Is the local economy subsidising farmers? [Archive]

p.dath

10th October 2010, 11:14

I look at the price of a block of Anchor butter in the UK, and it is about NZ$3.19 per block.
http://groceries.asda.com/asda-estore/catalog/sectionpagecontainer.jsp?skuId=691647&referrer=cookiesDetecting
I look at a block of anchor butter in NZ, and it is about NZ$5.38 a block.
http://www.woolworths.co.nz/Shop/SearchProducts?search=anchor+spreadable

It strikes me that the average NZ'er is effectively subsidising the local NZ dairy farmer, by paying such a premium over other countries to buy NZ made products.

How come in NZ we have to pay so much more for our dairy products, than those people on the opposite site of the world?

FJRider

10th October 2010, 11:26

How come in NZ we have to pay so much more for our dairy products, than those people on the opposite site of the world?

It is because it costs less to ship a few thousand tonnes of the stuff to the other side of the world, than it does to truck/rail it to the other end of this country ...

And ... less the duty/tax (etc) on exported "stuff" ... and exchange rates have quite a bit to do with goods "value" too ...

onearmedbandit

10th October 2010, 11:32

The price of the Anchor block in the UK is for a 250g, whereas the price of the block in NZ is for a 375g. Meaning the price of a comparable sized block in the UK would be about $4.75, not a great deal of difference, especially when you take into account that it's woolworths you are looking at.

http://groceries.asda.com/asda-estore/search/searchcontainer.jsp;jsessionid=fK73akl5aVeRB2gNUGL OoA**.oses4001-atg03?trailSize=1&searchString=anchorbutter&domainName=Products&headerVersion=v1&_requestid=99377

p.dath

10th October 2010, 11:38

It is because it costs less to ship a few thousand tonnes of the stuff to the other side of the world, than it does to truck/rail it to the other end of this country ..

But once you have shipped it to the other side of the world you still have to truck/rail it from the local port to the supermarkets.

rapid van cleef

10th October 2010, 11:40

in general, dairy products are very expensive here compared to the uk. cheese is sooo expensive here, also pork products and chicken is very expensive here , but beef and fish is quite cheap.

dont forget, standard and quality of life here in nz is very high compared to uk. thats why i moved! id rather pay double for cheese and not have the traffic problems etc etc etc

onearmedbandit

10th October 2010, 11:43

Is my maths wrong or my info wrong, because I see very little difference between comparable sizes.

rapid van cleef

10th October 2010, 12:04

i reckon you would have to go in the stores and try shopping for a few months to get an idea of comparible prices etc. dairy produce is very expensive here in nz, compared to uk............but i like it better here!

the prices you see online are not the only items they have. here there is maybe a half a dozen brands of tasty / cheddar.in uk there are dozens and dozens. ...............its still nice here

onearmedbandit

10th October 2010, 12:34

Yes yes but the original post was directly about one NZ product being priced differently in two markets. I'm saying (and correct me if I'm wrong) that is in fact two different products.

MSTRS

10th October 2010, 12:49

...the block in NZ is for a 375g. ....

Fuck me. 1lb (454g) became 500g. And now it's 375g. Did the forming machines shrink?

JimO

10th October 2010, 13:45

also pork products and chicken is very expensive here , but beef and fish is quite cheap.

really, pork and chicken are way cheaper than beef and lamb where we shop

Okey Dokey

10th October 2010, 18:29

All the butter blocks I buy are 500g. Usually available at less than $4 at New World or Countdown special price (approx. every other week) Mainland brand. Full price is still less than $5. Problem solved and absoloutey delicious, too :sunny:

mashman

10th October 2010, 18:33

but isn't that how volume sales works?

onearmedbandit

10th October 2010, 19:50

Just saw an ad on TV, 2 500g Anchor blocks for $7. At $3.50 per 500g that blows away the UK prices.

spacemonkey

10th October 2010, 20:00

When I was in southern Germany 2 years ago dairy products were at about 60-70% of the pack&save prices here in NZ.
Lamb was hella expensive though at $68NZD a kg for lamb leg.

98tls

10th October 2010, 20:06

Of all the things we subsidise in this country methinks farmers are the least of our worries.

JimO

10th October 2010, 20:15

Of all the things we subsidise in this country methinks farmers are the least of our worries.

all the cunts we pay to stay at home for a start

spacemonkey

10th October 2010, 20:28

Look on the bright side; in a few short weeks we will probably have someone brand new to subsidise!
Chinese dairy companys!!! :D
HOORAY!

