Willy Leferink points out that "every $1 in the milk payout we cannot make removes $300 from the pocket of every man, women and child in New Zealand"

Willy Leferink points out that "every $1 in the milk payout we cannot make removes $300 from the pocket of every man, women and child in New Zealand"

By Willy Leferink*

The former U.S president, Ronald Reagan, was well known for his turn of phrase.

At one farmer meeting Reagan delivered this advice on politicians peddling a plan: “the 10 most dangerous words in the English language are, 'Hi, I'm from the Government, and I'm here to help''."

I was reminded of what Reagan said when I caught Parliament a few weeks ago just as the MP Andrew Little let rip:

“This is a Government obsessed with mucking around in the same puddle of water we have been in, frankly, for far too long - more primary production, more mining, more commodity goods to be sold at commodity prices. The challenge for this country is to make the shift in our economy into totally new productive enterprises and into the new economy…”

It’s some puddle when ‘primary production’ will be worth $36 bln this 2013/14 season!

It is even more of a puddle when dairying has helped New Zealand to a record trade surplus in January, or, as Statistics NZ’s Chris Pike put it, “dairy export prices helped lift the terms of trade to their highest level since 1973."

It must definitely be a puddle when Fonterra’s 35 cent upwards revision in its payout forecast could put an additional $100 into the pocket of every man, woman and child in New Zealand. I say ‘could’ because no should be counting our milksolids sitting at the table, there’s time enough for counting when the season’s done. 

It’s the same kind of ‘puddle’ that saw this 1988 misstep from the late Prime Minister, David Lange: “Farming is a sunset industry and manufacturing and tourism will take its place.”

Some 26-years later and it seems, from Mr Little’s words and Fish & Game’s survey, that some still cling to this notion despite evidence to the contrary.

New Zealand is particularly good at producing food and fibre and this reason is why I agree with what Mr Little said next, albeit, I am taking his words out of context: “the economy that is going to generate real wealth. It is the economy that is going to enable incomes to be lifted and the economy that is actually going to see an improvement in productivity, whether it is labour productivity or capital productivity, or multifactor productivity.”

Our primary industries have all of those qualities in spades.

Given New Zealand’s two fastest growing regions in the last quarter of 2013 were Northland and the West Coast, while the two weakest were Wellington and Auckland, that primary dividend is acting like a super charger to our provincial economies.

If you want New Zealand’s answer to Perth it is called Ashburton.

I suspect the economic ‘driver’ is where Mr Little and I part company.  You see he was outlining this vision for this unspecified ‘new economy’ during a debate on a Taxation Bill.

Personally, I’ve never heard of an economy taxing its way to greatness but I have sure heard of economies taxed into oblivion. 

In agriculture and mining New Zealand is proving to be the new lucky country.  While people don’t need a new car every year, everyone needs to eat and the fuel to get around.

Doing what we do best but better and expanding its breadth sounds like a good economic strategy.  As is ‘just add water’ by way of water storage.

While media (and some politicians) look at bags of milk powder and think it’s the same as you’d buy from the supermarket, it isn’t.

New Zealand is a food ingredients maker so if you want value-add, you change the protein composition or even add other ingredients to a specification set by your customer.  What’s the definition of value-add again?

Instead of throwing rocks at us from the side lines, we need environmentalists, politicians and scientists to work with us for a better way. Instead of so much negative energy it is about harnessing that energy for solutions because it matters.

You see every $1 in the milk payout we cannot make removes $300 from the pocket of every man, women and child in New Zealand. Going the other way seems better. 

New Zealand is a land of milk and honey because to get milk you need pollinated pasture.  It also fits well because milk and honey are at record highs right now.

It fits in another regard because being the world’s best land of milk and honey is a more inspiring strategy for New Zealand than tilting at undefined ‘new’ economic windmills.

----------------------------------------------------------------------

Willy Leferink is Federated Farmers Dairy Chairperson.

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?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

61 Comments

Terrible article....
Wouldn't it be nice if the dairy industry fully absorbed the environmental costs associated with dairying? Perhaps trim the payout by 1% and put that money into cleaning up after itself.

Do you not consume any imported products... interested?
 

Sorry "Interested" but how does reducing the money spent on such activities by a factor of 5, improve things??

More than happy to fully absorb the cost..and pass it on to consumers.  They don't mind high cost of milk do they?  Perhaps then farming assets wold return more that 1.2% and I'd get at least minimum wage in my paycheck.

