September 5, 2024 • 37 mins
Jamie Mackay talks to Antonia Watson, Sir Peter Beck, Jen Corkran, Nigel Woodhead and Blair Drysdale, and Chris Brandolino.
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Speaker 1 (00:00):
Catch all the latest from the land. It's the Country
Podcast with Jamie McKay. Thanks to Brent. You're specialist in
John Deare construction equipment, No No.
Speaker 2 (00:31):
Gooda New Zealand and Welcome to the Country, brought to
you by Brant but a cold heart rocket Man. I
caught up with the Rocketman yesterday in Wellington. Sir Peter
Beck on the show very shortly, but we're kicking it
off with Antonio Watson, who is the chief executive of
our biggest bank, a n Z Our farmers getting a
(00:53):
fair deal when it comes to risk margins for rural lending.
We'll ask and Antonio on the show today, Jen Corchran
talking a sheep Meet from Rabobank, The Southern Man Farmer Panel,
Nigel Wardhead, former Young Farmer of the Year, Blair Block,
a Drisdal Award winning environmentalist. He probably is as well
(01:15):
an arable farmer. Chris Brandolino from Newark, Barry's Soaper from
or Talking Politics. It's been a very interesting week. But
let's welcome on to the Country, the chief executive of
our biggest bank and Tonio Watson. And Antonio, I have
to declare an interest here. You're a good friend of
a good friend of mine. We walked the Milford track together.
(01:38):
She sent me a text earlier in the week saying,
be nice, but I can't be too nice. You'll accept that,
won't you.
Speaker 3 (01:45):
That's absolutely fine, Jamie.
Speaker 2 (01:46):
All right, let's rip into it. Our farmers getting a
fair deal, because I've been giving the A n Z
and other Ossie banks a bit of a stir up
when it comes to risk margins for rural lending.
Speaker 3 (01:59):
Farmer is getting a fair deal? You used to think
they are. I mean, I actually got the numbers this morning,
and I think it's better to look at the all
up rate because risk margins are on top of a
base rate than they can vary among banks, and for
other various reasons. So all up, our farmers are paying
an average of eight percent variable and our home home
browers are paying an average of seven point six percent variable.
(02:22):
So when you think of the difference in the risk
between those two sectors, I think that's pretty fair.
Speaker 2 (02:26):
How much more risky is rural lending than residential lending?
Obviously residential lending is much more liquid. It's probably a
hell of well. It is a lot easier to sell
a house than a farm.
Speaker 3 (02:39):
Sure, and it is more risky, and that's why we
have to hold more capsule against our rural lending. And
if you think about the reasons for that, the exposure
to commodity cycles, weather events, export demand, exchange rates. One
other thing, if you think about it, when we think
about a home loan, what do we worry about? Were
worried about interest rates going up? Well, that's been something
(02:59):
that's been experienced by both farmers and home borrowers. We
think about people losing their jobs, Now, that's something that
happens in a far less we think about it as
losing your income. That happens in a far less concentrated
way in the housing sector than it does in the
rural sector, because when incomes go down, they go down
across the whole sector. And the other thing thinking about it, like,
(03:22):
you know, if you lose your home in a flood
or in a fire or something like that, it will
usually be ensured, and it's much tougher to ensure the
entire set of risks that might happen around a farm.
And it's a bank that step in if something like
that goes wrong, as you saw last year with some
of those other events, A and.
Speaker 2 (03:38):
Z still got the biggest rural book because if we
go back in time, you combine with the national bank,
the national Bank took over the rural bank portfolio. Does
that still make you the biggest player in the game.
Speaker 3 (03:50):
Yes, yes, we are still the biggest player in the game,
and we're very proud of that.
Speaker 2 (03:54):
Talk to me about ease of changing banks, and this
is across the board because the government wants to be
like a power company where you can basically go online,
tick a box, and where you go, you can change
your bank. Now, that might be okay for people with
residential mortgages, but it's almost impossible. And I'm sure you'll
agree with me. For farmers if they're unhappy with a
(04:16):
n Z or ASB or whoever, the change to another bank.
The other banks don't want to know you.
Speaker 3 (04:22):
If the starters, I'll probably answer it in three sections.
So yes, if you're talking about your redel transactions accounts
or your home, that's pretty easy. And we actually have
a commitment that we will move your banking. We will
do all the hard work to move your banking within
five days or you just all you need to do
is tell your old bank. Actually, no, tell your new
bank and they'll make all the arrangements for farming. I
(04:44):
think it's easy to move if you're in really good shape.
It's really competitive out there amongst the big five banks
are involved in aggre lending. And in fact, you saw
qu Bank the other day saying, look, we're not going
to play in the aggre space because we think it's
too competitive and what's the upsides for us. So I
think there's a lot of competition there. It's when it's
it's when times get tough, it gets less competitive and
(05:05):
harder to move because when your cash flow is not
really supporting your the cost of repayment and interest on
your lending, it's tough for a new bank to take
on your loan. So that's what it's really important for us.
For what we see is that we support our farmers
through the cycle so that you know they can weather
out the tough time so when times turn round again.
(05:27):
But it is I acknowledge it be harder to change
change banks.
Speaker 2 (05:31):
Would you welcome competition from a beefed up or better
capitalized key we bank because the government's talking about that.
Wouldn't it be in everyone's interest if we had more competition?
Speaker 3 (05:42):
Absolutely, look, we'd say bring it on. As I just said.
Keyi Bank has said they specifically don't want to play
in the agrispace because of the competition, but we welcome
all competition. They've been taking something like twenty five percent
of new housing lending in the last wee while, so
I'd say they're doing a pretty damn good job of
being competitive player.
Speaker 2 (06:01):
Now, we don't want our banks to collapse under a
financial crisis or anything like that. But I note, Antonia
that you at A and ZA getting a thirteen point
eight percent return on equity, is that excessive? You're doing
better than most businesses.
Speaker 3 (06:16):
I know, I don't know that number. We reported a
eleven point seven percent return in the first half and
was around about twelve last year. But if you compare that,
so what you need to compare that to is our
cost of capital. Our cost of capital depending on you know,
there's a range as between ten point six percent and
(06:37):
sort of somewhere in the twelve That is the minimum
amount that an investor is prepared to accept in order
to not put the money somewhere else, like put it
in the bank. So we earn a return that's modestly
above our cost of capital, which I think again is fair.
I mean as an industry in New Zealand. Sadly, I
think some of the conversation in this space should turned
(06:58):
to white wing chouraging more key we sabor investment. How
can we grow our savings back based in New Zealand
so that we can have more of the banks owned
with the New Zealand But the fact is we need
foreign investment. We have the largest foreign direct investment in
A and Z in the country and we need to
have a return, you know, modestly above cost capital to
(07:18):
make sure that we continue to have people wanting to
invest in our banks so that we can leend it
took to your listeners.
Speaker 2 (07:24):
Yes, fair enough for Antonio. But I note that the
four Assie banks are all in double digits in terms
of return on equity, whereas rabobanks sitting at nine, Kiwi
banks sitting at seven point five. Does that mean they're
not run efficiently?
Speaker 3 (07:41):
So RABO is a bit different because they're a branch
of an overseas bank Kiwibank. It's a scale thing really,
so Kwibank has a lot of the fixed costs that
we have around technology. You know that they still need
to have a branch network, all those sorts of things
and regulatory costs. They still have to comply with the
(08:02):
same regulations that we do, yet they don't have the
revenue base because they're not as big, and it's much
easier to be a scale player in banking. That is
double digits. But as I said, our cost of capital
is double digits as well, and we do need to
provide a decent return to our shareholder so they will
continue to invest in us.
Speaker 2 (08:18):
Are you trying to reduce the size of your rural book?
Speaker 3 (08:22):
No, we've actually been. We're really in this over the
last four months. When you think about the tough times
we're in in some of my comments earlier, we've actually
grown our book and we've grown it above system. So
we're really pleased with that.
Speaker 2 (08:33):
Okay, let's talk about interest rates. How many more OCR
cuts were we had before Christmas? Because I know we've
only got two more OCR reviews. Are we likely to
get twenty five basis points at each of those? Or
should I be asking this question to Adrian or And
then the other question is when do we bottom out?
When do we get to OCR nirvana or where's a
(08:56):
fair balancing point?
Speaker 3 (08:58):
Well, our economists. So I imagine you'll have Sharon's on
your on your show at some time. They're saying at
each OCR this year it'll be a cut. So that's
another fifty basis points this year. And they're predicting a
floor of whatever, you know, the new normal of three
and a half percent sometime next year. So it's quite
(09:18):
a significantry. That's two percent overall reduction since the top
o CR rate.
Speaker 2 (09:22):
Okay, just put it into Layman's terms. Where does that
leave a floating residential mortgage when we bottom out?
Speaker 3 (09:30):
Ooh, So if we're saying it's an average of seven
point six, now I guess that's an average of five
point six depending on you know, there's a lot of
other things that go into pricing, but floating are the
ones that follow the ocr the most closely.
