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kellogg 2016

Balance: Successfully managing concurrent on and off-farm roles.

Executive summary

New Zealand’s increasing property prices, corporatisation of farming, improved communication and transportation infrastructure, coupled with continuously improving farm practice and rapid disruptive technological innovation, creates both increased need and opportunity for rural families to engage in on- and off-farm work concurrently. Modern work enabled by the aforementioned advancements, particularly the rate of digital technology change, is becoming increasingly accessible around the clock, which results in a progressively blurred line between work life and home life, with the concept of a work life balance under significant challenge. 

This challenge is exacerbated when farming households are engaged in pluriactivity. Pluriactivity is the situation when family members invest time off-farm, which is not a temporary situation responding to changed circumstance or shock, but rather a permanent and accepted feature of farming societies globally, that is driven by a range of diverse factors, including household, farm and spatial drivers.

The methodology employed for this research was a combination of semi-structured interviews and a detailed literature review. All interview participants were involved in both on- and off-farm work concurrently, and had professional or highly skilled off-farm employment. With the exception of one respondent, interviewees were farming sheep or beef, or grazing dairy stock, and all participants took an active/hands – on role in the farm business.

The literature research showed a strong theme that “work life balance is bunk,” and that those engaged in on- and off-farm work concurrently should rather seek “work life harmony.” Harmony was preferred on the basis that it does not create the same inherent sense of trade-offs or the over-prioritising of work in comparison to ‘life.’ Harmony was seen as a better construct to break down the element of “life” into categories of family, community and self. Taking a more granular approach to life allowed individuals to bring together a number of elements in a be spoke manner to achieve success. Respondents conveyed that work life harmony had a temporal component, i.e. the importance of work and life (self, community and family) would change over time.

The research identified that to achieve work life harmony there are three key success factors and one key change in mental state that can facilitate success, they are as follows:

1. Communication and the importance of family

A success factor identified in the research was that of placing importance on relationships with loved ones when working both on- and off-farm concurrently. A consistent, although reluctant, interview response was “happy wife is a happy life” and that you can’t participate in pluriactivity alone. Family team work was supported by a focus on communication, with application of a ‘business communication’ rather than ‘family communication’ for managing multiple work interests being key to success. Family communication involved conversations about the farm business being a planned and deliberate action, rather than an “over the fence” or “over breakfast” conversation. The need for “doing the business” was contrasted by a requirement to know when to “box off” the various work components, so as to prevent either the family farming business or the off-farm work becoming an encroachment on the important business of family.

2. Visioning: know the end for a number of games

The importance of having a documented vision was another success factor to emerge from the research, and was a key contributor to the achievement of better work life harmony. Further, documenting the vision resulted in individuals having a clearer focus on what was important and what the end point looked like, while providing the ability to monitor progress towards time-bound, regularly reviewed goals.

It was also clearly identified that for a vision to result in increased work life harmony the goals needed to be as strategic and all-encompassing as possible, with visioning not limited to the farm business, corporate career or family goals individually, but broader in considering either the “Five F’s: family, fitness, farm, finance, fun” or Freidman’s ‘Four Circles’ of work, family, community and self. The focus of any vision needs to be strategic with a range of operational planning documents, such as 1 year and 5 year farm plans and personal development plans sitting beneath a holistic and all-encompassing vision that establishes the basis, or ‘the why’, upon which to make important decisions.

 3. Simplified systems, technology and creativity

A final success factor that came through consistently was deliberate simplification of on-farm systems, through either altering stocking rates, changing stock class or outsourcing tasks. In all situations the aim was to make the on-farm work easier given significant time pressures, and the additional income coming from the off-farm activity reducing the absolute need to be achieving maximum farm efficiency. While all respondents were very busy and often managed systems to reduce the number of mundane tasks, the research and literature suggested that they should not be eliminated altogether, particularly when engaged in pluriactivity, with simple monotonous tasks often being the time “eureka” moments occur, so the value of “tractor time” for creative or entrepreneurial thinking should not be under-estimated.