...if you own the land then you are doing a damn site better than 1.2%.  You forget to factor in the tax free cap gains you are getting -  giving you a very nice nest egg when you cash out. Farming has always been an activity with two incomes, the trading income and the cap gain.
With respect to passing costs onto consumers, you are doing this already by not having to factor in the downstream costs of the mess you are making of our environment. 
 

most of it is cap gain for land farmers, however when you take a look at the period (usually 40+years) and factoring in the compounding effect over that time, and the amount of continual reinvestment, the capital gain is quite small.    Many farms it is very low, and the only real "cash cow" is the extra long hours put into improvement that are unpaid, thus cost nothing, and are tax free, and those are what provides compound production and cap gain.  

But where do you draw the line?  Are hobbists, homeowners, car enthuiasts going to start getting charged "personal consumption wages" and PAYE on those "undeclared earnings" which they gain and consume enjoyment?    What about volunteers?  shouldn't their organisations be paying taxes for the wages they don't have to pay, after all they do receive signicant benefit from the free labour....

And then we start doing things like since people enjoy benefits from houses and cars they own, vs earning taxed wages to pay for rent and transportation, shoud we be charging people for using their own property?

And what point do we start to say it's just a stupid tax grab, and ownership rights are personal ownership RIGHTS, and thus not taxable.  And that peoples' income is their RIGHT, not something which belongs to the state.

Surely willy is missing the whole point of such discussion. Wouldn't it be so much better if primary industries weren't the No1 money maker because other industries had stepped up to the mark and grown at the same or better rate.
Bit of a reality check needed, there IS a limit to the number of cows we can run on a hectare without degrading our environment and even with barns the waste has got to go somewhere.
As to the $300 per capita. At a guess $250 of that goes to the Aussie banks yes?

Unfortunately the limit of cows per hectare under present investment in environment is well over the top.
Time the dairy farmers stepped up and put a big part of their payout into envirotech. The debt is too high because they pay too much for the farm in the first place.

How are you going to bring down farm prices with foreigners willing to pay top dollar?  They can't even cool the Auckland house market, how do expect them to cool top quality dairy land in NZ, when the dairy farm, unlike the Auckland house, is (nearly) profitable enterprise?

How are farmers (as opposed to landlords) suppose to pay for envirotech, when many are struggle to minimum wage (let alone council rate wages?).  We've stumbled along against hard opposition with #8 wire mentality and budgets to survive, where in the name of the good green f earth, are most farmers supposed to get money for envirotech???  Most are struggling to pay off their effluent ponds (ver the next 20yrs)!!!!

In farming, unlike banking, there is no magic money fairy to sprinkle cashflow and capital into the books.  We can't just knock transaction fees through the roof, or manipulate the interest rates to score a few quick billion.  How many banks are there? 4 + 25 in NZ?  How many farmers (15,000 dairy, similar beef, similar sheep, similar crop and tree)?  Most funded from their working pockets.

It is the same problem. The price of the farm for the farmer is based on willing seller-willing buyer.
Put in the future cost of environmental recovery to standard  required and the price will fall over time to change on the basis of net return after costs. The buildings and equipment are determined by supply and demand but include costs established externally and out of control of the farmer buyer. The land value is totally flexible down to a very low threshhold.
Similarly for landlords, any extra imposed costs or inability of renters to pay will eventually lower the land value. The costs of building materials and labour is measurable. The value of the land below is totally flexible above any infrastructure supplied.

A rather old post to be reply to Basel.

nope nope nope.  I'm getting tired of foolish people,...you SHOULD know better.

I brought this up recently (to the sound of nary a drop of a pin) what is the % capex for a farming operation based on NP.

Farm values are decoupled.  That is to say farm land is not longer connected to the earning potential.  (why do you think the Foreigners are buying up larger before anyone else (ie NZ government) catches on???)

Likewise housing and auckland property.  No longer linked to the cost of the building, or to the rental income.   They are now hoardable assets like gold...and like gold the ownership value far outstrips any commodity value.   

Result from here on in, a sharemilker won't be able to buy in to a farm.  It will take equity partnerships from non-farm funders to take ownership of the land asset, that will be traded as art is traded.    Which is also why Auckland property isn't a bubble, its the same as why a Picaso is a "painting bubble".

Thus the pricing will move more and more to a traders value, not a business value.  and it won't go down (significantly) as the owners won't let it, and since it's decoupled and they have deep pockets, they don't need to let it (inelasticity)

Brave of Willy to mention tax. How much are dairy farmers paying in tax these days? In 2011 it was only $1506 a year per farm.

