Week in Review

[04 March 2021]

This week dairy dominates the headlines in New Zealand with a 15% increase at the Global Dairy Trade auction (GDT), demand growth for liquid milk in China, and Fonterra’s sustainability payment confirmed.

Internationally we get some insight into the low/no alcohol trend, concerns of declines in global food security, and controversy over a recent Government exam in India claiming cows produce gold and have special powers. 

Growth, or risk... Which one?

This week Andrew Watene shares observations of technological advancements, financing models and China’s Central Bank’s digital currency (eCNY) with insight to possible implications for New Zealand exports

Read the full blog article here.

Spotlight Stories

Food Marketing Spotlight
tech

'Stormy Fruit' provides a ray of sunshine from Motueka hailstorm [28 February, Stuff]

Golden bay Fruit has launched its new “Stormy Fruit” brand, which features apples with cosmetic damages but with the same nutritional qualities. Chief executive Heath Wilkins said the new brand would improve food waste sustainability and educate consumers that “imperfect” fruit could still be high-quality. Most of the fruit (about 200-300 containers worth) will be exported overseas, and the first batch will head to Taiwan.

Tag: Food Marketing, Horticulture

Food Innovation Spotlight
spotlight 2

The meal ‘capsule’ made of unwanted veg aiming to disrupt the ready meal category [1 March, Food Navigator]

A start-up from Israel is developing a ‘capsule’ product that utilises lower class foods into convenient and healthy meals. Anat Natan, CEO and Co-founder of Anina, looked to fill a gap in the market by offering a nutritious product with more natural ingredients in the ready-to-cook sector. The start-up sources its vegetables from retailers who have discarded them due to aesthetic reasons but upcycles “ugly” produce to minimise food waste and reduce costs. According to Natan, the unique meal meets all the consumer’s needs of taste, heath, convenience and speed, and is ready to eat in eight minutes.

Tag: Food Innovation, International

This Week's Headlines

headline 1

Dairy prices skyrocket! [3 March, Rural News]

The Global Dairy Trade experienced its eighth consecutive price rise as the price index increased by 15% from the previous auction. Fonterra Co-operative Group uses whole milk powder prices as its primary indicator for milk pay-out and that category rose by 21% to US$4364/MT, a seven-year high. All dairy products in the auction with the exception of buttermilk powder had an increase in average price.

Tag: Dairy, Trade & Exports, Farmers & Producers

headline 2

Ministry puts its own numbers on sequestration [1 March, Farmers Weekly]

A new Ministry for the Environment report suggests that carbon sequestration on sheep and beef farms may be lower than recorded in a previous study commissioned by Beef and Lamb New Zealand, and is estimated at 33%. An earlier report by Auckland University of Technology estimated a sequestration of 63-118%. Chief executive Sam McIvor says “Even using a highly conservative approach, they’ve arrived at a figure of a 33% offset of on-farm emissions by vegetation, which shows farmers are well on the journey.”

Tag: Environment & Emissions, Policy and Regulation, Research & Development

headline3

Dairy business gets loan discount if hits environmental targets [1 March, Stuff]

BNZ are offering dairy investment company Southern Pastures special loan discounts if they meet their on-farm water and biodiversity targets. BNZ chief executive Angela Mentis said, “the bank would increasingly use lending linked to environmental targets with farmers, agribusiness and other sectors to meet the county's climate change obligations”. If successful, BNZ will roll out their $50 million sustainability-linked loans more widely.

Tag: Agribusiness, Environment & Emissions

Top stories

Fonterra to reward farmers for sustainable, high value milk [26 February, Stuff]

Fonterra Co-operative Group announced new incentives to reward farmers up to 10 cents per kg of milk solids depending on their sustainability credentials and milk quality, under the Cooperative Difference Programme. Starting from June, farmers could earn an extra 7c per kg of milk solids for meeting the environment targets, and a further 3c per kg of milk solids could be earned for excellence in milk quality.

