Field Notes - issue 569

[05 August 2021]

This week in New Zealand we see some positive stories from the support sector with FMG and Ballance posting record profits and rebates respectively. While dairy prices have had another fall, optimism in a strong season price still remains, and red meat June numbers show an almost $1b export value. 

Internationally, food security concerns are still high with more concerns especially for most at-risk countries susceptible to Covid-19 and climate change. We also hear about the launch of Ireland's food ambitions as they outline a road map for the future. 

This week Jack Keeys features in a mini Vodcast that challenges New Zealand's sector to explore under-apreciated emerging global export markets, along with insights for achieving a premium in some of these markets. The vodcast also features an Agribusiness Agenda contributor from Africa. 

To read previous editions of Field Notes please click here.

Milk price down but not out [02 August, Farmer Weekly]

A seventh consecutive fall in dairy prices of 2.9% has resulted in NZX and ASB revisiting their new season’s forecasts but it is reportedly nothing to worry about just yet. The drop in dairy prices was said to be due to the milking season just beginning and it would be more concerning to see the trend remain over spring and into peak milk season. Additionally, covid played a factor as the wave of delta variant infections around the world hit commodity markets prior to the auction. NZX dropped their forecast by 12 cents to NZ$7.69/kg and ASB dropped theirs from NZ$8.20 to $7.90/kg MS.

Tag: Dairy, Trade & Exports, Farmers & Producers

Launch of “Food Vision 2030 - A World Leader in Sustainable Food Systems” [03 August, Gov.ie]

Ireland’s new pioneering strategy for their food and drinks sector “Food Vision 2030 – A World Leader in Sustainable Food Systems” has been launched after Government approval. Its vision is for Ireland to become a world leader in sustainable food systems over the next decade, delivering benefits for the sector, Irish society and the environment. Minister of State for Agriculture Pippa Hackett said “as well as committing to become climate neutral by 2050, Food Vision 2030 is also about restoring and enhancing biodiversity; improving water quality; and developing diverse, multi-functional forests.”

Tag: International

Foodstuffs’ Covid FY21 results – how much money did it make? [02 August, Foodticker]

Foodstuffs Group newly released post-covid FY21 results show a 5% increase in revenue from last year, reaching NZ$7.4 billion, as well as an increase in gross profit from NZ$802 million to NZ$773m. “The key driver for the rise remains the expansion in goods supplied to members via the Foodstuffs South Island Distribution Centres, especially increased chilled and frozen products as we strive to optimise our capital investment,” FSSI chair Russell McKenzie said. Furthermore, operating profit decreased by NZ$13.2m to NZ$205.3m as FSNI chair Dean Waddell explained the drop was caused mainly by additional Covid-19-related costs.

Tag: Food Marketing, Covid-19

Ethical dairy company attracts over 450 investments - Happy Cow Milk [02 August, Voxy]

Happy Herd Milk Company, trading as Happy Cow Milk, aims to increase their number of Kiwi investors and currently have over 450 investments pledged to its equity crowdfunding campaign in three weeks, raising close to NZ$450,000 thus far. The company is offering shares at NZ$3 per share with a minimum investment pledge of NZ$102, as well as offering between 8.7% to 27.6% ownership of the company. Their ethical dairy model revolves around environmental sustainability, better profitability for participating farmers, and kinder practices toward cows.

Tag: Dairy, Agribusiness

Climate change threatens food security of 65 nations [03 August, Eco-business]

Scientists estimate that millions of people in 65 nations, particularly those in Africa, South-East Asia and the Pacific, could face increased malnutrition as climate change and overfishing take their toll on fisheries. Their study highlights the need to “consolidate fisheries, climate, and food policies to secure the sustainable contribution of fish-derived micronutrients to food and nutrition security.” Additionally, lead author Eva Maire says that climate change could lead to a drop of up to 40% in the large-scale redistribution of global fish catches.

Tag: International, Environment & Emissions, Food Security

Low carbon opportunities beckon [30 July, Farmers Weekly]

According to leading environmental science professor Troy Baisden, large international firms setting zero or negative carbon targets signifies a shift that New Zealand farmers shouldn’t ignore but rather embrace and benefit from. Baisden says more companies are already rewriting their bottom lines to include zero or negative carbon goals and searching for alternative ways to reduce their carbon footprints. Additionally, it is reported that there are real marketing opportunities in play for farmers achieving zero or negative carbon status.

