News last update:6 Aug 2012

NZ farmers to profit from high grain prices

Speaking to a conference of Positive Dairy Farmers held in Ireland recently, Mr Murphy 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.

Sustainable real milk prices
"Essentially I'm suggesting that cheap grain is now history due to the shortage of stocks of wheat and corn globally in 2006, with wheat demand outstripping supply by eight million tonnes and corn supplies short by 27 million tonnes.
Much higher grain prices will lead to less meal fed to cows worldwide. Less meal fed will lead to less milk production. "This in turn 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 cannot be made. But the overall trend is hugely favourable."
According to Murphy this trend 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"

To subscribe to the free AllAboutFeed newsletter click here.

Editor AllAboutFeed

Or register to be able to comment.