Tag Archives: US

Delivered: second Red Meat Sector Conference

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Delivered, as promised: Excellent, inspirational and thought-provoking speakers, all appearing in a packed programme for the 250 delegates attending the second Red Meat Sector conference.

Congratulations must go to the Meat Industry Association (MIA) and Beef + Lamb NZ Ltd (B+LNZ), joint organisers of this year’s well-attended Red Meat Sector Conference at Rydges Lakeland Resort hotel in Queenstown.

Alongside heartening optimism for future demand for red meat, recurrent themes were the massive potential for New Zealand of emerging markets in Asia, especially China, water issues, the need to utilise best practice, the need for all links in the chain to tell the industry’s story to the public, plus the rapid emergence of social media as a tool for communicating with consumers.

In his opening comments, MIA chairman Bill Falconer also noted that, while not as quickly as some would like, encouraging progress is being made on the Red Meat Sector Strategy and that “small starts are being made across the board.” Later in the day Rob Davison, from the B+LNZ Economic Service, outlined a number of matrices that the Economic Service is developing that will help to track progress against the strategy, and these matrices will “focus conversations, thinking and actions to drive the future”.

The Conference also saw the announcement of new Primary Growth Partnership (PGP) funding for the red meat sector, for a project to develop high-value grass-fed marbled beef, using Waygu genetics.

All the presentations were a veritable smorgasbord of information, packed with facts, statistics and views from many facets of the industry, enabling delegates to pick out what was relevant for their part of the value chain. While every single one of the speakers was passionate and eloquent about their topic, from an export food manufacturing perspective the highlights were excellent presentations from McDonald’s Arron Hoyle and vertically integrated meat processor Agri Beef’s Rick Stott from the US.

Besides the serious business, there was entertainment and laughter too. Lunch – finger food featuring B+LNZ Ambassador chef Ben Battersbury’s speciality “alternative cuts, not cheap cuts” like lamb riblets –  was amusingly heralded with witty comments from him. After dinner speaker Davey Hughes of Swazi Apparel gave an hilarious account of hunting expeditions in Africa and shared a few (tongue-in-cheek) items from his latest collection, including a new ‘mankini’.

Also noteworthy, was a significant Australian presence at the conference in the form of representatives from Meat & Livestock Australia and Aus-Meat. This put physical form to MLA’s managing director Scott Hansen’s opening comment in his presentation that “Australia sees a close collaboration with New Zealand.”

There was positive feedback from delegates, who came from all parts of the sector, including farmers, processors, equipment suppliers, researchers and media.

This article appeared in Food NZ magazine (August/September 2012). Copies of most of the conference presentations are available at www.mia.co.nz or redmeatsector.co.nz.

 

Full cup, steady hand

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While New Zealand sheepmeat producers have been enjoying a ‘full cup’ in recent times, with strong farmgate returns, a ‘steady hand’ will be needed to balance future production levels with demand uncertainty across European markets.

A newly released report Sheepmeat – full cup, steady hand from global agribusiness banking specialist, Rabobank, says that the strong farmgate returns in the past two seasons, have been as a result of retail price increases and limited supply availability.

Report co-author Hayley Moynihan says global sheepmeat supplies are forecast to increase from 2013, off a low productive base, although this volume growth is expected to be modest and availability will not recover 2010 levels until 2015.

“While sheepmeat demand has softened in developed markets, we expect retail prices will normalise at new levels – typically 10 percent higher than the three-year average for most regions,” she says.

“For New Zealand producers, a positive outlook will persist in export markets as the economic outlook improves and the market balance remains tipped in their favour.”

As the governments of the EU countries seek to restore balance to their economies, policy changes are expected to place increasing pressure on consumer purchasing powers, says Moynihan. In real terms, the increased cost of living for the average EU consumer is likely to exceed any growth in income, at least for the next 12 to 24 months.

