November 24, 2025 • 38 mins
Jamie Mackay talks to Miles Hurrell, Michael Every, Richard Wyeth, and Peter Newbold.
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Speaker 1 (00:00):
Catch all the latest from the land. It's The Country
Podcast with Jamie mckuae. Thanks to Brent, You're specialist in
John Deere construction equipment.
Speaker 2 (00:21):
GEMO.
Speaker 3 (00:22):
Listen to your ma.
Speaker 4 (00:24):
Good good afternoon, New Zealand. Welcome to the Country. The
show's brought to you by Brandt. I'm Jamie McKay. Schmaltzy
eighties songs is the musical theme today. Today's keynote interview
What's going to be with Michael Every rabobanks Singapore based
(00:46):
global strategists, But then Fonterra decided to steal his thunder
a webit by announcing dropping the milk forecast price. No
surprise at all. We're going to kick off the show
with Miles Horror. We'll catch up with Michael Every talk
about all sorts of things, global geopolitics, the New Zealand
(01:08):
domestic economy and if Trump sells out Ukraine, how could
that help New Zealand farmers. Richard Wyeth scheduled to chat
to him before the Fonterra announcement came out. He's the
new chief executive of Sinlade, former chief executive of Meraka
and Westland Milk, so he's got a good history in
the dairy industry. He fronted his first AGM at the
(01:31):
troubled Dairy Processor in christ Church last Friday. We'll catch
up with Richard good Bloke too and Peter Newbold. How
much is your farm work worth? And if you had
a dairy farm, or if you have a dairy farm
and you're thinking of sell it, of selling it, will
it be worth a wee bit less After today's announcement
from Fonterra, We've got all that to do before the
(01:54):
end of the hour. We'll have rural news and sports
news for you as well, and we'll tell you how
you can joinjoin us at the Southern Storm Shout at
Nigel and Leanne Nigel and Leand's property, Woodhead property. Get
it right at Level's flat which is between our Kluther
(02:15):
and Milton on Thursday. Looking forward to that one. Today's
big news story is Farming's worst secret. Yes, the Fonterra
(02:37):
forecast milk price has dropped to nine dollars fifty. Miles
Hurrell joins us, chief executive of Fonterra. Miles is this
totally a supply story? I too much of it?
Speaker 5 (02:48):
Yeah, you get a jammy very much a supply story,
I mean demand generally in the international market, it's not
too bad. We think the supply chains are a relatively
empty globally given and I guess the uncertainty, but yeah,
we've just seen a whole lot of milk out of Europe,
whole lot of milkout out of North America, even Latin America,
and of course back here at home.
Speaker 2 (03:05):
A lot more milk.
Speaker 5 (03:06):
And so you know, at some point that comes back
to bite us, and we've obviously got to adjust accordingly.
Speaker 2 (03:11):
Say, yeah, that's very much a supply story this time.
Speaker 4 (03:14):
So our milk volumes forecast to be fifteen hundred and
forty five million kilograms, up from fifteen hundred and twenty
five million kilograms. Is that your fault for chucking ten
dollars out there so early in the season.
Speaker 5 (03:29):
Well, you know, this is the joys of working in
the corporative. I mean, we'll give the signals. Ultimately, farmers
make their own decisions on farm So yeah, it is
up from fifteen to twenty five from a forecast perspective,
But importantly we're up from fifteen oh nine from our
last year number, so it is quite a significant increase.
So you know, circle four percent up I think year
to date, that's a lot of extra milk in the
(03:50):
international market. Put that in the context also what we're
seen out of Europe, what we're seen out of North
America and Latin America. You know, the increase that we've
seen on an anualized basis out of out of the
northern hemishere is probably another half of New Zealand again,
so you know, it's been pretty good milk price in
Europe as well in North America, and so those things there,
as I say that, they come home to roost, and
unfortunately they have. At this point, we felt it was
(04:12):
important to get out once the position came clear to
us when we cleaned up the numbers over the weekends.
So hence we've come out now a little bit earlier
than probably a market up that we anticipated next week.
Speaker 4 (04:21):
Yes, because the quarter one business update was due next week,
and that's when we want us to commentators, Miles, we're
all expecting you to move then.
Speaker 5 (04:30):
Yeah, and look, you know, the when the information becomes clear,
let's not sit on it. You know, farmers will make
decisions every day around what I guess winter grade in
contracts for next year and what feed they may purchase
for quarter one and quarter two next year. So if
any information we get, if it's clear, let's move on it.
So we've made that decision. Were also narrowed the range,
which again that that was due to be done next week.
(04:52):
So we've narrowed that range down. But the big news
story there is from ten dollars to nine point fifty,
which is still, you know, if I'm brave enough to stay,
not a bad number when you look through history, still
well above sort of cost of production for the vast
majority of our farmers. So you know, farmers should still
be pretty happy with that, recognizing of course it goes
back from last year in our prior forecast.
Speaker 4 (05:13):
Well, I'll say it because you won't well you don't
want to. If you can't make money at nine dollars fifty,
you shouldn't be farming dairy farming.
Speaker 2 (05:21):
Yeah, yeah, well you had to say. You can say that.
Speaker 5 (05:24):
But our farmers who own the CORPERAI will make their
own decisions. But as I say, I think the conversations
I've had with a couple of farmers this morning that
they understand how the market works, and as you say,
are still making pretty good money at at nine to fifty.
Of course they've still got a bit of capital expenditure
coming down the line, but a deferred maintenance from a
couple of those softy years, so you know, we don't
(05:44):
take those things for granted.
Speaker 4 (05:45):
Also, well, some of the blow is going to be
softened by your cash payout, your Santa Claus payment which
will come in the early part of next year. The
two dollars per share payout.
Speaker 2 (05:56):
Yeah, well we would least be really clear.
Speaker 5 (05:58):
It's a capital return, so you know, it's ultimately the
cash that it already exists with the cop now, so
it's ready just the repatriation of the capital that already
sits within the balance yout to the cooperative. So but yes,
that will certainly help. And again a conversation of people's
farmers is a range of views. But I think a
fair chunk will go to debt repayment and that to
ferred maintenance, and it maybe farmers need a bit of
(06:19):
a break as well, so you might see a little
bit spent on and joy and joining themselves.
Speaker 2 (06:23):
So good on them.
Speaker 4 (06:24):
Your quoted as saying the new midpoint of nine dollars
fifty per kilogram of milk solids remained an inverted commerce
strong forecast. What does that mean?
Speaker 5 (06:35):
Well, well, as I say, I still think nine to
fifty is a pretty decent number when you look back
through history recognize and of course nine fifty is not today,
is not nine to fifty from a few years ago,
So I acknowledge that, but it's it's still a pretty
solid number when you look to the past. Of course,
we've still had a heck of a lot of the
season to go, so a contract book's in a pretty
good state. We've hedged a fair way out at this
(06:57):
dollar where it is, so that that gives us some
el of confidence, but you know, still a long way
to go. We need to see what what this milk
price forecast does in terms of supply. But also Northern hemisphere,
you know, their milk price is dropping quite quite quickly
up a northern hemisphere.
Speaker 2 (07:12):
All that turned the tap off as well, probably.
Speaker 5 (07:14):
And that'll put us in a better position for the
second half, hopefully, but we'll see how that plays out.
Speaker 4 (07:18):
Is the hedging department at Fontira working overtime at the moment,
getting in boots on all of these good rates.
Speaker 5 (07:24):
Yeah, well it's interesting, you know, a good rate today,
you know, and it is a good rate with again
you look back through history, but you know people sort
of a couple of months ago we're saying, let's lock
it in because it's a good rate, so she's can
continue to fall. So you know, we run a policy
to ensure that we don't get sort of speculation in
there and just take a little bit of risk out
of it out of the book, but also goes a
long way to locking in these sort of numbers for
(07:45):
a chunk of next year too.
Speaker 2 (07:46):
So that's the policy we run.
Speaker 5 (07:47):
And you know there will always be a few critics
out there with it's the right thing to do, but
if we can remove some of that risk of volatility
for both the corporate nashyholders, that that's what we'll.
Speaker 4 (07:56):
Do, risk mitigation on them all for it. Miles Harrel,
Chief EXECU of Fonterra, Thanks as always for your time
on the country. Hi, thank you much, Jammy bang on
quarter past twelve. Thank you, Miles. Here's a text that
came in yesterday's Feel free to send us your thoughts
on the new milk price on five double O nine.
That's our text number easiest way to get a hold
(08:17):
of us from Jared and Palm regular texter Jamie. Did
you see last week's he means Sundays Country Calendar where
a Southland contractor was harvesting wilding pines adjacent to Lake
Ohal and chipping the trees for fuel to replace coal
and the boilers. Yes, I did. And he was also
(08:37):
going and shooting. Can I say that wild venison and
selling it to high end restaurants? That was a really
that's a good country calendar. I've been critical of some
of the episodes. That was a great program. I admire
that guy's drive and determination. And Jared also says under
Helen Clark's ten year review, lease hold land reverted to
(08:59):
doc and we discussed this yesterday with Jim Ward. Much
of this land at the foot of the Southern Alps
has now reverted to Gorse Walding Pine and made Garry
you bang on sheared from Parmi and as Jim Ward said,
they're great at running the National parkstock, I'm not quite
sure some of this land that probably should be grazed
(09:21):
has been well looked. After your feedbacks, Welcome on five,
Double O nine up next. It's going to be my
lead off into you. But Miles stole their thunder or
his thunder. Michael Every, he's in Singapore. We're going there next.
