Comments on: Dairy production

By: StephenR

StephenR — Thu, 21 Feb 2008 23:12:59 +0000

This is slightly more biofuel related…I meant they already grow wheat in Canterbury and was wondering how it compares to also-rising dairy prices in terms of price-competitiveness.

I vaguely recall reading about sunspots at hot-topic.co.nz a little while back…

By: waymad

waymad — Thu, 21 Feb 2008 23:04:59 +0000

Well spotted, StephenR. As did Herschel 200 years ago - low sunspots, cool Gaia, high wheat prices...

By: StephenR

StephenR — Thu, 21 Feb 2008 19:41:57 +0000

Wheat prices are pretty damn high - says the news - I wonder what prospect there is of growing some more of that…in Canterbury at least, not so much Southland.

By: samiam

samiam — Thu, 21 Feb 2008 07:34:14 +0000

The problem with agricultural production is intensification, dairy conversion is just the current favourite. The land is being asked to produce more than it can or should, probably in the short term, but certainly in the long. Why are farmers (who nearly all love the land) pushed this way? Land value and capital gain!
It’s simple really, farms are worth more than they are capable of earning. Young (and even corporate) farmers are obliged to rape the #$%^ out of their land in a desperate bid to pay for them.
It’s odd really that landed gentry ( I should know, I am one) see capital gain tax as the GREAT EVIL when its capital gain that is killing our farmland under a carpet of cow shit and urea.
Ban foreign ownership and tax capital gain at the same rate as other forms of income. I’m sure there would be short term carnage but the long term stability would allow land owners to plan for the long term.
Long term Zero population growth would be essential as well, but that’s another subject.

By: BluePeter

BluePeter — Wed, 20 Feb 2008 22:28:11 +0000

>>But the business people who spend billions of dollars on advertising aren’t stupid - they know that advertising affects people’s buying habits, and they wouldn’t do it if it didn’t.

It’s not that simple. They test market advertising, and it fails more often than not.

Advertising only works if the message resonates with people. The reasons advertising resonates with some people is complex, but it must appeal to *their* wants and needs. Control does not rest with the advertiser.

McDonalds consumption has been tracking down, despite advertising, mainly because people’s eating habits are changing. This is almost certainly due to greater health and fitness awareness.

>>Anyone else remember Fonterra’s chocolate cheese?

No. And by virtue of the fact it didn’t take off, their advertising clealry didn’t work, then?

The people voted with their wallets.

By: waymad

waymad — Wed, 20 Feb 2008 21:59:31 +0000

Good thread. But you cannot regulate people’s wants to any fine degree. ‘Demand’, as Ari has it, is actually the result of millions upon millions of individual buying decisions. To think otherwise is to patronise the buyer - the old paternalism (or perhaps Nanny Knows Best?, to keep things gender-neutral).

So my personal decision never ever to buy any food item Made In China, f’rinstance, if sufficiently widely replicated, will have an effect on the aggregate demand for Chinese-made food. It certainly worked That way for the pet-food market in the US, recently. That position is immune to advertising.

And, pet food aside, advertising cuts both ways - it may induce, and it may also repel…..

By: nandor

nandor — Wed, 20 Feb 2008 12:31:50 +0000

Anyone else remember Fonterra’s chocolate cheese? Developed in an attempt to get dairy into the Chinese markets? I don’t think it ever took off, but does demonstrate the lengths Fonterra is going to to lever open new markets. Of course with a goal of 3% (I think ) annual compound growth they need to find new markets to take the increased production.

The other factor is that part of what’s driving dairy expansion is the capital gain from conversion. Its also what driving land values beyond the purchasing ability of young farmers and turning the tradition family farm over to increasingly concentrated corporate ownership. That, as sheep farmers in Canterbury will tell you, is changing the nature of rural communities from stable and cohesive to transient and fragmented. It also may lead to a decreased stewardship ethic in general - although not in all cases.

By: StephenR

StephenR — Wed, 20 Feb 2008 09:01:20 +0000

One often hears in the media that such products (and red meat) are eaten because they are associated with ‘the west’ and therefore the person consuming such products is wealthy/upper class - like jeans used to be I think? Just chuck a hollywood star in there and pander to a country’s self-imposed ‘cultural cringe’. In the end it is up to the individual if they want the product, no one is being forced, but I am not particularly fond of adds that induce a sense of inferiority - ads for make up would not work if we were all happy and confident for example. No doubt Fonterra’s ads would show unpolluted NZ country streams…

By: kahikatea

kahikatea — Wed, 20 Feb 2008 08:56:23 +0000

BluePeter Says:
February 20th, 2008 at 8:42 pm

> That sounds like the peculiar, and quite frankly - ridiculously patronizing - left-wing view of advertising, a view which also “informed�? the EFA. A view that people are mindless dolts hypnotized by whatever is put in front of them.

Of course it also depends on what you’re trying to sell.

But the business people who spend billions of dollars on advertising aren’t stupid - they know that advertising affects people’s buying habits, and they wouldn’t do it if it didn’t.

By: BluePeter

BluePeter — Wed, 20 Feb 2008 08:55:03 +0000

The Chinese now have access to fridges. And they are developing a taste for all things Western - including ice-cream. The middle class can now afford to buy more, and there is more choice. A consumer revolution.

Advertising plays a part, certainly. But the cause and effect is complex, else all advertising campaigns would generate money. But they don’t….