Meat price inflation has led the charge in annual food prices, averaging 4.5 percent year-on-year, with eastern European countries experiencing increases as high as 10 percent in 2011.

“These factors can be expected to weigh heavily on sheepmeat demand and to limit growth prospects.”

Rabobank is picking a slow recovery for developed markets through to the end of 2013. “Emerging markets will continue to grow, albeit slightly below the rate of previous years and offer opportunities for sheepmeat demand growth,” says Moynihan.

The Rabobank report says retail prices will also be influenced by continued strength of competing meat prices; the impact of lower beef production from the US and EU on global supplies; and the rising beef production costs from Brazil, China and Australia..

“These factors are likely to mean that retail price movements for lower-value cuts will continue to rise faster than high-end cuts. This will be particularly evident across emerging economies and consequently only provide limited upward pressure on farmgate returns for exporters,” it says.

Moynihan says that by 2015, sheepmeat production from key exporting regions is expected to lift by an additional 135,000 tonnes a year, which would bring global export supply back to 2010 levels.

Production boom confirmed by MPI

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The production boom, alluded to by several at the Red Meat Sector Conference, has been confirmed in the Ministry for Primary Industries (MPI)’s latest primary industry statistics released today. They show increased production of beef and sheepmeat, corresponding with growth in the export volumes for the meats, but falls in export revenue earned from lamb and venison.

‘Primary Industries Production and Trade‘ for the March quarter 2012 is the first release of a new combined primary industry quarterly report, comprising production and trade statistics for the meat, dairy, wool, forestry and seafood industries. It replaces separate quarterly reports for forestry and seafood that were previously released by the Ministry.

The report shows that the primary sector continued to be an economic driver, with total primary sector exports accounting for 71 percent of all merchandise exports in the year to March 2012.

MPI reports favourable climatic conditions led to a continuation of better-than-usual pasture growth during the March 2012 quarter. As a result, farmers achieved near-record carcase weights for slaughtered livestock and an 11.5 percent increase in milk solids’ production, compared with the same quarter in 2011.

However, the stronger New Zealand dollar coupled with easing international dairy prices meant that overall primary sector export revenue for the quarter was down 2.4 percent on the previous year, at $8.3 billion.

At the same time, total export revenue for the year to March 2012 was up 6.2 percent on the previous year at $32.3 billion.

In the year to the end of March 2012, exports of New Zealand’s beef and veal, lamb and mutton, venison and other meats, earned revenue of $5.6 billion, while hides, leather and dressed skins added a further $591 million to the export pot. This made a total of $6.233 billion, accounting for 13.6 percent of total NZ merchandise exports.

According to the report, beef production increased by 1.4 percent in the March 2012 quarter (compared with the March 2011 quarter), due to increased carcase weights, the highest since 2006. This was despite lower adult cattle slaughter numbers. Lamb production was up 2.4 percent because of increased slaughter numbers and a record average carcase weight of 17.6 kg.

The volume of beef and veal exported increased 1.3 percent to 98,450 tonnes in the March quarter, in the March quarter, while export value decreased 4.5 percent to $570 million because of the strong New Zealand dollar. Beef and veal exports to New Zealand’s major export market, the US, increased 9.3 percent by volume and 5.3 percent by value because of stronger demand.

Export volumes of lamb increased 4.7 percent to 79,000 tonnes, while export values decreased 1.3 percent to $722 million. Lamb exports to New Zealand’s main market, the European Union, decreased 9.1 percent by volume and 9.6 percent by value, which the report says was due to a decrease in frozen export volumes and increased export sales to China and OPEC.

Revenue earned from venison exports fell slightly by 0.4 percent at the end of March 2012, compared to the previous year, though volume had dropped by 4.3 percent.

A pdf copy of the report can be downloaded by clicking the link below or at the MPI website (search on ‘Primary Industries Production and Trade’).