Simon farmers hate paying tax. I mean really hate paying tax. As a recently retired professional who advised them over 30 years I am qualified to say this. They want to use our schools roads and hospitals but want everyone else who is generally poorer than them to pay for it. They will spend big fees with professionals to avoid paying tax. Ask any accountant.
To boot they used their tax reducing structures to get their children allowances at university instead of loans and to get community service cards and even working for families. Give them an inch and they take a mile. Let the other buggers who are less well off than me pay for my care and children's education.
They are notoriously mean. Ask their workers. Why anyone would work for them is beyond comprehension. The real hourly rate is below the minimum wage. No wonder they have to resort to employing desparate people from overseas as New Zealanders have woken up to their exploitive tendencies. They will deny it but the evidence is there. National changed tax laws to stop the student allowance and WFF rorts. No doubt they will be  still doing their best to avoid their liabilities as the rest of the country owes them a duty of care.
 

As a recently retired professional who advised them over 30 years I am qualified to say this. So gordon, it is you the public should be castigating for farmers paying no tax, considering you were advising them for over 30years?  ;-)
 
No doubt you and your family have done very well out of your farmer clients and who knows, if you are a professional, you have probably employed the same practices that you say the farmers have.  After all, farmers structures aren't usually any different to what is available to other professionals/businesses.

gordon, I made 1k p.a. last year. Pulling 8-15hr days, no stats, no weekends, no holidays.

I was talking to a business friend today, his ex-wife worked in an accounting firm as an employee. She worked 9am to 3pm, 5 days a week (no injuries or risk of life, no cow effluent on her, no sun burn or blisters, or calves, no sweat blod or tears at all.  No massive upfront capital investment or 30yr debt load).   For her hours she made in the 80k bracket.

You can keep your schools. And I very much dislike the fee structure of your useless hospitals - did you knwo some medical consultants make near and over 1 million dollars per annum.  That's with out having to pay their own staff or buy their own hospital.

The money I spend on an accountant, is to keep books in order, and conform to IRD demands.  It's time I didn't spend on the farm doing the physical work and expertise there.  Stuff which can't be done from an office chair, or programmed to a computer.  I expect the accountant to be able to show me a profit from his hire ... he's expected to be worth at least what I pay him.

And if you were _ANY_ kind of accountant you would know what kind of return on asset they were getting?   How much wage per hour did the working farmer (and family) get?  What kind of yield were your clients making, gordon????  You're the accountant gordon... what kind of return should a 5 MILLION DOLLAR investment return to an individual? 100k?  50k?

If you were any kind of financial person you'd know a farmer from a landlord.

As for duty of care... show me the contract ... the one that says I owe the rest of the country anything, let alone 25 hrs labour a week.

Stupid self serving accounting scum.
 

Cowboy,
I'm astonished that you would be running a business for $1000 per year, particularly if your business/farm is valued at $5mln? 
I find it even more bizarre that you complain about your work and it's conditions... it sounds like modern day slavery!
Comparing it to an office job doesn't make sense ...obviously you didn't think much of his ex-wife either given the petty remark over her job and salary.
At the end of the day, it is your choice how you work to live or live to work.
 
I sincerely hope you get some much needed rain to brighten up your day.
Regards,
 

Welcome to dairy farming.
How I live and work...my choice... I made the mistake of going sharemilking. 
15k in debt when my boss pulled out and me looking to future on the sickness benefit.
Now I'm currenty around 300,000 in debt, an amount much improved as at one stage I was over 500,000 in debt (ie the business).

 If I have "my choice" and go elsewhere, a lot of people lose their homes 'snap of fingers' just like that. You think I can get up to date training to compete in a job market?

If I stay on, then I can borrow to cover bad years (like last year) where things like 20k of tractor repairs (which didn't work) and about 10k in complaince work (eg a big one was Fonterra's new sanitiser residue fiasco).   Research into non-NPK chemical fertilisers...public likes it, soil likes it... where do you think the money for that came from?  pay increase for staff previous round...where do think that money came from???  My Wages.   The work done on solar panels, my data isn't theoretical, the startup 4k came from the business as my development budget...where do you think the remaining 7k came from to make it work like it's supposed to?

But I put in hours, I'm allowed a wage like other workers, no??
But that's what farming is, a personal business, some years I make a bit more.  Usually I make less.

But in a country where farmers who are accountant clients make $1k p.a., and there's massive struggle by many people to survive day to day, then it's far from petty to look at any employee who doesn't even do a "full 40" on such an outrageous salary and say wtf.

Cowboy I am not an accountant. You sound just like the mean old moaning farmer I described earlier. Minimise your income and tax and knock those who keep the country running.When you get sick you will use the hospital and the roads to get there. 5 million farm and 1 k income. Pull the other leg. You just hate paying tax. Admit the truth. You are no better than the guys who leave their wife and children and minimise their income to avoid paying support.

There you have it people.

You folks have known me (and mist) for a while.  not given over to lies or exaggerations. Wouldn't be pulling up a figure like 1k p.a. if it wasn't true - 'cause you and me both know it gets questions asked.  And you all know business make losses and those come from somewhere.

