Processing essential link in economic chain

March 27, 2020

Some New Zealanders don’t understand primary production and the importance of trade:

A number of New Zealanders are outraged that staff at largely export-driven food manufacturers are required to work during lockdown, leading to questions over the fairness of putting employees’ health at risk for the sake of feeding foreign markets.

It is valid to question if all possible measures to keep workers safe from Covid-19 are being observed, but not to discount the importance of processing food for export.

An employee of an unnamed onion processing factory claims staff are required to work throughout New Zealand’s four-week lockdown, despite all the produce being exported overseas. 

“I work in a food factory that processes onions – hardly essential by themselves. They export them all overseas, none go to the local market, but these guys have decided to stay open,” the worker, who Newshub has decided to keep anonymous, told MagicTalk host Ryan Bridge on Tuesday.

Onions might not be essential by themselves, but does the worker want them left in paddocks to rot, does he not want a job when the pandemic is over and does he not want the country to keep up the trade that will be essential for economic recovery?

“I don’t see what good that’s doing for New Zealand in this situation. The directors have decided because they can, because they’re a food manufacturer, they’re going to stay open… it’s not cool, I’m really aggravated by it.”

The employee says the factory has given staff an ultimatum: if they don’t want to work, they don’t get paid. 

“I have to work… if we don’t, we don’t get any money. I don’t really have a choice, everyone needs a wage coming in,” he said. 

If the factory isn’t operating, the business doesn’t get income and if there’s no income how will it pay its staff?

“Everyone’s health is at risk for absolutely no gain. An onion is not essential, especially when it’s getting sent overseas.” . . 

All workers have the right to be safe from disease just as they have the right to be safe in every other way at work.

The worker can ask for safety measures such as protective clothing and masks and for the two-metre rule of social distancing to be observed at all times. But he’s wrong to question the need for the factory to keep operating.

He obviously doesn’t understand his work in processing is an essential link in the chain that starts in the paddock and finishes with export income that will be needed even more now that the country is headed into recession and spending billions on measures to reduce the damage that Covid-19, and the response to it, is  inflicting on businesses, their owners and staff.

ExportNZ Executive Director Catherine Beard says supplying food is an essential activity, and all governments around the world – including New Zealand – are prioritising food production, importing and exporting.

“New Zealand is part of a global food supply chain which would be disrupted if we started putting restrictions on food exports,” Catherine Beard said.

“Food exports are going to help New Zealand weather this economic storm. 70-80% of goods exports are food-related and they are essential to our economy.

“Nor is there cause for concern about working conditions, as food manufacturing businesses are already highly regulated and sanitised environments.

“Employers will be taking extra care about working conditions to keep employees safe, in line with Government recommendations for safe working conditions in a Covid19 situation.

“Any employee with safety concerns should talk to their employer. Employers don’t want sick workers coming to work with even a cold. Employers will be highly vigilant around the safety of their workers as they don’t want to risk a shut down.”

People everywhere still need to eat.

New Zealand produces far more food than we can consume domestically.

Keeping the production chain going will reduce waste, enable growers to prepare for next season, keep people in work, keep businesses afloat and keep on earning the export income that will be needed to fund the economic and social recovery from Covid-19.


Rural round-up

November 1, 2018

The sun must never set on New Zealand’s agriculture – Keith Woodford:

 These are increasingly troubled times for New Zealand agriculture. A significant proportion of the population has turned against farmers for environmental reasons relating to nutrient leaching and water quality. There is also a loud political narrative about methane from ruminant animals and the need to reduce livestock numbers.

There is also a group of agricultural doomsayers who state that new plant-based foods and even totally artificial foods can mimic meat, and that they will do so at much cheaper cost than the real thing. And finally, there is an increasing group of consumers who are committed to vegan diets for perceived health reasons or relating to personal ethical perspectives. . . 

On the home straight to CPTPPP benefits:

It’s been a long and sometimes bumpy road to achieving a Pacific Rim trade deal but New Zealand producers and our economy will soon reap the benefits, Federated Farmers President Katie Milne says.

“We’re on the home straight. The required six nations have now ratified the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the countdown has started towards the first round of tariff cuts early next year. . . 

CPTPP move momentous for NZ:

ExportNZ says today’s CPTPP ratification by Australia is a momentous day for New Zealand.

Australia’s ratification today of the Comprehensive and Progressive Trans-Pacific Partnership has now delivered the quorum required to start the process leading to the CPTPP taking force.

ExportNZ Executive Director Catherine Beard says the CPTPP deal, a tantalising prospect for years, will now become a reality by the end of this year. . .

Bee Keepers Can Now Check Seasonal Weather Outlooks Against High Resolution Land Cover:

Summer likely to lack widespread monthly extremes in temperature and precipitation

The rapidly growing honey industry in New Zealand has had some weather challenges over the last few years. As Karin Kos noted regarding the 2017 season ‘very dry and windy weather was not conducive to honey and due to the nature of the industry unfortunately it is weather dependent’. Bees also find different land covers to exploit depending on the weather with pastures, indigenous forest and manuka/kanuka forests if made available being just a few examples of how bees can change their diet when weather vagaries occur
. . .

Guy Trafford summarises the debate around how we should deal with methane emissions, and introduces you to the global regulation of SLCPs:

The issue around methane is not going to go away. In the last couple of days two respectable and well known identities have commented.

Phil Journeax, currently with AgFirst and previously with MPI as an economist, and Rod Oram a well-known commentator particularly on things rural. They have both tackled the issue around methane, and climate change from different angles.

Largely both correct but could be talking about two totally different things. Confused? It’s likely to get a lot worse before it gets better.

