I am more than happy with the 9% H1 increase,and the increased dividend.
I don't share your expectations.
So happy, I am buying back some of the shares I sold a few weeks ago.
Currently buying at $1.16,.
Printable View
There's currently only one buyer at $1.16...now filled. Market quite rightly, in my opinion, remains concerned about how long banks carry loss making customers whether its dairy, mining, whatever... in HBL's case obviously dairy is still a contingent issue and until there's a meaningful recovery in the GDT auction price, (strong correlation as suspected and subsequently demonstrated by Winner69 with his graph) I think it will be difficult for the HBL's SP to make real progress north. That said there's the good fully imputed yield at this price should be supportive of SP around these level's I would have thought.
Most Australasian banks have seen their forward PE's clipped back on asset quality concerns...HBL simply following the international trend in that regard.
Disc - Waiting to buy when GDT auction prices show a real recovery.
I really don't understand why after beating expectations, hiking the dividend (something Forsyth at least wasn't expecting) and showing robust strength all round, the share price didn't move...?!?
Hi Michael,
I think it's simply to do with the global investment community being cautious in general, and the market factoring in a little bit of dairy induced weakness for the upcoming years. If you feel it's being incorrectly undervalued, then buy up large, then sit back, relax and enjoy your growth and divvys.
Yes I suppose its in the same boat that many Australian companies were (or are?) in... talks of recession, big slow down etc etc when last week, Australian earnings had an astonishing 10:1 Beat:Miss ratio.... maybe if people get really stupid and the price dips below the $1.10 mark (like mid way last year) I will be extremely tempted, right now HBL is just in the "very tempting" basket
The market knows best, already priced in, if you were a trader you could have made some coin today off the reactionaries. To add to nextbigthing comments the investment community is currently looking at Dairy on a 7 multiplier effect to the NZ economy, 7x18 billion over 230 nominal GDP for NZ pa.
NZ banks 'well positioned' for record profits apparently. I won't complain.
http://www.stuff.co.nz/business/7716...d-profits-kpmg
Craigs note
Slightly ahead of expectations
NPAT $25.6 m $26.1 adjusted
Loan book grew 7.6% Impairment expense up 10%
Loan growth in all 3 sectors
T/P unchanged $1.30
I'd love to know who that bot is selling for, been at it for 4 days now I think.
Any ideas???
Paid article on NBR today: "Heartland may buy a business instead of returning $100m to shareholders"
Jeff sees greater opportunity for acquisitions due to falling stockprices in the financial sector though there is nothing to "articulate in detail" at this stage
http://www.nbr.co.nz/article/heartla...rs-jr-p-185238
An update from the previous reporting period, FY2014.
The underlying debt of the company according to the HY2015 statement of financial position is:
$38.666m + $4.109m = $42.775m
To calculate the total underlying company assets we have to (at least) subtract the finance receivables from the total company assets. I would argue that you should also subtract the problem 'Investment Properties' and the unspecified 'Investments' from that total:
$3,162.169m - ($2,722.443m +$25.831m + $209.544m) = $204.351m
We are then asked to remove the intangible assets from the equation as well:
$204.351m - $49.933m = $154.418m
Now we have the information needed to calculate the underlying company debt net of all their lending activities:
$42.775m/$154.418m= 27.7% < 90%
This compares unfavourably with the comparatuve half year period figure of 13.2%, but favourably with the 40.5% figure from FY2014 date (30th June 2014)
Result: PASS TEST
SNOOPY
Updating for the half year result HY2015. The EBIT figure is not in the financial statements. So I will use 'interest income' as an indicator for EBIT, once I have taken out the selling and administration costs
EBIT (high estimate) = $128.252m-$33.523m= $94.729m
Interest expense is listed as $62.577m.
So (EBIT)/(Interest Expense)= ($94.729m)/($62.577m)= 1.51 > 1.20
Result: PASS TEST, an improvement from the HY2014 (1.42) position. And also an improvement on the position 6 months ago FY2014 (1.44)
SNOOPY
Updating this number for the half year HY2015
Equity Ratio = (Total Equity)/(Total Assets)
Using numbers from the Heartland HYR2015
= $462.310m/$3162.169m = 14.6%
This is a decrease on the HY2014 position (15.3%). It is also a decrease on the FY2014 position of 6 months ago (15.0%)
SNOOPY
Have any of the analytical types thought through the implications of the prospect of negative interest rates on the banks' margins and profits? Net interest margins have generally been under pressure for some time but negative rates, as in Japan and parts of Europe, take us into new territory again. Will charging depositors to deposit funds make up for the lower rates paid on loans? Will lending rates go negative too? What chance of NZ experiencing negative rates? All hypothetical questions, I know, but worth a bit of thought by those of us holding NZ and Aust bank shares.
