AgLetter AgLetter AgLetter AgLetter
AgLetter
28th May 2012
Jack Frost Pays a Visit
FarmIQ: In Practice
Many parts of the country have experienced a string of frosts over the last
Interest Rates
7-10 days. It’s been great for drying up the mud but it has slowed things up
Livestock Tax Values
a bit. Soil temperatures at one Wairarapa site were averaging around 11.5°C
mid-month. Since then they have fallen to 8.5 °C.
This time last year, soil temps on that same site were 13.5° at the start of the month and finished at 11°.
The soil moisture content started the month at 47% and is currently 43%. Last year it started the month at 36% and
lifted to 43% by the end. In Marlborough, frosts have seen soil temps dip as low as 4°, but the fine clear weather has
been great for breakfeeding, shearing and scanning.
Jenny Craigs for the Ewes
With tupping now well out of the way, attention has turned to “conditioning” ewes and cows, and knocking some
feed into shape for the winter. On higher fertility country, the feed is still in pretty good nick, despite the high
covers. There’s a job to do on the poorer fertility country though, where Browntop and other poorer species have
taken hold.
The trick will be to mob up ewes on condition score, put ewe hoggets in front until scanning and
have older cattle behind where possible. Ewes that weigh in excess of 65 kg and in condition score 3.5 or better can
afford to lose 3-4 kg of weight between now and scanning. The threat of bearings is on everyone’s mind, especially
with the high multiple pregnancies that are likely and the potential value of those ewes and lambs.
Store Markets Quiet
The colder weather has seen buyers pull their horns in at recent stock sales. Good quality male lambs have been
holding their value but light-to-medium ewe lambs have been discounted further.
The first of the SIL ewes have been selling quite well. Just average quality ewes have been making $125 and better
quality ewes up to $145. At Feilding, better RWR ewes made up to $150. Good male lambs were steady but ewe
lambs were back by $5-$10/head. The cattle market was described as “flat”. It’s still a bit dry in the
Manawatu/Rangitikei.
Where have all the Cull Cows Gone?
Beef exporters are wondering what’s happened to all the manufacturing beef? Projecting forward to the end of the
killing season, it appears that the cull cow kill could short 100,000 head on expectation, and the bull and heifer kill
80,000 behind. Some cull cows are being fattened before they are killed but not enough to explain the short fall. This
could mean that chains are busier in the winter and early spring with the carry-over? Beef schedules are slightly
stronger this week with the softer $NZ and lamb schedules; no change.
Livestock Tax Change in Budget No Surprise
The government had already flagged its intention to restrict movement between livestock tax systems. It has
changed the rules so farmers cannot switch from one scheme to another e.g. swapping from Herd Scheme to
National Standard Cost scheme to avoid paying tax. It has been backdated to August 18 last year. Farmers and
accountants say the change is too heavy-handed and puts at risk plans by older farmers to pass on their farms and
livestock to their children. They are waiting to see the fine print of a bill and will challenge it in the select committee
stages.
AT A GLANCE
Store Lambs 2012 (30-34kg)
New Seasons Lamb
18 M Steer
P2 Steer (295 kg)
Bull
(295 kg)
Local Trade Beef (220 kg)
AP Stag 60 kg
Strong Wool Indicator
90-day Bill Rate
US Bull Price (c/lb US)
$NZ/£UK
$NZ / $US Exchange Rate
-2 weeks
-1 weeks
$2.95
$2.95
$5.55-$5.60 $5.55-$5.60
$2.15
$2.15
$3.90
$3.90
$4.00
$4.00
$3.90-$3.95
$3.90
$7.15
$7.15
410
416
2.60%
2.56%
213
210
0.4853
0.4795
0.7830
0.7564
This Week
$2.85
$5.60
$2.15
$4.00
$4.10
$395-$4.00
$7.15
416
2.57%
208
0.4812
0.7537
TREND
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▲
=
=
=
▼
=
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CHANGE
-10c
+10c
+10c
+5-10c
-2c
B a k e r & A s s o c i a t e s (W a i r a r a p a ) L i m i t e d , F a r m M a n a g e m e n t C o n s u l t a n t s & R u r a l V a l u e r s
Editor: Chris Garland
P O Box 900, Masterton, Phone (06) 378 8174, Fax (06) 370 8105, email [email protected]
FarmIQ in Practice
At a field day at Taratahi Agricultural Training Centre’s Mangarata Farm in the Wairarapa last week, a select group of farmers saw
how FarmIQ was being put into practice.
Mangarata has been selected as one of the programme’s six “IQ Farms”. Six demonstration farms have been established in each
Island. Next year this will grow to nine nationally and will include beef and deer businesses, as well as sheep.
Currently there are over 400 farms registered on FarmIQ. About 300 of them are actively capturing data and feeding it into
FarmIQ’s pilot database. All of these farms have had EID ear tags supplied free of charge and have the opportunity to record
whatever data they want on stock while they are on-farm. They also get to see how individual lines of stock (which have been
treated differently) perform under processing. All stock are processed through Silver Fern Farms. The programme is not actively
canvassing for new participants until the new database is built but interest from individual farmers is invited.
A Taste of What’s Possible
Baker & Associates are managing the FarmIQ programme in the Southern North Island. Sully Alsop from the firm described
how decisions were made on Mangarata as to what data to collect. Initially they are after the information that was the easiest to
capture and interpret, i.e the “low hanging fruit”.
E.g. Lambs Finished on Rape vs Pasja vs Grass
The lambs were first tagged at docking and were grazed on pasture until early January when they were split into their respective grazing mobs.
Observations

