Early Bird I Tuesday August 6th 2024

New Zealand breaks away from joint infant formula standard with Australia, the United States overtakes China as our top sheepmeat market, and rural communities face life-threatening healthcare gaps. Welcome to Proud Country's Early Bird - The top things you need to know that impact rural New Zealand delivered to you by 5am, because who doesn’t need better chat beyond the weather! New Zealand breaks away from joint infant formula standard with Australia The infant formula industry is bracing for significant changes after the government decided to opt out of the joint Australia-New Zealand standard. Food Safety Minister Andrew Hoggard announced the decision following Cabinet discussions, marking a departure from the trans-Tasman regulatory alignment. The move comes after New Zealand's attempts to review new labelling requirements were unsuccessful, with Australian counterparts unable to accommodate the requested modifications. Consequently, New Zealand will develop and implement its own standard over the next five years. The government's concerns primarily focused on two aspects of the joint standard related to labelling restrictions, which were deemed unsuitable for New Zealand's specific context. However, Minister Hoggard noted that the majority of the standard was sound and had received industry backing. This decision represents a significant shift in trans-Tasman food regulation. Previously, both countries were working towards a unified approach to infant formula standards, aiming to harmonise regulations and ensure consistent quality and safety across both markets. Industry experts had voiced concerns about potential impacts on New Zealand's dairy export sector. With infant formula exports valued at over $1.5 billion annually, the industry plays a crucial role in the national economy. Worries arose that stricter labelling rules might hinder marketing efforts in key Asian markets. The announcement has elicited mixed reactions from industry stakeholders. Some welcome the flexibility a New Zealand-specific standard might offer, while others express concern about potential trade complications. As the five-year implementation period commences, manufacturers and exporters will need to adapt to the new regulatory landscape. The government has committed to working closely with the industry to ensure a smooth transition and maintain New Zealand's strong position in the global infant formula market. The United States overtakes China as our top sheepmeat market New Zealand's red meat exports showed mixed results in June, with growth in most markets offset by a decline in China. The Meat Industry Association reports exports worth $914 million, a 2% increase from last year. The United States remains the largest market, with exports up 14% to $303 million. Japan, the United Kingdom, and Canada also saw significant increases. China, the second-largest market, experienced a 38% decrease to $176 million. MIA chief executive Sirma Karapeeva says that while China's market remains soft, other key markets are seeing positive returns. For the first time since July 2017, the US became the most valuable sheepmeat market, surpassing China. Beef exports to China declined, but overall exports remained steady due to strong demand from the US, Japan, and Canada. The second quarter saw overall red meat exports fall by 1% to $2.9 billion, with increases in most markets except China. For the year ending June, total exports decreased 7% to $9.9 billion. China's share of total exports dropped from 39% to 29%, while the US increased from 21% to 27%. Japan, the UK, and Canada also showed growth. Sheepmeat volumes increased but values fell due to weak Chinese demand. Beef volumes grew, but values declined, again largely due to China. However, growth in the US, Canada, and Japan partially offset this decline. The UK market shows promise following a full year of the free trade agreement, becoming one of the top 10 beef markets for 2023/24. Rural communities face life-threatening healthcare gaps Rural New Zealand's health sector is facing significant challenges, with doctors reporting higher mortality rates from preventable causes in these areas. This health disparity contrasts sharply with rural regions' substantial contribution to the country's export earnings. Recent incidents, including a misdiagnosis at Dargaville Hospital, have highlighted the urgent need for improved rural healthcare. Many rural hospitals are struggling with staff shortages and an increasing reliance on telehealth services, raising concerns about care quality. Research from the Hauora Taiwhenua Rural Health Network reveals concerning health disparities in rural areas, including higher rates of preventable deaths and increased suicide rates. These issues are particularly acute for Māori in remote areas and rural men. In response, Health Minister Shane Reti has outlined several government initiatives to address these long-standing problems. The government plans to increase medical school places by 25 and is working with Waikato University on a proposal for a third medical school. Additionally, Health NZ has implemented specific workforce initiatives for rural health providers. These include a $9100 accommodation allowance for trainee GPs in rural practices, funding for locum healthcare professionals in rural general practices and NGO rural hospitals, a Rural GP Relocation Fund to support recruitment, and a National Rural Hospital Locum Coordination Service to attract and grow a pool of doctors. Minister Reti emphasises that improving rural health services remains a priority for Health NZ. However, rural health sector leaders argue that more comprehensive action and funding are needed to effectively bridge the healthcare gap between rural and urban New Zealand. Overseas Investment Office approves sale of Verkerks' mid-Canterbury plant Verkerks is in the process of selling its Mid-Canterbury abattoir to Japanese meat company SFJ Holdings for $15 million. The Overseas Investment Office granted approval for the acquisition in June under the Benefit to New Zealand test. The pending sale includes a 37-hectare meat processing plant in Ashburton and all shares of Ashburton Meat Processors, currently owned by Verkerks. The deal marks a significant shift for the company, founded by Aalt Verkerk in 1957. Changing business conditions were cited as a factor in the decision to sell the plant, indicating a desire to focus on the company's core business. Meat processing is expected to continue at the site under new ownership, while Verkerk's manufacturing will proceed as usual at its Christchurch facility. SFJ Holdings, a New Zealand-based subsidiary of Japanese meat marketer S Foods, plans to expand the plant with a new beef processing chain, focusing on Wagyu beef production.  Rural property market slump continues The rural property market continues to face challenges, with farm sales declining and lifestyle block sales remaining stagnant. Recent data from the Real Estate Institute of New Zealand highlights the ongoing slump in the sector. In the three months ending June, farm sales nationwide totaled 215, marking a 13% decrease from the previous quarter and a 6% drop compared to the same period last year. This downward trend has persisted for four years, with farm sales nearly halving during this time. Prices have also weakened significantly. The REINZ All Farm Price Index, which accounts for variations in farm size, type, and location, shows a 12% decline compared to last year. Dairy farm sales have shown some resilience, with a 3% increase over the year. However, the REINZ Dairy Farm Price Index indicates a 12% drop in prices on an annual basis. REINZ rural spokesperson Shane O'Brien attributes the lower-than-expected buyer interest to several factors. Farmers across all sectors are grappling with changing weather patterns, lower farm product prices, and higher operating expenses. While farm sales continue to decline, the lifestyle block market appears to have stabilised after a steady decrease from late 2020 to early 2023. Sales in this sector saw only a slight 1.6% decrease compared to last year, with 1296 lifestyle blocks sold in the three months to June. On an annual basis, lifestyle block sales totalled 5512, down 4% from the previous year. The median price for lifestyle blocks sold in the past 12 months was $975,000, a 2.1% decrease from the previous year. See omnystudio.com/listener for privacy information.