Full cup, steady hand

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.

Watching water stewardship

With current consumer trends and international focus on the environmental there is an ever-growing range of requirements facing business and local government. These can focus on tangible things like water and carbon as well as less tangible things like corporate and social responsibility and sustainability, writes sustainability consultant Kevin O’Grady.

In the case of water, there is a worldwide recognition that this will be the next area in which standards will be developed. The development of world standards for water stewardship is likely to form in two ways, concurrently:

  1. As Government policy leading to legislation which must be followed. This legislation may be influenced by bi-lateral or multi-lateral issues in the same way as the development of carbon emission reduction has been influenced by the Kyoto protocol. As the carbon experience shows, dealing with global issues through domestic legislation is fraught with difficulty.
  2. As market-driven standards that are widely accepted by environmental and social stakeholders and promoted water stewardship to consumers via the retailer and other trade ‘gatekeepers’. These standards are typically not constrained by regulatory minima or international trade protocols like the World Trade Organisation (WTO). The Forest Stewardship Council (FSC), the Marine Stewardship Council, Rainforest Alliance and Fair Trade are leading examples of high-end schemes.  These are typically part of the ISEAL Alliance.

Currently, there is a very early draft of a new International Water Stewardship Standard developed by the Alliance for Water Stewardship (AWS) that indicates the focus of water stewardship may be on managing whole of catchment impacts.

Around the world, individual sectors and regions are pondering what an eventual standard will look like for them.

In Australia, Water Stewardship Australia (WSA) has developed a regional standard that aims to be consistent with the AWS approach, but regionally relevant. The risk of not doing so is that another region may move ahead of the game and others will have to adopt a standard not suited to their region.

For example, the European Water Partnership (EWP), although an AWS member, has a programme of developing what they call ‘sectoral tools’ which will be highly Eurocentric.  They describe their aims, as follows:

  • The EWP harnesses European capacity, helps to coordinate initiatives and activities in international water issues and undertakes worldwide promotion of European expertise related to water.
  • The ultimate goal of the EWP is to elaborate strategies and implement concrete actions to achieve the objectives of the Water Vision for Europe.

In the case of the New Zealand meat industry, it may be of interest to note that Ingham Chickens in Australia have worked on an approach to meet the emerging standards.  Also, that large retail players like Marks and Spencer are actively looking at water stewardship for their suppliers (see Hepworth N, Agol D, Von-Lehr S and O’Grady K, 2011. AWS Kenya case-study technical report: Exploring the value of water stewardship standards in Africa. Alliance for Water Stewardship, funded by Marks and Spencer and GIZ amongst others).

For more information contact Kevin O’Grady who was involved as a consultant in the Ingham’s trial but has also worked with approaches to meet the emerging standards for irrigation, cotton growing, dairy farming, flower growing (Kenya), wine growing (Chile).

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International biotechnology conference hosted in Rotorua in September

The world’s agricultural biotechnology leaders are heading to Rotorua  in September to gather for ABIC, the world’s top agbiotech conference, hosted by New Zealand’s biotechnology industry organisation NZBIO with support from its Australian counterpart AusBiotech.

With up to 400 internationally represented delegates and 60 experts expected to attend, including a large delegation from the Asia-Pacific region, the United States and the UK, this is  an opportunity to meet the key players involved in technologies that will fast track the development of affordable bio-based products including bio-fuels.

With the global industrial biotechnology industry set to grow by more than 400 per cent over the next five years, ABIC 2012 organisers say the industry’s potential to revolutionise sectors such as energy and consumer products will be an important topic in Rotorua.

“In those areas, there is a huge flowering of research and business uniting organisations ranging from chemical companies to agbiotech firms and energy providers,” says Elspeth MacRae, general manager manufacturing and bioproducts at crown research institute Scion and a member of the ABIC programme committee.

Among the international leaders confirmed to attend the agricultural biotechnology event is Dr Gunter Festel, the founder of Swiss-based investment firm Festel Capital, which is putting considerable capital into bio-energy projects. Also attending, is Michael Christiansen who heads the China arm of Novozymes, producer of a wide range of bio-solutions, including enzymes suitable for bio-fuel production. Additionally, United States energy crop producer Ceres is sending its chief scientific officer, Dr Richard Flavell.

UK Trade & Investment (UKTI) wants to talk to NZ companies who are seeking collaborations with UK agricultural biotechnology organisations and are interested in investing in Britain.

