By Guy Trafford
A recently released report commissioned by Beef and Lamb NZ on the “Future of Meat” is very timely.
Much of the report focuses on the “rise of alternative proteins” and the threat these products may have to the New Zealand meat industry. This topic is often raised from board room level to farmer meetings to around the kitchen tables.
Attitudes from meat producers (and consumers) vary but generally range from “it’s not an issue and consumers will always want the real thing” to “we really have a looming problem here which may undermine many of our markets”.
The stated motivation of the various companies that are pursuing the alternative proteins is to reduce the environmental impact of conventional food production systems and to feed an increasing world population. These are laudable goals, however, once the technology reaches the hands of the fast food chains among others then you can rest assured they will use any means available to increase their market share.
And, if livestock farmers think they are under scrutiny at present then wait until we have companies such as “McCampbell’s” (fictitious) determined to compete with McDonald’s in the fast food business and quite happy to use whatever means available and driven not only by profit but also philosophical leanings to save the planet.
Currently pressure organisations like Peta and SAFE are considered outside of the mainstream of public opinion and while they cannot be discounted are more at the fringes. However, I get nervous for the meat industry when I see Steve Jobs and Richard Branson among others putting their wealth into investing in “Clean Meat”, and Tyson foods into “Beyond Meat” . Both of these are plant based projects but the genie is out of the bottle for synthetic meats also, although still a work in progress getting the costs down.
If producers think this is just a passing phase that may pick up a small segment and that the real deal will always find a market with discerning customers, think again. PETA rapidly got rid of the fur trade with very clever portrayals of cruel practices.
Closer to home, the synthetic fibre industries have turned crossbred wool into a by-product barely able to pay for harvesting costs and they didn’t have to attack the wool industry to do this.
So when issues can be raised around animal welfare and environmental issues the gloves will really come off.
So how may this pan out?
The first industry to feel pressure will be the beef industry, approximately 213,000 tonnes of New Zealand beef goes into the US market. The bulk of this in the form of grinding beef to blend with the fatter US feedlot product. Even product that does not go to the US has a large percentage end up as hamburger patties.
This is the area that the alternative proteins are targeting as providing profitable outlets and likely to be in direct competition with fast food outlets.
Even if New Zealand processors shift as much product as possible into the more lucrative prime cuts area there is likely to always remain a large percentage of product ending up as grinding beef. This is especially so when much of New Zealand’s beef export is sourced from the dairy industry either as bull beef or cull cow, product ideal for the grinding beef trade.
Don’t think that alternative proteins will stop at patties as the technology develops it’s only time before ‘fine cuts’ are also on the menu.
Depending upon how much negative publicity is aimed at the sheep meat industry there may be a hiatus for them, due to the higher value of sheep meat cuts. However, any negative publicity against livestock systems is likely to add to reduced consumer demand.
Will dairy be affected? Not immediately. However, if the swing to plant based proteins grows then land use is likely to follow and currently the trend of ‘highest and best’ land use for much of New Zealand’s land being dairy may see a swing towards plant based production. Dairy plants require a critical mass to keep the stainless steel functioning and a drop off in supply is likely to be felt.
So what do our livestock industries need to do? New Zealand is fortunate in that much of the world still believe that we are a clean green oasis in a world of corporate and factory farms where animals are abused and production is driven by the dollar.
We need to match this perception with reality and let’s not kid ourselves we have a way to go to get to this point.
If critics want to dig down they can find plenty of examples of practices within all of our livestock systems which at best are not savoury.
Animals and the environment need to come to the forefront of our thinking and practices if livestock farmers want to compete in a world determined to get rid of them.
Let the critics focus on the big factory farms that dominate the scene particularly in the US, be it pork, beef or chicken and let us provide a real point of difference so that those consumers who wish to purchase the real product can do so and feel comfortable doing so knowing that the product is produced with ethical and sustainable processes in to the fore.
41 Comments
Good Article. Distrust in the processed food industry is rising at an exponential rate, coupled with an interest in real food. Meat is not free from this. What the hell is a 'Chicken Nugget'. I distrust the burger meat patty, and even more would distrust a pretending meat patty. Given the performance of the food processing industry, you can have no idea of what you are actually eating, and what compromises have been made to produce it. (And what now happens to milk before you get it, when once it was so simple?)