From Rabobank. You can't quiet always love chatting to this
(09:58):
man on the country, even if I don't always like
the message. His name is Michael Every, Rabobanks, Singapore based
global strategist. Last week, Rabobank came out with its agri
Commodity outlook for twenty twenty six. The headline more than
just Supply and demand factors shaping global agriculture and twenty
(10:18):
twenty six with geopolitics set to play a crucial role,
China be the USA, Michael Every, Surprise surprise.
Speaker 6 (10:28):
Yes, absolutely well, I'd like to think I've probably had
a little bit of input into that. And by the way,
it was completely correct, because just after it came out,
we have had the surprising news that we have a
potential Ukraine peace deal on the table. Even though the
form of it is very contentious and the final form
(10:50):
of it is unclear, it does appear as if something
along those lines is going to transpire, and potentially as
soon as Thursday.
Speaker 4 (10:59):
But as Trump's telling you crying out.
Speaker 3 (11:03):
That's a really loaded question.
Speaker 6 (11:07):
Because he certainly isn't prepared to keep backing Ukraine the
way it's being backed so far, that's abundantly clear. He
is forcing a settlement if we see the terms finally
being what we've seen floated so far, which is to
say that will withhold military aid, will withhold intel, and
(11:30):
of course we will hold funding. If you're not going
to sign up for this, that is, you know, basically
saying sign here, thank you very much. But at the
same time, if America is not in a position to
continue doing more than that in the longer run, and
Europe is unable to stand up and fill the gap,
what other option was there on the table? So I'm
not trying to take a strong editorial stance one way
(11:52):
or the other. It's undeniable the case that America is
forcing Ukraine to sign, if that is the final version
of the deal. It does also, however, garant Ukraine's sovereignty.
It does have a defense guarantee, and it does have
an economic guarantee in it to try and incentivize everybody
to benefit from peace rather than war. So it's not
completely one sided, but it is very much not what
(12:14):
Ukraine wanted.
Speaker 4 (12:15):
Rabobank's a greycommodity outlook that I've referenced for twenty twenty six.
One of the interesting numbers I looked at was GDP
growth on a global stage two point nine percent this year,
easing to two point seven percent and twenty twenty six.
What happened to the world economy is coming right?
Speaker 3 (12:34):
Well.
Speaker 6 (12:35):
I don't want to say anything negative about anyone who
put in the hard work to produce those numbers, but
I don't think they really tell much of a story.
The GDP in itself as a concept at a national
level is something I don't take very seriously. I want
to be abundantly clear there. It was set up by
(12:56):
the Americans in World War two to try and measure
military output, and somehow we've expanded it to explain anything
and everything going on around us. And I think it
knows the price of everything and the value of nothing
that's GDP for any national country. And then you've got
the questions of, you know, the quality of the data,
which is getting worse and worse as everything changes structurally.
So the world economy then incorporates loads of economies who
(13:16):
just produce really dodgy numbers, you know, because you're doing
Tom Dick and Harry rather than just just the West,
and I really really would not be trading that as
a number, not just from Rabbi, but I mean from
anyone at all, you know, as a real directionality. I'm
sure anyone who's out there on the farm has got
a far better idea of what actual supply and demand
(13:38):
looks like than someone sitting behind a spreadsheets. So let
me try to say that to, you know, to put
a positive spin on it.
Speaker 4 (13:44):
What do you think the world commodity outlook will be
for twenty twenty six from a New Zealand point of view?
And we're going to focus more in on New Zealand
on the sick and part of this interview. But do
you see commodity prices across the globe holding up?
Speaker 6 (14:00):
Well, it really depends on the geppetical outlook off That's
what we said in the hel look that we published.
Because for example, if we get this Russia deal, if
Russia is reincorporated into the global economy, all sanctions are dropped.
You know, you have a very different backdrop to the
one that would have been presumed a week ago, where
that wasn't the case. You know, there are winners and
(14:20):
losers within that, and it's too complex to unpack here.
Now I'm afraid on the call exactly who wins and
who loses, But one really easy point that you can
make is that it's definitely going to start to affect
things like diesel prices, which is good to a farmer's
because obviously diesel's used on the farm. If Russia and
Ukraine are no longer blowing up each other's refineries and
energy supplies, and if Russian sanctions are lifted on Russian diesel,
(14:44):
that's going to get that much cheaper everywhere, which is
a real boost and again goes to show how the
numbers that predict confidently what will happen next year can change,
you know, with one political decision. So remains to be seen.
But commodities are crucially regardless of that particular backdrop of
that story, very very much in the eye of the storm.
I mean, these aren't ones that New Zealand specializes in,
(15:06):
for example, the rare earth that we read about all
the time. But commodities run through the overall geopolitical architecture
like your you know the name of the holiday resort
you go to through a stick of rock, thinking about
you know what seaside towns in the UK used to
be like, so that story isn't going to go away.
Speaker 4 (15:24):
Just a final comment from you, Michael Ivery on the
equity markets. Do you buy into this AI bubble burst?
Speaker 6 (15:33):
Well, I don't talk equity. I want to be abundantly clear.
What I can mention just in terms of a concept
of AI is I don't think people understand the totality
of what we're talking about here, because if AI does
everything that it promises, well, no one's going to have
(15:54):
a job. It's as simple as that, we're going to
have miraculous breakthroughs in areas that we've never had them
in before and close for that from what I see,
you know, in areas like mathematics and physics, we can
really really push the envelope. But in terms of you know,
your mid level white colored jobs, enormous numbers of them
can be just swallowed up by technology and then a
shorter timeframe than people realize. And if you think people
(16:16):
are young people are unhappy now because housing so expensive,
we'll try telling them they'll never get a job on top.
So you know the implications for that for the economy
are shocking. And I'm not quite sure whether that tells
you stocks should be doing X, Y or z, but
I don't think it's being factored in. And on the
other hand, if AI is a complete bubble and it
doesn't do anything, and again I'm not taking a view
on that, but as we know, there are strong views
(16:36):
each different way and certainly some of the ais that I.
Speaker 3 (16:38):
Use are bloody useless.
Speaker 6 (16:40):
If that is the case, you know, then that share
price isn't justified. And then yeah, we could potentially be
looking at a huge drop in some stocks and what
would be less fanding if that were to happen. So
I look at it in a very very different way.
It will be transformative whatever happens. The question is who
is transformative for and is it transforming on top or view?
Speaker 4 (17:00):
Michael every Rabobanks Singapore based Global strategists will take a
break on the other side of it. Let's have a
look at the New Zealand domestic economy. Welcome back to
the country. We're chatting to Michael every Rabobanks Singapore based
(17:23):
global strategists. Right, let's have a look at New Zealand's
domestic economy. Now, I don't know how micro you go
on this, Michael, but we've got an ocr announcement this week,
In fact, tomorrow our time, we're talking about another twenty
five point basis strop and our official cash rate. And
that's it. What do you reckon? What's Rabobank saying? Is
(17:44):
this the bottom of the cycle.
Speaker 6 (17:47):
Well, it's import him to always keep in touch with
what our fantastic analysts Ben picked and is saying on that,
because the data do change, the bankdrop changes, and his
call can change. But he's he's certainly the view that
very close to the bottom of the cycle.
Speaker 4 (18:02):
We talked about Trump when we were talking about the
international economy. In fact, global anything has got Trump's fingerprints
all over it. Here. Domestically, last week we saw them
drop tariffs on beef and kiwi fruit. Is the more
to come?
Speaker 6 (18:20):
Well potentially, Look, I mean again, I can talk at
great length about this. When they brought their tariffs in,
they had one particular vision in mind, and now very
very clearly you are starting to see a pivot in that.
And theoretically you've got different schools of tariff thought. One
of them is you tariff everything coming in to generate revenue,
(18:41):
and the other one is why do you tariff things
that you can't produce? Yourself, like if you can't grow
keiw fruit, you like kiwi fruit, why are you bothering
to put a tariff on it? But you do put
a tariff on something that is produced by another country
that you can make yourself to encourage substitution for yours
rather than theirs. And in key we fruit there you go.
Speaker 3 (19:00):
And beef.
Speaker 6 (19:01):
Of course, the Americans can produce their own beef. They
don't have enough of it, so that would also make
sense for them to lower it on others temporarily at
least until they can manage to build up their herd.
And I believe that plus the election politics are trying
to make sure that inflation goes down ahead of November
twenty twenty six, you know, is a strong argument. I
think we'll get a lot more tweaking going forward. The
(19:22):
one thing I can tell you that won't go away
a taris they'll state the question is exactly on what
and a what level.
Speaker 4 (19:29):
We talked about international commodity prices and how New Zealand
fits and are with that, And as you said previously,
a lot of this is going to depend on what
happens geo politically, but how well positioned is New Zealand
to battle its way through twenty twenty six because we've
been waiting since COVID. Basically, Michael every for our economy
(19:51):
to come right.
