Early Bird I Monday August 19th 2024

Synlait and a2 Milk reach conditional agreement to resolve contract disputes, rural real estate sector optimistic after OCR cut, and excellence in farming recognised at Arable Industry Awards. Welcome to Proud Country's Early Bird - The top things you need to know that impact rural New Zealand delivered to you by 5am, because who doesn’t need better chat beyond the weather! Synlait and a2 Milk reach conditional agreement to resolve contract disputes, Synlait Milk and its main customer, a2 Milk, have conditionally agreed to resolve their ongoing contract disputes. This agreement comes as a lifeline for the financially troubled Synlait. A2 Milk, which owns nearly 20% of Synlait, has pledged to support Synlait's upcoming capital raise. However, the settlement hinges on Synlait successfully completing this equity raise and refinancing its existing banking facilities. Under the new agreement, Synlait's exclusivity for producing "a2 Platinum" formula and other nutritional products will end in January 2025. Despite this change, Synlait will retain its crucial Chinese regulatory registration for its Dunsandel facility until September 2027. As part of the settlement, a2 Milk will make a one-off payment of $24.75 million to Synlait. The companies have also agreed to collaborate on developing a new product for the Chinese market. This resolution follows Synlait shareholders' recent approval of a $130 million loan from China's Bright Dairy, the company's largest shareholder. Bright Dairy has also expressed full support for Synlait's equity raise. Synlait's CEO, Grant Watson, hailed the agreement as a positive step in the company's recovery plan. The news has been well-received by the market, with Synlait's shares surging 18% and a2 Milk's stock price also seeing a modest increase. Rural real estate sector optimistic after OCR cut The Reserve Bank's decision to lower New Zealand's official cash rate by 25 basis points has been welcomed with relief by the primary sector, particularly the rural real estate industry. PGG Wrightson's General Manager for Real Estate, Peter Newbold, described the announcement as "massive". Newbold, who earlier estimated rural sales were down about 30% year-on-year in May, believes this OCR drop will be enough to shift sentiment within the sector. He expressed newfound optimism, stating the move will drive change and boost confidence among market participants. However, Newbold cautioned vendors to maintain realistic expectations. He emphasised that while the rate cut creates more selling opportunities, it doesn't necessarily translate to increased property values. His advice to those considering listing rural properties is to focus on the improved chances of selling rather than anticipating value increases. Looking ahead to the spring season, Newbold reported an uptick in inquiries about upcoming listings. He expressed greater confidence in the market outlook compared to just days ago, noting that further rate cuts would only enhance the positive trend. In the dairy sector, Newbold highlighted increased interest from farmers looking to add support blocks to their existing properties. For sheep and beef properties, Newbold stressed that the key factor remains the value proposition for potential buyers. He believes transactions will occur if the value is right, underlining the continued importance of realistic pricing in the market. As the rural real estate sector heads into its traditionally busy spring period, this OCR cut appears to have injected a welcome dose of optimism, potentially setting the stage for increased market activity in the coming months. Southland stakeholders to address 'Whole of District' approach in new plan Southland Federated Farmers and Hokonui Rūnanga have agreed to meet and clarify the Gore District Council's proposed district plan, specifically regarding Sites and Areas of Significance to Māori (SASM). Southland Federated Farmers president, Jason Herrick, expressed concern about what he views as potential overreach in the proposed plan. Herrick points to a section of the plan stating that "all land, water bodies, natural features, and marae within Gore District are recognised as sites and areas of cultural significance." He interprets this as designating the entire district as an SASM. However, Hokonui Rūnaka representative Terry Nicholas offered a different perspective. Nicholas explained that from a Ngāi Tahu viewpoint, all landscapes and natural environment elements are considered holistically. He says that no specific sites or areas are singled out in the proposed plan. Nicholas argues that the "whole of district approach" is not unique and has been supported by Federated Farmers in other districts. He believes the proposed plan