Why so glum?

August 8, 2019

The quarterly unemployment rate is down to 3.9%; and the official cash rate is at an historic low of 1%.

Yesterday’s GlobalDairyTrade was down 2.6%, the fifth drop in the last six auctions but no-one’s suggesting the milk payout will be lower than $6.

Horticulture and wine are getting healthy returns, arable incomes are reasonable, wool is dismal but the outlook for sheep meat and beef is positive.

But Business confidence is down to -44.3% :

. . .That was the worst reading since August last year, when the index was at -50.3. Employment intentions slumped (-5.5 vs 0) as firms sought to cut jobs, capacity utilization weakened to its lowest since 2009 (0.4 vs 5.3), and activity outlook (5.0 vs 8.0) and export expectations (1.4 vs 5.3) deteriorated. In addition, profit expectations fell further(-16.3 vs -12.5), while investment intentions turned to negative (-0.3 vs 2.5). . . 

And consumer confidence is also gloomy:

The Westpac-McDermott Miller consumer confidence index in New Zealand fell to 103.5 in the second quarter of 2019 from 103.5 in the previous period. Households became increasingly worried about conditions in the global economy over the next five years (-3.5 points to 11.9); and the number of households who think now is a good time to purchase a major item has fallen to a two-year low (-5.5 points to 17.9).  . . 

Why are we so glum?

Today’s historic cut to the Official Cash Rate down to just one per cent sounds a dramatic warning that the New Zealand economy is slowing and the Government needs to get serious about growth, National’s Finance Spokesperson Paul Goldsmith says.

“The Reserve Bank’s cut came with the message, ‘Indicators of growth remained weak or weakened further over the past few months’.

“The only time in the history of the OCR there has been a cut of this magnitude have been after the 9/11 terrorist attack, during the Global Financial Crisis, and after the Christchurch earthquake.

“Of greatest concern is the absence of any clear growth plan from this Government.

“Budget 2019 was devoted almost exclusively to spreading national wealth, with very few policies to grow the economy. The most expensive Budget commitment to transform the economy was a $1 billion subsidy for rail. There was little else.

“Instead of ramping up infrastructure investment, the Government has stopped or postponed a dozen roading projects which were ready to get underway, and replaced them with projects that aren’t ready to go, and won’t be for a lot time yet’.

“We need to move beyond policies that add costs to the business and drive down business confidence.

“National would revive the economy by having a plan for growth which would see confidence bounce back and the economy gain the strength it’s lost under this Government.”

There is no doubt what the government is doing and not doing are a large part of the problem.

In spite of at least reasonable returns for almost all primary products farmers feel under-siege with very real concerns about the costs and restrictions the government will impose on them.

Other businesses have similar worries, not helped by the latest confidence-sapping message sent by the Prime Minister’s ordering Fletchers to not build anything until the Ihumātao dispute is settled.

Then there’s the on-going argument over the letter Associate Transport Minister Julie Anne Genter is refusing to release and the questions that raises over the part she played in delaying Wellington transport plans.

Concerns over this aren’t helped by claims from Wellington City Councilors that the Green Party confidence and supply agreement would have been put in jeopardy if a watered down Let’s Get Wellington Moving wasn’t accepted.

All of this points to government instability and is compounded by Winston Peters’ latest game playing over requiring a referendum on changes to abortion law.

When interest rates were already so low, it is unlikely the larger than expected drop in the OCR will have much impact on the productive economy when there are so many reasons pointing to the need for caution.

And while low interest rates help borrowers they punish savers.

All in all there is little to give anyone confidence anything is going to get better soon and plenty of reasons to doubt the government has the plans and policies to help.

And now the Reserve Bank has dropped the OCR, it raises the question of what happens when, as is likely, economic conditions get worse.


Welcome lift in GDT

February 7, 2019

This morning’s GlobalDairyTrade auction had a welcome lift of 6.7% in the price index and an increase in prices for all products except butter milk powder.

The trend for the year is positive which gives some confidence that the payout won’t go below $6.


Rural round-up

October 20, 2018

Politicised fads don’t sway EPA’s science. Consumer localism fads don’t support real farmers. Prices retreat for livestock although to still-healthy levels – Guy Trafford:

The Environmental Protection Agency (EPA) announced recently their ‘top’ 40 chemicals they believe are worthy of a closer look.

