Young Britons don’t eat Sunday lamb roasts like their parents do, and Alliance Group is finding ways to connect to that younger generation.

Those young people do, however, eat koftas, pies and nibbles. They go to pubs, football games, concerts, a percentage enjoy white-tablecloth fine dining and they buy food online.

Alliance Group’s UK and Europe manager Helen Scott said retail remains an extremely important market for lamb, but consumer trends are shifting and exporters like Alliance have to adapt, which it is trying to do by adding value.

“Retail is very important to us as it is to all red meat companies, but we are also looking to create value by targeting food service, hospitality and online sales.”

Alliance has employed Matt Owens as head of culinary, and it is his job to create new products from Alliance’s Pure South, Lumina lamb and Handpicked aged beef ranges and to also work with chefs, hospitality and food service outlets.

This involves finding flavours for pie fillings, burgers and koftas and, potentially, creating new lamb or beef dishes, such as in tortellini pasta, dim sims, pizza topping or lamb and prawns in an Asian broth.

“I’m lucky I know a lot of people who have a lot of ideas and we are close to London City and some of the best restaurants in the world,” said Owens.

Scott said this new product focus and Owens’s culinary skills contributed to Alliance supplying meat and meat products to the New Zealand team and supporters at the Birmingham Commonwealth Games and at NZ House during the recent Paris Olympics.

Alliance lamb and beef products are also supplied to corporate fans at Premier League football side Tottenham Hotspur’s newly owned 62,000-seat Tottenham Hotspur Stadium.

A typical game will see 8000 burgers and 6000 koftas eaten.

Scott said the stadium is also hosting an American Football League match and a concert by Beyoncé at which Alliance products will be sold.

The company that runs hospitality at Tottenham operates a further five stadiums that now serve Alliance products.

Scott said the new range also features on menus, from pubs to high-end hotels in the UK, Europe and the Gulf States, where it is served alongside beverages, room service and at conferences.

Scott said Alliance is also targeting high-end restaurants with its Lumina lamb, which is now on the menus of Michelin star-rated restaurants in the UK and Dubai.

These are small but important steps that Alliance needs to take.

“This is the future for NZ farmers, creating value,” she said.

“We are a sheep, beef and venison red meat co-operative and we’re proud of it, but we are also a culinary food supplier and that is how we are attracting younger consumers.”

Scott said Owens’s extensive contact network from a career work in the culinary industry and as a former chair of the 139-year-old Craft Guild of Chefs, has been crucial in getting a foot in the door of potential clients, but also getting them to try new or existing products.

A commercial kitchen has been built at Alliance’s appropriately named Shepherdess Walk  offices in central London, at which Owens can experiment with products, network with other chefs or brainstorm new ideas, and where the company can host potential customers.

Once a product has been developed it still needs to satisfy commercial and market criteria.

For example, the super yacht industry is a new potential market but will have to satisfy logistic as well as financial criteria.

“We’re very specific – we have to be – and that means we won’t be seen everywhere,” said Scott.

Nearly a third of UK transactions are conducted online and Scott said its Silere lamb range is resonating with young consumers and has an exceptionally high five-star satisfaction rating lodged by customers.

She said consumers relish the story behind Silere lamb, which is told in online marketing.

“It’s the high-spend consumer that is buying Silere. It targets a new consumer.”

The NZ-UK free trade agreement has opened access for NZ beef. Scott said products have been successfully received, in part due to NZ’s existing reputation for lamb but also due to its quality.

The first shipment sold out within a week, she said, with Alliance’s hand-picked, aged product proving especially popular.

Scott acknowledges NZ sheep farmers are having a tough time but has some encouraging words.

“We are very optimistic with lamb and beef here in the UK. Protein consumption is high and it is growing.”

More: Wallace is visiting seven countries in six weeks to report on market sentiment, a trip made possible with grants from Fonterra, Silver Fern Farms, Alliance, Beef + Lamb NZ, NZ Meat Industry Association and Rabobank.  Read more about his findings here. 

Change is required in the New Zealand sheepmeat industry if it is to create more consistent farmer returns, a Rabobank report says.

New Zealand sheepmeat values dropped dramatically in the 2023/24 season following two years of strong export returns, falling from $12.63/kg free on board (FOB) in October 2022 to as low as $8.08/kg FOB in December 2023, the report, Watering the Green Shoots in New Zealand Sheepmeat, says.

