'Key day' for red meat industry

By Sally Rae

Farmers wanted stability, viability and transparency from meat processors. Photo / Thinkstock
Farmers wanted stability, viability and transparency from meat processors. Photo / Thinkstock

Nearly 1000 farmers gathered in Gore yesterday to overwhelmingly support a mandate for change in the beleaguered red meat industry.

There was standing room only in the Gore Town and Country Club during what West Otago farmer Allan Richardson described as a "key day" in the industry.

It was a day when the industry decided to change and change for the better, Mr Richardson, spokesman for the newly-formed Meat Industry Excellence committee, said, while also warning that it would not be a "quick fix".

The group was seeking a mandate from farmers to work with the meat companies to develop a plan for consolidation in the industry.

Outlining its vision, West Otago farmer Fiona Hancox said farmers were "over the roller-coaster of prices" they received.

"Having one or two good years in 10 doesn't stack up in any business," she said.

Farmers wanted stability, viability and transparency from meat processors.

If they did not show unity or strength, they would continue to face the same frustrations and inefficiencies, and more farmers would leave the industry, she said.

The group's vision was to have farmers and the meat industry working together to maximise returns for farmers and allow industry profitability.

It was an industry where best practice initiatives were followed, where farmers were treated equally and, through efficient processing and strong marketing, they were rewarded appropriately, she said.

Gerry Eckhoff, who chaired the meeting, said the industry was failing and the tipping point was not far away.

Doing nothing was no longer an option for any of those gathered.

"You are responsible individually and collectively for your own futures and for the industry's future and nobody else," he said.

Suggestions that the concept for change sought involved a Fonterra-model was "simply not correct".

"Nobody has suggested we should just emulate what is happening with our cousins in the dairy industry," he said.

Richard Young asked if the directors of the meat companies were willing to change, support the six principles outlined by the group and be were prepared to work together to facilitate "some form of change".

Alliance Group chairman Owen Poole said he did not think there was a meat processor or exporter in the country that did not think a better model should be employed.

Alliance Group and Silver Fern Farms had been talking for some time about that prospect and were still in discussions.

Everyone recognised there needed to be change. It was easy to talk about it but it was hard to achieve, he said.

"We're on the case. We're trying to do many of the things you're talking about," Mr Poole said.

One of the group's principles was for up to 80 per cent of the red meat processed and marketed by one "coalition of the willing" structure.

Silver Fern Farms chairman Eoin Garden said that was a "huge challenge".

"Look how the dairy industry is fragmented because all of a sudden when you get a major player . . . Federated Farmers or farming leaders get up and say we need another player in the industry to keep the big feller honest," Mr Garden said.

Farmer David Eckhoff said farmers needed to focus on what they could control.

Farmers were the owners of Silver Fern Farms and Alliance Group and, if they joined together, they would make up 50 per cent - 60 per cent of the market and that would be "a hell of a good start".

Mr Poole warned a merger of the co-operatives would mean they would bear the burden of all of the costs of putting that together.

There were significant costs in that, which should be shared across the industry, whether you were a co-operative supplier or non co-operative supplier.

He estimated it at between $250 million and $300 million and asked co-operative suppliers if they wanted to "pick that up on your own".

The process from here was "absolutely fundamental".

"Get it right, you're on the highway to something else. Get it wrong, you're on the detour to Sad Valley and conflict."

He urged those present to be careful with the process and to "get it right".

At the end of the meeting, Mr Richardson said the committee wanted to work with the meat companies. It was likely further meetings would be held throughout the country.

- Otago Daily Times

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