Sarah's Country

Making headlines over the past few weeks in Farmers weekly is the fear of massive land values sliding and dairy farmers equity being at threat of eroding as predicted by dairy analysts and backed by agricultural economists.

Another blow this week is the 6.2% drop in the price of wholemilk powder - which has the greatest bearing on Fonterra's farmgate milk price - dropped to US$3039 a tonne - the lowest level since August last year.

Furious at the predictions at a time of low morale, this week's Farmers Weekly pulpit is David Montgomery a registered rural valuer for over 40years lashing out at the market commentators saying “leave rural valuation to those who know and give dairy farmers something positive for a change.”  

David Montgomery is a principal in Agribuild based in Ashburton, working throughout the South Island, specialising in dairying and arable farming is joins Sarah to discuss why he was so irate to write an opinion piece in Farmers Weekly.

To read David's Pulpit visit : www.farmersweekly.co.nz

Uncertainty about our farming future this week is at record levels as you pour on top the drought conditions in the North, flooding in the South, the flow on effect to the sale-yard prices due to a backlog of product blocked into China, Brexit quota trade talks and fear mongering about a 50% land value drop for dairy farms.

This week in Sarah's Country we bring some positive light to the current situation both here at home and across the globe with experienced rural valuer, David Montgomery , UK red meat sector representative Jeff Grant & NZ Food Basket Chair, Nicola O’Rourke.

Sarah Perriam, the host of Sarah's Country, is this week joined by guest co-host Sonja Vreugdenhil. Sonja is a Farm Systems Technician for Leaft Foods living in Canterbury.

Sarah also speaks to chair of the Tropical Fruit Growers Chair, Hugh Rose, on the exciting potential of banana plantations soaking up excess nitrogen from dairy farms!

Guests on this week’s show:

• 1. BREXIT: ARE WE STILL THE GOLDEN CHILD? : Red Meat Sector Representative (UK), Jeff Grant.
• 2. LAND VALUES: LEAVE TO THE EXPERTS: Agribuild rural valuer & agribusiness consultant, David Montgomery.
• 3. PLANTING BANANAS ON DAIRY FARMS: Tropical Fruit Growers Association Chair, Hugh Rose.
• 4. DRAGGING THE CHAIN WITH BLOCKCHAIN: Former head of commercial law at University of Auckland & Blockchain expert, Alex Sim.
• 5. COLLABORATION IN CHINA: New Zealand Food Basket Chair & General Manager of Lewis Road Creamery, Nicola O’Rourke.

To listen to the full-length interviews and participate in the conversation, download the Sarah's Country app now available on Apple and Android.

New Zealand farmers are being stuck with stock because factors beyond their control are conspiring against them, AgriHQ analyst Mel Croad says.

Record high farmgate prices in November and early December prompted many farmers to hold stock for longer than usual but they panicked when the market turned and dry weather began to bite.

Now farmers are short of pasture while they wait up to a month to get stock to meat plants that are overloaded and working to ease the backlog. A shortage of staff at meat works isn’t helping.

Those factors combined with the normal post-Christmas lull in demand, particularly from China. The slow-down is typical of the four weeks before the Chinese new year. It is simply what the market does every year.

Unfortunately, coronavirus came to a head when the market was expected to start picking up and consumption collapsed.

“So meat exporters lost the opportunity to clear the stocks they had stockpiled before Christmas.

“Add to this the January production that was waiting in the wings, which is now sitting in coolstores. Asking prices will be lower than before Christmas but I believe some of this is already factored into farmgate prices.

“The problems began before coronavirus but it adds another level of uncertainty,” Croad said.

However, China still needs to import meat protein and once it has worked through supplies already landed it should reinvigorate demand.

“It’s a question of when not if.”

Dry conditions in many part of the country and the large backlogs of stock are magnifying the issue.

“If it wasn’t so dry and the need to offload stock wasn’t as real as it is for some then there wouldn’t be the pressure on space into processors and meat companies could have cleared the pipeline rather than creating backlogs and pressure in the plants and chillers.

“Meat companies won’t kill if they don’t have an order for the meat.

“However, the problem doesn’t appear to be as great as last week as more info comes to light and freezer space is found both here and in China.”

Most of New Zealand’s meat exports to China are frozen, which creates some breathing space.

And the European and British markets for lamb are still healthy. The Middle East and some Asian markets are likely to increase demand while China is not buying.

The United States market for manufacturing beef is stable at lower levels because of the reduction in demand from China but product is still shifting.

“The dry weather is causing stress for farmers because prices are down on a month ago but the key message is to look forward not back,” Croad said.

“Farmers should focus on the decisions they can make now rather than dwelling on those they held off making.

“Store lamb prices are still well above historical levels, beaten only by last year.

“But there has been a drop off in demand and some farmers can’t get stock killed in a timely manner.

“Slaughter prices are still higher than this time last year but have endured stronger downside.

“In a dry summer we can expect downside at the farmgate but procurement has been sliced even harder this season to compensate for the fall in demand from one market.

“Store lamb prices typically bottom out in January but that is likely to be extended, particularly if the dry conditions continue.

“This is not necessarily corona-driven but what we would tend to expect.”

Similar issues face cattle with the added impact of Mycoplasma bovis restricting buyer demand and prices and meat works giving priority to killing cull cattle.

For more information call:

Mel Croad, AgriHQ Senior Analyst

Phone: 06 855 4899

Email: [email protected]  

Transparency is such a buzz word when it comes to the consumer. They want more of it but are we prepared to provide it.

This week on Sarah’s Country focuses on the poor uptake of the Open Farms initiative, how social science is helping policymaker’s ‘rural proof’ their regulation, the ambitious goal to have NZ bread 100% NZ milling wheat..

Sarah Perriam, the host of Sarah's Country, is this week joined by guest co-host Jono Frew. Jono is one of the founding members of regenerative agriculture group, Quorum Sense, and is a consultant for Natural Performance Ltd living in Canterbury.

Sarah also speaks to agricultural journalist Neal Wallace in an update on the Coronavirus flow-on effect that is seeing NZ’s exports stockpiling and finds out how Damien O’Connor plans to execute a pan-sector body.

Guests on this week’s show:

• 1. PATHWAYS TO RURAL RESILIENCE: AgResearch Senior Social Scientist, Dr. Margaret Brown & Principal Economist at the New Zealand Institute of Economic Research, Dr. Bill Kaye-Blake
•  
• 2. SLICING OFF FROM IMPORTED WHEAT: United Wheatgrowers Chair, Brian Leadley
•  
• 3. URBAN DISCONNECT IS YOUR PROBLEM: Farmer & Broadcaster, Steve Wynn-Harris, Marlow Hills, Hawkes Bay
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• 4. MEAT STUCK AT PORTS: Global HQ agricultural journalist, Neal Wallace
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• 5. WE HAVE A VISION. NOW WHAT?: Minister for Agriculture, Damien O’Connor

To listen to the full-length interviews and participate in the conversation, download the Sarah's Country app now available on Apple and Android.