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Dairy prices keep dropping

Written By: - Date published: 9:44 am, July 2nd, 2014 - 90 comments
Categories: Economy, exports, farming - Tags:

Last night the GlobalDairyTrade auction gave more prices drops. Stuff reports

Dairy prices have resumed their slide, falling 4.9 per cent at the latest GlobalDairyTrade auction overnight.

The drop, the second-biggest of the year after an 8.9 per cent plunge at the April 1 auction, was the ninth fall out of the last 10 auctions, the only increase being at the previous auction two weeks ago when prices edged up by 0.9 per cent.

The average winning price at the latest auction was US$3595 per metric tonne, down 28.7 per cent from the recent peak of US$5042 on February 4.  The auction platform’s trade-weighted price index was down by an almost identical percentage.

Prices were put under pressure by a big increase in supply, with a maximum supply of 43,249 tonnes, up almost 33 per cent from the previous auction, with 41,513 tonnes sold.

Whole milk powder, the biggest category by volume, drove much of the overall decline with a 5.4 per cent drop in price.

The problem for NZ was that the rise in production probably largely wasn’t from NZ. If we go back to the comments on the 19th of last month

ASB rural economist Nathan Penny said markets were starting to take note of the more modest milk production outlook for next season.

“At the end of last month, Fonterra forecast 2014/15 season milk production growth of 2 per cent compared to the season just gone,” he said.

“In comparison, Fonterra reported that milk solids production for the completed season was up 8.3 per cent on the season prior.”

Global Dairy Price Index

As can be seen from the price index. We get quite a lot of variation in the overall pricing for dairy products. NZ are essentially filling in for whatever requirements exist over countries domestic or regional dairy production. We are literally filling in the few percent that are not covered by local or regional production. To give you an idea about how dominant we are in the international trade, see this pie chart from the Dutch Dairy Board in 2011. Then we were exporting as much as the whole of the European Union.

Key players in world dairy trade in 2011

Since 2008, NZ has massively increased its production of whole milk powder. The new production has largely gone to the massive new opening market of China.

NZ Whole milk powder production

However China is a country that is incrementally improving both quality and production for its domestic economy

China Whole milk powder production1

And of course we are not the only possible supplier. Other countries have been gearing up to take part of that trade as well. This has been leading to an overall increase in the amount of whole milk powder available for export.

Despite the blithe words of National and some rather silly bank economists. I’d say that the dairy boom is slowing and possibly over.  Expect steadily falling export prices for a number of years.

In the meantime, under National in its usual short term boom mode, much of the rest of our export tech and manufacturing economy has been stagnating. Once you strip the processing of dairy from our manufacturing sector, what you see is the continued decline of capacity. This feeds into the capacity of other areas like IT exports, which in NZ are often exporting hardware with software.

90 comments on “Dairy prices keep dropping”

  1. Colonial Viper 1

    It appears that China has used us as a stop gap while getting their industry up to speed (and learning all our best farming and milk processing techniques).

    This price drop is going to push over leveraged parts of the industry to try and overstock further in order to meet debt repayments. That’s a bad spin to get stuck in.

    • Molly 1.1

      Yes, that was apparent years ago.

      When dairy consultants went to China to set up farms and advise on dairy farming – did none of them consider the long-term result? The failure of big business to be business thinkers continues to intrigue me.

      • Chooky 1.1.1

        +100 Molly ….they are all so short sighted and short term…and why would they( NACT) be selling off precious NZ dairy and viticulture land to foreigners as well as tourist land and sites and amenities /potentials…when WE could be selling the fruits/wines and milk/milk products and reaping in the tourist dollar ourselves?….NACT business is short sighted fuckwit business

        What is needed is money poured into R@D research/ideas/encouragement for NZ agricultural diversification/new markets away from China…maybe Arab nations and USSR

      • Draco T Bastard 1.1.2

        Even if they hadn’t done so China would still have upped their milk production – it would just have taken them a bit longer.

        • Molly 1.1.2.1

          Yes. But during that extra time, they should have been thinking about how to make farming in NZ sustainable, and what niche markets to corner. Instead they continued to “milk the cow dry” in terms of just continuing on without change.

    • Saarbo 1.2

      Yes, maybe CV. I think this will bring the payout down to approx. $6.50 which is close to the long run average. With the exception of the really highly leveraged most should still breakeven.

      The upside is that this pay out will be good for the environment because the marginal benefit of producing each extra KG MS is near zero for most farmers so we will see a drop in the use of supplement and a drop off in production as farmers go back to grass, which is where we should stay.

    • Saarbo 1.3

      It was always going to head back to $6.50kg ms, as the attached article shows, large US dairy farms are breaking even at this so it was only a matter of time. http://www.stuff.co.nz/business/farming/dairy/10037881/Kiwis-warned-off-mega-dairy-farming-model

    • Draco T Bastard 1.4

      It appears that China has used us as a stop gap while getting their industry up to speed (and learning all our best farming and milk processing techniques).

      Yep. China is doing what all countries should be doing – diversifying their economy so that they’re not dependent upon imports while also being able to export a hell of a lot. The end result will be that China will be able to buy up other countries.

      • Chooky 1.4.1

        they already are…and the NACT fools let them

      • mikesh 1.4.2

        “Yep. China is doing what all countries should be doing – diversifying their economy so that they’re not dependent upon imports while also being able to export a hell of a lot. The end result will be that China will be able to buy up other countries.”

        Agreed. International trade should only exist where countries have needs which they can’t meet from their own resources. Countries should not be relying on exports to provide their people with jobs and income, but simply to pay for the imports they need, with exchange rates adjusting to equalize imports and exports.

  2. DH 2

    Been far too much white man’s arrogance in our dealings with China. All those pompous blowhards claiming we can export our knowhow, that we were somehow smarter than everyone else, were just blowing smoke out their arses.

