kellogg
The South Island Kiwifruit Market: Should we Cooperate.
There are three main factors influencing Kiwifruit Growers profitability, productive yield, cost of production and the return they receive for the crop they produce.
When a kiwifruit crop is put through a packhouse, it is separated by size and quality into four grades. Class 1 and 2 are usually exported, class 3 is usually sold on the New Zealand domestic market, and class 4 is usually sent for processing or used as stock feed.
The major factor influencing a kiwifruit growers total return is the return they receive for the fruit that is exported (normally 85 – 98%). But the return from class 3 fruit sold on the New Zealand domestic market also has an important impact on a growers total return, and hence overall orchard profitability.
The purpose of this report is to look at the South Island domestic kiwifruit market, and consider if there is a potential benefit to South Island kiwifruit growers from cooperating in their sales and marketing efforts.
Paul Thomas
Farmers and social media: Communication, connection, community.
Executive summary
Instinctively as human beings we want to communicate. When children fail to speak their first word on time at the designated age, modern parents rapidly seek a medical and scientific reason for this failing in their offspring. Sometimes not reaching milestones is a good indicator of something not being well with the child and sometimes the child is just doing things in his own time. The alarm it brings to the adults in the child’s world indicates the importance of communication. Communicating connects us to first to the community of our family and so on as we grow and become independent, ideally expanding our community and communities as we grow.
Social media in this age of technology is our voice. The voice of a person who isn’t always sure they have something of worth to say but is pretty sure there are others out there in the cyber world who are of a similar mind, stage, experience in life. Social media starts out as a communication, a word, a post, a static statement that invites comment, responses and connection. Connection is a discussion, ongoing comments, a shared and retweeted statement, photos and stories becoming a community. Community, online is a fluid group of strangers and friends that welcome and regulates each other and guests, that fluctuates in numbers at any given time, that dies a natural death only to be resurrected by a new comment from a passerby.
When our physical community isn’t enough, our social media communities fill the gap; add value and validity to our efforts and our days, giving us knowledge and education, friends and sometimes even family.
“Facebook wants to populate the wilderness, tame the howling mob and turn the lonely, antisocial world of random chance into a friendly world, a serendipitous world” (Grossman)
The philosopher Descartes is best known for teaching the Latin saying “I think, therefore I am” as a tagline for explaining that we exist when we think for ourselves, test information given us and understand that most information that comes our way is an opinion. However in our modern time the saying could be rewritten as “I communicate, therefore I am” maybe reversing or embracing the very point Descartes was making.
Sara Russell
What’s wrong with the 50/50 sharemilking contract.
Executive summary
Something seems wrong with the 50/50 contract because it is in decline. Sharemilking in New Zealand has been the main stepping stone up the Dairy Industry career pathway into farm ownership since the early 1900s.
It has been a way of learning skills and at the same time building valuable equity for a dairy farmer to make that transition from stock ownership into farm ownership. Sharemilkers have been the muscle of the dairy industry working directly at the coalface to achieve long term farm ownership gratification from determined years of hard work and sacrifice.
Many Farm Owners can attribute their financial success to the Sharemilking pathway. That pathway has now narrowed with declining 50/50 Sharemilking Contracts on offer. Farm workers are losing the only true opportunity to achieve dairy farm ownership.
These are changing times in the dairy industry and so career pathways must also change. This report looks at the 50:50 Herd owning Sharemilker and asks why is the 50/50 Contract in decline and what is wrong with it?
Matthew Pepper
Operating mechanics of New Zealand’s four main rural retail businesses.
New Zealand has four prominent rural retailers, Ashburton Trading Society (ATS), Farmlands, RD1 and PGG Wrightson (PGW). Each of these businesses core, is providing farmers with goods and services. Over recent years we have seen numerous mergers and amalgamations, leading to the marketplace we have today.
Each business is having success in different areas, contributing to their ability to provide goods and services on farm at a sharp price. There seems to be little attraction for each business to compete head to head with each other, instead providing a healthy market place of “Low margins, low overhead costs, and input costs.” (Jason Minkhorst RD1)
The future looks bright for each of these businesses, with numerous opportunities and growth strategies available to them all. Of course, this does not come without threats and game changing market place revolutions. The will see constant battling and drive a to see who can claim that number one spot.
