For a good proportion of sheep and beef farmers, the light at the end of the tunnel has, for some time, been the headlight of a train heading towards them.
Market forces have cut a swathe through the sector over recent years. For a lot of farmers the reality has been that returns from sheep and beef farming operations have been too low for too long. Many have converted to more profitable land uses, such as dairying, dairy support or forestry.
More recently still, the sector has faced additional pressures. Like other export businesses, meat and wool prices have been badly affected by the New Zealand dollar's strength. Adverse economic conditions in many of our markets, combined with consumer resistance to historically high sheep meat prices further depress farm-gate returns. This has been exacerbated by last season's overly optimistic market positions and projected increasing volatility around returns in future.
Additionally, there are increased expectations by society for the sector to lift its environmental performance. The costs of this, and the current drought, compound the situation.
There are, however, a number of positives on the horizon.
Meat and fibre farmers are resilient and independent people with a passion for what they do.
Given the pressures they face, anyone without these qualities would have moved on to other more rewarding fields of endeavour some time ago. They also have a good understanding of their farm's relationship with the surrounding environment and, in general, are very good at improving production levels.
The burgeoning world population growth will see an increased demand for protein in the foreseeable future. Not all will be for red meat and we will never 'feed the world', but demand for New Zealand's red meat will increase substantially as the standard of living, in the emerging economies in particular, produces wealthier people looking for high quality protein In the long-term, the sector is well positioned but a number of significant short-term pressures will test its resilience and determination.
On a positive note, building resilience has recently got a large boost with the recent news that the Beef + Lamb New Zealand's "Collaboration for Sustainable Growth" PGP programme will bring red meat sector partners together and support the adoption of best practice behind the farm gate.
Also Wools of New Zealand achieved in February the necessary support from farmers to establish a new strong wool sales and marketing company. Wool is often seen as the sector's Cinderella, but still is a vital income area. There is hope thatstrong wool will be restored to its rightful, high value space in the carpet and textiles markets.
The short-term future is much less certain. Federated Farmers is committed to responding to concerns of members, developing polices and implementing plans based on what they want and need. The Meat & Fibre Council, led by Jeanette Maxwell, has recently undertaken a member survey around farmer behaviour and other initiatives could follow if required.
To achieve change, industry leaders, such as Federated Farmers must play their part, as must other sector stakeholders such as meat processors.
The Federation urges all farmers to think about changes needed for the sector to be sustainable.