Silver Fern Farms is pushing on with changes to its business model despite being unable to complete its partnership with PGG Wrightson, and yesterday announced a new procurement system.
Called Backbone, the programme links farmers with specialist international retail and food-service customers, and encourages out-of-season lamb production, although farmers can continue to take spot prices.
Silver Fern Farms (SFF) chief executive Keith Cooper said farmers would benefit from 12-month pricing, which signalled where prices for lamb, beef and venison were headed.
The programme also signalled the company's move to secure out-of-season lamb supply by offering off-peak prices of up to $1 a kilogram for lamb, $2.19 a kilo for venison, 58c a kilo for bull and 51c a kilo for steers and heifers.
Mr Cooper said these were not premiums, but reflected the extra cost of finishing animals outside the traditional season.
SFF was offering three lamb, four beef and two venison "partnerships" which linked specific customers with stock of specific grades, supply period and quality in addition to existing contracts.
The Euro Lamb agreement, for example, contracts specific lambs for Tesco, Marks and Spencer, Sainsbury, Asda, Carrefour, Auchan and Intermarche supermarkets in the United Kingdom and France.
To qualify, farmers needed to supply lambs of 17kg to 23kg carcass weight for nine months of the year, with a maximum of 60% of those lambs supplied from December to April.
Mr Cooper said the programme was designed so all farmers benefited - breeders and finishers - to give them certainty and confidence to stay in the industry.
"It's quite a deep strategy to change behaviour right through the supply chain."
He did not want farmers to look solely at chasing the highest prices, but at what suited their business and their farm.
The world financial meltdown has delayed the proposed partnership between SFF and PGG Wrightson, but the meat company said it would continue with its "plate to pasture" strategy.
The new supply options have been welcomed by Federated Farmers meat and fibre section chairman Bruce Wills, who congratulated SFF for what he called "a worthwhile proposal".
"We have got to move away from the Sunday-night auction, commit supply and get enduring relationships between farmers and processors. To me, it looks like a good first step."
