We had our first substantial snowfall of the year this past weekend, and I got to capture Sandwich’s reaction after I opened the door to the chicken coop.  Needless to say, she doesn’t seem pleased by the plethora of wet whiteness as she peers down at the ground.  Not that Sandwich is all that pleased about much lately.  She’s pretty content to sit there and titter at your every life choice.

My goal was to capture all the critters in their first snowfall…but… 2 pictures in and my camera died.  Oh well.  I have big updates on the mini-pigs, and on the big pigs as well!  And my ladies are off at the farm we got them from, hopefully getting busy with the buck.  We will get them back at the end of December in the hopes of some kids in April.  Fingers crossed!

I stated that these expired in September 2012 and therefore the company was operating on a temporary extension. The correct position was that the debt facility was originally negotiated for two years from September 2010 and consequently due to expire in September 2012. This remained the position at balance date in September 2011. However in the 2012 annual report, the facility was stated as expiring on 31 December 2012.

Clearly the company had arranged a three month extension at some point before the original two year facility expired and this was not a temporary facility, as I implied. Nevertheless it was no more than a three month extension, while the next longer term arrangement was being negotiated.

I apologise for any incorrect interpretation, but still maintain the company’s current debt level at balance date was higher than could be considered comfortable.

However in an interview with Jamie Mackay on the Farming Show last week, when asked to comment on the industry’s debt level, Cooper gave his opinion that the debt was a good thing. Because it was tied up in inventories, it would ensure the industry acted responsibly. This is almost exactly what I wrote last week, although I saw the discipline on the companies as a necessity, not a virtue.

In his radio interview he stated after record prices last year, meat companies are reining things in.

“It’s a damn good thing we do have stock in store and we do have high debt because that means meat companies are acting responsibly, and are feeding the product to market to create stability of price. I’m quite happy that us and other companies have debt because that means they’ve got stock in store and that means we’re managing markets well.”

I must give Keith credit for being unreservedly a ‘glass half full’ kind of guy which you have to be to survive in what I believe is New Zealand’s toughest industry. He promises farmers that things will improve.

“We are living in volatile times. There will be volatility, but through the volatility we will see a steady increase in the price we will receive from offshore,” and he expects meat companies will pay farmers around 90 dollars per lamb this year.

I’m not sure the glass is quite as half full as Keith Cooper suggests, especially in the sheep meat market. Although lamb leg prices in the UK are holding fairly well, especially for chilled product, prices for middle cuts, like racks, loins and tenderloins, in North America and Europe are under pressure.

The price of loins and tenderloins have dropped by as much as 30% in the last couple of months, while there are fears of another collapse in lamb rack prices because of competition from low priced Australian product. As a result importers are not placing orders for New Zealand lamb, because they remember the last time prices collapsed.

The Middle East has gone quiet on lamb shoulders because of cheaper Australian product, although China is still firm. Here it appears New Zealand exporters benefit from less Australian competition with fewer China licensed plants in Australia.

All this explains why the New Zealand consumer is able to buy plenty of well priced lamb available on the domestic market. But this won’t provide more than a minimal contribution to managing the existing inventory levels and it certainly won’t cope with next year’s peak production. The industry will be keeping its fingers and toes crossed for an early economic uplift in our main markets, UK, Europe and North America, because otherwise the glass won’t have much in it at all.

Silver Fern Farms is operating on a three month extension to its bank facility which expired at the end of September, but reported current (expiring within 12 months) loans of $316.7 million at the end of its 2012 financial year. In its last published annual accounts to September 2011, ANZCO had current and non-current loans of $220 million which must surely have increased in the very challenging 2012 year. Lastly at the end of September Alliance had $331.8 million of assets and non-current loans of $196.1 million which are clearly not causing any immediate concern.

The two big cooperatives published their annual reports last week and neither makes pretty reading. Both results benefited from a large tax loss which, to be effective, must of course be offset eventually by profits.

Alliance’s financial position was fully flagged in its announcement of a $50.8 million post tax loss including the $19.4 million write down of its Mataura sheep processing unit, which was actually a pre tax loss of $70.6 million before tax credits. Its balance sheet with 51% equity ratio is still strong, although not nearly as strong as twenty four or even twelve months earlier.

Silver Fern Farms had already announced an after tax loss of $32.2 million which was also in reality a loss of $44.2 million pre tax, which included no restructuring costs. Debt rose during the year from $111 million to $316 million, a massive increase which was largely accounted for by the inclusion of $35 million insurance payout for Te Aroha in the 2011 accounts, the cost of the rebuild, $83 million of higher livestock and finished product inventory, and the funding of the annual loss.

A careful study of the annual reports sheds an interesting light on the company’s banking arrangements. Its 2010 report stated that its facilities had been renewed for two years till September 2012 and included $75 million for repayment of its SFF030 bonds. The 2012 report notes that its facilities expire in September 2012, hence the classification of all secured loans as a current liability, as was the case in the 2011 accounts.

I understand from CFO Keith Winders that SFF has been operating on a temporary extension to its banking facilities since the end of September; he claimed this was quite normal because of the annual renewal arrangement with its bankers. However it appears unusual to me, because firstly SFF previously had a two year facility and secondly it can’t be ideal to carry $300 million of bank loans into the new financial year without negotiating secured banking arrangements. However the directors must have received solid assurances of the company’s continued trading ability to allow it to continue to operate and incur liabilities.

Winders was also quite definite that there would be no significantly different terms and conditions attached to the new facility when finalised. This suggests the operating environment since September must be at least stable, although there is little evidence of an improvement in market demand, especially for sheepmeat which caused all the problems last season.

The only major improvement I can see is the reduction in lamb prices which have fallen from $140 to $90 in a year for a 17.5 kg lamb, but the season hasn’t yet got sufficiently into its stride for trading performance to have recovered many of last year’s losses.

What is absolutely crystal clear is that the banks will be watching their exposure to the industry like hawks and will demand some dramatic improvements for the rest of this season for which the critical period will be from January to May. Last season’s problem was that the price was much too high to start with and none of the processors was brave enough to lead the way to get it down when stock numbers were low.

I imagine none of the meat companies will have any appetite for chasing market share at the expense of margin this year and, if they do, their banks will be down on them like a ton of bricks. Farmers had a bonus last season, but there’s no point in hoping for a repeat any time soon. This presupposes that processing capacity is fairly well aligned with livestock volumes because the last thing the industry can afford is a procurement led price war.

Unfortunately my impression is that there is still excess capacity in the country, even after the closure of Mataura, but for the time being the companies will all be determined to rebuild their balance sheets. Past experience suggests industry peace will only last as long as necessary to repair the damage before the companies find the prospect of grabbing market share too hard to resist.

The only long term remedy will be rationalisation of processing capacity and ownership, combined with seasonal supply commitment like the dairy industry. The banks are one of two critical factors in a change of this nature, but they would have to work together and accept write offs in the interest of a lasting solution.

