Thursday's Top 10 with NZ Mint: Gender skirmish; Foxconn's size; ANZ exec is 'frank'; fantasies in Spain and Italy; John Cleese

Here's my Top 10 links from around the Internet at 10:00 am today in association with NZ Mint. Bernard Hickey is on vacation and won't be back until early May. Have a great holiday weekend.

I welcome your additions in the comments below or via email to

See all previous Top 10s here.

1. Out of the mouths of babes
An 11-year-old boy from the Netherlands has joined the chorus of people calling for Greece to leave the euro in a surprise entry for the lucrative Wolfson economics prize. The Guardian reports:

Jurre Herman won €100 (NZ$160) in gift vouchers for his devastatingly simple contingency plan for a breakup of the eurozone. Herman suggested Greeks should be forced to swap their euros for drachmas, so the Greek government could pay back its debts with the euros it collects. Any sceptics will surely be convinced by his drawing, which demonstrates a Greek guy, who "does not look happy!!", delivering his euros to the bank.

Herman explains: "All these euros together form a pancake or a pizza (see on top in the picture). Now the Greek government can start to pay back all their debts, everyone who has a debt gets a slice of the pizza."

Showing an impressive understanding of economics, he notes: "The Greek people do not want to exchange their euros for drachmas because they know that this drachma will lose its value dramatically." To tackle this thorny issue, he plans to fine those Greeks hiding their euros or transferring them to other European countries, by doubling the amount of euros they tried to hide.

2. A small skirmish in the gender wars
A smart New York lawyer sued his divorced wife (also a smart New York lawyer) to unstitch their divorce settlement because much of the assets involved were lost by Bernie Madoff (remember him?). Lower courts agreed; but a top New York court didn't. Life can be very tough for some lawyers.

The unanimous decision from the New York Court of Appeals overturned a lower court ruling that had allowed Steven Simkin, a real estate lawyer at a powerful Manhattan firm, to sue his ex-wife, Laura Blank, also a lawyer, to alter the terms of their divorce pact.

The ruling is the second in less than a year in which New York’s highest court has refused to claw money back from divorce agreements.

In June of last year, the court ruled that a woman could keep proceeds from a divorce agreement, even if that money was the ill-gotten gains of a financial fraud perpetrated by her former husband.

“Finality is crucial in a divorce,” said Richard D. Emery, the lawyer for Ms. Blank. “And this ruling shows that you can’t reform a deal just because you want to shift your investment losses to your former spouse. A deal is a deal.” 

3. Making money
April is often a very good month for equities trading.

4. Government debt growing again
Readers who follow our data closely will know that we chart the total of Government securities on offer (D1), and that this ran up very quickly to October 2011. Since then the total gross debt has declined. Well, the up-trend seems to be back. The latest data to March shows that there is now more than $67 billion of debt on issue, the first meaningful rise since October. It was up $1.3 billion over the month of March.

5. Big numbers
I'm sure it's no surprise to hear that Apple is preparing for the iPhone 5. But to give you an idea of the sheer scale of Foxconn - who are probably the only company big enough and capable enough to make the volumes Apple require - they are now hiring.

Foxconn think they will need an extra 18,000 workers to handle expected demand.

It is hard to put that in perspective - they have thirteen factories in China, and about the same number in other countries. No-one knows how many people work there, but the two largest factories in China are reported to employ up to 450,000 in one and 120,000 in another. So on second thoughts, maybe another 18,000 isn't very many more - its only 3% more at those two factories alone.

6. 'I'll be frank here ...'
Time to bust rate myths, ANZ says. A senior Australian ANZ executive lays out the new realities on rates and executive pay.

"That linkage, if anything, only arose in the early 1990s and persisted in a period of extended stability in financial markets," Mr Chronican said.

"And I’ll be frank here. I think the banks let this persist because it was convenient for them."

"It saves having to explain why home rate loans are going up and down when there was an easy scapegoat to be had by always blaming the RBA."

7. Spanish fantasy
Even by the standards of Europe, Spain is a place with very big problems, especially in its real estate sector. I hope you did not rush to buy there during the boom. There are plenty of stories now about the bust. The ABC reports:

Valdeluz, a city that was meant to be home for 30,000 people, has a population of just 2,000.

Dozens of apartment blocks line the deserted streets, some empty, many simply unfinished.

The estates were carved out of farmland in the expectation that tens of thousands of people would buy up and move in.

But as property prices slid and developers went bust, these subdivisions were the first signs of trouble ahead.

Mariu Ucros and her husband Artula migrated from Colombia 12 years ago to avoid an economic downturn there. They bought an apartment in Valdeluz for more than €326,000 (NZ$525,000).

Developers are now trying to offload the rest for half that.

7.a. Spanish reality
Here's a look at how what's going in Spain will affect the rest of the Euro-zone. HT Christov.

8. Italian fantasy
Italy's technocrat prime minister is facing his toughest challenge yet - pushing through a labour overhaul. Italy's labour laws all but guarantee life tenure for older workers but can condemn younger Italians to temporary jobs. The last two attempts to change the law ended with murders. NPR reports:

The real problem of the Italian economy, many analysts say, is a decade of stagnation and the growth of a two-tier labor market.

While older workers have permanent job contracts with generous pensions, the younger generation can only hope to get a temporary contract with no benefits and no security.

The jobless rate among young Italians is more than 30 percent.

Paolo Franco, a 27-year-old economist who left Italy and found employment at Oxford University in England, says unions should stop focusing on Article 18.

