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Meat Industry Excellence chair John McCarthy.
The Meat Industry Excellence group (MIE) says historic cultural antagonism between the two cooperatives is one of the main reasons the meat industry is going down the gurgler.
Speaking to Rural News after the launch of a major report on the industry late last month, MIE chair John McCarthy said a key matter arising from the report is a commercial imperative for the two co-ops to work together and merge to provide “scale, scope and leadership”. Alliance Group and Silver Fern Farms need to provide a NZ Inc-type approach, and nothing will happen unless the co-ops lead that change.
McCarthy was pleased at the response to the MIE-initiated report. He says it’s the first time a comprehensive report like this has been made public.
“The report has shown up some real challenges. We know there have been reports in the past, but they have remained in-house or in-company and have not been available to the whole industry.
“Now that we are aware of the actual state of the industry it is almost irresponsible, I believe, for people not to get behind the bow wave that is required to turn this thing around.”
McCarthy agrees with most of the report, but adds it’s not his, as such, and that it reflects a wide range of support for change from across the farming sector. He says the industry can no longer live in the past and repeat the same old mistakes.
“[The issue is] New Zealand ownership of the value chain versus foreign ownership of the value chain; cooperative power or corporate power and that can only be [settled] by the merger of the two cooperatives.”
McCarthy disputes claims that sheep and beef farmers can do better – the constant harping that more farmers can match the so-called 25% who are doing especially well. This is untrue, he says. Farmers have lifted their game extraordinarily, producing the same amount of lamb as 20 years ago from half the number of sheep.
One reason farmers can’t do any better is that they are farming hard hill country while much of the flat land goes to dairying.
Some farmers are doing well because they are dairy grazing.
As dairy farmers lock in plans for the upcoming mating season, a partnership between Fonterra and Silver Fern Farms has been formed with the aim of making it simpler to create additional value from calves not entering the replacement herd.
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