BRUCE WILLS - CHAIRMAN FEDERATED FARMERS MEAT & FIBRE

EXPECTATIONS  2009
Sheep - Thankfully lamb prospects look solid with current schedule prices of close to $5 a kilogram - the highest it has ever been for this time of year.  It would be nice to think that T150 had some small part to play in this! But realistically we know that it has a lot more to do with the massive 23 percent decline in lamb production over the last 12 months. With most pundits expecting about $80 for an average lamb this season, T150 has a way to go yet! Wool has shown a welcome upturn this year from its frightening pre-Christmas slide. I expect wool to be well debated this year. Wool Partner's International (WPI) are under pressure to prove themselves, while Wool Grower Holdings (WGH) will be chasing farmers for financial support and Meat & Wool New Zealand are seeking a new mandate on wool. Does wool have a future? Hopefully the answer to this question will be a whole lot clearer later this year. 

Cattle - Like wool the dramatic pre-Christmas slide in beef looks as though it's turned around. Once some of the backlog is cleared the outlook appears more promising. The falling New Zealand dollar has been a great cushion for the weaker overseas prices. The "easy care" aspect of beef is still leading to higher cattle ratios on many New Zealand farms at the expense of sheep. 

Profitability - This will be a "biggie" for farmers in 2009. Many of us coped with abysmal returns and drought by borrowing more money and reducing capital stock numbers. The chickens have now come home to roost! This combination, along with the changing face of credit availability, will put real pressure on those with high debt and/or low profitability. There's going to be a "sort out" as the highly indebted rural sector ($42 billion bank debt in 2008, compared with $7 billion in 1986) begins the painful but necessary step of de-leveraging. Sadly, there will be casualties and, no doubt, some high profile mortgagee sales. But there is a silver lining to all of this. For years we have worried about how to attract young, energetic newcomers to our industry. As farm values inevitably align with farming returns, we will see a growing opportunity for enthusiastic, keen people to enter the industry. For the long-term good of sheep and cattle farming in New Zealand, this is exactly the sort of change we need. 

Meat & Fibre chairman, Bruce Wills, 027 234 1516, bwills@fedfarm.org.nz

NAIT update - The NAIT Governance Group is still to provide us with some of the information requested following our submission on the June 2008 Discussion Document.  In addition, we look forward to the June 2009 publication of the second stage business case being prepared by the Ministry of Agriculture and Forestry.  And last but not least, the following remits have been submitted to Meat & Wool New Zealand for its next annual general meeting in Gore on 11 March.

Remit 1: That Meat & Wool New Zealand cease spending levy money on the NAIT concept [Proposer: Lachlan McKenzie]

Remit 2: That Meat & Wool New Zealand support an independent democratic referendum on the NAIT proposal [Proposer: Bruce Wills]

For more information about NAIT please contact Bruce Wills on 06 834 9704, 027 234 1516 or click here to email him. Or contact David Burt on 04 494 9182 or click here to email him.

Meat & Fibre Executive meeting in Wellington - This meeting will be held on 18-19 February. The Executive will hear from several key industry players including Mike Petersen and Scott Champion, of Meat & Wool New Zealand. Tim Ritchie, of the Meat Industry Association, and Iain Abercrombie, of Wool Partners International Ltd, will also attend. The meeting will also look at key areas for 2009 such as Meat & Fibre strategy, T150 and planning for the June conference

Federated Farmers Farm Day: Sunday, 1 March - Planning is well underway for this exciting event. The theme for the day is "Discover the Country". The public will have an opportunity to visit one of 26 farms throughout the country on Farm Day. This event is well worth supporting and those Meat & Fibre members who have agreed to host a Farm Day are to be congratulated.

Weather - Recent rains have quenched any fears that we are heading for another widespread drought this summer. While some areas are still unusually dry, particularly the East Coast, most of the country has reverted to normal summer conditions.

Commodity Levy Act Referendum - This crucial referendum is due to take place in August. It is vitally important that levy payers are well informed about the issues and that all eligible farmers participate fully in the democratic processes. To help inform members about this, we will be carefully analysing the issues as they are identified by Meat & Wool New Zealand at its annual general meeting. We will ensure this information is received by members to aid in their decision making. 

