Chair's address to the Meat and Fibre Producers' annual conference
Tuesday 17 July 2007, 11:52AM
By Federated Farmers of New Zealand
394 views
The following speech will be delivered this morning to the New Zealand Meat and Fibre Producers’ annual conference in Auckland. The NZMFP council meets twice a year, and includes sheep and beef farmer representatives from throughout New Zealand. NZMFP is an industry group of Federated Farmers of New Zealand.
Keith Kelly
Chair of Meat and Fibre Producers
Address to Meat and Fibre Producers’ Conference/AGM
Langham Hotel, Auckland
Delivered at 10.30am, 17 July 2007
Welcome to conference.
Your time here over the next two days is highly valued and much appreciated by the membership of the meat and fibre industry group and on behalf of members, thank you for attending this important event in the Federation’s diary.
Conference is important because the meat and fibre industry group is a key part of Federated Farmers. Just over half of Federated Farmers’ members identify themselves as meat and fibre farmers. The Federation therefore puts much effort into representing the interests of our sector.
Today I will be speaking about driving farming forward in to a stable and sustainable future.
Learning from the past and farming for the future is simple common sense. The question is what can we learn and how can we put that knowledge to work for us as farmers?
Some of us farmed through the “black time†of the 1970’s and 1980’s and all of us must ensure it never returns.
Meat and Fibre producers are currently facing a challenging time - costs are up and income is down.
Lessons of the past show us we must work together to have a successful industry. We know from experience that too many New Zealand producers competing in the same market drives prices down. No one intends it to be a race to the bottom but that is the result of an uncoordinated effort. We are in that race now. So let us put on the brakes and make a u-turn for the good of our industry.
We do not want to go back to the situations of old instead what we can do is encourage a coordinated approach. Marketing is power. Farmers need to rally behind the importance of putting in place a coordinated international approach.
The way forward - marketing
I have participated in many meetings locally, nationally and international, on lamb prices. The recurring theme is marketing. In my role as chair I have to ask the hard questions.
And today I ask you: Has the British market been our safety net for so long we have stopped being inventive in selling product?
We are told by overseas experts the lack of marketing and poor presentation of our product lets us down. Marketing needs an urgent shake up. John Turner, chair of the Alliance Group board, was quoted recently saying: “We have had the same marketing system for a hundred years and it has failed us.â€Â
The world was not brought up on legs of lamb and mint sauce. We need to cater to international tastes and look at new innovative ways to place our product on menus around the world.
As an industry we need to decide our stance on marketing and who pays for what. Under the Commodities Levies Act referendum held three years ago farmers withdrew their monetary support for generic marketing. This needs to be reviewed. We know our product is excellent. There needs to be a balance of responsibility in how it is presented and return for the value invested.
Let us collectively discuss our industry and put guidelines in place, formulate policies so that we can present a sound well thought out and united front.
Let us start discussions with regard to Lamb Quota.
The allocation of quota has come under fire. Once again an inter island disagreement on who gets what, and why, is bubbling away. Quota is a delicate, diplomatic subject and should be treated as one. Failure to achieve a good return from lamb sold under the present quota system should be investigated fully.
We currently have a European Union quota for sheep meat and goat meat of 227,854 tonnes. Federated Farmers Meat and Fibre Producers ran a survey on the quota review held in 2006 and the consensus was not to change.
The Meat Board Act gives the NZ Meat Board the right to allocate export quota to all registered meat exporters, whether they are currently exporting meat or not.
Following on from lamb quota
The procurement policies run by South Island co-operatives are under fire. The sheep farmers that supply lamb and agree to these contracts are the ones to negotiate a fair to all contract. North Island companies are accused of spot market selling.
The investigation into the possible amalgamation of PPCS and Alliance will provide some clarity. If the investigation proposes a merger, 75 percent shareholder approval is still required, then a stamp of approval from the Commerce Commission. The next step is to prove to the world that it is not a monopoly. If all of these actions are approved it could change the face of the New Zealand lamb trade.
