WealthDesign

Recently I read an article quoting dairy farm sale prices have fallen by 12.1% over the past 12 months.  In my opinion, I think expectation of falling land values are over estimated.

I think we are going to see a recovery in dairy prices. The total New Zealand dairy supply is equal to the annual production variance in the US dairy production alone. We are also already seeing production fall in Europe as it is unaffordable for them to produce at these prices. I had a report that showed 25% of European dairy farmers would stop milking cows before the end of the year. We are also seeing New Zealand farmers kill any animal that they don’t see as viable (based on constitution – things like bad udders or lower than acceptable production). Dairy farmers are also taking advantage of high beef prices and reducing stocking numbers. All of this will flow into lower Fonterra volumes – you watch the news in about three months time as analysts work this out.

Interest rates along with how farmers think, will also hold up land prices. There are 70% of dairy farmers with strong balance sheets and money is cheap, so don’t expect all farms to fall in value. This assumption that land values will fall is based on the belief that farmers act in a logical, commercial way – they don’t. History shows that if the neighbouring farm comes up, farmers will do their very best to buy it. We know things are tight for our dairy farming friends and they have worked flat out over calving. You can be sure they often have a long term view of things, and they know this is just a season, and tough times come and go.

There are lots of positives out there but as usual, the press come out six months late and try and tell us how bad the world is.

Avoid the noise and look at the long term. Producing food is a vital industry and New Zealand is great at it.

If you are an investor, you need to be considering how you have exposure to this amazing part of the New Zealand economy.

John Barber

read on...

Just like New Zealand dairy farmers, European dairy farmers are also feeling the heat.  I received an update on the state of farming in the EU recently.  The world wide dairy down turn is hurting everyone.  Swedish and Danish farmers are also losing money and if prices stay low, estimates are that 25% of European dairy farmers will stop production. 

In New Zealand however, we run a low cost, grass feed system and can survive where our international competitors struggle.  It won’t take much of a swing to change the dairy landscape, especially when you consider the volumes produced outside of New Zealand.

John Barber

read on...

KiwiSaver really is worth belonging to, and here’s another reason why.  The new government initiative for first home buyers, the KiwiSaver HomeStart grant, came into effect from 1^st April 2015.  It replaces the KiwiSaver First Home subsidy.

Here’s how it works: If you’re buying an existing/older home, you may be eligible to receive up to $5,000 for individuals and up to $10,000 for couples to put towards the purchase.  If you’re either building or purchasing a new home the numbers are up to $10,000 for an individual or up to $20,000 for couples.

You do have to have been contributing for three years, be 18 years or older, and meet income and other eligibility criteria.

 Find out more.

read on...

We told you in May and now it’s our last reminder before the cut-off date. 

Each year, the government will contribute 50 cents for every dollar you save in your KiwiSaver, with the maximum contribution being $521. To get the full amount of $521 you need to have contributed $1,043 in the twelve months prior to the cut-off date of June 29th 2015.

Even if you haven’t contributed the minimum of $1,043 up to this point, you can add a lump sum prior to the cut-off date to take you over the threshold – this will give you the full contribution of $521.

It may not seem like much, but it’s what being a ‘kiwi’ who is saving is all about!  For example a  24 year old in KiwiSaver,  who is over the threshold of $1,043 yearly (and therefore receiving the full $521 contribution), could end up with as much as $50,000 more in their retirement fund, when they reach 65. 

Be the optimal ‘kiwi’ saver by giving us a call.  We’ll help you to save smart – easily and relatively painlessly

read on...

Each year, the government will contribute 50 cents for every dollar you save in your KiwiSaver, with the maximum contribution being $521. To get the full amount of $521 you need to have contributed $1,043 in the twelve months prior to the cut-off date of mid June.

Even if you haven’t contributed the minimum of $1,043 up to this point, you can add a lump sum prior to the cut-off date to take you over the threshold – this will give you the full contribution of $521.

It may not seem like much, but it’s what being a ‘kiwi’ who is saving is all about!  For example a  24 year old in KiwiSaver,  who is over the threshold of $1,043 yearly (and therefore receiving the full $521 contribution), could end up with as much as $50,000 more in their retirement fund, when they reach 65. 

Be the optimal ‘kiwi’ saver by giving us a call.  We’ll help you to save smart – easily and relatively painlessly.

read on...