Fonterra

Are we at Peak Dairy?

Eric Watson suggests we have reached the maximum production capacity.  We can not really make more.  So what next?

New Zealand has led the world developing technologies to maximise output from our limited land resources. Unfortunately, I believe we are close to reaching the geoclimatic and biological limits of our “pasture-based” model.

The reality is, the gap between the maximum potential yield of New Zealand’s pastures and utilisation of this pasture has diminished to the point where little incremental growth in production is possible without alternative feed sources.

It is no surprise that continued increases in dairy production have gone hand in hand with significant increases in the use of imported supplementary feed stuffs, such as palm kernel which, with increased rates of applied nitrogen, contribute to nutrient loading on dairy farms.

New Zealand is caught between the necessity for economic growth and our obvious geoclimatic limitations.

As an isolated exporter of commodity dairy products, our opportunities to add to our export value without increasing volume is limited, but to maintain our market share we need to increase volume.

New Zealand’s dairy exporters have continued to explore opportunities for value-added products to increase our export values, but these initiatives are dwarfed by the impact of volume in the major commodity dairy products we export, and ultimately this is what motivates our farmers and the dairy industry.

The key here is the ability, or rather the efficiency, of ecosystems to convert nutrient inputs into product.

Read more »

Certainly one way to feed the kids

When Hone Harawira got the arse card from parliament so did his “Feed the Kids” bill…until Metiria Turei picked it up.

But do we really need a bill to somehow get the kids fed when their damn useless parents should be doing it…and surely we can find funds from elsewhere for the programme?

Josh Forman has an idea…knocking wasteful parliamentary travel on he¬†head for a start.

Now the Greens are the sponsor of the bill he has looked at their travel expenses and found something interesting.

In the period from 1 October 2013 through 30 September 2014 Mr [Steffan] Browning has spent a grand total of $166,369 on surface and air travel courtesy of the good ole taxpayer.

There may be a valid reason for all this travel by the 60 year old from Clyde, who incidentally ran unsuccessfully for the Kaikoura seat at the election, though if there is, neither he, nor his party have bothered to tell me what it is.

You see, if there was a good reason for what appears to be a pretty huge amount of travel considering they guy is based at the top of the South Island, a proverbial stones throw from Wellington. The problem I have is that the from what I can see, not only has Mr Browning done three fifths of stuff all since his election. ¬† Read more »

Red tape suffocates artisan food producers

Caleb Harris has the story

A grandmother who hand-milks four cows has taken on the world’s best cheesemakers and won – but she’s facing defeat at the hands of Ministry for Primary Industries food safety officers.

Biddy Fraser-Davies’ boutique Cwmglyn Farmhouse Cheese, from Eketahuna, has won a silver medal at the World Cheese Awards, been served up at Prince George’s Government House playdate, and is on the menu at top Wellington restaurants Logan Brown, The White House and Shed 5.

Tourists flock to her 4.4-hectare farm 20 minutes north of Masterton to enjoy a unique, gate-to-plate culinary and farming experience. Each of her cheeses bears the name of the jersey cow whose milk was used to make it.

But earlier this month a letter from a ministry food safety official told her she had until November 1 to get a $3680 risk management audit, or be forced to close.

That sum amounts to about a ninth of her annual turnover from a business that produces less than a tonne of cheese a year and earns her about $33,000.

Fraser-Davies, 72, believes she is being made to pay for the Fonterra contamination fallout, and says food hygiene rules do not allow for cottage industries such as hers.

The same joyless government grey faces have previously tried to put an end to sausage sizzle fundraisers and cake stalls at the local Fair. ¬†The law here is obviously too blunt when it requires hobbyists and volunteers to follow the same procedures at a cost that isn’t even an hour’s turnover to the big companies. ¬† Read more »

You can buy milk at 75c per litre in Iceland stores, and UK farmers say it’s killing them

Fascinating tale of how supermarkets use a product as a loss leader, but that apparently causes problems up the supply chain:

Farmers are threatening protests after Iceland cut the price of a four-pint milk carton from £1 to 89p.

