September 21, 2007
Another BRIK off the (Dairy) WALL.
Analysis of:
California’s increasing regulations spur dairy group to offer environmental services | www.agweb.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Implications: Current California's regulations add, or -better- take another brick off the dairy wall in US, making life more and more complicated for both dairy farmers and dairy manufacturers. As usual, a higher price will be requested to final consumers, while farmers and manufacturers will see their already limited margines squeezed again. While it's interesting what WUD have set up to provide services to relieve the burden on dairy farmers, I 'll declare my opinion with reference to such matter, and reasonably possible scenarios which will take shape in next years, as a consequence.
Analysis: My experience about West Coast Dairy cannot be compared with a life spent dealing with Dairy industry and (a lot of ) regulations in Italy, Eastern Europe, India,Far East and Australia.
Having said that, besides the more or less whitish commonality of MILK worldwide, it seems that there's another contact point amongst different realities on the Old Earth: Regulations and bureaucracy.
We are all extremely sensible when it comes to protect the environment or at, least, when it comes to attempt to reduce the impact on it, as a consequence of our businesses, progress and well being.
However, it would be noteworthy that dairy farming provides an extremely necessary component to US society, as well as to great part of the World.
And given current situation, increased demand in China, Russia and Asia in general, drought DownUnder, bio ethanol requests, and an unavoidable component of speculation, MILK seems set to become the new WHITE OIL and farmers and dairy manufacturers the new billionaires of 21st Century.
This is not true !
So far we've discussed about two categories: Dairy farmers and Dairy manufacturers. What about Modern Trade, Distributors, retailers?
To my (limited) understanding, the latters are not particularly affected by increasing regulations, bureaucracy whatsoever. And if an attempt of capping prices is made by Rulers, it results either in (i) frequent infringements, like since 2003, or in (ii) barriers to free trade and competition.
Hence, while I appreciate the spirit pervading WUD which resulted in the set up of WUES in the interest of their Associates, the problem still remains.
Somebody has to bear the additional costs.
This situation may favour neighbouring States or competing Regions.
It reminds me a typically European paradox: In Italy it is strictly forbidden to manufacture ANY Dairy product utilising Milk Powder. In other European (dairy) Countries, such as France or Germany it is allowed. Therefore, Italian-made exported Dairy products cannot compete with France or Germany-made Dairy products, although these Countries adhere to European Union and the Free Trade Agreement.
The result is that in Italy there's plenty of imported Dairy products made (and declared) with Milk powder, but there's no trace of Italian made Dairy products made in the same way, abroad. Fortunately Italian -made Dairy products are worldwide renowned independently.
I take the liberty to suggest that WUD shall negotiate with the ENTIRE supply chain how to share both the increased compliance costs and the related fee-for-services facilities they provide to their Associates.
An excess of regulamentary burden on Dairy farmers, will contribute to make someone's mind diverting towards other businesses.
And there will be less and less milk availability in the future.
And prices will keep increasing.
Is it this what someone is looking for ???
Personally, I have no means to dare providing an answer, but Hope it is: NO. From the bottom of my hearth.
Analysis: My experience about West Coast Dairy cannot be compared with a life spent dealing with Dairy industry and (a lot of ) regulations in Italy, Eastern Europe, India,Far East and Australia.
Having said that, besides the more or less whitish commonality of MILK worldwide, it seems that there's another contact point amongst different realities on the Old Earth: Regulations and bureaucracy.
We are all extremely sensible when it comes to protect the environment or at, least, when it comes to attempt to reduce the impact on it, as a consequence of our businesses, progress and well being.
However, it would be noteworthy that dairy farming provides an extremely necessary component to US society, as well as to great part of the World.
And given current situation, increased demand in China, Russia and Asia in general, drought DownUnder, bio ethanol requests, and an unavoidable component of speculation, MILK seems set to become the new WHITE OIL and farmers and dairy manufacturers the new billionaires of 21st Century.
This is not true !
So far we've discussed about two categories: Dairy farmers and Dairy manufacturers. What about Modern Trade, Distributors, retailers?
To my (limited) understanding, the latters are not particularly affected by increasing regulations, bureaucracy whatsoever. And if an attempt of capping prices is made by Rulers, it results either in (i) frequent infringements, like since 2003, or in (ii) barriers to free trade and competition.
Hence, while I appreciate the spirit pervading WUD which resulted in the set up of WUES in the interest of their Associates, the problem still remains.
Somebody has to bear the additional costs.
This situation may favour neighbouring States or competing Regions.
It reminds me a typically European paradox: In Italy it is strictly forbidden to manufacture ANY Dairy product utilising Milk Powder. In other European (dairy) Countries, such as France or Germany it is allowed. Therefore, Italian-made exported Dairy products cannot compete with France or Germany-made Dairy products, although these Countries adhere to European Union and the Free Trade Agreement.
The result is that in Italy there's plenty of imported Dairy products made (and declared) with Milk powder, but there's no trace of Italian made Dairy products made in the same way, abroad. Fortunately Italian -made Dairy products are worldwide renowned independently.
I take the liberty to suggest that WUD shall negotiate with the ENTIRE supply chain how to share both the increased compliance costs and the related fee-for-services facilities they provide to their Associates.
An excess of regulamentary burden on Dairy farmers, will contribute to make someone's mind diverting towards other businesses.
And there will be less and less milk availability in the future.
And prices will keep increasing.
Is it this what someone is looking for ???
Personally, I have no means to dare providing an answer, but Hope it is: NO. From the bottom of my hearth.
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