Better farming outlook

by Dave

Uruguay struck me as the New Zealand of South America – small population(3.5 million), more cattle(12 million) and sheep(10 million) than people, strong component of agriculture and forestry in GDP. New Zealand’s example would serve the country well.

New Zealand’s lamb and beef production will be down this year and next, due to widespread drought, and dairy, while currently booming, could soon face environmental curbs.

The escalating cost of energy, fuel and fertiliser means our farmers need higher-than-ever prices for their lamb, beef, milk, vegetables and fruit to make sufficient profit to be able to reinvest in their businesses. Lately, only the dairy farmers have been able to do that.

In the meat industry, factionalism is an additional handicap. The exporters’ primary task is to find a way to out-manoeuvre the British and European supermarkets who till now have played them off against each other. One way was a meat company mega-merger. That doesn’t appear to be an option.

The lamb shortage means farmers will probably not have to worry too much about the supermarkets this year or next they can expect supermarkets to be glad to see them but that doesn’t mean the problem won’t re-emerge in a few years.

Clark, who has the best advice to call on, has a few words of warning. She thinks the gains will be limited, that our rivals in the low-cost, high-volume countries of Latin America and South Africa will also seek to exploit Asia’s worries over food supply.

However, she notes Fonterra is Chile’s biggest dairy exporter.