Silver Fern Farms money raising a thinly veiled glossover of Richmond fiasco

You have to feel for SFF shareholders. Now CEO Keith Cooper is asking them to stump up with $128 million, apparently in the name of forward progress in the UK consumer market.

Their hard fought co-operative, designed to protect their interests is fast becoming what they term a 'hybrid co-operative'. The translation for that is a co-operative moving away from what it was designed for and if this share restructuring goes ahead you would have to assume that it is only a matter of time before outside shareholders gain some status in the company, even if Cooper is promising that won't happen now.

But why do the restructuring in the first place?

Overcommitment.

First SFF tries to wrangle the money out of PGG Wrightson, now it's talking all this lovely juvely touchy feely rubbish about needing to be a 'fully integrated market-led company'. Come on, it all looks a bit desperate and more than a little co-incidental in the light of the lack of cash injection from the failed merger with PGG.

Wouldn't it be fantastic if the PR doctors just for once let go of the spin and spoke the honest truth. In SFF's case the statement would read something like this:
"SFF would like to advise that it is charging farmers an extra $128 million in shares and will be trying to find outside investors as well, due to the balls up it made several years ago when those in charge decided that SFF should buy Richmond at all costs. Because of this SFF has been in the poo financially for some time and as you know PGG Wrightson didn't end up joining the party so you, our loyal shareholders will have to foot the bill. But don't worry...we won't sell your co-operative rights down the road just yet...after all farmers are our business...and consumers...flashy UK consumers..."

Farmgirl hopes that SFF farmer shareholders voice their concerns over the restructuring as it is more than a little flawed.

It's funny isn't it how CEO's and directors are paid to go into a company and grow the business and make it financially stronger, yet end up making it bigger and weaker...think US companies answering to DC at the moment. The NZ example in agriculture is not as far apart from that as we might like to think...

Coming down south like heading into a different land

I am fortunate enough to be in Southland for two days and can't help being fascinated by the woolly little furry white animals I see on the roadsides looking nourished, healthy and anything but under threat.
Sheep were part of my upbringing but living in Canterbury and growing crops and being surrounded by dairy farmers makes you forget about that Southern part of your life but it was reassuring to see the quality and quantity of stock coming down yesterday.
A friend asked me last night if I thought that sheep would ever return to some of these dairy farms in the province and honestly I think this is an improbability.
However, on many South Otago farms there lies a history that may prove otherwise. Dairying and sheep farming have always been cyclical in the area with many farms still housing derelict milk factories to prove that.
So never say never. It has been dairying land before and it has been sheep farming land before. Undoubtedly though moving back to the strong sheep farming history would be highly unlikely when you take into account the on farm investment on dairy farms these days and the high capital costs.
But if sheep farming does become a marginal commodity it could lead to an increase in demand particularly if wool was to come in fashion again. One can only wonder at those heyday years of the 50s my father in law talks about when the wool cheque more than balanced the books.
In any case it was somehow reassuring to see that not all sheep farmers are bowing out. It just wouldn't seem right if we didn't have that scenery anymore.

Key challenged to shear sheep

And he's coming over the top of the back now, gently does it. Oh dear, he's left a layer of wool on, a softer coat, but now he's back, he's plunging that handpiece over the sheep's belly, mind the nipples John!

But wait he's showing marvelous adaptation to the skill of shearing, he's getting into his stride now, he's tucked that sheep tight between his legs and he's showing it who's boss.

Down he goes, the last blows, then flick on to it's feet, a kick on the backside and a note pushed between the sheep's teeth.

"There," he says. "He's all ready. Finely shorn, and now with super speed...please applaud your Government's state of the art new investment in rural communication...the messenger sheep."

Live sheep exports could create Kiwi consumer backlash

The New Zealand Herald asked readers what they thought about the prospect of resuming live sheep exports with some worrying responses.

The overwhelming sentiment was that the trade was deplorable with many saying they would protest by not buying New Zealand lamb.

As said in previous posts, even if the reality is far different from what Sue Kedgely is promising it will be a difficult business to push in the current consumer market place where top chefs such as Jamie Oliver preach daily on welfare for animals.

It seems no matter what stringent conditions MAF comes up with there will be a large majority of people bent on destroying the trade.

Here's a sample of some of the comments:

"I will stop buying lamb in protest if this takes off!"

"It's inexcusably and unnecessarily cruel.It also destroys jobs and businesses for New Zealanders.A return to live sheep exports signals a triumph of greed over not only the value of humane treatment of animals but also the expectation that our first priority is to maintaining the maximum benefit of our efforts going to our own people.It creates one more field in which we are seen to have lesser expertise than the rest of the world and worse, lesser morality and standards of decency.This suggestion bears a remarkable similarity to Fonterra and the melamine scandal which also impacted both human beings and animals: a morality based only on convenience and profit to a select few at a cost of suffering to the majority - human or animal.It seems the tide in the world has turned. No longer is humanity progressing toward higher principles (however despised 'colonialism' is in modern times) but returning to the lowest common denominator to be found in the characteristics of our trading partners."

"Yes to live sheep exports provided they are flown there in economy class with flight attendant service."

Increasing Meat and Wool levy a must to keep us in the game

So increases in input costs on farm are not such a welcome addition at the moment which may cause Meat and Wool New Zealand some problems in seeking to double the sheep and beef levies.

The proposal is for sheep levies to rise from 40c to between 60 and 80c, beef cattle levies to rise from $3.60 to $5.50 and $6 a head while the wool levy would fall from 5.25c to 5c per kilogram.

It would be easy to stall the increase (the first to be asked for since 2004) and adopt a wait and see approach to the global economic problems but this would only end up disadvantaging the entire industry.

Meat and Wool have been doing an admirable job - and a much needed one in promoting our meat into overseas markets with an independent report confirming that we are making money on our investment.

And like any business, (think Fonterra or PGG Wrightson) to grow we need more investment.

The August vote should be a no-brainer and hopefully farmers' will avoid all the negativity coming out of the economy and not shut the only sure fire way to make more money - investment, investment, investment.

India free trade negotiations a ray of hope for agriculture

Forget the recession - the Government's announcement of a possible free trade deal with India over the weekend was the best news to hit our livestock industry in 18 months.

India has a growing middle class, with money in pockets, and this bodes well for our lamb markets.

Okay, so negotiations are expected to take a number of years but it all looks hopeful and in these current conditions the fact that we are opening talks with the world's second largest nation is a huge coup for the Government.

Currently we export very little agricultural products as there are high tariffs on sheep meat. Even so we export $360 million each year, and import $284 million in return. Coke, coal, logs and wool are our main exports into the country.

Think then what free access to India's growing rich could mean and as Federated Farmers president Don Nicolson commented, "sheep meat is widely consumed and unaffected by religious dietary requirements where meat is consumed."

Might be time to buy in that breeding stock again and celebrate the positivity of this move.

Here's to free trade and lamb curries!