What about beef?
Prime beef must receive prime prices. New Zealand has a European Union quota for high quality beef of 1,300 tonnes and a US beef and veal quota of 213, 402 tonnes. The fright over BSE is wearing off and Asia is being lobbied to return to grain-fed American beef. We need to look at the Asian palate and getting them to acquire a taste for New Zealand grass-fed beef.
I am crystal ball gazing but it is easy to speculate the dairy boom will result in more second class dairy beef on the market and this could see a drop in the price of prime beef. We need to ensure prime beef continues to receive top dollar. For good or bad the rapid rise in milk powder has the potential to drive calf rearing towards unsustainablity.
Turning now to the processors, meat companies are currently running at an average profit of one to three percent, which is about the same as farmers. Farmers need to support meat companies and be wary of demanding too much from them while their financial state is far from robust.
We also need to be wary of the amalgamation of AgriQuality and Asure New Zealand in the meat inspection role that has lead to a monopoly with strong unionist bargaining power.
Let’s talk about wool
A year ago we agreed to give the Wool Industry Network(WIN) two years to get things right. Mike Peterson, chair of Meat and Wool New Zealand, was told that WIN would need to lead wool forward or there would be consequences. Mike agreed with us that two years was sufficient even though there is funding for three.
The Wool Industry Network has put out its first discussion document. It is looking for a solution to wools woes and consulting with industries that have had ups and downs but are now stable. Kiwi fruit is one example.
Wool has gone through boom and bust let us look forward to reaping the profitably of a stable future.
In conclusion
Meat and Fibre Producers comprises more than 58 percent of the Federation’s membership. As Meat and Fibre Producers’ section chairs, you are elected to represent your province and voice your provinces views and opinions.
Each province has evolved into a style of farming that suits its own particular climate and which maximises returns. This needs to be considered when developing a New Zealand wide marketing strategy. After all, one size doesn’t fit all.
Our members look to us for guidance, so we need to formulate a collective response. This response guides me, as the chair, it guides the executive, and it guides you, as area spokespeople.
We are gathered here with an opportunity. We need to stop acting as individuals and formulate our collective ideas so we can make policy and build a great future for the meat and fibre industry and New Zealand.
Keith Kelly
Chair of Meat and Fibre Producers
Address to Meat and Fibre Producers’ Conference/AGM
Langham Hotel, Auckland
Delivered at 10.30am, 17 July 2007
Welcome to conference.
Your time here over the next two days is highly valued and much appreciated by the membership of the meat and fibre industry group and on behalf of members, thank you for attending this important event in the Federation’s diary.
Conference is important because the meat and fibre industry group is a key part of Federated Farmers. Just over half of Federated Farmers’ members identify themselves as meat and fibre farmers. The Federation therefore puts much effort into representing the interests of our sector.
Today I will be speaking about driving farming forward in to a stable and sustainable future.
Learning from the past and farming for the future is simple common sense. The question is what can we learn and how can we put that knowledge to work for us as farmers?
Some of us farmed through the “black time†of the 1970’s and 1980’s and all of us must ensure it never returns.
Meat and Fibre producers are currently facing a challenging time - costs are up and income is down.
Lessons of the past show us we must work together to have a successful industry. We know from experience that too many New Zealand producers competing in the same market drives prices down. No one intends it to be a race to the bottom but that is the result of an uncoordinated effort. We are in that race now. So let us put on the brakes and make a u-turn for the good of our industry.
We do not want to go back to the situations of old instead what we can do is encourage a coordinated approach. Marketing is power. Farmers need to rally behind the importance of putting in place a coordinated international approach.
The way forward - marketing
I have participated in many meetings locally, nationally and international, on lamb prices. The recurring theme is marketing. In my role as chair I have to ask the hard questions.
And today I ask you: Has the British market been our safety net for so long we have stopped being inventive in selling product?