Speaker 6 (19:53):
Well, so's everybody to be abundantly clear. There's no one
who's come out of COVID smiling and saying, you know,
these are the best of times. Everyone's at best saying
these are the best of times, these are the worst
of times, and some people are just saying these are
the worst of times. So you're on the same boat
as everyone else, basically, and it's.
Speaker 3 (20:15):
Really really unclear.
Speaker 6 (20:17):
I'll be very very clear on this exactly what will
transpire in twenty twenty six, just because the tectonic plates
are moving. We've already addressed the Ukraine issue, which is
huge Ragri of course, and it's huge for Europe and
it's huge for the world. But we have tensions in
Asia Pacific between Japan and China as we speak, and
(20:37):
I'm sure those are in the local headlines. We have
tensions between India and Pakistan. They haven't gone away. We
still have the Middle East, you know, on a nice edge.
We have bits of Africa where our coed like they're
about to take over control.
Speaker 3 (20:50):
Again, we've got the.
Speaker 6 (20:51):
US using gumboat diplomacy in Latin America and potentially about
to make a move on Venezuela. So we live in
incredibly uncertain times and everything can go perfectly well, and
everything can be sorted out, and things can go wrong
in different regions. And you know, some of them appear
to be moving in the right direction, some of them
appear to be moving in the wrong direction. But they're
(21:13):
all conflated, and they're all related to what America is
doing on tariffs, although it's not American terariffs cause these problems,
to be abundantly clear, they're both different, you know, different
sides of the same shape.
Speaker 3 (21:24):
Shall we say, I'm.
Speaker 4 (21:25):
Trying to get a good news story out of you
to furnish on, but fundamentally, as food, I what we
do here in New zeal I'm still a good business
to be in.
Speaker 1 (21:35):
Well.
Speaker 6 (21:35):
I mean, I'm tended to say something sarcastic and saying
no because nobody needs to eat anymore. Because you love
to ask me that question, Jamie, and every time I
do repeat, people eat right. That truism never goes away.
But I don't have a more original way to put it.
Speaker 3 (21:51):
Than that that. Yeah, if everyone.
Speaker 6 (21:54):
Listening regularly hasn't heard me say it before and doesn't
think it every day of their working lives when they're
getting up and producing the eat stuff that you guys produced,
then you know, let me say it again, people need
to eat. But above and beyond that, as I said,
as a near term boost, it looks like the price
of diesel might be coming down if things go the
right way. So there you go, that would be a
little few extra dollars in your pocket.
Speaker 4 (22:13):
Well, mind you, you can only eat if you can
afford to eat, and if AI takes job Michael, eating
might not be an option. But anyhow, But on that
positive note about food being a good business to be
in and diesel prices going down, we will love you
and leave you. Always loved chatting with you today on
the show, and this was one of your least alarmist
chats you've ever had with me. I think you're going
(22:35):
soft in your old age.
Speaker 3 (22:37):
I've done things wrong. Then if you look at everything
is going through the background, if you use one of
the soft ones, yeah, I'm definitely losing my cutting edge.
I have to try and be sharp the next time
I talk to you.
Speaker 4 (22:44):
Lovely to chat.
Speaker 3 (22:45):
Bye bye, thank you, Bobo.
Speaker 4 (22:48):
Twenty six away from one Yes, thank you Michael. No
time to waste. Michelle's in here, I think with some
really good news and rural news for farm Strong they
do a great job. We'll have a look at sports
news for you. Richard Wyth. We've already spoken to one
chief executive of a dairy company today, Myles Hurrel. Richard
Wyth's turn. He's running sinlay now? Is that a poison?
(23:09):
Chalice and Peter Newbolt? How much is your farm worth?
And is it worth a weeed bit less if you're
a dairy farmer than it was before? About half past
eight this morning, after the Fonterra announcement. If you haven't
caught up on that, the forecast milk price has been
shifted to a midpoint of nine dollars fifty from the
previously announced ten dollars. Welcome back to the country. The
(23:42):
show's brought to you by Brandton, Jamie McKay Shorty Michelle
Watt was the latest and rural news. But first farmers
and growers looking to score a win by getting ahead
of the game this summer. Well, farm One's has got
your back, being prepared for a dry summer spell. That's
the one. Now's the time to invest in your water infrastructure.
You know, ensure tanks, troughs and fittings and pipes are
(24:03):
in good nick, preventing nasties like pests, weeds and disease
from eating away summer gains. That's a win too, scoring
a healthier return because your animals were healthy. Healthier should
I say another one? All possible with the right animal
management tools and products. Looking slick for the social season, Well,
that's just looking like a winner, isn't it. Scrub up
(24:24):
with new summer gear from farmlands that will take you
from the paddock to the pub. The team at your
local farmland store or your Farmland's technical field specialist, they're thinking,
like you, what do I need to get sorted to
score a win this summer? So that's suit to chat too,
to get some runs on the board head and store,
or order through Farmland's pro or talk to your rap
(24:45):
about Farmland's summer office.
Speaker 1 (24:53):
What the country's world us with cod cadets, New Zealand's
leading right on lawn bower brand? Is it steel for
dots for your local stockist?
Speaker 4 (25:04):
Nothing screams nineteen eighty five. Like, Aha, Michelle, you you
wouldn't know that. I won't even ask you what year
you were born, but I was in the prime in
nineteen eighty five. Now what's happening? What's the forecast before
we do this good news rural news story about I
think Farmstrong. That's right, good news, some more money for them.
(25:26):
What's the forecast for bell Cloth or the Bell South
Otago area for Thursday for our southern storm shout.
Speaker 7 (25:33):
It's actually looking pretty good. Twenty one degrees is the
high showers are going to clear to fine in the
morning with some strong nor easterlies which mon't be so great,
but it's going to be fine and warm one sound
of it.
Speaker 4 (25:43):
Well, that's good. That's good weather for eating ice creams
because there's an ice cream and a coffee cart there
that just happens to be the Emerson's Tiny Pub and
the Spates Bar there as well. But there's lots of
meat lamb lollipops from silver Fern Farms. It's all happening
at Nigel and Leanne Woodhead's Level, splat halfway between Milton
and Bellcluther. Go and check out all of our social channels.
(26:05):
The address is on there. The rapid address is on there.
Really looking forward to your company. The Milton Lions are
doing the barbecue. And if you live in the Milton,
Bellcluther or Lawrence area, because I know you got smacked
by the southern storm, we'll get your home afterwards as well.
Just make sure you get there in one piece.
Speaker 3 (26:23):
Right.
Speaker 4 (26:24):
What's in rural news?
Speaker 7 (26:25):
Okay, so ruer on news. The government has renewed its
investment in the rural wellbeing program farm Strong. The two
point seven million dollar investment in the first phase of
the five year agreement between ACC and Farmstrong has totaled
six point eight million, and since then it has delivered
a return on investment of seven dollars eighty five for
every dollar spent, equivalent to over nine eight hundred injury
(26:47):
claims and saved fifty two million claims and cost saving.
So it's well worth the while of the government supporting
such a great thing. Of course, you can find more
about Farmstrong with their resources and guidance at the Farmstrong
website farmstrong dot coat.
Speaker 4 (27:00):
Just remember the five ways to wellness with farm Strong.
I don't want to get political, heir, but I think
that's one of their better mental health spends. I don't
want to be critical of other ones that got lots
and lots of money, but Farmstrong is money well spent.
Speaker 1 (27:15):
Sports on the country with AFCO invested in your farming success.
Speaker 4 (27:21):
A dismal result for Manchester United and Football's Premier League.
They've suffered a one nil home loss to Everton, who
played the majority of their match with ten men after
midfielder Adressa Gay was sent off for slapping teammate Michael
Kine in the thirteenth minute, and also England staying there
(27:44):
must provide their version of events after Argentinian rugby coach
Philippi Contapomi was lodged an official complaint over what he
claims was abuse from flanker Tom Curry after their win
at Twickenham. And I don't know whether you saw that
game or the highlights of it, Michelle. It was all
on after the full time We're saw that annoying little
(28:05):
Henry Pollock. Great player, but an annoying little man. Very
good player, though he was into it. He was just
racking up the Archie's big time. It was like nineteen
eighty two, the Falklands War all over again. So yeah,
you know it's getting a bit tense when one of
the players has a crack at one of the coaches
up next first time on the country in his capacity
(28:27):
as the new chief executive of Sinlay, it is Richard Wyth.
It's ironic, isn't it that on a day when Fonterra
drops the milk price to nine dollars fifty we were
scheduled to chat to Richard Wyth, who fronted his first
annual meeting in his capacity as chief executive, the new
(28:49):
chief executive of Sinlay, and he did that last Friday.
Of course, Richard's got a very good background in the
dairy industry, former chief executive at Meraka, chief executive at
Westland Milk. First question for you, Richard, is the Sinley
payout pegged to Fonterras as Westlands.
Speaker 3 (29:08):
Is Yeah, good, Jamie, Yes it is large. Ye.
