Our fastest ever trade deal is struck with the United Arab Emirates, crush protection device scheme proves popular with Kiwi farmers, and new survey explores dairy farm ownership.

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Our fastest ever trade deal is struck with the United Arab Emirates

Our agricultural sector has received a welcome boost with the announcement of a free trade agreement between New Zealand and the United Arab Emirates. The deal, confirmed after just four months of negotiations, has been hailed as the fastest-ever concluded by New Zealand.

Trade Minister Todd McClay and UAE Minister of State for Foreign Trade Dr Thani Bin Ahmed Al Zeyoudi unveiled the agreement at Parliament, marking a significant milestone in bilateral relations.

Federated Farmers president Wayne Langford is pleased with the deal, noting its timely arrival amidst a challenging year for farmers grappling with high costs and tight margins. 

The UAE stands as one of New Zealand's key markets in the Middle East, with exports totaling NZ$1.1 billion in the year to June. The agreement is expected to have a particularly positive impact on the agricultural sector, with dairy exports to the UAE valued at $718 million, red meat at $46 million, and horticulture at $44 million.

The swift conclusion of this agreement has been viewed as a reassuring sign of the government's commitment to opening new markets and reducing tariffs for New Zealand exporters. Langford pointed out that the deal would redirect millions of dollars previously earmarked for tariffs directly into rural communities.

The UAE's Minister Al Zeyoudi expressed his country's high regard for New Zealand as a long-standing trade partner, anticipating that this Comprehensive Economic Partnership Agreement will further strengthen bilateral relations and create new opportunities for private-sector growth in both nations.

Tariff elimination boosts outlook for red meat exports

Meanwhile our red meat sector is welcoming the newly announced trade agreement, viewing it as a significant opportunity for growth and market expansion. The deal, which eliminates all tariffs on frozen beef and sheepmeat upon implementation, has been warmly welcomed by industry leaders.

The agreement is particularly crucial for New Zealand's halal-certified exports, which comprised 37 percent of total red meat exports and were worth approximately $3 billion in 2023/24. With over 75% of the UAE's population being Muslim, the country represents a key halal market seeking reliable sources of high-quality red meat that meets strict halal requirements.

Beef + Lamb New Zealand Chair Kate Acland sees this agreement as a welcome boost for farmers facing tough financial times. She emphasised that improving market access is critical, with approximately 60 percent of export revenues flowing through to farmers.

Both Guy and Acland highlight the alignment between New Zealand's strong environmental credentials and the UAE's interest in sustainability. This alignment positions New Zealand's red meat sector to provide UAE consumers with assurances that their food choices align with their values.

Fonterra faces future challenges despite financial gain

Fonterra has made significant strides in its financial position, but Chairman Peter McBride emphasises that there's still a long road ahead. The company's financial results announcement on Wednesday paint a picture of progress tempered with cautious optimism.

While Fonterra surprised the market with a substantial dividend of 55 cents per share, including a special dividend of 15 cents, McBride stressed that this achievement is just one milestone in an ongoing journey. The dividend announcement comes despite a slight dip in net profit and revenue, highlighting the complex landscape Fonterra navigates.

The cooperative has successfully reduced its net debt to $2.6 billion, a marked improvement from $5.2 billion in 2020. This financial restructuring has improved Fonterra's gearing ratio to 24%, down from 44% four years ago. However, McBride notes that maintaining this financial discipline remains a key challenge in the volatile global dairy market.

Fonterra's return on capital of 11.3% surpassed its target, and the company has lifted its forecast farmgate milk price. Yet, McBride cautions that sustaining this performance in the face of international market pressures and changing consumer demands will require continued effort and strategic planning.

The upcoming unveiling of Fonterra's updated long-term strategy next week will be crucial in addressing these ongoing challenges. Recent changes in the management team, including key departures and internal promotions, also highlight the dynamic nature of Fonterra's leadership as it gears up for future challenges.

Today’s Dairy Exporter Podcast Episode 37 has an indepth look into this week’s Fonterra’s results announcement as how it affects our dairy farmer. Available where you get you podcasts.

Crush protection device scheme proves popular with Kiwi farmers

Over 150 farm enterprises have now received vouchers to acquire crush protection devices (CPDs) for their quad bikes at a heavily discounted rate, as part of the Safer Rides pilot scheme which aims to enhance quad bike safety on New Zealand farms.

This initiative, with backing from Rabobank and other primary sector partners, offers a $400 voucher towards the purchase of a CPD. The scheme has gained momentum with additional support from FMG Insurance, PGG Wrightson, and Silver Fern Farms, allowing for the distribution of 43 extra vouchers beyond the initial allocation.

Lindy Nelson, Safer Farms' Farm without Harm Ambassador, says there was high demand for the vouchers, with 40% of the initial allocation already redeemed.

The focus on CPDs stems from farmer feedback about the life-saving potential of rollover bars. Between 2019 and 2023, New Zealand witnessed 22 quad bike-related fatalities, predominantly involving rollovers on steep terrain. CPDs create a protective space under an overturned quad bike, potentially saving lives by allowing the rider to survive or enabling the bike to roll off.

Nelson, a Wairarapa farmer herself, emphasized that while quad bikes are essential for many farming operations, installing a CPD can significantly enhance safety for all users. The scheme addresses the cost barrier, which has been identified as a major hurdle in adopting these safety devices.

The Safer Rides initiative is part of Safer Farms' broader Farm Without Harm strategy, which aims to reduce accidents and fatalities in New Zealand's farming sector. As the program concludes its pilot phase, organisers are working with industry partners to develop a long-term plan for making safety devices more accessible to the farming community.

New survey explores dairy farm ownership

Smaller Milk and Supply Herds, known as SMASH, is reaching out to the dairy community for help with an important industry survey. This farmer-led organisation, which hosts events nationwide on farm and animal management, is now turning its attention to understanding the various routes to farm ownership.

SMASH is inviting all dairy farmers to participate in an online survey about their career paths and future plans. The group aims to gather insights on how today's farmers are achieving their ownership dreams and what career goals look like in the current dairy farming landscape.

Whether you've already purchased a farm, are planning to buy one, or have different career aspirations in the dairy industry, SMASH wants to hear your story. The organisation emphasises that all perspectives are valuable, regardless of where farmers are on their career journey.

Once collected, SMASH plans to share the survey results widely, ensuring that the entire farming community can benefit from the accumulated knowledge and experiences.

Recognizing the value of farmers' time, SMASH is offering an incentive for participation. Survey respondents will be entered into a draw to win one of two Kapiti Cheese hampers, each valued at $200 and kindly donated by Fonterra.

The initiative is being conducted with funding and support from the Ministry for Primary Industries' Sustainable Food and Fibre Futures Fund and DairyNZ, and two Kapiti Cheese hampers worth $200 are up for grabs.

Farmers interested in taking part can find the survey on the SMASH website at www.smallerherds.co.nz.