New Zealand needs to prepare for significant changes to its food export markets as food technology improves and alternative proteins emerge.
This new technology could significantly impact pastoral land use change with one scenario predicting a 35% reduction in dairy land holdings, according to a new report, Protein Futures: Future scenarios for land use in Aotearoa New Zealand.
The study was undertaken by researchers from the University of Otago and Lincoln University-based AgriBusiness Group, who presented their findings at a webinar organised by Our Land and Water.
The researchers developed four scenarios based on different rates of technological advancement for the main alternative protein technologies, with associated growth in consumer demand.
The first of these scenarios acts as a conservative, “business as usual” baseline. The second has precision fermentation take off while demand for plant proteins continues at current growth. The third sees plant-based products take off while the barriers facing precision fermentation and cellular meat products are eased, but not completely eliminated, and the final scenario has all alternative proteins take off.
Economic and environmental modelling showed the NZ economy is not immune if alternative proteins take up 10% and 22% of the overall market by 2035, the AgriBusiness Group’s Stuart Ford said.
NZ must develop a strategy that has us participating in the global alternative proteins market if we want to continue to grow our GDP while at the same time improving our nutrient loss and greenhouse gas emissions performance.
“New Zealand has to go with it rather than ignoring it,” he said.
When looked at from a land-use change perspective, dairy is the big loser if precision fermentation takes off in Scenario 2, losing 35% of land, affecting the financial viability of dairy farms.
Beef production, however, lifts 22% under this model.
Arable land holdings would also lift by 12% on the back of demand for crops such as sugarbeet used in the fermentation process.
Under the third scenario, dairy and sheep farming land would decrease by 15% each, beef by 8% and arable land by 37% as farmers switched to legume production.
Under Scenario 4, where all proteins take off, there would be a 29% decrease in land for sheep farming, 35% for dairy and a 21% increase in arable farming.
Forestry land also increases by 40% in the third scenario and 75% in Scenario 4, encompassing 1.7 million hectares.
“Economically, Scenario 2 is the worst result with a loss of dairying to substantially poorer land uses,” he said.
It would see a $7.994 billion loss to the economy.
Scenario 3 is the best and would see a $6.9bn gain as farmers switched to growing crops and $2.6bn in value was added to the economy.
The fourth scenario is in between the others as it balances out land-use shifts with a large portion of previously agriculturally productive land converted into forestry.
From an environmental perspective, Scenarios 2 and 3 are similar in terms of nitrogen, phosphorus and greenhouse gas reductions, while the fourth scenario has the largest environmental gains.
University of Otago Professor Hugh Campbell said any one of these scenarios would have significant impact.
“These are complex impacts. This isn’t like the NZ wool industry being substituted out of existence by an industrial-produced, more agile and cheaper competitor with artificial fibres.
“This is a situation where, yes, there is potential for significant substitution in some traditional land-based areas but the alternative isn’t simply out-competing them on production and efficiency. It also has significant environmental performance implications.
“If you look at NZ under Scenario 4, this development alone meets our GHG reduction requirements for agriculture.”
Campbell said if any of the scenarios occur, it would represent a significant downsizing for the livestock footprint as these new technologies substitute out production that would have made dairy ingredients.
AgriBusiness Group director Jon Manhire said dairy ingredients would be the first to go if this technology could create these products at a lower price.
“That would put at risk our exports in that space.”
While it would have impacts, it would not necessarily mean bankruptcy for companies such as Fonterra.
Professor Rob Burton of the Norwegian Centre for Rural Research said Fonterra had already invested in two precision fermentation companies, calling its approach to this issue sensible.
Burying heads in the sand would be the biggest mistake that could be made with this technology, he said.
“What can NZ do to prepare for it? I think at the moment, watch this space.”
