Lamb schedules were steady this week, but processors report prices are expected to ease after the Easter chilled program ends this week, after procurement pricing was required to secure supply and meet regular customers needs.
Shortages have kept prices above last year even with the unfavourable currency and this is certain to have affected processors margins which will need to be rebalanced at some stage.
Forward sales of frozen product look reasonable, but with this year’s kill behind the norm (13.2% back on last January), increased supply could pressure prices to some markets.
Good rains have fallen into the dry areas of the North Island reducing the amount of stock offered to slaughter, but increasing facial excema spore counts will complicate managers stock trading decisions.
The board of Blue Sky Meats now supports the $2.20/share takeover bid as another NZ meat processing works falls to Asian investors, and they have urged the remaining shareholders to accept the offer.
The South Island leads the north in local trade prices for both lamb and mutton, although returns from prime lambs sold via the saleyards has evened out.
A new study into the economic and environmental impact of implementing onfarm stock water systems on hill country farms has revealed excellent financial returns from this development.
This week’s small South Island auction saw prices lift as growers held back supply in a bid to stimulate the market.
Crossbred indicators rose by 17-21c/kg clean and passing’s were at the lowest seen in the last two months.
Some report that values appear to have bottomed, but the double island auction next week rostered to sell 16,000 bales will reveal what volume these prices will sustain.
In Aussie, superfine merino wools (18mic and finer) are floating in record territory as demand for quality fine fibre seems to continue unabated.
Wool Industry leaders debate whether the future for crossbred wool is in research to find new high value products for the fibre or by promoting the benefits of wool.
Another week of steady schedules for prime and further lifts for bull beef, as processors look to acquire stock before the bull production season ends.
Like lamb, beef processing figures are well back on last year, lead by reduced numbers of dairy cull cows.
The beef weaner sales are about to start in the north and expectations are strong that the high prices achieved for dairy beef animals will be able to be replicated.
Allied Farmers report their first half profit has fallen on the back of a lower bobby calf kill, as more animals are reared to meet the demand from the beef sector.
The new water legislation plan has been announced by Government and it appears sheep and cattle farmers will be facing extra costs to fence off waterways like their dairy counterparts have had to do.
Venison schedules lifted again this week as old programs run out and demand builds for a shortage of stock.
Alliance is offering a minimum price contract for animals until the end of April, as they look to share the risk of venison pricing itself off the market, compared to other animal proteins.
Weaning will have started in many areas and the race to meet spring liveweight targets has begun for venison finishers.
A new government drive for 90% of New Zealand rivers and lakes to meet swimmable water quality standards will see farmers required to install 56,000km of extra fencing - enough to circle the globe one-and-a-half times.
Environment Minister Nick Smith and Primary Industries Minister Nathan Guy announced Thursday the new goals for clean waterways, which are estimated to cost the government, farmers and councils $2 billion over the next 23 years.
New regulations specifically to exclude stock from waterways are expected to see costs of $367m, Smith said. The rules progressively apply to dairy, pig, dairy support, beef and deer farms from this year to 2030 relative to the steepness of the country, he said.
Read the Ministry for the Environment's draft regulatory impacts assessment of the regulations here.
In the document, officials say the stock exclusion option chosen has a lower cost-benefit ratio than other options considered, but that it would deliver the greatest environmental effectiveness. Total benefits are estimated at $983m, the Ministry for the Environment document shows.
The option chosen imposes the highest cost on farmers of all options. The document noted the burden the requirements will place on farmers: "For example, phasing in fencing and reticulation requirements for beef cattle over 10 years will result in costs of $5,391 per year and represent around 9 percent of the industry's five-year average profit."
The government's 'swimmable' target is based on meeting the water quality standard at least 80% of the time, in line with European and US definitions, Smith said. Currently 72% of rivers and lakes by length meet this definition, he said.
Read the announcement from Primary Industries Minister Nathan Guy below:
New freshwater reforms will result in 56,000 km more fences protecting New Zealand waterways from stock – enough to go round the world one and a half times, says Primary Industries Minister Nathan Guy.
The new rules on stock exclusion are part of the Government’s plans announced today setting a target for 90% of rivers and lakes to be swimmable by 2040.
“Farmers have made huge progress in recent years to improve their environmental practices and this will be another important step forward. Dairy farmers have already voluntarily fenced off over 24,000km of waterways,” says Mr Guy.
“We know that stock standing in or regularly crossing waterways can do significant damage. While dairy farmers have voluntarily fenced off around 96% of their waterways, we want to extend this to other types of farms as well.
“The proposed national regulation would ensure that dairy cattle, beef cattle, pigs and deer are kept out of waterways.
