NEWS Wool gaining but meat still the king. PAGE 16
MACHINERY Local dealership gets ready for the future. PAGE 39
RURALNEWS
ANIMAL HEALTH New law provides better protection for animals.
PAGE 32
TO ALL FARMERS, FOR ALL FARMERS
MAY 19, 2015: ISSUE 584
www.ruralnews.co.nz
‘HAIL’ Mary regs coming! PAM TIPA pamelat@ruralnews.co.nz
A BAY of Plenty decision last week to put about 3000 kiwifruit orchards on a ‘hazardous’ list has implications for all agriculture nationwide, says an industry leader. Kiwifruit is the first agricultural land to be registered under the Hazardous Activities and Industries List (HAIL). That necessitates a land information memorandum (LIM) for the site and if owners want to change land use, such as subdivide, they may have to prove the soil is safe for that use. But the decision implies that all agricultural land where agrichemicals are used would eventually come under the nationwide register, says NZ Kiwifruit Growers Inc president Neil Trebilco. Trebilco says the HAIL list – a Ministry for the Environment initiative – is extensive and looks to include all land where agrichemicals have been
applied. He says the decision on kiwifruit orchards is “obviously very, very precautionary, perhaps extremely so”. “The issue here is going to be public perception of what this means. Kiwifruit orchards are just large gardens. Many people have gardens and will also be using agrichemicals in their gardens. “On kiwifruit orchards the rules are strict about what you can use and the application and timing of application of those chemicals. We have strict rules. “I am surprised at what has happened, that kiwifruit orchards are on the HAIL list. It seems extraor-
dinarily precautionary and I don’t think it reflects the actual situation on orchards. We don’t think orchards in general would be classified as a hazardous area.” Trebilco says the HAIL list is nationwide and driven by the Government, so the council is just applying government policy. “Obviously it is going to be for all agricultural use, you would suspect.” But it appears kiwifruit orchards are a forerunner because they are such a large area in the Bay of Plenty. HAIL was created by the Ministry for the Environment and includes
53 activities and industries that could cause soil contamination on land. The Bay of Plenty Regional Council announced on May 12 that it is registering kiwifruit orchards across the region on its HAIL database. Regional council project implementation officer Reece Irving says HAIL listings are being done all over the country, particularly in Hawkes Bay, Tasman, Marlborough, Nelson and Canterbury where land has been used for horticulture. “While a current owner may not have used sprays on their property, TO PAGE 4
PHOTO: TONY HOPKINSON
1000KM ON HORSEBACK! A lifelong association with horses will culminate in Ben Wilks (24), of Katikati, riding the Mongol Derby in early August. Believed to be the toughest horse race in the world, it takes the riders 1000km across Mongolia and has to be completed within 10 days. With Wilks will be two other entrants from New Zealand and about 40 starters. A full profile of the race and Wilks will appear in the June 2 issue of Rural News.
DAIRY RISK PETER BURKE peterb@ruralnews.co.nz
THE RESERVE Bank says the outlook for global milk prices is highly uncertain and the financial stress on the dairy industry could rise markedly if prices remain at current low levels in the 2015-16 season. In its latest Financial Stability Report, bank governor Graeme Wheeler lists dairy as one of three systemic risks facing the New Zealand economy. The others are the Auckland housing crisis and the current global financial conditions. Wheeler says the dairy sector is experiencing a sharp fall in incomes due to lower international prices. Many highly leveraged farms are facing negative cashflows and the risks will become more pronounced if low milk prices persist beyond the current season. The bank says while the situation in the China market may improve, the recent removal of milk quotas in Europe and the increase in US dairy exports are likely to weigh on prices. Wheeler says that if the lower dairy payout were to be sustained, “there is a risk that farm values could fall sharply and further exacerbate the increase in financial stress associated with lower farm incomes”. @rural_news facebook.com/ruralnews
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RURAL NEWS // MAY 19, 2015
ISSUE 584
www.ruralnews.co.nz
Down to the wire PETER BURKE peterb@ruralnews.co.nz
NEWS ������������������������������������ 1-17 MARKETS ������������������������� 18-19 AGRIBUSINESS �������������� 20-21 HOUND, EDNA ����������������������� 22 CONTACTS ������������������������������ 22 OPINION ���������������������������� 22-25 MANAGEMENT �������������� 26-31 ANIMAL HEALTH ���������� 32-35 MACHINERY AND PRODUCTS ���������������������� 36-42 RURAL TRADER ������������������� 43
HEAD OFFICE Top Floor, 29 Northcroft Street, Takapuna, Auckland 0622 Phone: 09-307 0399 Fax: 09-307 0122 POSTAL ADDRESS PO Box 331100, Takapuna, Auckland 0740 Published by: Rural News Group Printed by: PMP Print CONTACTS Editorial: editor@ruralnews.co.nz Advertising material: davef@ruralnews.co.nz Rural News online: www.ruralnews.co.nz Subscriptions: subsrndn@ruralnews.co.nz ABC audited circulation 81,188 as at 30.06.2014
FARMERS DON’T seem to get it. So says New Zealand Agricultural Aviation Association (NZAAA) chair Alan Beck, commenting on farmers understanding their responsibilities to make their farms a safe workplace for agricultural pilots. Beck, a highly experienced agricultural helicopter pilot, is now launching a campaign to make farmers more aware of their responsibilities. One of his greatest worries is that farmers, despite attempts to educate them, will not take down electric fence wires suspended across farm gullies. Beck mentions that Peter Robb was the 27th agricultural pilot to die in NZ when, last October, his helicopter hit a wire on a farm near Whanganui. He says another helicopter pilot hit an unmarked wire a couple of weeks ago and though the pilot survived the machine was badly damaged. “The cost of removing these dangerous wires is bugger all. All it requires is
farmer is likely to be prosecuted.” Beck says NZ has the most helicopters per capita in the world and many are used for agricultural spraying at low altitude. Farmers are also short of understanding about their responsibility and liability for the maintenance of airstrips and tracks leading to them, Beck says. Under the law, a farmer who owns land cannot pass over the responsibilities for safety to someone who is leasing their land or just using their airstrip to put fertiliser on their own property. “Even if the owner is overseas and there is an accident, such as an aircraft hitting sheep on take-off, he is still liable. He can’t contract out the responsibility.” Beck says farmers need to realise that aviation safety is a problem for them, not just WorkSafe NZ and CAA. • More on farm health & safety p6-7
Profit – not production FARMERS MUST focus on productivity and profitability – not necessarily production, says Beef + Lamb NZ chief executive Scott Champion. Speaking to Rural News at BLNZ’s ‘Ag Innovation’ day in Palmerston North last week, he noted that if farmers increased production but their costs went up accordingly, they would not walk away with any more money. The event, which attracted about 200 people, was to give farmers an insight into what’s happening globally to the products they produce, and the changes in consumer preferences and market and scientific trends. Farmers
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for the offending wire to be cut and a new one erected on battens on an existing fence,” Beck told Rural News. “We recommend that the battens are about 800mm in height, which means that if by chance the farmer gets chased by a bull they get over the fence and don’t get zapped on the electric fence.” Beck says many farmers don’t understand that even though a pilot may not be work- Alan Beck ing on their farm, if his machine hits a wire on it the farmer could face prosecution for an unsafe workplace. “CAA says the workplace is the airspace or the area required by a pilot to turn, manoeuvre or manipulate the controls of an aircraft so he can fly,” he explains. “So unfortunately, if the neighbouring farmer has a wire strung across a gully this is classed as a hazard in the way of a pilot for which the
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must get their heads around these issues, Champion says. BLNZ wants to make farmers aware of the science and management techniques being developed in New Zealand to help make farming more profitable. Champion says farmers must get a handle on the power and influence of some of the new technologies now used extensively to communicate with consumers about products. “Do they have to be part of Twitter or have an Instagram account? Probably not, but some young farmers are using these things and understanding they exist
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is important,” he says. Champion is urging farmers to be a part of the ‘story-telling’ process of getting across to consumers and buyers some of the unique features about farming in NZ. This is telling the world about our farming systems, such as the fact that we grass-feed all our animals and treat them well. “It’s valuable for offshore markets – agents and distributors, consumers or retailers or whatever they might be. Farmers are not typically the people they meet every day and they find their story fascinating because it’s so different to them.” – Peter Burke
VOLATILITY DAIRY FARMER’S FRIEND? PAM TIPA pamelat@ruralnews.co.nz
TRADE MINISTER Tim Groser has a controversial message for dairy farmers – volatility is their friend. The industry has lived with it for 130 years, he says. “If dairy prices were on a constantly upward one track, this would induce supply from our competitors,” Groser told the recent New Zealand Dairy Industry Awards dinner at SkyCity in Auckland. “I am not making a silk purse out of a sow’s ear – we want dairy prices to recover and we want them to recover as soon as possible.” But the fundamentals facing “our great industry” had not changed, he said. Because of income growth in rising economies, especially China, the demand for protein is unstoppable, and not just in dairy but across all agriculture New Zealand is uniquely well placed. “That’s why everyone wants a piece of action here in New Zealand. That’s why we are seeing a huge shift in migration. But the second thing is less under our control and that is supply,” Groser added. “If dairy was simply a one way bet I can guarantee you the supply would rise to choke off that demand. So while it is a bit tough – particularly for some of the more leveraged – I want you to reflect on this. Yes, you can have too much of a good thing. But fundamentally volatility is our friend. “Fundamentally it is sending a signal to unsubsidised competitors in South America, to lightly subsidised competitors in Australia and to moderately subsidised competitors in the United States: don’t do a one way bet because volatility in dairy is the underlying reality.”
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RURAL NEWS // MAY 19, 2015
4 NEWS
Canterbury farming restrictions a possible national template ANDREW SWALLOW
A WAVE of environmental regulation is building nationwide, so be aware of what’s coming in your region and heed developments elsewhere, a Canterbury field day heard earlier this month. Speaking at a Lincoln University Dairy Farm focus day, Dairy NZ regional policy manager James Ryan said elements of what’s unfolding in Canterbury’s SelwynWaihora catchment, where LUDF sits, could be “picked up and applied” in other parts of Canterbury and further afield. There, the regulatory wave is already rolling up the beach in several catchment zones with variations to Canterbury’s Land and Water Regional Plan (LWRP) in the consultation phase of the
Resource Management Act (RMA) process. But while the legislation will require changes in the way farms are run, Ryan and his colleagues are recommending tweaks rather than radical reform at this stage. “We wouldn’t encourage you to make systems changes at this point to meet the new regulations… Our advice is to carry on doing the good stuff you’re already doing.” Ryan urged farmers to “familiarise” themselves with their farm nutrient budgets and to know the nitrate loss figures for their farm(s). “But don’t fixate on it.” LUDF is in SelwynWaihora catchment where any farm with over 15kg/ ha nitrogen loss will need to apply for resource consent by 2017. The application will need to include a
farm environmental plan which is “part of demonstrating good management practice,” he said. For those with n-loss figures below 15kgN/ha/ year, in general, they may change systems without consent provided they stay below that threshold loss figure and demonstrate good management practice. Exactly what Environment Canterbury means by good management practice will be revealed later this month at two updates on the Matrix of Good Management (MGM) project. Ryan said MGM will define the nitrogen and phosphorus losses particular farm enterprises are expected to meet. “There’s still some discussion of these numbers but we expect them to be out in a month or two,” he
told the LUDF focus day. And while there’s still some “healthy discussion” about how the MGM numbers should be used for regulation, the MGM would help “everybody compare apples with apples”. In Selwyn-Waihora the “crunch” time for dairy farmers would be 2022 by which time they’re expected to have reduced nitrogen losses 30-35% on milking platforms and 22% on dairy support land. However, in the focus day handout it said “further time may be granted” if required reductions couldn’t be met by 2022. Ryan noted an area that’s “still quite unclear” is what’s meant by “economically feasible” in developing good management practice. Environment Canter-
bury’s Leo Fietje, who was among the focus day crowd, said it’s what’s technically achievable but still economic. A good example is soil moisture measurement under irrigation. “If you’re not currently measuring soil moisture and you put that in place, that 30% [n-loss reduction] won’t be too hard to achieve, just with your irrigation management,” he said. DairyNZ’s Megan Hands urged farmers in the Selwyn-Waihora to sign up immediately for help in developing a FEP using DairyNZ’s Sustainable Management Plan template, which has been approved by Environment Canterbury. “You don’t want to see us in the middle of calving.” Also, as the LWRP is implemented in other catchments in Canter-
DairyNZ’s James Ryan warns what’s unfolding in Canterbury could be picked up in other parts of NZ.
bury, DairyNZ’s resources to help with SMPs would be directed elsewhere, she warned. South Island Dairying Development Centre executive director Ron Pellow said he didn’t think many people would
be asked to change the system they farm to but he did think they would be expected to be very efficient at what they do. – More from LUDF in Management, page 26 @rural_news facebook.com/ruralnews
‘HAIL’ MARY REGS COMING! nant when it enters waterways, affecting aquatic and marine life.” Irving says registration on the HAIL database did not mean land was contaminated. “The implication for kiwifruit orchard owners is that if there is a future change in land use, such as converting the orchard into a residential subdivision, the site will have to be investigated and soil samples may need to be tested. “At the time of a change in use the landowner will have to prove
FROM PAGE 1
earlier uses could indicate spray use.” Orchard land may have been used to bulk store or use persistent pesticides like arsenic and copperbased sprays. The council says the list also includes sports turf, market gardens, orchards, glasshouses and spray sheds, and includes about 3000 kiwifruit orchards in the Bay of Plenty. “Pesticide sprays can affect human health at elevated levels, especially when they accumulate in soils. Copper is a contami-
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the site soils are suitable for the proposed new use, and will not cause any adverse effects on human health or the environment. As long as the orchard remains in production, landowners are not required to undertake any site investigation or soil testing. This only needs to be done if the use changes. “Although we’re starting with kiwifruit, we are also registering avocado orchards and commercial glasshouses. Owners of these properties will be informed soon.”
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RURAL NEWS // MAY 19, 2015
NEWS 5
Supply problems play on payout outlook peterb@ruralnews.co.nz
THE PAYOUT to dairy farmers next season is unlikely to improve over the current season, says KPMG’s global head of agri, Ian Proudfoot. Fonterra’s payout for the current season is $4.50/kgMS. Proudfoot told Rural News that while he doesn’t have the models to calculate a payout, current knowledge and experience suggests little change is likely.
