Federated Farmers Dairy Chairman, Lachlan McKenzie

I know a lot of you are under cash flow pressure now, but I want to talk about the positives of our industry for a moment.

The payout over the last decade, excluding last year, averaged approximately $4.60. Last year we were in the high sevens, but we are now in the mid four to low five dollar range, which is still above average for the last decade. That is not good enough, I hear you say.  True, we have had cost increases and we did have an expectation of good advances at the beginning of the season.  

But I can assure you Federated Farmers Dairy will do all it can to help you reduce the costs that keep coming through the farm gate.

Let's step back and look at the fundamentals of dairying on New Zealand's grass-based dairy system. Most of the world's traded milk is produced from housed cows and mainly cut and carry systems based on grain feeding. The cost of the grain and energy used to grow and carry this feed will, I predict, increase faster over the next decade than the cost of growing grass. Therefore, the world price of milk will have to increase, as many producers will not be able to produce with such small margins between the cost of feed and milk prices.  So, in my opinion, that is good news in the long-term for New Zealand's pasture-based dairy farmers.

But there will still be large price variability, possibly even larger than in the past, as there are limited world stocks compared to the past decade.  

We must ensure that the costs of production stay low enough to ensure our industry can survive the down turns. Ensuring that farm costs do not creep up unduly is one of Federated Farmers' focus points.

What have we done in this ‘cost for farming' space lately?

• Lobbying banks to reduce interest rates to farmers. There was a period where banks increased their margins/profits at farmers' expense. I know many farmers are still on fixed rates and it will take time for them to get the advantages of these lower rates.
• The Federation's campaign over the National Animal Identification and Tracking (NAIT) scheme was another success. I am sure there will be many changes to the original NAIT concept and these will reduce the compliance cost of tracing going forward. 

Policy/Advocacy

Let me now talk a little about how Federated Farmers develops its policy positions and advocacy role, as I feel there is some confusion in many members' minds. We often interchange the words policy and advocacy; however, they are different.

As elected representatives, we receive policy advice from staff and others, which we use to develop our position on an issue (e.g. our position against the ETS). This then leads us to state what our "position" or "policy" is on the issue.

In this respect, we value the input of the Federation's policy staff when it comes to forming our position on an issue.

Following on from this, advocacy is what we do once we have formed our position on an issue. Our aim here is to influence and change the minds of others on an issue. The Federation's elected representatives achieve this by talking to Members of Parliament, influencing company directors, utilising the media and so forth. In other words, we advocate for change in order to get the best results for our members.

I have found that many different entities formulate policy positions, but none advocate like the Federation. As the only independent voice for New Zealand farmers, we are well placed to advocate for your rights.  

It is important to remember, however, that you help set policy by responding to surveys and feedback requests. Only after consulting with members can we, the elected officials, then advocate for that position. This is very important for our industry going forward.

Lachlan McKenzie

Chairman, Federated Farmers Dairy              

New Zealand Dairy Industry Awards

The national awards final was held on 16 May in Wellington, with the winners announced at a gala dinner on Saturday. Members of Federated Farmers' head office took part in a couple of interesting events surrounding these awards; one of which entailed running around with the contestants in stormy weather all morning. This was interrupted by a couple of cows needing to be milked in the centre of town. It then finished with a bit of a jam session in the afternoon directed by a Brazilian music expert. A memorable day for the contestants, sponsors and Wellingtonians, who must have wondered what on earth was happening.

This year also marked the twentieth anniversary of the Sharemilker of the Year competition and Federated Farmers celebrated the milestone with past winners.

And the winners of the NZDIA 2009 are:

Sharemilker of the Year: Chris and Teresa Moore, of Rotorua.

Farm Manager of the Year: Shane Kelly, of Dobson.

Dairy Trainee of the Year: Mark Nicholas, of Whakatane.

Chris and Teresa also won the Federated Farmers Leadership Award.

Federated Farmers congratulates all winners and recognises the hard work put in by every entrant to get to the final. One thing is for certain, the dairy industry is in good hands.

For more information on the winners, please click here.

Emissions Trading Scheme (ETS) review

Federated Farmers recently delivered its submission to the Parliamentary Select Committee reviewing the ETS. We provided the committee with two options. The first was to scrap the ETS in favour of mitigation measures and Government purchase of carbon credits if needed. The second was for a heavy revision of the ETS in which economic tests are introduced and the primary production of food is excluded from any scheme. The committee is currently deliberating over the submissions and will report in due course. To read the Federation's submission, please click here.

