SFF wants to resume merger talks

August 7, 2008

Silver Fern Farms’ directors want to resume merger discussion with Alliance Group.

They have written to Alliance directors with their request and to Alliance shareholders explaining what they are doing.

I don’t fancy their chances because just this week Alliance chair Owen Poole told Rural News the opportunity for meat industry consolidation had passed.

SFF and PGW’s proposed partnership makes a merger between SFF and Alliance even less appealing and other parties in the industry, such as Affco and Anzco, have moved on.‘The opportunity for industry aggregation has passed. What we are going to end up with, potentially, is SFF and PGW together, and the rest.’

SFF chairman Eoin Garden and PGW chairman Craig Norgate have both made it clear they would like Alliance to be part of the partnership.

Poole says he has had a ‘brief, high-level discussion with them’ about that possibility but it remains unappealing.

He has ‘a whole page’ of reasons for that, but the key concerns are loss of farmer control, the corporate/cooperative hybrid model, and that Alliance is already vertically integrated.

 One of SFF’s selling points has been that there is no Plan B. But Alliance begins three weeks of shareholder meetings next week and that will provide the opportunity to show they have an alternative.

‘Alliance, in terms of sheepmeat, is now the biggest player in the country with only six plants, and eight in total… its done its rationalisation. SFF still has 20 more plants.’The cut in lamb numbers will create ‘competitive tension’ in procurement, he predicts, but whether that will be a greater war than before, he is unsure.
Farmers keep criticising the industry for procurement battles and the Sunday night ring-around. However, the solution to that lies not with the companies but the farmers. Loyalty is a two-way street and if farmers want loyalty from the company they must be prepared to give it as well.

The letter to shareholders follows: Read the rest of this entry »


Why can’t we afford Herceptin?

August 7, 2008

Pharmac’s announcement it won’t fund 12 month courses of Herceptin for women with aggressive Her-2 breast cancer has been labelled a cruel blow by Breast Cancer Aotearoa Coalition chair, Libby Burgess.

Ms Burgess said it was “unbelieveable and shameful” that New Zealand women were denied the standard of care offered elsewhere.

“It’s a bad outcome, but we’re not terribly surprised by it. But we are of course extremely disappointed.

“This is a cruel blow for women and their families. Phamac’s continuing refusal to fund the treatments New Zealanders need is simply inhumane.”
 
Ms Burgess said that, to access the 12 month treatment their doctors were recommending, women had to fundraise the tens of thousands of dollars needed. 

“This adds huge stress and suffering for women when they most need support and comfort … I am amazed Government hasn’t stepped in to end this inhumane treatment of our women.

“Increased funding for medicines including Herceptin will surely become an election issue. That will give voters the opportunity to decide.

Pharmac chief executive Matthew Brougham said the cost wasn’t the reason the drug won’t be funded.

“I want to be absolutely clear; this decision is not about the cost of Herceptin. This decision rests solely on the science and our assessment, our confidence, around whether or not funding 12 months treatment with Herceptin would produce additional health benefits.”

But he also said:

[Pharmac]  had to consider all illnesses and treatments, not just cancer, and had to make a decision with limited funds about what would bring the greatest benefits.

“It’s not about who can scream the loudest and make the most noise.” Read the rest of this entry »


Petrol not fast to rise and slow to fall

August 7, 2008

A government study found that, contrary to popular belief, petrol prices don’t rise quickly and fall slowly.

The key findings of the review were:

* The New Zealand petrol market is fundamentally competitive;

* Price rises are mainly due to increases in crude oil price overseas;

* Retail petrol prices are not fast to rise and slow to fall;

* A Fuelwatch scheme like that in Australia (where petrol prices are published and fixed for a certain time) would not work in New Zealand as the market is different; and

* There was a need for more transparency on importer margins and reporting them would be useful for consumers.

The report, which was commissioned by the Ministry of Economic Development, found we’ve got the fifth lowest petrol prices inclusive of taxes in the OECD.

I’m pleased we’re not going to waste money on a Fuelwatch scheme. But I’m not sure that there is much comfort in having the fifth lowest prices in the world when that price is so high and impacts on almost everything we do or buy.