There now doesn't that make you all feel better? :facepalm:

98tls

10th October 2010, 20:31

all the cunts we pay to stay at home for a start

Actually Jimmy if after accepting payment they would indeed piss off and stay at home it would be well worth the payment.Maybe tacking "fuck off were full" on the bottom of the flag would help though i doubt it.

p.dath

10th October 2010, 20:46

Just saw an ad on TV, 2 500g Anchor blocks for $7. At $3.50 per 500g that blows away the UK prices.

The UK price was NZ$3.19 - so that "special" is still more expensive.

onearmedbandit

10th October 2010, 22:16

The UK price was NZ$3.19 - so that "special" is still more expensive.

Your quoted price for the UK block is a 250g block, the NZ block is a 500g. Look at the link I posted, it shows a 250g block for one and half pounds, which works out to be about NZ$3.20.

They have a 500g block on their site (the one you linked to yourself) for NZ$5.60. That would have been a better example for you to use. The Woolworths 375g is $5.38 compared to their 500g for $5.60. But even that doesn't matter, as I said earlier I saw two 500g Anchor blocks for $7.

Do you follow?

doc

11th October 2010, 05:38

What about the supermarket markups ?

marty

11th October 2010, 07:41

It strikes me that the average NZ'er is effectively subsidising the local NZ dairy farmer, by paying such a premium over other countries to buy NZ made products.

?

NZ'ers have been subsidising the local farming community for about 100 years. Do some research and you will discover how much govt. funding they have received over the years. Same goes for apples, grapes, avocados, citrus - you name it, it has been subsidised.

Interestingly now though, NZ is one of the loudest proponents AGAINST subsidies - some EU countries provide enormous subsidies to their farming communities (often in the way of fiscal protection) - look at the the reasons French farmers cause public meyhem.

I would rather pay a little more for premium dairy and meat, than get the shit cast off from the export shelf.

sinfull

11th October 2010, 07:41

NZ Local economy = farming i would have thought, or have we suddenly become an industrial country ?

Correct me if i'm wrong, but i understand dairy farmers are being paid record prices for butter fat (wrong term i know, but ya get the picture) which in turn bumps the price up in the s/markets, but also keeps the farmers pockets lined, which ultimately filters down through into the local economy, IE: Engineers get to fix machines, feed producers get to produce feed, fert companies produce ferts, IT workers get to make programs to optimise feed/fat ratios, who all in turn need more staff which keeps unemployment down !

And the wheels go round and round !

I have a Mate (a farmer) Who milks locally on land that doesn't produce enough feed to make it viable, so they have a feed pad, his feed bill is in the half mill per annum range, he has spent prob a mill or two on machinery in the past ten yrs and upgrading all the time, employs several staff and pumps lots of money into the local economy !
He wonders why he does it because his profit margins are pathetic for the risk he's taking, if the above butter fat prices he gets, take a dive he'll go under !

So in answer to the original question, i'd say yes, if we don't were fucked !

mashman

11th October 2010, 11:19

I would rather pay a little more for premium dairy and meat, than get the shit cast off from the export shelf.

If the Silver Fern Farms ad is anything to go by, you've already been buying the "shit cast off from the export shelf" for years :)... Silver Fern Farms, the best cuts of lamb, NOW AVAILABLE IN NZ :rofl: but that's business for ya

dogsnbikes

11th October 2010, 11:43

11 years ago we were paying $55nz/kg of beef mince and $5nz for 20 NZ sealord mussels in Switzerland:gob:,how the hell does that work.......at the end of the day,we have no competition we are the shit-hole at the bottom of the globe

Jonno.

11th October 2010, 11:44

Your quoted price for the UK block is a 250g block, the NZ block is a 500g. Look at the link I posted, it shows a 250g block for one and half pounds, which works out to be about NZ$3.20.

They have a 500g block on their site (the one you linked to yourself) for NZ$5.60. That would have been a better example for you to use. The Woolworths 375g is $5.38 compared to their 500g for $5.60. But even that doesn't matter, as I said earlier I saw two 500g Anchor blocks for $7.

Do you follow?

Are we looking at the same link?

UK:
Butter 500gm - 4.23 NZD
X2 for 6.34 NZD
Butter 250gm - 3.17 NZD
NZ:
Butter 375 - 5.38 NZD

onearmedbandit

11th October 2010, 13:07

Are we looking at the same link?

UK:
Butter 500gm - 4.23 NZD
X2 for 6.34 NZD
Butter 250gm - 3.17 NZD
NZ:
Butter 375 - 5.38 NZD

Lets compare like with like. 500g block of butter in the UK, NZ$5.62. 500g block of the same butter in NZ, NZ$5.57.