“We need to ensure the changes are practical for farmers, so the exclusions would be implemented in a staged process starting this year through to 2030, depending on the stock type and land slope.
“There are long term benefits for the primary industries and wider economy from these reforms. Overseas markets and consumers increasingly demand a strong environmental performance over and above regulatory requirements. In this context, protecting New Zealand’s natural advantage has never been more important.
“No single organisation or group is solely responsible for improving our water quality. Meeting the target will take a collective effort, but the primary industries have a key contribution to make.
“In the meantime, the Ministry for Primary Industries continues to work with the primary sectors to invest in good ideas which promote environmental best practice. One example is the Farm Systems Change program, which identifies high performing farms and uses farmers’ networks to spread their knowledge.
“Another is a major programme under the Primary Growth Partnership, called Transforming the Dairy Value Chain. Under this programme effluent management systems have been improved, and every region now has a riparian planting guideline developed in conjunction with regional councils.
“As a Government we are committed to growing the primary industries at the same time as improving water quality. Water storage schemes like Central Plains Water and the Waimea Community Dam help in this by taking pressure off groundwater sources and maintaining summer river flows, delivering both economic and environmental benefits.
“We also know that science will play a major role in improving our freshwater. The ‘Our Land and Water’ National Science Challenge is investing $96.9 million over 10 years into this, hosted by AgResearch and involving six other Crown research institutes.
To read the proposals, and find out how to have your say, visit www.mfe.govt.nz
Read the announcement from Environment Minister Nick Smith below:
The Government today announced a target of 90 per cent of New Zealand’s lakes and rivers meeting swimmable water quality standards by 2040, alongside releasing new policy, regulations, information maps and funding to help achieve the new goal.
“This ambitious plan to improve the water quality in our lakes and rivers recognises that New Zealanders expect to be able to take a dip in their local river or lake without getting a nasty bug,” Environment Minister Dr Nick Smith says.
“The plan is backed up by national regulations requiring stock to be fenced out of waterways, new national policy requirements on regional councils to strengthen their plan rules on issues such as sewage discharges and planting riparian margins, a new Freshwater Improvement Fund and new maps that clearly identify where improvements are needed.
“This 90 per cent goal by 2040 is challenging and is estimated to cost the Government, farmers and councils $2 billion over the next 23 years. It will make us a world leader in water quality standards for swimming, and that’s important for New Zealand’s growing tourism industry. It will return our rivers and lakes to a standard not seen in 50 years while recognising that our frequent major rainfalls mean a 100 per cent standard is not realistic.”
The target covers the length of rivers over 0.4m deep and the perimeters of lakes greater than 1.5km, which total 54,000km. The plan is about improving the frequency that we can swim in our lakes and rivers, noting that even our cleanest rivers breach swimming water quality standards during storms.
The swimmable target is based on meeting the water quality standard at least 80 per cent of the time, in line with European and US definitions. Currently 72 per cent by length meet this definition, and the target is to increase that to 90 per cent by 2040. This means an additional 10,000km of swimmable rivers and lakes by 2040, or 400km per year.
“The maps I am releasing today provide the most comprehensive and consistent information on water quality for swimming of New Zealand’s rivers and lakes ever published. These will help focus councils and communities on improving their local water quality, as well as help people make decisions about where they can safely swim. The maps are connected to the Land, Air, Water Aotearoa website that provides real-time information on water quality, which is particularly relevant for the fair and intermittent categories.
“The challenge of improving water quality varies significantly across New Zealand. This plan requires improvements in water quality across all regions and all categories. The target not only requires an improvement in areas that are swimmable, ie into the fair category, but also rivers and lakes being moved from fair to good, and good to excellent. Regional targets to achieve the national goals are to be worked through with regional councils by March 2018. Some regional targets will need to be greater than the 90 per cent and others, where it is more difficult to achieve, will be less.
The National Policy Statement (NPS) for Freshwater Management is being strengthened to support the new 90 per cent by 2040 swimmability target, as well as changes to address the issues of ecological health and nutrients by:
replacing “wadeable” with “swimmable”
adding macroinvertebrate monitoring for ecological health
strengthening references to “Te Mana o te Wai”
clarifying the consideration of economic opportunities
requiring instream limits for nitrogen and phosphorus
clarifying inclusion of coastal lakes and lagoons
clarifying the policy on exceptions
strengthening the requirement for monitoring and improving quality.
“The new regulations on excluding stock from waterways are an important part of this plan to improve water quality. The rules progressively apply to dairy, pig, dairy support, beef and deer farms from this year to 2030 relative to the steepness of the country, at an expected cost of $367 million,” Dr Smith says.