The problem for the dairy industry is one of supply and demand and this will not get back into equilibrium within the next 18 months, he says. There would need to be a major disruption to global supply – such as a big drought somewhere – to force up the price of corn in the US and so put pressure on the US system to cut back production. The last time the farmgate milk price dropped in New Zealand and then bounced back the next season was due to adverse
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weather. But Proudfoot says the present crisis is not due to weather, but more fundamental changes in the supply and demand in the market. “To my mind there is a couple of key drivers. In the US corn is incredibly cheap and farmers are strategically making decisions to grow their share of the global traded dairy market. And the political situation in Russia is not getting any easier. “Consequently that is having quite a play in how products are moving. Then there is this whole change in the quota system and, regardless of
IAN PROUDFOOT says the current crisis in the dairy industry could trigger some rationalisation in the medium term. He says a report by the Canterbury Development Corporation on high value land in the region suggested conversion from dairy back to other land uses was possible, but not in the short term. And DairyNZ has commented that farmers operating high input systems will not immediately be able to scale down their operations because they are effectively locked into the system they have. Proudfoot says conversion away from dairying will not happen soon because many of those in dairying have a lot of debt and there haven’t been enough good seasons to clear this debt. “But when you look out five to ten years or more, people will be looking at what is going to be the high value product opportunities in the market. We will see some innovation in what people grow. “If you go back 10, 15 or 20 years, dairy wasn’t our largest category of exports. It’s become that because the market was there.” Proudfoot reckons investors will be looking at innovative foods and proteins and any new opportunities. One obvious example is sheep milking and expanding goat milking. There are opportunities to use land differently. “Two or three poor dairy seasons in a row will start to focus people’s attention on whether dairy is their long term best use of land,” he says.
what you will think happens in the average season – the markets we compete in will see more product.” Also, in China domestic milk production is increasing and the Chinese Government is encouraging local businesses to use domestic production. All things considered, the growth in the world market is not fast enough to absorb this extra production. Proudfoot believes the farmgate price for milk will be set low – advance payments of $3 to $4 – which means farmers will have to budget very carefully.
Current oversupply is causing price problems for the dairy sector.
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RURAL NEWS // MAY 19, 2015
6 NEWS A FARM BOY GREGOR COSTER has a farming background and knows how to ride a quad and a side-by-side from experience in helping on his parents’ farm. He has chaired the West Coast District Health Board and the Counties Manakau District Health Board, and is a director of ACC. In 2011 he retired as professor of general practice at Auckland University, but still works as a GP in Taupo. He says in this role he treats farm and forestry workers and others in the agricultural sector. “Each year in NZ we kill 20 people in the agricultural industry and many of those are on farms. When we compare ourselves with England we have six times their accident rate per head of population. That’s a tragic situation which we do need to address.”
Worksafe wants quad bike issues sorted – chair PETER BURKE peterb@ruralnews.co.nz
WORKSAFE NEW Zealand’s chair says he’s asked the senior managers at his organisation to try to broker a deal with farmers over the carrying of passengers on quads. This arises from the huge outcry from farmers and industry organisations about WorkSafe threatening to prosecute farmers who carry passengers on their quads. Professor Gregor Coster told Rural News that he’s asked WorkSafe managers to work with farmers and the manufacturers of quads to try to find “a way forward” regarding carrying pillion passengers on quads. There is confusion
Worksafe NZ about the manufacchair Gregor turers’ recommenCoster. dations on carrying passengers. ‘Pillion passenger’ is said to mean a person sitting on the same seat as the driver as opposed to being on the back of the quad. There are also claims that carrying spray gear on the back of quads is more dangerous than a passenger. Coster says while the work is going on, WorkSafe is sticking carriage of people on to its policies on quads. quad bikes,” he says. “But surely it should “Federated Farmers not be beyond the wit of has provided excellent a group of wise heads – I leadership in this space. am referring to farmers They have a fact sheet in particular – to come up with a sound protocol on their website and and guidance for the safe we support that. Many
farmers have grasped the importance of them and their family and whanau coming home safely every day. That’s our focus and we want to see everyone come home healthy and safe.”
Coster was full of praise for the way the Ahuwhenua Trophy management team ran a large field day at a Gisborne farm recently. About 60 quads and sideby-side vehicles were
used on a tour of Maringa Station. Strict rules were imposed on those attending the day: helmets were required on quads and side-by-sides, seat belts used on the side-by-sides and no passengers were allowed on quads. Coster and three of his staff were at the field day “Coming to the Ahuwhenua Trophy day has been a great experience. It’s been great to see so many farmers so well briefed on health and safety and carrying out those proper practices,” he told Rural News. “It shows that farmers can do this and all credit to them.” @rural_news facebook.com/ruralnews
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RURAL NEWS // MAY 19, 2015
NEWS 7
Sorting out a ‘bugger’s muddle’ PETER BURKE peterb@ruralnews.co.nz
WORKPLACE SAFETY Minister Michael Woodhouse has described the old legislation on workplace safety as a “bugger’s muddle”. Woodhouse told a forum of about 150 farmers from the lower North Island that the old legislation was confusing, not easy to interpret and that there was too much of it, which he says supports the need for change. The meeting last week at Opiki, near Palmerston North, was organised by the MP for Rangitikei, Ian McKelvie. Farmers came from Taranaki and Taumarunui to hear the minister speak. Farmers vented their frustration about the proposed new legislation and the attitude of the government department responsible – WorkSafe New Zealand. Quad rules were top of the agenda. While the comments were blunt and to the point, the meeting was orderly, Woodhouse listening intently to what was said. Taranaki farmer Bryan Hocken was roundly applauded when he claimed
WorkSafe was creating fear on farms, behaving like ‘little Hitlers’ and he stressed that farmers would not tolerate being picked on by bureaucrats from Wellington. He warned that unless there was a change in attitude, farmers would stage a protest in Wellington similar to the one over the fart tax. Others including Hunterville veterinarian Martin Walshe took up the cause of passengers on quads, telling the minister that carrying a passenger on the back of a quad driven by an experienced person was the safest way of getting someone around a farm and that the risk was minimal. Walshe noted the issue was not as black and white as WorkSafe was claiming and that it was impossible to control the stupidity of some people on farms. Many speakers described the new legislation as stupid, designed for idiots and showing no understanding of what actually happened and what needed to happen onfarm. A common theme was a call for a “good practical common sense approach” to any legislation. After the two hour meeting, Michael Woodhouse chatted informally to farm-
Minister Michael Woodhouse surrounded by farmers with concerns about proposed Workplace Safety regulations at a meeting in Opiki last week.
ers who continued to express their concerns about proposed legislation. Woodhouse told Rural News that as a result of the meeting he had “a lot of homework to do”. “I am not one for sitting behind the desk passing a few rules and regulations, expecting everything to be sweetness and light,” he said. “As you can see from the forum, there is a great deal of consternation about some of the things the health and safety regulator has been doing and also a bit of concern and fear about what a new regime might look like. “I want to assure [farmers] that the
new legislation is about prevention, not punishment, and an educational partnership between industry and WorkSafe.” Woodhouse admits his department has a problem in being perceived by farmers as bureaucrats who want to ‘punish’ farmers; the minister wants this to change. He says collectively farmers have thousands of hours of experience, are individualistic and don’t appreciate bureaucrats coming in and telling them how to suck eggs. “On the other hand, it is my view that we have an unacceptably high rate of death and injury on our farms. I don’t
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accept the notion that this is as good as it gets. The question is how to get from one point to the next without wrapping [farmers] in red tape.” One criticism voiced at the meeting was the lack of communication about the new legislation and Woodhouse promised to investigate this further. But he says farmer organisations such as Beef + Lamb NZ, DairyNZ and Federated Farmers had been widely consulted. “This hasn’t been helicoptered in from Mars. It was the product of quite a detailed consultation process.” Woodhouse admits one of the most contentious and high profile issues relates to quad use, in particular the carriage of passengers. He noted that in the past week another quad rider has died on a farm. He says the issue of passengers on quads is risk assessment and how it is tailored. Woodhouse wants to get the message out there that WorkSafe is a partner in business not a punisher. But he says this doesn’t mean it won’t issue enforcement notices where appropriate.
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RURAL NEWS // MAY 19, 2015
8 NEWS
Current drought Billions for Fonterra may go on – expert plant upgrades SUDESH KISSUN sudeshk@ruralnews.co.nz
FONTERRA IS pouring at least $1 billion into plant upgrades to improve efficiency and boost returns to farmer shareholders. The co-op’s single biggest investment is at its Lichfield plant at Putaruru, South Waikato, where about $400 million is being spent on a new milk powder drier and a dry store facility. Work started last October and will finish early next year. The Lichfield plant now processes 3.2 million L/day; the new drier will add 4.4 million L/day capacity. This month Prime Minister John Key visited Lichfield to get an update on the expansion, telling Fonterra workers that the outlook for dairy remains strong despite the low milk payout to farmers this year. Fonterra managing director global operations Robert Spurway, who briefed Key at Lichfield, says the plant upgrades are part of its ‘V3 strategy – volume, value and velocity’. “These projects are about adding value for our farmers.” The drier at Lichfield will one of the largest and most efficient driers in the world. Spurway says Fonterra’s strength and scale allow it to build large plants that “can process milk more economically than anyone else in New Zealand and the world. That’s especially important when milk prices are low because it allows Fonterra farmers to make products more efficiently than anyone else
in the world.” Spurway says extra milk needed for the plant will come from existing supply and projected new supply. Fonterra is competing with independent processors for milk supply; the low milk payout is giving rise to talks about some shareholders mulling their supply options. Spurway agrees that such investments help retain suppliers and attract back suppliers who may have switched from Fonterra to independent processors. This month the Lichfield plant also held an open day for local farmers and residents. Spurway says such projects generate interest among farmers. “Local farmers and shareholders look with interest at what we are doing; without a strong shareholder base in the vicinity of such large plants, we can’t maximise efficiency and profitability.” Spurway defends the decision to invest in a milk powder plant rather than a higher value-product plant, pointing to the co-op’s food service and ingredients UHT plant at Waitoa, the doubling of cream cheese capacity at Te Rapa and doubling the food service mozzarella plant at Clandeboye. “We look at demand available for those products and we also look at our requirement to process all milk that our New Zealand farmers supply,” he says. The Lichfield plant will be commissioned about mid 2016. The new plant will add another 70 jobs, taking the total workforce to 240.
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IF IT’S dry where you are now, you’d be well advised to prepare for drought next spring, says a Marlborough farm and climate consultant. Ian Blair is an ex MAF and Wrightson consultant who now specialises in forecasting long-term pasture growth. A key difference between his and other forecasts is the emphasis he puts on soil moisture. He also takes account of existing pasture cover. Earlier this month he talked to Federated Farmers South Canterbury annual meeting and had a chilling message for delegates from the drought struck region: analysis of soil moisture trends over the decades suggest the dry will impact next season’s production too. “I warned them that the spring will be bad if we continue with this current weather cycle, the summer
will be similar and the autumn will be bad too,” he told Rural News after the event. That warning holds true for most of the currently dry areas of New Zealand, he added. While rain in April renewed growth in many areas it’s only skin deep and soil moisture reserves are still well below field capacity with time for winter recharge running out. “The trend is for below normal soil moisture and if you don’t get a winter top-up in the next 30 days you’re not likely to get enough water to replenish those soil reserves. “And if you don’t get the rain, you’re not going to get the stream flows and there’s a fair chance you’ll be into irrigation restrictions again pretty quickly.” For alpine-fed irrigation schemes, such as Morven-Glenavy in Canterbury’s far south, Rangitata South, the various schemes off the Rangi-
tata Diversion Race, or Central Plains Water, that shouldn’t be a problem but for the likes of the Opuha, which ran dry in February this year for the first time in its 16-year history, Blair’s message is bleak. South Canterbury Feds’ newly elected president, Fairlie sheep and beef farmer Mark Adams, recognises the risk. “A lot of people are relying on Lake Opuha to be full come spring but we’ve seen it in the past when it’s not filled up over winter.” Previously spring rain’s saved the day but if El Nino digs in that’s less likely. Adams says he found Blair’s presentation compelling and is keen to get him back to the region to talk to a wider audience. “He’d analysed a lot of data to try to predict what would unfold.” He sees Blair’s presentation as a “heads up” to be careful with spring planning and have contingencies in case of another big dry.
EL NINO OR NOT? AUSTRALIA’S BUREAU of Meteorology last week announced El Niño thresholds in the tropical Pacific were reached for the first time since March 2010 but New Zealand’s NIWA says it’s not El Nino yet. “There’s an 80% likelihood that within the next three months we’ll be in El Nino,” principal scientist Chris Brandolino told Rural News. “We’d like to see some of the other indicators hold for a bit longer before we declare a full El Nino.” Metservice’s Georgina Griffiths said El Nino ocean and atmo-
sphere conditions are in place but it is too early to tell whether it will become a strong El Nino. “The most obvious impact El Nino brings to New Zealand is an increase in southerly to southwest winds over winter and spring.” That means cooler winters in all areas but rain response is more complicated, depending on season and region. “The chances of a relatively dry winter increase during El Nino for the western North Island (Northland, Auckland, Waikato, Waitomo, Taumarunui and Taranaki), as well
as for Nelson and Marlborough. But… we may not notice this effect very much from day to day, since winter usually yields more than enough rain.” However, come spring El Nino may really “flex its muscles” with a stormy, often extremely cold, windy spring. In the west and south of the South Island it’s usually wetter than normal too, but the western North Island, Nelson and Marlborough, tend to be drier. Canterbury and the eastern North Island often turn drier than normal in summer.
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NEWS 9
Badge aims to protect solo workers A HIGH-TECH device designed to protect solo workers, like those working alone on farms, has been launched in New Zealand. SoloProtect, a conventional ID badge holder, is now carried by 150,000 solo workers worldwide, says the maker, the UK firm Connexion2. Discreet activation with a single button push sends GPS location data and audio to a 24/7 alarm receiving centre; in a ‘man down’ situation activation is automatic. Connexion2 managing director Craig Swallow was at the Institute of Directors conference in Auckland last month. He says the proposed worker health and safety legislation in New Zealand is “going the same way as is taking place offshore”. In the UK, users of SoloProtect include sales reps and factory workers, who work in shifts, and milk tanker drivers employed by major processors Dairy Crest and Muller Dairy. He says the uptake among farmers is lim-
ited in the UK now but the company has been targeting mostly large employers. “[Farming] is a sector that is relatively new to understanding risks… farmers don’t necessarily perceive the risk they might face. “Big organisations like Dairy Crest are picking it up; they understand the legal responsibility.” Reputation management is also a key, he says, “because these big businesses appreciate that their share price will drop if they have an incident that causes the death of a worker.” The cost of SoloProtect will be volume related – not more than a cellphone data package. The device is supplied free and users pay a monthly charge for service. “Charges will be volume dependent; users could number one or five to hundreds so there will be a sliding scale of charges.” SoloProtect’s biggest users are in the UK and the US; launching is also underway in Germany and the Netherlands.
NZ’S SHRINKING SHEEP FLOCK NEW ZEALAND sheep now tally just 29.8 million – a number not seen since during the Second World War. Statistics New Zealand figures released earlier this month for the year ended June 2014 show sheep numbers at their lowest since 1943, down almost a million on 2013. “The number of sheep fell by 3% from 2013,” agriculture statistics manager Neil Kelly said. “The last time the sheep number was below 30 million was back in 1943.” Canterbury had the sharpest fall, with 255,000 fewer sheep than the year before. Manawatu-Wanganui and Otago are now the largest sheep farming areas, each running 5.3 million. Meanwhile, dairy cattle numbers rose by about 3% last year, due mainly to increases in numbers in the South Island, says Statistics NZ. Southland dairy cattle numbers boomed, up 14% on 2013 figures. But sheep numbers still easily outstripped dairy: with just under 7 million dairy cattle counted at the end of June last year, there were at least four times as many sheep.
