Look at retailers not producers

03/08/2011

Federated Farmers and Fonterra are both pleased that the Commerce Commission has decided it has no basis for a price control inquiry into milk.

However, it’s not ruling out a further inquiry  into how Fonterra sets the price it pays farmers and what it charges other processors.

Sue Chetwin from Consumer is calling for a milk commissioner and  Labour and Green MPs want the Commerce select committee to launch another inquiry.

If they’re doing that, should look at the whole supply chain.

The Commerce Commission report said there was enough retail competition between  two major supermarket chains, dairies, service stations and other retailers.

I’m not so sure about that. Almost everything is more expensive at dairies, service stations and other small retailers. Those are the places you go for emergency supplies, not normal grocery shopping.

That leaves the supermarket duopoly.

It is difficult comparing prices here with those overseas because of the exchange rate and different taxes, but our observation at restaurants and supermarket during our recent trip to the USA and Canada was that food there seemed to be cheaper than it is here.

Some prices in a Walmart in Canada were: beef mince $9.50/kg; T bone $16.22; sirloin $11.10; stir fry $15.06; roast beef $12.06; bacon $10.44; pork tenderloin $10.96; pork chops $8.80.

I don’t have local comparison for these, but a  New Zealand boneless leg  lamb was selling for $14.92/kg  at Walmart, I saw it priced at $29.99/kg at a New World  here yesterday.

A frozen leg of New Zealand lamb was $13.62/kg.

It looked good but beside it were Walmart’s own brand of frozen loin chops selling for $20/kg. The bag was full of ice and had they been a tenth the price we might have contemplated buying them for dog meat.

Eggs were $2.98/dozen; skim milk cost $1.38/litre, full cream milk was $2.77/litre..

Cheddar cheese cost $13.43/kg which, taking the exchange rate into account, wouldn’t be much different form here.

The only thing that was far more expensive – and to our admittedly biased taste buds, not nearly as nice – was ice cream. A small cone cost $5.

Prices recorded at one supermarket and the gut reaction from purchases at other supermarkets and restaurants aren’t much to build a case on.

But our overwhelming impression was that food was cheaper and we wondered how much that had to do with greater competition between supermarkets there in contrast to the duopoly which operates here.

If there’s to be an investigation into food prices it needs to be a thorough one which includes retailers not just producers and processors.


No need for complusion in labelling

03/12/2010

The announcement that sow crates will be phased out has led to calls for country of origin labelling to differentiate local produced pork products from imports.

Supermarkets and butcheries could and should provide country of origin labelling as a service to their customers. It could also help with marketing but there is no need for compulsion.

If New Zealand producers label their produce as New Zealand produce they can then use the opportunity to differentiate it from pork products from overseas competitors who continue to use stalls.

Customers will be able to work out for themselves that if it isn’t branded as New Zealand produce it will be from somewhere else and make their decision on which bacon, ham or pork to purchase with that knowledge.


Will you pay more for pork?

02/12/2010

The use of sow stalls is to be phased out by the end of 2015.

The Animal Welfare (Pigs) Code of Welfare 2010 which was released by Agriculture Minister David Carter yesterday limits the practice of sow stalls to four weeks after mating in 2012, and prohibits it altogether by the end of 2015.

A five-year time frame on phasing out sow stalls will allow New Zealand farmers to change their production systems and train staff in new management skills so that the long-term sustainability of our pig industry is not put at risk.

The new code also places new limits on the use of farrowing crates.

While the National Animal Welfare Advisory Committee believes that the use of farrowing crates should also be phased out, it recognises this can only happen when alternative management systems are in place.

These must take the welfare of sows and piglets into account, and must also allow our pork producers to remain competitive.

Remaining competitive is important for both the industry and animal welfare.

Nothing will be gained for animals and a lot will be lost from the economy if New Zealand producers go out of business and locally produced pork products are replaced by imports from countries which still allow crates.