Speaker 2 (09:43):
Hey, Antonio Wattson, I think I was far too nice
to you today, too soft after walking the Milford track
with you. You're too nice a person, You're too hard
to fight with.
Speaker 3 (09:54):
I don't want to pick a fight with you, Jamie.
Speaker 2 (09:56):
No, who well, I don't know. No, look look at
I'm pleased to get some of the explanation from you,
and just one more question for you on that front,
and I know you'll run for cover on this one,
but do you think that the Rural and Business book
do subsidize the more competitive residential portfolio because we know,
(10:18):
as you said, keew Wei banks into that boots and all.
So that's where you want to be, isn't it.
Speaker 3 (10:24):
I can assure you that it doesn't. Just we've run
the numbers because we're preparing for the Parliamentary Select Committee,
and we earn a little bit below the returns on
our Eggy book, burns a little bit below the returns
on our housing book.
Speaker 2 (10:38):
Well you might have to argue that one with Nichola Willis.
She might be a tougher argument than me. Good luck
with you on Thank you very much, Antonio Wattson there,
Chief Executive. What happened to Elton and Jua lipa great song?
Speaker 4 (10:53):
Well?
Speaker 2 (10:54):
Talking about rocket men, I caught up with one yesterday
in Wellington for the investiture at Government House. What a
great what a great day it was. I'd never been
to Government House. I know most of you probably haven't.
I didn't even know that they ran public tours there.
And if you're wondering where it is, it's just out
(11:14):
the back of the Basin Reserve. It has it's like
thirty acres twelve hectares. The drive, the main drive up
to Government House takes about five minutes exaggeration, but it's
beautiful gardens and Government House itself is just magnificent, magnificent.
(11:35):
And we were lucky enough, obviously to meet the Governor
General name Cindi Kero, who was lovely and most welcoming,
most down to earth, and she's had a tough week
because she kind of had to make a decision between
staying in Wellington for all the investitures or obviously yes,
that are going to the funeral for the Maori King.
(11:56):
I know she was up there earlier. In a week.
It's two rung wi. So yesterday I managed to catch
up with the star of certainly our group anyhow, Sir
Peter Beck, the Rocketman. Here's a week conversation I had
with him after the break just after our investiture.
Speaker 5 (12:18):
Cool, cool, hard, he's gone a long long time.
Speaker 1 (12:32):
Touch down brings me run again, ger.
Speaker 2 (12:37):
Man.
Speaker 6 (12:37):
I think I am.
Speaker 2 (12:44):
Well Government House for the first time, and I'm lucky
enough to be in the same group at the investiture
for the King's birthday. Honors as Sir Peter Beck, the
rocket Man, like me, a fellow self and a Peter.
Great to meet you. In fact, your mom came up
and said hello to me, because once a Southlander, always
a Southlander. She's very proud of you. You must be
very proud of what you've managed to achieve. Yeah, but
(13:06):
it's always takes a big team, as everybody knows. And
you know, I kind of look at this one as
the one for entrepreneurs and engineers and small businesses alike.
So your history is Southland are born and bred, and
I know that you've been tinkering all your life, but
you also had a stint before you became famous working
at Fisher and pikel and Moscow. I'm based in Dunedin
(13:27):
now and you learned some of your art there.
Speaker 7 (13:29):
Yeah, absolutely, I was. I was super fortunate. You know,
I did my trade there as tall and die maker,
and we're giving lots of opportunities to move into the
design office and right throughout that whole organization. And you
know I would I would do the you know, the
general kind of Fisher and Pipal thing during the day,
but during the evening, you know that the team would
let me build rockets and fluff around in the workshops
(13:52):
at night. So it was it was really really lucky,
you know, great environment to grow up and learn, but
also super you know, to have the support of that
whole organization.
Speaker 2 (14:01):
You kind of are in New Zealand's Elon Musk, really,
aren't you.
Speaker 7 (14:05):
Well, I preferred the thing I'm a New Zealand's Peter
Beck rather than Elon Musk, but certainly we have rockets
in common.
Speaker 2 (14:11):
Well, I mean he's the biggest rocket guy in the world.
Are you the second biggest rocket guy in the world.
Speaker 7 (14:16):
Well, we are the third most frequently launched rocket in
the world. So it goes Elo launches the most, then
it's China, then it's us.
Speaker 2 (14:25):
So what next for Sir Peter Beck.
Speaker 7 (14:27):
Well, look, we've got a big rocket program underway, so
the Neutron rocket, which is a significantly larger vehicle and
also a tremendous number of spacecraft and development. And in fact,
we've got two spacecraft that we just finished up a
few weeks back that are sitting out at the Cape
Canavil right now ready to get launched to Mars, and
they'll arrive at around Mars in a couple of years time.
Speaker 2 (14:46):
So it's twenty twenty four, you're still going to be
about I'm making this assumption and I'm sure you will
be in twenty fifty. Final question for you, what's the
world You're a visionary, you're an entrepreneur, you looked into
the future. What's the world going to be like in
twenty fifty. Well, I think the world right now is
a little bit of a tough, tough time.
Speaker 7 (15:02):
But I'm always a bit of an optimist and futurist,
and I think in twenty fifty, you know, the world's
going to be in a much much more interesting place
for sure. And you know, space where we're right at
the very beginning of the cusp of commercializing space. So
by the time of twenty fifty, you know, I think,
you know, life on Earth will be significantly improved by
all the services that are being provided by space. But
(15:25):
you know, maybe we can do this in twenty fifty
on a space station somewhere.
Speaker 2 (15:29):
So, Peter Beck, it's been a real pleasure to meet
you and to receive our investiges together at Government House.
Speaker 7 (15:35):
Well, congratulations yourself well deserved.
Speaker 2 (15:38):
Can you can that last comment there, Michelle, what a
nice bloke he was, and a big, a big shout
out to Sir Peter Beck's mum and good South London
and good afternoon by the way, Michelle, thank you and
Rowena for looking after the place in my absence. So
everyone was giving me heats. Don't be a fan boy,
(15:59):
don't kind of cure you up and ask for a
radio interview. And I'm keeping an eye on and we're
getting near the end and I'm thinking my chance is
slipping here, but mum Anne comes over and says, hello,
I think she might be a hock and NELLI listener,
good on you.
Speaker 6 (16:12):
Ann.
Speaker 2 (16:12):
Anyhow, she said, Peter, come over and meet Jamie. And
so there was my chance and I took it to
interview the rocketman.
Speaker 8 (16:21):
That's pretty cool actually that she is a big enough fantasy.
Speaker 2 (16:24):
Well, I don't know. I don't know about a fan,
but it was my inn because these can be very
awkward moments. But isn't that interesting? I said to him,
he's made in Bristle, but he kind of he looked
at me awe bit sideways when I said to him,
are you kind of New Zealand's Elon Musk? And he,
I don't know if there's much love lost between the
two rocket men. So Elon's number one, Shana China is
(16:47):
number two, and our guy from Invercargo who learned his
trade at Fisher and Pikel and moscle here is the
number three rocketman in the world. She's going to have
a big influence on the future of the world over
the next couple of decades. Got to take a break
on the other side of it, Peter Beck, or so
Peter Beck's a futurist, What about the future of sheep?
(17:10):
Meet Jen Corkran from Rabobank next on the Country.
Speaker 6 (17:14):
Well, and there's no one there to raise them if
you do.
Speaker 2 (17:30):
She is a Rabobank Senior Animal protein Analyst. Her name
is Jen Corkran. The September Agribusiness Monthly is about to
be published today on the Country, We're giving you a
wee sneak preview, and I can tell you that dairy
and beef are looking quite positive. But Jen Corkran, I
want to talk to you about sheep meat because that
is right in your wheelhouse. It's been tough going, let's
(17:52):
not sugarcoat it, but we are seeing some promising signs.
Speaker 9 (17:57):
Hi Jamie, and yes, it's a great time to talk
about some sheep meat things too, right as these newlands
sort of running around the countryside. And we've actually also
got an other research report coming out next week, so
we can shed a little bit about that, and this
is focusing on watering the green shoots and New Zealand
sheeap meat.
Speaker 10 (18:17):
As we go forward.
Speaker 2 (18:18):
I've had a sneak preview of your commentary on this one,
and while it is looking more positive, basically the messages
don't get carried away. Twenty four to twenty five is
going to be better than twenty three twenty four, but
it's still going to be challenging. But looking further ahead,
we definitely can see some improvement.
Speaker 9 (18:38):
Yes, I think so, Jamie, you know, having a deep
dove into sort of the data and what we've been
doing here in New Zealand and some of the challenges
that we've seen the last eighteen months. We're written in
the sand after the good times in twenty one and
twenty two really around that diminished sort of global demand
with the economic downturn, and also obviously the big influx
(19:01):
of inventory from our friends across the ditch producing a
heap of sheet meat all at once. So there's plenty
of green shoots into this new season. However, I think
we just need to sort of water them carefully as
you do with a new grass panic, and nip off
those green shoots so that they can flourish. Because things
won't necessarily be easy this coming year. But there's some
(19:24):
certainly some positive long term game ma sheet meat in
my opinion, and some opportunities from New Zealand to grasshold
off so that we don't see this huge boom and
bust in the future.