Wayne Langford
Pipfruit sector: mechanisms for waste minimisation.
Each of these areas, discussed either individually or collectively, has the potential to increase marketable yield and minimise waste through the supply chain directly or indirectly. The solution to reducing fruit waste and gaining efficiencies “lies in a combination of planning, investing, controlling, and partnering across the supply chain.” (Harz-Pitre 2013) The pipfruit industry needs to collaborate, create better transparency and technology transfer if it is to be successful in further minimising waste.
Growing pipfruit is complex; it is a dynamic biological system with many layers. Waste occurs throughout the growing cycle and the supply chain from the paddock to market. Waste fruit (apples) can account for 15 – 30% of the harvestable export crop and can be as high as 35%. The key stages of waste are: in the field, grading, and packing, storage and at retail and beyond. It is important to understand that gaining efficiencies is necessary to minimise waste. There are many mechanisms for waste minimisation and all have varying degrees of complexity. Waste is a component of all practices, processes, and procedures. One of the key drivers to reducing waste in the orchard system is the development and adoption of simple architecture. Simple architecture allows better crop load management, which is critical in reducing waste downstream in the production cycle. The impact of achieving the correct crop load can be as much as $15,000 to $29,000 per hectare. “There are 3 management practices that have a large effect on crop load: 1) pruning, 2) chemical thinning and 3) hand thinning” ( Robinson et al., 2013). Using quantitative rather than qualitative pruning strategies can reduce the inputs required for the remaining two management practices.
Chemical thinning, which relies on timing, rates and weather windows, is often variable and unpredictable. However, precision thinning which bundles new emerging technologies, such as carbohydrate modelling and new chemistries, is providing greater control. A good chemical thinning strategy can significantly reduce hand thinning to $1000 – $2000 per hectare, which could otherwise cost as much as $8,000/ha. The ability to optimise crop load is a critical component to minimising waste because significant amounts of waste are generated by getting it wrong. Crop load has a direct influence on yield recovery, and more specifically on marketable yield.
A key mechanism for increasing recoverable yield and reducing waste is good tree architecture, which allows for simpler management, and a reduction of inputs. Traditional systems or larger, denser canopies do not lend themselves to high yield recovery and high quality fruit, due to their complexity. The shift from more traditional canopies will be the catalyst for the move to greater mechanisation, because tree architecture that is Simple, Narrow, Accessible, and Productive, (SNAP) is more fruitful, less demanding, and allows for more mechanised forms of pruning, thinning and harvesting. Through their simplicity, they are creating synergies that will help speed the adoption of mechanised technology and precision farming. Growers that are on the path to full emergence in SNAP canopies currently are benefiting from the options of being able to implement partial mechanisation through harvest-assist machinery and platforms which increase productivity, are less physically demanding, attract staff, and broaden the labour pool. They require less supervision and can help increase yield recovery. Using platforms, compared to ladders, can reduce pruning and fruit thinning costs by $1,400 per hectare. SNAP canopies allow for greater light interception and increase fruit quality, spray deposition, and colour. As mechanisation advances and the technology for harvesting systems advances, a greater proportion of grading will occur in the field. Thus, reducing transport, grading, cold storage costs, and the resources required to carry out these procedures. The ability to send higher quality fruit through the orchard gate will significantly reduce waste along the supply chain.
Colouration is also linked to tree architecture, crop load, and climatic conditions, which all affect colour development. Fruit foreground colour is becoming more important as New Zealand growers focus on Asian markets where high-grade coloured fruit receives premiums. The ability to manipulate colour has significant economic benefits and increases recovery of marketable yield. The use of reflective cloth can increase the amount of fruit harvested by as much as 25%. However, the capital investment can cost up to $16,000 per hectare. The plant growth regulator, Ethephon, could be a more cost-effective alternative to help improve fruit colouration. Research has that use of Ethephon resulted in a greater volume of fruit, harvested earlier and overall, with less fruit left on trees post-harvest. The use of Ethephon, it is estimated, could increase a gross margin by $10,000 per hectare. The use of Ethephon in combination with SNAP canopies has the potential to significantly reduce waste by increasing marketable yield.
