Guy Trafford sees widespread support for the Government's coronavirus handling, and watches the market responses in the food sector which now consider the China focus an advantage

Guy Trafford sees widespread support for the Government's coronavirus handling, and watches the market responses in the food sector which now consider the China focus an advantage
Refrigerated containers

Talking to people and reading responses online, the majority of people are in support of the Government’s decision to effectively close the borders to all but those foolhardy enough to want to do a two-week isolation stint.

However, it was surprising the number who still think it is an over-reaction and the ‘costs’ to jobs and the economy are too great. It is a classic case of “type 1 versus type 2 error”. I.e. The risk of being wrong for taking the conservative route and locking down the country has a better outcome than the risk of being wrong by leaving the borders open for the infection to come in and run rampant and perhaps cause numerous deaths.

It appears the UK government has adopted the other route and has gone for the “herd immunity option” as they perceived the cost to the economy as too great. Although, they do seem to be having second thoughts about this policy especially as the rest of the world seems to have adopted the other route and the UK economy is going to be hit along with all the rest of us.

The New Zealand decision to seemingly follow the Taiwan approach probably provides our best chance of coming through, what has turned into an international disaster for all countries, in reasonable shape. The ability of the government to be able to borrow to mitigate some of the worst impacts (assuming the recent announcement does what we assume it will) is a testament to the current and previous Government’s sane spending policies (with a large dose of 20-20 hindsight).

The other advantage New Zealand has over most other countries is our food production sectors, all of them. Despite the awaking of the Chinese economy even the food sectors are going to experience a downturn as all countries ability to pay are going to be reduced.

China might be up and running but who is in a position to buy their products? Much is being made of China’s poor economic and manufacturing performance over the January and February period, that should have come as no surprise. It is how they perform from March going forward that is of far more interest. This is what is critical to the food sectors performance. If even moderately successful, the food sectors should still provide a functioning economy when tourism has collapsed.

One concern I have is the supposed deal done (pre Covid-19) between China and the USA for China to purchase more agricultural products from the USA. One of the fall-outs of the Chinese governments response to the virus has been their more overt presence and control over society. Currently New Zealand has been benefiting from some of the peoples will to purchase our products.  Whether this will change in the future with a greater government presence in purchasing orders only remains to be seen.

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Currently meat schedules for sheep have remained relatively unchanged for the last couple of weeks and while beef has had a few slips it is still comparable to last seasons prices. Perhaps a little surprising are the prices being paid at saleyards. At the moment the dry conditions are having a greater impact than the threats from Covid-19 as the moment some moisture appears prices do firm. However, venison is showing what potential for falls exist with another -30 cents coming off one processors schedule. With the bulk of venison going into the EU and USA it shows the importance of the market spread including China in the mix.

At the moment, of all the export food sectors, the high value seafoods and fresh horticulture are most at risk with their reliance upon air freight. Given the 30% layoffs by AirNZ and their huge reduction in flights, it maybe that the Government could consider providing some subsidising to them for straight freight flights into China, Japan and wherever the markets exist. It could be a way to assist multiple sectors. At least fuel is cheap at the moment.

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My worry is that China's economy is geared to exports, the West is not going to buying for a little while.

what this is... is simply a deep sharp shock to both supply and demand. Its highly likely in 6 months it will have all but averaged out and normal service will have resumed, global demand for everything may well skyrocket as I'm fairly sure all the panic bought consumables can't possibly be stored that long, much of it will be dumped and replaced. As for the the British, there's no excusing them is there...they have shown their usual callousness toward their citizens and decided doing nothing and holding back capital for when the disruption passes is their way forward, much as they did during WW2 and the post war rationing air raid shelters or protein for any of you peasant scum but lets build lots of bombers and ships instead. Heartless. Here we are far more enlightend and because we can, we have closed up shop for two weeks. The right thing to do. And some one for godsake put Simon Bridges into isolation, permenantly. His complaining yesterday about $25 extra dollars per week going toward beneficiaries was simply sickening. He's so obsessed about money...I get the impression he'd sell his wife for sexual slavery if the price was right...