Speaker 2 (19:37):
Yeah, okay. Rabo research ieu Jen believes there are three
pathways to help lift earnings through the cycle, and the
first one is probably reasonably self evident. Or of this
reassessing trade and diversification away from China. China has been
great for us in the past couple of decades, but
(19:58):
we have had too many eggs in there. It's so
easy to say, go away, diversify away from China. But
where do we go to?
Speaker 9 (20:05):
Yeah, great point, And China has been a very important
market for New Zealand and sheep meat and other commodities
you know that we're exporting. It's an important market for
the lower value parts of the carcass, you know. So
the new Zealand farm gate prices are very much affected
by our process and exporters utilizing the whole of the
carcass and getting as much value as they can from
(20:26):
every single part of it. So China remains important. However,
you say, there's been a lot of eggs in the
one basket, so we need to look around to see,
you know, where else we can go here, and it
is challenging. But in saying that, you know, Australia produces
a heap of sheep meat, it's us in them exporting
to the world, and they have other markets to some
of the stuff too. It's the Middle East, there's some
other Asian markets too, And I understand, you know, it's
(20:49):
not easy to just switch to flick the switch and
shift into some of these markets straight away, but it
is an opportunity for change because if we rely heavily
on one market and it stops buying, we're going to
see this astount.
Speaker 2 (21:03):
Yeah, and the Assie's have got a bit of a
sweetheart deal with India which we haven't got at the moment. Look,
here's another one that you mentioned, focusing on increasing domestic consumption,
and I think this is a real opportunity for the
New Zealand sheep meat industry. We're not getting rich on
the world export market at the moment. We gave Kiwi's
a taste of lamb around Christmas time when the supermarkets
(21:25):
were special in it. I'd like to see more of that,
more promotion. And you know, I know we've got National
Lamb Day and the likes the Aussis do a great
job of it with their national Day. We need to
eat more lamb and make it try and make it
affordable for Kiwi's.
Speaker 9 (21:40):
I think so too. And I you know, that's a
bit of a cheeky one to throw in a report
like this statement. But if you look at what we're
eating compared to what the Australians are eating, Jamie, it's
it's quite remarkable. I think they eat about three times
as much lamb as US according to the OECD data.
And they do a great job of promoting the Australian
(22:02):
lamb and they do it really well domestically, and they
do it really well globally in terms of pushing that
amazing product to the world and to the local consumers
as well. And what can be said for domestic consumption
as it takes a little bit of control back. You know,
we're very much at the mercy of macro, you know,
ecomic convinced in an export nation. So eating even just
(22:25):
a little bit more here on home soil, we can
take a little bit of control back now. I know
that might not be easy from a supply chain point
of view, but that's no reason to shut a conversation
down around eating this amazing healthy protein. It's full of
iron and easy to do it.
Speaker 2 (22:39):
Gen corkran out a Rabobank Thanks for your time. The
report is titled Watering the Green Shoots and New Zealand
sheep Meat. You can read all about it next week.
We've given you a sneak preview, but you can read
the September Agribusiness Monthly now at rabobank dot co dot
m Z. Safe travels home from Blenheim to Hamilton. See
you later.
Speaker 10 (22:56):
Thanks Danne.
Speaker 2 (23:00):
Twenty five away from one, you are with the Country
brought to you by Brent. I'm going to try and
turn the tally on. I think Saberlenka is on at
the US Tennis Open at the moment. She's got a
big social media game, that girl. I'll give her that. Anyhow,
(23:22):
we'll update that for you very very shortly, but before
we can do sports news, which I haven't read yet,
I must read it. I'll read it while Michelle Watt
does rural news.
Speaker 1 (23:31):
What the Country's world news with Cob Canet, New Zealand's
leading right on lawn Bower Brand. Visit steel Ford dot
cot INCI for your local stargistwhere you go.
Speaker 2 (23:44):
Yes, I have, unfortunately, well, I mean otherwise I want
better read sports news.
Speaker 8 (23:48):
I couldn't tell from the side.
Speaker 2 (23:49):
Sorry.
Speaker 8 (23:50):
Market regulators have knocked backs and lay founder John Pennow's
complaint over the processes playing planned capital rais. Last week. Penow,
who was on the duel listed company's board until May
this year, complaining to the Takeovers Panel and the New
Zealand redg Co that Bright Dairy and a two milk
company shouldn't be able to vote on the resolutions that
will see two hundred and seventeen point eight million rays
(24:10):
to enable the company to its divulge its balance sheet
have approved. Bright will once again take controlling steak by
contributing one hundred and eighty five million at an issue
price of sixty cents a share. That vote takes place
in Dunsandal on September eighteenth.
Speaker 2 (24:25):
Well, I might be oversimplifying this, and we had a
brief yarn about this one this morning. I don't see
how Sinlay shareholders have got much of a choice there,
despite what John Peno says. It's I don't think Turkey's
normally vote for an early Christmas today.
Speaker 8 (24:41):
No, we were discussing this. Yeah, it seems like they
don't have much of a choice, but we'll wait to
find out.
Speaker 2 (24:46):
Yep, was it Sinlay this week that came out while
I was away? I think it was suddenly came out
and went from eight dollars to eight sixty, which is good.
They did, yes, and we of course we kicked off
the show with Antonio or Watson, chief executive of a
n Z Well earlier in the week. See they went
to nine bucks. They're leading the charge. Rabobanks currently at
(25:09):
eight sixty. Fonterra's at eight fifty, so those numbers are
starting to look pretty well positive. We got to nine dollars,
that would be great. Still not making a fortune because
it costs too much on farm these days, but it's
a lot better number than six fifty, which we were
looking at this time a year ago. So there's rural
(25:29):
news with Michelle. So someone's left their SkyTV on the
golf channel. We want the tennis channel. Someone you might no, No,
I haven't been here. You can't blame me.
Speaker 3 (25:40):
You might.
Speaker 2 (25:41):
You might have to whip out to the rack room
there to change it. You probably don't even it's quite complex.
I can change it. I can change it. So sports news,
have I played the liner, No, I haven't.
Speaker 1 (25:54):
Sports were then as Goo Kiwi to the boone since
nineteen oh four.
Speaker 2 (25:59):
And that's because I was trying to changed to the
tennis channel. I've been scolded, scolded by Michelle for my
own competence. So Belarusha's Urena Sabolenka has dominated American Emma
Navarro six three in the first set of the US
Open semi final. You would have to think that she's
(26:21):
the hot favorite. Now that the Polish woman it's Fiontek
I think is a name, is out, so keep an
eye on that one. The US Open really really interesting
at the moment, and the rugby calendar continues to be
potentially or to potentially move in a different direction. From
twenty twenty six, after news of an all Blacks tortoise
(26:42):
South Africa. This is wonderful. The Sydney Morning Herald reports
a Bledislow Cup test is also likely in Perth on
Anzac Day that year. I was going to say, Rowena,
your name's not Rowena, Michelle. That's great news for me
because I've got a mate called Hideous Ross and he's
a great bloke primary schoolmate of mine and all of
(27:04):
us Riversdale boys we want to go to Perth to
watch a Leedersload Cup. If you're listening, lads, we're over
there in twenty twenty six. We're going to stay with
Hideous Ross. He'll get us into all sorts of problems.
But Perth is a great city. I've only been there
once for six hours, never left the airport. Could be interesting, Yeah, no,
it'll be fantastic, so and so will a tour. That
(27:26):
would be a great trip as well a tour of
South Africa. I think there's three tests and there might
be five provincial or super franchised games or whatever they
call them. Great nation to tour, right, we'll take a break.
On the other side of it, it's the Farmer Panel.
Speaker 1 (27:43):
Hard done.
Speaker 2 (27:46):
Bags lawst name revelayed, welcome back to the country. It
is fourteen away from one. We've tracked down the farmer panel.
Speaker 1 (28:01):
The Farmer banal with the Kawasaki mule, one thousand side
by sides built for demanding days.
Speaker 2 (28:07):
Yeah, it is the twenty seventeen Young Farmer of the
Year Nodge or Woodhead and South Otago and an award
winning arable farmer, at least I think he is. He's
certainly a great ambassador for Jimmy's Pies. Blair Blocker Drysdale
out of Belfer in Northern Southland, just up the road
from the capital of Northern south and Riversdale couldn't help
(28:30):
my south Blocker. How's the season going in Southland?
Speaker 11 (28:33):
Well, yeah, looking here, I was but to congratulate you
on your gong and you throw the pies at me.
Speaker 2 (28:38):
But anyway, well you're a walking billboard for the Jimmy's
Pies from Roxburgh.
Speaker 11 (28:45):
Well hockeys, that is true. I do biden by the
box these days, so yep, I do enjoy good Jimmy's.
