Word of the day

03/12/2021

Alopecist  – a  person who treats, or claims to cure or prevent, baldness; one who undertakes to cure or prevent baldness.


Sowell says

03/12/2021


Rural round-up

03/12/2021

Fonterra expected to pay highest milk price since it was formed 20 years ago – Tina Morrison:

Economists have been hiking their expectations for Fonterra’s milk payment to farmers for this season, with most now expecting the co-operative to pay the highest level since it was founded 20 years ago.

In late October, Fonterra lifted and narrowed its forecast for the 2021/22 season to between $7.90 and $8.90 per kilogram of milk solids. The midpoint of the range, which farmers are paid off, increased to $8.40 per kgMS, matching the previous record paid in the 2013/14 season.

Since then, tight milk supply and continued demand have underpinned prices on the Global Dairy Trade auction platform, prompting economists to raise their forecasts even higher, with BNZ and Westpac both picking an $8.90/kgMS milk price, ANZ at $8.80/kgMS and ASB at $8.75/kgMS. . . 

Taxpayers funding anti-dairying messages:

“Some days it’s difficult to comprehend what I see in the news,” says National Agriculture spokesperson Barbara Kuriger.

“Unbelievably, and thanks to Louis Houlbrooke of The Taxpayers Union and Scoop Independent News, I learnt on Monday taxpayers have funded the anti-dairy documentary ‘Milked’ to the tune of $48,000 — a ‘finishing grant’ given by the New Zealand Film Commission.

“Houlbrooke said in the story the 40,000 Kiwis employed in the dairy sector wouldn’t be happy to know they’ve funded a film that attacks their livelihoods.

“I can tell you right now, as a farmer and MP for a huge rural electorate, we are not! It is a real slap in the face to a sector which brings in 80% of the country’s export revenue. . .

“More milk from fewer cows’ trend continues in a record year for dairy industry :

Kiwi dairy farmers hit a new high for milk production last season with fewer cows, showing that a focus on breeding higher performing cows is paying off.  

The annual New Zealand Dairy Statistics report, released today by DairyNZ and Livestock Improvement Corporation (LIC), shows that total milk volume, total milksolids and per cow production were the highest on record in the 2020-21 season.

New Zealand has 4.9 million milking cows – down from 4.92 million the previous season, and they produced 1.95 billion kilograms of milksolids.

DairyNZ Chief Executive Dr Tim Mackle says it is great to see a continuation of the “more milk from fewer cows” trend because it shows a continuing focus on milking better cows and farming even more sustainably. . .

Honey production and yields fall while export volumes remain buoyant for the 2021-21 year:

New Zealand’s national honey production in the 2020/2021 season was down 24% on the previous season and the average honey yield per hive fell 18%, according to the 2021 Apiculture Monitoring Report released by the Ministry of Primary Industries this week.

Beekeeping for the season ended June 2021 proved to be more challenging than recent seasons, with the national honey production down 24% on the 2019/2020 year to 20,500 tonnes, while the average honey yield per hive fell 18% to 25kgs.

These findings will not be surprising to beekeepers, says Apiculture NZ CEO Karin Kos. “Last summer presented more challenging weather conditions than the previous season when the harvest was aided by excellent weather across the country. . . 

NZ Truffle Company plans to be biggest exporter in the Southern Hemisphere  :

Matthew and Catherine Dwan’s aim to use a 139 hectare North Canterbury Farm in a more profitable and planet-friendly way, looks set to create the largest exporter of truffles south of the equator.

In fact, when the NZ Truffle Company’s plantation of 37,500 trees reaches full maturity in 2036, production is expected to be the largest yield in the southern hemisphere.

“At capacity, we’ll be producing around 17,250 kg of Black, White and Burgundy truffles,” says Matthew Dwan, who, along with his partner Catherine set up the NZ Truffle Company in 2017.

The crop, worth between $2500 and $3500 per kilogram, will be exported to Europe, the Middle East and Asia, where there’s a huge demand in the luxury food market for the counter seasonal supply of what’s known as “plant-based caviar”. . . 

Bronte Gorringe pursues her agriculture leadership goals

Bronte Gorringe has always aspired to be a leader in the agricultural industry and sponsorship to attend a renowned development program will bring her closer to her goal.

Ms Gorringe is being sponsored by the DemoDAIRY Foundation to attend the Marcus Oldham Rural Leadership Program in May next year.

Participants are encouraged to have industry support via sponsorship and DemoDAIRY Foundation would consider supporting additional applicants.