The way forward I believe is to increase the real food aspect of what we do, real cattle, eating real vegetation, processing it minimally and then direct to the person who eats it. No nuclear lime green paddocks, grazed by cattle bred for volume and not taste.
There is a market for this.
Things do change just takes time. April is the month MacDonalds USA stop using frozen beef in their burgers all meat will sourced local and fresh. They are not the only one doing it, Big Five, In and Out, Burger King all following suit. These companies will meet consumer demand and the young are interested in meat and milk alternatives. My children hardly ever drink milk , min meat, they were all raised on a farm with home kill every night, so what are town children doing?
We need some leadership, a long term plan.
If you look at Landcorps latest results it's sober reading, a company with over a billion dollars of investment in farming loses 6m. Thats a company with 144 farms, 700 employees, 530,000 sheep, 78,000 dairy cows, 78,000 beef cows and 95,000 deer, running 226,000 hectares( over 550,000 acres)
Landcorp hasn't paid a dividend to the government since 2014, how would the company do in the real world?
We need to stop the spread of corporates, they will not be the future consumers want, they will be more bulk commodity companies run by accountants.
We need to stop the asset bubbles and reduce costs, base capital values on returns not tax free capital gains, encourage young back to farming and reward innovation. Then there will be a future.
Good to see Andrew that MacDonalds et al are reacting to consumer wants. And it's a real sign, even proof, that consumers are waking up and changing their expectations of suppliers.
Yes we do need some leadership, and the farming corporates are not the innovators to be sure.
if you do some basic numbers Landcorp are really failing, those 530,000 sheep are having lambs worth $100-140 a head, they probably average 130% lambing, the 78,000 beef cattle are also making record margins, yesterday good weaner steers made $1150. 95,000 deer also record prices. Its only the dairy, even then they should be breaking even at worst.
I would hazard guess, they are production orientated with complex high risk systems prone to failure in adverse events or even minor market change. They have top farm managers but layers of inefficient staff above on excellent wages trying to find something to justify salaries.
They could solve the problem by firing everyone else and let the mangers do their stuff.
It's not only meat. We may well be on the cusp of the greatest revolution in food production in centuries. Take Perfect Day, producers of animal-free dairy. Company data has asserted the product uses 98%less water; 91% less land; 84% less energy; and has 65% less greenhouse gas emission. No cholesterol, no lactose, no antibiotics, no hormones. Product has a long shelf-life and can be used to make cheese, yoghurt, cream and 'milk' powder. Why wouldn't any responsible consumer want this? And not only consumers. In Series A fund-raising a couple of weeks ago, the funding round was led by Temasek, the $US275 billion dollar Singaporean sovereign wealth fund.
There needs to be a matching revolution in New Zealand agriculture if it is to have any kind of reputable, sustainable, profitable future. These messages need to be hammered home unrelentingly. Undifferentiated, environmentally irresponsible, commodity meats and dairy will be priced to the floor. And deservedly so. A strategy based on selling to China - in effect willing a new colonial relationship for our commodities, to cover over our lack of vision and action - is no kind of national lifeboat.
There would assuredly be plenty to dream about in that future: farming in its various guises supplies around 40% of total exports. So the list of essentials, purchased with the receipts and imported, goes south at a rapid clip. Wishing for subsistence living means many sacrifices.
Let's do it! .... for the Children.....
I am amused when people want a 'premium' product are aren't prepared to pay a 'premium' price for it.
When meat is cheaper and never contaminated with animal faces. I assume you mean animal faeces? If so where do you get your meat from for it to be contaminated by animal faeces?
Interesting statement on Perfect Day website: "The company imagines its products ultimately as a complement to cow based milk that takes some of the stress away from the factory farming system, rather than trying to replace dairy completely. 'We're another option that we think people are hungry for that just isn't there today'"
http://www.perfectdayfoods.com/#ourprocess
The 98% less water claims etc are based on US based farming systems.
