Fonterra forecast payout up 50c

September 24, 2013

Fonterra chair John Wilson has announced a 50 cent  increase in the forecast milk  payout for the 2014 season.

That takes the forecast farm gate price to $8.30 per kgMS which with an estimated dividend of 32 cents per share amounts to a forecast cash payout for this season of  $8.62.

“The record Forecast Farmgate Milk Price reflected continuing strong international prices for dairy, particularly Whole Milk Powder driven by robust demand from Asia, especially China.  We are still facing high levels of volatility around the world.”

Chief Executive Theo Spierings said the business, however, also faces headwinds, especially in the first half of the current financial year when we expect earnings will be significantly lower than the strong performance in the first half of 2013.

“The higher cost of goods will make it more difficult to drive earnings growth in our consumer and food service businesses in the first half of this financial year.  We also expect to see a negative impact on our product mix returns during the first half of the current year as milk powder prices significantly outpace the relative prices of cheese and casein.

“Prospects for the second half look more positive for our consumer businesses, but remain uncertain for NZ Milk Products.

“Our estimated dividend of 32 cents per share for 2014 currently remains unchanged.  Fonterra can draw upon its balance sheet and cash flow performance to support the estimated dividend.

“It is difficult to predict when extreme price volatility on product mix will reverse, but expectations are that the impact is likely to be short-term.

“We continue to have confidence in our Volume and Value strategy in our key markets. Looking ahead, prospects for the dairy industry and for Fonterra look positive and our growth ambitions remain unchanged,” said Mr Spierings.

This is good news for farmers and the wider economy but no-one should bank on this level of payout for next season.


Rural round-up

September 24, 2013

Fears of ‘erosion of capacity’ in agri-science :

Unless the ”erosion of capacity” in agri-science is halted and quickly reversed, New Zealand will remain a preferred supplier of low-tier food commodities and additives.

That is the message from Frank Griffin, who is concerned about the direction of the sector, including the proposed restructuring of AgResearch which would see the Invermay research centre reduced.

For more than three decades, Prof Griffin has led a University of Otago-based research team devoted to solving animal health problems in the deer industry. . .

Nominations open for third annual Dairy Woman of the Year:

The Dairy Women’s Network and Fonterra announced today that nominations open for the 2014 Dairy Woman of the Year on 1 October.

In its third year, the Award provides the winner with a position on the prestigious Women in Leadership Programme run by Global Women, valued at $25,000. The scholarship is sponsored by Fonterra Milk Supply.

The call for 2014 nominations comes on the heels of Barbara Kuriger’s 19 September graduation from the Global Women programme. Barbara was the inaugural winner of the Award in 2012. . .

Synlait Milk posts $11.5 million NPAT for FY2013:

Synlait Milk posted an $11.5 million net profit after tax for the year ending 31 July 2013, an increase of $7.1 million on FY2012 and ahead of its prospective financial information (“PFI”) forecast of $10.8 million.

The Company had revenue of $420 million in FY2013, an increase of 11.5% compared to $377 for FY2012 driven largely by increased sales volumes.

Synlait Milk Managing Director Dr John Penno said the Company made positive steps forward in all areas of its business relative to FY2012. . . .

Crown Irrigation appoints chief executive:

The newly formed Crown Irrigation Investments Limited (Crown Irrigation) has selected a proven investment professional, Murray Gribben, as its first chief executive.

Chair Alison Paterson said “Murray will bring to the role a strong combination of investment experience and working knowledge of the primary sector”.

Crown Irrigation has been established to help harness the potential of irrigation to accelerate New Zealand’s economic development by making targeted, bridging investments in larger, regional scale irrigation schemes. The Government has signaled its willingness to invest up to $400 million. . .

Excitement hosting World Alpaca Expo :

Kaiapoi alpaca breeder Kit Johnson is looking forward to opening the World Alpaca Expo and Conference in Hamilton this weekend.

”We have been waiting for this for a long time, since we got chosen back in 2007. This is the big event and we probably won’t get it for another 20 years,” the Alpacas Association of New Zealand president said.

