18 Mar 2013

Mass meeting in Gore urges meat industry overhaul

8:02 pm on 18 March 2013

A thousand southern farmers have agreed that the red-meat industry must be overhauled and given a Fonterra-style structure.

The decision was made at a three-hour meeting on Monday in Gore, where hundreds of sheep and beef farmers from across Otago and Southland, and from as far afield as Hawke's Bay, had gathered at the Gore Town and Country Club to discuss the issue.

A series of speakers called for new business models and mass amalgamations of meat processors, saying the industry is failing and the status quo is no longer an option.

The farmers then stood almost unanimously to agree to changes, including having more than 80% of all processing and marketing done by a single, Fonterra-type organisation.

One of the meeting's organisers, Allan Richardson, says they're overwhelmed by the response, with a turnout bigger than they had expected. He says they now have the mandate to hold other meetings throughout the country after Easter.

Mr Richardson says sheep farmers have had enough of enduring small price peaks then massive troughs because of the fractured nature of their industry.

Hundreds of farmers came to the meeting.

Hundreds of farmers came to the meeting. Photo: RNZ

The last serious attempt to explore consolidation was in 2008, when one of the two big co-operatives, Alliance, launched a plan to unify 80% of the industry's production.

Despite strong farmer support the two biggest meat processors could not agree and nothing came of it in the end.

Beef and Lamb New Zealand chairperson Mike Petersen thinks farmers are in a grumpier mood now than the last time lamb prices were low in 2005-08.

However he says they need to be very clear about what they want to happen. "Some of the implications of merging companies are things that will be tough for farmers in the short term, particularly around capacity, but they do need to be addressed," he says.

Mr Petersen says whatever consolidation occurs will need to involve Silver Fern Farms and the Alliance Group, as well as other companies.