Report author and senior animal proteins analyst Jen Corkran said the major factors that caused the cycle to bottom were global macroeconomic and geopolitical factors filtering through to New Zealand’s primary producers, and a fall in New Zealand sheepmeat exports to China. 

This was made more challenging due to increased competition from Australia.

“The timing of this downturn was unseasonal, and the price challenges coincided with high on-farm costs that squeezed margins for both producers and exporters.” 

Corkran said New Zealand’s sheepmeat sector would be wise to reflect and learn from the downturn and to embrace the change needed to deliver stronger and more consistent returns year on year.

 “For New Zealand sheep production to be a competitive part of the farm system for red meat producers, change is required,” she said.

“And in this new report, we identify three pathways that we believe could help lift sheepmeat returns moving forward: focusing on increasing domestic consumption; reassessing trade and diversifying export markets away from China; and investing to boost the competitiveness of New Zealand sheepmeat.”

Corkran said 2023-2024 is likely to be the bottom of the cycle and, based on both supply and demand dynamics, lamb projections for 2025 and beyond show upside. 

“If the industry takes a strategic approach, our view is that the medium-to-longer-term upside could be greater from 2026.” 

The majority of New Zealand lamb is exported, and over the past five years, New Zealand’s domestic consumption has averaged just 5% of total production. While domestic consumption is limited by population size, New Zealand per capita consumption of 1.95kg a year is not even one-third of Australia’s 6.4kg, Corkran said.

 “If Kiwis were to increase per capita consumption to Australian levels, it would place the domestic market behind only China in terms of overall consumption of New Zealand sheepmeat.”

Australia’s higher domestic consumption added resilience to the lamb market, as strength in domestic retail trade can help balance out global demand dynamics and associated price volatility. 

Globally, lamb is a small part of global protein consumption, and the number of exporters is limited with Australia and New Zealand dominating global sheepmeat trade. 

New Zealand should aim to be clever and careful in finding a good balance of trade partners for both commodity and differentiated products in the coming years, Corkran said.

China, the European Union, United Kingdom, and United States are currently the top export destinations for New Zealand sheepmeat volumes, with China taking nearly half of New Zealand lamb in recent years.

 “The main advantage of trade with China is that more of the sheepmeat carcase is used, for both mutton and lamb. 

 More work could be done to ensure a foundation for ongoing success when it comes to the value this can gain, with New Zealand lamb being recognised in China as a high-quality and nutritious product, she said.

Opportunities in the UK, the EU and the US should also be reassessed. NZ has historic trade relationships with the UK and EU and must continue to foster relationships to make full use of free trade agreements and tariff-free access. 

Corkran said further opportunities also exist in the US market where the value of New Zealand lamb is fully realised via consumers’ willingness to pay for higher-value frenched racks. 

Sheepmeat is a small part of retail in the US and as a result, New Zealand needs to find a way to add to existing inventory in the retail space or, alternatively, turn focus to just foodservice 

“This won’t be easy, but there is scope for incremental gains.” 

Technological advances that can add efficiency and reduce cost are worthy of research and development spending to help future-proof the sheepmeat industry, she said.

“Investing in potential opportunities around value-added products from parts of the sheepmeat carcase, for example blood or offal for future high-value pharmaceutical products, could also add to export income.

 “The government and industry bodies would be wise to invest in research into all areas of technology, as technologies and innovation will only increase in the future. Sectors and businesses that invest in R&D can stay ahead of the curve, and New Zealand will need to do the same to keep up with the rest of the world.”

The trading/finishing game has been red hot through late winter. In stark contrast breeding stock appear to be falling out of favour as trading and finishing taking preference. It’s not hard to see why, with the way the market has moved in recent months. The march of forestry has had a significant impact on breeding numbers in recent years. 

Breeding is a long game, raising the potential to miss heated market movements. But it remains a crucial cog in the wheel. Without breeding numbers, we will continue to fight for store stock, therefore pushing prices beyond sustainable levels. Unfortunately we are now playing catch up in terms of understanding just how many breeding stock units have disappeared.

