Climate extremes make NZ’s supply chains highly vulnerable – it’s time to rethink how we grow and ship food

Written By: - Date published: 9:59 am, August 5th, 2023 - 32 comments
Categories: climate change, disaster, economy, farming, food, sustainability, transport - Tags: , , , ,

This post by Alan Renwick, Professor of Agricultural Economics at Lincoln is cross-posted from The Conversation, and also appeared at Greenpeace

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Alan Renwick, Lincoln University, New Zealand

Supermarket customers around New Zealand are noticing gaps in the grocery aisles that have nothing to do with the global pandemic or Ukraine war. It’s clear domestic food supply chains have been increasingly challenged by natural disasters and the ongoing impact of climate change.

Countdown recently warned customers that certain foods would be in short supply due to flooding on the East Coast. Time and again, we have seen such shortages and significant increases in the price of certain foods, particularly fresh produce.

The question is whether we have just been unlucky, or are these disruptions a result of deeper issues in the New Zealand food system? Are we more vulnerable than other countries, and if so, what does this mean for our food security?

Over the decades, New Zealand has centralised its food system and increased the risk that a single regional event could reverberate nationally. But it’s not too late to diversify and increase resilience across our food supply system.

Efficiency over resiliency

Modern food supply chains have largely been optimised for economic efficiency rather than resilience to supply-side shocks.

The agricultural sector has seen a process of increasing scale and specialised production – primarily to increase profitability. In part, this has been driven by land suitability.

The outcome is a relatively small number of large-scale processing factories and the concentration of enterprises in specific regions. For example, around 32% of New Zealand’s horticultural products come from the Bay of Plenty and Hawkes Bay.

At the retail end of the chain, large, centralised distribution centres and “just in time” delivery systems keep costs low for the two dominant supermarket chains, which account for between 80% and 90% of the food we consume. Food is brought to just a handful of distribution centres before being dispersed across their networks of stores.

But disruptions in one region can affect the entire country. In the aftermath of the Christchurch earthquake, the distribution centres serving the entire South Island were damaged. Supermarkets were forced to ship supplies from their North Island hubs.

A recent study from the Timaru District Council found that while South Canterbury describes itself as the food bowl of New Zealand, 95% of the commercially-bought food in the district comes from outside the region.

Over-dependence on roads

The current supply chain model is totally reliant on the uninterrupted movement of products across the country through our transport network – in theory, comprised of road, rail, sea and air links.

In practice, just under 93% of freight goes by one mode – road. This compares with 72% in Germany.

Topography coupled with low population densities mean many regions are served by only one or, at most, two main roads suitable for freight trucks. We are nearly totally reliant on roads but our road networks are particularly vulnerable to climatic events and other natural disasters.

Our food distribution system seems to be better set up to get exports out or imports in through ports and airports than to move food around New Zealand. The vast majority of our agricultural products are exported rather than consumed in New Zealand.

Resilience in uncertain times

All the evidence suggests climate change is going to increase the challenges in our food system, with more frequent and intense weather events. Projected sea-level rise will also put more strain on our already vulnerable food system at the farm and processing levels, as well as our ability to move it around the country.

Regional councils are clearly concerned, and there is increasing discussion of the concepts of food resilience and local food networks.

But what does a food system designed around resilience rather than optimisation look like? Does it simply mean less choice and higher prices? Or can it tackle other challenges, such as diet and health, environmental concerns and broader food security?

Two possible and compatible paths are evident. The first relates to local food networks and involves diversification of the products produced within each region, at both the farm and processing and manufacturing levels.

The idea of distributed manufacturing – basically mini-factories dispersed through the country – has been discussed in the forestry sector in New Zealand but could equally be considered for food.

Some emerging technologies that reduce dependence on the local climate for production, such as vertical farming, could be important in local food networks. Aquaponics (farming both fish and plants together), or algae production in ponds, could also diversify local food resources.

The idea of “circularity” could help reduce dependence on external inputs. Food waste products, for example, could be turned into energy as well as fertiliser.

 

 

Alternative farming approaches – like vertical farming – could help New Zealand’s food supply resiliency.
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From supply chains to systems

Alternatively, we could keep the potential benefits of national scale production, but invest to reduce the vulnerabilities in our transport networks. As recent research highlights, there could be multiple benefits to reducing reliance on roads.

