FACTORS THAT AFFECT PROFITABILITY

PHYSICAL AND CLIMATIC FACTORS

Physical Factors

• Write down 4 examples of physical factors that can impact on Farm Profitability

Climatic Factors

• Write down 5 examples of climatic factors that can impact on farm profitability.

• Get out a COW and go to the sites mentioned in the next slide.

• Read each article and write down the major impacts for the farmer and for our economy.

DROUGHT

• http://www.stuff.co.nz/business/farming/sheep/8492698/Drought-likely-to-clip-wool-haul

• http://www.stuff.co.nz/waikato-times/business/8483170/Drought-looms-over-good-Fonterra-half-year-results

• http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10873587

• http://www.rotoruadailypost.co.nz/news/inside-story-farm-systems-have-to-adapt/1795575/

SOCIAL FACTORS

• What say does society have on primary production in NZ?

• http://www.nait.co.nz/• http://www.foodsafety.govt.nz/

TECHNOLOGICAL FACTORS

Technological changes

• What are they?• How can they be measured?• How has technology changed the Meat

Industry?• Can you draw up a timeline to show the

changes in the meat industry from pre refrigeration to now?

Interesting sites

• http://www.scott.co.nz/meat-processing/lamb/lamb-processing

• http://www.teara.govt.nz/mi/agricultural-processing-industries/page-8

• http://www.geap.co.nz/• http://www.techhistory.co.nz• http://

www.biotechlearn.org.nz/focus_stories/wool_innovations/developing_natural_easy_care_fabrics

ECONOMIC FACTORS

Economic Factors

• New Zealand is the furthermost country from the rest of the world ( i.e. the Northern Hemisphere)

• And is quite small• This means that as a country, our economy

depends on the needs and wants of other countries

• When the New Zealand dollar is valued highly against the US dollar then:– Imports are cheaper into the country. This is

because we can get more for our money.– Exporters don’t get as much money as the people

who buy their products can not buy as much, so they don’t.

A High New Zealand Dollar

A Low New Zealand Dollar

• When the New Zealand dollar is valued low against the US dollar then:– Imports are more expensive to get into the

country. This is because we get less for our money.– Exporters earn more as the people who buy their

products can buy more, so they do.

Question

What is the current exchange rate?• US dollars• Australian dollars• British pound• Japanese yen• Euro

Question

• Visit the sites in the next slide and read any relevant information.

• http://en.wikipedia.org/wiki/Exchange_rate• http://www.infometrics.co.nz/Forecasting/10

086/9011/What-is-an-exchange-rate

POLITICAL FACTORS

Political factors

• Tariffs• Quota• Treaties

• http://www.teara.govt.nz/en/1966/tariffs• http://en.wikipedia.org/wiki/Tariff• http://

www.infometrics.co.nz/Forecasting/10086/9011/What-is-an-exchange-rate

• http://www.investopedia.com/terms/t/tradesanction.asp

• http://www.businessdictionary.com/definition/export-quota.html

• http://www.nzmeatboard.org/• http://www.foodsafety.govt.nz/industry/secto

rs/dairy/exporting/QMS/

CULTURAL FACTORS

What cultural factors from our export markets impact on our primary production?

• Halal slaughter – for Muslim countries• Christmas and Easter lamb for the UK • Marbled beef – for Japan• Deer velvet – for China• What others are there?

• Read through the following news articles, websites etc to get an understanding of some of the cultural factors that affect the profitability of New Zealand Primary Production

Halal slaughter

• http://www.teara.govt.nz/en/photograph/19226/halal-slaughter

• http://www.beeflambnz.co.nz/index.pl?page=faq&m=458

• http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10816826

• http://www.stuff.co.nz/waikato-times/opinion/letters/6216191/Letter-Halal-slaughter-criticism

Lamb exports

• http://www.eblex.org.uk/markets/news-nz-lamb-exports-higher.aspx

• http://www.mla.com.au/Prices-and-markets/Market-news/Strong-start-for-NZ-lamb-export-season

• http://www.meattradenewsdaily.co.uk/news/211112/nz___lamb_season_off_to_a_good_start_.aspx

Marbled Beef

• http://en.wikipedia.org/wiki/Marbled_meat• http://

www.odt.co.nz/news/business/217333/nz-marbled-beef-tempt-world

• http://straightfurrow.farmonline.co.nz/news/nationalrural/agribusiness/general-news/24-million-investment-for-highvalue-marbled-beef/2617523.aspx

Deer velvet

• http://www.velvet.org.nz/• http://www.deervelvetnewzealand.co.nz/• http://

www.interest.co.nz/rural/resources/trends/velvet-trends