Cars or lisevstock which contribute more to climate change? – Anne Mottet and Henning Steinfeld:

The pitfalls of simplification when looking at greenhouse gas emissions from livestock What we choose to eat, how we move around and how these activities contribute to climate change is receiving a lot of media attention. In this context, greenhouse gas emissions from livestock and transport are often compared, but in a flawed way. The comparison measures direct emissions from transport against both direct and indirect emissions from livestock. The Intergovernmental Panel on Climate Change (IPCC) identifies and monitors human activities responsible for climate change and reports direct emissions by sectors. The IPCC estimates that direct emissions from transport (road, air, rail and maritime) account for 6.9 gigatons per year, about 14% of all emissions from human activities. These emissions mainly consist of carbon dioxide and nitrous oxide from fuel combustion. By comparison, direct emissions from livestock account for 2.3 gigatons of CO2 equivalent, or 5% of the total. They consist of methane and nitrous oxide from rumen digestion and manure management. Contrary to transport, agriculture is based on a large variety of natural processes that emit (or leak) methane, nitrous oxide and carbon dioxide from multiple sources. While it is possible to “de-carbonize” transport, emissions from land use and agriculture are much more difficult to measure and control. . . 


Rural round-up

September 5, 2017

NOSLaM meeting: 

Randall Aspinall, from Mt Aspiring Station, will speak at a North Otago Sustainable Land Management Group meeting at Five Forks on Thursday.

He will discuss the challenges of being a high country farmer in the Wanaka area and share lessons that had been learned.

NOSLaM was revived several years ago by a group of farmers who were keen to improve water quality and promote good pastoral management practices. . .

Water scheme grew from ground up – Hamish MacLean,

In the 1950s, rural water schemes sprang up in North Otago but the 1989 local government reform, and then progressively stringent legislation aimed to improve drinking-water standards, started to take the control of water schemes away from the farmers who used them.

This winter, after a three-year trial, a community-led non-profit company signed a five-year agreement with the Waitaki District Council to manage four rural water schemes from the grass-roots, Hamish MacLean reports.

Corriedale Water Management Ltd was formed when the Waitaki District Council rewrote its water bylaw four years ago.

A “fundamental” philosophical difference separated the way its users wanted to operate and the way council-owned water schemes were expected to work, chairman Bill Malcolm, of Airedale, said. . .

Does OAD lift productivity?:

In their quest to increase six-week in-calf rates, a growing number of farmers are looking at once-a-day (OAD) milking as a way to improve herd reproductive performance. How effective is this strategy?

The success of taking this approach depends on how long cows are milked OAD before mating. It’s important to note that the benefits of whole-season (or full lactation) OAD on herd reproduction don’t necessarily translate to the use of short-term OAD milking around mating. . . 

Vivid flavones from a vivid country – Joelle Thomson:

Wine writer Jamie Goode says simplicity is key in communicating New Zealand wine to global markets.

The British blogger visited New Zealand to speak at the country’s second Organic and Biodynamic Winegrowing Conference in Marlborough in June this year. His message was emphatic.

“You will maintain an edge in international markets by sticking to a simple clear marketing message going forward in the same way as you have done in the past with Sauvignon Blanc from Marlborough. It’s consistent, reliable and there are no nasty surprises. . .

ExportNZ has released its manifesto for the 2017 election:

ExportNZ Executive Director Catherine Beard says exporting is critical for the economy and voters should choose a Government that supports trade.

“The single biggest policy issue is whether there is support for TPP-11 and other key potential trade deals. These have the best practical ability to grow jobs and incomes,” Catherine Beard said.
Exporters wanted to see a Government keeping the pressure off the New Zealand dollar by balancing the budget and keeping interest rates low through a focused target on inflation. . .

Export vital for New Zealand’s prosperity:

Support for TPP11 and the wider trade agenda by the incoming government is crucial for New Zealand now and in the future, says the EMA.

The need to speed up the growth of exporting was one of the key recommendations in the EMA 2017 Election Manifesto.

“As a nation we rely heaving on trade for jobs and growth. With a population the size of ours, we need a vibrant exporting sector for New Zealand’s prosperity, says Kim Campbell, CEO, EMA. . .


Rural round-up

August 18, 2017

Why will the least swimmable rivers receive less funding for clean up?:

Labour – Let’s answer this – why will regions with the least swimmable rivers receive less funding to clean them up?

IrrigationNZ is continuing to challenge the logic of Labour’s water tax proposal, after finding that regions with more swimmable rivers will receive more funding from the water tax, while those with the least swimmable rivers will receive less funding to clean up rivers.

“We pointed out to Labour in our meeting with them yesterday that region’s with more irrigated land actually have more swimmable rivers, while areas with lower proportions of irrigated land have more rivers graded poor for swimming,” says IrrigationNZ Chief Executive. “The data doesn’t support the idea that irrigation is a main cause of river pollution.” . . 

MPI wins farmers’ praise for cow disease response – Gerard Hutching:

Federated Farmers have given government officials grappling with the cow disease Mycoplasma bovis a pat on the back for their efforts in dealing with the issue.

Biosecurity spokesman Guy Wigley said farmers who met in Waimate last week to hear the Ministry for Primary Industries’ (MPI) latest update were impressed by the scope of what was being done.

“They are getting a huge number of tests done over the next month – 33,000. Farmers were impressed with the professionalism of the staff.” . .

Murray Grey cattle first choice for King Country breeder :

Bringing a cold young lamb inside on a cold spring mornings is a good excuse for a cold young farmer to take a break too.

It has been a wet season on Mike Phillips’ Honikiwi farm about 15 mins northwest of Otorohanga.

“The past month has been really busy and the weather’s not playing ball at all this week. I’ve come in to heat up a lamb so it’s a welcome chance for me to dry out too. I’m feeding about 30 orphan lambs at the moment so we’re in a bit of a routine.”

It’s a far cry from the day he named his murray grey cattle stud – Paradise Valley Murray Greys. . . 

McClay – Government approves TPP11 mandate

The Government has approved a negotiating mandate for Trans-Pacific Partnership 11 (TPP11), which will ensure New Zealand businesses remain competitive in overseas markets.

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on.

