Wednesday, October 7, 2015

Silver Fern Farms (“SFF”) proposed joint venture with Shanghai Maling (“SM”)

I like many interested farmers and shareholders recently attended a Silver Fern Farms Road show sell as to why shareholder should vote for this joint venture (“JV”)

To be frank I did consider the presentation to be more of a hard sell of the proposal to shareholders as opposed to the provision of all the facts to shareholders for consideration.
A lot of the presentation was on how good their “Plate to Pasture Strategy” is and will be and how much SM wanted to be part of it as opposed to the nuts and bolts of the JV.

As most pundits are predicting I think it will go through, however, in an ideal world I would like to see it remain as a cooperative for the following reasons:
1.      One of the reasons share price of a cooperative is generally of little consequence to a farmer is what we are worried is how much we are going to be paid for the animals we supply, that is what we want to see maximised.  However the tension that comes with this 50/50 joint venture is that the cooperative half of the JV (in theory) requires the company to maximise what it pays to farmers for the animals they supply, while SM have an obligation to its shareholders to maximise their returns.  These obligations are very different are in direct conflict with one another: the more you pay farmers the less of course you can return to SM’s shareholders.
Now while there is still strong competition in the meat industry and primarily Alliance succeeds (being the only remaining cooperative), then I don’t think there will be any major issue as the JV will have no alternative but to pay farmers, at the very least the same as its competitors.  But the risk is years down the track if the likes of Alliance and perhaps other companies tank and fail, SM (which SFF pointed out repeatedly at the Road show is essentially an SOE (State owned enterprise owned by the Chinese Government)) and as such has very deep pockets it clearly has the ability to take advantage of any financial weakness it may perceive. 
The cynic in me would suggest that is why SM have put up a lot of money for 50% i.e. equal control.  If SM put up a bit less money for 40% ownership, then surely this would still provide all the same so called access and capital advantages SFF has been promoting on their road show, but the control of the JV would clearly remain with the cooperative farmer shareholders.   I would imagine that SM would never been interested in such an arrangement.
2.      SFF when questioned about such a JV leading to a procurement war were quick to say that it has no intention of doing this.  However there denials of this happening is basically only rhetoric, I am sure that the SFF Board before the 2012 season (I think 2012) would have made similar statements before dramatically overpaying for stock that year. Again as SM is essentially owned by the Chinese government and accordingly has very deep pockets it has the ability, particularly if in the future its’ competitors are in a precarious financial position, to pay well over and wear the loss if it means destroying its competition.  I reiterate you need strong competition to ensure the farmer is getting paid the best price for the animals they supply. This is a worst case scenario however it is a risk associated with such a 50/50 joint venture.  This would also depend on farmers, if many decide to change suppliers from SFF, I am sure this JV will be looking to pay what is required to get a minimum throughput at least.   I think we all agree that any procurement war that is not based what the consumer pays at the end is not good for the industry.
3.      SFF put a lot emphasis on how brilliant their plate to pasture strategy is and it’s the only one of its kind.   I hope it is, but given they emphasised how:
·         much they have reduced debt levels;
·         there was no plan B if shareholders did not vote for this JV;
·         they will have real issues obtaining the appropriate funding from their banks if this JV does not go ahead.
All this begs the question what are the banks concerns about this strategy and SFF’s management given a bank before lending money has to evaluate risk etc associated with it.
Surely if SFF is well managed, has a good marketing strategy and have shown in the past years how it has lowered its financial vulnerability (dramatically reduced debt levels) it would be nice to know why the banks have major concerns, as clearly that’s how a bank makes money, by lending it!
4.      Any extra value the JV does succeed in obtaining in the market for their meat, only 50%  is likely to come back to the farmer supplier, as clearly the other 50% will be going back to SM’s shareholders.  The only way all such incremental value gains will be returned to the farmer supplier is if its competitors are also succeeding in gaining the same increase in value; for example presumably and hopefully Alliance being a cooperative would return all such gains to its farmer suppliers and as such this JV would have to pay its farmer suppliers a similar price to its competitors.
I think this will go through as many farmers will see it as a way of getting some cash out, but also because no real alternative has been put forward.  The risks outlined above are very real, how risky is another matter, which is very dependent on the competition. If we have good competition that is also financially strong then the risk is minimal, but if not, who knows what our meat industry will look like in 10 to 15 years.   

Friday, August 28, 2015

Waidalerams August 2015 Newsletter

Well it’s that time of the year again, where I write what I call my annual newsletter.   However as most of you know there is some news in it, but it’s mostly full of my thoughts on many different topics.   I do hope you find it interesting and/or amusing, but hopefully not boring.  I actually have some topics listed this year, so it might be a bit more structured this year, who knows!