    I read this article a while back…

    Chinese milk producer wins global top prize

    http://english.cntv.cn/2014/06/04/VIDE1401853920635559.shtml

    Pretty much affirms what CV says above. I can’t even blame China either, they’re doing for China what we expect our Government to do for us… look out for our interests.

  3. KJT 4

    I hate having to say I told you so, but I could see this coming. It has happened so many times.

    NZ has always had this boom/bust with the next big thing as long as I can remember.

    Mutton, deer, goats, The share market, timber, beef, dairying.

    Everyone piles in and borrows lots of money to invest in the latest “craze”.

    The we all get left sorting out the shit, as prices drop when other countries get in on it.
    The inevitable bust happens as the over-high prices paid for “investments” in the latest “craze”, excess borrowing and the lack of investment and support of alternative industry begins to bite.

    Didn’t take long for those who were talking up dairying to forget about the EU’s “butter mountains and milk lakes” that depressed dairy prices for years, or Mount St Helens and South American plantation forests that took the shine off forestry investments.

    Meanwhile the focus on export markets and the sacrifice of other industries and community to support, “the thing that is going to make us all rich” leave us with no alternatives but to try the same again, as we have sacrificed the rest of our economy for the chance of, almost wholly imaginary “free trade” access overseas for the “commodity de jour” Forgetting that by the time we get that access, everywhere else would have ramped up their production also.

    Why does anyone think that China can, or will, allow us to keep a trade surplus for any length of time. Only NZ is that stupid.

    • Draco T Bastard 4.1

      +1111

      Societies don’t specialise and that will always win out over the rather stupid assertion by economists and politicians that they do. Then there’s the fact that a locally produced item is always cheaper than an imported item simply because it uses less resources to get to market. And now that we’ve reached the point where resources are running out that use of resources will become paramount in the decision to export. In other words, exports will start to decrease as countries start to decide to keep their resources for themselves. We’ve already seen this happen when China decided to cut the amount of Rare Earths that it was exporting.

  4. Ad 5

    The New Zealand diary industry has seen this threat of the rise of South American and Chinese production for a decade now. In 2004 the Chairs and CE’s of Fonterra, DCANZ, AgResearch, and many others met with the Heads of TReasury, MED, MoRST, and their respective Ministers of Finance, Research, tertiary education, Crown Research Agencies, and economic development.

    The scenario was played out before them of New Zealand being able to extend its boom perhaps for 8 years or 10, and then they would face a hard wind.

    Eventually, the Fast Forward Fund was the strategic response, which National killed.

    To me, only Labour has understood and engaged with the comprehensive strategic risk to New Zealand that the diary industry represents.

    • Draco T Bastard 5.1

      the comprehensive strategic risk to New Zealand that the diary industry represents.

      That’s about the best description of farming in NZ that I’ve ever seen.

    • One Anonymous Bloke 6.1

      “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” said the Queen.

      • Poission 6.1.1

        Yes it is a cross effect of arbitrage(collateral damage).

        The questions is do we blame wheeler or Parliament?

        • One Anonymous Bloke 6.1.1.1

          Parliament sets Wheeler’s agenda.

          • Colonial Viper 6.1.1.1.1

            Parliament sets the Reserve Bank’s agenda? BS. The other way around. And has been for 30 years.

            • One Anonymous Bloke 6.1.1.1.1.1

              Reserve Bank of New Zealand Act 1989. Heard of it?

              • Colonial Viper

                lol are you serious.

                • One Anonymous Bloke

                  Obviously you are right, and Parliament is unable to alter the RB Act. Obviously.

                  • Colonial Viper

                    Jeezus. Parliament can alter the Act as it wants within the very tight conventional limits which are permitted. So why do the Left keep thinking that they can somehow control the institutions of the Deep State with fucking bits of paper, and that somehow, Parliament has both the first and final say in how our economy is run. Just look around you at the evidence.

                    • One Anonymous Bloke

                      So, this morning the RB set Parliament’s agenda, now it’s the “Deep State” running everything. Just one question: since Parliament is so powerless why are you so ambitious to win a seat in it?

    • lprent 6.2

      Exports are booming.

      The trick with an export based economy is not to just look at what is happening right now (which is what you appear to be doing). It is to look at what is happening next and over the coming decade.

      Our exports have been booming, but almost entirely in one area – whole milk powder going to a single market to China. It is the same with other commodity products but at a much smaller rate.They will probably keep booming in terms of volume, but at a reducing price. Other countries have been ramping up their export production to help fill the production void from demand and so has China.

      The falling prices are a symptom of that happening.

      It could be that we get another set of markets opening there or elsewhere. But it gets steadily harder for any one product. That is the nature of international commodity markets.

  5. Rob 7

    So what is your point of this post Lprent

    1.) commodity prices should just keep increasing and if they fall we should quickly give up… and / or

    2.) NZ’ers should not engage in any infant growth industries just in case they turn into a boom , ..and / or

    3.) international competition should not exist in anything NZ industry competes in, if someone else enters or develops their own capability then again we must exit… and / or

    4.) NZ’s involvement in any industry and endeavor can only be allowed under some central committee criteria …and / or

    • One Anonymous Bloke 7.1

      …or

      5) Right wing lackwit frames stupid options while ignoring the point of the post which is that strong economies rely on more than primary commodities.

      There’s a big clue in the sentence “…much of the rest of our export tech and manufacturing economy has been stagnating”, so perhaps the problem is English comprehension as well as economic illiteracy.

      • Rob 7.1.1

        You have some serious issues OAB , just because someone has a different view point than you, does not give you the right to aimlessly throw abuse.

        Where have I stated that we must be solely reliant on commodities. What I have stated is that we are in this industry (amongst other)s and that commodity pricing just does not keep increasing and that local competition will not stay away. Fairly basic business activities that most NZ businesses are aware of. It does not mean we just give up.

