Fonterra has produced a solid set of results for the first half of the 2016/17 season, with after-tax profit up two percent to $418 million.
Results were broadly in line with market expectations. Prices for Fonterra units had been drifting down on the NZX in the weeks prior to the announcement from a high of $6.39 to $6.20 and lost another five cents over the following two days down to $6.15.
As always, the half-yearly and annual reports from Fonterra are a masterful exercise in communication. It takes effort to scratch beneath the surface to figure out what the numbers are really telling us. Continue reading
The latest dairy auction on 7 March has brought a cool breeze to the dairy outlook. There are signs it could turn even colder at the next auction.
Whole-milk powder (WMP) at this last auction was down 22 percent to US$2785 from the 6 December 2016 high of US$3593. Skim milk powder (SMP) was down by 20 percent compared to December.
The decline has come as a surprise to many farmers and commentators, but the signs were there and had been building. As one derivatives broker said to his clients in the week before the latest auction, it was going to be ‘wretched’. And it was. Continue reading
The a2 Milk Company (A2M) and Synlait have each announced to the market today that A2M has purchased 8.2 percent of Synlait. This was an off-market transaction with Dutch-owned Friesland Campina, previously Synlait’s second largest shareholder after Chinese-owned Bright. The purchase and sale makes strategic sense for all three companies.
A2M is listed on both the New Zealand stock exchange (listed as ATM) and the Australian stock exchange (listed as A2M). As from 2016, Synlait is also dual listed on the two exchanges.
I watch both companies closely, and the buy-in has come as no surprise. Both Synlait and A2M are now increasingly dependent on each other. All of the ‘a2 Platinum’ infant formula that underpins the remarkable success of A2M in Australia and China comes from Synlait. Continue reading
The recent disastrous fires on the Christchurch Port Hills give cause for thought as to the best land use on these slopes. It seems that no-one foresaw a fire event of this magnitude. With different wind patterns it could have been much worse. How should this new knowledge about fires risk influence decisions for the future?
Since European settlement, much of the Christchurch Port Hills has been dominated by pastoral farming. In recent decades, we have also seen substantial plantations of pine trees, together with some revegetation of native species.
The Port Hills are also a huge recreational resource for the urban population of Christchurch. On a fine weekend, there are hundreds of walkers and bikers out there enjoying the outdoors. Paragliding and rock-climbing are also much favoured. A lot of this recreation takes place on public land, but some is also through the agreement and support of farmers.
Paragliding on Mt Cavendish, Christchurch Port Hills (photo credit: Steve Beasley)
Between 13 and 16 February 2017, the Christchurch Port Hills suffered devastating fires unlike anything ever seen there before. As I write this on 21 February, the mopping up operations continue. The fire is now apparently well under control, but hot spots remain in the burnt areas. With hot north-west winds (known locally as ‘norwesters’) in the offing, the danger is not totally over. However, as of 21 February, most hillside residents have been able to return to their homes.
I live at Kennedy’s Bush, one of the focal points of the fire. We watched as the fire went past us on 13 February, only to be threatened again on 15 February. We were evacuated for 72 hours, but were then able to return to our home with our property totally unscathed. As I write this, I can hear the helicopters hard at work again passing overhead with their monsoon buckets, and planes dropping fire-retardant materials.
In this post, I share the chronology of the fire as my wife Annette and I saw it from Kennedy’s Bush. It is largely a pictorial story from the photos we took (click once on each photo to enlarge and show the detail, then use the back button to return to the story), but with a specific focus on the chronology and the contextual background. Continue reading
The proposed 12-nation Trans Pacific Partnership (TPP) is now well and truly dead. The question is where do we go from here?
We are hearing talk from various sources about possibilities for a ‘TPP minus Mr Trump’s USA’. But that too is highly unlikely to happen. Getting Japan, in particular, to agree to something without the USA being involved is wishful thinking. And simply waiting for another four years and hoping the USA might came back into negotiations is also likely to prove wishful. Both major American political parties know that supporting a new version of the TPP is a sure way to lose the next presidential election in 2020. Continue reading
Recently I dipped my toes gently into the debate about how to use water fairly for all New Zealanders. I did so knowing that to say anything about water is like stirring up a nest of angry wasps.
Both environmental and economic development protagonists are typically convinced their cause is ‘noble’. Accordingly, many protagonists organise the ‘facts’ to support their prior-determined position. The term for this is ‘noble cause corruption’’, where ends justify means. Continue reading