Word of the day

August 13, 2019

Nizzer  – to contract; become withered or stunted in growth; a blizzard.


Sowell says

August 13, 2019


Rural round-up

August 13, 2019

Ground-breaking milestone for Waimea Community Dam project – Tim O’Connell:

There was excitement in spades for backers of the Waimea Community Dam with Friday’s ground-breaking ceremony signalling the start of excavation on the controversial $104.4 million project.

It will take twice as long as initially expected and cost four times as much to construct, but for those who travelled to the Lee Valley site, about 36 kilometres south-east of Nelson, there was a sense of relief and determination to see a successful outcome for the future of Tasman. 

The $104 million Waimea Dam project was rubber-stamped in November after a lively six-hour meeting where Tasman district councillors voted 9-5 to proceed. . .

Gums swallow up prime land – Terry Brosnahan:

Forestry has ripped the heart out of a small Southland community.

In the mid-1990s Waimahaka near Wyndham was one of a number of areas where farms were sold and planted out in eucalypt trees.

It was good money for those selling but the three-teacher school was the heart of a thriving community both of which were devastated.

Waimahaka school had a roll of 70 and three teachers before the trees came. When the farms sold the families left the district. It had only four pupils by the time it closed in 2013. . .

Community or carbon? – Rebecca Harper:

Like many small rural communities in New Zealand, Tiraumea has been declining for years. De-population has been exacerbated by farm amalgamations and technology, and concerned locals fear the recent flurry of farm sales to
forestry may prove the final nail in the coffin. Rebecca Harper reports.

Blink and you might miss it. There’s not much left in Tiraumea, located on Highway 52 between Alfredton and Pongaroa, in the Tararua District. Once a thriving rural community, mostly sheep and beef farmers and their families, numbers are dwindling.

The school closed in 2012, though the lone 100-year oak stands proudly in what used to be the school grounds. The hall is still there, along with the rural fire service shed and domain, but that’s about it.

In the last year a number of farms have been sold, either to forestry or manuka, with no new families moving in to replace those lost, and those left are concerned about the impact of mass pine tree plantings. . . 

Deer role challenging and rewarding – Sally Rae:

Challenging and rewarding – “probably in that order” – is how Dan Coup describes his tenure at Deer Industry New Zealand.

Mr Coup is leaving DINZ in October, after just over six years in the role, to become chief executive of the QEII National Trust.

When he joined the organisation, confidence among producers was generally low and farmers were leaving the industry, frustrated at the state of profitability.

Looking at the state of the industry now, it was “definitely better” and that was due to several factors. . .

Hawke’s Bay apple industry invests in accommodation for seasonal workers

The Hawke’s Bay apple industry says investing tens of millions of dollars in housing for staff will also help the hundreds of people in the region needing emergency accommodation.

It’s aiming to have 1592 new beds ready for next year by extensively renovating existing dwellings and building new accommodation.

The region needs enough places to house the 5400 seasonal workers it needs from the Pacific to work in next year’s harvest.

Gary Jones from the Hawke’s Bay Seasonal Labour Group said the industry was spending nearly $40 million at $25,000 a bed to house all its workers. . . 

Are cattle in the US causing a rise in global warming? – Alan Rotz & Alex Hristov:

Over the past decade, we have seen the media place blame for our changing climate on cattle. Scientific evidence does not support this claim though for cattle in the United States.  

Cattle produce a lot of methane gas, primarily through enteric fermentation and fermentation of their manure. Methane is a powerful greenhouse gas that, along with nitrous oxide, carbon dioxide and some other compounds in the atmosphere, create a blanket around our planet. This is good; without this atmospheric blanket, the earth would be too cold for us to survive. The current problem is that concentrations of these gases in the atmosphere are increasing, which is thickening our blanket. . . 

 


Farmers gloomier with good reason

August 13, 2019

Federated Farmers’ latest Farm Confidence Survey shows why farmers are gloomier:

Climate change policy and the ETS has topped the list of farmers’ biggest concerns for the first time since 2010, according to Federated Farmers’ latest Farm Confidence Survey.

Nearly a quarter of the 1,432 farmers who responded to the July survey said it was their No 1 worry. The second greatest concern was regulation and compliance costs (19%), followed by debt, interest and banks (10%).

“That result is hardly surprising, given analysis coming through that significant numbers of dairy and sheep and beef farms will be uneconomic if the government continues to pursue methane reduction targets that are far more stringent than are necessary to ensure there is no additional global warming,” Federated Farmers economics spokesperson Andrew Hoggard says.

“That’s coupled with concern that the targets, and government incentives for forestry, is driving blanket planting of pines on productive farmland, with huge long-term detriment to rural communities.”

Pertinent to the concerns about production losses to meet climate change targets, and costs if agriculture is put in the ETS, is that only 55% of farmers said their businesses were currently making a profit (similar to the January survey, 56%). The proportion of farms making a loss increased slightly by 2 points to 11.3%. And looking ahead, slightly more farmers expect their profitability to worsen than improve.

