Lone MPs shouldn’t get leaders’ budgets

December 11, 2013

Guess who’s paying for Hone Harawira’s trip to South Africa for Nelson Mandela’s funeral?

Reacting to confirmation from Hone Harawira’s office that taxpayers will be footing the bill for the Mana Party leader’s trip to the Mandela service*, Executive Director of the Taxpayers’ Union Jordan Williams said:
 
“This trip is a slap in the face to taxpayers and particularly Mr Harawira’s electorate, who are supposed to be the beneficiaries of his parliamentary funding.
 
Mr Harawira already spends more than any other non-ministerial member of Parliament.  Earlier in the year the public found out he spent even more than the then Leader of the Opposition.
 
Originally Mr Harawira told the public that he was footing the bill himself.  Now we know that he’s treating the taxpayer funded Parliamentary budget as a travel slush fund.”

As a party leader in parliament Harawira receives extra funding through a leaders’ budget.

Bigger parties have the whips to oversee spending of public money and exercise some discipline over it.

These one-man vanity vehicles have no discipline and no checks on their spending.

That Harawira can use public money to follow a whim to go halfway round the world and back for absolutely no public benefit is yet one more argument for change.

To qualify for leaders’ budgets parties ought to have more than a single MP.


Rural round-up

December 11, 2013

New Zealand meat industry calls for speedy conclusion to Korea FTA:

Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA) are calling for a speedy conclusion to New Zealand’s free trade agreement (FTA) negotiations with Korea.

Concluding negotiations quickly is vital. Korea finalised FTA negotiations with Australia last week, and, on top of the Korea-US FTA that was signed in 2012, this has the potential to place New Zealand exporters at a significant disadvantage in the near future, the two organisations say.

Korea imposes 40% tariffs on beef imports, which cost New Zealand producers around $48 million in 2012. Korean tariffs on other products like prepared meats can be as high as 72%. . .

Federated Farmers on ECan’s Land & Water Regional Plan

Federated Farmers knows farming practices need to evolve in order to minimise Nitrogen loss from Canterbury farms.

“The Land and Water Regional Plan has to comply with the National Policy Statement (NPS) on freshwater which introduces limits and national bottom lines,” says Ian Mackenzie, Federated Farmers Environment spokesperson.

“Meeting compulsory national bottom lines for nitrates on much of the Canterbury plains, is going to be very difficult without a major shift in how we farm, especially on the lighter soils.

“Right now, Federated Farmers is working as part of a wider partnership with all others in the primary industries to represent a common position to Environment Canterbury (ECan). . .

Council win saves time and money:

Federated Farmers Manawatu-Rangitkei is thrilled by the recent wins in the Horowhenua District Plan.

“We have had two significant wins from the Horowhenua Council hearings, which means we will not need to appeal in the Environment Court,” says Andrew Hoggard, Federated Farmers Manawatu Rangitkei provincial president.

“It is a testament to the great working relationship we have with the council, and the great work of our Policy Advisor, that we were able to get some practical and workable decisions made around ‘Housing’ and ‘Hazardous Substances’. . . .

Farming builds communities in adverse times – James Houghton:

Last week, Federated Farmers Waikato held a fundraising function to raise money for the Rural Support Trust. It is not so long ago that the Trust was stepping in to aid farmers through the drought and working with Federated Farmers on our rural mental health campaign, ‘When Life’s a Bitch’. It is important that we give back to organisations like this who are the ones we call on in our time of need.

The function was not only about raising money for the organisation but it was a chance for the community to get together and focus on building relationships. The Chairwoman of the Regional Council, Paula Southgate, attended the dinner along with other rural community stakeholders, and overall the night was a success, raising $3500 for the Trust. Federated Farmers Waikato donated $3000 for the Trust to direct towards rural mental health initiatives, which is an area that requires a significant amount of resources. . .

Farm package targets sustainability, growth:

New Zealand’s largest rural lender today launched a lending package for farmers wanting to invest in improving the environmental sustainability and productivity of their farms.

