Look beyond China

This is what KPMG head of agribusiness Ian Proudfoot told the recent New Zealand Grain and Seed Trade Association conference in Auckland on the outlook for the agricultural sector. He added that the everyday low price supermarkets offered was the “unassailable truth.”

“There’s pressure to make food even cheaper. The challenge for farmers is to be sure it reflects the effort that goes into producing it, as well as satisfying the consumer,” Proudfoot said.

He added that supermarkets had to make sure that the product was right, packaging fitted shoppers’ requirements and that channels by which goods reached them were suitable. This could mean decisions such as whether meat products needed to be 100% pure or could be blended with pulses.

Proudfoot says no one in the NZ agricultural sector is performing better than the others but some companies had shown themselves to be more agile in responding to trends.

He added that the Chinese market was going through a fundamental reset of its economy, meaning NZ companies needed to think more about more market optionality. Proudfoot says it’s critical we to continue with free trade agreements. He says while NZ had thought about India for a long time, it now needed to be moving things further and faster – especially with Australia gaining the same first mover advantage there which NZ had enjoyed in China.

Proudfoot added that NZ exporters also needed to be thinking about competitors they hadn’t seen before such as Saudi Arabia and the United Arab Emirates. He says both wanted to ensure food security through use of disruptive technology to grow food in their harsh environments.

Proudfoot said NZ needed “better biology quickly” which meant setting the right regulatory environment for agriculture to be able to access and use lighter chemicals and gene editing technologies. Agriculture needed to be open to using artificial intelligence and “run at the horizon as fast as we can”. Through investment in automation and use of robots farmers would be able to develop the people employed in the sector more. They would need to be employers of choice not relying on transient workers meaning use of a different skill set for some. And when it came to consumer trust in new farming methods he said the answer was to shine a light on their operations in an open, honest and comprehensive way.

“Explain your business and show you’re doing the right thing by use of robust data.”