| Bootstrapping
the organic market for NZ lamb By Laura Sayre |
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August 9, 2007: Ian and Heather Atkinson's 250-hectare farm, Wharerata, is located in the North Island's Wairarapa region, not far from Martinborough, one of New Zealand's many successful wine districts. The Atkinsons have managed the land organically since 1982 and have been certified by BioGro, the leading NZ certifier, since 1990. They currently raise 500 ewes, 600 deer, 40 beef cattle and 130 dairy heifers, the latter under a 12-month contract to a local organic dairy farmer. In addition, they provide winter grazing for another 230 dairy cows and offer surplus hay and baleage to the organic dairy industry at large. They've recently begun growing organic wheat for feed and have another portion of the farm planted in pines for timber and acacia gum trees for firewood coppicing. Two steep valleys of regenerating native bush at the back of the property are permanently protected under a Queen Elizabeth II covenant. But while the farm has every appearance of a mature organic operation—diversified and largely self-contained—the changing shape of the organic marketplace means the Atkinsons' business model is still evolving. Martinborough, 15 miles away, is a handsome little town with attractive cafés, a boutique wine shop and an upscale, winery-based B&B. So it comes as somewhat of a surprise to learn that the Atkinsons' are the only organic livestock producer in the Wairarapa region and that the domestic market for their meat has only recently begun to develop. Gaining access
"There are two things you need for marketing organic meat," Ian says, sitting at the kitchen table on a summer day in between farm chores. "Number one, you need quality; number two, you need continuity of supply." For the export market, you also need volume, at least at a moderate scale. In the early years of their organic enterprise, Ian used to liaise between breeders and finishers around the North and South Islands. He made connections to facilitate the supply of organic beef and lambs for processing and sale to overseas buyers, working on a commission-free basis in exchange for right of first refusal at time of sale. These days, UK and European importers of organic lamb want New Zealand meat primarily for the three months of the year (January through March) when they can't get it closer at hand; but before local organic suppliers came on line, they looked for a steady year-round supply from Down Under (both Australia and New Zealand). Ironically, the lack of consolidation in the NZ meat industry has probably made it more challenging for the organic sector to get itself established. There's no one with the dominance of Fonterra—NZ's leading dairy cooperative, with 11,000 farmer-owner-members—so it's largely been up to individual farmers to figure out how to market their product. The situation has improved as numbers have slowly increased, but those early years were difficult. "A lot has changed in the past five years; it's been good for the whole organic sector," Ian says, estimating that the South Island now exports about 30,000 organic lambs a year. A group of those South Island farmers he used to contract with has banded together and made arrangements with a processor for direct sale overseas. Organic lamb for the UK market enjoyed a 100-percent price premium over non-organic lamb this season, earning NZ$6/kilo carcass weight versus NZ$3/kilo for non-organic (US$2.11/pound vs. US$1.05/pound). Going local The Atkinsons still raise lamb for export, but their attention has begun to shift to the domestic market. Some years ago, they made the decision to take some time off to reassess the business and spend more time with their three daughters, now ages 14, 16 and 18. They leased the farm for a couple of seasons and scrutinized their operation from top to bottom. This proved to be well worth the effort and gave them the opportunity to refocus and chart a course forward. As it happened, their processor, a Dutchman then based in Wellington, took two years off to go back to Holland around the same time. After his return, the Atkinsons decided to develop their own label, Organic Essentials, as a way of more effectively marketing their meat at the regional level. Their product line now includes specialty sausages, salami and luncheon meats as well as traditional fresh-chilled cuts of lamb and beef. With Organic Essentials as part of their enterprise mix, the Atkinsons can buy livestock from other organic farmers to supplement their own supply as needed, have it processed and sell it to their network of retail buyers. Health-food shops, specialty organic shops and butchers throughout the North Island and northern part of the South Island are their primary outlets, Heather says. The larger supermarkets now carry organic items as well, but the big stores' access to a wider pool of suppliers makes them less dependable than other customers—as Ian puts it, "If they have a chance to buy at a lower price from someone else, they'll take it."
