Merry Christmas to all our readers

This year started with the debt crisis in Europe, went through droughts, the finding of the Higgs Boson and the first probe to land on Mars and ended with Gangnam style everything (watch the PetersonFarmBros putting the word out for food producers all around the world). It’s hard to tell what 2013 will bring!

Thanks to all of our readers who have stopped by MeatExportNZ this year. As of today, we’ve had over 7,600 views in our first busy six to seven months, which is really pleasing. There will be more to report in 2013.

As is customary in New Zealand, we will be taking a break for the festive season and the summer holidays and we’ll be back on stream in late-January. The meat business itself of course will carry on through its busy period.

Here’s to a great 2013! But first …029

Merry Christmas, safe journeys and Happy New Year to you all from MeatExportNZ. Ho, Ho, Ho!!!

 

Refreshed toolkit for land and environmental management

New Zealand farmers have a refreshed version of the Land and Environment Planning (LEP) toolkit to help them manage land and environmental issues on their farms.

Produced by Beef + Lamb NZ Ltd (B+LNZ), the toolkit was launched at an event in Christchurch at the end of last week by Minister for the Environment Amy Adams.

The tool helps farmers identify actions to improve production through good environmental management of the land, soil and water resources, says B+LNZ chief executive Scott Champion. “These plans can help them meet regional council requirements too in all parts of the country.”

The sheep and beef sector is an important contributor to the New Zealand economy, producing $7.5 billion a year in export returns. “Consumers in New Zealand’s red meat sector export markets value this country’s commitment to environmentally sound practices,” says Champion.

A copy of the toolkit can be downloaded here.

 

Pure South on board for butchery tri-nations

Sharp BlacksAlliance Group’s export brand Pure South has been confirmed as principal sponsor of the annual butchery test match which will now be known as the Pure South Butchery Tri-Nations.

The competition will see the best British and Australian butchers travel to Wanaka in March to take on New Zealand’s Wedderburn Sharp Blacks.

Murray Brown, general manager, marketing, Alliance Group, said it was fitting that a strong and successful export meat brand in Europe and Asia was backing a world-class competition.

“We’re pleased Pure South is supporting some of the world’s top butchers as they battle it out for the top honours. After a decade representing Alliance Group’s lamb in more than 65 countries world-wide, Pure South is now well-established as a brand associated with outstanding quality. Millions of consumer look for Pure South whenever their shopping or dining. It symbolises all the key elements of Alliance Group – pure southern location, world-class technology, production techniques and a proud heritage.”

2013 will be the inaugural Tri-Nations, following on from two years of Trans-Tasman battles between New Zealand and Australia.

Australia has come out the victor of both previous encounters by the narrowest of margins, so the Wedderburn Sharp Blacks, sponsored by Beef + Lamb New Zealand, will be looking for redemption on their home turf next year.

The competition will be accompanied by a study tour which will see 60 butchers from across the three nations travelling the Central Otago region.

‘Momentous’ US/NZ food safety agreement signed

Ministry for Primary Industries deputy director-general standards Carol Barnao (left) and US Food and Drug Administration deputy commissioner for food Michael R Taylor sign a systems recognition agreement at a meeting in Washington DC.

Ministry for Primary Industries deputy director-general standards Carol Barnao (left) and US Food and Drug Administration deputy commissioner for food Michael R Taylor sign a systems recognition agreement at a meeting in Washington DC.

New Zealand this week became the first country in the world to sign an agreement with the US Food and Drug Administration (FDA) that recognises each other’s food safety systems as providing a comparable degree of food safety assurance.

Meat exporters will welcome the move, which will enable

streamlining of product to the market – New Zealand’s top destination for beef, fifth largest for venison and fourth largest for lamb – through the reduction of red tape and costs.

The Food Safety Systems Recognition Arrangement was signed at a meeting in Washington DC by delegations from the Ministry for Primary Industries (MPI) and FDA.

“This is momentous for MPI as it is the first time the FDA has recognised another country’s food safety system as comparable to its own,” says MPI deputy director-general standards, Carol Barnao.

“The arrangement with New Zealand is part of an overall strategy for strengthening the global food safety net through closer collaboration with regulators around the world, highlighted in FDA’s report Pathway to Global Product Safety and Quality,” FDA’s Deputy Commissioner for Food Michael R Taylor says.

Carole Barnao says both countries have done a huge amount of work ahead of this week’s signing.

“This process has included a comprehensive review of each country’s relevant laws and regulations, inspection programmes, response to food-related illness and outbreaks, compliance and enforcement and laboratory support.

