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Here's my Top 10 links from around the Internet at 10.30 am in association with NZ Mint.
As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.
See all previous Top 10s here.
My must watch today is #7 on how baby boomers will start selling their family homes from 2020 onwards. Who will buy them and how much will they pay? Maybe they can just borrow it all when interest rates hit 0%...
1. The great hunt for tax dollars - All around the world governments are shaking the tin, over-turning couches, hanging people upside down to empty their pockets and generally getting tough on anything that looks like tax avoidance or evasion.
The confirmation this week by the courts of the IRD's win over Alesco in the Optional Covertible Notes (OCN) issue was another example.
Now Spanish authorities are hunting down all the British ex-pats who spend most of their time on the Costa del Sol and in the Balearics.
We face this sort of constant tax-hunt for years to come and all around the globe.
Tax ahem structuring specialists should start feeling a little hunted.
Good.
Here's the Telegraph (HT Waymad) with the latest plain tax pain from Spain:
A spokesman for the Spanish tax authority said the globalisation of financial activity and increasing problems with fraud made it necessary “to establish a specific obligation of information on assets located abroad”.
He said residents who were unsure of how to submit their declaration, which has to be completed online, should visit their nearest tax office for further information. Mr Girvan said: “Different governments across Europe are looking at tax declaration. The pressure to raise revenue means that any legitimate methods to generate funds will be pursued.”
Thousands of British expats and second-home owners have been leaving Spain in recent years as its economy teeters.
2. 'Face it guys - you got it wrong. Suck it up and move on' - Tim Hunter has written a satisfying piece over at Stuff pushing back at all the accountants who were 'shocked and disturbed' by the appeal court's ruling in favour of the IRD in its Optional Covertible Note tax avoidance case against Australian company Alesco. They had warned overseas investors would leave...
Hunter starts off well and it just gets better.
Let's get one thing clear. Claims that the Alesco tax case may discourage overseas companies from doing business in New Zealand are, respectfully, bollocks.
The bleatings of accountants that the ruling increases the uncertainty over New Zealand's tax rules appear to me to be self-justifying fantasy from people have spent so long twisted in a maze of tax minimisation they can no longer see see straight.
3. China's housing crackdown - Here's Bill Bishop at New York Times' Dealbook with a look at the latest moves in China to try to slow down its housing market. They spooked the Chinese stock market for a bit.
Chinese shares fell the most in two years on Monday as the Shanghai stock exchange’s property index tumbled 9.25 percent. Late on Friday, China’s State Council had announced a new set of policies designed to cool down the housing market.
Economic data released in the last few days has called into question the strength of China’s recovery. It may be that Beijing is so confident in the health of the economy that it can afford to squeeze the real estate sector harder. Or it may be that the government is so concerned about the social implications of a resurgent property market and the effect that real estate may have on the effort to rebalance the economy toward consumption from investment, that it is willing to take that risk.
The new rules include a 20 percent tax on gains from a sale, higher down payments and mortgage rates, and requirements that cities set annual price easing targets. The announcement was met with both skepticism and criticism.
4. 'I ain't afraid of no ghost cities' - The WSJ's China Real Time Report looks at those who don't think China's ghost cities are a problem.
In the aftermath of a construction frenzy that lifted China out of the Great Recession, Western hedge fund managers set off on trips to places like Ordos in Inner Mongolia to view the eerie phenomenon – and spooked themselves into believing that a massive oversupply of real estate meant a Chinese economic collapse was inevitable.
What happened? Well, housing prices and sales volumes have been steadily rebounding, to the point where the government is now contemplating new cooling measures. So much for the epic oversupply that bears predicted would wipe out growth.
“Hurray for Ghost Cities,” writes the economist and veteran China-watcher Jonathan Anderson in a recent note. The former UBS analyst, now with the Emerging Advisors Group, isn’t a cheerleader for senseless real estate projects. His point is that by investing in “ghost cities” to underpin growth, China saved itself from even more unwise overinvestment in areas that could have done lasting damage to the economy, such as manufacturing.
5. The persistence of America's gold as money movement - A bunch of American states have proposed creating their own gold-backed currencies lately. It's all part of the astonished reaction to the mass money printing that the US Federal Reserve has done over the last five years. None of these new currencies have gone anywhere. But the proposals keep coming.