“We are today opening bids for the new $100m Freshwater Improvement Fund and announcing the eligibility and assessment criteria, which closes on 13 April. This comes on top of the $350m already committed by the government, of which more than $140m has been spent on specific river and lake clean-ups.
“This is the third phase of the Government’s work programme to improve New Zealand freshwater management and builds on the NPS introduced in 2011 and the National Objectives Framework in 2014. I commend and acknowledge the Freshwater Iwi Leaders Group and the Land and Water Forum, who have worked tirelessly in assisting with these policy developments.”
The detail of the NPS and Stock Exclusion Regulations are open for consultation until 28 April 2017.
This is a re-post of a February 21, 2017 article first posted here.
By Keith Woodford*
Between 13 and 16 February 2017, the Christchurch Port Hills suffered devastating fires unlike anything ever seen there before. As I write this on 21 February, the mopping up operations continue. The fire is now apparently well under control, but hot spots remain in the burnt areas. With hot north-west winds (known locally as ‘norwesters’) in the offing, the danger is not totally over. However, as of 21 February, most hillside residents have been able to return to their homes.
I live at Kennedy’s Bush, one of the focal points of the fire. We watched as the fire went past us on 13 February, only to be threatened again on 15 February. We were evacuated for 72 hours, but were then able to return to our home with our property totally unscathed. As I write this, I can hear the helicopters hard at work again passing overhead with their monsoon buckets, and planes dropping fire-retardant materials.
In this post, I share the chronology of the fire as my wife Annette and I saw it from Kennedy’s Bush. It is largely a pictorial story from the photos we took (click once on each photo to enlarge and show the detail, then use the back button to return to the story), but with a specific focus on the chronology and the contextual background.
First, I want to provide some background for those who do not know much about Christchurch and its Port Hills.
The Port Hills lie in an arc on the edge of Banks Peninsula to the east of Christchurch. They separate the city from Lyttelton Harbour, rising to a little over 500 metres. They formed some millions of years ago when Banks Peninsula was a volcano with multiple eruption points.
In the past, Banks Peninsula was heavily forested. But that was more than 100 years go. Now it is predominantly grassland and exotic pine plantations, but with some nature reserves and some man-assisted regeneration of native trees. The Port Hills are also an important playground for the people of Christchurch, with many walking and mountain-bike trails.
The climate of Banks Peninsula is complex. In summer time, hot norwesters (which weather people call ‘adiabatic’ or ‘fohn winds’ ) flow across the plains from the Southern Alps. In spring and summer, strong but cool north-east winds often build up in late morning, coming in from the ocean. Then at night, typically some time between 8pm and midnight, they die away again. At times, southerly storms flow in from the ocean, and the shape of the trees high on Banks Peninsula tells us that these southerlies are dominant vegetation-shaping forces.
February is typically the month when Christchurch experiences its biggest dry periods, with summer rainfall less than half of evapo-transpiration. At this time, the hills take on a tawny hue, with dry grass-seed heads waving in the wind.
And now to the fire itself. In telling that story there are several place names that recur. These are Lansdowne Valley, Kennedy’s Bush, Hoon Hay Valley, Westmorland, Worsley Spur, Marleys Hill, and the Sugarloaf TV and radio transmitters. These are shown below on a topographical map of the area.
Christchurch topo map (Click to enlarge)
Of course there are many stories of the Port Hills fire, and most of those will remain untold. The people who worked so hard and in many cases heroically in the air and on the ground, are typically not the type of people who then write their stories. I have myself worked in search, rescue and recovery (when I was a much younger man) and despite use of pen and computer as my lifelong tools of trade, I have not written of those events. ( I possibly will do some day.) With this story, I write it from the outside as an on-site observer, with some understanding of the complexities when men and nature interact, rather than in any way as a participant.
The fire began about 5.30 pm on Monday 13 February. The initial unconfirmed evidence is that it was caused by part of a transformer falling from a power pole. What is known is that it started on the lower slopes just above Early Valley Road in the Lansdowne Valley, and was preceded by a loud bang. The fire was seen almost immediately by local residents who called the emergency services, and then got to work, with garden hoses and wet sacks, protecting their own properties from the rapidly growing flames crossing the grassland slopes. Remarkably, most were successful, with nearly all houses being saved on the upper side of Early Valley Road where the flames were raging.
I first became aware of the fire soon after 6pm as I was driving home. I could see huge plumes of smoke billowing up from the Halswell area. John Campbell was already reporting the fire on his National Radio Program.
My own home is less than 2km from the starting point of the fire, but the westerly wind was blowing away from where we live and we were protected by the lee of a small hill. It was only by heading up Kennedys Bush Road that we could see what was happening.
