On co-operation: great minds do think alike

In the wake of the Justice Bill Wilson issue, I feel I should disclose that I have a financial relationship with Alliance in that they send me money every time I send them lambs.

Two weeks ago, I attended the Silver Ferns Farms (SFF) et al Farm IQ launch at Telford and congratulate the board for taking an initiative towards proactive change.

The show was well led by Doug Avery, an interesting and progressive farmer from Seddon. He is the green oasis among the brown.

I do not find myself in a position to strongly advocate in favour other than observing that if you are a SFF supplier, it would be a no-brainer.

I am a solid Alliance supporter, which I think goes back to the days ( after Fortex and Weddell) when I went along with few chums from Feds to chat with former PPCS chief executive Stewart Barnett about what I felt was the shambolic state of our industry, which would be fixed quite easily by requiring farmers to commit on a seasonal basis.

PPCS held a different view at the time and expressed that in fairly unambiguous terms.

Time has moved on, and the board of SFF is a bit concerned about the state of the sheep industry. I would have thought there was enough supporting data on that one to require no more.

One thing I did find interesting at the launch was that while after six years, if I recall correctly, the return on the investment in the programme was $137 million, we could, according to more than a few commentators, earn a heap more than that just by working together, i.e. a spot of amalgamation of processors.

Enter the letter just sent out by SFF asking farmers if they would like to look at a greater level of co-operation. Talk about great minds think alike, or fools seldom differ.

The response to this idea from my processor is interesting.

While it is easy to understand that Alliance and the other processors were justifiably very, very grumpy when PPCS chose to play in Craig Norgate's sandpit at 11.30pm last time everyone got together, that, as they say in the Vogels advert, was years ago - get over it.

We have heard over the past few years that one issue precluding greater co-operation, has been the disparity of value of the two co-operatives. Fair enough, perhaps.

Assuming that was/is the case, a differential schedule for a get-together three years later would remedy the inequity.

That view also overlooks that the relative profitability of our industry over the past decade or so means that crowing over any of the co-op/meat company profit figures is a bit like being excited about winning the tallest dwarf competition. One is still somewhat short of a length.

Our industry is struggling and cries out for co-operation.

It is a reasonable observation that the accumulation of farm debt and or selling to or converting to dairy is occurring at a similar rate regardless of which company we send our lambs to, which suggests that we are all in a similar boat complete with holes.

The notion that half the lamb kill does not give enough market strength to make a difference is a bit odd to me. I do not believe any of our supermarkets have more than 50% of NZ supermarket trade, but the owners seem to build very expensive second homes in some of the really nice spots of NZ, indicating suitable profit levels.

It is a given there will be a great deal (as in lots) going on behind the scenes that I am not privy to, though I am aware there is already quite a bit of working together on specific areas.

That said, I struggle to get past the idea the oft-mentioned $10 per lamb to be gained within NZ by working together should be grabbed.

Our processors have made huge strides within our New Zealand plants. Those who have not been through a plant recently might find it illuminating to do so this season.

I suggest that we are lucky to have some seriously committed, passionate and able people working away on our behalf.

Would we get a better return from the above efforts if they did not constantly have to come up with ways of getting a few hundred thousand lambs off the other players?

The interesting thing with the SFF approach, with or without warts, is that farmers can please themselves whether they have a direct say. Thus far, that has been difficult.

I encourage all lamb producers to consider our challenges and ponder whether a bit more co-operation is in our interests.

• Graham Clarke is a South Otago organic farmer.
graham@maramaorganics.co.nz

 

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