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28 Dec 2017

The Jones boys are still farming

The first 125 hectares of land Wallace Jones bought at Wharepoa near Thames was so flood-prone the locals said he would have been better off in jail than trying to farm it.

He had emigrated from Somerset in England in 1875 and initially bought a 140-hectare dairy farm in Frontier Road, Te Awamutu, where he milked 26 cows by hand.

He married Nancy Starrat in 1895 then, when fertility on the farm ran out, they moved to Taranaki in 1900, droving the herd down.

They farmed Maori lease land and the herd grew to 110 cows. Wallace became a director of Riverdale Dairy Co-op.

They moved back north in 1905 and bought the land at Wharepoa.

Wallace died in 1913 and his son Wallace Francis Jones bought another 125ha farm on Rawe Rawe Road on the Hauraki Plains in 1917.

That property has just been approved for Century Farms status, having been run by the same family continuously for 100 years.

His son, 87-year-old Ken Jones, remembered how stock were swapped between the two properties around Christmas to quell the effects of copper deficiency and peat sickness.

“It was amazing to see how quickly their coats changed,” he said.

“The last half inch would go brown.”

Another problem was fescue foot, where high ergot levels in that grass meant cows’ feet could easily get infected.

Ken still had well-kept letters of his father’s, writing to his bride-to-be Daisy Sage, telling her every detail of his search for a suitable house to move onto the peat land as former gold mining housing became available in Waihi.

That house, still there today, was where Wallace Francis raised his family of five.

They started off milking 80 cows through a 10-bail, walk-through dairy and carting cream to the bottom of the road to go by river to the Kopu butter factory until one was built at Ngatea in 1920.

Sons Arthur and Ken both went to Massey and Arthur bought the farm in 1953.

The dairy was extended to a 16-aside herringbone in 1974 then a 42-aside in 1993.

Artie, Arthur’s son, bought the farm in 1994, a year before his father’s death and still lived in the old homestead.

He added several adjacent blocks and now milked 620 cows producing 190,000 kilograms of milksolids under a DairyNZ system 2 operation.

But flooding was still one of the biggest production constraints though the peat had now compressed.

“Some of the farm is 1.5 metres below sea level and in March we lost 40ha underwater for two weeks,” he said.

It was resown then another heavy rain meant all that work had to be redone.

His son, Sam, who was developing a dairy and kiwifruit property at Opotiki, was likely to be the fourth Jones to be in charge of the farm.

Ken bought another 116ha dairy farm of his father’s close by in 1954 and had since added to that with both dairying and kiwifruit purchases.

Century Farm and Station Awards co-ordinator Mel Foster said there had regularly been 30 to 40 applications a year for recognition since the awards were set up in 2005.

“Returned soldier settlements will soon be coming through and we’ve had one of those this year,” she said.

Plaques denoting farms’ status were presented at a dinner in Lawrence, Central Otago, in May. About 200 people, many making it a family get together, attended.

“Everybody is very proud of their history and there are fascinating stories of some of the hardships they’ve gone through,” she said.

“It’s great we can acknowledge that on the night.”

So how would Wallace Francis Jones feel about the farm gaining an award to mark its 100 years in family ownership?

“He’d be quite chuffed,” Ken said.

“Who wouldn’t be?

“My father always said that you buy peat land for the next generation.”

28 Dec 2017

MPI stops killing cattle

The Ministry for Primary Industries has put a halt to culling any more dairy herds infected with the cattle disease Mycoplasma bovis following the latest outbreaks.

After five months of containment in the South Island the disease had now been detected on a farm in Hawke’s Bay.

The Hastings farm was one of four more infected properties announced by MPI last Tuesday with the other three all from the same farming enterprise at Winton in Southland.

The disease was also strongly suspected on a farm near Ashburton.

MPI response director Geoff Gwyn said the new outbreaks were not good news.

But the good news was the indication all the properties linked to the initial source of the van Leeuwen group of farms in South Canterbury.

All the cattle movements were before July 21 when the disease was notified.

The Hastings and Ashburton properties were identified through MPI’s tracing programme with the Winton enterprise identified through the industry milk testing programme.

Gwyn said there was lot of uncertainty as MPI continued to analyse what the latest outbreaks meant for the wider response.

“Our investigators are building a picture of stock movements onto and off these farms so we will not be making hasty decisions on next steps.”

Meantime, the eradication of further cattle was not an immediate option.

“It would be premature now, given these latest outbreaks, to kill another herd – anywhere.

“It may still be the right strategy once we determine the implications of these latest finds but right now we don’t know for certain so we’re holding off,” Gwyn said.

