New Zealand’s minister for primary industries (agriculture) has played down the competitive threat posed by a Europe recently unshackled from EU milk quota regulations.
Speaking at a dinner held during the International Federation of Agricultural Journalists (IFAJ) World Congress, Guy said New Zealand’s dairy industry has already been competing against many countries around the world. Referring specifically to Europe, Guy said that although quotas were only removed in April, Europe does not pose much of a threat since the low milk price has discouraged a large increase in milk production across all 28 member states.
“We’ve seen some of the 28 countries increase production; some haven’t,” he said.
Guy said the low milk price has not only affected EU production levels. It has also caused concern for New Zealand’s dairy farmers. Future estimates for New Zealand’s production is that it will be back by about 5% this year. The minister said New Zealand farmers are now focused on trying to be the most efficient producers of milk on a grass-based system.
Competitive threat
As for how New Zealand intends to deal with the competitive threat that will grow once the milk price improves, Guy says collaboration and not competition with Europe and other regions is the way forward. The minister referenced collaboration with New Zealand dairy processor Fonterra’s Dutch operation, and a joint venture with the Chinese processor Beingmate. The venture in China saw New Zealand invest approximately €700m for a 20% share in the company, thereby ensuring New Zealand dairy produce is “on the top shelves of Chinese retailers”.
Guy added that the fundamental point is that there is an opportunity “to sell the New Zealand story, to continue to add value to a premium product and to collaborate with a market that is coming closer to New Zealand, not further away”.
Production in Ireland
The latest figures from the EU Milk Market Observatory show that Irish dairy production is growingat the fastest rate in the European Union. Milk deliveries to Irish processors from January to July this year are 8.6% ahead compared with the same period last year, followed by Dutch milk deliveries, which are 7% ahead of last year.
Source: FarmersJournal