In this series, the team each offer a big-picture strategy for food & fibre. 

Two very different people asked me the same question recently: What should I do with my life now? 

One was nearing retirement after a successful career. The other a mum considering her newfound freedom after the toddler years. 

Both conversations bogged down quickly. This was complex stuff, after all – a matter of trawling through life experiences to weigh up the countless options open to them. So we tried another approach. 

Forget about “what” the right choice is. Let’s consider “how” you’ll choose instead.   

That reframe was electric. In minutes they had the outline of a plan. For the retiree, that included professional coaching, a national road-trip to reconnect with admired friends and a deliberate step out of the comfort-zone – in this case immersion in Te Ao Māori. 

When Einstein said “we can’t solve our problems with the same thinking we used to create them”, I’m pretty sure this was what he was talking about. Stepping back to come at the problem differently. To consider how, not what. 

Maybe I’m just on the lookout for examples of  how, not what – but I keep seeing them everywhere. 

In Atomic Habits, author James Clear offers some confronting advice. Ignore goal-setting and focus on building better everyday habits and systems. Having had SMART goals drilled into me since childhood, I nearly choked on my Weetbix when I read that. But on reflection, the argument holds up. 

Daily systems – like going to the gym, eating right, reading more etcetera – are what actually move us forward, not the New Year’s resolution. Any farmer will tell you the same – get the inputs right and the outputs will fix themselves. Save your pennies, and the pounds will save themselves. Work on the business, not in it. 

I saw”how, not what” in the Sinai desert on my Nuffield global experience. Living in some of the toughest conditions on earth, the people of the Neot Samadar rural community were running a thriving business stretching across hospitality, tourism, renewable energy, horticulture, education and branded health products. 

When I asked to see their business plan, they said they didn’t have one. Their culture – the “how” – is the engine of their business success. 

Individuals are encouraged to explore new diversifications, with their ideas reviewed through a long consensus decision-making process with the whole 400-plus person community. Leadership roles change regularly to give emerging members opportunities to grow. Time together as a group is prioritised above anything that happens on farm. In this system, their business success happened almost by accident. 

Back here in the New Zealand food and fibre sector, we have a new goal. It’s a good one too. To double the value of our exports in the next 10 years.  

The leadership system tasked with achieving that goal is now 34 years old. The dust had barely settled on the rubble of the Berlin Wall when the Commodity Levies Act was signed.

Back in 1990, we went through a system-change – part of a series of deeply painful reforms, but in this case, worth it. That change set up the sector bodies that enabled three decades of production gains and growth. The success we enjoy today is a direct result of that decision to change the system.  

But more production won’t get us to a doubling of export value. No chance. Instead, we’ll need to do new things. Like building a shared data exchange so producers only have to input data once. Or a verifiable national food story that makes NZ food and fibre products genuinely stand out to global consumers. Or a workforce system that improves the retention rate of new staff – at least up to the national average. Or a sector-wide pathway to find and invest in great talent and future leaders. Or a land-use change pathway to help producers diversify and stay viable as markets and our climate changes. 

I’m not convinced that our current leadership structure, despite being staffed by some phenomenal Kiwis, can overcome its inbuilt silos and develop these kinds of sector-wide future systems. 

So I’m in support of KPMG and AGMARDT’s proposal for The Common Ground, a collaboration platform where our 150-plus industry-good organisations can pool resources and people around our mega challenges and opportunities. 

A disclaimer here: I’m deeply biased. I provided comms support on this project. But I took the job because I believe this kind of work – to build better systems – is what will ultimately enable a doubling of export value in the constrained, complicated world we find ourselves in.

To quote Clear, “We don’t rise to our goals. We fall to our systems.” If we’re not prepared to have a serious conversation about system-change in this sector, then our grand goal is meaningless. 

Trade barriers affecting nearly $190 million of exports have been removed by the government over the past year.

Minister for Trade and Agriculture Todd McClay said they had resolved 14 non-tariff barriers (NTBs) over that period, returning significant value to Kiwi exporters. 

