Why Butter price highlights all that is wrong in NZ Free Trade

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Butter prices slipping out of reach

Whether you’re measuring it for baking, using it in cooking or spreading it on your toast, butter is a versatile but increasingly expensive household item.

In a non-scientific survey, Stuff has found in recent months the price of the golden goodness has increased – not just for our own kitchens but for food vendors also.

Looking at the 500gram salted and unsalted butter slabs from Mainland, Anchor, Westland and Rolling Meadow the rounded average price from Pak’nSave, Woolworths and New World supermarkets was $7.30.

The most expensive 500 grams of butter we found was Mainland Semi-Soft spreadable butter for a whopping $13.29 ($11.89 with a club card) online at New World.

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Why should we be forced to pay the same price as the Chinese Middle Class can afford?

The Chinese Middle Class is forecast to grow to 787 million!

Why are we paying a price that is imposed upon us by a middle class market that is many times larger than our total population?

Why can’t we eat the harvest of our own nation?

The Biggest Lie in NZ Politics is that NZ Dairy is the cleanest and greenest in the world when the reality is that it’s a cherry picked nonsense that leaves out pollution so NZ Dairy can get to the numbers to pretend to be clean and green.

Russel Norman’s take down of this Dairy propaganda on The AM Show recently was just ruthless…

“NZ is the biggest seller of a simple commodity called dried milk powder, the cheapest of the cheap, and if you look at what is happening in food production around the world they are looking for more environmentally sound food products.

They are looking for higher value products.

We’ve gone down the pathway of the lowest quality commodity you can produce in the world.

NZ is mid range in terms of its environmental cost per kilogram of milk solids, there is nothing special about it, and we do feed a small number of people compared to the billions on the planet and the economics is very clear that you can be just as profitable if you pull back on the stock rate, pull back on the amount of fertiliser and actually produce a higher product.

Organics is in fact doing incredibly well globally, so why don’t we become a producer of dairy rather than the producer of the cheapest commodity on the planet which results in us trashing our water ways and being big climate producers, that’s a better pathway isn’t it?

…he’s so right!

We always ignore that the 40million number is based on us selling milk powder as a base line ingredient filler for the manufactured food industry. The PR spin pretends it’s wholesome NZ cheese and milk and meat those 40million are eating when the truth is the vast majority of what we export is basic bitch milk powder used as a filler ingredient!

The Climate Crisis was some event we feared at the end of the century, what we are seeing is an unleashing of heat events well beyond what we feared.

There is just no plan to adapt to this new reality when it should be the driving force to begin immediate and radical adaptation for what is coming.

We have no comprehension of what is coming and we are simply not prepared for the age of consequences.

Watching National, ACT and Corporate Farmers use their economic and political muscle to avoid responsibility for what comes next can only be resolved by civil unrest and a campaign of civil disobedience against those interests.

Just consider how the Corporate Farming Lobby have managed to avoid any tax on their pollution since mid 2004!

They have pushed and pushed and pushed it off for 20 years!

National have already promised ANOTHER 5 year extension which will mean the agricultural industry have managed to stop any tax on their pollution for quarter of a century!!!!!!!!!!!!!!!!!!!!!!

Claiming that NZs emissions mean nothing in comparison to China and India isn’t a justification to do nothing, it’s an acknowledgement that radical adaptation is the only move left because those Goliath economies have already doomed us to a dangerous climate change future!

The Left must force a bargain with Farmers and Growers for strategically essential reasons.

They are going to feed us when the famine comes.

A recent report on food security found NZ had incredibly low food security because it was so open market driven and refused to subsidise farmers.

Which is where we on the Left must drive the debate.

We should absolutely consider subsidising food grown by NZ farmers and horticulturalists and our seafood and meat and dairy that generates a 15% price reduction for all NZ produce consumed here.

For growers we need to protect our most productive growing land for food by giving those producers tax breaks to ensure they can continue to feed NZers first.

Rebuilding a direct link between the harvest grown here, the people who grow it and a grateful local market who enjoy the product WITH a 15% price reduction.

Climate change will kill global free market supply chains, we are locked into hyper-regionalism. We need to build new economic structures, subsidising NZ kai for the domestic market would lock in certainty for producers while strengthening food security for the population.

We have to find new ways of working together to ensure we can survive what’s coming.

Fitch Ratings analysts warned NZ this month that the next 10 years of economic growth was dangerously stunted.