Dry matter concentration (DMC), a new quality metric for apples, has greatly increased the ability to measure quantitatively a fruit’s quality attributes. Since the introduction of DMC, “many producers have seen a marked reduction in product rejection from overseas super markets related to quality” (Plant and Food, 2011) DMC is also showing promise as a predictor of internal disorders such as browning. The cost of internal browning to the supply chain is $200 per bin before it enters the market! The ability to determine lines of fruit that have greater risk of internal disorders will greatly reduce waste and reduce economic loss of stored fruit. Perhaps the most significant tool in the post-harvest sector that has reduced waste is 1 – methylcyclopropene ( SmartFresh™), a compound that inhibits ethylene allowing better control of fruit maturation. This technology has allowed fruit to maintain better flesh firmness (crunch), a key retailer and consumer specification, reducing the amount of fruit that is rejected in market. Smart Fresh™ has enabled fruit to be stored for longer while maintaining good condition, significantly reducing waste. New markets in less developed countries are also benefiting as SmartFresh™ technology is bridging the gap where cool chain is not developed or consistent.
Perhaps the largest area of waste yet to be fully realised, is the retailer and consumer. Waste in this area is less controlled by the actions of growers and more by the perceptions of the market place. The demand of consumers has placed high product specifications on growers, ultimately causing large amounts of waste. British “supermarkets reject between 20 and 40% of farmers’ produce, often on purely aesthetic grounds.” ( EuroMonitor , 2012) “Tesco has also revealed that 40% of apples were wasted and a quarter of this is in the home”. (Smithers 2013)
The question remains : how we can influence consumers to minimise waste?
Grant Mckay, Mackay
Which perennial ryegrass to sow.
Executive summary
- This study stems from the common farmer complaint, that there are too many perennial ryegrass options on the market, this number conservatively estimated at over 50, with a few and limited tools available to farmers to aid them with variety choice for their pasture renewal programme.
- A survey is conducted of 16 Dairy Women’s Network Regional Group Convenors in semi-structured, conversational format and previous industry surveys were reviewed to provide insight into how decisions are made based on the limited resources.
- Predictions that farmers largely rely on ‘people’ sources to assist their decision making processes were confirmed. While not hypothesized, the information shared at farmer discussion groups and ‘over -the-fence’ style conversations ranked highly as a valued information source.
- Information gathered and the ‘Diffusion of Innovations’ model of Rogers (5th Edition, 2003) was used to create a matrix of predicted response to methods of transferring information about perennial ryegrass variety by farmer segment to provide useful paths for a Seed Company to target the specific groups.
Michaela Soper
Farming mums NZ: The next step.
Two years ago, I had an idea of adding a ‘one-stop-shop’ website into the brand that is, Farming Mums NZ.
The aim of this study is to determine whether further, specific support and resources are wanted or needed by the Farming Mums NZ community and to initiate a game plan on how to get it started. After Kellogg, I will look at the implementation of my concept and I will surround myself with professionals and advisors who can help me make this happen.
To avoid replication among other organisations, my aim is to create an online platform where each aspect of our industry can be brought together in one place and utilise each of our strengths to create a comprehensive and personalised website with member requested additional content and information not found elsewhere.
To determine whether this would be well received, I formed a 10 part, Survey Monkey questionnaire (Appendix 2). I attached the link into a post in the Farming Mums NZ Facebook Group to get a more accurate view on whether I was looking at the issue from the right angle.
Farming Mums NZ has the social aspect, the forum and the largest numbers giving it a community- feel, meaning great exposure, a dedicated following and a large amount of the ‘Next Generation’ of farmers, farming mums and rural women.
Other organisations I will be looking to collaborate with include Rural Women NZ, Agri-Womans Development Trust, Young Farmers, Dairy Woman’s Network, Rural Health Alliance Aotearoa, Young Rural Ladies, Primary ITO, Regional Community Connectors, AuPair Link, Newcomers Networks, Maori Woman’s League, Farmstrong, Fit4Farming, As well as the wider agricultural industry organisations. I.e. Beef + Lamb, Dairy NZ, FAR.
The support and collaboration between these organisations would be the best use of the website and I believe would add value to each of them. Each organisation could give a valuable contribution of resources and information from a different area of the industry and expertise, creating a whole and well-rounded knowledge base. In saying that, having full support industry wide won’t determine whether the concept goes ahead.
