11 Aug 2015

Performance potential in red meat industry

7:51 am on 11 August 2015

ANZ Bank sees huge performance potential in New Zealand's red meat industry.

Managing director Graham Turley said research showed confidence was high among red meat farmers, whose returns were currently the best of any agricultural sector in the country.

meat processing (stock photo)

Photo: 123RF

"There's good demand for the product and they're getting good prices.

"The currency, with what it's done recently, is an added bonus as well. So if a farmer is getting good prices and a good return - he feels good about it, he invests in his business which creates better returns.

"I think they're delivering a product that's better now than in the past and a product the market is looking for."

But with the average age of red meat farmers nearing 60, Mr Turley said 70 percent of farmers it surveyed identified business succession as an issue.

"Our businesses and our farmers need to talk about it more. Prepare and plan for it so you get a good transition of management coming through or ownership continuity.

"Some of them may be looking to have succession to either management or families. If it's about handing the farm on or handing the business on, the real message is: we need to start talking about that and planning for it, so it can happen in a nice transitional way."

Mr Turley said of the 275 farmers surveyed, improving pasture was the most popular investment to increase production, followed by fencing, fertiliser and animal genetics.

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