Literally sickening

September 25, 2013

If there’s a convenient time and place for a stomach bug, the middle of a media conference isn’t it:

Prime Minister John Key says he wanted to vomit on the press – literally – but managed to keep his stomach down.

“I don’t know whether I ate something or whatever but it was short and sharp,” Key told reporters in New York. “I had a desperate sensation to throw up on you when I was doing my last media conference and it would not have been that great.” . . . 

He wouldn’t be the first interviewee to find the media sickening, but it’s usually in a figurative rather than literal sense.

 


Word of the day

September 25, 2013

 Bugaboo –  something that causes baseless fear or worry;  imaginary object of obsessive, usually exaggerated alarm, fear or anxiety; bugbear; false belief used to intimidate.


Rural round-up

September 25, 2013

Increases for selected fish stocks show success of QMS:

Primary Industries Minister Nathan Guy has today announced increases to catch limits for a range of New Zealand fisheries, thanks to healthy stock levels.

“These decisions today reflect the success of the Quota Management System (QMS), which is recognised as world leading. It is driven by science and responsive to change, which means that as stocks improve we can increase our sustainable take”, says Mr Guy.

Healthy stocks have led to increased Total Allowable Catch (TAC) limits for Hoki 1, Ling 5, Ling 7, Orange Roughy 3B, Scampi 2, Kingfish 7, Leatherjacket 3, Oyster 4 and Sea Perch 1.

“For several stocks, such as Ling 6, Bluenose 1, 2, 3, 7 and 8 and Snapper 7, I have decided to maintain the current TAC. . .

Regulatory Californication – Willy Leferink:

Isn’t it amazing how some people love catastrophy  Last month’s dairy recalls saw some truly leap off the deep end and when we were just getting through that, others latched onto a report by a New York-based dairy strategist.  It warned the New Zealand dairy industry could be squashed by a resurgent U.S. one.

I am only going off media reports but “Arise the Hunter: The Re-orientation of the US Dairy Industry and Implications for New Zealand,” by Tim Hunt certainly impressed the media.  The U.S. dairy industry produces five times the volume of milk as we do and its star used to be California.  I say ‘used to,’ because our new found love of red tape has me worried our dairy industry may be undergoing ‘Californication.’  There is a raunchy TV series going by that name where a fictional novelist solves his ‘writer’s block’ by having affairs.  Is our affair with regulation going to tie our industry up in knots, just like it did to California’s?

I learned how much California has become horridly regulated from Nicola Waugh.  As a Nuffield New Zealand Farming scholarship recipient, she travelled overseas in 2011 from March until October.  As a farm consultant for AgFirst Waikato, she also understands what regulation is. . .

Stay safe these holidays:

With school holidays starting this week, Federated Farmers is putting out a timely reminder to be vigilant with farm safety.

“Our home is our work place and when the children are home from school, we need to be more alert to hazards around the farm,” says Jeanette Maxwell, Federated Farmers Health & Safety Spokesperson.

“Last year we had 14 fatalities and 408 serious injuries on farm, don’t become a part of the statistic these holidays. Be mindful of visitors on farm wanting to experience the rural lifestyle, educate them on hazards and keep them safe. . .

More options for growers under Wools of New Zealand / New Zealand Wool Services International agreement:

Growers will be the ultimate winners of a direct farm-to-scour service agreement between Wools of New Zealand and New Zealand Wool Services International (NZWSI).

Wools of New Zealand will be the face to their grower shareholders and supporters with NZWSI providing all of the back office logistics to move wool efficiently from farm directly to the scour and ultimately, to market.

Ross Townshend, Chief Executive of Wools of New Zealand, says the agreement is a ‘win-win’ for shareholders and suppliers providing them with access to a range of sales options including a weekly schedule, monthly plans and more Wools of New Zealand brand contracts, such as the forthcoming Camira lambswool contract. . .

