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Kellogg RT

Boardroom to break-fence: pursuing a rural professional career while concurrently having a farming business interest.

Executive Summary

The New Zealand primary industry is facing significant change, in particular, pressures around environment, finance, biosecurity and changes to consumer behaviour. The leadership and skills of our rural professionals will be a key component to the success of our primary industry in this changing and challenging environment.

For agribusiness organisations to remain relevant and equipped to navigate the changes within the primary industry, it will be crucial for them to have the right people with the right skill sets. For many years rural professionals in New Zealand have been successfully providing a valuable service to the primary industry, however with the fast pace of change there is a need to have rural professionals who have a deeper connection to farming.

The model of having a rural professional career alongside a farming career is a potential solution to ensuring agribusiness organisations and the primary industry has the necessary skills and leadership in its people. This model helps to generate relevant rural professionals who have a depth of connection to farming that allows them to empathise with the challenges that producers and the wider industry face as they understand the what it takes to run a farming business. If agribusiness organisations and rural professionals lose this depth of connection to farming, we have a risk of becoming irrelevant.

Both the primary industry and agribusiness organisations need to develop their thinking on how we progress the model of having rural professionals pursuing an agribusiness career alongside a farming career, and similarly we need to encourage rural professionals to think about the opportunities and challenges this could create. From my research into the topic, it was clear that whilst there was no shortage of opinion, there was a lack of formal strategy around how this model could or should be working among agribusiness organisations, rural professionals and industry leaders.

This report addresses the question of ‘what would it take to pursue a rural professional career concurrently with a career in farming?’ It takes on the perspectives of a rural professional and agribusiness organisation. The research sets out to answer this question through a better understanding of the following key area’s;

  • Understanding rural professionals and what drives them
  • Understanding the need for a ‘balanced’ approach to this model
  • Understanding potential employment and farming structures
  • Understanding of the financial viability of the model
  • Understanding of the people capability and leadership benefits of the model

My aim for this report is that it will be used by rural professionals, agribusiness organisations and the primary industry to inspire further discussion and development on the topic for the purpose of looking at new ways to create opportunities for the benefit of all stakeholders.

The methodology used for this research report included an exploratory literature review followed by a qualitative approach using semi-structured interviews of key stakeholders.

The outcome of the research is made up of five key themes; values; balance; structures; financial viability; people capability and leadership. There are a large number of variables within such a model which at their heart are quite detailed and complex, some of which are discussed within the report, but many of which are unique to the individual situation and require more in-depth analysis.

From this research, my recommendations include:

  • Rural professionals and agribusiness organisations should take the time to understand their personal values, family values and organisational values. This will help them gain a deeper understanding about what really matters to them. They should communicate these and create some alignment between one another, ensuring they ‘tap’ into these on a regular basis.
  • Rural professionals should put in place well considered, realistic and measurable goals in all key areas to ensure they keep an overall balanced approach.
  • Rural professionals and agribusiness organisations should share stories and real-life examples of where this model has been implemented in the past or current including success and failures.
  • Rural professionals and agribusiness organisations should practice open and honest communication on a regular basis to ensure all stakeholders are clear on their responsibilities in the relationship.
  • Farm business structures and farm systems should be chosen carefully. The decision-making process should involve family a number of third parties including a bank manager, other farmers, farm consultants etc. Financial viability, family and workload management should be key considerations.
  • Agribusiness organisations should take the time to understand the issues that could arise if the depth of farming connection within its rural processionals is lost slowly over coming years
  • Agribusiness organisations should take next steps to develop a formal strategy to support the model. This should be a balanced approach involving all stakeholders in the organisation and management should be able to discuss the strategy with confidence.

As the primary industry faces a changing future, there is a need to build people capability and relevant industry leadership. This model offers a unique opportunity for innovative personal and professional development, relevant skill sets and wealth creation. Rural professionals, agribusiness organisations, and other key stakeholders have a responsibility in ensuring the primary industry can thrive in a changing and challenging environment and help future generations prosper.

Improving our on-farm Health and Safety Culture in Rural New Zealand.

Executive Summary

New Zealand as a country has a proud farming history with our farming culture having been built on a can do, ‘she’ll be right’ mindset. However, this same culture is killing our people. On a per capita basis New Zealand has some of the highest statistics in workplace fatalities with agriculture being the worst performing sector. This paper seeks to define culture in the health and safety context, and to understand where our current cultural level is on-farm in Rural New Zealand. It also seeks to understand where we should prioritise to improve this culture.