“These efforts directly boost our trade value and make it easier for businesses to expand into key international markets.”

The also support the government’s target of doubling exports by value in 10 years, he said.

NTBs, which include regulatory obstacles like complex certification processes and import restrictions, currently affect $9.8 billion worth of New Zealand’s trade, with the primary sector facing the greatest impact.

“Boosting the export value of farming, forestry, horticulture and wine production [is] vital to our economy, as we oppose distortionary agricultural subsidies through the WTO to enhance global food security.” 

The NTBs resolved include: 

• A barrier that had affected $5m in trade devices exports to Mexico.

• Labelling issues in South Korea that cleared a shipment of New Zealand cheese worth $1.8m.

• Reduced regulatory burdens for wine and spirits exporters, including expanded labelling flexibility, with the European Union. 

• Restored onion exports to Indonesia, NZ’s largest onion market, through streamlined phytosanitary certification.

• Restored log exports to India following changes to NZ’s fumigation practices.

“New Zealand exported $96.3 billion worth of goods and services in 2023. Over the next 12 months we will continue our focus on reducing NTBs including around costly EU deforestation regulations, Canadian dairy import restrictions, $300m of cosmetics exports to China and restrictions on structural timber exports to Australia,” he said.

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.

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.

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.

Zespri and shipping partner ANL/CMA CGM have launched a feasibility study into a possible low-emissions shipping corridor between Tauranga and Zeebrugge in Belgium, via the Panama Canal.

Zespri executive officer for sustainability Rachel Depree said low-emissions shipping is a critical part of carbon reduction for exporters.

A low-emissions shipping corridor is defined as “a route between two or more ports where zero-emission shipping solutions are demonstrated and reported”.

“Collectively we are already facing rising costs as carbon is priced into the economy and our markets and customers are starting to demand targets and plans to lower emissions over time,” Depree said.

“Shipping plays a critical part in New Zealand’s export-driven economy, carrying 99% of the country’s trade by volume and around 80% by value.”

Depree said while kiwifruit is a low-carbon product, shipping emissions make up a larger portion of the product’s overall carbon footprint at 43%.

“Zespri can’t directly reduce shipping emissions ourselves so we’re working with our shipping and distribution partners to improve efficiency and find opportunities to pilot low-emissions fuels solutions as we work towards our ambition of being carbon positive by 2035.

 “This includes continuing to advocate for new port infrastructure and supporting the introduction of more low-emissions shipping vessels, fuels and technology”.

A report on the feasibility of such a corridor by EY for the feasibility study showed New Zealand trails other countries in climate and transport policy and investment for low-emissions shipping.

The report says European ports made large investments to accept alternative-fuel ships, which are larger than conventional vessels, with some already running on 100% renewable energy.

Collaboration with other New Zealand exporters is critical to show demand, reduce cost and speed up investment. 

Governments have an important part to play, with new policies and regulations needed to transition fuels and infrastructure.

The outlook for alternative fuels is complex, with no clear preferred low-emissions fuel, which means an adaptive and multi-fuel approach is needed.

Emissions intensity of alternative fuels is dependent on how these are manufactured.

Biofuel can provide a useful lower-emissions bridge as it can be “dropped in” to conventional vessels often with little or no modifications.

Alternative fuels are expected to price-match fossil fuels by 2040 onwards, due to reducing renewable electricity cost, the removal of subsidies on fossil fuel and carbon taxes.

First movers are needed to understand commercial production and economies of scale, the report says.

The potential trade flashpoint of the European Union’s deforestation regulations does not look like going away.

The view in Brussels is that implementation of the regulations, which obligate importers and European producers to provide evidence that certain products have not caused deforestation, will not be dropped but its implementation could be delayed.

The regulation covers products and their derivatives such as beef, leather, furniture, wood, paper, soy, cereals, chocolate, coffee, palm oil and rubber, including tyres.

Exporters say it is too far reaching, impacting countries such as New Zealand that do not have deforestation.

