Market backs voters

September 22, 2014

The share market reacted positively to the election result:

New Zealand shares jumped, led by MightyRiverPower, after the National Party’s convincing election victory on the weekend wiped out any regulatory fears for the power companies. Meridian Energy, Genesis Energy and Contact Energy paced gains.

The NZX 50 Index advanced 54.947 points, or 1.1 percent, to 5236.292. Within the index, 27 stocks rose, 13 fell and 10 were unchanged. Turnover was $144.2 million. . . .

“The market is buoyant and led by the power companies, which is not a surprise, given the regulatory risk declined with the National party coming into power again,” said Shane Solly, director at Harbour Asset Management. The return of the National government means a” a consistent framework and more of the same” giving the market certainty.  . .

The market likes certainty.

Business does too and it’s good not just for businesses but the jobs which depend on them.


Rural round-up

August 20, 2014

Waitaki River group objects to planned changes:

The Canterbury Regional Council is promoting changes to give growers and Meridian Energy, which runs the Waitaki hydro-power scheme, certainty of water supply.

But a Waitaki River users group says a deal to drop the river’s minimum flow would badly harm an already sick river.

The Canterbury Regional Council is promoting changes to give growers and Meridian Energy, which runs the Waitaki hydro-power scheme, certainty of water supply.

The plan includes a cut to the minimum flow by a third during a dry spell. . . .

Shark finning to be banned from 1 October:

A ban on the finning of all shark species within New Zealand waters will take effect from 1 October this year, Conservation Minister Dr Nick Smith and Primary Industries Minister Nathan Guy announced today.

“Implementing this ban has happened much faster than originally proposed. It reinforces New Zealand’s strong international reputation for sustainability and protecting our natural environment,” Dr Smith says.

The Ministers released a revised National Plan of Action for the Conservation and Management of Sharks (NPOA-Sharks) earlier this year, which included a commitment to phase in the ban on shark finning in New Zealand by October 2016 at the latest. A first tranche of shark species was to be covered by the ban from 1 October 2014, a second tranche from 1 October 2015, and only the highly migratory blue sharks was to be left until 1 October 2016. . . .

Botulism scare prompts diary working group:

Last year’s botulism scare has prompted the creation of a new working group in the dairy processing sector.

It was one of the recommendations of the independent Government inquiry into the whey protein concentrate contamination, which sent shock waves through New Zealand’s dairy industry.

The inquiry highlighted a shortage of experienced people with processing expertise and so the group has been set up to fix that.

The working group will be chaired by Northland dairy farmer and former Fonterra board director, Greg Gent, who said it was an exciting project. . .

NZ software could scupper mouse outbreaks:

A New Zealand-designed software system designed to predict and tackle mouse outbreaks is being trialled in Australia.

MouseAlert is an interactive website which uses mapping technology to enable arable crop growers to record and view mouse activity in their local area in real time.

Landcare Research has been providing the expertise on building this information into computer models which can then forecast plagues of mice. . .

Farmers welcome GlobalDairyTrade stabilisation:

Federated Farmers is pleased to see stabilisation in the latest benchmark GlobalDairyTrade (GDT) online auction result but warns price volatility will likely continue until well into the last quarter.

“It is great to see GDT average still in the US$3,000 a metric ton range but that slight 0.6 percent fall means we are on exactly US$3,000,” says Andrew Hoggard, Federated Farmers Vice-Chairperson.

“It seems to underscore how similar this season is to 2012/13. At a similar point two seasons ago, the average winning price was just US$54 more except it had come up from the high 2,000’s.

“But before anyone traipses back to the beginning of the year to make a more dramatic story, any price before 1 June is completely irrelevant when you are talking about this 2014/15 season. . .

 

China dangerous market reliance or exciting market growth? – Andrew Watters:

The economic growth of China over the past four years has resulted in huge demand for New Zealand dairy and meat products; lifted our terms of trade to historical highs and provided a major fillip to agriculture and the wider NZ economy.

However the somewhat dramatic slide in global dairy prices since their peak in midFebruary has the appearance of China exiting the market causing demand to stall.

It has prompted several commentators to ponder whether exciting market growth has become market over-reliance.