I don't think that's a secret in you.
Speaker 2 (28:51):
No, and they are good. So you're an arable farmer.
I know you do a book bit a larve stock
grazing on the side. You know, this time of the
year you started to look at getting crops into the ground.
How's it going.
Speaker 11 (29:04):
Yeah, look, just trying to fit spraying and ferred in
at the moment, Jamie. And it's pretty frustrating for anyone
in the arable world down here at the moment, working
between wind and rain. So started the spray of this
morning and just jumped off the spray before putting ferred on.
But it's even just getting on the windy side of
putting that on. Really, So after you know, a good
old fashioned traditional hard winter, it looks like run for
a good traditional windy spring. So we wait for planting anything.
(29:27):
Yet we won't originally planting spring crops until sort of
early mid October, so the peas and Asianbraska's that sort
of thing will go. And then so we want to
wait getting ground conditions where they just about right a
week ten days go to get into it for all
the rain hits. So but we'll quite a lot of
rain here, and it's just mother's nature's way of telling
us to slow down and be a little bit patient.
Speaker 2 (29:48):
Jaming well spring is the most challenging of all the seasons,
isn't it. Well, one man who's hoping for a kind
spring like all Sheep Farmers do, because Lemming needs a
kind spring. As Nigel Wood, the twenty seventeen Young Farmer
of the Year, farming between what Belcluther and Milton and
South o'k otago there, Nigel, you'll be wishing you were
(30:08):
lambing out there today.
Speaker 10 (30:09):
It's quite mild, Yeah, afternoon afternoon, Jamie, Yeah, that's beautiful
day to day. Actually we breeze, but it's nice and warm.
And yeah, it's as primo Lemming whether we don't start
for another four or five days. So I'm just in
the middle of spreading all the us out and set
stock in twins and we'll do the singles over the
weekend and all how will break loose next week. It's
(30:32):
going to be good.
Speaker 2 (30:33):
And I don't know whether you caught up with what
Jen Corchran from rabobank had to say earlier in the show,
but you know, it's not going to be an award
winning season for Sheep Farmers, the one we're coming into.
But she said it's going to be better than last
season mindeur would need to be. But she's talking a
bit longer term about better prospects and I really picked
up on the commentary she made about trying to increase
(30:54):
domestic consumption of lamb.
Speaker 10 (30:58):
Well, yeah, we're going to need all the Kewis need
a lot of lamb. I get through all the lambs
in New Zealand. But I mean every little bit helps,
doesn't it.
Speaker 2 (31:05):
Yeah, Well the hang on. The Aussies eat three times
per capita more lamb than us, so there's no reason
we can't match them.
Speaker 10 (31:12):
Oh no, no doubt at all, No, no doubt at all.
I mean, you know, we produce a fantastic product and
an ideal word would love it if if you run
in New Zealand could eat as much of it as
they wanted to. I mean, it seems like a lot
of it gets priced out of Kiwi's budgets at the minute,
which is unfortunate. I think it seems more about the
(31:33):
financial situation of our country and the people in it
more so than the product.
Speaker 2 (31:38):
Yeah, but when farmers are only getting paid six bucks
of kilo or a wee bit better for lamb, you
would have to think that in some shape form or other,
it should be affordable in our supermarkets.
Speaker 10 (31:48):
Well you'd like to think so, because we're not getting
paid a whole lot for it. So yeah, I mean,
we did our budget earlier, finished it off earlier in
the week, and I think I've got seven bucks of
Quilo and free Christmas and six after Christmas, So it'll
be interesting to see if that comes to fruition or not.
And you're, like you said at the top, Yeah, we're
definitely hoping for a better financial.
Speaker 4 (32:08):
Year last year.
Speaker 10 (32:09):
It won't be particularly hard because she was pretty tough.
Speaker 2 (32:11):
Okay, Blair, fine, quick final question for you, because I
need to catch up with Chris Brandelna before the end
of the year. Are arable farmers going to make any
money this year?
Speaker 4 (32:21):
A lot?
Speaker 11 (32:21):
Everyone else, Jamie, m Margins are getting you know, thunder
and thinner and squeezed all the time, so it's tough
for us there. And put price is still some relatively high,
and commodity prices we're getting for week and Barley are
still stubblingly low. They've got a four in front of
them and they really need a good five in front
of them. So yeah, it's not easy for anyone at
the moment. Jamie. It's still stuck in that COVID hangover, unfortunately,
(32:42):
it seems. And you see Balance lift their prices a
few days ago and I suspect if ravensdown doesn't do
it shortly, they'll weeding up dropping, you know.
Speaker 2 (32:50):
Yeah, Okay, well hope, So competitions hopefully alive and well
on the fertilizer industry. And Nigel, I've got like twenty seconds.
Great news that the Young Farmer Grand Finals coming to
and for Cargo next year.
Speaker 10 (33:01):
Oh, it'll be awesome year. I was involved in twenty seventeen,
twenty eighteen down there and it was an awesome event,
so no ideat it would be great again.
Speaker 2 (33:08):
Okay, there we go. That's today's Farmer Panel. Thanks to
the Carwasaki mule. We're going to take a break on
the other side of it. Chris Brandolino from Newa wrapped
the week weatherwise.
Speaker 1 (33:24):
Fucking Niewell Weather Update with Alanko Trusted Animal Health Solutions.
Speaker 2 (33:37):
He's our guy at NEIWA. Chris Brandolino and Chris, I
ask you every week, and I apologize and advance again
for asking you. But our friends in North Canterbury are
desperate for a bit of rain. They haven't had much recently.
They're well behind the eighth ball. Anything coming their way.
Speaker 4 (33:52):
Yeah, good afternoon, Jammie. Unfortunately, probably nothing substantial or something
you know, Randa would want you know. It's the flow
west northwest flow. We're gonna see very active weekend. We're
gonna see some potentially damaging winds over the high country
of Canterbury, over even eastern Otago, your neck of the woods.
I would expect some really strong winds at least for
(34:12):
a period of time, probably around late morning early afternoon
towards eastern Otago for Saturday, and we'll see that strong
wind kind of affecting the high country of Canterbury, and
may it farther east toward the planes. We'll see, but
that'll cause not only the wind, but very warm temperatures.
We'll see temperatures well into the mid twenties, it looks
(34:33):
like for portions of eastern Canterbury. Then once that change passes,
we'll see much colder air. But that changed, Jamie. To
answer your question, we'll have a healthy amount of rain.
It will rain, it'll come down hard Alps west coast
and for the hydro catchments, but for our friends in
eastern Canterbury, a lot of that dries up as we
know that sort of west and northwest wind flow. A
(34:53):
bit of rain, but not what we need.
Speaker 2 (34:55):
Well, yeah, it seems to be well, it's not unusual,
but it's not good talking about situation slash droughts. At
the beginning of September. Is anywhere else in the country
behind the Eight Bowl moisture was Yeah, well.
Speaker 4 (35:09):
Look up until this recent active weather about two weeks ago,
you know, the hydro catchments were in a bad way.
I mean, the lake levels were very low. It was
making news and so that was you know, that's an area.
But all this rain recently has certainly helped them at
least take the edge off and you recover somewhat. Look
of some commentary in that, and this is by way
(35:29):
of our hydrologists. So one of the great things with
you know, working that NEE was we can tap into
that knowledge outside of my expertise. So hydrologists and you know,
what they're telling us is that you have the soil moisture.
When you see in the map looks like it's okay,
we don't see any unusually dry areas, but if you
go beneath the surface ten twenty centimeters, the ground is
(35:50):
very dry. So what happens is that when it does rain,
that water doesn't run off and go into the rivers
and streams and so this kind of this because the
ground is so dry underneat. So what happens is that
you run into this cycle until you get enough rain
to replenish the moisture at depth. It doesn't run up
into the streams. And we're approaching irrigation season, so we
(36:13):
do need the rain to kind of get that water
down and deep into the ground. If it doesn't happen soon,
then yeah, we're we're setting ourselves up to be in
a challenging situation.
Speaker 2 (36:22):
But mildly Chris Briandelena from They will always enjoy your
input to the country on a Friday, have a great
weekend and you sir, thank you very much. Thanks Chris.
We have failed to track down Barry Sober and we've
run out of time as well due to technical difficulties
of Michelle's making. Always blame someone else, Michelle always blames
someone else. I was going to chat to Baz about
(36:44):
the Mury King's funeral luxe and getting the tick from
Elon Muscots was interesting and Judith scolding, shame now, Michelle,
I know you're a keen Rugby supporter as well. Oh yes,
you're right, farm strong sign off, let's do that. We
all have days when nothing seems to go right. That's
why it's handy to add some mental skills to your
(37:06):
toolkit to help you deal with them. Head to the
farm strong a website for free resources on how to
deal with setbacks and challenges and keep life in perspective.
That's farmstrong, dot co, dot and z. To find out
what works for you on your farm and lock it in.