It’s been a pretty tough summer for most of us on the east coast.  We were restricted to around 50% irrigation for most of the season and stopped altogether in early march.  Which may sound pathetic, but the problem is when you rely on irrigation, you don’t have 20 tonne of silage in a pit in case you have a drought, nor do you sow green feed crops in the spring as you pay a lot for water and are geared to grow grass all through the summer, so not having water made life very difficult and more so when you don’t have any  animals you can get rid of (because my whole operation is essentially all stud sheep there really is no excess stock I can get rid of when dry).  

Like most of us, I suspect, my income was back massively this last year, primarily from having to kill lambs at much lighter weights and selling the majority as stores.  In fact I was down to winter stock numbers in early march.   So income dramatically down and expenditure considerably up (yes dairy farmers sheep farmers also had another tough year, not our first in the last 10 years).  I fed sheep nuts to the ewes for the first time this year to ensure I had them at good weights for mating.  My winter crops were/are probably only around 60% yield of what I normally expect to have, which meant off farm grazing for ewe hoggets again this winter.  It’s been hard, but fortunately, the winter while bloody cold, has been kind, in that there has been little wastage of feed owing to a dry winter.  The lack of rain is going to be an issue, although getting a bit recently.   However I am the first to acknowledge while it’s been a challenge this last summer and winter, I know it’s a picnic compared to what farmers are facing in North Canterbury and can only hope that there will be some relief this spring for all of us.  We at least got some rain early enough in the autumn to get some grass and crops growing (with some urea) before winter came. 

Ironically my hoggets went in to the winter as good as they have ever done.   I took the second weight of my lambs early (lw6 weight), not much more than 6 weeks after weaning so I could cull them and get rid of the culls.  Note you need to wait at least 6 weeks until after weaning your lambs to weigh them again to ensure that both sire and dam have an equal genetic influence (i.e. 50/50), if you do it earlier than 6 weeks after weaning, the dam’s milking ability is the predominant factor affecting weight and distorts growth bvs.  Thanks to some irrigation (50%)  I managed to keep grass in front of those I retained, fully expecting them to be going backwards from mid-march onwards; but I took a punt and applied 50kg urea on the whole farm in mid-march when there was no rain, and then got some rain days later with some follow up showers, which resulted in me having grass in front of my lambs all through Autumn.   I actually could stop supplementing my ewes when mating started.

Our scanning was not brilliant this year, about on par with last year, to be expected with the dry I guess (although my ewes were in pretty good order when they went to the ram and a few guys told me as I had fed sheep nuts to my ewes that I would have a great scanning, so I was hoping for a super scan!!!). Hopefully, the Romneys will still wean close to 160 because as I have said before lower scans seem to be offset by lower losses (within reason of course and unusual climatic events).  Lamb survivability in the modern Romney is a strength it has over pretty much any other breed these days.  I have heard scientists say that we need to be working on reducing the difference between scanning and weaning as high losses is something that greenies might start highlighting in the future, so apart from the immediate economic loss to us as farmers, this could be an issue for the marketing of our product in the future.

The most significant change this last year, is my living arrangements. Since Mid-April of this year I have been alternating between living one week in Christchurch and one week back down at the farm.    I have done this so as I can share care of my daughter while she finishes high school in Christchurch.  Not the most opportune time for this to happen, but something that I felt I had to do for my daughter’s sake, hopefully I am making a difference?   As a result I have employed Jake Gollan on a part time basis, who lives on the farm with his partner Rawinia.  I still run the whole operation but Jake is obviously responsible for carrying out the day to day jobs that need to be done when I am not there.  My contact details are still the same as I have an internet phone which enables me to have the same number 036148388 where ever I am.  Obviously this arrangement is somewhat taxing financially, so all of you who prefer to give rather than receive, please feel free to pay twice as much for your rams this year (from me of course), the sentiment will be greatly appreciated!!!   Employing Jake has freed me up a bit and taken away the one man band reason I haven’t been able to visit a lot of you in the last coupler years and to be fair I have already visited a number of clients and certainly hope to see a lot more before my sale.  I would add that where I live in Christchurch, 8 Everest Street, Burnside is only about 5 minutes’ drive from the airport, so if you need a bunk for the night don’t hesitate to ask.

