Some meat firms profitable
Federated Farmers’ paper on the meat industry’s future promoted myths and failed to recognise that some companies were thriving and profitable, a Waikato meat industry leader says.
Greenlea Premier Meats’ managing director Tony Egan said the federation’s discussion paper suffered from a ‘‘one size fits all’’ approach that could transfer all of the risk to farmers.
‘‘There has to be room in this debate for innovation – farmers are looking for professionalism from their meat processors. They don’t all think there is a need for wholesale change.
‘‘A lot of dairy and beef farmers in the North Island have a different outlook than the sheep farmers of the South Island.’’
Greenlea had several new collaborative ventures in the pipeline, Egan said.
This suggested there was cause for celebration in the industry and that it is not necessary to change the whole industry structure to achieve more innovation and build prosperity.
‘‘ While some companies still have big decisions to make on plant utilisation and profitability, there are those that have taken the challenge and are operating very successfully under the current competitive environment.
‘‘Maybe it makes sense for some consolidation in some areas, but competition is not all bad. It drives premiums and innovation.’’
Released earlier this month, Federated Farmers’ paper Meat Industry Options canvassed issues such as a Fonterra model and toll processing, which separated processing and marketing within the industry. It also discussed tradeable processing rights, which is a system similar to one that is used in the fishing industry, and an Anzac approach for marketing and research.
The farmer group was seeking feedback on the paper from their members so the organisation could write a strategy where reform would be central.
The belief that there was no money being made in the meat industry was a myth, Egan said.
Greenlea recorded above budget profits last year and has been growing and profitable for 20 years.
It has invested $45 million in research and development and innovative technology in the past five years to maintain growth and profitability.
It has an annual revenue of more than $ 280 million and employed around 450 people.
It has 250 customers around the world including the United States, Japan, Indonesia, Korea and Canada. Its biggest export market is the US, and it also sells to New Zealand customers.
Egan said there were other meat companies that were as equally profitable.
‘‘I wouldn’t regard us as the exception, I think there is a number, particularly in the smaller space where small to medium companies are doing OK.’’
He said half of the solution to improving the industry was recognising the problem.
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