I have no idea what all this analysis in the above threads mean,however in my opinion(uneducated as it is) it seems a good time to get in provided sp doesn't go above 116.
Once again there is no mention of Tier 1 or Tier 2 in the Heartland HY2015 report.
The 'best case' scenario is that all capital is Tier 1, which is almost certainly correct. $2,657.084m of loans are outstanding. 20% of that figure is:
0.2 x $2,657.084m = $531.4m
Heartland has total equity of $462.310m which is still below the 20% of loan target no matter what the tier classification of the loans.
Result: FAIL TEST
PS I do note that while other posters have protested at my 20% of equity to back up the loan measuring stick in the past, it is not too far away from the 17% which by implication is judged acceptable by management under the watchful eye of Reserve Bank chairman Graeme Wheeler. The reserve bank further qualifies their views that a company of Heartlands credit rating still has a 1 in 30 chance of going broke in any year. I prefer to think in business cycles and 30 years will contain around five of those. So you could restate the Reserve Bank's view as saying that HNZ has a one in five chance of going broke at the bottom of the business cycle. For me that investment risk is too high. So I am sticking to my 20% equity requirement, even if the Reserve Bank will settle for less.
SNOOPY
In the table on page 4 the 'impaired asset expense' has increased to $5.102m (HY2015, ended 31st December 2014) up from from $3.325m in the corresponding prior period (HY2014) and $5.895m in the full year to 30th June 2014 (FY2014). By simple subtraction the bad debt expense for the period 1st January 2014 to 30th June 2014 ( 2HY2014 ) was $5.895m - $5.102m = $0.793m.
In formation of the 'stressed - but not written off- loans' may be found in 'Financial Receivables', Note 12 from IRHY2015
Bad debts are outlined as follows:
At least 90 days past due $30.652m
Individually impaired $25.984m
Restructured assets $4.012m
Allowance for impairment ($19.870)m
PV of Future Losses Adjustment ($6.919)m
Total Stressed Loans (impairments deducted) $33.469m
Gross Financial Receivables $2,749.232m
Total Finance Receivables $2,722.443m
Stressed Loan Percentage (impairment removed)= $33.469 m/ $2,722.443m = 1.59%
SNOOPY
Just as well dairy loans not a problem for Heartland
Dairy industry woes a long way from over
http://www.stuff.co.nz/business/farm...kbased-analyst
Thanks for the heads up PT. What you may have not noticed is that the six month reporting period I was looking at was HY2015, which ended on 31st December 2014.
So I am talking about figures generated more than a year ago. Why have I reached back into the past like this? Because once Heartland got their problem property portfolio under control, I let them off my 'tight observation leash'. Now since I have become a TNR shareholder, I need to update my semi-annual database for compartive purposes.
I was going to do HY2015 and HY2016 together. However, because of the confusion between what data related to 'Heartland' and what data related to 'Heartland Bank' (the two terms meant slightly different things until the recent merger), I have decided to wait until the release of the HY2016 Interim report. This will contain the extra information I need which is not in the press releases made already.
So despite what you thought, my data is accurate. But is it correct? This I am now having doubts about.
First to clear up a bit of 'cut and paste' sloppiness from previous years. 'Tier 1' is a term that refers to the quality of bank capital, not loans. The capital is there to support the loans of course. But it was wrong of me to refer to 'Tier 1 loans'. So I have corrected that.
My aim was to look at 'Risk share lending' by comparing 'bank equity' with the size of the loans on the books. But should I be comparing the bank capital (all Tier 1 in this case) with:
(1) The loans made to customers (listed as finance receivables). OR
(2) The loans made from customers, and parent banks (listed under borrowings)
Granted the two are related because one supports the other. So even if I have been using the wrong one that necessarily doesn't stop me from getting the right answer, by accident :-). Up to now I have been using (2). But now I wonder if I should be using (1)? What do you think?
