Current controversies about exporting water, be that in bottles or in bulk tankers, draw attention to New Zealand’s key resource. Yes, that resource is indeed water. In a world that is chronically short of water, we in New Zealand are greatly blessed.
It is because we are so blessed that until recently we have taken the presence of water for granted. Essentially it has been a free resource. As a consequence, water law in New Zealand is real messy. And that leads to major impediments to water being used efficiently, and in ways which the different groups in society can agree on as being ‘fair’. Continue reading
For the last two years, Bellamy’s organic infant formula out of Australia has been one of the two rising stars of the Chinese infant formula market. The other has been ‘a2 Platinum’ produced here in New Zealand by Synlait for The a2 Milk Company (ATM).
In recent weeks, the Bellamy’s business has run badly off the tracks. This has sent jitters more widely through the infant formula industry. Continue reading
Fonterra has recently announced new price premiums for winter milk as from the winter of 2017. It has done this quietly, without any press release, in an email to all of its farmer suppliers.
Fonterra says it has ‘taken a fresh look at winter milk’ given increased demand caused by the success of its international value-add and food service businesses. These markets need to be serviced 12 months a year. Continue reading
Fonterra’s recent upgraded estimate of $6 per kg milksolids (fat plus protein) for the 2016/7 milk price has been welcomed by everyone in the industry. Given that it is only six months since Fonterra’s initial for this season of $4.25, the current estimate should also remind us of the impossibility of predicting milk prices with any accuracy.
This level of inaccuracy is typical of the last three years, where Fonterra’s initial estimates compared to the final price were out by $1.40 in 2014, $2.60 in 2015 and $1.35 in 2016.
Currently, we are about half way through the milk season in terms of production, and most companies will have sold about half of their total seasonal production. With some forward selling, they may even be ahead of this. It is about this stage of the season that I bring in my price-range estimate to about $1.80 (i.e. plus or minus 90c around a mid-point). Continue reading
Chinese infant formula imports are now worth more than twice the value of whole milk powder (WMP) imports. According to Italian information analysis company CLAL, infant formula imports to China for the first nine months of this year had a landed value of US $2.1 billion, whereas WMP imports were valued at only $US 0.87 billion. This was despite the WMP volumes being more than double those of infant formula. On a per kilo basis, the infant formula had a landed value of US $12.63 whereas the WMP was valued at US $2.52.
New Zealand is the dominant supplier of China’s imported WMP, with more than 90% market share. However, New Zealand is only a small player in the infant formula market, with 11% of Chinese imports. Continue reading
America’s dairy industry, and also American fruit and vegetable production, will be seriously hit if incoming President Trump aligns his actions with pre-election rhetoric. These industries rely on officially undocumented Hispanic labour, from Mexico and further south, to do much of the hard work.
Mr Trump has said he is going to send 11 million undocumented immigrants back over the border. However, cool heads from these industries will be trying in the next few weeks to get in Mr Trump’s ear to alert him to some of the economic implications. Quite simply, many of the big farms with more than 1000 cows, which now supply more than half of America’s milk, will be in turmoil without these workers. Continue reading
In late 2015, the New Zealand Government made a commitment at the Paris climate negotiations that by 2030 New Zealand will reduce greenhouse gas (GHG) emissions by 30 percent compared to the 2005 levels. This overall commitment includes methane and nitrous oxide emissions from agriculture. These agricultural emissions are converted for carbon-accounting purposes to the equivalent tonnes of carbon dioxide. The daunting and unique challenge for New Zealand is that agriculture emissions comprise some 50 percent of total emissions. Continue reading