Digesting dead rats beats sitting on high horse

August 7, 2008

Vernon Small  advises National to keep the dead rats down:

Labour will still try to attack over a “hidden agenda” on social service cuts. But if National can keep the dead rats down, and avoid indigestion in the ranks, it will offer fewer opportunities for the Government to bring up during the campaign.

The second strand of Dr Smith’s comments – that, through a discussion document process, policy the party wants to advance may be developed – would have surprised only the politically naive.

Perhaps that is because we in the media have not made it clear enough. National is not making these changes because it has had a complete change of heart or ideology. A more centrist fiscal policy and a nod in the direction of Keynesian economics has not recreated National in Labour’s image.

It has simply found a way to appeal to “Labour-plus” voters, rather than to become Labour- plus in perpetuity.

National isn’t Labour-lite but it has to win support from people who like some of Labour’s policies.

That means once the dead rodents are digested it will find National-type solutions to new challenges. Just as Labour bought Air New Zealand and the railways in response to unanticipated challenges. Just as Labour passed controversial electoral law, with the help of support parties, without a specific mandate.

(Perhaps Mr Key, though, would like to stop citing the so- called anti-smacking law, which was a Green bill that his party also supported without a “mandate”.)

National has not had a road-to- Damascus conversion. Its conversion, under pragmatic Mr English and the even more pragmatic Mr Key, is to the political necessities that former leader Don Brash never understood.

Exactly. It is better to swallow some dead rats, get into government, keep your promises and thereby win the trust of the electorate than to spend another three years in the wilderness. That done, you might in consultation, be able to implement more of the policies the country needs. 

The alternative is to sit on the high horse of a more radical agenda in opposition.


Are food imports a problem?

August 7, 2008

Rural News reports that farming leaders are astounded by the statistics which show New Zealand imports 40% or our total food needs and 70% of processed food.

They are much higher than expected, says Federated Farmers’ Meat and Fibre chairman Bruce Wills.

It sounds very high,’ Wills says, adding, ‘The ‘buy Kiwi made’ campaign people should be measuring the impact of this.’The still-high dollar ‘must be playing a big part in those numbers’. And high local labour costs will also be a factor.

‘I would like to see a breakdown of those figures. These may be value-added products that we are importing. We as a farming nation must keep an eye on this and make more effort to make the products ourselves.’

 

 I don’t necessarily agree there is a problem with these numbers, nor that we need to make more effort to process more of our produce here.

While we are very good at producing meat, dairy produce and some fruit, vegetables and grains we can’t grow rice or bananas and a lot of other food that we need.

We also need to consider economics. If we receive more for our products on overseas markets then both producers and the country are better off if we supply international markets rather than the domestic one.

And we must also take production costs into account. At first glance it seems a bit silly to export the raw produce, process it and import the finished product. But if that can be done at a lower cost while meeting food health and safety standards without compromising quality then it makes sense.

I prefer to buy fresh food and local food is usually fresher; I also support local businesses where I can. But as an exporting nation our wealth depends on people in other countries buying our produce and we would be the losers if they start demanding their own local produce rather than ours.


Southerners stand by their man

August 7, 2008

Clutha Southland  people are not impressed by the bugging of their MP, Bill English.

As National deputy leader Bill English weathers controversy after the secret recording of his comments about selling Kiwibank, in the heart of his Clutha-Southland electorate voters were right behind their man.

Mr English was “a straight shooter” and an “absolutely outstanding” politician, said two voters spoken to by The Southland Times yesterday.

In a random poll, voters in Gore saved their harshest criticism for those who secretly taped the conversation during a cocktail function at the National Party’s annual conference and leaked it to the media.

“I think it stinks,” said one woman.

Another person described it as despicable. Most of those spoken to believed the controversy was unlikely to hurt Mr English in the polls.

“He should be a little bit more careful what he says but I don’t think it will cost him much,” said one man.

A woman who had been wavering as who to vote for would now definitely vote for Mr English.

“I think this will bring everyone behind him because it’s dirty tricks,” she said.

A good local MP gets support across party boundaries. Bill is very popular on his home patch , he has earned their loyalty so it’s not surprising his constituents are standing by him.

Mud sticks to the hand that throws it and because of that sometimes the person at whom it is thrown actually comes out cleaner.