”As the host president, I get to speak at the opening of the expo and the closing of the conference. The rest of the time I will be showing my animals and fleeces.”

Mr Johnson said there were 50 delegates coming from Australia and other delegates from the Netherlands, Germany, Sweden, Norway, Hungary, the United Kingdom and Canada. . .

Better beef genetics in dairy beef supply chain a win-win

Early results from research are showing clear advantage with the use of better beef genetics for dairy beef.

Two-thirds of New Zealand’s beef production originates from the dairy industry, yet despite this, few dairy farms use beef bulls of known genetics.

The five year Beef + Lamb New Zealand Dairy Beef Integration Programme is looking at the impact of using good beef genetics in a dairy beef supply chain. 

“The use of beef sires with high estimated breeding values (EBVs) for calving ease, growth and carcass characteristics on dairy farms is not commonplace, but will produce surplus calves of higher value to dairy farmers, beef finishers and beef processors,” says AgResearch scientist and project leader Dr Vicki Burggraaf.  . .

Farmax, Cashmanager Rural integration provides return to farmers:

A new partnership between leading farm management software providers Farmax and Cashmanager Rural has given sheep and beef farmers the ability to share data quickly and easily between the two programs.

The integration eliminates the need for double-entry of livestock information, saving farmers time and providing greater data accuracy.

The first phase of integration is already in place for sheep and beef farmers, giving them the ability to import livestock sales and purchase transactions from Cashmanager Rural into Farmax, meaning users of both systems only have to enter the data once.  The companies will launch a second integration in the future, allowing farmers to share physical farm management data. . .

Kiwi First Hits Garden Centres This Week:

The  incredible edibles® POTATO TOM™ will be released to garden centres early this week. A Kiwi first and potentially a world first at a commercial level, the new concept by incredible edibles® brings a grafted tomato and potato together in one plant. This is the first time at a commercial level anyone has delivered this concept to home gardeners in New Zealand. Andrew Boylan General Manager of Tharfield Nursery who produces and markets the POTATO TOM™ says “The POTATO TOM™ has gone viral, we can’t believe the response.  The phones have been running hot with garden centres throughout New Zealand vying to get hold of this new and exciting concept”. . .

Chardonnay makes a comeback as a must-have win:

This year, with 65% of all entries in the Chardonnay category of the New World Wine Awards winning a medal and Spy Valley’s 2012 Chardonnay taking out the title of Champion White Wine, the varietal is back as a must-have for wine lovers.

With a record number of entries, including more than 100 wines from the eagerly anticipated 2013 vintage, the highest number of medals ever was awarded overall this year.

“White wine varietals performed particularly strongly at this year’s awards with around 60% of all Sauvignon Blanc, Viognier, Pinot Gris, Gewurztraminer, Sparkling and sweet wines entered winning a medal. For the second year in a row, Chardonnay has scooped the Champion White Wine trophy which reflects the international resurgence in Chardonnay’s popularity,” says Jim Harré, Chairman of the judging panel. . .


NZ 3rd for economic freedom

September 24, 2013

New Zealand has maintained its 3rd place in world economic freedom.

It is no coincidence that countries which rank highly on economic freedom also do well on Transparency International’s perception of corruption index.
Economic constraints are more likely to lead to corruption as people seek to get round the rules by whatever means they can.
The Fraser Institute’s Economic Freedom of the World report began with 101 countries in 1980 and rated
152 this year.

The new countries added to the index (with data for both 2010 and 2011) are Brunei Darussalam, Cape Verde, The Gambia, Lebanon, Suriname, Swaziland, Tajikistan,Timor-Leste, and Yemen. Because of the civil war and the unreliability of the data since 2011, the rating for Syria has been temporarily suspended, though historical data are included in Chapter 2: Country Data Tables.