And we don’t need to reinvent the wheel. Only 6% of freight is transported by rail – this could be increased to diversify shipping options.

There may also be opportunities to make more out of coastal shipping routes. At the moment, this largely comprises the movement of bulk products such as fertiliser and cement.

However we tackle the increasing vulnerabilities in our food supply chain, we need to think of it as a food system and not simply a supply chain. The complex interactions in our food system mean changes to one part are likely to have wider economic, environmental, social and cultural impacts.

Tackling our potential vulnerability to climate change needs to be undertaken in the context of a wider strategy for the entire food system.The Conversation

Alan Renwick, Professor of Agricultural Economics, Lincoln University, New Zealand

This article is republished from The Conversation under a Creative Commons license. Read the original article.

32 comments on “Climate extremes make NZ’s supply chains highly vulnerable – it’s time to rethink how we grow and ship food ”

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  1. PsyclingLeft.Always 1
    5 August 2023 at 10:55 am

    Well thats great Prof Renwick's thoughts got a Post ! I did link to Prof Renwicks thoughts earlier..

    https://thestandard.org.nz/nationals-latest-policy-moar-roads/#comment-1962888

    The Re-Think is absolutely achievable. Just got to get on with it! Time is running down…

    Also….

    According to a recent study, coastal shipping produces a fifth of the carbon emissions (well-to-wheel) of road freight. Rail also performed well, with about a quarter of trucking emissions.

    Despite this, trucking accounts for nearly 80 per cent of New Zealand's heavy goods transport, and a 94.5 per cent share of the total emissions from heavy freight transport.

    https://www.rnz.co.nz/news/business/488712/a-shift-to-coastal-shipping-and-rail-could-cut-nz-s-freight-transport-emissions-why-aren-t-we-doing-it

    Why..indeed.

    • Patricia Bremner 1.1
      5 August 2023 at 12:54 pm

      yes 100% PLA, of course the oil and truck lobby are huge players. Some engineers as well.surprise

  2. Tony Veitch 2
    5 August 2023 at 11:15 am

    I recall in my youth (a fair while ago) the arrival of the first stone fruit of the season from Central Otago.

    We need to return to seasonality. And stop eating grapes from California or Chile.

    • Mike the Lefty 2.1
      5 August 2023 at 11:24 am

      Modern consumers want and expect everything and anything will be available at the supermarket at any time and if it has to be flown thousands of kilometers in a plane with a huge carbon footprint they don't give a monkeys as long as it is there when they go down to Pak’n Save.

    • Ad 2.2
      5 August 2023 at 11:37 am

      Roxburgh and Ettrick fruit growers started rejecting rail pricing as early as the 1940s, even though it ran right past them. The transfer to trucks was fast.

      • Blazer 2.2.1
        5 August 2023 at 6:35 pm

        What you are really pointing out is the lack of forward planning regarding infrastructure by a series of expedient governments.

        If rail was integrated into the plans,there would have been better utilisation.

        Building distribution warehouses near rail links would have been efficient and cost effective.

        Your 'example' of Otago fruit growers in the 40's is not compelling.

        I remember Shoprite a FMCG enterprise had a warehouse in Penrose where they could efficiently dispatch goods all along the supply chain.

        Their main problem was..pilfering.Containerisation addressed that issue,but the trucking lobby just got more and more influence.

        NZR ,Kiwirail became a plaything for the financial charlatans….kindly called asset strippers and in reality …blackmailers..imo.

        • Ad 2.2.1.1
          5 August 2023 at 8:25 pm

          There's no lack of forward plans for rail.

          Many of them do come off, as they did this weekend in Ruakura with no small help from Waikato Tainui. That's a decade-long plan and has a massive housing and industrial plan around it too.

          Many other projects such as the spurs to all the milk factories both south Island and North have occurred inside the last decade.

          And the investment they are putting into Picton and Wellington Ports for the new ferries is really huge.

          And Te Huia under this government is actually doing OK. May never break even but who cares.

          But others such as the big spur to Marsden Point never seem to get out of planning phase.

          And Kiwirail tend not to take as much care about commuter rail track investment, which is why Auckland is such a mess for several years.