Looking across to the Lansdowne Valley from Kennedy’s Bush Spur on 13 February 7.59 pm
Above the Lansdowne Valley 13 February 8.05 pm
It seems that the first three or so helicopters to be mobilised with monsoon buckets played a key role in saving these houses (above). Within two hours, the fire had essentially passed on through these grasslands, although the shelter belts were still providing a challenge.
From Kennedy’s Bush Road, looking south towards the Rim of the Port Hills, 13th February 8.06 pm
Looking up the Lansdowne Valley, from the plains, 13th February, 8.22 pm
Kennedy’s Bush Spur, smoke from Lansdowne Valley (out of sight), 13 Feb 8.29 pm
Hoon Hay Valley 14th February 7.06 am
By Tuesday morning, 14 February, it seemed that the fire was contained, at least on the Christchurch side of the hills, and that was the essence of the message from authorities to the public. The photo above shows the wind still blowing the smoke from the west, across the photo from right to left. However, high on the Port Hills the fire was still raging. Indeed there were two fires, with a second one having started at the Marley’s Hill carpark off the Summit Road about 7 pm on the Monday night. The two fires can be seen here, apparently still separate, although later to join. The cause of the second fire remains unclear, but almost certainly was caused by people, either by accident or an act of arson.
I spent that Tuesday out at Lincoln University, assuming as most people would have done that the 14 helicopters with their monsoon buckets had matters under control. It was only when I returned home that evening I was shocked and devastated to hear that helicopter pilot Steve Askin, a relative and friend of some of my colleagues, had been killed, possibly caused by a snagged monsoon bucket.
With hindsight, it seems that Tuesday was a lost opportunity. No civil defence emergency had been called, and far too much reliance had been placed on the helicopters which returned at dusk to their operational base near Tai Tapu, adjacent to the Lansdowne Valley, or headed back to the main airport. Also, only very limited quantities of fire retardant had been flown, apparently due to a lack of supply.
Hoon Hay Valley, 15th February, 7.17 am
By Wednesday morning 15th February, the wind had changed from west to a gentle southerly. This was enough to drive the fire down the Hoon Hay Valley. Despite the cool night, with temperatures dropping to 2 degrees C, all of a sudden things were looking more serious on our side of the Port Hills.
Halswell Quarry, 15th February 10.23am
The helicopters were now using the ‘duck pond’ in the Halswell Quarry off Kennedy’s Bush Road as a source of water. The smoke in the above photo is coming from the Hoon Hay Valley.
Looking towards the back of the Halswell Quarry Park on 15th February at 1.01 pm
By 1 pm, I was becoming concerned, with the rising easterly wind. I knew that Hoon Hay Valley with its pine plantations was burning, and I could see potential for the fire to travel back over the ridge to Kennedy’s Bush Spur with its 200 houses.
Above the Halswell Quarry, 15th February, 1.03 pm
Halswell Quarry, 15th Februry at 1.21 pm
However, the general atmosphere down at the Halswell Quarry was somewhat relaxed. The school children had been brought along in their class groups to watch an inspiring educational event, with helicopters lining up to fill their monsoon buckets. I recall no presence of any authorities apart from the helicopter pilots, but there may have been one person there in a high viz vest.
At the top of Kennedy’s Bush Road, 15th February, 2.17 pm
By 2 pm I was becoming increasingly concerned, so I headed to the top of the road on Kennedy’s Bush Spur. Remarkably, there were no authorities there. I realised that once it dawned on the authorities as to what was happening, we would all be evacuated, so I called my wife to say it was time to start thinking about getting home and collecting up key possessions.
From high on Kennedy’s Bush Road, looking towards the south east, 15th February, 2.27 pm
The winds up here were now easterly, posing a bigger threat than if they had been north-east. Clearly, we were in the line of fire. As I returned down the road I saw one policeman, stopped in his car, talking to a local, but no sign of fire crew or civil defence.
Above Halswell Quarry, 15th February, 3.04 pm (There are six helicopters to be seen in this photo)
Helicopters coming and going from the Halswell Quarry ‘duck pond’, 15th February, 3.05pm
By now, it was obvious that the helicopters were unable to control the developing firestorm. There were six of them heroically working the pond, working with apparently minimal separation, dumping their loads on the ridge separating Kennedy’s Bush from the Hoon Hay Valley. Elsewhere there would have been another (approximately) 8 helicopters fighting the battle on other parts of the Port Hills.
Halswell Quarry 15th February, 3.19pm
Above the Halswell Quarry, 15th February, 3.25 pm
The evacuation started about 4.30 pm, with people up the top of the road given no time to collect anything. By Wednesday 6 pm, the police had reached the bottom of the road, going from house to house, and we had all departed in our cars, some more prepared than others. By now a Civil Defence Emergency had been declared, and this was allowing much greater resources to be brought to bear. But it was now getting late in the day.
