19 May 1995

Competition on the way

UK DAIRY farmers will have to become more competitive as the trend towards a free world market continues, according to New Zealand Dairy Board chairman, Sir Dryden Spring.

"Moves toward trade liberalisation and to containing budgetary costs are apparent around the world," he told journalists in London last week. For example, the United States was likely to become an unsubsidised exporter of dairy products within three years, he suggested.

Against this background Sir Dryden said he was "astonished" that some Europeans wanted to extend the milk quota system beyond the year 2000. The emphasis in New Zealand was to maximise competitiveness.

Although output from the mainly grass-based dairy industry fell by 2% in 1994/95 due to drought, the underlying trend in production was upwards.

World dairy prices had also increased over the past year, but the effects of this on dairy farmers incomes had been effectively negated by the 20% strengthening of the NZ$. Producer prices had risen just 3% to 8.5p/litre. &#42