Global Dairy Trade Falls in Absence of Government’s Leadership

With Whole Milk Powder (WMP) 4.5 per cent below its sale price at the beginning of the 2015/16 season, the answer is not poor quality trade deals, says New Zealand First.

“Exporting powder is not a value proposition when it needs rehydration in countries where water is scarce or expensive,” says New Zealand First Leader and Member of Parliament for Northland Rt Hon Winston Peters.

“New Zealand First has long called for Fonterra to examine its use of GlobalDairyTrade. Selling a farm by no-reserve auction in the current market is stupid, as is doing just that with our key dairy products?

“Whilst Fonterra has belatedly and desperately talked of high added value such as infant formula they and dairy farming leadership, along with a negligent government, have given most of the opportunity to the Chinese.

“We have recent statements from Beijing even more ominous for New Zealand dairying. One serious improvement would be exporting fresh liquid milk which demands a strong value premium.

“The government must drag Fonterra into R&D solutions by increasing Crown research into Extended Shelf Life technologies. For fresh milk, these technologies are about extending shelf life upwards of 90-days without affecting taste.

“In addition National has to drop its subservient foreign policy and conclude the New Zealand-Russia trade deal. The TPPA is meant to be about trade which begs the question why are we ignoring Russia, the world’s number two dairy import market and number two beef import market.

“The Dairy Companies Association and Federated Farmers have been cowed into silence over Russia and, at the same time, blindly laud the TPPA. Their behaviour is inexcusable when it comes to the ordinary farmers’ interests.

“On the TPPA and dairy, they used to speak like Charles Atlas but have become the 70-pound weakling with milk powder being kicked in their faces.

“Japan is opening up its domestic market to just 3,188 tons for butter and skim milk powder across the TPPA. It will take five years to get to apitiful maximum of 3,719 tons each, so we’ll be slugging it out for a ‘prize’ that’s only slightly bigger than an Olympic-sized pool.

“And what exactly are we actually signing on the TPPA? American lawmaker Dave Reichert said only yesterday, that the majority of Republicans have concerns over market access outcomes for dairy and rice.

“If that’s not enough Mr Reichert added protections for biologic drugs, the carveout of anti-tobacco measures from investor-state dispute settlement provisions and the exclusion of financial services from a ban on data localisation.

“Of nine trade deals, five have been extraordinarily negative for New Zealand, which is why we are facing a balance of payments crisis,” says Mr Peters.

TOO MANY ‘FREE TRADE AGREEMENTS’ HAVEN’T GONE TO SCRIPT

Year to November 2015

*Malaysia, Indonesia and Singapore are also ASEAN members. Data source: StatsNZ

ENDS

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