Rural round-up

15/08/2015

Central Plains Water irrigation scheme opens in Canterbury:

Primary Industries Minister Nathan Guy has welcomed the official opening of Stage 1 of the Central Plains Water irrigation scheme in Canterbury today, which has the potential to create more than $1 billion in new economic activity.

The Central Plains Water Enhancement Scheme, when completed, will irrigate 60,000 hectares of dairy, arable, horticulture and stock finishing land between the Rakaia and Waimakariri Rivers.

“This is an exciting day for the Canterbury region, given that farmers and growers have suffered through a severe drought this year. This shows the clear need for this kind of water storage project. . . 

INZ applauds Central Plains Water for providing farmers reliable water for diversification and efficiency:

“Today marks a big step for irrigation infrastructure in New Zealand. Central Plains Water will help sustain Canterbury,” says Nicky Hyslop, Chair of IrrigationNZ on the official opening of New Zealand’s largest irrigation scheme for some years, by the Prime Minister John Key.

Mrs Hyslop attended the opening with IrrigationNZ CEO Andrew Curtis.

“Access to reliable water is particularly important at the moment during a dairy downturn as it will allow farmers to diversify and weather the storm,” says Mrs Hyslop. . . 

Fonterra cuts back GDT whole milk powder by a third over the next year – Fiona Rotherham:

(BusinessDesk) – Fonterra Cooperative Group, the world’s largest dairy exporter, is reducing by a third the amount of whole milk powder, the key commodity export ingredient, it sells on the GlobalDairyTrade platform over the next 12 months due to persistent low prices.

The Auckland-based cooperative’s forecast cut the offer volumes over the next 12 months for its total New Zealand products by a further 56,045 metric tonnes, following a 62,930 metric tonne decrease in the past three months, it said in a statement.

Fonterra managing director global ingredients Kelvin Wickham said the bulk of that is whole milk powder, and milk collected will be shifted from whole milk powder production into other value-add parts of the business that will achieve a higher margin. . . 

Fonterra ratings on review at S&P in face of high debt levels, low global prices – Jonathan Underhill:

(BusinessDesk) – Fonterra Cooperative Group’s credit ratings were put on CreditWatch with negative implications by Standard & Poor’s, which said there was a risk of weakness in the dairy exporter’s financial metrics given its high debt levels at a low point in the global price cycle.

The Auckland-based company has ‘A’ long-term and ‘A-1’ short-term ratings with S&P, which were put on CreditWatch following its announcement of a lower forecast milk price due to weak demand and surplus supply in the global dairy market.

“This ongoing weakness in the global dairy market has occurred when Fonterra’s debt is at very high levels due to a large acquisition and peak capital expenditure, placing downward pressure on Fonterra’s key financial metrics,” said Standard & Poor’s credit analyst Brenda Wardlaw. . . 

Fonterra – Anchor extends portfolio with additional Kids’ Milk range in China:

Our China Brands business recently hit another milestone with the launch of the ultra-premium Anchor Kids’ Golden Milk.

The new milk has 3.6g/100ml protein, a high calcium content and no added sweeteners or additives other than vitamins. 

Business Development Director of China Brands Manoj Namboodiri said the team designed and launched Anchor Kids’ Golden Milk to meet the growing demand from Chinese parents for ultra-premium quality, nutritious and unsweetened kids’ milk.  . . 

Misery peddlers are milking a crisis – Mike Hosking:

Yes, these are tough times for dairy farmers but we should trust those with the industry’s interests at heart.

My plea this morning is that we give our dairy farmers a break, that we cut them some slack and start to get on board with what they already know. Because, let’s be frank, they know dairy a lot better than all the others who, from the comfort of their urban existence, are lining up to tell us the world is ending.

Just to be clear, this will be a tough season. The return of $3.85 is not flash and it’s a mile away from $8.40.

Yes, most farmers won’t make a profit. Yes, some farmers might not make it out the other side, especially those who have gone in late and borrowed big to do so. But what I admire so much about the farming community is they’re realists. . . 

Is organic farming making climate change worse? Demand for ‘sustainable’ food has increased greenhouse gas emissions – Richard Gray:

It has a reputation for being better for us and the environment, but new research suggests organic food may actually be harming the planet.

Scientists have found that rather than reducing the amount of greenhouse gas emissions released, organic farming may actually be increasing them.

They found the shift to large scale organic farming in order to meet growing demand for organic products in shops has led to an increase in emissions for each acre of land. . .

Fit farmers with Farmstrong – Anna Russell:

The Mental Health Foundation of New Zealand and FMG Insurance, along with support from NZX-Agri, launched the initiative Farmstrong. It is an initiative designed to give farmers the skills and resources to live well, farm well, and get the most out of life.

The three areas they focus on are applicable in any work environment, and particularly can help during times of transformation and change:

Time Out – taking regular breaks is an important part of remaining fresh and positive in day-to-day work. So is getting a good night sleep. . . 

