Mike Petersen Agricultural Trade Envoy

March 2014

Mike Petersen has a new role after 10 years as chair of Beef + Lamb New Zealand

Mike Petersen was previously the Chairman of Beef+Lamb NZ and on 1July 2013 was appointed NZ Special Agricultural Trade Envoy, an appointment made jointly by the Minister of Trade and the Minister for Primary Industries.

Offshore he represents the meat, wool, dairy, horticulture and wine sectors, and also does some on-shore hosting of visitors.  Mike travels for a couple of weeks four times a year, but in his first six months of office, had already completed four trips.  He has also been active in advocacy and diplomacy in support of the Trans Pacific Partnership trade talks.  When he’s in New Zealand the role takes up about half a day a week.

Mike still does most of the work on the farm at Waipukurau, explaining that the farming business has been simplified significantly by taking deer out of the mix. “It was another complication that made the farm more difficult to run. It’s harder to get staff to work with deer, as not many people have experience working with them.”

The farm is 350 effective ha, and is now a finishing operation with 500 bulls and 5,000 lambs finished a year.

There’s no breeding at all now, both because of the dry area and because breeding is more labour intensive.  “This means I can effectively run the farm on my own with help from my 76 year old father David.  My wife Rachael works part time as a nurse in Hastings, and she’s pretty busy the rest of the time looking after our three kids who are 17, 15 and 12.”

“The farm works really well the way it is. Dad shifts the bulls when I am away working in my off-farm roles. I just make sure the farm is well set up, and we prepare and weigh ahead of time.”

Mike has very specific finishing windows, with lambs grazing crops in summer.  None are on grass.   He also uses plantain to finish the lambs.  Then another batch of lambs go onto new grass for winter finishing, sometimes on a liveweight gain contract.

The bulls are all finished up until Christmas, and gone before the farm gets dry in mid-summer.

Farm rainfall has averaged 950mm a year since 1990 and up to 1255mm, but in the last three years has averaged 815mm. Of the last seven years, six have been very dry, and since the family started recording rainfall, from August 2012 to May this year was the driest 10 months they’ve had.

Their simplified system is better adapted to the climate too, Mike says. But that’s no different from most other farmers.  “We have been adapting for the last 30 years; it’s what farmers do.”

“I get a little bit tired of people telling me how the sheep and beef industry is dying. I can’t complain about the opportunities farming has given us. We have been able to earn a good living out of it. I think sometimes people expect the world to fall at their feet; you have to work hard and be good at what you do.”

“On the farm here we want to keep evolving, and we are talking about succession quite a lot with our kids.  It may be that our kids won’t be farming this property.  We are only five minutes from town, and it’s a bit more of a lifestyle block area.”

“The future for me farming in Central Hawke’s Bay is to have part of our farming footprint in the Ruataniwha dam catchment area.  The benefit is not necessarily having the whole farm irrigated, because our farm is outside the catchment.  It may be that we have an irrigated block in the catchment.  We are only 10km away from where the water will be.”

“A 500m centre pivot can fit on an 88ha block of land.  We are not talking big sums of money to get a footprint in the catchment.  I think that is an incredible opportunity.”

A 100ha irrigated area will finish at least 5000 lambs, which is more than most farmers in this area would grow.

“The dam will have a massive impact on Hawke’s Bay.  The biggest impact will be the environmental benefit.  The Tukituki River runs the length of Hawke’s Bay, and if you can get a storage facility that raises minimum flows from 3.5 to 5.3 cumecs/second, and have the ability to have monthly flushes of water down the river, you have set up the future life of the river for the next generation.”

“There is no suggestion we are going to have unbridled intensification. Assuming the dam goes ahead I am sure it will be better managed than it is today.”

The second benefit is for those in the catchment. Users now and in the future will gain value from the water. “I have yet to see a user of water that would go back to farming without it.  Often it’s hard to make the case for water on individual farms stand up to scrutiny, but I haven’t found anyone who has gone into irrigation and regretted it.”

“The third impact is that the whole community will share in the benefits. Ashburton is the fastest growing town in New Zealand, bustling with commercial activity with services and infrastructure support or businesses growing on the back of irrigation. “

“But I don’t think the proponents of the dam have done a good enough job promoting the benefits of it.  There are always people who don’t want change and don’t want progress.  This is all about progress.”

Mike has done a lot of riparian protection work on his farm with pines and in the past two years with native species.  “There is nothing special about it; we are just creating buffer zones for the waterways, and leaving the farm in a better shape than when we got here.  I am not an environmentalist or a passionate tree man.  I get people in to help who know what they are doing. For me it is the right thing to do in an overall sense.”

Mike says New Zealand has a role in helping other countries deal with their food security. “It’s not an opportunity but a responsibility of ours.  Food security is a real issue.  We have an abundance of food in NZ, and we don’t actually take it seriously.  When you go to countries overseas there is real concern about where the food will come from to feed their people.”

“New Zealand has a huge opportunity in this space to capitalise on that. However, more than that, we have a real responsibility to help these countries feed their own people. It’s about exporting our products but also exporting our farming systems to help them.  It’s our comparative advantage, and something we can really share and use offshore to advance New Zealand’s interests.”

“When we talk about food security it is really about water, and having enough water to produce food. It comes back to the example of the Ruataniwha dam.  I have met investors offshore who would buy the Ruataniwha dam tomorrow if they could because they see how strategically important it is.”

“We know that investment in subdivision, fertiliser and water will return 25-25% return on investment.  When you can borrow money at 6% that is a very attractive return.  High predictable yields of 5-8% are difficult to achieve in farming, and offshore investors think 3% is a very fair return.”

“Overseas investment in New Zealand is a non-issue.  I work for an offshore investor who owns land in Gisborne, so I’ve seen it firsthand.  I think fewer and fewer people will come here and buy farms.  That’s because they now realise they don’t need to buy land to gain access to food.”

“For example the Chinese company buying into Synlait’s processing business isn’t buying the farms, but it is investing in the processing business.  Foreign investors who come here are investing millions into farmland and employing people.  I have yet to see any foreign investor in farms take profits out of New Zealand.  I’ve only seen them reinvest any profits back into New Zealand farms.  They can’t take it away, they end up creating wealth. It is a good news story.”