Our second blog on key insights from the New Zealand Agriculture and Climate Change conference is focused around trade and markets. What were the key takeaways for farmers? Have a read below!
The Brussels Effect
Diane Reaich, the
Why is this important to our food producers? Because of the Brussels Effect – the rules that begin in Europe often spread to the rest of the world.
The prosperity of our Food and Fibre sector is fully reliant on the ability to trade and access markets. The prosperity of New Zealand heavily relies on this too. It is therefore such an important insight for farmers to take away that the need for sustainability isn’t going away. This needn’t be a scary thing but understandably the topic of sustainability can be an area that causes apprehension, lack of understanding or knowledge of where to even begin. We talk about sustainability being something that is important for people, planet and profit. The sustainability on farm will directly impact the sustainability of exporting our goods to other countries. This isn’t to say that what farmers are getting paid right now is great, particularly in sheep, but it is to say that in order to be in the best position that we can be to get the best financial returns from our markets, we need to embrace and lean in to navigating what sustainability means for our farming businesses. It will be a requirement for market access now and into the future. We must lean into the opportunity.
Some other key takeaways from Diane’s trade and market observations were:
- If we don’t try and influence how our key markets define sustainability they will set rules that suit their farming and production systems, not ours.
- Their policies and regulations may not align with our national context
- There is a risk that poorly aligned sustainability requirements may cause unjustifiable costs and non-tariff barriers to trade.
- 85% of our goods exports are to markets that require climate change disclosure/reporting.
Jenna Grieve, Head of Sustainability Marketing at Fonterra, spoke to the different stages of the sustainability journey that their customers are at. The way that she described this was something that really stuck out to me as being applicable to where farming businesses are also at with sustainability.
Jenna noted that customers in the supply chain are moving from being compliers and appraisers to drivers and leaders. We are also seeing similar movement on farm. I think that this is a great insight that all the parts of the supply chain, including the farming business, are needing to move towards a greater focus on being drivers and leaders. We really are all moving forward in the same direction. We all face challenges in doing so and we all grapple with what is required of us. However, we are all being asked to head in the same direction.
What is my key takeaway from this? That there are always going to be compliers – those who aren’t worried about sustainability and want to just do what is needed to comply – and that’s okay. We can spend all our time and energy focusing on that, or we could look to where we can make the greatest gains. Where is that? Focusing on rising by lifting others. Leaders and drivers support and help the appraisers, and the leaders support and help the drivers. The impact that can be had by focusing time, energy and resource on the appraisers, drivers and leaders has the ability to make a real difference. Let’s empower that approach.
Neal meets the market
Neal Wallace, a journalist for Farmer’s Weekly, spent six weeks in 2024 visiting our key dairy and red meat export markets. His trip was made possible with grants from Fonterra, Silver Fern Farms, Alliance, Beef+Lamb NZ, NZ Meat Industry Association and Rabobank. Neal’s trip gave him an incredible opportunity to gain insights straight from the horses mouth and to produce his ‘Meeting the Market’ series. You can find all his articles with key insights from his trip here.
Neal spoke at the conference about his key insights from the trip to meet the market. Here are a few that stuck out from his talk, and his article ‘Getting up to speed with a changing global market’. This article is well worth a read too.
Neal emphasises that the quality of New Zealand dairy and meat is unrivalled. Our customers love our product and they want more of it. We have the privilege of a strong reputation built on decades of providing high quality protein to customers across the world.
There is a demand for dairy protein and customers want more of it, however, ‘consumers want assurances that what is good for their health is also good for the planet.’
The world wants our lamb, but it is expensive. Neal highlights that ‘lamb struggles for supermarket space and to be noticed in what is a crowded meat protein space’.
Innovation is happening with meat companies developing new products, but Neal stresses that there is a challenge in ensuring that these new products are affordable as consumers are already finding it hard to afford expensive proteins.
Neal commented that all of his observations were reflective of the fact that the speed at which change is occurring is fast, and that it will only continue to speed up.