ANZ Bank’s Farm Development Package includes a low-interest loan of 4% p.a. for fulfilling compliance on effluent management, water quality management and water and energy conservation.

“Fast-growing markets in Asia are producing enormous opportunities for New Zealand farmers. But increasing agriculture production is creating complex challenges on how to manage environmental stresses – in particular the impact of dairy farming on water quality,” said Graham Turley, ANZ Managing Director Commercial & Agri. . .


Word of the day

December 11, 2013

Fratchy – irritable and argumentative; peevish; quarrelsome; the result of a blunt razor or of not having shaved one’s face or legs for a few days; stubble.


Lamb crop down 4.7%

December 11, 2013

Last season’s drought and the continuation of conversions to dairying has taken its toll on this year’s lamb crop.

Beef + Lamb New Zealand’s (B+LNZ) Lamb Crop 2013 report confirms that the number of lambs tailed across New Zealand is down – by 4.7 per cent – compared with last spring.

A total of 25.5 million head were tailed – 1.3 million fewer than 2012 – making the current lamb crop the second smallest in nearly 60 years. Only 2010-11 was lower.

B+LNZ Economic Service Chief Economist Andrew Burtt says the lamb crop figure is actually higher than many may expect, given the impact of last season’s drought on ewe numbers and ewe condition at mating. “But we’re seeing good lamb thrift compared to last year – thanks to lower stocking rates and favourable pasture growth in most regions. If pasture continues growing at current rates, it could trigger early store sales from regions that are traditionally summer dry.”

When analysed by island, the North Island lamb crop is down 7.4 per cent and the South Island down by 2.3 per cent.

The smaller lamb crop impacts on export processing numbers, which are expected to drop 6.8 per cent to 19.5 million head, making 2013-14 the third lowest export lamb total since 1960.

“However, the average export lamb slaughter weight is expected to increase 2.3 per cent to 18.4kg, due to lower stocking rates and more available feed. This per-head weight increase won’t be enough to offset the drop in numbers and we still expect total lamb production to be down by approximately 5 per cent,” Mr Burtt says.

The national ewe lambing percentage was 120.8 per cent – down 3.8 percentage points on last year’s record 124.6 per cent. Again, the North Island took the biggest hit – down 5.8 percentage points to 117.6 per cent. The South Island’s 123.6 per cent represented a fall of only 2.1 percentage points.

Mr Burtt says a noteworthy feature of spring 2013 was the significant decrease in the number of hoggets mated. “Many farmers opted to limit the numbers of hoggets put to the ram, due to the tight feed situation at mating and hogget weights. The result is only 1.13 million lambs from hoggets – a 17 per cent drop.”

Unsurprisingly, mutton processing numbers are expected to be well back on last season, down 20 per cent to 3.3 million. This reflects the drought-driven high cull of ewes during 2012-13.

The Lamb Crop survey covers about 500 commercial sheep and beef farms, which are statistically representative of New Zealand’s commercial sheep and beef farms. The full report is on the B+LNZ website at: Lamb Crop 2013

Region highlights:
Northland-Waikato-Bay of Plenty
• Ewes to ram were down 3.8 per cent due to drought and also increased dairy support activity on sheep and beef farms.

• The ewe lambing percentage was down 5.1 percentage points to 115.8 per cent while the number of lambs from hoggets was down 17 per cent; both of these factors reflect the severity of the drought in the previous summer and early autumn.

• The region’s lamb crop was down 8.4 per cent to 3.1 million lambs and makes up 12 per cent of the New Zealand crop.

East Coast North Island
• Overall the region’s ewes to ram were down 2.5 per cent to 4.7 million though decreases were greater in Hawke’s Bay localities that were most severely affected by drought.

• The ewe lambing percentage was down 5.0 percentage points to 116.6 per cent while the number of lambs from hoggets was down 6.6 per cent to 295,000. Both of these factors reflect the severity of the previous summer early autumn drought particularly in the Hawkes Bay.

• The region’s lamb crop was down 6.5 per cent to 5.77 million lambs which equates to 23 per cent of the New Zealand crop.

