Collaboration critical to capture red meat sector opportunities

The opportunities and challenges facing New Zealand’s red meat sector were highlighted at the annual Red Meat Sector conference held in Napier this week.
Wednesday, 1 August 2018

The one-day conference, which attracted around 250 red meat industry stakeholders, featured a range of speakers who set the scene for the sector, identified the challenges and highlighted the many opportunities for red meat in a dynamic global market.

One of the over-riding themes was the need to work collaboratively to ensure the red meat sector is well positioned to capture premiums for its product on the world stage.

In setting the scene, former Zespri CEO and chair of the Primary Sector Council Lain Jager said he is convinced there will always be a market for ruminant protein because the world needs more protein.

Ruminant protein makes up only a small part of global protein consumption but most plant-based proteins are commodities.

Jager says the dialogue around alternative proteins is around fulfilling demand for protein by a growing population while vast swathes of fertile soils are lost to urbanisation every year.

While acknowledging that ruminant-based proteins are more environmentally expensive to produce than plant-based proteins, he says some ruminant systems are more efficient than others.

“That’s important for New Zealand and a reason to believe why we have advantages in that space.”

Jager says as a small volume niche exporter, NZ is never going to be a strong commodity exporter but there are opportunities in the value-added space.

He stressed the need for sustainability in farming systems and asked whether NZ wanted to be laggards, fast-followers or world-leading in the development of value chains where sustainable farming is seen as an opportunity rather than a threat.

Vangelis Vitalis, Deputy Secretary Trade and Economic for New Zealand Foreign Affairs and Trade told the conference that while he thought the red meat sector had a bright future, there were challenges ahead.

These include tariffs, non-trade barriers, subsidies being paid to farmers in our competing markets and the fraying of the rules-based international trading framework that is the World Trade Organisation.

One the flip side, the current free trade agreements are saving the sector $200m annually, although it is still paying $231m in tariffs. Once the Comprehensive and Progressive Trans Pacific Partnership Agreement (CPTPP) comes into force a further $63m in tariffs will be cut.

Vitalis identified sustainability as a challenge for the sector.

He says this country’s clean, green image can be undone by a single bad news story that hits headlines internationally and issues like food miles, product life-cycles and carbon footprints all need to be taken seriously.

Alternative proteins have a clear environmental message and that’s a real challenge for the red meat industry.

“How do you deal with that and what is your story around environmental sustainability.”

Tim Hunt, Rabobank’s General Manager for Food and Agribusiness Research and Advisory across Australia and New Zealand, outlined the complexities of the Chinese market.

He says the winning formula for success in China will offer significant growth opportunities for NZ’s agriculture sector, these include focusing on market access and product development and spending a considerable amount of time doing due diligence on the markets and players.

“High quality and differentiated products is important and becoming more important as the competition is rising from Brazil, Australia and Eastern Europe.”

Hunt believes there are huge opportunities for market diversification in China but adds that diversification does create complexities and greater potential for disruption.

Others speakers included Christchurch-based international thought-leader Kaila Colbin, who spoke about the exponential speed of technological change and the impact this has on the agricultural industry while Murray Sherwin from the Productivity Commission talked about this country’s transition to a low emissions economy.

Mahyar Osanlouy from Auckland University described blockchain and how it could be used to create provenance and consumer trust.

A panel discussion hosted by prominent buiness journalist, Rod Oram, on the topic Telling Our Story rounded the conference off. Lain Jager, Lesley Hamilton, head of communications for the Seafood Industry and B+LNZ Ambassador Chef Scott keened shared their experiences of transforming their industries and businesses through transformational thinking and the sharing of stories.   

Videos of all the presentations will be soon be available on the Beef + Lamb New Zealand website.