Tag: Environment & Emissions, Rural Communities

FMG puts away a record net profit [30 July, Farmers Weekly]

FMG has recorded its largest ever net profit after tax of NZ$59.25 million and their investment income came to NZ$34.4m in the 2020-2021 financial year as a result of fewer adverse events than recent years. FMG chief executive Chris Black said “all profits are reinvested, which ensures access to insurance, keeps premiums affordable and provides the level of cover customers are seeking.” Chair Tony Cleland adds, "with the ongoing challenges facing rural New Zealand, including labour shortages, water plan rules and general compliance, FMG’s strength and stability becomes even more important.”

Tag: Agribusiness

ANALYST INTEL: June record set for lamb export values [30 July, Farmers Weekly]

The reopening of the foodservice sector in key markets combined with the tight pipeline supply of lamb have led to a solid pricing recovery for NZ lamb as shown by an increase in farmgate prices of NZ$1.50/kg over the past 10 weeks. Tighter lamb supplies domestically are creating an urgency overseas to secure NZ lamb while competition from Australia is ‘limited’. Current data shows both North and South Island recorded weekly lamb kills below 100,000 head into early July, a significant reduction when aligned with previous years.

Tag: Red Meat, Trade & Exports

Banks, MPI team up to create sustainable finance tool [29 July, Farmers Weekly]

According to Toitū Tahua co-chair Bridget Coates, the new Sustainable Agriculture Finance Initiative (SAFI) will support the finance sector in taking environmental and social factors into account when making decisions on financial solutions. Coates says banks would follow the guidance in creating their own guidelines with input from Toitū Tahua and the Centre for Sustainable Finance, complementing existing schemes such as ANZ’s rural sustainability loan. The SAFI guidance is at phase one and will be reviewed at the end of this year and phase two of SAFI will provide a final guidance standard that can be used voluntarily.

Tag: Environment & Emissions

New red meat awards [29 July, Rural News Group]

Entries are now open for the new Beef+Lamb Awards ceremony for the New Zealand red meat sector to celebrate the people, science, technology and innovation that makes the sector world-leading, says Beef+Lamb NZ chief executive Sam McIvor. The prize categories include, Emerging Achiever Award, People Development Award, Significant Sector Contribution Award, Rural Champion Award, Science and Research Award, Technology Award, Innovation Farming Award and Market Leader Award.

Tag: Red Meat, Honours & Awards

Bayer takes additional US$4.5 billion charge for Roundup suits [02 August, Stuff]

According to German pharmaceutical and chemical company Bayer, a provision of NZ$6.45 billion will be taken out of their second-quarter earnings in hopes to close thousands of US lawsuits regarding claims that glyphosate causes non-Hodgkins lymphoma - a type of cancer. Chief executive Werner Baumann said “we want to provide comfort to our investors that the glyphosate litigation exposure should now be reasonably accounted for and leaves significant upside in the event of a favourable Supreme Court decision on the case."

Tag: International, Policy and regulation

We have the tools to cut methane, experts told Climate Commission [30 July, Stuff]

According to leading agricultural scientists, a promising food ingredient (3-NOP) has been shown to cut methane emissions by 30% in overseas trials and has the potential to significantly cut New Zealand’s methane emissions over the next 15 years. However, Climate Commission left out its gains when they delivered their final carbon budgets to the Government in May. They said they took a conservative approach and “if a product like 3-NOP was to become commercially available, there may be reason to revise emissions budgets”.

Tag: Environment & Emissions

Fertiliser rebate rises to $50/t [30 July, Farmers Weekly]

Ballance Agri-Nutrients has increased their annual rebate to farmers and growers by NZ$5 to NZ$50 per tonne, a return of NZ$60 million to 17,500 members of the co-operative. Chief executive Mark Wynne said the latest result had been achieved during a year of uncertainty by using clever science and innovation. Their aim was to help customers adapt to changing consumer demands, environmental requirements and government policies which was reportedly achieved mainly through innovation and the Government agreeing to co-fund their NZ$25 million Future Ready Farms programme over five years.

Tag: Farmers & Producers

SFF outlines regen ag criteria [02 August, Farmers Weekly]

According to SFF chief customer officer David Courtney, their regenerative agriculture requirements (NZFAP-Plus) are being launched on October 1 and is said that the transition to meet these standards does not need to be immediate, rather phased in over a period of time. Courtney estimates 60% of farming practices already meet these standards, with the remaining 40% requiring measurement and recording. Additionally, NZFAP-Plus will include elements with the pending He Waka Eke Noa, which is the industry-wide agreement to measure and address agricultural greenhouse gas emissions along with biodiversity.

