Field Notes Issue 719 - KPMG New Zealand (2024)

In Aotearoa…

Fonterra has increased its forecast Farmgate Milk Price midpoint for the 2024/25 season by 50 cents, with a revised range of $7.75-$9.25 per kgMS. Farmers will also receive more money for their milk, earlier in the season with a change in the Advance Rate payment schedule. This uplift is due to improved GDT prices and the co-operative’s strong balance sheet.

The University of Waikato has launched Tupu Rangatahi – Tupu Ahuwhenua, a three-year Māori agribusiness course. The program, initiated by the New Zealand Institute of Primary Industry Management and supported by companies such as Fonterra, Miraka, and Rabobank, will deliver tailored agribusiness modules, field trips, and events that incorporate a Māori worldview to develop young leaders in the sector.

The New Zealand Environmental Protection Authority has issued a red alert for chlorthal-dimethyl (DCPA), a herbicide commonly used on onion crops, forest nurseries, and ornamental plants. The order comes after the United States Environmental Protection Agency issued an emergency notice to stop all use or sale of products containing DCPA, citing serious health risks to unborn children.

Nestlé’s global procurement category lead for dairy has challenged New Zealand dairy farmers claim to have the lowest global carbon footprint. Speaking at the New Zealand Institute of Primary Industries conference, Bruno Spire highlighted that European and North American farmers have more opportunities to lower their emissions and stressed the need for New Zealand farmers to make greater progress in meeting sustainability targets.

In international news…

Despite government intervention, labour strikes in Canada's rail industry could continue to disrupt the loading of bulk grain ships during the harvest period. There are over 20 idle bulk vessels at the Port of Vancouver, affecting around 640,000 metric tonnes of canola and 430,000 metric tonnes of wheat, posing the risk of contract cancellations and significant demurrage expenses.

The Republic of China has provided drought relief aid to Zimbabwe, donating 20 million RMB (NZ $4.5 million) to address food shortages. China has already sent 1760 metric tonnes of rice and has committed to improving Zimbabwe's agricultural industrialisation by constructing a dam and completing various irrigation projects.

American multinational company, Starbucks has partnered with Japanese brewery Kirishima Shuzo to create a retail space powered by sweet potatoes. The establishment will be entirely powered by electricity generated from shochu brewing byproducts and will use the thermal discharge from the distillation process for winter heating.

• Fonterra lifts forecast milk price mid-point, advance rate
• Māori agribusiness programme launched
• EPA issues red alert for herbicide
• Nestlé cautions NZ dairy farmers to improve efficiency
• Canada rail shutdown may still delay western grain exports
• China extends US$7 million food assistance to drought-hit Zimbabwe
• Starbucks partners with Japanese shochu brewery for retail space powered by sweet potatoes

NASA awards “space chefs” for food-making innovations[20 August, Cyber News]

The NASA-led Deep Space Food Challenge, which has provided grants of over US $1 million (NZ $1.6 million), aims to develop sustainable space food technologies, including greenhouses, gas fermentation, and fungal-based foods, to ensure food security for prolonged space missions. In collaboration with the Canadian Space Agency, the challenge attracted over 300 teams from 32 countries, with the US $750,000 (NZ $1.2 million) grand prize being won by Interstellar Lab of Merritt Island, Florida. Their winning project involves a self-sustaining food production system that utilises autonomous phytotrons, which are environment-controlled greenhouses, to grow fresh vegetables, microgreens, and insects for essential nutrients. Original full article here

Tags: Space missions, food security, NASA challenge

China targets EU cheese and milk in anti-subsidy investigation [22 August, Euractiv]

China has launched an anti-subsidy investigation into dairy products imported from the European Union (EU), targeting cheese, milk, and cream. This move intensifies trade tensions between China and the EU, prompted by claims from the Chinese dairy industry that subsidies under the EU's Common Agricultural Policy are harming Chinese producers. The EU's dairy industry is concerned about the potential impact of this investigation as dairy exports represent 12%, or €1.76 billion (NZ $3.17 billion) of the EU’s total export value to China. This investigation follows previous trade disputes such as the EU's tariffs on Chinese electric cars and China's anti-dumping investigation into European alcohol spirit drinks. Original full article here

Tags: dairy, subsidies, EU, China, trade disputes

Tomato seed imports restricted after virus news[23 August, Farmers Weekly]

Biosecurity New Zealand has placed import restrictions on tomato seeds from Australia following the detection of the brown rugose fruit virus in South Australian tomatoes. The import of tomato seeds from Australia, except from Queensland, has been temporarily suspended, and all imported seeds will now require virus testing before entering New Zealand. While the virus does not affect human health, it can cause yellowing and deformity in tomatoes, capsic*ms, and chilies. Although there is no evidence of the virus in New Zealand, authorities are closely monitoring the situation and asking growers to remain vigilant and report any issues to the pests and diseases hotline. Original full article here

Tags: brown rugose, fruit virus, biosecurity, tomato inputs, virus testing

Dairy company fined $420,000 for making false claims about origin of products [26 August, Stuff]

A New Zealand dairy company, Milkio Foods Limited, has been fined NZ $420,000 for falsely claiming its products were "100% Pure New Zealand" while importing the core ingredient from India. The company pleaded guilty to 15 breaches of the Fair Trading Act, including misrepresenting the origin of the butter used in its ghee products and unauthorised use of the FernMark logo. The Ministry of Primary Industries referred the case to the Commerce Commission, where the judge highlighted the potential damage to the New Zealand dairy industry and its global reputation, while emphasising the importance of prosecuting such cases to protect New Zealand's brand. Original full article here

Tags: Fair Trading Act, product of origin, reputation damage, FernMark logo

Research estimates ‘shadow wage’ on Irish dairy farms [19 August, Farmers Weekly]

Research conducted by Teagasc and the University of Galway estimates the shadow wage, or economic value of unpaid family labour and the value it adds to farm output, on Irish family dairy farms, to be €30.97/hour (NZ $55.77). The study found a correlation between farm size and the shadow wage, with the shadow wage standing at €12.17/hr (NZ $21.91) for smaller farms and €43.94/hr (NZ $79.12) for larger farms. The research indicated that farm operators with a formal agricultural education supported higher farm incomes, with the average shadow wage of those with higher education almost double. The study recommends policy incentives to encourage formal agricultural education to improve overall farm profitability as well as increasing financial support for smaller farms to hire extra labour during busy periods. Original full article here

Tags: shadow wages, unpaid family labour, farm incomes, policy incentives