Here's the always excellent Gillian Tett at the FT talking about this political phenomenon in the United States. She points to a bill to create a gold-backed currency actually passed through the lower house of the state legislature in Virginia, but was blocked in the senate.
The more that the country plunges into uncharted policy territory with quantitative easing, the more that the sense of confusion spreads from the banks to the central banks as well. Little wonder, then, that sales of gold have been soaring; or, for that matter, that polls suggest a notably high level of popular support for the ideas of men such as Ron Paul who want to abolish the Fed. In a world where policy makers have failed to explain how finance works – and people saw the system almost collapse a mere five years ago – there is a search for answers.
So guffaw at the Virginia bill if you like. And if you want an additional chuckle, you might also note that a dozen other state assemblies, in places such as North and South Carolina, have discussed similar ideas; indeed, Utah has a gold and silver depository which is trying to back debit cards with gold. But whether you love or hate this idea, last week’s events in Richmond will certainly not end this debate about trust; not in a world where the economic pressures keep mounting – and policy makers in Washington are struggling to explain to a mystified and angry public how their economic policies are working. Or not.
6. NZ$4 bln to save 0.25 of a life? - That's the equation consultant Ian Harrison has come up with to argue that proposed earthquake strengthening rules from the government far outweighed any benefits.
Here's Catherine Harris at Stuff with the article:
Economic consultant Ian Harrison said he had analysed proposals put forward by the Ministry of Business, Innovation and Employment on building standards, and it showed the cost of the tougher regime would be 50 times the benefits. In Auckland the cost was 1762 times the benefit.
Harrison said his research was based on the ministry's own expert analysis. "The proposals will save only 0.25 lives a year at a cost of over $4 billion," he said.
"If this money was put into road safety it could possibly save over 20 lives a year." Harrison also claimed many councils were applying higher standards for assessing earthquake-prone buildings than was currently in the law, opening their designations up to a legal challenge. Using those standards, people had been led to believe by MBIE that there were 15,000 to 25,000 buildings in New Zealand which would collapse in a moderate earthquake. In fact "very few buildings" would collapse in such an earthquake, he said.
7. 'The great seniors selloff' - Emily Badger writes at Quartz that the next housing bust in America will come from 2020 as baby boomers start downsizing for their retirements and sell their family homes to move into something smaller.
Same issue here, I suspect. Although there will be a push by property owners (and the banks) to ensure the youngsters buying the houses pay top dollar by borrowing up to their gills with super low interest rates.
No worries then...
In the coming years, baby boomers will be moving on (inching further through the python, if you will). “They will want to sell their homes, and they’re hoping there are people behind them to buy their homes,” says Nelson, director of the Metropolitan Research Center at the University of Utah. He expects that in growing metros like Atlanta and Dallas, those buyers will be waiting. But elsewhere, in shrinking and stagnant cities across the country, the story will be quite different. Nelson calls what’s coming the “great senior sell-off.” It’ll start sometime later this decade (Nelson is defining baby boomers as those people born between 1946 and 1964). And he predicts that it could cause our next real housing crisis.
“Ok, if there’s 1.5 to 2 million homes coming on the market every year at the end of this decade from senior households selling off,” Nelson asks, “who’s behind them to buy? My guess is not enough.”
8. 'We don't have a generational wealth problem - We have a class wealth problem' - Dean Baker at CEPR argues the ageing developed economies can afford their gold-plated pension and health care schemes because productivity growth will bail us all out.
He argues the very wealthy are trying to distract everyone by turning a bog standard income distribution problem into a generational wealth problem. I have sympathy with this view.
My dispute with him is is assumption of continued productivity growth rates at post-War levels. It's not going to happen given our lack of investment recently in genuinely new and transformative technology, the ageing population and peak oil/minerals/water/air.
But here's Baker:
It is also important to remember that after 2038 the demographics barely change but productivity keeps growing. This means that our children and grandchildren will continue to grow richer through time without any negative impact from an increasing population of retirees.
In reality there are some complications in converting productivity growth to wage growth, so the rise in wages would be somewhat less than these calculations imply; but the basic story is not debatable. All plausible projections of productivity growth show that average wage growth will swamp any negative impact on workers’ living standards from a growing burden of retirees.
At this point everyone should be screaming that workers have not been seeing the gains of productivity growth in the last three decades. This is exactly right. The wages of most workers have barely risen since 1980 because the vast majority of the gains from growth have gone to those at the top of the income distribution.