        So whilst you rubbish these industries, don’t forget that they actually employ people and earn export value for this economy

        You have a large time investment commenting on posts on this site , I wonder whether you are actually engaged in any productive outcomes or just exist to belt the keyboard keys in anger. You must live in a dream world where you think everything can be improved instantly with the signing of a Govt document / Act/ cheque by some some vacuous committee.

        So just because you froth at the key board about what is wrong with it all and how its all Nationals fault , the fact is you cannot instantly change an economy to largely be one of highly specialized unique industries built on home grown R&D protected by large levels of IP and collecting large rents off shore.

        • One Anonymous Bloke 7.1.1.1

          Who “rubbished” what industry? Not me.

          Who claimed you can “instantly” change an economy? Not me.

          Perhaps if you spent less time twisting other people’s words you wouldn’t attract so much derision and contempt. Go on, give it a try.

          • srylands 7.1.1.1.1

            “You have some serious issues OAB , just because someone has a different view point than you, does not give you the right to aimlessly throw abuse.”

            Yes well good luck with that. He has serious anger management problems.

        • Lanthanide 7.1.1.2

          OAB is not “aimlessly throw[ing] abuse”. He’s throwing it at you. Deservedly so.

          • Nakiman 7.1.1.2.1

            OAB throws abuse at everyone with a different point of view. He is just an angry abusive tosser.

            • One Anonymous Bloke 7.1.1.2.1.1

              “OAB, what is the best thing in life?”

              “Driving wingnuts before me and hearing the lamentations of their parrots.”

          • Rob 7.1.1.2.2

            Good one Lanthanide , well you can be both satisfied that the “targeted” abuse was well thrown.

            So let me know how you would re-invigorate our “stagnating tech and manufacturing industries” and supposedly reduce the risk of an over reliance on dairy?

            • One Anonymous Bloke 7.1.1.2.2.1

              I think Labour & The Greens have detailed and costed plans knocking around somewhere. Where could they be? I’ve looked everywhere* and I just can’t find them. Perhaps you’ll have better luck than me, Rob.

              *except on their respective websites

            • Draco T Bastard 7.1.1.2.2.2

              The same way that the US does – massive government investment in blue sky R&D across multiple industries. I’d probably start with building the ability to process our resources to be used in high-tech manufacture and building the manufacturing capability. Said manufacturing capability to then be leased out to entrepreneurial types who dream up the devices to be manufactured.

              • Colonial Viper

                The same way that the US does – massive government investment in blue sky R&D across multiple industries.

                Some major strategic infrastructure investments (on the scale of tens of billions of dollars) should certainly be done – and delivered through a renewed Ministry of Works with only minor private sector involvement.

                Re: blue sky R&D – given approx 20 years until we are out of cheap fuel I don’t think that we can afford true blue sky R&D. I think we need to turn the knowledge and science we have now into truly useful, robust and inexpensive applications.

                I would ramp up a technical/technology ecosystem in NZ using lots of medium, small and start up companies, and 1,000 $100K investments. (money exchanged for publicly held equity).

                • Draco T Bastard

                  Blue sky R&D could be used to look for alternatives to cheap fuel. Electric transport options are probably the go so R&D into renewable forms of generation such as wind, solar and wave. We’d also want to look at better means of distribution such as this bus.

          • Tracey 7.1.1.2.3

            so much more honest than the passive aggressive pseudo superiority exhibited in 7.1.1 and 7.1.1.1.1

        • Mainlander 7.1.1.3

          Thats all he really offers on here Rob, and it just creates drama and off topic rants and abuse especially for those of us that mostly just read the threads, his constant disruptions to this site are more than annoying they usually detract from the purpose of this site especially with the election so close

          • One Anonymous Bloke 7.1.1.3.1

            And yet somehow, I’m here discussing the post, trying to draw Rob’s attention to the point after reading through his four multiple-choice intentionally provocative deliberate misunderstandings, and here you are, off topic, just like your last three or four offerings.

            Since you’ve chosen (with your personal responsibility) to be so rude and irritable, I see no reason not to carry on irritating you.

            • Mainlander 7.1.1.3.1.1

              Do as you wish, its not like most of your idiotic rants cant be scrolled past except for the fact you take up so much room on the threads inbetween the intelligent comments and rational (non abusive) debates

    • Ad 7.2

      LPrent is pointing out New Zealand’s growing narrow exporting reliance and vulnerability to the dairy industry – and clearly you don’t disagree with that. The botulism crisis required our Prime Minister to do a major apology tour to China – that’s the scale of risk he sees it representing.

      The dairy industry will in a few short years be more important than the whole of the public sector economy- and well beyond the influence of direct democracy. Every future government needs to develop a broad and enduring relationship with the dairy industry to manage the collective risk to New Zealand – across many policy fields – that it now represents.

      • srylands 7.2.1

        What on earth do you want the Government to do? What New Zealand companies produce and export is a function of markets.

        • One Anonymous Bloke 7.2.1.1

          Are you back on that tiresome dribble-fest again?

          If it’s all about the market why does Oravida need it’s own anonymous border official and why did the lying Prime Minister go to China to allay fears about botulism?

          • Rob 7.2.1.1.1

            So you want more of that OAB, is that a good thing?

            • One Anonymous Bloke 7.2.1.1.1.1

              Did you get the point Rob: that there are certain things that governments do that markets can’t (naturally the reverse is also true)?

              S Rylands knows this, we had the discussion last week, and yet it comes up with monotonous regularity, almost as though right wingers were suffering from an echo-chamber mentality where they mindlessly repeat received dogma rather than think for themselves or perform perfunctory reality checks from time to time.