Beef + Lamb NZ’s recent stock survey report indicated in the last five years a decline of 140,000 breeding cows. Expanding that to 10 years for sheep, and we have seen a decline of 5.4 million breeding ewes. This ultimately means lower calf and lamb crops every spring which flows through to less store stock and therefore lower production and exports. 

We have seen the ramifications of reduced stock numbers versus demand this year. Some will argue that lower stock numbers will naturally increase returns. Domestically maybe, but we are bordering on becoming a niche global player for lamb and barely holding on to a top-five spot for beef exporting. Our ability to influence global market prices is reducing as quickly as our breeding base. 

We only have to look at the growth of Australia’s livestock industry in recent years to understand we are quickly moving in opposite directions.

Australia’s sheep flock is currently at a 17-year high of 79m head, bolstered by significant growth in their breeding numbers, sitting at 49m –2024 will stand as the largest lamb slaughter year on record at 27.7m head. Even with some expected flock consolidation, lamb slaughter in 2025 and 2026 will be larger than the preceding 19 years.

A larger flock, coupled with advancements in productivity has placed Australian lamb producers in the box seat, meaning they are well positioned to capitalise on forecast global demand growth. It’s much the same for Australian beef. Although cattle numbers peaked in 2023, the cyclical nature of production means slaughter rates won’t peak until 2025. This means elevated production and exports in the short to medium term and once again the ability to capture any opportunities that arise.

More: Subscribe to AgriHQ Livestock reports to receive the full report. Key points discussed in the this week’s North Island report include: beef and lamb projections in New Zealand and key international markets such the UK, the US, Australia and Asia.

In Focus Podcast | A new strategy for advocacy

AGMARDT and KPMG have released a report that offers a new way of organising our advocacy networks. Common Ground assesses the positives and negatives of the advocacy groups we have now and sets out a strategy that could improve the collaboration and messaging emanating from the farming world. AGMARDT general manager Lee-Ann Marsh joins Bryan to discuss the report.

Beef + Lamb New Zealand has wrapped up its roadshow, with more than 400 farmers attending 30 meetings across the country.

BLNZ directors hit the road from July through to September to hear from farmers, in particular to test the organisation’s thinking on policy and deliver detail on its refreshed strategy.

Chair Kate Acland said discussion at the sessions was constructive with lots of good suggestions raised.

“I know things are busy on farm and I really appreciate farmers coming along to talk to us in person. As farmer-elected directors, we enjoy the opportunity to check in.” 

There were some clear themes across the meetings.

“We wanted to give farmers some detail about BLNZ’s refreshed strategy, and to see if they felt we’d gotten the balance right. 

“It appears the refreshed strategy was generally well received, and farmers particularly liked the focus on extension and on-farm profitability. 

“Some even gave us ideas for how we can implement the strategy,” Acland said.

Addressing the organisation’s thinking on policy, there was generally good support for the policy positions tested.

Attendees were given information about BLNZ’s approach to National Bottom Lines for suspended fine sediment and E coli; positions on regulated freshwater farm plans; and initial climate change positions. 

In the discussions on national bottom lines, clear themes came through, such as the importance of catchment-level involvement in setting water quality targets and having quality information to work with.

There was also a lot of helpful feedback on the risk-based approach to freshwater farm planning.  

“Farmers provided thoughtful reasons for why they agreed or disagreed with positions, which helps BLNZ to further develop our policy positions. 

“However, this is an ongoing process and there will be plenty of other opportunities for farmers to feed in as we further develop policy positions on these and other topics. 

“We want to ensure the farmer voice is reflected in our advocacy.” 

The next opportunity for in-person policy discussions will be at a series of workshops on climate change policy set down for October. 

Overall, Acland said, from initial analysis of feedback, farmers strongly agreed the meetings provided enough opportunities for input and were a good use of their time. 

“It’s great to hear farmers felt the meetings were worthwhile. 

“I encourage farmers to talk to their local farmer director any time they have questions or concerns; contact details are available on our website.” 

BLNZ staff are working through information gathered at the meetings and will provide a full report-back to farmers in the coming weeks.  

In Focus Podcast | A new strategy for advocacy

AGMARDT and KPMG have released a report that offers a new way of organising our advocacy networks. Common Ground assesses the positives and negatives of the advocacy groups we have now and sets out a strategy that could improve the collaboration and messaging emanating from the farming world. AGMARDT general manager Lee-Ann Marsh joins Bryan to discuss the report.