SNOOPY
If I may offer:
Bank capital rquirements are based on risk weightings of loans to customers, eg the preferential low risk rating afforded lending for housing compared to most commercial loans. Therefore (1) should be used.
Thanks Macduffy.
Following (1), the 'loan to' figure I should use is $2,722.443m
Following (2), the 'loan from' figure I should use is $2,657.084m
Given how little different those figures are, I am tempted to suggest that there are many things in life worth spending time in careful consideration and contemplation. And this isn't one of them!
The smaller figure, all other things being equal, requires a smaller amount of shareholder equity to support it. So you could argue that using (1) is more conservative, becasue the answer (0.2 x the figure) is a larger value of shareholder equity. That observation is not that useful though. Because in the previous comparative period:
Following (1), the 'loan to' figure I should use is $1,905.850m
Following (2), the 'loan from' figure I should use is $2,076.968m
So using (2) is more conservative. Oh dear!
SNOOPY
I brought a few more HBL this afternoon at $1.13.
Over the next year or so I am expecting 8 cents dividend.
My target price is between $1.25 and $1.35.
At $1.25 I will make 12 cents sp gain + 8 cents divie.Total 20 cents or 17.7%.
At $1.35 I will make 22 cents sp gain + 8 cents divie.Total 30 cents or 26.5%.
Perhaps over the next year[or two], the market will value HBL on its own merits,rather than grouping it with the Australian Banks.
When that happens, I expect PE expansion which will take the sp above $1.35.Therefore I am "well positioned."
I am very happy for the SP to stay low and the divi high for as long as the DRIP is operating. Keep up the good work all you HBL knockers with your negative comments. Suits me just fine thanks -:)
Time to look at the Liquidity Buffer ratio, the balance between monies borrowed and monies lent and matching up those maturity dates using a one year time horizon. The equation we are looking to satisfy is:
(Total Current Money to Draw On)/(Net Current Loans Outstanding) > 10%
Numbers are taken from the interim report dated 31-12-2014.
On one side of the equation, we have borrowings.
HNZ BORROWINGS
HNZ has total borrowings of $2,657.084m (see Statement of Financial Position). This is made up of:
1/ Term deposits ($1,784.628m) lodged with Heartland (see note 14, IR2015).
2/ Bank Borrowings totalling $565.519m
2/ Securitized Borrowings totalling $303.558m
3/ Subordinated Bonds worth $3.379m.
IR2015 does not give a breakdown given of current and longer-term borrowing maturity dates.
The group has securitized bank facilities totalling $350m, all in relation to the Heartland ABCP Trust 1 (ABCP Trust). The ABCP Trust facility of $350m matures on 4th August 2015.
These facilities are drawn to $304m (c.f. FY2014: $229m).
Securitized asset maturity date rollover renegotiations have happened without trouble over the last two years.
The amount of securitized holdings drawn has increased by $75m (33%). The maximum amount that can be borrowed under securitized arrangements has dropped again too, from $400m to $350m. The borrowing headroom available using securitized bonds is now:
$350m - $304m = $46m
All four sources of funds (itemized above) have been on loaned to customers who want loans.
HNZ LENDINGS
Customers owe HNZ 'Finance Receivables' of $2,749.232m. There is no breakdown in note 12 IR2015 as to what loans are current or longer term. However, if we look at the legal declaration to the reserve bank
http://www.heartland.co.nz/_template...x?documentid=5
and select that for December 2014 more detail is available. Note 19 from declaration DEC2014 , shows the expected maturity profile of total finance receivables due over the next twelve months.
$88.187m + $568.729m + $439.009m = $1,095.925m
These are offset by short-term borrowings expected to be repaid over the coming twelve months of
$5.132m + $310.986m + $184.161m = $500.279m
Thus, the net expected maturity of receivables is:
$1095.925m - $500.279m = $595.646m
The positive sign means that more money is expected coming in from loans to customers that have matured, than the amount of money due to be repaid to the debenture holders.
=> Pass Short term liquidity test
That bot (if there is actually one)
Saudi's selling bank stocks globally
Doubt if they have any Heartland though
Yes please! Dear Mr Market, please keep your head in the sand, and continue to ignore the great fundamentals and impressive first half report. It would be much appreciated for you to do what was done about 6 months ago, keep the share price low until Dividend reinvestment is complete, then begin a steady rise (except this time Mr Market maybe you'll wake up and not let the price drift down back into the bargain basement it is currently in)
Fed Farmers say 11%of dairy farmers were under scrutiny by their banks, compared with 7%in November and 6% in August.
