The Pasture Princess

Life without subsidies

As I'm sure most of you are aware, New Zealand farmers have been coping without subsidies for the past 25 years. In the opening session of the IFMA congress in Methven last week, Honorary David Carter, NZ Minister of Agriculture posed the challenge of finding a farmer in New Zealand who would want to rely on Government funded subsidies again. He knew, as we all did that it was a very tough challenge. So just how has farming in New Zealand been able to thrive since the removal of subsidies?

In 1985, Government funded subsidies were removed overnight in New Zealand. It was a very challenging time for farmers, and many didn't survive. The younger generation suffered the most, as they were trying to brake into the industry. Unemployment figures soared, from less than 20,000 in the early 1980's to 153,000 by 1991. It also had a huge impact on manufacturing, with the loss of all 21 car markers in New Zealand. But it made farmers aware of what was happening around the World and what they were competing with in a global market. Farmers had to develop systems to understand their inputs better, to get a handle on fixed costs and depreciation costs where there was machinery.

By today, agriculture in New Zealand accounts for 17% of the GDP and equates to 53% of export revenue. Livestock farming in New Zealand is focused on a pastoral base, with 98% of all livestock raised and finished on pasture. This is achieved through a low cost production system, utilising rotational grazing techniques and integrating breeding and finishing systems. Over the last 20 years there has been a big change in land use, with sheep numbers down 41% to 32 million and dairy cattle up 67% to 6 million. This has been driven by having to rely on profit, and the figures tell the story. Dairy farming can generate a return of $4000/ha compared with $1500/ha for arable farming and only $800/ha for sheep. As a result, the better land has been converted to higher value dairy or arable farming, and sheep and beef have been pushed to the hills. Performance of sheep has had to increase to make it a viable option, with lambing percentage up from an average of 101.6% to 123.4% over the past 20 years, and the average lamb carcass weight up from 14.35kg to 17.65kg in the same time period. Despite the decline in sheep numbers, New Zealand is still responsible for 50% of the world lamb meat trade.

New Zealand is blessed with a natural comparative benefit due to it's temperate climate, which makes pasture based cost efficient production systems possible. They also benefit from economies of scale, with medium to large farming operations. However New Zealand farmers have had to work hard to survive without subsidies; they have had to focus on inputs and increase production to increase efficiency, they have had to think innovatively to create product diversification and they have had to co-operate and share knowledge with each other to create a positive outlook for the agriculture sector in New Zealand. As Hon David Carter addressed the IFMA congress, his words echoed those of New Zealand farmers as he said that the country has become a better place for not having to rely on Government funded subsidies.

Feeding 9 billion by 2050

A big focus at the 18th IFMA congress held in Methven last week was the challenge that lies ahead in feeding a World population that is expected to grow to 9 billion people by 2050, with food demand increasing by 70% by 2050.

Professor Jacqueline Rowath, Director of Agriculture at Massey University stated that an additional 1.5-2 billion hectares of agricultural land would be needed to feed the World by 2050 at the current yields being produced. Nowhere near this much land is available. Progress has been made over the past decade, with an increase in yields of 379% from only 39% more land from 1900-2000. This is mainly due to nitrogen fertiliser, taking wheat yields from 2t to 10t; however the economic optimum of nitrogen fertiliser has been reached and we now need to target use efficiency.

Another key resource under stress is water. Professor Mike Young, Executive Director of the Environmental Institute at the University of Adelaide stressed that there will be a 60% gap in supply and demand of water by 2050. Industry will need 50% more water than currently, which will mean that less water will be available for agriculture; currently responsible for 70% of the World's water withdrawal. We need to improve water effiency at twice the rate of what we have been doing. He however sees water shortage as an opportunity, not a threat. Professor Jacqueline Rowath suggested that we should be considering where we grow certain crops and what system we have in place. I was surprised to hear that New Zealand can grow 1 apple with 6 litres of water, but in California it takes 70 litres of water! Interestingly it has also been proven that more water is used for hill suckler production than intensive indoor beef production.

According to John Allen, CEO for NZ Ministry of Foreign Affairs and Trade, 'think local buy local' will not feed the World. He believes that science will play a pivotal role in feeding the World, and that conversation and communication through all stages of the supply chain is needed. On-farm returns need to be improved, and free global trade is crucial for this to happen. Greenhouse gas emissions and carbon footprint must also be a top priority. Research by Professor Gareth Edwards Jones (Bangor University) has calculated that Welsh lamb uses 39% more carbon per kg of product than New Zealand lamb, and still 22% more when you compare it with lamb that has been shipped to the UK from New Zealand. We need to follow the examples that New Zealand are setting in relying more on a grass and clover based system that uses less inorganic fertiliser to keep the carbon footprint low.

