Fonterra reviewing forecast


The drop in price at this morning’s auction wasn’t good news and it’s been followed by a media release from Fonterra saying the company is reviewing it’s forecast payout:

Fonterra confirmed today that a strong New Zealand dollar and further drop in international dairy prices meant that the Board would be reviewing the current 2010/11 payout forecast. 

Following the globalDairyTrade event overnight, the gDT-TWI index was down 8.3%.  This followed a 13.7% decline at the July event.

“Encouragingly, Whole Milk Powder had strengthened slightly for the February to April period,” said CEO Andrew Ferrier. “But, the New Zealand dollar was at very high levels.”

Mr Ferrier said that as part of its normal planning process Fonterra is reviewing the current forecast in light of these developments. 

“We always said there would be a lot of volatility in the market and we are seeing it. It’s important in this environment to let our farmer-shareholders know as soon as possible if we think there could be any impact on payout.”

In this morning’s post I noted an email to shareholders at the weekend had said that the  season’s forecast payout still remained in the $6.90 to $7.10 range.

A review doesn’t have to mean a change, but banks have been recommending budgets work on a lower payout than $6.90. That would be wise given the volatility on the markets and the relatively high dollar.

At the supermarket


John Venn was born on this day in 1834 which was a good excuse to visit graphjam.

Things on my list Things i buy At the supermarket

Keep Right On To The End Of The Road


Harry Lauder was born 130 years ago today.

The nature of opposition


The Farming Show is a must-listen for many in the rural sector.

It also has gems for political junkies like this one from Monday’s show when Jamie Mackay asked Bill English about Chris Carter.

 Bill replied:

This is a man on a mission. He’s a symptom not a cause.

The hardest thing in Opposition is to get to the point where you accept the voters were right to kick you out when they did and the Labour Party hasn’t got there yet and Chris Carter hasn’t got there either.

So what you’re just seeing is the internal tension which is a group of people frustrated and angry that they’re not making any political progress.

That is the nature of Opposition, that’s inevitable. They’re going to have a lot more scraps, they’ll change leaders a time or two and eventually when they accept that they were right to be kicked out the public will start listening to them again.

When you look at the internal ructions and the little policy they are suggesting it doesn’t look as if they’ll be accepting the public was right to kick them out for a while yet.



12/15 in the Dominion Post’s weekly political triva quiz.

All the sums for IRD’s refurbishment seemed like very big numbers.

Milk auction price down again


Prices for skim and whole milk powder and anhydrous milk fat all dropped at last night’s globalDairyTrade auction.

The gDT-TWI index was down 8.3%, skim milk powder dropped 8.9%, whole milk powder was down 7.7% and the price for  AMF fell 7.6%.

An email to shareholders from Fonterra chair Sir Henry Van der Heyden noted the relatively high value of the New Zealand dollar but said the current season’s forecast payout still remained in the $6.90 to $7.10 range.

World milk prices have been volatile, but there’s nothing new in that. Dr Jon Hauser at X-Cheque has graphed milk prices in Australia, France, the UK & USA since 1995 and it looks like coloured spaghetti. (New Zealand prices aren’t included but he says they’re similar to Australian ones).

For me the most interesting data is that of the USA. A regular cycle of volatility has persisted for 15 years.  The peaks are about 3 years apart with a fall to a roughly similar level in between.  There is no doubt that the supply / demand balance in the US is the principle driver of this cycle. In a perverse way the market behaviour is comforting. It is to some extent predictable and it would be more of a worry if there were prolonged periods at the low points.

Australia and New Zealand look like they are trending towards the US cycle. In the short term that will be a positive as it will mean a lift in the long term average price. In the longer term farmers will need to be very careful to avoid getting over excited about the periods of peak pricing. Their businesses need to be designed to withstand the troughs in price. The major risk in this regard is overpriced land and excessive debt.

Our bank is holding a series of meetings for clients at which they give a similar message.

There may be a glimmer of hope for New Zealand dairy farmers though, the price of grain in the UK is very high (close to £140/t). That will increase input prices for dairy farmers there which ought to make it easier for us to compete with them.

Lest we forget


A friend’s son is serving in Afghanistan.

My first reaction on hearing the news that one of our soldiers serving there had been killed and two others wounded, was to pray it wasn’t him.