Jim Mora’s Panel  reckoned there was nothing particularly damaging in the comments which were secretly recorded.

Garth George says it’s the work of a scumbag.

As far as I’m concerned, the whole thing stinks. And it is further evidence, if any were needed, that this nation has not only lost its moral compass, we have smashed it.

And The Herald  editorial says MPs will become more wary of discussing sensitive issues which is the public price of this dirty trick.

All of which I agree with. As I blogged yesterday, openness requires trust, that was abused and we will all pay for it if MPs become more guarded.


Pregorexia dangerous for mothers and babies

August 7, 2008

The pressure to have a perfect body now extends to pregnancy. I feel so strongly about this I am copying the story in full:

Expectant mothers are dieting and exercising to excess as they try to mimic Hollywood stars with svelte figures weeks after giving birth.

British maternity experts have identified an alarming phenomenon called “pregorexia” where women continue to diet throughout pregnancy so they have less weight to lose once their baby is born.

New Zealand experts says pregorexia is real and caused by exposure to images of unrealistically skinny pregnant celebrities, such as Nicole Kidman, and form-fitting maternity clothes. It also jeopardises the health of mother and baby.

Canterbury District Health Board psychiatrist Sue Luty, who specialises in eating disorders and perinatal mental health, said women limiting their calorie intake during pregnancy or overexercising was becoming “a huge issue”.

Women’s views of pregnancy were being distorted by images of celebrities who “miraculously” got back into shape soon after giving birth, she said.

This was unrealistic as the stars usually had personal trainers and many were too thin before their pregnancy, Luty said.

“It’s not normal for women to be skinny throughout pregnancy but they are seeing pictures in the media that say something completely the opposite.”

Luty said pregnant women were more fashion conscious than before and slinky, form-fitting maternity wear which showed off expectant figures was commonplace.

This put more pressure on pregnant women to stay thin, she said.

“A normal pregnancy shape is chunkier and bumpier but women don’t like that look in tight maternity clothes.”

While pregorexia was extreme, dieting during pregnancy was becoming more prevalent even among people who had not experienced eating disorders before, Luty said.

Nutrition Society of New Zealand spokeswoman Jane Coad said there was growing concern about women limiting the food they ate, as a result the nutrients available to their baby, during pregnancy.

Coad said in an attempt to stay slim women often avoided dairy products and meat which contained calcium and iron essential during pregnancy.

“There seems to be a real sense of competition to get back to pre-baby shape as soon as possible which is not realistic and certainly not healthy,” she said.

This is beyond sad, it is dangerous.

What does it say about women that unrealistic expectations of body image allow us to put our own health and that of our babies at risk?

What has happened to that basic instinct which meant mothers put our babies’ needs before our own; that vainity comes before nutruring?

Why do we allow the fashion industry to treat us with contempt by designing and promoting clothes which fit and suit only unnatural body shapes?

We can blame it on the media, but we don’t have to buy in to the pressure to be unrealistically, unhealthily and unattractively underweight.

Real women have breasts and hips and bottoms. Real women have fat. Pregancy changes our body shapes. We need to accept what’s normal and spurn the misogynistic Barbie-doll idea of beauty.

As the sign outside a shop is Spain said:

Somos 3,000 millones de mujeres en el mundo ys sólo 8 son supermodelos.

There are 300,000 million women in the world and only 8 are super models.


Key facts for primary sector outlook

August 7, 2008

MAF’s SONZAF (Situation and Outlook for Agriculture and Forestry)  key facts  indicate:  

Dairy

  • Dairy export earnings are projected to peak next year at $12 billion – more than 40% higher than earnings two years ago.
  • Dairy export earnings are projected to ease back to $10.5 billion in 2010 before rising again to just under $12 billion by 2012.
  • The weighted average payout (net of industry goods levy) for the next four years averages around $6 – significantly higher than the previous five year period. Detailed payout projections are $6.90 (2009), $5.78 (2010), $5.98 (2011), $6.32 (2012).
  • Demand is growing from new markets in China and OPEC countries. OPEC countries account for 21% of New Zealand’s total dairy exports.
  • The South Island continues to drive dairy herd expansion. The South Island herd grew by 13% last year – 31% of New Zealand’s dairy herd is now in the South Island.

