Dollar for dollar with US a looming catatrosphe

When banking commentator Bernard Hickey said it was not out of the question for the New Zealand dollar to match the greenback in the near future, you could hear the collective Prozac popping among exporters.

Surely Hickey is talking balderdash? But hey, it's okay, he went on to say jubilantly, because it's great news for anyone going overseas or buying consumer products.

What was he thinking?

There won't be a country if his dire prediction comes true. There could be no worse economic disaster in this country's history than if our dollar did match the US. All the talk of recession over the past year would be like a bad day at the races in comparison to what would happen in that situation.

It is difficult for the farming fraternity to hear comments such as these when the squeeze is going back on with the Kiwi climbing through the 76 cent mark.

As for Bollard's comments last night that the high dollar was not an impediment to future interest rate hikes, you could only squirm, knowing that will give overseas investors the confidence to keep investing and therefore push the dollar up further.

Just what we needed Mr Bollard...well done...

Ravensdown claim backdown over PKE but haven't gone far enough

Today the PR spinners were busy again, convincing arable farmers that Ravensdown are pulling out of the South Island animal nutrition market due to continuing 'negative' feedback. However, they claim this was in the face of 'overwhelming support'. Which was it then? - negative feedback or overwhelming support? Farmgirl is confused.

But besides this point there is another. The South Island market was small and the meetings where Ravensdown claimed support were about selling PKE into the North Island. It is still many arable farmers contention that Ravensdown should not be importing PKE into any of New Zealand. The North Island market is still undercutting arable suppliers. Therefore the backdown today from Ravensdown is nothing but a PR ploy and is not worth the paper it is written on.

For goodness sakes, if you can understand how damaging this has been, boys, to your reputation as the small concession today recognises, then surely you can extend the hand further and stop bringing in PKE altogether.

Questions still need to be answered as well...if they are promoting a 50/50 percent blend of PKE and barley why is it that they have only taken 6500 tonnes of barley. If you do the maths they sold 50 000 tonnes of the mix last year - doesn't look as though that barley made up 50% does it?

Silver Fern Farms money raising a thinly veiled glossover of Richmond fiasco

You have to feel for SFF shareholders. Now CEO Keith Cooper is asking them to stump up with $128 million, apparently in the name of forward progress in the UK consumer market.

Their hard fought co-operative, designed to protect their interests is fast becoming what they term a 'hybrid co-operative'. The translation for that is a co-operative moving away from what it was designed for and if this share restructuring goes ahead you would have to assume that it is only a matter of time before outside shareholders gain some status in the company, even if Cooper is promising that won't happen now.

But why do the restructuring in the first place?

Overcommitment.

First SFF tries to wrangle the money out of PGG Wrightson, now it's talking all this lovely juvely touchy feely rubbish about needing to be a 'fully integrated market-led company'. Come on, it all looks a bit desperate and more than a little co-incidental in the light of the lack of cash injection from the failed merger with PGG.

Wouldn't it be fantastic if the PR doctors just for once let go of the spin and spoke the honest truth. In SFF's case the statement would read something like this:
"SFF would like to advise that it is charging farmers an extra $128 million in shares and will be trying to find outside investors as well, due to the balls up it made several years ago when those in charge decided that SFF should buy Richmond at all costs. Because of this SFF has been in the poo financially for some time and as you know PGG Wrightson didn't end up joining the party so you, our loyal shareholders will have to foot the bill. But don't worry...we won't sell your co-operative rights down the road just yet...after all farmers are our business...and consumers...flashy UK consumers..."

Farmgirl hopes that SFF farmer shareholders voice their concerns over the restructuring as it is more than a little flawed.

It's funny isn't it how CEO's and directors are paid to go into a company and grow the business and make it financially stronger, yet end up making it bigger and weaker...think US companies answering to DC at the moment. The NZ example in agriculture is not as far apart from that as we might like to think...

Farmers tired of hearing the same old speel from the top

Farmgirl was more than a little dismissive of David Carter's speech to the Federated Farmers conference this week.

He told us to, "adopt new ideas, abandon old ways of thinking and embrace different farming methods"...blah, blah, blah.

This sentence has been trotted out by every agricultural minister since butter was churned by hand. It means nothing and it's not helpful.

When will Carter and his fellow ministers realise that this kind of talk is nothing but condescending as it suggests today's farmers are slow on the uptake and are not looking towards the future.

Farmgirl suggests it's not farmers who need to embrace different methods but more the companies that represent them and the politicians who continue to impede progress by whacking on costs at the farm gate year in, year out with thinly veiled bureaucracy - Kyoto being one such example.

Mr Carter and others that repeat these meaningless phrases (Anderton was equally as good at that - his tongue could roll off thousands of them in a week) regarding the need for farmers to adopt new ideas would do well to visit the Young Farmer Contest in Palmerston North today and talk to this latest generation of farmers. Farmgirl thinks they would teach him a thing or two.

