Karamea's Farming Future
I'm not a farmer but ...
The shareholders of Westland Milk Products have recently agreed to sell their shares in the co-operative to an overseas company. The decision was nearly unanimous. The milk price had been low for years, the directors had tried various strategies to improve the company's performance, and farmers need to pay their bills and their banks.
I am not making any judgement on whether the sale was a good thing or a bad thing. Every farmer will have had his or her reasons for their decision. I gather the price for milk produced over the next ten years is guaranteed to at least match the payout from Fonterra.
My thoughts look forward to what happens after ten years? What if the foreign company does not want to pay much for the milk produced in the future? Will West Coast milk be able to be sold to other companies? What guarantees about prices will be established after the first ten years? If prices become unsustainable, present farmers will need to sell their farms. Who will buy them? What will your (family) asset be worth?
I guess my nervousness comes from those of us in the horticultural world. Especially those who are price takers rather than price makers. If we grow a product that is readily grown elsewhere, the price we get is the lowest common denominator around the country, or the world. The best price we can get is if we are in a niche market, then we have some control of the price we get.
I think of Karamea's isolation, which I love. But it makes it hard to compete commercially with a bulk perishable product. It has always seemed to me that the farms near Hokitika must have been subsidising the freight of the milk coming from Karamea. I am wondering what loyalty the new, overseas company will have towards its Karamea suppliers after ten years.
Would it be a good idea for the Karamea farmers to contemplate a co-operative future where Karamea once again has its own dairy brand and production? It used to be that way before it amalgamated. Is it silly to reconsider such a new venture? What could its point of difference be? What might it become known for, and attract a high price? Cheese? Butter? Organic? Ice cream? Yoghurt? Butter and pigs? Beef/Butchery? Sheep's milk/cheese?
I really don't know what dairy options are out there, but I do know that Karamea has a good name nationally. We have a very contained and manageable rural hinterland; a very distinct and defined landscape; a very sellable story. It seems like we as a community, and particularly the farmers, have a golden opportunity to hatch a plan over the next decade to make an exciting and long term direction change for our livelihoods.
And it might take ten years to plan and implement, so the thinking and discussing needs to happen soon. I'm just putting it out there, for others to think about ...