TE WHANGAI NEWSLETTER SPRING 2012

Here is a well used saying that every year is different. For us, 2012 is a ‘different year’ that we could get pretty used to, although you don’t get anything for nothing and it hasn’t been without its challenges.

The wet spring resulted in very average crops, summer and autumn being constantly wet provided the perfect environment for Porina establishment, a high parasite challenge and foot scald has been an issue.  As per our breeding philosophy, no pre emptive treatment is given and the lame sheep will be culled from the breeding flock, this has meant we have retained considerable extra ewe hgts to cover the heavy culling and also, that we have kept hoggets with lower production indexes than we would like but it goes without saying that structural soundness is non negotiable.

Genetic gains;
The positive aspect of having these challenges is that it gives the opportunity to expose the poor performing animals that otherwise would not be detected.

Charles Darwin said ‘ It is not the strongest or most intelligent of the species that survives but the ones most able to adapt’   While those might not have been his exact words, that is the generally accepted version and it makes perfect sense.

With the recording ability available now we can speed up that natural process a million fold, to produce an animal suited to our needs or markets.

A prime example would be lean growth rate.  Records of all lines of lambs killed at Te Whangai, right back to the 1950s, have been kept in Bay’s ‘Stock book’ and it is interesting to note that even in the early 1980’s it was normal to have 1-5% of over fats at 12-14kg ccs, in Romney lambs, and up to 13% in Down types.  Lift the weight to 16.5kg ( which was pretty rare!) and fats had been as high as 55% in Downs and 20% in Romney mobs!  Roll forward 30 years and a line of bought in lambs Bay has tried to finish have killed at 22.9kg with no fats, only 1 T and 89% didn’t even have enough fat cover to grade P and that is on high octane finishing country!!  The really scary thought is that somewhere the sisters of those lambs will probably be trying to make some unfortunate hill country farmer a living!  Imagine the feed required to keep these sheep up to the Trevor Cook target of never being less than condition score 3.

So what’s my point?  Genetic gain from performance recording really works, so we need to be careful what we wish for!

Trends and markets;
Just as with trends or market prices, an overshoot of the target often occurs and I feel that has happened in some flocks where growth rate has had too high a priority in the selection.

It would be nice to think the meteoric rise and subsequent crash of the lamb and wool prices could be simply explained as corrections after an over shoot of a trend for higher demand from consumers.  Sadly I think there is more involved, and that the rises were largely procurement driven.  Not that we ever complain about high prices, and that does demonstrate the value of competition at the farm gate (Just ask those who have on farm lamb sales early in the season!) Now the chickens have come home to roost I suspect we will see the damage on meat companies balance sheets.

  I totally believe the best way we will ever receive fair value for our product is when the retailer is prepared to pay the producer a margin (remember a tiny margin at retail, or even wholesale, is huge relative to the farm gate price) for access to a brand( which the producer owns) which he(the retailer) perceives will lift his profitability.  To achieve that lift,  the brand  must differentiate the product from its competition, create genuine new demand and its use must be carefully controlled.

Our cooperative meat companies might argue that they are doing pretty much that, but clearly the brand story is not differentiated enough and the retailer, mostly supermarkets, plagiarise it by using their own brand as well.  To make matters worse, they know when the freezers are full and that there will be a fire sale before the new season begins again.  This is a parasitic rather than the symbiotic relationship we need.  Of course there are niche operators no doubt doing everything right but they are generally not producer owned.

On the wool front, it seems the price hike was driven by the fact that since the 2008 global meltdown, all sectors of the supply chain were just running down stocks already on hand and purchasing as little wool as possible to the point that supplies had run out. As much as it was hurting to pay for it, wool users had to start buying again.  Unfortunately the market has really not improved a lot, there is not a real lift in demand, particularly for carpet, in fact the Australasian wool carpet market has absolutely crashed and that is largely market share being lost to the slick and totally mischievous marketing by synthetics.  Be sure that if you have synthetic carpet in your house or cottages, you have no right to complain about the wool price.  In fact all the wool growers who wear polar fleece crap need to think hard before complaining about the wool price as well!.