Banks call this Strategic Debt Management - better outcomes in helping farmer out of the industry and hopefully recover more than just foreclosing / receivership
We should be grateful to Heartland management they have essentially avoided this impending fiasco
Yes Heartland Bank management/directors certainly need congratulating on their aggressive cautious stewardship.Perhaps having a lot of skin in the game makes them more focussed?
The Australian banks have not faired so well.Luckily HBL face fewer headwinds than them,yet they are being contaminated by association.!.
Over the past year ANZ sp is down 37%, BOQ down 24.43%,CBA down 23.2%,NAB down 31% and WBC down 32,7%
Growing roe, eps and dividends will eventually see a rising sp for HBL.In the meantime the ratios look very solid and modest to me.
Just had a look on ANZ securities charts and yes indeed HBL has been a real out-performer against the backdrop of a severe general correction in banking stocks. Only down 15% from $1.33 to $1.13 over the last 12 months, mitigated further by good fully imputed dividends. Good result considering how poorly many of the other Australian and international banks have shocked their shareholders. No mining exposure has been a real blessing for HBL shareholders. That said until fears of a global recession ease and until there's a genuine bounce in commodity prices that ease asset quality concerns, I expect the banking sector to remain under pressure, (HBL probably continue to outperform on a relative basis). Its been a very tough start to 2016 for many stocks with many tigers, cats and dogs very busy licking their wounds.
I still see it as a correlation with the Australian Banks,because of lower valuation multiples being applied to the banking sector at present.
"Punters" may have "greater risk aversion " but Heartland Bank's sound financials ,means " investors" can take advantage of "punters" folly.!!! lol.
Huh? I don't think so. From a shareholder perspective, Heartland is a lot more exposed to agriculture & mining than the Aussie headquarted big banks.
See table below.
Loan Category ANZ Loan Book FY2015 (gross) ANZ Loan Book FY2015 (%ge) WBC Loan Book FY2015 (gross) WBC Loan Book FY2015 (%ge) HBL Loan Book FY2015 (gross) HBL Loan Book FY2015 (%ge) Agriculture, Forestry, Fishing and Mining $39,610m 4.7% $22,671m 2.9% $576m 17.8% Business and Property Services $51,000m 6.1% $74,793m 9.7% $396m 12.2% Construction $7,609m 0.9% $7,682m 1.0% Entertainment, Leisure and Tourism $11,797m 1.4% $8,416m 1.1% Finance and insurance $230,710m 27.5% $95,694m 12.4% $377m 11.6% Government and Local Authority $52,524 6.2% $75,936m 9.9% Manufacturing $34,432m 4.1% $18,501m 2.4% $94m 2.9% Personal lending $330,925m 39.5% $419,764m 54.5% $1,397m 43.1% Electricity, Gas and Water Supplies $9,795m 1.2% $7,445m 1.0% Retail & Wholesale trade $38,528m 4.6% $22,774m 3.0% $276m 8.5% Transport and storage $14,783m 1.8% $13,895m 1.8% $20m 0.6% Other $16,455m 2.0% $2,358m 0.3% $102m 3.2% Total $838,248m 100% $769,929m 100% $3,240m 100%
SNOOPY
Be even better if they actually do an acquisition rather than just talk about it regularly for the last 18 months. I guess you could argue they're better positioned now that sector PE's have compressed but OTOH one could argue they've compressed for a reason and with slower economic times an acquisition of say MTF while potentially less expensive is also potentially riskier. (e.g. I'd imagine some of the 430 Dick Smith employees could face serious challenges ahead meeting their loan payments).
Ouch Snoopy...your beagle nose has detected something interesting there. I guess HBL have only just over $200m dairy loans so about 7% of loan book but still much higher on a relative basis than ANZ !
Also as you noted recently, HBL have been less forthcoming with appropriate doubtful debt provisioning than UDC. Must be the was it 21% ? of ANZ assets in Asia that has spooked the market then ?
Heartland Bank have already done a number of very successful acquisitions.
