Posts Tagged ‘AsureQuality’

Red Meat Profit Partnership tries to answer crucial question

July 3, 2014

Analysis of the objectives and methodology of the RMPP suggests the programme has highlighted the most important issue facing the red meat sector. Briefly stated, it is to work out why there is still such a significant gap between the top farmers and those in the middle of the pack and to lift the average closer to the top performers.

 

When the Red Meat Sector Strategy identified behind the farm gate specifically as a major area of potential improvement, there was much mumbling about why the industry structure wasn’t being more usefully exposed as the area most in need of improvement. But figures released by the B+LNZ Economic Service show this isn’t the case.

 

The most graphic demonstration of this appeared in the RMPP brochure sent out last year. Sheep and beef farmers were grouped in 20% quintiles for comparison and in this table the second to bottom quintile was compared to the top 20%: there was a 3% gap in lamb price achieved, but a staggering difference of 135% between the groups when measured on dollars per lamb and dollars per hectare regardless of the class of farm. To put it simply the top 20% are nearly two and a half times as profitable on a pre tax basis.

 

Obviously the bottom 20% lags even further behind. However this position has improved markedly over the last 20 years with a much greater percentage of farmers moving up the performance scale into a higher quintile. It is tempting to ask how much smaller the national flock would be today, if the level of performance was still stuck at 1991 levels.

 

A great deal of work has already gone into the RMPP, first in preparation for obtaining Primary Growth Partnership funding and second in getting to the stage of signing up the parties to the limited partnership of industry contributors achieved a couple of weeks ago. There is a good cross section of participants including B+LNZ, six meat processors, two banks and Deloitte which have committed to $32.15 million which matches a similar contribution from PGP programme funding.

 

These are not small sums of money which the partners are willing to invest which should hopefully convince sheep and beef farmers that their future prosperity is considered really important. The target is to increase on farm revenue by $880 million and profit by $194 million per year by 2025.

 

The funding programme is designed to be spread over seven years, although Chairman Malcolm Bailey has said he wants to achieve the outcomes faster than that. There are five distinct projects, the first of which – to understand farmer behaviour – is already well under way towards completion before the end of this year.

 

This project is essential for setting a firm platform for the programme as a whole with one set of integrated information. This research seeks to establish across all farming groups barriers to change, what works and doesn’t work in farm extension, and what distinguishes the high performing farmer from the lower performing tiers.

 

The second project focuses on enhancing sector capability, using the banks’ expertise in governance and financial planning, alongside in excess of 80 pilot schemes to be carried out by farm advisors to achieve best practice in breeding, pasture, forage, technical innovation and the development of integrated applied farm systems. An important aspect of this work stream is to attract bright new talent to the meat industry.

 

The third project will concentrate on providing linkage and integration between farm reporting systems which at present are often not properly integrated. This will enable better farm management decision making through benchmarking against regional and national information. Another priority would appear to be teaching sheep and beef farmers the importance of budgeting, because a recent study found that 65% don’t budget, while a further 30% don’t budget effectively which only leaves 5% who do it properly.

 

While the other two projects certainly involve farmers, they also require significant input from other parts of the industry. AsureQuality has the task of ensuring consistency between processors’ QA systems which will make a common set of standards clear to all farmers. This will also enable the achievement of product consistency to meet the expectations of all customers.

 

The final project is one which farmers will no doubt welcome because it is designed to achieve efficiency in the chain linking farmer and processor. Knowing how much unnecessary transport happens at the moment, some of it driven by farmers and some by processors, this area touches on the need for capacity rationalisation which is not the responsibility of the RMPP. Deloitte has accepted responsibility for this piece of work.

 

I am encouraged by the amount of detail and careful planning which underpin this programme because it is of crucial importance to the future of the red meat sector. It demands a great deal of commitment from all the partners, including tax payers, farmers and commercial operators.

 

It won’t happen quickly, but far better to do it properly. Farmers stand to gain a lot from the programme’s successful implementation, but so do the meat companies, banks, all businesses that service or supply the sector, and ultimately New Zealand as a whole.