LATEST STORIES EVERY DAY Get upto date news at www.ruralnews.co.nz
“SoloProtect provides the only lone worker device in the world specifically designed as an identity card holder in order to be easy to wear and discreet to use,” says Swallow.
“That is then backed by full 24/7 monitoring and client support during a contracted term.” SoloProtect is marketed in New Zealand by NZ Lone Worker Solutions.
Craig Swallow with SoloProtect card.
RURAL NEWS // MAY 19, 2015
10 NEWS LET THE PAIN BEGIN – HOGGARD PETER BURKE
THE FINANCIAL pain for dairy farmers will hit home early in the coming season, according to Federated Farmers’ Dairy section chair Andrew Hoggard. He says many dairy farmers will never have experienced a situation where the payout has gone from such a high to such a massive low. Forecasts by DairyNZ claim most dairy farmers will be in over-
draft for the whole of the next season and beyond and this resonates with Hoggard’s own situation. “For next season we had done our budgets on the basis of a $4.70 payout and based on that we were able to get through next season budgeting on what we guessed was a $5.50 final payout,” he told Rural News. “That got us through without any borrowing – having looked at various things to cut and management strategies for how
we were going to change things. “But when we did the budget – after they took another 20 cents off the payout – that effectively took $57,000 out of the budget for the coming spring and has added a lot more complexity to it. Obviously we will need to get short term borrowing or look at other options for reducing costs.” Hoggard says a lot of people believe things might come right towards the end of the new season, but the market is so vol-
atile that anything could change overnight. Many farmers new to the industry haven’t really experienced sustained financial problems like those that exist at present. “Over the next year, my daughters are going to have to realise that just because something is new they are not going to be able to get it. They are going to have their expectations reset, much like me,” Hoggard says.
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SHANGHAI PENGXIN subsidiary Hunan Dakang Pasture Farming Co Ltd has applied for consent from the Overseas Investment Office (OIO) to buy the Pinny Farms – about 3600ha in various titles near Kaikohe, Northland. Hunan Dakang has also applied for consent to buy 100% of the shares of An Yuan Dairy Ltd, a wholly-owned subsidiary of Shanghai Pengxin Group Ltd, the OIO says. An Yuan Diary Ltd is the 100% parent company of Pengxin New Zealand Farm Group Ltd, which owns the Crafar Farms and Pure 100 Farm Ltd. If it gets consent it will be able to buy Lochinver Station. Hunan Dakang is also seeking consent to acquire management rights over shares in SFL Holdings Limited, which owns 73.91% of Synlait Farms Ltd.
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RURAL NEWS // MAY 19, 2015
NEWS 11
Innovators will face storm and win PAM TIPA pamelat@ruralnews.co.nz
THE DAIRY industry is facing a “perfect storm” but innovative business people on farms will carry New Zealand through the cycle, the NZ Dairy Industry Awards final was told. Gavin Roden, chairman of the NZ Dairy Industry Awards, said at the awards final dinner at Sky City that everyone sitting in the room would be nervous about where the industry was heading in the next 12 months. The dairy awards were never more relevant. With the process the 530 entrants in the awards went through and the feedback they received, they “should be well placed to ride out this perfect storm,” Roden said. The industry had been told to expect more volatility and build resilient
businesses. Head judge of the Sharemilker/Equity Farmer of the Year, Mark Horgan, said through the judging process it was evident that the emphasis was on the lower payout cycle. “The focus on lower cost pasture-based farming was a common trend with the majority of the regional winners. A number of the farms we visited had field trials for different grass types which were being studied to ensure production was being achieved onfarm. “As we look back in history this pasture based system is what New Zealand dairy farming was known for. Although this lower cost pasture-based system is not for every farmer, it showed that the contestants we judged are smart adaptive business people who are willing to
2015 NZDIA Farmers of the Year Melissa and Justin Slattery.
take risks with new technologies. “The judges believe these innovative business people will carry New Zealand through this lower payout cycle and reinforce New Zealand as the key dairy farming nation in the world.” However, the Farm Manager awards head judge, Richard Jones, said in that category there was a definite push to more
and more production, with high input farming becoming more common place. “As an industry we need to focus on the key
sudeshk@ruralnews.co.nz
PRIMARY INDUSTRIES Minister Nathan Guy says farmers are resilient and will get through the low milk-price patch. He says volatility will linger through next season, but notes that forecasters are picking the milk price to come back. Farmers are used to commodity price fluctuations and dealing with droughts, snowstorms, floods and earthquakes, Guy says. This month Fonterra lowered its 2014-
15 milk price from $4.70/kgMS to $4.50/ kgMS; with an estimated dividend range of 20-30 cents per share, this amounts to a forecast cash payout of $4.70 - $4.80 for the current season. Guy says the drop in Fonterra’s forecast came a bit sooner than expected for some farmers. Now they will be eagerly awaiting Fonterra’s opening forecast for the new season later this month. Guy told guests at the opening of LIC’s new herd testing facility in Hamilton that he was confident farmers will get through this season in reasonable shape.
a computer programme with all the relevant information so that a touch of a button will spit out pasture allocations and supplements for multiple herds. “Farm environment matters are being approached in a very proactive manner with many farms going beyond their general consent conditions in order to stay ahead of the game. Believe it or not we do care about our environment despite what many of our critics will say. Farm safety is another area where the bull has really been taken by the horns.”
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fundamentals driving profit,” he warned. “Our strength is the ability to grow grass and harvest it. It is the engine room for every farm system
and must be the foundation upon which this business is built. This will ensure we maintain our competitive edge. Everyone involved – farm staff, owners and rural professionals – needs to be focused on profitability every season regardless of payout.” Nevertheless the judges were impressed by what they saw while visiting the 11 finalists throughout New Zealand. “The use of technology is incredible. Smartphones and apps are allowing today’s managers to make accurate decisions on the go. One has even created
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RURAL NEWS // MAY 19, 2015
12 NEWS
Big kiwifruit export push to Australia PAM TIPA pamelat@ruralnews.co.nz
KIWIFRUIT EXPORTERS are planning more intensive marketing than they have ever before tried in Australia, to stimulate
demand in a maturing market. New Zealand’s Kiwifruit Product Group (KPG) is also intent on not losing ground in the Australian market in a year when volumes may
tively static in Australia, research shows, and the industry plans the promotional push in the year when a hot, dry summer should produce a good tasting fruit. Although the campaign
be slightly down. This is partly due to the demand from other markets and also because of the strength of the New Zealand dollar. Sales volumes of kiwifruit have been rela-
details have not yet been finalised, targeting nutritional value is a sensible approach, says Terry Richards, KPG’s Kiwifruit to Australia product group executive officer. “The research to date
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NZ kiwifruit sales to Australia have remained static and has the sector planning a marketing campaign to that country.
shows that the health aspects of kiwifruit are under promoted and we should be focusing on that. Recent research has backed up claims for digestive health,” says Richards. The three-year campaign costing $200,000$250,000 in the first year will start in July. “We have done some extensive research on how well kiwifruit is performing in the Australian market and we haven’t seen any marked growth in the returns out of the market. We feel to achieve that we need to undertake more comprehensive marketing work.” Richards says good market analysis has been done by the agency commissioned by KPG and creative designs will be presented shortly. The campaign will promote kiwifruit generically as the KPG members export both Hayward Green and a number of gold varieties throughout Australia. There are 12 exporters to the Australian market this year. Richards says New Zealand’s total crop for Hayward Green looks similar or slightly ahead of last year. That is an early estimate because the harvest is just starting. The quality of the
fruit being harvested is exceptionally good, he says. That means Zespri, the single desk marketer for all kiwifruit markets except Australia, is likely to take a bigger slice of the crop this year. “Due to a higher proportion of fruit going to other markets, there will be less Hayward fruit available in Australia than last year,” he explains. KPG is licensed to export to Australia under the Horticulture Export Authority (HEA), which imposes grade standards, reporting, monitoring, promotion and marketing, says Richards. Practical requirements are administered by KPG. Its key roles include quality assurance, setting grade standards and auditing packhouses to ensure fruit meets standards. AsureQuality is contracted to do that auditing. KPG also has responsibilities for market monitoring so exporters must report to the group on volumes shipped throughout the season. KPG also has group marketing and promotion responsibilities, hence the latest initiative in Australia. @rural_news facebook.com/ruralnews
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RURAL NEWS // MAY 19, 2015
14 NEWS
The old, young and religious PETER BURKE peterb@ruralnews.co.nz
NEW ZEALAND should start looking at creating specific food products which meet the special and unique needs of the elderly, the young and those of specific religious faiths. That was one of the key themes of an address by KPMG’s global head of agri, Ian Proudfoot, to last week’s Beef + Lamb NZ Ag-Innovation conference in Palmerston North. He told the conference that by the year 2050, 3.9 billion people will be eating in accordance with strict religious protocols – people of the Islamic, Buddhist, Hindu and Jewish faiths. He says the key thing about religious dietary rules is that they are strict and there is not a lot of flexibility within those rules. “If NZ can innovate products to take to market that enhance the eating experience
of a member of a religious faith and still comply fully with their religious orders, then there is a real opportunity to create new niche markets,” Proudfoot explained. “This could see us effectively getting a supported position from the faith to eat a particular product.” He gave as an example faiths that require followers to be vegetarian. “What can we do in terms of innovative vegetables and solutions that would enable us to present something that nobody else is bringing to market?” he asks. Proudfoot says NZ stands to lose a sizeable chunk of business if it just keeps on doing what it is doing now. He believes there is an exciting opportunity to develop innovative high-value proteins that still comply with religious requirements and give us a market advantage. And there is a similar opportunity to create particular foods for the ever increasing aging population. Food scien-
KPMG’s global head of agri Ian Proudfoot.
tists and research funders need to focus on the specific needs and requirements of the elderly, Proudfoot says. How will the elderly eat? he asks. “They don’t need as many calories because they
are not so active, and they don’t necessarily want food that’s difficult to chew. If we can match their tastes and provide excitement in their lives with a new product, that would benefit them and us.”
ENVIRONMENT KEY IN HIS presentation to the Ag-Innovation seminar, Ian Proudfoot stressed the importance of farmers and all those in the agriculture sector fully embracing environmental issues. He says doing the bare minimum in respect of the environment is no longer acceptable, nor is complying with environmental regulations just because the rules say so. “We should do the right thing because it is the right thing to do. We need to do what’s right openly with pride, and position our country in a such a place that no other country will be able to challenge us.” Proudfoot says a mindset change is needed and a huge step away from where we have been in the past.
CHASING GEN Y FOOD, LIKE wine, is a fashion, says Ian Proudfoot, who thinks that New Zealand, as a food producer, must be up to the challenge. He comments that attention spans of young people are pretty short these days, so there is a need to match the food fashion trend. He points to the fashion industry as an example, where there is a constant need for innovation as the life cycle of a product may be short. “If producers don’t do this, their sales will suffer,” Proudfoot explains. “I think we are going to move to a position where the focus will be on next best flavour or the next exciting innovation coming through in a food solution being presented to the market. This means having to bring out something new just to keep consumers engaged with your products. That’s a reality.” With that trend, Proudfoot believes NZ’s innovation system needs to change. “Everything has to start with the consumer.”
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RURAL NEWS // MAY 19, 2015
16 NEWS
Wool gaining, but meat still the king PETER BURKE peterb@ruralnews.co.nz
INTRODUCING OVERSEAS sheep to New Zealand’s flock has changed the nature of the wool
produced here, says Hawkes Bay wool broker Philippa Wright. She told Rural News that the thing that she sees the most is black fibre, especially in lamb
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wool, and this has to be separated out for obvious reasons. “The other thing you notice is there is bit more bulk in the wool and this bulk is actually a good thing. NZ isn’t renowned for its high bulk wools and there is definitely not as much wool per sheep. “We see that in our bales – it’s harder to press them. The average NZ bale weight is 165kg, but the exotic bales would struggle to get to 130kg. The other thing is the variation in wool. You used to get a wool clip that was the same form, but now you get a variation in the fleece and that’s due to the inter-
breeding of the sheep flock.” Interestingly, Wright believes a lot more farmers are moving back to Romney sheep. Meanwhile she says it’s been a good growing season for wool in Hawkes Bay, in the amount and quality. Prices have been firm all season and there was no dip in prices around Christmas, which normally happens. “We are already a dollar per kilo up on where we were two years ago and its maintaining that. It’s a little bit higher this year and lamb wool took an enormous leap this year and went up a
Phillipa Wright
dollar from last year – so farmers have had very good year,” she claims. But despite this Wright says farmers are much more focused on meat than on wool. She says wool makes up about 15% of a farmer’s income, so they focus on meat. But she argues that it doesn’t take much effort to maintain a good wool clip.
“Once upon a time there was always a wool person when they went to select rams, but that has lessened over the years. That means there is no attention being paid to wool. “However, a few farmers are approaching us and saying it is worthwhile looking after wool and making sure they get the best wool weights and
with it the best quality.” Wright says she’s become involved in the Campaign for Wool as part of her commitment and strategy to encourage farmers to grow more wool and increase their sheep numbers. She says in the past year about a third of her clients have increased the amount of wool they normally produce.
