Big dairy production increase not wanted

Press, 1 July 1983, Page 17

Big dairy production increase not wanted

PA Wellington The dairy industry cannot afford large production increases under present marketing conditions, according to the Dairy Board’s chairman, Mr Jim Graham. The world’s open dairy markets are greatly oversupplied and substantial increases in dairy exports would receive only marginal returns, he told the Federated Farmers’ dairy section annual conference. “A reasonable level of increase (in production/of 1 or 2 per cent a year, we can live with quite easily. Five or 6 per cent is a different story. “What we do not want at this stage is any greater quantities of milk than we are now selling, because if we have to take a given sum for that milk, any extra we produce is simply going to end up earning you and me less money.” Mr Graham said the board had asked the dairy companies to stop paying incentives to non-dairy farmers to come into dairying.

The board was not seeking to penalise existing dairy farmers. The country should expect expansion of production as a result of genetic improvement of the herd and improved management, he said.

But there should not be any over-all increase in the amount of land devoted to dairying, Mr Graham said. Thai still allowed for land going out of dairying to be replaced.

An Australian dairy leader, Mr Bill Pyle, gave the same message. Mr Pyle, president of the United Dairy Farmers of Victoria, said there should be price penalties for surplus production. He said New Zealand dairy farmers could not go on increasing milk production for ever.

“Surplus production is not wanted and cannot be justified even on the basis that some Third World countries

are impoverished.” Public stocks of butter in the European Economic Community are expected to reach one million tonnes this year, and skim milk powder stocks had alreacy reached 700,000 tonnes. At the same time, milk production and the prices paid to Common Market milk producers continued to rise. “Europe can afford such insane policies. Australia

and New Zealand cannot,” he said. “There can be no justification whatsover, even under the guise of taking the long-term view, for encouraging dairy production surpluses in our two countries at the present time.” Mr Pyle said he did not want the two industries to be wound down, but to reconsider their aims. There should be realistic production targets with a margin for contingencies.