One of the more interesting aspects of the list is that glyphosate is not on it. This is a small victory to science over uninformed public opinion.

As the general public and ratepayers they have a say over what chemicals may and may not be used within cities and city councils have certainly responded with many councils through-out the world no longer using it.

Councils have found other, arguably more appropriate, ways to manage weeds, sometimes by just ignoring them and getting used to the idea that parks are allowed to look a little scruffy around the edges. . .

Global Dairy Trade looks to boost liquidity, add new markets  – Rebecca Howard:

The Global Dairy Trade platform is looking to boost liquidity, GDT director Eric Hansen told the NZX Global Dairy Seminar in Singapore.

As of May, the 10-year-old platform had seen US$23 billion traded across multiple products in more than 200 trading events. While growth had been significant “we really need to do a lot more work to boost liquidity on the platform,” he said. . .

Sir Michael Fay’s hill country station on the market – Eric Frykberg:

A prestigious hill country station in the Wairarapa is being put up for sale by Sir Michael Fay.

The Lagoon Hill Station includes 1360 hectares of plantation forest.The Lagoon Hill Station includes 1360 hectares of plantation forest.

Lagoon Hill Station comprises of more than 4,000 hectares between Martinborough and the Wairarapa coastline, and has been owned by Sir Michael since 1993. It comprises a sheep and beef farm, plantation forest and a private hunting block. . . 

Tractor fatality – farmer in court:

Tractors are an integral part of farm businesses, but they are also a key contributor to New Zealand’s agricultural industry’s unacceptable number of farm deaths. In the last six years 30 New Zealanders have died while using them.

And WorkSafe is warning farmers that they are legally required to have an effective way of identifying and managing the risks involved in their work on farms, this includes the risks involved in the use of vehicles
. .  .

Glowing Sky – New Zealand merino clothing – Tim Brewster:

Wool is finally on the comeback trail.

Coveted as a cloth for luxurious garments, resilient enough for harsh outdoor environments, the finest stuff is still found on the back of merino sheep up in the South Island’s high country. Aficionado’s of merino wool have always known its natural attributes outperformed synthetics.

Now sustainability and ethical provenance are also key influencers in customer choices and the wool of kings is enjoying a valuable advantage over its traditional rivals. Deep down south, those qualities were never in question when Glowing Sky’s New Zealand merino clothing products, proudly made by a local sewing crew, first hit the shelves in 2005. . . 

Early birds catch the prize:

Time is running out to be in to win an Early Bird prize when you enter the 2019 New Zealand Dairy Industry Awards.

Online entries don’t close until midnight November 16, however those that enter before midnight on October 20 will go into the Early Bird Entry Prize Draw and be in with a chance to win prizes from Honda. . .


Rural round-up

July 4, 2018

Dairy prices tumble 5% at latest auction – Gerard Hutching:

Prices plunged at the latest global dairy auction by 5 per cent per cent to reach an average of US$3232, the most dramatic decrease seen in the index this year.

The price for New Zealand’s key export whole milk powder (WMP) was US$2905, a fall of 7.3 per cent. Futures markets had suggested WMP might fall by 1 per cent. 

AgriHQ said Fonterra’s latest Global Dairy Update appeared to have given the market the jitters, especially for WMP. . . 

Trade dispute causes dairy prices to tumble – Fran O’Leary:

Dairy markets appear to be reacting negatively to President Donald Trump’s decision to place tariffs on Mexican steel and aluminum, and on a number of Chinese products.

“In retaliation, Mexico announced that they will place a tariff on U.S. cheese, and China announced tariffs on some dairy products, corn, soybeans and other products. Mexico is the largest export market for U.S. cheese,” says Bob Cropp, University of Wisconsin Extension dairy economist.

“In 2017, Mexico accounted for 28.3% of U.S. cheese exports. While these tariffs didn’t take effect until July, and the degree of impact on U.S. dairy exports is unknown at this time, dairy product prices have already fallen.” . . 

2019 Zanda McDonald Award now open:

Talented young agri-leaders from Australia and New Zealand are being urged to apply for the 2019 Zanda McDonald Award. Applications for this prestigious award open today, with an impressive prize package worth over $50,000 up for grabs.

