Silver Fern Farms (SFF) says it applied for the wage subsidy to ensure it could retain workers when production levels decreased by up to 50% at some of its processing sites.
Grass-fed red meat is a significant niche in the US market which New Zealand producers, with our pasture-based farm systems, are well set to benefit from.
The scale of the opportunity for the grass-fed red meat category is significant and is rapidly growing. In 2012, sales of grass-fed beef in the US totalled US$17 million. By 2016 sales had soared to US$272m.
Today, although growing, grass-fed labelled beef accounts for no more than 1% of the US$104 billion US beef market. It is a large and growing niche being driven by consumer demand for more natural food choices.
Americans are becoming more aware of what they eat. They want to know where their products of choice are grown, whether they are organic and sustainably farmed, whether these products have added flavouring or colouring and, most concerning of all, whether their meat has been exposed to or injected with hormones or antibiotics.
Topics such as these are covered in easy-to-watch, often sensationalised documentaries, and are discussed in podcasts, researched on various websites and covered on multiple social media platforms. Cponsumers’ ability to access this information online is causing a shift in consumption trends within a large segment of society. The explosion of claims across all categories in the supermarkets show the importance of catering to these consumers’ needs.
Much has been written about the benefits of ‘100% grass-fed beef’ over grain-fed beef. The benefits include higher omega 3 and omega 6 fatty acids, and higher antioxidants from grass-fed product. Consumers are becoming more aware of the benefits, with certain food movements, e.g. Ketogenics, extolling these and other benefits of grass-fed beef.
Consumers increasingly want a robust grass-fed commitment so they can realise these benefits.
As it stands within the US’s labelling environment, the term grass-fed can be used on any product provided the animal was raised predominantly on grass.
The labelling rule is administered by the US Food and Drug Administration (FDA).
This broad US FDA claim standard presents an opportunity for producers who can go a step further and back a ‘100% grass-fed’ claim through a traceable, verified process to give consumers confidence their product has never been fed grain.
The negative impacts of grain-fed beef are a real driver for consumers to find a better alternative. Consumers are raising questions about grain-fed beef systems’ environmental impacts, antibiotic resistance, animal welfare concerns, and questions about the products’ health benefits.
It is routinely known that North American feedlots feed antibiotics (many strains of which are used on humans) to their beef. In 2015 the USDA reported that at least 73% of large feedlots in the US used sub-therapeutic doses of antibiotics in their cattle feed as a “health or production management tool”.
Any Kiwi farmer will tell you that NZ’s cattle and sheep are grown in a far more regulated market, where you cannot routinely inject your animal with hormone growth promotants or feed antibiotics for production gain.
Grain-fed practices like this are driving the US consumer trend towards natural, grass-fed alternatives, and these consumers are a high-value niche willing to pay for certainty. Our market research in the USA of over 1,000 consumers showed that 42% of premium consumers regularly eat grass-fed beef.
They are willing to pay a premium for it, and they can afford it, with incomes of over US$120,000 p.a.
The supply in the US cannot keep up with the growth of this segment, which presents an opportunity for NZ farmers.
While grass-fed product is a growing opportunity, in Silver Fern Farms’ view the NZ farming industry needs to move as much supply to certified whole-of-life ‘100% grass-fed’ to differentiate from US and other global producers who currently claim ‘grass-fed’.
This will be crucial for NZ to realise its potential in such a large and well-paying market.