    • Patricia Bremner 2.3
      5 August 2023 at 12:57 pm

      And to do home preserves and freezing produce, to meet off season needs and lower the carbon miles.heart

  3. Mike the Lefty 3
    5 August 2023 at 11:20 am

    Absolutely!

    There has been over the past two or three decades a move away from local producers in regions to corporate producers in a few concentrated areas, mostly near big urban centres.

    There are certainly a few advantages to this: larger nearby work force, near to ports for shipping etc, but it also concentrates the vast bulk of the production in small areas – vulnerable to climatic events in the case of fruit and veges – and in the hands of very large, usually overseas corporate companies who's profits go overseas.

    In my own region I see evidence of how things have changed. Greytown used to be the apple and berry fruit growing centre of NZ. Now there is only one large commercial orchard and a few smaller ones. Levin/Otaki used to be famed for its market gardens and now most of them are gone. Opiki used to one of the biggest potato growing areas in the North Island but the potato farms have virtually disappeared. You used to be able to buy locally grown spuds in Palmerston North, now they are from South Auckland. It is probably similar in other regions.

    Everything now has to be big and centralised, because smaller lower tech regional establishments don't make the millions of dollars of profit that is demanded by investors.

    Incidentally, there is a small (but growing) milk distribution outfit called Happy Herd who are trying to do things in a more carbon neutral way. Happy Herd sets up milk vending machines in selected shops so you can buy real milk, without plastic wrapped around it, in a bottle that you can bring (or buy). The milk is often shipped in containers to the outlets in specially-equipped E-bikes.

    "Supply chain" has become an English language idiom over the last few years. I guess we never thought about it before because it was usually grower/manufacturer to wholesaler to retailer to consumer. That we had enough labour and equipment was assumed. Not so much now. Consumers now demand everything to be there when they want it, immediately, but to do this demands people willing to work night shifts, work in horrible weather, on holidays and weekends – and not everyone wants to do this.

    I believe that smaller is better than bigger, but of course that puts me in conflict with the political right who always believe that bigger is better and centralisation is the key.

    One thing I can be sure of, National won't be doing anything but building the roads they are planning and will smugly say that these new roads will solve the problem of supply chains. (They won't).

    Labour won't be doing anything much about it either. They will hum and ha and say it is a worthy idea but……. (there are always buts) …….it is too radical and we have seen before Labour recoiling from any suggestion they are thinking outside the norm.

  4. Ad 4
    5 August 2023 at 11:35 am
    1. "Supermarket customers around New Zealand are noticing gaps in the grocery aisles that have nothing to do with the global pandemic or Ukraine war."

    The shortage of cheap eggs is due to changes in government regulation of chicken farms. We adjusted fine.

    1. "around 32% of New Zealand’s horticultural products come from the Bay of Plenty and Hawkes Bay"

    Hawkes Bay have a local rail line and port and BoP has a great port and this reflects their regional specialisation. All NZ major milk factories have rail lines directly to them, and that is the great majority of NZ's agricultural exports. The transport infrastructure is appropriate and suited.

    1. "The vast majority of our agricultural products are exported rather than consumed in New Zealand."

    Since that is what our economy has done for 160 years and will always do, the current setup is appropriate.

    1. "The outcome is a relatively small number of large-scale processing factories and the concentration of enterprises in specific regions."

    That centralisation has occurred for about 130 years and cannot be unwound since all of our major food export companies are very concentrated, and, again, are not going to be unwound.

    1. The link to Queenstown Lakes food resilience project is lovely but in reality tourists want everything right here right now all the time, and pay for it. Tourism is the QLDC economy. And practically, the QLDC climate demands that we import most of our food.

    In Wanaka we now have 10 2×1 raised beds and it will take a year before they give 20% of what we need ourselves. Happy to buy local if it's there but generally small scale farmers price according to what tourists will pay, which is of course exhorbitant.

    • weka 4.1
      5 August 2023 at 12:44 pm

      TS comment editor doesn't handle numbered lists well if there are line spaces between the numbered point.

    • weka 4.2
      5 August 2023 at 12:56 pm

      "Supermarket customers around New Zealand are noticing gaps in the grocery aisles that have nothing to do with the global pandemic or Ukraine war."

