Agriculture

Get ready to buy Boral & ABC rather than watch a market swim in concrete shoes

Governments rarely have imagination during crises. Usually, it involves chucking uncosted cash around. How many projects have we seen run way over the promised budget? Submarines anyone? NBN?

Handing out $750 cheques to 6 million struggling Aussies in the hopes they’ll spend it is a bit of a wing and a prayer strategy. Maybe those struggling will just use it to pay down debts of previous consumption rather than ignite a new spending splurge.

At some stage, large-scale infrastructure spending will return to the headlines to stem the economic slowdown. Look at the state of national infra spending forecasts in the chart above.

Bridges to nowhere. Tunnels, highways, schools and hospitals. New projects to get people back to work. It happens pretty much every downturn. So why should we expect anything different?

A read of the latest infrastructure report states quite clearly there are 4 areas to address:

  1. Population growth has become a major point of contention in infrastructure debates. In our largest cities, ageing assets have been put under growing strain, with rising road congestion, crowding on public transport and growing demands on social infrastructure, such as health, education and green space.
  2. Energy affordability has also deteriorated over recent years. A steep rise in network costs has driven energy bills 35% higher over the past decade, and up by 56% per unit of electricity consumed in real terms.
  3. In telecommunications, the nbn rollout continues to face challenges. In the 4.8 million households in which it has activated, services have not met the expectations of many users.
  4. In the water sector, the past four years have seen mixed results. Many metropolitan utilities are increasing the sustainability and quality of their services through innovation, supporting the liveability of our cities. But many regional areas are suffering from growing water security fears as large parts of the country are in drought.  

Cement companies play straight at the heart of three of these four distinct areas. Roads, rail, hospitals, schools, dams and so on. In the energy space, whatever direction we take (solar, wind, coal, gas or nuke), cement, asphalt and aggregates will be required to achieve it.

Bellwether Boral (BLD) is perhaps best positioned to benefit as it makes railway ballast, asphalt, cement, concrete. Boral shares have yet to be kicked as hard as others. Boral hit a GFC low around the $1.64 mark. It stands at $3.00, 33% above that level.

BLDAX

50% of Boral’s Aussie revenue comes from NSW, the state with by far the healthiest balance sheet and the biggest infrastructure projects. 50% of revenue is Australian based with another 38% coming from the US which has huge infrastructure needs. 25% of group revenue comes from roads, highways, subdivisions and bridges. Good leverage.

Adelaide Brighton (ABC) has been bludgeoned in this market meltdown and $1.35 is the level it hit at the pits of the GFC in 2008. If it starts to sink below that level, it will start to look interesting again. If you look at the chart you can see it has slid from almost $7 in 2018 to its current price of $2.24.

Adelaide

A read through ABC’s last set of results points to the difficulties in the market for its cement and aggregates business. It has also embarked on a rationalisation program before all of this coronavirus hysteria.

We hold no positions in ABC or BLD as yet but will look to accumulate should the market continue its sell-off towards these 2008/9 lows.

The national government is out of options but to build out locally. They have already used the bushfires excuse to ditch the budget surplus plans so might as well push a bold infrastructure plan to save us all!  The best plan would be a high-speed rail project which addresses real long term needs of Australians.

Become a climate science expert for $25 a week over 100 hours!

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Who knew?  Amazing that one can be qualified in Climate Science merely by doing 100 hours inside 6 months and paying $25/week. The UN can source a whole new team of lead authors with qualifications like that. Maybe peer review the latest papers.

Yet why pay $25 a week when one can read The Guardian for free and fill one’s head with all the climate alarmism one’s heart desires? Quoting the newspaper on social media feeds will allow one to sound like an expert and bolster reputation and status on Twitter. What is more the compelled language within the newspaper makes one sound more authoritative.

Here are the course details:

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  1. Nature & Scope of Climatology
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Farming

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Animal Rebellion – why you should eat steak tonight

The loony left has really lost the plot. Now it’s the Animal Rebellion (AR) which is really just an activist group spin off of the Extinction Rebellion (XR) for vegans. At states,:

We believe in a world where all individuals of all species can flourish, free from exploitation and the worst threats of the climate emergency, where we work consciously to ensure no being is seen as a commodity. As such, we believe we need a political system rooted in collective decision-making made with and alongside our multispecies kin, where creativity and compassion are prioritized, and where the diversity of gifts among all species are recognized and celebrated.”

There we have it. Just like XR it is all about central control and no doubt self selected “collective decision making.” Without question the lunatics that AR and XR want to appoint to these councils don’t believe in democracy or anything other than exerting their will on others.

AR state openly it wishes to

In partnership with Extinction Rebellion, Animal Rebellion will mobilise 10,000 animal advocates for a two-week Rebellion in London, beginning October 7th...”