I'm just another moaning farming.

I'm not a financial struggling farmer.
I'm not desparately running a business, understaffed, trying to get the ground under me.
I'm not investing everything I have in a small business in NZ.

According to RETIRED PROFESSIONALS WITH OVER 30 YEARS EXPERIENCE, I'm a mean old moaning farmer.  I'm deliberately minimising my tax and "knock those who "keep the country running".  (Don't know if gordon of the 30 years experience has worked out -where- my money goes.....)

the 5mln is a medium figure. my particular case is 2.6mln.

And yeah I hate paying more than 10% tax.  Who wouldn't, over 10% causes decay in the taxpayers operation and overcharging to the customer... fine for critical services...like those needed to legally met IRD demands.

And thanks gordon. I have a 5 bedroom house to myself, and my ex-wife and son; and my ex-girlfriend and my son & daughter both got joint and individual invitations to live on the farm.  Both left me not the other way around, which was heartwrenching to have my family walk out. twice.    The ex-wife...after spending everything we had, including private loans and credit cards.     The girlfriend...because she just "didn't want to live on a farm".

So why -should- I pay a tax or do anything decent for wankers like you....

There you have it. Hates paying more than 10 per cent tax . The country needs more than that from all of us to provide schools hospitals prisons and alike. You will be doing your best to minimise what you pay IRD Cowboy. That attitude will carry into your personal life. No wonder your partners have left you . I sense a streak of meaness  in you . Everyone else is wrong and you are right . Try listening to others . Give to others. Be more positive. You actually are well off capital wise . Life might improve for you.

The reason you need so many prisons is because your poverty system destroys hope for those not in the upper earning quartiles.

No I don't minimise what I pay IRD.  (1) I don't have to, that's what the business involves as any small business owner and startup will tell you, and every accountant or professional worth their salt can tell you that.  (2) I run squeaky clean books with no "tricks" because I totally expect Child Support to pull an audit one day and there's enough stress in this job without having stuff to hide.

My wife left because she'd spent everything - which she could do as she was working at the bank at the time (part-time) and could get things signed off without my knowledge.  She was also supposed to managing the family accounts and my business books at the time, which she did by never touching them.  When I finally sat down and realised that I had to make average target sales every single day in my side business, her salary, and work minimum 5 hours overtime a week in my full time day job, to meet the existing debt levels I took over the budget and credit cards (including the "emergency credit card" which she'd been using to buy gifts for her family).   She left because she didn't like me since I had become "obsessed with money" (ie on a budget).

The other it's as I said, refused to move out to farm.

Last year, a friend was ripped off by WINZ and left with 10k in credit card debt.  I borrowed the money personally, and paid them off. I donated calves to IHC. I borrpwed a few thousand to sponsor Indiegogo and Kickstart campaigns, including a short film. And donated just over 1k cash to Freemasons. As well as a few bucks, to Riding for disabled, Child Cancer etc.  I'm even one of the few who when I'm travelling and eating "roadkill" at McD's I chuck the coin change into the Ronald McDonald house slot.

What gets me, oh expert professional of 30 years. Is not that you are wrong.  It's that you are so ENORMOUSLY wrong.

Farmers are famously tight . They hate paying tax and will do anything to minimise it. My professional experience is that they will even ask if they can get fully subsidised rest home care when they control trusts that have millions in them. Now that disgusted me when so many New Zealanders have so little . Do they think like that because they are generally uneducated?

Farmers are famously tight.   I have heard the same thing said about Presbyterians, Jews, Dutch, and Southlanders etc.  What you are stating is your opinion.  I have friends in town that complain about paying their lawn mowing contracter bills. So by your standard of one instance reflects all, I could say that all urban dwellers are tight.  
 
A few years ago it was stated that around 60% of all farm owners had a tertiary degree/qualification.  So what's your degree/qualification gordon?  

Working extemely long hours and having poor pay and poor asset yeild is likely to result in not having much money to throw around, especially as most of it goes back into the business.

Your _professional_opinion_  doesn't even tell how trusts are legally structured and what fudns are available.

So lets go a little futher into your "professional opinion", what profession?  You seem to make a complete hash of everything so far, displaying a utter ignorance about your topics.

Did those other NZer's reinvest a significant majority of their earnings, compounding in earning assets?  Did they choose to invest in non-labour capital streams?

Do you think you have more education years than me?  I'm only counting tertiary, [ deleted. Ed ]

Please enlighten us all Cowboy. Just how have I made a complete hash of everything so far?

You have claimed professional financial knowledge : yet have shown incompetence with basic business fundamentals.

You claimed wage ideas, yet clearly have no idea about how those wages are set, or how business  wages, revenue, and profit are balanced.