It is fantastic to see the Just Shorn branding initiative finally starting to get some traction after four years of hard work and heavy investment.

The group that is operating with Just Shorn in the US, CCA Global Partners, is the largest flooring retail business in the world and also the largest Co-op in the US.  Its members are the store owners, who are also in a number of groups, the largest of which is the Carpet One group so we should see Just Shorn down here as well, in time.

  After the initial phase of  marketing through a small high end group of stores, the International Design Guild(IDG), the big developments are, that we have finally found a manufacturer with the ability to produce the extensive range of styles that CCA require and the vision to see what Just Shorn could do for them as well, and that CCA have committed to make the Just Shorn  programme available to all the groups in their Co-op, including Carpet One, Flooring America, Flooring Canada and Pro Source as well as IDG, about 1700 stores in all.

Just Shorn ticks all the boxes as a successful brand strategy.  It has total support from the retailer because they see the potential to lift their profitability, on the basis that it is very differentiated from anything in the market, they believe their customers will love, and be prepared to pay for, the wool and NZ story, they have comfort with the restricted use of the brand in their patch and they will pay an agreed % of the wholesale carpet price directly back to growers, through EPW. Remember growers have ownership in the brand with Primary Wool Cooperatives 50% ownership of EPW.  Currently the growers supplying wool are receiving a 40c/kg premium above the market price.

 Pests and disease;
Back to Charles Darwin, adaptations and Trevor Cook, a recent article he wrote really pushes a few concern buttons.  An evolutionary biologist was speaking of the failure of treatments for Malaria, chicken industry diseases and weeds growing in maize crops and surmised that ‘as soon as we interfere with the survival of any organism, big or small, there will be selection for those that can survive and these will eventually dominate’. Adding that ‘ even vaccination against disease would eventually encourage the development of bugs that can overcome vaccine induced immunity’.

 My worry is, to what extent does the industry need to take this on board and what are the consequences? Can we as genetic seed stock providers make a difference?  It is clearly not our job to achieve the best performance in the country, it is our job to provide the industry with genetics that will help you achieve that.

 We vaccinated the 2ths for Toxo and Campy this year for the first time in many years. The number of dries has dropped a bit but is it a practise we, as ram breeders, should try and avoid??

On a similar tack, more wisdom coming out of Lincoln University is challenging the relevance of using  FEC counting, in the way the industry has, as an indicator of performance inhibiting parasitism, and logically, requirement for drenching.

 A paper delivered at the 2012 NZ Society of Animal Production by Andy Greer makes some very clear points, such as  ”It is a major fallacy that FEC can reliably assess the worm burden” and this “ By definition, a parasite exists at the expense of its host. As such, the consistent ability of resilient animals to maintain performance, despite a high FEC, strongly suggests FEC does not provide a reliable indicator of the cost of parasitism”.

  In reality the two big risks associated with making drenching decisions and breeding decisions, based on traditional FEC collection, have already played out.  Firstly, the onset of drench resistant worm populations, largely as a result of over drenching of animals that have not necessarily needed it, particularly adult sheep, and secondly, selection of poorer production animals because of the inclusion of FEC in production indexes. (It is widely accepted that lower FEC animals are also lower production ones).

SIL have announced that they are changing the way they calculate their indexes and included in that is a 43% higher weighting on FEC!!!!  

HB Farmer of the year

We must congratulate Mathew and Gemma Barham on their outstanding performance.  Mathew is quoted in talking of his Te Whangai sheep as “Tough little buggars” which is great, but with ewes at 70 kg they only look “little”!

Now I’m out of room, you know the rest, please return your requirement slip as soon as poss.  2011 saw record ram demand for us and this year looks higher again.

Really appreciate all your feedback and look forward to catching up. 

Regards,  Hamish and Bay