ISSN No.1172­9481

© Copyright 2001 Inventas Media Ltd

Volume 01, No.24

June 20 - 26, 2001

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| Agribusiness | | Trade | Livestock | Horticulture |

| Soil, Water, Land, Arable | Industry | | Forestry |

Agribusiness

$5/kg for Milk Solids

The New Zealand Dairy Group and Kiwi Co-op Dairies have announced their first joint final price for the season of $5 a kilogram of milk solids. This is 40¢ up on the Dairy Board's final price of $4.60 announced last month and what most farmers were expecting for company margins. At $5/kg MS, a farmer with an average production herd would have earned $350,000 gross in the 2000-01 season. The payout from NZ Dairy Group alone will be $3.14 billion ­ 33% up on the previous season, after a 10% increase in milk solids production. The two companies have also announced a joint advanced price for milk solids for this season of $3.45/kg of milk solids. The Dairy Board's estimated price at the opening of last season was $3.65-$3.75/kg of MS. (Farmindex)

Milk Price Up in Australia, Too

The first of Australia's big-four milk processors has announced a 25% increase in its new season price. The company, Murray Goulburn, said the low A$ and firm world prices were driving its returns to suppliers to some of the highest levels ever. Victorian dairy farmer, Tim McCurdy, was glad to hear some positive news for an industry that has been in the doldrums. It would put a little bit more energy, a bit more enthusiasm into the job, and in terms of capital development, many farmers would start to do the things that they had probably put off for a few years, he said. (ABC Rural News)

Local Market Prices Up

National distributor, Dairy Foods, has advised supermarkets to expect price rises in August of up to 22% for cheese, up to 17% for butter, up to 4% on yoghurts and 5¢-10¢ on a litre of milk. Dairy Foods said it could not absorb the export-led price it would have to pay for its milk supply this season, on top of last season's steep price increase. Dairy Foods has about 45% of the domestic market. Its main competitor, Mainland Products, has also signalled that it will have to react to the impact of higher milk prices. Dairy Foods chief executive, Peter McClure, said the result of higher prices for milk to dairy farmers had been a $27 million increase in milk-based costs to the company last year and a further $25 million increase this season. The rises were not related to the formation of GlobalCo, they were beyond GlobalCo's control, he said. (The Dominion)

More Tas-Ag Farms Sold

Tasman Agriculture said sales of its farms had accelerated, with 61 properties now sold and only 6 south of Dunedin left to sell. The 61 properties generated proceeds of $212.6 million. Cash proceeds of $203.6 million had been settled in June and $9 million was scheduled for June 2002. The company still has substantial land holdings in Tasmania. (Otago Daily Times)

Southland Farmer Bucks Global Trend

A Southland farmer has formed one of New Zealand's last independent dairy co-operatives and won a 3-year contract to supply an Australasian food distributor, Elco Food Co. Southland dairy farmer, Bill Muller set up his Premier Dairy Co-operative in October. Mr Muller said he would sign a contract in the next few days to supply a minimum of 150 tonnes of cow Feta and 50 tonnes of Haloumi cheese a year. The contract is worth about $1.3 million a year. Mr Muller would initially supply milk from his 300-cow herd for the products, which would be produced at Balclutha's sheep Feta factory. Extra suppliers would be needed for next season. Elco Food managing director, Emmanuel Kotis, rated the Southland-made Feta and Haloumi as the best in Australasia. (Southland Times)

New Strong Wool Business Proposal

Representatives of strong-wool growers are putting an improved business proposal to the wool industry. The newly formed establishment group had built on past work to the point where it could now put a proposal to prospective industry partners, the chairman, Sir Brian Lochore, said. "We are going to the industry with our proposal for new supply aggregation initiatives over the next week or so. Our proposal is to establish a grower-controlled procurement and supply entity that negotiates arrangements between industry players, rather than a bricks and mortar type of organisation, which would require a lot of capital," he said. (Otago Daily Times)

Big Boost in Tractor Sales

The NZ tractor market continues to boom, with strong sales being pushed along by a buoyant agricultural economy. Brian Matchett, chairman of the Tractor and Machinery Assn, said sales had continued on a high since April when they were almost double those of previous years. The market was still 'pumping', he said, but TAMA members were not sure if the high level of sales would continue. In the first 4 months of this year, 632 tractors over 40hp were sold, an 82% rise over the same period last year. With an average price of about $90,000, the jump in sales had potentially created an extra $25 million income for farm machinery dealers around the country. (Straight Furrow)

