Imagine if the AUKUS ties gave us a FTA with US. What would the price be then?
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Imagine if the AUKUS ties gave us a FTA with US. What would the price be then?
We can imagine all these things. The core point is governments like being re-elected. And I would ask the question, will there be more potential votes for them from:
a/ Our rural communities or
b/ from US government officials with military connections.
Our government ministers are not stupid, even if some opposition politicians and media critics make them out to be that way.
But as a seemingly now departed from this forum poster used to keep reminding us: "Nobody can accurately predict the future." That is why when you invest in something like PGW, you have it as part of your portfolio, not an all in 'red or black' bet.
SNOOPY
Have you included the possibility of cash strapped farmers also selling any share investments they may have to help them through these tough times.
This one is looking long and deep. So the up cycle may take longer to develop than previous cycles.
Im picking the sp to be $1.50 before too long.
Farmers generally don't own shares (as a rule) but have not investigated to what extent farmers have holdings in PGW. But looking at the top 20 holders or about 66% of the company does not look like farmers. So yes there may be some farmer investors, but I don't think they will have much effect on the SP.
Cycles may take longer and this one might be deeper but at $1.75 for me is a good entry point.
Farmers over the decades have been the backbone of New Zealand. Earn the export dollars and spread the cashflows to keep the lights on. And are all about diversification as farm income is up and down.
Hence, the big share portfolios. I am a farmer, and do not know a farmer who does not invest in other sectors.
I loosely supervise a couple of vege patches. Does that qualify me as a hobby farmer? Probably not. But on what has become my annual visit to my local PGW store here in Christchurch I am always treated respectfully. Furthermore the staff have always been able to answer my 'agtech' questions. Back in the day (which, gulp, may have been when PGG Wrightson was just Wrightson) I used to buy quite a bit of clothing there too, although that was when they had lots of NZ made clothing. I don't bother now, they have gone down the import clothing route like everyone else (that unique selling point disappeared).
One of my investment criteria is "Don't invest in a company that you wouldn't be happy to be a customer of yourself." PGW ticks that box for me.
SNOOPY
discl: holder
This is not good for S & B NZ outlook for present & next year
"Meat & Livestock Australia (MLA) is forecasting lamb production will this year reach 621,000 tonnes, a 9% increase on 2023, and the fourth successive year of record production. If achieved, the 2024 production will be 21.3% above the 10-year average."
https://www.farmersweekly.co.nz/mark...year%20average.
https://www.mla.com.au/globalassets/...ons_280224.pdf
Yeah right ? I don't think so ! That's not what I've been hearing
"Banks confident in agricultural clients as more non-dairy loans become distressed
The country’s major banks are confident their farming clients ar well positioned to cope with prolonged weakness in commodity prices putting pressure on bottom lines.
That's despite the Reserve Bank of NZ (RBNZ) highlighting that stress in agricultural loans outside the dairy sector is at its highest in more than 10 years"
https://businessdesk.co.nz/article/p...4229-446239310
"It's a major crisis."
Farmers were cutting costs where possible, but some costs - like rates - could not be, Barton said. He quoted his South Wairarapa District Council rates, which were due to increase 15.3 percent. His insurance bill had jumped four-fold in eight years."
""I'm aware of one business where there's $120,000 of lime and fertiliser that won't be going on"
"And the same farm still ends up with an $88,000 deficit."
""It's looking challenging for the lamb sector and the mutton sector. We're not really expecting any improvement in international prices in the next 12 months or so, so cash flows are likely to deteriorate even further over that time. Some people are finding it hard to see the light at the end of the tunnel."
There was a big slowdown in tractor sales and fertiliser use, while repairs and maintenance were being deferred, Kilsby said"
"He knew of farmers working off-farm to make the books balance."
https://www.rnz.co.nz/news/business/...ay+11+May+2024
I was listening to RNZ on Friday lunchtime. An Eastcoast farmer was explaining about wheat crops etc still in the ground. Said they lose money trucking to Hamilton at today's prices. Said also the big NZ manufactures are importing subsidised European wheat at cheaper prices.
Add to this the dry weather forecasts.
Things are very sick in rural NZ. And it hasn't really played out yet.
My brother in law Dairy / Beef Farmer almost crying on my shoulder due to Work Load Stress caused by debt and the interest bill on it. Rather than lecturing on the Risks of debt in a low interest environment since 2008 GFC 1 , I just listened and sympathised.
He is mid 50's with a intergenerational farming experience...
When have you ever heard from a happy farmer?
On a good year, they did not produce enough.
On a bad year (the seasoned farmers know and prepare for 1 in every 4 years), they produced too much.
Take everything the media present about the farming sector with a pinch of salt.
Fair enough but how are exports doing?
Have look at the following charts and draw your own conclusion :
https://beeflambnz.com/industry-data...e-trend-graphs
For those shareholders late to the share register, here is a reprise of why I am not too concerned at the recent share price fall
Now I am not expecting a dividend soon. But this is no Synlait. The banks are standing behind PGW. And as far as senior PGW management is concerned 'this is not their first rodeo'.
SNOOPY