Positive outlook for meat industry

14/07/2008

ANZCO Foods chairman Graeme Harrison is confident that the meat industry has a positive future.

He said the industry is not broke and farmers should take a “level headed” approach to its future – because it does have a good future. 

ANZCO, a 24-year-old private company, is the fourth biggest player in the New Zealand sheepmeat market and the second biggest in the beef and veal markets.

It has in the last three years invested $125 million in new plants and upgrades and in food manufacturing expansion, says Harrison, a significant individual shareholder.

“We wouldn’t be making these investments if we didn’t think there was a good future for the business.”

By way of example Harrison says ANZCO has only recorded one loss in its 24 year history – in 1998 – “because of an investment outside New Zealand”.

“I’m sick and tired of all the negative publicity about where the meat industry is…. I’ve got confidence so producers should be taking a very level-headed view of this (debate) instead of being carried away with all the negative publicity.”

When prices are low, costs are rising and balance sheets in the red, it is easy to become pessamistic but I agree that the industry has a bright future.

Harrison says this was the message he gave a recent gathering of producers for ANZCO’s CMP business and he wants to repeat it to all meat growers as they debate the future of their industry.

“The problem sector in the meat industry is lamb and it’s in the South Island because of competition for land use (dairying).

” We have an industry with four players, all with about the same financial strength. Forget about sales turnover and market share … what you actually have is declining livestock numbers and supply is the key to this business. Where companies are similarly resourced clearly you are going to have severe competition. The long and the short of it is, some fallout is going to occur. What we have is livestock supply eroding in sheepmeat at a rate we haven’t seen since the mid-1980s. So clearly there is going to be change.”

Harrison says market forces are at work and farmers are responding to them. The biggest market force is the dairy boom.

“It’s the biggest boom in New Zealand agriculture since the early 1950s.(when dairying converted to sheep, particularly in mid-Canterbury and Southland). We’ve got a reverse of that now but on a bigger scale. Good mixed farming areas are going into dairying and the reason is comparative profitability.

“There’s nothing new about this…but extraordinary things happen in those environments. I’ve been trying to make the point that the meat industry is not broke. There’s been far too much talk about this, though it is true that financial rewards have been poor in the last four years.

“Sooner or later when you have poor returns there will be an effort to rationalise.”

If we still had subsidies we’d probably still have 60 million sheep and a mountain of lamb and mutton deteriorating in freezers. Instead we now have fewer than 40 million sheep and farmers are looking at their options and making rational business decisions based on the markets. Some are persuaded by dairy returns to convert their farms to dairying or dairy support. Others who don’t want to do that are looking at the positive impact dairy prices are having on their own land and selling.  Some still belive there is a future in sheep and beef, which of course there is.

Read the rest of this entry »


Alliance minding own business

14/07/2008

Alliance Group CEO Owen Poole  says the company was not looking at merging with Silver Fern Farms because there was no proposal to do so.

He said that it was business as usual for Alliance in spite of speculation that a plan by PGG-Wrightson to invest $220 million in SFF would draw Alliance into merger talks. 

“We are working on our own strategy and we are going to talk to our shareholders about our own plans,” he said in an interview last week. Mr Poole said the PGG-W and SFF merger was the business of those companies.

“As far as Alliance is concerned, they’ve got to deal with their own shareholders.”

He had some reservations about the merger and the loss of farmer control, governance issues from having a corporate investor, the hybrid ownership model and outsourcing stock procurement.

All very valid concerns. 

Alliance experienced the hybrid ownership model when Freesia Meat Holdings was an investor, and Mr Poole said it was difficult reconciling conflicting demands.

“It was a good day for us both when the arrangement ended.”

Mr Poole said procurement was “a central pillar to vertical integration,” which he felt should not be outsourced to a third party.

If PGW is contracted to procure for SFF, what do their stock agents do when other companies offer better prices?

Alliance already operated an integrated model. In 1997, it launched Securing the Future, which introduced a genetics and breeding scheme to farmers to show the type of animals wanted by the market, based on consumer research.

It has also addressed capacity issues and recently introduced Via Scan technology, which objectively measured lamb carcasses and provided the information to farmers.

“This is not new. We’re extremely well advanced in all of this,” he said of changes proposed by SFF.

If Alliance is implementing the right strategy under its own steam, I’m yet to be convinced SFF needs PGW as a partner to do the same thing.


Quotable Chocolate

14/07/2008

One of the signs that I was beginnning to grow up was the relaisation that the thought of chocolate for breakfast no longer appealed.

However, while I don’t want to eat it early in the morning I’m still happy to read about it and after finding the story about Dunedin’s chocolate carnival about which I wrote earlier, a Google search for chocolate quotes led me to Virtual Chocolate.