          • Nakiman 7.2.1.1.2

            You are the one who is dribbling One Abusive Bloke. Are you really that thick

            • One Anonymous Bloke 7.2.1.1.2.1

              Did it sail right over your head Parrotman? Government behaviour has a profound effect upon ‘the market.’ If you don’t accept that I can recommend a detailed study of conditions in Somalia. Note in particular the positive changes that have occurred since the reestablishment of something approaching a government.

        • framu 7.2.1.2

          so its nothing to do with policy settings and signals coming from govt?

        • Draco T Bastard 7.2.1.3

          Due to your willing blindness you may not have noticed that markets don’t work to provide what a country needs.

        • Ad 7.2.1.4

          The dairy industry is to New Zealand what banks are to New York or London:
          too big to fail.
          And there I have described the limits of markets for you in a phrase you may understand.

          Let me tell you want I want the government to do. I want our government to engage with the dairy industry as if most of our export economy and international reputaiton is at stake – because it is. I am pretty confident the author of the post would as well.

          Imagine if this government was as prepared to intervene in the dairy industry or indeed the i.t. development sector with as much “market interference” as they have been into the gambling industry, film industry, housing industry, electricity industry, competitive yacht racing industry, and irrigation industry.

          Apart from the absurd hobby-horses listed above, National’s MBIE and Joyce in particular are utterly directionless.

    • Draco T Bastard 7.3

      The main point of the post, even if Lynn doesn’t realise it, is that international trade is dying and that we won’t be able to export ourselves to wealth and that we’ll have to fall back upon our own resources. Of course, that was always going to happen.

      • Rob 7.3.1

        Draco, I don’t want top comment on what is happening on international trade , however there is return to local fabrication and more discussions and opportunities are occuring in regards to why dont we do it here as opposed to just purchasing off shore.

        This is actually enhanced by having a high dollar. We still require a large level of base raw materials to be imported (ranges of steels, alloys, textiles and many others) but now conversations are about local fabrication than just bringing the whole finished item on shore.

        • Draco T Bastard 7.3.1.1

          We make some of the best steels in the world. I’m not sure but I suspect that the unique makeup of our iron sands means we have an excellent supply of titanium. Unfortunately, it’s presently being used to make what white paint. We also have many other metals available including at least one 20 million tonne deposit of bauxite in Northland.

          Textiles are interesting. We can obviously produce excellent wool and I understand that hemp fibres can be used to produce a finer and more durable thread than cotton. I believe that hemp grows well pretty much everywhere and is very easy to grow getting multiple harvests each year.

          Once you start looking at what resources NZ has available you start to realise that NZ doesn’t need to import at all and thus we don’t need to export either. We should have a general policy to import only until such time as we can produce the product here. And that should apply to all nations.

          [lprent: Corrected a glaring typo. I presume you meant Titanium dioxide, a main ingredient in many white paints. ]

    • lprent 7.4

      So what is your point of this post Lprent

      We as a country shouldn’t get too excited and pile all of our internal investments into a single commodity product that is based on mining a scarce resource (and farming fertility is a scarce resource) for a short-term international shortage. In the case of dairy milk powder that is land and water. What we get out of that is a lot of investment pushing up the resource prices (eg rural land prices), or damaging the resource like water (which then damages other industries) in a tragedy of the commons, and relatively few jobs.

      That is pretty easy to see in such basics as the continuing shortfall in tax estimates. Growing a capital intensive commodity industry like dairy makes a few people rich, but doesn’t translate well into making the economy grow in a profitable way. Most of the value goes directly offshore in the form of interest payments and dividends.

      The governments almost sole focus on dairy over the last few years has meant that they haven’t been concentrating on things that are in our long term interests. Like being able to upskill our other export industries and provide taxable jobs.

      • Colonial Viper 7.4.1

        We’re basically exporting the real wealth of nitrogen and phosphorus from our soils in exchange for digitally created electronic currency. And in many places, the nitrogen and phosphorus which was in our soils is already all gone, so we’re having to import it from Asia, in order to send it back to Asia. Nuts.

      • lprent 7.4.2

        Looks like Phil Goff gave a excellent speech on much the same issues. Have a read of that. I posted it

      • Draco T Bastard 7.4.3

        in a tragedy of the commons,

        Goddamn it, it’s not a Tragedy of the Commons but a Tragedy of Privatisation. Privatisation and enclosure removed the rules that the commons would normally be operated under allowing the new land owners to do whatever they liked because the government has been too scared and/or ideological to put in place rules telling the farmers what standards that they need to maintain which has resulted in the poisoning of our waterways.

  6. Enough is Enough 8

    Bring on the crash.

    This could be the game changer the left needs. Fingers crossed for the next auction.

  7. Once was Tim 9

    Given that there’s a very obvious trend in prices downward (and I’m just now listening to RNZ’s sage – Jenny Ruth), and given that we’re told we’re subject to ‘intaneshnool proicizz in the global virunmint), just when can we expect that will be reflected in the price of milk in the hypermarket?
    Not anytime soon I bet! No no no – instead, the NZ consumer (economic unit) will be used as much as ‘the market’ can withstand, to prop things up.
    As you were …. buzzniss ez USE u all

  8. dave 10

    All nationals cards were put in one industry one market
    There signs China’s property bubble has popped as well the log prices have plummeted slippery will dismiss of course nats will carry on the denialism all is well with the world blame the poor for being poor

  9. Kevin Welsh 11

    How long before we get dairy based products imported from China? Cheaper butter, cheese, milk etc.

    • srylands 11.1

      Which is why it is stupid to impose a Carbon Tax on our dairy industry. It simply pushes production to a country with higher emissions.

      • KMB 11.1.1

        You mean which is why it’s stupid to put all our eggs in one basket.

