Déjà vu about meat strategy exercise

09-08-2010 | Alan Emerson

Farmers tend to be practical hands-on people who see a problem and fix it. Talking to Westpac recently they made the point that while farmers were efficient behind the farm gate, the reason for the lack of return was because of issues between the farm gate and the market.

Enter the meat industry strategy, the recently announced joint deal between Beef + Lamb New Zealand and the Meat Industry Association. The aim is to develop a strategy for the meat industry that will increase returns for farmers.

There is to be consultation, strategy development and a report by Easter. The initiative was welcomed by Feds and even the Minister of Agriculture for whatever reason, but forgive my cynicism, this has all been done before, many times and the result as always will be nix.

I was drawn to a Meat and Wool NZ news media release of February 2008, not that long ago. It reported that the recently established Meat Industry Taskforce had met. MWNZ's objective in getting the taskforce established was "to develop a vision and a plan from farm to market that restores and generates long term profitability for farmers and the wider meat industry".

The membership of that taskforce was a real who's who of the industry. Led by Sir John Anderson we had Sam Robinson, Reese Hart, Mike Petersen, Owen Poole, Graeme Harrison and Sam Lewis. I wrote at the time that most of those on the taskforce were involved, one way or another, in getting the industry into the mess it was in. I did get the odd hostile phone call I must confess for my "temerity".

The taskforce nuked itself in short order because it couldn't form a consensus and now we are revisiting the entire shambles with another committee. Will it achieve anything? I'd suggest no but it will provide considerable news media opportunities between now and Easter. If it holds together for that long of course; the previous one didn't.

The situation as I see it is that the industry is in freefall, everyone is jealously guarding their patch and if we keep going as we are it will end up as a last man standing scenario. If that happens I don't see either of the co-operatives as the lucky one, so farmers will be further screwed.

Feds Meat and Fibre chairman Bruce Wills told the NZ Herald there was "absolutely no question the meat industry in NZ is broken". I'd agree with that. It is an industry at the point of collapse. The problem is that over the years its single feature has been an almost co-ordinated lurch from crisis to crisis.

Let's consider the current issues. The first and most obvious is we have excessive capacity. Entire plants will have to close. You can't anymore close half a plant than you can be half pregnant. Will the companies get together and agree on a co-ordinated strategy of rationalisation? Hell would freeze first.

We had the motivated Meat Industry Action Group trying to get some co-ordination or agreement between the two farmer co-operatives, Silver Fern Farms and Alliance. Did they get anywhere? An emphatic no to the extent a couple of their movers have since changed to dairying.

Another issue is procurement where we have some ridiculous anomalies such as the continual crossing of Cook Strait by tens of thousands of livestock and different schedules for different islands. Will the companies work together and will farmers enter annual supply contracts that are honoured by both sides? I'd suggest not.

The falling over of the co-ordinated marketing strategy in China irritated me. If we co-operated more in the marketing of our product instead of fighting in the marketplace the production side of the equation would become easier to sort out. Why don't we market a single chilled brand and get involved with Northern Hemisphere producers to have that brand on the shelves all year?

What we need is leadership, not talkfests. What we want is action not words. As the current deal is set up the only winners will be the talkfest facilitator, Deloittes, reputedly for a half million-dollar fee.

We don't need Deloittes to tell us the problem; it is over-capacity of killing space. We don't need them to tell us the solution; it is to close down plants. The way to do that is to have all the players in a room making a full industry binding decision to close plants, to share the pain and to guarantee not to start new plants.

That is the only way to solve the meat industry's problems. Logic suggests the processors and Beef + Lamb NZ will all see that and work to achieve a just, sustainable, long-term solution. Yeah right.

For the record my wish would be for Beef + Lamb to outline the problems as our farmer representatives then get the companies into a room and tell them to sort it out. If one or more of the companies bucks then I'd be happy with a boycott.

Your View:
Alan Emerson is a semi-retired Wairarapa farmer and businessman; dath-emerson@wizbiz.net.nz

  Printable View