Category Archives: News

Source: Waikato Times

LIC chief executive Wayne McNee is not ruling out redundancies when two of the farming co-operative’s subsidiaries are merged next year.

Details of the integration between Protrack and Dairy Automation Limited (DAL) will be decided in January and McNee expected the review to be finished by February.

Until that detail was thrashed out, it was impossible to rule out any job losses among the 50 staff who work within the two businesses, he said.

McNee said the merger was initiated by the staff of the two companies after LIC decided to launch an international version of Protrack and DAL into Ireland and Britain next year.

“They approached us and said we think we should be put together. It’s been received very positively.”

It has also been approved by LIC’s board of directors.

He expected the merged businesses to grow substantially over the next two years and the bulk of that growth would be in the international market.

This anticipated growth meant the new company would need a new building that would house at least 80 staff.

“Overall it’s going to grow and we will need more people and more resources, but until we actually sit down and go through the process, we don’t know exactly what it’s going to look like.

“What I can categorically say is that we see this as a growing business. We will be adding more people to it.”

LIC bought DAL last year and has since increased its staff from 12 to 20.

Protrack is a dairy shed automation system launched by LIC in 2003 and is installed on more than 1500 dairy farms. Some integrate with the co-operative’s herd management software, MINDA.

DAL provides milk testing sensors that measure fat, protein, somatic cell counts, lactose, conductivity and volume, and present real-time data while a cow is being milked.

McNee said it was business as usual for farmers, but he expected they would see improved service delivery once the move was completed.

LIC is a co-operative owned by 10,500 dairy farmer shareholders across the country.

Shareholders Council chairwoman Jenny Morrison said feedback she had received suggested there was widespread support among farmers for the merger.

“What we hear from farmers is that they want integration. They want all their automation to work together so it makes it simple for them.”

This was what LIC was trying to achieve with the merger, she said.

gerald.piddock@fairfaxmedia.co.nz

– Waikato Times

Source: Fonterra News

Fonterra has today launched a separate milk sourcing subsidiary to grow market share in its New Zealand milk pool, and provide a new pathway to membership in the Co-operative.

Called mymilkTM, it will initially invite applications, from farms in the Canterbury, Otago and Southland regions that are not currently supplying Fonterra, for one year contracts, renewable for a maximum of five years, without the obligation to purchase Fonterra shares. At any time mymilkTM suppliers can apply to join the Co-operative, purchase shares and supply Fonterra directly.

Fonterra Chairman John Wilson said: “It is good for the Co-operative and the country for Fonterra to be the first name on the list for farmers considering their supply options. We know there are farmers who support the co-operative model, but are at the stage of development where sharing up is currently beyond their financial reach.

“Providing a different pathway of supply through mymilkTM to farms not currently supplying Fonterra enables farmers to ultimately weigh in behind the Co-operative model.

“We are committed to delivering strong returns to our existing farmers and mymilkTM will contribute to these returns. Every additional kilogram of milksolids will generate improved cost synergies and we currently have large scale, efficient plants in the South Island with spare capacity.”

Mr Wilson said it was important in an increasingly competitive milk sourcing environment that farmers could support Fonterra and then apply to become shareholders in the wholly owned New Zealand Co-operative in time.

“Taking a flexible approach supports our Co-operative’s strength and ambition to grow. We stand firmly by the co-operative principle that supply should be backed by shares which is why mymilkTM volumes will be limited to five per cent of Fonterra’s total volumes. Contracts will also be limited to five years in total and will only be available to farms that don’t currently supply Fonterra.

“It is also important that we protect the future of our industry and allow farmers to grow. We do not want a fragmented industry, as this would not be good for NZ dairy farmers and not good for the country.”

Fonterra CEO Theo Spierings said Fonterra had the ability to reach millions of consumers and customers around the world through its broad product portfolio spanning ingredients, consumer and foodservice.

“We have a clear ambition to be a globally relevant Co-op, generating the highest sustainable returns at the farm gate, topped with profits from our consumer and foodservice businesses in strategic markets. Milk growth is fundamental to that. mymilkTM sends a signal to our current and potential competitors that we really value the milk from New Zealand farmers and we are out to secure it.”

Contract prices paid by mymilkTM would be competitive, but Mr Spierings said they wouldn’t be more than the Farmgate Milk Price paid to Fonterra shareholders.

“mymilkTM suppliers will have the opportunity to experience first-hand a number of the benefits the Co-operative has to offer and we are confident this will encourage them to become shareholders during the five year period.”

Mr Spierings said mymilkTM would deliver value to existing Fonterra shareholders in five ways:

• Increase volumes of milk to support Fonterra’s global ambition
• Help improve asset and supply chain utilisation
• Achieve transport efficiencies by targeting milk near factories
• Provide incremental milk for capacity investments
• Attract potential new shareholders for the future

“Ultimately mymilkTM will return profit to the Co-operative’s existing farmer shareholders through capturing these benefits,” Mr Spierings said.