        • Nakiman 11.1.1.1

          “You mean which is why it’s stupid to put all our eggs in one basket.”
          It sounds like you are blaming the government for Fonterra being the back bone of New Zealand. The Lefty extremists dont want growth or new industry.

          • One Anonymous Bloke 11.1.1.1.1

            You see: a classic example of the mindless repetition of rote-learned slogans.

            Never mind that per capita GDP is always higher when the left is in power, just make up some slur and repeat ad nauseam.

            It makes you appear profoundly stupid and what does it say about the Left? Nothing.

          • One Anonymous Bloke 11.1.1.1.2

            When the PR guy from Federated Farmers agrees that the time has come to consider capping the dairy herd, is he a Lefty extremist too?

          • framu 11.1.1.1.3

            wrong again – its not about what fonterra does or doesnt do per se – its about the way the govt views fonterra in relation to its economic agenda and vision

            The govt treating fonterra as their one and only economic angle isnt fonterras fault is it

            • Nakiman 11.1.1.1.3.1

              “The govt treating fonterra as their one and only economic angle isnt fonterras fault is it”
              The government don’t treat Fonterra as their one and only economic angle. They promote other lucrative industry like oil , mining and even recovering millions$ worth of dead native timber but the lefty extremist economic vandals would prefer to let it rot and import this hard wood.

              • One Anonymous Bloke

                “Promote” – you mean subsidise at everyone else’s expense.

                Measuring the (ephemeral as it turned out) benefits and ignoring the costs is not good business, but I don’t expect you to grasp that, blinded as you are by dogma.

              • McFlock

                lol

                fascinating how your list only includes extractive and polluting processes. Nothing sustainable in that list, nothing that involves NZers adding brain value.

                And everything in your list added together is a tiny fraction of fonterra’s revenue.

          • KMB 11.1.1.1.4

            Don’t be a ning nong nakiman. I’m blaming the government for concentrating on one industry and ignoring others which are (or could be) productive e.g. funding expensive irrigation schemes for dairy farmers but not wanting to spend a relatively paltry amount to restore the railway line to Gisborne for the benefit of the growers in that area. Or giving away lucrative contracts to China instead of supporting local engineering businesses (Hillside railway workshop). There are probably heaps of other examples of the obsessively narrow focus and short term thinking of this government.

      • One Anonymous Bloke 11.1.2

        Bollocks. Companies adapt to the regulatory environment they’re presented with. If you can’t conceive of a profitable dairy operation with a reduced carbon footprint that’s your problem, so please, leave the country, we have enough dead wood as it is.

    • Colonial Viper 11.2

      If they can do it for Watties tomato sauce why not.

  10. Seti 12

    Yes, but China still faces hurdles in large scale dairy, particularly with disease, water and arable land –

    …For a sector, which is still plagued by biosecurity threats including foot and mouth disease, that is a definite need.

    There was a major outbreak in 2005 as the disease spread through eastern China, including to Beijing and Hebei where Fonterra’s first farming hub has recently been completed.

    Dairy herd numbers collapsed last year, as the population dropped from a high of 8-10 million in 2012, down to 6-8 million in 2013.

    The plunge in livestock numbers has been attributed to high feed prices and further outbreaks of foot and mouth and has caused a 20 per cent drop in domestic milk production.

    The need for cattle feed as industrial scale farming ramps up will continue to escalate. The Chinese Government is aiming for 95 per cent self-sufficiency in overall grain production but output is struggling to catch up and China continues to look overseas to meet the shortfall.

    In 2012, more than 460,000 tonnes of alfalfa was imported to China – 95 per cent from the United States at a cost of $200 billion.

    For a sense of scale, China’s largest dairy feed company Wellhope Ruminant produces 96,000 tonnes per year. There is a shortage of arable land suitable for growing crops and a looming water crisis further compounds matters.

    Four hundred cities in China face water shortages, 100 of which are facing serious scarcity. Rampant economic growth has driven water requirements, with agriculture accounting for 62 per cent of demand for water resources.

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11238070

    • One Anonymous Bloke 12.1

      Are you implying it is a huge risk to put so many of our eggs in this unstable and poisonous basket?

      • Seti 12.1.1

        Not necessarily.

        Water scarcity in big food-producing nations like China is worsening, and many farmers are increasingly tempted to shift production from food to bioenergy, a popular option to cut emissions of climate-changing greenhouse gases.

        Climate change is worsening the situation, as more frequent extreme weather events devastate crops.

        In the past three years, Australia, Canada, China, Russia and the United States have all suffered big harvest losses from floods and droughts.

        http://www.stuff.co.nz/world/9811953/Food-shortage-a-risk-to-world-security-UN

        Perhaps we need to diversify within the industry to maximise opportunities when climate change presents them.

        • One Anonymous Bloke 12.1.1.1

          We also need to be aware that the political instability that is one of the expected consequences of AGW will potentially destroy our export markets altogether. Not that the demand will cease, more that the social and physical infrastructure will fail.

          As you say, we can plan to make hay while the sun shines, but there has to be a plan b, and c, d, and e for that matter; the diversification planning you mentioned must include negative as well as positive scenarios.

