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06-08-2015, 03:22 PM
#5911
There was an interesting contribution on interest.co.nz yesterday that basically said that for many dairy farms the increased milk productivity over the last years has actually cost farmers. The extra costs are more than the extra revenues - the folly of an industry using average costs instead of marginal costs concepts,
Methinks it is those farmers who have the excessive levels of debts
”When investors are euphoric, they are incapable of recognising euphoria itself “
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06-08-2015, 06:49 PM
#5912
Dairy Price Slump forcing Sharemilkers out of business
As I have predicted for at least the last couple of months sharemilkers (one of the key customer groups HNZ have been targeting for loan growth), are in real trouble and the dairy price collapse is starting to force some of them out of business already, surely even far worse to come with the latest additional 10% GDT auction price fall this week.
http://www.radionz.co.nz/news/rural/...el-price-pinch
How you forecast loan provisioning for the FY16 year (and therefore forecast net profit after same), I have no idea but HNZ are sure putting a brave face on this forecasting profit growth in this environment ! But does the market agree or see through this bravado ?
And this, make no mistake its very grim http://www.radionz.co.nz/news/rural/...r-price-plunge
Last edited by Beagle; 06-08-2015 at 08:18 PM.
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06-08-2015, 08:58 PM
#5913
1) It's terrible for the sharemilkers etc involved and I hope they make it through ok.
2) I wonder if we'll see dairy farms converted back to sheep/beef/crop now?
3) HNZ writes off $52m, declares zero dividend, shareprice halves in short sighted panick (eg CNU), Sharetrader members band together and launch a successful takeover and proceed to buy large boats, cars, planes and Greece with the spoils.
Last edited by nextbigthing; 06-08-2015 at 09:00 PM.
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06-08-2015, 09:04 PM
#5914
Originally Posted by nextbigthing
1) It's terrible for the sharemilkers etc involved and I hope they make it through ok.
2) I wonder if we'll see dairy farms converted back to sheep/beef/crop now?
3) HNZ writes off $52m, declares zero dividend, shareprice halves in short sighted panick (eg CNU), Sharetrader members band together and launch a successful takeover and proceed to buy large boats, cars, planes and Greece with the spoils.
Spot on.
Have another wine,and keep repeting the medicine.
Feel sorry for ANZ who have about $9 to $12 billion in the sector.
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06-08-2015, 09:34 PM
#5915
Originally Posted by percy
Spot on.
Have another wine,and keep repeting the medicine.
Feel sorry for ANZ who have about $9 to $12 billion in the sector.
And why not declare a zero dividend if there are zero profits? The GFC showed what can happen when the situation is not faced. It does seem to be the sharemilkers who will be worst hit. But NZ will also be hit too. A quarter?, of our exports gone south?
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06-08-2015, 09:44 PM
#5916
Just as well tourism is soon to displace dairy for its nett worth to NZ, did someone mention the overestimation of the value of dairy to our economy going forward, whoops I think I just did
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06-08-2015, 09:48 PM
#5917
Quite right couta, we have got much more to our 'backbone' than in the past.
NBT, deconversions? Why not, being openly talked about right now. We used to pay wine growers to pull vines out during the glut. We rely on market forces to do the job these days. Bring it on
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06-08-2015, 10:14 PM
#5918
Conversions? Deconversions?
Bit like dealing with a sharemonger.
Oh yes I think you should sell?
Oh yes I think you should buy?
Clipping the ticket whatever way the market goes.
Did sharemongers, bankers,convertors,and deconvertors all go to the same university,or were they self taught?
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07-08-2015, 08:29 AM
#5919
Maybe not de conversions but less intensification. Lower op costs and lower production but (hopefully) similar profit (given profit will be 0 this year).
Why stress the environment/workers/cows for no payoff.
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07-08-2015, 09:01 AM
#5920
A weaker than expected profit from ANZ and its $3 billion capital raising have sparked a massive selloff of shares in the banking sector.
Pity HNZ has been tainted by the Australian banks,as it does not need to raise capital.
In fact, it has too much capital.
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