Andrew's blog

Why wine makers are looking to investors to secure supply

The story behind the Patriarch Investment makes for some interesting reading.  New models emerging make agricultural investment an interesting alternative to commercial property.

The case for new Ag Investments

New Zealand agriculture is more than just dairy.

In the 12 months to 2016 dairy was 46% of NZ agricultural exports, the wider meat industry was approximately 30% and the combined fruit/wine/vegetable/fish sectors was 23% of Ag exports. But a closer look shows where the growth is - which is outside of the traditional dairy and meat industries.


New opportunities for young farmers

This note is a long one sorry – but please read to the end as I hope you will agree, it will be worth it.

Segmenting NZ dairy farmers

I have written a series of posts about NZ dairy wearing a ‘gloomy hat’. Unfortunately, nothing that has happened over the past few months has changed much. Global milk supply growth appears to be moderating, but it is still growth. Meanwhile the outlook for the world economy has deteriorated (EU growth, the latest concerns re: China, more QE from Japan etc) and the NZD looks to be stubbornly strong, despite recent RBNZ action.

Dairy cashflow challenges

I’m thinking (and perhaps hoping) that this is my last bad news post on the NZ dairy industry.  My following writing will be about the positive ways that farmers are responding to this recession, about the opportunities to restructure businesses to be viable at lower prices, and about new ideas that could take the industry forward.

Dairy re-set # 3

At the recent Dairy Summit held at Massey University we were treated to presentations from the Netherlands, Ireland, we had several speakers from the USA and finally talked to a gentleman based in China.  The discussion point was dairy products supply and demand; most of the discussion was about the supply side and farmer behaviour in the face of falling prices (they don’t necessarily look to farm out of cashflow tightness by reducing production).

Where to set the bar # 2

In March 2014 global Dairy Trade started falling.  From the giddy heights of over US$5000/tonne WMP is now trading (June 16) in a relatively tight range of $2200 - $2400 per tonne.  That's translated to a dramatic re-pricing of milk at the farm gate.  In New Zealand we're approaching our third year of losses; in other countries farming for a loss is relatively more recent - many US dairy farmers were profitable until the end of 2015 for example.

New MyFarm service - Farm 20//20

MyFarm is in the process of launching a new service offering, Farm 20//20, to help farmers achieve stronger financial performance during these years of low milk prices, so that farm businesses might prosper when recovery occurs.  We take a view that there is no room for complacency; milk prices will recover but when they do, we expect pressure on all of us as farmers to reduce our debt.

Dairy re-set. 20//20 vision

It is a while since this writer has blogged.  The big gap of several months has allowed some thinking to take place - hopefully thinking that stands at least the next few months.

Good Fonterra Profit number essential

It's an important week coming up for Fonterra and the industry.  Fonterra's profitability and dividend in a low commodity price year makes a critical impact on-farm and is important for the co-op's well-being overall.