DOORS OPEN AT TRAINING FARM WAIPAOA STATION Training Trust is holding an open day on June 6 and 7 as part of its selection of cadets for 2016. The two-year cadet training scheme is based at Waipaoa Station, a commercial sheep and beef farm 70km from Gisborne. Each year five new cadets are selected, to learn practical skills and sit in classroom lectures. The cadets live on the station.
the day. They can Training manager gather some of Geoff Hornblow says the information the open days allow they will need later would-be cadets and if they lodge an their families to see application for a exactly how the course place on the course. operates and how it Hornblow says links with work on the Geoff Hornblow each year they get station. Open days visitors get to about 45 applications, interview talk to members of the trust 25 people and eventually select and to cadets who are there on five. The final selection is made in
September and the cadets begin the course the following January. Waipaoa works with other similar training institutes such as Smedley in Hawkes Bay and Otiwhiti Station near Hunterville. Applicants who miss selection for one of these may be selected for another. @rural_news facebook.com/ruralnews
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RURAL NEWS // MAY 19, 2015
NEWS 17
Aus meat lobby predicts good times AUSTRALIAN SHEEP farmers are banking on strong prices lamb in the coming years, but are warning of headwinds. Tighter New Zealand production, continued global demand and a lower Australian dollar will continue to boost earnings, according to Meat and Livestock Australia. MLA’s sheep industry projections for April indicate that strong market fundamentals for sheep and lamb prices should remain in place over the coming years. However, MLA manager of market information Ben Thomas says the price potential for Australian sheep and lambs could be capped this year, due to unrelenting slaughter and higher, but slow-moving supplies in Australia’s largest three markets – China, the US
and domestically. “Offsetting the potential downward pressure on prices will be a slowdown in slaughter, which will happen if the three month rainfall outlook comes to fruition,” he says. While lamb slaughter for the first quarter has remained steady on last year, the final slaughter figure is predicted to be 850,000 lower, at 21.4 million, and supplies tighter as the year progresses. On the other hand, mutton supplies are already tightening, following two very high slaughter years; mutton slaughter for the first quarter of this year is already back 20% year-onyear, despite the dry conditions. The Australian sheep flock has been revised down to just below 70 million head, as a result of
MLA predicts a positive outlook for Australia’s lamb industry.
prolonged mutton slaughter. Thomas says nevertheless Australian exports for the first quarter were up 6% year-on-year, with the US (12,302 tonnes swt), China (8714 tonnes swt) and the Middle East (16,037 tonnes swt) the largest markets, making up 63% of exports while
LAMB KILL REVISED AFTER A drier than expected first quarter, Australian lamb slaughter for 2015 has been revised higher, to 21.4 million head – which is still 850,000 head lower than the 2014 total. Tighter supplies are likely once seasonal conditions improve. The 2015 sheep slaughter forecast (7.5 million head) remains in line with the initial prediction, at 26% lower than 2014, with signs of shortening supplies already evident. Importantly, with a pronounced slowdown in sheep slaughter, and continued high lamb slaughter, the national flock forecast for June 30, 2015 has been revised to 69.8 million head (down 1.8 million head, or 3%, on 2014) – falling below the 70 million mark for only the second time in a century.
shipments to the EU were down 14% (3031 tonnes swt). “While some indica-
tions in our largest markets suggest prices could come under pressure in the coming months –
from higher global stocks and high domestic slaughter – the long term prospects for the sheep and lamb industry remain positive.” After a strong start to the year, slow moving product in Australia, the US and China, Australia’s three largest sheepmeat markets, may cap Australian sheep and lamb price potential for the remainder of the year. Offsetting this downward pressure will be a reduction in lamb slaughter, which will occur when seasonal conditions improve in southern Australia. For mutton, while slaughter and through-
put has already slowed, any sustained support for prices will depend on when restocking interest is ignited. Fortunately, after a dry February and March, the Bureau of Meteorology three month rainfall outlook points to ‘above average’ rainfall for most of southern Australia, which, if it eventuates, will go a long way to relieving the lamb supply pressure. MLA sheepmeat survey results suggest that, as at February 28 February, the Australian breeding ewe flock had remained relatively unchanged year-on-year, at 41 million head.
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RURAL NEWS // MAY 19, 2015
18 MARKETS & TRENDS MARKET SNAPSHOT
BEEF MARKET TRENDS
LAMB MARKET TRENDS LAMB PRICES
BEEF PRICES NI
Change
c/kgCWT
-5
P2 Steer - 300kg
P2 Cow - 230kg
-5
Local Trade - 230kg M2 Bull - 300kg
P2 Steer - 300kg
5.40
5.45
4.45
5.35
3.70
n/c
5.50
5.50
4.80
-5
4.95
4.30
4.35
5.10
4.10
5.00
3.90
3.75
n/c
3.60
5.10
3.85
-5
Local Trade - 230kg
4.60
4.45
-5
M Cow - 200kg
5.40
4.40
n/c
P2 Cow - 230kg
Last Year
-5
M Cow - 200kg
2 Wks Ago
-5
M2 Bull - 300kg
SI
Last Week
5.15
YM - 13.5kg
5.15
Mutton
SI Lamb
YM - 13.5kg
Last Week
n/c
2.42
+13
2 Wks Ago
Last Year
5yr Ave
7.04
2.20
5.61
2.03
2.42
7.17
5.61
Change
-2%
% Returned NI
-1%
% Returned SI
2Wks Ago 76.0%
69.7%
3 Wks Ago
78.1%
71.0%
Last Year
5yr Ave
79.33%
73.5%
71.3%
8.10
8.00
Last Year 5yr Ave
1.80
2.12
1.93
7.74
8.05
-1%
67.2%
2Wks Ago
3 Wks Ago
60.5%
61.3%
64.8%
-1%
65.6%
Last Year 5yr Ave 77.5% 71.7%
70.5% 65.0%
2 Wks Ago
Last Week 1.80
Change
% Returned SI
3.15
% Returned NI
+10
NZ$/kg
n/c
Procurement Indicator
5.49
2.73
Procurement Indicator
UK Leg £/lb
Export Market Demand
2.73
5.48
4.88
4.88
5.46
4.88
4.88
5.44
4.88
NZ$/kg
4.88
n/c
3.55
4.88
95CL US$/lb
4.88
n/c
5.91
3.15
Change
3.15
n/c
5.90
5.16
Change
5.16
n/c
5.86
5.15
Export Market Demand
5.88
5.15
n/c
MX1 - 21kg
5.13
5.11
Slaughter
5.13
5.11
n/c
PX - 19.0kg
Mutton
Last Year
n/c
MX1 - 21kg
PH - 22.0kg
2 Wks Ago
n/c
PH - 22.0kg
2.85
Last Week
n/c
PX - 19.0kg
PM - 16.0kg
4.20
n/c
PM - 16.0kg
4.00
Slaughter
NI Lamb
2.90
3.80
Change
c/kgCWT
Beef & venison prices are reported as gross (before normal levies & charges are deducted). Lamb & mutton prices are reported nett (after levies & charges are deducted).
Venison Prices Change NI Stag - 60kg SI Stag - 60kg
n/c
n/c
Last Week
2 Wks Ago
6.25
6.25
6.40
6.40
Last Year 5yr Ave 6.15
6.20
6.76
6.95
RURAL NEWS // MAY 19, 2015
MARKETS & TRENDS 19 NEWS
PRICE WATCH
BEEF: It has been all about the cows in both islands in the last two weeks as dairy cows continue to keep processing plants full. Bull and prime numbers have also lifted, both as a reaction to the onset of winter, and also as farmers anticipated falling schedules. Cattle schedules have been under pressure in both islands, particularly for cows. This is driven both by full plants, and also a deteroriating US market, as NZ cow meat volumes tips the balance of supply and demand. A weakening currency is likely to see schedules stabilse after several weeks of decline. Reports suggest that processors are more comfortable with margins being made at the new levels; given no sharp unfavourable movements in currency or market. In the South Island, cow slaughter numbers are expected to hold up for several weeks, particularly as increased numbers of carry over cows hit the works. However, reports suggest that the North Island cow kill will be running out by the end of the month.
SHEEP: Lamb prices continued to remain unchanged last week in the North Island with $5.20-$5.30/kg the range, while in the South Island the range has fallen to $4.80-5.00/kg.
Slaughter numbers remain healthy with most reports indicating rates are above this time last year. Reports are becoming more frequent that prices may remain unchanged through to the end of July. June will see a significant gap in supply, and it looks like we will see a reduction in capacity, as opposed to lifting prices in response to procurement pressure.
Change
07-May
30-Apr
Last Year
Coarse Xbred
+44
5.44
5.00
5.09
Fine Xbred
+45
6.13
5.68
5.35
Lamb
+37
6.85
6.48
5.26
-
-
-
-
Indicators in NZ$
Mid Micron
in a significant lift in NZ wool prices at auction. Supply has been below rostered volumes at recent auctions, underpinning demand. Lambs wool in particular is in good demand, with Chinese buyers dominating. Lambs wool prices reached a 4yr high at the SI auction on 8th May, achieving 6.80/kg. Crossbred wool also lifted by 50cpk at the same auction. A lower trade-weighted index against NZ’s major trading partners also supported prices.
DAIRY: The short term outlook for dairy prices remains subdued driven by large volumes of European product available on the market, particularly SMP, and the continued lack of presence from Chinese buyers. European SMP is being agressively traded in key markets, such as Middle East, North Africa and Asia (excl
Indicators in US$/kg
Coarse Xbred Lamb Mid Micron
Last Year
30-Apr
+27
4.08
3.81
4.37
+27
4.60
4.33
4.60
+20
5.14
4.94
4.52
-
-
-
-
07-May
Change
Fine Xbred
WOOL : Low wool supply has resulted
Overseas Wool Price Indicators
WOOL PRICE WATCH
China). This is expected to continue for at least the next three months. Chinese imports continue to track downwards with WMP imports for March 67% down on year ago levels, and SMP imports 47% down in comparison with this time last year. While it is believed China will have worked its way through inventories by the
end of 2015, import demand will still be lower than 2014 levels, as domestic milk production meets a portion of the demand requirements. On a more positive note, growth in milk supply from major exporters is all tracking downhill, some at a rapid pace, which implies a degree of price recovery later in 2015.
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RURAL NEWS // MAY 19, 2015
20 AGRIBUSINESS TAF-style plans for Aussie dairy co-op SUDESH KISSUN sudeshk@ruralnews.co.nz
AUSTRALIA’S LARGEST dairy co-op has voted to adopt Fonterra’s TAF-style capital structure. At this month’s special meeting, 92% of votes cast were in favour of implementing the capital structure; at least half the co-op’s 2500 shareholder voted. MG will issue TAF-like share units to investors in a bid to raise A$500 million to fund growth, listing on the ASX within two months. However, unlike TAF – where the manufacturing and dividend-paying side of Fonterra in theory benefits from a low milk price because it means a lower input cost – MG says an improved farmgate milk price will remain its primary goal. The MG vote comes after 12 months of talks with farmer shareholders. MG chairman Philip Tracy says
the ‘yes’ vote takes MG a critical step closer to achieving its goal of raising A$500 million to fund capital investments to keep paying higher milk prices. “The strength of the vote demonstrates that MG’s suppliers are not only overwhelmingly in favour of the new capital structure, but also see the growth that lies ahead for dairy foods. “They see the opportunity that Asia presents and support MG’s growth and value creation strategy. “From the outset, the board believed it was important to involve MG supplier shareholders in the capital structure development process and after 18 months of [talks], including five rounds of supplier meetings, what we saw today was a co-op in unison and alignment. I am enormously proud of the process undertaken to develop the capital structure. “We will [now] move forward
with the various offers to eligible suppliers and external investors to invest in MG’s future, with the aim of completing the fundraising process and listing the MG Unit Trust on the Australian Securities Exchange in July.” The sharemarket listing will include a Friends of MG offer of units, providing priority allocation of units to existing and former suppliers, MG employees and local residents in MG’s dairy regions. The rest of the capital would be raised through offers of shares to MG suppliers called the supplier share offer and supplier priority offer. MG managing director Gary Helou says the vote represents a vote of confidence in MG’s growth and value creation to transform the business and improve farmgate returns. @rural_news facebook.com/ruralnews
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Carr Group seeding more business growth RURAL AGRIBUSINESS company the Carr Group has further expanded its footprint in the sector in New Zealand. Canterbury Seed, a subsidiary of Carr Group, has been appointed New Zealand distributor for Pacific Seeds, part of the Australian-owned Advanta Seeds group. Carr Group and Canterbury Seed managing director Craig Carr says this will allow the company to gain market share for Pacific Seeds in the South Island. Pacific Seeds says it chose Ashburton-based Canterbury Seed after many years of cooperative business dealings in other parts of the seed industry. “We know Canterbury Seed well; they are leading edge in the local New Zealand seed business, are passionate about quality and are customer centred in their approach,” says Pacific Seeds managing director Nick Gardner. Carr says Canterbury
Seed has spent a lot on R&D and the development of a proprietary range of grain and seed products over the last six years. “The Pacific Seeds opportunity gives us a further edge in being able to offer customers superior seed products and services. I am extremely enthusiastic about the addition of its seed range to our business.” Carr told Rural News that Canterbury Seed will distribute seed under the Pacific Seeds brand via existing rural supply stores and networks, while the maize division will be supported by key personnel within the Canterbury Seed business from a sales and marketing perspective. Meanwhile, Scott Shaw, Pacific Seeds product development manager, will join the Canterbury Seed business in June. Pacific Seeds has until now been based in
Craig Carr
the North Island, selling mostly maize and corn. Canterbury Seed has a strong presence in the South Island in the arable and cereal seed market. “This move adds real diversity to our business,” Carr says. “With the growth of dairy and dairy support in the South Island, the growth in the maize and maize silage market has been huge.” He says the new arrangement will mean better support in the field for farmers and merchants. “It means a New Zealand-based company with 100% focus on the domestic seed market.”
GROWING FOOTPRINT CANTERBURY SEED is one of the largest marketers of cereal grains in New Zealand, supplying milling wheat, biscuit wheat, feed wheat, feed barley, feed oats and triticale. It is the New Zealand agent for UK based cereal breeder KWS and is also experienced in pea, forage and vegetable seed. The company’s seed products are marketed domestically and in 40 other countries.
Canterbury Seed is owned by Winslow Ltd which is 100% owned by the Carr Group. The Carr Group is a family owned company which last year bought the New Zealand arm of rural services company Elders. Other Carr Group businesses include CLAAS Harvest Centre Canterbury, Winslow Contracting Ltd, Smallbone Holden Ashburton and Lely Centre Ashburton.
RURAL NEWS // MAY 19, 2015
AGRIBUSINESS 21
NZ orchard robotics project world-leading PAMTIPA pamelat@ruralnews.co.nz
THE UNIVERSITY of Auckland is leading a collaborative project to build multi-purpose robotic systems for orchards. And the project drew high praise from another robotics expert, Robert Fitch from the University of Sydney. The project would “revolutionise automated harvesting”, he said at the MobileTECH conference in Auckland last week. Agricultural robotics is a new “hot topic” and Australia and New Zealand are leading the world, he said. The orchard project was an example of that. Bruce MacDonald, of Auckland University, described the project which has several partners and started just late last year. A key objective was to create robotic directional targeted precision spraying. Initially they were looking at pollinating flowers, but it could be used for other spray purposes. They also planned to create arms and grippers for harvesting, in particular kiwifruit and apples. Cameras would be used to find and track flower and fruit with the mobile ground platform moving through the orchard. “That enables you to find and pollinate just the flowers with just the right amount of pollen – currently with kiwifruit – and
the big market is apples,” he told the conference. A key objective is to export this technology to the global orchard industry and that is the mission of the company involved in the collarboration, Robotics Plus. Improving production for New Zealand is another goal. “The idea is to address three key problems – labour, rising costs and yield security.” Other orchard operations will be addressed in the future. The collaborative multi-purpose orchard robotics project, funded by MBIE, started late last year. Two years was spent rounding up partners so when the project came along it was easy to put together. The University of Auckland is leading the project and working on the sensing and software; Robotics Plus and the University of Waikato are focusing on the electromechanical systems such as the platforms that drive through the orchards, the arms and some spraying systems. Another Auckland group is looking at pollen spraying systems. Robotics Plus is active in this project, involved in research from the beginning including orchard test sites. There’s an advisory board and a group of significant Maori groups interested. The project has just started and they are gathering young researchers including locals and
people from overseas. A long term mission is to retain researchers in the business. The project aims for early integration of some first versions of the tech-
nology and to use a seasonal testing process. They want to be testing it in orchards in the flowering season each year and in the fruit season as well. “So they want the science
Auckland University’s Bruce MacDonald.
coming out of the laboratory almost immediately, test it in the field then go back and improve it,” says MacDonald. – The growth of UAVs pg 36
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RURAL NEWS // MAY 19, 2015
22 OPINION EDITORIAL
EDNA
The sun will rise YOU KNOW something is up in the farming world when three different government agencies are all casting a critical eye over the sector. First up, the Reserve Bank recently singled out the New Zealand dairy sector as an “area of risk” to the country’s financial system. The bank says in its sixmonthly Financial Stability Report that the country’s financial stability could be tested by the dairy sector, “which is experiencing a sharp fall in incomes in the current season due to lower international prices”. Fonterra will later this month release its milk price forecast for 2015-16 and indications are that it will be around $5.00/kgMS, down from last season’s record price of $8.40. The bank’s report adds that 11% of farm debt was held by farmers with both negative cash flow and elevated loan-to-value ratios. “Financial stress in the dairy sector could rise markedly if low global milk prices persist beyond the current season.” Reserve Bank governor Graeme Wheeler added that many highly leveraged farms are facing negative cashflows, and the risks will become more pronounced if low milk prices persist beyond the current season. Next, Statistics NZ is telling us that the country’s sheep flock is down to its lowest number – just under 30 million – since 1943. This is well down on the peak of around 70 million in the 1980s. For a country built on the sheep’s back, this is a major milestone and a reality check on the move into dairy during the past decade and just how tough many sheep farmers are doing it. One only has to look at meat processors’ ‘promise’ late last year of a $100 lamb – it’s currently $80 – to see why the nation’s sheep flock is in decline. Finally, we have WorkSafe NZ homing in on the farming sector and its less-than-impressive health and safety record onfarm. The government’s body’s workplace proposals, especially on quads, have many already stressed farmers seeing red. There is no doubt things are difficult in the sector at present. But farming has required managing risk and overcoming adversity – be it financial or climatic. However, those (mainly politicians) carping on with doomsday scenarios for farming and agriculture need to take a deep breath, offer support and dial back the criticism. Sure, dairy prices are low at present. But let’s not forget only 18 months ago they were at record highs. What goes down will go up: that is commodity cycles. The sheep sector’s issues are more problematic than dairy’s, but red meat and wool are still excellent products the markets want and need. Meanwhile, despite WorkSafe NZ’s ‘sledgehammer’ approach, there is clearly an issue with farm accidents and deaths and this must be addressed. Pushback from the farming sector has alerted WorkSafe and its minister to issues and hopefully these can be addressed. The sun will come up tomorrow and better times will come for the farming sector – you can bet on it.
