Thursday, 21 June 2012

Dairy Puzzle

Dairy products are cheaper in New Zealand than in Canada, where the dairy cartel keeps prices high.

But the Dairy Farmers of Canada VP Ron Versteeg points me to an interesting puzzle: FAO stats showing NZ consumption of some dairy products is lower than that in Canada.

Here's an FAO table showing NZ and Canadian consumption. Or, at least, I'd expect that this has to be per capita consumption rather than production given that total NZ production is higher than total Canadian given relative herd sizes.

I threw these into Excel and plotted the series as ratios: in each case, the line shows New Zealand per capita consumption as a multiple or fraction of Canada's. You might need Java enabled for the graph to work.

We consume a lot more butter than do the Canadians, and more whole milk, but a lot less cream.

Here's the aggregate consumption data for 2007, the last year for which there's data.

Country ItemConsumption (kg/capita/yr)
CanadaButter, Ghee2.51
New ZealandButter, Ghee9.33
CanadaCheese12.73
New ZealandCheese4.92
CanadaCream8.85
New ZealandCream0.17
CanadaMilk - Excluding Butter206.83
New ZealandMilk - Excluding Butter103.79
CanadaMilk, Whole35.45
New ZealandMilk, Whole54.22
CanadaWhey7.38
New ZealandWheyn/a

A few puzzles:
  • Cheese here costs about NZ$9/kg including 15% GST - that's about Cdn$6.30. And, honestly, standard cheap cheese here tastes better than the somewhat rubbery stuff with the chemically orange food colouring I remember from back home. But NZ cheese consumption is very low relative to Canada's.
  • Differences in standard fluid milk prices don't seem huge. Ron says his local supermarket supplies at $4.47 Cdn for 4 litres, or NZ$1.42/l; we pay NZ$4.49 for 3 litres, or $1.50/l, though the dairy on my drive home sells it for $1.35/l. Price differences seem small. But NZ drinks a lot more milk than Canada.
  • The totals in the FAO table don't match the components; the difference would have to be stuff like ice cream that's not included. But if it's right, then Kiwis are consuming about half as much dairy product as are Canadians despite that dairy products here, compared to other food items, are relatively cheap.
Any candidate hypotheses?