Latest / Early Edition with Ryan Bridge / Karl Dean: Federated Farmers Dairy Chair on the high costs of butter

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Karl Dean: Federated Farmers Dairy Chair on the high costs of butter · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Right, Oh, dairy prices around the globe are soaring, but
• 0:03
  Speaker 1: we are also footing the bill here in New Zealand
• 0:06
  Speaker 1: stats New Zealand food price figure show cheese is up
• 0:09
  Speaker 1: thirty percent on last year, butter prices are up forty
• 0:12
  Speaker 1: six point five percent for the year eight dollars sixty
• 0:15
  Speaker 1: the average price for a block. That's up five bucks
• 0:18
  Speaker 1: over the last decade. So Carl Dean is up early
• 0:22
  Speaker 1: for us, and that's no surprise because he is the
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  Speaker 1: Dairy Group chair for Federated Farmers. Morning to your Carl, morning,
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  Speaker 1: new gig for you, is it? Yeah?
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  Speaker 2: You have for three weeks in the role here, so
• 0:35
  Speaker 2: definitely given, slowly give in the hang of it.
• 0:37
  Speaker 1: Now, this butter thing, I know it's good for farmers,
• 0:40
  Speaker 1: but it's bad for inflation. So what do you have
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  Speaker 1: to say about it?
• 0:45
  Speaker 2: So what I've had it it's sort of an accumulation
• 0:49
  Speaker 2: of effects. There seems to have been a global trend
• 0:53
  Speaker 2: towards more consumption abutter, especially in the last five years,
• 0:58
  Speaker 2: but especially in the last months. You know, there's been
• 1:02
  Speaker 2: just a huge We've just got a huge difference in
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  Speaker 2: the price that we have now. Yeah, we normally have
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  Speaker 2: a high payout.
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  Speaker 1: Well, the question we have a high payout.
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  Speaker 2: It's because of a very you know, the last time
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  Speaker 2: we had high paouts because we had a good list
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  Speaker 2: and the commodities across the board. And at the moment,
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  Speaker 2: two of the commodities are standing out really well, which
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  Speaker 2: is look fat and butter and yeah.
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  Speaker 1: You know, you know the question, the question that everybody
• 1:37
  Speaker 1: says when they go to the supermarket is Okay, we
• 1:39
  Speaker 1: understand the high international export prices. We think that's awesome.
• 1:43
  Speaker 1: Go the farmers. Yes, you are the backbone over our economy.
• 1:45
  Speaker 1: We know where our food is made. This is just great. However,
• 1:48
  Speaker 1: at the same time we make this stuff, and so
• 1:50
  Speaker 1: why do we have to pay the export price?
• 1:54
  Speaker 2: Well, that's a very good question. But unfortunately for New
• 1:58
  Speaker 2: Zealand consumers, the trend for butter is a relatively new
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  Speaker 2: one in terms of globally. You know, if you think
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  Speaker 2: that fifteen years ago when a lot of New Zealand's
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  Speaker 2: dairy boom happened. Twenty years ago, milk powder plants were
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  Speaker 2: built because they were the most efficient to make a
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  Speaker 2: exportable product of raw milk. A butter plant takes a
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  Speaker 2: lot of time, a lot of money to build and develop,
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  Speaker 2: and you would have to wonder whether globally we are
• 2:33
  Speaker 2: sharing the shortage of butter and cheese processing plants.
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  Speaker 1: Okay, so is this a butter bubble and if so,
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  Speaker 1: if it is a butter bubble, will it burst or
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  Speaker 1: can we get well, do we have to get used
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  Speaker 1: to high butter prices going forward?
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  Speaker 2: Well, I would say, unfortunately for dairy farmers and probably
• 2:53
  Speaker 2: fortunately for consumers, what goes up will normally come back down.
• 2:58
  Speaker 2: If we look in the past, normally these bubbles do
• 3:02
  Speaker 2: go up and then they come down down. And the
• 3:04
  Speaker 2: question normally is as consumed myself, I still have to
• 3:07
  Speaker 2: buy butter. The question is do we see how quickly
• 3:12
  Speaker 2: do the supermarkets or the wholesaler's pass those drops on
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  Speaker 2: because of the butterprice drops twenty we all want to
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  Speaker 2: see that supermarket drop at least, you know, for theme
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  Speaker 2: percent at least.
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  Speaker 1: Ye and we want to see it in quick time
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  Speaker 1: as well. And should we warn farmers to be a
• 3:30
  Speaker 1: bit cautious because they've had a couple of windfalls in a row.
• 3:33
  Speaker 1: They can't expect this to be going forward consistently as well.
• 3:37
  Speaker 1: They have to make smart financial decisions, don't they.
• 3:41
  Speaker 2: Yes, I mean, the current hats are really built on
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  Speaker 2: our loan news on door at the moment, and literally,
• 3:49
  Speaker 2: when I look at the graphs right now, it is
• 3:52
  Speaker 2: literally due to butter and cheese and milk fat holding
• 3:56
  Speaker 2: up the payout. So if those two drop away, the
• 4:00
  Speaker 2: payout will drop rather quickly and we'll go back into
• 4:04
  Speaker 2: the eight dollar mark. So what goes eight dollars?
• 4:07
  Speaker 1: And back on the eight dollars? Mate, we won them
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  Speaker 1: back to the five dollars sixty PAMs, if you don't mind, I'm.
• 4:13
  Speaker 2: Meaning, I'm meaning for the dairy payout.
• 4:16
  Speaker 1: I go to, I go to.
• 4:17
  Speaker 2: Yeah, when we were getting paid eight dollars, I think
• 4:19
  Speaker 2: battle was getting around the five dollar mark.
• 4:22
  Speaker 1: That's right, That's right, all right, Carl, I thank you
• 4:24
  Speaker 1: so much for getting up earlier. Carl is the brand
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  Speaker 1: new dairy chair for Federated Families. By the way.
• 4:30
  Speaker 2: For more from Early Edition with Ryan Bridge, listen live
• 4:33
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• 4:36
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