At MyFarm we see ‘China growth’ as a major boost to farming industry returns – one that will have a profound affect for the next two decades. . .

 

Informercials used to sell NZ meat in China - Dave Gooselink:

TV shopping shows and infomercials have become a popular way of selling everything from exercise equipment to kitchen and beauty accessories. But one New Zealand company has struck gold in China with a very surprising product – packaged meat.

It’s home shopping as most Kiwis will be familiar with, but the Chinese shopping show is selling something a little unusual – prime cuts of New Zealand beef and lamb.

Most of us Kiwis, we’d never think about buying our lamb or beef on a TV shopping channel,” says Silver Fern Farms head of sales Grant Howie. “But in a 30-minute slot earlier this year, we sold 12.5 tonnes of our beef.” . .  .

Minister approves Marlborough coastal plan changes:

Plan changes to enable three new salmon farms in the Marlborough Sounds were signed off today by Conservation Minister Dr Nick Smith at a function at the Marlborough District Council with Mayor Alistair Sowman and representatives from NZ King Salmon.

“These three new salmon farms at Waitata and Richmond in Pelorus Sound and Ngamahau in Tory Chanel are hugely important to Nelson and Marlborough’s aquaculture industry and wider economy. They will enable NZ King Salmon to grow its products from the current 6000 tonnes per year to 9000 tonnes per year in 2015 and 13,000 tonnes per year by 2033. These new farms will grow our GDP by $120 million per year, our exports by $50 million and employment by 150 new jobs,” Dr Smith says.

“I am well satisfied that our region can maintain the conservation and recreation benefits of Marlborough Sounds while enabling the growth of the aquaculture industry. These three farms will take up only about five hectares of surface water space out of a total area of over 100,000 hectares in the Sounds, or less than 0.01 per cent.” . .

The forest safety battle is not yet won

Point scoring in the media will not make our forests safer places to work, says the Forest Owners Association.

“The unions are claiming credit for a sudden reduction in the fatality and serious accident rate and Worksafe NZ is slamming us for a lack of safety leadership. These comments are unbalanced and unhelpful,” says association president Paul Nicholls.

“Political posturing and blaming others won’t save workers lives. To transform the industry’s safety culture, participants will need to acknowledge their past shortcomings and to share experiences and knowledge. They are less likely to be open to this if they are being publicly pilloried.” . .

Implementing Reform:

The sweeping reforms to the ways water is managed, as recommended by the Land and Water Forum two years ago, are now beginning to be implemented. The final shape and rate of reform will be very dependent on what government is elected in a few weeks. Therefore this is a particularly apt event looking at policy reforms that could reshape the way we manage and think about water.

“Implementing Reform” is the theme of the Water NZ annual conference being held at Hamilton’s Claudelands convention centre in the final week of the election campaign – 17 – 19 September.

Water reforms already implemented in Australia will be discussed in the first two sessions of the conference starting at 9.40 am on Wednesday 17. . .

 

 


Rural round-up

July 4, 2014

Red Meat Profit Partnership tries to answer crucial question - Allan Barber:

Analysis of the objectives and methodology of the RMPP suggests the programme has highlighted the most important issue facing the red meat sector. Briefly stated, it is to work out why there is still such a significant gap between the top farmers and those in the middle of the pack and to lift the average closer to the top performers.

When the Red Meat Sector Strategy identified behind the farm gate specifically as a major area of potential improvement, there was much mumbling about why the industry structure wasn’t being more usefully exposed as the area most in need of improvement. But figures released by the B+LNZ Economic Service show this isn’t the case. . .

 Out of cow muck comes magic – Emma Rawson:

Although it has grizzly beginnings in the blood and gore of the meatworks, there is a fairytale element to the story of biomaterials company Southern Lights.

A little like the Brothers Grimm’s goblin Rumpelstiltskin, who spun straw into gold, the Napier company transforms cow byproducts which would otherwise be destined for pet food and fertiliser into extremely lucrative Type 1 polymeric collagen.

At about $50,000 a kilogram it is no exaggeration to say the polymeric collagen is worth its weight in gold – only a few thousand shy of the price of bullion. . .