Anyone wired in to sell cattle during winter/spring has raked in record-breaking prices, whether that’s selling store or plugging finished stock into processing plants. Grass has clearly been a major factor, exaggerating processor shortages and in turn pushing schedules higher. This and an early “spring grass market” have sent store cattle silly too. 

But strong export returns from the United States have allowed processors to offer good money as well. The question is how much longer can we expect the US prices to stay afloat?

If we rewind a few months, back-to-back years of drought meant the US walked into 2024 with the smallest breeding herd since 1941. Combined cow and replacement heifer numbers dropped to 46.5 million, down 4.5 million from the start of the decade. 

Since bull farming is a rarity in the US (less than 2% of the total cattle kill), there’s a major reliance on cows to supply the lean grinding beef used in making beef patties. With the drought over, suddenly the number of cull cows arriving at the US processors fell sharply, creating major shortages and sending prices for fresh US lean grinding beef to all-time heights. 

However, there’s a second side to this story that’s slid under the radar – how much beef is being shipped to the US. It’s not surprising that Australia is funnelling much more beef into the US. Its herd is well and truly rebuilt and its cattle kill is flying at the quickest rate since the big droughts in 2018/2019. 

This is a major reason why frozen imported beef (that is, what Australia and New Zealand supply) has traded at a big discount to equivalent fresh beef from within the US, especially since not all US buyers are set up to use frozen beef.

But Brazil has been a bit of a wildcard. It was always going to cash in on the strong demand too – though it operates under a restrictive quota. Tariffs jump to 26.4% for any beef sold beyond this limit. Usually, this squeezes most of its US sales into the start of the year. However, with its main buyer, China, in a weak position, Brazil has kept sending boatloads of beef to the US even after the tariff-free quota was filled.

In total, US imports of frozen boneless beef from Australasia and South America through January-July were the highest since 2015, up 119,000 tonnes or 44% versus only a year earlier. The lift is even sharper when you include other cuts of beef.

When you map those US beef imports against their cow/bull production, suddenly there’s a 6.5% lift in manufacturing beef traded versus last year. Admittedly, total beef inventories in the US at the end of July were low compared to the past decade, but it shows that demand has been just as important as supply when it comes to driving prices higher.

And this is where it gets interesting. Over the past few weeks, the US imported beef prices have been strong, but with limited upside. Labor Day in the US (the first Monday of September) is the traditional marker for when demand for grinding beef starts to slow and cow production starts to lift. Whether the prices can hold with the current amount of beef on the market is debatable, yet we’ll have a lot more to sell into the US between now and Christmas as our cattle kill picks up steam.

It is safe to say that the winter season has been atypical of the normal trends. 

Typically a quieter time for the markets, August in particular was anything but. 

Store and slaughter prices rocketed up as supplies began to dwindle, setting up an even busier start to spring.  

The elephant in the room has been lamb, where a large early kill this year has left processors scrambling for numbers. 

This spike in competition sent schedules upwards by 35-65c/kg through August. 

This resulted in some hefty prices paid on forward-store lambs that can be finished quickly. 

While most of upside has been procurement driven recently, there has been some positive movement in export markets.

There is no denying that the Chinese market has been below par for almost a year, but buyers are beginning to show a bit more interest in securing lamb for the Chinese New Year celebrations in late January 2025. 

The high inventory China had on hand has been chipped into and buyers are now looking to top inventory up for the festive period.

As our supply is limited, orders for the European chilled Christmas trade have been reasonably successful as buyers have had to be competitive to secure lamb.

The United Kingdom market is steady, but sales have been limited there as lamb weights are increasing beyond their desired weight range. 

Australia continues to be our largest competitor and current weather conditions may see their new-season lambs processed around the same time as our new-season lambs come on stream. This will increase supply and potentially make for a harder job for our exporters.

When it comes to the beef market, procurement pressure has been evident on slaughter prices. This has boosted confidence, leading to record high store prices in August. 

But while the domestic market has been hot, export markets have had a quieter period of trading. Procurement pressure has been welcomed by farmers, driving schedules higher, but the lower inventory has meant that New Zealand exporters have less beef available to offer export markets.

There continues to be a lack of demand from Asian markets, with limited sales. 

