On the same day that Agriculture Minister Damien O’Connor said primary sector exports are on track to grow by $1.7 billion on last year, helping underpin NZ’s Covid-19 recovery, AgResearch has posted an article by Dr Trevor Struthbridge, in which he expresses optimism about New Zealand’s agriculture sector.
Dr Struthbridge’s article has been reproduced from Farmers Weekly.
He has written:
Amid all of the disruption and challenges brought on by the COVID-19 crisis, some bright lights have shone through that provide reason for optimism for New Zealand in a post-pandemic world.
One has been the performance of our agriculture sector, which has stoically carried on through the health crisis – ensuring a safe, quality food supply to New Zealanders, and maintaining crucial earnings from our export markets.
Another has been the level of public trust placed in our scientists – particularly in the health sciences – and how those scientists have stepped up to provide the best advice to keep New Zealanders safe and guide our country through this.
In both areas, New Zealand’s world-class expertise has held us in good stead. Indeed, sometimes unlikely crossovers have become possible, such as AgResearch’s support for a government-funded project led by biotech firm Avalia Immunotherapies to start looking at how a COVID-19 vaccine may be secured for New Zealand.
The path ahead is by no means certain, and further global shocks could still be to come. The question now, as we look ahead to how New Zealand may fare post the COVID-19 crisis, is how we best leverage the performance of those farmers and scientists, and what innovations we can make to best position our economy and the outlook for our people.
Therefore, longer-term, a key consideration is how we continue to build resilience into our agricultural sector, and as scientists how we help provide the tools to do that.
As one example, digital agriculture is already well-recognised as a means for farmers to stay competitive. As we emerge from this health crisis, it will be more important than ever to harness these rapidly growing technologies and the vast amount of data they can generate on- and off-farm to optimise production efficiencies and reinforce the quality and provenance of our products.
At AgResearch, we are exploring the potential of some of these digital agriculture tools. They might, for example, interpret the data from on-farm sensors and smart packaging to inform an overseas consumer where exactly a NZ food product came from, when it was produced, how it was produced, that it was safely handled and transported to them, and what impacts it had on the environment – and to directly compare these attributes with other food producers worldwide.
Our work on the microbiome – the micro-organisms that live in soils, plants, animals and the human gut – offers exciting possibilities to design consumer-centric smart food products with unique characteristics that could originate only in New Zealand. By better understanding and harnessing these microbiomes, we can be targeted in developing cutting edge, fit-for-purpose products in food and fibre – created with a lower environmental footprint – that give New Zealand an even greater point of difference.
Consumers more than ever are demanding high ethical standards in food production. That means not just showing that animal wellbeing is a critical priority, but also how we looked after the land it is raised on, how we actively use all the by-products generated during production, and how we uphold the cultural values that New Zealand prides itself on.
The environmental challenges and expectations on farmers are increasing, and the government’s recently announced freshwater reforms including stricter controls on nitrogen pollution are a demonstration of this. In the climate change space, expectations are also changing, and in this area, it is encouraging to see a lot of research to mitigate the effects of agricultural greenhouse gases coming to the fore. At AgResearch, for example, our research has shown we can safely breed lower methane emitting sheep, and that knowledge is now being rolled out to sheep breeders in New Zealand.
AgResearch scientists are also working to better measure quality of life for the animals, and how to keep adding to our welfare practices, investigating opportunities to create a circular bioeconomy for New Zealand, as well as supporting the optimal use of land that helps the farmer make a living while also protecting that land for future generations.
None of these innovations are easy of course. They require significant investments in research, time and money – and close alliances between the industry, science and innovation providers, and the government.
It is heartening, therefore, to see the recently announced government investment to support crown research institutes – and the wider research, science and innovation sector – as we come out of the COVID-19 crisis. In all, $196 million has been set aside for research institutes such as AgResearch to ensure they retain talent and can continue their important research.
For AgResearch, it also means a capital injection of $45 million from government towards a badly-needed new research facility and corporate headquarters in Lincoln, near Christchurch. This facility, to be constructed on the grounds of Lincoln University near the existing AgResearch facilities, will not only provide a modern workspace in which our scientists can produce the best research to support the agriculture sector. It will also mean greater collaboration with the likes of Lincoln University, Canterbury University, and other crown research institutes, so that we are working together towards the same goal of helping New Zealand bounce back from COVID-19.
If we can build on the exceptional performance and response of New Zealand through the health crisis, there is no question we can come out of it stronger and better placed than ever.
