Ravensdown’s South Island shareholders have voted Kate Faulks to the Ravensdown board for a three-year term.

Ravensdown chair Bruce Wills said voting shareholders have made a prudent choice.

“The combination of Kate’s farming experience, foundational governance experience and her passion for our co-operative and the wider sector, means she is an ideal addition to the Ravensdown board. I am very much looking forward to her contribution.”

Faulks is an active farmer and director of Altavady Farm and Glenkerry Farm (part of a six-farm beef, dairy and forestry family farming group) and a member of the North Otago Sustainable Land Management Group Steering Board.

Since 2022,  Faulks has been the board intern of Port Otago and its subsidiary Chalmers Properties. She has developed insight into scale commercial governance, strategy development, working with senior management, engaging with regulatory shareholders (Otago Regional Council), and staffing and Health and Safety matters.

Faulks has a Master of Business Administration (First Class) and a Bachelor of Chemical and Process Engineering (Honours).

Wills thanked outgoing South Island director, Pete Moynihan, for his long service and commitment to the board.

Wills was the only candidate nominated for the North Island Director Area. As a result, there was no election for the North Island and Wills remains a director for a further three-year term.

In Focus Podcast | Sheep outlook: the future of our flock

Sheep farmers are doing it tough right now, with farmgate returns dropping back after a few good years and input costs rising. Add to that the march of pine trees across the land, and there’s talk of an existential crisis. Bryan asked AgriHQ senior analyst Mel Croad to give him the lay of the land and asked her what the sector needed to do to find prosperity again.

Ravensdown has followed Ballance Agri-Nutrients in lifting the prices on some of its fertiliser products.

Cropmaster DAP is up $120 from $1149 to $1269/tonne, urea has been raised $25 from $799 to $824/t, superphosphate is up $21from $429 to $450/t and granular ammonium sulphate is increased $24 from $499 to $523/t.

Ravensdown head of sales Gary Bowick said that while fertiliser remains more affordable than it was during the global price peaks of 2022, international demand and supply dynamics continue to drive upward trends in the nitrogen, processed phosphates and sulphur markets.  

In the co-operative’s Spring Outlook publication, chief operating officer Mike Whitty said China’s non-participation in the urea export market coupled with increased seasonal demand has led to an upward movement in nitrogen prices.

He expects prices to firm before tapering off post season as northern hemisphere and Brazil enter the market toward the fourth quarter.

“Overall the market appears to be balanced, suggesting current elevated international prices will be reflected over the New Zealand spring season.” 

Balance Agri-Nutrients lifted its prices on September 3, citing global volatility and unpredictable market conditions. 

In Focus Podcast: Full Show | 6 September 

Silver Fern Farms has partnered with Wellington-based Lynker Analytics to form a new company, Prism Earth, to help farmers better understand and capitalise on their natural vegetation and biodiversity.

Managing director of Prism Earth, Matt Lythe, tells Bryan the company will help primary producers face up to critical challenges.

A survey by Federated Farmers reveals its members are spending big money on pest control but are barely making any headway. And, as its pest control spokesperson, Richard McIntyre says having the Department of Conservation as a neighbour only makes the fight harder.

Roving reporter Neal Wallace calls in from Brussels to share insights on the first week of his Meeting the Market tour. He’s been in the United States where some of our biggest customers are, including Mars and McDonald’s. Neal says they love NZ food but there are a couple of things we need to improve if we’re to remain as a supplier of first-choice.

Global volatility and unpredictable market conditions are being blamed by Ballance Agri-Nutrients for price rises on some of its products.

In an email to farmers, the co-operative’s general manager for customers, Jason Minkhorst, cited upward global price pressure on key fertiliser products. 

“Despite a stable outlook back in May, when we last adjusted prices downwards, global DAP pricing has surged upward by over US$100/T.  This unexpected turn has forced us to replenish our local inventory at these higher costs, leading to an increase in our local DAP price.”

Urea and sulphur products are also affected by the impact of commodity prices on inventory costs, but less so than DAP, which jumped $120 a tonne to $1259. 

Nrich Urea, SustaiN, Nrich SOA have all lifted $24 a tonne to $819, $868  and $499 respectively and super has increased by $20 to $444 a tonne. 

In Focus Podcast | Rewiring rural New Zealand’s approach to power

Rocketing power prices and uncertainty about generating more are keeping many people up at night, but Mike Casey reckons farmers have everything they need to power up right now. The chief executive of Rewiring Aotearoa has transformed his cherry orchard into a solar powered operation and he reckons every farmer should do the same. 