  11. Graham 13

    So now all that’s left is to pray for an economic downturn to give l

    • lprent 13.1

      Always nice to see someone with such myopic vision. Perhaps you should read Phil Goff’s speech which goes into more detail about the strategic economic risks

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  • GUEST BLOG: Kate Davis – The post election postmortem is giving me post p...
    I feel the need to contribute to the discourse. This is a new experience for me. Not having an opinion, but expressing it on a popular forum in a public sphere. That’s why I have waited till now and put...
    The Daily Blog | 26-09
  • A dictionary of education terms and definitions, brought to you by the let...
    Free to all TDB readers, please enjoy your very own cut-out-and-keep handy primer of terms that I predict you will need to know over the next three years… Achievement Gap (noun) Synonym for wealth gap. ACT (abstract noun) Intangible. Reported to exist in...
    The Daily Blog | 26-09
  • A Mines Rescue brigadesman’s perspective on the Pike River Mine
    My husband and I lived in Greymouth in 2010, we were a coal mining family.  The day Pike River Mine blew up and the days following changed us profoundly, as it did for so many.  This is a Mines Rescue...
    The Daily Blog | 26-09
  • The Left Triumphant! A Counterfactual History of the Last Twelve Months.
    DID IT REALLY HAVE TO END LIKE THIS? Reading through the commentary threads of the left-wing blogs it is impossible to not feel the anger; the sense of betrayal; the impression of having had something vital ripped from their grasp;...
    The Daily Blog | 26-09
  • GUEST BLOG – Myles Thomas: The media won it!
    Make no mistake, John Key is a clever communicator – reasonable, authoritative and relaxed – but without the media he wouldn’t be PM. Depending on your viewpoint, New Zealand’s news media are either a bunch of Grey Lynn lefties or...
    The Daily Blog | 25-09
  • Not Learning Lessons Past: the West’s Response to IS
    In an earlier posting Ukraine, United Kingdom, Ireland, Scotland, I noted that the first lesson of conflict learned by Robert McNamara was “understand your adversary”. If we have honourable objectives, our first and most important weapon is empathy. In the Vietnam War,...
    The Daily Blog | 25-09
  • GUEST BLOG: Dr Jarrod Gilbert – Proof of David Farrar’s deception: my ...
    In the lead up to the election the Minister of Corrections Anne Tolley launched a gang policy. In order to justify the government’s approach she used gang figures that overstated the gang problem. Not by a little bit, but a...
    The Daily Blog | 25-09
  • SPECIAL FEATURE: Stuart Nash – Red To The Rescue?
    SPECIAL FEATURE by Selwyn Manning. IF THE ELECTION RESULT which was dished out to Labour was not enough to incite an immediate leadership primary, then the caucus’ refusal to recognise David Cunliffe as the leader should cement it. Now is...
    The Daily Blog | 25-09
  • Has the one party state crackdown begun already? Left wing NZ activist grou...
    Well known left wing activist social media group, ‘John Key Has Left Down NZ’ has been shut down on Facebook. At 11.40pm last night, Facebook, without any warning shut the group down siting a breach of terms of service as...
    The Daily Blog | 24-09
  • Why Cunliffe should probably just let Nash & Robertson win
    We have to face some very unpalatable home truths. If you are a left wing political person, best you put your vote now to the Green Party, although you’ll have to do that all the while the Greens frantically tell you...
    The Daily Blog | 24-09
  • The graceless win of Kelvin Davis
    The graceless win of Cameron Slater’s mate in the North, Kelvin Davis is difficult to swallow. Here Cameron Slater’s mate in the North is shitting on Hone Harawira by calling Hone all steam, no hangi as Kelvin rubs his ganged up win into...
    The Daily Blog | 24-09
  • So Labour shifted too far to the left?
    So Labour shifted too far to the left?   Here’s the ill-judged view of Josie Pagani in the Pundit “Labour must change”: “At the last election I made myself a heretic when I wrote a column mentioning how unpopular the...
    The Daily Blog | 24-09
  • Uncomplicated Loyalties: Why Cunliffe and the Labour Left Cannot Win
    THE STORY of David Cunliffe’s leadership of the Labour Party has been one of missed opportunities and unforced errors. That he was the only choice available to those who wanted to rid the Labour Party of its neoliberal cuckoos is...
    The Daily Blog | 24-09
  • So we can expect this now?
    So we can expect this now?...
    The Daily Blog | 23-09
  • Can Labour be saved? Why Whaleoil & National won and why we need a new ...
    As the shock of my optimism that NZers would recoil from the real John Key as exposed by Dirty Politics and mass surveillance duplicities wears off, I am surprised to find that the right in NZ are not content with...
    The Daily Blog | 23-09
  • Three more years (up shit creek and paddling hard)
    “If the future is not green, there is no future. If the future is not you, there is no future”. Emma Thompson’s stirring words to the climate marchers in London last Sunday are worth considering in the aftermath of the...
    The Daily Blog | 23-09
  • One Party State
    In years to come this election will be seen as a historic turning point towards one party rule. I don`t mean this literally, absolute single party dictatorship is not in prospect. In the New Zealand context though, one party has...
    The Daily Blog | 23-09
  • No More. The Left Falls.
    . We cannot be beaten down Because we are down already. We can only rise up and if you should beat us down, We will rise again. And again. And again… And when you tire of beating us down, We...
    The Daily Blog | 23-09
  • Hang tight everyone – Marama Davidson campaign reflection
    To the many people who had expressed their overwhelming support for me to enter Parliament this election – thank you. That the Greens held steady in a big loss for progressive politics is an achievement. We are hopeful that after...
    The Daily Blog | 22-09
  • Speaker leads delegation to CPA Conference
    Strengthening New Zealand’s ties with parliaments from across the world will be the focus of the upcoming delegation to the 60th Commonwealth Parliamentary Association (CPA) Conference in Yaoundé, Cameroon from 4-10 October and the 131st Inter-Parliamentary...
    Scoop politics | 02-10