“TPP11 ministers have committed to moving forward with the agreement as quickly as possible,” Mr McClay says. . . .

Commitment to TPP11 applauded:

New Zealand’s mandate to negotiate for the new Trans Pacific Partnership (TPP11) is good news, says ExportNZ.

New Zealand has taken a prominent role in moving the agreement towards completion following the US decision to withdraw from TPP negotiations this year.

ExportNZ Executive Director Catherine Beard says it is positive that all 11 members of the TPP group have agreed to stick closely to the terms of the original TPP agreement and are moving at pace towards concluding the agreement. . .

Dairy industry body joins GIA biosecurity partnership:

The Dairy Companies Association of New Zealand (DCANZ) has become the fifteenth and largest industry sector to join the Government Industry Agreement (GIA) biosecurity partnership, Primary Industries Minister Nathan Guy has announced today.

DCANZ is the national organisation representing the dairy processor and exporters sector, comprised of 11 members responsible for 99% of the milk processed in New Zealand.

“It’s very pleasing to have DCANZ working with the Ministry for Primary Industries and other industry partners on biosecurity,” says Mr Guy.

“The dairy industry is a crucial part of New Zealand’s economy, making up over a third of all New Zealand total exports. It is vital we work together to prepare and respond to biosecurity threats. . .

Silver Fern Farms Announce Winners of the Inaugural Plate to Pasture Youth Scholarships:

Silver Fern Farms has awarded six Plate to Pasture Youth Scholarships to an exciting group of young people from around New Zealand who are developing their careers in the red meat, food and farming industries.

Silver Fern Farms Chief Executive Dean Hamilton says the talent emerging from the scholarship applications indicates a bright future for the broader red meat sector. . . .


Get in behind trade

July 10, 2017

Export New Zealand is challenging all political parties to get in behind trade:

ExportNZ says all political parties should be supporting international trade.

ExportNZ today released a report analysing the benefits to all New Zealanders from freely traded exports and imports. The Benefits of Trade shows that New Zealand’s export sector directly and indirectly accounts for nearly three quarters of a million jobs, and that exports bring in 43 percent of New Zealand’s GDP.

“This is a massive chunk of our economy. Without exports we would literally be a third world economy,” said ExportNZ Executive Director Catherine Beard.

“New Zealand exporters – manufacturers, primary producers and technology and services exporters – earn the foreign exchange that pays for all the good things we enjoy. Without a vibrant export sector, we would not be able to afford the infrastructure, health, education and welfare services that are the mark of a first world nation.

Exports enable us to pay our way in the world.

We can’t afford imports unless we successfully export.

It’s not just luxury goods but basic requirements for first world living standards including health supplies, machinery and the food we can’t grow ourselves that we need to buy from other countries.

The money to buy those goods come from our exports and the freer we are to trade the better off we all are.

“We have a brilliant export sector keeping our economy afloat, and we should all be supporting it.”

Catherine Beard said with the approach of the 2017 Election, it was important to hear from all political parties on how they would support trade and free trade agreements with other nations.

“It’s time for all political parties that want a higher standard of living for Kiwis to get in behind New Zealand being a participant in high quality free trade agreements wherever in the world we can get them.

Catherine Beard says in a world of increasing protectionism it is important for all political parties to be united behind an ambitious free trade agenda, because the benefits to New Zealand are overwhelmingly positive.

“The data indicates that in a world where free trade was the norm, New Zealand’s GDP would be $18 billion higher, with an additional 62,000 jobs.”

Key points on the benefit of trade:

 The tradable sector directly and indirectly accounts for $85 billion (43%) of New Zealand’s real
GDP and almost three-quarters of a million jobs.
 Trade helps Kiwi households buy higher quantities of goods and services with their wages, and
lets them access a wider variety of products.
 The gains to New Zealand households from improved product choice from trade alone come
to $3.9 billion, or around $2,300 per household, based on estimates from the literature.
 One US study estimates that trade contributes about 30% of an average US household’s
purchasing power. In New Zealand this share would be far higher, given how trade-reliant we
are compared to the US.
 When tariffs were removed in the late 1980s in New Zealand, import prices dropped sharply,
boosting Kiwi households’ purchasing power by 2%.
 Further multilateral trade liberalisation would deliver huge benefits to New Zealand: the OECD
estimates that New Zealand’s real GDP would increase by $18 billion over the long run if G20
tariffs and non-tariff barriers were halved. This scenario would also create over 42,000 skilled
jobs and 20,000 low-skilled jobs.
 ‘Trade policy’ is now about much more than reducing border tariffs on trade in goods:
services, investment, global value chains, non-tariff measures, people movements and the
flow of technology are hugely important.
 Global services trade liberalisation has been estimated to potentially lift New Zealand’s per
capita GDP by over $1,000 by 2020.
 A comprehensive Trade Facilitation Agreement which reduces red tape associated with trade
could reduce trade costs by 14.5% globally and boost global GDP by between US$345 billion
and US$555 billion per year.
 The reduction of non-tariff measures could deliver significant gains for New Zealand. The cost
to New Zealand exporters of these measures in the APEC region has been estimated at $8.4
billion.
 Around 70% of the economic benefits accruing to New Zealand from the TPP are estimated to
come from a reduction in non-tariff barriers.
 There are some valid concerns about how the benefits from globalisation are shared, but its
positive impacts are undeniable: the World Bank states “The number of people living in
extreme poverty around the world has fallen by around one billion since 1990. Without the
growing participation of developing countries in international trade, and sustained efforts to
lower barriers to the integration of markets, it is hard to see how this reduction could have
been achieved”.
 Addressing New Zealanders’ concerns about globalisation and the future of regional economic
integration in will require more detailed research into the benefits and trade-offs involved in
‘new’ trade issues, and continued reminders about the costs to households of more
isolationist policy settings.

Anyone old enough to remember what life was like in New Zealand before the trade liberalisation of the 1980s and 90s won’t want to go back there.