Although China is purchasing beef, it is in limited quantities, and they are not prepared to open their pockets too wide. 

Japan has been a bit more positive, as the recovering tourism industry has supported some hospitality demand. Export volumes to Japan for the three-month period May-June were nearly 45% stronger than the five-year average at 13,770 tonnes.

As with lamb, Australia continues to pose a risk to the New Zealand beef market, posting record-high exports in July of 130,000 tonnes. Exports eased slightly to 121,800t in August but this is still a record high for the month. 

Australia continues to target the United States market, shipping nearly 80,000t there in the past two months. 

US beef production continues to decline and Australian exports to the US have been progressively increasing since February, buoyed by stronger prices. 

A softening in demand from China has also been a catalyst for a refocus on the US. 

However, more recently, the US has been trying to barter down imported beef prices, which could suggest Australia is accepting lower money to try to offload surplus beef. 

Australia’s national cattle slaughter is tracking 13% ahead of the five-year average from the beginning of the year to the start of August.

This article was written by AgriHQ analyst Sara Hilhorst. Subscribe to AgriHQ reports here.

A report from the New Zealand Institute of Economic Research calculates that a foot and mouth disease incursion could cost the country $14.3 billion a year in lost export values.

Biosecurity Minister Andrew Hoggard said the report reinforces his government’s commitment to “stamp out” any New Zealand foot and mouth disease incursion.

“Immediate and decisive action will be required if an outbreak occurred and this is why Cabinet has endorsed an approach of urgent eradication, along with the use of vaccination if appropriate.”

The Ministry for Primary Industries presented the government with three management options for consideration – stamping out the disease, with the possible use of emergency vaccination for short-term containment as needed; managing an outbreak over a longer period using vaccination; or living with the disease, he said.

“The evidence clearly supported ‘stamping out’ the disease, either with or without emergency vaccination.”

Using an emergency vaccination would take around 10 months to achieve, cost around $1.9bn in operating costs and compensation, and see a one-off $8.4bn impact on the economy in lost trade. 

The option to stamp out without vaccination would take 15 months, cost $2.98bn and carry a $15.3bn dollar loss of trade. 

“Living with the disease would have an ongoing annual economic impact of $14.3bn.”

Beef + Lamb New Zealand’s New Season Outlook shows another challenging season for sheep and beef farmers with farm profit before tax expected to decrease by 7.4% to an average of $45,200 per farm.

While revenue is forecast to increase slightly by 1.1%, this is offset by a projected 1.8% rise in farm expenditure. 

High costs, particularly interest payments, continue to impact profit margins, with profitability remaining at levels similar to those seen in the 1980s and ’90s. 

While the rate of on-farm inflation has slowed, total farm expenditure remains stubbornly high for 2024-25, driven by expected increased costs on average for farmers from interest payments. 

While interest rates have started to fall it will take time for significant relief to be felt by many farmers. 

Those on floating loans will have started to feel some respite but many farmers will be coming off term loans and fixing in at higher rates than before. Interest expenditure has doubled since 2021-22.

The NZ dollar is expected to be slightly stronger (3%) against the USD (0.63) than in 2023-24 but be effectively unchanged against the GBP (0.48) and EUR (0.56). 

BLNZ chair Kate Acland acknowledged the sector’s current difficulties but said she remains optimistic about the future. 

 “It’s been a tough year for many in the industry, and the upcoming season is also shaping up to be challenging. However we are starting to see some positive signs in the market, we know our sector is strong, resilient, and will bounce back even if it may still take some time.” 

A sluggish Chinese economy is expected to continue to weigh on sheep prices. China is by far New Zealand’s largest mutton market and remains our largest single lamb market. What happens there also has a big impact on global lamb markets.  

The current lift in farmgate prices in New Zealand is being driven by a lack of domestic supply, exacerbated by the drought, rather than an increase in global prices. 

Farmgate prices and store markets could be volatile this year due to lumpy supply as farmers look to rebuild from the drought and volumes are down anyway.

The lamb price is projected to be $130 per head, up just 1.1% from last season but still 8.2% below the five-year average. Mutton prices are expected to remain steady at $60 per head, which is 46% below the five-year average. 

There are some positives. The all-beef price is forecast to be $5.35/kg, 4.3% above last season and 4.8% above the five-year average, reflecting strong demand in the United States, where the cattle herd is at its lowest level in over 70 years. 