You claimed to be a professional but when repeatedly asked "in what" you just ignore the question.

You were asked about the proper return on assets, again you ignore the question and act in a manner which highlights that you appear to have no concept of what how such assets are created or priced out.

You said most farmers left school at 15 and were uneducated.
You appear to think I'm uneducated.  I have spent all but the last 4 years since leaving university at 19, doing some form of tertiary or industry study (part time, block, or correspondence). That's 22 years.

You have said I have a mean streak, yet I have commented clearly I'm not. You were wrong.
You claim I'm minimising income, yet regular readers and others know this is far from the truth.
You claim I'm useless at business, yet my banker is prepared to lend a few pennies short of million this morning, that shows incredible ignorance on your behalf.
You said I hate paying tax, as I said more than happy to pay my 10%.  The maths is clear that more than 10% is detrimental to the private taxpaying society.  A fact you have ignored in your rush to claim I'm short changing my country.
You claim I'm shortchanging my country, where clearly the money I spend goes directly into rural communities of NZ and supports the local economy.  (whereas tax money tends to be spend in papertrails and other non-productive places).  [ps-All those rural communities pay taxes, the better their businesses and families do the more tax is available]

You don't know the difference between a farmer (who works a farm) and a landlord (who owns and manages property).

Most of all, you claim farmers are deliberately ripping NZ off......and have yet to provide one single instance or shred of evidence or even a commonly used loophole...

I think that pretty much counts as "complete hash"

Nice try Cowboy but you do not add up. No bank is going to lend you a million if  your  current declared income is $1,000 pa if I recall correctly. Whilst I have no personal debt I do have substantial business debt among four privately held companies. I know how hard it is to get that kind of bank borrowings. You have to have a track record, security and the income to repay it. No bank would lend you a million as you are not a successful operator.  Your lack of financial knowledge, your lack of grammar and your lack of consistency clearly prove you are a total fraud. What benefit do you receive?
 

Wrong again gordon.

I got myself off a sickness benefit 6 years ago, that I was on because chronic planar fasciitis in both feet.

So apparently the bank knows stuff you don't.  And they're willing to put their money where their mouths are.  However as everyone can see, you are still unable to answer a few very relevant questions concerning your accusation.  Yet you seem more than happy to continue with personal insults.

No one will lend you a million dollars with your lack of debt servicing ability and  your lack of financial acumen. Pull the other leg. Cowboy is a very appropriate name for you to use.
 
 
 
.
 

I've been wracking my poor brain for the last few days trying to work out what profession gordon the professional is in.

Who thinks they know everything?
Who is connected to farming, but isn't an accountant?
Who has no idea about the legal ramifications fo the language and accusations of the type gordon posted?

Rules out accountants, lawyers. Thought it might be IRD agent, but they're generally more clued up and don't have businesses.  Engineers are seldom professionals, and are more thorough. So who's that leaving? Fert people? farm consultants?? 

It would have to be a job that has excellent job security for all but the most incompetent.
To provide the kind of cash to all his staff, when cheaper just as good talent is available, they'd need to be a critical service so they could demand nearly everything they want.  (rules out consultants)

Sales agent or other financial professionals?? no.

To have the income and ignorance presented it would have to be in demand and either cartel or monopoly situation, probably one with constant government protection.

So I was thinking, which of my farm expenses just forever keeps going up?  That no matter how good we manage the business it's a "per animal","per hectare" constant rising pain?

Councils? But why single out farmers?  Sure they have that compassionate over business socialist bent.  But they don't tend to have $20+/hr wage and extra businesses.

So who does that leave us?  Who charges like a wounded bull, and is willing to through other peoples' money away at the drop of a hat?

I'm thinking gordon, might just be a vet.
Who else would be an outsider who has no clue about farming, enough time off to start extra businesses, and has enough cash to blow on "missing boss" investment businesses!

Well the $20/hour for minor staff certain explains why animal health costs just keep piling up...

Farmers avoid paying tax the same way property investors do; paying way too much for property. 
Is that what you advised farmers to do in 30 "professional" years? 

I am not an accountant CO so did not advise them in that area. Accountants are always pushing the tax boundaries which is of course self serving fee wise. How some of them sleep amazes me.

"Simon farmers hate paying tax. I mean really hate paying tax. As a recently retired professional who advised them over 30 years I am qualified to say this. They want to use our schools roads and hospitals but want everyone else who is generally poorer than them to pay for it. They will spend big fees with professionals to avoid paying tax. Ask any accountant."

Yo say you are qualified to say that.
If you are not a professional accountant working on farm accounts, then you are most definately NOT qualified to say that.

And given the claim of 30years experience, you certainly don't write clearly or well enough to be a lawyer of any kind.