Our Seventh on Farm Sale will be at 3pm on Wednesday 25 November 2015 this year
It’s hard to believe; seventh on farm sale.  A helmsman sale which I anticipate will again be run in conjunction with AGonline.  Videos of all rams and performance data will be loaded on the internet around 3 weeks before the sale, so for those of you who come to the sale you can sort through them to a smaller number that might interest you on the day (quite a few clients are doing this now) and of course for those of you who can’t make the sale, you can still sort out, select and buy good rams without attending the sale.  Note you can bid on them from the time they are loaded, leave auto bids etc. if you want, with the auction finishing on the day of the sale, you can actually bid in real time against those bidding on the day of the sale (because it’s a helmsman sale not your traditional auction).

I have had the odd debate about whether you can select rams based on a 20 second video (with rival breeders primarily I might add) and my answer if you are stockman you can, you may have to repeat the video a few times to check everything, but you can see pasterns, shoulders, hindquarter, colour, how it walks etc.  It’s a bit harder with Romneys, but again I do ensure we open the wool on each ram at the beginning of the video so you are not taking a total pot shot on wool either.  I give you a weight at the time of cataloguing to give you a guide to assess size. To know more about how the helmsman sale works in conjunction with Agonline, you are more than welcome to call me or take a look at my website:   Please note that if you haven’t seen my sheep before and you can’t make it on sale day, then come and have a look at my hoggets prior to the sale at your convenience and if they are of the type etc that you want, then I guarantee that you will be able to confidently select the rams you like based solely on the videos and performance data loaded on the internet.

This year I probably will have a few more rams for sale as I doubt I will take Romneys to the Fielding Ram Fair unless they drastically change the marketing of the sale and perhaps the type of sale, as it’s just slowly getting worse every year with less people attending, it’s getting to the point where it would be a poor turnout for a grey power meeting.   I have been supporting it out of principle and loyalty as I think it’s bloody stupid that if you want an exceptional ram that you have to visit every stud, you should be able to go to one sale and see them all, but there comes a time (which I think is now) where it just makes so much more sense to have my top rams in my own sale.  Accordingly I may put up 175 rams, comprising of approximately 80 plus Romneys, 40 Southdowns, 45 South Suffolk and 10 Lincolns. 

I think this year will be the first time since having an on farm sale that I can honestly say that all breeds will be the best line up that I have ever put up.  I obviously only put up what I think are good rams, but previously there has always been one breed where I think I have put up a better line up before.  The Romneys I am proud to say are again bloody good, they are more consistent blockier type, not lighter in weight, but generally a thicker deeper type of sheep.  The blackies are basically by two sires; an expensive south Suffolk I bought coupler years ago and little brick Suffolk (also two years ago) who has bred really well; they are deep thick meaty rams, not massive but still weighing.  The Southdowns’ are particular pleasing, I think best line up for a few years, very consistent and good type, all of them are by ram lambs I used.  On top of that the Lincolns, while only 10 of them, are very good, ideal for crossing over merinos to produce a half bred or indeed as a few are doing now, crossing a merino back over the half bred then using the best progeny extensively over their merinos.

Some significant sires of sale rams this year:

 16-1156-11  222-13  984-12
872-13   1130-11
These are just few of the sires obviously; go to my website, click Stud ram sires and 2014 for respective breeds and you can see pictures and videos of the majority of the sires.  I would point out that 984-12 above is a total outcross that I bought for 4000 from a flock that ranks highly on SILACE (and particularly for survivability).  I was a bit dubious as to how he would breed as he was the only good sheep I saw there (including his keepers, I wouldn’t have used any of them), but he has bred well: thick grunty rams with very good SIL figures across the board, the biggest portion of Romney rams for sale are by him.  222 is my keeper, used as a lamb, the breeder of his sire advised me last year that he has the myomax gene in his background, which means that at some stage way back a breeder either mistakenly or intentionally used a Texel.  I am not that bothered as its well back and further the horse has well and truly bolted, it won’t be long before it’s essentially through all Romney flocks.  222 is helluva grunty ram, with spring, depth etc; there will be some good rams by him in the sale. Note also 785-13 is Southdown ram lamb I used, who bred particularly well, to see what he looks like you will have to go to the website.

