Field Notes Issue 735

Welcome to our last Field Notes newsletter for the year, we’d like to take the opportunity to thank you for engaging with KPMG and our content for 2024.

On behalf of the KPMG team, we wish you all the best for the festive season and look forward to re-connecting with you all in 2025. We’ll be back with our first issue of Field Notes next year in the third week of January.

In Aotearoa…

The Ministry for Primary Industries latest Situation and Outlook for Primary Industries Report predicts export revenue to increase by 7% to $56.9 billion by June 2025. The expected increase is driven by improved economic conditions increasing revenues of most primary industries.

Federated Farmers has submitted a formal complaint to the Commerce Commission, requesting an investigation into the lending practices of New Zealand banks The complaint alleges anti-competitive behaviour among the five major banks, particularly due to their involvement in the Net-Zero Banking Alliance, as they implement targets like reducing financed agricultural emissions to align with the alliance.

Moana New Zealand and Port Nicholson Fisheries have opened the Wellington Kaimoana Hub, a $16.5 million seafood processing facility in Porirua. The iwi-owned facility is the largest in the Wellington region, and will process products like snapper, blue cod, and crayfish for international markets.

The Canterbury Mayoral Forum has launched the Canterbury Climate Partnership Plan, a climate change strategy involving all 11 councils in the region. The three-year plan outlines ten key climate actions to improve resilience, reduce emissions, support adaptation planting and promote nature-based solutions.

In international news...

China produced a record 706.5 million metric tonnes of grain in 2024, increasing by 1.6% in 2023. This is mainly due to larger rice, wheat, and corn harvests with improved yields but also correlates with increased investment by China in farm machinery and seed technology to enhance food security.

The British government plans to develop a national food strategy in early 2025, focusing on food security, health, environment, and the economy. The cross-government strategy will address issues such as the impacts of climate change agricultural supply chains, obesity, and the cost of food. The government will engage with industry to develop and implement the strategy complimenting the 25-year farming roadmap, also to be published in 2025.

Meanwhile, the British Department for Environment, Food and Rural Affairs has confirmed 185 cases of the bluetongue virus in cattle in Great Britain. Surveillance testing will continue across the country with the restriction zone covering majority of East England. The virus is transmitted by midges causing a series of painful symptoms and a decline in milk production.

The European Commission has proposed changes to legislation to protect EU farmers and restore trust within the supply chain. The amendments will support farmers and restore trust within the supply chain by enforcing written contracts, mandating mediation, boosting producer organisations, defining marketing terms, and supporting sustainability initiatives. Additionally, the Commission has proposed a new legal framework for cross-border enforcement against unfair trading practises

NestFresh celebrates first hatch of in-ovo sexed chicks in the US [AgFunderNews, 10 December]

The first in-ovo sexed chickens hatched in the United States (US) this month. Egg producer, NestFresh Eggs, plans to create a new retail category of specialty eggs for US customers. NestFresh’s technology, developed with Agri Advanced Technologies, uses hyperspectral imaging to look through the eggshell to determine the embryo’s sex based on feather colour before hatching. The technique is faster than traditional allantoinic sampling and allows producers to stop the incubation process much earlier, avoiding the unnecessary culling of male chicks once they are born. NestFresh's in-ovo sexed certified eggs are expected to be available in market by mid-2025. Original full article here

Tags: in-ovo; eggs; chicken; allantoinic; incubation

Gooddrop looks to mass produce cotton using vertical farms [AgFunderNews, 10 December]

Gooddrop, a British startup, plans to use vertical farming techniques to grow cotton for their apparel business, building a ‘grow to wear’ business. This method will bring cotton production closer to consumers and eliminate the water, pesticide, and land challenges of traditional cotton farming. The vertical farms will be built alongside spinning mills to reduce transport emissions. While vertical cotton farming has been considered unfeasible in the past, Gooddrop believe they can overcome high electricity costs by using self-generated power. Currently in the research phase, Gooddrop plans to expand with a new 1,200m² research and development facility and spinning mill, with plans to launch their first garment in 2027. Original full article here

Tags: vertical farming; cotton; mills; garment

Sustainability, cost of living drive demand for real Christmas trees [ABC News, 13 December]

In Australia, the popularity of real Christmas trees is growing due to sustainability and cost-of-living concerns. Consumers view real trees as more environmentally friendly and carbon neutral since they eventually return to the soil, appealing to those who prioritise sustainability. Proper care for cut and potted trees ensures they remain fresh and can be easily repurposed as mulch or compost after the holiday season. Meanwhile, potted trees are gaining popularity as a cost-effective and waste-reducing option for consumers impacted by the rising cost of living. Original full article here

Tags: christmas; tree; real; environmentally friendly; compost; sustainable

Coffee prices climb to near 50-year highs — and it may take years for the rally to run out of steam [CNBC, 13 December]

Coffee bean prices have surged to a 50-year high, driven by adverse weather conditions and reliance on supply from a limited number of regions. Brazil, the world's largest coffee producer, experienced its worst drought in 70 years causing significant damage to its 2025 crop. Experts indicate that it could take years for coffee prices to recover due to slow stock replenishment. Meanwhile, the climate crisis may further increase risks for coffee production, potentially driving prices even higher. Companies like Nestlé are responding by raising consumer prices and reducing pack sizes to manage increased bean costs. Original full article here

Tags: coffee; beans; pricing; brazil; climate; production

Employment: Primary industries still adding jobs and paying an average $70k - NZ Herald [NZ Herald, 11 December]

Despite a weak labour market in most sectors, New Zealand’s primary industries, especially farming, are adding jobs. In October, compared to September, there were 1,304 more food and fibre sector jobs, compared to a loss of 2,017 jobs across all other sectors. According to Seek data, the number of job advertisements for farming were 20% more than in 2018. The demand for people within the food and fibre sector is driven by rising commodity prices, favourable exchange rates, and moderated cost pressures. However, farmers continue to face challenges in attracting skilled candidates to rural areas. Original full article here

Tags: primary industry; jobs; labour; food and fibre; skills