Thursday, August 18, 2022

Dairy has to tackle challenges by the horns, say industry experts

Alternative milk and wrongheaded legislation among the issues this primary sector has to deal with, summit hears.
DairyNZ chief executive Tim Mackle (left) and Miraka chief executive Karl Gradon outline the challenges the dairy industry faces during a panel discussion at the Primary Industries of New Zealand Summit in Auckland.

The dairy industry should concern itself with what it can and cannot control and look to keep improving itself if it is to meet the challenge alternative milk is setting, says a dairy industry leader.

If it does this, it will stay ahead, Miraka chief executive Karl Gradon told farmers and industry leaders at the Primary Industries Summit.

“We need to worry about what the dairy industry is able to do and continue to raise the bar about dairying in New Zealand,” said Gradon.

“Dairy nutrition is extremely important in many countries around the world and [we’ll succeed] if we do those things simply – and keep a watching brief – but remember what we are good at.”

Gradon was one of four dairy industry leaders taking part in a panel discussion looking at challenges and opportunities the sector is facing.

DairyNZ chief executive Tim Mackle said alternatives will develop with technology and perhaps may one day match dairy’s nutritional value.

“But in the meantime, we have got to be able to articulate its values and research what we have got.”

Synthetic milk could create dairy ingredient components, he said, but he is still doubtful it could match the fats, vitamins, minerals and essential amino acids that come from a dairy product.

“Half of the world’s calcium comes from dairy.”

Federated Farmers vice-president Wayne Langford said he believes alternative milks will be seen as lower-value products compared to what is produced on farm.

Asked about the industry shifting from volume to more value-added products, Gradon said that with peak cow numbers being passed in New Zealand, the industry has to re-hone its thoughts and consider how it can add value to all of the industry’s exports.

“Format and product type are going be essential to get right. Today we’re largely geared towards whole powder drys – including ourselves.”

While the milk product format is critical, it also has to resonate with the market they are in, which makes trade agreements critical too, he said.

“You can’t do one without the other.”

Mackle said it is a myth that milk powders are a commodity and that has to be debunked in the eyes of the public.

There is not going to be any more growth coming from cow numbers. It has to come from value, he said. “And one of the key aspects to unlocking that value is trade.”

The signing of the free trade agreement with the European Union and its lack of access for the dairy industry came as no surprise to Langford, and he did not blame EU farmers for their reaction.

“It’s a pretty unsettled world at the moment,” he said.

“Still, it’s opened the door and we can get some product in and if our product is as good as we say it is, then hopefully we can get a bit more as well.”

The notion that New Zealand produces milk powder as a commodity is a myth, says DairyNZ chief executive Tim Mackle.

Gradon said after living in Latin America, Europe and Asia prior to becoming Miraka chief executive, these are exciting markets. Nutritionally, dairy is going to set the benchmark and there are wonderful opportunities.

“I think we should be doubling down on them and supporting the Government and getting alongside them to make them a reality.”

Asked about the tighter regulations the industry is facing, Pouarua Farms chief executive Jenna Smith said these throw up challenges as well as opportunities to remain competitive. But what works for one farmer may not work for another.

“You really have to sit back and re-examine what your business’s constraints are with the regulatory controls that are coming.”

Langford said it frustrates him when regulation is poor – as is the case with the proposed changes to the dairy cow animal welfare code.

“It should never have come out in the form that it has. It’s going to take so much work to get it to a place where it is better. If we had worked together earlier we could have achieved a better result.”

Mackle said there is a growing sense of unease among the industry at the pace and scale of regulation.

“It’s got to be about fixing a problem and that’s our philosophy at DairyNZ. What are we trying to solve? I think that’s the real struggle for farmers, when they can’t see the link between the problem being solved and what they have been asked to do.”

The industry has problems it needs to fix, Mackle said, but he is concerned about dogma being introduced that is not science or evidence based.

The panel was also asked about bobby calves and the challenges the issue poses around animal welfare.

Smith said doing nothing is not an option and farmers should consider reducing their numbers of bobbies either by using beef genetics or sexed semen.

“Start slowly because it’s going to be a heck of a lot easier to jump from a lower starting point than it will be from a big edge.”

Langford said bobby calf numbers currently sit at about 1.8 million nationwide. Even if that is reduced to 1 million, it is still a sizable number of calves that have to be dealt with.

There is also value in that calf, and it should not be seen as a byproduct.

“What can we do in this space to take a little of that heat off?” Langford asked.

This article first appeared in the August 2022 issue of Dairy Farmer.

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