Note from the CEO

Sam McIvor, CEO of B+LNZ, discusses events affecting our farming community. This includes rain, animal health with M.Bovis and FE, the signing of the CPTPP, and the alternative proteins report.
Thursday, 8 March 2018

Events in the sheep and beef sector are moving at pace. Last month many districts received substantial rain, some extreme, although some pockets that remain dry. Moist and muggy temperatures have seen FE spore counts and flystrike rise, while other areas are feeling decidedly autumnal, which is a bit earlier than many would like.

B+LNZ has been focused on M. Bovis – discussing policy direction on key issues with the new government – supporting the Government through ratification steps on CPTPP, and the launch of our Alternative Proteins report.

The signing of the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) in Chile this week represents another important step forward for this trade agreement. It is very satisfying for B+LNZ that we had a staff member at the final negotiations in Vietnam who was able to provide advice to our government delegation. 

NZ exports more than 90 percent of its sheepmeat and 80 percent of its beef production, so CPTPP is good deal for our sector.

It will simultaneously open up markets in Japan, Mexico, Peru and Canada where we face tariffs of up to 50 percent. It will also put us on a level playing field with other major red meat exporters in the Asia Pacific region, such as Australia and the European Union. 

We only need to look at the experience of Australia to see the potential benefits. Following Australia’s 2015 trade agreement with Japan, beef exports to that country increased by $NZ1 billion, while NZ’s beef exports to Japan have fallen by $NZ30 million.

Closer to home, we continue to work hard alongside our industry partners, under the Ministry for Primary Industries’ leadership, in response to the M. Bovis outbreak.

The Government’s recent announcement to provide funding of $95 million, including $60 million for compensation liability and $35 million for operational costs, is welcome.  In principle, DairyNZ, B+LNZ and the Meat Industry Association have agreed to collectively contribute $NZ11.2 million towards operational costs. The government was clear an industry contribution to the response would be an important consideration as they considered their ongoing funding.

From our perspective, the decision to support an industry contribution was a difficult but necessary one in light of the scale of this outbreak.

Sheep and Beef farmers have been very clear that B+LNZ needs to have a direct role in M. Bovis response decision-making. Our funding contribution is focused on getting a decision on the best long-term approach for dealing with this disease, that includes better understanding its impact on production and industry value-chains and the costs and benefits of various long-term options – including eradication.

Finally, B+LNZ has been encouraged by the response to our recent research report on the rise of Alternative Proteins. Farmers I have talked to – while recognising the threat particularly in the US market – were also heartened by the opportunities identified in the report. These include protecting, promoting and leveraging our competitive advantage, which is naturally raised, grass-fed, hormone-free and antibiotic-free red meat. The findings reinforce the outcomes of the consumer research B+LNZ has carried out and gives us confidence that we’re on the right track with the development of the Red Meat Story and Origin brand.  We’re now working with meat processors and exporters to develop an activation plan. While B+LNZ has a role in developing the story and brand, it is the companies that sell the product. We’ve been testing the story and brand at every development point with them and now we were at the pointy end of the process.

We’ll be providing some further insight into the Red Meat story at our AGM in Gisborne on March 22. We hope many farmers will be able to join us on this day.

Over the coming weeks we will be introducing some of our new executive team members via the e-diaries. I know they are looking forward to the opportunity to meet many of you in person.