New Zealand Dairy Board Aims for Industry Unity

The New Zealand Dairy Board is making a push for industry unity, aiming to bring together farmers, processors, and other stakeholders to create a more cohesive and effective industry. This initiative is crucial for the country's dairy sector, which is a significant contributor to New Zealand's economy.

The New Zealand Dairy Board was established in 1961 to promote the country's dairy industry and to provide a unified voice for dairy farmers and processors. By working together, the board aims to increase the industry's competitiveness and profitability.

One of the key challenges facing the New Zealand dairy industry is the need to balance the interests of different stakeholders, including farmers, processors, and exporters. The board is working to address this challenge by developing policies and strategies that benefit all parties involved.

A mega-merger is in the works, with the Dairy Board and nine companies applying for authorisation to form one company.

The proposed merger involves the Dairy Board and nine other dairy companies, including Kaikoura Co-operative Dairy Company Limited, Kiwi Co-operative Dairies Company Limited, and Tasman Milk Products Limited.

The Commerce Commission will investigate the application and make a decision by September 13.

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The Dairy Board and nine dairy companies are seeking approval for a mega-merger that could have a major impact on New Zealand's economy.

Dairying is one of the biggest industries in New Zealand. The proposed merger involves the Dairy Board and nine other dairy companies.

The Commerce Commission has received the application and will investigate it thoroughly. The Commission expects to make its decision by September 13.

The Commerce Act prohibits business acquisitions that result in dominance being acquired or strengthened in any markets. However, an acquisition that would otherwise be prohibited can still be authorised if the Commission is satisfied that public benefits outweigh the detriments.

The Commission will publish a draft determination giving a preliminary decision on the application. Interested parties can make submissions on the draft determination and a conference may also be held.

The applicants have asked for some information in their application to be treated as confidential. The Commission is considering this request and a public version of the application will be available in due course.

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The New Zealand Dairy Board was first established in 1923 as the Dairy Produce Export Control Board, with the aim of managing the export of dairy products and giving the growing sector some cohesive power.

It was set up in the wake of price crashes after WWI, and was backed by an Act of Parliament, giving it a number of legislative powers.

The board's strength enabled significant savings in transport, as well as savings from cool storage management and other co-ordination.

Exports were largely headed for the Motherland – the United Kingdom – by ship, with the board's control allowing for more efficient logistics.

For a brief period around 1935, the board had a degree of marketing control, but the Labour government then brought in a guaranteed minimum price and set up a state marketing programme with varying success.

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The New Zealand Dairy Board is a significant player in the global dairy industry. New Zealand is the world's largest exporter of butter, accounting for over 18% of global exports.

The country's dairy industry is driven by its favorable climate and geography, which allows for high-quality milk production. The New Zealand Dairy Board has been instrumental in promoting the country's dairy products globally.

The Board's efforts have led to a significant increase in the country's dairy exports, with a value of over $13 billion in 2020. This growth has created new opportunities for dairy farmers and processors in New Zealand.

New Zealand's dairy industry is known for its high standards of quality and sustainability, with many farms adopting environmental practices and certifications. The New Zealand Dairy Board has been at the forefront of promoting these practices and standards globally.

The country's dairy industry is also characterized by its strong focus on research and development, with the New Zealand Dairy Board investing in initiatives to improve milk quality, animal health, and farm productivity.

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The New Zealand Dairy Board's market dynamics were heavily influenced by government intervention, which created significant price volatility from the 1930s to the 1960s.

A stabilisation account was set up by the government to manage farmer returns, and a Dairy Products Marketing Commission was established to set the guaranteed minimum price and manage marketing.

The minimum price was a contentious issue, with farmers arguing it didn't rise in line with farm costs, leading to tensions between the government and dairy industry representatives on the commission.

The government enabled legislation in 1961 to bring the commission and the board together as the NZ Dairy Production and Marketing Board, and this was amended in 1965 to drop Production and Marketing from the name.

The New Zealand Dairy Board, now known as Fonterra, has a long history of navigating trade barriers and tariffs to keep its lines of trade open in established markets. This involved close collaboration with the government to ensure the dairy industry remained competitive.

Through the 1970s and 2001, the board's leaders and staff worked tirelessly to open new markets, including ventures in Russia during the 1980s. These were indeed intrepid endeavors at times.

The board's strength has been its people, with notable names like Bernie Knowles, Murray Gough, Dryden Spring, and Jim Graham leading the board and its management. They helped create legends and drive the board's success.

In the 1980s, the New Zealand Dairy Board partnered with CMG to introduce Anchor milk powder to the local market. This partnership revolutionized the dairy consumption within the local market.

The board's focus on added value brands and savvy marketing helped boost success in Asia, particularly in the late 1980s. The purchase of Chilean company Soprole marked the start of new partnerships in the Americas.

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Setting the milk price was a complex issue in New Zealand, with much contention over the years.

The government established a stabilisation account in the late 1940s to help manage farmer returns. This was a major step towards regulating the dairy industry.

A Dairy Products Marketing Commission was set up in the late 1940s to manage the setting of the guaranteed minimum price and marketing. This commission had statutory powers and included government and dairy industry representatives.

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The minimum price was a topic of much contention, with farmers arguing it didn't rise in line with farm costs. This led to significant price volatility and distortions in the industry.

The government enabled legislation in 1961, bringing the commission and the board together as the NZ Dairy Production and Marketing Board. This marked a significant shift in the industry's structure.

The Act was amended in 1965 to drop Production and Marketing from the name, and the board became the New Zealand Dairy Board. This change had a lasting impact on the industry's governance.

In 2001, the board's assets were apportioned back to the co-operatives, marking a significant change in the industry's dynamics. This move was part of a larger trend of dairy co-operative mergers.

As the US trade policies continue to evolve, it's essential to stay ahead of the curve and anticipate potential tariff shifts. Tariffs on Chinese goods have already been implemented, with a 25% tariff on $50 billion worth of goods, and a 10% tariff on an additional $200 billion worth of goods.

Tariffs on Chinese goods have already had a significant impact on US businesses and consumers, with many companies passing on the increased costs to customers. The average tariff rate on Chinese goods imported into the US is around 10%.

The US has also imposed tariffs on steel and aluminum imports from several countries, including Canada, Mexico, and the European Union. These tariffs are intended to protect US industries, but have also led to retaliatory measures from affected countries.

The impact of tariffs can be unpredictable and far-reaching, affecting not only businesses but also consumers and the overall economy.

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New Zealand has a remarkable dairy industry, and the New Zealand Dairy Board was at the heart of it. The Board was a conventional monopoly produce marketing board responsible for marketing the production of New Zealand's many dairy farmers.

By the mid-1980s, institutions like the NZDB were no longer fashionable due to political pressure favoring free markets and deregulation. The conservative administration in New Zealand began to privatize many state-owned businesses, eyeing the produce boards for treatment.

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The NZDB was a huge business, with sales of $US 3.25 billion in 1997 coming from the supply of dairy-based ingredients to other food and dairy processing companies and from the Board's own branded consumer products. Consultants found a superb milk-producing machine with no subsidies and some of the lowest milk costs in the world.

Expansion was limited to the organic growth made possible by increasing milk supplies, averaging only 4% per annum. The Board had serious constraints and weaknesses, including a lack of mechanism to divert extra milk supply into value-added products.