“In one calendar year, FDA and New Zealand officials spent an intensive period of time together including visiting production plants, cold-store facilities, verifiers and accreditation authorities looking at the effectiveness of how each other’s preventative controls and verification systems worked.”

Barnao explains that both countries intend to use the agreement to lessen the potential regulatory burden for foods traded between the countries by removing unnecessary duplication of activities.

The agreement covers all foods and animal feeds regulated by the FDA, which equates to $1.5 billion of New Zealand’s current exports of primary products.

“Systems recognition agreements are very important for MPI to help us achieve one of our key strategic goals of maximising export opportunities through other countries’ recognition of the credibility of our food safety controls,” Barnao says.

Lower lamb prices expected, but firm for beef

MPI Situation and Outlook update December 2012New Zealand’s meat processors and farmers can expect lower lamb prices over the remainder of the 2012/2013 production season, while beef prices are expected to remain firm over the next two years, says the Ministry of Primary Industries (MPI).

Deteriorating global economic conditions are having a significant impact on returns for New Zealand’s primary produce, according to the MPI’s recently released half-year update to the annual Situation and Outlook for Primary Industries report, which was published in June.

The update shows there has been strong pastoral production so far in the 2012/2013 season. “This is partly due to favourable climatic conditions during the previous season which left breeding stock in good condition and also ongoing expansion of the dairy herd,” says Chris Jones, manager of economic information and analysis for MPI’s sector policy division.

However, MPI reports the continuing economic slowdown, particularly in the traditional markets of the European Union, is causing weaker demand for some products such as lamb resulting in lower lamb prices. In addition, the strengthening of the New Zealand dollar against most major trading currencies in recent months is having a dampening effect on farm-gate returns for primary produce.

In contrast, beef prices are expected to remain firm over the next two years, following a major drought in North America affecting production there.

As a result, primary sector export revenue for the year to June 2013 is forecast to be around $27.5 billion, down five percent on the previous year ($29.2 billion).

 

 

New fashioned shopping values emerging in Britain

‘New fashioned values’ are emerging in British shoppers in these difficult economic times, according to new research from leading retailer Sainsbury’s.

Having to think more carefully and thoughtfully about household spending, especially on food has triggered a set of new, positive shopping behaviours across all socio-economic groups, says a blog on the retailer’s website.

“Our research shows a deep and widespread change has taken place with 83 percent of Sainsbury’s shoppers having changed their shopping habits in the last year.”

Shoppers are “rediscovering habits of previous generations” – making shopping lists, planning weekly meals, being creative with leftovers and preparing packed lunches. More people are choosing bargains and basic products for everyday needs, but are “enjoying the sense of deferred indulgence that comes from saving up and splashing out on special occasions.”

Sainsbury’s research has also shown that while consumers have reduced their spending, “they actually care more” with quality, integrity and sustainability increasingly becoming the drivers that shape shopping choices, as well as prudence.

“These ‘new fashioned values’ are not a passing phase but represent a fundamental change that is here to stay,” says Sainsbury’s, adding that it launched its 20×20 Sustainability Plan a year ago. The retailer believes its commercial success will continue to depend on continuing to meet and anticipate its customers’ changing needs.

“We can’t do this alone and need the industry, our suppliers and other experts to radically re-examine our ways of doing things, to help meet some of our targets such as doubling the amount of British food we sell and increasing the sales of fairly traded products to £1 billion.”

Market researchers Mintel had analysed Sainsbury’s customer behaviour and reported the findings. The result, a factsheet  The rise of new fashioned values’shows that the results span all socio-economic demographics. The research showed that 83 percent of people have changed their shopping habits in response to squeezed family budgets and that fairness to employees, waste and Britain remain similar to last year.

The factsheet shows Sainsbury’s has identified five characteristics of ‘new-fashioned’ values:

  • Savvy sustainability – customers are showing a growing tendency to save and splash out and they also still want to live well.
  • Values re-evaluated – evidence suggests a genuine deepening of values. The economic downturn is not an excuse to abandon issues such as animal welfare, fair-trade or sustainability, even in economy products.
  • Act for me – People have greater, more exacting expectations of companies. “They probe deeper for answers and, largely through digital media, they are far better informed than ever before,” says the report.
  • Health – is now a mainstream consumer issue, “although people are still seeking healthier rather than the healthiest options.”
  • Close to me – While global issues have become increasingly complex and difficult, people are placing greater importance on local matters, “because doing so gives them a greater sense of control and trust.” Customers are also showing more interest than ever in supporting charities and community causes. They are putting more importance on ‘being a good neighbour’ and expect businesses with which they deal to do the same, both locally and nationally.

