Make it 1000%!
OPINION: The appendage swinging contest between the US and China continues, with China hitting back with a new rate of 125% on the US, up from the 84% announced earlier.
China is likely to remain the largest export market for New Zealand dairy products – but watch out for competition from Australia, a new report warns.
The immense size of the Chinese market and increasing westernisation of consumer diets means it will remain our largest market.
“However, NZ dairy producers are likely to endure increasing competition from other dairy-producing nations attempting to expand their share of the Chinese market,” says a report on the NZ ‘Cheese, butter and milk powder manufacturing industry’ by business research company IBIS World.
“For example, dairy producers in Australia are likely to increase their focus on the Chinese market over the next five years, as tariffs are gradually reduced as part of a free-trade agreement signed between Australia and China in 2015.
“Given Australia’s reputation as a producer of high-quality agricultural products, Chinese consumers are likely to view products exported from Australia similarly to those produced in NZ, which may increase competition and constrain industry revenue growth from this market over the period.”
Annual revenue for the NZ cheese, butter and milk powder industry stands at a yearly $17.2 billion. Annual growth from 2018-23 is forecast at 1.5% versus annual growth from 2013-18 of 0.5%.
Profit margins in the cheese, butter and milk powder industry are projected to rise over the next five years.
“Recovering prices in export markets should allow processors to lift their margins, particularly on non-commodity products like premium cheeses and specialty butters.
“However, margins on some products, such as bulk-packaged milk powder, are likely to remain fairly stable over the period. The high volumes of stockpiled milk powder in key markets will likely take years to depleted, meaning prices for these products are likely to take longer to recover than other dairy product prices.”
Fonterra is likely to remain the dominant player in the industry, given its immense size compared with other players, the IBISWorld report says.
“However, a small proportion of dairy cattle farmers are likely to sell their interests in the co-op in pursuit of better prices and contract terms.
“This will reduce the supply of raw milk to Fonterra and is expected to constrain the co-op’s growth over the next five years. The trend of dairy farmers turning away from Fonterra is likely to continue to entice potential players to enter the industry. Consequently, enterprise numbers are forecast to increase over the five years to 2022-23, although at a slower rate than over the past five years.”
Industry employment is also forecast to rise slowly.
Recent rain has offered respite for some from the ongoing drought.
New Zealand's TBfree programme has made great progress in reducing the impact of the disease on livestock herds, but there’s still a long way to go, according to Beef+Lamb NZ.
With much of the North Island experiencing drought this summer and climate change projected to bring drier and hotter conditions, securing New Zealand’s freshwater resilience is vital, according to state-owned GNS Science.
OPINION: Otago farmer and NZ First MP Mark Patterson is humble about the role that he’s played in mandating government agencies to use wool wherever possible in new and refurbished buildings.
For Wonky Box co-founder Angus Simms, the decision to open the service to those in rural areas is a personal one.
The golden age of orcharding in West Auckland was recently celebrated at the launch of a book which tells the story of its rise, then retreat in the face of industry change and urban expansion.
OPINION: Should Greenpeace be stripped of their charitable status? Farmers say yes.
OPINION: After years of financial turmoil, Canterbury milk processor Synlait is now back in business.