Thursday, December 7, 2023

Sustainability audits are next

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Beef farmers will increasingly have to prove their farming systems meet sustainability rules, Rabobank says in its latest quarterly report.
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The last 12 months has seen a noticeable step-up in the number and variety of mostly market-led initiatives as beef production comes under more scrutiny over the impact on animals and environment.

The impetus is coming from food retailers, food service companies, processors and producers in response to the changing dynamics, it said. 

And the pace of change will increase further.

New Zealand farmers are already doing most of what is required by markets and Rabobank’s NZ-based sustainability and proteins analyst Blake Holgate said documenting that might be the biggest challenge. 

Initial compliance can be at a processor level but for really high-end orders paying the best premiums, verification might require independent audit.

A Global Roundtable of Sustainable Beef (GRSB), set up as far back as 2012, defined sustainable beef as a socially responsible, environmentally sound and economically viable product that prioritises planet, people, animal and progress.

Beef + Lamb NZ and Rabobank are members.

The report noted exact performance criteria varies between regions, depending on local conditions, but the organisation covers all major beef-producing countries.

Holgate said there will be opportunities for suppliers here who can meet required standards while suppliers who can’t are likely to find it increasingly difficult to access markets.

“NZ is in a strong position to capitalise with many of our extensive, pasture-based production systems already aligning closely to what the market is asking for. 

“However, producers will be increasing required to demonstrate through verifiable evidence exactly how they are meeting these standards.”

Grass-fed farming is seen as a strong health feature and NZ’s extensive pasture farming is strong from an animal welfare viewpoint, compared to grain-fed systems.

“We’ve already got robust environmental regulations so that all stands us in good stead. 

“At a global level we stack up well against other producers.”

A planned move to emissions pricing will become another selling point when it is introduced.

International developments cited in the report include:

  •  Fast-food group McDonalds committing to buy beef based on the GRSB criteria. Holgate said that move is right at the top as an industry marker.

  •  Canada’s GRSB launching certified sustainable beef.

  •  Big US processor Tyson launching an independently audited Progressive Beef programme.

  •  Brazil setting up a carbon-neutral production group.

  •  Another big processor, Cargill, committing to reducing greenhouse gases in its North American operations by 30% by 2030.

  •  Australia setting a goal of being carbon-neutral by 2030.

Rabobank also noted the proposed NZ regulation requiring livestock producers to cut gross methane emissions by 24% to 47% by 2050 and associated farm-level pricing of emissions starting in 2025.

The report, written by Sydney-based senior analyst for animal protein, Angus Gidley-Baird, said the market will continue to be the main driver of change, supported by governments’ actions, non-government organisations, pressure groups, investors and the rise of alternative proteins.

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