Speaker 8 (29:11):
I mean we pay the base milk price and then
we've got lead with pride incentives and we've also provided
a few extra incentives as well to retain that you
would have recalled. We had a fair run on cease
notices last year, so we had to encourage the farmers
to stay, so we topped that up a little bit
as well.
Speaker 4 (29:28):
So basically you're paying more than Fonterra and Westland Milk
were that you were previously running. I think was the
Fonterra pluce price plus ten cents? Am I right in
saying that?
Speaker 3 (29:38):
Yeah, that's right, Yeah, that's right. So yeah, it's Look,
it's good. The farmers have done well.
Speaker 8 (29:43):
I mean, obviously they've taken a bit of a haircut
this morning based on our fifty cent drop in the
base milk price. But overall, historically, start at very high prices.
Speaker 4 (29:52):
Hounds your first six months and the job gone because
you've kind of jumped out of the frying pan and
into the fire.
Speaker 8 (29:59):
Yeah, we got Westland to a pretty stable point and
then came into this business. We certainly walked into a
few manufacturing challenges. So it's a bit like a screen
slope down in the South Island where you sort of
take a few steps forward and then slide back a bit.
But we're getting a bit of momentum now, so I
feel like we're certainly through the worst of it and
trying to rebuild.
Speaker 4 (30:18):
So, just to put some context around this, Fonterra is
obviously the biggest dairy company by a country mile in
this country's eighty percent. Odd open countries are clear. Second.
Where does Sinlay come in compared to Westland?
Speaker 8 (30:33):
Yeah, we'll be very similar to We're in about seventy
plus a minus million solids, so it's about four percent
of the total milk solids in New Zealand. I think
the open country is clear. Second now after they've acquired
Materia Valley and Meniaca. So quite a few changes in
the industry over the last six months.
Speaker 4 (30:49):
You've divested yourself completely of any North Island interests. You're
concentrating on your knitting at the dun Sandal plant.
Speaker 3 (30:57):
Yeah.
Speaker 8 (30:57):
Look, I think it's been a bit of a cloud
for a few year, is hanging over us. So for us, Look,
it's an outstanding assets, so a good acquisition for Abbott,
but for us it allows us just to get back
to the South Island and refocus.
Speaker 4 (31:10):
Has there still been a bit of a run on
the bank in terms of your suppliers wanting to go
to other people or have you steamed the bleeding there?
Speaker 8 (31:19):
No hare becally. Look, the milksply teen did a fantastic job.
We lost a few farmers, we gained as many so
net Net we had we didn't lose any milk at all,
So overall, we we're in good shape from a milk
supply perspective in terms of, Yeah, we don't need a
lot more of any.
Speaker 4 (31:34):
Looking forward for the dairy industry for the remainder of
this season, which we've really only just got into and beyond.
I mean, nine dollars fifty has cream's obviously been taken
off a ten dollar payment that we got last year.
But at that level, farmers should still be profitable.
Speaker 8 (31:51):
Yeah, absolutely, I mean I know that, you know, whether
it's seven dollars or slightly more than that, in terms
of costs on farm, it's it's still a good profit number.
And I think I've just come back from China from Cie,
and you know, the ten dollar payout was interesting for
me because China still wasn't firing at that point, and
we've got it's a real oversupply issue, was what's driving
the milk price down to nine fifty. But look, at
(32:13):
the end of the day, it's still a fantastic milk price.
I think you've you've got to share in a dairy farm, Jamie,
so you'll still be happy.
Speaker 4 (32:19):
Well, I don't know, I don't seem to make much
out of mine. But I mean that's that's the problem.
When you're a Queen Street farmer. You're not hands on
you see.
Speaker 8 (32:27):
No, that's right, But look overalled it. If we've seen
two ten dollar payouts and you know, back to back,
it would have been pretty incredible. But nine to fifty
is still pretty solid.
Speaker 4 (32:37):
Yeah, historically it's very good. Indeed, Richard Wire, thanks for
your time.
Speaker 3 (32:41):
Thanks Jamie.
Speaker 4 (32:43):
It is bang on ten away from one. Thank you, Richard.
Up next, how much is your farm worth? We're going
to tell you. It's Peter Newbolt from PGG Rights in
Real Estate. Monthly here on the country we tell you
how much your farm is worth with the GM of
(33:05):
PGG Rights in Real Estate, the Great Peter Newbolt, Peter
nine dollars fifty from Fonterra this morning. Do you think
that'll affect the price of dairy farms?
Speaker 9 (33:16):
To be honest, now, I don't think it will, Jamie.
I think probably people were aware that it was coming,
and you know, from where I sit, I don't think
it'll change things. The future still looks strong and you know,
the interest we've had in properties over the over the
last few months would for me would indicate there will
be no change in that space.
Speaker 4 (33:37):
You said to me, I think when we chatted a
month ago that you expected at PGG Rights and not
to have any dairy farms on your books at the
end of the season, I e. You had a buyer
for every one of them. Are you sticking with that?
Speaker 3 (33:49):
Yeah, definitely.
Speaker 9 (33:51):
You know, there's there's probably a shortage, which is a
good thing. But what we're actually seeing is, you know,
there's a lot of interest sub that ten million mark
and above that, there's a lot of buyers out there
looking so again capped out as far as you know
were values will go to. But yeah, no, I think
that's the case. What we may see in the new
(34:13):
year is some of those larger entities maybe look at,
you know, revisiting their structure as far as what properties
I've got. But other than that, I think it's going
to be a strong season. I don't think there'll be
much left.
Speaker 4 (34:25):
We've got record prices for beef and lamb. Is that
translating into increased demand for sheep and beef properties.
Speaker 9 (34:33):
It's just starting to come through now. You know, we
go back a couple of months ago, it was fairly quiet,
but now we're just starting to see momentum there, which
is good. You know, a good example of the you know,
if I go back a year or so, we took
some properties off the market, We've put them back on
the market and they've sold, so definitely there's momentum there.
(34:54):
The other thing we're also seeing is with some of
these properties were you've got neighbor interest, and I think
that's the other important thing people need to be aware of.
Neighbors are influencing a lot of the sales in both
dairy and sheep and beef, but in sheep and beef,
what we're finding sometimes is that some properties are being
sort of split up, a neighbor taking a portion, another
(35:15):
neighbor taking another piece. So you know, there's different ways
that these properties have been cut up and sold. But
definitely answer your question, it's moving forward, I think really well,
and we'll see that momentum go right the way through
into autumn.
Speaker 4 (35:30):
Does it follow if dairy farm sales are recentably buoyant
in terms of volume, that support blocks are as well.
Speaker 9 (35:39):
Yeah, definitely. And you know, dairy farmers as a rule
often big purchases of support blocks, as you know, and
that's one thing we've talked about. We see the new
year where support blocks will come into their own. I
think the other piece also is you know when those
moneys that come through from Frontra that'll make a different size.
(36:00):
I think we'll see that as we move into autumn.
I think we'll see solid sales there.
Speaker 4 (36:04):
Yeah, and autumn's traditionally the big selling season for farms.
Hey what about the Kiwi fruit farms?
Speaker 9 (36:11):
Yeah, I know that's an interesting space. We've just started
to see a few sales take place. I think that
the values are starting to people are studden to see
where they are. Probably, to be honest, I haven't seen
as much activity as I thought when I spoke to
you two or three months ago about it. But again,
that will slowly build and it's probably a good thing.
Speaker 3 (36:30):
You know.
Speaker 9 (36:30):
The last thing you want is those highs and lows.
So yes, there's momentum there.
Speaker 4 (36:35):
Hey, just to finish with chuck on your other hat
you wear at PGG right since your livestock hat. I'm
a big fan of what your team does around the
IHC calf and rural scheme, and I think you've got
some big calf sales coming up.
Speaker 9 (36:49):
Yeah. Look, it's been an incredible you know, first it
was nearly six months up and you know, looking ahead
into our busy time, some of our guys who've been
around for you know, decades have seen nothing like it.
So I think we'll see strong selling. The prices there
you're seeing at the moment it's solid, So yeah, I
(37:11):
think we're going to have a wonderful season, subject to
you know weather, and I guess that always plays a big,
big hand as we move further into sort of February
and March. But no, looking really good, and I guess
at the moment we've just got to bank it and
it's good for all our farmers. So yeah, long that continue, Jamie.
Speaker 4 (37:30):
Yeah, thanks to the team at PGG Rights, and thanks
to all you farmers out there who have donated a
calf or a lamb or a virtual calf or a
virtual lamb to the IHC CARF and Rural Scheme. Great course,
Peter Newbold, thanks for your time. We'll chat to you
again just before Christmas and you can be Santa Claus
with farm prices.
Speaker 9 (37:49):
Thanks very much, Jamie, have a good afternoon. Hi.
Speaker 4 (37:52):
Well, thank you, Peter. That wraps the show for day today.
Just remember if you'd like to donate to that wonderful course,
which is the ic Car and Rural Scheme, set up,
of course by the late greats of Pine Tree, Colin Meads.
Go to their website IHC dot org dot nz forward
slash carf to pledge great donations this year. I think
(38:16):
there's a big sale coming up at Tamuka in early December.
