In an ever increasing global trading market, and a very competitive enviroment, it is important to be reminded where our competitive advantage is, and focus on that.
Low cost grass production with a low labour input seems to be where NZ farmers excel. Maximising our advantage with our temperate climate that grows low cost grass gives us an advantage in the global food market.
The Co-Operative structure which dominates the dairy industry should also not be taken for granted, although sheep and beef farmers may well ask, why does it not perform better for them. Delegates at the SIDF event were asked to think about these issues last week.
Low-cost production and cooperative structures are NZ's competitive advantages in dairy and we give them up at our peril, one of the countrys leading researchers since the 1970s told delegates at last week’s South Island Dairy Event reports Rural News.
“What is our competitive advantage? It is our ability to produce milk at low cost,” former Massey University professor, now consultant, Colin Holmes says.Our climate gives us a natural advantage to do that, and our cooperative industry structure capitalises on it, ensuring income remains in NZ.
“Co-ops are enormously valuable to NZ. I sometimes wonder if Government and MAF understand the value of co-ops to this country...
“If I’m an overseas investor I want to get my money where I want it, which is my home, not your home.” Without a significant cooperative presence payouts would tumble too, he warns.
“If you don’t own your company, you become an item of cost in the accounts of the non-dairy investors and you can easily become a peasant farmer, and I’ve seen this in many countries.” Every share cashed in is “like a chip in the foundation of the co-op”.
New Zealand cows outdoors, on pasture, probably only milked once a day, is the recipe to produce milk at the lowest cost, says Holmes. Indoor systems, such as those proposed in the Mackenzie Basin, cannot possibly compete with similar massive operations on the doorstep of major consumer markets such as Brazil or Britain.
1 Comments
goldenfox, you state that AFFCO and CMP all pay more for lambs and cattle, but where is your proof. Since starting this site both these companies have refused to publish schedules that would prove your statement that these companies pay more. We would be happy to publish evidence of this advantage if you can access it!!Also AFFCO's dividends have been missing in the last while!! Alliance has paid dividends for years. One of the problems in my opinion in the meat industry is the trust between supplier and processor. Transparency in schedule publication will go a long way to set the industry benchmarks, and rekindle trust amongst the suppliers.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.