Domestic goods were usually more expensive and of inferior quality to imports.

Imported goods were in short supply and usually had inflated prices owing to tariffs.

People didn’t travel as easily or often as they do now and when they did they returned laden down with goods which were not available or far more expensive here.

Any policies which limit trading opportunities for exporters or hamper the ready access to imports will hurt us all, and the people who will be hardest hit will be the poor.

With freer trade we all benefit and can even sell avocados to Mexico.


Rural round-up

September 16, 2015

Deal will change face of industry – Dene Mackenzie:

Silver Fern Farms aims to be debt free with money in the bank by this time next year if a deal to form a 50:50 joint venture with Chinese food giant Shanghai Maling gets shareholder approval.

Silver Fern Farms chairman Rob Hewett remained optimistic yesterday the deal would receive the required 50% shareholder support and the company is offering significant sweeteners to persuade shareholders to vote yes.

The deal would allow Silver Fern Farms to become unleashed, he said.

Mr Hewett’s presentation to a media conference was peppered with phrases such as ”turbo-charged” and ”compelling”. . . 

 

Shock waves from Silver Fern Farms will now pulsate through the industry – Keith Woodford:

Five months ago I wrote that whatever happened at Silver Fern Farms, it would be like an earthquake within the meat industry. Given that Silver Fern Farms is New Zealand’s largest meat company, and with the status quo unsustainable, it could not be any other way.

The offer that has now come forward from Shanghai Maling is remarkable. This offer, once regulatory approvals are received, will change Silver Fern Farms from being large but financially very weak, to being large and financially very strong.

Apart from mid-season working capital, Silver Fern Farms will be debt free and with cash in their war chest to ‘take it’ to their competitors. . . 

Alliance reaches out to Silver Fern suppliers – Dene Mackenzie:

Invercargill meat processor Alliance Group wasted no time yesterday in trying to woo disgruntled Silver Fern Farm suppliers after Silver Fern announced a joint venture with a Chinese company.

Alliance chairman Murray Taggart said it was important for New Zealand farmers to retain ownership of their industry and the best way to achieve that would be to supply Alliance as the only remaining major co-operative.

Alliance also muddied the water somewhat by saying it submitted a bid for Silver Fern before Silver Fern’s capital-raising process got under way as part of ongoing discussions with the Dunedin group. . . 

Beef and Lamb expects farm profits to rise – Dene Mackenzie:

New Zealand ”average” sheep and beef farmers are in for a profit lift and Beef and Lamb chief economist Andrew Burtt calls it positive news at a time when the economy would benefit from increased farm sector spending.

Beef and Lamb predicted the average sheep and beef farm would see its profit before tax lift to $109,000 this season – 9.6% more than last season but 3.1% below the five year average. . . 

Sheep meat marketing needs focus on premium – Simon Hartley:

Softening demand for sheepmeat in China and Europe should be prompting New Zealand to prioritise getting premium chilled lamb cuts in China, and to also look further afield to new Middle Eastern markets.

Softer overseas demand for New Zealand sheepmeat, particularly from China, had curtailed New Zealand sheepmeat producers’ returns in recent months, Rabobank animal protein analyst, Matthew Costello said in his recent report on the New Zealand sheepmeat industry.

While China’s imports had ”exploded on to the New Zealand sheepmeat export scene” in 2013, to become New Zealand’s largest sheepmeat trading partner, its own production had since grown to about eight times that of New Zealand. . . 

Large trade blocs good for NZ exports:

New Zealand’s refreshed priorities for international trade have been welcomed by ExportNZ.

The Government’s Business Growth Agenda on trade has been updated, with a focus on completing the Trans Pacific Partnership, achieving a free trade agreement with the European Union, and engaging more with emerging economies in Latin and South America.

ExportNZ Executive Director Catherine Beard said exporters welcomed the continued emphasis on TPP. . .

Swede test a first for NZ – Hamish Maclean:

The plight of Southern farmers last year has led to a first for New Zealand.

When 200 dairy cows died in Southland and South Otago and many more became ill, the cause – a naturally occurring compound in winter feed, swedes in particular, – could not be tested at any New Zealand commercial laboratories.

Now, commercial glucosinolate testing of plants is available in New Zealand, and that is good news for the dairy industry, Dairy NZ says. . . 

Farm prices hold up; MyFarm eyeing dairy opportunities – Fiona Rotherham:

(BusinessDesk) – Farm prices are holding up well on a drop in volume over the winter months, according to the latest Real Estate Institute of New Zealand rural farm sales data.

There were only three dairy farm sales recorded in the past month and the median sales price per hectare for dairy farms for the three months ended August fell to $26,906, compared to $35,304 for the three months ended July and $43,125 for the three months ended August 2014.

But the REINZ Dairy Farm Price Index, which adjusts for differences in farm size and location, rose by 17.3 percent in the three months to August, compared to the three months to July. . . 

Tests before tightening help protect farm fertility:

Soil tests should be the first step for farmers trying to managing budgets while maintaining pasture productivity.

Ballance Science Extension Manager, Ian Tarbotton, says keeping soils fertile is good insurance with pasture an essential feed source, but gut instinct or past experience won’t lead to good decisions on what to spend or save.

“Soil tests will show you what you have to work with and they are the best guide to decisions around a fertiliser budget. The last thing farmers want to do is to compromise future productivity, so understanding what nutrients are available now is the best basis for decisions on fertiliser budgets.” . . 


Rural round-up

April 20, 2015

Future of the heartland – Dr William Rolleston:

When we think of the Heartland we conjure up images of the rough and ready can-do farmer striding across the high country. But the farmer of the Heartland is not confined to this image.

Farming in the Heartland is a technically challenging career. I am in constant awe of my fellow farmer, who every day must make complex decisions, dealing with the vagaries of weather, biology and the market. Like me, my grandfather also came to farming from medicine and for the rest of his life found incredible satisfaction in the scientific challenge farming brings.

