Farmers support new meat model

Get on with it was the overwhelming view of sheep farmers spoken to at the Southern Field Days in Gore yesterday about moves to create a mega meat-company.

Many were impatient, saying they wanted immediate action to reverse the lack of profitability in sheep and cattle farming and the perilous state of the meat industry.

Others questioned who would drive the creation of the mega meat-company as John Roadley did the merger that created dairy giant Fonterra.

Invercargill meat cooperative Alliance Group on Wednesday announced it would seek shareholder support to initiate the creation of a meat company to handle 80% of the country's animal procurement, processing and marketing.

Chairman Owen Poole said a company of that size would have the scope and clout to be viable, provide industry savings of $400 million a year and drive up the price of lamb by $15 a head in the short term.

Chief executive Grant Cuff yesterday said that, while it was too early to judge farmer feeling, those he had spoken to were positive. More information and detail, including any implications, would be given at a series of shareholder meetings starting in the next two weeks.

While no vote would be taken at those meetings, Mr Cuff said management and directors would get an indication of support.

If shareholders gave a mandate, Alliance would start talking to other companies and the Government. In an interview at the Southern Field Days yesterday, National Party leader John Key said it was up to farmer shareholders to decide the next move, but he could see little future in the existing industry model.

‘‘It is unlikely the status quo will remain. The industry has significant problems and the Fonterra model, on which I guess this concept is modelled, is proving to work well for Fonterra,'' he said.

He was briefed by Mr Poole about the proposal on Wednesday, and yesterday met farmers in Southland to discuss the dry weather and meat industry problems.

Owaka farmer Peter McNab, who was attending the field days, described the Alliance proposal as a bold move. ‘‘It's about time. Something has to happen,'' he said when approached for comment.

While welcoming the potential of another $15 a head, Tokanui farmer Andrew Weir said rising costs meant he needed another $20 a head. He said he wanted to see the detail of the initiative.

Meat Industry Action Group (MIAG) spokesman Keith Milne said the proposal was more than he had hoped for.

The farmer lobbying group has been seeking industry reform including greater cooperation between companies, and Mr Milne said a mega meatcompany would potentially make New Zealand the world's preferred supplier for both meat and dairy products, but with the marketing clout to influence prices.

MIAG executive member Peter Horrell said the proposal had merit because it had come from the commercial sector.

The lobby group hosted four farmer meetings about the meat industry in the previous day, and Mr Milne said up to 95% of those attending supported a merger of meat companies.

Western Southland farmers Colin and Joan Cardwell said the industry needed a new initiative. ‘‘We've got to keep moving ahead to keep farming. We feel in the last few years it has been stagnating.''

Tussock Creek farmer Peter Wishart was also supportive but said it had taken a crisis to drive moves for change.

He wanted immediate action, fearing a cyclical improvement in lamb prices could dampen enthusiasm.

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