Tag: Dairy, Farmers & Producers, Environment & Emissions

Ag takes off as a uni option [25 February, Rural News]

Massey University’s Head of the School of Agriculture & Environment Professor Paul Kenyon says people are starting to value the true strength of agriculture in the New Zealand economy as evidenced by the growing student numbers in Massey’s key degree courses, with numbers 20-30% higher than previous years. “We are encouraged that people are seeing employment opportunities in the greater agricultural space,” Mr Kenyon said. Massey University will promote its degree courses at CD field days.

Tag: Agribusiness education, Agribusiness

Tackling carbon emissions and drought with tech [25 February, iStart]

Australian company Goterra uses a combination of robots and live maggots to break down food waste into animal feed while also reducing carbon emissions associated with the food waste. The founder Olympia Yarger says Goterra can help its customers cut costs on food waste management while providing farmers with a cheaper animal feed option and also reducing their environmental impact. Goanna Ag, another Australian company, has launched GoRain and GoTank to help farmers monitor rainfall and make data-driven decisions regarding water usage.

Tag: International, Agri-technology, Environment & Emissions

MIA puts hand up for vaccine [25 February, Farmers Weekly]

Meat Industry Association (MIA) chief executive Sirma Karapeeva has been talking to Ministry of Health officials to prioritize its 25,000 meat-processing workers for the Covid-19 vaccine. “It is absolutely critical that we fortify our first line of defence, both for the safety and wellbeing of workers and communities and to safeguard the red meat sector’s significant contribution to the NZ economy, which is now heavily reliant on our export revenue,” she said.

Tag: Covid-19, Red Meat

 

Lasers target pesky birds [24 February, Farmers Weekly]

Timbo Deaker of consulting firm Viticultura in Otago advises that labour and costs should be reduced in vineyards, as there are labour shortages and high costs of bringing in Recognised Seasonal Employer staff this year. Deaker was prompted by an industry magazine to explore another method of deterring birds in vineyards by using special lasers to unsettle birds and disrupt with their flight path. The expensive nets currently being used require a substantial amount of time and people to set up.

Tag: Farming systems, Argitechnology, Horticulture

Comvita back in profit driven by US and China markets, dividends to resume [25 Feburary, NZ Herald]

Growth in the Chinese and North American market for honey has resulted in Manuka honey exporter Comvita returning to profit. Group chief executive David Banfield said, Comvita’s focus is on these growth markets as they have shown strong performances, delivering double-digit and bottom-line growth. The company’s net profit came to $3.5 million in the six months leading to December 2020 compared with a $12.97 million loss in the previous corresponding period.

Tag: Apiculture, Agribusiness, Trade & Exports

New flagship science facility spotlights positive outlook for Lincoln University [25 February, Voxy]

A new science facility is expected to promote growth for Lincoln University,  help the progression of the agritech industry and provide advancements in research and development. Acting Vice-Chancellor Professor Bruce McKenzie said, "Lincoln University has been producing primary sector graduates for more than 140 years, and we remain dedicated to equipping coming generations with the knowledge and skills needed to grow a better future.” The University states that the new facility will continue to help them shape a more productive and sustainable future for New Zealand.

Tag: Agribusiness Education, Research & Development, Agribusiness

Why banning pig farrowing crates is a backwards step [18 February, NZ Herald]

Despite the Government’s National Animal Welfare Advisory Committee conclusion that piglets and sows' welfare needs can be adequately met with farrowing crates, the use of mating stalls and farrowing crates are now unlawful and invalid. This new standard has come following High Court revision. Taranaki pig farmer Karl Stanley states that the Government decision to phase out these systems is frustrating, as he explains it is very effective and an excellent way to retain his healthy piglets and prevent them from crushing, and there is no effective alternative. The Government simultaneously allows the import of pork from countries that don’t meet the same animal welfare standards

Tag: Pork, Animal welfare, Policy and Regulation

A2 Milk shares dive after first half profit drops 35% on daigou disruption [25 February, NZ Herald]

The new chief executive of A2 Milk David Bortolussi, said that it had been a challenging first half, with revenue falling by 16%. Covid-19 has caused disruptions in the unofficial daigou trade into China which also impacted the cross-border e-commerce channels. Despite this, there was growth in Australia and the USA's liquid milk market, increasing sales. As a result A2 state thattheir balance sheet remains in a strong position with no debt and a comfortable cash position of $774.6 million.

