Falling co-product prices prompt changes

The sale of Wallace Group’s tanning, rendering and composting operations in the Waikato, Northland and Manawatu is the latest step in the consolidation process of what is often termed the fifth quarter of the meat industry. Since it began in the late nineteenth century the industry has had to invest significant capital in facilities which were not just designed to process animals for meat production, but also to dispose of the parts of the carcase left over from its primary purpose, otherwise known as by-products or more politely co-products.  

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Meat exports sold to more than 100 countries

New Zealand’s meat exporters come in for a lot of criticism, either for selling too cheaply or for not adding value, and certainly because they can’t (or don’t) pay farmers enough for their livestock. This final criticism is presumably a direct result of the first two – the prosecution’s case argues if they sold product at a higher price or added more value, they would automatically be able to pay more for livestock.

Meat exporters and farmers must get used to change

As if Brexit wasn’t a big enough shock, the US presidential election has really set the cat amongst the pigeons. Commentators of all nationalities and political inclinations have literally no idea how a Trump presidency will affect the world order, from trade agreements and global interest rates to immigration or deportation, let alone internal security issues and relationships with other nations.

Alliance in good shape

Alliance has produced a solid result for the year ended 30 September with a pre-tax profit of $10.1 million compared with $7.9 million for the previous year achieved on 9% lower revenue of $1.366 billion. Of greater significance to farmers is the decision to distribute $9.8 million to shareholders, while the company’s equity position has improved from 58% of assets to 72%. Debt reduced from $129 million to $41 million with no seasonal debt at year end.

Resistance or resilience – which best characterises the red meat sector?

The Red Meat Sector Conference held in Auckland on Monday did not have one single theme, but a series of themes across the day, starting with the question ‘resistance or resilience?’ Past history suggests the answer might most logically be both rather than a choice between the two options.

Past, present and future of the meat industry (Part 2)

Present

Today’s industry has many of the same characteristics as the mid 1980s, but a number of things have changed, mostly for the better.

Past, Present and Future of the Meat Industry

Introduction

I gave a presentation recently to a Beef + Lamb Field Day about the meat industry. I briefly reviewed the history of the industry, the impact of certain key events and the influence of politics leading up to the 1985 election. I then gave an appraisal of the present covering the last 30 years, post subsidies, when the sector had to modernise fast; and lastly I took a punt on predicting what might happen in the foreseeable future and how farmers and meat companies might have to adapt to survive and flourish.

 

For the purpose of presenting these thoughts to interested readers I have divided the presentation into three parts which will be published separately. The first part is a review of the first 100 years and how this period determined the structure of the industry.

Address to MIRINZ workshop – How and why research is important for the future

1. Themes

 

The three main themes for this workshop are:

 

1. Added value products focusing on key points of differentiation in NZ meat products with a research emphasis on credible health and nutritional benefits.
2. Value from quality – research outcomes that will enable the red meat sector to meet increasing demand for high value premium meat products in existing and new markets.

• Provenance and food assurance – research from fork to farm to ensure that exports are safe, of superior quality with defendable provenance and attractive to consumers.

Research is critical to future prosperity

By the time most of you read this, I will have delivered an address to a Meat Industry Research workshop at Ruakura. Preparation for this has severely taxed my knowledge of research directed at the future prosperity of the red meat sector. Depending on the reaction to my presentation, I will almost certainly find out whether or not I have succeeded in talking sense and, more important, introducing some relevant fresh ideas to the audience of scientists and people with infinitely greater technical credentials than I.

New era or more of the same?

I have already pinned my colours to the mast by saying the JV between Silver Fern Farms and Shanghai Maling will be good for the meat industry and New Zealand as a whole, whereas some commentators don’t appear to share my enthusiasm. Some companies are also less than ecstatic about what it might mean for future competitive behaviour.