New Zealand’s farming story is one increasingly set against backdrop of demand from Asia and not the traditional markets of the UK and EU.
A major supplier of food to Britain since the early 19th century, the rise of China and Asia, with their burgeoning population and wealth, could change the nature of New Zealand’s export trade forever as they clamour for more premium products in coming years.
These themes were explored at last month’s International Federation of Agricultural Journalists (IFAJ) annual congress in Hamilton, which showcased farming in the Waikato region of the north island.
Organised by the New Zealand Guild of Agricultural Journalists and Communicators, speakers ranged from Government Ministers to trade analysts who all stressed the need for the country’s agriculture to have a mixture of markets and buyers requiring premium, not commodity, products.
Its dairy farmers, especially the 85 per cent who supply Fonterra, have seen their milk price halved since 2014, as over-reliance on China to buy its milk powder exposed them to plummeting markets when it exited the market.
It is issues such as this which are leading Fonterra, as well many in the lamb supply chain which floods British supermarket shelves with inexpensive cuts every year, to look at how they can drive a premium into their product offering by using innovative branding or finding supplementary markets.
Ian Proudfoot, global head of agri-business at KPMG in Auckland, said the role of farming in the New Zealand economy could not be overstated.
He said: “We are the only country in the world which relies on its primary industries [agriculture] to build its roads and schools.
“However, we need to be thinking about the future, because as good as we have been in the past, it will not take us to where we want to be in the future.”
With the capacity to provide food for up to 45 million people and 95 per cent of this going for export, many of the farm tours showcased businesses attempting to thrive in an ever-changing global market.
Farms: Westmorland Estate is 122 hectares (300 acres) milking 470 cows; Somerset Farm is 78ha (192 acres) with 300 milking cows; Longridge Farm is 128ha (316 acres) with 500 cows; also have two ‘support farms’ totalling 130ha (321 acres) for heifer rearing and replacements
System: Outdoor grazed with some additional maize and palm kernel
Dairy breed: Jersey and Friesian cattle
Passion for dairying is the same the world over, according to British-born New Zealand dairy farmer Sue Fish.
Farming in eastern Waikato, Sue and husband David have three farms and more than 1,000 cows which form a thriving milking business.
Sue, who was brought up on a dairy farm near Kendal, Cumbria, left the UK in her early 20s and has spent more than 20 years farming in the green, undulating terrain of New Zealand’s north island.
Sue said: “We have a passion for dairy farming and are still learning and trying to do things better than before. It does not matter where you farm, the love for dairying is always there.”
While the struggles of the New Zealand dairy industry have been well-documented, the couple’s fortunes have been somewhat better.
Part of Tatua, a co-operative of 89 farmers, the Fish family is looking at a milk price of about NZ$7/kg (£3.09/kg) of milk solids. This compares to Fonterra’s price of less than NZ$4 (£1.76).
Sue said: “If you are a Fonterra farmer, it has been a dire time. Contract milkers and young guys are really feeling it and are struggling and, while things are slowly improving, it has been a tough time for many. Like all farmers though, we are pretty resilient.”
With Tatua producing added value products, such as cream, particularly in squirting canisters, and moving into anhydrous milk fat, David and Sue said the company has a good mixture of products in its portfolio and they need the returns.
Recent land acquisitions have pushed up the size of their own farming operation. With land in the Waikato region going for NS$75,000/ha or NZ$30,351/acre (£33,000/ha or £13,380/acre), they face similar pressures to UK farmers when it comes to expansion.
David said: “Anything we do is approached from the point of view of what we did the year before and how we can improve it in such a way to suit the farm. You have to be flexible and adapt to change.”
Business name: Lake Farm Beef
System: 60-cow pedigree beef herd
Business: Gourmet pie company which sells 3,000 pies every two weeks, all from online orders
Farming on the banks of Lake Karapiro to the south east of Hamilton, Colin Brown’s farm is an idyllic place to be in the New Zealand spring.
With 60 cows, Colin’s Lake Farm Beef enterprise is a mixture of high-end genetic breeding and a seemingly British culinary obsession: the humble pie.