Speaker 1 (37:26):
Catch all the latest from the land. It's the Country
podcast with Jamie McKay thanks to Brent Starkest of the
leading agriculture brands,
Catch all the latest from the land. It's the Country
Podcast with Jamie McKay. Thanks to Brent. You're specialist in
John Deare construction equipment, No No.
Speaker 2 (00:31):
Gooda New Zealand and Welcome to the Country, brought to
you by Brant but a cold heart rocket Man. I
caught up with the Rocketman yesterday in Wellington. Sir Peter
Beck on the show very shortly, but we're kicking it
off with Antonio Watson, who is the chief executive of
our biggest bank, a n Z Our farmers getting a
(00:53):
fair deal when it comes to risk margins for rural lending.
We'll ask and Antonio on the show today, Jen Corchran
talking a sheep Meet from Rabobank, The Southern Man Farmer Panel,
Nigel Wardhead, former Young Farmer of the Year, Blair Block,
a Drisdal Award winning environmentalist. He probably is as well
(01:15):
an arable farmer. Chris Brandolino from Newark, Barry's Soaper from
or Talking Politics. It's been a very interesting week. But
let's welcome on to the Country, the chief executive of
our biggest bank and Tonio Watson. And Antonio, I have
to declare an interest here. You're a good friend of
a good friend of mine. We walked the Milford track together.
(01:38):
She sent me a text earlier in the week saying,
be nice, but I can't be too nice. You'll accept that,
won't you.
Speaker 3 (01:45):
That's absolutely fine, Jamie.
Speaker 2 (01:46):
All right, let's rip into it. Our farmers getting a
fair deal, because I've been giving the A n Z
and other Ossie banks a bit of a stir up
when it comes to risk margins for rural lending.
Speaker 3 (01:59):
Farmer is getting a fair deal? You used to think
they are. I mean, I actually got the numbers this morning,
and I think it's better to look at the all
up rate because risk margins are on top of a
base rate than they can vary among banks, and for
other various reasons. So all up, our farmers are paying
an average of eight percent variable and our home home
browers are paying an average of seven point six percent variable.
(02:22):
So when you think of the difference in the risk
between those two sectors, I think that's pretty fair.
Speaker 2 (02:26):
How much more risky is rural lending than residential lending?
Obviously residential lending is much more liquid. It's probably a
hell of well. It is a lot easier to sell
a house than a farm.
Speaker 3 (02:39):
Sure, and it is more risky, and that's why we
have to hold more capsule against our rural lending. And
if you think about the reasons for that, the exposure
to commodity cycles, weather events, export demand, exchange rates. One
other thing, if you think about it, when we think
about a home loan, what do we worry about? Were
worried about interest rates going up? Well, that's been something
(02:59):
that's been experienced by both farmers and home borrowers. We
think about people losing their jobs, Now, that's something that
happens in a far less we think about it as
losing your income. That happens in a far less concentrated
way in the housing sector than it does in the
rural sector, because when incomes go down, they go down
across the whole sector. And the other thing thinking about it, like,
(03:22):
you know, if you lose your home in a flood
or in a fire or something like that, it will
usually be ensured, and it's much tougher to ensure the
entire set of risks that might happen around a farm.
And it's a bank that step in if something like
that goes wrong, as you saw last year with some
of those other events, A and.
Speaker 2 (03:38):
Z still got the biggest rural book because if we
go back in time, you combine with the national bank,
the national Bank took over the rural bank portfolio. Does
that still make you the biggest player in the game.
Speaker 3 (03:50):
Yes, yes, we are still the biggest player in the game,
and we're very proud of that.
Speaker 2 (03:54):
Talk to me about ease of changing banks, and this
is across the board because the government wants to be
like a power company where you can basically go online,
tick a box, and where you go, you can change
your bank. Now, that might be okay for people with
residential mortgages, but it's almost impossible. And I'm sure you'll
agree with me. For farmers if they're unhappy with a
(04:16):
n Z or ASB or whoever, the change to another bank.
The other banks don't want to know you.
Speaker 3 (04:22):
If the starters, I'll probably answer it in three sections.
So yes, if you're talking about your redel transactions accounts
or your home, that's pretty easy. And we actually have
a commitment that we will move your banking. We will
do all the hard work to move your banking within
five days or you just all you need to do
is tell your old bank. Actually, no, tell your new
bank and they'll make all the arrangements for farming. I
(04:44):
think it's easy to move if you're in really good shape.
It's really competitive out there amongst the big five banks
are involved in aggre lending. And in fact, you saw
qu Bank the other day saying, look, we're not going
to play in the aggre space because we think it's
too competitive and what's the upsides for us. So I
think there's a lot of competition there. It's when it's
it's when times get tough, it gets less competitive and
(05:05):
harder to move because when your cash flow is not
really supporting your the cost of repayment and interest on
your lending, it's tough for a new bank to take
on your loan. So that's what it's really important for us.
For what we see is that we support our farmers
through the cycle so that you know they can weather
out the tough time so when times turn round again.
(05:27):
But it is I acknowledge it be harder to change
change banks.
Speaker 2 (05:31):
Would you welcome competition from a beefed up or better
capitalized key we bank because the government's talking about that.
Wouldn't it be in everyone's interest if we had more competition?
Speaker 3 (05:42):
Absolutely, look, we'd say bring it on. As I just said.
Keyi Bank has said they specifically don't want to play
in the agrispace because of the competition, but we welcome
all competition. They've been taking something like twenty five percent
of new housing lending in the last wee while, so
I'd say they're doing a pretty damn good job of
being competitive player.
Speaker 2 (06:01):
Now, we don't want our banks to collapse under a
financial crisis or anything like that. But I note, Antonia
that you at A and ZA getting a thirteen point
eight percent return on equity, is that excessive? You're doing
better than most businesses.
Speaker 3 (06:16):
I know, I don't know that number. We reported a
eleven point seven percent return in the first half and
was around about twelve last year. But if you compare that,
so what you need to compare that to is our
cost of capital. Our cost of capital depending on you know,
there's a range as between ten point six percent and
(06:37):
sort of somewhere in the twelve That is the minimum
amount that an investor is prepared to accept in order
to not put the money somewhere else, like put it
in the bank. So we earn a return that's modestly
above our cost of capital, which I think again is fair.
I mean as an industry in New Zealand. Sadly, I
think some of the conversation in this space should turned
(06:58):
to white wing chouraging more key we sabor investment. How
can we grow our savings back based in New Zealand
so that we can have more of the banks owned
with the New Zealand But the fact is we need
foreign investment. We have the largest foreign direct investment in
A and Z in the country and we need to
have a return, you know, modestly above cost capital to
(07:18):
make sure that we continue to have people wanting to
invest in our banks so that we can leend it
took to your listeners.
Speaker 2 (07:24):
Yes, fair enough for Antonio. But I note that the
four Assie banks are all in double digits in terms
of return on equity, whereas rabobanks sitting at nine, Kiwi
banks sitting at seven point five. Does that mean they're
not run efficiently?
Speaker 3 (07:41):
So RABO is a bit different because they're a branch
of an overseas bank Kiwibank. It's a scale thing really,
so Kwibank has a lot of the fixed costs that
we have around technology. You know that they still need
to have a branch network, all those sorts of things
and regulatory costs. They still have to comply with the
(08:02):
same regulations that we do, yet they don't have the
revenue base because they're not as big, and it's much
easier to be a scale player in banking. That is
double digits. But as I said, our cost of capital
is double digits as well, and we do need to
provide a decent return to our shareholder so they will
continue to invest in us.
Speaker 2 (08:18):
Are you trying to reduce the size of your rural book?
Speaker 3 (08:22):
No, we've actually been. We're really in this over the
last four months. When you think about the tough times
we're in in some of my comments earlier, we've actually
grown our book and we've grown it above system. So
we're really pleased with that.
Speaker 2 (08:33):
Okay, let's talk about interest rates. How many more OCR
cuts were we had before Christmas? Because I know we've
only got two more OCR reviews. Are we likely to
get twenty five basis points at each of those? Or
should I be asking this question to Adrian or And
then the other question is when do we bottom out?
When do we get to OCR nirvana or where's a
(08:56):
fair balancing point?
Speaker 3 (08:58):
Well, our economists. So I imagine you'll have Sharon's on
your on your show at some time. They're saying at
each OCR this year it'll be a cut. So that's
another fifty basis points this year. And they're predicting a
floor of whatever, you know, the new normal of three
and a half percent sometime next year. So it's quite
(09:18):
a significantry. That's two percent overall reduction since the top
o CR rate.
Speaker 2 (09:22):
Okay, just put it into Layman's terms. Where does that
leave a floating residential mortgage when we bottom out?
Speaker 3 (09:30):
Ooh, So if we're saying it's an average of seven
point six, now I guess that's an average of five
point six depending on you know, there's a lot of
other things that go into pricing, but floating are the
ones that follow the ocr the most closely.
Speaker 2 (09:43):
Hey, Antonio Wattson, I think I was far too nice
to you today, too soft after walking the Milford track
with you. You're too nice a person, You're too hard
to fight with.
