Waikato Business News November/December 2016

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8 WAIKATO BUSINESS NEWS November/December 2016 Cautious message on dairy prices Despite the big lift in whole milk powder prices in early November, Waikato businesses and farmers have been cautioned about how prolonged that increase may prove to be. By RICHARD RENNIE BNZ senior economist Doug Steel told delegates at this year’s KPMG agri-business seminar at Karapiro there are still some factors around milk prices that should cast some caution over where future prices will fall. “The increase we have seen has been very dairy specific recently, and not across all commodities, including oil. Oil remains at less than $US50 a barrel and that feed through to those oil producing countries – their income remains weak,” he said. Historically there has been a relatively strong correlation between global milk prices and oil. “But now dairy prices, relative to oil are quite stretched.” He was also casting a wary eye on the level of cheap and plentiful grain that was washing around stockpiles in the Northern Hemisphere, helping keep the cost of milk production lower than usual there. Other reports have the domestic wheat stocks in the United States at three times what they were back in 2006, and the United States Department of Agriculture estimates the volume of wheat in storage at 110 million tonnes. A mild European winter also means stock piles there are at historically high levels, while Russia is also sitting on an inventory level up 22 percent from last year. “You have to look at how BNZ head economist Doug Steel. the levels of grain and the low oil prices feed to (less) ethanol production, and it is not that encouraging for future dairy price increases,” he said. He also pointed to the massive 400,000t stockpile in Europe of skim milk powder accounting for the significantly smaller increase at the GDT auction this week, of 7 percent against whole milk powder’s increase of 20 percent. But Europe had responded to lower dairy prices, with indications of month on month reductions in supply growth, down to August by 3.5 percent on the year before, with further contraction in EU supply likely. This had come after an eye watering surge in EU volumes that amounted to an increase in only two years equivalent to half of New Zealand’s annual production. Meantime the surge in United States production was largely being mopped up with increased domestic demand from increasing US population and US consumers making a switch back to saturated fats like butter and cheese. BNZ was anticipating a 4 percent decline in NZ production this season, less than Fonterra’s estimated 7 percent. Much has been made of the 14 percent decline in Waikato’s peak milk production, this season due to poor weather in October. There are also 1.0 million fewer cows and lower feed inputs this spring. Despite the wariness, BNZ lifted its forecast milk payout to $6/kg milk solids for this season and next on the belief the supply side contraction will be maintained, tempered by the grain and oil impacts. Waikato University leads MBA development nationwide The University of Waikato’s Management School has been selected to help ensure AUT, Auckland, Waikato, Victoria, Canterbury and Massey universities are offering high quality human resource (HR)management courses in their MBA programmes. MBA directors from six New Zealand universities have agreed to do a calibration exercise in December on various disciplines, focusing on outlines, assignments and outcomes of their HR programmes. The disciplines to be scrutinised are human resource management, operations management, management accounting, economics and strategy. All six universities had the opportunity to offer topics in which they felt they had significant expertise. Waikato Management School was nominated to assist with the calibration exercise as it has the leading MBA human resource management programme in New Zealand. As a result, human resource management expert Professor Mark Harcourt has been appointed to the new role of Founding Calibrator for the module. Professor Harcourt will calibrate the quality of marking and assignments across the universities. He says the new initiative will help universities reflect on how their specific MBA programmes are operating relative to others in New Zealand. “Once I’ve assessed the programme I’ll report back to the teaching staff at the universities to ensure their outlines, outcomes and assignments match the standard at other universities nationwide,” says Dr Harcourt. Dr Harcourt has studied workplace issues in some of New Zealand’s well-known organisations, including staff turnover at the Bank of New Zealand, stress at the Reserve Bank, commitment at the Police and Fire Service and occupational overuse syndrome at BRANZ. His research has covered various aspects of human resource management, including performance appraisal, health and safety, discrimination, and recruitment through social media. Recently, he has been focusing on employee representation and dismissal.
WAIKATO BUSINESS NEWS November/December 2016 9 Digital Trends for 2017 This year has been one of accelerated development in the technology landscape. Users are becoming increasingly competent and expect to use simple tools that anticipate their needs and declutter their thinking. This positions us all for an exciting 2017 as businesses are increasingly empowered to design what they want to achieve and worry less about the lower level details. DIGITAL INTELLIGENCE is increasingly commonplace in our technology. Here at Vo2 we are benefiting from digital intelligence by using accounting tools that suggest business strategies based off our Xero records, accelerating us from simple report generation to informed recommendations. We have begun to investigate the Internet of Things to understand how distributed devices can automate decision making in agricultural settings. As machine learning and artificial intelligence are taking an increased role in research and correlation identification, we suddenly find that we have more time for strategic thinking and energy for action, in a fast paced economy like the Waikato that’s extremely valuable. DIGITAL DELIVERY of this intelligence enables us to reach out to customers, staff and suppliers in simple ways. We have recently seen the rise of Virtual and Augmented Reality which is now a consumer reality and expect this to increase in 2017. The ways in which information can be shared and collaborated on is now so much wider than a Word document or spreadsheet. Here at Vo2 we have moved to Bamboo HR which allows team members and managers to manage their own leave and update their own profiles, greatly reducing admin time across Vo2 whilst increasing team engagement. The devices we use are now diverse and personal, with many employees expecting to use their own smart device rather than a company asset. Phones and tablets can now achieve the results that were previously dependant on a desktop device, freeing us to spend less time bound to the desk and more time collaborating with customers and team members. DIGITAL COLLABORATION is the obvious conclusion, with so many sources of intelligent information and ways to have users engage with them, the ability to create bespoke experiences out of standardised building blocks is increasingly possible. We recently experimented with integrating Google Analytics with Microsoft Power BI and customer information to create business targets based off website analytics. In order to create this ability, it took a week from initial idea to initial delivery, something that would have taken a lot longer only a couple of years ago. This rapid improvement increases our ability to experiment, innovate and learn. So with this increasing acceleration in our digital age, how should we respond? Here’s a few suggestions: 1) Learn to think systematically, what are the dynamics and drivers of your business and what decisions are needed to be made or actions initiated. The role of technology in 2017 will be to provide the info to support this in a simple, mobile manner. 2) Re-design your systems to ensure that they are serving you and not the other way round. Until the robots take over, we are still in control! 3) Think freely about the ideal place to engage with information, it may be on the road, at a cafe or alongside a customer, get the right devices for those situations. At Vo2, we partner with local businesses to solve problems digitally, through business consultancy, web and app development and managed IT services including cloud, as our team bring global technologies to regional New Zealand. Get to know us, learn with us and let’s have a great 2017! High performance digital thinking Working with organisations across the Waikato & Bay of Plenty to raise their digital performance www.vo2.nz
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Waikato Business News November/December 2016

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