Word of the day

May 28, 2014

Obeisance – deferential respect; deference or homage; a gesture expressing deferential respect, such as a bow or curtsy.

Rural round-up

May 28, 2014

Farmers prepare for payout cut – Sally Rae:

Five Forks dairy farmer Lyndon Strang isn’t expecting any surprises today when the dairy co-operative updates its forecast 2013-14 season payout.

A cut of between about 25c and 30c from the present $8.65kg ms farmgate milk price has been predicted by economists, while a conservative opening forecast for the 2014-15 season, around the $7kg ms mark, has also been suggested.

Mr Strang, who is also dairy chairman of North Otago Federated Farmers, said the 2013-14 payout was still going to be a record, and even a $7 forecast for next season was ”potentially still another good payout”. . .

Stream through dairy farm rich in fish – Tim Cronshaw:

Dairy farmers are getting praise from unlikely quarters after the most salmon in 40 years have been seen spawning in a small stream in the middle of dairying country.

After identifying good salmon catches in the area during the angling season and higher spawning rates in lowland streams than normal, fishery officers did a spot check at the spring-fed Waikuku Stream, expecting to see little salmon activity.

In a small stretch of the stream which feeds into the Ashley River they found about 35 salmon and as many nests – redds – containing thousands of eggs.

Among other theories for the high salmon count, Fish & Game New Zealand think the main reason is the work of dairy farmers to fence, plant and protect the stream. . .

A lamb chop fresh from the lab – Jill Galloway:

A retired Massey University horticulture senior lecturer says meat will come from the laboratory in future, putting New Zealand’s grazing systems at risk.

Dr Mike Nichols went to a conference in Abu Dhabi in the United Arab Emirates, and said it was disconcerting to learn it was possible to “grow” a perfectly acceptable hamburger patty in the laboratory from plant-derived raw materials.

He said fillet steak and lamb chops of acceptable taste, flavour and texture were not far away. . .

Farmers prepare to pay for $90m irrigation scheme – Tony Benny:

Farmers supplied by the Rangitata South irrigation scheme intend to buy the scheme from the developer, says scheme chairman Ian Morten.

The scheme, which is expected to be in full operation next irrigation season, draws water from the Rangitata River in South Canterbury to fill seven huge storage ponds with a total capacity of 16.5 million cubic metres, three of which are now full or part full. Work completing the other four will resume after winter.

While initial investigation for a scheme on the south side of the Rangitata was started by a farmer group, it wasn’t until earthmoving company owner Gary Rooney joined them that the scheme took off. . . .

Making straight line into the top results:

Otago and Southland competitors did well in the New Zealand Ploughing Association’s (NZPA) national championships recently.

Hosted by the Marlborough Ploughing Association, more than 30 people took part in the national finals at Spring Creek, near Blenheim, from May 10 to 11.

The competitors were all winners from various qualifying events held throughout New Zealand in the past 12 months.

Mark Dillon, of Riversdale, was third in the Case IH silver plough section, and also won the W.G. Miller Trophy for the highest placed competitor aged under 35. . . .

A focus on changing fortunes: Minister to attend Open Day:

An Open Day is being held on Friday 30 May in Kaikohe to celebrate the ongoing collaboration between Lincoln University and Northland College. At the centre of this collaboration lies the recently signed Five Year Strategic Plan, designed to formalise the strategy for optimising the farming and educational opportunities from the neighbouring Northland College Farm.

In attendance will be staff and students, as well as key representatives from business and government; including the Minister for Tertiary Education, Skills and Employment, the Honourable Steven Joyce, who will be speaking at the event. . .


Right or left?

May 28, 2014

Are you right or left brained?

I was 50/50.

But scientists don’t give any credence to the right brain/left brain theory.

Fonterra forecast $7

May 28, 2014

Fonterra’s forecast payout for this season has dropped and the forecast for 2014/15 is back to $7.

Fonterra Co-operative Group Limited today announced an opening forecast Farmgate Milk Price of $7.00 per kgMS for the 2014/15 season – matching the opening forecast provided 12 months ago at the start of the 2013/14 season.

The forecast Cash Payout – which comprises the Forecast Farmgate Milk Price and dividend for the 2014/15 season – will be announced in July when Fonterra’s budget is completed and approved.

The Co-operative is forecasting milk supply for the new season of 1,616 million kgMS – up 2 per cent on the current season forecast of 1,584 million kgMS.

Chairman John Wilson said the new season Farmgate Milk Price forecast remained historically high, matching the Co-operative’s opening price of the previous season, but also reflecting current market conditions.