Price alignment with beef is on its way, as with Impossible Foods' burgers. (See https://www.impossiblefoods.com/ )
(From Bloomberg, 20 Oct 2017): quoting Chief Financial Officer David Lee… 'he expects the product to be in retail grocery stores in coming years, and eventually at prices competitive with commodity beef.'
Their burger (quoted from Impossible Foods - so US data): ‘uses 75% less water, generates 87% less greenhouse gases, requires 95% less land and 100% fewer cows. It delivers the same protein and iron as a burger made from a cow’.
Their argument (quoted too from Impossible Foods): ‘According to livestock researchers, animal agriculture uses 30% of all land, over 25% of all freshwater on Earth, and creates as much greenhouse gas emissions as all of the world’s cars, trucks, trains, ships, and airplanes combined.’
Credibility? Patrick O. Brown is the CEO and Founder of Impossible Foods, former Professor Emeritus at the Stanford University School of Medicine, and Co-founder of the Public Library of Science (PLOS). Brown was elected to the United States National Academy of Sciences and the National Academy of Medicine, and is a Fellow of the American Association for the Advancement of Science. He received the American Cancer Society's 2006 Medal of Honor for Basic Research.
These, like Perfect Day, are new businesses. But the products, the backers and founders, the methods of production and their environmental arguments are on the incoming tide. Thus the Singapore sovereign wealth fund backing Perfect Day.
I take the point made regarding ownership by ‘elites’. The fact is, enormous amounts of money are looking for a home. Together just three companies - Apple, Google and Microsoft – have a cash pile of some$NZ650bn. And alternative food production is pinging loudly on investor radar.
New Zealand will never be able to out-spend this competition. To stay in any profitable future, we have out-think it.
I can't comment on N leaching.
You will see it in Fish first. GM Canola with long chain Omega-3 DHA and EPA, already approved in NZ, and no need for fancy marketing.
Farm waste can be affected greatly with new systems, just got to get away from production targets.
https://geneticliteracyproject.org/2018/02/28/nuseeds-gmo-canola-set-be…
Casual Observer, looking at the website statement you quote, I think the web messaging has been renewed in the last couple of months, perhaps to do with the funding round. What investor wouldn't feel safe with this? Obvious upside, no worrying 'change the world' ideas. And for the company, the priority is to marshal its resources.
Workingman can you prove that these lab foods are going to be reputable and sustainable? This is all about GE foods being forced upon populations with insufficient science to prove they are safe for consumption and safe for the environment.
Do you really think that spraying billions upon billions of litres of chemicals into the environment is good for it? Because that is what is going to happen under a plant based lab foods type of diet.
Why should a company like Perfect Day be able to call their products "Dairy"? Why not call their liquid drink "yeast and sugar"? after all that is what it is.
notaneconomist, I'm not attempting to prove things. I am pointing at some of the things I see happening that are highly likely to impact substantial parts of our national economy.
I say 'highly likely' because, whether any of us likes it ,or whether these developments ultimately prove more harmful than beneficial (and there's an almost infinite spectrum on which these outcomes can be judged) they are being created within and carried by an extending and accelerating global social consciousness (which may be bananas in all sorts of issues, but there it is) and a formidably well-heeled financial base (which is, of course, capable of all kinds of ruinous deployments).
What I seek is far greater consciousness of the need - as I see it - for New Zealand to protect and advance its crucial factors of competitive advantage. Your questions, like others, are to the point. Why is it acceptable to call these products meat or dairy? What will the ultimate environmental outcomes be? I have no idea. I am simply looking at emerging realities, as impartially as I'm able - although I do have strong local environmental concerns - and saying we need to be prepared for them. These innovations - like many others around us - will be, I judge, as consequential as the coming of the railways.
I come back to my points, voiced for some time, that I don't think selling poorly-differentiated food commodities to China, or hoping that the new foods revolution will go away, are good medium- or long-term national strategies.
Why are these Lab Meats allowed to use the word "Meat" surely under consumer law the word "MEAT" is misleading. It is not meat it is plants and therefore should be called plant patties or whatever it is they are selling......I don't care whether it tastes like chicken, beef or whatever if it is a plant that has been adapted to mimic something then it is not chicken, beef or other known meat.