Aiming to have an Aberdeen-Angus herd in the top 1 per cent of the breed, he has also developed his gourmet pie business, which uses meat from his animals to provide a thriving commercial side-line.
He said: “I run a farm-to-plate operation, but I am obsessed with cattle breeding. We have a great provenance story we can tell consumers and this is important for me.
“I started with Simmental cattle, but began researching what the best breed was for eating quality, and found Piedmontese were genetically the most tender breed and the healthiest.
“I started crossing Piedmontese with Simmentals and found it gave me a beautiful carcase, but one which grew lean. New Zealand tastes are for something with more marbling and this led me to the Angus which I now cross with the Piedmontese.”
The Angus gave Colin the marbling he wanted, but also spurred on a self-confessed ‘obsession’ with creating a breed which could compete genetically with any other herd in the world.
Despite the genetic attention to detail, the pie business has been a sound venture. With carcases yielding an average of 160kg of meat, 10 per cent is sold as premium steak cuts, with the remainder going into pies.
He said: “New Zealanders are the biggest pie eaters in the world, so we pack every two weeks at a nearby site and sell more than 3,000 pies at a time.”
Retailing at NZ$5.90 (£2.60) a pie, all orders come from online and, while he thought the ‘foodies’ of nearby Hamilton and Auckland would be the main buyers, it turns out retired people looking for familiar products they can pop in the freezer have been the main customers.
System: Grower, packer and shipper of apples and pears, including gala, braeburn and pink lady apples
The rising demand of Asian consumers for fresh fruit will change the markets Sunfruit Orchards focuses on.
With Morrisons, Aldi, Lidl and Tesco traditionally major buyers of apples from the firm, and Europe a major focal point, demand from China presents the company with additional markets to target, especially given Asia’s relative proximity to New Zealand.
Export manager Lesley Whyte said: “We are seeing a shift from the UK and EU where demand for new varieties is concerned and sales to the UK have dropped 6-7 per cent in the past year.
“China is a fantastic market for us, but difficult to access because of cleanliness standards and other protocol.
“Our industry is strong and expanding with new varieties coming in because of Asian demand. More varieties mean more markets and not over-reliance on the UK and EU.”
But the industry has a big challenge in the form of accessing labour, especially as a lot of New Zealanders are not keen on carrying out seasonal jobs, a situation faced by UK vegetable growers and horticulturalists who also struggle to attract home-grown labour.
One of the ways New Zealand tries to get round this is through having a Government-led worker programme for staff from the Pacific islands, something many in the fruit sector see as vital in keeping the industry going.
Lesley said: “Without them, we would not be able to do what we do and it is vital we retain access to this labour pool.”
Business type: Export lamb finisher
System: Buys-in store lambs at 28-31kg and sells them upwards of 45kg
Market: Sells through Ovation which exports a lot to UK; Ovation was preparing to sell 1,200 tonnes of lamb legs to Asda for Christmas trade at the time of visit
Lambs from Rob Taylor’s 230-hectare (568-acre) unit in the Waikato hills make their way to Asda shelves in the UK every year.
Selling through Ovation, Rob focuses purely on finishing store lambs which are, in the main, bought-in for him by an agent.
With a keen eye on meeting weight grades set for him by Ovation, he acknowledged the industry had become more precision-led in recent years.
Rob said: “If you had told me 25 years ago I would be weighing everything with electronic scales, I would have asked you what was wrong with eyes. But things change.
“I work on the fact I will get a NZ$5/kg base rate for my lambs, so I try and pay 43 per cent of the price for my stores, because I know this should provide a margin.”
With a range of Romneys and other breeds making their way on to the farm, lambs are fed some supplementary feed, such as chicory, to make sure they are meeting weight requirements in the correct time.
Ovation business development manager Duncan Evans, who at one time ran the Bernard Matthews poultry plant in Norfolk, said New Zealand sheep farmers embraced a business-led approach to finishing, especially since the end of subsidies in the mid-1980s.
Duncan said: “Farming has become a science. It used to be a lifestyle, but now it is a business, and we have to be aware of what the consumer wants from us as an industry. We are Rob’s customer, so he meets the specification we have set.”