Word of the day

April 24, 2013

Mephitic – foul-smelling; noxious; poisonous.


Rural round-up

April 24, 2013

Drought breaking rain sparks race to prepare for winter:

Farmers are rejoicing that the drought breaking rain finally arrived, but hope winter can hold off for a few more weeks to maximise pasture growth and better insure their feed supplies until spring.

“We have heard from nearly all our provincial presidents that the rain has broken the drought in their areas and that grass is growing again,” Federated Farmers adverse events spokesperson Katie Milne says.

“Some areas had a bit too much rain, while others are still a bit dry, but overall the rain brought by last weekend’s subtropical trough was exactly what was needed, with grass growth returning to many areas. . .

Drought status likely to remain until September:

Recent rainfall has been welcomed by farmers but the problems created by the dry summer will be felt for some time, says Minister for Primary Industries Nathan Guy.

“The dry conditions may have ended in many parts of the country but there are still major challenges ahead. It will take time to build up enough grass cover to provide feed for winter.

“There’s no doubt the rain over the last week has been a real boost, especially for those in areas that have missed out before like the central North Island. . .

Prime Minister Attends Blessing for New Fonterra Plant:

Construction of Fonterra’s new $126 million UHT milk processing plant in Waitoa today took another step forward with the site’s blessing attended by Prime Minister John Key.

Fonterra’s Chief Executive Theo Spierings said the plant, which will be running from April 2014, will enable Fonterra to increase UHT production by 100 per cent over the next few years.

“The five new UHT lines will produce a range of products including UHT white milk and UHT cream for the foodservice sector, which is a part of our business that generates more than $1 billion in sales a year and this plant will allow us to meet the growing demand in Asia for these products,” said Mr Spierings. . .

New A2 formula ready for China – Christopher Adams:

NZX-listed alternative milk company A2 Corporation says the first consignment of its new infant formula brand will be shipped to the lucrative Chinese market next month, followed by distribution in New Zealand and Australian supermarkets soon after.

The company has appointed the China State Farms Holding Company Shanghai, a subsidiary of state-owned China National Agriculture Development Group Corp, as the exclusive Chinese distributor of its Platinum formula brand.

The formula will initially be sold in Beijing, Shanghai, Guangzhou, Tianjin and Chongqing before sales are progressively expanded to other major cities in mainland China, as well as Hong Kong and Macau, A2 says. . .

Outdoor workers shun sun protection– Tamara McLean:

The sun protection slogan Slip, Slop, Slap and Wrap is being dangerously ignored by two thirds of Kiwis working in the great outdoors, with farmers and builders among the worst culprits.

A University of Otago study of more than 1000 workers across nine outdoor occupations has revealed that sun smart messages are not getting through to those who spend their lives working outside.

Just one in three outdoor workers wear sunblock or a suitably protective hat while at work, despite being more at risk of sun damage than other people. . .

Last of founding vineyard empire goes on the market for sale:

A large landholding of what was once the family-owned and operated Nobilo wine empire west of Auckland has been placed on the market for sale.
The 7.49 hectare property bordering the township of Kumeu was once planted in white and red grapes, and was part of the huge landholding created by New Zealand wine legend Nikola ‘Nick’ Nobilo.

Nick Nobilo was born in Croatia and emigrated to New Zealand with his family in 1937 to settle in Kumeu. Nobilo came from a winemaking family which had been producing vintages for some 300 years. . .

Locally bred Habibi sold after winning 6th consecutive race:

New Zealand Derby winner Habibi has been sold to a United States buyer.

A winner of six of her nine races, Habibi was sold to Pennsylvania buyer George Strawbridge after finishing fourth in unsuitably heavy conditions in the Australian Oaks at Randwick last Saturday.

Her owner-breeders Peter and Heather Crofskey will keep a minority share in the filly for the rest of her racing career. . .