European and North American markets are also expected to remain solid for lamb. 

There has also been a significant decrease in lamb processing in Australia in the past few weeks.

 If this trend continues, that coupled with less expected supply from New Zealand, the European Union and United Kingdom, could see global lamb prices lift higher than currently forecast.   

As sheep revenue represents about 42% of average farm revenue, what happens with these prices is key to the speed of a recovery in farm profitability.  

Export volumes for NZ red meat are expected to be lower in the coming season, with lamb down around 7%, mutton down 7%, and beef down 3%.

 This is due to a significant decrease in sheep and cattle numbers driven by drought this year.  Lamb production is also expected to be down significantly due to the fall in ewe numbers and a lower lambing percentage because of the drought.  

The outlook says the state of the global economy is mixed. Most economies are still in recovery mode, while others, particularly China, remain weak. 

The challenge of reducing inflation is expected to be mostly “solved” in New Zealand’s key markets for the outlook period, barring any major event. There are also ongoing shipping issues with costs spiking to a new peak and potential risks in trade policies.

Sheep and beef farmers can test the profitability of cashmere goats on their farms in a project run by New Zealand Cashmere and AgFirstNZ.

NZC business development manager Olivia Sanders said NZC is looking for sheep and beef farmers, in both the North and South Islands, that are centrally located, have over 300 hectares, and are curious about what cashmere can add to their business.

The two-year project aims to showcase the productivity, profitability and environmental benefits when diversifying with cashmere goats in traditional sheep and beef systems.

Farmers who partake will run 100-plus does, provided by New Zealand Cashmere, for two years.

They will retain female progeny to build their own flock, receive premium fibre returns and take advantage of both NZC and AgFirst’s consultancy services.

Farmers will receive $110-$150/kg of fibre, dependent on quality. 

Farms will need 30ha or more of good sheep fencing, and be able to run the cashmere goats from September 2024 to 2026. 

Sanders said most farms needed to diversify their income streams. Cashmere goats integrate well into sheep, beef and deer systems, she said.

Farmers who add up to 10% of stock units in cashmere goats do not need to change the way they produce, Sanders said.

Cashmere goats controlled weeds, which in turn reduces inputs.

“You can reduce the time and money spent on chemical sprays or mechanical topping. You’re basically turning those weeds into feed and turning the weeds into cash because you’re growing up cashmere.” 

Research in the 1980s showed that by adding cashmere goats to a system, pastures improve  and there are daily liveweight gain improvements in lambs, she said.

Goats improve pasture by browsing weeds, seed heads and the fibrous tops of pastures.

When goats eliminate weeds they open up the pasture and expose bare ground, which helps improve clover content by up to 30%, Sanders said.

Better pasture means improved liveweight gain which means farmers can get stock off land quicker, she said.

“Where else do you have an opportunity to add in another livestock unit without needing to remove anything else out of your system?” 

Sanders said New Zealand-grown cashmere is so highly in demand that the NZC buyer will take every gram of fibre produced locally.

The New Zealand pastoral farming industries have a great opportunity is to shift the dysfunctional bobby calf output to functional beef-on-dairy production, 2023 Nuffield scholar Matt Iremonger believes.

It needs greater value in the supply chain for mating, rearing, growing, processing, marketing and delivering a beef product to the end consumer from the NZ dairy industry.

“Unless there is more money for the end product of non-replacement calves, the value chain will continue to focus on cost minimisation of the calf as a by-product of milk production,” he said.

To change the value chain requires knowledge of the customer needs, including perhaps grain-fed finishing, improved integration and communication of farming systems and greater efficiency and cost optimisation.

Iremonger called for improved technology in meat grading for confidence in product quality and consistency in the eating experience.

He also called for innovation and improvement in marketing beef-on-dairy products.

“By shifting from a production-driven to a consumer-demanded beef-on-dairy value chain there is a prospect to enhance value and provide an opportunity for beef on dairy and the non-replacement dairy calf.”

Farmers will need to communicate transparently, engage with consumers, and build trust through storytelling, education  and advocacy efforts to promote the benefits of beef on dairy and address consumer concerns around sustainability and quality.

