Nearly 1000 farmers gathered in Gore yesterday to overwhelmingly support a mandate for radical change in the beleaguered red meat industry.
There was standing room only in the Gore Town and Country Club for what spokesman for the newly formed Meat Industry Excellence Committee Allan Richardson later described as a ''key day'' for the industry.
The West Otago farmer said it was a day when the industry decided to change for the better. But he also warned it would not be a ''quick fix''.
The group was seeking a mandate from farmers to work with the meat companies to develop a plan for consolidation in the industry.
It wanted to see farmers and the meat industry working together to maximise returns and profitability for all involved. Following input from farmers and meat industry representatives, long-time farmer Harry Brenssell moved that farmers support the six key principles outlined by the committee. Rather than a show of hands, meeting chairman Gerry Eckhoff asked those present to stand if they supported the mandate.
In response to the ''standing ovation'', Mr Eckhoff said it was the first time in 40 years he had seen such unification in the industry.
Earlier, in outlining the plan, West Otago farmer Fiona Hancox said farmers were ''over the roller-coaster of prices'' they received.
''Having one or two good years in 10 doesn't stack up in any business,'' she said.
If they did not show unity or strength, they would continue to face the same frustrations and inefficiencies, and more would leave the industry. Mr Eckhoff, who chaired the meeting, said the industry was failing and the tipping point was not far away.
Doing nothing was no longer an option for any of those gathered. Suggestions that the concept for change sought involved a Fonterra-model was ''simply not correct''.
''Nobody has suggested we should just emulate what is happening with our cousins in the dairy industry,'' he said.
Richard Young asked if meat company directors were willing to change, support the six principles outlined by the group and be prepared to work to facilitate ''some form of change''.
Alliance Group chairman Owen Poole said there was not a meat processor or exporter in the country that did not think a better model should be employed.
Alliance Group and Silver Fern Farms had been talking for some time about that prospect and were still in discussions. One of the group's principles was for up to 80% of the red meat processed and marketed by one ''coalition of the willing'' structure.
Silver Fern Farms chairman Eoin Garden said that was a ''huge challenge''.
''Look how the dairy industry is fragmented because all of a sudden when you get a major player ... Federated Farmers or farming leaders get up and say we need another player in the industry to keep the big fellow honest,'' Mr Garden said.
Farmer David Eckhoff said farmers needed to focus on what they could control. Farmers owned Silver Fern Farms and Alliance Group, and if they joined together, they would make up 50%-60% of the market and that would be ''a good start''.
Mr Poole warned a merger of the co-operatives would mean they would bear the burden of the amalgamation costs. There were significant costs in that, which should be shared across the industry, whether you were a co-operative supplier or non co-operative supplier. He estimated it at between $250 million and $300 million and asked co-operative suppliers if they wanted to ''pick that up on your own''.
He urged those present to be careful with the process and to ''get it right''.
Guest speaker ANZ chief economist Cameron Bagrie was a ''big believer'' in consolidation across the meat industry. He believed the natural operating model for New Zealand was ''one big operator and four to five little buggers to keep the big fellow honest''.
At the end of the meeting, Mr Richardson said the committee wanted to work with the meat companies. He expected further meetings throughout the country.
The essentials
The six principles outlined by the Meat Industry Excellence Committee. -
• Up to 80% of red meat processed and marketed by one ''coalition of the willing'' structure.
• Identify and extract best personnel and strategies. Contracting of stock to specification; need to commit to a company.
• Legislation required to support new structure be sought.
• All participants to fund restructuring.
• Suppliers to be treated fairly, equally and with full transparency.