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“I told you so Edna – a new report says the cost of intensive farming makes it no more profitable than farming the old way.”
THE HOUND
Want to share your opinion or gossip with the Hound? Send your emails to: hound@ruralnews.co.nz
Cheeky buggers!
Girl power
THE HOUND hears that one of the country’s largest dairy farmers has not been winning too many fans among suppliers and creditors in the South Island. Apparently the ‘hugely successful’ farmer recently emailed his suppliers and creditors, telling them that due to the current low payout he’d not be paying many of his bills anytime soon. As you can imagine, this went down like a cup of sour milk with all the people he owes money to, especially when said farmer and wife keep appearing in various dairy publications and whatnot, being extolled as great successes. The Hound suggests the said dairy couple get some Dutch courage and talk to their bank about some credit extension (which I am sure the bank would do happily) so they can pay their hard-up creditors.
Your old mate hears that a finalist in this year’s Ahuwhenua Trophy Competition – for the top Maori Sheep and beef farm – had some simple advice for the large number of young Pakeha shepherds attending the field day at Mangaroa Station. She said they could easily be winners of a future competition if they did one simple thing – married a good Wahine! A suggestion that attracted much mirth and who knows how many takers.
Thanks mum – not
Plonker!
YOUR CANINE crusader had to giggle when receiving one of those pesky emails/adverts suggesting possible gifts for Mothers’ Day. One particular email from a rural retail supplier offered an alluring array of gifts for mum. The choices were a pair of woollen gloves, a rain jacket, a set of thermals and a nice, new pair of gumboots: all excellent ways of keeping hard-working mum out on the farm in the cold weather. This old mutt is not sure if any bloke in the rural hinterland was brave enough to buy one of these ‘practical gifts’, but suggest these ideas would have gone down about as well as giving the good lady an ironing board or a vacuum cleaner for Mothers’ Day. Practical ideas but very, very stupid.
THE HOUND reckons West Coast MP and Labour’s primary industries spokesman Damian O’Connor made a complete idiot of himself over his ‘support’ during the recent Anzac rugby league test. O’Connor posted on Twitter what an ‘amazing performance’ it was from the Kiwi team – but unfortunately for him this before the game had been played. Trouble for O’Connor was he’d been travelling on the night the test was to be played, but it had been postponed for 48 hours because of flooding in Brisbane. So when the hapless MP sat down to watch the game ‘live’ his cheerleading was for a test that was played six months before. The good news is the Kiwis did win the match when it was played two days later; the bad news is this did not stop O’Connor from looking like a real plonker.
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RURAL NEWS // MAY 19, 2015
OPINION 23
Real problems that need practical solutions FARMERS ARE anxious about what the health and safety reform will bring and the new challenges that lie on the horizon. We all want to come home from work alive. Unfortunately, this will not always happen as you just can’t eliminate all the risk from farming. My own personal experience of a fatality on my own farm still haunts me to this day. Going through a police and OSH investigation was nothing compared to the emotion of meeting the parents the following day to try to explain what may have happened. I take every practical step to prevent accidents happening, but the world we live in is not perfect. We need to take health and safety seriously, but we need to make sure this doesn’t become a bureaucratic box ticking exercise which adds to farmers already mounting compliance pressures. More important still is that the practical and the lifestyle on the farm doesn’t get wiped out forever. We need the ‘social licence’ to farm. I appreciate businesses all over the country are dealing with this same issue, but talking to other industries about the frustration and extra costs is only one part of the challenge for farmers. With a farm it is not just a case of putting extra scaffolding around a building. The farm is often a wide environment with all sorts of different contours, vehicles, animals and buildings. A farm is often an extension of the backyard so the question is where does the business of farming start and stop? A farm is not just a business, it is a home and a playground. We often share the land with recreational users: hikers, mountain bikers, fishers, hunters, people wanting to pick mushrooms or gather pine cones. It is also a school: farm-
ers’ children, their friends and/or cousins often help with activities such as haymaking, mustering, etc and pick up skills that help them become the next generation of farmers. So while we now need the social licence to farm, should farmers need a social licence to bring up a family and share their land with the public for recreational use? If the risks are too great the first thing to go will be the free access to nature’s playground. Unfortunately, we as individuals are not made responsible for ourselves anymore. In the farmer’s case the consequences of an accident happening to someone on their farm, whether it was the result of their own actions or not, puts them under intense scrutiny. Don’t get me wrong, farmers should take responsibility for the health and safety of people on farm, but there is a time when people need to take responsibility for themselves. What makes it more difficult is that the boundaries between work and home are blurred. When your workplace is your home and it is an integral part of how you raise your family, it makes it pretty difficult to distinguish between the two under the regulatory culture we have. Many farmers dream of raising their children on a farm so they can experience the privileged upbringing they enjoyed or that they wished they’d had; this is now at risk of being denied. If health and safety regulation cannot differ between the two then we have a real problem, as essentially farming parents are being told how they are allowed to interact with their children. This is far from natural and would make any farmer indignant. So let’s use common sense and work with each other to come up with practical health and safety measures that help reduce accidents, rather than jumping to extremes as
we like to do. Productivity is not just in the paddock, it’s at the table where we can all meet and come up
with real-world solutions. • James Stewart is Federated Farmers Manawatu-Rangitikei provincial president.
A N E W A P P R OAC H T O T R AC T O R S
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The vexed issue of quad bike safety is just one of the concerns farmers must consider with changes to health and safety laws coming.
RURAL NEWS // MAY 19, 2015
24 OPINION CLAIMS ALL HOT AIR FURTHER TO the comments of Neil Henderson (Rural News, April 7), the issue of the impact of ruminants on global emissions is a red herring on several grounds. First, while methane is a potent greenhouse gas, it has a very short half-life in the atmosphere, as it is relatively quickly oxidised to carbon dioxide. Even more to the point is that ruminants are just one of many possible links in the natural carbon cycle, in which carbon dioxide is captured by photosynthesis into plant material, which in turn can be harvested, the energy content utilised and the resultant carbon dioxide liberated back into the atmosphere. Basically this is a zero-sum game. The production of maize or sugarcane for ethanol as a biofuel is no different from
the production of ruminants for meat and milk in terms of the global carbon dioxide balance. No better, no worse. And further to this point, the flurry of attention to tree planting as a mitigating activity, rewarded in the form of carbon credits, is equally a mirage unless techniques are developed for permanently – like forever – sequestering the captured carbon dioxide. Permanent sequestration can be accomplished only by mimicing the geological process that produced coal many millions of years ago. This is an unlikely scenario, in view of the scale required to make the slightest impact on the disastrously rising atmospheric carbon dioxide levels. The rising carbon dioxide
levels are simply the direct consequence of burning the fossil fuels that are the result of millions of years of photosynthetic capture and sequestration of carbon dioxide on a massive scale. There are many good reasons for planting trees, but making a meaningful impact on the carbon balance sheet is not one of them. The only way out is to make an immediate switch to carbonfree, or at the very least carbonneutral, energy systems. Fiddling with ruminant methane production, or indeed carbon credit-motivated tree planting, is displacement activity, with next to zero impact on the basic problem. Eric Terzaghi Warkworth
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LET’S JUST STAY AT HOME AND PLAY TIDDLYWINKS! FRANCOIS BARTON’S diatribe on quad safety (Rural News, April 21) is sickening – as is your own. His bloodymindedness towards the carrying of passengers on quads makes it clear he has no concept of reality outside of his one dimensional world and he is determined to have us all wearing nappies to work. Most if not all quads have additional carrying capacity over and above the operator, which farmers and others have utilised to great effect since the arrival of these machines. They have carried thousands of extra passengers on countless occasions without incident. As with many, many tools in the past, quads have been adapted to New Zealand requirements by the people who use them. Consequently the makers have also made huge improvements to handling and stability. Adaptation is what built this country into what Francois now lives off. If the number of quad accidents was divided into the hundreds of thousands, if not millions, of hours done by quads annually, the barely measurable result would give some real perspective on the issue. The only way to get the zero statistic Francois seems to desire,would be for us all to stay home and play tiddlywinks. A ship in port is safe, but that’s not what ships were built for Francois. Unfortunately the insulting, highly inconvenient and time wasting
rules being forced upon us by Francois and his WorkSafe gestapo do not affect editors or reporters; if they did we would get a far more balanced view. Thanks to WorkSafe’s attitudes the humble school trail ride is doomed. These have been a great weekend outing for many townies, fantastic fundraisers for rural schools and one of the only remaining bridges across the rural/urban divide. Pretty sad, if you ask me. If an honest assessment was done now, the cost of health and safety to this country would already far exceed any supposed financial benefits. It is time we took to the streets to say we have had enough. Rick Gunson Ashley Clinton Central Hawkes Bay
RURAL NEWS // MAY 19, 2015
OPINION 25
Is it really an equal playing field? TO CALL it a perfect storm trivialises the difficulties primary producers are facing in the balance between environment, welfare (human and animal) and economics. Processing companies are clear that farmers have to be compliant so that what they produce in milk and meat can be sold. In the case of milk, however, questions are being asked why companies overseas don’t face the same difficulties when their dairy farmers have far lower compliance costs. In the case of Fonterra, operating in several countries, there are big questions being raised. Are waterway protection, minimum wages and animal health regulations the same in all countries? How can Fonterra sell milk from countries where standards are lower? The standard answer is that the rules of the
country apply, but as Fonterra sells milk globally, the standard answer doesn’t make a lot of sense. Do consumers care or not? If yes, apply the standards everywhere. If not, don’t apply them in New Zealand. Blunt force trauma for unwanted calves is a case in point. In Chile, where Fonterra operates, and various New Zealanders including past and present Fonterra directors have invested in farms, blunt force trauma is illegal. Calves have to be despatched by veterinarians. Since the news item from Chile hit YouTube, blunt force trauma has been eliminated in New Zealand (except in extreme circumstances); despatch is by bullet or captive bolt. This year the question is on inductions. Because they can no longer be used as a tool to synchronise a late calving cow with grass
growth (and the main herd), bulls were taken out of the herd earlier than usual. The result is an increased number of empty cows: reports indicate a 40% increase from 12% to 17%. Good cows are being sent to the works because they are empty, and cows which normally might have been culled for health or yield reasons are being kept. The implications are deterioration in the quality of the national herd and increase in costs of production. The latter involves keeping 30% replacements in future rather than the traditional 20%.
CALL ALL SCOTS THE BARQUE Blenheim set sail from Greenock Scotland on the August 25, 1840 with 197 Scots, most in family groups, arriving in Port Nicholson (Wellington) at Kaiwharawhara on the December 27, 1840. These Scots were part of early settlement in New Zealand, building the road between Wellington and Petone and working in many of the early exploration and surveying parties until land became available. From there, they developed and farmed land mainly in the lower North Island; some opened business according to their skills, while others went further afield. To mark 175 years of settlement in
New Zealand, arrangements are in place to hold dinners In Auckland on August 22 and Wanganui on August 25 to mark the Blenheim’s departure. And a picnic will be held at Kaiwharawhara Park in Wellington on December 27, 2015 to mark the arrival. Visit the web page for the information on the settlers at www.blenheim175. wordpress.com. Face book https://www.facebook. com/Blenheim175 For further information contact: Ewen & Roz Grant ph. 06 327 3861 or email: tullochgorum@xtra.co.nz Ewen Grant R.D.11 Wanganui
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The dairy farms in Chile supplying Fonterra-owned Soprole and trying to emulate New Zealand’s mostly grass-based and efficient milking system still have inductions as a tool to synchronise the start of milking with grass growth. On top of the differences in environmental compliance and employment conditions, it isn’t surprising that forward-thinking businessmen have invested over there. The milk price is higher, too. Because it was the money of New Zealand farmers that allowed the purchase of Soprole by Fonterra, and to set up dairy hubs in China, the shareholders are right to be questioning exactly what the policies and procedures are in
other countries. The Sanlu incident in China cost New Zealand famers hundreds of millions of dollars once the melamine was discovered. The 1080
doesn’t appear to exist in either penalties or rewards. The big picture is whether or not New Zealand primary products can be branded
Are waterway protection, minimum wages and animal health regulations the same in all countries? How can Fonterra sell milk from countries where standards are lower?
threat in New Zealand is continuing to cost farmers this year because of increased surveillance and testing, to ensure that there is nothing to be discovered. A level playing field
in a manner that includes high environmental and welfare standards which are then marketed in such a way that the farmers become financially viable. Marketing has been
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RURAL NEWS // MAY 19, 2015
26 MANAGEMENT
Few opportunities to cut costs
A 42-day round and fine weather’s built LUDF average cover to just over 2600kgDM/ha, according to farm manager Peter Hancox.