Iremonger is general manager of Willesden Farms, running 40,000 sheep and beef stock units on Banks Peninsula and for the twin Kaimoo dairy farms milking 1500 cows in Central Canterbury. 

On his Nuffield scholarship travels Iremonger found that New Zealand is almost alone among the dairying countries in having a “bobby calf problem”.

The 1.8 million bobby calves killed in their first week after birth are an underutilised resource.

Among the reasons for inability to access value, he cited lack of consistency in NZ beef, intermittent supply and problems with grading.

About 40% of NZ beef production already comes from culled cows and slaughtered bobby calves from the dairy industry, being mainly manufacturing beef.

Within $4.6 billion of beef exports in 2022-23, nearly $2bn went to China and $260 million to Japan.

Meat companies are poorly represented in China, supply is inconsistent and grass-fed beef is discounted in many Asian markets because the market prefers grain-fed.

Iremonger said the supply of beef-on-dairy cattle is developing as a specialisation involving selected beef genetics such as Charolais, Wagyu, Angus and Hereford with desirable traits such as high growth rates, meat quality and suitability to NZ growing conditions.

“One of the main challenges to success has been the lack of financial participation along the value chain; someone is often missing out, often the calf-rearer.

“Also, the product is often less than successful as a farming system, [with] either underperforming animals or underperforming at processing with lower quality meat or both.”

The low carbon footprint and the pastoral system  provide a unique point of difference for NZ beef on dairy.

The International Dairy Federation has a carbon accounting methodology that stipulates that 85% of the dairy cow’s emissions are attributed to her milk and 15% to her calf. By contrast a beef on beef calf starts life with 100% of the dams’ emissions attributable.

When NZ cattle are finished and processed the per kilogram beef GHG emissions are 29% lower for beef-on-dairy animals compared to a beef on beef animals.

The NZ birth-to-farmgate carbon footprint for beef-on-dairy animals is about half that of cattle in the United States and Australia.

Iremonger suggested opportunities with the beef-on-dairy market for grain finishing in compost bedded barns for 70 to 100 days.

Beef genetics with high calving ease and short gestation length in addition to the sires having high EBVs for growth, eye muscle area, yield and marbling (IMF) and feed efficiency would be desirable.

Iremonger identified what he called the market challenges, including effective branding and marketing strategies.

“Achieving consistent beef quality and meeting market specifications can be challenging, particularly for pasture-based beef production. 

“Variability in factors such as genetics, nutrition, management practices, and processing methods can affect beef quality attributes such as tenderness, marbling, flavour, and consistency, which may impact market acceptance and consumer satisfaction.

“Consumer preferences and trends in the beef market are continually evolving, influenced by factors such as health and nutrition concerns, sustainability considerations, animal welfare standards and culinary trends.”

NZ farmers must navigate regulatory requirements related to animal health, welfare, traceability, food safety, labelling, and environmental stewardship to ensure compliance and market access.

He wanted adoption of beef on dairy to be independently financially driven and not forced by processing companies.

“Adopting beef-on-dairy practices should be a financial strategy to improve business performance and demonstrate commitment to sustainable farming practices, thereby enhancing their social licence to operate.

Appropriate beef-on-dairy genetics and feed strategies are needed. 

The USDA beef grading system is an example of what NZ needs, for quality assurance, market value, consistency and in some cases market access.

The Meat Standards Australia (MSA) grading system and its index scoring for eating quality is another example.

After visiting the US, he reported that the development of the beef-on-dairy market has been called “arguably the most significant advancement for the US beef industry in a generation”.

The numbers of cattle in that category have increased from 50,000 in 2014 to over 3 million in 2024.

A collaboration between family-owned Sustainable Beef in Nebraska and Walmart has grown to 1500 head a day through the packing plant.

“Beef-on-dairy genetic cattle are providing a $150/head advantage over the standard due to the uniform product and performance,” he said.

Iremonger also found a Californian company, Grimmius Cattle, that raises 700,000 calves annually as a vertically integrated business that supplies genetics to dairy farmers, rears calves and finishes the cattle at feed yards.

It operates a calf buyback system with dairy farmers using Angus and Charolais genetics.

Technological advances in genomics and precision feeding systems are increasing the efficiency of calf-rearing and finishing.

Ideas That Grow Podcast | Developing leaders in the food and fibre sector