I am reminded of Rank Group in the late 1980s.Had plenty of cash but just kept delaying buying anything.The market just kept on and on about them talking about acquisitions,but not doing any.Yet Graeme Hart took his time.The rest is history.
Bit like Ebos,always three acquisitions in the pipeline at any one time.But very few ever get done.But the ones they do are great.
Heartland Bank's directors and management have significant share holdings,so any acquisition/acquisitions will be well thought out.
In the event of no further acquisition they still have court approved share buy back.
Either way shareholders will enjoy increasing ROE,EPS and higher dividends.
Yes you are right Winner. At your suggestion I have removed the 'three decimal places' on the statistics relating to Heartland.
The reason I put the decimal places in there was because Heartland did in their annual report. I thought that if I left them there it would be easier for those who wanted to check up on my work to find where I pulled the figures from. However, for comparison purposes, it looks like I may have made some transcription mistake with the decimal point. I didn't. ANZ and WBC really are over 200 times bigger than Heartland in loan book terms. That fact does ram home how very big those 'big' Aussie banks really are!
SNOOPY
Heartland announcement said this -
Given continued market interest in the dairy sector in New Zealand, Heartland advises that its direct exposure to dairy farmers is 8% of its total lending book as at 31 December 2015. The average loan to value ratio (LVR) for Heartland’s dairy is 57%
Good to see them still lending in an industry that has a bright future. As Heartland says ' cautious approach to new lending, but remain open to new customers and supportive'
Dairy exposure pretty low at 8% of receivables - say $234m
But it's LVR at 57% that's the real good news. Previous number they quoted was 61% so 57% is pretty amazing seeing farm prices are down.
Just shows that even though total loans are up the quality of those loans appear to be much stronger. Incredible really. This is reflected in a pretty minimal increase in impairments as well.
Seems all honky dory down on the farms that Heartland have an exposure to .....and Heartland prospering from it
I have doubts from a practical viewpoint that they would really force their dairy customers to get fresh valuations every single year. If a customers account was badly in arrears or under review I can certainly understand that it would be reasonable to ask the customers for fresh valuation reports.
Its not just Dairy... it is the actual effect on the wider rural loan base which concerns me, I see wider rural financial distress showing now up everywhere, nine months after this started, for instance a larger commercial pump service and installer discussing dairy and wider farm accounts that have been dragging on for 9 months now. His bank is now demanding more reporting. Beef is also not great and many other farms have part dairy exposure as well, directly and indirectly. I initially picked on HB as it has a broad wider rural base and in my opinion the service sector to the farmers are where the real scale of the problem does lie.
Possibly the best barometer we have for rural servicing is PGW.
Their lastest result was not flash,be neither was it doom and gloom.
Their exposure to dairying is approx. 24% compared to HBL's under 8%,
I did sell my Tru-Test and PGW some time ago for the very reasons you pointed out.
Up 2 . But good to see some buying going on and not the relentless selloff of the last few weeks. The tide may be turning.
Kiwi - it has turned eh .....and more fine tuned than I thought
Seeing its hit 120 already I now reckon 125 by weeks end and 135 by Easter
Last weeks announcement just confirmed heartlands greatness .....from here on it is all up.
Didn't somebody mention 160 a while ago?
Mr Market! What are you doing! This is going to affect the price I have to pay for my dividend reinvestment! Why are you increasing? Now, instead of buying them at dirt dirt cheap, I have to buy them cheaply! I wanted to get my DRP at bargain basement price, but now you are finally (after weeks of the results being out) taking notice of how great they were?
Dam dam dam, could you not have held the price at $1.14 or so until 5:00 pm 25 March?
Dairy prices up = Heartland up - You know how some people think.
Best Wishes
Paper Tiger
Be very careful of word on the street.........
You are forgiven W69
This is why I like the drip and want the share price to stay low ��:
5/4/16. $1.198 (3.5 CPS)
29/9/15. $1.11 (4.5CPS)
27/3/15. $1.32 (3.0 CPS)
29/9/14. $1.015 (3.5 CPS)
20/3/14. $0.8606 (2.5 CPS)
1/10/13. $0.826 (2.5 CPS)
The magic of compounding ��������
Westpac nz worried about stressed rural loans. Aren't we lucky that heartland have avoided such impending turmoil by their prudent approach
From sharechat.co.nz
Westpac’s New Zealand business has seen an increase in “stressed” loans amid a weakening of the country’s agricultural sector, which is highly exposed to the global crash in dairy prices.