Variable Order Sharemilking Agreement review

A joint committee has been formed from members of both the Sharemilkers' and the Sharemilker Employers' Sections to review the Variable Order Sharemilking Agreement.  Many of you responded to the questionnaire in the March Dairy Alert asking for your opinion on this Agreement. Thank you for the time and effort you put into your response. The information has been passed on to this committee and your input was appreciated.

Gypsy Day

Gypsy Day and winter is fast approaching, which means that lots of cows will be going on holiday or trying out greener pastures. Unfortunately, it is also the time when other road users and regional councils step up their complaints of effluent spilt on the road. 

Federated Farmers recently carried out a survey asking farmers about the practice of standing stock before transport. We found that more of you out there have taken up this good practice. Thank you for your responses to this survey. For more information about standing stock see the advice section below.

What have we done to deserve this?

Dairy farmers in Rotorua and Southland have been singled out for punishment, as two regional councils wield their unchecked rating powers and propose substantial new environmental rates.

Councils all over the country are consulting on their long-term council community plans - key documents setting out spending, revenue needs and rating policies for the next ten years. 

This year Environment Bay of Plenty (EBOP) and Environment Southland (ES) are using their draft plans to propose using rates to soak dairy farmers. They argue that dairy farmers are causing environmental harm to such an extent that they need to load up their rates to recover the costs.

EBOP is proposing a new $26 per hectare targeted rate on dairy farmers in the Rotorua Lake catchment. While ES wants to impose a massive 4:3 general rate differential on dairy farmers and a new water charge based on consented volumes.

The impact on dairy farmers will be severe, especially during these tight times. For example, the EBOP proposal will increase the rates for a 200 hectare dairy farm by no less than $5,200 per annum, while ES's own figures show that its hostile differential will increase the regional rates for a Winton dairy farm by an eye watering 159 percent.

These rates and charges are thinly disguised revenue grabs but the tragedy is that slamming the dairy farmers in this way won't actually help the environment. The regional councils are tarring all dairy farmers with the same brush. What's more, there is no incentive for those farmers using best practice, while there is the perverse incentive for greater intensification to stay financially viable.

Elsewhere, we have also seen regional councils getting tougher and tougher on farming in general and dairy farming in particular. Think Horizons One Plan and Environment Waikato's Variations 5 and 6. Environment Canterbury is also proposing charging for water by consent volume.

Federated Farmers has been fighting these and other ridiculous rates and punitive RMA plans and policies at a local level. However, it has become increasingly clear that a national fix is what's required. 

Local government is in dire need of reform and farmers across the country are putting their faith in the ‘Minister for Ratepayers', Hon Rodney Hide. We are currently engaging with Mr Hide in order to find a solution.

Remember to stand stock

The transport of stock between farms and run-offs present a number of challenges that must be overcome in order to avoid unnecessary animal suffering and effluent spillage on public roads. Federated Farmers encourages the responsible movement of stock in these situations. Good planning is vital.

• First of all, make sure stock are fit for transport. Animals must be able to bear weight on all four limbs, be in good condition and able to withstand the stress of transport.
• Next, stand stock off green feed for a minimum of 4 to 8 hours before transport (dry feed and water are acceptable) to reduce the risk of effluent spillage.
• If stock are to be picked up in the early morning, green feed should be removed the night before.
• If stock are to be picked up in the late afternoon, green feed should be removed in the morning.
• When standing stock off, provide enough space and a suitable surface to enable animals to lie down. Watch out for hoof damage if standing stock on concrete.
• Work with your transport operator to ensure trucks arrive on time and with empty (and clean) effluent tanks. Stock truck effluent tanks should be emptied between loads to reduce the risk of spillage.
• If you are receiving your own stock, be prepared to accept the effluent that comes with it and dispose of it in accordance with your regional council rules. Note that effluent must not be stored within 45 metres of the farm dairy/collection area.
• Acceptance of effluent from other stock or unknown sources is entirely at your discretion.

Keeping an eye on cash flow

During these challenging financial times, dairy farmers should keep themselves up to date on their projected cash flow for the winter months. Fonterra suppliers can do this by going into the Fonterra website (http://www.fonterra.com) and then, by using their personal log-in, go into the supplier's 10-day production page, click on ‘payments predictor' in the Number 2 "view" drop-down box, then click on Number 3 "go". Fonterra suppliers can also ring 0800 656 568 for this information. 

