Positive reaction to PGG plan

The East Otago farmer and Otago chairman of Federated Farmers meat and fibre section said one reason he was initially supportive of PGG Wrightson buying 50% of Dunedin meat co-operative Silver Fern Farms (SFF) was the involvement of businessman and PGG Wrightson chairman, Craig Norgate.

"I am cautiously optimistic. I can see some really positive things, and one of those is the business acumen of Craig Norgate and the PGG Wrightson team."

Other factors the Merton farmer saw as favourable were the injection of $220 million from PGG Wrightson; the move to an integrated supply chain linking consumers with farmers; the potential for industry rationalisation; and the market focus the investment would encourage.

The loss of total farmer control of SFF was a possible concern, but Mr Lawson said farmers had to ask themselves what farmer control of the meat industry had achieved so far.

He said he had spoken to several farmers yesterday and they were supportive of the proposal.

Sheep farmers were hurting from several years of low prices, prompting the conversion of farms from sheep and beef to dairying.

The promise of $75 or more for lambs from the SFF-PGG Wrightson deal was encouraging, but Mr Lawson said prices of this order had to be constant over several years.

"I think potentially it is quite exciting."