Farmers are the other critical factor, but the process of converting them to seasonally committed suppliers is a slow one and nothing will make this happen overnight.

The meat industry appears likely to be consigned to a further period of instability, but this season may give some indication of whether it is heading in the right direction.

You were expecting a picture of a pond, perhaps.  Yes, we have a pond – in fact, we have two up on the pastures.  And we have ducks; thirteen now, soon to be a smaller number; Muscovies, as you might be able to tell by the prominent red caruncles around their eyes in the photo above.

You would think that ducks and ponds go together.  In fact, they do, but to a fault.  The fault is, once the ducks make it to the pond, that’s all they ever want to do; that’s the only place they ever want to be.  They camp on the pond.  It’s ducky pond camp.  They trample and poop around the edge, and swim off into the middle whenever I approach.  They won’t get out of the pond and go back to their hooch in the evening.  The pond, for the ducks, is Nirvana.

But it’s not where I want them to be.  Paddling around the little pond all day and sleeping on it unprotected from predators, is not what I’m paying them to do.  They’re tree ducks, actually, and their owner’s manual specifically states that they do not need a pond to live well and prosper.  They have plastic concrete mixing tubs for bathing and cleaning out their little duck nostrils, which I keep clean and filled twice daily.  They have a nice big hooch with lots of bedding to snuggle into and locked doors at night.  They have cow paddocks to forage bugs and fly larvae in.  They have an always-full feeder of delicious high-protein crumbles.  They don’t need a damned pond.

But the ducks love the pond.  And once they found the pond, they wanted nothing else but to camp on the pond.  So I moved them and their hooch further away, down by the yearlings’ winter paddock, thinking the shift of territory would stymie them.  Oh, no.  The first day at that new location, the very first hour after they were let out in the morning, they hoofed it right back to the pond – a journey of perhaps an eighth of a mile, I might add.   They are pond addicts.

But the pond is mine, and I hired them for pasture duty.  And getting them de-ponded is not an easy task, unless they are very hungry and can be lured off the water with a shaken feed can.  My alternative methods of getting them out of the water ranged from shouting, banging sticks, throwing sticks, chucking stones at them (to scare them out, not to hit them), and attempting to send a dog in after them (to herd them out, not to eat them).  The one night we went up to put them to bed and found them back in Nirvana Pond, the dogs and I had to admit defeat and leave them there all night, after much thrashing about in the dark on the overgrown pond edges.  Sitting ducks, as the phrase goes, and it was just luck they were all still there in their little flotilla in the morning.  The countryside is full of hungry dogs, foxes, and racoons.

So, like the Soup Nazi in the Seinfield episode, I furrowed my brows and in my meanest voice said “NO POND FOR YOU!!!”

Poultry netting got put back up yesterday.  Half the flock figured out how to worm under the bottom of it and spent the whole day back in pond camp, where they got hungry enough to come out of the water when I shook the feed can at them in the afternoon.  So this morning I snugged it all down before I let them out of their hooch, and that did the trick.  Time to start relocating the big boys to the big freezer, though.  I am hopeful that once their numbers are smaller, once the flock is only hens and a couple of drakes, their wanderlust will subside and I can let them free range around their hooch again.  Otherwise, we’ll have to come up with a way of plunking their pen down in the paddocks so they can do what they’ve been hired to do:  catch flies, not fish.

A good growing season meant higher production and productivity, but the impact of lower dairy, beef and wool prices saw a 7% reduction in annual revenue. Calving, lambing and fawning percentages were well up on last year, although slightly behind target for calves and fawns. Lambing percentage at 139.2% was very good.

Profit was down for the period because of a $12.7 million increase in expenses, mainly pasture maintenance, supplementary feed and farm working expenses, and overall revenue reduction of $8.9 million. Softer demand affected dairy, beef and dairy prices, partly offset by lamb returns, up 5%, and venison and deer velvet, as well as higher production.

The budget for the current 2012/13 year is for profit at $12.7 million to be less than half last year’s and less than a third of the 2010/11 year because of falling prices due to global financial concerns and the obstinately high NZ dollar .

Landcorp is New Zealand’s biggest and most diversified corporate farmer with a total farmed area of 173,000 hectares and nearly 1.5 million stock units throughout both North and SouthIslands. In 2011/12 it produced 13,357 tonnes of milk solids, 10,176 tonnes of sheep meat, 9,715 tonnes of beef, and 2,258 tonnes of venison as well as large volumes of wool and timber.

Landcorp has a target of selling 80% of its lambs on fixed price contracts to Silver Fern Farms, Alliance and other meat companies and last year achieved in excess of 70% by this method, proving to its satisfaction that this provides less volatile and overall better market returns than spot trading. Lamb production is geared to meet specific weights and specification to fulfil meat companies’ contracts with northern hemisphere retailers.

As a founder partner with Silver Fern Farms and the Ministry for Primary Industries in FarmIQ Systems, Landcorp is committed to the development of integrated value chains from pasture to plate, designed to align New Zealand production and supply with consumer demand preferences. Twelve of Landcorp’s farms are now on FarmIQ’s farm management system.

The development during the year which attracted most publicity was the joint venture with Shanghai Pengxin to manage the 16 Crafar farms bought from the receivers and expected to get underway shortly. One of Landcorp’s goals is to increase its involvement in the dairy industry and, in addition to the JV with Shanghai Pengxin, an extension to Maronan Dairies in Mid Canterbury and further development of Wairakei Estates near Taupo will contribute to this.

Shanghai Pengxin will invest $15.5 million over three years in upgrading the farms which will lift annual production to around 5,000 tonnes of milk solids, increasing Landcorp’s total production by more than a third

Sheep and beef finishing has been boosted by the development of Cheltenham Downs in Manawatu and this has helped recovery from the drought years of 2007 and 2008.

In an industry such as agriculture which necessitates large land holdings and variable returns from year to year, there will always be questions about the validity of state ownership. But the SOE model achieves two key objectives: first, the enterprise is able to function at arms length from the government and second, there is no risk of these large swathes of farm land being sold to overseas investors.

Landcorp is a well managed farm business which could no doubt produce better profits, at least in some years, with different farming practices or mix of activities. But the SOE seems to tick most of the relevant boxes. It is profitable most years, occasionally extremely so; it has very extensive genetic records which are very valuable for tracing bloodline and breed performance; it invests in innovation and technology; its farms are well maintained and it appears to have sufficient capital for reinvestment; and over the past 22 years it has paid dividends to the government, therefore New Zealand as a whole, of nearly half a billion dollars.

There’s no evidence that Landcorp is constrained by public ownership or that it would benefit from part privatisation. This doesn’t seem to be an argument the country needs to have, at least in the short term, so we are all likely to enjoy the pleasure of farm ownership for some time. Long may Landcorp continue to prosper!

