SFF joins the slaughter
Meat processor and exporter Silver Fern Farms Ltd has joined fellow South Island-based meat company Alliance Group in reporting a big loss for the past year.
"The consumer market is providing a window of opportunity, with current returns on-farm above the long-term average – thanks to supply and demand, rather than marketing efforts. But is the industry taking this opportunity to consolidate and form marketing alliances, so the focus moves to where it should be: the market?"
In a media release, Grant says that, if the two farmer cooperatives, Alliance and Silver Fern Farms, are truly committed to the prosperity of their shareholders, they would be leading the charge. "We all know that it's an issue of 'when', not 'if'.
"Amalgamation doesn't need to happen tomorrow, but we need to see a commitment from both co-ops that they are prepared to work towards such a position. We want to see more action in the market, not silly antics in procurement."
Meanwhile, as dairy land increases, beef and sheep land decreases, putting pressure on the red meat industry to survive with a diminishing volume of product to market.
For the grass-fed beef industry, it gets worse, he says.
"As more cull cows and dairy-sourced beef enter the market, it keeps the focus on commodity product – not prime product – and results in less promotional activity."
Grant says meat cooperatives should consider all business opportunities that can increase shareholder returns.
"I believe the co-ops need to look at the future of strong wool marketing and establish a wool marketing entity on behalf of their shareholders. Anything would be better than the shambles of the past 25 years. Farmers are desperate to see change.
"The co-ops are well resourced to take a lead, especially when they are already large players in slipe wool."
A joint venture for wool between Alliance Group and Silver Fern Farms would be no different than the New Zealand Lamb Company, which both cooperatives use to sell sheep meat into North America, he notes.
