Supplier Update 14 October 2022
Since our last update we’ve experienced a Southerly blast across the country. Given lambing is well underway the heavy snow was certainly not ideal, and I hope you have been able to minimise the impact on farm.
Of course, the news this week is very much centered around the Government’s response to the He Waka Eke Noa proposals. While many aspects of the working group’s proposals have been picked up, the Government has proposed some changes, including to treatment of sequestration and how the price for emissions is set.
Emissions pricing is complicated, with a lot of different moving parts and impacts for sub sectors. It seems to me that if you pull a thread on one side, it unravels a couple more threads on the other side.
The changing climate is already affecting many farming areas and I think we all accept the need to work together to bring emissions down across the economy. The question at issue is how we do this in a fair and enduring way.
While we are still working through the details of the Government’s response, the modelling provided by the Government does show a significant impact for sheep and beef compared to the dairy sector. We knew this was coming, and the HWEN partners’ proposals showed similar effects, but seeing predictions of a 20% reduction in lamb production by 2030 laid out in black and white is confronting.
We do see some positive signals that the consultation period will be a genuine opportunity to reshape some elements of the proposals and Silver Fern Farms will be working hard to secure a better outcome for our farmers. Importantly, the Prime Minister has signaled that she wants to hear directly from red meat processors, and we will be taking up this opportunity.
Our position through the consultation will be the same as the one we’ve had throughout the HWEN process: Silver Fern Farms supports a fair and equitable farm-level system for emissions pricing and we’ll continue to bring a firmly market-led perspective to the issue. What’s on the table currently is clearly not equitable for sheep and beef farmers, so let’s work together to change that.
I really encourage you to take the time to get your head around the proposals and the implications for your farm. There’s just over four weeks for the sector to provide feedback and while it’s a busy time, it is an issue worth getting to grips with.
We also can’t lose sight of the importance of other aspects to the emissions challenge, like methane R&D, markets dynamics and the role changing customer expectations will play. In this week’s update we give an overview of a methane reduction joint venture Silver Fern Farms has entered into with the Government and other primary sector companies.
In terms of the markets, I’ve noted some global headlines heralding HWEN as a positive ‘world-first’ and this does illustrate the role that sensible emissions pricing could play in supporting positive customer sentiment around the red meat you work hard to produce. While there’s much more work to do to land a workable farm-level system, the world and our consumers continue to look to New Zealand Inc to lead the way in low emissions food production.