  • Response to Russell Brown and Tertiary Education Union
    The allegation that I have worked with others to discredit public health efforts is wrong. My public comments in relation to public health researchers have been where academics have mislead the public about official support or endorsement, and where...
    Scoop politics | 02-10
  • 17 jobs lost as Bridon/Cookes reaches the end of its rope
    Seventeen workers at the iconic Bridon/Cookes wire rope company in Auckland are to be made redundant as the company ceases production in New Zealand. The company has blamed the high New Zealand dollar for making it uncompetitive to keep the...
    Scoop politics | 02-10
  • Slip in University Rankings – Funding Not the Problem
    Responding to the slippage of New Zealand universities' rankings , Jordan Williams, Executive Director of the Taxpayers’ Union says:...
    Scoop politics | 02-10
  • Time to rethink police chases, says safety campaigner
    Police chases are dangerous and generally unnecessary, says the American Federal Bureau of Investigation....
    Scoop politics | 02-10
  • Robertson now expected to be Labour leader by Xmas
    Grant Robertson is now overwhelmingly picked to become the next leader of the Labour Party by the end of the year, according to the combined wisdom of the 8000+ registered traders on New Zealand’s predictions market, iPredict. Another potential Labour...
    Scoop politics | 01-10
  • Documenting historic Māori land law cases for the first time
    A new book from Victoria University of Wellington’s Faculty of Law will continue to put the spotlight on Māori Land Law judgments which have never before been published....
    Scoop politics | 01-10
  • ‘Oily’ people greet Petroleum Summit diners
    Greenpeace activists smeared in fake oil have greeted guests arriving at the part-Statoil sponsored Petroleum Summit dinner this evening....
    Scoop politics | 01-10
  • Key Decisions Made About Labour’s Leadership Election
    Labour’s New Zealand Council has made the key decisions about the timetable and process around the election of Labour’s Party Leader. The result will be announced on Tuesday 18th November, following a comprehensive and extensive process unique...
    Scoop politics | 01-10
  • Suspected $6 Million Dollar Wananga Fraud Alarming
    The Taxpayers’ Union is calling on on the Te Whare Wananga o Awanuiarangi to front up over claims the Wananga has pocketed government overpayments amounting to $6 million of taxpayers' money. Jordan Williams, Executive Director of the Taxpayers’ Union...
    Scoop politics | 01-10
  • Submissions sought on herbicide for weed control in maize
    The Environmental Protection Authority is calling for submissions on a herbicide to improve broadleaf weed control in maize. The substance CADET contains 100g fluthiacet-methyl in the form of an emulsifiable concentrate and would contain a new active ingredient...
    Scoop politics | 01-10
  • Jesse Mulligan Lives Below Poverty Line
    Jesse Mulligan Lives Below Poverty Line TV personality Jesse Mulligan will live on the equivalent of the extreme poverty line this October in order to raise awareness of sex trafficking. Mulligan will survive on $2.25 for his food from October...
    Scoop politics | 01-10
  • Narratives from the 2014 Election: What do we learn?
    Narratives from the 2014 Election: What do we learn? - Sue Bradford, Russell Brown & Kirk Serpes discuss....
    Scoop politics | 01-10
  • Voices from Oceania to speak out on climate change
    Voices from Oceania to speak out on climate change at launch of Pacific environment report...
    Scoop politics | 01-10
  • Changes to Pacific Tsunami Warning Centre messages
    The Ministry of Civil Defence & Emergency Management advises that while changes to Pacific Tsunami Warning Centre messages come into effect from today (Wednesday 1 October), the Ministry has been, and remains, the authoritative voice for tsunami...
    Scoop politics | 01-10
  • Police remove banner at Statoil Offices in Wellington
    Oil Free Wellington hung a banner at 9:30 this morning at the Statoil office headquarters in Wellington as the Petroleum Summit opened in Auckland. The banner, which read 'Statoil out of Northland: Stop Deep Sea Oil', has now been removed...
    Scoop politics | 01-10
  • Mixed massages raise concerns
    Mixed massages raise concerns for Te Taumata Kaumatua Ngapuhi nui tonu, and Te Wakaminenga O nga Hapu Ngapuhi....
    Scoop politics | 01-10
  • Union Slams Port Boss’s Pay Rise
    The Rail and Maritime Transport Union (RMTU) says Lyttelton Port CEO Peter Davie’s 18% wage rise, taking his pay packet to $1.24m, is unjustified and inflammatory. ‘Lyttelton port has an appalling health and safety record, with three deaths on...
    Scoop politics | 30-09
  • Prisons expert Ron Nikkel to speak in Auckland October 15
    Prison Fellowship NZ and JustSpeak have the privilege of hosting the former president of Prison Fellowship International, Ron Nikkel....
    Scoop politics | 30-09
  • Hundreds of educators protest IES in Rotorua
    Four hundred educators from around the country took their opposition to the Government's controversial Investing in Educational Success policy to the public today....
    Scoop politics | 30-09
  • Crime drops by 3.2 % in the 2013 / 2014 financial year
    Criminal offences dropped by 3.2 % in the last financial year according to figures released today through Statistics New Zealand....
    Scoop politics | 30-09
  • Narratives from the 2014 Election: what do we learn?
    I would like to invite you to a Fabians Reflection on "Dirty Politics, Dotcom and Labour’s worst result" with Colin James, Keith Ng, Stephanie Rodgers and Richard Harman. They will provide a debrief of analysis and lessons from the 2014...
    Scoop politics | 30-09
  • Oil Free Wellington drops banner from Statoil headquarters
    Today members of Oil Free Wellington have targeted the offices of Statoil, by attaching a banner reading 'Statoil out of Northland: Stop Deep Sea Oil' to the entrance of Vodafone on the Quay Midland Park, where Statoil's New Zealand office...
    Scoop politics | 30-09
  • Media Statement from Karen Price
    “After a period of intense media attention and scrutiny of our family, I set up and used an anonymous Twitter account over the weekend and made a number of comments that I deeply regret....
    Scoop politics | 30-09
  • Greenpeace disrupts Simon Bridges’ speech to oil industry