"They should focus on young workers with temporary contracts. And please, do not sell us out again as the unions did in the past in order to protect their older members," Franco says. "That's what led to this two-tier system and unacceptable inequality."

For many Italians, Article 18 is an untouchable symbol. The last two attempts to change it ended in tragedy. Ten years ago, the academic behind the reform was shot dead by a leftist terrorist group. Three years earlier, the same thing happened to another academic working on employment reform.

9. Apologies to Christov
I know its not Friday, but it is a short week and a long weekend. I am not known for my sense of humour, but I can search the internet. This one appealed ...

Success is simply a matter of luck. Ask any failure.

and this one did too.

A beautiful young woman gets out of the shower, wraps a towel around her form and tells her husband that he can get in the shower. As he enters the shower, the door bell rings. The wife says she'll get the door and goes downstairs. When she opens the door, she sees her neighbour, Bill, whose mouth opens wide at the sight of her shimmering form. He pulls out two one hundred dollar bills and tells her that they are hers if she will just let the towel fall to her waist. She thinks why not and drops the towel down and takes the money. Bill gasps at the sight and shows her two more hundreds and offers them if she will just let the towel go altogether. She thinks she has come this far so what the heck and drops the towel to the ground. Bill looks for a minute, thanks her and leaves.

When she got back upstairs, her husband had completed his shower and asks her who was at the door. She says just Bill. The husband replies, "Did he say anything about the $400 he owes me?"

10. The last laugh
"It's so simple it's brilliant. But it's not good business."

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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@ #2
The worse divorce I have ever witnessed was between two attorneys in San Diego that were only “engaged”. It took them five years to settle their pre-nuptial “divorce” even though they were never married.  California is a “no-fault” divorce state where this isn’t supposed to happen. These two attorneys were able the churn and game the system and they were never even censured for it. They went through the divorce process longer than they were even dating.

1. Out of the mouths of babes
If an 11 year old, not educated in ecconomics can astound the so called experts with his relatively straight forward solution; what does this say about the competance of the experts?  If they had half a brain between them they would have never got into the mess in the first place. This underscores the fact that basic prudence as per running a house hold or managing ones pocket money should have been sufficient prevent the mess.

On #2....I would suggest the Lawyer despite his qualification lacked negotiation skills,
 allow me to demonstrate.



A   husband and wife were having dinner at a very fine

restaurant when  this absolutely stunning young woman comes over to

their table, gives the  husband a big open mouthed kiss, then says

she'll see him later and walks  away. The wife glares at her husband

and says, "Who the hell was  that?"


"Oh," replies the husband, "she's my mistress."


"Well, that's the last straw," says the wife. "I've had enough, I

want a  divorce!"


"I can understand that," replies her husband, "but  remember, if we

get a divorce it will mean no more shopping trips to Paris, no more

wintering in Barbados, no more summers in Tuscany, no more Jaguar in

the garage and no more yacht club. But the decision is yours."  Just

then, a mutual friend enters the restaurant with a gorgeous babe  on

his arm.


"Who's that woman with Bernard?" asks the  wife.


"That's his mistress," says her husband.


"Ours is prettier," she replies.


"Who's that woman with Bernard?"
Bernard Hickey?

Bernard Whimp ?

Lest we let the facts get in the way of a good media beat up , Foxconn employs well in excess of 400 000 people ....... and as such , the small number of workers who have committed suicide lately  is actually a lower  ratio to the total number of  folks employed there , than the suicide rate of the general population of China ........

Re #5 Big numbers
We live in a time of unimaginable big numbers. Tyler Durden on is showing a simple graph, to see it all in perspective.
The amount of debt that in Citi's estimate has to be "reduced" across the four major developed markets for the world to return to a sustainable level of debt by 2016 - and afterward it just gets more parabolic.
The Lehman crash and Greece appear just as a small blip.

I now seem to be reading articles talking about 100 which case I just dont see how it isnt going to end badly......and last a long decades.........
" approaches the $119.5 trillion mark", mind you its cato so its probably of dubious accuracy...but others are similar numbers.
The US debt is $15trillion, the EU debt seems somewhat comparible and both are Govn spent debt and not liabilities from financial blowups/meltdowns.....then there are CDS's floating around like WW2 mines waiting to sink economies...
It even looks rough for Germany and they are supposed to be one of the better ones,,1518,806772-3,00.html

#4 Gov. debt increase:
Last month's increase is entirely funded by the financial sector. All other categories have gone down. Any suggestions why?

Holy smoking..batman...A.J.....I'm in love and wish I were milk  right now....oh cripes that is getting printed.
might get my wife to do a parody.....nah maybe not ...
 gummy go see that.....divorce ..? she can have the lot , just gimme the milk in the fridge.
The biggest thank you A.J. cheered me up no end.

suppose I'll just go on holiday then,.....Last of the Summer Wine...out there.

Want a job, Ive 20 tonnes of grapes and every bird in the country is wanting a slice. Bangers, nets and still they get in.  Its been an interesting harvest, i wouldn't grow grapes again its just too tough. Have a fun Easter Im stuck on the end of a shotgun.

So which MM chapter you belong to then, eh?


Referring to Mongrel Mob riding shotgun in a bird cage Andrew .J. ....the dream job of many , the descent into depravity for others .

Right about now Mr Petricevic will have Mrs Petricevic scouring through Bridgecorp's investment records to see if the names of any MM Chapters occur

So AJ you caught the plonk bug good and proper...dreams of Italian landscapes and orche coloured farmhouse ruins in stone and old timbers...what a dream....what a flop.....boom goes the bird gun again...frost tonight for sure....heavy rain follows.
It's the middleman who makes the money for no risk....and the taxman....and the council...!