Speaker 3 (09:54):
I don't want to pick a fight with you, Jamie.
Speaker 2 (09:56):
No, who well, I don't know. No, look look at
I'm pleased to get some of the explanation from you,
and just one more question for you on that front,
and I know you'll run for cover on this one,
but do you think that the Rural and Business book
do subsidize the more competitive residential portfolio because we know,
(10:18):
as you said, keew Wei banks into that boots and all.
So that's where you want to be, isn't it.
Speaker 3 (10:24):
I can assure you that it doesn't. Just we've run
the numbers because we're preparing for the Parliamentary Select Committee,
and we earn a little bit below the returns on
our Eggy book, burns a little bit below the returns
on our housing book.
Speaker 2 (10:38):
Well you might have to argue that one with Nichola Willis.
She might be a tougher argument than me. Good luck
with you on Thank you very much, Antonio Wattson there,
Chief Executive. What happened to Elton and Jua lipa great song?
Speaker 4 (10:53):
Well?
Speaker 2 (10:54):
Talking about rocket men, I caught up with one yesterday
in Wellington for the investiture at Government House. What a
great what a great day it was. I'd never been
to Government House. I know most of you probably haven't.
I didn't even know that they ran public tours there.
And if you're wondering where it is, it's just out
(11:14):
the back of the Basin Reserve. It has it's like
thirty acres twelve hectares. The drive, the main drive up
to Government House takes about five minutes exaggeration, but it's
beautiful gardens and Government House itself is just magnificent, magnificent.
(11:35):
And we were lucky enough, obviously to meet the Governor
General name Cindi Kero, who was lovely and most welcoming,
most down to earth, and she's had a tough week
because she kind of had to make a decision between
staying in Wellington for all the investitures or obviously yes,
that are going to the funeral for the Maori King.
(11:56):
I know she was up there earlier. In a week.
It's two rung wi. So yesterday I managed to catch
up with the star of certainly our group anyhow, Sir
Peter Beck, the Rocketman. Here's a week conversation I had
with him after the break just after our investiture.
Speaker 5 (12:18):
Cool, cool, hard, he's gone a long long time.
Speaker 1 (12:32):
Touch down brings me run again, ger.
Speaker 2 (12:37):
Man.
Speaker 6 (12:37):
I think I am.
Speaker 2 (12:44):
Well Government House for the first time, and I'm lucky
enough to be in the same group at the investiture
for the King's birthday. Honors as Sir Peter Beck, the
rocket Man, like me, a fellow self and a Peter.
Great to meet you. In fact, your mom came up
and said hello to me, because once a Southlander, always
a Southlander. She's very proud of you. You must be
very proud of what you've managed to achieve. Yeah, but
(13:06):
it's always takes a big team, as everybody knows. And
you know, I kind of look at this one as
the one for entrepreneurs and engineers and small businesses alike.
So your history is Southland are born and bred, and
I know that you've been tinkering all your life, but
you also had a stint before you became famous working
at Fisher and pikel and Moscow. I'm based in Dunedin
(13:27):
now and you learned some of your art there.
Speaker 7 (13:29):
Yeah, absolutely, I was. I was super fortunate. You know,
I did my trade there as tall and die maker,
and we're giving lots of opportunities to move into the
design office and right throughout that whole organization. And you
know I would I would do the you know, the
general kind of Fisher and Pipal thing during the day,
but during the evening, you know that the team would
let me build rockets and fluff around in the workshops
(13:52):
at night. So it was it was really really lucky,
you know, great environment to grow up and learn, but
also super you know, to have the support of that
whole organization.
Speaker 2 (14:01):
You kind of are in New Zealand's Elon Musk, really,
aren't you.
Speaker 7 (14:05):
Well, I preferred the thing I'm a New Zealand's Peter
Beck rather than Elon Musk, but certainly we have rockets
in common.
Speaker 2 (14:11):
Well, I mean he's the biggest rocket guy in the world.
Are you the second biggest rocket guy in the world.
Speaker 7 (14:16):
Well, we are the third most frequently launched rocket in
the world. So it goes Elo launches the most, then
it's China, then it's us.
Speaker 2 (14:25):
So what next for Sir Peter Beck.
Speaker 7 (14:27):
Well, look, we've got a big rocket program underway, so
the Neutron rocket, which is a significantly larger vehicle and
also a tremendous number of spacecraft and development. And in fact,
we've got two spacecraft that we just finished up a
few weeks back that are sitting out at the Cape
Canavil right now ready to get launched to Mars, and
they'll arrive at around Mars in a couple of years time.
Speaker 2 (14:46):
So it's twenty twenty four, you're still going to be
about I'm making this assumption and I'm sure you will
be in twenty fifty. Final question for you, what's the
world You're a visionary, you're an entrepreneur, you looked into
the future. What's the world going to be like in
twenty fifty. Well, I think the world right now is
a little bit of a tough, tough time.
Speaker 7 (15:02):
But I'm always a bit of an optimist and futurist,
and I think in twenty fifty, you know, the world's
going to be in a much much more interesting place
for sure. And you know, space where we're right at
the very beginning of the cusp of commercializing space. So
by the time of twenty fifty, you know, I think,
you know, life on Earth will be significantly improved by
all the services that are being provided by space. But
(15:25):
you know, maybe we can do this in twenty fifty
on a space station somewhere.
Speaker 2 (15:29):
So, Peter Beck, it's been a real pleasure to meet
you and to receive our investiges together at Government House.
Speaker 7 (15:35):
Well, congratulations yourself well deserved.
Speaker 2 (15:38):
Can you can that last comment there, Michelle, what a
nice bloke he was, and a big, a big shout
out to Sir Peter Beck's mum and good South London
and good afternoon by the way, Michelle, thank you and
Rowena for looking after the place in my absence. So
everyone was giving me heats. Don't be a fan boy,
(15:59):
don't kind of cure you up and ask for a
radio interview. And I'm keeping an eye on and we're
getting near the end and I'm thinking my chance is
slipping here, but mum Anne comes over and says, hello,
I think she might be a hock and NELLI listener,
good on you.
Speaker 6 (16:12):
Ann.
Speaker 2 (16:12):
Anyhow, she said, Peter, come over and meet Jamie. And
so there was my chance and I took it to
interview the rocketman.
Speaker 8 (16:21):
That's pretty cool actually that she is a big enough fantasy.
Speaker 2 (16:24):
Well, I don't know. I don't know about a fan,
but it was my inn because these can be very
awkward moments. But isn't that interesting? I said to him,
he's made in Bristle, but he kind of he looked
at me awe bit sideways when I said to him,
are you kind of New Zealand's Elon Musk? And he,
I don't know if there's much love lost between the
two rocket men. So Elon's number one, Shana China is
(16:47):
number two, and our guy from Invercargo who learned his
trade at Fisher and Pikel and moscle here is the
number three rocketman in the world. She's going to have
a big influence on the future of the world over
the next couple of decades. Got to take a break
on the other side of it, Peter Beck, or so
Peter Beck's a futurist, What about the future of sheep?
(17:10):
Meet Jen Corkran from Rabobank next on the Country.
Speaker 6 (17:14):
Well, and there's no one there to raise them if
you do.
Speaker 2 (17:30):
She is a Rabobank Senior Animal protein Analyst. Her name
is Jen Corkran. The September Agribusiness Monthly is about to
be published today on the Country, We're giving you a
wee sneak preview, and I can tell you that dairy
and beef are looking quite positive. But Jen Corkran, I
want to talk to you about sheep meat because that
is right in your wheelhouse. It's been tough going, let's
(17:52):
not sugarcoat it, but we are seeing some promising signs.
Speaker 9 (17:57):
Hi Jamie, and yes, it's a great time to talk
about some sheep meat things too, right as these newlands
sort of running around the countryside. And we've actually also
got an other research report coming out next week, so
we can shed a little bit about that, and this
is focusing on watering the green shoots and New Zealand
sheeap meat.
Speaker 10 (18:17):
As we go forward.
Speaker 2 (18:18):
I've had a sneak preview of your commentary on this one,
and while it is looking more positive, basically the messages
don't get carried away. Twenty four to twenty five is
going to be better than twenty three twenty four, but
it's still going to be challenging. But looking further ahead,
we definitely can see some improvement.
Speaker 9 (18:38):
Yes, I think so, Jamie, you know, having a deep
dove into sort of the data and what we've been
doing here in New Zealand and some of the challenges
that we've seen the last eighteen months. We're written in
the sand after the good times in twenty one and
twenty two really around that diminished sort of global demand
with the economic downturn, and also obviously the big influx
(19:01):
of inventory from our friends across the ditch producing a
heap of sheet meat all at once. So there's plenty
of green shoots into this new season. However, I think
we just need to sort of water them carefully as
you do with a new grass panic, and nip off
those green shoots so that they can flourish. Because things
won't necessarily be easy this coming year. But there's some
(19:24):
certainly some positive long term game ma sheet meat in
my opinion, and some opportunities from New Zealand to grasshold
off so that we don't see this huge boom and
bust in the future.