Hoon Hay Valley from Sparks Road, 15th February at 7.23 pm
Worsley Spur, 15th February, 7.43pm
Further around the hills to the north-east, and beyond Westmorland, the fire was attacking Worsley Spur. Several houses were lost on the Worsley Spur.
Between Westmorland and Cashmere, February 15th at 7.44 pm
Slopes on the north-east side of Worsley Spur, 15th February at 7.45 pm
Worsley Spur, with Westmorland on the left, on 15th February at 10.11 pm
Between Westmorland and Worsley Spur on the right, and Cashmere on the left, 15th February, 10.45 pm
Fire across Dyers Pass Road with the lights of the Sugarloaf transmitters above and left of centre. 15th February 10.48 pm
Once the helicopters withdrew at dusk, all hell broke loose.
The fire did come over the ridge between Hoon Hay Valley and the Kennedys Bush Spur, with 200 houses at risk. It was very fortunate that the wind then died away about 11pm, sufficiently for the fire to lose much of its energy.
At the top of Kennedys Bush Road and beyond (Source unknown) Thursday 16 February
Details of how and why it stopped where it did stop are unclear (to me). Certainly, the wind died down about 11 pm. I am told there were no fire crews up there, but maybe there were. Maybe fire retardant played a role, but I am doubtful. It is only today (21 February) that fixed wing planes have been applying retardant up there, brought in from Australia. All I know is that if the fire had got into what is known as the ‘Crocodile Gully’ (in the left of the photo above) then the whole spur and much of the pine forests above the Quarry and below the houses were at huge risk. It was only 30 metres from happening.
The upper zone of Kennedys Bush Spur six days after the burn, with the Quarry Park below (21 February)
The top of Kennedys Bush Road after the fire had gone through. (This photo was taken 6 days later, 21 February, when the cordon was relaxed.)
On Thursday 16 February, civil defence systems finally came into place which should have occurred earlier. Suddenly there were lots of fire tankers, civil defence and police, albeit struggling to get co-ordination. Heavy machinery came in to construct firebreaks, and people could be seen checking for hot spots.
By Saturday 18th February, the 200 Kennedys Spur families were getting very keen to get back to their houses, to address the needs of pets, and to get back to their normal lives. Although 11 houses were lost in the fire, none of those were at Kennedy’s Bush. However, the authorities who had been slow to react as the fire developed, were also slow to let residents return. They were concerned that if they let us return, then they might have to evacuate us again in one or two days. They were also concerned about supposed hot spots, although when eventually the ‘hot spot’ map was produced (see below) there was only one nearby and this was probably a ‘falsy’ as the fire had not reached that point, and there were also no tree roots there to create an underground hot spot.
Supposed ‘hotspot’ at the top of Kennedy’s Bush Road, accessed from Christchurch City Council website 18th February at 8.34 pm
Some families did manage to get back to their homes on Saturday 18 February and the remainder on 21 February. Tuesday February 21 also saw major applications from the air of retardant (imported from Australia) across Hoon Hay Valley and Kennedy’s Bush Spur.
Now, some 8 days after the fires began, we can start to reflect. We can wonder in awe at all of those Port Hills houses that are completely surrounded by burned-out land but which are still standing – albeit no doubt with smoke damage in many cases. There must be many untold stories about people on the ground and in the air who went well beyond the call of duty to save those houses.
Houses on Worsley Spur, surrounded by burnt-out land (21 February)
The Christchurch Adventure Park (with chairlift left of centre), 21 February
Hoon Hay Valley, 21 February
As a community, we will now need to reflect on the type of vegetation we wish to have on the Port Hills in future. And our officials will need to reflect as to why the response mechanisms were so delayed and so shambolic. It is not as if this is the first disaster New Zealand has had to face. Why do we not have major supplies of fire retardant in the country ready and waiting? And why do we have to rely on individuals rather than proper systems that kick into gear immediately? But they are all questions for the future.
Finally, below is a map showing the boundaries of the fire on both sides of the Port Hills.
Accessed from the Christchurch City Council website on 18th February at 8.20pm (https://www.ccc.govt/services/civil-defence)
*Keith Woodford is an independent consultant who holds honorary positions as Professor of Agri-Food Systems at Lincoln University and Senior Research Fellow at the Contemporary China Research Centre at Victoria University. His articles are archived at http://keithwoodford.wordpress.com
Content sourced from the LINZ website.
As a result of the Land Transfer Amendment Act, we collect tax-related data when people buy, sell or transfer property. The legislation also requires us to ask questions that help inform housing policy. This information is collected through a tax statement.
The information provided on each tax statement is confidential to the buyers and sellers, and to Inland Revenue, so may only be released by us in a summarised form.
