Jan 29, 2018 - Synlait Milk (NZX: SML; ASX: SM1) has reaffirmed its milk price forecast of $6.50 kgMS for the 2017 / 2018 season. However the company has signalled that this forecast is dependent on commodity prices continuing to firm for the rest of the season.
Jan 25, 2018 - Synlait (NZX: SML; ASX: SM1) will welcome Dr Suzan Horst to the Senior Leadership Team on 1 April as Director of Quality, Regulatory and Laboratory Services. Managing Director and CEO John Penno says Dr Horst is a leading authority in the global dairy industry and has much to offer Synlait.
Jan 18, 2018 - On January 16, Cedenco Foods New Zealand Ltd. started its annual sweetcorn harvest, and the company expects a bigger yield than last year. More than 40,000 tonnes of corn is to be picked over the next three months.
Jan 17, 2018 - Minister of Agriculture Damien O’Connor travels to Europe today to speak at the Global Forum for Food and Agriculture, held during International Green Week in Berlin.
The forum’s theme is “shaping the future of livestock – sustainably, responsibly, efficiently”.
New Zealand’s leading role in the Global Research Alliance on Agricultural Greenhouse Gases was a large factor in the invitation to take part in the forum.
“The global challenge is to produce more food with less emissions intensity – this requires research and innovation and is key to meeting the projected increase in worldwide food demand of 70 per cent by 2050,” says Mr O’Connor.
At the forum, Mr O’Connor will highlight New Zealand’s leadership credentials in sustainable livestock production and build relationships with other agriculture ministers from around the world, including through bilateral meetings with counterparts from Argentina, Brazil, the European Commission, France, Germany, Lithuania, Mexico and Poland.
While there he will also engage with key European and New Zealand stakeholders with interests in the launch of EU-NZ free trade agreement negotiations, and Brexit.
“Rural communities across the world are often the life-blood of our societies and heritage. New Zealand is confident that an FTA between our country and the EU will provide opportunities for farmers in both Europe and New Zealand and facilitate greater agricultural cooperation, benefiting rural communities on both sides.”
He will also travel to Ireland, Denmark and Spain to meet his counterparts and discuss mutual issues affecting agricultural production and trade.
“Speaking of international influences on our primary sector, it’s good to see an uplift in dairy prices in the latest GDT overnight. Farmers will welcome this, especially those doing it particularly tough in our regions in drought.”
Jan 4, 2018 - Nineteen maintenance workers at Silver Fern Farms Takapau are very disappointed that instead of improving their offer after today’s strike action, the company has made the offer even worse. Before the workers took industrial action, the company had offered a 1.5% increase as back pay for the nine months prior, followed by 2% increase at the time of settlement.
Dec 14, 2017 - Alliance Group is exceeding its target for achieving gains from its business strategy and forging ahead with plans to further lift the co-operative’s performance, farmer shareholders were told at the co-operative’s Annual Meeting in Te Anau today. Murray Taggart, chair of Alliance Group, said the co-operative’s ongoing programme of strategy projects captured $48.8 million in value this year.“The value captured from our strategy projects is a major factor driving our ability to offer competitive farm gate pricing and invest in the company.“Alliance’s improved profitability means we will be distributing $11.4 million in pool payments to our farmers’ bank accounts this week“Once again, this demonstrates the fundamental benefit of a co-operative, where every dollar we make is either reinvested for the future or returned to farmers.”The company experienced a more positive trading environment during 2017, said Mr Taggart.“Although market volatility and weather events remain a constant threat, the level of supply and demand for our farmers’ produce look set to underpin strong pricing, particularly for sheepmeat and venison.“However, we are acutely aware of the impact the drier conditions are having on our farmers’ businesses and we’ve responded by bringing on additional processing capacity across our plant network.”Alliance Group Chief Executive David Surveyor said the co-operative is moving steadily in the right direction, but the company would not be resting on its laurels. “We have successfully navigated the first phase of transforming the business and we are now focused on stage two to ensure this transformation is sustainable.“We recognise there is a lot of hard work ahead of us to lift the performance of the co-operative to the level our shareholders expect. The good news is there are a number of exciting and innovative initiatives in the pipeline.”The key priorities next year would be growing the value add part of the business and capturing more value from the co-operative’s global markets, said Mr Surveyor.Alliance Group has already invested in developing a food service business in the UK and purchased the Goldkiwi Asia business in Singapore, now known as Alliance Asia.“Strengthening Alliance’s in-market presence is vital if we are to capture greater value and these investments are only the first steps down this path.”Alliance is also exploring opportunities to capture more revenue from co-products.“Our $800,000 investment in a new blood processing facility at our Mataura plant is just the start. We have a number of other exciting value capture projects underway.”The pool distribution payments will be paid into farmer shareholder’s accounts on Friday 15 December. The distribution will be as follows: Lambs: $1.80/headSheep: $1.00/headCattle: $10.00/headDeer: $7.50/headCalves: $1.00/head Directors Dawn Sangster and Russell Drummond were re-appointed to the Board unopposed in October.
| An alliance Group release || December 14, 2017 |||
Dec 13, 2017 - Minister for Agriculture, Biosecurity, Food Safety and Rural Communities Damien O’Connor announced today that the Ministry for Primary Industries (MPI) will reorganise its functions to create a stronger focus on core responsibilities. Mr O’Connor says government will set up four portfolio-based entities, Fisheries New Zealand, Forestry New Zealand, Biosecurity New Zealand and New Zealand Food Safety.
