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Home / Business / Companies / Freight and logistics

<i>Owen Hembry:</i> Wrong move on the price of fish

Owen Hembry
By Owen Hembry
Online Business Editor·
7 Oct, 2007 04:00 PM7 mins to read

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Owen Hembry
Opinion by Owen Hembry
Business news editor, NZ Herald
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KEY POINTS:

Last week's Auckland Seafood Festival was a golden opportunity to expose the masses to a wider variety of our ocean's bounty - unfortunately it missed the bullseye.

Entry prices for the festival started at $25 a person, which is not cheap and would certainly discourage the merely curious.

The festival was a prime chance to extend people's palates and shopping trolleys beyond the beloved hoki, snapper and tarakihi.

However, once inside what was on offer came at a price - often not cheap - discouraging a wide exploration and potentially leaving a bitter taste.

The festival was also fenced in to what felt like a claustrophobic area, with no obvious view of the harbour. Had the festival been held in the city centre it would have been hard to tell the difference.

A 15-minute wander up one side of the main tent and down the other and you felt as if you were done.

A pamphlet of discount vouchers for use at the adjoining fish market was a great idea for encouraging people to be more adventurous and buy some fish to eat later at home.

Taste it at the festival and then buy it next door. Simple. But, bizarrely, the vouchers were not valid until the day after the festival ended. Confusing and discouraging.

Two things need to happen here. First, either charge a more reasonable price to get in and then provide a wide variety of free tastings - they don't have to be big and people can buy a full plate if they want to - or make it free entry and charge for the food.

But definitely don't do both.

Second, spread out a bit, give people room to wander between stalls and make more use of the quayside to connect the event to the sea.

I had a nice ice-cream but I'm guessing that wasn't the point.

FARMERS CROPPED

Growers in some horticulture and arable sectors expect to make low profits or losses from the 2007 harvest season, says a Ministry of Agriculture and Forestry report.

Revenue has been hit by the high exchange rate, which cut export returns and increased domestic competition from imported produce.

Principal adviser Irene Parminter says the rise of the New Zealand dollar during the main pipfruit and kiwifruit selling period from March to July cut export returns by up to 15 per cent.

"These growers, especially those on small-scale properties, have increased their reliance on off-farm income and investments," Parminter says. "As well, many have moved to suspend principal repayments."

Based on typical model operations, the report found Marlborough wine grape growing continued to be profitable, with good yields in the 2007 harvest improving profits in the Hawkes Bay.

Increased operating surplus in 2006/7 for the arable model reflected more crop on hand as opposed to cash.

"In the vegetable and arable sectors where fertiliser, electricity and fuel costs make up a significant proportion of total operating expenses, cost increases in these inputs are affecting financial outcomes," Parminter says.

However, the report also found optimism among growers, with investment to improve returns in the medium term. Land use change was particularly evident in Marlborough with the switch to grape production from less profitable operations in horticulture, arable and pastoral activity.

"Widespread land use change is, however, unlikely in the other sectors covered in the report in the short-term."

PLEASED TO MEAT YOU

A potential merger between PPCS and Alliance Group may have come to nothing last month but the meat processors will work together on an industry project looking for new opportunities to export lamb.

The two farmer co-operatives will join Affco, Anzco and Meat & Wool New Zealand in a project to assess emerging economies for market opportunities.

Meat & Wool chief executive Mark Jeffries said the combined scale of the companies would create funding leverage not otherwise available.

"While our UK and European lamb markets remain a priority, this new project aims to provide information for a number of New Zealand lamb exporters to consider collaborative opportunities in non-quota markets," Jeffries said.

"The markets to be analysed in this new project will include China, Russia, Eastern Europe and India, as they are likely to have considerable potential."

A working group will undertake desk-top analysis of opportunities using past experience and market study.

"This project is a start for export companies to assess opportunities for new markets, and how collaboration among New Zealand exporters may present a better chance of success."

TOPPLING TREE TROUBLE

Forestry biotechnology company Horizon2 has called in an overseas sleuth to help to find out why some of its mother plants used for a pinetree breeding programme are turning yellow, becoming weak and dying.

"The game's afoot, Watson."

But in this case it's not Holmes hot on the trail but David Thompson, Irish-based expert on somatic embryogenesis - not as it might sound the process of getting unborn babies to sleep but rather the process Horizon2 uses to clone its plants.

Propagation technologist Kiri Armstrong says considering each mother plant produces 50 trees they are very valuable.

"We take the cuttings off them by hand and just moving some of the branches a little to take a cutting, or brushing past the tree while walking down the row, can cause them to snap at the base."

The problem has got Horizon2 stumped, she says.

To mitigate the problem until a cause could be found, an additional step was being applied to half the mother plants - the company planned to propagate 80,000 plants this year - but this could increase the production time for customers' trees from about three to four years.

The company turned for help to the Foundation for Research, Science and Technology's Global Expert service, which connects businesses to a global network of 20,000 technology experts.

The service led Horizon2 to Thompson, who arrived at the company's Whakatane base last week for a two-week investigation.

RURAL REAL ESTATE RISE

The sale price for all types of pastoral real estate will increase during the quarter ending November, according to a Massey University real estate market outlook survey.

A panel of rural market experts identified dairy farms and land deemed suitable for conversion as the categories with the greatest potential for price rises.

The top two candidates are perhaps unsurprising considering Fonterra's record forecast payout of $6.40 for this year, with some economists predicting it could even top $7 a kilogram of milk solids.

A net 90 per cent of panellists forecast the price of dairy farms to rise, arable and fattening farm price rises were expected by 60 per cent, 40 per cent predicted rises for the hill country but only 20 per cent forecast price rises for the horticulture sector.

However, the survey noted it had taken a broad approach and that within horticulture some areas such as those dominated by viticulture could have a more optimistic outlook.

HERBAGE GOES BANANAS

Herbage seed prices are rising to unprecedented levels with higher demand after weather affected harvests overseas and increased grain production, says Hugh Wigley, chairman of the herbage seed-growers subsection of Federated Farmers.

New Zealand growers produce seeds for various forage types, turf grasses, pulses, clovers and vegetables, generating $94 million in exports in the year ending March 31, plus providing sufficient seed for the regrassing needs of the domestic pastoral industry.

The mostly exported Nui grass variety is being quoted at $2.20 a kilogram for the 2009 harvest, compared with a previous high of $2 a kilogram.

"Growers are advised before signing a contract for seed for the 2009 harvest to check out options and prices thoroughly," Wigley says.

Many areas overseas that would normally be used for grass seed production were being planted for wheat, the price of which had risen by about half on its previous high, Wigley says.

"The Europeans are now coming here to make up that shortfall."

Higher than expected dressing losses in Oregon followed by indifferent weather during the growing season had resulted in a lower than expected turnout to market.

"In Europe, wet harvest conditions have reduced both quantity and quality of the 2007 harvest.

"It is important to note that the New Zealand herbage seed harvest is the last harvest in the world, and any shortfall in the world seed harvest will have to be met from New Zealand."

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