Aim for red meat profitability

Those involved in the Red Meat Profit Partnership aim to help improve the profitability of sheep and beef farms. Photo from ODT files.
Those involved in the Red Meat Profit Partnership aim to help improve the profitability of sheep and beef farms. Photo from ODT files.
Beef and Lamb New Zealand chairman Mike Petersen believes there is a significant opportunity to improve profitability in the red meat industry through the Red Meat Profit Partnership initiative.

The partnership, which is now under way, is supported by the Primary Growth Partnership and involves the Government and co-investors Alliance Group, ANZCO Foods, ANZ, Beef and Lamb NZ, Blue Sky Meats, Greenlea Premier Meats, Progressive Meats, Rabobank and Silver Fern Farms.

It will invest $64 million in the red meat sector over the next seven years.

The significance of the collaboration could not be underestimated, as it drew together a big part of the red meat processing industry, along with farmers and two banks, with the common goal of improving the profitability of sheep and beef farms, Mr Petersen said.

''Profitability has been too variable and insufficient in recent years but, through this collaboration, there is a significant opportunity to improve it,'' he said.

Rabobank New Zealand chief executive Ben Russell said the imperative for change and innovation in the industry was at an all time high, with the industry along the entire value chain facing many challenges.

''In recent years, many farmers have voted with their feet by leaving the industry, due to low and inconsistent profitability.

''If this trend is to be stopped, we need to see more consistent on-farm returns for farmers. That is the goal of the RMPP,'' Mr Russell said.

ANZ's commercial and agri managing director Graham Turley said the red meat industry was performing well below its potential.

''One of the goals of this project will be to increase volume and certainty over the supply of livestock which will support initiatives to increase our market opportunity,'' he said.

Alliance Group chief executive Grant Cuff said the company looked forward to contributing to the knowledge and capabilities of those working in the sector and exploring better ways to deliver information and tools to support farmers making key decisions for their business. Meanwhile, Beef and Lamb New Zealand's lamb crop report, released this week, showed the number of lambs tailed nationally was down 4.7% on last year.

A total of 25.5 million head were tailed - 1.3 million fewer than 2012 - making it the second smallest crop in nearly 60 years.

The figure was higher than many might expect, given the impact of last season's drought on ewe numbers and ewe condition at mating, Beef and Lamb NZ economic service chief economist Andrew Burtt said.

Export lamb processing numbers were expected to drop 6.8% to 19.5 million head, making 2013-14 the third lowest export lamb total since 1960.

However, the average export lamb slaughter weight was expected to increase 2.3% to 18.4kg, due to lower stocking rates and more available feed.

That weight increase would not be enough to offset the drop in numbers and total lamb production was still expected to be down by about 5%, Mr Burtt said.

Mutton processing numbers were expected to be well back on last season, down 20% to 3.3 million.

In Otago-Southland, ewes to ram in the region remained almost static at 6.6 million. The region's lamb crop was down 1.9% on the previous spring to 8.9 million lambs, 35% of the New Zealand lamb crop.


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