Taranaki-Manawatu
• Overall, the region’s ewes to ram were down 1.8 per cent to 2.2 million, however, drought was particularly severe in the Taihape hill country. There was a trend to sell cattle out of the drought regions as a priority ahead of reducing sheep numbers.

• The ewe lambing percentage was down 8.1 percentage points to 121.9 per cent while the number of lambs from hoggets was down 6.5 per cent to 144,000. Both of these factors reflect the severity of drought during the previous summer and early autumn, particularly in the Taihape hill country.

• The region’s lamb crop was down 7.9 per cent on the previous spring to 2.88 million lambs, equivalent to 11 per cent of the New Zealand lamb crop.

Marlborough-Canterbury
• Ewes to ram in the region remained almost static at 4.1 million (+0.6%). This reflects the South Island being much less affected by drought than the North Island.

• The ewe lambing percentage was down 2.6 percentage points to 113.1 per cent while the number of lambs from hoggets was down 29 per cent to 200,000. Both of these factors reflect the drier conditions and lighter condition of stock in the autumn compared with 12 months earlier.

• The region’s lamb crop was down 3.2 per cent on the previous spring to 4.8 million lambs or 19 per cent of the New Zealand lamb crop.

Otago-Southland
• Ewes to ram in the region remained almost static at 6.6 million (+0.5%).

• The ewe lambing percentage was down 4.8 percentage points to 122.6 per cent in Otago and down 1.4 percentage points to 138.0 per cent in Southland. Although scanning percentages were down on the previous year, weather conditions were good at lambing and lamb survival was excellent. Overall, lambs from hoggets for the combined region were down 21 per cent to 332,000.

• The region’s lamb crop was down 1.9 per cent on the previous spring to 8.9 million lambs – 35 per cent of the New Zealand lamb crop.

The full report is here.

This morning’s announcement of another increase in Fonterra’s forecast payout will put more pressure on conversions to dairying and diary support.


Foreign workers vital for rural contractors

December 11, 2013

Why are we letting immigrants work when there are so many unemployed New Zealanders?

It’s a simple question with a  several answers:

There isn’t always a match between the skills and attitude of the unemployed and the available jobs.

People looking for full time, permanent work aren’t always willing to accept part time or temporary positions.

The people without work don’t necessarily live where the work is and are unable or unwilling to move.

That’s why the Rural Contractors NZ says foreign workers are vital for the industry.

RCNZ president Steve Levet was commenting on recent claims made by Labour leader David Cunliffe about foreign labour being used in the horticulture sector at the expense of local workers.

“Any similar claim made about rural contracting is neither accurate nor fair,” he explains. “Nobody I know turns away a Kiwi who is willing to work.”

But Mr Levet admits there is a gap between rural contractors’ needs for trained agricultural machinery operators and unemployed New Zealanders who could do that work. Part of this shortfall is met by bringing in skilled operators from overseas.

“Contracting is a seasonal business and one that uses sophisticated machinery that requires technical skill to operate productively. Many contractors would like to employ New Zealanders but by the time they have trained them, the season is over.

“In many cases, the operator does not return the next year so the contractor has lost the investment they have made in training.”

Mr Levet says political parties of all persuasions need to understand that a dire shortage of suitable agricultural machinery operators means rural contractors rely on employing skilled people from overseas on a temporary basis each season and have done so for many years.

He adds that many of the applicants Work and Income NZ (WINZ) tries to fill these vacancies with; either do not have the right skill-set and/or attitude to be successful.

“We are talking about operating highly technical and very expensive pieces machinery. It is unrealistic, unsafe and impractical to expect unemployed people to walk off the street and successfully take up these positions.”

However, contractors are looking at better ways to work with WINZ to better source and train operators here. He adds that a recent open day held by Rural Contractors NZ members in Southland offers a good model on how this could be done.

Mr Levet says the seasonal nature of rural contracting means workers with the right skills are needed for only 3-4 months each year and, understandably, this kind of short-term employment does not often suit locals who are looking for fulltime work.

