Angus yearling bulls sold readily during the first half of September and the spring bull sale season.

Stokman Angus in Waikite Valley, Central Plateau, made a top price of $30,000 for Stokman U295, bought by McFadzean Cattle Company in Wairarapa.

McFadzean also paid $15,000 for a Stokman bull, as did Taimate Angus, Marlborough.

Despite some access worries with highway repairs, Stokman had a complete clearance of 114 yearling bulls with an average price of $5337 and also sold 40 heifers in the price rage $1650 to $2100. 

Kayjay Angus, Masterton, made a top price of $24,500 for Kayjay Mountain Man U758, paid by Shian Angus, Taumarunui.

Kayjay Mountain Man U722 sold to Turiroa Angus for $15,000.

Stud principal Rod Kjestrup said these are the first two sons sold at auction from $92,500 sire Meadowslea Mountain Man 705, born in 2020 and bought in 2022 for a season record price.

Kayjay sold 17 out of 17 in the catalogue and averaged $8541, more than twice that of last year.

McFadzean Cattle Company sold its Meatmaker and Super Angus yearling bulls to a top price of $16,000, paid by long-time supporters Luce and George Williams, Grassendale Genetics, Masterton.

A total of 28 bulls sold from 31 offered in the two composite breeds made an average price of $7313, well in advance of last year’s $4220.

McFadzean’s Cruizy Calves bulls sold 75 out of 79 offered with an average of $3820.

At the top price of $11,000, lot 36 sold to Patrick and Micheal Beech, Bullock Hills Station and lot 50 drew the same price from Logan Evans, Mount Peel Station, both returning purchasers.

Turihaua Angus, Gisborne, sold all 25 yearling bulls for an average $7908 and all went to commercial farms, including $10,500 made twice.

Waitangi Angus, Bay of Islands, sold 64 out of 89 and averaged $4050, with a top of $9500 paid by Waitangi Terraces, Gisborne.

There were also three transfers to Hingaia Angus, Gisborne.

Mahuta Herefords, Tuakau, had a full clearance of 64 bulls and a top price of $11,000 paid by Otapawa Herefords.

The average for the sale was $3803.

Kairaumati Herefords, Turua, sold 29 two-year bulls averaging $3517 and 19 yearlings averaging $2800.

In Taranaki service bulls sold quickly and regional livestock manager Steve Quinnell reported the prices for NZ Farmers Livestock.

Tawanui sold 70 two-year Herefords averaging $3460 and 40 two-year Angus bulls averaging $2860

Penny Lane sold 100 Hereford two-year-old averaging $2950, 20 Angus averaging $2930 and 100 Jersey bulls averaging $2525.

Burmeister sold 60 high BW Jersey yearling bulls averaging $1900.

Shadow Downs Herefords sold 12 yearling bulls and 48 two-year bulls averaging $3210 with a top of $6200.

Puketahi sold 30 two-year Herefords averaging $3360, 20 two-year Angus averaging $2860, 10 two- and three-year Murray Greys averaging $2700 and 50 two-year Jerseys averaging $2360.

Megaw sold 30 two-year Herefords averaging $2950, 25 two-year Angus averaging $2500, 20 two-year Friesians averaging $2300, 25 two-year Ayrshires averaging $2230, 170 two-year Jerseys averaging $2350 and 15 18-month-olds averaging $1950.

Synlait milk shareholders have passed three resolutions securing the financial future of the dairy processor and making Bright Dairy of Shanghai a 65% majority owner.

The special meeting was conducted online and at the company’s main processing plant and head office in Dunsandel, Canterbury.

After addresses by chair George Adams and Bright director Julia Zhu, shareholders voted on two ordinary resolutions and one special resolution.

When the proxies were declared after the voting procedure, it was clear that 50%-plus had already been achieved for the ordinary resolutions and 75%-plus for the special resolution on constitutional changes.

When all votes were cast and declared, Resolution 1 attracted 94% approval, Resolution 2 96% and Special Resolution 1 97%.

Under the first resolution Bright Dairy will pay 60c a share for 308 million additional shares, raising $185 million of new capital to repay bond holders and recapitalise Synlait.

The second resolution approved issuing 76 million new shares to major customer and substantial shareholder a2 Milk company at 43c so that a2 maintains its 20% ownership stake.

Bright could not vote on Resolution 1 and a2 Milk could not vote on Resolution 2.

