NZ good a ‘low value’ goods and services
October 11th, 2011
Rod Oram says current high prices being enjoyed for milk powder and lamb are probably at about their ceilings. He says beyond current prices, alternatives such as soy protein become permanently embedded in manufacturer’s
production systems.
He believes NZ should not expect prices to continue to ratchet up, as other countries with lower costs of production, especially land prices, can easily boost output.
He says NZ should be mindful the entire production of NZ’s dairy industry is less than the increase in demand for dairy products.
The adjunct professor at Unitec says “we’re very efficient at producing low value goods and services.”
He gave the example of Nestle which has just announced a $US500m incremental investment in nutriceuticals R&D, compared with Fonterra which spends about $125m a year on all its off-farm research.
He says for NZ agriculture to prosper, it needs to create new value, systems, learning and collaborations to be sustainable.
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