Red meat reformers take pulse of the South

Meat Industry Excellence is promising to give farmers a ''road map'' for reform of the red meat industry. Photo by Craig Baxter.When it comes to sorting out the red meat industry, Ross Hyland likes to use an analogy, comparing it with the situation Air New Zealand faced.

When former chief executive Rob Fyfe and chairman John Palmer came on board, they questioned why the company was flying planes ''half full'' up and down the country. But instead of launching promotions to try to fill those planes, they downsized.

''Bums on seats'' in the airline industry was no different from lambs on chains in the meat industry, Mr Hyland, a Waikato agribusinessman and principal adviser to Meat Industry Excellence, asserted.

The major capacity issues in the meat industry were probably the ''number one'' problem, he said.

Ross Hyland.
Ross Hyland.
When MIE's business model came out, it would have a vision to give to farmers about how to reduce capacity, chairman John McCarthy added.

Mr Hyland and Mr McCarthy were in the South recently as part of a drive to ''gauge the pulse'' of stakeholders in the industry.

MIE, which was formed last year to push for reform in the red meat industry, is promising to give farmers a ''road map'' for that reform.

The group recently received funding from Beef and Lamb New Zealand for its business plan.

The $219,000 project included MIE contracting independent consulting firms to research improved procurement models, flow-on effects on industry profitability and communicating those findings to the sector.

John McCarthy.
John McCarthy.
Mr Hyland said it was not about whether things had lifted slightly at the moment, and farmers were doing a little better - the fundamentals still ''absolutely'' had to change.

But MIE could not come up with potential options or solutions without engaging with those involved.

During the trip to the South, they met with the likes of Blue Sky Meats, Alliance Group, Prime Range Meats and Silver Fern Farms, along with ANZCO Foods in Canterbury.

Asked what sort of response there had been from the companies, Mr Hyland said it had been ''largely positive''.

Some thought some of the goals concerning contracted procurement were in the ''too-hard basket''.

The first thing that had to be done was to get companies back to being profitable, while two-way loyalty and transparency was needed - and that was not just when dealing with co-operatives, he said.

Mr McCarthy said the fundamental message they had from farmers was they were sick of lack of trust and sick of co-operatives ''playing favourites''.

Companies were throughput-reliant and that needed to change. A stable procurement platform was needed, along with committed supply.

Farmers were ''crying out for a road map'' on how to get there and it was not an easy task, he acknowledged.

A national survey of 800 farmers was being conducted by a professional research company.

That was about trying to understand farmers' awareness of what contracted supply meant, their commitment to that kind of process, and their understanding of the difference between corporate and co-operative ownership, Mr Hyland said.

He believed if a vision could be created for farmers to turn things around, then the hard questions could be asked, answered and funded.

But MIE could not do it alone and, if farmers did not buy in, they would not get the future they wanted, Mr McCarthy said.

While acknowledging it was a ''monumental hurdle'', Mr Hyland said what MIE could do was start to provide the vision, the key things that had to happen.

Both men said it was ''not all about price'' but about the fabric of rural New Zealand.

Mr Hyland loved ''the very essence of what makes New Zealand'' and a lot of that was around the rural fabric.

If control was retained over the industry and it was run profitably, then the likes of the local school buses, churches and community halls would be supported.

Control had been lost in the processing sector in Australia and it was an example of ''what not to do'', Mr McCarthy said.

He believed the rules concerning foreign farmland ownership needed to be revisited, in light of the potential sale of the 13,843ha Lochinver Station, in the central North Island, to Chinese company Shanghai Pengxin.

There were some good foreign owners but there had to be a differentiation between those who lived and worked beside New Zealanders on the land, and those who wanted to take the fruits of their investment out of New Zealand.

''We can't surrender control of our value chain,'' he said.

Mr McCarthy said a key message from the trip was that it was bigger than the red meat sector - it was a national issue.

Mr Hyland said Mr McCarthy and the other members of MIE were an ''incredible bunch of passionate people''.

They came from inter-generational farming families who wanted to preserve that for future generations.

The MIE team had no political ambitions, rather it just wanted to make the ''sector right'' - ''not join the Beehive'', Mr McCarthy added.

''We will give it our best shot and we're not going away,'' he said.

ODT/directory - Local Businesses

CompanyLocationBusiness Type
Otago Farm Machinery LtdMosgielFarm Machinery
Ashton Glen NurseriesClintonGardening
Stirling SportsDunedinSporting Goods
BP 2 Go EverediDunedinService Stations