Words by: Prem Maan
There’s no question in my mind that dairy that is produced to a traceable set of exacting standards can earn a premium for our country.
Increasingly savvy, educated consumers want to align their own personal values and views with the food they eat. To do this they require transparency back to the source, an authentic story, and increasingly, that its production actually mitigates climate change.
New Zealand dairy has a reputation for being grass-fed and is already comparatively the most carbon efficient. However, it’s not a straight line from our existing practices to being able to command a significant premium.
Currently the butter under our Lewis Road Creamery brand graces the shelves in many discerning stores throughout the US and commands a premium due to its provenance story. It sells for NZ$10 for 227g.
This has taken much more to achieve than simply changing a label or adding a QR code. While it helps having a great brand to take to market, we still had to make fundamental changes to our farms to create the premium butter.
We’ve had to eliminate the cheap convenience of PKE, the way we manage our soils and, in some cases, we’ve had to accept a drop in production. Most critically, we’ve had to create our own standard to authenticate the things our customers care about.
Our 10 Star Certified Values Program is independently audited and covers strict grass-fed, environmental, climatic, animal, and human welfare requirements that go well beyond compliance.
We refuse to use phosphate sourced from Western Sahara, for example, and our antibiotic use is below the EU requirements for organic farming.
It took our Waikato farms an eight-year journey to meet our 10 Star Program standards – to bring the farm and infrastructure and feed procurement strategies up to meeting the requirements.
We had to reverse a heavy reliance on PKE, to grow, source and store forage for winter and increasing weather volatility, and restore and replenish soils depleted by forestry. We have either planted or retired 10% of our land to QEII reserve and committed to native plantings to encourage biodiversity.
We do all of this firstly because it’s the right thing to do. There is a clear need to make our farms more sustainable – environmentally, economically and socially. Farming that produces quality milk each year with fewer inputs and is resilient to climate volatility is in our common interest.
Secondly, we do this because we know the costs of achieving the 10 Star standard are rewarded by a premium from consumers who want values, not just value, for their money.
A good approach in general for NZ would be to educate farmers and reward them for improving soil carbon sequestration, preserving valuable nutrients and water onfarm, and reducing methane emissions to make animals more productive, all with the ultimate payoff that premium markets will pay more for products that have this kind of story standing behind them and are traceable.
"We do all of this firstly because it’s the right thing to do. There is a clear need to make our farms more sustainable – environmentally, economically and socially."
We have found that our sustainability and climate change mitigation ambitions do not jeopardise our investment. Quite the opposite.
Our long-term view enables us to reimagine the industry both on and off farm. Our founding environmental, social, and governance (ESG) policies resonate with our customers, as do our obligations to the United Nations as a signatory to its Principles for Responsible Investment. Interestingly, they are also starting to resonate with lenders. Our ambitious sustainability targets are now directly linked to lower loan costs from BNZ and its syndicate.
This is NZ’s first farm sustainability-linked loan and both partners hope it paves the way for others.
In my view, we should resist the view that future technology, and genetic modification, in particular, is the only path to production and profit.
To let the genie out of the bottle would be very foolish. From a marketing perspective, it would hand all the advantage to the Irish, who have already committed to never permitting GMO.
From a farmer’s point of view, the techniques of sustainable farming for a consumer premium must be practicable and immediately available; things like rotational grazing, riparian and other onfarm and retired land plantings, the use of earthworms and dung beetles, biochar, low tillage, and rotational, deep-rooted, increasing and diversifying pasture species, cover and catch crops.
At Southern Pastures, we call this Inter-Generative Farming – farming to leave the whenua (land) in a better condition for future generations. In my view, this will be how we enrich ourselves, not just as farmers, but as the inhabitants of a rare and lovely planet.
- Prem Maan is the executive chairman of Southern Pastures and Lewis Road Creamery. Southern Pastures owns nine dairy farms in Canterbury and 10 in Waikato, plus a support farm. It is also the parent of Lewis Road Creamery.