Fonterra, Sharesies join to make share trading easier
Fonterra is teaming up with wealth app provider Sharesies to make it easier for its farmer shareholders to trade co-op shares among themselves.
Dairy industry optimists have for months been talking up the future, saying things will improve.
Others who saw the bright sky in the morning as a warning some time ago were bemused at Fonterra’s optimism.
Now emerges the reality: economic forecasting by DairyNZ which will send shivers up the spines of dairy farmers who are highly geared, have high cost/high input systems and are relatively new to the sector. Not too many businesses outside dairying would survive for a year or more on overdraft, but farmers and their bankers have little choice.
The raw facts are that the $4.50 payout will not even give most farmers enough cash to service debt and pay farm working expenses, let alone buy a loaf of bread from the corner dairy. It will be a case of borrow and hope and in the case of the banks, lend and hope. They too are inextricably caught up in this mess.
New Zealanders living in provincial cities and towns will feel the pinch pretty quickly as farmers cut back on rural services. Capital spending will probably be a no-no and, as DairyNZ predicts, farmers will likely cut back on repairs and maintenance and be strategic with fertiliser use and supplementary feeds.
There may be job losses on farms. Retail outlets in dairy dependent towns have reason to be worried. With less cash, optional environmental projects on farm could also be cut.
The trickle-down effect will flow on to the big cities as well. With a lower tax take, government spending is likely to face the chop and overpaid bureaucrats in Wellington may have to revert to instant coffee rather than their expensive lattes. God forbid, even their Koru Club memberships could be under threat.
To be fair, not all hope is lost: farmers are lucky that interest rates are very low and will likely remain so for the foreseeable future – but things can change. The banks are predictably suggesting that all will eventually come right and that only a few years ago there was a similar volatile price upheaval. They are basing their optimism on developing economies, especially in Asia, where people demand more protein in the form of milk products. But more milk from the US and Europe will also hit these markets and there are no guarantees.
Right now there is an undeniable financial crisis in the dairy industry which could last 18 months or more.
While this is hard on individuals, maybe it will help all concerned to have more realistic expectations of an industry that is clearly prone to volatile market swings.
Federated Farmers president Wayne Langford is claiming “some real success” on the 12 policy priorities it placed before the Coalition Government.
Federated Farmers is throwing its support behind the Fast-track Approvals Bill introduced by the Coalition Government to enable a fast-track decision-making process for infrastructure and development projects.
The latest report from ANZ isn’t good news for sheep farmers: lamb returns are forecast to remain low.
Divine table grapes that herald the start of a brand-new industry in Hawke’s Bay have been coming off vines in Maraekakaho.
In what appears to be a casualty of the downturn in the agricultural sector, a well-known machinery brand is now in the hands of liquidators and owing creditors $6.6 million.
One of New Zealand’s deepest breeder Jersey herds – known for its enduring connection through cattle with the UK’s longest reigning monarch, Queen Elizabeth II – will host its 75th anniversary celebration sale on-farm on April 22.