The special resolution for constitutional changes was necessary because Bright Dairy has now become a majority shareholder with 65% equity.

The proxies favoured 95% of votes cast and 77% of issued shares, prior to the meeting votes being declared.

Bright has been the largest shareholder for nearly 15 years and is also a majority owner of Silver Fern Farms meat processor and exporter.

“Bright has and is continuing to play a lifeline role for Synlait,” Adams said.

Zhu reiterated Bright’s support for Synlait and what she called the best dairy farmers and the best dairy processor.

The Bright Group has annual revenue of US$19 billion ($30bn) and international operations provide 30% of that revenue. 

More than 3000 of Fonterra’s 8000 shareholding farms have now moved away from the share standard of one share for every kilogram of milksolids supplied in one season.

That number has risen by 400 farms over the past 10 months.

Only 18 months after the adoption of flexible shareholding, Fonterra has reported that 552 farms have 33% of their share standard or less.

They tend to be new to Fonterra supply and/or farm ownership and are taking advantage of the six years allowed to share up and reach a minimum holding of 33%.

A further 1034 hold between 33% and 79% of their entitlement and 1422 have more than 120% of their standard.

Under the new rules, farmers may own up to four times their share standard as a further investment in their co-operative.

The bell curve of distribution published in the report shows a smattering of holdings at all points between 200% and 400%.

The Fonterra supply share price has risen 60% over the past 10 months, from $2.20 to $3.50, suggesting more farmers have confidence in the company’s restored profitability.

That included a sharp 70c rise in mid-May when the company announced its intention to divest the consumer businesses, raising the possibility that up to $2 a share cash distribution may result.

The average-sized Fonterra farm has a supply standard of 150,000 shares worth $525,000 currently.

Before its annual results for FY24 are announced next Wednesday, Fonterra has already signalled that it will report earnings approaching 70c a share, from which it may pay 40-60% as a full-year dividend, minus 15c a share interim dividend already paid.

The flexibility report says more than 10% of shares are owned by ceased shareholders or permitted transferees.

They have up to 15 years to sell shares, and to remain as investors in the meantime.

That leaves 5129 shareholding farms in middle of the bell curve, owning between 80% and 120% of their share standards.

They collectively own 949 million shares, about 59% of the total shares issued (1.609 billion).

Before flexibility was introduced, that category would have been a substantial majority of all supply farms.

Fonterra has argued that it needs flexibility to be able to maintain its 80% share of total New Zealand milk collected in competition with other processors who do not have share requirements.

At August 30, Fonterra was within the specified thresholds for three flexible shareholding metrics, or upper limits.

The total shareholding above or below the share standard was 13.25%, against a threshold of 15%.

The 10% of shares held by ceased or permitted shareholders is below the 25% threshold.

The shares held by the Fonterra Shareholders Fund (FSF) was 6.67%, below the 10% threshold.

The thresholds are written into the constitution to ensure that Fonterra co-operative remains farmer-owned and controlled.

The report, issued on September 2, also showed that farmers must buy about 24 million shares over the next six years to reach their minimum compliances.

A total of 163 million shares must be sold by 2036-37.

The long retirement period guards against the share market being swamped by farmers having to sell shares promptly.

Dairy farmers looking for insights to Global Dairy Trade prices and their effect on milk price forecasts are being offered a new report by those in the know and with figures at their fingertips.

It is the SGX-NZX Dairy Derivatives Pre-GDT Digest, published bi-monthly about 24 hours before each crucial GDT event.

The report provides a comprehensive analysis of key market elements with the aim of helping readers make informed decisions in the trade of milk and dairy derivatives, futures and options.

The Pre-GDT Digest covers futures prices, cross-commodity exchanges from SGX-NZX, EEX, and CME, along with a detailed view of NZX’s stream return forecast and volatility indicators. 

“This bi-monthly report can help readers with insights to assist in understanding the dairy futures market,” NZX Dairy Data and Insights team leader Cristina Alvarado said.

“We estimate that almost 25% of NZ’s milk production (at a farmer and processor level) is now utilising some form of price risk management tool but we are a long way behind the use by farmers of these tools in the United States and Europe.”

Alvarado’s team at NZX monitors all aspects of global dairy markets and their NZ implications, writing nine regular reports and custom reports on request.

Former Fonterra senior adviser Alvarado is the commercial manager for services and subscriptions, assisted by dairy analysts Rosalind Crickett and Lewis Hoggard.