Montana Hearing Completed

The NZ Stock Exchange committee considering rule breaches in the takeover battle for Montana Group had completed its one-day hearing, a lawyer for the committee said. Sarah Katz, counsel for the NZSE's Montana Standing Committee, said a decision would be released as soon as possible. (Gisborne Herald)

Dairy Company Ratings

Credit ratings agency, Standard and Poor's, has maintained its credit watch on the 3 dairy groups that will comprise GlobalCo. The NZ Dairy Board's double-A long-term rating was left on credit watch with negative implications, and its A-1-plus short-term rating was affirmed. NZ Dairy Group's double-A-minus long-term rating was on credit watch with developing implications, and its A-1-plus short-term rating was on watch with negative implications. Kiwi Co-op Dairies' A-plus long-term rating was also on credit watch with developing implications, and its A-1 short-term rating was being watched. (NZ Herald)

Blue Sky Up 88%

Southland meat company, Blue Sky Meats, recorded an 88% increase in after-tax profit last year at $4.24 million, compared with $2.26 million previously. Sales rose to $80.7 million compared with $59.3 million in 2000, and operating revenue rose to $83 million ($63 million), and operating costs rose to $75.7 million ($56 million). (Southland Times)

Mid-micron Wool in Demand

Mid-micron wools were in keen demand at Thursday's final South Island wool sale for the season. The medium wools indicator lifted 46¢/kg to 622¢ compared with the previous week. 10,926 bales (1293 tonnes) were on offer, and 12% was passed in. The strong wools indicator rose 9¢ to 424¢/kg and the lambswool indicator was unchanged at 411¢/kg. The next sale is at Napier, 28 June. (Otago Daily Times)

Aus Wool Sinks Back Through A800¢/kg

Australian wool prices continued to sink lower this week, dropping back through the A800¢/kg level despite low offerings. Some micron types lost as much as 40¢/kg, leaving the Eastern Market Indicator wallowing at A796¢/kg clean. A lower A$ failed to inspire Chinese buyers, and the trade was tipping prices to drift lower during the 3 weeks left before the mid-winter recess. (ABC Rural News)

Retail Business Boosted

Farmers have been making big cash injections into the retail economy, according to Statistics NZ. Southland led the way in regional spending, beating all other regions with a 12% increase from April last year to March this year. This was well up on last year, when retail sales in Southland increased by 1.1%. While areas like Southland, Otago and Canterbury all showed an increase in retail spending, urban centres remained more subdued, especially Auckland. However, urban centres were expected to share in the wealth as farmers spent more in the cities. (Southland Times)

Record Season for Goat Meat

North Island goat meat processors report a busy season, with most goats arriving in good condition and in record numbers, but the goat kill in the South Island is down on last year. The total NZ kill to 26 May was 79,950, a 38.2% increase on the 57,862 for the corresponding period last year. Allen Billington, chairman of the Meat NZ Goat Council, said exporters reported that they could find a market for twice the numbers that were being processed without affecting the price paid to producers. (Straight Furrow)

Higher Price for Pork

Mainland Products is proposing to increase the price of pork products from mid-July. Mainland has the Kiwi, Frasers, Top Hat and Hutton brands and about 60% of the bacon and ham supply market. It wants to raise prices because of higher imported pigmeat prices forced up by consumer reaction to the foot-and-mouth disease and swine fever crises in Europe - and a shortage of NZ pigmeats. Mainland's price for a whole ham leg is to rise 46%, and some bacon products would rise by $2.30/kg. (Otago Daily Times)

FMD Boosts Venison Sales

NZ venison producers are reaping the benefits from the consumer backlash against the BSE and foot-and-mouth disease outbreaks in Europe. There has been unprecedented European demand for venison outside of the traditional 'game' season and prices have risen as a result. At the beginning of the month, prices for a 60kg stag ranged from $8.30/kg in the North Island to $8.75/kg in the South ­ a massive 35% ahead of the same time last year. Supply in both islands is tight, so exporters now expect a slow start to the premium chilled season. (Straight Furrow)

