Rural round-up


Fonterra faces big milk problem – Chalkie:

If Heath Robinson designed a contraption to pluck the feathers from a mallard with barbecue tongs, it would be the epitome of elegance compared with Fonterra.

Our giant dairy co-operative, bless it, is like an elephant balancing on a stool built by engineering students out of toothpicks – a gravity-defying feat of complexity that threatens to go crashingly wrong at any moment.

The elephant hit the deck big time last week when Fonterra had to press the manual over-ride on its intricate milk pricing machinery and Chalkie reckons the damage will be more than a few splinters in the bum. . .

Farmer loses cows to feed ‘hardware’ – Sandie Finnie:

Carterton dairy farmer Chris Engel is out of pocket but better informed after two of his cows died of “hardware disease”, the industry term for cows that die from ingesting metal fragments in palm kernel expeller supplementary feed.

Now he wants to alert other farmers to the importance of reading the fine print on their PKE supply deals.

Mr Engel sought compensation of $12,522.23 from PKE supplier INL through the Masterton District Court Disputes Tribunal.

It would have covered the death of the cows, lost milk production, veterinarian fees and other costs. . .

New Chancellor for Massey University:

Wellington businessman Chris Kelly is Massey University’s new Chancellor.

Mr Kelly replaces Dr Russ Ballard, who has been Chancellor for the past five years. Mr Kelly is a veterinary science graduate of Massey and highly regarded New Zealand business leader with multiple directorships. This year he retired as chief executive of state-owned Landcorp Farming Ltd, a role he was in for 12 years. He has been on the University Council since August 2005 and has been Pro Chancellor – deputy chair of the council – since July last year.

The University’s new Pro Chancellor is Michael Ahie, also from Wellington. . .

Meat industry takes stock:

The Red Meat Sector Strategy coordination group has released a progress report on how the sector is tracking towards the goals of the Red Meat Sector Strategy, released in May 2011.

The Red Meat Sector Strategy was developed by Beef + Lamb New Zealand and the Meat Industry Association, with support from the Ministry for Primary Industries and New Zealand Trade and Enterprise. It identified ways to secure improved and sustainable growth for the sector against a background of volatile sales and variable profitability, over the past decade in particular.
Just over two years after the launch of the strategy, this report outlines the progress in each of its focus areas and towards realising the opportunities outlined. The report records where progress has been made and where work is actively ongoing. It also identifies the areas where progress has been limited. . .

Fitch gives Fonterra thumbs up over unchanged farmgate payout, dividend cut – Paul McBeth:

Fitch Ratings has praised Fonterra Cooperative Group’s [NZX: FCG] decision to hold the forecast payout to farmers and slashing its dividend by two-thirds amid a growing gap in prices between milk powders and its cheese and casein products.

The Auckland-based company’s decision is “characteristic of the fiscal discipline that underscores its credit rating,” Fitch said in a statement. Fonterra has an AA rating. Earlier this month the cooperative surprised analysts by holding the forecast payout for this season at a record $8.30 per kilogram of milk solids and cutting its expected dividend to 10 cents from 32 cents. . .

Better water quality won’t happen overnight … but it must happen – Jenny Webster-Brown:

If we cannot stop ongoing water quality degradation, and effectively restore degraded water environments, we stand to lose much that we value about New Zealand and our way of life. We will lose recreational opportunities, fisheries and our reputation for primary produce from a “clean” environment. We will lose functioning ecosystems, the ecosystem services they provide and the beauty of our iconic water features. We will have to pay for increasingly higher technology to treat drinking, stock and even irrigation water … like so many drier, more populous or older nations, who have long since lost their natural water amenities. This is not what we have known, or what we wish for our children, or their children. To improve water quality, we need only three things: the will, the means and the time. . .

Wine industry shows increased profitability in 2013:

Financial benchmarking survey optimistic despite challenges for smaller wineries

The turnaround in the New Zealand wine industry has continued in 2013 on the back of improved profitability, especially for large wineries, according to the eighth annual financial benchmarking survey released today by Deloitte and New Zealand Winegrowers.

Vintage 2013 tracks the results of wineries accounting for almost half of the industry’s export sales revenue for the 2013 financial year. New participants provided data this year making for the most even spread across the revenue band categories in the survey’s history. . .

How to count grass – Baletwine:

The Pasture Meter™ automatically takes 200 readings per second so takes thousands of readings per paddock. At 20kph it is taking a reading every 27mm or 18,500 readings in 500 meters.

Towed behind an ATV / RTV or utility vehicle at up to 20kph, this machine provides a fast, practical method of measuring grass cover particularly over large areas over all terrain that can be safely covered by an ATV/vehicle.  The Pasture Meter™ automatically takes 200 readings per second so takes thousands of readings per paddock. At 20kph it is taking a reading every 27mm or 18,500 readings in 500 meters. Developed and proven in New Zealand, there are 3 models ranging from manual paddock ID entry to fully GPS with auto paddock start /stop. . .

Downgrade won’t help opposition


Downgrades of New Zealand’s credit ratings by Fitch and Standards and Poors are disappointing but Finance Minister Bill English said they reflect global issues:

The agencies acknowledge that the Government has made progress in getting its own deficits and debt under control, despite the global financial crisis and substantial extra cost of the Canterbury earthquakes, Mr English says.