See attachments.

onearmedbandit

12th October 2010, 08:17

The UK price was NZ$3.19 - so that "special" is still more expensive.

Lets compare like with like. 500g block of butter in the UK, NZ$5.62. 500g block of the same butter in NZ, NZ$5.57.

See attachments.

Can you follow this now p.dath? And don't forget that a supermarket is currently offering two of these 500g blocks for $7.

p.dath

12th October 2010, 12:58

Can you follow this now p.dath? And don't forget that a supermarket is currently offering two of these 500g blocks for $7.

So the UK prices is two 500g blocks for £3. That's £1.5 per 500g block. That's about $NZ3.10 for 500g.

Woolworths NZ online are charging NZ$5.38 for a single smaller 375g block. Even if there was a deal for two blocks for $7 - it's only for a 375g block - much smaller.

So, no I don't follow it. It looks drastically cheaper in the UK.

onearmedbandit

12th October 2010, 13:21

So the UK prices is two 500g blocks for £3. That's £1.5 per 500g block. That's about $NZ3.10 for 500g.

Woolworths NZ online are charging NZ$5.38 for a single smaller 375g block. Even if there was a deal for two blocks for $7 - it's only for a 375g block - much smaller.

So, no I don't follow it. It looks drastically cheaper in the UK.

A 'block' of butter is different to a container of spread. Lets get the terms right first. No where on the UK site are they offering two 'blocks' of 500g butter for £3. Secondly, the offer I was referring to on NZ TV was for 2 500g 'blocks', for $7. Not 2 375g containers.

They are however offering two 500g containers of spread for £3, yes you are right. That's a special. And you are comparing it to a non-special item, namely a 375g container of spread for $5.38. That's a little unfair. I could do the same with the current offer (that you misread) of 2 500g blocks for $7, essentially $3.50 per 500g block. Compare this special offer with the standard UK price of NZ$5.62. All of a sudden things look drastically cheaper in NZ don't they.

So lets look at the normal price of a 500g container in the UK, which is about NZ$4.30. Compared to the NZ price for the 375g container for $5.38, I agree there is a discrepancy.

However, you can not base an argument on a single example of a wide and varied market. If you could, I could use the example I quoted in my post 3 up with the 500g 'blocks' and argue the prices are the same. Or I could take the currently advertised offer of 2 500g 'blocks' of Anchor butter for $7, once again 500g for $3.50, and argue that our prices are much cheaper.

p.dath

12th October 2010, 13:31

So lets look at the normal price of a 500g container in the UK, which is about NZ$4.30. Compared to the NZ price for the 375g container for $5.38, I agree there is a discrepancy.

So the UK Anchor butter is 0.86 cents per gram (ordinary non special price), while the NZ Anchor butter is 1.43 cents per gram (ordinary non special price) - so the anchor butter is 66% more expensive to buy in NZ.[/QUOTE]

However, you can not base an argument on a single example of a wide and varied market. If you could, I could use the example I quoted in my post 3 up with the 500g 'blocks' and argue the prices are the same. Or I could take the currently advertised offer of 2 500g 'blocks' of Anchor butter for $7, once again 500g for $3.50, and argue that our prices are much cheaper.

If I get time later, I'll do a comparison of Anchor milk.

onearmedbandit

12th October 2010, 13:41

So the UK Anchor butter is 0.86 cents per gram (ordinary non special price), while the NZ Anchor butter is 1.43 cents per gram (ordinary non special price) - so the anchor butter is 66% more expensive to buy in NZ.

No, the anchor 'spread' is more expensive. Not the 'butter'. Get that much right please. And you've quoted from one retailer in the UK, and one in NZ. Hardly a fair indication of the two markets. And I have already agreed with your example in my earlier post. How about the two blocks of butter that ar the same price?

If I get time later, I'll do a comparison of Anchor milk.

Good idea. I'd suggest that you do some proper research before making any claims. One product from only one retailer in each market is hardly conclusive evidence.

PirateJafa

12th October 2010, 13:41

p.dath

12th October 2010, 15:58

Good idea. I'd suggest that you do some proper research before making any claims. One product from only one retailer in each market is hardly conclusive evidence.

It's a forum for expressing opinion, and that's what I did. Not a research journal.

My feeling is that local competition may be stiffled.

onearmedbandit

12th October 2010, 16:11

It strikes me that the average NZ'er is effectively subsidising the local NZ dairy farmer, by paying such a premium over other countries to buy NZ made products.