This is worth repeating a few hundred million times. Most workers have seen little benefit from growth because the gains have gone to those at the top.
This is why the yapping about the burden of Social Security and Medicare is so pernicious. If workers share in the gains of economic growth then there is no way that the cost of these programs will impose a serious burden on their living standards. In fact, workers’ living standards rose rapidly in the past in spite of large increases in the payroll taxes used to support these programs.
It will matter far more to our children and grandchildren whether they share in the gains of economic growth than if they have to pay higher tax rates for Social Security and Medicare. The rich, with the full complicity of the media, are doing their best to keep national policy focused on the cost of Social Security and Medicare. But the arithmetic says that the upward redistribution to the wealthy is the far more important issue for future living standards.
9. Does not compute - The Dow hit a record high this week, despite persistently and painfully high unemployment and slow GDP growth.
How is this possible? One reason for fairly solid profit growth despite the weak economy is a three decade long shift in the share of income from wages to capital. Another reason is the US Federal Reserve has printed the equivalent of 20% plus of US GDP and handed it over to banks at 0% to invest in stocks yielding more than 0%.
It's all sustainable as long as the Fed (and other central banks) keep printing money forever and somehow all these companies can find customers with some money that isn't borrowed to buy all the stuff they're selling.
This chart tells the story, courtesty of The Atlantic.
10. Totally Jon Stewart on Wall St's amazing bounce back. He uses some swear words that I can't put in because I want this to get through some very serious spam filters in some very large corporates. ;)
Stewart makes some good points about inflation adjustment and the structure of the Dow index. Seriously. He is also excellent on the US constitution and the Supreme Court in this one. Excellent in a profane and incisive way.
39 Comments
Not in respect of my household - my offspring will inherit the rewards, not of house ownership, but those derived from trading the snot out of borrowing short and lending long to debt demanding governments, condoned by Greenspan and Bernanke, no less.
In terms of wider context though, I'm not so sure. At best you'd be a few % of the population. If much of the population is burdened with tax and other debt then that's going to quieten the market and NZ economy that they and you operate in severely. Now that may mean as somone whos cash rich such as your family means you are actually extremely well off The Q then is going to be will Govn's or its voters allow a small % to live like "kings" while the majority do not.
Personally I dont blame Bernankie, he's been handed a bum hand after Greenspan severly screwed things up. Greenspan on the other hand I sure do blame significantly.
regards
Personally I dont blame Bernankie, he's been handed a bum hand after Greenspan severly screwed things up. Greenspan on the other hand I sure do blame significantly.
They are not chalk and cheese, their actions are indentical - both steepened the yield curve and encouraged lower term yields through central bank purchases of debt. A guaranteed 'fuel on the fire' strategy for elevated house prices - until the cost of a parabolic increase in outstanding debt finance makes repayment impossible @ any interest rate.
No there is a significant difference, like Gordon Browne with his over-spending and "recessions will never happen on my watch" Greenspan had a choice in his (in-)actions.
By the time Bernanke came to the position his course had been fixed by Greenspan and the politics of the day (voodoo right wing). So for me, he's really desperately trying not to let us (US) slide into another Great Depression, despite Congress.
Otherwise yes the actions are the same which is interesting...but not the point.
regards
#3 Crackdown on Chinese residential property speculation . Why dont they just crash here .... in New Zealand
We have a benign and stable investment environment , no barriers to entering our property market , no Capital gains tax , no deposit requirements , no land transfer duty or taxes , a well oiled secondary market , positive yield returns , plenty of tenants (Kiwis with no savings who have to rent), and best of all :
No authorities poking around to see where the money came from .
Bernard,
If you are so sure of your opinion why dont you try backing it up with some facts?
How about looking into home ownership in New Zealand and breaking it down into age groups. Too much to ask or too afraid to check?
You are doing a great job but you need to stop constantly looking to blame people.
The bank offers you a 0% loan for a house and its your fault for accepting it seems to be your angle.
Fair question and good idea on the age-based profile of home ownership.
I've looked through Stats NZ and for research from RBNZ/Treasury and haven't found any over the years.
If you know of any I'd welcome it.
What's needed is a decent longitudinal study of finance. I understand the Dunedin longitudinal study may actually have a go at this. Would be good.