It also covers how Sainsbury’s is meeting the needs of the new-fashioned shopper, through helping consumers to live the way they want to live and making it easier for them to buy what they need. Making sure customers can be confident about the quality, value and integrity of the products, irrespective of price or range.

Read more …

ANZCO starts energy management programme

One of New Zealand’s largest exporters is set to save more than $2 million a year and enhance its global reputation as a sustainable producer through a company-wide energy management programme.

The Energy Efficiency Conservation Authority’s EECA Business announced yesterday it would support the initiative over two years to help meat processor and exporter ANZCO generate long-term energy savings in its New Zealand plants.

With annual sales of $1.25 billion, ANZCO Foods Ltd processes and markets New Zealand beef and lamb products around the world. The firm employs over 3,000 staff world-wide and has 11 meat processing plants in New Zealand.

This programme will target a reduction in its processing plant energy use by 25 gigawatt hours (GWh), returning ongoing annual savings of $2.45 million after two years.

EECA Business general manager Ian Niven says that making better use of its energy will provide far-reaching benefits for the company and congratulated the company on its vision.

“Globally New Zealand is recognised for sustainably produced, premium quality meat products. And energy efficiency is one of the best ways to strengthen environmental credentials.

“By taking a lead in energy efficiency, ANZCO is making significant energy cost savings and signaling to its customers that it is committed to sustainable production,” he says.

Mark Clarkson, ANZCO Foods.

ANZCO managing director, Mark Clarkson says the programme will deliver on many levels for the company.

“Sustainability is key to the ANZCO brand and we are always looking for new ways to build on our reputation for environmentally responsible production, so reducing energy costs is a priority.”

The programme involves the establishment of a group-wide energy management plan, led by a team responsible for putting in place up to $5 million of identified energy efficiency projects.

With the assistance of one of EECA Business’ industrial programme partners, ANZCO will set up a system to help keep the programme on-track, measure efficiency outcomes, and develop case studies for a number of the projects.

Ian Niven says management commitment is key to the programme achieving its objectives.

“From the Board of Directors through to site operations, ANZCO leadership has indicated it wants to foster a culture of efficient energy use throughout the company.

“Such commitment is important to the success of making enduring improvements to energy management.”

EECA Business funding of up to $450,000 will be made available in stages upon achievement of various programme milestones.

Debt is good under some circumstances, says Barber

Allan BarberAfter Allan Barber’s column last week about meat industry debt levels, Keith Cooper, chief executive of Silver Fern Farms, took him to task for incorrectly reporting the situation with Silver Fern Farms’ debt facility, he writes in his latest guest blog.

I stated that these expired in September 2012 and therefore the company was operating on a temporary extension. The correct position was that the debt facility was originally negotiated for two years from September 2010 and consequently due to expire in September 2012. This remained the position at balance date in September 2011. However in the 2012 annual report, the facility was stated as expiring on 31 December 2012.

Clearly, the company had arranged a three month extension at some point before the original two year facility expired and this was not a temporary facility, as I implied. Nevertheless, it was no more than a three month extension, while the next longer term arrangement was being negotiated.

I apologise for any incorrect interpretation, but still maintain the company’s current debt level at balance date was higher than could be considered comfortable.

However, in an interview with Jamie Mackay on the Farming Show last week, when asked to comment on the industry’s debt level, Cooper gave his opinion that the debt was a good thing. Because it was tied up in inventories, it would ensure the industry acted responsibly. This is almost exactly what I wrote last week, although I saw the discipline on the companies as a necessity, not a virtue.

In Cooper’s radio interview, he stated after record prices last year, meat companies are reining things in.

“It’s a damn good thing we do have stock in store and we do have high debt because that means meat companies are acting responsibly, and are feeding the product to market to create stability of price. I’m quite happy that us and other companies have debt because that means they’ve got stock in store and that means we’re managing markets well.”

I must give Keith credit for being unreservedly a ‘glass half full’ kind of guy which you have to be to survive in what I believe is New Zealand’s toughest industry. He promises farmers that things will improve.

“We are living in volatile times. There will be volatility, but through the volatility we will see a steady increase in the price we will receive from offshore,” and he expects meat companies will pay farmers around 90 dollars per lamb this year.

