Here are the key things you need to know before you leave work today.
MORTGAGE APPROVALS FLAT
The data last week shows that volumes of approvals are falling although the value is reasonably steady.
RETAIL SECTOR FLAT
Total retail spending using electronic cards was unchanged in March, Statistics NZ said today. This is a key and current measure of retail activity.
RENEWED COMMITMENT TO IRRIGATION
The Government is now saying its Crown Irrigation Ltd seed funder could now support projects that supply up to 420,000 hectares of new irrigated land, over and above what we currently have. That's an area equal to about half the size of the province of Taranaki. Drought mitigation is a goal. Their first $6.5 million has been disbursed today to Canterbury's Central Plains Water project.
MINERS MAKE THEIR CASE
The local mining lobby group have detailed our dependence of mining. “Our cars and homes, our cell phones and our food, even the green energy we increasingly want to produce all depend to some or a great extent on mining,” they said today when releasing a review.
EXTRA LARGE TOPPINGS
China loves pizza. Pizzas needs mozzarella. Fonterra is raising its manufacturing output of pizza topping cheese to 50,000 tonnes per year, although only enough for about 350 million pizzas. Next year, pizza demand in China will grow by 20%. Milk powders may be today's favourite, but cheese is gaining fast it seems.
DUTCH TAKEOVER?
There has always been a strong and noticeable Dutch thread in the New Zealand dairy industry and it got a little stronger today by the appointment of Henk Bles by Fonterra to the newly-created role of Managing Director International Farming Ventures.
NZ TAX POLICIES BENCHMARKED
Our tax policies are seen as relatively straight forward, consistent and predictable compared to other countries in the region, according to Deloitte’s 2014 Asia Pacific Tax Complexity Survey Report.
WHOLESALE RATES
Swap rates moved even more flatter today. The one year rates rose 1 bps, rates for 2 to 5 years fell one and two bps. The 90 day bank bill rates continued its climb and hit 3.20%, the first time it has been this high since February 2011. When it reaches 3.32% it will be at a five year high, so not far to go to that milestone.
OUR CURRENCY
The NZ dollar has just suddenly pushed on up through 87 USc, its highest level since 2011. At time of publication, we are not sure what pushed it up yet. We are also at 93.0 AUc, and the TWI is at 80.5.
6 Comments
New Zealand's milk production growth is likely to be constrained over the next five years as the ability to change land use will become more difficult and expensive, rural lending specialist Rabobank said.
The bank said the future growth of the New Zealand dairy industry would partly depend on how efficiently producers adapted their production systems to meet heightened environmental controls.
http://www.nzherald.co.nz/agriculture/news/article.cfm?c_id=16&objectid…
Remember the prospect of growth is a vital part of property valuation. It sounds like this growth prospect will be missing for several years.
refer above
New Zealand farmers were the "best" at converting profits from exported milk products into higher land prices by investng in more farms, contributing to raising their cost base.
http://www.stuff.co.nz/business/farming/dairy/9930826/Expensive-brand-beats-expensive-land
So in history you have not invested in brand development and under-invested in research and development to produce patented products with very high value. You have got the milk, the exports market is dominated by China and my worry is that is putting a big bet on China producing a strong rate of economic growth which we know won't just keep on going, and we won't catch the brand value because that's not in our DNA."
The good news for farmers is that emerging markets are taking up the slack as mature markets move away from butterfat.
Less endearing is Fonterra's food integrity scares which had worried markets and New Zealand had to deliver on its "brand NZ" reputation which would be challenging, he said. Nor could it rest on its clean, green reputation, as other countries such as Chile and Ireland could also lay claim to it.
On topic,
Never, ever buy Russian cheese, even if the big cheese Putin says so.
The Friday funny, but true.
http://www.telegraph.co.uk/news/worldnews/europe/russia/10744036/Russia…
Maybe Fonterror ain't so bad after all.
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