Westpac said today its New Zealand arm, which accounts for 11 per cent of the bank’s total cash earnings, saw an increase in stressed lending in its agricultural loan portfolio over the three months through December, rising to 4.2 per cent of lending, up from 3.9 per cent in the September quarter.
Although the percentage of impaired loans held steady at 0.34 over the quarter, Westpac said low dairy payouts were causing a rise in stressed loans. Agricultural loans make up nearly 8 per cent of the NZ arm’s portfolio, with dairy accounting for around 70 per cent of the $NZ8 billion agricultural loan book.
Couple of items:
Firstly --
You can see why the Reserve Bank does not worry about Heartland going phut:
Westpac has a dairy loan size of about portfolio of $5.5B;
Heartland has a TOTAL loan size of $2.9B.
[Important Note: I sincerely hope that the Heartland does not go phut.]
Lastly --
Any idea how Westpac defines stressed?
Here is all the Heartland Rural loans past due or impaired at end of Jun & Dec:
($ are thousands; big numbers at bottom: total rural loans)
http://i7.photobucket.com/albums/y26...08-NZX-HBL.png
As you can see they shuffled a lot of the 90+ loans over to [individually] impaired (which essentially means there are keeping a closer eye on them).
Outside of that there is little change and so far, actual provision for impairment is still insignificant.
Best Wishes
Paper Tiger
http://a.msn.com/r/2/AAgxhkS?a=0&m=en-nz
HBL wise not to foreclose on anyone. Little birdie told me the other day after talking to a leading farm broker they had "Listings for Africa" and anyone interested in buying could basically name their own terms.
Prices hold despite dairy woes Heres some actual FACTS
Innuendo unsupported from an self appointed industry expert, chinese whispers. Really unsupportive of dairy farmers doing it tough in the down cycle. Bluebirdie of happiness at others expense.
Could it be that its only recently banks have started to take a dim view on the outlook for dairy and its only recently that banks are starting to pile the pressure on ?
What would a leading farm broker know about listings for Africa anyway ?
http://www.interest.co.nz/rural-news...sector-diverse
Some interesting debate in there. Best to look historically or well into the future because anyone looking at the fundamentals of a dairy farm right now would have good reasons to be deeply depressed.
Most banks are subscribing to the "it'll all come right in the end" school of thought, the real question is why ?
Well said, if i was involved in strategy in the US or EU I would aim to take out Fonterra & NZ Dairy given Fonterra's current debt levels and their current cost advantages, look at the lower cost structure they face, as an example the dutch farmers currently have interest rates in the range 1.5-1.75% compared to...plus advantages being in the EU captive M. They are never going to clear the shadow NZ farm stock for sale at current asking prices..current land prices is one of the elements making us unable to compete on price....if you haven't worked it out yet.. serious blood in the water for Dairy and wider rural communities is just a matter of time...flowing onto Banking....
Because John Key says the outlook for dairying is good. Heartland have no need to worry
PM says European dairy production surge in 2015 a one-off; banks tell him they're being cautious; but a few very indebted farmers will go under; Govt not taking action on Fonterra's tougher payment terms for suppliers
http://www.interest.co.nz/news/80478...g-cautious-few
How do we know it will be a one off, big assumption. What about the US? In the end given where we are strategically positioned no other positive position/spin you can now take. Yep a strategy based on hope. I know for a fact the US Dairy industry would take the opportunity to break us, they have feared Fonterra for so long.
The US dairy industry, yes. Not so sure about the US banks who hold a good chunk of Fonterra's hefty debt.Quote:
I know for a fact the US Dairy industry would take the opportunity to break us, they have feared Fonterra for so long.
Tough times and some farmers unfortunately will have to sell in this down cycle. We all know Heartlands small % exposure here. Factor that into your risk /reward decisions, margin of safety and make an informed decision whether to hold sell or buy . Big picture;the banking sector globally under the pump atm , another thing to consider.
Surely its not election year already :)
http://www.stuff.co.nz/business/farm...y+9+March+2016
Nearly 100 staff at Fonterra on over $500K...maybe its time for them to get real and see a drop in their heavily bloated salaries in line with the reduction in the dairy pay-out from $8.40 to $3.90 ? What's the bet if they did that fewer than a small handful would resign ?