To Mike, it’s just a sound business decision as his power bills have plummeted, the capital outlay will be repaid in five years and he’s sorted if a storm knocks out the regional power supply.

Ballance Agri-Nutrients has launched fixed-price nitrogen pilot scheme, a first for the co- operative, aimed at offering shareholders more certainty on their input costs.

In its initial market pilot phase, Ballance shareholders will be able to take advantage of the fixed price per tonne on both Nrich Urea or SustaiN, for a six-month contract period, with a minimum contract volume of 30 tonnes and a maximum contract volume of 500 tonnes.

“We’ve been listening to our shareholders who have been asking for more certainty when it comes to purchasing their urea,” said Jason Minkhorst, general manager customer at Ballance. 

“We want to offer our shareholders greater stability and confidence around their input costs and make it as easy as possible for them to plan ahead,” he said.

By offering its shareholders a fixed price, Ballance can better support its supply chain planning and ensure its shareholders have a reliable onshore supply of urea.

“As a globally traded commodity, the fluctuating price of fertiliser creates high risk for farmers, so leveraging a fixed price on some or all of their fertiliser gives them peace of mind,” said Minkhorst.

A limited volume of fertiliser will be available as part of the initial Fixed Price N market pilot, and shareholders wanting to take advantage of it will need to apply via the Ballance website.

Shareholders that are successful in their application for Fixed Price N will benefit from any downward price movements for the volume that hasn’t been fixed, though they will need to use their full contracted volume first.

“We acknowledge that Fixed Price N won’t work for all our shareholders, but we know that providing more options overall is important,” Minkhorst said. 

Launching Fixed Price N demonstrates that we are listening to our shareholders and is the first of several product and service innovations we will be announcing in the coming months.”

Applications open in early September and shareholders can apply at https://ballance.co.nz/fixed-price-nitrogen

For the second year in a row, Ballance Agri-Nutrients fertiliser co-operative will not pay a rebate to its shareholders on products they bought during the FY24 financial year.

“Facing another year of headwinds for the co-operative and its shareholders, Ballance prioritised debt reduction and passing on price and cost savings to customers through the year,” chair Duncan Coull said.

“We moved a number of times to provide affordable nutrients to our shareholders, absorbing commodity price effects internally in order to do so,” he said. 

Revenue was down a massive 24% to $929 million, reflecting lower commodity prices, and sales volumes were down 100,000 tonnes to 1.16 million tonnes.

A focus on reduced working capital saw a 37% decrease in year-end inventory, and, with the sale of Seales Winslow, enabled a $69m reduction in net debt.

The annual profit before tax was down to $17.2m, about half of the previous year, reflecting decreased margins as lower market prices were passed through to customers.

In his first year as Ballance chief executive, Kelvin Wickham said key priorities were improving operational efficiency while maintaining a strong focus on health and safety.

“We continued to invest in our assets with $69m of capital expenditure this year towards plant maintenance and upgrades to improve efficiency,” Wickham said. 

“Alongside continued investment in health and safety, this meant there wasn’t a lot left over. 

“We also had a focus on working capital and reduced inventory by 165,000t, down 37% from the prior year.”

In Focus Podcast | Power prices hit rural pockets

Skyrocketing power prices are hitting farmers and processors hard. Senior reporter Richard Rennie says it looks like a challenge that will be here for some time as there’s no obvious fix on the horizon.

Meat and dairy processors, orchardists and irrigators are all grappling with the problem and many are looking for efficiencies and ways to trim costs in other areas.

It could be another year before fertiliser sales recover – and even then, Ravensdown believes, demand will be lower. It is realigning its production capacity accordingly.

The co-operative’s chief executive, Garry Diack, thinks a combination of sheep and beef being likely to take longer to recover, land use change, the greater use of technology, and competition mean volumes will fall.

In the short term he expects it will be a year before unfavourable exchange and interest rates and on-farm inflation ease and demand and confidence recover.

The company has started discussions with staff on a proposal to close its Dunedin manufacturing works at Ravensbourne, retaining it as a bulk store and distribution site.

“It is unlikely volumes will get back to 1.1-1.2 million tonnes for us,” Diack said.

Ravensdown has manufacture capacity for 700,000-800,000 tonnes of superphosphate a year at its three plants – Napier, Christchurch and Dunedin – but needs only 400,000t split between a plant in each island.

“It’s an efficiency step in a low-volume market,” he said.

The Ravensbourne plant requires renewal of its emissions consent and although the Hornby plant is surrounded by homes and businesses, Diack said it is closer to more diverse fertiliser markets.

