Rabobank flags rising global dairy prices, warns of downside risks ahead
While global dairy commodity prices continue to climb in most key exporting countries, the second half of the year is expected to bring increased downside risks.
“We can use that information to understand our system better, understand how we are producing our lambs and then we are able to manipulate it accordingly,” the Rabobank analyst told Rural News.
He says once farmers get more understanding of, for example, particular generic traits or productions systems they can start to tinker with it at that level.
Holgate believes a key take-out of the report is that farmers have started on this journey, but more investment and focus on adding value is required.
Three points are important to positioning NZ lamb as a premium high quality protein. It starts with having a consistent, high quality product.
“We can’t take for granted the quality of products; we must ensure we give consumers a high quality eating experience,” Holgate explains.
“But on top of that, if you want a premium high-value product you must also give consumers the story behind it. They want to know how and when it was produced [and what contributed to its] sustainable, ethical production.
“The grass-fed story will be an important aspect of that. Some attributes of 100% grass-fed tick some boxes for consumers so we must make them aware of that.
“But we must also have strong, robust traceability programmes and accreditation schemes so we become a trusted supplier to consumers overseas, so that what we say they believe and see as credible.”
Holgate says we can no longer rely on the good, longstanding reputation of NZ lamb.
“Competition is greater globally, both from other lamb producers starting to do this storytelling themselves, and with the rise and greater worldwide availability of low cost proteins like poultry or pork.
“There is also a pending threat of synthetic proteins and their messaging about traditional livestock production – the ethical and environmental sustainability aspects. We need to start countering that with positive messaging and correcting some of those stories.”
He says lamb sits well in targeting premium consumers because it is a reasonably scarce protein worldwide.
“If you tried to do the same with chicken it would be a lot harder; we are able to differentiate and articulate a premium story about lamb and we can do that because of the scarcity.
“It probably feeds well into the greenhouse gases story about a low carbon footprint.”
Also, health and the 100% grass-fed message sits well with its perceived benefits.
“Our processors over the last five years have done good work starting to develop these value-added lines in products and are doing more consumer research.”
Much outlined in the Rabobank report is a continuation or extension of work already underway, Holgate says.