      The shortage of cheap eggs is due to changes in government regulation of chicken farms. We adjusted fine.

      This is a good example of how regulation can force farmers to change without the sky falling in.

      "around 32% of New Zealand’s horticultural products come from the Bay of Plenty and Hawkes Bay"

      Hawkes Bay have a local rail line and port and BoP has a great port and this reflects their regional specialisation. All NZ major milk factories have rail lines directly to them, and that is the great majority of NZ's agricultural exports. The transport infrastructure is appropriate and suited.

      Food resilience for NZ and export are different goals. The issue here is to what extent we can increase food resiliency by making changes to the transport system.

      "The vast majority of our agricultural products are exported rather than consumed in New Zealand."

      Since that is what our economy has done for 160 years and will always do, the current setup is appropriate.

      It won't do if we allow climate to get so bad it collapses farming in NZ. As important as export is, food resilience is more fundamental.

      "The outcome is a relatively small number of large-scale processing factories and the concentration of enterprises in specific regions."

      That centralisation has occurred for about 130 years and cannot be unwound since all of our major food export companies are very concentrated, and, again, are not going to be unwound.

      One way or another they will be unwound. Either we do it now, proactively, or we wait until climate/ecological collapse forces us to. There has been much more centralisation in recent decades, and that makes food supply less resilient as climate changes.

      The link to Queenstown Lakes food resilience project is lovely but in reality tourists want everything right here right now all the time, and pay for it. Tourism is the QLDC economy. And practically, the QLDC climate demands that we import most of our food.

      In Wanaka we now have 10 2×1 raised beds and it will take a year before they give 20% of what we need ourselves. Happy to buy local if it's there but generally small scale farmers price according to what tourists will pay, which is of course exhorbitant.

      Tourism as we know it currently won't survive the climate crisis that's already locked in, let alone if we don't act to prevent worse. Did QL not learn anything from the pandemic? If it continues to put its all its free range eggs in that basket, it will be a laughing stock next time there's a tourism shock. Fortunately there are a lot of people in the area working on resiliency and sustainability, so fingers crossed the council and business leaders will get on board sooner rather than later.

      I know people in that district who grow a large proportion of their food. The local climate doesn't prevent that. But the point here isn't that everyone has to grow their own food, or eat only local. It's about how to make the systems resilient to the coming conditions.

      That means localised and diversified as appropriate. Local might mean back garden, neighbourhood, community garden, local farming, regional farming, importing from other provinces, importing from other NZ islands, importing from the Pacific. Concentric rings, with most of our needs can be met within the closer circles. By the time we get out past the Pacific we should be thinking about coffee and chocolate, not grapes from California. A fairly simple analysis of energy shows why that matters, but looking at food production and other resources helps too, as well as ecology (bees and almond production is a good one).

      • Ad 4.2.1
        5 August 2023 at 3:59 pm

        I'm not sure you understand what rail is for. It delivers massive, heavy bulky items from a mine or factory to a port. It's never going to retail organic boxes to sporadic urban networks.

        Rail takes about 13% of NZ's freight task. Rail is currently way, way too unreliable now to load more freight onto it. That will take many years to fix. In Ruakura they've just opened it to rail which is a big step, but it's handling milk powder, logs, cars, machinery, and containers.

        The useful model is for little electric vans to scoot around a region buying and selling according to local surpluses. The Longwood Loop is a good example but there are others like Woop, Casual Foodie, Good Food Collective and Foodbox that do this really well.

        The systems aren't magical, and don't involve rail. The system is simply entrepeneurs with attractive websites and networks and vans assisting a connection from one little specialist to another. The only useful network innovation to that is digital and enables change in minutes not years.

  5. Shanreagh 5
    5 August 2023 at 1:37 pm

    By the time we get out past the Pacific we should be thinking about coffee and chocolate, not grapes from California. A fairly simple analysis of energy shows why that matters, but looking at food production and other resources helps too, as well as ecology (bees and almond production is a good one).

    This is an important point to be remembered Weka when talking to those who say…but. but .but we import chocolate and coffee and sugar. We do this because at the moment we cannot grow them here in NZ, in the quantities needed.

