Goodman Fielder to improve bottom line in 2009

Discuss Goodman Fielder at Share Investor Forum


The commodities bubble has burst in my opinion, something that I commented on a couple of months ago.

While it might be bad for those investors who recently bought into that booming sector-I know a couple of people currently being advised by brokers to buy BHP Billiton [BHP. AX] and Rio Tinto [RIO.AX]-there are benefits for investors in other sectors.

Staple consumer stocks like Kraft[KFT.NYSE] , Mars-Wrigley, Coca Cola [KO.NYSE] and Australasia's listed Goodman Fielder [GFF.NZX] food group will reap massive rewards in bottom line profit.

Dropping corn prices will benefit Coca Cola, Mars-Wrigley and many other consumer stocks who use the corn syrup made from corn as a base for many of their sweet to taste products.

Input costs of raw materials ranging from raw food costs, to packaging and transport have all dropped by an average of 15% on US commodities exchanges and this is clearly good for business.

Goodman Fielder for example has been suffering badly from high commodity prices over the last year, wheat especially having a big impact on bread prices. It even had to go to the extent of writing down the value of its New Zealand Dairy assets because of the deteriorating economy.

The price of wheat has declined 40 percent from a record $13.495 a bushel in February to $9.0925 a bushel as of yesterday.



The lower costs of commodities like wheat to food manufacturers mean more black ink to the bottom line, as companies are reluctant to pass on production savings to consumers.


In the 2 months to August 6 the US wheat production was up almost 20% from this time last year.

Corn crops previously thought to be savaged by floods in the US Midwest are now on track to deliver near record cropping.

You may have noticed Goodman Fielder branded breads in supermarkets haven't had their prices cut since the raw wheat price drops and none of their other wheat based or corn based products have taken a price hit.

All this means Goodman are very well placed to increase profit substantially in the 2009 year as their large range of branded and packaged consumer food products will have their input costs into production substantially cut.

As food manufacturers passed on costs when commodities were rising it is unlikely that they will cut as commodity prices slump.

Bad for consumers, but very good for investors in consumer stocks.

Disclosure - I own GFF Shares

Goodman Fielder @ Share Investor

Goodman Fielder turning on the DRIP
Commodities bubble set to burst
Why did you buy that stock? Goodman Fielder
Goodman Fielder hit by high commodity prices
Goodman Fielder a Hedge against an economic slump
Goodman Fielder pie gets bigger

Related Links

Kraft good in a recession -Everything Warren Buffett
Goodman Fielder - Corporate Website
Cbot.com - Commodity prices

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c Share Investor 2008

Darkness at the centre of Labour's energy plans

National’s energy policy, to make it easier to build power stations and use our under exploited coal and gas resources, is a good antidote to Labour’s Russian roulette attitude to power supply over the last 9 dark years.

Over NZ $3 B was lost from the economy over this winter due to business having to cut back production not to mention the long term losses from overseas companies not investing here because of uncertain power supply.

We need to use thermal and coal supplies to give us cheaper energy to stimulate our minuscule growth rate, instead of shipping it overseas for others to warm their hands by.

The several power crises that NZ has faced over the last 9 years is a direct result of Labour and the Greens stopping the building of power stations.

Wind will never be a reliable alternative.

If you are worried about Green house gases-I’m not because the idea of Carbon being a problem isn’t scientifically possible-worry about the record levels of C02 pumped out over the last 4 months as the Whirinaki diesel station is running at full capacity and so is the coal fired Huntly.

Get your head out of the tramping mountains Ms Helen.

It would be nice to see ANY election policy released from Labour, kiwis haven’t seen any yet.

Whats on your secret agenda for New Zealand Labour?

Triples?

c Political Animal 2008

Labour Party Election Policy: where is it?

Zip, zero, nada, zilch, nought, nothing.

Sorry about the padding but without it this post would be empty.

Labour have been critiquing National for not having any policy releases for the coming election, even though they have released at least four policies in the last week, but have released none themselves.

We all know that most of their policies have been passed post election without any indication beforehand.

The scary part is what are they being so secret about?

The removal of the Privvy Council, introduction of the Electoral Finance Act, introduction of Carbon taxes and removal of section 59, or the Anti smacking bill and many other unpopular, destructive and anti democratic laws have been passed without any heads up or campaigning before an election.

Where is the policy Helen?!

c Political Animal 2008

JOHN BOSCOWEN: Freedom of Speech Trust Newsletter-Edition 4

Freedom of Speech Trust Newsletter No. 4
By John Boscawen

15 August 2008

Dear Darren,

Campaign goes to the Sunday newspapers

We took the campaign to repeal the Electoral Finance Act to last weekend’s newspapers with full page ads in each of the Sunday Star Times and the Herald on Sunday.

The ads focused on the following issues:

1. Parliament ignored both the Human Rights Commission and the New Zealand Law Society in passing the Act.

2. New Zealanders have been subject to a form of election year censorship never seen before in this country. The ad itself had been carefully drafted to ensure that it could not be seen as an “election advertisement”. There was much that we dare not say and that was censorship pure and simple.

