George Moss faces a financial conundrum…

Soil temperatures are running three degrees above average and grass growth is about three times normal. However, there has been little sun so even with the extra grass, cow condition is behind target. We are considering using palm kernel expeller to address cow condition, but feeding it will be problematic.

Ground conditions are very wet, not so much from the number of rain days, but because each downpour has been in excess of three inches with no sun or wind afterwards.

A new farm assistant started last week and is already making big inroads into maintenance.

The Fonterra milk price opened at $4.40/kg milk-solids, this is 50 cents ahead of my own and my banker’s anticipation.

Increased cashflow, assuming we produce our targeted production, will again be used to reduce debt further on the organic farm and probably as well on the home farm. We are considering whether to take advantage of the kiwi’s strength and purchase some shares in food companies on the New York exchange. We like food companies and infrastructure shares and are continuing to build a portfolio around these as cash allows. Conundrum: debt reduction or investment?

Bank interest rates look set to rise as the banks are now required to increase the amount held in “reserves”. Plus, most banks here have just had their ratings downgraded. The darkest cloud on the horizon for milk price is the high kiwi dollar against its US counterpart. It has clicked more than 80 cents, the highest it has been since the early 80s.

George Moss