The Heartland has contributed enormously to New Zealand and our development as a country. This month we commemorate 100 years since New Zealand’s recognised baptism of fire.

Farmers contributed their horses and their sons to the war effort. Almost every horse and many of our men never returned. Back in New Zealand the production of food and fibre had to continue apace. We remember the past but we also must look to the future. The future of the Heartland. . .

 Award-winning agriculture student gets the job done – Kate Taylor:

Kahlia Fryer wants to own her own farm one day and she’s likely to make it if her work ethic to date is anything to go by.

As well as studying and working fulltime as president of the Lincoln University Students’ Association, she has 41 high-breeding-worth heifer calves that are in the top 5 per cent of New Zealand crossbreds and destined for her father’s herd.

Fryer won the Lawson Robinson Hawke’s Bay A&P scholarship at the recent Hawke’s Bay Primary Industry Awards  – chosen as much for her extensive work experience as her wish to succeed in agriculture and to encourage others into the industry, according to one of the judges.  . .

Grower tops veggie patch:

Pukekohe grower Hamish Gates  has beaten off tough competition from four finalists to be crowned New Zealand Young Vegetable Grower of the year.

Gates had the home turf advantage in the Horticulture New Zealand competition at Pukekohe on April 16 where finalists competed in a series of practical and theoretical challenges  to test their skills needed to run a successful vegetable growing business.

Gates, 24,  works at AS Wilcox & Sons as a carrot washline supervisor and won a $2500 travel grant for professional development and other prizes. As the vegetable grower titleholder he will travel to Christchurch to compete for the national Young Grower of the Year title in August. . .

Game of two halves for 2015 Grain Harvest :

The 2015 Grain Harvest has been a game of two halves, according to survey results released by the Arable Industry Marketing Initiative (AIMI).

Federated Farmers Grain and Seed Vice-Chairperson, David Clark, says “Whilst drought conditions during the growing season has reduced the yields on dry land that has been balanced out by improved yields on irrigated land resulting in total harvest yields being very similar to 2014 across all grains.”

“The survey shows the large surpluses of unsold grain in the previous 2013 season have well and truly gone, however available stocks of grain are very similar to last season which leaves the NZ Industry well placed to provide domestically grown feed to assist in drought recovery.” . . .

Paul Whiston appointed CEO of LIC Automation:

LIC has appointed Paul Whiston as chief executive of its new subsidiary business, LIC Automation.

Paul Whiston, originally from Rotorua, was previously head of sales and marketing for Paymark Ltd, the bank-owned payment network operator, where he was also acting chief executive for a time.

Prior to that, he was based in London as general manager international for Simpl, a New Zealand information technology professional services company. . .

 

ExportNZ welcomes introduction of U.S. legislation to facilitate trade agreements:

ExportNZ Executive Director Catherine Beard says the introduction of bipartisan legislation in Congress to re-establish Trade Promotion Authority (TPA) – trade legislation that facilitates the negotiation and implementation of U.S. trade agreements – is welcome news.

“There is still work to be done to pass this legislation, but this is an important step in that direction. We understand we are close to the final stages of the TPP negotiation.  . .

 


Manufacturing expands for 21 months

July 11, 2014

Once more the statistics don’t support the opposition’s manufactured manufacturing crisis:

The manufacturing sector remains in expansion mode, despite some aspects of the results that need to be watched closely in the months ahead, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for June was 53.3 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 0.7 points higher than May, with the sector now being in expansion for 21 consecutive months.

BusinessNZ’s executive director for manufacturing Catherine Beard said that the slight lift in expansion levels was obviously welcome, albeit with a few head winds for manufacturers.

“Overall production levels remain healthy, and have been very consistent for the last three months. Employment levels continue to show more people entering the sector, while the largest proportion of comments received are still positive.

“As mentioned last month, the fundamentals of both the PMI and other indicators of the economy still point to positive activity. However, the continued strength of the New Zealand dollar, as well as new order levels continuing to fall, mean there are elements of the sector that need to be watched closely in the months ahead.

BNZ senior economist, Craig Ebert says “Wading through the manufacturing component of the latest QSBO, while there are clear hints of moderation, it seems mainly a settling down into normal growth patterns rather than any sort of stalling. We get a similar impression for the recent PMI levels and trends, with its weak spot seemingly concentrated in new orders.” . . .

Business is never easy but 21 successive months of expansion with the dollar providing a head wind is a sign of the sector’s strength.

 


Manufacturing marching on

April 10, 2014

More good news of the manufacturing front:

Activity in New Zealand’s manufacturing sector continued to march onwards, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for March was 58.4 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 1.9 points higher than February and the highest level of activity since July 2013. The sector has now been in expansion for 19 consecutive months, with the first quarter of 2014 averaging 57.1.

BusinessNZ’s executive director for manufacturing Catherine Beard said that there were a number of pleasing aspects to the March result.

“After five consecutive months of solid activity, it was pleasing to see activity experience a further boost. Both production and new orders remained strong, while employment also lifted to its highest level for over six years.

“The proportion of positive comments from manufacturers for March broke the 60 percent value for the first time this year, as new orders/customers and an improving economy is providing a stronger platform for business growth.”

BNZ Head of Research Stephen Toplis said, “The manufacturing sector is in a buoyant mood – and rightly so. However, the economy and financial markets are at an inflection point. At such times, the potential for significant movements in interest rates and exchange rates is heightened. Given this, businesses need to focus on risk management to ensure that the impact of such risks can be mitigated.”

For the first time since October 2013, all five seasonally adjusted main diffusion indices were in expansion for the current month. Both production and new orders (60.5) displayed the same level of expansion, while employment (56.3) rose 1.6 points to record its highest level since November 2007. Deliveries of raw materials (57.1) edged slightly downwards from February, while finished stocks (51.1) went back into expansion after four consecutive months in contraction.

