Speak Meat sheep and beef farm and processing plant visit Primary Production Select Committee briefing 30 April 2015

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1 Speak Meat sheep and beef farm and processing plant visit Primary Production Select Committee briefing 30 April 2015 Proposal Beef + Lamb New Zealand ( B+LNZ representing sheep and beef farmers) and the Meat Industry Association ( MIA representing meat processors and exporters) propose a two-day visit by the Primary Production Select Committee to a meat processor and a sheep and beef farm. This will allow committee members to see for themselves the opportunities and challenges facing the sheep and beef sector, which is New Zealand s second-largest goods exporter ($7.9 billion of exports in 2014) and employs more than 97,000 people. Primary Production Select Committee members will meet with senior industry leaders, including farmers, meat company CEOs, processing managers and staff, and will have the opportunity to network and establish relationships with these key stakeholders. It will also be an opportunity to discuss the opportunities and challenges facing the sector with B+LNZ and MIA leaders. We envisage that the Primary Production Select Committee visit would include: A tour of one sheep and beef farm, outlining relevant environmental, profitability, commercial relationships and other farming issues, and an opportunity for in-depth discussions with sheep and beef farming leaders. A tour of a meat processing plant, outlining relevant innovation, food safety, animal welfare, employment and other issues, and an opportunity for in-depth discussions with meat processing and export leaders. An overview of scientific research and innovation that the sector and the government have jointly funded. Opportunities to hear first-hand about the impact that government policy has across a range of areas including health and safety, environment, immigration, ACC, employment and trade. A possible programme for the visit is annexed to this paper. The sheep and beef sector The sheep and beef sector is New Zealand s second-largest goods export income earner, returning about $7.9 billion in export revenue in That s about 16% of the total value of New Zealand s goods exports, behind only dairy. The total value of the sector is $9.2 billion with employment of over 97,000 New Zealanders both directly and in related services and industries. This makes the sheep and beef sector a hugely significant component of the New Zealand economy. The sector is also important in terms of its geographical size and coverage. Around 8.3 million hectares, or about one-third of New Zealand s total land area, is used for sheep and beef farming activity. This equates to about 76% of New Zealand s pastoral farming land. Sheep and beef farms and processing plants are located throughout the country and support job-creation in rural communities. This has a significant impact on regional economic growth and development. The sheep and beef sector faces both significant opportunities and challenges. Global demand for high quality protein is increasing rapidly and New Zealand has a reputation for the highest standards of food safety and integrity. New Zealand is also seen internationally as having one of the world s most efficient and environmentally benign ruminant livestock industries. The carbon footprint of lamb production in New Zealand has reduced by 22% since 1990 while that of beef has reduced by at least 12%. These improvements have been brought about by

2 improvements in productivity, such that although the sheep flock has reduced from 39.5 million in 2013 to 31 million now, the sector produces about the same amount of product. The sector has also made significant gains in efficient resource use. Much of this has been possible due to significant investment in research and development and innovation. This has enabled the sector to continue to innovate and drive food export and revenue growth over recent years. In 1980 the volume of meat exported per worker was 23 tonnes; in 2013 the volume was 43.2 tonnes of much more valuable product. This is a productivity gain of at least 88%. A typical meat worker now processes 130 sheep a day, compared to 55 in the 1980s. Improving efficiency and effectiveness remains a key on-going priority for the processing and export sector. Similarly, on-farm productivity improvements has seen a 27% increase in the carcass weight of export lambs over the last 15 years. Over the same period, the breeding ewe lamb production (kg of lamb produced per breeding ewe) has also increased by 91%. This reflects a lift in both lambing percentages and lamb weights. About the Speak Meat initiative B+LNZ and MIA have been jointly running the Speak Meat initiative since Our previous activities focused on strengthening our connections with key government departments (primarily MFAT, MPI and DPMC) to help ensure that those departments have a broader and deeper understanding of New Zealand s second-largest goods export sector. The feedback we have received from previous participants has been very positive. Our intention this year is to broaden the Speak Meat initiative to include key select committees, in order to strengthen our connections with those select committees and allow for discussion of particularly significant regulatory and other cross-cutting issues. Our invitation to the Primary Production Select Committee to join us on a Speak Meat visit is the first step of this process.

3 About Us Beef + Lamb New Zealand Beef + Lamb New Zealand (B+LNZ) is the farmer-owned organisation representing New Zealand s sheep and beef farmers. B+LNZ is funded under the Commodities Levies Act 1990 through a levy paid by producers on all cattle and sheep commercially slaughtered in New Zealand. B+LNZ s purpose is to help sheep and beef farmers make informed business decisions and promote their collective interests. B+LNZ's priorities are to invest in research and development that meets the needs of the farmers and the sector, develop farm and farmer capability and deliver knowledge that drives farm performance. B+LNZ actively promotes farmers collective interests through attracting and retaining talent for the sector, supporting the sector's market opportunities, advocating for farmers ability to operate and building the sector's confidence and profile. B+LNZ represents around 12,300 commercial farming businesses, which create around 35,000 jobs in the sheep and beef sector. Around three quarters of pastoral land and just under a third of New Zealand s total land area is used for sheep and beef farming. Current issues: Referendum 2015 Every six years sheep and beef farmers have the opportunity to vote on the existence of an industry good body (currently B+LNZ). As a result, this year B+LNZ will be spending a lot of time and resources communicating with sheep and beef farmers, listening to understand their views on the major challenges facing the sector and gaining an understanding of what they want their industry body to do over the next six years. Health and Safety This is an issue of increasing importance to our sheep and beef farmers. Of course everybody wants people to be safer on farm and there is a recognised need to improve the health and safety culture within the sector. Farms are not just work places though, they are also peoples homes and farming is their way of life. Beef + Lamb New Zealand wants to promote an effective and pragmatic approach to health and safety on farm that takes account of the practicalities of everyday farming life. Farmers will take on new practices if they see that they are common sense and outcome focussed, they are less likely to get on board if they view regulations as being bureaucratic, ill-informed or impractical. We are committed to working with Worksafe and other organisations in the farming sector to develop practical and effective systems that promote better health and safety on farm. Environment Implementation of the National Policy Statement on Freshwater Management (NPS-FM) through regional councils is having an impact on the value of and opportunities for sheep and beef farming businesses. B+LNZ advocates for an equitable approach to the allocation of nutrient discharge rights which treats like land with like and is based on the natural capital of soils and climate. We are opposed to the grandparenting of nutrient discharge rights which rewards higher leaching activities at the expense of lower leaching, more sustainable activities. At the same time we are pragmatic, realising that time is required to allow farming businesses to reduce their environmental impact. We have developed a set of principles that we believe should be applied to limit setting and nutrient allocation decision making to ensure maximum flexibility of land use and encourages economic efficiency while preserving environmental values. We would be happy