Award for science professor:

Lincoln University plant science professor Derrick Moot has won an award recognising the successful application of research or experience to an aspect of animal production.

Prof Moot was presented with the New Zealand Society of Animal Production’s Sir Arthur Ward Award at the society’s 74th annual conference on Tuesday night.

Prof Moot has been identifying plant pasture species which will survive and thrive on the dry East Coast, and developing ways to incorporate them into mostly sheep and beef farming systems – but also some dairying ones.

Lucerne ticked most of the boxes as it was a legume which fixed nitrogen from the atmosphere, was high in protein and energy and also had a deeper rooting system than other pastures, he said. . .

Filthy pigs? Not on our patch … – Sue O’Dowd:

The proud co-owner of a Taranaki piggery is so confident about its cleanliness that he sometimes walks around in it in his socks.

Ron Stanley, of Oaonui, is frustrated at this week’s television portrayal of a Canterbury piggery. Filmed earlier this year, the footage showed squalid conditions, severe overcrowding, and suffering animals.

The Stanley Piggery co-owner found the footage disturbing.

“That’s not the way we keep our animals,” he said. “I always say if I can’t come over to the piggery in my socks on a dry day, then there’s a problem. . .

Farm buildings to be exempt from assessment:

Farm buildings are to be exempt from the requirements for assessments under the Government’s earthquake-prone buildings policy, Building and Construction Minister Dr Nick Smith and Primary Industries Minister Nathan Guy announced today.

“The Government is not satisfied that the risks posed by farm buildings justify the cost of every building being assessed. These buildings have a low occupancy rate and there is no record of a fatality caused by a farm building collapsing in an earthquake,” Dr Smith says.

The Building (Earthquake-prone Buildings) Amendment Bill requires all buildings to be assessed in the next five years and for those under 34 per cent of the building standard to be upgraded within a period of 15 years, with a further 10-year extension available for heritage buildings. The Bill currently excludes residential buildings except those that are multi-storey and contain more than two homes. . .

Farmers welcome windfall from wind farms - Gerard Hutching:

Wind turbines west of Wellington are not only changing the landscape, they are also transforming landowners’ bank balances.

“They’re music to my ears, actually,” says Ohariu Valley sheep and beef farmer Gavin Bruce, who has a 440-hectare property with eight turbines.

All told there are 88 turbines on two Meridian Energy wind farms: 62 on the West Wind farm, situated on both Meridian’s own property as well as on Terawhiti Station, south of Makara; and 26 on the Mill Creek wind farm on four properties in the Ohariu Valley. . .

Driving safety home to farmers:

Rural retailers are backing government’s safety message to farmers.

The Environmental Protection Authority (EPA), in partnership with Agcarm and WorkSafe New Zealand, is launching a campaign to increase awareness about the importance of wearing the right safety gear when using farm chemicals.

The campaign directly addresses the “she’ll be right” attitude toward using safety gear.

Agcarm distributor members across New Zealand will display posters and distribute flyers with practical tips about safety gear. . .

US Company churns out cloned cows -

In the meadow, four white-haired Shorthorn heifers peel off from the others, raising their heads at the same time in the same direction. Unsettling, when you know they are clones.

From their ears dangle yellow tags marked with the same number: 434P. Only the numbers that follow are different: 2, 3, 4 and 6.

The tag also bears the name of the company that bred them and is holding them temporarily in a field at its headquarters in Sioux Centre, Iowa: Trans Ova Genetics, the only large US company selling cloned cows.

A few miles away, four Trans Ova scientists in white lab jackets bend over high-tech microscopes in the company’s laboratories. They are meticulously working with the minute elements of life to create, in Petri dishes, genetically identical copies of existing animals. . . .

You Won’t Believe What This Guy Did With Old Farm Scrap Metal. Seriously, WOW:

Farmers of South Dakota, if you see John Lopez going through your garbage, please let him continue to do so. In his hands, what was unfixable or unwanted to you becomes art. Not just any art, though. Big, striking sculptures that celebrate the American Old West. The kind of stuff you’d probably like! At the very least, you’ll be impressed by his work. Who wouldn’t be? . . .


