Lamb prices finally appear to be reflecting the effects of the global food shortage.
PPCS chief executive Keith Cooper told about 200 shareholders in Balclutha this week export lamb prices were 15% higher than at the corresponding time last year and fundamentals of the market indicated they would go higher yet.
He was also buoyed by prospects for beef and described the outlook for venison as "looking dangerously good," predicting prices would trade between $6.50 and $8.50 a kg in the coming season.
New Zealand's lamb inventories were the lowest many had seen; competing meat was increasing in price; and the world kill was also declining, while demand was rising, he said.
Grass-fed beef had found a market niche after being seen for years as inferior to grain-fed beef.
Mr Cooper warned that such was demand for venison, there was a risk prices could get too high, repeating the mistakes of 2002 when there was a consumer backlash to excessive prices. Venison was being consumed, unlike in 2002, when it was being stored, Mr Cooper said.
The new season chilled price would start at $7.50 a kg but could easily go higher, he said.
The other optimistic news was the price of byproducts.
Compared with the prices of a year ago, pelts were now 60% higher, with increases also in wool (11%), meat and bone meal (27%), tallow (26%), blood (47%) and offal (23%).
"It's a great-looking picture. It is a matter of how we capture it."
Mr Cooper said consumers required a year-round supply of lamb and companies had to provide it if they were to expand their business and increase returns for farmers.
This meant supplying lambs over winter, a move many farmers at the meeting said was difficult in the South and would require a much higher contract price than the $4.20 a kg PPCS was offering.
It was the most-discussed issue at the meeting, with farmers saying contracts needed to be flexible to take account of exceptional weather periods.
Garth Shaw said taking lambs through winter came at a cost in terms of growing feed and reduced ewe numbers, adding to the soaring costs farmers already faced.
PPCS chairman Eoin Garden said Southland dairy farmers milked cows during winter and he urged sheep farmers to "think outside the square".
"Everyone has got to do their own sums. I challenge you to forget about what you have done traditionally and relate it back to what the customer wants, when they want it, and see if you can deliver it."
The matter of the failed meat mega merger received little attention from farmers, several praising PPCS for declining to sign a co-operation agreement with Alliance.
Earlier this week, North Otago farmer-shareholders delivered a blunt message to PPCS.
"For goodness' sake, get a decent return for sheep farmers," PPCS supplier Tom Hurst implored.
Sheep farmers were "absolutely bleeding", Mr Hurst told Mr Garden and Mr Cooper.
Walter Cameron said shareholders in both PPCS and Alliance Group had been "crying out" for both companies to get their heads together, otherwise there was not going to be an industry.
A new collective model was needed to deliver something sustainable, otherwise the sheep meat industry was going to lose out to the dairy industry, he said.
He speculated whether such a model might be adopted if all parties were to get round the table again.
He felt PPCS had pulled away from the concept for a super meat company just when it was at the starting point.
Mr Garden said no conclusion had been reached with Alliance.
That did not preclude the possibility of future discussions between PPCS and other parties in the industry, which might or might not involve Alliance.
While some shareholders of Alliance and PPCS had been asking for a merger, a large proportion had not, he said.
Mr Cooper said Alliance's concept for a mega company had no vision and was essentially a "great big status quo model".
A merger did not necessarily mean improved returns.
PPCS' vision focused on getting returns first and then assessing what might be required to restructure the industry, he said.