365 days of gratitude

August 10, 2018

Utopia has a video on sleep: why we need it and what happens without it.

I was particularly interested in it because we got home from three weeks in Spain last Saturday and I’ve had a lot of trouble getting my body and brain back in sync with the clock.

During the day I was in a sleep-deprived fog but at night I was wide awake.

But last night, I got seven hours sleep and when I woke up this morning the fog had lifted for which I’m very grateful.


Word of the day

August 10, 2018

Groak – to silently watch someone while they are eating, hoping to be invited to join them.


Rural round-up

August 10, 2018

Who cares about farmers? NZ needs them around – Anna Campbell:

Buzzwords and trendy phrases have a wave-like cycle.

When you first hear a phrase, your ears prick up, but you don’t necessarily take it in. When you next hear the phrase, you start to register its meaning and context. A few more hearings and the phrase becomes embedded – perhaps you use it yourself. The end of the phrase-cycle starts when the buzzword or phrase is used so often, it loses meaning and starts to irritate.

There are some tired words and phrases that have started to irritate me recently, so I hope this means they are ending their wave, or at least I stop using them – ”ripe for disruption” and ”social licence to farm” are two such examples. In their defence, such phrases come about because they are pithy, topical and represent something worth exploration.

Talking about buzzwords is really my way of introducing my growing irritation at the concept of farmers requiring a ”social licence to farm”. The phrase has come about because there is a realisation in the agri-community we need to improve some of our practices and provide evidence of such changes on the back of a growing rural-urban divide (another term starting to irritate me), food scares and a requirement for transparency around food production. . . 

Canines have nose for the job – Yvonne O’Hara:

A request from beekeepers in Canterbury led a Dunedin dog trainer to become a key element in the fight against the devastating bee disease American foulbrood.

Rene Gloor, of Rene Gloor Canine Ltd, is originally from Switzerland and has spent the past 30 years training dogs to detect many odours.

His dogs were used to detect biosecurity risks, including fruit, plants, meat, seeds, eggs and reptiles, for the Ministry of Primary Industries.

Since leaving MPI, he has set up his own business and worked in Taiwan, Korea and other Asian countries for the past eight years. . . 

Mycoplasma bovis compensation is a mixed bag with big delays and lots of angst – Keith Woodford:

The complexities of Mycoplasma bovis compensation are causing much angst both for MPI and farmers. Simple claims are being dealt with in a matter of weeks. More complex cases get stuck.  Unfortunately, most cases are complex.

The easiest cases for MPI should be where farmers have dairy beef.  Once the farms are ‘depopulated’, to use the official term, it is a painstaking but straight forward process of disinfection and then clearance some 60 days later.  Replacement dairy beef animals should be easy to find, although of course there is a risk of reinfection if bad choices are made. . . 

Collaboration tackling bee disease – Yvonne O’Hara:

Beekeepers and dogs are joining forces to combat the devastating American foulbrood (AFB), the beekeeping industry’s equivalent of foot-and-mouth disease.

If a new research project is successful, tools and tests may be developed that might eliminate the disease, commercial apiarist Peter Ward says.

The Southern Beekeepers Discussion Group has been given $143,000 from the Sustainable Farming Fund to develop and trial new tools to detect AFB. . . .

Why it’s okay to stick with meat and dairy – Lyn Webster:

I was cutting up a dead cow for the dogs and as my knife slid through the rich red meat which will provide days and days of dense nutrition, my thoughts turned to the prophesied meat- and dairy-free future we all face.

We are being led to believe that our future food lies not in the farmed animals which have provided us with life for generations but in engineered plant-based food and laboratory food grown from stem cells.

The fallout from this in New Zealand appears to be a mass exodus of support for the farmers who provide the food and a lean towards veganism and an attitude amongst some young people (the millennials, who apparently drive the buying decisions) that somehow vilifying (dirty) farmers and investing in these supposedly “clean” foods will somehow be the saving of the planet. . . 

Living Water: new approach delivering results:

The innovative mindset of the Living Water programme is delivering new approaches and tangible results for freshwater, biodiversity, farmers and communities.

Living Water is a 10-year partnership between Fonterra and the Department of Conservation that brings farmers, scientists, councils, communities and Mana Whenua together to identify and implement solutions that will enable farming, fresh water and healthy eco-systems to thrive side by side.

Dairy farming is central to New Zealand’s economy, but how we are farming is having an impact on our lowland freshwater ecosystems. Our streams, lakes, rivers, lagoons and coastal estuaries are being impacted by high levels of nutrients, sediment, effluent and other pollutants. This has resulted in freshwater ecosystems being reduced and degraded and that is where Living Water comes in. . . 

NFU warns net zero emissions goal could make UK farmers ‘uncompetitive‘ – Abi Kay:

The NFU has warned a net zero emissions goal being pursued by the Government could make UK farmers ‘uncompetitive’.

The union’s deputy president, Guy Smith, made the remarks after a cross-party group of more than 100 MPs wrote to the Prime Minister to urge her to back the target.

In the letter, the MPs said the UK should become one of the first countries to set the goal in law, citing a recent poll by Opinium which showed 64 per cent of adults agreed emissions should be cut to zero over the next few decades. . .

