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Opinion: Shannon pelt plant closure shows need for water storage, says Fed Farmers

Opinion: Shannon pelt plant closure shows need for water storage, says Fed Farmers

Content supplied by Federated Farmers

Federated Farmers Manawatu-Rangitikei believes the closure of Silver Fern Farms’ former fellmongery plant in Shannon, shows not only the need for water storage projects like Hawke’s Bay Ruataniwha, but the need for a viable meat industry.

“There is no doubt the closure of the Shannon fellmongery plant reflects the fall in both sheep and lamb numbers over a number of years,” says Andrew Hoggard, Federated Farmers Manawatu-Rangitikei provincial president."

“In our region, the total number of sheep has fallen by over 1.1 million sheep between 2007 and 2012.  In the case of the Hawke’s Bay, it is down by 362,000 but it is also down by about 157,000 sheep in the Greater Wellington region according to Statistics NZ."

“That was of course before this year’s drought."

“Some projections for the 2013/14 lamb crop say it could be down by anywhere from two to three million lambs.  It’s why the sale and subsequent closure of the plant in Shannon shows you how events on-farm eventually impact support industries."

“It is a strong message about the need to store rainfall in key sheep and beef growing areas; a lot of our farmers here are increasing on-farm water storage facilities but there’s limits as to what you can do on-farm."

“Farmers are pretty much hostage to a climatic lottery.  Some seasons you may hit the Powerball with great growing conditions, but the next season, you may be facing a dustbowl.  That is what happened this year."

“As the Shannon plant drew in product from a wide area, it reflects an up and down cycle, which seems to have served up more downs than ups for our meat and fibre farmers."

“Water storage schemes, like South Canterbury’s Opuha, are proof rainfall storage works and works well.  It gives farmers insulation against whatever the weather may throw at them and means they can plan seasons in advance instead of just season to season."

“The closure of the Shannon plant is a big advertisement for water storage projects on the east coast of the North Island. The first thing in arresting the fall in sheep numbers is to eliminate the climatic lottery. That will help the second; better red meat industry structures."

“Ruataniwha will allow farms in the Hawke’s Bay to stabilise and grow stock numbers.  As would water storage in the Wairarapa and these initiatives may one day help to see the mothballs taken off that plant in Shannon,” Mr Hoggard concluded.

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Whats with the Feds and the uneconomic Ruataniwha dam? Its a bloody dog, its supplying water to the farm at $1000 a hectare in a normal year, 400mm. Last year some of the dairy farmers in the area put on 800mm, would have cost them $2000 a hectare. If you add on farm delivery the water costs $1600 a hectare.   Then with the present cost of Fonterra shares dairying is out, to frosty for many crops, prone to cold springs.
 Its only good in a one in 10 year drought last year it wold have been dry by XChristmas and been a bigger disater than the natural one.
 Then there is major doubt about the flows the council are using, there is no snow melt in this area unlike the South Island.  Its on a fault, the topography of the land to irrigate varies, and they need to pump to reach alot of land.
 Record sheep kill last year because of the drought should have seen the Shannon plant humming. I suspect it is the unspeakable, costs,  trying to compete with China is always going to be a losing position, especially when NZ costs have gone through the roof over the last decade.
 Are you trying to tell me that if we irrigate then lambs will be worth more in the UK, what are you, some kind of  commedian?   
 Its complete lunacy, you cannot tell me Fed farmers are full of idiots, so whats the angle?  Come on guys let your members in on the secret.

Andrewj - I think Fed Farmer's employees need to review the realty of irrigated farming as noted by Henry_Tull over the last two days - it's not a pretty picture:
Synlait Farms Limited reported a NPAT of $(0.6) million for the year
ended 31 May 2013.

This chap was just elected to HBRC - and has been asking all the right questions all along on this particular project;
It will be interesting to see what more he can do/uncover from the inside. He'll be subjected to a very rough ride, I suspect.

 Its complete lunacy, you cannot tell me Fed farmers are full of idiots, so whats the angle?  Come on guys let your members in on the secret.
 A.J. It depends on your definition of "idiots" when the new Corporate ideology decides to pin this  event and many to follow to an ...harness water..? deliver water..? to famers who may reconsider their positions given the cost climate and avail some more land to foreign interests........who then may require serviced irrigation to meet their demands.
BTW....A.J. you only need an idiot at the top to direct the bemused paycheck collectors....or maybe a cloister of men, playing cowboy.

They call a flock of Ravens an unkindness.What do you call an orgaisation that deliberately, sells its members down the river. ?