Speaker 2 (19:37):
Yeah, okay. Rabo research ieu Jen believes there are three
pathways to help lift earnings through the cycle, and the
first one is probably reasonably self evident. Or of this
reassessing trade and diversification away from China. China has been
great for us in the past couple of decades, but
(19:58):
we have had too many eggs in there. It's so
easy to say, go away, diversify away from China. But
where do we go to?
Speaker 9 (20:05):
Yeah, great point, And China has been a very important
market for New Zealand and sheep meat and other commodities
you know that we're exporting. It's an important market for
the lower value parts of the carcass, you know. So
the new Zealand farm gate prices are very much affected
by our process and exporters utilizing the whole of the
carcass and getting as much value as they can from
(20:26):
every single part of it. So China remains important. However,
you say, there's been a lot of eggs in the
one basket, so we need to look around to see,
you know, where else we can go here, and it
is challenging. But in saying that, you know, Australia produces
a heap of sheep meat, it's us in them exporting
to the world, and they have other markets to some
of the stuff too. It's the Middle East, there's some
other Asian markets too, And I understand, you know, it's
(20:49):
not easy to just switch to flick the switch and
shift into some of these markets straight away, but it
is an opportunity for change because if we rely heavily
on one market and it stops buying, we're going to
see this astount.
Speaker 2 (21:03):
Yeah, and the Assie's have got a bit of a
sweetheart deal with India which we haven't got at the moment. Look,
here's another one that you mentioned, focusing on increasing domestic consumption,
and I think this is a real opportunity for the
New Zealand sheep meat industry. We're not getting rich on
the world export market at the moment. We gave Kiwi's
a taste of lamb around Christmas time when the supermarkets
(21:25):
were special in it. I'd like to see more of that,
more promotion. And you know, I know we've got National
Lamb Day and the likes the Aussis do a great
job of it with their national Day. We need to
eat more lamb and make it try and make it
affordable for Kiwi's.
Speaker 9 (21:40):
I think so too. And I you know, that's a
bit of a cheeky one to throw in a report
like this statement. But if you look at what we're
eating compared to what the Australians are eating, Jamie, it's
it's quite remarkable. I think they eat about three times
as much lamb as US according to the OECD data.
And they do a great job of promoting the Australian
(22:02):
lamb and they do it really well domestically, and they
do it really well globally in terms of pushing that
amazing product to the world and to the local consumers
as well. And what can be said for domestic consumption
as it takes a little bit of control back. You know,
we're very much at the mercy of macro, you know,
ecomic convinced in an export nation. So eating even just
(22:25):
a little bit more here on home soil, we can
take a little bit of control back now. I know
that might not be easy from a supply chain point
of view, but that's no reason to shut a conversation
down around eating this amazing healthy protein. It's full of
iron and easy to do it.
Speaker 2 (22:39):
Gen corkran out a Rabobank Thanks for your time. The
report is titled Watering the Green Shoots and New Zealand
sheep Meat. You can read all about it next week.
We've given you a sneak preview, but you can read
the September Agribusiness Monthly now at rabobank dot co dot
m Z. Safe travels home from Blenheim to Hamilton. See
you later.
Speaker 10 (22:56):
Thanks Danne.
Speaker 2 (23:00):
Twenty five away from one, you are with the Country
brought to you by Brent. I'm going to try and
turn the tally on. I think Saberlenka is on at
the US Tennis Open at the moment. She's got a
big social media game, that girl. I'll give her that. Anyhow,
(23:22):
we'll update that for you very very shortly, but before
we can do sports news, which I haven't read yet,
I must read it. I'll read it while Michelle Watt
does rural news.
Speaker 1 (23:31):
What the Country's world news with Cob Canet, New Zealand's
leading right on lawn Bower Brand. Visit steel Ford dot
cot INCI for your local stargistwhere you go.
Speaker 2 (23:44):
Yes, I have, unfortunately, well, I mean otherwise I want
better read sports news.
Speaker 8 (23:48):
I couldn't tell from the side.
Speaker 2 (23:49):
Sorry.
Speaker 8 (23:50):
Market regulators have knocked backs and lay founder John Pennow's
complaint over the processes playing planned capital rais. Last week. Penow,
who was on the duel listed company's board until May
this year, complaining to the Takeovers Panel and the New
Zealand redg Co that Bright Dairy and a two milk
company shouldn't be able to vote on the resolutions that
will see two hundred and seventeen point eight million rays
(24:10):
to enable the company to its divulge its balance sheet
have approved. Bright will once again take controlling steak by
contributing one hundred and eighty five million at an issue
price of sixty cents a share. That vote takes place
in Dunsandal on September eighteenth.
Speaker 2 (24:25):
Well, I might be oversimplifying this, and we had a
brief yarn about this one this morning. I don't see
how Sinlay shareholders have got much of a choice there,
despite what John Peno says. It's I don't think Turkey's
normally vote for an early Christmas today.
Speaker 8 (24:41):
No, we were discussing this. Yeah, it seems like they
don't have much of a choice, but we'll wait to
find out.
Speaker 2 (24:46):
Yep, was it Sinlay this week that came out while
I was away? I think it was suddenly came out
and went from eight dollars to eight sixty, which is good.
They did, yes, and we of course we kicked off
the show with Antonio or Watson, chief executive of a
n Z Well earlier in the week. See they went
to nine bucks. They're leading the charge. Rabobanks currently at
(25:09):
eight sixty. Fonterra's at eight fifty, so those numbers are
starting to look pretty well positive. We got to nine dollars,
that would be great. Still not making a fortune because
it costs too much on farm these days, but it's
a lot better number than six fifty, which we were
looking at this time a year ago. So there's rural
(25:29):
news with Michelle. So someone's left their SkyTV on the
golf channel. We want the tennis channel. Someone you might no, No,
I haven't been here. You can't blame me.
Speaker 3 (25:40):
You might.
Speaker 2 (25:41):
You might have to whip out to the rack room
there to change it. You probably don't even it's quite complex.
I can change it. I can change it. So sports news,
have I played the liner, No, I haven't.
Speaker 1 (25:54):
Sports were then as Goo Kiwi to the boone since
nineteen oh four.
Speaker 2 (25:59):
And that's because I was trying to changed to the
tennis channel. I've been scolded, scolded by Michelle for my
own competence. So Belarusha's Urena Sabolenka has dominated American Emma
Navarro six three in the first set of the US
Open semi final. You would have to think that she's
(26:21):
the hot favorite. Now that the Polish woman it's Fiontek
I think is a name, is out, so keep an
eye on that one. The US Open really really interesting
at the moment, and the rugby calendar continues to be
potentially or to potentially move in a different direction. From
twenty twenty six, after news of an all Blacks tortoise
(26:42):
South Africa. This is wonderful. The Sydney Morning Herald reports
a Bledislow Cup test is also likely in Perth on
Anzac Day that year. I was going to say, Rowena,
your name's not Rowena, Michelle. That's great news for me
because I've got a mate called Hideous Ross and he's
a great bloke primary schoolmate of mine and all of
(27:04):
us Riversdale boys we want to go to Perth to
watch a Leedersload Cup. If you're listening, lads, we're over
there in twenty twenty six. We're going to stay with
Hideous Ross. He'll get us into all sorts of problems.
But Perth is a great city. I've only been there
once for six hours, never left the airport. Could be interesting, Yeah, no,
it'll be fantastic, so and so will a tour. That
(27:26):
would be a great trip as well a tour of
South Africa. I think there's three tests and there might
be five provincial or super franchised games or whatever they
call them. Great nation to tour, right, we'll take a break.
On the other side of it, it's the Farmer Panel.
Speaker 1 (27:43):
Hard done.
Speaker 2 (27:46):
Bags lawst name revelayed, welcome back to the country. It
is fourteen away from one. We've tracked down the farmer panel.
Speaker 1 (28:01):
The Farmer banal with the Kawasaki mule, one thousand side
by sides built for demanding days.
Speaker 2 (28:07):
Yeah, it is the twenty seventeen Young Farmer of the
Year Nodge or Woodhead and South Otago and an award
winning arable farmer, at least I think he is. He's
certainly a great ambassador for Jimmy's Pies. Blair Blocker Drysdale
out of Belfer in Northern Southland, just up the road
from the capital of Northern south and Riversdale couldn't help
(28:30):
my south Blocker. How's the season going in Southland?
Speaker 11 (28:33):
Well, yeah, looking here, I was but to congratulate you
on your gong and you throw the pies at me.
Speaker 2 (28:38):
But anyway, well you're a walking billboard for the Jimmy's
Pies from Roxburgh.
Speaker 11 (28:45):
Well hockeys, that is true. I do biden by the
box these days, so yep, I do enjoy good Jimmy's.
I don't think that's a secret in you.
Speaker 2 (28:51):
No, and they are good. So you're an arable farmer.