Now in its fifth year, the award provides the winner with an all-expenses paid trans-Tasman mentoring trip, $1,000 cash, a place on Rabobank’s Farm Managers Course, and access to the Platinum Primary Producers (PPP) Group – a network of over 150 influential agri-business men and women from across Australasia.

Richard Rains, Chairman of the Zanda McDonald Award, says the award provides a fantastic opportunity for young agricultural leaders to further their career and their personal development. . . 

Backing our Southern men:

There’s something magical about having a hometown advantage.

But that advantage comes with a twist for two southern men who are competing in the FMG Young Farmer of the Year grand final in Invercargill this week.

Technically, there are two southerners competing in the final, but they represent different regions in the contest. 

Logan Wallace, 28, leases his parents farm at Waipahi in south Otago and is the Otago-Southland regional finalist, while Cameron Black, 25, who is based in Christchurch as a rural consultant for New Zealand Agri Brokers is the Aorangi regional finalist. . . 

A2 Synlait agree to extend infant formula supply deal – Sophie Boot

(BusinessDesk) – Dairy marketer A2 Milk and milk processor Synlait Milk have agreed to extend their infant formula supply deal and increase the volume of formula Synlait will supply as the two continue to focus on sales in the lucrative Chinese market.

A2 and Synlait first signed a supply agreement in 2012 to support the milk marketing firm’s plans to launch infant formula sales into China, and inked a new deal in August 2016 providing for increased scale if market demand warranted it.

The companies’ arrangements were for a minimum of five years from 2016, with a rolling three-year term from August this year, but have been extended by two years so will last until at least July 2023. Synlait will increase the volume of infant formula products it is A2’s exclusive supplier for and increase its committed production capacity. . .

Latest report from Land and Water Forum:

The Government has said it will act immediately on some recommendations of the Land and Water Forum. This includes prioritising action in the most “at-risk” catchments.

Advice was sought by Environment Minister David Parker and Agriculture Minister Damien O’Connor on a number of issues on waterways and the primary sector.

“The Government will act on some of the Forum’s recommendations immediately, while the remaining recommendations will be considered in more detail as part of our work programme,” David Parker said. . .

First female arable chair joins Feds national board:

Federated Farmers has a new board member as a result of elections held during last week’s national conference in Wellington.

Karen Williams, who was elected arable chairperson at that industry group’s annual meeting in Timaru in June, was elected to the national board by delegates from Federated Farmers’ 24 provinces. She replaces Guy Wigley, who stepped down after three years as arable leader. . . 

A new chapter in the history of Vidal – one of New Zealand’s oldest wineries:

On June 30 the doors of the Vidal Estate winery and restaurant in Hastings closed for the last time. It was a historic moment for the winery established by pioneer Anthony Vidal in 1905, but the future of Vidal Estate looks bright with the relocation to a new state-of-the-art winery located in the Gimblett Gravels, Hawkes Bay.

To make great wine, the closer to the vineyards the better, said Hugh Crichton, winemaker at Vidal Estate. “It was an exciting time to move our winemaking base out to the Gimblett Gravels for vintage 2018. While it has been immensely satisfying to ferment and age our wines in the historic cellars in Hastings there’s no denying there were challenges. Being closer to our vineyards and working within a winery designed for quality will without a doubt further push us into the premium market”. . . .

Leading New Zealand winery-based hospitality business placed on the market for sale:

One of New Zealand’s biggest winery-based tourism and hospitality operations – encompassing vineyards, a function centre, restaurant, and high-end accommodation – has been placed on the market for sale.

Mahana Estates just west of Nelson generates income from four revenue streams which operate both independently and conjunction with each other.

The Mahana Estates property portfolio encompasses:
• A 21-hectare vineyard planted in pinot noir, pinot gris, Riesling and chardonnay
• A nine hectare sauvignon blanc vineyard in the nearby region of Hope
• A 2,589 square metre four-level winery capable of crushing 500 tonnes of grapes annually and sustained by its own on-site cellaring facility and bottling plant which operates on a gravity feed system to minimize the need for pumps . . 

Aussie grain giant puts mega farm up for sale – Chris Mccullough:

The owner of the 495,000 acre farm is asking $72 to $82 million
for what is one of Australia’s largest arable operations

One of Australia’s biggest arable farms extending to 495,000 acres is up for sale at a price tag of $72 to $82 million.