The Waitaki Adventure Canoeists Association ( Oamaru ) ?

Well it wouldn't be the Ashburton, unless they have wheels on their canoes or its the middle of winter

follow the money .. who are the beneficiaries? .. who stands to benefit?

The political and economic drivers behind the Ruataniwha scheme are much the same as those for the the Tennessee Tombigbee Waterway Project.
The Ruataniwha project will join some of those made famous for their poor cost benefit analysis by the U.S. Army Corps of Engineers.

Seems to have the same look and feel as that wonderful "Mangawhai Water Treatment" facility 

It is far worse than Mangawhai, and has had far more central government political capital invested.

In answer to  your question ...A sub-parliament of wastrels..

 A.J......I'd call them what I said they were going back to the farm vote.....Marketeers who don't give a flying frig about what's happening on the ground so long as a profit can be wrung from the back of someone else's labors.....
buy into it , ruin it, repackage it as a polished turd, sell it to the suckers.
Somehere in the background A.J., there a people exactly like, if not Mark Wheldon telling every money hungry poly where there's a buck to be had if the bloody farmer will play the game.

Speaking of which, what's the original Mr Fonterra, Craig Norgate up to these days?

Nice PR piece. Guess Google can fill in the gaps

Have just been in discussion with an accountant from the area.
His clients in the non-drought areas (sheep/beef and dairy) are all losing money.
Sheep and beef are just going backwards faster after last season. So more likely (as Andrewj states)  there are more fundamental reasons for decline in the industry. Is it  that those reasons are harder to spin than encouraging increased capital spend on irrigation projects to keep the banks shovling out money in return for real asset backing?
Feds keep on about Opuha. Instead of talking they should be researching - but it seems they spend more on media than facts these days.
Opuha cost $40 odd million and supplies water for between 5-11 cents/cum; has a larger catchment and more flow than Makaroro. It supplies farms where water deficts make irrigation worth while due to good responses to applied water.
Ruataniwha Dam looks increasingly likely to go past $300 million and  a water price of 25 cents per cum still cannot make the investment economics look sensible even with inputs from the "public sector" (BNZ Advisory report to HBRC August 2013). The water deficit varies but NIWA figures indicate "normal" is 0 - 300mm which can be managed without water.
But who cares what the question is at present, the only answer is irrigation.
Irrigation to increase volumes of dairy commodity products to be sold in markets for (at best) marginal return.

Robpeter, tell me about it. I purchased one year old bulls in July for $450 + freight, the same money the farmer purchased them for the year before, so he made a loss.
 For a while things lookes good but with the high $ and falling schedules looks like Im going to do not much more than cover my costs.
 These are worse prices than when I leased my first farm in 1985. My costs on the other hand have had astronomical rises.
 just what I need is an annual water charge of $1000 per hectare whether i use it or not.

We could start with a new it COB (Coalition of Independent Bloggers).
Goal to sort NZ Inc.
I'll nominate AndrewJ - for HB.....a seconder please.....all in favour......
Nominations for all other regions close at the end of the week.
There's quite a few suitable Bloggers Mr Henry Tull, GBH, Mist42 (can anyone find him) Omnology just to name a few.
Please post Agenda Items below.

Item # 1 : Scrap WFF !

That's soooo funny......


“Water storage schemes, like South Canterbury’s Opuha, are proof rainfall storage works and works well. It gives farmers insulation against whatever the weather may throw at them ..."
I am struggling a bit here Bruce with both your logic and proof.
Is your proof that because one irrigation scheme works any and all irrigation schemes must also work?
Or the logic that having water storage provides protection including against floods and snow? Rising costs and interest rates? Fluctuating commodity prices?

If the current economic model of supporting  'white powder' (milk) production any way possible, including unfeasible irrigation schemes is not all it is cracked up to be. Then maybe we have to rethink the model? Is the fear of change the reason the Feds are pushing irrigation schemes further than the facts will sustain?
I discussed this issue in an earlier article on this site.
The problem with our economic model is not just being dependent on a narrow number of agricultural exports but also the debt fueled consumer growth that is also part of our model.  If our cities wealth came from innovative new businesses and workers, not debt to buy existing houses at ever higher prices then our economy would be a lot more stable and sustainable in the long term.

It is about doing the hard yards of making our towns and cities attractive -that businesses and workers can go about there business as efficiently as possible...
Our current local and central government setup is way too unresponsive to do this. They have a long history of failure to do the hard yards. This is the value of what Oliver Hartwich is proposing.

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Days to the General Election: 35
See Party Policies here. Party Lists here.