Innovation

Southern Pastures manages a portfolio of twenty regenerative dairy farms spanning 6,600 hectares (or 16,400 acres) of land across the beautiful South Waikato and Canterbury landscapes in New Zealand. Regenerative farming is a method that aims to reverse the damage done to our water, soil, climate, and biodiversity and is currently practiced by just a small number of farmers globally. The term ‘regenerative’ broadly describes Southern Pastures’ approach, though their focus has been beyond restoring (or regenerating) the environment and more firmly on thriving for the future. Early on, Executive Chairman Prem Maan and his team understood that by adopting a farming model with environmental sustainability at the forefront of the operation, the long-term benefit to investors, consumers, the community, and our planet would far outweigh the initial costs. According to Prem, “Responsible capitalism is probably the founding principle [of Southern Pastures].” It’s believed that against the backdrop of society blaming agriculture as the culprits of climate change, it can be part of the solution to solve it. Southern Pastures continues to prove this with science whilst also demonstrating to other farmers that profits and sustainability are not mutually exclusive.

Southern Pastures’ on-farm commitments capture their ‘10 Star Certified Values’. The ten values are grass-fed diets, 365 days free-range, no GMOs, animal welfare, human welfare, no palm or tallow products, environmental sustainability, antimicrobial stewardship, climate change mitigation, and no added rBST or other hormones. All ten of these values meet on all twenty of their farms. These values are a trusted benchmark for pastoral farming excellence and are independently audited by AsureQuality - a New Zealand Government organization.

Inspiration

The high esteem held for the animals, land, waterways, community, and indigenous Māori culture is what drives Southern Pastures forward. Prem states, “Our business is not based on short-term economic returns, but long-term sustainable economic returns. As we go forward with the environmental challenges, value has to be the only way forward.” The team at Southern Pastures is sure that responsible decisions made today will protect our planet and ensure long-term value and economic performance in the future. For example, New Zealand is the largest importer of PKE (Palm kernel expeller) to feed livestock. However, knowing how devastating the extraction of palm products is to rainforests, and with plenty of grass available in New Zealand, it simply did not make sense for Southern Pastures. As climate change continues to disrupt weather patterns, as regulation gets tighter, and as consumer preferences change, the values and practices embedded within Southern Pastures ensure protection against changing conditions and business risks.

Furthermore, Associate Director Lynette Maan emphasizes that Southern Pastures is enthusiastic about sharing knowledge and empowering other farmers. With the backing of science and the correct values, a transition to regenerative farming can be successful for all farmers. And as a result, animals, customers, investors, community, society, and our planet can collectively benefit from such changes.

Overall impact

In 2022, Southern Pastures became the first New Zealand company to be shortlisted for the World Sustainability Awards. Lynette puts this success “down to the authentic story we’re able to share about our on-farm sustainability practices, our rigorous independent audit process, all the way through to the 10-star butter we have on the shelf in NZ, Singapore, and the US.” Southern Pastures’ farms emerge as a solution to the problem New Zealand currently faces in agriculture, making up a whopping half of all greenhouse gas emissions to the backbone of its economy. The success of Southern Pastures inspires other farmers to move away from intensive farming models that cause high emissions. Kaitiakitanga (guardianship of the environment), integrity, and the trustful relationships Southern Pastures maintain with its stakeholders continue to help the company to thrive.

Business benefit

Southern Pasture's focus on sustainability forms a competitive advantage in the market. Customers (and businesses) are willing to pay the premium for values and ethics. The market is changing now. Consumers want Values for money rather than value for money. Among the things they [ask] is: How have the animals been treated? How has the environment been treated? What are you doing about climate change mitigation? "So it is a question of looking at the whole set of values around it, Prem notes." He adds, "As we go forward with environmental challenges, value has to be the only way forward."

With this perspective, Southern Pastures have grown to become one of the largest dairy farmers in the country. They have created a cycle of sustainable growth whereby healthy soil leads to healthy cows producing healthy products for consumers, generating healthy revenues allocated to build healthier communities, relationships, and the workplace, and reinvesting into the cycle. While their approach to farming may have initially come at a considerable cost, Southern Pastures is proving that, in the long term, their model delivers increasing economic returns and environmental sustainability.

Recently, Southern Pastures acquired full ownership of Lewis Road Creamery - a dairy brand loved in New Zealand and best known for its chocolate milk collaboration that was so good that it started a black market. Like all the Southern Pastures’ farms, Lewis Road Creamery fully abides by the 10 Star Certified Values. And in 2021, Southern Pastures became the first farming entity to sign a sustainability-linked loan in Australasia. This arrangement means they will receive financial incentives for meeting new water quality & biodiversity targets, including further reductions in its already low carbon emissions. Additionally, with an increasing number of major global corporations such as General Mills and Danone seeking to source products from farms that are classified as regenerative, Southern Pastures are superiorly positioned to grasp exciting international growth opportunities in the near future.

Social and environmental benefit

Humble Kiwis (New Zealanders) manage Southern Pastures and practice great care for their people and the local community. From offering regular training sessions for employees, providing over 600,000 meals to charities and food banks, to investing in 69 homes for Farmer-Partners and their staff, Southern Pastures are the embodiment of what it means to practice responsible capitalism. Along with its 10 Star Certified Values, Southern Pastures is also a signatory to the United Nations Principles for Responsible Investments (UNPRI), the FAIRR Initiative, and the Responsible Investment Association Australasia (RIAA).

Southern Pastures uses empirically-proven products, tools, and ideas and partners closely with local universities and third-party and government research agencies to reduce its carbon emissions. Southern Pastures’ ultimate intention is to become a net extractor of atmospheric carbon, to become climate net positive. They continuously implement available techniques and never shy away from trialing innovative technologies that arise. For example, 100% of effluent from their farms is captured and stored in the soil to prevent run-off into waterways. The effluent storage is achieved through low-tillage and crop rotation to preserve valuable nutrients and reduce animal methane emissions. The effluent captured in the soil also improves the soil quality to sequester more carbon, which produces superior grass, making healthier and more nutritious milk. This kind of integrated thinking - backed by empirical research - has made Southern Pastures successful environmentally and economically.

Interview

Lynette Maan, Associate Director