All four regions were again in expansion during March, with levels very similar across the country. In the North Island, the Northern region (59.2) rose 6.3 points, while the Central region (57.6) was almost identical to February’s result. In the South Island, the Canterbury/Westland region (59.9) picked up 6.2 points from February, while the Otago-Southland region (59.8) dipped 1.9 points.

Employment at its highest level since November 2007 is particularly encouraging.

The Opposition spent a lot of their time and our money touring the country manufacturing a manufacturing crisis.

When the sector has been expanding for 19 consecutive months, even they must admit there is no crisis.


The manufactured crisis

February 14, 2014

Remember the manufactured manufacturing crisis the opposition spent so much of their energy and our money on last year?

The news on it is bad for them but very good for the rest of us:

New Zealand’s manufacturing sector started 2014 on a healthy note, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for January was 56.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). The sector has now been in expansion for 16 consecutive months, with the last six months also averaging 56.2.

BusinessNZ’s Executive Director for Manufacturing Catherine Beard said that despite the usual seasonal effects of Christmas and the holiday season, the sector has begun the way it finished off 2013.

“Positive comments from manufacturers revolved around a growing confidence by consumers, further gains in building construction and continued high levels of new orders, both domestically and offshore. In particular, the metal product sector is currently benefitting from the strong residential construction boom, which will no doubt continue for some months to come.”

BNZ Economist Doug Steel said it would be easy to understand if the PMI had lost a bit of heat in January, given the hefty lift in the NZD/AUD exchange rate. But the PMI has barrelled on, as domestic demand strengthens. . . .

This provided the opportunity in Question Time yesterday:

Hon STEVEN JOYCE: Of the 16 different industries measured by the household labour force survey, employment rose in 11, including manufacturing, which does debunk another myth often heard around this building. There is no doubting that the high New Zealand dollar is a challenge for exporters, but the January Performance of Manufacturing Index, which was released today, shows manufacturing has now been in expansion for 16 consecutive months, which is, weirdly, precisely the exact same time since the Opposition announced the start of its inquiry into a manufacturing crisis. I quote from the Performance of Manufacturing Index today, which says that manufacturing punched above its weight regarding job growth in 2013. It accounted for 13.5 percent of jobs added in the New Zealand economy overall last year, which is more jobs than were added in Australia in the same period. . .

There is a cloud on the horizon though:

Hon STEVEN JOYCE: . . .  The Government has more than 350 initiatives under the Business Growth Agenda that are helping businesses grow, because that is how employment grows. I contrast this with policies that would put a chill on industries, that would cause their hiring intentions to freeze, and companies themselves might not even survive—for example, if you nationalise the electricity industry or double the cost of the emissions trading scheme on households and businesses, or if you impose new taxes on every single business in the country. . . .

The left demonise business without realising its the goose that lays the golden eggs of employment and economic growth.

The recovery is real but it’s not yet robust and a change of government with policies that would undermine business confidence could easily reverse the hard-won progress that’s being made.

 

 

 


Rural round-up

July 11, 2013

X-ray transfer system offers biosecurity boost:

Primary Industries Minister Nathan Guy has welcomed the beginning of trials for the use of x-ray images to screen airline baggage before it arrives in New Zealand.

The trials are a world-first and involve the transfer of aviation security x-ray images from Melbourne Airport to Auckland for passengers on Air New Zealand flights, while the passenger is on the flight. Passengers will still be subject to clearance requirements prior to boarding the plane.

“This technology will allow biosecurity staff to assess the x-ray images before the plane touches down. Any bag containing biosecurity risk items will then be matched with the passenger, who will face further scrutiny by officials upon landing,” says Mr Guy. . .

Plenty of hope but no solutions yet – Allan Barber:

The Red Meat Sector Conference, held in Auckland on Monday, was very well attended by 320 people from all parts of the industry.

There were interesting presentations from overseas and local speakers. The former spoke eloquently about the outstanding global prospects for the red meat sector, while the latter had plenty of statistics to illustrate their concerns about sheep and beef farming debt and shrinking livestock numbers.

The Prime Minister opened the Conference with an upbeat talk about an $8 billion industry of great importance to the country. While acknowledging farmer dissatisfaction with the status quo, he said it was up to the industry to drive change, but the government was sympathetic and supportive. . .

New Zealand red meat sector welcomes Economic Cooperation Agreement with Taiwan

Beef + Lamb New Zealand (B+LNZ) and the Meat Industry Association (MIA) say the signing of the Economic Cooperation Agreement (ECA) between New Zealand and Taiwan is a significant outcome for the New Zealand sheep and beef sector.

Eliminating all tariffs on beef within two years and sheepmeat within four years is important news B+LNZ Chairman, Mike Petersen and MIA Chairman, Bill Falconer said.

“This ECA will eliminate tariffs with Taiwan and it complements New Zealand’s existing free trade agreements with China and Hong Kong,” Petersen said.  .  .

ExportNZ welcomes economic cooperation agreement between New Zealand and Taiwan:

ExportNZ welcomes the announcement that New Zealand and Taiwan have signed an economic cooperation agreement.

Executive Director of ExportNZ, Catherine Beard, says this will be positive for both economies since they are very complementary, with Taiwan’s exports to New Zealand being dominated by high tech manufactured goods and New Zealand’s top exports to Taiwan being agricultural products. . . .

New Zealand – Taiwan Economic Cooperation Agreement positive for seafood trade:

Seafood New Zealand welcomes today’s announcement of the signing of an Economic Partnership Agreement (ANZTEC) between New Zealand and Taiwan and congratulates the Trade Minister, Tim Groser, and his team of negotiators for completing a negotiation that first started under the watch of the previous Labour-led administration.

All of New Zealand’s seafood trade interests with Taiwan have been fully included in the Agreement. All seafood items will be able to enter Taiwan tariff free within eight years – with many products benefitting much earlier. . .