Top-rated countries
Hong Kong and Singapore, once again, occupy the top two positions. The other nations in the top ten are New Zealand, Switzerland, United Arab Emirates, Mauritius, Finland, Bahrain, Canada, and Australia.
Other major countries
The rankings of some other major countries are: United Kingdom (12th), United States (17th), Germany (19th), Japan (33rd), South Korea (33rd), France (40th), Italy(83rd), Mexico (94th), Russia (101st), Brazil (102nd), India (111th), and China (123rd).
Lowest-rated countries
The ten lowest-rated countries are: Algeria, Democratic Republic of Congo, Burundi, Central African Republic, Angola, Chad, Zimbabwe, Republic of Congo, Myanmar, and, in last place, Venezuela. Eight of the countries in the bottom ten are located in Africa.
Economic freedom is not just important for its own sake but for the benefits it brings.
Nations that are economically free out-perform non-free nations in indicators of well-being
Nations in the top quartile of economic freedom had an average per-capita GDPof $36,446 in 2011, compared to $4,382 for nations in the bottom quartile in2011US(PPP) dollars (Exhibit 1.6)
In the top quartile, the average income of the poorest 10% was $10,556, compared to $932 in the bottom quartile in 2011US(PPP) dollars (Exhibit 1.9). Interestingly, the average income of the poorest 10% in the most economically free nations is more than twice the overall average income in the least free nations.
Life expectancy is 79.2 years in nations in the top quartile compared to 60.2 years in those in the bottom quartile (Exhibit 1.10).
Political and civil liberties are considerably higher in economically free nations than in unfree nations (Exhibit 1.11).
The cornerstones of economic freedom are:
 (1) personal choice, (2) voluntary ex change coordinated by markets, (3) freedom to enter and compete in markets, and (4) protection of persons and their property from aggression by others. Economic freedom is present when individuals are permitted to choose for themselves and engage in voluntary transactions as long as they do not harm the person or property of others. While individuals have a right to their own time, talents, and resources, they do not have a right to those of others. Thus, individuals do not have a right to take things from others or demand that others provide things for them. The use of violence, theft, fraud, and physical invasions are not permissible in an economically free society, but otherwise, individuals are free to choose, trade, and cooperate with others, and compete as they see fit.

To a large degree, the EFW measure is an effort to identify how closely the institutions and policies of a country correspond with the ideal of a limited government, where the government protects property rights and arranges for the provision of a limited set of “public goods” such as national defense and access to money of soundvalue, but little beyond these core functions. In order to receive a high EFW rating, a country must provide secure protection of privately owned property, even-handed enforcement of contracts, and a stable monetary environment. It also must keep taxes low, refrain from creating barriers to both domestic and international trade, and rely more fully on markets rather than government spending and regulation to allocate goods and resources. In many ways, a country’s EFW summary rating is a measure of how closely its institutions and policies compare with the idealized structure implied by standard textbook analysis of microeconomics. . . .
The principles of economic freedom are National Party principles and have been reflected in policies which reduce the burden of government, liberalise trade, relax labour laws, cut personal and business tax rates, support a stable monetary environment and trust individuals and markets.
Green Party policies have always threatened those principles. Labour’s lurch left increases the threat of less economic freedom and the lower growth and poorer well being that will follow should they get into government.

Good don’t need to embellish

September 24, 2013

More questions are being raised about David Cunliffe’s CV:

In an interview with Fairfax Media this weekend Cunliffe said that as a business consultant he had “helped with the formation of Fonterra”.

However, Hooton, who was a communications consultant working on the merger, angrily rejected this, saying: “That was untrue.”

“David Cunliffe had nothing to do with the foundation of Fonterra.” . . .

An industry player close to the deal, who did not want to be named, said that BCG had carried out early work for the dairy board in 1998 around creating a single company and Cunliffe may have been involved in that. 

But he said they were “shunted to one side” after that and were not involved in the 2000 talks. He said it was “embellishing” to say that Cunliffe was involved in the formation of Fonterra. . . .

As employers we’ve found less is usually more with CVs.

Those who are good don’t need to embellish their qualifications and experience and those who feel the need to embellish their achievements aren’t usually as good as they think they are.