4 to share those principles with you and discuss their application to promote an effective and equitable regulatory framework. The Meat Industry Association The Meat Industry Association of New Zealand Incorporated ( MIA ) is a voluntary trade association representing New Zealand meat processors, marketers and exporters. It is an Incorporated Society (owned by members) that represents companies supplying virtually all of New Zealand sheepmeat and beef exports. MIA member companies operate approximately 60 processing plants employing 24,000 people throughout the country. The plants slaughter and process approximately 20.7 million lambs, 4.2 million sheep and 4.6 million cattle and calves each year. Ninety percent of this production is processed into value-added products. Over a million tonnes or 86% of the production is exported to 120 overseas destinations. Our affiliate members add to the depth of expertise available from the membership, with representation throughout the meat supply chain, including road and rail transport, shipping lines, ports, packaging firms, specialist product exporters, research and technology. The Association advocates on behalf of its members and provides advice on economic, trade policy, market access, employment relations, business compliance costs and technical and regulatory issues facing the industry, with a particular focus on: Food safety trends and developments in importing countries Economic and trade aspects of market access to key overseas markets Major public policy proposals that could impact on industry operations Facilitating whole of industry innovation and efficiency enhancing initiatives. The current issues facing the processing and export sector are summaries in the Unlocking Value: Meat Industry Briefing 2014 annexed to this paper and also available at:

5 Speak Meat: Draft Programme Primary Production Select Committee visit to Central Otago Day One Time Location Activity Comments 7.15am Wellington Flight departs Wellington 9.45am Queenstown Flight arrives in Queenstown Queenstown Coach departs to sheep and beef farm in Tarras An introduction will be provided by the B+LNZ and MIA CEOs during the drive, covering subjects including: B+LNZ s and MIA s current programmes B+LNZ s and MIA s aspirations for the sheep and beef sector [NB: This briefing could alternatively be provided at a regular select committee meeting prior to the visit.] Tarras Arrive at sheep and beef farm The group will be met by our farmer host, who will provide an introduction to his farm am Tarras Presentation from scientist This presentation will explain recent research work (co funded by B+LNZ and the government) on pasture growth, and the way that research has been transferred and used on farm through B+LNZ s extension programme pm Tarras Lunch in the woolshed. With invited farmers from around the Tarras area 1pm Tarras Farm tour The farm tour will highlight a number of issues facing sheep and beef farmers in the Central Otago region including: Water storage and use Environmentally sustainable sheep and beef production On farm regulatory issues, including biosecurity and disease management Productivity and profitability improvements B+LNZ s extension programmes Farmer processor relationships 3.30pm Tarras Depart sheep and beef farm 5pm Roxburgh Arrive at accommodation 6pm Roxburgh Drinks and canapés in accommodation restaurant 6.30pm Roxburgh Dinner Featuring remarks from B+LNZ Chairman James Parsons and MIA Chairman Bill Falconer

6 Day Two Time Location Activity Comments 8am Roxburgh Coach departs for Balclutha B+LNZ and MIA commentary on the impacts of the conversion to dairying on meat processing in the south. 9.30am Silver Fern Farms Finegand, Balclutha Meat plant tour Presentation from Silver Fern Farms executive 11.30am SFF Finegand Presentation from SFF executive followed by discussion over lunch 1.15pm Balclutha Depart meat plant 2:15pm Scott Technologies, 630 Kaikorai Valley Road, Dunedin Discussion on automation in the meat industry, Milmeq to be invited to attend 4.15pm Dunedin Arrive at Dunedin airport 5pm Dunedin Flight departs Dunedin for Wellington 6:10pm Wellington Flight arrives in Wellington Insights into meat processing, including: Animal welfare including halal slaughter Innovation and mechanisation in the plant New Zealand regulatory model and the importance of science and risk based regulation Food safety and food security meeting customer and regulatory requirements The importance and value of health and safety Set out the complex environment for meat processors including: Markets for New Zealand red meat and complexity of meeting market demands/maximising carcass value Farmer processor relationships and industry structure Environmental sustainability and initiatives using SFF as an example Innovation and mechanisation in the industry and the role of government/industry collaboration in research Reform of the industry e.g. post mortem inspection reform Farm IQ Innovation and mechanisation in the meat industry and the role of government/industry collaboration in research. NB: None these times or locations have been confirmed at this stage, and all the arrangements are subject to change, based on the preferences of the committee and the availability of industry participants.