‘ASEAN tigers’ offer growth opportunities for New Zealand’s dairy sector:

Burgeoning demand for dairy among consumers in the ASEAN-6 group of countries is creating substantial trade opportunities for dairy export countries including New Zealand, according to a new industry report.

In the report Dairy – Milk for the ASEAN-6 Tigers, global agribusiness banking specialist Rabobank says the ASEAN ‘six majors’ (the six largest economies of the Association of South East Asian Nations – Indonesia, Thailand, Malaysia, Singapore, the Philippines and Vietnam) should be part of all dairy exporters’ global growth strategies, but particularly for New Zealand given its competitive advantage in these markets. . .

Latest Agreement gives New Zealand wine tariff-free access to Taiwan:

New Zealand Winegrowers welcomes the signing of the Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu on Economic Cooperation (ANZTEC). The Agreement will give New Zealand wine tariff-free access to the Taiwan market as soon as it comes into force.

“This is an important trade advantage for New Zealand wine exporters. Taiwan is a small but developed market that is well suited to the premium wine styles that New Zealand offers. Asia is an increasingly important destination for New Zealand wines. This Agreement will make New Zealand the only wine exporter with tariff-free access to China, Hong Kong and Taiwan.” said Dr John Barker, general manager advocacy and trade for New Zealand Winegrowers. . .

Latest research delivers encouraging signs for oyster industry ahead of AGM:

A collaborative research programme to breed oysters resilient to a virus that three years ago devastated New Zealand’s Pacific oyster industry is starting to deliver promising results.

Scientists at Cawthron Institute, together with industry partners, have been working towards breeding Pacific oysters resilient to the ostreid herpes (OsHV-1) virus that almost wiped out the country’s Pacific oyster stocks in 2010.

Cawthron Institute has today reported promising results from the latest research trials which it will present at the New Zealand Oyster Industry Association AGM this weekend (6 July).

“We have identified oyster families with a very high survival rate when exposed to the oyster virus, which decimated stocks in 2010,” Cawthron Institute Chief Executive Charles Eason says. “These recent findings are most encouraging. They suggest that selective breeding has great potential to address the current crisis.” . . .


Green’s not for growth

May 3, 2013

The Green party is soliciting funds for its election campaign with an email that says:

 . . . National’s policies of more mining, weakening environmental protections, poor economic management and growing inequality are not the recipe for a fair society and a better future.

 In contrast to National, we have the ideas to deliver a richer New Zealand. . .

Green is supposed to be the colour of growth but these Greens are really reds promoting the policies that have failed in the past.

Take their plan to bring down the exchange rate. Prime Minister John Key says currency intervention and printing money won’t work:

. . . “It didn’t work very well for Argentina, or Venezuela or Zimbabwe and it could never be done in New Zealand at the sort of magnitude we’ve seen in the United States,” said Key.

As for the New Zealand dollar versus its United States counterpart, Key used a seesaw analogy.

“It’s a bit like being a seesaw and if I weigh 85 kilos and you weigh 170 kilos, I’m going to go up when you sit on the seesaw and you’re going to go down. And that’s really the situation we’ve got at the moment.”

“We kind of weigh 85 kilos and the United States weights 850 tonnes. Right up to this point it (the US) has been very unwell. It has got everything from aids to bird flu. It has really been pretty unwell so the market’s just massively adjusting what they’re doing.”

When people say the Reserve Bank should be printing money, Key said you wouldn’t do that with base rates – the Official Cash Rate – at 2.5%.

“All you do is cut interest rates for a start off. The second thing was even if you printed money, it’s never going to work. I think they’ve printed US$5.5 trillion in the US. I mean it’s massive. So what would we print? NZ$50 billion or something? It wouldn’t make an iota of difference.”

“So my view would be I know we want to get the exchange rate down and I know it’s hurting a lot of companies. But it’s a cycle you’re going to have to ride through and all the Government can do is control the things that are in our control. So get out there and reform the Resource Management Act, make sure we don’t spend too much money, make sure we keep pressure off interest rates, manage the place well,” Key said. . . .

The reds want to increase the burden of government, their policies will lead to higher interest rates and they haven’t a clue about good economic management.

. . . Furthermore, he said intervention in the currency markets never works.

Here Key cited an example from his previous career at Merrill Lynch, where at one time he was head of global foreign exchange. One of Merrill Lynch’s biggest clients was the Bank of Japan, which used to intervene in the currency markets through Merrill Lynch.

“To tell you how bad it got, one night we were sitting there and the Bank of Japan rang up and the US$-yen was about 90 or something and they didn’t want it to go down lower. And the guy said to me ‘I want you to start buying dollars at 90’. And I said ‘how many do you want me to buy’, and he said ‘well, I’m going out for three hours so I’ll give you a yell when I get home.’ And I said ‘yeah, but how many do you want me to buy?’ And he said ‘I’m going out for three hours, don’t you understand the conversation?’

“I bought US$4.5 billion in three hours. He said ‘where is it (the US dollar-yen exchange rate)’ and I said ‘it’s 90, you bought US$4.5 billion. And he said ‘ah, well I’m off to bed now give me a ring in the morning’,” said Key.

“It never worked, it just never worked. I don’t know how much money they lost on intervention but it was massive.” . . .

Who do you believe – someone who has worked in international finance and has managed the country through the global financial crisis or people who want to print money and whose power policy would have a chilling effect on on private investment? Rob Hosking writes:

. . . There is something essentially frivolous about anyone who would cheerfully rip up the value of some of the country’s largest firms, and the value of the investment in those firms, simply for a political positioning exercise.

This is why the exchange caught by TV3 between Green energy spokesman Gareth Hughes and party spin zambuck Clint Smith was so telling.

For those who missed it, Mr Hughes was asked if the party was pleased at the reaction: Mr Hughes paused, turned to Mr Smith and asked “Hey, Clint – are we pleased?”

It was telling that he even had to ask.

But the almost palpable glee coming out of the Green and Labour camps at the destructive impact of their policy is highly revealing. 