“The key is less about geographics and more about relationship to the initial infected properties.

“The bad news is we don’t know at the moment just how far and wide these relations are.”

Federated Farmers Hawke’s Bay president Will Foley said farmers were absolutely shocked to learn Mb had arrived in their region.

“We were thinking we were so far away it would be quite unlikely to get to us.

“Now there is a whole lot of questions on how the response let this happen to us in Hawke’s Bay but really this situation may not be as new as some may believe.

“The lack of information has had people jumping to conclusions that the horse has bolted and that has created a lot of anger and frustration.

“The meeting with MPI can’t come soon enough for us all to learn more,” Foley said.

Southland Feds president Allan Baird said farmers in the region had now had their worst fears realised.

“There is a lot more vigilance and farmers are stepping up their biosecurity.

“It is clear there needs to be a longer term strategy approach now than just going out and killing animals,” Baird said.

Gwyn said an international advisory team that had assembled in Wellington last week had delivered encouraging news.

“This included disease and risk assessor experts and epidemiology experts from Australia, Canada, America, the United Kingdom and NZ and their view was this response was the most extensive response work seen internationally.

“It’s good to have that tick in the box.”

The advisory team had reviewed the pathways report on the potential source of the disease to NZ and while it was planned to release the report before Christmas, the review had identified areas that required further attention and that had delayed the release.

“It will still be publicly released but that won’t happen now until into the new year,” Gwyn said.

Meantime, the culling of 4000 cattle from the seven infected van Leeuwen properties was complete.

“But no one is packing up the tent and going home,” Gwyn said.

“While we could say the South Canterbury region is in holding mode the focus goes on Hastings and Southland and we will have a team of 30 staff working right through the holiday period.

MPI had public meetings scheduled in Winton on Tuesday December 19 and in Hastings on Wednesday December 20.

13 Dec 2017

The making of a happy cow

2017 Share Farmers of the Year, Chris and Siobhan O’Malley are set on making happy cows. They say the bond they have with their cows starts with responsible and healthy calf rearing. “We look after them and they look after us in the same way.”

13 Dec 2017

Chinese reduce dairy tariffs

The New Zealand dairy industry has welcomed China’s December 1 unilateral reduction in some tariffs on imported dairy products though the immediate financial benefit will not be large.

Dairy Companies Association executive director Kimberly Crewther said the tariff reductions would have a moderate but useful impact on trade.

“We also hope this development is a sign that the elimination of all remaining dairy safeguards will be an outcome of the China-New Zealand free-trade agreement (FTA) upgrade process, now under way,” she said.

Safeguards is FTA-talk for quotas, a volume of a product allowed in tariff-free, after which further trade incurs a tariff.

For example, the existing China-NZ FTA signed in 2008 had a safeguard of 5585 tonnes (in 2017) for all types of cheese but NZ sold more than 50,000 tonnes of cheese to China annually, most of it mozzarella for pizzas.

When China reduced the tariff level of cheese from 12% to 8% on December 1, the reduction effectively applied to the 45,000 tonnes-plus of trade above the safeguard level.

But the tariff reduction also applied to all other countries exporting to China.

NZ’s special agriculture trade envoy Mike Petersen said the FTA gave NZ products a head start with a tariff-free period early each year but that advantage over other countries had now been narrowed.

China’s announcement also covered tariff reductions of 15% down to 2% on some pre-packaged infant foods and 20% down to zero on hydrolysed protein formula for people with special dietary needs.

In Europe, commentators hailed the Chinese move as a big win for dairy multinationals like Nestle, Danone and Glanbia.

Crewther said infant formula out of NZ was already on zero tariff under the FTA, without safeguard.

She also said the four cheese categories mentioned in the latest announcement did not include processed cheese, or mozzarella, which was the bulk of our trade.

“Reduced tariffs have two-way benefits for the importing and exporting countries involved.

“Chinese consumers will benefit through reduced consumer costs and increased consumer choice while exporters will benefit as a result of the removal of a dead weight cost from supply chains.

“The dairy market in China continues to grow as consumers bring an increasingly diverse range of dairy products into their diets.

“Imported products are playing an important and complementary role in supplying this consumption growth alongside China’s domestic dairy producers.

“The development in the market over the last decade has been significant and there is scope for much more still to come as the gap between current Chinese dairy consumption levels (36kg/capita/year) and the dietary consumption targets for dairy products (110kg/capita per year) is closed.”

The financial benefits from tariff reductions would not necessarily flow to NZ dairy companies but be shared along the supply chain.