LWG performance on the pasja averaged 202g/day. On old pasture they did 131 g/day and on rape 121 g/day.

The rape performance was a surprise but seemed to be a common experience in this wet, dull summer when rape didn’t
ripen properly.

Sully’s observations from other farms recording through FarmIQ are that these sorts of growth rates are pretty typical.
“We’re not as good at growing lambs as we think we are”!

Some ewe lambs grazed on rape actually lost weight. The main reason suspected was rape scald. The individual animals
that were affected have been identified through EID and can now be tracked as to what effect this may have on their
performance at ewe hogget mating and further through their life.

Even though the lambs on pasja grew faster, they didn’t yield any heavier than the other two groups. Sully is observing
from other farms though that lambs off plantain, chicory and clover are yielding heavier than grass-based systems.

In terms of grading, 15% of the ewe lambs went over-fat compared to 3% of the ram lambs.
AgLetter: Baker & Associates (Wai) Limited. Not to be reproduced or distributed in any form
2
Ewe Flock Recorded


Mangarata has EID-tagged their replacement ewe lambs as well as their entire ewe flock.
They will be recording individual data on scanning results, BCD and liveweight. It will start to get interesting when a
ewe’s weaning results are matched against her BCD and liveweight history. If a ewe is drafted out in any tail-end mob
this is recorded; repeat offenders can be identified. This should become a powerful selection tool for choosing which
ewes to breed from and which to have in a “B” flock.
A Vision for the Future
Sully outlined how he would like to see this technology developing: (i) Already we can set up the auto-drafter to draft on different traits – eg. dial up 2-tooths that got in lamb as a hogget and
scanned with twins as a 2-tooth that have never dropped below BCS 3 into my A-flock.
(ii) Smart phones will replace notebooks and link data live to the database in the cloud for stock tallies, sales, purchases,
animal health treatments, weights, crop details, fertiliser applications, docking tallies.....
(iii) Load my paddock docking results directly into my smart phone which will then automatically update my farm on the
database and change my feed budget and financial budget to suit as well as building a history of paddock
wastage – minimise time spent in the office, not increase it.
(iv) Have your farm set up like a farm map, with information relating to that paddock forage crop, fert history, set stocking
numbers, wastage numbers, and grazing residuals automatically recorded.
(v) Recording data in the yards must become “real time”. Rather than have to download data from a reader to a laptop to
process it, there’s a place for an application like a smart phone which can collect the data through Bluetooth
and process it immediately though an internet connection to a database.
Where is FarmIQ Going?