“Our priority is to achieve greater clarity and unity of purpose for these areas. We are seeking enhanced visibility of government policy and regulatory activities and clearer lines of accountability and engagement for stakeholders.
“We are now looking to the Director General of MPI to work with his team to achieve this, while ensuring prudent and efficient use of taxpayer and industry funds.
“MPI will continue to meet the expectations of our international trading partners as the competent authority.’’
MPI will build up its forestry presence in Rotorua, Mr O’Connor says.
“Rotorua’s location puts it at the heart of our forestry sector and makes it the most appropriate site for a dedicated forestry presence to support the Government’s ambition in this important sector.
“It’s likely further change in the forest space will occur after policy and operational work to deliver the Government’s ambitious goals in this area.”
Reorganisation of MPI’s functions will occur in the early part of 2018 and will be in place by April.
“I would like to thank MPI staff for their commitment and hard work in the primary sector and assure them that there will be no reduction in staff numbers as a result of these changes. This change is about increasing focus and ensuring greater visibility of fisheries, forestry, biosecurity and food safety,” Mr O’Connor says.
The estimated cost to implement the changes is $6.8 million to establish the four portfolio-based business units. Additional ongoing operating costs are estimated at $2.3m per annum.
Mr O’Connor says reprioritised money from the Primary Growth Partnership Fund will pay for the changes so there will be no additional cost to taxpayers.
“This is a prudent and cost-effective change that can be managed with existing monies.’’
Dec 12, 2017 - The growth in New Zealand’s primary industry exports is impressive and provides the sector a strong base to deal with the challenges ahead, says Agriculture Minister Damien O’Connor. The latest Situation and Outlook for Primary Industries report shows the sector’s exports will grow by 8.5 per cent in 2018, to $41.4 billion.
“This would be the largest annual increase since 2014 when dairy prices rose to very high levels,” says Mr O’Connor.
“Growth this year is spread across all sectors and these gains are expected to be built on a more sustainable foundation.”
Mr O’Connor says dairy exports are leading the way, with a forecast increase of 15 per cent to $16.8b in 2018 despite the wet spring affecting production.
“Despite a decline in cow numbers, there has been some better value for exporters. The sector continues to provide a solid base for a better future.
“Meat and wool exports are forecast to grow 4.2 per cent to $8.7b, with lamb prices looking really good and beef, mutton, and venison also doing very well.
“The forestry sector is on pace for a third consecutive year of strong export growth with exceptional demand from China. Forestry exports are forecast to reach nearly $5.7b in 2018.”
Mr O’Connor says New Zealand’s primary industries are evolving.
“Our horticulture sectors are leading the charge in producing high-value products tailored to target markets overseas. This isn’t just true for kiwifruit, wine, and apples - there are also emerging opportunities for cherries, avocados, and berries.
“We are also seeing a huge shift to high-value products in the dairy sector. For example, infant formula exports are forecast to exceed $1b in 2018 for the first time. UHT milk, yoghurt, and other specialty products are also doing very well.
“We are a primary producing nation and it is very encouraging that the prospects for the primary industries look so bright. However, New Zealand and other primary producing nations face the global challenge of sustainability – we need to provide good quality, nutritious food for a rapidly rising global population but we must do this in a way that is sustainable.
“This means placing an even greater focus on high-value production, sustainable resource use, managing the risks posed to our primary sector by harmful pests and diseases, and meeting ever changing consumer demands.”
The news is also good for other sectors:
* Horticulture exports are forecast to grow 5.2 per cent in 2018 with broad-based growth across the sector. Wine, kiwifruit, and pipfruit are all contributing to this growth story, and there is a high level of investment supporting further growth.
* Rising prices for wild capture fisheries products and aquaculture volumes are expected to contribute to a 4.4 per cent increase in seafood exports to $1.8b.
* Honey export volumes are forecast to resume growth after a dip in 2017, while exports of innovative processed foods, including dietary supplements products, are expected to resume their growth.
Dec 7, 2017 - Fonterra Co-operative Group Limited today reduced its forecast Farmgate Milk Price for the 2017/18 season from $6.75 to $6.40 per kgMS and updated the market on its financial results for the first three months of the 2018 financial year. Chairman John Wilson says the lower forecast Farmgate Milk Price reflects a prudent approach to ongoing volatility in the global dairy market. The GlobalDairyTrade price for whole milk powder is a big influencer of the Farmgate Milk Price and it has declined by almost 10 percent since 1 August 2017.