In February the management team at Lincoln University were wringing their hands as the season appeared to be turning to custard, but at the latest field day the tone was much more upbeat. Andrew Swallow reports. NIPS AND TUCKS rather than drastic cuts is how Lincoln University’s Dairy Farm (LUDF) is meeting
the challenge of low payouts. The high profile unit held one of its quar-
terly focus days earlier this month and revealed it’s on course to beat budget cash farm working
expenses this season by nearly 3%. That’s despite a dry season dictating more irrigation than usual
and 15% of pasture being renewed. Milk output is back 3.3% but from 11% fewer
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cows with 43% less nitrogen fertiliser and 48% less imported silage. “These are an impressive set of metrics and I have to say we’re a little bit proud of them,” Ron Pellow of the South Island Dairy Development Centre told the focus day. “We have shown [reduced stocking rate and inputs] can be a profitable outcome, the profit, of course, being relative to what the payout is doing.” Pellow says he’s eager to see how, come July, LUDF’s final profit will compare against the half dozen top performing Canterbury dairy farms which it has benchmarked itself against in previous years. Expanding on the detail of LUDF’s season, farm manager Peter Hancox says production is now forecast at 272,500kgMS compared to 280,000kgMS budgeted. Offsetting that, $5722 and $7106 has been saved on silage purchase and making, while lower use of gibberlin saved $3524 and nitrogen price cuts another $13,169. “When we set the budget, nitrogen was about $700/t and it’s come down to the high $500s, and we’ve used slightly less,” said Hancox, reflecting on the 143kgN/ha applied. Regrassing costs have also come in well under budget at $24,000 instead of the planned $37,000 thanks to direct drilling one of three paddocks, and a dry spring reducing damage so less over-sowing was needed. Not employing any casual staff and delaying replacing a staff member who left late March leaves
$9647 extra in the bank on budgeted employment costs of $260,000, and vehicle expenses are down nearly $11,000 from a planned $31,336 thanks to cheaper fuel, less mowing, and repairs and maintenance savings. Insulating milk silos and upgrading refrigeration equipment has helped shave nearly $8000 off the forecast $30,200 electricity bill, irrigation excluded. Increased irrigation owing to the dry season put all irrigation costs, electricity included, 25% over budget at $76,878 to the end of March, and with unseasonably warm, dry nor-west weather earlier this month it was possible the pumps could be back on again, the field day attendees heard. But the biggest budget blow-out is replacement grazing and meal costs – mainly more milk powder and calf meal, taking $19,791 more than planned off the bottom line. Animal health and breeding costs are also up on budget. Adding it all up, farm working expenses (FWE) to the year end for the 167ha, 560-cow unit, are now forecast at $1.099m compared to $1.131m budgeted, but with production down 2.7% on budget the reduction in FWE/ kgMS is just one cent, from $4.04/kgMS to $4.03/ kgMS, with a cash operating surplus of $1929/ ha compared to $1963/ha budgeted. Asked whether the budget for next year would be much different, Hancox said it wouldn’t be. @rural_news facebook.com/ruralnews
RURAL NEWS // MAY 19, 2015
MANAGEMENT 27
Why it is so tough at ‘the top’ Len and Pearl Crewther once had 20 neighbours between their farm and Cape Reinga. Now their property at the tiny settlement of Ngataki is New Zealand’s northern-most dairy farm. Peter Burke reports. THE FONTERRA sign ‘supplier 10021’ at Len and Pearl Crewther’s gate hints at a story of ‘erosion’: north of here 20 other dairy farmers once developed land and livestock. No longer. They’ve all left, leaving the Crewthers the northern-most dairy farmers in New Zealand. Len and Pearl farm at Ngataki, 45km south of Cape Reinga and just a few kilometres north of the most northern golf course in the country at Houhora where Len plays every weekend. There is no store at Ngataki, the nearest being at Pukenui in the south or Te Kao in the north. Milk tankers have to travel 200km from Whangarei to collect Crewthers’ milk. Their farm is down a gravel road off SH1 in one of the narrowest parts of New Zealand. The house is a mere 10 minutes drive from both coasts and in the early days they could
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climb on the roof and see the Tasman Sea and the Pacific Ocean. Today the trees block this view. Len was just 19 when his father died and he moved back to the farm to help his mother. Within a year or so he bought the farm with the help of a Maori Affairs loan and he and Pearl, who comes from the Far North, started to run the farm. “Forty years ago we had about 80 cows, then we moved to 120 and now we are milking 260 on the 80ha block plus another 80ha which we lease. I also have a 50ha run-off but this gets very dry in summer because it is pure sand.” Today their cows are run through a 32-aside herringbone. But it wasn’t always that way, says Len. “We started off with an eight-aside and that got extended over the years as the cow numbers have increased. The eight-aside only lasted three years
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because it took us two and half hours to milk the herd.” This year the Crewther’s produced 82,000kgMS and last year it was 85,000kgMS. The year before that it was 78,000kgMS – a fluctuation dictated big time by weather, says Len. The weather is huge factor in farming in the Far North, drought being the unpredictable problem, not to mention the challenge of managing kikuyu grass pastures. To manage the summer dry conditions Len plants crops such as turnips and sorghum, makes hay and baleage and also maize silage – something he does in partnership with one of his neighbours. While many farmers feed out in late winter and early spring, farmers like Len in the Far North are forced to feed out now. “I am feeding maize silage now to the cows
Len and Pearl Crewther.
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RURAL NEWS // MAY 19, 2015
28 MANAGEMENT
Top farmer... Len Crewther owns the country’s most northern dairy farm.
Last farm standing in Far North FROM PAGE 27
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because they lost too much condition. For us late March or maybe into early April is the dry-off period. The season runs differently here. In January and February it can be so dry that it’s hard to keep condition on the cows no matter how much you feed them. So you end up feeding out supplements in January and February, hoping the rain will come. You can’t afford to go once-a-day because the cell counts will rise. Even if does rain it takes at least a couple of weeks for this to be reflected in pasture growth.” Pearl Crewther says they haven’t had any really good rain since last October and the few showers they have had in the last few weeks have been most welcome. The winds which sweep across this narrow spit dry out
the land. Len says the weather patterns in the Far North are unusual. “We can have a poor spring and quite often you will have a good summer rain or vice versa. It seems this is the way weather runs and so our production is normally sort of at the same level every year.” Kikuyu grass needs to be managed carefully and farmers like Len oversow other pasture species to boost production. Len has direct drilled plantain and also grown chicory; the latter he says tends not to last. He’s also re-grassed the paddocks that have been in crops and this has helped. Len runs an all Friesian herd and the cows are AB’d to a Friesian bull. But when it comes to the tailenders he works with neighbour John Woodward who supplies him
with bulls. “So he gets the bull he wants for temperament and we use them and then we sell all the four-day-old calves back to him. Sometimes I’ll rear 20-30 Friesian Angus heifers and sell them back to John in calf,” he says. Len and Pearl milked cows for 30 years, but now they have two staff to do most of the milking. They do the occasional shift at the weekend and Len gets involved in moving the stock around. But having just turned 60 – last Christmas day - he’s taking a back seat on doing the hard yards on the farm. Pearl says they employ a nephew and a local lad who’s been with them for a number of years. She’d like to see him get more formal qualifications which would enable him to move up the employ-
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To manage the summer dry, the Crewthers grow crops.
Cows are fed maize silage to build body condition.
ment ladder. All their four children have attended university. “We have all our grandkids with us for the Christmas holidays. We do it because this is our way of seeing them because they live in Auckland, Whangarei and Kaitaia, says Pearl. For this modest and lovely couple, their dairy farm haven, with all its challenges, has been good to them. They love the area and what it has to offer. They have raised a family who have moved off farm and are making a future for themselves. They also have strong connections to the dairy industry. One of Len’s relatives, Claude Edwards of Opotiki, won the Ahuwhenua Trophy for the top Maori dairy farm in 1975. @rural_news facebook.com/ruralnews
RURAL NEWS // MAY 19, 2015
MANAGEMENT 29
What’s the true cost of winter grazing? ANDREW SWALLOW
CROPPING FARMERS are being urged to consider the true cost of winter grazing to their businesses. During a series of grower workshops in recent weeks the Foundation for Arable Research (FAR) has outlined best practice and highlighted potential pitfalls. “We’re looking at the whole farm system and brassica and fodder beet are an increasingly important part of what cropping farms are doing,” FAR’s Ivan Lawrie told one of the workshops. Even in 2009, 30% of arable farms were growing such forage crops for dairy grazing or finishing beef or lambs on, and that percentage “has grown substantially in the last five years,” he says. “Traditionally this wasn’t our space but we felt it was falling between the cracks…. There wasn’t any integration between the three levy organisations getting information on these crops out to everybody.” Now, partly with Government funding, the organisation is working with other sector bodies to develop best practice guidelines and put numbers on the
impact of various winter grazing techniques on subsequent crops. “That’s not been easy to do,” notes Lawrie’s colleague Diane Mathers. Initial work has identified some evidence of compaction in winter grazed areas compared to non-grazed. Soil bulkdensity tests taken preand post-grazing towards the end of winter on seven farms by FAR found a range of 1.08 to 1.36 before grazing to 1.15 to 1.48 after, where untouched soil would be 1.0 and severely compacted 1.4. “You can rip the soil but it’s not going to fix that [bulk density] problem overnight,” says Lawrie. Mathers says the wetweather compaction reduces soil aggregate stability, impairing rooting and increasing risk of run-off and erosion. “Obviously if we’re going to wreck our soils we’ve got a bit of an issue.” Some farms have reported yield impacts on following crops as much as three years after a severe winter grazing event, but there’s been no scientific study to establish how severe or how widespread such incidences are. “Perhaps that’s one of the areas we need to put work into,” adds Mathers. Faster results of
MANAGING WINTER GRAZING RISK ❱❱ Graze heavy paddocks first while still dry. ❱❱ Fence across slopes grazing top breaks first. ❱❱ Consider lower yielding, winter active crops. ❱❱ Shift frequently and increase supplement in wet. ❱❱ Use portable water troughs and back fence. ❱❱ Smaller mobs – split if necessary. ❱❱ Make stand-off plans for extreme wet.
soil mineral nitrogen tests following grazing would also help growers account for residual fertility when applying fertiliser to following
crops, she notes. “You get denitrification in cold wet soils so there may not be as much there as you think. And heaven help
us if we ever get back into talking about emissions because that’s another loss farmers will get hammered with.” Losses through
drainage may also be considerable: Mathers noted that at one workshop an Environment Canterbury representative said about
half the nitrogen lost on arable farms comes from “that little bit of dairy grazing”. @rural_news facebook.com/ruralnews
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RURAL NEWS // MAY 19, 2015
30 MANAGEMENT
Lofty visions for Far North’s economic success PETER BURKE peterb@ruralnews.co.nz
NEARLY 700 people will converge on Wanganui in two weeks to learn who has won the prestigious Ahuwhenua Trophy for the top Maori sheep and beef farm. The three finalists are Paua Station in the Far North, and Mangaroa and Maranga Stations on the East Coast. The winner will receive $40,000 in prizes in addition to the $20,000 each has already won as a finalist. In the last few weeks, Paua Station and Maranga Station have run field days to showcase their farms and impress the judges. About 160 people turned out for the recent field day at Paua Station, at Te Kao about 20 minutes drive from Cape Reinga, at the top of the North Island. The station is owned by the Parengarenga Incorporation and consists of 2430ha of easy rolling coastal sand country on which are run 2800 mainly Angus cattle and 7000 sheep of which
Chad Paraone
6100 are ewes with a 118% lambing percentage. Following morning presentations, attendees were taken on a farm tour on 4WD vehicles and saw firsthand how the Parengarenga Incorporation has
developed its property over the years. The judges said they were impressed by many aspects of what has happened at the property, including the secondment of skilled farm advisors to the farm committee to realise the potential
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of the farm. They also noted the introduction of a ‘techno’ system to improve subdivision and ultimately production, the excellent calving performance and the fencing of boundaries to provide wider buffer zones to protect Parengarenga Harbour, which is a major food source for its people. The chairman of Parengarenga Incorporation, Chad Paraone, says entering the Ahuwhenua competition had helped lift their own performance and they greatly valued the feedback from the judges. He says one of the key goals is to shape the economic future of the Far North and get young people back on their land. “Someone said that Te Kao (the town where Parengarenga Incorporation is based) was becoming a bit like a rest home in the sense that the old people are still here and young people go away to find jobs,” he told Rural News. “What we want to do is to send our young people away and get them trained up and bring them back to Te Kao with all the latest techniques and
skills and give them key roles in our community.” Paraone, who works as a consultant in the health sector in Auckland, says local knowledge is a key skill in managing farming operations in the Far North. He says they need innovation, but it must be relevant to local conditions. “We have had consultants who have come here and given us advice on what we need to do, but they don’t know our conditions and the issues of kikuyu grass and pasture management,” he explains. “They don’t understand why we have to run what might to some not be the most profitable cattle mix, but our guys here know it works here. We know the climate and conditions, so it’s marrying innovation with local knowledge.” Paraone says Parengarenga is aiming to be a world-class operation and by entering the Ahuwhenua they have gained a great deal of good advice and helped kick-start their quest to do better and lift the bar.
RURAL NEWS // MAY 19, 2015
MANAGEMENT 31 Ag scholarship open till May 25
Farmers flock to field day MORE THAN 200 people turned up to the field day Maranga Station. Maranga is a typical East Coast hill country sheep and beef property and lies about 30km southwest of Gisborne on the Tiniroto Road. The station consists of 850ha (effective) on which are run 6000 Romdale sheep and 1200 Angus cattle plus 600 goats, which are mustered annually. The day started with a traditional Maori welcome at the Waerenga-o-Kuri hall where the programme for the day was outlined and a brief overview of the farm given by the owners Marty and Janice Charteris. The visitors were then taken on an extensive tour of the farm to see sheep, cattle and the bush area they have preserved. There were two stops on the tour and at these other rural professionals also spoke about the Charteris’s work. Most of the visitors brought along their own quads or side-by-side vehicles and strict safety rules were strictly enforced – no passengers on quads and everyone on a quad or a side-by-side wearing a safety helmet. The line of these vehicles stretched back over a kilometre as they wound their way through the property. A shorter tour was taken by 4WD vehicles to the major stopping points. After lunch came more presentations and Marty and Janice were presented with their finalists’ medal by Maori Party MP Marama Fox representing the Minister of Maori Development. Also present were the other finalists, Bart and Nuku Hadfield of Mangaroa Station and Chad Paraone and a number of staff and trustees from Paua Station in the Far North. Marty Charteris says they enjoyed the field day and the competition. “The whole experience has been humbling with all the focus on us; we have never had anything like this happen to us before. When someone asked me what the community reaction was going to be before the field day I was just prepared to wait and see. The reaction spoke for itself with over 200 people here,” he says. Janice says during the farm tour they stopped and were thrilled when she looked back at all the motorbikes and vehicles. “It was a very proud moment for me and especially to have my daughter and son in law with me. We took a photo and said ‘this is us’.” The judges praised the excellent use of professional help sought by Marty and Janice. They also praised their willingness to investigate and implement alternative land uses on the station to boost income streams. These included growing squash for export, grazing dairy cows and the use of goats on poorer land. Ahuwhenua Trophy management committee chair Kingi Smiler says all three farms are worthy finalists that have demonstrated a commitment and determination to create successful farming operations that will benefit them and their whanau. He says the Ahuwhenua Trophy has helped lift the bar behind the farmgate and the result is some amazing innovation.
of the food chain from the producer to the supermarket. New Zealand candidates have gained places over the years, including last year’s intake. Erica van Reenen, from Beef + Lamb NZ, who took part in 2014, says she found it useful and rewarding to “learn about the differences and similarities between New Zealand and Australian production systems from people on
the ground who all had different and interesting views on the future of farming”. The 12-day course offers participants the chance to gain a broad, practical and academic perspective on the business of agriculture from key industry leaders and senior Woolworths managers. Applications are open to people aged 20-35 years (as at Jan-
uary 1, 2015) and working in agriculture or who are in the second or further year of study in an agricultural faculty at a registered tertiary institution. Woolworths will pay all costs. Participants must be able to attend the entire course from Monday, August 24 to Friday, September 4, 2015 in Sydney. Applications are open now and close on May 25.
