NZ Economy Helped by Dairy Farms — Thriving, Subsidy Free, Grass Based

4. January 2008 by P. Leslie Riley.

Mississippi’s once prosperous dairy industry is at crisis levels & may not exist much longer. Commissioner Spell in the Mississippi State Debate said this was a natural consequence of market forces.

Conventional “wisdom” big governement/ big corporation/ big land grant-USDA “experts” agree with this. The belief that they share with all is :
1) Dairy farms must be on a mega scale, confinment oriented, in dry climates, corporate owned heavily financed & with heavy inputs. And that there will be fewer and fewer.
Because of this, Mississippi cannot compete with new non-traditional dairy areas like California, Arizona, Wesr Texas, and Idaho where the arid conditions are “ideal” to put 4000 or 5000 head confinement dairy operations on 40 to 100 acres. Hire lots of help & “efficiently” run it like a factory.
2) This same folks also push for heavy subsidies on milk to “help” family farms ( they never quite say why the number of farms has decreased in direct proportion to the size/ number of dairies)
3) And, “conventional wisdom” is that Agriculture is at worst an impediment and at best a afterthought/ minor component of a healthy & growing economy.

Turning this “conventional wisdom” on it’s head with facts is New Zealand.
New Zealand’s dairy farms are almost exclusively grass based/ family owned
New Zealand got rid of subsidies 10 years ago — and are thriving.
And, according to the article below, New Zealand’s economy is in a slow down, but it being proped up by : the dairy industry.  Go Figure.

There is no reason that Mississippi can’t have a thriving dairy industry again that offers prosperity for hard working family farmers; produces healthier milk, cheese, butter, etc. for  Mississippians (which would, in turn, drive health care cost down); provides better Stewardship of God’s Creation; and is a vital part of economic growth for rural communities.

BUT, as we all know, one definition of insantiy is to continue doing the same thing, the same way, and expecting different results.

 http://www.nzherald.co.nz/topic/story.cfm?c_id=195&objectid=10484890

 Dairy bonanza likely to soften slowdown

5:00AM Tuesday January 01, 2008
By Brian Fallow 

The housing market is at a standstill.

The country ended 2007 with some respectable numbers on its economic report card.

The economy expanded 3.3 per cent in the year ended September, while inflation over the same period was 1.8 per cent.

The unemployment rate is 3.5 per cent, a record low.

The terms of trade - relative prices of the kinds of things we export compared with the kinds of things we import - are the most favourable since 1974.

The Government’s coffers are overflowing.

But the outlook is less rosy than these numbers would suggest. On a quarterly basis growth peaked back in March.

The economy expanded as much in the first half of 2007 as it had over the previous year and a half.

But it has slowed markedly since then as households, whose consumption represents more than 60 per cent of economic activity, battle higher mortgage rates and global inflation in oil and food prices.

The consensus among economic forecasters is that private consumption growth will run around 1.6 or 1.7 per cent through 2008 and 2009, the weakest rate since 2000.

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That is in spite of household incomes being underpinned by brisk wage growth, the prospect of tax cuts and a tsunami of dairy cash.

The problem is that the necessities of life - housing, food and energy - are gobbling up a larger share of people’s incomes, leaving less to spend on other things.

The housing market has flipped from one in which house prices were climbing and borrowing costs were low to one where house prices are flatlining but borrowing costs are rising.

After doubling over the the previous six years house prices, as measured by the Real Estate Institute’s national median, have been going sideways since May.

But the long boom has pushed the average house price to six times the average household disposable income, nearly twice its long-term average.

Households with mortgages are consequently carrying much more debt relative to their incomes than they used to and are more exposed to interest rates.

And with fear and suspicion now the dominant sentiment in international credit markets, the days when New Zealand banks could tap cheap money offshore to fund home loans are over.

Two-year fixed mortgage rates are now the highest they have been for nearly 10 years.

The average mortgage rate being paid is around 8 per cent, the highest since October 1998, and the Reserve Bank expects it to approach 9 per cent by 2009.

