Audrey Young: The New Zealand "boogey man"

US farmer Walter Whitcomb suggests NZ could be the 'boogy man' of the international dairy trade. Photo / Mark Mitchell

My last day in Washington covering the Prime Minister's nuclear summit was rather rural.

While the leaders were in session I spent the morning at the United States Department for Agriculture at 1400 Connecticut Ave.

It's a grand old building with a Hall of Heroes and state flags on display. It is slightly antiquated. They like to take down the serial number of your laptop so that they can be sure that you are taking the same laptop out of the building and not one of their own (then they forget to check you on the way out anyway).

The reason for heading to the USDA is to watch a committee in session. It is a new dairy advisory committee of 25 made up mainly of working farmers – or dairymen as they are called - formed by the Agriculture Secretary Tom Vilsack to try and sort out the mess that the milk pricing subsidies have led to.

When it seemed a possibility that Vilsack might spare a couple of minutes with the Kiwi journos on the trip I went to his website and by chance found a notice of the first meeting of the committee which said 'open to the public."

Fonterra's people were there. New Zealand embassy staff were there too.

I listened to an expert try and explain some of the ways that the milk price subsidies have unintended consequences for other types of assistance to farmers can get and that can force changes to forward budgets and lead to volatility in pricing that, on top of the dire financial conditions, is driving people out of the industry.

It was a lot more complicated than that but essentially the farmers have been asked to try and do something about it themselves.

The stat that stuck in my mind was that the rough average subsidy for the dairy sector over recent years has been about $500 million. The other stat that stuck in my was that in 2008 there were only 56,000 dairy farm businesses.

I didn't hear any mention of the Trans Pacific Partnership that 30 US Senators have warned about in a letter to the Trade Minister equivalent, Ron Kirk, but I wasn't there for the whole day. The bottom line is they think that Fonterra will be more competitive than me and run them out of business.

The committee broke and went for lunch upstairs, and the public were offered lunch in the USDA staff cafeteria which is where I was joined by a couple of nice blokes, one who worked for the department and another, Walter Whitcomb from Maine who had come down to observe.

He farms about 160 cows. He has about a 1000 acres but much of it is swamp and trees and he farms on only 250 acres of it.

Walter was delighted to see a Kiwi because his daughter Holly, who has just finished at Cornell, is living in New Zealand doing a dairy farming exchange in the South Island near a place beginning with O. Oamaru I guessed.

They were intrigued as to why I would be at a milk pricing hearing in Washington so we talked about the Trans Pacific Partnership and the senator's letter. Walter's two senators had signed it.

I asked Walter about the TPP and what his Maine colleagues thought.

"It's a case of bad timing in the world of politics. Dairy farmers nationwide as we have heard at this dairy conference today are producing at less than their cost of production. They are losing money and they are losing equity very fast. So one of the concerns is any product on the world market is a threat.

"There are calls being put out by farm organisations that look at low cost exports in regional markets like the Pacific and are viewed as a threat to producers.

"It would be honest to say that the dairymen have focused on New Zealand product as being in the market place cheaper than American product and that is viewed as a threat.

"You're an easy target. You're a boogey man and it in a sense having family that's been there and that's there now, to think that New Zealand is such a threat in the global scheme of things, it's not laughable but it's perhaps not the right target.

"I've had family who have been there before and a daughter who is there now and I think a better understanding of how it is that you do things would help us all thrive a little better."

Thanks Walter. I think I understand you guys a little better, too.