Dairy Farmers & Oil Barons: White Gold vs Black Gold.
North American Dairy Farmers control the worlds thirst for "White Gold" and the Oil Barons control the worlds thirst for "Black Gold" speaks volumes over the disparity between the two in terms of Global markets and wealth.
Saudi Arabia enjoys what seems to be an inexhaustable supply of cheap oil. Canada & the United States enjoy what seems to be an inexhaustable supply of cheap milk and dairy products while the rest of the third world are clamoring for both in their need for survival. Only one resource is declining, the other sustainable.
Since Milk is now being compared to oil as a valuable global commodity, will North Americans soon see grand multi tiered palaces on Dairy Farms, Farmers driving solid gold Bentleys or making outlandish purchases of such trivial items such as platinum and diamond encrusted tea kettles covered in mink tea cozies?
Not likely, Farmers have historically got little thanks from consumers and environmentalists, let alone any real financial benefit or government aid from their sweat and equity unlike their Oil Baron counterparts.
Farmers work tirelessly and do what they do out of love of the earth and nature. Oil barons get others to work tirelessly for them, while Oil Barons reap the unimaginable wealth for little of their own sweat or equity.
Though both the Farmer and Oil Barons love the earth and nature as they both rely on it for their survival. Only one has "Tainted Love" in their quest to destroy the earth and nature for the almighty buck, knowing Global consumers need their Black Gold to survive.
My Final Thought
In an unrelated note, past alarmist reports from Arm Chair Global Warming Environmentalists raising Global Warming alarms over cow farts and other anti farming diatribes need only to bend over between their own legs and look up to see how they too contribute to Global Warming. After all there are more people than cows, and people only need one species to survive, flighty environmentlists aren't one of them.
The world is skimming the bottom of the milk bottle.
But, to the disappointment of some Canadians, we're not about to sell full glasses to others.
In countries such as Canada and Australia, the most natural drink next to water fights hard for dwindling fridge space. Canadians are drinking less milk and eating far less butter than they did two decades ago, while in the land Down Under, the drop in dairy sales is almost three times as much.
Our market gets smaller, while beyond our borders, a thirst grows, leading some to wonder why Canada is not following Australia's lead and changing its protected system to meet a global demand -- something which could cut prices here at home.
Across much of the developing world, milk is now being compared to precious oil.
From Latin America to Asia, a lack of affordable milk is becoming political fodder.
Despite a rosy future painted by President Hugo Chavez's government, Venezuelans are experiencing scattered shortages of staples such as milk and sugar. The lack of basics seems absurd for an oil-rich country where new car sales are booming.
"You have to get in line and you have to be lucky (to get milk)," 64-year-old housewife, Maria Ferdandez, told the New Zealand Herald in a recent story on Venezuela's food lines.
Earth, experts warn, is facing a global milk shortage. Empty cups -- world milk prices have doubled over the past two years -- are not brought on by poverty, but by increased wealth, climate change, trade policies and a water drought in Australia.
You might not think the same economics that have driven up the prices of iron ore and copper would dribble down to an udder, but an ignited global economy -- where milk is a mark of money suddenly in the pockets of millions of new consumers -- is as powerful as gravity. What do you need to have when you've never had enough money before? Beyond a cellphone and a plasma TV, it's chocolate, cheese and a quick stop at Starbucks.
Even cattle feed being used for biofuels becomes a factor in the global milk debate. It reaches to France, where yogurt makers are worried about rising costs, and the U.S., where there are reports of cows being stolen on Wisconsin farms.
Merrit Cluff, senior economist with UN's Food and Agriculture Organization, says the global economic boom has raised incomes in places such as Asia, North Africa and Latin America, and milk supplies can't keep up with the thirst.
Add to the recipe a switch by affluent consumers, in places such as East Asia, from historical diets of vegetables and rice to wheat and animal protein -- embracing the burger and milkshake supper.
In 2000, the average person in China consumed nine litres of milk. Today, it's more than 25 litres each year.
