Red-meat sec­tor set to strengthen

South Waikato News - - RURAL DELIVERY -

The plan­ets are lin­ing up for red-meat farm­ers to put decades of low prof­its and lack of rein­vest­ment be­hind them.

New Zealand’s red-meat sec­tor shows signs of re­gain­ing a star­ring role in the econ­omy, in a sur­vey by the ANZ bank.

Dur­ing the past two decades, red-meat farm­ers have missed out on the same gains as dairy farm­ers. This was be­cause of de­creas­ing real prices, in­creas­ing costs, lack of rein­vest­ment and an in­dus­try struc­ture that dis­cour­aged col­lab­o­ra­tion and mak­ing the most of economies of scale.

The bank sur­vey of 779 farm­ers found that most were plan­ning to in­vest in their farms to in­crease pro­duc­tiv­ity and to take ad­van­tage of ris­ing global de­mand for pro­tein.

ANZ com­mer­cial and agri­cul­ture man­ag­ing direc­tor Gra­ham Tur­ley said the sur­vey found the sec­tor was con­fi­dent that con­di­tions were right to re­gain some of the lost mo­men­tum and play a big­ger role in the econ­omy.

‘‘Farm­ers we spoke to had ac­tive strate­gies in place to take ad­van­tage of ris­ing global de­mand for pro­tein, and ad­vances in agron­omy and ge­net­ics to in­crease pro­duc­tion,’’ Tur­ley said.

Struc­tural is­sues within the in­dus­try re­mained un­re­solved.

How­ever, many farm­ers be­lieved so­lu­tions were emerg­ing that would lead to more in­te­grated sup­ply chains.

Tur­ley said red meat was likely to ex­pe­ri­ence faster pro­duc­tiv­ity gains than dairy in the years ahead.

The top 20 per cent of farm­ers were achiev­ing pro­duc­tiv­ity about four times more than the av­er­age, ir­re­spec­tive of land class and lo­ca­tion.

They had the con­fi­dence to rein­vest prof­its to lift pro­duc­tiv­ity and gen­er­ate long- term wealth, he said.

The sur­vey was part of the bank’s sup­port for Beef+Lamb New Zealand’s Red Meat Profit Part­ner­ship ini­tia­tive.

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