aims to identify high-risk activities impacting Ngāi Tahu cultural values and could actually reduce the consent burden on farmers. The plan would change how Ngāi Tahu values are considered in resource consents. Nicholas stated that under the current plan, any activity requiring resource consent could need an assessment of Ngāi Tahu cultural values. The proposed plan would provide more certainty about when such considerations are necessary. Archaeological sites, already known to farmers and identified in property records, would be included in the proposed plan. As the district plan moves forward, the outcome of this discussion could have significant implications for both farmers and Māori in the region. Excellence in farming recognised at Arable Industry Awards The New Zealand arable industry has celebrated its top achievers and innovators at the 2024 Arable Industry Awards held in Christchurch. Manawatū farmer Simon Nitschke, known for his consistently high crop yields and willingness to share agronomic knowledge, took home the prestigious Arable Farmer of the Year award. Nitschke also claimed the Maize Farmer of the Year title, highlighting his expertise in crop production. Nitschke's farm in Marton showcases his agricultural prowess, with up to 200 hectares of maize grain and 100 hectares each of wheat and barley under cultivation. The judging panel commended his exceptionally high yields, attributed to careful cultivar selection, effective soil fertility management, and optimised resource use. His Arable Solutions business has invested in advanced grain-drying facilities and offers comprehensive contracting services. Federated Farmers arable chair David Birkett praised the high calibre and commitment of this year's award winners across seven categories. He emphasised the arable sector's crucial role in New Zealand's agriculture, noting its contributions to domestic food staples, seed export markets, and support for the dairy, meat, and wool industries. Mid-Canterbury farmer Syd Worsfold was inducted into the newly formed NZ Arable Hall of Fame. With a 40-year career in the sector, Worsfold is recognized for his long-standing industry involvement and willingness to mentor fellow growers. Waikato’s David Finlayson received the Positive Environmental Impact Award, the Innovation Award went to Dr Soonie Chng from New Zealand Institute for Plant and Food Research, Canterbury-based Liquid Injection Arable Growth Group received the Working Together Award, the Agronomist of the Year is David Weith from Timaru, the Cereal Grower of the Year went to Peter Hewson, also from Timaru and the Seed Grower of the Year is Scott Rome from Gore. HortNZ Launches 'Taste the Yakka' Campaign to Rally Support for Kiwi Growers Horticulture New Zealand (HortNZ) has kicked off a new awareness campaign aimed at garnering public support for the country's fruit and vegetable growers. The "Taste the Yakka" initiative showcases the hard work, innovation, and dedication that goes into producing fresh produce across New Zealand's regional communities. At the heart of this digital campaign is a short video that takes viewers on a sensory journey through the horticulture sector, highlighting the journey of locally grown food from farm to table. The campaign aims to connect urban dwellers with the origins of their fresh produce and the people behind its cultivation. HortNZ is emphasising the importance of this connection, particularly given the central role food plays in bringing together families and friends. The organisation hopes to shine a light on the daily efforts of growers who work tirelessly in all weather conditions to deliver high-quality produce. The campaign video showcases various aspects of food production, including weather challenges, research, planning, science, soil management, teamwork, and the passion that drives the industry. By doing so, HortNZ aims to build a stronger appreciation for the sector among New Zealanders from all walks of life. To encourage engagement, the campaign offers the chance to win a year's worth of Wonky Box fruit and vegetables for those who sign up and pledge their support.  The horticulture industry currently faces numerous challenges, including extreme weather events, evolving government regulations, and increasing production costs. Despite these hurdles, growers continue to demonstrate resilience and determination in their mission to provide nutritious fruits and vegetables for Kiwi households. As the voice for over 4,500 commercial fruit and vegetable growers in New Zealand, HortNZ hopes the campaign will foster a deeper understanding and appreciation for the vital role the horticulture sector plays in the country's economy and daily life. See omnystudio.com/listener for privacy information.