Phil Clarke posts on  predictions of pork shortages in Britain from the National Pig Association:

A survey of member states suggests production will fall by 4-5% a year to 2013 as producers battle against problems including low prices, high feed costs, the European stalls ban, currency volatility and nervousness of banks.

At least a third of European producers will have difficulty converting from stalls to loose-housing by 2012; something that typically costs over £400 per sow place, the NPA says. It says the 1999 stalls ban in the UK caused the national herd to almost halve during the following ten years.

Public opposition is one of the reason for the phasing out of stalls.

If this method of raising pigs is cruel then the public is right. I hope they are prepared for the drop in supply and increase in price which will almost certainly follow the change in production methods.


Let them eat free range cake

19/05/2009

One of the silliest statements in the story about the alleged ill treatment of pigs came from Mike King on Breakfst yesterday .

He said he didn’t think people would mind  paying more for free range pork (it’s towards the end of the clip at about 5:40).

You’ve got that wrong Mike. Those who can afford to, may choose to pay more for their food, but some who can won’t and many people can’t.

Expense is no excuse for not treating animals humanely. If current practices are cruel they must be changed but no-one should fool themselves that this won’t add costs to production which will increase the price and put pork products out of the range of many budgets.

The pig farm which was filmed has been identified  and will be inspected. If it complies with the law, we need to ask is the law adequate, does it need changing and should animal welfare requriements be improved?

The decision on whether changes ought to be made must be based on fact because so far we’ve had a pretty one-sided and emotional view of the issue. There is another and a Kiwiblog reader explains the difference between dry sow stalls and farrowing crates. S/he also says:

The other thing I would note is the TVNZ piece. Two points about Mike King’s “disgust”. Firstly – yes the pigs were screaming. Why? It was the middle of the night or early morning. The pigs had been left alone and were suddenly woken by human activity. What does this usually mean for them? Quite simply – feeding time. Free range pigs have EXACTLY the same reaction. If King and his companions ahd fed the pigs the screaming would have stopped. Guarantee it. Secondly – the chewing of bars and frothing of the mouth? Again, it is completely standard across all pigs. They chew things. Free range pigs it’ll be tree branches etc, for pigs in stalls or crates it’ll be bars. And yes, they froth. Christ, you should see them when they mate!

If pig farming in New Zealand breaches animal welfare standards it will have to change. But if higher – and more expensive – standards are imposed on the industry here nothing will be achieved if imported products from countries with lower, and cheaper, standards are permitted to compete with local produce.

Stopping imports or imposing higher standards on them is fraught with politics. Anything we require of imports must be based on facts or we’ll open ourselves up to charges of imposing non tariff barriers.

That won’t help the New Zealand pork industry and it will harm our efforts to free up world trade.

UPDATE: A media release from David Carter says MAF is inspecting the farm at the centre of the dispute.


Pigs in Muckraking – Updated & Updated again

18/05/2009

When a television show gives only one side of a story, I wonder what the other side would say.

I don’t know enough to comment on the issues of pig farming which were raised in last night’s Sunday programme but Farmgirl is better informed and brings some balance to the story.

Good journalism requires balance. Sunday should have given the farmers an opportunity to give their side of the story and it would have helped to have a vet’s point of view too.

There are no excuses for mistreating animals and saying it happens elsewhere is no excuse for cruelty. But nothing is gained for animal welfare if the pork industry here is killed and replaced by meat from overseas where pig farming practices are no better and possibly even worse.

UPDATE:

Minister of Agriculture David Carter has asked animal campaigners to reveal the location of the pig farm shown on Sunday.

“If SAFE has the welfare of these animals at heart, it needs to provide details of the property today so the authorities can the take appropriate action.  I have asked MAF to undertake an inspection as soon as we know the farm’s location,” Mr Carter said.

That is a very sensible response because MAF can’t do anything until they know where the property is.

It raises the question of why SAFE hasn’t already gone to the authorities and any further delay in doing so would suggest they care more about publicity for their campaign than the welfare of the pigs.