Wally, I made a mistake. I had some land that I thought would be good for grapes but it was hard to get the value out of it, unless I could prove to some tosser from AKL that I could grow grapes and it has potential. I planted 5 acres as  a trail block, hows this, 200k later I realised that horticulture was a one way street, you write out lots of cheques but they hardly ever come back.  So now I have 5 acres of Melot where I should have Shiraz, if I swap to Shiraz Im chasing a bloody rainbow about and will they be worth anything in a couple of years? I asked my rep last week, if I put in 20 acres more would I be able to employe someone full time, she said no double that at least.
 So the industry is stuffed costs are out of control, this year Ive ended up with a great crop which is amazing considering the year but my mates are up hunting and Im stuck shooting birds. This is my last year Ive offered it to a company if they want it they can have them. Otherwise its out they come. I have learnt a lot, high cost, high risk low return industries are for fools, I should have cut my losses 3 years ago. I never borrowed for the vineyard, i did it out of income,this year Ive got 20k+ on the vines so it is worth something, just not my life. Ive a friend in Chile who purchased a vineyard on the coastal Andes, 300k US for 60 hectares including winery.  I may invest a little with him, I could have purchased the vineyard with him invested half what I have done here and been in the same financial position as now, as he is struggling to get good money too. Being blunt, I dont think our wine is good enough, thats over the whole country, i purchased some Taylors Shiraz 09 last nigt at Countdown, $11 down from $24 its from the Clare valley and its bloody good. I dont think many NZ wines could compete, 4 gold medals. so take of the Gst the $2.90 tax (which goes up again next month) Countdowns $2.00 margin, $1 for the bottle $1 for labels and cap and Its hard to see much future for us. Add to that the declining sales and its a blood bath. So what do we do next, well Ive leased my farm and heading to the States for a year and then to Devon where my wife is from. From here on in Im 'getting a life'. My children are growing up, getting decent degree's but then moving offshore to use them. I may sell out of here completely, this is a land for dreamers and Im too old to believe in fairy tales anymore. May come and get a place in the sounds, spent some time there in my past but I like better fishing. I heading your way on the 18th as Im taking my daughter back to uni in ChCh and spending a few days there, will have coffee with Walter on the way.
 If I hadn't sold out to dairy farmers when I did I would be one sad dude.

Thank you for sharing that Andrew. You may not have made all the right moves, but at lease you are still one step ahead of most of the pack eh? My girl is working an a chemical engineering degree so I think she will be okay. I spent an afternoon with Walter back in Feb, and it is a fine way to spend a few hours.(actually you are not spending at all, you are earning :-)

Scafie, I have a daughter doing Material Enineering, not many girls in Engineering so fingers crossed. Next one up has done well with a degree in sound engineering, she has a good ear and done well in London, keeps wanting to give up and be a florist which no doubt she will do soon. Ive 5 daughters so they keep me busy, along with a creative wife.

Fantastic, the more engineers the better. Hard degrees also, be interesting to see some of the louder mouth pieces around here try their hand at it :-P
If you sound engineer wants to pursue her creative side then she could look into the acoustics side of Architecture. Marshall Day come to give lectures on the subject for the Tech Papers at Unitec and they are international, including London. Believe it or not the Christchurch Town Hall is (was?) one of the best in the world acoustically. They tried to do better in Wellington but didn't match it.
About ten years back I was playing around with a muffler I invented. Trying to attenuate the sound while without restricting air flow(ie straight through). It worked okay, but needs more development. Something I might go back to one day if I get the time and resources. Of course a sound engineer might zero in on the solution more rapidly :-)

Aj, all the best with 'the next phase of your life'.
Was talking to my Canadian daughter-in-law recently and she was talking about the differences she finds being part of an 'international family'. Her family are intergenerational arable farmers. Our son-in-law is in the UK financial services industry and we are a family farm sized dairy farmers.  She was saying how much more aware she has become of finance in a global perspective because of the family she has married in to. She saw this as a strength for her and her husband in making decisions and understanding the 'bigger picture' financial indicators. 
But perhaps her most telling statement was on how organised the NZ Dairy Industry is in relations to professional development for it's participants.  She said they have nothing like it in Canada for arable farming participants and having seen it at work here could see young Canadians would benefit from having a similar scheme. They attend discussion groups, are part of the DairyNZ BizGrow group ( and are taking part in the DairyNZ Mark and Measure Course. The Mark and Measure Courses are not about how much grass to grow but offer:

Mark and Measure Business Performance
During this seminar learn how to:

  • Compare and benchmark key performance indicators with other farmers
  • Use the new industry database, DairyBase
  • Understand the principles of leveraging and compounding to grow your net worth
  • Evaluate your farm business performance
  • Understand the financial aspects of your business.

Mark and Measure Strategic Management
During this seminar learn how to:

  • Develop a strategic plan for your life and your business
  • Assess how your farm business fits into your personal life and goals - not the other way around
  • Plan to deliver outcomes that fulfil your personal, business and financial goals.

