Alliance plants gain China chilled beef access, aviation sector hit hard by farming downturn and energy costs drive farm innovation push.
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Alliance plants gain China chilled beef access
Alliance Group has strengthened its position in the Chinese market with two processing plants receiving approval to export chilled beef, opening new opportunities for Kiwi farmers. The Levin and Mataura facilities have already successfully shipped their first consignments to China.
The expanded access comes at a crucial time for New Zealand beef producers, with both plants now certified to process and export chilled beef products to meet growing Chinese demand for premium grass-fed meat. The first shipment from Levin cleared Chinese customs earlier this month, while Mataura's initial consignment has now arrived in-market.
This development brings immediate benefits for Alliance's farmer shareholders, enabling more flexible processing options and improved supply chain efficiency across the company's network. The additional plant certification strengthens Alliance's ability to respond quickly to market opportunities and optimize processing capacity.
China continues to demonstrate strong appetite for New Zealand's grass-fed beef, particularly in the premium chilled category. The new certifications align with Alliance's ongoing beef strategy, which includes recent investments in expanding processing capabilities at the Levin facility.
Farmers can expect to see enhanced market options and better processing flexibility as Alliance leverages this expanded access to build its brand presence in China.
Gore meat plant latest casualty in Wagyu collapse
The collapse of a premium Southland Wagyu beef operation has left a trail of multi-million dollar debts across several associated companies. Black Origin Wagyu, known for its Japanese breeding genetics and specialty cattle care, has seen multiple entities placed into liquidation.
Origin Corporation was forced into liquidation in December following High Court action by shareholder Putian Champion Trustee, with unsecured creditors owed more than $3.1 million. The action came after an unresolvable dispute between Putian Champion Trustee and fellow shareholder Arato Tsujino.
New Zealand Wagyu Co Ltd, solely owned by Tsujino, faced liquidation in July 2023 with staggering debts of $10.4 million to unsecured creditors and $1.1 million to preferential creditors. The company's troubles stemmed from Covid-19 restrictions, rising farming costs, and international market challenges, particularly in China.
The latest casualty, Black Origin Meat Processors Ltd, entered liquidation this month with debts of nearly $1.9million. The company had operated from the former Blue Sky Pastures meat plant in Gore until December 27.
The operation's collapse impacted multiple facilities, including a grain-finishing barn in Rakaia and the Gore processing plant, marking the end of an ambitious venture that aimed to combine traditional Japanese Wagyu techniques with New Zealand farming practices.
Wronz chairman steps down after trust declines full term
Andy Fox is stepping away from his role as chairman of the Wool Research Organisation of New Zealand after the Meat and Wool Trust declined to offer him a full three-year term extension, offering just one year instead.
The North Canterbury farmer has completed two terms as a farmer director for Wronz, with Southland farmer Roger Carruthers appointed as his replacement on the six-person board. Andrew Morrison, a current director, will take over as chairman.
Fox is redirecting his energy to his sheep and beef property, while maintaining his leadership roles with the North Canterbury Farmers Trust and EB Milton Charitable Trust. His tenure at Wronz saw the organization commit nearly a third of its reserves to advance wool research commercialization.
The incoming chairman, Andrew Morrison, brings significant industry experience to the role, serving on the boards of Ovis Management Ltd and AgResearch, with previous experience as chairman of Beef + Lamb New Zealand.
The leadership change comes as Wronz continues its New Uses for Strong Wool programme, which includes a pilot plant facility at Lincoln University campus and partnership with the Ministry for Primary Industries' Sustainable Food & Fibre Futures Fund.
Aviation sector hit hard by farming downturn
Agricultural aviation hours have fallen dramatically, down almost 1,300 hours in just 4 years. Fixed-wing aircraft logged just 3,725 hours in the third quarter of 2024, down from 5,800 hours in the same period of 2020, reflecting severe pressures on the farming sector.
NZ Agricultural Aviation Association executive officer Tony Michelle says operators are being forced to lay off staff and smaller companies are merging to survive. While dairy support work saw a brief uptick during spring due to wet weather demands for nitrogen application, the broader industry faces significant challenges.
The situation is compounded by Beef + Lamb New Zealand's forecast of a $4,000 decline in average sheep and beef farmer profitability for the coming season. Recent government budget cuts are further impacting helicopter operators who rely on conservation agency contracts.
Maintenance costs are creating additional pressure, with PT6 engine parts, used in Cresco and Airtractor aircraft, seeing a 28% price increase over two years. Operators now need to set aside an extra $100,000 annually for aircraft maintenance, with further increases of 6% and 8% on the horizon.
The crisis extends to hill country fertilizer application, where South Island maintenance levels have dropped significantly below the recommended 15 kg/ha of phosphate. This reduction could lead to long-term productivity issues, potentially forcing farmers to either reduce stocking rates or consider alternative land uses.
Energy costs drive farm innovation push
New Zealand farmers are exploring renewable energy solutions as they grapple with rising power costs and irrigation demands amid changing weather patterns. The shift comes as many farms face annual electricity bills exceeding $100,000, with irrigation systems creating significant pressure on the national grid.
Solar installations are gaining traction across the agricultural sector, with early adopters reporting returns on investment of 18-20% as energy prices spike. Initial setup costs for farm solar systems typically range from $110,000, but the operating cost drops to 7-8 cents per kilowatt hour compared to grid power at 25-39 cents and diesel at 75 cents.
Irrigation NZ principal technical advisor Stephen McNally reports that while recent rainfall has temporarily eased concerns about water restrictions and hydropower supply, the agricultural sector remains focused on long-term energy security. The challenge extends beyond irrigation to include the electrification of farm vehicles and equipment.
Current barriers include significant price gaps between conventional and electric machinery. Electric tractors command prices of $200,000-$230,000 compared to $100,000-$120,000 for diesel alternatives, making the transition financially challenging despite potential operational savings.
Farmers selling excess power back to the grid face additional hurdles, receiving around 12 cents per kilowatt hour while paying 33 cents to buy power. This disparity, combined with varying rules across 21 utility companies, is slowing the adoption of on-farm power generation despite its potential to strengthen both farm and community resilience.
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