Former Fonterra executive Guy Roper appointed DCANZ chair
A former Fonterra executive is the new chair of the Dairy Companies Association of New Zealand (DCANZ).
But she warns that testing for contaminants that was once done in parts per million, has now advanced to parts per billion and is heading for parts per trillion.
Crewther told the AgCarm conference the dairy industry globally is thinking that its role in meeting that worldwide rising demand for food would not only be in food security but also nutrition security.
“Nutritional understanding is an important factor in what the opportunity for dairy products will look like,” she says. She referred to a Time article last year which said the hypothesis they published in 1961 saying butter would cause heart disease could not now be scientifically maintained as a hypothesis. Scientists said they got it wrong.
“A more sophisticated understanding of nutrition is needed if we are going to support global nutritional security,” she says. “Otherwise we will have naïve policies or scientifically yet-to-be-proved hypotheses having a significant impact on food production and where we invest our productive resources.”
Food safety confidence is a must for any producer. “It is increasingly literally under the microscope with the advancement of food testing technology in recent years,” she says.
“Foods which were previously tested at parts per million have advanced to parts per billion and there is a drive towards parts per trillion. It means people are more aware of things in their food…. The automatic question is, is this safe or not, is it a risk, yes or no?
“We saw this with DCD very clearly: where there is detection of something not expected there is potential for significant disruptions in markets and to consumers.
“It is a challenge the International Dairy Federation has taken up in terms of how we communicate risk to consumers more clearly. How do we make sure we have the common evidence-based [science] and common international standards which provide consumers with a framework of confidence, rather than varying understanding or information without context causing significant disruption and chaos in markets.
“That will take some time to achieve and in the meantime the industry is managing the situation where we have that disconnect between testing capability and understanding.
“There’s hypersensitivity in markets because of the gap in consumer understanding for things being found that are unexpected.”
She says that has relevance for veterinary medicines and agrichemicals, pesticides and sprays.
Earlier Crewther said globally dairy demand is growing at an equivalent to New Zealand’s total annual production every year. The increase in demand from India in the next 10 months is predicted to be more than New Zealand’s forecast increase in dairy production for the next 10 years.
However volatility is part of the “new normal” for the dairy industry globally. Prior to 2007 high volatility in dairy markets was being suppressed by supply management policies run by the Europeans, the North Americans and others.
“We live in a world where we’ve got increasing demand for dairy products. That is leading to higher average prices, but alongside those higher average prices comes a bumpier ride. So a key challenge for the industry is how we bounce without breaking with volatility.”
One solution to alleviate volatility would be greater liquidity in the market through auctions for trading. The liquidity in the dairy market is constrained by tariff barriers and other protections globally. The dairy industry sees the TPP as a significant opportunity for dairy tariff liberalisation.
FMD would knock out our props
Foot and mouth outbreak modelling has shown the disease would hit the New Zealand economy twice as hard as the global financial crisis, says Crewther.
“Biosecurity has the potential to significantly change the fortunes of the industry and of New Zealand as a whole,” Crewther says.
New Zealand’s trade and travel patterns are changing significantly and that means the risk pathways into New Zealand are changing significantly.”
We should not have the mindset that the border is impervious, and need to be prepared for the risk of something coming in.
Various dairy and animal sector participants have been working with MPI over the last 18 months to develop a foot and mouth preparednesss programme and strategy.