Take this opportunity to meet and share ideas with other motivated dairy farmers and industry achievers who have applied these principles to their businesses and lives.
That these sort of courses are attracting motivated young farmers under 30yrs old bodes well for our industry. I don't believe that any other industry offers such opportunities for professional upskilling to it's participants. Perhaps this is where other industries in NZ are going wrong.  We need to not only have a culture of ensuring there are career pathways for our young farmers, but that we give them the opportunity to obtain the skills to succeed. I frequently hear from 'outsiders' who have come in to the industry how they are amazed at the collegiality and willingness to share information that they find in the Dairy industry.  We may not be perfect, but we do have a whole lot going for us. ;-)
It is great to see that you appear to harbour no ill feelings towards your daughter choosing to become a florist after having acheived an Engineering degree. True freedom for our kids is about being able to become the people they need to be. Go well, be happy and remember the best asset you have is your family. :-)

Yes education / investment in training is very important, and in NZ industry generally this is not recognised enough as it is geared towards the mighty $ and training 'costs money'.  Rare to find people who understand it's worth, even here.

Good on the Dairy industry I say (question:  is it Fonterra funded?)

Having sad that, beware ... the NZ education system is now based on the NZQA unit standards system ... which is set up to cater for idiots, is a tick-box type of system, and does not foster creativity.    While some education is better than none, beware the quality.

Interested2 - Farmers pay a levy of 3.6c on milk solids, but its not the sole funder.
DairyNZ accesses alternative sources of funding through other public and private institutions and organisations and collaborates with them to implement key research programmes that will deliver positive returns to farmers.
An independent analysis shows that co-investors such as government have contributed more than $2 for every dollar of dairy farmer levy investment.

Thank  you CO, Sim farmer and Andrew J ... I have appreciated, enjoyed and learned from your posts :)

CO - I do love your passion for your industry and fully respect that but sometimes I wonder if you ever look at it objectivley.  How did you get into dairy farm ownership ?  What generation dairy farmer are you - how old are you and of all these young farmers you speak of how many of them are from family farms or closely related to family farms ?  
Dairying is still a pretty simple game about timing of events.  All farmers basically do the same things except some farmers 'the good ones' do it at the right time and are reacting before the enviroment/season/cow changes whether that be good pre-mating nutrition and oestrus detection before planned start of mating or cutting your silage at the right time - its all timing.  I had a DairyNZ scholarship at University and in terms of who and what they wanted for their consulting officers was quite amusing.  They are interested in facilitators of disscussion that look good - in particular attractive females that get farmers along to meetings.  Don't get me wrong I think programmes like the Lincoln Uni Dairy farm are awesome but on the whole anything else that I have attended in the past (yes haven't been a part of it in NZ for a couple of years) was a forum for farmers who thought they were shit hot (mostly guys in the late 50's early 60's) to tell everyone else how good they were and make the little guys feel pretty crap about themselves.  This is not an attack but a question - do you think you are ever part of that smug sector of the industry ?  Again that is not an attack just interested as to how I could feel that all the DairyNZ formerly Dexcel stuff is a load of shit and you can think its just brilliant ?
I went to a dairyNZ disscussion group on a guys farm out of Ashburton who was what I would call a reluctant dairy farmer.  He had a large mixed cropping/sheep farm and had converted I think about 200 ha to dairy.  He was making money but all the Mad Keen Dairying debt drivers wanted him to do was convert the rest of the farm - which he clearly didnt want to do (load up on debt for what ?).  One tosser (who I found out later owned 4 or 5 farms round the place but hadn't milked a cow in ten years) told him he should be 'grateful' to the dairying sector or he would still be bent over dagging romney lambs.  I suspect he probably preferred dagging lambs then dealing with tossers in the dairying sector.   Anyway thats my rant I could be way off the mark just my experience from the perspective of a non-family farm participant in the industry.

