Assignment 2 – Leandro Conte, 996116
Part A
Part One
1. Dairy farmers: Feed, fertiliser, water, cattle, land, labour (to milk cows), capital (tractors).
Milk processor: Labour (operating machines), capital (make milk into products), raw
material (milk), transport.
2.
3. Individual farm: Developing a reputation as a trustworthy and consistent supplier of milk to
dairy processors, while an additional barrier would be developing the capital to purchase
land that can hold a large amount of cattle.
Processing level: Raising the capital to purchase and produce dairy products.
It is predicted that the number of dairy farmers and milk processors in New Zealand will
heavily decrease, with the latter decreasing more so.
4. Farmers would have little market power because there are many substitutes to the product
that any one dairy farmer presents, meaning Fonterra can simply change from one dairy
farmer to another based on the price/quality of the dairy produced.
