The key themes of the Red Meat Sector Conference held in late July can be summarised as resilience and efficiency, food safety, brand building, disruptive technology, customer focus and free trade, writes meat industry commentator Allan Barber.
In tough times, farmers must be both efficient and resilient. When our dollar is overvalued, lamb prices are lower than desired, beef prices have come off their peak and dairy grazing income is no longer easy to come by, sheep and beef farmers have little option but to knuckle down and watch their expenditure. Without dairy grazers, an overheated store market makes it hard to rebuild stock numbers, while on the east coast of both islands grass growth and feed supply is not exactly plentiful.
James Parsons, chairman of B+LNZ, emphasised the need for incremental gains across the whole supply chain, in spite of the lift in the sector’s contribution to total exports, over $9 billion in the most recent year to June. Just as dairy farmers had applied great attention to on farm cost reduction, it is important for sheep and beef farmers to reduce their average costs to below $3 per kilo of production.
Nonetheless, farmers I spoke to at the Conference were remarkably cheerful and willing to keep on looking for better ways to farm, whether it be from improving soil quality, modifying their farming system to ensure the best one for their farm and land type, or better use of dairy cross beef cattle. The benefits of the Red Meat Profit Partnership are beginning to bear fruit with a group of trial farms now implementing the findings which will ultimately be to the advantage of the whole industry.
The food safety theme was pushed heavily by Jo Goodhew, Minister for Food Safety and Associate Minister for Primary Industries. She underlined the need to build the strength of the New Zealand brand on our reputation for food safety because of the consumer’s demand for transparency of food production – quality and safety are no longer enough to command a value added premium, but proof of sustainability and origin are now mandatory. These attributes must be part of the culture and ingrained, not just inspected into the product.
Steve Smith, co-founder of Craggy Range Winery, talked to the New Zealand Story which promotes New Zealand through the theme of ‘open spaces, open hearts, open minds’ built on story-telling and collaboration as a cornerstone of success. He urged the red meat sector to talk in the language of the consumer when telling its story, but posed the question ‘what the hell is the story?’ He suggested it should have a laser sharp focus on the affluent consumers of the world (we can only feed 30-40 million people, not the whole world) using the attributes of New Zealand’s heritage, health and wellbeing and be aligned with the country’s values.
Sir Ray Avery was adamant the customer has to be the starting point for what a business wants to make and sell, not the product itself. The red meat sector has been a past master at selling what it produces and processes, although to be fair for many years this was exactly what the customer wanted. It is important to know what’s happening in the consumer’s mind which makes the power of observation a valuable skill, while today disruptive technology, for example Uber and Airb’nb, is threatening traditional industries. In the food sector, My Food Bag has quickly built a successful business by employing a similar approach to meal production and delivery.
Free trade and trade agreements were the other major theme of the Conference with agriculture being identified as the international trade sector with the highest level of subsidies, $750 billion annually. Crawford Falconer, former deputy trade secretary with MFAT and now Professor of International Trade at Lincoln University, told the Conference delegates it was important to have a 10-15 year time horizon and there were other ways to skin the cat, if Trans-Pacific Partnership wasn’t signed this year or next.
He also said it was important to concentrate attention on Europe and post-Brexit UK where there could well be downward price pressure. The relationship with China needs consolidating with a greater focus on non-tariff barriers like food safety and individual processing facility accreditation. Indonesia is another important market where non-tariff barriers are more of a problem than an actual trade agreement which in theory already exists.
These main themes made for an informative Conference which concentrated on a number of positive opportunities which the New Zealand red meat sector has the opportunity to grasp. But hard work and collaboration are essential to get there. There are signs the sector may finally be learning to work together which gives hope success may not be all that far away.