Sheep, beef concerns over dairying squeeze

DAIRY CONCERNS: MIE chairman John McCarthy says it is not in the national interest to turn New Zealand into a giant dairy farm.
DAIRY CONCERNS: MIE chairman John McCarthy says it is not in the national interest to turn New Zealand into a giant dairy farm.

The Meat Industry Excellence (MIE) reform group is calling for an urgent industry summit to address a crisis confronting the sheep and beef sector as it is squeezed out by dairying.

Primary Industries Minister Nathan Guy is being asked by the group to convene a summit to bring together industry people and develop profitable and realistic reform options.

Stud breeders were reporting demand for rams was down by up to 50 per cent this year.

Land conversions to dairy farming, especially in the South Island, were eroding traditional sheep and beef land at a rate of about 6 per cent to 7 per cent a year.

MIE chairman John McCarthy said it was not in the national interest to turn New Zealand into a giant dairy farm.

"To pretend the red meat sector [and sheep and deer in particular] is anything other than a crisis is to fool ourselves,'' McCarthy said.

"It's time the industry got together to take immediate steps to secure the sector's future."

A larger dairy model was flawed economically and the environmental footprint was at odds with the national brand, he said.

MIE wanted major industry stakeholders, including leaders from meat companies and co-operatives, to participate in summit talks, McCarthy said.

MIE was interested in industry-wide solutions and was not simply focused on meat co-operatives, he said.

"While the co-ops could be an important catalyst for change, such focus ignores the shared problems in common across the whole sector. The game breaker, we believe starts around committed and contracted supply.

"This is a pan-industry solution and MIE understands that for a turnaround to be successful we must bring along all industry stakeholders."

Farmers committing their livestock to a single company or co-operative would help them to set accurate budgets and cashflow requirements and provide a stable banker platform behind and beyond the farm gate. This would give everyone the continuity of long-term planning in a first step to a co-ordinated marketing approach, McCarthy said.

MIE work on providing new director options at meat co-operative elections had demonstrated farmers were concerned about the state of the red meat industry and this had been echoed by banking, meat processor and exporter groups, he said.

The Government had a key role to play in bringing about the summit and a healthy red meat sector was in the national interest, he said.

"Everyone is aware, that beyond the farm gate the existing model leaks value, basically because of the large number of players competing at both ends of the value chain."

MIE's push for contracted and committed supply was consistent with the recommendations of the Red Meat Sector Strategy commissioned by Beef & Lamb New Zealand, McCarthy said.

"Dairy is eating our lunch, but in the interests of New Zealand's environment, and long-term economic diversity, we need to ensure that the red meat industry [including deer] turns around and reaches its potential.''

New Zealand stood to capture a potential $6 billion in export value if the red meat sector could achieve what the dairy industry had achieved.

MIE wanted Guy to acknowledge there was an urgent problem and to co-ordinate a summit to find solutions, he said.