Ravensdown is also looking at whether ownership of six lime quarries is the best use of shareholders’ capital.

Diack said it could buy lime from a manufacturer, as it already does with urea.  The co-operative made these announcements as part of its annual results presentation, in which is reported an operating surplus of $27.4 million from continuing operations and before impairments and tax, which compares to $5.9m in 2022-23.

The net profit after tax from continuing operations was $2.8m ($2.9m).

Sales were 891,000t, down 0.4% compared to the previous year and significantly lower than 2021-22 when Ravensdown had sales of 1.2 million tonnes.

These lower sales were reflected in a revenue drop of $186m, to $757m, ($977.5m in 2022-23).

Inventories at year-in were $57m lower at $150m, debt was $76m, down 41%, and operating costs were flat.

Chair Bruce Wills said balance sheet equity has lifted to almost 80%, but the level of profitability in an environment of low demand and sales means the co-operative cannot pay a shareholder rebate this year.

In Focus Podcast | Meat processors take stock as flock numbers fall

Senior reporter Neal Wallace says there are big challenges ahead for the red meat sector as it grapples with lower stock numbers and over-capacity. One processor in Oamaru has already laid off staff and Neal says there may be more rationalisation to come. 

He also discusses the ongoing push to get more rural GPs trained and working in our communities.

Springtime marks the timely opening of Ravensdown’s re-commissioned Napier works site after the twin blows of a fire in late 2022 and significant flooding from Cyclone Gabrielle last February.

The multimillion-dollar rebuild and upgrade add another 30-plus years to the Awatoto site and represent a significant leap in technology and environmental improvements over the old plant, said works manager Tony Gray.

“A lot of the investment is commensurate with assets that have had their life extended. It also comes after we received a 35-year operating consent from Hawke’s Bay Regional Council with conditions around discharge to air and water.”
The two main projects on the site have been a new acidulation plant for the formulation of phosphate rock into superphosphate and a new atmospheric scrubber system that removes by-gases from the acidulation process before they can be released into the atmosphere.

“This will result in lower discharges of fluorine in particular.”

The scrubbing project has also combined three separate units into one, putting the plant on “world best” standards for environmental discharge and management.

Gray said other than the move from three scrubbing towers to one, there will be little else from the upgrade outwardly visible to Hawke’s Bay residents.

In response to the fire damage in late 2022 the company as also built a new manufacturing building, removing temporary measures put in place to keep the plant operating post-fire that year, just prior to Gabrielle forcing the plant to shut temporarily.

Along with the Pan Pac plant at Whirinaki north of Napier, which was also hit hard by Gabrielle, the two operators employ about 600 staff between them.

Rumours had circulated in the industry that Ravensdown’s Awatoto site was going to shut down for good. 

But Gray said the investment was a definitive nod to the co-operative’s commitment to the region, with plant destined to deliver greater efficiencies for its farmer shareholders at a time when every cent saved counts.

Over the next few weeks on-site staff will be commissioning the plant’s processing stages with a view to being ready for processing spring fertiliser orders.

Upstart Australia-based fertiliser company Marnco has moved to make changes to its product’s name and compensate farmers after a rocky start to its entry into the New Zealand market.

The company entered NZ late in autumn with a shipload of largely super phosphate, aiming to prise some market share from the two big incumbent co-operatives Ballance and Ravensdown.

However, it found itself drawing fire from the Fertiliser Association of NZ (FANZ). 

The association moved quickly to seek a court injunction against Marnco for selling what it said was not valid superphosphate. 

This was on the grounds that the product failed to meet the 8% standard set for super by the FertMark code. Marnco’s was testing at 7.4% phosphate and was also claimed to be lower in solubility than what the FertMark standard was.

Marnco managing director Mark Been said the company has acknowledged the discrepancy and had moved to rename its fertiliser “SulPhos”.

Meantime the company also continued to investigate the discrepancy between its content and the targeted content.

“And every farmer customer who purchased product off us has been compensated for it, with us paying the difference in the content, plus any re-application costs. The feedback we have received is that everyone is happy with this.”

Acknowledging that it was not a “fun entry” to the NZ market, Been said he is confident Marnco’s actions should mean the impending court case is no longer necessary.

“We can hold our heads high that we have addressed the issue. We have owned the issue, customers have said they are happy with the outcome. We also have to remember that FANZ is not a legal entity or regulator.”
Dr Vera Power, chief executive of FANZ, said it is no longer necessary to proceed with legal action against Marnco in light of the changes the company has made.