MPI-Prod&Trade-March2012 quarter

New Zealand’s ‘liquid gold’

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Water is also on the mind of our politicians. Water – New Zealand’s ‘liquid gold’ – is possibly New Zealand’s biggest opportunity to grow the productive part of our economy, according to the Minister for Primary Industries.

David Carter was speaking to the Federated Farmers’ annual conference last week, when he talked about New Zealand playing to its strengths.

“We can’t go past our abundance of water or New Zealand’s ‘liquid gold’.”

Despite difficult fiscal conditions, he pointed to the Government’s fronting with $35 million for the Irrigation Acceleration Fund to 50:50 fund the feasibility studies of schemes around New Zealand.

“The Government’s also committed $400 million through the Future Investment Fund to invest as a cornerstone shareholder in large water storage and irrigation schemes.

“We are making progress, particularly in Hawke’s Bay, Canterbury and Otago, but achieving consensus of all the various stakeholders means progress is slower than I would like.”

Most important aspect

David Carter, NZ Primary Industries MinisterIn his speech, the primary sector was referred to as “the most important aspect driving our economy forward.

“The healthy performance across most of the primary sectors has enabled our economy to weather the storms of the global financial crisis and, locally, the Canterbury earthquakes,” he said, pointing to the fact that the primary sector now makes up 71 percent of New Zealand’s total merchandise export trade.

Carter referred to the EU’s “major challenges” and the “subdued” US, which in the past would have had a huge impact on New Zealand. New Zealand is fortunate to have repositioned itself so significantly with Asia, he said.

“We are well on the way to realising the Prime Minister’s ambition, which is shared by China’s leaders, to double our bilateral trade to $20 billion by 2015. The government’s trade agenda, led by Tim Groser, has the potential to deliver more opportunities to primary producers and exporters.”

Talks with eight other Trans-Pacific Partnership countries, including new partners Mexico and Canada, and also Russia, India, South Korea and the Gulf States “and you sense the size of the potential prize,” he told delegates.

The Minister had just returned from Russia, with which free trade negotiations are progressing. Two-way trade is currently worth about $700 million. “But, if a deal is reached, it will be Russia’s first international trade deal and our exports will grow significantly,” he said.

Highly regarded

“One of the things that was reinforced to me during my trip was how highly regarded New Zealand is internationally. We are renowned as producers of some of the best food in the world, at a time when food security is the world’s greatest challenge.”

The Minister also referred to the importance of biosecurity, local government reform, rural broadband initiatives and a new animal welfare toolkit for farmers being launched by the Ministry for Primary Industries in his speech.

 

Mexico joins TPP

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Meat exporters to the Americas will welcome the news announced by Minister of Trade, Tim Groser, that Mexico is joining the Trans Pacific Partnership (TPP) negotiations, alongside current participants Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, the US and Viet Nam.

“We believe Mexico’s participation in the negotiations will contribute to the objective of creating a 21st century agreement that will spur economic growth and development, promote innovation, benefit our consumers, and support the creation and retention of jobs, high living standards and the reduction of poverty in our countries and the broader Asia-Pacific region,” the Minister says, adding the NZ is looking forward to working with Mexico to conclude a comprehensive and balanced package, taking into account the diversity of the levels of development.

Step towards free trade area

According to the NZ-US Council,  this is another step towards achieving precisely what was first envisioned – a free trade area of Asia and the Pacific.

“This is good news for businesses which need to operate more effectively and seamlessly in the region,” says NZUS Council executive director Stephen Jacobi.

“Mexico is a steadily growing market for our products, with enormous potential for New Zealand exporters. A successful outcome to the TPP negotiations will also allow New Zealand to leverage the potential in the education and research relationships we have with Mexico.”

Mexico’s entry will make New Zealand’s competitive position in Mexico the same as the NAFTA partners, USA and Canada.

New Zealand exports to the market in 2011 were worth $414.8 million and it was our 25th largest export market. Meat and dairy are the top New Zealand exports to Mexico, with dairy accounting for 62 percent.