 I particularly liked: 

  • Strength is the capacity to break a chocolate bar into four pieces with your bare hands – and then eat just one of the pieces Judith Viorst
  • Exercise is a dirty word… Every time I hear it, I wash my mouth out with chocolate.
  • I don’t understand why so many “so called” chocolate lovers complain about the calories in chocolate, when all true chocoholics know that it is a vegetable. It comes from the cocoa bean, beans are veggies, ’nuff said.
  • Don’t wreck a sublime chocolate experience by feeling guilty. Chocolate isn’t like premarital sex. It will not make you pregnant. And it always feels good. Lora Brody,
  • “Las cosas claras y el chocolate espeso.” (Ideas should be clear and chocolate thick.) Spanish proverb

NBR goes digital

14/07/2008

The NBR has launched a digital edition to provide an on-line version of the weekly paper.

It will give subscription-paid access to the entire content’s of the print edition from Augsut 8, but a free trial is available now.

The digital edition is a response to demand for the print edition to be available outside the main metropolitan distribution areas on Friday mornings.

I still prefer to read a real paper, it’s easier and faster because although we have wireless broaddband it only gives us 100mbps so downloading digital newspapers takes a while. 

But our print copy comes with the mail which arrives sometime after 1pm and if there’s been a distribution hitch it doesn’t always arrive with Friday’s mail. If we’re away for the weekend we sometimes read a copy on our travels but if we come home to a large pile of mail and papers then we don’t always have time to do justice to it.

That makes the digital edition more attractive so  we’ll have to toss up whether Friday morning access, to the on-line version, albeit with slow download, is better than a later print edition.

But if the various pledges by political parties and internet providers to bring fibre optic broadband to rural people become reality then the on-line version would almost certainly suit us better.


Running between rack and ruin

13/07/2008

Not content with buying the trains, Labour is now talking about building them. 

The Government will consider assembling new KiwiRail locomotives in New Zealand instead of overseas, State Owned Enterprises (SOE) Minister Trevor Mallard said.

 But the National Party says the plan is “an idea from the 1950s” and would waste taxpayer money.

Make that waste more money.

The Government bought rail operator Toll this month for $690 million. The purchase also included $140 million in debt. Finance Minister Michael Cullen has said an $80 million injection will be needed over the next five years to keep rail running. He has also signalled a “reinvestment package” of about $380 million which will include new locomotives.

Mr Mallard today said although the components of those locomotives would be bought overseas the Government was investigating the possibility of assembling them in New Zealand.

“There is no doubt there is a possibility of assembling locomotives in New Zealand,” he said on TVNZ’s Agenda programme.

“It’s probably a very logical thing to do from a currency perspective, from a value for money perspective.”

I don’t think logic has anything to do with this suggestion.

But National’s SOE spokesman Gerry Brownlee said the plan was “daft”.

“New Zealand’s economic well-being will not be served by returning to the glory days of NZ Railways, which everyone knew was a huge waste of taxpayer resources,” he said.

“New Zealanders still don’t know what the final bill for the railways buy-up is, let alone the cost of something like this.”

He said the fact the locomotives would be assembled in Mr Mallard’s Lower Hutt electorate suggested it was little more than a “save-my-seat campaign”.  

My first flat at Otago entered a float in the annual University capping parade. We built a railcar and one of the slogans we painted on its side was : NZR – running between rack and ruin. The more I hear about Kiwirail the more I think that slogan would apply to it too.

Update: No Minister   shows what going back to the 50s would mean and Inquiring Mind  says Labour’s indulging in time travel.


Family Friendly Take 2

10/07/2008

The first version  of Helen Clark’s criticism of John Key and Bill Enlgish for taking time off with their families is a lot more damning than the second version   which explains it wasn’t a premeditated attack but an answer to a question.

Miss Clark’s comment came in response to this question from a reporter: “Both John Key and Bill English are on holiday. Do you think they’ve got reason to be so confident?” Her response was: “They do seem to work pretty short weeks and years in my experience. I’ve found this job is pretty all-consuming.”

If it wasn’t that she’s made it clear she’s out to attack Key personally you could almost feel sorry for the way that statement has been construed as an attack on them for taking a brief break with their wives and children.

But she has made it patently obvious that since ignoring Key wasn’t working she’s set to go as low as she needs to in attacking him. Having done that she’s in no position to complain that an off the cuff dig landed her in a hole.  

It’s also an indication her once legendary political skills are failing her. Not too long ago she’d have been content to make it clear that what the Opposition did was neither of interest nor importance; now by firing a cheap shot she’s made herself a target.


Your Page

10/07/2008

From time to time you might want to post comments updating or giving a different perspective on an old post but if you do that then it’s unlikely anyone else will see what you’ve written; or you might want to comment on the blog in general or raise something not covered by a post.