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The botulism scare that wasn’t

August 28, 2013

So Fonterra’s botulism contamination problem wasn’t a problem after all according to the tests conducted by the Ministry for Primary Industries. It is most unfortunate that Fonterra got it so wrong that it felt the need to wear a hair shirt and submit itself, not to mention its own management, the government and the country as a whole, to the worst public relations disaster imaginable.

 

The original tests were carried out by AgResearch which still stands by its test results, but according to MPI’s tests by global experts, the whey protein contained a different gene from the Clostridium botulinum.

 

MPI took it seriously, the government took it seriously, Gary Romano fell on his sword and two managers have been dismissed. China was completely spooked by the prospect of infant deaths, while Russia and Sri Lanka have discovered an opportunity to place bans, temporary or otherwise, on New Zealand dairy production.

 

Infant formula manufacturers will have suffered untold damage to their businesses, from image, financial and future sales perspectives.

 

The damage to our image abroad has been incalculable. When newspapers all over the world take delight in writing headlines such as ‘100% Manure’ and question our right to promote our tourism industry on the back of our clean, green environment, one wonders whether we can ever recover from this single mistake.

 

The answer is that we will in time, but perhaps nobody will ever really believe the 100% Pure claim again, even if it was never meant to be taken literally.

 

Having said that, the recent spate of food safety problems, among them the apparent discovery of traces of chemicals which weren’t there, is not all that surprising when one thinks about it.

 

New   Zealand’s exports are massively weighted towards agriculturally based food products, all of which have the potential to pose more or less serious food safety issues. This is why MPI’s inspection regime is so comprehensive, although the dairy production problems may suggest to an outside observer that the systems in place are not as failsafe as they should be.

 

Only a couple of days ago Greens spokesperson, Stefan Browning, has called for MPI to stop the practice of allowing meat companies to carry out some of their own inspection procedures and revert to all meat inspection having to be performed by AsureQuality’s meat inspectors. Browning said the meat industry is potentially a comparable risk to the dairy industry.

 

Therefore it’s a great relief that the systems didn’t actually fail in the case of Fonterra’s dirty pipes. Someone who ought to know told me more than a week ago that there would be no traces of Clostridium botulinum found in the whey protein, so it all appears to have been a big fuss about nothing very much.

 

However there is a question as to whether all food safety has suddenly been compromised by a fall in standards caused by devolving responsibility to the companies which produce or process the food products. There is no evidence of a sudden drop in standards in spite of recent events, although conspiracy theorists will assume that independent Government employed inspection has been compromised by companies being allowed to inspect their own products.

 

In this case it was a test by AgResearch, a Crown Research Institute, that provoked the contamination scare, although presumably the product had already been cleared by Fonterra’s in house testing laboratory.

 

In the dairy industry there are 49 Approved Recognised Agencies including both independent testing agencies and company owned laboratories. This latest chain of events does not necessarily invalidate this testing structure.

 

There would appear to be potentially a long queue of people and organisations looking for compensation, including dismissed managers, infant formula manufacturers whose businesses have been undermined, Tourism New Zealand whose brand has been dragged through spilt milk powder and all those businesses which depend on our international reputation.

 

It is ironic that Fonterra has just announced its highest ever payout to farmers which will of course be great for the economy, but that might not be enough to compensate for the damage caused by the company’s PR disaster.

Meat inspection no longer exclusively provided by AsureQuality

September 9, 2012

Last Tuesday AFFCO’s Imlay plant in Whanganui was the first to be allowed to introduce meat inspection by its own employees. Till then this function has been performed exclusively by government employed meat inspectors, originally employed by MAF, subsequently by the SOE AsureQuality. (more…)

Differences more apparent than real

April 24, 2012

In spite of recent disagreements, most notably between Keith Cooper of Silver Fern Farms and Beef and Lamb NZ, there doesn’t appear to be too much wrong with relationships between meat companies and the industry good organisation representing sheep and beef farmers (more…)