Friendly two limousine cow beasts. The beef and dairy industry has expressed disappointment with the positive aspects of the EU free trade agreement.photo/courtesy
Warnings that the number of cows and farms in the French dairy industry are declining and expected to get worse in the future are no consolation for New Zealand dairy exporters disappointed with the NZ-EU free trade deal. Hmm.
According to the European Milk Commission (EMB), citing the latest census results from the French Ministry of Agriculture, 13,000 farms among French dairy producers closed between 2010 and 2020.
EMB also highlighted the French industry forecast that the number of dairy cows will decrease by 441,000 by 2030.
France will have about 3.6 million dairy cows and 736,000 heifers in 2020, 8.2% and 15.1% lower than in 2015, according to the French animal husbandry institute IDELE.
EMB noted that some dairy regions in France would be more affected than others, but at the national level the situation was alarming.
“Milk producers over the age of 50 made up 32% of dairy farmers in 2010, compared to 48% today, with 28% of them over the age of 55.
“According to IDELE, the replacement rate for dairy farmers is only 45%, far from the 71% average for all agricultural sectors.”
According to the EMB, recently released national accounts show that 2020 will be a difficult year for French dairy farmers, including rising agricultural costs such as feed, labor and energy costs, and the economic performance of dairy farms will continue to decline. was confirmed to show
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While all this may sound hopeful for New Zealand’s dairy export prospects, the situation is not so simple.DCANZ represents leading dairy processors and exporters, including Fonterra. New Zealand Dairy Association.
Europe and New Zealand are the world’s largest dairy exporters.
According to the International Dairy Federation (IDF), between 2015 and 2021, French milk production fell by 4% (equivalent to approximately 1 million tonnes), while total EU production increased by 6 million tonnes over the same period. DCANZ executive director Kimberly Kruiser said. Situation report.
The EU Milk Market Observatory also reported that in the ten months to October 2022, EU production was down 0.2% compared to the same period in 2021, while French production was down 1%. However, the agency also noted that EU production has recently picked up again. Moon.
New Zealand dairy exports to the EU “will continue to face significant barriers to trade for most products” even after the EU-NZ trade agreement comes into force, Mr Kruiser said.
“Dairy outcomes from the deal have been limited. These tariff barriers will continue to significantly restrict dairy trade between New Zealand and the EU,” she said.
The OECD had predicted that by 2030 New Zealand’s milk production would be relatively stable, with the EU slightly increasing production.
“There are variations in this EU picture from member state to member state. The domestic trade that takes place between the 27 EU countries is important. It has been.”
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Mr Crewther said the forecast for limited dairy production growth from New Zealand and the EU is in line with continued demand growth in the global dairy market.
This meant that the biggest impact on trade flows was likely going to other markets.
She said the French dairy herd lost 146,000 cows between 2015 and 2021, while India’s herd increased by 11.25 million, as shown by the IDF’s global situation report.
The EU is New Zealand’s fourth largest trading partner, with two-way trade in goods and services worth NZ$17.5 billion in 2021.
The government, which last July announced the signing of an EU-NZ trade agreement valid from 2035, said it was a market serving nearly 450 million consumers.
New Zealand’s merchandise exports to the EU were hit by $115 million in annual tariffs between 2017 and 2019 (before Covid 19), the government said.
Under the FTA, 94% of EU tariffs will be eliminated when the FTA enters into force, 98.5% of tariffs will be eliminated after seven years, and 91% of New Zealand’s current trade in goods with the EU will be duty-free. From day one.
After 7 years it rises to 97%. Estimated tariff reductions will exceed $100 million a year when it takes effect, and seven years later he will increase to $110 million.
The government said the FTA is expected to boost exports to the EU by up to $1.8 billion annually from 2035.
It will also open up access to valuable new quotas for beef and dairy products.
However, New Zealand’s dairy and beef industries, the cornerstone of New Zealand’s export economy, were disappointed with the outcome of the deal, which fell far short of expectations.
New Zealand’s main agricultural exports to the EU are meat, fruit, beverages such as wine, and seafood.
Malcolm Bailey, DCANZ Chairman at the time, said the FTA initially represented some degree of trade openness, but that the government’s calculations grossly overestimated the benefits.
New Zealand’s dairy exports have improved little and some volumes will still be limited by quota tariffs, he said.
New Zealand can sell cheese to the EU, but its market share is very small.
The EU had a share of about 15% of the New Zealand market, but New Zealand only has about 0.14% of the EU market, he said.
The EU deal was completely different from the trade deal New Zealand had with China. “The EU remains severely constrained and does not have the capacity to grow beyond these very small amounts.”