In a joint press statement from the Beehive, Mr O’Connor and his primary sector colleagues commented on the Economic Update for the Primary Industries, published today in lieu of the June 2020 edition of the Situation and Outlook for Primary Industries.
MPI expects to include further analysis on the economic impacts of COVID-19 in future publications produced by their Economic Intelligence Unit.
Mr O’Connor said overseas consumers are now more than ever looking for healthy, New Zealand-made food –
“We’ve seen that with the sustained demand for fresh fruit, particularly in Europe and North America and the strong demand for red meat in China,” Damien O’Connor said.
“Our farmers and growers are in a strong position to help us reboot our economy. Along with the sector, the Government is focused on creating more demand, pursuing greater market opportunities to generate higher export returns and growing rural communities with new jobs.
“In lieu of the June 2020 edition of the Situation and Outlook for Primary Industries (SOPI), the Ministry for Primary Industries today released the Economic Update for the Primary Industries, showing for the year-to-date primary industries export revenue is tracking 4.5 per cent ($1.7 billion) higher than the previous year.
- Dairy exports were particularly strong since the start of March, up $512 million (12 per cent) compared to the same time last year.
- Chinese meat imports surged in the second half of 2019. The animal protein shortage, due to the African swine fever outbreak in China, should help support prices and demand over the next year.
- There was a strong start to the season for apple and kiwifruit exporters with revenue up $274 million (18 per cent) on last year since the start of March.
Fisheries Minister Stuart Nash said the Chinese market for rock lobster was significantly affected by COVID-19, but is now showing signs of recovery as seafood markets begin to reopen.
“New Zealand kaimoana enjoys an excellent reputation around the world, built on the hard work of generations of fishing operators. The almost $2 billion in export revenue it brings into the country will be particularly important as we recover from the effects of COVID-19.”
Forestry Minister Shane Jones said that during the level 4 Covid-19 restrictions, forestry and wood processing was not considered an essential service, so the decrease in outputs was in line with what was expected.
“This has been an incredibly challenging time for the sector and there is still considerable volatility in the log export sector, which the Government is closely monitoring. However, I am confident forestry and wood processing figures will improve over the coming months and that this multibillion-dollar sector will play a significant role in the economic recovery”.
Damien O’Connor said the report also provides a snapshot of how Covid-19 disrupted New Zealand’s primary industry exports – including logistics issues and more limited air freight options and demonstrates how the sector and MPI worked together to find ways to operate safely under Covid-19 restrictions.
“We are by no means out of the woods and the next few years are going to be tough on some sectors as importers and consumers re-evaluate their priorities in the wake of COVID-19.
“We are committed to supporting our vital primary sector continue to fetch value and create jobs – including $19.3 million to place 10,000 people into primary sector jobs, $127 million for jobs to help control wilding pines and get populations of wallabies under control and the government’s $110 million worker redeployment package, to create employment for people who have lost their jobs.
“The strength of New Zealand’s primary sector coupled with the success of our health response to COVID-19 gives us a head-start on the world as we get our economy moving again,” Damien O’Connor said.
The full report is available here.
- Fresh fruit exports, including apples, kiwifruit, and avocados, are expected to fare better relative to other sectors thanks to strong global demand.
- Dairy companies had contracted a high percentage of the 2019/20 season’s milk supply and will be able to maintain current season milk prices at high levels, which will support on-farm profitability in the short term.
Looking ahead to 2020/21, the impact of declining dairy export commodity prices and weakness in dairy foodservice and consumer markets globally, will weaken processor profitability and flow on to farm gate returns.
- Meat exports to China were reduced due to COVID-19 but were largely offset by exports to other countries such as the USA. Since the start of lockdown the Chinese market has recovered and overall meat exports are tracking at similar levels to last year.
- Seafood was affected by COVID-19 earlier than other industries, culminating in 68 per cent lower export revenue to China in February, driven mostly by declines in airfreighted rock lobster. The Chinese market is slowly recovering and seafood markets are beginning to re-open, which should alleviate export constraints at least for live rock lobster.
- Wool prices are likely to remain subdued for at least the next year due to lower demand for wool in China – a flow-on effect of a global recession.
- Forestry has been able to ramp up since New Zealand moved to Alert Level 3 in late April, following a total harvest volume in April of just 377 thousand cubic metres, 87 per cent down from the same period in 2019. The good news is that the latest market reports show higher log prices in China and lower inventories at Chinese ports.
MPI is starting to get a picture of the impacts of COVID-19 and beginning to plan the road to recovery for the primary sector.
Sources: AgResearch and the Government.