The budget store is using milk as a loss leader ‚Äď selling below cost price to lure in customers ‚Äď with the result it is even undercutting discount chains Aldi and Lidl.

However, the news has angered dairy farmers who complain they have been hit with a succession of punishing price cuts which are forcing them out of business.

FFA chairman David Handley said: ‚ÄėThis move by Iceland is a disgrace. It will feed through to lower prices paid to farmers.

‚ÄėThe supermarkets are devaluing milk. We are almost getting to the point it is so cheap that people will buy it because it doesn‚Äôt matter if they throw it away.

Rob Harrison, chairman of the National Farmers‚Äô Union dairy board, said: ‚ÄėWe will be speaking to Iceland. This continual devaluation of milk is a real concern to our industry.

‚ÄėIt is rather rash and stupid to do this when lots of dairy farmers are suffering with low prices. Read more »

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The Empire Strikes Back: Official resistance to New Zealand investment in China

The Markets and Banking reporter for the NZ Herald, Christopher Adams has this story

A high-profile Chinese dairy commentator is calling for China’s government to block Fonterra’s investment in Hangzhou-based infant formula maker Beingmate, showing criticism of foreign investment isn’t a purely one-sided affair when it comes to the business relationship between New Zealand and its biggest trading partner.

Foreign investment, particularly from China, has returned to the forefront of public debate in this country since it emerged that Shanghai Pengxin, the owner of the Crafar Farms, wants to purchase the more than 13,000 hectare Lochinver Station in the central North Island.

Opposition parties have opposed the potential sale and NZ First leader Winston Peters has gone as far as vowing to buy back strategic farmland from foreigners.

But it looks like New Zealand is copping a bit of its own medicine in China.

Time for the Labour, Green and NZ First hypocrites to take their medicine.  They are all very happy about Fonterra sticking it to them foreigners, but lo and behold if we were to let them buy stuff here!

It’s simply dog whistle politics that is fueled by the xenophobia that used to be Winston Peter’s personal brand, but has since been adopted by the Greens and Labour as well. ¬† Read more »

Why isn’t David Cunliffe insisting Fonterra sell all its overseas holdings?

via TV3 News

via TV3 News

Fonterra Cooperative Group Ltd. (FCG), the world’s largest dairy exporter, plans to boost investment in dairy farms and plants in China and other emerging markets as rising demand pushes milk prices higher in the next decade.

‚ÄúWe need to look outside of¬†New Zealand, we need to look at other milk pools,‚ÄĚ Chief Executive Officer Theo Spierings said on a conference call today after the Auckland-based company reported an 18 percent rise in first-half profit. ‚ÄúIf we only focus on New Zealand, we‚Äôll lose market share, we‚Äôll lose relevance.‚ÄĚ

— bloomberg.com, March 2013

David Cunliffe created Fonterra you know. ¬†He did. ¬†He’s so proud of it. ¬†It’s on his CV. ¬†And Fonterra are doing so well, they are expanding by buying overseas properties. ¬†In China, even. Read more »

Told you plain packaging will extend beyond cigarettes, now it will be a trade weapon

I’ve been talking about it for ages, and commenters and other including politicians scoffed…Don’t be silly Cam, plain packaging legislation is for tobacco only.

Except it gives the antis a toehold and now we are seeing the results of that. On top of that tobacco producing countries can use it to conduct a trade war against our exporters.

New Zealand’s wine and dairy producers will be forced to export their products without branding in retaliation for Government’s introduction of plain packaging of cigarettes, tobacco firms are warning MPs.

A senior Indonesian official has been reported saying New Zealand exporters will pay a price for draconian law changes which will require tobacco producers to sell their products in plain packs with standardised fonts and colours.

Tobacco firms and lobbyists repeated the warning to a Parliamentary committee yesterday.

Emergency Committee for American Trade president Cal Cohen told MPs that plain packaging was likely to lead to restrictions of trademarks for other goods such as wine and dairy.

Tobacco giant Phillip Morris pointed to a letter by Indonesia’s former Minister of Trade Gita Wirjawan to New Zealand’s Ministry of Health, in which he said plain packaging breached WTO rules and would have an impact on New Zealand exports.