Building upon these three success factors, a key change in mental state was identified with a focus on “being” rather than “doing” key for those successful in pluriactivity. To embrace these states of being there is a requirement to take on the following:

  • Be deliberate: prioritise family as a non-negotiable time commitment – make this component equivalent to your most important appointment in the other spheres of your life.
  • Be pragmatic – simplify your farm system to make it work for your individual situation
  • Be holistic and strategic: develop a vision, include four circle granularity  Be an individual
  • Be present: avoid multi-tasking – aim for integration but restrict multi-tasking to where it does not affect the primary task.
  • Be realistic, be mindful – understand that you cannot achieve all of your life goals at once, there will be a requirement for some priorities to be fulfilled sequentially rather than concurrently
  • Be a ‘geek’ – embrace technology as appropriate to make your life more harmonious

Phil Weir

Improving communication of primary industries research, science, technology and innovation.

Executive summary

By the year 2020, over $1.6 billion of New Zealand taxpayer money will be invested in science and innovation per annum. What share will Primary Industries have of this investment? 

“With the coming of the fourth industrial revolution – fundamental change to our daily personal and professional lives from the combination of physical, digital and biological technologies – the primary sector will find itself at the center of change.”

Ian Proudfoot, Global Head of Agribusiness, KPMG 2016

The aim of this project was to understand what the benefits might be of improving communication of government – funded Research, Science, Technology and Innovation related to the New Zealand Primary Industries and how this could be achieved. stakeholders from a wide range of areas in the science and innovation ecosystem were interviewed and fin dings were related to literature and initiatives already underway in New Zealand. Benefits of improving communication include:

  • Attracting science and innovation talent to the primary industries and building future capability.
  • Positive engagement with the public ensuring social licence to operate.
  • Building New Zealand’s international reputation as an innovative country – to attract skilled migrants, build partnerships with global experts, and be seen as a trusted producer of safe, premium food and fibre products
  • Improved cross-sector collaboration and learning.
  • Faster and more advanced innovation in industry from research, science and technology uptake To achieve sustainable growth in New Zealand Primary Industries, attracting and retaining a diversity of talented people is critical.

Recommendations from this report for key stakeholder groups include:

Government:

  • Improve the New Zealand Story Business Toolkit information on science and innovation.
  • Government funding agencies could publicise their science and innovation investments more.
  • Include a section on the quality of the communication plan in assessment criteria for government. science funding

Research Organisations:

  • National Science Challenges could increase their focus on engaging school children in science and innovation (and the government could incentivise or reward them for doing this)
  • Universities and Crown Research Institutes could include positive public engagement in their promotion criteria for staff (likely if the government funding criteria changes).

Primary Industries:

  • Industry associations or businesses could develop more graduate programmes with a science and innovation focus to create career pathways for attracting talented young people.
  • Businesses could sponsor employees and their research providers to visit schools to talk about science and innovation being invested in and the future career opportunities in their sector.
  • Industry could investigate how to collaborate on opportunities of the fourth industrial revolution.

Kylie Phillips

Farm business strategic planning: A sheep and beef perspective

Executive summary

Farming livestock in New Zealand is becoming increasingly exposed to global and national economic, social, environmental and regulatory trends. Going forward there is increasing pressure from the public and consumers to preserve or ideally improve soil health, water quality and biodiversity, while ensuring that the food we produce is safe and nutritious, animals are treated ethically, and we are reducing their greenhouse gas emissions. Pressure is building towards significant change from the current situation. Sheep and beef farming is not immune to this pressure. 

What will sheep and beef farming look like in 2050; what are the challenges and opportunities farm businesses and communities will face between then and now?

As a farming business, we need to look at where our farming operation is now and make some decisions about where we would like it to be in the future. We need to lift our level of awareness and contemplate how our farm might operate – what it might produce – we need a whole farm business strategy.

There needs to be a definitive “picture” and agreement of how the business owners view success. We then need look at how we best optimise the resources – land, people, animals and infrastructure to achieve that success.

Having a clearly defined business strategy acts like a road map in times of challenge and is an important tool for any business to navigate their way.

This research sets out to define what is strategy, it looks at a snapshot of how strategy or long-term planning is performed in sheep and beef farming businesses today. It makes suggestions as to the key components of strategic planning and proposes a basic template for businesses considering their long-term future.

The motivation to undertake this research assumes that better awareness of the future, and planning for the future is a positive action that will better enable individuals, communities and the wider farming industry to respond to change proactively. It will allow us to seize opportunities that may otherwise have been missed and to sense and manage threats in a more timely fashion.

One of the benefits of strategic planning is a shift in mindset away from issue-specific discussions towards more holistic and long-term planning around the future of farming. With increased awareness and longer term thinking I believe that our industry can evolve and thrive under the care of future generations.

