Meat companies and their industry board which includes farmers have released terms of reference for a meat sector strategy, focussed on information and robust analysis.The strategy has been proposed to improve the long-term profitability of all players in
Meat companies and their industry board which includes farmers have released terms of reference for a meat sector strategy, focussed on information and robust analysis.
The strategy has been proposed to improve the long-term profitability of all players in the red meat sector.
"There is much to be done to restore confidence and investment in the industry and identifying pathways that can offer sustainable profitability for all parts of the sector is what this strategy must deliver," said Meat Industry Association chairman Bill Falconer, whose group represents meat processors and exporters.
Information and robust analysis would ensure there was a good understanding of the opportunities and barriers ahead so that all players in the supply chain could make informed decisions on investment.
Beef and Lamb New Zealand chairman Mike Petersen, whose body also represents farmers, said there was no doubt that change must happen, because the sector was continuing to lose its production base to other land uses - especially dairying and forestry.
"Many of the farmers that have decided to remain in the industry are struggling to remain profitable," he said.
"While this strategy alone will not be a silver bullet, we must find a way for all sector participants to act collaboratively to develop opportunities."
People in the industry were looking for a "roadmap" to identify opportunities and guide a return to sustainable profits.
Mr Falconer said reports that the sector faced imminent extinction had received media attention, but further threatened the $6 billion sheepmeat and beef sector on which the nation's economy relied.
Federated Farmers's meat and wool chairman Bruce Wills last month said sheep numbers were in rapid decline, hundreds of sheep farmers every year moved to dairying or forestry and meat company profits were thin at best, he said.
"There's absolutely no question that the meat industry in New Zealand is broken," Mr Wills said.
Beef and Lamb has estimated the export lamb slaughter for the year ending September will be 21.5 million head -- down 4.5 per cent on last year and two million fewer than had been forecast in December.
The meat industry board has estimated an average farm profit before tax for 2010 of $39,800, using an exchange rate of US71c, compared with a provisional $58,800 for 2009. Massey University banking studies show that in the past 10 years, total rural indebtedness -- including the dairy sector -- to banks has risen from $12 billion to $45 billion.
The first stage of the strategy, overseen by Deloitte partner Alasdair MacLeod, will study issues and opportunities across the sector from market to farm and in phase two, industry participants will collaborate to implement initiatives.
It calls for an "aspirational but realistic target" and consistent understanding of "what winning looks like" for the industry.
Although it will not be essential to get the entire sector to agree to the strategy, it must be a unifying force, use plain language, and clearly set out key issues that are acting as barriers to change. It will clarify how all participants operate and create value.