Hans Johr, Corporate Head of Agriculture at Nestle talked about the new vision for agriculture, where we must feed the World, protect our planet and create prosperity. The question he posed was, are we heading for a perfect storm?

IFMA Congress 2011 - Thriving in a global market

Last week I joined over 300 delegates from 28 countries across the World at the International Farm Management Association (IFMA) congress held in Methven, Canterbury. The focus of the week's congress was 'Thriving in a Global Market' through innovation, co-operation and leadership. The event was hosted by Lincoln University, Massey University and ANZ Bank, with three days of plenary session's and presentations from some of the World's leading speakers within the agricultural sector. A large focus of the week was on tackling the issue of feeding a growing population with reduced land area, and the challenges that face us in terms of global trade, managing resources such as land and water, succession planning to ensure that 'new blood' is coming into the industry, and how we can co-operate globally to meet the challenges that we now face.

The conference opened with a talk from Hon David Carter, NZ Minister of Agriculture who spoke about how New Zealand was transformed when subsidies were removed from agriculture overnight in 1985. He said that it was tough at the time and that some farmers didn't survive, but New Zealand agriculture is far better for it as it has had to focus more on production. His challenge to the delegates at the conference was to find a farmer in New Zealand who would want to go back to relying on Government subsidies. I have not come across one yet!

Two days were spent visiting farms in the Canterbury region, with a choice of six visits each day. To broaden my horizons I opted for a change, with one day focused on dairy farming and the other on arable. I will give a seperate overview on these visits and some key things that I took away from the congress over the coming week.

Do you know your carbon footprint?

The hot topic of discussion over the past few months seems to be carbon. Just this morning I was booking a flight to Sydney, and I was asked by the airline if I would like to pay $5 to offset the carbon that I was using by taking that flight. So when you consider a country like New Zealand, where agriculture equates to 48% of the country's total emissions, you wouldn't be surprised to hear that the Government think it is a good idea to charge farmers for the amount of carbon that their farming enterprises produce.

I have previously mentioned in one of my blog updates the New Zealand Emissions Trading Scheme (ETS) scheduled to be introduced in 2015, where the Government do intend on charging farmers for the amount of carbon that they calculate is produced per farming business. They believe that by placing a price on carbon, it gives farmers an incentive to reduce carbon emissions on their farm through improving farming efficiency, more efficient use of fertiliser, better management of animal waste and through off-setting carbon production by planting trees. As you can imagine, the idea of having to pay for something they have always produced is not going down well with New Zealand farmers.

AbacusBio and Alliance Group are due to release a software product that allows sheep and beef farmers to calculate their carbon footprint, or 'Hoofprint' as the programme is called. This will allow farmers to understand how they can improve their carbon footprint, and allows Alliance to communicate with key markets as to what their farm footprints are and how they can improve over time. Over the past few days I have been (along with others at AbacusBio) trying out Hoofprint to make sure the software is working correctly before it is launched. The programme works by asking for farm details such as farm size, livestock numbers, production data, livestock sales and purchases, fertiliser fuel and energy use and any forestry on the farm. A lot of very complicated maths and science used by Abacus Bio in the making of the software then calculates the carbon footprint for the farm.

It is a very interesting product to have a look at, and I will be keen to see how it is used in New Zealand and what farmers make of it. The key to it's success will be how easy-to-use the software is, as it is evident that it has been designed by knowledgable individuals that know and understand farming. I found it very easy to follow, and for most farmers limited data will need to be updated as all sales to Alliance are automatically updated on the software. With a few minor adjustments it is a programme that could well be used in the UK and elsewhere, as it now seems that this is an area of hot topic all over the World. 

A day of getting my hands dirty!

Yesterday saw a welcomed change to the routine, and a chance to get out of the office to do some actual hands-on work! After a weekend spent with the Adams family in Southland (where I spent 6 weeks working in 2009), I decided not to travel back to Dunedin on Sunday night ready for a day in the AbacusBio office on Monday, and instead I stayed at Brightview farm for another day to help Chris and Milton.