Anna Nelson

What does it take to be a Great Employer in 2016.

Executive summary

The motivation to research what it takes to be a great employer in 2016? stems from the author’s 10-year involvement in the kiwifruit post-harvest sector and an acknowledgment that a number of forces both globally and within the kiwifruit industry have reshaped the employment landscape during this time. The author’s opinion is that the kiwifruit post-harvest sector has experienced a human capability deficit in recent years which has put increasing pressures on current middle and senior managers. While at the same time there has been a shift in employee preferences at a global level. 

This report aims at validating the author’s anecdotal views through a globally focussed literature review and a set of semi-structured interviews of middle and senior managers in the kiwifruit post- harvest sector. Interviewees were asked to define what a great employer looks like, what motivates them and what the greatest challenges to employers within the sector are in becoming a ‘great employer.’

A key finding from the literature review was that technology and generational preferences are having a significant impact on the employer/employee relationship. The literature review was completed using a framework from the NZ Human Rights Commission ‘7 Key Elements of a Good Employer’ and adapted to being more ‘current’ based on findings. The literature review found that employees are increasingly looking to their employer to build their “personal brand”, develop a strong personal relationship with them, offer values and goals alignment, provide them with purpose and consider their wellbeing both physically and mentally through offering flexible conditions and encouraging work-life balance.

At the kiwifruit post-harvest sector level, rapid volume growth, increasing competition among post- harvest operators and increasing sophistication and complexity brought about by the industry’s strong customer focus have contributed to changing the landscape. Managers interviewed indicated that this has placed increased pressures on them. While seasonality has always been a challenge for the industry, the nature of seasonality appears to have changed. Historically, permanent staff were offered a “Work Hard, Play Hard” role where it was well accepted that long hours during a defined period over the harvest and packing season were counter-balanced by flexible work hours over the summer period of lower activity.

The outcome has been that there is a mismatch between findings of the literature review and trends within the post-harvest sector. Employees are looking for greater flexibility in their roles, improved work-life balance and enhanced wellbeing. However, longer work hours and greater stress have been a feature of work within the kiwifruit post-harvest sectors of recent years.

Managers interviewed highlighted the risk the sector faces if the industry is not able to attract talented individuals to the sector via a strong employment brand that is underpinned by more normal work hours and the other desirable features identified through this research as presented in Figure 10.
This report aims to identify what it takes to be a great employer in 2016? And identify what challenges the kiwifruit post-harvest sector faces in becoming a great employer.

Anthony Pangborn

What makes a strong rural community.

Executive summary

The aim of this research was to explore ways to strengthen rural communities in New Zealand. The research focuses on the three small rural communities of Kimbolton, Apiti and Rangiwahia, all located in the northern Manawatu. 

Six households were chosen from each community and invited to participate in the project. The participants were given a survey and interviewed in their homes. The survey questions covered the following things: participants’ understanding of a sense of community, rural change, community facilities and social groups, community involvement, understanding of community governance, and access to technology.

Alongside the interviews, a literature review has been done. This explores the importance of community, the concept of social capital and examines research done into communities facing change in relation to a changing rural environment.

In interviewing the participants, it was evident that community meant more than a physical or geographical location or connection. Everyone involved in the interviews talked about relationships and connections, and supporting community members, i.e. social capital.

Participants were asked to score their own community on a scale from 0 = no sense of community, to 5 = strong sense of community. The scores ranged from 1-4, with the majority sitting around 3. The desire for a strong sense of community was expressed and participants were keen to discuss what could be done to improve this.

It was evident in discussions on community governance, that all communities needed to have a more visible community vision and strategic direction. The foundation for this has been provided by work done on community planning with the Manawatu District Council. The drive now needs to come from within each community.

Participants were asked about rural change over the last ten years, and its effect on individuals and on the community. Relative newcomers to the communities talked about recent changes, while well-established members went back over 40 years to discuss the effects of dramatic change.

The importance of good infrastructure was evident. Good roads, access to fast, affordable internet and reliable cell phone coverage were all deemed essential to the communities’ wellbeing and development. For example, the recent sealing of a country road has made travel easier for residents and has also opened the area for tourist exploration.

All participants were heavily dependent on technology for social interaction, information and research, i.e. Google, business interactions and the ability to access technology for use on farms etc. Several participants talked about access to fast internet being vital in promoting the area to both a domestic and international audience. Several participants felt limited by expensive, and still unreliable, internet in the area.
Cell phone coverage remains a problem in places, particularly out on farms. Safety and ability to communicate for business needs were listed as high concerns.

