The Country 09/02/26: Pita Alexander talks to Jamie Mackay

Christchurch-based farm accountant and raconteur says, “What an interesting world we are living in presently”. 

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Episode Transcript

Speaker 1 (00:00):
It is National Lamb Day on Sunday. Joining us on
the country now christ Church Farm Accountant and Racontour Peter Alexander,
and you've thrown out some interesting numbers, Peter around sheep numbers.
We're down to what twenty three to twenty four million
in this country and going down Australia's down to seventy
five million. Is lamb going to become a rarity and
a niche product.

Speaker 2 (00:21):
Australian New Zealand. Those numbers are quite correct. I think
what you've called out, Australian New Zealand control about seventy
four percent of the world sheep market. They should become
scarce commodities with a bit of natural economics.

Speaker 1 (00:38):
Well, I've got a farmer on from hawks Bay and
I'll keep the powder dry on this one. On tomorrow's show,
who's going to talk about a fifteen hundred dollars lamb.
My goodness, I'm not quite sure how you get how
you do the sums on that one, but that would
be good for sheep farming. Good to see sheep farming
making a renaissance. Lamb prices are very good, Mutton prices
are very good. Even strong walls improving, which is fantastic.

(00:59):
Dairy farming was looking a bit dodgy towards the end
of twenty twenty five, nine falls in a row. We've
had three positive auctions since then, so dairying's looking positive
as well. But you're suggesting that dairy farmers need nine
bucks a pi kilogram of milk solids to wash their face.

Speaker 2 (01:17):
I think we do about nine dollars. It would work
at eight dollars fifty. But getting a balanced budget, it's
not an answer. Farming in any business needs a profit,
needs a surplus, and that's about nine dollars for a
big number of dairy farmers.

Speaker 1 (01:32):
Your biggest expense on farm for most farmers, anyhow, is
interest rates. Now we were expecting them to keep tracking
down throughout twenty twenty six, but inflation is sticky. It's
over three percent. You're suggesting it might get to four percent.
Let's be honest. We are at the bottom of the
interst rate cycle now. There's only one way it looks
like it's going to go.

Speaker 2 (01:53):
Yes, I was hoping it might go lower than it is,
but I think you're right. I think where we dealing
with it at the bottom and waiting for it to
drop any further is bad economics.

Speaker 1 (02:06):
You're suggesting the New Zealand government, and I don't think
they would argue if you need another fifteen billion dollars
of income, Well, they will be helped considerably by the
rural and primary sector this year because I know that
terminal tax payments and provisional tax payments for that matter,
are heading upwards on this what's that old saying you
can't make money if you don't pay tax.

Speaker 2 (02:28):
Oh, that's very true. Yes, I think they're fifteen billion short.
They all tend to forget these worldwide black Swan events.
They seem to overlook them. They should be reducing some expenses,
but politicians struggle to increase the fiscal income and they
struggle to reduce expenses. It's not their money. If it

(02:53):
was your and my money, we would be doing it harder.

Speaker 1 (02:56):
When you talk about black Swan events, what are you
talking about the GFS COVID.

Speaker 2 (03:01):
Yes, I am. And at the moment, this lower birth rate,
more people living longer, more health costs. That's looking like
at the moment for a lot of developed countries, looking
just like a minor black Swan event.

Speaker 1 (03:17):
Yes, As a baby boomer Peter Alexander, you're sucking on
the nipple of the state when it comes to getting
super annuation. Can we afford for rich people like you
to get paid by the government.

Speaker 2 (03:30):
You can leave the rich pit out.

Speaker 1 (03:33):
You're an accountant.

Speaker 2 (03:34):
Yeah, I know that doesn't accountants of God gets to society, Jamie,
you can get that. Look the answer to that is yes,
we can't afford to keep doing it. It's not sustainable.
But I think you need to give people. You need
to do it gradually. I don't think you could make
a major change inside ten years. You need to do

(03:57):
it gradually. Every few months, change the auditoria somewhat.

Speaker 1 (04:01):
And it ain't going to happen while Winston's drawing breath. Ultimately,
we probably need to get to a model like Australia
scott where employers and employees make a much larger contribution
to Key We savor or the national supersystem. Yes, whatever
it is, but we need to give people warning.

Speaker 2 (04:19):
Yes, the Key We savers turned out to be a
better scheme from Michael Cullen and two O seven than
we had guessed, and it's going to play a bigger
role in this superannuation. It's playing a good role, but
it needs to be a bigger role. You're quite right.
I mean in some ways the employee needs to be

(04:39):
putting in ten percent and the employer are probably five percent.
We need to be getting it up to that twelve
to fifteen percent bracket.

Speaker 1 (04:48):
Finally, how are your farmer clients going in Canterbury. I
know that you've some of the arable farmers have had
a tough time of it, but the pastoral farmers must
be happy.

Speaker 2 (04:57):
Yes, you've got grass out. When you've got grass out,
the kitchen window logic tends to go out with it.
So you've got lamb prices going well. You've got a
lot of people holding onto stop putting weights on for
the arable people have had a terrible run.

Speaker 1 (05:12):
Well, February is traditionally our best month. I hope they
get a better run in February. Peter Alexander, always good
to catch up with you on the country. Thanks for
your time.

Speaker 2 (05:21):
Thanks Jamie,