Market outlook reasonable, but demand answers from your processor

In spite of the upheaval caused by the financial crisis the outlook for the meat industry is cautiously optimistic and quite a bit better than last year turned out to be. Farmers had any number of reasons to feel disgruntled about the chain of events last year – summer and autumn drought in many regions, the wettest winter in memory in the north, low livestock prices, unsatisfied ambitions for meat industry restructuring, failed investment by PGG Wrightson in Silver Fern Farms – so 2009 would have to be very bad to come anywhere near matching it.

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Supply chain debate

Trudi Baird from Southland has written a very full response to my recent column in Farmers Weekly about the difficulty of controlling the supply chain and I have published her comments in full because I am very impressed by her arguments and the thoroughness of her analysis.

She makes the valid point that meat company relationships are all with the supermarket chain as their end customer, but not with the end consumer whom they need to reach if they are to capture more of the margin for farmers and New Zealand. She also points out the increasing amount of shopping done by internet and the high percentage of women making the buying decisions as other important factors to be considered, especially when you realise the meat industry is largely full of ageing male executives!

I don’t have an answer to our marketing problem (or I would have provided it already), but I think Trudi’s ideas need further debate as there is a real possibility that she may have hit on what’s wrong and what needs to be done to put it right.

Complete control of supply chain impossible

Nuffield Scholar and recently elected Meat and Wool Director, James Parsons, has been promoting the need for an integrated supply chain from farmer to consumer, if farmers are to reap the rewards of their endeavours. His solution for New Zealand to get out of the commodity trap – which means farmers are far removed from the consumer and last in line to receive a share of the returns – is to redesign the supply chain.