Venezuelan-born Alvarado has a BA and LLB plus a Master’s in international business (Hons) from the University of Auckland.

From a rural background, Crickett graduated from the University of Waikato with a BMS in agribusiness and strategic management, and Hoggard graduated from Auckland with a BCom in finance and economics.

Their work timetables are calendar driven and dominated by the fortnightly GDT Trading Events and alternating Pulse auctions, including pre- and post-market reports, along with the cycle of daily, weekly, fortnightly and monthly reports (see below).

NZX has one-third ownership of the GDT platform with Fonterra and the European Energy Exchange (EEX).

About 30%, or more than 6000, NZX report users/subscribers are outside of NZ in more than 25 countries as market participants and observers seek information about our dominant dairy industry.

Farmers, processors, traders, brokers, buyers  and financial services subscribe to bundles of up to six regular reports, along with access to market data and historical information going back 25 years.

Dairy farmers may find most useful these six relevant reports: the Daily Dairy Update, Dairy Insight, Grain and Feed Insight, NZ Pasture Growth Index (PGI), Milk Production Predictor and the latest, Pre-GDT Digest.

The Milk Production Predictor goes back to farm level with the Farmgate Milk Price Calculator, updated two days after every GDT event, with a forecast view into the current season and the next.

Farmers can input their own figures to generate a personalised price forecast.

The PGI weekly reports regionally and nationally and the data is updated daily, with access to a forecasting tool on pasture growth expectations.

Farmers use Dairy Insight to understand the drivers of their milk price and forecasts for the coming seasons, and benchmark feed input costs.

The Grain & Feed Insight is a practical tool to assist in making profitable decisions as a buyer or seller of feed grains.

It has international and national prices and commentary on market trends.

Growers who are members of the Foundation for Arable Research (FAR) receive a subscription discount.

NZX has a group of farmers who are partners, receiving free or discounted subscriptions in return for regular conversations with NZX analysts to better understand regional differences in factors leading to production.

NZX holds seminars for farmers and other industry participants on the education of dairy derivatives as risk management tools, guiding but not providing financial advice.

It is also an organiser of the annual SGX-NZX Global Dairy Seminar, to be held this year, October 7 to 9 in Singapore.

It is the cornerstone event for the dairy industry to convene, share perspectives and stay informed on the latest market developments with international stakeholders across Asia, Oceania, Europe and the Americas.

The Dairy Trade Statistics reports provide insights into exports and import statistics of dairy commodity figures from Australia, the United States, European Union, Argentina and China. 

The NZX Dairy team has taken over the release of New Zealand’s national milk production, previously published by the Dairy Companies Association of NZ, which is available to the public on its website and by email distribution list upon request.

NZX Data and Insights also undertakes special surveys and reports on request, seeking to bring better understanding of topics such as a region’s milk production or dairy market country.

Alvarado said all new accounts have free trial periods and that customers can select to bundle different reports to suit their needs and budgets.

Free trial: NZX, New Zealand’s Exchange

Global Dairy Seminar: SGX-NZX Global Dairy Seminar 2024 – Singapore Exchange (SGX)

NZX Dairy Team Products

• Dairy Update: Incorporates the latest relevant news from local and global dairy markets. It includes daily, weekly, GDT forecast and GDT results reports.

• Pre-GDT Dairy Derivatives Digest: Bi-monthly report covers futures prices, cross-commodity exchanges, a view of NZX’s stream return forecast and volatility indicators to help readers make informed decisions in the trade of milk and dairy derivatives futures/options.

• Monthly Dairy Report: In-depth analysis on key factors influencing the dairy industry, both internationally and within NZ.

•  Global Dairy Snapshot: Weekly NZX survey prices for WMP, SMP, cheddar, butter, casein, and AMF. It also contains prices from across the globe.

• Dairy Trade Statistics: Monthly export data for the main dairy commodities for NZ, Australia, US, EU and Argentina. This subscription includes access to use of raw data.

• NZ Pasture Growth Index (PGI): Weekly report on this topic and access to the PGI tool.

• Milk Production Predictor:  This subscription includes access to the NZX Milk Price calculator.

• Dairy Insight: Weekly insights report that interprets what is happening in the global dairy commodity markets and what this will mean for farmgate milk prices here.

• Grain & Feed Insight: Bi-monthly report on independent commentary and analysis of prices and industry trends.

Colraine Herefords at Ohaupo, near Hamilton, has set a yearling bull price record for the breed of $37,000 in what is only the second on-farm auction for the stud.  