It underlines – not for the first time – the problem with the makeup of both parties. They are dominated at the MP and the staff level by the sub-genus homo politicus.

That is, they are full of people who have done nothing in their lives apart from politics. All parties have a complement of this group, but with Labour and the Greens the group has reached critical mass.

This group has been involved in politics at university, moved from there to various political/union offices and then into parliament. 

There is little real world experience and everything is viewed through a very narrow prism of political advantage.

It’s the sort of attitude which means the value destruction seen this week can be just laughed off.

There will, unless we are careful, be more such frivolous policies to come.

I would use a far stronger word than frivolous and the business community certainly isn’t taking it lightly.

In an open letter to LabourGreen they say the policy would harm jobs, growth and investment, causing interest rates to rise, reducing KiwiSaver retirement savings and making people less well off.

. . .Business shares your concerns about constantly rising power prices and their impact on our global competitiveness. Businesses and consumers work hard every day to minimise their spending on electricity in order to stay in business and

to make their household budgets stretch further.
However, we do not think that electricity policies based on subsidies and greater state control are the right answers. Such policies have been tried in the past and have been shown to be incapable of meeting the challenges of a modern economy
with a complex, real-time electricity market.
 
Putting aside the sheer complexity of their implementation, policies that protect businesses from the full costs of the inputs they use ultimately dull the incentive to innovate and make them less, not more internationally competitive. Reducing retail
prices below the full marginal cost of production encourages households to use more than they should.
Of particular concern with the policies announced is their chilling effect on investment across the entire economy.
 
We are especially concerned at investment analyst reports noting the potential for $1.4 billion of shareholder value to be wiped off the books of the private power companies. A similar amount, if not more, will come off the value of the public power companies.
 
 
Capital destruction on such a scale will severely undermine business confidence.
It sends signals to investors, on whom the New Zealand economy relies, that their wealth and the benefits it provides are not welcome.
 
Investment plans and job creation opportunities are foregone.
 
Rather than remote and intangible, this dampening of investment intentions will have a direct and real economic impact on those of all walks of life who seek to accumulate wealth by working hard to save, invest and grow. It causes interest rates
to rise, depletes retirement savings held in KiwiSaver accounts and means that other economic opportunities such as first homes are foregone and new business ventures as savings are unexpectedly reduced.
 
Individuals are less well-off as a result.
 
With the good of all New Zealanders in mind we ask you to withdraw these damaging policies. We offer to work with you in increasing public understanding of the operation of the electricity market and in ensuring consumers, both small and large,
have better choice from one of the increasingly competitive electricity markets in the world.
 
Yours sincerely,
 
 Phil O’Reilly Chief Executive BusinessNZ
 
Ken Shirley Chief Executive Officer Road Transport Forum
 
Catherine Beard Executive Director Manufacturing NZ
 
Ralph Matthes Executive Director Major Electricity Users Group
Chris Baker Chief Executive Straterra

John Scandrett Chief Executive Officer Otago Southland  Employers’ Association

Raewyn Bleakley Chief Executive  Business Central–Wellington

Kim Campbell Chief Executive EMA

Peter Townsend Chief Executive CECC

Michael Barnett Director  New Zealand Chambers of Commerce

These people represent people who employ people, the ones who need certainty and confidence to make investment that creates jobs, earn export income and pay taxes.

These are people who work in the real world.

They know there’s nothing funny about bad policy that would take the country backwards, cost jobs and make us all poorer.

They know that Green isn’t for growth and it doesn’t mean go.

Green economic policy is bright red and it will mean stop to economic growth and job creation.


Exporters positive

July 27, 2012

The global outlook might be cloudy but exporters are still sunny:

“The ExportNZ 2012 Survey shows the majority of exporters are still in a positive frame of mind despite exchange rate challenges and the lacklustre growth affecting some parts of the world economy”, says Catherine Beard, Executive Director of ExportNZ.

Just over half the respondents (51.8%) expected their profitability to improve in the next 12 months and 35.7% expect to employ more people. Over the next 12 months, 19.6% expect their orders to rise substantially and 48.8% said they expected orders to rise slowly.

The top 5 export destinations for respondents were Australia, North America, Europe (incl UK), China (incl Hong Kong) and ASEAN. . .

The main obstacles to exporting identified by respondents were demand offshore, exchange rate volatility, funding for developing export markets and price competitiveness of their products.

Regulatory barriers to export were more troublesome in overseas markets, where 34.1% had a problem than in New Zealand, only 13% mentioned domestic barriers.

The overseas barriers are mainly around issues such as tariffs, product registration, bureaucracy and non-tariff barriers – see full report for expanded list.

The domestic barriers mentioned included treatment of the export of education services (NZQA and immigration rules), food safety transaction costs, phytosanitary and AQIS costs and export freight costs.

The Ports of Auckland dispute affected 28% of Auckland respondents negatively and 15% of Tauranga exporters. Dollar figure losses ranged from $5,000-250,000, with one respondent having lost $4,000 a week. See full report for comments.

When asked if the Government was doing enough to support exporting 61.3% said no (down from 65% last year) and when asked what kind of Government assistance was favoured, the majority said Export Market Development, followed by R&D assistance.

When asked more generally what the priority issues were, development or venture capital was most important, followed by export market development and R&D.

Catherine Beard said the emphasis on more help needed for export market development probably reflects the fact that many of our exporters are relatively small by world standards. While 24% of respondents said capital was no constraint at all, for around 32% it is a real constraint.

The regions where respondents said they expected most growth were Australia, North America and China, and 40% of respondents expect to enter new markets in the next 12 months, which is encouraging.

Catherine Beard said it was good to see the resilience of the export sector in the survey results, particularly given the global slowdown and the volatile dollar.

“There is a significant list non-tariff barriers that exporters are battling and ExportNZ is keen to work with government officials to tackle them.”

This reinforces the importance of the work the government and officials are doing in negotiating free trade agreements.


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