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 »

Freedom-loving Farmer Arrested in Mich

3. December 2007 by P. Leslie Riley.

If this doesn’t make your blood boil, then you have no idea what this country was founded upon — if it does, get involved.

Even though the election is over, our battles have just begun :
http://www.thenation.com/doc/20071203/gumpert

Old McDonald Had a Farm…and He Got Arrested?

Just in time for the holidays, four beef carcasses hang from the improvised slaughterhouse at Greg Niewendorp’s 160-acre farm outside East Jordan, in the north of Michigan’s lower peninsula. It should be a happy Thanksgiving because, for the first time in eight months, his farm isn’t under quarantine by Michigan’s Department of Agriculture (MDA) and Niewendorp is free to slaughter cattle from his herd of twenty and fulfill contracts in time for the holidays to the couple dozen friends and neighbors who prize the specially bred grass-fed beef he produces.
Yet it’s also a bittersweet time, because the scars from his battle with the MDA are still fresh. Last February, he refused to subject his cattle to a mandatory state program to test cattle in his region of Michigan for bovine tuberculosis–a program he argues, among other things, is unnecessary because he distributes his beef privately to people who trust his animal-raising techniques, but which the state insists is essential to ensure the beef isn’t tainted.

The state immediately slapped a quarantine on his farm, prohibiting the movement of animals onto or off the property. Then, in August, an MDA inspector arrived, escorted by two Michigan State Police officers, and attempted to convince Niewendorp to have his cattle tested by a vet waiting down the road. Niewendorp angrily ordered the inspector and police off his property, telling them that, without a search warrant, they were trespassers.
Finally, in early October, a team of MDA inspectors and vets arrived again, this time with a search warrant and two sheriff’s deputies–and backed up by a half-dozen state trooper SWAT team members and three emergency medical vehicles down the road.

Niewendorp is convinced that “they would have liked to have killed me,” but this time he didn’t resist, so the vets did their deed and left. All the tests came back negative and the state lifted its quarantine last month.

While the matter is over for the state, Niewendorp says it’s just begun for him. “They’ll need a search warrant to do the test next year.” He’s also organizing the Michigan chapter of the National Independent Consumers and Farmers Association and says next year more Michigan farmers will refuse the test.

These should be happy times for owners of small farms. Not only are commodity prices way up, but the buy-local movement has caught fire around the country. Rapidly growing numbers of people are embracing the romantic notion of buying food directly from area farmers, sometimes driving hours into the countryside to buy veggies, meat and milk.

The number of farmers markets over the last five years has increased more than 50 percent, to nearly 4,500 from 2,800, according to the US Department of Agriculture. Since the European idea of Community Supported Agriculture (CSA) was adopted by a handful of US farms twenty years ago, enabling consumers to buy shares in the output of local farms, the concept has been adopted by as many as 3,000 small farms across the US. Thousands of consumers are trekking out to dairy farms to purchase suddenly popular unpasteurized milk for its perceived health benefits over the pasteurized stuff, according to the Weston A. Price Foundation, a promoter of raw (unpasteurized) milk consumption. (Retail sales of raw milk are prohibited in most states).

Cracking Down

But as the re-emergence of a farm-to-consumer economy draws increasing amounts of cash out of the mass-production factory system, the new movement is bumping up against suddenly energized regulators who claim they want to “protect” us from pathogens and other dangers.

Federal and state agriculture and health authorities say farmers are violating all kinds of regulations to meet fast-growing consumer demand, such as slaughtering their own hogs and cattle instead of using state and federally inspected facilities, and selling unpasteurized dairy products and cider without the proper permits. Farmers feel there are other issues lurking in the background and driving the regulators–for example, the National Animal Identification System (NAIS) under which farm animals are tagged with computerized chips for tracking; in most states the federal program is voluntary, but in Michigan it is mandatory, so the regulators who tested Greg Niewendorp’s cattle for bovine TB also affixed radio frequency identification tags to their ears.

Whatever the immediate cause, the result is the same: regulators are cracking down on small farms with a ferocity that has their new urban customers aghast.

In just the last few weeks, there have been at least a half-dozen notable incidents. In Virginia’s Nelson County, ten agriculture agents, aided by state police hauled off 62-year-old custom hog farmer Richard Bean, and his 60-year-old wife, Jean Rinaldi, for slaughtering their own hogs, charging them with a felony and eleven misdemeanors. Bean and Rinaldi were frustrated with the expense of having to haul their hogs more than two hours to the nearest slaughterhouse, and felt they could do it as well or better themselves.