We will publish quarterly reports summarising the data.
Information on the size or value of the property being transferred is not included in this report as this is not collected in the tax statements. While the data contains tax residency information, this is not the same as nationality and this is not a register of foreign ownership of residential or other property.
Key figures 2016
|Quarter||Jan-Mar 2016||Apr-Jun 2016||July-Sept 2016||Oct-Dec 2016|
|Overall number of Transfers||45,114||57,678||53,991||50,814|
|Number and Percentage of transfers involving overseas tax resident buyers (incl trusts, companies and businesses as well as individuals)||1,158
|Number and percentage of transfers involving overseas tax resident sellers (incl trusts, companies and businesses as well as individuals)||1,062
|Number and percentage of Auckland transfers involving overseas tax resident buyers (incl trusts, companies and businesses as well as individuals)||474
LINZ also asked home buyers and sellers whether they or their immediate families were work or student visa holders and, if so, if they intended to live on their land.
The results to this question are inaccurate and should not be used as 48% of those who answered as if they held a work or student visa, also claimed the main home exemption (that is only available to New Zealand citizens and residents).
We have made improvements to the way we gather this information, and will have precise information on transfers involving work or student visa holders in the report covering January to March 2017.
For transparency, we have shared the results we do have as well as more information on this in the appendix of the latest report.
This information was sourced from here and was released on February 23, 2017.
Fonterra has issued this Statement on the NZX:
Fonterra is required to consider its forecast Farmgate Milk Price every quarter as a condition of the Dairy Industry Restructuring Act. For this purpose, Fonterra Co-operative Group Limited today confirmed the forecast Farmgate Milk Price of $6.00 per kgMS announced in November.
When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total pay-out available to farmers in the current season is forecast to be $6.50 to $6.60 before retentions.
Fonterra Chairman John Wilson says the Co-operative is confident that this forecast is at the right level, following the 75 cent rise in its forecast Farmgate Milk Price in November last year.
“The global outlook for dairy remains positive. Since November, the global market for commodity dairy products has remained relatively balanced and we expect global prices to continue to hold or gradually increase over the back half of this season – a view shared by most global analysts,” said Mr Wilson.
Fonterra also announced that it would increase the monthly Advance Rate it pays to farmers. The Advance Rate for February, paid in March, has increased to $4.85 per kgMS.
“Our confidence in the global dairy market at this stage of the season, combined with the strength of our Co-operative, has enabled us to increase the monthly Advance Rates more than we normally would at this time of the year,” said Mr Wilson.
Fonterra’s Global Dairy Update for February reported that the Co-operative’s New Zealand milk collections were showing signs of recovery. Originally expected to be down seven per cent for the season, the New Zealand collections forecast has now improved to a five per cent decline on last season.
A history of each season's payout from all dairy companies is here.
The dry ignited in the Canterbury Port Hills and Hawkes Bay last week as areas of poorly grazed pastures allowed the fire to spread causing property loss and a fatality to a firefighter. Farmers and a university pasture specialist were critical of the large areas of dry pasture and pine plantations on the hills that provide perfect fuel for the large fire.
Central South Island dryland areas desperately need significant rains soon to stimulate autumn growth as North Canterbury returns to serious drought conditions but in the north, Hawkes Bay and Northland recieved significant moisture.
The dairy market now realizes that dairy fats are in short supply and processors are demanding and achieving a premium for products sold. Oceania prices all lifted with butter and cheese near yearly highs and skim milk powder prices strong even as the European Unions’ stocks of that product failed to sell.
Milk future markets are easing however, and this showed at last nights auction where the parcel of milk commodities softened by 3.6%. Analysts suggest this weakness could be as a result of Fonterra lifting its production forecast and its volumes on future gtd auctions, as the market at present looks to be is very sensitive to increases in supply.
The powders lead the drop and whole milk product has now slid 10% from the levels seen at the end of 2016, and probably puts paid to any upside in the forecast for the year.
Globally the EU reports milk production is down for the sixth consecutive month in a row but balancing that, US production is up for four, as supply continues to be a big factor on how customers are determining their pricing bids.
A2 Milk announced it has nearly quadrupled its first half profit after strong sales into China and Australia, and Synlait Milk suppliers will be pleased they committed to this unique product.
The Primary Industries Minister reinforced the importance of the dairy sector to the NZ economy with a recent report highlighting that it contributes $7.8 billion to GDP, and sits at the top of the export earners.
Scanning for dry cows has revealed some poor results that has left many, mainly on the very wet West Coast of both islands, with over 20% empty. Many South Island West Coast farmers are on OAD, rate this season the worst in 20 years, and face economic pressure on budgets, in a market where numbers of suitable in calf replacements is short.