“Our farmers understand the realities of dairy commodity price cycles, and will exercise caution at this early stage in the season,” he said.

Chief Executive Theo Spierings said the shift in supply and demand over the past few months showed that volatility continued to exert a strong influence over the global outlook for dairy.

“Dairy commodity prices have come off the peak reached in early February this year, as global supply and demand have rebalanced.

“There is currently more milk available for the international market to absorb. We expect demand from China to remain strong. In Russia, there will be pressure on the balance between imports and local production. These factors are expected to continue influencing the supply-demand balance,” said Mr Spierings.

Revised 2013/14 Forecast

The Co-operative also confirmed today that it is reducing its current forecast Farmgate Milk Price for the 2013/14 season to $8.40 per kgMS. Along with a reconfirmed forecast dividend of 10 cents per share, the change amounts to a forecast Cash Payout of $8.50 for a fully shared-up farmer.

Chairman John Wilson said that when the last forecast was made in late February, the forecast Farmgate Milk Price derived under the Milk Price Manual was $9.35. The Milk Price Manual calculation is now 40 cents lower at $8.95.

“When we announced the last forecast Farmgate Milk Price, it was 70 cents per kgMS below the then Milk Price Manual calculation. We made that decision to protect the Co-operative.

“After seeing recent improved stream returns on powders and other products, and considering the level of risk likely in the remaining three months of the financial year, the Board has decided to reduce that 70 cent gap by 15 cents, to 55 cents.

“That is why today’s forecast Farmgate Milk Price amounts to a 25 cent net reduction from $8.65 to $8.40,” he said.

Chief Executive Theo Spierings said volatility remained an issue. The revised forecast reflects the recent fall in global dairy commodity prices, as well as the impact of currency movements.

“Our previous guidance on the earnings range remains unchanged.

“GlobalDairyTrade (GDT) prices have tracked down in recent events, with the GDT price index down more than 22 per cent since a peak on February 4, 2014. Since that date, prices for whole milk powder on GDT have decreased by 22 per cent, while skim milk powder prices are down 23 per cent.

“Despite the weaker auction results, the New Zealand dollar has remained firm. The exchange rate has moved from NZD/USD 0.835 to sit above NZD/USD 0.855 for the majority of the last two months,” said Mr Spierings.

The forecast Farmgate Milk Price change for the current season will not mean any revision to the June payment of the Advance Rate Schedule. The 25 cent net reduction will be spread over the July to October payments.

No-one who has been following the signals will be surprised by this.

The international supply of milk has been increasing and the price has eased because of that.

Recycling religion

May 28, 2014

Recycling does have benefits but they don’t always exceed the costs:

We can and should divide recycling into three different and distinct tyeps. There’s the recycling that makes a profit at standard market prices. We’ve been reycling gold on these grounds for many millennia now, old cars are melted down to make new ones and so on. That there’s a profit to made in doing this shows that value is added by doing it: the addition of more value meaning that we’re all getting richer. This is fine, in fact it’s just great.

Then there’s recycling that costs vastly more than is gained from having done it. You can recycle just about anything if you expend enough energy on it but no one would advise trying to turn used concrete back into Portland cement. Better by far to bake some more cement and put the rubble into the hole we’ve just dug.

There’s also the class of things where the pure market numbers don’t provide a profit but we’d like to recycle for other reasons. When there’s an externality perhaps. Cleaning up a radioative waste site might not be profitable for the metals extracted from it but it could still be something we want to do anyway.

The danger is that we get confused about those possible other reasons. And then end up deciding that we should pursue that second, highly detrimental, type of recycling. And that’s where the “recycle everything” movement is today. It’s become an almost religious observation, one that’s continent wide, that recycling stuff is a good thing to do in and of itself. But there’s no actual reason to do this. There’s no shortage of holes in the ground to put landfill into, only a shortage of licenced holes. There’s no general shortage of resources for us to make new stuff from. But we are told that we must recycle ever more material, well, just because we must recycle ever more material.

We should take a step back from this sort of emotional observance and recycle only that which makes a profit. But trying to be rational about even secular religions never does get us very far, does it?

Recycling is always portrayed as being better for the environment.

But that isn’t necessarily so.

The environmental impact of energy used in and pollution caused by recycling can be greater than dumping.

If it doesn’t stack up environmentally it probably costs more in financial terms too.

The adherents of the environmental religion preach recycling.

Reducing and reusing will almost always be better options and in many cases rubbishing could be too.


What about the workers?