Trade

US Farmers Will Fight

The American Sheep Industry Association said it fully expected the Bush Administration to conduct a review of tariffs and quotas on Australian and New Zealand lamb, rather than lift them quickly in line with a WTO ruling that the tariffs were punitive. Assn executive director, Peter Orwick, said the domestic US lamb industry would press the Administration to take another look at the 3-year tariff and quota regime - now ending its 2nd year - to see if it could be made WTO-compliant. Orwick admitted there was a difference between compliance, and simply lifting the restrictions. The Trade Commission could be asked to conduct a review and to be further instructed to bring the case into compliance so that it was consistent between WTO provisions and US trade law, he said. That process could take months. (ABC Rural News)

Big Brother Is Eyeing Australia

New Zealand's emerging dairy giant has set its sights on Australia's fragmented dairy industry, Australian analysts believe. They predicted a new round of merger discussions now that NZ farmers had approved the creation of the world's 9th-largest dairy producer, with $A8 billion in sales. Merrill Lynch analyst, Chris Nicol, said that thanks to the merger, the single player in New Zealand now had several Australian beachheads, including an 18% stake in National Foods, 25% of Bonlac Foods, and 68% of Western Australian producer, Peters and Brownes. "I think the New Zealanders have done a number on the Australian dairy industry, because they now have major stakes across the industry," he said. The National Foods stake might prove the most useful, because its listing on the Australian Stock Exchange would be valuable to all the dairy players seeking new ways to raise capital. Mr Nicol said the New Zealanders were focused on world-wide exports, and were under no pressure to move quickly in Australia. (Melbourne Age)

US Farmers Look to GlobalCo

America's largest dairy co-operative, Dairy Farmers of America, wants to form a partnership with GlobalCo to develop and distribute milk-based products internationally. The president of Dairy Farmers, Gary Hannan, said the company planned to talk to GlobalCo executives soon about forming an international partnership. Until recently the US had not been a major dairy exporting country, but if exporting was to be developed, as he believed it must, then export marketing should be approached with the dairy farmers of New Zealand, he said. Instead of being competitors, the two companies ought to be co-partners in some way. Dairy Farmers has about 27,000 suppliers across America. (NZ Business Times)

$38,000 in Fines in One Week

The $200 instant fines regime at NZ airports has harvested $38,000 for the Government in its first week. MAF quarantine enforcement leader, Frank Sheehan, said that at least 190 people had been fined in the first week of the new regime. The $200 fines can be imposed on anyone who is caught with undeclared fruit, plant or animal products considered a threat to New Zealand's biosecurity. 60%-70% of people paid immediately, and the others had 14 days' grace. Fresh fruit and vegetables accounted for 38.6% of the fines imposed. A third of the offenders were New Zealanders. (NZ Herald)

Minister on Latin American Mission

The Minister for Trade Negotiations, Jim Sutton, will lead a trade mission to Argentina, Chile and Brazil, 27 July-11 August. The focus of the mission is "pasture to plate" and will feature companies representing the agritech, hortitech and food processing sectors. Trade NZ offices in South America have identified significant opportunities for NZ companies to develop business there. The mission would be an opportunity for New Zealand companies to showcase some of their cutting edge technology and know-how in such areas as biotechnology, animal husbandry and traceability, Mr Sutton said. Trade NZ is co-ordinating the mission, and will assist participating companies with their airfares and accommodation expenses. There are currently 12 companies confirmed for the mission, but Trade NZ would welcome contact from others interested. (Otago Daily Times)

'Get Involved', Says Sutton

New Zealand groups should take advantage of the World Trade Organisation's plans to involve non-government organisations in dialogue on issues to be discussed at its November Ministerial meeting in Doha, Qatar, Trade Negotiations Minister, Jim Sutton, said. The WTO is running a summit in Geneva from 5-7 July for NGOs to get together with WTO officials and delegations to debate, comment and question key issues confronting the world trading system. Mr Sutton said he hoped there would be excellent representation by New Zealand NGOs at the meeting. Those considering attending must register their intention by 2 July. The WTO website is >www.wto.org<. (Farmindex)

Aus Farm Exports Booming

Australia's farm exports are on the increase, expected to be worth just under A$30 billion in the next 12 months. The Australian Bureau of Agricultural and Resource Economics has forecast farm exports to rise by an extra A$2 billion in that time. For beef producers, ABARE expects average saleyard prices to jump by 6%, while wheat prices are forecast to rise by A$7/tonne. The outlook is also bright for barley, lamb, rice, live cattle, sugar and wine. But weaker demand for wool means ABARE expects the Eastern Market Indicator to drop to an average A740¢/kg (It dropped below A800¢/kg this week). According to ABARE's Terry Sheales, the new financial year will also offer farmers some relief when it comes to farm costs, with lower interest rates and fuel and fertiliser prices. (ABC Rural News)