So just what professional type are you?  dentist?

And as a professional commenting professionally in public, again I ask what kind of return is reasonable on 5 million worth of assets???????  Opening that one to the floor.  what kind of range is reasonable?

In what way do I not write clear enough cowboy? I note your spelling is atrocious. I presume you left school the day you were  fifteen like most farmers.  

By trade I'm a computer programmer, and systems analysis.
A couple too many nervous breakdowns, but [ deleted. Ed ].

Gordon you state "I presume you left school the day you were fifteen like most farmers".....very professional behaviour on your part......not !
 
Maybe a wee look at "Professionals" is in order......Professionals make a living off other people.......i.e. they do not produce. Professionals in reality are just middlemen/women.
It is easy for people to sit in high-backed chairs, cushioned from the realities of life sucking a living off others ! Sitting in the luxury of an office not ever having to consider issues of weather, exchange rates, Politcial and bureaucratic decisions etc is a very sheltered existence.
In your Professional capacity have you ever produced anything of exportable value? If not why not?
I assume you enjoy the trappings that most Professionals enjoy......yet if you have produced nothing of exportable value then perhaps you should have contributed a far higher percentage through the taxation system to cover your lack of productive enterprise.
Everyone in the world needs a farmer at least 3 times a day and it would appear that you as a Professional and I assume an educated person don't seem to grasp this basic concept.
If most farmers leave school at fifteen and they have atrocious spelling then maybe you should be looking at the State model of education as it doesn't seem to be working very well.
Maybe you should consider the high number of entrepreneurs around the world who have been extraordinarily successful despite their lack of education. For example there are a high number of billionaires who are dyslexic.
Attitude coupled with invention is the real stamp one needs in life.
 

I was mowing my lawns this morning and remembered that earlier this week my wife received a phone call from a couple of semi-retired people who do some gardening for us. She said they had just done some gardening for a elderly farmer who owns five farms. They charge $20 an hour each and I can say with certainly they both work very hard when they are on the job and they are very pleasant to deal with. They get a lot done in a short period of time.
They will be dropping him off their list as he was moaning about paying them $20 per hour each. What does he expect them to work for? They drive some distance to his home farm and do not charge mileage even. His attitude beggars belief.
 
 

"a elderly farmer who owns five farms. "

That's not a farmer, that's a landlord.

30yrs and you don't know the difference of even that??

...and is a patch of cut grass really worth $20/hr?  what does it return?

My wife and I think $20 an hour is the minimal amount you should pay anyone cowboy. They are entitled to be paid a living wage like anyone else. You obviously do not think like us.You are thinking like a farmer. Pay everyone including the IRD as little as you can as they do not deserve it. They are simply mowing grass. You in turn have to  make as much as you can. Bugger the people who help you get there.
 
I cut my own lawns as I enjoy that. Our gardeners trim the hedges, weed the extensive gardens, chop down trees and remove unwanted scrubs. This is not easy work. How anyone could pay someone less than $20 per hour to do that work is beyond belief. My wife and I are lucky to enjoy the association with  two very nice people who lost a lot of money to the finance companies but that is another storey.

Is the job worth $20/hour?   If it takes an hour is the job worth $20?  If it takes 8 hours is the finish product providing $160 hours worth.

You are talking like a rich p...., one that obviously has far overcharged his clients and revelled in the easy money.  Easy to give it away when you didn't have to really work for it..

And that garden work is way easier than farming, carries less asset and financial risk...yet farmers (the ones who work ON the farmers, get what, $8 - $12 / hr (afte allowing for asset yield/rent).   So why would you pay gardners $20, and farmers far less for far harder and more productive work.

I was making $9/hr when minimum wage was $10/hr.  I had two casuals.
When minimum wage went to $13/hr.  The were going to receive $13 each. I was going to receive $3/hr.    And I provide the place for them to labour and prep their jobs and carry the can when they screw up, plus I take all the risk when they injure themselves or others.  So that is your "You in turn have to  make as much as you can"

And since when has anyone recieved or been owed "what they are entitled".
What do you think farmers and farm owners shoudl be entitled too?  8%? 35$ per hour?

You're making a fool of yourself gordon.

No you are digging yourself deeper into a hole Cowboy. You obviously are willing to pay people less than what they need to live on and I bet you would do that even if they are supporting a family. Anyone who does a fair hours labour should be paid at least $20 an hour. People steal and go to prison because they cannot live on the minimum wage. In Australia my nephew earns up to $30 an hour in Sydney for pouring drinks in a pub and he is only a student working part time. What makes you tick Cowboy. Just because you are a failure work wise why should people be paid so little.

So _I_ should be paid at least $20 an hour......where's that money going to come from??