Hi Simfarmer.  Thanks for your reply.  MOTH has an Advanced Trade Qualification (don't know if they still call them that these days :-) ) He was a tradesman working in town. While on our OE he decided he wanted to go dairy farming back in NZ so we came back and he started off as a dairy farm worker. What made our route to farm ownership less troubled was probably a combination of things.  Even though we did an OE we had saved a considerable amount of cash to return to - we have always had a good saving ethic. Our first sharemilking job was as 'town milk' farmers.  Town milk was lucrative.  We stayed town milk sharemilking and eventually bought our own town milk farm, which after a few years, we later changed to factory supply. We didn't have family who were able to assist us financially, but we did get what we called our 'lucky break' two years after starting sharemilking, when an old gentleman accepted our tender to lease his dairy farm, while we continued sharemilking on a town milk farm not far away.  He told us that he had had higher offers from well established dairy farmers, but he gave us the chance as he saw us as a young couple trying to get ahead. The lease was run on a purely commercial basis - we got no favours from him - he was a city based owner and had never farmed the farm himself. We have never forgotten that old man's kindness and have tried to apply it to giving/encouraging our sharemilkers the ability to take up opportunities that will enable them to have a 'lucky break'. We also didn't invest all surplus funds in to the farm.  We tried to have our investments split over a different asset classes and no rental housing was not one of them. :-)
The MOTH is someone who makes trails rather than follows them. I think this is a key part of our success.  He takes advice from a wide range of sources, has been very active in the Industry but stays true to himself. Discussion groups always were part of our farming days up north, but the CO made all the difference as to whether or not they added value to our business. Even today there are good discussion groups and not so good ones.  But don't allow yourself to be influenced by those 'shit hot farmers' as being representative of all dairy farmers. There are good, bad and indifferent in every society/ sector.  The key is to surround yourself with like minded people - and they can take time to find. DairyNZ is an asset to the industry, but like any organisation it is only as good as it's people. The young farmers I know are harder on female COs than male COs as they want value to be added to their business and the women have to prove themselves to be respected as knowledgeable.
Do I consider myself part of the 'smug' group? I don't.  We have had opportunities in the past and bank managers keen for us to expand our farming portfolio, but we have never been interested. Collecting farms isn't what we are about - sure we could have missed opportunities to make good capital gains, but family (even if the kids haven't all been living in NZ) is more important to us than having a whole bunch of farms.  Perhaps, too, what sets us apart from some of our peers, is we don't believe that we have to have a farm for each of our children, which is a novel idea in some circles. (Bit of a waste too really in our case as two of them don't live in NZ). We also believe in the KISS principle of farming - all grass, no maize etc. We do get some odd looks when we tell people that our farm is our retirement plan, in that by continuing to employ sharemilkers, when we get to retirement age, we will still be able to drawdown drawings to live off as we have no expectation of having National Super. We have told our only dairy son that we won't be selling it to him either, for the above reason, and so with that knowledge he can make his plans for the future knowing buying the farm is not an option.
I know what you are referring to in regards to 'shit hot' dairy farmers.  That's why I think it is important for young farmers to be prepared to move out from areas where there is intergenerational farming. Here in Southland there aren't too many intergenerational dairy farms so the young chaps and chapesses here are motivated and I would say quite 'driven'. (Not sure that  being 'driven' is necessarily a good thing for family life). I understand that all those in the BizGrow group here are <35 and in various stages of farming. If you are going to make it broadly on your own endeavours today in dairying, it is not enough to be just a good dairy farmer - you have to be smart in the business/strategy side of things as well.
A common denominator with the young sharemilkers I know is that they all work for employers who value the 50/50 sharemilking system and who allow the sharemilkers to take advantage of situations outside of their sharemilking contracts. e.g. rearing well above normal replacement numbers of calves in years when they have particularly high heifer calf numbers. Some have family farming connections, but on those farms they are treated no differently than non family sharemilkers have been. All these folks are <30. Maybe we are lucky to have a dynamic group of young farmers and sharemilker employers in this area. I am aware that this isn't always the case.  I also don't believe it is a good idea to go farming straight from school with the intention of staying farming, unless you are prepared to head off on an OE. It is also never to late to get started if you are prepared to swallow your pride, take a drop in pay and start out on the bottom of the ladder - a good employer is paramount for this though. Some of the successful young farm owners today have come to the industry in their late 20's/early 30's from non-farming backgrounds.
I am upbeat about dairy and make no apologies for it.  However, I have also been around long enough to know there will be some tough times ahead. Our other son who is now domiciled overseas, was a shepherd. The opportunities for him to work up to farm ownership in that industry is negligible without a family farm, compared to dairy. Always good to have a discussion with you. :-)

Hi CO,  There are a few things you have said there that I agree with, and maybe we arn't so far apart in thinking it's just I guess I have seen a few things in the dairying sector and its people that have tarnished my perception of it these days.  I think moving to Southland (was it 10 + years ago ?) was a smart move and if I was to return to NZ I think that would probably be where I went.  Although prices have moved some much even down there that the horse has bolted.  I like the KISS approach to dairying. I have a friend on the West Coast (who the aforementioned shit hot dairy farmers laugh at because he has never expanded) who milks around 120 cows completely 100% on grass with nothing at all brought in and does over 450 kgMS/cow and does the lot himself with no a penny of debt and pays someone to milk when he wants to go away.  Ive run the numbers on his farm and don't think any other place Ive looked at would come close to the surplus he runs.  Thats my idea of farming not world domination just making a good living and having a life.  We had a disscussion group there one day and everyone was horrifyed because he had a pasture surplus and he didn't give a shit.  They all wanted him to run round buying cows and doing other crazy things when he was happy to put a bit of weight on the cows and have excellent animal health and good production and no stress :)  Yet I know for a fact one of the 'shit hot farmers' in the group had his credit card taken off him by the bank the year Westland took some money back from suppliers when they overpaid - who's the better farmer ?
I like your outline of how you got to farm ownership.  You got a good break and you acknowledge that which is great.  Im just not certain their are so many 'breaks' out there these days or maybe Im always looking in the wrong place.  My hope is that you are right in your last sentence and there are some tough times ahead.  That is my only hope :)  I often have a laugh when people tell me 'we were paying 22% interest on this and that' back in the day - what I would give for interest rates of 22% !  I few things would have to change to get to that point.  We plan to stick it out in Auz for at least another five years salt away a few more dollars and hope the shit hits the fan at some stage and we can make a move into things - it might not work out like that but I/we have come to the realisation that its doesn't actually matter that much anymore anyway because we have a really nice life over here so will be quite happy if we don't ever get to come home and buy back in NZ, which is a nice headspace to be in.