Hong Kong Talks at Early Stage

The Minister for Trade Negotiations, Jim Sutton, said talks between New Zealand and Hong Kong officials, aimed at establishing a closer economic relationship, were currently in their early stages. Substantive negotiations of a free-trade pact were not expected until mid-July. The 2 Governments agreed to begin negotiations on a closer economic partnership agreement last April. (NZ Business Times)

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Livestock

F&M Vaccine 5 Years Off

An improved vaccine that could protect NZ stock from foot-and-mouth disease could be as near as 5 years away. Derek Belton, animal biosecurity director with MAF, said a foot-and-mouth super vaccine was already in the developmental stage. Present vaccines do not stop livestock from carrying the disease, and products from vaccinated livestock are not accepted by many countries because it is impossible to tell if an animal has had the disease or has been inoculated against it. The new vaccine would eliminate that problem by containing a marker to differentiate it from the disease. Mr Belton said the vaccine was still highly speculative, and it would be impossible to make New Zealand's borders completely secure from the disease. (Waikato Times)

Charolais Tops at $43,500

A New Zealand and Australian record price of $43,500 for a Charolais bull was set at the 13th Silverstream Charolais Stud sale at Greendale, near Lincoln. Silverstream Phoenix was bought by Forest View Charolais and Wananaki Coastal Charolais, both of Northland. Phoenix is a son of the Charolais sire, Silverstream Jonah, which won the Meat and Wool Cup at the 1996 Canterbury A&P Show, and again at the Royal Show a year later. (Christchurch Press)

Big Bird Boom Goes Bust

Once touted as the country's meat industry of the future, the emu industry has collapsed, in some regions leaving farmers with unsuccessful investments totalling thousands of dollars. Only one of the 17 farms once operating in Nelson now remains. Farmers who paid up to $25,000-$30,000 for a breeding pair of birds, ended up digging holes for them, said former emu farmer, Bryan Turner. Former NZ Emu Farmers Assn president, Graeme Stockley, Pukekohe, said there were international markets for emu meat, but it must compete with venison, beef and lamb. The industry remained with those who were still interested, and he estimated that there were now only 70-80 emu farms left in New Zealand out of a peak of 220. (Otago Daily Times)

Big Drop in Dairy Cow Prices

Dairy cow prices have dropped dramatically in Southland due to a depressed market caused by a lack of winter feed and the poor weather. Currently, average dispersal sale prices for mixed-age dairy cows are $800-$1000, compared to the North Island where cows are averaging $1100-$1400. South Island Dairy Farmers Livestock Agency agent, David Gregory, expected prices to rise again once winter had passed. At present, farmers did not want to be carrying an extra 100-150 cows. (Gore Ensign)

Cull Unnecessary

The British Government ordered the slaughter of up to 2 million healthy animals during the foot-and-mouth disease crisis despite being told the cull was unnecessary. Officials have acknowledged that some of the assumptions that led to the mass slaughter may have been wrong. Ministers went ahead with the cull on uninfected farms near outbreaks even though they were told by Dr Paul Kitching, senior scientist at the Institute of Animal Health laboratory at Pirbright, the world's leading centre for research on foot-and-mouth, that it was "a total suspension of common sense." According to the latest figures, the disease has been recorded on 1771 sites and 4.5 million animals have been slaughtered. (NZ Herald)

Horticulture

Pipfruit Legislation Introduced

Legislation to implement the Government's decision to revoke the apple and pear export regulations was introduced into Parliament this week. The Minister of Agriculture, Jim Sutton, said the Apple and Pear Industry Restructuring Act Repeal Bill would give growers a choice of exporters who would all compete on an equal footing. The Bill would be referred to the Primary Production Select Committee later this month, and would be open for public submissions. He said it was expected to be passed into law in September to come into operation on 1 October. (Hawke's Bay Today)

Reorganising for Change

The pipfruit industry was reorganising itself for the change to open marketing and was considering whether it should apply to come under the New Zealand Horticulture Export Authority Act 1987 (the HEA Act) or whether it would prefer to operate within a normal commercial environment, the Minister of Agriculture, Jim Sutton, said. Recent grower meetings had discussed the two possible structural options for the industry, that is, no specific legislation, or prescribing pipfruit under the HEA Act to provide for export licensing. Views in the industry on the two options were mixed, he said, but growers and exporters were working together to address the issues. (Hawke's Bay Today)

