Dairy farming (New Zealand)

• The Analytics of Dairy Company Amalgamation Download (PDF) Paper presented to the winter meeting of the NZ Agricultural and Resource Economics Society, Blenheim, 2000.
  In New Zealand there has been a gradual process of consolidation in the structure of the industry in the last 100 years, from 400 cooperative dairies to just a few. In 1999, the last two big cooperatives, the Kiwi company and the NZ Dairy Co-op, initiated plans to amalgamate with the NZ Dairy Board, which had statutory responsibility for overseas marketing. In preliminary negotiations, it became clear that the merger terms between the companies were foundering on questions of value and relative performance. This nine-page paper explores a discounted cash flow model for valuing the respective contributions of the two companies to the merged company. Actual cash flows are not explored (due to lack of data) but the issues involved are discussed [In the event, independent consultants found that there was insufficient difference in the prospective cash flows to warrant one company paying an entry fee into the merger].

• Dairy Mergers and the National Interest (2001c). (PDF). Also available from Agribusiness Perspectives Papers 2001, Paper 45
  This 13-page paper, presented to the NZ Agricultural and Resource Economics Society on 7 July 2001, discusses the Commerce Act legislation in New Zealand and its provisions for preventing mergers that reduce competition. The criteria used by the Commission are strictly national interest criteria based on market dominance theory. The Commission produced an adverse determination in the case of the merger of the two major dairy companies in New Zealand and the companies have since resorted to a direct approach to Government.

• Recent Trends in Dairy Farm Productivity. (PDF)
  Paper presented at the Eighth Annual Conference of the NZ Agricultural and Resource Economics Society 2002 with Ann Anderson.
  This paper uses Tornqvist index numbers to estimate total farm productivity trends in NZ for the period 1991-2001. The sample is divided into owner operator farms and 50/50 sharefarmers (the value of milk sales is divided equally between the land owner and the herd owner). The early 1990s were a period of rebuilding in the industry and real inputs exceeded real outputs. Since 1996 the reverse has been true and total productivity has increased by 3-4% per year.