Southern Pastures is of the view that there are several irreversible global megatrends influencing the world that support the Southern Pastures LP proposition. There is increasing evidence that climate change is accelerating the hydrologic cycle (rate at which water evaporates and falls as rain or snow). This is likely to make wet regions wetter and drier regions drier – with longer and more severe droughts between more intensive periods of rain that is difficult to utilise productively.
Agricultural land is an absolute human necessity producing the basic needs for food, clothing, and increasingly energy. The global population is expected to increase from its current level of 6.5 billion to 8.5 billion by 2025 and to between 9 – 14 billion by 2050, most commentators expect the global population to stabilise at 9 – 10 billion. This increased population will require food and will encroach on arable land for housing, stress water resources and have increased energy needs again using up precious land resources for biofuels.
The amount of water in the world is limited. Only 2.5% of the world’s water is not salty and 66% of that is locked in icecaps and glaciers. Of the remaining freshwater available, 20% is in remote areas and a lot of what falls is increasingly arriving at the wrong time and place (as monsoons, typhoons, and floods). It is estimated that humans have available less than 0.08% of all the Earth’s water for practical use.
Fish stocks are declining due to over fishing, climate change, pollution and run-off of minerals from land. The majority of the world’s fish stocks are fully exploited meaning that any further exploitation would be unsustainable. Alarmingly, almost a third are already overexploited.
New Zealand is ideally placed to capitalise on the opportunities presented by the Asian region’s growth story. Whilst the G7 countries contracted during the 2008-09 recession, China, India and South Korea grew substantially. Since then Indonesia has also shown a strong growth trajectory. The combination of higher monetary reserves, populations increasing their disposable income and the higher purchasing power of the local currencies further supports the dietary changes of Asians and in particular the consumption of more animal protein.
In the developed western economies, butter is back in vogue with a vengeance as consumers now recognise that it is a healthy fat. Australia, for example, has gone from being a significant butter exporter to becoming a major butter importer – a position that is not likely to reverse.
Additionally, worldwide, consumers are becoming better educated and more conscious and deliberate in their food buying behaviours. While the consumer activism pressures are different in different countries, they cover areas such as health, environmental impact, food safety, and animal welfare with some early signs that water utilisation will become a key concern as well.
In essence, New Zealand and Southern Pastures LP are ideally placed to take full advantage of these global megatrends and utilise New Zealand’s fortunate geographical placement in the world that provides it with a benign temperate climate and water riches. This allows us to have abundant free-range cows grazing on pristine Southern Pastures.