PGW - PGG Wrightson

[blackcap]

I had a brief word with Meng Foon at the last AGM. He seemed very measured and respectful as a new director ought to be and gave the impression he is taking his new role seriously, and was not keen to put his head above the parapet until he was fully up to speed with his duties. When you say 'not competent' Blackcap, do you mean he is not a trained lawyer or accountant?

SNOOPY

No, I have no idea of his competence. I am only saying what I heard another board member say about him. But when he was race relations conciliator I thought he lacked judgement.

I question his independence and I do not want an Agria stooge on the board as an independent. (Pure supposition on my part) but independence is something minority shareholders should value. I fully support the NZSA on this issue.

[kiora]

Not good for PGG?
https://www.rnz.co.nz/news/business/...+28+March+2024

[Snoopy]

Not good for PGG?
https://www.rnz.co.nz/news/business/...+28+March+2024

From the article

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McAra said companies providing essential maintenance like electrical work are doing okay but others were having to make tough decisions to survive.

"Farmers are having to make decisions on where to spend and where to defer, if they can put off things like upgrading buildings or even using fertiliser they are doing so."

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No it isn't good news. But there are consumable products down on the farm that still have to bought and utilised. PGW deal with these products. PGW are not into selling new tractors or 'boats cars and discretionary spend'.

SNOOPY

[Toddy]

My farming friends are running their businesses as tightly as they can. And any cash left over is being invested on the stock markets in good and sometimes cheap companies.

From top down Farmers are getting smarter so if the ROI doesn't stack up on the farm then they spread their risk and invest in other areas of the economy.

I've never read any stats on this. It's definitely becoming more common. Hence, never assume that on farm expenditure will return to the good old days.
Climate change, increased regulation etc means that farmers need to spread their dollars across other less risky sectors.

[Snoopy]

My farming friends are running their businesses as tightly as they can. And any cash left over is being invested on the stock markets in good and sometimes cheap companies.

From top down Farmers are getting smarter so if the ROI doesn't stack up on the farm then they spread their risk and invest in other areas of the economy.

I've never read any stats on this. It's definitely becoming more common. Hence, never assume that on farm expenditure will return to the good old days.
Climate change, increased regulation etc means that farmers need to spread their dollars across other less risky sectors.

Interesting perspective. I have cousins who are farmers. But I have often reflected that if I was farmer myself, I would not invest in PGW. That isn't because 'deep down' I don't believe in the company. I definitely do think that PGW do a good job in supporting and supplying our farming community. But, using exactly the same logic as Toddy, if I was a farmer with a bit of spare capital, I would likely invest in some complimentary industry that would supply some cashflow to my farm when farming times were tough. But that is all hypothetical as I probably would not work hard enough if I were a real farmer anyway. It is much easier being a 'pseudo keyboard desk farmer' tending my modest vegetable patch.

What is heartening from your comments Toddy, is that you and your farming friends have 'cash left over'. In a real farming downturn you would not have that. So I see the current farming downturn more as a return to a 'grumbling norm' rather than a portent of a mass walk off their land by the rural debt stricken.

SNOOPY

[Toddy]

Reasons to feel optimistic.

No longer an anti farming government.
8 percent European NZ tariffs come off 1 May.
Cost of debt will decrease as interest rates come down.
Pressure on the NZ dollar due to interest rates.
Cost of labour decreasing due to a flood of immigrants and return of back packers ( just signed picking contract that is cheaper than last year).
A good summer.
That's just to name a few.

There are always things out of your control when dealing with nature. But I will take that any day of the week compared to my 25 years of being a spreadsheet and coffee drinking expert doing accounting and banking sitting in a office chair.

[kiora]

NZ less reliant on cropping?
https://www.sharecafe.com.au/2024/04...ic-challenges/

[Toddy]

NZ less reliant on cropping?
https://www.sharecafe.com.au/2024/04...ic-challenges/

Pretty much just another day on the farm.
As I've said in the past, there are no stats differentiating between forced pull back on, on farm expenditure vs farmers just choosing to invest elsewhere to diversify.

[kiora]

"New Zealand Ag Needs Innovation To Stay Open For Business"
https://www.scoop.co.nz/stories/BU24...+16+April+2024

[Snoopy]

"New Zealand Ag Needs Innovation To Stay Open For Business"
https://www.scoop.co.nz/stories/BU24...+16+April+2024

I read the article by Liz Shackleton:
"Liz Shackleton is chief executive of Animal and Plant Health NZ, the industry association for companies which manufacture and distribute crop protection and animal health products."

and I thought. "What a whinger." Basically she wants all restrictions on the importation of overseas new chemicals for agricultural purposes to be 'fast tracked', which would obviously suit the business sector she represents very well.

"With new products taking up to five years to register, with a 100 day statutory target, and minor product changes taking more than year, with a 10 day target, New Zealand’s market is simply too small for delays of this magnitude, so they will invest and supply elsewhere."

These 'up to ' statistics are misleading. What product took five years to register? No doubt there was a very good reason for that! More to the point, what is the average time for approval?

"The EPA is allocating four times more resourcing to reassessing products than to introducing new, environmentally-friendly chemistry into New Zealand."

What is wrong with reassessing products as more data becomes available? I would expect nothing less from the EPA.

"The regulatory system is strained by inconsistent risk models, a labour-intensive processing system, and decisions inadequately considering the environmental benefits of newer chemistries. A balanced risk assessment considers proportionality as well as severity and probability".

It is not industy's job to determine risk models. Automation will not improve the processing of new applications. This is just horticultural suppliers bluster. Nothing more. Thank goodness the EPA is there to regulate these idiots.

SNOOPY