Outflanked
OPINION: Greenpeace tried its best to disrupt Fonterra’s annual meeting at a hotel in New Plymouth earlier this month, but they were outflanked by a formidable team of Fonterra staff, security officers and Taranaki police.
A European Union diplomat says EU farmers cannot be blamed for low farmgate milk prices.
Eva Tvarozkova, deputy chief of mission of the delegation of the EU to New Zealand, rejects suggestions that the decline in dairy prices in NZ results directly from subsidies paid to EU farmers.
Tvarozkova told Rural News the oversupply of milk in the global market has several causes.
She notes that NZ is a small economy easily affected by external shocks or changes in global markets.
In its June Global Dairy Update, Fonterra noted that milk production in Australia and NZ was down 3% for the year ending April 2016.
However, EU production in March increased 7% versus the same month last year. Production for the 12 months to March increased 4% vs the same period the previous year. This is despite falling local milk prices going below the level seen in the same period
last year. Contributing most to production growth are Ireland (+19%), Belgium (+14%), the Netherlands (+12%), Denmark (+6%) and Poland (+5%).
Fonterra says dairy prices will rebound once milk growth eases in Europe when demand overtakes supply.
But Tvarozkova points out the biggest driver of oversupply: the effective Russian ban on EU and other western countries' dairy products.
"All dairy production that was supposed to go to Russia needs to go somewhere else. Ultimately this creates oversupply in the global market, given that Russian is a significant importer of dairy."
Another drag is the slowdown of the Chinese economy, a key dairy market for NZ, also weighing on ourdairy prices. "The volume supposed to go to China needs to go somewhere else, so demand is decreasing."
Tvarozkova accepts that EU farmers have been free to produce any quantity of milk they wish since EU milk quotas ended in April 2015. But she insists EU dairy farmers are not subsidised according to production
"The sort of aid to farmers that used to exist has significantly decreased and is completely decoupled from production," she says. "It means under the new CAP framework there is no incentive for overproduction by dairy farmers."
The lower prices equally lamented in the EU and NZ result from all these global dairy market factors "and clearly cannot be blamed on any sort of overproduction by EU farmers," she says.
Departing Fonterra director Leonie Guiney is urging the next generation of co-operative farmers to step up and be there to lead in future.
A work in progress is how Farmlands chair Rob Hewett describes the rural trader's 2024 annual results.
A net zero pilot dairy farm, set up in Taranaki two years ago to help reduce on-farm emissions, is showing promising results.
Chinese buyers are returning in force to replenish stocks and helping send global dairy prices higher.
New DairyNZ chair Tracy Brown says bipartisan agreement among political parties on emissions pricing and freshwater regulations would greatly help farmers.
Prime Minister Christopher Luxon says the relationship between New Zealand and the US will remain strong and enduring irrespective of changing administrations.
OPINION: NIWA has long weathered complaints about alleged stifling of competition in forecasting, and more recently, claims of lack of…
OPINION: Adding to calls to get banks to 'back off', NZ Agri Brokers director Andrew Laming has revealed that the…