Where were you when . . .

November 9, 2009

. . .  the Berlin Wall fell?

An event as momentous as that ought to be ingrained on my memory.

But as I digested news reports about what happened 20 years ago today I could recall only very vague memories of learning about it at the time.

Then I realised our son would have been only a few months old and the fall of the wall must have conincided with one of the many crises which punctuated his life.

When you’re wondering if your child will live or die the world shrinks and matters of international moment barely register.

Taking from someone who needs it most

November 9, 2009

A thief stole an electronic communications device from a boy who has cerebal palsy.

He is mute and the device was his only means of communication.

It must have been terrifying for the boy and the theft will make life so much more difficult for him and those who care for him.

Follow Me

November 9, 2009

Today was Mary Travers’ birthday.

Millions more for kiwifruit research

November 9, 2009

When Australians or New Zealanders talk of kiwis we mean the bird or the people.

In any other country I’ve visited when people talk about kiwis they are referring to the fruit.


Kiwifruit are one of our export success stories and a partnership between The Foundation for Research, Science and Technology and Zespri International will form the world’s largest research and development programme into new varieties.

FRST has committed $15.2m over seven years and Zespri is contributing $20.5m.

Minister for RS&T Wane Mapp said the investment will fast-track plant breeding research and the development of new kiwifruit cultivars.

“Land and food-based science is at the heart of the New Zealand economy. This investment is an example of building on our strengths and expertise.

“It demonstrates the Government’s commitment to the horticulture sector. It will give New Zealand a commercial advantage over its international competitors. It is estimated that there will be returns on the investment of approximately $350 million over 15 years.

“Investment in Plant & Food Research led to the gold kiwifruit from Zespri, which is now the foundation of $400 million of exports. This project will take our kiwifruit industry to new levels of international success,” he said.

The horticulture sector aims to double the value of its earnings to $10 billion per annum by 2020.

I prefer the green to the gold when it comes to kiwifruit, but the people who’ve given us $400m of export earnings can’t be wrong.

One of the reasons for the success is that the people behind gold kiwifruit learned from previous mistakes and retained plant variety rights.

Monday’s Quiz

November 9, 2009

1. What’s distinctive about someone with a variation in the MC1R gene?

2. Who said, “Hollow commitments to action in the future are insufficient. Deferring difficult issues must not be tolerated. Our children and grandchildren expect us to speak and act decisively?”

3. Who won this year’s Prime Minister’s Awards for Literature?

4. What is a titipounamu?

5. Name the national presidents of: Federated Farmers, Rural Women NZ and NZ Young Farmers.

Increased payout will help farm sales – updated

November 9, 2009

A rural real estate agent in South Canterbury said when Fonterra’s forecast payout went up 55 cents in September his phone started ringing.

People who had been holding back for the bottom of the market started showing an interest in buying.

Today’s announcement of a further 95 cent increase in the forecast payout will confirm the belief that the market has bottomed out and attract more buyers.

It may also result in more farms listed for sale as potential vendors who have been holding back see an opportunity for a better price.

Farm sales and conversions slowed markedly with last season’s lower payout. The latest increase will widen the gap between dairy returns and those for sheep, beef and cropping which might result in more farmers considering a change to dairying.

However, the sharp drop in last season’s payout and the volitility in the market have made farmers more cautious.

The big payout in the 07/08 season encouraged a lot of spending. This included more intensive systems to boost production which were found to be unsustainable when the milk price dropped.

The most efficient way to convert grass and water to milk is to let cows graze pastures. Our climate and soils allow us to do that very well and relatively inexpensively in terms of both money and the impact on the environment compared with other countries where the feed is taken to the cows.

The decrease in payout gave a reality check and reminded us that our natural advantage is pasture based production.

The increased payout will boost farm sales and it may boost conversions. But those who’ve learned from the volatility of the last couple of season won’t be rushing to boost production with expensive inputs.


Adolf at No Minister puts some figures on the impact the increase will have on the wider economy.

BK Drinkwater does a payout for dummies translation of the figures.

Fonterra payout up to $6.05

November 9, 2009

Last night’s post on Fonterra lifting its payout in Australia had only just been published when I checked my emails and found one from the company to New Zealand suppliers. It announced an increase in its forecast payout for the current season of  95 cents per kilo of milk solids.

 In a newsletter to shareholders chairman Henry Van der Heydon said:

  The Board met today and  has increased the forecast Available For Payout to $6.05 per kgMS for the current season.

  This is made up of a forecast Milk Price of $5.70 (up from $4.60) and a Distributable Profit or Value Return of 35 cents (down from 50 cents).

  The $1.10 increase in the Milk Price has come from the improvements in commodity milk powder prices which have by far offset the negative impact of the strengthening currency.

  This is a big jump. It shows how much volatility is still in the market. There’s a risk the rising prices could bring on more milk from other countries.

  The 15 cent fall in the Profit is due to products like cheese and casein lagging behind powder prices.

  Your Advance Rate will go up 75 cents ($3.25 to $4.00) for November paid December.

This forecast payout is 90 cents better than the final payout for the 08/09 season.

A 400 cow farm probably produces about 160,000 kgMS a season so the increase would mean an increase of about $152,000. However, after the big drop in income last season following the big increase the season before  farmers will be wary about future volatility.

We’ll welcome the increase but still concentrate on containing costs.

Even so, given the importance of dairying to New Zealand’s economy the impact of the increase may be even more significant outside the farm gate.

UPDATE: Interest.co.nz has the full statement from Fonterra.

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