An interesting thread which I think highlights the structural changes to what was once percieved to be the opportunities and pathways provided by the NZ dairy industry.
CO it appears you are passionate about the dairy industry and opportunities it has provided you and other like minded, hard working peoples(how often have we heard that phrase); but I would contend that some of your philosophy (eg sharing of ideas, openess etal.) belongs about ten years ago. Obviously self betterment and the fine line with greed is what motivates most people to get into dairy farming; on balance lifestyle is laughable. These motives have led the industry into a fairly precarious position today, and I'm scepticle that we're in a 'golden age' as trumpted by Fonterra directors and some industry anaylists. Sure the world is demanding milk, but some ruthless financial and corporate forces are also aware of this, and they don't see room for the traditional family farm that CO espouses and which has proven to be incredibly bountiful as evidenced by Simfarmers friend on the West Coast.
I'm a landowners son, whos come back in the hope of taking over the family farm. After a university education, I left to work in Australia, and travel the world, working for transnational corporate mining companies, and trading banks at various stages. It was an eye opener, but not what I considered inspiring, given what I saw happening in the world. I don't feel guilty about being a farmers son hoping to inherit, as I've worked hard helping Dad scrape by in the lean eighties, and learning to milk cows from the bottom up; when the opportunity came to leave the dead end sheep and beef sector to be part of the CO-OPERATIVE dairy sector. We saw it as our saviour and a way to ensure intergenerational succession. Given what I see happening now, and reconciling it with what we've been through in the past, I'd say we farmers have been manipulated by misguided free market capitalist ideologues (politicians and business leaders) for no gain, and probably are more deserving of the term 'hayseeds' rather than 'multi disciplinary businessmen'. Enter the corporate farmer and the changing face of land ownership. Along the way we have inflated land values beyond reasonable earning capacity and allowed debt and greed to enslave the industry. Fonterra leadership and the government are in the process of stripping Fonterra of what remains of its co-operative structure, in favor of being a corporate global player, which will inevitably end in tears for smaller scale farmers as evidenced by ample historical examples. Co-operative ownership of the manufacturing and distribution chain are what serve primary producers and I would say NZ best, and we are letting it go for the benefit of a few well connected individuals; who lambest us with false promises and lame insults (via corporate media acolytes eg Brian Gaynor, Fran Wilde et al.).
DairyNZ may have served the dairy industry well, but I wonder who pulls their strings in this day in age. They are catering for the large scale corporate farm more and more, I guess that is where their levy is increasingly coming from. What sort of pathway do these guys provide which make Mark and Measure relevent for people hoping to progress through the industry from similar postion to which you started CO?
I'm scepticle if corporates are as efficient as they think they are, even with exceptional leadership. It's hard to stay motivated milking cows and the rest, while getting up at 4am for ten or twelve days straight, with only the faintest whiff of meaningful prospects; however I'd agree in acknowleging and celebrating the value of sustainable pasture management and utilisation being key to success.

Omnologo: Are you sure Dairy is where you want to be? 'I'm a landowners son, whos come back in the hope of taking over the family farm.' Perhaps that is the greatest difference between you and the young farmers I know down here - none of them here will inherit the family farm, but are determined to reach farm ownership. Whether or not they would live on that farm is another matter.  One chap is a 50/50 owner with a mate, of a farm that neither of them work on - they employ a contract milker. In turn they are separately employed as contract/VOSM milkers on other farms.   I would counsel a young chap like you NOT to go on the family farm, unless it is run with innovative practices, but to go and work for others first to see if you really want to be part of the dairy industry, and to get operational insights from others outside the family farm. You don't sound very positive towards the industry and negativity will only end up eating away at you.
As to lifestyle - yes it can be a bit challenging at times, but on balance, when I look at the life family in the UK working in the financial district of London have, give me dairying any day, even if it means 4am starts! Funny thing is they say the same about dairy, they wouldn't want a bar of dairy, so it's courses for horses. Afterall no one is forcing you to choose it.
Given that you have never been part of the dairy industry other than as a spectator until quite recently, I don't see how you can comment on things like DairyNZ with any credibility.. Times have moved on. The farmers I know here haven't got Uni degrees - maybe a Dip Ag in a couple of cases - so the DairyNZ Mark and Measure Course is valuable to them - read what they are about and you may understand why for a group of people these maybe valuable.   Our sharemilkers employee is studying through AgITO Level 3 last year, Level 4 this year-he is in his 30s and in only his 2nd year of dairying.  Then he has the option of Production Manager studies or going straight in to Ag Business Studies - all through AgIto. Mark and Measure is an interactive seminar format not formal study. Three of the chaps here are looking to take an Auckland Uni IceHouse course, or similar in 1 or 2 years time. They value continuing education.  Dairy Womens Network receives funding via DairyNZ and runs, via their regional groups educational days, for dairy women on anything from basic tractor maintenance, to mastitis treatments,to employment law, to how to get value from lawyers, accountants etc. All  the young farmers I know reimburse the costs of their staff for study units passed. Sure there are some employers in the industry that won't do that, but then why would you want to work for them?
As to Fonterra and DIRA, yes, there is a significant chance that within 5years Fonterra will be smashed if legislation as proposed goes through. Interesting thing is down here farmers say they will fight it as best they can, but if they lose - 'then we will just have to start a co-op again'. I agree with you that a vertically integrated co-op is best not only for farmers but for NZ as a whole from an exporting point of view. We will just have to wait and see how that all plays out.  But if you intend to remain in the industry you better find something positive about it to sustain you through the rocky road ahead.  Otherwise you may as well return to life you have had off farm.

Rod Oram on Radio National with Katherine Ryan , said that world demand for dairy products is growing annually at a rate greater than NZ's current total dairy production ...........
.......... which leads me to think that the golden age of milk & honey has a long way to run yet ..
And as a private investor , I wish the NZX could get on board with this , and seek to  introduce an array of dairy industry firms to the investing public .......

Have you checked out the NZAX, Gummy?
Technology is big and getting bigger on farms now - especially that which relates to environmental measuring and reporting.
50/50 Sharemilking has returns of around 25% ROI under a capable operator. We are 'silent' partners with a young sharemilker.  The money in that bank account outweighs that of ours as farm owners considerably. :-)  There are a young farmers out there who could do with an investment angel for a sharemilking position.  Do your research and homework and you might be pleasantly surprised at the return you could earn.