About 30 per cent of all fixed-rate mortgages, representing a quarter of all mortgage debt, come up for an interest rate reset over the next 12 months. At currently available mortgage rates these borrowers will face increases of 0.7 to 1.5 percentage points.

Meanwhile the plateau in house prices is expected to turn off a phenomenon which has turbocharged the domestic spending side of the economy in recent years: the wealth effect.

That is when people borrow and spend some fraction - a few cents in the dollar - of the increase in the value of the equity in their homes, allowing spending to grow faster than incomes.

The biggest new factor on the positive side of the income ledger is the prospect of a bumper dairy payout.

It will pump about $4 billion more cash into the economy than last season, says Westpac chief economist Brendan O’Donovan. And it will all get spent, he believes.

While some farmers will take the opportunity to reduce their debt, others will borrow to expand their operations. Rural land prices have already risen sharply as farmers do what they always do and capitalise improved returns, O’Donaovan says.

“In aggregate they won’t be paying down debt, they will be leveraging up.”

But it takes time for higher farm incomes to flow through the rural towns to the big cities.

And every silver lining has its cloud.

The global “agflation” that is boosting dairy farmers’ incomes is also making trips to the supermarket an increasingly expensive business.

Likewise the tightness of the labour market underpinning wage growth is partly because of a dwindling of net migration inflows as a widening income gap lures more and more New Zealanders across the Tasman.

The Reserve Bank forecast inflation to be above 3 per cent all through this year.

Crucially, it also expects it to remain in the top quartile of its target band of 1 to 3 per cent through 2009 as well, even with interest rates and the dollar remaining at their current elevated levels.

Those projections assume $1.5 billion worth of tax cuts, which may well prove to be on the low side, and do not include the impact of the emissions trading scheme on transport fuel costs from the start to 2009.

This makes for an environment in which the central bank has little”headroom” to accommodate further upward pressure on inflation.

Yet the international environment might deliver just that.

The global credit crunch could well get worse before it gets better.

If 2007 is anything to go by, when global risk aversion goes up the kiwi dollar goes down and investors lose their appetite for the carry trades which underpin the exchange rate.

That might be blessed relief for exporters but it pushes up the cost of imported goods.

The biggest uncertainty overhanging the economy in 2008 is how the global credit crunch, arising from the US sub-prime mortgage crisis, will play out. Rising global interest rates would be bad news for us, a country up to our neck in debt.

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This story was found at:
Copyright ©2007, APN Holdings NZ Limited

Posted in Foriegn Agriculture, Alternative Crops & Enterprises, Organic vs Conventional Faming, Over Regulation of Agriculture, Sale of Meat Direct to Consumers, Lester Spell, Mississippi Politics, Grass Farming, Dairy Farming, How Agriculture affects Everything else, Smaller Government, Freedom in Agriculture, Rural Development, Farm Subsidies, Difficult Issues in Agriculture & Rural Life, Agrarianism, Big vs Small Farms, Mississippi Agricultural News, Family farm Opportunities | Print | No Comments »

Agriculture of the Middle — Why should you care ?

3. December 2007 by P. Leslie Riley.

There is a fairly new project/ web site called “Agriculture of the Middle” that anyone who cares about farm policy of rural culture should check out.

 This piece is particularly worth checking out —

Why Worry About the Agriculture of the Middle?

Posted in How Agriculture affects Everything else, Agrarianism, Big vs Small Farms, Difficult Issues in Agriculture & Rural Life, Rural Development | Print | No Comments »

Family Dairys vs Industrial, Globalist “MegaFarms”

3. December 2007 by P. Leslie Riley.

During my 2007 campaign for Ag Commissioner , two themes that repeatedly came up were how to best help Mississippi’s family farms & the possibly pending disapperance of the Dairy industry in Mississippi

I found the piece below on John Phipps’ excellent blog; is this just market forces at work ? Is the consolodation & even globalization of dairy farming a market-driven inevitability ? For at least two dozen reasons, I sure hope not.