Jordy Nelson’s offseason activity? Farming – Anna Katherine Clemmons:

FOR MANY NFL PROS, the offseason means private islands and poolside cabanas. Not for Jordy Nelson. The 30-year-old, who set the Packers’ single-season receiving record last year with 1,519 yards, swaps his cleats for work boots on his family’s 4,000-acre Kansas farm. For five or six weeks each year, he drives a combine and cuts wheat, sometimes for 12 hours a day, or rounds up some of the 1,000-cow herd. “Working cattle is my favorite farm duty,” he says. “It’s interactive, and you’re on your feet all day.” . . .

 


IMF, S&P give NZ tick

15/05/2013

The International Monetary Fund has confirmed that the Government’s economic plan strikes the right balance between supporting growth and limiting public debt, Finance Minister Bill English says.

In its final staff report issued this morning, the IMF endorses New Zealand’s balanced and pragmatic economic management.

“Coming out the day before the Budget, this is a strong vote of confidence in the Government’s programme over the past four years,” Mr English says.

“It follows a string of encouraging economic figures, which shows the economy growing at 3 per cent last year, an extra 50,000 jobs over the past two years, falling unemployment and healthy consumer and business confidence.”

In particular, the IMF notes the New Zealand economy appears to have strengthened in the last few months of 2012, with subdued inflation and fiscal policy that strikes the right balance between supporting growth and limiting public debt growth.

The IMF says: “The benefits of the plan are many. First, it withdraws fiscal stimulus at the right time by making room for the expected increases in private sector and earthquake-related reconstruction spending.

“Second, it has improved the macroeconomic policy mix by reducing pressure on monetary policy.

“Third, it creates fiscal space to help the country deal with aging and health care costs that are expected to increase over the long-term, and to cope with any negative shocks that may cause a sharp reduction in domestic economic activity or potential liabilities associated with the banking sector.

“Last, it could help raise national savings, reduce the current account deficit, and limit the increase in foreign liabilities.”

The IMF also notes the New Zealand banks remain sound.

However, it says New Zealand’s longstanding external liabilities remain a risk, reflecting historically low household savings rates.

“The Government has acknowledged this as New Zealand’s largest vulnerability and we have a sound, long-term plan to help turn that around,” Mr English says.

“Our economic programme includes a large number of measures aimed at improving the competitiveness of businesses. They include increasing exports and innovation, improving skills and infrastructure, deepening the capital markets and sustainably developing our natural resources.

“We are making progress in all of these areas.”

We can look across the Tasman to see what a Labor government has accomplished there. We could expect the same, or worse performance from a Labour-led one here.

By contrast National has done exactly what it said it would do – protected people from the worst effects of the global financial turmoil, maintained or enhanced public services while reducing the costs and put us on track to return to surplus in 2014/15.

The IMF report isn’t he only one which gives National’s policies a tick.

Standards and Poors have put New Zealand in its top 10 of least risky countries.

New Zealand, and Australia, have entered credit rating agency Standard & Poor’s list of the world’s top 10 least risky countries.

The list, included in S&P Capital IQ’s latest quarterly Global Sovereign Debt Credit Risk Report, has New Zealand ninth, sandwiched between Australia and Austria. The report focuses on changes in the risk profile of sovereign debt issuers, with the intention of identifying key trends and drivers of change.

New Zealand and Australia are new entrants in the top 10 least risky list replacing Britain and the Netherlands. . .

Lower risk helps takes pressure of interest rates which is good for the economy.

The IMF report is here.


Fiscal strength offsets private debt

04/08/2012

Finance Minister Bill English has welcomed Standard and Poors’ reaffirmation of New Zealand’s foreign currency AA rating with a stable outlook.

“This is welcome news and confirms New Zealand is heading in the right direction – and it is better placed than many other countries,” Finance Minister Bill English says.

“Standard & Poor’s notes that New Zealand has favourable prospects for sustained growth while there remains strong demand for agricultural exports.”

New Zealand is one of only nine countries with the highest possible Aaa rating and a stable outlook with Moody’s, and it has an AA rating with Fitch.

In its report today, Standard & Poor’s notes the Government is making progress in getting its own deficits and debt under control, and that it is on track for a modest fiscal surplus in the 2014/15 year.

“However, as the ratings agency points out, New Zealand’s high level of private sector external debt remains its largest vulnerability.

“The Government is aware of this longstanding problem and that is why it is focused on building a more productive and competitive economy based on more savings and productive investment.

“New Zealand’s household savings are positive for the first time since 2000 and household debt has fallen. However, private sector debt levels remain high and we will continue to encourage savings, business investment and growth through our economic programme,” Mr English says.

The turn around in private savings while small is significant given how long New Zealanders have been spending more than they’ve been saving.

People have got the message that was second-nature to my parents’ generation – too much debt is dangerous; if you can’t afford something you save for it until you can.

But personal debt is still far higher than is safe at any time let along now when the global economic situation is so uncertain.


Bill’s recipe rewarded by rating revision

28/05/2009

Did Bill English get the Budget recpie right?

If you judge it by the reaction of Standard and Poors, he did.

RadioNZ reports:

International credit ratings agency Standard and Poor’s has revised its outlook on New Zealand from negative to stable and affirmed its AA+ rating, after what termed a “sound” Budget.

Does it matter?

A down grade would have resulted in higher interest rates which would have at best slowed the recovery.


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