Once more, tractors have returned downtown Brussels. Again, farmers shouted their anger, exhausted by a painful trade which fails to pay his man. The fault in these European Ministers, unable to agree to support their farmers, fault in Europe, the fault to... Especially in these beautiful black and white dairy which graze peacefully the green grass of the Prairie of Waikato North of the New Zealand fault. Hilly, wet and temperate, the region is a Normandy in summer. Cows are so that they have need of nothing: step of barn for winter and its expensive foods, few diseases, integrated so well that they became the mascot of the local rugby team. One of them would have managed the feat, according to the scientists-beneficial press, directly producing skim milk (its genome is studied under the seams).
Well that's fun for its owner and its cooperative, giant Fonterra, the largest exporter world milk. The cow of Waikato is the milky way version of the butterfly effect, including the beating of the wings is assumed to cause a cataclysm at the end of the Earth. It was sufficient that there be a little drier than in the usual, in 2007, production of Fonterra milk Cup... and causing world prices to soar. The rain returned, a year later, the beautiful dairy resumed their usual production, causing a sudden collapse in prices and triggering in the wake of cascade in Europe and France disorders.
Because milk is, more than all other agricultural materials, a subject of special study which closely mingle the economic, political, social and even the "civilization", as would say our President of the Republic. A good way to understand the French and European puzzle is to take back. For example to move to the top floor of the headquarters of Fonterra on Princes Street, in the centre of Auckland. You will find that the dairy economy is under the influence of three exceptional paradoxes.
1 Market economy, supported prices. Milk and its derivatives, is a very large market. Nothing that in France, it is the first sector of the food industry with EUR 25 billion. And in the world, it is an activity in growth of 2.5 per year under the thrust of the emerging as China (13 of increase annually between 2005 and 2008). But it is also a social issue. Dairy farming is structuring for agriculture, it is the first job, and therefore for the territories. There are still about dairy operators than in France.
No policy can resolve a endorse the disappearance of the prairies to cow that dot the territory. If the New Zealand to removed all its grants to the dairy industry more than 20 years ago, this is not the major countries of the world. Even for the Liberals as the United States, the Canada or the Japan fix still arbitrarily a price for milk, function not the application, but the cost of the producers. The Canada, the milk prices exceeds 450 dollars, or two times more than Germany or France and almost four times more than the cost of New Zealand ($120). Europe has long box prices and quantities, first by buying surplus production (the famous stocks of butter in the 1970s), and then by setting maximum quotas to limit overproduction. In France, until this year, negotiations between producers, cooperatives and industrial ("three families") set an increase in the price index each quarter. The milk is the most monitored raw material in the world.
But the device flies apart. This year, the French Government, worried about price increases, prohibits the tripartite negotiation, the name of competition. On Europe, the disappearance of quotas is scheduled for 2015. All this at a time when world prices collapse.
2 Export: small volumes, large consequences. It is well known, the milk turns quickly. At the time, he travelled poorly. As each country has developed very different uses. The Anglo-Saxons drink the milk, the Latins the eat in cheese. At the time milk exports are minimal. Excluding intra-European traffic, 93 of world production is consumed locally. But Fonterra. The cooperative produces less milk than the France, but it exports 95 and represents the time over a third of total world trade, more than Europe, another major exporter, which flows only 8 of its production outside its borders. Far from everything, the kiwi country ships milk powder and butter, which can store without problem. But, as everybody stores his surplus in this way, and that Fonterra has unbeatable prices, it is the only one to make money in this trade that fuels emerging and industrial processing or livestock. That is why a drought in Waikato, which will cause a drop of 0.5 of the world, that will ultimately translate into a doubling of the price of powder and butter, only products with a global price.
3. Very liberal monopolies. Fonterra is the merger in 2001 of two large New Zealand dairy cooperatives and the State body that held the monopoly of export. The company floods the planet as a multinational, but has no competitors in his home. An extraordinary paradox found in Europe, almost monopolistic, where the countries of the North are Liberals, opponents of quotas and other prizes administered, while they are organized into giant cooperatives. Thus, the Netherlands saw this year to merge their two main unions, Friesland and Campina. Conversely, the France, which appears so preoccupied by the fate of its small producers, houses a much more varied landscape with multiple regional cooperatives, the only national being Sodiaal, facing only 40 of the sector, the rest comprised of often world size such as Danone, Bongrain or Lactalis industrial.
Of course, cooperatives have the huge advantage of being close to producers since they redistribute all profits and that they can influence their strategy.
However, this status has conflict of interest. The Member producer is to sell his milk at the best price, when the cooperative is at best enhance its raw material, by purchasing not too expensive and by transforming the most sophisticated way. However logical mutual industrial logic. Indeed, when Fonterra wanted to introduce in the stock market in 2007 to increase its capital to reduce its debt and continue its international expansion, he collided with the refusal of its members and remains primarily a little valued base materials specialist, supported by an unbeatable cost.
And if, finally, it was the France who followed the more complementary model With, on the one hand, producers of large size (in the West), either niche (AOC, products bio) and the other cooperatives concentrated on the collection and processing, and business innovation, marketing and international. A model which giving birth for the time being in pain that do not know the cows of Waikato.
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