The 4th Estate - Wow - I'm surprised admin allow such comments re the British approach. Ironically, the electorate recently voted over-overwhelmingly for the economic orientation of the Conservatives instead of the socialist policies of the Labour party. Money does matter and only time will tell if the policy being adopted was better or worse than any other. Looking at the state of play in the rest of Europe I would say all alternatives should be considered.

well this forum is all about debating an issue and I was simply driving to the issues of the day. Regardless, I do agree somewhat with your point that money does matter and we should be calculated in our approach, which I feel so far has been the case. I'd like to see some kind of a digital education strategy emerge shortly though, if the close down of schools happens and attempts at digitally delivered distance learning are made, how are the poverty stricken parts of our community going to access the internet if they struggle to put food on the table ?

It’s about fair debate, not distributing abuse based on your somewhat sporadic thought process. Covid 19 has caught everyone by surprise and the systems we have can’t cope. Don’t rant about the rights and wrongs of coping strategies when you aren’t in a position to comment accurately. Seeing as we seem to have moved on from abusing the Brits, I’ll comment on the online education issue. I can assure you plans are being put in place to address educational needs if schools and universities have to operate without student attendance. Any issues gaining access to this online provision will likely be linked to internet providers. Ironically, the assumed affluent rural population may have more issues than their urban colleagues due to connectivity. These are all unknown factors and things won’t run smoothly. The powers that be are reacting rather than having the luxury to plan in advance, so give people a break - there will always be injustice; it is human nature.

World greed/capitalism than has been supported by means of tax payers socialism (neo-liberalism).. started to realise perhaps? - that putting all eggs into China, can yield a devastating results... just when China economy started to 'cough' - The world will catch the bug.

I would have hoped that the government would have provided more infrastructure /targeted assistance. (must be the first time I've kind of agreed with Bridges). One example would be to pay forestry workers to clean up logging sites or downstream damage, or to maintain native plantings Weeding etc , (too dry to plant). Another would be to provide freezer space to enable more stock kill for drought areas. Eradication of wilding pines , pest control , theres no shortage of work that needs doing , and the workforce is there to do it at the moment. Instead been paid to stay home . Not that I'm saying they shouldnt be helped , if staying at home is the only option.

Indeed. The PGF and its 1 billion trees is an obvious conduit for anything forestry-related. Training for the skills needed for the massive underground infrastructure upgrades needed to stop all NZ cities sh*tting onto their beaches with every modest rain event, is another. But this is only the first tranche of what will be a 1-3 year recovery......

good ideas but in reality the primary sector isn't everyones cup of tea nor is everyone suited to the demands of working in it. The lead time on doing things like redeploying workers from one sector to another could take months and theres probably not a lot of hospitality workers who could easily transition into forestry work, at least not overnight....pouring lattes to thinning wilding pines in foresters boots and lugging a heavy chainsaw...maybe...but highly unlikely. Better to support the underused capacity in place until the storm passes and demand picks up again. BTW I see Seeka has 300 plus vacancies on their books. Looks like they still haven't clawed back staff loyalty that was incinerated after foolishly making so many of their skilled staff redundant post PSA...short term thinking right there.

That's the point , this is a situation where we have skilled forestry workers not working. No or minimal training required to get them into similar work . Certainly not downplaying the skills required , or that our forestry workers have.

Yeah got it. I don't think they will be idle for long. The forestry industry leaders need to wear the dunce cap for the greedy way they treat their staff so poorly. Those forestry gangs are gold and should be treated accordingly, not dumped at the first sight of an oversupply. Pretty soon theres going to be a whiplash demand effect as everyone scrambles to replace all the kraft pulp stocks being depleted to produce toilet paper that is being panic bought in the supermarkets, will the logging crews be on hand or somewhere else?

China might be up and running, but it is hard to be sure.

Xi Jinping declared the crisis over in China and there have been virtually no new Chinese cases reported since his proclamation. Same has occurred in North Korea, where there have been no new cases reported.

Potentially Xi has declared that no new cases shall be allowed to be reported in China.

A conservative estimate of a side benefit, if it can be called that, from the spread of the virus is that carbon emissions have likely declined 10% as a result of nationwide lockdowns. Yet populaces have been able to purchase the necessities. This demonstrates that in ' normal' times it is the suppliers of discretionary items/activities such as air travel and tourism who make the most expendable contribution to global warming. This is where governments should be focusing their attention as they attempt to bring about reductions.