Jacobi says that the NZUS Council is pleased to note Mexico is joining the TPP n the same terms as those already taking part in the negotiations. This means these economies share the aspiration for an ambitious and comprehenisve 21st century agreement.

“If the momentum started by Mexico leads to a Free Trade Area of Asia and the Pacific, we would see New Zealand lift its exports by 8.5 percent above 2025 baseline levels and welfare gains to New Zealand lift by 1.35 percent of GDP.

“We look forward to Japan and Canada joining the negotiations, once both economies are confident they can meet the high ambition of TPP and consultations are complete,” says Jacobi.

ACCORDING TO NZUSC: TPP is an existing trade agreement between Brunei, Chile, New Zealand and Singapore, which Australia, Malaysia, Peru, the US and Vietnam wish to join. Eleven rounds of negotiations have been held involving the nine partners. The economies of the Asia-Pacific Economic Cooperation (APEC) account for over 70 percent of New Zealand’s total merchandise trade. Trade with APEC economies has been growing at an average of 4.5 percent per annum over the last 20 years. The TPP could add around $2,.1 billion to the New Zealand economy by 2025, according to research undertaken by the East-West Center in Honolulu.

Six Second Project calls on worldwide meat industry to end child starvation

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An ambitious new charitable project encouraging the worldwide meat industry to spearhead a new initiative aimed at ending child starvation and hunger was launched at the recent World Meat Congress in Paris last week, endorsed by the International Meat Secretariat.

The Six-Second Project is a global non-profit organisation, based in the US, deriving its name from the appalling statistic that a child dies every six seconds from hunger or hunger-related causes. The Project aims to raise widespread awareness of that fact, to be achieved through a unified fundraising and awareness campaign led by the global meat industry. Another goal is to foster innovative and sustainable solutions to the hunger pandemic, especially in areas where the six-second statistic is the unacceptable reality, the organisation says.

The worldwide meat industry and its partners are being challenged to join the Project by participating in a unified cause ’cause marketing’ campaign to raise funds for defeating hunger.  The ambitious idea is that project partners will create special products and/or promotions and commit to donating a generous portion of sales to the Six-Second Project. Funds raised will then be used to provide grants that foster innovative and sustainable solutions to the global hunger pandemic.

“It is our hope that, by raising awareness of this global issue, the general public will also be inspired to make a difference, not only through their purchases of products from participating partners, but also through volunteering, donating and recruiting their neighbours and friends to become involved in this noble cause,” say the organisers.

In the unprecedented move – this is believed to be the first time a global industry has been challenged to confront such a crisis – the Six-Second Project is targeting the meat sector’s food production and distribution experts as it believes they have “never been better suited to accept such a challenge”.

The meat industry is not without its critics, its organisers note. “The industry is being challenged to address its environmental impact, and the sustainability of its future production. Likewise, the Six-Second Project challenges the meat industry to harness its size, strength, knowledge and diversity to become the leader in this fight. Through a unified effort to fight hunger, the industry can effect positive change by giving back to the communities that need it most.”

At the project’s launch at the World Meat Congress, chief executive of the US Meat Export Meat Federation, is reported to have said: “This is an opportunity to make meat the brand that is fighting global hunger.”

 

 

 

 

Carter to Russia and US

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David Carter, NZ Primary Industries MinisterPrimary Industries Minister David Carter is representing New Zealand at the APEC Food Security Ministerial meeting in Russia next week and will also travel to the US for a round of high level agriculture meetings.

The APEC meeting in Kazan will focus on a range of issues concerning agricultural productivity, including longer-term investment in sustainable agriculture and the role of international trade in improving food security.

“As a leading food exporter with world-class expertise in agricultural production, New Zealand knows only too well the importance of global food security,” Carter says.

