Agri-Food Field Notes March 2024

Welcome to our latest issue of Field Notes, a summary of Agribusiness news from across the sector, prepared by the KPMG Agribusiness network.

International updates

EU

The European Commission has proposed a €95 (NZ $170) per tonne tariff on Russian maize and wheat, along with a 50% ad valorem duty on other cereals, oilseeds, and derived products. This move comes in response to concerns that Russia, being a major agricultural producer, could flood the European market with low-cost wheat and cereals, causing disruptions and instability.

Australia

Australian egg farmers are threatening legal action against the Victorian state government if new animal welfare standards are enforced. The proposed standards align with major supermarkets' commitments to eliminate caged egg production by 2036. However, farmers argue that complying with these new standards may be economically unfeasible and could lead to business closures and supply shortages.

United Kingdom

According to the British Consumer Champion, Easter egg prices have surged by almost 50% compared to last year. The increase is attributed to unfavourable weather conditions affecting African cacao crops, causing the global cocoa price to double from €2,220 to €5,490 (NZ $3,972 to NZ $9,912) per tonne since February 2023.

US

Californian biotech company Triplebar Bio Inc, and their strategic partner global protein and prebiotics company, FrieslandCampina Ingredients, have announced a breakthrough in lactoferrin production. Their partnership will use innovative precision fermentation technology to increase production to meet increasing global lactoferrin demand.

New Zealand

Recent data from Westpac New Zealand Limited shows that on-farm costs have returned to the level of economy-wide inflation rates. This news is positive for farmers who have faced significant cost increases, the normalisation could help to partially offset weaker farmgate prices.
The Ministry of Primary Industries (MPI) will reduce its workforce by 9% in the next financial year, as they aim for an overall savings target of 7.5%. A total of 384 positions will be disestablished as part of this cost-saving measure. MPI have reassured the sector that frontline biosecurity workers, statutory roles, and newly created on-farm support teams will not be affected.
NZ Agriculture Minister, Todd McClay has announced additional support for farmers and growers experiencing hardship due to ongoing drought conditions in Canterbury and Otago regions. The extension of the medium-scale adverse event classification will provide up to $70,000 for Rural Support Trusts in these areas enabling them to offer community and individual support to affected farmers and growers.
Mānuka honey company, Comvita Limited, has reported positive preliminary results in its clinical trial studying the effects of their LepteridineTM Manuka Honey on digestive health, showing it significantly improved digestive symptom response in people with Functional Dyspepsia, a common digestive condition.

Headlines

Scientists Engineer Cow That Makes Human Insulin Proteins in Its Milk
[18 March, Science Alert]

Scientists have successfully modified the genes of a cow to produce milk containing the proteins needed for ‘human’ insulin. The research team inserted DNA coding for proinsulin, the protein that is converted to insulin, into ten cow embryos which led to the natural birth of a living transgenic calf. On maturity, and once lactating, the milk produced from this cow showed specific proteins similar to human proinsulin and insulin. This is the first time that ‘human’ insulin has been achieved in a genetically modified bovine and represents huge future opportunities for meeting global insulin demand, however, such a future is still a long way off.

Planning underway for Australia's first 'agrihood' to merge homes, farming in Far North Queensland
[22 March, ABC Rural]

An Australian property developer, Arkadian Developments, is planning to establish Australia’s first agrihood in North Queensland. An agrihood is a residential neighbourhood specifically designed to integrate food production. Agrihoods have become popular in the United States, growing from 30 to more than 200 since 2018. Research in the US found that 73% of residents factored access to fresh, healthy food when looking for a place to live. Moreover, consumers are becoming increasingly interested in where their food comes from.

Scientists warn New Zealand risks losing top researchers due to research funding gap
[18 March, RNZ]

New Zealand scientists have expressed concern for the country’s science research sector over the uncertainty and lack of funding. The 10-year $680 million national science challenges are ending in a few months. The current government is also cancelling its predecessor's reform of the science sector and a $450 million investment into the Wellington Science City programme that was intended to upgrade science infrastructure in the capital. The government’s annual budget will be announced at the end of May this year, but the science community say they cannot wait that long, with some scientists have already left the sector either moving into administration roles or looking at other opportunities overseas.

Spotlight stories

More than 20 algae species can now be sold as food or food supplements in the EU
[26 February, European Commission]

The European Union (EU) has added more than 20 new algae species to its Novel Food Status Catalogue, meaning they can now be sold to consumers as food or food supplements. The additions will save the industry significant time and cost, estimated to be at least €10 billion (NZ $18 billion). Previously, only a few algae species were considered in the catalogue, with others requiring pre-market authorisation. Now there are over 60 entries in the updated catalogue, including several microalgae species and seaweed-derived products. The regulatory move is also intended to promote innovation and diversity in the food and supplement market while ensuring consumer access to safe products. The EU is one of the world’s biggest importers of seaweed products, with demand projected to hit €9 billion (NZD $16.24 billion) in 2030, particularly for food, cosmetics, energy production and pharmaceuticals.

Higher temperatures mean higher food prices, new inflation study finds
[22 March, ABC Rural]

A newly published study has found that food prices and inflation will be driven upwards in the future by weather and climate shocks. The study explored the relationship between monthly price tags on food with temperature levels and other climate factors across 121 countries since 1996. Researchers calculated that food prices will increase by about 1.5 to 1.8% annually within a decade. That figure translates to an increase in overall inflation of between 0.8 to 0.9% by 2035 from climate change extreme weather alone. By 2060, these increases are expected to climb further to between 2.2 to 4.3% for food prices, and 1.1 to 2.2% in overall inflation.