Economists continue to be utterly tone deaf to out collective outrage over the price of butter…
High butter prices are actually a good thing for New Zealand, economists say
Butter prices might be biting at the supermarket checkout, but there’s a warning that anyone hoping they’ll fall should be careful what they wish for.
The price of butter has increased about 50 percent over the past year, pushed up by high global dairy prices.
But economists say that’s actually a good thing for New Zealand.
…the pimps for Fonterra still don’t get it do they?
We created a monopoly in the form of Fonterra to maximise price negotiations on the global market, but the flipside of that is that me as a consumer in NZ, for a product made in NZ, I’m competing with 500 million middle class Chinese who want this product.
NZ only has a population of 5million, we can never compete for price against 500million middle class Chinese.
On top of that, this butter is created by a cow which takes water, pollutes water and generates climate warming emissions.
So this product, that I’ve already paid an environmental price in manufacturing it, also costs me an arm and a leg price wise. because I’m competing with 500million middle class Chinese.
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?
NZ’s food system in ‘disarray’, scientist says
New Zealand’s food system is in “disarray”, with major cross-sector challenges to resilience, a leading scientist says.
There was a growing need for a national food strategy to improve the country’s food resilience, Te Whare Wānaka o Aoraki Lincoln University Professor Alan Renwick said.
Food systems needed to withstand shocks from international conflicts or disasters, as well as deal with accessibility and health concerns, he said.
One example cited by Renwick was of price shocks during the Covid-19 pandemic.
He said food price inflation during that time was more severe and persisted longer in New Zealand than elsewhere.
That was partly to do with a food system that was very reliant on imports and a concentrated agriculture system, he said.
“The idea to me about food system resilience is we’re able to maintain good access to food for our people, at a reasonable price, even when these shocks come along.”
He said the rise in food inflation in New Zealand since 2021 had resulted in further challenges for families.
“We need to understand how our food system and supply chains differ from other countries. Is it that supermarkets have too little competition? Is it a consequence of our export-focused primary production that is detrimental to our food supply?”
We keep getting told we feed 40million, but that 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!
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 last 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.
We have allowed free market dynamics to be created where we as Kiwis are competing against far larger markets for the kai that was grown in our own country!
Why shouldn’t our children eat from the harvest of our own nation?
Why have we allowed the corporates to take the kai from our nation and make us compete against far larger markets who will pay more than the domestic population in NZ can afford?
I’m sick of Fonterra’s excuses.
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Why don’t those same economists point out what percentage of GDP dairy actually contributes. Then compare that to all the pollution it’s causing. Not bullshit propaganda, actual numbers.
They are too busy gorging themselves on butter…look at that over rated over exposed over fed Brad Olsen…
Barely an adult, but the right wheel him out all the tine as if he’s the font of all economic knowledge …
All he does is spout generalisations …and even his half arsed predictions
end up being inevitably wrong.
Go back and look at his reckons from 18months ago and see where we are now…
The further insult is that the industrial farming lobby is calling for more temporary foreign workers to exploit and drive down wages while sending more money overseas.
Classy.
I do not like paying more for butter but really how much does a family buy in a week . When you look at petrol prices there can be up to 10 cents a litre difference between outlets but you do not see queues at the cheaper one so for a majority of people convenience outweighs cost . As a Nation we would be better of saving money by buying less fizzy drinks and booze than getting cheaper butter.
Butter is part of our cultural heritage Trev. How dare Fonterra! And how gutless of our guvinmint not to intervene! But you’re right Trev. The price of butter is low hanging fruit. Finding a roof over your head far outstripping earning power, increasing rents, the cost of power, insurance going through the roof. The CPI is a joke. And the price of butter an easy target.
New Zealand consumers are the same as Chinese consumers because we share the same global market. As an NZ consumer I have nothing to do with the pricing of butter, and if anything, the large Chinese market should be resulting in lower prices, facilitating volume, stability and sustainability. Unless of course you want to exploit consumers, like a farmer bro.
We already subsidise farmers billions of dollars every year. Just because it is not labelled as such does not mean it isn’t there.
And, pretty much every NZ exporter, including Fonterra, price gouge the domestic market (NZ) to subsidise export markets. All of Air NZ profits come from the domestic business, and most of Fonterra’s does.
The first step to stop this price gouging would be to require these companies to report their NZ operations financial results separately and not lump it into some Asia/Pacific region.
That would give you your 15% right there., if not 50%.
But that’s unlikely to happen, so beholden are our governments to these big businesses, and therefore the only logical decision based on facts and a sound business case is to shut the dairy industry down. The cost of the damage to our aquifers and waterways exceeds the benefits by trillions of dollars.
There are far more profitable business opportunities using that land that enhance the environment instead of destroying it.