Colraine Washington 23 421 was bought by Mahuta Herefords and sold with a guaranteed one-year dairy semen contract from LIC for 10,000 straws.

He was independently identified by LIC beef genetics team as the very top Hereford yearling bull, suited to what the dairy beef semen market is demanding. 

John and Mary Allen, Mahuta Herefords at Tuakau, will still hold all semen rights for the beef cattle market in NZ and overseas.

Colraine principal Colin Corney said the sale vindicates a 10-year dedicated breeding programme focusing on calving ease, growth and a drive to improve eye muscle area along with intramuscular fat.

“The improvements are due to us working along with our good friend Dave Warburton, a production veterinarian who set up a group of breeders to join him importing genetics from the United States, Canada and Australia to help lift key traits within the NZ Hereford population.  

“On top of this we have invested heavily in recording as much as we can on all our animals to provide a genetic package that is as reliable as possible.”

Colraine sold all 10 of its bulls and averaged $6100, compared with last year’s $3480.

The sale was in conjunction with Kanuka Polled Herefords, which sold eight out of eight and averaged $3112 with a top of $4200 for Kanuka Seismic 2302.

The third vendor was Arabica Herefords with a complete clearance of nine bulls, averaging $2733 and a top of $3200 paid by Tawanui Herefords.

Waimaire and Otengi Herefords at Kaeo in the Far North kicked off the spring bull sale season with a top price of $9500 for a yearling paid by Bluff Herefords.

The average price paid for two-year-olds was $3960, with a top of $5000, and the averages for 18-month and two-year bulls were $2943 and $3851 respectively.

Bluff Herefords at Glenbrook, South Auckland, had a full clearance of 48 bulls, averaged $3389, nearly $1000 up on last year, and had a top price of $7700 paid by Streamlands Herefords.

Staying in Northland, Te Atarangi Angus at Te Kopuru had a complete clearance of 120 bulls and averaged $3856 compared with last year’s $3457.

Top price was $8500 paid by J Marchant.

Maranui Herefords and Angus at Waihi cleared the offering of 25 Herefords and 14 Angus, averaging $3000 and $3614 respectively.

Top price was $11,500 paid by Matapara Angus at Te Puke.

Totaranui Angus, Pahiatua, sold 76 of 79 bulls offered, averaged $4453 and had a top of $9000 paid by Ross Bolt of Horoeka.

Craigmore Herefords at Ohaupo sold 97 bulls with an average of $3037 and top prices of $6000 paid by Riverton Herefords and $5000 paid by Colraine Herefords.

Hoobees Herefords, Coroglen at Coromandel, sold 10 of 10 offered and averaged $4570 with a top of $8000 paid by Te Puna Herefords.

Synlait Milk’s  do-or-die special meeting on September 18 will go ahead despite the complaint lodged by co-founder, former chief executive and former chair John Penno.

Penno sought to have only minority shareholders eligible to vote on two crucial resolutions to raise capital from majority owner Bright Dairy of Shanghai and major customer a2 Milk Company.

His complaint was dismissed by the sharemarket regulator NZ RegCo and the Takeovers Panel.

Synlait has warned several times that the recapitalisation is essential to ensure the future of the listed dairy company.

The votes will now proceed with Bright able to vote on the a2 Milk resolution and a2 Milk able to vote on the Bright resolution.

The intended outcome is that Bright contributes $185 million and becomes a 65% controlling shareholder and a2 Milk contributes $33m to maintain its 20% stake.

Both big brothers have said they favour the recapitalisation plan and therefore the resolutions are expected to pass.

The special shareholders meeting will be held at 9am on Wednesday at the Synlait Dunsandel plant and online.

“The support of all shareholders remains essential to safeguard the future of Synlait, and all shareholders are encouraged to exercise their right to vote at this important meeting,” the company said.

That appeal is directed at minority shareholders, whose collective influence will fall from 40% to 15%.

Synlait has argued that any other form of capital raise, or liquidation of the company, would wipe out shareholder value.

Meanwhile Synlait has decided to stop receiving milk at its Pōkeno plant in South Auckland and has called on Open Country to process the supply of 54 Waikato farms.

“They will remain Synlait suppliers until the end of their supply agreements and we will remain their first port of call for support,” chief executive Grant Watson said.

Pōkeno will change over wholly to non-dairy, plant-based proteins for the manufacture of advanced nutrition products.