Also, we haven't had a census for 7 years, so much of the current info is way out of date.
cheers
Bernard
Bernard ..re#7....by 2020 many boomers will be selling their homes..?, having them sold for them to facilitate care in what will be a Mertopolis of villiages for the venerable ,where you get an xtra kipper for breakfast and the widows cleaned weekly to remove the dribble you left while watching the world outside go by.)
Many Boomers , Bernard will also set about transfering ownership of property to their offspring in preference to seeing it gobbled up in care.
So yes there will be a wealth transfer 2020 and beyond , but for the sake of accuracy in your observations you need to factor in bequeathered estate while the bequeather is still living, this will occur on an expotential scale.....you .....can......bank ..... on ...it.
Bernard... their kids having lived through these times may well havbe the foresight to move with more urgency in relieving the burden.......................or not as the case may be.
It's a funny old world you know Big B.....the only thing you truly own is the skin that holds your innards , the rest well, it's just on loan for the duration...and on it goes.
time is a great leveler...King or Pauper there's just no class in death.
..... careful there Count , it isn't skin , but some industrial strength staples that a surgeon got from Bunnings which are holding Bernard's gizzards in ....
You how to prove that Bernard has got guts ? ....... just undo the duct tape , and his innards splooch out onto the floor !
i heard it was in fact a bolt through the navel in Bernard's case , hence the trip to Tibet, to seek out the most learned on high.
Having arrived at the very pinnacle to find a wisened Monk living in a very small cave, Bernard haunched in there, downed his trousers and asked the Monk if he could explain why this bolt had been placed thus upon him from birth.
To which the all seeing Monk said nothing , but reached forward , turned the bolt one rotation anticlockcwise and withdrew the bolt, .......................................................................................at which point Bernard's arse fell off.
Mysteries are for dreamers, pragmatism is for those that do.
Bernard #7 is just NONSENSE!
The final sentence tells it all "My guess..."!!!
Since it's recently been census time look at the 2006 census results.
Assuming the same mortality rates:
8.6% of those aged 65-69 will leave us within 5 years.
14.4% of those 70-74 leave within 5 yrs
23.4% of those 75-79 leave within 5 yrs
and 48.4% of those over 80 will leave within 5 years.
Now that means of those aged 70 and over at the time:
Between 2011 and 2016: 112,700 will depart.
Between 2016 and 2021: 123,000 will give a final farewell.
And between 2021 and 2026: 142,000 will kick the bucket.
NOW assume no immigration (or emmigration):
In each of those 5 year periods 300,000 people will become first home buyers of renters!!
That's potentially 20-25,000 new households (depending on the number of 1 adult households) every year irrespective of baby boomers dropping off.
You are trying to perpetuate a myth that is neither imminent nor real.
This is just like the 30% fall bollocks, just with a longer timeframe so it'll take longer to prove you wrong!!!
I totally agree Chris... I was surprised with the bold face guess/assumption..naturally Steven liked it!! Substance please!
ps Anyone who thinks the IRD winiing like 14 cases in the courts in a row is not an issue for investment in this country...is mistaken. Although i do wonder what some of the so called tax experts were thinking....
Oh absolute rubbish you spout, its demographics, now you could bet against it or bet with it, your call. Im going with it,
http://www.hsdent.com/free_resources-2/
or you could supply some concrete arguments as why its wrong becides us trusting what you say your voodoo/libertarian private economics "data" is telling you.
regards
More bluff and bluster... Still bitter and twisted after looking foolish this morning. Why don't you start with Chris position, refute that. You name calling and claims about people is sad. If you have mental health issues I can get you referred as chair of a couple of the leading ones :-)
Chris_J/Speckles
Nice to hear from you. Settle down.
I have been looking at this for a while. I spoke to Motu economist Andrew Coleman about this in 2010, who has researched this issue of the home ownership rates by age and what might happen.
http://www.interest.co.nz/news/49432/why-young-will-increasingly-have-r…
He actually think the boomers will hold on to their houses in the suburbs and buy lots of rentals to rent to the young ones... I can see that too. And they'll last for a long time. Which means you wouldn't see the market slump until the 2040s.
cheers
Bernard
BH, so why not reflect this broader opinion orginally in your comments? I have not studied the issue in detail however if I look at our client base - the relative wealth generally is held by the younger BBs rather than the older ones in NZ. In addition, the relative cost of a LTO at a resthome compare to homes often held by the elderly is considerable. Many older people currently could not afford to buy/sell down and rebuy into the current market.... especially if they own an older home. As the lower/middle/new prices have been compressed. In addition, on a personal note... I have yet to meet many who want to purchase a LTO or have the energy to move often later in life. Most de clutter at best.