Any one of you can start a farm and sell locally if you can get through the red tape to sell from your front gate.
Go on. Sell locally.
‘We’ don’t produce butter. Farmers produce butter. They take the risks, make the decisions, earn the returns. This has never been a collective endevour and the idea that one person should receive good cheaper because someone else in the country has produced them doesn’t hold water, especially when they have played no part in the process.
Hold on – NZ created a monopoly for these very farmers to ensure they could negotiate on the global market – you utterly ignore the market NZers set up for dairy farmers and you utterly ignore the environmental cost of that decision and you utterly ignore the social contract that Kiws can demand BECAUSE we allowed a monopoly – why do we on the left have two lecture you on the very capitalism you exploit?
Why the outrage over dairy products given that butter and cheese aren’t that healthy. Not sure if a person needs to be eating a block of butter a week.
Saturated fats are a lot healthier than unsaturated fats (which cause inflammation of the arteries, followed by cholesterol build-up). The exact opposite of what food nutrionists tell you.
https://pubmed.ncbi.nlm.nih.gov/23386268/
TLDR; Here’s the conclusion: Advice to substitute polyunsaturated fats for saturated fats is a key component of worldwide dietary guidelines for coronary heart disease risk reduction. However, clinical benefits of the most abundant polyunsaturated fatty acid, omega 6 linoleic acid, have not been established. In this cohort, substituting dietary linoleic acid in place of saturated fats increased the rates of death from all causes, coronary heart disease, and cardiovascular disease. An updated meta-analysis of linoleic acid intervention trials showed no evidence of cardiovascular benefit. These findings could have important implications for worldwide dietary advice to substitute omega 6 linoleic acid, or polyunsaturated fats in general, for saturated fats.
The outrage should be on cigarettes and alcohol but they donate to the government much like farmers do so actually yes the outrage should be on dairy products.
Says a lot about Greed! I looked at our weekly grocery bill yesterday and highlighted the ‘Farming/Dairy’ items – milk, butter, yoghurt, cheese, eggs, meat, fish etc. The pricing is staggering and an absolute disgrace. How dare NZ insist their citizens pay – not the same – but often more than their export prices. It appears you can buy a leg of NZ lamb for less in England than in NZ! Why the hell should we subsidise farmers, producers, exporters, and overseas consumers? Martyn’s suggestion we subsidise our local market is achievable but again shouldn’t this load be SHARED by all involved instead of always ending up with the already ravaged NZ END USER?
Visited a dairy farm recently. 900 cows, 6 Indian migrants milkers, 1 pakeha owner with 2 sons.
When asked why they didn’t have any kiwi workers the cagey answer was kind of ‘can’t find anyone suitable’.
This just shows the migration settings are totally wrong.
The govt can easily arrange for less helicopter guns and more subsidised butter.
If we want clean drinkable (not just swimmable) rivers it’s simple, legislate for decent water quality and enforce the law.
The sadest part of all of this is it falls completely on the government. If it had the will it could change things. It has shown clearly it has neither the will or the intention to change anything.
Many of our NZ economist talk a load of bullshit and don’t know everything (like what is best for our economy) but many in NZ (including our media) tend to put them up on a pedestal.
” I’m sick of Fonterra’s excuses ”
We are all sick of being legally extorted by these cartels for needing to eat , cook the food and then not freeze to death at home.
“Higher butter prices are actually a good thing for New Zealand…”
That’s right up there with Bill English claiming New Zealand’s low wage economy was great because it made us more competitive on the global stage. Cold fucking comfort for those earning the aforementioned low wage though, eh? I guess as long as “the market” is happy and farmers are making bank, we plebs should just stop moaning and be grateful for our beige, tasteless “table spread” from the poverty aisle in Pak’n’Slave.
Yes, Grant I remember when him and some of those other clowns (economist) were saying the price of our houses would drop and they kept on going up and up. Many of the right-wing economist don’t factor in social policy and a lot of what they say are based on predications not hard-core data, statistics or evidence-based research.
Well, we have to fucken eat something Ben we can’t afford a steak and who pays when there is a drought or a m bovis outbreak, isn’t it us the taxpayer.
And lo, does it not say “Go not to economists for counsel, for they are greedy and full of shit?”
Why can’t we eat the harvest of our own nation?
Because we don’t live in a nation, we live in a market.
All these dairy and beef farmers should all be voting Labour at the next election .Because Jacinda stepped up and saved the national bovine herd from oblivion from the mico plasma bovine virus that was sweeping through the herds and if left to farmers the herd would have been gone along with the dairy and beef market .She put taxpayer money into stopping it in its track and compensating the farmers who lost herds in the process .Then the trade deals with UK and EU were struck with increased quota for NZ into those markets which resulted in increased demand for the same amount of product we were already producing which resulted in higher prices for farmers .