Rural round-up

June 6, 2014

Milk production hits record levels - Gerard Hutching:

Chasing higher prices, dairy farmers have produced a record 1.8 billion kilograms of milksolids in 2013-14, a 160 million kg hike over the year before, the latest economic update from the ASB reports.

“Of the 10 per cent increase, 7.5 per cent comes from Fonterra’s farmers, with other companies lifting it to the 10 per cent,” economist Nathan Penny said.

He said that the increase was not just a response to higher prices, but farmers had also bounced back from the drought of 2012-13.

“But you don’t get a rebound from the drought two years in a row, it’s harder to get a big jump again,” Penny said. . .

Industry champion rendered speechless – Annette Scott:

Being named the winner of this year’s Deer Industry Award came as a bit of a shock for Paddy Boyd, who admits he was lost for words. He talked to Annette Scott.

When Mackenzie farmer and Haldon Station manager Paddy Boyd was named winner of this year’s Deer Industry Award he was lost for words.

The announcement at the industry conference in Methven came as a surprise for Boyd, who said he was usually able to string a few words together as a voice for deer producers. . .

Flock House farm to be jointly run:

A Rangitikei based iwi, a Maori incorporation and local Pakeha farmers will be working together to run the historic Flock House farm near Bulls.

AgResearch has completed the sale of its Flock House farm to Nga Waiariki-Ngati Apa for an undisclosed sum.

The farm was brought by Te Runanga o Ngati Apa, in partnership with Atihau-Whanganui Incorporation and Waitatapia Station Limited, and farming will be carried out by Te Hou Farms Limited Partnership. . .

$7m to assess irrigation viability in South Canterbury:

A new funding agreement will investigate the viability of the Hunter Downs irrigation scheme for up to 40,000 ha in South Canterbury, says Primary Industries Minister Nathan Guy.

‘The Government’s Irrigation Acceleration Fund will provide $7.044 million over two years to co-fund technical investigations and design work to determine if an irrigation scheme is viable, both from a technical and economic perspective,’ says Mr Guy.

‘This will be matched by funds from shareholder equity and the scheme’s partner, Meridian Energy. . .

Green Ribbon Award finalists announced:

To mark World Environment Day, Environment Minister Amy Adams has today announced the finalists for the 2014 Green Ribbon Awards, which honour outstanding contributions to protecting New Zealand’s environment.

“Over the 24 years of the Green Ribbon Awards, more than 150 environmental champions have been recognised for their initiative, commitment and dedication to tackling environmental issues,” Ms Adams says.

“For this year’s awards, 113 nominations were received across 12 categories. The finalists come from a range of backgrounds and the work they do is challenging, time-consuming and sometimes unrewarded. . . .

Federated Farmers @ Fieldays 2014:

Federated Farmers has not only uprated its 2014 Fieldays presence with a site in the feature pavilion but will hold the final meeting of its current Board in Hamilton ahead of Fieldays.

“Federated Farmers will make Hamilton, or should I say, Megatron, as its base for Fieldays week,” says Bruce Wills, Federated Farmers President, who retires from the role in July.

“As this is my final Fieldays as National President, I am pleased to say we are making our largest ever investment into our Fieldays site.  . . .

Drinking water from poo nearly ready for market:

A technology for extracting drinkable water from manure is on its way to commercial application this year, a US university said today. The technology is particularly useful for animal operations in dry regions where water is at a premium, according to Michigan State University.

The McLanahan Nutrient Separation System is an add-on to an anaerobic digester, which extracts energy and chemicals from manure. The system adds ultrafiltration, air stripping and a reverse osmosis system to produce water that’s clean enough for cattle to drink. . .

 


No change good, change bad

March 19, 2014

Share market investors put their money on yesterday’s poll results:

The NZX 50 Index rose to a new record, following a global rally, paced by power companies after recent political polls put the government ahead, helping dispel fears the opposition parties will be able to overhaul the electricity sector. MightyRiverPower, Meridian Energy and Contact Energy rose.

The benchmark index rose 47.638 points, or 0.9 percent, to 5135.664. Within the index, 27 stocks rose, 12 fell and 11 were unchanged. Turnover was $167 million.