Yes it may well happen... yet within 7 years well that is pushing it....2040 possibly, trends can be easy to state although timing is everything.
Which meansbeing quite highly leveraged in retirement? hrmmm, what happens to that plan if say we see 10~20% price drops? neg equity? banks nervious and call in the loans?
Holding out to the 2040s is of course possible, what about the BBs who are in the public sector right now who National is making redundant? go to woder just how solid Motu's might is. I suppose we should look to what previous generations have done, hence Harry Dent is interesting.
regards
I think the sell-down has already started Bernard. This baby boomer (born 1947) has just sold her house on a large section and bought a smaller one. However we didn't sell to a younger generation but to another baby boomer (slightly younger) who wanted more land!
During this week alone I have heard of at least three people of similar age to me who are downsizing. Would be interested to know what year the largest number of baby boomers were born. Was it 1947? I know when we started secondary school there were three 3rd form classes each containing 75 to 80 pupils in each one - and only one teacher to manage each individual class. God imagine that happening today! If the largest number born was 1947 expect the rush to start much sooner than 2020 - we could all be dead by then.
News from middle kingdom & lion city
On March 4, Suntech named Susan Wang to replace Shi as chairwoman of the board. Shi remains as a director. Wang has been a director since 2009.
“The board of directors is confident that the appointment of Susan Wang as chairwoman to replace Dr. Zhengrong Shi is valid and effective under the law of the Cayman Islands, the country of the company's incorporation,” Suntech said in a statement today. “Shi remains a director on the board.”
In December, Suntech cut its forecasts for solar shipments. In July, it said it was investigating fraud involving a 554.2 million euro ($US680 million) financing guarantee it made involving German bonds that may have never existed.
Read more: http://www.smh.com.au/business/carbon-economy/chinas-solar-king-shi-shocked-at-dismissal-20130307-2fmex.html#ixzz2MoKF431K
so being one of many/more
http://www.bloomberg.com/news/2012-11-27/block-gives-up-as-short-sellin…
Block, known for his allegations that Chinese companies traded in North America engaged in accounting fraud, said in an interview yesterday that he’s lost interest in betting against the stocks because the government helps protect them. Short interest in the 83 biggest Chinese firms listed in New York has dropped to an average 2.61 percent of the total outstanding, from 5.22 percent a year ago, data compiled by Bloomberg and the U.K. researcher Markit show.
China began limiting access to corporate filings at the State Administration for Industry and Commerce this year after short sellers used them to highlight accounting discrepancies in companies listed abroad, lawyers including Nathan Bush, a Beijing-based partner at the law firm O’Melveny & Myers LLP, said in interviews in June.
“China has gotten harder in the sense that the government has really taken the side of the fraud,” Block said in an interview on with Stephanie Ruhle and Tom Keene on Bloomberg Television’s “Market Makers.” “The government is working with a number of these companies to try to conceal records that are public. When you are up against that sort of strength of the ability to revise history, it becomes difficult. That is one of the reasons we’re not that interested in China anymore.”
and for our interest:
In a sign that he’s moving on from targeting the Chinese companies, Block is attacking Singapore-listed Olam International Ltd. (OLAM), saying in a 133-page report published yesterday that the commodities trader runs a high risk of failure. Olam, the world’s second-largest rice trader, is the first non-Chinese company Block has said he is betting against.
Olam is suing Muddy Waters and Block for defamation as the stock has slumped more than 10 percent in Singapore since the short seller’s first allegations against the company on Nov. 19.
Block’s allegations over the past two years have increased investor scrutiny of Chinese companies trading on North American stock exchanges, especially so-called reverse mergers, a process that involves buying a publicly traded shell company. The Securities and Exchange Commission has said reverse mergers may be prone to “fraud and other abuses.”
and this is worth a look:
http://www.theedgemalaysia.com/personal-finance/227071-olam-has-six-to-…
Olam is the second largest shareholder in Open Country Dairy, New Zealand, through which we process more than 800 million litres of milk annually,
Olam International Acquires New Zealand Dairy Farming Systems Uruguay (NZFSU)
Weekend reading:
Grant Samuel, “NZS has determined that a New Zealand based system involving predominantly grass feeding is not viable for a Uruguayan environment”
http://www.muddywatersresearch.com/wp-content/uploads/2012/11/MW_OLAM_1…
Olam’s incremental acquisition of NZFSU was an easily avoidable blunder. One might
conclude that Olam’s rationale for buying this flawed company was to generate non cash
accounting profits. Olam has hemorrhaged significant cash on this flawed investment.