This is the twelfth ABIC conference.

More information about ABIC can be found at http://www.abic2012.com/ or contact Paul Tuckley, UKTI trade development manager by email [email protected] or phone 09 303 5017, mobile 021 337778.

New blueprint for sustainable beef production

A new blueprint that potentially could be used for sustainable beef production in New Zealand has recently been brought into reality in Brazil and is being trialled in tropical northern Australia. However, its usefulness in temperate zones as a sole certification stamp is being questioned by one sustainability expert.

A group of four cattle ranches in Brazil, Fazenda São Marcelo Ltda, has just been announced as the first to earn Rainforest Alliance certification under a new standard – Standard for Sustainable Cattle Production Systems – developed and first published in July 2010 by the Sustainable Agriculture Network (SAN).

The ranches all met a rigorous set of standards that promote the humane treatment of livestock, the conservation of natural resources and the rights and well-being of workers. The standards were developed by SAN in response to the vast destruction of rainforest that results from cattle farming. IMAFLORA – the SAN representative in Brazil – carried out the certification.

According to Amaldo Eljinsk, chief executive of Grupo JD which manages the enterprise, the standards support the company’s values and management approach, helping it add value to its products, stay ahead of trends and attract buyers.

IMAFLORA is promoting the cattle certification programme in Brazil through its work with other local non-governmental organisations (NGOs, including Amigos da Terra), government agencies and international NGOs (including the National Wildlife Federation).

The current standard covers a summary of the principle of an integrated cattle management system, sustainable range and pasture management, animal welfare, reducing the carbon footprint and additional environmental requirements.

Input from sustainable standards expert Kevin O’Grady of Pinnacle Consulting, in the early stages of the standard, enabled the change of rules to allow the use of natural hormone replacement and de-horning. Since that time, O’Grady, who previously worked in the New Zealand meat industry, has been involved with the development of the standard and its trials in Northern Australia. He has been looking at the feasibility of extending it into temperate regions such as other parts of Australia and New Zealand.

“The way Rainforest Alliance works is that specific clients, such as McDonald’s in the specific case of South America, adopt the standard and suppliers then have to follow it,” he explains.

However, it would take a lot to adapt the standard for temperate zones and some of the issues for tropical farming , like tree cover and protecting livestock from predators, are not relevant, he says.

O’Grady also questions the advantage of this sort of standard for the New Zealand meat industry. “Many customers’ suppliers and investors are looking to independent certification to mitigate reputational risk so it’s not just about meeting a certification requirement for a customer like MacDonald’s.”

Want to find out more? Contact Kevin O’Grady.

 

 

Big Food attack

We’re keeping an eye on a series of debate-provoking articles appearing in PLoS Medicine, an international open access medical journal on the topic of ‘Big Food’ – essentially the power of big multinational food and beverage companies.

Several articles commissioned by the magazine are scheduled to appear over the next three weeks. The first, entitled Big Food, Food Systems and Global Health and written by series guest editors David Stuckler of Cambridge University and Marion Nestle of New York University, asks ‘Who rules global food systems?’

“By and large it’s Big Food, by which we refer to multinational food and beverage companies with huge and concentrated market power,” they answer, describing the international public health response so far to Big Food as a “failure to act.”

Another article draws parallels between the public relations efforts of some soda drink companies and those used by tobacco product manufacturers, highlighting several ‘Corporate Social Responsibility’ (CSR) campaigns that distract from their products’ health risks.

Stuckler and Nestle’s article focuses on the spread of energy-dense, nutrient poor (EDNP) foods around the globe to which several New Zealand experts have responded.

Get the food industry out of policy making

Dr Gabrielle Jenkin of the Department of Public Health, University of Otago Wellington agrees with the papers and is highlighting key areas where there needs to be urgent action here in New Zealand. This includes the introduction of traffic light labelling on the front of food, getting junk food out of schools, banning junk food marketing to children at least (including sponsorship of sport) and the regulation of food composition (fat, salt and sugar and, where possible, regulate portion sizes).

She also calls to “Get the food industry out of policy making,” adding that health policy is a conflict of interest for much of the food industry.

“We also have the food industry co-opting nutrition experts and commissioning their own research (some of this was presented to the Health Select Committee Inquiry into obesity).”

By framing the issue as ‘unhealthy food’ (EDNP foods), rather than ‘obesity’ you avoid “stigmatising the impact of the obesity frame and its individualising implications. This turns the focus to the real problem … the food industry,” she says.