13 Dec 2017

M bovis spreads

The bacterial cattle disease Mycoplasma bovis has spread to the North Island and Southland, with four new properties, one of which is in Hastings, affected.

The other three were within a farming enterprise in Winton. MPI also suspected a property near Ashburton was affected.

MPI response director Geoff Gwyn said early indications were that all the properties had links with the van Leeuwen Dairy Group through cattle movements.

“The Hastings and Ashburton properties were identified through our tracing programme and the Winton property was identified through the industry milk testing programme.

“All of the movements we have been tracing are prior to July 21 when the disease was first detected and notified to MPI.”

The Hastings and Winton properties were under a restricted place notices, effectively placing them in quarantine lockdown and restricting the movement of animals and other risk goods on and off the farms.

The suspect property was under voluntary movement controls until its status was confirmed. MPI was working closely with it.

Gwyn said the new developments were not good news.

“We’re still analysing what this means for the wider response.

“We’re dealing with a lot of uncertainty.

“Our investigators are building a picture of stock movements onto and off these farms so we will not be making hasty decisions on next steps.

“While it’s really disappointing to have these new properties, it is not totally unexpected.

“We know that this disease is spread through contact between animals and through the movement of stock – as is the case here.

“It was always possible further infected properties would be found, buying, selling and moving stock is a common practice in farming.

“A key part of our response has been identifying and investigating animals that have moved to or from affected properties before Mycoplasma bovis was first detected. This tracing is complex detective work which takes time.

“I know an obvious question people will have is ‘Why has it taken this long to find these properties?’ The answer to that lies with the nature of this particular bacteria.

“It is a tricky thing to find and often hides within an animal, lying dormant and not revealing itself for weeks or months.

“Some cattle may be infected and never show signs of the disease.

“This is why we test multiple times using multiple kinds of tests. Sometimes to confirm the disease we have to test organ tissue from animals at slaughter as was the case in Hastings.”

Gwynn said the depopulation programme was almost complete on the infected van Leeuwen properties and was on track to be completed before Christmas. To date more than 3500 animals had been culled.

“Our extensive testing and tracing work also continues.

“So far the MPI lab has completed over 55,000 test and our investigators have followed up 250 properties around the country.

MPI would hold a public meeting in the Hastings area on Wednesday December 20. The time and venue were to be confirmed.

13 Dec 2017

It’s time to act against Canada

Canadian subsidies helping to drive down global skim milk powder prices are illegal and the Government should waste no time in challenging them at the World Trade Organisation, former Trade Minister Todd McClay says.

McClay was still taking advice from officials on a possible WTO case until his National-led government was dumped after September’s general election.

“I have no doubt in my mind that Canada is breaking WTO rules and they need a very strong message sent to them that we will be going down the route of WTO action unless they change this behaviour, which is harming our farmers.”

It is more than a year since a coalition of international dairy industries called on their respective governments to challenge Canada’s new Milk Class 7, which, they said, breached a WTO ban on export subsidies.

The major dairy processing bodies of New Zealand, the United States, Australia, Argentina, the European Union and Mexico followed up with another letter in June urging action but as yet no government has initiated a case.

In NZ the incoming Government had its hands full carving out a new position in the Trans Pacific Partnership talks and was yet to comment.

But McClay believed the threshold for a WTO case had been met and the Government should not hold back.

“There is now evidence that Canada is dumping skim milk powder in a number of markets where we do well with more than 100% increase in volumes and it is starting to have an impact on prices.”

Dairy Companies Association chairman Malcolm Bailey estimated close to 100,000t of SMP had found its way on to world markets that would not have happened without the new Canadian pricing system.

While considerably less than the nearly 400,000t in the European Union’s intervention stocks, Bailey said it was having a disproportionate impact on the global market for SMP.

While the Europeans’ objective was to turn a profit from its stockpile, Canadian exporters were selling heavily subsidised SMP for as much as US$300/t below the world price and creating chaos.

“We believe the rational behaviour and expectations in the market around Europe are quite different to the tactics being followed by the Canadians.”

Returning last week from Ottawa and Washington DC Bailey said US dairy groups were backed up by agriculture and trade officials who also expressed support for a legal challenge.

That was despite President Donald Trump’s well-documented antagonism towards the WTO dispute settlement body’s record of adjudicating on the US’s trade disputes.

“They are well briefed on the problem and the importance of resolving it and they really do want to join a WTO dispute to sort it out.”

In Ottawa, by contrast, Canadian farmer and processor groups feigned surprise when confronted by allegations of illegal export subsidies.

That appeared to be a deliberate tactic.