A review of the literature was completed, along with discussions with many of the key authors to develop a deeper understanding of their research. Additional research was also undertaken in the form of a survey completed by twenty New Zealand Young Farmers member’s nationwide.

This paper explores the definition of culture including work from Edgar Schein, George Stevenson and Jess Berentson-Shaw. This paper establishes that culture involves multiple people, is based on assumptions to solve problems, and is learned and shared. Through the literature review this paper found our culture is risk tolerant and as a nation we have negative perceptions towards health and safety largely because of the associated compliance. This was validated through this paper’s survey. However, it was found that compliance can have a positive impact on change. Recent work completed by Francois Barton and Gareth Chaplin suggest that culturally there are positive signals coming from the introduction of the Health and Safety at Work Act 2015. This was again validated in the survey as well as the fact that survey participants felt we are making progress. Al McCone suggested that health and safety was legislated because it’s important, and it’s not important just because it’s legislated.  

The following recommendations are made, based on the findings within the report: 

  • Change our ‘she’ll be right’ mentality to one of ‘do it right’
  • Provide education to individuals on farm to drive ownership and accountability within the health and safety space.
  • Promote the positive health and safety messages within the industry.
  • Offer appropriate incentives to help drive a positive culture change.

Key factors in developing a culture of high performance within a senior management team in large scale dairy organisations.

Executive Summary

The research in this report was based on four organisations with a structured interview designed to identify the key features of the culture of each organisation. The organisations were chosen as they represented different forms of ownership, state ownership, investment company, family owned business and corporate farming enterprise.

The key findings from the interviews were as follows

  • All organisations had a vision, strategy and values statements which is critical in defining the Why, What and How of the organisation.
  • Senior management team were structured in a way that each member had a distinct role in the business and responsibility. The goal was not to overload the operational team but to allow them to focus on coaching and mentoring the team.
  • A critical component of the senior team is their ability to use coaching and mentoring to build a relationship with their team and give and receive feedback from staff. It is important that the team members are engaged in the process and have clear exceptions and take ownership, responsibility and accountability for their roles. These are key components of above the line thinking and building a strong team culture.
  • Models such as Empowerment Model, Coach Approach, Clifton Strength Finder, Tuckman’s Model, Jim Collins Good to Great Model were used for coaching and feedback.
  • Excellence was recognised by all organisations with a focus on recognition and celebrating success.
  • Poor performance involved feedback focused on expectations and values of the organisation. The Performance Matrix is a tool which can be used in feedback process.
  • When building a team culture, relationships, trust, values are important and that individuals are accountable for their behaviour and aligned to organisational values.

Developing a culture of high performing management team is a deliberate process that requires a focus on continuous improvement and building strong team values.

 

Woodflows of the eastern southern North Island: 2019-2028

Executive Summary

The catch phrase “Wall of Wood” is approaching reality with the substantial increase of afforestation in the mid-1990s coming to maturity and ready for harvest in the coming years. The Eastern Southern North Island (ESNI) was no exception in this new afforestation with the reported area of plantation forestry more than tripling from 20,500ha in 1993 to 66,500ha by 2003.

This report sets out to determine what the status is of the current forestry and woodproducts infrastructure of the ESNI. Then to ascertain whether this capacity is sufficient to meet the growing needs of the future radiata pine resource. 

A survey was compiled to obtain the harvesting capacity of the forestry companies within the ESNI region. They were asked to provide their current daily harvesting capacity and forecast their harvest volumes over the next 10-year period. 

The domestic mills and log cartage companies were also questioned regarding their capacities. 

The yield volume was calculated using the 2018 National Exotic Forest Description (NEFD) for the area of radiata pine plantations and overlaid with the MPI yield tables from 2015 for the ESNI. The minimum target age for harvest was set at 28.  A total yield volume was calculated for all radiata pine plantations that reach the age of 28 within the period of 2019-2028. The area of plantations that made up the yield volume was evenly spread over the 10 year period to make a non-declining yield based on the fixed average annual area of harvest. 

