Simply the original prob was an increase in volumes in the industry by the main producers esp Inghams and Tegel. The mkt wasn't big enough to cope hence a glut. All their feed is imported and global feed is in oversupply hence cheap; this is what started the ramp up.. Global demand for chicken is good however atm due to bird diseases etc, overseas.If tegel has ramped up its exports that will be helpful.
Its also thought by some that Tegels estimates re sales and profits were exaggerated in the IPO by the Sellers.
Promotors originally were talking $2.50 for the IPO float. This could give some investors a clue as to their greed. Greed usually manifests itself in others ways too...like creative forecasting and in some cases attempts to bend the GAAP rules around reporting to artificially inflate one years results to make things look better / head off any potential litigation against the promotors creative forecasting.
You would hope that the veracity of a thorough audit would sort any and all of these issues out thoroughly wouldn't you...but consider this...all those audits of finance company books during the GFC could really be completly relied upon to detect fraud, error and deliberate corporate malfeasance couldn't they and the finance company Trustee's did such a "wonderful" job protecting investors money didn't they ! Something smell's a little "off' in the kitchen which is probably why Mr Ogden jumped ship.
Last edited by Beagle; 24-06-2017 at 02:16 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
There is shortage in lamb meat. There is a shortage of lamb exports from Australia and NZ. Lamb prices are rising. Beef prices are solid and consistent but with the dairy payout picking up, cull cow numbers are expected to drop. Therefore, cheap chicken will have more demand globally in the coming months. 2017/18 is going to be another chicken year globally as well as in New Zealand. Today, I visited one meat shop and I hardly found any lamb meat there. So far New Zealand lamb has performed strongly for the last six months. New Zealand is the world's largest exporter of lamb meat. A drop in lamb slaughter rates in New Zealand has pushed up prices to multi-year highs in export markets.
There is shortage in lamb meat. There is a shortage of lamb exports from Australia and NZ. Lamb prices are rising. Beef prices are solid and consistent but with the dairy payout picking up, cull cow numbers are expected to drop. Therefore, cheap chicken will have more demand globally in the coming months. 2017/18 is going to be another chicken year globally as well as in New Zealand. Today, I visited one meat shop and I hardly found any lamb meat there. So far New Zealand lamb has performed strongly for the last six months. New Zealand is the world's largest exporter of lamb meat. A drop in lamb slaughter rates in New Zealand has pushed up prices to multi-year highs in export markets.
All cyclical - farmers cut back lamb production in response to low prices in previous years, prices go up due to lower supply and guess what happens? Farmers cut back supply even further as they rebuild stock numbers, accentuating the supply shortage situation! Lamb prices move from high to low in a 3 year cycle. Beef prices are only back to their average over the last 7 years.
Chicken prices certainly look really good internationally. However, New Zealanders have always paid a huge premium over prices in other countries. Go to Asia and chickens are cheap as.
Meanwhile, drumsticks and chicken legs are being offered at ever lower prices as chickens have one 'breast' but two legs.
Drumsticks are chicken legs...Essential wings and legs are byproduct. The price issue is that breast - skin on - is still being specialed at $7.99kg. This suggests the glut is not yet over.
Originally Posted by winner69
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