Big dairy results fortnight kicks off with Synlait:

In a big results fortnight for most dairy farmers and the New Zealand economy, listed milk processor Synlait has started the ball rolling with a net after tax profit for 2012/2013, which was ahead of its prospective financial information forecast. Fonterra Cooperative Group releases its 2012/13 results tomorrow with the other two cooperatives due to follow next week.

“For supplier-shareholders of Fonterra, Synlait, Tatua and Westland, this is going to be a huge fortnight, given Open Country Dairy has already paid its suppliers for the 2012/13 season,” says Andrew Hoggard, Federated Farmers Dairy Vice-Chairperson.

“I would add for New Zealand, too, since this relates directly to over a quarter of our country’s merchandise exports. . .

Wrightson chair John Anderson to retire at October meeting:

(BusinessDesk) – PGG Wrightson chairman John Anderson will retire from the rural services company at the annual meeting next month.

Anderson, who joined the board during a tumultuous shake-up in 2010, will step down from the board at the Oct. 22 meeting, the company said in a statement. A new chairman will be appointed after the meeting. Anderson’s appointment coincided with a changing of the guard in 2010 when Craig Norgate and Baird McConnnon left the board and China’s Agria Corp came on as a cornerstone investor, going on to mount a partial takeover of the company. . .

Lindauer Leads Lion’s Charge at New World Wine Awards 2013

New Zealand’s most popular sparkling wine wins gold medals at wine awards

23 September 2013 – Lindauer Classic Brut Cuveé, Lindauer Classic Rosé and Saints Sauvignon Blanc 2012 have scooped gold medals at the New World Wine Awards 2013, leading the way for Lindauer Special Reserve Blanc de Blancs which won silver. In addition, following on from its gold medal win, Lindauer Classic Rosé was then named Champion Bubbles.

A record number of entries were received for this year’s New World Wine Awards, which were judged by an independent panel of 13 wine experts at Wellington’s Westpac Stadium in July. . . .

Spy Valley Chardonnay Named Champion White Wine:

Marlborough’s Spy Valley Wines is delighted to announce that their 2012 Chardonnay has been named Champion White Wine at the 2013 New World Wine Awards.

Now in its 11th year, the New World Wine Awards utilise the internationally recognised ‘20 point scoring system’, with wines blind tasted and evaluated by an independent panel of 13 judges, many from overseas. Winners of each category are then re-judged to find the Champion Red, Champion White and Champion Bubbles, with the sole criteria being that all wines must retail for under $25. . .

Mission Reserve Chardonnay 2012 wins Gold at the 2013 New Word Wine Awards:

One of only two Chardonnays to be awarded Gold.

The Mission Reserve Chardonnay 2012 is one of only two Chardonnays to win Gold at the 2013 New World Wine Awards. These Awards are exclusively for the very best wines retailing at under $25.

In total, a record 1,099 wines were entered from 157 wineries, with the Mission Reserve Chardonnay taking out Gold and a coveted place in the Top 50.

This recognition follows on from a Gold at the 2010 Awards, and marks 15 years of local and international acclaim for the classically crafted Hawke’s Bay Chardonnay. . . .


Bounty on butterflys

September 25, 2013

The Department of Conservation has put a $10 bounty on great white butterflies for the school holidays to help eradicate the pest from the Nelson area, Conservation Minister Nick Smith announced.

“We want great white butterflies dead not alive. They are an unwelcome pest and pose a major threat to endangered native cresses, and garden and commercial plants like cabbage and broccoli,” Dr Smith says.

“To date they have only been found in Nelson Tasman but we must do everything we can to ensure they don’t become a permanent widespread pest. Female great white butterflies can lay as many as 750 eggs so every butterfly killed potentially stops up to another 750 butterflies emerging.

“The peak period for the butterflies emerging from pupae this spring coincides with the school holidays. It’s a great opportunity to involve school children in conservation, as well as earning some extra pocket money. It also has the potential to help us curb a spring breeding surge.

“The bounty is not limited to children. Adults are also invited to catch and kill great white butterflies and bring them in to claim their bounty.”