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RURAL NEWS // MAY 19, 2015
32 ANIMAL HEALTH CAMBRIDGE FARM ROLLERS
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New law provides for animals – M EARLIER THIS month, Parliament passed the Animal Welfare Amendment Bill – giving more protection to animals and greater enforceability against those who transgress animal welfare laws. “This bill will strengthen the protection of animals in New Zealand by improving the enforceability, clarity and transparency of the Animal Welfare Act 1999,” Primary Industries Minister Nathan Guy says. This is the first major review in 15 years of New Zealand’s Animal Welfare Act 1999, which defines animal welfare standards. “New Zealand earns around $25 billion a year by exporting animal products such as meat, milk and wool. How we treat animals matters not just to animals, but to ourselves and overseas markets.” The Animal Welfare Amendment Bill: ■■ Provides for regulations to set mandatory animal welfare standards ■■ Broadens the range of enforcement tools, including new tools that will enable animal welfare inspectors to
Primary Industries Minister Nathan Guy.
■■
prevent animal suffering as well as punish perpetrators Removes uncertainty around the ill-treatment of wild animals by targeting acts of wilful or reckless illtreatment (but not affecting ordinary hunting, fishing, and pest management)
Improves the transparency of research involving animals. Vets have welcomed the passing of the new bill saying it brings greater clarity, transparency and enforceability of the country’s animal welfare laws – further strengthening New Zealand’s excellent reputation for animal ■■
welfare. The New Zealand Veterinary Association (NZVA) says some of the key changes include the legal recognition of animal sentience, which is sensation or feeling in animals, for the first time in New Zealand law. “Expectations on animal welfare have been
rapidly changing and practices that were once commonplace for pets and farm stock are no longer acceptable or tolerated,” explains NZVA president Dr Steve Merchant. “The bill brings legislation in line with our nation’s changing attitude on the status of animals in society.”
Record animal movements. The reasons why go way beyond the rules. Yes, you have to. But spare a moment to think about why. When your stock is traceable, NAIT can help swiftly contain a disease and find the source. It’s a big reassurance for your farm and business. All movements count. Record what animals go where in NAIT and you’ll do more than just play by the rules. Check the rules at nait.co.nz/movements
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RURAL NEWS // MAY 19, 2015
ANIMAL HEALTH 33
better protection Minister, NZVA He says that the inclusion of sentience strongly reinforces that people are obliged to meet their animals’ physical, health and behavioural needs, and places New Zealand at the “forefront of progressive animal welfare legislation.” Merchant says the bill also includes a clearer definition of significant surgical procedures for animals and the policy has been retained that these procedures only be performed by veterinarians or veterinary students under veterinary oversight. He adds that the ability to effectively enforce animal Codes of Welfare has been a long-standing issue and the veterinary profession welcomes changes to enhance the protection of animals. “The Codes will now provide a clearer benchmark for compliance, rather than just being guidelines.” Merchant says mandatory standards for the export of live animals are also
strongly supported and was a central issue in the NZVA’s submission on the bill. Standards will now include consideration of the conditions and treatment of animals at their destination. “There will be more certainty for exporters and overseas markets about animal welfare requirements. Veterinarians will also have a more substantial role in the assessment and monitoring of the export process, accompanying exported animals to ensure their welfare is being met.” The veterinary profession will continue to work closely with the Ministry for Primary Industries, and other key organisations, to develop regulations to strengthen animal welfare legislation. Guy says the new regulations provide for a penalty scheme to enable low-to-medium level offending to be dealt with more effectively and also gives animal welfare inspectors the power to
issue compliance notices. The new laws also ban the use of animals to test finished cosmetic products or ingredients that are intended for use exclusively in cosmetics.
NZVA president Steve Merchant.
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34 ANIMAL HEALTH
Weaners are faring well at fairs PRICES HAVE been up at weaner fairs around the country, reflecting the buoyancy of the beef market and the need for many hill country farmers to reduce stock numbers ahead of winter, comments PGG Wrightson. Traditionally weaner calves were included in
general stock sales but farmer demand – as growers and buyers – led to the development of fairs which cater exclusively for weaner calves. PGG Wrightson Livestock manager Maurice Stewart says at least 12,000 weaners will have been sold at the four weaner fairs the company
In the past 12 months at least 107,000 weaners have been sold at PGG Wrightson weaner fairs. held at Feilding in the first five months of this year. “The fair on April 22 and 23 saw increased numbers and prices which were, on average, 20-30 cents more per kg than
2014 and 10-20 cents/kg up on prices achieved at earlier weaner fairs. “The Feilding weaner fair is one of the larger sales in New Zealand with stock coming from
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the lower North Island. Increased numbers this year reflect that many farmers, who would normally carry weaners through to spring but whose pastures were hard hit by the drought, have taken advantage of the record prices and destocked. There was strong buyer demand from farmers in the lower North Island who have grass or supplements to generate weight gain over winter.
“2000 head came forward at the April 22-23 sale, representing a good split of traditional (Angus/ Angus x) and exotic (Charolais and Simmental) calves. “The average for weaner steers was $3.57/ kg, 30 cents higher than last year; this translates to $100-$200 more per calf over prices achieved at the same time last year. Some pens of heavy steers achieved more than $1000 per head.
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AS MUCH as 10kg extra weight at age six weeks is achievable with calves raised in ‘proper’ calf housing, says Christchurch company FlexiTunnel. Such housing – versus conventional sheds and with the same feed inputs and similar management – would provide a warm, draught-free environment with adequate ventilation and plenty of sunlight. Additional liveweight gains in the important first weeks of an animal’s life help it to achieve target weights at two crucial points further into a heifer’s life: at mating (60%) and at calving (90%). “Unfortunately, calf housing often has a low priority on farms or on new conversions,” the company says. “Neglecting this important part of a dairy farm business often leads to a range of pressures on the calves, and on the person in charge of raising them. “But even today, it is estimated 75-90% of New Zealand farmers still use non-dedicated and woefully inadequate housing like converted wool sheds, hay barns or implement sheds and therefore risk their herds not reaching their potential.” It is still happening despite dedicated calf rearing facilities costing as little as 1% that of a replacement heifer, based on an assumed 10-year depreciation time of the capital expense. FlexiTunnel says there is evidence that most of the country’s replacement heifers fall short of expected liveweight targets. The financial implications are far reaching: heifers don’t reach the target and produce less milk. A heifer that falls 20% below the target weight is expected to produce 10% less milk fat in her first lactation. This can equate to an average loss of 35kgMS or $175 at a $5 payout. And this represents the loss for just her first productive year. On the other hand, heifers that reach the target weights not only produce more milk, they also have a better reproductive performance (fewer empties), a better calving pattern and remain longer in the herd, it says. Tel. 03 322 4960 www.flexitunnel.co.nz
RURAL NEWS // MAY 19, 2015
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FE-tolerant genetics essential – farmer A LARGE-SCALE dairy farmer, among the first in New Zealand to introduce facial eczema (FE) tolerant genetics into his dairy herd, says they are an “essential tool for dairy farming,” reports CRV Ambreed. Richard Sisam, managing director of Sisam and Sons Ltd, eastern Bay of Plenty, makes his comment following an especially bad season for FE nationwide, CRV Ambreed says. Sisam is now in his fouth year of using the livestock breeder’s FE tolerant genetics in his four herds and replacement heifers. “We now have over 1700 heifers over two generations from this programme showing a degree of tolerance to facial eczema,” Sisam is reported as saying. “FE tolerant genetics allow New Zealand dairy
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farmers to produce herds less susceptible to FE in the long-term. I consider these genetics to be essential.” Sisam for years used FE tolerant genetics for sheep. “In the 1980s, when we farmed 12,000 ewes, we would lose 1000 sheep in a bad FE season. Rams were sourced from the Wairarapa where FE was almost unknown and sheep had no natural tolerance to FE. “We introduced FE tolerant genetics and now, farming 5500 ewes and in a moderate FE challenged season, the most we lose is 50 lambs and we have very few ewes showing signs of clinical FE. We don’t have the intense and immediate loss we used to have.”
Sisam says although it’s too early to see the results fully, he has faith in these genetics. “It’s based on science. It’s wise to have FE tolerant genetics in the background, working alongside other preventative measures.” FE is a disease that causes lowered milk production and even death from liver damage. Humid conditions increase the number of toxic spores in pastures, which when ingested by cattle, damages the liver and bile ducts. The damaged liver cannot rid the animal’s body of wastes and a breakdown product of chlorophyll builds up in the body causing sensitivity to sunlight, which in turn causes inflammation of the skin. Clinical cases of FE are easy
to spot; skin loss and lethargy are clear signs that the animal is suffering from an FE challenge. However, subclinical symptoms, which are not noticeable, cost more to the dairy industry through the loss of milk production. R&D over the past four years by CRV Ambreed and its research partners resulted in the ability to identify FE tolerant bulls. Targeted genetics for dairy cattle are now available that will typically breed offspring that are 25% less reactive to FE challenge compared to the average bull, helping farmers beat FE long-term, the company says. CRV Ambreed currently has Jersey, Friesian and Crossbred bull teams available.
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RURAL NEWS // MAY 19, 2015
36 MACHINERY & PRODUCTS
UAVs – coming to a sky near you! WE’VE ALL seem remote controlled helicopters for the kids at the airport duty free counter, but commercial UAV’s take the game to a whole new level and can offer some tangible benefits for agriculture or horticulture. Commercial units fall into two distinct camps, either fixed wing or multirotor, each offering benefits and disadvantages. Fixed wing machines have higher payload capacities, but need larger areas for takeoff and landing and can be difficult to transport – whereas multi-rotor designs tend to be easier to transport, need only a small area to deploy, but have more limitations on payload. The subject of fuel also kicks in with
regards to load capacities, range and flying times. The key point, as with the trusty farm tractor, is what are you going to put behind – or in this case – underneath the UAV to give you information? The options include real time video, near infrared, thermal or multispectrum cameras. Each has something to offer, but what does it mean in terms of practical on farm use? On a livestock enterprise there is a potential to save time and money. On the former, the old 80:20 rules applies with regards to looking for problems then dealing with them. A UAV with a real-time video camera can cover in 15 minutes a farm that might
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take 90 minutes on a quad. This has the potential to reduce the distance travelled on the typical farm vehicle by many thousands of kilometres a year, save a great deal of fuel and reduce the likelihood of accidents. It could patrol the water troughs looking for leaks, monitor and muster sheep and spot any cast ewes. In financial terms alone, saving 40 sheep at a value of $300 each realises $12,000 per year. From a management perspective on the same farm, it could be used to check for weeds or pests, or to map the farm or the drain layout in a about an hour, compared to hiring a helicopter for half a day at around $1600. In arable or cropping situations, it has the same benefits of overlooking crops for weeds and pests, and multi-spectrum cameras can be used to look for particular traits such as crop densities, plant populations and specific diseases. With a multi-rotor unit, there is even the option of stopping, hovering and zooming in on particular targets and targeted precision spraying in orchards and vineyards. These units also have potential, especially on very large land areas, to look at normally inaccessible areas, thereby improving safety, surveying areas that
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Linda Bulk, sales director at Aeronavics NZ, displays one of the many UAVs now available for on-farm use in New Zealand.
have been damaged by weather or fire and using thermal imaging to find missing livestock or people. So the question many will ask is: “I struggle to set the video recorder or tune my car radio…. will I need to employ a fourteen year old to fly this thing for me?”
The answer is you’ll probably need a little training from the supplier or your teenager, but if you have a bit of a handle on the humble computer you should be ok. Most machines can be flown manually, but can also be pre-programmed to fly a pre-prescribed route by GPS and even return home if fuel starts to get low.
RURAL NEWS // MAY 19, 2015
MACHINERY & PRODUCTS 37
Local tractor sales hold up despite tougher times on farm As we approach National Fieldays, the foggy season has arrived in Waikato, but it’s not all gloom and doom. Machinery editor Mark Daniel recently caught up with Ian Massicks, president of TAMA (Tractor and Machinery Association) who gives an overview of local and international tractor sales for the first quarter of 2015. TOTAL TRACTOR sales in New Zealand amounted to 90 units against 1085 for the same period in 2014 – a drop of around 17% and not as bad as some doom-mongers were predicting. Massicks notes that while there appears to be some belt-tightening in the main dairy areas, other sectors such as beef and sheep, orchard and viticulture, were showing upward trends. Kiwifruit was even staging a minicomeback as growers appeared to be winning the fight against PSa. “The weather has been favourable over the late summer/autumn period and many potential purchasers saw the current climate as a ‘blip’ on the radar and have continued to invest for the longer
term,” he told Rural News. Massicks also points out that with only four months of the year gone there is still plenty of time to catch up the decline in sales as the global supply chain recovers. Meanwhile, in Australia, sales of tractors for the first quarter have shown a rise of 11.5% over 2014, with 2610 units compared to 2341. Of particular note is a healthy rise of 24% in the sub 40hp market – driven by the lifestyle sector – and a growth in the 100-200hp sector of around 20%. On the flip-side, sales of tractors over 200hp took an 8% hit in the quarter. Sales of combine harvesters have shown a massive rise of over 47%, with sales recorded at 34 machines versus 23 in the
previous year. The Australian TMA (Tractor Machinery Association) notes a number of factors causing this upswing: rain in the key growing areas, and a threat of increased purchase prices as the Australian dollar drops in value against supplier countries. This seems to be bringing purchases forward. Then there are the exceptional finance schemes, some as low as 1.9%, which has helped sales. Meanwhile, around the world, things weren’t quite so rosy with CNH citing “unfavourable market conditions in all areas” for a cut in production of around 40% in its factories, and a prediction that the total market for the 2015 year would shrink
Tractor sales are down but there are signs it is not all doom and gloom.
