus.  In my catchment one half is nitrogen limited and one half phosphorus limited so a one size fits all policy would be detrimental to the overall health of the waterway.  We need a tailored solution. 

 

The non dairy farming sectors have been very poorly supported by their industry when it comes to environmental issues.  The dairy industry has DairyNZ that will assist us in taking on Councils, whereas the non dairy sector has until very recently had their heads in the sand, and believed the myths put forward by media that it is the dairy industry that is solely responsible for water quality issues.  

Now some Councils are reacting with knee jerk reactions while others, such as Southland, are taking time to consider what the economic and social impact on their communities will be if they implement a,b, or c.

They looked at fencing off all waterways - as it is a predominately sheep and beef region, they state that sheep and beef have a much bigger role to play than dairy in water quality. However they did the economic analysis and realised that if ALL sheep and beef farmers had to fence off all their waterways, the policy would be responsible for many farmers having to leave their land as it would break those ones, economically.

ES had indicated that it was going to make any development work on slopes at or over 20% on hill country, or 200m above sea level would need a resource consent and over 700m asl would be prohibited.  Hardly a peep was heard from hill country farmers. Then when ES notified that the day of implementation of their policy was almost upon us, the hill country farmers woke up and roared.  It wasn't like it hadn't been flagged earlier.  Consequently ES was shown the error of it's way over the 200m proposed policy - just because a lot of Southland is flat, it doesn't mean it is at sea level and in regards to the 20% rule the entered in to real consultation with farmers.  

 

We have to take responsibility to remain aware of what impact Councils proposed policies may have on us. We also have to be prepared to get involved as individuals.  Many farmers in Southland are proactively setting up catchment groups to find out and attempt to address water quality issues as a community rather than be dictated to.  Local solutions for local problems is the only way to go if we don't want to end up with rural communities being torn apart by water quality issues.  And even then that isn't guaranteed. Fed farmers is only as good as it's membership support and their membership sub and advice is usually significantly cheaper than employing costly consultants..

 

Business as usual is a thing of the farming past - the future will require flexible thinking. Family farms are an endangered species and in my grandchildren's time family farms could well be as rare as tuatara's breeding in the wild in the South Island currently.

 

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Yeah interesting stuff, thanks CO. I just think the whole thing is out of hand. I had visitors staying from England the other day who I was talking about our environment regulations with, they seemed genuinely surprised and said that our rivers were the cleanest they'd seen.

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I have just been reading some regional council  water quality reports on different rivers in our region. The glaringly obvious thing to me is that the lowest flowing rivers in the region are the highest in ecoli. Which makes me wonder if some of our expectations of water quality are unrealistic. It will be interesting if after millions is spent on town watewater schemes, fencing of waterways etc if there will be any great measurable difference in water quality. Very obviously the less the water level a higher the proprtion ( by volume) of pollution in rivers will all ways exist. With hill country farming how are the nutrients washed into the rivers when it's very dry (without rain), and yet rivers are the most polluted when flow is low. If hill country farming was a huge contributer to water pollution should not the rivers be more polluted in the winter when nurient run off would be higher?

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expectations of water quality  You have hit the nail on the head there. That is going to be interesting to watch in the future.  Some regional Councils are now looking to level the playing field between urban and rural consents - that is no one can have 'exceptions' that allow them the ability to pollute like many urban sewage schemes do in times of high rainfall, or an ability to have x number of ocassions where stormwater contamination is allowed. (Queenstown is a perfect example of this.) Another example is a historical landfill that is leaching all sorts of nasties in to a waterway. Until now, the urban council responsible for this landfill has not had any consents requiring it to mitigate the leaching.  But now the regional council is saying - one rule for all, so you are on notice. There is also an acceptance that for some smaller communities the cost of sorting out stormwater and sewage will be greater than the community can bear.  An example is Ohai in Southland.The small community there cannot sustain the cost - so who should pay - all ratepayers in the Council area or do we just wind up Ohai and force the locals to relocate?  

 

The question was asked of ES at a public meeting - What is the condition of lowland waterways? The scientist answered - On which day?  They then went on to explain that when there has been no rain the water quality is better than national standards.  But it is a different story when it has rained.  That is part of the complexity that is water quality.  

 

With regards to e-coli.  Things to look for are: is there any native bush/forest adjoining farm land that also have waterways going through them? We have farmers down south who have been able to prove that e-coli is present (and at what level) in water that is coming out of bush/forest.  You probably don't want to hear this ;-) but some waterway e-coli has been much improved once a farm has been converted to dairy and all the streams fenced - especially if cattle were also farmed. What is the population of birds/waterfowl like?  Canada geese?  The e-coli readings in our duck pond are highest in April when we have heaps of ducks there. (they seem to know when opening day is and mostly disappear).  Septic tanks not maintained (these can be from small rural communities to on farm systems), community sewage systems, industrial plants e.g. freezing works - how is their stock effluent handled? etc E-coli can come from many sources and they can also determine what type of species it has come from.  So ask your Council. :-)

 

If hill country farming was a huge contributer to water pollution should not the rivers be more polluted in the winter when nurient run off would be higher? Not necessarily, because there would be more water volume in the waterways to dilute the effect of nutirients. How quickly it flows to sea is also a factor that needs to be taken in to consideration.  Some areas like Taranaki/West Coast have short runs to the sea so the nutrients don't stay long in the water.  Others like Southland have long slow runs. Some aquafer water takes only weeks to reach surface water some take decades.  Soil types have a huge part to play.  So in the end in comes down to understanding your various on farm soil types and getting a nutrient budget done to see just what and at what level nutrients are running to water and what are going to air, and taken up by plants.  Once you know that, then you can start to look at your farming system to see if you need to make changes and what they may be.  Crops can be big leachers of nutrients - some more so than others.  Just the way you graze a herd in winter on sloping land can make a very big difference etc.

 

Landcare Trust is an invaluable organisation for assisting farmers and especially in guiding farmers setting up catchment groups. http://www.landcare.org.nz/  

Tim I am happy to correspond with you off blog if you want.  Just ask David for my email.

 

 

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Omnologo,  The drought is worse up against the mountains.

 

http://www.capradio.org/articles/2015/02/19/above-normal-temperatures-m…

 

 North of Sacramento there was good rain last week, over an inch. We also had 14-18" of snow.  Its when you get down by Tulare and up agianst the mountains to the east that you notice how dry it is.  Some big dams have good levels and they are holding flows back but rice planting starts soon. Other dams closer to the mountains have had very little rainfall.

 At the end of this weeks dairy report is an article on the drought.

 

http://www.milkproducerscouncil.org/updates/041015.pdf

 

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Great suggestion

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