Enza's $55 million Bombshell

Enza has dropped a $55 million bombshell on pipfruit growers, virtually on the eve of the industry's deregulation. The corporate-controlled former grower-co-operative has told suppliers that a massive $4.50/carton of fruit will be deducted from this year's returns to pay for losses on foreign exchange dealings and on the abandoned Omniport loading system at Napier, which it inherited from the former Apple and Pear Marketing Board. Enza said the alternative to the $4.50 levy on this season's returns is for the whole industry to accept a levy of 82¢/carton on all export fruit over the next 5 years. (Nelson Mail)

Enza Legacy Costs

The Government would only consider an Enza proposal for a compulsory levy to deal with industry "legacy" costs if Enza could demonstrate a majority of growers supported that proposal, that it was fair to minority players, and was in the public interest, the Minister of Agriculture, Jim Sutton said. Labour Party policy on agriculture changes required that they meet those criteria. Cabinet would have to be convinced that the legacy cost proposal measured up, he said.

(Hawke's Bay Today)

$322,986 Deficit for Federation

The Fruitgrowers Federation has recorded a deficit of $322,986 for the year ended 31 March. The deterioration from the previous year's deficit of $92,747 was mainly due to the writing off of a $239,159 loan to Pipfruit Growers NZ; there was also a one-off $57,000 for a referendum on the commodity levy. Levy income was down by $20,000 to $334,000. (Otago Daily Times)

Growers Want Time to Investigate

The national pipfruit growers' body has asked Enza to hold off its debt extraction from growers until it assesses how the debt originated. Pipfruit Growers chairman, Phil Allison, has asked Enza to stop deductions, which were to begin this week, while it provides more information so that his group can assess how the debt came about. However, he said it was proving difficult to get information from Enza. He said the deductions could create serious cash flow problems for growers and could put some out of business. (RNZ Rural Report)

Corporates Taking Over

The day of the family-owned pipfruit orchard is almost over, according to NZ Pipfruit technical manager, Mike Butcher. The industry was losing the traditional family orchard to associations of growers who were increasing their plantings, and in 5 years the typical orchard would be owned by corporates. There would still be some family orchards, but the trend was to bigger orchards with a range of cultivars, giving them the ability to supply markets as required. (Hawke's Bay Today)

Joint RMA Work Proposed

VegFed and the Fruitgrowers Federation are discussing the possibility of combining resources on Resource Management Act issues, particularly submissions on regional and district plans. Vegetable and fruit growers have very similar interests and by combining resources their associations believe they will be able to maintain a high level of activity. VegFed chief executive, Peter Silcock, said the federation expected a busy year, with several larger regions due to release their regional plans. (Commercial Grower)

Soil, Land, Water, Arable

Rural Land Price Warning

Strong returns in farming over the past 2 years have led to an increase in demand for rural land, but Federated Farmers is urging buyers to be cautious. The surge in both land values and farm sales has been particularly strong in Southland, where dairy conversions are popular. Southland Federated Farmers president, John Morrison, is warning prospective buyers to be cautious as farm gate returns could easily drop again. The export benefit of the low NZ$ was now being capitalised into the price of land, he said. The danger was that when the NZ$ recovered, as it would eventually, and if commodity prices did not rise with that recovery, a lot of people would get 'burnt'. Farmers borrowing money and budgeting on a US42¢ dollar would find it difficult to afford interest and principal payments if the NZ$ recovered to around US50¢. (NZ Business Times)

Crops Can Be Vaccinated

Australia's national research organisation, CSIRO, has developed a technique that will effectively vaccinate plants against viruses that cause millions of dollars in lost production. Researchers have found that by inserting a small part of a gene from a specific virus into a seed, the plant becomes immunised. Dr Peter Waterhouse, from the Plant Industry Division, said the technique could be used on a whole range of crops. He said the latest results were "very exciting". They had been able to protect barley against yellow dwarf virus - a global virus that affects all cereals, and the most economically important virus of cereals world-wide. (ABC Rural News)

Barton Re-elected

Neil Barton and Hugh Ritchie were re-elected as chairman and vice-chairman of Federated Farmers Grains Council at the annual conference in Christchurch. Mr Barton said that although cropping farmers were not enjoying the same level of returns as their colleagues in the pastoral industry, those who attended the conference left feeling positive about the future of their industry. International prices for grain were improving, and the servicing requirements of the dairy industry had added a new element of competition in the domestic market. (Ashburton Guardian)

