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Week in Review

[18 February 2021]

As New Zealand heads out of its snap lock-down, we receive a rapid reminder of the need for resilience and adaptability in uncertain times. Several stories over the past week also highlight this requirement, with an anticipated overhaul of the Resource Management Act, trade restrictions in seafood and price fluctuations from potatoes to carbon all impacting the sector.

 

A Perspective on Corporate Reporting in New Zealand

This week Ian Jameson, an Associate Director in KPMG’s Impact Assurance team shares an insightful article on New Zealand’s reporting and corporate communications landscape, highlighting the issues that can come with a No.8 wire mentality, but opportunities to turn a ‘compliance’ process into a value proposition.

Read the full blog article here.

Spotlight Stories

Farming systems spotlight
tech

New Zealand's largest solar farm proposed for top of country [14 February, Stuff]

Solar installing company Far North Solar Farm plans to build a ‘massive’ 12ha solar panel farm at Pukenui, top of Northland. The company has applied for resource consent for the 16-megawatt solar farm, which would be enough to power 2750 homes and it will become the largest of its kind in New Zealand.

Tag: Farming Systems, Environment & Emissions   

Food Marketing spotlight
spotlight 2

The True Honey Company hits jackpot in London [11 February, NZ Herald]

Tararua-based The True Honey Company has sold the world's most expensive honey at Harrods in London. The honey has a UMF33 rating, sold at a record price of $4964 for a 230g jar. Harrods bought all of the 200 jars of this honey and they are in high demand. The company’s owner and founder Jim McMillan says "to achieve something of that standard is something the company is very proud about".

Tag: Apiculture, Food Marketing, Food Innovation

This Week's Headlines

headline 1

7 European countries team up to propel Nutri-Score rollout [12 February, Food Navigator]

Nutri-Score is a Translational Coordination Mechanism promoting front-of-pack nutrition label that has been set up in Europe with 7 countries pledged to support it. Nutri-Score ranks food from the ‘healthiest’ with a -15 score to the ‘less healthy’ with a +50 score, and grades the product with a corresponding code from dark green (A) to dark red (F).

Tag: International, Food Marketing    

headline 2

Arla eyeing $1b online sales [11 February, Rural News]

Arla (European cooperative) proves that e-commerce is on the rise especially during the global pandemic. With opportunities arising with its online presence, Arla is forecasted to double its sales and reach over NZ$1 billion across Europe. The farmer-owned cooperative is accelerating its existing e-commerce plans and employing experts in e-commerce across the sales and marketing organisation in the UK, Denmark, Sweden, Germany, the Netherlands and Finland to meet its growing demand. 

Tag: International, Dairy, Food Marketing

headline3

OANZ receives MPI funding for organic sector strategy [12 February, Rural News]

Organics Aotearoa New Zealand (OANZ) has received $212,500 from the Ministry for Primary Industries’ (MPI) Sustainable Food & Fibre Futures fund to develop a three-year organic sector strategy. “The strategy will look at how the organic sector can, on one hand, increase consumer demand, and on the other increase the share of organic produce, products and supporting the organic sector ecosystem that makes up the economy,” says OANZ chief executive Viv Williams.

Tag: Policy and regulation, Farming Systems

Top stories

Allbirds, Icebreaker team up to support climate-friendly regenerative wool [12 February, Stuff]

Merino clothing companies Allbirds, Icebreaker and US apparel company Smartwool are jointly promoting climate-friendly wool by sourcing a 100% regenerative merino from New Zealand Merino Company’s ZQRX platform. All 167 merino growers involved in this platform use regenerative farming, which prioritises building resilience through diversity and soil health through practices such as the use of cover crops, no-tillage and ditching biocides and fertilisers.