Butterflies should be put in a jar or sealed plastic bag and stored in the freezer so they don’t go mouldy until they can be dropped off to DOC’s Nelson office on weekdays between Monday 30 September and Friday 11 October. The bounty will not be available at other times and is only for adult butterflies.

“Great white butterflies are mostly found in and around the Port Hills area of Nelson, but have been found as far out as Stoke and the Glen,” Dr Smith says.

“It can be difficult to tell great white butterflies and small white butterflies apart but it doesn’t matter if small whites are killed as they are also a garden pest. DOC is still asking people to bring in small white butterflies to double check they are not great whites. Although the $10 reward won’t be available, those who drop them in will go in a draw to win spot prizes.”

Country kids in years gone by earned good pocket money catching rabbits and bird pests.

This is a great initiative to gainfully occupy children during the holidays, incentivise them to catch pests and do their bit for conservation.

 

 


Crusading conservationists

September 25, 2013

The Opposition is doing its best to land a blow on Conservation Minister Nick Smith but not making any headway.

At Question Time yesterday he just stuck to the facts –

I can only quote Doris Johnston, the Deputy Director-General of Conservation, and she said this: “He never saw the draft submission that everyone’s been talking about. It was never provided to his office. It was an internal working draft by [Department of Conservation] staff …”. I think that is pretty clear. . . .

Again I quote Doris Johnston, the Deputy Director-General of Conservation, who was very well respected under the previous Government in that role. She said this: “The Minister did not play any role in my decision making. He never told me his view.” So how could it be possible for them to have drawn any conclusion about my view? I simply asked for a full briefing and a copy of the submission. . . .

The answers also revealed concerns in the Department:

. . . Can I quote directly from an email from a senior Department of Conservation planning manager, who said this before the submission was finalised: “I’m a bit concerned that from a manager’s perspective, the issue about whether we should be involved in the plan change.” That is, there were senior managers in the Department of Conservation who did not agree with the draft submission.

Those concerns have prompted a review of the submission process by DoC:

The Director General of Conservation Lou Sanson says he has asked for a review of the department’s process for dealing with its submission on the Tukituki Catchment Proposal.

Mr Sanson says he stands by the decision taken by his senior managers not to submit on the wider environmental aspects of the proposal and says the Minister did not direct DOC about the submission it was making.

Mr Sanson says he does have questions about the time frames for making final decisions on the submission.

Mr Sanson says he has also initiated an internal investigation into the unauthorised release of a departmental email in connection with the submission.

He says the release of these emails calls the department’s integrity into question and he has asked an independent reviewer to look into this issue. . .

Labour is blaming the leak on low morale in DoC.

It is more likely to be confusion over the role of crusading conservationist and public servant.

This problem was raised by former States Services Commission Mark Prebble in an interview with Kathryn Ryan:

“Public servants have to implement the policies of the government of the day

Many people come to government to try to support a good cause. They don’t realise the one who has to determine which good cause is to be supported is the democratically minister of the day. And quite a lot of departments, not slinging off at their professionalism but say DOC, you get a lot of people who join DOC because they know they want to save a kakapo and if not a kakapo it will be the lesser spotted whatever. And if the lesser spotted whatever is not on the minister’s list of priorities they’ll find it hard to do.

A key part of the role of senior public servants is to explain to them well it is the minister who has to take the heat in public about that and the public servant really isn’t just employed to follow their own interests and if they want to follow their interests they can go and work in the private sector like anyone else. . .

. . . No public servant should be zealous about the particular cause they’re interested in. They should be zealous about democracy and respecting the law. . .”

He gave DoC as an example of people who join with an agenda which might not be that of the government which they are there to serve.

Federated Farmers also criticises the draft:

Federated Farmers is unsurprised a draft Department of Conservation (DoC) report on the proposed Ruataniwha Water Storage Scheme never advanced beyond draft status.  The Federation instead believes publicly accessible information needs to lead the debate.