More Rain Needed in Marlborough

Substantial rainfall over the last few days in Marlborough has not broken the back of the drought. AgNZ farm consultant, Ian Blair, said the falls, which varied from over 100mm in the Rai Valley to 35mm on the lower Wairau Plains and 24 mm at Seddon, were very welcome but much more was needed. Soil temperatures rose from 2 to 8 degrees with the rain, and as long as a series of severe frosts did not follow, farmers expected some growth. Mr Blair said 7mm or more a week was needed for the next 2-3 months to keep soil moisture levels reasonable. (Marlborough Express)

Review Wanted of Local Government

Federated Farmers wants the Government to take a tax review type of approach to local government. It wants an independent panel of experts to review the funding of local government before allowing it to expand its activities. Vice-president, Tom Lambie, said the recently released discussion document reviewing the Local Government Act had failed to address the fundamental problems of funding local authority services on the basis of property value. Tension between the role local government was attempting to play in the community, and the manner in which it was funded, was already causing major difficulties. One example was Gisborne District Council, which provided services to 45,000 people in a large district, but had fewer than 20,000 ratepayers. (Gisborne Herald)

Big Deer Farm for Auction

A Hawke's Bay deer farm, described as one of the biggest velvet producers in the North Island, is for sale. The 373ha property is in western Hawke's Bay, north of Tikokino. The owner, Warwick Kent, one of the pioneers of deer farming, bought the farm in late 1995. It had been a sheep and cattle farm, but Mr Kent soon converted it to deer farming. The farm has 1500 stags, plus cattle, sheep and goats. (Hawke's Bay Today)

Haylage to Marlborough

Waikato Federated Farmers are working with the Marlborough Drought Relief Committee to buy and transport up to 3000 bales of haylage for fire and drought stricken Marlborough farmers. The feed will be sent by barge from Whangarei on 16 July, and then from Tauranga to Picton. Marlborough Drought Relief Committee co-ordinator, Chris Le Cren, said the situation in Marlborough was still very serious. While 40mm of rain fell in the region on Saturday, this was the first significant fall since October. Much more was needed. Many farmers are still suffering the effects of the Boxing Day fires on top of the prolonged drought. 56 farmers urgently needed supplementary feed now, Mr Le Cren said. (Northern Advocate)

Nauru Phosphate Running Out

The end of an era in New Zealand farming is imminent with phosphate rock from the Pacific island of Nauru running out. For the past 100 years, NZ and Australian agriculture has been largely developed with superphosphate based on the purity of Nauru's phosphate rock. The resource is now expected to last only a few more years. Larry Bilodeau, chief executive of Ballance Agri-Nutrients, said NZ fertiliser companies had been sourcing phosphate from other areas, such as Morocco and China, because it had been known for some time that Nauru's resource was dwindling. (Otago Daily Times)

Legume Levels Concern

The legume content of dryland pastures in Canterbury and North Otago has dropped below desirable levels for maximum animal production, Lincoln University researcher, Stephen Kirsopp, said. 75 farms were surveyed for pasture types, sowing rates, management practices and livestock carrying capacities. The link between low-quality pastures and reduced animal production was clear, he said, and the downward spiral was inevitable. Key to boosting production was recognising the importance of pasture legumes and choosing those that did their job best in the prevailing climate and soil conditions. The advantages of subterranean clover and lucerne over the traditional white clover in dry conditions were well known, he said. (Christchurch Press)

New Gene Laws for Australia

Tough new laws to regulate gene technology in agriculture have been introduced in Australia. The new Gene Technology Act sets up an independent regulator to cover all dealings with genetically modified organisms, from the laboratory stage to the commercialisation of a product. Companies that breach licence agreements will face fines of up to A$1.1 million per breach per day, and 5 years jail; and the locations of GM crop trials will be made public on the Internet, though companies can apply for exemptions. Health Minister, Michael Wooldridge, said the Act was easily world-best practice. No other country had as open and as transparent a system for regulation of GMO's. It would be the benchmark by which other countries would judge and aim for in the future, he said. (ABC Rural News)