Nadine Porters Kellogg report from earlier in the year highlighted the need for us to all work together. I agree completely with this point and believe it is the best way forward to form a well- rounded support system for our wider industry rather than each organisation offering separate ideas, overlooking key points or risking replication.
”Who is the voice for rural women? There seems to be confusion among women as to who is representing them. Rural women groups urgently need to co-ordinate and develop a collective strategy in today’s environment.” Nadine Porter, 2016
The results from the survey were positive and with 660 participants it helped to build confidence around the idea and what was most important to those who will be most likely to benefit. 96% of respondents were on board with the idea.
Having the brand “Farming Mums NZ” or similarly named, along with the large page support and reputation bringing this initiative together, is going to be the best way to engage the largest number of technologically savvy women. I also see FMNZ as an independent in the middle of these other mentioned groups with no particular industry bias or current monetary influence.
Chanelle O’Sullivan
The 50/50 Sharemilking: Where are we in 2013.
Executive summary
The purpose of this report is to have a better understanding of the 50/50 sharemilking industry in 2013.
The perception within the dairy industry is that the 50/50 sharemilking business structure is on the decline and not enabling sharemilkers to progress to purchasing their own properties or enter other business investments.
Having been a 50/50 sharemilker for seven years, from the late 1980’s to mid 1990’s and having gained significant benefit from the system, I identified the need to ensure this unique pathway endures. Due to this interest in the succession of our industry, I investigated where the 50/50 sharemilking system stands today and provided some solutions for how it may develop in the future.
The body of the report looks at the actual numbers today and the trends over the last decade. I also decided very early on in my research that there appeared to be, as I have termed it, a “natural progression bottleneck”. This in itself was having a significant effect on how the 50/50 sharemilking system was functioning. To illustrate this more clearly; I chose to survey 10 long term 50/50 sharemilkers from around the country.
My findings were conclusive in that the industry needs to look seriously at its 50/50 sharemilking contract to more closely align itself with the current economic landscape, market changes and farm demographics.
Phil Butler
Defining the cost of within orchard production variability on the overall profitability of a NZ apple orchard.
Growing conditions in New Zealand have historically been recognised as being some of the best in the world for producing exceptional volumes of excellent quality apples. To remain financially sustainable New Zealand apple growers need to specifically focus on their natural strengths, ensuring that the production they achieve maximises the advantage of their location.
NZ apple growers have spent significant time and focus on cost reduction in orchards this may have been detrimental to overall profitability. The NZ apple industry does not have the same access to cheap finance as many of its international competitors such as the USA. New production techniques generally come with significant costs, areas of new production have a relatively long lag time from initial investment to final repayment. New growing systems also have financial risk, with the potential cost of mistakes made during the learning and development process.
Increases in the overall production of market acceptable apples can be achieved by ensuring all trees are working individually at an optimum level with minimal variation between them. This has potential for gains in cost reduction, resource use efficiency, minimisation of fruit quality variability and improvement in overall profitability.
To ensure tree to tree variability is minimised systems need to be created to efficiently measure key differences between trees. Similar populations of trees are grouped and then analysed to quantify each groups impact on overall block performance, in an easily understood format.
Beyond the scope of this project, tree to tree variability information can be used to assist with investigations into potential solutions and financially justifying the cost of variation mitigation.
This study was undertaken in a commercial Royal Gala apple or chard with 6159 – 10 year old trees planted on M9 rootstock. The assessment focuses on 1887 trees within this block. The use of trunk diameter measuring was decided as the basis for ranking variability. Fruit size and total fruit number per tree was assessed in a small trial. 5 different trunk size groups were eventually formed and the profitability of these assessed using a computer based profitability benchmarking model.
- The missing new trees returned a negative profit of – $19,755 per ha.
- Weak/small trees returned a profit of $ 8,516 per ha.
- The average size trees returned a profit of $14,435 per ha (approximately the same as the overall block profitability).
- The largest of the average trees returned a profit of $21,344 per ha.
- The excessively large / scion rooted trees returned a profit of $5,435 per ha.
Jonathan Brookes, Brooks