Western Australian grain giant John Nicoletti decided to retire from grain farming at 64 years old. . .


Rural round-up

July 3, 2018

Moves to revive Ruataniwha dam scheme – Anusha Bradley:

A group of Central Hawke’s Bay businessmen are hoping to resurrect the controversial Ruataniwha Water Storage Scheme after buying the intellectual property from the Hawke’s Bay Regional Council for $100,000.

The regional council spent $14 million, and four years, trying to get the scheme off the ground before the Supreme Court ruled last year it could not flood a large parcel of conservation land.

Now, a company called Water Holdings CHB has bought the intellectual property and rights to the scheme from the regional council’s investment arm.

Water Holdings CHB director Gavin Streeter said owning the assets, which included consents and modelling data, would allow the community to explore options for reviving the scheme. . .

Chance for young farmers and farm workers to have their say:

Farmstrong has developed a new online survey to better understand the pressures facing younger farmers and farm workers, and asking them what works to improve their wellbeing.

The survey is being undertaken in association with NZ Young Farmers, and is open for all under 35 year old farmers and farm workers.

We have developed two surveys, one for women and one for men. Most of the questions in the two surveys are similar, but there are some that are specific to men or women, such as the networks they belong to or the print magazines they read.

The survey is confidential and only takes about 10 minutes to complete.  It is open till 16 July 2018. . . 

Sell-out crowd for 50th FMG Young Farmer of the Year Grand Final in Invercargill:

Finalists competing in the FMG Young Farmer of the Year Grand Final will arrive in Invercargill today.

It’s the 50th anniversary of the iconic agricultural contest, which was first held in Auckland in 1969.

A sell-out crowd of more than 1,000 people will pack ILT Stadium Southland for Saturday’s quiz and awards night. . .

AI and IoT changing the face of NZ dairying:

A fledgling New Zealand agritech company run by a rising Kiwi entrepreneur who has worked for Rocket Lab has raised $8 million, from Silicon Valley venture capital firm Data Collective, which is likely to result in massive changes to the nation’s burgeoning dairy industry.

Waikato company Halter will use the $8 million boost to help farms guide and manage their dairy cows by using IoT and artificial intelligence, sustainably increasing production, saving billions in labour costs and improving environmental compliance and animal welfare. . .

GlobalDairyTrade marks its 10th anniversary:

Ten years ago, Global Dairy Trade held it first online auction on the GDT Events platform with the aim of being the most credible and comprehensive provider of prices across core dairy ingredients.

By the end of June this year, GDT Events had facilitated the trade of more than US$22 billion cumulative value of dairy products to buyers from over 80 countries.

Eric Hansen, Director Global Dairy Trade says the GDT Events auctions re-wrote the rules of engagement for buying and selling dairy commodities. . .

Fonterra welcomes appointment of new Beingmate baby & child food General Manager:
Fonterra welcomes the appointment of Bao Xiufei (Bob) to the role of General Manager of Beingmate Baby & Child Food Co Ltd. The move was announced yesterday and follows a comprehensive search.
Mr Bao joins Beingmate from Royal FrieslandCampina China, where he had a successful career, including most recently, as Friso Chief Sales Officer (CSO) and Consumer Dairy Managing Director. Prior to this, he was the Sales Director at Wyeth Nutrition and held senior roles at PepsiCo and Wahaha Food Group. . .

Horticulture NZ asks growers to renew funding:

Horticulture New Zealand’s Board is asking growers to vote to renew the levy funding that keeps the organisation going, with voting papers going out today. 

A levy rate of 14 cents per $100 of sales of the fruits and vegetables covered in The Commodity Levies (Vegetables and Fruit) Order is the principal funding mechanism to support Horticulture New Zealand’s work for commercial fruit and vegetable growers. The levy expires in May 2019 and voting to renew it, or not, needs to be completed by 13 August 2018.

“The purpose of Horticulture New Zealand is: Enabling, promoting and advocating for growers in New Zealand to achieve the industry goal (a $10 billion industry by 2020),” says Board President Julian Raine. . .