On Line Sale: Our Helmsman sale will be run in conjunction with Agonline for the sixth straight year.   Already mentioned this above.  Not hundreds of others rushing to follow me doing this, primarily because there is a lot of work to do it and secondly you need to make sure your animals are ready for sale at the time of taking the video (in my case around the end of October) because if they are not it doesn’t matter how fancy the technology you use is, if your animals look shit on the video, who will be interested in buying them? I was asked for my thoughts on a bull sale, that was copying what I do a coupler years ago: firstly they used photos not videos, which I don’t advocate, a photo can make the animal appear better or worse than what they are, a video doesn’t, but their major issue was their bulls weren’t ready to be sold, at least at the time of taking the photos, as they looked bloody awful.[so1]   Again on sale day there will be a television in the corner of the woolshed whereby you can ask to view the video of the ram you may be interested in to get a better idea as to how he may move. 

The Christchurch Ram Fair which I normally take 2 to 4 four Southdowns is on Friday 27 November 2015, just two days after my on farm sale.  These rams will be on display at my on farm sale.   They will also be loaded on, so you can bid on them with the highest bid before the sale being the reserve at the sale, no one has done this to date, but it’s an easy way to buy a good piggy for perhaps $1200.  I support this sale for the same reasons as I was supporting the Fielding Romney Ram Fair.  I pushed for the sale being shifted earlier so that a commercial farmer could buy a bloody good ram, but if they do miss out they can still go and buy good rams privately, whereas in January if you miss out, it’s a lot more difficult as they most likely have already been sold.  However the problem for me with this sale is that I am not what I facetiously call a “hobby ram breeder”, all my ram lambs of all breeds run in one big mob until culling in February, then in one mob until the beginning of June, when they go on breaks.  I don’t and won’t feed grain to them, those on breaks get a bit of baleage and that’s it. When the sale was in January my rams would be more or less as heavy and big as my competitors, but in November, the last two years, they have been 10 to 15 kgs behind, which to be frank, it doesn’t really matter how good your rams are if they are that far behind you are not going to have a good sale.  So this year my top five piggies have been living on their own since beginning of June in what I call my hobby ram breeder paddock, still no hard feed, but just a very small mob to see if I can compete size wise with my competitors, we will see, they were around 90 kgs late July, so my hobby paddock might be working.

Visiting Clients:  As I have someone working on the farm part time, I have already been to some clients (not as many as I would have liked) but I do expect to get to see a lot more before the sale.  As I just turn up, if you don’t want to see me and then you see my heavily sign written truck coming up your drive, you had better hide quickly! 

Amazing new developments in Waidale’s breeding program!!!! Nothing new to advise here, at Waidale I Still:
·         don’t drench the adult ewes (those that don’t handle it are culled, our pragmatic worm resistance program), we are slowly reaping the rewards from this policy: and
·         practice an extended drench program of 6 to 8 weeks on our lambs (except for those we cull and kill); and
·         cull all year around for conformation constitution etc, all good breeders should be doing this; and
·         only use sires that look as they should and have good SIL figures: a good ram with poor figures will not be used and similarly a poor ram with great figures will also not be used. Too many breeders use poor rams with great figures, not at Waidale! and
·         practice the dying art of stockmanship which ensures our flock is of a consistent type that reflects the type of sheep I want to breed, i.e. good on feet legs, good jaw, good eyes, good colour, good length, good width, good depth, good hind quarters etc.  (All these things affect the future productivity of your flock, if you don’t maintain it, in the short term not a significant impact, but long term major impact).   You do this for long enough your phenotype will reflect the genotype, which greatly increases the likelihood that a ram you like the look of will actually pass on the production traits you see in that ram; and
·         have all flocks (except the Lincolns) SIL recorded; and
·         footrot and cold tolerance profile sires to ensure I am not using a dud ram  (some people wrongly slag this footrot test, it does not mean you won’t get footrot, but I know from my experience with the Lincolns that it has merit, straight Whydid Lincolns rarely profile anything but the highest i.e. 1.1 and they are very rarely lame.  We are also are on a farm that would have more footrot challenge than most, and accordingly we have been culling all the time for years on this.  You need a footrot challenge to ensure you are breeding sheep that have some resistance to it; and
·         eye muscle scan all rams I keep through the winter; and
·         collect viascan data on all culled lambs killed; and
·         cull all Romney ewes that have two singles in a row; and
·         mate our ewe hoggets for 18 days only; and
·         tag all lambs at birth to ensure accurate pedigrees which in turn promotes greater accuracy in SIL figures; and
·         wean in excess of 150% with the Romneys, more like 160 these days, almost irrespective of what they scan; and
·         have an honest upfront attitude.  I pride myself on my directness and my honesty; and
·         have an extensive website, which details all of the above and more; it’s worth a look.

