Grain price surge will help NZ farmers
NEW ZEALAND - New Zealand dairy farmers will benefit enormously from an inevitable increase in international grain prices, says Irish dairying guru Michael Murphy."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.
"Essentially I'm suggesting that cheap grain is now history. This will be an added cost in the very short run but will over time strongly improve the supply demand balance both in the EU dairy market and globally in favour of farmers. Much higher grain prices will lead to less meal fed to cows worldwide. Less meal fed will lead to less milk production.
"This 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 would be futile. But the overall trend is hugely favourable."
Mr Murphy said this 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."
Source: Taranaki Daily News