They claim that meeting the required EU standards will require historic and current satellite imagery or geolocation data of where the product was sourced.

The regulation, strongly promoted by non-government organisations, is designed to prevent deforestation of natural areas for production, such as the Amazon.

The policy applies to imports of related products into the EU and is scheduled to be implemented from January 1.

Such has been the backlash, including from NZ, that some in Brussels believe its implementation could be delayed to allow more consultation and deliberation but is unlikely to be abandoned.

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.

In Focus Podcast | Meeting the market in the US and EU

Roving reporter Neal Wallace calls in from Brussels to share insights on the first week of his Meeting the Market tour. He’s been in the United States where some of our biggest customers are, including Mars and McDonald’s. Neal says they love NZ food but there are a couple of things we need to improve if we’re to remain as a supplier of first-choice.

New Zealand is now viewed as an outlier for global shipping as cargo movers grapple with the soaring cost of getting products from port to port.

The country is seen as an expensive place to do business from a shipping operator’s perspective, Zespri shipping manager Alasdair MacIntosh told HortNZ’s annual conference in Tauranga.

MacIntosh is also a representative of the New Zealand Cargo Owners Council. He said the shipping industry is facing multiple challenges as it battles ongoing costs and longer travel times.

Nationally, the council is also concerned about poor productivity, with a lack of improvement post-covid.

A lot of this is due to port operations, labour requirements and the uncertainty of when vessels will arrive, MacIntosh said.

“Overall, nationally we are about 20% down since covid – Auckland 38%, Tauranga 14% in terms of their crane moves at the moment.”

The industry is coping with the amount of cargo coming through and with a weak economy and high cost of living. He said he is concerned about low productivity once the economy starts improving and demand increases.

“Where does that leave us?  We can just see more congestion coming down the line.”

Ships are going to get bigger as larger ships are more fuel efficient and are better for the environment in terms of carbon produced per tonnes of cargo carried.

Nationally, the country faces major infrastructure challenges to be able to service these larger ships.

“We need to be in a position where we can expand, where we can make places for larger ships coming through, more efficient ships and more efficient movement of cargo.”

Most ports in New Zealand will not be able to take those larger vessels apart from Auckland, Lyttleton and Tauranga.

“Perhaps it goes offshore, perhaps Australia becomes a hub for New Zealand, and we end up having to go through Australian ports to reach the rest of the world.”

The issue needs to be depoliticised and cannot be resolved if consecutive governments continuously change or block plans.

“We need to have an infrastructure policy in place that covers at least 30 years so that we can have some good budget [funding] put aside to make sure that each of these projects that needs to be addressed does have the attention it needs and not just change every three years when a new government comes in.”

The council is working with transport agencies and the government to develop this, he said.

The sentiment was backed by Zespri’s executive officer for sustainability, Rachel Depree. 

As consumers and markets became more climate conscious, New Zealand has to be well positioned to take up low-carbon shipping technology, she said.

“We’re small, down under and far away but very reliant on shipping to drive export value.”

There is also a limited supply of low-emissions fuel and NZ risks missing out if it does not act now.

The country could miss out on low-emissions supply chains and routes as larger trading partners move into this space, she said.

“This of course could resolve in higher emissions pricing in the future, or even reduce servicing by shipping providers including the risk that we are left with the high carbon options to ship product to market where we will essentially be paying other countries to decarbonise.”

Lowering these emissions reduces costs and helped contribute to the government’s goal of doubling export values.

Ports also need longer and deeper berths to accommodate larger ships and NZ trails other countries in transport policy investment, she said.

The industry needs all-government support to co-ordinate industry and government efforts around better port infrastructure, alternative fuels and increasing domestic fuel supply.

“We know we need to be infrastructure ready if we want to bring these ships to NZ.

“We need to take on this challenge if we are going to continue to offer high value products to the world and support NZ’s enviable agri-economy.”

With August to November being peak export time for organic wine exporters, New Zealand Food Safety deputy director-general Vincent Arbuckle says the Ministry for Primary Industries wants to remind exporters of market requirements to the United States and the European Union.