Wine and dairy…ouchy…I wonder what Fonterra and all the exporters of dairy products think about that…especially those exporting branded baby formula to China.

What about sugar containing products…will they be the next victims in the war of business?

The former minister, now the Indonesian Director General for International Trade Co-operation, made a similar warning in a local news report: “If the cigarettes we export there are not allowed to have brands, then the wine they sell here shouldn’t also.”

New Zealand’s exports to Indonesia were worth nearly $900 million, half of which came from dairy. Food and beverages made up 70 per cent of total exports.

Trade Minister Tim Groser said New Zealand was “exercising its normal rights” through the plain packaging legislation.

He told the¬†Herald: “I’ve met numerous Indonesian officials since we initiated that action and no concern has been expressed to me personally.

“So I would be very surprised if I hear talk in the future of that.”

Be surprised Groser…it will happen. The health busybodies will move from tobacco to sugar, to alcohol to dairy…they will use the same tactics, the same denigration and on top of that use state funding and taxpayer money to do it all.

If tobacco producing countries retaliate they will use the very same arguments Groser is advancing…that¬†[insert country]¬†was “exercising its normal rights” through the plain packaging legislation against alcohol…which from a muslim country like Indonesia is perfectly defensible on religious grounds without any pesky scientific evidence, which is severely lacking in tobacco legislation.

Corporate New Zealand better gear up for a war with the state funded health busybodies, it is coming whether they like it or not and their silence against plain packaging simply emboldens them toa ttack harder.

Leaks tell PR nightmare about to get worse for Countdown

unnamed-1Today in the NZ Herald, Countdown’s boss Dave Chambers has a nice little PR puff piece…banging on about how proud he is of the way Countdown conducts its business.

His line “Kiwis like to buy local products, because of the high quality of our nation’s produce” is soon to be proven to be nothing more than PR spin.

All is not well in Countdown land by the amount of information flooding into the tip-line from disgruntled employees, who are seeing Kiwis protesting outside their supermarkets, Facebook hate pages and constant negative media attention.

The buzz from the tip-line is hinting at a massive hit to New Zealand’s dairy suppliers is about to be announced soon. If my source prove out then Dave’s PR woes will only deepen. If he thinks he can laugh off John Campbell and Mike Hosking and bluff his way around Shane Jones’s accusations, this announcement will hit at the core of New Zealand’s heartland. ¬† Read more »

Let’s have a living tax on companies

David Farrar discusses a “living tax” proposal for offshore companies who pay little or no tax in New Zealand…like APN and Fairfax.

This old fashioned concept of paying tax on profit must be disposed of. We should demand a fair tax system. Let‚Äôs calling it a living tax ‚Äď the level of tax a company should pay so that it no longer feels wretched and is helping fund a civilised society.

I think a 15% tax on revenue would be a fair living tax. ¬†Both the Herald and the Dom Post have repeatedly run stories and editorials comparing tax to turnover, not profit. So we should start the living tax campaign with them. Here‚Äôs how it would work:¬† Read more »

More hand outs to bludging farmers

The Taxpayers’ Union is highlighting yet another example of farmers with their hands out.  This time sheep and beef farmers are getting a cool $15 million from Steven Joyce for genetic engineering research. It blogs:

As Mr Joyce goes on to point out in the release, New Zealand already leads the world in pastoral animal and plant genetics.

‚ÄúAs a nation, we are already leading the world in pastoral animal and plant genetics. This partnership will help us maintain this critical position and to continue to build on it through further research and development in sheep and beef genetics.‚ÄĚ

The first part of that paragraph is correct – NZ does lead the word. What is not clear is why taxpayers need to stump up to keep us there. Why does this¬†multi-billion dollar export industry¬†suddenly need the¬†Government pouring millions into it? Expecting increases in farmers’ profits is not justification.

This funding is for good headlines, not good economics. What other industries have their normal research and development costs borne by the taxpayer?

Here here.  I wonder if Joyce will be dolling money out to Fonterra next week…