Knowing your constituency

September 24, 2013

Waitaki District mayoral candidate Fliss Butcher is angry and showing it:

Oamaru Rotarians have been labelled ”rednecks” and ”like a meeting of the clan” by Waitaki mayoral and council candidate Fliss Butcher and her husband, Ian.

The outburst followed a candidates’ meeting last week, organised by the Rotary Club of Waitaki, when Mrs Butcher was refused extra time to introduce herself after she used most of her allocated one minute to deliver a mihi (greeting or welcome) in Maori. . .

Last Wednesday’s public meeting was for Oamaru and Corriedale ward candidates for the Waitaki District Council.

Yesterday, chairman and meeting adjudicator John Walker said after candidates started speaking for their minute, Mrs Butcher passed him a note asking for extra time so she could speak in Maori.

”After careful consideration, including equality for all candidates and especially those who had already spoken, I decided against it and wrote back to say she could use her minute as she wished,” he said. . .

I wasn’t at this meeting but at an earlier meet the mayoral candidates forum Butcher chose to begin her introduction with a mihi.

I am familiar enough with them to get the gist of what she said but from comments afterwards am sure I was one of very few who did. Lots of people said if she’d known her audience she would have given a brief translation.

Maybe she was going to do that at the Rotary forum which is why she requested extra time.

However the report gives the impression it wasn’t about the audience but about her:

. . . ”We have the Treaty of Waitangi and if I want to speak in Maori to ground myself and feel better before making my introduction, I am entitled to do so, as the other candidates are.” . . .

We do have a treaty and she is free to speak in any language she chooses and do what she wants to ground herself – within the time allotted.

If she needed more time she ought to have consulted the organisers before the forum and she admits that:

Mrs Butcher acknowledged it was ”probably my fault” she had not raised the extra time before the meeting, but said she was granted extra time during a Waitaki mayoral forum. . . 

Federated Farmers held a forum for mayoral and Corriedale ward candidates last night.

She didn’t do a mihi but she was asked a question over a dispute she’d had with the community water scheme some years ago.

The ODT rated Dunedin City Councillors, gave her 5/10 and noted:

Erratic performer who started the term by walking out part-way through the incoming council’s first meeting and launching a scathing attack on mayor Dave Cull’s appointments, accusing him of gender and political bias.

Took a leave of absence while grappling with personal issues, and skipped part of the 2011 budget process for ”nanny duties”, but fended off calls to resign by announcing she would not seek re-election.

Bounced back later in the term but remained prone to sudden outbursts of snarling criticism, applause and even hissing in meetings. . .

Her reaction to her request for extra time does nothing to contradict the impression this gives that she wouldn’t be a good mayor or councillor.

Knowing your constituency is a basic requirement for people seeking election and her behaviour show she doesn’t.


We need just one

September 24, 2013

The start of today’s first race in the America’s Cup has been delayed because there’s not enough wind.

There’s doubt over whether there will be a second one.

But we need just one race – just one more win.

It’s Emirates Team New Zealand 8 – Oracle Team USA 5.

As the Team NZ Facebook page says: Clear morning, clear heads, clear goal.

 

 

 

 


Different David same policy

September 24, 2013

David Cunliffe plans no changes to Labour’s main policy planks:

. . . After unveiling a new shadow Cabinet line-up, Mr Cunliffe confirmed his deputy, David Parker’s key policy initiatives would remain in place and, in some places, be extended.

“They are all intact although I think it’s probably fair to say you may see more work from David Parker in the monetary policy area, quite possibly,” Mr Cunliffe told Businessdesk on Monday.

“Capital gains tax is intact. We may do some fine-tuning. The KiwiBuild policy is great. There may be some other changes in that portfolio as well.”

He confirmed the New Zealand Power single electricity buyer policy was also “intact.” . . .

There’s a different David leading the party but he’s spouting the same policies.

They were bad enough by themselves.

Add the ones promised during the campaign and the concessions labour would have to make to the Green Party if it’s a coalition party and you have an even greater lurch to the left.


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