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New Zealand
However, if an individual does not come through that
process successfully, he/she can, with the backing of
thirty five members, put themselves forward. Leonie
Foster/Guiney, a woman well known to many Irish dairy
farmers from her time as a consultant in Ireland, used
that route to gain a board seat. A sitting board member
was unsuccessful in the same round of elections. Olin's
opinion is that there was an appetite for change in the
air, with many Fonterra members wanting fresh faces to
represent their interests: "Fonterra has been through a
difficult time with profits falling and increased debt levels.
Some of the financial woes appear to stem from Fonterra's
incursion into China, setting up dairy farms, which do not
appear to be profitable after considerable establishment
NZ government driving environmental standards
In response to a question on how new environmental
regulations will impact on New Zealand dairy farming,
Olin does not foresee wholesale departures from the
sector: "We will have further incremental changes with
the accelerator being the change in government. There's
greater awareness around environmental problems
and a new strategy involving everyone in the industry
in improving water quality. The irony is that the
quality of water here is extremely good by international
comparisons. Some vulnerable regions such as Southland
where most cows are outwintered, will be under pressure
to reduce the environmental impact of dairy farms.
Lower stocking rates along with capital infrastructure for
housing and slurry storage will be aspects of the solution.
In the Waikato it's less of an issue with fewer waterways
in the region. Smarter nutrient use will also be involved,
though a lot of these things are already happening
and farmers aren't getting due credit for that. The
overwhelming majority of farmers are working well within
the regulations and have their facilities and infrastructure
in order." While Olin thinks that New Zealand may have
reached `peak cows', he still believes that there is room for
increased productivity and output from the current herd.
Monitoring dairy farms
The New Zealand Dairy Industry Restructuring Act
(DIRA) is to be reviewed and that may place additional
environmental monitoring on dairy farmers. Originally
enacted to ensure that Fonterra did not abuse its
dominant position, there is scope for it to be used to
identify and refuse milk collection to farmers deemed
not to be operating at required environmental or animal
welfare standards.
Land prices softening
With more dairy farms on the market than previously,
Olin describes the situation as a buyer's market: "Some
are older farmers without successors. There are those
who haven't upgraded their facilities and are unable or
unwilling to make that investment. That has resulted
in a softening of land prices, especially in the marginal
areas. That will, I think, continue and the Capital Gain
associated with land trading will not be as lucrative as in
the past. That signals a new era in New Zealand dairy but
not a drastic change in the foreseeable future. Very high
debt levels on some farms are matched by very low debt
on the majority of farms.
Early Christmas gift
Jack Greenan will be five years old in December and
will be off to school after Christmas. An early Christmas
present came for Olin in the form of a great victory for
Ireland over the All Blacks: "There was a divided house
during the game but it makes for a great dynamic in the
family." Olin concluded his conversation by wishing his
family, friends and acquaintances in Ireland a Happy
Christmas and prosperous New Year.
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