We are told by overseas experts the lack of marketing and poor presentation of our product lets us down. Marketing needs an urgent shake up. John Turner, chair of the Alliance Group board, was quoted recently saying: “We have had the same marketing system for a hundred years and it has failed us.â€Â
The world was not brought up on legs of lamb and mint sauce. We need to cater to international tastes and look at new innovative ways to place our product on menus around the world.
As an industry we need to decide our stance on marketing and who pays for what. Under the Commodities Levies Act referendum held three years ago farmers withdrew their monetary support for generic marketing. This needs to be reviewed. We know our product is excellent. There needs to be a balance of responsibility in how it is presented and return for the value invested.
Let us collectively discuss our industry and put guidelines in place, formulate policies so that we can present a sound well thought out and united front.
Let us start discussions with regard to Lamb Quota.
The allocation of quota has come under fire. Once again an inter island disagreement on who gets what, and why, is bubbling away. Quota is a delicate, diplomatic subject and should be treated as one. Failure to achieve a good return from lamb sold under the present quota system should be investigated fully.
We currently have a European Union quota for sheep meat and goat meat of 227,854 tonnes. Federated Farmers Meat and Fibre Producers ran a survey on the quota review held in 2006 and the consensus was not to change.
The Meat Board Act gives the NZ Meat Board the right to allocate export quota to all registered meat exporters, whether they are currently exporting meat or not.
Following on from lamb quota
The procurement policies run by South Island co-operatives are under fire. The sheep farmers that supply lamb and agree to these contracts are the ones to negotiate a fair to all contract. North Island companies are accused of spot market selling.
The investigation into the possible amalgamation of PPCS and Alliance will provide some clarity. If the investigation proposes a merger, 75 percent shareholder approval is still required, then a stamp of approval from the Commerce Commission. The next step is to prove to the world that it is not a monopoly. If all of these actions are approved it could change the face of the New Zealand lamb trade.
What about beef?
Prime beef must receive prime prices. New Zealand has a European Union quota for high quality beef of 1,300 tonnes and a US beef and veal quota of 213, 402 tonnes. The fright over BSE is wearing off and Asia is being lobbied to return to grain-fed American beef. We need to look at the Asian palate and getting them to acquire a taste for New Zealand grass-fed beef.
I am crystal ball gazing but it is easy to speculate the dairy boom will result in more second class dairy beef on the market and this could see a drop in the price of prime beef. We need to ensure prime beef continues to receive top dollar. For good or bad the rapid rise in milk powder has the potential to drive calf rearing towards unsustainablity.
Turning now to the processors, meat companies are currently running at an average profit of one to three percent, which is about the same as farmers. Farmers need to support meat companies and be wary of demanding too much from them while their financial state is far from robust.
We also need to be wary of the amalgamation of AgriQuality and Asure New Zealand in the meat inspection role that has lead to a monopoly with strong unionist bargaining power.
Let’s talk about wool
A year ago we agreed to give the Wool Industry Network(WIN) two years to get things right. Mike Peterson, chair of Meat and Wool New Zealand, was told that WIN would need to lead wool forward or there would be consequences. Mike agreed with us that two years was sufficient even though there is funding for three.
The Wool Industry Network has put out its first discussion document. It is looking for a solution to wools woes and consulting with industries that have had ups and downs but are now stable. Kiwi fruit is one example.
Wool has gone through boom and bust let us look forward to reaping the profitably of a stable future.
In conclusion
Meat and Fibre Producers comprises more than 58 percent of the Federation’s membership. As Meat and Fibre Producers’ section chairs, you are elected to represent your province and voice your provinces views and opinions.
Each province has evolved into a style of farming that suits its own particular climate and which maximises returns. This needs to be considered when developing a New Zealand wide marketing strategy. After all, one size doesn’t fit all.
Our members look to us for guidance, so we need to formulate a collective response. This response guides me, as the chair, it guides the executive, and it guides you, as area spokespeople.
We are gathered here with an opportunity. We need to stop acting as individuals and formulate our collective ideas so we can make policy and build a great future for the meat and fibre industry and New Zealand.