Land use changes... and back again
Like many New Zealanders, I descend from farming families who spent years clearing native bush to convert to pastoral land.
It is fascinating now to read of such land being replanted in Manuka (leptospermum scoparium) in response to international demand for Manuka honey (see the June issue of Country Wide for a story on this; “The Sweet Conversion”).
Manuka honey exporters have been doing well over the past few years. Well-established companies, such as Comvita, have invested significantly in market positioning, particularly in China and are now reaping the benefits.
Their challenge, as with other honey companies, is finding good quality, reliable honey supply.
Manuka honey feels like a New Zealand story, but leptospermum scoparium is also native to Australia, and Comvita has signed a deal with Australian honey marketers, Capilano, to access greater supplies of honey.
The amount of Manuka honey sold in China alone, far outweighs the amount of Manuka honey produced from New Zealand and Australia and the Manuka honey industry certainly has its challenges with fraudulent product.
This is to be expected with high-value brands and products, after all, in the words of Oscar Wilde “imitation is the sincerest form of flattery that mediocrity can pay to greatness.”
Investment into strong value chains, where our products are only sold via highly reputable retailers or online vehicles are part of the arsenal required to counter fraudulent claims and keep our genuine products at the top-end of the market.
Continued investment into product, processing and farming innovation will also be critical in maintaining this position.
It makes sense in the current environment for farmers to replant Manuka and Kanuka (which also has health properties), especially in areas of non-productive land and work with honey companies to guarantee supply of the very best product.
It does beg the question though, if the market for ‘health-honeys’ continues to grow, surely other countries will tap into the demand and Manuka honey itself will be in danger of being commoditised.
It is a constant battle for people on the land to assess how they should use that land. Conversion of land to any new production system takes time and money.
At the moment in New Zealand there is a lot of investment going into setting up sheep and goat milking operations.
Landcorp, New Zealand’s largest corporate farming organisation, is making a significant investment into sheep milking in the central North Island, similarly there are waves of investment going into goat milking, particularly around the Waikato region.
Recently, I was speaking to a Chinese businessman about opportunities in sheep and goat milking. He described a business friend of his who is investing in a goat farm in Northern China with 300,000 milking goats!
That was one friend he knew, there will be others. Where there is money, people will follow - and that is the case for food production all over the world, be that honey, wine, meat or milk.
My thoughts for New Zealand landowners evaluating land-use change is to assess for yourself where New Zealand products are sitting in the market - get on a plane and have a look.
Also assess and question how much companies are investing in the next generation of products.
The burgeoning sheep and goat milking opportunities are intriguing for the Otago/Southland region. I would love to see more of the agricultural investment dollar coming south.
In saying that, we need that investment dollar to be ‘smart’ - we won’t be the only country investing in new production systems.
We need to make sure that dollars are being invested connecting production with markets, not simply handing our products to distributors or third parties and hoping for the best.
A new product now will be a commodity in the future. Due diligence of any industry requires a full value chain assessment. There is no point in being a price taker at the raw product end of the business.
Land owners must be diligent in exploring the market-end, seeing the opportunities for themselves and aligning themselves with companies who are willing to invest in those opportunities.