Cutting overcapacity in the meat industry is the ''wrong
argument'', and instead the sector needs to grow and fill
global markets, Federated Farmers meat and fibre chairwoman
Jeanette Maxwell believes.
Rural media was ''abuzz'' with negative news, reflected in
the rural lobby organisation's soon-to-be released mid-season
farm confidence survey, Mrs Maxwell said.
Some farmers were getting returns for prime breeding ewes
that were 50% down on the corresponding time last year. It
was experiences like that which had generated a lot of
comment about the need to cut overcapacity.
Mrs Maxwell urged farmers to support the $65 million
Collaboration for Sustainable Growth programme announced this
week, saying it could ''supercharge'' New Zealand's red meat
Up to $32.4 million from the Ministry for Primary Industries'
Primary Growth Partnership Fund (PGP) has been approved for
the programme, while Beef and Lamb New Zealand is seeking
farmer support to invest up to $2.8 million per annum over
Growing and filling global markets would, in turn, create an
industry that young people aspired to, Mrs Maxwell said.
Sheep and beef farmers sorely needed better returns to create
sustainable and viable businesses. At times, revenue had
''seemingly resembled an oscillograph'', she said. While
there was international demand for red meat, the problem was
realising that as returns that farmers and the country
needed, she said.
In the year to December 2007, red meat exports represented
about 58% of dairying's export value, but in the year to
December 2012, that figure had fallen to 45%.
''If we had kept up the percentage recorded in 2007, our
exports would be some $1.4 billion greater. That difference
is more than what the entire fishing industry earns so this
Collaboration for Sustainable Growth PGP stacks up, whichever
way you look at it,'' she said.
There was a ''who's who'' of the processing sector engaged in
the initiative, with ANZ Bank, Deloitte and Rabobank also
signed up. With six meat processors involved, it showed a
willingness on their part to see some change and she believed
it was a ''huge opportunity''.
Richard Strowger, who is on Federated Farmers' national meat
and fibre executive and is also North Otago Federated Farmers
president, said such initiatives were needed to put
profitability back into the red meat industry.
Alliance Group chief executive Grant Cuff said the new
co-ordinated collaborative initiative would enhance the
knowledge and capability in the sheep and beef sector and
help improve farm performance, productivity and
The initiative was an important step in the implementation of
the red meat sector strategy and Alliance was supportive of
''any steps to lift the industry's game and improve on-farm
The red meat sector strategy, initiated by the Meat Industry
Association and Beef and Lamb NZ and released in 2011, aimed
at improving the sector's viability and increasing its
earnings from $8 billion to $14 billion by 2025.