5IndexAreaMarsabit.pdf

My brother-in-law made us aware of a cool book “Feeds and Feeding: A Hand-book for the Student and Stockman”.  The book discusses livestock farming, soil fertility, sustainable farming practices and profitable farming through intelligent and progressive agriculture.   It is free as a Google eBook that you can read on your computer, iPad, phone or print out on good old-fashioned paper.  You can download it here.

This book has a copyright date of 1915. I’ve only read the introduction and first couple of chapters but I’m hooked.  They had me at “Lured by the high prices which have ruled for grain and other crops in recent years, many farmers all over the country have sold their crops for cash, rather than following the wiser plan of marketing a portion thru the feeding of live stock, and thereby maintaining a balanced agriculture.“

If that doesn’t grab you then try this on for size, “The good stockman grows proud of his sleek, well-bred animals and derives satisfaction therefrom not measured in money.  With pride he may hand down to his sons his reputation as a breeder.  He is also able to leave them fertile fields which he has built up rather than robbed, a heritage bequeathed by but a few grain farmers.”  I like that.

It was meant to be a textbook so there is a good bit of technical information throughout the book.  Some of which could be a bit outdated but it is interesting and is a good basic primer in livestock farming.

Here is the Table of Contents to give you an idea of what is covered in this book.  There is something in here for everyone.

Contents

Of the other companies ANZCO and Blue Sky Meats will file their results with the Companies Office at the end of March. AFFCO is now a wholly owned subsidiary of Talley’s and doesn’t disclose its results, although the Meat Workers Union says (optimistically) these will be horrendous because of the lock out earlier this year. AFFCO’s results may not be as bad as all that because of the lack of a peak kill.

Cooke’s next point was the losses would inevitably lead to more industry rationalisation; this in turn would cause job losses for the meat workers who have already been affected by several plant closures in recent years. Job and earnings security suffered from fewer stock numbers and shorter season with workers being paid piece rates for shorter shifts; also higher average weights mean better productivity which is true for lambs, but not cattle.

His final point was about the lack of industry leadership in spite of the fact there are a number of good individual companies, all competing vigorously with each other. Cooke said the meat industry has not changed in the last fifty years with poor marketing and plant closures quickly followed by the addition of more capacity. He described the industry graphically as behaving like a cow with its head chopped off.

A look at the Union’s website provides more information on this topic: plant capacity has increased over the past decade with new plants, rebuilds and upgrades at nine plants across the country as well as capacity increases at several more. The Union believes the Government must initiate a “meat summit” to address this.

So the questions are whether Cooke is correct or the industry is behaving in a perfectly rational manner.

My first reaction is the Government will never initiate a summit, almost certainly just another talkfest, because it realises the industry has a functioning commercial model. It competes in a global market and government should never interfere with privately owned businesses, provided they comply with the law. The meat industry has its own industry body, the MIA, which deals with all sorts of industry issues, but not those which impinge on competition between its members.

In addition, land use changes dictated by relative sector profitability will continue to occur regardless. The government would not be wise to get involved in picking winners or hobbling one sector’s ability to adjust its processing facilities.

My next reaction is meat processors and exporters are not the whole industry. There is a value chain which starts behind the farm gate and finishes in restaurants or consumers’ homes. The Red Meat Sector Strategy, FarmIQ and other company based initiatives attempt to define what can be done to join links in the value chain so they contribute to higher, more consistent returns. But it’s up to the farmers to produce to these specifications.

Meat exporters have done a great job over recent years to convert yesterday’s freezing industry into a sophisticated red meat member of the food industry, while also expanding into high value medical and other non-food product areas. More can always be done, but the industry has moved light years from the age of subsidies.

However this process of modernisation has of necessity been achieved at a cost to overall jobs and terms of employment. The older plants were inefficient and built to service a different industry structure from a previous age. The period following deregulation and more particularly the removal of subsidies saw many farmers in serious financial straits, so their only option was to change farming practice or land use or sell. An unavoidable, even desirable, outcome was a big decline in sheep and prime beef numbers, offset to some extent by the growth in the dairy industry and the US manufacturing beef market.

Owen Poole made the point to me the losses are a sheepmeat problem and Alliance has responded by making the appropriate plant decisions, such as closure of Mataura sheepmeat processing, doubling Mataura’s beef capacity, increased venison processing at Smithfield and rendering at Lorneville. Keith Cooper also confirmed his satisfaction with SFF’s footprint in relation to livestock volumes, having already taken some tough capacity decisions.

This emphasises the regular requirement for new plant configurations to meet the demands of the market place and consequently the workforce must adapt as well. My experience tells me the meat industry does a pretty good job of responding to changes in market conditions, while generally trying to keep its workforce employed. But there is no future in keeping inefficient plants running to protect workers’ jobs, because these will disappear sooner rather than later.

Equally there are no prizes for leaving customer orders unsupplied when competitors are still prepared to process livestock. I certainly wouldn’t fancy the chances of the industry leader who sets an example by refusing to pay the money and has to tell Tesco or Marks and Spencer his company can’t supply because the stock costs too much this week.

Leadership is not as simple as it appears.

Duck butchering went well yesterday.  I picked the two white drakes out of the bunch while they were still inside their hooch, and trailered them down to the house in a wire dog crate where they hung out until early afternoon.  The weather was perfect – 63 degrees and sunny – so no cold fingers nor any flies.

We noted that the first bird plucked easier than the second; we think because we scalded it longer.  There wasn’t any problem with skin tearing, so next time I’ll probably swish a little longer in the hot water before cooling them in the ice water.

I’ll be getting a tool to help scrape out the cavity, too, as that was a little difficult with their long bodies.  The livers look wonderful, can’t wait to cook them up.  Both birds are “relaxing” in the fridge in their vacuum-sealed bags, the one to be roasted on Thursday and the other to start the freezer flock.  They dressed out right around 5 lbs each.  Perfect.

I brought home 15 eight-week-old Muscovy ducklings in mid-August, to start a bug-eating flock for the cow pastures.  Fly control, or one element of it, hopefully.

They are now 21 or 22 weeks old, nearly full grown.  There are only 5 little hens in the bunch.  I don’t need 10 drakes to 5 hens, that’s for sure; two will be plenty.  So the extra boys are destined for the freezer, and one will volunteer for Thanksgiving meal duties.

It’s been 30 years since I processed poultry, so I’m only going to do two this first go-round.  I won’t take pictures of all the steps, maybe just one before and after.  We’re assembling all the items needed and test-firing the scalding pot today.  I built a killing cone yesterday out of scrap sheet metal, using dimensions I found online.  Hopefully everything goes smoothly, although I’m not looking forward to the hand-plucking.

Bear is here on his first semi-annual visit, over the Thanksgiving holiday - so nice to have him here.  With any luck, we’ll have a succulent young roasted duck with our mashed potatoes, stuffing and gravy this year.  Bon apetit!