    Greenpeace activists have disrupted the opening speech by Energy and Resources Minister Simon Bridges at the Petroleum Summit in Auckland this morning....
    Scoop politics | 30-09
  • New Zealand Red Cross Responds to Drought in Tonga
    New Zealand Red Cross has sent an aid worker and two desalination units, to turn seawater into safe drinking water in the drought-hit Ha’apai islands of Tonga....
    Scoop politics | 30-09
  • Can you ever tell if an email is real or forged?
    Computer industry veteran Brian Eardley-Wilmot warns that we should never take claims about stolen emails at face value....
    Scoop politics | 30-09
  • NZ MPs to attend the ASPG Annual Conference in Sydney
    New Zealand MPs to attend the Australasian Study of Parliament Group Annual Conference in Sydney...
    Scoop politics | 30-09
  • Independent Maori seats still needed in Parliament
    “He’s got to be joking!” is the reaction of the president of the Maori Party, Rangimarie Naida Glavish to a call by a former Labour Minister of Maori Affairs, Dover Samuels, for debate by Maori on whether the Maori electorates...
    Scoop politics | 30-09
  • Support for Democratic Rights in Hong Kong
    Rallies supporting the rights for universal suffrage will take place all over New Zealand today and tomorrow...
    Scoop politics | 29-09
  • Trout Mass-Poisoned in New Zealand
    Trout Mass-Poisoned in New Zealand The Graf Boys New Zealand has some of the best trout fishing in the world! Every year thousands of international visitors wade pristine rivers in search of the freshwater game fish....
    Scoop politics | 29-09
  • New Zealand’s 2014 Hottest Vegetarians Crowned
    With winter gone things are heating up, and things just got even hotter with the crowning of New Zealand’s hottest vegetarians, says animal advocacy group SAFE. Marking World Vegetarian Day, 1st October, director James Napier Robertson and actor...
    Scoop politics | 29-09
  • A day to remember our duty to look after our senior citizens
    Human Rights Commissioner Dr Jackie Blue says International Day of the Older Person (1 October) is a United Nations day to celebrate our senior citizens, but also acknowledge the need to protect our kaumatua, or older people from abuse and...
    Scoop politics | 29-09
  • Clear data needed on impact of benefit sanctions on children
    A lack of data on benefit sanctions means there is no way of knowing whether welfare reform is helping or harming children, says Child Poverty Action Group....
    Scoop politics | 29-09
  • The socialist alternative to austerity and war
    Public meeting: After the New Zealand election—the socialist alternative to austerity and war By Tom Peters 29 September 2014...
    Scoop politics | 29-09
  • New recruits to boost border protection
    Twenty six new recruits began an intensive nine-week training course in Auckland today that will see them graduate as Customs officers in time for the busy summer season....
    Scoop politics | 29-09
  • Dwindling Mallard population shows up ‘pest’ myth
    The pro hunting organisation Fish & Game is researching the causes of the decline of the mallard duck population, upset at the prospect of fewer ducks to kill....
    Scoop politics | 29-09
  • Support for Democratic Rights in Hong Kong
    New Zealanders in Auckland will gather on Wednesday to support the rights for universal suffrage in Hong Kong....
    Scoop politics | 29-09
  • Campbell Live Exclusive Interview with David Cunliffe
    David Cunliffe resigned as leader of the Labour party on Saturday; but he still wants the top job....
    Scoop politics | 29-09
  • Action needed on cycling safety
    “Clearly we aren't doing enough to protect the 1.5 million New Zealanders who ride bikes,” said Mr Morgan....
    Scoop politics | 29-09
  • World Rivers Day Passes Without A Whimper
    Sunday 28 September was World Rivers Day to celebrate clean, flowing rivers and caring about them. But a recreation-conservation advocacy the Council of Outdoor Recreation Associations of NZ (CORANZ) says the day seems to have slipped by without...
    Scoop politics | 29-09
  • The Kiwifruit Claim: Q&A
    1. Who is running The Kiwifruit Claim? The Kiwifruit Claim was founded by kiwifruit growers representing well in excess of 10% of the industry. 2. Why are you running this claim? The introduction of Psa into New Zealand had devastating...
    Scoop politics | 29-09
  • Fed Farmers Need to Be Weaned
    The Taxpayers’ Union is calling on Federated Farmers to make a firm commitment to reject any future Government funding, after it was revealed that the lobby group had received over $200,000 of payments in recent years....
    Scoop politics | 29-09
  • Children paying the price for charter school stitch up
    New Zealand children will be paying a high price for a one-seat deal between ACT and National, with an expansion of the beleaguered charter school system says education union NZEI Te Riu Roa....
    Scoop politics | 29-09
  • Hikoi From North Reaches Oil Conference Tomorrow
    Today: The Hikoi opposing Statoil plans for seismic testing and deep sea oil drilling has marched through Dargaville and later be welcomed to Piringatahi Marae, West Harbour,Tamaki Makaurau/Auckland....
    Scoop politics | 29-09
  • Communities Still Count
    The efforts of many organisations to influence the electorate and the political parties they voted for in the lead up to the 2014 Election is over. The voting public has spoken and provided a strong endorsement to the centre-right National...
    Scoop politics | 29-09
  • Eleven social enterprises get ready to take off
    Eleven teams from across the country will take part in the Launchpad, Ākina’s programme to get social enterprise ideas off the ground....
    Scoop politics | 29-09
  • An open letter to the Prime Minister
    in which Transparency International New Zealand asks the Prime Minister to ensure integrity underpins all work he leads "in the best interests of all New Zealanders"...
    Scoop politics | 29-09
  • Paula Bennett ‘great work’ acknowledged – McVicar
    “Paula Bennett, as Minister of Social Development, has contributed significantly in lowering our crime rate and preventing further victims.” - McVicar...
    Scoop politics | 29-09
  • Key’s Restraint in Propping up ACT Welcomed
    The Taxpayers’ Union is welcoming the announcement that ACT MP David Seymour will not be appointed as a Minister....
    Scoop politics | 29-09
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