Dairy Wealth and BraggingThursday, May 31, 2001
On the day that agreement has been reached on a merger proposal for shareholders to vote on the consolidation
of the majority of the industry into one company and the day following the past seasons
payout announcement the skiting and bragging has surfaced.
The dairy boom bull sh*t has started to flow from within the industry and if it isn’t contained
it will reflect in a costly manner on the industry.
Today’s news report of over enthusiastic West Coast dairyman skiting about wealth at the regions
annual meeting fortunately does not reflect the attitude of most farmers and wiser speakers brought
the issue back into perspective.
Being part of such a producer orientated industry it is at times like this that producers should inspect
the reasons for the apparent industry good fortune.
NZ dairy farmers are perhaps almost unique in the world at this time in receiving profitable prices
for their production. For probably the first time in many decades NZ payout in relative terms will
be ahead of the Australian industry.
Also northern hemisphere milk producers, in spite of subsidies, are under severe price pressure and
many of the main economies are reaching that dangerous state where lower interest rates do not give
sufficient lift to declining economies.
Our odd man out status must contain a warning that something special is at play in the current prices
being received for milk. What it is seems to be a bit fudged at the moment. But whatever it is,
would the skiting gentleman be equally as enthused if next years returns decline by a dollar per kilo
of milk solids?
The good prices received are based solely on the willingness of the customer to buy. All the financial
manipulations and structural changes are useless without a willing consumer. The clamed wealth
of the West Coast bragger may well evaporate as quickly as snow in summer if the market reverses the
trend of the past two years.
On a lighter note an engineer mate noted the concerns of the “if it aint broke don’t fix
it’ brigade who may be now ready to influence the merger vote and sent his comment.
"Normal people believe that if it ain't broke, don't fix it.
Engineers believe that if it ain't broke, it doesn't have enough features yet."