Red meat is regaining a starring role. Photo by Stephen
The red-meat sector is showing signs of putting decades
of low profits and lack of reinvestment behind it and regaining
a starring role in the New Zealand economy.
The ANZ Privately-Owned Business Barometer surveyed 779
farmers, including red-meat farmers and discussion groups,
and found most participants were planning investment in their
farms to increase productivity and take advantage of rising
global demand for protein.
ANZ commercial and agribusiness managing director Graham
Turley said over the past two decades, red-meat farmers had
not enjoyed the same stellar gains as dairy farmers due to
decreasing real prices, rising costs, lack of reinvestment
and industry structure that did not encourage collaboration
or economies of scale.
''The survey found the sector was confident conditions were
right to regain some of the lost momentum and play a bigger
role in the New Zealand economy.''
Farmers spoken to had active strategies in place to take
advantage of rising global demand for protein and advances in
agronomy and genetics to increase production, he said.
Structural issues within the industry remained unresolved,
but many farmers had an expectation solutions were emerging
that would lead to better integrated supply chains.
Looking ahead, it was likely red meat would see faster
productivity gains than dairy, Mr Turley said.
Many operations were already achieving outstanding results in
excess of averages. The top 20% of farmers were achieving
productivity of about four times more than the average,
irrespective of land class and location.
''They rightly have the confidence to reinvest profits to
lift productivity and generate long-term wealth.''
At a glance
Sixty-five percent of red-meat farmers plan to increase
production in next three to five years. Of those:
• 84% plan to invest in pasture.
• 69% plan to invest in animal genetics.
• 53% see benefit in getting expert help in
improving farm productivity.
• 63% say succession is about passing the farm to
family or whanau.
• 34% say purchaser ability to finance a deal is
the key barrier to succession.