Monday, 30 April 2012

The Last of Summer Wine

# Big Farming Story of the Week: The last of the summer wine?The latest Fonterra Global Dairy Trade Event dropped 10%. Lamb is taking a caning off the back of the exchange rate and wool is on the slide, heading back in the direction of the dark old days when it was little more than a by-product of meat production.

Similarly, other agricultural commodities are feeling the heat from the exchange rate and a recession that appears to be in no hurry to recede, especially in Europe.
It would be easy to take a ‘glass half empty’ approach to the future but there’s no need to panic because the numbers stack up so well for a food exporting nation like us. Global food demand will double by 2060 as the world population approaches 10 billion. And ponder this! The average daily consumption of milk per capita for the more than quarter-billion Indonesians is, wait for it, two drops! Imagine if they lifted that to 100mls, a 1000-fold increase?

# Big Political Story of the Week: Take your pick.

There’s the sale of the Crafar farms or Fonterra’s decision to have a second vote on Trading Among Farmers.
Let’s start with the Crafar Farms. I can sympathize with those who don’t want New Zealand farm land to go to foreign ownership but, equally, let’s make sure we treat all foreign investment equally. Where was the hue and cry when the Harvard Superannuation Fund purchased New Zealand’s biggest dairy farm in the Maniototo? Similarly where was the outrage when Shania Twain got her manicured nails into Motatapu Station? Or what about the Germans buying a dozen dairy farms in Southland? The Chinese have had to jump through considerably more hoops than any of the aforementioned to buy Kiwi land.
Very shortly China will be our biggest trading partner so why get offside with the world’s emerging super power? It’s called biting the hand that feeds you. The Chinese are not buying New Zealand farms to land bank them. They want to bank on the security and tenure of safe food supply. To understand China you need to understand the one child rule. Six people (two parents and four grandparents) are focusing all their efforts on one child. And if that means paying a huge premium for 100% safe infant formula, then so be it!
As for Trading Among Farmers? I think the second vote is PR exercise by the canny Dutch duo of Sir Henry van der Claus (aka Heyden) and Theo Spierings. Sure there might be some minor tweaking of TAF but the fact remains Fonterra needs more capital and can’t afford a redemption run on shares in tougher times. That’s why TAF will be endorsed on June 25.

# Big Sporting Story of the Week: The Breakers and the Crusaders.

The Breakers have now done (twice) what no other New Zealand sporting franchise has managed - to win an Australian-based competition. Basketball never really cashed in on the magnificent effort of the Tall Blacks in reaching semi-finals of the World Champs in 2002. It will be interesting to see if Breakers fever can do the trick. And as much as I’d love my beloved Highlanders to win the Super 15, I can see the Red ‘n Blacks rolling relentlessly on to Super rugby title number eight.

# Bouquet: China.

I’ve just returned from a fleeting visit. Wow! What a country! Everything about China is big, especially the numbers. It’s the world’s most populous nation (more than 1.3 billion people), with Shanghai alone having more than five times New Zealand’s population. Only the USA has more billionaires. The world’s second largest country by land area, China is now the world’s biggest energy user and dubiously lays claim to 20 of the world’s 30 most polluted cities. Most importantly its middle-class with real disposable income now numbers in excess of 100 million. They all crave New Zealand protein. Bring it on. And send it over!

Jamie Mackay is the host of the Ballance Agri-Nutrients Farming Show which airs on Radio Sport and Newstalk ZB.


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