I know you do a book bit a larve stock
grazing on the side. You know, this time of the
year you started to look at getting crops into the ground.
How's it going.
Speaker 11 (29:04):
Yeah, look, just trying to fit spraying and ferred in
at the moment, Jamie. And it's pretty frustrating for anyone
in the arable world down here at the moment, working
between wind and rain. So started the spray of this
morning and just jumped off the spray before putting ferred on.
But it's even just getting on the windy side of
putting that on. Really, So after you know, a good
old fashioned traditional hard winter, it looks like run for
a good traditional windy spring. So we wait for planting anything.
(29:27):
Yet we won't originally planting spring crops until sort of
early mid October, so the peas and Asianbraska's that sort
of thing will go. And then so we want to
wait getting ground conditions where they just about right a
week ten days go to get into it for all
the rain hits. So but we'll quite a lot of
rain here, and it's just mother's nature's way of telling
us to slow down and be a little bit patient.
Speaker 2 (29:48):
Jaming well spring is the most challenging of all the seasons,
isn't it. Well, one man who's hoping for a kind
spring like all Sheep Farmers do, because Lemming needs a
kind spring. As Nigel Wood, the twenty seventeen Young Farmer
of the Year, farming between what Belcluther and Milton and
South o'k otago there, Nigel, you'll be wishing you were
(30:08):
lambing out there today.
Speaker 10 (30:09):
It's quite mild, Yeah, afternoon afternoon, Jamie, Yeah, that's beautiful
day to day. Actually we breeze, but it's nice and warm.
And yeah, it's as primo Lemming whether we don't start
for another four or five days. So I'm just in
the middle of spreading all the us out and set
stock in twins and we'll do the singles over the
weekend and all how will break loose next week. It's
(30:32):
going to be good.
Speaker 2 (30:33):
And I don't know whether you caught up with what
Jen Corchran from rabobank had to say earlier in the show,
but you know, it's not going to be an award
winning season for Sheep Farmers, the one we're coming into.
But she said it's going to be better than last
season mindeur would need to be. But she's talking a
bit longer term about better prospects and I really picked
up on the commentary she made about trying to increase
(30:54):
domestic consumption of lamb.
Speaker 10 (30:58):
Well, yeah, we're going to need all the Kewis need
a lot of lamb. I get through all the lambs
in New Zealand. But I mean every little bit helps,
doesn't it.
Speaker 2 (31:05):
Yeah, Well the hang on. The Aussies eat three times
per capita more lamb than us, so there's no reason
we can't match them.
Speaker 10 (31:12):
Oh no, no doubt at all, No, no doubt at all.
I mean, you know, we produce a fantastic product and
an ideal word would love it if if you run
in New Zealand could eat as much of it as
they wanted to. I mean, it seems like a lot
of it gets priced out of Kiwi's budgets at the minute,
which is unfortunate. I think it seems more about the
(31:33):
financial situation of our country and the people in it
more so than the product.
Speaker 2 (31:38):
Yeah, but when farmers are only getting paid six bucks
of kilo or a wee bit better for lamb, you
would have to think that in some shape form or other,
it should be affordable in our supermarkets.
Speaker 10 (31:48):
Well you'd like to think so, because we're not getting
paid a whole lot for it. So yeah, I mean,
we did our budget earlier, finished it off earlier in
the week, and I think I've got seven bucks of
Quilo and free Christmas and six after Christmas, So it'll
be interesting to see if that comes to fruition or not.
And you're, like you said at the top, Yeah, we're
definitely hoping for a better financial.
Speaker 4 (32:08):
Year last year.
Speaker 10 (32:09):
It won't be particularly hard because she was pretty tough.
Speaker 2 (32:11):
Okay, Blair, fine, quick final question for you, because I
need to catch up with Chris Brandelna before the end
of the year. Are arable farmers going to make any
money this year?
Speaker 4 (32:21):
A lot?
Speaker 11 (32:21):
Everyone else, Jamie, m Margins are getting you know, thunder
and thinner and squeezed all the time, so it's tough
for us there. And put price is still some relatively high,
and commodity prices we're getting for week and Barley are
still stubblingly low. They've got a four in front of
them and they really need a good five in front
of them. So yeah, it's not easy for anyone at
the moment. Jamie. It's still stuck in that COVID hangover, unfortunately,
(32:42):
it seems. And you see Balance lift their prices a
few days ago and I suspect if ravensdown doesn't do
it shortly, they'll weeding up dropping, you know.
Speaker 2 (32:50):
Yeah, Okay, well hope, So competitions hopefully alive and well
on the fertilizer industry. And Nigel, I've got like twenty seconds.
Great news that the Young Farmer Grand Finals coming to
and for Cargo next year.
Speaker 10 (33:01):
Oh, it'll be awesome year. I was involved in twenty seventeen,
twenty eighteen down there and it was an awesome event,
so no ideat it would be great again.
Speaker 2 (33:08):
Okay, there we go. That's today's Farmer Panel. Thanks to
the Carwasaki mule. We're going to take a break on
the other side of it. Chris Brandolino from Newa wrapped
the week weatherwise.
Speaker 1 (33:24):
Fucking Niewell Weather Update with Alanko Trusted Animal Health Solutions.
Speaker 2 (33:37):
He's our guy at NEIWA. Chris Brandolino and Chris, I
ask you every week, and I apologize and advance again
for asking you. But our friends in North Canterbury are
desperate for a bit of rain. They haven't had much recently.
They're well behind the eighth ball. Anything coming their way.
Speaker 4 (33:52):
Yeah, good afternoon, Jammie. Unfortunately, probably nothing substantial or something
you know, Randa would want you know. It's the flow
west northwest flow. We're gonna see very active weekend. We're
gonna see some potentially damaging winds over the high country
of Canterbury, over even eastern Otago, your neck of the woods.
I would expect some really strong winds at least for
(34:12):
a period of time, probably around late morning early afternoon
towards eastern Otago for Saturday, and we'll see that strong
wind kind of affecting the high country of Canterbury, and
may it farther east toward the planes. We'll see, but
that'll cause not only the wind, but very warm temperatures.
We'll see temperatures well into the mid twenties, it looks
(34:33):
like for portions of eastern Canterbury. Then once that change passes,
we'll see much colder air. But that changed, Jamie. To
answer your question, we'll have a healthy amount of rain.
It will rain, it'll come down hard Alps west coast
and for the hydro catchments, but for our friends in
eastern Canterbury, a lot of that dries up as we
know that sort of west and northwest wind flow. A
(34:53):
bit of rain, but not what we need.
Speaker 2 (34:55):
Well, yeah, it seems to be well, it's not unusual,
but it's not good talking about situation slash droughts. At
the beginning of September. Is anywhere else in the country
behind the Eight Bowl moisture was Yeah, well.
Speaker 4 (35:09):
Look up until this recent active weather about two weeks ago,
you know, the hydro catchments were in a bad way.
I mean, the lake levels were very low. It was
making news and so that was you know, that's an area.
But all this rain recently has certainly helped them at
least take the edge off and you recover somewhat. Look
of some commentary in that, and this is by way
(35:29):
of our hydrologists. So one of the great things with
you know, working that NEE was we can tap into
that knowledge outside of my expertise. So hydrologists and you know,
what they're telling us is that you have the soil moisture.
When you see in the map looks like it's okay,
we don't see any unusually dry areas, but if you
go beneath the surface ten twenty centimeters, the ground is
(35:50):
very dry. So what happens is that when it does rain,
that water doesn't run off and go into the rivers
and streams and so this kind of this because the
ground is so dry underneat. So what happens is that
you run into this cycle until you get enough rain
to replenish the moisture at depth. It doesn't run up
into the streams. And we're approaching irrigation season, so we
(36:13):
do need the rain to kind of get that water
down and deep into the ground. If it doesn't happen soon,
then yeah, we're we're setting ourselves up to be in
a challenging situation.
Speaker 2 (36:22):
But mildly Chris Briandelena from They will always enjoy your
input to the country on a Friday, have a great
weekend and you sir, thank you very much. Thanks Chris.
We have failed to track down Barry Sober and we've
run out of time as well due to technical difficulties
of Michelle's making. Always blame someone else, Michelle always blames
someone else. I was going to chat to Baz about
(36:44):
the Mury King's funeral luxe and getting the tick from
Elon Muscots was interesting and Judith scolding, shame now, Michelle,
I know you're a keen Rugby supporter as well. Oh yes,
you're right, farm strong sign off, let's do that. We
all have days when nothing seems to go right. That's
why it's handy to add some mental skills to your
(37:06):
toolkit to help you deal with them. Head to the
farm strong a website for free resources on how to
deal with setbacks and challenges and keep life in perspective.
That's farmstrong, dot co, dot and z. To find out
what works for you on your farm and lock it in.
Speaker 1 (37:26):
Catch all the latest from the land. It's the Country
podcast with Jamie McKay thanks to Brent Starkest of the
leading agriculture brands,
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