Amare Haileslassie, the key author of the study; credits ILRI flickr

Balanced nutrient inputs on crop land positively impact productivity of the livestock compartment of mixed crop–livestock farming system, a new study has revealed.  This knowledge can build on the currently perceived need and benefits of balanced nutrient replenishment in crop–livestock system.

This is a key finding by the India based team of Amare Haileslassie, Michael Blu¨mmel , S. P. Wani,  K. L. Sahrawat, G. Pardhasaradhi  and Anandan Samireddypalle.  It is published by Springer on October 27, 2012. The paper is entitled Extractable soil nutrient effects on feed quality traits of crop residues in the semiarid rainfed mixed crop–livestock farming systems of Southern India.

Amare et al note that rainfed agriculture covers 80 % of the world cropland and produces more than 60 % of cereal grain. In India, rainfed agriculture has a distinct place and occupies 67 % of the cultivated area, contributing 44 % of the food grains and supporting 40 % of the human and 65 % of the livestock population.

Rainfed agriculture is of critical importance for the livelihood of smallholder farmers in the arid and semiarid regions of southern India (e.g. Karnataka). In these regions, livestock are strongly associated with crop production.

The results of this study clearly demonstrated that the outcome of soil nutrient depletion, in a mixed crop–livestock faming system, is far beyond reducing grain production. It affects livestock feed quality and thus is strongly associated with the demand for resources especially land and water.  Such soil–crop–livestock continuum is seldom explored and rarely used to encourage smallholder farmers to improve soil nutrient management. So this knowledge can certainly build on the existing understanding of the need and benefits of balanced nutrient management in crop–livestock system.

Cooper confirmed the effect of lamb on the season’s losses, saying SFF had been comfortable with what it was paying for lambs price before Christmas. Market demand had suddenly stopped dead in February because of the market price and companies had all been hit by exposure to expensive stock, unable to reduce the price quickly enough. The net result was too much product going into overvalued inventory which resulted in a writedown of $25.6 million at balance date.

The company’s media release highlighted the same reasons as Alliance for the loss – unjustifiably high procurement cost, high dollar, sudden drop in market demand, inventory writedown – but made very positive reference to the future outlook. It has made significant new investments, including the Te Aroha rebuild, $8 million of new marketing initiatives and $4 million commitment to FarmIQ.

In the current year SFF intends to invest a further $22.6 million in brand development, marketing initiatives and FarmIQ. According to chairman EoinGarden, this “clearly demonstrates our confidence in, and commitment to, the growth path we have charted for our company” notwithstanding the poor performance during the year ended September.

High inventories are already being substantially sold down to a point where the company’s inventory level is already much closer to normal for this time of the year, lonely six weeks after balance date. As will be the case with Alliance the equity ratio will have already benefited from this.

The suspicion that SFF’s loss would not be a large as that posted by Alliance because of a greater proportion of beef in its kill proved to be correct. Nor did SFF have to take any plant closures on the chin. CEO Keith Cooper said the company’s footprint was consistent with livestock numbers and no further closures were under review.

In answer to a question about further industry rationalisation Cooper said SFF had already taken over two small companies, Frasertown and Wallace, and he was always in favour of aggregation. This invariably involved smaller companies being acquired by one of the big four. However it was ultimately up to farmers to decide on the industry’s structure, because industry rationalisation only lasted so long before a new processor emerged, which farmers would then typically support.

The general mood in the meat industry, confirmed by SFF, is positive for the new season. Procurement prices are aligned with the market, livestock volumes are stable, even recovering slightly, and capacity is fairly well balanced with throughput.

In conclusion Keith Cooper said while 2011/12 was a poor year financially, strategically it was a progressive one. “2012 marked a continuation of our unwavering commitment to executing our Plate-to-Pasture strategy. This is a progressive and long term plan, which demands perseverance and determination, to ultimately generate sustainable value for our farmer-partners, by meeting the modern consumer’s requirements.”

 So after a lot of discussion with friends, family, and classmates we came to a sobering conclusion.  Fredericó Bacón was most likely lonely in his new home.  He had all the tomatoes he could eat, along with grain and stale bread.  He had a nice warm shelter in a hoophouse with deep straw bedding.  But he was still probably lonely, especially having been a part of a litter of piglets.  Therefore we started a bit of a search for some equally small and adorable piglets to be his buddies.

We sent out some emails to local farmers who were raising heritage hogs, and perusing some internet ads.  But it was the ever-useful Craigslist that was the answer.  And the beginning of a strange weekend.

The ad was for Kune Kune piglets, located a little over an hour away from us.  I do a lot of Farm & Garden section browsing and I had NEVER seen an ad for this unusual breed.  Originally from New Zealand, they exhibit many of the same traits as the Guinea Hogs.  Kune Kunes are known for being docile and friendly.  The word Kune Kune means fat and round in Maori, which is quite appropriate.  They are also known for their ability to forage, and thrive on pasture better than other breeds of pig.  Basically, they were right up our alley but were previously too expensive and too far away to make a reality.

So… we gave them a call, and hopped in the truck in order to get some piglets to add to our growing menagerie.

It started off well enough.  The farm was adorable and when we pulled up we saw small, round, spotted pigs out in the pasture with their horses.  Two younger girls came running up to us with their faces beaming, two kittens trotting at their feet.  With an exclamation of joy they announced that one of the sows had JUST had 2 baby piglets the night before and raced to show us.  We meandered over to the pasture and indeed saw the tiny piglets that looked more like puppies.  One was bright auburn with black spots, the other was cream with black spots.  Both were nuzzling at their mom and suckling away.

At this point we were introduced to the farmer himself, and after a bit more admiring we went over to where the weaned piglets were.  The girls (and kittens) were both excited to introduce us, so we formed a veritable parade with fresh apples as a peace offering to the little pigs.  We grab 3 (2 castrated boys, and 1 girl) and then jet off for home.

We have one emergency stop when one of them gets their nose rings caught in the wire of the fence.  This resulted in piglet screaming, The Girl screaming at The Boy to pull over, and the other piglets scrambling in the cage.  After pulling over we were able to free the little one without too much damage and continued on our way

(For those that don’t know, nose rings are installed into pigs in order to discourage rooting.  This allows you to keep them on pasture without them destroying it.  Since we WANT our pigs to root, we removed these rings as soon as we got back and disinfected with an iodine solution to prevent infection)

 So we got back, removed the nose rings, and here is where the adventure really begins.  We let the first two out of the cage they were in and into the pen with Fredericó who was thoroughly confused.  The two Kune Kunes were a little bit startled at their new environments, and having 2 rings each ripped out of their noses.  So… they ran.  And hit the electric tape.  And squealed.  And ran again.  And then…

Scaled the chicken wire fence.  So then they were in the hoophouse with The Boy and I trying to cover both exits.  However that was not successful, so soon one ran out and John started sprinting after it.  Leaving me with the second escapee (the third piglet was locked in the cage the second the first two escaped the pen).  There was no way I was going to catch it by myself, and soon enough it also sprinted out into the great outdoors.