From September 19, US importers of New Zealand organic wine must be certified organic.

In March the MPI published revised market access requirements for the US, requiring all consignments exported to the US to be associated with a United States Department of Agriculture (USDA) National Organic Program (NOP) import certificate.

The rules for import certificates require that the US importer named in the certificate is certified organic.

To allow time for US importers to catch up on their certification, the US temporarily allowed import certificates to be generated without an importer being certified, but this temporary measure ends on September 19.

“The USDA has also advised that this will likely impact consignments that are ‘on the water’ on September 19 2024”.

The MPI said exporters should engage with importers to confirm they are on track to complete certification.

Organic wine exporters sending wine to European markets under the MPI’s Official Organic Assurance Programme must obtain a Certificate of Inspection (COI) prior to the departure of the consignment from New Zealand.

Obtaining official organic assurance applies to organic exports to the EU, Great Britain, Switzerland, Northern Ireland and Norway.

Deadlines for COIs are set in the laws and regulations by the respective European market.

The process to obtain an organic export certification is separate from the process to obtain export eligibility statements for wine.

Goods cannot leave New Zealand without the necessary documentation. 

Demand for New Zealand exports remains despite the multitude of challenges facing the global economy.

These challenges range from international transport costs to demographic changes in key markets and high global food costs, RaboResearch general manager Stefan Vogel said.

Speaking at the New Zealand Institute of Primary Industry management, Vogel said the latest spike in international shipping costs has seen rates increase three to four times and volumes fall dramatically.

“We are not even seeing half of the vessels going through the [Suez] canal.”

Vogel said that price volatility will remain over the next six to eight months.

The root cause of the spike is the ongoing attacks by Houthi rebels on shipping traffic around the canal, used by a third of the world’s container ships

Most New Zealand exporters, however, do not use that route, with Asia being their prime destination, he said.

Vogel said the global economy is still being challenged by sluggish growth and high interest rates. 

China’s GDP was reported as 5% for 2024 and consumers are trying to find value without spending more money. Meat, dairy, fruit and vegetables are the categories that have the biggest impact in New Zealand.

Overseas consumers are getting older, especially in China.

“The population has already reached its maximum. For the last two to three years, we are already seeing the population declining.”

It is difficult to encourage people to have more than one child because of the costs and logistics. Many people living in China’s major cities live in small, cramped apartments that do not have space for multiple children, he said.

On the positive side, the upper middle class has increased over the past 10 years and Vogel expects that growth to continue in categories such as meat, where demand remains.

“Some of the meat we are producing here, for example the beef side, can still benefit in China going forward.”

Chinese consumers are also becoming more conscious of health and sustainability and he believes beef exports can benefit from that.

For dairy, in recent months export volumes have struggled in the face of a surge in domestic growth.

“What you see in many parts of the world is the export countries – us here, the US, Europeans and the South Americans – the growth has not been very impressive. The Chinese growth over the last four or five years in terms of production was big, but it’s slowing down. 

“They are grinding under margin pressure quite a bit as well. A lot of costs have gone up and they’re coming slowly down and in Asia we foresee the same thing – costs coming up quite a bit and the margins not very good.”

In the medium term, growth from the middle class, who have discretionary spending, is good news and it will be challenging for domestic suppliers to meet that demand, so demand for imports will continue.

Outside of Asia, consumers in Europe and the US are trading down because of high food prices and are choosing cheaper protein options than beef.

“Going forward with inflation finally coming down in many countries, slower than hoped but still coming down, the question is can we reverse that trend. 

“The good news for us here in New Zealand is that there is demand for our products out there. Clearly there are challenges but wherever there are challenges, there are opportunities. 

“I think we are not worse off than our competitors, on the contrary, I think we are in a good position and in that regard, I think we will overcome several of the challenges from the shipping side.

“We need to be focused on having a product that is desired in the market from the sustainability side of things, from a value proposition side of things and also, we need to be cost competitive.”