The forestry companies harvesting capacity sits at 1.97 million m3 and is forecast to increase to 2.25 million m3 in the next 3 years. The analysis concluded that these forecast volumes are the more accurate figures to use in forecasting the woodflow for the region. Though these volumes are less than the calculated yield the forestry companies can be confident that there is enough volume to meet their planned harvesting capacity. The forecast volumes can now be used by the log cartage companies and export traders to help forecast their capacity requirements.

The analysis concluded that there are insufficient markets for domestic pulp that give a positive return. The industry has to make the decision whether to remove this pulp from harvesting sites at a cost or find an alternative market for this product.

Further analysis is required to determine the absolute limit of the annual capacity at the Napier and Wellington ports. Both ports have noted record annual throughput of logs but how much further can they go?

The analysis has shown that there are potential errors in the total area documented in the NEFD. This is predominately around the modelling and recording of the small scale forest areas. Remote sensing has had proof of concept confirmed in identifying small scale forests. As technology improves this should be a vital tool to use for the NEFD data collection.

Supporting environmental sustainability in the red meat sector

Executive Summary

With the New Zealand economy dependent on primary industries and export, New Zealanders concerned about the state of our natural environment, the ever-increasing focus on climate change, global consumers’ changing expectations and disruptive technologies challenging our existing systems and processes; significant questions for the primary industries rise.

Are our land-based farm systems fit for purpose and do our practices have a sustainable future? How can we create economic value without destroying what we value environmentally?

The primary industries are under a lot of pressure to address managing the environment and the recently proposed Fresh water package raises the discussion on how our farmers can adapt their systems to do so. So how are we, as an industry, supporting them?

The aim of this project was to investigate what support the red meat industry offers its farmers  while they are working towards achieving environmental sustainability for their farm businesses.

The method used to complete this project was a combination of literature review, data collection and qualitative research. Thematic analysis was used to bring the collected data together. It provided a framework and identified 3 main themes:

  • CULTURe
    The why: industry leadership and why would farmers change what they are doing?
  • CLARITY
    The what: what do the farmers need to do and what is in it for them?
  • CAPABILITY
    The how: now the farmers knows what they need to do, how can they do it?

The main outcomes from the investigation are as follows:

  • To achieve environmental sustainability, we also need to maintain social and economic sustainability
  • Change of behavior is required
  • Farmers have different drivers than rural professionals
  • There is a lack of leadership and collaboration
  • There is a disconnect between policy makers and the service industry, mainly coming from a lack of farm systems knowledge
  • The biggest challenge goes to regulation and capability of the sector

The biggest opportunity in achieving environmental sustainability lies in the how part but support for the farmer is often the most limiting step. Hence building farmers’ and rural professionals’ capability and therefore their confidence is key.

Key recommendations as a result from this project are as follows:

  • Strive for clear regulation
  • Set SMART goals
  • Design a framework for pathways to environmental sustainability
  • Communicate actionable knowledge
  • Create engagement, commitment and collaboration in stakeholders
  • Follow up on completion and success
  • Ensure repeatability for each step of the process

Leadership that supports collaboration between farmers, scientists, industry professionals and organisations is going to be critical.  The sector needs to have a structured approach, with systems and processes in place.

First, Catch Your Crayfish – Linking New Zealand Food Producers and Consumers for everyone’s benefit.

Executive Summary

New Zealand produces enough premium quality, safe food to feed approximately 40 million people (McCready, Tim. July 19th 2018).  It could safely be assumed then that accessing such amazing quality food in the region or even country of production would be an easy ask.  This is not always the case. Currently New Zealand’s economy is heavily based around food and produce exports.

In a time when food quality and safety is top of mind for purchasers it would make sense to give local New Zealand residents ready access to the best and freshest of what we produce.

Top New Zealand chefs are beginning to search for and cook with premium quality locally produced and foraged produce but are finding it extremely hard to source a consistent supply.  They are looking for premium local produce with a verifiable story to tell their customers. 

To allow consumers and food service kitchens access to our best and freshest produce, New Zealand needs a system which links producer and customer with premium produce via short, profitable supply chains.

This report aims to answer the question “Does the formation of a sales platform linking food producers and consumers in New Zealand have merit?” 

Shorter supply chains and closer linkage between producer and consumer will allow more communication, in-depth understanding and the formation of relationships to benefit all parties. 

