Another week without rain and coupled with very hot conditions the regions dryland crops and pasture are suffering.
March weather conditions will be pivotal for the seasons pasture production to enable the milk flows to be maximized and to grow adequate feed for wintering.
More dairy livestock are being sold down as managers look for cashflow, and realign to a low cost pasture dominant system.
Nothing to inspire from the milk market last week, as very low volumes in the dairy futures trade and more pessimistic talk about the growing dairy debt, have only added to the gloomy forecasts.
An Auckland law firm has highlighted the increasing numbers of dairy clients unable to handle this debt, and with a growing number of analysts, are questioning any medium term optimism with the markets.
At last a glimmer of hope at last nights global dairy trade auction as overall prices lifted by 1.4% but more importantly was the rise in whole milk powder prices by 5.5% to $1974/tonne.
Nobody is suggesting the dairy price crisis is over as supply is still ahead of demand, but China is expected to purchase more this year than last as global prices are lower than what it costs them to produce domestically, but dairy farmers need hope for the future and this is a start.
Only four more auctions before Fonterra is planning to announce next years forecast result and most industry commentators believe it will start with a $4 and indicate more tough years ahead.
Fonterra has launched a $150 million bond issue to fund normal business costs, and opens three new plants at Edendale that will allow it to produce 8 different products from this large southern plant.
The CEO of Westland Milk Products announced his resignation last week, disappointing many of their suppliers as they look for experienced leadership to help them navigate through these tough times.
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Landcorps H1 result:
The state-owned enterprise posted a net operating loss of $8.9 million in the six months ended Dec. 31, compared with a profit of $1 million in the year earlier period, it said in a statement. Revenue fell 5 percent to $108.8 million as milk revenue slid 22 percent, it said.
Landcorp forecast a full-year net operating loss of between $8 million and $12 million, a wider range than the $8 million to $9 million loss the SOE signalled to parliament's primary production select committee last month, and its December forecast for a loss of $1 million to $6 million. It had a net operating profit of $4.9 million last year.
"The increased loss from Landcorp’s last disclosure largely reflects recent downward revisions to forecast milk payments for the rest of the season," the Wellington-based company said.
http://www.scoop.co.nz/stories/BU1603/S00084/landcorp-posts-first-half-…
According to Jiang Zhaobai Shanghai Pengxin have a very good working relationship with the ANZ bank .Losses on the Crafer farms ,substantial paper losses on the Hunan Dakang investment, its Congolese copper investment where it has to pledge its shares and where 110000 shareholders will likely get the Solid energy treatment after the financial accounts are audited, losses on its Everchina investment ,the inability to raise funds on its African gold mine, losses on its soybean venture. A' private' company with business acumen and experience. Cannot wait for the ANZ to start asking Pengxin for offshore collateral and find the company has been pledging /offloading amongst related companies.
Yes its a' serious joke.' I still have not heard back from the OIO as to why Shanghai Pengxin simply lied about its Aqua city building projects on its application , even though the OIO is meant to reply/confirm to any Email within 3 working days.It does not matter if its primary listed Shanghai subsidiary is fraudulent.Truly I wonder how much business consultancy work Landcorp got in China.
Talked to a local RE agent today, had some sheep farms for sale around the 1.9 to 2 mill mark. Suddenly sellers were very relieved to accept more like 1.2 mill, and they left with smiles, amazing what a difference a chat to the bank manager makes to ones outlook on life.
Seems like Canterbury has the least amount farms for sale out of anywhere?
Plenty of options in Southland though Andrewj if you feel like a move south?
Reminds me when My husband & I were in the Washington State, USA couple of Years ago, a group of farmers there didn't believe us when we told them the price of irritated land here - thought we were joking, there's no way land could be worth that much they said.
Will be interesting to see what interest there is in this irrigation scheme now. A couple of years ago they were selling land in this area for dairy conversion. With dairy farmers, by and large, out of the picture maybe prices will fall to reflect more realistic values?
http://www.odt.co.nz/regions/central-otago/374880/high-irrigation-dam-o…
The weasel words they use with farmers, or the pillow talk with Nathan Guy, will be very different from the messages the banks need to use with the investment community. They have as many faces as are useful to them. And the motivation in all of them, from start to finish, is self interest.
They backed these horses with money like there was no tomorrow, but they'll do whatever it takes to avoid the losses. They run the TAB.
The banks are certainly restive, and don't intend to be the ones with the losses – as sharechat.co.nz put it, 29th January: ‘Banks say more heavily indebted New Zealand dairy farmers will be asked to sell up as non-performing loans increase with lower forecast payouts'.
As Hemingway asked the question and answered it in 'The Sun Also Rises', '“How did you go bankrupt?" "Two ways. Gradually, then suddenly.”
For many farmers, I fear, this is the gradual stage. And who will the banks produce as their next buyers?
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