The day started helping sort out fat lambs and cull ewes, ready for a rep from Silver Fern Farms to come and see them. As is the case in the UK, trade is high for cull ewes with these going for $125 (approximately £65). A total of 248 fat lambs were also selected. In the afternoon I helped Chris and Milton blood test their ram lambs, a job that I had never done before. The ram lambs were backfat scanned a month ago, so the results from this, their weight at the time of scanning and how much weight they had put on over the past month were all factors in determining which ram lambs would be blood tested. The lambs were a mixture of Texel, Poll Dorset and Texel X Dorset, with bloods being tested for Inverdale, MyoMAX, LoinMAX and WormSTAR. Anyone that knows about Inverdale in the UK will know that it is a prolificacy gene located on the X chromosome that results in an increased number of lambs in ewes carrying the gene. MyoMAX and LoinMAX are both genes that can increase muscle yield, MyoMAX increases muscle yield on the leg and rump and LoinMAX increases the size of the loin muscle. By selecting for animals that carry the two genes it is possible to increase the dressing percentage of lambs and reduce fat. WormSTAR is a test to identify animals that have superior genetic resistance to parasites and shed fewer eggs in the pasture.

A total of 125 ram lambs were blood tested, and I dropped off the blood samples at the Pfizer office in Dunedin today. A proportion of these ram lambs will be kept to use in Chris' flock while others will be sold. Unfortunately, as more and more sheep farms in the South Island are converted to dairy farms or turned into forestry, demand for breeding rams is decreasing significantly.

All in all, it was a very good day seeing a different perspective of sheep farming, and a nice opportunity to escape city life for a while!

A day with Southern Beef Profit Partnership Group

Yesterday I had a chance to be involved in a Beef Profit Partnership Group meeting for the Southern New Zealand region, covering Southland and Otago. The meeting was held on one of the members' beef farms in West Otago, and involved other beef farmers from the region, Simon Glennie (AbacusBio sheep and beef consultant) and a member of Meat and Wool New Zealand.

The initiative, covering beef farms in Australia and New Zealand was established in 2006 with the aim of establishing 50 Beef Profit Partnership groups, including in excess of 500 beef business. The objective of BPP is to 'achieve and accelerate improvements and innovations for sustainable impact on business profit and industry growth'. It is hoped to improve business growth by 5% year by year. Each group has regular meetings, and the partners involved in each group determine what they want to focus on, what their targets and actions are. They share and promote any successful methods that they discover/ use, and any new technologies or management tools to other groups involved in the BPP.

The meeting followed a similar structure to that of the discussion groups that I have been involved with here, starting with an update from each farmer on what has been happening on their farms and any key targets that they have met since the previous meeting. We then went for a drive around the hosts farm; a low input beef finishing operation based primarily on 800 100kg friesian cross calves finishing at two years old. Alongside this the farm also finishes summer store lambs and runs winter contract lambs. As feed demand is low in the spring when there is a surplus of grass, a lot of silage is made for the winter in the form of baylage or as pit silage for self-feeding systems in the winter. The key points the group wanted to discuss were managing feed supply and demand in a trading operation, the consideration of using hormone growth promoters, the use of EID (legislation coming in in November), and the potential threats to the 5% annual increase, in particular from new regulations involving the Emissions Trading Scheme (ETS) due to come into effect in 2015, which will charge farmers for how much carbon they are producing on-farm.

One management tool that the group has been looking at using is Faecal Egg Count (FEC) sampling calves. The decision to try this method is based on two main things; firstly to know when worm burden is high enough in calves to justify worming them, and secondly to test whether wormers actually do work! Listening to the group telling their tales on collecting the samples, it was obvious that they had all struggled. The majority had taken in excess of an hour to collect samples from one group of calves (inability to distinguish between cows, calves and sheep as the grass is so wet!), but one members suggestion to collect samples early in the morning when the cows were just getting up seemed to be a winner. Those that had used a wormer, either in the form of an injection or a dose had found from doing a second FEC sample that the wormers had worked, which the group were pleasantly surprised about.

I found the day thoroughly enjoyable, not just because it gave me a chance to learn about beef farming operations in New Zealand, but also to see how eager the farmers are to work together to provide a better future for the beef industry in NZ, an industry that they know is declining and it is up to them to make sure that it does not disappear from this country.

 
One of the self-feed silage pits ready for the winter

 
Some of the beef finishers

A trip to the biggest meat processing plant in the Southern Hemisphere!

While travelling with the Brazilian farmers, we were lucky enough to spend half a day at the Alliance Group Ltd meat processing plant in Lorneville, near Invercargill in the very south of the South Island. It is recognised as the largest meat works in the Southern Hemisphere.

The day began with a tour of the plant, following the chain from slaughter to meat processing, including seeing Viascan working and the new xray robot that cuts the lamb into three sections (which I got to start!). We also had an extremely interesting presentation and talk about Alliance Group, how they are a farmer owned co-operative with over 5,000 farmer share holders. They are one of the World's largest processors of sheepmeat, processing approximately 7 million lambs, 1 million sheep, 150,000 cattle and 130,000 deer every year. Lorneville is the biggest of 9 plants throughout the country, with 28,000 sheep/ lambs going through the plant every day.