Better than expected US industrial production figures kicked off a global rally in equity markets which carried on into Asia. Hong Kong’s Hang Seng was up 0.5 percent in afternoon trading, Japan’s Nikkei 225 index advanced 1.4 percent and Australia’s S&P/ASX was up 0.5 percent.

Power companies paced today’s gains after a New Zealand Herald’s DigiPoll survey put the governing National Party at 50.8 percent support ahead of the September election. Labour, the main opposition party, garnered 29.5 percent. A key election policy of the opposition parties is to regulate the electricity market, creating a single state-owned wholesale electricity buyer. . .

“The electricity sector is up, and I’m going to put it down to the Herald DigiPoll results which were published, because they’re up across the board,” said Greg Easton, investment adviser at Craigs Investment Partners. “If there is no change in government, then that sector could really outperform after the election.” . . .

If no change in government good the obvious implication is that a change of government would be bad – and not just for energy companies and the stock market.


LabGreen power play threatens renewable energy

February 14, 2014

There’s another flaw in the LabourGreen power play  – it would threaten investment in renewable energy:

Labour and the Greens have jointly proposed scrapping the wholesale energy market in favour of a single state-operated buyer of electricity, called NZ Power, claiming the move would save hundreds of millions of dollars on consumer power bills.

Today Mark Binns, chief executive of Meridian Energy, told the commerce select committee that while a lack of detail meant it was hard to properly analyse the plan, Meridian believed it would favour thermal generation over renewable plants such as wind farms.

“Our view is it would potentially impact on renewables because it would make thermals, particularly gas plants – which are easier to consent and easier to put in place quickly – more viable in that environment,” Binns told MPs..

“If you have a central buyer, the Crown has the responsibility for deciding the next wind farm or other power that is required, and wind farms take between five and 10 years to consent.

“Why would we keep investing in developing renewable options, given the uncertainty around central buyer?

“The reality is it’s much easier for someone like Todd Energy to basically get a piece of land with gas to the front door, and strap on a jet engine to a lump of concrete and generate electricity.” . . .

Questions over the economic credibility of Labour and Green policies aren’t new but there’s more than a little irony in this very serious question over the environmental impact their power play would have.


Labour will meddle in power market

January 17, 2014

Labour is planning to follow through on its policy to meddle in the power market if it is in government:

. . . Labour and the Greens unveiled plans to overhaul New Zealand’s electricity market on the eve of the government’s MightyRiverPower selldown last year. The operator of nine hydro stations on the Waikato River has traded below its $2.50 IPO price since just after the sale last May.  Meridian Energy, sold in October, is hovering around its listing price.

The opposition parties want to create a single, state-owned power buyer and a restructured pricing model, to eliminate excessive power company profits and pass savings onto consumers through cheaper electricity prices.

“A wise investor will be aware if the pricing model changes, in this case to stop the profiteering of public rivers, that will change the companies’ profits,” Parker, who would be finance minister in a Labour government, told BusinessDesk.

“Investors are already discounting those stocks because of what might happen if we win,” he said. “It’s actually a good example of how the market works.” . . .

If they can reduce the value of companies and the wealth of investors this much when they’re in opposition, they will do much worse in government.

Investors have already assessed the threat. The New Zealand stock exchange energy group index, which includes all listed power companies along with Z Energy and NZ Refining, has dropped 9.6 percent in the past 12 months, while the NZX 50 Index has rallied about 17 percent.

“Some people just won’t touch them because they are scared of a Labour-Greens government,” said Mark Lister, head of private wealth research at Craigs Investment Partners. “Others say because they’re dirt cheap people are pessimistic. If National got re-elected they’d go up again.”

A potential change of government may pose risks to other sectors as well, he said.

“Regulatory risk is weighing on those sectors which could be in for attention from a Labour government,” Lister said. “The market is aware of the sectors susceptible to regulation – SkyCity, the electricity sector and Chorus have a cloud hanging over them, which will continue to the election.” . . .

If there’s a Labour/Green/New Zealand Firs/Mana and whichever else party after the election that cloud will darken.


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