Thanks for the reminder ;  it is easy to overlook the NZAX ....  I will give it some deep study when I return . Currently I'm having fun investing in stunningly cheap micro-cap stocks here in Oz . If only some of these brilliant little businesses were based in NZ ...
...... the thread above , with you & Simfarmer , is some of the most informative material posted here in many a long year .
Cheers to both of you : Gummy .

Fair points CO, but not compelling enough to pull out the rose tinted glasses yet. I've been home milking cows since 2003, after spending two years learning the ropes in the south island, and a short stint checking out Chile. My father converted our farm in 1998, while I was overseas. The last job we did together before I headed away was shear the sheep, which I enjoyed, but he didn't, as he was in his mid sixties and found it a bit tough. Dairying offered an opportunity to extend his tenure, and allow a son to come home and get into farming. Nothing new about intergenerational succession in farming CO, despite your position. When I was growing up I had visions of getting into farming through shearing, it was a pathway, like sharemilking was, but Rogernomics and all the good stuff that came with it and has set us up today, put paid to that. So I struggled through a tertiary education. As wonderful as AgIto and Mark and Measure are I wouldn't want to rely on that in this day in age, and am grateful for the insight a bit of education and travel has afforded me. Anyway at the time of converting we were positive about the prospects of dairying and belonging to a successful co-operative industry.  I've invested a bit of time into the industry, and in spite of myself am still positive about the low cost grass based potential, despite trying to flag some of the issues I think it faces today.
I believe Fonterra as a co-operative has been undermined since the day it was formed. DIRA is ethically misguided; the whole point of belonging to a co-op is to ensure securing maximum value for milk produced by members, and co-op leadership has not stood up for this premise. Monopolistic abuse, competition, choice, innovation are beside the point, the dairy industry is what it is because of co-operative principles and structure, and the government most recently exemplified by David Carter are morally void in their justification for undermining it, given what it has achieved.
I have no problems for Gummy and Rod to invest in the dairy industry, but it should not be at the expense of Fonterra as a co-operative. I would like to ask Gummy if he was keen to invest in Synlait when it tried to float, or was it Rod Orams compelling market research that swayed him? There's nothing stopping whoever wants to get together to invest in dairy, here or overseas, I'd be happy for you to buy milk from Fonterra at market value.
I wonder how the young sharemilkers down your way are going to get on surviving off the milk price once TAF legislated by DIRA comes into fruition. By the way CO have you noticed any structural changes in the industry you consider significant in the last ten years? No not the price of land relative to it's earning capacity, but the availability of sharemilking jobs. What do you think is driving that?
Not sure about the IceHouse course, but I did a Farm Managers course operated by Rabobank. Take home message, 'get big or get out'. This was preached by an apparent Rhodes Scholar in economics. According to him greenies are communists. I looked up his rock solid economic models he basis his assumptions on, and suprise suprise puro Milton Friedman. Where has he got us?

Fair comment Omnologo.  We share the dividend on shares (production based) with our sharemilker and I know our neighbours do also. It's not necessarily standard practice these days, but we are comfortable with our decision and have no plans to change it.
There has been a drop off in 50/50 jobs, but the banks are responsible for that.  I know one farmer who was told to get rid of the sharemilker and had to go back in to the shed.  Now two years later, he is employing a contract milker .  It all goes in circles.
Haha, we are Rabo customers and have always refused their offers 'to enable you to expand'. Your comments on their Farm Managers course is interesting - thanks. Most of the young chaps here I know have had OEs (2years away or more) and others have worked outside the industry at times.
Over 30+years of dairying we have seen a lot of dairy company scrapping, mergers (friendly and not so friendly) acqusitions etc and the formation of Fonterra. We've had some VERY profitable years and some years where we have struggled to to hold it together financially.  But through it all there is NO other industry we would rather be part of. 

Thanks for the reply CO, I bet you've seen some water flow under the bridge in your 30 years.
Through the good and bad I assume you've grown as a co-operative supplier. I'm nervous that we are going to lose this structure, particularly with 'hot shots' (former directors and close associates as evidenced in articles in latest Farmers Weekly and Dairy News) supporting TAF and reform to co-operative. It seems they support the government legislation and direction if it means evolving Fonterra further into a corporate. I think accepting such direction makes a mockery out of the board and perhaps us as supplying shareholders. This is going to end badly for genuine farmers.
Many aspects of Rabo Farm managers course are highly commendable, eg meeting young farmers from Australia, alot of the coarse content, eg time management, staff management. But I stand by my comments about the Rhodes Scholar facilitator and the flawed neo classical (liberal) economic message he was pushing, no doubt for the benefit of the once co-operative bank.
I have benefited immensly from industry good extension (DairyNZ and predecessors (dairy Insight), but wonder about it's role and agenda, given what I think I see happening in the industry now.

