Agriculture Minister David Carter is calling for changes to the meat industry, saying farmers could no longer rely on capital gains from appreciating land values to survive.
Mr Carter said a Ministry of Agriculture and Forestry meat sector report released yesterday revealed confidence in the long-term future of the industry, but farmers and the meat industry needed to start talking and turn that confidence into something tangible.
"With land prices no longer buoyant, the days of low-margin sheep and beef farms getting by on capital gains from land values alone are over for the time being."
Silver Fern Farms chief executive Keith Cooper said the report validated his company's "plate-to-pasture" strategy, an integrated supply chain where farmers supply the type of products required by customers when they want it.
He said it was now up to farmers to drive change by supplying stock to the company, with the marketing strategy able to strengthen the industry and bolster earnings.
"Every livestock unit is a vote. Farmers need to start influencing change by where they send their stock."
Meat Industry Association chief executive Tim Ritchie welcomed the report but said the association did not consider the sector broken or systematically underperforming.
Rather, it provided a "text book model" of a free, competitive market.
Meat and Wool New Zealand chairman Mike Petersen said the meat industry needed to develop a sector strategy to create a cohesive, innovative and profitable industry.
Any change had to be driven by farmers and the industry, he said, not by the Government.
But that has been tried to no avail, with last year's Meat and Wool task force failing to gain traction and farmer' co-operatives SFF and Alliance Group's failed merger attempt ending in acrimony.