Transcript Diapositiva 1

NZ and its rural productive model.
Learning from a global agricultural
leader.
JULIAN RAMIREZ – LUNA
BUSINESS DEVELOPMENT MANAGER
DEREK FAIWEATHER
CHIEF EXECUTIVE OFFICER
DAIRY SOLUTIONZ - WAIKATO INNOVATION PARK
HAMILTON, NEW ZEALAND
Points to be shared
1. What´s happening around the world – dairy
sector.
2. What Can be learnt from the New Zealand
and its International Experience ?
3. Two situations related to the NZ rural
development that could useful for Colombian
current situation
1. GLOBAL SITUATION: CURRENT STATE
The supply of food to meet human nutritional needs over next 40 years is quantitatively
equal to the amount of food previously produced in the history of human kind. D.E.
Bauman – US News & World Report
NZ =
Free range, lowest cost of production, high
quality, safe protein, 2% of world formal
production
Global leading Agtech Cluster for ongoing
productivity improvement tech & systems
Unsubsidized Wealth
Others =
Corn based, corn price linked to oil price, high
capital, high cost, est 90% of worlds formal
production
Marginal Business seeking subsidy /
protection to sustain high local prices
0
annually
monthly
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-08
Mar-08
May-08
Jul-08
Sep-08
Nov-08
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-06
Mar-06
May-06
Jul-06
Sep-06
Nov-06
1996
1998
2000
2002
2004
US-$ / 100 kg feed
Concentrate feed Prices
35
30
25
20
15
10
5
IFCN feed price indicator
Calculation based on feed concentrate with 70% corn and 30% soybean meal
Food Prices and Oil prices
NEW ZELAND
NEW ZELAND
•
•
Population: 4.4 million
Area: 270.000 square km
•
•
Dairy production: for 100 million of people
11 million head of cattle
Profitable NZ Grassland Farming
what is it all about?
•
•
•
•
•
Effective farm surplus per hectare, farming for profits not liters per cow
Lowest cost industrial production and highest quality
• US 22 to 23 cent per liter
Payment based on International prices
• US 42 cents per liter,
No subsidies: impossible for a small country to subsidize its No1 export industry
at over NZ$15billion per year
• 95% export
• 40% global trade
• 2-3% global production
• Our forecast indicates that annual demand increase for dairy is greater than
5 times the total annual production of Colombia.
Best NZ farmers are achieving NZ$4,000 EFS / hectare
2. LESSONS FROM THE EVOLUTION OF
THE NZ DAIRY INDUSTRY
1980´S ECONOMIC CRISIS IN NZ
Scale over time; more cows, fewer herds 1980 2010
400
1000
360
900
320
800
280
700
240
600
200
500
Season
Average kg milksolids per cow
Average kg milksolids per effective hectare
Average kg milksolids per effective hectare
Average kg milksolids per cow
Productivity growth per cow and per ha
Evolution in farming & processing
Family Farms
Family Farming Business
Mature Agri-Businesses
100 years
Household Farms
Large number of small processors, basic
products
Consolidation of processors, larger facilities,
Fewer processors, market exploration, product
exploration, early value chain integration
Few large processors, complex products,
industry integration & collaboration
Key Learning / Universal Truths
• Individual farmers have no commercial power
• Milk Production gravitates to where the factors of production are
the cheapest
• Value gets created and captured at both ends of the value chain,
either/both the farm level or in consumer Brands
• Political solutions to commercial problems do not last
Key Learning / Universal Truths.. Cont.
• New Zealand is low cost because it has to be. Farmers respond to
price signals. They must be clear, accurate, transparent
• Farmers deal best with production issues. Processors / marketers
deal best with the customers / consumers
• World Price and Domestic price will inevitably converge
3. OTHER KIND OF LEARNINGS OF THE
RURAL DEVELOPMENT OF NZ
TWO EXPERIENCES TO TAKE INTO
ACCOUNT:
1. MAORI EXPERIENCE
2. WW2 – AFTER WAR SITUATION
MAORI EXPERIENCE
• The Treaty of Waitangi (Māori: Tiriti o Waitangi) is a treaty first signed on 6
February 1840 by representatives of the British Crown and various Māori
chiefs from the North Island of New Zealand.
• The Treaty established a British Governor of New Zealand, recognised
Māori ownership of their lands and other properties, and gave the Māori
the rights of British subjects.
WW2 –AFTER WAR SITUATION
Components of a Dairy Farm
Land
Races
Irrigation /
Effluent
Fences
Milk Parlour
Milk Parlour
Sheds
accommodation
Sheds,
accommodation
Tractors, bikes &
equipment
Cows
The Landowner – NZ Gov
Land
Races
Irrigation /
Effluent
Fences
Milk Parlour
Milk Parlour
Sheds
accommodation
Sheds,
accommodation
The Sharemilker
(Small rural family)
+ Employs
Tractors, bikes &
equipment
Cows
and pays
for farm
workers
Revenue
manages the farm…
milks the cows and sells
the milk to…
Sharemilker
50% percent of milk
revenue to both the
Sharemilker and the
Landowner
Landcorp
a milk
processor who
pays …
Practical explanation
Then.. A good lesson for Colombia
Highlights
• The NZ Government established Landcorp with NZ$167 million most of
which was land
• The NZ Government has never been asked for more capital
• The NZ Government has been paid over NZ$400 million in dividends
• Landcorp has grown its assets from NZ$167 million to NZ$1.7 billion in the
last 25 years
• Farmers, Processors, Government agencies all pulling
in the same direction will be a powerful force.
Your Future is in Your hands