TE WHANGAI NEWSLETTER SPRING 2013

FARM ROUNDUP
Almost another year gone and nevermore than this year, has it been a case of on the one hand wanting time to fly but on the other, for it to drag.

 The spring and summer couldn’t go quick enough but the autumn- winter has really been one to cherish…give or take the odd flood or metre of snow! 

Niwa might have finally made a correct prediction, a milder than average winter, does that mean we now believe everything they say???

 I had a call from a very happy client whose scanning was really very good given the circumstances, he reckoned he had absolutely no feed, I said I wasn’t sure that he knew what ‘no feed’ meant!

 No let up from the tough spring eventually left us with 2 options, either de stock by probably 50% or start feeding supplements on a big scale.(breeding cows were all out grazing by Christmas)

 With the weather prediction being for a normal autumn, it was decided to feed.

 The rest is history, needless to say the situation got substantially worse and tupping was extremely difficult.  However we have still got all our breeding stock and I figure that a poor result from full numbers would still produce a  damn site better bottom line, over a couple of years, than an ok result (nothing could have made it very good) from greatly reduced breeding numbers.

 Ram hgts were culled down to the top 1000 with the rest being feedlotted until the rains came and store sale prices recovered.  This is the 1st time I can ever remember not carrying all the rams through to shearing in August.

 Nature, in her infinite wisdom, gives sheep the priceless gift of ‘compensatory growth’ when feed arrives again after a lean spell.  This, often overlooked or under rated effect, has seen the hoggets bounce back to being as good as ever which is a huge relief and as so many ewes are only carrying one lamb, they too are back in acceptable condition…already for a boomer next year!

BEEF + LAMB GENETICS AND THE DNA ISSUES.

 By now you will have had some literature from Beef + Lamb about  folding Ovita, SIL and the Central Progeny Test (CPT) all into one entity to be called Beef + Lamb Genetics.

 This is putting the genetic and the practical research together with the analysis and number crunching which sounds like common sense to me.

 Ovita have been working hard on developing methods of predicting an animal’s potential merit as a sire, based on it’s DNA.  To validate their DNA based assumptions they have been using the actual results we breeders have generated with physical collection of performance data.

 Why then would we pay big money to be told what we already know?

 We are being assured that use of the ‘molecular breeding values’(DNA) alongside what we are already doing, will have quantifiable benefits to you, in terms of providing more accurate predictions of performance for all the main productive traits.

 We certainly need to embrace technology, it is one of the most important factors in what keeps NZ farming more efficient and profitable than our competitors.

 Like all technology, the early adopters pay dearly, but as a result when that technology becomes main stream the costs drop hugely, just look at our first computers, 10mb hard drive for $8000!! Youngsters nowdays would probably never have heard of a megabyte it’s so small!

WHAT IS REALLY WRONG WITH NZ MARKETING?

 We as breeders are doing everything we can to improve the efficiency of the sheep we produce, yet the market returns continue to disappoint, in terms of providing a competitive commercial return on the investment from hill country sheep and beef. 

So how do we address that?  Just taking a quick look at the real world is a help, I don’t see the primary producers of any material, from rubber or cork to meat, hides or wool, making a great return, however if you look at the retail end and ask if the successful brand owners are doing so poorly and the answer is, hell no.

 Shouldn’t we aspire to be like La Coste, RM Williams or Louis Vuitton? ( probably using the profits from handbags made of our lambskins to have a marvellous time at the Americas cup!) This could be a lot more difficult for lamb than wool because there are so many protein substitutes that are ‘grass fed’ ‘sustainable’ etc etc but there is genuinely only wool in that space when talking carpets.

  Of course the second big problem is, in the absence of a differentiated brand, our customers (wholesalers or retailers) have numerous processors / exporters from which to purchase so guess what? In the words of one meat company executive, they know they are “leaving money on the table”…! A euphemism for undercutting each other!

So who can fix the problem?

 It seems logical that those most affected by the problem would be the ones most  driven to find  the solution,. after all are meat company executives taking pay cuts when meat prices are poor?

Here is an idea from possibly the most innovative meat man in the game.  If all lamb producers supplied, or committed to supply, all lamb to just one company(probably a very small one) the problem would be solved.  Think about it… Of course one company couldn’t handle all the lamb so they contract out the processing to the others who then operate like a real business,  setting their processing charges at a level that allows profitability and reinvestment in efficient technology, rather than wild swings of fortune based on the nonsense we experience with the status quo. The only thing a processor would need to concentrate on would be being the most efficient, that way they would get more stock allocated to them.  You would think most meat companies would relish the thought of predictable profits and a growing sheep industry.

 The problem of companies ‘leaving money on the table’ in export negotiations is solved because only one phone is ringing!

 Effectively, producers would have created their own single desk marketing entity without requiring any statute or commerce commission approval, processing capacity would sort its self out, the industry would grow and everyone would be happy! 

So it looks like it’s in our hands…maybe that’s the problem?? Are we not actually unhappy enough with the lamb price to make a change? Are we just waiting for Moses to part the red sea?  Where’s Winston Churchill when we need a leader?

 As always in farming, plenty to chew on.

STOP PRESS – WOOL NEWS

 I thought the wool price was looking so much better when the ram hgt wool was sold in the 1st week of Sept. Showing signs of the dry it was 30.2micron and made $5.37 clean. This was blitzed by the ewe hoggets in the following sale @ $6.39 clean!! This is getting close to the levels where farm consultants were telling us to go ‘all wool’ farming, in 1989! I will admit the ewe hoggets bore the brunt of the drought, as a consequence the finer end of 30%, which I classed out, was 28.8 microns, the main line was 29.5 and fetched $6.24 cln.

 There is a fad coming that is promoting the production of finer wool on dual purpose sheep.(funnily enough the Chinese are now taking more stronger wools!!)

 This reminds me of an old saying, “there is nothing new in life…only that which we have forgotten”.

 Ok, if finer production comes from genetic selection within the existing flock, that’s one thing and it is maintaining all the good traits that have been built up over the years but introduce new genetics, eg merino, and bingo, you have got poor fertility, bad feet and wool that turns literally to custard in temperate climates, believe me, we tried it 30 years ago!

We continue to try and develop a ‘wool index’ using traits that have market value, including clean wgt, micron, length and bulk.  It is not easy to establish the value of some traits as there is a lack of market feedback… convenient for some buyers!

 As relationships build with retailers we will be able to quantify these values and start to factor that into our genetic and management decisions.

 I have seen some commentary saying the wool carpet industry is in ‘terminal decline’. What, so do we walk away? Not on your bloody life. If something good is broken you damn well fix it.  I absolutely know that the unique wool story has never been told through a retail branding programme, in the worlds largest market, until Just Shorn™ arrived. This is exactly what I referred to for lamb. Everyone is crying out for unity but so few are prepared to put their nuts on the line and support the initiatives that will make a real long term difference! Come on lets do it together.

It’s decision time again, how are ewe numbers looking, how many hoggets might be mated to a maternal ram next year to help get numbers back again, what are your ram requirements going to be?

Ram prices remain the same as does our commitment to supply all clients with a proportion of high index rams and continuously lift the potential from every ram. We are also committing to keep more rams on hand at the end, to cover any last minute contingencies from clients. Last year they all went, giving us almost a record number of rams sold which is hugely satisfying given the decline of the national ewe flock.

Looking forward to catching up soon,

Hamish and Bay