Having set up a number of farms with EID tags and demonstration farms with reading gear, through these FarmIQ
farms we are learning how best to collect data and how best to use it.
The current FarmIQ database is just a pilot. The “real deal” is currently under development and may not be operational
until early next year.
The data collected by farmers will be particularly valuable when extracted on a regional basis; i.e. different crops and
forages perform differently depending on soil and climate characteristics.
It’s good to see that Silver Fern Farms have agreed to participate in the development phase of a new PGP programme
instigated by Beef+Lamb NZ focused on “Accelerating Best Practice”. If this programme gets the final nod it should be
complementary to the FarmIQ programme. Other partners in this proposed new programme include Alliance, ANZCO,
Blue Sky, ANZ, National and Deloittes.
Interest Rates Heading Down?
Have you checked out interest rates lately?
The following chart plots the yield curves for floating to 5yr rates for indicative retail interest rates for an “average security
quality” customer, e.g. over 60% equity, well structured and managed business with interest cover in excess of 1.25 in the medium
term.
The blue line at the bottom shows how much the
yield curve has dropped even since March 2012.
The short end has moved down about 50 points
and the long end by about 80 points.
In January 2010, not long after the first financial
shock, 5-year rates were 8.1% and floating rates
5.8%.
In May 2012, those same rates are averaging
6.22% and 5.33% respectively.
The gap between floating and fixed has
closed from 230 points to 89 points!
AgLetter: Baker & Associates (Wai) Limited. Not to be reproduced or distributed in any form
3
This table shows these interest rates in real terms.
May-12
Mar-12
Jul-11
Jan-10
Oct-05
Float
5.33
5.61
5.6
5.8
8.4
1-yr
5.18
5.7
6.3
6.3
8.45
2-Yr
5.33
6.08
6.8
7.1
8.25
3-Yr
5.59
6.38
7.2
7.6
8.2
4-Yr
5.93
6.72
7.6
7.9
8.1
5-Yr
6.22
7.13
7.9
8.1
8
We have never seen rates like this before! You can now fix debt for 5 years at a rate that you could only fix for one year in
2010.
There’s an old saying in life; “If its seems too good to be true, then it probably is!”
While there is no indication that rates are going to go up again in the immediate future, there is certainly reason here to start
thinking about whether you want to take any debt risk out of your business by fixing some of it at these rates.
The 'flatter' yield curve has resulted in forward start (forward fixing) options becoming more attractive than in March. Generally
speaking, forward starting a fixed rate to begin 11 months from now is priced at only a 10 pt premium above that of the current
following year’s rate. For example, forward starting a 3 yr rate to begin in 11 months time (April 2013) would be priced at 5.95%,
a 10 pt premium above the current 4 yr fixed rate at 5.85% (based on the scenario above). This might be worth considering for
those who want to put some risk management in place but still enjoy the benefit of lower short term rates in the interim.
However, given the 'market forecast' for those fixed rates, it suggests that rates will be low for a while yet.
National Average Market Values for Livestock
This year’s NAMV livestock values have just been released. The sheep and cattle values reflect the “correction” in sheep
and cattle prices that has occurred since the January 2012 peak. These values will be of interest to those who are valuing
livestock around balance date for sale or purchase, for asset valuation or bailment valuation.
2005
2006
M A E w es
2 th s
E H o g g e ts
W H o g g e ts
$98
$113
$72
$66
B
R
R
R
R
C ow s
2 H fr
1 H fr
2 s tr/ b u ll
1 s tr/ b u ll
H in d (R e d )
R 2 H in d
R 1 H in d
N a tio n a l A v e ra g e M a rk e t V a lu e s
2007
2008
2009
2 0 10
2 0 11
2 0 12
$77
$87
$58
$48
$65
$75
$54
$48
$50
$60
$52
$49
$99
$116
$94
$88
$107
$122
$88
$81
$142
$160
$120
$107
$166
$191
$119
$101
$708
$578
$399
$697
$494
$753
$626
$402
$712
$497
$752
$620
$406
$720
$502
$638
$547
$333
$640
$427
$770
$663
$429
$748
$534
$791
$680
$448
$791
$566
$997
$786
$509
$883
$599
$ 1 ,0 2 5
$807
$558
$921
$665
$181
$160
$75
$191
$172
$78
$296
$270
$152
$363
$309
$152
$551
$484
$318
$410
$350
$201
$481
$420
$253
$455
$413
$243
Parent Texting
What does IDK, LY and TTYL mean?
I don’t know. Love you. Talk to you later
OK I will ask you sister then
__________________________________
Hi. I’m fairly new to Facebook. Mind accepting my friend
request?
You made a Facebook! WTF
What does WTF mean?
Oh, it means Welcome to Facebook.