Tag: Red Meat, Environment & Emissions, Food Marketing

Dairy prices fall in global auction, led by decline in whole milk powder [04 August, Stuff]

Dairy prices decreased by 1% for an eighth consecutive global auction as whole milk powder declined by 3.8% despite Fonterra Co-operative Group reducing the amount on offer. Fonterra Co-operative Group expects to continue to reduce the amount of whole milk powder on the auction platform, this time by 20,000 tonnes from this month to July next year. They explained it has “extremely strong” contract demand for the product over the next six months and expectations for flat milk supply this season will limit its ability to increase production.

Tag: Dairy, Trade & Exports

Labour breaches on 68% of inspected farms [03 August, Farmers Weekly]

Out of 68% of inspected farms, the Ministry of Business, Innovation and Employment’s (MBIE) labour inspectorate handed out 14 enforceable undertakings, one improvement notice, three infringement notices and six farms had self-resolutions for various labour breaches. MBIE’s labour inspectorate manager Callum McMillan says poor record-keeping by farmers was the most common breach found. The largest fine issued to a farm owner was NZ$99,012 and another farm owner was ordered to pay NZ$60,000 .

Tag: Rural Communities, Policy and regulation, Farmers & Producers

Cow manure to fire up the BBQ [03 August, Rural News Group]

A study between Fonterra Cooperative Group, Beca, Firstgas Group and Energy Efficiency and Conservation Authority (EECA) has found using organic waste is a viable, untapped solution to provide an alternative to New Zealand's current residential gas supplies, with the potential to replace nearly 20% of the country's total gas usage by 2050. Fonterra Co-operative Group head of energy and climate, Linda Mulvihill says “the study is a good example of how Government and industry can work together - sharing science, expertise and experience - we can find solutions for the good of New Zealand.”

Tag: Environment & Emissions, Research & Development

Unknown coral species hauled up in bottom trawling nets – report [03 August, NZ Herald]

A report by the Deep Sea Conservation Coalition says bottom trawlers have hauled up 128 previously unknown species of coral in the past three years, resulting in environmental groups being unhappy with this fishing practice. Forest & Bird spokesman Geoff Keey said "the reality is that these are very, very deep waters that people are trawling in and the only way we're learning what's down there is destroying it." In contrast, Niwa figures shows that 90% of the 142 underwater seamounts within New Zealand's exclusive economic zone have never been trawled and half are closed by law.

Tag: Fisheries, Environment & Emissions

Conflict, COVID, climate crisis, likely to fuel acute food insecurity in 23 ‘hunger hotspots’ [30 July, United Nations News]

According to the Global Report on Food Crises, there are currently more than 155 million people facing acute food insecurity at crisis or worse levels in 55 countries and it is expected to get significantly worse due to primary drivers of conflict, extreme climates and economic shocks. Food and Agriculture Organization of the United Nations director-general Qu Dongyu said “    so far, support to agriculture as key means of preventing widespread famine remains largely overlooked by donors. Without such support to agriculture, humanitarian needs will keep skyrocketing.”

Tag: International, Food security

HortNZ backs code of conduct call [29 July, Farmers Weekly]

Horticulture New Zealand supports Commerce Commission’s recommendation to introduce a code of conduct between retailers and suppliers after discovering its potential to improve the bargaining power of suppliers. Horticulture New Zealand chief executive Nadine Tunley said grower returns have not increased for at least 10 years, therefore “HortNZ supports any move to ensure that growers get a better return on their investment”. The Commission’s draft findings are preliminary and subject to consultation prior to its final report being published in late November.

Tag: Horticulture, Policy and regulation

FMG puts away a record net profit [30 July, Farmers Weekly]

FMG has recorded its largest ever net profit after tax of NZ$59.25 million and their investment income came to NZ$34.4m in the 2020-2021 financial year as a result of fewer adverse events than recent years. FMG chief executive Chris Black said “all profits are reinvested, which ensures access to insurance, keeps premiums affordable and provides the level of cover customers are seeking.” Chair Tony Cleland adds, "with the ongoing challenges facing rural New Zealand, including labour shortages, water plan rules and general compliance, FMG’s strength and stability becomes even more important.”

Tag: Agribusiness