Hi Omnologo and CO, 
Omnologo you sound a little disenfranchised with the whole thing like me except it sounds like you converted the sheep to dairy at about the right time.  My folks have a small sheep/beef property on the coast and a ewe breeding block up Nelson Lakes area BUT the old man has always worked in the mines on the coast 5 on 5 off so cashflow for them has never been a problem. Succession is not an option for me as im not a miner because I had a brain malfuction at 18 and did a B. Ag Sc (hons) at lincoln and not geology :)  I should have gone  and done engineering or geology and gone straight to Auzzie made some money and i'd probably be ready to come back to NZ about now and would have that off farm income option.
When I graduated there were simply no jobs for someone with a B. Ag Sc.  My best mate at uni did the same course and was recognised by everybody as the smartest guy going around (but a nice guy as well).  Shortly before graduation he lost the plot and died under some pretty wierd circumstances im sure the fact he couldn't even get an interview for any of the jobs he applied for was a big part of it.  Basically the choices were be a fert rep (yawn) go on and do a pHD or be a research technition and get paid a pittance and struggle with funding for any of your trial work.  You had more chance If you did a B. Com(ag) because this was at the height of bank lending (early 2000's) even though its commonly recognised that at that time a B Com ag had about as much dairying component as buying an  ice cream at the corner shop - and these were the guys on the ground doing a lot of lending in the late 2000's !
So what did I do ?  I looked at a job as a rep for a small company (the only interview that I could get even with 1st class honours and a DairyNZ scholarship) and thought the 40 K the bullshit and the slim chance of one day earning 70 k ten years down the track was not for me if I ever wanted to be a farmer and as a could shear I went shearing.  I did four years doing the world circuit NZ - UK - Auz - NZ paid off my small student loan in 6 months (bet most of my peers still havent.)  Brought a couple of houses in shearing towns when no-one could get finance in 2008 managed a dairy farm in AUZ for awhile (2500 cows calving all year with 20 staff and atrocious animal health when I took over) tidied it up a bit went contract milking in Tazzy (made a few dollars) and then decided am still way way better off shearing in Auz full time @ $A2.62 a sheep plus 9% super working as much as I want.  AND the contractor has given me a house (he may own a small part of my soul) which you would probably pay over $400 a week for in NZ. 
It all probably worked out this way because I look at the price of farms in NZ and these days just ask myself why bother - even though I love NZ and farming It just isnt worth it.  Ill probably just lease a farm around here in Western Vic and buy, shear and sell wolly sheep as there is good margin in that. 

Greetings to you Simfarmer, hope all is well. Interesting posts for interesting times. You've covered the ground, and I hope that you can get back to the Coast someday as a dairy farmer Your friend you alluded to before seems to be doing well on a smaller farm, and the best thing is supplying a genuine co-operative. I can't believe the path we're heading down, pretty much selling out to the highest bidder (most likely foriegn), considering the value that grass based milk production has delivered and could continue to deliver. The worse thing apart from farmer ignorance and apathy, is the governmet is facilitating this scandle. It's very frustrating.
The way many dairy farmers are getting into high input here, you might be better off with a farm in Australia, that has good access to grain. I know what you mean though, NZ is a nice spot especially the Coast.

To a city slicker like me, it begs the question ... which would you rather look at - the backside of a lamb or the backside of a cow? ... sorry, I couldn't resist :)

If you like money then the cow wins hands down. My farming friends spend there days together, trying to rationalise their irrational behaviour.
 I had this guy shooting for me, all I had to supply was the ammo, which he gobbled up, but it was a fun couple of daysmeeting what turned out be a really nice guy.

Andrew, from The Slog and providing insight into how the failure of our wine industry will be communicated by our leaders:
The thing I am proud to say about a giant like Carlin is that, dead or alive, he stands as the American personification of what The Slog is really about: trying to point out, ridicule, and get rid of people who betray real, responsible liberal democracy with their every deceitful, oxymoronic and slimey distortion of the truth. Towards the end of his life, this man gave a speech at some gathering of Washington journalists. He chose (because he was a highly intelligent stand-up with balls of steel) to stick the ice-pick straight into every heart in the room by showing how ‘media training’ among politicians has helped destroy Anglo-Saxon democracy.
Well worth the time:

a very big thank you for the link to george carlin.... Someone who I had never seen up to this point.
Have to point my sons to some of those so they can lean a bit more about language.

Andrew, I wonder if you (perhaps most of us) are sufferring from what I would call "bullshit overload" - the drain from being constantly lied to by politicians, economists and many others.
Charles Hugh Smith is a bit more polite:
We have all experienced the disorientation and "brain freeze" that stress triggers. It seems these symptoms of stress have become normalized in countries where the authorities keep promoting phony "economic recoveries." The disconnect between what the authorities are claiming and what people are actually experiencing is widening, and that leads to stress.
That is a ripper of a piece from Jeff Sniper HT Zerohedge. Explains very nicely why the housing market is a goner, along with a lot of peoples beliefs.
What is really interesting is the reference to ideology amongst it. There are plenty on these forums that chastise others, labelling them idealistic and criticising those ideals. What these same people fail to realise is that their own beliefs are also just ideology. The linked article explains why I am worried for the ideological position where the majority have laid their faith.
David it is a good top ten candidate, but what I would also like to see you one of you write you own piece on this issue. I am sure the Jeff Snider artcile could be halved and still get the point across.

I am sure the Jeff Snider artcile could be halved and still get the point across.
Yes, Jeff makes very good points but takes forever to do so. I think the essence of the article could be condensed to about 3 paragraphs, and then followed by a fourth taking an overview and putting the article in context of coming from a finance industry insider.


WAR....the west V just one bad Obama election polling result away...fuel prices will double.


Gold crash on Fed tightening and euro salvation looks premature

Until the rising reserve powers of Asia, Russia and the Gulf regain trust in the shattered credibility of the world’s two great fiat currencies - if they ever do - gold is unlikely to crash far or remain in the doldrums for long. `Peak gold’ cements the price floor in any case.

Probably the best posts on a thread I've read here in ages....a special thank you  to Andrew .J.  and Casual Observer .
 Great read worth saving.!!!!!