Great course, Thank you for supporting it. We'll see you tomorrow.
Speaker 1 (38:26):
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 mckuae. Thanks to Brent, You're specialist in
John Deere construction equipment.
Speaker 2 (00:21):
GEMO.
Speaker 3 (00:22):
Listen to your ma.
Speaker 4 (00:24):
Good good afternoon, New Zealand. Welcome to the Country. The
show's brought to you by Brandt. I'm Jamie McKay. Schmaltzy
eighties songs is the musical theme today. Today's keynote interview
What's going to be with Michael Every rabobanks Singapore based
(00:46):
global strategists, But then Fonterra decided to steal his thunder
a webit by announcing dropping the milk forecast price. No
surprise at all. We're going to kick off the show
with Miles Horror. We'll catch up with Michael Every talk
about all sorts of things, global geopolitics, the New Zealand
(01:08):
domestic economy and if Trump sells out Ukraine, how could
that help New Zealand farmers. Richard Wyeth scheduled to chat
to him before the Fonterra announcement came out. He's the
new chief executive of Sinlade, former chief executive of Meraka
and Westland Milk, so he's got a good history in
the dairy industry. He fronted his first AGM at the
(01:31):
troubled Dairy Processor in christ Church last Friday. We'll catch
up with Richard good Bloke too and Peter Newbold. How
much is your farm work worth? And if you had
a dairy farm, or if you have a dairy farm
and you're thinking of sell it, of selling it, will
it be worth a wee bit less After today's announcement
from Fonterra, We've got all that to do before the
(01:54):
end of the hour. We'll have rural news and sports
news for you as well, and we'll tell you how
you can joinjoin us at the Southern Storm Shout at
Nigel and Leanne Nigel and Leand's property, Woodhead property. Get
it right at Level's flat which is between our Kluther
(02:15):
and Milton on Thursday. Looking forward to that one. Today's
big news story is Farming's worst secret. Yes, the Fonterra
(02:37):
forecast milk price has dropped to nine dollars fifty. Miles
Hurrell joins us, chief executive of Fonterra. Miles is this
totally a supply story? I too much of it?
Speaker 5 (02:48):
Yeah, you get a jammy very much a supply story,
I mean demand generally in the international market, it's not
too bad. We think the supply chains are a relatively
empty globally given and I guess the uncertainty, but yeah,
we've just seen a whole lot of milk out of Europe,
whole lot of milkout out of North America, even Latin America,
and of course back here at home.
Speaker 2 (03:05):
A lot more milk.
Speaker 5 (03:06):
And so you know, at some point that comes back
to bite us, and we've obviously got to adjust accordingly.
Speaker 2 (03:11):
Say, yeah, that's very much a supply story this time.
Speaker 4 (03:14):
So our milk volumes forecast to be fifteen hundred and
forty five million kilograms, up from fifteen hundred and twenty
five million kilograms. Is that your fault for chucking ten
dollars out there so early in the season.
Speaker 5 (03:29):
Well, you know, this is the joys of working in
the corporative. I mean, we'll give the signals. Ultimately, farmers
make their own decisions on farm So yeah, it is
up from fifteen to twenty five from a forecast perspective,
But importantly we're up from fifteen oh nine from our
last year number, so it is quite a significant increase.
So you know, circle four percent up I think year
to date, that's a lot of extra milk in the
(03:50):
international market. Put that in the context also what we're
seen out of Europe, what we're seen out of North
America and Latin America. You know, the increase that we've
seen on an anualized basis out of out of the
northern hemishere is probably another half of New Zealand again,
so you know, it's been pretty good milk price in
Europe as well in North America, and so those things there,
as I say that, they come home to roost, and
unfortunately they have. At this point, we felt it was
(04:12):
important to get out once the position came clear to
us when we cleaned up the numbers over the weekends.
So hence we've come out now a little bit earlier
than probably a market up that we anticipated next week.
Speaker 4 (04:21):
Yes, because the quarter one business update was due next week,
and that's when we want us to commentators, Miles, we're
all expecting you to move then.
Speaker 5 (04:30):
Yeah, and look, you know, the when the information becomes clear,
let's not sit on it. You know, farmers will make
decisions every day around what I guess winter grade in
contracts for next year and what feed they may purchase
for quarter one and quarter two next year. So if
any information we get, if it's clear, let's move on it.
So we've made that decision. Were also narrowed the range,
which again that that was due to be done next week.
(04:52):
So we've narrowed that range down. But the big news
story there is from ten dollars to nine point fifty,
which is still, you know, if I'm brave enough to stay,
not a bad number when you look through history, still
well above sort of cost of production for the vast
majority of our farmers. So you know, farmers should still
be pretty happy with that, recognizing of course it goes
back from last year in our prior forecast.
Speaker 4 (05:13):
Well, I'll say it because you won't well you don't
want to. If you can't make money at nine dollars fifty,
you shouldn't be farming dairy farming.
Speaker 2 (05:21):
Yeah, yeah, well you had to say. You can say that.
Speaker 5 (05:24):
But our farmers who own the CORPERAI will make their
own decisions. But as I say, I think the conversations
I've had with a couple of farmers this morning that
they understand how the market works, and as you say,
are still making pretty good money at at nine to fifty.
Of course they've still got a bit of capital expenditure
coming down the line, but a deferred maintenance from a
couple of those softy years, so you know, we don't
(05:44):
take those things for granted.
Speaker 4 (05:45):
Also, well, some of the blow is going to be
softened by your cash payout, your Santa Claus payment which
will come in the early part of next year. The
two dollars per share payout.
Speaker 2 (05:56):
Yeah, well we would least be really clear.
Speaker 5 (05:58):
It's a capital return, so you know, it's ultimately the
cash that it already exists with the cop now, so
it's ready just the repatriation of the capital that already
sits within the balance yout to the cooperative. So but yes,
that will certainly help. And again a conversation of people's
farmers is a range of views. But I think a
fair chunk will go to debt repayment and that to
ferred maintenance, and it maybe farmers need a bit of
(06:19):
a break as well, so you might see a little
bit spent on and joy and joining themselves.
Speaker 2 (06:23):
So good on them.
Speaker 4 (06:24):
Your quoted as saying the new midpoint of nine dollars
fifty per kilogram of milk solids remained an inverted commerce
strong forecast. What does that mean?
Speaker 5 (06:35):
Well, well, as I say, I still think nine to
fifty is a pretty decent number when you look back
through history recognize and of course nine fifty is not today,
is not nine to fifty from a few years ago,
So I acknowledge that, but it's it's still a pretty
solid number when you look to the past. Of course,
we've still had a heck of a lot of the
season to go, so a contract book's in a pretty
good state. We've hedged a fair way out at this
(06:57):
dollar where it is, so that that gives us some
el of confidence, but you know, still a long way
to go. We need to see what what this milk
price forecast does in terms of supply. But also Northern hemisphere,
you know, their milk price is dropping quite quite quickly
up a northern hemisphere.
Speaker 2 (07:12):
All that turned the tap off as well, probably.
Speaker 5 (07:14):
And that'll put us in a better position for the
second half, hopefully, but we'll see how that plays out.
Speaker 4 (07:18):
Is the hedging department at Fontira working overtime at the moment,
getting in boots on all of these good rates.
Speaker 5 (07:24):
Yeah, well it's interesting, you know, a good rate today,
you know, and it is a good rate with again
you look back through history, but you know people sort
of a couple of months ago we're saying, let's lock
it in because it's a good rate, so she's can
continue to fall. So you know, we run a policy
to ensure that we don't get sort of speculation in
there and just take a little bit of risk out
of it out of the book, but also goes a
long way to locking in these sort of numbers for
(07:45):
a chunk of next year too.
Speaker 2 (07:46):
So that's the policy we run.
Speaker 5 (07:47):
And you know there will always be a few critics
out there with it's the right thing to do, but
if we can remove some of that risk of volatility
for both the corporate nashyholders, that that's what we'll.
Speaker 4 (07:56):
Do, risk mitigation on them all for it. Miles Harrel,
Chief EXECU of Fonterra, Thanks as always for your time
on the country. Hi, thank you much, Jammy bang on
quarter past twelve. Thank you, Miles. Here's a text that
came in yesterday's Feel free to send us your thoughts
on the new milk price on five double O nine.
That's our text number easiest way to get a hold
(08:17):
of us from Jared and Palm regular texter Jamie. Did
you see last week's he means Sundays Country Calendar where
a Southland contractor was harvesting wilding pines adjacent to Lake
Ohal and chipping the trees for fuel to replace coal
and the boilers. Yes, I did. And he was also
(08:37):
going and shooting. Can I say that wild venison and
selling it to high end restaurants? That was a really
that's a good country calendar. I've been critical of some
of the episodes. That was a great program. I admire
that guy's drive and determination. And Jared also says under
Helen Clark's ten year review, lease hold land reverted to
(08:59):
doc and we discussed this yesterday with Jim Ward. Much
of this land at the foot of the Southern Alps
has now reverted to Gorse Walding Pine and made Garry
you bang on sheared from Parmi and as Jim Ward said,
they're great at running the National parkstock, I'm not quite
sure some of this land that probably should be grazed
(09:21):
has been well looked. After your feedbacks, Welcome on five,
Double O nine up next. It's going to be my
lead off into you. But Miles stole their thunder or
his thunder. Michael Every, he's in Singapore. We're going there next.
