Alliance calls for farmers to commit

20:20, Dec 16 2011
Grant Cuff
STRATEGIC VIEW: Alliance Group chief executive Grant Cuff speaks at the company's annual meeting yesterday.

Farmers need to stop chasing spot prices and commit to one meat processing company if they are going to compete with dairy, an outgoing Alliance Group director says.

Former Alliance director Owen Buckingham, speaking to about 100 people at the group's annual meeting in Invercargill yesterday, said Alliance was held in high regard by everyone it was associated with, but he was frustrated by the fragmented meat industry.

After the meeting he said that if farmers committed to one company it would mean certainty of stock and strengthen the ability of companies to invest in improved processing and marketing.

But many farmers were instead chasing spot prices – prices set day-to-day – which meant companies did not have stock committed before the start of the season, making it "extremely difficult" to put marketing plans in place and to decide when to start processing chains, he said.

"The problem is too much short-term thinking in the industry. We need some long-term committed strategies ... but they (farmers and companies) can't think past that week because they are trying to keep the (processing) plants full," he said.

Competition was good, but it was destroying the long-term sustainability of the industry, he said.

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"I don't think what anyone wants is New Zealand to be the dairy farm of the world."

Avondale sheep and beef farmer Russell Drummond agreed with Mr Buckingham and said after the meeting that Alliance and Silver Fern Farms co-operatives needed to come together to strengthen the industry and marketing.

If they worked together and also bought another company that covered the parts of New Zealand where they did not have any influence, it would allow the industry to generate more focus and direction, he said.

A widespread wool industry co-operative was also needed for the sheep industry to compete with forestry and dairy, he said.

The Wool Partners Co-operative's proposal – a proposal to form a co-operative to secure half the country's strong wool clip, which failed earlier this year – was the best concept for farmers so far, but it needed to be owned by a large co-operative, he said.

Mr Buckingham has been a director of Alliance for 25 years and stepped down from his role yesterday.

He made his entry into farm politics by organising thousands of farmers to let more than 1300 sheep run through the streets of Invercargill in the 70s to protest against industrial action.

The Southland Times