Originally posted by speights boy
View Post
Announcement
Collapse
No announcement yet.
Dairy Woes
Collapse
X
-
Don't know really.
Vast majority will be OK, some with with banking support, although a no frills lifestyle.
One article I read guesstimated that perhaps 40% of rural debt was held by only 10% of farmers.
Probably by leveraging rising land prices to increase their holdings.
A lesson for everyone....nothing lasts forever, and you need cashflow to survive.
Comment
-
Finance Minister agrees NZ$2.40/kg payout would be "disastrous"; says RBNZ and Government in talks with banks to 'go easy' on farmers; warns banks not to trigger farm sales that would drive land prices down
"It's a topic that we've been discussing and the Reserve Bank is certainly discussing it because of their interest in financial stability," English said.
"So they'll be looking with the banks fairly closely into just where the dairy debt lies.
And it's a relatively small number of dairy farms that have high levels of debt.
So the indications are the banks are certainly going to be helping fund a lot of farmers through this next season because their cost of production could be higher than their revenue," he said.
"And then there will be a minority for whom there is some real pressure, because they were over-extended on debt."
Comment
-
It all sounds more serious than 'smile and wave' assertion that dairy is only 5% of the economy so no biggy.
Once you start driving land prices down all farm loans are at risk as the security disappears.
It was interesting that when diary was doing well it was trumpted by JK and BE as good for the economy but when doing badly it 'doesn't matter much' (more from JK than BE I might add).
You can't really have it both ways.
What it does show is that being a primary commodities producer isn't that secure.
We need more tech - tech that we keep the IP for and sell overseas - rather than rely on commodities like milk, meat, wool and wood.
Comment
-
This was one of the comments to that article.
"Methinks this is going to turn very, very nasty - throw in a very likely El Nino driven generalized drought layered on the existing East coast drought and you have a recipe for a dairying bloodbath (and maybe even a full blown run on the NZ$).
I must admit that English's comments make little sense - aren't National the party of 'the market is always right'?
If there is a glut in dairy produce while the farmland used to produce said glut is chronically over valued then surely the market must be allowed to act - and topple the price of the farmland?
Or do National only believe in 'the market' as long as it does not hurt their biggest backers?
I suspect National will have a bit of explaining to do if a collapse in dairy farm prices allied to a dramatic fall in the NZ$ allows Johnny foreigner to scoop up NZ most productive farming land for peanuts - but that will be their precious market working, will it not?"
Comment
-
On Sunday - TVOne on Sunday night it had the Aussie Farmers being pushed off their land by the banks - who sell to Chinese investors. Long story but the short of it is this - Australia is losing it's food to China and it is a massive concern as China buys up the land to feed their masses. China has $3 Trillion to buy up rich land to farm to feed China. Chinese buyers take organised buying tours - buy the farms, the infrastructure and entire supply chain including the port then sends in immigrants (of which the recent free trade agreement allows). So everything the land produces is shipped back to China to feed their masses. What's going to happen to the Aussies?
So is it all rigged? Possibly. China controls the retail price of beef. It buys from Aussie for less than $4 - farmers go broke - Chinese let banks know they are ready to buy, banks foreclose on farmers and the Chinese move in.
Will it happen here? Yes, we won't be able to stop it. Think of the distressed farmers now - the banks want their $$ and they have investors ready to give it to them...probably with a nice fat bonus.
cheers,
donnaEmail Sign Up - New Discussions, Monthly Newsletter, About PropertyTalk
BusinessBlogs - the best business articles are found here
Comment
-
Fonterra has a few farms around the world, including China.
We also (assume its still running) have training programs here for foreigner's to learn how we dairy. OH parents are still in touch with the Asian family who came out and learnt with them (20 years ago?) not sure who funds it, he was recently back for additional training recently.
Comment
Comment