Silver Fern Farms and the Alliance Group, agree that further consolidation is needed in the meat industry.
But both big farmer-owned co-operatives see different obstacles in the way of the farmer campaign to merge the two co-ops as the starting point for forcing wider changes in the industry.
The Meat Industry Excellence group is frustrated at the failure of the major processors and exporters to agree on any reform measures after months of discussions. It is pushing a merger idea in co-op board elections currently underway.
However, Alliance Group chair Murray Taggart of Canterbury says it does not support the view that the co-operatives should be the main vehicle for consolidation and bear the costs.
"The idea that shareholders and other companies should get away scot-free with the consolidation costs and it should be the co-operatives that wear it doesn't appeal too much to us," he says.
Looking specifically at Silver Fern Farms and the Alliance Group, he says the merger does stack up on a commercial basis.
"If you're going to even contemplate this sort of thing, you've got to have companies that are profitable, with strong balance sheets, with up-to-the-mark plants and with capacity in line with throughput, and that's not the world we live in at the moment," he says.
Silver Fern Farms chair Eoin Garden, who is retiring after the board elections, thinks it is inevitable that the two co-operatives will join forces eventually but he says that cannot happen yet.
"We've always believed it would be preferable, but it is preferable once we identify a strategy to extract more wealth, create more value from the marketplace," he says.
Mr Garden says there is a potential to lose supply to other operations during the merger, and if that happens all the added benefits of being a bigger co-operative will be written off.
Silver Fern Farms will announce its financial results for the past year on Monday.