“The rules around employing temporary, skilled people from overseas prepared to work for 3-4 months each year need to be simplified as do the regulations restricting people who have previously worked here in past seasons coming back to New Zealand to work,” Mr Levet adds. “This is vital to ensure that the primary sector continues to be the economic driver for New Zealand”

Lots of young New Zealanders head overseas for work in other countries and usually find it easy to get work for the same reason contractors and farmers welcome foreign workers here – they’re usually keen, skilled and reliable.

Even jobs which take little or no skill require the right attitude and ability to turn up on time and do what’s required to the standard required.

But many rural contracting job require experienced staff and would be dangerous for the unskilled.

The time and effort it takes to employ foreign staff is a hand brake on productivity.

It can also be costly in industries like horticulture when fruit and vegetables have to be harvested when they’re ready.

Simplifying the rules and processes and accepting that sometimes overseas workers are often more suited to seasonal work than locals would help.

 


Fonterra payout forecast to be . . .

December 11, 2013

Fonterra is making an announcement any minute.

Its share price has been falling.

Both of these indicate an increase in the forecast for the farmgate price of milk.

UPDATE:

Email from Fonterra chair says no change:

Forecast Farmgate Milk Price Maintained

Milk powders are continuing to sell at very high prices because of the strong global demand and limited supply.
Only four months into the season, we are in an extraordinary situation.
The gap between prices for milk powders compared to cheese and casein is greater than it has ever been before.
Your Board has determined that:
– The forecast Farmgate Milk Price will be maintained at its current level of $8.30 per kgMS (vs the $9.00 per kgMS as calculated under the Milk Price Manual);
– The estimated full year dividend will be 10 cents per share – delivering a forecast Cash Payout of $8.40;
– The Advance Rate schedule will be increased, meaning the December payment, paid in January 2014, will go up by 30 cents to $5.80. Further details on Fencepost
– Our estimated EBIT for the current financial year ending 31 July 2014 is $500-$600M.
The impact of global demand volatility

Strong pricing for powders is being driven by increasing levels of demand from China and emerging economies in Asia and North Africa.
This season, we have devoted the greatest possible volume of milk to manufacturing milk powders, to maximise payments to our farmers.
However, we have not been able to lift powder production above the current 70 per cent level as we are limited by the nature of Fonterra’s existing production facilities in New Zealand.
That is why the remaining 30 per cent of milk is being converted to non Milk Price products, predominantly cheese and casein, which are currently generating significantly lower returns.
Domestic factors in key markets such as Europe, the US and Japan mean cheese and casein prices are pricing at a significantly lower level than milk powders.
Forecasting a Milk Price that is higher than we can afford to pay at this stage in the season, is not an option. We will not borrow to support the Milk Price.
The Board has the discretion to pay a lower Farmgate Milk Price than that specified under the Manual, if it is in the best interests of our Co-operative. This is a decision to ensure we protect and strengthen our Co-operative in the longer term.
Staying on strategy

Fonterra has been building additional powder production facilities – and we will continue to invest in flexible manufacturing assets so we can meet changes in global demand and commodity cycles.
The Board has approved $235 million for the development of a third powder drier at Pahiatua.
Work is well underway on our new UHT plant at Waitoa and the new Darfield Drier 2 has produced more than 50,000 metric tonnes of whole milk powder since it was commissioned at the beginning of the season.
We are also expanding our global foodservice capabilities by doubling the capacity of our Clandeboye plant to produce individual quick frozen (IQF) grated mozzarella, and developing our cream cheese plant at Te Rapa.
Over the next few months we will look at additional measures that will further strengthen our ability to meet the opportunities that this volatility in returns is providing our Co-operative.


11.12.13

December 11, 2013

It’s 11.12.13 today.

Am I right in thinking that a run of consecutive numbers for the day, month and year like this won’t happen again until February 1st 2003, if you count 1.2.03; or December 11th 2113 (11.12.13 again) if you don’t?

Andrei points out I got this very wrong, of course it won’t happen again until next century.


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