UPDATE 2: The Bull Pen has more with King hit on pig farming.

UPDATE 2: Keeping Stock posts on SAFE pork , highlighting a story from the NZ Herald which says SAFE is refusing to identify the farm.

When asked by nzherald.co.nz if that was due to publicity, Mr Kriek said yes.

I’m not going to give you all the details of our strategy, which is a very sound one,” Mr Kriek said.

The organisation which is supposed to save animals from exploitation is exploiting animals by putting publicity before the pigs.


Bad press for pigs depressing for pork farmers

30/04/2009

New Zealand pig farmers are already concerned about the impact imports of pork and associated products will have on their business and now they’re worried that swine flu will put people off bacon, ham and pork altogether.

It’s already happening in the USA where the price of pigs has fallen and  several countries have taken the opportunity the outbreak offers to impose non-tarrif barriers by banning imports from Mexico and parts of the USA.

As goNZo Freakpower  noted:

You can’t get pig flu from eating pork, but banning imports does help favour domestic interests.

But fear doesn’t worry too much about the facts and if people are worried about swine flu they might take the better safe than sorry approach to pig meat regardless of where it comes from.

The European Union Health Commission is trying to stem the tide against pork by changing the flu’s name:

“Not to have a negative effect on our industry, we decided to call it novel flu from now on,” European Union Health Commissioner Androulla Vassiliou told reporters in Brussels.

I don’t think that will work. Swine flu strikes me as a very appropriate name for an illness which, what ever you call it is a pig of a thing and has already given rise to a rash of jokes .

Not that it’s a laughing matter and the over reaction in Egypt where an order has been made to cull all pigs  is no joke.

It’s not going to stop the spread of the virus and while it will certainly reduce the supply of pig meat, fear of flu will also depress demand – even though there is no risk of infection from eating pork.

There’s no comfort in that for pig farmers here, but their loss may lead to gains for sheep and beef farmers. Lamb sales increased when outbreaks of BSE put people off beef and people who stop eating pork because of swine flu might turn to beef and lamb instead.


Biosecurity threat or just non-tariff barrier?

11/04/2009

MAF’ Biosecurity’s  provisional import health standards  for pig meat and by-products is a swine of a decision according to Federated Farmers.

The Ministry of Agriculture and Forestry (MAF) is setting a disturbing precedent by lowering the bar for imported pork.  It is simply unacceptable on biosecurity grounds,” says John Hartnell, Federated Farmers biosecurity spokesperson. 

“The unintentional risk of the HIV-like Porcine Reproductive and Respiratory Syndrome (PRRS virus) entering New Zealand is too high and the Federation backs New Zealand Pork on this issue.

“New Zealand and Australia are the only two countries on earth free of PRRS.  It’s no wonder the pork industry doesn’t want it here, given piglet mortality can peak at 70 percent during the acute phase.

“The New Zealand pig herd could become infected with PRRS if infected imported raw pork was fed to an unregistered pig.  This could easily occur on a lifestyle block or in the suburbs. 

MAF says  the risk of PRRS in consumer-ready products can be managed by the import health standards they’re proposing so is the farmers’ opposition based on facts or fear of competition?

New Zealand apple growers have long complained that Australia’s opposition to our fruit because of the risk of fireblight is really a non-tariff barrier barrier masquerading as a biosecurity threat. Opposition to the new standards for pig meat imports could be regarded as a similar ploy.

We have to be very careful that any opposition we have to the import of goods from other countries is based on science and not just an attempt to reduce competition because the sauce we try to apply to other people’s pork could just as easily be applied to our produce elsewhere.


Irish pork back on shelves

11/12/2008

Irish pork  is returning to retail shelves after European Union health experts decided that dioxin tainting which had been found wouldn’t pose any threat to health. Food health is based on perception

But a new battle began over who should pay for losses from the pork recall, which were estimated to range from €100 million ($130 million US) to €500 million ($650 million US). Irish farmers accused the government of moving too slowly on the issue.
     