Agriculture 4.0: Technologies at the heart of agtech:

‘Agtech’ has been described as the fourth agricultural revolution – a marriage of data, farming and technological innovation that will further transform the industry and help us to achieve so far unrealised levels of productivity (such as the long-sought 20t/ha wheat yield), efficiency and environmental sustainability.

3D printing

According to Dr Larousse, eight technologies are at the heart of agtech and all have the disruptive power to transform agriculture. Four of them are software, four hardware. One of them is already being practised by Alltech: after its recent purchase of the feed solutions company Keenan, it decided it could provide a more efficient spare parts service by turning to 3D printing, allowing farmers around the world near-instant access to parts from their local dealer. “But it needn’t stop there: we could also ‘print’ food from its constituent ingredients or provide robots with the means to self-repair.” . . 


Rural round-up

May 9, 2018

Natural Fibre Exchange aimed at providing greater efficiency :

In a significant step forward for the wool sector, industry participants have come together to develop and launch an independent online trading platform.

Modelled on the Global Dairy Trade Events (GDT) platform, the Natural Fibre Exchange (NFX) is scheduled to go live with its first trading event on 22 May 2018.

NFX Ltd shareholders Wools of New Zealand Ltd (WNZ) and Alliance Group have teamed with CRA International (CRA), an acknowledged leader in online trading platforms. CRA, which also designed and manages the GDT platform, has developed and will manage the NFX platform. . . 

Short and long-lived gases need separate regulatory baskets – Keith Woodford:

A key issue for New Zealand is how to meet the Paris commitments for greenhouse gas (GHG) emissions. Fundamental to any analysis is the different attributes of long-lived and short-lived gases.  In particular, how should methane be accounted for, and how should it be brought into any emission trading scheme?

Back in 2016, current Commissioner of the Environment Simon Upton raised the importance of placing short-lived gases in a different regulatory ‘basket’ from long-lived gases. Remarkably, our rural leaders appear to have failed to pick up on the importance of this issue.  

More than any other country in the world, NZ’s gross emissions are influenced by methane-producing ruminant animals. No other developed country has a comparable emission profile, with the arguable exception of Uruguay. . . 

Cheaper lab meat to put pressure on farmers by vying with mince and other red meat cuts – Jill Galloway:

New Zealand farmers are in danger of becoming redundant as synthetic meat took consumers away from red meat, says a strategic science expert.

Dr Anna Campbell, managing director of agribusiness consulting company AbacusBio, said synthetic meats would get cheaper and global consumers would choose them because of their light environmental impact and zero animal treatment.

Campbell was a key speaker talking to about 180 farmers and agribusiness people at the AgInnovation conference in Palmerston North on Wednesday.

“At the moment, synthetic meat-makers take some cells, some blood and other things, spin it around, and get mince.  It’s mince for hamburger patties that is spat out. It is expensive at the moment, but the companies will scale it up and make it cheap.”  . . 

Age not wearing this farmer – Peter Burke:

Moyra Bramley was born in 1933, the year Sir Apirana Ngata and Lord Bledisloe inaugurated the Ahuwhenua Trophy to recognise excellence in Maori farming — now Ms Bramley has at least a 50/50 chance of winning that trophy.

Bramley is in the running for her role as chairwoman of the Onuku Maori Lands Trust, one of two finalists in the competition. 

Onuku’s entry in the competition is its 72ha Boundary Road dairy unit is near Lake Rotomahana, 30km south of Rotorua. It is one of four farms run by the trust.  . . 

Looking into using drones differently – Mark Price:

Wanaka beekeeper Daniel Schweizer is investigating a use for drones that is yet to catch on in New Zealand.

He can see potential for “spray drones” that target weeds in difficult-to-get-to places in the high country.

The weeds would include gorse, broom and wilding pines.

“The only options at the moment are a helicopter and a man with a knapsack, and one is $20 an hour and one is $2000 an hour,” he said. . . 

Drought will bring more crop disease scientists warn:

New Zealand’s land-based primary industries need to get ready for more, and more serious, crop disease as climate change causes more and longer droughts, according to new research.

In the journal Australasian Plant Pathology, the authors say that climate change is expected to bring more droughts in many parts of New Zealand, and more droughts are “likely to increase the severity of a wide range of diseases affecting the plant-based productive sectors”.