“To this end, New Zealand has taken an active role in promoting multi-country cooperation such as through the Global Research Alliance on Agricultural Greenhouse Gases. We also continue to promote a rules-based trading system to ensure consumers have access to a reliable food supply.”

The Minister will travel to Washington DC to meet with a number of political agriculture leaders and industry representatives.

“These meetings will further strengthen the New Zealand-US bilateral relationship and give our two countries the opportunity to discuss issues such as the positive collaboration on research into livestock-generated greenhouse gas emissions,” he says.

“I also look forward to discussing with my US counterpart and others the mutual benefits that will be realised through the high quality Trans-Pacific Partnership Free Trade Agreement currently under negotiation.”

The Minister will also make a stop in Hong Kong to address an event showcasing New Zealand food and wines.

Eyes on US BSE case

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A case of the cattle brain disease bovine spongiform encephalopathy (BSE) was diagnosed in a cow in the US in April, holding global meat industry attention, but producing cautious response to date.

The United States Department of Agriculture (USDA) reported that as part of its targeted surveillance system, its Animal and Plant Inspection Service had confirmed a case of BSE in a dairy cow from central California, the first such case since 2006. USDA chief veterinary office John Clifford confirmed that it was never presented for slaughter for human consumption, so at no time presented a risk to the food supply or human health.

Clifford said tests, using immunohistochemistry and western blot tests, “confirmed that the animal was positive for atypical BSE.” Atypical BSE is a rare form of the disease that appears to occur spontaneously. It is different from classical BSE, which is associated with the consumption of ruminant protein.

The US industry leapt into action to reassure markets and consumers that the beef and dairy in the American food supply is safe with US agriculture secretary Tom Vilsack saying that USDA remained confident in the health of US cattle.

When BSE was discovered in animal in 2003, it had a major impact on the US beef industry, as a number of countries banned imports of beef from the US, including Japan and Korea, which had been major US markets.

According to the US International Trade Commission, losses to the industry ranged from $US2.5 billion to $US3.1 billion annually from 2004 through 2007.

Although most markets slowly re-opened their borders, many still impose restrictions on US and Canadian beef. For example, Japan only allows imports of U.S. beef from cattle aged 20 months or less, but its Food Safety Commission is assessing the risk of easing the limit to 30 months.

So far, the response from other countries to the current case has been cautious. Only one country, Indonesia, has banned all US beef imports and, while two major South Korean retailers were reported to have suspended sales of US beef immediately following the announcement, at the time of writing one has since resumed sales.

 Published in Food NZ (June/July 2012).

Controversy over ‘pink slime’ in the US

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Photo: B+LNZ

A controversy blew up in the US in March and April about the use of lean finely textured beef (LFTB) – also pejoratively coined as ‘pink slime’ – in manufactured ground beef.

Lean, finely-textured beef (LFTB) is lean beef that is separated in a manufacturing process from fatty beef trimmings, to reduce wastage. The process involves treating the LFTB with small amounts of ammonium hydroxide gas or citric acid to eliminate any harmful bacteria present.

The process has been approved as safe by the United States Department of Agriculture and it has been reported that over 70 percent of ground beef used in the US is believed to have incorporated LFTB as an ingredient.

However, a range of media commentators, including ABC News and British celebrity chef Jamie Oliver, have criticised the practice. Despite statements by the USDA and meat industry bodies asserting that LFTB is safe for consumption, a number of major retailers and restaurant chains –  including McDonald’s and Burger King – have recently decided not to use LFTB, as a result of considerable negative publicity about the product.

As a result of the controversy, the major producer of LFTB, Beef Products Inc, announced that it is closing down three of its four processing plants. The American Meat Institute estimates that without LFTB, the industry would need 1.5 million additional head of cattle to make up the difference in beef supply.

LFTB is not used in New Zealand, as the leaner, pasture-raised New Zealand beef does not produce the high fat trimmings that provide the raw ingredient for LFTB, the MIA says.

Published in Food NZ (June/July 2012).