Reneging on contracts

It is very tempting when your budget is being squeezed to not follow through on that contract you made some months ago to buy in silage. Federated Farmers urges you to think again.  Talk to your supplier about renegotiating a price; you will be surprised at what you can achieve, as your supplier wants to sell his product and your cows want to eat it. Also remember that what goes around comes around.

Talking

Talk to your bank manager, your feed supplier and anyone else who has legitimate eyes on your money if you think your cashflow is looking grim. See if you can renegotiate terms, defer payments or return items to see you through the tight spots. Most will welcome the opportunity to talk you through the options that are available to you. Rural Support Trusts may be able to help as well by acting as advocates for financial assistance and helping make those difficult business choices. To visit the Rural Support Trusts website, please click here.

Federated Farmers encourages you to talk to your neighbour, local Federation Dairy members or anyone with a listening ear to help you through these difficult times. Remember, you are not alone.

Federated Farmers Dairy AGM and Conference

Federated Farmers Dairy will be holding its annual general meeting (AGM) and Conference in Auckland at the Rendezvous Hotel on Tuesday 30 June. This day will include discussion on various environmental issues and the up-coming Meat & Wool New Zealand Commodity Levy Act Referendum. Elections for the executive team will also be held. The agenda will be finalised within the next few weeks.

Registration papers have already been sent out. Please also note that nominations for the executive must be returned to Dairy Section policy advisor, Ann Thompson, before 5pm Friday, 12 June 2009. Send your nomination by post, fax or scanned image. For more information, or to make an executive nomination, please click here to contact Ann Thompson or call 04 494 9191.

One Event

The One Event Conference, also to be held at the Rendezvous Hotel in Auckland, follows on from the Federated Farmers Dairy AGM and Conference. The inaugural Plenary Event and Awards Dinner, where the Federated Farmers' Cream of the Crop Awards will be presented, will be held on Wednesday, 1 July. The National Conference on Thursday, 2 July will be preceded by breakfast with Prime Minister, the Hon John Key.

For more information about these events please click here to visit our website or click here to contact Eva Johnston.

Sharemilker AGMs

The Sharemilkers' Section will hold its AGM on Thursday, 18 June from noon to 5pm at Federated Farmers head office, 154 Featherston Street, Wellington. The Sharemilkers' Section AGM will be followed by a Leadership Day on Friday, 19 June. Attendance at this Leadership Day will be on a ‘first in, first served' basis and is limited to 15 members. 

The Sharemilker Employers' Section will hold its AGM on Monday, 15 June from 10am to 1.30pm at the Waikato Federated Farmers' Boardroom, 169 London Street, Hamilton. 

For more information, or to register for either AGM, please click here to email Ann Thompson or call 0800 327 646.

Meat & Wool New Zealand Commodity Levy Act Referendum

The five-yearly vote on the levy funding of Meat & Wool New Zealand for the 2010 to 2015 period will take place in August 2009. The outcome of this vote will fundamentally affect the New Zealand farming landscape over the coming years.

Meat & Wool New Zealand will be holding consultation meetings around the country to gauge farmer feedback. These should be completed by the end of June. For details of venues and times and the referendum roll registration form, please click here to visit the Meat & Wool New Zealand website.

We are keen to receive feedback from these meetings. If you can offer some please click here to contact a member of the Federated Farmers Dairy Executive or Council or click here to contact Ann Thompson or call 0800 327 646, 04 494 9191 or fax 04 473 1081.

We strongly encourage farmers to register to vote, attend the consultation meetings and gather the information necessary to make an informed decision on the referendum. But most importantly, we urge you to take part in the postal vote when it is held in August.

Special discounts - To find out more about special discounts for members call 0800 327 646 or login to the members area for special discounts.

Contracts and agreements - Members can purchase these at a discounted rate by calling 0800 327 646.

Solahart - Get in quick for a Government subsidy on Solahart hot water systems before 30 June. Solahart is also offering a special 10 percent discount to Federated Farmers members. Solahart is the largest manufacturer of solar hot water systems worldwide, exporting to more than 80 countries. Their residential and commercial product range features solar water heaters including cowsheds, solar skylight installations, solar ventilation and solar swimming pool heating. A 10-year warranty is also available. Conditions apply. Call 0800 769 377 for more information.