Tag: Dairy, Agribusiness, Trade & Exports

Do India’s Cows Have Special Powers? Government Curriculum Is Ridiculed [22 February, The New York Times]

Prime Minister Narendra Modi’s Hindu nationalist government abruptly postponed the first exam based on a new curriculum about cows. Critics said that specious claims and substituted religion were used for science. The students read information about India’s cows having more emotions than foreign ones and that their humps have special powers – information about was not based on scientific knowledge but mythology.

Tag: International, Agribusiness Education

Bega Cheese, Fonterra dairy giant settle multinational court spat over peanut butter [25 February, ABC News]

Fonterra lost a legal battle to hinder Bega Cheese from using the Bega brand on a range of peanut butter and other well-known products. Fonterra was disappointed at the outcome but said it was pleased with the decision to retain the exclusive license for the Bega Cheese brand for cheese and butter. Fonterra said in a statement, "we are confident that we can work together with Bega... to continue to grow the value of the brand.”

Tag: Dairy, Policy and Regulation, Food Marketing

Natural pasture spray helps farmers reduce emissions and improve production [1 March, Stuff]

Scientist Nathan Balasingham has developed a pasture spray to make pastures more resistant to drought and pests, increase its nutritional value and reduce methane emissions from livestock. Balasingham has been trialling his Biozest spray for 10 years with arable and livestock farmers, following his initial testing on horticulture. Despite being ignored by farming lobby groups and Crown research institutes, many farmers state they have seen benefits with implementing the Biozest spray.

Tag: Research & Development, Environment & Emissions, Farming Systems

Learning allows young employees to grow [26 February 2021]

A panel of young people currently working in the food and fibre sector recently met to discuss ways to retain emerging talent and develop it in the future, as the sector will need 50,000 workers by 2030. According to the panellists, a sense of ownership and responsibility creates more productive and effective workers. Fun and connection within the workplace are also essential for their job satisfaction.

Tag: Agribusiness Education

Beef + Lamb Young Ambassador Chef finalists announced [25 February, Rural News]

Three young chefs (out of 16 other contenders) have been announced by Beef + Lamb New Zealand (BLNZ) as finalists for their upcoming Young Ambassador Chef competition. BLNZ’s foodservice manager Lisa Moloney said “their creativity and the attention to detail they all put into their dishes was very impressive and I know New Zealand sheep and beef farmers would be very proud to see their produce showcased so well by the next generation of chefs.”

Tag: Food Marketing

Kiwfruit pickers and packers to be paid living wage [2 March, Stuff]

The effects of Covid-19 means the kiwifruit industry needs to fill a 23,000 worker shortage and keep up with the harvest, exceeding 157 million trays of green and gold fruit, New Zealand Kiwifruit Growers chief executive Nikki Johnson said. Almost all packhouses told Kiwifruit Growers that they would be expecting to pay more than the living wage of $22.10 an hour in hopes of attracting more workers.

Tag: Horticulture

Spain: 895 cows cattle to be killed after two months at sea [2 March, Stuff]

Animal rights groups are speaking out against the exporting of livestock as nearly 900 cattle have been denied disembarkation at a Turkish port and will now be euthanised. Despite leaving Spain with proper health authorisations, the cattle developed health issues from the two-month sail from Cartagena's Spanish port to Turkey, before having to return based on biosecurity concerns. Following an official inspection by government veterinarians, Spain’s minister of agriculture said the animals were to be euthanised as they are unfit to either transport to another country or return to Spain.

Tag: Animal Welfare, Trade & Exports, Policy and Regulation

Food security in decline [1 March, Farmers Weekly]

The ninth annual Global Food Security Index (GFSI) released by the Economist Intelligence Unit (EIU) shows the significant global warming effect on agricultural and food systems and the decline in agricultural production. Countries like Australia, Norway and Sweden already demonstrate risks with agriculture and food production. Corteva Agriscience chief executive James Collins Jr. says, “with food security declining again, we all must heed the urgent call to renew our collective commitment to innovation and collaboration.” 

