In August 2014 real reporters around the world ran stories about China’s milk stockpile, and everyone in China who was anybody, knew China was stockpiling those resources.
The news that Russia is banning imports of dairy products from all EU states should be the least of our concerns.
What dairy farmers here should be doing, rather, is looking even further to the east, to China.
For there are some ominous signs that that country’s snapping up of massive volumes of dried milk powder produced in the west may well have been a stockpiling exercise and that it is now coming to an end ahead of an anticipated downturn in the Chinese economy.
That could have quite severe repercussions here where a lot of the ‘surplus’ milk, which has been sloshing about in the market, has gone to drying plants in an exercise which acts as a useful price stabiliser. The effects are already being felt in the arena of global dairy auctions, where prices dropped 8.4 per cent this week and are now 50 per cent lower than they were in February – and it’s worth noting that whole milk powder (down 11.5 per cent) and skim milk powder (down 6.5 per cent) were among the big losers.
So stand by for even more price cuts at the farm gate…
Yet, despite how many junkets to China and resources put in by NZ Inc and a newspaper, it’s only when Bill English makes comment on it off his own bat, does Frances O’Sullivan – a newspaper’s pre-eminent repeater – actually even record it as happening.
It was Bill English who finally punctured the myth that the lengthy price slump that has carved billions of dollars off New Zealand dairy returns is simply a short-run thing.
Not so, said the Finance Minister on his return from China this week. Read more »