Complete and utter chaos, people.  2 tiny spotted piglets running across the cow pastures, with perimeter fences that did absolutely nothing.  Looking back now, it must have looked hilarious but at the time I was seriously panicked.  We were jogging back and forth trying to see them, The Boy using a fishing net in attempts to capture them (totally unsuccessful).  We tracked these piglets across a few acres of pasture and cornfield, and I am sure they were just as terrified and confused as we were.  After a few failed attempts at using electric netting to try and contain them (they were so tiny they slipped through the holes in the netting!), we kinda just gave up.

The Boy had a meeting to go to.  (Note: We are never getting animals a day The Boy has a meeting.  The Boy also had a meeting the day we got the goats, and if you remember we ended up having to tie them harnesses strapped to cement blocks due to their own grand escape)  The intern and I found the pair in a small corridor of trees near the pasture, so we threw out a bunch of corn in the hopes they would stay there.  We also set out live traps, a small shelter, and some water.  It was getting dark enough that we didn’t want to risk chasing them off somewhere else.

Of course this was also a Sunday, so I had to head back to my apartment for school tomorrow.  I hoped and prayed that they would just stay in the shelter and not get eaten by anything.  At least it wasn’t super cold, and I had seen them eating the grain that we had thrown out there for them.  I was hopeful, but had my doubts.

I was ecstatic later in the day to hear that The Boy along with the intern and some of his other employees had managed to capture the 2 escapees!  Apparently in the morning he found the two teeny, tiny, spotted piglets right outside the fencing that enclosed the gigantic red wattle sows we have.  Just chilling, hanging out with their fellow porcines.  Then they were slowly able to herd the piglets into the other, empty side of the pig shelter where they were able to be cornered. Whew!

 The piglet enclosure got some major renovations.  It now has a 2 straw bales high barricade around the entire outside of the fencing.  Therefore this time when they started running around and learning the electric fence they weren’t able to escape.  At this point they have now acclimated to their new surroundings, and all 3 of them are getting along well with Fredericó Bacón.  They are eating up all the tomatoes, leftover veggies, as well as some stale bread from a local bakery.

And so, say hello to Antonio, Javier, and Maria Jamón!

Linking to You Capture, where the theme is An Animal.  I don’t think it could have been any more appropriate

]]> http://allanbarber.wordpress.com/2012/11/12/alliance-posts-50-8-million-loss-for-last-season/ Sun, 11 Nov 2012 22:00:56 +0000 Allan Barber http://allanbarber.wordpress.com/2012/11/12/alliance-posts-50-8-million-loss-for-last-season/ Alliance posted its annual result on Friday which was every bit as bad as predicted, a net after tax loss of $50.8 million for the 12 months ended September. The result included restructuring costs of $13.5 million associated with the closure of the company’s Mataura sheep and lamb processing operations which followed similar costs of $19.4 million the previous year from the closure of its Sockburn plant.

The 2012 performance saw a $77.8 million deterioration at the operating level compared with 2011 which, despite the $9 million net after tax loss, produced an operating profit of over $20 million.

Chairman Owen Poole expressed his disappointment at Alliance’s first operating loss for 20 years which he attributed to the decline in the sheepmeat market exacerbated by the high New Zealand dollar and the unsustainable level of procurement costs earlier in the season.

In the 2012 financial year Alliance was hit by a triple whammy of lower sales and product prices, ridiculously high livestock procurement prices driven by short supply pre-Christmas, and the high dollar. The effect of the dollar was in no way reflected in a realistic procurement market. A further question is whether other processors were equally affected or were saved to some extent by a higher proportion of beef processing. This will be at least partially answered when Silver Fern Farms releases its result later in the month.

One factor which Poole omitted to cover in detail was the significant impact of the last two years on the balance sheet which he said was “still robust”. Unfortunately the equity ratio has declined from 81.5% in 2010 to 51% two years later. Clearly it cannot keep declining at this rate for much longer, so the company’s board will be hoping fervently that markets will recover and livestock supply at least stabilise in the immediate future.

Poole referred in his statement to the operational upgrades to Mataura’s beef processing, venison processing at Smithfield and rendering at Lorneville which, when combined with the savings from closures, will lead to much improved efficiencies and a significantly better result for the current year. Growth of lamb sales to China, sales to Brazil, the contract with Marks & Spencer and better market outlook encourage some optimism for this year.

Longer term the sheep population is unlikely to increase to any great extent, although productivity can be expected to improve with genetics, technology and lambing percentage gains. Whether this will be enough to maintain the industry in its present configuration is doubtful, because individual processors will continue to look for efficiency gains. Silver Fern Farms is already thought to be planning a nightshift at its Gore plant to take advantage of the closure of Mataura.

Meat industry capacity adjustments and potentially company ownerships can be expected to change in response to market conditions. Nothing different from normal!

There is a new addition to the farm, in the form of a teeny tiny piglet.  We ended up trading a few of our chickens (which we are currently phasing out) for a guinea hog piglet.  It is really unbelievable just how tiny he truly is, and what a personality he has.

He will be spending the winter in the hoophouse where the tomatoes were growing.  It should be just the perfect place.  It stays nice and warm as long as it’s sunny and he has plenty of leftover tomatoes to munch on in addition to his grain and hay we have provided.  Guinea hogs used to be people’s “backyard pigs.”  They would be kept right near the house and eat any leftovers that the family would have thrown out or composted.  They stay relatively small and are known for having delicious meat and lots of lard.

We are hoping that once the winter is over with we can move Frederico out of the hoophouse for some au natural tilling with some of his friends.  Then when he gets big enough, we can try out making some of our own charcuterie.  I am trying desperately to not get too attached but it’s pretty impossible with a cute face like that.

Linking to You Capture where the theme this week is your favorite pictures of the week.

That is not the case with the goats.  Our best buck is related to our best doe (it’s his mother) and all of this year’s crop of doelings.  Since he’s such an outstanding young buck, however, we do want him to contribute his genes into our herd.  This means that today Lindsey and I had to split our goat herd in two.

The 5 doelings (Meg, Hotlips, Winnie, Gumby, and Cher) from this year’s kidding season plus Miss Priss are now in the newly-fenced South Field with all of the cattle.  We’ve put in the 2 Boer bucklings (Desmond and Tutu) to breed that group.  From those pairings we should get a nice group of 50% Boer/50% Kiko kids plus one set of 75% Boer/25% Kiko kids.

The 5 older does remain in the Front Field with Jack the alpaca and Jack the Kiko buckling (son of Miss Priss/sibling of Meg).  These pairings should yield 3 sets of 100% Kiko kids and 2 sets of 50% Boer/50% Kiko kids.

Our first due date is officially April 3, 2013!