Your nephew makes $30 an hour because the customers are willing to pay 500% markup on alcohol that costs a fraction of that to provide.  That gives a big pile of cash for the business to spend - where does such piles of cash come from? Customers.

Clearly as a "professional" - like most professionals you were more than happy to gouge your unfortunate customers for far too much.  So what line of work were you doing that the poor buggers had to fork that out.

As for digging deeper gordon,  you _clearly_ have no idea about budgets or cashflow. Let alone farming (or other small businesses).  And you're making judgements about farmers and finance that simply, mathematically, don't add up.  

So, keeping in mind your personal accusations at me have got you a hairs breath from a libel suit, just what kind of profession you were in for 30yrs, that you have such lousy information about farming finances?

"a elderly farmer who owns five farms. "

That's not a farmer, that's a landlord.

30yrs and you don't know the difference of even that??

There are a lot of farmers in New Zealand now who own multiple farms Cowboy. you certainly fit your name. Most of them are baby boomers who were lucky to be able to ride the property boom times like the residential landlords. Now that interest rates are rising it might not be easy for some of them who have simply leveraged off existing equity accrued during the easy years.

Do they work the equipment or animals on a regular and frequent basis?
If not, then they are landlords NOT farmers.

On a slightly different note Willy....
...I read where Fonterra is claiming/media is claiming that Fonterra is not returning enough money to sharemilkers....

Do you realise where the cow genetics are coming from to fill the bales in the Chinese milking factories with there 5000 cow capactities??

Did you think they were using Chinese cow genetics?

No they're paying NZ Fresian herds to use sexed semen in order to buy the absolute peak genetic performance to ship to those Chinese factories...to compete against NZ sharemilkers.

so folks...tell me again how Fonterra is under capitalised.  And what brilliant gains it is for NZ to have it's peak genetic performers sitting in farms in China (a place that doesn't have the financial limitations...or Intellectual property protection) of South America....
 

No. Almost all major Chinese dairy genetics are coming from the US. There is currently a ban on US live cow imports (due to FMD issues) so the bulk of the current trade is sourcing Aussie cows and with US semen. NZ is a very minor player in this.

LIC has been providing liquid sexed semen exclusively too farmers to breed progeny for Fonterra dairy operations in China. The  liquid sexed semen is going to be generally available for the first time this coming season. It is professed to have a superior conception rate to the hitherto frozen sexed semen.
The merits of US genetics and NZ genetics in a cut and carry housed system, which NZ traditionally has no expertise, is interesting to ponder in regard to Fonterras continuing investment in China.

David, in the overall scheme of things NZ maybe a minor player of sourcing for China, however, Fonterra sourcing solely NZ heifers for it's farms in China for their new herds has resulted in higher prices for kiwis to buy the same class of stock.  Fonterra and others who source heifers/calves for China distort the livestock market prices for heifers and heifer calves in this country.  When buyers are buying for China, and admittedly the stock needs to meet stringent criteria, the prices paid are high.  This has a flow on effect for all dairy stock in those categories.  I know of a young couple who were raising calves for a China contract and had the contract cancelled.  They were not the only ones in the area.  Subsequently it created a surplus of young stock in the area and prices dropped.
 
The move to sexed semen for export, is making some farmers question the reason they are now getting a consistently high number of bull calves from artificial insemination, the last few years.  The sememn companies deny that by providing sexed semen it is altering the ratios for bull v heifer calves in NZ herds but one does have to wonder. Of course NZ farmers can ask for sexed semen - but it all comes at a higher cost.

I've gone to a lot of sexed because we found our bull calf rate went from 30-70 to about 15-18, especially in Fresian.  Only requires a handful of early heifers (early calves are often bulls) to make it viabull.

However for the development time and advantage to LIC shareholders and "brand NZ" from years of genetic advantage to just be shipped offshore.
 And I'm very concerned that Fonterra is taking this income stream out of NZ,  that's means that Company farms will be cutting into demand in China, and no matter what they say about "Drop in the bucket", every year and wevery month we're told the gDT prices are dropping or raising on droughts etc which produce volume of supply.
 Which means NZ suppliers will be pushed into attempting to supply high value niche products, which is seldom profitable - even when Tui and other co-ops used to do so.   (and I'm betting Brand Fonterra will expect any NZ efforts to require local funding...............)