Watson said that after a thorough review the company now had insight to lift the financial performance of world-class assets.

Switching between dairy and non-dairy had hindered operational efficiency.

Pōkeno began processing plant-based products for nutrition and healthcare multinational Abbott after an expensive refit.

Analysts said that the Pōkeno site cost about $400 million to build over six years and is running with annual losses as high as $40m.

A buyer for Pōkeno will not be actively sought but if a compelling offer is made the company may consider it.

Synlait has raised its forecast farmgate milk price for the current season by 60c to $8.60 and will confirm its final price for last season with the annual results on September 30.

A collaboration platform called The Common Ground has been launched by AGMARDT and KPMG, for the food and fibre sector to tackle shared problems.

It is aimed at the 150-plus industry good organisations in the sector, AGMARDT general manager Lee-Ann Marsh said.

“The call is to everyone to join a constructive conversation about our collective future,” she said.

“We are proposing one potential vision on The Common Ground platform, to stimulate discussion and debate on how to break down silos and meet the many shared challenges and opportunities ahead.”

A 40-page report on the platform is available on thecommonground.org.nz website, written by Marsh and three KPMG authors, Ian Proudfoot, Andrew Watane and Brig Ravera, and citing input from 26 industry subject matter experts.

Proudfoot, who has led the annual KPMG Agribusiness Agenda publication for the past 12 years, said The Common Ground concept can help unlock new funding opportunities and reorient the sector’s focus.

It needs to be aiming outwards towards global markets than inwards behind the farm gate.

Although the industry-good structure has been successful in the past, its constraints can no longer be ignored, he said.

“An erosion of trust, short-term decision-making, siloed inefficiency and the lack of focus on global markets are limiting our ability to confront risks and compete for global capital and market share.”

The Common Ground approach will pool resources and act as a back-office engine room.

Areas of collaboration include on-farm energy, rural wellbeing, high value exporting, zero carbon production systems, sustainable oceans, protection of Taonga (IP/mātauranga), water quality and quantity, diversification of producer income, future workforce and agri-education, soil health, rural prosperity, biodiversity, animal welfare and adapting to climate volatility.

The engine room functions include a standard enterprise platform shared by all participating organisations, cutting the estimated $9-plus million spend annually on duplicated back-office services like software, accounting, legal or HR.

Another goal is to reduce data entry duplication for individual producers.

Marsh said The Common Ground is just one vision of the future of industry-good in the sector and the proponents would like to hear back from all corners, especially from producers.

The authors considered alternative industry-good structures and models here and abroad and while all had their strengths and weaknesses none were able to address the collective issues.

The nine-month exercise began with a question: Are industry-good organisations good for industry?

The 150 organisations are mainly producer funded with 33 commodity levy orders gathering about $164m annually, plus $16m of membership subscriptions.

Biosecurity levy orders account for $75m of the $183m total annually.

In other countries industry-good organisations are majority funded or co-funded by the government. For example, in Australia $300m annually goes into rural research and development.

In NZ, duplication of effort and resource is a commonly identified problem and organisations, both levy-funded and subscription, must regularly demonstrate their value.

Increasingly, populism has taken over value demonstration, and addressing the immediate needs of producers has become the focus rather than addressing the most critical needs.

“Organisations are choosing not to address complex needs in order to prioritise remaining relevant and surviving.”

The report found duplication of advocacy by different organisations on behalf of the same producers and sometimes with contradictory positions.

There is an evolutionary trend from research-led productivity drivers to advocacy-led lobbyists, the report said.

From the published accounts of over 40 organisations, some $9m was identified as expenditure on administrative services like finance functions, legal fees and property leases.

Four key constraints appear to be holding the sector back from its potential, the report says.

These are a lack of trust, inadequate aspirational thinking, turf wars and inward thinking, not outward.

The belief that industry-good organisations are acting in the best interests of producers has been eroded.

Lack of trust between organisations and with regulators means no confidence that anyone else would have the capability or credibility to do the job better.

“Too few are thinking of an aspirational future for New Zealand.”

Territorialism around land use is creating barriers to working together and encourages siloed thinking.

The export sector is oriented upside down, missing connections to customers and markets.

The proposed Common Ground structure would be voluntary and host communities of action that identify the right people and seek funding to find solutions.

Each constituent organisation would retain its independence with agreed rules of engagement.

Leadership would be appointed rather than elected and be based on skill rather than representation.

