Early Bird I Monday June 17th 2024

Labour leader rebuilds conversations with farmers at Fieldays, long term optimism despite a forecast dip on primary industry exports, and innovators scoop awards at Fieldays.  Welcome to Proud Country's Early Bird - The top things you need to know that impact rural New Zealand delivered to you by 5am, because who doesn’t need better chat beyond the weather! Labour leader rebuilds conversations with farmers at Fieldays Morale at Fieldays was significantly boosted by the Government's recent decision to exclude agriculture from the Emissions Trading Scheme (ETS), a move that has been well-received by many in the sector.  The annual event, a fixture on the agricultural calendar, saw attendance from political parties across the spectrum, contributing to a vibrant and engaging atmosphere. For opposition leader Chris Hipkins, it's back to the drawing board. In his address to the Rural Advocacy Hub, Hipkins acknowledged that by the end of Labour's time in office, the relationship with farmers had deteriorated.  As Labour enters a period of opposition, Hipkins emphasised the need to listen and rebuild relationships. To improve dialogue between Labour and the primary sector, Hipkins announced a new initiative in partnership with Federated Farmers called The Red Bands.  The initiative aims to bridge the understanding gap between urban New Zealanders and the agricultural sector. Hipkins noted that many people have limited insight into daily farm operations and the advancements in modern farming technology.  Although there are disagreements between farmers and Labour, Hipkins appreciated the open and engaging discussions at Fieldays. He hopes for constructive dialogue in the coming years, emphasising the importance of national interests and trade.  Long term optimism despite a forecast dip on primary industry exports Lower prices for some of New Zealand's key commodities are leading to a projected decline in primary industry export revenue. According to the Ministry of Primary Industries' latest Situation and Outlook for the Primary Industries report, food and fibre export revenue is expected to fall by 5 percent to $54.6 billion in the year to June, compared to the previous year's record of $57.4 billion. The dairy sector is forecasted to experience a significant revenue decline, with earnings expected to drop by 7 percent to $24.2 billion by the end of June, primarily due to lower global dairy prices. Similarly, meat and wool exports are anticipated to fall by 6 percent to $11.4 billion, driven by declining export prices. Sheep meat prices, in particular, have struggled due to reduced consumer demand combined with increased global red meat production. Additionally, the forestry sector is projected to see a 7 percent decrease in export revenue, falling to $5.9 billion due to lower production and demand for processed wood products. Despite these challenges, there are some bright spots in the sector. Seafood export revenue is forecasted to rise by 5 percent, reaching $2.2 billion, driven by high export prices, strong demand, and limited global supply. The arable sector is expected to experience significant growth, with export revenue increasing by 12 percent to $310 million, thanks to favourable growing conditions and good harvests. Honey export revenue is projected to grow by 11 percent to $420 million, boosted by higher export prices and increased volumes of monofloral mānuka honey. MPI Director General Ray Smith says this cyclical correction reflects slower global growth, especially in key export markets like China, but the long-term outlook is optimistic with sustained growth expected. New report shows agriculture productivity drops Difficult times for farmers are reflected in productivity issues for rural servicing companies, according to an analysis of small business accounts by Xero. The Xero Small Business Insights (XSBI) series revealed that labour productivity in the agriculture sector fell by 12.1% in 2023, measured in seasonally adjusted constant prices. This decline is significant, considering productivity is assessed based on sales per hour worked and sales per employee. The agriculture sector in this context includes farming entities and rural servicing companies that pay wages, excluding sole traders or owner-operators. Stats NZ reported that nearly all businesses in the agriculture sector are small and medium-sized, with fewer than 50 employees. Out of the 60,000 total, approximately 17,500 employ staff.  The 12.1% fall in productivity in New Zealand's agriculture sector was the largest decline among the eight sectors studied. The regions most affected were Bay of Plenty, Canterbury, and Waikato. Despite this decline, the agriculture sector had a productivity rate of $106 per hour worked, compared to the national average of $102. The XSBI report highlighted the increasing data and technology intensity in farming, as farmers face challenges such as reducing climate impact and maximising capacity to feed a growing global population. The report praised agriculture as an industry that has embraced productivity-boosting investments in tools to amplify work. Xero attributed the decline in productivity to several factors, including lower commodity prices and strong job growth, which averaged 5.5% each month year on year. Government has new plan for forestry sector Forestry Minister Todd McClay has launched the Government’s plan to restore certainty and confidence in the forestry and wood processing sector. The Government aims to drive investment to unlock the industry’s economic growth potential, which is crucial for rebuilding New Zealand’s economy, boosting GDP, and providing regional jobs in a highly productive sector. A package of initiatives will be introduced during this parliamentary term to support industry growth and deliver positive outcomes across the forestry and wood processing value chain.  This includes increasing onshore wood processing, opening and improving access to trading markets, supporting sensible planting, easing regulations, enabling innovative wood product development, adjusting investment settings, and supporting New Zealand’s climate change goals. The Government is also working to expand access to overseas markets for high-quality wood products and address non-tariff barriers to provide market certainty for wood processors to expand and innovate. The Government is considering the balance required for New Zealand’s wider forestry system to ensure a sufficient pipeline of logs for domestic wood processing and encourage the planting of new trees on suitable land to meet international climate change commitments. An independent review of the operational costs of the forestry component in the ETS was launched earlier this year, followed by a separate assessment of cost recovery fees for the 2024/25 financial year to ensure the ETS is cost-effective and efficient for participants.  Additionally, the Government is working to remove unnecessary regulatory burdens on forest businesses, including repealing legislation requiring the registration of log traders and forestry advisers to reduce unnecessary costs on forest businesses Innovators scoop awards at Fieldays.  A sustainable merino wool replacement for rockwool and peat used in greenhouse growing has won the Prototype Award at the National Fieldays Innovation Awards.  The Auckland company Fleecegrow was praised by judges for converting a waste product into something valuable.  Christchurch’s KiwiFibre won the Early-Stage Award with its regenerative composite textile made from Harakeke fibre. This textile can replace or complement conventional carbon fibre and fibreglass materials in high-performance applications. Hyundai and KiwiFibre revealed New Zealand rally driver Hayden Paddon's brand-new electric rally car, using KiwiFibre for the front and rear bumpers and roof. Auckland's WoolAid won the Growth & Scale Award for 2024. Its hyper-fine merino wool plaster impressed the judges with its strong ambition to scale. The breathable plaster can absorb large quantities of moisture, moving it away to evaporate into the open air and biodegrade in the soil in approximately four months. New Zealand National Fieldays Society program manager Steve Chappell says the Fieldays Innovation Awards provide a platform for creative problem solvers to launch, test, and promote their ideas to a large group of their ideal target market.  After a record number of entries, 62 participants shared their ideas and products in the Fieldays Innovation Hub, and the five shortlisted finalists in each category had their entries judged by a panel of 15 sector experts.   See omnystudio.com/listener for privacy information.