Tag: Wool, Innovation

Just 54 people have signed up for government's scheme to address fruit-picking labour shortage [11 February, Stuff]

Aimed at addressing labour shortages in the horticulture and wine-growing industries, the New Zealand Seasonal Work Scheme was announced in late November that offered up to $200 a week for accommodation costs and a $1000 incentive payment for workers who worked six weeks or longer. The Ministry for Social Development and Employment said the total cost of the scheme by the end of January was $12,869 and it helped 54 people start working.

Tag: Policy and regulation, Horticulture

Closed borders at Chinese New Year sparks surge in demand for blue cod [10 February, Stuff]

Whole blue cod sales are estimated to lift by 40% compared to the previous Chinese New Year, reaching up to 4 tonnes in volume, according to Foodstuffs North Island seafood operations manager Brett Sellers. Eating whole fish at new year is a culinary tradition for many Chinese immigrants and second-generation NZ Chinese, as it is a way of wishing abundance and surplus every year with the Chinese saying “Nian nian you yu”.

Tag: Fisheries

Meat prices trimmed for Pamu [11 February, Farmers Weekly]

State-owned farming company Pamu declared its earnings before interest, tax, depreciation, amortisation and revaluations (Ebitdar) of $14m for the six months to 31 December 2020, down from $22m in the previous period. The decrease was attributed to lower market prices for the company’s red meat products, said the chief executive Steven Carden.

Tag: Red meat, Farmers & Producers

Irish dairy farmers mull buy-back [11 February, Farmers Weekly]

Dairy farmers in County Kerry, Ireland, are considering a 60% controlling stake buy-back of the milk processing assets of the multinational Kerry Group. Currently a holding company with 12% of shares in the group, Kerry Co-operative has been offered a joint venture in three dairy processing plants, an animal feeds business and some dairy brands. Kerry PLC’s revenue was €7.2b in 2019 and its trading profit €900m, while 2020 results are due out in a few days.

Tag: International, Dairy

Carbon price rise could inflate log exports [11 February, Farmers Weekly]

Log exports could be affected by forest owners delaying harvest to take advantage of the appreciating carbon price, inflating log export prices. Representing carbon dioxide emission, NZ Units (NZU) are traded in the Emissions Trading Scheme (ETS) market. Given the price rose from $35/NZU in early December to $38/NZU in mid-January, AgriHQ analyst Sarah Friel expects the carbon price could reach $41.90/NZU within three years.

Tag: Forestry, Environment & Emissions

Velvet coalition targets China [11 February, Farmers Weekly]

CK Import Export, PGG Wrightson and Provelc have formed a marketing-only coalition to promote New Zealand velvet as a health food ingredient targeting China. The three companies will work together to get the critical mass needed for the development of velvet market in China, and they will continue to compete for sales and farmer supply in all other respects complying with NZ competition law.

Tag: Deer, Food Innovation

Potato exports plummet in December amid dumping claims [11 February, NZ Herald]

New figures show New Zealand's potato exports to some key markets have plummeted in December, with sales dropped by 77% to the Philippines and by nearly 50% to Australia, New Zealand's largest customer. Potatoes New Zealand chief executive Chris Claridge believes it was affected by European producers dumping frozen fries into global markets as well as the effects of Covid-19 on hospitality sectors.

Tag: Horticulture, Trade & Exports

Officials trying to clear up China's seafood concerns after ban on two companies [10 February, RNZ]

Trade officials are working to clear the concerns over Covid-19 hygiene and food safety after China suspended imports from two New Zealand seafood processing facilities - a Sanford mussel plant in Havelock and a Sealord facility in Nelson. Former trade commissioner Pat English said a possible factor behind the move could be that China views New Zealand's Covid-19 management systems as being lax due to a lack of community transmission.

Tag: Fisheries, Trade & Exports

My Food Bag heading to the stock market [11 February, RNZ]

Meal kit delivery service My Food Bag has confirmed plans to offer shares to both New Zealand and Australia investors in March. A product disclosure statement has been filed, explaining its offer of 185 million shares at $1.85 each valuing the business at $449m. The new funds would be used to pay down debt and fund further investment, according to the company’s board chair Tony Carter.