In Focus Podcast |  NZ food system in disarray

Calls for a national food strategy are growing as the cost of living crisis leaves many unable to afford nutritious food here, despite living in a food producing powerhouse. Lincoln University’s Professor Alan Renwick says it will take a holistic approach as there are many aspects to consider – health, social development, commerce and agriculture. He says the changing climate will force us to rethink how we produce food and where.

Global market demand for New Zealand strong wool is headed for growth on the architecture and design stage. 

In a move to significantly increase demand and value for NZ strong wool products, Wool Impact, tasked with rebuilding NZ’s strong wool industry, has engaged Gensler, the world’s leading architecture, design, and planning firm, to conduct a market study focused on wool’s positioning, relevance and opportunities for growth within the global architecture and design (A&D) industry. 

Wool Impact chief executive Andy Caughey said the strong wool sector has not been well positioned to respond to the dramatic shifts in the way interior products are selected because it does not have people in-market understanding the needs of brands that do or could use wool. 

“NZ’s strong wool leaves the farmer’s line of sight the moment the wool bales are trucked off the farm, losing the unique attributes of each farm to a commodity system. 

“This prevents brands from selecting and rewarding farmers who are using best practices that are good for the world, and good for their customers. 

“This needs to change,” Caughey said.

The key to unlocking value from these closer brand-grower relationships will be in having deep understanding of wool’s impact throughout the value chain and the selection of supply chain partners that have a shared ethos of value creation and transparency.

“Developing and engaging with global organisations like Gensler, and the manufacturers supplying the A&D industry, is a step change in the right direction to unlock value from closer brand-grower relationships.”

“NZ’s world-leading farming practices, known for their stewardship and expert land management, can contribute significantly to improving ecosystem health, including climate challenges.” 

Caughey said Gensler’s strong commitment to sustainability and expertise in product development were key factors in selecting the firm.

“As architects and designers, specifying sustainable building materials is one of their most substantial opportunities for impact, and the same applies for the manufacturers crafting textiles, flooring and furnishings.”

Earlie this year Gensler launched its GPS standards, a set of baseline and market differentiator standards that defines the baseline sustainability criteria for the high-volume, high-impact and market-ready material categories used in the firm’s projects.

The intent of GPS is to provide clear and concise standards for Gensler’s designers.

“Providing our clients with the best-in-class and services for which we are known includes bringing sustainable solutions to the table from developing the GPS standards to further the A&D industry to supporting the growth of wool as an environmentally conscious fibre through our work with Wool Impact,” Gensler product development leader Benjamin Holsinger said.

To be specified by A&D leaders, wool products like carpet, acoustic products and textiles require environmental metrics at every stage of the value chain.

Caughey said this means what happens on farm is critically important, especially when it comes to carbon footprint.

Select grower groups will function similarly to those of the fine wool sector, with programmes such as NZFAP and NZFAP+ being key accreditation triggers. 

“The need for quality data on farm will drive farm-specific sourcing of wool.  

“We see a clear pathway to value when wool is positioned as a solution to brands’ climate and broader sustainability ambitions that drives attribute and farm specific sourcing of wool.

“It’s not a simple fix. The area of impact assessment is constantly evolving.

“However, we know that for growers to have confidence in the future for wool they need to see partnerships between brands and NZ.

“In working with Gensler the prices we are wanting to secure for growers will take away from the commodity market into very specific purpose, ensuring sustainable prices for growers to continue to invest in their flocks and properties from wool returns.” 

Partnerships will be targeted across the board from existing NZ buyers using strong wool to brands not already using strong wool and companies working with synthetics but looking to expand their programmes around wool.  

“Overall this will drive increased demand and value for NZ strong wool,” Caughey said. 

Gensler will work closely with Wool Impact to translate the inspiring story of NZ’s responsible wool industry into meaningful business metrics. 

These metrics support manufacturers in making informed decisions when sourcing raw goods, generating stronger business paths for growers and supporting the sustainability efforts of the manufacturers.

Wool Impact is planning to announce partnerships with brands supplying Gensler later this year.