I recommend an industry good organisation undertakes an in-depth survey of New Zealand food producers asking about their potential utilisation of such a sales platform.  Utilising these results, I recommend that group also facilitates the creation of a platform which is locally based with the minimal amount of administrative and financial setup requirements as possible. 

I recommend that price remains an important consideration for participating producers, the value of the provenance and production story must be matched with affordability for consumers.

A Classroom View of New Zealand’s Primary Industry

Executive Summary

We certainly can’t argue with the fact that New Zealand has recognised the issues around the future of the Primary Industries workforce. We read about it every day, we have data to prove it and a sector constantly talking about it. Initiatives throughout the country have been set up to try and combat the issue but do we need a more central collaborative solution to the problem?

“Education is the most powerful weapon which you can use to change the world”
 Nelson Mandela

With our Primary Industry requiring 50,000 additional skilled workers by 2025 and the world having 10 billion mouths to feed by 2050. The importance of education and skills has never been greater. For many years in New Zealand, Agriculture Education and Training has been a significant topic of discussion. Our future primary sector sits  with  the  young  New Zealander’s of today. Generating passion and knowledge early will be a powerful weapon of use in the industry.

The aim of this report is to better understand how students make decisions around career choice and to evaluate the impact that an NCEA Agribusiness study programme in New Zealand has had for the Primary Industries.

The method used for this study is a qualitative and thematic analysis on the current situation, the history and the issues that we are faced with around Agricultural Education in New Zealand. Thematic analysis allows identification of different perspectives around the issue and helps to recognize some possible outcomes. Interviews with Kerry Allen, Agribusiness Project Curriculum Director and Mel Simmons, Agribusiness Advisor were used to gain insight into a newly developed NCEA Agribusiness programme which describes the key challenges as being:

  • Perception of the Primary Industries
  • Student Attraction
  • Teacher Education & Support
  • Assessment levels
  • Cross Sector Support

With the industry undergoing rapid change and innovation the ability for people to keep up is challenged. The resources and support within our education sector appear to be coming up short. The complexity around education required is quite significant.

When we look at the numbers it is alarming to see where our future knowledge is coming from, what the future of our industry looks like and the pressures we are going to be placing on the people we leave behind to produce off our land and provide science based research and advice. Key recommendations as a result of this research are as follows:

  • Offering of Scholarships for career changes to encourage teachers to train in the Agribusiness
  • Generate appeal for Primary Industry workers to cross over into education to influence the next generation
  • Ensure the promotion of job variety and prosperity within the primary industry is far reaching e.g. students, teachers and parents
  • Ability for universities to be able to train teachers in the Agribusiness subject
  • Explore the option of being able to integrate throughout the main subjects of the NZ curriculum.
  • Create strong collaborative working links between the Ministry of Primary Industries and the Ministry of Education

Recognising the primary sector workforce issues isn’t the hard part but coming up with successful solutions is. The ability to help alleviate challenges continually faced by initiatives like the Agribusiness programme lies within the industry and could be the key that unlocks the door.

ONLINE LIVESTOCK AUCTIONS: Australian success, and the potential for New Zealand

Executive Summary

This paper provides a background of the Australian Livestock industry with a specific focus on the rise of an online auctions platform, AuctionsPlus (www.auctionsplus.com.au).

My findings show that the use of AuctionsPlus can deliver verifiable economic and social benefits to its users.

During a research trip throughout Australia’s rural New South Wales and Victoria I spoke with Farmers, Feedlot operators, Stock Agents, Transport operators, Saleyard managers and Meat buyers about industry dynamics from their unique perspectives. The focus of these discussions was to understand how AuctionsPlus integrated into their business, where the platform worked best for them and where it didn’t.

I’ve then considered the relevance of all these factors in the New Zealand context to understand the potential benefits for our own industry.

AuctionsPlus is neither a fundamentally new method of transacting livestock nor a disruptive technology. It does however harness favourable attributes of traditional sales methods and combine them on a single, highly efficient internet marketplace where vendors, agents and buyers can participate without the need to come together physically.

I’ve found that tangible economic advantages alone are not enough to drive adoption, and that the social benefits of improved animal welfare and bio-security outcomes can drive adoption even in the absence of any direct financial advantage. Also, stock agents and farmers

are more likely to support the platform when existing relationships can be maintained.

The real key to long-term success is the establishment of underlying trust in the platform and its users.