The best time to get health insurance is when you're healthy - Southern Cross health insurance is available to you and your immediate family at reduced rates through the Federated Farmers group scheme. Take control of your health choices and protect the life you're living. Call Southern Cross today on 0800 100 555.

Associate membership offer - Federated Farmers Associate membership is an attractive employee benefit, which can be included as part of a remuneration package, used as a bonus for targets achieved or simply to say thank you to a valuable staff member. Associate members of Federated Farmers receive all the products and services of full members. For more information please call 0800 327 646.

Farm Data Security Agreement - Federated Farmers have a new Farm Data Security Agreement. The agreement outlines confidentiality and security arrangements for farmers who supply farm data (such as land information, herds, finances) to third parties to provide services. To purchase an agreement please call 0800 327 646

Rural jobs - Looking for a job or trying to find someone? Then make the first stop a visit to Federated Farmers website. To advertise for employees or to see what is available please click here.

Ford deal - Federated Farmers members are eligible to receive significant savings off the retail price on selected new Ford vehicles. See your Ford dealer for details. Ford has just released its new 2009 Ranger. The Ranger's solid chassis, muscular body and rugged styling will convince you that no matter the terrain or load, it will keep coming back for more. For more details please click here.

Shed kitset discount - Exclusive to Federated Farmers' cardholders, save $540 on a Totalspan 6m span flat roof farm shed kitset, now just  $4,870. April only. Build it yourself or Totalspan can do the job for you. For more information call 0800 868 257.

Fight rural crime - DataDot is an initiative to help fight rural crime. Each 1mm diameter microdot is laser-etched with a PIN number. DataDots can be applied to farm equipment, computers, laptops, and tools. DataDot Technology Ltd would like to offer Federated Farmers members the opportunity to purchase the DataDot Rural Protection Pack, containing enough DataDots to mark household items, a workshop full of tools and a quad bike, for a special members-only price of $112.45. That's a 25 percent discount on the normal retail price of $149.95. To order please phone 0800 4DataDot or click here to visit the DataDot website.

Smiths City - Smiths City is proud to offer a 10 percent discount to Federated Farmers members. Simply present your Federated Farmers membership card at any Smiths City store to take advantage of a 10 percent discount on their range of furniture, furnishings, appliances, sporting goods and outdoor products available from 24 locations nationwide.

Employment contracts and agreements - These include: job application forms, leave forms, drug and alcohol agreements as well as time/wage/holiday registers.  Visit the Federated Farmers website to purchase.

Contracts, agreements and leases - Such as: land, stock, contractor; sales and purchase, agreement to grow, log books, access pads and Over Dimension Certificates.  Visit the Federated Farmers website to purchase.

E-contracts, e-agreements, e-leases - Members can now purchase online, electronic Federated Farmers contracts and agreements. Visit the Federated Farmers website to purchase.

Books - For a good reading list or for business related books. Visit the Federated Farmers website to make a purchase or to browse.

E-books - E-Books are books that are accessible online for your convenience. Federated Farmers offers the opportunity to buy these online. There are a range of informative booklets for employers and employees alike. Visit the Federated Farmers website to make a purchase or to browse.

Clothing -  Be proud to be a member of Federated Farmers by wearing the name proudly.  Visit the Federated Farmers website to purchase.

Please remember, if there are any issues you would like to discuss, contact Federated Farmers on 0800 327 646 or contact your local dairy section chairman or one of the executive team as listed below.

Federated Farmers of New Zealand, PO Box 715, Wellington 6140
Tel: 04 473 7269, Fax: 04 473 1081, website: www.fedfarm.org.nz

Staff Contacts
Dairy policy advisor - Ann Thompson

0800 327 646, 04 494 9191, athompson@fedfarm.org.nz

Travel administrator

0800 327 646, travel@fedfarm.org.nz

Executive Contacts
Chairman -  Lachlan McKenzie

07 332 3440, 021 382 442, lmckenzie@fedfarm.org.nz

Vice-chairman - Willy Leferink

03 307 2666, 021 796 037, legro@orcon.net.nz

Vice-chairman - John Bluett

07 825 9709, azz@xtra.co.nz

Executive - Robin Barkla

07 323 6958, rbarkla@orcon.net.nz

Executive - Andrew Hoggard

06 328 9677, 027 230 7363, ajhoggard@farmside.co.nz

Sharemilker Representative - Jeff Bolstad

07 884 4127, jkbolstad@xtra.co.nz