Butter prices to keep increasing, say industry experts and analysts
High Ground Dairy consultant Stu Davison, who provides regular analysis of global prices on Gold Sport's Country Sport Breakfast, said the biggest factor was long-term growth in demand from China and Southeast Asia.
'Diets have been developing in Asia. The premise of including butter in a more Western diet in these Asian nations has been a big driver, especially New Zealand butter as they value the taste and they see the difference in the colour.'
Davison said Europe had also been producing consistently less butter since the start of last year, prompting many European countries to stockpile more and export less.
'You get to the situation we're in now where butter is at extraordinary heights and everyone wants their butter on toast. We don't see it running right back to where we were five years ago.'
Infometrics principal economist Brad Olsen, who produces an annual index of Foodstuffs' supply costs, said New Zealand was impacted by those global factors because it exports so much of its product overseas.
'It's a bit of a double-edged sword. Although clearly households are paying more at supermarkets, those higher prices internationally are also bringing forward better gains and returns for farmers domestically.'
Fonterra chief financial officer Andrew Murray told The Country wholesale prices weren't expected to fall any time soon.
'If you look at [New Zealand butter], it's still a lot less than you're paying in Europe, so I think that will put a floor on butter prices for a while.'
Michael Sergel is a senior reporter, usually based in Auckland. He has been covering business, politics, local government and consumer affairs for more than a decade.
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Otago Daily Times
5 hours ago
- Otago Daily Times
Farming calls again after stint steering Oritain
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From growing up on a block of land on the Taieri, Mr Cochrane always wanted to be a farmer. Back when he left school and saw a programme which featured John Key as a currency trader, he decided to get into currency trading. Ironically, a few decades later, he managed to persuade Sir John — who by then had added Prime Minister and a knighthood to his CV — to join the board of Oritain. But throughout his career, farming was always the vision and, while Mr Cochrane might have got side-tracked with other things, it was something he was always going to return to. After completing a bachelor of commerce (finance) degree at the University of Otago, Mr Cochrane headed to London to start a career in currency trading. He spent 11 years primarily in London, with stints in Zurich, Singapore, Tokyo and New York, working for various European and American institutions including Credit Suisse, Citibank and Royal Bank of Canada. He and his wife later decided to return New Zealand to raise a family and to farm. Mr Cochrane bought the home farm in the Catlins in 1998, and spent 12 years managing the farming business. They moved to Dunedin, for their children's education, and he became managing director of A. G. Foley Ltd and got involved with Oritain. The farm was leased out. He was the founding chairman of Oritain — created by Prof Russell Frew and Dr Helen Darling at the University of Otago in 2008 — and chief executive for more than a decade, moving his family to Switzerland. Luxury high-end fashion and retail companies, including Lacoste, Supima and Primark, and food producers such as a2 Milk and Nescafe, used Oritain to assure customers the items they bought were genuine and produced from an ethical supply chain. The company could create a unique fingerprint from products globally and prove its provenance. Its science could pinpoint the exact area a product or raw material came from, within metres. Switzerland, with its central European location, had been a great place to be based and it was also very pro-business. It was well organised, very safe and offered high quality education, healthcare and transport. ''It's been very good for us but nothing beats the community of rural South Otago,'' Mr Cochrane said. They missed that sense of community and there was the appeal of a rural community to return to. Working overseas, both in banking and commerce, he discovered it was very much transaction first while, in New Zealand's rural communities, it was relationships and people first. Returning home had been a stark reminder of that, he said. Stepping back from Oritain had been in the back of his mind and, once the Series C capital raise was completed in mid-2023, it became more front of mind. Oritain raised $US57 million to develop technology and expand into new markets and industries. ''The time seemed right, I'd done it for 12 years ... it was a big commitment,'' he said. Asked what he was most proud of at Oritain, Mr Cochrane quipped: ''survival''. With the failure rate of start-ups estimated at 92%, survival was good. But probably the biggest highlights were getting the company to a successful Series C capital raise and the team that had been built at Oritain. There was a very strong culture — ''a real Kiwi culture with a can-do attitude'' — and that had been taken off-shore. The company had been ambitious and it had attracted ''fantastic'' people. Commercialising science was challenging, but probably a bigger challenge was managing and maintaining culture while taking a business offshore. To build something special and attract people like Sir John Key to be part of it was very gratifying. Sir John initially said no — as he had previously to many other companies and organisations that had approached him when he left politics in late 2016 — but Mr Cochrane proved persuasive and Sir John really liked the story He had been exposed to the company while doing advisory work for kiwifruit marketer Zespri, which used Oritain's technology to trace kiwifruit being illegally grown in China. Last year, Oritain expanded its international reach, opening an office in Singapore to join those in London, Washington DC, Singapore, Auckland and Dunedin, which were home, in total, to more than 200 staff. Mr Cochrane made that announcement while in Singapore with Prime Minister Christopher Luxon's delegation, which was representing New Zealand businesses' interests in priority South East Asian markets. Quipping that the next day he was in the Owaka pub, Mr Cochrane said he had been fortunate to have been able to have operated in two different worlds. But home was the farm. Having bought neighbouring land, the Cochranes were back farming a total land area of 2498ha, with the help of staff — ''it's Totara Hills version 2.0,'' he said. The intention was to run the farming operation as one. They wanted to farm ''simply and well and profitably'' but also do things a little differently, thinking of ways to benefit the land and also use out-of-the-box thinking. They wanted to farm sustainably — both financially but also very much long-term environmentally — and were looking at things like regenerative agriculture. Mr Cochrane believed that was an opportunity for New Zealand; many farmers were already employing lot of the principles already like multi-species, rotational grazing and reducing chemical use. They wanted to eat the produce off their farm and it needed to be produced in a way they were comfortable with, he said. It was also an inter-generational farm — Mr Cochrane's father had worked on it and now daughter Sophie and son Andrew were getting involved — and the family wanted to be part of the farming community and wider Catlins community. Sophie Cochrane said they hoped that as well as having the farm as their home, it would also be a springboard for ideas and for other people in the community ''to do cool things''. She and her brother, who is in his second year of university in Canada, were keen on developing eco or agri-tourism on the property, and wanted to do that in partnership with the community. They were keen for a walking track on not only their property but also hopefully involving the surrounding area. Miss Cochrane, who has been away from New Zealand for nine years, spent her last secondary school year overseas, studying by correspondence. Both his children had benefited from growing up in New Zealand but also from seeing the rest of the world, Mr Cochrane believed. Knowing there was a home to return to also kept them feeling grounded in the land and the experience also made them appreciate what they had in New Zealand, Miss Cochrane said. She completed an arts degree in politics, sociology and East European studies at UCL (University College London) and a master's degree in environmental anthropology — how people related to the land and vice-versa — and did her thesis on the Otago region. While in London, she did an internship at the House of Lords. While she had not particularly used either degree in her job, they were ''wonderful to do''. Now working in film and television in the UK, she was fulfilling a dream she had since she was little. For both father and daughter, a simple life in South Otago was appealing, and Mr Cochrane saw a ''real movement'' towards that simplicity and cleaner living . ''I think we have that in New Zealand and take it for granted,'' he said. 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The Spinoff
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