Ms Gorringe had expected to complete the five-day intensive workshop in 2021, but it was delayed due to COVID. . . 


Fonterra forecast milk price up again

03/12/2021

We’ve just got an early Christmas present:

Fonterra Co-operative Group today lifted its 2021/22 forecast Farmgate Milk Price range, reported a solid start to the 2022 financial year and revised its earnings guidance.

The Co-op has lifted and narrowed the forecast Farmgate Milk Price range to NZD $8.40 – $9.00 per kgMS, up from NZD $7.90 – $8.90 per kgMS. This increases the midpoint of the range, which farmers are paid off, to NZD $8.70 per kgMS.  The higher milk price has seen the Co-op revise its earnings guidance to 25-35 cents per share from 25-40 cents per share.

Fonterra CEO Miles Hurrell says the lift in the 2021/22 forecast Farmgate Milk Price range is good news and is an important boost to New Zealand communities. With a midpoint of $8.70 per kgMS, it would contribute more than $13.2 billion to the New Zealand economy.

“It’s the result of consistent strong demand for dairy at a time of constrained global supply.

“We’ve seen the impact of a number of events play out this first quarter. That includes the high price of feed in the US which has seen milk production growth stall and a lower-than-expected supply picture in Europe.

“Fonterra’s New Zealand milk supply is down around 3% on this time last season. While we expect that milk supply will be less than last season’s 1,539 million kgMS, the improving weather conditions and forecast milk collections for the balance of this season that are generally on par with last season support our current season forecast of 1,525 million kgMS.

A lot of wet and warm weather in North Otago has given good grass growth but it’s quantity rather than quality which has impacted on milk production.

“While we’ve seen demand soften slightly in China, global demand remains strong, and we think that will remain the case for the short to medium term.

“A higher forecast Farmgate Milk Price at this level can put pressure on our margins and therefore our earnings, which is why we’ve reduced the top end of our earnings guidance.”

First quarter business update

Fonterra has delivered a Total Group EBIT of $190 million for the three months ending 31 October 2021. This was achieved at a time when input costs are significantly higher than the same period last year. These have been driven by a 30% increase in Whole Milk Powder prices.

Mr Hurrell says there have been a number of factors at play in the first quarter. “We’re seeing stable sales volumes in our Foodservice channel, but a milk price at these high levels has squeezed margins. Our Chilean business continues to improve but tightening margins and weaker local currency in other markets have impacted our Consumer channel overall.

“In our Ingredients channel, we’re seeing margins in our longer-term pricing contracts return to more normal levels, which has helped push Total Group gross margin up from the last quarter last year.

“We continue to see the benefit of our focus on financial discipline with lower interest expense, and operating expenditure down 2% on the same quarter last year.

“Looking at the whole picture, I’m proud of what we’ve achieved. With EBIT of $190 million and a strong Farmgate Milk Price, we are starting to consistently deliver solid commercial outcomes.”

Outlook

While the impacts of COVID-19 continue to be felt around the world, Mr Hurrell says the Co-op is working hard to deliver for farmer owners, unit holders and customers and supporting employees.

“The resilience of our people and our supply chain means we continue to stay on top of the strong demand for our New Zealand milk.”

“However, it is concerning to hear about new variants, which are potentially more resistant to vaccines. There is also the ongoing question of whether economies can rebound from the pandemic and then sustain their financial health.

“That’s why we have a 60-cent range on our forecast Farmgate Milk Price range.”

Supporting our people

Globally, teams are starting to return to the office following extended COVID-19 lockdowns. Mr Hurrell says it’s been a challenging time for employees.

“In some of our regions, our people have spent more than 18 months working from home. We’ve supported them during this time and continue to support their safe return to the office. I want to acknowledge the extra effort from our employees that is helping us deliver good results for the Co-op.

“Here in New Zealand, we recently completed the rollout of our vaccination programme in partnership with the Ministry of Health, which saw more than 8,000 doses administered.”

Path to 2030

Fonterra set out the next phase of its long-term strategy in September, with three key strategic choices guiding the Co-op – a continued focus on New Zealand milk and to lead in sustainability and dairy innovation and science.

Mr Hurrell says the Co-op is confident in its strategy and 2030 targets and is already showing early signs of progress.

“As we continue to focus on New Zealand milk, work is underway on the divestment of our Chilean business and the ownership review of our Australian business, with the appointment of advisors to assist with both processes. Dependent on the outcome of these processes, we intend to return around $1 billion of capital to our shareholders and unit holders by FY24.

