Allan Barber reports on a ‘pommie farmer whinge’ about lamb competition from NZ, subsidy problems, land use changes, and the milk price

By Allan Barber

While in the UK briefly last week I spent a couple of nights with an old university friend who actually got a First in Agriculture at Cambridge which was the best degree achieved by any of my friends or, not surprisingly, me.

He farms near the M4 in Berkshire less than 100 kilometres from London.

As usual when I see him, we were chatting about the state of agriculture in our respective countries.

He asked me whether I needed a ‘pommie farmer whinge’ to provide some material for a column, so not unnaturally I told him to go ahead. His first complaint was about the amount of New Zealand lamb competing with British lamb in the supermarkets.

I suggested the view back home was the natural seasonal fit of New Zealand product didn’t really cut across, but rather complemented, the seasonal availability of British lamb.

He partly agreed with me on this, but said the British sheep farmer would still prefer it if the competition from our lamb didn’t exist.

I was able to provide some reassurance here by telling him how China had come from nowhere to be the biggest market by volume, if not value, for New Zealand lamb which meant there was progressively less being exported to the UK than was the case even 12 months ago.

An aside here which I discovered soon after getting back at the weekend: apparently sales of stockinette are back up to levels last seen in the 1980s when most New Zealand lamb exports were shipped in carcase form. This is clearly a direct consequence of the increase in sales to China, so while we can be pleased with the diversification from our traditional markets, we should be less excited by the return to a product form from the 1980s.

As a crop farmer who has a contract with a contractor on a similar profit share basis to our share milking model, my friend is frustrated by the delay in setting the basis for the current season’s EU subsidy.

While we may think he’s lucky to be receiving a subsidy at all, as I told him, his frustration is understandable, because until he gets this information, he can’t confirm the profit share with his contractor.

Interestingly his calculations indicate that this year’s profits will be higher than last year, in spite of a lower price. This is because the yield this year is so much better than last. After a very wet start to 2014, the weather has been much more favourable and this year’s crop is in much better condition.

My friend confirmed the continuing problems being experienced by British dairy farmers who are still losing money on every litre of milk they produce.

The supermarkets still dominate the price of milk, while it appears farmers don’t have the ability to supply milk at a higher price for the manufacture of cheese and other value added products.

A final impression from my brief visit was the lack of sheep, at least in the parts of England I drove through. In the Cotswolds where I grew up sheep appear to be almost a forgotten species with only the impressive wool churches, built in the middle ages, to serve as a reminder of where the region’s wealth originally came from.

But I suspect that has probably been the case for the last thirty years or more.

Land use change isn’t restricted to dairy farm conversions in Canterbury and Southland. 

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Here are some links for updated prices for
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Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country where he runs a boutique B&B with his wife. You can contact him by email at allan@barberstrategic.co.nz or read his blog here ». This article was first published in the Angus Cattleman and is here with permission.