----- Original Message -----
From: "Thomas & Susan Wrchota" <wrchota@athenet.net>
>
> Hi Folks!
>
> Therefore, I believe NAFTA and WTO will only work (and be supported) up to
> this important threshold, which differs in each nation. If I'm correct,
> countries like New Zealand (large % exporters, without the benefits of
> huge
> domestic consumption) better emphasize bilateral agreements with their
> "natural" trading partners, rather than placing all their cards
on free
> trade.
>
> Regards,
>
> Tom Wrchota, Proprietor
> Cattleana Ranch
> near Omro, Wisconsin
>
Exactly.
It need not be the case where it is Kiwi dairymen vs. USA dairymen.
When over-supplying the US market pushes the US domestic price down, it is
the world market that follows. Vaughn has a difficult time grasping real
world economics. There are plenty of world markets where climate, limited
acres and other conditions make dairying difficult to impossible. Why
the Kiwis are being so stubborn in recognizing Red China is dairy resource
poor and has a population to feed, located with vastly lower shipping
distances???? Yes, you might not get the premium prices you get in the US
market but certainly the potential volume is there to do well. And if you
stop mucking the US dairy price, the world price will proceed upwards. If
Kiwi MPC is no longer headed into US cheese vats, the US cheesemakers will
have to use the US powder, rather than exporting it to the world market.
Now as to the role of the middleman. The middleman naturally desired low
raw materials, so his goals are exactly opposite of the dairy farmers'
goals. Co-ops handle over 80% of the milk produced in USA and they've been
damn poor servants of their member-owners. Little different than how Kiwi
farmers fare under a Fonterra who pays Aussie dairymen more because they
actually have competition in Australia. Fonterra marketing strategy as
being the low bidder acts as a drag upon world prices. That is the
reality. Not some subsidy conspiracy theory as expressed by Vaughan.
It is time the co-ops serve us, not the other way around.
Dave G.
