Saturday, September 8, 2018

Beef and Lamb Levy increases, how they are used and what will they achieve?

I have been visiting ram clients recently and had a fair number of discussions about these levies, the plight of our wool industry, the threat of artificial meat and of course the weather!.  On top of this I have taken the time to read Beef and lamb’s (“BLNZ”) reports on alternative proteins, future of red meat and environment strategy among others.  Well worth a read, but there is a lot to digest.

We have recently been advised that the increase in levies  will be invested in accelerating four key programmes: the international activation of the Taste Pure Nature origin brand and the Red Meat Story, helping the sector lift its environmental performance and reputation, telling the farmer story better, and strengthening B+LNZ’s capability to address biosecurity risks.”

Two of these programs; those within in New Zealand’s borders, I am sure they can affect change and indeed the environment strategy report details how and what they want to do.   The reason being these are internal matters within New Zealand borders, a small market, known participants, almost all are aware of what the issues are and the need to address them, the questions are simply what needs to be done, how and when.
However I somewhat skeptical regarding “the international activation of the Taste Pure Nature origin brand and the Red Meat Story” and I have read the levy proposal document and looked for much more detail as to how they propose to utilise the proposed budget of $9 million.  $9 million sounds like a lot but in reality it’s a drop in the bucket and I just can’t see how BLNZ think it will influence or change demand globally, without a lot of luck!!!   I would assert that you need hundreds of millions a year over many years to successfully increase market awareness of New Zealand Red Meat globally and accordingly anything less is just a waste of their time and our money.

Note in “telling the Farmer Story better” which from my reading of BLNZ literature is to do with surveying public perceptions and tracking over time if there any improvements: again if this is within New Zealand, I would expect this to be worthwhile, but if not then it is simply wasting more of our levy money because if you are simply peeing in the sea, then realistically there is no change to measure.

Note I did qualify my view with the words “without a lot of luck”.  The reason being in my view the only way to gain traction worldwide with a very limited budget is to use social media.
If BLNZ create a modern up to date trendy page that regularly post relevant articles, videos, events and information relating to the clean green environment of New Zealand, how we farm, scientific benefits of eating red meat, carbon foot prints, negative articles regarding synthetic meat (it may not be the panacea as some champion it to be) etc.  I have read a number of articles (independent or biased I don’t know) suggesting synthetic meats may not be better for the environment.   Similarly there must be issues about the chemicals required to culture meat from stem cells. 

Some articles will be funny, some horrendous, some only informational, but given millennials, from my reading of BLNZ’s literature, are the big players in the future of our industry and as I understand the big users of social media, this is the forum you focus on and with a lot of luck, you just might get some world penetration for $9 million.   There is a lot of information that could be posted on a Taste Pure Nature New Zealand Facebook page.  I would follow such a page and share anything worth reading. 
BLNZ needs to have someone dedicated to keep abreast of all the topics, research etc. and posting them and hopefully some will go viral.  They might even have to commission research. 

Perhaps this is already BLNZ’s strategy and I just couldn’t find it, but after visiting BLNZ Facebook page where it primarily has various recipes on how to cook various meat dishes, I doubt it; as I won’t be rushing back to visit that page or become a follower of it. 

I am not a millennial, but I am on Facebook and I went to watch the Taste Pure Nature video and thought I would share it on Facebook, but couldn’t (not easily) and it should be.

Finally this brilliant Taste Pure Nature social media page I am suggesting should also promote wool; wool is on the back of the lamb.   The virtues of wool being sustainable, better for the environment then nylons, plastics etc. (a fairly easy argument to win) ties in well with the theme of this page.   Clearly crossbred wool is in the doldrums at the moment and as a broker recently told me we need the global view on wool to change, not simply a few people or countries, so we need luck to make this happen

Sunday, July 15, 2018

Exorbitant credit card charges bane of travellers and shoppers' lives even in Colombia

OPINION: I am in Colombia, a stunning South American country.
Apart from a nice climate, great people and unbelievable fruit, being here again has really reminded me of how much modern technology is part of everyday life.  
It´s just so easy to keep in touch with family and friends in New Zealand.   I'm probably more in contact with my 18-year-old daughter over here than when she was living with me.
We are constantly reminded how technology can make our lives easier, quicker and more cost effective. The boundaries of its use in business and our personal lives is continually being challenged.
Travelling these days, is different to 30 years ago when I was last in South America.  If you know what a traveller´s cheque is, I am pretty sure I can describe you as an old bugger.   These days you carry a credit card and a mobile phone.   You use your credit card to go to an ATM machine to get money out or you simply use it to pay for every day purchases in whatever country you are in.   Clearly this is easy and convenient.
The technology to do this is high powered computers, with well-developed moron-proof software.   I am pretty confident in assuming that there is no labour input in any of these transactions, so why then are we being ripped off every time we go to change money via a bank ATM, pay for a meal at a restaurant or simply buy some groceries with a credit card?
I believe we are being ripped off in so many situations these days with the use of modern technology. If I take out the equivalent of $50 over here, the Colombian bank and my bank in New Zealand between them (to be fair most of it is the Colombian bank) take 12 per cent more of this for the privilege of me gaining access to my money.   I go to use my credit card and most businesses will charge an extra 5 per cent to pay by credit card because it costs them money to recover their money.
I paid for two weeks accommodation and tuition here in Medellin last week and my offshore service margin on my credit card account was $19.69.  For doing what? The computer software handles everything and it comes up on my account immediately. What costs are they recovering? 
Ike Williams has a serious issue with overly high  credit card transaction fees.

