A2 Milk has lost  some of its sharemarket  gloss but has  become a formidable  dairy player with a bright outlook

Two  encouraging signals from the  dairy industry this week underlined  its strength  as  the backbone   of the  NZ  export  economy, all the  more vital since  the  Covid-driven collapse  of the international tourist  industry.

First  came  news that prices  strengthened  at the  latest  Fonterra  global dairy  trade  auction, with  the  average price reaching  $US3157  a  tonne. Prices for other products sold were mixed, with gains for butter and skim milk powder, but falls for cheese and other products.

Analysts  said  it  was  positive  to see  good, strong  demand  from   China. The  price  of  wholemilk powder  which  strongly  influences the  level of  payout to Fonterra’s  suppliers  moved  up  1.8% to $US3037  a tonne.

 ANZ agri-economist Susan Kilsby said there had been some concerns that stocks may be building in China, so it was really positive to see good, strong demand from that market for the dairy industry. Continue reading “A2 Milk has lost  some of its sharemarket  gloss but has  become a formidable  dairy player with a bright outlook”

Here’s hoping the advice on prosperity gels with the advice on fairness

In  all the concerns  afflicting New Zealand business, none is  more  powerful   than  uncertainty generated by the “reviews” by  assorted  panels and   working groups set  up  by  the government.

PM Jacinda Ardern,  in her speech to  Auckland  business  leaders, spoke  of how NZ needs to transition from growth dominated by population increase and housing speculation, to build an economy genuinely productive, sustainable and inclusive.

First we want to grow and share more fairly New Zealand’s prosperity”.

So  if NZ is  no longer to  rely  on factors  which (according to   Labour’s analysis)  achieved some economic growth during the years of the National government, where will the “genuinely productive” new elements   spring from?  Continue reading “Here’s hoping the advice on prosperity gels with the advice on fairness”

Why we should be keeping an eye on the US yield curve

In an article at Newsroom Pro headed 8 things that mattered this week, business writer Bernard Hickey included interest rates and a flattening of the yield curve in the United States.

The yield curve is a line that plots interest rates over different maturity dates.

Longer-term interest rates normally are higher than short-term rates because lenders want greater compensation for locking their money up for longer periods, as Mark Lister explained in a recent newspaper article headed Is it time to panic about the sharemarket?

Lister, Head of Private Wealth Research at Craigs Investment Partners, said the relationship between short and long-term rates is important.

At the whiff of trouble on the horizon, investors will accept  lower returns in the future, longer-term rates will fall below short-term rates (which are driven primarily by central bank policy) and the yield curve will become downward sloping, or inverted. Continue reading “Why we should be keeping an eye on the US yield curve”