Beef and Lamb Genetics Form in Napier
I attended this in the last week of July.  It was interesting.  I think a lot of what they are doing is of value, so long as it’s tempered with some good stockmanship.  I do think it’s better to have this entity than not and as such I would encourage everyone to vote for its continuance.   You may have seen the recent feature on me in the New Zealand Farmer, the Press (it must have been a slow news’ week as it apparently was everywhere) but my main message was clearly the importance of stockmanship.

Some significant issues that came out of the forum:

Adult weight index, DPA
There was massive debate at this forum about weighing adult sheep to get a breeding value, and the importance of condition scoring ewes at the time of weighing.  Condition scoring is required to differentiate between for an example a skinny slab sided composite ewe of 65kg (note I am taking the piss here, apparently there is the odd skinny slab sided Romney ewe around as well) and a fat grunty meaty Romney ewe of 65kg, one you want and of course one you don’t.   The problem I have with such a breeding value is that I consider it largely redundant for a good stockman as I can look at a sheep and tell you if it’s going to leave big slab sided mongrels or little wee buggers etc. My eye is as accurate if not more so and probably more importantly my eye is more timely as even if you collate all such data it’s only when you have an adult progeny on the ground of the sire ram that you can have confidence in the breeding values.

 It seems many breeders are looking for SIL to solve everything, but personally I would sooner see Beef and Lamb concentrate on those things I cannot see, for example fertility (nlbbv) and survival (surbv), these are traits that I can’t look at a sheep and go yes fertile etc.

Zoetis were there trying to peddle the sheep 5k, and shepherd plus etc.  The technology is in theory good, but economically it just doesn’t stack up.   It costs me about 750 dollars to tag and record my lambs (ignoring labour), but if I DNA tested my ewes, my sires, electronically tagged my progeny and of course DNA tested my lambs, I worked out I would have a bill of around 59000 (admittedly about 23000 would be one off as once ewes done once) but still a helluva cost as you can see.

Zoetis also used an example of testing a 120 rams, of which the top 20, after being sheep 5k tested, changed significantly and they said based on this example there was a gain of $40000, I think, in production.  But this is crap as I am sure that at least half of those top 20, if not more, would quite simply not be good enough to use in my flock as they would have faults that I wouldn’t bring into my flock.  The reality at home is I might have 5 or 6 ram lambs I think are good enough to use (that’s all) in the stud.  Again as I said last year I see the benefit of sheep 5k (apart from marketing which is how most use it) is to test the few I want to use to make sure there isn’t something that is bad, for example one has piss poor fertility, then I wouldn’t use the ram, but the problem is still the time it takes to get results.  It is still around 6 weeks which is quite simply too slow to be of any value as I have a window of about 2 weeks max between selection and mating: to select the lambs you want to use in January would mean I am often not using the best lambs.  They assured me they are working on reducing the turnaround time. 

We continue to provide samples of all Romney sires to Agresearch which means that we will be well connected when I eventually do use sheep 5K to get genomic breeding values (the connectivity improves accuracy).  There is one breeder I know of who uses every DNA test under the sun but if it wasn’t for all his other off farm businesses, his sheep farm would in my view go broke, and breeding good rams requires much more than DNA testing to breed good sheep (Yes stockmanship!!!!).  However if there is a philanthropist out there (or collectively a group) who would like to donate say $70000 a year to my stud operation to utilise all the science, then I am more than happy to accept it!

SIL meat index DPM
Again this index is still a waste of time, unless you are killing around 15 to 20 cull lambs of all sires you use through Alliance and getting the individual viascan results being fed into SIL.   Firstly very few do this, with droughts last year, I didn’t even bother doing it.  Secondly as I learnt last year no across flock reports at present incorporate this data, as there is so little of it and SIL software doesn’t presently have the capability to do it in SILACE run.  Accordingly this index is very reliant on an eye muscle scan which is only an indication of eye muscle not the meat yield of the whole sheep and if no eye muscle reading, it extrapolates and predicts based on weaning weights etc, accordingly it becomes so bloody unreliable as to whether a high DPM means meat or not, that it’s a joke.

Heterosis (Hybrid vigour)
They intend to make SILACE the sole across flock report, which will incorporate viascan data in the future and they are going to eliminate those effects that are attributable to hybrid vigour as opposed to superior genetics, which it does not at present.  Any composite or cross bred in SILACE is unfairly advantaged over a purebred as there a significant productivity gains that are solely due to Hybrid Vigour.  This adjustment is very important as they propose that the only across flock report in the future will be a SILACE across all breeds, cross breeds etc. At present you can get across flock reports within breeds, but they intend to do away with this.

