Early Bird I Monday June 10th 2024

On farm inflation drops but farmers are still struggling, the Southern Hemispheres largest agricultural event kicks off this week and deer farmers frustrated with NAIT issues. 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! On farm inflation drops but farmers are still struggling On-farm inflation has dropped to 2.8 percent, but farm input prices continue to strain profitability, according to the latest Sheep and Beef On-farm Inflation report from Beef + Lamb New Zealand.  Board chairwoman, Kate Acland, noted that despite a significant reduction from the previous year’s 16.3 percent inflation rate, challenges remain severe. Acland emphasised the cumulative impact of high input prices over recent years, pointing out that sheep and beef farmers have faced a 32 percent increase in input prices between 2021-22 and 2023-24. Although the inflation rate has decelerated, input prices continue to rise, albeit at a slower pace. Farmers are still contending with substantial cost increases in key areas such as interest, insurance, and animal health. Interest rates, in particular, have been a major contributor to on-farm inflation. Beef + Lamb NZ has forecasted a 54 percent drop in sheep and beef incomes this year, predicting that most farmers will not turn a profit. Increased costs, along with softer prices for sheepmeat, have been key drivers of this decline in profitability. While on-farm inflation was lower than consumer price inflation, which stood at 4.0 percent between March 2023 and March 2024, the ongoing high costs of essential farm inputs underscore the challenges faced by sheep and beef farmers. Milk production stalls but expected to pick up New Zealand milk production has stalled over the past eight years but has not "peaked" and will grow again when farmers receive the right market signals That's according to Coriolis consultancy principal Tim Morris who says that milk production per cow has consistently increased by 1% annually for the past 50 years. Morris pointed out that New Zealand is far from reaching the biological limit of milk production. And attributed the recent stagnation in production to muted price signals and rising input costs outpacing milk prices. Morris also highlighted trends of long-term farm consolidation and increasing milking platform sizes. Effective hectares per farm have increased by 2% annually since the 1980s, with larger farms generally having lower costs per cow and per hectare. He emphasised that global demand and consumption for milk have not stalled, indicating that this issue is specific to New Zealand. The trends indicate that the average New Zealand dairy farm has maximised grass production per cow at current stocking densities and management systems. There are differing opinions on whether this situation represents "peak dairy" or merely a cyclical retrenching.  If New Zealand cows were producing at similar levels to Ireland, Australia and the U.K, the country would need up to one million fewer cows than the current 4.9 million to maintain its national milk production. The Southern Hemispheres largest agricultural event kicks off this week The countdown to Fieldays 2024 is just about over, with just a few days to go.  From Wednesday to Saturday, visitors will flock to Mystery Creek in Waikato for the 56th edition of the largest agricultural event in the Southern Hemisphere. Last year, over 105,000 people attended the event over four days, and the organisers, the New Zealand National Fieldays Society, aim to surpass that number this year. Visitors can expect around 1,000 exhibitors showcasing farm machinery, cutting-edge technology, great deals, innovations, and artisan food. Highlights of the event include the fencing, tractor pull, and excavator competitions, as well as the Fieldays Innovation Awards. The annual Fieldays Innovation Awards has 20 finalists competing for a share of a prize package worth more than $70,000, including categories for Young Innovator, Prototype, Early-Stage, and Growth & Scale.  This year introduces the Rural Advocacy Hub, bringing various rural organisations that advocate for farmers and champion their interests together under one roof. There will be seven special hubs in total, highlighting different aspects of the agriculture sector: the Rural Advocacy Hub, Digital Futures Hub, Forestry Hub, Sustainability Hub, Careers and Education Hub, Hauora Taiwhenua Health and Wellbeing Hub, and the Innovation Hub. Gates open Wednesday morning from 8:30 at Mystery Creek in Hamilton. Deer farmers frustrated with NAIT issues Deer farmers are raising concerns over issues with the National Animal Identification and Tracing system (NAIT), with some facing charges for not registering their animals despite having done so.  Farmers are legally required to tag and register livestock through NAIT, but Deer Industry New Zealand (DINZ) reports ongoing problems with the software, resulting in animals appearing as unregistered. Mandy Bell, Chair of DINZ, says that incorrect data being relayed to the Ministry for Primary Industries (MPI) could lead to farmers being charged for non-compliance. She pointed out a disconnect between the animal disease management agency OSPRI and MPI, explaining that even when inaccuracies are noted by OSPRI, farmers still receive non-compliance charges from MPI. In response, OSPRI stated it is investigating the matter, particularly focusing on how farmers use NAIT software alongside other third-party software. Clifton King, OSPRI's Head of Traceability, Planning, and Integration, acknowledged the complexity of the issue and the ongoing investigation, and says that OSPRI was not aware of similar issues affecting other livestock sectors and emphasised that the investigation would help improve the guidance provided to farmers regarding registrations. This situation coincides with a triennial review of the traceability scheme and OSPRI's governance, which is set to begin this month. Hundreds of thousands of dollars distributed from a2 Sustainability Fund The a2 Farm Sustainability Fund in New Zealand has announced a total of $440,000 in awards to 18 dairy farms across Southland, Canterbury, and Waikato.  Established in 2022, the fund is a collaboration between The a2 Milk Company and Lincoln University, aimed at supporting farm projects that demonstrate an integrated approach to sustainability and have a meaningful impact on the community and environment.  The current round of grants has been awarded to projects focusing on diverse riparian planting, alternative fertiliser use, diverse pasture implementation, wetland restoration, and tree planting to enhance biodiversity and provide shelter for animals.  Jaron McVicar, Chief Legal and Sustainability Officer at The a2 Milk Company, was impressed with the record number of high-quality applications, indicating strong interest from farmers across New Zealand.  Applications for the fund were open to farmers supplying A1 protein-free milk processing plants part-owned by a2 Milk Company in the three regions: Southland’s Mataura Valley Milk, Synlait Milk in Canterbury, and Waikato.  The a2 Farm Sustainability Fund also operates in Australia, partnering with Landcare Australia, a not-for-profit organisation focused on the sustainable management of natural and productive landscapes. 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