Early Bird I Wednesday June 26th 2024

Synlait shareholders urged to accept $130 million lifeline loan, more finances pumped into emissions reduction efforts, and farmers elect a new Dairy NZ chair. 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 shareholders urged to accept $130 million lifeline loan, Synlait Milk has scheduled a special shareholder meeting next month to seek approval for a $130 million loan from its major shareholder, Bright Dairy. The dairy company requires this loan to meet its bank debt obligations due next month. Synlait's board recommends shareholders accept the loan arrangement, highlighting the limited alternatives available. The company has not succeeded in finding a buyer for its DairyWorks business, continues to explore the potential sale of its other North Island plants, and needs to secure $180 million to repay a retail bond maturing in December. In a statement, Synlait warned that failure to arrange alternative financing could force it to cease trading or enter formal insolvency proceedings. Bright Dairy emphasised that the loan facility is part of its broader efforts to support Synlait’s return to a stronger financial and operational standing. The upcoming shareholder meeting is on July 11. More finances pumped into emissions reduction efforts The Government and the Bank of New Zealand (BNZ), is committing an additional $8 million to AgriZeroNZ to enhance efforts in reducing agricultural emissions. The overall investment in AgriZeroNZ is now projected to reach $191 million over the first four years, with half of this funding coming from the Crown. In support of the agricultural sector, the Government has allocated an additional $400 million towards emission-reducing projects under Budget 2024. This includes ongoing commitments to AgriZeroNZ, matching industry contributions, and an additional $50.5 million investment in the New Zealand Agricultural Greenhouse Gas Research Centre  over the next five years. These investments aim to advance the development of low-emission animals, methane and nitrous oxide inhibitors, and support global collaborations and research. The Government has also committed $52.5 million to early research and development investments through the Centre for Climate Action. These investments focus on genetic research, methanogen vaccine research, early life intervention studies, development of better on-farm emissions measurement tools, and effluent and feed management research. Forecasts show food and fibre sector export earnings to grow significantly Food and fibre exports from New Zealand are projected to grow to $66.6 billion by June 2028, according to the Ministry of Primary Industries' latest Situation and Outlook for primary industries report.  Ray Smith, the Ministry’s director-general, says that global trade is beginning to recover, with early indications of strengthening in China’s economy. Despite temporary dips in some sectors, he emphasised the continued strong demand for New Zealand's high-quality food and fibre. China remains New Zealand’s strongest export market across most product categories, except for arable exports, with 45% primarily going to the European Union , and processed food, with 39% going to Australia. Looking ahead to June 2025, the ministry forecasts a 6% rebound in export revenue to $58.1 billion, despite ongoing volatility and changes in the global trading landscape. In the long term, the report suggests that growing demand and constrained supply—exacerbated by more frequent and severe weather events—are likely to support price growth. Agriculture Minister Todd McClay has praised the hard work and resilience of New Zealand’s farmers, growers, fishers, foresters, and processors. He acknowledged the challenges posed by soft commodity prices, high input costs, inflation, and interest rates.  Kiwi avocado farmers could get a greater sliced of growing market demand Global avocado consumption and import demand are expected to expand further in the coming years, creating new opportunities for avocado exporters around the world, including those in New Zealand, according to a new report by agribusiness banking specialist Rabobank. In its Global Avocado Update 2024, Rabobank highlights that the United States continues to be the world's largest importer of avocados, with import demand expected to keep growing.  The report also notes growing demand for avocados in other regions around the world, leading to increased import requirements. Untapped opportunities exist in various South American countries to increase avocado consumption in the coming seasons. In Asia, most countries have achieved double-digit compound annual growth rates for avocado imports over the last decade and Europe has also seen a rise in avocado imports in recent years, with this growth trend expected to continue.  Rabobank expects avocado exports to exceed the three million metric ton milestone as early as 2025. The report indicates more favorable weather conditions for the upcoming season, though margin pressure has impacted orchard maintenance, which could affect the rebound in production. Looking longer term, significant growth in plantings is expected, with industry forecasts suggesting production could rise as high as 75,000 metric tons by 2031. Farmers elect a new Dairy NZ chair Tracy Brown has been selected as the chair-elect of DairyNZ, set to take over after Jim van der Poel steps down at the organisation’s annual meeting in October.  Van der Poel has led DairyNZ as chair for seven years, guiding it through a new strategic direction. His tenure included service as a farmer-elected director on the inaugural board from 2007 to 2009 and again from 2013. He was also on the foundation board of DairyNZ’s predecessor, Dexcel, from 2000 and became its chair in 2003. Jacqueline Rowarth, the deputy chair, will also step down, creating two new positions for farmer-elected directors on the board. Rowarth, who has served DairyNZ for six years, was instrumental in establishing an independent science advisory panel to provide expert research advice.  Both Van der Poel and Rowarth will remain in their roles until the annual general meeting on October 22, when Brown will officially become DairyNZ chair.  See omnystudio.com/listener for privacy information.