“I would have thought our politicians would have learned from the recent C. botulinum scare that the only report which counts is the final one,” says Ian Mackenzie, Federated Farmers Environment spokesperson. 

“Instead of shadow boxing over what a draft DoC report may have said, we need to focus on the facts and the detailed amount of evidence, which is publicly accessible. 

“Take the Section 32 report on the Ruataniwha Water Storage Scheme.  This identifies the source for up to 70 percent of phosphorous (P) loading at times of low flow in the Tukituki as being the four urban wastewater treatment ponds, servicing Waipukurau, Waipawa, Otane and Takapau.

“So if you genuinely want to stop the Tukituki from “running green,” then upgrading wastewater plants seems an obvious place to start.  That is underway but it also takes money; the kind of money economic activity generated by water storage delivers.

“But don’t take my word for it.  Read the backgrounders that are available from Hawke’s Bay Regional Council’s website I would also encourage doubters to read up on Canterbury’s Opuha Dam because it has exceeded all environmental and economic expectations.

“This is why we take issue with the suggestion Ruataniwha is open slather with few controls.  That’s insulting to anyone who takes freshwater management seriously.  There is also a package being put in place, which puts greater expectations on farmers and townships alike.

“That’s the kind of community-led ownership of freshwater management that reforms underway are looking to encourage. 

“It also baffles me that those who speak loudest about ‘collaboration’ and ‘democracy’ become combative when they don’t get their way.  Or rather, when they don’t think they’ll get their way.

“If you don’t trust my words about the volume of work being put into Ruataniwha, just read the evidence submitted to the Environmental Protection Agency (EPA).

“It shows you how the applicant has little to hide,” Mr Mackenzie concluded.

Water quality is an important consideration but opposition must be based on facts not an anti-farming, anti-irrigation bias.

Experience in North Otago shows improved water quality because of improved water flows during dry periods combined with compulsory environmental farm plans for anyone taking water through the irrigation company.


Fonterra final payout up

September 25, 2013

Yesterday we had the good news of a higher – and record – forecast milk payout for this season and today a higher than forecast payout for last season.

Fonterra Co-operative Group announced today a Cash Payout of $6.16 for the 2013 year for a 100 percent share-backed farmer, comprising a Farmgate Milk Price of $5.84 per kgMS and a dividend of 32 cents per share.

Chairman John Wilson said that while the Payout was higher than forecast at the beginning of the season, it was 4 per cent down on the previous year.

“2013 was a year that tested our resilience.  After a superb first six months for both production and performance, our farmer shareholders endured a drought which in some regions was the worst in nearly 70 years.

“The extremely dry conditions meant a drop in New Zealand milk production of 9 per cent in the last six months of the season.  Overall, New Zealand milk production declined 2 per cent to 1,463 million kgMS for the season to 31 May 2013, which hit our farmers and the business financially.

“Our strong balance sheet, with a debt to debt plus equity ratio of 39.6 per cent, and operating cash flows meant we were able to support farmers through the drought’s immediate impact by raising the Advance Rate paid to farmers for their milk.  This change, however, contributed to a 28 per cent drop in operating cash flows compared with the previous year.

“We now have a much stronger capital structure which came into its own this year, following the launch of the Fonterra Shareholders’ Market and the Fonterra Shareholders’ Fund. 

“The Fonterra Shareholders’ Market brought in greater flexibility, with farmers able to buy and sell shares throughout the year at the prevailing price. 

“Meanwhile, the response to the Fund from both institutions and smaller investors was a genuine expression of confidence in the Co-operative and our performance,” said Mr Wilson.

Farmers are still questioning whether TAF (Trading Among Farmers) was the right move but fears it would impact on the milk payout haven’t been realised.

Fonterra Chief Executive Theo Spierings said Fonterra had made good progress with its strategy during the year, particularly in foodservice, everyday nutrition and advanced nutrition. Climatic and market conditions, however, frustrated efforts to achieve higher earnings.

