Grain price surge will help NZ farmers

NEW ZEALAND - New Zealand dairy farmers will benefit enormously from an inevitable increase in international grain prices, says Irish dairying guru Michael Murphy.
calendar icon 22 February 2007
clock icon 2 minute read
Speaking to a conference of Positive Dairy Farmers held in Ireland recently, Mr Murphy, who was the keynote speaker at the Westpac Whareroa Dairy Conference in 2002, said cheap grain was now history and this opened up huge opportunities for efficient grass farmers such as those in New Zealand and Ireland and the western regions of the United Kingdom.

"I believe the medium- to long-term outlook for Irish dairy farmers is more positive now than at any time since we went into the EU in 1973. However, to fully capitalise on this we need to take decisive action if we want a vibrant, prosperous, expanding Irish dairy sector," he said.

"Essentially I'm suggesting that cheap grain is now history. This will be an added cost in the very short run but will over time strongly improve the supply demand balance both in the EU dairy market and globally in favour of farmers. Much higher grain prices will lead to less meal fed to cows worldwide. Less meal fed will lead to less milk production.

"This will lead to sustainable higher real prices for milk produced by low cost dairy farmers. Markets are dynamic and will seek to adjust to shortage. So to attempt to predict exact price effects over time would be futile. But the overall trend is hugely favourable."

Mr Murphy said this would give a large and sustainable competitive advantage to highly efficient grass managers in Ireland, New Zealand and other good pastoral areas.

"I'm more optimistic now about the future of Irish dairying than I have been for 30 years. I believe the benefits will be sustainable over decades."

Source: Taranaki Daily News
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