How come in NZ we have to pay so much more for our dairy products, than those people on the opposite site of the world?

It's a forum for expressing opinion, and that's what I did. Not a research journal.

My feeling is that local competition may be stiffled.

You came to the conclusion that 'the average NZ'er is effectively subsidising the local NZ dairy farmer, by paying such a premium over other countries to buy NZ made products', and based this off one example. Fail.

As you say, this is a forum where one can express their opinion and I'm expressing mine by saying that your conclusion is baseless without further research.

doc

12th October 2010, 18:18

If I get time later, I'll do a comparison of Anchor milk.

Good luck with that one.

Believe it or not. Anchor milk comes out of the same milk silo as the Housebrands (ie Pams n Dairy Dale they just have a different label and bottle), but commands a higher price because of the "Anchor " brand and tastes creamier
ppl honestly believe that. Dairy Dale is also owned by Anchor

spacemonkey

12th October 2010, 18:26

Pretty much all of the milk and cheese in supermarkets is a fontera brand.
Well apart from niece brands like Zorganic milk and a few Goodman Fielder cheeses.
Even the once independent Kapiti cheese is just another Fontera product now.

Clockwork

13th October 2010, 12:11

Good luck with that one.

Believe it or not. Anchor milk comes out of the same milk silo as the Housebrands (ie Pams n Dairy Dale they just have a different label and bottle), [/SIZE] [SIZE="1"] /SIZE]

Always suspected as much. BTW where does Tararua and Mainland fit in, are they another Fontera label?

onearmedbandit

13th October 2010, 12:36

Always suspected as much. BTW where does Tararua and Mainland fit in, are they another Fontera label?

Mainland are.

http://www.fonterra.com/wps/wcm/connect/fonterracom/fonterra.com/Our+Products/Consumer+Brands/

spacemonkey

13th October 2010, 12:49

Tararua along with meadowfresh is a Goodman Fielder product.

marty

13th October 2010, 12:58

doc

13th October 2010, 12:59

Getting back on track. The farmer gets "F' all compared to what Fonterra and the Supermarkets get after altering the milk. It's all about the "Ticket clippers" on the way extracting your dollar

marty

13th October 2010, 13:25

I buy 1/2 a beast at a time, only use milk for coffee and use olive oil-based spreads. grow most of my own veges and all my own citrus, get eggs from a farm friend, so it's not really a big issue for me.

and really d.path - if it's as good as you say it is over there, you really should go there.

spacemonkey

13th October 2010, 13:52

p.dath

13th October 2010, 13:56

Getting back on track. The farmer gets "F' all compared to what Fonterra and the Supermarkets get after altering the milk. It's all about the "Ticket clippers" on the way extracting your dollar

lol And who owns Fonterra?
Oh yeah the very same farmers. :blink:

Exactly. Fonterra profits go directly back to the shareholder farmers which own it.

We pretty much have a monopoly provider for dairy products, like Telecom in the Telco space has been, who have no incentive but to maximise profits for its shareholders - like Telecom.

Hmm, might be time to buy shares in Fonterra. Of that's right, I can't - you have to be a farmer.

spacemonkey

13th October 2010, 14:00

'Cept to buy Fonterra shares you need to spend a mill or two to buy an overpriced dairy farm. :facepalm:

Clockwork

13th October 2010, 14:05

Thanks for the replies. Presumably Goodman Fielder pretty much have to buy there milk from Fonterra.

Getting back on track. The farmer gets "F' all compared to what Fonterra and the Supermarkets get after altering the milk. It's all about the "Ticket clippers" on the way extracting your dollar

FWIW Fonterra is a co-operative (nasty communist concept) and AFAIK only contributing Dairy Farmers can be shareholders so after its overheads all the profits go back to them anyway. However I suspect our retail duopoly are taking a generous share too.

p.dath

13th October 2010, 14:40

onearmedbandit

13th October 2010, 14:57

ASDA milk in the UK:
http://groceries.asda.com/asda-estore/search/searchcontainer.jsp;jsessionid=lx2E7gAU8KGcIlYv78D AIw**.oses4066-atg01?trailSize=1&searchString=milk&domainName=Products&headerVersion=v1&_requestid=131913
£0.86 for 1 pint. 76.1p per 1l. Not familiar with pennies, but if there are 100 pennies in a pound, then that works out to be NZD$1.61 for a litre of milk.

