Food Prices

There has been a lot of talkback about the prices of dairy foods. But it might get worse . . .

Imagine you are a chinese peasant earning $1 a day - and feeling hungry and worried about the kids.

Then life improves - you get $2 a day. What would you spend the extra $ on?

More food! Then better food!

So if there were one billion chinese peasants in this situation and they did get that extra $ a day and they did spend it on food - then their additional purchasing power would be $365 billion dollars pa.

Maybe our dairy farmers would get a reasonable slice of that. Great! But demand would would also drive the price up. Even better! And the lamb and beef farmers would get a slice too.

So maybe life would be better for the 1 billion chinese but also for New Zealand.

But the lower socio-economic people in NZ may feel the impact of the higher prices.

I guess that's life - life's not fair - get used to it! Or adjust the tax system! Again!