Straggle Muster 157 - 27/5/2005
Jeff Grant, Chairman - Meat and Wool New Zealand.
The recent Foot and Mouth hoax at Waiheke Island was another wake up call for the New Zealand pastoral industry and the need to be ever vigilant and protect our extremely good record to date as a food producing nation. We are only one event away from having that record broken and when and how that may change our industry in the future we currently don't know.
The effect of an animal disease or a break down in our food safety record will have a devastating effect on our economy. To understand this just ask a Canadian Beef producer the outcome of discovering one cow with BSE. The first was that much of the Canadian production went across the US border either for slaughter or as young cattle to the US feedlots. Suddenly the US boarder was closed and this turned the Canadian cattle industry on its head. There was not the capacity to slaughter Canadian cattle within Canada and even what was able to be slaughtered could not be exported as it had previously been done. A Canadian rancher put it to me even if every Canadian consumer increased their consumption 5 times in a year it was not going to fix the problem. The over supply of product that was now confined within the countries border. The end result was a complete collapse of the Canadian cattle market virtually overnight. The producers, rearers and wholesalers have lost seven billion dollars in direct income two years since one cow was discovered. The Canadian Government has been pouring money into subsidizing the building of processing plants in order to rescue the cattle industry because previously over 65% of Canadian production was processed across the border in the US. There are still arguments continuing about reopening the border because as yet only some product is allowed into the United States.
The US market has survived better after the discovery of a cattle beast with BSE following on from the Canadian cow. The main reason being United States exports only 10% of its production with the other 90% consumed within the country. The biggest loss for the US has been exports to the North Asia markets of Japan. Korea and Taiwan who all closed their borders to the US and Canada. This has ironically been to the benefit to New Zealand Beef industry which has seen sales increase between 75 and 90% in each of these countries. Taiwan has just started to open its market to the US with some product but Japan and Korea are not likely until after July this year at the earliest.
The reason for this turmoil has not been because of consumer concern about safety of product as was experienced post 1996 BSE cases in UK and Europe (the consumer understands the low risk around BSE in comparison to the 1990s) but because of regulators not being confident about countries being able to trace animals. This is starting to be experienced here by New Zealand exporters with increasing request about traceability in NZ. There will be much more on this subject over the coming months as the "Animal ID" working party between Government agencies and Industry will report its findings for New Zealand's future protection from a Biosecurity, Food Safety and Market Access basis. The report due out in June that will make some recommendations about future traceability for the Cattle and Deer Industry.
Jeff Grant
Chairman
Meat and Wool New Zealand
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