6 Oct 2011

Meat industry looks into online trading auctions

2:01 pm on 6 October 2011

The meat industry is investigating whether it should set up an online trading auction to sell export products, similar to Fonterra's Global Dairy Trade system for dairy commodities.

The idea has been highlighted in a report from the Red Meat Sector Strategy, a joint initiative by the Meat Industry Association and Beef + Lamb New Zealand.

The five-month-old strategy is based on detailed analysis by accountancy firm Deloitte and aims to increase the industry's export earnings of $8 billion a year to $14 billion by 2025.

Meat Industry Association chairman Bill Falconer says a research paper is being prepared to detail how the new trading platform may work.

He says the system may possibly be limited to commodity products such as manufacturing beef that goes to the United States for the hamburger trade, but could could also include lamb flaps and offal.

Meanwhile, Mr Falconer says other companies in the meat sector may benefit from lower shipping costs due to a joint venture between the Fonterra milk co-operative and the largest exporter of meat, Silver Fern Farms.

He says once Fonterra and Silver Fern determine the nature of the relationship with the shipping companies but once that is completed it will be open for others to join.

Mr Falconer says other marketing, processing and procurement projects, outlined in the strategy, are underway, which shows more collaboration is now happening within the meat industry.

A co-ordinating group representing all sectors of the meat industry has been set up to monitor progress on the strategy.

A member of the group, Food and Grocery Council chief executive Katherine Rich, says the strategy is ambitious but there's a lot more co-operation going on now.

She says a stocktake has been completed of the activity underway and a lot of work is being done co-ordinating research, business planning and offshore cooperation.

Ms Rich says it's the first quarterly report of many and clearly there's still a lot of work to be done.

The next progress report will be published in December.