At the time of writing New Zealand does not have a comparable sales method and questions remain as to whether the New Zealand market has the scale to support this business model, or what level of market penetration will be needed to support a sustainable business. At least two companies are looking to fill this market opportunity and my recommendations will give those in this relatively new field a grounding in the lessons learned during AuctionsPlus’s journey to success. I believe this success can be replicated in New Zealand for the good of all industry stakeholders.

The most important recommendation I make is that to initially gain traction, a successful online platform will need to have the full support of Stock Agents. While this is an electronic marketplace; people are at its core.

An industrial analysis of dairy processors in New Zealand

Execute Summary

After 18 years of DIRA legislation, Fonterra has gone from being an almost monopolistic company within New Zealand’s dairy processing industry, to being involved in a very competitive market place with the introduction of some major competitors in the shape of Open Country Dairy and Synlait to name a couple. This report shows how each company differentiates themselves from each other in an industry where the base product is exactly the same; milk. This differentiation of final products allows competition to be established in overseas markets for each of the companies. This competition within New Zealand for a stable or reducing milk pool, has created an increase in returns for farmer suppliers; without the threat of new entrants into its processing space, Fonterra would not be as strong as it currently is. Fonterra’s strategies have been shaped around delivering the best return possible for its farmer suppliers, to ensure that they are not tempted to supply another processor, and to deal with the restrictions the DIRA has created around Fonterra.

This report gives insights into how each processor performs in comparison to one another, how each processors strategy of processing its products results in different revenue per kgMS, and how this revenue is distributed, either to farmer shareholders or to private shareholders. The report should also highlight the amount of competitors within New Zealand’s dairy processors that are foreign owned.

Recommendations: 

  • Fortify: Revitalized and continued support of Fonterra as a market leader; Fonterra is the market leader, not purely due to market share, but mostly by transparency allowing it to openly show everyone how it operates and sets its milk price and share price, by flying the “NZ Inc” flag and doing a lot of industry work on its own accord, while by default, taking other processors along for the ride. The Fonterra Co-Operative is the reason the dairy industry in New Zealand is so strong, this needs to be remembered and revered by all farmer suppliers.
  • Future proof: Farmer suppliers need to look beyond their own balance books to determine if a change in processor is actually beneficial in the long term. Does your new milk processor have any obligation to keep paying you a good farm gate milk price if Fonterra or DIRA are out of the picture; who is your new or potential processor working for, you or its shareholders?
  • Deregulate: DIRA legislation needs to be removed, and quickly. The initial aim of consumer protectionism is no longer required, as there are now enough processors within New Zealand for this to be controlled by market forces; which was part of the initial idea of DIRA. DIRA is also hindering Fonterra’s ability to be able to make strategic decisions with its supplier base and all of its processing sites; not being able to accuratly predict milk supply in the future accurately, hinders investment strategy and direction. Having the ability to control entry and exit of suppliers, along with the abolishment of the regulated milk supply to competitor’s legislation, will allow more certainty around investments into processing capabilities; which means more product to process and add value to, and more money into New Zealand’s economy and not into Foreign owned companies.
  • Compromise: Determine what amount of market share is optimum for each of New Zealand’s dairy processors so that New Zealand’s export margins are optimized for New Zealand’s benefit. This should include some competition within New Zealand, such as Synlait, so that Fonterra has some competition to constantly benchmark itself against, but not so much that buyers in foreign markets have the ability to bargain with exporters of New Zealand products.

 

Adding value to Onions

Executive Summary

This paper is aiming to add value to second grade onions that unable to be sold locally or exported. The aim was to understand what could be done with them to make them more saleable in the market place here and overseas.

It is very early on looking into the process of adding value to second grade onion, by freeze drying or dehydration. While freeze drying has been the obvious first choice due to the lack of nutrition loss during the process and longer shelf life. The cost of investment is high for freeze drying which results in a high cost product to sell into the market place.

While looking into the adding value to second grade onions by freeze drying, the following areas were researched:

  • Difference between Freeze drying and Dehydrating,
  • Understand the freeze drying process,
  • Advantages and Disadvantages of Freeze Drying,
  • Financial analysis of freeze drying costs,

The paper recommends that this is looked into further as from what I have obtained this is a viable business. Margins are not overly high while contracting freeze drying, but once business is established and is it is feasible to purchase a Cuddon Freeze Dryer the margins would increase substantial.