Food prices, including dairy, are on the rise partly driven by demand for biofuels. This has seen the price of basic grains, such as rice and corn, more than double in price over the past twelve months and dairy prices have also been on the increase.
There is growing uncertainty surrounding even the supply of food, with farmers in some parts of the world currently receiving more for biofuel crops than traditional agriculture. The conversion of land from food production to biofuels is alarming, especially as the European Union is demanding that all fuel must have in excess of 5% biofuel in the near future. But the world cannot live on biofuel!
The Director of Fonterra’s Milk Supply Division, Barry Harris, is working to ensure a sustainable supply of dairy products. This commitment has required a huge research and development (R&D) investment into the industry including developing better pasture management to improved packaging and waste management.
While New Zealand’s agricultural products, including dairy, are regarded by the global consumer to be the epitome of clean and green, and sustainably produced, Harris insists that it is vital exporters show their sustainability credentials in a credible way. And then when they have achieved that this will open up new export opportunities.
However, industries such as dairy do not work in isolation but rely on a complex chain of suppliers from seed to ingredients and packaging. Therefore the food industry, in its entirety, must commit to sustainability. This commitment cannot be piecemeal.
Yet it seems somewhat ironic that while the global marketplace is demanding companies show their sustainability credentials there is still no universally agreed formula for doing so. Leading the way, Fonterra are currently developing a methodology, in conjunction with the Government, for establishing the carbon footprint of its products and supply chain.
“This process requires us to look at the life cycle of the product from the farm and processing to transport and the consumer. From this data we are able to develop an emissions profile for the life cycle of that product, and better understand where opportunities lie for further reductions on emissions.
“Because of Fonterra’s commitment to sustainability, NZ’s dairy farmers are well positioned to gain an edge in the global marketplace. This whole system of developing carbon labelling is also opening up new career opportunities in the food industry, and food techies with skills in quality auditing will become desirable.”
Harris also points out that while Fonterra is still in the formative stages of developing sustainable dairying, there have already been some positive outcomes for the dairy industry such as more efficient fertiliser use, and energy savings.
Opportunities for the future include farmers installing bio-digesters for waste treatment (which also produce energy), using nitrogen inhibitors in fertilisers to reduce nitrogen leaching into the waterways which reduces their carbon footprint.
Fonterra is also working with scientists to help develop better seed mixes that will ensure more digestible pastures thereby reducing greenhouse gas emissions from cows. There is also a selective breeding programme, based on genomics (similar to horse breeding), where cows with desirable characteristics are selected. These characteristics include gut flora that reduce greenhouse gas emissions by improving digestion.
The dairy industry as a whole is also being encouraged to adopt new technologies. “By adopting new technology in our processing factories we have managed to save the equivalent of the electricity consumption of Hamilton!” But to be successful and competitive all of Fonterra’s suppliers must in time commit to sustainability, from small to large companies, from the CEO to product development, every supplier regardless will have to show their sustainability credentials.
Yet the future is very promising for New Zealand’s exports, insists Harris because, “little ole New Zealand is out there engaging with people in Europe and the UK. Our scientists are talking with other scientists, searching for solutions that will ensure sustainability of food supply. New Zealand is not sitting back but forging the path forwards. And we can do that because New Zealand’s exports already have integrity and credibility.”