Cas Ob I hope you are not suggesting LIC is drafting off the male semen and then selling it to you as normal semen. I find that hilarious. (and highly doubtful) Did you know the semen gets injured in the drafting process, the tails get bashed around a bit, which makes them very poor swimmers.
Someone else here suggested the fresh sexed semen is way better than frozen. Not much in it to my knowledge and I used to use a lot of the stuff. We had way better results with the frozen as it was easier to manage in the field.
There was some talk a few weeks back that this sexed semen was going to make a huge change to the beef industry. Cant see that happening. Yet. The technology is just not good enough yet. Getting a cow in calf with sexed semen is not as reliable as unsexed. They are not good swimmers and a cows bits are big and require a lot of swimming. Best to do heifers.
The other downside of using sexed semen as it is now is that the tech has to treat the semen quite a bit different. Its a lot more mucking about. Us techs dont like mucking about. The money is in numbers. 60 per hour at $4.60 normal semen or 20 an hour at $5.00 ..... doesnt make one happy doing sexed.  

Belle we aren't herd owners so I am only passing on what some farmers have told me. I also did not name LIC deliberately as the farmers who have spoken to me of this don't use LIC.
 
 

Hi Cas Ob, sorry to surmise wrong bowt LIC. I wouldnt think that would happen with companies in NZ, imported semen, well who knows.
Another interesting fact, a couple of years back Fonterra were using all sorts of semen for the heifers to china. A lot of it was imported. So as for our best genetics heading for china in utero, I wouldnt worry too much, it was quite a brew of differing boys. And if they didnt get in calf to the sexed stuff, a run bull was used. (a pretty reasonable sort of a run bull tho).
I recently found out that in britain they regularly have straws that will have up to 3 breeds in them. I think this was mainly beef. Talk about having an entertaining time at calving :-)

I doubt anyone is suggesting that LIC is tampering. They are too thical to bother with petty things like that.   I think the concern is that the higher daughter producers, and the genetic tendenacy results in the bulls with better than average daughter-rate end up in select and sexed packs - either that or some factor in logistics train is resulting in fast moving wigglers have better chance at conception.

as for frozen vs fresh.  fresh is more, but frozen keeps longer.  So LIC packs a lot more bull into a frozen tub, and have all year to do so.  That way LIC frozen has very good success rate.
 
If our fresh rate (first time this year) is good, we might move to a CIDR/synchro program so we can take better advantage of the fresh.  I'm putting sexed frozen in the vault, and try to do about three weeks all sexed.  But since mating numbers are so violatile it's hard to predict what demand is going to be there on day for fresh so I order baseline fresh amount, pick up the excess with frozen.   Means we can move to Short Gestation at an earlier date, as we don't have to panic about get target numbers for replacements.

I run no bulls, as they're a problem with young stock and premature pregnancy and since our tech has higher success rate than the bulls why use them.   Also I use Kamar, which I estimate put conception rate up 10%, we also used Vasbulls but we found while it might increase detection (which the kamars already do) the effects of the bulls _dropped_ conception by 5%

you're paid to do a job, is there no pride in doing it well?  
Considering the customer is paying $66 per insem for that sexed semen...
Isn't the service to others important?   (us farmers keep getting told that as scum of the earth we should be spending our wages to be saviours of the ungrateful universe)

Jeez Cowboy, got a bee in your stetson? Who doesnt like to make the big money for the littlest time. That doesnt mean you do a shit job. Do a shit job in my job and you have no job next year anyway.
 

For critical services I always put quality first.  That's why our team got jobs for banks and Courts etc when I used to work computer tech.

That's why I'm looking into biotech farming and solar gear, it certainly isn't for the fast buck!

(and then there's all those work vs life surveys & meme's, that the money isn't important...

Do a shit job in my job, and the bank and government wind you up, take away everything you own, plus any property others might have entrusted you with as security, then sue whatever remains afterwards.   If lucky it'll only be bankruptcy.... and only for a few people.  Unlucky and you'll get IRD auditing everything including your large intestine with a very large magnifying glass, front page in the papers and possible international "stardom", and a frezied mob of haters just to help you with the inevitable depression and loneliness.  Can probably throw in at least one permenant mental illness as part of a bonus deal.

Try again David.
calves are coming from NZ

A note to Willy, if NZ is the land of milk and honey, and clover honey is our bread and butter in that department. Why do you dairy farmers treat clover with such disdain and flatten it with mega tonnes of nitrogen?
 

because they need growth.  clover is all good and fine but without the added nitrogen it doesn't fix enough to self-sustain all year round.

have not noticed nitrogen reducing clover, opposite in fact.

what I have noticed is that for some reasons ammonia products* tend to have a disinfecting/bleaching effect.  In my kitchen, bathroom and on my soils.  Used heavily, constantly and frequently that destroys the bacterial, fungal, algae, phage and microorganisms in the soil (and in my bathroom :)  ).  That bleaching effect does run on to affect the clover.

* eg urea

I rest my case :-)

Your access to our unique content is free - always has been. But ad revenues are diving so we need your direct support.

Become a supporter

Thanks, I'm already a supporter.