More annihilation of British Farmers rights

Our poor old British counterparts are suffering yet more draconian public whims with the news this week that a dairy farmer who happened to be grazing his cows in a field with a public access walkway through it, will face $1 million pounds in damages for injuries received by a walker after she was attacked by cattle in Cumbria in 2003.

If ever we needed proof that the general public in Britain has gone barmy, this is it, and it goes to the very heart of why farmers here fought so hard over public access issues here recently - they saw the future - and it looks costly.

According to the Farmers Weekly UK a judge at Preston Crown Court ruled the farmer was liable because he had not properly considered the risk his cattle posed.

"Ms McKaskie (the victim), who was walking her dog across one of Mr Cameron’s fields, is claiming £1m for the injuries she sustained in the attack.While Mr Cameron is appealing against the decision, legal experts warned the judge’s decision could set a legal precedent and mean farmers having to remove cattle from fields.

However the NFU said there was nothing in law to prevent farmers putting cattle and calves in fields with public access.

"It is a concern that following a recent court case in light of the accident that there is a suggestion cattle should not be grazed in fields with footpaths,” the union’s Robert Shearsby told the BBC.

"The NFU advises its members on the requirements of the law and what should be done to minimise risks."

The ruling came after a police officer was paid £10,000 in damages by a landowner after he was trampled by a herd of cattle."

This is of course what happens when the rights of the public are put ahead of the necessity of producing food. Farmers in Britain may own the land but it seems they barely have a foothold on it, and that is why we see so many immigrating to New Zealand. Who can blame them!

Are growers being ripped off with Ravensdown DAP price?

And more from our Aussie commentator - something that we as shareholders have suspected.

"They are ripping off growers blind on DAP at NZ$827/t. DAP has been selling on the world market at US$300-US$330 since the beginning of the year, current prices are at the bottom of the range anticipating additional Chinese capacity for June/July, it is well documented and highlighted recently at IFA Shanghai that DAP pricing will continue to be low due to low demand and expected to trade range bound for the medium term. Freight is roughly US$30/t and port/discharge/handling costs roughly US$25/t. This should mean a co-op that sells at “cost” should be more like US$400/t, maybe US$420 which I believe equates to around NZ$620/t?"

All this when Rodney promised Mid Canterbury arable farmers a forward fixed price no higher than $900 plus per tonne for spring delivery. Surely they're market intelligence research must have been better informed...which puts further questions over their honesty with growers and they're research on the Australian venture.

Mike King as guilty as all consumers for sow crates in pork industry and should share in responsibility

It was hard core stuff on Sunday tonight. Mike King, a former advocate for New Zealand pork and mouthpiece for industry ads has jumped ship and attacked farmers for the use of sow stalls. Emotive footage and unbalanced reporting followed and not one pork farmer who uses the stalls was allowed to give a reason as to why the practice occurs.

In her agricultural journalism career Farmgirl has followed intensely the plight of the nation's pig farmers and has some sympathy for their situation. To portray the farmers as the common enemy is an injustice that ignorant mouthpieces like King would never understand.

If he did his background research he might understand that he and every other consumer of bacon or pork in this country are just as culpable for sow crate farming as the farmer themselves.

Farmgirl would like to know if these 'het up' consumers check their overseas pork that has flooded our supermarkets. If they did they might realise that the bacon they purchase is also farmed in the same way - through crates. If you ban them in New Zealand you have to ban all imports from overseas - a situation most pig farmers in NZ would rejoice about.

Let's get one thing straight right now - pig farmers don't like the practice, they want to change but there is no economically viable way forward for them to do so as long as cheap imported pork continues to flood in.

There will be a huge public outcry over the footage shot on Sunday, but Farmgirl wonders how many will change their spending habits and instead buy free range NZ pork to support the industry. If everyone did change the pork farmers would have the support to do the same.

Farmgirl is sick and tired of celebrities jumping on the bandwagon of something they do not really understand, and something they themselves have forced farmers to do. And it's laughable that King says he didn't know this was going on when he signed his contract with the Pork Board - what rot - this issue has been around for a long time.

The pleasing aspects to the situation is that most pig farmers are trying to break free of the system - and Farmgirl has seen some stunning results in the form of Eco Sheds etc, but it takes cashflow. If King and his cronies are so upset why don't they get on the box and encourage people to buy the more expensive option as Jamie Oliver did successfully with his recent chicken campaign.

Unlike King, Jamie took the time to explain why farmers do what they do and put much of the onus back on consumers.

Swines I have met...

The theme of the week is undoubtedly swines...Farmgirl has met a few on her travels of late, most notably ones with the big green R emblazoned on their jackets who send junk mail through the letterbox full of self praise for their services, but short on realities, lulling the arable farmer into thinking that some great bright shining new wheat market is going to open up all because they click their fingers and wish it so...

A bright side to the hype surrounding swine fever?