I'm wondering who is funding Peta and SAFE? DO they receive any money from GE seed manufacturers like Monsanto? The animal welfare and environmentalists seem to be obtaining huge funding from somewhere to push a bigger agenda of a GE food supply. There will come a day when farmers will have to pay annual fees to grow the GE grasses because they will overtake the other species and NZ farmers are from prepared for this.
One issue that NZ needs to overcome is the exact definition of what clean and green actually is because currently clean and green means whatever the user thinks it means. That is why we have the Green Political Party pushing for environmental taxes like carbon tax emmissions.......in the meantime thousands of toxic chemicals and heavy metal contaminants like mercury are causing cancers and other environmental diseases and no one blinks an eye.......and people are eating processed crap that is sold as food and the environmental, human and animal impacts are often not measured or totally ignored - blindness!
In areas like East Otago thousand of hectares of beautiful healthy live stock hill country is being planted in pine trees by Ngai Tahu and other corporates so there goes a thousands of tonnes of annual meat production gone, and not a mention of how the landscape will be altered for years to come........All the creeks that feed into the various rivers etc will be affected by these plantings and yet this is seen as environmentally and carbon friendly......
One of the biggest changes in forestry has happened in the past few years, you can now sell any species of tree, the Asian countries are not so fussy, so grow some gums/Poplar or cypress because the market has changed, so change your risk profile. Pine canker has made Radiata extinct in California. the pine beetle is finishing any thing else off.
Corporates almost always do the wrong thing, just a few years ago Ngai Tahu were pulling out pines in Nth Canterbury to convert to dairy with irrigation. Fire the accountants guys.
Those pines Ngai Tahu took out in Canterbury had carbon costs attached as they were pre 1989.....that is why they have purchased in East Otago and are planting as it avoids carbon tax costs. I don't so much blame the corporates but blame the government and administrators for their stupidity on such a scheme on carbon....all the idiots who push and support this nonsense are creating other issues.
The outlook for forestry is good and prices are up due to currency change more than anything.....we have small plantations of pine and other that could be logged now due to the demand.......a couple of years time however it could be worth a lot more........
Ngai Tahu would of least had their seedlings on order.....interestingly they were going to plant over the next 3 years but it seems the project will be all done this year........unfortunately the boundary our land......so will plant right up to the boundary.....all the extra insurance costs that we incurr annoy me!
I would be careful if I was them. The lumber dispute between Canada and the USA has added about $6000 a house in extra lumber costs in USA. That won't last forever and trees are in the ground a long time and MPI are not successful at keeping pests out. One beetle gets in and Radiata have a problem, one bit of pitch pine canker and it's all over. Spread your risk, Juken are planting Gums and they are not fools.
.uummmmmmmmmmm whats your 'real' meat made of? Ahhh plants.
Had a beer lately...or wine.. some yoghurt? Naaa..cant do that, its just lab food.
I'll be happier eating this new food than I would the processed rubbish currently on the local supermarket shelf. And some of us realize that unless we want to be cooked alive, we have to change.
Whats you solution...do nothing?
Whist the green get 'bagged' for lack of financial or business nous, it seems to me they are on the button with the direction of NZ ag. What do you think might have greater value by 2025? Organic produce ....or milk powder made from palm kurnel and polluted waterways?
Green Policy -
Growing the Organic Sector
Promote the target of half of New Zealand's production becoming certified organic by 2025.
Short-term loans and guarantees to producers making the switch to organics.
Redirect funding for research into the development of organic systems, design and practice.
Promote and encourage the establishment of educational opportunities in organic production.
A good piece with enlightening comment; this headwind for NZ Ag isn’t going to die, and burying our heads in the sand won’t protect us. The Greens might be on the right track in generously encouraging farmers to adapt to a new reality, however AJ mentioned, that minus PK, our farming systems are virtually organic anyway.
Having been subjected to the corporate PR and spin from Fonterra for the last eighteen years, I fear there isn’t the leadership to front foot this new reality, and worse farmers aren’t smart enough to retain any value out of the rebranding opportunity.
Omnologo
We are going to have to make a decision soon, just how disruptive is this technology going to be?
The Iphone is coming up ten years old and although the phone is amazing it's the apps that are the killers, who needs a radio, calculator, guitar tuner, camera, gps, stereo, home phone, fax and on and on.