Condition Scoring
Trevor cook gave a demonstration and talk on this.  I always cull gutless and skinny ewes, but mostly on eye.  I haven’t handled all ewes to condition score them on a scale of 1 to 5, but after listening to this I think it’s probably one of the most practical and easy gains we can make in lambing percentage, by simply ensuring all ewes are a condition score of 3 or more.  I can’t remember the exact percentage gain, but it’s significant.  There is a ewe Body Condition Scoring handbook on beef and lamb website that sets it all out.  It’s certainly something I will put more focus on.

Meat Industry:  Nothing much is happening, although I am looking forward to these special shareholders meeting of Alliance and Silver Fern Farms to discuss the merits or otherwise of a merger, which hopefully will provide us with the transparency that I have been banging on about for a while.  I heard Keith Cooper recently, now he has stepped down, and the thing that resonated most with me is if you adhere to the cooperative model and all the principles associated with it (which arguably aren’t adhered to at the moment), then it simply doesn’t make any sense to have two cooperatives as logically one should achieve the same for all its shareholders.

I intend to put myself up as a candidate for the one of the upcoming vacancies on the Alliance Board this year.  I have in the past considered doing this but wasn’t sure I would have the time to do it (being a one man band with the farm) but ironically now owing to my change in living circumstances and that I have now quit the Romney Council, I do have the time to do this.  I would like to think that someone like me can add value as I am passionate sheep breeder, I am well educated, (practised as a lawyer for 6 years, not sure if this is positive or not, depend on who you are I guess) but I think my strongest attribute is my ability to digest what I am being told quickly and then not being afraid to question the rationale behind it to ensure what is being done is the right thing (Those of you who know me would appreciate I have an opinion on most things and fairly direct in putting across if need be).  I am certainly not doing this as a career move, if I don’t think I am doing any good, I would quit.   I do think that if I got elected (which is the biggest hurdle in my plan) that I stand for fairness and equity to all shareholders of a cooperative (i.e. no preferential groups) and obviously transparency as to why things are done.  I am not putting myself forward as pro or anti merger, but I am someone with an open mind who considers it important that shareholders are kept informed of what are the obstacles to a merger or why it doesn’t make sense to or what needs to happen for a merger or something else to occur.   I feel this lack of accountability and transparency is one of the reasons why no progress is made as we feel there is always some hidden agenda behind what we are being told.

Wool:  Wool levy failed last year, but I still make money out of growing good quality wool off my Romneys irrespective of that levy, so if you are not then I am afraid you certainly haven’t got the right sheep.   Unless you are not shearing at all, then why not grow a good dual purpose sheep that produces meat and decent nett cheque for wool after shearing.  The falling exchange will hopefully help our cause further.

I have heard that Landcorp have negotiated a deal with the Merino Company whereby they getting something like a 25 cent premium for their crossbred wool.  I don’t know this for a fact but a wool broker has confirmed that they do have some deal like this.   Firstly this sort of deal offends my sense of fairness and equity: how can a company provide a premium to one major player for a product that I can assure you that won’t be any better than others who supply them.  To do this they are either making a loss on the Landcorp wool or more likely they are underpaying their other suppliers, i.e. one supplier is subsidising the other.  If I sold my wool to the Merino Company and found this out, I would tell them to stick their company where the sun don’t shine.

Incidentally a wool broker has also told me that while they do get a premium, the premium is well and truly offset by the marketing charges they require you to pay, so giveth with one hand but taketh away with the other, if this is correct then perhaps they are not actually better off.

Some say why don’t we get together and do the same.  It almost sounds like forming a cooperative doesn’t it.  Firstly, I think it’s wrong to pay a premium for a product that is no different to another.   There needs to be something you are paying for, a genuine quality differential or some back story perhaps that allows you to get more money for the product.  Secondly I am not an advocate of the “if you can’t beat them join them” attitude, I would sooner campaign against the unjustness and discourage farmers from supplying the company in question.  Thirdly it’s a lot harder to get many different farmers to come together and supply an entity than for one entity like Landcorp to issue a directive to be complied with as unfortunately there will always be farmers who waiver or back out or don’t supply what is requested etc: accordingly it’s not as easy as it sounds to do.

Sorting up ewes so only the best are being bred for replacements.
Apart from buying bloody good rams off me for a fortune, this is one of the quickest and most cost effective ways of improving the quality of your flock.   Basically you need to work out how many ewes you need to put to a Romney (or whatever breed is your capital flock) to give you the required number of ewe lambs you need to go back into the flock as replacements (allowing for a reasonable culling percentage say 50%), the rest you simply put to a terminal sire so there is no chance of keeping ewe lambs out of those inferior ewes.  I assure you that doing this for a few years will reap dividends as the quickest way to improve overall production is getting rid of the rubbish.

