Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


GlobalDairyTrade: one of a bad news triple-pack

16 July 2014

GlobalDairyTrade: one of a bad news triple-pack

While today’s fall in the GlobalDairyTrade auction platform reflects the most perfect global production season in many years, Federated Farmers anticipates it could lead to downwards revision in Fonterra’s benchmark forecast of $7 per kilogram of Milk Solids (kg/MS).

“The reality is that the world is having a near-perfect production season with Europe and the Americas having a blinder,” says Andrew Hoggard, Federated Farmers Dairy chair.

“The fall in GlobalDairyTrade reflects supply and demand. With good weather, high milk prices and grain availability, global dairy production has ramped up.

“While GDT Prices may have come off there is no milk lake of yesteryear. The world needs to grow a lot more than New Zealand’s annual production every year just to meet demand.

“In the short term, I would recommend dairy farmers start planning for payout forecasts being predicted by the banks of $6 to $6.25 kg/MS. We need to remember $6 kg/MS is the practical breakeven for about twenty percent of the industry with high production costs.

“Be conservative by focussing on debt and prioritising productive investment.

“This volatility in the payout shows that when politicians start mouthing off about new taxes specifically for farmers, without a clear objective of what they could achieve aide from being affordable in one year, they miss the reality that good years usually alternate with bad years.

“In addition to resisting bad policy, Federated Farmers has fully got the backs of our members when it comes to keeping council rates, fees and polices in check.

“What we’re going through with GDT reflects the reality of being an exporter. If New Zealand had Samsung’s global HQ in Dannevirke, I am certain there’d be a gnashing of teeth over its failure to dent Apple or the threat of Microsoft’s resurgent Nokia.

“No matter what you export, dairy, meat or tourists, we’re not being helped by the Kiwi dollar which only amplifies the pain. The dollar ought to be tracking down with the GDT and while it dropped a bit today, the Kiwi dollar does remain overvalued.

“Then again, a high dollar makes for cheap overseas holidays, LCD televisions and puts a lid on petrol prices.

“We are hoping the Reserve Bank is taking note with our interest rates seemingly decided by Auckland’s house market and the Christchurch rebuild. It makes for a triple whammy if the forecast payout heads downhill, a high dollar and the risk of an official cash rate hike.

“The reality is that there will be a belt tightening. It won’t surprise me if Federated Farmers’ New-Season Farm Confidence Survey, being released Sunday, shows a big fall in dairy farmer morale,” Mr Hoggard concluded.


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news