In New York, health authorities shut down Munir Bahai’s apple cider operations in Victor on his busiest weekend of the season in early October, costing him $4,500 in sales because he wasn’t pasteurizing his juice. He says consumers travel thirty miles or more to buy his cider simply because it isn’t pasteurized.

Also in New York, the Department of Agriculture and Markets a few weeks ago quarantined the raw milk yogurt and buttermilk at Barbara and Steve Smith’s Meadowsweet Farm outside Ithaca, saying the state’s raw-milk permit program allows the direct sale only of milk, and prohibits other dairy products. Barbara Smith says she doesn’t sell the dairy products but rather distributes them to 130 consumer shareholders of a limited liability company (LLC) she set up as the owner of her farm’s eight-cow herd, and therefore is outside the purview of the state’s raw-milk permit system.

Some farmers are responding as Greg Niewendorp did in Michigan, with outright civil disobedience. In Pennsylvania, dairy farmer Mark Nolt continues in a standoff with agriculture authorities because he refuses to sell his raw milk under a state license. In August, authorities confiscated thousands of dollars’ worth of milk products using a court order. He argues that because he has private contracts with his area customers, he doesn’t need a license, and he continues to sell directly to consumers, despite the fact he could be arrested at any time.

The situation has gotten so bad that a group of consumers and lawyers banded together last summer to provide legal support to besieged farmers via the Farm-to-Consumer Legal Defense Fund. Its first two cases involve farmers in New York and Pennsylvania–both distributing unpasteurized milk privately to consumers. Protecting Whom?

As much as regulators like to talk about protecting consumers, when you speak with them, it sometimes sounds more like they want more to protect corporate interests.

Bridget Patrick, who is Michigan’s Bovine Tuberculosis Eradication Project Coordinator, told me recently that the case of Greg Niewendorp resisting testing of his herd “is a human health issue as well as an industry issue.” Bovine tuberculosis can be passed on to people, she stated. Moreover, the fact that Michigan is one of a few areas in the US that still has evidence of bovine TB “has been a problem for the whole country” because some foreign markets won’t buy American beef as a result.

She strongly suggested that Niewendorp was a spoilsport for not going along with the testing. ” We need to have everyone participate in the program” to prove bovine TB has been eradicated. Dairy regulators use the protection argument to justify their crackdown on raw-milk producers, though they tend not to mention the obvious: If consumers are buying milk unpasteurized, then that doesn’t leave much for processors to do. Nor do any of the regulators like to talk much about the new economic model that is emerging in the farm-to-consumer model. Farmers who sell their cattle to processors may receive $2 a pound, compared to anywhere from $5 to $18 a pound, depending on the quantity purchased and the cut of meat, when they do their own slaughtering. Similarly, when dairy farmers sell milk to processors for pasteurization, they receive in the neighborhood of $1.50 to $2.50 a gallon (depending on bacteria counts and whether the milk is organic). When they sell direct, they receive $5 to $10 a gallon. Such discrepancies help explain why the farm-to-consumer model is “the gateway to farm prosperity,” says Pete Kennedy, a lawyer who represents farmers both for the Farm to Consumer Legal Defense Fund and the Weston A. Price Foundation. Lawyers like Kennedy argue that buying food directly from local farmers amounts to a contract between private parties, covered by the US Constitution. That argument won the day in Ohio earlier this year, when a state court overturned an Ohio Department of Agriculture revocation of a dairy farmer’s milk license, ruling her “herdshare” arrangement, whereby dozens of consumers bought shares in the farmer’s cows so as to gain access to raw milk, was legitimate. But this battle has a long way to go. The wide discrepancy in prices farmers receive by selling direct and cutting out corporate distributors and processors, not to mention grocery chains, may help explain why the government is coming down as hard as it is on farmers. Regulators and their legislator bosses are clearly prepared to use intimidation to put a halt to such nonsense before it gets completely out of hand.

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Posted in Over Regulation of Agriculture, Efforts to Harm Rural Interests through "Divide & C, Beef Cattle, Sale of Meat Direct to Consumers, Grass Farming, Food Safety, Agrarianism, Freedom in Agriculture, Smaller Government, Difficult Issues in Agriculture & Rural Life, Big vs Small Farms, Family farm Opportunities | Print | No Comments »