Rural Delivery: Promising year turns to lesson in vulnerability

By BRIAN LYNCH*

The meat processing season began with many encouraging factors for farmers and exporters.

Excellent growing conditions, high lambing percentages and carcass weights, a weak currency and steady demand in our key markets promised the best season in recent memory. Mid-season, meat companies and producers can reflect on the volatility of their industry.

The MAF vets' week-long industrial action in February was a bruising experience. Meat workers lost more than $15 million in wages; farmers were deprived of twice that sum in delayed payments for stock; some meat companies had trouble filling contract orders; and overseas markets questioned New Zealand's reputation for reliability.

There have been vivid reminders of New Zealand's vulnerability to events beyond its control. The false reporting of New Zealand's scrapie-free status by a German farm publication was a wake-up call for renewed vigilance.

Then CNN maintained New Zealand had foot-and-mouth disease and Time magazine compounded the injury with an assurance that we had "largely eliminated" the disease.

In a way, most infuriating of all was a statement by the usually trustworthy monthly magazine Meat International that New Zealand, along with Australia, "claimed" to have neither BSE nor scrapie.

In each case, the concerted efforts of Government, Meat New Zealand and the meat industry extracted apologies and retractions. But there is lingering unease about residual damage to our hard-won reputation.

The challenge of dealing with the harmful effects of that pernicious publicity was not all negative - it was an opportunity to draw attention to the qualities of New Zealand's benign working landscapes, and to reiterate that "duty of care" underpins our animal welfare policies. In CNN's case, the backdown included a lengthy and positive article on its website highlighting this.

All the same, the experience reinforced the need for New Zealand to be prompt, persistent and persuasive in rebuffing specific allegations about its food safety.

The repeated knocks to consumer confidence from the spread of BSE and foot-and-mouth in Europe continue to cause massive disruption to the region's domestic production and consumption. The pathetic sight of flaming pyres for infected stock has unleashed deeply felt animal welfare concerns.

Reports of incidents recurring in Asia and Latin America are a stark reminder that foot-and-mouth is a tenacious and infectious disease.

The turmoil and uncertainty in key parts of the international trading environment have tested the capacity of our meat exporters to pursue strategies which at the start of the season had good reason to assume stable market conditions.

Last October, for example, our meat exporters could have expected the European Union to easily maintain its pre-eminent spot in our sheepmeat trade, and deliver a yearly return of up to $1.5 billion. That expectation assumed the EU's 15 member-states would again produce about 8 million tonnes of beef, mostly consumed at home with the balance sent to markets in Asia and the Middle East.

Similarly, the annual EU sheepmeat production this year was expected to be roughly 1.2 million tonnes, of which about 300,000 tonnes would move within the region. This would leave room for about 400,000 tonnes to be imported, with New Zealand the dominant supplier.

The dual impact of BSE and foot-and-mouth blew those calculations out the door. There has been a noticeable fall-off in demand as serious numbers of at-risk stock have also had to be destroyed, the ban on any movement across EU borders has meant that significant volumes of local product - from England and Ireland, for example - that would normally flow to other markets is staying at home. This is upsetting the balance between domestic production and that seasonal window for imports upon which NZ relies.

The notion that the foot-and-mouth outbreak coming after BSE could be a winner for our companies and farmers has proven to be a 20-day wonder. And it takes 28 days to ship our product to the market.

* Brian Lynch is executive director of the Meat Industry Association.