You call that big?…

The injection of enormous new profits into agriculture should be the answer to the survival of small farms, right? I’m not so sure.

We’re just beginning to grasp that the economies of scale for industrial ag are over the horizon. From new module-building cotton pickers, to Class MMDXVL combines, fewer actual people are needed to reap those higher profits.

While smaller agrarian farms will flourish, the middle cannot hold, I believe. It cannot occur overnight, because of land ownership patterns, but the trend to consolidation is immune to government policy. The economics are simply too powerful to tolerate irrational business models.

Proof #16 - This announcement from EU dairy giant Danone:

Quote:

Danone is mulling the creation of several giant dairy farms around the world in order to secure supplies amid rising milk prices.The farms could be similar to that run by Al Safi, its partner in Saudi Arabia. Al Safi runs reputedly the biggest dairy farm in the world, situated 40 kms from Riyadh with a herd of 32,000 cows imported from Europe and the US. Danone uses milk from the farm to produce yogurts.

I will be in Las Vegas this week talking to the top of our dairy industry at the Elite Producers Conference. Those guys can teach the grain industry a few things, I’ll bet.

Posted in Agrarianism, How Agriculture affects Everything else, Big vs Small Farms, Difficult Issues in Agriculture & Rural Life, Rural Development, Family farm Opportunities | Print | No Comments »

Post Election Statement from the Wasp that Won’t Die

7. November 2007 by P. Leslie Riley.

Support Idealism over Cynicism — Vote Riley for Agriculture
www.RileyForAgriculture.com -
A Conservative Voice for Rural Mississippi - Smaller Government & Safer Food for All

Dear Friends of Freedom & Farming in Mississippi,

I called Commissioner Spell this morning to congratulate him on his victory. When I got off the phone, I heard Dr. Marty Wiseman ( Director of the John C. Stennis Institute of Government at Mississippi State) being interviewed on the radio about the election results and our race came up.

Dr. Wiseman, told the host that “third party candidate is like a red wasp. They sting & it hurts, but then they go away & die.”

As Mark Twain quipped, “Reports of my demise have been greatly exagerated.”  I think Dr. Wiseman may need to go over to MSU’s entemology dept & check his facts. Unlike bees, wasps do not die after they sting and can sting multiple times.I am writing to thank the voters of Mississippi for giving me nearly 50,000 votes (7%) – even though we did not have the resources or name recognition of my two opponents; to thank the handful of media outlets that gave our campaign a fair hearing; to let people know that Les Riley and the Constitution Party have a lot to build on and will be heard from again; and to declare victory on several fronts — even though we weren’t able to get enough votes to take the office this time.1) We won because we did our duty. Stonewall Jackson & John Quincy Adams both made similar statements along the lines of “Duty is ours, results are God’s”.

2) We won because we introduced ideas & principles about the role of government that were long since thought of as forgotten.

3) We won because we ran a postive, honourable, issues-based campaign. We pushed our ideals & our vision. In this age of vicious character assasinations and surface level marketing of a candidate like any other product we have done things the right way.

4) We won because we have given Mississippians something to vote for rather than merely something to vote against.

And

5) We won because we have made so many new friends and built a grassroots coalition that we can work with to have a postitive impact on our state for years to come .

So, again, I want to thank the people that supported the Riley for Agriculture campaign and to let people know that the Mississippi Constitution Party & Les Riley will not be “dying & going away” anytime soon. I hope to be a voice for reform in farm policy, for limited government, for rural development & for safe food.

And the Constitutition Party may be stinging again quicker than the experts think.

Thank you again,

Paul Leslie (Les) Riley,Jr.

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Posted in 3rd Parties, Constitution Party, Lester Spell, Rickey Cole, Media Coverage, Riley for Agriculture Campaign, Smaller Government, How Agriculture affects Everything else, Mississippi Politics, Freedom in Agriculture | Print | No Comments »