With less overlap and more collaboration for efficiency, producers would gain more value from their levy paying, the report says.

The New Zealand pastoral farming industries have a great opportunity is to shift the dysfunctional bobby calf output to functional beef-on-dairy production, 2023 Nuffield scholar Matt Iremonger believes.

It needs greater value in the supply chain for mating, rearing, growing, processing, marketing and delivering a beef product to the end consumer from the NZ dairy industry.

“Unless there is more money for the end product of non-replacement calves, the value chain will continue to focus on cost minimisation of the calf as a by-product of milk production,” he said.

To change the value chain requires knowledge of the customer needs, including perhaps grain-fed finishing, improved integration and communication of farming systems and greater efficiency and cost optimisation.

Iremonger called for improved technology in meat grading for confidence in product quality and consistency in the eating experience.

He also called for innovation and improvement in marketing beef-on-dairy products.

“By shifting from a production-driven to a consumer-demanded beef-on-dairy value chain there is a prospect to enhance value and provide an opportunity for beef on dairy and the non-replacement dairy calf.”

Farmers will need to communicate transparently, engage with consumers, and build trust through storytelling, education  and advocacy efforts to promote the benefits of beef on dairy and address consumer concerns around sustainability and quality.

Iremonger is general manager of Willesden Farms, running 40,000 sheep and beef stock units on Banks Peninsula and for the twin Kaimoo dairy farms milking 1500 cows in Central Canterbury. 

On his Nuffield scholarship travels Iremonger found that New Zealand is almost alone among the dairying countries in having a “bobby calf problem”.

The 1.8 million bobby calves killed in their first week after birth are an underutilised resource.

Among the reasons for inability to access value, he cited lack of consistency in NZ beef, intermittent supply and problems with grading.

About 40% of NZ beef production already comes from culled cows and slaughtered bobby calves from the dairy industry, being mainly manufacturing beef.

Within $4.6 billion of beef exports in 2022-23, nearly $2bn went to China and $260 million to Japan.

Meat companies are poorly represented in China, supply is inconsistent and grass-fed beef is discounted in many Asian markets because the market prefers grain-fed.

Iremonger said the supply of beef-on-dairy cattle is developing as a specialisation involving selected beef genetics such as Charolais, Wagyu, Angus and Hereford with desirable traits such as high growth rates, meat quality and suitability to NZ growing conditions.

“One of the main challenges to success has been the lack of financial participation along the value chain; someone is often missing out, often the calf-rearer.

“Also, the product is often less than successful as a farming system, [with] either underperforming animals or underperforming at processing with lower quality meat or both.”

The low carbon footprint and the pastoral system  provide a unique point of difference for NZ beef on dairy.

The International Dairy Federation has a carbon accounting methodology that stipulates that 85% of the dairy cow’s emissions are attributed to her milk and 15% to her calf. By contrast a beef on beef calf starts life with 100% of the dams’ emissions attributable.

When NZ cattle are finished and processed the per kilogram beef GHG emissions are 29% lower for beef-on-dairy animals compared to a beef on beef animals.

The NZ birth-to-farmgate carbon footprint for beef-on-dairy animals is about half that of cattle in the United States and Australia.

Iremonger suggested opportunities with the beef-on-dairy market for grain finishing in compost bedded barns for 70 to 100 days.

Beef genetics with high calving ease and short gestation length in addition to the sires having high EBVs for growth, eye muscle area, yield and marbling (IMF) and feed efficiency would be desirable.

Iremonger identified what he called the market challenges, including effective branding and marketing strategies.

“Achieving consistent beef quality and meeting market specifications can be challenging, particularly for pasture-based beef production. 

“Variability in factors such as genetics, nutrition, management practices, and processing methods can affect beef quality attributes such as tenderness, marbling, flavour, and consistency, which may impact market acceptance and consumer satisfaction.

“Consumer preferences and trends in the beef market are continually evolving, influenced by factors such as health and nutrition concerns, sustainability considerations, animal welfare standards and culinary trends.”

NZ farmers must navigate regulatory requirements related to animal health, welfare, traceability, food safety, labelling, and environmental stewardship to ensure compliance and market access.

He wanted adoption of beef on dairy to be independently financially driven and not forced by processing companies.

“Adopting beef-on-dairy practices should be a financial strategy to improve business performance and demonstrate commitment to sustainable farming practices, thereby enhancing their social licence to operate.

Appropriate beef-on-dairy genetics and feed strategies are needed. 