Then the truth really comes comes out:

Government must tell the truth by declaring a climate and ecological emergency, working with other institutions to communicate the urgency for change.” Animal Rebellion understands this demand will not be met unless telling the truth includes the government declaring that the industries of animal farming and fishing are leading contributors to climate breakdown and ecosystem collapse, and communicating the urgent need to transition to a sustainable and just plant-based food system, alongside other key issues.

Government must act now to halt biodiversity loss and reduce greenhouse gas emissions to net zero by 2025. Animal Rebellion understands this demand will not be met unless government action includes ending the industries of animal farming and fishing and leading a transition to a sustainable and just plant-based food system, alongside other important measures.

Government must create and be led by the decisions of a Citizens’ Assembly on climate and ecological justice.Animal Rebellion understands this demand will not be met unless the Citizens Assembly has the mandate to discuss and power to legislate for the transition to a sustainable and just plant-based food system alongside other key topics.

So never mind the tens of thousands of farmers, fishers and restaurants that will be put out of business if these fools ever got their way.

The sad thing is they truly believe in this rubbish as if it is normal.

CM implores all readers to have a steak dinner tonight and tell these ARseholes that their veganism is a choice for them.

These cultural Marxists need to learn about democracy. If they want these changes then an election is the best way to achieve it.

Vegan activists need caging more than goats

Well done to the lunatic vegan activists whose harassment led to the closure of The Gippy Goat Cafe in the Democratic People’s Republic of Victoria. 8 people have lost their jobs as a result of a legitimate business not being able to operate because of the weak application of laws from the judiciary based on toned down charges dispensed by law enforcement. It makes you wonder how theft, trespass and threats of violence don’t rate a mention with the police. At the very least these activists should be forced to pay for the redundancy costs and years of lost revenue caused by their actions. Why should the owners lose a business they invested in all because of the intolerance of the radical left? How much were the activists fined each? $1 for biosecurity breaches! What a farce.

This is what the owners had to say yesterday,

The Gippy Goat Café has decided to close, today will be our last day. We would like to thank our dedicated staff, our social media followers and loyal customers for your unfailing support but we do not have the heart to continue the café. This was not an easy decision to reach, however for the sake of our health and safety and that of our families and staff we feel that it is regrettably the best option.

Our staff and customers have been subjected to nearly 4 months of constant harassment, vile statements and threats from the abusive vegan activists. We have personally been subjected to an appalling stream of threats of extreme violence against ourselves, our family, our staff and even their families. Our staff have been subjected to daily threats and harassment by phone, and we cannot in good conscience ask them to continue working under such a condition. Our social media and review sites have been subjected to false information and artificially poor ratings. The courts have proven to be ineffectual, the enforcement agencies declined to prosecute to the full extent, so, to the thieves, trespassers and activists; you have won. Rejoice in your victory: eight good people are now without a job, families no longer can enjoy the good food and open space, and children can no longer interact with our animals. Society is the loser; the anonymous bullies, hypocrites, lawbreakers and self-professed paragons of moral and social justice have won. Please know that your ignorant indignation, lust for outrage and the false reality you inhabit through your social media streams will prevent you from effecting any positive societal change – only harm to real human beings – and you only have yourselves to thank.

Our farm will continue to operate as before, but is no longer open to the public. We are truly sorry for any disappointment this may cause.

John & Penny

We can be sure that if John & Penny trespassed onto one of the vegan’s properties, these activists would demand the stiffest penalties by dispensed the courts. So typical with the radical left, only their voices have legitimacy.

Juncker deserves a stiff drink after that

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President Trump strode into the Rose Garden with EC President Jean-Claude Juncker where, together, they announced the elimination of tariffs on industrialized goods.

No stranger to slapping people in the head, Juncker understood that when the leader of the strongest nation in the world slaps you back it is often worth paying attention to. There is much left to be desired about the unorthodox methods used to achieve such outcomes but if such deals are achieved that should be hailed as a success.

On top of that, Trump received commitments from Juncker to increase purchases of soybeans from American farms and to purchase large amounts of LNG, something likely to upset the puppet-meister.

So NATO members have promised to get their act together on honouting commitments to spending to display their new bonafides and the EU has seen that they are no longer dealing with a pushover.

Undoubtedly the mainstream media will overlook this and devote coverage to a tape recording instead of acknowledging that sometimes bluster works when the counterparts are truly pushovers in the end. Theresa May, are you listening?

Kagoshima Koalas having kool-aid killed off by kold klimate

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Kagoshima’s koalas are not amused. The much colder than average temperatures experienced in January this year has seen their beloved eucalyptus crops harvest 20-30% less volume than in 2016. Over 100 of the 500 eucalyptus trees have been damaged.