Industry

Richmond Appeals for Farmers' Support

Hastings-based Richmond Ltd, the country's biggest meat processor and exporter, has written to its farmer suppliers in an urgent bid to stop them sending their livestock to another processor now that PPCS is a major shareholder. Richmond's chairman, Sam Robinson, said in the letter that he was well aware of the sensitivity among many suppliers to previous attempts by PPCS to control Richmond. He urged suppliers not to act prematurely, but to take their time and see exactly how the situation settled down. He said Richmond was unchanged, the vision and strategy were the same, and he assured shareholders that the board would continue its focus on enhancing the value of the investment they had in the company. (Hawke's Bay Today)

GlobalCo Unleashes Industry's Potential

"An outstanding mandate," is how Dairy Farmers of New Zealand chairman Charlie Pedersen described Monday's vote in favour of GlobalCo. DFNZ knew the vast majority of dairy farmers supported a unified NZ dairy industry because that is what farmers said. At long last dairy farmers had a structure which would allow the industry to realise its enormous potential. It would mean enhanced returns and wealth for dairy farmers and major benefits for all New Zealanders. Profits would come back to New Zealand and help to sustain rural communities, he said. (Otago Daily Times)

GlobalCo Bill in Parliament

Legislation allowing for the creation of Global Dairy Company was introduced into Parliament on Tuesday. The Dairy Industry Restructuring Bill will be referred to a Select Committee for the hearing of public submissions and is expected to be passed through the House in September to come into operation on 1 October. (Gisborne Herald)

Goat Industry Wants Equal Treatment

The small dairy goat industry is continuing its efforts to avoid deregulation even though the Government has said it will lose its statutory protection. The industry operates under the current Dairy Board Act, processing and exporting goats' milk infant formula, mainly to Taiwan, through a single co-operative. The Act allows the Dairy Goat Co-op to operate as a single-desk exporter in the same way as the Dairy Board, but new legislation will eliminate the Board's special powers, and the Government says it cannot make an exception for the dairy goat industry. The co-op's chief executive, Dave Stanley, says the $30 million/year export trade would be put at risk by being exposed to full deregulation right away and wants the same leeway that is being given to the dairy industry. (RNZ Rural Report)

Wellington Could Lose Board HQ

Staff at the NZ Dairy Board's head office in Wellington believe they will be moving to Auckland now that GlobalCo has been approved, although a Board spokesman said no decision had been made. The Board employs about 600 staff in the Capital. Board spokesman, Neville Martin, said a small corporate office would be established in Auckland, but the head office would be located where the business case for it was strongest, and that could be in Wellington. (Evening Post)

Dairy Shares Calculated On-line

Farming website >fencepost.com< has installed an on-line calculator to help dairy farmers estimate their shareholding in GlobalCo. Registered users must enter 4 basic statistics available from their milk production records to get the total value of their shares in the new company. Farmers can also calculate whether they are entitled to extra peak notes if their milk supply curve is flatter than the GlobalCo curve. (NZ Business Times)

Going ­ Almost Gone

Australia's once-massive wool stockpile is down to 184,617 bales as at 8 June. WoolStock Australia's managing director, Peter Myers, said the timing of the sale of the last bale of wool depended on factors such as demand from China, the value of the A$, and whether a one-off sale might occur. WoolStock had already had inquiries from a few potential bidders for a one-off sale, and fully expected the lot to have been sold by one means of another well before the end of the year. (Melbourne Age)

Forestry

Profits Under Pressure

The NZ forestry industry is facing up to a crisis, with major companies reducing harvesting levels because markets have evaporated. The latest slump is expected to impact significantly on New Zealand's export earnings, with forestry sales accounting for nearly 13% of total overseas revenues. The industry's main problem is the collapse of the market for unpruned logs, which make up about 60% of forest related earnings. Jay Goodenbour, Carter Holt Harvey's chief operating officer, said the company had stopped harvesting some trees because of the problem and was expecting its result this year to be hit hard. Fletcher Forest's executives have also warned analysts that the company's earnings will be heavily impacted by the downturn. (NZ Business Times)

Australia Doubles Forestry Funding

The Australian Federal Government is about to double its funding for research and development in the forestry industry, matching input dollar for dollar. Parliamentary Secretary to the Minister for Agriculture, Senator Judith Troeth, said the new money would help increase Australia's production of timber and reduce its need for imports. Australia needed to increase the amount of wood it grew, she said. But forestry industry analyst, Brian Stafford, feared the Government push to increase research and development would see the money go into the wrong sort of forestry. He believed it was pre-occupied with increasing production of low value plantation timber for pulp wood, a priority fraught with the danger of a slump in the market. He said R&D should be invested in growing plantations of hardwood timber that would gain premium prices when it matured. (ABC Rural News)

