Early Bird I Tuesday September 17th 2024

Kiwi exporters benefit as government clears trade hurdles, AgResearch gets government boost of $3 million for research projects, and farm conservation efforts lead to rare mudfish discovery. 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! Kiwi exporters benefit as government clears trade hurdles New Zealand's agricultural sector is set to reap the rewards of the government's recent efforts to clear international trade hurdles. Trade and Agriculture Minister Todd McClay has announced the removal of barriers affecting nearly $190 million worth of our exports, a move aimed at boosting our economy and supporting rural communities. Over the past year, the government has tackled 14 Non-Tariff Barriers, or NTBs, which have been holding back Kiwi exporters. These obstacles, ranging from complex certification processes to import restrictions, have been particularly challenging for our primary sector. Minister McClay highlighted the significance of these wins, noting that one in four jobs in New Zealand is tied to trade. By clearing these hurdles, the government aims to put more money into the pockets of hard-working New Zealanders, especially those in our rural and agricultural communities. Some key victories for our exporters include resolving labelling issues for New Zealand cheese in South Korea, streamlining certification for onion exports to Indonesia, and restoring log exports to India. These changes have immediate benefits for our farmers, growers, and rural businesses. The wine industry also stands to gain, with expanded labelling flexibility now agreed upon with the European Union. This change should make it easier for our wine producers to market their products in this crucial market. Looking ahead, the government has its sights set on even more improvements. Plans are in place to address EU deforestation regulations, which could impact our agricultural exports, and to tackle Canadian dairy import restrictions. There's also a focus on expanding opportunities for our cosmetics exports to China and easing restrictions on structural timber exports to Australia. Synlait Milk secures $450 million refinancing deal Synlait Milk has successfully refinanced its banking facilities for another year. This move, totaling $450 million, marks a crucial step in the company's business recovery strategy. The new funding arrangement includes a working capital facility with a peak of $160 million, a $10 million on-demand bilateral facility, a revolving credit facility of $205 million, and a term loan facility of $75 million. These facilities are set to mature 12 months from the closing date, expected to be October 1 this year. Synlait's new banking syndicate comprises a mix of domestic and international institutions, including ANZ, Bank of China, Bank of Communications, China Construction Bank, HSBC, Industrial and Commercial Bank of China, Kiwibank, and Rabobank. This diverse syndicate underscores the global interest in New Zealand's dairy sector. Chief Executive Grant Watson emphasised the significance of this refinancing, stating it represents another positive step forward in Synlait's business recovery plan and efforts to deleverage the company's balance sheet. The refinancing is contingent on several conditions, including an upcoming capital raise. Shareholders are set to vote on a proposed $218 million capital injection from Synlait's two largest shareholders, Bright Dairy and The a2 Milk Company. This vote, scheduled for Wednesday at Synlait's Dunsandel site, is crucial for the company's plans to reduce its debt burden. Proceeds from the equity raise and certain tranches of the new facilities will be utilised to repay outstanding bank debt and Synlait's $180 million listed bond. AgResearch gets government boost of $3 million for research projects In a move to address key challenges in New Zealand's agricultural sector, the government has allocated approximately $3 million to AgResearch. This funding aims to drive innovation in tackling industry issues such as plant diseases and environmental impacts. The investment comes through three Smart Idea grants, awarded as part of the 2024 Endeavour Fund. This initiative, announced by Science Minister Judith Collins, seeks to support research that pushes boundaries and delivers results to enhance our nation's economy, environment, and society. AgResearch Chief Scientist Axel Heiser has welcomed the funding, stating that exploring new approaches to long-standing issues is crucial given the current challenges our agricultural industries are dealing with. He says that while the impact may not be immediate, the long-term gains could be significant. The grants will support three innovative projects at AgResearch. The first initiative aims to develop new biomaterials using protein, creating environmentally sound alternatives to plastics. These materials could eventually be used in products ranging from cycle helmets to mobile devices. A second project targets fungal diseases, a major threat to both crops and livestock. Using RNA interference technology, researchers hope to create an eco-friendly method to control these diseases. This could have wide-ranging impacts, including addressing issues like facial eczema in sheep, which costs our economy hundreds of millions annually. The third study looks at increasing nitrogen use efficiency through nanofertilizers. This research could lead to more sustainable dairy grazing systems, reducing environmental impacts while maintaining productivity. Each project received around $1 million in funding, demonstrating a substantial commitment to agricultural innovation.  New report reveals pathways to boost our sheepmeat industry A new Rabobank report provides a comprehensive analysis of New Zealand's sheepmeat industry, offering strategic insights for sector recovery and growth. The report, titled "Watering the green shoots in New Zealand sheepmeat," addresses recent market challenges while outlining potential avenues for industry advancement. Jen Corkran, Rabobank's senior animal proteins analyst, reports that sheepmeat export values experienced a significant decline, dropping from $12.63 per kilogram in October 2022 to $8.08 in December 2023. This downturn, combined with elevated on-farm costs, has created financial pressure for both producers and exporters. Despite these challenges, the report suggests that the industry may have reached its cyclical low point, with projections indicating potential upside from 2025 onwards. Corkran emphasises the importance of leveraging this downturn as a catalyst for strategic change to enhance future returns. The report delineates three key pathways for industry improvement: Firstly, it recommends a focus on increasing domestic consumption. Current per capita consumption in New Zealand stands at 1.95 kilograms, significantly lower than Australia's 6.4 kilograms. Expanding the domestic market could provide a more stable demand base for the industry. Secondly, the report advocates for a reassessment of export strategies. While China remains a dominant market, accounting for nearly half of New Zealand's lamb exports, the report suggests exploring diversification opportunities. Markets such as the UK, EU, and US present potential growth areas, particularly in light of recent trade agreements. The challenge lies in optimizing product allocation to maximize returns across these markets. Lastly, the report underscores the critical role of ongoing investment in research and development. This encompasses a range of initiatives, from enhancing genetic improvements for superior liveweight gains to exploring value-added products derived from various sheep carcass components. Farm conservation efforts lead to rare mudfish discovery A significant discovery has been made on a dairy farm near Timaru, highlighting how conservation and agriculture can work hand in hand. The critically threatened Kōwaro, or Canterbury Mudfish, has been found living in an irrigation spring at Craigmore Sustainables' Somerset farm. Department of Conservation (DOC) staff confirmed the presence of this endemic freshwater fish during visits in April and May. The team netted 72 mudfish, ranging from 77 to 149 millimeters in length, in what they describe as an ideal habitat with clean, clear water and dense aquatic plant growth. This discovery follows a comprehensive waterway restoration project undertaken by the farm over the past two years. The project included replacing an old diesel irrigation pump with an electric one to reduce the risk of chemical contamination, and fencing the site to keep livestock out. In addition, the farm has planted over 2,760 native plants around the water's edge, including dry woodland shrubs, trees, flax, and reed plants. This restoration effort aims to create a regenerating native bush block that will provide shade, shelter, and food for various native and endangered species. A DOC report praised the extensive riparian planting, noting the diverse range of species used. The report also highlighted the excellent water clarity and diverse aquatic plant life, both indicators of good water quality and stable hydrology. Craigmore Sustainables, which manages the Somerset farm, views this discovery as both a privilege and a serious responsibility. The company emphasises its commitment to balancing environmental respect with sustainable and profitable rural operations. See omnystudio.com/listener for privacy information.