“My conclusion is that there is an orchestrated approach of just pushing people back and continuing to buy time while their increase in milk production is cemented in place by investment in milk processing.”

In August Chinese company Feihe International confirmed it would invest C$225m in a dairy plant in Ontario that would turn Milk Class 7 milk into the base materials for 60,000 tonnes of infant formula to be exported to China annually.

13 Dec 2017

Utmost safety for new milk plant

The big, comfortable, covered catering area for the 300 contractors building the country’s newest milk factory might seem an unlikely analogy for the culture the management at Mataura Valley Milk is trying to engender.

But forget packed lunches.

Caterers provided workers building the nutritional dairy plant near Gore with barista quality coffee and cooked meals and while it was costly, Mataura Valley Milk general manager Bernard May said the message it sent about the philosophy and culture they wanted to create was far more important.

“If we want a welder to do the world’s best weld we want to ensure he feels looked after and safe.”

From the start Mataura Valley Milk has set its sights on making the world’s best paediatric and adult base nutritional powders, a complex and exacting business that required a culture of excellence among staff and quality processing systems.

That bid for excellence started with construction staff building the perfect $227 million plant, which was designed by leading experts from around the world.

May said to sell nutritional formula for $85 a can instead of $30 meant there was no room for a she’ll-be-right attitude anywhere in the company.

All the company’s eventual 65 staff had to constantly strive for excellence.

Mataura Valley Milk would be the only New Zealand plant to comply with nutritional standards set by the Ministry for Primary Industries, China’s Food and Drug Administration and the United States Food and Drug Administration.

Another layer of validation of systems and processes by an external agency had been added above that compliance to provide further quality and safety corroboration for customers.

“We are going beyond compliance to validate to customers that everything in the business is working as it should.”

May said the approach taken to product quality and risk was similar to that adopted by a pharmaceutical company.

“It’s a different approach to looking at risk and managing risk to meet consumers and customers’ requirements.”

The raw milk processing area, for example, was in its own building 120m away from the sterile nutritional production plant because contamination from raw milk was considered a significant risk.

Mataura would be supplying an established, integrated supply chain meaning it would be making sales and earning revenue from the first day of production in August.

China Animal Husbandry Group (CHG), one of 19 agricultural companies owned by the Chinese government, owned 88% of Mataura but that would dilute to the mid 70s when 35 to 40 farmer-suppliers took up shares.

Other shareholders were local investors along with Hamilton-based blending, canning and sachet business Bodco.

CHG recently increased its shareholding in Bodco and also bought a stake in Auckland nutritional manufacturer and sales company Nouriz.

It had been selling in to China for six years, supplying 5000 stores in 150 cities with 2016 sales of $300m.

That common shareholding created the integrated supply chain.

In the first few years up to 40% of production would go through Nouriz and the rest to other leading international nutritional manufacturers.

Mataura would establish its own brands and specialty products such as butter, cream and anhydrous milk fat and could produce whole and skim milk powder

The company required about 100,000,000m to 130,000,000m litres of milk a year or supply from between 35 and 40 farmers, who would be selected from within an 80km radius of the plant. Almost three times that number have expressed an interest in supplying MVM.

May said raw milk contributed between 20% and 30% of the end product with the balance ingredients sourced from around the world and blended with fresh milk. The liquid was then dried, packaged and shipped to customers.

Milk suppliers would have to adhere to strict quality standards and become shareholders in the company, paying $2 to $2.50 a share.

May said that meant not feeding palm kernel to cows, as palm oil was no longer used in formula. Milk had to be chilled below 4.4degC in accordance with USA FDA standards, meet a low somatic cell count targets and farmers would have to adhere to animal welfare and environmental standards set by organisations such as Dairy NZ and Environment Southland.

“It is a brand reputation risk we don’t want to incur.”

Eventually May said MVM wanted to establish its own farm gate milk price, but it would start at a level at least 20c a kgMS supply premium above competing prices. In addition it would be topped up with incentives of up to 10c a kg for milk quality.

Farmers would also be incentivised to produce milk on the shoulders of the season and during winter, earning from 50c to $1.50 a kg MS depending on when it was supplied. May said that reflected higher feed costs but also capital investment in standoff pads and wintering sheds.

Suppliers would be confirmed in February, the plant commissioned in June-July and production of the first milk and infant milk formula in August

May said MVM would invest in other nutritional products, but said success would be judged somewhat differently to traditional manufacturing companies.

“Success for us is not building another drier to dry more milk. It’s investing in plant capability that adds more value to milk already supplied by shareholders.”