Rural

Whither goes our weather today

Tony Chaston — Wed, 08 Sep 2010 01:39:29 +0000

Weather predictions and forecasting is a difficult job in a narrow island like NZ, but it's importance is paramount for farmers managing their business.

Everyone has there own preferred system but because of regional differences, none can be guaranteed. Local knowledge understanding where the weather comes from is also valuable. Technology has also provided the ability to have your own weather station, that in time with records will also help in weather planning.

Certainly farmers are often cynical of the TV weather, that sometimes seems more keen to entertain than worry about accuracy.

Ken Rings predictions do have a following, but probably are used more in getting a feel for future trends than day to day reliability. Tell us if you are a "Moon man" fan, or what other systems do you rely on.

Farmers and fishers are dependent on the weather – more so than most reports The Manawatu Standard. City people complain about the weather, but it might simply mean they have to carry coats and umbrellas. It rarely affects their livelihood. But how accurate are weather predictions? The science comes from the National Institute of Water and Atmospheric Research (Niwa). The less scientific comes from a number of sources, including moon man Ken Ring.

NZ farmers stake their livelihoods on the weather. Farmers at the Feilding stock sale get their weather information from TV news, teletext and National Radio's five-day forecast. "I know a haymaking contractor, and aerial spray and topdressing businesses who phone the 0800 MetService number every morning. They trust it and it seems to work," said a Manawatu farmer.

And television weather forecasts? "These are designed to entertain and create drama and are rarely accurate," President of the Manawatu Astronomical Society Ian Cooper says he is not a Ken Ring believer. "If you study weather as a layperson or as a professional, you will find understanding the complexities of the weather to be one of life's most difficult tasks." He says there is no person or thing on this planet that can predict weather to any real accuracy beyond a week.

Ken Ring believes the Moon is the major player when it comes to weather patterns, just as for tidal patterns."We have an ocean of air above our heads that is gravitationally pulled around by lunar forces in the same way and at the same rate as the ocean of water."Ken Ring says that so far, he believes his predictions for 2010 in the Predict Weather Almanac for NZ have been satisfactory."I said we would get a late summer, a late autumn and a winter that would bring early cold, and late season precipitation."That has all happened. August was always going to be the wettest month for many, especially in the North Island."

Carter urges more loyalty from farmers to meat companies

Tony Chaston — Wed, 08 Sep 2010 02:12:21 +0000

A theme by industry leaders calling for operators to show long term support for farmer owned companies is gaining more voices.

If however farmers are to commit to one company for a year they need to see more transparency in pricing. Nothing annoys farmers more than special deals done with others that reap rewards for those with similar stock. Farmers need transparent pricing to bench mark efficent and profitable companies to follow.

An industry approach to marketing overseas that benefits all farmers, would also help regain the trust long since lost with some meat companies.

With products selling for high levels overseas, but farmers still not making sustainable profits, the industry is at a pivotal stage in moulding it's future. Beef and Lamb NZ are asking for your views on the strategy ahead, share your vision for the meat industry with us as well.

A call for farmers to commit long-term support to a farmer-owned meat company for the sake of the industry has been echoed by Agriculture Minister David Carter, who has promised government help if structural change is needed. During a series of supplier meetings last month Alliance chairman Owen Poole pushed the need for farmers to offer more loyalty, saying a 30 per cent shift in supply would have the same benefits as a medium-sized merger but without any risk, extra costs or need for regulatory intervention.

Mr Carter said he believed part of the sector's problem lay with farmers demanding competition at the farm gate so they felt they got the best deal of the day. More loyalty was needed to help meat companies manage challenges such as currency, he said."There's a responsibility shifting on to farmers to deliver loyalty to the company of their choice on a longer term basis."

The Government would consider getting involved in the consolidation of the beleaguered meat sector if that was requested, he said in The Southland Times. While the Meat Industry Association and Beef + Lamb NZ meat industry review currently underway might lead to a "credible plan", Mr Carter said he believed the industry's structure would become part of that debate, even though it was not in the review's terms of reference.

The joint review might be enough to drive some meat companies into considering a future together and that might necessitate government involvement, he said."You can just sense the industry players realise the seriousness of the situation and that the status quo can not be allowed to continue if we are to have a viable sheep industry."

Similarities in sector programmes

Tony Chaston — Tue, 07 Sep 2010 04:15:08 +0000

There seem to be two areas of concern with this ODT story. Are the old Meat Co-Operative rivalrys reappearing which could affect the outcome of government funded research to the detriment of all in the meat industry?

Or is the wheel being reinvented as to the direction of this Primary Growth Partnership project, and the outcomes and results may be far too lofty?

Time will tell, but if ever there was time for a united industry approach that puts pasts differences aside, its now.

Other parties must get involved in this project, so all in the meat industry can make it work and ensure a profitable survival.

Comparisons have been drawn between the primary growth partnership-funded project between Silver Fern Farms, Landcorp and PGG Wrightson, and the central progeny test work which was started by Alliance Group in 2002 but now run by Beef and Lamb.

Both involve identifying high-performing animals based on traits and using that information to improve the meat productivity of commercial flocks.They will both look at taste and tenderness testing, but Silver Fern farms chief executive Keith Cooper says that is where the similarities end.

That integrated value chain model consists of seven main projects: the market, a database, genetics, processing phenotype, processing improvement, technology transfer and farm productive capacity, with 18 sub-projects underneath those.Further differences, he said, were the focus on determining what consumers want and improving productivity inside the farm gate through use of genetics, new forage and management, to supply what those consumers want.

