Rural round-up


Farming app in running for award – Phillipa Webb:

A Manawatu-developed smartphone app could see dairy farmers spending more time on smartphones and less time in paddocks.

The Grass2Milk app developed by the OneFarm Centre of Excellence in Farm Business Management – a joint venture by Massey and Lincoln universities – was shortlisted in the environmental category of the 2014 World Summit Award mobile competition.

Massey University agri-business student Hamish Hammond helped to test the app, which allowed farmers to see whether herds were fed enough to reach daily milk and body condition targets to plan feed allocations for the day.

“Most farmers would be really intuitive when it comes to feeding, but they could use [the app] as a gauge.” . . .

China deal factor in Fonterra’s lower credit rating – Sally Rae:

Fonterra’s credit rating has taken a hit following the announcement of its proposed partnership with a Chinese infant food manufacturer.

Credit rating agency Standard and Poor’s has lowered the dairy co-operative’s long-term rating from A+ to A and affirmed its short-term rating of A-1.

Last week, Fonterra said it was forming a global partnership with Beingmate to help meet China’s growing demand for infant formula.

Fonterra’s proposed sizable shareholding in a commercial company operating in China indicated a financial risk appetite that was ”more aggressive” than Standard and Poor’s had factored into the previous rating, credit analyst Brenda Wardlaw said in a statement. . . .

Teasing out the beta-casein evidence – Keith Woodford:

In last week’s column I advocated that the mainstream dairy industry should convert New Zealand herds away from the production of A1 beta-casein. To not do so creates unnecessary long term risk to the industry. However, the mainstream industry remains locked into a defensive position.

In this article I will therefore briefly review some of the major strands of health evidence. I cannot cover it all – it took me a whole book to do so back in 2007. Since then, there has been a lot more evidence forthcoming.

In assessing the evidence, it is helpful to recognise that A1 beta-casein is the consequence of a historical mutation. Goats, sheep camels, buffalo, Asian cattle and humans produce beta-casein that is totally of the A2 type. It is only cows of European ancestry which produce A1 beta-casein. . .

Allied Farmers back in black as livestock unit grows – Paul McBeth:

(BusinessDesk) – Allied Farmers, which is rebuilding from a disastrous takeover of the Hanover and United Finance loan books, returned to profit as its core livestock unit lifted income with gains in Taranaki and Waikato.

The Hawera-based company reported a profit of $1.03 million, or 1.03 cents per share, in the 12 months ended June 30, turning around a loss of $1.12 million, or 2.94 cents, a year earlier, it said in a statement. Revenue in the slimmed down entity shrank 38 percent to $16.9 million.

“The focus for the coming year will be to continue to grow the livestock business and to leverage off the client relationships and trust that exists with those clients to provide value for money services,” chairman Garry Bluett said. “The effect of the reduced dairy payout is likely to have some uncertain impact on dairy livestock sales going forward and the continuing high dollar is already having some impact on meat exports at the early stage of this season.” . . .

 New Zealand firm creates health focused flavoured milk; export potential:

Christchurch-based New Zealand Dairy Brands believes it is a world leader in its sector in the production of health products with the launch of its highly innovative Go Milk flavoured milks.

The range has no added sugar, a low GI (glycaemic loading) and is low fat, making it suitable for diabetics and excellent in the fight against obesity. The product was a recent finalist in the NZIFST awards in the product innovation category.

Just released on New World and Pak n Save supermarket shelves in New Zealand, a trial export shipment of Go Milk has already been sent to China and the product is destined for the Australian market also. . . .

 Compass points new crop direction – Gregor Heard:

RESEARCHERS are excited about the prospects of a new barley variety set to be commercialised next year.

Speaking at a trial walk at last week’s Grains Research and Development Corporation (GRDC) grower update in Horsham, Birchip Cropping Group research agronomist Simon Craig said the Compass variety, developed by the University of Adelaide research team and commercialised by Seednet, showed outstanding promise.

“It looks to have a very good fit right across a range of low to medium rainfall zones.” . . .

The sky isn’t falling


Standard and Poor’s decision to downgrade the USA from AAA to AA+ has led to falls on share markets around the world.

But the sky isn’t falling.

Headlines have concentrated on prices which have dropped, but have ignored yields which generally seem to be reasonably healthy.

Falling prices are only a  real problem if you have to sell or are heavily leveraged. For everyone else they’re only a paper problem. With many investments, time is a friend and the price of most shares which have gone down will come up again.

I was a trustee of an organisation that had nearly $200m invested. Our advisors regularly provided us with graphs comparing investments which showed that over the long term, good shares provided the best return.

The trick is to know which are the good ones.

The downgrading is a government problem rather than a business one but that and the consequent share market falls will make businesses and those who bank them more risk averse. That in turn will slow down economic growth.

The volatility is unwelcome but New Zealand is well-placed to weather it:

“The downgrade of the US shows we continue to live in unusually risky and uncertain global environments,” Mr Key said at his post-cabinet press conference.

“The Government has focused on debt and managing spending, this approach has been in all three of our budgets and recent events are further evidence we have moved in the right direction.”

Mr Key said he didn’t think Treasury’s economic growth projections were going to be proved wrong because there were several factors favouring New Zealand, like the Christchurch rebuild and the Rugby World Cup.

He said he was “more optimistic” about the future than those who feared a deepening international recession.

Companies were in a better position now than they had been in the past.

And it’s not just the PM who isn’t pessimistic:

Market commentator Arthur Lim said the international uncertainty in recent years, with a seemingly endless stream of economic woes, had caused “a lot of retail investors simply to call it quits”, yesterday.

“The only way to describe it is panic selling by retail investors,” Lim said.

But the sharp fall was on light volumes. “If the market was falling precipitously on big volume then we really have something to worry about.”

Lim said New Zealand was well placed to capitalise on the global economic uncertainty. The economy was in reasonable shape and much more aligned with the fortunes of the growth economies of Asia, and [there would be] the cushioning effect of the Christchurch rebuild.

Key trading partner China was among other Asian countries looking to diversify their currency and country exposures away from the US.

“And New Zealand is a seen as a very attractive country to put some of their money in,” Lim said.

New Zealand had forged a great symbiotic relationship with China, which was now our second biggest trading partner, supplying agricultural-based products and services in return for consumer goods from televisions to shoes.

We can be grateful to this, and the previous government, for pursuing new trading opporutnities.  Australia is our biggest trading partner and China comes next. Both are better placed to withstand cool eocnomic winds than our traditional partners in Britain and Europe.

Commodity prices are expected to fall but they have been very high, and that’s not all bad news. A fall in the price of oil has already knocked three cents off the price of fuel here.

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