The smallest community, Rangiwahia, appeared to have the highest social capital and community engagement. This is perhaps because counter-urbanisation is minimal and the community is still predominantly made up of farming families. There are very few lifestyle blocks and minimal urban influence. However, this is a community that is forward thinking, action based, and innovative with a high level of social capital.

The communities with the least cohesion had many transient farm staff and several people looking for very affordable housing and an alternative lifestyle.

The challenge here lies with successfully integrating non-rural community members into a traditional farming community. It is evident that larger communities face perhaps the most complex challenge with diverse individual and community needs.
The conclusion drawn from the research and literature review is that building strong social capital is necessary for a strong sense of community and sense of belonging.

This report concludes with four broad recommendations for actions that can be taken to support and strengthen New Zealand’s rural communities.

These are:

  1. Create Conscious Community – build social capital
  2. Build Quality Leadership – support, train and encourage
  3. Encourage Collaboration – with other local communities
  4. Community Development – social, economic and environmental

The challenge to our modern day rural communities is to embrace change and to continue to evolve. This is required to meet the needs of the 21st Century rural community. For this to be possible, communities need strong leadership, an inclusive and engaged community and the ability to think outside the box.

Katherine Gillespie

What is the most profitable way to harvest asparagus in New Zealand.

Executive summary

As a relatively new asparagus grower, in the Waikato region of New Zealand, I am interested in exploring opportunities within this industry. The harvesting costs in an asparagus business are a significant portion of the total expenditure, so any efficiency gains would provide a direct contribution to profitability. 

There are currently several different methods for harvesting asparagus, all of which involve manual picking of the spears. This project looked at which of the current methods was the most profitable for the New Zealand asparagus industry. Variations include paying staff a ‘per hour’ rate, a ‘per kg’ rate, or combinations of both. Picking methods vary from individuals walking along a row in their own time, harvesting into a bin or container carried on their person; to a team of pickers walking behind a tractor with a 20 metre boom, loaded with crates that they place the spears into as they pick.

The highly manual nature of the harvesting raised the question of what automation options have been considered or attempted in the past, as well as what the potential for this may be in the future.

The interviews held with existing asparagus growers provided a wealth of information regarding the picking process, as well as the potential for automation. The lowest cost system currently in use amongst the interviewees involves paying the pickers $0.87/kg through the entire season. The next lowest cost involved paying pickers a ‘per kg’ rate that varied from $0.85/kg at the start of the season, through to $1.20/kg at the end of the season when volumes were lower. The most costly system paid the pickers $18.00/hr, plus a $0.20/kg bonus for all ‘Class One’ graded asparagus. These costs were adjusted to reflect the wastage through the grading process, and therefore provide a more accurate actual cost per kilogram of saleable product. The results then saw the lowest net cost at $1.31/kg.

Although this assessment clearly showed the lowest cost, the determination of their relative profitability from a long term perspective was much more subjective. This was because each business had a number of unique considerations to incorporate into their decision making process around harvesting costs, for example the age and productivity of a block, access to labour and the typical profile of the labourers. The interviewee’s perspective on the potential for automation was explored and their opinions varied widely, from highly unlikely to occur, to highly likely to occur.

The potential for further study regarding innovative harvesting techniques, by incorporating automation, is significant. The challenge will be in balancing the needs of the growers for a cost effective and easy to use solution, with the research and development costs required to provide that as an appropriate solution.

Tim van de Molen

Starting the family succession conversations

Executive summary

Why is family succession planning an issue we should be concerned about? It comes back to the word family. Family succession planning within the agricultural landscape conquers within, an emotional connection to the land and a cultural identity within New Zealand. There have always been family businesses running farms and there appears to be a strong desire for this to continue long into the future within New Zealand Agriculture. Family succession also deals with the love and affection of those most dear to us and with significant wealth at stake it must be done well for family relationships to be enhanced through the process. 

However when it actually comes to family farm succession, no one size fits all and that is primarily why succession is still discussed, researched, and written about. It has never been an easy conversation to navigate through to the desired outcome with operating environments constantly changing and continuing to evolve. However there are processes that can enable the conversations to occur within the family business to focus them on a desired outcome they can achieve together.
In some cases the terminology of family farm succession is also beginning to change. Being referred to as an ‘intergenerational business model’ and ‘family business continuance’ where the sole concept of asset transfer has broadened to include the transfer of knowledge and experience between the generations (McLeod & Dooley, 2012). This in itself infers a shift in mind set to intergenerational or continuance indicating a natural progression through the generations as opposed to simply succeeding in the family business or a sale of an asset.