Problems Lie With Companies

Some forestry industry analysts are suggesting that the industry's current problems lie in the failure of major companies like Carter Holt Harvey to develop both new markets and new products in order to create a demand for timber that is reaching maturity. John Groome, of Groome Forestry Consulting, said CHH needed to develop processing plants to add value to its trees 10 years ago. While it had recently opened a laminated veneer lumber plant at Whangarei, the company had not done enough to distribute the product, which it had expected to sell in Japan, he said. (NZ Business Times)

Loss of Rail a Concern for Forestry

Any loss of rail freight services in Otago and Southland would coincide with an estimated doubling of timber production from the regions' forests over the next 9 years, City Forests' manager, Phil Taylor, said. Although Tranz Rail had not been economically competitive in transporting trees so far, that could change as timber volumes increased and the distance of newly-harvested forests from processing plants became greater. As distance and volumes increased, rail freighting became more economic. The possible loss of a rail service was a major concern, he said. (Otago Daily Times)

Chief's Salary Nears $1 million

Carter Holt Harvey's chief executive, Chris Liddell, got a 12.4% pay rise with a salary package of $954,063 for the year to 31 March, the company's annual report shows. But he was not the company's top-paid employee. Another staff member was paid almost $1.3 million. The company has 639 staff earning more than $100,000, with 183 of them on $100,000-$110,000. (The Dominion)

Price Downturn Cyclical

Evergreen Forests chief executive, Mark Bogle, believes the current price downturn in the forestry industry is cyclical and the long-term outlook is still very positive. Evergreen produces mainly pruned logs, which fetch a premium on international markets. The pruned log market had held up particularly well, he said, and the company had continued to harvest profitably. Forest owners could choose to leave trees to grow until the current price downturn was over. Prices had reached a low level in US$ terms, but if history was any guide, there would be a cyclical recovery, he said. (NZ Business Times)

Council Abandons Timber Plan

The Dunedin City Council was unlikely to promote another large-scale timber processing zone such as that proposed for Allanton, Cr Syd Brown, chairman of the council's forestry committee, said. The needs of the timber industry had changed and smaller clusters of processors were now more likely. The committee has recommended that the council abandon its plan to buy 190ha of farmland at Allanton, which it had earmarked for a timber processing zone. The committee recommended that the council continue to try to attract timber processors to Dunedin through a variety of measures, including setting up a joint forestry committee with the Clutha District Council and closer liaison with the timber industry. (Otago Daily Times)

Tendering Pleases Union

Carter Holt Harvey has reversed its log-loading policy and has offered a long-term, national contract to stevedoring companies. The company had previously offered tenders on a ship-by-ship basis and refused to negotiate long-term deals. The reversal follows a bitter 4-month dispute between Mainland Stevedoring ­ contracted to do Carter Holt's log loading ­ and the Waterfront Workers Union. The union welcomed the news that other stevedores had been invited to tender and would be happy with a nationwide agreement as long as it was with a company employing WWU members. Carter Holt's move addressed one of the major sticking points in the dispute ­ other stevedoring companies' claims that they were not offered the chance to tender for Carter Holt jobs. (NZ Herald)

62 Exotic Timber Jobs Lost

The West Coast has lost 62 jobs in the exotic timber industry over the last 3 years, West Coast Timber Assn president, Peter Anisy, said. The figure did not include jobs lost in native timber milling, where Buller alone had lost 30 jobs directly from the closure of 3 sawmills. There were not enough high quality exotic logs available on the West Coast to replace the loss of native rimu and beech, and it was very expensive to bring logs in from other regions, so Coast mills were cutting back on labour, he said. (Westport News)

Council Accepts Drop in Value

The Queenstown Lakes District Council will get $94,000 less than it estimated for the 42ha Wanaka Forest plantation. An independent umpire, Dr Bruce Manley, of Christchurch, agreed with the Crown's valuation of $189,000. The plantation contains a mixture of young radiata pine and Douglas fir trees. (Southland Times)

CHH Wants Butler to Stay

Carter Holt Harvey is asking shareholders to change the company's constitution so that a 70-year-old director, Robert Butler, can remain on the board. Mr Butler has been a director since 1993 and must retire on 25 July under the current rules as he has reached age 70. A former chief financial officer of Carter Holt's parent company, International Paper, with extensive knowledge of the forestry industry, Mr Butler is also chairman of the US Financial Accounting Advisory Council. (The Dominion)

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