Develop supportive policy environments

The opposition shown by some food manufacturers to the traffic light-labelling scheme is reminiscent of tobacco manufacturers’ opposition to health warnings and plain packaging, says Professor Janet Hoek of the University of Otago’s Department of Marketing.

“We should develop supportive policy environments that restrain the more rampant marketing activities known to influence people’s choices and, at the same time, introduce measures that help consumers make better food choices. We need first to change the food marketing environment so healthy eating (or unhealthy food avoidance) campaigns can have more effect.

“As Stuckler and Nestle point out in their essay, food manufacturers have a goal of maximising the profit they deliver to their shareholders, so it is unrealistic to expect them to be accountable for public health goals as well as profit goals. The best option is for governments to show leadership, drawn on the available research evidence, restrain the marketing that can be undertaken and provide consumers with information they can actually see and use.”

 

David Bayvel moves to WSPA

A familiar face in New Zealand animal welfare is taking on a new international role.

As of 1 July, Dr David Bayvel QSO – who recently retired as director of animal welfare for MAF – will join the World Society for the Protection of Animals (WSPA) as Chief Veterinary Adviser. His newly created part-time role will be replacing the role held by Dr David Wilkins from 2004-2012.

In his new role, Bayvel will help to ensure that WSPA is working at the heart of the veterinary profession around the world to support and advance animal welfare. This will include working with the World Organisation for Animal Health (OIE) on the drafting of standards to ensure the implementaton of international standards and laws to protect the welfare of animals, says WSPA. He will also advise on WSPA’s programmes supporting the education of veterinarians through specially designed animal welfare training modules.

A renowned expert in the fields of animal welfare and veterinary science, Bayvel’s career has taken him around the world in the past four decades, including posts in private and public sector organisations and veterinary practice promoting ethical care and treatment of animals. He recently retired from the position of director of animal welfare for New Zealand MAF. He chaired the OIE ad hoc export group meeting on animal welfare and chaired the permanent OIE Animal Welfare working group from 2002-2012. He will now move to represent the International Coalition for Animal Welfare on this important OIE group.

Bayvel says he’s honoured to join WSPA. “I have long admired WSPA’s measured approach to animal welfare and its commitment to improving the conditions for animals around the world. WSPA has a proven track record on the world stage of forging collaborations with other key international NGOs and governments to have a lasting positive impact for animals and their communities.”

Dr Wilkins is to continue his involvement with WSPA, working on several special projects.

Canada joins TPP

Canada is also joining the Trans Pacific Partnership (TPP) negotiations.

The move, announced by New Zealand Minister of Trade Tim Groser today and following the news that Mexico was to join the negotiations earlier this week,  “demonstrates how dynamic this consultation process is,” the Minister says.

“Our vision for the TPP has always been to create a high-quality and comprehensive trade agreement which over time will act as a platform for wider Asia-Pacific trade liberalisation and economic integration.”

It shows that progress is being made in building an open and inclusive agreement, says the NZUS Council.

“Canada’s decision to join the TPP negotiations following Mexico’s announcement  is further proof that TPP is open to new members who believe they can meet the high standards set by the agreement,” says NZUS Council executive director Stephen Jacobi.

“Canada is a major global economy and a long-standing friend of New Zealand.  A successful outcome to the TPP negotiations will allow the economic relationship between New Zealand and Canada to reach a new level”.

New Zealand exports to Canada in 2011 were worth $597.4 million and it was our 19th largest export market. The top exports were sheep meat, beef and wine.

Jacobi foresees tough negotiations ahead on market access for agricultural products given that Canada maintains tight restrictions on supply managed industries including dairy and poultry.

“The NZUS Council’s submission to the New Zealand Government last year made clear that we considered Canada’s supply management policies incompatible with the vision of TPP as a comprehensive, high quality and ambitious agreement.  These differences will now need to be resolved at the negotiating table”.

Jacobi noted that Japan was continuing to follow the TPP process closely.

“We look forward to Japan joining the negotiations once the Japanese Government is  confident it can meet the high ambition of TPP and consultations are complete,” said Mr Jacobi.

Like the process for Mexico, the next step with regard to Canada joining the negotiations would be for the nine current TPP participants to complete any applicable domestic legal procedures. Following this, Canada would formally join the negotiations as a new participant.

Mexico joins TPP

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.