Our supply chain has expectations and there’s no getting away from that. As an export-based industry, meeting the expectations of our suppliers is not optional, it is essential. However, customers do recognise and acknowledge that NZ farmers have been doing a lot of the things they are asking of them. But….
It is no longer about saying how good we are, it is about showing how good we are and that we are on the journey of continual improvement. We can’t rest on the fact that we are good, we have to back it up.
Neal states that the big players like McDonalds, Nestlé and Mars Wrigley are really interested in:
- showing continuous reductions in greenhouse gas emissions
- reducing impact on soil and water
- adhering to the highest animal welfare standards
We know that NZ farmers are committed to all of these things – it is just about ensuring that we are capturing the metrics to ensure that our sustainability story is not based on claims but grounded in evidence.
As mentioned above, the world is changing at a rapid pace and it isn’t going to let up. Being export-focused means that we are reliant on the world. What happens in New Zealand is only a tiny part of what impacts our sector. All farmers need to be able to have an international perspective. There is a huge role for meat and milk companies to play here – they need to ensure that farmers are connected to their market and have the opportunity to access information and insights that inform an international perspective.
We have lost a personal connection with the market. Do we know where our meat goes? Do we know where our milk goes? We need to go back to getting some connection between farmers and market, farmers and customers,and farmers and consumers. The industry needs to ensure that farmers are enabled to do this.
It is all well and good to need the data and evidence, but being able to report it is something that needs to be easy for farmers to do. There must be an emphasis on ensuring that getting information to those that need it is able to be done effectively.
One thing I would add when it comes to the purpose of capturing data on-farm is that it isn’t just to satisfy the supply and value chain. Farmers need these insights for their own businesses and the value they can gain from long term data collection has great benefits for a farming business.
There have been a few podcasts produced talking to Neal about the range of insights from his trip. Check them out if you’re keen to hear more from Neal on what he learnt and took away from the experience of meeting the market:
- Rabotalk Growing Our Future – 27 November
- Farmers Weekly In Focus – 11 October – Lessons from Meeting the Market
- REX podcast – 23 October
- Rural Roundup – 29 October
His full catalogue of ‘Meeting the Market’ articles can be found via this link.
Providing the proof
Sustainability data and reporting was another key part of the discussion around the needs of the market and parts of supply and value chains.
Amelia Sharman, Director Sustainability Reporting at XRB, made an important statement that ‘while farmers might not be climate reporting entities, they are IN the value chain of those reporting on climate’. This statement, coupled with Emma Crutchley’s insight that ‘at the end of the day, my farm is a business. I cannot clutch onto the identity as a farmer. I am a business owner’, provides important context as to why data and reporting is an essential consideration for farmers and their businesses.
We have heard more and more about the supply and value chains wanting data, but do we truly understand why? A comment made by Julia Jones made me reflect on this and summarise the justification for what the true purpose of our data is, both on farm and in the supply/value chain…
Amelia added ‘you can’t report if you aren’t doing something’ and she’s so right. I mentioned earlier in the blog that everyone is having to move in the same direction, irrespective of where we sit on the supply and value chain. We all find it hard. We all have challenges. It’s no different when it comes to capturing data and communicating it in effective ways too. It doesn’t mean that it is easy by any means, but it is to say that it is worth it. We don’t have to be perfect, it’s a journey, but we need to lean in to finding ways to capture the data on farm that provides evidence that our actions are having the desired impact.
Unfortunately, the way in which the supply and value chains want data from farmers is providing challenges that many don’t know how to navigate. So where do we go from here? We need to continue to lean in to helping farmers to capture their data, to understand their data, and learn how to effectively communicate their data. We also need to continue to lean in to advocating for reporting systems that serve farm businesses, just as Aiden Gent said:
Your insights on trade and markets for farmers are valuable—what emerging trends do you think will have the most significant impact on agricultural trade in the near future? Regards PTS Terbaik