    We can grow table grapes, they come seasonally. So we are not deprived of table grapes…we just need to wait to buy them in NZ or buy them from Aus whose seasons line up with ours and with whom we have close economic ties. Actually getting them from Aus even with the food miles is better to me than the US, as they are in season, Aus has a wide variety in climate and the grapes are probably paddock grown.

    What makes me wonder is sometimes with the mandarins/oranges from Aus compared with NZ. Sometimes they are cheaper in the supermarkets than their NZ counterparts.

    I think it would be great to have an examination of supermarket buying patterns and how they (deleteriously imo) directly affect local growing. Particularly product placement from regional industries/growers. Apparently supermarkets have a limited direct spend for products in their region. They are encouraged to buy through the hubs (South Island one in Chch). This means that locals have no market really for specialist or seasonal products, except at the gate or farmers markets.

    • weka 5.1
      5 August 2023 at 2:03 pm

      pretty sure we could produce sugar here if we really had to. The issue will be if the in-country transport miles are better than importing from Australia. eg might be better to ship from Queensland to the SI than from Northland, but Auckland might be able to get its sugar from close to home.

      Coffee, chocolate, vanilla (!) etc could come from our Pacific neighbours.

      Harder to see the rationale for importing grapes, or any fresh produce. Why not just have them as a seasonal food? I'm guessing the carbon footprint of refrigerated and frozen shipping isn't pretty, better to keep it for essentials.

      • Shanreagh 5.1.1
        5 August 2023 at 2:52 pm

        Agree with you – coffee, choc, vanilla can come from Pacific neighbours.

        I agree about table grapes & California and keeping fruit & vegetables seasonally, and if we really needed an extended season (do we?) we could get from Aus.

        Transport is important.

        • Mike the Lefty 5.1.1.1
          5 August 2023 at 3:19 pm

          It is all very well to say that WE should treat fruit and veges as seasonal but we have vast fruit growing areas like in Central Otago and Bay of Plenty dedicated to sending fruit to Asia and Europe in their off-season making billions of dollars for our economy.

          • weka 5.1.1.1.1
            5 August 2023 at 3:21 pm

            NZ can lead the way on relocalised, regeag, seasonal eating diets and economy.

            It's not like those export markets are going to survive climate collapse anyway.

            • Mike the Lefty 5.1.1.1.1.1
              6 August 2023 at 10:06 am

              A little footnote here.

              A few years ago I visited the Te Puke kiwifruit farm with the big kiwifruit emblem on the state highway.

              It was January, off season for production and when I asked about buying any fruit I discovered the only kiwifruit they had was imported from Italy.

              Keeping overseas markets supplied with fresh fruit has become a market normality, seasonal deficiencies no longer acceptable. Carbon footprint irrelevant.

              • weka …
                6 August 2023 at 11:15 am

                I assume it's why the stone fruit we buy in supermarkets is often poor compared to what is actually grown. The best stuff gets sent off shore.

                • Mike the Lefty …
                  6 August 2023 at 11:44 am

                  Yes. The fruit we get at supermarkets like Pak'n Save is absolute crap compared with the good stuff exported. The export fruit is handled as little as possible compared with the bruised stuff we get sold domestically. Plus the supermarkets don't worry too much about handling and storing produce correctly – I was told this by a person who used to work in the produce department of a Palmerston North Pak'n Save.

  6. Phillip ure 6
    5 August 2023 at 6:54 pm

    No thoughts on the elephant in the room…the heavily polluting animal extractive industries…?

    Noting that the number one polluter in nz is fonterra…and seven of the other nine are slaughter houses,.(stuff published this top ten some months back..)

    That inconvenient truth,. that just won’t go away…eh..?

  7. PsyclingLeft.Always 7
    6 August 2023 at 1:15 pm

    AFRA says one third of all food produced goes to waste and food rescue is part of the solution.

    https://www.1news.co.nz/2023/07/04/a-closer-look-at-some-of-the-foods-going-to-waste-in-aotearoa/

    The shitberg of NZ foodwaste. Especially when its been transported. At cost… to our Climate.

    "Super" market duopoly filling their shelves….to waste most of it?

    Good on AFRA, Fair Food, and all the other Good Guys trying to make a difference.

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