Deforestation warning - The Ministry of Agriculture and Forestry have recently placed notices in many newspapers informing landowners of their obligation under the current Emissions Trading Scheme (ETS) to report any deforestation that has occurred on their land during the 2008 calendar year.  This obligation applies to those landowners who have cleared forestry before 1 January, 1990 and are now putting the land to a different use.  Some exemptions apply to this requirement, such as whether the forested block is less than 50 hectares in size and the scale of the clearance was less than 2 hectares of the forest area.  To find out if this obligation applies to you, and to achieve compliance with the obligation, please click here. The deadline for this is 31 January. Harsh penalties will apply to those who do not comply.  

T150 - Items of T150 branded clothing - including singlets and hats - were distributed to provincial presidents just before Christmas.  Hopefully you will be contacted by them in the near future to help promote this vital initiative. While the economic situation in our export markets remains volatile, Federated Farmers realises the importance of keeping focused on activities that will contribute to the achievement of this target. 

Presentations from the November Meat & Fibre Council Meeting available - To obtain PDF format copies of these presentations contact David Burt on 04 494 9182 or 0800 327 646 or fax 04 473 1081 or click here to email him.  

Meat & Wool New Zealand update available - The Sheep and Beef Mid-Season Update 2008-09 has been published by the Meat & Wool New Zealand Economic Service. Please click here to get your copy. 

2009 Federated Farmers ‘One Event' - This will take place over 30 June to 2 July and will incorporate the Meat & Fibre Conference. 

Effluent Survey - Stock effluent spillage from trucks onto roads can be problematic. Because of this, Federated Farmers is part of the National Stock Effluent Working Group, which works to minimise the spillage of effluent on our roads. There are many aspects to the minimisation strategy. These include the construction of a network of transit effluent disposal sites, the equipping of trucks with tanks to catch and store effluent in transit and the standing of stock before transport. However, the main role farmers can play is to keep their stock off green feed for 4-8 hours prior to transport. Federated Farmers has been asked to conduct an email survey of its members to determine how diligent farmers are in standing their stock. Expect it in the coming weeks. 

Electricity supply - The Commerce Select Committee are calling for submissions from the public on a bill that would extend the obligation for lines companies to supply electricity to customers beyond 2013. The current Electricity Act would see the obligation to supply expire in 2013. The successful passage of this bill should come as a great relief to the many rural consumers that no longer have to live with the prospect of uncertain supply of electricity. Federated Farmers is preparing its own submission on the Electricity (Continuance of Supply) Bill, and encourages interested members to do the same. For information about the bill please click here. Submissions close Thursday, 5 February. 

Annual grind crucial to farm economics - Writing the rates cheque is an increasingly painful experience for farmers. As rates climb high on the list of farm costs, for some it is becoming impossible.  While sheep and beef farmers face heavy economic pressures and cost cutting, councils go on with their plans, gathering more and more cash from ratepayers. Farmers pay more than other residents and most other businesses because they pay rates on their residence and the worth of their business. Council rating policies such as differentials are the only protection for farmers, along with a commitment from councils to spend less. Each year Federated Farmers seeks those commitments from as many as 60 councils through submissions on the annual budget.  This year is no exception. Federated Farmers members and staff throughout the country will be sending a clear message to local bureaucrats about the need to shape up and cut their cloth to fit the community's resources. If you want to get involved, or have a ridiculous rates bill, call 0800 327 646 and ask to speak to your local policy advisor. 

NZFSA On-Farm Verification Programme - The strengthening of this programme was signalled last year with an indicated start date early in the 2008/2009 season.  Trials of the programme are underway and you will be advised when the national rollout is to occur.

Special discounts - To find out more about special discounts for members call 0800 327 646 or please click here to visit Federated farmers website. 

Contracts and agreements - Members can purchase Federated Farmers contracts and agreements at a discounted rate. To purchase please click here or call 0800 327 646.

If you have any questions or comments about matters raised in this newsletter please click here to contact a member of the Meat & Fibre Council or call our policy advisor, David Burt on 0800 327 646 or please click here to email him.