U.S. Dairy Farmers Threatened by New Zealand
Thursday, March 11th, 2010
Who would have thought that little old New Zealand would be such a threat to the U.S., but in the case of dairy products, U.S. dairy farmers are battling to keep products from the country from entering U.S. markets, as fears are they would push prices down and make it hard to compete.
My response to this is: So what? You've got to be able to compete in global markets no matter where you are located and no matter what industry you're in. American dairy farmers will just need to learn how to raise production and cut costs if they want to compete.
Having said that though, it's highly unlikely that fluid milk will be that much of a factor in imports to the United States from New Zealand, but whether they are or not, dairy farmers will have to adjust and adapt and become better at controlling operational costs.
Not all farming groups oppose opening up American markets, as the American Farm Bureau Federation doesn't support excluding dairy products in the negotiations, as exclusions overall could damage the benefits coming from free trade.
It's like saying let's trade with one another, but we're not going to trade with you in areas where you have strengths. It makes no sense, and it would be a surprise if we find dairy products from countries not being part of the trade talks.
The two major areas of concern are with cheese and milk powder, which would have some downward pressure on prices. As mentioned above, milk we drink wouldn't be affected much because of the costs associated with delivery, and other factors.
When you cut through all the clutter about the dairy issue, the truth is New Zealand is just better at doing it than anyone else in the world, and no matter how you spin it, that's the bottom line. So the idea of leaving dairy, or other products, out of the negotiations based on the strengths of whatever countries have is ridiculous. That's why it's been hard to make deals for years, as no one wants to allow competitors into their markets.
Businesses, which farming is, need to learn to compete with their best competitors or find another line of business to operate in. No amount of protectionism can make people better farmers, and to look toward the government is just plain ignorant. Compete and get better at what you do and you won't have to worry about it, no matter what sector you focus on.
Article by Gary B
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
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Tags: agricultural trade, agriculture, dairy farmers, dairy trade, new zealand dairy,Comments:
Are you talking protein powder derived from milk? There is push to limit this cheap "not milk" substitute from further degrading food. Made mistake of buying some NZ steak once. Guess selling someone once is a decent business model given North American population.
You ignored that NZ's currency is rising while ours continues to fall due to mounting debt and govt bailouts. That makes a difference when it comes to trade, hello? They also don't pay Social Security taxes, state taxes, local taxes or capital gains taxes in New Zealand, but dairy farmers do here so their cost of doing business is much higher. Dope.


There is also an investigation going on re: abnormally high seed prices in the US due to an alleged Monsanto monopoly, which leads to higher feed costs. So does the lower US dollar which increases fuel and transport costs added on to feed and buys less of it, so our goods cost more to produce, it's not a fair trade. Do your homework, you have no idea what you're talking about and nobody has any idea why you think you're in the position to tell them what to do. You won't even reveal your last name on this stupid article. (BTW, New Zealand has also glutted our wine market with cheap bottles, because their country subsidized those wineries and there are so many of them for sale who can't make it now, you can probably buy one for a song.)