The findings from the European Food Safety Authority should make it easier for Ireland to persuade its international customers to resume importing pork soon.
     
Within hours of the experts’ announcement, pork products began to reappear on a few Dublin supermarket shelves with new government labelling. “Irish Pork & Bacon APPROVED,” the labels read.

Perecption has a lot to do with people’s ideas on food safety so even though the pork has been deemed to be safe, consumers might need some persuading before they buy it again.


Dioxin in Irish beef

10/12/2008

Cattle in three of 11 Irish beef herds tested have been found to have higher than recommended levels of dioxin but the meat won’t be recalled because the levels don’t constitute a health risk.

Some 34 herds are still being examined and any cattle shown to be above the legal limit will be taken out of the food chain and the EU commission informed, the Irish government said.

The government recalled all Irish pork products Dec. 7 after tests confirmed 10 percent of Ireland’s estimated 1.47 million pigs may have been exposed to feed containing dioxins, associated with cancer. The recall leaves Irish pork producers facing a 100 million-euro ($128.5 million) bill.

Sky News  reports the meat was contanimated after unlicensed oil used in a burner tainted bread crumbs which were sold to farms.

Padraig Walshe, president of the Irish Farmers’ Association (IFA), has stood up for farms and pointed the finger at other links in the chain.

“Absolutely no traceability has fallen down at farm level,” Mr Walshe said. “Any problem with traceability has been before with feed going to farm or the process afterwards.

“It’s very disappointing if other procedures weren’t put in place in other parts of the food chain.”

Consumers are becoming more wary over what goes in to their food and while there is absolutely no room for complacency this gives meat and milk from New Zealand’s pasture-grazed stock an advantage over those raised on feed lots.


Irish pork contaminated

08/12/2008

Ireland has issued an international warning after Irish pork was found to be contaminated by high levels of dioxins.

The government’s departments of health and agriculture jointly called for the recall or destruction of all Irish pork produced since September first after discovering potentially dangerous dioxins in pigs and pig feed at 80 to 200 times the safety limit.

Dioxins, which are naturally occurring and can enter an animal’s system through its food or environment, accumulate in the pig’s fat and if ingested by humans in sufficient volume and time period, have been linked to an increased risk of cancer.


Positive outlook for meat industry

14/07/2008

ANZCO Foods chairman Graeme Harrison is confident that the meat industry has a positive future.

He said the industry is not broke and farmers should take a “level headed” approach to its future – because it does have a good future. 

ANZCO, a 24-year-old private company, is the fourth biggest player in the New Zealand sheepmeat market and the second biggest in the beef and veal markets.

It has in the last three years invested $125 million in new plants and upgrades and in food manufacturing expansion, says Harrison, a significant individual shareholder.

“We wouldn’t be making these investments if we didn’t think there was a good future for the business.”

By way of example Harrison says ANZCO has only recorded one loss in its 24 year history – in 1998 – “because of an investment outside New Zealand”.

“I’m sick and tired of all the negative publicity about where the meat industry is…. I’ve got confidence so producers should be taking a very level-headed view of this (debate) instead of being carried away with all the negative publicity.”

When prices are low, costs are rising and balance sheets in the red, it is easy to become pessamistic but I agree that the industry has a bright future.

Harrison says this was the message he gave a recent gathering of producers for ANZCO’s CMP business and he wants to repeat it to all meat growers as they debate the future of their industry.

“The problem sector in the meat industry is lamb and it’s in the South Island because of competition for land use (dairying).

” We have an industry with four players, all with about the same financial strength. Forget about sales turnover and market share … what you actually have is declining livestock numbers and supply is the key to this business. Where companies are similarly resourced clearly you are going to have severe competition. The long and the short of it is, some fallout is going to occur. What we have is livestock supply eroding in sheepmeat at a rate we haven’t seen since the mid-1980s. So clearly there is going to be change.”