Last year the lamb kill was down by a million, there was drought in significant livestock areas, the dollar was too high and so was the procurement price for lamb. While beef remained relatively unaffected by the hype, the price really not changing much in a year, sheep meat was a completely different story. Driven by the unholy combination of scarcity and tight shipping deadlines for the Christmas trade, the procurement price hit $8 a kilo and struggled to get down from that level.

The net result was too many buyers chasing too few lambs which were also allowed to put on too much weight. The export markets got a severe dose of indigestion and inevitably inventories built up fast on both sides of the world. All this time the NZ dollar stayed obstinately high.

We will find out in November how badly this set of circumstances affected the profit and balance sheet performance of the meat exporters, although Blue Sky’s result to the end of March gave a pretty good indication of the effect of the first six months of the season.

Farmers won’t be as unhappy as the processors and exporters because they received more for their stock than it was worth and, although the lamb price has now dropped from $150 to below $100, this is still better than in many previous years. According to Keith Cooper in Silver Fern Farms’ news release last week, he predicts the price will bottom out at about $4.80 per kilo after Christmas, equivalent to $90 for an 18.75 kg lamb. It will then rebuild to $5.80 or $109 by this time next year. Cooper has also said last year’s pricing got way out of kilter and won’t happen again this year.

Cooper’s optimism is based on favourable European buyer response in the last couple of weeks, culminating in the European food fair at SIAL in Paris last weekend. UK supermarket chains also seem to be positive about the forthcoming chilled New Zealand lamb season which starts with Christmas and continues until British lamb starts to appear in the chillers after Easter.

SFF’s news release provided an interesting, if slightly puzzling, piece of information which stated that Marks & Spencer had awarded their new contract for chilled lamb to Alliance, having dealt exclusively with SFF for five years, because “we could not offer Organic lamb to M&S.” As far as I can understand and from memory, M&S have always insisted on knowing where their lamb came from, eventually insisting on identifying the lambs’ farms of origin and traceability, but organics have never been a requirement in the past.

Cooper subsequently confirmed to me that the M&S tender specified a proportion of organic supply as part of the supply which SFF couldn’t guarantee to fulfil.

Alliance suggested that it was not required to supply certified organic lamb under its new contract, although all suppliers involved belong to the company’s Hoofprint programme which measures their carbon footprint. In fact it’s hard to see how enough organic lamb could be available, especially in the pre Christmas period, while there is little evidence the UK supermarkets are willing to pay a sufficient premium for organic supply.

In contrast beef prices appear set to continue stable, underpinned by drought conditions which have affected feed supply and cost in the USA; however any weakness in the New Zealand dollar would inevitably flow through to better livestock prices, much as meat companies might want to hang onto any bonus they receive.

I imagine meat exporters will be keen to put what was reasonably torrid 2011/12 season behind them and bed in the capacity changes they have decided on, so their new season’s performance can benefit. Sheep farmers can’t aspire to the $150 lamb, but they can expect more certainty and consistency on which to base their farm business.

Alexandra Jorge, the ILRI genebank manager, with a visitor at the the ILRI stand at KARI in Nairobi on 22 Oct 2012 (photo credit: ILRI/Paul Karaimu).

Last week (22–24 Oct 2012), I participated in an exhibition, which was organized alongside the 13^th Biennial Scientific Conference of the Kenya Agricultural Research Institute (KARI), in Nairobi. I represented the International Livestock Research Institute (ILRI) in a booth ILRI created to explain to KARI’s visitors what research ILRI undertakes with KARI on livestock forages.I really liked the opportunity to meet with so many Kenyan farmers (many KARI staff that stopped by the ILRI tent are also farmers); some of whom were Maasai livestock herders, some were dressed in a tie and suit, many were women. It was great to be able to connect with the users and clients of my research, and to do so in such an informal and lively environment.

What people want to know from ILRI?

• What and how to produce forage for dairy cows and goats stall-fed under zero-grazing systems
• How to make use of local resources to produce rations/formulas for pigs in Kenya
• How to grow forages in screen-houses
• How to grow fodder using hydroponics
• Where to obtain improved breeds of dairy cows (to produce at least 20 litres of milk daily)
• Where to obtain information about dairy goat breeds, housing, feeds and markets
• Where to obtain information about improved breeding methods (semen, embryo transfer) and animal nutrition issues
• Where to obtain information about climate change and small-scale livestock production, including mechanisms for better coping with, and adapting to, climate change
• How to improve access to markets for green grams, cowpeas and dolichos
• How to obtain information about small livestock and indigenous chickens in Kenya

Some facts about our exhibition booth:

• ILRI’s booth, which was decorated with many African artifacts, attracted some visitors who wanted to have a closer look at the artifacts rather than to hear about ILRI’s fodder science.
• Some illiterate women famers were still keen to collect written materials, which they would probably ask their children to read to them (we never know where our printed materials will end up, who will read them, who they will inspire!).
• When we choose livestock pictures with which to illustrate our publications, we should be prepared to explain to our readers how they can get hold of such types of livestock. ILRI’s corporate annual report, which we were giving away, has a handsome chicken on the cover, and I could not answer people who asked where they could get such a local chicken.

Display at the 13th Biennial Scientific Conference and Exhibition at the Kenya Agricultural Research Institute (KARI), Oct 2012 (photo credit: ILRI/Alexandra Jorge).

In visiting the many other exhibits, I was amazed to see the variety of interesting and innovative work KARI and Kenyan universities are doing with partners (many non-governmental organizations and international institutes and organizations). It was really good and innovative stuff!
Some highlights (from my point of view) about the exhibition:

• Feeding goats with leaves collected from local bushes and dried obviates the need to cut down whole forage plants, and thus helps to preserve the ecosystem.
• Sausages made from sorghum taste just like meat!
• Attractive and good-tasting cakes can be made with sweet potato flour, rice flour, Amaranthus flour and sorghum flour.
• Mini popcorn can be made from Amaranthus seeds.
• Several Kenyan seed companies are starting to fill a critical gap in the country by producing forages seeds from pigeon pea and grasses.
• The Kenyan national genebank has several skilled technicians that were trained at ILRI’s Forage Genebank, in Addis Ababa, Ethiopia.
• The University of Nairobi has developed beautiful local breeds of chicken, which they displayed along with fertilized eggs that they sold. This is a great way to reach users at any opportunity!

