NEWS
MACHINERY & PRODUCTS
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AGRIBUSINESS NZ agritech builds relationships PAGE 18
TO ALL FARMERS, FOR ALL FARMERS MARCH 24, 2020: ISSUE 697
www.ruralnews.co.nz
Ag to weather storm WE’VE GOT THIS!
NIGEL MALTHUS
CORONAVIRUS COULD make the 2008 Global Financial Crisis look like a walk in the park, claims economist Cameron Bagrie. However, he says there are still aspects of the New Zealand agriculture industry that look “really damn good,” he told a recent DairyNZ Farmers’ Forum. “Personally, I’m looking at getting exposure to the dairy sector. There might be a bit of an issue over what price I’m prepared to pay, but I like the long-term prognosis. “But it would be ignorant not acknowledge and take you through some of the stuff that I’m seeing at present, because it is disturbing.” Bagrie was a keynote speaker at the series of Farmers’ Forum events recently held throughout the country. He admitted to having to change his presentation each day, as the fastmoving crisis progressed and countries closed their borders. He told the Canterbury forum – held on March 12, before the Government imposed self-isolation on all overseas arrivals and banned large gatherings – which credit markets were starting to go off. “You can bet your bottom dollar those cruise ships around the globe have got debt on them. They need those ships to be operating. Airlines have got debt. Airports have got debt.” Transport was in “wholesale collapse.” Bagrie said discretionary spending would go out the window, but New Zealand needed the containers of
Many commentators say agricultural exports are going to be vital to our economy due to the impacts of the Covid-19 outbreak on the tourism and the forestry sectors. Last week, the first shipment of kiwifruit left Tauranga bound for Japan. The Baltic Pearl, carrying just over one million trays of SunGold Kiwifruit, will reach Japan’s Tokyo and Kobe later this month. In 2018, kiwifruit exports earned more than $2.1 billion in sales of New Zealand fruit – around half the earnings of all the country’s horticulture exports. - PHOTO: JAMIE TROUGHTON DSCRIBE MEDIA
goods coming in to send the full containers back out. “What we’ve got at the moment is an absolute supply chain mess. And even if Coronavirus goes away in the next two weeks – which, let’s be honest, it’s not going to – it’s going to take six months to get the shipping lines, the distribution capability, back into place.” The message for any business was around liquidity and cash flow. “Make sure you’ve got a bit of a buffer, go have those honest conversations with the banks.” Bagrie said that when things get
tough, the quality players rise to the top of the pile. “We tend to see a bit of a shake-up. And quite often those shake-ups can be pretty healthy, if they force a little bit of change within an industry.” While businesses could not control what’s going on globally they can manage the small things. “Microeconomics is those small things, the little things in front of your eyes that you can control. They determine success or otherwise.” Businesses expecting the pace of change to slow are “smoking pot,” said Bagrie.
Plant-based and alternative proteins are now economic reality and the only way to respond to being disrupted is to innovate at a faster pace than the disruptors can get distribution capability. “You need to learn to take more risk. Why? Because not taking risk is no longer the risk-free strategy.” Taking risk had to be evidencebased, he said. “But sitting there, standing still, putting your head in the sand, no matter whether you look at disruption or what’s going on around the globe in regard to Coronavirus, is not a strategy.”
AMIDST THE corona virus upheaval, one thing is certain – agriculture will see the NZ economy through. The world still needs to eat and trade channels remain open. The bedrock of country’s economy is still agriculture and our main export is of course food. Farms and orchards will carry on, and with our biggest market China turning a corner with its COVID-19 situation, demand for our produce will remain strong. The fundamentals of food supply and demand remain strong. To get us through, farmers will need our support. They’ll need good, trustworthy information. They’ll need the usual inputs from the service and supply parts of the industry. They’ll need some breathing space from political moves that might restrict their ability to operate efficiently. Rural News is a trusted source of information for farmers and we will help keep our farming and rural communities connected. With large scale rural events banned for the foreseeable future, the role we play in keeping the sector connected and informed is more vital than ever. In the parlance of these somewhat unsure times, you can be assured that Rural News will keep calm and carry on. – David Anderson – editor
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