Perhaps Mr Turnbull can launch a mercy flight to rescue these Australian citizens stuck in Japan to help boost his flagging poll numbers at home and with PM Abe. Surely Australia will boost its standings in the world to help this minority which probably doesn’t require too much vetting!!

Taronga Zoo…are you aware? Best you handle it I think – a fantastic fund raising opportunity too – zoology is a truly global business. Don’t expect the Hirakawa Zoo in Kagoshima in the southern island of Kyushu to jump on the phones just yet to call for emergency supplies. This article was published in the Minami Nihon Shinbun in Kagoshima on Feb 5, 2017. #savekagoshimakoalas

Regulating cow farts

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You have to wonder at the genius of law makers.  From tomorrow cows in California will be subject to a flatulence tax in an aim to cut methane emissions 40% by 2030. All that farting is creating untold global warming. If only we’d taught man 5,000 years ago the dangers of animal husbandry. His reckless (although admitted lack of awareness) has added to warming the planet.

First question. Do some cows fart more than others? If I picked a random bunch of my friends I’m sure the statistical range (no pun intended) of their emissions would be insignificant. Surely cows too. We run a cow farm in Australia and when we do weigh ins, there is a difference of 100s of kg between animals. Surely the belching and farting would be skewed by that. Will farmers be asked to weigh cattle in order to assess potential methane calculations?

This is the same madness displayed by those that pay carbon offsets on planes. Those calculations are so inaccurate because so much would depend on passenger numbers, head/tail winds, take off queue length, holding patterns, aircraft type,airline maintenance etc. There is no standard formula yet those that pay it get to ‘feel good’ about saving the planet when their actions are hypocritical. The flight partially takes off because you look to fly on it. If you want to stop emissions then don’t fly and while you’re at it try to keep others from getting on board so you can put the airline out of business. Ah yes, you have a job and must put food on the table so your sense of self preservation is far higher than saving the planet. Perhaps they should weigh passengers instead so they can proportionately pay for carbon offset.

Supposedly experts don’t know how they’re going to trap methane. $50mn of the $900mn designated for climate action in California will be dedicated to flatulence reduction.

Here is a simple idea. If people are truly worried after a massive ad blitz on the dangers of cow methane they’ll stop buying dairy and beef and we’ll get a rapid correction in methane emissions as farmers go out of business. If it fails well you’ll work out as lawmakers that the public think you are a full of bullshit.

That really bad sinking feeling…

sinkin

Clarksons is the world authority on shipping. These are the latest prices in 2016 vs the 5 year average by type. New LNG, grain and oil carriers etc are holding up but the used market is being slaughtered. Ships are generally bought with a 25-yr service span at the very least. Global seaborne trade growth has shrunk from 6%+ growth in 2011 to less than 2% now.

Ship Prixces

Clarksons is the world authority on shipping. These are the latest prices in 2016 vs the 5 year average by type. New LNG, grain and oil carriers etc are holding up but the used market is being slaughtered. Ships are generally bought with a 25-yr service span at the very least. Global seaborne trade growth has shrunk from 6%+ growth in 2011 to less than 2% now.

Daily rates are naturally falling fast. 1yr Capesize ships used in the transport of raw materials are now 52% lower than the 5 year average and down 30%YoY vs 2015.

daily px shi;s

Now one could have wishful thinking and view this as bottoming out but even with all the liquidity being pumped into world markets, trade is suffering from all that deflation in the system.

If you are not short global equity and bond markets you ought to be. Hard commodities look like a good bet

Gold

You pretend to record sales & I’ll pretend to pay you

ARS

A good sign of how fiscally sound the micro economy is comes down to its ability to ‘collect’ receivables. Chinese construction machinery companies currently in a world of hurt, note that some of these companies now have accounts receivables equivalent to 1.5 years of current sales. As the task of achieving sales gets tougher companies sometimes extend generous repayment terms. That might be pushing collection from 60 days to 90 or 120 days but not 500. Cash is not moving. It is a case of I’ll pretend to pay you if you pretend to record the sales. Some companies record sales as soon as it lands on the dock. Sadly for Chinese construction machinery firms that does not look remotely positive and one wonders how much cash for this equipment shipped ever gets collected…sales for these Chinese machinery companies is down around 42% since the peak in 2011.

Interesting to note that the Western and Japanese construction machinery makers are closing the accounts receivable days but that may also be a reflection of restricting to what they deem are reliable end customers. Of course mining and construction capex has fallen off a cliff. If we look at Caterpillar, AGCO & Deere’s revenues since 2012, they have slid 40% so that shows how little trust is in the system. Komatsu’s sales are down 13% over the same period but their riskier customer profile shows that accts receivable/revenue have started to rise again. I guess it depends on how desperate corporates are to drive sales or protect profits…

So believe your lying eyes if you want to