From Rabobank. You can't quiet always love chatting to this
(09:58):
man on the country, even if I don't always like
the message. His name is Michael Every, Rabobanks, Singapore based
global strategist. Last week, Rabobank came out with its agri
Commodity outlook for twenty twenty six. The headline more than
just Supply and demand factors shaping global agriculture and twenty
(10:18):
twenty six with geopolitics set to play a crucial role,
China be the USA, Michael Every, Surprise surprise.
Speaker 6 (10:28):
Yes, absolutely well, I'd like to think I've probably had
a little bit of input into that. And by the way,
it was completely correct, because just after it came out,
we have had the surprising news that we have a
potential Ukraine peace deal on the table. Even though the
form of it is very contentious and the final form
(10:50):
of it is unclear, it does appear as if something
along those lines is going to transpire, and potentially as
soon as Thursday.
Speaker 4 (10:59):
But as Trump's telling you crying out.
Speaker 3 (11:03):
That's a really loaded question.
Speaker 6 (11:07):
Because he certainly isn't prepared to keep backing Ukraine the
way it's being backed so far, that's abundantly clear. He
is forcing a settlement if we see the terms finally
being what we've seen floated so far, which is to
say that will withhold military aid, will withhold intel, and
(11:30):
of course we will hold funding. If you're not going
to sign up for this, that is, you know, basically
saying sign here, thank you very much. But at the
same time, if America is not in a position to
continue doing more than that in the longer run, and
Europe is unable to stand up and fill the gap,
what other option was there on the table? So I'm
not trying to take a strong editorial stance one way
(11:52):
or the other. It's undeniable the case that America is
forcing Ukraine to sign, if that is the final version
of the deal. It does also, however, garant Ukraine's sovereignty.
It does have a defense guarantee, and it does have
an economic guarantee in it to try and incentivize everybody
to benefit from peace rather than war. So it's not
completely one sided, but it is very much not what
(12:14):
Ukraine wanted.
Speaker 4 (12:15):
Rabobank's a greycommodity outlook that I've referenced for twenty twenty six.
One of the interesting numbers I looked at was GDP
growth on a global stage two point nine percent this year,
easing to two point seven percent and twenty twenty six.
What happened to the world economy is coming right?
Speaker 3 (12:34):
Well.
Speaker 6 (12:35):
I don't want to say anything negative about anyone who
put in the hard work to produce those numbers, but
I don't think they really tell much of a story.
The GDP in itself as a concept at a national
level is something I don't take very seriously. I want
to be abundantly clear there. It was set up by
(12:56):
the Americans in World War two to try and measure
military output, and somehow we've expanded it to explain anything
and everything going on around us. And I think it
knows the price of everything and the value of nothing
that's GDP for any national country. And then you've got
the questions of, you know, the quality of the data,
which is getting worse and worse as everything changes structurally.
So the world economy then incorporates loads of economies who
(13:16):
just produce really dodgy numbers, you know, because you're doing
Tom Dick and Harry rather than just just the West,
and I really really would not be trading that as
a number, not just from Rabbi, but I mean from
anyone at all, you know, as a real directionality. I'm
sure anyone who's out there on the farm has got
a far better idea of what actual supply and demand
(13:38):
looks like than someone sitting behind a spreadsheets. So let
me try to say that to, you know, to put
a positive spin on it.
Speaker 4 (13:44):
What do you think the world commodity outlook will be
for twenty twenty six from a New Zealand point of view?
And we're going to focus more in on New Zealand
on the sick and part of this interview. But do
you see commodity prices across the globe holding up?
Speaker 6 (14:00):
Well, it really depends on the geppetical outlook off That's
what we said in the hel look that we published.
Because for example, if we get this Russia deal, if
Russia is reincorporated into the global economy, all sanctions are dropped.
You know, you have a very different backdrop to the
one that would have been presumed a week ago, where
that wasn't the case. You know, there are winners and
(14:20):
losers within that, and it's too complex to unpack here.
Now I'm afraid on the call exactly who wins and
who loses, But one really easy point that you can
make is that it's definitely going to start to affect
things like diesel prices, which is good to a farmer's
because obviously diesel's used on the farm. If Russia and
Ukraine are no longer blowing up each other's refineries and
energy supplies, and if Russian sanctions are lifted on Russian diesel,
(14:44):
that's going to get that much cheaper everywhere, which is
a real boost and again goes to show how the
numbers that predict confidently what will happen next year can change,
you know, with one political decision. So remains to be seen.
But commodities are crucially regardless of that particular backdrop of
that story, very very much in the eye of the storm.
I mean, these aren't ones that New Zealand specializes in,
(15:06):
for example, the rare earth that we read about all
the time. But commodities run through the overall geopolitical architecture
like your you know the name of the holiday resort
you go to through a stick of rock, thinking about
you know what seaside towns in the UK used to
be like, so that story isn't going to go away.
Speaker 4 (15:24):
Just a final comment from you, Michael Ivery on the
equity markets. Do you buy into this AI bubble burst?
Speaker 6 (15:33):
Well, I don't talk equity. I want to be abundantly clear.
What I can mention just in terms of a concept
of AI is I don't think people understand the totality
of what we're talking about here, because if AI does
everything that it promises, well, no one's going to have
(15:54):
a job. It's as simple as that, we're going to
have miraculous breakthroughs in areas that we've never had them
in before and close for that from what I see,
you know, in areas like mathematics and physics, we can
really really push the envelope. But in terms of you know,
your mid level white colored jobs, enormous numbers of them
can be just swallowed up by technology and then a
shorter timeframe than people realize. And if you think people
(16:16):
are young people are unhappy now because housing so expensive,
we'll try telling them they'll never get a job on top.
So you know the implications for that for the economy
are shocking. And I'm not quite sure whether that tells
you stocks should be doing X, Y or z, but
I don't think it's being factored in. And on the
other hand, if AI is a complete bubble and it
doesn't do anything, and again I'm not taking a view
on that, but as we know, there are strong views
(16:36):
each different way and certainly some of the ais that I.
Speaker 3 (16:38):
Use are bloody useless.
Speaker 6 (16:40):
If that is the case, you know, then that share
price isn't justified. And then yeah, we could potentially be
looking at a huge drop in some stocks and what
would be less fanding if that were to happen. So
I look at it in a very very different way.
It will be transformative whatever happens. The question is who
is transformative for and is it transforming on top or view?
Speaker 4 (17:00):
Michael every Rabobanks Singapore based Global strategists will take a
break on the other side of it. Let's have a
look at the New Zealand domestic economy. Welcome back to
the country. We're chatting to Michael every Rabobanks Singapore based
(17:23):
global strategists. Right, let's have a look at New Zealand's
domestic economy. Now, I don't know how micro you go
on this, Michael, but we've got an ocr announcement this week,
In fact, tomorrow our time, we're talking about another twenty
five point basis strop and our official cash rate. And
that's it. What do you reckon? What's Rabobank saying? Is
(17:44):
this the bottom of the cycle.
Speaker 6 (17:47):
Well, it's import him to always keep in touch with
what our fantastic analysts Ben picked and is saying on that,
because the data do change, the bankdrop changes, and his
call can change. But he's he's certainly the view that
very close to the bottom of the cycle.
Speaker 4 (18:02):
We talked about Trump when we were talking about the
international economy. In fact, global anything has got Trump's fingerprints
all over it. Here. Domestically, last week we saw them
drop tariffs on beef and kiwi fruit. Is the more
to come?
Speaker 6 (18:20):
Well potentially, Look, I mean again, I can talk at
great length about this. When they brought their tariffs in,
they had one particular vision in mind, and now very
very clearly you are starting to see a pivot in that.
And theoretically you've got different schools of tariff thought. One
of them is you tariff everything coming in to generate revenue,
(18:41):
and the other one is why do you tariff things
that you can't produce? Yourself, like if you can't grow
keiw fruit, you like kiwi fruit, why are you bothering
to put a tariff on it? But you do put
a tariff on something that is produced by another country
that you can make yourself to encourage substitution for yours
rather than theirs. And in key we fruit there you go.
Speaker 3 (19:00):
And beef.
Speaker 6 (19:01):
Of course, the Americans can produce their own beef. They
don't have enough of it, so that would also make
sense for them to lower it on others temporarily at
least until they can manage to build up their herd.
And I believe that plus the election politics are trying
to make sure that inflation goes down ahead of November
twenty twenty six, you know, is a strong argument. I
think we'll get a lot more tweaking going forward. The
(19:22):
one thing I can tell you that won't go away
a taris they'll state the question is exactly on what
and a what level.
Speaker 4 (19:29):
We talked about international commodity prices and how New Zealand
fits and are with that, And as you said previously,
a lot of this is going to depend on what
happens geo politically, but how well positioned is New Zealand
to battle its way through twenty twenty six because we've
been waiting since COVID. Basically, Michael every for our economy
(19:51):
to come right.
Speaker 6 (19:53):
Well, so's everybody to be abundantly clear. There's no one
who's come out of COVID smiling and saying, you know,
these are the best of times. Everyone's at best saying
these are the best of times, these are the worst
of times, and some people are just saying these are
the worst of times. So you're on the same boat
as everyone else, basically, and it's.
Speaker 3 (20:15):
Really really unclear.
Speaker 6 (20:17):
I'll be very very clear on this exactly what will
transpire in twenty twenty six, just because the tectonic plates
are moving. We've already addressed the Ukraine issue, which is
huge Ragri of course, and it's huge for Europe and
it's huge for the world. But we have tensions in
Asia Pacific between Japan and China as we speak, and
(20:37):
I'm sure those are in the local headlines. We have
tensions between India and Pakistan. They haven't gone away. We
still have the Middle East, you know, on a nice edge.
We have bits of Africa where our coed like they're
about to take over control.
Speaker 3 (20:50):
Again, we've got the.
Speaker 6 (20:51):
US using gumboat diplomacy in Latin America and potentially about
to make a move on Venezuela. So we live in
incredibly uncertain times and everything can go perfectly well, and
everything can be sorted out, and things can go wrong
in different regions. And you know, some of them appear
to be moving in the right direction, some of them
appear to be moving in the wrong direction. But they're
(21:13):
all conflated, and they're all related to what America is
doing on tariffs, although it's not American terariffs cause these problems,
to be abundantly clear, they're both different, you know, different
sides of the same shape.
Speaker 3 (21:24):
Shall we say, I'm.
Speaker 4 (21:25):
Trying to get a good news story out of you
to furnish on, but fundamentally, as food, I what we
do here in New zeal I'm still a good business
to be in.
Speaker 1 (21:35):
Well.
Speaker 6 (21:35):
I mean, I'm tended to say something sarcastic and saying
no because nobody needs to eat anymore. Because you love
to ask me that question, Jamie, and every time I
do repeat, people eat right. That truism never goes away.
But I don't have a more original way to put it.
Speaker 3 (21:51):
Than that that. Yeah, if everyone.
Speaker 6 (21:54):
Listening regularly hasn't heard me say it before and doesn't
think it every day of their working lives when they're
getting up and producing the eat stuff that you guys produced,
then you know, let me say it again, people need
to eat. But above and beyond that, as I said,
as a near term boost, it looks like the price
of diesel might be coming down if things go the
right way. So there you go, that would be a
little few extra dollars in your pocket.
Speaker 4 (22:13):
Well, mind you, you can only eat if you can
afford to eat, and if AI takes job Michael, eating
might not be an option. But anyhow, But on that
positive note about food being a good business to be
in and diesel prices going down, we will love you
and leave you. Always loved chatting with you today on
the show, and this was one of your least alarmist
chats you've ever had with me. I think you're going
(22:35):
soft in your old age.
Speaker 3 (22:37):
I've done things wrong. Then if you look at everything
is going through the background, if you use one of
the soft ones, yeah, I'm definitely losing my cutting edge.
I have to try and be sharp the next time
I talk to you.
Speaker 4 (22:44):
Lovely to chat.
Speaker 3 (22:45):
Bye bye, thank you, Bobo.
Speaker 4 (22:48):
Twenty six away from one Yes, thank you Michael. No
time to waste. Michelle's in here, I think with some
really good news and rural news for farm Strong they
do a great job. We'll have a look at sports
news for you. Richard Wyth. We've already spoken to one
chief executive of a dairy company today, Myles Hurrel. Richard
Wyth's turn. He's running sinlay now? Is that a poison?
(23:09):
Chalice and Peter Newbolt? How much is your farm worth?
And is it worth a weeed bit less if you're
a dairy farmer than it was before? About half past
eight this morning, after the Fonterra announcement. If you haven't
caught up on that, the forecast milk price has been
shifted to a midpoint of nine dollars fifty from the
previously announced ten dollars. Welcome back to the country. The
(23:42):
show's brought to you by Brandton, Jamie McKay Shorty Michelle
Watt was the latest and rural news. But first farmers
and growers looking to score a win by getting ahead
of the game this summer. Well, farm One's has got
your back, being prepared for a dry summer spell. That's
the one. Now's the time to invest in your water infrastructure.
You know, ensure tanks, troughs and fittings and pipes are
(24:03):
in good nick, preventing nasties like pests, weeds and disease
from eating away summer gains. That's a win too, scoring
a healthier return because your animals were healthy. Healthier should
I say another one? All possible with the right animal
management tools and products. Looking slick for the social season, Well,
that's just looking like a winner, isn't it. Scrub up
(24:24):
with new summer gear from farmlands that will take you
from the paddock to the pub. The team at your
local farmland store or your Farmland's technical field specialist, they're thinking,
like you, what do I need to get sorted to
score a win this summer? So that's suit to chat too,
to get some runs on the board head and store,
or order through Farmland's pro or talk to your rap
(24:45):
about Farmland's summer office.
Speaker 1 (24:53):
What the country's world us with cod cadets, New Zealand's
leading right on lawn bower brand? Is it steel for
dots for your local stockist?
Speaker 4 (25:04):
Nothing screams nineteen eighty five. Like, Aha, Michelle, you you
wouldn't know that. I won't even ask you what year
you were born, but I was in the prime in
nineteen eighty five. Now what's happening? What's the forecast before
we do this good news rural news story about I
think Farmstrong. That's right, good news, some more money for them.
(25:26):
What's the forecast for bell Cloth or the Bell South
Otago area for Thursday for our southern storm shout.
Speaker 7 (25:33):
It's actually looking pretty good. Twenty one degrees is the
high showers are going to clear to fine in the
morning with some strong nor easterlies which mon't be so great,
but it's going to be fine and warm one sound
of it.
Speaker 4 (25:43):
Well, that's good. That's good weather for eating ice creams
because there's an ice cream and a coffee cart there
that just happens to be the Emerson's Tiny Pub and
the Spates Bar there as well. But there's lots of
meat lamb lollipops from silver Fern Farms. It's all happening
at Nigel and Leanne Woodhead's Level, splat halfway between Milton
and Bellcluther. Go and check out all of our social channels.
(26:05):
The address is on there. The rapid address is on there.
Really looking forward to your company. The Milton Lions are
doing the barbecue. And if you live in the Milton,
Bellcluther or Lawrence area, because I know you got smacked
by the southern storm, we'll get your home afterwards as well.
Just make sure you get there in one piece.
Speaker 3 (26:23):
Right.
Speaker 4 (26:24):
What's in rural news?
Speaker 7 (26:25):
Okay, so ruer on news. The government has renewed its
investment in the rural wellbeing program farm Strong. The two
point seven million dollar investment in the first phase of
the five year agreement between ACC and Farmstrong has totaled
six point eight million, and since then it has delivered
a return on investment of seven dollars eighty five for
every dollar spent, equivalent to over nine eight hundred injury
(26:47):
claims and saved fifty two million claims and cost saving.
So it's well worth the while of the government supporting
such a great thing. Of course, you can find more
about Farmstrong with their resources and guidance at the Farmstrong
website farmstrong dot coat.
Speaker 4 (27:00):
Just remember the five ways to wellness with farm Strong.
I don't want to get political, heir, but I think
that's one of their better mental health spends. I don't
want to be critical of other ones that got lots
and lots of money, but Farmstrong is money well spent.
Speaker 1 (27:15):
Sports on the country with AFCO invested in your farming success.
Speaker 4 (27:21):
A dismal result for Manchester United and Football's Premier League.
They've suffered a one nil home loss to Everton, who
played the majority of their match with ten men after
midfielder Adressa Gay was sent off for slapping teammate Michael
Kine in the thirteenth minute, and also England staying there
(27:44):
must provide their version of events after Argentinian rugby coach
Philippi Contapomi was lodged an official complaint over what he
claims was abuse from flanker Tom Curry after their win
at Twickenham. And I don't know whether you saw that
game or the highlights of it, Michelle. It was all
on after the full time We're saw that annoying little
(28:05):
Henry Pollock. Great player, but an annoying little man. Very
good player, though he was into it. He was just
racking up the Archie's big time. It was like nineteen
eighty two, the Falklands War all over again. So yeah,
you know it's getting a bit tense when one of
the players has a crack at one of the coaches
up next first time on the country in his capacity
(28:27):
as the new chief executive of Sinlay, it is Richard Wyth.
It's ironic, isn't it that on a day when Fonterra
drops the milk price to nine dollars fifty we were
scheduled to chat to Richard Wyth, who fronted his first
annual meeting in his capacity as chief executive, the new
(28:49):
chief executive of Sinlay, and he did that last Friday.
Of course, Richard's got a very good background in the
dairy industry, former chief executive at Meraka, chief executive at
Westland Milk. First question for you, Richard, is the Sinley
payout pegged to Fonterras as Westlands.
Speaker 3 (29:08):
Is Yeah, good, Jamie, Yes it is large. Ye.
Speaker 8 (29:11):
I mean we pay the base milk price and then
we've got lead with pride incentives and we've also provided
a few extra incentives as well to retain that you
would have recalled. We had a fair run on cease
notices last year, so we had to encourage the farmers
to stay, so we topped that up a little bit
as well.
Speaker 4 (29:28):
So basically you're paying more than Fonterra and Westland Milk
were that you were previously running. I think was the
Fonterra pluce price plus ten cents? Am I right in
saying that?
Speaker 3 (29:38):
Yeah, that's right, Yeah, that's right. So yeah, it's Look,
it's good. The farmers have done well.
Speaker 8 (29:43):
I mean, obviously they've taken a bit of a haircut
this morning based on our fifty cent drop in the
base milk price. But overall, historically, start at very high prices.
Speaker 4 (29:52):
Hounds your first six months and the job gone because
you've kind of jumped out of the frying pan and
into the fire.
Speaker 8 (29:59):
Yeah, we got Westland to a pretty stable point and
then came into this business. We certainly walked into a
few manufacturing challenges. So it's a bit like a screen
slope down in the South Island where you sort of
take a few steps forward and then slide back a bit.
But we're getting a bit of momentum now, so I
feel like we're certainly through the worst of it and
trying to rebuild.
Speaker 4 (30:18):
So, just to put some context around this, Fonterra is
obviously the biggest dairy company by a country mile in
this country's eighty percent. Odd open countries are clear. Second.
Where does Sinlay come in compared to Westland?
Speaker 8 (30:33):
Yeah, we'll be very similar to We're in about seventy
plus a minus million solids, so it's about four percent
of the total milk solids in New Zealand. I think
the open country is clear. Second now after they've acquired
Materia Valley and Meniaca. So quite a few changes in
the industry over the last six months.
Speaker 4 (30:49):
You've divested yourself completely of any North Island interests. You're
concentrating on your knitting at the dun Sandal plant.
Speaker 3 (30:57):
Yeah.
Speaker 8 (30:57):
Look, I think it's been a bit of a cloud
for a few year, is hanging over us. So for us, Look,
it's an outstanding assets, so a good acquisition for Abbott,
but for us it allows us just to get back
to the South Island and refocus.
Speaker 4 (31:10):
Has there still been a bit of a run on
the bank in terms of your suppliers wanting to go
to other people or have you steamed the bleeding there?
Speaker 8 (31:19):
No hare becally. Look, the milksply teen did a fantastic job.
We lost a few farmers, we gained as many so
net Net we had we didn't lose any milk at all,
So overall, we we're in good shape from a milk
supply perspective in terms of, Yeah, we don't need a
lot more of any.
Speaker 4 (31:34):
Looking forward for the dairy industry for the remainder of
this season, which we've really only just got into and beyond.
I mean, nine dollars fifty has cream's obviously been taken
off a ten dollar payment that we got last year.
But at that level, farmers should still be profitable.
Speaker 8 (31:51):
Yeah, absolutely, I mean I know that, you know, whether
it's seven dollars or slightly more than that, in terms
of costs on farm, it's it's still a good profit number.
And I think I've just come back from China from Cie,
and you know, the ten dollar payout was interesting for
me because China still wasn't firing at that point, and
we've got it's a real oversupply issue, was what's driving
the milk price down to nine fifty. But look, at
(32:13):
the end of the day, it's still a fantastic milk price.
I think you've you've got to share in a dairy farm, Jamie,
so you'll still be happy.
Speaker 4 (32:19):
Well, I don't know, I don't seem to make much
out of mine. But I mean that's that's the problem.
When you're a Queen Street farmer. You're not hands on
you see.
Speaker 8 (32:27):
No, that's right, But look overalled it. If we've seen
two ten dollar payouts and you know, back to back,
it would have been pretty incredible. But nine to fifty
is still pretty solid.
Speaker 4 (32:37):
Yeah, historically it's very good. Indeed, Richard Wire, thanks for
your time.
Speaker 3 (32:41):
Thanks Jamie.
Speaker 4 (32:43):
It is bang on ten away from one. Thank you, Richard.
Up next, how much is your farm worth? We're going
to tell you. It's Peter Newbolt from PGG Rights in
Real Estate. Monthly here on the country we tell you
how much your farm is worth with the GM of
(33:05):
PGG Rights in Real Estate, the Great Peter Newbolt, Peter
nine dollars fifty from Fonterra this morning. Do you think
that'll affect the price of dairy farms?
Speaker 9 (33:16):
To be honest, now, I don't think it will, Jamie.
I think probably people were aware that it was coming,
and you know, from where I sit, I don't think
it'll change things. The future still looks strong and you know,
the interest we've had in properties over the over the
last few months would for me would indicate there will
be no change in that space.
Speaker 4 (33:37):
You said to me, I think when we chatted a
month ago that you expected at PGG Rights and not
to have any dairy farms on your books at the
end of the season, I e. You had a buyer
for every one of them. Are you sticking with that?
Speaker 3 (33:49):
Yeah, definitely.
Speaker 9 (33:51):
You know, there's there's probably a shortage, which is a
good thing. But what we're actually seeing is, you know,
there's a lot of interest sub that ten million mark
and above that, there's a lot of buyers out there
looking so again capped out as far as you know
were values will go to. But yeah, no, I think
that's the case. What we may see in the new
(34:13):
year is some of those larger entities maybe look at,
you know, revisiting their structure as far as what properties
I've got. But other than that, I think it's going
to be a strong season. I don't think there'll be
much left.
Speaker 4 (34:25):
We've got record prices for beef and lamb. Is that
translating into increased demand for sheep and beef properties.
Speaker 9 (34:33):
It's just starting to come through now. You know, we
go back a couple of months ago, it was fairly quiet,
but now we're just starting to see momentum there, which
is good. You know, a good example of the you know,
if I go back a year or so, we took
some properties off the market, We've put them back on
the market and they've sold, so definitely there's momentum there.
(34:54):
The other thing we're also seeing is with some of
these properties were you've got neighbor interest, and I think
that's the other important thing people need to be aware of.
Neighbors are influencing a lot of the sales in both
dairy and sheep and beef, but in sheep and beef,
what we're finding sometimes is that some properties are being
sort of split up, a neighbor taking a portion, another
(35:15):
neighbor taking another piece. So you know, there's different ways
that these properties have been cut up and sold. But
definitely answer your question, it's moving forward, I think really well,
and we'll see that momentum go right the way through
into autumn.
Speaker 4 (35:30):
Does it follow if dairy farm sales are recentably buoyant
in terms of volume, that support blocks are as well.
Speaker 9 (35:39):
Yeah, definitely. And you know, dairy farmers as a rule
often big purchases of support blocks, as you know, and
that's one thing we've talked about. We see the new
year where support blocks will come into their own. I
think the other piece also is you know when those
moneys that come through from Frontra that'll make a different size.
(36:00):
I think we'll see that as we move into autumn.
I think we'll see solid sales there.
Speaker 4 (36:04):
Yeah, and autumn's traditionally the big selling season for farms.
Hey what about the Kiwi fruit farms?
Speaker 9 (36:11):
Yeah, I know that's an interesting space. We've just started
to see a few sales take place. I think that
the values are starting to people are studden to see
where they are. Probably, to be honest, I haven't seen
as much activity as I thought when I spoke to
you two or three months ago about it. But again,
that will slowly build and it's probably a good thing.
Speaker 3 (36:30):
You know.
Speaker 9 (36:30):
The last thing you want is those highs and lows.
So yes, there's momentum there.
Speaker 4 (36:35):
Hey, just to finish with chuck on your other hat
you wear at PGG right since your livestock hat. I'm
a big fan of what your team does around the
IHC calf and rural scheme, and I think you've got
some big calf sales coming up.
Speaker 9 (36:49):
Yeah. Look, it's been an incredible you know, first it
was nearly six months up and you know, looking ahead
into our busy time, some of our guys who've been
around for you know, decades have seen nothing like it.
So I think we'll see strong selling. The prices there
you're seeing at the moment it's solid, So yeah, I
(37:11):
think we're going to have a wonderful season, subject to
you know weather, and I guess that always plays a big,
big hand as we move further into sort of February
and March. But no, looking really good, and I guess
at the moment we've just got to bank it and
it's good for all our farmers. So yeah, long that continue, Jamie.
Speaker 4 (37:30):
Yeah, thanks to the team at PGG Rights, and thanks
to all you farmers out there who have donated a
calf or a lamb or a virtual calf or a
virtual lamb to the IHC CARF and Rural Scheme. Great course,
Peter Newbold, thanks for your time. We'll chat to you
again just before Christmas and you can be Santa Claus
with farm prices.
Speaker 9 (37:49):
Thanks very much, Jamie, have a good afternoon. Hi.
Speaker 4 (37:52):
Well, thank you, Peter. That wraps the show for day today.
Just remember if you'd like to donate to that wonderful course,
which is the ic Car and Rural Scheme, set up,
of course by the late greats of Pine Tree, Colin Meads.
Go to their website IHC dot org dot nz forward
slash carf to pledge great donations this year. I think
(38:16):
there's a big sale coming up at Tamuka in early December.
Great course, Thank you for supporting it. We'll see you tomorrow.
Speaker 1 (38:26):
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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