Scientists from the Bio-Protection Research Centre, Scion, Lincoln University, AUT University, Landcare Research, and the University of Auckland analysed the potential impact of climate-change-induced drought on several commercial plants and their diseases. . . 


Rural round-up

February 8, 2018

NZ needs more water storage in a changing climate:

The importance of water storage in helping provide a reliable supply of water for urban communities, and for food and energy production in a changing climate needs to be recognised, says IrrigationNZ.

“We are seeing the effects of poor future planning for the effects of climate change on water infrastructure overseas, with Cape Town expected to soon run out of water. By ratifying the Paris Agreement in 2016, New Zealand confirmed it will plan for and take action to adapt to the impacts of climate change. Developing more water storage to supply towns, rural communities and for food and energy production is important to protect the future wellbeing of Kiwis,” says IrrigationNZ Chief Executive Andrew Curtis. . . 

Dairy product prices climb for third straight auction amid supply concern – Margreet Dietz:

(BusinessDesk) – Dairy product prices rose at the Global Dairy Trade auction, rising for the third straight time, as buyers stocked up in anticipation of easing output.

The GDT price index climbed 5.9 percent from the previous auction three weeks ago. The average price was US$3,553 a tonne. Some 22,197 tonnes of product was sold, down from 23,319 tonnes three weeks ago.

Whole milk powder rallied 7.6 percent to US$3,226 a tonne. . .

Have your say: Bill aims to deter livestock theft:

Parliament is now seeking public submissions on a bill aimed at deterring livestock rustling (the theft of livestock from farms or property).

Livestock rustling is estimated to cost the farming community over $120 million each year and is a major threat to farming businesses. It also puts the safety of people in isolated, rural areas at risk because rustlers are often armed. . . 

Bay of Plenty Maori partner with Japan’s Imanaka on high-value dairy products – Tina Morrison:

(BusinessDesk) – A group of Maori organisations has partnered with Japanese food company Imanaka to develop a milk processing plant to make high-value niche products in Kawerau.

Kawerau Dairy is a collaboration between 11 Maori Bay of Plenty entities, which own two thirds of the venture, and Imanaka’s Cedenco Dairy unit, which owns the remaining third. They expect the first stage of the $32 million project to begin operations early next year.

The dairy venture is following the model of the Miraka milk company in Taupo which was set up by Maori interests with an overseas food group as a cornerstone shareholder, with power supplied from Maori geothermal assets and much of the milk supply sourced from local Maori farms. . . 

Eugenie Sage has questions to answer on cancelled land sale:

Eugenie Sage has questions to answer on her reasons for turning down the sale of the Sullivan Mine on the West Coast to Bathurst Coal Limited against the advice of overseas investment officials, National Party Energy and Resources Spokesperson Jonathan Young says.

“Ms Sage needs to give an absolute assurance that her views as Conservation Minister and as a Green Party MP have not coloured her statutory role as Minister for Land Information,” Mr Young says.

“Bathurst is a significant investor on the West Coast and Southland, creating jobs and economic activity in each region. . . 

NZ’s first avocado shipment arrives safely in China:

The first airfreighted consignment of fresh New Zealand avocados has arrived safely into China, the Ministry for Primary Industries (MPI) said today.

This follows agreement and signing of a protocol on phytosanitary requirements between New Zealand and China last November, and a technical audit of New Zealand’s regulatory system for exporting avocados by Chinese officials in January.

“Securing export access for our avocados into China has been New Zealand’s top horticulture priority,” says MPI Director-General Martyn Dunne. . .

Wellington to host FMG Young Farmer of the Year regional final:

A former cocktail bartender, an award-winning contract milker and a drone-flying drystock farmer will face off in the Taranaki/Manawatu Regional Final of the FMG Young Farmer of the Year.

Farmers will descend on the nation’s capital for the event on February 24th.

It’s believed to be the first time the regional final has been held in Wellington. . . 

Nominations Open for Silver Fern Farms Co-Op Board Directors:

Nominations are now open for two farmer-elected Board positions on the Silver Fern Farms Co-operative Board.

Directors Rob Hewett and Fiona Hancox retire by rotation at the Company’s 2017 Annual Meeting.

Rob Hewett and Fiona Hancox have advised they will seek re-election.

Nominations close on Monday 5 March 2018 at 5pm. . .. 


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