Most cooking oils are moving to GM Canola with omega 9, I don't know how good it will be for us but the reality is it's here and it's happening fast. In the mean time, USA farm incomes are back 73 billion of just over half. The USA can no longer survive in the grain industry without restructure, just as Cannon and Nikon shares have dropped %50 in the last ten years when the share market has gone through the roof.
We cannot afford to get on the wrong side of disruptive technology.
The reality is the GMO is working away never stopping, if we are not eating the stuff it's going to our animals.
In Canada they now grow Soy in Manitoba, Sask and Alberta, something that used to be a crop on the south.
Wheat produces about 6 tonnes a hectare, Soy production goes to 12 tonnes, but now we have 70-90 day maize which will produce 20 tonnes hectare in Manitoba, who would have believed that twenty years ago or even 10.
When the get a GM grass that performs in the tropics like our ryegrass its another game changer.
Lets not kid ourselves it's going to be plain sailing
http://www.oregonlive.com/business/index.ssf/2017/01/grass_seed_industr…
but at the same time things are moving along faster and faster as Tech improves. My friend is an engineer in Europe he talks about the disruption for Technology on his industry he's talking 85,000 engineering job losses especially chemical in the next ten years.
https://www.nytimes.com/2017/06/22/automobiles/wheels/driverless-cars-b…
I don't think any of us will be immune to the forces of change, but whats happening in Russia is an eye opener, from almost nothing to 50 million tonnes of animal feed. Biggest grain exporter in the world, self sufficiency in ten years is the aim of the dairy and meat industries and they won't stop there. Already Russia can get wheat to the Med at half the price the USA can.
http://www.tropseeds.com/varieties/
We are stuck like deer in the headlights.
Sure Africa needs more food especially dairy but they have no money.
“In the coming years we expect milk production within Europe to shift to the north and west, toward areas with cheaper feed sources, i.e. grass,” Rabobank said. “The Dutch dairy sector will face additional changes as a substantial phosphate reduction needs to be achieved, resulting in downsizing the herd.”
http://www.world-grain.com/articles/news_home/Features/2018/03/EU_feed_…{63674153-745A-4BFB-B195-E09FD6706A17}
It's not just a leadership thing, farmers themselves need to lead the change. You start talking at Fonterra meetings about grass fed premiums and it's not the top table saying no its the rank and file 'but we are a co-operative and we all should get the same price!'. Yet they are quite happy for differential payments for organic, A2,Stolle, Colostrum, winter milk etc. No GMO is another marketing opportunity suppliers don't want to see rewarded.
I attended a meeting a few years ago, and enquired about what Fonterra were doing to leverage nutrition from milk sourced from grass. The director present harped on about promoting our clean green image, and Miles Hurrell dismissed the concept as not being scientifically valid! Much the same as organic and a2.
I don't think the top table have any idea, but would say that it reflects the ignorance of the shareholder base.
President Vladimir Putin said during his speech to the Russian Federal Assembly that exports of food to international markets should exceed imports within as little as four years. The president urged an increase in exports of meat, and the degree of self-sufficiency in beef, dairy products and vegetables. Last year, exports of meat from Russia reached 237,000 tons, representing a 42 percent increase.
https://www.rt.com/business/420849-russia-wheat-record-harvest-exports/
Stock pick. http://www.rockphosphate.co.nz/ . No if, but when.
If producer prices continue to decelerate, that will leave bare any reason to expect consumer prices will behave, too. That’s because falling producer prices might propose a re-evaluation particularly in commodity markets of this whole reflation, globally synchronized boom idea from the start. After all, that’s why many commodities had rocketed off the February 2016 bottom, in anticipation of a complete turn in global growth, especially inside China. The lack of follow through into consumer prices, businesses being unable to pass along that first wave of input cost increases, was always a bad sign for these economic reasons.
http://www.alhambrapartners.com/2018/03/09/china-prices-include-lots-of…
But the highly processed nature of Quorn and other plant “meats” may yet be a stumbling block.
https://www.theguardian.com/lifeandstyle/2018/feb/12/quorn-revolution-r…
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