Early Bird I Wednesday June 12th 2024

Government confirms agriculture to be removed from the Emission Trading Scheme, a record new season opening forecast for organic milk, and more money for emissions reduction research. 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! Government confirms agriculture to be removed from the Emission Trading Scheme The coalition Government has announced agriculture will be excluded from the Emissions Trading Scheme (ETS) and it will disestablish the climate change initiative He Waka Eke Noa.  Despite these changes, the Government continues to be committed to meeting climate change obligations without negatively impacting Kiwi farms. The Green Party criticised the move, accusing the Government of delaying climate action and ignoring environmental concerns.  Agriculture Minister Todd McClay announced the formation of a new Pastoral Sector Group to address biogenic methane emissions. The Government plans to change the law later this year to remove agriculture, animal processors, and fertiliser companies from the ETS by next year.  The Government intends to engage directly with levy bodies and sector organizations, including DairyNZ, Beef + Lamb New Zealand, Deer Industry New Zealand, Federated Farmers, Dairy Companies Association of New Zealand, and the Meat Industry Association. The terms of reference for the new Pastoral Sector Group will be developed in collaboration with these groups. A record new season opening forecast for organic milk Fonterra has announced a record opening forecast milk price for organic milk this season, highlighting strong sales and a positive supply and demand outlook. For the new season, which started on June 1st, the cooperative has set a price range of $9.25 to $10.75 per kilogram of milk solids (kgMS), with a midpoint of $10. Additionally, Fonterra revealed a record final organic price of $10.80 per kgMS for the recently concluded season. Fonterra is actively seeking new organic milk suppliers and will have a team at the Fonterra tent at Fieldays this week to engage with farmers and answer any questions.  Lisa Payne, the co-op's Farm Source milk supply director, says that their organics program currently includes over 100 farms and she encourages farmers interested in converting to organic farming to reach out for information and support. For the current season, Fonterra also announced an advance rate for organic milk supply. Farmers will receive an advance rate of $7.50 per kgMS for the first seven months, with an increase of 15 cents for milk supplied from January next year. The co-op recently held its Organic Farmer Conference in Taranaki, which provided an opportunity for farmers to learn more about the market, the key factors driving the milk price, and to connect with fellow farmers and the Farm Source team. More money for emissions reduction research The New Zealand Agricultural Greenhouse Gas Research Centre (NZAGRC) is receiving a significant funding boost of $50.5 million from the government. It’s part of a broader $400 million package aimed at supporting farmers and growers in reducing emissions through the development and implementation of new tools and technologies over the next four years. The additional funding will significantly enhance the NZAGRC's research capabilities, adding to the annual $15.7 million already provided by the government. Over the next five years, this combined funding will enable the NZAGRC to invest approximately $150 million in emissions reduction research. David Hughes, NZAGRC Chair, says the funding will allow for a more ambitious research program, providing farmers and growers with the necessary tools and technologies to meet customer demands and emission reduction commitments. . The new funding will support a range of initiatives, including accelerating progress in breeding low emissions cattle to create breeds with lower emissions, and developing faster and cheaper methods for identifying these animals.  Additionally, it will accelerate work on methane and nitrous oxide inhibitors with plans to transition to commercial partners within the next four years, and scale up research on a methane vaccine, aiming for proof of concept as soon as possible.  Part of the new funding will also support the NZAGRC’s 2024 Innovation Fund round, opening on Monday, which will allocate $2 million for novel research targeting significant reductions in methane and/or nitrous oxide emissions from New Zealand farms. Equipment retailers struggle in the current economy Agricultural equipment retailer Norwood is experiencing significant financial difficulties following the loss of its long-held agreement to sell New Holland products last year.  This has resulted in a 40% revenue drop and a substantial loss for the company. However, Norwood has recently signed two new distribution agreements which it believes will help recover the lost sales. The financial downturn has placed Norwood under "material uncertainty" regarding its going concern status. Despite this, the company has secured a significant bank refinancing agreement in April 2023 and remains compliant with most of its financial covenants. The agricultural sector is facing broader financial pressures, as indicated by Beef and Lamb’s recent inflation report, which noted a 2.3% increase in the cost of repairs, maintenance, and vehicles from March 2023 to March 2024. Farmers often defer spending in these areas during times of low profitability. Norwood's immediate focus is on stabilising its financial situation through the new distribution agreements and bank refinancing. The company aims to rebuild its revenue base and ensure long-term sustainability by diversifying its product offerings and capitalising on its new partnerships.  Hawkes Bay Young Grower of the Year continues family legacy Grace Fulford has been named the Hawke’s Bay Young Grower of the Year, impressing judges with her knowledge and skill in the competition held last Thursday and Friday.  The 2727-year-old from Hastings, grew up around orchards and packhouses, following a family tradition in horticulture, with both her father and uncles deeply involved in the industry. Fulford who says she was stoked with the win, works as a quality and compliance manager for the apple giant Turners and Growers Global and began her horticulture career on her family’s Omahuri Orchard, which grows a variety of fruits, including apples and cherries.  The competition saw Leander Archer from Sunfruit as the runner-up and Jesse Wall from Mr Apple securing third place. As the regional winner, Fulford will represent Hawke’s Bay in the National Young Grower of the Year final in October.  See omnystudio.com/listener for privacy information.