Tag: Food Security, International

Fonterra's Chinese New Year boost [2 March, Rural News]

China’s optimistic control on Covid-19 this year helped Fonterra Co-operative Group record double-digit growth in its consumer brand sales. The co-operative’s chief executive of Greater China, Teh-han Chow, said “some of Fonterra’s ingredients customers, who get products from New Zealand, Chinese New Year sales can make up a quarter of their full-year sales.” Milk and cream cheese were popular gifts and other popular products with Fonterra ingredients included tea macchiato (tea with a dash of cream cheese) and cheese lollipop.

Tag: Dairy, Food Marketing, Trade & Exports

FY2020 comes up apples for T&G Global in tough Covid-19 climate [1 March, NZ Herald]

Despite international lockdowns and enforcement of strict importing and exporting regulations, T&G Global’s apple business has seen high demand in several international supermarkets, which improved its financial position in 2020. T&G global delivered a total net profit after tax of $16.6m, up from $6.6m in 2019. This increase in apple crop, exported to markets in North America, Asia and Europe, helped offset a reduction in packhouse throughput and increased supply chain costs due to Covid-19.

Tag: Horticulture, Trade & Exports

Covid-19: Food banks brace for 'flood' of demand in Auckland's fourth lockdown [2 March, Stuff]

The latest Covid-19 lockdown has increased demand on local food banks in Auckland. The release of a post on the Buttabean Motivation food bank page attracted 200 people applying for food parcels within an hour. According to Auckland City Missioner Chris Farrelly, demand for food parcels doubled and is expected to rise throughout the week. Optimistically, people seem to be less panicked compared to the first lockdown despite the high demand.

Tag: Food security, Covid-19

China's growing thirst for liquid milk [2 March, Rural News]

According to Rabobank senior dairy analyst Michael Harvey, opportunities arise for dairy producers as Chinese consumption of liquid milk increased strongly in 2020 and is set to continue growing over the next decade. Attracted by its health and wellness benefits, China hit a record of more than 100,000 tonnes of liquid milk imported into the country in September alone last year. New Zealand increased its liquid milk exports to China by 9%, while Australian volumes remained flat.

Tag: Dairy, Trade & Exports, Farmers & Producers

 

Honey optimism a 'red herring', say Wairarapa beekeepers [2 March, NZ Herald]

Despite the increase in honey export revenue in previous years, South Wairarapa manuka honey producer Stu Ferguson said production has slowed down and is falling below production costs. He said that people have stopped extracting lower-grade honey (e.g. clover) as it sold at a much lower price-level. According to the Ministry for Primary Industries' 2020 Apiculture Monitoring Report, the average honey prices paid to New Zealand beekeepers in 2019 and 2020 decreased for most honey types, apart from Monofloral manuka honey.

Tag: Apiculture, Farming Systems

Supermarket giant Countdown hit by spinach shortage [3 March, NZ Herald]

In South Dunedin, there has been a shortage of spinach leaves and other bagged salads due to a higher demand than expected, heavy rain across New Zealand and a rare error in the weekly delivery. Foodstuffs New Zealand head of corporate affairs Antoinette Laird said the shortage of bagged salads was due to a "perfect storm" of supply issues. The Countdown produce manager is working closely with their supply partners to get their stock back to normal by the weekend.

Tag: Food Security, Food Marketing

No and low alcohol drinks projected to increase 31% by 2024 [25 February, Food Navigator]

As consumers are more mindful of what they consume, the growth of the global no/low alcohol market is expected to increase, according to the WSR’s No-and-Low-Alcohol Strategic 2021 Study. The study focused on ten countries representing 75% of the global no and low alcohol consumption, and they discovered an 8% decrease in average international alcohol in 2020.

Tag: International, Health and Wellbeing, Food Marketing

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
Angelo Marundan
+64 9363 3624
amarundan@kpmg.co.nz