You would have thought that this morning's news regarding swine fever and its possible importation into New Zealand via Rangitoto College students was enough to put a damper on anybodies week.

Not so for all farmers, with one beaming cocky telling Farmgirl this morning that there could be an immeasurable bright side to the flu hysteria - increased lamb sales around the world as people baulk at buying pork meat.

He has a point. The poor old pig farmer is on a hiding to nothing when the media get involved and hysteria reaches historic proportions.

Yes swine fever is generally contracted from direct contact with pigs but in these circumstances the UN have been careful to publicise the fact that none of those infected have had direct contact. Alas this gets lost in the publicity siege.

The strain, H1N1, is the same strain that causes seasonal flu outbreaks in humans, but the detected version contains genetic material from versions of flu which usually affect pigs and birds.

Regardless of the facts Farmers Weekly UK report that Governments across the world are considering tightening rules on pork imports while Russia and Serbia have already banned any pork products from entering their country.

You have to feel sorry for pig farmers who will once again be the focus of a panic backlash but as the farmer told Farmgirl this morning, 'always look on the bright side of life'.

Can't you just see wonderful advertisements on television and in the newspapers around the world now: "Eat Kiwi lamb and stay indoors this year if you want to avoid the flu." Mmmm....the bank account is increasing already...

Tah tah tah tah...and the Smooth Operator of the Week Award must go to....Ravensdown CEO Rodney Green

Hark the herald angels sing...no it's not a Christmas angel...it's Rodders in all his preened public relations finery in Ashburton this morning keen to unsoap his mouth from the recent gaffes he made in the media when he ignored the existence of the New Zealand arable industry and it's importance to the Ravensdown coffers. (see post further down)

Alas Farmgirl hears there was no mention of that...he'd cleaned up his act and polished his lingo to perfection particularly when it came to the point of the meeting - why Ravensdown continues to be in the PKE market when it disadvantages the arable shareholders he hadn't realised existed until lately.

Ravensdown imported 90 000 tonnes of PKE this year and have sold around 50 000 and apparently on this basis cropping clients should be relishing the opportunity to add a meagre 5500 tonnes to the mix.

5500 tonnes? In arable lingo that's about five small farms that might benefit from the market but hey Mr Green and his cohorts reckon this could be a fantastic opportunity for us poor dumb cereal farmers. Apparently in this recession Ravensdown alone will convince the cash strapped North Island dairy farmers of the poor nutritional content of PKE when they sell it to them and then these same dairy farmers will come back, singing hallelujah you were right Rodney, and purchase bucket loads of the PKE barley mix while we celebrate by emptying our silos down here.

Yeah right!

And then of course Farmgirl understands there were the veiled threats that the Australian Barley Board (ABB) who has recently purchased plant in Hornby would get in on the act and might not put New Zealand barley in their mix. We should fear the Australians and trust Ravensdown was the message. But hold on...up until last week Rodney said it was the Australians that were adding a third commodity group to the Ravensdown market in arable farming, so who should we fear here?

In reality Ravensdown is all PR fluff. Nothing has changed. If the PKE barley market is a goer what's to stop RD1 getting on board anyway? The fact that they're not doing the same thing proves that there is room for doubt as to whether dairy farmers will really buy the more expensive supplement.

Yet again Ravensdown have misjudged the feeling in the arable sector. They should not be in the PKE market at all and no amount of wing preening by Rodney Green will change that.

Going cheap...take as much palm kernel as you want says Ravensdown rep...

Scene: Lincoln Field Days 2009

Setting: Inside Ravensdown tent a drum of brown mush indispersed with as many specks of grain as you can count on your fingers.

What Ravensdown calls it: Dairy Hi-Carb

What they proclaim: This palm kernel mix is 'awesum' for both the dairy and arable industry because it helps both industries by giving the dairy farmer a cheap break (never mind the proven poor animal nutrition of the stuff) and the arable farmer a chance to pull out a handful of grain from his silo - therefore helping both shareholders.

What Ravensdown rep said: "You can have as much of this as you want."

What arable farmers said: "I actually came here to buy fertliser. I see you don't have any so I'll just pop along to the Ballance tent shall I?"

Good news for grain farmers

Some good news this week coming out of the United Kingdom for our arable farmers with a top trader indicating that prices could return to 2007 levels.

Dr Klaus Schumacker of Toepfer International told British farmers that cereal stocks were still historically low at just 19% of estimated usage.

Dr Schumacker said stocks need to increase, but that isn't likely in the UK with yields expected to be well down following a decision by many to decrease inputs, because of economic difficulties. Weather problems have also added to the shortage.

Dr Schumacker also stressed the growing link between oil and grain prices, citing the amount of corn that is being used in the States as bioethanol.

Despite traders pulling out of the wheat futures market last year and the decrease in planting that caused it seems world demand for wheat remains and that is great news for our New Zealand farmers.