May 5, 2011

New Zealand meat industry launches new strategy

Livestock farmers in New Zealand have been told that the red meat sector could boost the nation's gross domestic product (GDP) by 1.3%, or a lift of US$3.4 billion by 2025 if all the industry's participants work together.

But they have been told in the latest meat industry strategy that much of the local competition (in terms of price wars) will need to be transferred to battling rivals in international markets.

Meat farmers have reported about low returns for their beef and lamb, but many have shown a reluctance to join in a cooperative approach similar to Fonterra's role in the dairy industry.

Farmers are currently enjoying a boom in commodity prices, partly driven by middle-class consumers in Asia, particularly in China and India, seeking western-styled foods, and the livestock sector currently generates nearly US$8 billion annually in export earnings.

New Zealand Agriculture Minister David Carter said the new strategy was an ambitious plan to lift the performance of the meat industry and to give it clearer direction. He also said, "The industry functions needs to improve. There is a real risk that current good returns will create farmer complacency about addressing the long-term issues facing the sector."

The beef and lamb industry board chairman, Mike Petersen, said that over time the profitability of meat farming had been inconsistent and often unsatisfactory, a factor in the conversion of sheep and beef farm land to dairy farming or forestry.

"Critically, there is a need to shift the focus of competition from the farm gate to offshore competitors," said Peterson.