The USDA beef grading system is an example of what NZ needs, for quality assurance, market value, consistency and in some cases market access.

The Meat Standards Australia (MSA) grading system and its index scoring for eating quality is another example.

After visiting the US, he reported that the development of the beef-on-dairy market has been called “arguably the most significant advancement for the US beef industry in a generation”.

The numbers of cattle in that category have increased from 50,000 in 2014 to over 3 million in 2024.

A collaboration between family-owned Sustainable Beef in Nebraska and Walmart has grown to 1500 head a day through the packing plant.

“Beef-on-dairy genetic cattle are providing a $150/head advantage over the standard due to the uniform product and performance,” he said.

Iremonger also found a Californian company, Grimmius Cattle, that raises 700,000 calves annually as a vertically integrated business that supplies genetics to dairy farmers, rears calves and finishes the cattle at feed yards.

It operates a calf buyback system with dairy farmers using Angus and Charolais genetics.

Technological advances in genomics and precision feeding systems are increasing the efficiency of calf-rearing and finishing.

Ideas That Grow Podcast | Developing leaders in the food and fibre sector

Bright Dairy of Shanghai will become a 65% majority shareholder of Synlait Milk when a proposed recapitalisation of the struggling dairy company is completed.

Minority shareholder and major infant formula customer a2 Milk Company will also participate in the equity raise, to maintain its 19.8% holding.

But the two large share placements have different values, as Bright is paying a premium to gain control.

Bright has agreed to pay 60c a share for about 300 million additional shares at a cost to Bright of $185 million.

A2 has agreed to pay 43c a share for around 75 million new shares at a cost of $33m.

The money raised will be used to repay $180m of retail bonds that fall due in December.

The recapitalisation process does not include equity raising from minority shareholders, whose holdings will be substantially diluted.

They will go from about 40% of issued shares to 15%.

However, their 15% portion of the new combined equity value of around $300m is greater than their 40% portion of the current $65m market capitalisation.

Therefore, tradeable Synlait shares rose 6c after the recapitalisation plan announcement, to 46c.

It has been a bumpy road for small shareholders as prolonged problems and disputes surrounding Synlait have carved about 90% out of its share price over the past two years.

The company has never paid a dividend in the 16 years since starting milk collection and processing.

It has about 275 farmer-suppliers in Canterbury and Waikato and is committed to pay no less for milk than Fonterra.

Synlait wants to lift the advance payment on its $8/kg milksolids forecast price, as farmers have asked.

Synlait chair George Adams said that two big share placements for majority owners was the most straightforward way of raising much-needed funds quickly, at a more favourable price than alternatives.

“This is critical to resetting our balance sheet and will hopefully reward all shareholders for their long-term and loyal support as we work to restore confidence in our company.”

Adams explained that minority shareholders would not have gained from a rights issue at a discount to the market price as their small shareholdings risked being diluted down to nothing.

Minority shareholders are required to approve the placements to Bright and a2 Milk, at a special meeting on September 18.

There are also constitutional changes required, for which Bright and a2 can vote, that require 75% approval.

“If the resolutions are not passed, it’s likely Synlait would need to cease trading and initiate a formal insolvency process,” Adams said. 

All matters are inter-conditional, so that if one fails to gain approval, the whole process will cease.

The equity raise will only complete if it does so concurrently with the refinancing of Synlait’s bank facilities, which the company said is close to completion.

“Raising this amount of new equity capital is highly challenging in any circumstance but is particularly so for Synlait given its current over-geared financial position and recent financial underperformance.”

“Successful completion of the transactions will also provide the basis for Synlait to seek to restore farmer supplier confidence and the withdrawal of cessation notices received from farmers who have sought to terminate their milk supply agreements.”

The FY24 annual results will be announced on September 30 and earnings and profit are going to be adversely impacted by what Synlait calls a supply chain constraint in July, without going into more detail.

It is also expected to announce a decision about the future of its Pokeno manufacturing facility and the Auckland blending and canning plant.

“The strategic review does include consideration of the continued collection and processing of milk in the North Island, although no decision has been taken.”

From air cargo demands in the pandemic to sea freight diversion around the Persian Gulf, Fonterra’s new Chief Operating Officer, Anna Palairet, has a strong logistical bent.

She is responsible for all New Zealand manufacturing site and global supply chain operations, technical excellence, and global safety, quality and regulatory teams.