“The combined impact of the drought and the reshaping of Fonterra’s Australian business, saw the Co-operative’s normalised EBIT of $1 billion for the 2013 year fall 3 per cent short of last year.

“The business achieved strong EBIT growth in Asia, Africa, the Middle East and in our Soprole business in Chile.  However, this was offset by a weaker second half from NZ Milk Products and a 37 per cent decline in normalised EBIT in Australia and New Zealand (ANZ) as we make changes to our Australian business.

“The extreme drought caused unprecedented volatility – reflected in a 64 per cent spike in Whole Milk Powder prices from January 2 to April 16.  This, in turn, had a significant impact on the cost of milk purchased by NZ Milk Products, and meant the high returns achieved in the first half as a result of price premiums, product mix, cost savings and productivity gains were eroded in the second half.

“Although the New Zealand consumer business grew its earnings in a tough trading environment, Australia faced heightened competition for lower milk volumes, and continuing margin squeeze for consumer brands.  We expect the significant reshaping of our Australian operations, which is going to plan, will turn performance around.  The business has already achieved a 7 per cent reduction in operating expenses of $49 million (after excluding the impact of the closure of the Cororooke site and Brand impairments),” said Mr Spierings.

Net finance costs were $41 million lower than last year, mainly due to the benefit of an increase in gains from fixed interest rate hedging and the lower cost of funding. Earnings also benefitted from a tax credit of $68 million which was primarily due to the revaluation of deferred tax balances and recognition of New Zealand tax losses.

Earnings per share were up 7 per cent to 44 cents after taking into account the bonus issue, and on a normalised basis were up 9 per cent to 47 cents per share.

Precautionary Recall, Reviews and Rebuilding Reputation

Just as farms and farmer confidence started to recover from the drought, Fonterra initiated a precautionary recall of some whey protein concentrate, as a result of test results received on the last day of the Co-operative’s financial year.

“The subsequent all clear following further tests was a relief, but did not alter our view that the recall was the correct course of action at the time.  Fonterra cannot, and will not, take risks with food safety and the health of consumers,” said Mr Wilson.

“The thorough internal Operational Review instigated by CEO Theo Spierings has been completed.  The Board is also undertaking its own independent inquiry and we are fully co-operating with the New Zealand Government’s Joint Ministerial Inquiry which is taking place over a longer timeframe,” said Mr Wilson.

The precautionary recall challenged the Co-operative, but has also provided the opportunity to make a profound change for the better, said Mr Spierings.

“Within days of locating and quarantining product, we began an operational review to find out what happened, why, and what we must do to prevent this from happening again – and we are now implementing the recommendations of the review.

“Additional resources have also been deployed to ensure we manage change and rebuild our reputation, while at the same time we continue to run the business efficiently. The creation of a new role of Group Director of Food Safety & Quality, reporting directly to me, sends a clear message about the sharper focus we are giving to continuously improving food safety and quality.

The way this was handled, and in particular the way the issue was communicated, let the co-operative, its suppliers, shareholders, customers and New Zealand’s reputation down.

The changes made must result in far better systems and communication.

“In the past year, we have invested $925 million in building production, manufacturing and supply chain capability to process our New Zealand milk, developing our China farms, as well as beginning construction of a $144 million new cheese and dairy ingredients plant in partnership with A-ware Food Group in the Netherlands.

“We have also made a number of key senior appointments to our management team.  In addition to the appointment of Judith Swales as Managing Director Australia, we have hired Lukas Paravicini as our new Chief Financial Officer, and Jacqueline Chow as Managing Director of Global Brands and Nutrition.

“They join an already strong, dedicated management team which will drive the business forward in the coming year,” said Mr Spierings.  . . .

The full annual results are here.


Can we blame them?

September 25, 2013

It’s now Emirates Team New Zealand 8 – Oracle team USA 7.

Even worse – Labour has made a big gain in the latest Herald DigiPoll.

Is there a link, can we blame the former on the latter?


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