Conversion to dairy farming and forestry is having a huge impact on the group. Over the past two years, numbers through the plant have dropped dramatically, with 3.75m stock units (1 SU= 1 sheep) going through the plant in 2007/8, down to 2.5m last year. They currently employ 2,100 staff members at Lorneville, but their numbers are dropping too. On the plus side, productivity is increasing on farms across New Zealand, with lambs at tailing up from 100.4% to 130%+. Farmers are also producing more of what the consumer wants; in 1983/4 the average lamb carcass weight was 13.3kg, by 2008/9, this had increased to 17.7kg. 

New Zealand exports 94% of all lamb it produces, which equates to 280,000t of meat per year. Half of all this sheepmeat is exported to the EU (mainly legs), 14% to USA (racks), 12% to North Asia (China), 8% to the Middle East and 7% to the Pacific. The single biggest export country is the UK, equating for 33% of all exports (73,939 t).

But according to Alliance, all is not well in the lamb sector. New Zealand currently has the lowest lamb stocks ever recorded in the country, and they will not be able to fill the EU quota for lamb this year. Customers are complaining that the price of lamb is too high, and the exchange rate means that lamb is 22% over valued for the EU market. Distributors of sheepmeat are panicking for supply, as can be seen in the increase in the price of lamb paid to farmers worldwide. Alliance group told us that they only have enough lamb to meet the chilled market, there is not enough product to meet frozen requirements. The same is true of beef, with stocks running short this year. The Australian sheep flock has declined by 75m and is at the lowest level since 1905, mirroring the pattern seen in New Zealand and the UK. According to Alliance "the World has ran out of lamb"! 

This is positive for sheep and beef farmers of course. Demand for sheepmeat and beef remains high, depite the huge impact that the credit crunch is having. However, sheep numbers are increasing dramatically in America and Asia. Brazil, China and India are now recognised as the 'Power Houses' of the World, with increasing supply of meat but an even bigger demand. So what does the future hold for beef and sheep? Who knows, but after a visit to one of the largest meat processors in the World, it seems as though they are positive of a bright future for beef and sheep.

A day of dairy

Yesterday brought about a change of scenery, with visits to three progressive dairy farms in North Otago. I joined Peter O'Neill, dairy consultant for AbacusBio on his monthly visit to dairy farms who he provides consultancy for in the Oamaru area. This was a big change of scenery for me, as I have had no involvement whatsoever in the dairy sector since I spent my placement year working on a dairy farm in Devon, back in 2006-07.

The first visit was to a share farming partnership, milking 900 New Zealand Friesian cows. The discussion involved the owner, share partner, head stockman and general worker, and they discussed current cow numbers, culls since the last visit, feed purchased (barley and silage), grass and lucerne silage made on the farm and current pasture heights. They also discussed in great detail their latest figures on milk solids produced, all of which went beyond my current level of knowledge! I was informed that February is usually one of the driest months of the year, but this year they have had more than three times the level of rainfall that they normal expect, and as a result irrigation has not been used and the paddocks are green and lush (unheard of normally in this dry area of New Zealand). On a visit of the farm you could see why their feed wedge was so high (a graph showing the quantity of grass in fields after walking the farm with a plate meter) with a farm cover of 2700kgDM/ha, as the grass was blowing in the wind!

The other two farms we visited were of a similar scale, with the same topics being discussed. The second farm was located on a steep hill, where they struggle with run off, erosion and water conservation. The farm manager told us that it rained so much on Sunday that he had to keep the cows on the yards, but by Wednesday there was no sign of any moisture other than deep wheelings on the tracks after the heavy rainfall, as the strong winds had blown any moisture away (you may have heard on the news how the strong winds were blowing liquifaction in Christchurch). They were having to feed Palm Kernel to the cows as despite having more rain and grass than normal, they were still not meeting their target farm cover. In contrast, the opposite was occuring on the last farm we visited, and they were exceeding their target.

One thing that all three farms had in common, and the majority of other dairy farms that we passed on our travels, was that they are all growing fodder beet. Peter told me that the crop has become very popular here over the past three years, with huge yield potential of up to 30tDM/ha utilised, double that of kale. The last farm we visited were milking 1300 cows, and were growing 40 ha of fodder beet, which is more than enough to feed all the cows during the winter! They will start strip grazing the fodder beet from May, and will typically feed a diet of 50% fodder beet (high in energy, low in protein) with 30-35% silage to make up the protein element, and the remainder grass/ straw.

 
A field of fodder beet growing on one of the dairy farms I visited (the bend in the trees shows how windy it was!)