My favorite story:

Alex Mwandawa came to our stand (possibly attracted by our nice baskets!) and told me a story about a job niche he found in Mwatate District, where women were very poor and had few means of making a living. However, many grasses grew in the district that could be used to make baskets, and they did make some baskets, but these were of uneven and relatively poor quality. Mwandawa began to train the women in ways to produce good-quality baskets for export. He found some interested buyers in Denmark (and later on in Japan and South Africa); these became their first export clients. The women (including old women unable to move much) started to produce high-quality baskets. Mwandawa then approached village youth who were neither working nor studying (but often drinking) and showed them how to fashion leather handles and accessories that added value to the baskets the women were making. The youth liked the experience and are now enjoying earning an income. Today, they are heavily involved in the basket making and are expanding their skills. This basket-making enterprise is strongly linked to the Kenya Agricultural Productivity and Agribusiness Project (KAPAP) and meat value chains, which links producers to better markets for higher incomes. I visited their basket stand (email: amwandawa@yahoo.com and www.taitabaskets.dk) and bought some of the traditional, natural dyed, Taita baskets, which, while not cheap, are very beautiful and functional.

So, a nice story of grabbing opportunities and niches! Note that Alex Mwandawa will come to local institutions to participate in other open marketplaces, at ILRI and elsewhere. You can reach him on his cell phones: +254 724-463-791 or +154-737-944-884.

The reports show typical income patterns based on information gathered from a representative sample of farm properties.

The 2011/12 year was profitable because of favourable growing conditions which saw a 10% lift in dairy production offset the lower payout, while higher prices for sheepmeat combined with better farm productivity generated an 18% increase in cash profit. Deer farmers are enjoying a period of price stability and good productivity.

The forecast profit for the 2012/13 year is well down on last year with the exception of deer farms which is expected to be at a similar level. The 20% drop in payout expected this year will result in a 57% reduction in profit before tax from $1.98 per kg of milk solids to 87 cents. At this level farms with high debt levels will be under threat.

The situation for sheep and beef farmers is not expected to be so dire. Although market and procurement prices will be lower, and they need to be given the state of consumer demand, farm profit is budgeted to be 15% down on last year, but the second highest since 2000. Last year was exceptional and unlikely to recur in a hurry, so an average NPBT of $181,000 is quite reasonable and unusually nearly $45,000 better than the dairy farm average.

Deer farming performance differs substantially between North and South Islands, but both are budgeted to be above last year, and in the case of the South Island higher than dairy farm profit.

The analysis also notes a divergence in dairy farming methods, between low-cost, low-input farming including once a day milking and high-cost, high-input systems which might include feed pads and herd homes; these farming methods require completely different management skills.

In addition there are several challenges facing farmers, such as nutrient runoff into waterways, mandatory electronic tagging, Trading Among Farmers for dairy farmers, land use change and succession planning for sheep and beef farmers.

Since graduating from WesternIllinoisUniversity 1988, Anderson has worked in the livestock sector serving in procurement for FDL Foods in Rochelle, as promotion and producer service director for Illinois Pork Producers Association, and most recently in customer consultation and sales for Premier Pork Systems.

The livestock business developer serves an essential element of ILDG’s priorities by providing key support to both current and prospective Illinois producers by assessing their siting and feasibility potential

ILDG created the position as part of the coalition’s long-term effort to support a vibrant livestock industry in the state.   ILDG was formed in April 2003 with representatives from Illinois Beef Association, Illinois Pork Producers Association, Illinois Milk Producers Association, Illinois Corn Growers Association, Illinois Soybean Association, and Illinois Farm Bureau.

The weekend before last, once the hens were reasonably settled living together, but sleeping mostly apart, I took the second henhouse out of the run, leaving a dodge-board for the small girls to get out of sight behind if necessary.  There was a bit of stress around bedtime the first couple of nights, but the girls are now all bedding down comfortably side by side on the perches, and during the day, apart from the odd scuffle, are mixing, feeding, preening and generally getting on with happy relaxed henny-things!  Egg production is down, but then it’s well into autumn and more dark than light these days so that’s hardly surprising.

Flora continues to wear her bit – her behaviour is the last remaining problem, it’s not really her fault, I suppose, but things would be really nice and settled without her disturbing influence on the flock.  I think – though it might be wishful thinking – that the frequency and savagery of her attempted attacks on the other girls are reducing a little.  With a bit of luck, in another month or so, the headgear can come off.  In the meantime it seems to be causing her very little difficulty, she’s eating well and laying better than anyone else at the moment, giving an egg almost every day.

Midge is growing up fast, with more comb and wattle than she had when she first arrived, and a hunger to match the growth rate.  I’d love to think we’d get some eggs from her soon, though I suppose it may not be until spring.

With a bit of luck – though I hate to put it in black and white and jinx it! – things are settling nicely now.  I had in mind that things would take about a month to bed down and we’re pretty much on that target.  I really hope the girls can get on with enjoying their seasonal treats (the Halloween pumpkins are going down rather well just now!) and lay me lots of nice tasty eggs for a long time to come!

Read more from the Country Skills blog >>

… It’s a bit hilly, hillbilly.

We have 3 fields/pastures totaling around 40 acres that are relatively flat, but the aren’t all connected.  Plus, we’d like to be able to utilized more of the property for food production.  So here’s the plan, which is now underway.  Barely.

The green highlighted area above the pasture and below the old-growth forest is the area that will become the forage forest.

In the Google Earth snapshot above, the green area represents what will become the forage forest.  It’s an area that was once clear-cut and turned into pasture but over the last 15 years or so has grown up with all manner of brush – young cedars, oaks, poplars, hickories, and some brambles and berries.  When we first moved here I thought we would clear out all of that secondary growth and turn that portion of the hillside below the old-growth forest at the top of the ridge back into pasture for our ruminants.

The problem with that idea is the slope of the land:

Here’s a view of the typical slope we are talking about. It seems much steeper when you’re on site.

I understand that the previous farmers on this property had turned this portion of the farm into pasture, but I also have eyes and can see that all of the topsoil on this slope is not there anymore.  It’s probably been washed down into the creek and off to the Green River.  That slope is just not conducive to short grass.  It needs things with deep roots to hold the topsoil in place.

Those of you who know me know that I like to think about things for long periods of time before taking action.  I’ve been pondering that steep hillside for 3 years now.  I’ve thought… pasture, orchard, grapes(!), water slide into the creek, leave it alone, etc.  Then I came across a book that I think all landowners should read – J Russell Smith’s Tree Crops.  It was written in 1929 and it’s still revolutionary and ahead of its time today.  It has inspired what our hillside will become – a forage forest using native trees to hold the topsoil, provide forage and shelter for our livestock, and provide a microclimate under the canopy into which we can sow annual and perennial ground-level crops.