“Since we were elected nearly three years ago, this Government has focused on managing New Zealand through the Global Financial Crisis and starting to reduce our single biggest economic vulnerability – namely, our longstanding reliance on foreign debt.

“Having inherited forecasts of permanent deficits and debt spiralling out of control, we’ve set a path back to surplus when most countries will still be in deficit and borrowing.

That is in spite of an unprecedented series of financial problems and natural disasters outside the government’s control.

“New Zealand’s private savings have started to increase and as a result we have started to reduce our total external debt. But it still remains high.

“Figures out yesterday show New Zealand’s net international liabilities were 70% of GDP in the year to June – down from a peak of almost 86% two years ago and Budget 2009 forecasts of more than 100%.

“Compared to other countries, New Zealand has come through the recession reasonably well. We’re one of only 19 countries still rated AAA by Moody’s and we’re now the only highly-rated country with a two notch gap between our ratings with Moody’s and Standard and Poor’s.

“This reflects our unusual position of having relatively low public debt, but large private sector external debt, built up over several decades.”

New Zealand and New Zealanders were heavily indebted long before National took power and it would have taken more than three years to turn that round without a world recession, finance company failures and earthquakes.

The opposition has already seized on the downgrade to criticise National’s financial management but it won’t help them.

But a good part of the debt is due to Labour’s policies of welfare for people in greed rather than need and their failure to get sustainable growth when they had record surpluses.

They wasted the good times and will have a very difficult time convincing anyone we’d be in a better position if they were in power during bad times.

Rather than showing up National’s policies it reinforces the need to continue cutting government spending and getting the policy framework right to encourage savings and investment and facilitate export led growth.

Almost half safest banks in Europe


If you only read headlines you could be excused for thinking the whole of Europe is about to go into financial meltdown.

But almost half the institutions on Global Finance’s list of the 50 safest banks are European and the commentary has more reassurance:

With more than 40 of the top 50 banks from last year once again making the list, the Global Finance ranking shows that most of the top echelon of banks are truly worthy of the moniker World’s Safest Bank.

Winners were selected through an evaluation of long-term credit ratings—from Moody’s, Standard & Poor’s and Fitch—and total assets of the 500 largest banks worldwide.

The list includes the four Australian banks which opponents of foreign investment crticise for owning trading banks in New Zealand.

The top 50 are:

1 KfW
26 United Overseas Bank
2 Caisse des Dépôts et Consignations (CDC)
27 Crédit Lyonnais
3 Bank Nederlandse Gemeenten (BNG)
28 Pohjola Bank(Finland)
4 Zürcher Kantonalbank
29 Credit Suisse Group(Switzerland)
5 Landwirtschaftliche Rentenbank
30 BMO Financial Group
6 Rabobank Group(Netherlands) Tie*31 Cassa Depositi e Prestiti(Italy)
Tie*7 Landeskreditbank Baden-Württemberg – Förderbank
Tie*31 CIBC
Tie*7 Nederlandse Waterschapsbank(Netherlands) 32 Banco Español de Crédito (Banesto)(Spain)
8 Banque et Caisse d’Épargne de l’État(Luxembourg) 33 Deutsche Bank(Germany)
9 NRW.Bank(Germany) 34 JPMorgan Chase(United States)
10 Banco Santander(Spain) 35 Société Générale(France)
11 Royal Bank of Canada(Canada) 36 Wells Fargo(United States)
Tie*12 National Australia Bank Limited(Australia) 37 Intesa Sanpaolo(Italy)
Tie*12 Commonwealth Bank of Australia(Australia) 38 China Development Bank(China)
13 Toronto-Dominion Bank (TD Bank)(Canada) Tie*39 Banque Fédérative du Crédit Mutuel (BFCM)(France)
14 Westpac Banking Corporation(Australia) Tie*39 Landesbank Baden-Württemberg(Germany)
15 BNP Paribas(France) 40 U.S. Bancorp(United States)
16 HSBC Holdings(United Kingdom) 41 Nationwide Building Society(United Kingdom)
17 Banco Bilbao Vizcaya Argentaria (BBVA)(Spain) 42 Agricultural Development Bank of China(China)
Tie*18 Scotiabank (Bank of Nova Scotia)(Canada) 43 Shizuoka Bank(Japan)
Tie*18 Australia and New Zealand Banking Group(Australia) 44 Northern Trust Corporation(United States)
19 DBS Bank(Singapore) 45 CoBank, ACB(United States)
20 Caisse centrale Desjardins(Canada) 46 National Bank of Abu Dhabi(United Arab Emirates)
21 Crédit Agricole(France) 47 National Bank of Kuwait(Kuwait)
22 Nordea Bank(Sweden) 48 Pictet & Cie(Switzerland)
23 Svenska Handelsbanken(Sweden) 49 Barclays Group(United Kingdom)
24 BNY Mellon(United States) 50 Bank of Tokyo-Mitsubishi UFJ(Japan)
25 Oversea-Chinese Banking Corporation(Singapore)

*A tie is assigned when two banks with the same score have total assets withina $5 billion range.

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