The Country 26/06/25: Dr Jacqueline Rowarth talks to Jamie Mackay

One of our leading primary sector academics says we should be applauding the current price of butter!

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Episode Transcript

Speaker 1 (00:00):
Caught lightly on our website Thecountry dot co dot nz
doctor Jacqueline Rower. It's one of our leading primary sector academics.
Although she wasn't at PINN so might come back to
that one r. It's a wonderful column, Jacqueline. And for
the life of me, and you've addressed this issue, I
can't see why people don't get that while butter is

(00:20):
very expensive at the moment, it's a good thing for
New Zealand.

Speaker 2 (00:24):
I'm absolutely with you. And the reason they can't get
it is because they just look at how expensive it
isn't think we produce so much it should be cheaper,
and that is not just not logical. So I'm trying
to explain to them that when you sell something, you
might to your friend sell cheaper or your family, but
actually if you can sell for double the price and

(00:46):
still cover the cost of production. If we're talking butter,
if you can sell for double the price, then everybody
is better off. So I do encourage people to go
and look at this. Do you sell your house to
your child for one million or somebody who wants to
come and live in beautiful New Zealand for two million?
Isn't the child better.

Speaker 1 (01:04):
Off, Well, you've done the numbers on the dairy butter
I thing, what twenty seven billion dollars as we've been
hearing repeatedly over the past couple of year. Yeah, that's
for the dairy, well, nearly sixty yeah, just Dairyes, at
the mondu it's nearly half of our exports, which are
just under sixty billion. So that's five and these are
your numbers, not mine. Five four hundred dollars for every

(01:27):
New Zealander, which when multiplied by seven, which is the
churn rate if you want, is almost forty thousand dollars.
That's how much it's worth for every man, woman and child.
When it comes to the economy, we should be saluting
butter and just having our marmite sandwich with just marmite
and a bit of apple. As the Prime Minister would.

Speaker 2 (01:48):
Say, well, yes, yes, marmite is sandwiches are great, but
put some cheese in there and anchor taste. Is still
just twenty dollars a kilo, and you've actually got your
nutritional requirements. I think it's something like six sandwiches cheese
sandwiches would give you a day, would give you all
your nutritional requirement.

Speaker 1 (02:08):
Mind you to be ther. Cheese is not for the
faint hearted either these days on the supermarkets check Wille.

Speaker 2 (02:14):
Twenty dollars a kilo. That's anchor brands, you know, heartfelt
tanker banks. But that it's certainly gone up. But then
although we're saying that this is good and it brings
more money into the country, we will of course say
that costs of production have also gone up and farmers
this year have got a bit of margin, a bit

(02:35):
of headroom, And the banks are saying, yes, they're paying
off debt. We one day we need to talk about
why that debt is there, and it comes back to
succession and primogeniture. You know that eldest son used to
inherit everything and now they have to buy the rest
of the siblings up. So moving on from there, the
debt is being paid down and so the banks are

(02:56):
well with lower interest rates. Hooray. That's how come the
farmers are feeling a bit more buoyant. The same with
lamb prices going up ten dollars a kilo. As long
as we're covering cost of production with a bit of
margin to do some repairs and maintenance, then that is
really good for the country. Because repairs and maintenance and
purchases of new items which might be environmentally technologically you know,

(03:19):
the next step forward, then the whole economy benefits. The
ripples from the rural sector spread out, and the analysts
have been trying to point this out for.

Speaker 1 (03:29):
Some time and failing miserably. You've led into this discussion
on your column by talking about Fontira selling its consumer brands.

Speaker 2 (03:39):
Right, And this is a really interesting debate because you
think immediately their legacy brands and your heart contracts. These
are legacy brands, and so anybody who's grown up with
them thinks this is a bad thing to do. But
all analysts and people who actually understand the dollars are
pointing out that the returns to the country are very

(04:01):
much greater from the new things that Fonterra is doing
than these legacy brands. And so if we're thinking about
benefits to the country, they go, and they if we're
just going having an emotive reaction, they would stay. But
that is not beneficial to the country. And the really
interesting thing that I heard from one of the Fonterra

(04:23):
explainers is that although we grew up with these anchor
brand type things, and I grew up with them in
the UK and then followed them out here, actually in
anywhere that's not the UK or New Zealand. They're tiny,
They're just not there. They're not a trigger point for
the rest of the world as they are for you

(04:44):
and me, okay.

Speaker 1 (04:45):
And Chequel and sell them yep. And as clever as
you and I are, and we're both very clever, I
said facetiously in a self deprecating manner. I don't know
if we're as smart as Miles Hurrell and Peter McBride.
Maybe you might be arm certainly not.

Speaker 2 (04:59):
They're doing they're doing.

Speaker 1 (05:00):
They're doing a great job at Fontira, and who are
we to question them.

Speaker 2 (05:04):
They're doing a great job for New Zealand.

Speaker 1 (05:06):
Right well, John Key said, with Fontira goes, New Zealand goes,
We'll leave it at that. Always good to catch up.
You can read all about it on our website, The Country,
dot co dot MZ.

Speaker 2 (05:15):
Thank you, Derby