Mr Cooper said the project was based on the dairy model, where farmers are shown how to grow more grass to produce quality milk. Another obvious difference was that this model involved sheep, cattle and deer, whereas the central progeny test (CPT) involved only sheep.

Natural Dairy help out in Earthquake relief

Tony Chaston — Tue, 07 Sep 2010 03:48:52 +0000

In disasters many different traits of human characters show out, some are positive, some are negative. This earthquake crisis has been no different.

The helping out of neighbours in a crisis is part and parcel of country life. In my farming career neighbours and friends helped out when fire, snow and major rain storms at lambing and shearing, were too much for one man to handle.

This spirit still seems alive today as the randomness of this quake, allows some not as badly hit, to help others in need. The Federated Farmers infrastructure, experienced at coping and organising in disasters, has been valuable in communication and advice.

What may have been missed in the support from the corporate sector was Natural Dairy's $200,000 donation to the earthquake fund. Maybe this foreign owned company has a better understanding of rural NZ's ways, than many thought!

The Hong Kong head office of Natural Dairy (NZ) Holdings Ltd is pledging NZ$200,000 to the relief efforts in earthquake damaged Christchurch and surrounding districts reports Scoop.

The company is seeking advice from New Zealand authorities as to how this aid can be best distributed to the Canterbury community and what form this assistance should take.

Natural Dairy sends its sincere sympathies and best wishes to the people of Canterbury at this difficult time and wants to help in any what it can.

Election of Labor in Australia a mixed bag for A$; widespread risk aversion in currency market

bnzeconomists — Tue, 07 Sep 2010 20:34:07 +0000

By Mike Jones

The NZD/USD has spent most of the past 24 hours consolidating in a relatively tight 0.7190-0.7240 range.

Yesterday’s formation of an Australian government was a mixed bag for the AUD/USD. Certainly, the knee-jerk response to the news Labor will form a minority government was to sell the AUD, given the amended mining tax will be retained.

But the losses were relatively short-lived. Having tested support around 0.9100, the AUD/USD recovered some of its losses with the reduced political uncertainty and yesterday’s marginally more hawkish than expected RBA statement no doubt providing some support (the RBA left rates on hold at 4.5%, as expected). The NZD/USD more or less mirrored yesterday’s movements in the AUD/USD, edging down to around 0.7190, before rebounding.

Overnight, renewed concerns about the plight of Europe’s financial sector triggered a bout of risk aversion. Not only did a Wall Street Journal article question the integrity of July’s European bank stress tests, but German banks were warned an extra €105b in capital may be required under new banking rules. Global equity indices recorded declines of 0.6-1.1% and our risk appetite index (which has a scale of 0-100%) tumbled from 59.5% to 53.6%.

With investors becoming more risk averse, some of the recent NZD enthusiasm was crimped as investors sought out the relative “safe-haven” of currencies like USD, JPY and the CHF. Nevertheless, the heaviest toll was taken on the EUR. Indeed, EUR/USD skidded from above 1.2850 to below 1.2700, propelling NZD/EUR from 0.5620 to 2-month highs around 0.5680.

Looking ahead, near-term focus for the NZD/USD is expected to remain offshore. This is particularly so given Statistics NZ has postponed today’s previously scheduled manufacturing and construction data due to the Christchurch earthquake. Near-term support on NZD/USD is eyed towards 0.7150, with initial resistance at 0.7260.

Majors

Widespread risk aversion was the main theme in currency markets overnight. As a result, “safe-haven” currencies like JPY, CHF and USD mostly strengthened.

Concerns about the health of the Eurozone financial system returned to the fore, eroding investors’ risk appetite and bringing to a halt the recent rally in equity markets and “risk-sensitive” currencies.

Not only did a Wall Street Journal article suggest July’s European bank stress tests understated some banks’ government debt exposures, but the German banking association warned the country’s 10 largest banks may need an extra €105b in capital under new banking rules.

European stock indices slipped 0.6-1.1% and peripheral European credit spreads widened – the Greek-German 10-year bond spread increased 25bps to 940bps, dangerously close to the May high of 965bps. A 2.2%m/m decline in July German factory orders (+0.5% expected) rounded out a rough night for the EUR. Indeed, the EUR/USD finished the night around 1.2700, from above 1.2850 this time yesterday.

With no US data to provide direction, US markets took their lead from across the Atlantic. In line with European stocks, the S&P500 dipped 0.7% and the VIX index (a proxy for risk aversion) jumped from below 21.5% to almost 24%. Heightened risk aversion saw investors’ increase exposures to “safe-haven” currencies like CHF, JPY and the USD, at the expense of CAD, GBP and AUD.

Of note, USD/JPY slipped from 84.20 to fresh 15-year lows around 83.50. Not only did safe-haven demand underpin the JPY, but Bank of Japan Governor Shirakawa largely ruled out the prospect of intervention to stem the JPY’s rise, saying “monetary authorities are unable to control currency rates freely”. The BoJ also offered few signals at yesterday’s policy meeting (where rates were left on hold at 0.1%) that aggressively monetary policy easing was likely anytime soon.

Yesterday’s formation of an Australian minority government was a mixed bag for markets. The Labor party led minority Government will keep the amended mining tax, which is a little negative for the AUD. Offsetting this was the reduced uncertainty of finally knowing who will lead the country. Having briefly slipped below 0.9100 following the announcement of the government’s formation, the AUD/USD recovered some of its losses through the overnight session.

* Mike Jones is part of the BNZ research team.

All its research is available here.