“While the result of the arbitration with Danone has impacted our earnings guidance for the season, it has no influence on our forecast Farmgate Milk Price,” says Mr Wilson.
“What is driving this forecast is that despite demand for dairy remaining strong, particularly in China, other parts of Asia and Latin America, we are seeing strong production out of Europe and continued high levels of EU intervention stockpiles of Skim Milk Powder.
“This downward pressure on global prices is being partly offset by the lower NZ-US dollar exchange rate,” says Mr Wilson.
“Our strong financial position, customer order book at this point in the year, and confidence in demand means that the Board is able to increase the payments made in January by 10 cents per kgMS and will hold the Advance Rate through to the payments in May.
“In effect, our farmers will receive equal or higher payments for their milk over this period than were scheduled under the previous $6.75 milk price.
Fonterra has also updated its full season New Zealand milk collection forecast due to ongoing challenging weather conditions. The Co-operative has reduced its forecast by 1 per cent to 1,525 million kgMS – the same volume as last season.
First Quarter Financial Results
Fonterra’s first quarter revenue of $4 billion is up 4 per cent on the same period last year. Sales volumes are down 20 per cent to 3.9 billion liquid milk equivalent (LME), while the gross margin of 16.7 per cent is also down.
Chief Executive Theo Spierings says the first quarter financial results were generally as expected as the Co-operative started the year with record low inventory followed by the second year of low spring milk collections from New Zealand due to wet weather.
“This has challenged our Ingredients business where we had lower volumes to sell. As a result, sales were down 19 per cent to 3.6 billion LMEs compared to the same time last year.
The gross margin in Ingredients was in line with the second half of last year. However, when we compare it to the same period last year it was down from 12.1 per cent to 8.1 per cent, mainly due to the rise in commodity prices,” says Mr Spierings.
“Our Consumer and Foodservice business continued with strong sales volumes in our key markets across both Greater China and Asia with, overall, just a 3 per cent decline to 1.3 billion LMEs in total volume compared to the record levels at the same time last year.
“Gross margin in Consumer and Foodservice was 24 per cent. While this is down on the 31 per cent in the first quarter of 2017 when input costs were lower, it is up on the gross margin percentage in the last quarter of 2017. This positive trend demonstrates we can create more value in our Consumer and Foodservice business despite higher input costs and reflects the strength of our strategy of moving more volume into higher value.”
Mr Spierings says the Co-operative expected performance to be weighted to the second half of the year and remains confident in its full year forecasts following revisions after the recent Danone announcement.
“We are focused on continued tight operational and financial discipline and a keen eye on our customers’ needs to maximise sales opportunities.”
| A Fonterra communication || December 7, 2017 |||
Nov 21 2017 - Synlait Milk (NZX: SML; ASX: SM1) has opened its new Auckland site, which is home to its second state -of-the-art blending and consumer packaging facility. Located in Mangere, the site was officially opened today by Auckland Mayor Phil Goff at a ceremony alongside all staff. “We’re expecting customer demand for consumer packaged products to increase significantly in the near term,” said John Penno, Synlait’s Managing Director and CEO.
“We’ve invested $55 million into our Auckland site to meet this demand and expect commercial production to start here in the coming week.” With an annual packaging capacity of 32,000 metric tonnes (MT), the new site doubles Synlait’s overall canning capacity to 64,000 MT. “A tremendous amount of work has gone into this milestone. We acquired this partially-completed facility in May and have executed a significant programme of work to commission it in just over six months,” said Mr Penno.
“We have employed a great team of 30 people to operate this facility and we expect that number to increase to 100 in the coming year as we add additional shifts ,” adds Mr Penno. Mayor Goff said, “It’s a pleasure welcoming innovative, high value businesses such as Synlait to Auckland. The new site in the high growth commercial district around our airport will create 100 jobs in our city and increase the amount of safe, premium dairy products, for which New Zealand is well known, heading to major markets around the world.” The strategic decision to invest in Auckland has helped to mitigate some of the single site risk faced by Synlait with their original Dunsandel site in Canterbury, as well as increasing future growth in business with infant formula customers. “Under the Chinese Food and Drug Administration (CFDA) infant formula rules coming into effect on 1 January 2018, this second site gives us the opportunity to increase the potential number of our customer brands we can export to China,” said Mr Penno. Acquiring the partially-completed site has also allowed additional consumer packaging capacity to become available much earlier to Synlait than a new development would have.
“We are currently operating at capacity in our canning facility at Dunsandel. Having Auckland in place means we can meet our customers’ needs and continue to grow with them ,” said Mr Penno.
Registration of the new facility with both MPI (Ministry for Primary Industries) and CNCA (Certification and Accreditation Administration of the People's Republic of China) is progressing well. “We have conditional approval from MPI and we expect to finalise this, along with other registration requirements, very soon . We expect to commence commercial production this week, ” said Mr Penno.