Maori agribusiness on the brink of ‘enormous growth’

 

SUE O’DOWD

 

 

PKW’s new livestock company allows the large Taranaki Maori farming operation to further integrate the various arms of its business.

Te Oranga Livestock began operating in September last year.

“Our strategy has grown and our cattle numbers have grown, so we have created our own livestock company to support our long-term goals,” Parininihi ki Waitotara (PKW) chief executive Dion Tuuta said. “It’s a logical progression and allows us to retain value within our own system.”

In 2011 PKW took a major step towards growing its active business, putting managers on some of its dairy farms and taking on herd ownership. A specialist state-of-the-art calf-rearing unit capable of rearing 1800 calves a year at Matapu in South Taranaki followed.

Te Oranga Livestock’s focus of caring for the incorporation’s animals and growing them to be the best they can be is reflected in the name, which means healthy.

The incorporation held a competition among shareholders to provide a name for the new company and Waiokura Marae trustee and PKW shareholder Trish Hemara-Wahanui made the winning suggestion.

Tuuta said the appointment two years ago of Andrew Gibson to the new role of drystock operations manager brought a new skillset and new ideas to PKW.

Gibson said Te Oranga Livestock would allow the incorporation to capture and retain the value of its livestock transactions, which included leasing and selling service bulls, and buying and selling dairy cows, heifers and calves.

Calving of 200 autumn friesian and friesian-cross cows in-calf to wagyu bulls will begin on March 1. The calves are being reared to 90kg on contract to Hastings-based FirstLight Wagyu.

The calves will be raised in PKW’s Matapu calf unit which is self-sufficient in calf milk following the purchase of a farm to milk cull cows once a day.
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Meanwhile, the first calves reared in the unit will calve next season and will be distributed throughout the dairy business. “The calf unit allows us to grow our own herds because the animals we raise can go on our own farms,” Gibson said.

More than 1300 dairy calves are expected to be born on PKW farms next season. Surplus calves will be sold through the new livestock business. Charolais and red devon bulls will be used in future to provide high-value beef calves.

All PKW’s calves are weighed monthly and exceed the Livestock Improvement Corporation’s MINDA weights. “We’re trying to be self-sufficient and to have complete control over our own young stock because we’ve had negative experiences with outside graziers.”

Te Oranga Livestock is working with most other livestock companies in Taranaki and plans to auction a herd later this season, in conjunction with PGG Wrightson. It is also exploring the possibility of holding its own bull sale next season. An auctioneer for 10 years, Gibson has applied for an auctioneer’s licence for the new company.

Tuuta said PKW had grown its stock numbers from 400 in 2008 to more than 8200 calves, heifers, cows and bulls, including 1500 beef animals.

Currently, it operated nine drystock farms and 14 dairy farms and this season’s dairy production was ahead of budget. The 2013-14 season was the first time production exceeded 3m kg MS. PKW is Taranaki’s largest supplier to Fonterra.

“With Fonterra’s low payout forecast, we’ve had to revise our budgets to make sure we live within our means. We’ve made cuts where we can, but production is going well. It’s 7 per cent ahead at this stage – although, like everyone, we’re watching the sky for rain.”

The incorporation had plenty of supplement. “It’s a good space to be in. We’re well-provided for.”

Increased production was part of PKW’s strategy of active farming. “We’re no longer passive landlords, although leasing land is still an important part of the wider PKW incorporation’s group of businesses.”

Not all leased land purchased by the incorporation would be converted to dairy farms because it needed grazing land.

Although PKW had undergone phenomenal expansion in recent years, it still actively farmed only 15 per cent of its land. The remainder was under perpetual lease. “Maori agribusiness is an exciting area to be part of,” he said.

Plenty of opportunity lay ahead. “There’s significant momentum in this sector for Maori.”

Long-term, PKW’s focus was cash-flow for the benefit of shareholders, not capital gain. Tuuta said PKW was in the process of expanding its key relationships with Ngai Tahu and other Maori agribusinesses for collaboration in an area of the economy that was poised for enormous growth.

– Taranaki Daily News

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