Cows worth far more than hobbits

The dairy industry will be the focus of attention this week with 1400 delegates from 64 countries meeting in Auckland for the World Dairy Summit.

In preparation for that Fonterra has written an open letter to the country explaining the company’s commitment to sustainability:

As New Zealand’s home-grown, global co-operative, Fonterra is proud to welcome delegates to New Zealand. We bring in one in every four export dollars to New Zealand and we seek to make a lasting contribution to New Zealand and to the communities where we live and work.

We take great pride in being a pasture-based dairy producer and see this as a lasting advantage in our markets, in line with our vision of being a natural source of dairy nutrition. Like all food companies around the world we want to achieve the right balance between social, environmental and economic sustainability.

Over the past nine years, we have made steady gains in our environmental performance. We are committed to embedding sustainability into everything we do.

This means Fonterra and our farmers face complex choices including sources of feed, environmental impacts and animal health issues as we work hard to protect our competitive advantage internationally. To compete, we will always need to be a low cost and efficient producer and to deliver for our shareholders. But we will strive to do so in ways that meet our social and environmental responsibilities, and we will always respect the animals that are the source of our product.

Our commitment is to work together with our farmers, staff, customers, government, local authorities, iwi and the community to ensure good practice is the only practice. We all have a stake in building a sustainable dairy industry for the future.

We have made progress, but we are the first to accept that we still have a long way to go. We acknowledge that we need to intensify our efforts to continuously improve our performance. We believe sustainability will be one of the defining issues for the success of Fonterra and for the global dairy industry. We are focused on doing what’s right, not just on a ‘compliance – only’ approach, but one that excels at innovations which accelerate our ability to do more with less on farms, in our factories, on transport, and for our customers. . .

Poor practice – deliberate or accidental – by the company or its shareholders makes headlines. The on-going commitment by them to sustainability goes unnoticed.

However, it’s value to the country is being taken seriously:

First the Listener editorial made the connection:

. . . the most important money-earning mammals in the Waikato meadows are not hobbits but friesians.

Liam Dann makes a similar  point:

The budget for the two Hobbit films has been reported at a pretty epic $650 million.

Not all of that will be spent here, of course, a lot of it will be used to market the films.

But even if we see half a billion, the figure will be dwarfed by the returns generated from our dairy industry.

At levels confirmed yesterday, Fonterra’s payout forecasts for this season would see $9.11 billion injected into the economy in 2011.

That’s $500 million more than the season before and some $2.5 billion more than the season before that. . .

. . .  It was a drought and a commodity slump that led us into the economic downturn and it looks set to be the weather and a commodity boom that will lead us out.

Dairying might not be as sexy as film making but it earns far more money.

Fonterra and its shareholders are committed to ensuring its economic performance is matched by good environmental practices.

2 Responses to Cows worth far more than hobbits

  1. robertguyton says:

    “Fonterra and its shareholders are committed to ensuring its economic performance is matched by good environmental practices”

    You have a very sunny outlook Ele!
    The environmental impacts of dairying are severe and multiplying as the ‘national herd’ swells rapidly.
    Fonterra will indeed be committed to ensuring that it convinces the public, through ‘open letters’ like this one, that there is nothing to see here..

  2. Excellent point – I have often wondered why film making gets subsidies, and the rest of us have to struggle on without (not that I really believe in subsidies.) Clearly being cool helps?

    However, the other thing your blog makes me think about is how terribly unbalanced New Zealand’s economy is. Really it is a huge problem to the country that we are SO dependent on dairy. We need to muster up some new export industries, so I guess it’s not so bad that the film industry is getting the subsidies.

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