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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



Tags: agricultural trade , agriculture , dairy farmers , dairy trade , new zealand dairy

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