Those spoken with and throughout the literature identified numerous triggers for a family succession process to begin ranging from a death in the family, an accident or injury, marriage or divorce, son or daughter wanting to ‘come home’, age and stage, someone asking the family the question of succession, through to business opportunities being identified which require a succession conversation. The trigger point will vary depending on the family situation. Once identified by the family as a priority the process can begin and conversations initiated to determine the way forward. Key attributes contributing to the success or otherwise of the process is a commitment and good will to see an agreed outcome achieved. This will often require patience and perseverance along with mutual respect for all involved.

Communication was identified time and time again underpinning the succession conversations because this is where and how the process has to begin. Addressing the ‘icebergs’ within the family business is about clearly articulating a number of often unspoken expectations, aspirations, assumptions, concepts such as fairness and equality and ultimately what the vision of the family business actually is. The part of communication which is often forgotten is the ability to listen and respect each person’s contribution and opinion to the conversations as the process unfolds. As George Bernard Shaw stated “The single biggest problem with communication is the illusion that it has taken place”.

Starting early often yields the best outcome for the family as time allows identified issues or concerns to be raised and addressed before it is too late. Dr James Lockhart points to the Dutch as an example of how to begin the conversations around family business governance. He indicates this should start from an early age discussing family business matters around the kitchen table. As the family grows and develops keeping the family involved in planning meetings and discussing the future helps to shape business principles and future conversations about their place in the business or what the future may hold. The family is exposed to the process of sharing ideas, listening and discussing plans for the current business and its future. By discussing the family business from a young age, siblings are exposed to business processes and skills which are required when it comes to more formal discussions around family succession planning.

What became clear from interviews with professionals and farmers is that strategic business planning is an area of running a family business that is not given enough priority. Rather time is spent working in the business but not on the business. The planning process involves disciplined time set aside to think about and plan for the future needs of the current business. Thinking through where are we now and where do we want to be with a plan of how to achieve that. Prioritising business planning enables a step towards succession conversations as this should come up within these planning sessions as the future is discussed. Encouraging business planning and governance principles within a family business is an important enabler for a strong platform for succession conversations to begin from.

Ultimately the outcomes of a family succession conversation will be determined by the family, for the family, as success will look different to every business. Following a structured process to succession planning which is led by a strong chair or independent facilitator to navigate a series of conversations, interviews and family meetings can enable this to occur and an outcome achieved rather than being put off or put in the too hard basket.

It is for the family to decide together what they want to see happen in the next phase of the family business cycle, how they determine that to occur, when the transfer will take place and why they want that to be their future.

Nathan Nelson

Improving Maori capability to make decisions for the development of Maori land.

Natasha Clarke-Nathan Kellogg report image

Executive Summary

This report outlines research conducted to identify how Maori decision making capability can be improved to increase the development of Maori land and to recommend ways to support that capability.

The research identifies how historical Maori decision making frameworks enabled Maori to develop their land collectively as a tribal people. It describes the key differences of historical frameworks to the current legislative Maori Land Trust frameworks provided in the Te Ture Whenua Maori Land Act 1997 and the constraints to progressing Maori land development.

The research highlights that historically Maori worked collectively as inter-dependents and how legislative frameworks that today promote individualism, have disbanded this collective ability. Individualism is established with the appointment of trustees who to some degree act independently on behalf of their land owners. The research identifies this as a key deferent to the development of land. The handing over of authority and decision making from the owners to trustees presents a risk or threat to the owners. This has contributed in the loss of Maori land development.

The results of the data analysed and tests of additional processes and thinking techniques present opportunities to reinstate the collectivised approach to developing land as Maori practiced historically – pre European contact.

The report finds that the application of additional processes can improve land owner participation and the application of thinking techniques can mobilize the development of Maori land and encourage new styles of thinking for Maori.

The recommendations of the report are for further testing and refinement of the process and for the process to be tested in other sectors (outside Primary Industries).

The dream that made us.

Executive summary

When looking at people and culture, it is difficult to use traditional academic processes to understand how we see the world, and how we think and feel. This is because the influences on humans tend to be more around emotions, rather than logic. Traditional academic process has been around logic or critical thinking, and this has served us well but I have strayed away from this discipline to explain the emotion behind our culture. 

