World Trade Markets Are
BY JOYCE BUPP
York County Correspondent
LAS VEGAS - If American
dairy fanners think they have it
tough, pricewise, they should try
dairying in New Zealand.
And, New Zealanders aren’t shy
about wanting access to U.S.
markets with their excess milk
production, especially in casein
sales.
That was the essence of a
presentation by The Right
Honorable Sir Wallace Rowling to
the National Milk Producers
Federation, meeting last week at
Caesar’s Palace. Rowling, New
Zealand’s diplomatic Ambassador
to Washington, made world dairy
industry comparisons during a
panel debate on international
trade.
Other panel participants were
Montana Senator John Melcher;
Brian Joyce, president of the Irish
Dairy Board; Bruno Julien,
agricultural attache to the
Delegation of the Commission of
the European Economic Com
munity; and Tom Smith, president
of Cal Cot, an organization of
California cotton producers.
Prices received last year by New
Zealand’s dairy fanners averaged
$5.43 per hundredweight for 4.7
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percent butterfat test milk, or the
equivalent of $2.02 per hun
dredweight for 3.5 percent fat test.
However, cows in this southern
hemisphere dairying country
graze year round in a favorable
climate, making grass the staple
and highly efficient basis of the
feeding program. With no building
investment or maintenance
overhead and very low levels of
protein concentrates used in feed
rations, New Zealand production
costs are thus held to a minimum.
And, because of the comparatively
low economic returns from
milking cows, most farmers
cushion income additionally with
herds of beef and/or sheep.
Still, Ambassador Rowling
laments the New Zealand dairy
industry being “ravaged by price
collapses four times in the past 30
years ... other traders have
climbed into the market at lower
prices.”
Exporting milk surplus, largely
in the form of the milk protein
derivative casein, a good portion of
it to the U.S., provides New
Zealanders with added price
stability. Rumblings of cutting
casein imports into the U.S. makes
New Zealanders edgy. New
Zealand casein, claimed Rowling,
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is produced with no government
subsidy, and in response to a
demand from the U.S. food in
dustry. He added that casein is the
one dairy product traded in
ternationally without barriers.
“Any surge of retreat into
protectionism in the U.S. would
plunge the Western world into a
trade war of gargantuan dimen
sions,” warned Rowling. Fur
thermore, he added, 14 of the past
15 years, the U.S. has seen a
favorable balance of trade with
New Zealand. “Our country’s
future is closely tied to world
trade, and it would be a hardship to
have to climb over greater trade
barriers.”
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Senator John Melcher of Mon
tana remained unswayed by
Rowlings arguments against trade
barriers.
“Is a $l6O billion trade deficit a
way to have more equitable
trade?” thundered the long-time
ag supporter, and veterinarian
tumed-senator.
Melcher harshly criticized the
Reagan administration for not
taking a tougher stance on the
trade deficit, promising that
Congress will do it if die ad
ministration fails to act to more
favorably balance trade.
Lancaster Fanning, Saturday, December 13,1M6-Al9
“We should have sent cheese to
Khomeini instead of armaments,”
Melcher criticized. “There has
been too much emphasis on ad
venture with armaments.”
Offering an alternate solution to
cutting back dairy food surpluses
on hand, Melcher advocates
donating larger quantities of
government stored products to
developing Third World nations, as
both humanitarian assistance and
toward generating new market
interest. He plans to introduce a
bill during the next session of
Congress to direct study on
methods of adding certain en
zymes to non-fat dry milk, in order
to make it digestible and useful in
the diets of lactose-intolerant
peoples.
Irish dairymen produce 12 billion
pounds of milk for a population of
3.5 million people, selling some 80
percent, or $1.25 billion worth, as
dairy product exports. Competing
on the world trade market,
laments Irish Dairy Board
president Brian Joyce, is “no
picnic.”
“International trade will not
solve the problems of world dairy
surpluses,” in Joyce’s opinion.
He sees only two ways to tackle
the mounting world dairy over
production: either let support
prices fall to the $6.50 world
market-clearing price, or establish
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quota systems.
According to Joyce, the EEC’s
quota program is successfully
working. For three years,
production has been rolled back to
1961 levels, an estimated reduction
of 15 billion pounds from what
European dairymen would be
producing without the quota
limitations.
World market price, said Joyce,
is about one-third of the U.S.
support price level. He labeled the
dairy industry “one of the most
protected in the world,” with
support prices too high.
EEC agricultural attache Bruno
Julien emphasized the European
dairymen’s philosophy that, if they
are buying U.S. grain to produce
milk, they should have some ac
cess to American markets in
return.
He criticized New Zealand’s
producers for increasing
production some 30 percent, fur
ther adding to world dairy surplus
levels, while EEC dairymen are
cutting back under quota
restrictions.
I .ike U.S. dairymen, European
producers are paying promotion
fees to enhance commercial sales
of dairy products. European dairy
consumption-boosting programs
include a school lunch program,
advertising, reduced prices for
low-income families and a special
nhristmas butter promotion.
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IN
Lancaster
Farming's
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