The July survey, conducted by Research First, found that the proportion of farmers who consider current general economic conditions to be good (24.9%) has decreased slightly over the last six months. The proportion who consider conditions to be bad remains lower, but not by much (21.3%).

Looking forward, the survey found the lowest level of confidence in the economy since July 2009, in the wake of the Global Financial Crisis.

“On that front, we’re no different to the gloom being expressed by the wider business community,” Hoggard says. “For us there is particular concern about the global uncertainty and instability arising from fallout from Brexit and US-China tensions and how that will impact on our key markets and export returns.”

All regions expect farm production to increase over the coming 12 months but they are mostly less optimistic than six months ago, with large falls in expectations for Auckland-Northland and Taranaki-Manawatu. Slightly more farmers expect to increase their spending rather than reduce it over the coming 12 months but this is also down on January’s survey.

And farmers continue to find it hard, if not harder than ever, to find skilled and motivated staff.

Climate change policy in the Zero Carbon Bill is based on emotion and politics rather than science; ignores the Paris Accord’s stipulation that mitigation shouldn’t come at the expense of food production; and will come at a high economic, social and environmental cost.

Regulation and compliance costs are rising.

Interest rates are low but banks are putting a lot of pressure on farmers to reduce debt.

Dairy and arable farms, orchards and market gardens have been struggling for good staff for years, sheep and beef farms are also having problems now.

Add to that the concerns shared by the wider business community and farmers have good reason to be gloomier.

The full survey report is here.


Fonterra getting worse to get better?

August 13, 2019

Just a few days ago Andrea Fox asked: Fonterra what is going on?

Yesterday we found out. Fonterra’s email to shareholders and media release made grim reading:

Chief Executive Officer Miles Hurrell said that as a result of the full review of the business which has taken place across the year, as well as the work done so far to prepare its financial statements for FY19, it has become clear that Fonterra needs to reduce the carrying value of several of its assets and take account of other one-off accounting adjustments, which total approximately $820-860 million.

“Since September 2018 we’ve been re-evaluating all investments, major assets and partnerships to ensure they still meet the Co-operative’s needs. We are leaving no stone unturned in the work to turn our performance around. We have taken a hard look at our end-to-end business, including selling and reviewing the future of a number of assets that are no longer core to our strategy. The review process has also identified a small number of assets that we believe are overvalued, based on the outlook for their expected future returns.

“While the Co-op’s FY19 underlying earnings range is within the current guidance of 10-15 cents per share, when you take into consideration these likely write-downs, we expect to make a reported loss of $590-675 million this year, which is a 37 to 42 cent loss per share. . . 

The company is making several one-off financial adjustments:

  • Our accounting valuation for DPA Brazil will be impaired by approximately $200 million. This change is mainly due to the economic conditions in Brazil. While they are improving, consumer confidence and employment rates are not at the level required to support the sales volumes and price points our forecast cashflows were based on. 
  • “As a result of the previously announced sale of our Venezuelan consumer business, and the closing of our small Venezuelan Ingredients business, due to the country’s economic and political instability, we have made an accounting adjustment of approximately $135 million relating primarily to the release of the adverse accumulated foreign currency translation reserve.  
  • “Our carrying value for China Farms will be impaired by approximately $200 million due to the slower than expected operating performance. While the extent in which we participate is under strategic review, the fresh milk category in China continues to look promising and is growing. 
  • “In our New Zealand consumer business, the compounding effect of operational challenges, along with a slower than planned recovery in our market share has resulted in us reassessing its future earnings. We are now rebuilding this business and, as part of this, have sold Tip Top which allows the team to focus on its core business. The combined impact is a write-down of approximately $200 million. 
  • “Our Australian Ingredients business is adapting to the new norm of continued drought, reduced domestic milk supply and aggressive competition in the Australian dairy industry. This includes closing our Dennington factory, which combined with writing off the goodwill in Australia Ingredients, results in a one-off impact of approximately $70 million (this includes the $50 million previously announced as part of the Dennington announcement).

“These are tough but necessary decisions we need to make to reflect today’s realities. . . 

Chairman John Monaghan said that in-light of the significant write-downs that reflect important accounting adjustments Fonterra needed to make, the Board had brought forward its decision on the full year dividend for FY19.

“We have made the call not to pay a dividend for FY19. Our owners’ livelihoods were front of mind when making this decision and we are well aware of the challenging environment farmers are operating in at the moment.

“Ultimately, we are charged with acting in the best long-term interests of the Co-op. The underlying performance of the business is in-line with the latest earnings guidance, but we cannot ignore the reported loss of $590 – $675 million once you look at the overall picture.

Board’s must act in the best interests of the company which is not always in the best short-term interest of shareholders.

“Not paying a dividend for the FY19 financial year is part of our stated intention to reduce the Co-op’s debt, which is in everybody’s long-term interests. . . 

The action that is being taken is a result of bad investments in the past.