I’m not sure the glass is quite as half full as Keith Cooper suggests, especially in the sheep meat market. Although lamb leg prices in the UK are holding fairly well, especially for chilled product, prices for middle cuts, like racks, loins and tenderloins, in North America and Europe are under pressure.

The price of loins and tenderloins have dropped by as much as 30 percent in the last couple of months, while there are fears of another collapse in lamb rack prices because of competition from low priced Australian product. As a result, importers are not placing orders for New Zealand lamb, because they remember the last time prices collapsed.

The Middle East has gone quiet on lamb shoulders because of cheaper Australian product, although China is still firm. Here, it appears New Zealand exporters benefit from less Australian competition with fewer China licensed plants in Australia.

All this explains why the New Zealand consumer is able to buy plenty of well priced lamb available on the domestic market. But this won’t provide more than a minimal contribution to managing the existing inventory levels and it certainly won’t cope with next year’s peak production. The industry will be keeping its fingers and toes crossed for an early economic uplift in our main markets, UK, Europe and North America, because otherwise the glass won’t have much in it at all.

Allan Barber is an agribusiness commentator, with particular interest in the meat industry. He has his own blog Barber’s Meaty Issues. This item has also appeared at www.interest.co.nz.

Silver Fern Farms donates $500,000 to Te Aroha Events Centre

Pictured left to right are: Eoin Garden, chairman, Silver Fern Farms;
Keith Cooper, chief executive, Silver Fern Farms; Peter Jager, chairman Te Aroha Events Centre Charitable Trust; and Prime Minister John Key.

At the official opening of Silver Fern Farms’ new world-class Te Aroha beef processing facility last week, the company also announced its intention to make a sizeable donation to a community initiative of major significance to Te Aroha.

Silver Fern Farms chief executive, Keith Cooper, revealed that the co-operative and its local farmer-suppliers had jointly contributed to a dedicated Te Aroha Community Fund over the period the plant had been out of operation.

Silver Fern Farms’ Te Aroha beef plant was destroyed by fire in December 2010, devastating the company’s local workforce and impacting heavily on the Te Aroha community. Fully aware of the uncertainty the community faced, the company signalled its intent early-on to rebuild a new state-of-the-art flagship processing operation on the same site.

In the interim period, the company had endeavoured to provide alternative options for staff whose livelihoods were affected by the fire, to the extent of making positions available at neighbouring plants, providing accommodation supplements in the early stages and donating meat for food parcels for those in need.

“We were heartened by the way the Te Aroha community rallied so bravely around affected Silver Fern Farms employees. From the outset, we were determined to make a meaningful contribution to the township above and beyond our commitment to rebuild – one that would acknowledge the support of the Te Aroha community into the future. We reached out to our loyal suppliers in the area and their response to the appeal was overwhelming” said Cooper.

Over the last two years the company had been working in partnership with the Matamata-Piako District Council to identify where the fund might ultimately be best deployed. This culminated in the co-operative proudly announcing base funding of $500,000 for the establishment of the Silver Fern Farms Te Aroha Events Centre in association with the Te Aroha Events Centre Charitable Trust.  The Events Centre has been a long-hoped for facility in the Te Aroha area to support community health and wellbeing, and Silver Fern Farms’ donation will provide a major funding boost to progress the initiative.

Silver Fern Farms’ Te Aroha plant will be fully commissioned ahead of the new season and will employ up to 380 staff when operating at full capacity, which is welcome news for the township.

“The whole community has been behind the project every step of the way” said Te Aroha plant manager, Lance Warmington. “The company’s commitment to rebuilding Te Aroha is a big deal here – it means future security for hundreds of families in the area.”

Meat and dairy lead manufacturing rise

Aside

Meat and dairy products dominated the rise in total manufacturing sales for the September 2012 quarter, according to Statistics New Zealand.

After adjusting for seasonal effects, the value of total manufacturing sales rose 1.6 percent ($370 million), led by the 9.3 percent increase in meat and dairy product manufacturing.

When price changes are removed, the volume of manufacturing sales rose 2.6 percent, also led by meat and dairy product manufacturing, up 13 percent.

“The volume increase in meat and dairy manufacturing is reflected in the rise of export volumes for dairy and meat products, with increases of 32 percent in dairy and 15 percent in meat,” industry and labour statistics manager Blair Cardno says.

“Looking at the longer-term picture, the trend for manufacturing volumes has risen in the past year.”

Without the meat and dairy industry contribution, the volume of manufacturing sales fell 1.4 percent in the September quarter.