NZ farmers to profit from high grain prices

22-02-2007 | |

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.

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”

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