Beef

  • Manufacturing beef (a type of minced beef) prices are expected to rise by more than 30% over the five year forecast period.
  • Beef export volumes are projected to fall by about 2% next year due to drought but to grow back to 2007 levels by the end of the five year forecast period.
  • Export returns currently at $1.5 billion are expected to climb steadily to $2.26 billion by 2012.

Lamb

  • Sheep numbers were down 4% at June 2007.
  • The drought and recent low prices are pushing further declines in sheep numbers – adult sheep slaughter increased by 28% for the year ended June 2008.
  • Lower stock numbers and lower weights mean lamb export volumes are projected to fall through the five year period by 11% to 287 000 tonnes.
  • Higher prices are set to push overall export earnings over the same period up by 25% from the current $2.1 billion to $2.6 billion.

Wool

  • The average wool sale price is projected to rise by just over 40% over the next five years to $5.35 per kilogram.
  • Wool volumes are projected to plateau as falling sheep numbers balance higher prices at 142 000 tonnes.
  • After an initial fall export earnings are projected to grow by 29% over the five year period to $795 million.

Forestry

  • Log prices and pulp prices are both projected to climb by more than 30% over the next five years.
  • Timber and panel export prices are projected to fall before recovering but volumes remain relatively flat over the next five years.
  • Overall forestry export returns are projected to grow from $3.3 billion in 2008 to $4.5 billion in 2012.

Wine

  • Wine grapes are now the largest single horticultural crop in New Zealand at more than 25 000 hectares.
  • A big harvest this year will boost export volumes by 30% in next year and increased plantings will push exports up by more than 50% by 2012.
  • The value of wine exports is projected to rise by 76% to $1.3 billion by 2012.
  • Sauvignon Blanc makes up 75% of wine exports and is New Zealand’s largest wine export followed by Pinot Noir, Chardonnay and Merlot.

Kiwifruit

  • The current average price of $8.1 per tray of kiwifruit is projected to grow to $10.7 a tray by 2012.
  • Predicted kiwifruit export volumes remain static at just under 100 million trays over the next five years.
  • Kiwifruit export returns are projected to grow from $779 million dollars to $1.06 billion by 2012. 

MAF’s assumptions are based on expectations for “normal” climatic conditions with no allowance for domestic or international natural disasters nor major economic changes. Projections are based on Treasury’s exchange rate assumptions from the 2008 Budget.


Solid growth ahead for primary sector

August 7, 2008

The Ministry of Agriculture & Forestry  is forecasting sunny times for the primary sector over the next five years in spite of a stormy outlook for domestic and international ecnonomies.

The 2008 Situation and Outlook for New Zealand Agriculture and Forestry (SONZAF) 2008 report , expects international demand for food products to keep key commodity prices buoyant for the next five years.

MAF says while traditional Western markets are slowing, this is expected to be offset by continued growth in fast-developing Asian economies such as China, India and other developing and oil exporting markets.

“Individual sectors all face their own challenges, but overall the combination of strong commodity prices, growing global food demand and new market developments – such as the China FTA signing – presents positive opportunities for the primary sector over the next five years,” MAF Director-General Murray Sherwin says.

Challenges at home include the 2008 drought, which continues to have a significant affect across the sectors. In the meat sector, this has resulted in wide-spread de-stocking that will lead to falling beef and lamb export volumes next year.

Export returns, most noticeably in the meat, kiwifruit and forestry sectors have also been eroded by the high New Zealand dollar. And high fuel and fertiliser costs have undermined improved commodity returns. The economic outlook in some of the key markets, such as the United States, is also constrained.

Lamb and beef prices are improving and the outlook is brighter in both sectors than it has been for sometime, Mr Sherwin says.

Beef export earnings, for example, are projected to increase by more than 40% over the forecast period.

Based on Treasury assumptions of easing exchange and interest rates, MAF also expects farm gate returns to be boosted.

This is encouraging – but the low dollar which increases returns also increases the price of major inputs including fertiliser, fuel and machinery.


Not even a bronze

August 7, 2008

Is this because children aren’t allowed to keep the score anymore? 🙂

NZ Medal Count

Gold: 0 Silver: 0 Bronze: 0

Hat tip: Opposable Thumb


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