Harrison says market forces are at work and farmers are responding to them. The biggest market force is the dairy boom.

“It’s the biggest boom in New Zealand agriculture since the early 1950s.(when dairying converted to sheep, particularly in mid-Canterbury and Southland). We’ve got a reverse of that now but on a bigger scale. Good mixed farming areas are going into dairying and the reason is comparative profitability.

“There’s nothing new about this…but extraordinary things happen in those environments. I’ve been trying to make the point that the meat industry is not broke. There’s been far too much talk about this, though it is true that financial rewards have been poor in the last four years.

“Sooner or later when you have poor returns there will be an effort to rationalise.”

If we still had subsidies we’d probably still have 60 million sheep and a mountain of lamb and mutton deteriorating in freezers. Instead we now have fewer than 40 million sheep and farmers are looking at their options and making rational business decisions based on the markets. Some are persuaded by dairy returns to convert their farms to dairying or dairy support. Others who don’t want to do that are looking at the positive impact dairy prices are having on their own land and selling.  Some still belive there is a future in sheep and beef, which of course there is.

Read the rest of this entry »


Grain Price Rises Pushes Food Prices Up

12/07/2008

Good news for producers is bad news for consumers because rising international prices for grain will push domestic food prices up again.

Bread prices are predicted to rise 10c a loaf and pork and bacon prices $2 to $3 a kg.

Food producers face new grain contracts – $100 a tonne, or 30%, higher than last year.

Farmers say contracts for next season’s harvest, which are about to be signed, reflected those higher prices.

Pig and poultry producers say price rises are inevitable to cover higher feed costs.

Foodstuffs (South Island) chief executive Steve Anderson agrees, and warns costs will continue to increase across the board.

He could not quantify the size of any increase, saying that was up to suppliers, but he doubted there would be any price correction in the immediate future.

“We’re not planning on seeing a reduction in commodity prices in general.”

The price for meat and wool is also driven by the price of grain and that in turn is driven by the price of energy. The combined shortage of food and high fuel prices will push the price of all food up.

Grain prices were so volatile, milling wheat growers were not signing contracts at $500 a tonne, claiming the price was still $100 a tonne below the international price and higher-yielding feed wheat.

“It is a rising market. On a falling market, everyone would be signing,” Federated Farmers grains council chairman Ian Morten said.

Demand from dairy farmers had also driven up cereal prices. Growers have been encouraged to plant higher-yielding feed varieties instead of milling wheat, which gave them leverage against the mills.

Grain growers had this year resumed exporting to take advantage of higher international spot prices, something they had not done for many years, which reduced the availability of domestically-grown cereals.

On top of this is the competition for land from the misguided policy which changes land use from producing food for people to the production of fuel for vehicles.

Farmers and food producers also blamed Solid Energy for higher prices, as it has contracted 5000ha of predominantly cropping land to grow oilseed rape for biodiesel production this year.

Solid Energy plans to increase that production to between 20,000ha and 25,000ha within three years.

Mainland Poultry chief executive Michael Guthrie said international issues had driven grain prices up 80% for his egg business in the past 18 months.

Drought in Australia had decimated world grain production; there had been floods and biofuel production in the United States; growing demand for grain from China and India; low world grain stocks; and dairying had taken over cropping land in New Zealand.

Mr Guthrie said egg prices had been stable for the past two years. He expected prices to rise, but could not say by how much.

Pork Industry Board chairman Chris Trengrove said New Zealand was six months behind the rest of the world on feeling the impact of higher grain prices.

Pork and bacon prices would need to increase about $1 a kg to the farmer to cover rising costs, which translated to between $2 to $3 a kg to the consumer.

Production and transport costs are also rising for fruit and vegetables and that too will impact on retail prices.

Repeated competition from rabbits persuaded me to abandon my vegetable garden but now it has been securely fenced this seems like a good time to get it ready for spring planting.


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