Somewhere in New Zealand this morning the family and friends of the soldier will be coming to terms with the news that the young man they farewelled a few months ago isn’t coming back.

It is the first death of one of our service people in Afghanistan. It reinforces the real and ever present danger they face in trying to help people on the other side of the world so that they might one day enjoy the peace we take for granted.

MPs to get Carter clause?


Many employers came up against Labour’s employment laws which made it difficult to sack someone even for gross misbehaviour. Now they know what it feels like.

Kicking him out of caucus was easy. Getting him out of parliament and the party is proving to be more problematic.

However, Chris Carter’s extended sick leave is likely to result in a change of rules.

Speaker Lockwood Smith is concerned that Carter could stay away from parliament for the rest of the term and lose only $10 a week from his salary.

Dr Smith says the law needs changing.

“The sanction available to the Speaker so the member doesn’t stay on indefinite leave is so weak,” he says. . .

. . . So Mr Carter’s case has proved one thing – it’s easy for a suspended MP to walk away from Parliament and to stay on full pay.

The law allowing him to do this is 30 years old, it’s out of date and Dr Smith says not only does it need changing – he’s determined to do it.

No-one employed in the private sector could get away with extended leave on almost full pay. Dr Smith is right the rules need to change to ensure that MPs won’t be able to either.

UPDATE: Keeping Stock  posts on the Dominion Post’s editorial which starts:

 Spot the difference. Once the Government’s new industrial relations legislation takes effect a member of the public will, if requested, have to supply her employer with a medical certificate for even one day’s absence from work. Labour MP Chris Carter becomes stressed and party president Andrew Little unilaterally declares he will be taking two months’ sick leave.

Mr Carter may well be unwell. He has certainly appeared stressed since his lavish spending on overseas travel while a minister in the last government was made public. However, his party’s concern for his psychological wellbeing would ring truer if his colleagues had not queued up to publicly question his sanity and if the clamour had preceded, rather than succeeded, his attempt to destabilise Phil Goff’s leadership by sending an anonymous letter to journalists advising of disharmony in Labour’s ranks.

Sick leave gives Mr Carter and Labour space for cool-headed consideration, but it is a solution available only because of the strange netherworld MPs inhabit.

They don’t have job security, they have to reapply for their positions every three years. But it’s ridiculous that there is nothing to prevent them marking time at our expense on almost full pay.

August 4 in history


On August 4:

1265 Second Barons’ War: Battle of Evesham – the army of Prince Edward defeated the forces of rebellious barons led by Simon de Montfort, 6th Earl of Leicester, killing de Montfort and many of his allies.

Montfort Evesham.jpg

1532 the Duchy of Brittany was annexed to the Kingdom of France.

1578 Battle of Al Kasr al Kebir – the Moroccans defeaed the Portuguese. King Sebastian of Portugal was killed leaving his elderly uncle, Cardinal Henry, as his heir which initiated a succession crisis in Portugal.

Lagos46 kopie.jpg

1693 Date traditionally ascribed to Dom Perignon’s invention of Champagne.


1704  War of the Spanish Succession: Gibraltar was captured by an English and Dutch fleet, commanded by Admiral Sir George Rooke and allied with Archduke Charles.

1789 In France members of the National Constituent Assembly tookan oath to end feudalism and abandon their privileges.

1790 A newly passed tariff act created the Revenue Cutter Service (the forerunner of the United States Coast Guard).


1791 The Treaty of Sistova was signed, ending the Ottoman-Habsburg wars.

1792 Percy Bysshe Shelley, English poet, was born (d. 1822).


1821  Atkinson & Alexander published the Saturday Evening Post for the first time.


 1821 Louis Vuitton, French designer, was born (d. 1892).

Louis Vuitton Logo.svg

1824 Battle of Kos  between Turks and Greeks.

1834  John Venn, English mathematician, was born (d. 1923).

Venn John signature.jpg

1854 The Hinomaru was established as the official flag to be flown from Japanese ships.


1870 Sir Harry Lauder, Scottish entertainer, was born (d. 1950).

Harry Lauder.png

1873  The United States 7th Cavalry, under Lieutenant Colonel George Armstrong Custer, clashed for the first time with the Sioux, one man on each side was killed.