Quitting them is both necessary and sensible, but where to from here, what have the board and management learned and what changes must still be made?

Sometimes when a company is in a mess it has to get worse before it gets better.

Suppliers and shareholders will accept the getting worse for a short time  but will run out of patience if the company can’t show it is on the way to getting better soon.


Quote of the day

August 13, 2019

Luck is everything… My good luck in life was to be a really frightened person. I’m fortunate to be a coward, to have a low threshold of fear, because a hero couldn’t make a good suspense film. Alfred Hitchcock who was born on this day in 1899.


August 13 in history

August 13, 2019

29 BC – Octavian held the first of three consecutive triumphs in Rome to celebrate the victory over the Dalmatian tribes.

523 – John I became the new Pope after the death of Pope Hormisdas.

554 – Emperor Justinian I rewarded Liberius for his long and distinguished service in the Pragmatic Sanction, granting him extensive estates in Italy.

582 – Maurice became Emperor of the Eastern Roman Empire.

900 – Count Reginar I of Hainault rose against Zwentibold of Lotharingia and slayed him near present-day Susteren.

1516  The Treaty of Noyon between France and Spain was signed. Francis recognised Charles’s claim to Naples, and Charles recognises Francis’s claim to Milan.

1521 Tenochtitlán (present day Mexico City) fell to conquistador Hernán Cortés.

1536  Buddhist monks from Kyōto’s Enryaku Temple set fire to 21 Nichiren temples throughout Kyoto in the Tenbun Hokke Disturbance.

1553  Michael Servetus was arrested by John Calvin in Geneva as a heretic.

1704  War of the Spanish Succession: Battle of Blenheim – English and Austrians won against French and Bavarians.

1790 William Wentworth, Australian explorer and politician, was born (d. 1872).

1792   Louis XVI of France was formally arrested by the National Tribunal, and declared an enemy of the people.

1814  The Convention of London, a treaty between the United Kingdom and the United Provinces, was signed in London.

1818 Lucy Stone, American suffragette, was born  (d. 1893).

1831 Nat Turner saw a solar eclipse, which he believed was a sign from God.

1852 (1855 or 1856 – exact date unknown) – Caroline Freeman, teacher, school principal and owner,  and first female to graduate from the University of Otago, was born (d. 1914).

1860 Annie Oakley, American sharpshooter, was born. (d. 1926)

1888 John Logie Baird, Scottish television pioneer, was born (d. 1946).

1889  German Ferdinand von Zeppelin patented his “Navigable Balloon“.

1899 Alfred Hitchcock, English film director, was born (d. 1980).

1907 Sir Basil Spence, Scottish architect, was born (d. 1976).

1913  Otto Witte, an acrobat, was purportedly crowned King of Albania.

1913  First production in the UK of stainless steel by Harry Brearley.

1914 – Sapper Robert Arthur Hislop was guarding Parnell railway bridge in Auckland when he accidentally fell, dying from his injuries six days later, becoming the first New Zealand casualty of World War I.

First fatal NZ casualty of the Great War

1918  Opha Mae Johnson became the first woman to enlist in the United States Marine Corps.

1918 Bayerische Motoren Werke AG (BMW) established as a public company.

1920 Polish-Soviet War: Battle of Warsaw began.

1926 Fidel Castro, Cuban revolutionary and politician, was born.

1937 Battle of Shanghai began.

1940  Battle of Britain began.

1951 Dan Fogelberg, American singer/songwriter, was born (d. 2007).

1960 The Central African Republic declared independence from France.

1961 The German Democratic Republic closed the border between the eastern and western sectors of Berlin, to thwart its inhabitants’ attempts to escape to the West.

1968 Alexandros Panagoulis attempted to assassinate the Greek dictatorColonel G. Papadopoulos.

1969 The Apollo 11 astronauts were released from a three-week quarantine to enjoy a ticker-tape parade in New York. That evening, at a state dinner in Los Angeles, they were awarded the Presidential Medal of Freedom by Richard Nixon.

1978  150 Palestinians in Beirut were killed in a terrorist attack.

1979  The roof of the uncompleted Rosemont Horizon near Chicago, Illinois collapsed, killing 5 workers and injuring 16.

2004   Hurricane Charley, a Category 4 storm, struck Punta Gorda, Florida.

2004  156 Congolese Tutsi refugees massacred at the Gatumba refugee camp in Burundi.

2005 Former NZ Prime Minister David Lange died.

Death of David Lange

2008 Michael Phelps set the Olympic record for most the gold medals won by an individual in Olympic history with his win in the men’s 200m butterfly.

2010  – The MV Sun Sea docked in CFB Esquimalt, British Columbia, Canada, carrying 492 Sri Lankan Tamils.

2011 – The main stage collapsed at the Indiana State Fair during a hurricane-force wind gust ahead of an approaching severe thunderstorm, killing 7 and injuring 45.

2015 – At least 76 people were killed and 212 others wounded in a truck bombing in Baghdad, Iraq.

Sourced from NZ History Online & Wikipedia


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