Has Australia leapfrogged New Zealand in China?

[This post was first published in the Fairfax NZ Sunday Star Times on 23 November 2014]

The big agribusiness news this week is that Australia and China have reached a free trade agreement. This has come as somewhat of a surprise to our Government here in New Zealand who thought negotiations still had some way to go. They have been even more surprised at the apparent quality of the agreement. And our Australian cousins have been quick, entirely for their own internal purposes, to claim their agreement is better than what New Zealand achieved some six years ago. Continue reading

Posted in Agribusiness, China, The Fairfax SST Articles | 2 Comments

The dairy robots are coming

[This post was first published in the Fairfax NZ Sunday Star Times on 16 November 2014]

Milking cows is far from exciting. People milk cows for money and not for fun. What if it could all be done by robots?

Well, those days have come. Already there are at least 16 New Zealand commercial dairy farms with robot milkers and the number is increasing rapidly. In Scandinavia and the Netherlands in particular, but also elsewhere in Northern Europe, there are now thousands of these robots. They are also coming to America. Continue reading

Posted in Agribusiness, The Fairfax SST Articles | Leave a comment

The restructuring of Silver Fern Farms

[This post was first published in the Fairfax NZ Sunday Star Times on 2 Nov 2014 under the title ‘Breaking up the family silver’]

During 2014, I have written several times about the challenges of restructuring the meat industry. I have described the period we have been going through as akin the phony war as all sides prepared for battle, but everyone waiting for someone else to make the first move. Now, within the last ten days, we are seeing the first signs of action.

The key announcement, easy to miss within a wide-ranging media release covering multiple topics, is that Silver Fern Farms is restructuring into species specific business units. This contrasts a decision reported in the 2013 Annual Report that Silver Fern Farms had re-organised its sales on a geographical rather than species basis. Continue reading

Posted in Agribusiness, The Fairfax SST Articles | 5 Comments

The New Zealand dairy dilemma

[This post was first published in the Fairfax NZ Sunday Star Times on 2 November 2014]

New Zealand earned more than $17 billion in export income from the dairy industry for the 12 months ended August 2014. This was one third of our total export income. Quite simply, without dairy, our economy would go into free fall. Yet many New Zealanders are inherently negative about our largest industry. The problem is that dairy is perceived as polluting the rivers of New Zealand. Continue reading

Posted in Agribusiness, The Fairfax SST Articles | 7 Comments

Seasonality drives the red meat industries

[This post was first published in the Fairfax NZ Sunday Star Times on October 26 2014.]

I have previously described the challenges that seasonality creates for the dairy industry. For New Zealand’s red meat industries, those issues are even more constraining. It is a key part of the reason why restructuring the meat industry is so challenging.

Sheep are designed by nature to give birth in the spring, and their fertility is much reduced at all other times of the year. Given that the market predominantly wants carcasses of 17 – 20 kg, this means that most lambs are ready for slaughter between December and April, with the peak slaughter in a shorter period from January to March. Continue reading

Posted in Agribusiness, The Fairfax SST Articles | 3 Comments

The rising star of beef

[This post was first published in the Fairfax NZ Sunday Star Times on 19 October 2014]

With so much focus on the current dairy downturn, it is easy to miss the rising star of beef. This year beef prices have been hitting record highs, both in US and NZ dollars. Young steers and bulls are fetching anywhere between $1100 and $1600 at slaughter, depending on weight and category.

The key driver has been demand for hamburger beef from the United States. Demand from China has also been increasing. Continue reading

Posted in Agribusiness, The Fairfax SST Articles | 8 Comments

Riding out the dairy downturn

[This post was first published in the Fairfax NZ Sunday Star Times on 12 October 2014]

The latest Global Dairy trade auction of 1 October has placed a new complexion on the current dairy downturn. There is now widespread concern that the downturn is going to be longer and deeper than almost everyone had expected.

Rabobank’s latest quarterly report on global dairy prospects is also just published and there is no good news in that. Rabobank is suggesting it could be the later part of 2015 before there is a substantial turnaround.

European and American production are both increasing. New Zealand production is also buoyant. On the demand side, Russia has shut the gates on dairy imports from Europe because of the Ukrainian crisis. The Chinese are still buying but not fast enough. The dollar is high and may stay that way, despite efforts by the Reserve Bank to nudge it down. Continue reading

Posted in Agribusiness, The Fairfax SST Articles | Leave a comment