I have chosen to deliver this paper in way that can explain the perception or the emotion of our culture – The Culture of Dairy Farming. I have also written this paper so a dairy farmer that reads this paper can easily follow the information. I have used the story telling approach to allow the reader to relate to different perspectives. The hope is to allow for a solution to develop by having a better understanding of different people’s perspectives. 

I have relied on comments and perceptions from interviewees to explain an agricultural perspective. I have also conducted a survey of dairy farmers to understand how they see or think about their work and life.

Stuart Taylor

Organics: fat into the fire or get out of jail card.

Executive summary

Aoroa Farms Trust sees organics as a Get Out of Jail Card!

This report was written to enable two decisions to be made:

  1. Whether or not Aoroa Farms Trust remain a conventional dairy farm or convert
    to becoming an organic dairy farm.
  2. If the decision is to convert do they supply Fonterra Coop or Organic Dairy Ag
    Hub Coop

The people involved in this business plan and who are critical to its success are the directors of the Aoroa Farms Trust Hal Harding and Penny Smart. They fully realise that they will not fulfil their goals on their own however, they will need good advice and support. During their time farming and during their due diligence on the organic conversion they have surrounded themselves with people to fill the skills gaps that they lack. Their farm consultant Rodd Hodgson, accountant Charmaine O’Shea and bank manager Bryn Hughes have been integral in helping them with their decisions; there are no plans to change this combination. Aoroa Farms Trust also have a very skilled, steady and committed staff whom they have consulted with throughout the whole organic due diligence process and from whom they have full support. Hal and Penny along with Aoroa Farms have a strong vision, set of values and clear goals regarding the farm and how they want it to be now and in the future. Hal and Penny back themselves, work well as a team and are confident that they can make an organic system work well on their farm. 

The opportunity for organics domestically and more importantly through export is growing very quickly and it would appear set to grow exponentially in the short to medium term. (The Organic Aotearoa Report March 2016). There is currently an undersupply of organic dairy and as more and more consumers want to know that the food that they are consuming is good for them and just as importantly the planet, this is set to continue. There will need to be ongoing improvement in the integrity of organic products as well as less fragmentation in the organic market place amongst suppliers, for the full potential of organics to be met and continue to progress at the current rate. (https://www.marketresearchreports.com/technavio/global-organic- dairy-products-market-2015-2019).

Aoroa Farms Trust has a high debt and in order for organics to be financially sustainable on the farm, they need to have an average $8/kgMS farm-gate milk price once fully certified. Benchmarking production, costs per kgMS and farming systems with other Northland organic dairy farms (which included on farm visits), has guided the figures and predictions used in making the organic decision. Being a ‘value add’ product the organic milk price is de-linked from the conventional global commodity milk price and so more likely to be as volatile/affected by global events as conventional milk pricing. This is one of the main attractions for the conversion as well as the ongoing benefits to the environment that occur when farming organically.

Risks that are involved and are beyond the control of the Trust are the weather, as Northland is prone to drought (affecting levels of production); the stability of the global economy, geopolitical disruption and the demand and supply equation for organics, affecting price paid.

There are two options available to Aoroa Farms Trust as to a processor to supply; Fonterra Coop and the Organic Ag Hub Coop. Fonterra (whom the Farm currently supplies with conventional milk) has recently stepped up/come back into the organic milk market. Fonterra have historically been unreliable in regard to renewing contracts in Northland for organic milk. They currently offer a transition premium linked to the conventional milk price pre full certification of .45c/kgMS with the share ownership requirement the same as conventional i.e. fully shared up at the market value which is north of $5.50/kgMS currently (May 2016). The Organic Ag Hub is a new cooperative that has a business model of matching organic milk to processors only i.e. they don’t own any processing plants themselves, they are small and intimate but as yet unproven. Their transition pricing is currently higher than Fonterra’s and shares in the Ag Hub Co-op are valued at $1per kgMS with the requirement to be fully shared up if supplying transition or organic milk.

The Trust feel that the rewards are there for the conversion both financially and environmentally which fit with their values, vision and goals.

The backstop if organics do not work out would be reconvert to conventional supply.

The decision was made on the 18th May with the approval of the bank to start the conversion to Organics and supply the Organic Dairy Ag Hub from the 1/6/16.

Penny Smart