I don't know what the transaction costs are for foreigners when they visit New Zealand, but I would imagine they are paying too much as well.  
It´s not just foreigners in New Zealand, we all know businesses which have tried not to accept our credit cards because of the transaction cost, but these days it's almost compulsory to have this method of payment. I know lots of businesses which don't carry the online money transfer service PayPal, because of the transaction cost. Presumably its more expensive, but for what - not having to put my pin in or sign a piece of paper?
How can the exorbitant interest rates charged for credit card debt these days be justified if you don't pay it off every month?  We have had a historically low level of interest rates for years now, but still they charge double-digit interest rates on this debt. Perhaps they can justify this and I would welcome a publicly explanation to enlighten us all.  Surely its something the Commerce Commission could review and assure us that everything is fair and above aboard.
I realise that a lot of work goes into the development of software and its update and maintenance, but how can high charges be fair? Is it not just an excuse to collect money?   Surely the cost of these transactions with no human input must be parts of a cent these days, not 10, five or even one per cent of a transaction.
I know this topic is a bit outside of my normal farming musings, but it's something that grates me.   I wonder if it was the same brilliant accountant who told businesses, years ago now, that when they send their bill, add $10 to $20 and call it ¨sundries¨ We all know this is garbage. If you question the business, they usually reply it's for grease, paper towels, stationary, postage, soap and the like.  
I can't say these overly high credit card fees are ruining my visit to a great country, but they still get up my nose.
  • Ike Williams is a stud sheep breeder from South Canterbury.

Saturday, January 20, 2018

Headwaters should release the findings on intramuscular fat in lambs and everything else for that matter!!!

 I have just read another puff piece about Headwaters sheep. It was about Tim Burdon from Mt Burke Station at Central Otago farming Headwaters sheep. Perhaps these sheep are every bit as good as Mr Burdon claims, but I would like people to consider the following.

The research undertaken by Headwaters and the Alliance Group, under the umbrella of a Primary Growth Partnership project between the government and industry, claims that Headwaters lambs' intramuscular fat averaged above three per cent compared to other breeds at 1%”. It also claims “omega 3 levels are typically three times those of average lambs”.

As I understand it, none of this research has been peer-reviewed by an independent entity. Myself and others have been refused access to the research and its findings. Credibility would be enhanced by releasing all the research to interested parties. It would be nice to know what lambs and what breeds Headwaters is comparing its lambs with what breeds, what sample size, as the cynic in me wonders if they are comparing their lambs with the worst possible sample.

If their research was released, then it might counter what I have been told more than once, that intramuscular fat has no bearing on taste for the majority of lambs killed. They are simply not old enough to lay down enough intramuscular fat to have an effect on taste. It does have a bearing on older animals killed to be eaten, and it's important in cattle, but they are killed at an older age. If this research was released, then it could be peer-reviewed to see if intramuscular fat was a red herring or was something to be concerned about.

Ike Williams believes the customer is always right in the ag-industry
Ike Williams always trying to breed the ultimate animal
ke Williams: Stop killing ram lambs: utter rubbish or not?

We are told all Headwaters lambs are finished on chicory (and clover I believe) for a month before being killed. In the article I read, it states this "boosts levels of omega 3 and intramuscular fat." Again the cynic in me questions how much of this is a direct consequence of being finished on these crops and nothing to do with genetics. Does the data they have collated distinguish between those finished on these crops and those not? Can they genuinely apportion any gain to genetics as opposed to merely lambs being finished as they should be?

As I have said many times, the meat companies should pay a premium for lambs finished correctly, then you would get better tasting lambs. You don't need years of research to work that one out.

In the article in question it states "the PGP calculated premiums of 30 per cent to 50 per cent in prices for Omega Lamb but Tate [the project manager] said actual returns exceeded that. He declined to give details.

I believe Alliance pays them a 10 cents per kilogramme premium for their lambs, which is primarily based on supply of numbers, not fantastic tasting lamb. But again Alliance won't disclose what it's paying. At 10c/kg, this equates to currently perhaps a one per cent premium. I'm not sure where the rest comes from. I, like many shareholders, aren't impressed with Alliance's policy in this regard, and I know that they are losing lambs because of this and the price they are paying.

Remember these sheep are merely composites. Composites have been around for decades now. Many farmers started off with a good purebred flock, did well for five or six years, by putting composites over them. But how many farmers do you know 10 years down the track that are still using them? Not many, as problems often compound and production generally starts to decline the further you get into it.

Finally, Mr Burdon's claim about foraging is excellent, but I am pretty sure the proliferation of dairying forcing sheep onto the less productive country has had the same effect on all breeds, in particular, romneys. I think a good flock of romneys would be equally as good as these composites in this regard.