Alliance Group shareholders will learn the view of its board in a letter being delivered today.
It is understood a letter has been sent to shareholders of the Invercargill meat co-operative outlining the board's vision for the future, which contains ideas that more than tweak the struggling industry.
Farming leader Forbes Elworthy will put forward his case to farmers at the Southern Field Days starting in Gore today, as confidence among the sheep meat industry continues to evaporate, accentuated by a dry summer in many regions.
It is a similar message to that of University of Otago graduate James Williams, who studied the meat industry structure in 2007 and advocated creating a dominant marketer and processor - which he would call the Global Meat Company - by merging the two co-operatives, PPCS and Alliance Group.
The merged company, in a similar fashion to that of Fonterra, would handle 60% to 70% of the nation's sheep and beef kill, with independent industry players outside that entity acting as a benchmark.
But the idea has yet to get traction, and the fact various groups and organisations are independently looking for solutions highlights an endemic problem in the industry - division.
Meat and Wool New Zealand hopes to bridge those gaps with a task force headed by businessman Sir John Anderson, but there have been rumblings of discontent by some in the industry.
Pressure and anger among farmers was building before this season started, with Alliance Group shareholders last year dumping chairman John Turner and director Murray Taggart.
Now farmers are battling a dry summer and a glut of adult stock being killed at meat works, keeping sheep on farms longer, eating shrinking feed reserves.
Mr Elworthy dismissed claims by Alliance Group that the debt-loading of PPCS prevented a merger of the two co-operatives.
He said unified or joint marketing of meat, which companies and Meat and Wool New Zealand were promoting, would not work and industry consolidation was the only solution.
The South Canterbury farmer and former investment banker has established the Natural Products Company and urged the Alliance Group and PPCS to use it as a merger vehicle to consolidate the two co-operatives and create a stronger, single entity.
‘‘Industry consolidation with farmer ownership and control of the value chain is our goal and our best guarantee of long-term sustainability.
‘‘We need to consolidate the industry with a core farmer co-operative at the centre and some smaller, innovative boutique niche operators around the edges working to keep the larger player honest,'' he said on his website.
Mr Elworthy, who could not be reached for comment, said he had developed a business plan that would get the industry to ‘‘an intention to merge stage'' by the middle of this year.
But there is a lack of commitment, especially from the Alliance Group, to merge with PPCS, with directors adamant such a move would not be in the best interests of shareholders.
There is also a feeling among the co-operatives that they are having to carry the burden of industry restructuring which they are not totally to blame for creating.
Sheep farmers are exiting the industry, frustrated by low stock prices and also by the lack of fresh thinking and solutions for the sector's problems.
A Fonterra-type structure might sound promising, given the dairy sector's buoyancy, but the country's largest company does not have the universal support of its shareholders.
This is evident in the new players entering the industry and attracting suppliers, and shareholder anger at the company's capital restructuring plans.
But sheep farmers are desperate and looking for new and permanent solutions. They will be looking to directors of their companies to provide those answers.