3. The Act has had a profound impact on how political parties campaign and many are afraid in case they overspend. Labour, NZ First, the Greens and the Progressives have all fallen foul of it. (With the Progressives recently having had an ad referred to the Police for possible prosecution).

4. The law regarding third parties is uncertain and complex and limits those who wish to be involved in the election campaign to spending less than half that recommended by the Human Rights Commission.

5. The promise of greater transparency that cannot be circumvented is simply not true. For example if the Vela family had ten companies each could give up to $10,000 of its own money to New Zealand First and this $100,000 would not need to be disclosed (this is not a hypothetical example as the New Zealand Companies Office records suggests that there are eight or more Vela named companies with a further five related to the Vela owned New Zealand Bloodstock group).

6. At the same time that Parliament severely limited what you and I can spend and do in election year it passed another law giving political parties more taxpayer’s dollars for their own election campaigns.

A copy of last Sunday’s ad is attached to this email. Please forward it to your friends and colleagues or print it off and post it on a noticeboard.


What needs to happen now?

The Act needs to be repealed before this years election otherwise the election risks becoming a farce, marred in legal challenges both before and after the election. As a very minimum the third party spending limit should be increased to $300,000 as recommended by the Human Rights Commission.

Dominion Post Editorial – Monday 11 August “System to suit an African despot”

Under this heading The Dominion Post has again called for the repeal of the Electoral Finance Act.

“The act must go. It has had only humour value since January 1 …..The act’s critics foresaw the current muddle. The law is undemocratic and the way it was imposed an exercise in arrogance.”

The Dominion Post is but only one of the newspapers that have spoken out against the Electoral Finance Act. The tragedy however is that it represents far more than “humour value”. It undermines four of our most cherished democratic rights

1. The right to hold free and fair elections.
2. The right to exercise free speech.
3. The right to campaign either for or against the government.
4. The right to be fully informed.


High Court grants strike out application in our case against the Attorney General

Late last year Garth McVicar spokesperson for the Sensible Sentencing Trust, the late Graham Stairmand, then national president of the Grey Power Federation, Rodney Hide, MP and myself commenced legal proceedings against the Attorney General, Michael Cullen seeking a declaration that he had failed in his duty to notify Parliament that the Electoral Finance Bill was inconsistent with the New Zealand Bill of Rights Act (BORA). After the Act was passed we amended our claim to also ask for the Court to make a declaration of inconsistency, on the grounds that the EFA was inconsistent with BORA .

The Crown sought to strike out these claims on the grounds that we had no right to bring them. The strike out application was heard in the High Court in Wellington on 15 May and the Court delivered its decision in late June. The Court agreed with the Crown and struck out both actions. While we were not surprised that the action against the Attorney General was struck out, on the grounds of parliamentary privilege we were both surprised and disappointed that the Court struck out our claim for a declaration of inconsistency. The High Court also relied on an earlier case in 1992 and we anticipated that we would need to go to the Appeal Court to have this overturned.

We have decided to appeal this ruling and the appeal will now be heard by the Appeal Court in Wellington on 23 October.

While this hearing will probably be before the election, there is no guarantee we will get a decision before then, and in any event, even if we are successful it is very unlikely we will be able to argue the substantive issue before the election.

If you would like to read a copy of our submissions to the High Court on the Crown’s strike out application and the Court’s judgment please email me and I will be happy to send you a copy.

Please forward this email on

No one should be in any doubt about the type of censorship the Electoral Finance Act imposes. It does little if anything to increase transparency over donations that cannot be circumvented. Its real objective is to restrict the right of ordinary New Zealanders to speak out and to campaign either for or against a political party in election year.

Please take the trouble to discuss the issues this newsletter raises with your friends, family and work colleagues.


Regards

John Boscawen
Trustee – Freedom of Speech Trust
021 760 630


Electoral Finance Act coverage @ Political Animal

Tauranga Electoral Finance Act protest goes off
Labour first to break own Electoral Finance Act
Auckland Electoral Finance Act protest
Owen Glenn and Labour Party funding
Labour buys Tim Shadbolt's silence
Victim of Electoral Finance Act forced to shut down website
Extending a middle finger in 2008
Electoral Finance Act: The vote
Historical day as New Zealand loses democracy
Tuesday 18 December 2008: The death of democracy
Mike Moore turns the knife on Electoral Finance Bill
List of MPs who voted for the Electoral Finance Act
Electoral Finance Bill debate continues
Cartoon and comment: Winston Churchill Clark
Electoral Finance Bill: The purpose is clear
Electoral Finance Bill gets stalled in Parliament
Auckland EFB protest gets 5000
Christchurch March against EFB
2nd Auckland EFB protest
Wellington March against EFB
Auckland EFB protest March: Nov 17 2007
NZ Herald gets nasty over EFB


c Political Animal 2008