Farmers who sign up to supply mymilkTM will be required to meet the same supply terms and conditions as Fonterra shareholders with regards to milk quality, safety and sustainability. mymilkTM suppliers will not be eligible for Farm Source benefits from Fonterra.

Source: Dairy NZ

Good grass growth, high production and a record payout will see many of New Zealand’s dairy farmers look back on the 2013-2014 season as one of the best in history – and now the statistics prove it.

The New Zealand Dairy Statistics 2013-14, released by LIC and DairyNZ today, show the country’s 4.92 million cows achieved a new record in milk production, surpassing 20 billion litres in the 2013/2014 season. The milk contained 1.83 billion kilograms of milk solids, worth $15.5 billion with the season’s $8.47 average dairy payout.

DairyNZ senior economist Matthew Newman says the past season’s record milk production and prices have helped put farmers in a better position to cope with the rapid decline in milk prices this season.

“Sixty-five per cent of the increase in milk production last season came from the North Island, following the drought in 2012-13, so the increase reflects greater production of milksolids per cow up 30 kilograms to 357 Kg MS/cow. In the South Island there has been new milk in the industry from extra cows (+103,000).

“It has all added up to a great combination for farmers – the best season many can recall. We had good pasture growth, a high payout and farmers responded by making the most of the opportunity to produce a lot more milk.”

Across the country, the national herd grew by 138,600 cows (2.9%) and production from each cow was up 7.2%. Genetic merit also improved, with the average cow’s breeding worth (BW) and production worth (PW) increasing 14% and 10% respectively.

BW and PW measure profitability of livestock, to help farmers identify their best animals and the best genetics to mate their herd.

Dr Steve Harcourt, LIC commercialisation and industry relations manager, says the statistics confirm the progressive attitudes of New Zealand dairy farmers and the value of good genetics to improve productivity and prosperity.

“It’s no accident that the increasing trend of production correlates to the increase in Breeding Worth.

“Around three-quarters of the national herd are sired by an LIC bull. They are bred to deliver high quality offspring that will perform and produce in New Zealand conditions, with each generation bred to be better than the last.

“Combined with the proactive attitudes of farmers, their willingness to adopt new solutions that drive efficiency gains on-farm and their ongoing commitment to the fundamentals of herd improvement – that’s what has delivered this season’s great results.”

Dr Harcourt believes “it’s those attitudes that will help farmers get through this season with the lower payout, and continue to set new benchmarks in the future.”

The New Zealand Dairy Statistics document provides a review of the industry for the 2013-14 season, with statistics from the LIC database, Animal Evaluation database, NZ dairy companies, TBfree New Zealand, NZ Real Estate Institute and Statistics New Zealand.

The Dairy Statistics represent all New Zealand dairy farmers and include cow production and population, operating structures, breed breakdown, herd testing, artificial breeding, calving, milk prices, land prices and disease control.

Production

• Dairy companies processed 20.7 billion litres of milk containing 1.83 billion kilograms of milksolids
• 10.1% increase in milksolids processed
• Production per cow increased by 7.2% to an average of 371kg milksolids (comprising 210kg milkfat and 161kg protein)
• Average milksolids per cow was 371kg, compared with 346kg last season
• Average milk production per hectare was 1,063kg, well above last season’s 988kg

Cow numbers

• Cow numbers increased by 138,600 to 4.92 million cows, an increase of 2.9%
• Total number of herds increased by 36 to 11,927
• Average herd size was 413, up 11 cows on the previous season
• 12% of herds have 750+ cows
• A little over 50% (6,243) of herds have 100-349 cows

Operating structures

• 65% of all herds are operated as owner-operators
• 54% of all sharemilkers are on 50/50 contracts

Breed category

• Holstein-Friesian is the prevalent breed category in Northland, Bay of Plenty/East Coast and Manawatu/Wairarapa
• Holstein-Friesian/Jersey crossbreed is the prevalent breed category in Waikato, Taranaki and South Island regions
• Tasman/West Coast has the highest proportion of Jerseys (19%) followed by Taranaki (18%)

Herd testing and Artificial breeding (AB)

• 3.29 million cows were herd-tested, down on the previous two seasons
• A record 3.6 million cows to AB
• The number of yearlings to AB increased to 226,800, from 198,700

Herd Reproduction

• Herds with detailed Fertility Focus Reports, from early aged pregnancy testing, increased to 3,170
• 50% of herds had an actual 6-week in-calf rate of 67% or higher, 10% had an in-calf rate of 75% or higher
• 10% of herds had an in-calf rate of 55% or lower

Regional highlights

• 74% of dairy herds located in North Island
• 61% of dairy cows located in the North Island
• 58% of the milk produced in the North Island
• Largest average herd size (815) in North Canterbury
• South Island average herd sizes increasing faster than North Island