She re-joined the dairy industry in October 2022 as the director, global supply chain before being appointed acting COO in June 2023 and confirmed permanently in April.

She started at entry level with Fonterra around 2000 out of Massey University with a science degree as a market service officer for two years, matching orders from the Middle East with available stocks.

People who do that same role, although it has since been renamed, are within her global operations division and its 9000 employees.

She left to join Amcor, where a lot of Fonterra’s packaging materials come from, then to Carter Holt Harvey, followed by 16 years at Air New Zealand, in positions as general manager of cargo, property and infrastructure, head of sustainability and head of procurement.

The Air NZ roles were great rehearsals for the Fonterra COO position, especially GM of cargo during the covid pandemic.

“It was only two years by the calendar but worth 10 years of experience,” Palairet said.

Why a graduate in genetics and microbiology should make a career out of logistics, human resources, risk management and health and safety was explained through references to her character.

Palairet is a self-confessed people person with an engaging personality who loves the complexities, planning and leadership demands of her job.

“I have always had a love of solving problems, and found my interest captured early on by supply chain optimisation.”

Nearly 25 years later not only is she back at Fonterra as chief operating officer, but she has been appointed chair of Kotahi Logistics, the Fonterra-Silver Fern Farms joint venture.

At a recent partnership re-signing between Kotahi and Maersk shipping line, Palairet said the 10-year collaboration had kept NZ produce moving through significant and ongoing disruptions of global supply chains.

Among the aptitudes and skills needed in her role, she led with people management and the striking of balance in project management and expenditure control.

The main key performance indicators in her role are delivery in full on time –  which has considerably improved since the end of the pandemic – plant optimum run times, reducing losses and increasing operating efficiencies.

“All the food safety and quality requirements are absolutely key.”

At the top of the risk hierarchy are cyber security and food safety, now even more tightly regulated since the 2013 botulism scare and the subsequent internal and external reviews of procedures and responses.

Crisis management is an ongoing priority in training after the lessons of past experiences, Palairet said.

She visits all Fonterra sites to meet managers, technicians and staff members.

A milk pickup run with one of 1500 tanker drivers has been a recent highlight to gain insight into the drivers’ working environment and interactions with farmers.

National Fieldays on the Fonterra site was another highlight, when “farmers never leave you wondering”.

Major upgrades of all business management software are underway in what is called the digital value chain, with expenditure of under $100 million.

“We are rebuilding these systems from the ground up, reducing 17 systems down to one, enhancing all our operations, lowering costs and delivering more for farmers.

“Our systems are by no means bad at present, but this is a big opportunity to simplify.

“This work is a big part of the co-operative’s commitment to annual cost savings.”

The disciplines and departments under Palairet’s wing are milk collection, processing, testing, packing and the technical and engineering support, including food safety and quality, employee health and wellbeing, and the processing improvement and environmental sustainability of all company operations.

Operating costs from business as usual are coming down but the transformational aspects do come at capital expense, she said.

“We are spending $1 billion on sustainability before 2030, two-thirds of that on decarbonisation and wastewater treatment at processing sites.”

Sites and plants are being decommissioned, three last financial year and a further four this year.

Last year it was Brightwater (Nelson), Edendale cheese and Longburn (Palmerston North).

This year two powder plants at Te Rapa and two at Waitoa are being retired along with 80 jobs, with redeployment available to all employees should they want it.

“All these moves are because of ageing assets and ensuring that efficiency of the remaining plants increases.

“We are also upgrading at two sites – for lactoferrin at Hautapu and caramelised milk powder at Pahiatua.

“Lifting skills and giving new opportunities for those skills is how we develop people in the plants.”

Palairet emphasised the regulatory control aspects of her division, working very closely with the Ministry for Primary Industries.

“All of that work is for the benefit of our customers and for the reputation of New Zealand in food safety and quality.”

Food safety is rigorously governed right up to board level, enacting the findings of the post-2013 review conducted by former director Sir Ralph Norris and a team of investigators.

Decarbonisation of processing is on track for the 2030 goals, where there is surety of electricity supply or energy alternatives.

Some coal plants have resource management terms until 2031 and Fonterra has until 2037 to get out of coal.

“Farmers are doing an enormous amount of work on sustainability and we have to be doing the right thing by them and the company.”

Palairet’s predecessors as COO were Robert Spurway, from 2014 to 2020, now CEO of Graincorp, the listed company in Australia, and Fraser Whineray, from 2020 to 2023, now executive chair of Jarden.