G a custer.jpg

1900 Elizabeth Bowes-Lyon, (Queen Elizabeth, The Queen Mother), was born (d. 2002)


1901 Louis Armstrong, American jazz musician, was born (d. 1971).

A picture of Louis Armstrong. Short-haired black man in his fifties blowing into a trumpet. He is wearing a light-colored sport coat, a white shirt and a bow tie. He is faced left with his eyes looking upwards. His right hand is fingering the trumpet, with the index finger down and three fingers pointing upwards. The man's left hand is mostly covered with a handkerchief and it has a shining ring on the little finger. He is wearing a wristwatch on the left wrist.

1902 The Greenwich foot tunnel under the River Thames opened.


1906  Central Railway Station, Sydney opened.


1914   Germany invaded Belgium. In response, the United Kingdom declared war on Germany. The United States declares its neutrality.

1916  Liberia declared war on Germany.

1936  Prime Minister of Greece Ioannis Metaxas suspended parliament and the Constitution and established the 4th of August Regime.


1942 David Lange,   former New Zealand Prime Minister, was born (d. 2005).

1943 Vicente Alberto Álvarez Areces, President of the Government of the Principality of Asturias in Spain, was born.


1944 A tip from a Dutch informer led the Gestapo to a sealed-off area in an Amsterdam warehouse where they foundd  Anne Frank and her family.

A four story, brick apartment block showing the building's facade, with several windows and an internal staircase leading into the block. 

1946 Dominican Republic earthquake of magnitude 8.0;  100  killed and 20,000 left homeless.

1947 The Supreme Court of Japan was established.

1952 Moya Brennan, Irish singer, was born.


1954  The Government of Pakistan approved Qaumi Tarana, written by Hafeez Jullundhry and composed by Ahmed G. Chagla, as the national anthem.


1958  The Billboard Hot 100 was founded.

 1960 – Tim Winton, Australian author, was born. 


1960 Paul Henry,  New Zealand broadcaster, was born.

1960 José Luis Rodríguez Zapatero, Prime Minister of Spain, was born.


1961  Barack Obama, 44th President of the United States, Nobel Peace Prize laureate, was born.

A young boy possibly in his early teens, a younger girl (about age 5), a grown woman and an elderly man, sit on a lawn wearing contemporary circa-1970 attire. The adults wear sunglasses and the boy wears sandals. 

1964  Civil rights workers Michael Schwerner, Andrew Goodman and James Chaney were found dead after disappearing on June 21.

1964  Gulf of Tonkin Incident: United States destroyers USS Maddox and USS Turner Joy reported coming under attack in the Gulf of Tonkin.

Gulf of Tonkin Kn11060.jpg

1965  The Cook Islands gained Self Government.

Cook Islands achieve self-government

1965 Fredrik Reinfeldt, Prime Minister of Sweden, was born.


1969  Vietnam War: at the apartment of French intermediary Jean Sainteny in Paris, U.S. representative Henry Kissinger and North Vietnamese representative Xuan Thuy began secret peace negotiations.

1974  A bomb exploded in the Italicus Express train at San Benedetto Val di Sambro, Italy, killing 12 people and wounding 22.

1975  The Japanese Red Army took more than 50 hostages at the AIA Building housing several embassies in Kuala Lumpur.

1984  The African republic Upper Volta changed its name to Burkina Faso.


1987 The Federal Communications Commission rescinded the Fairness Doctrine which had required radio and television stations to present controversial issues “fairly”.

1991  The Greek cruise ship MTS Oceanos sank off the Wild Coast of South Africa.


1995 Operation Storm began in Croatia.

Operation storm map.jpg

2002 Soham murders: 10 year old school girls Jessica Chapman and Holly Wells went missing from Soham, Cambridgeshire.

2005 Prime Minister Paul Martin announced that Michaëlle Jean would be Canada’s 27th — and first black — Governor General.

2006 2006 Trincomalee massacre of NGO workers by Sri Lankan government forces, killing 17 employees of the French INGO Action Against Hunger (known internationally as Action Contre la Faim, or ACF).

2007 NASA’s Phoenix spaceship was launched.

Phoenix landing.jpg

2007 – Airport police officer María del Luján Telpuk discovered a suitcase containing an undeclared amount of US$800,000 as it went through an x-ray machine in Buenos Aires’ Aeroparque Jorge Newbery, sparking an international scandal involving Venezuela and Argentina known as “Maletinazo“.

Sourced from NZ History Online & Wikipedia

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