Tag: Food Marketing  

Pressure mounts on Fonterra to 'bite the bullet' and quit coal [12 February, Stuff]

Fonterra Co-operative Group is being urged to ditch the fossil fuel at its Darfield plant as its Canterbury coal supplier announced the closure of its 52-hectare mine in the Malvern Hills. Fonterra chief executive Russell Middleton blamed the “onerous, regulatory burden” of meeting the Resource Management Act for the closure, with “the timeframes and cost of regulatory processes outweighing commercial returns”.

Tag: Dairy, Environment & Emissions           

Business forum backs trade deal [15 February, Farmers Weekly]

The New Zealand International Business Forum (NZIBF), made up of senior business leaders, wrote to the government hoping the Regional Comprehensive Economic Partnership (RCEP) to be ratified and implemented soon, as it would help NZ’s economic recovery from Covid-19 and send a valuable signal about the ongoing importance of trade liberalisation to the global community.

Tag: Trade & Exports, Policy and regulation  

Sector faces rising input prices [12 February, Farmers Weekly]

Prices for key farm inputs are rising for different reasons. Driven by demand for steel from China, raw iron ore prices rose 40% in December. Disruptions on logistical issues put pressure on the prices of machinery imports and our product exports, creating challenges on the supply chain and cashflow for importers and retailers. The price of fence posts rose by up to 7%, doubling the usual annual price rise.

Tag: Farmers & Producers, Farming Systems, Trade & Exports

A nation of meat-eaters: How Kiwis swapped lamb for chicken [14 February, Stuff]

An OECD report from 2018 claims New Zealand is in the top 10 meat-eating countries per capita, but figures from 2019 show Kiwis consume 11.6kg of beef and veal per capita each year, less than the OECD average of 14.5kg. Beef and Lamb NZ data shows domestic consumption of the red meat fell by 31% between 2006-7 and 2016-17. 

Tag: Red meat, Food Marketing

 

The Resource Management Act is being binned and why that is a big deal [10 February, Stuff]

Environment Minister David Parker has announced to replace and repeal the Resource Management Act (RMA), which was aimed to set the balance between our economic ambitions and environmental limits. Environmental Defence Society chair Gary Taylor discussed why RMA had failed due to attainability limits and governance difficulties. The RMA is now being reworked into three different parts.

Tag: Policy and regulation

Proprietary seed sales are growing [12 February, Farmers Weekly]

Figures from the Plant Breeding & Research Association (PBRA) show a record sales of  branded proprietary pasture seed, with more than 10,700 tonnes sold to farmers last year, up 21% from five years ago. PBRA president David Green says with the built-in technological advances to increase performance, proprietary seeds are increasingly recognised by farmers as an investment in their land.

Tag: Arable, Farming Systems, Research & Development

Govt forks out $40m to settle Psa compo case [13 February, Rural News]

The government and some kiwifruit industry players have reached a $40 million out-of-court settlement over the compensation case relating to the vine disease Psa. The plaintiffs include Strathboss Kiwifruit Limited, representing a group of kiwifruit growers, and a post-harvest operator Seeka Limited. In 2014, the plaintiffs filed against the Crown for what they alleged was actionable negligence in allowing Psa into the country.

Tag: Horticulture, Policy and regulation

A new leaf: Getting to the heart of better yields [14 February, NZ Herald]

New research has found an opportunity to improve plant carbon dioxide uptake and could help increase the yield of important food crops such as cowpea, soybean and cassava. "Our data highlights promising targets to improve the diffusion of CO2 through the leaf with the aim of boosting crop productivity," lead author Dr Tory Clarke said. The researchers said the results linked the anatomical structures inside the leaves with important physiological crop aspects, which would help to create more precise leap and crop models to find out what is influencing CO2 uptake into leaf cells.