“Our action was about the product, not the company. We were never in opposition to Marnco selling or promoting its product in NZ. Our concerns related to any representations made about the fertiliser, especially when these are not consistent with the FertMark code.”

Been said he was conscious of the need to “choose your battles” and hoped to see business start to take off come springtime.

Meantime he attributed the significant drops in fertiliser prices farmers have witnessed in the last few weeks to his company’s presence in NZ.

“Urea started out at $895 a tonne, we put it at $850 at King’s Birthday weekend, then Ballance came down to $795, we went to $787, and Ravensdown to $799. We have already seen $100/tonne come off, and $70/t on sulphate of ammonia.”

He said the irony is that prices are tumbling just as the global market is starting to head north again in prices. China has put an export ban on its nitrogen products, tightening supply again.

Been said Marnco is still considering whether it will join FANZ.

Arable growers are investigating alternative sources of nitrogen to reduce their crop reliance on synthetic nitrogen.

Hefty increases in the price of synthetic nitrogen, coupled with the likely introduction of pricing for nitrogen fertiliser-related nitrous oxide emissions, has led farmer groups in Canterbury and Waikato to look at different ways to supply nitrogen to their crops. 

The Alternative N groups were formed as part of the Foundation for Arable Research (FAR) Growers Leading Change (GLC) programme.

The Canterbury group focused on cereal crops while the Waikato group concentrated on maize. 

In the 2022-23 season, the Canterbury group tested a seaweed-based product containing a range of amino acids, applied in combination with reduced applications of synthetic nitrogen, to gauge whether this would provide the same yield as a standard nitrogen application. 

The product was tried in autumn-sown wheat in seven paddocks over six farms. 

The on-farm experiments are known as try-outs, rather than trials, as they are not fully scientifically replicated, but still provide a useful indicator for growers. 

Canterbury GLC Alternative N group facilitator Donna Lill said the results showed no significant differences in yield between the standard and biological treatment. 

However, greenhouse gas emissions, a key driver for the project, were lower with the biological treatment because of the 30% reduction in urea. 

Growers are now experimenting with nitrogen-fixing faba beans to see how much nitrogen these provide cereal crops. 

Faba beans have been planted as either a cover crop that was terminated when the autumn cereal was sown, or together with the autumn cereal as intercropping. 

They are also investigating the nitrogen use efficiency of three different types of urea application on a cereal crop – liquid to soil, granular and foliar. 

GLC group member Brent Austin, who farms at Lismore, near Ashburton, is growing faba beans both as a short-term autumn cover crop and with wheat and barley, to gauge what nutrients these provide to the growing crop. 

He has applied liquid nitrogen on all his crops for the past four years. 

While he would have potentially tried these things anyway, he said the amount of soil testing undertaken with being part of a GLC group is a bonus. 

The group also generates a lot more useful data than an individual farmer can do alone. 

“It’s also going and seeing other farmers’ try-outs and what they are doing. Talking to other farmers involved with the group is also important.” 

In Waikato, growers are testing alternative nitrogen products, chicken manure, dairy effluent, composted dairy effluent and winter legumes, in combination with synthetic nitrogen to determine their impacts on maize yield.

Ravensdown has followed rival co-operative Ballance Agri-Nutrients in reducing prices on its superphosphate and urea products.

Urea is back $100 to $799, while the price of superphosphate has been dropped by $45 to $429.

“While international commodity prices remain relatively volatile and some prices appear to be firming, we understand the need to meet the market and offer competitive prices for our customers,” Ravensdown chief customer Officer Gary Bowick said.

Potash is down $176 to $799, DAP is back $40 to $1149, N-Protect is down $100 to $848, GAS has fallen $36 to $499, Serpentine Super is back $35 to $439 and Sulphur 90 has been reduced by $60 to $690.

In its latest Winter Market Outlook, chief operating officer Mike Whitty said there has not been any significant flow-on effect for fertiliser prices despite of the escalation of recent events in the Middle East.

“General opinion at the annual International Fertiliser Conference, which I attended in Singapore in May, supported our view that prices continue to be a ‘mixed bag’,” he said. 

“The good news is that affordability internationally is looking relatively positive, particularly when compared to the previous high prices experienced in 2022.”

He said there was general consensus at the conference that nitrogen prices, while going through a recent softening, are now heading northwards.

“The expectation for DAP, on the other hand, is for continued softness in the short-term with Chinese supply (which will end in September) likely resulting in a rebound.

“Unfortunately, in this tight economic environment, there appears to be a level of uncertainty around the market for low carbon products and the economics around product developments. We’ll maintain a keen eye on what happens with urea and DAP over our winter months as we move into our procurement period.”