May 28, 2014

The xenophobia being demonstrated by NZ First and Labour in their anti-immigration campaign ignores the fact that we need the skills many bring.


Hon MICHAEL WOODHOUSE (Minister of Immigration): Talofa lava, Mr Speaker. The Government is ensuring that our demand-driven policies deliver the right skills in the right places, when they are needed, as well as meeting family and humanitarian obligations. I note that this has resulted in a reduction in the number of immigrants gaining residence from more than 51,000, when David Cunliffe was immigration Minister, to less than 39,000 last year. I would also be interested in whether that member believes, as is implied in the question, that the inflow should be reduced further, and whether that reduction should come from engineers, medical specialists, IT experts, or the construction workers whom we need to assist with the Canterbury rebuild, because that is the practical implication of reducing the inflow further. . .

Many of the unskilled people who gain visas are connected to the skilled ones:

Tracey Martin: As the Government claims that New Zealand needs more skilled migrants to sustain economic growth, why were close to 50 percent of the migrants granted residency last year not identified in the skilled worker category?

Hon MICHAEL WOODHOUSE: It is important to understand the context of those figures. The Government has, as there was under the previous Government, a loose target of up to about 150,000 over a 3-year period. I think the last 3 years have seen about 123,000 residence visas granted, so it is below the lower limit of the 3-year target. The balance of those includes the spouses, partners, and children of skilled migrants, the partners of people who are Kiwis coming home, having done overseas visits, and our humanitarian Pacific and Samoan quota obligations. So it is absolutely appropriate that between 50 and 60 percent of those people gaining residence are skilled and the balance are connected.  . . .

Contrary to the opposition rhetoric, immigrants aren’t to blame for the housing shortage – which is largely confined to Auckland and Christchurch anyway.

Tracey Martin: Why is the Government ignoring Treasury’s warnings around the impact on housing of 41,500 extra people entering New Zealand in the 2014 year?

Hon MICHAEL WOODHOUSE: I preface the answer to this question by pointing out that in 1999 to 2001, when there was large negative net migration, house prices still went up materially, particularly in Auckland. The report that the member refers to is a report on the question of the positive impact that immigration has on macroeconomic policy. In respect of housing, it said that there was a tension there, but that the dominant tension is in supply-side inelasticity—a pointyheaded way of saying that we are not building enough houses. We are fixing that by increasing land supply, reducing the consenting barriers, and reducing the cost of materials.

And contrary to the rhetoric, even when it’s difficult to find New Zealanders to fill job vacancies, it’s not easy to employ immigrants:

Tracey Martin: How would the Minister explain to an unemployed worker in Porirua, Ōpōtiki, or South Auckland why his Government is allowing record numbers of migrant workers into New Zealand?

Hon MICHAEL WOODHOUSE: If there is a record, it is the record low in the residence programme, particularly in recent years. As I said in an answer to an earlier question, there are far fewer numbers being given residence than there were under the previous Government, and that is because we have demand-driven policies. Ask any employer in this country about how hard it is to employ a migrant and to ensure that they pass the labour-market test, and I think they would say that there are plenty of opportunities for those New Zealanders to get work. . .

There are opportunities but, in dairying for example, New Zealanders don’t always want to take them up.

Cropping farms and orchards also depend on immigrants.

The hospitality industry in the provinces has problems attracting locals and depend on overseas workers, many of whom are on working-holiday visas and won’t try to become residents.


Internet Mana merger negates need for Maori seats

May 28, 2014

The Maori party says the Internet Mana Party merger threatens Maori seats:

The Maori Party believes the Mana Party has “sold out” and its merger with the Internet Party puts all Maori electorate seats at risk. . .

Maori Party co-leader Te Ururoa Flavell says the merger undermines the need and purpose of the seven Maori seats in Parliament.

“The seats were hard fought for and to allow a Maori candidate to stand to drag in someone else from another party who is not Maori and may not have any dreams and aspirations for Maori people in this land or the people of Te Tai Tokerau who believed in that candidate is seriously wrong,” he says.

“There have been attempts in the past for some parties to suggest the time for Maori seats is over and this doesn’t help in any shape or form.”

MP Pita Sharples also questioned the merger and thinks Mr Harawira’s party has sold out on Maori issues.

“It’s supposed to stand for things Maori and what’s Dotcom bringing to Maori?”

The answer to that question is trouble.

The Mana Party will get money from the deal.

That might help a very few of its members but it won’t help Maori.

I don’t think we need Maori seats and both Flavell  and Sharples are right that this deal could be used to argue that.

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