Dairy processors welcome GCC free trade deal
New Zealand dairy processors are welcoming a new free trade deal with the country’s second largest market.
That's the message from Malcolm Bailey, chairman of the Dairy Companies Association (DCANZ).
The companies say they don’t like the unease “sitting around the dairy sector at the moment”. They know they can’t have good ongoing sustainable business unless their farmer suppliers are doing well.
But farmers may fairly take encouragement from the world markets and trends being basically in their favour.
Malcolm Bailey says the uncertainty faced by farmers is caused by, for example, Government policies on trees, water quality and water access and the response to climate change.
The companies want the farmers to meet these challenges and position NZ in a better place because we have a lot of key customers looking for product to buy, Bailey says.
“The key thing is to get the balance right in making progress on these big ticket issues which are global in the case of climate change, and to make sure we have a viable economic pathway forward in NZ.”
He says NZ can have little influence in resolving the kind of problems that contribute to global uncertainty, notably the stand-off between China and the US.
But NZ would do well to remember that the world’s growing population needs a lot more food, especially the nutritious dairy NZ produces.
“Irrespective of what we might think are crazy carryings-on, we are in a good position to meet that demand,” Bailey says.”Yes, interruptions will cause uncertainty that tends to lead to lower prices. But I don’t see that as a long term outcome.”
Bailey says in the future prices will rise because of the various constraints globally in other countries, e.g. the lack of land for food production and a lack of water.
In contrast to this, NZ is well placed, he says.
“I am very confident about the long term picture.”