This matters because it is ratings analysts like Fitch who warn the market if we are good for all the money we borrowed.

They base that on future projections of our economic cycle and their analysis is terrible.

Fitch have made clear to us that Dairy, Tourism and exports to China have waned and can not grow beyond the manner in which we have already grown them…

He told BusinessDesk that Fitch sees the drivers of growth in the decade before Covid as having “run their course”.

In other words dairy, tourism and China export growth – while continuing to be large and core components of New Zealand’s economy – can’t possibly continue on the same dramatic growth curve they did before.

…John Key’s, ‘All our cows in one Beijing paddock’ has not only been geopolitically dangerous, it’s also run its economic course.

So what now?

This Government seem to think mining, gas and oil exploration alongside weakening regulations for donors will unlock NZs next economic cycle but it can’t and won’t…

The idea that we’ll mine our way to prosperity is one of those. It may well be an industry worth promoting, but betting the house (or more specifically our clean green reputation) on it being transformational is just silly.

We mined the big accessible gold deposits in 19th and 20th centuries. The odds of finding valuable rare metals like lithium are very low. It would be great if we did but if that’s this Government’s strategy, they might as well buy Lotto tickets.

Striking oil is also a long shot and the time frames involved to find it and get it out of the ground take us well past 2030 – the date by which the International Energy Agency has forecast the world will face a “staggering” glut.

If Kiwis ever wanted to be a rich oil-producing nation (and a large percentage don’t) we’ve missed that boat.

…if we are to play to our advantages, we need to play to the one that will provide the most impact to all of us.

Cheap, 100% renewable electricity!

This needs to be our focus…

When we look at what gave New Zealand a competitive advantage in the 20th, cheap electric power is near the top of the list.

The dairy industry was built on the ability to turn liquid milk into powder more efficiently than our competitors.

The next wave of global economic growth will involve electricity and lots of it.

Artificial intelligence is incredibly power-hungry. One Chat-GPT search uses 10 times the power of a Google search.

Throw electrical vehicles on top of that and it becomes obvious – only countries with access to a cheap, stable power supply will have a competitive advantage in the years ahead.

There has been plenty of talk about the potential for New Zealand to be a world leader in data centres. To do that we’ll need more and ideally cheaper power.

Collectively, data centres will consume about 200 megawatts (MW) of electricity at peak usage – roughly the amount required to power some 200,000 homes. The average demand in Auckland is about 1700MW. That has been forecast to rise to 500MW of consumption over the next five years based on current plans.

…solar panels on every public building.

Local wind turbine generation.

Windfarms.

Electric public transport.

More Hydro.

Tidal generation investment.

This needs to be our way forward. Not more Dairy and more cheap basic exports to China and Tourism.

Cheap sustainable electricity is our competitive edge, we need to urgently focus on that now!

As this Government walks away from our climate obligations, as it takes $3billion from climate change funds, as it once again allows the corporate farmers off the hook for their methane emissions, as it shits on EVs, as it walks away from public transport, as Shane Jones turns mining in to a woke culture war, the fucking planet melts…

World breaks 1,400 temperature records in a week as heat waves sweep globe

This week, more than 1,000 temperature records broke around the world, many of them shattered by extreme heat. Hundreds have perished while making the Hajj pilgrimage to Islam’s holiest site, Mecca, while some 100 million people are under a heat advisory in the United States. The total number of heat-related deaths isn’t yet clear, but at least hundreds have died in an unseasonably early heat wave; in India, which has seen some of the most extreme temperatures, at least 100 people have died in the last three monthsdue to heat.

The heatwaves are “the fingerprint of climate change,” experts said, and are a glimpse of what’s to come as human-induced climate change continues to amplify extreme weather. “It should be obvious that dangerous climate change is already upon us,” a climate scientist told The Washington Post. “People will die because of global warming on this very day.”

…remember, according to the political right, this is all a socialist hoax…

…this graph below is a socialist hoax…

…this research showing more fires is a socialist hoax…

…think tanks like the Atlas Network are funded by the big polluters who are benefitting from the current Late Stage Capitalism and we see their fingerprints over everything this Government is implementing.

The Atlas Networks radical billionaire and dark corporate moneyis being channeled into policies that protect the oil industries who are polluting the planet.