On Woolworths, 1l of Meadow Fresh standard milk is NZ$2.55.
http://www.woolworths.co.nz/#url=/Shop/SearchProducts%3Fsearch%3Dmilk%26page%3D4

So the milk, similar to the butter, appears to be 58% more expensive to buy in NZ.

Your link is broken.

And what do you say about the example I provided of the 500g Anchor butter? It was cheaper in NZ by a few cents than it was in the UK. Does this mean the prices are roughly the same between NZ and the UK? Because once again all you are providing is one example that supports what you are trying to prove, but ignoring the ones that don't. I'm not picking on you over this, but I want to know how you can make a sweeping statement like that based off one example, where I can provide another example where the prices are on par.

Can you explain that much to me?

p.dath

13th October 2010, 15:06

Your link is broken.

And what do you say about the example I provided of the 500g Anchor butter?

I thought we reached agreement in post #32 that UK price was cheaper than NZ?
http://www.kiwibiker.co.nz/forums/showthread.php/129656-Is-the-local-economy-subsidising-farmers?p=1129881845#post1129881845

It was cheaper in NZ by a few cents than it was in the UK. Does this mean the prices are roughly the same between NZ and the UK? Because once again all you are providing is one example that supports what you are trying to prove, but ignoring the ones that don't.

I provided an example - butter, and then I provided another example, milk. How many more examples do you want?

I just read another comparison on geek zone, they also found NZ milk was the most expensive.
http://www.geekzone.co.nz/Jama/3291

I'm not picking on you over this, but I want to know how you can make a sweeping statement like that based off one example, where I can provide another example where the prices are on par.

Can you explain that much to me?

I've now provided two examples, of two different products and brands, and supplied a link to yet another commentary by someone else who also came to the same conclusion - who includes pricing in two other markets.

The more I look at it, the more it seems Fonterra is abusing its monopolist position in the local NZ market.

Does anyone know what Fonterra's net profit percentage was for a recent taxation year before tax and depreciation?

p.dath

13th October 2010, 15:17

Looking at the Fonterra accounts:
http://www.fonterra.com/wps/wcm/connect/c9d6ec80440d9b598d479f9906727cef/Summary+Financial+Statement+-+for+website.pdf?MOD=AJPERES&CACHEID=c9d6ec80440d9b598d479f9906727cef

Total equity for 2010 was $5667m (aka, the total amount invested in Fonterra). The distributed profit was $800m. So that's a 14.1% return on the investment.

Considering the risk in the business, I think that is probably a satisfactory return.

So I guess our cost of production of milk in NZ must just be higher than other countries.

onearmedbandit

13th October 2010, 15:22

Oh man your stupidity blows me away. I might start a thread titled 'It's obvious our local economy is not subsidising farmers', and use the example of the 2 500g blocks of butter as proof, and ignore your example. My thread would contain as many 'accuracies' as yours.

I give up. I just hope you are not in a position where you have to make more of a decision than what pants to wear. That's if you even wear pants.

marty

13th October 2010, 16:17

£0.86 for 1 pint. 76.1p per 1l. Not familiar with pennies, but if there are 100 pennies in a pound, then that works out to be NZD$1.61 for a litre of milk.

So the milk, similar to the butter, appears to be 58% more expensive to buy in NZ.

How the fuck did you do the first calculation? A pint is 600ml (60% of one litre), not a litre.

And I doubt if it's Fonterra milk, so that argument is pointless anyway.

I can buy 2 2l of blue top/light blue top or green top milk in my home town for $5.50. That works out to 82c/pint. Or 48p. Just over 1/2 the price you are quoting, so from that, your single point research statement is debunked.

p.dath

13th October 2010, 16:27

How the fuck did you do the first calculation? A pint is 600ml (60% of one litre), not a litre.

The ASDA web site supplies both the price for a pint, and the converted price per litre for comparative shopping. I used their numbers.

marty

13th October 2010, 16:28

Exactly. Fonterra profits go directly back to the shareholder farmers which own it.

We pretty much have a monopoly provider for dairy products, like Telecom in the Telco space has been, who have no incentive but to maximise profits for its shareholders - like Telecom.

Hmm, might be time to buy shares in Fonterra. Of that's right, I can't - you have to be a farmer.

You CAN buy Fonterra shares. Buy a dairy farm. If you don't want a dairy farm, you can hardly complain about it. Try buying a Tatua dairy farm - the price of that farm will be inflated by around 30%, and you have to know someone who knows someone.

I live 500m away from a large Fonterra plant, yet I have the choice of at least 2 different suppliers of milk - Tatua, Meadowfresh - 3 with Fonterra. There's probably more