Don’t forget to unload the dishwasher…..
Did you finish your homework…..?
We have to go to your grandmother’s house for Xmas……
Dad and I talked. We are going to buy you a car next month
U r? OMG thank u
No we’re not. Just wanted to make sure you were getting my
texts
AgLetter: Baker & Associates (Wai) Limited. Not to be reproduced or distributed in any form
4
Indicator PM Lamb (15-19kg)
$8.00
$7.15
$5.00
$5.60
$4.97
$5.60
$5.60
$/ kg
$/ kg
$7.00
$6.00
Store Lamb (27-30kgLW)
$4.00
$3.00
May-10
May-11
- 2 Weeks - 1 Weeks This Week
Ago
Ago
$4.40
$4.00
$3.60
$3.20
$2.80
$2.40
$2.00
$4.90
$4.50
$4.10
$3.70
$3.30
$2.90
$2.50
$4.44
$3.90
$3.74
May-10
May-11
$3.05
$3.05
$3.00
$2.26
May-10
May-11
-2 Weeks -1 Weeks This Week
Ago
Ago
P2 Bull (295-320kg)
$3.90
$4.00
$/ kg
$/ kg
P2 Steer (295-320kg)
$3.90
-2 Weeks -1 Weeks This Week
Ago
Ago
$4.90
$4.50
$4.10
$3.70
$3.30
$2.90
$2.50
$4.44
$4.00
$3.71
May-10
$4.00
$4.10
May-11 -2 Weeks -1 Weeks This Week
Ago
Ago
OTHER INDICATOR PRICES
SI Lamb Schedule
NI Local Trade Beef
NI 220-245 kg P Cow
$5.50
$3.95-$4.00
$3.15
SI Bull Schedule
NI 220-245 kg M Cow
NI Venison 60 kg stag
$3.60
$3.00
$7.15
PGG Wrightson Ltd Wool Sale Report
17th May 2012
US $0.7645
0.7645
STRONG SEGMENT INDICATOR
TYPE QUOTES
H Fleece
H Fleece
Ewe Fleece
Ewe Fleece
2nd Shear
2nd Shear
Lambs
Lambs
35m 3-4"
35m 2-3"
39m 2-3"
38m 4-6"
37m 3-4"
37m 2-3"
28m 2-3"
29m 2-3"
-5.7%
416
+6
SALE PRICE
(Clean)
YIELD
n/a
365
n/a
n/a
427
341
518
523
Napier
SALE PRICE
(Greasy)
76%
277
80%
80%
80%
80%
342
273
414
418
CHANGE ON
LAST SALE
0
-21
0
0
-10
-8
+4
0
AgLetter: Baker & Associates (Wai) Limited. Not to be reproduced or distributed in any form
5
Notices
Wairarapa Farming for Profit Programme –Tuesday 29th May.
Mike McCreary: Kumenga South Wairarapa. Quad Bikes Required
Round up of establishment and management techniques for Plantain, Chicory and high performance pastures: (Elton Mayo
Agricom). NAIT questions and answers. IED gear demonstrated (Gallagher & Allflex). In-Lamb Hogget management (Dr
Grant Kenyon – Massey). On-farm Best Practice: “Practical Health and Safety programmes”. Chris Garland
Baker & Associates Remuneration Survey 2012
We will be conducting our biennial sheep and beef remuneration survey through May. You will receive an input form by
email and mail. We would be grateful if you could participate as you have in other years. We should have the results
available by mid to late June. We can take your surveys up to the end of this week. Thanks.
Outdoor Forestry Position
Woodnet is a forest consultancy company based in Masterton and is looking for someone to join their inventory team on a
casual basis from June until the end of this year. If you have a high level of integrity, are fit, computer literate and don’t
mind long days ex Masterton and/or camping out on rural properties around NZ then we would love to hear from you.
If keen, please register you interest with [email protected]
STORE MARKET REPORT
Southern NI prices quoted in saleyards unless otherwise stated. SI Prices mainly on-farm
F = Firmer. S = Steady. W = Weaker
SOUTHERN
NORTH ISLAND
New Season’s Store Lambs
Heavy
(35-40 kg)
Medium
(28-35kg)
Ewe Lambs
Small
(28-35 kg)
(24-28 kg)
Works Ewes
Heavy Export Ewes
AngusX (230+)
Other
Weaner Heifers 230-270 Kg
Weaner Bulls (F) 200 kg
Weaner Stags (Red)
Weaner Stags (Hybrid)
Weaner Hinds (Red)
Weaner Hinds (Hybrid)
S
F
F
$3.10
$95
S
S
S
S
W
W
S
F
$100
$80
$1.80-$2.00
S
S
S
$1.50-$1.70
$1.70
S
S
S
S
S
S
S
$2.40
S
$2.20
$2.20
S
S
W
W
W
W
$2.80
$2.90
S
F
$2.90
F
$3.25
$87
F
F
$3.20
$90
S
S
S
S
S
S
$90
$80
$2.10 (Ang)
$2.10
$1.90-$2.00
$1.90
$2.30-$2.40
$2.50-$2.80
$2.40
$2.30-$2.60
$2.70-$3.00
$4.80
$5.00
$4.00-$4.10
$4.30
S
S
S
S
S
W
W
W
W
$2.65
$2.75
$2.50
$2.30
$2.30
na
$4.50-$5.00
$5.00-$5.50
$4.00 (fattening)
$5.00-$5.30
OTAGO/SOUTHLAND
$2.80
$2.70-$2.80
$2.75-$2.90
$2.45-$2.60
$2.40-$2.50
Local Trade Ewes Heavy (28 kg) $95
Med (25 kg)
$80
$2.00-$2.10
R2 Steers (Tops)
$2.10-$2.25
(Medium)
$2.00-$2.10
R2 Heifers
$1.90-$2.05
R2 Bulls
Weaner Steers AngusX (270+)
CANTERBURY
S
S
S
S
DISCLAIMER
This newsletter is confidential to subscribers. It is not to be reproduced or distributed to any other party without express prior approval. The opinions
and facts provided are based on verified data believed to be correct at the time of writing.
Prices and quotes will however be subject to change without notice. Baker and Associates (Wairarapa) Limited accept
no liability for any loss or damage that may result from actions or failure to act upon information provided herein.
AgLetter: Baker & Associates (Wai) Limited. Not to be reproduced or distributed in any form
6