In 2009, Olam bought 14% of New Zealand Farming Systems Uruguay (“NZFSU”)110, a
company founded on the idea of applying New Zealand pastoral farming expertise in
Uruguay, which has high quality, low cost and under-utilized farmland.
Over the last three years, Olam has increased its shareholding in a quest to take the
company private. Unfortunately for Olam investors, Olam succeeded.111 NZFSU is a
project that should never have gone beyond the planning phase. The company was
plagued with red flags, such as known accounting irregularity, poor planning, unrestrained spending, negative free cash flow, high debt, and a web of related parties.
These facts were established prior to, and during, Olam’s acquisition process. It could be
said that Olam either did not perform adequate due diligence, or was not concerned by
the myriad of problems. Olam has consequently squandered substantial capital on this
acquisition, including by providing a credit line of up to US$110 million in loans to keep
the company solvent.
...................
Grant Samuel, an investment and advisory group based in Australia, raised a fundamental
problem with the NZFSU business model in its independent appraisal reporting, “NZS
has determined that a New Zealand based system involving predominantly grass
feeding is not viable for a Uruguayan environment”.117
Olam’s involvement with NZFSU has not improved the quality of its management (other
than no more embarrassing fudging disclosures). NZFSU breached a covenant to
bondholders by not providing a copy of its business plan to all bondholders by February
18, 2011.118 Fortunately for NZFSU, this breach was waived by the bondholders on
March 29, 2011.119 NZFSU is cash flow negative. It lost US$41.9 million over the last
two years, and owes Olam at least US$95 million on a US$110 million short-term loan
due soon. It must raise capital to “meet the remainder of the capital works program and
to replenish the current funding lines used to meet operating cash requirements.”120
Discount not.....
http://www.stuff.co.nz/business/farming/8400314/Hart-dairy-farms-sold-a…
.......... indicates the farms were sold for under $19,000 per hectare, less than half the average price paid (39,976 per hectare) for dairy farms in the Waikato last year. .....
After 3 years on the market they probably sold for what they are worth, less maybe as they had to go to the ends of the earth to find a buyer....
Looks like $16 to $20 a kgMS depending. and done pre TAF so not clear re share price but well away from first asking price of $33 $35 depending one was told.
Mind you no bank lender here to keep things in line/maintain the bar...
Not a distressed sale or result of dud marriage or related party sale. Not as if they couldn't have been sold as separate units, noe SM moved on...
This looks good for the basket of sales....
Next time we see the land agent we'll tell him its not worth half as much, and we'll probably be right....
And it can't be a discount, otherwise no OIO? No? Cause we couldn't have O/S folk buying it for half the price....
Q: which way is up?
Henry_Tull
There are predators sniffing around looking for somewhere to park their incredible wealth .. it has a sense of "money at play" .. their friends are buyng dairy farms and they dont want to miss out .. the real subtext is the comment “Money is not a problem”, "price is no obstacle", it's "size that matters" ...
China’s richest man, Zong Qing Hou, wants to buy a dairy farm and build a milk processing plant. (just like that)
Mr Zong spent a week travelling around last year, but is understood to have stopped short of making an investment partly because he could not find farms of sufficient size. Mr Zong declined to say how much he might invest. “Money is not a problem,” he said. “It depends on how much they will allow me to invest.
http://www.afr.com/p/national/chinese_tycoon_feels_unwelcome_in_Wq1vwoLuhPP4bWKPqDG68H
We were reading some more. The poor rainfall stsa/history not a good look on the NZFSU machine (if an investor fund can dig this up in a couple of weeks).
Our research shows it doesn’t rain as much, or as consistently, in Uruguay as it does in
New Zealand, making it difficult for grass fed diary farms to have a consistent, adequate
supply of cattle feed, and diminishing the raison d'etre of this farm. The lack of quality
feed results in lower milk production, herd quality, and healthy progeny. The acquired
land requires irrigation systems, and the herd must be fed concentrated feeds, which
increase the production cost by 41%.116
How is Chile&Mauka
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