The red meat sector strategy, initiated by the Meat Industry Association (MIA) and Beef and Lamb New Zealand and released yesterday, is aimed at improving the sector's viability and increasing its earnings from $8 billion to $14 billion by 2025.
Agriculture Minister David Carter welcomed the strategy, saying it was an ambitious plan to lift the performance of the industry and give it clearer direction.
The report, by Deloitte, identified the greatest potential uplift in sustainable profitability would only be delivered by all sector participants' taking action in three key areas. -In-market co-ordination: creating a strong brand position and acting with scale through greater co-ordination of exports to enlarge targeted markets.
Efficient and aligned procurement: a critical need to shift the focus of competition from the farm gate to offshore competitors.
Sector best practice: developing farming systems and improving productivity at all stages of the supply/value chain, leveraging research and development and knowledge transfer.
New Zealand Institute of Economic Research modelling suggested a 1.3% increase in GDP and real value change of $3.4 billion per annum by 2025 if the strategy was successfully implemented.
Key stakeholders have said the change and subsequent benefits were needed within the next five years, to prevent further erosion of the industry through inconsistent profits and conversion of sheep and beef farms to other uses.
Asked whether he was confident of buy-in across the sector, Beef and Lamb chairman Mike Petersen said the strategy had received an unprecedented level of collaboration and there was "real commitment" across the industry.
A strategy co-ordination group, initially chaired by Mr Petersen and MIA chairman Bill Falconer, is being established to promote the strategy, monitor and report back on progress. The composition of that group is yet to be determined.
Mr Falconer described the report as a very positive step. The industry had always been strong and would always be there; what the report addressed was how it could be made "enduringly profitable".
Silver Fern Farms chief executive Keith Cooper said the report contained "no silver bullet", rather it was laying out where a panacea could be.
Mr Cooper had always maintained there could not be an industry strategic plan because industry participants all had differing views on what worked for them. At best, it could only be a framework.
It was up to farmers and companies whether they wanted to change or adapt different practices.
In the present environment, farmers were probably doing all right and the incentive for change was not going to be the forcing factor.
From Silver Fern Farms' perspective, the report validated the co-operative's strategy entirely, Mr Cooper said.
Alliance Group chief executive Grant Cuff believed it was a good start. He understood it was the first time there had been a report that genuinely covered from the farm right through to the marketplace.
Alliance needed to have a look at the report. It appeared to be "sensible" and he hoped those across the sector would look at it carefully and look at areas they could work towards.
Middlemarch sheep and beef farmer Lindsay Carruthers said change needed to be driven from the marketplace. "We can produce a raw product but if they don't require it, they won't buy it."
Mr Carruthers, who is preparing for his annual bull sale next month, welcomed any attempt to improve viability of the industry, saying it made his business, as well as other service industries, more profitable.