Westland Milk Products are suffering also with this lack of supply amid the major restructure, and their lower forecast will be unhelpful in the short term for under pressure shareholders.
All the banks are reporting impaired loans are increasing and the problem is mainly in the dairy area, as this years financial results look critical for those with too much debt.
Allied Farmers report a profit fall in their first half results, blaming a lower bobby calf processing rate as more animals are kept for replacements and for finishing in the beef sector.
By David Hargreaves
Prices fell at the overnight GlobalDairyTrade auction, led by a 3.7% drop in Whole Milk Powder prices as Fonterra made more of the product available on the back of an increase in its forecast levels of milk production for this season.
Overall dairy prices as measured by the GDT Index eased 3.2%, with the WMP price falling to an average US$3,189 per metric tonne.
Fonterra said last week it would make more product available for sale on GDT after revising its milk collection forecast. It now expects just 5% less milk for the current season against a previous forecast of 7% less.
A total of 13,950t was made available, 5% more than previously advised for this auction and also 5% more than was made available at the previous auction.
WMP prices are down 10.6% for the 2017 calendar year so far. To put that into some perspective, however, the prices enjoyed a turbo-charged rally of nearly 72% between August and December 2016.
Fonterra has not updated the market on its milk price for farmers forecast for some time.
It initially forecast a milk price for this season of just $4.25 per kilogramme of milk solids, but pushed this up during the strong rally in prices in the back half of last year. The current $6 price forecast - was made on November 18.
The big bank economists are all forecasting a higher price than this. Westpac have been forecasting a $6.20 price, ANZ economists have a current expected milk price this season of $6.25, BNZ economists recently raised their forecast to $6.40, while ASB economists who had stood alone in forecasting a $6 price much earlier in the season when the average consensus was for a much lower price, lifted their pick shortly before Christmas to their current $6.50 price.
ANZ rural economist Con Williams said current market developments and seasonal factors suggest there "could be some more downside yet", to global prices.
"...But we struggle to see whole milk powder moving back below US$3,000/t.
"On a more cheery note, a milk price upgrade from Fonterra for the 2016/17 is expected any day now. Our current forecast is $6.25/kgms.
"And while dairy has started the year on the back foot, many of New Zealand’s other sectors appear to be off to a more positive start. Combined with steady energy prices, this suggests a modest terms of trade improvement in early 2017."
By Allan Barber*
There has been a great deal of progress towards the development of the New Zealand Red Meat Story, but most of it has been happening under the radar.
That is all about to change.
B+LNZ is holding a workshop on 1st and 2nd March at which a wide group of industry participants – farmers, government, processors and exporters – will gather to start formulating the detail of the story, assisted by a strong line-up of guest speakers with international experience in brand development.
Over the last 18 months B+LNZ has focused on implementing its market development action plan arising from extensive consultation with levy payers. The most obvious change was to close marketing offices in mature markets like the UK, Japan and Korea where exporters already have much deeper relationships with customers and feedback from farmers and exporters suggested funds could be better spent in other ways and in developing markets with greater potential.
The change in focus has resulted in the creation of three new roles: one with responsibility for the development and implementation of the Red Meat Story, a market research specialist to focus on consumer insights and a market innovation specialist charged with capturing new market benefits. Detailed research has been gathered through interviews with farmers of different ages, farm types and ownership structures throughout the country about their story, as well as with selected worldwide customers to find out why they buy New Zealand beef and lamb.
According to Nick Beeby, B+LNZ’s GM of market Development, who has overall coordination accountability for the programme, the Red Meat Story is about more than growing New Zealand’s share of global consumption, but also about building credibility for our red meat with consumers in competition with other forms of protein.
Therefore it is crucial to ensure the story’s building blocks are all in place which is where the work of the Red Meat Profit Partnership comes into play.
The development of the NZ Farm Assurance Programme (FAP) is progressing well, with ANZCO, Alliance, Silver Fern Farms, the Progressive group of companies and DINZ all committed to adopting the same baseline standards, while discussions with AFFCO are also in hand. At this point ANZCO has begun rolling out the FAP and a further six processors will have done so by the end of March and another before the end of May. Meat companies supplying certain retailers or food manufacturers already have their own FAPs in place, but the establishment of a common New Zealand standard programme across the whole industry will enhance the credibility of the New Zealand red meat brand with international customers. It will then be possible to lift the standard to meet customer demands.
Another important step is MPI’s authorisation for RMPP to work with OSPRI on developing an electronic animal status declaration process which would ultimately help to overcome the loopholes in the NAIT system. A trial is about to be conducted at SFF Finegand to establish how successfully the EASD will replace the current less than perfect manual ASD. Once the robustness of the farmer to processor transaction has been tested, attention will turn to farmer to saleyard and farmer to farmer transactions. Traceability is an essential component, because it is a mandatory building block without which a credible red meat story has no firm foundation.
