Tinkering 'not enough' for meat and wool

Rick Powdrell says blue-sky thinking is needed. Photo/File

Tinkering at the edges of change in the meat and wool sectors are "not going to cut it", Federated Farmers meat and fibre chairman Rick Powdrell says.

In his final address at the rural lobby organisation's national conference in Wellington this week, Mr Powdrell said it was time for "big sky forward thinking" on the cost, marketing and competition challenges.

Complex ownership and marketing structures made achieving agreed national strategies very difficult.

But in the face of "profitability squeezed at all levels" and the future threat of synthetic protein, boldness and open discussion were more important than ever, he said.

Meat producers could not dismiss the future threat of synthetic meat and he recommended Federated Farmers meat and fibre council get someone with knowledge of synthetic meat production and attributes to speak.

"We need to understand these products to address how we front-foot our marketing of meat products against this competition," he said.

Mr Powdrell was involved with a wool sector group that was soon to report to the Ministry for Primary Industries on recommendations for next steps, and he also saw encouraging signs that various meat industry players recognised the need to accelerate work on a national strategy.

Recent programmes highlighted a new level of industry collaboration as industry partners from farm to market had joined to work together.

The next challenge for many of those new initiatives, once formulated, was to develop the implementation plans as all the work would be for nothing if visible returns were not evident. Sheep and beef prices were back to sustainable levels but wool prices were "dismal", he said.

In Westpac's latest Agri Update, economist Shyamal Maharaj said lamb prices were expected to continue their upward trend driven by a range of factors.

Current market conditions were being shaped by the tightness in global supply but were also dependent on demand.

On the demand side, the current pricing outlook was set to firm in the coming months. That was largely due to the increased demand for chilled lamb products that tended to peak around October for the Christmas trade.

Sheep numbers were tighter this year and prices moving towards the end of this year were likely to be greater than peak prices in previous seasons.

Although supply was likely to pick up in reaction to higher slaughter prices, as the new season begins, the general outlook for the lamb market was looking to stay firm for now, he said.

A key area of concern was demand conditions in the United Kingdom. Last year's unexpected referendum result had increased uncertainty around the demand environment, and the pound had fallen sharply.

The recent snap election reinforced the uncertainty around the outlook, especially as it might erode the UK's position in the coming Brexit negotiations.