Tag: Research & Development, Horticulture

JBS doubles down on deforestation as Greenpeace denounces ‘five more years of inaction'  [12 February, Food Navigator]

A Greenpeace International report has accused the world’s biggest meat producer JBS of indirectly sourcing cattle from unscrupulous Brazilian farmers who had illegally started fires to clear large areas of land. JBL has stated it is confident to achieve plans of monitoring its entire supply chain by 2025. The dispute over the deforestation issue illustrates the challenge faced by big businesses in identifying malpractice in their deep and complex supply chains.

Tag: International, Environment & Emissions, Policy and regulation

Report reveals ‘hidden cost’ of salmon farming [11 February, Food Navigator]

According to an international report, salmon farming is incurring great costs for the environment, society and ecosystem. These costs have totalled more than US$50 billion (since 2013), with more than half falling to producers (US$28billion) and the rest being passed on to society (US$19 billion) in Norway, Scotland, Canada and Chile. Salmon mortality rates are exponential due to factors such as poor husbandry and parasites. Thus, it was recommended by Just Economics that Salmon producers take a long-term view to address the risk and transition towards alternative feeds and farming practices.

Tag: International, Aquaculture, Fisheries, Policy and regulation

Mondelez launches program for early-stage snack brands [11 February, Food dive]

Mondelez, known for its iconic brands such as Oreo, Ritz and Triscuit, launched a new start-up engagement program for early-stage well-being snack brands. The program allows growth and investment opportunities to 10 start-ups as they are given the resources needed to advance their start-up and excel. This program enables Mondelez to have a strong portfolio through its acquisitions and by launching or making minority investments in start-up brands.

Tag: International, Food Innovation

Acute malnutrition threatens half of children under five in Yemen in 2021: UN [11 February, Unicef]

Four United Nations agencies alerted that approximately 2.3 million children under the age of five in Yemen are projected to suffer from acute malnutrition in 2021. A long history of armed conflict and economic decline, and recently the global pandemic, results in many families having to sacrifice the quantity and quality of their food. Due to COVID-19, the humanitarian response remains critically underfunded as they received US1.9 billion of the US$3.4 billion required.

Tag: International, Food security

'Dairy leading the charge' as milk powder price jumps again [17 February, Stuff]

The rising Chinese economy and Southeast Asian growth reflects an increase in prices for dairy products. Dairy products such as whole milk powder, butter and cheddar displayed a price increase at the most recent auction by 4.3%, 2% and 2.4%, respectively. According to ANZ economist Susan Kilsby, the bank had anticipated a 0.5 per cent lift which reflected China’s growing demand and steady supply from New Zealand.

Tag: Dairy, Trade & Exports  

DairyNZ sets the record straight [11 February, Rural News]

The recent Climate Change Commission (CCC) report outlines a roadmap for how New Zealand will achieve the target of net zero emissions by 2050. DairyNZ has released several media statements and is launching a public information programme to combat ‘myths’ being spread about the report – particularly related to a speculated target of reducing stock numbers.

Tag: Dairy, Environment & Emissions, Farming Systems     

Get in touch

 
Audit – Auckland
Ian Proudfoot
09 367 5882
iproudfoot@kpmg.co.nz
Management Consulting – Wellington
Justine Fitzmaurice
04 816 4845
jfitzmaurice@kpmg.co.nz
Agri-Food – Auckland
Jack Keeys

09 363 3502
jkeeys@kpmg.co.nz
Private Enterprise – Hamilton
Hamish McDonald 

07 858 6519
hamishmcdonald@kpmg.co.nz
Agri-Food – Auckland
Andrew Watene

09 367 5969
awatene@kpmg.co.nz
Consultant – South Island
Genevieve Steven

03 307 0761
gsteven@kpmg.co.nz

Farm Enterprise – South Island
Brent Love

03 683 1871
blove@kpmg.co.nz

Field Notes administrator
Nina Guan
+64 9363 3624
ninaguan@kpmg.co.nz

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