Gibbston Valley mountain bike resort soft opening:

Queenstown’s new Rabbit Ridge Bike Resort will have a ‘soft’ opening on April 27 with riding available on some of the newly constructed trails. Rider numbers are limited to invitation only to reduce traffic and enable trails to bed in.

Invited local bikers, bike shop owners and front line staff will get to try out the new trails for the first time this weekend (April 27/28) at the new bike ‘playground’ on 400 hectares of land adjacent to Queenstown’s award-winning Gibbston Valley Winery.

Locals eagerly anticipating the opening of the new resort will then be able to ride the trails on Free Locals Days scheduled for the first Saturday of every month, starting May 4. . .


Farmers want to be responsible for conservation on own land

April 24, 2013

A University of Canterbury conservation biology expert says New Zealand farmers should be responsible for looking after native bush on their land.

UC forestry professor David Norton says farmers are best placed to look after conservation on private land because of the significant amount of land area involved (two-thirds of New Zealand) and the fact that the land tenure is largely freehold.

“We need to find a new approach and this matches with what the Department of Conservation Director General has been saying,’’ Professor Norton says.

“If native biodiversity is to be sustained on agricultural land, a new approach is required because the present one is not working in many instances.

“Without a new approach, the biodiversity train wreck that lies ahead could exceed even our worst fears. We need trust and respect between farmers, conservation interests, scientists and officials as the basis for a strong partnership.

“We need a new kind of rural advisor trained in ecological and agricultural science whose role would be to provide biodiversity information, management and planning advice to farmers, and to help them apply for funding.

“We need to encourage conservation advocates, government agencies, ecologists and farmers to work together in developing novel answers and solutions to farmland biodiversity problems.

“Farmers are in the best position to manage significant native biodiversity assets on their land. Farmers are not afraid to be innovative. Society will applaud new initiatives that achieve their intended objectives, including novel solutions that might raise eyebrows in traditional farming and conservation circles.

“Critics on both sides of the fence will need to permit new approaches to be trialled and evaluated for a reasonable period of time, years rather than months,’’ Professor Norton says.

Conservation interests needed to recognise that most farmers want to do the right thing and protect native biodiversity, subject to time, money, feasibility and the likelihood of success.

“Rural ecologists would help farmers sustain the most significant natural assets on their farms, but would also work with farmers in better understanding their matrix management and its implications for biodiversity.

“These ecologists would be best located in existing local management structures such as district councils and thus be close to the farmers they are working with.’’

Professor Norton has just released a book on the issue, Nature and farming: Sustaining native biodiversity in agricultural landscapes, co-authored with Professor Nick Reid of the University of New England, New South Wales.

Most farmers want to be responsible for conservation on their own land.

The reason there is native bush and other flora and fauna worth conserving is because many have been doing so for generations.


The full direct and indirect costs.

April 24, 2013

The LabourGreen spin on their power plan is that it will cut the nation’s power bills by up to $700 million a year, lowering household power bills by up to $330 a year, and giving the economy a $450 million annual boost.

Mark Warminger, Portfolio Manager at Milford Asset Management, says that analysis is naïve and does not take into account the full direct and indirect costs.

NZ currently has $253bn of external debt and each 0.01% movement in the cost of debt adds $25m in interest payments. The uncertainty caused by the Labour/Greens Nationaliation by stealth policy is likely to add up to 1% to the cost of debt for New Zealand, due to lenders requiring an increased return for lending to a nation with political and economic instability. The cost of capital for all New Zealand companies will rise due to the same factors. A 1% increase in debt servicing costs for New Zealand’s overseas borrowing, in time would add up to NZ $2.5bn a year to the debt bill.

In addition to higher financing costs for the economy as a whole, the Government would receive around $450m a year less in dividends from the state owned power companies. The state owned power companies would need to write down asset bases by around 30% on an asset base of $15bn. This equates to $4.5bn of capital destroyed.