There's also a lack of farmers with enough cows to fill current world demand. During the 1980s, there were about 30,000 dairy farmers in South Africa. This year, there are less than 4,000.
In Canada -- insulated and largely blind to the world shortage -- there are fewer dairy farmers than there once were, but their herds have little problem stocking the shelves with $4.8 billion worth of almost entirely domestic milk and cream each year.
Even keeping up with a 4.6% increase in our own demand over the last 52 weeks is no problem.
Only 7% of the milk produced globally is shipped across borders.
The rest is, around the world, used behind international walls of tariffs, subsidies, World Trade Organization limits and complicated supply management systems.
The Canadian Restaurant and Food Services Association (CRFSA) -- buyers of $2 billion worth of dairy products annually -- is among the loudest proponents of expanding beyond our protected, quota-regulated market. They rage against import tariffs of up to 300%, which keep most foreign dairy products out of Canada, stops our dairy producers from shipping abroad and, they argue, simply inflates Canadian prices.
They're calling for a three-point plan to reform the system. They first want domestic prices cut to encourage more consumption at home. They also propose following the lead of Australia and New Zealand, moving away from supply management to open competition. From there, they are pressuring Ottawa to make a shift to capitalize on a growing world demand.
"Canada is an export nation," says CRFSA spokesman, Jill Holroyd. "Our supply (system) is out of step."
But those who control the milk taps in Canada believe things are just fine right now.
Shelley Crabtree, assistant director of policy and government relations for the Dairy Farmers of Canada, says: "We choose to supply our (domestic) consumers. This is our main target."
B.C. dairy farmer Wally Smith says his parents, who lived through the war years, taught him the value of "food sovereignty" -- living off of the fat of our own land.
"I think Canadian consumers are blessed," he says from his 1940s-built dairy farm.
As vice-president of the Dairy Farmers of Canada, Smith sees the worldwide milk thirst as less of a drought and more of a lesser supply issue. And as a 48-year-old father of two living on Vancouver Island, he says his family shops for dairy products, just like everyone else, paying among the highest prices in the world for dairy products. Butter is even cheaper in Iceland.
"We're supporting our own Canadian products," he says. "As a Canadian, I'm grateful we can do that. "So, obviously, I'm a big supporter of our system we have in place."
CREAM OF THE STATS
- While Canadian farmers earn the same for their product, store competition in regional markets can mean a huge difference. In Saint John, N.B., on average, four litres of 2% milk cost $6.39. While in Vancouver, its $3.69. Thats up anywhere from 10 to 80 cents from 2004 prices.
- Canadas dairy prices have increased 53% over the past 12 years, according to the Canadian Restaurant and Food Services Association.
- Canadas dairy protection is so complex, that fresh pizza parlours have to pay 30% more for their mozzarella cheese than frozen pizza manufacturers, who compete with pies imported into Canada.
- After Australia eliminated dairy support prices and quotas in 2000, milk production rose 4% and retail prices have dropped a reported 29%.
CANADIAN MILK PRODUCTION
1945 - 72 million hectolitres
2006 - 73.4 million hectolitres
(1 hectolitre = 100 litres )
Consumption In Canada 1980-2005
Milk - down 10%
Butter - down 30%
Worldwide Milk Consumption by 2015 - up 12%
PROJECTED PERCENT CHANGE IN MILK CONSUMPTION, 2005-2015
Bulgaria - -7.4%
Romania - -5.2%
Switzerland - -4.3%
EU - -2.1%
Russia - -0.6%
Canada - 0.1%
USA - 0.4%
Japan - 1.8%
New Zealand - 4.7%
S. Korea - 4.7%
New Zealand - 4.7%
S. Korea - 4.8%
Australia - 7.1%
Ukraine - 11.5%
Uruguay - 17.0%
Columbia - 21.6%
Venezuela - 21.9%
Brazil - 25.3%
Mexico - 25.9%
India - 28.7%
Egypt - 32.6%
Indonesia - 33.3%
Peru - 35.6%
Argentina - 41.2%
Malaysia - 41.3%
Vietnam - 47. 2%
Thailand - 47.9%
China - 66.1%