5-10% by volume. AGCO, the manufacturer of brands such as Massey Ferguson, Fendt and Valtra, has also reported production cuts of around 21% and a revised forecast of the market dropping by 19-21% globally. The company reports that European sales are gloomy, citing low commodity prices, high grain stocks and poor crop production forecasts. @rural_news facebook.com/ruralnews
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38 MACHINERY & PRODUCTS
Time to get salesmen to sharpen pencils THERE ARE many ways to acquire the new machinery you need to have working your land and herds. And this is a season for getting the salesmen to sharpen their pencils. Rural News hears tractor retail sales for the first quarter of 2015 are about 25% down on the same period in 2014, but there is still business out there. Many suppliers have their sales teams now trying to secure orders for high value items that need landing for the start of the new grass season in September. The farming community is in a position where it is considered a safe bet by lending institutions, so there are various finance options available. If we look beyond the shoebox under the bed stuffed with hard cash, the
major sources of credit are the high street banks, finance companies and finance brokers. Between them they offer a range of products that should suit most funding requirements and help you get that needed piece of kit on your yard. For many farmers their banks are the first port of call, but many report how quickly things can change when they try to source capital; from a gung-ho “have as much as you want” to an “end of the world-you should lock your cheque book away” attitude in difficult years. Finance companies, and brokers who tend to work with second-tier finance providers, are particularly active in the lending arena for machinery purchases, and in many cases have aligned themselves with machin-
ery manufacturers to offer subsidised finance schemes. These can prove to be very attractive with recent press offerings ranging from “pay nothing until 2016 at 0%” to “30% deposit then 36 monthly payments at 2.99%”. Assuming you can find a deposit, which might be a trade-in, and the monthly instalments, it’s worth realising that a finance rate of 2.99% represents an annual interest charge of about $1050 per $100,000 borrowed on a declining balance. The products they offer might include bank
For many farmers their banks are the first port of call, but many report how quickly things can change when they try to source capital; from a gung-ho “have as much as you want” to an “end of the worldyou should lock your cheque book away” attitude in difficult years. loans, hire purchase agreements, lease to ownership, operating leases or hire. Looking at these individual products throws up some key differences mainly surrounding ownership. Bank loans and hire purchase agreements tend to be the most straightforward with a fixed monthly repayment and a fixed term which might
run from a minimum of 12 months out to around 60 months. Most companies require a minimum agreement value of $10,000. Ownership is transferred to the user from the start, and as such any gains or losses in the value also pass to the owner. Any expenses or depreciation of the item can be claimed in annual accounts. Lease purchase or lease to own is also extremely popular in the purchase of farm machinery, and tends to be used more by businesses with a cashflow profile that is seasonal. The agreement is likely to be structured so that repayments cover the reduction in capital cost and interest, but there will be a residual component to sort out at the end of the deal. Whilst there is a fixed term as with hire purchase of between 12 and 60 months, the structure of the repayments
can be fixed, or they might be seasonal. A good example might be an agricultural contractor who has a larger monthly repayment from October through to March, and then reverts back to minimum amounts for the remainder of the year. Alternatively, the profile might be quarterly, half-annual or yearly over three to five years. The key point of difference is that ownership lies with the leasing company until the end of the agreement. At this point the customer has a number of options. They might carry on using the machine and pay a secondary rental, or trade the unit in for a new machine. Alternatively, they can refinance the machine or pay off the residual to own the machine. On the latter option the residual value must be reasonable as seen in the eyes of the IRD department. A further expansion of the lease to own route is a full operating lease, which is a route that continues to grow with larger businesses that will typically need to purchase larger, more capital intensive machines, but don’t want any surprise bills. In these instances they do not seek to own the machine, but require a fixed cost per hour to run the machine,
and when the lease ends, trade up to a newer and more productive unit. They will typically have a component built into the agreement that covers the maintenance of the unit, which will be carried out by the supplying dealer on a routine basis. The final route into new machinery which might not immediately spring to mind, but could be useful, is short term hire. Indeed, there are a number of companies throughout NZ who operate a fleet of tractors and machines for this market. It is typically favoured by contractors who have an increased demand for tractors during the busy harvest or cultivation period. It might also be a good method for ‘testing the water’ if you are trying to develop a new market in an area. Hire the machine for a season; if the demand is there, buy a machine, if not, put it down to experience. Your accountant or financial advisor will advise which route serves your business best. The good news is that the agricultural industry is seen as a “good bet” by the finance industry when compared to other areas such as vehicles. Even in a difficult payout year the lenders do not expect any major rise in default rates.
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RURAL NEWS // MAY 19, 2015
MACHINERY & PRODUCTS 39
Local machinery dealership gets ready for the future markd@ruralnews.co.nz
SINCE BEING awarded the Case IH franchise in 2009, Giltrap AgriZone has won an increasing share of the tractor market in the Waikato region. Operating out of Otorohanga, Rotorua and Cambridge, the business generates a turnover of about $50 million and has a staff of 80 people. The company recently relocated its Cambridge depot to a new site adjacent to the soon-tobe-opened Waikato expressway. It welcomed customers and guests to an opening ceremony with Prime Minister John Key officiating. “While there is some negativity due to the low milk payout, there will always be a need for food production, particularly in Asia, where they are rapidly transitioning to a western style diet,” Key
told the audience. He also noted that investment in agriculture and its support industries will always be a wise move in the long term. Andrew Giltrap, managing director of Giltrap Agri-Zone, says that while the $4 million investment may have seemed at odds with the current climate, “there was a need to relocate from an outgrown location and raise
In welcoming the 1100 guests to the opening of the new premises, Giltrap says the company wanted to provide a “world class”
location “where customers can come and discuss their requirements and staff can perform to the best of their potential.”
A FARMER’S BEST FRIEND
PM John Key officially opened the new Giltrap Cambridge premises.
the business to the next level.” The new premises will certainly do that, with modern workshops, large showrooms and dedicated parts and sales areas. This is complemented by covered storage and display areas for new tractors and machinery.
ON THE CASE BRUCE HEALY, brand leader Case in Australia/New Zealand represented the company at the Giltrap opening. Healy told Rural News Case’s policy was to work with dealerships on an individual basis to help them to achieve their potential and ultimately to lift profitability. “This is to ensure a long term presence in their areas and might mean there will be large ‘flagship’ depots in some areas, as opposed to smaller familytype units in others,” he explained. When asked what had resulted in a recent 25% rise in the Australian market for tractors, when the rest of the economy was lacklustre, Healy commented: “Those five magic letters — W-A-T-E-R – which has fallen well in the main growing areas.” He says farmers have resilience and look at the long term picture rather than short term blips. Healy adds the challenge for CaseIH was to bring products to the market that delivered real benefits to the user – be it increased daily outputs or reduced fuel consumption.
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A crowd of 1100 attending the opening of Giltrap’s new Cambridge premises.
RURAL NEWS // MAY 19, 2015
40 MACHINERY & PRODUCTS
Wairoa show set to be tech hub Society has paved the way for initiatives and forward thinking and continues to promote and encourage excellence in the rural sector.” He says East Coast farmers have had to travel to either Manawatu or Mystery Creek to attend field days to see technology and innovation, and to interact directly with developers. “Farmers on the East Coast miss out a lot so the expo is an opportunity for them to interact directly with specialist industry innovators, but in a more intimate environment and
SARAH CHARTERIS
FARMING INNOVATION of the technology kind will be at the gates of East Coast farmers next April. Broadening its scope beyond the traditional summer show, Wairoa’s A & P Society will launch the East Coast Farming with Technology Expo over two days next April at its showgrounds in the town. President Dave Martin says the society wants to provide the best opportunities for local farmers. “Historically the A & P
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closer to home.” He and the society’s event manager, Sue Wilson, say the outdoor exhibits and demonstrations could include GIS mapping, yarding systems, electronic animal identification, soil/vegetation mapping, machinery, finance, irrigation, water and feeding systems. “Basically [the event will show] anything from throughout the country that is innovative and available now for farmers to use,” says Martin. “The information and demonstrations will be specialised to the types of
Waiora A&P’s Dave Martin and Sue Wilson.
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farming on the East Coast, predominantly sheep and beef,” says Wilson. “Field days such as Mystery Creek have a strong focus on dairying because that is what is strong in Waikato. We want to provide something specific to the business needs of East Coast farmers.” The society also expects to hold information seminars in its recently refurbished pavilion. Topics could include farm succession, farm accounting, health and safety, the Plan Change 6 effect on hill country farming and alternative farming systems on the East Coast. April fits the timing
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RURAL NEWS // MAY 19, 2015
MACHINERY & PRODUCTS 41 Sharpen up to cut down on saw accidents THE STIHL Chainsaw Safety Awareness Week returns this month in a bid to tackle New Zealand’s high accident statistics. Claims on ACC for chainsaw accidents continue to rise: last year they totalled $2 million and averaged six accidents per day. Stihl marketing manager Stace Hall says it’s
worrying that as chainsaw sales increase accidents do too. “This is why we continue to run our safety awareness campaign.” The campaign kicked off with a launch last week at Myers Park in Auckland, where up to 40 women learned chainsaw safety tips with kiwi axeman and current Stihl Timbersports world champion
niques that can prevent a trip to hospital. “Raising the issue firsthand with women who are often strong influences in the household is a great idea,” says Hall. Stihl will also be supporting St John, donating a portion of the sales proceeds from its limited edition chainsaw safety packs, including the spe-
Jason Wynyard. Stihl shops around the country will also host chainsaw training events for women. The training events, including ladies’ nights and safety breakfasts, will involve women from Dairy Women’s Network and local customer groups. Qualified safety trainers will teach women about simple safety tech-
cial pink women’s chaps. Jason Wynyard says chainsaw safety is like putting on a seatbelt when getting into a vehicle. “It should come naturally. You wouldn’t drive without wearing a seatbelt or go fishing without a life jacket, why would you use a chainsaw without safety gear?” www.stihl.co.nz.
CHAINSAW SAFETY A MUST CLOSE ATTENTION to four aspects of chainsaw safety will see you right in this firewood season, says timbersports champion Jason Wynyard. 1. Use the right safety gear Even for a five minute job, your feet, legs, head, ears, eyes and hands need protection. Safety gear is widely available at power tool suppliers and hardware stores, so make a point of getting what you need. Before starting any task that involves using a chainsaw, you should be wearing: ■■
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RURAL NEWS // MAY 19, 2015
42 MACHINERY & PRODUCTS / RURAL TRADER
Risks and rewards from tractor ‘black boxes’ MARK DANIEL markd@ruralnews.co.nz
AFTER-MARKET TUNING devices for tractors and harvesters may sound a great way to get more power and torque, but they carry risks. For as little as $1500 you can get a ‘black box’ touted as unleashing useful extra power and torque from an older tractor. This appears to give cheap extra power compared to buying a bigger model. How does it work? There are three main ways of ‘tricking’ the system into what is fundamentally getting more fuel into the engine. Common rail tuning works by increasing the pressure in the common rail (reservoir) that feeds fuel to the injectors. This type of system is largely only suited to pre-2010 tractors that have basic injectors, as opposed to the high voltage Piezo units fitted to more modern engines. Limitations are largely in the capacity of the fuel pump to supply the increased demand for more fuel. Injector tuning works by extending the time the injector is pumping fuel into the combustion chamber. Note that a modern injector goes through a number of phases, measured in milliseconds, during the injection phase: pilot, pre-injection, and finally the main injection phases. This type of system works by extending the final of these phases. ECU (engine control unit) re-mapping seeks to rewrite the software in the main engine controller to effect the increase in fuel in a much more sophisticated manner, and with a much more precise control of power and torque outputs What are the benefits? As with any after-market industries there will be professional, and fly-
by-night operators. The main theme everyone promotes is power and torque increase from 25% to 35%. There are also claims that although there is a major increase in power, there can be a reduction in fuel consumption which this writer finds difficult to fathom. The suppliers suggest this happens because the extra power means the driver will run at lower engine revs thereby seeing the reduction. I suspect this is wishful thinking as most tractor jockeys use one of two positions – idle or flat out. One company also makes an unsubstantiated claim of increased engine life because the engine runs more efficiently. There is also mention of unlocking 40km/h speed restriction and the opportunity to delete the need for diesel exhaust fluid from modern Tier 4 machines. The main pros as promoted by suppliers: ■■ Major increase in power and or torque for low cost ■■ Reduction in fuel consumption (unsubstantiated) ■■ Removal of 40km/h limitation ■■ Deletion of Ad-Blue requirement ■■ Removal of exhaust gas recirculation (EGR) system. Remember, modern tractor and engine manufacturers spend a lot of their research budgets ensuring their products perform as they should do. And during the last few years that spending has been huge as everyone has striven to meet ever tighter emission regulations. In many cases this has resulted in systems such as EGR, DPF (diesel particulate filter), DOC (diesel oxidisation catalyst) and Ad-Blue to name a few. The engines of today are far more efficient than those of 10 years, or
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even five years ago. Note also that manufacturers supply tractors in a state of tune that is a compromise of performance over economy because of the varied life a modern tractor leads. It might be tedding hay, ploughing or providing PTO power for a large power harrow on the same day.
Are there risks? The straight answer is ‘yes’. Today’s modern tractor engines, transmissions and final drives are complementary to one another, to ensure they have the ability to deliver the power, and thereby get the work done, and also to ensure a built-in safeguard to handle peak loads and ensure reliability and long service life. The internal components of the tractor will vary depending on the power rating, so no surprise that clutch packs may have more plates and might be bigger diameter, and drive shafts might have bigger diameters or carry larger bearing assemblies. This might not be apparent if you stand two tractors from the same product line next to one another. Therefore the introduction of more power or
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torque might have a devastating effect on a machine’s driveline. By the same token the increase in fuel through the injection system can cause premature failure of these key components. The key pitfalls: ■■ Irreparable damage to the ECU ■■ Might cause the tractor to drop into
‘deleting EGR’. Our machines are designed for optimum performance and longevity as they leave the dealership. Modifying power and torque will place additional stresses on drivetrains and axles and almost certainly cause failures.” Peter Scott , national manager for Agco (MF, Fendt and Valtra) tractors made the same comments about the removal of warranty support from machines but also stated “dealerships are increasingly wasting a great amount of time trying to get to the bottom of failures that cannot be attributed to normal use as they seek to support their customer. Eventually they are seeing more cases of tractors that have been ‘chipped’ or modified, and are then put in the unenviable position of Tuning devices telling the customer there is fitted to tractors no factory support. help boost horsepower. This can also lead to problems for the user, ‘limp home’ mode as it protects itself particularly contractors, with a loss of ■■ An over-boost of power with calamreputation which is linked to the tractor brand they operate.” itous results ■■ Major damage to the transmission But the suppliers will say the device is undetectable, in the case of a simple or drive train ■■ Safety implications of driving a trac‘black box’ or that if a re-map of an ECU is detected and subsequently removed tor set up for 40km/h at 50km/h. So what do the tractor manufactur- and restored with an original map, then ers say about this practice? Without they will replace it with their version exception, they believe this course of free of charge. Do they have something they are trying to hide, and why? action is a big no-no. A machinery industry source has told Mark Hamilton-Manns, NZ manager for John Deere, commented Rural News that some manufacturers “John Deere’s policy is that warranty now have a feature in their diagnostic is null and void if the ECU is modified. software that will remove spurious Aftermarket performance specialists software from their ECU’s, and then will not mention this to customers. remove the original software also, thus JD does not endorse modifying ECUs, rendering the unit useless. The remedy nor does it endorse or condone other is to go to the supplier for a new item functions such as ‘deleting SCR’ or and a big invoice..
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