The final step has been to shift from regional to local. This year, the Atkinsons started selling at a new, Saturday-morning Wairarapa Farmers' Market in Masterton, with between 23 and 33 local producers, depending on the time of year. Ian and Heather are the only specialty meat producer, and sales have been good. Heather says, locals are their core market, rounded out by a steady stream of holiday-makers and tourists. The key is offering samples, she adds. "People try [our meat] and they say, 'Hey, that's really good—that's meat with flavor,' and they buy it." They also identified a need for hot food at the market, leading them to start selling their own cooked and ready-to-eat hot dogs, beef sausages and mint-and-lamb sausages—all organic, of course. This has been very successful, Heather says. It attracts customers, and "it’s a great way to introduce people to chemical-free food." The Atkinsons like selling their meat domestically because they believe in reducing food miles by serving the local market and because they enjoy the direct connection with customers. Ian smiles: "It's really satisfying to have the end consumer right there standing in front of you tasting your product and saying, 'Good on you, well done.'" Structural challenges Balancing domestic against export market demand is an omnipresent issue for NZ organic producers—and to some extent for all NZ producers: it is complex calculus of exchange rates, trade rules and international food trends in addition to the normal considerations of weather and work. "Take crayfish [lobster] as an example," Ian proposes. "Say that the maximum price that the New Zealand consumer will pay for crayfish is about $25/kilo. The export market may pay $50/kilo. Where do you think those crayfish are going to end up?" A related issue has been finding appropriate slaughtering and butchering facilities for organic meat. "We've been through six plants over the years," Ian says. "Very few companies will toll-kill [and] give you back your product." The usual arrangement is for the slaughterhouse to act as a broker, giving you a price for your animals minus the processing costs and then sending them on to the general supply chain. "Your standard plant in New Zealand will be handling five- to eight-thousand lambs a day. Our runs are very small compared to that." Nowadays there are a few plants that specialize in organic and other controlled-identity meats, like Angus Pure, which has helped the situation somewhat.
The situation with deer, a major livestock animal for NZ farmers, is even further behind. While there's plenty of demand for organic venison overseas, farmers like the Atkinsons just don't have the numbers to access those markets—yet. (New Zealand has just one native mammal, a bat, so deer are present here as a farm animal only.) For the time being their venison is certified but not marketed as organic. Leading the way Negotiating the organic marketplace as buyers as well as sellers makes the Atkinsons doubly committed to the fundamental principles of organic and the vital importance of maintaining organic integrity. Organic certification is founded on maintaining that integrity through rigorous quality-control measures, says Ian. "It's got to be strict as strict as strict." "Early perceptions saw organic farmers labeled as jandal-wearing, tree-hugging hippies." He goes on: "Nowadays it's more about food trends, healthy choices, care of the environment and sustainability. We expect to deliver quality and professionalism." Most banks and agricultural consultants are still skeptical of organics, the Atkinsons say, so it's difficult to get the financial backing and good advice many farmers need to facilitate the transition. Some headway is being made in the dairy sector now that Fonterra is offering guaranteed premiums for organic milk and other incentives for transitioning farmers. (Fonterra currently has 68 organic suppliers and expects to contract with 160 more by 2010.)
That situation needs to reach other sectors for similar effects to take place, says Ian. "Farmers need more support—which isn't to say that a lot of responsibility doesn't rest on the people managing the farms—but it's about getting people the information." He and Heather are hopeful that outreach and training opportunities forthcoming through Organic Aotearoa New Zealand (OANZ), a government-supported umbrella organization charged with boosting the organic sector, will help to fill that gap. Farmers transitioning nowadays should have an easier time of it than the Atkinsons did 25 years ago. "There shouldn't be any loss of production these days," says Ian, still less a loss of income. "Fonterra's advisors say to expect 20 percent loss [in yield] in the first three years, but with 40 percent lower costs," he notes. Sheep are widely recognized as among the most challenging organic enterprises, even in New Zealand. It took Ian and Heather eight years to fully convert their Romney-based flock, a slow process of selecting for hardier animals more resistant to parasites. It helped that market conditions at the time favored venison over lamb, prompting them to cut their ewe numbers from 2,000 to 1,200 while increasing their deer population from 400 to 1,000. These days they readily share their sheep genetics with other farmers making the transition to organic. "All [sheep] breeds can be used," Ian says; it's a matter of rigorously selecting for traits within the breed suitable to an organic system. Raising organic lambs also requires farmers to shift their work schedule. "Most farmers have three drafts of lambs in January and then they're done," says Heather. For organic markets, domestic or international, "The key is to have year-round supply for year-round markets. Frozen meat doesn't sell as well as fresh, even though three-quarters of people will go straight home and throw the meat in the freezer. People buy by eye—they like that red look."
To get the best price, lambs are shorn two to three weeks before slaughter so they're cleaner and easier to handle, therefore that work gets spread out, too. Other critical elements of organic stock rearing include strict attention to rotational grazing schedules, mineral balancing and the cultivation of a diverse pasture sward so the animals can tailor their diets according to their changing nutritional needs. The Atkinsons rely on soil testing as well as Brix and dry-matter tests to verify forage and haylage quality in their various paddocks. There's always more to learn—Ian recently attended a workshop by the American agronomist and physician Arden Andersen, who tours NZ regularly—but he also argues that one problem with the conventional mindset can be its insistence on understanding exactly how and why things work in organic systems. "My father was a commercial fisherman for 15 years,"
he reflects. "So I always knew from him how what he would catch
was affected by the phase of the moon. The same is true for plants.
For some of these things, you have to accept that they do work,
and that can be the hardest part." |
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