You simply need to go through your ewes prior to mating to sort them into the two mobs.   If you are in a cross breeding regime such as Romdales, then this is also the time to sort those ewes that look more like a Romney and put a Perendale across them and those that look like a Perendale and put a Romney across them, (you get all the hybrid vigour this way, not the watered down version of a Romdale, plus you can source true genetics in terms of breeding values not figures that may have been distorted by hybrid vigour).   Personally I doubt there is a Coopdale, Perendale or Composite flock that wouldn’t benefit from at least one cross of a good Romney every few years (if not more often).

For clients who buy all their rams off me I am more than happy to come and assist you to do this, we just need to organise a time well in advance so that I can indeed do it.   For non-clients I am more than happy to do it, subject to time constraints, but I would expect to be remunerated for my time.  Please note I am not saying you need me to do it, I am just offering my services if you want.  If you wanted you could take it further and select an elite mob of ewes, paying top dollar for a few good rams (preferably from me) to improve your flock.   Note I won’t be culling your ewes and rams and then picking rams for you from some breeder who is actually paying that person commission for selling his rams (this does happen)!!

Stockmanship Video
For a few years now this has been a goal of mine to create a generic video (i.e. not breed specific) from start (jaw undershot and overshot etc) right through to back pasterns and tail settings etc and obviously explaining why it’s important.  I feel that it would be about two hours in length, but could be compartmentalised into say 15 minute segments (so people don’t fall asleep, like you are now perhaps doing just reading about it), with differing commentary perhaps for the age groups it’s being played to (for example high school kids through to university students).  I believe practical workshops could be run in conjunction with use of this as a teaching video.  On top of this simple academic tests could be created and given after the showing of such a video.

I think the key to doing this properly is to actually have a sheep that shows how an animal should look like and a sheep that shows how it should not look like.  In other words you need a sheep that has for example, good teeth; is not overshot or undershot or light jawed etc, but similarly you need a sheep that demonstrates each of these faults as well so someone can actually see what this looks like and not simply rely on some commentary to understand it.

If this is done properly, it’s something that can be of value for many years to come and something that could be incorporated into high school Ag programmes and more importantly incorporated as part of the syllabus of all Ag based commerce and/or science degrees.  By its inclusion in such degrees I believe not only will it be an aid in teaching people about how an animal should look, but it will reinforce the importance of stockmanship in being a good sheep farmer.  I would argue now that as stockmanship is not part of such degrees many graduates come out who don’t know and more importantly don’t think stockmanship is important, being part of the degree would give it credibility.

I have had a various communications with Scott Champion the CEO of Beef and Lamb who is essentially behind it, but at the moment its quite circular as to how much it will cost to do (which is difficult to work out when hasn’t been done before).   I believe there will be a lot of filming by the time you go through finding sheep with good traits but more importantly good examples of the bad traits.    It’s this point that brings me to seek assistance: firstly I believe we need a big mob of ewe hoggets (ideally thousands) which have had little culling as lambs, so as we can go through them to find good examples of all faults, so if anyone would like to volunteer their flock for this or knows someone who may be able to help, I would greatly appreciate the assistance.  Secondly I believe this is a resource that will be around for a long time, so there is a real opportunity for one off naming rights for an entity that is prepared to put the money up to do it.  Accordingly if you know anyone who may be interested in such an opportunity I would greatly appreciate being put in contact with the appropriate person.

Stock Companies Commission
This is something that is starting to bug a few of us.  I pay 9% commission for my ram sale and I know one of the reasons you pay commission is certainty of payment so I am not the one out of pocket if someone doesn’t pay, but I do think that 9% these days is too bloody high.  I have a very good local agent who does a lot in terms of organising sale etc and I am very grateful for that as without him the sale wouldn’t happen.  However I do the rest, catalogue, newsletters, mailing, preparation for the sale.

We normally divide up my database of farmers with the idea that lists are giving to local stock agents to ring the farmers in their area and simply ask if they would like a lift to my sale (I don’t want a hard sell at all, just an offer to be picked up, taken to sale and returned), you obviously could have a few beers in the knowledge you weren’t driving.  A mate of mine told me at last year’s sale as all the agents were coming in, “they should have car pooled” as all arriving in own car with no one in it.

