I've thought a lot about it Alfie and I think that at this stage it would be foolish to stick my head any further above the parapet.
I'm always mindful of what happened to some friends who set out to do UHT milk into Asia about 30 years ago.
People travelling to Auckland from Paeroa over the last decades may have wondered at the existence of an empty , but seemingly never-occupied building beside the Waihou River (from memory).
The NZCDC saw to it that not one drop of milk ever entered that factory.
Of course today , every man and his dog is putting in UHT factories to service the Asian market . . . but that's O.K. right?
Remember the huge deteriorating butter mountain that the U.S. would not sell to Russia during the Cold War years?
Remember how the butter was all sold to N.Z. ; converted to anhydrous milk fat and onsold to Russia?
They both owe us.
Tatua also announced today , in a very rare move , that it had enrolled ten new suppliers , all clustered around the factory . Historically Tatua has been a closed shop ; they never took more supply than they wanted.
It would be interesting to know whether the new supply was deserters from Open Country or from Fonterra. I would pick that it was the latter because a shareholding would have to be purchased in order to become a Tatua supplier : not necessary in order to supply Open Country.
Still the Tatua payout was a long way from the $16/kg M.S. that good quality Chinese milk can attract.
And a very long way from the $21/ kg. that a very small yoghurt factory in N.Z pays.
It seems as though Joe Average has a pretty good handle on what is going down.
Her's a comment from NBR :-
" We have a lot of headwinds blowing in our direction now with China slowing dramatically (take whatever their official reports say, haircut the positives by 50% and magnify the negatives by 2x and that probably comes close to reality), and given that instead of addressing our major fiscal handicap, extreme household debt, when interest rates were low and we had a window to save, we have instead elected to double down on the housing ponzi market just as the global interest rate cycle begins to trend up after 5 years of central bank rescue financing begins to end.
I don't see any surpluses for at least a decade given the structural issues we face and the way inflation will soon take hold here (on a low NZD) just as growth tails off following the dairy bust. Stagflation anyone?
But then again...Everything is Awesome!"
I guess that we're
"pretty relaxed about that". :-)
That is comprehensive!
Going by past episodes, the effect should hit Auckland about 18 months from now.
But this time , it appears that the malaise will not be as short-lived as the previous episodes.
That part is very interesting.
Does one anticipate a bail-out of the most over-geared dairy conversions by large chunks of urban equity capital, seemingly intent on enjoying the pitiful returns on capital that characterise our agricultural sector?
Or , the perfect hedge against a prolonged period of financial instability, . . . and then some?
Gotta better than gold ; they're not making any more land.
there comes a point of balance on production and profit,
Just my opinion , but from a certain perspective , we are way past that point.
Perversely , if we were thinking about added-value dairy , as Australia is currently, we would conclude that we don't produce enough milk in Godzone to even make a small splash.
Of course that could be a tremendous plus. So exclusive, that you can't afford it. :-)
Vraiment, la crème de la crème.
You saw it first at Hard News.
All the News that is News :-)
Thanks Sam . It's no biggy though, so don't bust a gut.
Polled Holsteins are a rarity anywhere in the world but doubly so in China. The cows that I sent would by now have produced a % of polled offspring , even when mated to horned bulls.
I wonder if anyone even noticed that some of the calves would not require dehorning.