Mr Hurrell says the focus on New Zealand milk is paying off with customers. “We recently launched our Mainland cheese range in Dubai’s largest supermarket chain. The range completely sold out, with customers using social media sites to track down the cheese in-store. Our in-region team is now looking at launching the range into other countries.

“We’re also focused on delivering innovative new solutions for our customers. Our new Ingredients ecommerce platform, myNZMPTM, is being embraced by customers across China, Latin America, South East Asia and the Middle East.”

Mr Hurrell says the Co-op is also using innovative technology to make the most of the natural goodness found in our New Zealand dairy.

“A transformative dairy science collaboration with Vitakey will explore how we can further unlock the benefits of our probiotic strains. Our goal is to design dairy products that incorporate targeted and time-controlled release of specific dairy nutrients in a way that locks in the freshness for longer and allows the nutrients to be more active and beneficial in the body.”

New Zealand is already the most carbon-efficient dairy producing nation on the planet and Mr Hurrell says the Co-op is making strides in its intention to retain a significant advantage by being a leader in sustainability.

“By treating water at our Maungatūroto site using a natural wetland, we can reduce water use on site by up to 25%. On-farm, we’ve just introduced Farm Insights Reports, which give farmers a comprehensive picture of their overall farm from an environmental performance and animal health perspective. This enables them to focus on the improvements which will have the biggest impact.

“We’re also working to find a solution to the challenge of on-farm emissions and one of the exciting projects we’ve been working on is Kowbucha™, a probiotic which could switch off the bugs that create methane in cows. Initial results have been promising, showing a reduction of up to 50% in methane, and we’re now at the stage of trialling it on farm.

“This is just some of the great work underway in the Co-op that will enhance our New Zealand sustainable nutrition story.”

This isn’t just good news for farmers, it’s good news for the economy, especially when tourism, which was one of the country’s biggest foreign exchange earners, has been hit so hard by closed borders.


More vaccinated in hospital but

03/12/2021

 

More people in hospital are vaccinated than unvaccinated, but that tells only part of the story.

The other part is that more people are vaccinated but a bigger proportion of the unvaccinated are hopsitalised (50%) with Covid-19 than vaccinated (10%):


Sneering at success

03/12/2021

Journalism reached another low yesterday with the breathless reporting on National leader Chris Luxon’s property portfolio.

Had he acquired them through crime or by luck, owning seven houses – four of which are his family home, a crib, an apartment in Wellington and his electorate office – it would indeed be a story.

But there is no question about how he was able to buy them.  He got an education then used it, his ability and personality, to succeed in well paid jobs and invested wisely.

Media attention wasn’t just on the number of houses, it then focused on his family home and that he didn’t know its value.

How many people know their houses are worth unless they are planning to sell them?

In spite of at least one journalist trying to blame Luxon for the increased value of his home, it’s government policies and the Reserve Bank which have fueled the steep rise in house prices all over the country.

But why attack someone for their wealth anyway?

Journalists ought to be celebrating success, not sneering at it.

How much better we all would be if more people were successful and if that was shown as something to aspire to, not something to criticise.

If the media had even a passing interest in balance, they might have pointed out that Luxon took a massive pay cut when he entered parliament which shows he’s not in it for the money.

Apropos of which, wouldn’t it be interesting to know how many other MPs took a pay cut and how many got a pay rise?

Don’t hold your breath waiting to find out which other MPs earned more before they got to parliament than they do now and how many earn more in their current job than they did in previous ones.

That wouldn’t suit the media agenda and the modus operandi of journalists about which Karl du Fresne writes:

Trapping politicians, baiting them, trying to catch them out and make them look silly, hypocritical or indecisive … that’s what now passes for political journalism. And of course the journalists always come out on top, because they can set themselves up as judge and jury, are responsible to no one, pay no penalty when they get things wrong  (as they frequently do) and always have the last word.

What’s more, they’re highly selective about whose feet they hold to the fire. Luxon wields no real power at this stage of his political career, yet he’s subjected to far tougher treatment than the sainted prime minister, who clearly enjoys immunity from difficult questions. But most New Zealanders still believe in giving people (even conservative politicians) a fair go, and the media are probably doing far more damage to themselves than to Luxon.

Journalists usually rank at or near the bottom of trusted occupations and the blatantly biased way the media has focused on Luxon’s faith and finances shows why.


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