This page gives you the opportunity to do any or all of that; it’s your page, write what you like on it – within the bounds of decency and without defaming anyone.


Family Friendly But Not For All

09/07/2008

Helen Clark had only just scraped the egg off her face for getting her facts wrong in last week’s attack on John Key, when she put her head back in the hen’s nest by criticising him and Bill English for taking a few days off with their families.

Colin Espiner blogs:

“They do tend to work pretty short weeks,” Clark said of the National leadership yesterday. I thought this was pretty unfair. Both have school-age children. It’s the school holidays and recess at Parliament. The election is at least four months away. Why shouldn’t they have a few days off?

There is every reason why they should have a few days off. It would be difficult to find a less family-friendly job than that of an MP. The hours, the travel, the lack of privacy…  It’s a dog’s life which puts immeasurable strain on MPs and their families so snatching a few precious days of family time is both sensible and healthy.

I accept there are MPs – on both sides of the political divide – whose work rate wouldn’t match the prime minister’s, but even the busiest of people need time off. I’ve said before that I simply don’t know how the PM manages to work as hard as she does and I very much doubt we will see a harder worker than her at Premier House for many a year.

Whether that’s a good thing is a moot point. Should political life be “all consuming” as Clark said yesterday? Or should Key and English be allowed a couple of days off with their families to recharge the batteries and see their kids?

How very sad that Clark has allowed political life to be “all consuming”, for her and for us. Having a life in the real world outside politics might enable her to clear the bile from her brain and have a more varied diet than the lemons she appears to be permanently sucking. In so doing she’d become a better person and we’d get a better Prime Minister.

It might also enable her to see the irony in leading the party which continually reminds us about Welfare Working for Families and has only just passed legislation creating family-friendly work places; then attacking two husbands and fathers who very sensibly take one of the few opportunities their demanding jobs afford them to spend some time with their wives and children.

It makes a farce of any claims she might make that she or her party are family friendly. Her words show that family friendly is only vote-catching rhetoric, not a conviction based on a belief in the philosophy which ought to under lie it.

Clark expects others to respect her choice to not have children but her attack on Key and English is devoid of any respect for them, their families and their choices.


Where will stock agents’ loyalty lie?

02/07/2008

Stock agents are commission agents who are ethically bound to get the best price for their farmer clients.

If PGG Wrightson succeeds in its bid to take a 50% stake in Silver Fern Farms, what will PGW agents do when another meat company has a better price for stock on the day?

Do they do what’s best for their client or do they do what their boss tells them?


Who Needs History Lesson Now?

01/07/2008

Remember Helen Clark criticising John Key for his grasp of history last week?

In Colin Espiner’s story about her speech to a journalism conference she was quoted as saying: “Today’s political editors of the two main TV channels were barely in their infancy, if born, when Norman Kirk brought the troops back from Vietnam…”

I posted  on this yesterday and a couple of commenters said Kirk didn’t bring the troops home, that was done in 1971, before Kirk came to power.

Inventory 2 then said: … the Holyoake/Marshall National government started the withdrawl of NZ troops from Vietnam, although Clark is half-right about Kirk. He came to power in November 1972, and one of the first things he did as PM was to bring the REMAINING troops (of whom my eldest brother was one) home. But when you’re half-right, you’re also half-wrong!

If you are criticising someone else for lack of precision do you not need to be precise yourself; or does this just prove that a little knoweldge is a dangerous thing?


Bellamy – Belching Farting OK

30/06/2008

Dr David Bellamy gives a compelling biological argument for excluding agriculture from the Emissions Trading Scheme in Cows and Sheep May Safely Graze:

Cows and sheep are Mother Nature’s own brand of internal combustion engines. They get their energy by “burning” cellulose, the same stuff wood is made of… Each one is a solar powered, self building, repairing and regenerating mobile mini supermarket. The solid waste from which is recycled, returning organic compost to the soil…

Exhaust from these internal combustion engines both large and small contain carbon dioxide and methane … The molecules of carbon that make up their flesh, wool, hide, burps and farts is not fossil carbon.  

It was sequestered from their pasture rarely longer than a year and most within a few days before their release back into the atmosphere.

Although somewhat modified by human influence they are part of the 97% of the main cycle of carbon dioxide that makes the living world go round. Not the 3% that the global warmers say are tipping the World, towards an omnivore driven armageddon.

This means that the decision to include agriculture in the ETS is a political one which will impose huge costs with no environmental benefit.

My case rests, when it comes to the future of New Zealand butter, beef, lamb, leather, mutton and wool please don’t fart in the face of common sense.

Quite.

 


%d bloggers like this: