Monthly Archives: June 2012

Glimpse of NZ economic growth, hold firm

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The latest figures from Statistics NZ show a glimpse of improvement in economic activity, with a rise in gross domestic product (GDP) of 1.1 percent in the first three months of 2012, helped in part by primary food manufacturing, including meat. However, economists say it won’t necessarily result in a cut to New Zealand’s OCR anytime soon and the NZ government is intending to continue on its current course.

Compared with the March 2011 quarter, economic activity in the March 2012 quarter was up 2.4 percent. For the year ended March 2012, economic activity was up 1.7 percent compared with the year ended March 2011.

The main contributors to the increase were: manufacturing (1.8 percent), primarily primary food manufacturing and metal product manufacturing;agriculture (up 2.3 percent) mainly driven by an increase in milk production; and business services (up two percent), which include professional, scientific, technical, administrative and support services.

“Continued good growing conditions have been a major factor in the growth this quarter and it is reflected in both the milk production in agriculture and in meat and dairy manufacturing,” says Statistics NZ’s national accounts manager Rachael Milicich.

The expenditure measure of GDP was up 0.8 percent in the March 2012 quarter, due mainly to investment in fixed assets, a $416 million build up in inventories as supplies of goods produced exceeded demand and a small increase in the volume of spending by NZ households.

Picking up the pace, “right on cue”

Westpac economists say the bottom line is that the pace of growth is picking up in 2012 “right on cue after a prolonged recession an the disruption of several earthquakes.” Senior economist Michael Gordon comments, however: “The composition of growth is likely to change in coming quarters, as exports slow and reconstruction activity picks up, but we are on track for an acceleration in overall activity this year.”

He says interest rate markets are now pointing to a one-third chance of an OCR cut later this year.  “We broadly agree with this pricing, although we don’t think today’s figures really shifted the odds much – the Reserve Bank made it clear in its June Monetary Policy Statement that the case for cutting rates depends on a nasty turn of events in Europe.”

While the figures represent a major upside surprise to RBNZ’s forecast of 0.4 percent growth, Westpac thinks that today’s result will not prompt the RBNZ into raising interest rates any sooner than it was already intending.

Government holding course

The government is maintaining its firm hand on the tiller. While the economy grew more strongly than expected in the quarter “despite ongoing economic and financial uncertainty in other parts of the world,” Finance Minister Bill English says: “What’s important for the Government is taking a long-term view of building New Zealand’s competitiveness and productivity, which will help us deal with headwinds from the uncertain global environment. That’s the focus of our economic plan.”

David Bayvel moves to WSPA

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A familiar face in New Zealand animal welfare is taking on a new international role.

As of 1 July, Dr David Bayvel QSO – who recently retired as director of animal welfare for MAF – will join the World Society for the Protection of Animals (WSPA) as Chief Veterinary Adviser. His newly created part-time role will be replacing the role held by Dr David Wilkins from 2004-2012.

In his new role, Bayvel will help to ensure that WSPA is working at the heart of the veterinary profession around the world to support and advance animal welfare. This will include working with the World Organisation for Animal Health (OIE) on the drafting of standards to ensure the implementaton of international standards and laws to protect the welfare of animals, says WSPA. He will also advise on WSPA’s programmes supporting the education of veterinarians through specially designed animal welfare training modules.

A renowned expert in the fields of animal welfare and veterinary science, Bayvel’s career has taken him around the world in the past four decades, including posts in private and public sector organisations and veterinary practice promoting ethical care and treatment of animals. He recently retired from the position of director of animal welfare for New Zealand MAF. He chaired the OIE ad hoc export group meeting on animal welfare and chaired the permanent OIE Animal Welfare working group from 2002-2012. He will now move to represent the International Coalition for Animal Welfare on this important OIE group.

Bayvel says he’s honoured to join WSPA. “I have long admired WSPA’s measured approach to animal welfare and its commitment to improving the conditions for animals around the world. WSPA has a proven track record on the world stage of forging collaborations with other key international NGOs and governments to have a lasting positive impact for animals and their communities.”

Dr Wilkins is to continue his involvement with WSPA, working on several special projects.

Canada joins TPP

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Canada is also joining the Trans Pacific Partnership (TPP) negotiations.

The move, announced by New Zealand Minister of Trade Tim Groser today and following the news that Mexico was to join the negotiations earlier this week,  “demonstrates how dynamic this consultation process is,” the Minister says.

“Our vision for the TPP has always been to create a high-quality and comprehensive trade agreement which over time will act as a platform for wider Asia-Pacific trade liberalisation and economic integration.”

It shows that progress is being made in building an open and inclusive agreement, says the NZUS Council.

“Canada’s decision to join the TPP negotiations following Mexico’s announcement  is further proof that TPP is open to new members who believe they can meet the high standards set by the agreement,” says NZUS Council executive director Stephen Jacobi.

“Canada is a major global economy and a long-standing friend of New Zealand.  A successful outcome to the TPP negotiations will allow the economic relationship between New Zealand and Canada to reach a new level”.

New Zealand exports to Canada in 2011 were worth $597.4 million and it was our 19th largest export market. The top exports were sheep meat, beef and wine.

Jacobi foresees tough negotiations ahead on market access for agricultural products given that Canada maintains tight restrictions on supply managed industries including dairy and poultry.

“The NZUS Council’s submission to the New Zealand Government last year made clear that we considered Canada’s supply management policies incompatible with the vision of TPP as a comprehensive, high quality and ambitious agreement.  These differences will now need to be resolved at the negotiating table”.

Jacobi noted that Japan was continuing to follow the TPP process closely.

“We look forward to Japan joining the negotiations once the Japanese Government is  confident it can meet the high ambition of TPP and consultations are complete,” said Mr Jacobi.

Like the process for Mexico, the next step with regard to Canada joining the negotiations would be for the nine current TPP participants to complete any applicable domestic legal procedures. Following this, Canada would formally join the negotiations as a new participant.

Kiwi companies fitter, faster and better able to take advantage, says ANZ

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Kiwi companies have emerged from the Global Financial Crisis (GFC), fitter, faster and better able to take advantage of a growing economy according to a major survey from ANZ National Bank Ltd.

“The GFC really put Kiwi businesses through the mill. Most have come out the other side leaner, tighter and more focused,” says ANZ’s managing director for commercial and agri, Graham Turley. “They have adapted to the new normal, are ready for growth and their expectations are now more realistic and more sustainable long-term.

This is in stark contrast to other places, such as Europe, Asia, the US and Australia and is critical to New Zealand surviving the current international economic turmoil.”

Availability of staff, falling consumer demand and making red tape simpler and less time-consuming continue to concern business owners, as does opening new markets internationally and balancing family and work.

The ANZ has released the findings of its Privately Owned Business Barometer 2012, which provides insights into a key sector of the New Zealand economy. Now in its sixth year, it questioned 4,870 business owners from different parts of the economy, including agri-businesses, about the issues affecting them and their views on the challenges ahead.

Key points found:

  • 88 percent of businesses expect positive growth in the next 12 months; 96 percent expect it in the next three years. Though just 14 percent of respondents expect growth of more than 26 percent over three years, compared to 55 percent in 2008.
  • 39 percent of businesses turning over more than $1 million a year cited availability of staff as an area of concern
  • 31 percent of non-agri businesses turning over more than $1 million a year are operating internationally and a further 11 percent aspire to.

 

Mexico joins TPP

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Meat exporters to the Americas will welcome the news announced by Minister of Trade, Tim Groser, that Mexico is joining the Trans Pacific Partnership (TPP) negotiations, alongside current participants Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, the US and Viet Nam.

“We believe Mexico’s participation in the negotiations will contribute to the objective of creating a 21st century agreement that will spur economic growth and development, promote innovation, benefit our consumers, and support the creation and retention of jobs, high living standards and the reduction of poverty in our countries and the broader Asia-Pacific region,” the Minister says, adding the NZ is looking forward to working with Mexico to conclude a comprehensive and balanced package, taking into account the diversity of the levels of development.

Step towards free trade area

According to the NZ-US Council,  this is another step towards achieving precisely what was first envisioned – a free trade area of Asia and the Pacific.

“This is good news for businesses which need to operate more effectively and seamlessly in the region,” says NZUS Council executive director Stephen Jacobi.

“Mexico is a steadily growing market for our products, with enormous potential for New Zealand exporters. A successful outcome to the TPP negotiations will also allow New Zealand to leverage the potential in the education and research relationships we have with Mexico.”

Mexico’s entry will make New Zealand’s competitive position in Mexico the same as the NAFTA partners, USA and Canada.

New Zealand exports to the market in 2011 were worth $414.8 million and it was our 25th largest export market. Meat and dairy are the top New Zealand exports to Mexico, with dairy accounting for 62 percent.

Jacobi says that the NZUS Council is pleased to note Mexico is joining the TPP n the same terms as those already taking part in the negotiations. This means these economies share the aspiration for an ambitious and comprehenisve 21st century agreement.

“If the momentum started by Mexico leads to a Free Trade Area of Asia and the Pacific, we would see New Zealand lift its exports by 8.5 percent above 2025 baseline levels and welfare gains to New Zealand lift by 1.35 percent of GDP.

“We look forward to Japan and Canada joining the negotiations, once both economies are confident they can meet the high ambition of TPP and consultations are complete,” says Jacobi.

ACCORDING TO NZUSC: TPP is an existing trade agreement between Brunei, Chile, New Zealand and Singapore, which Australia, Malaysia, Peru, the US and Vietnam wish to join. Eleven rounds of negotiations have been held involving the nine partners. The economies of the Asia-Pacific Economic Cooperation (APEC) account for over 70 percent of New Zealand’s total merchandise trade. Trade with APEC economies has been growing at an average of 4.5 percent per annum over the last 20 years. The TPP could add around $2,.1 billion to the New Zealand economy by 2025, according to research undertaken by the East-West Center in Honolulu.

Asian consumers emerge as driving force

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Consumers, rather than politicians or regulation will determine the future of New Zealand farming, according to ANZ New Zealand.

“Demand for safe, high quality agricultural products from the growing economies of China, India and Asia will increasingly determine what agricultural products are produced by New Zealand and how we produce them, says ANZ’s managing director commercial and agri, Graham Turley.

“Supplying these markets will be the lifeblood of the New Zealand economy for the foreseeable future. It is crucial that the focus of the farming sector now is producing the right products at the right price and getting them to those markets.”

Turley’s comments were made to coincide with National Fieldays 2012, for which ANZ New Zealand was a strategic partner. The event was held at Mystery Creek, near Hamilton (12-15 June 2012). Over half of New Zealand’s farmers bank with either ANZ or the National Bank, the bank says.

Nearly 128,300 visitors attended the 44th New Zealand National Agricultural Fieldays this year. Organisers say 40 percent more people went through the gate on the final Saturday, compared to the previous year. “Overall attendance was a nine percent improvement on the 2011 event, leaving exhibitors and organisers exultant with the four days effort.”

 

NZ export revenue expected to decline in 2012/2013

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New Zealand’s primary sector export revenue is expected to decline in 2012/13, as prices for commodities, such as New Zealand lamb, beef and venison, continue to come under pressure, according to a new report from the Ministry for Primary Industries (MPI).

Releasing its latest annual review of the sector, Situation and Outllook for Primary Industries 2012, MPI deputy director-general Paul Stocks noted that the prices for New Zealand’s primary industries are falling from relatively high levels but in general remain quite favourable. “Production this season has been generally good – even great for some – due to favourable climatic conditions.”

Summarising the sector, the review notes that meat and wool export revenues are expected to increase by 5.8%, to reach $7.2 billion, in the year ending 30 June 2012, owing to increased meat volumes and wool prices. Prices have been at high levels but now lamb schedule prices are falling back faster and further than the normal seasonal decline, says MPI. “This is because price-conscious consumers in Europe have shifted to less expensive meats. Some further falls are expected, but these should be modest because of lower stock numbers here and overseas.”

For beef, demand and schedule prices have held up better because of robust demand from Asian markets and falls in supply in the US and Australia.

Prices for venison have been falling since September 2011 and are forecast to bottom out in the first six months of 2012 and then rise slowly over the outlook period, reflecting decreasing supply from New Zealand and continuing demand.

The report shows that the meat sector has seen increased meat production this year as a result of favourable climate and pasture conditions.

Exchange rates continue to be of concern – and the greatest area of forecast uncertainty – says MPI.

A pdf copy of the report can be downloaded at the MPI’s website (Publications, News and Resources), where you can also order a hardcopy.

Six Second Project calls on worldwide meat industry to end child starvation

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An ambitious new charitable project encouraging the worldwide meat industry to spearhead a new initiative aimed at ending child starvation and hunger was launched at the recent World Meat Congress in Paris last week, endorsed by the International Meat Secretariat.

The Six-Second Project is a global non-profit organisation, based in the US, deriving its name from the appalling statistic that a child dies every six seconds from hunger or hunger-related causes. The Project aims to raise widespread awareness of that fact, to be achieved through a unified fundraising and awareness campaign led by the global meat industry. Another goal is to foster innovative and sustainable solutions to the hunger pandemic, especially in areas where the six-second statistic is the unacceptable reality, the organisation says.

The worldwide meat industry and its partners are being challenged to join the Project by participating in a unified cause ’cause marketing’ campaign to raise funds for defeating hunger.  The ambitious idea is that project partners will create special products and/or promotions and commit to donating a generous portion of sales to the Six-Second Project. Funds raised will then be used to provide grants that foster innovative and sustainable solutions to the global hunger pandemic.

“It is our hope that, by raising awareness of this global issue, the general public will also be inspired to make a difference, not only through their purchases of products from participating partners, but also through volunteering, donating and recruiting their neighbours and friends to become involved in this noble cause,” say the organisers.

In the unprecedented move – this is believed to be the first time a global industry has been challenged to confront such a crisis – the Six-Second Project is targeting the meat sector’s food production and distribution experts as it believes they have “never been better suited to accept such a challenge”.

The meat industry is not without its critics, its organisers note. “The industry is being challenged to address its environmental impact, and the sustainability of its future production. Likewise, the Six-Second Project challenges the meat industry to harness its size, strength, knowledge and diversity to become the leader in this fight. Through a unified effort to fight hunger, the industry can effect positive change by giving back to the communities that need it most.”

At the project’s launch at the World Meat Congress, chief executive of the US Meat Export Meat Federation, is reported to have said: “This is an opportunity to make meat the brand that is fighting global hunger.”

 

 

 

 

2012 Landcorp Agricultural Communicator of the Year

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Steve Wyn-Harris (left) receiving his award from Landcorp chairman, Bill Bayliss.

Congratulations to Steve Wyn-Harris, a Hawke’s Bay sheep and beef farmer and farming commentator, who has just been announced as the 2012 Landcorp Agricultural Communicator of the Year.

Wyn-Harris started his farming career in 1985, when he bought 180 hectares in Central Hawke’s Bay, adding several other blocks over the years, so he and his wife now have 350ha. The properties carry high performance breeding ewes, including a Coopworth sheep stud that uses the latest technology such as sire referencing, AI and gene identification. Bull beef makes up 40% of the stock carried and 15% of the property is planted in forestry and areas of amenity and native plantings are scattered over all the farms. He has won a number of farming awards over the years, most recently last year when the farm took out the East Coast Balance Farm Environment Supreme Award.

He took out this year’s award as a broadcaster with his own local radio show and a regular on the national Farming Show. He is also a longstanding columnist and has been contributing weekly columns for many years and currently appears in NZ Farmers’ Weekly.

The Award is administered by the NZ Guild of Agricultural Journalists and Communicators (NZGAJC) and recognises excellence in communicating agricultural issues, events or information. regarded as the premier award for agricultural communicators, it is also the most valuable prize on offer. Landcorp provides a prize of $2,500, which is part of a funding package of $7,500 in sponsorship for the Guild. The additional funding assists with administration costs, including the award dinner.

Guild President, Jon Morgan, said Steve is a worthy recipient of the award this year. His columns, comments, presentations at conferences cover an extensive range of topics, but his style remains the same, relaxed, whimsical and often humorous. “He is widely respected as an excellent farmer, but has that rare gift of communication that crosses all areas of rural life.”