5 Jun 2015

Mixed reaction to collaborative meat marketing plan

2:40 pm on 5 June 2015

Federated Farmers is backing Beef + Lamb New Zealand's plan for a new marketing body.

Beef + Lamb New Zealand is proposing a joint venture with meat companies, that would promote New Zealand sheepmeat and beef in overseas and local markets.

The Meat Industry Association will decide its response next week, but Beef + Lamb New Zealand said more than half the processors and exporters so far had shown interest.

The new marketing entity would have a starting budget of about $8 milllion, half funded by Beef + Lamb from farmer levies.

Federated Farmers meat and fibre spokesperson Rick Powdrell urged meat companies to get behind the scheme.

He said primary industries in other countries were out-muscling New Zealand meat in export markets and said the meat export industry needed to make up lost market ground.

"It was something that was identified in the red meat strategy back in 2011, that there was a need for this sort of promotion in the market, and it needed to be industry driven. For a long time Beef + Lamb have been been doing this on their own, and I think it's actually really positive if it is a collaborative approach between Beef + Lamb and the companies.

"I would hope that they would get on board and that it doesn't get hijacked by politics, because I think our members would be very positive about this approach to it, and it's a real sign of the industry getting together. If there's one thing our meat industry doesn't do well, it's working together."

Mr Powdrell warned however, any such promotion plan would take a while to make a real difference in prices.

John McCarthy.

John McCarthy. Photo: SUPPLIED

But Ohakune farmer John McCarthy, who chairs the farmer Meat Industry Excellence group campaigning to overhaul the industry is unimpressed.

"I think that this is fiddling around the edges. I think it's a perpetuation of the status quo, where we're losing 3000 sheep a day. I don't think it does anything to address the fundamental problems associated with this industry.

"In fact I think the industry-board concept has been a total failure. We're in a perilous position in the sheep industry and if it had worked, the value would be easy to see.

"This belief that somehow industry and farmer fortunes are the same has led to a lessening in the ability of Beef + Lamb to provide genuine farmer leadership. They're always trying to have a bob each way."

Mr McCarthy said the meat industry would gain a lot more ground by supporting MIE's proposal to restructure the two big meat co-operatives, Silver Fern Farms and Alliance Group, into a new company concept the group calls 'Newco".

He said it was a concept that had been run past banks and other financial institutions.

"It is bankable, so it's not just MIE's opinion and we believe it's a really exciing concept. Taking the best out of the two co-operatives, and blending them together and parking the worst bits - and they've both got bad bits.

"But the reform has to start with the co-operatives. We think this has the ability to turn the whole industry around."

Mr McCarthy said MIE had written to the two co-operatives asking for a meeting to discuss its Newco concept. He understands one of them has responded so far, agreeing to a meeting. He said there was some urgency about it, as Silver Fern Farms was currently exploring options for outside funding which could bring foreign investors into New Zealand's biggest meat operation.

Meanwhile, Sheep and beef farmers who pay levies to run Beef + Lamb New Zealand will be asked later this year whether they want to continue their support.

Levy-funded bodies are required by law to hold referendums of those paying for their services every six years.

Beef + Lamb has not set a date yet for its referendum, but is asking farmers to check that they are registered with it, so they can vote.

Chief executive Scott Champion said it has built much stronger connections with farmers since the last levy vote and it would be expecting them to continue their backing for its services, which range from funding research to market promotion and farm extension programmes.

"I think a lot of the programmes that we've delivered, or developed, over the last six years, will continue. So for example last year, we delivered about 360 events and all up I think there were about 1700 attendees at those events on farms, so that's really grown significantly. I think about five or six years ago we had about 30 something individual farm sites across the country that were participating in our programmes, now we're up to 120 or 130."

Beef + Lamb New Zealand collects levies of about $23 million a year. Farmers pay 60 cents a sheep and $4.40 per head of cattle.