Another important element of the red meat story, particularly for the EU in the event of the anticipated FTA negotiations, will be how New Zealand addresses the question of protected geographical indication (PGI) for which a series of environmental, animal welfare and production standards will be necessary.
All the brand image building in the world backed by spurious claims to be clean and green or 100% pure will count for very little, unless these claims can be backed up by a robust farm assurance programme, underpinned by electronic ASDs and a cast iron traceability system for all red meat. If this is to be achieved, the industry must grasp the nettle or, mixing metaphors, address the elephant in the room – when deer and beef are comprehensively covered by electronic traceability and the red meat sector subscribes to a uniform FAP, sheep must surely be brought into the traceability system. The inclusion of sheep traceability is also likely to form a necessary part of any PGI application.
The cost to farmers of introducing sheep traceability is an issue the government will have to confront full on if the Red Meat Story is to achieve its prime objective of gaining consumer trust in the New Zealand brand.
There are also encouraging signs the long hoped for mirage of industry cooperation for the national good may be getting closer.
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*Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country. He is chairman of the Warkworth A&P Show Committee. You can contact him by email at email@example.com or read his blog here ». A version of this article was first published in Farmers Weekly. It is here with permission.
Farm sales and prices were largely flat in January although dairy farm prices are on the rise, according to the Real Estate Institute of New Zealand.
The REINZ said 521 farms of all types were sold throughout the country in the three months to January, compared to 499 for the three months to December and 532 for the three months to January 2016.
The REINZ All Farm Price Index, which adjusts for differences in farm size, location and type, was up 1.6% for sales in the three months to January compared to the three months to December, and up 4.1% compared to a year earlier.
Much of that increase was likely driven by the improved fortunes of the dairy industry, with the median price per hectare of dairy farms up 13% over the last 12 months.
The REINZ Dairy Farm Price Index, which also adjusts for differences in dairy farm size and location, rose 5.2% in the three months to January compared to the three months to December, and was up 8.6% compared to the three months to January last year.
Sales volumes in the dairy and grazing categories have been reasonably consistent," REINZ rural spokesman Brian Peacocke said.
"However volumes in other categories, particularly finishing, arable and horticulture, have experienced distinct reductions during the month of January.
"Current concerns in the rural sector centre on volatility of income, compliance issues and drought conditions in northern and eastern districts of both the North and South Islands.
"Caution and uncertainty continue to be ongoing components of the marketplace.
"This is causing some frustration with transactions taking longer to come together," he said.
Here is the REINZ's full rural report for January:
The malaise which has seen the housing market cool over summer also appears to be affecting the lifestyle block market, with sales volumes well down and prices flattening.
In the Real Estate Institute of New Zealand's latest report on the lifestyle property market, REINZ rural spokesman Brain Peacocke described the market as challenging, with loan-to-value ratio (LVR) mortgage lending restrictions affecting sales.
"All regions apart from the West Coast of the South Island have experienced significant reductions in sales volumes during January 2017, making this the lowest month for volumes over the last two years," he said.
The REINZ said 1959 lifestyle properties were sold in the three months ended January 2017, which was down 7.1% compared to the three months ended January 2016.
At the same time prices flattened, with the national median price hitting its record high of $583,000 in the three months to December last year and remaining unchanged in the three months to January this year.
REINZ's Regional Summary of Lifestyle Block Sales:
- Northland / Auckland – reduced volumes with buyer uncertainty making it harder to get transactions across the line; often good initial response to new listings then interest tapers off; Government LVR rules are impacting on the market.
- Waikato - a major reduction in sales volumes over recent months; listings in short supply but improving; Auckland purchasers remain active; strong subdivision activity in north Waikato.
- Bay of Plenty - a 50 % drop in volumes over the last two months; strong prices for quality properties.
- Hawke’s Bay / Manawatu / Wanganui / Taranaki – reasonable activity in the mid-price range with volumes holding closer to recent levels.
- Wellington / Wairarapa – more consistency within the region with very strong demand in the Wairarapa where prices are lifting and some properties are selling within a week of being listed.
- Nelson / Marlborough - a significant drop-off in sales volumes from previous months albeit prices remain strong.
- Canterbury – some very strong sales at the top end of the market although stocks are limited; moderate activity in the mid-range and quieter at the lower end; volumes in total down considerably.
- Otago – steady activity throughout the central region with strong prices in the Lakes district; reduced volumes but solid sales and prices around Dunedin.
- Southland – close to status quo within the southern region with modest prices holding steady.
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