What I would like to find out if I am living in a dream world or not as I think the majority of farmers, with a bit of notice would gratefully accept such an offer.  I personally don’t think many agents are making such an offer as requested.   Accordingly I would appreciate it if you could take the time to send me an email to to say whether you would accept such an offer or not from your agent.  You can ring me if you prefer.  Please be reassured that this is not smart arse marketing gimmick, I really want to know because if it’s as I think, then I will be having a very pointed discussion about what I expect for the commission I am paying.  I know it’s not like bulls where the money is significantly higher, but surely it’s all part of the service an agent provides to get your lambs, steers etc.

Even the stock standard commission of 6% should be less these days.  I know in our area there are stock and station agents selling lambs at on farm sales for considerably less than 6%.  Landcorp are probably using their size to demand less commission, the bigger you are logically the easier it is to negotiate a reduction.  In any event it won’t change unless we all as farmers start putting the heat on the companies and voting with our feet, always an action that gets the most attention.

My Cull Stud Romney Ewe Lambs:  I do have surplus ewe lambs for sale.   One client takes about 90 every year, didn’t last year because of the drought, so if there is anyone out there who is interested in purchasing a 150 or so good ewe lambs for $20 more than my average kill price of lambs for the season, then contact me as soon as possible, first in first served.

Science and cross breeding:  I have given my views on a number of issues over the years including myomax, carla saliva test, sheep 5k and 50k, footrot test,  worm star, CT Scanning, SIL Ace index, cross breeding and closed flocks among other things.  For those of you who have not received a newsletter from me before, simply go to my website  click on Newsletters in the menu and then open up the 2012 Newsletter (mostly), I think you will find it interesting reading.

Catalogues will be posted out first week of November for my on farm sale to be held at 3pm on Wednesday 25 November 2015.  All rams offered and any going to Fielding (unlikely) or Piggies going to Christchurch will be uploaded at  around this same time (about 3 weeks before the sale): all you will have to do is go to that site and click on the Waidalerams sale icons to get there.  

If anyone has any questions about anything I have written please feel free to contact me, I welcome the discussion.  But if I don’t see you before, I look forward to an agent bringing you to my sale or under your own steam and having one or more beers with you.

Saturday, May 16, 2015

Rural Supply Coops-relevancy to today’s farmer?

I recently read an article about the demise of rural supply cooperatives.  Neal Shaw, the CEO of Ashburton Trading Society said “I would go so far as to say it is essentially the issue of young farmers coming through and lacking the understanding of why co-ops were formed”

 This may be true to a point in that there may be farmers out there who don’t understand why cooperatives were formed, but I would argue that the way a lot of rural cooperatives are run these days its not that easy to simply understand why the cooperative was started in the first place.

Firstly, generally rural trading cooperatives were formed to create buying power:  a lot of farmers become shareholders of the cooperative which in turn allowed that entity to use its bulk buying power to secure the product as cheap as it possibly can.   

Accordingly the advantage of joining the cooperative was that you were purchasing the product from your cooperative that had sourced it as cheap as it possibly could and in all likelihood you wouldn’t be able to buy yourself individually cheaper anywhere else.

But is that the case today?   I would say no way.    The rural trading cooperative that I am a member of often isn’t and hasn’t been for a number of years the cheapest place to purchase whatever I am buying.  If it is a significant purchase I do shop around; you have to otherwise I would waste a lot of money buying it from my cooperative.  Is this right, of course its not.

The question is why is this?  Personally I am so sick of reward schemes.  I don’t want to accumulate rewards to buy goods I really don’t need or are simply buying to get rid of the rewards before they expire, its gimmicky crap.    Sell everything in the store at the lowest possible price (which by the very nature of a cooperative, it should not be cheaper anywhere else, except perhaps another cooperative that is more efficiently run) and forget the stupid rewards, this to me is the basic tenet of why a cooperative was set up (and incidentally I think also one of the reasons why vet clubs were started, but that’s another story).

The second reason I have also already alluded to is how efficiently it is run.  Again my coop owns premises all over the place; always seem to have loads of staff and seemingly carries a load of product which traditionally is considered more the domain of the “townie” as opposed to that of the farmer (i.e. one could argue not focused solely  on its core demographic)  Now I don’t know if the cooperative I am member of is efficiently run or not (I hope so), but given that they continually push their rewards schemes, do always seem to have a lot of staff around, own a lot of buildings etc and the clincher being they don’t sell goods cheaper than anywhere else I can buy them, then isn’t any wonder why there are farmers who question the relevance today of a rural trading cooperative and as such probably can’t understand why they were formed in the first place.