Red meat rebound
The red meat sector is poised for a strong rebound this season, with export receipts forecast to top $10 billion and farm profitability to almost double.
However, Parsons says the agreement must be backed by a large majority of the processors and be beneficial to farmers.
He confirmed support for a June discussion document that proposes a 12-year moratorium on new beef and sheep processing chains, including expansion of existing plants.
BLNZ has not taken a position on the proposal; Parsons is leaving the decision to directors and management of meat companies.
He says the proposal is not a silver bullet for meat industry woes but has the potential to “de-risk” issues of over-capacity. “A meat company which rationalises capacity at a plant won’t face the prospect of another company setting up a new plant down the road,” he says.
On the other hand, Parsons says some farmers would not see the over-capacity as an issue, given droughts over the last few years. “The last thing farmers would want is to have stock waiting to be killed.”