Here’s the idea:

1. We utilize the pigs and goats this fall to eat down some of the brush (especially the briars and brambles) and root up the thin soil a bit to help loosen the grip the bunchgrass has on the hillside.  This part is starting to happen as we speak.
2. This winter, when there’s more room to move around after the leaves are off and the goats and pigs have thinned things out a bit, I will go in there and selectively remove trees.  Most of the cedars will go away to be used as fence posts or be turned into other useful things.  Lindsey likes them to keep moths out of her sweaters.  The best oaks, hickories, and berry patches will stay and the rest of them thinned to give the best trees room and light to grow even better.
3. After the thinning, we will plant some native forage-producing trees in the gaps created by the thinning process and (for the shade-loving trees) under the canopies of the existing nut trees.  These forage trees will include things like honey locusts, mayhaws, pawpaws, persimmons, crabapples, and mulberries to complement the oaks and hickories.
4. Underneath the canopy (after the pigs have tilled the soil a little for us) we’ll plant a mix of perennials and annuals that we hope will become a permanent feature of the forest.  We’ll have to manage it carefully for the first five years, but we hope to establish clovers, orchardgrass, alfalfa, Jerusalem artichokes, squashes, berry bushes, turnips, rape, peas, sunflowers, and other little treats in the understory of the forest.
5. Over time, these planted trees and the existing trees will begin to produce forage that the goats and pigs can self-harvest.  Our plan is to combine the understory plants and the fruit- and nut-fall from the trees and actually not have to feed anything other than what the livestock can gather in the forage forest.

The hard work will come in when we plant the trees.  Kentucky’s Dept of Forestry at least makes it easy to acquire them.  You can order bundles of 100 bare root trees for around $40 from them.  Anybody wanna come help dig this winter?  The hardest part (for me anyway) will be the patience needed to wait for the trees to grow.

So when this forage forest kicks into full production (in like 10 years, *sigh*) our pigs’ year will look like this:

January-February: piglets born, everybody’s in the warm barn, adult pigs eating walnuts saved from October harvest and our extra corn
March:  pigs go into the cattle/goat hayfeeding area to churn compost for us, pigs feeding on the compost and our extra corn
April-May: pigs go onto pasture and start heading towards the forage forest, feeding on grasses & clovers on spring pasture
May-June: pigs go into the forage forest where mayhaws and mulberries are ripe and falling to the ground for them
July-August: mulberries continue to fall, blackberries ripen, ground cover crops plentiful
September: ground cover crops are still going, nut fall is starting, crabapples and pawpaws are dropping off the trees
October: nut fall is in full swing, pigs feast and fatten on hickories, acorns, and hazelnuts
November-December: persimmons and honey locusts drop their bounties, pigs are finished.  Pork is harvested, breeders return to barn.

So that’s the plan – to create a forage forest that produces our pork without any off-farm feed inputs.  With good management, I believe we can also harvest extra fruits and nuts from the forest and run our goats and poultry through the forage forest occasionally as well.  The best part of all of this is that, in addition to producing all of those wonderful products, this plan will actually stabilize that hillside, prevent erosion, shelter our animals, create a corridor to move the cattle through to the back pasture, and provide valuable timber towards retirement time for Lindsey and I.

This program, led by the International Livestock Research Institute (ILRI), aims to increase the productivity of small-scale livestock and fish systems in sustainable ways, making meat, milk and fish more available and affordable to poor consumers across the developing world. The other three centers are the WorldFish Center,Centro Internacional de Agricultura Tropical (CIAT) and International Center for Agricultural Research in the Dry Areas (ICARDA).

Blummel continues to be responsible for the PLE Team on Environmentally Efficient Production Options for Intensifying Livestock Systems. He is based in Hyderabad, India with projects in Ethiopia, Kenya and Tanzania.

The other Component Leaders are Phil Toye, (Animal Health Component), Mwai Okeyo, (Livestock and Fish Genetics Component), Iheanacho Okike, (Value Chain Development Component), An Notenbaert,(Targeting Component and Kathy Colverson, (Gender and Learning Component. They will join the Program Director Tom Randolph.

In announcing the Leadership Team, ILRI director general, Jimmy Smith said: “Within ILRI, the Component Leaders face the challenge of helping us adapt to the world of the CGIAR research programs and the reality that we will be working more and more in a matrix model. They will be responsible for ensuring that across its various research groups, ILRI delivers on time and to specification the outputs agreed with the program. This is a critical role if ILRI is to grow its research agenda within the Livestock and Fish program, and I am giving the Component Leaders my full support, empowering them to perform their leadership roles, and ask that you also make every effort to ensure their success”.

Hot on the heels of its announced intention to close its sheepmeat chain at Mataura, Alliance has come out with an offer to suppliers of $20 in November per lamb contracted before the end of October.

From the other cooperative camp Keith Cooper, CEO of SFF, last week sent an email out to suppliers which highlighted the disappointing financial result for the year ended 30 September because of the exchange rate and declining sheepmeat values in January and February not being reflected in procurement prices.

The final results will be declared in about two months when the market will be able to see just how disappointing the performance of the two companies actually was. Rumours of multi million dollar losses have been prevalent, but rumour is just what they are until we see the actual figures. There is no doubt the problem has been almost entirely with sheepmeat in spite of the exchange rate, because exporters have been far more successful at reining in beef procurement costs.

It doesn’t take an Einstein to work out that the shortage of lambs for Mataura and the procurement competition are just two aspects of the same problem. The lowest national lamb kill for 51 years at 18.6 million, 15% down on the five year average will have made it very difficult for any company to get sufficient capacity utilisation to come close to making a profit. With Alliance’s largest sheep plant outside Invercargill, Mataura just over 50 km up the road was always under threat from declining volumes.

Blue Sky Meats which balances in March presaged the 2011/12 season’s problems in its declared annual result, a pre-tax loss of $604,000 and no dividend paid. The company termed this the most disappointing result in its history and drew attention to the excessive prices paid for stock through the turn of the year, both because of the high dollar and the drought in Southland.

It will be interesting to see how successful Alliance will be in securing committed lambs from suppliers stimulated by the $20 cash advance. Keith Cooper’s reaction was to say SFF had tried it six years ago with no success because some suppliers were affronted by the implication they were short of cash and didn’t want to close out their slaughter options. He prefers to rely on the company’s suite of supply plans rather than to repeat the cash in advance offer.

In his email to suppliers Cooper sounds quite bullish about the new season’s prospects with a ‘fully configured operating platform’ and some exciting new marketing initiatives, even being bold enough to state that realistic livestock values are being established. If that is the case, it will either be because there’s enough livestock around to satisfy all processors or he is confident SFF’s overhead structure is competitive enough to guarantee filling their requirements.

Either way that is a big call in spite of the gains SFF has made in recent years, notably the closure of the Belfast sheep chain, improvements to its Finegand sheep processing and the rebuild of Te Aroha in the heart of the dairy farming Waikato/Bay of Plenty region. There are expected to be another 1.5 million lambs, but not enough to change processing dynamics much, while the market is another factor.

The meat industry is unique in that it has to compete at both ends of its supply chain. While livestock procurement has the most obvious impact on company profitability, demand from the market is also critical. Last season’s disappointments and losses have been as much about carrying too much inventory which the market couldn’t digest as the cost of the livestock to produce it.

When companies fail to manage both ends of the chain properly, things get messy. Just how messy they were last season will become clearer at the beginning of December when Alliance and Silver Fern Farms publish their results.