Monbiot from the Guardian makes this point…

And who, in turn, are the junktanks? Many refuse to divulge who funds them, but as information has trickled out we have discovered that the Atlas Network itself and many of its members have taken money from funding networks set up by the Koch brothers and other rightwing billionaires, and from oil, coal and tobacco companiesand other life-defying interests. The junktanks are merely the intermediaries. They go into battle on behalf of their donors, in the class war waged by the rich against the poor. When a government responds to the demands of the network, it responds, in reality, to the money that funds it.

…Oil, coal, tobacco, right wing billionaires, the fucking Koch brothers, dark money influencing our political system so much so that we see the exact same agenda being rolled out here!

The simple truth is we are fucked and catastrophic climate change is here and it will only get far far far worse despite the right wing denial.

That means we have to start facing up to a very different type of world and NZs role in that world as a life boat.

Paying a reasonable price for food made in our country is the start!

25 COMMENTS

  1. We are exporting larger quantities but as a% of GDP agriculture is diminishing and is now around 20% compared to 60% of GDP in the 60s.The fact we are selling non value added produce is a huge fail of this sector to get stuck in and grow their returns .We have merely embarked on the path of supply more raw material at the lowest cost to the off shore purchaser .The growth of dairy has been large for no gains .Daily we can read about dairy companies going broke along with meat companies .Silver fern farms was saved by a chinese company from bankruptcy a few years ago as was wetland milk .Sinlait is another going to the wall sooner than later to be swallowed up by an off shore scavenger no doubt .This so called business focused non thinking government needs to st down and have a serious chat with the ag industry .Several governments have poured millions into ag research companies for little or no return .we need to start doing stuff with wood ,wool and milk .
    An Otorohanga timber company has been exporting up to 40 containers of finished house building mouldings for years .Why are there not other companies doing the same ? Mainly because they are run by ,as Luxon would say ,c grade management who hold out their hand but do little else .The same applies to dairy and wool .Sheep farmers have bleated for years how they are the back bone of NZ ,but are spinless when it comes to developing a use for their wool .A small number have stepped up and found markets for finished high end products ,but the other 90% just bleat on .Dairy has now put value added into the too hard basket and are now selling off all of their intelectual property collected over the years .We will soon be importing most of the dairy finished goods found in our supermarkets .

    • Whilst we hear this argument in regards value added exports, it comes with a huge caveat. You need distribution channels and those cost enormous amounts of money and effort to set up and maintain.

      The Otorohanga moulding company sure exports a lot but is that to one distribution company? There is a large picture framing manufacturer in Christchurch and they export huge quantities as well but it is all to one distributor. If those distributors pull the pin, there is no other option to suffer the loss or set up expensive distribution channels yourself.

      Value added meat exports were tried by AFFCO quite a few years ago. Their share priced dropped to 28 cents on the news that they turned over a $1B in sales (looks good on paper). but only made a profit off $100K. On the news they were closing the value added meat operation, closing their world wide sales offices and staff, moved head office from salubrious location in Auckland to Ngaruawhahia to concentrate of wholesale carcass meat sales, I bought 20K shares at 28 cents and sold them at $4 to pay off the mortgage (yeah I know, capitalist pig – but everyone had the same opportunity)

      Value add sound a great until you have to add distribution costs and finished goods competition (Fonterra does not have the size, muscle nor wherefore all to set up distribution channels for finished goods and take on Nestle).

      Another good example is New Zealand water. Why do the Chinese own those operations? Simple for they have distribution channels in China. New Zealander’s could certainly open a distribution channel for water in China but the costs and market acceptance (like infant formula milk powder) is costly and time long to establish. Fiji water would be nothing without the distribution channels that the owner brings (The Wonderful Company – I kid you not) who can market Fiji water alongside their other brands (Iceland Water, Perrier, Mountain Valley Spring, etc.using their sales force.

    • gordon you should be banned from commenting on economic issues.
      Your comments are ridiculous revealing your lack of education, they are so pathetic.
      I could go into a revelation of your ignorance but you wouldn’t understand.
      What do you do for a job??
      Good heavens.

  2. In the land of milk and honey, both are now luxury items.
    Welcome to The Brighter Future. Oh, and your rent is going up by the way.

  3. No Martyn we are supposed to fall to our knees and worship the dairy sector. When it comes to emissions they all talk agriculture as a blanket term but don’t tell me fruit and produce growers, or dry stock farmers are doing as much damage as intensive dairy.