The flow on effects to New Zealand’s listed power companies is just as detrimental. Analysis suggests that share prices for Contact Energy, TrustPower and Infratil could on average fall by 20%. This is around $1bn loss of wealth for New Zealanders when adjusted for overseas ownership of these companies. On top of this there will be a cut in dividends for the listed companies of say 20%, further reducing returns to New Zealand shareholders. This will adversely affect many KiwiSaver schemes that have direct exposure to these companies.

It seems inevitable should the Labour/ Greens proposal be enacted that the listed power companies would take legal action, based around property rights. This is likely to be lengthy and costly with the Government footing much of the bill.

In conclusion, to save $700m per annum from our total electricity bill the direct and indirect costs of such a scheme would be in the order of the following; $2.5bn in additional debt servicing costs, $450m reduction in dividends, $4.5bn asset write-downs from State owned enterprises, $1bn of capital destruction of the listed power companies and a reduction of $100m of dividends per annum to New Zealand shareholders. In addition, there will be highly skilled jobs lost as power companies reduce capital expenditure and development. In the short term this will not be an issue whilst demand catches up with supply but by the time supply and demand are in balance it will be too late to add additional capacity in a timely manner.

Rolling blackouts anyone?

Other financial advisers have raised similar concerns.

Who do you believe – politicians desperate to be in government or a professional who understands finance and the markets?


Economic sabotage

April 24, 2013

Ever since National came to power it has concentrated on making the economy stronger.

It is succeeding but more than a year away from the next election the spectre of a LabourGreen government is providing a hurricane force headwind.

The government has put a lot of effort into policies which encourage savings, investment and export-led growth and LabourGreen are sabotaging that.

The façade behind the Labour-Greens power plan is crumbling as it becomes clear their electricity nationalisation ‘plan’ is nothing more than deliberate economic sabotage for attempted political gain, Economic Development Minister Steven Joyce says.

“Comments made in recent days by Grant Robertson, David Parker, and Russel Norman show they don’t care about the damage to KiwiSaver accounts, mum and dad investors and the wider New Zealand economy,” Mr Joyce says.

“Financial analysts including JB Were, Woodward Partners, Milford Asset Management, First NZ Capital, Devon Funds Management and Forsyth Barr are unanimous in their condemnation. One has labelled it a ‘hand grenade’ to the New Zealand economy, while others have said it will cut the value of every New Zealanders’ KiwiSaver account and lead to rolling blackouts.

“Investment in new power generation would suffer as would wider investment in the New Zealand economy. The National-led Government is focused on attracting investment in new business and jobs for New Zealanders. Labour and the Greens would do the exact opposite.

“Kiwis are deeply suspicious about the Labour-Greens announcement and its timing. It’s simply economic sabotage.

“The great irony is that it’s clear the policy is not worth it for anybody. The last time that we had central planning of the power industry, prices went up faster. Labour’s own Cabinet paper in 2006 said it would push costs up.

“New Zealanders will see it for what it is: a cynical and selfish attempt by left-wing parties to play politics with the value of New Zealand’s economic assets.”

The market isn’t perfect but I’d rather put my faith in it than an army of expensive bureaucrats.

And I’d feel much happier investing in companies that weren’t going to be at risk from government interference.


No room for humour in politics

April 24, 2013

Conservative Party leader Colin Craig said there is no room for humour in politics.

He was responding to reports of his threat to sue The Civilian with defamation for making him look ridiculous.

Few politicians require the assistance of a satirical blog to make them look ridiculous.

Like the rest of us, they’re quite capable of doing it by themselves.

If Craig can’t find room for humour in politics he should get out now.

Oscar Wilde said life is too important to be taken seriously.

So is politics. If you’re not able to laugh at it you’d have to cry.


Deliberation

April 24, 2013

“You said you were going to do that ages ago,” she said.

“I did and I am,” he said. “But it’s not the sort of job to start without due deliberation.”

“Deliberation’s all well and good,” she said. “But too much of it begins to look like procrastination.”


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