 


Fonterra drops milk price

August 10, 2018

Fonterra has announced a 5 cent drop in the forecast farmgate milk price for the 2017/18 season:

The Co-operative is reducing last season’s 2017/18 forecast Farmgate Milk Price to $6.70 per kgMS from $6.75 per kgMS. The previously announced 25-30 cents guidance range has been held but the Co-operative is indicating that it will be at or slightly below this range and it is likely that the full year dividend will be just the 10 cents already paid in April.

Chairman John Monaghan said the Board has made these decisions in the best long-term interests of its farmer shareholders and unitholders.

“It is important for our Co-operative to have a strong balance sheet and, as we indicated in May, the higher milk price, which is good for our farmers, has put pressure on Fonterra’s earnings, and therefore our balance sheet in a year which was already challenging due to the payment to Danone and the impairment of the Co-operative’s Beingmate investment.

“You never want to have to reduce the Milk Price at the season’s end, but it is the right thing to do and $6.70 remains a strong milk price.

“Maintaining a strong balance sheet has helped us to support farmers during tough seasons through our Co-operative Support Loan and being able to bring forward the Advance Rate Schedule and get money to farmers earlier in the season.

“We need to do everything within our control to keep these options on the table for when farmers need them. This means keeping our balance sheet strong.

Mr Monaghan said he wanted to be upfront with farmers and unitholders that to achieve this the Board has taken the step to depart from the amount calculated under the Farmgate Milk Price Manual. This is permitted within Fonterra’s Constitution.

“During the process of closing our books for the financial year end, the need for these actions has become clear. Our forecast performance is not where we expected it would be. While the numbers are not finalised, our margins were less than we forecasted right across our global Ingredients and Consumer and Foodservice businesses.”

The Co-operative’s full year results will be announced on 13 September 2018.

This is disappointing but not unexpected.

It’s also a reminder that the forecast milk price can change and that budgets should be conservative until its confirmed.


In fiscal hole and still digging

August 10, 2018

Economist Cameron Bagrie has found a hole in the fiscal bucket:

Steven Joyce is going to be proved right. There is a fiscal hole and a softening economy is making it wider.

I don’t like the term fiscal hole. Good policy should dominate over strict debt targets and economic cycles come and go which are often beyond government control.

But the Labour-led Government’s fiscal hole is looking deeper by the day – and bigger than the $11.7 billion of additional borrowing that Joyce identified. . .

Growth is weaker, the Government is already borrowing creatively to the tune of $6.4 billion via Crown entities (keeping it out of core government net debt metrics) and spending demands are headed one way.

That combination will pressure its fiscal position.  . .

The lack of money left in the kitty post the 2018-Budget raised issues of credibility, but the fiscal parameters were technically achievable.

It wasn’t going to be easy, but it was possible, so the Government was given the benefit of the doubt.

Giving them the benefit of the doubt was a mistake given their record, policies and the knowledge that coalition partners would add to costs.

But the picture is changing and the Government’s ambitions are looking more and more like pipe dreams.

So, what has changed?

Budget spending and investment demands needed funding, whilst at the same time sticking to the narrative of hitting debt objectives and being fiscally responsible.

The result was crown entities borrowing an additional $6.4 billion between 2017 and 2022.

That is an accounting fudge to get it out of the core Government debt figures.

Just because we can’t see it doesn’t mean it’s not there.

Public sector pay and spending demands are only heading one way.

Few bemoan the need to pay teachers and nurses more but that money needs to come from somewhere.

The realities of a coalition Government meant more needed to be spent. Spending allocations in the 2019 and subsequent Budgets were increased by $525 million to $2.4b per year.

That looked fine against a backdrop of solid projections for growth. But it was a risky strategy with the economy late cycle as opposed to early cycle.

The government can’t be held responsible for external problems but they can be blamed for not taking a more prudent approach given clouds gathering on the economic horizon.

They can also be blamed for wasting money on fripperies like fee-free tertiary education and good looking horses without leaving enough for necessities like improved pay and conditions for nurses and teachers.

They’ve dug the hole and there is nothing in their performance that could give any confidence in their ability to get out of it especially as they are still digging.


Trading halt unlikely to be for +ve reasons

August 10, 2018

Fonterra placed a trading halt on its units yesterday.

Fonterra placed a trading halt on its units on the NZX yesterday as it works through reviewing its earnings guidance.

It expects to update the market by the end of trading today.

Fonterra Shareholder Fund units last traded at $5.11, down more than 18% from a year ago, having started the year at $6.66 in January.

In a brief notice to the NZX yesterday, Fonterra said it was preparing its annual financial statements for the financial year ended July.

”As a result of the work being undertaken there may be a variation from the earnings guidance previously given to the market,” the company said.

The fund’s units are open to the public and also farmer suppliers. . .

This is very unlikely to be for positive reasons.

The grapevine thinks this might result in a cut to the forecast dividend rather than the farmgate milk price, but that might be wishful thinking.

 


Quote of the day

August 10, 2018

We are living in a time of trouble and bewilderment, in a time when none of us can foresee or foretell the future. But surely it is in times like these, when so much that we cherish is threatened or in jeopardy, that we are impelled all the more to strengthen our inner resources, to turn to the things that have no news value because they will be the same to-morrow that they were to-day and yesterday — the things that last, the things that the wisest, the most farseeing of our race and kind have been inspired to utter in forms that can inspire ourselves in turn. –  Laurence Binyon who was born on this day in 1869.


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