KEY POINTS:
Watch out for the Reserve Bank's spies when you fork out for that new tractor at the country's premier rural showcase - Fieldays - which kicks off at Hamilton's Mystery Creek on Wednesday.
Alan Bollard fingered dairy farmers last week for fuelling his latest interest rate hike, laying part of the blame on the global dairy boom and its expected boon to dairy farmers' incomes.
Alan - aka the Invisible Hand - and co said a great unknown for interest rate stability was how much farmers would spend and how much they would save, given that this season's payout and that forecast for next season were set to add an extra $2 billion to the rural economy over the next two years.
But Fieldays organiser Lloyd Downing doesn't foresee the spectre of such scrutiny dampening sales, which last year hit around $157 million over four days, with a further $370 million in projected sales over the year. Indeed, he expects turnover this year will be "better with the prospect of higher dairy payouts".
While many farmers will be using their windfall to pay off some debt, Downing says making significant "catch-up" purchases is par for the course as part of standard equipment maintenance and plant replacement.
"Farmers are going to be buying machinery at Fieldays. That doesn't necessarily mean to say they are irresponsible doing that."
He also believes that this year's payout boost combined with the prospect of a $5.53 per kilogram of milk solids payout next season ought to leave a "little bit more money to spend on recreation".
"You can't expect a guy to get up at 5.30 in the morning and milk cows without spending a bit of money on recreation, when he has had his chequebook put away for the last three or four years.
"As far as I'm concerned [Bollard] can get lost ... we will be responsible with our spending like we always have been in the past."
Going the extra mile
At last a glimmer of hope amid the food miles gloom for New Zealand primary producers feeling a tad muddied by the British media's accusations they leave heavier carbon footprints than their northern counterparts.
In an article exploring the complexities of the food miles equation, the Sunday Telegraph has drawn attention to factors that might enable products sent from the Antipodes to indeed tread more lightly - even counting the distances that produce travels.
The newspaper cites Surrey University's Llorenc Mila i Canals saying that while British apples might be better for the environment in autumn and winter, in spring and summer it is "greener" to import them.
"By May, apples harvested in Britain have been kept in refrigerated storage for more than six months, which uses a lot of energy. At that point, it becomes better to import from New Zealand."
The Sunday Telegraph also gives ample space to a Lincoln University study that concluded the food miles concept was "misleading as it does not consider the total energy use, especially in the production of the product".
That study, published last year, suggested the production of key New Zealand agricultural exports - such as dairy products and apples - was more energy efficient and produced fewer emissions than the same primary products produced in Europe.
Whereas 2849kg of carbon dioxide was produced for every tonne of lamb raised in Britain, it said just 688kg of the gas was released with imported New Zealand lamb, "even after it has travelled the 11,000 miles to Britain".
The newspaper notes that British researchers and farmers have raised doubts over the accuracy of the New Zealand figures, but says they at least agree sheep farming in New Zealand is more efficient than in the UK.
As such, the newspaper heaps praise upon Nelson's Pigeon Hills sheep farm, which rears 10,000 sheep and 500 beef cattle for export to the UK.
Unlike in Britain, where farmers who sell to Tesco amass considerable "in-Britain" food miles to send their lambs to Tesco abattoirs, Pigeon Hills lambs are slaughtered and packaged at a nearby plant. "Most of the electricity used is also supplied from a hydroelectric plant, which has minimal carbon dioxide emissions."
Cheesed off
A spat between Fonterra rivals doesn't look like it will go silent into that good night.
Not long ago, Waikato-based dairy exporter Open Country Cheese's chief executive described a takeover bid by Affco offshoot Dairy Trust as "not exactly hostile", but the latest twists in the tale seem to show that the affair is something less than amicable.
An independent adviser's report released late Friday found "no compelling merit" to Dairy Trust's bid, prompting Open Country's independent directors to urge shareholders not to accept the offer.
Within minutes of that release Open Country chairman Duncan Milne was calling foul on a missive issued by Dairy Trust and Affco chairman Sam Lewis, which Milne fears could confuse Open Country's "non-habitual shareholders".
The letter, forwarded to the Business Herald, claims Dairy Trust already has 88 per cent of the shares required to take control, in contrast to the independent advisers' report, which says it has only 42.53 per cent of the 50.1 per cent needed to proceed.
"It's basically no different to what they had on day one," says Milne. "A very minor amount of shareholders have accepted."
Affco's independent assessment of its offer found that it was fair to its own shareholders not associated with the proposal, but noted there were no forward projections for Open Country available beyond May this year.
In response, Milne and his fellow independent directors sought to release the company's forecasts to all shareholders, which predicted revenue would grow to $145 million in 2007-08.
However Dairy Trust's lawyers have now taken issue with the formulation of that forecast, which the independent adviser - Ferrier Hodgson - used to value Open Country Cheese's shares significantly higher than Dairy Trust's $2.25.