    • @ wheel. You’re dead correct. The only thing agricultural about dairying is the paddock cows stand on, usually tits deep in freezing mud. “Butta with the croissant and latte then dahlings? ”
      To define agriculture and its nuances would be to educate people and educated people are far harder to bull-shit. Aye banksters and your Urban hyper riche with your multiples of billions and millions and the scum foreign owned bansters ? You’d fucking know about that wouldn’t you?
      @ Countryboy wrote more than 10 years ago that the scratching on the kitchen door that is the truth will come home and rip Big Daddy banksters a new arse hole and here it comes fuckers!
      Cowsploitation is a blanket term for a distracting charade to obfuscate and confuse to enable a general sort of farmer abuse to get their produce for literally nothing to make 1000%’s of percent profits from once exported and all without lifting a soft little cock fiddler.
      Federated Farmers are an unnatural appendage of the national party so they are far more the enemy to we farmers than we farmers are to ourselves. The very first thing to do as a farmer is to unite with the farmer next door and so on and so on. Then STRIKE!
      You know when you move the dog kennels and the rats underneath make a run for it ? Send a shock wave through the Beehive and see the Rats run for it.

  4. Finally, the truth sinks in.

    “Radical adaptation is the only move left because those Goliath economies have already doomed us to a dangerous climate change future”

    That’s right, regardless how much we (as a nation) reduce our emissions, the larger polluting nations have doomed us.

    So best we pull out of our commitments and use the savings to help us better adapt.

    Quick, somebody tell the Greens. They still think reducing our emissions will save the nation and the planet.

    • Well said The Chairman particularly your reference to the Greens who are the modern day Flat Earth Society.

  5. The problem will come in getting those who provide electricity to sell it cheaper, already they have a system where they all get the price of the most expensive producer so more than a few heads need to banged together to get a better deal for consumers. Most of us don’t care that mass power consuming industry get cheap electricity if we still pay high prices.

  6. Great thoughtful enlightening piece Marty.
    Claiming that NZs emissions mean nothing in comparison to China and India isn’t a justification to do nothing, it’s an acknowledgement that radical adaptation is the only move left because those Goliath economies have already doomed us to a dangerous climate change future!

    The above is rather like an oxymoron isn’t it?
    First we hear the word is that we are leaders in the world in efficiency in dairy etc; measuring ourselves against other world producers of dairy. Then second, saying that what we do in the world re pollution doesn’t matter a toss because we are too small, though we try and trade as a major individual brand and entity. Either we are in the world and caring about our brand and standing and requirements, or we aren’t. And if we are too small to count for anything, why are we allowing/encouraging these overseas businesses coming here and buying our dairying up, and running our tiny business into the ground? Can’t have your cheesecake and eat it too!

    • In comparison to total pollution output with larger nations, we are clean and green.

      But that is largely due to being a small nation.

      So of course, we will tend to market that. Having our cake and eating it.

    • Russel Norman has done something with his life, he is an advocate for a better world, you are a loser.

    • Nuclear-export, similar words, aligned?
      extort, exhort, examine, exhaust, extinct, excalibur…exeat, exeunt…then exhilarate after watching, reading about ‘The Honourable Society of Faster Craftswomen’ https://exeuntmagazine.com/reviews/holiday/
      This looks as if it is far more worthwhile and meaningful than watching, reading and listening scientific Mensas find new ways of promising all-will-be-well on-tap energy (on an 80:20 ratio) and building something irrevocable and abandoning it when it goes pear-shaped, (the worst way!).

  7. ” Why should we be forced to pay the same price as the Chinese Middle Class can afford ”

    Some of the reasons but there are more.

    1 The dairy industry don’t give a shit about the domestic market in New Zealand. They are on record saying that a long time ago when they were asked to justify exorbitant price increases then.

    2 Due to the Dairy industry’s powerful representative’s and their control of the National party they are never forced or regulated to stop extorting Kiwis for the dairy products they purchase.

    3 There is no protection for New Zealand consumers from being exploited and not just with the prices for Dairy. Its a widespread problem bought about by capitalism and no regulation. There are no politicians prepared to stand against this despite the ones who deliberately campaign on the lie that they care about struggling New Zealanders and like the current government will push us into a more precarious debt position by offering a measly few dollars back in a tax cut.

    If you want to but a block of butter at least your tax cut will make it a couple of dollars cheaper.

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