Economics/Class Relations

The New Zealand Dairy Industry

by Peter Zeihan on April 26, 2023

Today’s shenanigans come to you from Lake Pukaki in Central Otago, New Zealand.

I think I’ve found my favorite trail snack – Kikorangi Triple Cream Blue from Kapiti – I swear it will turn a 15-mile trek into a brisk walk. It just goes to show that as the world’s top dairy exporter, New Zealand has its s*** figured out, and the Americans need to step up their game.

There are two traditional approaches to the dairy sector: French vs. American. The French way is centered around small towns, with lower throughput, and offering specific products to the local community (oh, and the safety standards are subpar). The American way is to supersize everything for more reliability and a more economical system. And you don’t have to worry about subsidies like the French (and yes, everything is safer).

The issue for the French is that you can’t scale their system. The issue for Americans is that not everyone wants American Cheese. However, the Kiwis found the perfect blend of both. They have low costs thanks to mellow weather, rain, and open land. Since they don’t have many people, they have plenty of leftover products to export….and they know how to create specialized goods that people actually want.

Finding a balance of scale and specificity seems to be the sweet spot for the dairy industry…now we just have to convince Kapiti to start selling this stuff back in the States.

The New Zealand Dairy Industry || Peter Zeihan

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